Irvine v Dowling

Robert John Irvine, Maxwell “Max” Charles James Irvine and Elizabeth Ruth Dowling are siblings and the only children of the late Verdun John Irvine. For convenience and without any disrespect, the Court will refer to the parties in these proceedings and others by their given names.

These proceedings are yet another chapter in what is nearly thirty years of litigation over the administration of their late father’s estate (the “Estate”). Verdun died in September 1992. Elizabeth was granted probate of his will on 19 November 1992. Robert, Max and Elizabeth have been the sole beneficiaries of the Estate since June 2002. At the time of the hearing, Robert, Max and Elizabeth were aged 79, 71 and 65 respectively.

The main asset in the Estate was and still remains a farming property called “Lowery”, located near Orange in New South Wales. In 1998, Lowery was subdivided and the northern part sold pursuant to orders made by Cohen J of this Court on 14 October 1994. In these reasons, reference to the “Property” is to the southern subdivision only, unless otherwise specified.

Elizabeth, as executrix of the Estate, is the registered proprietor of the Property, which she holds on trust for herself and her siblings as beneficiaries of the Estate. Several attempts to sell the Property have been made over the years, including pursuant to a written agreement between Max, Elizabeth and Robert in 2016 that the Property should be sold to the highest bidder by a private auction between the siblings using written bids (the “Agreement”). Subsequently, the siblings agreed orally to a process of verbal bids (the “Verbal Bid Agreement”).

Elizabeth claims that she is entitled to buy the Property as the highest bidder pursuant to a written bid made in May 2016 in accordance with the Agreement. However, the siblings fell into an impasse over this and the future administration of the Estate. They are now split into two camps: Max on the one side, Elizabeth and Robert on the other. The Estate is yet to be wound up, and the impasse between the siblings has culminated in the current proceedings.

Max commenced these proceedings to have Elizabeth removed as executor relying on, among other things, her alleged delay in administering the Estate. Elizabeth brought a cross-claim (supported by Robert in his own identical cross-claim) which primarily sought:

The matter was initially listed before me for hearing over four days, commencing on 18 May 2020. Mr L Ellison of Senior Counsel appeared for Max, Ms E Cohen of Counsel appeared for Elizabeth and Mr D Williams of Counsel appeared for Robert.

The emphasis in the parties’ pleaded cases changed over the course of the hearing. I gave an early indication that if all that remained in the Estate was the sale of the Property and the filing of accounts, I would not impose on the Estate the costs and delay of appointing a new executor. Elizabeth undertook to file accounts. Max accepted that if Elizabeth was entitled to sell the Property to herself pursuant to the Agreement, there was no utility in changing executor.

What was initially a dispute over the administration of the Estate and revocation of probate became a contest over whether Elizabeth has a present entitlement to purchase the Property pursuant to the Agreement. The parties ultimately accepted that the success of their respective cases turned largely on the principles of contract, including the application of the Statute of Frauds as enacted in s 54A(1) of the Conveyancing Act 1919 (NSW) (the “CA”), which provides:

This led to additional evidence and submissions being filed after the hearing, concluding on 5 November 2020.

Elizabeth’s case was that she was entitled to purchase the Property for $2,300,000 pursuant to a written bid she purported to make under the Agreement or, if the Verbal Bid Agreement was valid (which she denied), for $2,500,000 pursuant to a verbal bid she had made under the Verbal Bid Agreement. She said she had been and was ready, willing and able to complete that purchase. No party took any point about the form of declaration which Elizabeth sought and the proceedings were conducted on the basis that in substance, if not form, Elizabeth was seeking relief in the nature of specific performance.

The parties agreed that the Agreement was valid and binding. The Court’s conclusions to the effect that Elizabeth is entitled to purchase the Property for $2,300,000 may be summarised as:

With minor exceptions, the facts were not in dispute. It is convenient to commence these reasons by setting out the Court’s chronological findings of fact. In what follows, where any reference is made to findings on contentious matters, they are cross-referenced to that part of the of the judgment where reasons for the finding are given. To the extent that any other facts set out below were not agreed by the parties, I am satisfied on the balance of probabilities that they could not be sensibly disputed.

The first round of litigation following the death of Verdun comprised four sets of proceedings, including family provision claims by Elizabeth (ultimately not pressed) and Verdun’s widow, Enid. These were resolved by a judgment of Cohen J delivered on 14 October 1994 (the “Family Provision Judgment”), the effect of which was summarised by Johnson J in Dowling v Irvine [2005] NSWSC 531 (the “Possession Judgment”) in a passage which I respectfully adopt:

Max’s continued use of the Property after Enid’s death led to a dispute with Elizabeth, in her capacity as executrix of the Estate. On 19 November 2004, Elizabeth instituted proceedings against Max in this Court for possession of the whole of the Property. For the reasons set out in the Possession Judgment, on 3 June 2005 Johnson J made orders in Elizabeth’s favour for possession of the Property and restrained Max from re-entering the Property other than for the purpose of attending an auction of the Property or with Elizabeth’s consent.

Elizabeth obtained possession of the Property on 31 August 2005. The detail of what happened thereafter is not relevant. A public auction scheduled for 30 May 2008 did not proceed due to a caveat lodged by Max. No further attempt was made to sell the Property at this time, with the three siblings eventually coming to a modus vivendi of Max and Elizabeth (in her personal capacity and as executrix of the Estate) using the Property for the benefit of them all. Robert did not take an active farming role.

In or around early 2014, there was what Elizabeth and Max agreed was a casual conversation between the three of them about putting in place an arrangement whereby the three siblings could bid to purchase the Property, thereby ensuring the Property remained in the family.

On 12 September 2014, Elizabeth saw a conveyancer, Ms Sonia Doherty, but at that time did not give Ms Doherty any instructions to prepare a contract. Ms Doherty did not receive further instructions from Elizabeth until March 2016 (see paragraph [27] below).

In early 2015, discussions continued between the siblings as to the sale of the Property. The result of those discussions was subsequently reduced to writing in the form of the Agreement.

Elizabeth had the Agreement prepared with legal assistance (not by Ms Doherty) as a typed document. It was signed by Robert and Elizabeth on 11 February 2015 and provided:

Shortly after she and Robert had signed the Agreement, Elizabeth asked her husband, Richard Dowling, to go to Max’s house and have him sign the Agreement. Max said he would only do so on terms. Max did not sign the Agreement at that time. Richard returned home and made this diary note of his discussion with Max:

The references to “Toogong” and “Cudal” in the preceding paragraph are to additional property owned by Verdun, both forming part of the assets of the Estate. Although the Property was (and is) the main asset of the Estate, discussions between the siblings in recent years have included reference to the Toogong and Cudal properties, as well as other assets of the Estate (such as cash at bank). These other assets are not the subject of the current dispute and not something about which the Court has been required to make a determination.

Richard and Max had several discussions over the next year, the main topic of which was various demands Max had about the winding up of the Estate. This included conditions for the proposed contract of sale that the successful bidder for the Property would enter into. In or around July 2015, Richard typed up a list setting out the purported position of the Estate and Max’s conditions, and took them to Max. He told Max that if the list was an accurate reflection of the position they had reached, Max should sign the Agreement to enable the family auction of the Property to proceed. Richard’s list, which I will refer to the as the “Estate Position Statement” was:

Max still did not sign the Agreement.

It appears that discussions between the siblings waned in the second half of 2015. However, there is no dispute that on 23 February 2016, Richard attended Max’s home and that, on this occasion, Max signed a counterpart of the Agreement. Max contends he signed the Agreement subject to a number of conditions.

Mr Ellison SC submitted for Max that the Agreement was evidenced by the two signed counterparts (one signed by Robert and Elizabeth on 11 February 2015 and the other by Max on 23 February 2016), together with the Estate Position Statement. All parties agreed that the Agreement was valid and binding, and Elizabeth and Robert did not dispute that the Estate Position Statement was part of the Agreement. It is not necessary for the Court to make any finding about the status of the Estate Position Statement because the real issue in dispute presented for resolution by the parties was whether Elizabeth was entitled to purchase the Property pursuant to the Agreement.

On 10 March 2016, Elizabeth instructed Ms Doherty to prepare a contract for the sale of the Property. On 18 March 2016, Ms Doherty provided Elizabeth with a draft contract.

On or about 6 May 2016, on receipt of further instructions from Elizabeth, Ms Doherty provided a final draft contract for sale to Elizabeth (the “Sales Contract”) which the Court finds complies with the Agreement. There was more than one draft prepared by Ms Doherty and there was some confusion in the evidence about the final form of the document provided to Elizabeth. Ultimately nothing turns on this. However, based on Elizabeth’s evidence and Ms Doherty’s evidence (the latter was not cross-examined), the Court finds the Sales Contract included provision for a 28 day settlement, a $10,000.00 deposit and was for both the Property and the water allocation licence associated with the Property (searches for both were attached to the Sales Contract). It also included special condition 37 for the payment of interest, to which further attention is given below (see paragraphs [151]–[155]). Ms Doherty also provided Elizabeth with a list of instructions of what to do when the “purchaser” of the Property was determined:

At some stage prior to 10 May 2016, Max, Elizabeth and Robert came to the Verbal Bid Agreement, being an oral agreement that an auction (the “Private Auction”) would take place between them with their bids for the Property being made verbally. I do not accept the submissions made for Elizabeth and Robert that the Private Auction was a non-binding occasion to negotiate about indicative bids, but nothing turns on this because of the view the Court has taken that the Verbal Bid Agreement is unenforceable (see paragraphs [131]–[135] below).

The Private Auction took place on 10 May 2016. Max and Elizabeth met in person at the Property, with Richard and various members of Max’s family also in attendance. Robert participated in the Private Auction by listening in on Richard’s mobile phone.

All of the bidding at the Private Auction was verbal. It was common ground that Robert dropped out of the bidding first, leaving it to Max and Elizabeth.

Elizabeth made a bid of $2,300,000. The Court is satisfied that this was then superseded by Max with a bid of $2,400,000.

Elizabeth then countered with a bid of $2,500,000, following which Max shook Elizabeth’s hand, said words to Elizabeth to the effect of “Congratulations, it’s yours” and left the Property. The Court is satisfied that even if Robert did not hear in real-time Elizabeth’s successful bid of $2,5000,000, there can be no doubt that he was made aware of it. It was left unchallenged by all parties that no further bidding took place that day, and I accept it as inherently likely that Richard, who had been acting as a conduit for Robert all day, would have informed him of the outcome.

It was common ground that on 10 May 2016:

Max and Elizabeth had a discussion the next day, 11 May 2016. There was a dispute in the evidence as to the details of everything said on this occasion, but again nothing turns on this. However, it was common ground that Elizabeth informed Max she no longer wanted to pay $2,500,000 as it was “too much” and that there were subsequent discussions about next best offers.

The detail of what happened next is not relevant, because there was no dispute that on 18 May 2016 Elizabeth gave Max, in writing, an offer to purchase the Property for $2,300,000.00 (the “Written Offer”):

The text reproduced in italics above was handwritten, the balance being in typescript.

On 19 May 2016, Max sent an email to Elizabeth and Richard, with a hard copy of that email also placed in Elizabeth’s letterbox. The email said:

There was no evidence of Elizabeth’s reply to the above correspondence. However, on the basis of the events that occurred thereafter, I am satisfied — and certainly on the balance of probabilities — that Max never communicated that he accepted Elizabeth’s Written Offer.

On 27 May 2016, Max lodged a caveat over the title to the Property, claiming an “equitable interest as a beneficiary of the estate of the late Verdun John Irvine”. I accept Max’s evidence that this was because he was concerned Elizabeth intended to sell the Property to herself pursuant to the Written Offer, a course to which he did not agree. The caveat was ultimately withdrawn on 27 July 2016.

On 27 June 2016, the solicitors then engaged by Max, BJ Macree, wrote to Elizabeth stating that “our client has handed us a form of agreement that in its present form and detail is unsatisfactory” and requesting that she retain a legal representative “with whom we can discuss and hopefully come to agreement that will ensure the estate is finally distributed and accounted for without further cost and delay”. On the basis of evidence given in cross-examination and in light of Elizabeth’s reply (set out in the next paragraph), I accept that the “form of agreement” referred to in BJ Macree’s correspondence is the Agreement.

On 7 July 2016, Elizabeth responded to BJ Macree:

Elizabeth’s evidence is that the “further agreement” referred to is a document entitled “Family Agreement”, which provided:

There was a dispute in the evidence as to whether a copy of this “Family Agreement” was ever given to Max (directly or via his solicitors). Mr Ellison SC submitted on behalf of Max that only one document was attached to the 7 July letter, being a copy of the counterpart to the Agreement signed by Max. This was said to be evident when considering Elizabeth’s further letter of 12 July 2016. It appears that before receiving her letter of 7 July, BJ Macree had sent a follow-up to their June correspondence. On 12 July, Elizabeth responded and informed Max’s solicitors she enclosed “a copy of my letter and document sent to you on 7 July 2016” (emphasis added).

Elizabeth accepted that the document re-sent on 12 July appeared to be the Agreement only, with no reference to the Family Agreement (T229.39-230.1), and that no subsequent correspondence in these proceedings refers to the Family Agreement (T230.43-46). That concession was wrongly made. Though admitting she couldn’t clearly remember, Elizabeth was adamant that she would have sent a copy of the Family Agreement to Max’s solicitors (T228.14-19, 230.25-32, 230.50-231.16, 233.4-17). The Court is not satisfied a copy of the Family Agreement was provided to Max personally or through his solicitors until some time later because, contrary to Elizabeth’s concession, it is referred to in Max’s solicitors’ correspondence of a year later (see paragraph [53] below). Again nothing turns on this because it was not suggested the Family Agreement was ever agreed to by anyone.

In any event, on 1 September 2016, Elizabeth commenced a new series of correspondence with Max’s solicitors, BJ Macree:

BJ Macree replied on 6 September 2016:

I infer that the response provided by BJ Macree (notably Max’s explicit objection to the transfer of Lowery to Elizabeth) led Elizabeth to file a notice of motion on 16 November 2016 in the 1992 proceedings in which she was granted probate of the Estate, seeking judicial advice on questions including:

The motion came before Lindsay J on 5 December 2016, who made orders and notations which included:

Elizabeth did not exercise the liberty granted by Lindsay J to commence fresh proceedings to enforce the Agreement.

However, it was Elizabeth’s evidence that she went on to pay the $10,000 deposit in relation to her Written Offer, alleging that two instalments of $5,000.00 were made to the Estate’s bank account on 29 December 2016 and 3 January 2017. Elizabeth accepted that at some later point this $10,000.00 was appropriated for agistment monies she owed to the Estate (T165.30-36), and that she re-paid the deposit in October 2018. I do not accept the 2016 and 2017 instalments were ever intended as payment of the deposit. For the reasons set out in paragraphs [81] and following below, I am satisfied the earlier payments were always intended as payment of agistment fees.

There is no other evidence of what happened after Lindsay J’s directions until, on 15 May 2017, Max’s new solicitors, King Cain, wrote to Elizabeth threatening an application to the Court for her removal as an executor and seeking an undertaking “that you will not take any steps to sell [Lowery] prior to providing a full and proper accounting of your administration of the estate and allowing time for review of that by our client and confirming by our client”. The letter, which proposed a deadline for response of 31 May 2017, also invited Elizabeth to agree to participate in a mediation to endeavour to finalise the administration of the Estate by agreement.

Elizabeth responded to King Cain’s letter by email on 7 June 2017. A copy of this email was not in evidence, however I accept a response of that date was provided because it is referred to in Max’s solicitors’ reply on 20 June 2017:

Elizabeth responded to King Cain on 23 June 2017:

On 28 June 2017, King Cain answered Elizabeth’s letter:

Elizabeth subsequently replied to King Cain on 11 July 2017. As is made clear in the letter, Elizabeth recorded Max was not willing to consent to her buying the property for $2,300,000.00 (that is, pursuant to her Written Offer) and, in light of this, Elizabeth proposed to either “re-open” the private auction process between the siblings or proceed to public auction:

On 13 July 2017, King Cain wrote to Elizabeth:

Based on the correspondence in evidence, the parties’ attention then appears to have turned to focus on the provision of the Estate accounts by Elizabeth to Max. She provided these in or around December 2017, and an inspection of the Estate accounts took place at the offices of King Cain. On 18 December 2017, King Cain wrote to Elizabeth:

Elizabeth replied on 20 December 2017:

Max commenced these proceedings by filing his Statement of Claim on 15 January 2018.

Apparently unaware that Max had instituted proceedings, Elizabeth again wrote to King Cain on 17 January 2018:

On 23 January 2018, King Cain responded:

I pause to note that although it is clear Robert had not played an active role in any discussions with Max (or his solicitors) to this point, I accept that Elizabeth was keeping her eldest brother abreast of developments. I infer that Elizabeth must have shown or informed Robert of the contents of King Cain’s correspondence of 23 January, because on 29 January 2019, Robert sent Elizabeth an email stating his “strong disagreement” to any re-negotiation of a private auction with Max:

It appears that King Cain sent a further email on 25 January 2018, however a copy of this email was not in evidence. Whatever its contents, I infer the correspondence set a deadline for Elizabeth of 5.00pm 30 January 2018. So much is apparent from the response Elizabeth provided to King Cain on 30 January 2018:

In cross-examination, Elizabeth accepted it was a fair and reasonable reading of her 30 January 2018 correspondence that, in evincing her intention to list Lowery for public auction, she was now walking away from whatever agreements may have previously been in place between the siblings (T149.4-36). In accepting this proposition, Elizabeth remained resolute in her evidence that the contents of the letter were only ever intended as an offer to settle the litigation now on foot (T176.7-11). Importantly for present purposes, there is no suggestion that Max, who apparently now wanted to reopen the private auction process (see his solicitors’ letter in paragraph [62] above), ever communicated his agreement to Elizabeth’s 30 January 2018 indication that she was listing Lowery for public auction.

On 10 April 2018, King Cain informed Elizabeth that they had received a letter from Max’s accountant outlining questions in relation to the Estate account documents inspected on 14 December 2017. For present purposes, it is sufficient to record that a response to those questions was provided in the affidavit of Lynne Heather Irvine (Robert’s wife) sworn 19 September 2018. Lynne has assisted Elizabeth in keeping the financial records and accounts of the Estate since 1992.

In May 2018, Elizabeth (in her capacity as executrix of the Estate), transferred the Toogong blocks to Lynne for $14,500. This was notwithstanding the purported conditions set out in the Estate Position Statement (see paragraph [23] above) which contemplated a transfer of that land to Max as part of his share of the residue of the Estate, and Elizabeth stating in her affidavit of 21 May 2018 that she had intended this to occur. Elizabeth agreed in cross-examination that she did not discuss with Max his purchase of the land (T133.35-46), nor did she discuss the sale with Max prior to the transfer to Lynne (T133.17-24, T162.25-30).

On 4 October 2018, the parties to the present dispute attended mediation. The matter did not settle, but Elizabeth nevertheless decided to pay the $10,000.00 deposit. In her affidavit evidence, Elizabeth explained:

The deposit was paid into the Estate’s National Australia Bank (“NAB”) account in two instalments of $5,000.00 on 16 October and 17 October 2018. As set out in paragraph [51] above and for the reasons set out in paragraphs [85]–[90] below, I am satisfied these October payments were intended by Elizabeth to be in satisfaction of the deposit referred to in the Agreement and the Sales Contract.

Finally, there was uncontested evidence of the value of Lowery. In the course of the proceedings, and as the issues developed, orders were made for the parties to obtain single expert current and historical market valuations of Lowery. Both valuation reports were provided by Messrs Matthew Petty and A. Jamie Gibson of Aspect Property Consultants:

In addition to each of the siblings, only two other witnesses were called to give evidence at the hearing: Richard Dowling and Lynne Heather Irvine, the respective spouses of Elizabeth and Robert.

Each witness called at the hearing was cross-examined, although Richard, Lynne and Robert only briefly. Most of the cross-examination was directed to the evidence of Max and Elizabeth.

In final addresses no specific submission was made by Max or Elizabeth on the issue of the credit or reliability of the witnesses, notwithstanding that the Court was told during some of the cross-examination that the relevance of questions put went to credit. In his written submissions of 22 May 2020, Mr Williams made a brief submission on behalf of Robert that Elizabeth’s evidence should be preferred to the evidence of Max whenever there was any significant issue, as Max has “very little credibility and will lie whenever it suits him”. In support, Mr Williams relied specifically on Max’s evidence in cross-examination over incidents involving alleged violence towards Robert, where Max’s evidence was said to be contradicted by photographic evidence before the Court. Neither Mr Ellison SC nor Ms Cohen responded to this submission.

Although credit was therefore not an issue of serious contention, it is nonetheless necessary for the Court to set out brief observations on the matter.

Turning first to Richard and Lynne, I formed the opinion that each presented as an honest witness doing their best to assist the Court. I am satisfied that each gave their evidence in a frank manner, freely admitting to the limits of their involvement in the dispute and of their recollection. At no point was I left with the impression that either Richard or Lynne’s evidence was biased in favour of their respective spouses. They were not active parties to the critical events underlying the present dispute, a fact reflected in the limited evidence each was called to give. I note without discourtesy that Richard was in effect left to play the “middle man” between his wife and brother-in-law, a role made necessary due to the animosity between the siblings. As noted in paragraph [66] above, Lynne has assisted Elizabeth in keeping the financial records and accounts of the Estate since 1992.

With respect to Max, Elizabeth and Robert, I am satisfied that each of the siblings’ evidence was coloured by the years of dispute and disagreement between them. In the Possession Judgment, Johnson J, referring to the earlier reasons of Cohen J in the Family Provision Judgment, made the following observation:

It remains regrettable that both judges’ observations are still appropriate. Of the two camps (Max on the one hand, Elizabeth and Robert on the other), neither made any attempt in the present proceedings to conceal their distrust or contempt of the other, or the responsibility they perceived the other to bear in bringing the current dispute to a head. Consequently, there can be no doubt that Max, Elizabeth and Robert remain steadfastly entrenched in what they each assert to be the correct narrative regarding the Agreement, Verbal Bid Agreement, Private Auction and subsequent conduct.

However, I stress that this is not to say Max, Elizabeth and Robert were deliberately dishonest witnesses and the Court makes no such finding. Rather, the impression I formed of each sibling was that their recollection of events could simply not be accepted as reliable unless inherently likely, against interest or supported by contemporaneous documentary evidence, because each had clearly persuaded themselves of their version of events and what they took to be the effect of the dealings between them. The commencement of these proceedings was the only way to break the impasse created between them by their mutual intransigence and Elizabeth’s (understandable) reluctance to involve the Estate in further litigation.

Despite all the issues the parties sought to raise, only one contested issue is relevant, and even then not as a central issue. This was whether and when Elizabeth purported to pay the deposit for the Property.

By reference to the findings of fact already set out and what was inherently likely, the Court is satisfied, on the balance of probabilities, of what follows and finds accordingly.

It will be recalled that the Agreement provided:

I should record that Max sought to make an argument that the deposit was in fact to be 10% of the successful bid. Max signed a counterpart of the Agreement on 23 February 2016 and accepted that document referred to a fixed deposit amount of $10,000.00 (T77.25-26, 77.50-78.1). However, Max asserted that one of the conditions upon which he signed the Agreement was that the deposit amount would be amended to 10 per cent of the successful purchase price. In cross-examination, Max gave evidence that he told Richard $10,000.00 wasn’t enough money “to buy a property” and that Richard said he would change it (T.77.12-13, 78.1, 20-21). In support, Max explained “…you could not go to an auction and buy a $2 million or $3 million property for $10,000 deposit. You couldn’t do it” (T77.18-20). Further, Max swore in his affidavit of 12 July 2019 that the version of the Sales Contract he was allegedly provided in March 2016 had no deposit price inserted but retained the pro forma instructions “10% of the price, unless otherwise stated” (see also T75.44-45, 76.4-6).

Elizabeth submitted the deposit amount was $10,000.00, relying on the statement of this amount in the Agreement and the version of the Sales Contract she said (and which the Court has accepted — see paragraph [28] above) to be the final version. Robert did not make submissions or give evidence on the matter. However, his pleadings refer to $10,000 and I accept this to be his submission.

Although there is force in Max’s argument that $10,000.00 was likely to represent a very small proportion of the successful bid, I am satisfied on the balance of probabilities that this is in fact what the parties agreed to do. Having regard to the Court’s observations on credit, the contemporaneous documentary record supports this finding:

As to whether the $10,000.00 deposit has been paid, Elizabeth asserted that she did this in December 2016 and January 2017. In her affidavit evidence and under cross-examination, Elizabeth said she paid the deposit in two instalments of $5,000.00, on 29 December 2016 and 3 January 2017. She maintained this position in the absence of any documentary evidence in support (T167.34-36), although conceded she was unable to reconcile why the payments did not appear in the Estate balance sheet as at 30 June 2017 and deferred to her sister-in-law, Lynne (T146.6-30, 167.15-21, 28-32). Elizabeth contended it was only when it became apparent Max was not consenting to her transfer of the Property that she retrospectively allocated this deposit payment as part payment of agistment fees she owed to the Estate (T144.50-145.2).

Elizabeth accepted she would have made the deposit payment by direct transfer to the Estate’s bank account (T200.43-45), and confirmed the Estate only had the one account with NAB at the time (T200.43-45). However, when taken to statement for that account for the period 1 December to 30 December 2016, Elizabeth could not explain why the only credit was a one-off “Cheque Deposit” of $10,000.00, asserting “I think I’ve got the dates wrong in my affidavit” (T200.37).

I do not accept Elizabeth got the dates wrong. I am satisfied, to the point of actual persuasion on the balance of probabilities, that Elizabeth did not pay the deposit to the Estate in 2016 and 2017. Lynne was not taken to the issue of the deposit in her cross-examination and so provided no explanation. However, what is decisive in the Court’s conclusion is a copy of a tax invoice in evidence that Elizabeth herself had issued (on behalf of the Estate) to Rimwick Pty Ltd (“Rimwick”) for $10,000.00 on 16 December 2016:

Rimwick is a company owned by Elizabeth and Richard. They are also the company’s directors. Since the death of Verdun in 1992, Rimwick has been supplying services to the Estate, for which services it invoices the Estate. However, as is apparent from the above tax invoice (marked to the attention of “R Dowling”, which I infer to be Richard), Elizabeth also uses Rimwick to facilitate payment of agistment fees she personally owes to the Estate.

When taken by Mr Ellison SC to the December 2016 NAB bank statement (see paragraph [86] above) and to the Rimwick tax invoice —

However, I do accept Elizabeth’s evidence that following the unsuccessful mediation in October 2018, Elizabeth formed the view she should have paid the deposit and proceeded to do so (T146.36-37, 165.47-48). A bank statement for the Estate’s NAB account for the period 29 September to 31 October 2018 confirms two instalments of $5,000.00 were paid on 16 and 17 October 2018.

In addition to the oral submissions advanced by Counsel, the parties provided numerous written submissions before and after the substantive hearing when the matter was brought back before me for ancillary procedural rulings. These reflected the final amended versions of the various pleadings, which fulsomely set out the respective contentions about the contractual permutations contended for in relation to the Agreement and the Verbal Bid Agreement.

With no disrespect to the detailed way in which they have been put over time, Counsel’s submissions for each party may be distilled to a number of key propositions on the matters which finally emerged as those genuinely in dispute.

The case put forward by Mr Ellison SC on behalf of Max can be summarised as follows.

First, by virtue of the conduct of the siblings at the Private Auction, the Verbal Bid Agreement had varied the Agreement so that the bidding process would be conducted orally, replacing the requirement for written bids. A bid made orally was therefore a conforming bid under the Agreement. When pressed initially on whether the Verbal Bid Agreement was in fact a variation or a waiver of the requirement for written bids, Mr Ellison SC contended there was no practical difference as both amounted to the same thing, leading to the same conclusion (T244.9-19). However, in his subsequent written submissions of 11June 2020 Mr Ellison SC only referred to variation.

Second, Mr Ellison SC argued the Verbal Bid Agreement, insofar as it was a variation of the Agreement, was enforceable despite not being evidenced in writing. This was in response to an argument raised by Ms Cohen (see paragraph [110 ] below) regarding the application of s 54A of the CA.

Mr Ellison SC contended the Statute of Frauds had no application to the Verbal Bid Agreement. This was because the Agreement itself did not attract s 54A (T259.42-43, 260.8-13). Properly characterised, the Agreement was not a contract with regard to the sale or other disposition of land. It was simply an agreement between the parties as to how the bidding process or auction should take place. Mr Ellison SC submitted that if the original Agreement did not attract s 54A, then neither would a variation to it (T259.42-43).

Addressing the Verbal Bid Agreement specifically, Mr Ellison SC explained that what the parties agreed to do was no different from an ordinary auction (T257.1-5):

Mr Ellison SC accepted that once the bidding process results in a concluded agreement it must then be converted to a written contract for sale in order to be enforceable. However, it was only upon a concluded agreement that the provisions in s 54A were enlivened.

These first two arguments led Mr Ellison SC to contend, third, that the bidding process contemplated by the Agreement (as varied by the Verbal Bid Agreement) concluded at the Private Auction on 10 May 2016. There was no dispute that the highest bid was the verbal bid made by Elizabeth to purchase the Property for $2,500,000. There was also no dispute that Max and Elizabeth shook hands, with Max saying to Elizabeth words to the effect of “Congratulations, it’s yours”. Mr Ellison SC emphasised that it was this act of shaking hands (and, I infer, the absence of any challenge from Robert) that was sufficient for the Court to be satisfied that some sort of concluded agreement had been reached by the parties at the Private Auction (T244.11-16).

However, the fourth argument advanced by Mr Ellison SC was that Elizabeth then abandoned her verbal offer the very next day. Referring to the general principles on abandonment set out in Heydon on Contract (J D Heydon, Heydon on Contract, Law Book Co, 2019 [2.730]) and Unisys International Services v Eastern Counties Newspapers [1991] 1 Lloyds Rep 538 (“Unisys”), he submitted:

Mr Ellison SC contended this was a case of express or explicit abandonment (cf. Unisys at 544). In support, Mr Ellison SC referred to both acts and omissions by the parties which, taken together, confirmed Elizabeth’s abandonment of any contract arising from the Private Auction:

Fifth, and against the possibility the Court accepted Elizabeth’s Written Offer made on 18 May 2016 to purchase the Property for $2,300,000.00 was a valid bid under the Agreement, Mr Ellison SC contended again that the conduct of the parties indicated Elizabeth’s express or explicit abandonment of it:

Finally, Mr Ellison SC contended that by reason of delay, the Court in its discretion ought not in any event give Elizabeth relief in the nature of specific performance to enable her to purchase the Property at either price. Elizabeth’s cross-claim related to events some four and a half years ago. Mr Ellison SC maintained throughout the hearing that it was a reasonable proposition that nothing would have happened about the sale of the Property but for Max’s initiation of these proceedings. It took from May 2016 until the filing of the first cross-claim in March 2018 for Elizabeth to assert her right to a transfer of the Property pursuant to the Written Offer, and until May 2020 to assert her right pursuant to the Verbal Bid Agreement.

As both the prospective vendor (as executrix of the Estate) and purchaser under either possibility, it was emphasised that all the conduct to effect the transfer of the Property had always been in Elizabeth’s control. She should have got on with transferring the Property to herself in circumstances where it was a matter for Max to then seek to enjoin her from doing so. Mr Ellison SC did not accept any of the reasons put forward by Elizabeth as an explanation for her delay, as illustrated by the following exchange in cross-examination (T137.49-138.21):

It was also submitted that Elizabeth’s delay in asserting her rights had to be considered in the light of her approach to the Court in November 2016 for judicial advice to validate her purchase of the Property under the Agreement (see paragraph [48] above). That advice was declined by Lindsay J on 5 December 2016. However, Mr Ellison SC said Elizabeth provided no sensible explanation as to why, having gone to the trouble of approaching the Court and personally incurring the expense of that, she did not take up his Honour’s suggestion that she file a summons and claim that relief which she had sought by way of judicial advice to confirm her entitlement to purchase the Property for $2,300,000.

As to the prejudice suffered by the other parties from Elizabeth’s delay, in his written submissions of 15 October 2020 Mr Ellison SC contended Elizabeth:

The evidence was that the current total market value as at 13 July 2020 of the Property was $4,957,800.00. Mr Ellison SC emphasised the value of the Property had doubled from either amount Elizabeth had offered to pay for the Property. If there was any windfall to be gained, it was by Elizabeth and at the expense of the other beneficiaries. In such circumstances, the Court would not declare Elizabeth was entitled to purchase the Property at either price. Finally, he submitted that if Elizabeth was entitled to purchase the Property, it should be a condition of such relief that she pay the Estate interest to compensate it for the delay since the time when, on Elizabeth’s case, she must have been entitled to sell the Property to herself. Such interest should run from May 2016 to the date of payment to the Estate.

Ms Cohen’s first submission on behalf of Elizabeth was that the Verbal Bid Agreement did not vary or waive the Agreement in any way. Elizabeth’s evidence was that the oral bids were a means of speeding up the bidding process. However, Ms Cohen said the Verbal Bid Agreement and conduct of the parties at the Private Auction was of no legal significance (T252.36-42). Max could not unilaterally discharge the Agreement, and there was no evidence before the Court that Elizabeth or Robert ceased to rely upon the Agreement. The initial Agreement was still on foot, and all bids remained subject to the requirement to be put in writing (T250.10-17).

Elizabeth’s Written Offer made on 18 May 2016 was therefore a conforming bid under the Agreement, giving her an enforceable right to purchase the Property from the Estate for $2,300,000.00. Contrary to the position put forward by Max, Ms Cohen contended that if he had truly believed the Agreement varied, Max would not have sent his letter on 19 May 2016 which stated “No other offers were made… within the 48 hour period…”. I infer this is because the 48 hour period in which to make a counter bid was part of the written bidding process the Verbal Bid Agreement had allegedly dispensed with. In a similar vein, Ms Cohen submitted in her written submissions that Max would not have lodged the caveat on 27 May 2016 to protect his “equitable interest as a beneficiary”. Although not explained by Ms Cohen, I infer this to be because if the Written Offer was non-conforming (as alleged by Max), there was no basis for the Property to be transferred to Elizabeth.

Second, Ms Cohen submitted that the Verbal Bid Agreement was, in any event, unenforceable as it was caught by s 54A of the CA. In challenging the construction put forward for Max, Elizabeth contended an agreement to make oral bids was an agreement “in relation to a contract for the sale of land”, and the Verbal Bid Agreement therefore had to be in writing (T249.24-26). There was no dispute the Verbal Bid Agreement was never reduced to writing, and as such it was not capable of varying the Agreement.

Third, against the possibility the Court did not accept the preceding arguments and was satisfied the Agreement (as varied) was enforceable, it was contended for Elizabeth, in the alternative, that she was entitled to purchase the Property for $2,500,000.00. All parties agreed Elizabeth had been successful in making the highest bid at the Private Auction. Ms Cohen emphasised Elizabeth was willing to complete the purchase of the Property for $2,500,000.00 and referred, in support, to the decision of Green v Sommerville (1979) 141 CLR 594; [1979] HCA 60 (“Green”), in which the High Court unanimously held the respondent’s bona fide but erroneous construction of a contract was not fatal to a suit for specific performance where the respondent remained ready and willing to perform the contract on its true construction. I understood the argument to be that the Court would similarly not draw adverse conclusions from the fact Elizabeth had formed an earlier, albeit incorrect, view that she was entitled to purchase the Property pursuant to the Agreement, because she was ready, willing able to perform the contract that had arisen from the Verbal Bid Agreement.

Fourth, Ms Cohen submitted at no time had Elizabeth abandoned her Written Offer nor, in the alternative, her offer under the Verbal Bid Agreement. On either case, Elizabeth retained a present entitlement to enforce her right to a transfer of the Property. Responding to the matters raised by Max in this regard (see paragraphs [101] and [102] above), Ms Cohen submitted:

Next, Ms Cohen submitted the Court should not find Elizabeth guilty of delay, nor were there any other discretionary factors which would cause the Court to refuse Elizabeth’s application for a declaration that she was entitled to purchase the Property for one of the two possible amounts. This was because:

Finally, on the question of interest, Ms Cohen submitted that Elizabeth should not have to pay interest, but would do so if the Court required it. She noted that Robert did not ask for interest if the Property was sold to Elizabeth and that the delay, such as it was, was entirely due to Max’s conduct. Ms Cohen also drew attention to the decision of Sir John Leach V-C in the 1822 decision of Esdaile v Stephenson (1822) 57 ER 49 (“Esdaile”) as authority for the proposition that where in an action for specific performance the contract was silent on interest and the delay in completion was, among other things, the fault of the vendor, the court would not give the vendor interest so he did not benefit from his own wrong. By parity of reasoning, Max should not receive — through his share of the Estate — the benefit of interest where the delays were brought about by his own conduct.

Robert did not play a major role in these proceedings and the relief he sought mirrored Elizabeth’s. Mr Ellison SC foreshadowed an argument as to costs to the effect that Robert should have done no more than file a submitting appearance and should not have his costs. That is for another day.

What was clear was that, as the eldest sibling and having had limited involvement in the Private Auction (and subsequent events), Robert justifiably just wanted the matter resolved. In his affidavit evidence, Robert expressly stated his consent to Elizabeth enforcing her right under the Written Offer to purchase the Property for $2,300,000.00. However, in response to the arguments raised in the hearing, Mr Williams made the following submissions on behalf of Robert.

First, like the case advanced by Elizabeth, Mr Williams submitted that the Verbal Bid Agreement did not vary or waive the Agreement in any way. In his written submissions, Mr Williams contended the oral bids at the Private Auction were “preliminary bids” and “mere negotiations” that “never amounted to a rescission or abandonment” of the Agreement. Further, in closing submissions Mr Williams contended that to be enforceable, the Verbal Bid Agreement would have to be in writing by reason of s 54A of the CA and that this was the requirement for both a variation and waiver (T253.34-41). As the Verbal Bid Agreement was never put in writing, it was not enforceable and therefore was of no legal significance to the Agreement. Elizabeth’s Written Offer was the only conforming bid under the Agreement.

Second, Robert did not accept that Elizabeth had abandoned the Agreement. Mr Williams argued that abandonment applies when persons who are parties to a valid contract enter a further contract to terminate or abandon the first contract. In particular, he relied on Unisys and the judgment of Lord Justice Parker at 552, who quoted Lord Justice Goff in Allied Marine Transport Ltd v Vale do Rio Doce Navegacao S.A. (Leonidas D) [1985] 1 WLR 925 at 940:

Referring specifically to Elizabeth’s letter of 30 January 2018 and Max’s argument that Elizabeth’s proposal to sell the Property by public auction was her “walking away” from her Written Offer, Mr Williams emphasised that proposal was never accepted by Max or Robert. There was no consensus ad idem, preventing formation of a binding agreement and in such circumstances there could be no abandonment of the earlier Written Offer. Mr Williams also referred to Elizabeth’s evidence that her decision not to take up Lindsay J’s suggestion of commencing proceedings (see paragraphs [49]–[50] above) and her continued correspondence with Max was only ever an attempt to settle the matter and avoid litigation, as well as Elizabeth’s explicit denial in cross-examination that she had walked away from her Written Offer (T255.1-8).

Third, Mr Williams contended there were no discretionary factors upon which the Court would refuse to grant specific performance. Mr Williams challenged any suggestion of delay on Elizabeth’s part, emphasising in written submissions that:

It was said to be clear from the cross-examination of Max that Max was the real cause of the delays and, more importantly, that it was not open to Max to rely on the defence of laches because he didn’t suffer any prejudice (T254.38-41). Mr Williams went on to submit that all delays in the winding up of the Estate in fact benefitted Max, because until final distribution of the Estate:

There was no dispute between the parties that the Agreement became valid and binding between them after Max signed his counterpart copy on 23 February 2016. Nor did Max and Robert put any submission against Mr Ellison SC’s proposition that the Agreement also included the Estate Position Statement. For the purposes of these proceedings, nothing turns on whether it did or it did not. There was also no dispute between the parties that the Verbal Bid Agreement was not in writing.

What impact, if any, the Verbal Bid Agreement had on the Agreement turns, in the first place, on whether the Agreement was a “contract for the sale or other disposition of land or any interest in land” for the purposes of s 54A(1) of the CA so as to have to be in writing to be enforceable. It will be recalled that the Agreement not only governed how the bidding was to be conducted, but also required the successful bidder to enter into a contract for sale on certain terms. While there was some debate between the parties about the draft contracts prepared by Ms Doherty, no party suggested that the contract to be signed by the successful bidder under the Agreement had been insufficiently described or could not be identified so as to render the Agreement uncertain.

The fact that the Agreement not only governed the method of bidding but also required the successful bidder to enter into an identifiable contract for sale of land is why the Court has concluded, contrary to Mr Ellison SC’s submissions, that while the Agreement may not be a “contract for sale” it is a contract for the “disposition of land”.

Although I am not strictly bound by it, in my respectful view the question has been authoritatively determined by the decision of the Full Court of the Supreme Court of Queensland in Wright v Madden [1992] 1 Qd R 343 (“Wright”). The reasoning of that decision, in my respectful opinion, is undoubtedly correct. In that case there were oral terms for the conduct of an auction which required the successful bidder to execute a written sale agreement. The successful bidder refused to execute any written sale agreement.

The Full Court held that an oral agreement that the successful bidder at an auction should execute a written sale agreement was unenforceable because it was required to be in writing as a contract for the disposition of land. The facts in the present case are indistinguishable from those in Wright, with the exception that the Agreement is in writing. Williams J (with whom Ryan and Dowsett JJ agreed) concluded (at 349–350):

The fact that the Agreement was a contract for the disposition of land is amply demonstrated by the relief which Elizabeth seeks, which the parties accepted was in substance specific performance of an entitlement to purchase the Property. While the Agreement is not itself a contract for the sale of land, it does require the successful bidder to enter into a contract for the sale of land. Quite apart from the decision in Wright, there is binding authority in this state that such an agreement must be writing to be enforceable: Powercell Pty Ltd v Cuzeno Pty Ltd (2004) BPR 21,429; [2004] NSWCA 51, affirming a decision of Campbell J (as his Honour then was) in Powercell Pty Ltd v Cuzeno Pty Ltd (2003) BPR 21,385; [2003] NSWSC 600.

In the decision at first instance, Campbell J said (emphasis added):

In affirming his Honour’s decision, Giles JA (with whom Meagher and Santow JJA agreed), said (emphasis added):

The Agreement in this case is precisely of the kind referred to in the last paragraph just quoted, being a contract whereby one of the parties, the successful bidder, became obliged to acquire the Property by entering into the Sale Contract.

The next issue is whether the Verbal Bid Agreement is binding. One aspect of this question is whether the Verbal Bid Agreement is a variation of the Agreement (in which case it must itself be in writing in order to be effective — see paragraph [133] below) or a waiver of some part of the Agreement (in which case it does not have to be in writing to be effective). Given the difference in outcomes, I do not accept Mr Ellison SC’s characterisation that it did not matter whether the Verbal Bid Agreement was characterised as either a variation or a waiver.

As the learned author of Heydon on Contract observes at [5.560], ““Waiver” is one of the slipperiest terms in the law”. Understanding the term in the present case to refer to the promise that some term of an existing contract will not be enforced or an acquiescence to the non-performance of a term of an existing contract, it is clear that the Verbal Bid Agreement does far more than that. It purports to change the basic mechanism for the conduct of the sale from one thing (written bids) to something quite different (verbal auction). It is not a waiver: it is a variation.

The view to which the Court has come is supported by the analysis of this type of problem in the context of the Statute of Frauds by Barrett J (as his Honour then was) in Radoman Pty Ltd v Vexapu Pty Ltd [2008] BPR 24,903; [2008] NSWSC 8. In that case, his Honour said (emphasis added):

There can be no doubt that, to adopt his Honour’s language in paragraph [36] quoted above, the effect of the Verbal Bid Agreement (if enforceable) is to prevent the Agreement being enforced in its unaltered form, because the latter specifies a completely different method of performance of the conduct of the sale to that set out in the former.

It follows that the Court accepts Ms Cohen’s and Mr Williams’ submissions that the purported variation of the Agreement by the Verbal Bid Agreement is unenforceable for want of writing, and that the parties’ rights, such as they are, continue to be governed by the Agreement. This also means that the Court accepts their submission that Elizabeth’s Written Offer was made in accordance with the terms of the Agreement so that, in the absence of any subsequent bids within the following 48 hours, on and from 9am on 20 May 2016, Elizabeth was bound to purchase the Property for $2,300,000 in accordance with the terms of the Agreement.

Heydon on Contract summarises the principles in relation to abandonment (at [2.730]):

The Court accepts Ms Cohen’s and Mr Williams’ submissions as to why the Agreement was not abandoned. However, that acceptance may be encapsulated in two fundamental propositions.

First, it must be recalled that the Agreement was tripartite. Whatever Elizabeth offered to do or did not do was, as the record of correspondence set out in paragraphs [41]–[64] above shows, directed towards Max directly or through his solicitors. As Robert’s response set out in paragraph [63] above demonstrates, Robert never did anything which could constitute express or implied agreement or acquiescence to the abandonment of the Agreement. On the contrary, he adhered to it and, in these proceedings, has steadfastly maintained his support for Elizabeth’s position that she is entitled to purchase the Property in accordance with the Agreement for $2,300,000.

Second, insofar as anything Elizabeth offered to do or said she would do was contrary to asserting her rights under the Agreement, I accept that these were all matters put to Max in the hope that Max would agree, so that the need for a further legal dispute would be avoided. Max never agreed nor acquiesced in anything Elizabeth put to him.

The Court has some sympathy for Elizabeth’s predicament when Max first opposed her purchasing the Property and said he wanted a public auction (see paragraph [47] above), but when confronted with a proposal for a public auction did not give his solicitors instructions to consent to that (see paragraph [55] above), and later again said he wanted the Property to stay in the family and have an opportunity to bid for it (see paragraph [62] above). Looking at the correspondence as a whole, I am left with the impression that Max’s approach was often to oppose reflexively whatever Elizabeth proposed from time to time or just try to delay any sale.

The Court is therefore satisfied that, viewed objectively, the three parties to the Agreement never manifested expressly, or impliedly, a joint intention that the Agreement be abandoned.

Insofar as Max has raised a defence of laches to Elizabeth’s assertion of her rights under the Agreement, the Court accepts Ms Cohen’s and Mr Williams’ submissions that the evidence rises no higher than “mere delay” on the part of Elizabeth. It is a hornbook proposition that “mere delay” does not make out the equitable defence of laches.

The Court accepts that Elizabeth’s delays — although misconceived in the sense that she did not require anything further from any of the other parties and should simply have proceeded to purchase the Property in accordance with the Agreement (leaving it to Max to seek to enjoin her if that is what he wished to do) — are at least explained by her understandable desire to try to reach an accommodation with Max and avoid further litigation and legal expenses. I cannot help but think that matters would have come to a head much faster if Elizabeth had retained a solicitor to advise her generally from the time of the Agreement.

Max has not been able to point to any adverse change of position or prejudice which he (or anyone else) has suffered by reason of Elizabeth’s delay other than that he has been kept out of his share of the Estate. This last aspect is, in the Court’s view, resolved not by upholding the defence of laches, but by acceding to Max’s submission that in now purchasing the Property in reliance on her rights under the Agreement, Elizabeth must pay the Estate interest. I deal with this in paragraphs [146]– [159] below.

I accept Ms Cohen’s submissions set out in paragraph [113(4)] above as to why, contrary to Mr Ellison SC’s submissions, the “windfall” to Elizabeth in the increased value of the Property is not a reason for the Court to exercise its discretion to deny Elizabeth relief. What is being given effect to is the Agreement, which the parties accepted was valid and binding. No one has suggested that any vitiating factors were involved when the parties entered into the Agreement. Furthermore, it is again relevant in supporting this conclusion that equity will be done by requiring Elizabeth to pay interest.

However it will ultimately be framed, the relief Elizabeth seeks is equitable. It is therefore discretionary and can be granted upon conditions. Such conditions are often directed to ensuring that the person seeking equity does equity. What that should be is necessarily fact-specific and is a matter in which the Court has a degree of latitude (subject to being exercised judicially and for a proper purpose).

In seeking to assert her right to purchase the Property under the Agreement, Elizabeth must do equity by compensating the Estate by a payment of interest for the delay the Estate has suffered by her not acting on the Agreement in accordance with its terms, as the Court has found she was and is entitled to do. In reaching this conclusion, I reject Ms Cohen’s submission that Elizabeth’s inability to complete was due to Max’s conduct so that interest should not run. While Elizabeth’s reluctance to press matters into litigation is entirely understandable given the history of the Estate, the fact remains that she was entitled to, and should have got on with, the sale of the Property to herself for $2,300,000 in accordance with the Agreement.

It is convenient at this point also to set out the two reasons why Ms Cohen’s reliance on Esdaile is misconceived.

First, whatever was said in that case about what should happen where the contract sought to be enforced made no provision for interest was obiter dicta. In his three paragraph judgment the learned Vice-Chancellor expressly records that the contract in issue had a provision for the payment of interest and the court required that provision to be honoured.

Second, the first premise of Ms Cohen’s reliance on Esdaile was that the Agreement made no provision for interest. That is true as far as it goes but is of no assistance in the present case. That is because the Sale Contract which Elizabeth was bound to enter under the Agreement did contain a provision for interest which I set out below.

This then leaves the questions of the interest rate and the period for which interest should run.

The interest rate and method of calculation should be that provided for in the Sale Contract prepared on Elizabeth’s instructions by Ms Doherty and which she should have entered into under the Agreement. The special condition as to interest was:

On the question of the time for which interest should run, I do not accept Mr Ellison SC’s submission that interest should run until the Property is sold to Elizabeth pursuant to the outcome of these proceedings. In my view equity requires Elizabeth to compensate the Estate for that delay which is solely referable to her failure to exercise her rights under the Agreement.

In the events which happened, Elizabeth’s entitlement to purchase the Property under the Agreement for $2,300,000 arose at 9am on 20 May 2016, being 48 hours after she gave Max her bid and with no subsequent bid being received (Robert taking no point that he did not receive the bid at the same time or at all). The Agreement stated that the Sale Contract “will provide that settlement will take place within four weeks of acceptance of a winning bid”. Had she complied with the Agreement, Elizabeth would have entered into the Sale Contract on 20 May 2016 and settled four weeks later on 17 June 2016. Interest should run from the latter date.

However, consistently with the view that I have taken that she should have moved to sell the Property to herself in accordance with the Agreement and left it to Max to commence proceedings to restrain her, it would be inequitable for her to continue to pay interest past the point when Max definitively denied that she was entitled to act on the Agreement. This is because at that point the Estate was suffering a delay not solely because of Elizabeth’s inaction. In the events which happened, Max did this when he filed his defence to Elizabeth’s cross-claim on 23 April 2018. That should be the terminal date for Elizabeth’s liability to pay interest to the Estate. Interest is payable for the period on the entire purchase price because the Court has found that Elizabeth did not pay the deposit until later in 2018.

Finally, I should record three matters which I have not overlooked in reaching my conclusions on interest and more generally.

First, I have considered whether interest should not run for that period when Max’s caveat was registered on the Property (see paragraph [40] above). I have rejected this because it is Elizabeth’s inaction which caused delay during that period. Had she been advised to issue a lapsing notice, there is every chance the present dispute would have been brought to a head at that time.

Second, the fact that Robert has said that he does not require Elizabeth to pay interest is irrelevant. That is a matter between him and Elizabeth. The Court will grant relief to Elizabeth on the terms which the Court considers equity requires in the interests of the Estate.

Third, by her inaction, Elizabeth was in breach of the Agreement. However, I accept Ms Cohen’s submission that this was not deliberate but was the result of Elizabeth’s erroneous views about her rights. Therefore, the fact of her breach is not a matter to be weighed against her in the exercise of the Court’s discretion. Furthermore, and importantly, no other party (in particular, Max) has purported to accept any breach on her part and accordingly sought to terminate the Agreement. The Agreement therefore remains on foot.

The Court will give the parties an opportunity to bring in orders to give effect to these reasons, including to make good Elizabeth’s undertaking to the Court that she will file proper accounts for the Estate. Looking at the matter realistically and with a view to reducing costs, the parties should now attempt to agree a suite of orders, including as to the costs of these proceedings, that will enable the Property to be sold to Elizabeth for $2,300,000 (together with the interest calculated in accordance with paragraphs [154]–[155] above) and the Estate to be finalised. Those orders should include provision for the sale of the Property to Elizabeth to be completed with 28 days of the orders being made. Elizabeth should be entitled to set off, from any amounts she must pay to the Estate, her interest as a beneficiary to the extent that can be practicably done.