Sykes v Equity Trustee Executors & Agency Co Ltd [1999] VSC 218 | Case summary | Zoe

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Sykes v Equity Trustee Executors & Agency Co Ltd [1999] VSC 218

[1999] VSC 218

Supreme Court of Victoria|1999-06-16|Before: Warren J

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At a glance

Source facts

Court

Supreme Court of Victoria

Decision date

1999-06-16

Before

Warren J

Source

Original judgment source is linked above.

Judgment (9 paragraphs)

[1]

For the reasons already stated, particularly in light of the revelations disclosed by the correspondence between Mr Sykes and the deceased, I cannot be satisfied that there was an agreement between the deceased and Mr Sykes, imperfect or otherwise, or that an expectation was created by the deceased or that the conduct of Mr Sykes post 1974-1975 establishes that he acted upon the relevant expectation. Accordingly, it follows that any relief based upon equitable estoppel could not be made out.

[2]

I turn to the question of mutual wills. In order to establish a claim that the deceased entered into an agreement with Mr Sykes that they each execute mutual wills and which agreement was breached by the deceased it is necessary for me to be satisfied on the balance of probabilities that there was a sufficiently defined agreement disclosing a common intention that the deceased would give a life interest to Mr Sykes. As already stated I cannot be satisfied on the balance of probabilities that there was any such agreement. Even if there was such an agreement Mr Sykes did not perform his obligations thereunder in that he did not make a will in which he provided for a life interest in the Rupert Street property. In this respect, there is an inherent flaw both in fact and in law with respect to the claim made by Mr Sykes based upon the agreement. Further, on the basis of the evidence before me I cannot be satisfied one way or the other whether there was sufficient part performance to take the agreement outside the requirements of s.126 of the Instruments Act. Finally, in Thwaites v. Ryan ; , the Full Court held that in considering the sufficiency of acts of part performance it is wrong to postulate first the contract pleaded and then to enquire as to whether the acts alleged were a part performance of it or of a contract of its general nature. The Full Court held that as part of the enquiry it is necessary first to find such a performance as must imply a contract and then look at the general nature of the contract which, on the balance of probabilities must have existed and then compare that result with the general nature of the contract alleged. In my view in this matter the plaintiff fails on all grounds. I cannot be satisfied on the basis of performance that a contract can be implied and as already stated I cannot be satisfied on a balance of probabilities that a contract or agreement must have existed. It follows that the plaintiff cannot be said to have made out a mutual will claim. Finally, I would observe that in Re Goodchild, deceased ; the English Court of Appeal held that for the doctrine of mutual wills to apply a clear agreement at law between the two testators had to be established that the will should be mutually binding. In the present matter I cannot be satisfied that there was a clear agreement between the deceased and Mr Sykes.

[3]

The plaintiff claims that he lent the sum of $46,000 to the deceased during her lifetime. Mr Sykes gave evidence that he lent the sum to the deceased in order to buy an investment property which he thought was in Williamstown, Victoria, but now believes that the property purchased was the Wynyard property. The evidence of Mr Sykes was that the $46,000 loan was to be paid in instalments. About half that amount was paid over a period of about three weeks up to an amount totalling approximately $23,000. The balance of $23,000 was said by Mr Sykes to have been handed over in cash to the deceased on the front lawn near a tree at the Rupert Street property. In the evidence before me there was no evidence that at any time during her lifetime the deceased identified the property that was to have been the subject of the purchase by the deceased from the monies said to have been lent to her by Mr Sykes. Furthermore, at no time did Mr Sykes ask for details as to the "investment property". Mr Sykes acknowledged as much in his evidence. As matters transpired he assumed that the alleged loan of $46,000 was used to purchase the Wynyard property. It was submitted by Mr Cosgrave on behalf of the first defendant that there is no reliable evidence that the loan was made. He emphasised that the alleged loan was said to have been made after 1986 when relations between the plaintiff and the deceased were not amicable and, in particular, after the discovery by Mr Sykes of the involvement of the deceased with another man. Furthermore, it was submitted that there was no written acknowledgment in any way of the loan, such as a loan agreement, receipt or reference to the loan in correspondence. More significantly, the first defendant emphasised that there was no complaint by Mr Sykes about the $46,000 loan. In addition, after the separation of the deceased and Mr Sykes in mid 1986 there was continued correspondence between them much or most of which has been tendered by Mr Sykes as part of his evidence. I cannot find any reference in the course of correspondence to the alleged loan for $46,000. By contrast, the initial reference to the loan appears in a letter from the plaintiff to the first defendant and its solicitors dated 6 September 1996. In that letter written by Mr Sykes approximately eight months after the death of the deceased he claimed " ... Re payment of a loan I made to her in cash of $46,000 in or about September 1989". It was submitted on behalf of the first defendant that this letter represented the first mention by Mr Sykes of the loan.

[5]

Mr Sykes claims that he gave a collection of opals to the deceased on the condition that she use the opals to pay for the education of the children. Mr Sykes stated that there was a further condition attached to the gift of the opals, namely, that if the opals were not sold the plaintiff was entitled to recover them back on demand and if not so demanded then on the death of Mr Sykes the children would be entitled to the opals in equal shares. For probate purposes the estate of the deceased was listed as including an opal collection valued at $52,000. Mr Sykes has assumed that the opals referred to in the grant of probate are opals that he gave to the deceased. His evidence was that the opals were given to the deceased some time after 1986 when the business of XL was not performing as well and the children had been withdrawn from the Williamstown and Westbourne Grammar School due to difficulties in paying school fees. The first defendant denies any liability to return the opals to Mr Sykes on a number of grounds. Firstly, the court cannot be satisfied that the opals were in fact given to the deceased due to the very broad and vague circumstances described by Mr Sykes. Secondly, the court should not accept that the opals were given by Mr Sykes in light of the fact that relations between Mr Sykes and the deceased were not good in 1986. Thirdly, it is said that there is no written record of any arrangement with respect to the opals and given their value it would be reasonable to have expected some acknowledgment, receipt or reference to the opals in correspondence during the period from 1986 until the death of the deceased in 1996. Fourthly, it is emphasised on behalf of the first defendant that in initial letters of demand sent by Mr Sykes to the first defendants and its solicitors on 24 September 1995 and 6 September 1996 there is no reference to a claim for opals. Fifthly, it is further submitted that in a letter of 6 September 1996 Mr Sykes referred to the discovery that same day of the details of the probate with respect to the estate of the deceased. It was submitted on behalf of the first defendant that if there was a genuine claim for the opals it would be reasonable to have expected Mr Sykes to have referred to that matter in his letter of 6 September 1996. Sixthly, it is submitted on behalf of the first defendant that if the court was to find that the opals were given by Mr Sykes to the deceased they were so given on trust for the purpose of the education of the children and in the event of his death such opals would be distributed equally between the children. Such is borne out by the correspondence. On 25 January 1990 and in a letter dated 20 October 1993 Mr Sykes made clear reference to opals being given to the deceased and for the benefit of the children. It is submitted on behalf of the first defendant that the opals ought not be returned as they were given to the deceased for the purposes of the children's education and such purposes are not yet exhausted. Finally, it is submitted that there is no evidence that the opals held by the first defendant are necessarily the opals of the plaintiff. There was no evidence, for example, that the opals had been inspected and identified by Mr Sykes.

Parties

Applicant/Plaintiff:

Sykes

Respondent/Defendant:

Equity Trustee Executors & Agency Co Ltd [1999] VSC 218

Cases Cited (17)

[1999] VSC 218

In addition to the claims pleaded I observed in the course of the evidence with respect to the alleged agreement that it was apparent that there was a potential claim that Mr Sykes could make that he and the deceased had entered into an agreement to execute mutual wills and which agreement had been breached by the deceased. Such a claim was not alleged in the amended statement of claim. The evidence given by Mr Sykes in this respect was not the subject of an objection on behalf of the first defendant. An observation can be made that although a court should not decide a question of fact unless it is raised in the pleadings, if one party, without objection introduces evidence to establish a fact which although not pleaded it is open to the court to find the fact in favour of the party making the allegation providing there is no prejudice to the other party. It is a well-established principle of law that cases are determined on the evidence not the pleadings. (See Gould and Birbeck and Bacon v. Mount Oxide Mines Limited (in liq) [1916] HCA 81; (1916) 22 CLR 490, 517; Miller v. Cameron [1936] HCA 13; (1936) 54 CLR 572, 576; Dare v. Pulham [1982] HCA 70; (1982) 148 CLR 658, 664; and Banque Commerciale SA (in liq) v. Akhil Holdings Limited [1990] HCA 11; (1990) 169 CLR 279, 297). Accordingly, I raised with counsel for the first defendant in the course of closing addresses that on the basis of the evidence given by the plaintiff during the course of the trial it may be open to him to allege and for this court to find that there was an agreement for mutual wills between the deceased and the plaintiff and which agreement was breached by the deceased. The indication was taken up on behalf of the first defendant and addressed during the course of argument.

Turning, firstly, to any resulting trust, it is relevant to consider the principles stated by the High Court in Calverley v. Green [1984] HCA 81; (1984) 155 CLR 242. In that matter a defacto couple lived in a house owned by the man. Subsequently, the defacto couple purchased another house registered in joint names but the man paid the deposit from his own funds and the balance was raised on a mortgage for which the man made the repayments. Both the man and the woman were mortgagors. Some years later the defacto couple separated. The man brought a cross-claim against the woman for a declaration that she held her interest in the property in trust for him and for an order that he transfer her interest to him. The majority of the High Court held that the fact that the woman was liable to the mortgagee constituted a contribution to the price paid for the property. The court held, further, that where two or more persons contribute to the purchase of property conveyed to them in their joint names, the equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions unless the contributions are equal. The court held, also, that the presumption of advancement does not apply to a defacto relationship.

I turn now to consideration of whether or not the circumstances establish a constructive trust. It is necessary for me to consider as to whether or not there was an actual or inferred common intention between Mr Sykes and the deceased such as to give rise to a constructive trust in the Rupert Street property in favour of Mr Sykes. In the present matter there was no marriage, the property was registered only in the name of the deceased and there was no complaint about registration on the part of Mr Sykes. Indeed, on balance the evidence reveals that he was aware of and generally satisfied with such circumstance. Insofar as there may ever have been agreement between the deceased and Mr Sykes that the Rupert Street property would be owned jointly or as tenants in common Mr Sykes in effect acquiesced to the deceased registering the property solely in her name. In any event, on balance, I cannot be satisfied on the evidence as to whether there was a common intention between the parties sufficient to establish or create a constructive trust in terms of the principles expressed by the High Court particularly in Muschinski v. Dodds [1985] HCA 78; (1986) 160 CLR 583. Furthermore, it would be necessary for the plaintiff to establish detriment on his part. It may be that arising from the circumstances between the deceased and Mr Sykes it could be said that he has suffered inconvenience. In my view the evidence does not disclose sufficient detriment suffered by Mr Sykes such as to establish a constructive trust. There is no evidence of what he would have done if the common intention he asserts was not performed.

I turn now to the aspect of constructive trust based upon unconscionable conduct. On the basis of the principles expressed by the High Court in Baumgartner and Baumgartner [1987] HCA 59; (1987) 164 CLR 137 and on the basis of the evidence before me I cannot be satisfied as occurred in Baumgartner that the property was financed in part through funds contributed by Mr Sykes such as that it would be unconscionable for him to be denied an interest in the Rupert Street property. On the basis of the evidence before me I cannot be satisfied that the Jervois shares were other than wholly or in part remuneration for the deceased as an employee of XL or wholly or in part a gift made by Mr Sykes to the deceased. Moreover, consideration of the facts in the present matter distinguish it from the facts in the Baumgartner case in that there was no pooling of incomes, the plaintiff and the deceased did not live together as a couple in the normal sense rather, he stayed at the Rupert Street property intermittently and eventually from mid-1986 onwards Mr Sykes never stayed at the property again. It follows, that I cannot be satisfied on the evidence that equitable considerations are such that it would be unconscionable for the estate of the deceased to deny an interest by way of a constructive trust in the Rupert Street property in favour of Mr Sykes.

Mr Sykes did not seek relief in the amended statement of claim by way of equitable estoppel. As he acts on his own behalf and as it might be said that the facts of his case bear some of the hallmarks of an equitable estoppel it is appropriate to consider such a claim. The relevant principles were conveniently stated by Brennan J in Walton Stores (Interstate) Limited v. Maher & Anor [1988] HCA 7; (1987) 164 CLR 387 at 423-424:

The High Court cited with approval in Giumelli v. Giumelli [1999] HCA 10; (1999) 73 ALJR 547 at 554 the observations of McPherson J in Riches v. Hogben (1985) 2 QdR 292:

(1916) 22 CLR 490

(1936) 54 CLR 572

(1982) 148 CLR 658

(1990) 169 CLR 279

(1984) 155 CLR 242

(1986) 160 CLR 583

(1987) 164 CLR 137

(1987) 164 CLR 387

(1999) 73 ALJR 547

(1985) 2 QdR 292