Contract
29The primary judge accepted that a court might find that parties to an arrangement intended to enter into a legally binding contract, notwithstanding the informality of the arrangements and the existence of close relationships of a social or familial nature. Her Honour observed, however, that the answer depends upon the assessment of all of the circumstances surrounding the making of the alleged contract.
30The primary judge concluded that there was no clarity or certainty as to what was to occur under the alleged contract. Thus, there was no discussion as to which of the appellants was to provide any particular services or assistance. There was no identification of the nature of the assistance sought by Mr and Mrs Chamita other than, perhaps, a tacit acceptance that the appellants might make contact with some support agencies. There was no discussion of the manner in which the appellants would provide assistance or for how long. There was no discussion of what was to happen should either Mr or Mrs Chamita become ill or need to enter an aged care facility.
31The primary judge also referred to Sophie Sion's evidence that Mrs Chamita said that she and Mr Chamita needed some help and that, when Ezekiel Sion sought to clarify what it was that Mr and Mrs Chamita wanted, by asking whether they meant that they wanted the appellants to manage their affairs and organise home help for them, Mrs Chamita responded by saying that that is what she and Mr Chamita wanted.
32The appellants contended that the conclusion of the primary judge was artificial, in holding that there was no clarity or certainty as to what was to occur in respect of the implementation of the alleged contract, because there was no discussion about the matters listed by her Honour. The appellants contended that, where one party agrees to look after or care for another, it is impossible to know exactly what it is that the party who has agreed to carry out such services will be called upon to do. They say that Mr and Mrs Chamita expected that they would need assistance with their shopping and financial matters, to be taken to medical appointments and to have household activities provided. The appellants say that, as ordinary people, Mr and Mrs Chamita would be expected to understand what would be required.
33The appellants contend that it would be "absurd" to treat the arrangement as vague, simply because there was no discussion or contemplation of what exactly was to happen should either Mr or Mrs Chamita become ill or need to enter an aged care facility. They say that her Honour's observation that there was no discussion as to which of the appellants would provide any particular services or assistance was also "absurd", because that would depend on the exigencies of the moment .
34Ezekiel Sion gave evidence that Louisa Joseph asked Mr and Mrs Chamita to whom they were going to leave their estates in their wills. Louisa Joseph said that she asked Mr and Mrs Chamita about to whom they were leaving their estates, with no mention of wills. Sophie Sion, on the other hand, said that her husband, Ezekiel Sion, raised the question of the intentions of Mr and Mrs Chamita and that Louisa Joseph then asked them to whom they wished to leave their estates.
35Only Sophie Sion said that Louisa Joseph clarified the matter relating to the intentions of Mr and Mrs Chamita, by saying that she assumed that they meant to leave their estates to all of the nieces and nephews of Mrs Chamita equally. Neither Ezekiel Sion nor Louise Joseph suggested in their evidence that Louisa Joseph had used such words. They did, however, give some evidence, apparently without objection, as to what they subjectively understood by the words. Of course, their subjective understanding could have no bearing at all on whether or not the words used were sufficiently clear to constitute a binding contract.
36Such inconsistencies would not necessarily preclude a finding as to what was said. However, they highlight the uncertainty as to what was said. Such lack of certainty casts doubt on the intentions of the participants in the discussions to undertake obligations that could be enforced in a court of law.
37The question of an intention to create legal relations is not to be resolved by examining the subjective minds of the parties. It is not their actual subjective intention that is relevant. Rather, it is the intention that a court imputes to them. That is to be determined by examining what the parties said and did in the circumstances in which they found themselves. The question is then whether reasonable people would regard the arrangements made in those circumstances as intended to be binding on the parties (Gould v Gould [1970] 1 QB 275 at 279).
38The search for an intention to create contractual relations requires an objective assessment of the state of affairs between the parties, and not the identification of any uncommunicated subjective intention that either party may have had. The circumstances that might properly be taken into account in deciding whether the relevant intention was present are very varied. It is not possible to form prescriptive rules as to that matter. The intention is that which would objectively be conveyed by what was said or done, having regard to the circumstances in which the statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties (Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 at [25]).
39The appellants contend that the question of whether the terms of an arrangement are clear enough to constitute an enforceable contract, on the one hand, and the question of whether the parties to such an arrangement intended to enter into legally binding relations, on the other, are quite discrete. However, while they are separate questions, they are also related. Thus, the more informal the circumstances in which the arrangement is made and the vaguer the terms in which the arrangement is expressed, the more likely it will be that an observer would conclude that the parties did not intend to enter into legally binding relations.
40As a matter of human experience, when family members make a promise to each other it is unlikely that they intend it to be legally binding. As a result, the law presumes that, as a matter of fact, family members do not intend to contract when they make arrangements amongst themselves (the presumption). The presumption applies with diminishing force the more remote the familial connection (Bovaird v Frost [2009] NSWSC 337 at [53]).
41The vaguer the language of an arrangement and the greater its informality, the more difficult it will be to rebut the presumption, as it will be more likely that there was no intention to contract. The appellants accept the existence of the presumption but contend that it is rebutted, as the alleged contract was one of seriousness to both Mr and Mrs Chamita, as well as to the appellants, despite it being expressed in simple terms. The appellants also contend that the presumption does not arise or is weakened by the fact that they were nieces and nephews and were not in any event affectionately close to Mrs Chamita.
42Mr and Mrs Chamita had no children of their own. There was evidence, however, that, at one stage, Hilda Mordecai, one of the appellants, had lived with Mr and Mrs Chamita for some time after she first arrived in Sydney in mid 1961. Hilda Mordecai claimed that, in 1962, Mrs Chamita suggested to her that, if she would agree to Mrs Chamita's suggestion that she be adopted by Mr and Mrs Chamita adoption, they would leave their estates to her. She said that she developed a mother and daughter relationship with Mrs Chamita but that the relationship soured after she rejected Mrs Chamita's offer of adoption. For some time after she moved out of the North Bondi house in 1962 she had difficulty visiting Mr and Mrs Chamita because of Mrs Chamita's coldness towards her.
43However, the friendship was restored in 1967, when Mrs Chamita telephoned her and asked her to visit her at the North Bondi house. From that time, they visited each other and had outings together. Hilda Mordecai located cleaners for Mr and Mrs Chamita and responded to telephone calls for assistance. The close relationship apparently continued until mid 1997, when Mr and Mrs Chamita asked her to find a live-in carer to do cleaning and housework. However, she was unable to find anyone suitable.
44Hilda Mordecai gave evidence that, later in 1997, Mr and Mrs Chamita told her that they had approached her brother Ezekiel Sion for assistance to help them with their affairs. She said that, in 1997, her brother told her that Mr and Mrs Chamita had said that they were " going to leave their estate to us but we have to continue to help them". She said that her brother told her that he was looking after the affairs of Mr and Mrs Chamita but that he would need "yours and the family's help". Hilda Mordecai said that she responded by saying "of course".
45While the appellants were not Mrs Chamita's children, it is clear that Mrs Chamita regarded her nieces and nephews as family. As a result, the fact that the appellants were Mrs Chamita's nieces and nephews, rather than her children, does not necessarily assist in rebutting the presumption and may indicate that the presumption arises. There was no evidence of a particularly close or affectionate relationship between Mr and Mrs Chamita, on the one hand, Mrs Chamita's nephews and nieces, on the other. There was no evidence of any cultural obligation that would have impelled Mrs Chamita's nieces and nephews to provide for her and her husband, although, as will appear below, Ezekiel Sion asserted to the Guardianship Tribunal that he was assisting his aunt as her eldest nephew.
46In the present case, the objective circumstances are more relevant to the determination of whether the parties intended to enter into a contractual relationship. Even if the presumption arises, it is of diminished force given the nature of the relationships involved. However, one of those objective circumstances is the familial relationship involved.
47The statement of claim alleges that Mr and Mrs Chamita agreed to leave their estates to the three appellants. That is consistent with neither the language deposed to by Ezekiel Sion and Louisa Joseph nor the language deposed to by Sophie Sion. Ezekiel Sion and Louis Joseph deposed to language that indicated that only the two of them would be the beneficiaries of Mrs Chamita's estate. Both said that Mr Chamita and Mrs Chamita simply said "you". That could only refer to those present. On the other hand, Sophie Sion deposed to language that would make the nieces and nephews beneficiaries. Neither version is consistent with the allegation in the statement of claim that the three appellants were to be the beneficiaries.
48The concession made at the end of the hearing before the primary judge, that the appellants' claim was for three-elevenths of the estate rather than its entirety, was not consistent with any of the evidence. There were eleven potential beneficiaries under Mr Chamita's 2001 will. However, two of those beneficiaries are not nieces or nephews but the children of one of Mrs Chamita's nephews. There was no evidence to suggest that Mrs Chamita or Mr Chamita treated the children of nieces and nephews on an equal basis with nieces and nephews. As indicated above, Mr Chamita divided his residue into nine parts, not eleven parts.
49I am not persuaded that there was any error on the part of the primary judge in concluding that no legally binding contractual obligation was entered into in 1997 between Mrs Chamita, on the one hand, and the appellants, or any of them, on the other hand. The evidence before her Honour would not rebut the presumption that such an arrangement between close relatives was not, considered objectively, intended to give rise to legally enforceable and binding contractual obligations.
50That conclusion is supported by the uncertainty of the language used during the conversations that are alleged to have given rise to the contract. The inconsistency in relation to the claims for relief also supports the conclusion reached by the primary judge that there was insufficient certainty as to what was promised or represented by Mrs Chamita or jointly promised by Mr and Mrs Chamita.