Currie v Currie

[2013] WASC 428

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   CURRIE -v- CURRIE [2013] WASC 428

CORAM:   ALLANSON J

HEARD:   26 NOVEMBER 2013

DELIVERED          :   29 NOVEMBER 2013

FILE NO/S:   CIV 1237 of 2013

BETWEEN:   BRUCE MICHAEL CURRIE

Plaintiff

AND

GRAEME JOHN JAMES CURRIE
First Defendant

ANDREW JOHN CURRIE
Second Defendant

Catchwords:

Practice and procedure - Interlocutory injunction - Breach of inferred contract - Estoppel - Relevant principles - Sufficiently arguable case - Turns on own facts

Legislation:

Nil

Result:

Interlocutory injunction granted

Category:    B

Representation:

Counsel:

Plaintiff:     Mr P G Donovan

First Defendant             :     In person

Second Defendant         :     In person

Solicitors:

Plaintiff:     MDS Legal

First Defendant             :     In person

Second Defendant         :     In person

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

Ashton v Pratt [No 2] [2012] NSWSC 3

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199

Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57

Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424

Darmanin v Cowan [2010] NSWSC 1119

Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd [1988] 14 NSWLR 523

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8

Fazio v Fazio [2012] WASCA 72

Galaxidis v Galaxidis [2004] NSWCA 111

Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533

Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44

Lighting By Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23; (2008) 35 WAR 520

Pegrum v Fatharly (1996) 14 WAR 92

RJ Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2010] WASCA 128

SMS Rental (WA) Pty Ltd v Cahma Life Nominees Pty Ltd [2009] WASC 359

Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110

1. ALLANSON J:  There are three parties to this action:  a father and his two sons.  They are farmers in the wheat belt area, with properties in the Bruce Rock region. 

2. The first defendant Graeme Currie is now 73.  For some years he has left the running of the farm to two of his sons, Bruce (the plaintiff) and Andrew (the second defendant).  From around 2003, the farm has been divided with each son separately farming on part of the land.  These proceedings question the nature of the arrangements under which that was done.  

3. The common practice in cases where several members of the one family, with the one family name, are parties is to refer to the parties by their given names.  I will follow that practice, and intend no disrespect to any party in doing so.

4. Bruce says that his father entered into a contract to transfer part of the farm land to him immediately.  The legal title in the land was to remain in Graeme until either Bruce paid stamp duty and other costs necessary for the transmission and registration of legal title, or Graeme died and the legal title passed by will.  Alternatively, Bruce says that his father is estopped from denying that arrangement, even if there is no legally enforceable contract. 

5. The land in question is in six titles ‑ collectively it has been referred to as the Glenayr Farms.  Bruce carries on his farming business through the Glenayr Trust No 2, of which he is a trustee, and the appointor and guardian.  

6. Graeme denies that there was a contract.  He says, in effect, that Bruce is in possession of the land as a tenant under a lease.  The lease expired on 31 December 2011.  Under the holding over provisions in the lease, Bruce has a tenancy that is terminable at a month's notice.

7. Matters seem to have come to a head in 2011.  Since then, there has been a failed attempt to mediate the dispute between Bruce and Graeme.  In 2013, Bruce commenced proceedings seeking relief including specific performance of the agreement he claims was made.

8. On 15 October 2013, Graeme issued a notice to Bruce, requiring him to give up possession of the land by 30 November 2013.  Bruce responded with this application for an interlocutory injunction.  These are my reasons for granting that injunction.

The statement of claim

1. Bruce pleads that the conduct of the parties, including representations made by Graeme, resulted in a contract under which Graeme was to transfer Glenayr Farms to Bruce as trustee of the Glenayr No 2 Trust.  While Graeme would maintain legal title, the beneficial interest in the land would transfer immediately.  Bruce could obtain immediate transfer of the legal interest if he paid the stamp duty and costs of changing the mortgages over to his name.  Otherwise, the legal interest would be devised to him upon Graeme's death.  In consideration, Bruce was to pay Graeme an annuity of $5,500 per month and pay certain other expenses including the premium on a life insurance policy.  Graeme was also to transfer a portion of the assets of the G & E Currie Partnership (stock and equipment) to Bruce.  Bruce would assume half the debts of the G & E Currie Partnership.

2. Bruce pleads that the agreement was complete and binding by 2005, although it was later varied on several occasions when Graeme agreed to the annuity being reduced.  Ultimately, Bruce was paying less than half the sum initially agreed.

3. Bruce has farmed the Glenayr Farms since 2005. 

4. Based on these matters, Bruce claims that there is a contract, alternatively, that Graeme is estopped from denying his promises, and a declaration that the Glenayr Farms are held in trust for him.  He seeks an order for specific performance of the agreement, and that the titles to the Glenayr Farms be transferred to him.  It is not apparent in the plea that he is, or ever has been, ready, willing and able to perform the agreement by paying the costs associated with the transfer of the land and security over it.

5. Bruce alleges various breaches of contract, but it is not necessary to go into those matters on this application.

The facts

1. Bruce filed a substantial affidavit that he swore himself, and an expert affidavit prepared by a farm consultant, Richard David Vincent.

2. Graeme and Andrew filed no evidence in response, but relied on documents included in the material filed by Bruce and on inferences that can be drawn from the facts he set out (Bruce was legally represented, neither defendant was).  Graeme, in particular, referred to many instances where Bruce relies on conversations where he cannot remember the words said, but deposes to the effect of what was said.

3. In addition, I had regard to some transaction documents relating to the refinancing of the land farmed by Bruce in 2011.  Those documents should have been included in the evidence filed.  I permitted them to be handed up (they are, on their face, business records).  Counsel for the plaintiff agreed that these documents would be formally put before the court on affidavit. 

4. On the evidence as it now stands:

   1.Bruce had been working on the family farm from when he was at school.  In early 2003, Graeme told his sons that he would divide the property between them and each could farm part of the land and treat it as his own.  In return he wanted an annuity, although the terms of the annuity were not decided until some years later. 

   2.A list of the properties was prepared.  Bruce says it shows which portions were to be transferred to each of the sons.  The document itself does not refer to transfer of the land.

   3.The farm machinery was divided between Andrew and Bruce.  Again Bruce recalls being told by Graeme that he would be able to farm and treat the land as his own.

   4.In April 2003, the Glenayr No 2 Trust was created, probably by Graeme.   Bruce was trustee, guardian and appointor.

   5.Later in 2003, Bruce discussed 'succession planning' with his parents.  They rejected the notion of using a succession planner.

   6.Further events in 2003 and 2004 included Bruce conducting improvements on the land, with Graeme telling him what to do in relation to them.

   7.In 2005, a neighbouring farm, 'Lockes', went on the market.  Bruce had earlier discussed purchasing it with various people, including his parents.  He says Graeme advised him it would be a good opportunity. 

   8.On 29 December 2004, Bruce provided a letter to the other members of his family setting out his views on a fair split of the farming business.  Graeme and Andrew did not respond.

   9.In January 2005, the family met to discuss how the farm machinery would be divided between Bruce and Andrew.

   10.By February 2005, Bruce had registered the business of Glenayr Farms.  Costs such as chemicals and fertiliser were still coming out of the G & E Currie Partnership and income was still going into the partnership.

   11.In about July 2005, Bruce entered a loan agreement with Rabobank, under which he borrowed $1.65 million.  Most of that borrowing was used to repay debt of the G & E Currie Partnership to Rabobank.  Bruce also assumed liability for part of the debt associated with individual items of machinery.  Graeme guaranteed the borrowing.  The documents relating to this financing arrangement were not put into evidence.

   12. In 2005, Bruce purchased Lockes as trustee for the Glenayr Trust No 2.  Bruce borrowed from Rabobank to fund the purchase and Graeme guaranteed the loan.  The documents relating to the financing of the purchase are not in evidence.

   13.In October 2005, Graeme told Bruce that he wanted $5,500 monthly as an 'annuity'.  Bruce began the payments in February 2006.  

   14.In March 2006, the Currie family met and discussed various matters, including the split of the G & E Currie Partnership.  Minutes of the meeting were taken by Bruce's wife, Lara.  None of the others present have either agreed or disagreed with the content of those minutes.  Bruce relies on that meeting as part of the circumstances giving rise to the contract.  He does not allege that there was an oral agreement made that day, but that it was part of the circumstances from which a concluded agreement should be inferred.  Relevantly, he says that Graeme told him that he would transfer Glenayr Farm to him by will on his death (to avoid stamp duty and other charges), but that Bruce could have the land transferred immediately if he would pay the stamp duty.  Other matters agreed included that Andrew and Bruce would pay particular liabilities, including the annuity, and would assume responsibility for debt.  Graeme would transfer a portion of the assets of the partnership to each son.

   15.Bruce says that the parties acted consistently with these representations and agreements over the following years.  In particular, he paid the annuity, although over the following years the amount was reduced on several occasions at Bruce's request. 

   16.In March 2011, the family met with a solicitor, Peter Michael, to discuss succession.  The notes of that meeting made by Mr Michael are ambiguous regarding the beneficial ownership of the Glenayr Farms land.  They record an agreement that Graeme would leave the farm land to Andrew and Bruce and consider transferring it to them before death.  They also provide that Bruce may make decisions as to the sale of the balance of the land he holds, but subject to payment of $500,000 to Graeme should he sell more than 75%.

   17.In April 2011, Rabobank sent a letter containing an offer to restructure Bruce's debt.  The effect of it was to reduce Bruce's debt to Rabobank with the proceeds of land sales.  While Graeme remained liable as a guarantor for the remaining debt, his liability was limited to the amount realised on the sale of those properties that were comprised in Glenayr Farms.  Those properties remained in his name.  Other properties which had been mortgaged as security were released, and Graeme was released from a personal guarantee.  The letter of offer was accepted by Bruce and Graeme in April, and the documents implementing the arrangement were executed in July 2011.

   18.Also in April 2011, some of the Glenayr Farms' land, including Lockes, was sold.  The sale realised about $2 million which was paid to Rabobank.  I infer this was part of the refinancing arrangement.

   19.In 2011, Graeme had a lease prepared under which Bruce would farm the Glenayr land as a tenant.  The lease was for a year, ending 31 December 2011, with holding over month to month after the end of the lease.  Bruce eventually executed the lease ‑ he says under duress. 

   20.In November 2011, Bruce and Graeme exchanged correspondence.  It is not necessary to set out the terms of it.  Again what is written is capable of alternative constructions. 

5. That leaves the present position.  Bruce remains on the Glenayr land and farming it, although he now wants to do so while living elsewhere.  Relations between father and son are at a low point, and relations between brothers may be no better.  Graeme has given notice to Bruce that the tenancy will end on 30 November 2013 and he will be entitled to re-enter, occupy and resume possession of the land from then. 

The principles relating to the pleaded causes of action

The claim in contract

1. A contract may be inferred in the absence of an identifiable offer and acceptance, or an identifiable occasion when the contract was concluded.  The relevant principles are discussed fully in several recent decision of the Court of Appeal:  see Lighting By Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23; (2008) 35 WAR 520 [21] [23] (Pullin JA), [89] [90] (Buss JA), [203] [205] (Le Miere J); RJ Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2010] WASCA 128 [92] ‑ [97] (Newnes JA); Fazio v Fazio [2012] WASCA 72 [188] ‑ [195] (Murphy JA). The question is whether, in all of the circumstances, an agreement can be inferred from the acts and conduct of the parties even though it may be not openly expressed. This requires the court to determine whether the parties' conduct, viewed objectively, manifests a mutual assent and an intention to create legal relations: Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, 105 – 107; [2002] HCA 8 [24] ‑ [28]; Darmanin v Cowan [2010] NSWSC 1119 [204] ‑ [215]. The court is not confined to conduct before that date on or by which it is alleged the contract was made, but may have regard to later conduct in deciding whether a contract has been concluded, and for the purpose of identifying the subject matter of the agreement and its necessary terms.

2. The authorities suggest some caution.  The conduct relied on must point to the existence of the particular contract in the terms alleged in the proceedings:  Empirnall Holdings Pty Ltd v Machon PaullPartners Pty Ltd [1988] 14 NSWLR 523, 535; Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 [5], [9]. A contract will only be inferred 'if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding': Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 [369] (Allsop J); see also Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 [162]; Pegrum v Fatharly (1996) 14 WAR 92, 94 ‑ 95.

3. The court is here dealing with family relationships and not the arm's length dealings of commercial people.  Whether the parties intended to create legal relations is an inference of fact, to be determined objectively.  Family, social, and domestic arrangements may not give rise to binding contracts because the parties may lack that necessary intention.  There are many cases which provide examples:  see, for example, Ashton v Pratt [No 2] [2012] NSWSC 3 [30] - [33] and the authorities discussed there.

4. If Bruce were to establish his contract claim at trial, he would be entitled to remain in possession of the land.

The claim in estoppel

1. The plea in estoppel does not depend on proof of a legally binding agreement.  The elements necessary for an estoppel may be present in arrangements and understandings where the parties do not intend to create a legally binding contract, or which are insufficiently precise to amount to an enforceable agreement:  see, for example,  Galaxidis v Galaxidis [2004] NSWCA 111 [93] ‑ [94]. Were Bruce to succeed in his estoppel claim, the relief granted could extend to requiring Graeme to 'make good' an assumption he created that Bruce was entitled to the beneficial interest in the land, and to remain in possession of it.

The principles relating to interlocutory relief

1. The general principles which apply to an application for interlocutory relief are not in dispute: they are conveniently summarised in Twinside Pty Ltd v Venetian Nominees Pty Ltd WASC 110 [7] ‑ [13]; see also SMS Rental (WA) Pty Ltd v Cahma Life Nominees Pty Ltd WASC 359. It is necessary to first identify the legal or equitable rights which are to be determined at trial and in respect of which final relief is sought: see Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199 [11], [105]. The court may grant the injunction for the purpose of keeping matters in status quo until the parties' rights are determined at trial.

2. Bruce must show a sufficient likelihood or probability of success to justify preserving the status quo, that is, that he remains in possession of the land, until the trial of the action.  How strong the probability of success must be depends upon the nature of the rights that Bruce asserts and the consequences likely to flow from the order.  The decision whether to grant the injunction sought by Bruce involves balancing three matters.  First, there is the injustice which Bruce might suffer if he is excluded from farming the land, if it is later found at trial that he is the beneficial owner of it and entitled to possession.  As part of that factor, I need take into account Bruce's liability as the principal debtor under the financing arrangements, and the effect that losing use of the land would have on his ability to service the debt.  Second, the injustice that Graeme would suffer if he is kept out of possession, and later it is found that the land is his and he is legally entitled to possession of it.  He remains liable as guarantor for Bruce's debt, although his liability is limited.  Third, there is the potential injustice to Andrew, who might use the land with his father's permission if Bruce is not to have the use of it.

3. Whether the court finds that there was an agreement, or finds that Graeme made the representations giving rise to an estoppel, will depend on what facts are found.  That poses particular difficulties where the parties, Bruce in particular, rely on conversations that in some cases were over 10 years ago.  On this application for interlocutory relief, where there is uncertainty about whether final relief will be granted, and that uncertainty depends in whole or in part on a contested question of fact, it is generally not appropriate for the court to decide that factual question:  Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533, 535. That does not mean that Bruce is entitled to the injunction unless it is shown that his claim has no real prospect of succeeding on the facts he asserts. That would reverse the onus and obscure the real question on an application of this kind: Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 [72].

Consideration

1. There facts on which Bruce relies are capable of supporting a finding that there was a contract, although there are some obvious difficulties in the case.  Some of these are difficulties of proof, particularly in relation to representations made orally up to 10 years earlier.  Some of the difficulties arise out of the nature of the relationships between the parties, and the need to prove an intention to create legal relations in the context of family discussions.

2. It is not necessary to discuss the contract claim further, as I am satisfied that I should grant interlocutory relief on the basis of the claim in estoppel. 

3. I have summarised the evidence above.  It was not contested in this application.  I would particularly refer to four matters.  First, the assumption of debt by Bruce in 2005 and again in 2011 supports a finding that Bruce then assumed that the land was his, or that he and Graeme had entered into an arrangement from which Graeme was not free to withdraw, and under which the land would be transferred to Bruce.  It is not unequivocal, but it is a strong consideration.  Second, Bruce has been farming the land now for about 10 years, apparently without interference until the presentation of the lease in 2011.  He took on additional liabilities, including the purchase of Lockes, with the apparent agreement, or even encouragement, of Graeme.  Third, Graeme was party to the finance arrangements, and to the restructure in 2011.  The 2011 financing arrangement significantly reduced Graeme's potential liability as guarantor, by limiting it to the land farmed by Bruce.  Fourth, for Graeme to now withdraw from the arrangement would leave Bruce with the primary responsibility for substantial debt relating to the operation of Glenayr Farms, but with no ability to carry on farming and earn the income he needs to service the debt. 

4. For the purposes of the grant of interlocutory relief, I am satisfied that Bruce has a sufficiently arguable case, and that the balance of convenience lies in his favour.  The injunction would preserve a situation that has stood now for about 10 years.  Bruce has given an undertaking as to damages.  Neither defendant has shown that any prejudice would flow to him from that situation remaining until the rights of the parties can be finally determined.  The prejudice to Bruce in being removed from the land is such that damages would not be an adequate remedy.