Sutton v Preece
[2014] NSWSC 1457
•24 October 2014
Supreme Court
New South Wales
Medium Neutral Citation: Sutton v Preece [2014] NSWSC 1457 Hearing dates: 24 and 25 June 2013 (with written submissions, the last of which were filed on 7 September 2013) and 24 October 2014 Decision date: 24 October 2014 Jurisdiction: Equity Division Before: Lindsay J Decision: (1) Judgment for the plaintiff in the sum of $800,000, together with pre-judgment interest (under the Civil Procedure Act 2005 NSW, s 100) calculated from 1 July 2010.
(2) Order that the defendant's cross claim be dismissed.
(3) Order that the defendant pay the plaintiff's costs of the proceedings (including the cross claim) on the ordinary basis.
Catchwords: PROCEDURE - Supreme court procedure - New South Wales - Jurisdiction and generally - Jurisdiction to determine under s 73 of the Civil Procedure Act 2005 (NSW) whether, and on what terms, proceedings have been settled
CONTRACT - General contractual principles - Construction and interpretation of contracts - Agreement to settle litigation - Terms of agreement to settle litigation
FAMILY LAW AND CHILD WELFARE - Property and maintenance of parties - General - Maintenance and alteration of property interests - proceedings under s 20(1) of the Property (Relationships) Act 1984 (NSW) - Disagreement between parties as to existence and nature of purported settlement of proceedingsLegislation Cited: Civil Procedure Act 2005 NSW, ss 73, 90, 100
Contracts Review Act 1980 NSW
Property (Relationships) Act 1984 NSW, ss 18(2), 20, 20(1), 44(1), 46, 47, 47(1), 47(1)(b), (d) (e), 47(2), 49, 50
Uniform Civil Procedure Rules, r 36.1Cases Cited: Rudi's Enterprises Pty Limited v J (1987) 10 NSWLR 568 at 575F-576B Texts Cited: - Category: Principal judgment Parties: Aletta Sutton (Plaintiff/Cross Defendant)
Glenn Preece (Defendant/Cross Claimant)Representation: Counsel:
Mr AM Gruzman (Plaintiff)
Mr RM Jefferis (Defendant), on 24-25 June 2013
Mr D Blackah (Defendant) for written submissions
Defendant, self-represented (24 October 2014)
Solicitors:
Shipton (Plaintiff)
Kenneth Harrison (Defendant), on 24-25 June 2013
File Number(s): 2008/277747
Judgment
In proceedings commenced by a statement of claim filed on 6 March 2008 the plaintiff applied for an order under s 20(1) of the Property (Relationships) Act 1984 NSW against her former domestic partner, the defendant, the father of their three children. Section 20(1) authorises the Court to make an order adjusting interests with respect to the property of the parties to a domestic (including, as here, a de facto) relationship.
The proceedings followed a tortuous path, before and after two days were devoted to a final hearing of them on 24-25 June 2013. On 5 May 2009, according to the defendant, the proceedings were settled, on terms subsequently disputed by the plaintiff. A substantial part of the hearing on 24-25 June 2013 was devoted to a resolution of that dispute.
The defendant contended, as he still contends, that discussions between the parties on 5 May 2009 resulted in a contract for settlement of the proceedings. The plaintiff disputed the existence of a contract but, it seems to me, the evidence adduced by her, if accepted, tends to suggest that there was an agreement between the parties capable of supporting, at least, an estoppel against the defendant.
Following the hearing of June 2013 the parties sought, and were granted, an extended opportunity to file written submissions. After judgment had been reserved, they (without the involvement of their lawyers) applied to the Court for the delivery of judgment to be "stayed" pending sale of a property ("the Lodge Lane property") by the defendant, the sale of which was hoped by both parties to enable the proceedings to be resolved.
When the proceeds of the sale were found to be less than anticipated by the defendant, and no consensual resolution of the proceedings appeared likely to emerge, it became necessary to allow the case to be reopened.
Delays in reaching a conclusion that that was necessary were occasioned by the pendency of unrelated bankruptcy proceedings brought against the defendant by his brother in the Federal Circuit Court. The defendant sought to have the current proceedings stood over pending a determination of the bankruptcy proceedings. Arising out of those proceedings, the plaintiff sought up to date information about the defendant's financial circumstances.
He has continued to profess an earnest desire to resolve his differences with the plaintiff, but it has proved impossible for the plaintiff to extract from him reliable, independently verifiable information about his financial circumstances, past or present.
During this last phase of the proceedings, when the steady realisation mounted that a consensual resolution was unlikely to emerge, the plaintiff sought, and was allowed, to amend her statement of claim to include a claim for estoppel based on representations allegedly made to her by the defendant on 5 May 2009.
The statement of claim having been amended, the defendant was allowed a further opportunity to test the evidence of the plaintiff and to advance his own case.
The bankruptcy proceedings evidently remain pending, as the defendant and his brother remain locked in disputation, but there is no impediment to the current proceedings being determined. In the interests of all concerned, they should be determined without further delay.
The defendant continues, earnestly, to profess a desire to have a consensual resolution of the proceedings.
Although, as it seems to me, the current proceedings can and should be brought to a conclusion, there is no impediment (outside the operation of the Bankruptcy Act 1966 Cth and similar constraints) to the parties having ongoing discussions designed to give effect to such, if any, agreement they may reach. As fate would have it, they retain a tie personified in three children born to them during the subsistence of their relationship: a son born in July 1996, now aged 18; another son born in June 1998, now aged 16 years; and a daughter born in March 2000, now aged 14 years.
There is no dispute about the existence of a de facto relationship (within the meaning of s 4 of the Property (Relationships) Act) or the approximate time of its commencement; but there is a dispute about when (within the meaning of s 18(1) of the Act) that relationship "ceased".
Although, as will be seen, I conclude that the parties' agreement to settle the proceedings should be enforced, this dispute involves a question of fact that should be resolved against the possibility of an appeal.
Each of the parties refers to their relationship as a "marriage", underscoring the depth of the commitment they apparently once felt for one another. They did "live together as a couple" within the meaning of s 4(1)(a) and (to paraphrase s 4(1)(b)) they were "not married to one another or related by family".
The parties are agreed that their relationship commenced when they commenced cohabitation in or about January 1994. They also agree that it "ceased" at the time of their final separation. They differ in that the plaintiff contends that separation occurred on 16 March 2006 and the defendant contends that it occurred on 31 December 2005.
If the defendant's contention is correct the two year limitation period on the making of an application for a s 20 order, for which s 18(1) of the Property (Relationships) Act provides, expired about two months before these proceedings commenced. If the plaintiff's contention is correct the proceedings were commenced about a week before the expiry of the limitation period.
If the proceedings were commenced out of time the plaintiff needs, as a prerequisite for the making of her s 20 application, a grant of leave under s 18(2) of the Property (Relationships) Act.
A grant of leave requires the Court to be satisfied, having regard to such matters as it considers relevant, that greater hardship would be caused to the plaintiff if that leave were not granted than would be caused to the defendant if the leave were granted.
Nothing of consequence turns on the difference between the parties as to their date of separation. As it happens, I accept the evidence of the plaintiff, and her sister, that separation occurred on 16 March 2006. In retrospect, that event may appear to have been inevitable in the light of a relationship breakdown reaching back, at least, to New Year's Eve 2005. However, the decisive event occurred on 16 March 2006 when the plaintiff acted upon her resolve to bring an end to the relationship by moving out of the family home. There was, to be sure, a twilight period in which the plaintiff organised a lease of alternative accommodation and the defendant, as fortune would have it, discovered the lease. However, the lights went out on the relationship only on 16 March 2006.
Even if, as the defendant contends, the parties' separation were to be dated from 31 December 2005 I would have granted the plaintiff the leave required to make her s 20 application out of time should that have been necessary. I am satisfied that, absent a grant of leave, the plaintiff would suffer substantial hardship insofar as she would be deprived of an opportunity to recoup her investment (including her financial investment) in the parties' joint endeavours.
In my assessment, a grant of leave, if necessary, would cause the defendant no material hardship. Apart from anything else, on 5 May 2009 he assured the plaintiff that, even if these proceedings were dismissed, he would do his best to look after her and the children until he had paid her out in a property settlement. He has yet to pay her out, or to meet his child maintenance obligations, but, for a time (about four years), he did allow her and the children to live "rent free" in the Lodge Lane residence, the title to which was then in his name.
A decisive twist in the proceedings arises from their procedural history. On 5 May 2009, on a date when the proceedings had been listed for directions and the parties were unrepresented, they jointly sent to the Court, via facsimile transmission, a letter in which they advised the Court that "[We] have both come to an agreement and would like this case dismissed."
Acting on that advice a Registrar of the Court, in the absence of the parties, on a date now agreed to have been 28 May 2009, ordered that the proceedings be dismissed. On 30 October 2012 an Associate Justice of the Court, at a time when the parties were both represented by counsel, made an "order", by consent, that the order of the Court made and entered on 28 May 2009 dismissing the proceedings by consent be set aside".
A central question for determination, in light of this procedural history, is whether any (and, if so, what) effect can, and should, now be given to such "agreement" as may have been made by the parties on 5 May 2009.
There is a disagreement between the parties about the terms of any such "agreement" and its effectiveness, if any.
Leaving aside typographical errors in the parties' pleadings, the defendant contends that:
(a) the "agreement referred to in the parties' letter of 5 May 2009 is enforceable as a contract.
(b) that agreement continues to bind the parties, despite the setting aside of the order pursuant to which the proceedings were dismissed on 28 May 2009.
(c) the parties' agreement constituted a "termination agreement" within the meaning of s 44(1) of the Property (Relationships) Act, enforceable in accordance with the law of contract as allowed by s 46 of the Act and, by virtue of s 47, a bar to the making of a s 20 order unless varied by an order made under s 49 or recognised, for the purpose of s 50, as having ceased to have effect.
(d) even if all the formalities for an enforceable termination agreement required by s 47(1) have not been met the Court should, pursuant to s 47(2), have regard to the terms of the parties' agreement upon a consideration of the plaintiff's s 20 application.
The plaintiff contends, and the defendant denies, that if (contrary to the plaintiff's primary contentions) the Court would otherwise find the existence of a "termination agreement" binding in contract, it was an "unjust contract" within the meaning of the Contracts Review Act 1980 NSW and (as allowed by the Property (Relationships) Act, s 46) the Court should, by an order made under the Contracts Review Act, decline to enforce it.
The defendant's endeavour to have the parties' agreement characterised as a "termination agreement" appears possibly, ultimately, to be a forensic manoeuvre designed, by engagement of s 47(2) of the Property (Relationships) Act, to have the Court determine the terms of the agreement and (assuming that it did not determine the fate of the proceedings) to take them into account on the making of any s 20 order made on the application of the plaintiff.
In any event, it is patently clear that any agreement made between the parties on 5 May 2009 (be it the version of the defendant or that to which the plaintiff deposes in answer to him) did not comply with the formal requirements of s 47(1)(b), (d) and (e) of the Property (Relationships) Act. The parties' letter to the Court refers to "an agreement", and it represents evidence that "an agreement" was made, but in no real sense can it be said that the parties made an agreement "that ... is in writing": s 47(1)(b).
Neither party to any alleged agreement had the benefit of a certificate from a solicitor evidencing the provision of legal advice as a preliminary to signing the agreement: s 47(1)(d). No such certificate was endorsed on, or annexed to, or accompanying any version of "the agreement": s 47(1)(e). But for the terms of the parties' letter to the Court, their agreement was oral.
The way that the parties approached the final hearing of the proceedings, albeit from different perspectives, the events of and incidental to 5 May 2009 inevitably became a focus for attention. Whether for the purpose of s 47(2) of the Property (Relationships) Act or otherwise, the discussions between the parties on and about 5 May 2009 and any agreement that might be gleaned to have arisen from them are relevant to both the operation of s 18(2) - so far as that provision may need to be engaged by the plaintiff - and a consideration of what is "just and equitable" for the purpose of s 20(1).
However imperfectly, the parties endeavoured in their own way to encapsulate in an informal agreement competing contentions about their respective contributions to the property, and welfare, of their family.
An appreciation of what happened on 5 May 2009 requires an understanding of contextual background:
(a) The defendant has a history of struggling in the conduct of a family business taken over by him from his mother (and conducted by him, successively, through two corporate identities that have passed through receivership) and in real estate dealings. He has not, to date, been a successful businessman. He has incurred debt in highly-geared business operations, skated on the edge of insolvency, routinely preferred some creditors over others and exhibited a tendency towards administrative disfunctionality.
(b) As confirmed by the manner of his giving evidence, there appears to be substance in the plaintiff's complaint that it is difficult to pin the defendant down to firm decisions. He appears to have a predisposition to remain light on his feet in the discussion, and implementation, of business dealings. He is, it seems, chronically unreliable.
(c) In the course of the parties' relationship the plaintiff did more than play the role of wife, mother, homemaker and the defendant's administrative assistant - although she did play each of those roles. From her own resources (courtesy of her side of the family) she contributed specific, capital sums to the property, and welfare, of the family: in 1996, $10,000; in 2003, separate sums of $20,000 and $127,250; and in 2005, $150,000. Those sums total $307,250.
(d) Of those moneys, the sums of $127,250 and $150,000 (a total of $277,250), in particular, were regarded by the parties as loans made by the plaintiff, to the defendant, repayable on demand. On 15 November 2005 they signed a single page, written agreement, that said precisely that.
(e) In the wake of their separation, the plaintiff regularly asked the defendant when he would accommodate her with a property settlement, including, but not limited to, repayment of the sum of $277,250. He, just as regularly, avoided any firm commitment.
(f) Notwithstanding their separation and the consequential cessation of their domestic relationship, the plaintiff continued as an employee of the defendant's company in an endeavour to preserve and contribute to the company's assets until a division of property could be effected between the two principals, either by negotiation or court order.
(g) By the statement of claim filed on 6 March 2008 the primary relief sought by the plaintiff was an order (pursuant to s 20 of the Property (Relationships) Act) "that the defendant pay to the plaintiff the sum of $800,000".
(h) On or about 17 April 2009 the plaintiff's then-solicitors filed a notice of ceasing to act on her behalf, and she continued to negotiate directly with the defendant to try to resolve the proceedings.
(i) In the lead-up to the directions hearing listed before the Court on 5 May 2009 the parties had several discussions regarding the division of assets and the further conduct of the proceedings.
(j) At about 9.00am on 5 May 2009 the parties, jointly, sent a fax to the Court noting that the proceedings had been listed for "9.15am today" and asking that the proceedings be kept in the list until noon so that they could both attend.
(k) Having experienced continuing difficulty in pinning the defendant down to any form of commitment, or precise negotiation, the plaintiff sent him an email (at about 10.07am on 5 May 2009) entitled "Settlement". Its text comprised the following:
"$300,000 in one sum in one year.
Pay my rent until this happens.
[Ex] Lodge Lane - move in July 31.
Car.
Signed by a solicitor".
(l) The parties subsequently engaged in a conversation that, on either version of events, ranged far and wide.
(m) At or near the end of that discussion, the parties sent their joint fax to the Court announcing that they had "come to an agreement and would like this case dismissed".
The parties give different accounts of what occurred in the discussions that took place between the transmission of their first and second letters to the Court.
In substance, the plaintiff says that she had a conversation with the defendant in the following terms and, having had that conversation, she believed that the defendant had promised to pay her the sum of $800,000 as sought in the statement of claim and, in that state of mind and relying upon a perceived promise of payment of $800,000, she agreed to dismissal of the proceedings by despatch of the second letter faxed to the Court.
The plaintiff said:
"OK, what's the offer? How are we going to resolve it? [Referring to their property dispute]".
The defendant said:
"Let's just dismiss the court proceedings. I can't think about how I'm going to pay you your money while I've still got the bank on my back. I'll pay you the money. I'll look after you. I've got enough court processes going on, I can't be seen to be in court with you as well. Just let me finish sorting the company out first and then I'll sort you out."
On the defendant's version of events, the gist of the parties' conversation was to the following effect. The plaintiff said:
"I don't want to go on with this case any more - what are we going to do?"
The defendant said:
"I will agree that you can live in the house [at Lodge Lane] for five years cost free, and I will pay to you $300,000 at the end of five years."
The plaintiff said:
"I agree but that is not enough money, I want more money than that.
The defendant said:
"I haven't got any more money, and I don't know what's going to happen to the two units [investment property]. They'll probably get sold."
The defendant interrupts his account of the conversation at this point to note that, at that time, the Commonwealth Bank had a "possession order" on all his properties. That was, on each party's version of the conversation, a very material factor. The defendant was endeavouring to extract himself from his obligations to the bank, and was asking that the plaintiff give him time to achieve that.
The defendant says that, after continuing argument, the plaintiff agreed to his proposal, in the context of repeated exchanges between them in which he told her, "Whatever happens I will pay you the $300,000 at the end of the five years", and they had an exchange to the following effect:
The defendant said:
"If I can help you then [at the end of five years] I will contribute more, if I can, and I will put it in a trust for the kids."
The plaintiff said:
"You better".
In cross examination, both parties adhered to the substance of their respective versions of this conversation.
With the passage of time the defendant, on his version of the agreement made by the parties on 5 May 2009, could not (in these proceedings or, at least, in fresh proceedings) reasonably now resist a judgment for $300,000. Five years since 5 May 2009 have now expired.
The defendant invites the Court to calculate the five year period from the date (in January 2010) that the plaintiff entered into possession of the Lodge Lane property; but that invitation cannot be accepted. On his own evidence, he agreed to pay the sum of $300,000 at the end of five years" ... "whatever happens". That agreement, if made in those terms, set time running from the time the agreement was made, not some future time.
After 5 May 2009 the parties appear to have called a halt to hostilities for a time. The defendant and his company continued to struggle financially.
In a separate transaction, but one which indicates the extent to which the plaintiff sought to aid the defendant, the plaintiff's mother lent the defendant $200,000 on 14 December 2009. By a letter bearing that date signed by the defendant, and counter-signed by the plaintiff's mother, the defendant acknowledged that the loan was to be repaid by 31 July 2010 and in the event of no timely repayment, "a property must be sold by [the defendant] to repay the loan".
The loan has not yet been repaid. At the time of the initial hearing of the current proceedings, the plaintiff's mother had sued the defendant in debt, in the District Court, and, in giving evidence at that hearing, he indicated an intention not to defend the proceedings save as to the amount of interest payable on the debt. The evidence does not permit me to say whether the mother has obtained a judgment. However, she clearly has not been repaid. Affidavits of this year, since filed on either side of the current proceedings, record the debt as remaining unpaid. In final submissions today, the defendant acknowledged that he has not paid the debt.
In January 2010, significantly after the plaintiff's mother had provided the defendant with loan funds (on 15 December 2009) and the defendant's company emerged from a period of receivership (on 23 December 2009), the plaintiff and her three children moved from rental accommodation into the defendant's investment property at Lodge Lane. The defendant says that the move was a step taken in performance of the agreement of 5 May 2009. More likely, however, the plaintiff is correct in saying that, needing accommodation and seeing that (as a consequence of tenants having been evicted during the company's receivership and preparations for a forced sale in reduction of the company's debts) was vacant, she simply took advantage of the property's availability to move in.
I do not regard either the plaintiff's taking up residence in the Lodge Lane property in 2010, or her agreement to vacate the property in 2014 to allow it to be sold, as indicative that the defendant's version of evidence on 5 May 2009 should be preferred over that of the plaintiff.
In February 2011 liquidators were appointed to the defendant's company on the application of the Australian Taxation Office.
The defendant incorporated another company, with a similar name, and utilised the new company to operate the same business (of manufacturing scuba diving equipment and spear guns, fans and life support valves) that was formerly conducted by the earlier company.
The plaintiff continued in employment for the new company, under the direction of the defendant until June 2011. At that time, the personal relationship between the parties having broken down, she resigned.
In fits and starts, the current proceedings were reactivated, and following the order of 30 October 2012 setting aside the order for dismissal of the proceedings, the parties resumed preparation of the proceedings for a contested, final hearing. The agreement of the parties to litigate, in the current proceedings, the effect, if any, of their agreement of 5 May 2009 for dismissal of the proceedings is consistent with the jurisdiction conferred on the Court, by s 73 of the Civil Procedure Act 2005, to determine disputes about whether proceedings have been settled. Given the need to litigate the plaintiff's claim for an order under s 20(1) of the Property (Relationships) Act 1984 in the event of a finding that the proceedings had not been settled, the proceedings provided a convenient structure for the agitation of all questions in dispute.
The contest between the parties as to what was said, and agreed, by them on 5 May 2009 should be resolved, in my assessment, in favour of the plaintiff. Generally, I prefer her evidence over that of the defendant. He may not be consciously dishonest, but he is intuitively inclined to tailor statements to serve his own ends, and he is generally unreliable. His evidence about the events of 5 May 2009 appears, to me, to be an opportunistic reconstruction of events by reference to the plaintiff's exploratory email of 10.07am. It is not in his nature to have made an express, precise monetary offer (whether of $300,000 or any other amount) tied to a specific timeframe, even one five years distant. His object was, and appears to remain, focussed squarely upon buying time in keeping creditors (one of whom, in a different guise, is the plaintiff) at bay. She, on the other hand, was focussed upon getting a property settlement, including but not limited to, repayment of the $277,250 specifically lent to the defendant. He knew she had claimed $800,000 when he assured her he would pay her "the money" if permitted time, free of the proceedings, to re-order his affairs. Objectively, $800,000 is the amount he should be taken to have agreed to pay.
To the extent that she has accommodated his ongoing delays she has been driven by a perception of necessity. She was, in May 2009, a single mother with three children at school receiving no child support or maintenance from the defendant, and owning no property. She had a strong motivation to recoup something from her relationship with the defendant in the form of a property settlement.
I accept her version of the parties' discussion of 5 May 2009. I accept her evidence that the defendant did not expressly state the amount of money he would pay her, and I reject his evidence that he specifically proposed that he would pay her $300,000. A promise by the defendant to pay $300,000, at the end of five years, without provision of security would have been no promise at all. In bare financial terms, she had contributed more than that amount to the parties' joint property. And her contributions to the property, and welfare, of the family had been significantly greater.
Given that the parties' discussions were focussed upon dismissal of proceedings in which the plaintiff's prime claim was for an order that the defendant pay her $800,000, I find as a fact that the plaintiff believed, that it was reasonable for her to believe, and that an objective bystander would also have taken the defendant to have intended, that his promise that he would pay her "the money" was a reference to the amount of $800,000. I find, further, that the defendant was content to allow the plaintiff, in this state of mind, to submit to an order for dismissal of the proceedings and, more importantly for him, acquiescence in an indefinite deferral of payment of money to her, allowing him a reasonable time, and scope, to re-order his affairs.
My impression of the relationship between the parties at the time of their discussions in May 2009, and of the terms of those discussions, is that, they were in earnest about the arrangement being made for a settlement of property. I accept, as the defendant contends, that, objectively, each of the parties intended their agreement (however it might be construed) to affect their legal relationship.
It was not unusual for them to have engaged in direct, personal settlement discussions without the involvement or supervision of lawyers, even during the course of a lawyer's retainer. Both parties had had legal representation in the proceedings before May 2009. Indeed, as has earlier been noted, during the course of the proceedings before me, at a time when the plaintiff was, but the defendant was not, represented, they jointly applied to the Court (without involvement on the part of the plaintiff's lawyers) to have publication of a reserved judgment "stayed" so as to facilitate ongoing settlement discussions. Although the outcome of those most recent discussions fell short of a consensual resolution of the proceedings, the course of the proceedings (including their "stay" application) demonstrates that direct settlement discussions, intended to effect the parties' legal relationship, are part of their modus operandi.
I am satisfied that the parties did reach an agreement to settle the proceedings on 5 May 2009, not on the terms for which the defendant contends but on those for which the plaintiff contends. I am satisfied that they agreed that, in consideration of the dismissal of the plaintiff's proceedings and her agreement to allow the defendant a reasonable time within which to reorder his affairs, the defendant would pay her, at the expiration of a reasonable time, the amount of $800,000.
Although she has formulated her claim in terms of principles of estoppel, I have been bound to consider the events of 5 May 2009 in terms of contract law because of the defendant's formulation of his case in contract. I agree with him as to the existence of a contract. I differ from him in his formulation of the terms of the contract.
The obligation of the Court (confirmed by both s 90 of the Civil Procedure Act and UCPR r 36.1) is to give such judgment or to make such order as the nature of the case may require. In these proceedings, that obligation translates into a judgment for the plaintiff, in contract, in the sum of $800,000 together with a statutory award of pre-judgment interest.
If I am incorrect in finding the existence of a contract, I would, nevertheless, find that: the parties were in substantial agreement about what was in store for the plaintiff following dismissal of the proceedings; the defendant represented to the plaintiff that he would, within a reasonable time, pay her a lump sum of $800,000 following dismissal of the proceedings; she acquiesced in dismissal of the proceedings, and in his subsequent endeavours to re-order his affairs, relying upon that representation and his constant reassurance that he would look after her and their children; as he intended, she believed that he would pay her the sum of $800,000 if she acquiesced in dismissal of the proceedings and allowed him time to re-order his affairs; were the defendant to be permitted to resile from his representation that he would pay her $800,000 within a reasonable time, she would suffer substantial detriment; it would be unconscionable for the defendant to resile from his representation; and he should be held estopped from doing so.
Whether analysed in terms of contract, or estoppel, the nature of the case requires that there be a judgment for the plaintiff in the sum of $800,000, with pre-judgment interest.
The question of what should be held to be a "reasonable" allowance of time for the defendant to re-order his affairs is to be decided at the point where a reasonable lapse of time is said to have occurred, rather than at the time of contract: Rudi's Enterprises Pty Limited v J (1987) 10 NSWLR 568 at 575F-576B.
The affairs of the defendant have continued to be conducted by him, in a muddled way, in a state of constant flux since May 2009. However, the agreement between the parties was that the defendant would be allowed a reasonable time, not an indefinite, illusory amount of time.
The defendant maintains, and I accept, that, although his businesses have suffered chronically from liquidity problems, they have generally enjoyed a positive net worth.
In nominating a date for the expiration of "a reasonable time" after 5 May 2009, and bearing in mind the purpose of allowing the defendant time was to allow him an opportunity to re-order his affairs, a significant fact is that his company came out of receivership in December 2009. With that in view, coupled with the defendant's admission that his business enjoyed a positive net worth, I find that the $800,000 he agreed (on 5 May 2009) to pay the plaintiff, within a reasonable time, fell due at the end of June 2010, six months after his company emerged from receivership, a period sufficient for him to arrange finance.
Accordingly, I find that the plaintiff is entitled to a judgment of $800,000, together with interest on that sum (under the Civil Procedure Act 2005 NSW, s 100) calculated from 1 July 2010.
Subject to any submissions that may be made about the form of the orders, the proceedings should be determined by orders to the following effect:
(1) Judgment for the plaintiff in an amount representing the sum of $800,000, together with pre-judgment interest under CPA s 100.
(2) Order that the cross claim be dismissed.
(3) Order that the defendant pay the plaintiff's costs of the proceedings (including the cross claim) on the ordinary basis.
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Decision last updated: 28 October 2014
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