Supreme Court New South Wales Medium Neutral Citation: Hutson v Roufeil [2020] NSWSC 864 Hearing dates: 17 December 2019 Decision date: 03 July 2020 Jurisdiction: Common Law Before: Ierace J Decision: (1) Judgment for the plaintiffs for possession of the land identified by the hatching on Annexure "A" of the Schedule. (2) The second defendant to pay the costs of the plaintiffs. Catchwords: REAL PROPERTY – possession of land –indefeasibility of title – personal equities – where the plaintiffs are receivers and managers appointed by a lender who has legal title over the property – where the second defendant alleges an in personam exception to indefeasibility – where second defendant alleges a life estate was granted and estoppel by convention applies – no evidence of the requisite assumptions being adopted by all parties – no exception to indefeasibility found – possession granted to the plaintiffs Legislation Cited: Real Property Act 1900 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Charub Pty Ltd v Triandafyllou [2019] NSWSC 487 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; [1983] HCA 25 Moratic Pty Ltd v Lawrence James Gordon & anor (2007) 13 BPR 24713; [2007] NSWSC 5 O'Brien v Bank of Western Australia Ltd (2013) 16 BPR 31705; [2013] NSWCA 71 Smilevska v Smilevska (No 2) [2016] NSWSC 397 Category: Principal judgment Parties: Robert William Hutson as receiver and manager of certain property of Mark Noel Fraser (First Plaintiff) Jennifer Anne Nettleton as receiver and manager of certain property of Mark Noel Fraser (Second Plaintiff) Mark Damian Charles Roufeil in his capacity as trustee of the Estate of Mark Noel Fraser (a bankrupt) (First Defendant) Noel George Fraser (Second Defendant) Representation: Counsel: J Burnett (First and Second Plaintiffs) J Dooley (Second Defendant) Solicitors: Herbert Smith Freehills (First and Second Plaintiffs) Patey & Murphy Solicitors (Second Defendant) File Number(s): 2019/309086 Judgment 1. HIS HONOUR: The nature of this matter is an application for summary judgment for possession of land, brought by way of a notice of motion filed on 7 November 2019 by the first and second plaintiff, being Robert Hutson and Jennifer Nettleton respectively (collectively, "the plaintiffs"). The plaintiffs are the receivers and managers appointed by a lender who has a registered mortgage over the property in question, following a default in repayments by the borrower, who is the registered proprietor. It is a rural property in the Hunter Valley, comprising 13 separate parcels of land ("the property"). The registered proprietor, Mark Fraser, is a bankrupt ("the bankrupt"). The first defendant, who is not defending the proceedings, is the trustee of Mr Fraser's estate in bankruptcy. 2. The second defendant, who is the bankrupt's father, Noel Fraser, claims that he has an unregistered life estate over part of each of four parcels of land over which he has lodged caveats, on which there is a house which he occupies, providing him with an in personam exception to the lender's indefeasible title. The relevant background 1. The background to the matter, except in respect of the second defendant's claim, is not in dispute and is to the following effect. 2. In 2000, the second defendant and his wife, Elsie Fraser, since deceased, sold the property to the bankrupt and his then wife, Leeanne Fraser. 3. On 23 November 2000, a "Deed of Arrangement" was executed that purported to create a life estate for the benefit of the second defendant and Elsie Fraser to occupy part of the property ("the Deed"). The parties to the Deed are described as the second defendant and Elsie Fraser of the one part, and the bankrupt and Leeanne Fraser of the other part. Its recital is as follows: "WHEREAS: A. [The second defendant], Elsie and [the bankrupt] are the registered proprietors and beneficial owners of the Property as tenants in common in equal shares. B. [The second defendant] and Elsie have agreed to sell their two thirds interest in the Property to [the bankrupt] and Leeanne for the Price. C. The parties have entered into the Contract. D. [The second defendant] and Elsie have agreed to make the Loan to [the bankrupt] and Leeanne. E. [The bankrupt] and Leeanne have agreed that [the second defendant] and Elsie may continue to live in the House. F. [The bankrupt] and Leeanne have agreed that Fraser Farms may continue to use the Retained area." 1. The word "Price" is undefined. "Contract" is defined as "the contract between the parties to this Deed for sale of the Land dated the same as this deed". "House" is defined to mean "the principal house on the property". The "Loan" is defined to mean the amount of $666,666.70, to be repaid "on the last to occur of 31 January 2001 or on the expiration of ninety (90) days after written demand by [the second defendant] and Elsie or their survivor". "Property" is defined to mean "the land described in the Contract". 2. "Retained Area" is defined to mean a particular lot which, curiously, is not one of the four lots over which the second defendant has lodged a caveat. As this detail was not the subject of submissions by either party and is not ultimately determinative of the application, I will disregard its potential impact on the second defendant's case. 3. Clause 3 of the Deed is titled "House", and provides as follows: "Following completion of the contract [the second defendant] and Elsie may continue to occupy the house on the following basis: 3.1 Duration The right of occupation shall be for the life of the survivor of [the second defendant] and Elsie or until they abandon the right. 3.2 Access [The second defendant] and Elsie shall have full and free right of access to and from the House along the existing driveway. 3.3 Dwelling The occupation right shall include the garden and surrounds of the House as presently fenced. 3.4 Cost The right of occupancy shall be free of any cost or occupation fee to [the second defendant] and Elsie. 3.5 Repair [The bankrupt] and Leeanne shall paint, repair and maintain the House, fencing and other improvements. 3.6 Care [The second defendant] and Elsie shall take reasonable care in the use of the House but shall not be responsible for repairs due to deterioration by reasonable wear and tear. 3.7 Insurance [The bankrupt] and Leeanne shall keep the House and the other improvements properly insured. 3.8 Interest [The bankrupt] and Leeanne will not create any interest in the Property that may remove, limit or restrict the right of Noel and Elsie to continued occupation of the House without the consent in writing of [the second defendant] and Elsie. 3.9 Transfer [The bankrupt] and Leeanne shall not transfer the Property without causing the Purchaser or acquirer to enter into an agreement with [the second defendant] and Elsie in the terms of this clause and such other terms as may be reasonably required by [the second defendant] and Elsie to implement the intentions of this clause. 3.10 Interest in Property [The bankrupt] and Leeanne acknowledge that the interest of [the second defendant] and Elsie under this clause is an interest in Property which may be protected by a caveat by [the second defendant] and Elsie against the Property and [the bankrupt] and Leeanne will not object to the lodgement and maintenance on the title to the Property of such a caveat. 3.11 Lease If [the second defendant] and Elsie so request [the bankrupt] and Leeanne will enter into a formal lease with the Vendors to implement the provisions of this clause." 1. Two further clauses are as follows: "5 NOEL RIGHT [The second defendant] shall have the right to use the Retained Area for himself or make it available to the Fraser Farms for use for hay making. 6 WHOLE AGREEMENT This document comprises the whole of the arrangements between the parties relating to the subject matters of this Deed." 1. On 27 September 2012, a divorce order was made by the Family Court of Australia, dissolving the marriage of the bankrupt and Leeanne Fraser. There was one child of their marriage, Bradley Fraser. 2. On 12 November 2013, consent orders were made by the Registrar of the Family Court of Australia concerning a property settlement ("the consent orders"). Clause 1, titled "Monetary settlement", was to the effect, in part, that the bankrupt pay Leeanne Fraser the sum of $3,553,435.00 on or before 1 July 2018. Clause 2 obliged Leeanne Fraser to transfer her interest in 12 of the 13 parcels of land comprising the property, as well as one other identified parcel, to the bankrupt within seven days of the date of the consent orders. 3. One of the orders made specific reference to the issue of accommodation of the bankrupt's parents, as follows: "22 Husband's parents' accommodation "That contemporaneously with the signature by the wife of these minutes the husband shall hand to the wife an executed copy of a deed entered into by [the second defendant] and Elsie Mary Fraser the effect of which releases the wife from any past and/or future obligations by her pursuant to the provisions of the Deed of Arrangement." 1. The term "Deed of Arrangement" was defined as follows: "'Deed of Arrangement' means a deed entered into by the husband's parents, [the second defendant] and Elsie Mary Fraser of the one part and the husband and the wife of the other part with respect to the occupation by the husband's parents of a residence erected on a part of the Farm and dated 23 November 2000." 1. By a letter dated 25 November 2013, the lender, Suncorp-Metway Limited, offered the bankrupt two term loan facilities, the first in the sum of $6,500,000 ("first loan facility") and the second in the sum of $2,000,000 ("second loan facility). The offers were accepted by the bankrupt on 9 December 2013. The loan facilities were secured by a mortgage over the property, with the mortgage being executed on 20 December 2013. 2. A clause of the mortgage was in the following terms (with the "Mortgagor" referring to the bankrupt, and the "Bank" referring to the lender): "SECTION C THIS SECTION C APPLIES TO THE EXTENT THAT THIS MORTGAGE IS NOT A MORTGAGE OR GUARANTEE TO WHICH THE CONSUMER CREDIT CODE APPLIES. Part 10 – Warranties by Mortgagor General Warranties 10.1 The Mortgagor warrants to the Bank that: … (e) the Mortgagor has absolute and indefeasible free and unencumbered title to the Mortgaged Property subject only to encumbrances, liens and interests notified on any title for the Mortgaged Land or to which the Bank has consented in writing …" 1. There were amendments and variations made to the loan facilities between the parties in 2014 and 2017, which are the subject of an affidavit sworn on 7 November 2019 by Christopher Turvey, who is an employee of the lender, but it is not suggested that they are of any relevance to this application. 2. The second loan facility expired on 20 December 2018 and the first loan facility expired on 31 December 2018, by which dates the bankrupt had failed to repay all of the principal and other outstanding amounts in respect of each facility. The amounts owed by those respective dates were $5,441,487.83 in respect of the first loan facility, and $497,275.27 in respect of the second loan facility. An order for sequestration of his estate was made on 30 April 2019, noting that the first defendant had consented to act as trustee in bankruptcy of the bankrupt's estate. 3. On 8 May 2019, by a Deed of Appointment of Receivers and Managers, the plaintiffs were appointed by the lender as the joint receivers in bankruptcy of the bankrupt's property. They commenced a sale process of the property that month. 4. On 11 June 2019, the lender served on the bankrupt a notice of the proposed exercise of a power of sale, pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW), requiring him to pay the outstanding balance. He failed to comply with this notice. 5. On 3 October 2019, the plaintiffs filed a statement of claim which named the trustee in bankruptcy of the estate of the bankrupt as the only defendant (being the first defendant in these proceedings). They sought judgment for vacant possession of the property. 6. The first defendant did not file a defence. Upon receipt of the statement of claim served on him, he wrote to the plaintiffs in the following terms: "… I do not intend to oppose nor consent to your application for vacant possession. I am aware that the bankrupt does not reside on the property you are seeking to take possession of. However given that there are other family members, particularly the bankrupt's father [the second defendant] and his son Brad Fraser, who may be affected by your application, I do not consider it appropriate that I consent to a default judgement if they do not register an appearance. I think it is more appropriate that your application be dealt with by the Court and that I submit to the Court's orders." 1. A title search by the plaintiffs established that the second defendant had lodged caveats in respect of four lots of the property, which were expressed as "affecting the part shown hatched in plan with AN103719". The hatched areas were adjoining, comprising a total area of 3,285 square metres. 2. The plaintiffs served both the second defendant and Bradley Fraser with copies of the statement of claim and notices in accordance with r 6.8 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). 3. On 25 October 2019, the second defendant filed a notice of motion seeking an order from this Court to add him as a defendant in the proceedings. That order was made on 5 November 2019. An affidavit in support of the motion, sworn by his solicitor, Richard Murphy, attached a copy of the Deed. 4. In his affidavit dated 7 November 2019, Mr Turvey stated: "To my knowledge, and having perused the Lender's books and records made available by the originating lending officer and those created while with Business Customer Support insofar as they relate to the Bankrupt (including in relation to the second defendant), at no time did the Lender agree that it would be bound by any life estate in any part of the Property in favour of the [second defendant]." 1. On 8 November 2019, the solicitor for the second defendant served a notice to produce on the lender for the inspection of documents. Documents were produced on 26 November 2019. 2. On 4 December 2019, the second defendant filed a defence to the statement of claim, in which he pleaded that he had an unregistered proprietary interest, being a life estate, in parts of four of the lots comprising the property. An affidavit of the same date was sworn by Richard Murphy. Annexed to his affidavit was a table that referred to relevant parts of some of the documents that had been produced by the lender on 26 November 2019 ("the annexed documents"). 3. The second defendant pleaded that the life estate was created by the Deed and that he, the bankrupt and the lender: "… conducted their relations on the basis of an assumed state of facts, namely that [the lender's] interest would be subject to the [second defendant's] unregistered proprietary interest." 1. The second defendant particularised the facts and matters from which, he pleaded, the assumed state of facts was to be inferred, so constituting an estoppel by convention that prevented the lender and the plaintiffs from departing from it: "17(b)(i) As at April 2013, [the lender] knew that [the bankrupt] had purchased the property in June 2000 as part of the [second defendant's], and the [second defendant's] late wife's, transition to retirement; and that the [second defendant] and his late wife remained living on the property. (ii) From June 2013, [the lender] knew that [the bankrupt] and his then wife Leanne Fraser were in the process of making a settlement agreement. (iii) On 18 September 2013, by a letter to [the bankrupt's] broker, [the lender] informed [the bankrupt's] that there were two issues in respect of proposed consent orders in respect of his proceedings in the Family Court with Leanne Fraser, and suggested changes to orders 1, 20 and 23. (iv) By no later than 18 September 2013, [the lender] had seen a copy of the proposed consent orders. (v) On 1 October 2013, by a letter to [the bankrupt], [the lender] imposed, as a condition precedent, that the proposed consent orders must be acceptable to the bank. (vi) [The lender's] officers met [the bankrupt] on 9 October 2013, 25 October 2013, and 3 November 2013, including in order to work through the condition precedent concerning whether the proposed consent orders must be acceptable to the bank. (vii) At a meeting between [the bankrupt] and Julie Rippar and Robert Shields (of [the lender]), [the bankrupt] drove past the property that [the second defendant] and his late wife were occupying, and said words to the effect 'That is Mum and Dad's house. They have the right to live there for life. Dad helps me on the farm.' (viii) Prior to 12 November 2013, [the lender] negotiated with [the bankrupt] in respect of the consent orders to be made in the Family Court of Australia. (ix) On 12 November 2013, consent orders made in the Family Court of Australia referred to the Deed of Arrangement (as referred to in paragraph 17(a) above), stating it was 'with respect to the occupation by the husband's parents of a residence erected on part of the Farm' (as per clause A24); and required [the bankrupt] to deliver a Deed to Leanne Fraser which would release her from past and/or future obligations pursuant to the provisions of the Deed of Arrangement. (x) By (at latest) around 12 November 2013, [the lender] knew of the existence of the Deed of Arrangement. (xi) On 25 November 2013, by a letter of offer of finance to [the bankrupt], [the lender] made (as a condition precedent) that the proposed consent orders must be acceptable to the bank; and (as a condition subsequent) stated 'we acknowledge the Consent Orders'. (xii) On 18 December 2013, Robert Shield (of [the lender]) met with [the bankrupt] in order to sign the mortgage." 1. Accordingly, so pleaded the second defendant, his life estate is not defeated by ss 42 and 43 of the Real Property Act 1900 (NSW). 2. I note that all but paras 17(b)(vii) and (x) derive from entries that appear in the annexed documents. The conversation in para 17(b)(vii) is a reference to an incident described by Richard Murphy in the affidavit filed by him on 4 December 2019, in which he stated: "… I am informed by [the bankrupt] … that: a. he recalls 3 meetings with employees of [the lender], namely Julie Rippar and Robert Shields; b. in each case that they met on the farm; c. on one occasion he gave them a tour of the farm and when driving past the property that his parents were occupying said to them words to the effect that, 'That is Mum and Dad's house. They have the right to live there for life. Dad helps me on the farm.'" 1. Paragraph 17(b)(x) reflects the content of the letter of offer of the loan facilities, dated 25 November 2013, which stated: "The proposed consent orders must be acceptable to the bank. In the event the orders are not satisfactory the bank, the offer may be withdrawn at the bank's discretion." The issue in dispute 1. As noted, the second defendant's claim of a life interest is to parts of four of the 13 lots of the property. The plaintiffs' claim to possession over the balance of the property was not opposed. Consistent with that concession, two days after the hearing of this application, on 19 December 2019, consent orders were made in the following terms: "1 Judgment for the Plaintiffs for possession of the land described in Schedule 1: a. other than the land identified by hatching on 'Annexure A' in Schedule 2; and b. subject to the Second Defendant having a right of carriageway over the land identified by hatching on 'Annexure B' in Schedule 2. subject, in the case of each of a. and b. above, to further order of the Court." 1. Schedule 1 is a table that lists each of the 13 lots comprising the property. Schedule 2 comprises two diagrams prepared by a surveyor; Annexure A shows hatched areas of the four lots that the second defendant lodged caveats on, and Annexure B shows a right of way. The remaining issue in dispute concerns those hatched areas on the four lots appearing in Annexure A of Schedule 2 of the orders made on 19 December 2019. Those areas constitute the property affected by the second defendant's claim to a life estate. The relevant principles applicable to an application for summary judgment 1. The parties broadly agreed on the relevant principles to be applied to an application for summary judgment in their written submissions, with both parties citing Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; [1983] HCA 25, where the Court said at 93: "The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried." 1. In Charub Pty Ltd v Triandafyllou [2019] NSWSC 487 at [13], Davies J said: "The principles in respect of summary judgment are well established and are well known. In terms of what has been said in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129, Spencer v The Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 at [20]-[25] it would have to be shown that the defences were so obviously untenable that they could not possibly succeed, that they were manifestly groundless or that their prospects of success were only fanciful. It is further accepted that the power to enter summary judgment should be exercised with great care and an order should only be made where it is clear that there is no real question to be tried." 1. The second defendant submitted that regard must be had to any underlying defence, in addition to the pleaded defence, citing Macfarlan JA (Beazley P agreeing) in O'Brien v Bank of Western Australia Ltd (2013) 16 BPR 31705; [2013] NSWCA 71 at [3], as follows: "The High Court decision in Spencer v The Commonwealth [2010] HCA 28; 241 CLR 118 was concerned with s 31A(2) of the Federal Court Act 1976 (Cth) but the following principles stated in it are of general application: (a) On a summary judgment application, the real issue is whether there is an underlying cause of action or defence, not simply whether one is pleaded (at [23]). (b) The critical question can be expressed as whether there is more than a 'fanciful' prospect of success (at [25]) per French CJ and Gummow J) or whether the outcome is so certain that it would be an abuse of the process of the Court to allow the action to go forward (at [54] in the judgment of the plurality). Demonstration of the outcome of the litigation is required, not an assessment of the prospect of its success (ibid). (c) Powers to summarily terminate proceedings must be exercised with exceptional caution (ibid at [55]; see also French CJ and Gummow J at [24])." 1. The plaintiffs submitted that the second defendant has outlined his case in detail, incorporating hearsay evidence with the bankrupt that the plaintiffs have not objected to, and the fruits of the notice to produce of potentially relevant documents by the lender on 26 November 2019, so that there can be no doubt that the defence is identifiable, and none of it could be characterised as "underlying". The parties' submissions 1. The focus of the hearing was on the second defendant's claim that, having regard to the above-cited authorities, the lender's legal title was taken subject to the second defendant's life interest. The cause of action that is advanced by the second defendant to do so is an estoppel by convention that constitutes an in personam exception to the indefeasibility of the lender's registered title. 2. The parties were agreed that the applicable principles to an in personam exception to the indefeasibility of title afforded by ss 42 and 43 of the Real Property Act were conveniently stated in Smilevska v Smilevska (No 2) [2016] NSWSC 397 by Slattery J, at [131], as follows: "The principles applicable to the Breskvar v Wall (1971) 126 CLR 376 at 385 'personal equities' exception to indefeasibility may be shortly stated. A personal equity may arise out of the conduct of the registered proprietor personally or persons for whom the registered proprietor is responsible: Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 at 563 and Bahr v Nicolay (No. 2) (1988) 164 CLR 604. To acquire title with the mere notice of an unregistered interest is not enough to raise a personal equity, for that would be inconsistent with the protection against notice afforded by Real Property Act, s 43: Ryan v Brain [1994] 1 Qd R 681. But a personal equity may be raised where additional factors exist that indicate that the person taking title under the Torrens system agrees to be bound by the unregistered interest: Snowlong Pty Ltd v Choe (1991) 23 NSWLR 198. A plaintiff cannot assert a personal equity unless a known legal or equitable cause of action is enforceable against the registered proprietor: Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222 and [Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22] at [193]." 1. The plaintiffs submitted that the elements of estoppel by convention are well-established and were summarised by Brereton J (as his Honour then was) in Moratic Pty Ltd v Lawrence James Gordon & anor (2007) 13 BPR 24713; [2007] NSWSC 5 at [32], as follows: "… In common law conventional estoppel, it is necessary for a plaintiff to establish (1) that it has adopted an assumption as to the terms of its legal relationship with the defendant; (2) that the defendant has adopted the same assumption; (3) that both parties have conducted their relationship on the basis of that mutual assumption; (4) that each party knew or intended that the other act on that basis; and (5) that departure from the assumption will occasion detriment to the plaintiff." 1. The second defendant was content to present its case that an estoppel by convention was established by the evidence, by reference to those five elements identified in Moratic v Gordon. The parties accepted that, in the context of this case, the second defendant is in the position of the plaintiff and the lender is in the position of the defendant in respect of the passage above. Thus, in relation to the first element, the second defendant would be obliged to establish that it had adopted an assumption as to the terms of its legal relationship with the lender. 2. The plaintiffs' first point was that the interest created by the Deed was not a proprietary interest, but rather a personal right to occupation. That aside, the plaintiffs submitted that there was no evidence of any relationship at all between those two parties, there having been no transactions or other dealings, legal or otherwise, between them, and the second defendant's claim would therefore fail at the first hurdle. The following three elements also depended on there being such a relationship, which did not exist. 3. The second defendant conceded that there was no such direct relationship, but submitted that its absence was not fatal to establishing estoppel by convention in the particular circumstances of this case, which established a "three party arrangement" instead, involving the lender, the bankrupt and the second defendant. The second defendant submitted that an alternative approach to this element was "arguable", such that summary judgment should not be granted. He identified certain factors that in combination would satisfy this element. Firstly, at the time that the loan facilities were agreed, the lender was aware that the second defendant was living on the property. This followed from one of the annexed documents, apparently authored by Ms Rippar for the lender, that is undated, but titled "April 2013 Agribusiness Discussion Paper template". It stated: "[The bankrupt] purchased his parents dairy in June 2000 as part of his parents transition to retirement. His parents remain living on the property as the property has several homes." 1. Secondly, the lender was aware of the existence of the Deed, since it was aware of the consent orders, as is apparent from its letter referred to at [32], above. The lender making the funds available to the second defendant under the loan facilities confirmed that the lender was satisfied with the consent orders. This was supported by internal documents produced by the lender in which officers of the bank discussed some of the terms of the consent orders concerning the bankrupt's proposed financial obligations and referred to discussions on that topic with the bankrupt. 2. Thirdly, the second defendant submitted that cl 22 of the consent orders and the definition of the term "deed of arrangement", as recited at paragraphs [12] and [13] above, informed the lender that the deed concerned the occupation by the bankrupt's parents of a residence on the property, the date on which it was executed, the parties to it and Leeanne Fraser's obligations until the delivery of the further deed referred to in cl 22. 3. Fourthly, the second defendant also relied upon the hearsay conversation in the affidavit of Richard Murphy, recounted at [31] above, to the effect that the bankrupt had pointed out the house on the property that was occupied by his parents to the lender, the date of that conversation not being identified. 4. The second defendant also submitted that it was appropriate to allow for the prospect that, in due course, discovery may reveal that officers of the lender had knowledge of the second defendant's life interest. 5. The second defendant submitted that these factors satisfy the first four elements of estoppel by convention identified in Moratic v Gordon, although counsel for the second defendant conceded that the terms of the consent orders did not reveal that the Deed created a life interest for the second defendant, and that a difficulty in his case was cl 10.1(e) of the mortgage, reproduced at [15] above, that suggested a different understanding by the lender at the time the mortgage was executed. Consideration 1. The basis submitted by the second defendant for his interest to have been carved out of the lender's legal title, and thus the basis for successfully defending the plaintiffs' claim for possession of the land that is in dispute, is an in personam claim by way of estoppel by convention. The first four elements identified in Moratic v Gordon at [32] hinge upon there being a "relationship", in the context of this case, between the lender and the second defendant. The second defendant concedes that there was not a direct relationship between them, but submits that if the matter proceeds to hearing, the Court will be required to consider whether the common thread of those four elements can be satisfied by what the defendant describes as "a three party arrangement". 2. In order for any relationship or alternative "arrangement'` to be established, it would be necessary for the defendant to establish awareness on the part of the lender of the existence of a life estate in favour of him over the relevant parts of the property, and an agreement by the lender to be bound by the unregistered interest: Smilevska at [131]. 3. As to whether the lender was aware of the life interest, I accept the second defendant's submission to the effect that the consent orders informed the lender that there existed a deed concerning the bankrupt's parents residing on the property, but it is not suggested that the lender either sought, or was provided with, a copy of the Deed. The documents relied upon by the second defendant that have been produced by the lender indicate that the exclusive focus of the lender was on the bankrupt's financial obligations that were apparent from the draft consent orders, and give no indication of an awareness of a life estate. 4. There is no direct evidence as to when the bankrupt's alleged statement to the lender's officers, to the effect that his parents had the "right to live there for life", occurred. There is an available inference that it may have been at the time of the negotiations between the bankrupt and his former wife concerning the terms of the consent orders, since some of the annexed documents refer to Mr Shields (of the lender) visiting the bankrupt to discuss the consent orders on 9 and 25 October and 5 November 2013. However, it is not suggested that he informed the lender's officers that the alleged right of the bankrupt's parents was the subject of a deed. 5. Assuming that the lender was aware of the life interest, there is, in my opinion, no direct evidence or available inferences to the effect that the lender agreed to be bound by it, which is critical to the second, third and fourth elements of estoppel by convention identified in Moratic v Gordon. The second defendant submitted that these three elements were "question[s] of fact" to be established if and when the lender's officers in due course gave evidence at the hearing on the statement of claim. However, evidence that is relevant to those three elements would not be solely in the possession of the lender; assuming the three-party relationship did exist, the other two parties would also be expected to have knowledge of the relationship and the mutual assumptions upon which it is built. The other two parties identified in this instance are the second defendant and the bankrupt. It is apparent that the second defendant has access to whatever evidence the bankrupt is in a position to give that may assist him in resisting this application, and there is no evidence from the bankrupt, either directly or in hearsay form, or from the second defendant, that supports the fulfilment of those three latter elements to the cause in action identified in Moratic v Gordon. 6. For this reason, I am satisfied that the second defendant's defence to the statement of claim is obviously untenable and accordingly I find for the plaintiff. Orders 1. I make the following orders: 1. Judgment for the plaintiffs for possession of the land identified by the hatching on Annexure "A" of the Schedule. 2. The second defendant to pay the costs of the plaintiffs. ********** Schedule (224335, pdf) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 July 2020