Wolfe v Breasley
[2010] VCC 1988
•7 December 2010
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
Case No. CI-10-04712
| RICHARD WEBSTER WOLFE | Plaintiff |
| v | |
| GAIL NICOLE BREASLEY | Defendant |
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| JUDGE: | HIS HONOUR JUDGE SACCARDO |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 22 and 23 November 2010 |
| DATE OF JUDGMENT: | 7 December 2010 |
| CASE MAY BE CITED AS: | Wolfe v Breasley |
| MEDIUM NEUTRAL CITATION: | [2010] VCC 1988 |
REASONS FOR JUDGMENT
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Catchwords: Relationship Act – enforceability of agreement constituted by terms of settlement – uncertainty of terms – relevance of part performance – rescission by reason of repudiation.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr O Scoullar-Greig | Elliott Stafford & Associates |
| For the Defendant | Mr D Cole | Insiedels Solicitors |
| HIS HONOUR: |
1 On 26 August 2009, in the course of a case conference held in respect of proceedings brought pursuant to the provisions of the Relationships Act 2008 (“the first proceeding”), the parties to that proceeding, Richard Webster Wolfe (“Wolfe”) and Gail Nicole Breasley (“Breasley”), signed a handwritten agreement entitled “Terms of Settlement” (“the agreement”).
2 In this proceeding, Wolfe seeks:
(i) a declaration that the first proceeding has been settled in accordance with the terms of the agreement; (ii) an order for specific performance of the agreement; (iii) alternatively, damages on the grounds that the agreement was frustrated by the signing by Breasley of a notice to surrender one of the properties the subject of the agreement. 3 By way of defence, Breasley asserts:
(i)
that the agreement was, by its nature, so uncertain as to be incapable of being given effect;
(ii)
that the agreement was impossible to perform and has been frustrated by reason of that fact;
(iii)
that Wolfe, by his conduct, has repudiated the agreement, that Breasley has accepted the repudiation and the agreement is rescinded;
(iv)
that in the event that Wolfe is entitled to an award of damages, she is entitled to damages against Wolfe by reason of alleged loss suffered by her if the agreement is to be given effect.
4 The agreement is Exhibit A in this proceeding. It provides as follows:
“Terms of Settlement
Preamble:
1. The parties agree that the property situated at 19 Main Street Pascoe Vale is valued at $525,000.
2. The parties agree that the property situated at 17 Main Street Pascoe Vale is valued at the price it realises at auction.
3. The parties agree that the defendant’s superannuation is valued at $7,000.
4. The parties agree that the plaintiff’s superannuation will be valued at 30 June 2009.
5. The parties agree that for the purpose of negotiations the joint debts have been identified at $132,117 and yet to be proven.
Agreement:
a the parties agree that the nett value of their assets will be split on a
67.5% to the plaintiff and 32.5% to the defendant.Logistics:
(i) the plaintiff will transfer all of her right title and interest in 19 Main Street Pascoe Value to the defendant at his expense, but not until 17 Main Street has been sold and settled, and contemporaneously with the plaintiff receiving payment in accordance with paragraph (a) of this Agreement.
(ii) the property at 17 Main Street Pascoe Vale will be sold by auction either by the Sheriff or by the parties by an agreed real estate agency. If a dispute arises with respect to the reserve on the sale it will be resolved by
The balance of the sale of 17 Main Street to be held in the defendant’s solicitors’ trust account and to be distributed in accordance with paragraph (a) of this Agreement.
(iii) the plaintiff will retain her Superannuation entitlement.
(iv) the defendant will retain his Superannuation entitlement.
(v) upon each party providing evidence to the other of the debts identified in paragraph (5) hereof the parties will bear equal responsibility for the repayment of those debts and for the purpose of proof of the defendant’s debt to his mother, full records, including cheque records and cheque account bank statements from her will suffice.
(vi) The defendant indemnify the plaintiff against all debt, including mortgages, and outgoings as from the date of transfer of 19 Main Street from the plaintiff to the defendant.
(vii) All chattels and personal possessions that are currently in each parties’ possession will remain in their possession save for those items that have yet to be returned.
(viii) the defendant to transfer at her expense the title of the motor car, registration No. NYA 487 forthwith to the plaintiff.”
The Enforceability of the Agreement - Uncertainty
5 It can be seen that whilst the agreement within its preamble refers to:
• two properties, one at 19 Main Street (“No. 19”) and the other at 17 Main Street (“No. 17”); • the superannuation entitlement of both Wolfe and Breasley; • an amount of “joint debts”; the assets which are to be subjected to the apportionment to be undertaken pursuant to the agreement, namely 67.5 per cent in favour of Breasley and 32.5 in favour of Wolfe (“the apportionment”) are not specified.
6 Further, whilst within the “Logistics” section of the agreement:
(i) a mechanism is established for the sale of No. 17 and thereafter the distribution of the proceeds of the sale in accordance with the apportionment; (ii) Breasley, upon receiving the distribution of funds to which she is entitled by reason of the sale of No. 17, is required to transfer all of her right, title and interest in No. 19 to Wolfe at his expense; the agreement does not specifically call upon Wolfe to account to Breasley in
relation to the value of No. 19.7 Although it might be contended that the agreement intended that the apportionment was to be applied to the agreed value of No. 19 when it was assigned by Breasley to Wolfe, the agreement does not specifically require Wolfe to make such a distribution to Breasley and an obligation upon Wolfe to do so involves a matter of interpretation.[1] On this critical issue alone, the agreement is vague and uncertain.
[1] It might equally be asserted that it was not intended that Breasley was entitled to such a distribution having regard to the fact that the agreement is silent as to such a distribution when it specifically refers to Breasley’s entitlement to a distribution of the proceeds of the sale of No. 17.
8 The parties have agreed that I should determine this proceeding on the basis of an agreed statement of facts (“the agreed statement”) together with a number of annexures (A through to D) which are referred in the agreed statement.
9 The agreed statement establishes that prior to the execution of the agreement, the mortgagee in respect of No. 17 had entered judgment in respect of that property. In addition, Wolfe and Breasley, who had previously lived in a domestic relationship in No. 19, had ceased making payments with respect to the mortgage applicable to that property and judgment for possession had been entered with respect to that property by its mortgagee on 19 August 2009.
10 It followed that at the time at which the agreement was entered into, both No. 19 and No. 17 were the subject of judgments in favour of their respective mortgagees and that the sale of No. 17, as envisaged by the agreement, was to be undertaken either by Wolfe and Breasley or by a third party, by reason of the judgment entered into with respect to that property by its mortgagee.
11 The agreement contains no date by which the sale of No. 17 was to be completed. The agreed facts demonstrate that an attempt was made to sell No. 17 in February 2010. The sale, however, did not proceed because a section of the fence between No. 17 and No. 19 had been removed and a shed had been constructed across the boundary between the two properties. No. 17 remains unsold; however, a sale date in December 2010 has now been arranged.
12 Having regard to the fact that:
(i) the mortgagee of No. 17 had entered a judgment with respect to the property prior to the execution of the agreement; (ii) both Wolfe and Breasley were aware that the shed which straddled the boundaries of No.17 and No.19 had been in situ for some years and remained in situ at the time at which the agreement was executed; it could have been reasonably contemplated by the parties at the time the agreement was entered, that the sale of No.17, as required by the agreement, might not have been straightforward.
13 The agreement however, did not deal with these issues nor did it deal with the way the continuing mortgage obligation of the parties with respect to both No. 17 and No. 19 would be managed during the period between the entry of the agreement, and the date upon which No. 17 would eventually be sold and the proceeds of the sale were received. Indeed, the requirement that Wolfe indemnify Breasley with respect to No. 19 from the date upon which the transfer of No. 19 was effected from Breasley to Wolfe, highlights the inadequacy of the agreement in its failure to deal with the respective obligations of both Breasley and Wolfe with respect to the managing of outgoings, mortgages and debts associated with No. 19 during the period between the execution of the agreement and the sale of No. 17.
14 Further, whilst the agreement called upon Breasley to transfer her title and interest in No. 19 to Wolfe upon the receipt by her of any proceeds to which she was entitled with respect to the sale of No. 17, it did not deal with the fact that in order to execute such a transfer, Breasley would need to obtain the consent of the mortgagee of No. 19, nor did it deal with the manner by which she should seek to obtain that such consent, or with what should happen in the event that such consent was not obtained.
15 At the time at which the agreement was entered into, the relationship between Wolfe and Breasley had ended. They had separated on 18 November 2007, Breasley having custody of the children of the relationship, Imogen and Lucinda, who were five at the time at which the agreement was entered, and Beau and Harley, who were at that time nearly three. Having regard to the tender age of the children of the relationship, the earning capacity of Breasley must have been marginal at the very best. Given the fact that the two properties represented the parties’ only real assets, it is surprising that the agreement did not fix any time for the completion of the sale of No. 17. Further, given the absence in the agreement of any arrangement as to the way in which the obligations of Breasley and Wolfe in respect of the continued financing of both properties should be managed pending the sale of No. 17, the failure to fix a sale date for the property is even more surprising.
16 Fundamental to the execution of the agreement was, in my opinion, the sale of No. 17. This sale and the distribution of the proceeds of the sale provided the trigger point for the proposed transfer by Breasley of her right, title and interest in No. 19.
17 The agreement contemplated the sale of No. 17 as being carried out either by the Sheriff or by the parties. In a sale to be undertaken by the parties, the agreement contemplated the possibility of a dispute arising with respect to the reserve on the sale. It was clearly intended that the agreement fix a way of resolving any dispute which may arise with respect to the fixing of a reserve price; however, the way in which that dispute was to be resolved was left blank in the agreement.
18 A further nebulous feature of the agreement involved the way in which the agreement dealt with the concept of “joint debt”.
19 The figure of $132,117, which is assigned to this item, is described as being “yet to be proven”, with the requirement that each party provide evidence to the other of the relevant debts. The agreement did provide a mechanism for the proof of Wolfe’s alleged debt to his mother, however no mechanism was established by which any other debts were to be proven or agreed; and the failure to do so creates another issue of uncertainty which goes to the heart of the agreement.
20 Finally, clause (vii) of the agreement, which provided that the parties were entitled to retain the chattels in their possession “save for those items that have yet to be returned”, involves the concept which is to say the least difficult to understand and is largely nonsensical.
21 It can thus be seen that the agreement was the subject of extremely poor drafting and that to give effect to the parties’ intention when the agreement was executed, if indeed that can be ascertained on the basis of the agreed facts, involves an exercise requiring considerable interpretation and re- drafting.
22 In deciding the issue as to whether the agreement should not be enforced by reason of uncertainty, the following principles are relevant:
[2] Hawthorn Football Club Ltd v Harding [1988] VR 49
[3] Upper Hunter District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429
(ii) Where the terms of an agreement are uncertain, the agreement is to be interpreted so as to give effect to the intention of the parties at the time at which the agreement was entered into;[2] (iii) A contract which is uncertain because there is more than one possible meaning is not to be found to be void for uncertainty, as long as it is capable of a meaning, and it will ultimately bear that meaning which the Court decides is its proper construction taking into account the intention of the parties, in search of which the Court will not adopt a narrow or pedantic approach.[3] 23 I am satisfied in the present circumstances, that the intention of the parties was most probably to be bound by an agreement by which the totality of their net assets was distributed between them in the proportion broadly two-thirds to Breasley and one-third to Wolfe.
24 In these circumstances, I must do my best to give effect to the intention of the parties and apply an interpretation of the agreement which will avoid consequences which are unreasonable, inconvenient or unjust.[4]
[4] ABC v The Australasian Performing Right Association Ltd (1973) 129 CLR 99
25 Notwithstanding the absence of the confirmation by the agreement that Wolfe was to account to Breasley for the value of No. 19, or the timing of such accounting, I am satisfied that it is appropriate to imply such a term in the agreement as being necessary to achieve the intention which I have found to have existed.
26 Whilst the agreement failed to ensure that No. 17 was placed into a condition, such that it was capable of being sold,[5] and a myriad of problems were capable of arising with respect to the sale of No. 17 having regard to the fact that the mortgagee of the property was in possession of a judgment with respect to the property,[6] I am of the opinion that it is appropriate to imply a term that the parties to the agreement would act reasonably and within a reasonable time frame, to secure the sale of No. 17 by doing everything within their power to achieve such a sale.[7]
[5] For example, by the removal of the shed which straddled the two properties and the replacement of the boundary fence
[6] For example, the consent of the mortgagee to the removal of that part of the shed which was located upon No. 17 was required before the shed could be removed and if the property was to be put up for sale by Wolfe and Breasley, the consent of the mortgagee was also necessary.
[7] Meehan v Jones & Ors (1982) 42 ALR 463
27 The mechanism for resolving any dispute which arose as to the reserve price of No. 17, in circumstances in which no hint of the intention of the parties can be gleaned from the face of the agreement or the statement of agreed facts is, however, more problematical. That such a fundamental issue is not dealt with highlights the uncertainty which taints the agreement.
28 Even approaching the interpretation of the agreement on the basis to which I have earlier referred, the provisions by which joint debts as referred to in the agreement are to be quantified, and the provision which regulated the distribution of chattels and personal possessions, are so vague that they are impossible to give effect to with the result that there is a compelling case in favour of the agreement being set aside on the grounds of uncertainty.
29 It is put on behalf of Wolfe that the fact that the agreement has been partly performed is such that I should approach this matter with the view that I should strain to give effect to the agreement notwithstanding the presence of uncertainty in its terms.
30 Whilst I accept that part performance of an agreement is generally a factor which should influence a court to take a robust approach in implying terms which are reasonable to give effect to an agreement which might otherwise be unenforceable, the only instances of part performance which I consider to be relevant in the present matter involve the dismissal of the first proceedings and the transfer by Wolfe of the motor vehicle registered No. NYA 487 into Breasley’s name.
31 It is put that the parties’ retention of their superannuation entitlement is an activity of part performance. By reason of the fact that there is no change in the status quo associated by that process, I do not consider this to constitute a relevant action of part performance.
32 Given that a finding made by me that the agreement cannot be relied upon by the parties will result in the reinstitution of a proceeding under the Relationships Act 2008, in the course of which the Court will make an apportionment between the parties of all of the assets of the relationship after taking into account the matters as set out under the Act, including the respective contributions made by the parties to those assets, the relevance of part performance in the circumstances of the present case is not such that in my opinion it should influence a decision made by me that the agreement is unenforceable if I consider that it is appropriate to make such a finding.
Fixing the Time for the Performance of the Agreement
33 The parties agree that in the absence of any time being stipulated within the agreement for its performance, I should imply a term that the agreement be completed within a reasonable time.
34 Independently of the issue which arises as to whether the agreement should be set aside by reason of its uncertainty, I am of the opinion that a fundamental issue arises which operates to stymie any attempt to give continued effect to the agreement, this being the delay which has arisen with the sale of No. 17.
35 The fact that fifteen months have passed without the property being sold, in the absence of any evidence explaining this delay,[8] is such that it cannot be asserted in my opinion that this delay was either within the contemplation of the parties at the time the agreement was executed or that it is reasonable.
[8] Other than for a bland statement that the proposed sale in February 2010 did not proceed due to the location of the offending shed.
36 It was contended on behalf of Wolfe that having regard to the potential complexity involved in selling No. 17, a lenient approach should be applied to the task of fixing the date by which the sale should have taken place.
37 Whilst I accept this position to a degree, I am of the opinion that the timing of the attempt by Wolfe to sell the property in February 2010 most probably reflects the intention of the parties as to the reasonable date by which the property should have been sold. I am buoyed in making this finding by the fact that it was after the failure of this attempt at sale, namely in April 2010, that Breasley first sought to revive the first proceedings. I interpret that action by Breasley as being a clear indication that the time by which she had expected the sale of No.17 to be completed, had expired.
38 These two independent actions, in my opinion, provide a strong indicator that an outer limit of six months should be applied as the period which should be fixed for the completion by of the parties of their obligations under the agreement in respect of the sale of No. 17. In fixing that period, I also take into account the observations I have previously made as to the likely earning capacity of Breasley at this time.
39 That more than fifteen months have now elapsed since the agreement was entered into, and that No. 17 is yet to be sold, is in my opinion such a fundamental breach of the intent of the agreement that it constitutes an act of intended repudiation by Wolfe which I am satisfied, for the reasons I have given, was accepted by Breasley.
40 It is appropriate that I should deal with the assertion by Wolfe that before any repudiation of the agreement arose, the execution by Breasley of a Notice of Surrender which allowed the mortgagee of No. 19 to enter into possession of the property, was a breach by Breasley of an implied term of the agreement that she was obliged to do all things reasonable and necessary to give effect to the agreement.
41 The agreed facts relevant to the execution by Breasley of the Notice of Surrender are as follows:
•
In December 2009, Wolfe entered into an agreement with the mortgagee of No. 19 to pay the arrears owing at that time, together with all legal costs, agents’ fees and two months’ mortgage payments in advance.
•
On 26 February 2010, the mortgagee of No. 19 did not process a repayment made with respect to the mortgage by reason of an incorrectly completed direct debit form, and on this basis it sought to take possession of and sell No. 19.
•
On 12 March 2010, at the request of the mortgagee, Breasley signed a Notice of Surrender in respect of No. 19.
•
There is no suggestion that Breasley was at any time aware of the agreement which Wolfe had entered into with the mortgagee of No. 19 to reactivate the mortgage, or the fact that Wolfe had brought the payments with respect to the mortgage of No. 19 up-to-date.
42 I do not consider that the behaviour of Breasley in signing a Notice of Surrender presented to her by a mortgagee, in circumstances in which, on 19 August 2009 the mortgagee had entered judgment for possession of No. 19 by reason of the failure of the mortgagors to meet their mortgage obligations, could be said to constitute behaviour which was unreasonable.
43 The fact that the agreement was silent as to the way both Breasley and Wolfe should deal with the mortgage moneys owed on No. 19; their continuing mortgage obligations with respect to that property; or the judgment for possession which had been entered with respect to that property; highlights, in my opinion, the uncertainty which arises by reason of the imprecision in the agreement and it is that imprecision which, in my opinion, absolves Breasley from any wrongdoing in executing the Notice of Surrender.
Conclusion
44 I do not accept for the reasons I have given earlier, that the limited acts of part performance which have occurred in respect of this agreement are such that I should give effect to the agreement having regard to the findings I have made.
45 Putting to one side my findings as to the uncertainty of the Agreement which would have moved me, even in the absence of the issue which arises as to the delay in the performance of the agreement, to take the unusual step of setting aside the agreement on that ground; I am satisfied that there has been a complete failure to perform the most important aspect of the agreement within a timely manner, namely the sale of No. 17, which constitutes a repudiation of the agreement by Wolfe, which repudiation has been accepted by Breasley
46 Accordingly, I will dismiss the claim by Wolfe in this proceeding. Given that the counterclaim is predicated upon a finding that Wolfe is entitled to damages, I will also dismiss the counterclaim.
47 I will hear the parties upon the issue of costs in the proceedings.
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