Anderson v McPHERSON [No 2]
[2012] WASC 19 (S)
•25 JANUARY 2012
ANDERSON -v- McPHERSON [No 2] [2012] WASC 19 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 19 (S) | |
| Case No: | CIV:2210/2007 | 3-6 OCTOBER & 24 NOVEMBER 2011 & 2 MARCH 2012 | |
| Coram: | EDELMAN J | 25/01/12 | |
| 2/03/12 | |||
| 18 | Judgment Part: | 1 of 1 | |
| Result: | Orders made | ||
| B | |||
| PDF Version |
| Parties: | BRUCE WILLIAM ANDERSON CAROLYN ANDERSON STEPHANNIE MARRIEE McPHERSON TROY KENNON ANDERSON |
Catchwords: | Orders consequent upon reasons for judgment Equitable compensation sought No cause of action pleaded in support of equitable compensation No submissions in opening or closing in support of equitable compensation No legal basis for the award of equitable compensation 'Minimum equity' principle as derived from the law of estoppel is not a stand-alone ground for equitable compensation 'Minimum equity' principle is probably not part of Australian law Award of equitable compensation inconsistent with reasons given and with findings of fact |
Legislation: | Nil |
Case References: | Anderson v McPherson [No 2] [2012] WASC 19 Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; (1998) 195 CLR 566 Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380 Clifton v Chinnery [2011] WASC 294 Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 Como v Helmers [2011] WASC 179 Crabb v Arun District Council [1976] Ch 179 Delaforce v Simpson-Cook [2010] NSWCA 84 Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 Sullivan v Sullivan [2006] NSWCA 312 Tadrous v Tadrous [2012] NSWCA 16 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 2 MARCH 2012 FILE NO/S : CIV 2210 of 2007 BETWEEN : BRUCE WILLIAM ANDERSON
- First Plaintiff
CAROLYN ANDERSON
Second Plaintiff
AND
STEPHANNIE MARRIEE McPHERSON
First Defendant
TROY KENNON ANDERSON
Second Defendant
Catchwords:
Orders consequent upon reasons for judgment - Equitable compensation sought - No cause of action pleaded in support of equitable compensation - No submissions in opening or closing in support of equitable compensation - No legal basis for the award of equitable compensation - 'Minimum equity' principle as derived from the law of estoppel is not a stand-alone ground for equitable compensation - 'Minimum equity' principle is probably not part of Australian law - Award of equitable compensation inconsistent with reasons given and with findings of fact
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Legislation:
Nil
Result:
Orders made
Category: B
Representation:
Counsel:
First Plaintiff : Mr A P Rumsley
Second Plaintiff : Mr A P Rumsley
First Defendant : Mr D J Morris
Second Defendant : No appearance
Solicitors:
First Plaintiff : Alan Rumsley
Second Plaintiff : Alan Rumsley
First Defendant : Bruce Havilah & Associates
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Anderson v McPherson [No 2] [2012] WASC 19
Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; (1998) 195 CLR 566
Calverley v Green [1984] HCA 81; (1984) 155 CLR 242
Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380
Clifton v Chinnery [2011] WASC 294
Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394
Como v Helmers [2011] WASC 179
Crabb v Arun District Council [1976] Ch 179
Delaforce v Simpson-Cook [2010] NSWCA 84
Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101
Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612
Sullivan v Sullivan [2006] NSWCA 312
Tadrous v Tadrous [2012] NSWCA 16
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
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Table of Contents
Introduction 4
The claim for equitable compensation 5
(1) There is nothing pleaded which could support a claim for equitable compensation 5
(2) The facts upon which the plaintiffs' submissions rely for equitable compensation
are an inaccurate description of my findings of fact 7
- The submission concerning the contributions of the plaintiffs 8
The submission that I found that the plaintiffs' contributions were not a gift 8
The submission concerning the plaintiffs' intention to set themselves up for retirement 10
(4) An award of equitable compensation would be directly inconsistent with my
rejection of a resulting trust and findings concerning the Anstey Road Agreement 15
The declaration concerning the ANZ loan 15
The orders sought for the payment of rates and Water Corporation charges 16
Conclusion: orders made 18
Costs 18
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- EDELMAN J:
[These supplementary reasons were delivered orally. This written version has been formatted and edited for typographical and grammatical errors.]
Introduction
1 On 25 January 2012, I delivered my reasons for decision in this matter: Anderson v McPherson [No 2] [2012] WASC 19. The issue concerning an order for sale of the Anstey Road property under s 126 of the Property Law Act1969 (WA) had been deferred until after judgment. The making of orders was adjourned, in particular to allow the plaintiffs the opportunity to make any submissions on this point as well as submissions concerning equitable compensation.
2 At the hearing before me this morning the appropriate orders for sale were common ground. Those orders are:
1. The plaintiffs are entitled to an order for the sale of the property at Anstey Road, Forrestdale contained in certificate of title vol 64 folio 39A (the Anstey Road Property);
2. The plaintiffs have liberty to apply for further orders in relation to the sale of the Anstey Road Property if required.
3 As for the issue of equitable compensation, that issue arose because at the time judgment was handed down, counsel for the plaintiffs submitted that my reasons for decision supported the award to the plaintiffs of equitable compensation. Although equitable compensation had been pleaded, counsel for the plaintiffs accepted in opening that there was nothing in the pleading to support such a claim. No submissions concerning equitable compensation were made by counsel for the plaintiffs either in opening or in closing. It was not identified as an issue in the agreed statement of facts and issues.
4 At the handing down of my decision, when the issue of the basis upon which equitable compensation was raised, I asked counsel of the basis on which it might be awarded. Counsel for the plaintiff said: '[i]n the time available I have not been able to identify properly the cause of action' (ts 273). For the reasons which follow, no basis was identified at the hearing before me today either. And the claim for equitable compensation should be refused for four reasons.
5 There were also issues raised this morning concerning the appropriate form of the declaration concerning the liability of the
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- defendants in relation to the ANZ loan; declarations were also sought concerning claims for liability relating to rates and charges falling within a general prayer for relief in the statement of claim; and orders were sought as to costs.
The claim for equitable compensation
6 The plaintiffs' claim for equitable compensation should be refused for four reasons.
(1) Nothing is pleaded which could support an award of equitable compensation.
(2) The facts upon which the plaintiffs' submissions rely for equitable compensation are not an entirely accurate description of my findings of fact.
(3) There is no legal basis for an award of equitable compensation.
(4) An award of equitable compensation would be inconsistent with my rejection of a resulting trust and my findings concerning the Anstey Road Agreement.
I will deal with each of these reasons in turn.
(1) There is nothing pleaded which could support a claim for equitable compensation
7 In my reasons for decision I explained why the only trust sought by the plaintiffs in this case was a resulting trust. In opening submissions counsel for the plaintiffs, in response to a question from me concerning the nature of the trust which was claimed, emphasised that the resulting trust was the only basis upon which the claim for a trust was brought (ts 9; Monday 3 October 2011). The following exchange then occurred:
EDELMAN J: ... one matter which I neglected to mention to you in opening is I understand you also have a claim for equitable compensation. Is that right, or this is the - - -
COUNSEL: I certainly pleaded a claim for equitable compensation. I think the answer is that it can only go to the improvements which on the other relief we're seeking is not a matter that's going to bite as an alternative I think, I think is the proper answer.
EDELMAN J: Yes. Certainly after trial you can - or in closing you can indicate - - -
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- COUNSEL: Yes, the form of relief.
EDELMAN J: - - - the basis upon which any claim for equitable compensation could be sought.
COUNSEL: Yes.
EDELMAN J: It doesn't seem to me that there is anything - - -
COUNSEL: No, I know. I accept that.
EDELMAN J: - - - pleaded that could give rise to that.
COUNSEL: I do accept that, your Honour, and I must say I had just overlooked it in going back on the basis that I couldn't see how I was going to go to it so at the moment I think that means we both agree it seems unlikely it's going to be a relevant issue.
8 In an agreed statement of facts and issues filed on 10 October 2001 shortly prior to trial, ten issues were identified. None of those concerned a claim for equitable compensation by the plaintiffs.
9 No application was made by the plaintiffs to amend their pleading to bring any cause of action which might entitle them to equitable compensation. Nor was there any mention of any claim by the plaintiffs for equitable compensation, other than the exchange I have described, in any written or oral opening submissions at trial either by counsel for the plaintiffs or counsel for the first defendant. Nor was there any mention of a claim by the plaintiffs for equitable compensation in any written or oral closing submissions at trial either by counsel for the plaintiffs or counsel for the first defendant.
10 After my publication of reasons equitable compensation has now been sought.
11 There may be cases where equitable compensation might be awarded as a remedy in place of a trust which would otherwise be available. Speaking of a constructive trust, the High Court said in Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; (1998) 195 CLR 566, 585 [42] that
before the court imposes a constructive trust as a remedy, it should first decide whether, having regard to the issues in the litigation, there are other means available to quell the controversy. An equitable remedy which falls short of the imposition of a trust may assist in avoiding a result whereby the plaintiff gains a beneficial proprietary interest which gives an unfair
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- priority over other equally deserving creditors of the defendant. (emphasis added)
12 This is not a case where, applying this obiter dicta, considerations such as a defendant's insolvency or third party rights might require equitable compensation to be considered as an alternative to a beneficial proprietary interest which would otherwise be recognised. The reason is because the plaintiffs' case for a trust was based solely on an assertion of a resulting trust (ts 59). And that case failed because the plaintiffs' assertion of a presumption of resulting trust was rebutted. Hence, even if equitable compensation might, in cases of insolvency or third party rights, need to be considered as an alternative to the recognition of an existing beneficial interest under a resulting trust as well as a constructive trust (a matter upon which I express no opinion) this was not a possibility in this case because the plaintiffs never had the beneficial proprietary interest claimed.
13 There are, of course, numerous other instances in which equitable compensation might be an available remedy for breach of an equitable obligation: Young, Croft and Smith On Equity (2009) 1115 [16.1150], 1117 [16.1190]. Some examples include claims for breach of confidence, knowing assistance in a breach of trust or fiduciary duty, unconscionable dealing, or estoppel. None of those claims was pleaded by the plaintiffs. None was ever raised before me. The first defendant's case may have been run very differently if any of those had been pleaded.
(2) The facts upon which the plaintiffs' submissions rely for equitable compensation are an inaccurate description of my findings of fact
14 Counsel for the plaintiffs submitted in writing (par 27) that equitable compensation should be awarded based upon my findings that:
(a) 'the contributions of the [p]laintiffs were in the order of 91% of the purchase price' (citing [121] of my reasons);
(b) the contributions of the plaintiffs were 'not a gift' (citing [153] of my reasons); and
(c) 'the objective intention [of the plaintiffs] was to set themselves up for retirement' (citing [169] of my reasons).
15 Considerable emphasis was placed in oral submissions upon the latter of these factors. These submissions concerning my findings of fact are not wholly accurate.
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The submission concerning the contributions of the plaintiffs
16 As to (a), at [121] of my reasons I did find that the contributions by the defendants to the purchase price was 9% (and 91% to the plaintiffs). However, in the very next sentence of that paragraph I explained that the defendants 'also took responsibility for repayment of the whole ANZ Anstey Road loan, with small initial contributions from Bruce and Carol.' As I explained (at [184]) this was a further part of Troy and Stephannie's contribution to the Anstey Road property. Although this is not a matter which would have been relevant to the quantification of any interest under a resulting trust it had the effect, as intended, of nearly doubling their contribution (see also my findings at [179] concerning other promised contributions from Troy and Stephannie).
17 In Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 the High Court held that mortgage payments made by Mr Calverley were not relevant to the calculation of the proportions by which the property was to be held on resulting trust. However, each of the judgments emphasised that in an equitable accounting the mortgage contributions may be relevant. If monetary relief were to be awarded reflecting an interest of the plaintiffs of 91% in the property then it may be that the defendants would be entitled, on an equitable accounting, to the proportion of the mortgage payments which they made which exceeded 9% of the property and possibly other contributions to expenses. Several of the judgments in the High Court recognised, or suggested, this possibility: see Calverley v Green (252 - 253) (Gibbs CJ), (263) (Mason & Brennan JJ), (in a passage with which Deane J agreed at (271)).
18 In other words, unlike the determination of an interest under a resulting trust, in quantifying equitable monetary relief it may be necessary to consider the overall contributions of the parties to the whole of the Anstey Road venture. Those overall contributions were not simply a case of a 91% contribution by Bruce and Carol and 9% by Troy and Stephannie. The contribution of Troy and Stephannie, once their accepted liability for the loan is included, was nearly double that amount and possibly more when other contributions are included.
The submission that I found that the plaintiffs' contributions were not a gift
19 As to (b), it is incorrect to describe my conclusion at [153] as being that the contributions of the plaintiffs were 'not a gift'. At [153] I said that '[a] presumption of advancement does not apply in relation to Stephannie' (emphasis added). I spent some time in my reasons explaining the operation of these 'presumptions'. This was necessary because
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- presumptions featured heavily in the case before me and there is some confusion as to the operation of the presumptions in relation to resulting trusts. I will not repeat my reasons save to emphasise that:
(1) a presumption is a standardised inference which allows a secondary fact to be proved without evidence; and
(2) the 'presumption of advancement' is simply a legal rule which dictates when the presumption of resulting trust does not apply.
20 Quite simply, my reasons were that a 'presumption of advancement' did not apply. In other words, the plaintiffs could have the benefit of a presumption of resulting trust although that presumption could still be, and was, rebutted by evidence. The rejection of a presumption of advancement is emphatically not, as asserted by counsel for the plaintiffs, a finding that the plaintiffs' contributions were not a gift.
21 At [132], I explained why the meaning of a 'presumption of advancement' concerns a 'list of relationships where the presumption of resulting trust does not apply'. The relationship of parent-in-law and daughter-in-law is not a relationship where the presumption of resulting trust is automatically excluded.
22 However, as I explained, the presumption of resulting trust (ie the presumption of declaration of trust for the plaintiffs) can plainly be rebutted by proof of positive facts inconsistent with any objective intention to create a trust. At [154] - [185] of my reasons for decision I set out six reasons why the presumption of resulting trust was rebutted in this case. As I explained, each of those reasons would probably suffice, on its own, to rebut the presumption of resulting trust. Each of those six reasons showed a positive, objective intention by the plaintiffs that the defendants should enjoy the benefit of the rights transferred.
23 My finding was that the objective intention of Bruce and Carol was 'that Troy and Stephannie should enjoy the benefit of [their] rights [on the title]' or that they should be entitled to the use and enjoyment of their rights for their own benefit: [160]; see also [157], [168], [169], [171] - [172], [180]. I rejected the evidence of Bruce (ts 84) to the contrary (see [161]).
24 I did not conclude, nor was it suggested, nor could it have been suggested, that Troy and Stephannie's rights were somehow conditional upon payment of some sum of money to Bruce and Carol, other than the amounts agreed in the Anstey Road Agreement.
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25 In my reasons I preferred to describe Bruce and Carol's objective intention as being that Troy and Stephannie should enjoy the benefit of their legal rights, rather than using the label 'partial gift' or 'gift'. One reason why it is awkward to use the label 'gift' (or, more properly, 'partial gift') to describe the rights acquired by Troy and Stephannie is because their legal title to the Anstey Road property was transferred for full value by the vendor, not by the plaintiffs.
26 However, with this caveat, there is no difference between a description of the intention of Bruce and Carol that their son and daughter-in-law have the benefit of the registered legal rights to the Anstey Road property and a description that the intention of Bruce and Carol was that a gift was intended of any excess contribution by Bruce and Carol towards their son and daughter-in-law obtaining the half interest in the Anstey Road property.
The submission concerning the plaintiffs' intention to set themselves up for retirement
27 As to (c), it is inaccurate to describe my conclusion from the conversation referred to at [49] as only that 'the objective intention [of the plaintiffs] was to set themselves up for retirement' (citing [169] of my reasons). In oral submissions counsel for the plaintiffs accepted that this description only referred to half of the relevant conversation.
28 At [169] of my reasons I referred to this conversation which Bruce had had with Stephannie and Troy a year before the purchase of the Anstey Road Property. The conversation (see [49] and [169]) involved Bruce saying: 'when Carol and I were setting ourselves up for retirement, eventually you will have to buy your own house and we will sell [the Baal Street property]'.
29 The second half of the conversation is important. It suggested that Troy and Stephannie would buy their own house on the sale of the Baal Street property. As I found in my reasons for decision at [169], the joint purchase of the Anstey Road Property a year later achieved that goal. There was no suggestion, a year later when the Anstey Road property was purchased, that the interest of Troy and Stephannie would be conditional upon their payment to Bruce and Carol of approximately $183,000. As I will discuss in a moment, my finding at [180] was that the Anstey Road Agreement (the existence of which was an agreed fact at trial) 'carefully divided all the responsibilities concerning the Anstey Road property'.
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30 As to the first half of the conversation, counsel for the plaintiffs submitted that the meaning of the words spoken was that when the Baal Street property was eventually sold, the proceeds would be used in a way by Bruce and Carol so that they were financially no worse off. In other words, the effect of the submission was that these words would reasonably have been understood by Troy and Stephannie, and would have the legal effect, to require them to reimburse Bruce and Carol for the extent to which Bruce and Carol were financially worse off as a result of the Anstey Road purchase. There are several problems with this submission.
31 First, the submission was made today for the first time. It was not the subject of any pleading, nor was it one of the issues which the parties raised in the statement of agreed issues at the start of the trial.
32 Second, this construction is inconsistent with the first half of the conversation which did not suggest that Troy and Stephannie's ownership of their own home would be conditional upon ensuring that Bruce and Carol were not financially worse off.
33 Thirdly, the proposed construction is a purely financial view of 'retirement' which is not consistent with my findings concerning the domestic or family arrangement and the expectations at the time of purchase of the Anstey Road property. At [185] of my reasons I said this:
Although the contribution of Troy and Stephannie was not equal in quantum to the generous contribution of Bruce and Carol, the Anstey Road property was purchased as a family venture. There had been no discussion of the arrangement being a tenancy as had occurred at Baal Street. At Anstey Road, it was agreed that the family would live together; they would share the responsibilities of life; they would engage in their hobbies such as Bruce's breeding of exotic parrots and Stephannie's horse riding; Bruce and Carol would interact on the same property with their grandchildren; they would all 'chip in' for purchases from the shops (Stephannie's witness statement par 4hh); and the mortgage liability would mainly be paid by Troy and Stephannie until after the rear house was completed, when it would be exclusively paid by Troy and Stephannie.
- See also [238].
34 As I explained, at the Anstey Road property Bruce also built aviaries for his hobby of raising exotic parrots. Separate accommodation for Bruce and Carol was built. Bruce and Carol had found a property in which to live with their son, Troy, and daughter-in-law, Stephannie, as well as their grandchildren. It was also a property which was expected by
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- Bruce to appreciate significantly in value (see ts 83), a substantial appreciation which did occur. And, as I also explained, at Anstey Road the arrangement was that Bruce and Carol would not pay any of the mortgage expenses. Their outgoings would be minimal.
35 Fourthly, as I explained in my reasons the conversation upon which counsel for the plaintiffs relies occurred a year before the purchase of Anstey Road when the defendants were living in Baal Street. As I explained at [172], when the Baal Street property was sold a year later, Bruce and Carol's discussions concerning buying a new property for their retirement were only between themselves.
(3) There is no legal basis for an award of equitable compensation
36 Counsel for the plaintiffs submitted that the rejection of proprietary relief (on the basis of a resulting trust) does not conclude the matter because 'the relevant enquiry is to determine "what was the minimum equity to do justice to the plaintiff", or the "minimum equity principle"'.
37 Counsel for the plaintiffs relied upon the following cases: Crabb v Arun District Council [1976] Ch 179, 193 - 194 (Scarman LJ); Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (without a page reference but citing Mason CJ & Wilson J); Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 (without a page reference but citing Brennan J); Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380 [124] (Kirby J); Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612, 625 (Deane J); Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101, 124 [46] (citing Kirby J although the reasons at the page cited are those of Gleeson CJ, McHugh, Gummow & Callinan JJ); Sullivan v Sullivan [2006] NSWCA 312 [23] (citing Handley, Hodgson & McColl JJA although the pinpoint reference is only to Handley JA).
38 None of these cases supports the award of equitable compensation in the absence of an identified cause of action.
39 In Crabb (193), Scarman LJ explained that the question of the 'extent of the equity' (or minimum equity) was preceded by a question of 'is there an equity established?'. The 'equity' or cause of action in that case was an estoppel.
40 In Waltons Stores (404), Mason CJ and Wilson J quoted from Scarman LJ's reference to a 'minimum equity' and explained that the
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- decision was 'consistent with the principle of proprietary estoppel'. Again, the cause of action in that case was based on estoppel.
41 In Commonwealth v Verwayen (428 - 429), Brennan J also quoted from Scarman LJ's reference to a 'minimum equity', describing it as a 'remedy'. That reference immediately followed the statement that 'equitable estoppel yields a remedy in order to prevent unconscionable conduct on the part of the party who, having made a promise to another who acts on it to his detriment, seeks to resile from the promise'.
42 The passage of Kirby J cited in Cardile v LED Builders Pty Ltdconcerned confining relief to the minimum equity consequent upon a proved cause of action for an asset preservation order.
43 In Giumelli v Giumelli,the passage in the plurality reasons, [46], cited by counsel for the plaintiffs, referred to Brennan J's decision in Waltons Stores, and the minimum equity needed to avoid the relevant detriment in that estoppel case. Giumelli v Giumelli was also a case where the cause of action was based on estoppel.
44 In Sullivan v Sullivan [23], Handley JA referred to the minimum equity principle, citing the estoppel cases including Crabb, Verwayen, and Giumelli v Giumelli. His Honour's comments were also directed at relief based upon the proof of a claim for estoppel.
45 It is, therefore, impossible to discern from references in these cases, or in any case of which I am aware, to a 'minimum equity' principle giving a right to equitable compensation in the absence of an identified cause of action. This is unsurprising. The points made in my reasons at [255] - [257] about generalised references to 'unconscionability', and the authorities described, apply equally to claims for compensation based upon assertions of a 'minimum equity to do justice'.
46 Since most of the authorities relied upon by counsel for the plaintiff concerned a cause of action based upon estoppel, it is necessary to reiterate that no estoppel was ever pleaded in this case. No evidence was led, nor any cross-examination conducted, of an unambiguous encouragement or representation made by the defendants, or an assumed state of affairs, for the purposes of a claim to estoppel. In turn, the first defendant did not lead any evidence, or cross-examine, concerning whether any such representation or state of affairs was acted upon by the plaintiffs or whether it was reasonable to depart from any assumed state of affairs. Nor was any evidence led by the plaintiffs, or cross-examination conducted, concerning the extent of any detriment which would be
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- sustained by departure from any representation or assumption. Nor was any evidence led for the purposes of an estoppel concerning
the conscionability (or not) of resiling from [any] encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character.
See Delaforce v Simpson-Cook [2010] NSWCA 84 [3] (Allsop P with whom Giles JA agreed) and Tadrous v Tadrous [2012] NSWCA 16 [48] (Meagher JA, with whom Young JA & Handley AJA agreed).
47 There is a further difficulty with the plaintiffs' submission that it is necessary to enquire as to the minimum equity to do justice to the plaintiffs. This further difficulty is that there is real doubt whether a minimum equity principle exists in Australia even if a cause of action is established.
48 In Sullivan v Sullivan [23], Handley JA referred to the approach taken in the plurality decision in Giumelli v Giumelliwhich permitted the remedy for an estoppel to be a money sum representing the value of the promised land as the prima facie relief, displaced only if this relief for an estoppel would be 'inequitably harsh': see especially Giumelli v Giumelli(123) [42]. His Honour said of the operation of the minimum equity principle in relation to estoppel that
[t]he minimum equity principle was applied in Verwayen ... by Mason CJ (441) and Brennan J (429, 430), but since Giumelliit is probably not the law in this country'.
- Hodgson JA (with whom McColl JA agreed) agreed with Handley JA on this point [94].
49 In later cases, including in this jurisdiction, it has been reiterated that there is no principle in estoppel cases requiring a court to enquire into a 'minimum equity' because generally an estopped party can only avoid detriment created by resiling from the assumption or expectation that they had engendered by making good that assumption or expectation: see, for example, Como v Helmers [2011] WASC 179 [77] (Corboy J); Clifton v Chinnery [2011] WASC 294 [48], [55], [69] (Kenneth Martin J).
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(4) An award of equitable compensation would be directly inconsistent with my rejection of a resulting trust and findings concerning the Anstey Road Agreement
50 At [157], I rejected the plaintiffs' claim for a resulting trust for six reasons most of which would have been sufficient, on their own, to show that the plaintiffs objectively intended that the defendants should enjoy the benefit of their one half joint interest in the Anstey Road property. Later, in relation to a counterclaim, I said at [238] that the objective basis of the Anstey Road agreement was that 'the parties would enter a joint family enterprise and have shared ownership of the Anstey Road property'. See also [185].
51 As I explained at [180], the Anstey Road Agreement (the existence of which was an agreed fact at trial) 'carefully divided all the responsibilities concerning the Anstey Road property'. There was no evidence, nor was there any submission, at any stage of the trial that the Anstey Road Agreement should contain an implied term that the defendants make payment to the plaintiffs of $183,455.45. No such condition can be implied into the Anstey Road agreement.
52 Nor was there any evidence, or any submission, which could have established any objective intention that the defendants' joint interest in the Anstey Road property should be subject to such a condition of payment. Such a condition would, as counsel for the second defendant submitted in written submissions, be inconsistent with the Anstey Road Agreement.
53 Any award of equitable compensation requiring the defendants to make that payment to the plaintiffs, on the basis of some unidentified cause of action, and premised upon a 'minimum equity to do justice', would therefore be inconsistent with my findings concerning the objective agreed contract between the parties.
The declaration concerning the ANZ loan
54 In my reasons I explained at [190] that the extent of a declaration to be granted should be co-extensive with the rights and obligations agreed by the parties in relation to the ANZ loan account. The duty which the defendants undertook in the Anstey Road Agreement was for repayment of the ANZ loan (see my reasons at [69(g)], [118] and [196]) which, from the perspective of the ANZ bank, was the subject of joint and several liability of all of the plaintiffs and the defendants.
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55 Counsel for the plaintiffs initially submitted that the appropriate order was as follows:
Save only in respect of any rights that the Australian and New Zealand Banking Group Limited (ANZ) has as against the Plaintiffs, the Defendants are liable, jointly and severally, to the ANZ and to the Plaintiffs, for the balance outstanding on ANZ loan account with BSB 016-780 and account number 2551-21867 and the defendants indemnify the Plaintiffs against any claim, howsoever arising out of or in relation to that account. (emphasis added)
- This declaration is appropriate, save for the words I have emphasised in italics. The terms of this 'howsoever arising' indemnity are not co-extensive with the agreed rights and obligations of the parties in relation to the ANZ loan account. During the hearing this morning this was accepted by counsel for the plaintiff. There was no dispute about the remainder of the order.
The orders sought for the payment of rates and Water Corporation charges
56 Counsel for the plaintiffs sought orders, encompassed in a general pleading in the statement of claim for other appropriate orders, that:
1. By 29 February 2012, the first defendant do pay the amount outstanding to the City of Armadale in the amount of 25% of the total charges levied in respect of the property at Anstey Road Forrestdale contained in certificate of title vol 64 folio 39A (the Property), from 2006 to date and any amount by way of charges for late payment levied as a result of the first defendant's failure to pay any amount when due and payable.
2. By 29 February 2012, the first defendant do pay the amount outstanding to the Water Corporation in the amount of 25% of the total charges levied in respect of the Property, from 2006 to date and any amount by way of late payment levied as a result of the first defendant's failure to pay any amount when due and payable.
3. The plaintiffs have liberty to apply for further orders in relation to orders 1 and 2 in the event the first defendant does not pay the amounts.
57 In my reasons, I referred to the following:
(a) In the Anstey Road Agreement, it was agreed that the cost of rates and services for the Anstey Road property would be shared
- equally between Bruce, Carolyn, Troy and Stephannie: [69(f)]; and
- (b) There are currently amounts owing by Stephannie in relation to Shire rates and Water Corporation charges: [84].
58 Exhibit 14 at trial was a statement of rates due from the City of Armadale which suggested that payments of rates had not been made by Stephannie. The first defendant who, for avoidance of confusion, I have referred to as Stephannie, has now sworn an affidavit saying, amongst other things, that:
(1) she has potential concerns about adjustment to the rates by the plaintiffs on account of water drunk by horses rather than a flat 25% amount of the total excluding interest;
(2) she opposes any claim for interest on the rates on the basis that the plaintiffs have prevented her from making timely payment of the rates.
59 In circumstances in which there may be controversy concerning matters such as interest on any liability of Stephannie's, or adjustment to Stephannie's liability, but these issues were not raised at trial (either in evidence or cross-examination), the orders which should be made concerning rates and water charges which are due and payable by Stephannie should declare only her obligation, as found in my reasons, to pay 25% of these charges. Her counsel accepted that the appropriate orders are as follows:
1. By 2 April 2012, the first defendant do pay to the City of Armadale that portion of the amount of the total charges representing 25% of the charges levied in respect of the property at Anstey Road Forrestdale contained in certificate of title vol 64 folio 39A (the Anstey Road Property), from 2006 to date less payments previously made by her.
2. By 2 April 2012, the first defendant do pay to the Water Corporation that portion of the amount of the total charges representing 25% of the charges levied in respect of the Anstey Road Property, from 2006 to date less payments previously made by her.
(Page 18)
Conclusion: orders made
60 The orders which I make are as follows:
1. There be a sale by the plaintiffs of the property at Anstey Road Forrestdale contained in certificate of title vol 64 folio 39A (the Anstey Road Property), subject to the agreement of the parties or further order of the court as to the manner of the sale;
2. The plaintiffs have liberty to apply for further orders in relation to the sale of the Anstey Road Property if required.
3. Save only in respect of any rights that the Australian and New Zealand Banking Group Limited (ANZ) has as against the plaintiffs, the defendants are liable, jointly and severally, to the ANZ and to the plaintiffs, for the balance outstanding on ANZ loan account with BSB 016-780 and account number 2551-21867.
4. By 2 April 2012, the first defendant do pay to the City of Armadale that portion of the amount of the total charges representing 25% of the charges levied in respect of the Anstey Road Property from 2006 to date, less payments previously made by her.
5. By 2 April 2012, the first defendant do pay to the Water Corporation that portion of the amount of the total charges representing 25% of the charges levied in respect of the Anstey Road Property from 2006 to date, less payments previously made by her.
6. Other than as ordered in orders 1 - 5 above, the plaintiffs' claim is dismissed.
7. The first defendant's counterclaim is dismissed.
Costs
61 I will hear now further submissions from counsel as to costs.
0
15
1