White & Anor v Thompson & Ors - [2009] NSWSC 1103

No judgment structure available for this case.

CITATION: White & Anor v Thompson & Ors [2009] NSWSC 1103

HEARING DATE(S): 7 - 9 October 2009

JUDGMENT DATE :
15 October 2009

JURISDICTION: Equity

JUDGMENT OF: Windeyer AJ

DECISION: Proceedings dismissed with costs.

CATCHWORDS: EQUITY – Joint Venture – Fiduciary relationships – Proceeds of joint venture used to pay purchase price of property purchased by one joint venturer and his wife – Whether other joint venturers could claim that property held as a joint venture asset. - ESTOPPEL – Other proceedings determined in which the purchase moneys treated in the joint venture accounts as a drawing by one joint venturer recognised as such in the partnership accounts – Whether plaintiffs estopped from making proprietary claim – Whether if both claims for debt and proprietary interest made plaintiffs would have to elect for one and the other would merge in judgment with one elected – Whether addition of additional party as defendant who was not a party to accounts proceedings bore on the estoppel.

CATEGORY: Principal judgment

CASES CITED: MCC Proceeds Inc v Lehman Bros International (Europe) [1998] 4 All ER 875
Morris v Wentworth-Stanley [1999] 2 WLR 470
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Reichel v Magrath (1889) 14 App Cas 665
Rippon v Chilcotin [2001] NSWCA 142

PARTIES: Julian John White (P1)
Romeo Medina Libut (P2)
Byron Ward Thompson (D1)
Jennifer Joy Thompson (D2)
Paul Weston as Trustee of the Bankrupt Estate of Byron Ward Thompson (D3)

FILE NUMBER(S): SC 4817/08

COUNSEL: In person (P1&2)
N A Cotman SC (D1&3)
G A Rich (D2)

SOLICITORS: Self represented (P1&2)
Brown & Partners (D1&3)
Peninsula Law (D2)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER AJ

THURSDAY, 15 OCTOBER 2009

4817/08 JULIAN JOHN WHITE & ANOR v BYRON WARD THOMPSON & ORS

JUDGMENT

1 HIS HONOUR:

Outline

2 The question for decision is whether or not the plaintiffs are entitled to an order that certain land at Somersby purchased with the proceeds of sale of a property at Seaforth, the subject of a joint venture between the plaintiffs and Mr Thompson, the first defendant, should be sold and the proceeds brought to account in adjusting accounts between the joint venture parties. Those accounts have been settled by order of Biscoe AJ made on 29 February 2008.

3 The answer to the question is No for the reasons I will now set out.

History of Proceedings

4 Number 2685/03 - In this action the first defendant (Thompson) was plaintiff and the plaintiffs in this action (White and Libut) were defendants. The substantial issue was whether there was a joint venture for the purchase and development and sale of the Seaforth property and if so, the quantification of claims resulting from such finding.

5 Number 5929/03 – The plaintiff in this action was Aerated Concrete Design & Construction Pty Ltd and the defendant, Mr Thompson. As was explained in the judgment of the Court of Appeal to which I will come, this was really a defensive action for a claim which would arise if the joint venture claim failed as the plaintiff was claiming for building work done on the Seaforth property.

6 These two actions were heard together by Gzell J. He ordered that issues other than those related to quantification matters be heard prior to quantification matters. The quantification matters were as follows:

7 Gzell J gave judgment on 8 December 2005 and made orders on 15 December 2005. He made the following declarations:

Declares that

8 In December 2002 Mrs Thompson had entered into a contract to purchase the Somersby land for $780,000. She had paid the deposit of $39,000 out of joint venture funds. The balance of the purchase moneys was also paid out of joint venture funds. White and Libut placed a caveat on the Seaforth property claiming an interest in it as joint venturers. Mr Thompson, in whose name the property was registered, had entered into a contract to sell the property. Thompson sought to have that caveat withdrawn to enable the sale to proceed with the sale moneys or part of them to be applied to the balance purchase moneys for Somersby. As a result of decisions on interlocutory hearings before Barrett J and Hamilton J orders were made that the caveat on Seaforth be withdrawn upon payment of $1 million into a controlled moneys account and upon making an injunctive order restraining Thompson from selling or disposing of any interest in the Somersby property until further order. That later order was made by Hamilton J on 13 May 2003. By this time Mrs Thompson had novated her rights as purchaser under contract of sale and purchase of Somersby to herself and her husband as joint tenants.

9 Number 40013/06 – This was an appeal to the Court of Appeal from the decision of Gzell J. The Court of Appeal set aside declarations 1 and 2 made by the trial Judge but otherwise dismissed the appeal by order of 12 December 2006.

10 Number 1563/06 – In this action the plaintiff was White and the defendants Thompson and his wife, Mrs Thompson. The sole purpose of these proceedings was to obtain an order extending the operation of a caveat placed by White and his wife on the Somersby land and for an order restraining the defendants from making any dealings in connection with that land. After a number of extensions for a limited period I made an order by consent on 4 May 2006 that the operation of the caveat be extended until further order of the Court. No substantive relief was ever sought in those proceedings. However, on that day I ordered that the proceedings 1563/06 “be further heard in connection with proceedings 2685/03”. This order appears to have been overlooked. Without being reminded of it, I said at the conclusion of submissions that if the plaintiffs failed in the present action an order should be made for withdrawal of caveat AC155596 and I propose to do that.

11 Gzell J had made orders that the accounting issues he identified be referred to an expert referee. For some reason that order was vacated and it fell to Biscoe AJ to determine those issues which he did after a six day hearing in December 2007. He made orders and declarations on 29 February 2008 after further submissions, those orders and declarations being as follows:

12 The notice of motion referred to in order 5 of the orders of Biscoe AJ is important in the present proceedings. It sought in paragraph 3

“that the Final orders in the matters before the Court include for Enforcement Orders with regard to the Somersby property including transfer of the said title”

13 In the accounting hearing before Biscoe AJ the parties had provided a document which set out their positions as to the balance sheet of the joint venture and as to their entitlements from and liabilities to the joint venture. Many of these items were agreed. A copy of the document is annexed to the judgment of Biscoe AJ. It was necessary for him to determine only those items where there was a disagreement and he did that. One part of the document is headed:

“Money paid to purchase Somersby from sale funds - $774,709”

14 There was also shown as a contribution by Thompson to the joint venture a sum claimed by White and Libut to be $457,913 and by Thompson to be $459,514. The difference does not matter here. It is accepted that the figure was the amount of $285,000 which was treated and determined in the proceedings before Gzell J and Biscoe AJ to be a contribution by Mr Thompson to the joint venture and interest on that sum. The $285,000 was applied towards the purchase price of $550,000 for the Seaforth land. Whether this was a payment by Mrs Thompson entitling her to an interest in Seaforth by was of resulting trust or a loan by her to her husband to enable him to pay that amount towards his share of the joint venture is a matter which has to be decided. In the earlier proceedings the $285,000 was taken as being a contribution by Mr Thompson the moneys having come to him from his wife. That is binding as between him and the plaintiffs here but that finding may not bind Mrs Thompson.

The present proceedings - 4817/08

15 In this action the plaintiffs by further amended statement of claim seek the following orders plus orders for costs.

“1 A Declaration that the land known as 710 Wiseman’s Ferry Road, Somersby, being the property comprised in folio identifier A/409546, is an asset of the Seaforth joint venture which property comprised folio identifier 276/4889 & was between Messrs Thompson, first defendant, White, first plaintiff and Libut, second plaintiff, the terms of which are referred to in two judgments of this Court, being Thompson v White [2005] NSWSC 1257 and Thompson v White [2006] NSWCA 350.

2 A Declaration that the registered proprietors of the land known as 710 Wiseman’s Ferry Road, Somersby, being the property comprised in folio identifier A/409546, hold it as trustees for the Seaforth joint venturers and joint venture contract agreement accounting.

3 A Declaration that the Consequential Accounts Ordered by Acting Justice Biscoe dated 29 February 2008 did not include the beneficial ownership of the Somersby property.

4 An Order that the property be sold, with the plaintiffs having liberty to apply forthwith, for the making of orders for the manner of sale, pursuant to UCPR 27.2.

5 An Order that the amount of money resulting from the sale of the Somersby property be credited to the $561,571.00 Acting Justice Biscoe declared owing by Mr Thompson to the Seaforth joint venture.

any remaining

16 The plaintiffs have appeared in person which has caused some problems leading up to and during the trial. The pleading is a difficult document making many allegations which could not be substantiated and including many paragraphs which are not pleadings of facts or relevant facts. The defendants did not object to this and dealt with it is so far as possible in their defences.

17 In summary the case of the plaintiffs against Mr Thompson was that the proceeds of sale of Seaforth were funds of the joint venture; that a substantial portion of those funds was channelled into the Somersby property; that Mrs Thompson was aware of this; that as the whole of the purchase price for Somersby can be traced to the proceeds of the Seaforth land then Somersby should be treated as a joint venture asset and sold with the proceeds going to the joint venture. That at least would be the logical result although what is sought in the paragraphs set out is somewhat different.

18 So far as the claim is made against the interests of Mrs Thompson in Somersby is concerned, it is alleged:

(a) that she was at all times aware of the joint venture;

19 The defence of Mr Thompson insofar as it appears by pars 16 – 19 to challenge the finding of Gzell J on the issues before him has been met by a reply pleading estoppel. As I will explain it is now accepted that Mr Thompson is bound by that decision. However, pars 27 – 32 of the defence of Mr Thompson are as follows:

“27 At all material times, in the proceedings between the parties, White and Libut have claimed that Thompson is or may be on a proper accounting for the joint venture, indebted to them and/or other companies and entities, by reason of the alleged joint venture dealings, including the payments referred to in the claim herein, and have obtained judgment for an amount that includes taking into account each of the amounts referred to herein as distributions of joint venture property or the repayment of monies advanced or contributed by Thompson in the acquisition and improvement of the Seaforth land or in relation to the said joint venture.

28 White and Libut obtained judgment on the basis aforesaid against Thompson.

29 By the conduct aforesaid, White and Libut adopted the transactions of payment as transactions of the joint venture to be taken into account on a joint venture accounting as repayment of monies, drawings or distribution of profits by Thompson.

30 By reason of the conduct aforesaid, White and Libut are estopped from commencing or prosecuting the proceedings herein as proceedings res judicata by reason of the judgment and by reason of the fact that no claim that could have been made was made in any proceedings in relation to a claim of an interest in the Somersby land by trust or otherwise.

31 By the conduct of the proceedings and the judgment obtained on the basis aforesaid, White and Libut elected to affirm the payments referred to in the Statement of Claim herein as repayment of monies advanced or contributed by Thompson or as distributions to Thompson of joint venture property, and obtained judgment accordingly.

32 By reason of the conduct aforesaid, White and Libut are estopped from alleging herein a right inconsistent with the right on which judgment has been obtained.”

20 In a reply to this the plaintiffs have claimed that they have always sought a proper joint venture accounting “such that all frozen assets of the Seaforth joint venture could be properly distributed. Such has at all times included both the controlled moneys account and the Somersby property”.

21 The defence of Mrs Thompson is somewhat different to that of her husband. Although she was not a party to the earlier proceedings she relies on the same estoppel as her husband. At the same time, although the defence is not really clear, she relies on and her evidence was solely directed to the claim that she contributed $285,000 to the Seaforth purchase price and although she does not claim a proportionate share in the proceeds of sale of Seaforth, she claims that the figure allowed as a capital contribution on the settlement document of $457,913 represented a debt due to her from the joint venture.

22 In view of the considerable confusion as to facts and issues apparent when the hearing commenced and having regard to the difficulties of the plaintiffs as they were self represented, I suggested it might help if the parties prepared a statement of agreed facts as this might help at least to resolve the issues which had to be decided. This was successful at least to some extent, that statement of facts being as follows:

“1 Joint venture was found to have existed in relation to purchase, development, and sale of the property at Seaforth ( judgment of Gzell J dated 8 December 2005 in proceedings No 2685 of 2003, consolidated with 5929 of 2003).

2 The Seaforth property was purchased in the name of Byron Ward Thompson using $285,000, plus an Advance Bank loan account in the name of Mr Thompson.

3 The joint-venture borrowed monies from third parties or from the venturers for the development which money in fact, though said to be unknown to White and Libut at the time, was banked into and paid from an account, which was the personal bank account of Byron Ward Thompson and Jennifer Joy Thompson into which account was also deposited and withdrawn their personal funds and money for personal or non-joint venture purposes. Joint venture costs were also met from credit cards in the name of Mr and Mrs Thompson, though said to be unknown to White and Libut at that time.

4 The Seaforth property was developed over time.

5 Jennifer Joy Thompson contracted to purchase a property at Somersby in her own name without the knowledge or consent of White or Libut.

6 $39,000.00, being a deposit for the purchase of a property at Somersby, was paid by Jennifer Thompson from the joint bank account, that amount being found by Biscoe JAJ [sic] to have been funded by JV funds (see Thompson loan account calculation) without knowledge of White and Libut.

7 Jennifer Thompson later novated one-half interest in the contract for purchase to Byron Ward Thompson.

8 The Seaforth property was sold by Byron Thompson when developed.

9 Julian White and Romeo Libut lodged caveat on the property at Seaforth, which caveats were withdrawn. ( pursuant to Orders of Hamilton J made on 9 May 2003 in the proceedings No 2685 of 2003 commenced by Thompson )

10 The Seaforth sale was eventually settled under orders of the Supreme Court in 2003 , expressly to permit the settlement of the Somersby purchase pursuant to orders of Hamilton J.

11 The Somersby purchase was completed using money from the Seaforth settlement.

12 Julian White and his wife lodged caveat over property at Somersby in 2006.

13 Byron Thompson made an application to remove the caveat and filed a Lapsing Notice.

14 Julian White and Mr Libut by Motion in Thompson’s proceedings sought to maintain the caveat and were unsuccessful for want of an effective undertaking ( Orders of His Honour Barrett J made on 2 March 2006 in the proceedings No 2685 of 2006 ).

15 Julian White took further proceedings against Mr and Mrs Thompson to maintain the caveat, which eventuated in consent orders of extending the Caveat on Somersby property ( orders dated 20 April 2006 and 4 May 2006 in proceedings No 1563 of 2006 )

16 Proceeds of sale of the Seaforth property, net of the Somersby purchase price, were paid to controlled money account controlled by solicitors for the parties.

17 In trial proceedings there was a finding that the relationship between Mr Thompson, White and Libut was that of joint venturers ( judgment of Gzell J dated 8 December 2005 in proceedings 2685 of 2003, consolidated with 5929 of 2003; Court of Appeal judgment dated 12 December 2006 in proceedings No 40013 of 2006 ). Mrs Thompson was not a party to those proceedings.

18 [REMOVED]

19 The last-mentioned matter was referred to acting [sic] Justice Biscoe for an accounting for the joint venture ( proceedings No 2685 of 2003 ) and other claims of debt ( 5929 of 2003 ).

20 Mr White sought orders in relation to the Somersby land in proposed short minutes before Biscoe AJ and by a motion in those proceedings.

(a) $198,735 to Australian Hebel House Superannuation Fund.

(b) $338,874 to Aerated Concrete Design and Construction Superannuation Fund.

(c) $418,426 to Aerated Concrete Design and Construction Pty Ltd.

(d) $301,000 to Romeo Libut.

(e) $505,500 to Julian John White.

2 Declaration that, subject to the provisions of the Bankruptcy Act 1966 (Cth), Byron Ward Thompson owes, and order that he pay, the said joint venture the sum of $561,571 inclusive of interst.

3 Declaration that the profit made by the said joint venture was $855,557.

4 Subject to the provisions of the Bankruptcy Act 1966 (Cth) order that Byron Ward Thompson pay the costs of the other parties.

23 After this was done at page 38 of the transcript I set out what I understood to be the issues and there was no dissention about this. In brief those issues were:

(a) Whether Mrs Thompson had an interest in the Seaforth property and if she did, the extent of that interest. If she had an interest, the extent of her interest in the Somersby property and the extent (if any) to which it should be held to be an asset of the joint venture.

Estoppel

24 There can be no doubt that the two parts of the action in the proceedings before Gzell J and Biscoe AJ were argued and determined on the basis of that the payments from the proceeds of sale of Seaforth so far as they were applied to the Somersby property should be treated as payments to Thompson from the joint venture. They were accounted as such and when taken into account gave rise to a liability in Thompson to the joint venture. It would be no different from a partner overdrawing entitlements being found in a suit for partnership accounts to be liable to the partnership to the extent of the overdrawn account.

25 The question is whether, having proceeded on that basis and accepted the accounts were to be taken on that basis, the plaintiffs can in another action seek to have the land brought to account as a joint venture asset. If that can be done there can be no doubt there is a possibility and really a certainty of conflicting judgments. To some extent the plaintiffs seek to overcome this problem by seeking what would be a charge over the proceeds of sale of Somersby sufficient to enable the debt Thompson owes to the joint venture to be paid but at the same time requiring any surplus to be added to the controlled moneys account and thereafter to be credited to the joint venture. So far as the first point is concerned, what this really amounts to is an attempt to get security for a judgment debt owed by one venturer to the joint venture partners. So far as the balance is concerned, it would require rewriting of the joint venture accounts.

26 The plaintiffs stated many times that they had attempted to bring the claim to include the Somersby land before Gzell J and Biscoe AJ but that those judges had said that this was not a matter before them. Nevertheless, Acting Justice Biscoe had allowed a motion to be filed and ultimately Mr White said the plaintiffs accepted a statement made by Palmer J that separate proceedings should be commenced.

27 I do not think that this is an answer. The accounting action treated the payments towards the Somersby as raising a debt to the extent to which those payments combined with others resulted in an overdrawing. Had an alternative claim been made to have that property included as a joint venture asset then prior to any judgment the plaintiffs would have been required to elect which way they wished to go. Had they sought the judgment which in fact they have obtained they would not have been able to seek judgment on a joint venture claim as there could have been different results. Any rights that they had in connection with the joint venture claim would have merged in the judgment. They are estopped from bringing the joint venture claim here at least as against Mr Thompson.

28 Although the decision of Justice Brennan in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 was founded on different reasons from those in the joint judgment he nevertheless set out clearly the basis of election and merger. The following passage commences on page 661:

United Australia Ltd v Barclays Bank Ltd

Mahesan v Malaysia Housing Society

United Australia Ltd v Barclays Bank Ltd

29 It is necessary to deal with the claim against Mrs Thompson separately. She was separately represented and so the claim might be thought to be a claim separate from the claim which cannot be brought against her husband. Nevertheless the difficulty about that is that the claim for relief is made in respect of the whole of the Somersby land not just part of it and this is relief which cannot be given.

30 It is I think necessary to set out certain additional facts relevant to this part of the claim. Mr and Mrs Thompson had owned a house at Palm Beach. Mr Thompson got into financial difficulties and the house was sold in 1997. After payment out of secured and unsecured liabilities there was a surplus remaining of $285,000. Mrs Thompson said that it was agreed at the time of the sale that Mrs Thompson was entitled to the whole of the surplus and would have been entitled to more if the surplus had been greater. In other words, a substantial part of the sale price was paid out to discharge debts of her husband.

31 The Seaforth property was purchased in 1997 and $285,000 went towards the purchase. Although Mrs Thompson says that she provided that money by way of capital contribution to purchase, it was treated in the accounting as a contribution by Mr Thompson although it was always acknowledged that it came from his wife.

32 In 2000 Mr and Mrs Thompson entered into what was described as a Deed of Agreement and Trust which is dated 18 April 1997. Mrs Thompson said that was the date of the verbal agreement in the same terms and that was why it was backdated to that date. The recitals and operative clauses of the deed are as follows:

“A In February 1997 Byron Thompson & Jennifer Thompson’s residence at 8 Ebor Rd. PALM BEACH was sold for $785,000.00 to extinguish Byron Thompson’s business debts.

B It was agreed that all remaining monies belonged to Jennifer Thompson as part of her rightful fifty percent ownership of said Palm Beach property as the wife of Byron Thompson.

C The remaining funds of $285,000.00, notably less than Jennifer Thompson’s rightful fifty percent of said property, were dutifully placed into Jennifer Thompson’s personal Advance bank account at Neutral Bay.

D Byron Thompson further agreed that Jennifer Thompson was still entitled to the full balance of her fifty percent ownership of said property to be paid by Byron Thompson when affordable in the future.

NOW THIS DEED WITNESSES THAT

1 Jennifer Thompson agrees to provide Byron Thompson with $285,000.00 of her own monies in order that Byron Thompson may purchase a block of land at 65 Ellery Parade SEAFORTH.

2 The ownership of said portion of land Lot 276 is to be held in trust on Jennifer Thompson’s behalf by Byron Thompson.

3 Byron Thompson agrees to obtain a bank mortgage loan from the Advance Bank for $270,000.00 to pay the balance of the purchase price of $555,000.00 for said portion of land.

4 Jennifer Thompson is to maintain equitable ownership with associated rights allowing that at any time in the future Jennifer Thompson may place a caveat or mortgage upon the title of said property to protect her personal interests.

5 Byron Thompson affirms that he still owes Jennifer Thompson a further $107,500.00 as the balance of her fifty per cent share of said PALM BEACH property.

6 Byron Thompson further affirms that the agreed rate of interest on the aforementioned loan is 10 per cent per annum simple interest.”

33 Some of the evidence of Mrs Thompson as to the deed was untrue or at least inaccurate. Nevertheless it is clear that the deed was in fact recommended and drafted in part by Mr White. The important fact for present purposes is that Mrs Thompson does not claim she had a proprietary interest in Seaforth. Her evidence in her affidavit of 13 February 2009 is that her husband owed to her at the time of the purchase of Somersby $392,500 plus interest at 10 per cent from 18 April 1997 and that she was entitled to repayment of this by her husband. Paragraph 20 of her said affidavit is as follows:

“The Deed of Agreement and Trust stipulated that I was to be repaid this money when affordable in the future. I regarded my one-half unencumbered interest in the Somersby property as being paid for from moneys owed to me by my husband pursuant to the Deed of Agreement and Trust.”

34 None of this really conflicts with the facts found in the earlier proceedings upon which the accounts were based. When the Seaforth property was sold there were in fact funds available to pay the amounts due to Mrs Thompson and the other creditors declared by Biscoe AJ. As between Mrs Thompson and her husband she was entitled to those moneys. As between Mr Thompson and his co-venturers he had been credited with those moneys before being debited with the $774,709 purchase moneys for Somersby. While it is not an altogether easy question, I consider it likely that as a result of the deed which was known to Mr White, Mrs Thompson became a privy of her husband so far as her claim to benefit from Seaforth was concerned and as such became entitled to the benefit of the estoppel available to him. However, it is not at all clear that this defence was understood and pleaded and no submissions were really directed to it so I will not base my judgment on it. The second defendant does rely on estoppel and has pleaded an estoppel in paragraphs 25 – 31 of her defence which are as follows:

“25 In further answer to paragraph 24, Mrs Thompson says that in no cross claim or claim in proceedings between the parties in relation to the joint venture has a claim been propounded for an interest in the Somersby property against Mr Thompson or Mrs Thompson until the proceedings herein.

26 At all material times, in the proceedings between the parties, White and Libut have claimed that Mr Thompson is or may be on a proper accounting for the joint venture, indebted to them and/or other companies and entities, by reason of the alleged joint venture dealings, including the payments referred to in the claim herein, and have obtained judgment for an amount that includes taking into account each of the amounts referred to herein as distributions of joint venture property or the repayment of moneys advanced or contributed by Mr Thompson in the acquisition and improvement of the Seaforth land or in relation to the said joint venture.

27 White and Libut obtained judgment on the basis aforesaid against Mr Thompson.

28 By the conduct aforesaid, White and Libut adopted the transactions of payment as transactions of the joint venture to be taken into account on a joint venture accounting as repayment of moneys, drawings or distribution of profits by Mr Thompson.

29 By reason of the conduct aforesaid White and Libut are estopped from commencing or prosecuting herein as proceedings res judicata by reason of the judgment and by reason of the fact that no claim that could have been made was made in any proceedings in relation to a claim of an interest in the Somersby land by trust or otherwise.

30 By the conduct of the proceedings and the judgment obtained on the basis aforesaid, White and Libut elected to affirm the payments referred to in the claim herein as repayment of moneys advanced or contributed by Mr Thompson or as distributions to Mr Thompson of joint venture property, and obtained judgment accordingly.

31 By reason of the conduct aforesaid, White and Libut are estopped from alleging herein a right inconsistent with the right on which judgment has been obtained.”

35 It has been found as a fact that the money that came from Mrs Thompson was a contribution by Mr Thompson to the joint venture and has been credited to his account. It has been found as a fact that the drawings from the Seaforth property which went to Somersby were a distribution to Mr Thompson of joint venture moneys. I consider the plaintiffs are bound by those findings. It would be an abuse of process for the plaintiffs to make some claim to proprietary interest in the whole or part of the Somersby property when first, their accounting proceeded on a different foot and second, when at least the interest of Mrs Thompson in the property was purchased from moneys due to her as a debt from her husband which were credited to him in the joint venture accounts.

36 While a claim for interest in Somersby could have been brought as an alternative claim in the proceedings 2684/03 with the plaintiffs bound to elect between alternative remedies had that been done Mrs Thompson as joint registered proprietor would have had to be joined as a defendant. As any right to bring such a claim against Mr Thompson has now merged in the judgment obtained the plaintiffs ought to be estopped from bringing against Mrs Thompson a claim which if successful, would result in a judgment conflicting with that obtained. That would in my opinion be a clear abuse of process even though an additional party is involved. It is not an abuse in the nature of Reichel v Magrath (1889) 14 App Cas 665 as it is not the same case but it is a case which can no longer be brought against one defendant but which if it had been brought would have had to be brought against Mrs Thompson as well. The orderly administration of justice cannot allow this to be done. Cases where an estoppel has been found not withstanding an additional or new defendant has been involved include MCC Proceeds Inc v Lehman Bros International (Europe) [1998] 4 All ER 875; Morris v Wentworth-Stanley [1999] 2 WLR 470 and Rippon v Chilcotin [2001] NSWCA 142. The general principles in those cases as to abuse of process apply here.

37 I add that irrespective of estoppel the claim against the share of Mrs Thompson in the Somersby property would fail. The plaintiffs were well aware that the contribution of Mr Thompson to the purchase price of Seaforth came from Mrs Thompson. When funds were available she was entitled to repayment. The price of a one half interest in Somersby was less than the debt.

Conclusion

38 The proceedings should be dismissed with costs.

**********

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Citations

White & Anor v Thompson & Ors [2009] NSWSC 1103

Most Recent Citation

White v Thompson [2009] NSWSC 1266

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Statutory Material Cited

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Keet v Ward [2011] WASCA 139

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CITATION:	White & Anor v Thompson & Ors [2009] NSWSC 1103
HEARING DATE(S):	7 - 9 October 2009
JUDGMENT DATE :	15 October 2009
JURISDICTION:	Equity
JUDGMENT OF:	Windeyer AJ
DECISION:	Proceedings dismissed with costs.
CATCHWORDS:	EQUITY – Joint Venture – Fiduciary relationships – Proceeds of joint venture used to pay purchase price of property purchased by one joint venturer and his wife – Whether other joint venturers could claim that property held as a joint venture asset. - ESTOPPEL – Other proceedings determined in which the purchase moneys treated in the joint venture accounts as a drawing by one joint venturer recognised as such in the partnership accounts – Whether plaintiffs estopped from making proprietary claim – Whether if both claims for debt and proprietary interest made plaintiffs would have to elect for one and the other would merge in judgment with one elected – Whether addition of additional party as defendant who was not a party to accounts proceedings bore on the estoppel.
CATEGORY:	Principal judgment
CASES CITED:	MCC Proceeds Inc v Lehman Bros International (Europe) [1998] 4 All ER 875 Morris v Wentworth-Stanley [1999] 2 WLR 470 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Reichel v Magrath (1889) 14 App Cas 665 Rippon v Chilcotin [2001] NSWCA 142
PARTIES:	Julian John White (P1) Romeo Medina Libut (P2) Byron Ward Thompson (D1) Jennifer Joy Thompson (D2) Paul Weston as Trustee of the Bankrupt Estate of Byron Ward Thompson (D3)
FILE NUMBER(S):	SC 4817/08
COUNSEL:	In person (P1&2) N A Cotman SC (D1&3) G A Rich (D2)
SOLICITORS:	Self represented (P1&2) Brown & Partners (D1&3) Peninsula Law (D2)