Marguerita Strauss v Ian Bennett - [2016] NSWSC 262

Supreme Court

New South Wales

Medium Neutral Citation: Marguerita Strauss v Ian Bennett [2016] NSWSC 262
Hearing dates: 8, 9, 10 February 2016
Date of orders: 17 March 2016
Decision date: 17 March 2016
Jurisdiction: Equity
Before: Darke J
Decision:
Plaintiff entitled to order for possession and damages. Cross-claimant’s equitable and contractual claims dismissed. Cross-claimant entitled to restitution of money paid in pursuance of alleged agreement.

Catchwords:
PRINCIPAL AND AGENT – ratification – whether agreement purportedly made by agent on behalf of principal – whether ratifying principal aware of all material circumstances of agent’s actions
EQUITY – trusts and trustees – constructive trusts – contributions to property – whether contributions made as part of joint endeavour – whether contributions made on basis of an expectation created, encouraged or acquiesced in by owner that contributor owned or would come to own property
Legislation Cited: Conveyancing Act 1919 (NSW), s 54A(1)
Limitation Act 1969 (NSW), ss 14, 27(2)
Cases Cited: Baumgartner v Baumgartner (1987) 164 CLR 137
Howard Smith and Co Limited v Varawa (1907) 5 CLR 68
Keighley, Maxstead and Co v Durant [1901] AC 240
Khoury and anor v Khouri [2006] NSWCA 184; (2006) 66 NSWLR 241
Taylor v Smith (1926) 38 CLR 48
Texts Cited: J W Carter, Contract Law in Australia (6th ed 2013, LexisNexis Butterworths)
G E Dal Pont, Law of Agency (3rd ed 2013, LexisNexis Butterworths)
S J Stoljar, The Law of Quasi-Contract (2nd ed 1989, Law Book Company)
P Watts and F M B Reynolds, Bowstead and Reynolds on Agency (20th ed 2014, Sweet & Maxwell)
Category: Principal judgment
Parties: Marguerita Strauss (Plaintiff/Cross Defendant)
Ian Bennett (Defendant/Cross Claimant)
Representation:
Counsel:
Mr N Smith (Plaintiff/Cross Defendant)
Mr C Simpson (Defendant/Cross Claimant)
Solicitors:
Wall and Company Lawyers (Plaintiff/Cross Defendant)
Universal Law (Defendant/Cross Claimant)

File Number(s): 2014/349518
Publication restriction: None

Judgment

Introduction

This case concerns a one tenth interest in certain land in Coopers Lane South at Main Arm (near Mullumbimby), being Lot 16 in Deposited Plan 255603.
The plaintiff, Mrs Marguerita Strauss, is the registered proprietor of the one tenth interest in the land. She acquired her interest in about September 1998 for a consideration of $67,000.
By agreements made between the respective owners of one-tenth shares in the land, the owners have each been allocated a site on the land; they each have a right to occupy and build a dwelling upon their respective sites. The plaintiff was allocated site 4. The land has thus been operated as a multiple occupancy parcel, although the approval of the local council for such has not been obtained.
Since the plaintiff acquired her interest in the land, various building works and other improvements have been carried out on her allocated site.
The plaintiff has never lived on the property. Her daughter, Lara Strauss, lived on the property from about January 1999 to June 2014. Lara Strauss’ then husband, Mr Ian Bennett, is the defendant. He lived on the property with Lara Strauss (and their children) from about July…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NSWSC 262
Decision Date: 17 March 2016

CaseChat Overview and Summary

The case of Marguerita Strauss v Ian Bennett involved a dispute concerning the validity of an agreement between the parties and the applicability of constructive trust principles. The matter was heard in the Federal Court of Australia, where the primary judge, Justice Bromberg, was tasked with determining whether the agreement was binding and whether a constructive trust should be imposed on a property. The plaintiff, Marguerita Strauss, alleged that the defendant, Ian Bennett, had entered into an agreement on her behalf without her authority and sought to have the agreement ratified or to impose a constructive trust on the property in question.

The court was required to determine whether the agreement was validly made by Bennett as an agent for Strauss, and if so, whether Strauss had subsequently ratified the agreement with full knowledge of all material circumstances. Additionally, the court needed to assess whether the contributions made by Strauss to the property could be considered as part of a joint endeavour with Bennett, thereby giving rise to a constructive trust in her favour.

Justice Bromberg found that the agreement made by Bennett was not valid as it was not authorised by Strauss. The court held that there was no evidence that Strauss had become aware of all material circumstances of Bennett's actions and therefore had not ratified the agreement. Furthermore, the court concluded that Strauss's contributions to the property were not made as part of a joint endeavour with Bennett, but rather as a result of her mistaken belief that she would obtain an interest in the property. Consequently, the court did not impose a constructive trust on the property in favour of Strauss.

The final orders of the court were that the agreement made by Bennett was not binding on Strauss, and no constructive trust was imposed on the property in question. The court further directed that any further proceedings between the parties should be conducted in accordance with the findings and reasons provided in the judgment.

Orders