Sewell v Skarratt & Anor [2005] NSWSC 626

New South Wales Supreme Court

CITATION : Sewell v Skarratt & Anor [2005] NSWSC 626

HEARING DATE(S) : 20 and 21 June 2005

JUDGMENT DATE : 21 June 2005

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

DECISION : Judgment for Defendants on Statement of Claim.

CATCHWORDS : PROPRIETARY ESTOPPEL - Whether representations that plaintiff would be transferred house in father's name proved - FAMILY PROVISION - whether plaintiff demonstrated father's will left him without adequate provision - no question of principle.

Family Provision Act 1982 (NSW) - s.7 LEGISLATION CITED : Real Property Act 1900 (NSW)

Assets Co Ltd v Mere Roihi [1905] AC 176 CASES CITED : Bahr v Nicolay (No 2) (1988) 164 CLR 604

Peter Thomas Sewell - Plaintiff PARTIES : Judith Ann Skarratt - First Defendant Leslie John Sewell by his tutor the Office of the Protective Commissioner of New South Wales - Second Defendant

FILE NUMBER(S) : SC 2435/03

M.S. Willmott SC - Plaintiff COUNSEL : M.W. Young - First Defendant J.R. Wilson SC - Second Defendant

Owen Hodge - Plaintiff SOLICITORS : Jemmeson & Fisher - First Defendant E.H. Tebbutt & Sons - Second Defendant

LOWER COURT JURISDICTION :

Ex tempore

Introduction

1 The Plaintiff, Mr Peter Sewell, and the Defendants, Mrs Judith Skarratt and Mr Leslie Sewell, are the children of the late Thomas Bamford Sewell, who died on 23 January 2001 leaving a will dated 21 March 2000. Probate of the will was granted to the First Defendant on 31 May 2002. For the sake of convenience and without intending any disrespect I will refer to the members of the family by their first names. 2 As at the date of the deceased's death he and Leslie were the registered proprietors as tenants in common in equal shares of a residential property in Sylvester Street, Roselands ("the Property"). Peter alleges that in 1982 he and the deceased entered into an agreement in the following terms: the deceased would advance to Peter the purchase price of the Property, $55,000, less a $200 deposit which Peter paid; the Property would be purchased in the deceased's name; Peter would live in the Property and would repay the loan at the rate of $130 per week, and would be responsible for maintaining the Property and paying rates and taxes and other outgoings; when the loan was repaid in full the deceased would convey title to Peter. 3 Peter says that he repaid the loan, initially at the rate of $130 per week and then, from the end of 1989 onwards, at the rate of $150 a week, or $600 a month. Peter says that in September 2001, some four months before the deceased died, the deceased told him that he should cease making repayments of the loan and that the house was now his. 4 Peter says that after his father died he learned that on 15 July 1986 his father had conveyed a half interest in the Property as tenant in common to Leslie and that in his will the deceased had left his own half share in the Property in trust to permit Leslie to reside there for the rest of his life and, after his death, to Peter and Judith equally. It should be explained that Leslie had suffered severe brain damage in a motor vehicle accident in July 1979. Since August 1985 his affairs have been under the control of the Protective Commissioner. 5 The deceased transferred a half share in the Property to Leslie as a condition of the Protective Commissioner agreeing to pay to the deceased out of Leslie's estate the sum of $40,000, to be applied to the cost of construction on the Property of accommodation for Leslie. I will return to this transaction in more detail shortly. 6 As I have said, Peter says that he did not learn of the state of the title to the Property or of the terms of his father's will until after his father's death in January 2002. On 17 April 2003 Peter commenced these proceedings, claiming a declaration that the whole of the Property is held in trust for him absolutely and an order for transfer of the title to him accordingly. Alternatively, he sought an order charging upon the Property all moneys which he had expended in repayment to the deceased and in improvements to and maintenance of the Property. In the alternative, he sought further provision out of the deceased's estate for his maintenance and advancement in life pursuant to s.7 of the Family Provision Act 1982 (NSW) ( "FPA") . 7 At the trial Mr Willmott SC appeared for Peter, Mr Marcus Young for Judith, and Mr John Wilson SC for Leslie, instructed by the Protective Commissioner. At the commencement of his opening, Mr Willmott conceded that he would have great difficulty in defeating the interest of Leslie in the Property, since that interest was registered under the provisions of the Real Property Act 1900 (NSW), and by virtue of s.42 of the Act Leslie's title is indefeasible in the absence of fraud. No fraud on the part of Leslie or of the Protective Commissioner has been suggested. 8 That position had not changed at the close of evidence. There is no suggestion that either Leslie or the Commissioner had notice of an interest of Peter in the Property at the time that Leslie acquired his registered interest. It follows that Leslie's registered interest in the Property must prevail over whatever interest Peter may have in the Property: see, for example, Assets Co Ltd v Mere Roihi [1905] AC 176; Bahr v Nicolay (No 2) (1988) 164 CLR 604. 9 Peter's claim against Leslie must therefore be dismissed. Mr Willmott properly concedes that this result is inevitable. 10 Peter's case now is that the promises made to him by the deceased and Peter's detrimental reliance on those promises have given rise to a proprietary estoppel, so that the deceased's estate is estopped from denying the interest which Peter was to have in the Property, to the extent that it remains within the capacity of the estate to transfer that interest to Peter. In other words, the proprietary estoppel is said to attach to the remaining one-half share interest in the Property which the deceased owned at his death. 11 Alternatively, Mr Willmott says that the deceased created an expectation in Peter that he would have title to the whole of the Property and would be able to live there for the rest of his life. Peter has expended considerable money and effort in the acquisition and improvement of the Property since 1982, so Mr Willmott says, and he now does not have the financial means to acquire another suitable Property. Mr Willmott says that it is proper to have regard to those circumstances in determining whether the deceased's will has failed to make adequate provision for Peter's maintenance for the purposes of an application under the Family Provision Act . 12 Judith defends the claims against the estate on the following grounds: – first, there was no agreement between the deceased and Peter as alleged. Peter occupied the Property and paid money to the deceased weekly or monthly as a tenant, in consideration of rent and not by way of repayment of a loan for the purchase of the Property as Peter understood at all times; – second, if representations were made by the deceased to Peter as alleged, Peter has suffered no detriment in relying upon such representations so that no proprietary estoppel can arise; – third, if any proprietary estoppel could have arisen, nevertheless Peter has been guilty of laches in bringing his claim so late so that relief should be refused; – fourth, as to Peter's claim under the Family Provision Act , Judith says that, having regard to the provision which the deceased has in fact made for Peter in his will, to the benefits conferred on Peter during the deceased's lifetime and to Peter's own means and circumstances, no further provision out of the estate can be justified. 13 I turn now to consider the factual issue whether the alleged agreement between Peter and the deceased has been proved.