“Informal Arrangement – And the hurdles they pose for enforcement when challenged” – Law Society Journal Article

By Darryl Browne in Blog on November 21, 2012

In recent years, NSW courts have had many occasions to consider the enforceability of informal arrange- ments – arrangements which are (almost always) “neither reduced to writing nor the subject of legal advice”.1 To give that comment some context, in the first nine months of 2012 there have been at least seven decisions of the NSW Supreme Cour t resolving disputes arising from informal arrangements. 2 There have been three Cour t of Appeal decisions during that period, the latest being Wad- dell v Waddell [2012] NSWCA 214. While

the facts of each informal arrangement differ, there is a similarity with many of the circumstances. Similarly with the sub- ject matter, which often involves owner- ship or occupation of land (mostly farm- ing land3 or residential proper ty4), care and accommodation5 or money.6

Disputes among family

Most of the recent decisions involve disputes between members of a deceased’s family. Waddell was this type of dispute. It involved an arrangement between father and son , as did Lieschke v Lieschke [2003] NSWSC 743 and Waldock v Waldock [2012] NSWSC 258 . In Hampson v Hampson [2010] NSWCA 359 and Reitano v Reitano [2012] NSWSC 1127, the relationship that gave rise to the dispute was mother and son, while in Palinkas v Palinkas [2009] NSWSC 92, it was parents and son.

In Evans v Evans [2011] NSWCA 92, the dispute was between father, son and daughter-in-law. In Welch v Welch [2012] NSWSC 1128, the dispute was between daughter-in-law and parents-in-law. In Voce v Deloraine [2012] NSWSC 1187, it was between mother–in-law and daughter- in-law.

In Khoury v Khouri [2006] NSWCA 184 and Sullivan v Sullivan [2006] NSWCA 312, the dispute was between sister and brother (as it was in Barnes v Alderton [2008] NSWSC 107, Bovaird v Frost [2009] NSWSC 337 and Chidiac v Maatouk [2010] NSWSC 386). In Delaforce v Simpson-Cook [2010] 84 it involved estranged, and soon to be divorced, spouses. In Tadrous v Tadrous [2012] NSWCA 16, the dispute was between brother-in-law and sister-in- law. In Walsh v Walsh [2012] NSWCA 57 the parties were brothers.

In this context, “family” is a broad term. So, in Sion v NSW Trustee and Guardian [2012] NSWSC 949, the relationship involved in the dispute was niece/nephew and aunt, and in Varma v Varma [2010] NSWSC 786, it was aunt and nephews. In Ashton v Pratt (No 2) [2012] NSWSC 3, the plaintif f was the deceased’s one-time mistress.

It may be that, because of the trust usually engendered in a family relationship, arrangements within a family are more likely to be informal. Nevertheless, informal arrangements do not only exist between members of the family, and, naturally, it is not only family disputes that result in legal action. For instance, McKeand v Thomas [2006] NSWSC 1028 involved a dispute between neighbours about the creation of a service easement. Darmanin v Cowan [2010] NSWSC 1118 was a dispute between a tenant and landowner about the erection of an illegal dwelling on the landowner’s land.

Framing the dispute

Informal arrangements present challenges because the informality commonly leads to disputes about facts. They are also challenging because it is only when a dispute occurs that attention is given to the legal framework that would allow enforcement of the informal arrangement. Resort is usually made to contract and estoppel.

Claims in contract

While, historically, claims in contract have been successful7, in recent times that has been less so,8 largely because of the considerable obstacles to successfully prosecuting such claims. These obstacles include:

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