Ironside v Thisainayagan
[2016] WASC 174
•15/06/16
IRONSIDE -v- THISAINAYAGAN [2016] WASC 174
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 174 | |
| Case No: | CIV:1161/2013 | 17 - 20 MAY 2016 | |
| Coram: | BEECH J | 15/06/16 | |
| 50 | Judgment Part: | 1 of 1 | |
| Result: | Declaration that plaintiff has caveatable interest Order for sale | ||
| B | |||
| PDF Version |
| Parties: | NOEL DAVID IRONSIDE ANNADEVI THISAINAYAGAN |
Catchwords: | Contract Whether contract uncertain Whether contract gives party an interest in land Whether contract varied or discharged by agreement or abandoned Whether notice given as required by contract Whether party in breach of contract |
Legislation: | Nil |
Case References: | Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 Black v Garnock [2007] HCA 31; (2007) 230 CLR 438 Brown v Heffer [1967] HCA 40; (1967) 116 CLR 344 Codelfa Construction Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211; (2014) 48 WAR 300 Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 Fazio v Fazio [2012] WASCA 72 Fitzgerald v Masters (1956) 95 CLR 420 Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd [1995] NSWCA 166; (1995) 7 BPR 14,551 Government Employees Superannuation Board v Martin (1997) 19 WAR 224 Hall v Busst [1960] HCA 84; (1960) 104 CLR 206 Halloran v Minister Administering National Parks and Wildlife Act 1974 [2006] HCA 3; (2006) 229 CLR 545 Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (Unreported, FCA, 29 June 1995) LJ Hooker Ltd v WJ Adams Estates Pty Ltd [1977] HCA 13; (1977) 138 CLR 52 Lloyd's Bank Plc v Rosset [1991] 1 AC 107 Merilla Pty Ltd v Commonwealth of Australia [2015] WASC 309 Nelson v Moorcraft [2014] WASCA 212 Robertson v Unique Lifestyle Investments Pty Ltd [2007] VSCA 29 Rosenhain v Commonwealth Bank of Australia [1922] HCA 41; (1922) 31 CLR 46 Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 Sinclair v Schildt (1914) 16 WALR 100 Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17 Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315 Thorby v Goldberg [1964] HCA 41; (1964) 112 CLR 597 Trad Financial Services Pty Ltd v Trad [2013] NSWSC 1691 Twigg v Kung (1994) 121 FLR 227 Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429 Uranium Equities Ltd v Fewster [2008] WASCA 33; (2008) 36 WAR 97 Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32 Watson v Foxman (1995) 49 NSWLR 315 Weiss v Barker Gosling (1993) 114 FLR 223 York Air Conditioning and Refrigeration (A/sia) Pty Ltd v The Commonwealth (1949) 80 CLR 11 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
ANNADEVI THISAINAYAGAN
Defendant
Catchwords:
Contract - Whether contract uncertain - Whether contract gives party an interest in land - Whether contract varied or discharged by agreement or abandoned - Whether notice given as required by contract - Whether party in breach of contract
Legislation:
Nil
Result:
Declaration that plaintiff has caveatable interest
Order for sale
Category: B
Representation:
Counsel:
Plaintiff : Ms W F Gillan
Defendant : Dr P MacMillan
Solicitors:
Plaintiff : Culshaw Miller
Defendant : HHG Legal Group
Case(s) referred to in judgment(s):
Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191
Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130
Black v Garnock [2007] HCA 31; (2007) 230 CLR 438
Brown v Heffer [1967] HCA 40; (1967) 116 CLR 344
Codelfa Construction Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337
Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211; (2014) 48 WAR 300
Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Fazio v Fazio [2012] WASCA 72
Fitzgerald v Masters (1956) 95 CLR 420
Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd [1995] NSWCA 166; (1995) 7 BPR 14,551
Government Employees Superannuation Board v Martin (1997) 19 WAR 224
Hall v Busst [1960] HCA 84; (1960) 104 CLR 206
Halloran v Minister Administering National Parks and Wildlife Act 1974 [2006] HCA 3; (2006) 229 CLR 545
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29
Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419
Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (Unreported, FCA, 29 June 1995)
LJ Hooker Ltd v WJ Adams Estates Pty Ltd [1977] HCA 13; (1977) 138 CLR 52
Lloyd's Bank Plc v Rosset [1991] 1 AC 107
Merilla Pty Ltd v Commonwealth of Australia [2015] WASC 309
Nelson v Moorcraft [2014] WASCA 212
Robertson v Unique Lifestyle Investments Pty Ltd [2007] VSCA 29
Rosenhain v Commonwealth Bank of Australia [1922] HCA 41; (1922) 31 CLR 46
Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505
Sinclair v Schildt (1914) 16 WALR 100
Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17
Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315
Thorby v Goldberg [1964] HCA 41; (1964) 112 CLR 597
Trad Financial Services Pty Ltd v Trad [2013] NSWSC 1691
Twigg v Kung (1994) 121 FLR 227
Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429
Uranium Equities Ltd v Fewster [2008] WASCA 33; (2008) 36 WAR 97
Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547
Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32
Watson v Foxman (1995) 49 NSWLR 315
Weiss v Barker Gosling (1993) 114 FLR 223
York Air Conditioning and Refrigeration (A/sia) Pty Ltd v The Commonwealth (1949) 80 CLR 11
- BEECH J:
1. Introduction
1 The defendant, Ms Thisainayagan, has owned a property (the Property) on Charles Street in Shenton Park since July 1998. At the time she became the owner, she was in a de facto relationship with the plaintiff, Mr Ironside. By February 2000, the de facto relationship between the parties had come to an end. On 25 February 2000, the parties signed a written agreement (the Agreement) in relation to the Property.
2 In this action, Mr Ironside claims that under the Agreement he has an interest in the Property reflecting his contributions to its purchase, renovation and maintenance and his right to a half share of profits on its sale. He also claims an order for the sale of the Property.
3 Ms Thisainayagan raises a number of defences to Mr Ironside's claims. Among other things, she denies that the Agreement gives him any interest in the Property. Further, she asserts that the Agreement was replaced by an oral agreement made in 2004.
4 These reasons are organised as follows:
(1) Introduction. [1] - [4]
(2) The pleadings and the issues. [5] - [11]
(3) Findings of fact. [12] - [113]
(4) Was the Agreement void for uncertainty when it was made? [114] - [130]
(5) Does the Agreement give Mr Ironside an interest in the Property? [131] - [143]
(6) Was the Agreement varied to include Mr Ironside's entitlements in respect of the Yilgarn Street Property? [144]
(7) The parties' discussions as to rent under the Agreement and the effect of those discussions. [145] - [158]
(8) Was the 2004 Agreement made? [159]
(9) Did Ms Thisainayagan breach the Agreement in the respects alleged by Mr Ironside? [160] - [169]
(10) Did Mr Ironside give such notice as is required under the Agreement? [170] - [176]
(11) Was the Agreement abandoned or terminated by consent? [177]
(12) Does Mr Ironside's failure to pursue his claim under the Agreement between 2004 and 2009 mean that he is precluded from enforcing the Agreement by reason of laches? [178] - [183]
(13) Summary of conclusions. [184]
(14) Miscellaneous questions for the taking of the account. [185] - [187]
(15) Conclusion. [188] - [189]
2. The pleadings and the issues
5 Mr Ironside claims that under the Agreement he has an interest in the Property reflecting his contributions to its purchase, renovation and maintenance.1 He further claims that the parties agreed that his contributions to the renovation of another property on Yilgarn Street in Shenton Park (the Yilgarn Street Property), and his share of profits on its sale, would be treated as contributions to the Property under the Agreement.2
6 Mr Ironside alleges that Ms Thisainayagan has breached the Agreement by failing to pay rent with respect to the Property since 2000 and by commencing proceedings against him seeking orders that the Agreement is invalid.3 He pleads that by reason of these breaches he is entitled to an immediate payment reflecting his interest in the Property.4 Mr Ironside further contends that Ms Thisainayagan is estopped from denying that her unpaid rent should be treated as a capital contribution by him under the Agreement.5
7 In his prayer for relief Mr Ironside seeks:
(a) a declaration that he has a caveatable interest in the Property;
(b) an order for sale of the Property;
(c) an account of the parties' contributions to the Property;
(d) an account as to rental collected by Ms Thisainayagan and as to any unpaid rent contributions; and
(e) an order for distribution of the proceeds of sale of the Property.
8 After the matter was listed for trial, one of the parties' accounting experts became unavailable for the trial dates. Subsequently, by consent, it was ordered that all of the issues except those in prayer for relief par (c),(d) and (e) be tried as preliminary issues.
9 Ms Thisainayagan denies all of Mr Ironside's claims. The following further matters are pleaded by Ms Thisainayagan and advanced at trial in defence of Mr Ironside's claims:
(1) Parts of the Agreement are so uncertain as to render the whole Agreement void for uncertainty.6
(2) The Agreement was abandoned or terminated by consent.7
(3) Mr Ironside is estopped from enforcing the Agreement, or is not entitled to relief due to his laches in failing to pursue his claim between 2004 and 2009.8
(4) Mr Ironside has not given the notice required under the Agreement.9
(5) The Agreement came to an end by virtue of an oral agreement made in 2004.10
(6) The Agreement was varied so that Ms Thisainayagan did not have to pay rent after October 2003 or, alternatively, Mr Ironside waived payment of rent by Ms Thisainayagan or is estopped from claiming rent from her.11
In closing submissions, Ms Thisainayagan abandoned the other matters pleaded in her defence.12
10 The essential issues may be summarised as follows:
(1) Was the Agreement, when made, valid and enforceable, or was it void for uncertainty?
(2) Does the Agreement give Mr Ironside an interest in the Property?
(3) Was the Agreement varied so as to include Mr Ironside's contributions to, and his entitlements in respect of, the Yilgarn Street Property?
(4) As to the rent payable by Ms Thisainayagan under the Agreement:
(a) Is Ms Thisainayagan estopped from denying that her unpaid rent should be treated as a capital contribution by Mr Ironside under the Agreement?
(b) Was the Agreement varied so that no rent was payable from October 2003, as alleged by Ms Thisainayagan, or does any waiver or estoppel arise in her favour in this respect?
(5) Was an agreement made in 2004 such that the Agreement is no longer on foot?
(6) Did Ms Thisainayagan breach the Agreement in the respects alleged by Mr Ironside?
(7) Has Mr Ironside given such notice (if any) as is required by the Agreement in order that he obtain an order for sale of the Property?
(8) Was the Agreement abandoned or terminated by consent or is Mr Ironside estopped from enforcing the Agreement?
(9) Does Mr Ironside's failure to pursue his claim under the Agreement between 2004 and 2009 mean that he is precluded from enforcing the Agreement by reason of laches?
11 The first, second and seventh of these issues are questions of law informed by the proper construction of the Agreement. The third and fifth issues are questions of fact. Resolution of the remainder of the issues is, as will be seen, substantially informed by determination of the conflicting evidence as to the facts. It is convenient, therefore, to begin by setting out my factual findings, before turning to these issues.
3. Findings of fact
3.1 General observations
12 The great bulk of the events and circumstances the subject of evidence in this action occurred more than 10 years ago and, in many cases, more than 15 years ago. The dispute between the parties did not emerge until 2009, and legal proceedings were not commenced until 2012.
13 In those circumstances, the parties were first asked to recall relevant events many years later, in the context of litigation having commenced. In many respects, the parties did not have any note or other document from which to refresh their memory of important conversations.
14 The only witnesses of any significance were the two parties. Their versions of events directly conflicted in numerous and significant respects.
15 In the circumstances, the following observations of Tamberlin J13 should be borne in mind:
[Given the lapse of time] between the events and conversations raised in evidence and the hearing of the evidence before me, the only safe course is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence. In circumstances where the events took place so long ago, it must be an exceptional witness whose undocumented testimony can be unreservedly relied on. The witnesses in this case unfortunately did not come within that exceptional class. The discussions referred to in evidence were capable of bearing quite opposed meanings depending on subtle differences of nuance and emphasis, and a proper appreciation of the significance of those matters must necessarily be considerably diminished over such a long period of time.
16 The following observations of McClelland CJ in Watson v Foxman14 are also apposite:
[H]uman memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed.
17 Where the parties' evidence conflicts, unless I say otherwise, I prefer the evidence of Mr Ironside. In my view, his evidence accorded distinctly better with the contemporaneous documents and with the objective probabilities. Further, as I will explain in more detail in this section of my reasons, Ms Thisainayagan's evidence on a number of topics, and the way she gave that evidence, was implausible and detracted from her credibility generally. These include her evidence in relation to:
(a) the receipt she signed on 23 August 1998;15
(b) a document she prepared in early 2000 setting out the parties' financial contributions to the Property;16
(c) her denial, notwithstanding these documents, that by August 1998 she had received $50,000 from Mr Ironside;
(d) her evidence as to her understanding of the Agreement and the conversations prior to it being signed; and
(e) her evidence of how she funded the amount of approximately $15,000 of the purchase price for the Property that did not come from the loan secured by the mortgage over the Property.
3.2 Background: the parties' relationship up to 1998
18 Mr Ironside is the trustee of the Noel Ironside Family Trust (the Trust).17 The primary beneficiaries of the Trust are his children.18 The Trust has several bank accounts, including a German one.19
19 The parties first met while working at the Australian Taxation Office and commenced a personal relationship in about 1995 or 1996.20 Shortly after their relationship commenced, Ms Thisainayagan moved into Mr Ironside's house at 27 Loftus St, Nedlands.21
20 Ms Thisainayagan says that she purchased run-down properties to renovate while living with Mr Ironside (and subsequently) in order to supplement her income.22 In her first witness statement, she lists a number of properties that she purchased between 2001 and 2007.23
21 Before Ms Thisainayagan met Mr Ironside, she purchased an investment property in Mt Hawthorn.24
22 Renovation of Ms Thisainayagan's Mt Hawthorn property commenced in 1998.25 Mr Ironside made financial and non-financial contributions to the renovation, and she reimbursed him for all of his financial contributions.26 The Mt Hawthorn renovation was completed in late 1998.27 Ms Thisainayagan kept all rental income from the Mt Hawthorn property in 1998.28 She made it clear to Mr Ironside that the property was hers and that she considered his contributions loans.29
23 Mr Ironside had previously been married. From his perspective, the resolution with his wife of their financial position and arrangements in relation to the custody of their children were an ongoing source of difficulty and stress for him.30 On 21 January 1998, the Family Court made property settlement orders in relation to Mr Ironside's marriage and some orders in relation to his children.31
3.3 The parties' discussions leading to the purchase of the Property
24 I accept the evidence of Mr Ironside as to the discussions between the parties leading to the purchase of the Property by Ms Thisainayagan.
25 Mr Ironside told Ms Thisainayagan that he had trust money sitting in a German bank account providing little return. He wanted to invest that money to provide a long-term return to the Trust.32 He and Ms Thisainayagan inspected the Property a number of times in April or May 1998.33
26 After they inspected the Property, he and Ms Thisainayagan discussed how they might renovate it. They discussed their respective financial positions and how the acquisition and renovation of the Property might be funded.34 In the course of their discussions:
(a) Mr Ironside suggested that the Property be in Ms Thisainayagan's name to avoid conflict with his ex-wife;35
(b) Mr Ironside said that he would use Trust funds to pay for the deposit and the materials and labour for the renovation, while Ms Thisainayagan discussed how she would obtain a loan and make mortgage repayments;36
(c) Mr Ironside proposed that if the Property was sold, each party would receive a return of their capital subscriptions and the profit would be shared equally;37 and
(d) the parties discussed that they would have equal input into planning the renovation of the Property, but that Mr Ironside would take care of the 'more practical side' of implementing it and Ms Thisainayagan would 'be responsible for the paperwork'.38
27 Ms Thisainayagan says that:
(a) Mr Ironside and she never discussed the Property being or becoming a joint asset either before or after she purchased it;39
(b) what the parties discussed was Mr Ironside providing a loan to her;40 and
(c) the purchase was not a 'joint venture' and it was only in 1999 or 2000 that she realised that Mr Ironside wanted half the profits from the sale of the Property.41
28 I reject this evidence of Ms Thisainayagan. Among other things, it is inconsistent with the receipt she signed in August 1998, to which I will shortly come.42
3.4 Ms Thisainayagan acquires the Property
29 On or about 4 June 1998, Ms Thisainayagan entered into a contract to purchase the Property for $217,000.43 She paid a cheque for the deposit of $3,000 on 16 June 1998.44
30 On or about 28 July 1998, settlement occurred.45
3.5 The funding of the purchase of the Property
31 Prior to the purchase of the Property, Ms Thisainayagan borrowed the sum of $350,000 from Permanent Trustee Company Ltd.46 Those funds were to assist with the purchase of the Property and to refinance an existing mortgage in an amount of $150,000. The loan was for 25 years, secured by a first registered mortgage over the Mt Hawthorn property and a first registered mortgage over the Property.
32 At settlement of the purchase of the Property, an amount of just over $200,000 was provided by the mortgagee.47 A further amount of just over $15,000 was required for settlement. I find that this amount was paid at settlement by Ms Thisainayagan using funds provided to her by Mr Ironside from the German bank account to which he had earlier referred.
33 In her evidence in chief, Ms Thisainayagan asserted that the whole of the purchase price for the Property had been funded by the bank loan secured by mortgage.48 She says that Mr Ironside did not contribute to the purchase of the Property.49 Ms Thisainayagan denies that funds from the German bank account were used to purchase the Property, saying that there was no written confirmation of this being done because 'it never happened'.50
34 In cross-examination, Ms Thisainayagan conceded, for the first time, that not all of the purchase price paid at settlement had come from funds provided by the mortgagee.51 She would not, and did not, accept that the remaining $15,000 or so was funded from monies she received from the Trust's German bank account.52 Her evidence in this respect was implausible and detracts from her credibility generally. At first, she said in general terms that she had access to other funds.53 When pressed, she said that she may have used her credit card.54 Then she said she may have borrowed the funds from her parents.55 In my view, in these answers Ms Thisainayagan was throwing up speculative possibilities to avoid accepting that she had used funds she received from the Trust.
35 Ms Thisainayagan paid the $3,000 deposit on the Property with a cheque from her cheque account. However, the day before she paid the deposit, an amount of $3,000 was deposited into her cheque account from another account.56 At that stage, the balance of her cheque account was less than $50. Ms Thisainayagan did not give discovery of the bank statements for the other account. Similarly, a few days before Ms Thisainayagan paid a cheque for $5,702.50 for stamp duty, the same amount was deposited into her cheque account from the other account.57
36 I find that the $3,000 deposit and the stamp duty amounts were funded from monies received by Ms Thisainayagan from the Trust's German bank account. In the next section of these reasons I find that in the period from June to August 1998, funds totalling $50,000 were transferred from the Trust's German bank account to Ms Thisainayagan.
3.6 The parties' financial contributions to the Property: July 1998 to 1999
37 By August 1998, Mr Ironside had arranged for the transfer of sums totalling $50,000 from the Trust's German bank account to Ms Thisainayagan.58 Notwithstanding two documents in her own hand acknowledging that this was so, at trial Ms Thisainayagan steadfastly refused to accept that the transfers were made.59
38 On 23 August 1998, Ms Thisainayagan wrote and signed a receipt addressed to Mr Ironside.60 That document:
(1) acknowledged receipt of $50,000 towards the purchase and renovation of the Property;
(2) provided that Ms Thisainayagan undertook to repay that amount in full at a future date within six months of either receipt of written notification from Mr Ironside or disposal of the Property, in a timeframe as agreed. The amount to be repaid was to be less costs borne jointly and incurred in the acquisition, maintenance and disposal of the Property, and in any necessary preservation of the title, less interest on capital repayments made during the course of servicing the housing loan on the Property;
(3) stated that at the time of reimbursement, Mr Ironside would become entitled to profit on similar terms on sale price or value as assessed by a valuer;
(4) provided that proper records of accounting of the property expenses paid by both parties on capital works or maintenance were to be kept and access was to be provided on reasonable notice; and
(5) expressly stated that Ms Thisainayagan was permitted to rent the Property, with rental income to be applied to the housing loan.
39 In cross-examination, Ms Thisainayagan refused to accept that the receipt she signed meant what it said. She described the document as 'a working document',61 a 'draft'62 and as 'scenario planning'.63 She could not provide a credible explanation of why she signed and dated a document of this character.64 Her document acknowledges receipt of $50,000. Nevertheless, she refused to accept that she had received that sum.65 When asked to explain why the document mentioned the sum of $50,000, she said that sum was a 'possibility of an amount that might be [what] it would take to renovate [the Property]'.66 Her attempts to avoid the obvious detract from her credibility generally.
40 Further, in early 2000, Ms Thisainayagan prepared a document setting out the parties' respective contributions to the purchase and renovation of the Property. I will say more about this document later in these reasons. What is significant for present purposes is that, in this document, Ms Thisainayagan recorded that by August 1998 Mr Ironside had made two contributions totalling $50,000.67
41 It is not in dispute that the following further payments were made by or on behalf of the Trust to accounts under the control of Ms Thisainayagan:
(1) $10,000 on 9 December 1998.68
(2) $29,310 on 29 March 1999.69
(3) Two payments, each of $9,800, on 9 June 2000.70
42 Mr Ironside caused the transfer of the sum of $29,310 from the Trust's German bank account to Ms Thisainayagan's sister's account on 29 March 1999 because Ms Thisainayagan told him she needed money to pay tradesmen and to buy materials for the renovation of the Property, as she had spent almost all of the $50,000 already provided.71
3.7 Ms Thisainayagan's financial contributions: 1998 to 2000
43 It is common cause that between August 1998 and February 2000 Ms Thisainayagan paid a total of $59,466.06 towards the interest and capital repayments on the mortgage for the Property, as set out in par 32 of her further submissions.72
3.8 Non-financial contributions to the Property
44 Ms Thisainayagan engaged a builder to do the renovations on the Property.73 The builder did not complete the required work. Ms Thisainayagan told Mr Ironside that the builder had become bankrupt.74
45 Mr Ironside then substantially took on the role of builder, working full-time for about six months and then two or three days per week for the second half of 1999.75 He did not keep a record of his time. That was because of the parties' profit sharing arrangement.76
3.9 The breakdown of the parties' relationship and the sale of the Mt Hawthorn property: 1999 - 2000
46 By about the middle of 1999, the parties' de facto relationship broke down, although Ms Thisainayagan continued to live at Mr Ironside's Nedlands property until early 2000.77 In late 1999 or early 2000, Ms Thisainayagan sold her Mt Hawthorn property.78
47 It is an agreed fact that Ms Thisainayagan applied $35,000 from the proceeds of sale of the Mt Hawthorn property to the loan for the Property.79 In her witness statement, Ms Thisainayagan had asserted that she had applied approximately $56,000 from the proceeds of sale of the Mt Hawthorn property to the loan.80 In other documents in 2009, Ms Thisainayagan had asserted that she had applied a sum of more than $72,000.81
3.10 The discussions leading to the Agreement
48 As I have said, by the end of 1999, the de facto relationship between the parties had broken down.
49 In late 1999, Mr Ironside told Ms Thisainayagan that he was concerned about the lack of a written agreement between the parties in relation to their contributions to the Property.82 He suggested to her that he ask his father to assist him in preparing an agreement, and Ms Thisainayagan agreed to that suggestion.83
50 In late 1999, the parties met Mr Ironside's father to discuss the proposed agreement. They discussed a concept being applied to their contributions by which contributions made at an earlier point in time would be given a greater imputed value, described by Mr Ironside's father as 'putative interest'.84
51 In late 1999, Mr Ironside's father prepared a handwritten draft agreement between Ms Thisainayagan and Mr Ironside.85 With limited exceptions, the draft is in terms substantially identical to the typed Agreement dated 25 February 2000 ultimately signed between the parties. I will set out the terms of the Agreement later in these reasons. The handwritten draft does not have the figures in relation to the amount of the parties' contributions, and does not include cl 3(ii) of the typed version, reproduced below.
52 As I have said, sometime in early 2000 Ms Thisainayagan prepared a document setting out the contributions of each of the parties up to 31 December 1999.86 That document also set out calculations for the 'indexation' of those contributions from the time the contribution was made to December 1999.
53 The total amount, after indexation, for each of the parties shown in Ms Thisainayagan's document was the amount stated for that party's contribution in the Agreement.
54 I find that Ms Thisainayagan, who was a certified practising accountant and who, as between the parties, was responsible for the bookkeeping and paperwork in relation to the Property, prepared the figures which she wrote, and performed the calculations which she set out, in her document. I reject Ms Thisainayagan's evidence that she simply inserted figures provided to her by Mr Ironside.87
55 Further, I reject Ms Thisainayagan's evidence that she prepared this document simply in order to identify how much Mr Ironside had lent to her.88 Her evidence in this respect detracts from her credibility generally. The document Ms Thisainayagan prepared did not simply identify Mr Ironside's contributions. It set out her contributions, and calculated an indexation for them. It is obvious that Ms Thisainayagan prepared this document and performed these calculations for the purposes of inserting them into the draft agreement prepared by Mr Ironside's father. Her refusal to acknowledge this obvious fact,89 and her persistence in her attempt to proffer an implausible alternative explanation for the document, detract from her credibility.
56 Ms Thisainayagan typed the version of the Agreement which the parties signed. I reject her evidence to the contrary.90 In my view, her evidence in that respect is one of her several attempts to distance herself from the Agreement.
57 On 25 February 2000, at the suggestion of Mr Ironside, the parties went before a justice of the peace and signed the Agreement. The Agreement was witnessed by the justice of the peace. The process of signing the Agreement in the presence of a justice of the peace reinforces the parties' objective intention that the Agreement set out the parties' rights and obligations in relation to the Property in a legally binding way.
58 In Ms Thisainayagan's witness statement and in cross-examination she sought to distance herself from the Agreement, and any suggestion that it reflected a position to which she had really agreed. She says in her statement that Mr Ironside 'presented her' with an agreement on or about 23 February 2000.91 That conveys a misleading picture of what occurred. She was not presented with an agreement. The parties had discussions; Mr Ironside's father prepared a handwritten draft; Ms Thisainayagan then performed calculations of the parties' contributions, as indexed, for insertion into the Agreement. After that, she typed the final version of the Agreement.
59 In her evidence in her witness statements92 and in cross-examination,93 Ms Thisainayagan makes a number of assertions about the circumstances in which the Agreement was signed and the parties' discussions preceding it. For example, she says that she told Mr Ironside she did not want to sign the Agreement and that he said that the Agreement meant nothing and that she could pay him back the monies he lent whenever she wished.94 I reject this evidence. Among other reasons, it is not consistent with:
(a) Mr Ironside's conduct in requesting that the Agreement be signed in the presence of a justice of the peace;
(b) Ms Thisainayagan's conduct in assisting with the drafting of the Agreement by preparing the calculation of indexed contributions and by typing the final version of the Agreement; and
(c) Ms Thisainayagan's conduct in paying money on account of rent shortly after the Agreement was executed.
60 In a similar vein, Ms Thisainayagan also gave evidence that from time to time in the years after the Agreement was signed, she told Mr Ironside that she wanted to change it and he said in response that he would not enforce the Agreement.95 I also reject that evidence.
3.11 The terms of the Agreement
61 The Agreement is in the following terms.
An agreement made this 25th day of February 2000 between Annadevi Thisainayagan (hereinafter called 'Anna') and Noel David Ironside (hereinafter called 'Noel').
Whereas:
(a) the parties have jointly caused to be acquired in the name of Anna the land and building known as 3 Charles Street, Shenton Park WA 6008 being the premises comprised in Lot No 47 Plan/Diagram 1537 Certificate of Title Vol 1735 Folio 689 (hereinafter called 'the said premises').
(b) the parties have further caused substantial monies to be expended in the repair and renovation of the said premises.
(c) Anna acknowledges that Noel has subscribed sixty seven thousand two hundred and twenty one dollars ($67221) towards monies so invested and Noel acknowledges that Anna has subscribed hereto twenty six thousand nine hundred and seventeen dollars ($26917).
(d) it is desired by the parties to record the terms agreed between them and to provide for the management of their investment and for future holding and disposal of the same.
Therefore it is agreed as follows:
1. As soon as practicable, but in any event within 4 weeks, Anna shall cause/the parties shall cause:
(a) an exact account to be drawn up of monies subscribed by Noel and Anna respectively and of putative interest (calculated to date) upon such monies;
(b) an account to be established and agreed by the parties of all monies invested by the parties respectively in:
(i) the acquisition of the said premises;
(ii) the repair and renovation thereof and all outgoings relative to the premises and the leasing and otherwise dealing with the premises; and
(iii) further subscription (if any) to the capital required.
(c) an account of all the monies received by way of income from leasing to the premises.
(d) each party to have full and free access to and copies of all the documents and information available to either party as though the said premises were jointly owned and managed by the parties.
2. Anna shall not without having obtained the prior written agreement of Noel:
(a) sell or otherwise dispose of the said premises or any interest in them;
(b) further mortgage or otherwise encumber the said premises.
3. (i) The said premises may be let by Anna upon fair market terms and conditions, for the joint benefit of the parties, such letting to be effected in manner and subject to such terms as the parties shall from time to time agree.
(ii) Where Anna occupies the said premises, half of the market rent of the said premises shall be credited to Noel and a minimum actual payment to be agreed on by Noel and Anna and increased from time to time of $100 shall be paid to Noel fortnightly. The difference between the minimum actual payment and half the fortnightly market rent shall be accounted for as a further subscription to the capital by Noel.
4. Noel shall be at liberty any time:
(a) to give Anna notice in writing requiring upon expiration of three months from the date of such notice, payment of all monies owing to him and/or becoming payable to him under this agreement by the due date;
(b) in the event of breach of the terms of this agreement by Anna, to give such notice with immediate effect.
5. In calculating the amount payable to Noel under paragraph 4, the then value of the said premises shall be established either by sale on the open market or in a manner to be agreed between the parties within three months of the issue of a notice under para 4(a).
6. Pursuant to this agreement Noel shall be at liberty to enter a caveat upon the Title to the said premises.
7. In essence the parties agree that:
(i) a first charge in calculation of division of profit between the parties shall be the sum equal to putative interest (indexed from date of subscription) upon capital subscribed by the respective parties;
(ii) respective capital subscriptions shall then be repaid to the respective parties; and
(iii) after settlement of all outgoings net profit shall be divided equally between parties.
8. For capital gains tax purposes Anna will claim an exemption from tax under the capital gains tax provisions for the entire time that Anna is the legal owner of the said premises.
[SIGNED] [SIGNED]
……………………………………. …………………………………….
Annadevi Thisainayagan Noel David Ironside
WITNESS
[SIGNED] [25/2/00]
[46 Bulimba Road
NEDLANDS 6009]
62 In early 2000, Ms Thisainayagan moved out of Mr Ironside's Nedlands property and into the Property.96
3.13 Discussions about rent and payment of rent: 2000
63 Clause 3(ii) of the Agreement provides that where Ms Thisainayagan occupies the Property, half of the market rent should be credited to Mr Ironside and a minimum payment of $100, or a greater sum as agreed between the parties, should be paid by Ms Thisainayagan to Mr Ironside fortnightly. The clause further provides that the difference between the actual payment and Mr Ironside's half share of the market rent shall be treated as a further subscription of capital by Mr Ironside.
64 At some time in the first half of 2000, a real estate agent visited the Property in order to appraise the market rent for it.97 On 1 May 2000, 15 May 2000 and 29 May 2000, Ms Thisainayagan made fortnightly payments of $280 into her Basic account, to which I will refer further shortly.98 I infer from that that the agent appraised the market rent in about late April 2000.
65 Ms Thisainayagan told Mr Ironside that she could not afford to pay rent at the suggested market rate.99 Mr Ironside said that she could pay the $100 per fortnight required by the Agreement and the shortfall would accrue as capital under the Agreement, a position with which she agreed.100
66 From June 2000 until August 2004, Ms Thisainayagan made regular monthly payments of $280 into her Basic account.101 Ms Thisainayagan said that she gave Mr Ironside access to this account and that from time to time he drew money from it.102 I accept Mr Ironside's evidence that he did not have or exercise access to Ms Thisainayagan's Basic account.103 However, Ms Thisainayagan did make payments totalling $10,474 with Mr Ironside's authority from the Basic account to use for renovating the Yilgarn Street Property.104
3.14 Ms Thisainayagan purchases the Yilgarn Street Property
67 In about late 2002, Ms Thisainayagan purchased the Yilgarn Street Property.105
68 Both parties agree that they reached an agreement to the effect that Mr Ironside would provide capital and labour for the renovation of the Yilgarn Street Property in return for a 40/60 profit share and reimbursement for his labour and capital contributions.106 Mr Ironside says that this agreement was made at around the time the property was purchased. Ms Thisainayagan says that it was only after she had acquired the property, when she encountered problems with delay, that she accepted Mr Ironside's offer in early 2003 to work on the Yilgarn Street Property and provide capital subscriptions in return for a 40/60 profit share. Nothing turns on that difference. To the extent that any finding need be made, for the reasons I have given as to my general preference for Mr Ironside's evidence, I prefer his version.
69 Mr Ironside did many hours of trade-type work and purchased materials for the renovation of the Yilgarn Street Property.107 He kept a timesheet of the hours that he worked.108 In June 2003, he provided an account to Ms Thisainayagan for materials and tradesmen's labour.109
70 Mr Ironside says, and I accept, that he worked a total of 577 hours which he charged at $20 per hour.110 He has not been paid for his time, or for the materials he purchased, which total $14,687 in value.111
71 Between February and July 2003, Mr Ironside transferred a total of $24,850 from the Trust's German bank account to Ms Thisainayagan's sister's account.112
72 I find that those funds were transferred by Mr Ironside at Ms Thisainayagan's request for the purpose of renovating Yilgarn Street. I do not accept Ms Thisainayagan's evidence that 'not all of this money was spent on Yilgarn Street'.113 In particular, I am not satisfied that Mr Ironside accessed the monies in the account.
3.15 The sale of Yilgarn Street: was an agreement made to roll over Mr Ironside's entitlements in Yilgarn Street into the Agreement?
73 In about November 2003, Ms Thisainayagan sold the Yilgarn Street Property. The sale settled on 11 December 2003.114
74 In response to a request from Mr Ironside to do so, Ms Thisainayagan prepared a handwritten account to show the parties' entitlements to the proceeds of sale of Yilgarn Street.115 The first three pages of the document set out Ms Thisainayagan's expenditure. Pages 4 and 5 set out Mr Ironside's expenditure. The final page, page 6, sets out figures to calculate the net profit and the parties' respective profit shares of 40% and 60%. Ms Thisainayagan's account records Mr Ironside's capital transfers totalling about $24,800, and his material, labour and expenses totalling $26,452. The document also sets out an amount of $10,474.97, recorded as 'Noel's basic account - transfer in'. Mr Ironside's share of the profits is recorded, in Mr Ironside's writing, as $3,916. Thus, the account prepared by Ms Thisainayagan contemplated payment of a total amount of approximately $60,000 to Mr Ironside.
75 In the account, Ms Thisainayagan calculated and added interest on the parties' respective contributions. She used the rate of 5.5%. Mr Ironside did not object to that.116 However, Ms Thisainayagan says, and I accept, that in calculating profit share, Mr Ironside excluded the interest or indexing component.117
76 Mr Ironside's evidence is that the parties had a discussion to the following effect:
(a) Ms Thisainayagan said that, in order to pay the amount due to Mr Ironside of approximately $60,000, she would need to sell the Property;
(b) Mr Ironside said that he did not wish for the Property to be sold;
(c) one of the parties, probably Ms Thisainayagan, suggested that the amount owed to Mr Ironside be rolled over into the Agreement and stand as a capital contribution by Mr Ironside to the Property; and
(d) both parties expressed their agreement with this proposal.118
77 Mr Ironside's case as to the roll over agreement relies on his oral evidence, and is not supported by any document. The relevant events occurred more than 12 years ago. As Ms Thisainayagan emphasises in her submissions,119 on Mr Ironside's evidence there was only one discussion about the topic120 which was part of a meeting that took between half an hour and an hour,121 and Mr Ironside never documented the agreement even though $60,000 was a significant sum to him. Those circumstances underline the need for caution before being satisfied by Mr Ironside's evidence as to the roll over agreement.
78 Nevertheless, for the reasons that follow, I accept Mr Ironside's evidence outlined in [76].
79 Ms Thisainayagan accepts that, at their meeting, Mr Ironside suggested that the debt on Yilgarn Street be transferred to the Agreement.122 However, she denies that she ever agreed to this arrangement.123
80 Ms Thisainayagan's evidence is that Mr Ironside said words to the effect that 'he was happy to receive [the Yilgarn Street Property] payment whenever'.124 I think it is unlikely that Mr Ironside would have adopted and stated the position that he was happy to receive the payment of $60,000 'whenever'.
81 It is common ground that Mr Ironside has not been paid any amount in respect of the Yilgarn Street Property. There is no evidence that at any time from 2003 to 2009, Mr Ironside demanded or requested payment of the $60,000 sum due to him in respect of the Yilgarn Street Property. The sum of $60,000 was and has at all times been a significant sum for Mr Ironside.125 Those circumstances invite attention to why Mr Ironside did nothing for many years to pursue an entitlement to $60,000. It is common ground that at the parties' meeting someone made the suggestion that the debt owed to Mr Ironside on the Yilgarn Street Property be transferred into the Agreement as a contribution by him. Agreement as to that suggestion would explain Mr Ironside's subsequent inactivity. To my mind, no other plausible, sensible explanation emerges from the evidence.
82 In my view, the fact that, since the Yilgarn Street Property was sold and the parties had the discussions I have referred to, Mr Ironside has not been paid anything in respect of the Yilgarn Street Property, and has made no request or demand for payment, distinctly favours the conclusion that an agreement to the effect alleged by Mr Ironside was made at the parties' meeting in late 2003 or early 2004.
83 Ms Thisainayagan submits that, given that as at November 2003 she had a line of credit for an amount of $125,000 available to her,126 she is unlikely to have said that in order to pay Mr Ironside the sum of $60,000, she would need to sell the Property.127 I do not accept that this is so. Ms Thisainayagan had or may well have had other intentions in respect of the line of credit for $125,000. For example, throughout 2003, Ms Thisainayagan spoke to Mr Ironside about swapping Mr Ironside's equity in the Property under the Agreement for debt and paying him out in an amount of about $120,000.128 That was her purpose in obtaining the line of credit.129 Mr Ironside said that he did not agree to converting the Agreement into a loan agreement or to being paid out.130 I find that in circumstances in which Ms Thisainayagan was unable to entirely pay out Mr Ironside's interest in the Property, she did not wish to use the line of credit to pay out Mr Ironside's Yilgarn Street Property entitlements. Rather, she said to him that in order to pay him those entitlements, she would need to sell the Property and, to avoid doing that, she agreed to roll over Mr Ironside's Yilgarn Street Property entitlements into his capital account under the Agreement.
84 Thus, I do not accept Ms Thisainayagan's closing submission131 that in circumstances where she had been pressing through 2003 for an equity for debt swap in relation to the Property, it is inherently unlikely that she would have agreed to increase Mr Ironside's equity in the Property by proposing or agreeing to the roll over of Mr Ironside's entitlements in the Yilgarn Street Property into the Agreement.
3.16 November 2003: did Mr Ironside agree that Ms Thisainayagan could stop paying rent?
85 Ms Thisainayagan says that, in the context of rejecting her offer to pay out Mr Ironside at about $120,000 under the Agreement, he said that she no longer had to pay rent.132 She says that as a result, she stopped paying rent into the Basic account which she had set up for that purpose.133 I do not accept this evidence of Ms Thisainayagan. I prefer the evidence of Mr Ironside134 that:
(a) Ms Thisainayagan showed Mr Ironside a bank statement for the Basic account from 1 August 2003 to 3 November 2003;135
(b) Ms Thisainayagan said that she had been making monthly deposits of $280 into the account;
(c) Ms Thisainayagan said that she would temporarily stop paying monies into the account for rent due to her financial hardship;
(d) as a result, he made a note that payments had 'stopped being deposited as at 30 October 2003'; and
(e) he did not agree that, from then on, Ms Thisainayagan need not pay any further rent.136
86 In fact, Ms Thisainayagan did not stop making monthly payments of $280 into the Basic account following this conversation. She continued to do so until August 2004.137 In September 2004, the Property was tenanted. That is why she stopped depositing money at the end of August 2004.
87 The fact that Ms Thisainayagan continued depositing money until August 2004 militates firmly against acceptance of her evidence that in November 2003 she was told by Mr Ironside that she no longer needed to pay rent into the Basic account.
88 In the course of cross-examination, Ms Thisainayagan sought to explain her continued payment of rent after November 2003 on the basis that she was paying off her outstanding half payments.138 I reject that evidence. I think it was an after-thought, designed to avoid the fact that her ongoing payment of money into the Basic account does not sit easily with her assertion of an agreement in November 2003 that she need not do so. She said nothing in her witness statement to the effect that she continued making payments in order to pay off the unpaid half of Mr Ironside's share of the market rent. Moreover, under the Agreement, she had no obligation to do so.
89 I will make further findings about the parties' discussions as to rent in sections 3.18 and 7 of these reasons.
3.17 Was the alleged 2004 Agreement made?
90 Ms Thisainayagan alleges that in about the middle of 2004 the parties made an oral agreement that superseded the Agreement.139 The alleged 2004 Agreement included a term that Mr Ironside's interest in the Property would be converted into a debt, as well as terms for the repayment of the parties' contributions from the sale proceeds for the Property. Ms Thisainayagan says it was agreed that the amount of the debt to Mr Ironside would be determined as follows:
(a) The value of the Property would be treated as $469,000.
(b) All costs Ms Thisainayagan incurred since the Agreement would be deducted by way of (notional) reimbursement.
(c) All interest paid by Ms Thisainayagan on her bank loan would be similarly deducted.
(d) Amounts of $67,221 and $26,917 referred to in the Agreement would also be deducted.
(e) Ms Thisainayagan would be credited with the net proceeds from the sale of the Mt Hawthorn property that she had applied to her loan.
(f) The outstanding debt on Ms Thisainayagan's loan would be deducted.
(g) The balance of the sale proceeds would be split evenly.
(h) Interest would then accrue on Mr Ironside's debt at a rate equal to the midpoint between the Reserve Bank cash rate and the Commonwealth bank bond rate.
91 Ms Thisainayagan says that after mid-November 2004 she dealt with the Property on the basis of the 2004 Agreement.140
92 I do not accept this evidence of Ms Thisainayagan. There are several reasons why that is so.
93 First, I refer to my general observations as to Ms Thisainayagan's credibility. In circumstances where Ms Thisainayagan's assertion of the 2004 Agreement is not supported by any document, or by any other evidence, I would be very hesitant to accept her assertion even without any further factors militating against its acceptance.
94 Secondly, Ms Thisainayagan's evidence in relation to the 2004 Agreement was, in some respects, unsatisfactory. For example, she says in her first witness statement that the notional value of the Property was fixed at $469,000, being $479,000, the value given to the Property in an appraisal obtained in July 2004, less $10,000 for the agent's commission.141 In fact, the July 2004 appraisal was for a selling price of $529,000.142 When this was pointed out to Ms Thisainayagan in cross-examination, she said that the notional price of $469,000 had been derived as follows. During the previous year the parties had an appraisal of $469,000. That was increased by $10,000 to take account of the passage of time and then reduced by $10,000 for the agent's commission.143 I think it is unlikely that in circumstances where there was a more current appraisal in the sum of $529,000, and the value of the Property was being used to ascertain Mr Ironside's share of the profits, Mr Ironside would have agreed to the figure of $479,000 as alleged by Ms Thisainayagan.
95 Thirdly, the effect of the 2004 Agreement, if made, was to convert Mr Ironside's equity in the Property into a debt, and to identify the means by which the amount of that debt would be determined. In my view, had that agreement been made, the parties would, in the short-term thereafter, have taken steps to perform the necessary accounting exercise to identify the amount of Mr Ironside's debt. In my view, the fact that from 2004 to 2009 no such steps were taken or requested by either party militates distinctly against acceptance that the 2004 Agreement was made. I reject Ms Thisainayagan's evidence that Mr Ironside did not want to be paid and that was why she did not do the necessary accounting.144
96 Fourthly, I found Mr Ironside's evidence in denying that the 2004 Agreement was made to be convincing.145
97 For these reasons, I find that the alleged 2004 Agreement was not made.
3.18 2004 to 2009
98 Ms Thisainayagan moved out of the Property and rented it to third parties from September 2004 until September 2005.146
99 Mr Ironside helped Ms Thisainayagan move back into the Property in September 2005.147 She stayed in the Property until December 2009.148
100 The parties remained close friends during the second half of the previous decade.149 When Mr Ironside went overseas, from time to time, Ms Thisainayagan moved into his house and looked after his children.150 In 2007, she became godmother to one of his children.151
101 I accept Mr Ironside's evidence that during this period, from time to time, Ms Thisainayagan expressed concern about her credit card debt, and that he did not pressure Ms Thisainayagan in relation to the payment of rent because she was struggling financially and emotionally.152 Further, he also had his own personal stresses and difficulties.153
102 In the course of such conversations, from time to time, Mr Ironside said that Ms Thisainayagan could stop paying rent into the Basic account until she had sorted out her credit card or sorted out her financial situation generally.154 On many of these occasions, he reminded Ms Thisainayagan that the Agreement covered any shortfall of rent so that it would be added to the Trust capital account, and she usually agreed that this was so.155
3.19 November 2009: unsuccessful attempts by Ms Thisainayagan to pay out Mr Ironside
103 By email of 8 November 2009 (sent at 11.07 pm), Ms Thisainayagan wrote to Mr Ironside regarding what was said to be 'payout to Noel - agreement of 25/2/2000 and subsequent amendment Nov 2003'.156 Ms Thisainayagan stated that 'as per our discussion this matter now needs to be resolved urgently' and that she needed to know the bank account details into which the money was to be transferred and the amount that Mr Ironside wished to be paid. The email also stated that the matter had to be finalised prior to 25 November 2009, when Ms Thisainayagan would be moving out of the Property.
104 The next day, Mr Ironside sent an email to Ms Thisainayagan157 asking why the matter needed to be resolved so urgently and had to be resolved before 25 November.
105 The parties met soon after this exchange. Ms Thisainayagan said that she wanted to settle finances between them. She asserted that an agreement had been made for her to pay out Mr Ironside's entitlements to the Property. Mr Ironside said that the debt for equity swap was just a proposal and had never been agreed.158
106 On 12 November 2009, the parties met with Mr Ironside's father at Mr Ironside's father's house.159 Ms Thisainayagan brought a two-page reconciliation document that she had prepared in order to show the amount of her debt to Mr Ironside.160 The document starts with what is said to be an agreed market value for the Property as at 1 November 2004 and then deducts:
(a) both parties' pre-Agreement contributions, in the amount set out in the Agreement;
(b) the amount of $72,155, said to be the Mt Hawthorn property settlement proceeds applied to Ms Thisainayagan's loan;
(c) unascertained amounts spent by Ms Thisainayagan on improvement and repairs;
(d) unascertained amounts of interest payments by Ms Thisainayagan;
(e) unascertained amounts of rates, taxes and building insurance paid by Ms Thisainayagan; and
(f) the bank loan balance of an unascertained amount;
so as to produce a net profit to be divided equally.
108 On 17 November 2009, Mr Ironside sent an email to Ms Thisainayagan. Among other things, the email stated that until the matter was settled between them, he requested an undertaking that she would not further encumber the Property or transfer the title to the Property.164
109 On 18 November 2009, Mr Ironside prepared and lodged a caveat over the Property claiming an interest under the Agreement.165
110 In December 2009, Ms Thisainayagan moved out of the Property. Since then, the Property has been rented out.166
3.20 Legal proceedings
111 In 2012, Ms Thisainayagan commenced an action in this court seeking orders that the Agreement was no longer on foot. Thereafter, Mr Ironside commenced proceedings in this court for orders extending the operation of the caveat he had lodged over the Property. Orders were made to that effect, conditional on the commencement by Mr Ironside of an action to assert his claim to an interest in the Property.
112 In 2013, Mr Ironside commenced this action. In the writ, indorsed with the statement of claim, he alleged that Ms Thisainayagan had breached the terms of the Agreement and sought orders for, among other things, sale of the Property and payment of the amount due to him under the Agreement.
113 I turn now to resolving the issues I set out in [10].
4. Was the Agreement void for uncertainty when it was made?
114 While they may overlap, it is necessary to distinguish between questions of:
(a) whether the parties had an intention to make a concluded bargain;
(b) vagueness, uncertainty or ambiguity of expression of the terms of an agreement; and
(c) incompleteness, in the sense of a failure to agree upon an essential term.167
115 It is clear that in signing the Agreement, witnessed by a justice of the peace, the parties intended to make a concluded bargain with contractual effect. In such circumstances, in determining whether a contract is void for uncertainty, the court will strive to give effect to the parties' agreement and will lean heavily against finding the contract void for uncertainty.168 This is especially so where the parties have acted on the agreement.169
116 The following statement by Sugerman J, approved by Menzies J in Thorby v Goldberg170 has been cited in many cases.171
It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention (607).
117 The omission of a term from a contract will not render the contract incomplete or uncertain unless the term is essential.172 In this context, 'essential' means a term without which the contract cannot be enforced.173
118 The fact that there is scope for considerable disagreement as to the meaning of a contract, or of a particular provision in a contract, does not in itself make the contract or the provision void for uncertainty. In a passage cited in many cases, in Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd,174 Barwick CJ explained the approach to be adopted:
But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction: and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. … So long as the language employed by the parties, to use Lord Wright's words in Scammell (G) & Nephew Ltd v Ouston is not 'so obscure and so incapable of any definite or precise meaning that the court is unable to attribute to the parties any particular contractual intention', the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.
119 It is only if the court is unable to put any definite meaning on the contract that it can be said to be uncertain. If the contract is irremediably obscure, the court cannot, in effect, make it for the parties.175 Thus, there are limits on how far the court can go to avoid a conclusion of uncertainty.
120 In determining whether parties who intended to make a concluded bargain reached agreement upon such terms as are, in the circumstances, legally necessary to constitute a contract, the court may have regard to implied terms, including implied terms of reasonableness.176
121 There are limits on the extent to which the court will imply terms to fill gaps in what the parties have dealt with in their agreement. There is authority that, in a contract for sale of land, price is an essential matter upon which the parties must agree, and if the contract is silent the court will not imply a term that the land is sold at a reasonable price.177
122 However, there are many cases in which a court has implied a term of reasonableness to fill a gap in what the parties have expressly dealt with.
123 Where a real estate agent was engaged without a term expressly dealing with remuneration, the court implied a term that the agent's commission would be paid as reasonable remuneration.178 Where no interest rate was specified in a bill of exchange, a term could be implied that interest was payable at a reasonable rate.179 Where a loan was made on terms that the loan carried interest, but there was no term as to the rate of interest, the court implied a term that interest was to be paid at a reasonable rate.180
124 Under the Agreement, the parties contemplated that their respective contributions would carry putative interest from the date of contribution to the time of realisation (whether by sale or by notional distribution). The Agreement is silent as to the rate of putative interest. In my view, a term can be implied that interest is to be paid at a reasonable rate. Such a term is necessary in order to make the contract work. In my view, it is reasonable and equitable, consistent with all of the express terms of the contract, and objectively obvious to the notional third party.181125 Ms Thisainayagan says that Mr Ironside gave evidence of a discussion between the parties before the Agreement was signed in which they discussed putative interest on the basis that it referred to cost of living indexation. She submits that, in light of this evidence, there is no room for an implied term that interest is payable at a reasonable rate.182
126 I do not accept that submission. First, the effect of Mr Ironside's evidence is not that the parties discussed putative interest as being equivalent to cost of living indexation. His evidence is that, at a meeting with his father, the parties used the term 'indexation' to refer to an accounting concept they had discussed that would give their earlier financial contributions under the Agreement greater imputed value.183 Secondly, the evidence as a whole does not reveal a consensus between the parties, at any time prior to the signing of the Agreement, as to the rate of putative interest. Thirdly, in any event, the discussion between the parties relied upon by Ms Thisainayagan is not part of the Agreement, which was evidently intended to constitute the contract between them. There is nothing to suggest that the parties objectively intended that their contract would be partly in writing and partly oral.
127 Mr Ironside submits that in or about November 2003, and thus well after entering into the Agreement, the parties agreed that putative interest would be 5.5% per annum.184 That agreement is said to be implied from the fact that Ms Thisainayagan used 5.5% for the Yilgarn Street Property and Mr Ironside did not object to that rate.
128 I do not accept this submission. No such claim is pleaded, and when that position was taken, no amendment application was made. Further, and in any event, I am not satisfied that the parties' discussions as to the Yilgarn Street Property sustain the implication that they intended to bind themselves in respect of the rate for putative interest under the Agreement.
129 Ms Thisainayagan appeared also to submit that the reference to 'outgoings relative to the premises' in cl 1(b)(ii) was so unclear in its operation, including as to whether it encompassed payments of interest and capital on the mortgage loan, as to render the term and thereby the Agreement void for uncertainty.185 There is no merit in that submission. The court will resolve any difficulties of construction in determining the meaning of a term.186
130 Ms Thisainayagan further submits that cl 4(b) of the Agreement is uncertain because the giving of a notice requiring payment of monies due 'with immediate effect' does not allow for the sale process referred to in cl 5 for ascertaining the amount to be paid to Mr Ironside.187 There is no merit in that submission. At best it raises a question of construction. The existence of a question of construction is not a basis on which to find an agreement void for uncertainty. I construe cl 4(b) and cl 5 to mean that when notice is given under cl 4(b), the Property is to be sold without delay, following which the amount due to Mr Ironside is to be assessed and then immediately paid.
5. Does the Agreement give Mr Ironside an interest in the Property?
131 Mr Ironside seeks a declaration that he has a caveatable interest in the Property. By its nature, a caveatable interest must be a proprietary interest in land.188
132 A purchaser under a contract of sale has an equitable interest in the land commensurate with his or her entitlement to specific performance.189
133 As McLure P explained in Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd,190 there is a divergence in the authorities as to whether this principle encompasses the wider sense of specific performance explained by Sir Frederick Jordan in his well-known footnote.191 The question is whether the right of a purchaser under a conditional contract to an injunction pending fulfilment of the condition gives the purchaser an interest in the land. McLure P adopted the view of Windeyer J in Brown v Heffer192 that the answer is no. In Hancock Prospecting, the question arose in the context of determining the proper construction of a clause in an agreement providing the parties with an option to require the transfer of certain assets. The transfer of some of those assets required, under statutory provisions, consent of a minister or other party. The answer to the question may well depend upon the context in which it is asked. There is authority in this state, and in other states, that a purchaser under a conditional contract has a caveatable interest prior to fulfilment of the condition.193 It is not necessary to decide in this case whether in such circumstances a purchaser has a caveatable interest.
134 In this case, in my opinion, the rights of Mr Ironside under the Agreement (to which I will shortly come in detail) are specifically enforceable against the Property by, among other things, an order for sale of the Property and orders as to the distribution of the proceeds of sale, and give Mr Ironside a caveatable interest in the Property.
135 In my opinion, on a proper construction of the Agreement, Mr Ironside is an equitable co-owner of the Property, with the extent of his interest to be determined under cl 7. In my view, a number of elements of the Agreement, taken together, support that conclusion.
136 First, recital (a) states that the parties jointly caused the Property to be acquired in the name of Ms Thisainayagan. In recital (c), Ms Thisainayagan acknowledges that Mr Ironside subscribed $67,221 towards monies invested in the acquisition, repair and renovation of the Property.
137 Secondly, recital (d) states that by the Agreement the parties wish to record the terms agreed between them and to provide for the management of 'their investment'.
138 Thirdly, by cl 2, Ms Thisainayagan was prohibited from selling, mortgaging or otherwise encumbering the Property without Mr Ironside's prior written agreement.
139 Fourthly, by cl 4 and cl 5, Mr Ironside was entitled to give notice requiring payment within three months of all monies owing to him. As a result of this notice the Property would be sold on the open market, unless in the meantime the parties agreed on a different manner of determining the value of the Property. Unless the parties so agreed, Mr Ironside would be entitled to payment of monies due to him from the proceeds of sale. Further, by those clauses, in the event of a breach by Ms Thisainayagan, Mr Ironside was entitled to give notice requiring immediate sale of the Property and payment of the money due to him under cl 7 from the proceeds of the sale.
140 Fifthly, by cl 6, Mr Ironside is entitled to lodge a caveat on the title to the Property.
141 Finally, upon sale of the Property, Mr Ironside is entitled to payment of his various entitlements under cl 7(i), cl 7(ii) and cl 7(iii).
142 The effect of the Agreement is that Mr Ironside and Ms Thisainayagan have a beneficial interest in the Property of the same character: to have their respective capital contributions, with putative interest, repaid; to have their payments in respect of outgoings repaid; and to share equally in the net profit after sale. Their rights differ in relation to sale of the Property: while Mr Ironside has the rights under cl 4 and cl 5 to require a sale that I have outlined, Ms Thisainayagan is free to sell the Property at any time of her choosing.
143 In support of her contention that the Agreement does not give rise to any interest in the Property on the part of Mr Ironside, Ms Thisainayagan made reference to various passages in the speech of Lord Bridge in Lloyd's Bank Plc v Rosset.194 That case is concerned with common intention constructive trusts. While in that regard it is of valuable assistance, nothing said in that case assists in determining the different question that arises in this case; namely whether, when regard is had to the Agreement as a whole, it gives rise to a beneficial interest in the Property on the part of Mr Ironside. For the reasons I have given, I have found that it does.
6. Was the Agreement varied to include Mr Ironside's entitlements in respect of the Yilgarn Street Property?
144 I have found, in section 3.15 of these reasons, that in about December 2003 or early 2004, Mr Ironside and Ms Thisainayagan agreed that Mr Ironside's entitlements in respect of the Yilgarn Street Property would not then be paid to him, but instead would be treated as a capital contribution by him under the Agreement.
7. The parties' discussions as to rent under the Agreement and the effect of those discussions
145 I have found, contrary to Ms Thisainayagan's evidence, that Mr Ironside did not say in November 2003, or at any time, that Ms Thisainayagan need not continue to pay rent in respect of the Property from November 2003 on.195 Thus, I reject Ms Thisainayagan's claim that the Agreement was varied in that respect, or that any estoppel or waiver arose.
146 Under cl 3 of the Agreement, where Ms Thisainayagan occupies the Property, half of the market rent is to be credited to Mr Ironside as occupation rent with a minimum payment of $100, or a greater amount as agreed between the parties, to be paid to Mr Ironside. The difference between the minimum payment and Mr Ironside's half share of the rent is to be accounted for as a further subscription to capital by Mr Ironside. Arguably at least, on a proper construction of cl 3(ii), if and to the extent that Ms Thisainayagan failed to make the minimum payment of $100 or any higher amount agreed between the parties, that part of Mr Ironside's share of the market rent would also accrue as a subscription to capital by him. However, that is not the basis on which Mr Ironside's case was presented, so nothing more need be said in that respect.
147 Mr Ironside claims196 that:
(a) from time to time from 2000 to 2006, Ms Thisainayagan told him she was having difficulty meeting her other financial commitments and was unable to set aside money for the payment of rent;
(b) in response, Mr Ironside advised that any shortfall in rental payments could be considered to be a capital contribution that he understood was provided for in the Agreement, a position which she acknowledged;
(c) Mr Ironside relied on that acknowledgment and did not press for payment of rental income collected or for payment of any occupation rent;
(d) consequently, Ms Thisainayagan is estopped from denying that unpaid rental income or unpaid occupation rent should be treated as a capital contribution by Mr Ironside.
148 I apply the outline of principles relating to equitable estoppel in Merilla Pty Ltd v Commonwealth of Australia.197
149 Ms Thisainayagan makes two submissions in response to Mr Ironside's estoppel case.
150 First, she submits, correctly, that while Mr Ironside's statement refers to:
(a) him saying to Ms Thisainayagan that she need not set aside money for rent while she sorted out her financial problems;198 and
(b) him also saying to Ms Thisainayagan that any amount not paid for rent would be added to his capital account and sorted out later;199
his evidence in cross-examination200 encompassed (a), but did not mention (b).201
151 Nevertheless, I am satisfied by the evidence as a whole that Mr Ironside had conversations with Ms Thisainayagan in which he said that any shortfall in what was set aside for rent would be dealt with as a capital subscription under the Agreement. Both parties gave evidence, and I have found, that soon after the Agreement was entered into, when Ms Thisainayagan said she could not afford to pay rent at the market rate, Mr Ironside said she could pay the $100 required by the Agreement and the shortfall would accrue as capital under the Agreement, and that she agreed with that.202 Further, Ms Thisainayagan agreed in cross-examination that in the period before (on her evidence) payment of rent was to stop, the arrangement between the parties was that any shortfall in the amount set aside for rent for Mr Ironside would be added to his capital account.203 In light of my finding that there was no discussion in or about November 2003 that rent was to stop, I find that this was the effect of the discussions between Mr Ironside and Ms Thisainayagan throughout the period from 2000 to about 2006.
152 For these reasons I find that:
(1) from 2000 on, Mr Ironside understood or assumed that any shortfall in amounts set aside as rent would be treated as capital contributions by him under the Agreement; and
(2) Ms Thisainayagan contributed to or encouraged the adoption of that understanding or assumption in that, from time to time when Mr Ironside articulated it, she agreed with it, or said nothing to disagree.
153 Secondly, Ms Thisainayagan submits that Mr Ironside has not established reliance.204 She says that, in both his first witness statement and his evidence in cross-examination, Mr Ironside said that the reasons he did not press Ms Thisainayagan about paying money into the Basic account for rent were:
(a) that he knew she was under significant stress and was on antidepressants;205 and
(b) he had his own difficulties and stresses.206
154 Ms Thisainayagan submits that Mr Ironside has not given any evidence that he relied on any assurance from her that unpaid amounts of rent would be treated as contributions to capital by him under the Agreement.
155 Contrary to Ms Thisainayagan's submission, I think Mr Ironside gave express evidence of reliance. Mr Ironside's evidence as to (a) above in his first witness statement begins with the words 'I also did not press [Ms Thisainayagan] because ...'.207 The reference to 'pressing' is to pressing for rent.208 I take the 'also' to mean that the conversations that Mr Ironside deposes to in the preceding paragraphs of his statement, in which Ms Thisainayagan acknowledged or did not dispute that the Agreement covered any rental shortfall, were themselves a reason that he did not press her for rent.
156 In any event, while the onus of proof of reliance is on the party who claims the benefit of an estoppel, reliance can be proved by inference.209 In some situations, the objective probabilities are a more reliable guide to the question of reliance than an express statement by a party as to what is necessarily a past hypothetical question. Putting aside the point in the preceding paragraph, I take the effect of Mr Ironside's evidence as a whole to be that, for the reasons he gave in (a) and (b) above, he was content not to press Ms Thisainayagan to set aside money for rent in circumstances where his understanding, encouraged by what Ms Thisainayagan said or did not say, was that in the end all unpaid rent would be treated as a capital contribution by him under the Agreement. Had he not had that understanding, I find that he would not have been so accommodating.
157 In my view, on the findings I have made, the other elements of the estoppel claim by Mr Ironside are also established.
158 For these reasons, I would uphold Mr Ironside's claim to an estoppel in this respect. Ms Thisainayagan is estopped from denying that all and any unpaid rental income or unpaid occupation rent is to be treated as capital contribution by Mr Ironside.
8. Was the 2004 Agreement made?
159 In section3.17 of these reasons, I rejected Ms Thisainayagan's evidence that the 2004 Agreement was made, and found that no such agreement was made.
9. Did Ms Thisainayagan breach the Agreement in the respects alleged by Mr Ironside?
160 The question is whether, at the time Mr Ironside commenced this action, Ms Thisainayagan was in breach of the Agreement. Mr Ironside says that she was, with the result that he is entitled to an order for sale of the Property.
161 Mr Ironside pleads that Ms Thisainayagan breached the Agreement in two respects:
(1) she breached her obligations in respect of rent under cl 3; and
(2) in commencing an action in 2012 seeking orders that the Agreement was no longer on foot, she repudiated the Agreement and, for the purposes of cl 4, breached all of its terms.
162 For the reasons that follow, I find that when this action was commenced, Ms Thisainayagan was in breach of her obligations in relation to rent under cl 3. It is not necessary to deal with the second alleged breach.
163 It is clear, and not in dispute, that Ms Thisainayagan did not comply with her obligations as set out in cl 3 of the Agreement. She did not pay $100, or any other minimum payment, to Mr Ironside in relation to the periods that she occupied the Property. Nor did she pay to Mr Ironside his half share of the rent received while the Property was leased to a third party.
164 As I have explained, Ms Thisainayagan's case is that in about November 2003, Mr Ironside said that she need not pay any further rent. She says that as a result the Agreement was varied, or that an estoppel or waiver arises in her favour. In section3.16 of these reasons, I rejected that evidence of Ms Thisainayagan, and found that Mr Ironside did not say anything to the effect alleged by her.
165 Consequently, Ms Thisainayagan's pleaded defences to the claim of breach in respect of rent fail.
166 In closing submissions, Ms Thisainayagan argued that, even on Mr Ironside's evidence, she was not in breach of cl 3 because the effect of what Mr Ironside said was that she need not worry about paying rent because he would get unpaid rent credited to his capital account later.210
167 I do not accept this submission. I think it overstates the effect of Mr Ironside's evidence. On Mr Ironside's evidence, the effect of what he told Ms Thisainayagan was not that she need not worry, at any time or at all, about paying any rent into the Basic account. Rather, from time to time, when her financial circumstances made it difficult for her to pay rent, he indicated that she could focus on improving her financial circumstances and need not pay money on account of rent into the Basic account.211
168 Moreover, given the absence of consideration for Mr Ironside's dispensation of Ms Thisainayagan from the strict terms of the Agreement, anything said in that respect by Mr Ironside takes legal effect only to the extent that it gives rise to an estoppel or waiver. On Mr Ironside's evidence, and on the findings of fact I have made, nothing said or done by Mr Ironside gives rise to any estoppel or waiver in respect of payment of rent by Ms Thisainayagan in the years 2007 and 2008.
169 For these reasons, I find that when Mr Ironside commenced this action in early 2013, Ms Thisainayagan was in breach of her obligations under cl 3 of the Agreement.
10. Did Mr Ironside give such notice as is required under the Agreement?
170 Mr Ironside seeks an order for sale of the Property. He submits that he is not obliged to give any notice under the Agreement.212 I do not accept that submission. In my view, Mr Ironside does not have a right to an order for sale of the Property independent of the provisions in the Agreement providing for its sale. In this respect, Mr Ironside's rights are relevantly contained in cl 4 and cl 5. The effect of those clauses is that Mr Ironside is entitled to require a sale of the Property, and thus to an order for its sale, if and only if:
(a) he has given notice in writing under cl 4(a) requiring payment three months later of all monies owing to him, and the parties do not in the meantime agree a manner of establishing the value of the Property other than sale on the open market; or
(b) Ms Thisainayagan is in breach of the Agreement, and Mr Ironside gives notice in writing under cl 4(b) requiring payment of all monies owing to him or becoming payable to him under the Agreement.
171 For the reasons that follow, I find that Mr Ironside is entitled to an order for sale under cl 4(b) of the Agreement.
172 I have found that, as at early 2013, when this action was commenced, Ms Thisainayagan was in breach of cl 3 of the Agreement.
173 Prior to commencing the proceedings, Mr Ironside did not give any notice under cl 4.
174 The statement of claim indorsed upon the writ asserted that Ms Thisainayagan had breached the Agreement in several respects. It also claimed, among other things, an order for the sale of the Property, an account of the parties' contributions and an order for payment to Mr Ironside of his share of the proceeds of sale of the Property.
175 In my view, the writ constituted notice in writing by Mr Ironside to Ms Thisainayagan under and for the purposes of cl 4(b) of the Agreement. The writ asserted, as (on my findings) was the fact, that Ms Thisainayagan was in breach of the Agreement and sought an order for sale of the Property and demanded monies that would be owing to Mr Ironside upon that sale. That is the whole of the substance of a notice under cl 4(b).
176 It is true, as Ms Thisainayagan submits,213 that the writ does not employ the language of a notice and does not identify that it is a notice under cl 4(b). I do not consider that either of these features is essential to the satisfaction of cl 4(b). Whether a document constitutes effective notice under cl 4(b) turns upon the substance of the document. For the reasons I have given, I am satisfied that the writ contains all of what is required to be conveyed by notice under cl 4(b), and constitutes effective notice under cl 4(b).
11. Was the Agreement abandoned or terminated by consent? Or is Mr Ironside estopped from enforcing the Agreement?
177 In closing submissions, counsel for Ms Thisainayagan did not address her pleaded defence that the Agreement was abandoned or terminated by consent. On the factual findings I have made, there is no basis to suggest that the Agreement was abandoned or terminated by consent. Similarly, the plea of estoppel, based on the same allegations of fact,214 also fails on the findings I have made.
12. Does Mr Ironside's failure to pursue his claim under the Agreement between 2004 and 2009 mean that he is precluded from enforcing the Agreement by reason of estoppel or laches?
178 Ms Thisainayagan pleads that in light of Mr Ironside's failure to take steps to pursue his claimed interest in the Property from 2004 to 2009 relief should be refused on the ground of laches.215
179 Again, in closing submissions, counsel for Ms Thisainayagan did not address this question.
180 The principles applicable to the doctrine of laches were outlined by Murphy JA in Streeter v Western Areas Exploration Pty Ltd (No 2).216 The doctrine encompasses two themes: first, acquiescence and assent; secondly, delay involving prejudicial change of circumstances.217
181 On the factual findings I have made, the position between the parties in the period from 2004 to the end of October 2009 was that:
(a) the Agreement remained on foot, and Mr Ironside had no reason to think that Ms Thisainayagan thought otherwise;
(b) the position as to rent was as reflected in my findings in sections 3.18 and 7 of these reasons.
182 These circumstances did not call for Mr Ironside to take steps to enforce his claim to an interest under the Agreement. Under the Agreement, he was entitled to receive payments when the Property was sold, and to await a sale by Ms Thisainayagan, unless he chose, in the meantime, to exercise his rights to give notice under cl 4.
183 On the findings I have made, there seems to me to be no basis to deny relief to Mr Ironside on the ground of laches arising from his conduct in the period 2004 to 2009.
13. Summary of conclusions
184 The conclusions I have reached may be summarised as follows:
(1) The Agreement is not void for uncertainty.
(2) In late 2003 or in early 2004, the parties agreed that Mr Ironside's entitlements in relation to the Yilgarn Street Property would be treated as capital subscriptions by him under the Agreement.
(3) The alleged 2004 agreement was not made, and the Agreement remains on foot.
(4) The Agreement was not varied in late 2003 in a way that meant rent was no longer payable by Ms Thisainayagan.
(5) Mr Ironside's unpaid entitlements in relation to rent are to be treated as capital contributions by him under the Agreement.
(6) By the writ in this action, Mr Ironside gave effective notice under cl 4(b) of the Agreement, with the result that Mr Ironside is entitled to an order for sale of the Property.
(7) No estoppel or laches precludes the grant of relief in favour of Mr Ironside.
14. Miscellaneous questions for the taking of the account
185 As I have mentioned, the subject matter of the trial did not include Mr Ironside's claim for an account. The intention is that, following the delivery of these reasons, the parties will brief their respective experts in order to prepare an account. There is room for hoping that the matter can thereby be resolved without the need for further judicial determination.
186 To that end, at the commencement of the trial Mr Ironside produced a list of questions for determination by the court to assist in the taking of the account. Ms Thisainayagan was content for all but one of those questions, namely question 5, to be dealt with at the trial.218 Mr Ironside did not press for question 5 to be determined.
187 I deal with the questions for determination for the purpose of taking the account as follows:
(1) The amount of the capital contributions made by Mr Ironside to the Property between July 1998 and June 2000 is, in accordance with the findings I have already made, as set out in items 1 - 5 of the plaintiff's aide memoir of his contributions.
(2) The sum raised by mortgage for the purchase of the Property is not a capital subscription by Ms Thisainayagan. Ms Thisainayagan submits that it should be treated as one because the mortgage was undertaken by her alone, and if the loan secured by it is not treated as a capital subscription she may not be able to recover it under cl 7(ii) of the Agreement.219 I do not accept that submission. Ms Thisainayagan applied the loan secured by the mortgage to the purchase of the Property some 19 months before the parties signed the Agreement. In those circumstances, if the parties had intended the loan to be treated as a capital contribution by Ms Thisainayagan they would have recorded it as one in the Agreement. They did not do so. However, as is common cause between the parties,220 Ms Thisainayagan's repayments of the borrowed sum, as to both principal and interest, are to be treated as capital contributions by her.
(3) It is common cause that the amount claimed by Ms Thisainayagan by way of her capital subscription for her expenditure is reduced by the amount contributed by Mr Ironside by way of capital subscription, including any unpaid rental, so that it is only her expenditure in excess of what she received from Mr Ironside that counts as a contribution by her.
(4) As is common cause, Ms Thisainayagan's capital subscriptions for interest and capital repayments on the mortgage between August 1998 and February 2000 are as set out in par 32 of Ms Thisainayagan's further submissions.
(5) (Not to be answered).
(6) The applicable rate for putative interest is a reasonable rate of interest. What is a reasonable rate is to be determined on evidence, if not agreed.
(7) As I have said, any unpaid rent for the Property is to be treated as a capital contribution by Mr Ironside.
(8) Question 8 relates to the period in which rent for the Property was unpaid and Ms Thisainayagan was in occupation, and the value of the rent during the period in which she was in occupation.
The schedules provided by the parties in this respect went further than question 8 in that they also dealt with the periods in which the Property was leased to third parties. The further submissions filed by the parties (by leave) after the trial was concluded reveal issues that make it inappropriate to determine the questions relating to the period when the Property was leased without hearing further from the parties. That is because, among other things, there are issues as to the proper construction of cl 3(i) on which submissions should be made.
There is no impediment to answering question 8 in its terms, relating to the period in which Ms Thisainayagan occupied the Property. In that respect, I would answer the question in the manner set out in items 1 - 3, 5 - 9 and 12 of the plaintiff's amended rent aide memoire.
Ms Thisainayagan accepts the quantification of market rent adopted by Mr Ironside. Ms Thisainayagan's further submissions and rent schedule raise three issues with Mr Ironside's rent aide memoire. First, Ms Thisainayagan's schedule applies cl 3(ii) in its terms, so that only the difference between market rent and the amount to be paid by Ms Thisainayagan is credited to Mr Ironside's capital account. However, I have found, in section 7 of these reasons, that Ms Thisainayagan is estopped from denying that all and any rental income or unpaid occupation rent is to be treated as a capital contribution by Mr Ironside.
Secondly, Ms Thisainayagan's schedule credits all deposits she made into the Basic account as amounts paid to Mr Ironside. I have rejected Ms Thisainayagan's evidence in that respect, and found that Mr Ironside did not have or exercise access to the Basic account.221
Thirdly, Ms Thisainayagan's schedule asserts that for two periods, one from 13 October 2000 to 17 April 2001 and the other from 11 September 2004 to 17 September 2006, the Property was vacant. Ms Thisainayagan did not give or adduce any evidence to that effect. I have found that Ms Thisainayagan was in occupation of the Property until she rented it out in September 2004.
(9) I have found that Mr Ironside's contributions to the Yilgarn Street Property by way of cash, purchase of materials and labour are to be treated as a capital contributions by him under the Agreement.
(10) The contributions made by Ms Thisainayagan under the Agreement after November 2003 are to be reduced by the amount of Mr Ironside's contributions to the Yilgarn Street Property as referred to in point (9), in the same way as occurs in relation to point (3).
15. Conclusion
188 For the reasons I have given, I would make the declaration sought by Mr Ironside, and would make an order for the sale of the Property.
189 I would hear from the parties as to the precise terms of the orders to be made, and as to costs.
1 Statement of claim (SC) [3], [6], [15].
2 SC [7] - [9].
3 SC [11] - [14].
4 SC [16].
5 SC [17] - [18].
6 Defence (D) [7].
7 D [13] - [17].
8 D [13] - [25].
9 D [37] - [38].
10 D [39A].
11 D [43] - [53].
12 Namely that there was no consideration for the Agreement, that claims for breaches of the Agreement were statute-barred; and a claim that when the Agreement was signed Ms Thisainayagan was under a special disability which Mr Ironside unconscionably exploited (ts 305 - 306).
13Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (Unreported, FCA, 29 June 1995) [412], cited with approval in Fazio v Fazio [2012] WASCA 72 [43].
14Watson v Foxman (1995) 49 NSWLR 315, 319.
15 Exhibit A19.
16 Exhibit A39.
17 Exhibit C1 [2], exhibit A2, page 8.
18 Exhibit A2, page 8.
19 Exhibit C1 [4(b)].
20 Exhibit C1 [5] - [6], exhibit 1A [1], exhibit 1B [1].
21 Exhibit C1 [8], exhibit 1A [8].
22 Exhibit 1A [27].
23 Exhibit 1A [28].
24 Exhibit 1A [30], [32].
25 Exhibit 1A [41] - [46].
26 See Exhibit 1A [50] - [52].
27 Exhibit 1A [53].
28 Exhibit 1A [54].
29 Exhibit 1A [56].
30 Exhibit C1 [205(a)].
31 Exhibit A5.
32 Exhibit C1 [13].
33 Exhibit C1 [16].
34 Exhibit C1 [23] - [27].
35 Exhibit C1 [29].
36 Exhibit C1 [30].
37 Exhibit C1 [31].
38 Exhibit C1 [32].
39 Exhibit 1A [66]; ts 173 - 174.
40 Exhibit 1B [10]; ts 174.
41 Exhibit 1B [13] - [14].
42 Exhibit A19.
43 Exhibit A7.
44 Exhibit A9, exhibit A11.
45 Exhibit A17, exhibit A18.
46 Exhibit A11A, exhibit A11B, exhibit A18.
47 Exhibit A16.
48 Exhibit 1A [67].
49 Exhibit 1A [72].
50 Exhibit 1B [15] - [16].
51 ts 174.
52 ts 190.
53 ts 190.
54 ts 191.
55 ts 191.
56 Exhibit A97, page 648.
57 Exhibit A97, pages 645, 649.
58 Exhibit C1 [40] - [41], [44], exhibit A19, exhibit A39.
59 ts 176, 178, 182, 184, 191.
60 Exhibit A19.
61 ts 177, 183, 191.
62 ts 177.
63 ts 183.
64 See ts 183.
65 ts 176, 178, 191.
66 ts 177 - 178; see also ts 183.
67 Exhibit A39.
68 Exhibit C2 [8(b)], exhibit 1A [90], exhibit A22.
69 Exhibit C2 [8(c)], exhibit 1A [91], exhibit A33, exhibit A32.
70 Exhibit C2 [8(d), (e)], exhibit A46, exhibit A47.
71 Exhibit C1 [78].
72 Defendant's further submissions dated 27 May 2016 [32]; plaintiff's submissions in reply dated 30 May 2016 [18].
73 Exhibit A1 [18] - [19], exhibit A20.
74 Exhibit C1 [54] - [55].
75 Exhibit C1 [56] - [73].
76 Exhibit C1 [62].
77 Exhibit C1 [89], [108], exhibit 1A [120].
78 Exhibit C1 [92], exhibit 1A [107].
79 See ts 51.
80 Exhibit 1A [112].
81 Exhibit A91.
82 Exhibit C1 [93].
83 Exhibit C1 [94].
84 Exhibit C1 [95] - [98].
85 Exhibit A31.
86 Exhibit A39.
87 Exhibit 1A [131].
88 ts 185, 194, 195.
89 ts 194.
90 See exhibit 1A [33] - [34].
91 Exhibit 1A [134] - [135].
92 Exhibit 1A [138] - [144], exhibit 1B [30] - [34].
93 ts 201.
94 Exhibit 1A [138], exhibit 1B [31], exhibit 1A [143].
95 Exhibit 1A [168]; ts 250.
96 Exhibit C1 [108], exhibit 1A [120].
97 Exhibit C1 [118]; ts 210.
98 Exhibit A40, pages 251, 253; ts 210.
99 Exhibit C1 [119], exhibit 1B [39]; ts 210.
100 Exhibit C1 [119].
101 Exhibit A40.
102 Exhibit D2 [40] - [42].
103 Exhibit C2 [6]; ts 160.
104 See exhibit A72, pages 498 - 499; ts 339 - 340.
105 Exhibit C1 [136], exhibit 1B [53].
106 Exhibit C1 [130] - [133], exhibit 1A [189] - [200].
107 Exhibit C1 [137] - [141].
108 Exhibit C1 [142] - [143], exhibit A66.
109 Exhibit C1 [145], exhibit A65.
110 Exhibit C1 [151].
111 Exhibit C1 [149].
112 Exhibit C1 [147], exhibits A63, A64, A67.
113 Exhibit 1B [58].
114 Exhibit A72, page 499.
115 Exhibit C1 [172] - [173], exhibit A72.
116 Exhibit C1 [179], exhibit 1B [65].
117 Exhibit 1B [65].
118 Exhibit C1 [181] - [183]; ts 89 - 90, 92, 101 - 102.
119 ts 271 - 272.
120 ts 102 - 103.
121 ts 101.
122 Exhibit 1B [69]; ts 242.
123 Exhibit 1A [202]; ts 242.
124 Exhibit 1B [68].
125 ts 96.
126 Exhibit A70.
127 ts 274.
128 Exhibit 1A [204] - [208].
129 ts 235 - 236.
130 Exhibit 1A [209] - [210]; ts 89.
131 ts 273 - 274.
132 Exhibit 1A [209]; ts 216, 249.
133 Exhibit 1A [159], [214].
134 Exhibit C1 [184] - [185].
135 Exhibit A69.
136 ts 123, 138.
137 Exhibit A40.
138 ts 216, 244.
139 Exhibit 1A [224] - [225].
140 Exhibit 1A [226].
141 Exhibit 1A [224(iii)].
142 Exhibit A73.
143 ts 252 - 253.
144 ts 255 - 256.
145 ts 141 - 145.
146 Exhibit C1 [187], exhibit 1A [227] - [228], exhibit A74, exhibit A75.
147 Exhibit C1 [191].
148 Exhibit C1 [191].
149 Exhibit C1 [192], [207], exhibit 1A [240] - [249].
150 Exhibit 1A [242] - [243].
151 Exhibit 1A [247], exhibit C1 [207].
152 Exhibit C1 [191], [201], [203] - [204].
153 Exhibit C1 [205].
154 Exhibit C1 [199]; ts 123, ts 129 - 130.
155 Exhibit C1 [200].
156 Exhibit A85.
157 Exhibit A38.
158 Exhibit C1 [223].
159 Exhibit C1 [226], exhibit 1A [262].
160 Exhibit C1 [228], exhibit 1A [264] - [266], exhibit A91.
161 Exhibit A89, exhibit A90.
162 ts 138.
163 Exhibit C1 [234] - [235], exhibit A90; ts 139.
164 Exhibit A92.
165 Exhibit A93, exhibit A94.
166 Exhibit 1 [191], exhibit 1A [234].
167Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 548; Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101 [23], [117]; Uranium Equities Ltd v Fewster [2008] WASCA 33; (2008) 36 WAR 97 [127]; Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 [96].
168Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429, 436 - 437; Anaconda [33].
169Sinclair v Schildt (1914) 16 WALR 100, 106, 110; York Air Conditioning and Refrigeration (A/sia) Pty Ltd v The Commonwealth (1949) 80 CLR 11, 53; Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32, 70 - 71; Twigg v Kung (1994) 121 FLR 227, 231.
170Thorby v Goldberg [1964] HCA 41; (1964) 112 CLR 597.
171 For example, Anaconda [28]; Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 [139].
172Anaconda [29]; Australian Goldfields [140].
173Anaconda [29]; Australian Goldfields [140].
174Upper Hunter (436 - 437).
175Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130, 135; Robertson v Unique Lifestyle Investments Pty Ltd [2007] VSCA 29 [38].
176Fitzgerald v Masters (1956) 95 CLR 420, 427 - 428; ABC v XIVth Commonwealth Games (548); Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd [1995] NSWCA 166; (1995) 7 BPR 14,551, 14,561 - 14,562; Vroon v Foster's Brewing (68 - 70); Weiss v Barker Gosling (1993) 114 FLR 223, 246 - 247; Twigg v Kung (231); Anaconda [72] - [73].
177Hall v Busst [1960] HCA 84; (1960) 104 CLR 206, 216 - 217, 222, 235.
178LJ Hooker Ltd v WJ Adams Estates Pty Ltd [1977] HCA 13; (1977) 138 CLR 52, 73 - 75.
179Rosenhain v Commonwealth Bank of Australia [1922] HCA 41; (1922) 31 CLR 46, 51.
180Trad Financial Services Pty Ltd v Trad [2013] NSWSC 1691 [83].
181Codelfa Construction Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337, 347.
182 Defendant's further submissions [14], [16] - [17].
183 Exhibit C1 [98].
184 ts 313.
185 ts 301 - 302.
186 See Upper Hunter (436 - 437); Anaconda [30] - [32].
187 ts 286 - 287.
188Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50.
189Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315 [53]; Halloran v Minister Administering National Parks and Wildlife Act 1974 [2006] HCA 3; (2006) 229 CLR 545[72]; Black v Garnock [2007] HCA 31; (2007) 230 CLR 438 [32], [106]; Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211; (2014) 48 WAR 300 [213]; Nelson v Moorcraft [2014] WASCA 212 [206].
190Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 [166] - [175].
191 Ch V of Chapters on Equity in New South Wales, 1947.
192Brown v Heffer [1967] HCA 40; (1967) 116 CLR 344, 351 - 352; see also Commissioner of State Revenue v Abbotts Exploration [138].
193Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419, 429 - 432. Some of the other authorities are collected by Murphy JA in Commissioner of State Revenue v Abbotts Exploration [217].
194Lloyd's Bank Plc v Rosset [1991] 1 AC 107, 130 - 132; ts 290 - 294.
195 Section 3.16 of these reasons.
196 SC [17] - [18].
197Merilla Pty Ltd v Commonwealth of Australia [2015] WASC 309 [199] - [209].
198 Exhibit C1 [199].
199 Exhibit C1 [200].
200 ts 133.
201 ts 284 - 285, 304.
202 Exhibit C1 [119], exhibit 1A [162] - [164].
203 ts 227, 243.
204 ts 302 - 304.
205 Exhibit C1 [203] - [204]; ts 134.
206 Exhibit C1 [205]; ts 134.
207 Exhibit C1 [203].
208 See exhibit C1 [205].
209Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 [51] - [57]; Government Employees Superannuation Board v Martin (1997) 19 WAR 224, 246.
210 ts 283 - 286.
211 Exhibit C1 [199] - [200]; ts 123, 129 - 130, 132.
212 ts 333 - 335.
213 ts 281.
214 D[18], referring to D[13] - [16].
215 D[22] - [25].
216Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17 [632] - [639].
217Streeter (No 2) [635].
218 ts 82.
219 Defendant's further submissions [26], [29].
220 ts 318.
221 Section 3.13 of these reasons.
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