Supreme Court New South Wales Medium Neutral Citation: In the matter of the Estate of the late George Darcy Inwood and the Family Provision Act; Bruce Patrick Inwood & Anor v Mary Ellen Ewin & Anor [2011] NSWSC 1489 Hearing dates: 29 - 30 August 2011 and 18 November 2011 Decision date: 06 December 2011 Jurisdiction: Equity Division Before: Black J Decision: Alleged representations in respect of "front block" and "back block" not established - representations in relation to "house block" established giving rise to estoppel or equitable lien - inadequacy of provision out of deceased's will not established. Catchwords: ESTOPPEL - Equitable estoppel - Principles upon which relief is to be granted. SUCCESSION - Family provision and maintenance - Principles upon which relief is to be granted under s 9 of Family Provision Act 1982 (NSW) Legislation Cited: - Civil Procedure Act 2005 (NSW) s 90(1) - Family Law Act 1975 (Cth) - Family Provision Act 1982 (NSW) s 6, 7, 9, 9(2), 9(3) - Succession Act 2006 (NSW) - Uniform Civil Procedure Rules 2005 (NSW) r 36.1 Cases Cited: - Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582 - Bosch v Perpetual Trustee Co Ltd [1938] AC 463 - Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 - Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 - Delaforce v Simpson-Cook [2010] NSWCA 84 - Edgar v Public Trustee for the Northern Territory & Anor [2011] NTSC 5 - Estate of Zvonko Grbin [2006] NSWSC 41 - Farrell v Mulroney [1978] 1 NSWLR 221 - Gillard v Baker (26 May 1994, Young J, Supreme Court of NSW, unreported) - Giumelli v Giumelli (1999) 196 CLR 101 - Gorton v Parks (1989) 17 NSWLR 1 - Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 - Joseph Saliba & Anor v Thomas Tarmo [2009] NSWSC 581 - Re Hodgson (1886) 31 Ch D 177 - NSW Trustee and Guardian v Schneider [2011] NSWSC 424 - Olsson v Dyson (1969) 120 CLR 365 - Palagiano v Mankarios [2011] NSWSC 61 - Silovi Pty Ltd v Barbaro Pty Ltd (1988) 13 NSWLR 466 - Singer v Berghouse (1994) 181 CLR 201 - Sledmore v Dalby (1996) 72 P & Cr 196 - Varma v Varma [2010] NSWSC 786 - Vukic v Luca Grbin & Ors; Estate of Zvonko Grbin [2006] NSWSC 41 - Vigolo v Bostin (2005) 221 CLR 191 - Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 - Watson v Foxman (1995) 49 NSWLR 315 - Weeks v Hrubala [2008] NSWSC 162 Category: Principal judgment Parties: Bruce Patrick Inwood (First Plaintiff) Sharon Elizabeth Inwood (Second Plaintiff) Mary Ellen Ewin (First Defendant) Kathryn Lynette Pearce (Second Defendant) Representation: Counsel: A.L. Hill (Plaintiffs) A.C. Harding (Defendants) Solicitors: Bird Legal (Plaintiffs) Boyd & Longhurst (Defendants) File Number(s): 10/146466 Judgment 1The deceased died on 30 December 2008. He had three children, the First Plaintiff ("Mr Inwood"), the First Defendant ("Ms Ewin") and the Second Defendant ("Ms Pearce"). By his will dated 25 March 2004, the deceased left the whole of the estate to his three children in equal shares as tenants in common. 2The main asset in that estate is a farming property at Essington, near Oberon, called "Darelyn" ("the property"), which comprises two blocks of land referred to as the "front block" and the "back block". Mr Inwood has worked on the property since 1979 or 1980 and he and his wife have lived on the property since 1988 in a house built on a portion of the front block ("house block"). The claims for relief in respect of the front block and the back block 3By Summons filed on 11 June 2010, Mr Inwood sought, inter alia, an order that the estate of the deceased convey the front block to him. By a Statement of Claim dated 15 February 2011, Mr Inwood and his wife (together, "the Plaintiffs") sought wider relief, including a declaration that they are beneficially entitled to the whole of the property and an order that the Defendants transfer the property to them; in the alternative, a declaration that they are beneficially entitled to the front block and an order that the Defendants transfer the front block to them; and a declaration that the Plaintiffs are entitled to occupy and use all the land in the back block until Mr Inwood retires from the occupation of farming. 4The Statement of Claim relevantly pleads that: "5. During the early 1990s, the deceased represented to the Plaintiffs that if the Plaintiffs continued to work at the property and devote themselves to the maintenance and improvement thereof, he (the deceased) would structure his affairs (including the making of a Will) such that upon the death of the deceased (and, implicitly, his spouse) the front block would pass to the Plaintiffs absolutely, and [Mr Inwood] would be allowed to occupy and use the back block until [Mr Inwood's] retirement from farming." The Statement of Claim in turn pleads that the Plaintiffs relied on the alleged representation their detriment. Particulars of that detriment are provided, namely that Mr Inwood did not pursue any other employment, devoted more than a reasonable amount of time to the property thereby prejudicing his personal, private and domestic life and did not receive a fair and proper remuneration for his work. The Statement of Claim pleads that it is inequitable for the deceased, by his will, and the Defendants as his executors, not to be bound by the alleged representation. 5Mr Inwood's claims are put by reference to equitable estoppel. In Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428, Brennan J observed that to establish an equitable estoppel the first thing it was necessary for the plaintiff to prove was that (at 428): "... the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship." In Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582 at 610, the elements of an equitable estoppel were formulated by Priestley JA, (with whom Kirby P agreed), as requiring: "the creation or encouragement by the defendant in the plaintiff of an assumption that a contract will come into existence or a promise be performed or an interest granted to the plaintiff by the defendant, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable." In Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394, Deane J observed (at 444) that the law does not permit an unconscientious departure by one party: "from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation." 6In order to establish an estoppel the Plaintiffs must establish that the deceased had played such a part in the adoption by Mr Inwood or the Plaintiffs of an assumption, which formed the basis of his or their action or inaction, where he or they will suffer substantial detriment if the assumption be not adhered to, that it would be unconscientious for the deceased or his estate to deny the assumption. In Giumelli v Giumelli (1999) 196 CLR 101 at 121, the majority in the High Court noted that equity's intervention is justified by a plaintiff's conduct in acting upon an expectation created by an unperformed promise. In Delaforce v Simpson-Cook [2010] NSWCA 84, Handley AJA observed (at [21]) that an estoppel by encouragement: "... comes into existence when an owner of property has encouraged another to alter his or her position in the expectation of obtaining a proprietary interest and that other, in reliance on the expectation created or encouraged by the property owner, has changed is or her position to their detriment. If these matters are established equity may compel the owner to give effect to that expectation in whole or in part." 7It appears that the High Court's decision in Giumelli v Giumelli [1999] HCA 10; 196 CLR 101 at [40]-[48] has qualified or removed the principle that the relief to be granted in equitable estoppel cases is a vindication only of the "minimum equity". In Delaforce v Simpson-Cook [2010] NSWCA 84 at [3], Allsop P observed that, in determining the scope of relief that is required: "Equity will look at the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character." 8In order to succeed in their estoppel claims, the Plaintiffs must first establish the alleged representations were made. There are particular difficulties where such a claim is based on assurances alleged to have been made by a deceased person, which were helpfully summarised by Ward J in Varma v Varma [2010] NSWSC 786 at [418]-[425]. A plaintiff bears a comparatively difficult task in seeking to persuade the Court on the balance of probabilities of the making of the alleged representations where the deceased is not alive to give his version of events. Careful scrutiny is required and the Court will generally require corroboration of the claims: Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 at 253; Weeks v Hrubala [2008] NSWSC 162 at [20]; Vukic v Luca Grbin & Ors ; Estate of Zvonko Grbin [2006] NSWSC 41; Re Hodgson (1886) 31 Ch D 177; Varma v Varma above at [418]; Joseph Saliba & Anor v Thomas Tarmo [2009] NSWSC 581. 9It is also important to have regard to the fallibility of human memory, which increases with the passage of time, particularly where disputes or litigation intervene. As McLelland CJ in Eq noted in Watson v Foxman (1995) NSWLR 315 at 318-319, each element of the plaintiff's cause of action: "must be proved to the reasonable satisfaction of the court, which means that the court 'must feel an actual persuasion of its occurrence or existence'. Such satisfaction is 'not ... attained or established independently of the nature and consequence of the fact or facts to be proved' including the 'seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding': Helton v Allen (1940) 63 CLR 691 at 712. Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action ... In the absence of some reliable contemporaneous record or other satisfactory corroboration." Those observations were subsequently applied in Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41] and Varma v Varma at [424]-[425]. 10I now turn to Mr Inwood's evidence in respect of the alleged representations. Mr Inwood's evidence is that, in 1979 or 1980, he entered into partnership with the deceased to farm the property and that arrangement continued until 1998 (Inwood, 8.6.2010 [10]). 11Mr Inwood gives evidence concerning a conversation at some time after 1985 (Inwood 3.12.2010 [20]), to the effect that: Mr Inwood: "I'll have to get the land into our name so we can build the house". Deceased: "That's okay, we'll give you the block to build on but you'll have to pay everything to get it done." Mr Inwood: "That's all right". 12In March 1987, the deceased and his wife each made wills leaving the property to the other with a gift over to Mr Inwood conditional on legacies. 13Mr Inwood gives evidence of a further representation made by the deceased in about 1987 (Inwood 8.6.2010 [12(a)]) to the effect that: "I'll transfer a house block to you to build on. Just a modest house. You will have to pay the costs of the transfer, the subdivision, the council and the electricity will need to be improved." Mr Inwood's evidence is that the deceased also said words to the effect that "It will be all right because it will all be yours one day." 14Mr Inwood also gives evidence of a further conversation which is not dated, but from its sequence in his second affidavit appears to have occurred between April 1998 and 1990 (Inwood 3.12.2010 [30]) to the effect that: "Don't worry, when we go you and [Mrs Inwood] will get the front block and you'll be sharing the back block equally with your sisters, but you will be able to use the back block until you retire." The representation alleged in that conversation is narrower than the representations alleged to have been made as to Mr Inwood's entitlement to the property as a whole on the death of the deceased. 15Mr Inwood also gives evidence (Inwood 3.12.2010 [35]) of a further conversation with the deceased in the early 1990s, after Mr Inwood indicated that he would have to get a job off the farm so he could get a permanent income and he had been in contact with the Forestry Commission, in which the deceased said words to the effect that: "Look, it'll be worth it to you in the long run to hang in there. You and your wife will get the front block and you'll be able to share the back block with your sisters, but you'll be able to use it until you retire. Just hang in, it'll all work out in the end." This conversation again involves a narrower representation than the representations alleged to have been made as to Mr Inwood's entitlement to the property as a whole on the death of the deceased. 16Mr Inwood gives evidence (Inwood 3.12.2010 [39]) of a further conversation with the deceased in 1996, when he raised his and his wife's wish to have the subdivision finished and the land transferred and the deceased responded: "Don't worry about it just yet as you'll get the whole front block. It'll be yours and Sharon's one day." 17Mr Inwood's evidence is that agreement was reached between the Plaintiffs and the deceased in 1998 that the Plaintiffs would rent the property and pay the deceased $1,000 per month for rent (Inwood 3.12.2010 [42]). Mr Inwood gives evidence of a representation when he took over the farming operations on the property in 1998 to the effect that " Bruce, you should stick with the farming. It will all go to you in the end " (Inwood 8.6.2010 [10]; to similar effect Inwood 3.12.2010 [45]). Mr Inwood affirmed in cross-examination the evidence in his first affidavit that, at the time of the arrangements in 1998, his father had represented to him that " it will all go to you in the end " (T39.7, T39.10). 18Mr Inwood affirmed in cross-examination that his father made a similar representation to him at the time he began to receive a pension from the Department of Veteran Affairs in about 2002 (T39.44) and that his wife was present when that representation was made (T40.1). Mrs Inwood's evidence was that she could not remember whether she was present on any occasion when the deceased made any such representation to Mr Inwood (T83.9). The difficulties with the Plaintiffs' claims in respect of the front block and the back block 19Numerous difficulties as to the terms of the representations alleged by the Plaintiffs in respect of the front and back blocks and as to reliance on them have emerged during the hearing. Mr Inwood abandoned the widest of the Plaintiffs' representational cases (to the effect that the deceased had represented that he would receive the whole of the property) in the course of cross-examination, conceding that he never expected to get the whole property from the deceased at the expense of his sisters (T62). 20The Plaintiffs' alternative case that representations were made distinguishing the position of the front block and the back block faces the difficulties that it is inconsistent with the case that representations had been made as to the whole of the property; was not advanced when the proceedings were commenced or in Mr Inwood's first affidavit; and has also been undermined by Mr Inwood's cross-examination. Mr Inwood's first affidavit drew no distinction between the treatment of the front block on the one hand and the back block on the other and made no suggestion of any representation that he would have the front block absolutely and a right to farm the back block during his lifetime. Mr Inwood could also give no explanation of why there is a reference to a separate position in respect of the front block in his second affidavit but not his first (T44.41). 21Mr Inwood gave affidavit evidence that his father "continuously" assured him that his wife and he would get the front block and would share the back block equally with his sisters but he would be able to use it until he retired (Inwood 19.10.2010 [22(a)]) but gave oral evidence that such an assurance was only extracted after some reluctance on his father's part to deal with the issue and was not said regularly or continuously (T48) and acknowledged that the evidence in his affidavit concerning that matter was false (T49.3). Mr Inwood also conceded that the accounts in his first and third affidavits of statements made by his father in 1987 before he commenced construction and in 2003 after his father received a Department of Veteran Affairs pension were different and could not both be correct (T46). 22Mr Inwood initially maintained in cross-examination that he had an expectation up to the time of the deceased's death that the deceased would leave the front block to him and would leave a life interest in the back block to him and that Mrs Inwood was present when the relevant representations were made (T55). However, Mr Inwood conceded in cross-examination that he never understood that he would be entitled to use and occupy the back block until he chose to retire from farming without payment of any rent or benefit to his sisters (T62.45) and that concession is inconsistent with the alleged representations. He was unable to explain why, in that situation, the proceedings claimed a life interest in the back block without any reference to any such payment to his sisters (T62.49). 23Mr Inwood also acknowledged in cross-examination that he had already built his house on the front block prior to the alleged representations that interest in the back block would be left to him and he had not relied on any such representation in building the house (T63.38). 24The Plaintiffs' case is also weakened by the fact that Mr Inwood could not exclude knowledge of the deceased's 1990 will, which is inconsistent with reliance on the alleged representations. Mr Inwood's evidence in his first affidavit was that he was not aware of the 1990 will (which bequeathed the residue of the deceased's estate on trust for the three children) at all and was only aware of the contents of the 2004 will after his father had died (Inwood 1.6.2011 [39]). On cross-examination, Mr Inwood initially said that he was not aware, until after the deceased's death, of his 1990 will (T52.13) or of the deceased's further will made in 2004 (T52.35). However, Mr Inwood then conceded in cross-examination that he was not sure whether he was aware of the 1990 will prior to the deceased's death (T53.29). However, Mr Inwood's knowledge of the 1990 will would have meant that he was also aware that his father did not propose to act in accordance with the alleged representations. 25Given the terms of the deceased's 1990 and 2004 wills, it would not be possible to find that the alleged representations were made without also finding that the deceased had misled Mr Inwood as to his intentions. However, that finding would be inconsistent with Mr Inwood's acceptance on cross-examination that the deceased was honest and straightforward and would do something if he had said he would do it and not say one thing and do another (T37). Mr Inwood's acceptance that the deceased was not a person who would say one thing and do another suggests that he would not have made the 1990 will leaving the property to the children generally if he had represented the contrary to Bruce in the period prior to making that will. Mr Inwood accepted that it would have been "highly out of character" for the deceased to have made representations as to his intentions concerning the front and back blocks which were substantially inconsistent with the contents of his 1990 Will, soon after that Will had been made (T52). Both Mrs Ewin and Ms Pearce also gave evidence that the deceased had told them of his intention to divide his property equally between his children. 26The Plaintiffs' case is also weakened by the position which they adopted in communications with the Office of the Protective Commissioner in 2008 which is inconsistent with reliance on the alleged representations. Mr Inwood conceded that he would have discussed the contents of letters sent by his wife to the Office of the Protective Commissioner before they were sent (T19.40) and would have ensured that there was nothing stated in such a letter that was not true (T19.49). 27In a letter dated 24 June 2008 written by Mrs Inwood to the Protective Commissioner, the Plaintiffs proposed that management of the property continue in its then structure for reasons including that the property would be maintained by the Plaintiffs to the time of the deceased's death when it would be offered for sale and profits divided between the deceased's three children. That letter contains no reference to any representation made by the deceased to Mr Inwood that he would receive all or part of the property under the will and is inconsistent with the representations for which the Plaintiffs now contend. Mr Inwood acknowledged in cross-examination that the position adopted in this letter was inconsistent with his claim to have expected, up to the time of the deceased's death, that he would receive the front block under the will and a life interest in the back block and acknowledged that he was unable to explain that discrepancy (T57.5, 57.8). Mr Inwood also conceded in cross-examination that neither he nor his wife ever suggested to the Protective Commissioner that the alleged representations had been made (T57.13, 57.19). 28In a conversation on 28 July 2008 between Mrs Inwood and the Office of Protective Commissioner, she indicated that Mr Inwood and she were interested in purchasing the property at market value. On 7 October 2008, Mrs Inwood had a further conversation with a representative of the Office of the Protective Commissioner in which she said that buying the property was a last resort because, inter alia, Mr Inwood would inherit a third of the property when the deceased died. That statement was inconsistent with the alleged representations and Mr Inwood was able to provide no explanation in cross-examination as to why his wife would tell the Office of the Protective Commissioner that the property would pass equally to the children if the alleged representations were made. He then acknowledged that he did not know whether, prior to his father's death, he had an expectation that his father would give him the front block and a life interest in the back block in his will (T59.5). 29In a telephone call on 3 November 2008 between Mrs Inwood and the Office of the Protective Commissioner, Mrs Inwood again advised that Mr Inwood and she had a continuing interest in purchasing the property (Ex D4). That advice is inconsistent with an expectation the property would be left to him under the deceased's will. 30In a telephone conversation on 4 November 2008 with the Office of the Protective Commissioner (Ex D4), Mr Inwood indicated an interest in the purchase of the property and that, if he and his wife were not able to purchase the whole of the property, they would like to consider purchasing the front block on which their house was built. Mr Inwood conceded in cross-examination that the indication to the Office of the Protective Commissioner that he wished to buy the whole of the property or alternatively the front block at market price was inconsistent with the alleged representations (T60). Matters relied on in corroboration of the alleged representations 31The Plaintiffs submit that corroboration for the alleged representations is provided by the fact that Mr Inwood moved to the property, the application for subdivision and the 1987 wills. I do not consider that the alleged representations are corroborated by the fact that Mr Inwood built his house on the property since that house had already been built by the time the alleged representations as to the front block and the back block were alleged to have been made in the early 1990s. The application for subdivision is readily explicable by the intention that the "house block" was to be transferred to the Plaintiffs, albeit on conditions, to which I refer below. The 1987 wills are readily explicable as reflecting the then intention of the deceased, whether or not the alleged representations were made, and the alleged representations that Mr Inwood would have the front block on the death of the deceased and a life interest in the back block (as distinct from the whole of the property) are inconsistent with the 1987 wills. 32The Plaintiffs also relied on references to "Bruce's block" in file notes of statements by the Defendants to a solicitor in 2004 (Exs P2 and P5). I accept the Defendants' submission that these file notes refer to conversations about a proposal made by Mr Inwood that he should have the front block and the defendants the back block, rather than to any acknowledgment by Mrs Ewin or Ms Pearce of any representations made by the deceased. In his affidavit evidence, Mr Inwood had denied a conversation with his sisters in 2004 at the offices of the solicitors in which he put that proposal and his sisters rejected that proposal (Inwood 1.6.11 [38]). Mr Inwood accepted in cross-examination that the conversation occurred and that his denial was false (T62.16). Loss of opportunity with the Forestry Commission 33The Plaintiffs relied on the fact that Mr Inwood had not accepted a possible position at the Forestry Commission to establish detriment by reliance on the representations. Even if I had found these representations in respect of the front and the back block had been made, I do not consider that I could have found that Mr Inwood had established any material detriment by not accepting that position, in the absence of fuller evidence as to the terms on which such a position could have been obtained. Although I accept that such a position would very have likely have provided Mr Inwood with an entitlement to superannuation, the income which he would have earned from it was not established and he obtained other benefits from working on the farm. Conclusion as to estoppel claim as to the front block and the back block 34Accordingly, I am not satisfied that the alleged representations (other than in respect of the house block, to which I will refer below) were made or were relied upon by the Plaintiffs. Accordingly, the Plaintiffs' case based on estoppel in respect of both the front and the back blocks must fail. Estoppel claim as to the house block 35The Plaintiffs alternatively claim orders for the transfer to them of the house block, again under estoppel principles. The Plaintiffs' claim in respect of the house block raises different issues from the claims in respect of the front and back blocks since the evidence indicates, and the Defendants essentially conceded, that representations had been made to Mr Inwood concerning his ability to occupy the house block, albeit those representations contemplated that he would take the steps to which I refer below. 36As noted in paragraphs 11-13 above, Mr Inwood gave evidence concerning conversations as the house block at some time after 1985 and in about 1987. The Plaintiffs' moved into the house on the house block in 1988 (Inwood 3.12.2010 [27]). A development application for subdivision of the house block was lodged with the Council in 1994 (Inwood 3.12.2010 [37]) and the Plaintiffs sought to progress the house block subdivision in mid-2003 (Inwood 3.12.2010 [48]). 37The Plaintiffs' claims in respect of the house block are corroborated by other evidence. At a meeting on or about 16 July 2008, Mrs Ewin advised the Office of the Protective Commissioner that the deceased had transferred six acres of the property to Mr Inwood, but the transfer costs were not paid and Mr Inwood was not officially on title. On 2 October 2008, in a further conversation between the Office of the Protective Commissioner and Mrs Ewin, Mrs Ewin expressed the view that "[I]f the property is to be sold, she would like six acres to go to her brother as he was promised that by his father. However, she doesn't believe in subdividing the property in three parts". Mrs Ewin acknowledged in cross-examination that she was there saying that Mr Inwood had been given the house block (T124.31). 38The Defendants contend that, so far as there was a representation to the Plaintiffs that the deceased would transfer the house block to them on condition that they attended to the costs of achieving and registering the sub-division and transfer, that condition was not satisfied. Mr Inwood confirmed in cross-examination that the process of development approval and the costs were up to the Plaintiffs (T12.15). Mr Inwood also acknowledged in cross-examination that it was his understanding that, in order to have the house block transferred to him, it was up to him and his wife to do everything that needed to be done to legally implement that arrangement, including dealing with any necessary services, registering the plan of subdivision and getting a transfer of the land registered; and he acknowledged that these things had not been done at the time of the deceased's death and, in particular, no plan of subdivision was registered (T69). He acknowledged that the subdivision was never completed because of the associated costs (T70). Mrs Inwood also acknowledged in cross-examination that it was her understanding that, in order to have the house block transferred to the Plaintiffs, it was necessary that they should meet the costs of the subdivision, the transfer, the connection of electricity and obtain the survey plans (T84-85). 39The Defendants contend that the conditions to the gift of the "house block" were not satisfied, that gift was not perfected and the gift is not enforceable by them. I do not consider that the principles established in cases such as Olsson v Dyson (1969) 120 CLR 365 at 268 exclude the application of estoppel principles in an appropriate case. 40There is force in the Defendants' submission that there has been a lack of industry on the part of the Plaintiffs in attending to the requirements necessary to bring about the subdivision and transfer of the house block to them. However, it does not follow that the deceased or his estate were free to depart from the representations which he had made that the Plaintiffs could retain the house block if they attended to the relevant requirements, at least without giving reasonable notice of his intention to do so and an opportunity to the Plaintiffs to satisfy those conditions before the gift lapsed. In my view, it would be unconscionable for the deceased's estate not to allow at least a further opportunity for the Plaintiffs to complete the conditions required for a subdivision of the house block, and to obtain the benefit of that subdivision if those conditions can be completed. 41The Defendants alternatively contended that the Plaintiffs' equity in respect of the house block had been diminished by later events, including their opportunity to live rent-free on the land: Sledmore v Dalby (1996) 72 P & Cr 196, approved in Delaforce v Simpson-Coo k [2010] NSWCA 84 at [61]. In some circumstances, other benefits obtained by a plaintiff may be such that it is not inequitable for a defendant to depart from an assumption induced by a representation made on the defendants' part. I am not, however, satisfied that the benefit of rent-free occupancy of the land was such that it would not be unconscionable for the deceased to have departed from the representation as to the house block without allowing notice to Mr Inwood of his intention to do so and the opportunity to satisfy the conditions to the gift to which I refer above. 42The Defendants' submissions conceded the possibility that an equitable lien might arise in these circumstances, while contending that it could not be imposed because it had not been sought in the pleadings: "As no conveyance, even today, can effectively be made, the more appropriate remedy would be the imposition of an equitable charge or lien in favour of [Mr Inwood] for the amounts expended by him on the property ... The plaintiffs, however, have not pursued such a remedy and it is not open for them to do so now. In any event, there is no sound evidentiary basis for any findings about the quantum of any expenditures carried out, other than [Mr Inwood's] claim that the pre-manufactured home which he and his wife erected upon the land cost $140,000 to build." I do not accept the submission that the absence of a claim for an equitable lien in the pleadings prevents its imposition. Under Civil Procedure Act 2005 (NSW) s 90(1), the Court is obliged to give judgment or make such order as the nature of the case requires. Under Uniform Civil Procedure Rules 2005 (NSW) r 36.1, at any stage of the proceedings the Court may give such judgment or make such order as the nature of the case requires, whether or not a claim for relief extending to that judgment or order is included in any originating process or notice of motion: Farrell v Mulroney [1978] 1 NSWLR 221; NSW Trustee and Guardian v Schneider [2011] NSWSC 424 at [24] . There is no suggestion in the Defendants' submissions that they have been deprived of the opportunity to lead any relevant evidence as to relief of this character. 43It is, in my view, possible that the equity arising from the representations made in respect of the house block and Mr Inwood's reliance on them could be satisfied by the imposition of an equitable lien on the property for the value of the Plaintiffs' expenditures to construct their house on the house block. The evidence before me is that those expenditures were $140,000 in respect of the cost of erection of a transportable house on the property. I do not consider that interest would be allowed on that amount since the Plaintiffs have had the benefit of occupying that house throughout the relevant period. 44I will hear the parties further as to the form of orders which should be made in this regard, whether to allow a further opportunity for subdivision or to impose an equitable lien. I encourage the parties to explore whether they can agree the form of such an order, avoiding the need to incur further costs in argument as to that matter. Family Provision Act claim 45The Plaintiffs alternatively seek additional provision out of the estate of the deceased under the Family Provision Act 1982 (NSW). (Since the deceased died on 30 December 2008, it is common ground that this claim is to be decided under the Family Provision Act and not the Succession Act 2006 (NSW).) Mr Inwood is an eligible person under section 6 of the Family Provision Act . Mrs Inwood is not an eligible person within the meaning of s 6 of the Family Provision Act and her claim for relief under the Family Provision Act must therefore fail. 46Section 7 of the Family Provision Act provides that, subject to Family Provision Act s 9, the Court may order that such provision is made out of a deceased person's estate: "as, in the opinion the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person." Section 9(2) provides that, relevantly, the Court shall not make an order for provision under s 7 unless it is satisfied that any provision made in favour of the eligible person by the deceased person either during the person's lifetime or out of the deceased person's estate is, at the time the Court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the eligible person. Section 9(3) specifies factors which the Court may take into consideration in determining what provision ought to be made in favour of an eligible person out of a deceased person's estate, namely: "(a) any contribution made by the eligible person, whether of a financial nature or not and whether by way of providing services of any kind or in any other manner, being a contribution directly or indirectly to: (i) the acquisition, conservation or improvement of property of the deceased person, or (ii) the welfare of the deceased person, including a contribution as a homemaker, (b) the character and conduct of the eligible person before and after the death of the deceased person, (c) circumstances existing before and after the death of the deceased person, and (d) any other matter which it considers relevant in the circumstances." 47In determining the claim under the Family Provision Act , I must first determine whether the provision made for Mr Inwood is inadequate for his proper maintenance, education and advancement in life. If that question is answered favourably to Mr Inwood, I must then determine what provision ought to be made, addressing all of the circumstances relevant to determining what provision would be "proper" for his maintenance, education and advancement in life. Thus, in Singer v Berghouse (1994) 181 CLR 201, Mason CJ, Deane and McHugh JJ observed at 209-210: "The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant." 48In Vigolo v Bostin (2005) 221 CLR 191 at [122] where Callinan and Heydon JJ observed that: "Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances ... The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors." 49The test established under Family Provision Act s 9 has regard not only to what is "adequate" by reference to the applicant's needs but also to what is "proper" in all the circumstances of the case, including the deceased's wealth, the applicant's means, competing claims on the bounty of the deceased and the applicant's conduct in relation to the deceased. As White J observed in Palaganio v Mankarios [2011] NSWSC 61 at [72], the question of what provision for a person's maintenance, education or advancement in life is "proper" and the question of whether the provision made by the deceased was adequate for that person's maintenance, education and advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered. I must also give weight to the testator's intention as expressed in the will: Gillard v Baker (26 May 1994, Young J, Supreme Court of NSW, unreported); Singer v Berghouse at 209-210; Vigolo v Bostin at [231]. 50The Plaintiffs contend that it cannot be said that adequate provision was made for Mr Inwood when, from 1979-1980 until the deceased's death, his only means of generating income came from the farm, and for an adult child of 57 to be deprived of the asset that produced his income is neither adequate or proper. The Plaintiffs submit that the proper and adequate provision in this case is at least a life estate in the farm. It will immediately be noted that, particularly where Mr Inwood is the youngest child, that claim has the capacity to deprive Ms Pierce and Mrs Ewin of any benefit under the estate during their lifetimes. 51I do not accept the submission that a will which deprives Mr Inwood of the asset that produces his income is self-evidently neither adequate or proper, although that will of course depend on the circumstances. Mr Inwood conceded on cross-examination, and I have held, that he was aware for a substantial period that the deceased intended to leave the property to his three children in equal shares and he has had the opportunity to prepare for that outcome. It is not self-evident that, even if an adult son or daughter operates a family farm or family business for a significant period with knowledge that his or her parents' intention is to leave it by will to all their children, including those who do not operate it, adequate or proper provision for that child will always require the family farm or family business to be left to that child, to the exclusion of other children or other beneficiaries of the will. That approach would fetter the testator's freedom to determine who is to receive a benefit under his or her will; has the capacity to operate unfairly to other potential beneficiaries; and does not give adequate weight to the focus on all the relevant circumstances, of which this matter is only one, under the Family Provision Act . 52Turning now to other relevant circumstances, the deceased has left Mr Inwood a third interest in a substantial estate. The first report of Mr Toner valued the property at $1.9 million being the interest of the fee simple of the land with vacant possession as at August 2010. Mr Toner expressed the view that the house erected on the house block was a fixture to the land and could not be moved from it without substantial damage and assessed its value (exclusive of curtilage improvements) to be $297,000. He divided the value of the land between the front block of $562,000 and the back block of $1,250,000 on the express assumption that separate access, power and building permission were available to that block. A second report prepared by Mr Toner expressed the view that the value of the back block on an "as is" basis, lacking any separate legal form of access, was $625,800. It was not clear whether this assessment involved any reduction in the value of the property as a whole. I think it more likely that it involved only a reapportionment of value between the front block and the back block to recognise the access limits to the latter, but it is not possible to reach that view with certainty given the form of Mr Toner's second report and the fact that he was not required for cross-examination. Depending on how Mr Toner's valuation is interpreted, the interest left to Mr Inwood has a value of at least about $400,000 and up to $600,000. 53The evidence also does not establish key elements of the submissions put by the Plaintiffs as set out in paragraph 50 above. Mr Inwood has from time to time earned income by working other than on the farm. Although he is now in his later middle age, there is no evidence that he could not obtain work on another farm, or lease a farm so as to generate income from it, or acquire a farm sufficient to produce an adequate wage with the assistance of the substantial legacy he would receive under the will. 54The evidence also establishes that Mr Inwood received substantial benefits during the deceased's lifetime and since his death, by occupying the property rent-free from about 2004 to date. Mr Inwood gave affidavit evidence that there had been an initial agreement with the deceased to reduce the rent payable to $500 per month and that the deceased later told him that the deceased did not require any more rent for the property (Inwood 3.12.2010 [47]). There is some contradictory evidence, including that the accounts prepared for the deceased for the financial years up to and including the 2002 financial year recorded the payment of rental at the full amount. Contrary to Mr Inwood's affidavit evidence, he had advised a representative of the Office of the Protective Services Commissioner on 4 November 2008 that he and his wife had paid rent of $1,000 per month from 1998 to 20 June 2004 (T22.45, T23.38). A different account of how Mr Inwood came to cease paying rent was given in a letter dated 13 August 2008 from Mrs Inwood to the Office of the Protective Commissioner, which stated that the fact that the deceased was not receiving income from the property reflected a verbal agreement between the deceased, Mr Inwood and Mrs Pearce (emphasis added) which was made when the deceased moved from his family home and was for "[ Mrs Pearce] to take possession of all the contents within the home plus two motor vehicles belonging to himself and [Mr Inwood] to cease rent payment " and in return Mrs Pearce would care for the deceased in her own home and Mr Inwood would maintain the family property while paying rates and insurance and minor repairs (Ex D1). Mr Inwood conceded in cross-examination that the statement that there was a verbal agreement between the deceased, Mrs Pearce and Mr Inwood was incorrect (T30.16, T31). 55It ultimately does not matter for present purposes whether that benefit of occupying the farm without paying rent was conferred by the deceased (as Mr Inwood contends) or acquired by Mr Inwood by unilaterally ceasing to pay rent when the deceased was admitted to a nursing home. In either case it was received. Its value was substantial, since Mr Inwood benefited at least to the amount of $12,000 per year which, on his evidence, he had previously paid the deceased and possibly by as much as $20,000 per year, which was the amount he later offered to pay by way of rent to the Office of the Protective Commissioner (Ex D3, T75). The amount of that benefit would be at least $160,000 and possibly more where the amount saved would either have derived interest if invested or resulted in savings on interest paid on borrowings by the Plaintiffs. (I should note that the Plaintiffs contended that this matter was not specifically pleaded and that they would be prejudiced if it were taken into account. I do not accept that submission. The Plaintiffs themselves pleaded that the deceased had allowed Mr Inwood to occupy the property on a rent-free basis and Mr Inwood gave evidence as to the amount of rent which had previously been paid). 56The Defendants contend that the deceased had also made a gift to Mr Inwood of an interest in a grazing property at Mount Palmer in 1997, and that Mr Inwood had acquired the deceased's livestock, plant and equipment without payment to the deceased. Mr Inwood's evidence was that his father sold his stock and machinery privately and received payment and that Mr and Mrs Inwood purchased their own machinery and that old machinery which is not workable or useable was left on the farm (T11.13). There is also a suggestion in the evidence that Mr Inwood was indebted to the deceased in the amount of $13,475, at least in 2002 (Ex D5, T71). The evidence before me does not allow me to form a clear view as to these matters and I do not consider that it is necessary for me to do so given that it is possible to resolve Mr Inwood's claim under the Family Provision Act without reference to these matters. Other relevant factors include that Mr Inwood's wife also earns an income, albeit on a seasonal basis and has some superannuation and a motor vehicle which is several years old. 57To the extent that the needs of other beneficiaries are relevant, Mrs Pearce presently has few assets and little income (Pearce 17.9.10 [20]-[29]). The Plaintiffs contended that I should have regard to the fact that Ms Pearce has a claim available under the Family Law Act 1975 (Cth) in respect of the property on which she resided with her estranged husband over a substantial period, and I accept that such a claim is likely to be available. However, there is no evidence before me as to the extent of the unencumbered value of that property and it appears there are complexities in pursuing that claim, by reason of the ill-health of Ms Pearce's estranged husband. While I have taken the prospect of a successful claim by Ms Pearce into account, I cannot give great weight to it in the absence of clearer evidence as to the amount and prospects of that claim. I should add that, where evidence as to the value of the property and the extent of any encumbrances on it was likely to require the issue of subpoenas to third parties, I do not treat the fact that Ms Pearce did not lead such evidence (which it was equally open to the Plaintiffs to lead) as a matter from which any inference adverse to her can be drawn: Edgar v Public Trustee for the Northern Territory & Anor [2011] NTSC 5 at [46]. Mrs Ewin and her husband are in a substantially stronger position, with substantial real estate holdings and superannuation entitlements. 58It may be that the deceased could have been more generous to Mr Inwood and could have taken the view that it would be fair for Mr Inwood to have received compensation for the loss of his home on the house block (if that is to occur) in addition to the third share of the estate which he is entitled to receive under the will. However, the Court does not exercise a general jurisdiction to adjust the fairness of wills and must instead determine whether the prerequisites to an order under the Family Provision Act are established. I do not find that the provision for Mr Inwood was not adequate and proper having regard to the circumstances of the case for the reasons I have set out above. In these circumstances, I do not consider that it is necessary or appropriate for me to proceed to the second stage of the inquiry contemplated by the Act. Orders 59The Plaintiffs have therefore succeeded in establishing that there should be relief in respect of the house block, either by way of an order permitting a further opportunity to secure a subdivision of that block or by way of imposition of an equitable lien in respect of the amount of $140,000 incurred in erecting the house on that block. I will hear the parties further as to the form of such orders and as to costs. ********** 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: 09 December 2011