Brownlie v Thorne - [2004] WADC 202

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: BROWNLIE -v- THORNE [2004] WADC 202

CORAM: CHANEY DCJ

HEARD: 15 SEPTEMBER 2004

DELIVERED : 11 OCTOBER 2004

FILE NO/S: CIV 1599 of 2003

BETWEEN: PHILIPPA BROWNLIE
Plaintiff (Respondent)
AND
GORDON THORNE
Defendant (Appellant)

Catchwords:

Default judgment - Application to set aside - No credible defence

Legislation:

Nil

Result:

Application dismissed

Representation:

Counsel:

Plaintiff (Respondent) : Mr R E Keen
Defendant (Appellant) : In person

Solicitors:

Plaintiff (Respondent) : Robertson Hayles
Defendant (Appellant) : In person

Case(s) referred to in judgment(s):

Brownlie v Thorne [2004] WADC 82
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40
Palmer v Prince [1980] WAR 61
Parker v Transfield Pty Ltd & Anor [2003] WASCA 382

Case(s) also cited:

Barton v Armstrong [1973] 2 NSWLR 598
Dabbs v Seaman (1925) 36 CLR 538
Magnacrete Ltd v DouglasHill (1988) 48 SASR 565
Winfield Development Ltd v City of Winnipeg [1989] 4 WWR 558

CHANEY DCJ: This is an appeal from a decision of a Deputy Registrar made on 13 May 2004 when he dismissed an application by the appellant to set aside a default judgment entered on 21 August 2003.
The writ in this action was issued on 24 July 2003, and served on 31 July 2003. On 21 August 2003, default judgment was entered, and on 10 September 2003, a writ of fieri facias issued. On 26 September 2003, Mr Thorne wrote to the respondent's solicitors indicating an intention to seek to set aside the default judgment. On 7 October 2003, the respondent's solicitors replied indicating that any application to set aside the judgment would be opposed. The bailiff sought to enforce the writ of fieri facias but was unsuccessful. On 3 March 2004, an application to set aside the judgment was filed. It was heard before the Deputy Registrar on 30 April 2004, and on 13 May 2004 the application was dismissed.

The nature of the claim

The claim arises on a covenant contained in a document described as a "Deed of Security of Agreement" entered into between the appellant and the respondent on 25 March 2002. That deed, which was annexed to an affidavit of Keith Gordon Sorenson, the respondent's solicitor, provided, inter alia, that the appellant pay to the respondent the sum of $100,000 by 25 March 2003. The default judgment was for that sum together with interest.
The appellant and the respondent formerly lived together, and they have a child. The deed was entered following the breakdown of their relationship and in order to facilitate their separation. It recites that they are the registered proprietors of a property known as 76 Dunedin Street, Mount Hawthorn. It also recites that Mr Thorne was the owner of a business known as Omega Steel Fabrications, and that the respondent is a "shareholder of Omega Steel Fabrications". The deed provided that the respondent was to transfer to the appellant her interest in the Mount Hawthorn property. The…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brownlie v Thorne

Details

AGLC: Brownlie v Thorne [2004] WADC 202
Case: [2004] WADC 202
Decision Date: 11 OCTOBER 2004

CaseChat Overview and Summary

Brownlie v Thorne is a case before the Supreme Court of Western Australia, which concerns an application to set aside a default judgment. The dispute revolves around a mortgage on a property held jointly between the parties, where the plaintiff, Ms Brownlie, sought to enforce the terms of a mortgage deed against the defendant, Mr Thorne. The primary issue before the court was whether Mr Thorne had a credible defence to the enforcement action, which would allow the court to set aside the default judgment. The court had to determine if the pressure exerted by Ms Brownlie, in refusing to encumber her interest in the property for further borrowings, was illegitimate and unconscionable, thereby invalidating the mortgage deed.

The court considered the ratio from Crescendo Management Pty Ltd v Westpac Banking Corporation, which outlines the criteria for determining if economic pressure amounts to duress. The court found that Ms Brownlie's refusal to utilise her interest in the property for further borrowings was not unconscionable, as it did not constitute unlawful conduct or pressure beyond what the law recognises as legitimate. The court further examined the evidence provided by Mr Thorne, which aimed to demonstrate that Ms Brownlie had no beneficial interest in the property, and that her refusal was therefore unconscionable. However, the court concluded that the evidence was insufficient to support this claim, as Ms Brownlie was the legal owner of a one-half interest in the property. The court held that even if Mr Thorne was under significant psychological, emotional, and financial pressure, this alone did not render the pressure illegitimate or the reliance on the deed unconscionable.

The court ultimately decided that Mr Thorne's proposed defence and counterclaim did not provide a credible basis for setting aside the default judgment. The court found that the evidence did not establish that Ms Brownlie had no beneficial interest in the property, and therefore, her refusal to allow further borrowings was not unconscionable. Consequently, the court dismissed the application to set aside the default judgment, and upheld the enforcement of the mortgage deed. The court's decision highlights the importance of establishing a credible defence in order to challenge the enforceability of a contract, particularly in situations involving claims of unconscionability and duress.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, it was said by McHugh JA (with whom Samuels, Mahoney JJA agreed) that (at 46):"The proper approach in my opinion is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate. Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress." If Ms Brownlie simply refused to encumber her interest in the property to enable further borrowings for Mr Thorne's business, and thereby closed off Mr Thorne's options for further borrowings unless he purchased her interest, it cannot be said that that pressure was illegitimate. It must be borne in mind that the financial pressure being exerted by a bank and other creditors of Mr Thorne's business was independent of Ms Brownlie. Her refusal to utilise her own assets to alleviate the pressure brought by others on Mr Thorne cannot be categorised as unconscionable. In determining whether Mr Thorne has a defence to the action on the deed, the question becomes whether he can establish that she did not have any beneficial interest in the property, so that her refusal to allow further borrowings was unconscionable. In my view, the evidence adduced by Mr Thorne simply does not establish that proposition. Much of Mr Thorne's evidence, and much of his submission, was directed to the fact that Ms Brownlie had made no financial contribution to the purchase of the house, and the payment of the mortgage. By itself that fact establishes little. She was the legal owner of a one half interest. Accepting for the purposes of this application that, in the context of a breakdown of his relationship with the respondent, his serious financial circumstances, and his belief that the respondent was acting unreasonably, the appellant was under enormous psychological, emotional and financial pressure, that, of itself, would not provide him with a defence to the action on the deed. Those matters alone do not make the pressure exerted upon him illegitimate in the sense that reliance by the respondent on the resultant deed could be said to be unconscionable. If there is any element of unconscionability, it must arise because an absence of any entitlement on the part of the respondent to any value for her interest in the property. In seeking to set aside summary judgment, a minute of proposed defence and counterclaim was filed. The basis upon which it was contended that the respondent had no beneficial interest in the house was by reason of an agreement which was pleaded in the following way:"a.In about January 1990 the Plaintiff and the Defendant together commenced to occupy a dwelling, being the house property (hereinafter referred to as the Property) at 76 Dunedin Street Mount Hawthorn Western Australia;b.they did so pursuant to a verbal agreement (hereinafter referred to as the agreement) entered into between them after the Plaintiff and the Defendant became aware that the Plaintiff expected to have a child of the Defendant's;c.the agreement provided for them both to so dwell at the Property and otherwise to cooperate with one another in such matters of daily living as would advance the best interests of their infant son Daniel, born 3rd March 1990;d.the agreement further provided for the Defendant toi.pay for the purchase of the property by making payments as due and payable from time to time under a mortgage loan facility obtained by the Defendant to finance the purchase of the Property andiipay for its upkeep and outgoings after acquisition andiii.cause the Plaintiff to be registered as a proprietor of an equal legal interest in the Property as a joint tenant with the Defendant,to the intent and for the sole purpose of the Defendant providing a source of a degree of financial security for the child Daniel in the event of the Defendant's death during Daniel's infancy, ande.the Defendant performed the terms of the agreement which are referred to in sub‑paragraphs c. and d. hereof."