Arfaras v Vosnakis

BEAZLEY P: I have had the advantage of reading in draft the reasons of Ward JA. I agree with her Honour's reasons and proposed orders.

WARD JA: These proceedings arise out of a dispute between the applicant, Mrs Arfaras, and her son-in-law, Mr Vosnakis, as to the arrangement pursuant to which Mr Vosnakis’ late wife (Mrs Arfaras’ daughter) was buried in July 2012 in a burial plot in Eastern Suburbs Memorial Park (“the subject plot”) in respect of which Mrs Arfaras held the exclusive burial licence. The burial licence in question was one that permitted two bodies to be placed in the same burial plot. Mr Vosnakis alleged, and the primary judge found, that Mrs Arfaras promised to transfer the burial licence to him so as to enable him in due course to be buried next to his late wife. After the late Mrs Vosnakis was buried in the subject plot, Mrs Arfaras resiled from the promise to transfer the burial licence to Mr Vosnakis.

Mr Vosnakis brought proceedings in the Equity Division of the Supreme Court, alleging that a binding contract had come into existence under which Mrs Arfaras was obliged to transfer to him the right to nominate the second person who would be buried in the subject plot. In the alternative, Mr Vosnakis argued that Mrs Arfaras was estopped from denying his entitlement to the burial licence on the basis that he (being the person entitled to administer his late wife’s intestate estate) had exercised the right to nominate his wife’s burial place as the subject plot in reliance on Mrs Arfaras’ representation that she would transfer the burial licence in relation to that plot to him.

The primary judge found that there was an arrangement between Mr Vosnakis and his mother-in-law that included the transfer of the burial licence to Mr Vosnakis ([49]) but concluded that this arrangement did not give rise to any contractual obligation upon Mrs Arfaras to do so ([147]). His Honour nevertheless held that the arrangement did give rise to an estoppel, with the result that Mrs Arfaras held the burial licence on the basis that she was required to transfer it to Mr Vosnakis so that he would be able to control the exercise of the second right of nomination in a way that would ensure he was buried with his wife “if that should continue to be his wish” ([163]).

His Honour accordingly declared that Mrs Arfaras was estopped from denying that Mr Vosnakis was entitled to the perpetual interment right in respect of the subject plot; declared that Mrs Arfaras held that perpetual interment right as trustee for Mr Vosnakis; and ordered Mrs Arfaras, within 28 days from the date of the order, to take all actions as may be necessary to transfer to Mr Vosnakis that perpetual interment right for the burial plot.

Mrs Arfaras now seeks leave to appeal against the finding that there was an estoppel requiring that she transfer the burial licence to Mr Vosnakis. Leave is necessary pursuant to s 101(2)(r) of the Supreme Court Act 1970 (NSW) because the matter at issue does not exceed the monetary threshold there specified. Mr Vosnakis has in turn sought leave to cross-appeal from his Honour’s finding that there was no binding contract between the parties. The respective applications for leave were heard concurrently with the appeal/cross-appeal in the event that the requisite leave were in each case to be granted.

It is convenient at this stage to set out the principal conversations which gave rise to the arrangement in question.

The first such conversation was on the day of Mrs Helen Vosnakis’ death, 19 July 2012. Mr Vosnakis deposed in his affidavit of 3 April 2014 that on that day he had a conversation with his mother-in-law in words to the following effect ([4]):

The second plot to which Mrs Arfaras there referred was a burial plot adjoining the subject plot in which Mrs Arfaras’ late mother (Mrs Spyridou) had been buried (“the adjoining plot”). The adjoining plot was also the subject of a licence permitting two bodies to be placed in it.

The second such conversation occurred the following day, 20 July 2012, during a meeting with a representative from Acropolis Funerals. Mr Vosnakis deposed that at that meeting Mrs Arfaras said, in response to a query by the Acropolis Funerals representative ([5]):

Mr Vosnakis deposed that during the course of the above conversation, the Acropolis Funerals representative telephoned Botany Cemetery to confirm the entitlement to the two burial plots and that, on discovering that the second burial plot was in the name of Mrs Arfaras’ late mother, there was a further conversation:

Mr Vosnakis’ evidence was that, following that conversation, he walked with Mrs Arfaras to her house down the street; they searched her records and found the document evidencing Mrs Arfaras’ title to the burial licence for the subject plot as well as documentation relating to the adjoining plot; Mrs Arfaras gave Mr Vosnakis that documentation; and he agreed to make the arrangements necessary for probate of Mrs Spyridou’s will to be granted to Mrs Arfaras so that she could exercise the right to nominate the second person to be buried in the adjoining plot.

Mrs Arfaras did not at that stage (or later) fill out or sign the transfer printed in blank at the bottom of the burial licence or certificate for the subject plot, nor did Mr Vosnakis ask her to do so at that time; matters on which Mrs Arfaras places some weight in the context of her denial that there was a legally binding contract for the transfer of the burial licence to Mr Vosnakis. For Mrs Arfaras emphasis is also placed on the fact that Mr Vosnakis did not, in the relevant conversations, say that he would not bury his late wife in the subject plot unless the burial licence was transferred to him.

Subsequent conversations took place between Mrs Arfaras and various family members, including Mr Vosnakis’ sister and his daughter (Mrs Arfaras’ granddaughter), in which Mrs Arfaras made similar statements in relation to the proposed transfer to Mr Vosnakis of the “grave” or burial licence.

It was not until 2013 that Mr Vosnakis learnt, from another family member, that Mrs Arfaras wanted to retain the relevant burial licence (and hence the right of nomination of the second person to be buried in the subject plot).

Mr Vosnakis then took steps (in June 2013) for the preparation of a probate application in relation to the estate of the late Mrs Spyridou. He gave the relevant documentation, prepared at Mr Vosnakis’ expense by a solicitor, to his sister-in-law (Mrs Arfaras’ other daughter, Ms Katralis) to enable a grant of probate to be made in favour of Mrs Arfaras in respect of Mrs Spyridou’s estate and for the transfer into his name of the burial licence for the subject plot. It may be inferred from this that Mrs Arfaras was named as an executor in her late mother’s will, though a copy of that will was not in evidence. Certainly, it was accepted by Senior Counsel appearing for Mrs Arfaras in this Court that Mrs Arfaras was the legal personal representative identified in Mrs Spyridou’s will or at least the person entitled to a grant of administration in respect of that estate (see T 9.45-10.5).

Mrs Arfaras did not apparently pursue any steps to apply for probate of her late mother’s will and, following unsuccessful attempts by Mr Vosnakis to obtain confirmation that Mrs Arfaras would transfer to him the burial licence for the subject plot (including making an offer on 1 July 2013 that “[I]f Mrs Arfaras has changed her mind and no longer wishes to give it to me, I am prepared to purchase it from her at a reasonable price”), the Supreme Court proceedings were commenced.

The arrangement that the primary judge found had been reached between Mr Vosnakis and Mrs Arfaras as a result of the conversations on 19 and 20 July 2012 was described at [49] of his Honour’s reasons as follows:

The primary judge considered the law concerning the grant and effect of exclusive licences for burial and the statutory and regulatory provisions governing the grant of burial licences and the control and management of cemeteries. It is not necessary to set out his Honour’s reasons in relation to those matters as there is no challenge to the conclusions that his Honour reached as to the legal and practical consequences of Mr Vosnakis’ decision to cause his late wife to be buried in the subject plot.

His Honour concluded (at [141]) that from the time that the late Mrs Vosnakis was buried in the subject plot, Mr Vosnakis (as the legal personal representative of her estate) became entitled to enforce an irrevocable licence that would give him certain legal rights to prevent her resting place being disturbed. His Honour thought it probable that the ancillary right to maintain the gravesite in Mr Vosnakis’ favour under the general law had been excluded or at least limited by the operation of r 5 of the rules governing the Botany Cemetery.

His Honour also concluded that, on the exercise of the right of first nomination by the holder of the burial licence (Mrs Arfaras), that aspect of the burial licence was exhausted but that the burial licence nevertheless remained in force between the cemetery authority and Mrs Arfaras ([142]).

At [151], having repeated his earlier conclusion that an irrevocable licence coupled with a grant arose in favour of Mr Vosnakis at the time the cemetery authority permitted him to bury his late wife in the subject plot, his Honour concluded that, at the time of the conversations between Mr Vosnakis and Mrs Arfaras, the subject matter of the alleged contract was a contractual licence but that it did not consist of, or grant, any interest in land.

As noted earlier, his Honour held (at [147]) that the events that occurred between 19 and 25 July 2012, when the late Mrs Vosnakis was buried, did not give rise to a binding and enforceable contract requiring Mrs Arfaras to transfer the burial licence to Mr Vosnakis. His Honour reached that conclusion for two separate (and independent) reasons, each of which his Honour considered was sufficient to justify the conclusion that no enforceable contract was made.

First, his Honour was not satisfied that the parties “made a bargain, in the sense that the one made a promise to the other, in each case, in exchange for receiving the benefit of the promise made by the other”. His Honour concluded that Mr Vosnakis “did not in any real or practical way make a promise to Ms Arfaras” that he would cause his wife to be buried in the subject plot (see [147]); rather, there was simply the making of an arrangement that was implemented in part. His Honour thus concluded that Mrs Arfaras’ agreement to transfer the subject plot to Mr Vosnakis was not done in any real way in return for anything to be done by Mr Vosnakis.

Second, his Honour did not accept that the objective circumstances justified a conclusion that the parties intended to create legally binding relations between themselves (at [148]).

As to the claim based on estoppel, his Honour found (at [153]) that Mrs Arfaras had induced Mr Vosnakis to exercise the right of burial in respect of his wife by causing her to be buried in the subject plot. His Honour said:

His Honour noted that Mrs Arfaras’ refusal to honour her promise to transfer the burial licence to Mr Vosnakis had created the situation that he could no longer look forward to being buried with his wife unless he went through the process of causing her exhumation and reburial. Though Mr Vosnakis had at one stage prior to the proceedings taken the position that if Mrs Arfaras was not prepared to transfer the licence to him he would take whatever action was necessary to exhume his late wife’s remains and deal with them as he and his family deemed appropriate, his Honour noted the disinclination of the Court to make orders for exhumations and the “self-evident aversion that a husband in Mr Vosnakis’ position would have to disturb his wife’s remains, and to go through the process of exhumation and reburial”.

At [155], his Honour said:

Pausing there, in the present proceedings it is not suggested that there was no detrimental reliance on Mr Vosnakis’ part because of a possibility that Mr Vosnakis could seek to have his late wife’s body exhumed (T 15.10) though detrimental reliance is disputed on other bases.

At [158], his Honour concluded that it was against conscience for Mrs Arfaras to change her mind and refuse to transfer the burial licence after Mr Vosnakis had, on the assumption induced by her promise that she would transfer the burial licence to him (to enable him to be buried with his wife), in a real and practical way, exhausted his right of burial by causing his wife to be buried in the burial plot.

From [159], his Honour considered whether the considerations which had caused him to conclude that the parties did not intend to make a contract detrimentally affected Mr Vosnakis’ entitlement arising from the principles of estoppel. His Honour concluded, by reference to Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 (per Gleeson CJ, McHugh, Gummow and Callinan JJ at [35] and [36]) and Vukic v Grbin [2006] NSWSC 41 (per Brereton J at [27]-[28]), that they did not.

At [163] his Honour said:

His Honour considered it to be no bar to that conclusion that the subject matter of Mrs Arfaras’ obligation was merely a personal licence that gave her a contractual right against the cemetery authority, or that the detriment that Mr Vosnakis suffered was the exercise of the right of burial, which his Honour noted was a right recognised and enforced by equity. His Honour accepted (at [164]) that the nature of the detriment suffered by Mr Vosnakis in this case might be unusual, but said that it was significant when measured against the value of the burial licence held by Mrs Arfaras and in that respect it was material.

Although Mrs Arfaras’ draft notice of appeal raises six grounds of appeal, as set out below, one of those (ground 3) was effectively abandoned in the course of argument (see T 13.4-40).

Mr Vosnakis in turn seeks to cross-appeal on the following grounds:

Mr Vosnakis opposed the grant of leave to appeal on the basis that his Honour’s findings of fact had not been challenged; that his Honour’s application of law to the findings of fact was not remarkable; and that there was little point in granting leave to appeal as the appeal had insufficient prospects of success to justify leave.

Issues of principle were, however, raised on the applicant’s submissions. In the circumstances, it is appropriate to grant leave to appeal and, therefore, also to grant leave for the cross-appeal.

I will first consider the cross-appeal, given that if this Court were to conclude that his Honour had erred in finding that there was no binding contract, then there would be no room for the operation of the principles of equitable estoppel.

As noted above, his Honour made that determination for two independent reasons. Mr Vosnakis challenges each of those reasons. I will deal with them in turn.

Mr Vosnakis submits that the present factual situation is not analogous to that considered in Australian Woollen Mills Pty Ltd v Commonwealth [1954] HCA 20; (1954) 92 CLR 424, where the High Court considered that the necessary relation had not been shown to exist between the statement or announcement relied on as a promise and the act said to have been done in consideration of the promise.

Rather, Mr Vosnakis submits that the structure of Mrs Arfaras’ offer to him included both the consideration that she would provide to him (i.e., the transfer of the burial licence) and the consideration that he would provide to her (i.e., that he would cause his wife to be buried in the burial plot).

Mr Vosnakis argues that Mrs Arfaras’ promise to transfer to Mr Vosnakis the burial licence (including the right to select or nominate the second occupant of the subject plot) was objectively offered as a “quid pro quo” for Mr Vosnakis exercising his right to bury his wife in that plot. It is submitted that there was a clear identification of the conditions or requirements to be satisfied by each party and clear reciprocity between the fulfilment of the obligations of each party, such that this case can be distinguished from that described in Ashton v Pratt [2015] NSWCA 12; (2015) 88 NSWLR 281 (by Meagher JA at [228]).

Mrs Arfaras submits, to the contrary, that there was no identification of any conditions or requirements to be satisfied in return for the making or fulfilment of the expressed statement of intention and that the response by Mr Vosnakis did not suggest that he was undertaking legally enforceable obligations in return for what was proposed (adopting the language in Ashton v Pratt at [228]; [230]). It is submitted that the acceptance by Mr Vosnakis of what was offered by Mrs Arfaras (i.e., the ability to bury his wife in the subject plot) was entirely unconditional.

Mrs Arfaras points to the distinction between cases involving a quid pro quo arrangement and those involving a representation of intention upon which another party is content to act. She argues that a mutual understanding which amounts to no more than a representation of intention upon which the other party was content to act does not amount to a contract (referring to Wells v Matthews [1914] HCA 50; (1914) 18 CLR 440 at 444 per Griffith CJ). Reliance is also placed on the observation in Barns v Barns [2003] HCA 9; (2003) 214 CLR 169 (at [75] per Gummow and Hayne JJ) that that which is propounded as a contract may, on consideration of the evidence, be no more than a family understanding or representation of intention which lacks binding effect.

Insofar as Mr Vosnakis submits that his Honour did not properly address the “structure” of the parties’ arrangement, I do not accept that criticism of his Honour’s reasons. His Honour accepted that the promise that Mrs Arfaras would transfer the relevant burial licence to Mr Vosnakis may have been implicit in her offer that he could be buried in the same burial plot as his wife and also accepted that Mrs Arfaras had sought the emotional benefit of her daughter being buried in the subject plot (at [147]). His Honour was therefore well aware that the arrangement was one that involved an offer that, if accepted, would result in a benefit to Mrs Arfaras. It may be inferred that his Honour accepted that a promise by Mr Vosnakis to nominate the subject plot as his late wife’s burial place would be capable of amounting to consideration for Mrs Arfaras’ offer to transfer the burial licence to him.

The relevant question is whether, properly characterised, the conversations of 19/20 July 2012 amounted to an exchange of promises (i.e., a promise to transfer the burial licence in exchange for a promise to bury Mrs Arfaras’ daughter in the subject plot) or perhaps, although this was not how the case was pleaded but is on one view implicit in Mrs Arfaras’ promise, an offer by Mrs Arfaras of the Carbolic Smokeball kind (Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256) albeit not being made to the world (i.e., I promise to transfer the burial licence to you if you bury your wife in the subject plot) whereby acceptance of the offer and consideration for the promise consists in the doing of the particular act (the burial of his wife in the subject plot).

In either of those circumstances (provided that there was objectively an intention to create legal relations) a binding contract would have come into existence.

The difficulty that I have in reaching the conclusion that the relevant conversations can be so characterised is that, while the promise (or offer) by Mrs Arfaras to transfer the burial licence to Mr Vosnakis was clearly predicated on the assumption that the late Mrs Vosnakis would be interred in the subject plot (since it was expressed in terms that “you can go with her”), the successive offers made by Mrs Arfaras (to make the subject burial plot available for her daughter and then to transfer the burial licence to Mr Vosnakis to enable him to be buried with her in due course) were not expressed in the language of mutually dependent promises. Rather, the conversations are more readily understood as amounting to a succession of gifts that Mrs Arfaras was willing to bestow on Mr Vosnakis; and his acceptance of the offer of the subject plot as the place where his wife could be buried was not made subject to or conditional upon the promise by Mrs Arfaras that she would then or later transfer the burial licence to him.

Therefore, I am of the opinion that his Honour did not err in concluding that there was in effect a gift offered by Mrs Arfaras (and accepted unconditionally by Mr Vosnakis) of the subject plot as a resting place for her daughter, followed by a separate promise (unsupported by consideration) that she would transfer the burial licence to Mr Vosnakis.

As to the second basis for his Honour’s conclusion that there was not an enforceable contract, it is not disputed that the test as to intention to create binding relations is an objective one. It takes into account not only the words used but also the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other relevant surrounding circumstances (Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 at [25]).

Mr Vosnakis argues that the subject matter of the agreement was of a serious nature and that, unlike the position in Ashton v Pratt, the obligations to be undertaken by each party were ascertainable, certain and specific; this being a powerful indication of intention to create legal relations.

Mr Vosnakis emphasises that Mrs Arfaras signed the application for interment of her daughter, thereby granting an indemnity to the trustees of the Botany Cemetery and agreeing to be bound by the regulations, by-laws and conditions applicable to the subject plot; that Mr Vosnakis signed the instruction sheet specifying that his wife was to be buried in the subject plot; and that Mr Vosnakis signed the funeral services agreement with Acropolis Funeral Services Pty Limited, accepting significant binding financial obligations. He notes that all three documents were signed in the presence of Mrs Arfaras, Mr Vosnakis and the funeral director on 20 July 2012.

In effect, the submission for Mr Vosnakis is that a court will more readily conclude that there was an intention to create legal relations in a family context where an arrangement has been implemented in part and where one party (here, Mr Vosnakis) is left vulnerable to the other party resiling from the arrangement. Reliance is placed on the discussion by Professor Atiyah to that effect in Introduction to the Law of Contract (6th ed, 2005, Clarendon Press at p 104).

In response to that submission, Mrs Arfaras: notes that those matters do not appear as findings of fact; argues that Mr Vosnakis’ submissions of that kind did not in terms form part of Mr Vosnakis’ contract case at trial; and says that the signing of documents would not constitute evidence of an exchange of mutual promises but would simply constitute conduct consistent with implementation of a mutual understanding which, in the circumstances, amounted to no more than a representation of intention by Mrs Arfaras upon which Mr Vosnakis was content to act.

The fact that the arrangement was implemented in part was a matter to which his Honour referred in his reasons. It does not lead me to conclude that there was, objectively ascertainable, the requisite common intention to be contractually bound by the terms of the arrangement at the time the arrangement was reached. As Mrs Arfaras points out, such conduct is equally consistent with Mr Vosnakis acting in accordance with acceptance of an unconditional offer and the hope or expectation that the burial licence would be transferred to him at some later stage.

Mr Vosnakis raises two particular complaints as to his Honour’s reasoning on this issue. Neither is sustained on my reading of his Honour’s reasons.

First, it is submitted that his Honour’s finding as to lack of intention to be bound was based on the grief experienced by Mr Vosnakis and Mrs Arfaras, together with the family relationship between them ([148]-[150]). It is submitted that it was not open to his Honour to make the finding of lack of intention on the basis that the parties were distressed and grieving; and that the evidence pointed to the family connection being a “distant and hostile one” (reference there being made to the evidence of Mr Vosnakis’ daughter (Mrs Friedrich) in cross-examination to the effect that her mother had not enjoyed a good relationship with Mrs Arfaras).

In this regard, what his Honour said was that he considered it self-evident that both parties would have been extremely distressed following the unexpected death of Mrs Vosnakis but that he was satisfied that both Mr Vosnakis and Mrs Arfaras had “rationally and conscientiously attended to the practical arrangements necessary for Ms Vosnakis’ funeral and burial”. His Honour then said (at [148]) that:

I do not read his Honour’s reference to the emotional state of the family members at the time of the relevant discussions as something that was determinative of the finding as to lack of intention to create binding relations. To the contrary, his Honour was satisfied that the parties had been able rationally and conscientiously to attend to the funeral arrangements. The reference to the extremity of their mutual situation seems, in context, no more than an observation by his Honour as to the unlikelihood that, at the time and in the objective circumstances in which the relevant conversations were taking place, the parties’ common intention was to be bound to a legally enforceable agreement. There is no error there disclosed.

As to the significance of the family connection, his Honour expressly disavowed reliance on any presumption arising out of the family relationship, stating at [149] that he did not consider that this was a case where the application of a rebuttable presumption of fact (that family arrangements or agreements are not intended to have legal force) would have an effect on the outcome of the proceedings. His Honour made clear that the finding he had made was on the basis of an objective assessment of the state of affairs between the parties (see [148]-[149]), having expressly referred to what was said in Ermogenous at [24] in that regard.

Second, complaint was made that his Honour was confusing right and remedy when referring (at [148], in the passage extracted above) to the unlikelihood that the parties had thought “in the necessary objective sense” that the arrangement would be contractually enforceable. This, the Court was informed, was Mr Vosnakis’ best point (see T 30.34), namely that his Honour had impermissibly engaged in mind-reading and had improperly allowed his conclusions about the subjective intentions of the parties to influence him.

However, as I read his Honour’s reasons (at [148]-[149]), his Honour was not there suggesting that because a court might not have enforced an agreement or arrangement it could not objectively be determined that the parties intended immediately to be bound by it. Nor do I consider that his Honour was there confusing subjective intentions with an objective assessment of the state of affairs between the parties. Rather, his Honour was explaining why it was that, looking at the objective circumstances, he considered that a finding that the parties’ intention was to be bound to an enforceable contract would not be justified. No error is there established. Having regard to the terms of the respective conversations and the objective circumstances known to his Honour, the conclusion that the parties’ objective intention was not that they were to be contractually bound seems to me, with respect, to be correct. Had the common intention of the parties been to enter into a binding contract at that stage one would have expected that there would be more precision in the specification of its terms and conditions.

Mr Vosnakis relies, as contemporaneous conduct supporting the conclusion that the parties regarded their arrangement as binding, first, upon the fact that he accompanied Mrs Arfaras to her house to collect the documents that would allow him to carry out his obligation to obtain probate in her favour of her mother’s estate and to transfer the rights to choice of occupant of the burial plot to Mrs Arfaras from her mother, both at his own expense; and second, to the fact that Mrs Arfaras gave him the documents. However, as noted earlier in relation to the entry into the arrangements for the burial of Mr Vosnakis’ wife, such conduct is equally consistent with the parties honouring promises that were not objectively intended to have binding legal effect.

Finally, I should note that a factor relied upon by Mrs Arfaras as inconsistent with an objective intention to be bound to the terms of the arrangement was what was referred to as the “relatively transitory” right that Mr Vosnakis would have obtained had the promise been performed (see the discussion at T 12.5-13.4). However, it is not necessary to deal with this argument at this stage in light of the conclusion I have otherwise reached as to the lack of an objectively ascertainable common intention to be bound by the burial arrangements. As it was conceded that this submission was of more relevance to the estoppel argument, I propose to deal with it in that context.

His Honour did not err in concluding that, on the evidence before him, an intention to enter into a binding legal contract was not objectively ascertainable, notwithstanding the serious nature of the subject matter of the relevant conversations.

The cross-appeal should be dismissed. No error has been established in his Honour’s conclusion as to the lack of an enforceable contract.

I turn then to the issues raised by Mrs Arfaras’ appeal. These relate to his Honour’s finding that Mrs Arfaras was estopped from denying that Mr Vosnakis was entitled to the perpetual interment right in relation to the subject plot.

Although complaint was made in the written submissions filed by Mrs Arfaras that his Honour had failed to identify the nature or type of the estoppel found to have arisen, the real gravamen of her complaints goes to the question whether his Honour erred in finding the essential elements of an equitable estoppel (as those elements were articulated in Waltons Stores (Interstate) Limited v Maher [1988] HCA 7; (1988) 164 CLR 387 (at 428).

For completeness, however, I note that there was no particularity in the way in which the estoppel claim was pleaded. At [13] of Mr Vosnakis’ further amended statement of claim, the allegation was simply that Mrs Arfaras was estopped from denying Mr Vosnakis’ entitlement to the burial licence. Nor did the precise nature of the estoppel emerge from the declaratory relief sought, which was in the alternative: a declaration that Mrs Arfaras was estopped from denying the existence of a binding contract between the parties and, in the alternative, a declaration that she was estopped from denying that Mr Vosnakis was entitled to the burial licence for the burial plot.

In closing submissions before the primary judge the estoppel was described as both a promissory estoppel and a proprietary estoppel, which may go some way to explaining his Honour’s general description of the estoppel claim.

In this Court, however, any suggestion of a claim based on promissory estoppel was emphatically disavowed by Mr Vosnakis. Instead, Mr Vosnakis argues that his estoppel claim should be understood as a case of proprietary estoppel by encouragement of the type considered in Dillwyn v Llewelyn (1862) 4 De GF & J 517; 45 ER 1285 (not proprietary estoppel by acquiescence of the type considered in Ramsden v Dyson (1866) LR 1 HL 129).

The principle of proprietary estoppel was stated by Mason CJ and Wilson J in Waltons Stores v Maher (at 404) as follows:

Estoppel by encouragement of the kind considered in Dillwyn v Llewelyn has been described by the authors of Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (5th ed, 2014, LexisNexis) at [17-065] as:

The authors of Young, Croft and Smith’s On Equity (2009, Lawbook Co) at [12.180] distinguish between estoppel by acquiescence (as considered in Ramsden v Dyson and Svenson v Payne [1945] HCA 43; (1945) 71 CLR 531 at 539) as a “passive” form of estoppel; and estoppel by encouragement (as considered in Dillwyn v Llewelyn) as an “active” form of estoppel.

Robert Walker LJ in Jennings v Rice [2003] 1 P & CR 100; [2002] EWCA Civ 159 noted (at [44]) that:

In the present case, his Honour’s reference to Giumelli v Giumelli indicates that his Honour was approaching the case as one to which the doctrine of proprietary estoppel by encouragement was applicable.

In Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 at 522 the plurality in the High Court noted (at [81]), in the context of the category of equitable estoppel, the application of the statement of principle by Dixon J in Grundt v Great Boulder Proprietary Gold Mines Ltd [1937] HCA 58; (1937) 59 CLR 641 at 674. Dixon J, there referring to estoppel in pais, said:

See also Meagher JA in Walsh v Walsh [2012] NSWCA 57 (at [13]), referring to the application of the above statement equally to promissory and proprietary estoppels (Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 at [1], [6], [43], [44]).

In the present case, the primary judge approached the estoppel claim as one based on a promise by Mrs Arfaras to do something (i.e., to transfer the burial licence) on which there had been detrimental reliance by Mr Vosnakis so as to make it unconscionable in the circumstances for Mrs Arfaras to resile from that promise. Nothing turns on whether a more precise articulation of the estoppel finding should have been made.

There is no challenge to his Honour’s finding that the subject matter of the relevant promise was a contractual licence that did not consist of, or grant, any interest in land; nor to the finding that at the (later) time the cemetery authority permitted Mr Vosnakis to bury his wife in the subject plot an irrevocable licence coupled with a grant arose. Further, the complaint that the contractual licence was not capable of attracting the application of any principle of proprietary or equitable estoppel (ground 3) was not pressed.

Turning then to the gravamen of Mrs Arfaras’ appeal, she argues that his Honour erred in finding that each of the essential features of equitable estoppel was established in this case. It is submitted that his Honour erred in adopting, or applying, the test set out in Vukic v Grbin per Brereton J (at [27]-[28]). In oral argument, the focus of the challenge to the primary judge’s conclusions was as to the findings of detrimental reliance and inducement.

The essential elements of an equitable estoppel as articulated in Waltons Stores v Maher (at 428) are as follows:

In Vukic v Grbin, Brereton J in effect summarised those six requirements into three matters (at [28]):

Brereton J did not suggest that he was there intending any departure from the analysis in Waltons Stores v Maher, to which authority his Honour expressly referred at the conclusion of the above extract.

I turn then to the complaints made as to each of the six elements of equitable estoppel.

As to the first, Mrs Arfaras accepts that an equitable estoppel may arise in the absence of a binding or enforceable contract, but submits that this will only be in limited circumstances confined to cases such as the completion of an imperfect gift (citing DHJPM Pty Ltd v Blackthorn Resources Ltd [2011] NSWCA 348; (2011) 83 NSWLR 728 at 738-748 per Meagher JA; 750-756 per Handley AJA; Saleh v Romanous [2010] NSWCA 274; (2010) 79 NSWLR 453 per Handley AJA).

In Blackthorn, at [49], Meagher JA said:

His Honour there noted (at [50]) that in the joint judgment in Waltons Stores v Maher, Mason CJ and Wilson J said (at 403):

In the present case, it is submitted for Mrs Arfaras that all she can be said to have encouraged was a hope or confident expectation on the part of Mr Vosnakis, neither of which is sufficient to give rise to an equitable estoppel. However, the expectation or assumption found by the primary judge was that Mrs Arfaras would perform her promise to transfer the burial licence. That is sufficient for the purposes of the first element identified in Waltons Stores v Maher. It falls within the formulation given in Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 by Priestley JA (Hope and McHugh JJA agreeing) (at 472):

His Honour did not err in concluding that Mr Vosnakis had an assumption or expectation (based on the promise made to him by Mrs Arfaras) that he would acquire from Mrs Arfaras her interest in the burial licence to the subject plot.

As to the second of the elements identified in Waltons Stores v Maher, Mrs Arfaras argues that his Honour erred in concluding that her conduct was in the nature of an inducement. She submits that his Honour did not identify any aspect of her conduct which could be said properly to found a conclusion that she induced Mr Vosnakis to adopt the relevant assumption or expectation.

Little weight was placed on this complaint in the oral submissions; with good reason. There was in my opinion sufficient inducement established by reference to Mrs Arfaras’ conduct in promising to transfer the burial licence to Mr Vosnakis; in repeating that promise in the presence of the representative from Acropolis Funerals; and in accompanying Mr Vosnakis to her home to collect the necessary documents to enable him to arrange for that to take place. Insofar as his Honour’s reasons identify only the making of the promise as the conduct amounting to inducement (see [153]), they must be read as referring to the context in which that promise was made.

As to the third of the elements identified in Waltons Stores v Maher, Mrs Arfaras submits that proof must be of actual (not imputed or presumed) reliance (referring to the plurality judgment in Sidhu at 522 and 533). Mrs Arfaras complains that his Honour’s findings as to reliance were not based on “actual” reliance. That complaint cannot be sustained in light of his Honour’s acceptance of Mr Vosnakis’ evidence that he would not have buried his wife in the subject plot had it not been for the conversations with Mrs Arfaras in which she told him that she would transfer the subject plot to him so that he could make arrangements to be buried in the same burial plot as his wife (in his affidavit at [7]). At [26], his Honour found that Mr Vosnakis was a credible and persuasive witness whose evidence was not in any way shaken (as his Honour also found Mr Vosnakis’ daughter and sister; by contrast to his finding as to Mrs Arfaras’ evidence).

Mr Vosnakis’ evidence as to reliance was a sufficient basis for the finding of actual reliance.

As to the fourth of the elements identified in Waltons Stores v Maher, it is submitted for Mrs Arfaras that his Honour did not have regard to the requirement that it be established that she knew or intended Mr Vosnakis to act or abstain from acting in reliance on the assumption or expectation that she would transfer the burial licence to him. Reference is made to the passage at [153] of his Honour’s reasons where his Honour said that it was probable that Mrs Arfaras understood “and if not she ought reasonably to have understood” that Mr Vosnakis had complied with her suggestion on the understanding that she would honour the promise and that he would not have caused his wife to be buried in the burial plot had he been told that she would renege on her promise.

It is submitted that there was no evidence that Mrs Arfaras had held such knowledge or intention and that the matters set out at [153] are based on speculation and assumption and fall short of establishing the requisite knowledge or intention in this regard.

For Mr Vosnakis it is submitted that the logical and obvious inference to be drawn from the making by Mrs Arfaras of the promise was that she intended Mr Vosnakis to rely upon it.

I read his Honour’s reasons at [153] as comprising a finding that, on the balance of probabilities, it should be inferred that Mrs Arfaras did have the requisite intention that Mr Vosnakis should rely on her promise and understood that he was so doing when he accepted her offer of the subject plot. The fact that the promise to transfer the licence was predicated on her daughter being buried in the subject plot makes this clear; as does her conduct in assisting Mr Vosnakis to obtain the necessary documentation to enable the burial of his late wife in the subject plot. Any other finding would not accord with common sense.

Mrs Arfaras, as his Honour found, was seeking to achieve the emotional benefit of her daughter being buried in the subject plot. It was an available (and almost inescapable) inference that she made the promise intending Mr Vosnakis to rely on it. That is what his Honour must be taken to have meant at [153]; not that there was an impermissible presumption of reliance.

As to the fifth requirement (for detrimental reliance), Mrs Arfaras notes (referring to Fifteenth Eestin Nominees Pty Ltd v Rosenberg (No 2) [2009] VSCA 178; (2009) 24 VR 155) that the failure to make good on a promise unsupported by consideration does not of itself amount to the requisite detriment (Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 at 416).

Mrs Arfaras points to his Honour’s finding that Mr Vosnakis suffered a material detriment in the form of the loss of an expectation that he could be buried with his wife ([154]; [164]) and submits that the evidence did not clearly support a positive finding that Mr Vosnakis held any such expectation as at or before the time of the alleged promise. She argues that no detriment arises in circumstances where Mr Vosnakis would have been in the same position had the alleged promise not been made (citing Sidhu at [92] per Gageler J).

In Sidhu, the plurality referred again (at [92]) to what was said by Dixon J in Grundt v Great Boulder, saying that:

In Donis v Donis [2007] VSCA 89; (2007) 19 VR 577, Nettle JA, as his Honour then was, referred (at [34]) to the detriment there suffered as:

In the present case Mrs Arfaras submits that the detriment identified by his Honour is not a material detriment in the relevant sense required to found an equitable estoppel (Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406 at 437) and is not capable of being described as substantial and irreversible (Commonwealth v Verwayen at 416) such as would allow a conclusion that Mr Vosnakis has been placed in a position of significant disadvantage; and does not involve a life-changing decision with irreversible consequences of a profoundly personal nature as was the case in Donis v Donis.

As adverted to earlier, Mrs Arfaras argues that the promise to transfer the relevant burial licence, if performed, would have supplied no more than a relatively transitory right and one that would necessarily cease on Mr Vosnakis’ own death (since any election he might make during his life to be buried in the subject plot would not be binding on his legal personal representatives after his death) (see the discussion at T 12.5-13.4).

However, those submissions ignore the fact that, if the licence was transferred to Mr Vosnakis, he would obtain the ability to control the right of nomination in respect of the remaining burial place in the subject plot during his lifetime and would have the comfort, at least, of being able to make his views as to the exercise of that right of nomination known to his legal personal representatives through his will or otherwise, and hence the comfort of knowing that his executors were in a position to comply with his wishes. As to the submission that no life changing decision of an irreversible nature has been made, that flies in the face of the acceptance by Mrs Arfaras that once Mr Vosnakis exercised the right of nomination in respect of his wife’s burial place he effectively exhausted that right. It was no longer open to him, as a practical matter, to nominate another burial plot over which he would have the benefit of a burial licence in his own name rather than be left to the whims of Mrs Arfaras as to whether she would at some stage honour the promise made to him.

Thus the material detriment that Mr Vosnakis has suffered, in my opinion by acting on the faith of and in reliance on Mrs Arfaras’ promise, is that, he having exercised the right to determine where his wife was to be buried in accordance with Mrs Arfaras’ wishes, he has for all practical purposes exhausted that right and, by reason of Mrs Arfaras’ refusal to honour her promise to him, does not have the ability to control the second right of nomination in respect of the subject plot and does not have the comfort of knowing that he has (to the extent possible) preserved for himself the ability to be buried next to his wife. That is sufficient detrimental reliance for the purposes of the doctrine of equitable estoppel here being considered.

Finally, as to the relief that was granted, Mrs Arfaras complains as to the finding by his Honour that the transfer of the burial licence would not impose any significant detriment on her ([156]). It is submitted that his Honour erred in failing to take into account, first, the evident value of such a right in circumstances where Mrs Arfaras had acquired the licence for valuable consideration in 1977 and where the licence represented security for her own burial following her death. It is submitted that his Honour failed to have regard to the evidence that Mrs Arfaras has two sisters and hence the possibility that she could obtain the right to be buried in the adjoining plot did not represent a “viable replacement” of her right pursuant to the burial licence. It is also submitted that his Honour erred in finding (at [156]) that there was no impediment to the transfer of the burial licence to Mr Vosnakis as Mrs Arfaras did not positively assert a disinclination to be buried in close proximity to Mr Vosnakis.

In those circumstances it is submitted that his Honour erred in failing to find that to deprive Mrs Arfaras of her rights in respect of the burial plot in which her daughter was buried would be to insist on a disproportionate making good of the relevant assumption.

His Honour considered the detriment to Mrs Arfaras of requiring her to make good the promise (at [156]). Mr Vosnakis points out that it was inherent in the arrangement that the parties reached that Mrs Arfaras would have a secure gravesite and the ability to be buried in a grave adjoining her daughter’s grave. He argues that there was no evidence to suggest that this could not have been achieved; that he took the necessary steps required on his part; and that it was Mrs Arfaras’ choice not to proceed with the probate application.

The relevant question is as to whether it is unconscionable for Mrs Arfaras to resile from her promise in all the circumstances and, if not, whether the appropriate relief is to require her to transfer the burial licence.

Insofar as it is submitted for Mrs Arfaras that his Honour’s reasons implicitly acknowledge that it would be open for Mr Vosnakis to change his mind in the future (in which case Mrs Arfaras has been deprived of her interest in the burial licence unnecessarily), the question of unconscionability is to be determined at the time of departure of the promise. In Blackthorn, Meagher JA said (from [71]-[73]):

In the present case, the lengths to which Mr Vosnakis has gone to enforce the promise made to him hardly suggest that he is not presently minded to ensure, so far as possible, that he be buried in the same burial plot as his late wife. There was no evidence that Mrs Arfaras was not capable of securing for herself the benefit of the second resting place in her late mother’s burial plot (and it would presumably have been a simple matter for her to have pointed to any impossibility in that regard). The fact that she expended money to acquire the burial licence some years ago does not amount to an injustice sufficient to outweigh the detriment to Mr Vosnakis of departure from her promise.

His Honour did not err in concluding that the appropriate relief was to order Mrs Arfaras to make good the promise.

His Honour did not err in concluding that all the requisite elements for an equitable estoppel in the nature of a proprietary estoppel by encouragement were made out. Mrs Arfaras promised to transfer the burial licence to Mr Vosnakis. She did so expressly on the basis that this would enable him in due course to be buried with his late wife. She made that promise as part of her offer (and, his Honour thought likely, her insistence) that Mr Vosnakis bury his wife in the subject plot. The only reasonable inference to be drawn is that she intended Mr Vosnakis to rely on that promise when deciding where to bury his wife.

Mr Vosnakis established that he had relied on that promise to his detriment in the sense that he then lost, for all practical purposes, the ability to nominate that his wife be buried elsewhere and to control, during his lifetime, the second right of nomination in respect of that burial plot. His Honour did not err in concluding, on the evidence before him, that to require Mrs Arfaras to honour her promise would not be a disproportionate remedy.

The appeal should be dismissed.

That leads to the question of costs. Neither party wished to incur the costs of further argument in relation to this issue. For Mrs Arfaras it was submitted that if, as has transpired to be the case, both the appeal and cross-appeal were to be dismissed, then there should be no order as to costs, if for no other reason than the pragmatic one of saving the assessment costs that would follow if costs orders were to be made following the “event” in the case of both the appeal and cross-appeal. For Mr Vosnakis it was submitted that in the event that this Court were to reach the conclusion that I have reached, he should recover his costs of the proceedings in this Court, since he has been successful overall.

I am of the view that Mrs Arfaras should pay the costs of the proceedings in this Court. The cross-appeal was in essence defensive and it is not apparent that significant costs would have been incurred in relation to that issue over and above the costs of arguing the appeal itself. In substance Mr Vosnakis has been successful in resisting Mrs Arfaras’ attempt to overturn the order that she transfer the burial licence; and hence in holding Mrs Arfaras to her promise.

The orders I propose are as follows:

SIMPSON JA: I agree with Ward JA.