Eric and Valerie Coffey v Fernbank Management Pty Ltd - [2001] NSWSC 192

No judgment structure available for this case.

CITATION: Eric & Valerie Coffey & Ors v Fernbank Management Pty Ltd & Anor [2001] NSWSC 192

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 2985 of 1999

HEARING DATE(S): 9, 10, 11, 12 and 13 October and 11, 12 and 13 December 2000, 23 March 2001 and 4 April 2001.

JUDGMENT DATE:
23 April 2001

PARTIES :

Eric Coffey & Valerie L Coffey (First Plaintiffs/First Cross Defendants as representatives of the Plaintiffs/Cross Defendants)
Fernbank Management Pty Ltd (First Defendant/Cross Claimant)
Fernbank Developments Pty Ltd (Second Defendant)

JUDGMENT OF: Bergin J

COUNSEL : S Robb QC/M Meek (Plaintiffs/Cross Defendants)
R McDougall QC/MD Young (Defendants/Cross Claimant)

SOLICITORS: Stewart Cuddy & Mockler (Plaintiffs/Cross Defendants)
Tress Cocks & Maddox (Defendants/Cross Claimant)

CATCHWORDS: CONTRACT - Previous Court of Appeal finding that "web" of agreements of no force or effect - Whether an agreement executed subsequently purporting to replace one of the agreements in the web renders other agreements enforceable. - ESTOPPEL - Whether plaintiffs estopped by reason of demands on defendant to provide services under the Agreements and defendants providing those services. - RESTITUTION - Nature of determination - Fair and just remuneration - Whether application of fee stipulated in unenforceable agreements is just - Whether other methods of assessment applicable.

LEGISLATION CITED: Real Property Act 1900

CASES CITED: Barry v Heider (1914) 19 CLR 197
Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61, 23 March 2001
Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337
Davis v Mortgage Acceptance Nominees Limited NSWSC Rolfe J unreported, 20 April 1994
Gillett & Ors v Halwood Corporation Ltd & Ors NSWSC Rolfe J unreported 25 July 1995
Gillett v Halwood Corporation Ltd & Ors NSWCA, unreported, 26 March 1998
Hungerfords & Ors v Walker & Ors (1990) 171 CLR 125
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
[Mason & Carter Restitution Law in Australia. Butterworths (1995)]

DECISION: Declarations in favour of plaintiffs on Statement of Claim. Orders in favour of Cross Defendant on Cross Claim for fee stipulated in unenforceable Agreement.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BERGIN J

DATE: 23 APRIL 2001

2985/99 - ERIC COFFEY & ORS v FERNBANK MANAGEMENT PTY LTD & ANOR

Fernbank Retirement Village 2

THE PLAINTIFFS’ CLAIMS 5

The Management Agreement 6

The Services Agreement 10

The Gillett Proceedings 13

The New Agreement 17

Status of the Services Agreement 21

Estoppel Defence 24

THE CROSS CLAIM 38

Operation of the Village 40

Nature of the Determination 54

The Agreed Consideration Method 57

The Cash Flow Method 64

Cash Inflows 65

Cash Outflows 65

The Hybrid Method 76

The Budget Method 77

Consideration of Methods 87

The Cash Flow Method 87

The Hybrid Method 88

The Budget Method 89

Agreed Consideration Method 96

Schedule 105

Cash Flow Schedule 110

Fernbank Retirement Village

1 The Fernbank Retirement Village at St. Ives (the Village) is located on approximately 3.8 hectares of land in Kitchener Street, St Ives with frontages to Mona Vale and Roma Roads, St Ives. It comprises 156 self-care units in which residents care for themselves and 41 serviced units which have been referred to as the Hostel. The Village Centre consists of a main lounge area, a sunroom/coffee lounge, an arts and crafts room, a heated spa and swimming pool, a workshop, a billiard room, a barbecue area and an indoor facility. There are some roads within the Village and the grounds are landscaped.

2 The brochure explaining the operation of the Village contains a statement about the Policy of management of the Village as follows:

The management at Fernbank St. Ives firmly believe that above all else, this is your home. We are merely employed by you and your neighbours to keep the community running smoothly, make sure that the grounds and common areas are maintained to the high standards you expect, and assist you personally in any way possible.

We will at all times respect your individuality and privacy, and, whenever possible, we will involve you in matters concerning the Village as a whole.

3 Other relevant statements in the brochure include the following:

The concept of “retirement living” is one which seeks to recognise that our accommodation needs vary as our lifestyles change.

Retirement brings about a major change to our life-style. It is a period to look forward to, free from the many pressures which are a part of the working environment. It is also a period when “change” not only continues but in many areas increases.

To enjoy the freedom of retirement, it is necessary to consider the potential changes that may occur and to plan accordingly.

The choice of accommodation in retirement will be an important factor in life-style consideration.

Fernbank St. Ives is able to offer a positive accommodation option for people in retirement which increases the opportunity for independence, provides security and peace of mind, is a sound investment and is a home to be proud of.

4 The brochure described the layout of the Village and under the heading “Security with Luxury” stated:

just in case.

The assisted care apartments at Fernbank St. Ives can give you the extra individual assistance you need to maintain your independent lifestyle.

Delicious meals are served in the dining room, heavy housekeeping is done for you, and regular medical attention can be arranged if you require it.

At Fernbank St. Ives there’s also a 24-hour emergency call system in each apartment, unit and villa, for that added sense of security.

5 The Village has been the subject of previous litigation in this Court: Gillett & Ors v Halwood Corporation Ltd & Ors NSWSC Rolfe J, unreported, 25 July 1995; Gillett v Halwood Corporation Ltd & Ors NSWCA, Priestley JA, Handley & Powell JJA, unreported, 26 March 1998 (the Gillett proceedings).

6 The Gillett proceedings were brought by two plaintiffs, who were resident proprietors of self-care units in the Village, to challenge the validity of the Agreements entered into by them when they purchased their units at the Village. Rolfe J dismissed their claims and the Court of Appeal set aside his Honour’s Orders and ordered a new trial on certain issues, not the subject of the Appeal. Although there was an application for special leave to appeal to the High Court, the parties reached a settlement prior to the hearing of that application.

7 The plaintiffs in these proceedings, Eric and Valerie Lynette Coffey, are resident proprietors of a self-care unit in the Village and bring the proceedings as representatives of other resident proprietors of self-care units in the Village. I shall refer to the plaintiffs and the represented parties together as “the plaintiffs”.

THE PLAINTIFFS’ CLAIMS

8 The plaintiffs are proprietors of lots in a Strata Scheme based on Strata Plan No 30478 within the Village (the Body Corporate). The first defendant is Fernbank Management Pty Ltd (Management) and the second defendant is Fernbank Developments Pty Ltd (Developments). Each of these companies was formerly a subsidiary of Halwood Corporation Ltd (HCL), a defendant in the Gillett proceedings, as were Management and Developments.

9 On 18 February 1987 the Body Corporate and Management purported to enter into a Deed of Management Agreement (the Management Agreement) which provided that Management would perform certain management functions for the Body Corporate.

10 The plaintiffs, as part of their obligations under the Purchase Contracts for their units entered into a Deed of Agreement as to the Provision of Services (the Services Agreement) with Management.

11 Pursuant to the Services Agreement, Management agreed to provide certain services to the plaintiffs and the plaintiffs agreed that upon the completion of the sale of their units, Management would be entitled to retain certain amounts, from the proceeds of sale. These amounts have been referred to as the Deferred Management Fee in the Gillett proceedings and in these proceedings.

12 Also pursuant to the Services Agreement, the plaintiffs were required to and did grant a charge (the Charge) over their lots in the Strata Plan in favour of Management to secure Management’s entitlement to the Deferred Management Fee. The plaintiffs were also required to and did execute an irrevocable Power of Attorney in favour of Management for the purpose of effecting and completing the sale of their units.

13 The plaintiffs seek declarations that the obligation to pay the Deferred Management Fee is not enforceable, alternatively, that the Services Agreement has never been of any force or effect. The plaintiffs also seek declarations that the Power of Attorney and the Charge have never been of any force or effect.

14 The history to the Purchase Contracts and their Special Conditions and interrelationship with the Management Agreement and Services Agreement is almost identical to the circumstances in the Gillett proceedings. The Gillett’s Purchase Contract was dated August 1987. The Coffey Contract is dated September 1988. The represented parties’ Contracts are not in evidence but the dates upon which each purchased their unit range between 1986 and 1998.

The Management Agreement

15 The Body Corporate purported to engage Management to manage the common property of the Village and perform the services and functions set out in the Management Agreement. Management purported to accept the engagement and agreed to provide the services and functions set out in the Agreement (cl 1).

16 Management agreed to provide, and the Body Corporate authorised Management to provide, certain support services to occupants of the Village at the cost of the occupants. The payment for those services was to be made by the Body Corporate. The Body Corporate agreed to impose levies on the occupants of the Village to enable it to make payments to Management for those services (cl 4A Services). The cl 4A Services are set out in the Schedule to this judgment.

17 Management also agreed to provide certain other services to the occupants of the Village at the request of the occupants. The payment for the services provided at the request of the occupants was to be made by those occupants directly to Management (cl. 4B Services). The cl 4B Services are listed in the Schedule to this judgment. Management also agreed to utilise the recreational facilities of other Retirement complexes in the general area and to provide transport for the Village occupants to and from those other Retirement complexes. The occupants were required to pay for such transport directly to Management (the cl. 4C Services).

18 There was a prohibition on a person occupying a dwelling in the Village until Management had covenanted with such person for the provision of support services. Any agreement was required to contain provisions whereby Management covenanted to provided the cl 4A Services and the cl 4B Services (cl 5).

19 The Body Corporate agreed that it would not grant licences or rights to any person, other than Management, to carry on certain activities on the common property without the consent of Management (cl 7). It also covenanted to take all reasonable steps to ensure that there was no unreasonable interference with Management in relation to the business carried on by Management in the performance of the services and obligations under the Management Agreement (cl 7).

20 Management was required to engage employees necessary to enable it to provide the services under the Agreement. The Body Corporate was entitled to direct Management to dismiss or replace any employee or vary the wages of employees (cl 8 and 9).

21 Until otherwise agreed Management was required to employ persons to fill the following positions:

(i) General Manager;

(ii) Live in Administrator experienced in nursing or social work;

(iii) Relief Administrator;

(iv) Social Co-ordinator;

(v) A maintenance team comprising two full-time persons and one part-time person;

(vi) A night security team comprising two persons to provide between them seven nights per week cover;

(vii) Cleaning persons on part-time basis;

(viii) Other staff as required to service apartments in the Hostel which formed part of the Village; and

(ix) Relief staff positions for each of the above.

22 The Body Corporate was also required to pay accountancy fees in respect of all accounts necessarily prepared for the purposes of the Management Agreement (cl 10B(c)). It was also required to pay all costs properly incurred by Management in connection with the performance of its obligations under the Management Agreement and such additional amounts as were required to be expended for the provision of the availability of support services.

23 Clause 10B also provided:

For the purposes of this Clause, all amounts payable to the Manager shall be called “operating expenses”.

A statement in writing signed by a Director or the Secretary of the Manager as to the amount to be paid to the Manager from time to time as operating expenses shall be prima facie evidence that such amount is so due and owing and payable to the Manager.

24 A timetable for the delivery of notification of the operating expenses and payment, with a provision for interest on default of payment is provided in clause 11 of the Management Agreement. The Body Corporate was entitled to have access to and inspect “all separate financial records relating to the management” of the Village kept by Management and related to any matter the subject of the Management Agreement.

25 The Management Agreement was to continue in force until terminated by the parties entering into a further Agreement, unless it was terminated by either party for breach or upon the winding up of Management (cl. 16).

The Services Agreement

26 Management agreed to provide the cl. 4A Services to the individual proprietors who agreed to contribute to levies to enable the Body Corporate to pay Management for such support services (cl 2A.I). Management also agreed to provide the proprietors with cl. 4B and cl. 4C Services if they requested such services. The proprietors agreed to pay for those services direct to Management (cl. 2A.II and 2B).

27 The resident proprietors agreed not to lease, licence or part with possession of their unit without the prior written consent of Management (cl 5). The resident proprietors also agreed to maintain their units, not to make structural alterations without Management’s consent, to notify Management of any guests staying overnight and gave Management the right to enter the unit in case of an emergency (cl 6).

28 The proprietors agreed not to sell or contract to sell their units without first notifying the manager in writing of a desire to do so (cl 8(i)). They also agreed that their unit would be sold with vacant possession upon their death at a fair market price (cl 8(ii) and (iii)). Any sale was conditional upon the proposing purchaser executing a Services Agreement with Management and providing an executed and registrable charge in favour of Management (cl 8(iv) and (v)). The resident proprietors also gave Management a right to sell their units with vacant possession and agreed to execute an irrevocable Power of Attorney (cl 9).

29 There are two versions of clause 10 of the Services Agreement. Some of the Services Agreements contain the 2.5% version and others the 3.5% version. They are as follows:

10(a) Upon completion of any sale of the said Lot, the Manager shall, out of the proceeds of such sale, be paid or shall be entitled to retain or recover a fee made up as follows:

PROVIDED THAT

AND

(ii) Twenty percentum (20%) of the amount (if any) by which the said resale price exceeds the said original purchase price.

(b) The residue of the proceeds of such sale, less all selling and legal costs, fees and expenses, shall be paid to the Resident Proprietor or his Legal Personal Representative.

PROVIDED THAT

(b) The residue of the proceeds of such sale, less all selling and legal costs, fees and expenses, shall be paid to the Resident Proprietor or his Legal Personal Representative.

30 The Proprietors also agreed that Management’s entitlement to receive the “fee” referred to in clause 10 was to be secured by a registered charge on the title of the Lot (cl 11). The Proprietors also agreed that no interest in the Lot charged would be permitted to become vested by transmission in any person other than the Proprietor’s executors or administrators (cl 13). The expenses occasioned by the sale by Management were agreed to be borne by the Proprietor and added to the sum secured by the charge (cl 14).

31 Clause 16 of the Deed provided:

The Resident Proprietor hereby acknowledges that should he transfer the Lot otherwise than in accordance with the provisions herein contained, then the fee shall be that defined in clause 10 hereof multiplied by a factor of four (4).

It is apparent from correspondence that the parties may have agreed that this clause was not to be enforceable.

The Gillett Proceedings

32 Priestley JA said in the Gillett proceedings:

In effect the additional clauses in the Sale Agreement signed by the appellant required her to acquiesce in the existence of the Management Agreement between Management and the Body Corporate, and required that she and Management both execute the Deed embodying the Services Agreement.

The Services Agreement, as well as providing that Management should make available to Resident Proprietors services and facilities of the same kind as it had undertaken to do in the Management Agreement, also imposed the obligations and restrictions upon the appellant upon sale of her lot earlier summarised.

The situation thus was that HCL by itself and its subsidiary Developments brought the Village into being; HCL made an agreement with Management pursuant to which very significant parts of the management of the Village would be carried out by Management; HCL organised the coming into existence of the Body Corporate; Developments sold lots to the persons who became proprietors in the Body Corporate, by contracts of sale obliging the purchasers (1) either to take part in making the Body Corporate a party to the Management Agreement in place of HCL, or to acquiesce in the continuation of that Management Agreement on that footing, and (2) to enter into a Service Agreement with Management under which, inter alia, Management would become entitled, upon sale of any lot by a proprietor, to portion of the sale price. Considerable parts of the Service and Management Agreements were in identical terms; the two Agreements were designed to work together as part of one integrated scheme of conducting the Village for, inter alia, commercial purposes, originally of HCL and later of Developments and Management. The appellant, by becoming the purchaser of a lot and then a proprietor necessarily became one part of the whole scheme.

(Ex.A p 96-97)

33 Priestley JA concluded:

1. The provisions of the Management Agreement required and empowered Management to perform functions for the Body Corporate;

2. The way in which Management was required and empowered by the provisions of the Management Agreement to perform Body Corporate functions amounted to a delegation within the meaning of s78(1) of the Strata Titles Act 1973 (NSW) as amended;

3. The Management Agreement therefore, if it had been valid, made Developments a managing agent within the meaning of that expression in s78;

4. Such an appointment of a managing agent by delegation could only be made by the Body Corporate in general meeting and by instrument in writing;

5. The fixing of the common seal of the Body Corporate to the Management Agreement was not made by the Body Corporate in general meeting;

6. Therefore the Body Corporate did not become a party to the Management Agreement on 18 February 1987 when the seal of the Body Corporate was affixed;

7. The Body Corporate did not become a party to the Management Agreement by later ratification of it, or by other means;

(Ex. A p115-116)

34 As to the status of the Services Agreement, the Charge and the Power of Attorney, Priestley JA said:

(Ex.A p.114)

(Ex.A p.116)

35 Handley JA said:

(Ex.A p 130)

36 Mr McDougall QC, who appeared for the defendants in these proceedings, submitted that the defendants accepted that absent some differentiating factor, I would not depart from what the Court of Appeal has held on identical documents. However, he submitted that there is an important differentiating factor in this case which is that a new Management Agreement has been entered into between Management and the Body Corporate on 19 April 1999 (the New Agreement).

37 Mr McDougall QC submitted that although it is not the Management Agreement that the parties contemplated when they entered into their respective Purchase Contracts and Services Agreements, it is none the less an Agreement that supplies the hitherto missing basis for the operation of the “web” of contractual documents. It is submitted that in these circumstances, the plaintiffs are unable to make good their claim, as the plaintiffs in the Gillett proceedings could, that the Services Agreements are unenforceable.

38 Mr McDougall QC submitted that the New Agreement makes those otherwise previously unenforceable Agreements now enforceable.

The New Agreement

39 The New Agreement (Ex. B p 1-19) recites that the Management Agreement had been entered into on 18 February 1987 and defined Management’s role in the provision of services to residents as required by the Ku-ring-gai Council Development Consent. It also recites that management of the Body Corporate had “decided to replace” the Management Agreement with the New Agreement. Clause 2 of the New Agreement provides:

2 Termination of Deed of Management Agreement

2.1 The owner and Fernbank Management acknowledge that they each hold different opinions regarding the legal efficacy of the Deed of Management Agreement and the facts and circumstances of its execution.

2.1.1 The owner refers to the Judgment of the NSW Court of Appeal involving the parties and others and contends that the Deed of Management Agreement was executed other than in accordance with the provisions of the Strata Title Act 1973 and is unenforceable by virtue of that fact and otherwise.

2.1.2 Fernbank Management disputes this contention and hereby asserts that it is entitled to terminate the Deed of Management Agreement pursuant to Clause 16(a) of that Deed.

2.2 In any event upon execution of this Deed and the expiry of the cooling off period provided for in paragraph 14 of this Deed any previous Deed or Agreement for Management Services between the parties whether oral or written or both shall be or deemed to be terminated.

40 Clause 6 of the New Agreement provides:

DEVELOPMENT CONSENT - KU-RING-GAI COUNCIL: RESIDENT SERVICES

6.1 Fernbank Management hereby covenants with the Owner that it will provide and will have facilities available to enable it to provide the services to residents set out in the Development Consents issued by Ku-ring-gai Council and referred to in Recital C for so long as Fernbank Management has exclusive use of the Exclusive Use Areas as defined in clause 7.

6.2 The Owner acknowledges that the cost of fees payable to Fernbank Management and the obligations of Fernbank Management under this Deed are separate, independent, distinct and in addition to the costs or fees payable to Fernbank Management and the obligations of Fernbank Management pursuant to any agreement for services with residents.

6.3 The obligations of this Deed are principal obligations and are not ancillary or collateral to any other obligations, including obligations under any agreement for services with residents. This Deed is enforceable notwithstanding the fact that any or all agreements for services with residents are or become wholly or partly unenforceable for any reason.

41 The Management Agreement required Management to provide to the Body Corporate and the Body Corporate to pay for, staff and/or contractors to repair and maintain all the buildings in the Village, all landscaped common areas and communal facilities and equipment in the Village (cl 4A(d)). It also required Management to provide staff and/or contractors to clean all common areas and communal facilities of the Village (cl 4A(e)).

42 The New Agreement provides:

3 REPAIR AND MAINTENENCE OF COMMON PROPERTY NOT BEING EXCLUSIVE AREAS

3.1 The Owner in its absolute discretion and upon its written request may engage Fernbank Management to provide one or more of the following services to the Owner and Fernbank Management shall at the direction of and in the manner specified by the Owner:

(a) Repair and maintain the common property including, buildings and landscaped and improved common areas and all communal facilities, plant and equipment at Fernbank;

(b) Clean all common areas and communal facilities at Fernbank;

(c) Carry out such further work as the Owner may consider necessary.

The period of such engagement shall after the 30th of June 1999 be twelve months as prescribed by clause 4.1.

Fernbank Management will implement any decisions made by the Owner in regard to the matters listed in this Clause 3.1 and will report to the Owner on the implementation of such decisions.

3.2 Fernbank Management shall comply with and carry out directions given by the Owner to Fernbank Management provided always that the said directions are reasonable and relate to matters properly the subject of or incidental to this Deed.

…

3.8 The Owner may, in its absolute discretion, increase or decrease the amount of work to be carried out by Fernbank Management pursuant to Clause 3.1 hereof at any time subject to the terms of this Deed.

3.9 If the Owner does not engage Fernbank Management as provided in clause 3.1 and clause 4.1 nothing in this deed shall prevent the Owner from engaging another contractor to provide such services.

7.0 MAINTENANCE OF EXCLUSIVE USE AREAS

At no cost or any liability to the Owner Fernbank Management shall:

(a) In accordance with the by-laws (“the By-Laws”) applicable to the Strata Scheme created on registration of strata plan no 30478 (“the Strata Scheme”), shall cause the repair and maintenance of those parts of the common property of the Strata Scheme for which Fernbank Management has exclusive use pursuant to the By-laws (“the Exclusive Use Areas”).

(b) Provide services from the Exclusive Use Areas for the benefit of the residents of Fernbank and/or the Owner.

(c) Manage, operate, repair and maintain the furniture, fittings and equipment contained in the hostel community building (which is the building containing lot 2 in strata plan no.30478 and which contains most of the Exclusive Use Areas), and contained in those areas of the common property of strata plan no. 30478 within this building.

43 The Body Corporate has far more control of what Management does in respect of maintenance and cleaning and what it has to pay under the New Agreement than it did under the Management Agreement. Management and the Body Corporate together decide the scope of work Management is to undertake pursuant to clause 3.1 no later than 30 days prior to the commencement of each financial year (cl 4). There are also provisions dealing with the estimate of the cost, any increases and the invoicing to the Body Corporate on a monthly basis. Clause 4.7 provides:

4.7 Fernbank Management agrees that it will, each year, pay the following expenses which might otherwise be payable by the Owner:

(a) Should the owner direct Fernbank Management to engage a social co-ordinator for Fernbank in accordance with Clause 3.1(c) then Fernbank Management shall pay 15% of the wages and on-costs of the social co-ordinator and shall charge the balance of the wages and on-costs to the Owner.

(b) Fernbank Management shall pay 2/3 of the total costs of the operation of the fire services line and the monitoring of the fire alarm at Fernbank and shall pass on the remaining 1/3 of the costs to the Owner.

(c) Fernbank Management agrees that it shall pay 15% of the amount charged to the Owner for water usage.

(d) Fernbank Management shall pay 100% of all costs charged to the Owner for the disposal of trade waste or greasy waste emanating from the kitchen located in the hostel community building at Fernbank for so long as Fernbank Management has exclusive use of that location.

Status of the Services Agreement

44 No authority was cited by Mr McDougall QC in support of his submission that the New Agreement could make an inoperative contract operative. Mr McDougall QC emphasised Priestley JA’s words that “it was not contemplated (and would be unreasonable) for some only of the documents to be held binding on the parties to them” and submitted that it would be unreasonable to have a binding New Agreement and a Services Agreement which is not binding.

45 The New Agreement was “approved” at an Extraordinary General Meeting of the Body Corporate on 9 April 1999 and was executed on 19 April 1999. This postdates all of the Purchase Contracts and all of the Services Agreements of the plaintiffs in these proceedings. It is significant that in July 1999 Management sent each resident a new Services Agreement. I understand that none of the plaintiffs who are cross defendants executed that Agreement. Although the new Services Agreement is not in evidence the covering letter to each resident states relevantly as follows:

RE: NEW PERSONAL SERVICES AGREEMENT

The Department has indicated that it has no objection to the distribution of the new Services Deed. As you will recall from the Department’s briefing note prepared in March 1999, the Department said that:

“Of course, whether each resident proprietor wishes to sign the new Deed is solely a matter for that resident and you may wish to take your own advice on this”.

Fernbank Management Pty Ltd encourages resident owners to seek legal advice before entering the agreement. With respect to this Fernbank Management Pty Ltd has, to save time and money for residents, provided information about this matter to two independent firms of solicitors, Baldwin Tidbury & Oates and Atkinson & Vinden. You will be able to retain either of these firms and have Fernbank Management reimburse you for costs incurred up to a maximum of $250.00 (approximately 1 hours worth of time).

The new services Deed has been drafted with the offer of a 12.5% discount on the current fee eventually payable on the resale of your unit. The 12.5% discount is only applicable to those resident owners who actually sign the Deed within a six week period i.e. by 23 August 1999. This discount is offered in recognition of our genuine desire to put this litigation behind us once and for all.

46 The liability for payments by the Body Corporate for certain services rendered by Management has been changed by the terms of the New Agreement. Body Corporate control over Management’s scope of works and estimate of fees has been introduced. It is thus a different contractual environment to that which the Management Agreement contemplated and to which the Services Agreement was “inextricably and inseparably linked”. Although those changes are in the New Agreement as between the Body Corporate and Management rather than the individual resident proprietors, I am satisfied that these differences are of significance in deciding whether the New Agreement can render the Services Agreement enforceable.

47 Management’s request of the resident proprietors to sign a “new personal services agreement” is couched in equivocal terms which do not necessarily lead to a conclusion that it recognised the incapacity of the New Agreement to make the Services Agreement enforceable. However Management did not claim in its letter to the resident proprietors that the New Agreement rendered the Services Agreement enforceable.

48 The Services Agreement required Management to provide support services to the occupants at the Village which included the provision of staff and/or contractors for repair, maintenance and cleaning (cl.2(d)&(e)). The way in which those services are to be provided and/or paid for has now been changed and is the subject of the New Agreement. The liability for the payment for the repair and maintenance of some areas of the common property - the Exclusive Use Areas - have been removed from the Body Corporate completely under the New Agreement (cl.7).

49 In my view the New Agreement creates quite different responsibilities and entitlements to those that existed in the Management Agreement. The other contractual documents in the “web” would therefore need to be amended to reflect the changes in the New Agreement before they could be regarded as operative or enforceable in the light of the findings of the Court of Appeal in the Gillett proceedings.

50 I am not satisfied that in purporting to “replace” the Management Agreement with a quite different agreement, the New Agreement, Management can make the inoperative Services Agreement operative. I am therefore not persuaded that there is a differentiating factor that would or should lead me to a different conclusion to that reached by the Court of Appeal in the Gillett proceedings.

Estoppel Defence

51 Management makes a number of claims in support of its defence that the plaintiffs are estopped from denying the enforceability of the Services Agreement, Power of Attorney and the Charge or the obligation to pay the Deferred Management Fee.

52 The first claim is that the plaintiffs knew, or ought to have known, that the defendants relied upon the assumption that the Agreements entered into were valid. In particular that the defendants relied upon the assumption that they would be entitled to a fee equivalent to the Deferred Management Fee in consideration of making services available and providing services to the plaintiffs from time to time in circumstances in which the plaintiffs took the benefit of the services.

53 Management claims that the services would not have been provided except for the assumption that the Agreements were valid and the assumption that the plaintiffs would perform the obligations under the Services Agreement and pay the Deferred Management Fee.

54 Management also relies upon the plaintiffs’ conduct in calling upon Management to make available and provide services under the Services Agreement. Management claims it has responded to the “calls” in making available and providing such services and has acted to its substantial detriment in reliance upon the assumption that the plaintiffs would perform their obligations under the Services Agreements.

55 Management also claims the plaintiffs are estopped by the conduct in calling upon Management to provide such services, standing by whilst such services were provided and refraining from commencing these proceedings in circumstances where they knew that Management would not have provided the services except in reliance upon the assumption as to the validity of the Agreements. Management also claims that the plaintiffs’ conduct amounts to an election not to make the claims made in these proceedings or alternatively a waiver of their entitlement to make such claims.

56 Management claims that the plaintiffs are not entitled to the relief they seek because they are guilty of laches, acquiescence and delay. Additionally Management relies upon s 42 of the Real Property Act 1900 in respect of the registered charge over the plaintiffs’ Lots in the Village.

57 Finally Management claims that if the plaintiffs are to obtain the relief sought, such should be conditional upon them doing equity by terms being imposed for the payment of reasonable remuneration for the services provided.

58 The brochure provided to prospective purchasers of units in the Village contained the following:

The longer a resident lives at Fernbank, the more likely that the need for use of management services will arise.

The continuity and stability of management services to be provided by Fernbank Management Pty Ltd throughout the occupancy of a resident is therefore extremely important.

Fernbank Management Pty Ltd has undertaken the responsibility for the on-going management on the basis that it will be remunerated when the resident (or their estate) sells the unit in due course.

The remuneration so received is referred to as a “deferred management fee” (see details Financial Aspects).

As indicated, the “deferred management fee” is an incentive for the Manager to provide a continuity of services during their period of occupancy.

The fee only becomes payable on the resale of the unit and thus does not involve a drain on weekly income of residents.

If the experience of other retirement living projects is a guide, the “fee” will be well covered by the appreciation in the value of the unit.

The “deferred management fee” is an amount which accrues at a rate equal to 2.5% per year or part thereof and is calculated on the price the resident paid for the unit.

- maximum deduction 25%

Plus 20% of the amount by which the resale price exceeds the purchase price.

59 There was further reference to this fee in the section of the brochure as follows:

The Manager shall be entitled to a “deferred management fee” from the proceeds of the sale, such fee shall be calculated -

(i) 2.5% of the purchase price paid by the selling resident for each year or part thereof since the date of the purchase, subject to a limit of 25%.

Plus

(ii) 20% of the amount by which the resale price exceeds the purchase price paid;

NOTE: Thus the proprietor receives the greater majority (80%) of any appreciation in value.

60 The history of the communications between the plaintiffs, as members of the Body Corporate and as members of a group known as the Fernbank Resident Proprietors Group ( the Residents Group) and Management is relied upon by Management in support of its defence. This history is contained in hundreds of pages of letters (including Ex 1A, 1B and 7).

61 The first plaintiff, Eric Coffey (Mr Coffey), moved into the Village with his wife, the second plaintiff, in December 1989. Prior to his retirement in the late 1970s, Mr Coffey held various statutory appointments including Director and Deputy Chairman of the NSW State Pollution Control Commission, Director of NSW Department of Environment and Chairman of the Energy Authority of New South Wales.

62 Mr Coffey has been actively involved in the affairs of the Village since 1989 and was Chairman of the Body Corporate in the years 1990 to 1991 and 1992 to 1997. He has been the President of the Residents Group since its inception in October 1991.

63 The defendants have stated that it was their intention to manage and help run the very best Retirement Village and try to ensure the proprietors are happy in the environment in which they live (ex 7 p 127). That aim, at least to some extent, seems to have been frustrated for the last eleven years.

64 In November 1990 the Body Corporate alleged that there was “widespread dissatisfaction” in the Village because of the “cavalier attitude” Management had chosen to adopt in respect of its dealings with the Body Corporate. The Secretary of the Body Corporate itemised a number of areas which the Body Corporate claimed it wished to “resolve” with Management. These included what the Body Corporate described as a requirement for a “fair division” of charges.

65 These included the costs of employing the General Manager and the Social Co-ordinator, the desire in the Body Corporate to monitor in “much greater detail” the charges made to the Body Corporate for operating expenses, and a suggested procedure for maintenance staff to prepare dockets to be signed by the Body Corporate for work done in the Village. The Body Corporate reminded Management that “deferred management fees of the order of $1.5 million per year are accruing” from the proprietors of Fernbank and “there is no tangible benefit evident to the proprietors, other than an occasional relatively small handout” (Ex. 7. P. 7).

66 In December 1990 a meeting was held between Management and the Council of the Body Corporate which demonstrates a level of frustration in Management and stated mistrust by Mr Coffey of Management (ex 7 p 9-14). After that meeting the Body Corporate wrote to Management making a number of requests in respect of the future management of the Village. That letter stated that such requests were made “without prejudice to matters which we may wish to raise in the future, but nevertheless in the expectation that their resolution will establish a climate for fruitful cooperation between us in the future” (ex 7 p 16). The letter concluded:

67 It is also apparent that by 1990 there had been a hearing before the Strata Titles Commissioner, an Inquiry by the Council of Auctioneers and Agents and correspondence between the Village residents, the Body Corporate and the Minister for Housing, the Member for Ku-ring-gai and the Premier of New South Wales (Ex 7 p 23). It is apparent that such hearing, inquiry and correspondence related to allegations by the Body Corporate and residents of the Village that the Agreements into which they had entered were at least unfair and perhaps invalid.

68 In late January 1991 Management advised the Body Corporate that it would continue to abide by the contractual obligations in accordance with the Management Agreement. The complaints continued. Letters were written complaining about substantial fees and operating expenses; allegations were made that levies had been illegally struck; there was a rejection of any future budgets or variance reports without agreed levels of breakdowns; allegations were made that Management was dealing with irrelevant matters and there were complaints about late supply of material that could have allegedly been supplied in a matter of “minutes”. Further letters demanded improved management and supervision, and contained a refusal to be responsible for $86.72 in relation to the employment of a particular employee, and a myriad of other claims. This continued for months and indeed years.

69 In April 1991 Management, via its Company Secretary Mr Nick Reid, wrote a very detailed letter responding to the various claims in letters written to Management by the Body Corporate. One week later Mr Coffey issued what was referred to as the “Chairman’s Report to Council” for a meeting of the Body Corporate on 26 April 1991. The report contains what is described as a “story of a developer’s dream of a remarkable business opportunity” and includes the following:

We will arrange the documents for the sale of every Lot in the Village:

This fee will keep growing for ever, because we will structure the agreements so that every purchaser must accept the terms entered into by his predecessor, and he will not be able to sell to anyone who will not also accept these terms.

…

70 On 26 April 1991 the Body Corporate advised Management that it was “clearly necessary that the legality of the Deed of Management Agreement be tested and that the issues in contention be resolved in that way”. The letter went on to say:

In the interim our position is clear. We will determine our actions in conformance with the responsibilities imposed on us by the Strata Titles Act. Insofar as the Act permits or does not constrain us, we will also conform with the provisions of the Deed of Management Agreement.

71 It is apparent that as and from April 1991 the Body Corporate took the view that the Management Agreement was to be the subject of a legal challenge. Further correspondence between the Body Corporate and Management stated that the Body Corporate was paying the claims made pursuant to the Management Agreement “under protest and without prejudice to its right to seek future redress” (Ex. 7. p. 67).

72 In October 1991 the Residents Group was formed and commenced corresponding with Management. All resident proprietors were members of the Group unless they opted out. On 26 May 1992 the Residents Group advised Management of legal advice it had received that convinced it that it had “a case to present” that the Management Agreement and the Services Agreement were illegal and unjust (Ex. 7. p. 140). In July 1992 the Residents Group advised Management that it considered “the Fernbank documentation to be illegal and unjust”.

73 By this time the Department of Consumer Affairs had convened two meetings for the purpose of dealing with complaints by the Residents Group. Attempts at compromise were unsuccessful. It is apparent that application for Legal Aid was made and ultimately granted for the Gillett proceedings. The correspondence also suggests that the Gillett proceedings were regarded by some as a “test case”.

74 In July 1994 the Body Corporate informed Management that it regarded the Management Agreement to be “void for illegality”. It also stated that “pending resolution of its legal status” it would continue to “conform to its provisions only to the extent that they do not conflict with the Body Corporate’s responsibilities under the Strata Titles Act” (Ex. 7 p. 270).

75 The Gillett proceedings were commenced in 1993 and heard by Rolfe J in 1995. Rolfe J delivered judgment on 25 July 1995. The Appeal from Rolfe J was heard on 1 and 2 May 1996, 24 March 1997, 27 to 29 August 1997 and judgment was delivered on 26 March 1998. The Special Leave Application was pending in the High Court until October 1999 when the matter was settled. These proceedings were commenced on 30 August 1999.

76 The correspondence demonstrates that the Body Corporate or the Residents Group demanded the provision of services identified in the Management Agreement and the Services Agreement. It also demonstrates that the Body Corporate refused to comply with some of its responsibilities under the Management Agreement. It advised Management that it would not pay the full amount of the operating expenses in respect of the costs of employing the Manager and the Social Co-ordinator. It advised that it would only pay 75% of the costs of the former and 60% of the costs of the latter (Ex. 7 p. 38). After much letter writing and further discussion Management agreed to reduce these operating costs to 85% of the costs of employing both. The Body Corporate continued to argue for a reduction to 75% and 60% respectively (Ex. 7 p. 2491).

77 I am satisfied that the history to which I have just referred does not amount to a proper basis upon which the plaintiffs should be estopped from seeking the relief in these proceedings. I am also satisfied that notwithstanding the demands made upon Management by both the Body Corporate and the Residents Group, steps appropriate to and without prejudice to challenging the Agreements were taken concurrently with those demands. I am not satisfied that the plaintiffs have waived their entitlements to make the claims they make in the these proceedings.

78 These proceedings were commenced reasonably promptly after the Gillett proceedings were finalised in this Court and whilst the High Court application was still pending. I am satisfied that the defendants should not be precluded from making the claims for any delay acquiescence or laches. I am also satisfied that s 42 of the Real Property Act 1900 does not preclude the plaintiffs from seeking the relief in respect of the Charge: Barry v Heider (1914) 19 CLR 197 per Griffith CJ at 213.

79 It was submitted that if I am persuaded that the Services Agreement is unenforceable I should only grant relief to the plaintiffs on certain conditions, having regard to (a) their knowledge of and acceptance of the Deferred Management Fee clause at the time they each purchased their units at the Village, and (b) the fact that there has been no finding that the clause is unenforceable by reason of any finding that it is unjust or unconscionable. The evidence as to this first matter is dealt with in my consideration of the Cross Claim.

80 A particular condition sought by Management is that the Charge over the plaintiffs’ units should remain until the payment is made under the Cross Claim. If this were not to happen Management would be at a very much greater disadvantage, having acted to its detriment in allowing the deferral of payment of management fees, and would have no security for the payment of them, whatever method is chosen.

81 I am of the view that the plaintiffs are not estopped from obtaining the relief they seek in respect of the unenforceability of the Services Agreement and the Power of Attorney. However in the circumstances of this case I am satisfied that it is just that the Charges should remain in place until the plaintiffs comply with the orders to be made under the Cross Claim.

82 The defendants’ estoppel defence is slightly different in respect of one of the represented plaintiffs, Mrs Cox. Mrs Cox and her late husband were previously residents of Pittwater Palms Retirement Village. When they moved to the Village it was agreed that the Deferred Management Fee payable upon the sale of their unit at Pittwater Palms was not to be paid on that sale and that it would not be collected until the sale of their unit at the Village. It was agreed that both Deferred Management Fees would become payable at that time. The Deferred Management Fee in respect of the Pittwater Palms Village, which was not the subject of challenge and which was otherwise payable at the time of the sale of that unit, is charged upon Mrs Cox’s unit at the Village.

83 Those arrangements are contained in a Deed entered into by Mrs Cox and her late husband with Pittwater Palms Management Pty Ltd and Management dated 28 June 1996. Mr and Mrs Cox agreed that upon completion of the sale of their unit at Pittwater, Pittwater was to inform Management and Mr and Mrs Cox in writing of the amount of the Deferred Management Fee payable by Mr and Mrs Cox to Pittwater and that such a payment would be deferred until the sale of their unit at the Village. The Deed further provided:

3. In consideration of Pittwater agreeing to the further deferral provided for in clause 1, and to secure the payment required under clause 2, Jeanne Mary Cox hereby charges Unit 26 with the payment of an amount equivalent to the deferred management fee referred to in clause 1 above.

4. Fernbank shall be entitled to recover on behalf of Pittwater the payment required under clause 2 and Jeanne Mary Cox or her legal personal representative (as the case may be) shall not be concerned to ensure that any moneys received by Fernbank are paid to Pittwater and to the extent of any such moneys received by Fernbank, Jeanne Mary Cox or her legal personal representative (as the case may be) shall be discharged in respect of the obligation to make the payment required under clause 2.

84 The defendants submitted that if the Court finds that the plaintiffs are entitled to the relief sought in the Amended Statement of Claim, it should not be granted to Mrs Cox because these circumstances estop her from asserting any invalidity in the Services Agreement. Alternatively it was submitted that no relief should be granted to her that would have the effect of setting aside or causing or permitting cancellation of the registration of the charge because it secures the unchallenged Pittwater Palms Deferred Management Fee.

85 It is true that Pittwater acted to its detriment in agreeing to further defer the collection of the fee and to that extent I am satisfied that the charge contained in the further Deferral Deed should not be cancelled or set aside. I am satisfied that such charge should remain uneffected by these proceedings. Indeed because of the view I have taken in respect of the maintenance of the Charges until compliance with orders to be made under the Cross Claim, Mrs Cox’s position is the same as all the other plaintiffs.

86 I am satisfied that the plaintiffs are entitled to the relief sought in paragraphs B and C of the Amended Statement of Claim. The Charges are to remain until compliance with the orders to be made under the Cross Claim.

THE CROSS CLAIM

87 Management, as cross claimant, claims that each of the plaintiffs, as cross defendants, have accepted and benefited from services provided by Management without making any or any adequate payment for those services. It claims that the cross defendants have been unjustly enriched at Management’s expense.

88 Management makes a claim for restitution and/or reasonable remuneration for the services provided to the plaintiffs. There are separate and different claims in respect of the 11th cross defendant, Jeanne Mary Cox (Mrs Cox), the 17th cross defendant, John Jamieson Eggleston as executor of the estate of the late Isabel Eugenie M. Eggleston (deceased) (the Eggleston Estate), and the 25th cross defendants, Bruce Hocking and Barry Hocking as executors of the estate of the late Freda C. Hocking (deceased) (the Hocking Estate).

(f) Provide a qualified nurse at regular appointed times and if necessary, daily to consult with occupants of the development needing medical or other assistance to occupants as and when required by reason of illness or disability and to liaise with such occupants’ doctors, to arrange specialing nursing care to use their best endeavours to gain priority for occupants of admission to suitable nursing home accommodation off-site as and when required;

(g) To arrange and minute meetings of the Management of the development;

(h) To conduct, manage and administer the development as a first class retirement village;

(i) To apply for and maintain current any licence required by any applicable legislation in relation to the development;

(i) rates, taxes, fees due to any public municipal or government authority;

(iii) all charges for electricity light power, fuel, telephone, garbage or other services supplied to common areas but excluding any payments payable directly by occupants of the development;

(iv) all costs of repairs, maintenance of buildings and grounds;

(vi) all salaries and allowances payable to staff employed at the development.

home nursing services to residents, as and when required. Permanent arrangements shall be made to have a medical practitioner on call for emergencies and a Physiotherapist to visit as needed.

administrator to be experienced in nursing and social work.

of the development .

Support Services pursuant to Clause 4B

(a) Meals at all reasonable cost when an occupant is suffering from illness or incapacity which prevents the occupant preparing meals or, in the case of a couple, where the person who normally prepares such meals is prevented from preparing meals. Where such occupant is able to walk unaided to the common dining room, meals shall be served there, but if such occupant is unable to walk unaided then meals shall be delivered to the occupant’s unit.

(b) Hairdressing service in an occupant’s own unit by appointment.

(c) Podiatry service in an occupant’s own unit by appointment.

(d) Specialised Nursing care when requested by an occupant’s doctor.

(e) Domiciliary services including cleaning of units within the development, cleaning of windows of units in the development, laundry of bed linen and towels.

The Management shall;

(a) give to occupiers of self-care units priority access to Hostel Units as they become available;

(b) The infirmary ward being kept as such and not being used for any other purposes or use.

(iii) A majority of the Hostel Units shall be occupied only by persons who have been certified by a qualified medical practitioner or social worker as being in need, due to health or other factors, of hostel accommodation and the care and supervision provided therewith.

organised outings and the theatre exhibitions and the like.

The Lessee Services Agreement

Services within the weekly service fee structure

1. Daily

A. Supply 3 nutritious wholesome meals.

Breakfast Continental style.

Two other meals (i) Light, 2-course meal will be

available on a self-service basis in the dining-room.

(ii) Full 3-course meal will be

served to you in the dining room.

Note: (i) Tea/coffee making facilities are also adjacent to each

lounge area for your own use.

(ii) Timing of meals will be

determined by consultation between Residents and Management. Generally meals will be supplied in dining-room unless medical reasons require special consideration. Special diets can be catered for upon Physician’s request.

B. Monitoring of Emergency Call Service

24 hour monitoring service. Should you require urgent assistance, you have only to press the button conveniently located in your Apartment.

C. Personal Companion Services.

Limited personal needs can and will be attended to by our staff whilst you are temporarily incapacitated.

2. Weekly

Servicing of Apartment -

(a) Vacuum carpets, wet mop all other flooring

(b) Dust walls ledges, etc.

(c) Clean and disinfect: Toilet, shower, vanity unit in bathroom.

(d) Clean sink, vanity top and tiles in kitchenette.

Note: Lessee is expected to generally keep Apartment dusted and tidy.

(e) Spot clean windows and mirrors.

(f) Launder two (2) sheets, two pillowcases, two (2) towels.

Note: A fully equipped laundry is available for you to

attend to your other laundry requirements.

3. Periodically, as required, we will clean outside windows and perform other duties to increase your enjoyment of living at Fernbank.

4. M aintain all communal areas in the Village and supply electricity for your lighting, heating and other domestic use.

5. Generally to do all things which will create the living environment you deserve.

6. The payment of all Municipal and Metropolitan Water Sewerage and Drainage Board Rates, maintenance costs in your Apartment as well as the Village generally, replacement of your carpet when appropriate.

7. Organise social functions and gatherings for your enjoyment.

Cash Flow Schedule

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Last Modified: 04/30/2001

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Citations

Eric and Valerie Coffey v Fernbank Management Pty Ltd [2001] NSWSC 192

Most Recent Citation

Sudath v Health Care Complaints Commission [2012] NSWSC 171

Cases Citing This Decision

1

Sudath v Health Care Complaints Commission [2012] NSWSC 171

Cases Cited

3

Statutory Material Cited

1

Barry v Heider [1914] HCA 79

Chapman v Taylor [2004] NSWCA 456

CITATION:	Eric & Valerie Coffey & Ors v Fernbank Management Pty Ltd & Anor [2001] NSWSC 192
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 2985 of 1999
HEARING DATE(S):	9, 10, 11, 12 and 13 October and 11, 12 and 13 December 2000, 23 March 2001 and 4 April 2001.
JUDGMENT DATE:	23 April 2001
PARTIES :	Eric Coffey & Valerie L Coffey (First Plaintiffs/First Cross Defendants as representatives of the Plaintiffs/Cross Defendants) Fernbank Management Pty Ltd (First Defendant/Cross Claimant) Fernbank Developments Pty Ltd (Second Defendant)
JUDGMENT OF:	Bergin J

COUNSEL :	S Robb QC/M Meek (Plaintiffs/Cross Defendants) R McDougall QC/MD Young (Defendants/Cross Claimant)
SOLICITORS:	Stewart Cuddy & Mockler (Plaintiffs/Cross Defendants) Tress Cocks & Maddox (Defendants/Cross Claimant)
CATCHWORDS:	CONTRACT - Previous Court of Appeal finding that "web" of agreements of no force or effect - Whether an agreement executed subsequently purporting to replace one of the agreements in the web renders other agreements enforceable. - ESTOPPEL - Whether plaintiffs estopped by reason of demands on defendant to provide services under the Agreements and defendants providing those services. - RESTITUTION - Nature of determination - Fair and just remuneration - Whether application of fee stipulated in unenforceable agreements is just - Whether other methods of assessment applicable.
LEGISLATION CITED:	Real Property Act 1900
CASES CITED:	Barry v Heider (1914) 19 CLR 197 Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61, 23 March 2001 Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337 Davis v Mortgage Acceptance Nominees Limited NSWSC Rolfe J unreported, 20 April 1994 Gillett & Ors v Halwood Corporation Ltd & Ors NSWSC Rolfe J unreported 25 July 1995 Gillett v Halwood Corporation Ltd & Ors NSWCA, unreported, 26 March 1998 Hungerfords & Ors v Walker & Ors (1990) 171 CLR 125 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 [Mason & Carter Restitution Law in Australia. Butterworths (1995)]
DECISION:	Declarations in favour of plaintiffs on Statement of Claim. Orders in favour of Cross Defendant on Cross Claim for fee stipulated in unenforceable Agreement.