Cresswell v Cresswell
[2017] VSCA 272
•28 September 2017
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2017 0001
| CHARLES JAMES CRESSWELL | First Applicant |
| And | |
| GAIL ANNE CRESSWELL | Second Applicant |
| v | |
| COREY CRESSWELL | Respondent |
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| JUDGES: | SANTAMARIA and McLEISH JJA and KEOGH AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 19 May 2017 |
| DATE OF JUDGMENT: | 28 September 2017 |
| MEDIUM NEUTRAL CITATION: | [2017] VSCA 272 |
| JUDGMENT APPEALED FROM: | [2016] VCC 1716 (Judge Macnamara) |
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EQUITY – Remedies – Specific performance – Availability of specific performance to enforce non-contractual obligations – Oral agreement for sale of property between parents and son – Where specific performance sought as remedy for estoppel and constructive trust claims – Where trial judge awarded specific performance of agreement.
COURTS AND JUDGES – Procedural fairness – Entitlement to fair trial – Where claim in contract not clearly pleaded – Where pleading used language of specific performance to describe remedies by way of estoppel and constructive trust – Where applicants at trial treated case as one of estoppel and constructive trust – Where trial judge awarded specific performance of agreement – Whether denial of procedural fairness – Water Board v Moustakas (1994) 180 CLR 491 and Suvaal v Cessnock City Council (2003) 200 ALR 1 applied.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr M Y Bearman With Mr K E Mihaly | Eales & Mackenzie |
| For the Respondent | Mr C R Northrop | Williams Winter |
SANTAMARIA JA
McLEISH JA
KEOGH AJA:
Introduction
Charles and Gail Cresswell (‘the applicants’) are the parents of Corey Cresswell (‘the respondent’) and his sister, Tamarand.
Prior to 30 November 2001, the applicants, the respondent and Tamarand agreed that:
(a) the applicants would purchase a property;
(b) the applicants would pay $100,000 towards the purchase price and borrow the remainder by a mortgage facility;
(c) the respondent and Tamarand would each contribute $125 per week to the repayment of the mortgage and would maintain the property;
(d) the applicants would hold the property as an investment for the benefit of the applicants, the respondent and Tamarand; and
(e) on the sale of the property, the proceeds of sale would be applied in payment of each party’s contributions and the balance divided equally between them.
By a contract dated 30 November 2001, the applicants purchased, for $294,750, a three-bedroom townhouse at 3 Annie Borat Close, Brunswick (‘the property’), more particularly described as certificate of title volume 10496 folio 982.
The applicants paid approximately $100,000 of the purchase price from their own funds. They borrowed the balance of $208,750, which included stamp duty and incidental expenses, from the Commonwealth Bank of Australia (‘the CBA’). The borrowed amount was secured by a first registered mortgage.
In January 2002, the applicants were registered as the property’s proprietors.
Shortly thereafter, the respondent and Tamarand took up residence. In general, they each paid $125 per week to the applicants by internet transfers to the applicants’ account with the Broken Hill Community Credit Union.
Towards the end of 2003, Tamarand ceased living at the property and making payments.
The respondent continued to (and still does) reside at the property. From time to time, he took in paying ‘boarders or tenants’.
Shortly after Tamarand stopped living at the property, the applicants, the respondent and Tamarand agreed that:
(f) Tamarand would no longer make payments towards the mortgage;
(g) the respondent would pay $500 a fortnight to the repayment of the mortgage;
(h) the applicants would hold the property as an investment for the benefit of themselves and the respondent; and
(i) on the sale of the property, the proceeds of sale would be applied in payment of each of the applicants’ and the respondent’s contributions, and the balance would be divided equally between them.
From 2004 until 2007, the respondent increased his payments to $500 per fortnight. In 2007, he commenced paying for outgoings related to the property.
In 2007, the applicants and the respondent agreed that the respondent would make full payment of the amounts due under the mortgage facility.
From March 2007, the respondent further increased the amount of his fortnightly payments to $662. From March 2008, he increased them to $750.
In 2009, the second applicant’s health deteriorated. In about April 2009, the respondent moved from Melbourne to live with his parents at their residence in Gum Paddock, near Broken Hill.
In September 2009, the applicants and the respondent agreed that:
(j) the respondent would make his payments of the mortgage directly to the CBA; and
(k) the applicants would transfer ownership of the property to the respondent on payment by the respondent of:
(i) the balance of the mortgage;
(ii) the $100,000 deposit paid by the applicants; and
(iii) other outgoings that had been paid by the applicants in respect of the property.
Shortly thereafter, the respondent commenced paying instalments under the applicants’ mortgage facility directly to their loan account with the CBA, and the applicants ceased doing so. The respondent made some arrangements to obtain a valuation of the property and a loan.
Towards the end of 2009, relations between the applicants and the respondent broke down and the respondent returned to Melbourne to live. The respondent has had limited contact with the applicants since then.
Throughout 2010 and 2011, the respondent continued making payments directly to the mortgage.
From July 2012 to November 2012, the respondent stopped paying the mortgage. In August 2013, he ceased paying altogether.
On 1 October 2012, the respondent lodged a caveat on the property’s title. The caveat provided:
The registered proprietors hold the land on trust for the Caveator pursuant to a constructive or resulting trust.
On 8 August 2014, the applicants lodged an application with the Registrar of Titles under s 89A of the Transfer of Land Act 1958 for the removal of the caveat.
Commencement of present proceeding
On 10 September 2014, the respondent commenced a proceeding in the Supreme Court, by generally indorsed writ, in order to prevent the caveat from lapsing. The indorsement of claim alleged that the respondent made payments towards the mortgage and other expenses connected with the property with the common intention with the applicants that, if he did so, he would be beneficially entitled to the property. It sought a declaration that the applicants held their interest in the property on trust for the respondent and an order that they do all things necessary to transfer the property to him.
The respondent did not file a statement of claim. However, on 17 October 2014, the applicants filed and served a defence and counterclaim. The defence alleged that the respondent was a tenant under two agreements made between the parties, and the alleged breach of those agreements formed the basis of the counterclaim.
The proceeding was subsequently transferred to the County Court.
On 18 April 2016, the matter came on for final hearing. In response to the respondent’s opening, the applicants raised an objection that the opening differed from the indorsement of claim. The respondent applied for, and was granted, an adjournment of the proceeding and leave to file an amended statement of claim.
The respondent filed an amended statement of claim dated 5 May 2016. The applicants filed a defence and counterclaim dated 31 May 2016.
Among other things, the amended statement of claim alleged that a number of agreements were made between the parties, culminating in an agreement made in about September 2009 (‘the 2009 agreement’).
In his amended statement of claim, the respondent alleged that:
(l) all the payments that the respondent had made since taking up residence at the property were made in reliance upon the agreements between him and the applicants;
(m) it was his common intention with the applicants that, if he made the payments, he would be beneficially entitled to the property;
(n) it was his common intention with the applicants that, if he made the payments referred to in the 2009 agreement, the property would be transferred to him upon payment by him of the balance of the mortgage and repayment of the deposit and other ‘outgoings’ paid by the applicants in respect of the property;
(o) it was unconscionable for the applicants to deny the respondent’s interest in the property and they were estopped from doing so; and
(p) hence, the applicants held the property for the respondent’s benefit under a constructive or resulting trust.
The relief claimed by the respondent included a claim for the specific performance of the 2009 agreement. He also claimed that the applicants held their interest in the property on a constructive or resulting trust for him and sought an order that they transfer the property to him on payment of the balance of the mortgage, the deposit that they had paid and other ‘outgoings’ paid by them in respect of the property.
On 12 October 2016, the respondent, by leave, filed a second amended statement of claim. It will be necessary to set out this pleading at length below.
On 19 October 2016, the applicants filed a second amended defence and counterclaim. Among other things, the applicants denied that any of the pleaded agreements were made and denied the respondent’s entitlement to an order for specific performance of the 2009 agreement or any other remedy.
Reasons of the primary judge
The trial was conducted over six days commencing on 24 October 2016. On 21 November 2016, the trial judge published reasons for decision.[1] The judge said that, during the hearing, the respondent ‘placed primary reliance upon his application for specific performance of the 2009 agreement’.[2] The trial judge considered the evidence and found that the parties had entered into the agreements alleged by the respondent.
[1]Cresswell v Cresswell [2016] VCC 1716 (Judge Macnamara) (‘Reasons’).
[2]Ibid [120].
The trial judge construed the requirement of the respondent in the 2009 agreement to pay the applicants the amount of the ‘outgoings’ paid by them in respect of the property to mean ‘outlays’, which included all loan repayments made by the applicants.[3]
[3]Ibid [138].
The trial judge held that there should be a decree of specific performance of the 2009 agreement.[4] The decree was made subject to the performance of conditions for payment by the respondent of the mortgage balance and other amounts to the applicants.[5]
[4]Ibid [140].
[5]On 20 December 2016, the trial judge ordered that:
Upon the plaintiff:
(a)making payment of $187,632.50 to the defendants; and
(b)repaying in full Commonwealth Bank loan account no. 349923203 and paying all fees and expenses to obtain a discharge of mortgage; and
(c)making payment to the defendants of any amount reasonably expended by the defendants in relation to the property between 22 September 2016 and the date of the transfer –
the defendants must provide to the plaintiff a duly executed transfer of land in registerable form (as prepared by the solicitors for the plaintiff) for the property contained in certificate of title volume 10496 folio 982 together with any other documents required to effect the transfer of the title.
The trial judge found it unnecessary to consider the estoppel or constructive and resulting trust claims made by the respondent, because the respondent had ‘obtained the relief which is his primary application’.[6] He described the trust claims as ‘fall back’ positions and said of them:
It is sufficient for me to observe that insofar as success, based on either of these claims, was dependent upon the establishment of a detriment sustained by [the respondent] as a result of acting upon the faith of arrangements with his parents, it is difficult to see how he has suffered a detriment in light of the expert rental evidence … showing that [the respondent] was not paying above market rental. To put it another way, [the respondent] would be no worse off if his claims to an equitable interest in this property were to fail, than if he had simply gone to the private rental market for the period from 2002 to date.
It may be that a detriment might be established based upon the view that what [the respondent] paid to his parents and the mortgagee would, in the absence of a decree enforcing the 2009 agreement, be ‘dead money’, but he lost the opportunity of entering the market as a home buyer purchasing a property from an independent vendor outside his own family. These matters were not gone into in evidence in any way. Whilst a finding of detriment along those lines might in theory be made, the evidentiary basis for it does not seem to have been made at the trial in this proceeding.[7]
[6]Reasons [141].
[7]Ibid [142]–[143].
The trial judge dismissed the counterclaim on the basis that there was no evidence of the tenancy agreements alleged by the applicants.[8]
[8]The applicants have made no application in respect of the dismissal of their counterclaim.
Proposed grounds of appeal
In their application for leave to appeal, the applicants propose the following grounds of appeal:
1. Having found that the respondent had not established that he suffered detriment from making contributions towards the applicants’ mortgage for the purchase of [the property] in reliance upon the applicants’ agreements with him, the learned Trial Judge should have found that the applicants did not hold the property on a constructive trust for the respondent as, in the absence of detriment, the respondent could not establish that he was entitled to any remedy by way of constructive trust in consequence of (a) an equitable estoppel resulting from his reliance upon the applicants’ promises by the agreements, or (b) under a common intention constructive trust.
2. The learned Trial Judge should have found that the applicants did not hold the property for the respondent on a resulting trust, as the respondent’s contributions to the applicants’ mortgage facility did not engage any requirement for the existence of such a trust; viz (a) the property was not registered in the applicants’ name as strangers to the respondent, (b) the respondent did not contribute to the purchase price for the property but the repayment of the applicants’ mortgage facility, and (c) the respondent did not himself take the obligation of the mortgage or any part of it.
3. Having found that the respondent did not establish that he suffered detriment from making contributions to the applicants’ mortgage for the purchase of the property in reliance upon the applicants’ agreements with him, the learned Trial Judge erred in finding (a) that the 2009 agreement was specifically enforceable and (b) that the respondent was a co-owner in equity of the property with the applicants, as the enforcement of the applicants’ promises under the 2009 agreement was not necessary to prevent any detriment resulting from the applicants’ conduct.
4. In finding that the 2009 agreement was specifically enforceable, the learned Trial Judge conflated equitable principle with contract, and thereby misdirected himself as to the circumstances in which equity requires a promise or assumption to be fulfilled.
5. Alternatively, the learned Trial Judge misdirected himself by finding that the 2009 agreement was specifically enforceable as a contract, as contract was not in issue between the parties, and was contrary to the respondent’s pleadings or his conduct of his case at trial.
6. The learned Trial Judge thereby denied procedural fairness to the applicants as they had no opportunity to allege that (a) the 2009 agreement was an oral contract for the disposition of an interest in land that was unenforceable as it was not adequately evidenced in writing as required by the Statute of Frauds as enacted in Victoria by s 126(1) of the Instruments Act 1958, and s 53 of the Property Law Act 1958, (b) the respondent was in breach of essential terms of it by his failing to continue to contribute to the mortgage according to its terms, and (c) the respondent failed to plead or prove that he was ready, willing and able to comply with it.
The applicants’ contentions
As is evident, the proposed grounds of appeal do more than state the ground; each develops the contentions relevant to the proposed ground.
In their written submissions, the applicants contended that the finding that the respondent had suffered no detriment was fatal to the claim for a constructive trust. There could be no resulting trust as there was no evidence that the respondent had supplied the purchase price for a property which was registered in someone else’s name; in fact, the evidence was to the contrary: the purchase price had been supplied by the applicants. The applicants said that the claim for specific performance could not be upheld as the finding that the respondent had suffered no detriment was fatal to a claim based on equitable estoppel or to a claim for a constructive trust based on common intention.
The applicants said that the trial judge had conflated the principles of equitable estoppel with those of contract when he held that the term ‘outgoings’ in the 2009 agreement meant ‘outlays’, because he determined that issue by applying the test for implying a term into a contract.
The applicants said that the respondent had not made any allegation that he was a party to a ‘contract’ or that there had been a breach of ‘contract’. They said that the judge ‘should not have departed from the equitable claims which the respondent relied upon’, which did not establish that the respondent was entitled to specific performance. The applicants were denied procedural fairness because they had had no opportunity to contend that the oral agreement for the disposition of an interest in land was unenforceable or that the respondent was in ongoing breach of essential terms of the agreement or that he had not established that he was ‘ready, willing and able’ to perform the contract.
In their oral submissions, the applicants said that, while they did not contest the trial judge’s findings in respect of the 2009 agreement, the case in relation to it had been not been clearly pleaded as a contractual claim. The pleading in respect of the 2009 agreement was mixed up with the claims in estoppel and constructive trust; the claim in respect of specific performance was properly understood as ancillary to those claims and as a means of giving effect to them. The pleading did not contain the usual indicia of a contractual claim. Given that this was an agreement between members of a family, an intention to create legal relations should have been pleaded. There was no distinct pleading that the agreement had been breached. During opening submissions, a proposition advanced by counsel for the applicants that the case did not involve contractual claims had not been corrected. The claim in contract was not raised until closing submissions at trial, and, even then, it was raised in a way that was unclear. Had a claim in contract been clearly propounded, the defence would have been amended to raise issues such as (a) whether there was an intention to create legal relations (given the context of a family agreement), (b) the Statute of Frauds and (c) whether the respondent was ready, willing and able to perform the agreement. Given the way in which the case was conducted, in upholding a claim in contract the trial judge denied the respondents procedural fairness. Moreover, once trial counsel for the applicants had said that the case did not involve contract,[9] it was incumbent upon counsel for the respondent to say that that was in error. The case should not have been allowed to proceed on a misapprehension as to what were the issues to be decided.
[9]See [59]–[60] below.
The respondent’s contentions
In his written submissions, the respondent contended that the grounds of appeal relating to a constructive trust and a resulting trust should be dismissed as the trial judge had not found that either form of trust arose. There was nothing to appeal against.
The respondent contended that specific performance is a remedy that does not depend upon a finding that there is a constructive trust. It is an independent equitable remedy based on agreement between the parties. It had been explicitly sought in the statement of claim; it had not been sought as auxiliary to a finding of an implied trust or estoppel. Allegations of implied trust and estoppel had been made in the alternative to the primary claim for the specific performance of the 2009 agreement. Once the court was satisfied that the agreement was made, there was no longer any need to rely upon principles of equitable estoppel or implied trust. The remedy of specific performance is available to compel performance of an executory contract.
Further, the respondent said that there had been no denial of procedural fairness in respect of the claim relating to the 2009 agreement: in both the amended and the further amended statements of claim, the respondent had pleaded its existence and had claimed an order for its specific performance. The applicants had joined issue on the existence of that agreement and positively alleged that the respondent had not performed it. The respondent also contended that the applicants were seeking to raise matters on appeal that had not been run at trial and that, had they been run at trial, it would have been necessary to identify them in a notice given under rule 13.07 of the County Court Civil Procedure Rules 2008.[10]
[10]Rule 13.07 provides: ‘Matter which must be pleaded. (1) A party shall, in any pleading subsequent to a statement of claim, plead specifically any fact or matter which—(a) the party alleges makes any claim or defence of the opposite party not maintainable; or (b) if not pleaded specifically, might take the opposite party by surprise; or (c) raises questions of fact not arising out of the preceding pleading. (2) In a proceeding for the recovery of land— (a) the indorsement of claim on the writ or, if that indorsement does not constitute a statement of claim, the statement of claim shall describe the land so that it is physically identifiable; (b) the defendant shall plead specifically every ground of defence on which the defendant relies and a plea that the defendant or the defendant’s tenant is in possession of the land is not sufficient. (3) A claim for exemplary damages shall be specifically pleaded together with the facts on which the party pleading relies.’
In his oral submissions, the respondent said that the pleading of the 2009 agreement differed from the pleading of the earlier agreements. In the second amended statement of claim, there was a pleading of mutual promises; the existence of mutual promises provides the consideration necessary for the formation of a contract. A pleading must allege the facts that constitute the causes of action, not their legal complexion. Further, specific performance is a remedy available for contracts. The pleading contains an allegation of breach, namely the denial by the applicants that they held the property for the benefit of the respondent and their contention that he was only entitled to a share of any profit made upon its sale. While relief for estoppel may have consequences similar to the specific performance of a contract, specific performance is not a remedy for estoppel. In their closing written submissions at trial, the applicants responded to a case in which specific performance was being sought for a contract. In oral submissions, the respondent had addressed a case in contract. Counsel for the applicants had not protested then that he had been under any misapprehension; on the contrary, his written submissions had directly addressed the claim for specific performance.
Analysis
At trial, the applicants contended that none of the agreements pleaded by the respondent had come into existence. However, on the hearing of the application for leave to appeal, they did not challenge the trial judge’s finding that the 2009 agreement had been made between the respondent and themselves and that it included the promise of the applicants to transfer the property to the respondent upon payment by him of the mortgage debt and other outgoings.
The applicants’ principal argument was that the respondent did not put them fairly on notice that his claim was for the specific performance of the 2009 agreement as a contract. That was the sole basis upon which the respondent succeeded at trial. In order to assess this contention, it is necessary to study the pleadings and the course of the trial.
It is not in issue that the judge decided the case in contract. The present application for leave to appeal turns on the short point whether it was open to him to take that course. (Because the judge did not decide the estoppel and trust claims, proposed grounds 1–3 do not arise for consideration.)
In his second amended statement of claim, the respondent had pleaded as follows (omitting particulars):
1. The plaintiff is the son of the defendants.
2. In 2001 and 2002 the defendants:
(a)entered into a contract to purchase the property located at 3 Annie Borat Close, Brunswick, certificate of title volume 10496 folio 982 (the property);
(b) became registered as joint proprietors of the property.
3.The contract was entered into and the property ·was purchased in accordance with an agreement made between the plaintiff, the defendants and the plaintiff’s sister Tamarand Creswell that (the 2002 agreement):
(a)the defendants would pay the sum of $100,000 to the purchase price and borrow the balance of the purchase price by a mortgage facility;
(b)the plaintiff and Tamarand would each contribute to repayment of the mortgage facility and maintain the property;
(c)the defendants would hold the property as an investment for the benefit of the plaintiff and Tamarand.
3.1Alternatively to paragraph 3 above, the contract was entered into and the property was purchased in accordance with an agreement made between the plaintiff, the defendants and the plaintiff's sister Tamarand Creswell that (the alternative 2002 agreement):
(a) the defendants would pay the sum of $100,000 to the purchase price and borrow the balance of the purchase price by a mortgage facility;
(b)the plaintiff and Tamarand would each contribute to repayment of the mortgage facility and maintain the property;
(c)the defendants would hold the property as an investment for the benefit of the plaintiff, Tamarand and themselves;
(d)in the event of the sale of the property the proceeds of sale would be applied in payment of each party's contributions and the balance divided equally between the plaintiff, Tamarand and themselves.
3A.Acting in reliance on the 2002 agreement, alternatively the alternative 2002 agreement, the plaintiff and Tamarand commenced making payments of $250 each per fortnight towards repayment of the mortgage.
3B.The payments described in paragraph 3A above were made on the basis that the property was held by the defendants as an investment for the benefit of:
(a) the plaintiff and Tamarand pursuant to the 2002 agreement, or,
(b)alternatively, the plaintiff, Tamarand and the defendants pursuant to the alternative 2002 agreement.
4.In late 2003 Tamarand ceased living at the property and by an agreement made between the plaintiff and the defendants in early 2004 (with the consent of Tamarand) it was agreed to vary the 2002 agreement to the effect that (the 2004 agreement):
(aa)Tamarand would no longer make any payments towards repayment of the mortgage;
(a)the plaintiff would pay the sum of $500 a fortnight to the repayment of the mortgage facility;
(b)the defendants would hold the property as an investment for the benefit of the plaintiff.
4.1Alternatively to paragraph 4 above, in late 2003 Tamarand ceased living at the property and by an agreement made between the plaintiff and the defendants in early 2004 (with the consent of Tamarand) it was agreed to vary the 2002 agreement to the effect that (the alternative 2004 agreement):
(aa)Tamarand would no longer make any payments towards repayment of the mortgage:
(a)the plaintiff would pay the sum of $500 a fortnight to the repayment of the mortgage facility;
(b)the defendants would hold the property as an investment for the benefit of the plaintiff and themselves;
(c)in the event of the sale of the property the proceeds of sale would be applied in payment of each party's contributions and the balance divided equally between the plaintiff and themselves.
4A.Acting in reliance on the 2004 agreement, alternatively the alternative 2004 agreement, the plaintiff made payments of $500 per fortnight towards repayment of the mortgage between March 2004 and March 2007.
4B.The payments described in paragraph 4A above were made by the plaintiff on the basis that the property was held by the defendants as an investment for the benefit of:
(a) the plaintiff pursuant to the 2004 agreement, or,
(b)alternatively, the plaintiff and the defendants pursuant to the alternative 2004 agreement.
4C.In 2007 the plaintiff and the defendants agreed that the plaintiff would make full payment of amounts due under the mortgage (the 2007 agreement).
4D. Acting in reliance on the 2007 agreement the plaintiff:
(a)made payments of $662 per fortnight towards repayment of the mortgage between March 2007 and June 2008;
(b)made payments of $750 per fortnight towards repayment of the mortgage between June 2008 and September 2008.
4E.The payments described in paragraph 4D above were made by the plaintiff on the basis that the property was held by the defendants as an investment for the benefit of the plaintiff.
4F.In early 2009 the plaintiff ceased his employment and, at the request of the first defendant, returned to Broken Hill to care for the second defendant and to assist in the family’s business.
4G.In about September 2009 the plaintiff and the defendants agreed that (the 2009 agreement):
(a)the plaintiff would make payments of the mortgage directly to the mortgagee;
(b)the defendants would transfer ownership of the property to the plaintiff upon payment by the plaintiff of:
(i) the balance of the mortgage;
(ii)the $100,000 deposit that had been paid by the defendants; and
(iii)other outgoings that had been paid by the defendants in respect of the property.
4H.In performance of the 2009 agreement and in reliance thereon the plaintiff:
(a)made payments of $500 a fortnight directly to the mortgage[e] from September 2009;
(b)made payments of $1,000 a month directly to the mortgage[e] from June 2010;
(c)made payments in excess of $1,500 a month directly to the mortgage[e] from December 2010.
4I.The payments described in paragraph 4H above were made on the basis that the property would be transferred to the plaintiff upon payment of the balance of the mortgage then owing together with the $100,000 deposit and other outgoings.
5.Further, acting in reliance on each of the agreements referred to above and encouraged thereby the plaintiff:
(a)made mortgage payments for the property;
(b)paid expenses in respect of the property;
(c)made and paid for repairs, maintenance and improvements to the property.
5A.By making all of the payments referred to above the plaintiff acted to his detriment.
6.Further, it was the common intention of the plaintiff and the defendants that if the plaintiff made the payments referred to above and made the other contributions, the plaintiff would be beneficially entitled to the property.
6A.Further, it was the common intention of the plaintiffs and the defendants that if the plaintiff made the payments referred to in paragraph 4G above the property would be transferred to him.
7.The defendants have denied they hold the property for the benefit of the plaintiff and contend that the plaintiff is only entitled to a share of any profit made upon the sale of the property.
8A.In the premises the plaintiff is entitled to an order for specific performance of the 2009 agreement.
9.Further and alternatively, in the circumstances it is unconscionable for the defendants to deny the plaintiff an interest in the property and they are estopped from doing so.
9A.Further and alternatively, in the circumstances it is unconscionable for the defendants to deny the plaintiff is entitled to a share in the profits upon the sale of the property and they are estopped from doing so.
10.In the premises the defendants hold their interest in the property on a constructive or resulting trust for the plaintiff.
11.Alternatively to paragraphs 8A to 10 above, the plaintiff claims equitable compensation in the amount of the payments referred to herein or such other amount as the court sees fit.
The prayer for relief was as follows:
A.A declaration that the defendants hold their interest in the property on trust for the plaintiff.
AB.An order for specific performance of the 2009 agreement.
B.An order that the defendants do all things necessary or required to transfer the property to the plaintiff upon payment of amounts described in paragraph 4G(b) above.[11]
[11]This formulation of the claim may be compared with that provided in LexisNexis, Atkin’s Encyclopaedia of Court Forms in Civil Proceedings (2nd ed, 2010) 37(1), [108] 174–5, which provides, in relevant part:
It is ordered that:
1.the agreement … referred to in the Particulars of Claim be specifically performed and carried into execution …
2.the Defendant do on or before [date] lodge in Court … the amount of the balance of the purchase money for the property comprised in the agreement together with … interest … and the said sum … due to the Claimant in respect of rent together with … the Claimant’s assessed costs of this claim.
3.upon such lodgment being made and notice of such lodgment being given to the Claimant the Claimant do:
3.1execute a proper [transfer or conveyance] of the said property to the Defendant at the expense of the Defendant according to the agreement …
3.2deliver to the Defendant all deeds and writings … relating to the said property …
BA.Alternatively, a declaration that the plaintiff is entitled to an interest in the property:
(a)equal to a half share in the profits from the sale of the property; or
(b)in proportion to his contributions to payment of the mortgage.
C.Alternatively, a declaration that the defendants are estopped from denying that the plaintiff has an interest in the property and is:
(a)entitled to a transfer of the property to him upon payment of the amounts described in paragraph 4G(b) above; or, alternatively
(b) entitled to a share in the profits on the sale of the property.
CA.Orders pursuant to s 225 of the Property Law Act 1958 (as it applies pursuant to s 234D) for the sale of the property and division of the proceeds between the plaintiff and the defendants.
CB.Alternatively, an order that the defendants pay equitable compensation or damages in the amount of payments made by the plaintiff in discharge of the mortgage.
D.Costs.
E.Such further or other relief as the court sees fit.
There is force in the applicants’ contention that the pleading did not announce with sufficient clarity that the respondent was seeking to enforce the 2009 agreement as a contract. First, as is plain, the amended statement of claim refers to none of the agreements, including the 2009 agreement, as a contract. Secondly, the claims in respect of each of the agreements involve claims in relation to equitable estoppel. Thirdly, the claim in relation to the 2009 agreement contains a claim for common intention estoppel or constructive trust (par 6A).[12] Finally, there is no readily recognisable allegation of breach of contract.
[12]In Sidhu v Van Dyke (2014) 251 CLR 505, French CJ, Kiefel, Bell and Keane JJ said (at 511, citations omitted):
In The Commonwealth v Verwayen, Mason CJ described estoppel as ‘a label which covers a complex array of rules spanning various categories.’ His Honour went on to say of ‘titles such as promissory estoppel, proprietary estoppel and estoppel by acquiescence’ that they are all ’intended to serve the same fundamental purpose, namely ”protection against the detriment which would flow from a party’s change of position if the assumption (or expectation) that led to it were deserted”’.
In Hohol v Hohol [1981] VR 221, O’Bryan J described (at 225) the elements of a common intention constructive trust as follows:
From the cases I have referred to it can be said that the essential elements of the trust are, first, that the parties formed a common intention as to the ownership of the beneficial interest. This will usually be formed at the time of the transaction and may be inferred as a matter of fact from the words or conduct of the parties. Secondly, that the party claiming a beneficial interest must show that he, or she, has acted to his, or her, detriment. Thirdly, that it would be a fraud on the claimant for the other party to assert that the claimant had no beneficial interest in the property …
See also Allen v Snyder [1977] 2 NSWLR 685, 691.
However, as can be seen, there is a claim for the specific performance of the 2009 agreement. It is true that the expression ‘specific performance’ is usually predicated on the enforcement of contracts. In JC Williamson Ltd v Lukey & Mulholland,[13] Dixon J said:
It must be remembered that, although the remedy of specific performance is commonly applied in aid of a legal right, it extends to cases where, for one reason or another, there is no remedy at law, as well as to cases where the remedy at law is inadequate. See Fry on Specific Performance, 6th ed, secs 49–60 ... Specific performance, in the proper sense, is a remedy to compel the execution in specie of a contract which requires some definite thing to be done before the transaction is complete and the parties rights are settled and defined in the manner intended.[14]
[13](1931) 45 CLR 282.
[14]Ibid 297.
Any agreement for the sale of land remains executory until all the documentation necessary to achieve it has been executed, including the sale of land agreement necessary to comply with the Statute of Frauds and the transfer. During the hearing of the present application, the Court asked counsel for the respondent whether what had been sought was the enforcement of an executory contract (where some further document had to be brought into existence) or an executed contract.[15] Counsel said that it was the former type. The transcript reads as follows:
[15]For a discussion of the distinction between executory and executed contracts in the context of specific performance, see J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2015) 649–52 [20-005]–[20-020].
MR NORTHROP: No, it is the first sort. It is the kind that is sought in relation to transactions such as this which require the parties to complete or to - - -
SANTAMARIA JA: To do things, yes.
MR NORTHROP: To do things. To sign the transfer. It used to be to sign a conveyance but here it would be to sign the transfer, and that is discussed most authoritatively by Dixon J.[16]
[16]At this point, counsel read from the passage in JC Williamson Ltd v Lukey & Mulholland (1931) 45 CLR 282, 297, extracted above in [52].
It cannot be said that the pleading made it clear that this is what was sought. It speaks in general terms. It asks for an order for ‘specific performance’ and that the applicants be directed to ‘do all things necessary or required to transfer the property to the plaintiff upon payment of amounts described in paragraph 4G(b) above’. It does not identify what the ‘all things necessary or required to transfer the property to the plaintiff’ are. It may be usefully compared with the order that was finally made by the trial judge in which the Court directed the applicants to:
‘provide to the [respondent] a duly executed transfer of land in registerable form (as prepared by the solicitors for the [respondent]) for the property contained in certificate of title volume 10496 folio 982 together with any other documents required to effect the transfer of the title’.
As we have noted, it is true that specific performance is relief usually associated with contracts.[17] However, the expression has also been used to explain the enforcement of non-contractual obligations. The editors of The Laws of Australia say:
While the principles of estoppel by acquiescence have been largely assimilated to the broader doctrines of estoppel, the principles upon which a court will specifically enforce an expectation of a legal relationship induced by the defendant have not been clearly established. In Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, the Court was prepared to hold that estoppel could be invoked on occasions to protect the expectation or interest of the parties and that in an appropriate case specific performance could be awarded to fulfil this expectation.[18]
[17]‘Specific performance is a discretionary remedy for the enforcement of contracts’: see J D Heydon, M J Leeming and P J Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2015) 649 [20-005]. See also John McGhee (ed), Snell’s Equity (Sweet & Maxwell, 33rd ed, 2015) 436 [17-003]; G E Dal Pont, Equity and Trusts in Australia (Lawbook, 6th ed, 2015) 1043 [33.05]; I C F Spry, The Principles of Equitable Remedies (Sweet & Maxwell, 9th ed, 2014) 53; Philip H Pettit, Equity and the Law of Trusts (Oxford University Press, 12th ed, 2012) 649; F W Maitland, Equity: A Course of Lectures (Cambridge University Press, revised ed, 1949) 303.
[18]Lawbook, The Laws of Australia (at 1 June 2010) 15 Equity, ‘6 Specific Performance’ [15.6.310]. The authors support this statement with this note: ‘Waltons Stores (Interstate) Ltd v Maher(1988) 164 CLR 387, particularly the judgment of Deane J at 433. But see Grundt v Great Boulder Pty Gold Mines Ltd(1937) 59 CLR 641, Dixon J at 674.’. Neither of these authorities concerns the use of the expression ‘specific performance’ in the quoted paragraph.
In its treatment of ‘Remedies for Promissory Estoppel’, the editors of Halsbury’s Laws of Australia say:
Specific performance may be ordered against a party estopped from denying the making of a promise, provided that this is appropriate in the circumstances.[19]
[19]LexisNexis, Halsbury’s Laws of Australia (at 30 March 2015) 110 Contract, ‘110 Promissory estoppel’ [110-890]. As authority for this proposition, the editors say: ‘See, for example, S & E Promotions Pty Ltd v Tobin Bros Pty Ltd (1994) 122 ALR 637 at 651 per the Fed C of A, Full Court (where lessee was estopped from obligation to grant sub-lease relief analogous to specific performance was granted). Compare Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (damages in lieu of specific performance). See also Flinn v Flinn [1999] 3 VR 712 at 750 per Brooking JA (Charles and Batt JJA agreeing) (constructive trust). Compare Giumelli v Giumelli (1999) 196 CLR 101 at 125 per Gleeson CJ, McHugh, Gummow and Callinan JJ (although estoppel was based on a promise to confer an interest in land on which the plaintiff built, an order for payment of a money sum was more appropriate than one for the acquisition of title where the plaintiff had given up a particular career path in order to improve the property).’ It is plain from these references that the quoted passage is not using ‘specific performance’ in any strict sense.
It remains the case, however, that the term ‘specific performance’ is classically used in the case of the enforcement of contracts. Commonly, in cases where the plaintiff claims that promises were made giving rise to an interest in land, a claim in contract, for which specific performance is identified as the appropriate relief, will be combined with claims based on proprietary estoppel, for which there will be claims for a declaration as to the entitlement of the plaintiff.[20] But, as McHugh J in Commonwealth v Verwayen[21] put it: ‘the enforcement of promises is not the object of the doctrine of equitable estoppel. The enforcement of promises is the province of contract’.[22]
[20]See, eg, Flinn v Flinn [1993] 3 VR 712, 728, 753.
[21](1990) 170 CLR 394.
[22]Ibid 501.
At the commencement of the trial, counsel for the respondent said: ‘we seek — our primary claim is in relation to the 2009 agreement. We seek effectively specific performance of that agreement.’[23]
[23]Transcript of Proceedings, Cresswell v Cresswell (County Court of Victoria, Judge Macnamara, 24 October 2016) 54. It seems that there was no written outline of the opening submissions. However, a statement of issues filed by the respondent on the first day of the trial included as one issue ‘Is the plaintiff entitled to specific performance of the agreement made in 2009?’
In his short opening, counsel for the applicants said:
[COUNSEL]:No express trust is alleged, no contract of a binding nature is alleged, it’s all entirely confined within the doctrines of constructive or resulting trust.
HIS HONOUR: Yes.
[COUNSEL]:Materially, both in terms of a matter of law and according to the way in which it appears that the claim’s being pleaded, there are really only two trusts that could potentially arise within the umbrella of constructive and resulting trust.[24]
[24]Ibid 55.
Thereafter, the opening of counsel for the applicants made it clear that he understood the case as involving one or other of the forms of equitable estoppel. Of course, it is not for the defendant to define or formulate the case that he or she has to meet. But, it should have been clear, at this stage, that counsel for the applicants had not apprehended that he was facing a case in contract. We return to consider the relevance of this below.
The parties relied upon written submissions in final address. The trial commenced on Monday, 24 October 2016. The evidence was completed in the afternoon of Friday, 28 October 2016. Final oral submissions on behalf of the applicants were commenced late on the Friday. Final submissions were resumed on the morning of Monday, 31 October 2016. On that morning, counsel for the applicants handed to the Court extensive written submissions. Those submissions did not address any claim for the specific performance of the 2009 agreement as a contract. They address in detail claims of constructive trust, estoppel and equitable compensation. They included the following:
All of the Orders seek to reflect alternative allegations that the defendants hold some or all of the property on constructive or resulting trust for the plaintiff. No express trust is alleged.
The allegations of the plaintiff have at their root two concepts: first, multiple agreements (the plaintiff’s account of which have changed since the issue of proceedings and some of which are inconsistent with each other) were allegedly entered into by the parties as to the plaintiff’s entitlement to the property; and the plaintiff made payments in relation to the property in reliance on those agreements.
…
If the defendants’ primary position is not accepted, and Corey has an interest in the property, it is not possible to make submission to cover all the possible decisions of the Court. Suffice to say any final order would need to reflect:
a.the Court’s conclusion as to any agreement that was reached, for example, whether Corey was entitled to a transfer of the property on repaying his parent’s mortgage repayments (among other payments) or not …
The submission does not betray any apprehension that a case of breach of contract is being propounded.
When counsel for the applicants was making his final submissions, he did not have the benefit of any written submissions prepared on behalf of the present respondent. The submissions on behalf of the applicants were completed after the luncheon adjournment on Monday, 31 October 2016. Thereupon, counsel for the respondent commenced his final submissions. In making his oral submissions, he repeated the submission that he had made in opening to the effect that the ‘primary claim is for specific performance’.[25] In the alternative, the respondent sought ‘an order effectively for the sale of the property and the division of the proceeds’.[26]
[25]Transcript of Proceedings, Cresswell v Cresswell (County Court of Victoria, Judge Macnamara, 31 October 2016) 691–4.
[26]Ibid 694.
Shortly after the commencement of final submissions, counsel for the respondent handed up an ‘outline of argument’.[27] Before it was relied upon, counsel for the applicants had no opportunity to study it.
[27]Ibid 691.
In that written outline, the respondent said, under the heading ‘Specific performance of the 2009 agreement’:
The 2009 agreement between the plaintiff and the defendant was made during discussions between the plaintiff and his mother. Its existence is demonstrated by the subsequent conduct of the parties. The plaintiff commenced making payments in accordance with the agreement and, whilst the defendants now say this was done against their wishes, the defendants accepted the benefit of payments so made.
In P’Auer AG v Polybuild 2015 VSCA 42 the Court of Appeal confirmed that an agreement can be founded on the conduct of parties in circumstances where one denied the existence of an agreement but nevertheless accepted the benefits. The principles applied in such cases are based on long standing authority including: Brogden v Metropolitan Railway (1877) 2 App Cases 666, Vroon v Foster’s Brewing Group Ltd [ 1994] 2 VR 32 and Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523.
In P’Auer AG Whelan JA at [11] quoted a passage from Sundberg J in Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd
A contract may in certain circumstances be inferred from conduct, even where no offer and acceptance can be identified ... However the existence or otherwise of an enforceable agreement depends ultimately on the manifest intention of the parties, objectively ascertained ... Where mutual promises are sought to be inferred, the conduct relied upon must, on an objective assessment, evince a tacit agreement with sufficiently clear terms. It is not enough that the conduct is consistent with what are alleged to be the terms of a binding agreement. The evidence must positively indicate that both parties considered themselves bound by that agreement ...
The conduct of the plaintiff was to make payments; the conduct of the defendants was to cease making payments either to the mortgage or to outgoings.
Orders should be made for specific performance of the 2009 agreement.
During his oral submissions, counsel for the respondent said:
So the primary claim is for specific performance of the 2009 agreement. And if Your Honour finds that there was the agreement of 2009 as alleged by the plaintiff, then in my submission, there is no reason suggested why a specific performance should not be granted. It is not suggested that the agreement has come to an end or was repudiated by a party or there was an acceptance of any repudiation, and the existence of the agreement is, in our submission, fortified by the conduct of the parties and it is clear that courts can look at conduct of the parties to determine whether or not there has been an agreement made between them. And I refer in paragraph 42 to the relevantly recent decision in P’Auer and Polybuild (2015) VSCA 42. And I won’t read the passages there, but quite obviously the conduct of parties can be looked at for the purposes of determining whether an agreement exists between them.
This submission does not use the word ‘contract’; but includes other terms that are redolent of contract: ‘agreement’, ‘has come to an end’, ‘repudiation’, ‘an acceptance of any repudiation’ together with a recent authority about the formation of contracts.
This submission evoked no response when counsel for the applicants made oral submissions in reply.
Conclusion
It was not, as it could not be, controversial that the applicants were entitled to a fair trial.[28] Most of the authorities involve a contention that judgment has been given on a point not raised at trial. The authorities canvass those cases in which the trial has been permitted to proceed beyond the pleaded case. In one such authority, Mason CJ, Wilson, Brennan and Dawson JJ said:
In deciding whether or not a point was raised at trial no narrow or technical view should be taken. Ordinarily the pleadings will be of assistance for it is one of their functions to define the issues so that each party knows the case which he is to meet. In cases where the breach of a duty of care is alleged, the particulars should mark out the area of dispute. The particulars may not be decisive if the evidence has been allowed to travel beyond them, although where this happens and fresh issues are raised, the particulars should be amended to reflect the actual conduct of the proceedings. Nevertheless, failure to amend will not necessarily preclude a verdict upon the facts as they have emerged. See Dare v Pulham. In Leotta v Public Transport Commission (NSW) a case having been submitted to the jury which was factually different from that alleged in the pleadings and particulars, Stephen, Mason and Jacobs JJ observed that the pleadings should have been amended in order to make the facts alleged and the particulars of negligence precisely conform to the evidence. The failure to apply for the amendment in that case was held not to be fatal. But in Maloney v Commissioner for Railways (NSW), Jacobs J, with whom the other members of the Court agreed, pointed out that the conclusion in Leotta was reached only upon the presupposition that the new issue or new way of particularizing the existing issue had emerged at the trial and had been litigated.
It is necessary to look to the actual conduct of the proceedings to see whether a point was or was not taken at trial, especially where a particular is equivocal …[29]
[28]Although some of the leading cases concerning the entitlement to a fair trial involve criminal proceedings, it is well-established that the requirement applies to civil proceedings as well. See, eg, Stead v State Government Insurance Commission (1986) 161 CLR 141; CSR Ltd v Eddy (2008) 70 NSWLR 725, 735–6 [40]–[42] (Basten JA, with whom Hodgson JA and McColl JJA agreed); Hamod v New South Wales [2011] NSWCA 375 [309]–[316] (Beazley JA, with whom Giles and Whealy JJA agreed) (discussing the requirement of a fair trial and its intersection with the duty to assist self-represented litigants). See also Friend v Brooker (2009) 239 CLR 129, 171–4 [114]–[118] (Heydon J). In Victoria, s 24(1) of the Charter of Human Rights and Responsibilities Act 2006 expressly states that the right to a ‘fair and public hearing’ applies to civil proceedings.
[29]Water Board v Moustakas (1994) 180 CLR 491, 497–8 (citations omitted).
In Suvaal v Cessnock City Council,[30] McHugh and Kirby JJ said (in a dissenting judgment):
If a party participates in a trial to meet a particular case which that party has pleaded and presented in only one way, it would be unfair to the other party to decide the case on a different basis of which the losing party had no fair notice and which it had no proper opportunity to defend. Although rigid adherence to pleadings is no longer uniformly practised and not a few cases stray from the pleadings without consequential amendment, such practices cannot excuse procedural injustice. It is elementary that a party is entitled to know the issues of fact that are to be decided in a trial where these are determinative of its success or failure.[31]
[30](2003) 200 ALR 1.
[31]Ibid 26–7 [102] (citations omitted).
The question is whether the applicants had a fair trial in respect of the relief ordered by the trial judge in which the Court directed the applicants to:
provide to the [respondent] a duly executed transfer of land in registerable form (as prepared by the solicitors for the [respondent]) for the property contained in certificate of title volume 10496 folio 982 together with any other documents required to effect the transfer of the title.
That relief reflected the judge’s conclusion that the respondent was entitled to succeed in contract.
The determination of that question is not easy. In answering it, ‘no narrow or technical view should be taken’.[32] The respondent had pleaded an agreement and sought an order for its specific performance. In so far as that remedy is usually associated with contract, it can be said that the applicants should have understood that the claim being made against them was one made in contract. However, as a practical matter, the position is more complicated. As discussed above, some legal encyclopaedias have suggested that specific performance may be awarded in aid of an estoppel claim.[33] Whether or not that is properly so is not the point. The fact that the language of specific performance has been used, albeit loosely, to describe remedies by way of estoppel tells against the respondent’s contention that the applicants ought to have appreciated that a claim in contract was being advanced. If there was a claim in contract pleaded, it was intermingled with claims for one or another form of equitable estoppel. There was no distinct claim of the making, or breach, of any contract. In the circumstances, it is quite understandable that ‘specific performance’ may have been taken to be a loose expression used to describe the kind of relief that was sought by way of estoppel or constructive trust.
[32]Water Board v Moustakas (1994) 180 CLR 491, 497.
[33]See [55]–[56] above.
At trial, the applicants were required to give a short opening of their case. In doing so, their counsel said that no case in contract had been made against them. That assertion clearly represented their understanding of the case that they had to meet. It remained uncorrected. A study of the transcript at trial reveals that the only relevant reference to ‘contract’ was the reference made by counsel for the applicants at the commencement of the trial. Counsel for the respondent in his opening address stated that the respondent ‘effectively’ sought specific performance. This shorthand reference did not identify the foundations relied upon for relief of that description. Again, what was said was open to different interpretations.
It is clear from his closing address that counsel for the applicants was, consistently with his written outline, treating the case as one of estoppel or constructive trust and not one of contract. He went so far as to explain that he was making submissions as to the parties’ subjective intentions because the case was about common intention, rather than a contractual intention objectively ascertained.[34]
[34]Transcript of Proceedings, Cresswell v Cresswell (County Court of Victoria, Judge Macnamara, 31 October 2016) 644–5.
Only in final written submissions did the respondent for the first time make reference to the principles from which a ‘contract’ can be inferred. Even then, he sought specific performance on the basis of an ‘agreement’, rather than any contract. He relied upon a common intention constructive trust only to support an alternative form of relief by way of an order for sale of the property and division of the proceeds. But those submissions were not provided to the applicants until they had completed their submissions. And when speaking to his submissions, counsel for the respondent still made no reference to there being a claim in contract. The most that can be said is that, by the time of final address, counsel for the respondent invoked notions pertinent to the proof of a contract and treated the claim for specific performance as distinct from the claims based on equitable estoppel and constructive trust.
The parties appear to have been at cross-purposes as to the basis upon which the respondent was seeking ‘specific performance’ of the 2009 agreement. Plainly enough, the applicants treated the claim as one for specific performance in the loose sense in which the legal encyclopaedias have used the expression. The judge regarded the claim as one for specific performance in the more usual sense, being a remedy for breach of contract. The pleading was far from clear in this regard, not identifying any contract (including any consideration for a contract), any contractual terms or any breach of those terms, and interspersing the paragraphs now said inferentially to embody such allegations with allegations of detrimental reliance appertaining to the estoppel and trust claims. Although counsel for the respondent made brief reference to contractual principles, and it can be seen in hindsight that he was directing his submissions to a claim for specific performance of a contract, the respondent’s pleadings and submissions were sufficiently ambiguous in treating specific performance without reference to notions of contract that we think that counsel for the applicants was justified in treating the case in the way that he did.
We reach that conclusion, notwithstanding that the trial judge evidently took a different view of the matter, at least by the time that he wrote his reasons; the transcript of the trial does not reveal that the judge regarded the case as one in contract at that time. As to the reasons, counsel for the applicants submitted that references to contractual concepts appeared only gradually as the reasons progressed and the judge did not treat the case unequivocally as one in contract until the reasons were well advanced. We do not need to decide whether that is so. If correct, it would explain why the judge did not highlight the applicants’ failure to deal with the contract case directly at trial. If, on the other hand, the judge apprehended that the case was one in contract at the time of the trial, it was incumbent on him to draw that fact to counsel’s attention.[35]
[35]WE Pickering Nominees Pty Ltd v Pickering [2016] VSCA 273 [17]–[18] (Maxwell P, Tate and Kyrou JJA).
In either event, for the above reasons, we think that the applicants were not put fairly on notice that a claim for specific performance of the 2009 agreement as a contract was being made. Counsel for the applicants made it plain that he considered that no such claim had been advanced. In all the circumstances, the case therefore ought not to have been decided on the basis of such a claim.
Evidently, had the claim been clearly brought in contract, the case would have had a different complexion. This is not a case where it can be said that, even if procedural fairness had been afforded, the result would inevitably have been the same.[36]
[36]Ibid [19], citing Stead v State Government Insurance Commission (1986) 161 CLR 141, 145.
The application for leave to appeal must be granted and the appeal allowed. At least because the estoppel and trust claims were not decided by the judge, the matter will need to be remitted to the County Court. No submissions were made as to whether it should be remitted to the judge who conducted the trial, or to a different judge, and we refrain from saying anything on that subject. In any event, it will be for the judge in question to determine how the matter should now proceed, in particular whether the respondent should be allowed to run a contract claim and, if so, what course in relation to defences and evidence should then be taken.
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