Brownlie v Thorne - [2004] WADC 82

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: BROWNLIE -v- THORNE [2004] WADC 82

CORAM: DEPUTY REGISTRAR HEWITT

HEARD: 30 APRIL 2004

DELIVERED : 13 MAY 2004

FILE NO/S: CIV 1599 of 2003

BETWEEN: PHILIPPA BROWNLIE
Plaintiff
AND
GORDON THORNE
Defendant

Catchwords:

Practice - Western Australia - Application to set aside judgment - Allegation execution occurred by coercion or duress

Legislation:

Nil

Result:

Application dismissed

Representation:

Counsel:

Plaintiff: Mr R E Keen
Defendant: Mr R W Bower

Solicitors:

Plaintiff: Robertson Hayles
Defendant: Corser & Corser

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

Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40

Case(s) also cited:

Barton v Armstrong [1976] AC 104
Crayden v Ottaviano [2003] WASCA 20
National Australia Bank v Singh [1995] 1 Qd R 377
North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] QB 705
Parker v Transfield Pty Ltd [2000] WASCA 382
Richardson v Howell (1892) 8 TLR 445
Say v Fitzpatrick, unreported; FCt SCt of WA; Library No 6865; 14 September 1987
Scolio Pty Ltd v Cote (1992) 6 WAR 475

DEPUTY REGISTRAR HEWITT: The writ in this matter was issued on 24 July 2003 and served on 31 July 2003. There was no appearance to the writ and as a consequence a judgment was entered in this Court on 21 August 2003 and a writ of fieri facias thereafter issued.
By summons filed 8 March 2004 the defendant has applied to set aside the judgment. At an earlier hearing on that chamber summons the execution was stayed pending the determination of these proceedings.
Two matters need to be considered on an application of this kind the first being the reason that the defendant failed to file an appearance at the time required by the rules. The evidence of the defendant on that issue is extremely thin. He alleges that on 7 August he posted a memorandum of appearance to the court but it was not accepted because he had not provided the correct cheque. That explanation is suspect and extremely so because in fact no fees are payable on the filing of an appearance. For the purposes of the exercise I am prepared to accept that the defendant did attempt to file an appearance in this Court but through some failure to follow proper procedures failed in doing so. It is to be noted however that there is no record of any attempt on his behalf on the court file but that is not necessarily indicative that what he is saying is not true.
The judgment is a regular judgment, and having accepted the explanation for the delay, it is now a requirement that the defendant demonstrate a defence on the merits.
The plaintiff's claim is pursuant to a deed entered between the two parties on 25 March 2002 under the terms of which the defendant was to pay to the plaintiff the sum of $100,000 by 25 March 2003. That such a deed was entered into is not in dispute nor is there any disagreement that the amount was not paid. The defendant however alleges that the deed upon which the plaintiff relies is void or voidable having been entered by reason of coercion and duress exerted upon him by the plaintiff. In order to understand that proposition it is necessary to look at the circumstances of the case.
The plaintiff and the defendant previously cohabited and were in that relationship from approximately 1998 until 2002 when they separated.
At an early stage in their relationship, when the plaintiff was pregnant with the defendant's child, the defendant purchased a home at 76 Dunedin Street, Mount Hawthorn, and registered it in the joint names of himself and the plaintiff. He states in his affidavit that his intention in registering an interest in the property in the plaintiff was to provide security for his then unborn son.
The plaintiff and the defendant continued to cohabit at the Mount Hawthorn property until the date of their separation in 2002.
The defendant appears to be the controlling hand of an enterprise known as Omega Steel Fabrications. The ownership of that property is in a company as a trustee of a family trust however the effective control is vested in the defendant.
The defendant states that as a result of a series of events in 2000 the business fell into acute financial distress and was unable to raise urgently needed working capital. The defendant approached the plaintiff seeking her cooperation in using the property of which they were registered as joint proprietors as a security for loan funds to be used by the business. The plaintiff refused any such arrangement and the situation of the business worsened and the need for capital grew greater. Ultimately the defendant entered the deed which I have earlier described under the terms of which he took the whole of the property in return for a number of payments including the payment for which the plaintiff has sued in this action. He now advances the defence that his entry into such a deed was induced by the coercion of duress of the plaintiff. In the case Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46 McHugh JA in dealing with this question said:
"The proper approach is to ask whether any applied pressure induced the victim to enter the contract and then asked 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."
In the present circumstances the plaintiff was the registered proprietor of a half interest in the relevant land. What is alleged to have been the pressure applied by her on the defendant is her refusal to make her share of the relevant property available as a security to support a loan to a business described by the defendant as in "acute financial distress …" (par 10 affidavit sworn 3 March 2004) which by late 2001 had an intense need for capital (par 11). It is alleged by the defendant that the plaintiff was motivated by some improper motive and was by her refusal applying pressure to induce him to enter the deed which he ultimately signed. In my view a person who is a registered proprietor of an interest in property by their refusal to advance that property as a security for a loan is not and cannot be guilty of unconscionable conduct or unlawful conduct whatever the consequences of the failure to secure the line of credit might be on the party making a request.
Counsel for the defendant developed the proposition that the position of trusteeship alleged by the defendant (such that the plaintiff is alleged to have held the property on trust for their son), in some way made her behaviour in the circumstances in question unconscionable. I would say the complete reverse. The defendant's business was in trouble and urgently needed a cash injection. It is suggested that the defendant as a trustee was under some sort of obligation to facilitate the advance by making the property of which she was a trustee available as a security. It is worth examining the proposal in detail. What was proposed is that the land be offered as a security for a loan to the business. There is no suggestion that the business was to pay any consideration to the plaintiff for allowing the property to be used as a security. No security was to be given to the plaintiff by the business. Therefore what was proposed is that the plaintiff should allow the value of the land which she held in trust to be diminished by the amount of the security, for no consideration whatever, and in the face of the circumstances where the financial position of the business was shaky. Rather than accusing the plaintiff of some level of unconscionable conduct by failing to cooperate I would have thought that had she been a trustee, which is a matter of debate in the proceedings, she would have acted in complete disregard of her obligations as a trustee were she to have agreed with the proposal which was put forward by the defendant. A further matter of some interest is the fact that the defendant has taken a transfer of the whole of the land and has procured a mortgage over the land in his capacity as the sole proprietor. His position appears to be that he is prepared to accept the benefit of the transaction without accepting any of the liabilities.
Another matter which I think relevant to the consideration of whether or not the contract should be set aside on the basis of duress or coercion is to consider whether or not the contract was in fact on favourable terms from the point of view of the party seeking to set it aside. In the present circumstances there is nothing whatever that I can see in the materials before me which suggest that the arrangements created by the deed were in any way unfair and operated to the detriment of the defendant. There has also been a substantial length of time since the deed was entered into and there is nothing in the papers before me to suggest that the defendant at any stage prior to the present application suggested that the arrangements set in place by the deed should be set aside by virtue of the taint of duress or coercion. In summary therefore I conclude that the behaviour of the plaintiff of which the defendant complains is incapable of being duress or coercion in a legal sense. There is therefore no basis upon which the defendant could set aside the deed upon which the plaintiff relies and flowing from that conclusion there is no defence in the present action. The application will therefore be dismissed.