Todd and 1 Other v Todd and 1 Other

CATCHWORDS: CONTRACT - Property. - PRACTICE & PROCEDURE - Whether decision of Residential Trader and Tenancy Tribunal gave rise to res judicata, issue estoppel and Anshun estoppel - dispute between parents/ parents-in-law with son and daughter-in-law as to whether house made available to them gave rise to any right on latters' part to prevent taking of possession - right of owner to recover possession outside Residential Tenancies Act 1987 under s20 of Civil Procedure Act and earlier s79 of Supreme Court Act.

Civil Procedure Act s20 LEGISLATION CITED: Common Law Procedure Act 1899 (NSW) Residential Tenancies Act 1987 (NSW) Supreme Court Act s79

CASES CITED: Blair v Curran [1939] 62 CLR 464

Adam TODD (First Appellant) PARTIES: Suzanne TODD (Second Appellant) William George TODD (First Respondent) Gisella TODD (Second Respondent)

COUNSEL: Appellants in person C HARRIS, SC (Respondents)

SOLICITORS: Appellants in person Atkinson Vinden Heazlewoods (Respondents)

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC20280/05; SC20119/06

LOWER COURT DATE OF DECISION: 31 August 2006

LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWSC 864

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40866/06 SC 20280/05 SC 20119/06

SANTOW JA CAMPBELL JA HANDLEY AJA

27 AUGUST 2007 Adam TODD and 1 Other v William George TODD and 1 Other Judgment 1 SANTOW JA: INTRODUCTION This appeal, in essence, is a dispute between the appellants, who occupy a house which they claim to own as against the respondents, who bought it some nine years ago. The respondents made the house available to the appellants, their son and daughter-in-law. This was on terms which remain the subject of ongoing dispute, determined by the primary judge, Barr J in favour of the respondents. The appellants, appearing for themselves as they did at first instance, challenge that result on a number of grounds. They also seek leave to introduce new evidence. 2 This appeal followed upon leave granted by Basten JA on 21 May 2007 in a written judgment. That judgment sets out how it was envisaged the appeal would proceed. It concludes with written directions in revised form (at [11]). 3 I set out below the relevant parts of the leave judgment: "6 First, there will be consideration of the application by the appellants to tender further evidence on the appeal. There will be consideration of the affidavits in support of that application and to the extent that it is necessary for there to be oral evidence or cross-examination in relation to the question as to whether the further evidence should be admitted, that will also take place on that day as a matter of priority over other issues.

7 The second matter to be addressed on that day will be the identification and consideration of any grounds of appeal relating to the failure by the primary judge to admit evidence and particularly evidence which is now sought to be put before this Court.

8 If in the light of those matters it is possible and sensible for the Court to continue to consider the other grounds of appeal, that will be done. I note that there may need to be further directions given as to the hearing of the further evidence, if the Court is minded to admit it, or if it is unable to determine that on the day, and it may be necessary for the further hearing of the appeal to be adjourned. …" 4 The respondent ultimately did not seek to put on further evidence or cross-examine the second appellant, Ms Suzanne Todd, in relation to the further evidence she wished to have admitted. That further evidence was in the form of an affidavit dated 3 May 2007, part of which contained matters by way of submission rather than evidence. 5 At the appeal hearing, the Court made clear that it would deal not only with the matters in [6] and [7] above, but also the other grounds of appeal, being in a position to do so. 6 The Court determined at the conclusion of the hearing that it would rule on the admissibility or otherwise of the further evidence in its reserved judgment.

Overview 7 By way of the broadest of overview, the circumstances leading to the present proceedings are these. 8 The appellants are Adam Todd and his wife Suzanne Todd who were defendants below before the primary judge in proceedings for possession. The appellants by cross-claim unsuccessfully brought proceedings for trespass against the respondents. 9 The respondents in each case are William George Todd and his wife Gisella Ann Todd, parents of Adam Todd and parents-in-law of Suzanne Todd. The respondents were plaintiffs below in the various proceedings for possession and defendants below in the proceedings for trespass. 10 There were earlier proceedings in the Consumer Trader and Tenancy Tribunal ("the Tribunal") which preceded the proceedings before Barr J. These earlier proceedings were brought by William and Gisella Todd against Adam and Suzanne Todd by notices to vacate purporting to be under the Residential Tenancies Act 1987 (NSW) ("the Act"). The Tribunal determined that it lacked jurisdiction under the Act so that no orders for possession were made. This was on the basis that there was no "residential tenancy agreement", within the meaning of that expression in the Act. It was on the basis of that determination in their favour that Adam and Suzanne Todd sought to rely on issue estoppel and Anshun estoppel (as well as, it appears, res judicata, though not a clearly stated ground of appeal) as grounds of appeal. 11 This litigation found its origin in an arrangement, whose precise terms are in dispute. Under it, the appellants would occupy a property purchased by the respondents in Baulkham Hills. Dispute ensued surrounding occupancy and use of the property. Following the earlier unsuccessful Tribunal proceedings to which I have referred, the respondents were successful before the primary judge in obtaining Supreme Court orders for possession as well as orders for payment of outstanding sums connected with the occupation. The appellants were unsuccessful in seeking damages in relation to certain alleged trespasses by the respondents onto the property on the basis that the respondents were entitled to possession. 12 Appeal to this Court contained a number of matters and allegations which I place under headings below. The actual grounds of appeal, which I quote in full later, were diffuse and in some cases constituted assertion of matters that could have no material bearing on the appeal. (a) challenge to the orders below for possession of land and assertion of a right of ownership on the part of the appellants; (b) Anshun and issue estoppel and, it appears, res judicata said to preclude the primary judge ordering possession; (c) challenge to various factual, evidentiary and inferential findings made by the primary judge; (d) an allegation that the second appellant (Suzanne Todd) was entitled to give oral evidence at trial but was denied that opportunity, contrary to her entitlement; (e) an allegation of failure by the primary judge to admit relevant evidence; and (f) an allegation that the primary judge had failed to hear all the evidence relevant to the issues.

SALIENT FACTS 13 I have endeavoured to state the salient facts as uncontroversially as possible. I resolve disputed factual issues to the extent necessary for the purposes of this appeal. 14 In 1998, the appellants were occupying a house at Oakdale which was owned by Suzanne. After what were alleged to be neighbour complaints, followed by one of the appellants' children being taken away by DOCS, and further poor relations with neighbours thereafter, the appellants wished to leave Oakdale. 15 In October 1998, the respondents purchased a property at 52 Rockley Ave, Baulkham Hills NSW ("property"), with the intention that it would be occupied by the appellants. 16 On 23 October 1998, the appellants entered into an arrangement with the respondents whereby the appellants would occupy the property on certain terms. These terms were subsequently the subject of dispute, specifically as to what the terms were and as to their effect in the circumstances. 17 The respondents considered the arrangement to comprise a residential tenancy, under which the appellants were required to pay rent of $880 per month plus certain other sums for the property's maintenance and rates. By the end of June 2000 the respondents contended that the appellants were over $8,000 in arrears on those payments. 18 No further payments were made from that time. The respondents did not pursue the matter until 2003 when matters came to a head after what was said by the respondents to be a change in behaviour by the appellants. The following occurred (in summary): (a) a trespass notice was erected on the property by the appellants; (b) an AVO was sought restraining the respondents from contact with the appellants or their children; (c) on 27 January 2004 and subsequently trespass infringement notices were issued to the respondents seeking $110,000; (d) from January 2004, correspondence was exchanged seeking that the appellants vacate the property, and seeking rectification of certain elements of the property, including white ants found in sleepers at the front of the property; (e) on 30 July 2004 a notice to vacate was issued to the appellants by the respondents seeking to invoke the Tribunal's jurisdiction; (f) On 8 September 2004, the respondents commenced action in the Tribunal for termination and possession and other orders based on rent arrears and failure by the appellants to pay council rates. The matter was heard on 14 December 2004, with the application being dismissed for want of jurisdiction. (The text of the Tribunal's reasons is included in the Judgment at [26].) (g) On 10 March 2005 the respondents issued a Statement of Claim for possession against the appellants which the appellants resisted (Judgment at [23]).

The primary judgment - A summation 19 The primary judge made positive findings of credit in favour of both respondents William and Gisella Todd (at [47]) and negative findings of credit concerning Adam Todd the first appellant (at [49]). The primary judge considered that Suzanne Todd's failure to give evidence operated to leave the first appellant, an unreliable witness, quite without support (at [55]). 20 The primary judge held that while the findings and orders of the Tribunal stood, the respondents would be estopped from asserting that at the relevant time there existed between them and the appellants the relationship of landlord and tenant of the property. There was no reason for disturbing the findings of the Tribunal (see [32]-[35]). 21 After an extensive analysis of the circumstances surrounding the arrangement, the primary judge concluded (at [72] and following) that: (a) the arrangement was no more than an agreement to negotiate a price if the appellants should offer to purchase, there being no lease and no enforceable contractual relationship; (b) the respondents did not agree to purchase the property on trust for the first appellant; (c) the respondents had established a right to possession of the property by the notice to vacate of 30 July 2004; and (d) the trespass actions by the appellants must fail for want of evidence. 22 I elaborate under "Disposition" on the issues on appeal arising from the primary judgment.

The grounds of appeal 23 These are set out below: "1. [proceedings for possession] in the Supreme Court: a. The Court has a statutory obligation to make findings based on the evidence. The Court erred in making findings of fact that do not exist and were not presented in evidence. For instance: i. The Court found that the First Defendant "was drawn into contested proceedings in the Federal Court of Australia and it looked as though one of his companies risked being ordered to pay a fine." 1. The Federal Court of Australia has no records of any such proceedings. 2. There was no evidence relating to this finding put before the Court. ii. The Court quote terms from the arrangement, which were not in the arrangement. iii. The Court assigned thoughts and intentions to the Plaintiffs that were not presented in evidence. iv. The Court found that the Defendants could not afford to buy a house: 1. The Defendants were paying off a very small mortgage of less than $90,000 and were 12 months ahead in payments. b. The Court had a statutory obligation to hear all evidence that was relevant to the issues and cause of the issues being litigated. The Second Defendant was denied the right to give evidence on the grounds that orders were made a few days before trial that the trial was to proceed by affidavit only. No such order was made. Nor was any order made precluding the giving of oral evidence. Furthermore, the Second Defendant swore an affidavit on 28 April 2006 and a further affidavit confirming a defence. The Second Defendant had a right to give evidence and the denial of that right was a denial of natural justice. c. There was procedural unfairness in that evidence of the defence that was relevant to the case was not admitted by the trial judge. This is in contravention of Part 3.1 of the Evidence Act . d. The trial judge failed to conduct due inquiry by refusing and omitting to allow evidence of the Defendants that was relevant to the issues of how the arrangement came into being. The trial judge also failed to conduct due inquiry when he refused and omitted to hear or view video evidence explaining the breakdown of relations between the parties. Instead, in his reasons for decision, the trial judge has made a number of assumptions about what led to the breakdown excluding the events of the cause. e. The trial judge failed to conduct due inquiry by refusing and omitting to take into fact the document "Thoughts on Loan to Viv". f. The trial judge failed and omitted to conduct due inquiry by failing to find that the First Plaintiff misled and lied to the Court about the exhibit "Thoughts on Loans to Viv". g. The Court erred at law by upholding the decision and findings of the Consumer Tenancy Trader Tribunal whilst simultaneously finding in favour of the Plaintiffs based on there being a lease at will. The decision and findings of the Tribunal exclude there being a lease. h. Having dismissed the Plaintiffs' appeal against the decision and findings of the CTTT the Court refused and omitted to dismiss the proceedings based on promissory and issue estoppel. i. The Court has an obligation to find in favour of a party based on the balance of probabilities. The Plaintiffs did not establish that there was a residential tenancy agreement. The Plaintiffs did not establish that they were paying off a mortgage. The trial judge rejected the conduct of the Plaintiffs over the seven year period of the arrangement and instead based his decision on a conversation that was reconstructed by the Plaintiffs seven years later when litigation was afoot, even though the Tribunal found this was not feasible or reliable. j. The Court erred at law by failing to apply Anshun estoppel. k. The Court erred at law by failing to apply issue estoppel. l. The Court failed to award costs to the Defendants even though it dismissed the Plaintiffs' substantive claim for rent arrears and damages. 2. That in respect to proceedings 20119/06 [sic - should be /05] in the Supreme Court: a. The Court failed to award damages and costs to the Defendants for trespass on 9 January and 20 January 2004 even though it found the Defendants were in exclusive possession at that time and the Plaintiffs admitted in given evidence that they had trespassed. b. The Court erred in awarding costs to the Plaintiffs when it dismissed the Defendants' claim for trespass. 24 Various orders were sought in consequence in both the possession proceedings and the trespass proceedings. These include orders for dismissal of the respondents' proceedings or a re-trial and for an award of damages or a re-trial of the cross-claim for trespass.

DISPOSITION 25 The appellants' case on appeal, and the arguments put in support, were articulated by the appellants in various ways but may be fairly summarised as follows: (a) (i) that the primary judge erred at law by upholding the decision and findings of the Tribunal, whilst simultaneously finding in favour of the plaintiffs (respondents) basing that determination on there being a lease at will, when the decision and findings of the Tribunal exclude there being any such lease, so that

(ii) the determination of the primary judge was precluded by issue estoppel or Anshun estoppel and, it may now be taken from the appellants' argument, res judicata ;

(b) (i) that the primary judge in various ways erred in failing to admit or hear evidence, or to take evidence into account, that was relevant to determining the true arrangement between appellants and respondents, and

(ii) such arrangement, so evidenced and variously described, was according to the appellants, contract-based and conferred a right to possession on the appellants in perpetuity, or otherwise constituted a gift to the appellants of the property, with conditions, or otherwise constituted some kind of irrevocable perpetual licence to occupy. 26 In a statement of issues handed up to this Court by the appellants these issues were repeated in various forms. Issue 8 of that summary submits that: "8) If the respondents contend that the appellants are not able to adduce evidence not contained in the affidavits filed in the proceedings then the appellants contend that the respondents are equally prevented from litigating issues that were not clearly defined by the Statement of Claim." 27 The remaining matters in the statement of issues handed up are a combination of those stated issues and argument concerning evidence said to be essential for determining what was said to be "an arrangement of early inheritance, estate planning and ownership". That can be taken to be the arrangement contended for by the appellants in (b)(ii) above. 28 The appellants also press their cross-claim in damages for trespass. If the appellants do not succeed in their appeal in establishing that the respondents were not entitled to possession, then any basis for the appellants claiming trespass is removed. 29 I start with the grounds of appeal under (a) above, namely issue and Anshun estoppel, and res judicata; these require consideration of the Tribunal proceedings. 30 William and Gisella Todd commenced those proceedings in the Tribunal on 3 September 2004. 31 The application sought orders for "termination of tenancy and return of possession to landlord based on rent arrears" plus certain ancillary orders. The application was clearly made under the Residential Tenancies Act 1987 (NSW) in the context of what were described as "family arrangements/tenancy agreements". 32 The result of the application was a decision on 27 January 2005 to dismiss the application for want of jurisdiction. That was the "res" or decision for purposes of any application of the doctrine of res judicata were such a decision, dismissal for want of jurisdiction, capable of giving rise to res judicata. It must be doubtful whether such a decision, which does not purport to determine the merits of the dispute, was capable of giving rise to res judicata at all, for the reasons elaborated in Spencer Bower, Turner and Handley "Res Judicata" (Butterworths, 1996) at 37. However, that was not argued before us. 33 The Tribunal thus described the reason for dismissal as being "because the Tribunal is satisfied, pursuant to s28(5)(i) [Residential Tenancies Act 1987] that the proceedings should not be entertained for the reasons specified". The reason specified was that "the Tribunal does not have jurisdiction to consider the application as there is no residential tenancy agreement in place between the parties". Orders in consequence were made. These had the effect of dismissing William and Gisella Todd's then application, which was, it is important to emphasise, an application purporting to be under the Residential Tenancies Act. 34 If and insofar as there could be res judicata estoppel, constituted by the Tribunal's determination, its scope is therefore limited as I have described. In particular, while it would prevent further proceedings in the Tribunal for possession ("Res Judicata" (supra) at 37 fn 98) it could have no bearing upon proceedings in the Supreme Court for possession. These are brought under its separate and distinct jurisdiction conferred by s20 of the Civil Procedure Act, replacing s79 of the Supreme Court Act. 35 I turn now to the reasons for the decision of the Tribunal for the purpose of identifying any issue estoppel, assuming for this purpose that issue estoppel could lie, notwithstanding that there was no determination on the merits. Issue estoppel does not in any event extend beyond an issue of fact or law determined in proceedings which was legally indispensable to that decision; Blair v Curran [1939] 62 CLR 464 at 531 per Dixon J. 36 The Tribunal here dealt with oral arrangements said by the respondents to constitute an oral tenancy agreement in respect of the subject property in Baulkam Hills. The agreement in question was said to have been made in or about October 1998, orally between Mr William Todd and his son Adam. It was said to be similar in its terms to a document produced on 5 January 2004 as well as being supported by the behaviour of the appellants in paying rent (plus other amounts) for a period of time and the fact that the appellants were said not to have denied the existence of a residential tenancy agreement when faced with requests to pay outstanding rent. 37 The Tribunal concluded that even assuming the document produced on 5 January 2005 was similar to the original, it was still flawed as a residential tenancy agreement, importantly, within the meaning of that term in the Act, and in order to ground jurisdiction. It did so for the following reasons: · "It does not identify the premises adequately, does not set out the term of the lease, does not provide for any of the standard clauses such as access by the landlord, security, pets, pool, etc … · There is no evidence to show that Mr Adam Todd agreed to the terms as set out in the original document. · The document itself does not clearly establish what was intended to be achieved. On the one hand it refers to 'rent' payable, but also requires the respondent to pay all outgoings including maintenance, council rates and insurance, all items that would normally be the responsibility of the landlord. · It uses words such as; 'You are to consider the house as your own. You can make all decisions as to what you want. We will not require you to do what we wish. If you wish to sell the house or to rent it, you may make these decisions and do all the work and we will accept with this'" 38 The Tribunal first made observations as to why various matters relied upon to establish a residential tenancy agreement was in place were not persuasive such as reference to so-called "rent" and that, if it was rent, it was in arrears. It noted that Adam Todd and his wife did make some payments said to demonstrate a level of goodwill and willingness and indeed preference to make some payments that would assist in paying off the loan of the property. The Tribunal observed that "Mr Adam Todd's behaviour subsequent to taking up occupancy is certainly consistent with his belief that he is making voluntary payments to assist with the loan and that the intention was to permanently transfer the house to his ownership in due course and the 'arrangement' had more to do with estate and tax planning than it did with tenancy agreements" [emphasis added]. The Tribunal then observed how it perceived the document to be regarded by Mr William Todd: "The document relied upon by Mr Adam Todd and written by Mr William Todd is also indicative of the way in which the agreement was regarded by Mr William Todd, viz; 'Adam is not paying rent so is not paying off the house' 'Adam is still required to pay off the house' 'If Adam does not pay off all the house this amount will be balanced by a cash variation in Gisella's will' 39 The Tribunal, having made these observations without reaching a definitive view as to which characterisation was correct concluded:

The above discussion is strong argument in support of the principle enunciated by the Tribunal in Briscoe v Scott (RTT 94/007753) and by the Supreme Court in Dube v Dube (S.C. 25 February 1991, unreported) that family arrangements are not intended to create legally binding tenancy agreements and that the presumption at law is that domestic arrangements are not intended to be legally binding. That presumption can, of course, be rebutted by the evidence.

However, I am satisfied it is impossible at this stage to say what the parties were agreeing to. There was no 'meeting of minds' in a contractual sense. Each thought the arrangement was about something else. The documents and surrounding circumstances do not clarify that confusion.

In this case I am simply not satisfied that the applicants have met their burden of proof that a residential tenancy agreement as defined in the Residential Tenancies Act 1987 was in place and consequently the Tribunal lacks the jurisdiction to hear and determine the dispute." 40 If there be any issue estoppel what appears immediately above is the only issue of fact or law actually determined and legally indispensable to its decision that the Tribunal lacked jurisdiction. Essentially what was so determined was that there was no "meeting of minds" in the contractual sense so as to enable the Tribunal to be satisfied as to what the parties were agreeing to and thus it could not find any "residential tenancy agreement". 41 That, insofar as it created an issue estoppel, was certainly not an issue estoppel to the effect that there was an agreement and that That agreement was one to permanently transfer the house to the ownership of Adam Todd or Adam Todd and his wife, either immediately or in the future. Certainly there was no determination in the reasons that the arrangement was in fact an ownership transfer based upon estate and tax planning. 42 Also invoked in this appeal is what is loosely referred to as Anshun "estoppel". It is more accurately described as belonging to that wider category of abuse of process; in particular the court's inherent jurisdiction to prevent an abuse of process by proceedings which are unreasonable or vexatious. That does not arise here in relation to the respondents' proceedings for possession brought under the Supreme Court's separate and distinct jurisdiction in that behalf. Those proceedings, ex hypothesi, could not have been brought in the Tribunal, so that there can be no unreasonableness or abuse of process in invoking the Supreme Court's jurisdiction as they have done. 43 When the primary judge came to consider the question of issue estoppel, his Honour first expressed himself less precisely in these more general terms: "It follows in my opinion that whilever the findings and orders of the Tribunal stand the plaintiffs are estopped from asserting in this Court that at the relevant time there existed between them and the defendants the relationship of landlord and tenant of the property"; at [32] 44 Then at [35] the primary judge expressed his conclusion accurately in these terms: "[35] The operation of the estoppel is limited to the ultimate facts which form the ingredients of the cause of action: Blair v Curran ; Mitsubishi Motors Australia Ltd v Harbord (1997) 69 SASR 75 at 93. There is only one such fact, namely that no residential tenancy agreement existed between the same parties over the same property at the same time. As to any other issue arising out of the arrangement it is open to the parties to litigate in this Court the facts and their consequences, even though the Tribunal might have expressed an opinion or might have made findings about them." 45 I agree with that conclusion. In particular, I consider that it is clear that there was no issue estoppel or decision of the Tribunal which would preclude the respondents from contending, as they did before the primary judge, that: (a) there was no agreement to transfer ownership in the property to the appellants; and (b) the respondents were entitled to recover possession based upon their ownership, in the absence of a residential tenancy agreement and without therefore being required to comply with the Residential Tenancies Act 1987 in terminating any arrangement between the parties. 46 The primary judge concluded at [72] that, "the arrangement was no more, for present purposes, than an agreement to negotiate a price if the defendant should offer to purchase." His Honour noted that no offer eventuated and "the arrangement was terminated by each side" and that "given that there was no lease, the parties were in no enforceable contractual relationship". The primary judge was not precluded from so determining by any of the doctrines sought to be invoked by the appellant. 47 Likewise the primary judge concluded at [73] that: (i) the respondents did not agree to purchase the property on trust for Mr Adam Todd; and (ii) no question of lack of writing or formality arises, there being simply no such agreement. His Honour also concluded (at [75]) that "there was no agreement for sale of the property" so that "no question of repudiation arises". 48 That disposes of the appellant's argument that res judicata, issue estoppel or Anshun estoppel precluded the respondents from commencing proceedings for the recovery of possession in the Supreme Court pursuant to s20 of the Civil Procedure Act, being in essentially the same terms as the now repealed s79 of the Supreme Court Act. The legislative history is that for many years proceedings for possession were brought by what was then called a writ of ejectment and were governed by the Common Law Procedure Act 1899 (NSW). More recently, however, the action of ejectment was abolished and replaced by an action for "possession of land" (being as I have said pursuant to s79 of the Supreme Court Act now replaced by the equivalent provision of s20 of the Civil Procedure Act).

Right to Possession 49 The availability of s20 is not precluded by a finding that there was no residential tenancy within the Act. The latter does not constitute an exclusive code precluding resort to the Supreme Court's jurisdiction under s20 of the Civil Procedure Act by an owner kept out of possession by an occupier without a lease. Here the appellants themselves claim to be owners, or to have quasi-ownership rights. 50 The primary judge, free of any estoppel, had thus to consider the parties' competing claims to possession of the property, doing so in adjudicating upon the respondents' action for possession in the Supreme Court. The primary judge's reasoning appears most clearly at [69]-[77]: "[69] Looking overall at what was said and written, I would be prepared to infer that there was an arrangement of sorts between the plaintiffs and the defendants. Its terms were first that if conditions remained as they were and the parties did not come to some different arrangement, the defendants would have exclusive possession of the house, that they should pay outgoings, some of which the plaintiffs called "rent", and that the defendants might purchase the house from the plaintiffs at a price and on conditions to be negotiated.

[70] It is difficult to go further, however. There was no provision for what should happen if the defendants stopped paying outgoings. There was no clear provision for ascertaining the price if the defendants should wish to purchase.

[71] I think that what the parties did in October 1998 was provide a home for the defendants and canvass the sort of arrangements they might come to later on if things turned out well. Both sides were entitled to withdraw from the understanding if it no longer suited them. The defendants' failure to make any contribution to the cost of maintaining the property and their refusal to allow the plaintiffs access to their own property, thwarting efforts to keep it in good repair, can only be seen as withdrawing from such arrangements as were on foot. The plaintiffs, too, withdrew from the arrangement when they realised at last that further efforts to deal reasonably with the defendants would not succeed and when it became obvious that the defendants would never be able to make an offer to buy the premises. The first defendant was penniless and had received no income apart from welfare since 2003.

[72] In my view, the arrangement was no more, for present purposes, than an agreement to negotiate a price if the defendants should offer to purchase. No offer eventuated and the arrangement was terminated by each side. Given that there was no lease, the parties were in no enforceable contractual relationship.

[73] The plaintiffs did not agree to purchase the property on trust for the first defendant. No question of lack of writing or formality arises. There was simply no such agreement.

[74] Since the defendants have no obligations in contract no questions of relief arise.

[75] There was no agreement for sale of the property. No question of repudiation arises.

[76] I am not satisfied that the second defendant's sale of her house was linked in any but a temporal way to her decision to occupy the property and her agreement to pay outgoings. The second defendant did not give evidence. I infer that she sold her house because she had to pay her debts and because she had to leave Oakdale. She obtained no equitable interest in the property by the payment of any amount.

[77] In my opinion the plaintiffs have established a right to possession of the property by requiring the defendants, in the letter of 30 July 2004, to vacate the property and by the defendants' failure to do so. They are entitled to recover damages from the defendants calculated from 2 September 2004." 51 The letter of 30 July 2004 was clear enough in its requirement that Adam and Suzanne Todd should vacate the property; I quote it below as it was quoted from the judgment at [24]: "PO Box 174 ROSEVILLE NOTICE TO VACATE

As we are greatly concerned about the condition of our property and your refusal to co-operate in any way regarding the white ant inspection referred to in our previous letters of 31/1/04 and 24/6/04, we have no choice but to evict you.

We require you to vacate the premises at 52 Rockley Ave. BAULKHAM HILLS by 1st September 2004. ( In excess of 14 days plus 5 days for postage.)

We expect the property to be in the "as new" condition you found it. See letter of 28/1/04.

1. Your rent is currently overdue in excess of four years. 2. You have done a large amount of damage to the property. Partial list attached. 3. You have refused access to pest inspectors for an urgent white ant inspection and treatment. 4. You have failed to arrange for a white ant inspection and a report to us, at a time to suit yourselves. 5. You have not met most of the conditions of the agreement of December 1998.

WG. & G.A. Todd 2 Gregory Street, ROSEVILLE 2069 30th July 2004" 52 The second set of submissions by the appellants puts in contention that such an arrangement as found by the primary judge was properly found based not only on the evidence before the primary judge but also evidence that was not admitted and evidence sought now to be admitted as fresh evidence. It is to that question I now turn. 53 The appellants assert that the arrangement was not as found by the primary judge, but was one "to do with early inheritance, estate planning and taxation". That, as I understand the appellants' argument, was said to encompass the various possibilities set out under (b)(ii) earlier, namely: (ii) such arrangement, so evidenced and variously described, was alleged by the appellants to be contract-based and to confer a right to possession on the appellants in perpetuity or otherwise to constitute a gift to the appellants of the property, with conditions, or otherwise to constitute some kind of irrevocable perpetual licence to occupy. 54 When claimed possibilities are so various, though all incompatible with the respondents' immediate right to possession, that does not enhance their credibility. 55 They depend importantly on credit findings, insofar as there is lacking any formal documentation. 56 The primary judge formed a poor impression of Mr Adam Todd, who did give evidence at trial; Suzanne Todd did not. He was described by the primary judge as "argumentative, evasive and unwilling to attempt forthright answers to questions", giving examples (at [49] to [51]). In contrast his Honour formed a favourable view of the then plaintiffs, William and Gisella Todd (at [45], [47]) and in particular accepted their evidence where it conflicted with that of Adam Todd (at [48]). 57 In various ways, the appellants sought to challenge those credit findings, principally by seizing upon factual evidence said to be deliberately false emanating from the respondents, principally Mr William Todd, and by reference to certain written material. I turn to that first. 58 The primary judge placed particular reliance on what was, according to Mr William Todd's evidence, said at an important early meeting between William and Gisella Todd with Adam and Suzanne Todd on 23 October 1998. This followed a period of house-hunting and the acquisition of the Baulkham Hills property. There was a document which the primary judge accepted was read out by William Todd, as elaborated by William Todd in his evidence, to Adam and Suzanne Todd, describing what, on William Todd's version was to apply between the four of them. I quote from the relevant part of the judgment. It starts with what William Todd says he read out from the document and then quotes the document: "[39] The evidence of the first plaintiff about what was said at the meeting is as follows. He had with him a document and read from it points that it contained. As he spoke there was this conversation - First plaintiff : I am going to read to you a document regarding the conditions that all three of us must agree to before you move into the house. If you have any problems with any of these, let me know now and we will sort them out. All rent may be considered a payment towards the ultimate purchase of the house at Bill and Gisella's discretion. We plan at this stage that it will stay in our names. If you make a fortune early, you may choose to buy it one way or another. If you decide you want to buy it at some stage, we will work out a new agreement as to what will happen at that time. The aim is to make the deal as tax and investment efficient as possible. Tax-wise, all costs are tax deductible if a commercial rent is charged. If a nominal rent is charged, only costs to that amount are allowable, that is, no tax advantage can be gained. You realise this money is all borrowed, so it is most important that you meet all the rent payments. I will talk about this further down. You are to consider the house as your own. You can make all decisions as to what you do. We will not require you to do what we wish. However, we may give you our advice which you will listen to, but may not choose to follow. So you may decide to make some changes in the future, you may decide you want to move on or want to move on to something bigger, or you want to make some improvements to the house.

First defendant : Does that mean that we can add a room or a second storey because I will need more office space.

First plaintiff : If you want to make any improvements, just ask us and we will probably be happy to go along with what you would like to do. If you want to take the pool out so that the dogs can have more room, I would certainly agree to that, as I consider a pool is more a liability than an advantage. Do you accept this?

First Plaintiff : A simple statement of the arrangement will be provided in the future. I will write up what we agreed to and get a copy to you before you move in. You will pay all costs, Council rates, water rates, repairs, etc. What this means is that you will pay all the bills and save me the work. These amounts are actually part of the rent and I can then claim these amounts back as a tax deduction. You will in effect be acting as our agent and this will be an advantage to you as it will lower your effective rent. Are you happy to do this?

First plaintiff : You will in addition pay rent at this date of $880.00 monthly plus any other amounts which may be needed to equal a commercial rent. $310.00 less the usual agent's costs. I have spoken to several real estate agents and the reasonable commercial rent will be about $310.00 a week. So if we take off the usual expenses involved in a rented property, an additional amount of rent of $220.00 per week will equal a commercial rent for tax purposes. This figure will have to be adjusted each year so that the rent maintains a commercial rate. It is just a little more than you are currently paying to the Bank. So will you be able to meet this amount without any problems.

Second defendant : Yes, we will be able to meet that without too much trouble.

First plaintiff : You will keep accurate records of every cent spent on the house. This will include phone calls, car costs, postage, etc. regarding the house, purchases, repairs, paying bills, etc. You will give me a full copy of these expenses every six months or yearly. All receipts will be in our name. We need these records for our taxation records as because of the interest payments, the property will be negatively geared for quite some years. These payments in effect help pay the interest on the loan. Because we have borrowed a 100% of the money initially, the interest payments will be much more than the rent we will be getting. Any late payments of rent you will be charged at the current St George Bank interest rate as that is where we borrowed the money. This may be varied by mutual agreement at any time. A form has been provided. Better still if you keep it on Excel, this will make things easier for me. If you wish to sell the house or rent, you may make these decisions and do all the work and we will be happy with this. As you know we do not like selling what we have bought but if you decide to go to America or move interstate, we will consider whether to sell the house to buy another, but you will have to meet all the costs and do all the work. We will work out a similar agreement or we could rent the house and some of the income could help you meet your costs elsewhere. When you sell Suzanne's house, any lump sum you provide to us will one, help us to reduce our loan or pay the interest and two, be considered as a payment towards the purchase of the house.

Second defendant : The Bank has made a mess of our direct debit payments, so we have less money than we thought. There will be no money left over to give to you.

First defendant : I am in the process of confronting the Bank and I am going to … [I cannot recall what else Adam said here]

First plaintiff : Ok then we will forget about that option. Do we all understand and is everybody happy with this condition.

First plaintiff : Gisella, are you happy with all of that.

First plaintiff : I'll prepare a written document of what is being agreed here and the changes and provide you with a copy shortly.

[40] The first plaintiff exhibited to his affidavit a copy of the document from which he had read. It was obviously printed from an electronic record. I assume that one copy was made for the meeting of 23 October 1998 and another for exhibition in this Court. I shall set out the full text of it. It seems to be the document referred to in the Tribunal's reasons. C:\1data\1family\bhilcond.doc

All rent MAY be considered as a payment towards the ultimate purchase of the unit. At B & G's discretion.

We plan at this date that it will stay in our names.

If you make your fortune early you may choose to buy it from us in one way or another.

The aim is to make the deal as tax and investment efficient as possible.

Tax wise all costs are tax deductible if a commercial rent is charged.

If a nominal rent is charged only costs to that amount are allowed ie no tax advantage can be gained.

You are to consider the house as your own. You can make all decisions as to what you do. We will not require you to do what we wish. However, we may give you our advice which you WILL listen to it but may not choose to follow.

A simple statement of the arrangement will be provided in the future.

You will pay all costs. Council rates, Water rates, Repairs etc.

You will in addition pay rent at this date $880 monthly plus any other amounts which may be needed to equal a commercial rent. ($310 - usual agents costs)

You will keep accurate records of every cent spent on the house. This will include phone calls, car costs, postage etc. re the house, purchases, repairs, paying bills etc..

You will give me a full copy of these expenses every 6 months or yearly.

These payments in effect pay the interest on the loan.

This may be varied by mutual agreement at any time.

A form has been provided. Better still if you keep it on XL this would make things easier for me.

If you wish to sell the house or rent it you may make these decisions and do all the work and we will be happy with this.

When you sell Suzanne's house any lump sum you provide to us will 1. Help up to reduce our loan (or pay the interest) 2. Be considered as a payment towards the purchase of the house. Will (Codicil) + agreement." 59 That meeting followed a period of joint house-hunting. When it precisely began is a matter of controversy. In my view nothing hangs on that precise date though the appellants place great reliance on this, as I later explain. 60 The primary judge interpreted what motivated the Todds senior in these terms: "[36] … Some general statements may be made. The plaintiffs were investors who owned several parcels of land suitable for domestic letting. All except two of them were let by ordinary written leases prepared by real estate agents. The two exceptions comprised the property and a house premises occupied by their daughter, the first defendant's sister. Plainly, they intended to treat their children differently from the strangers who occupied their other premises. As parents of the first defendant and parents-in-law of the second defendant and grandparents of their children the plaintiffs had a special interest in helping them find suitable accommodation, well removed from Oakdale. The defendants were unable to finance a move, at least to premises … having advantages like those offered by the property. The plaintiffs had helped the first defendant financially at earlier times and he had failed in his obligations to repay borrowed monies. They believed that any undertaking he made to pay money in the future might not turn out to be reliable. [37] The plaintiffs exchanged contracts on 20 October 1998. Although it was their settled intention to make the property available to the defendants to live in, they obviously had no intention of making a gift of it. They completed the purchase in their own names. They did not invite the defendants to become purchasers or to undertake any obligation to the vendor or the bank.

[38] Both plaintiffs and both defendants were present at the meeting at the plaintiffs' house on 23 October 1998." 61 The primary judge then turned to the evidence of Adam Todd, given by affidavit and orally and upon which he was cross-examined. That evidence seeks to contradict much of what had been given in evidence by the respondents. As I have explained, the primary judge preferred the evidence of the respondents and made favourable credit findings in relation to the respondents but not in relation to Mr Adam Todd. The constraints, though not absolute, on appellate interference with credit-based findings need no rehearsal here. 62 I here need to consider both the evidence of the appellants at trial and the further evidence which the appellants complain was not allowed to be adduced by cross-examination at trial. I also need to consider the further matters of evidence pressed on appeal including the fresh evidence sought to be adduced by the appellants from Suzanne Todd. I do so by reference to the appellants' statement of issues handed up at the appeal which outlines broadly the appellants' position concerning the evidence. 63 One important matter needs to be emphasised with the sequence that followed. The court records and the judgment of Rothman J of 26 May 2006 both confirm that the matter at first instance proceeded on the basis that "the trial proceed by way of affidavit". The orders also required that "all affidavits of Adam Todd and/or Suzanne Todd, or in the interests or the same or similar interests, be filed and served in hard copy by 7 June 2006." Similar provision was made for all affidavits of William Todd and/or Gisella Todd to be filed and served in hard copy by 9 June 2006. Provision was also made for each party to file and serve a tender bundle of all documents on which they "will rely at the trial". 64 On 6 June 2006 the order described as order 4 made on 26 May 2006 was vacated and the following order substituted "Mr A Todd and Ms Suzanne Todd file and serve by 1pm 8 June 2006 a list in hard copy of the affidavits and documents upon which they will rely at hearing". This was stated in the Associate's record to be "on the basis of the statement by Mr Adam Todd that all evidence on which either he or Ms Suzanne Todd will rely at the proceedings are contained in the evidence already filed and/or served in affidavits or in soft copy on disc". 65 This made it very clear that, in circumstances where Ms Suzanne Todd did not file any affidavit at trial, the trial was to proceed on the basis only of Mr Adam Todd's affidavit evidence and the documents dealt with as above. That is what happened. It should also be recorded that Ms Suzanne Todd did not seek to give oral evidence and Adam Todd did not call her to give oral evidence. Furthermore, Suzanne Todd made no complaint at trial that she had been unable to prepare affidavits of evidence and she did not seek to tender or read any affidavits at the trial. The fact that she appears to have signed Mr Adam Todd's affidavit of 26 April 2006 does not amount to her making an affidavit on her own behalf. It certainly could not mean that she in some way swore an affidavit by reference to Adam Todd's affidavit; see Blue, 132. I should here note that the affidavit of Adam Todd states that "I have authority to act on behalf of the second defendant in all matters" (the second defendant being Ms Suzanne Todd) and then sets out the materials upon which "the defendants intend to rely". 66 The evidence that Ms Suzanne Todd now wishes to put on is contained in an affidavit of 3 May 2007 much of which is more properly described as submission. Given that earlier sequence of events there is no justification for its admission now for consideration on appeal of the appellants' case. That is reinforced by much of what the affidavit contains including the fresh evidence sought to be put on. Thus it asserts that inspections of property involving both appellants and respondents had occurred prior to 21 September 1998. Such significance as that date may have is best assessed by the evidence given at trial. It is however not in dispute that 21 September 1998 was the date that DOCS came the appellants' then house, in what was described as a raid by DOCS. 67 Thus in cross-examination of Mr William Todd by Suzanne Todd (who was followed in cross-examining Mr William Todd by Mr Adam Todd) the following questions and answers appear at Black, 51K-O: "S TODD: Q. Could I ask when did you first approach the defendants about buying a house? A. About me buying a house?

Q. About buying a house? A. When did I first approach? Some time after DOCS kidnapped or took your child, which I believe was somewhere about 21 September - I'm not good with years I'm afraid. 98. Some short time after that when you were, you and Adam were concerned about the neighbours and wanted to move." [emphasis added] 68 Subsequently when Mr William Todd was cross-examined by Mr Adam Todd, Mr William Todd's evidence becomes more emphatic that no discussion of the kind mentioned above occurred prior to 21 September 1998. I quote from the relevant evidence below: "Q. I put it to you that the discussion on that limit [on $300,000 an amount the Todds senior could afford to borrow to buy a house] was prior to 21 September 1998, which is the DOCS raid? A. No, it was not. I had no intention of buying a house prior to the DOCS raid.

Q. I put it to you that you said you could not purchase a house on the North Shore for the defendants?

HIS HONOUR: What has this got to do with anything, Mr Todd?

A TODD: To answer that question would prejudice where it's going.

A TODD: Q. I put it to you you said the details can be worked out later once a property was found? A. I don't understand the question.

Q. I put it to you that prior to September 1998 you said that the details of the arrangement could be worked out once a property was found? A. Prior to the DOCS raid I was not discussing any matter of purchase of property with you.

Q. I put it to you that you asked what areas might be of interest to the defendants?

A TODD: Q. Prior to 21 September 1998. A. No, not prior to the DOCS raid, never."

(Black, 153E-R) 69 Further questioning on that date was disallowed, as it appears on the grounds of relevance. That questioning comprised an attempt by Mr Adam Todd to elicit from Mr William Todd both that the discussions pre-dated the DOCS raid and that the four of them were searching for a property within a $300,000 price range prior to the DOCS raid, being before 21 September 1998; see transcript at Black, 153 and following. It should be noted that Mr Harris, SC appearing for the then plaintiffs pointed out in objecting to this line of questioning that it had never been asserted in the pleadings that there was some earlier arrangement or agreement between the parties as to which the primary judge concurred (Black, 156F-I). 70 I do not consider that this fresh evidence sought to be adduced, instanced by that above, should be allowed. It was, as I have earlier said, in circumstances where Ms Todd had the opportunity prior to trial to file any affidavit evidence in circumstances where there was a pre-trial direction that the trial proceed by affidavit. Ms Todd did not do so. Nor has it been shown that the further evidence would go to anything other than, conceivably, credit, and as I see matters would be at best tangential even to that. The same applies to video evidence and telephone recordings of places inspected prior to 21 September 1998. Earlier inspections of themselves would not establish any prior agreement or understanding in relation to providing a house for the appellants nor the basis for doing so. Accepting for present purposes that there was, pre-DOCS raid, some impetus for looking for houses, such as closer proximity to grandchildren (see below) it by no means follows that the DOCS raid was not a material reason for the appellants accelerating that search. Nor does an earlier search date go anywhere in supporting the contentions of the appellants as to ownership of such a house being theirs. 71 I likewise do not consider that the primary judge's rejection of this evidence was such as to indicate any appellable error on his Honour's part. 72 Under "Other Issues" at para 9 and following, the appellants in effect seek to challenge the primary judge's consideration of what occurred at the meeting of 23 October 1998. I here note that the Tribunal found that there was no meeting of minds on that day and therefore no concluded agreement; if issue estoppel were available, it would therefore be against the respondents on that issue. In particular the appellants now seek to introduce the conduct of the parties from 20 December 1998 until March 2005. This is said to "form the basis of the contractual and legal relationship between the appellants and the opponents". Particular reference is made to the appellants' pleaded first cross-claim brought by Suzanne Todd of which paragraphs 19 and 20 have some relevance to the matters dealt with above and which I quote below: "19) In about June 1998 the First and Second Cross Defendants, who are my Husband's parents, approached me and my husband, at my property, and offered to assist us with the purchase of a property in Sydney, which would give the Cross Defendants easier access to my son, and their grandchild.

20. My husband and I commenced looking at properties with the Cross Defendants specifically to this offer around July 1998." 73 Significantly if it be accepted that the search commenced around July 1998 the only properties specifically mentioned of any moment were those looked at on 19 September 1998 and then in October 1998 where the Baulkham Hills property was viewed. 74 None of this evidence has any material relevance. The fact that the primary judge did not permit pursuit of that matter in cross-examination discloses no appellable error. It could not conceivably be argued that any generalised offer of the kind asserted in the cross-claim would contradict the primary judge's finding that there was no agreement as alleged to acquire for the appellants property by way of gift or otherwise in the various ways in which that is put. 75 The appellants sought also to rely on what is described as Exhibit 9, to be found at Blue, 253-4, being a computer generated document. As was clarified in oral argument before this Court, the document was first referred to when Ms Suzanne Todd attempted to cross-examine William Todd on it early in the proceedings on 15 June 2006. She was prevented from doing so at that point because it had not been established that it was William Todd's own document; Black, 79F-W. William Todd at that point denied that it was a document of his. 76 Then on 19 June 2006 William Todd gave further evidence in examination in chief when he acknowledged that it was his document. He explained that the first time he was aware that Adam Todd had such a document was in the Tribunal though in that version there was no yellow highlighting (Black, 261F-O). Then in cross-examination by Adam Todd he recalled producing the document in the earlier District Court proceedings of 12 October 2004 which pre-dated the Tribunal proceedings of 14 December 2004. William Todd readily acknowledged that he had produced that document in the District Court proceedings (Black, 261S-Y). 77 Then at Black, 262D William Todd was asked whether he agreed he had set out his thoughts on a loan to "Viv (Adam Todd's sister) and how the defendants' property was being balanced to that at about the year 2001". To this he answered "it is a think-tank document which you see at the top it says 'see update' which means it is out of date". 78 Mr Adam Todd was then prevented from asking further questions by way of cross-examination on it. This was on the basis that the primary judge concluded that "what we are doing now has very limited scope, Mr Todd. We are dealing with a case in reply." 79 The appellants' complaint is therefore not that the document was not admitted as evidence but that it was only admitted at that late stage in the trial and the appellants were not permitted to continue to cross-examine William Todd on it. 80 Clearly at that point there could have been no suggestion that the document was somehow stolen by Adam Todd from his father (Black, 79) nor could there be any suggestion that eventually played any part in the primary judge's reasoning. Cross-examination on the document was originally disallowed and it was not admitted in evidence (at Black, 79) because it had not been shown to be William Todd's document. That was only shown later in the trial. 81 This document itself did play some part in the Tribunal's reasoning where reference to it appears under the heading "Respondents' Evidence". The Tribunal express the unsurprising conclusion that the document demonstrates that the applicants (William and Gisella Todd) "were considering the arrangement as one of estate planning". I quote from the relevant part of the Tribunal's determination at p3: "A document prepared by the applicant (filed by respondents, # 040005) was relied upon by the respondent to demonstrate the attitude of the applicant towards the agreement between the parties. That document states in part: 'Adam is not paying rent so is not paying off house' 'Adam is still required to pay off the house' 'If Adam does not pay off the house this amount will be balanced by a cash variation in Gisella's will …' 82 However, it is important to appreciate that the Tribunal makes no actual finding on this aspect. The Tribunal merely refers to the series of statements from the record of the meeting advanced by William Todd. 83 The observations of the Tribunal (at 7 in its Findings) as to the document relied on by William Todd and quoted in the judgment at [40] goes no further than to identify statements from it namely "You are to consider the house as your own. You can make all decisions as to what you want. We will not require you to do what we wish. If you wish to sell the house or to rent it, you may make these decisions and do all the work and we will accept with this [sic]". The Tribunal's comment is that "all of these statements are indicative of an intention to create some ownership in the house by the respondent". 84 The Tribunal's findings go on to state that "the fact that the respondent did make some payments plus insurance, rates, etc for a period time does demonstrate a level of goodwill at that time and a willingness and indeed preference, to make some payments that would assist in paying off the loan. The mere fact of giving the name 'rent' to such payments in the records kept by the applicant does not influence the nature of the agreement itself." (Tribunal at pp7-8, Red, 17-18.) 85 But none of this avails the appellants even were the Tribunal's findings relevant. This is because the Tribunal, notwithstanding these observations, concludes that "there was no 'meeting of minds' in a contractual sense. Each thought the arrangement was about something else. The documents and surrounding circumstances do not clarify that confusion"; Tribunal at 8, Red, 18. Moreover the earlier reference to repaying a loan is clearly the loan that William Todd took out to buy Baulkham Hills, not a loan by him to Adam Todd or Adam and Suzanne, to enable them to purchase the property. 86 What does this further evidence amount to from the document described at trial by William Todd as a "think tank" document? Clearly one might infer that there was a generalised intention to assist Adam and his sister Viv, with housing, where in Adam's case he was to pay rent and in that sense "to pay off the house". However, as the evidence shows, he was well behind in doing so. 87 Relevantly in the document under "Update" appears the following: "UPDATE the following: If Adam does not pay off all house this amount will be balanced by a cash va [sic]…Gisella's will or by Kellyville plus a cash adjustment either way (At original purchas [sic]… prices). Kellyville purchase price was roughly equivalent to Baulkham Hills. If we buy another property for Viv all amounts relevant to Marsfield can be transferred to the new property. If after paying off the new property Viv wishes she can purchase Marsfield A [sic]… B&G at its original purchase price plus the initial costs. Marsfield is not to be transf [sic] … into her name but 'willed' to her separately from the 50% share of the estate. A com [sic] … sale has been prepared and signed by both parties which will come into effect when [sic] … B&G are dead. This will be effectively the settlement date if not fully paid off by the [sic] …" [Note: the end of each line at the right margin has been cut off] 88 The above quotation, while it omits certain words, does suggest the possibility that if Adam did not pay off all of the house by paying rent there was a generalised intention on the parents' part for the amount, presumably the shortfall, to be balanced by cash via Gisella's will or by a further property called Kellyville which the Todds owned, with provision for a cash adjustment either way. It was noted that Kellyville was roughly equivalent in purchase price to Baulkham Hills. Even accepting that, it does not follow that there was any binding agreement nor such as to preclude any change of intention on the part of the parents in the events that happened. 89 Even the first version of what was said to reflect the parents' intention and was accepted as doing so and as having been conveyed to the appellants at the meeting on 23 October 1998 (see Judgment at [39]-[40]) makes clear that the rent payments were only such as "may" (emphasised in the document) be "considered as a payment towards the ultimate purchase of the unit". Moreover this was "at B & G's discretion". That clearly indicated that a decision remained to be made for the future as to whether the rent would be so treated. That was entirely consistent with the property at Baulkham Hills staying in the parents' names. The further statement, "if you make your fortune early you may choose to buy it from us in one way or another" does not detract from this. Nor does it detract from the statement to say "you are to consider the house as your own. You can make all decisions as to what you do. We will not require you to do what we wish. However, we may give you our advice which you will listen to it but may not chose to follow". That is the language one would use as owner. 90 The document provided for what happened if Suzanne's house was sold. Any lump sum would "help us to reduce our loan (or pay the interest) and be considered as a payment towards the purchase of the house". In the events that happened that lump sum was not provided to the Todds senior and could not be said to have been provided indirectly either. 91 The second document contained at Blue, 235 and headed "Agreement re House Baulkham Hills" is similar but not identical. Thus the second paragraph states "If you make your fortune early you may choose to buy it from us in one way or another. At the 1998 price plus all purchase costs if rent has always been paid on time." 92 That is certainly not the language of gift. Moreover it is clearly predicated on all rent being paid on time as was not the case. Finally, it presupposes an election to buy the house predicated on making "your fortune early". This clearly means that this was for the future and would require further funds on Adam and Suzanne Todd's part for that purpose. 93 The appellants were to pay costs such as council rates, water rates, repairs, etc. as well as the rent of $880, "monthly from 15/1/99 (plus or minus annually any other amounts which may be needed to equal a commercial rent)"; Blue, 235. This was in a context where "all rent may be considered as a payment towards the ultimate purchase of the house. At B & G's discretion". None of this converts these arrangements into a gift or some analogous transaction but points clearly to the prospect of changed intentions. Any parity that might have been required to be maintained between Viv and Adam could, as contemplated by the documents, have been achieved via the wills of either parent. But that again does not alter the basic character of these arrangements as informal, not binding, subject to a condition that was never fulfilled (payment of all rent on time) and in any event subject to change of mind on the part of the parents. 94 The primary judge at [41] to [44] sets out the evidence of Mr Adam Todd from his affidavit of 6 June 2005. This differs in some respects from William Todd's account of the conversation with Adam Todd at William Todd's house in October 1998. In particular Adam Todd denies that William Todd read to them from a document and disputes that at each point said "do you understand this". Instead at para 50 of Adam Todd's affidavit of 6 June 2005 he asserts, "in the kitchen, the plaintiffs and the defendants briefly discussed the arrangement. That the property would be purchased, kept in their name and we would live in it and it would be our home. We could sell, rent it, renovate it, extend it or anything else we wished and did not need to seek their permission first. Provided we paid all the costs for such activities." I pause to note that this of itself does not amount to an assertion by Adam Todd of a binding agreement for the house to be gifted or otherwise made available with any shortfall in rent to be made up by adjustments under a will of either parent. 95 In any event, as I have recorded, the primary judge accepted the evidence of William and Gisella Todd where it conflicted with that of Adam Todd and made adverse findings as to credit in relation to the latter. Likewise the primary judge rejected Adam Todd's denial that William Todd used the document at the meeting recording that "I think that his recollection of the events is unreliable" (Judgment [52]). Likewise he concludes at Judgment [54], contrary to what is asserted in paragraphs 3, 4, 11 and 17 of Adam Todd's affidavit of 30 May 2005, that "I do not accept that the first defendant ever believed that by making payments he was acquiring any equitable interest in the property or that he was establishing any future right, estate or interest in the property. I think that if he had had such a belief he would have said so in his letters to the plaintiff." 96 The primary judge drew no adverse inference from the fact that Ms Todd did not give evidence (Judgment [55]). 97 Finally, at [58] the primary judge accepts that the record (referred to at Blue, 235) was made by William Todd and that photocopies of it were delivered to Adam and Suzanne Todd before or at the time they took up occupation; Judgment [57]-[58]. 98 While the primary judge accepted that Adam and Suzanne did not acknowledge receipt of the document nor signed it, nonetheless from that document and the earlier mentioned document, the primary judge drew the conclusions set out at [61]-[76]. Those conclusions were fatal to the appellants' case at trial. There is nothing that has been raised in the further evidence to which reference has been made which would lead me to conclude that there was any appellable error in the conclusions reached by the primary judge. In particular I would conclude that it was well open to the primary judge to conclude that: (a) there was no agreement which rendered any arrangement for exclusive possession other than conditional in circumstances where the conditions so far as rent payment was concerned were not fulfilled; (b) there were such uncertainties as to preclude any binding arrangement; (c) the arrangements were such that both sides were entitled to withdraw from the understanding if it no longer suited them; (d) the failure by the appellants to make contributions to the cost of maintaining the property and their refusal to allow the respondents access to their own property thwarting efforts to keep it in good repair amounted to a withdrawal from such arrangements as were on foot and when the respondents had realised that further efforts to deal reasonably with the appellants would not succeed, and when it became obvious that the appellants would never be able to make an offer to buy the premises, being penniless and having received no income apart from welfare since 2003 the respondents were likewise entitled to and did withdraw from the arrangement; (e) the arrangement was no more than an agreement to negotiate a price if the appellants should offer to purchase but that no offer eventuated and the arrangement was terminated, there being no enforceable contractual relationship; (f) there was no agreement to purchase the property on trust for Adam Todd; and

(g) sale of Suzanne Todd's house was only linked in a temporal way to a decision to occupy the property and her agreement to pay outgoings, it being an inference fairly capable of being drawn, as the primary judge concluded, that she sold her house because she had to pay her debts and because she had to leave Oakdale and obtained no equitable interest in the Baulkham Hills property by repayment of any amount. 99 It also follows that, the respondents being entitled to possession as they were, no issue of trespass could arise.

OVERALL CONCLUSION 100 I consider that this appeal should be dismissed with costs and would order as follows: (1) Appeal dismissed. (2) Appellants to pay the respondents' costs. 101 CAMPBELL JA: I agree with Santow JA. 102 HANDLEY AJA: I agree with Santow JA. **********

14/09/2007 - Change to lower court files numbers - Paragraph(s) cover and top page 1

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