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…

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 82
Case: [2004] WADC 82
Decision Date: 13 MAY 2004

CaseChat Overview and Summary

The case of Brownlie v Thorne, heard in a Western Australian court, involves a dispute between the plaintiff, Brownlie, and the defendant, Thorne. Thorne, a joint proprietor with Brownlie of certain property, is seeking to set aside a judgment based on the allegation that he entered into a deed under duress. The deed involved the transfer of the entire property to Thorne in exchange for payments, one of which Brownlie now claims in this action.

The legal issues the court had to decide centered on whether Thorne's entry into the deed was induced by duress or coercion exerted by Brownlie. The court examined whether Brownlie's refusal to use the property as security for a loan constituted unconscionable conduct or unlawful pressure that would invalidate the deed. Thorne argued that Brownlie's refusal, given the dire financial situation of their business, amounted to coercion. The court had to assess whether Brownlie's refusal to participate in the security arrangement constituted a legitimate pressure that went beyond what the law considers acceptable.

The court concluded that Brownlie's refusal to make her share of the property available as security did not amount to unconscionable conduct or unlawful conduct. The court found that a registered proprietor of an interest in property could not be held liable for such conduct merely by refusing to advance their property as security for a loan, regardless of the consequences for the other party. The court further noted that if Brownlie had indeed been a trustee for their son, her refusal to provide the property as security would have been in line with her fiduciary obligations. The court rejected Thorne's assertion that the refusal constituted duress, finding that Thorne's acceptance of the benefits of the transaction without shouldering the liabilities was inconsistent.

The final orders of the court would be communicated separately, but the court made it clear that Thorne's defence of duress was not substantiated based on the evidence and arguments presented.

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

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.