Wong v Wong

Case [2022] FCA 78

FEDERAL COURT OF AUSTRALIA

Wong v Wong [2022] FCA 78

File number(s): NSD 682 of 2021
Judgment of: HALLEY J
Date of judgment: 8 February 2022
Catchwords:

CONTRACTS – interlocutory application to declare a binding and enforceable agreement between applicant and second respondent (Agreement) – where offer provided that bankrupt estate was to receive an amount estimated to be $220,000 by reference to figures in a report to creditors – where acceptance provided that bankrupt estate was to receive $220,000 – whether Agreement binding and enforceable – whether acceptance corresponded with offer or constituted a counter offer – whether material variation –where divergence in expression did not entail a difference in substance – where no material variation – where offer was a purported Calderbank offer – where draft deed of settlement provided subsequent to offer – whether offer was subject to entry into deed of settlement – application granted

CONTRACTS – where third respondent opposed the making of a declaration on grounds that it would suffer prejudice and detriment – where third respondent not a party to the Agreement – whether third respondent has sufficient interest in the Agreement to oppose the declaration – where hypothetical prejudice to third respondent not sufficient to preclude making the declaration

PRACTICE AND PROCEDURE – whether solicitor for second respondent had authority to accept the offer – where solicitor has actual and ostensible authority where Agreement is actually and genuinely related to litigation

Legislation: Bankruptcy Act1966 (Cth) ss 58, 82
Cases cited:

Ashmere Cove Pty Ltd v Beekink (No 2) (2007) 244 ALR 534; [2007] FCA 1421

Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 4 NSWLR 622

Boreland v Docker [2007] NSWCA 94

Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61

Brookfield Australia Investments Ltd v Lucas Stuart Pty Ltd [2012] NSWSC 1130

Calderbank v Calderbank [1975] 3 WLR 586

Clarence City Council v Commonwealth of Australia (2020) 280 FCR 265; [2020] FCAFC 134

Direct Factory Outlets Pty Ltd v Westfield Management Ltd (2003) 132 FCR 428; [2003] FCA 1095

Ex parte Fealey (1897) 18 LR (NSW) 282

Gall v Mitchell (1924) 35 CLR 222

G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631

Jackson v Turquand (1869) LR 4 HL

Lark v Outhwaite [1991] 2 Lloyd’s Rep 132

Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528

Lucke v Cleary (2011) 111 SASR 134; [2011] SASCFC 118

Masters v Cameron (1954) 91 CLR 353

Mulcaire v Newsgroup Newspapers Ltd [2012] Ch 435; [2012] EWHC 3469

Mushroom Composters Pty Ltd vIS & DE Robertson Pty Ltd [2015] NSWCA 1

Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4) (2009) 255 ALR 632; [2009] FCA 522

Outer Suburban Property Ltd v Clarke [1933] SASR 221

Palmer v Ayres (2017) 259 CLR 478

Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605

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Details
AGLC
Wong v Wong [2022] FCA 78
Case
[2022] FCA 78
Decision Date

CaseChat Overview and Summary

In the matter of Wong v Wong, the respondent, Mr Wong, sought a declaration that the appellant, Ms Wong, held or had at all times held her legal interest in the Maroubra property upon a constructive or resulting trust for Mr Wong. Mr Wong also sought a declaration that the loan agreements between Bankwest and Ms Wong were unenforceable, void and of no force or effect, and sought a discharge of the Bankwest mortgage. The court was required to decide whether the Agreement was binding and enforceable, and whether the loan agreements between Bankwest and Ms Wong were valid and enforceable.

The court found that the Agreement was binding and enforceable, and that it was appropriate for the Court to make a declaration to that effect. The court found that the 29 July Offer represented, without qualification, that it was an “offer to agree to a settlement of the dispute between our client and the bankrupt estate”. The 2 August Response contained a purported acceptance of that offer, expressed in terms that provided for the payment of a fixed sum, rather than the acceptance of a formula that was stated would determine an amount equivalent to that fixed sum. The court found that the divergence in expression in the second term of the Agreement did not entail a difference in substance, and that a reasonable person would not view the 2 August Response as introducing a new term into the bargain or constituting only a qualified acceptance of the offer.

The court also found that the loan agreements between Bankwest and Ms Wong were valid and enforceable, and that Mr Wong was not entitled to a discharge of the Bankwest mortgage. The court found that the Bankwest mortgage secured all indebtedness of Mr Wong, Mrs Wong and Ms Wong to Bankwest, and that the amounts outstanding under the First Bankwest Home Loan and the Second Bankwest Home Loan were secured by the Bankwest mortgage.

The court made a declaration that the Agreement was binding and enforceable, and that the loan agreements between Bankwest and Ms Wong were valid and enforceable. The court also found that Mr Wong was not entitled to a discharge of the Bankwest mortgage.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

For the reasons that follow I am satisfied that the Agreement is binding and enforceable and that it is appropriate for the Court to make a declaration to that effect.EVIDENCE The Trustee relied on two affidavits of Ms Drayton, the first dated 24 August 2021 and the second sworn on 1 October 2021. Ms Drayton gave evidence of conversations that she had had with the Trustee and she annexed and exhibited, respectively, to her affidavits correspondence between the parties and the Trustee’s reports to creditors. She was not cross examined. Mr Wong relied upon an affidavit from his solicitor, Mr Jason Li, affirmed on 19 September 2021. Mr Li gave evidence of his communications with the Trustee and Ms Drayton, and annexed copies of emails evidencing such communications. He was not cross examined. Bankwest relied on an affidavit from its solicitor, Ms Felicity Healy, of Corrs Chambers Westgarth, sworn on 30 September 2021. Ms Healy gave evidence of her communications with the legal representatives of Mr Wong and Ms Wong, and a mortgage and related loan agreements that Bankwest had entered into with Mr Wong, his late wife Mrs Jiu Mei Wong (Mrs Wong), and Ms Wong. She was not cross examined.BACKGROUND FACTS Mr Wong and his estranged daughter, Ms Wong, are currently registered as tenants in common of the property located at 19 Boyce Road, Maroubra, New South Wales (Maroubra property). In the period between 1988 and 17 March 2020 Mr Wong, Mrs Wong and Ms Wong were registered as joint tenants of the Maroubra property. Relevantly for present purposes, in or about the first half of April 2015, Bankwest paid out loans from the Australia and New Zealand Bank secured against the Maroubra property. On or about 13 April 2015, Bankwest entered into a document entitled “Bankwest Home Loan Contract” that purported to be with Mr Wong, Mrs Wong and Ms Wong (First Bankwest Home Loan). The amount outstanding under the First Bankwest Home Loan as at 28 September 2021 was $1,057,906.72. On or about 24 July 2015, Bankwest entered into a document also entitled “Bankwest Home Loan Contract” that purported to be with Mr Wong, Mrs Wong and Ms Wong (Second Bankwest Home Loan). The amount outstanding under the Second Bankwest Home Loan as at 28 September 2021 was $369,542.57. The amounts outstanding under the First Bankwest Home Loan and the Second Bankwest Home Loan are secured by a mortgage over the Maroubra property that was registered on or before 5 May 2015 (Bankwest mortgage). The Bankwest mortgage secures all indebtedness of Mr Wong, Mrs Wong and Ms Wong to Bankwest. On 13 July 2021, Mr Wong commenced these proceedings in which he seeks, inter alia:(a)a declaration that Ms Wong holds or has at all times prior to her bankruptcy held, and the Trustee has, since his appointment as the trustee of the bankrupt estate of Ms Wong, held her legal interest in the Maroubra property upon a constructive or resulting trust for Mr Wong (and also prior to her death, Mrs Wong);(b)a declaration that each of the loan agreements between Bankwest and Ms Wong (both in her name and purportedly in the names of Mr Wong and Mrs Wong) are unenforceable, void and of no force or effect, and Mr Wong is entitled to a discharge of the Bankwest mortgage; (c)an order that Ms Wong transfer to Mr Wong the whole of her interest in the Maroubra property registered in her name, or alternatively a one sixth interest in the Maroubra property (being one third interest of her interest in the Maroubra property), if the Court were to determine that Mr Wong was entitled to a two thirds interest in the Maroubra property, on the basis that Ms Wong’s beneficial interest in the Maroubra property at all times up to her bankruptcy was limited and subsequently the Trustee’s vested interest has also been limited to a one third interest in common in the Maroubra property; (d)an order that the Trustee withdraw his caveat over the Maroubra property and do all things necessary to ensure the legal interest in the property registered in Ms Wong’s name be transferred to Mr Wong in accordance with the Court’s declarations as to Mr Wong’s beneficial entitlement;(e)an order pursuant to ss 178 or 179 of the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act) to compensate Mr Wong for loss or damage suffered or likely to be suffered from contraventions of the NCCP Act by Bankwest and/or the fourth respondent; and(f)damages against the fifth respondent for any amounts payable by Mr Wong and the estate of his late wife pursuant to loan agreements between them and Bankwest.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Sixth, Mr Wong’s allegations that the Trustee had acted improperly were irrelevant to the issues to be determined and can safely be ignored, even if relevant could not be determined on an interlocutory application, and are “manifestly without basis”.Consideration I am satisfied that the Agreement was a binding and enforceable agreement that was made between Mr Wong and the Trustee by the provision of the offer contained in the 29 July Offer and the acceptance of that offer in the 2 August Response. I have reached that conclusion for the following reasons. First, the 29 July Offer represents, without qualification, that it was an “offer to agree to a settlement of the dispute between our client and the bankrupt estate”. I note the 2 August Response incorrectly referred to a letter dated “29 August 2021” but in context this was clearly a reference to the 29 July Offer. The 29 July Offer contained an offer to settle on the following basis:a)the property is sold as soon as possible under the instruction of our client;b)out of the net proceeds of sale of the property, the bankrupt estate is to receive an amount sufficient to cover the unsecured debts and estimated costs of the estate set out in your report to creditors of 15 April 2020 (after realisation of the other assets disclosed), being approximately $220,000; andc)the balance of the net proceeds of sale of the property are paid to our client. The 2 August Response contained a purported acceptance of that offer, expressed in these terms:1.the Maroubra property is to be sold as soon as possible under your client’s instruction;2.the amount of $220,000 be paid to the Bankrupt Estate of Mei Ru Leung from the net proceeds of sale; and 3.the balance of the net proceeds of sale are to be retained by your client. There can be no question that the first and third terms in the 29 July Offer were accepted without any qualification. The acceptance of the second term was in terms that provided for the payment of a fixed sum, rather than the acceptance of a formula that was stated would determine an amount equivalent to that fixed sum. I accept that it is possible by a process of addition and subtraction by reference to the figures contained in the Report to Creditors to arrive at a figure of $219,102.38. The divergence in expression in the second term of the Agreement did not entail a difference in substance: see Ex parte Fealey at 292 (Cohen J); Boreland at [76]-[78]. Nor did it give rise to a material amendment to the 29 July Offer or the imposition of a new term that might constitute an offer to enter into an additional contract on that term: Olivaylle at [23]; see also Mulcaire at [27]; Outer Suburban Property at 225-6. I do not consider that a reasonable person would view the 2 August Response as introducing a new term into the bargain or constituting only a qualified acceptance of the offer: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [81] (Heydon JA).