Proietti v Proietti

The parties to these proceedings are two brothers who inherited the family home at Marsfield (the Property) from their late mother. Without intending any disrespect, I will refer to them by their given names.

The defendant (Philip) is fifty-two years of age. He has resided in the Property for more than thirty years, being the vast majority of his adult life, and during that time provided care to his elderly parents preceding their deaths. The plaintiff (Peter) has mostly lived independently and has not resided at the Property for many years.

Peter and Philip now hold the Property as tenants in common. They are in dispute about when and, if so, on what terms, the Property should be sold. Peter has brought these proceedings for orders under s 66G of the Conveyancing Act 1919 (NSW). Philip opposed any such orders being made.

As is well known, orders under s66G will generally be made unless the defendant can demonstrate some extant legal or equitable right that is inconsistent with that relief being granted, or which cannot be accommodated by the terms on which any orders are made. For the reasons which follow, the Court finds that Philip has not made out any of the legal arguments he advanced in defence to Peter’s application, being proprietary estoppel, promissory estoppel and contract. The Court will make orders for the appointment of trustees for sale of the Property, subject to hearing the parties about the form of those orders and including whether Philip can demonstrate that he has any possibility of raising funds within a reasonable time to bid at any auction.

Mr A Paterson of Counsel appeared for Peter. Philip represented himself.

Both Peter and Philip gave evidence by affidavit. While Philip was given the opportunity to do so, he did not object to any of Peter’s affidavit evidence. On the other hand, the Court upheld a large number of objections made by Mr Paterson on behalf of Peter to Philip’s affidavit. Philip cross-examined Peter. However, Mr Paterson elected not to cross-examine Philip on his affidavit.

By reason of the forensic decision he had taken, Mr Paterson entirely properly submitted that the Court should accept so much of Philip’s affidavit that had been admitted into evidence. The Court will do so. Furthermore, other matters are incontrovertibly established by reason of the fact that many of the potentially relevant exchanges between the brothers took place by text messages. To these two sources of evidence may be added some limited concessions made in cross-examination by Peter. These three sources form the basis of the Court’s findings of fact set out in the next section of these reasons as uncontroversial facts.

After recording the uncontroversial facts, I will set out the evidence, arguments and findings in relation to Philip’s three factual submissions that were strenuously disputed by Peter:

Finally, it is convenient to note two procedural matters. First, the Court has proceeded only by reference to the affidavit evidence that was admitted together with what emerged in cross-examination. While no disrespect is intended to Philip, as is often the case with self-represented litigants who are not lawyers, much of what Philip said in the questions that he posed to his brother and in the course of his submissions to the Court may well have been material that could have been given in evidence. It was not. The Court accepts Mr Paterson’s submission that the Court should not treat anything that fell from Philip by way of what may sometimes be referred to as “evidence from the Bar table” as evidence. The Court has not done so. To do otherwise would be to visit a serious procedural unfairness on Peter and put the Court to the task of attempting to discern what was evidence and what was submission.

Second, I indicated to the parties at the outset that but for the matters raised by Philip, this was a clear case for relief under s 66G. In those circumstances, and after some brief opening submissions by Mr Paterson, at the conclusion of the evidence the case proceeded on the basis that the Court first heard from Philip as to why he submitted no orders should be made, followed by Mr Paterson’s submissions on behalf of Peter in response. I then gave Philip a brief right of reply.

It is convenient to begin by setting out those relevant parts of Philip’s affidavit that were admitted into evidence. The Court finds in accordance with these:

Subject to the qualified observation below concerning the purported will of March 2015, the Court finds these further facts.

Peter and Philip’s father died on 21 February 2015.

Attached to paragraph 6 of Philip’s affidavit was an unsigned copy of a will of Philip and Peter’s mother, Mrs Miranda Proietti, which had a typed execution date of March 2015 (the 2015 Will). Philip was adamant that the Court should find that the 2015 Will had in fact been executed by his mother. For Peter’s part, Mr Paterson said that his client did not know one way or the other whether Mrs Proietti had ever executed the 2015 Will. Neither party called the solicitor who apparently prepared the 2015 Will and who undoubtedly prepared and was an attesting witness to the will which Mrs Proietti did make one year later.

Strictly speaking, I am not actually persuaded on the balance of probabilities by such of Philip’s affidavit evidence that was admitted or any other evidence before the Court that the 2015 Will was ever executed. I decline to make the finding sought by Philip in that regard. However, because whether or not the 2015 Will was ever executed is not decisive to the outcome of these proceedings, I will assume in Philip’s favour for the purposes of what follows that the 2015 Will was in fact executed.

The 2015 Will included:

I will refer to clause 3 of Schedule 1 of the 2015 Will as “Philip’s right to reside”.

Mrs Miranda Proietti made her last will on 17 March 2016 (the 2016 Will). It included:

The 2016 Will did not contain the equivalent of Philip’s right to reside.

Mrs Miranda Proietti died on 28 November 2019 after a short but devastating illness.

Approximately a year or two before their mother passed away, she had a conversation with Peter about her will. During cross-examination, Peter described the conversation in these terms (Tcpt, 10 June 2022, p 28(25-30)):

There was no dispute that Peter and Philip had agreed that Philip could continue to occupy the Property, which would not be sold before late 2021 or early 2022, and that he paid Peter $400 weekly in rent from 1 July 2020 (the Occupation Agreement).

The Court is satisfied that the Occupation Agreement was in place by 23 February 2020 because on that date Peter sent Philip a text which included a screen shot of a five bedroom house in Marsfield that was being offered for rent for $1,230 (I infer fortnightly) together with this comment:

Probate of the 2016 Will in common form was granted to Peter and Philip on 12 March 2020. The Property, which is unencumbered, was the main asset of the estate and was estimated for probate purposes to have a value of $2,400,000. Peter and Philip were subsequently registered as proprietors of the Property as tenants in common as to one half each.

On 12 April 2020, Peter and Philip had a disagreement concerning letters of administration that produced these text messages, which are reproduced as they were sent:

Philip placed great emphasis on the last of those text messages during the proceedings, especially the reference to the “same spirit we agreed from the beginning”. In his view, this formed part of the evidence that his brother was resiling from earlier promises and acting in a manner that was inconsistent with those promises. However, both sides accepted that the Occupation Agreement was in place at that time. Of greater significance in my respectful view is Peter’s statement “If we can’t discuss and work through these minor issues now what chance have we got when we actually have to make decision in regards to the house”. This supports Peter’s evidence (which the Court accepts) that when the Property was ultimately to be sold after late 2021 or early 2022 was (at least as at 12 April 2020) still unresolved between them.

The dispute evidenced by those text messages appears to have been successfully overcome and Peter commenced paying rent on 1 July 2020 in accordance with the Occupation Agreement. He continued to do so up to and including 28 July 2021.

By July 2021 Philip was in arrears, as appears from this text exchange on 28 July 2021:

There was no dispute that Philip brought his rental obligations up to date to 28 July 2021.

On 24 September 2021, Peter and Philip had a serious argument. These text messages ensued between 24 and 30 September 2021:

There were then various exchanges between the parties and their solicitors which were unable to resolve matters between the brothers. Peter commenced these proceedings by summons filed on 17 January 2022.

There was no dispute about the applicable legal principles in relation to s 66G. These were conveniently summarised by White J in Foundas v Arambatzis [2020] NSWCA 47 (Bell P and Basten JA agreeing) which I gratefully adopt:

Philip raised three matters as an answer to what the Court otherwise considered to be a clear case for the making of an order under s 66G:

Before setting out in detail how Philip put each of these claims it is convenient to deal with some contested factual matters that on any view are essential to those arguments. Those matters are that:

Peter denied that he had any knowledge of either will until after Mrs Proietti’s death. In his affidavit sworn 11 April 2022 Peter’s evidence was:

Peter’s evidence under cross-examination remained that he never knew about the 2015 Will. He also explained that he did not make any specific enquiries about a will with his mother (Tcpt, 10 June 2022, p 9(22-44)):

The most that Peter’s mother had alluded to him was to tell him that the brothers were “equal beneficiaries on the Will and that if a problem arises just give [Philip] 12 months” (Tcpt, 10 June 2022, p 28(28-9)). Peter understood that to mean that he should wait twelve months after their mother’s death before selling the Property.

As will become apparent below, Philip’s case was based upon what he said was Peter’s silence in relation to the wills and, in particular, in relation to Philip’s right to reside and its removal from the 2016 Will. Philip submitted that the Court should find that Peter must have known about those matters for these reasons:

Mr Paterson submitted for Peter:

The Court finds that Peter never knew about the 2015 Will. His evidence was consistent on this point. Further, the explanation that he never enquired because his mother was in good health, and he believed it to be none of his concern so long as she was alive, is plausible and accepted by the Court.

In contrast, Philip’s reasons to suggest the opposite were not persuasive. Philip’s inference that Peter knew because he was “thinking about the legal situation” was too long a bow to draw. Similarly, his argument that Peter lacked credibility because he referred to their quarrel in April 2020 as a dispute, whereas Peter called it a minor disagreement, was unconvincing. While an assumption could be drawn that what their mother told Philip she may have told Peter there was no evidence to elevate this beyond speculation.

The text messages between them made no mention of any will. This electronic silence between the brothers on this issue is relevant in one of two ways. Primarily, it is neutral and proves nothing. However, if that be wrong, it is more consistent with a conclusion that Peter genuinely knew nothing of the contents of the 2015 Will. Neither conclusion assists Philip’s case. Even if Peter knew about the 2015 Will, it did not follow that he knew about or had any involvement in its alteration. That could have been done by their mother of her own volition.

The Court accepts Mr Paterson’s submission that there is no evidence whatsoever to support such a serious finding against Peter. That is sufficient to dispose of the argument. The Court’s finding in paragraph [40] above that Peter did not know of the 2015 Will before their mother’s death fortifies this conclusion.

Philip attested that sometime in early 2021, Peter had represented to Philip, or they had agreed, that there would be no sale of the Property until 2023. Philip’s affidavit evidence on this point is reproduced at paragraph [11] above.

Peter’s affidavit evidence accepted that there had been a conversation, but not that they had reached a final agreement about when to sell the Property. Peter stated in his affidavit:

Under cross-examination, Peter stated that there was a “continuing conversation” about when to sell the Property (Tcpt, 10 June 2022, p 12(15)). He recalled that he specifically raised the fact that he wanted to sell the Property with Philip in March 2021 and Philip’s response was that he “needed time to get money together” as he wanted to buy Peter’s share (Tcpt, 10 June 2022, p 13(46-7)).

Philip alleged that Peter had told him he intended to move to Brisbane in 2023, hence the agreement not to sell until that time. Peter conceded that there was some future plan to relocate his family to Brisbane but denied there was ever a clear timeline for doing so.

Philip submitted that the Court should accept the agreement existed and was binding because:

Philip ultimately accepted that the text messages between him and Peter did not evidence any agreed date between them for the sale of the property (Tcpt, 10 June 2022, p 44(30)). Nevertheless, he maintained that the Court should find that such an agreement existed.

Mr Paterson submitted on Peter’s behalf:

The Court is not satisfied that any agreement was reached in a conversation between Philip and Peter in March 2021. The text messages are once again silent about any such arrangement and are of no assistance to Philip’s case. There is nothing in them to indicate such a conversation ever occurred. Again, to the extent the text messages might evidence anything at all, the silence is more consistent with Peter’s evidence that there were ongoing discussions but no agreement reached about when to sell the Property at the end of the Occupation Agreement. Whatever conversations may have taken place between the brothers appear to have gone nowhere until matters were brought to a head in September 2021.

Apart from what may be made of the text messages, the Court is left in the position of having only the word of each brother against the other. In such a case, where no independent evidence can be relied upon to distinguish one version of events from another, the question becomes one of onus. It is Philip who bears the onus as the party asserting the estoppel: Sidhu v Van Dyke (2014) 251 CLR 505 at 523 (French CJ, Kiefel, Bell and Keane JJ) and 531 (Gageler J); [2014] HCA 19. He has failed to discharge that onus such that the Court cannot be actually satisfied on the balance of probabilities that there was any agreement to the effect that Peter asserts.

Peter raised two kinds of estoppel in defence to the s 66G orders: promissory and proprietary estoppel. Both are a species of equitable estoppel: Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 at 472 (Priestly JA). The equitable estoppels serve a common purpose, however, there is no unified doctrine and different contexts may require different approaches: Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1 at 43 (Keane J); [2016] HCA 26. The “principal practical difference” between promissory and proprietary estoppel was described by Keane J as arising “from the circumstances in which each is deployed: the former operates in relation to contracts, whereas the latter is concerned with the recognition of interests in property by way of relief against unconscionable conduct” (at 45).

Brennan J summarised the essential elements to establish an equitable estoppel in Waltons Stores (Interstate) Ltd v Maher and Anor (1988) 164 CLR 387 at 542; [1988] HCA 7 (Waltons Stores):

Meagher JA (Leeming and Payne JJA agreeing) considered the relationship of silence to equitable estoppels in the form of a proprietary estoppel in Q (A Pseudonym) v E Co (A Pseudonym) [2020] NSWCA 220:

It was obvious that, to his credit, Philip had done a great deal of research on the law in relation to proprietary and promissory estoppel. However, with respect, it was not always easy to follow exactly how he put either argument, given that there were no pleadings. What the Court did have was Philip’s brief written outline of submissions and then the way he sought to develop his argument as it appears from the transcript of the hearing.

Doing the best I can by reference to those sources, I understood Philip’s case in proprietary estoppel to be put as follows:

Philip contended that he had made out all the necessary elements for the proprietary estoppel which he alleged both as a matter of fact and law. He placed particular reliance upon this observation of Brennan J in Waltons Stores at 542:

Mr Paterson submitted on behalf of Peter that:

The Court’s factual findings at paragraph [40] mean that Philip’s case does not succeed on any permutation. The Court is satisfied that Peter never knew of the alleged clause in the 2015 Will nor its change in the 2016 Will. It follows that no duty could arise requiring Peter to inform Philip of the change in circumstances.

Even assuming in Philip’s favour that Peter knew, no facts have been proven that would have given rise to a duty in Peter to say anything to Philip. To adopt the language of Brennan J in Waltons Stores quoted in paragraph [58] above, there is no evidence that Peter knew or intended that Philip should conduct his affairs on any assumption or expectation of the kind alleged by Philip. Furthermore, Philip had already been informed of the change by his mother, so Peter’s alleged silence would not have caused him any detriment.

Philip had ample opportunity to raise the issue with his mother and to persuade her to reinsert the clause containing his right to reside. He failed to take that opportunity. Philip has not demonstrated any basis on which equity would hold Peter responsible for that failure or his failure to challenge the grant of probate. He also had ample opportunity to challenge probate which he did not do, even when he claims to have been made aware of the circumstances by which he could have challenged probate after it was already granted (being allegations of undue influence over their mother by Peter), the present grant not being in solemn form.

To the extent it may be relevant, even if Philip had such an opportunity to discuss the issue with his mother, there is nothing to suggest that his mother would have acquiesced. That is because the Court accepts Mr Paterson’s submission that it is entirely possible that she removed the clause of her own volition and for her own reasons. As the Court has already found, there is no evidence to suggest that Peter exercised any undue influence over their mother.

Philip submitted that:

It was put to Philip that sometimes a promissory estoppel can be revoked by notice. In that case, Philip argued that he would need until the end of 2023 to raise sufficient finances to purchase the Property (Tcpt, 10 June 2022, p 70(45-6)).

Philip also asserted that Peter had no evidence to support the notion that they were engaged in ongoing discussions about when to sell the Property. If, as Peter claimed, the Property was meant to be sold in 2021 or 2022 there should have been some mention of it in their text messages when the time to sell arose (Tcpt, 10 June 2022, p 71(34-5)). The fact that there were no text messages to this effect supported his submission that they had already agreed on a time to sell which was in 2023.

It was pointed out to Philip (and accepted by him) that the text messages did evidence some kind of breakdown in their relationship sometime between 20-24 September 2021. According to Philip this breakdown was consistent with Peter seeking to renege on the agreement not to sell until 2023 by forcing a sale; it was not because there was any agreement to sell the Property at any earlier time (Tcpt, 10 June 2022, p 72).

Mr Paterson submitted for Peter:

Philip responded to Mr Paterson’s submissions by stating that there was evidence and that it was circumstantial evidence. He reiterated that he had relied upon the representation and that he suffered a detriment because he had now been told he had approximately six months to accrue the necessary finance, which was something he could not do.

As a general proposition, Philip argued that Peter lacked credibility because “his statement has more holes in it than Swiss cheese” (Tcpt, 10 June 2022, p 92(44)). He expressed his concern that, given there was only one day scheduled for hearing, he was not “getting the chance” to put everything forward that might assist his case but there was nevertheless “enough evidence here for at least one of the estoppels” (Tcpt, 10 June 2022, p 94(1)). He declined the opportunity that I then gave him to make any application for whatever he thought would give him the chance he thought he was not getting.

Philip also speculated that the reason Mr Paterson did not cross-examine him was because “the less evidence that that comes out, the better they are to force the order” (Tcpt, 10 June 2022, p 93(26-7)).

As with proprietary estoppel above, Philip’s claim in promissory estoppel must fail by virtue of the Court’s factual findings at paragraph [51]. The Court is not satisfied that any representation was made by Peter to Philip that Peter would not sell the Property until 2023. The silence on this topic in their text messages is consistent with the conclusion that there were ongoing discussions on the matter but no actual agreement had been reached. On any view, as I have already observed, the silence does not assist Philip. It follows that there was nothing that Philip could be said to have reasonably relied upon, or that a failure to take steps to obtain finance before now is as a result of that reliance.

It was not entirely clear to the Court how Philip put his claim in contract. He placed far greater emphasis on the alleged estoppels in the course of argument. However, it is apparent from what he did say that, in his view, there was some kind of agreement under which he would receive security of housing at the Property in exchange for the payment of rent to Peter. This was evident in the transcript where he asserted that he would not have paid rent “for no reason” (see paragraph [48(1)] above). At the same time, Philip asserted that he had no obligation to pay rent even though they were joint owners and he was simply doing so because (Tcpt, 10 June 2022, p 44(28-29)):

Philip alleged that Peter broke their contract in September 2021 when he resiled from the alleged agreement not to sell the Property before 2023. At that time, Philip had not paid any rent since 28 July 2021. This, according to Peter’s evidence under cross-examination, was the reason why they had agreed to meet at the Macquarie Centre: Philip had agreed to pay the rent he owed. What eventuated, according to Peter’s evidence, was that the brothers quarrelled and, as a result, Philip stated his intention to cease paying rent altogether.

The evidence does not support the existence of any exchange sufficient to establish a contract between Philip and Peter, even assuming that as a family arrangement between brothers an intention to be legally bound could be inferred. The agreement alleged by Philip was entirely uncertain. The evidence does not support a finding of consensus ad idem between the brothers on essential matters such as how long Philip could reside in the Property and on what terms such as payment of rent, insurance and outgoings. By Philip’s own admission (see paragraph [73] above) the payment of rent was only something he considered “implicit”.

The Court has concluded that none of Philip’s arguments as to why orders should not be made under s 66G is successful. But for those arguments, this is an obvious case for the making of such orders. They will be made after the parties have been given an opportunity to address, to the extent they cannot agree, on the form of such orders and on the question of costs. Based on comments Philip made during the hearing, I expect he will wish to be heard on what opportunity, if any, he should be given to raise finance to purchase the Property. As to costs, subject to any special applications, costs should follow the event on the ordinary basis and those costs as agreed or assessed should be payable to Peter out of what would otherwise be Philip’s share of the net proceeds of sale of the Property.