Giumelli v Giumelli (P55-1997) [1999] HCA 10 24 March 1999
ORDER
Appeal stood over to a date to be fixed for the making of orders joining as a party to the appeal the legal personal representative or representatives of the first appellant and for the making of final orders disposing of the appeal.
On appeal from the Supreme Court of Western Australia
Representation:
A R Castan QC with F G Phillips for the appellants (instructed by Michael Rennie)
M J McCusker QC with R A Harrison for the respondent (instructed by Dwyer Durack)
Notice: This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Giumelli & Anor v Giumelli
Equity – Relief – Equitable estoppel – Constructive trust – Equitable charge – Whether relief confined to reversal of detriment – Relevance of other appropriate remedies and of third party interests to measure of relief.
Words and phrases – "constructive", "defensive equity".
GLEESON CJ, McHUGH, GUMMOW AND CALLINAN JJ. This is an appeal from the Full Court of the Supreme Court of Western Australia[1]. The Full Court (Rowland, Franklyn and Ipp JJ) allowed an appeal by the present respondent from a judgment entered by a judge of that Court (R D Nicholson J) and dismissed a cross‑appeal by the present appellants. The Full Court granted a declaration that the appellants hold the whole of the land comprised in Certificate of Title Vol 1400 Folio 628 ("the Dwellingup property") upon trust and that, since May 1986, they have held the Dwellingup property upon trust to convey to the respondent what is presently an unsubdivided portion thereof, identified as "the Promised Lot". The appellants were ordered to do all things reasonably necessary to subdivide the Dwellingup property so as to create the Promised Lot, including the obtaining of State Planning Commission approval. The order of the Full Court further provided:
"that in the event that subdivision cannot be effected or State Planning Commission approval cannot be obtained or in the event that for some other reason the Promised Lot cannot be conveyed to [the respondent, he] be at liberty to apply to a single Judge of this Honourable Court".
In submissions to this Court, the term "constructive trust" was used to identify the nature of the equitable remedy granted by the Full Court. Care is required in the use of the term "constructive" in this context. Professor Scott has pointed out[2]:
"It is sometimes said that when there are sufficient grounds for imposing a constructive trust, the court 'constructs a trust.' The expression is, of course, absurd. The word 'constructive' is derived from the verb 'construe,' not from the verb 'construct'. … The court construes…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Giumelli v Giumelli [1999] HCA 10
Case
[1999] HCA 10
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered an appeal by Mr and Mrs Giumelli (the appellants) against their son, Robert Giumelli (the respondent), concerning promises made to Robert regarding a property. Robert claimed an equity to relief based on these promises, which the appellants sought to dismiss, though they conceded some form of relief was warranted. The dispute centred on promises made by the appellants to Robert concerning a portion of their Dwellingup property, referred to as the "Promised Lot," which Robert had worked on and improved.
The central legal issues before the High Court were the nature and extent of the relief to which Robert was entitled based on equitable estoppel, and whether this relief should be confined to reversing any detriment he suffered or could extend to other appropriate remedies. The court also had to consider the relevance of third-party interests, specifically those of another son, Steven, and his family, in determining the measure of relief, and whether a constructive trust or an equitable charge was the appropriate form of relief.
The High Court reasoned that while Robert had established an equity to relief, the relief granted by the Full Court, which involved a subdivision and conveyance of the Promised Lot, was excessive. The court held that the measure of relief should not necessarily be confined to reversing detriment but should be what is just and necessary to satisfy the equity. Crucially, the court considered that the interests of third parties, particularly Steven, necessitated a modification of the relief. The court concluded that a monetary sum, representing the value of Robert's equitable claim, would be a more appropriate remedy than a proprietary interest in the land, and this sum should be secured by an equitable charge over the entire Dwellingup property.
The High Court ordered that the appeal be stood over for the making of orders joining the legal personal representative of the first appellant as a party and for the making of final orders. The court indicated that the matter would be remitted to the Supreme Court to determine a monetary sum to represent the value of Robert's equitable claim, with interest, to be charged upon the Dwellingup property, and that no subdivision of the Promised Lot would be required as part of the remedy.
Orders
Orders of the court
Appeal stood over to a date to be fixed for the making of orders joining as a party to the appeal the legal personal representative or representatives of the first appellant and for the making of final orders disposing of the appeal.
Background
Background to the litigation
In their Notice of Appeal, the appellants seek the dismissal of the respondent's claim. However, in their written and oral submissions, they accept that, at least in respect of what was identified as the second promise, the respondent had an equity to some relief. They submit that this fell short of an order for a subdivision and the conveyance of the Promised Lot.The facts The respondent, whom we shall call Robert, is the son of the appellants, Mr and Mrs Giumelli. Mr Giumelli was born in Italy in 1924. He came to Australia in 1949. Mrs Giumelli was also born in Italy, in 1930, and she came to Australia in 1950. Mr and Mrs Giumelli were married in 1951. There are five children of the marriage. The eldest, Tony, was born in 1953; Robert was born in 1956; Steven in 1959; Sandra in 1965; and Diana in 1968. The family lived on a property at Pickering Brook ("the Pickering Brook property"). This comprised about 16 acres. The title was held in the name of Mr Giumelli. Mr and Mrs Giumelli developed the property as an orchard and they conducted a business there under the name "G Giumelli & Co" by means of a partnership between them. The partnership was established on the advice of their accountant, Mr Gelle. There was no written partnership agreement. In 1966, Mr and Mrs Giumelli purchased the Dwellingup property and they retain the registered title to it. The land is about 100 kms equidistant from Perth and from the Pickering Brook property. The Dwellingup property comprises an area of about 338 acres, of which only 10 acres were completely cleared when it was purchased. Mr Giumelli commenced development of the property by planting trees on the 10 acres and installing irrigation. Although partnership activities have been conducted there, the Dwellingup property itself has never been an asset of the partnership. The eldest child, Tony, left school in 1968 and worked with his father at the Pickering Brook and Dwellingup properties. Robert left school in 1971 and commenced full‑time work for the partnership. Up to that time, he had worked at the Pickering Brook and Dwellingup properties, along with other members of his family, in a manner and to a degree consistent with the capabilities of his age. Robert worked two hours daily outside of school hours and sometimes all Saturday and half of Sunday. He received no wages, but was paid pocket‑money and received the necessities of life. In July 1973, Robert and Tony were admitted to the partnership after advice by Mr Gelle to the effect that there were tax advantages in doing so. The two sons were admitted without payment of goodwill or subscription of capital. Robert worked for the partnership without wages but was credited with earnings in the partnership accounts. He continued to receive pocket‑money and the necessities of life. He was engaged with other family members in development and improvement work on the Dwellingup property. All expenses for materials and charges for the contractors for this work were paid by the partnership. This is a circumstance of some importance in a consideration of the appropriate remedy in this litigation.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
HUGH, GUMMOW AND CALLINAN JJ
KIRBY J
When these matters are taken into account, it is apparent that the order made by the Full Court reflected what in Verwayen was described as the prima facie entitlement of Robert. However, qualification was necessary both to avoid injustice to others, particularly Steven and his family, and to avoid relief which went beyond what was required for conscientious conduct by Mr and Mrs Giumelli. The result points inexorably to relief expressed not in terms of acquisition of title to land but in a money sum. This would reflect, with respect to the third promise, the approach taken by R D Nicholson J when giving relief in respect of the second promise.Conclusion Whilst the holding of the Full Court with respect to the third promise should be upheld, the Full Court erred in the measure of relief which it granted in respect of the Promised Lot. This is a case for the fixing of a money sum to represent the value of the equitable claim of the respondent to the Promised Lot. It will be necessary for the matter to be remitted to a judge of the Supreme Court to take that step. The amount so ascertained, with interest, should be charged upon the whole of the Dwellingup property. There will be no requirement of a subdivision of the Promised Lot as part of the remedy. Fixing of the amount will require the making of valuations and allowances for a range of matters, some of which have been indicated above. It is neither possible nor appropriate now to fix any closed list of matters properly to be taken into account when the matter is remitted[55]. Further submissions and, if that court so chooses, additional evidence will be needed.[55]cf Stratulatos v Stratulatos [1988] 2 NZLR 424 at 440‑441. We should note that the judgment of Master Bredmeyer took matters of partnership accounting only up to June 1986 and, in any event, did not deal fully with all matters in dispute. On one view, as to which we express no decision, for what is now some 12 years, the respondent has been deprived of a share of profits earned by the partnership from the Promised Lot and of rent from the house. Further, in fixing the sum to represent an appropriate monetary order there may be a case for an allowance in his favour representing a share of anticipated profits from the partnership in relation to the Promised Lot for a specified period of future years, perhaps contingent upon the joint lives of Mr and Mrs Giumelli. On the other hand, an allowance would have to be made for the improvement to the value of the land since 1986 brought about, in particular, by Steven's work. In addition to the planting of fruit trees and the construction of sheds and coolrooms, the appellants contend there has been significant expenditure on water supply and storage systems. To enable the matter to be dealt with adequately, it would be appropriate for the partnership action to be brought on concurrently for trial of remaining issues. The moving party in that action is the present respondent and he should be required by the Supreme Court, by direction in the present action, to take the necessary steps to prosecute to trial all remaining issues in the partnership action.
Ratio Decidendi
Legal Principle Established
Established by:
HUGH, GUMMOW AND CALLINAN JJ,
KIRBY J