Ross v Ross
[2000] WASCA 296
•18 OCTOBER 2000
ROSS & ANOR -v- ROSS & ANOR [2000] WASCA 296
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASCA 296 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:195/1998 | 10 APRIL 2000 | |
| Coram: | MALCOLM CJ KENNEDY J MURRAY J | 18/10/00 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Appeal and cross-appeal dismissed | ||
| PDF Version |
| Parties: | CLIVE MICHAEL ROSS JENNIFER ANNE ROSS RAYMOND ARTHUR ROSS BERNADINE ROSS |
Catchwords: | Contract Appeal and cross-appeal Agreement to acquire land, build a house and for the sale of the property Agreement as to the terms upon which one party might reside in the house before sale Whether agreement breached so as to amount to repudiation Whether accepted by the other party How costs of a trustee for sale were to be borne Turns on own facts |
Legislation: | Nil |
Case References: | Devries v Australian National Railways Commission (1993) 177 CLR 472 Alexander v Rayson [1936] 1 KB 169 Bank of India v Patel [1982] 1 Lloyd's Rep 427 Boranga v Flintoff (1997) 19 WAR 1 Boulevarde Developments v Toorumba Pty Ltd (1984) 15 ATR 1197 Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 Empirnall Holdings v Machon Paul Partners Pty Ltd (1988) 14 NSWLR 523 Geere v Mare [1863] 159 ER 141 Gray v Pastorelli [1987] WAR 174 Great City Pty Ltd v Kemayan Management Pty Ltd [1999] WASC 70 Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Holman v Johnson (1775) 98 ER 1120 Marist Brothers v Shire of Harvey (1995) 14 WAR 69 Miller v Karlinski (1945) 62 TGLR 85 Napier v National Business Agency Ltd [1951] 2 All ER 264 Pirie v Saunders (1969) 104 CLR 149 Rust v Abbey Life Ins Co [1979] 2 Lloyd's Rep 334 Scott v Brown, Doering, McNab & Co [1892] 2 QB 724 Snell v Unity Finance Ltd [1964] 2 QB 203 Spunwill v Bab Pty Ltd (1994) 36 NSWLR 290 Taylor v Johnson (1982) 151 CLR 422 Tramways Advertising v Luna Park (1938) 38 NSW SR 632 Upfill v Wright [1911] 1 KB 506 Warren v Coombes (1979) 142 CLR 531 White v Australian and New Zealand Theatres (1943) 67 CLR 266 Wiedmann v Walpole [1891] 2 QB 534 Wing Luck Foods v Lay Choo Lim [1989] WAR 358 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : ROSS & ANOR -v- ROSS & ANOR [2000] WASCA 296 CORAM : MALCOLM CJ
- KENNEDY J
MURRAY J
- JENNIFER ANNE ROSS
Appellants
AND
RAYMOND ARTHUR ROSS
BERNADINE ROSS
Respondents
Catchwords:
Contract - Appeal and cross-appeal - Agreement to acquire land, build a house and for the sale of the property - Agreement as to the terms upon which one party might reside in the house before sale - Whether agreement breached so as to amount to repudiation - Whether accepted by the other party - How costs of a trustee for sale were to be borne - Turns on own facts
Legislation:
Nil
(Page 2)
Result:
Appeal and cross-appeal dismissed
Representation:
Counsel:
Appellants : In Person
Respondents : Mr A Metaxas
Solicitors:
Appellants : In person
Respondents : Arthur Metaxas & Co
Case(s) referred to in judgment(s):
Devries v Australian National Railways Commission (1993) 177 CLR 472
Case(s) also cited:
Alexander v Rayson [1936] 1 KB 169
Bank of India v Patel [1982] 1 Lloyd's Rep 427
Boranga v Flintoff (1997) 19 WAR 1
Boulevarde Developments v Toorumba Pty Ltd (1984) 15 ATR 1197
Brogden v Metropolitan Railway Co (1877) 2 App Cas 666
Empirnall Holdings v Machon Paul Partners Pty Ltd (1988) 14 NSWLR 523
Geere v Mare [1863] 159 ER 141
Gray v Pastorelli [1987] WAR 174
Great City Pty Ltd v Kemayan Management Pty Ltd [1999] WASC 70
Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310
Holman v Johnson (1775) 98 ER 1120
Marist Brothers v Shire of Harvey (1995) 14 WAR 69
Miller v Karlinski (1945) 62 TGLR 85
Napier v National Business Agency Ltd [1951] 2 All ER 264
Pirie v Saunders (1969) 104 CLR 149
Rust v Abbey Life Ins Co [1979] 2 Lloyd's Rep 334
Scott v Brown, Doering, McNab & Co [1892] 2 QB 724
(Page 3)
Snell v Unity Finance Ltd [1964] 2 QB 203
Spunwill v Bab Pty Ltd (1994) 36 NSWLR 290
Taylor v Johnson (1982) 151 CLR 422
Tramways Advertising v Luna Park (1938) 38 NSW SR 632
Upfill v Wright [1911] 1 KB 506
Warren v Coombes (1979) 142 CLR 531
White v Australian and New Zealand Theatres (1943) 67 CLR 266
Wiedmann v Walpole [1891] 2 QB 534
Wing Luck Foods v Lay Choo Lim [1989] WAR 358
(Page 4)
1 MALCOLM CJ: In my opinion both the appeal and the cross-appeal should be dismissed for the reasons to be published by Murray J.
2 KENNEDY J: I have had the advantage of reading in draft the reasons to be published by Murray J, with which I am in agreement. I would therefore dismiss both the appeal and the cross-appeal.
3 MURRAY J: This was an action between brothers and their wives. The respondents sued the appellants. Clive, Jennifer and Raymond Ross gave evidence before Wheeler J at the trial, which lasted some five days. Because of the nature of the matters raised on the appeal, I have read the evidence and perused the exhibits. There were two other parties to the proceedings at trial as second defendants. They were a Mr and Mrs Allen, who appear to have been sued because the property at Whitfield Terrace, Winthrop, with which the action was concerned, was purchased in June 1988 in the names of the Allens. They took no part in the proceedings at trial, as her Honour put it, "it being acknowledged on all sides that the second defendants had been at all relevant times bare trustees in relation to the house."
4 Not only does that appear to have been accepted by the plaintiffs and the defendants at trial, but on the evidence accepted by her Honour, that was a conclusion which was well justified. Although the first ground of appeal challenges that finding, it raises matters of argument which effectively cavil at the description "bare trustees" having regard to the way in which the purchase was effected and the Allens became the registered proprietors, and it is a debate without substance in the context of the substantive issues which were ventilated at the trial and in respect of which the appeal is brought.
5 The respondents' claim, so far as it is necessary to refer to the pleadings, was that by an oral agreement made over a period from about May 1988 to December 1990, the respondents and the appellants agreed to purchase a vacant piece of land (the land at Winthrop) and to build a house on the land. They agreed to share equally the cost of purchase of the land and the costs of development, Mr Clive Ross being nominated as the person who would engage the builder and tradesmen and supervise construction. It was pleaded that upon completion of the house, the appellants would be entitled to reside there for a period of up to four and a half months. The property would be offered for sale at the expiration of three months.
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6 If the property was not sold within the four and a half month period then the appellants could continue to live there, but in consideration for the payment by the appellants to the respondents of 50 per cent "of the fair market rental for the development". If the appellants did not wish to continue to live in the house after the period of four and a half months, then they were at liberty to leave and a tenant would be sought for the property until it was sold, the rental income to be divided equally between the appellants and the respondents.
7 It was pleaded, and it appears to have been the case, as her Honour found, that the building of the house was practically completed by November 1991 when the appellants moved in. Her Honour found that by 1 May 1992 at the latest the house and garden were sufficiently finished for the property to be in a fit state to rent. Thereafter, the appellants continued to live in the house until they purchased it on 14 July 1998, but they paid no rent for the whole of that period. The date 1 May 1992 was pleaded and accepted by her Honour to be the date when the four and a half month period after practical completion of the house ended. The respondents' claim was for the unpaid rent in accordance with the agreement together with interest to the date of judgment.
8 It will be noticed that the agreement thus pleaded was said to have been made orally over a period of some years. By their defence, the appellants pleaded in more detail what were asserted to be a number of agreements, effectively splitting the total arrangement between the parties into various component parts. The first agreement pleaded, said to have been made in about May 1988, was for the purchase of the land and the involvement of the Allens until, it was asserted, the appellants agreed with the Allens to buy them out, which they pleaded they did by about September 1989. Then, it was said that in about March 1991 the appellants and the respondents made an oral agreement to build a house on the land. They agreed that the appellants were to organise and supervise construction and that the parties would contribute equally to the costs, but, the appellants asserted, the respondents agreed with them that they would then make the certificate of title available to enable registration of a transfer from the Allens to the appellants.
9 The appellants also pleaded that the house was to be placed on the market for sale three months after construction was completed and that the net proceeds of sale were to be divided equally between the parties. They pleaded that there was agreement as to how the contributions towards the cost of construction were to be paid and that if any party was late in
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- making such a contribution, interest would be payable from the date of default until payment was made at the rate of 20 per cent per annum.
10 They also said that the appellants were entitled to reside in the house rent free for a period of four and a half months after practical completion. As to the payment of rent, the pleading by way of defence differed from the statement of claim. The appellants pleaded that if they elected to remain in residence after the period of four and a half months, "and another tenant was available to rent the property", they would pay the respondents 50 per cent of the "fair market value" for the property.
11 However, both parties pleaded that there was an agreement which included an option to reside in the property rent free for a period of up to four and a half months after practical completion of the house, with the property being offered for sale after three months, the cost of doing so being shared and the profits resulting from the sale also being shared equally. The only qualification upon the obligation to pay a rent of 50 per cent of the fair market rental for the house appears to be the availability of another tenant, but Wheeler J found that there was no such condition agreed to be imposed upon the liability of the appellants to pay rent. Nor does it seem to have been the basis upon which the case was defended at trial.
12 The basis of the defence emerges from two paragraphs quoted by her Honour in her judgment as par 3A and par 3B. There are oddly worded clauses in that they are a pleading in the alternative and commence with the words, "if it was a term of the Agreement that the [appellants'] entitlement to reside on the Property after construction was limited, either to a period of four and a half months after construction, or at all, (which is denied),". The only limitation upon the appellants' capacity to remain in residence which seems to have been pleaded in terms common to both parties, was the sale of the property. Otherwise, it appears to have been accepted on both sides that if the appellants wished to remain in residence, they were entitled to do so, paying after the expiry of the period of four and a half months the agreed rental which, at 50 per cent of a fair market rental, would seem to me to be generous.
13 However that may be, the pleading was, in the alternative, that any limitation upon the appellants' entitlement to reside in the house, albeit denied, was conditional upon the transfer of the property to the appellants, or that it was "in a position where it could lawfully and properly be sold". Presumably that meant that the Allens were to transfer the property to the appellants or at least authorise the sale, and the appellants further pleaded
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- that it was an implied term of their agreement with the respondents that they would do everything reasonably within their power to effect a transfer of the property to the appellants, or place it into a situation where it could be sold.
14 It was alleged that the respondents continued to hold the duplicate certificate of title and therefore, although the appellants had an executed form of transfer which had been provided to them by the Allens, the property could not be sold and the respondents were refusing to assist in any way to make the sale. In that way it was pleaded they breached the agreement, indeed, repudiated it, which repudiation the appellants pleaded was orally accepted so as to terminate the agreement and negate any liability to pay rent under its terms.
15 The appellants' case therefore appears to have been that they could not achieve the sale of the property without the cooperation of the respondents which was denied them. Their argument was that the agreement was terminated on that account and with it, they say, went the obligation to pay rent. The fundamental difficulty with the case expressed in that way is that it was from the source of the same agreement that their entitlement to reside in the house arose. But it is of course the case that the respondents' claim was not said to arise out of a cause of action based on the appellants' wrongful residence in and adverse possession of the property. They accepted the appellants' entitlement to be there until the property was sold and pursued their claim for rent squarely under the terms of the agreement which both parties alleged had been made.
16 There was a defended counterclaim, firstly for interest under the terms of the agreement for the late payment of a contribution of $30,000 required of the respondents to meet part of their share of the construction costs, secondly for loss allegedly incurred by the failure of the respondents to assist to achieve the sale of the property and thirdly for a declaration as to the proportions in which it might be declared that the Allens held the property on trust for the appellants and the respondents. The last claim was a matter which had fallen away by the time of trial, by which time the property had been sold.
17 A central part of the resolution of the factual issues at trial was the determination made by Wheeler J as to whose evidence was to be accepted, that of Mr Raymond Ross for the respondents, or the evidence of the appellants. The necessity for this determination arose out of the fact that both parties alleged an agreement made orally, although there
(Page 8)
- was correspondence and there were a series of documents which bore upon the issues raised.
18 Much has been written of recent times about the approach of an appellate court which is asked to set aside findings based upon the determination by a trial Judge of issues of credibility, including the demeanour of witnesses. It is sufficient for present purposes to refer to the decision of the High Court in Devries v Australian National Railways Commission (1993) 177 CLR 472. In that case the court recognised the real disadvantage which an appellate court has compared with the position of the trial Judge. Unless there may be seen to be matters which affect credibility which warrant the appellate court in differing from the conclusion of the trial Judge, the appeal will be dismissed. As the majority put it, what is required is for the appellate court to see that the trial Judge has failed to use, or has palpably misused, his or her advantage in making an assessment of credibility; for example, if it can be seen that the Judge has acted on a view of the facts inconsistent with facts which are incontrovertibly established by the evidence, or which was glaringly improbable.
19 In my opinion nothing of that kind emerges in this case. Her Honour accepted Mr Raymond Ross as a credible witness. She said she was "not inclined to disbelieve" him. She referred to the internal consistency of his evidence and to his demeanour. In some respects she referred to his account as having a certain logic and consistency with documents in evidence. Her Honour said, however, that she did not accept everything Mr Raymond Ross said in evidence because upon some aspects she thought there was an element of reconstruction in his account.
20 On the other hand, her Honour thought the evidence of Mr Clive Ross, whilst given honestly, in many respects lacked consistency with documentary evidence and lacked a logical foundation. She thought that there was a substantial element of reconstruction in his evidence and in the end she concluded that she could not accept his version of critical events. So far as Mrs Jennifer Ross was concerned, although again her Honour did not query the honesty of her recollection, she thought that the evidence was affected adversely by an element of reconstruction and she was concerned about the fact that there were no material discrepancies between the evidence given by each of the appellants. Her Honour noted that the material events had been much discussed between them in an atmosphere of resentment by both towards Mr Raymond Ross. Her Honour found herself no more able to accept
(Page 9)
- Mrs Ross' evidence than she was able to accept the evidence of Mr Clive Ross.
21 It is clear that to some extent her Honour's judgment about these matters flows from her impressions of the demeanour of the witnesses as well as having regard to the content of their evidence. There can be no suggestion, in my opinion, that her Honour failed to make the assessment of credibility which was incumbent upon her. She had regard to matters which might properly affect her judgment in that regard. Having perused the transcript of the oral evidence and the relevant documents, I am unable to see any ground of the kind discussed in the authorities which would justify this Court in setting aside her Honour's conclusions of fact relative to the determination of the issues before her.
22 It is clear that her Honour accepted that there was a broad oral agreement between the parties, formed before 1990, to acquire the land, build on it, and to ultimately sell the property for their mutual profit. Expenses and any profit were to be shared equally.
23 Her Honour did not enter into the contention that the respondents did not want the property in their name for purposes of tax evasion. On the other hand, although she noted the contention of Mr Raymond Ross that the appellants wanted the capacity to reside in the house and wanted it transferred into their names so that they might claim a tax deduction on the basis that the property was their principal place of residence, her Honour did not find it necessary to determine that issue and she expressly declined to do so.
24 Relevantly to her ultimate conclusions of fact, her Honour did, however, find that by early 1990 at the latest, relations between the brothers had very substantially broken down and there was much suspicion and mistrust on each side. That conclusion, her Honour thought, was supported not only by her impressions of their evidence, but by the correspondence which commenced in late 1990 and which showed a "refusal to agree on even the most trivial matters, with very serious allegations of dishonesty made on each side." Her Honour concluded that in that atmosphere she was not able to find that any elements of agreement were added to those initially made in 1988/89. In my opinion, such a conclusion was fairly open to her Honour.
25 Specifically as to the contention of the appellants that it was part of their agreement with the respondents that when requested to do so, they would provide the duplicate certificate of title so that the transfer of the
(Page 10)
- property to the appellants could be facilitated, and would otherwise use their best endeavours to ensure that the property could lawfully and properly be sold for the parties' mutual benefit, Wheeler J found no such agreement. It is clear that she accepted the evidence of Mr Raymond Ross, denying that any such agreement was ever made. Further, her Honour accepted that the respondents' concern was that if they facilitated a transfer of the property into the names of the appellants, their beneficial interest in the property would not be adequately protected because of the threatening tone adopted by Mr Clive Ross, which involved, both orally and in correspondence, at least an implication that the appellants were prepared to deny the respondents any interest in the property.
26 Finally, her Honour accepted that Mr Raymond Ross held the view that there was no need to facilitate a transfer of the property into the registered proprietorship of the appellants if it was then to be sold to a third party. Such a sale could be made by the Allens as vendors without incurring the additional stamp duty attendant upon an intermediate transfer to the appellants. In short, although her Honour does not express the conclusion directly, it is abundantly clear from her reasons that she did not accept that there was any element of agreement in the terms pleaded by the appellants.
27 That conclusion, of course, had a fundamental impact upon the outcome of the trial because the appellants were unable to establish the breach of the agreement upon which they relied as constituting its repudiation, a repudiation said to have been orally accepted by Mr Clive Ross on behalf of the appellants in a telephone conversation with his brother.
28 Her Honour did not expressly find whether there was or was not any such conversation, which the evidence suggested occurred in September 1991. She reviewed subsequent correspondence and other evidence which suggested that the appellants continued thereafter to rely upon, and insist upon the performance of, the agreement in the terms which they asserted it contained. Further, her Honour noted that in the original form of the defence and counterclaim there was a prayer for relief in the form of specific performance of the agreement. The form of defence and counterclaim upon which the appellants relied at the trial was first advanced by an application to amend the pleading on 13 September 1998, the day before the trial commenced.
(Page 11)
29 In the end her Honour concluded that not only was she not prepared to find that the agreement included terms such as those relied upon by the appellants, but that whatever was said during the conversation in September 1991, it would not on the part of Mr Clive Ross have been meant to be, and would not on the part of Mr Raymond Ross have been understood to be, the acceptance of a repudiation of the agreement or the breach of a fundamental term.
30 Her Honour found that there was no basis for the implication of a term as pleaded by the appellants because it was not, on her Honour's view of the facts, capable of complying with the circumstances in which the law holds that a term will be implied in an agreement between parties. Her Honour referred specifically to the lack of any need for such a term to give the agreement, such as it was between the parties, business efficacy. Further, her Honour did express the alternative view that:
"if there were such an agreement, it was not a central part of the overall agreement and it was certainly not a condition precedent to the requirement that [the appellants] pay rental; rather, at most, it was an entirely independent part of the agreement for the benefit of Raymond stemming from his desire that his name not appear on the title."
- Whatever one may think of that alternative view, it was not necessary to her Honour's reasoning.
31 It followed from her Honour's conclusions which, in my view, may not be set aside on appeal, that the claim for rent must succeed. The agreement expressed in terms common to both parties remained in force throughout the period of the appellants' occupation of the property from 1 May 1992, four and a half months after practical completion of the construction of the house, until 14 July 1998, the date upon which, as I understand it, the property was sold and in fact purchased by the appellants. Interest was allowed until judgment. The rental assessed under the formula provided by the agreement was reduced by 50 per cent of the various outgoings which the appellants had paid in full during the relevant period. Her Honour's judgment that the appellants were obliged to pay the respondents the sum of $62,789 and costs must therefore be upheld.
32 As to the counterclaim, it also followed that the elements of the claim, other than those concerned with the claim for interest on the late payment of the contribution of $30,000 towards the costs of construction, were to be dismissed and her Honour so ordered. She allowed the claim
(Page 12)
- for interest at the rate of 20 per cent for the periods involved in the late payment of the sum of $30,000. There was no issue at trial that the appellants should account to the respondents for money expended in the construction of the house and that issue was agreed to be remitted to a Registrar for the account to be taken and an assessment of the balance in favour of either party to be made. Nothing more need be said of those matters in the context of the appeal. In my opinion, for the reasons given the appeal should be dismissed.
33 There is a cross-appeal. It relates to proceedings before Wheeler J after judgment was delivered in which she was asked to deal with various matters by way of variation of the judgment which had been originally been pronounced, and to make other final orders, I gather on the application of the respondents. It appears that one such application concerned the liability to pay the costs of a court appointed trustee for the sale of the property. Both parties placed material before her Honour directed to establishing who was to blame for incurring all or the bulk of those costs. Her Honour thought that if she were required to determine that issue, she would be of the view that the bulk of the trustee's costs, two thirds or thereabouts, were incurred by reason of "the excessive demands" made upon the trustee by Mr Raymond Ross. However, her Honour declined to make any order with respect to the trustees' costs. She concluded that she had no power to do so; nor, if she had the power, was she of the view that the respondents had shown any sufficient reason why she should do so.
34 Her Honour took that view because she noted that on 12 June 1998 an order in respect of such costs had been made by Master Bredmeyer on the application of the trustee in proceedings at which both parties appeared, the respondents being represented by counsel who informed the court that he did not oppose an order for the recovery of the trustees' professional fees and legal costs out of the net proceeds of the sale of the property. After some debate about the terms of the order, the Master ordered that, "the professional fees (as approved by Master Bredmeyer at the rate of $150 per hour) and expenses of Mr Christie, as trustee, are to be paid out of the proceeds of sale of the property and are to be assessed by a Registrar." No appeal has been instituted or, if the order was thought to be interlocutory, no application for leave to appeal has been made, in respect of that order. When the matter was ventilated before Wheeler J, for the reasons I have mentioned, her Honour simply declined to make any order.
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35 The cross-appeal is against that refusal. There is no need, in my view, to consider the competency of the cross-appeal because in my view it should be dismissed on the merits.
36 The first ground is effectively that her Honour erred in taking the view that the order made by the Master was an order for the payment of the costs. As matters had fallen out, the Court had already approved that the trustee accept the appellants' offer to purchase the property. Half that sum was to be paid and the net proceeds of sale, after a determination was made as to how the costs should be borne, would therefore be paid to the respondents who argue that if the order as to the payment of the fees and expenses of the trustee is taken at its face value as an order for the payment of those costs, they will be borne in their entirety by the respondents. Her Honour, I think, appreciated that that would be the effect of the order, an effect which she considered appropriate in that the bulk of the costs incurred were incurred at the behest of Mr Raymond Ross.
37 The respondents argue that the order made by the Master was not an order for the payment of the trustee's costs, but an order simply designed to secure the trustee's costs by allocating a fund out of which the payment was to be made, and it was upon that basis that no objection was raised to the making of the order. But in my respectful opinion, Wheeler J was right to hold that the order of the Master was an order for the payment of the costs and, in view of the way in which the fund was to be distributed, that determined where the liability to pay those costs and expenses would fall. In my opinion an order had been made and it was not open to her Honour to set it aside and make another different order.
38 If there was power for her Honour to make an order, the respondents argue on the cross-appeal that her Honour erred in declining to do so because, they submit, it was not simply a question of to whose interests or requirements the trustee's time was devoted, but, it is submitted, her Honour should have had regard to the fact that the trustee was originally appointed because the appellants refused over an extended period to voluntarily offer the property for sale and, indeed, their intransigence caused the proceedings by which the order for sale was made.
39 Her Honour, however, took the view "that the relationship between the parties had so broken down by the time Mr Christie was appointed that it was inevitable that a sale could not take place without the assistance of a trustee." In those circumstances it seems to me that a decision as to
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- which party should bear the costs, based upon the consideration of who was primarily responsible for the costs being incurred, could not be said to involve appealable error in the exercise of the discretion as to the order to be made. For all those reasons I would therefore dismiss the cross-appeal.
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