Clinch v Brown

The late Donald and Shirley Clinch had an arrangement in relation to what became their matrimonial home, a property located in Emerald Beach, New South Wales. The issue in these proceedings is what was that arrangement? Without disrespect, I shall refer to the various members of the Clinch family and other protagonists by their given names.

Donald was (and remains) the registered proprietor of the property. It was the Clinch family home. On 22 September 1976, Donald and Shirley executed a memorandum of transfer (duly stamped and in registrable form) in relation to the property between himself as transferor and Shirley as transferee. The transfer recorded consideration of $14,500. The present dispute arises from the fact that the transfer was never registered, but continued to be held by Donald and Shirley’s solicitor, Mr Peter Sames.

Shirley died on 23 April 2018. The plaintiff is Ms Stephanie Clinch who is Shirley’s daughter and only surviving child. In these proceedings Stephanie contends that, in equity, the property is an asset of Shirley’s estate and should be transferred to her (Stephanie) because the property was left to her by Shirley subject only to a life estate in favour of Donald.

The first and second defendants are the executors of Shirley’s estate and have no personal interest in estate or the proceedings. They have entered a submitting appearance. There was no dispute that, the executors having declined to bring these proceedings, Stephanie could do so as a beneficiary of Shirley’s estate.

Donald was the third defendant. Donald died on 13 October 2023. At the hearing, I made orders reconstituting the proceedings so that the third defendant became Donald’s daughter, Ms Fiona Scanlon, in her capacity as executor of Donald’s estate (and having originally been Donald’s tutor in the proceedings). If Stephanie’s claim is not successful, the property forms part of Donald’s estate.

By her statement of claim filed on 27 June 2023, the primary relief sought by Stephanie is this declaration:

Consequential orders are sought to the effect that the executor defendants lodge the transfer for registration and that they then transfer the property to Stephanie pursuant to the terms of Shirley’s will.

The parties accepted that whether or not the declaration could be made depended upon the terms of any agreement between Donald and Shirley. The agreement was not in evidence and, regrettably, neither Donald (who before his death was legally incompetent) nor Shirley was available to give evidence about it. Neither party called Donald and Shirley’s solicitor, Mr Sames, who had acted for them over many years, including in relation to this transaction.

Stephanie contended that the Court should infer, from such evidence as there was, that the agreement was an unconditional agreement for the transfer of the property from Donald to Shirley, such that as at her death Shirley would have been entitled to an order in the nature of specific performance. I describe it that way because the precise form of such an order is not presently relevant, but its effect would be to require delivery of the transfer currently held by Mr Sames to the executor defendants for them to attend to its registration.

Fiona’s primary argument was that Stephanie had failed to satisfy the onus of proof to establish the terms of any agreement between Donald and Shirley to demonstrate that Shirley did have the whole of the equitable interest in the property at her death. Fiona’s case was that if any agreement can be found on the evidence, it was that the property would only be transferred to Shirley if Donald did not survive cancer surgery he underwent in 1976 or subsequently predeceased Shirley. These conditions not having been satisfied, Donald remained the indefeasible registered proprietor of the property at the date of his death because any such agreement had come to an end upon Shirley predeceasing Donald. It followed that the property now formed part of Donald’s estate.

Pursuant to a further amended defence filed in Court on 23 July 2024, Fiona also contended that Stephanie’s claim to the property is time barred by ss 27(2) and 36 of the Limitation Act 1969 (NSW) (LA) and is otherwise extinguished by reason of s 65 of the LA. A defence of laches is also relied upon.

Stephanie bore the onus of proof to establish the terms of any agreement that would give rise to the equitable interest the subject of the declaration. That onus was to the civil standard, being the balance of probabilities. However, satisfaction of that standard is not a merely probabilistic exercise. The Court must feel an actual satisfaction of the existence of any particular fact.

The facts of which the Court can be well satisfied in this case are few, like the surviving tesserae of a mosaic with many pieces missing. Learned counsel of diligence and ingenuity have pored over those remaining pieces in an effort to persuade the Court how the pieces should be arranged and, by inference, the blanks filled in, in favour of their respective clients. Notwithstanding the best efforts of their lawyers, neither party can make all of the pieces fit neatly into the picture for which each contends.

In order to demonstrate that Shirley held the whole of the equitable estate in the property at her death (which I have taken to include being free of any charge or lien in respect of an unpaid purchase price), Stephanie must persuade the Court to the level of actual persuasion on the balance of probabilities that Shirley would have been entitled to an order to give effect to whatever the arrangement was between her and Donald at the date of Shirley’s death.

For the reasons which follow, the Court has found that up to November 1981 there was a consensual arrangement in place between Donald and Shirley that the transaction between them should not be completed (meaning the tender or forgiveness of the consideration and the release of the transfer for registration – although the result is the same even if completion is confined to release of the transfer for registration). Stephanie has been unable to satisfy the Court that the arrangement not to complete the transaction changed before Shirley’s death. In other words, Stephanie has not been able to satisfy her onus to establish the terms of the agreement as at Shirley’s death, such that the Court cannot be satisfied that Shirley had the whole of the equitable estate in the property at the date of her death. Stephanie’s claim must therefore fail.

Given this outcome, it is not necessary for the Court to consider Fiona’s arguments based on the LA and laches.

I also record by way of introduction that the factual and legal analysis which follows proceeds by reference to the practices which applied before e-conveyancing, PEXA and the abolition of paper titles. Neither party suggested the Court should proceed otherwise.

Mr N Bilinsky of Counsel appeared for Stephanie. Mr A Fernon of Senior Counsel with Ms L Cooper-Hackman of Counsel appeared for Fiona. The Court is indebted to them and their instructors for detailed written and oral submissions, all of which I have taken into account. No disrespect is intended to their industry insofar as in what follows I refer only to those arguments which I consider to be potentially dispositive.

The Court finds the following facts. Except where indicated otherwise, they were either uncontroversial or not seriously contestable, including being evidenced by contemporary records. However, where reference is made to affidavit evidence of conversations or verbal instructions, it is to record the fact of the evidence rather than a finding that the conversation occurred or the verbal instructions were given.

Donald and Shirley married in 1966. Donald had two children from his previous marriage, Fiona and Peter. Donald and Shirley had one child together, Stephanie. The property was Shirley and Donald’s matrimonial home, and Stephanie’s childhood home. The house on the property was built by Donald himself, with Donald signing the building application as owner/builder on 27 April 1976. At all times up until the date of his death, Donald remained the sole registered proprietor of the property.

Donald was diagnosed with melanoma in 1973 or 1974.

In 1976 Donald was diagnosed with bowel cancer and underwent surgery.

Peter was called by Fiona in support of her case that any agreement for Donald to transfer the property to Shirley had always been conditional upon Donald predeceasing Shirley.

Both in his affidavit and during the course of cross-examination, Peter deposed that he recalled a discussion in 1973 or 1974 in which his father told him that he had “skin cancer”. He said he also had a further telephone discussion with his father in 1976 in which his father told him that he (Donald) had bowel cancer. Peter’s evidence was that he recalled a telephone conversation when Donald was in hospital in Brisbane after his surgery in which Donald had informed him that he had decided the property should go to Shirley if he did not survive his surgery because she was a “good wife”.

It was put to Peter in cross-examination that his evidence was unreliable because in 1976 he was 15 years old and that he had nothing other than his memory in relation to the alleged conversations. Peter accepted that he only had his memory but adhered to his evidence, saying that because at the time he had been separated from Donald for a long time, he listened carefully when they did communicate. He also said that he had only “very recently” become aware of what was in Donald’s will (see [69] below).

On 7 September 1976, Mr Sames wrote a letter to Donald only, addressed to “D J Clinch & Co, Real Estate Agents” with the subject line “re: Sale to Mrs Clinch” and in these terms:

The enclosed Notice of Valuation was issued to Donald care of Mr Sames’ office on 2 September 1976. It described Donald as the holder of the interest being valued, under the heading “improvements” listed “vacant land” and identified the “nature of interest” as “Owner of the fee simple of the land, with vacant possession”. The date of the valuation was 28 June 1976 and the value of the interest was $14,500.

The Court infers from the two preceding paragraphs:

On 22 September 1976 the transfer, being in the familiar form required to be registrable under the Real Property Act, 1900 (NSW) was signed by Donald, as transferor, and Shirley, as transferee. Mr Sames witnessed both signatures. The transfer recorded that the transfer was “in consideration of … $14,500 (the receipt whereof is hereby acknowledged), paid to the transferor by Shirley Clinch…”.

For the reasons set out in [104] below, I do not accept Stephanie’s submission that by reason of the acknowledgment in the transfer the Court should find that the consideration of $14,500 was paid by Shirley to Donald.

The transfer bears a duty stamp assessed at $1, although the date on which it was stamped is not legible. The parties accepted, correctly in my respectful view, that $1 was nominal duty which established that the SDO must have been satisfied that the transfer was pursuant to a written agreement between the parties which had been stamped with ad valorem duty. While nothing turns on it, there can be no doubt that the practice of the time was that the Registrar General’s office would not accept an unstamped transfer for lodgement. Mr Sames has retained the transfer in his possession and it has never been registered. There was no dispute that at all material times Mr Sames has also held (and holds) the original certificate of title in his possession.

Based on the fact that Mr Sames witnessed both signatures and the letter set out in [33] below, the Court finds that Mr Sames was acting for both Donald and Shirley in relation to the transaction. I do not accept Stephanie’s submissions insofar as they refer, for example, to the transfer being held by “Shirley’s solicitor” insofar as that is intended to imply something legally significant, for example, that the transfer had been constructively delivered to Shirley by being left in the possession of Mr Sames.

The next document in evidence (1981 letter) is of essential importance (not least because of the paucity of documentary evidence generally) and also warrants being set out in full. On 11 November 1981, Mr Sames sent a letter addressed to both Donald and Shirley with the subject title of “Transfer of [the property] from D. Clinch to S. Clinch”:

This letter is the critical piece of objective, contemporaneous evidence. It is considered at greater length at [117] to [123] below. However, for the purposes of the present narrative it is sufficient to record that, for the reasons set out in [117] to [123] below, the Court:

Fiona also called Ms Cheryl Midavaine in support of her case. She was not cross-examined. Ms Midavaine worked for Donald as a secretary from 1990 to 1997 at LJ Hooker Woolgoolga and said that she became close to Donald and Shirley. Ms Midavaine deposed in her affidavit that Donald had told her he thought he would die before Shirley and that he had organised his affairs so that Shirley was provided for if he predeceased her with “arrangements in place that if I die first my home will go to Shirley” (there being no dispute that “my home” referred to the property). Ms Midavaine also deposed that Donald had expressed his desire for all of his children to be provided for. She says that Donald informed her that anything in Shirley’s name would go straight to Stephanie and anything in his name would be divided between his other children.

Mr Sames prepared a will for Shirley which she made on 15 August 2003. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS. The Court treats as a matter of common knowledge (see Evidence Act 1995 (NSW), s 144 and still informally referred to as judicial notice) the solicitor’s practice of identifying the author of a document by their initials. Clause 3 of that will provided for Donald’s right to reside:

I accept Mr Bilinsky’s submission that by reference to Donald’s right to reside, Shirley must have thought the property was hers to deal with in that will. The Court has no evidence that enables any reconciliation between such a belief and Mr Sames being involved (as appears to have been accepted by both parties) in drafting that will. However, this does not really go anywhere, because the same conclusion must be drawn about Donald’s state of mind in relation to his will (see [40]-[41] below). In other words, and with no disrespect intended, what Donald and Shirley subjectively thought about who “owned” the property does not assist the resolution of these proceedings.

The next piece of evidence was a document dated 21 February 2005 which the parties accepted came from Mr Sames’ file and was in Donald’s handwriting (2005 instruction):

From its presence on Mr Clinch’s file and its terms, I find that the 2005 instruction was given to Mr Sames on or about 21 February 2005. I consider the effect of the 2005 instruction in [125] below.

Mr Sames prepared a will for Donald which he made on 25 August 2006. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor’s practice of identifying the author of a document by their initials. That will did not contain a specific devise of the property, but included the debt forgiveness:

The debt forgiveness is consistent with Fiona’s case theory that the agreement was subject to Donald predeceasing Shirley: the transfer would be registered because the obligation to pay the consideration would have been forgiven, there being no dispute that the transfer could have been registered after Donald’s death. However, the parties also accepted that the assumptions as to ownership of the property which informed Donald’s right to reside in Shirley’s will and the debt forgiveness in Donald’s will could not be legally reconciled.

Mr Sames prepared a will for Shirley which she made on 29 February 2008. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor’s practice of identifying the author of a document by their initials. This will repeated Donald’s right to reside.

Mr Sames prepared a will for Donald which he also made on 29 February 2008. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor’s practice of identifying the author of a document by their initials. This will repeated the debt forgiveness.

Each of the wills referred to in the preceding two paragraphs was witnessed by the same two persons who described their occupation as clerk and I infer worked in Mr Sames’ firm. The two wills are not on their face mirror or mutual wills. Nevertheless, I find it inconceivable that a married couple would not have attended their solicitor’s office to sign wills at the same time, although the evidence does not permit any inference to the effect that they were in the same room when each signed their will or that they knew the content of each other’s wills. The copies of the two wills in evidence have each been ruled through on their first and last pages with the word “revoked” written over those pages in hand.

Mr Sames prepared a will for Shirley which she made on 13 October 2015. This is the will which has been admitted to probate. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor’s practice of identifying the author of a document by their initials. Again, this will repeated Donald’s right to reside.

Mr Sames prepared a will for Donald which he also made on 13 October 2015. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor’s practice of identifying the author of a document by their initials. Again, this will repeated the debt forgiveness.

As with the 2008 wills, each of the wills referred to in the preceding two paragraphs were witnessed by the same two persons who described their occupation as clerk and I infer worked in Mr Sames’ firm. The two wills are not on their face mirror or mutual wills. Nevertheless, I again find it inconceivable that a married couple would not have attended their solicitor’s office to sign wills at the same time, although the evidence does not permit any inference to the effect that they were in the same room when each signed their will or that they knew the content of each other’s wills.

On 15 January 2016, a Land Tax Assessment Notice was issued to Donald, which recorded that he had 100% ownership of the property and that it was exempt from land tax as his principal place of residence.

On 21 January 2016, a Land Tax Assessment Notice was issued to Shirley. This notice recorded that Shirley had interests in two properties but made no reference to the property. The notice recorded Shirley’s interests as follows:

Shirley died on 23 April 2018.

Mr Sames was one of the executors named in Shirley’s October 2015 will. On 4 May 2018, Mr Sames sent a letter to the executor defendants, among other things renouncing his executorship. This letter included a summary of Shirley’s assets which did not mention the property:

On 21 May 2018, Donald sent this email to Mr Sames:

Ms Denise Kelly was called in Fiona’s case. She was cross-examined. Ms Kelly is an accountant who had been involved in providing accounting services to Donald since 1997.

Ms Kelly informed the Court that she was involved in completing Shirley’s tax returns and provided her with accounting services after Mr Clinch transferred 90% of his successful property development in the Surfside Plaza at Woolgoolga into Shirley’s name as a tax saving measure. Ms Kelly deposed that Shirley never provided her instructions in relation to the Surfside Plaza or in relation to any other business or financial matter. All such instructions came to her from Donald. Ms Kelly also deposed that on a number of occasions Donald told her that he had built the house on the property himself and that he had “arranged for [the property] to go to Shirley if I die before her”. She also deposed that in her “regular meetings with Mr Clinch and annual meetings with Mrs Clinch (at which Mr Clinch was also present)”, neither of them ever suggested that the property was Shirley’s and not Donald’s.

On 23 May 2018, Mr Sames sent an email to Ms Kelly with the subject heading ‘Estate of the Late Shirley Clinch’:

On the same piece of paper from Mr Sames’ file on which the 2005 instruction appears, there is this further entry which the parties accepted was in Donald’s handwriting (2018 instruction):

The date under Mr Clinch’s signature is obviously an error. The 2018 instruction – which can have no legal effect on whatever were Shirley’s rights in the property at the date of her death - was relied on by Fiona as further corroboration that the agreement between Donald and Shirley was for the transfer to be registered only if Donald predeceased Shirley.

On 22 June 2018, Donald sent a letter to Mr Sames not referring to the property and stating:

On 29 June 2018, Donald sent a letter to Mr Sames titled, ‘My Will’ and which included:

Mr Sames prepared a will which Donald made on 4 July 2018. The proximity of that date to the letter in the preceding paragraph, and the “PS” document reference on the will satisfy me that it was Mr Sames who prepared the will. He was not an executor under the will, but was one of the witnesses. As might be expected, it did not include the debt forgiveness. While there were specific devises of some properties to Stephanie, the residue of the estate (including, on Fiona’s case, the property) was divided equally between Donald’s children, being Fiona, Stephanie and Peter.

On 30 July 2018, probate was granted in respect of Shirley’s estate. The inventory of assets made no reference to the property.

On 8 October 2018, Ms Kelly sent an email to Mr Sames, copied to Donald, recording a meeting she had with Donald that day in which the possibility of a new will for Donald was discussed, including a specific devise of the property to Fiona and Peter. Ms Kelly deposed that at that meeting Donald was clear that the property was his asset.

On 4 June 2019, Donald sent a letter to Mr Sames:

Donald made a further will on 4 October 2019. Again, on Fiona’s case, the property fell into the residuary gift.

On 29 October 2020, Mr Sames sent an email to Ms Kelly, stating:

Lot XX in both places is a reference to the property.

On 30 October 2020, Ms Kelly sent a letter to Donald, which summarised his assets as including the property.

On 2 November 2020, Donald sent Mr Sames a short family history “for consideration when putting together a new will for me”.

Mr Sames prepared Donald’s final will, which was made on 18 December 2020. The proximity of that date to the letter in the preceding paragraph, and the fact that Mr Sames prepared Don (and Shirley’s) previous wills, satisfy me that it was Mr Sames who prepared the will. He was not an executor under the will, but was one of the witnesses. While there were specific devises of some properties to Stephanie, the residue of the estate (including, on Fiona’s case, the property) was to be divided among various beneficiaries.

Ms Kelly’s evidence included a detailed file note (which the Court accepts as accurate) that she had made of a two hour meeting at the property on 10 October 2022 which she attended with Donald, Stephanie and Mr Michael Scheib (Stephanie’s solicitor). The note includes:

Ms Kelly said during cross-examination that this was the first time that she had made a file note and that she had made no file notes of the occasions she had met with Shirley.

Ms Kelly also gave evidence about a meeting on 20 October 2022 at Mr Sames’ office attended by her, Fiona and Mr Sames at which Donald was shown the paper with the directions on it and Donald saying “This doesn’t matter anymore; we didn’t go ahead with it. It was only something I did in case I died before Shirley. It’s nothing now, the property is still mine.”

Similarly, Fiona gave evidence of a meeting on 24 February 2023, attended by her, Donald and Mr Sames when Donald was shown the paper again and said “That was way long ago and now irrelevant. I survived.”

On 7 March 2023, Mr Sames sent an email to Revenue NSW, stating:

On 8 March 2023, Mr Sames wrote to Stephanie’s solicitor to inform him that he was ceasing to act for Shirley’s estate and for Mr Clinch in his personal capacity:

On 13 March 2023, Revenue NSW responded to Mr Sames:

On 11 April 2023, Dr Vaibhav Tyagi provided a report in support of an application to NCAT to provide guardianship powers to Fiona over Donald due to his declining mental capacity. The report records that Donald had been diagnosed with vascular dementia in 2021 and that “there has been progressive decline in his memory for more than 2 years”.

On 22 June 2023, Stephanie commenced these proceedings.

On 17 July 2023, Fiona’s solicitor, Mr Vincent Butcher, met with Donald at the retirement home where Donald was living. Mr Butcher’s affidavit records that “Mr Clinch presented very well” and that “based on my observations of Mr Clinch, it appeared to me that he had a good recollection of the 1976 Transfer, why he made it and the condition upon which he made it”. Mr Butcher’s contemporaneous file note of his meeting with Donald included:

Donald died on 13 October 2023.

There can be no doubt that the only living person who may now be able to give direct evidence relevant to these proceedings is Mr Sames. However, neither party called him to give evidence.

Mr Bilinsky tendered a chain of emails between his instructing solicitor and Mr Sames, the tenor of which makes it clear that Mr Sames was ultimately unwilling to assist the parties.

On 1 March 2023, Mr Sames sent an email to Mr Scheib, Stephanie’s Solicitor, stating:

On 6 March 2023, Mr Scheib responded to Mr Sames’ 1 March 2023 email.

As I have recorded in [75] above, Mr Sames ceased to act on 8 March 2023. The next day Mr Scheib sent the following email:

Mr Scheib’s questions were undoubtedly pertinent. However, they did assume that what had happened had been done on Don’s instructions alone. As I explain in [117] below, I cannot accept that was the case up to and including the date of the 1981 letter.

On 15 March 2023 at 12:45pm, Mr Sames responded to Mr Scheib’s email sent on 9 March 2023:

Seven minutes later, on 15 March 2023 at 12:52pm, Mr Scheib responded to Mr Sames’:

There is no evidence of further correspondence between Mr Sames and Mr Scheib.

Mr Bilinsky submitted that the emails set out at [85] to [88] above, combined with the fact that it was only Fiona that had Mr Sames’ file in relation to Donald and tendered evidence from that file, demonstrates that the Court should, applying Jones v Dunkel, infer that Mr Sames’ evidence would not have assisted Fiona’s case. In addressing objections to evidence, Mr Fernon SC foreshadowed a similar submission against Stephanie.

The Court can only treat the absence of Mr Sames as a neutral factor, for these reasons:

It is convenient to consider these two topics together. The parties disagreed whether the Court could find, relying on the acknowledgement in the transfer, that the consideration of $14,500 had been paid.

Fiona challenged whether the consideration referred to in the transfer had actually been paid. Without consideration being paid, then Mr Fernon SC submitted that the arrangement between Donald and Shirley could only be characterised as a gift of the property to Shirley. As the gift was never perfected by Shirley becoming the registered proprietor of the property, the gift would fail with Shirley’s death.

Mr Fernon SC argued that the debt forgiveness in Donald’s wills prior to Shirley’s death purporting to release her from paying any debt in relation to the sale or construction of the property indicates that Shirley did not pay the consideration to Donald. It was contended that the “release” could only refer to the consideration for the property.

Mr Fernon SC also submitted that the Court can take judicial notice that in NSW, conveyancing practice in the 1970s was that the purchase price was paid at the time of settlement of the conveyance and the transfer prescribed and required to effect registration was a document that was prepared and signed prior to settlement. Each side produced conveyancing texts of the relevant time which demonstrated that:

This process necessarily involved the vendor executing a transfer that formally acknowledged a receipt of the purchase price before the purchase price had in fact been paid. As part of the settlement process, the transfer was handed to the solicitor for the vendor to hold in escrow, pending receipt of the purchase price. If other conditions, other than payment of the purchase price, existed before settlement could occur, the transfer was held by the solicitor in escrow, pending compliance with those conditions also.

Mr Fernon SC also sought to rely on Penhall (as Executor of the Estate of the late Sukkar) v Abu Tony Pty Ltd (atf Abu Tony Discretionary Trust) [2023] NSWSC 434 at [74]-[76] (Robb J) as authority demonstrating that in the absence of evidence of a settlement ever occurring, acknowledgment of receipt of the purchase price is not proof of that receipt:

In response, Mr Bilinsky submitted that reliance on historical standard conveyancing practices was irrelevant because this conveyance was not an ordinary conveyance. The extraordinary aspect was Mr Sames acting as the solicitor for both sides of the purchase. The conveyancing process was different to the extent that Mr Sames did not have to have to consult with a different solicitor acting for Shirley as purchaser, there was no need to fix a future settlement date for payment after the time the transfer was signed, no searches needed to be conducted, none of the usual financial adjustment relating to usual rate payments needed to be made, no mortgage was required to be discharged and nor was there an incoming mortgagee arranging the payment.

On this basis Mr Bilinsky submitted that the signing of the transfer therefore effectuated the completion of the contract and that signing provided Shirley with the immediate ability to have the transfer registered. Execution of the transfer was submitted to constitute completion of the contract. Mr Bilinsky invited the Court to take judicial notice that the transfer had to have been executed by Shirley before it could be stamped by the SDO, accompanied by the contract and prior to settlement.

Mr Bilinsky submitted that whilst the actual conveyance may not have been “completed” (because the transfer was never registered), the contract for the sale of the property was. Mr Bilinsky referred to the 1981 letter where Mr Sames says the contract was “binding” to support the proposition that the contract was completed.

Mr Bilinsky also relied on Penhall at [76] as support for the proposition that if a vendor does not receive the purchase price as provided by the contract, the acknowledgement given by the vendor will not prevent recovery of that purchase price. In such a case, while the purchaser will continue to owe the money, this would not preclude him or her from relying upon the registrable transfer so as to obtain registration of it and acquire the legal title.

Any attempt to suggest that Donald’s acknowledgment of receipt of payment on the transfer was not an accurate statement of events was submitted to be an ‘artificial’ interpretation of the acknowledgment. Mr Bilinsky also contended that the evidence before the Court, viewed objectively, indicated that consideration had been paid. This evidence included that Donald had provided to Shirley’s solicitor a signed transfer (being an act which occurs upon receipt of payment at settlement); the absence of evidence at the time of the execution of the transfer to indicate that Shirley owed Donald any money in connection with the Sale; that Mr Sames in the 1981 letter does not refer to any outstanding payment under the contract; and that Shirley was told in the 1981 letter that there was no impediment to her registering the transfer.

Mr Bilinsky submitted that even if an assumption was made that the payment of the purchase price would have to have occurred at a point after the date of the transfer, an inference is comfortably available that the payment to Donald did occur on the basis that the evidence suggests that neither Mr Sames nor Donald ever suggested that Shirey had not completed the contract because she had not paid the purchase price and this precluded her from registering the transfer.

The view to which the Court has ultimately come means that it is not determinative whether or not the consideration was in fact paid. However, the Court finds for the following reasons that it was not:

The declaration requires the Court to reach a state of actual satisfaction on the balance of probabilities that the agreement between Donald and Shirley was such that, at her death, she held the whole of the equitable estate or interest in the property. However, as the Full Court of the Supreme Court of Queensland held in Road Australia Pty Ltd v Commissioner of Stamp Duties [2001] 1 Qd R 327; [1999] QCA 328, it is not the law that the entire beneficial estate passes to the purchaser on the making of the contract for sale of land. To be entitled to the declaration, it would be necessary for the vendor to be in the position of a bare trustee, from whom the purchaser could, in accordance with Saunders v Vautier (1841) Cr & Ph 240; 49 ER 282, demand an immediate conveyance of the legal estate, in the Torrens context being to demand delivery up of the certificate of title and a transfer in registrable form: Road at [19]. This would be done by seeking specific performance. The qualifications to Saunders v Vautier by the High Court in CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98; [2005] HCA 53 at [50]-[51] concerning the trustee’s rights of indemnity or exoneration are not relevant in the present case.

The shifting nature of a purchaser’s beneficial ownership of, and equitable rights in, a property subject to a contract for the sale of land have been conveniently summarised by Emmett JA (with whom Macfarlan and Gleeson JJA agreed) in Golden Mile Property Investments (in liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237; [2015] NSWCA 100 at [103]-[105] which I respectfully adopt and apply:

As I next turn to explain, the fundamental difficulty for Stephanie is that she cannot point to the terms of an agreement between Donald and Shirley (irrespective of the payment of consideration) that would have entitled Shirley at the date of her death to an order that Mr Sames release the transfer and certificate of title (the latter not having become obsolete until 11 October 2021) to enable registration. This is because the evidence does not permit the Court to find that Donald and Shirley ever agreed that the transaction between them should ever proceed to the point of registration of the transfer.

It is trite law that in disputes relating to interests and ownership of land, s 41(1) of the Real Property Act (RPA) requires the Court’s starting point to be to identify the registered proprietor of the land in issue:

In this case, it is undisputed that since 1976 Donald has been the registered proprietor of the proprietor and, prima facie, Donald at his death was entitled to the full legal and beneficial interest in the property. The Court accepts the submission that subject to determining any equitable interest Shirley may have in the property, s 42 of the RPA makes Donald’s registered interest paramount as none of the exceptions to the paramountcy rule outlined in that section are applicable.

Fiona accepted that s 41(1) RPA does not prevent equitable interests from being recognised. However, as the High Court noted in Chan v Cresdon Pty Limited (1989) 168 CLR 242, at 257; [1989] HCA 63, equitable interests can only be established if there is evidence of an antecedent agreement which founds the equitable interest:

The High Court’s statement that the antecedent agreement can only be ‘evidenced by the unregistered instrument, not the instrument itself’ was relied upon by Fiona to contend that the transfer itself is insufficient to establish the equitable interest. There must be evidence of either of the terms of a written agreement (I pass over oral agreements and part performance) which is given effect by the transfer to establish the equitable interest. It is only if the Court is sufficiently satisfied that there was a contract and of the terms of that contract, that the Court could recognise any purported equitable interest that Shirley had in the property.

As I have already noted (see [31] above), it was accepted by both parties that there must have been a written agreement between Donald and Shirley at least for Donald to transfer the property to Shirley for consideration of $14,500 and upon which ad valorem duty had been paid. This agreement was to be given effect by the transfer which had been marked by the SDO with nominal duty of $1. It is helpful to put this in its legislative context.

In September 1976, Stamp Duty was governed by the, now repealed, Stamp Duties Act 1920 (NSW). Section 41 outlined how agreements for the sale or conveyance of property would be stamped. As at 22 September 1976 that section of the Act provided

Consistent with s 41(4), the stamping of the transfer with nominal duty of $1 reflects that the SDO was satisfied that ad valorem duty had already been paid on the agreement which had given rise to the transfer. The parties have therefore accepted, and the Court finds, that there must have been an antecedent written agreement between Donald and Shirley which had been lodged at the SDO and upon which ad valorem duty had been paid (and in respect of which some refund was sought on behalf of Mr Clinch – see 28(3) above).

However, as noted in Chan at [110] above, it is that antecedent agreement, not the instrument itself, which creates the equitable estate or interest that creates an equitable interest in land. The transfer demonstrates that there was a contract, but for the Court to make the declaration, the Court must be actually satisfied of the terms of the agreement said to give rise to Shirley having the entire beneficial ownership of the property at the date of her death.

That written agreement is not in evidence. In a straightforward case, it might be sufficient for a party in Stephanie’s position to say that the Court should infer the terms of the agreement from the transfer, being an unconditional sale and purchase. However, if that were the case, the transfer should have been registered on or shortly after 22 September 1976. This did not happen, so the Court cannot be satisfied that such an inference is available.

The only contemporaneous document (at a distance of five years) that is in evidence is the 1981 letter. For this reason it is a, if not the, critical piece of evidence. I reproduce it again here for convenience of reference:

There are a number of things to be said about the 1981 letter:

The transfer was never registered. The 1981 letter invites the question why this was so. Mr Bilinsky submitted that the terms of the 1981 letter could only make sense if the agreement between the parties was unconditional. This is because the letter assumes that they could proceed to registration of the transfer if they wanted to do so. Otherwise, one might ask rhetorically, why ask whether there is any disadvantage in not registering the transfer? I accept Mr Bilinsky’s submission. While the fourth paragraph of the 1981 letter could correctly describe a contract the completion of which had not yet occurred due to the non-fulfillment of a condition, the second paragraph is not consistent with such an unfulfilled condition.

If, for example, the agreement was conditional on Donald predeceasing Shirley (whether by reason of the surgery or otherwise), then that condition had obviously not been fulfilled at the date of the letter. However, if that was the case, I would have expected Mr Sames to have referred to such a non-fulfilment in the letter because, on that hypothesis, the occasion for “proceeding towards registration of the transfer” would not yet have arisen at the date of the letter. The absence of such a reference, together with the fact that the tenor of the letter is that all that had to happen was completion (about which Mr Sames had written “from time to time”), are why I find that the stamped written agreement did not include a term that the transfer to Shirley was conditional upon her surviving Donald.

However, that is not the end of the matter. This is because it is also clear from the non-registration of the transfer at the time of the 1981 letter, and the terms of the letter itself, that (and the Court finds):

I have used the term “arrangement” advisedly. That is because there is insufficient evidence for a precise legal characterisation of the arrangement or its terms to be identified. It could be waiver, forbearance, an estoppel of some kind or (not overlooking the need for writing) contract (for example, a variation of the initial agreement or a contract collateral to it). The difficulty for Stephanie is that to succeed, she must persuade the Court on the balance of probabilities that, at the date of her death, Shirley had the estate in the property claimed in the declaration. That turns on whether an order in the nature of specific performance would have been available to Shirley at the date of her death against Donald. The Court cannot be satisfied it would have been.

The Court cannot be so satisfied because it appears Donald could have answered such a claim by saying that he and Shirley had an arrangement that the transaction should not be completed. On the available evidence, the Court cannot conclude on the balance of probabilities that such an answer, however legally framed, could not succeed. Stephanie cannot point to any basis on which the Court could infer a term of the non-completion arrangement that would change that result other than, perhaps, as matter of common sense, “until we agree otherwise”. If that were the case, there is no evidence of Donald and Shirley “agreeing otherwise” after November 1981.

In reaching this conclusion, I have not overlooked that this was not an arm’s length transaction, but therein lies the difficulty for Stephanie’s case. The Court is well familiar with the challenge of having to identify legal or equitable rights arising from longstanding family arrangements of varying degrees of formality (or informality). As at the date of the 1981 letter the non-completion arrangement must have been in place. Stephanie has not demonstrated that anything had changed by the date of Shirley’s death.

Does the evidence of what occurred afterwards change this result? This requires consideration of the 2005 instruction.

It was put for Stephanie that the 2005 instruction was either or both of legally ineffective in the light of the agreement and transfer or represented Donald attempting to renege on the agreement behind Shirley’s back, and therefore said nothing about Shirley’s rights in the property. I do not agree for these reasons:

I should also refer to one other possible analysis which is a variation on [126(3)] above. I have found that Mr Sames was acting for both Donald and Shirley. However, as I pointed out in [28] above, the transaction was initiated by Donald, with stamp duty paid by Donald, for Shirley’s benefit. On this view Shirley was a passive recipient of Donald’s largesse. As I have already noted, such circumstances are not unknown. If the true nature of the transaction were to be analysed as a conditional gift to Shirley on Donald’s terms, with Mr Sames acting solely for Donald and acting only on Donald’s instructions, then Stephanie’s case would still fail.

Finally, when considering the onus which Stephanie has in these proceedings, I cannot reach the appropriate state of satisfaction when I add into the evidentiary balance, in addition to the matters set out in paragraphs [121] to [126] above, the various evidence I have set out which points to the transfer being conditional on Donald predeceasing Shirley. While it was not for Fiona to prove the terms of any agreement, none of that evidence is inherently incredible. Even discounting to some extent Donald’s evidence recorded in [70] to [79] above for the possible impact of dementia, all of the evidence advanced in Fiona’s case was either expressly that the transfer was not to occur unless Donald died before Shirley or at least consistent with that analysis.

Of particular importance in giving weight to the possibility that any transfer was conditional on Shirley surviving Donald is that it is completely consistent with the debt forgiveness in the various wills Mr Sames prepared for Donald. While it is inconsistent with Donald’s right to reside in Shirley’s wills, and making no express finding to this effect given Mr Sames was neither a party nor a witness, I have concluded on the evidence in these proceedings that a plausible explanation for the inconsistency is that Mr Sames erred in his understanding of Donald and Shirley’s respective rights in the property.

This result means it is not necessary for the Court to consider the parties’ submissions on laches or the possible application of the LA. The limitation issues are not straightforward (see, for example, P Herzfeld, “Limitation of Actions and Specific Performance”, (2019) 93 ALJ 470).

The statement of claim will be dismissed. The parties will be given an opportunity to address on costs.