Sidhu v Van Dyke

[2013] HCATrans 312

[2013] HCATrans 312

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S148 of 2013

B e t w e e n -

PRITHVI PAL SINGH SIDHU

Applicant

and

LAUREN MARIE VAN DYKE

Respondent

Application for special leave to appeal

FRENCH CJ
BELL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 DECEMBER 2013, AT 9.28 AM

Copyright in the High Court of Australia

MR N.C. HUTLEY, SC:   If your Honour please, I appear with my learned friend, MR J.C. GILES, for the applicant.  (instructed by Henry Davis York Lawyers)

MS L.M. VAN DYKE appeared in person.

FRENCH CJ:   Ms Van Dyke, I notice that the submissions which were filed on your behalf were signed by counsel.  Now, are you going to be arranging or do you have any legal representation or legal advice?

MS VAN DYKE:   I have no legal representation as my ‑ ‑ ‑

FRENCH CJ:   But you rely on those written submissions?

MS VAN DYKE:   Yes, I do.

FRENCH CJ:   Yes, all right.  I will hear from Mr Hutley first.  Yes, Mr Hutley.

MR HUTLEY:   As your Honour please.  As your Honours will see from our submissions, we submit there are two errors by the Court of Appeal.  Firstly, that they reverse the onus of proof in respect of reliance on promises which the applicant admittedly made.  Your Honours will find those promises at application book 123, paragraph 17.

FRENCH CJ:   So you say they elevated something which is a natural inference into a reversal of onus?

MR HUTLEY:   Yes, your Honour, inconsistently with the Court’s decision in Gould v Vagellas, that all there is – if there is any onus, as Gould v Vagellas says, we have merely an onus to direct the Court’s attentions to matters which might satisfy the Court that they should not draw the inference of reliance which is available from the character – the onus at all times remaining upon the plaintiff.

FRENCH CJ:   Yes.

MR HUTLEY:   If I can take your Honours shortly to the way it was dealt with in point of fact by her Honour Justice Ward at first instance.  If your Honours go to application book 81 to 85, your Honours will find paragraphs 196 to 204 where her Honour dealt with the question of the respondent’s reliance upon the promises made by the applicant, her Honour concluding ultimately, critically at paragraph 204 on page 85, it says:

What the concessions by Ms Van Dyke make clear is that it is entirely possible that she would have remained living on the property, carrying out the tasks on the property (even if not to the extent of the work she in fact carried out) and working part‑time, whether or not the promises had been made ‑

et cetera.  Now, that was done.  Her Honour not only had regard to the cross‑examination but also identified a series of factors which told objectively in favour of that.  Your Honours will see from judgment, paragraph 199 that Ms Van Dyke – I am sorry, your Honour, application book 83 – that Ms Van Dyke loved living on the property and loved her part‑time employment there.  She also loved my client and believed their relationship would last forever, providing objectively a reason for staying on the property, and your Honours will see that at judgment 189, application book 82.

And the respondent paid “less than market rent” to live on the property.  That your Honour sees most conveniently at the Court of Appeal judgment, paragraph 11, application book 121 to 122.  Finally, she received free agistment for her horses and alpacas, as found by her Honour at judgment 215, application book 88.  Broadly speaking, as appears from judgment 260 at application book 86, the benefits that Ms Van Dyke received from working on the property broadly matched, in the terms of her Honour Justice Ward, the work that she carried out on the property.  Now, the Court of Appeal at paragraph 78 at application book 143 said:

Proof of detrimental reliance does not mean that the plaintiff must go to the extent of proving that, “but for” the promise, he or she would not have acted or abstained from acting in the way he or she did.  Such a requirement denies the plaintiff the benefit of the “presumption of reliance”.

Their Honours then refer to the decision of Flinn v Flinn, and we say Flinn v Flinn is a wholly conventional application of the principles referred to by this Court in Gould v Vagellas.  In fact, your Honours will see that the relevant passages are referred to in it.  In point of fact, your Honours will see in the first sentence:

“But, it would be remarkable if that promise was –

et cetera; that is a reference to the facts in Flinn v Flinn which were of the classic variety of people inviting two young people to go and work and develop a rural property on the basis that it would be left to them in the will, and that is the reference made to that.  Now, at paragraph 83 in the judgment at 145 in the application book one sees the statement, which is the fundamental statement of principle which comes from this judgment:

Where inducement by the promise may be inferred from the claimant’s conduct, as is the case here, the onus or burden of proof shifts to the defendant to establish that the claimant did not rely on the promise.  It was therefore for the respondent to rebut that presumption and establish that the appellant did not rely at all on the promises in acting or refraining from acting to her detriment.

That is, in effect, repeated in paragraph 94 in the quote from the book of Mr Spence.  Now, if one then goes to Gould v Vagellas shortly, your Honours, that is 157 CLR 215, the relevant passages commencing on 237, at the bottom of 237 where it says:

However, decisions of this Court leave no room to doubt that the ultimate onus of proving inducement rests upon the party seeking relief in respect of the fraudulent misrepresentation –

one would have thought an a fortiori case, in our respectful submission.  Then one moves over to 238, your Honours, at the second full paragraph:

There is no reason to doubt the correctness of these statements.  They accord with sound principle, namely, that a plaintiff carries the burden of establishing every element of his cause of action.  At the same time, one can readily understand why it is in cases of deceit that a tribunal whose duty it is to find the facts may require a defendant to make some answer . . . However, it is open to the defendant to obstruct the drawing of that natural inference of fact by showing that there were other relevant circumstances . . . It is entirely accurate to speak of an onus resting on a defendant to draw attention to the presence of circumstances such as those I have described in order to show that the inference of the fact of inducement which would ordinarily be drawn from the fraudulent making of a false statement calculated . . . But it is no more than an evidentiary onus – an obligation to point to the existence of circumstances –

and then it goes over onto the next page.  In our respectful submission, the Court of Appeal at 83 and 94 and following have created a wholly new principle ‑ which, your Honour, is one of significance ‑ that seems to have been done to a degree because of a perception that the position may be different in the United Kingdom, and I will not take your Honours to the case but that seems to have been affected by their consideration of the decision of the Court of Appeal in the United Kingdom in Campbell v Griffin which is considered at paragraphs 96 and following at page 149 of the application book.  If the principle is such in England, then the English courts have departed from the position which maintains in Australia, as laid down by this Court.  That is all we wish to say on the first point.

FRENCH CJ:   Yes.

MR HUTLEY:   The second point, your Honour, is in relation to relief.  The equity ‑ ‑ ‑

FRENCH CJ:   Now, the actual assessment was remitted to the Equity Division, was it not?

MR HUTLEY:   Yes, for the value of the property but, in effect, it was just to the value of the property because the property, in effect, had not been subdivided so it is sort of a notional exercise as to what it would be.  Our point is, shortly put, that Giumelli v Giumelli in this Court says, in effect ‑ ‑ ‑

FRENCH CJ:   You say they got the measure wrong?

MR HUTLEY:   Not only they got the measure wrong; because of the inversion of the onus, it is really tied up with the inversion of the onus which we could not discharge, one really, in effect, got to the position that Ms Van Dyke was not required to prove detriment at all, merely to advert to things of possible detriment, and that appears from paragraph 104 in the judgment where their Honours advert to the detriment as two particular elements.  They say:

That requirement was satisfied, in this case, not only by the appellant’s foregoing of the opportunity to seek a property settlement in connection with her divorce –

now that is not disputed, that was – as her Honour ‑ ‑ ‑

BELL J:   That was the one finding that the primary judge made.

MR HUTLEY:   Yes.  And it was estimated by Ms Van Dyke to be between $35,000 and $60,000 and her Honour Justice Ward would have sent it off for an inquiry as to its true value.  Then it says:

The appellant estimated that the maintenance and improvement work she carried out at Burra Station was worth $112,400 (assessed at the minimum hourly labouring wage . . . She said in her affidavit that she could have found work as a natural resource catchment officer or ranger earning up to $40,000 per year in the first years and then, after promotions, up to $80,000.  Her salary could have been more than $400,000 . . . The failure to seek to acquire another home could also amount to substantial detriment.  It is not necessary to undertake any

precise quantification.  It is sufficient to note that, the appellant’s reliance involved material detriment.

Now, your Honours will have tab 5 in the materials.  That is the evidence before Justice Ward of the position with respect to the opportunity to obtain employment.  Your Honours will find that in paragraph 73 of Ms Van Dyke’s affidavit.  Your Honour, that material was admitted solely as to her belief, and your Honours will find behind that the transcript, and your Honours will find that ruling by her Honour at page 6, line 47 to page 7, line 5.  Her Honour, in effect, admits that material purely as evidence of belief.

The consequence of their Honours inverting the onus, saying that one has the onus to discharge that they have not acted to their material detriment in effect creates a situation that a person in the position of Ms Van Dyke does not even have to prove any detriment, it is just a belief because we have to discharge, apparently, all questions of detriment.  And that leads to result in this case that matters of belief have led to a situation where my client is required to make good a voluntary promise, absent any proof of actual detriment beyond the…..just beliefs as to detriment.

In our respectful submission, that in a sense has the odd consequence, it would appear if correct, an equitable estoppel might be a more secure position than contract.  One does not have to prove any loss at all.  One simply has made good a promise because one believes one might have suffered a detriment.  Both those points we say are points of importance.  They are departures from established principle in this Court and, obviously, this is a field which there are many cases involving these sorts of relationships and the like and it is a matter which this Court should entertain.  Those are our submissions, if the Court pleases.

FRENCH CJ:   Thank you, Mr Hutley.  Yes, Ms Van Dyke.  I notice, Ms Van Dyke, you represented yourself both at trial and in the appeal?

MS VAN DYKE:   That is correct.

FRENCH CJ:   Yes, all right.  So you know the issues here; we have to decide whether this is a case which warrants the grant of special leave in terms of a matter of important principle, which is the way that Mr Hutley is putting it in his argument.

MS VAN DYKE:   Yes, I do understand that, thank you.  If I may, I would like to – firstly, as I said earlier – to rely on the submissions before you, but also I have prepared some dot points here that go to the two points Mr Hutley has made.  Firstly, nothing different or new has been created by the Court of Appeal using the term presumption of reliance.  The Court of Appeal adopted an orthodox means of finding the facts of reliance, namely, by inferring from all the circumstances presented that I had relied.  Those circumstances contained the nature of the representations and the nature of my conduct following them.

Presumption of reliance has been used in very similar personal relationship type cases, such as Flinn v Flinn and other cases applied in the Flinn Case, and these cases were used by the Court of Appeal because they contained very similar circumstances of reliance, circumstances where representations were made in the context of a domestic or interpersonal relationship.  The Court of Appeal upheld the lower court’s finding that the applicant knew and intended the promises to be relied on.  The applicant chose not to put on any of his own evidence in the lower court despite a lengthy affidavit being sworn and served on me.  The applicant had the opportunity to rebut my evidence on how I relied but did not do so.

BELL J:   Can I just take you to one aspect of that?

MS VAN DYKE:   Yes.

BELL J:   You will recall that the trial judge noted your answers to a number of questions about how you might have behaved given the circumstances, and the primary judge took the view that in light of that evidence the one aspect of detriment of which she was satisfied concerned the circumstance that you did not seek a property settlement from your husband.  Now, the Court of Appeal took a different approach respecting that parcel of evidence, and in doing so the Court of Appeal had regard in particular to English authorities where in England the approach has been taken to say, but one should not decide a case like this by a meticulous examination of answers in a sense that it may disadvantage an honest claimant who acknowledges that there are various considerations bearing on these life decisions.

Now, the point of general importance that your opponent seeks to ventilate is the correctness of the adoption of that approach, and you would have heard Mr Hutley make the submission, he recognises that the Court of Appeal acted on authority from England and he submits the English have taken a different path to the path that has been established in Australia.  Now, that is an issue, on the face of it, of some importance.  Do you see that?

MS VAN DYKE:   I do see that, however, my counsel – I wish he could have been here today but he is overseas – does not follow that, in that he believes that the Court of Appeal judges applied an orthodox method of determining reliance in my circumstances, but I appreciate you stating that.

FRENCH CJ:   Well, that appears at paragraph 19, I think, of the written submissions on your behalf at page 183 of the appeal book.

MS VAN DYKE:   Yes.  Okay.

FRENCH CJ:   Yes.

MS VAN DYKE:   The applicant, as I said, chose not to put on his own evidence, and I will not dwell on that, and had the opportunity to rebut my evidence.  Just in summary there, the Court of Appeal did make a unanimous finding, having looked at all the facts that were actually before the lower court judge, and looked at the key evidence and the general nature and circumstances underpinning those written and verbal representations made over a nine and a half year period.

In regards to point 2, the granting of relief, the Court of Appeal determined the quantum of relief using its broad discretion to grant relief via equitable compensation and did so keeping in mind the impact on any third parties.  I would like to make a point that there is an alternative legal argument in regards to constructive trust and unconscionable conduct.

FRENCH CJ:   Well, that was not breached in this case.

MS VAN DYKE:   Well, that is right, however, whilst the Court of Appeal found that the proprietary estoppel claim succeeded it was therefore not necessary to make findings under the unconscionable conduct claim.

BELL J:   I think the primary judge took the view that there was really very little distinction between those two claims.

MS VAN DYKE:   Can I make the point that while the Court of Appeal did find that there was little distinction, the facts found by the Court of Appeal would also support a conclusion of unconscionability in accordance with the law around joint undertakings, as in the Muschinski Case, and so if the applicant is successful today in gaining an appeal to the High Court, I intend to file a notice of contention or cross‑claim seeking to advance this unconscionable conduct claim.

So, ultimately, I believe the applicant is hoping that the High Court will rehear the case at a factual level and come up with a different outcome on both points.  Based on similar decisions, from my perspective, there is no undermining of legal principles and no public interest component to warrant an appeal to the High Court.  Thank you.

FRENCH CJ:   Thank you, Ms Van Dyke.

We will not need to hear from you, Mr Hutley.  There will be a grant of special leave.  Now, Ms Van Dyke, you have indicated you have counsel who was not here today; are you likely to be represented at the hearing of the appeal?

MS VAN DYKE:   Yes, he is likely to be available.

FRENCH CJ:   That is good.  All right, thank you.  Well, the estimate of half a day to a day.  Yes, all right, there are directions as to a timetable for filing a notice of appeal and the subsequent submissions and, Ms Van Dyke, if you would draw that to your counsel’s attention?  Thank you.

MS VAN DYKE:   Thank you.

MR HUTLEY:   If the Court pleases.

AT 9.50 AM THE MATTER WAS CONCLUDED