Orr v Ford

(1989) 167 CLR 316
84 ALR 146

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(Judgment by: Deane)

ORR v FORD F.C.

Court:

Judges: Mason C.J. and Dawson
Wilson, Toohey and Gaudron JJ.

Deane

Other References:
Income Tax (Cth) - Precedent

Judgment date: 8 February 1989

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Judgment by:
Deane

The learned trial judge (Ryan J.) found that, subject to the effect of the provisions of the Land Act 1962 (Q.) ("the Act"), the late Dr. Stone, at the time of his death, held a one-half interest in the leasehold selection known as "Cockatoo" upon an express trust for the appellant, Mr. Orr. His finding to that effect was upheld by the Full Court of the Supreme Court of Queensland. Both Ryan J. and the Full Court rejected a defence that Mr. Orr had lost any right which he might otherwise have had to obtain a declaration of that trust by reason of laches, acquiescence or delay. However, both his Honour and the Full Court upheld a submission made on behalf of the respondents, who are the executors of Dr. Stone's will, to the effect that any trust in Mr. Orr's favour was illegal, and therefore unenforceable, by reason of the provisions of ss.91 and 296 of the Act. The consequences of that finding of illegality were that Mr. Orr's suit for a declaration of trust was dismissed by Ryan J. and that his appeal to the Full Court failed.

Each of the abovementioned findings has been attacked by one side or the other in this Court. In the result, the questions which arise for consideration are: (i) Was any trust of "Cockatoo" in Mr. Orr's favour rendered illegal or unenforceable by the provisions of the Act? (ii) Should the finding of the courts below that there was an express trust of a half share of "Cockatoo" in Mr. Orr's favour be set aside in any event for the reason that it was not supported by the evidence? (iii) Was Mr. Orr disentitled to the relief sought by reason of "acquiescence", "laches" or "delay"? In considering those questions, I shall endeavour to avoid unnecessary repetition of the background facts and the relevant statutory provisions which are set out in the joint judgment of Wilson, Toohey and Gaudron JJ. It will, however, be necessary at the cost of some repetition, to highlight the facts which appear to me to be critical to a consideration of the defence of laches.

(i)

Was any trust of "Cockatoo" illegal or unenforceable?

It is not suggested that the alleged trust was illegal or unenforceable by reason of a joint purpose or scheme, to which Mr. Orr was a party, to evade or frustrate the provisions of the Act. The respondents' argument is that the effect of those provisions was to make illegal, and preclude the enforcement of, any trust at all of a selection except in the special circumstances which the Act identifies (see s.235) and which did not exist in this case. It can be said at once that, while I am conscious of the considerable force of that argument, I do not construe the relevant provisions of the Act as having such an operation or effect.

Section 91(1) of the Act provides that any "person who in respect of the land applied for or held, or any part thereof or interest therein, is a trustee ... for any other person, shall not be competent to apply for or hold any selection" (emphasis added). Section 296(2) provides that "any person who, save as prescribed, acquires or holds as a trustee ... any ... selection ... shall be deemed to have acquired or to hold the holding ... by fraud upon this Act, and shall be liable ... to the forfeitures prescribed" (emphasis added). Those provisions do not preclude or render illegal the existence of a trust of a selection. Nor do they extinguish or render unenforceable the obligations of the trustee to the beneficiary under any such trust. To the contrary, as the words "is a trustee" in s.91(1) and "holds as a trustee" in s.296(2) make plain, the two sub-sections are based upon an acceptance of the actual existence of such a trust with its attendant obligations. As the provisions of the Act (particularly s.296(1) and (2)) establish, the lack of competence decreed by s.91(1) is not a disqualifying bar which precludes the acquisition or holding of a selection. It is a defect in qualification which makes the selection liable to forfeiture by, but only by, a combination of an adverse exercise of ministerial discretion and judicial determination (see the Act, s.297). More important for present purposes, that lack of competence relates only to the legal entitlement of the trustee. Putting to one side the special cases to which s.235(4) applies and which are not here in point, the Act simply does not speak to the lawfulness or enforceability of the equitable interest of the beneficiary. If the legal right or title to the selection is forfeited, it will necessarily cease to be trust property.

There is, however, nothing in the Act which produces the inequitable result that a person who "is a trustee" of a selection which is not forfeited either becomes the beneficial owner of it or is rendered immune from the enforce ment of the terms of the trust.

It follows that any trust of a one-half interest in "Cockatoo" was not rendered illegal or unenforceable by the provisions of the Act.

(ii)

Was there an express trust?

As will appear, I have come to the conclusion that Mr. Orr's claim to a declaration that Dr. Stone held "Cockatoo" upon trust for Mr. Orr and himself in equal shares is, in all the circumstances, defeated by his laches. That being so, it is strictly unnecessary that I deal with this issue. I would, however, indicate that I consider that the finding of the learned trial judge, affirmed by the Full Court, that there was such an express trust was open on the evidence led on the trial. That finding was essentially one of fact. It was largely based on the trial judge's substantial acceptance of the evidence of Mr. Orr and his daughter (Mrs. Flood). Were it not for the effect of Mr. Orr's laches, I would not have disturbed it. (iii) Is Mr. Orr disentitled to the relief claimed by laches, acquiescence or delay?

Dr. Stone's letter of 3 December 1977 to Mr. Orr's wife (Mrs. Orr) made clear his belief that he (Dr. Stone) was the sole beneficial owner of "Cockatoo". That letter was answered on 19 December 1977 by Mr. Orr who refrained from challenging that belief or asserting any interest at all in the selection. Mr. Orr's evidence was to the effect that he recognized that Dr. Stone "seemed to have forgotten or to deny" that Mr. Orr had any interest in the property. Thereafter, for years, Mr. Orr did nothing at all to assert any claim to "Cockatoo" or to suggest to Dr. Stone that his belief that he was the sole beneficial owner of the leasehold selection was mistaken or contested. His explanation of that failure in the course of his evidence was that he felt that reasoning with Dr. Stone "was quite impossible and as far as I was concerned the properties would eventually come to the family, and I let matters take their course" (emphasis added). Elsewhere in his evidence, he indicated that that reference to "the family" was to Mrs. Orr and Mrs. Flood who, he expected, would inherit "Cockatoo" on Dr. Stone's death. In the meantime, he deliberately stood by while Dr. Stone ran the property and spent considerable sums on improvements on the basis and in the belief that it was his and his alone. In July 1978, Dr. Stone made what proved to be his last will. Not surprisingly, he made it on the same basis and in the same belief. He specifically devised the selection and other properties to Mr. Nimmo (who had been the manager, and had just become a sub-lessee, of the properties) and Mrs. Nickerson who had been Dr. Stone's "companion and housekeeper and secretary for many years". After Dr. Stone's death in October 1982, the Supreme Court of Queensland found that he had possessed the necessary testamentary capacity to make that will and granted probate of it to the respondents over the opposition of Mrs. Orr and Mrs. Flood.

It was not until mid-1982 that Mr. Orr asserted any claim to a share of "Cockatoo". Dr. Stone was, by then, mentally incapable and his affairs were being administered by the Queensland Public Trustee under a protection order. Putting to one side some vague evidence given by Mr. Orr about a conversation in June 1982 with Dr. Ford, who subsequently became one of Dr. Stone's executors ("I told him what I had paid"; "I would say that I would have said a half interest"), Mr. Orr's first assertion of any claim to "Cockatoo" was in a letter written by his solicitors to the Public Trustee in August 1982. That was almost five years after Dr. Stone had made clear that he believed that he was the sole beneficial owner of the property. Even then, Mr. Orr claimed only to have the interest which equity would presume him to have, namely, a beneficial interest proportionate to his contribution to the purchase price. It was alleged, in that letter, that the purchase price was $80,000. If that had been so, the result would have been that his proportionate contribution was three-eighths. In fact, the purchase price was $156,000 of which Mr. Orr's contribution was $30,000. That being so, Mr. Orr's presumed proportionate share would be 30/156 since it is common ground that the balance of the purchase price was paid by Dr. Stone.

Even when, in 1985, Mr. Orr came to give evidence in the Supreme Court in support of his wife's and daughter's opposition to a grant of probate of Dr. Stone's last will, he did not suggest that he was entitled to a half interest in "Cockatoo". To the contrary, he re-asserted his claim to an interest in the property proportionate to his contribution to the purchase price. The following extracts from his cross-examination in the present case provide a convenient summary of the effect of his evidence in that probate suit:

"Q. Can you recall saying to me in cross-examination (i.e. in the probate suit) - you were talking about the acquisition of 'Cockatoo' - do you recall me saying to you, 'What was the price?', referring to the price of 'Cockatoo', and you saying, 'At that stage I thought the price was about $80,000. That was the indication I had had from letters from Dr. Stone and I thought I was buying roughly a third.' Can you recall saying that?

A. Well, I thought that, yes.

...

Q. Why then did you tell me (i.e. in evidence in the probate suit) in answer to my question that you thought you were buying roughly a third?

A. Because I had put up $30,000 out of $80,000 and I had a feeling that he might have paid more. I didn't know.

Q. You thought you were buying roughly a third because you put up $30,000 and you thought the price was about $80,000 or a bit more, is that right?

A. Yes, I did."

It was only after his wife's and daughter's opposition to the grant of probate of Dr. Stone's will had failed and it was clear that they would not share in the residue of Dr. Stone's estate (including "Cockatoo") under an earlier will, that Mr. Orr expanded his claim to include a full half share of the selection and instituted the present proceedings for a declaration that he was beneficially entitled to that interest. Again, to quote from his own evidence in the present case:

"Q. You see, in August of 1982 (i.e. in his solicitor's letter) what you claimed was a proportion of 'Cockatoo' equal to the contribution of $30,000 towards the purchase price. When you gave evidence eighteen months ago in your wife's action (i.e. in the probate suit in 1985) you claim you had bought roughly a third of 'Cockatoo'. The first time you put forward a claim to be a half owner was in this present action, the writ in which was issued in December of 1985. That is so, isn't it?

A. Yes.

Q. So, December 1985 is the first time you asserted a claim to be an equal half owner in 'Cockatoo'?

A. Yes.

Q. Three years after Dr. Stone had died. That is so, isn't it? You never made this claim in his lifetime did you -- when I say 'this claim' I mean a claim to be half owner?

...

A. No, I didn't."

By then (i.e. December 1985), Mrs. Nickerson had also died. The respondents submit that, by then, Mr. Orr had, by his "acquiescence", "laches" or "delay", lost any right to invoke equity to advance for the first time a claim that he was beneficially entitled to a full half share of "Cockatoo".

There has, over the years, been considerable criticism of the loose use of the word "acquiescence" as a broad conjunctive or disjunctive companion to "laches" (see, e.g., per Lord Cottenham L.C., Duke of Leeds v. Earl of Amherst (1846) 2 Ph 117 , at p 123; ( 41 ER 886 , at p 888); De Bussche v. Alt (1878) 8 ChD 286 , at p 314). Such criticism has obvious force in that, so used, the word has a chameleon-like quality which adds little besides confusion to an already vague area of equity doctrine. Strictly used, acquiescence indicates the contemporaneous and informed ("knowing") acceptance or standing by which is treated by equity as "assent" (i.e. consent) to what would otherwise be an infringement of rights (cf. Dann v. Spurrier (1802) 7 Ves Jun 231; ( 32 ER 94 ); Life Association of Scotland v. Siddal. Cooper v. Greene (1861) 3 De G.F. & J. 58; ( 45 ER 800 ); Cashman v. 7 North Golden Gate Gold Mining Co. (1897) 7 QLJ 152 , at p 153). The word is commonly also used to refer: (i) to a representation by silence of a type which may found an estoppel by conduct (see, e.g., Mitchell v. Homfray (1881) 8 QBD 587 , at pp 591, 593); or (ii) to acceptance of a past wrongful act in circumstances which give rise to an active waiver of rights or a release of liability (see, e.g., Brunyate, Limitations of Actions in Equity, (1932), at pp 188-189; Hanbury and Maudsley, Modern Equity, 12th ed. (1985), at pp 621-622); or (iii) to an election to abandon or not enforce rights (see, e.g., per Lindley L.J., Allcard v. Skinner (1887) 36 ChD 145 , at pp 186-189). A plaintiff may, however, lose his right to relief by an "inferior species of acquiescence" (cf. Banning, The Statute Law of the Limitation of Actions, 2nd ed. (1892), p 269) which does not amount to assent, waiver or election or give rise to an estoppel. In these cases, acquiescence may be used in at least one of three ways.

First, it is sometimes used as an indefinite overlapping component of a catchall phrase also incorporating "laches" or "gross laches" and/or "delay". While such phrases may provide a convenient means of referring to a general area of equity, they tend to obscure principle rather than to assist in its identification. Secondly, acquiescence is used as a true alternative to "laches" to divide the field between inaction in the face of "the assertion of adverse rights" ("acquiescence") and inaction "in prosecuting rights" ("laches") (see, e.g., Smith, A Manual of Equity Jurisprudence, 14th ed. (1889), p 24). Upon analysis, that use of the word "acquiescence" is not helpful since laches ("an old French word for slacknesse or negligence or not doing": Co. Litt. 380b; Partridge v. Partridge (1894) 1 Ch 351 , at p 360) comprehends silence or inaction in the face of an unwarranted assertion of adverse rights by another as well as inaction or delay in prosecuting one's own rights. Thirdly, and more commonly, acquiescence is used, in a context where laches is used to indicate either mere delay or delay with knowledge, to refer to conduct by a person, with knowledge of the acts of another person, which encourages that other person reasonably to believe that his acts are accepted (if past) or not opposed (if contemporaneous) (see, e.g., Cashman, at p 153; Glasson v. Fuller (1922) SASR 148 , at pp 161-162).

To a significant extent, the divergences in the use of the word "acquiescence" in this area of the law are the result of differences about the scope of the word "laches" itself. In his helpful work on Limitations of Actions in Equity (ibid.), Mr. Brunyate expressed the view that a distinction needs to be drawn between laches "in the wide sense" which includes acquiescence and laches "in the narrow sense" of mere "lapse of time" which "may be an element in the more general defence" of "acquiescence". The doctrine of laches in Mr. Brunyate's "wide sense" encompasses "all the rules under which lapse of time before a suit is brought can operate as a defence" (ibid., at pp 188-189) including the rules defining more particular independent defences such as assent, waiver, release and estoppel by representation (cf. Spencer Bower and Turner, The Law Relating to Estoppel by Representation, 3rd ed. (1977), p 50; Life Association of Scotland v. Siddal. Cooper v. Greene, at p 72; (ER, at p 806). It may well be that the developing scope and flexibility of estoppel by conduct is leading to a unification of doctrine in those areas, such as the field of laches, where equity precludes relief in cases where the enforcement of rights would be unconscionable (cf., e.g., Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. (1982) QB 133 ; Amalgamated Investment & Property Co. Ltd. (In Liquidation) v. Texas Commerce International Bank Ltd. (1982) QB 84 , at pp 104, 122; Habib Bank Ltd. v. Habib Bank A.G. [1981] 1 WLR 1265 , at p 1285; [1981] 2 All ER 650 , at p 666; In re Montagu's Settlement (1987) ChD 264 , at p 278; Attorney-General of Hong Kong v. Humphreys Estate [1987] AC 114 , at pp 122-124; Waltons Stores (Interstate) Ltd. v. Maher (1988) 164 CLR 387 , at p 452). That question was not, however, addressed in the course of argument and can be left for some future case. Both sides approached the present matter on the basis that all that is involved is a general defence of "laches" under traditional principle.

On that approach, it seems to me that the preferable view of the scope of the doctrine of laches lies between Brunyate's two extremes and is that the doctrine of laches comprises those rules which define the circumstances in which equity will, without need to resort to the rules governing other more particular defences and in the absence of applicable statutory provisions, refuse relief by reason of standing by or lapse of time before action. So understood, the field of operation of the doctrine of laches overlaps the areas of operation of other more specific defences. It does not, however, include the particular rules governing those other more specific defences. Thus, for example, the rule that a representation must be clear to found an estoppel (see, e.g., Spencer Bower and Turner, op. cit., pp 82-84) may preclude particular circumstances giving rise to an estoppel by conduct while not preventing the same circumstances from constituting a defence of laches. It is in this last-mentioned sense that laches has been advanced by the respondents as a defence in the present case. While it is conceivable that the circumstances could give rise to questions of assent, waiver, election or estoppel, the respondents have not relied on any such more particular defence. Delay and acquiescence are invoked as part of the circumstances of the case which are said to found a defence of laches notwithstanding that Mr. Orr's claim is that of a beneficiary for the enforcement of an alleged express trust. Delay is relied upon in the sense of the period during which there was inaction or standing by in the face of a challenge to rights or an assertion of adverse rights. Acquiescence is relied on in the sense of calculated (i.e. deliberate and informed) inaction or stand ing by which encouraged another reasonably to believe that his assertion of rights and consequent actions were accepted or not opposed.

The availability of a defence of laches and what will suffice to make it good depends upon the nature of the claim. Laches is an equitable defence and is not available in answer to a legal claim. It has been said that, even in the case of equitable claims, "laches ... finds a Bluebeard's Chamber ... in a claim (by a beneficiary) against an express trustee for recovery of trust property" (see Hanbury, Modern Equity, 6th ed. (1952), at p 349 and, less colourfully, per Jessel M.R., Browne v. Radford (1874) WN 124 , who "knew of no case where acquiescence had been held to be a bar to an express trust"). As Professor Hanbury recognized, however, that broad statement requires qualification. The qualification is that "the doctrine ... that where there is an express trust lapse of time is to be entirely disregarded" does not apply to a case in which there has been "gross laches" (see per Lord Campbell LC., Bright v. Legerton (1861) 2 De G F & J. 606, at p 616; ( 45 ER 755 , at p 759) and, to the same effect, per Lord Coleridge L.C.J., Sir James Hannen P. and Baggallay L.J., In re Cross; Harston v. Tenison (1882) 20 ChD 109 , at p 121 and per Dixon J., Hourigan v. Trustees Executors and Agency Co. Ltd. (1934) 51 CLR 619 , at p 650). One searches in vain in the judgments in the above-mentioned cases (and, for that matter, elsewhere) for any satisfactory comprehensive description of the combinations of circumstances which will suffice to attract the label "gross" for the purposes of that qualification. That is not surprising since any attempt to specify exhaustively those combinations of circumstances would be likely to introduce an inappropriately arbitrary and technical element into an area of equity doctrine which has traditionally been kept free of arbitrary and technical constraints.

On balance, the preferable approach is to treat the phrase "gross laches" as an intentionally imprecise one which involves not merely considerations of the period of the relevant delay but which invokes the traditional notions of equity and good conscience which are the general determinants of whether a plaintiff should be refused relief by reason of laches in the circumstances of a particular case. On that approach, the phrase refers to circumstances where inaction or standing by (with knowledge) by a plaintiff over a substantial period of time assumes an aggravated character in that it will, if the plaintiff is granted the relief which he seeks, give rise to serious and unfair prejudice to the defendant or a third party. So understood, the use of the phrase "gross laches" does little to aid in the identification of particular circumstances in which a defence of laches will preclude relief being granted to a beneficiary in an action for the enforcement of an express trust. The ultimate test effectively remains that enunciated by Lord Selborne L.C. (not, as is often said, Sir Barnes Peacock (see Errata)), speaking for the Privy Council, in Lindsay Petroleum Company v. Hurd (1874) 5 PC 221 , at pp 239-240, namely, whether the plaintiff has, by his inaction and standing by, placed the defendant or a third party in a situation in which it would be inequitable and unreasonable "to place him if the remedy were afterwards to be asserted" (see Erlanger v. New Sombrero Phosphate Company (1878) 3 App Cas 1218, at p 1279, and also, per Rich J., Hourigan, at pp 629-630).

Ordinarily, it is difficult to envisage circumstances, falling short of waiver, release, election or estoppel, in which the laches of a beneficiary would produce a situation in which it was inequitable and unreasonable to grant relief in proceedings for the enforcement of an express trust in relation to trust property which remained in the possession of the trustee (or his personal representative). There are, however, at least two categories of case where that is not so. The first is where there is or has been dispute or mistake about the existence of the trust or the identity or extent of the trust property. The second category is where prejudice to third parties, such as other beneficiaries, is involved. In the first category of case, unreasonable delay in instituting proceedings to enforce the claim may of itself give rise to the serious and unfair prejudice necessary to constitute "gross laches" in that it may bring about a situation in which the means of resisting the claim, if it be unfounded, have perished (see, e.g., Attorney-General v. Fishmongers' Company (1841) 5 My & Cr 16, at pp 17-18; ( 41 ER 278 , at p 278); Brunyate, op. cit., p 234). In determining what constitutes "unreasonable delay" regard must be had to all the circumstances, including the nature of the claim and the conduct of the parties (cf. Whereat v. Duff (1972) 2 NSWLR 147 , at pp 180-181). It may well be that the modern availability of proceedings for declaratory relief to negate a claim by a beneficiary makes it unlikely that such serious and unfair prejudice would be found to exist in a case where the defendant had been aware of the existence of such a claim at relevant times. It is, however, unnecessary to pursue that question for the purposes of the present case since, as has been seen, it is clear from the evidence that Mr. Orr's failure to assert his claim to an interest in "Cockatoo" served to confirm Dr. Stone in the belief, upon which he acted, that he was the sole beneficial owner of the selection.

In the second category of case, regard is paid to the prejudice which would be caused to third parties in assessing whether the plaintiff's laches has brought about a situation in which it would be inequitable and unreasonable to grant the relief which he seeks (see Bonney v. Ridgard (1784) 1 Cox Eq.Cas. 145, at p 149). The two categories of case are not mutually exclusive. Indeed, the present case falls within each of them in that it is a case involving dispute and mistake about the identity or extent of trust property and potential unfair prejudice to third parties, namely, the specific devisees of "Cockatoo".

The appropriate starting point of a consideration of the availability of a defence of laches is the precise identification of the substantive nature of the claim to which laches is said to constitute a bar. It was conceded on behalf of the respondent executors that, if the defence based on the operation and effect of the Act failed, Mr. Orr was beneficially entitled to a 30/156th share of "Cockatoo" under a resulting trust arising from his payment of that proportion of the purchase price. It was not argued that Mr. Orr's laches in initiating proceedings precluded the grant of declaratory relief in respect of that lesser interest. Laches has been pressed in this Court as a defence only to the claim that the presumption of a resulting trust reflecting Mr. Orr's and Dr. Stone's respective contributions to the purchase price of "Cockatoo" was rebutted in favour of an express trust under which Mr. Orr is beneficially entitled to a half share of the property. In other words, laches is relied upon only in answer to Mr. Orr's claim to an increased share of "Cockatoo" by reason of what was, in substance, a gift of either part of the purchase price or part of the property made to him by Dr. Stone. The enforcement of that claim involved reliance upon what Mr. Orr himself described as a "nebulous sort of agreement ... a fairly airy-fairy sort of arrangement". Obviously, Dr. Stone, who was then an old man of failing mental capacity, was the only person who would be likely to be able to give evidence in rebuttal of a claim by Mr. Orr that he was entitled to a full half share of "Cockatoo". Once it was apparent to Mr. Orr that Dr. Stone denied or had forgotten that he had made the agreement or arrangement which Mr. Orr alleged, ordinary considerations of fairness plainly required that Mr. Orr act with reasonable promptness if he were to insist upon actually receiving the benefit of Dr. Stone's alleged generosity.

It is not suggested that Mr. Orr did not, at all relevant times, possess "sufficient knowledge of the facts constituting the title to relief" (Lindsay Petroleum Company v. Hurd, at p 241). Yet, instead of acting promptly, he did nothing to assert his claim to a half share of "Cockatoo". He did not dispute Dr. Stone's unambiguous assertion of sole beneficial ownership. His letter of 19 December 1977 sought an explanation of Dr. Stone's decision to exclude him from "Cockatoo" and the other properties. It did not, however, question Dr. Stone's right to make that decision. Thereafter, Mr. Orr refrained from instituting proceedings in the expectation that, if Dr. Stone persisted in the belief he was the sole beneficial owner of "Cockatoo", he would leave the whole of the property to Mr. Orr's wife and/or daughter in his will. When, almost five years afterwards, Mr. Orr finally asserted that he had a beneficial interest in "Cockatoo", he did not suggest that he was entitled to anything more than the proportionate share which reflected his contribution to the purchase price. Even in his evidence in the probate suit, more than two years after Dr. Stone had died, he did not suggest that he was entitled to anything other than that proportionate share.

The evidence established that the initial arrangement between Mr. Orr and Dr. Stone was that they would purchase "Cockatoo" together and that Mr. Orr would go to Queensland to work and develop the property in partnership with Dr. Stone. Circumstances precluded the finalization, and subsequently led to the abandonment, of the intended partnership. Mr. Orr stayed in Melbourne. The subsequent conduct of the parties must inevitably give rise to a real question whether any agreement or arrangement that Mr. Orr would have an equal beneficial interest in the property either was contingent upon the establishment of a partnership or, if it was not, was abandoned with the partnership plan. It suffices to point to four aspects of that subsequent conduct, namely: (i) Mr. Orr's failure to contribute anything at all to subsequent instalments of the purchase price. Indeed, he did not even find out what the purchase price was; (ii) Mr. Orr's failure to contribute to the cost of improvements or outgoings; (iii) Dr. Stone's failure to account to Mr. Orr for any share of profits from the operation of the property; and (iv) Mr. Orr's subsequent acceptance of Dr. Stone's exclusion of him from the property and his failure, for years after that exclusion, to assert any claim that he had a half interest in "Cockatoo". The letters of Dr. Stone which were written before the abandonment of the proposed partnership are of no assistance in determining the effect of that abandonment upon any arrangement that Mr. Orr should acquire a full one-half interest in "Cockatoo". Any such arrangement could well, in the circumstances, have been varied or rescinded by the parties or overtaken by principles of equity (cf. Muschinski v. Dodds (1985) 160 CLR 583 ). Obviously, Dr. Stone's evidence would have been of critical importance in determining the precise terms of the original and any varied arrangements upon which Mr. Orr must rely to rebut the presumption of a resulting trust reflecting his proportionate contribution to the purchase price.

The only other likely witness (on Dr. Stone's side) who might have been able to give evidence in relation to those arrangements was Mrs. Nickerson who, according to the evidence, was Dr. Stone's "companion ... and secretary" as well as his housekeeper. Mr. Orr's failure to contest Dr. Stone's assertion of sole ownership of "Cockatoo" produced a situation in which Dr. Stone, being unaware of Mr. Orr's claim to a half share of the property, lost any opportunity of instituting proceedings to negate it. His deliberate and calculated failure to assert that claim until some three years after Dr. Stone had died ensured that there was no possibility of Dr. Stone's evidence being available. It also precluded investigation of what evidence Mrs. Nickerson might have given in relation, for example, to a defence of equitable estoppel of the kind referred to in the judgment of Wilson, Toohey and Gaudron JJ. In the words of Lord Halsbury L.C. in Watt v. Assets Company [1905] AC 317 , at p 329, "witnesses have perished, and the opportunities which might have been had if the question had been earlier raised have passed away" (see also Hughes v. Schofield (1975) 1 NSWLR 8 , at p 14; Crago v. McIntyre (1976) 1 NSWLR 729 , at p 748). It is not to the point that there is an inevitable element of conjecture or speculation involved in consideration of what, if any, precise defences would have been available if Mr. Orr had acted with reasonable promptness to assert his present claim to a half share of "Cockatoo". Equity is not so misguided as to recognize laches as a defence when it causes evidence to perish but to treat the defence as lost if the laches continues for so long that it not only obliterates evidence but produces conjecture or speculation as to what, if any, precise defences would have been available if proceedings had been instituted within a reasonable time.

So much was made clear by Lord Campbell L.C. in Bright v. Legerton, at pp 616-617; (ER at p 760): "A Court of Equity will not allow a dormant claim to be set up when the means of resisting it, if unfounded, have perished ..." (emphasis added).

There are other aspects of the unfairness and injustice which would result from enforcement of Mr. Orr's claim to a one-half interest in "Cockatoo" at this late stage. The effect of Mr. Orr's failure to assert his claim to a one- half interest was that Dr. Stone was left to spend money on the improvement of "Cockatoo" and to deal with the property on the basis that he was the sole beneficial owner of it. Even more important, Mr. Orr, in the expectation that his own family would inherit the whole of "Cockatoo", deliberately stood by and allowed Dr. Stone to make his testamentary dispositions in ignorance of the existence of an adverse claim to a half share of the property. It would be unfair and unjust to allow the frustration, to an extent greater than that which reflects Mr. Orr's proportionate contribution to the purchase price, of those testamentary dispositions now that Dr. Stone is dead. a fortiori , it would be manifestly unfair and unjust to Mr. Nimmo and Mrs. Nickerson's estate to allow Mr. Orr so to frustrate Dr. Stone's bequest. If Mr. Orr had asserted his claim to a one- half beneficial interest within a reasonable time after Dr. Stone made clear his belief that no such beneficial interest existed, Dr. Stone may well have made other provision in his will to deal with the contingency that Mr. Orr might succeed in establishing his claim. He may, for example, have increased the interest under his will of Mr. Nimmo and Mrs. Nickerson by the amount thought necessary to enable Mr. Orr's interest to be bought out. The situation is one in which "subsequent lapse of time and delay have materially affected the situation ... by inducing testamentary dispositions which it would be most inequitable to disturb" (per Dixon J., Hourigan, at p 651).

Whether, at the end of the day, the defence of laches should prevail in the present case "is necessarily a matter of degree and must depend on the circumstances of the given case" (cf. Haas Timber & Trading Co. Pty. Ltd. v. Wade (1954) 94 CLR 593 , at p 602 and see, e.g., B.M. Auto Sales Pty. Ltd. v. Budget Rent A Car System (1976) 51 ALJR 254 , at p 259; 12 ALR 363 , at p 372). As has been seen, those circumstances include: the nature of the claim as a claim to the fruits of what was (to the extent it exceeded a proportionate share) in substance an alleged gift made by Dr. Stone; the long period of standing by in the face of an unequivocal and undisputed assertion by Dr. Stone, who was by then an old man, that he remained sole owner of the leasehold selection; the deliberate and calculated character of the standing by until Dr. Stone was dead; and, the grave unfairness and injustice of the consequences if Mr. Orr is permitted to enforce his claim at this late stage. On balance, and notwithstanding any hardship to Mr. Orr, the circumstances of the case compel the conclusion that Mr. Orr's conduct in standing by for some eight years constituted "gross laches" which precludes the grant of the equitable relief which he seeks. That does not, however, mean that the order of the learned trial judge that the action should be dismissed should be allowed to stand. As has been said, it is conceded that the effect of the conclusion that the Act did not preclude or render unenforceable any trust of a share of "Cockatoo" is that Mr. Orr was beneficially entitled to a 30/156 share of "Cockatoo" and it has not been argued that laches precludes the grant of declaratory relief in relation to that beneficial interest. Subject to the appropriate allowance being made for the cost of the improvements that the learned trial judge found had been made by Dr. Stone, it should be declared that Mr. Orr is beneficially entitled to that share.