Reynolds v Reynolds
[2012] WASC 378
•10 OCTOBER 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: REYNOLDS -v- REYNOLDS [2012] WASC 378
CORAM: KENNETH MARTIN J
HEARD: ON THE PAPERS
DELIVERED : 10 OCTOBER 2012
FILE NO/S: CIV 1978 of 2011
BETWEEN: TODD BENJAMIN REYNOLDS
Plaintiff
AND
ESTHER REYNOLDS
Defendant
Catchwords:
Practice and procedure - Promissory estoppel - Detriment - More detail of detriment required - Request for further and better particulars opposed
Legislation:
Nil
Result:
Application granted
Category: B
Representation:
Counsel:
Plaintiff: No appearance
Defendant: No appearance
Solicitors:
Plaintiff: Michael Rogers & Associates
Defendant: Robertson Hayles Lawyers
Case(s) referred to in judgment(s):
Clifton v Chinnery [2011] WASC 294
Commonwealth v Verwayen (1990) 170 CLR 394
Giumelli v Giumelli (1999) 196 CLR 101
KENNETH MARTIN J: This is an application by the defendant seeking further and better particulars of pars 20 and 27 of the plaintiff's Amended Statement of Claim filed 19 June 2012 (ASOC).
The defendant has requested further detail and clarification from the plaintiff in relation to his contention concerning detriment, which he asserts at par 27, by particulars which repeat pars 12, 17, 20 and 23 of the ASOC.
The plaintiff's action seeks what would appear to be equitable relief, invoking arguments reliant upon promissory estoppel. This is advanced in circumstances where, after the death of the plaintiff's father on 26 July 2007, the defendant is said to have effectively promised him a quarter share of the value of assets as described in his father's will. The alleged promise has not been adhered to by the defendant, so promissory estoppel is invoked to essentially enforce that promise or (as it is put in the pleading) to make good the plaintiff's 'assumption' about receiving the quarter share of the value of the assets in the will from the defendant.
The dispute arises in circumstances where the late Mr Reynolds looks to have attempted to bequeath some of his assets on a basis of providing a quarter share to his son (the plaintiff) and a one‑half share to the defendant (with the other quarter share going to the late Mr Reynolds' grandchildren).
Difficulties present because it would appear that at the date of Mr Reynolds' death in July 2007, properties he had sought to deal with under his will were in fact owned jointly with his then wife, the defendant, and by orthodox principles of survivorship, joint assets pass at Mr Reynolds' death to his widow, rather than passing in accordance with the will.
That is the context in which the plaintiff seeks to contend that notwithstanding the legal effects of the survivorship principle applying in favour of the defendant to deny him quarter shares in assets he might otherwise have received under the will, he was nevertheless later promised the same quarter share in those assets by the defendant, and giving rise to what he pleads as his assumption (see par 10 of the ASOC).
There is no dispute that for the plaintiff to make good a promissory estoppel case against the defendant, the plaintiff needs to show both his reliance upon the assumption and a personal detriment. The key question is whether he can establish a sufficient detriment.
One of the claims of detriment the plaintiff raises is particularised by reference to par 17, to the effect that in reliance upon his assumption about receiving from the defendant a quarter share of the assets mentioned in his father's will, the plaintiff signed a form 21 (notification of change of by‑laws document) to permit and facilitate a creation of exclusive areas as referred to in a diagram handed to him by the defendant, 'thereby giving up more than half of the common property'. Reference to common property invites attention to the existence of two strata lots at 3 Victoria Road, West Swan. These strata lots are located side by side.
The plaintiff contends at par 3(c) of the ASOC that the first strata lot (Strata Lot 1) was disposed of under the late Mr Reynolds' will 'to the defendant and the plaintiff in equal shares …'.
From par 5 of the ASOC it emerges that when the late Mr Reynolds died, the plaintiff and his wife had jointly owned and resided in 'the dwelling situated on Strata Lot 2 on Strata Plan 39462', referred to as 'Strata Lot 2'.
From this it appears that the two strata lots at 3 Victoria Road, West Swan, existed side by side with common property and the plaintiff owning and occupying Strata Lot 2 (with his wife) but potentially to also receive a share of Strata Lot 1 under his late father's will. But at Mr Reynolds' death, Strata Lot 1 was owned jointly with the defendant. Accordingly, it passed to her under the survivorship principle, not under the terms of the will. In that context the plaintiff says that the defendant then asked him to effectively agree to 'carve up' the common property, on the basis of a portion of it becoming exclusively part of Strata Lot 1, with the residual portion exclusively part of Strata Lot 2.
Such an apportionment arrangement for the common property was to enhance the resale value of Strata Lot 1, which the defendant wished to sell, in order to realise funds to complete the construction of unfinished unit property developments at Warde Street, Midland, then 80% complete: see par 14(a) of the ASOC and 14(b) concerning the 'better price that would be obtained for Strata Lot 1 if the common property [the defendant] shared with the plaintiff could be divided into two exclusive use areas under a survey strata plan'. That is apparently what the plaintiff agreed. Strata Lot 1 was then sold off, with the defendant receiving all proceeds.
The core question is, what detriment can the plaintiff have suffered under arrangements which effectively split the common property and allocate portions exclusively as between the plaintiff and the defendant? The defendant says she wishes to know whether the plaintiff is making a financial argument in terms of this alleged detriment, as regards his giving up a share of common property (in which case she would like to know the extent of the alleged financial detriment the plaintiff has suffered, bearing in mind the plaintiff correlatively also obtained for himself some exclusive property for Strata Lot 2 as a result of the carve‑up). The defendant says that she is not sure whether the plaintiff is running a financial detriment argument about a loss of common property, or whether the plaintiff is only making a more limited argument, simply to the effect that he has given up something, namely a share in common property per se.
For the purposes of this particular argument to be determined on the papers, each side has filed written submissions. The defendant's submissions in support of her application for particulars are of 7 September 2012. The plaintiff's written submissions were received on 14 September 2012.
The plaintiff points out that, in the estoppel context, detriment is no narrow or technical concept. He also points to some other aspects of alleged detriment he seeks to raise by reference to pars 12, 20 and 23 of the ASOC. Furthermore, the plaintiff argued (submissions par 5(b)(i)) that:
[He] consented to the defendant dealing with the entirety of the assets referred to in the Will, including his expected quarter share of those assets thereby:
(i)giving up his rights to his share in the common property referred to in par 17;
In my assessment, the position as to an alleged detriment in the plaintiff concerning his giving up of common property is, at present, too vaguely stated. In my view, the defendant is properly entitled to know before trial whether the plaintiff is making a financial loss argument about division of common property consensually agreed, or whether it is only being argued that he agreed to a change in the status quo by which the common property was agreed to be divided and then apportioned exclusively as between the two strata units.
For the purposes of running an efficient trial and understanding the true dimensions of this dispute, this aspect of the plaintiff's detriment argument must, I think, be better clarified. On the face of it, it appears to be the most tangible argument as to alleged detriment being advanced. The other averments as to detriment particularised at pars 12, 20 and 23 present, at best, as rather marginal propositions, viewed on a prima facie basis.
It will be an exercise for a court at trial, by reference to the particular circumstances of this case, to evaluate the plaintiff's claim of promissory estoppel and to assess the alleged detriment said to have been suffered by the plaintiff concerning an alleged giving up of some common property. That detriment, if it is argued to be financial, might be measured in relatively small financial moment (perhaps a few thousand dollars). A low level of financial detriment would be measured against the worth of the fulfilment of the assumption concerning a quarter share in the very significant property assets the subject of the late Mr Reynolds' will. Were it to be the case, therefore, that the loss of a share in the common property was evaluated at only a few thousand dollars, then measured against a fulfilment of an assumption which would see the plaintiff then receive a substantially greater sum, the financial disparity may be a relevant consideration for the court in the exercise of discretion to grant equitable relief.
Cases arise from time to time, as the High Court observed in Giumelli v Giumelli (1999) 196 CLR 101 (see my comments in Clifton v Chinnery [2011] WASC 294 [49] ‑ [54]) where a court of equity might require an induced assumption that is acted upon to be fulfilled. That may be the end result, bearing in mind a particular detriment that is or will be sustained in the circumstances, including if an assumption relied upon is not ultimately honoured. Cases where family members act upon promises of receiving land in return for labouring for a pittance over long periods of their lives may fit that category.
So also might a scenario in which a party finds itself locked out of obtaining relief by reason of the defendant raising a defence it had promised not to raise (see Commonwealth v Verwayen (1990) 170 CLR 394). In Commonwealth v Verwayen, the High Court divided four-three (Mason CJ, Brennan and McHugh JJ dissenting) over whether the Commonwealth should be held to its earlier representations that it would not contest liability or rely on an expired limitation of action defence. Deane and Dawson JJ thought that Mr Verwayen's detriment, which they said was not only wasted effort and legal costs, but also 'increased ill health', stress and anxiety (see pp 448 ‑ 449 and 461 ‑ 462), could only be justly addressed if the Commonwealth were held to an adherence with its earlier commitment not to raise any limitation of action defence: see pp 448 ‑ 449 and 461 ‑ 462 respectively. Deane and Dawson JJ comprised the majority Justices with Gaudron and Toohey JJ. However, Gaudron and Toohey JJ reached their decisions on the basis of an application of principles of waiver.
It is always a question of evaluation case by case to ascertain what justice and equity require, in terms of redress following an assumption relied upon that later is resiled from or threatened to be resiled from.
In the present case, it is clearly necessary for this defendant to receive before trial a proper level of information concerning the true nature of what the plaintiff contends is his detriment concerning an alleged giving up of some share in common property as between two contiguous strata lots.
That information ought be provided in answer to the request for further particulars made as to par 27 of the ASOC. Those particulars should be provided within 14 days or by such further time as the parties, between themselves, consensually allow.
To the extent costs have been incurred on this interlocutory application in the preparation and exchange of written submissions, the defendant, as the successful party on this application, should receive its costs of the application, to be taxed.
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