Worthington v Worthington [No 2]
[2014] WASC 448
•27 NOVEMBER 2014
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WORTHINGTON -v- WORTHINGTON [No 2] [2014] WASC 448
CORAM: KENNETH MARTIN J
HEARD: ON THE PAPERS
DELIVERED : 27 NOVEMBER 2014
FILE NO/S: CIV 3264 of 2011
BETWEEN: MICHELLE PATRICIA WORTHINGTON
Plaintiff
AND
CATHERINE SIU GUE WORTHINGTON
Defendant
Catchwords:
Practice and procedure - Application for leave to add plaintiff - Application for separate trials of liability and damages - Vague family arrangement to occupy a shed - Generic claim of 'estoppel' - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 18 r 6, O 21 r 5, O 32 r 5
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff: No appearance
Defendant: No appearance
Solicitors:
Plaintiff: Birman & Ride
Defendant: Su & Co
Case(s) referred to in judgment(s):
Allen v Gulf Oil Refining Ltd [1981] AC 1001
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
APT Finance Pty Ltd v Wingside Nominees Pty Ltd [No 2] [2009] WASCA 235
Boden v Chen [2013] WASC 308
Character Design Pty Ltd v Kohlen [2013] WASC 112
Combe v Combe [1951] 2 KB 215
Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1
Landsdale Pty Ltd v Moore [2009] WASCA 176
Lois Nominees Pty Ltd v Hill [2011] WASC 53
Love v KWS Capital Pty Ltd [2013] WASC 466
News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410
Saleh v Romanous [2010] NSWCA 274; [2010] 79 NSWLR 453
Secola v McCann [2011] WASC 35
Smith v Maloney (1998) 19 WAR 209
Tepko Pty Ltd v Water Board [2011] HCA 19; (2001) 206 CLR 1
Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387
Westpac Banking Corporation v Bell Group Ltd (in liq) [No 3] [2012] WASCA 157; (2012) 44 WAR 1
Worthington v Worthington [2013] WASC 220
KENNETH MARTIN J:
Introduction
My reasons for decision of 5 June 2013 in Worthington v Worthington [2013] WASC 220 provide background to this latest application, which is brought by the plaintiff, Ms Michelle Worthington, but is opposed by the defendant, the plaintiff's mother-in-law, Ms Catherine Worthington. For clarity's sake, the main protagonists are hereafter referred to as Michelle, Catherine and Allana (Michelle's mother), unless otherwise required.
The action can be characterised as a 'vague family arrangement case', to use the expression of Drummond AJA in Westpac Banking Corporation v Bell Group Ltd (in liq) [No 3] [2012] WASCA 157; (2012) 44 WAR 1 [1757], invoking a line of cases involving unwritten promises, assumptions or agreements over property among family members.
In the 2013 reasons I summarised the origins of the dispute this way:
The underlying facts concern some rather crude extended family arrangements entered without legal advice in May or June 2010 regarding land at Bullsbrook known as 'Heaslane Court'. The plaintiff is the daughter of the late Harold Worthington and Allana Worthington. It is said that Harold and the defendant (Catherine) married in about 1987, this being Harold's second marriage. In early 2010 Harold and Catherine were the proprietors (as joint tenants) of Heaslane Court and lived there. Harold was ill with cancer. In May or June 2010 Michelle (the plaintiff) and Harold's first wife, Allana (Michelle's mother) were to occupy a renovated shed on a part of Heaslane Court.
It is in that context that the par 4 [of an amended statement of claim filed 14 February 2013] (oral) contract is pleaded. It is said that Michelle and Allana would be allowed to reside at the shed, free of charge for as long as they wished, providing that they would assist Harold and Catherine in maintaining the property and in caring for the unwell Harold for the remainder of his life.
Harold passed away on 19 October 2010. The Heaslane Court property passed entirely to Catherine, by survivorship.
It is said that in breach of the contract, Catherine, by her lawyers, then demanded Michelle and Allana vacate the shed at Heaslane Court and thereby cease any further occupancy of the converted shed. It is contended that Catherine had expended approximately $28,700, either as the cost of conversions to the shed or, for 'expenses' (pleaded to be Michelle's 'contributions' at par 7).
Catherine demanded that Michelle and Allana leave the property. According to the defendant, Michelle and Allana left in or around August 2012. Michelle essentially says now that it would be unconscionable for Catherine not to recognise that she, Michelle, has a beneficial interest in the property by way of constructive trust. [2] - [6]
Based on that state of affairs Michelle seeks, as pleaded under her second further amended statement of claim of 6 November 2013, damages for repudiation of contract, equitable compensation arising from 'estoppel', a declaration of a constructive trust concerning the Heaslane Court property, and otherwise, relief through quantum meruit.
By the chamber summons filed 5 September 2014, Michelle has now applied:
(1)for leave to add her mother, Allana, as a co-plaintiff;
(2)for leave to amend her writ by a proposed statement of claim filed in substitution of the second further amended statement of claim dated 6 November 2013 (a minute of which was ultimately filed on 2 October 2014) (hereafter referred to as 'MSSC', the minute of proposed substituted statement of claim); and
(3)to have the liability issues tried separately, and prior to, the damages/quantum issues.
With the consent of the parties, I made orders for Michelle's application to be determined on the papers.
Both sides have now filed and exchanged written submissions touching upon this opposed application, namely:
(a)the plaintiff's submissions of 2 October 2014, in support of applications pursuant to Rules of the Supreme Court 1971 (WA), O 18 r 6, O 21 r 5 and O 32 r 5;
(b)the defendant's submissions of 10 October 2014 in opposition to joinder, leave to amend and opposing any bifurcation of the trial; and
(c)the plaintiff's submissions in reply of 21 October 2014.
Preliminary observations
The action now approaches the end of its third year after commencement. The action began intensely with an opposed application to extend the life of Michelle's caveat, which was threatened with statutory extinction at the time. A writ of summons was filed by Michelle on 23 November 2011. It has since been amended on two previous occasions (17 January 2013 without leave and 6 November 2013 with leave). Similarly, Michelle's statement of claim has undergone three iterations - her first statement of claim of 17 January 2013, a further amended statement of claim of 12 April 2013 (without leave) and a second further statement of claim of 6 November 2013 (by consent). So far there have been three attempts at a mediated settlement - and plainly there is no resolution from that process in sight.
While amendments to pleadings are still part and parcel of civil litigation, it must be remarked that the current application to add Allana as an extra plaintiff comes at a rather late stage in the history of Michelle's proceedings. Case management principles are relevant to applications which require the leave of the Court, as this application clearly does (Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175).
The choice of the Supreme Court to conduct the proceedings raises other issues regarding an efficient use of judicial resources. First, the underbelly of this action only presents a modest financial dispute by this court's standards (in the order of not more than $50,000), as regards Michelle's claim against Catherine for damages, or equitable compensation. The legal costs accrued if the action runs to a trial (and probably even the costs incurred to date) could well exceed the amount that might be awarded. The dispute could have fitted comfortably within the lower end of the jurisdictional limit of the District Court (which can hear civil claims of up to $750,000), or may even have fitted under the ceiling for the Magistrates Court (claims up to $75,000). Secondly, the action on its face presents no feature of real complexity or difficulty that might suggest the Supreme Court is the required forum to determine this matter: see comments of McKechnie J in Boden v Chen [2013] WASC 308. Indeed, had an application to remit the matter to the District Court under s 17 of the Supreme Court Act 1935 (WA) been brought earlier in the proceedings, I would have cheerfully supported that end: see comments of Edelman J in Love v KWS Capital Pty Ltd [2013] WASC 466.
Issue 1: Joining extra plaintiff
Seeking to join her mother as an extra plaintiff to her proceedings, Michelle invokes O 18 r 6(2)(b) of the Rules of the Supreme Court 1971 (WA). This rule, relevantly, says:
(2)At any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application -
…
(b)order that any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, be added as a party,
but no person shall be added as a plaintiff without his consent signified in writing or in such other manner as may be authorised. (my emphasis in bold)
I note that Lois Nominees Pty Ltd v Hill [2011] WASC 53 confirmed that RSC O 18 r 4 does not provide a basis for adding a party to an action.
In support of her application to add Allana as an extra plaintiff, Michelle relies on a witness statement of her mother of 29 July 2014, her own witness statement of 7 August 2014, as well as the MSSC of 2 October 2014. The proposed witness statement of Michelle of 7 August 2014 (which has been filed) looks to (wrongly) include a number of documents as attachments to the statement.
To join a party to a subsisting proceeding under O 18 r 6, O 18 r 8(1) necessarily requires the writ to be amended accordingly. Hence, leave is required to amend to facilitate such a joinder - see O 21 r 1(3)(a).
The legal principles regulating the joining of a party to an action are not controversial. They were summarised by Wheeler JA (Newnes JA agreeing) in APT Finance Pty Ltd v Wingside Nominees Pty Ltd [No 2] [2009] WASCA 235 [29]. Her Honour said:
On any application under this rule [ie, O 18 r 6], it is necessary to determine whether or not the proposed party has an interest which makes it necessary for it to be before the court for the effectual and complete determination and adjudication of all matters in dispute in the cause. It has been held that he court has a discretion to refuse an order for joinder: Lancaster Banking Company v Cooper (1898) 9 Ch D 594. However, it is difficult to justify the exclusion of a party whose presence is necessary for the effectual determination and adjudication of matters in dispute and, consequently, it would seem that any discretionary power to decline an order would generally be confined to practical matters of convenience or disruption which might tell against the late admission of such a party: Southern Cross Pipelines Australia Pty Ltd v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulation [2002] WASC 149 at [9].
Determining whether the joining of a party is 'necessary' requires an evaluation of all the circumstances, particularly how any joinder may affect the interests of third parties. As noted by the Full Federal Court in News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410 (the Super League case):
The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent … The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non-parties can be characterised as only indirect or consequential.
Where, before trial, a question arises whether a necessary party has been joined, attention should be directed to the orders sought in the proceedings. It is the effect of the orders upon the third party that must be determined. The test is not whether the conduct of the third party is raised in the pleadings between the existing parties, or whether the third party is a party to a contract, the meaning or effect of which is pleaded as a matter relevant to the ascertainment of the rights between those parties. (525)
It is significant (negatively) here, by the MSSC, that Allana does not seek to establish or recognise for herself any proprietary interest in Catherine's land at Heaslane Court.
It is, of course, well-accepted that persons who have or claim an interest in land are necessary parties to proceedings involving a claim to that land. An order in favour of a claimant is, by nature, detrimental to others claiming an interest in that subject matter: see the Super League case (424 - 425) and John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1 [132]. To the extent that Michelle may be successful at a trial in obtaining a declaration that Catherine holds - as Michelle currently asserts - an undivided half-share in Heaslane Court on trust for Michelle, such relief would not affect the rights of her mother, Allana, vis-à-vis that land (as Allana neither held, nor claims, any such interest).
Nevertheless, Michelle submits, in essence, that the joinder of Allana is 'necessary', as Allana's putative claim for 'equitable compensation' against Catherine is said to arise out of the same factual matrix as Michelle's. The proposed cause of action by Allana - nakedly referenced by the MSSC as 'estoppel' - is indeed one of the causes of action pleaded by Michelle in equally Spartan terms.
Michelle contends further that, as regards the discretion in the Court to allow a joinder, the evidence Allana would rely upon has already been filed and that Catherine has not filed any evidence.
Catherine opposes Allana's joinder on two main grounds. First, she says that Allana - on the basis of her as foreshadowed claims (particularised by the MSSC) and potential rights or liabilities relating to the orders proposed - cannot legitimately be described as a 'necessary' party to the proceedings instituted by Michelle. Second, and alternatively, Catherine says in effect that, due to the contextual lateness of the application, coupled with what is the poorly particularised nature of Allana's claim, the Court should as a matter of discretion refuse leave to add Allana as an extra plaintiff in the action.
Evaluation of issue 1
Both submissions opposing joinder must be accepted. In assessing the leave application to add Allana as a co-plaintiff here, it is appropriate to evaluate the nature of Allana's claim vis-à-vis the subject matter of Michelle's action.
Nowhere in the pleadings or submissions is it claimed Allana has, or ought to hold, any form of proprietary interest in the Heaslane Court property, or that a legal relationship of some kind existed as between Catherine and Allana.
The only claim that is advanced is that the late Max Worthington and Catherine allegedly made verbal representations to Allana during a conversation in 2010, to the effect that Allana could reside in a converted shed at Heaslane Court 'for so long as the First Plaintiff [ie, Michelle] resided there'. On that basis (along with particulars contending for her asserted reliance and a detriment suffered by Allana) it is claimed Catherine ought be 'estopped from denying [Allana's] right to reside at the [Heaslane Court] Property for so long as [Michelle] resides or has a right to reside there' (pars 19 - 21 of the MSSC).
So Allana asserts, at best, what is a derivative shed occupancy interest, via her daughter. In the circumstances of a parasitic claim, Allana cannot properly be described as a 'necessary' party to Michelle's proceedings. Allana is not a person whose rights are 'directly affected' by these proceedings. Rather, Allana better fits a broader category of persons for whom the effect of these proceedings is better described as merely 'indirect or consequential'. A convenience in adding Allana as a co‑plaintiff does not equate to rendering that course of action as being 'necessary'.
I am further influenced to this conclusion by the bald assertion towards Allana of a so-called cause of action in 'estoppel'. It is perhaps reflective of the conduct of this matter that, three years and three mediations into these proceedings, a fresh claim is now proposed to be advanced on behalf of Michelle's mother - whilst so inadequately framed. There is only seen a generic assertion for some unspecified type of estoppel - which is supposed to deliver a stand alone cause of action to Allana. As there is no claim for any interest in the property alleged on behalf of Allana, this cause of action does not look to be a claim for a proprietary estoppel. I am left to speculate over the precise character of this unidentified but presumably equitable estoppel, which supposedly constitutes a cause of action in its own right, rather than merely a negating phenomenon to be called upon in aid of a distinct cause of action. That distinction still presents what I assess as a controversial and unresolved debate in Australia, totally glossed over by the bare plea: see generally Combe v Combe [1951] 2 KB 215; Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387; and Saleh v Romanous [2010] NSWCA 274; [2010] 79 NSWLR 453; cf Character Design Pty Ltd v Kohlen [2013] WASC 112 [16]. These estoppel cases are discussed in an article by Professor A Robertson, 'Three Models of Promissory Estoppel' (2013) 7 Journal of Equity, 226 in the context of assessing whether or not an equitable estoppel does confer a stand alone cause of action. Nevertheless, the uncertainty over her cause of action and what Allana may be saying is unacceptable at this late stage of Michelle's action.
At this stage, the pleadings must identify clear causes of action. There is nothing of sufficient substance that is identifiable under the articulation of Allana's claim for 'estoppel' in the MSSC, to merit a finding that it is necessary Allana should be joined to Michelle's proceedings.
Issue 2: Amending the writ and filing a substituted statement of claim
Catherine submits, correctly, that should the Court decide (as it now has) that no order for the joinder of Allana be made under O 18 r 6(2)(b) then, correlatively, there is no need to consider Michelle's application for leave to amend her writ and the statement of claim, as foreshadowed. Clearly, that must be so. Hence, the current pleadings will stand unaltered.
Issue 3: Ordering liability issues be tried separately, and prior to, the damages/quantum issues
Michelle seeks, in any event, to have the Court order separate trials for issues of liability and damages/quantum, pursuant to O 32 r 4. That rule provides that a court may order that any question or issue arising in a cause or matter be tried separately from any other question or issue, whether before, at or after the trial or further trial of the proceedings. Again, Michelle's trial separation proposal is opposed by Catherine.
The essence of Michelle's submission advocating a 'bifurcated' trial is that she, as plaintiff, raises several alternative causes of action and says there would be significant time and costs savings in having liability issues resolved before, if necessary, assessing issues as to damages and quantum and, hence, that a split trial presents no practical obstacles.
Michelle recognises, correctly, that the accepted starting point must be that all issues of fact and law should be determined at the one hearing, citing Le Miere J in Secola v McCann [2011] WASC 35 (Secola) (and authorities collected there).
Opposing the trial bifurcation proposal, Catherine identifies a number of applicable principles not specifically addressed by Michelle's submissions, notably:
(a)the question of whether an order for the separate trial of issues should be made is a matter for the Court's discretion and is to be approached with caution: Tepko Pty Ltd v Water Board [2011] HCA 19; (2001) 206 CLR 1;
(2)the Court must consider the prospect of separate trials delaying the final resolution of the action: Landsdale Pty Ltd v Moore [2009] WASCA 176; and
(3)a separate trial of issues will generally only be appropriate for cases where there is a clear line of demarcation between issues, and the determination of one in isolation from the other is likely to result in a substantial saving in time, inconvenience and expense: Allen v Gulf Oil Refining Ltd [1981] AC 1001; Smith v Maloney (1998) 19 WAR 209.
Catherine also notes as relevant the summary of case management issues by Le Miere J in Secola at [9]:
The court must manage and supervise this action in accordance with the system of positive case flow management with the object, amongst other things, of:
(a)promoting the just determination of litigation;
(b)disposing efficiently of the business of the court;
(c)facilitating the timely disposal of business;
(d)ensuring the procedure applicable and the costs of the procedure to the parties are proportionate to the value, importance and complexity of the subject matter in dispute; and
(e)that the procedure applicable, and the costs of the procedure to the parties, are proportionate to the financial position of each party: O 1 r 4B(1).
Evaluation of issue 3
Again, Catherine's submissions must be accepted and Michelle's application for a bifurcated trial dismissed. I am not persuaded, in particular, that a bifurcated trial would achieve significant savings in costs or time. The case management objects noted by Le Miere J in Secola are particularly relevant as regards questions of liability and quantum. Michelle's case presents at best as being of a modest financial quantum by this court's standards. There present no factual issues of real complexity or difficulty. The interlocutory processes which have unfolded to this three-year point have delivered enough delay and expense. In these circumstances - and given the modest financial positions of all the parties - the matter has dragged on for far too long.
Further, a court - in exercising a discretionary power such as O 32 r 4 - ought to have regard to the state of the pleadings as regards the clarity in which the causes of action are pleaded. The rather vacuous way in which the elements of her own cause of action for 'estoppel' have been articulated by Michelle is singularly unhelpful in assessing the possible merits of her case and, specifically, to determine the relief that might - should Michelle be successful at a trial - be appropriate, which may differ across the different species of estoppel: see Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101.
I also note, as regards any proposed bifurcation of liability and quantum, that for equitable estoppel (assuming that is what is being raised by Michelle as her cause of action) the elements of that claim and the end relief are inseparably linked, not least because of the discretionary nature of equitable remedies. Here, it would make little sense, for example, to assess whether Michelle suffered any relevant detriment by having relied on an expectation of being able to reside long-term at a converted shed at Heaslane Court, without also having some evidence as to the precise nature of her alleged detriment, but such as would presumably only be evidence adduced later, were there to be ordered a separate trial over quantum alone.
The bifurcation application appears to misunderstand how a court will assess a claim for equitable estoppel (or, for that matter, a constructive trust), as well as a plea for relief through equitable compensation. In determining the nature of a claimant's equity, the court will also - from the same set of circumstances - need to consider how any equity proven might be best vindicated. Such assessments must be rendered in aggregate, not separately.
This aspect of Michelle's application must also be refused.
Conclusion
Michelle's applications having ultimately been unsuccessful in all respects, Catherine should prima facie have her costs of opposing this application, decided as it has been, on the papers, to be taxed and paid immediately. Her solicitors should prepare, exchange and file a minute of proposed orders within 14 days giving effect to these reasons. In the absence of agreement the matter can be relisted for my determination in chambers.
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