Sayers v Sayers

The Sayers Brothers and their Dyraaba Property - 1993 to 2018

1. The following is a narrative of the history relevant to the relief in issue in these proceedings. This narrative represents the Court's findings on the matters covered, except to the extent that the context indicates that only the parties' allegations are being recorded in these reasons. For reasons of economy this narrative does not always include reference to versions of the facts that the Court has rejected.
2. But before that narrative begins, something should be said about the credibility of the principal witnesses, Keith, Toni and Inesita, who all gave oral evidence.

Credibility of Parties and Witnesses

1. Mr Keith Sayers. Mr Keith Sayers is a witness of little credibility. I generally do not accept what he says, unless it coincides with objectively established, mutually accepted, or clearly incontestable facts. He was prepared to deny the obvious in documents shown to him. He gave responses that were designed to obfuscate the fact that he was not answering questions. He denied that he gave instructions to his solicitors to correspond on his behalf when he must have done so. He could not adequately explain why he had not made any of his claims against the estate earlier than he did. And he mentioned having dealt with lenders such as La Trobe. There was no evidence that these lenders had advanced any funds to either Inesita and Keith, or to Bill.
2. Keith's evidence was also at times vague and failed to illuminate why he had acted the way that he did. He could not really ever explain satisfactorily why he did not confirm with Bill, his brother, that Bill would honour the promises that Keith alleges that Bill had made to him, especially when by March 2007 Bill was showing, after Bill's marriage to Toni, signs of abandoning what Keith says he believed were promises to him.
3. Keith says he did not confirm Bill's alleged promises, because he knew Bill would honour the promises. But that explanation does not stand up, for example, against the letter of 5 March 2007 sent on Bill's behalf by Walters solicitors which showed a clear intention not to take any future responsibility for the mortgage over the property. The only other credible explanation for Keith's inaction is that he knew that any promise that Bill may have made either was never intended to be binding, or was no longer binding. That is what I infer Keith understood.
4. Ms Toni Sayers. The Court found Ms Toni Sayers to be a reliable and honest witness. She freely conceded she did not know much about the detail of the discussions between her late husband, Bill, and Keith. She was careful not to speculate beyond what she actually knew. The challenge to her credibility in cross-examination failed.
5. Toni's evidence itself is enough to infer that the Statewide Loan advances were all for Keith and Inesita's benefit, not Bill's benefit. That is what Bill had told her. And that is consistent with her interactions with Keith and Inesita.
6. Toni had a tendency at times to speak quickly and in a somewhat childish manner. This was due to some of her traumatic childhood experiences. But the Court took this into account and it did not impair her credibility in any way.
7. Mrs Inesita Sayers. The Court was cautious about Inesita's evidence. She seemed strongly committed to securing the inheritance of her two sons George and Neil. She was always supportive of versions of events that would benefit them. But she did not have any direct knowledge of promises made between Bill and Keith and could give little evidence of value about the Contract/Promissory Estoppel claim. The Court does not place much weight on her evidence about the Loan claim: she was not aware of the early dealings between Bill and Keith and she did not appear to be closely involved in the various rollovers of the loans that ultimately lead to her and her husband's obligations on the Statewide Loan.
8. Ms Marion Perkins. Ms Marion Perkins is Keith's sister. She was a reasonably reliable witness. She gave some support for the inference that Bill had made some kind of promises to Keith about Keith's sons George and Neil inheriting the property one day. But her account of these conversations with Bill was of events in the early 1990s. She accepted she had a vague memory as to dates and did make mistakes about placing events in time. But even if her recollection of the conversations between Bill and Keith about Keith and his sons inheriting the property was partly accurate, her evidence does not support a finding that the statements made were ones upon which it was reasonable for Keith to act many years later without further inquiry.
9. For example, many things had changed after 1993 when the promise is said to have been made. The debt that had possibly existed between the brothers in 1993 was very different from the position at the time and that debt may indeed have been paid off since then.

The Property is Acquired in the 1970s

1. The property is located on Dyraaba Road, Dyraaba, a locality about 25 km north-west of Casino, a city on the north coast of this State. The property is comprised of several parcels of Real Property Act 1900 land: Lot 138 in DP 755732; Lot 1 in DP 254058; Lot 28 in DP 855785; Lot 29 in DP 855785; and Lot 30 in DP 855785.
2. Bill acquired the various parcels of land comprising the property between 1973 and 1977 in the following sequence: 1. Lots 28, 29 and 30 in DP 855785 (Lots 28, 29 and 30). This land was originally the land in Portion 270 in the Shire of Kyogle Parish of Queebun County of Rous, which was leased to Bill on about 5 July 1973 pursuant to Group Purchase Lease 1944/1. On 18 September 1985, this land was converted into freehold title, and became the land in certificate of title Volume 15380, Folio 85. On 14 December 1988, the land was converted to Folio Identifier 270/755732, and subsequently on 17 January 1996 was converted to Folio Identifiers 28/855785, 29/855785 and 30/855785. 2. Lot 138 in DP 755732 (Lot 138). This land was originally the land in certificate of title Volume 5615 Folio 160, which was purchased by Bill on 2 July 1975. On 20 October 1975, this land was converted into certificate of title Volume 12906 Folio 92, and which was subsequently converted on 27 November 1991 to become Folio Identifier 138/755732. 3. Lot 1 in DP 254058 (Lot 1). This was originally the land in certificate of title Vol 13261 Folio 153, which land was granted to Bill on 4 March 1977. On 28 October 1987, this land was converted to Folio Identifier 1/254058.
3. Through transactions between them in 1977 and 1979, Keith became a co-owner with Bill of these various parcels of land. The applicable title details of each of these parcels at each point of time are set out above. So it is possible now to explain the transactions whereby Keith became a co-owner without again identifying the previous title details of each parcel at the time the transactions occurred. The following represents a short summary of the subsequent transactions: 1. On 20 July 1977, Bill transferred the land, which is presently Lot 138 and Lot 1, to himself and Keith as tenants in common in equal shares; and 2. On 9 August 1979, Bill transferred the land which is presently Lots 28, 29 and 30 to himself and Keith as tenants in common in equal shares. When this land was converted to freehold land in 1985, Bill and Keith became the registered proprietors as tenants in common in equal shares.
4. At the time of these transactions in 1977 and 1979, the titles to the property were all unencumbered. Keith says that he purchased his interests in the property in cash. There are no documents that would tend to contradict this statement and the Court accepts it.
5. Thereafter, Bill and Keith remained the joint registered proprietors of the property as tenants in common in equal shares, until Bill's death in June 2008.
6. Before his marriage to Toni, Bill had made a will in May 1993 that gave the whole of his estate to George and Neil. The property comprised the principal asset in his estate.

Bill and Keith's Partnership

1. Keith's evidence is that by the late 1970s not only had these property transactions occurred but that he and Bill had entered into an informal partnership agreement to raise cattle on the property. This evidence can be accepted. The brothers do seem to have used the property in partnership for raising cattle.
2. Bill and Keith took some early financial advances from Westpac to fund the conduct of that partnership. Bill and Keith mortgaged the property to Westpac, which mortgage was registered in February 1989 first to secure advances to Keith and Inesita. These advances are unlikely to be related to Bill and Keith's farming and trading partnership but to have been obtained for Keith and Inesita's personal or domestic purposes.
3. Bill and Keith further mortgaged the property, which mortgages were registered respectively in September and December 1989 to secure advances to them both; these latter mortgages are likely to have been for partnership purposes. The form of the registered mortgages do not record the amount borrowed on each security. At this distance in time the evidence does not permit the court to draw clear inferences about how these funds were used other than that they were likely to have been applied for the benefit of the named borrowers.
4. Keith says that an amount $25,000 was drawn down on the facility in his and his wife's name and the money was used to purchase a second-hand truck use in the partnership but the truck was later sold and the proceeds were paid back into the partnership cheque account. But this seems quite unlikely. Why Bill and Keith, who apparently had sufficient security to fund the partnership from their own joint assets, would purchase a partnership asset from an external borrowing in Keith and Inesita's names, remains something of a mystery. The more probable inference is that the first advances on the Westpac facility in Bill and Inesita's names were advances made for their sole benefit and not for partnership purposes.
5. Perhaps the only clear inference that can be drawn is that Bill and Keith's partnership, when active with secured finance, was a short-term affair. It seems to have lasted only between about 1989 and 1992. After that the brothers went their separate ways and such residual external partnership liabilities as there were between them were not added to by Bill. Instead Keith and Inesita used the Westpac facility that remained for their own purposes. The subsequent evidence strongly suggests that Bill could not have been using the joint borrowing facilities that he had with Keith for partnership purposes, and certainly not for his own purposes. He knew almost nothing of the amount owing on those facilities from time to time: conduct that was hardly consistent with someone involved in borrowing on behalf of a partnership.

Bill's Alleged Promise to Keith in 1993

1. Keith says that Bill made a promise to him in or about 1993 that George and Neil would inherit Bill's share of the property. This promise was said to have been made in a conversation between them that year. Keith's account of the conversation is as follows.
2. Keith says Bill was suffering from diabetes and kidney disease by the early 1990s when he complained to Keith about being short of money in words to the effect: "Bill: I don't have the money to pay any more."
3. In 1993 Keith says Bill was suffering from ill health, and that he, Keith, had a conversation with Bill in words to the following effect: "Bill: You've been paying most of the mortgage instalments and doing most of the partnership work. If you'll continue doing this in the future, I will leave my interest in the Property to you. Keith: I don't want you to leave the Property to me. Leave it my sons(sic)".
4. Later in 1993, Keith says Bill said to Keith words to the effect: "Bill: I've made a will leaving my estate to your sons".
5. In reliance upon Bill's promise to leave his estate to Keith's sons, Keith says he continued to pay most of the mortgage instalments on the property and to do most of the partnership work on the Property. Keith says he paid about 75% of the instalments on the Westpac mortgages, and Bill paid about 25% of the instalments. Keith says that Bill never recanted on that promise.
6. I do not accept that these conversations occurred in these terms. It is probable, as Mr Robertson submits on Toni's behalf, that having made a will in 1993 giving the whole of his estate to Keith and Inesita's sons, George and Neil, that Bill said something within the family about his proposed testamentary gift. I accept that some conversation about this subject did take place between Bill and Keith. The mere fact that Bill had made a will at this time makes such a conversation probable. But I do not accept that the conversation was in the terms to which Keith deposes. In my view the conversation probably only went so far as Bill conveying to Keith what he had put in his will. That of course did immediately convey that Bill intended to benefit George and Neil on his death. That is what the will said. But I do not accept that Bill bound himself to that result in exchange for Keith, "paying most of the mortgage instalments" and "doing most of the partnership work". This is so for a number of reasons.
7. First, the Court does not accept Keith as a witness of truth. The Court is therefore left in the position of inferring what was said between Bill and Keith from the objective probabilities.
8. Second, Keith made later claims that were quite inconsistent with this conversation. There can be no doubt that on Keith's version he had rejected the idea that the property be left to him and rather that it should go to George and Neil. But as will be seen, he later inconsistently claimed that Bill made the promise that the property would pass to him, Keith, not to George and Neil.
9. Third, there was no future partnership between Bill and Keith. It makes no sense that Bill would make a condition of leaving his interest in the property to Keith (or the sons) that Keith should continue to do "most of the partnership work". About the same time that Bill made his will, the farming and trading partnership between the two came to an end. Keith conceded as much; and he and Bill traded separately from that time on, with Bill remaining at the property and Keith undertaking contracting work elsewhere. There is no evidence of any mixture of financial assets between the brothers after 1993. Keith could not explain how the partnership continued to trade. Any partnership that existed was then dissolved in substance, although there was no formal distribution of partnership assets. And the dissolution of the partnership and subsequent separate business activity of the brothers is confirmed by a letter from Keith's then solicitors, Messrs Howland Long, on 21 August 2008.
10. The 1992 "partnership accounts" of Bill and Keith's business that are in evidence are the final partnership accounts made between them. They relate to the year ending 30 June 1992. And Keith agreed that the partnership stopped lodging tax returns in 1993. The accounts at best look like accounts relating to Keith's interest in a partnership; rather than a set of joint partnership accounts between the brothers. But importantly, the accounts show that Keith has a liability of $25,397 to Bill and that Keith's share of the net trading loss for the 1992 year was $23,558. Proprietor's funds of the partnership fell from $155,911 in 1991 to $115,511 in 1992. Keith's own evidence was that the partnership was in financial trouble in 1993 and would cease trading. There was a sale of assets afterwards. It is improbable that in 1993 Bill was contemplating that Keith would do future work for him in the partnership.
11. Also the net balance shown as owing to Bill from Keith when the partnership last traded tends to show that if and when a partnership financial reconciliation were to occur, that Keith had a greater financial responsibility than Bill to meet the partnership's external liabilities.
12. And Keith's then-lawyers in 2008, Long Howland, contended that the partnership ceased in or about 1993-1994 and that the partnership did not exist at the date of Bill's death in 2008. I accept this is far more likely to be correct than Keith's evidence in the proceedings that the partnership continued after 1993.
13. Perhaps some of the best evidence of just when the partnership ended and in what circumstances came from a contemporaneous letter written by the partnership's accountant who explained that, "not long after possibly 30 June 1988, I believe a decision was made to terminate the partnership and Bill continued to operate the cattle farm in his own name and [Keith] continued to operate in his name the earthmoving business. To the best of my knowledge each retained separate ownership of the respective farm and earthmoving assets, with the exception that the farm property itself remained in joint ownership. No partnership accounts have been prepared by us since that time." With the exception that the date should be adjusted from 1988 to 1992, that statement can be accepted as accurate.
14. The accountant went on to say, "some years later [Keith] left the area to continue his earthmoving operations and Bill continue to operate the farm…". The accountant added that he was aware that "amounts of money have been borrowed by [Keith] since the termination of the partnership and that the farm has been used as security for those borrowings". But then the accountant makes clear by implication that by 1997, none of the partnership's external borrowings were to Bill's account: "a review of Bill's financial statements since the commencement of the financial year ended 30 June 1997 (the oldest available), shows no amount of loan interest has been claimed as an expense against Bill's farm income for at least the past 12 years." This tends to suggest that Bill's accountant did not regard him as having any responsibility for these external borrowings after a time as early as 1985.
15. Fourth, The fact that an amount of $25,497 was owing to Bill on the partnership accounts in 1992 also neutralises Keith's other explanation for their arrangement, that Bill did not have the funds to continue to make the mortgage payments due on the property. Bill was in a strong position to simply ask Keith to make the next $25,000 worth of payments to the mortgagee on behalf of the partnership to discharge the debt that had accrued between them.
16. Fifth, the alleged 1993 agreement was never revisited. If the words that Keith alleges were spoken in 1993 were indeed said, one might have expected that Keith in particular would have returned to them to seek reassurance from Bill that the agreement was still in place. Keith himself concedes that the agreement was never revisited.
17. Keith and Inesita's sons, George and Neil, give some evidence on the subject of whether Bill made a promise to leave the property to them. They were not cross-examined on their affidavit evidence. But the statements attributed to Bill to which they depose are little more than bare indications that one day they would inherit the property. George says that Bill said to him, "One day you and your brother will own this farm so it wouldn't hurt to know more about it." Neil says that Bill said to him, "Well you should visit [the property]. My half of the property will become yours and your brothers when I am gone."
18. The statements were quite consistent with Bill's 1993 will. They do not include any promissory element that the will would not be changed or that Keith was working in the partnership and providing financial assistance to Bill in order to earn that outcome over the longer term. Their evidence is quite consistent with the Court's own conclusion that probably all that Bill said to Keith in 1993 was to convey to him the contents of the will he had just made.
19. Keith's evidence is that after discussion with Bill in 1992 that he indeed paid 75% of the instalments of the Westpac mortgages and that Bill paid about 25% of those instalments. Even if the Court accepts that those are the payments that were made, that payment ratio does not prove the agreement alleged. In my view, the fact that payments occurred in that ratio is probably more consistent with the fact that the brothers mutually acknowledged in 1992 that by then Bill was far less responsible than Keith for the external debts secured over the property that the two of them had incurred up until 1992. That is the logical inference in part because the mortgages to Westpac secured over the property from 1989 either benefited Bill and Keith or benefitted Keith and Inestia. There were no separate borrowings ever taken out by Bill himself for his own domestic purposes. Nor does Keith allege that Bill was using partnership advances for his own purposes.
20. Bill and Keith making payments in a 25:75 ratio until the Westpac liability was paid out in May 1997 (and perhaps beyond) was probably quite enough for Bill to substantially reduce whatever his part of the residual liability was of the brothers' debts associated with their then defunct partnership. The partnership ceased trading in 1992 when Bill was owed $25,397 by Keith and when the total major external financial liabilities of the partnership in 1992 were $72,000 on a Westpac personal loan and $21,815 on a Westpac earthmoving account. Given these facts, by the time of the 1997 re-finance, without either Bill or Keith incurring more liabilities on that account, Bill's overall responsibility for the external loan repayments would be likely to have reduced to zero long before Keith's. And Bill's later behaviour strongly indicates that he thought his liability had reduced and by 2007 was zero.
21. But there is another witness to these conversations. Marion Perkins says, that at a time when Bill's health had deteriorated considerably, she remembers Bill saying to her: "There is a lot of debt on the property."
22. She said to him in reply: "How are you going to pay the debt back, Bill?"
23. She says Bill replied: "I have made an agreement with Keith. Keith and Inesita will take full responsibility for my share of the loan as well as for Keith's share. In return, I have agreed to leave my share of the property and my estate to Keith and Inesita's sons, George and Neil."
24. Marion Perkins was a better witness than either George or Inesita. But she was quite unsympathetic to Toni and somewhat dissatisfied about the way Toni had cared for Bill after their marriage and how little Toni had included Bill's family in the arrangement of his funeral. In my view, she would be unready to come forth an account of events that would prefer Toni over her surviving brother Keith. Her evidence would allow the Court to infer an agreement of the kind upon which the plaintiff relies. But because of her outlook against Toni, the Court treats her evidence cautiously.
25. It is highly improbable that the conversation she says she recalls occurred after Bill married Toni. I accept Toni's account that she and Bill had a good but short marriage. And I accept Toni's account that Bill wanted to make a new will in her favour at the time of his death.
26. But I also accept that Marion did have some conversation with Bill about this subject before Bill married Toni in 2005, though after 2000 when he was becoming ill. But I do not accept that the conversation included Bill indicating that Keith and Inesitia had taken responsibility for his share of the loan. For the reasons earlier indicated, his share of the loan was by then minimal or zero and only a few year later he was making clear through solicitors that Keith was fully responsible for the loan without Bill indicating that the price of Keith having full responsibility for the loan was some promise that he, Bill, had made such as this one.
27. Finally, Inesita Sayers was also a witness. But she says that she only overheard from a distance the conversation between Bill and Keith about this issue. Because her perception of the conversation was only from afar, her evidence was insufficiently complete and reliable for much weight to be placed upon it.

The Wespac Default and the Refinance to Interstate - 1994 to 1997

1. The Westpac mortgage advances to Keith and Bill went into default in August 1994. Westpac demanded a repayment from them of $174,696.78 under a Real Property Act, s 57(2)(b) notice. This triggered a clearing sale in which surplus farm equipment and surplus bulldozing and earthmoving equipment owned by Keith was sold. It is unlikely that all of Keith's bulldozing equipment was sold because he continued his earthmoving contracting business thereafter.
2. In May 1997, all the Westpac mortgages were discharged. New mortgages were given by Bill and Keith over the property to Interstate Mortgage and Investments Pty Limited ("Interstate") to secure a loan to both of them. This registered mortgage also does not record the sum then being advanced. But the fact that Bill and Keith are both recorded as borrowers on the Interstate mortgage indicates that at that time in May 1997 it was still mutually acknowledged that Bill possibly had some responsibility to meet the residual external debts of the defunct partnership. But whatever the quantum of those residual external partnership debts was, in my view, by the time that the Interstate facility was paid out in four years later 2001 and replaced by facility entirely in Keith's name as a borrower, Bill's responsibility for those residual external partnership debts had been entirely satisfied.

The Wesfarmers Loan - 2001 to 2006

1. In January 2001, Keith arranged a rollover of the existing loan facilities. He obtained a loan from Wesfarmers Dalgety Ltd, Dalgety Ltd and the Primary Industry Bank of Australia Ltd ("the Wesfarmers Loan"). The Wesfarmers Loan was secured by first mortgage over the property. For the first time Keith was named as the sole borrower on this loan, with both Bill and Keith the mortgagors providing security.
2. Keith seems to have been the moving party in arranging this rollover. The natural inference from the change at this time to Keith as the sole borrower on the Wesfarmers facility is that both Bill and Keith recognised by then that Bill was no longer responsible for any of the remaining debt. That is the inference that the Court in fact draws.
3. Keith has quite a different explanation for Bill disappearing as a borrower on the Wesfarmers facility. He says it was clear by then that Bill was not in a position to be a good earner and would not have been an acceptable borrower to Wesfarmers. But it seems unlikely that a commercial lender would decline to elevate Bill from a more challenging (from Wesfarmers' point of view) security recovery position, of being a third party mortgagor, to become a borrower, if both he and Keith genuinely thought that being a borrower was his true status.
4. But five years later, by September 2006, Keith was in default under the terms of the Wesfarmers Loan. The lenders were demanding repayment.
5. In October 2006, Keith and Inestia applied to Statewide Secured Investments Pty Ltd (Statewide) for a loan of $400,000 to refinance the Wesfarmers Loan.
6. As at 8 February 2007, Keith owed $374,856.54 under the Wesfarmers Loan. This debt was the subject of a Real Property Act, s 57(2)(b) notice on that date. The notice said that the debt was comprised of three parts: 1. a term loan of $135,000; 2. a seasonal loan of $25,000; and 3. unpaid interest and principal of $214,856.54.
7. The original advance was $160,000 ($135,000 plus $25,000). But a January 2007 Farm Debt Mediation Act 1994 Notice says that by then the Term Loan had reduced to $105,858 and the Seasonal Loan had expanded to $205,992.80. This Notice did not account for all accrued interest.
8. On 26 March 2007, funds of $400,000 were advanced under the Statewide Loan. Of those funds the sum of $381,288, was used to pay out the existing mortgagee and discharge the Wesfarmers Loan.
9. The Court infers from the contemporaneous documents that in March 2007 Bill did not have knowledge of the outstanding balance of the Wesfarmers Loan. Samples of this correspondence suffice to establish Bill's lack of knowledge.
10. Bill had been requested as the co-owner of the property to consent to the proposed rollover to Statewide. By letter dated 16 February 2007 Bill's solicitors requested from Keith's solicitors details of the "particulars of the amounts outstanding" on the Wesfarmers Loan, as follows: "As you are aware, our client is not the borrower under the relevant facility. Please provide us as a matter of urgency as to the particulars of the amount outstanding. We had understood that the loans were for a total of approximately $150,000.00 and our client cannot understand where a figure in the order of $374,856.54 is arrived at."
11. Keith's solicitors responded by letter dated 21 February 2007 as follows: "The purpose of this loan is to pay out the mortgagees issuing that Notice. The expedition of this new loan would assist in meeting the current mortgagee's timetable. The reason the debt has increased is because there have been additional borrowings. The amount of the new loan is simply a reflection of the existing indebtedness."
12. Keith's solicitors' reply is important. It accepts without demur that Bill is wholly unaware of the outstanding balance and the history of the loan that had created that outstanding balance. Keith's solicitors would hardly have committed the time and resources that they did to responding to this request, if Keith had thought that this was information already well known to Bill.

The Statewide Loan - March 2007

1. The Statewide Loan is evidenced in a written loan agreement and a guarantee and indemnity document dated 26 March 2007 made between Statewide as lender, Keith and Inesita as borrowers, and Keith, Inesita and Bill as guarantors.
2. Bill and Keith each also executed a first mortgage that was registered over the property as security for the Statewide Loan (being Mortgage AD30192).
3. The Statewide Loan and Mortgage AD30192 were subsequently transferred to Permanent Custodians Ltd on 10 April 2013, and then in turn to Australian Executors Trustees Ltd on 22 June 2013. But those transfers have no significance to the issues raised between the parties to these proceedings. So for convenience this facility will continue to be called "the Statewide Loan" in these reasons.
4. Just before agreeing to the Statewide Loan refinance, Bill took critically important steps to protect his own financial position. Bill gave instructions to his solicitors to expressly exclude the possibility of any continuing liability on his part as a borrower under the Statewide Loan. He only consented to the transaction proceeding further with him as a guarantor providing a mortgage in support of his guarantee. In a letter dated 5 March 2007 (which enclosed the Statewide Loan documents signed by him), Bill's solicitors made very clear to Keith and his solicitors that henceforth Bill was not to be regarded by Keith as a borrower and the future loan obligation was entirely Keith's responsibility. The 5 March 2007 letter said as follows: "SAYERS MORTGAGE TO STATEWIDE SECURED INVESTMENTS LIMITED We return the documents which have been signed by our client. The documents are returned on the basis that it is made clear to the Lender that no further funds are to be advanced to the Borrowers without the written consent of our client. We also provide the documents on the basis that the amount of the loan is being used for your client's purposes and accordingly upon any sale or transfer of any interest in the property the current debt is attributable to your client's interest in the property."
5. Keith's solicitors did not dispute this letter. At no time before the 26 March settlement of the Statewide Loan did Keith dispute that Bill's only future interest in the Statewide Loan would be as guarantor and mortgagor, and not as borrower. Keith should be taken to have accepted that the Statewide Loan was "for your client's [Keith's] purposes" and is ultimately "attributable to your client's [Keith's] interest in the property".
6. Keith's failure to dispute the Walters solicitors' 5 March 2007 letter is inexplicable if Keith thought that the debt that was then being rolled over to Statewide was also Bill's joint financial responsibility as borrower. His answers as to why he did not reply to, or even question, the Walters 5 March 2007 letter are wholly unpersuasive. He says he was prepared to take responsibility for the loan, on the basis that the property was to pass to his [Keith's] children. If that explanation is right, this was the moment when Keith should have asked Bill to clarify the part of the promise that he says he then believed Bill had made to him: the promise that the property would go to Keith's sons, the promise that Bill had failed to have mentioned in the 5 March 2007 letter.
7. By then proceeding to refinance in March 2007, without correcting Bill's misapprehension, Bill was entitled to assume Keith had accepted the Walter's assertion that the debt that was being refinanced was henceforth a debt that existed solely for Keith's purposes and that was only attributable to Keith's interest in the property. Even if there were a conversation of the kind that Keith now alleges, when Bill indicated through his solicitors in March 2007 that he was of a different view, Keith accepted that. So Keith's conscience was bound from that time onwards. Bill was entitled to assume that Keith accepted his point of view.
8. But why did Keith and Inesita take the Statewide Loan in their own names? They were both witnesses who presented to the Court as conscious of their own self-interest. If they genuinely thought that Bill was jointly responsible with either of them for the then outstanding debt, at the time of the rollovers to Wesfarmers and Statewide, they were not the kind of people who would have been reticent to insist that Bill remain as a borrower, if he really were a borrower. Their acquiesce in Bill taking no responsibility for the Statewide borrowing is because that reflected the true situation as it then stood.
9. Curiously, after a short confrontation about the Statewide Loan in 2008 after Bill's death, which is mentioned below, between 2010 and 2015 Keith neither raised the Statewide Loan with Toni, nor his claim that his sons were entitled to the property. By this time Bill was dead. Keith could therefore have been expected, if he were behaving reasonably, to wish to test the waters as to whether Toni was going to honour the promises that he thought Bill had made. But he did not.
10. Nor over this same period did Keith continue to press Toni to contribute to payments. As will be seen, he made one demand for contribution in 2008 then decided to let sleeping dogs lie, whilst in the meantime Keith's own family continued to use the property.
11. After the mortgage rollover to Statewide, Keith and Inesita admitted that their responsibility for that external liability was much greater than half, a matter which is inherently damaging to their loan claim, although that claim fails for other reasons. In February 2010 Keith's then solicitors, Nelson Keane and Hemingway Lawyers, offered to Walters to purchase the property from Toni for the sum of $100,000, explaining that the property was worth about $600,000, it had debt of $400,000 and that the parties therefore had equity in the property of $200,000. They justified the offer of $100,000 on the basis that they would have to meet the external liabilities to Statewide that were partly Bill's responsibility and therefore in turn the responsibility of the estate. But the liabilities that Keith's solicitors then attributed to Bill were far lower than those ultimately claimed in these proceedings. In March 2010, Nelson Keane and Hemingway wrote to Toni's solicitors, Walters, disputing that the whole $400,000 secured over property at that time was for Keith's sole use. Although Keith was not prepared to admit it, he clearly instructed those solicitors to say to Toni's solicitors "that approximately $135,000 [of the total amount owing on the mortgage] is joint debt".

Bill and Toni Sayers and Bill's Estate - 2005 to 2009

1. Bill and Toni Sayers were married on 3 December 2005. Their marriage was relatively short; about two and a half years. Bill died on 16 June 2008. He was then aged 59 years.
2. He did not leave a valid will. Bill's marriage to Toni on 3 December 2005 revoked Bill's 1993 will: Wills, Probate and Administration Act 1898, s 15(1) (as at 3 December 2005); and Succession Act 2006, s 12(1).
3. This Court granted Toni letters of administration of Bill's estate on 8 December 2008. Bill did not have any children. As the surviving spouse of an intestate who died without children, Toni is entitled to the whole of his estate: Succession Act, s 111.
4. The only asset of significant value in Bill's estate was his half share as tenant in common (with Keith) in the property.
5. In May 2009, Bill's one-half share in the property was transmitted to Toni by a Real Property Act Transmission Application registered on the title of each of the parcels of land in May 2009. Toni and Keith became the joint registered proprietors of the property as tenants in common in equal shares, until the property was sold by the trustees for sale in 2016.
6. Toni lived at the property from about the time of her marriage in 2005 until July 2009, about a year after Bill's death. She then left the property and moved to Muswellbrook. Toni has not returned to reside either temporarily or permanently at the property since July 2009.
7. Keith or a member of his family moved into the property soon after Toni left. They have been in sole occupation of the property ever since.

The Instructions for Probate - June 2008

1. After Bill died on 16 June 2008, Toni went (with her daughter Sonya Carey) to give instructions to Walters Solicitors on 19 June 2008 for the appointment of an administrator to Bill's estate.
2. Her instructions to Walters Solicitors on this occasion help resolve one incidental but important dispute in these proceedings. Toni insisted in her evidence that Keith had threatened her on her wedding day that she would be removed from the property after Bill died. Whether or not this threat had occurred was relevant to the Court's assessment of Keith's potential bias against her and his overall credibility.
3. Keith strongly disputed that he had issued any threats of this kind to her. He said she had simply invented this story to impeach his credit. But Toni rejected the claim of recent invention. And Toni's instructions to Walters firmly rebut the claim against her. The instructions as at June 2008 were recorded in handwritten notes by a solicitor at Walters in the following text: "Brother said to Bruce Murray owed whole lot, (W) stay as long as want but property is his. (w) then rung 'sorry about death'. Brother said on wedding day ? off property when Bill dies. Keith = Cec - was paying Guns also in (W)'s name Secured- gun safe Spoken to cops Cattledogs - 7 > Breeding $270/ + GST D/C to PWH"
4. The words in the solicitor's hand, "Brother said on wedding day? Off property when Bill dies" confirms Toni's evidence that Keith threatened her so that she would remove herself from the property, and confirms that what she said was not recently invented but was something Toni was asserting at the time of Bill's death and long before the hearing. But importantly on this issue the Court accepts Toni's evidence that Keith intimidated her in a number of ways to have her leave the property and rejects Keith's evidence to the contrary.
5. Keith did say that Toni would have to leave the property after Bill died. That Keith threatened this is certainly consistent with Keith then believing that he was entitled to possession of the property after Bill's death, in conformity with Keith's Contract/Estoppel Claim. But it also shows a more sinister side to Keith's conduct: that he was prepared to intimidate Toni because he harboured an antipathy towards her and regarded her as getting in the way of what he perceived was his entitlement to possession of the property. This incident was another reason why the Court does not accept Keith's evidence.

The July 2008 Demand

1. Within a month of Bill's death, through his solicitors Messrs Long Howland, on 1 July 2008 Keith made a formal assertion of Toni that "Half of the payments [to Statewide] fall to be paid by your late husband's estate in respect of that loan…" and on 3 July that Keith takes "extremely seriously". In answer to the suggestion that he and Inesita were solely responsible to repay the Statewide facility, Keith and she requested that she should contribute to the Statewide mortgage payments. Keith simply could not explain why he did not, at the same time, make his principal claim that Bill's half of the property would go to George and Neil even though he claimed to be aware of that claim in July 2008. And the alleged original agreement was that Keith would keep paying "most of the mortgage instalments". But here he was claiming back half of them.
2. Bill had not wanted the property sold. He wanted Keith to make interest payments on the mortgage to Wesfarmers and later to Statewide. Keith explains his acquiescence in making all these payments himself on the basis that Bill wanted Keith to make the interest payments for him, as part of his (Keith's) performance of the agreement for Bill to give the property to George and Neil.
3. But Keith's demand in 2008 was hardly consistent with this explanation. Keith in substance asking for a contribution to mortgage payments in 2008, as occurred, is not consistent with Keith believing Bill had agreed to leave the property to George and Neil in exchange for Keith taking full responsibility for the interest payments until Bill died. Rather, Keith's 2008 conduct in making this demand for contribution is far more consistent with a recognition on Keith's part that Toni had a continuing interest in the property and there was no agreement to leave it to George and Neil.

Later Administration of Bill's Estate - December 2008 to August 2016

1. Prior to the grant of the letters of administration to Toni in December 2008, Toni's solicitors had conducted a search to locate any other will or document purporting to embody Bill's testamentary intentions. None was found. In her application for administration, Toni had sworn and filed an affidavit disclosing the existence of the 1993 Will.
2. Following the grant of letters of administration, Toni's solicitors placed a notice in the 8 January 2009 edition of the Northern Star newspaper, notifying any persons with a claim on Bill's estate to send particulars of their claim within one calendar month. Bill's sister, Val, contacted Toni's solicitors after seeing this newspaper notice.
3. But Keith, George and Neil did not make any claim on Bill's estate in the claims period. They did not seek to advance any alleged promise by Bill to leave the whole of his estate to George and Neil. Nor did they raise any other facts in support of what would later become their Contract/Estoppel claim.
4. Keith, George and Neil first raised this contention in August 2016 when they filed the affidavit of Keith James Sayers of 25 August 2016 in these proceedings. In that affidavit, Keith deposed to a conversation with Bill in 1993 in which the alleged promise was said to have been made.
5. But this was more than 8 years after Bill's death, almost 8 years after the grant of the Letters of Administration, and about 23 years after the conversation allegedly took place.
6. The failure to raise the claim prior to August 2016 is profoundly troubling. Between about July 2008 and October 2011 the solicitors acting for Keith sent many letters to Toni's solicitors about the administration of Bill's estate. In those letters, Keith made various claims to the ownership of individual items of estate property, including cattle on the property, tractors and machinery on the property, antique furniture, spirit levels, axes and the like. But before August 2016 none of this correspondence mentions the alleged promise founding the Contract/Estoppel claim that George and Neil were entitled to the whole of Bill's interest in the property after Bill's death.

The Conveyancing Act, s 66G Proceedings - July 2015 to October 2016

1. The Statewide Loan was an interest-only loan. Keith and Inesita paid all the interest payments due on the loan by direct debit from their bank account. In the period between 15 July 2007 and 31 August 2015, these interest payments totalled $335,703.06.
2. By 31 January 2015, the outstanding balance on the Statewide Loan was $394,256.43. On 18 May 2015, Statewide demanded repayment of the Statewide Loan from Keith and Inesita on or before 31 August 2015. But Keith and Inesita did not repay the Statewide Loan within the time Statewide required.
3. Rather than repay the Statewide Loan, Keith took a different course. On 17 July 2015, he filed a Summons in this Court seeking orders for the appointment of the statutory trustees for sale of the property pursuant to Conveyancing Act, s 66G. Again, this is a curious course for Keith. It is hardly consistent conduct for someone who says he really believed he, or his sons, were entitled to the whole of the property and that Toni must have held her share of the property on trust for him. If that were his true state of mind, seeking a declaration as to his and his sons' entitlement was the logical course to be expected.
4. Toni did not appear in these proceedings before the s 66G orders were made. She gives several reasons for her non-appearance, all of which the Court accepts. She says that: (a) she received notification of the proceedings late; (b) she did not have the funds to instruct lawyers to act on her behalf; and (c) at the time, she was unwell with serious health problems and was in no state to attend Court herself.
5. On 11 September 2015, in Toni's absence, Darke J made orders that Mr Frank Lo Pilato and Mr Mitchell MacKenzie Herrett of RSM Australia Partners be appointed as joint trustees for sale ("the trustees").
6. On 25 February 2016, the property was sold at a public auction to Keith and Inestia, who were the highest bidders. They acquired the property for $680,000. Settlement of the sale took place on 8 July 2016.
7. The trustees applied the proceeds of sale of the property to meet the following liabilities: (a) $400,305.14 was paid to the mortgagee, Australian Executor Trustees Ltd which had acquired the mortgage supporting the Statewide Loan by assignment; (b) $522.20 was paid for the mortgagee's legal fees; (c) $22,440.00 was paid to the real estate agent as commission on the sale; (d) sums totalling $52,315.36 were paid to the Trustees for their fees and disbursements; and (e) $204,254.30, being the net proceeds of sale, was then paid into Court.
8. Not long after the trustees paid the sale proceeds into Court, Keith's solicitors, Oliveri Lawyers, made a somewhat peremptory demand to Toni's solicitors, Baker Deane & Nutt Lawyers. On 27 July 2016, Keith's solicitors demanded that within 24 hours Toni consent to all of the remaining net proceeds of sale of the property being distributed to Keith on account of various payments he had made in respect of the property.
9. The Oliveri Lawyers' letter specified that Toni should consent to pay: (a) $8,848.78 for "payments made by the Plaintiff for Council rates on the property"; (b) $55,096.90 for "payments made by the Plaintiff for improvements to the property"; and (c) $183,458.90 for "interest paid by the Plaintiff on behalf of the Defendant in respect of the mortgage on the property for the period 1 February 2012 to 16 February 2015".
10. Perhaps unsurprisingly given the short time afforded to her, Toni did not consent to the proposed orders. But Keith's demand seems to have galvanised her into action to assert her interest in the funds in Court.
11. On 1 August 2016, Toni sought leave to file a Cross-Summons and Cross-Claim against Keith and Inesita. In this cross-claim Toni sought, inter alia, a declaration that Keith and Inesita account to, indemnify or reimburse Toni for the sum of money paid out of the proceeds of sale of her one-half share in the property to discharge the Statewide Loan. Leave was required to file these pleadings, as the permitted period for filing cross-claims after originating process had expired.
12. The response to Toni's application for leave to file a Cross- Claim produced another curiously inconsistent assertion from Keith's side, namely that the property had been "bequeathed to Keith Sayers". The promise that Keith soon thereafter alleged in his affidavit evidence was that the property had been promised to George and Neil.
13. Keith initially refused to consent to leave being granted to Toni to file this Cross-Summons and Cross-Claim. But in September 2016 consent was ultimately given. On 5 October 2016, Toni filed the Cross-Summons and Cross-Claim.
14. Subsequently on 14 October 2016, Keith, George and Neil filed an Amended Summons, and subsequently on 7 November 2016 filed a Statement of Claim. They first raised their Contract/Estoppel Claim in this amended process.

Analysis of the Claims

1. This section of the Court's reasons analyses each of the parties' claims: the plaintiffs' Contract/Promissory Estoppel claim; Loan Claim; Rates/Improvements Claim; followed by Toni's Reimbursement Claim.

The Contract/Estoppel Claim

1. The plaintiffs' Contract/Estoppel claim fails on several grounds.
2. Keith's evidence is not accepted. Keith has not established that any promise was made by Bill as is alleged. Nor does the Court accept that it was reasonable for Keith to rely upon whatever was said. Keith is the principal witness who gives evidence of the alleged promise being made in 1993. Bill cannot now give evidence. Keith's credibility is in issue. As a result Keith's evidence is examined with care: Plunkett v Bull (1915) 19 CLR 544 at 548-549; and Blacket v Barnett [2017] NSWSC 1032 at [243]-[258]. But Keith's evidence cannot withstand the scrutiny. The case really fails at the threshold.
3. But even if it were to be partially accepted, the 1993 conversation, whatever it was, was not one by which the parties intended to enter legal relations. There was no indication by either party that the parties indicated, intended or expected their arrangements to have legal force: Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12 per Meagher JA at [224] - [237].
4. Nor was there any detrimental reliance by Keith on any promise by Bill. Keith did not in fact work in the partnership after 1993, because the partnership did not continue. And as to mortgage payments, as the Court has earlier indicated, even if the Court were to accept Keith's evidence that he paid 75% of the instalments of the Westpac mortgages and that Bill paid about 25% of the instalments thereafter, that ratio was probably roughly indicative, for the duration of the Westpac facility and the interstate facility, of what was required for Bill to extinguish such residual liability for external debts of the partnership as he may have had to Westpac and Interstate. The Court does not accept that Keith was taking on any greater liability for making payments to Westpac than that for which he was already genuinely responsible.
5. The claim would also be statute-barred. The limitation period for a claim for breach of contract is 6 years running from the date on which the cause of action first accrues to the plaintiff: Limitation Act 1969, s 14(1)(a). By analogy, the 6 year limitation period will also be applied to a claim based on an equitable estoppel: see eg Gerace v Auzhair Supplies Pty Ltd (In liq) (2014) 87 NSWLR 435 at [70]-[71].
6. Any cause of action the plaintiffs had for breach of contract, or alternatively equitable estoppel, first accrued on 16 June 2008, when Bill died without leaving the whole of his estate to George and Neil in conformity with his alleged promise. But the plaintiffs did not commence the Contract/Estoppel Claim until October 2016, more than 6 years after the cause of action accrued to George and Neil.
7. Laches is an insuperable obstacle for the Contract/Estoppel Claim. Equitable relief may be refused where the plaintiff's delay would make it unjust to grant the relief he seeks: RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) at [38-040]; Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435 at [73].
8. The plaintiffs' delay in raising the Contract/Estoppel Claim would make it unjust to grant the plaintiffs the equitable relief. The defendant has expended monies administering Bill's estate. The market value of the estate was principally represented by Bill's interest in the property. I accept that Toni applied for administration of the estate engaged in its administration and expended estate funds in the belief that she was a co-owner of the property. Much of the administration expenditure related to Bill's share in the property, including rates of $7,806.72 and insurance of $5,931.72. Toni has ordered her affairs in the belief that she was the sole person entitled to Bill's estate, and that she would have the benefit of the proceeds of her sale of her one-half share in the property.
9. The plaintiffs have not adequately explained this delay in raising the Contract/Estoppel Claim. They had all the information they needed to bring the claim before Bill died.
10. The delay has deprived Toni of evidence. She is now less able to defend the Contract/Estoppel Claim. Evidence that would have been available to refute the claim is likely to have been lost due to the long delay: Orr v Ford (1989) 167 CLR 316 at 330; Crago v McIntyre [1976] 1 NSWLR 729 at 748. Had the claim been raised promptly following Bill's death, the evidence of accountants, farm hands, stock and station agents and auctioneers would have been available to refute, for example, Keith's claim that the partnership between Keith and Bill continued until the date of Keith's death. Raising the claim some 8 years after Bill's death means that evidence is obviously no longer available.
11. Toni's laches case against Keith is strengthened by Keith's knowledge that Bill was in a long medical decline before his death. Keith says that Bill was taken off the Wesfarmers loan as a borrower because his earning capacity had declined due to ill health. The Court does not accept this was why Bill's name was not recorded as a borrower in the Wesfarmers facility. But what this contention and the evidence that supports it nevertheless shows is that Keith was well aware of Bill's illness and of course of his marriage to Toni. It must have been obvious to Keith that Bill was declining and may not be available to give evidence in the future should the issue not be resolved before his death whether or not he had made the promise now alleged. If Keith had been made the promises that he now claims, for him to do nothing to advance his claim until Bill's evidence was unavailable, was to take an unconscionable tactical advantage of Toni's ignorance of the claim and Bill's grave illness until Toni was deprived of the opportunity to defend herself.
12. Keith says it never occurred to him that Bill would dispute his claim. But the March 2007 correspondence makes that explanation improbable.
13. But there is another more attractive explanation for Keith's silence through this time: the alleged conversation with Bill never happened. The Contract/Estoppel Claim only appeared after Tony's cross-claim was lodged in the proceedings. In my view, Tony's case is compelling that this Contract/Estoppel Claim was only formulated in about August 2016 and that Keith really had no genuine belief that such snippets of memory that he had of what has occurred in 1993 entitled him to advance such a claim. In my view the claim has been elevated by Keith defensively to meet Toni's cross-claim.
14. The relief the plaintiffs seek on the Contract/Estoppel Claim includes a claim that the defendants account for all assets or money received or receivable and all money and assets disbursed by the defendant in respect of Bill's estate. This is now impossible for the defendant to perform. Apart from the half share in the property, the only assets in the estate were farm equipment and tools, cattle and household furniture. Toni has not lived on a farm since July 2009. No doubt those assets were sold long ago. Toni spent any funds received. It is impossible for her to return the property in specie. For her to be required now to account for those funds, after the plaintiffs' gross delay, would be inequitable.
15. And finally, if it be necessary, the Contract/Estoppel claim is defeated by the indefeasibility provisions of the Real Property Act. It is an in personam claim that Bill breached a contract or failed to fulfil a promise. But upon transmission to her, Toni became the registered proprietor of Bill's half share in May 2009 during the administration of Bill's estate. As a result, any pre-transfer in personam claims against Bill as registered proprietor cannot now be made in respect of the one-half share in the property so transferred. The claim was defeated by Toni becoming the registered proprietor of the one-half share in the property in May 2009: see Real Property Act 1900, s 42(1); and Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [193]-[198].
16. The plaintiffs do not contend that Toni obtained registration of her title to the property fraudulently. But they contend in final submissions that Toni knew of the alleged promise by Bill prior to her becoming the registered proprietor of Bill's one-half share in the property. But there is no basis for this contention. Any claim by the plaintiffs to an equitable interest in Bill's one-half share in the property was extinguished in May 2009 upon Toni becoming the registered proprietor, long before Keith first fielded the Contract/Estoppel Claim in 2016.
17. In answer to this, Keith argues that Bill's half share of the property was never distributed from the estate. But this is not an answer. Even if Toni still held the property as an administrator at the time of the 2016 sale, by then she still had the benefit of indefeasibility of the title she had by then acquired.
18. And finally the Contract/Estoppel claim is argued to be inconsistent with the Court's orders for the appointment of trustees for sale made on 11 September 2015.
19. Keith's Summons in June 2015 for the appointment of Conveyancing Act, s 66G statutory trustees for sale alleged that he and Toni were co-owners of the property. Upon that assumption, Toni argues, the Court ordered statutory trustees for sale to be appointed. The 11 September 2015 orders were final orders that have since been executed: the property has been sold and the proceeds of sale distributed.
20. But Keith argues the Contract/Estoppel Claim does not impeach the assumption on which the Court made the s 66G orders. He says that success on the Contract/Estoppel Claim would not mean Toni had no entitlement in equity to remain a a co-owner of the property. Instead she would have held her one-half share in the property as a bare trustee for George and Neil. This means that rather than Keith pursuing a s 66G application, he or his sons could then have called for the transfer of the other half under the rule in Saunders v Vautier (1841) Cr & Ph 240; 41 ER 482.
21. Given the Court's earlier conclusions it does not have to determine whether the Court's order of 11 September 2015 estopps the plaintiff from raising the Contract/Estoppel Claim.
22. For all these reasons, the Contract/Estoppel Claim fails and will be dismissed.

The Loan Claim

1. The essential ground of the Loan Claim is that Bill (and therefore his estate) was jointly liable with Keith and Inesita to Statewide on the Statewide Loan.
2. To the extent that the plaintiffs' Loan Claim depends on Keith's evidence the Court places no reliance on that source. Analysis then falls back on the documentary evidence produced at the time.
3. The Wesfarmers Loan was made to Keith only. Bill and Keith jointly provided a third party security for the advance. The Wesfarmers mortgage did not show Bill was a borrower. The Court does not accept any of Keith's evidence that funds advanced under the Wesfarmers Loan were used to fund the maintenance or improvement of the property.
4. At the time that the mortgagee demanded repayment of the Wesfarmers Loan, Keith was the person actively arranging re-financing to pay out the loan, and Bill had little knowledge of the loan, including the balance of the loan.
5. The Statewide Loan was a loan to Keith and Inesita, albeit secured by a mortgage over the property granted by Bill and Keith as joint proprietors. Bill was not recorded as a borrower in the mortgage. Furthermore, at the time of returning the signed documents to Keith, Bill's solicitor reiterated that the documents were provided by Bill on the basis that the loan was being used for Keith's purposes only and "accordingly upon any sale or transfer of any interest in the property the current debt is attributable to your client's interest in the property". The loan documents were accepted by Keith on that basis without demur.
6. Keith and Inesita used the funds advanced under Statewide Loan to pay out the Wesfarmers Loan. No funds advanced under the Statewide Loan were used to fund the purchase, maintenance or upgrade of the property. No part of the Statewide Loan was advanced to Bill or to Toni.
7. Keith and Inesita made all the interest payments on the Statewide Loan. This is consistent with them assuming responsibility for the loan.
8. The Court infers that Keith and Inesita were the borrowers under the Statewide Loan. The Statewide Loan documents are consisted with this conclusion. Other than Keith's testimony, nothing suggests the Statewide Loan was for the benefit of Bill or Toni.
9. Keith and Inesita were the borrowers and were liable to pay all principal and interest on the Statewide Loan. Keith now has no basis at law to seek contribution from Toni (either personally or as the administratrix of Bill's estate) for interest payments made on the Statewide Loan.
10. Nor does Toni have an equitable obligation to contribute to the interest payments made on the Statewide Loan. Neither Bill nor Toni were joint debtors with Keith and Inesita in respect of the Statewide Loan. Nor Bill or Toni receive any benefit from the Statewide Loan: cf Forgeard v Shanahan (1994) 35 NSWLR 206 at 224; Ryan v Dries [2002] NSWCA 3 at [70]-[74].
11. The Loan Claim is a claim for contribution against Bill's estate: the loan funds were used to fund the partnership between Bill and Keith, rather than to purchase, maintain or upgrade the property. Such a claim is time-barred. It attracts a 6 year limitation period. The claim first accrued on Bill's death in June 2008. But the claim was not commenced until July 2016.
12. And to the extent that Keith's claim against Toni is one for equitable contribution for the interest payments on the Statewide Loan, it should not succeed because of Keith's laches.
13. Keith and Inesita obtained the Statewide Loan in 2007. Bill died in June 2008. Keith made no claim for contribution for interest payments on the Statewide Loan until July 2016, when the Summons was filed. Between 15 June 2008 and 31 August 2015, $301,524.05 in interest was paid by Keith and Inesita on the Statewide Loan. Keith does not explain his delay in seeking contribution from Toni whilst he allowed this interest to accumulate to increase the amount claimed.
14. Keith is now seeking contribution to interest payments, where gross delay in making the claim has occurred. Had a claim for contribution been made in a timely manner, perhaps no later than 2009, the amount claimed would have been much less than is now claimed. Toni would certainly have refused to contribute. The property would probably have been sold much earlier than it was. The Statewide Loan would have been repaid, without substantial additional interest having accrued.
15. Keith and Inesita's Loan Claim cannot be established and will be dismissed.

The Rates/Improvements Claim

1. Keith seeks contribution from Toni for Council rates paid in respect of the property and for other amounts allegedly spent on the property for what Keith says were improvements to the property. The amounts claimed were as follows: 1. Council rates on the property, totalling $8,098.56, paid over the period June 2009 to November 2014; 2. Claimed improvements of some $49,467.48, were for the following individual amounts that were stated to be for the following purposes: 1. fencing - $15,000.00; 2. weed control - $5,000.00; 3. the clearing of storm damage from a fence line - $3,146.00; 4. the construction of cattle yards - $18,136.75; and 5. the replacement of a tank and water pump - $8,185.00.
2. The Rates/Improvements Claim has a number of difficulties. First, it involves inherent over-claiming. Keith seeks contribution from Toni for the full value of the improvements alleged to have been made, and rates paid. But Toni was only a co-owner of half the property. So she was only ever liable to contribute to half the established cost of any improvements. If required to contribute to these improvements, Toni's contribution would only be for half the value of those improvements. At its highest, Keith's Rates/Improvements Claim against Toni must be $4,049.28 for rates, and $24,733.74 for improvements, a total of $28,783.02.
3. But the claim fails for other reasons. Keith or other members of his family solely occupied the property from approximately July 2009. Improvements were said to have been made to the property during this time. If a co-owner in sole occupation of a property seeks contribution for any improvements made to the property, the co-owner must be prepared to set off against that claim an occupation fee reflecting the benefit of the occupation that the co-owner enjoyed: see PJ Butt, Land law (7th ed, 2017, Thomson Reuters) ("Land Law") at [6.350]; Whitehead v Whitehead [2002] NSWSC 486 at [24].
4. But the Rates/Improvements Claim does not set off or make any allowance for any fee for occupying the property in the period from July 2009 to February 2016, a period of six and a half years. The amount claimed for contribution for improvements is $28,783.02. Any occupation fee payable by Keith to Toni for occupation of the property is likely to be greater than his claim against her for contribution for the improvements. The occupation fee to be brought to account would only need to be as little as $4,428.16 per annum to completely neutralise Keith's improvements claim.
5. The Court would disallow the claim for contribution for improvements on the basis that Keith has not attempted to bring to account in the claim any occupation fee that must have been payable by Keith as a condition of his recovery and which is likely to have exceeded the claim.
6. But more fundamentally, Toni is not required to contribute to any of these alleged improvements. The works do not have the quality of improvements or lasting repairs to the property so as to qualify as an improvement at law. They are more in the nature of ordinary maintenance, typical for a working farm, to which a co-owner is not required to contribute: see Land law at [6.220].
7. And the payment of Council rates is not an improvement to property for which a co-owner is liable to contribute. Rates are more like recurrent repairs or insurance premiums, which are characterised as payments towards the maintenance of the property: see Land law at [6.230].
8. Toni has paid Council rates on the property of $7,806.72, and insurance of $8,858.61. She has not claimed contribution for these payments from the first plaintiff.
9. The work claimed in the other improvements is really just expenditure for ordinary maintenance carried out on a working farm. Keith describes this work in the following terms: "three kilometres of boundary fencing"; construction of "stockyards"; "weed and regrowth control"; "bulldozer hire to clear storm damage from fence line"; and "replacement of tank and water pump". The construction of stockyards could potentially qualify as an improvement but without clearer and more satisfactory objective evidence that the work was not just the replacement or renewal of dilapidated stockyards the Court is not prepared to allow this claim on the basis of Keith's affidavit evidence. The rest are not obviously improvements or lasting repairs.
10. But Keith is a witness of little credibility. The Court is not prepared even to accept that he has carried out this expenditure in the amounts that he has claimed. The plaintiffs' Rates/Improvements Claim fails.

The Reimbursement Claim

1. Toni's Cross Summons also raises the Reimbursement Claim.
2. The Court's findings on the plaintiffs' claims on the Amended Summons and the Statement of Claim imply Toni's success on the Reimbursement Claim. Out of the proceeds of sale of the property, amounts totalling $400,827.34 were paid out to meet the liability on the Statewide Loan. This means that amounts totalling $200,413.67 were paid out of the proceeds of sale to which Toni would otherwise have been entitled as a one-half owner as tenant-in-common of the property. When the trustees paid this amount out of the proceeds of sale, Keith and Inesita's obligations to repay the first mortgagee, Statewide, were discharged at Toni's expense. But the Statewide Loan remained entirely Keith and Inesita's liability.
3. Toni relies for her right to reimbursement from Keith and Inesita on the principle stated by Cockburn CJ in Moule v Garrett (1872) LR 7 Ex 101: "Where the plaintiff has been compelled by law to pay, or being compellable by law, has paid money which the defendant was ultimately liable to pay, so that the latter obtains the benefit of payment by discharge of his liability; under such circumstances the defendant is held indebted to the plaintiff in the amount."
4. Under the terms of the Statewide Loan, the borrowers were Keith and Inesita. The Court accepts that Bill was merely a guarantor. Bill granted a mortgage over the property to secure the Statewide Loan and thereby support his guarantee.
5. The Court accepts Toni's submissions that one may apply Moule v Garrett principles here in the following steps: (i) Toni was compellable to pay the amount outstanding to the lender under the Statewide Loan, by reason of the registered mortgage over the whole of the property including the estate's half interest that she held; (ii) Keith and Inesita, as the borrowers under the Statewide Loan, were the parties ultimately liable to repay the debt to the lenders; and (iii) Keith and Inesita have now obtained a benefit (and Toni suffered a corresponding detriment) by the payment of the Statewide Loan out of Toni's share of the proceeds of sale of the property. As a result of this logic, Keith and Inesita are indebted to Toni in the amount of $200,413.67.
6. This amount of $200,413.67 was paid to Statewide out of sale proceeds to which Toni would otherwise have been entitled. Toni also claims a charge or lien in her favour over the proceeds of sale paid into Court (being the sum of $204,254.30), to secure Keith and Inesita's obligation to repay her the $200,413.67.
7. I accept the submission put on Toni's behalf that the applicable legal principles in relation to this claim are stated in Hewett v Court (1983) 149 CLR 639 ("Hewett") at 667-668 per Deane J and Shirlaw v Taylor (1991) 31 FCR 222 at 228. Deane J's judgment in Hewett (deleting case references) stands for the proposition that circumstances sufficient for the implication of an equitable lien, will arise in the following circumstances: "I do not propose to essay that task here. It is adequate for present purposes that I identify what I consider to be the circumstances which are sufficient for the implication, independently of agreement, of an equitable lien between parties in a contractual relationship. Those circumstances have, to some extent, been indicated in what has been said above. They are: (i) that there be an actual or potential indebtedness on the part of the party who is the owner of the property to the other party arising from a payment or promise of payment either of consideration in relation to the acquisition of the property or of an expense incurred in relation to it; (ii) that that property (or arguably property including that property: see Pollock, loc. cit.) be specifically identified and appropriated to the performance of the contract; and (iii) that the relationship between the actual or potential indebtedness and the identified and appropriated property be such that the owner would be acting unconscientiously or unfairly if he were to dispose of the property (or, if it be appropriate, more than a particular portion thereof) to a stranger without the consent of the other party or without the actual or potential liability having been discharged. It may be that the above circumstances or tests, particularly (i), would be unduly restrictive if propounded as a statement of exclusion. As has been said however, they are formulated as a statement of what is sufficient rather than of what is essential. Whether or not they exist or are satisfied in a particular case should, like most questions involved in the application of equitable doctrines, be determined by reference to the substance of the transaction rather than its form: "the general principle of disregarding the letter for the substance".
8. Those circumstances are relevantly satisfied here. Keith is indebted to Toni by reason of liabilities Keith incurred to Statewide in relation to the property. And the property was appropriated to satisfy Keith's liability to Statewide. It would be unconscientious or unfair for the property to have been disposed of without Toni's consent, or without Keith's (and Inesita's) liability to her being discharged.
9. Here the relevant unconscientiousness should be inferred against Keith from many factors. Those factors principally include Keith's March 2007 conduct (for the benefit of himself and Inesita) in securing Bill's consent to the Statewide Loan guarantee and mortgage, on the basis of a representation to Bill that he would have no direct future loan obligation to Statewide of any kind. Keith and Inesita must have been aware that Bill was only signing the Statewide Loan documents on this basis. It would now be unconscientious for them to depart from that assumption which they created.

Conclusion and Orders

1. For the reasons given the Court orders as follows: 1. Dismiss the Amended Summons. 2. Subject to order (5), order the plaintiffs to pay the defendant's costs of the Amended Summons on the ordinary basis. 3. In respect of the prayers for relief sought on the Cross-Summons: 1. Declare that the cross-claimant, Toni Sayers, is entitled to one-half of the net proceeds of sale of the property ("the property") paid into Court being the sum of $102,127.15 plus any accrued interest; 2. Declare that the cross-defendants, Keith and Inesita Sayers, are liable to indemnify Toni Sayers in an amount of $200,413.67 on account of the payment to Statewide by the trustees for sale of the property of that part of the sale proceeds, to which Toni Sayers was entitled; 3. Declare that Toni Sayers is entitled to an equitable charge over the proceeds of sale of the property remaining in Court (after the sum of $102,127.15 is paid out to her) to secure the payment by the cross-defendants Keith and Inesita Sayers to her of the amount of $200,413.67 the subject of the declaration in (3)(b); and 4. Subject to order (5), order that Keith and Inesita Sayers pay Toni Sayer's costs of the Cross-Summons on the ordinary basis. 1. Costs orders previously made in the proceedings in favour of the plaintiffs/cross-defendants shall be set off against the costs orders made pursuant to these orders in favour of the defendant/cross-claimant. 2. The costs orders in orders (2) and (3)(d) above will only be made if no party files by 4.00pm on Monday, 14 May 2018 a motion to seek a special costs order (for which leave is hereby given and which may be effected by forwarding the motion to my associate and by making the motion returnable before me at 9.30am on Thursday, 17 May 2018). 3. Stay orders (1) to (3) inclusive until 21 May 2018 for: (a) the plaintiffs/cross-defendants to consider their rights of appeal, and for (b) either party to propose by motion any adjustment to these orders to ensure they conform with the Court's reasons, (and leave is hereby given to file such motion by providing it to my associate and by making it returnable before me at 9.30am on Thursday, 17 May 2018).

Amendments 29 May 2018 - [36], line 2; deleted "in" (appears twice) [36], line 5; delete "of" [36], line 8; change "name" to "named" [38], line 1; change "reference" to "inference" [38], line 7; insert "have" between "not" and "been" [44], line 11; change "Neal" to "Neil" [50], lines 3-5; change "I accept this is far more likely to be correct and Keith evidence in the proceedings of the partnership continued after 1993" to "I accept this is far more likely to be correct than Keith's evidence in the proceedings that the partnership continued after 1993" [52], line 10; change "bills" to "Bill's" [52], line 11; change "Bill's account" to "Bill's accountant" [67], line 6; insert "time" between "that" and "in" [67], line 10; insert "a" before "facility" [76], line 2; insert "the" before "outstanding" [136], line 5; delete "had" (so reads "Had the claim been raised") [137], lines 1-2; change "Bill's knowledge that Keith was in" to "Keith's knowledge that Bill was in" [162], line 1; change "The Court" to "Keith is now"; and insert comma after "payments" [162], line 7; change "has" to "having DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 May 2018