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nsw_caselaw:54a636e73004de94513d9722:18 | nsw_caselaw:54a636e73004de94513d9722 | 226In all those circumstances, it appears to me that the probability is that, based on what Walter said to him in July 1989, Robert decided to commit himself to funding the extension of the Longueville Property and thus allocating part of his future compensation payment to that commitment, rather than pursuing, later, a property purchase elsewhere.
227In that regard, the die was cast by the time of the 1993 conversation with Walter. By then, the extension had been completed and paid for. There is no evidence of further detriment or reliance by Robert based on what Walter is alleged to have said in 1993.
228Of course, the question remains as to the nature of the common understanding in reliance on which Robert took these steps.
The 1993 and 1999 wills
229Walter made a will in 1993. That will is not in evidence.
230Robert denied having any involvement in the creation of the 1993 will. However the evidence suggests that Robert did have an involvement in the 1993 will.
231On 30 July 1999, Frances made a diary note: -
"Got home to find W quite upset over the wording of his will - which Rob drew up in 93 some time ago. It did not coincide with the original draft. I advised him to make another will immediately - with a solicitor this time. I can't imagine that R would try to cheat, but the document was not clearly worded. I doubt whether it would stand up to any challenge that I might provoke."
232It is plain from that note that Walter told Frances that Robert had drawn up the 1993 will. There was no dispute between Walter and Robert at this time. There is no reason why Walter would have made this statement to Frances unless it was true.
233As I have said earlier, in cross-examination Robert initially denied having seen the 1993 will. But Robert's own evidence (which I will refer to below) makes clear that that this cannot be so. Robert denied having any involvement in the preparation of the 1993 will. It seems to me that Frances's note of 30 July 1999 shows that this evidence must also be wrong.
234Walter turned 80 on 20 August 1999. Robert gave evidence that he returned to Sydney from Singapore for Walter's 80th birthday party. Robert said that on that occasion Walter gave him a copy of his 1993 will and asked him: -
"Would you please type my will into your computer and add these new clauses I have written to create an 'education fund' for the grandchildren."
235Robert agreed that he typed the 1999 will into his computer. Robert said that he "merely transcribed what my father had written document for him".
236That document became Walter's will of 24 September 1999, which was witnessed by Libby and by Mr Groves.
237In argument, it was suggested that the form of the 1999 will was corroborative of Robert's contention that Walter had agreed to give him a half interest in the Longueville Property as a whole.
238I do not agree. As I have set out above, the will provided that, upon the death of Frances, the "upper storey of the family home at 78 Kenneth Street, Longueville" was to be bequeathed to Robert.
239It then provided that the balance of the estate was to be divided into six shares and that Robert's share was to be the greater of (a) half of the unimproved value of the Longueville Property or (b) an equal 1/6 share of the balance of the estate (that is excluding the "upper storey of the family home" bequest to Robert).
240To the extent that the 1999 will purported to leave Robert the "upper storey" of the home at the Longueville Property, it was consistent with Walter's statements to the effect that "Robert owns half the house".
241Insofar as the will contained a bequest to Robert for half of the unimproved value of the land at the Longueville Property it is, in my opinion, at best equivocal as if Robert was to receive that amount he would receive nothing further from the residue of the estate.
242This is certainly how Robert saw it. He said: - | [
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] | What was the nature of Robert's involvement in the creation of Walter's 1993 will? | [
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nsw_caselaw:54a636e73004de94513d9722:2 | nsw_caselaw:54a636e73004de94513d9722 | 22Construction of the second storey addition to the Longueville Property commenced in September 1990. Construction was completed in around October 1991.
23In order to fund the construction Walter lent Robert $170,000 at an interest rate equivalent to 2 per cent greater than the amount paid by Macquarie Bank for funds on deposit.
24Construction of the second storey addition cost $247,373.13.
25To the extent that such cost exceeded the $170,000 lent by Walter to Robert, the construction was at Robert's cost.
26Robert repaid the $170,000 loan as follows: -
(a)$20,000 on 16 March 1991;
(b)$100,000 on 7 March 1993;
(c)$50,000 on 28 May 1993; and
(d)$19,003.17 in or around July to September 1993.
27Following completion of the addition, Robert and Libby (and subsequently their four children) lived in the upstairs extension of the Longueville Property.
28Except for a period of three years between 1997 and 2000 (when they resided in Singapore) Robert, Libby and their children have resided continuously at the Longueville Property. They are living there to the present day.
29During the period when Robert, Libby and the children were in Singapore, Libby's parents, Mr David and Mrs Diane Groves, lived in the upstairs area of the Longueville Property.
30During the time that building work was in progress, Robert and Libby paid Walter an amount of $100 per week in respect of their occupation at the Longueville Property.
31Once construction was completed and Robert and Libby moved into the upstairs extension, Walter invoiced Robert and Libby on a monthly basis for an amount equal to 1/2 of what Walter described as "joint home expenses" being utilities (gas, electricity and water) and council and water rates.
32Robert paid those invoices as well as 1/2 of occasional repairs and the like which had been paid by Walter. Robert and Libby also paid for occasional maintenance and repairs.
33In or about 2004 Walter agreed that there was no further need for Robert and Libby to pay any share of the "outgoings" because "you are doing a lot more for me now because of my sight problem".
34From around 2004 Robert was also managing Walter's personal affairs.
35Throughout the period of their occupation at the Longueville Property Robert and Libby provided care for Walter and Frances.
36There is no dispute that care was afforded. There is a dispute as to the extent of such care.
37The relationship between Robert and Walter broke down in about June 2009, some three years after Frances died.
38On 4 July 2009 a meeting took place between Robert, Libby, Walter, Katriona and Gregory. At the meeting Robert raised with his father, and Gregory and Katriona, his contentions as to his "equitable interest" in the Longueville Property. I shall return to the circumstances of that meeting below.
39On 13 July 2009 Robert lodged a caveat on the title of the Longueville Property claiming an interest in the property as follows: -
"Interest pursuant to Constructive Trust between the Caveators, Robert Frohlich and Elizabeth Frohlich, and the registered proprietor."
40The facts by virtue of which such interest was claimed were described as: -
"The registered proprietor is a constructive trustee for part of the property in favour of the caveator's, Robert Frohlich and Elizabeth Frohlich."
41A short time later, 22 July 2009, Walter executed his last will, probate of which was granted to Katriona and Timothy on 4 August 2010. The details of that will are set out below.
42At around this time Robert and Libby ceased to care for Walter. Michele and Martin engaged Mr Jeremy Folland to provide live-in care for Walter.
The Estate
43According to the executors' first affidavit, Walter's estate, as set out in the inventory of property, was as follows:
Longueville Property $2,500,000.00
Property at 12 Cassia Close, Watanobbi $300,000.00
St George Access Account $1,000.89
St George Retirement Access Cheque A/c $4,220.64
St George Direct Saver Account $52,359.61 | [
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] | What was the total cost of constructing the second storey addition to the Longueville Property, and how much of this cost was lent by Walter to Robert? | [
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nsw_caselaw:54a636e73004de94513d9722:14 | nsw_caselaw:54a636e73004de94513d9722 | I don't think its worth what it cost him to build but I don't want him to be disadvantaged so I've given him about $500,000 more than the rest of you in the will. I've also given him the right to keep the house by paying you out as I always said I would."
160Martin recalled that on numerous occasions after the second storey renovation was completed, Walter said to him words to the effect: -
"Rob owns half the house as he paid for it."
161Martin also recalled Walter often saying: -
"I want to leave all the children an equal share in the property when I go."
162Martin said that Walter did not ever indicate to him that he wished to sell the Longueville Property and told him on several occasions: -
"The value of the property is in the land not in the house." And
"I don't want to overcapitalize."
163In cross-examination, Martin agreed that Walter had told people that he intended to give Robert the opportunity to buy "the other half of the house".
164Martin also said: -
"I don't know that he ever said to me he [that is Robert] owned half the house. He said he had an interest in the house."
165Katriona said that on numerous occasions, from the time the extension was built until his death, Walter said to her words to the effect: -
"The land value in the property is mine. Robert and I own the house."
166Mr and Mrs Groves also gave evidence of statements made to them by Walter during the period that they lived in the upstairs of the Longueville Property (when Robert and Libby and their children were living in Singapore).
167Mr Groves said that, during the three years that he and Mrs Groves lived at the Longueville Property, Walter gave them a quarterly invoice and said something to the effect: -
"Here is the bill for Robert's share of the house expenses."
168Mr Groves said that on the first such occasion he asked Walter why Robert needed to pay these expenses and that Walter replied: -
"Robert owns half the property so he pays 50 percent of these expenses."
169However, in cross-examination, Mr Groves agreed that Walter may have referred to Robert owning 1/2 the "house" rather than 1/2 the "property" and said that: -
"I couldn't be certain because I didn't differentiate between the property or house."
170Mrs Groves gave evidence that, on this occasion her husband asked Walter whether Robert usually paid the quarterly invoices and that Walter replied: -
"Yes, yes he pays those...he does own half the house."
171Mrs Groves's evidence was not challenged.
172I have mentioned that around June 2009, the relationship between Robert and Walter broke down.
173Following the meeting of 4 July 2009, the lodging by Robert of the caveat on the title of the Longueville Property on 13 July 2009, and the making by Walter of his final will on 22 July 2009, Walter made a "statement" to Martin, which Martin recorded in a four page document.
174That document was used by the defendant's solicitor, Mr O'Neill, to prepare a statutory declaration that Walter ultimately made on 13 October 2009 (some seven months before his death).
175By this time Walter's eyesight had deteriorated substantially such that it was necessary for Mr O'Neill to attend at the Longueville Property and read the statutory declaration before witnessing Walter's signature on the document.
176The statutory declaration represents the only statement in writing by Walter about the matters with which these proceedings are concerned.
177I appreciate that at the time Walter made the statutory declaration his relationship with Robert had broken down. Walter was by this time 90 years of age and near the end of his life. The statutory declaration was based upon the "statement" that Walter had made to Martin. It is clear from the evidence that Martin and Katriona had played some role in the composition of the document. | [
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nsw_caselaw:54a636e73004de94513d9722:22 | nsw_caselaw:54a636e73004de94513d9722 | The will includes a provision for Robert to purchase the 2/15 share from each of his siblings. Clause 9 refers to Dad's wishes if a claim of constructive trustee is brought forward.
Robert and Libby explained that this distribution only allowed 3/15 (1/5), of the house for their investment of $250,000.
Robert and Libby pointed out that this distribution was quite different from what was contained in the Wills of 1993 and 1999. Robert and Libby distributed a page outlining what they believe is their equitable entitlement.
document presenting two different scenarios: one based on the division as provided in the original Wills (1993 and 1999); and a second framed around an equitable interest based on a possible Constructive Trust. The original calculation It is based on a claim that they should receive 62.
50% of the improved value of the improvements to the property (excluding the unimproved land value); the second that they are due a one-third proportion of the property (based on their investment of $250,000 into a property with an original value of approximately $500,000), outside of the division apportioned by any Will.
The rationale behind their calculations was discussed. However, as neither Katriona nor Greg looked in detail at what was documented, the focus of the discussions were not in line with the contents of the document.
There was no resolution to the disparity in property entitlement between Dad's revised wishes (as stated in his proposed will) and the claim made by Robert and Libby (in line with the distribution outlined in his previous Wills).
Robert stated that if there is no agreement over equity then they will seek legal advice.
Robert stated that Libby and he had received legal advice and that if no agreement to the apportioning of their equity in the property cause be reached, they would be left with no other option than to commence legal proceedings."
274There is no reference in Gregory's original notes, nor in Robert's annotations, to the Alleged Agreement.
275Robert agreed that the reason for that was that, in fact, there was no discussion about the Alleged Agreement at the meeting. The effect of Robert's evidence was that he did not raise the Alleged Agreement at the meeting.
276Robert said that "at this meeting I didn't actually say anything, Libby conducted the conversation".
277Libby said that, at the outset, she did mention the Alleged Agreement but "then it was shot down and I didn't press the issue".
278Had Libby referred to the Alleged Agreement at the meeting with any degree of emphasis then, it seems to me, it is overwhelmingly probable that either Gregory would have made a note of it in the Meeting Notes or Robert would have made a note of it in his annotations to those notes.
279It was not suggested in cross-examination of either of Katriona or Gregory that Robert or Libby mentioned the Alleged Agreement at the meeting.
280If ever there was an occasion for Robert to assert the Alleged Agreement, and argue for Walter to recognise in the will he was about to make an interest in the Longueville Property consistent with what Robert now asserts to be his understanding of it, this was it.
281Robert and Libby knew that Walter was contemplating executing a new will. The very purpose of the meeting was to discuss that matter and the "distribution of equity" in the Longueville Property.
282If Robert and Libby truly believed that Walter had agreed to give Robert a 1/2 interest in the Longueville Property and that in reliance on that agreement, Robert had expended approximately $250,000 on the renovations, then, in my opinion, they would have argued for it on this occasion.
283Instead, Robert and Libby advanced an argument based upon Robert's calculation sheet.
284According to Robert's annotations to Gregory's Meeting Notes he argued that he and Libby: -
"...are due a one-third proportion of the property (based on their investment of $250,000 into a property with an original value of approximately $500,000), outside of the division apportioned by any Will." | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9722:6 | nsw_caselaw:54a636e73004de94513d9722 | The cases speak of an 'acceptable range of figures that a competent valuer using due skill and care would reach' (Mount Banking Corporation v Bryan Cooper & Co [1002] 2 EGLR 142 at 149) and an 'acceptable margin of error' (Trade Credits Ltd v Baillieu Knight Frank (NSW) Pty Ltd (1985) Aust Torts Reports 80-757 at 69,529)':
Flemington properties Pty Ltd v Raine & Horne Commercial Pty Ltd (1997) 148 ALR 271 at 290".
64Neither valuer asserted that the other had made any error of principle in coming to their opinion.
65The difference between the valuations arose from the valuers' differing opinions as to the comparability of properties recently sold in the Longueville area.
Both valuers were tested in cross-examination and both appeared to me to have a rational basis for the opinions they expressed as to comparable sales. The impression I gained from their evidence was that the issue was one in respect of which informed professional minds might legitimately differ.
66Both valuers impressed me as being experienced and competent professionals who were endeavouring to make the best judgment they could as to the value of the Longueville Property.
67My finding is that the value of the Longueville property lies mid way between the views expressed by Messrs Gedeon and Galletti, namely in the order of $2.425 million.
68Mr Gedeon and Mr Galletti agreed that the current value of the improvements on the Longueville Property comprised by the house itself (leaving aside such value as can be attributed to the garage and fencing) is $350,000.
69In Mr Gedeon's opinion the value of such improvements attributable to the 1990 renovations is $176,000 (that is approximately 50 per cent of the total value).
70According to Mr Galletti, the value of the improvements attributable to the 1990 renovations is $268,000 (that is approximately 76 per cent of the total value).
71In this regard, I preferred Mr Gedeon's opinion. Mr Galletti's opinion placed considerable weight on the fact that the 1990 renovations resulted in a second floor from which city skyline views can be enjoyed.
But as Mr Gedeon said, "the view is owned and belongs to the land, it doesn't belong to the first floor, it doesn't belong to the ground floor". Mr Gedeon's point, which I accept, was that the potential view from a first floor extension is a matter inherent in the land itself, rather than in the bricks and mortar comprised by the first floor extension.
L'Orana Investments Pty Limited
72L'Orana Investments Pty Limited ("L'Orana") was registered on 2 December 1959. The initial shareholders of the company were Walter and his brother, Paul Frohlich, each holding 50 per cent of the issued shares.
73In about 1969 L'Orana acquired a block of 12 residential units at 16 First Avenue, Eastwood, for about $121,000. L'Orana remains owner of that property. It also owns shares in listed companies.
74In the 1960s Walter gifted to Robert and his Siblings shareholding in the company.
75Thereafter Walter held 1/3 of the ordinary shares in L'Orana. Robert and each of his Siblings hold the remaining 2/3 shareholding equally.
76Pursuant to a settlement of related proceedings in this Court on 24 February 2012, the Siblings agreed to purchase Robert's interest in L'Orana (including his 1/6 interest in Walter's 1/3 interest) for $875,000.00 with payment to be made on the date of completion of the sale of the Longueville Property, or transfer of that property to Robert, whichever is earlier.
The entitlement of Robert and his Siblings under the will
77On the assumption that clauses 8, 9 and 11 of the will are operative, Robert has an approximate entitlement under Walter's estate of between approximately $1.08 million and $1.327 million. Each of Robert's siblings has an approximate entitlement of between $626,666 and $771,462.
The relevant principles of equity
78The principles governing the circumstances in which a constructive trust will be held to arise were discussed by Gleeson CJ in Green v Green (1989) 17 NSWLR 343.
79The Chief Justice said: -
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] | null |
|
nsw_caselaw:54a636e73004de94513d9722:3 | nsw_caselaw:54a636e73004de94513d9722 | Macquarie Bank Account $17,340.17
Westpac shares (5814) $129,535.92
BGP Holdings shares (9) $9.00
Charter Hall Direct Property Fund Units (65,783.5900) $39,470.15
Macquarie Martin Place Trust Units (18,000) $15,300.00
Ethane Pipeline Income Fund Securities (5,250) $7,035.00
ALE Property Group Stapled Securities (20,000) $42,800.00
GPT Group Stapled Securities (9) $5.04
Shares in L'Orana Investments Pty Ltd (750) $1,500,000.00
Debt due by L'Orana Investments Pty Ltd $115,000.00
MBF overpayment $2.23
Total $4,724,078.65
44According to the executors' second affidavit, the updated position regarding Walter's assets is as follows: -
Longueville property $2,830,000.00-$2,100,000.00
Property at 12 Cassia Close, Watanobbi $300,000.00
Shares in L'Orana Investments Pty Ltd (750) $1,690,000.00
Cash in Bank accounts $102,000.00
Debt due by L'Orana Investments Pty Ltd $250,000.00
Westpac shares $120,000.00
ALE Property Group Stapled Securities (20,000) $40,000.00
Stapled Securities in Ethane Pipeline Income Fund $10,500.00
Units in Charter Hall Direct Property Fund Units $36,000.00
Shares and Stapled Securities in BGP Holdings and GPT Group $30.00
Total: $5,378,530-$4,648,530
45There are no disclosed liabilities of Walter's estate other than the costs of these proceedings and administration expenses associated with finalising the estate. There will need to be provision for tax. This is expected to be in the order of $43,750.
46The executors' costs of these proceedings will be in the order of $175,000.
47It is also possible that the executors will claim commission. However, subject to that, making allowance for the executors' costs of these proceedings the net estate is in the order of $4,429,780 to $5,159,780.
48No part of the estate has been distributed.
Walter's prior wills
49Robert claims that Walter made a will in 1993. That will cannot be located and is, accordingly, not in evidence.
50Walter made a will on 24 September 1999. The witnesses to that will were Libby and her father, Mr David Groves.
51Clauses 5-8 of that will provided as follows: -
"5. I give my wife FRANCES FROHLICH life tenancy and occupation, of the lower storey of the family home, at 78 Kenneth Street, Longueville, in the State of New South Wales.
My son ROBERT FROHLICH has paid me in full for the building extensions to the family home, so he or his heirs shall herewith be entitled to continue in occupancy of the upper storey of the home whilst my dear wife FRANCES FROHLICH is living.
The parties mentioned in this paragraph are to jointly have use of, and be responsible for the maintenance of common facilities, as well as meet all outgoings of the home during this period.
6. Upon the death of my dear wife FRANCES FROHLICH, I give, devise and bequeath the upper storey of the family home, at 78 Kenneth Street, Longueville, in the State of New South Wales, to my son ROBERT FROHLICH, or his heirs, as a tenancy in common.
7. Upon the death of my dear wife FRANCES FROHLICH, I give, devise and bequeath the remainder of my estate both real and personal and of whatsoever nature and kind and wheresoever situate to my Trustee upon trust to pay thereout the funeral expenses payable in the consequence of her death, and divide the balance then remaining into six (6) shares and to hold such shares upon the following trusts: | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9722:25 | nsw_caselaw:54a636e73004de94513d9722 | (h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate,
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so,
(l) whether any other person is liable to support the applicant,
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
(n) the conduct of any other person before and after the date of the death of the deceased person,
(o) any relevant Aboriginal or Torres Strait Islander customary law,
(p) any other matter the Court considers relevant, including matters in a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship."
314These matters are capable of relevance to both the first and second stages referred to above, as Hallen AsJ pointed out in Andrew v Andrew [2011] NSWSC 115.
315His Honour said: -
"[53] It can be seen that s 60(2) enumerates 15 specific matters which the court may take into account, together with 'any other matter the court considers relevant', for the purposes of determining eligibility, whether to make a family provision order, and, if so, the nature of any such order.
There is no mandatory command to take into account any of the matters enumerated. None of the matters differentiate in their application between classes of eligible person. Similarly, there is no distinction based on gender.
[54] Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical.
For example, when considering eligibility under subs (1)(a), many of the matters in ss (2) will be largely, if not wholly, irrelevant.
[55] Furthermore, consideration of some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and of other eligible persons as well as of the beneficiaries named in the deceased's will, whilst others do not.
Importantly, also, many of the matters in ss (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).
[56] Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.
[57] This does not mean, however, that some of the matters referred to in s 60(2) will not be relevant to the jurisdictional question to be determined at the first stage. I am comforted in reaching this conclusion by the following comments made in Singer v Berghouse (at 209-210).
'...
The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, | [
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|
nsw_caselaw:54a636e73004de94513d9722:26 | nsw_caselaw:54a636e73004de94513d9722 | amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations.
Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant.'
[58] And by the comments of Callinan and Heydon JJ in Vigolo v Bostin (at 230-231):
'We do not therefore think that the questions which the court has to answer in assessing a claim under the Act necessarily always divide neatly into two. Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably.
Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made.
These matters however will never be conclusive. The age, capacities, means, and competing claims, of all the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.'"
General principles
316In addition to the above matters, there are some general principles that are relevant in this case.
317First, freedom of testamentary disposition remains a prominent feature of the Australian legal system: Lajcarova v Todorov at [91].
318Furthermore, the court must be vigilant in guarding "against a natural tendency to reform the deceased's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant": Cooper v Dungan (1976) 50 ALJR 539 at 542.
319Also, there is no obligation upon a deceased to treat all of his or her children equally: Lajcarova v Todorov.
Claims made by adult child
320The question of provision for adult children was considered by Brereton J in Taylor v Farrugia [2009] NSWSC 801. His Honour said:-
"[57] It is impossible in this area to describe in terms of universal application the moral obligation or community expectation of a parent in respect of an adult child.
I think, however, it can be said that ordinarily the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, and where that is feasible; where funds allow, to provide them with a start in life - such as a deposit on a home, although it might well take a different form.
The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation [McGrath v Eves [2005] NSWSC 1006].
[58] Generally speaking, the community does not expect a parent to look after his or her children for the rest of their lives and into retirement, especially when there is someone else, such a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. | [
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|
nsw_caselaw:54a636e73004de94513d9722:9 | nsw_caselaw:54a636e73004de94513d9722 | Credit of Robert and Libby
102In these circumstances the creditability of the two participants in the conversation who have given evidence of it, Robert and Libby, assumes special importance.
103I have considerable reservations about the manner in which Robert gave his evidence.
104Often, his response to questions asked in cross-examination was not responsive. He often took the opportunity to make a gratuitous and unresponsive assertion in an argumentative tone. An example arose at his cross-examination as follows: -
Mr Meek Q: Your mother recorded important things, didn't she?
A: Yes.
Q: And you agree that something about you owning a half of the place would be an important thing to record?
A: No, because my mother didn't perceive she owned half of the place, she perceived it was entirely my father's.
Q: So is that your explanation for why you think the diary didn't record that?
A: Yes.
Q: You know that you mother recorded many things about your father, don't you?
A: Yes, including [him] calling her a liar and things like that. Yes, I do."
105The last answer was both gratuitous and unresponsive.
106Another example of Robert's tendency to give unresponsive answers can been seen from the following passage during which Robert was being asked about Frances's diary: -
Mr Meek Q: "Why do you need a seven bedroom house in Longueville, Mr Frohlich?
A: I have four children and upstairs has been too small for us for some time. My mother, before she died, suggested that upon her passing that my two eldest sons should move downstairs. However, at a dinner one night Katriona cornered my eldest son and said, 'About you moving downstairs, it isn't going to happen'.
His Honour Q: Do you regard what you just said as a response to the question you were just asked?
A: Yes, your Honour, I do."
107Robert gave his evidence in a combative fashion and seemed ready to reject propositions put to him without adequate consideration. He also gave some evidence that stretched credulity.
108For example, in relation to the caveat that he lodged on the title of the Longueville Property on 13 July 2009, he was asked in cross-examination why that caveat did not refer to the alleged agreement between Robert and Walter.
109Robert alleged that the reason for this was that he had received legal advice, from a solicitor at Ryde, who he named, that "we could not have a caveat that asserted a claim based on an agreement, a verbal agreement."
110The following exchange took place: -
His Honour Q: "Do you say you asked [the solicitor] whether it was possible to refer to the agreement?
A: Yes, we did. We explained the agreement and --
Q: That's not what I asked you. Do you say it is your recollection that you asked [the solicitor] whether you could refer to the agreement in the caveat itself?
A: Yes, your Honour.
Q: And you say he gave you advice that that was not legally possible?
A: That's right."
111I found that evidence to be implausible.
112Robert also asserted that he only "scan read" Frances's diaries and asserted that he "had to read over 17,500 pages of handwritten diaries" and that he could not say he "went over them in detail".
113I regard this evidence as highly improbable. As I will discuss below, Frances's diaries are very detailed. Robert must have had a particular interest in what those diaries recorded about the conversations he had deposed to as having occurred in 1989.
Further, Robert exhibited to his affidavit in reply some 40 pages of typed extracts from the diaries for the period 1988 to 2006. It is obvious he considered them with great care.
114As will be discussed further below, the evidence of Robert and Libby is that the idea of Robert funding construction of a second storey at the Longueville Property (with compensation from his car accident) was first raised at a meeting with Walter and Frances at a restaurant. | [
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|
nsw_caselaw:54a636e73004de94513d9722:0 | nsw_caselaw:54a636e73004de94513d9722 | Supreme Court
New South Wales
Medium Neutral Citation: Frohlich v Herborn [2012] NSWSC 338
Hearing dates: 19 March 2012 - 23 March 2012
Decision date: 10 April 2012
Jurisdiction: Equity Division
Before: Stevenson J
Decision: 1.Property not held on constructive trust as to a half share as claimed by plaintiff.
2.Adequate provision for the proper maintenance and advancement in life not made for the plaintiff in the will of the deceased. Plaintiff left with 1/3 interest in the property. Further provision made under s 59 of the Succession Act out of the estate of the deceased of a 1/6 interest in remaining 2/3 of the property.
Catchwords: TRUSTS - whether deceased held property on a constructive trust for plaintiff as to a half share
SUCCESSION - family provision and maintenance - application by one of six children for provision from father's estate pursuant to s 59 of the Succession Act 2006 - whether inadequate provision made for plaintiff and, if so, what provision ought to be made
Legislation Cited: Succession Act 2006
Family Provision Act 1982
Cases Cited: Andrew v Andrew [2011] NSWSC 115
Ashton v Pratt (No 2) (2012) NSWSC 3
Cooper v Dungan (1976) 50 ALJR 539
Delaforce v Simpson-Cook (2010) 78 NSWLR 483
Giumelli v Giumelli (1999) 196 CLR 101
Grant v Edwards [1986] Ch 638
Green v Green (1989) 17 NSWLR 343
Hulme v Graham [2010] NSWSC 1281
Laidlaw & Anor v Kellie; Laidlaw (bht NSW Trustee & Guardian) v Rusiti & Ors [2011] NSWSC 740
Lajcarova v Todorov [2011] NSWSC 522
Maharaj v Jai Chand [1986] AC 898
Mann v Starkey [2008] NSWSC 263
Singer v Berghouse (No 2) (1994) 181 CLR 201
Taylor v Farrugia [2009] NSWSC 801
Watson v Foxman (1995) 49 NSWLR 315
Texts Cited: S Walmsley et al, Professional Liability in Australia, 2nd ed (2007)
Category: Principal judgment
Parties: Robert Frohlich (plaintiff)
Katriona Herborn (first defendant)
Timothy Herborn (second defendant)
Representation: Mr J O Anderson (plaintiff)
Mr M K Meek SC (defendants)
GHS Legal Lawyers (plaintiff)
J.P. O'Neill (defendants)
File Number(s): SC 2010/261407
Judgment
Introduction and Background
1The plaintiff, Robert Frohlich, is the youngest of six children born to Walter Frohlich who died on 22 May 2010 and Frances Frohlich who died on 20 May 2006.
2The plaintiff was born on 2 October 1960 and is now aged 51.
3The plaintiff's siblings are: -
(a)Helen Mulligan born on 23 December 1950 (now aged 61);
(b)Katriona Herborn born on 31 August 1952 (now aged 59);
(c)Twins, Martin Frohlich and Michele Toomey born on 31 July 1954 (now aged 57); and
(d)Gregory Frohlich born on 26 August 1956 (now aged 55).
4The plaintiff is married to Elizabeth Frohlich, known as Libby.
5For convenience and without intending any disrespect, I shall refer in this judgment to the plaintiff, his parents, his wife and his siblings by their first names. Where convenient, I shall refer to Robert's siblings as "the Siblings" or "his Siblings".
6Walter was the registered proprietor of the land at 78 Kenneth Street, Longueville NSW (the Longueville Property).
7Katriona, and her husband, Mr Timothy Herborn are the executors of Walter's estate.
8Robert claims the following relief: -
(a)a declaration that Walter held the title and interest in the Longueville Property on trust for him as to a half share as tenants in common;
(b)an order that Katriona and Timothy, as executors of Walter's estate, transfer the Longueville Property to Robert on condition that Robert pay to Walter's estate within 12 months an amount equivalent to half of the value of the Longueville Property; | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9722:35 | nsw_caselaw:54a636e73004de94513d9722 | 441Thus, the further provision that should be made for Robert is for 1/6 of the remaining 2/3 (that is a further 1/9) of the Longueville Property, making a total interest of 4/9, or approximately 44.4 per cent of the property.
442That would have the effect of reducing the Siblings' share of the Longueville Property from 2/15 (or approximately 13.33 per cent) to 1/9 (or approximately 11.11 per cent) interest each.
443In view of the evidence before me as to the Siblings' financial position, I do not consider this adjustment against their interests to be a reason why provision should not be made as I propose.
444Otherwise, in my opinion, Robert's claim should be dismissed.
445I invite the parties to bring in short minutes to reflect these reasons and to make submissions as to what order should be made as to the costs of the proceedings.
**********
Annexure A
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision.
The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 11 April 2012 | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9722:5 | nsw_caselaw:54a636e73004de94513d9722 | (a) to give to my said son ROBERT FROHLICH one-third (1/3) of the net proceeds of sale; and
(b) to give each of my other five (5) children namely HELEN MULLIGAN, KATRIONA HERBORN, MICHELE TOOMEY, MARTIN FROHLICH AND GREGORY FROHLICH a two fifteenth (2/15) share in the net proceeds of sale.
10.
IN THE EVENT that it is determined that I have been a trustee of any part of the home in favour of my said son ROBERT FROHLICH and/or any member of his family such that I am not entitled to dispose of that part of the home by my will,
clauses 8 and 9 of this my will shall not apply and I GIVE AND DEVISE my interest in the home to my TRUSTEES UPON TRUST for sale and to divide the net proceeds of such sale equally between such of my six (6) children namely HELEN MULLIGAN, KATRIONA HERBORN, MICHELE TOOMEY, MARTIN FROHLICH, GREGORY FROHLICH and ROBERT FROHLICH who survive me and if more that one equally.
11. I GIVE, DEVISE AND BEQUEATH the rest and residue of my estate of whatsoever kind and wheresoever situate to such of my six (6) children namely HELEN MULLIGAN, KATRIONA HERBORN, MICHELE TOOMEY, MARTIN FROHLICH, GREGORY FROHLICH and ROBERT FROHLICH as survive me and if more than one equally."
The proper construction of the 2009 will
54Apart from the Longueville Property, the residue of Walter's estate is to be divided equally between his six children.
55So far as the Longueville Property is concerned, assuming that it is not "determined" (by the Court) that Walter has been a "trustee of any part of the home" in favour of Robert or any member of this family, then Robert is bequeathed a 1/3 interest and the Longueville Property and his Siblings an equal share of the balance of the remaining 2/3 interest; that is a 2/15 interest each.
56On the other hand, if it is "determined" that Walter has been a "trustee of any part of the home" in favour of Robert or his family, then the remaining interest of Walter's in the home (that is that interest which is not determined to be held on trust by Walter for Robert or his family) is to be divided equally between the six children (that is, including Robert).
The valuation of the Longueville Property
57There is no expert evidence before the Court as to the value of the Longueville Property at the time that the renovations were effected and nor of the increase to such value attributable, as at the time of construction, to those renovations.
58However, there is evidence that shortly after building work commenced at the Longueville Property, Robert and Libby attended the auction of 82 Kenneth Street, Longueville. Robert described that property as "similar" to the Longueville Property "albeit on 10% more land".
82 Kenneth Street sold for $531,000. In argument, Mr Meek SC, who appeared for the defendants, accepted that this figure provided some evidence that the value of the Longueville Property in or about 1990 was in the order of $500,000.
59Mr Ronnie Gedeon was appointed by the Court as an expert to give an opinion as to the present value of the Longueville Property.
60Pursuant to leave granted by the Chief Judge in Equity on 22 September 2011, Robert adduced evidence from a further valuer, Mr Bernie Galletti as to the present value of the Longueville Property.
61According to Mr Gedeon, the current value of the Longueville Property is $2.6 million.
62According to Mr Galletti, the current value of the Longueville Property is $2.25 million.
63As has been said in the context of discussion of valuers' liability in Walmsley et al, Professional Liability in Australia, 2nd ed (2007) at 889:-
"If 'several valuers valuing the same property on the same basis at the same date produce different assessments, it does not follow that one only of them is rights, that any of them is wrong or that any of the valuers was negligent. | [
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|
nsw_caselaw:54a636e73004de94513d9722:28 | nsw_caselaw:54a636e73004de94513d9722 | 337In that event, Walter's interest in the Longueville Property (that is, that part not determined to be held on trust for Robert) was to be divided equally between Robert and the Siblings. Thus, if it were determined that Walter held part of the Longueville Property on trust for Robert, Walter intended that Robert would nonetheless share equally with his Siblings in the remainder.
338I have held that Walter did not hold any part of the Longueville Property on trust for Robert. Accordingly clause 10 of the will is not engaged. It does, however, provide an insight into Walter's intentions.
339In about May 2009, Walter said to Michele:
"I'm going to change my will. I want to give Robert something for what he's put into the house and split the rest between all of you."
340According to Greg's affidavit, Walter told Gregory, after the 4 July 2009 meeting: -
"I acknowledge that he paid for upstairs and so it should be his. I don't think its worth what it cost him to build but I don't want him to be disadvantaged so I've given him about $500,000 more than the rest of you in the will. I've also given him the right to keep the house by paying you out as I always said I would."
341In his statutory declaration of 13 October 2009, Walter said:
"...my current will does in fact provide Robert with significantly greater benefits than those which I have provided to my other children. I did this because Robert had spent money building at Longueville and as he didn't have a house that would appreciate in value, like my other children, I did it want him to be disadvantaged".
342There are a number of factors at play here.
343First, Walter said he wanted to leave all his children "an equal share" in the property, by which Walter may have meant all of his estate, or just the Longueville Property.
344Further, Walter seems to have recognised that, by reason of Robert's investment of a considerable part of his accident compensation into the Longueville Property, Robert had been deprived of an opportunity to invest that money in an appreciating asset of his own. As Brereton J observed in Taylor v Farrugia (supra), this is a matter capable of relevance.
345On the other hand, so far as the Longueville Property is concerned, he wanted to "give Robert something for what he's put into the house" (because "he paid for upstairs so it should be his") - and "split the rest between all of you".
346I would understand that comment to mean that Walter wanted to bequeath to Robert an interest to reflect his "investment" in the Longueville Property - and, seemingly, no more - and bequeath "the rest" to Robert's siblings.
347It will be recalled that in 1990, when the renovations were effected, the evidence suggests the Longueville Property was worth something in the order of $500,000. Robert invested approximately $250,000 into the Longueville Property.
348As we have seen, at the meeting of 4 July 2009, Robert argued that the effect of the expenditure of that $250,000 increased the value of the Longueville Property by an equal amount, to $750,000, so that Robert's "investment" then represented 1/3 of the property's then value.
349There is no expert evidence before me to justify this conclusion, but it does not seem to be unreasonable. The renovations must have caused the value of the Longueville Property to increase, and the increase must have been in an order something near the amount expended.
350The fact that, very shortly after the 4 July 2009 meeting, Walter made a will leaving Robert a 1/3 interest in the property, in circumstances where his view at that time was that he should leave Robert "something for what he's put into the house" suggests this was also Walter's opinion.
351It is true that Messrs Gedeon and Galletti agree that, now, the house itself is only worth $350,000 and thus a small proportion of the overall value of the Longueville Property - and that the present value of Robert's improvements is even less. | [
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|
nsw_caselaw:54a636e73004de94513d9722:16 | nsw_caselaw:54a636e73004de94513d9722 | 192In Libby's earliest account of the conversation (in her affidavit), she used the same language ("half the place").
193Significantly, when asked to give an account of the conversation in cross-examination without regard to her affidavit of the words she attributed to Walter were that Robert would own "half the house", which she then corrected to "half the property" (see paragraph 146 above).
194I do not think it unfair to Libby to conclude that she added that correction in order to align her evidence to Robert's case and that, in fact, she has no recollection of Walter referring to "half the property".
195The statements that Gregory, Martin, Katriona and Mrs Groves recall Walter making suggest that he understood the arrangement to be that Robert owned 1/2 "the house", and that he drew a distinction, in his own mind, between "the house" and the land.
196It will be recalled that Mr Groves's recollection was a little more equivocal, but consistent with the recollection of the other witnesses.
197It seems probable that insofar as Walter and Robert turned their minds to what interest Robert should have in the Longueville Property, they would have in mind an interest proportionate to the proposed renovation.
198On the face of it, what was proposed was to double the size of the house by erecting a second storey which (to use Robert's words) would "replicate the existing house, and go up wall to wall". Thus, what was proposed was, in effect, to double the size of the existing dwelling.
199On the face of it, the granting to Robert of a half interest in the house itself would seem to be in proportion to that kind of proposal.
200On the other hand, the conferral on Robert of a half interest in the whole property (that is, house and land) would seem to be out of proportion to Robert's proposed investment.
201This is especially so if (as Walter evidently then believed, and as the valuation evidence shows now to be the case) the value of the land at the Longueville Property constituted the major component of the value of the property as a whole.
202In all these circumstances, I am satisfied that Walter did not say anything about Robert having an interest in "half the property".
203I am also satisfied that if, as Robert and Libby assert, Walter referred to a half interest "in the place", Walter meant a half interest in the house itself, and not in the property as a whole.
204I am also satisfied that this must also have been Robert's understanding.
205That this is so is confirmed, in my opinion, by later events.
The 1993 will discussion
206As I have indicated, in addition to the Alleged Agreement, Robert claims that in 1993, Walter promised him that he would leave him 1/2 the Longueville Property in his will.
207In February 1993 Robert obtained an award of damages from this Court in relation to the 1988 accident. After reimbursement of social security payments, Robert received an amount of approximately $515,000 in or about May 1993.
208Robert used part of this money to finalise repayment to Walter of the $170,000 lent by Walter to Robert to fund the construction at the Longueville Property.
209Robert gave evidence of a conversation with Walter in around May 1993 as follows: -
Robert: "Now that I've fully paid you back the loan, how are we going recognise my part ownership of the house? Will we get someone to draft a deed or something?
Father: Well no, no. I don't want Jenny to have a claim on the property. So, I'll put it in my will."
Robert: I'd also like to buy your half of Longueville from you as well. I'd obviously give you and Mum life-tenancy.
Father: No, I'll leave your half in my will. Anyway none of your brothers or sisters, other than Michele, live in Sydney and they all own their houses. Michele will probably remarry to someone who either already has a house or they'll buy one together." (emphasis added) | [
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|
nsw_caselaw:54a636e73004de94513d9722:27 | nsw_caselaw:54a636e73004de94513d9722 | But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parents to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute.
It is no longer the case, if it ever was, that an adult child has to establish a special need before obtaining provision from the estate of a deceased parent".
Assessment of adequacy of provision
321Section 59(1)(c) of the Act does not define the norm by which the court must determine whether the provision is inadequate for the applicant's proper maintenance, education and advancement in life.
322As Hallen AsJ said in Laidlaw & Anor v Kellie; Laidlaw (bht NSW Trustee & Guardian) v Rusiti & Ors [2011] NSWSC 740: -
"The question would appear to be answered by an evaluation that takes the court to the provision actually made in the deceased's Will [...] on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other". (at [43])
323Accordingly, it is necessary to consider what provision Robert received under the will.
The provision made for Robert
324Otherwise than in respect of the Longueville Property (including Walter's shareholding in L'Orana), Robert and his Siblings received an equal share in Walter's estate. That was a very valuable bequest. Before me there was no suggestion that this aspect of Walter's disposition of his estate was not adequate.
325So far as concerns the Longueville Property, Robert received a greater share than his Siblings. He received 1/3. The Siblings shared equally in the remaining 2/3: that is 2/15 each.
326But, of course, Robert had made a considerable financial investment in the Longueville property. That is a matter that may be taken into account: s 60(2)(h).
327There is no suggestion that any of the Siblings made any such contribution to the improvement of the Longueville Property.
328And, Robert (and Libby) provided considerable care for Walter, and for Frances. That is a matter which also may be taken into account: s 60(2)(h).
329There was debate before me as to the extent of the care afforded by Robert and Libby. But, on any view of the evidence, it was more - considerably more - than that provided by Robert's siblings.
330To say that involves no criticism of the Siblings. All but one of the Siblings (Michele) were living outside Sydney at all relevant times. Robert and Libby were living in the same house as Walter and Frances. It would be in the ordinary nature of things that, living in such close proximity, they would carry most of the responsibility of affording such care as was needed to Walter and Frances.
331It was common ground that, from around 2004, Robert took care of Walter's personal affairs and his business interests in L'Orana. Until the falling out in June 2009, Robert was also Walter's attorney under power.
332It is also relevant to consider what Walter intended to achieve with his will, and what he said about that matter: s 60(2)(j) of the Act.
333Martin recalled Walter often saying: -
"I want to leave all the children an equal share in the property when I go."
334Thus, although, the law imposed no obligation on a deceased to treat his or her children equally, Walter stated that this was his intention.
335His disposition of the residue of his estate, apart from the Longueville Property, equally between his six children reflects this.
336So do the terms of clause 10 of Walter's will. That clause provided that if it was "determined" that Walter held any part of the Longueville Property on trust for Robert, clauses 8 and 9 of the will (providing, in effect, for Robert to get a 1/3 share of the Longueville Property and for the Siblings to share equally the balance) would not apply. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9722:10 | nsw_caselaw:54a636e73004de94513d9722 | 115Both Robert and Libby, in their initial affidavits, identified that restaurant at the Black Stump restaurant in North Sydney. After Robert and Libby swore those affidavits, a copy of Frances's diary for the relevant period was made available to them. That diary reveals that the conversation took place at a restaurant called Don Paco's in Crows Nest.
116Both Robert and Libby denied that, before swearing their initial affidavits, they discussed this detail with the other. Both asserted that it was a coincidence that they had both nominated the Black Stump restaurant as being the venue for the conversation in question.
117Libby asserted that her "visual memory" was that the meeting took place at the Black Stump restaurant and that "I can visualise where we sat in terms of placement around the table". She said that she now realised, having read Frances's diary, that conversation took place at the Crows Nest restaurant.
118It seems to me that Robert and Libby must have, prior to swearing their affidavits, discussed the venue of this conversation. I do not accept their evidence that they did not.
119In her initial affidavit, Libby referred to the conversation that she placed as having taken place at the Black Stump restaurant in North Sydney but gave no evidence of the critical conversation, a short time later in which the agreement was allegedly made.
120It was only in her affidavit in reply, sworn after Frances's diaries were available, that she gave evidence of the critical conversation.
121In cross-examination Libby was asked questions about why it was, in her first affidavit, that she only deposed to the conversation at the Black Stump. The following evidence ensued: -
Mr Meek Q: "Do you agree with me that there was just one conversation relating to the 1989 discussions about building the addition?
A: Yes.
Q: And that was your best recollection of the events that occurred in 1989 regarding the additions at that time, was that right?
A: That was one of the conversations, yes, I though the primary conversation.
His Honour Q: Did you complete your answer?
A: I did.
Q: I think you said that was one of the conversations?
A: That was the primary conversation at the time.
Mr Meek Q: It's the only conversation that you've set out in your affidavit regarding those events, isn't it?
A: Yes.
Q: And the reason why it's the only conversation you set out in that affidavit regarding those events in 1989 is because it was the only conversation that you could recall at that time; that's right isn't it?
A: No.
Q: Do you say at the time you swore this affidavit that you could recall other conversations regarding the events in 1989?
A: Yes.
Q: Why did you not set them out in the affidavit?
A: I recall this conversation with Robert's father. I also had conversations with his mother.
Q: But you didn't see fit to set them out; is that right?
A: No."
122I took this evidence to mean that when Libby swore her first affidavit she could not only recall the conversation she deposed to in that affidavit but also could recall "conversations with his mother", that is with Frances.
123In her second affidavit, sworn after Frances's diaries became available, Libby located the restaurant conversation to be at Crows Nest (not North Sydney) and, for the first time, gave evidence of the critical conversation in which the agreement was allegedly made.
124The language that Libby then attributed to Walter is very similar to that attributed to him by Robert.
125That fact, combined with the fact that Libby could not remember that conversation at all when she swore her first affidavit causes me to be very cautious about accepting her account of it.
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|
nsw_caselaw:54a636e73004de94513d9722:20 | nsw_caselaw:54a636e73004de94513d9722 | At first I thought the conditions on the new will suggested by the solicitor were too much to Robert's advantage but then I agreed to them. When I told Robert that I was drawing up a new will he didn't ask me what the terms of the new will were but he said 'I'll leave tomorrow'."
255Robert asserted that at this time Walter was suffering "from the early signs of dementia, including forgetfulness and paranoia" and that he was becoming "increasingly negative and aggressive towards Libby and me".
256 Robert claims that in June 2009 Walter said to him: -
"I have briefed a solicitor to draft a new will and I worked out your equity in the house will be one-fifth."
257On 16 June 2009, Libby said the following conversation took place: -
Libby: "Walter, I have just come down to discuss your will. It greatly concerns us that you have decided to change your will, as your will is meant to acknowledge our agreement. We have put a lot of money into the house and given up a lot to look after you and Frances.
Walter: Well my last will was unworkable.
Libby: So how have you changed it, how do you recognize our interest in the home?
Walter: Well, I was trying to tell Robert but he wouldn't listen, but I've decided to leave you 20% of the house.
Libby: But you agreed to leave us half of the place in your will. Why didn't you come and discuss this with us first?
Walter: When Katriona was here I said that I thought Robert was going to be a trouble maker over my will, so I asked her to read me the will and someone had tampered with it. So I asked her to take it to a lawyer, and she said she would take it to a barrister friend of hers, who said the will was unworkable.
Libby: What do you mean tampered with it?
Walter: Well you see, it didn't say what I though it said, so someone must have tampered with it.
Libby: But who would tamper with your will?
Walter: Well someone did. Robert must have tampered with it. Anyway when I tried to talk to him about the new will, he stormed off before I could explain, so he must be guilty.
Libby: Guilty of what? Robert would not have tampered with your will, Walter how could he? Robert only left the room because you had accused him of being a trouble maker and that he had contested Frances's will, and because of that you had changed your will.
He didn't challenge Frances [sic] will. He left the room because he was upset that you had accused him of something he hadn't done. I would be upset if you had said that to me, anybody would have been and now you are accusing him of tampering with your will."
258On 21 June 2009 Libby alleged the following conversation took place: -
Libby: "Walter we are really concerned about how you have come to the figure of 20% in terms of our share in the property and the agreement that you would leave us half the property. What about our agreement? 20% doesn't even recognize our investment. We've put a lot of money into this place and have looked after you and Frances like we agreed to.
Walter: What agreement? There was nothing in writing, so there was no agreement. You put in $250,000 and I am being generous leaving you $500,000.
Libby: You said that you would recognize our agreement in your will.
Walter: Well you have no capital gain. If you had built a second storey on a house at Bankstown it would only be worth that.
Libby: But this is not Bankstown. Walter if we had put that money into the bank we would have quadrupled it in 20 years.
Walter: Well it wasn't a very astute investment then was it? Anyway, you don't have any legal right. Maybe you have a moral right to live here, only if I let you.
Libby: This is our home Walter and we have every right to live here."
259In cross-examination Libby agreed that during these conversations Walter denied that Robert had an entitlement to a 1/2 share of the Longueville Property.
260Otherwise, Libby's evidence about these conversations was not challenged. | [
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|
nsw_caselaw:54a636e73004de94513d9722:4 | nsw_caselaw:54a636e73004de94513d9722 | (a) To hold one share for my son ROBERT FROHLICH being the greater of:
(i) one-half (½) of the unimproved land value of my real property situated at 78 Kenneth Street, Longueville, in the State of New South Wales, as a tenancy in common; or
(ii) an equal sixth (1/6) of the net value of my estate. Such share to include one-half (½) of the unimproved land value of my real property situated at 78 Kenneth Street, Longueville, in the State of New South Wales, as a tenancy in common.
(b) To hold the other five (5) equal shares for such of my daughters HELEN MULLIGAN, KATRIONA HERBORN and MICHELE TOOMEY, and my sons MARTIN FROHLICH and GREGORY FROHLICH as shall survive me and if more than one in equal shares between them as tenants in common.
Provided that should any son or daughter of mine predecease me or shall not proved to be living at the expiration of one (1) month after the date of my death, leaving heirs who shall survive me and attain the age of twenty-one (21) years,
such heirs shall take, and if more than one in equal shares, as tenants in common the share which his, her or their predecessor would have taken had he or she survived me.
If the trusts of any share under this clause fail that share shall be divided between the others in equal shares.
8.
I direct my Trustee, upon the death of my dear wife FRANCES FROHLICH, to grant to my son ROBERT FROHLICH, or his heirs, the option to purchase the lower storey and the remaining one-half (½) of the unimproved land value of my real property situated at 78 Kenneth Street, Longueville,
in the State of New South Wales, within an agreed period of not less than one (1) year from her death, for a sum to be agreed in accordance with market value at that time, upon such conditions and upon such terms as to payment as the Trustee in his/her absolute discretion shall decide.
" (emphasis added)
Walter's final will
52As I have mentioned, Walter made his final will on 22 July 2009, shortly after the 4 July 2009 meeting and the lodgement by Robert of the 13 July 2009 caveat on the title of the Longueville Property.
53Clauses 8-11 of that will provided as follows: -
"8. Subject to clause 10 of this my will I GIVE & DEVISE my property at 78 Kenneth Street, Longueville ("the home") to my son ROBERT FROHLICH upon condition that:-
(a)he notifies my Trustees in writing that he wishes to receive the home as part of his inheritance within 30 days of being advised by my Trustees in writing of this right;
(b)he pays to each of my other five (5) children namely HELEN MULLIGAN, KATRIONA HERBORN, MICHELE TOOMEY, MARTIN FROHLICH and GREGORY FROHLICH, (or if any of them has predeceased me,
the beneficiary or group of beneficiaries that takes in place of my deceased child) an amount equivalent to two fifteenths (2/15ths) of the value of the home as at the date of my death as determined by a valuer of at least 5 years experience in valuing properties such as the home,
such valuer to be agreed between my said son ROBERT FROHLICH and my Trustees, failing such agreement, the property shall be valued by an appropriately qualified valuer nominated by the president of the Property Institute Inc New South Wales Division or if the said Institute ceases to exist prior to a nomination being made, by the President of the body which replaces the said institute;
and
(c)he pays all the amounts payable pursuant to sub-paragraph (b) of this clause by the later of the date 12 months after my death or 9 months after my Trustees notify him of this right in accordance with sub-paragraph (a) of this clause.
9. Subject to clause 10 of this my will IN THE EVENT that my said son ROBERT FROHLICH does not comply with all of the conditions referred to in clause 8 above or notifies my Trustees in writing that he does not wish to receive the home as part of his inheritance I GIVE AND DEVISE the home to my Trustees UPON TRUST for sale and to divide the proceeds of the sale as follows:- | [
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|
nsw_caselaw:54a636e73004de94513d9722:30 | nsw_caselaw:54a636e73004de94513d9722 | 367Robert gave the following evidence: -
Mr Meek Q: "Well before any dispute arose with your father in 2009 you had not lodged tax returns; do you agree with that?
A: Yes
Q: And you were earning income during that period?
A: I was a PAYG employee, yes.
Q: And you knew it was your civic duty to lodge tax returns?
A: I believe that the tax department will chase me up if they require them.
His Honour Q: You don't propose to do anything about filing tax returns unless they do?
A: I do. I plan to get up to date, hopefully fairly soon.
Q: I think you had better because one thing I can do is refer these matters to the Australian Taxation Office. You had better think about your position because, absent an undertaking from you that you will properly get your tax affairs up to date, I may well do that."
368In due course, Robert gave an undertaking, through his counsel Mr Anderson, that he would cause his tax affairs to be brought up to date by the end of April 2012.
369So far as the tax returns for Bigger Than Ben Hur Pty Limited were concerned, the evidence disclosed that in July 2010, the Australian Taxation Office had brought court proceedings in relation to the failure of Bigger Than Ben Hur Pty Limited to lodge tax returns. A fine was imposed by reason of that failure. Robert said: -
"The company was delinquent, I admit that."
370Robert's attitude to the question of Bigger Than Ben Hur Pty Limited lodging tax returns was revealed by the following exchange in cross-examination: -
Mr Meek Q: "You know that company ought to lodge tax returns, don't you?
A: Yes.
Q: You have seen fit not to lodge such tax returns, haven't you?
A: I have been very busy over the last couple of years.
Q: The last four years you say you haven't had time to attend to lodge tax returns for that company, is that right?
A: No, I said that last return was, I suppose it probably - well, it's 2012, no, it's three years.
Q: Whatever the period, you have seen fit not to lodge those returns, you agree with that?
A: Actually it's only two years, yes.
His Honour Q: Did you say it's only two years?
A: We lodge --
Q: Sorry, did you say it's only two years?
A: Yes.
Q: What do I get from that, that it's not significant to fail to lodge tax returns if it's only for two years?
A: No, I'm saying that there has been minimal income so I don't believe there will be a debt payable to the Tax Office. I haven't done the fine calculations.
371In the affidavit Robert swore setting out his financial position, he said: -
"Currently, Libby and I have not filed tax returns for two years. I do not know how much tax and penalties we owe at present. I am now in the process of preparing these and will hopefully have lodged them soon."
372In light of the evidence which I have set out above, given by Robert in cross-examination about his personal tax returns, this passage in his affidavit was quite misleading, if not downright false.
373When asked questions about that passage, Robert gave the following evidence: -
Mr Meek Q: "When you swore this affidavit that wasn't a correct statement of the position in relation to you, was it?
A: Well, we hadn't filed tax returns for two years.
Q: You know that wasn't a proper disclosure of your failure to lodge to tax returns, don't you?
A: My personal tax returns haven't been filed for more than two years, yes."
374Roberts's initial response to Mr Meek's suggestion that the passage in the affidavit that I have set out was not correct, it was, in my opinion, disingenuous in the extreme. He was seeking to argue that the literal truth of the words he had used in the affidavit. It is obvious that his affidavit misstated the position. | [
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|
nsw_caselaw:54a636e73004de94513d9722:19 | nsw_caselaw:54a636e73004de94513d9722 | "I agree that the 1999 will was inconsistent with our agreement. I was never happy with it, but it did indicate that I had fully paid for the building works which I knew were of more value than the existing structure due to the upstairs having substantially better views and that the downstairs was still in need of renovation.
In hindsight, I now realise that I should have stood up to him, however at the time I was trying not to rock the boat, and did not want to upset my mother.
I also somewhat caught between a rock and a hard place, as I had already invested over $250,000 of my personal injury money into the property some 10 years earlier, and had no guarantee that my father would give it back to me or that he may even possibly tell me and my family to move on."
243In cross-examination Robert was asked why he did not challenge his father about the 1999 will. He responded by saying: -
"You didn't know my father. He wasn't the sort of person who you could challenge to change something. When he'd made up his mind to do something that was the way it was going to be."
244However, Robert gave evidence in his affidavit that he did speak to Walter about the 1999 will. He said he telephoned Walter from Singapore and the following conversation took place: -
Robert: "Why have you only left me half the house in such a roundabout way?
Walter: What do you mean?
Robert: For me to get half the house, I have to give up any claim to my share of the rest of your estate. That was never part of our agreement nor have we discussed it before.
Walter: The rest of my estate won't be worth very much. The bulk of my wealth is in here (Longueville), so you wont be giving up much at all."
245Robert said that Walter continued by saying that he planned to distribute the residue of his estate before he died "so you won't be left out at all".
246I conclude, from Frances's diary note of 30 July 1999 that, contrary to Robert's denial, he drew up Walter's 1993 will.
247I conclude from Robert's evidence that, relevantly, the 24 September 1999 will was in the same or similar terms to the 1993 will.
248I conclude from the conversation Robert had with Walter that he knew that Walter had made a will that was inconsistent with the Alleged Agreement.
The events of 2009
249It is common ground that relations between Walter and Robert deteriorated and that there was a falling out between them in June 2009.
250Katriona gave evidence that in about May 2009, whilst she was visiting Walter, Walter gave her a copy of the 1999 will and asked her to get it checked saying "it needs to be cleaned up. We do not need all those provisions about your mother living here".
251Katriona said she showed the will to a friend of hers who was a barrister and that thereafter she said to Walter: -
"Our barrister friend thinks there will be problems with the will and it should be drafted by specialist solicitor."
252One obvious "problem" with the 1999 will was the purported bequest to Robert of the "upper storey of the family home" at the Longueville Property.
253Michele gave evidence that in about May 2009, Walter said to her: -
"I'm going to change my will. I want to give Robert something for what he's put into the house and split the rest between all of you. I also want to remove all reference to your mother. When I told Robert that I was intending to rewrite the will he got very angry and said 'I'll move out of the property immediately'. I hadn't even told him what I was planning to do."
254In his statutory declaration of 13 October 2009 Walter said: -
"The [1999] will referred to 'upstairs' and 'downstairs' which the solicitor advised me is not a clear definition for dividing a property. There is only one title and I only ever consented to Robert building upstairs. The land remains my property per the title. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9722:7 | nsw_caselaw:54a636e73004de94513d9722 | it is now well-settled that there are circumstances in which a court of equity will intervene to declare the existence of a proprietary interest in a family home on the part of the spouse or de facto partner,
and the unifying principle underlying the cases where such intervention is regarded as appropriate is that in the circumstances of the case, and in accordance with equitable doctrines, it will be unconscionable on the part of the person against whom the claim is set up to refuse to recognise the existence of the equitable interest:
Baumgartner v Baumgartner (1987) 164 CLR 137 and 147 per Mason CJ, Wilson and Dean.
" (at 353F)
80Although the Chief Justice was speaking of claims made by a spouse or de facto partner, the same principles must apply when a child asserts the proprietary interest.
81The Chief Justice continued: -
"The most common case of intervention of that kind to be found in the law reports is the case where the person in whose favour a constructive trust is found has, directly or indirectly, made a financial contribution towards the cost of acquiring, improving, or maintaining the property in question." (at 353G)
82The Chief Justice (at 354F) cited with approval the observations of the Privy Council in Maharaj v Jai Chand [1986] AC 898 at 907: -
"In such cases a contract or an express trust as at the time of the acquisition may not be established, because of lack of certainty or consideration or non-compliance with statutory requirements of writing, but a constructive trust may be established by an inferred common intention subsequently acted upon by the making of contributions or other action to the detriment of the claimant party.
And it has been held that, in the absence of evidence to the contrary, the right inference is that the claimant acted in the belief that she (or he) would have an interest in the house and not merely out of love and affection."
83The Lordships were speaking of a claim between an unmarried couple, but this passage also has application here.
84The Chief Justice referred to Grant v Edwards [1986] Ch 638 and said: -
"In the judgment of Vice-Chancellor Browne-Wilkinson in Grant v Edwards his Lordship identified as two matters to be demonstrated when a party seeks to establish a constructive trust based on actual intention, first, that there was a common intention that both should have a beneficial interest, and secondly, that the claimant acted to his or her detriment on the basis of that common intention.
His Lordship pointed out that proof of such common intention can be direct, as for example, by evidence of express agreement or the making of admissions, or such common intention can be inferred from the making of contributions to the cost of a property, or meeting expenses in maintaining it." (at 355B)
85Finally, the Chief Justice observed that: -
"...in a given case the relevant events leading to the finding of an interest in the claimant may occur after acquisition [of the relevant property]." (at 355G)
86The principles of equitable and proprietary estoppel were recently considered by the Court of Appeal in Delaforce v Simpson-Cook (2010) 78 NSWLR 483. Handley AJA said: -
"The detriment that makes an estoppel enforceable is that which the party asserting the estoppel would suffer, as a result of his or her original change of position, if the assumption which induced it was repudiated by the parties estopped." (at [42])
"The court should, prima facie, enforce a reasonable expectation which the party bound created or encourage." (at [63]).
87In the same case Allsop P said: -
"Equity will look at all the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how is can be cured,
its proportionally to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation of promise made, even if not contractual in character. | [
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|
nsw_caselaw:54a636e73004de94513d9722:32 | nsw_caselaw:54a636e73004de94513d9722 | 390Robert commenced a de facto relationship with Libby in May 1987. They were married on 14 January 1994.
391Libby is employed as a part-time/casual teacher at a high school. In 2011 she was employed to teach for five days per fortnight. In 2012 Libby is employed to teach for three days per fortnight. She has not been successful in securing a permanent position.
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated
392As a result of a motor vehicle collision in 1988, Robert suffered serious injuries including an intra-cerebral haemorrhage, a complicated fracture of the right acetabulum and a dislocation of the right hip. Robert has been advised that he will require surgery and subsequent rehabilitation at some stage in the future.
393Libby has been diagnosed as having early-onset macular degeneration. Her medical costs will probably escalate in the future.
394In October 2011, Katriona suffered a severe ankle injury, which is likely to impede her ability to conduct her general medical practice.
(g) the age of the applicant when the application is being considered
395Robert was born on 2 October 1960, and is 51 years old.
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant
396Robert identifies financial contribution that he has made to the conservation and improvement of the estate of the deceased.
397In relation to the Longueville Property, Robert paid for the 1990 extensions. He also paid 1/2 the council and water rates from 1991 to 2004, and since Walter's death. He has also paid for maintenance of the property from time to time.
398Robert (and Libby) provided care to Walter and to Frances.
399As I have said earlier, before me, there was a dispute as to the need that Walter and Frances had for care during the period 1990 to 2004.
400There was no dispute that after 2004 both Walter and Frances required increasing care and that, to a large extent, that care was provided by Robert and Libby.
401I do not consider that it is necessary that I conduct a detailed analysis of the contentions of the parties about this matter. It appears to me to be clear from the evidence that, by virtue of their residence in the same house, to the extent that Walter and Frances required care it was given, if not primarily, then to a large extent by Robert and Libby.
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate
402It was not suggested that Walter had made provision for Robert during Walter's lifetime, apart from the making of the loan in 1990 of $170,000 for the construction of the extension.
403As I have set out above, leaving aside the Longueville Property, Walter has bequeathed Robert an equal 1/6 interest in his estate.
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
404In Andrew v Andrew, Hallen AsJ held: -
"While the Court will consider any explanations given by the deceased in the will, or elsewhere, for excluding a particular person as a beneficiary, such explanations do not relieve the court from engaging in the enquiry required by the Act: Slack-Smith v Slack-Smith [2010] NSWSC 625 at [27].
What an explanation may do is cast light on the relationship between the deceased and that person, at least from the deceased's perspective". (at [25]) | [
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|
nsw_caselaw:54a636e73004de94513d9722:8 | nsw_caselaw:54a636e73004de94513d9722 | Equity has always had a place in keeping parties to representations or promises." (at [3])
The equity is a broader one based on the just and conscionable satisfaction in appropriate fashion of the equity arising from the expectation created in another by encouragement or representation." (at [4])
88In Delaforce v Simpson-Cook the Court also confirmed that, following the judgment of the High Court in Giumelli v Giumelli (1999) 196 CLR 101, the notion of only affording the "minimum equity" in cases of equitable or proprietary estoppel is no longer a governing principle (at [3] per Allsop P and [59] per Handley AJA). That aspect of the Court's decision does not arise here.
Robert's case
89Thus, in relation to the constructive trust alleged, there are two matters to consider.
90First, was there a "common understanding" between Walter and Robert that Robert would have a 1/2 interest in the Longueville property?
91Robert seeks to prove such a common intention by proving the Alleged Agreement; that is an express agreement that if Robert paid for the construction of the first floor extension to the Longueville Property, Robert "would own 1/2 the Longueville Property".
92Thus, Robert's claim for a constructive trust stands or falls on the question of whether the Alleged Agreement was made.
93As I have said, at the commencement of the hearing, Robert filed an Amended Statement of Claim which abandoned an earlier plea, in the alternative, for a declaration that Walter held the Longueville Property on trust for Robert and himself "in such proportions as the court seems just".
94Second, if there was such a common understanding, did Robert act to his detriment on the basis of it?
95Similarly, in relation to the alleged representation, there are also two matters to consider. First, was the representation made? Second, did Robert act to his detriment on the basis of it?
The absence of a contradictor
96As will be seen, Robert's claim arises from a conversation that he claims he had with Walter in July 1989. The conversation occurred in an informal family setting.
97The only note made of the conversation was one made by Frances in her diary.
98Since July 1999, the first written assertion that Robert has made of the Alleged Agreement is, so far as the evidence reveals, in the pleadings in these proceedings.
99In those circumstances, I must bear in mind the oft-cited observations of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319: -
"Furthermore human memory of what was said in a conversation is fallible for a variety of reason, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene,
and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said.
All too often what is actually remembered is little more than an impression from which plausible details of then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court 'must feel an actual persuasion of its occurrence of existence'."
100I must also bear in mind that two key participants in this conversation, Walter and Frances, are not available to give evidence.
101As Brereton J said recently in Ashton v Pratt (No 2) (2012) NSWSC 3 at [18]: -
"In the case of a claim against a deceased estate founded on the oral utterances of the deceased, which only the deceased could have denied, the Court scrutinises the claimant's evidence closely [(Plunkett v Ball (1915) 19 CLR 544, 548-549 (Isaacs J);
Bovaird v Frost [2009] NSWSC 337, [45]; Varma v Varma [2010] NSWSC 786, [418] - [422]), and although there is no absolute legal requirement for it, ordinarily looks for some corroboration (Re Hodgson (1886) 31 ChD 177; Weeks v Hrubala [2008] NSWSC 162, [20] (Young CJ in Eq)". | [
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|
nsw_caselaw:54a636e73004de94513d9722:13 | nsw_caselaw:54a636e73004de94513d9722 | "Okay, so if you build a second storey and are here to look after us then you'll own half the place". (emphasis added)
145Libby went a little further when during cross-examination she was asked to give an account of this conversation without reference to her affidavit.
146She said: -
"We started to discuss about what the building would entail and Robert said to his father that it would be - he thought it would be we need to build wall to wall, you know, up to the second storey, so doubling the house, effectively, if we intended to live there long-term with our family.
We had one child, Samantha, but we intended to obviously have children, and his father said, 'oh okay, that sounds like a good idea'. Then we talked about - he said: -'Well, that way you would then basically own half the house, half the property" and Robert said yes, he supposed he would." (emphasis added)
147In the passage of Libby's evidence that I have emphasised, she initially said that Walter had referred to "half the house" and then corrected herself to say "half the property".
148The significance of this is made clear below during discussion of later comments attributed by various witnesses to Walter.
149Those conversations suggest Walter drew a distinction, in his own mind, between a half interest in the "house" (that is the physical structure) on the one hand, and a half interest in the "land" or "property" (that is the land and buildings) on the other. Libby was plainly aware of this when she gave evidence.
150Robert and Libby's affidavit evidence attributed to Walter the expression half "the place" - which could mean either the "house" or the "house and land".
151It is telling that Libby's initial response was to attribute to Walter the expression half "the house". The fact that she quickly corrected that to "half the property" indicates to me that Libby was well aware of the evidence given by others as to what Walter said, and was anxious to ensure that her evidence was consistent with her husband's case.
152It is evident from Frances's diary that this conversation occurred on 24 July 1989, two days after the conversation at the restaurant.
153Frances's diary note reads, relevantly: -
"Rob called in & had a snack lunch before catching bus to Chatswood. Later, he & Libby came in, bringing a new electric blanket for W's (early) birthday present. Discussed possibility of building a flat on top of our house."
154This is the only contemporaneous record of what occurred on this occasion. Frances refers to the subject of discussion as being no more than "the possibility" of building the upstairs extension.
Statements attributed to Walter
155A number of witnesses gave evidence about statements that Walter made concerning his arrangements with Robert relevant to the upstairs extension.
156Gregory recalled that, during the 1990s, Walter said to him on a number of occasions: -
"Robert paid for the upstairs extension so he owns 1/2 the house. As he lives here, I will make provision in my will so Robert can buy the rest of you out if he wants to when I die."
157Gregory recalled that, on a number of occasions in the early 2000s, Walter said to him: -
"Robert and I each own half the house, but really the value is in the land."
158Gregory recalled that, on one such occasion, Walter pointed to a nearby house that had been recently demolished and rebuilt, despite being extensively renovated and extended only a few years earlier.
159I have referred to a meeting which took place on 4 July 2009. I shall return to the circumstances of that meeting below. Gregory said that, after the meeting, Walter said to him words to the effect: -
"What does Robert want? He has always wanted to live here and we let him build upstairs after his accident when he couldn't have afforded to buy in Longueville otherwise. I acknowledge that he paid for upstairs and so it should be his. | [
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|
nsw_caselaw:54a636e73004de94513d9722:31 | nsw_caselaw:54a636e73004de94513d9722 | 375The fact that Robert gave this evidence is a factor capable of relevance to, although as I will explain below, not in the result determinative of, the manner in which I approach the second stage of the enquiry under s 59 of the Act.
The section 60 Factors
376I know turn to the various factors enumerated in s 60(2) of the Act.
377I will consider these matters in the context of the two stage process referred to above (adequacy of provision, and, if inadequacy be found, the provision which ought to be made) as this will permit the application of the statutory criteria to be weighed comparatively in relation to the claims.
378Where necessary, I shall also consider the competing claim of Robert's five siblings as, in effect, the beneficiaries named in Walter's will in relation to the 2/3 of the Longueville Property: see Lajcarova v Todorov (supra) at [96].
379To some extent, this analysis will involve repetition of matters set out above in relation to the constructive trust claim and of the matters considered above under the heading "The provision made for Robert".
(a) any family, or other, relationship between the applicant and the deceased person, including the nature and duration of the relationship
380This aspect has been dealt with at some length earlier in this judgment.
381Robert is Walter's youngest son. He lived with his parents at the Longueville Property until he was about 21 years of age. In 1990, after a divorce and a serious motor vehicle accident, he moved back into the Longueville Property, first downstairs and subsequently upstairs upon completion of the extension. He has lived upstairs (with Libby and their children) since then.
382The evidence shows that Robert had a close relationship with both his parents for most of the time they lived together at the Longueville Property. I have referred above to the falling out with Walter in June 2009.
383As I have mentioned, Robert provided care to his parents.
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate
384It was not suggested that, apart from any obligation, or responsibility, arising as a result of their relationship as parent and child, Walter had any legal, or financial, obligation to Robert imposed upon him by statute or common law.
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered
385It was not suggested in argument that there was any notional estate, or that the matters in this sub-paragraph were otherwise relevant.
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate
386I have set an outline of Robert's financial position above.
387I have set out in an annexure to this judgment, the outline prepared by Mr Meek of the financial position of Robert, and the Siblings. Mr Anderson did not suggest there to be any inaccuracy in this summary. So far as the summary refers to Robert's financial position, it includes some of the matters I have referred to above.
388Each of the Siblings accepted that they were in a comfortable financial position.
389All of the Siblings, except Martin, said they did not assert that their financial position was a reason why no further provision should be made for Robert under Walter's will. Martin said he had no view about the matter and that it was a matter for the Court.
(e) if the applicant is cohabiting with another person - the financial circumstances of the other person | [
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|
nsw_caselaw:54a636e73004de94513d9722:21 | nsw_caselaw:54a636e73004de94513d9722 | 261As I have mentioned, in the statutory declaration of 13 October 2009 Walter said that "at first" he thought that the "conditions on the new will suggested by the solicitor were much to Robert's advantage but then "I agreed to them".
262This may explain Robert's recollection of Walter saying that under the "new will" Robert would get a "one fifth" equity in the house and Libby's recollection that Walter said he had decided to leave you "20% of the house". The will made by Walter several weeks later, on 22 July 2009 provided, as we have seen, for Robert to have a 1/3 interest in the property.
The 4 July 2009 meeting
263On 4 July 2009 a meeting took place at the Longueville Property attended by Walter, Katriona, Gregory, Robert and Libby.
264Gregory prepared "Meeting Notes" which described the purpose of the meeting as: -
"Drafted update of Dad's will and his wishes with regards to the distribution of equity in the house and property at 78 Kenneth Street Longueville."
265Those notes suggest that someone at the meeting had a copy of a draft of Walter's will. That draft is not in evidence. It was common ground that I should not infer that the draft will present on 4 July 2009 was in the same terms as that executed by Walter 18 days later on 22 July 2009.
However, the notes prepared by Gregory make clear that the draft will did provide (as did that executed on 22 July 2009) that Robert receive 1/3 of the equity in the Longueville Property with Helen, Katriona, Martin, Michele and Gregory receiving an equal share of the balance.
266At that meeting, Robert presented a sheet containing various calculations.
267Robert said that: -
"It was a sheet that outlined a minimum claim based on legal advice I had as to a constructive trust and was not framed to actually represent the agreement. It was merely as an opener for discussion to try - because my father had advised Libby that we had no claim at all and we were there at the goodness of his heart."
268Robert's note read as follows: -
1990 Proportion of Whole Proportion of Improvement
Land $350,000.00 46.67%
House $150,000.00 20.00% 37.50%
Renovations $250,000.00 33.33% 62.50%
Total Value $750,000.00
2009
Land $1,260,000.00
House $ 465,000.00
Renovations $ 833,333.33 $ 775,000.00
Total Value $2,500,000.00 $ 1,240,000.00
269In that note Robert was asserting that, as at 1990, the Longueville Property, prior to the renovations, was worth $500,000 of which $350,000 was referrable to the value of the land, as opposed to the improvements.
Robert was arguing that the expenditure of $250,000 on the "renovations" added that dollar figure to the value of the Longueville Property, giving a total value, after renovations, of $750,000.
Thus Robert was arguing that the renovations had increased the value of the Longueville Property by 50 per cent and represented 33.33 per cent of their overall value. The calculation also suggested that 62.5 per cent of the value of the improvements was attributable to the renovations.
270The calculations also attributed a then present value of $2.5 million to the Longueville Property of which 62.5 per cent ($775,000) was argued to represent the then value of the 1990 renovations.
271After the meeting, Gregory's prepared "Meeting Notes" were circulated to those present.
272Robert returned the notes, with his annotations.
273The relevant part of Gregory's notes together with Robert's annotations is as follows. Robert's annotations are in italics. The passages struck through were also part of Robert's annotations: -
"Dad's will regarding the house and property
Katriona explained the rationale behind Dad's updated will, referring to the draft will sent by Michael O'Neill. Clauses 7 & 8 relate to Dad's wishes with regards to distribution of the equity in the house and property at 78 Kenneth Street Longueville: 5/15 to Robert; 2/15 to each of his other five children. | [
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|
nsw_caselaw:54a636e73004de94513d9722:12 | nsw_caselaw:54a636e73004de94513d9722 | Frances: Yes, her daughter and son-in-law live downstairs and she lives upstairs."
135As I have mentioned earlier, Frances made a note of this conversation in her diary.
136Before setting out what Frances's diary note said, I should make a number of observations about Frances's diaries in general.
137It is evident that Frances was a passionate diarist. She maintained a daily diary in which she set out, in great detail, her daily activities and observations about such matters as her painting activities (she was, I have been told from the bar table, a noted artist), details of visits and telephone conversations from family and friends and a myriad of other such matters.
A selection of Frances's diary takes up some 400 pages of the Court Book. I have been told that these entries did not comprise all those that Frances made over the years.
138Frances's diary entry for 22 July 1989 includes the following entry: -
"This evening we took Rob & Libby to dinner at Don Pacos. Rob asked W. abt. possibility of their building a dwelling on top of our house. W thought it a good idea."
139There is no earlier reference in Frances's diaries to the notion of Robert and Libby "building a dwelling on top of our house". The language used by Frances in her diary note of 22 July 1989 suggests that she was hearing about this "possibility" for the first time.
140If, as Robert asserts there had been, an earlier reference to it, it seems to me likely that Frances would have made a note of it in her diary. The fact that she did not, suggests to me that either there was no such earlier reference or, if there was, it was made by Robert only in casual or fleeting terms.
Fourth conversation
141This is the critical conversation in which, according to Robert, the Alleged Agreement was made.
142Robert's account of the conversation is as follows: -
Robert: "Now that you've had some time to think about our idea to build a second storey and be here to look after you.
Father: Yes, yes. So how big a second storey do you wish to build?
Robert: I thought that we'd just replicate the existing house, and go up wall-to-wall, giving us enough room for our family as well.
Father: Yes, that's good.
Mother (from the kitchen): We need a new roof.
Father: Yes, yes. So if you build this second storey and move in to help look after us and the house, then I suppose you'll own half the place.
Robert: Yes, I suppose I will.
Father: Okay.
Robert: That way we won't have to buy another house for us to live in, so I'd like to get going with building as soon as possible.
Mother (from the kitchen): Oh yes we'll need to, as these things take time.
Robert: As you know, I'm expecting to receive more than what the building of a second storey will cost, from the accident.
Father: Yes, I know.
Robert: As I currently don't have the full amount of money to cover the costs, are you able to lend me the money to fund it, or should I just get a mortgage? Libby and I have enough to pay for some of it, like the fittings and stuff.
Father: No, no, I should be able to get it out of L'Orana (the family company) so I'll lend you the money as long as you pay me interest on it.
Robert: How much interest do you want?
Father: I think whatever Macquarie Bank will pay for their cash management trust plus 2%.
Robert: Oh, okay...I think that's similar to what a mortgage would cost me anyway." (emphasis added)
143As I have mentioned, in her initial affidavit, Libby made no reference to this conversation.
144In her later affidavit, after production of Frances's diaries, Libby said that, during a further conversation (to that at the Crows Nest restaurant) which took place a few weeks later at the Longueville Property, Walter said words to the effect: - | [
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|
nsw_caselaw:54a636e73004de94513d9722:34 | nsw_caselaw:54a636e73004de94513d9722 | 426This factor is not relevant in the present case.
(p) any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered
427As I have mentioned, at the meeting on 4 July 2009 with Walter, Katriona and Gregory, Robert (and Libby) argued that, so far as concerns the Longueville Property, Walter should leave Robert 1/3 interest in that property "outside of the division apportioned by any will".
428Before me, Mr Anderson did not put Robert's claim for family provision on this basis.
429Mr Anderson argued that provision should be made on the basis of "the same facts" as those relied upon in relation to Robert's claim for a construction, being matters of detriment and reliance (expenditure on the extensions at the Longueville Property and the allegedly foregone opportunity to purchase in the Longueville area).
430Mr Anderson's written submissions did not address the Act claim and, ultimately his oral submission in regard to the Act were: -
"As a fall back position, if your Honour decided that there was [not] an entitlement to a one half interest, then nevertheless your Honour would make an order under the Succession Act for greater provision than that which is already made based on the same facts."
(In the transcript the word "not" is missing but that was the sense of the submission Mr Anderson put).
431Mr Meek submitted that a factor relevant to my overall consideration of the claim for provision was that Robert had, as it were, staked his claim in the proceedings upon the existence of the Alleged Agreement and that he should not be permitted to seek provision on a basis inconsistent with that argument.
432I accept that there is some force in this submission although, as I will discuss now, I do not think it decisive.
Conclusion as to provision
433Taking all these matters into consideration, and in particular the matters discussed above under the heading "The provision made for Robert", the conclusion I have come to is that, so far as concerns the Longueville Property, the provision made by Walter for Robert in clauses 8 and 9 of his will is not adequate.
434This is because such provision does no more than recognise Robert's investment in the property and provide for recoupment by Robert of the value of that investment.
435In effect, Walter has made no provision for Robert in relation to that part of the Longueville Property as does not represent his investment in it.
436Walter said he wished to treat his children equally. But, in my opinion, the effect of clauses 8 and 9 of Walter's will (which, as I have discussed, is to be contrasted with clause 10, had it been engaged) is that, in relation to the Longueville property, he has not done so.
437I take into account what I regard as Robert's misstatement of his financial position, so far as concerns the lodgement of income tax returns. I also take into account that the provision I intend to order be made for Robert out of the estate is not that which, in terms, was advocated on Robert's behalf and does not reflect the Alleged Agreement.
438The conclusion I have reached is that the position that Robert put forward at the meeting of 4 July 2009 was reasonable, namely that, based on the 1990 figures he then posited, proper provision for him involved recoupment of his investment in the Longueville Property, together with an equal share with the Siblings in the balance of the value of that property.
439I have made findings concerning credit critical of Robert. But I do not think those findings affect this conclusion. Nor do I think it appropriate to allow those findings to deter me from addressing the questions posed by the Act and answering those questions in accordance with the requirements of the Act, as explained in the authorities.
440In my opinion, the proper provision that should be made for Robert, in addition to the 1/3 interest left to him in the will, is that he should also receive an equal share, with his five siblings, in the remaining 2/3 of the property. | [
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|
nsw_caselaw:54a636e73004de94513d9722:23 | nsw_caselaw:54a636e73004de94513d9722 | 285Thus, the argument was based solely on the value, in 1990 terms, of Robert's expenditure.
286I would read the additional words "outside of the division apportioned by any will" as reflecting Robert's contention at this time that, quite apart from his "investment" (my word) in the Longueville property, he had a legitimate expectation of receiving, in Walter's will, and over and above recoupment of his "investment", an equal 1/6 share with his Siblings in the Longueville Property.
287I will return to this contention when considering Robert's claim under the Act.
288For present purposes, however, the fact Robert (and Libby) did not agitate the existence of the Alleged Agreement points strongly to the conclusion that they were not confident it provided a secure basis upon which to argue for an interest in the Longueville Property.
The caveat
289Eleven days later, on 13 July 2009, Robert lodged on the title of the Longueville Property the caveat to which I have referred above.
290As I have mentioned, that caveat did not exert the existence of the Alleged Agreement, nor, indeed, any agreement between Robert and Walter.
291The caveat claimed that Robert had an interest pursuant to a constructive trust and claimed that the facts giving rise to that constructive trust were that: -
"The Registered Proprietor is a constructive trustee for part of the property in favour of the caveators, Robert Frohlich and Elizabeth Frohlich."
292I have referred above to the evidence that Robert have as to why no assertion was made in the caveat of any agreement between Robert and Walter. I do not accept that evidence.
293Further, what is striking is that the constructive trust asserted was for "part of the property".
294Although Robert said that he obtained advice from the solicitor, to whom I referred, in respect of the caveat, the caveat does not purport to be prepared by a solicitor and nominates the street address of the Longueville Property as the address for service of notices. The caveat has all the appearance of having been prepared by Robert himself.
295However that may be, and even if, contrary to my finding, a solicitor had advised Robert that he could not in the caveat refer to an agreement, if Robert truly thought that the agreement with Walter was that Robert was entitled to a half share in the Longueville Property, my opinion is that Robert would have asserted the constructive trust for "half", not merely "part" of the property.
296That fact that Robert did not do so is explicable, in my opinion, only upon the basis that he did not believe that there was any such agreement.
Claim for constructive trust - the result
297In all these circumstances, I am not satisfied that there was an agreement between Robert and Walter of the kind for which Robert contends.
298In my opinion the evidence establishes no more than that it was the common understanding between Walter and Robert that if Robert financed the construction of the second storey on the Longueville Property he would have an interest in half of the resultant expanded dwelling; the "house" itself - not half of the Longueville Property as a whole.
299I find that Robert has failed to establish the Alleged Agreement.
300The sole basis upon which Robert argued for a constructive trust was the Alleged Agreement. As I have found that there was no such agreement, Robert's claim for a declaration of the existence of a constructive trust must fail.
301I have mentioned that, in the alternative, Robert sought an order that the Longueville Property be charged with the sums contributed by him to the second storey extension. That claim was not argued in final submissions and has, as I understand it, been abandoned.
Claim pursuant to section 59 of the Succession Act 2006
302In the alternative to his claim for a constructive trust, Robert makes a claim for family provision.
303As Walter died on 22 May 2010 the applicable legislation for dealing with Robert's family provision claim is the Act, rather than the now repealed Family Provision Act 1982. | [
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|
nsw_caselaw:54a636e73004de94513d9722:1 | nsw_caselaw:54a636e73004de94513d9722 | (c)alternatively, a declaration that Walter's interest in the Longueville Property be charged with the sums contributed by Robert to the second storey extension of the house property situated on the Longueville Property and to its conservation and maintenance;
(d)alternatively, an order pursuant to s 59 of the Succession Act 2006 (the Act) that provision be made for Robert's maintenance out of Walter's estate, and, particularly an order providing for the transfer by Katriona and Timothy, as executors of Walter's estate, to Robert of a half share of the Longueville Property.
9When the proceedings were commenced, Robert also sought, in the alternative to the declaration referred to in paragraph [8](a) above, a declaration that Walter held the title and interest in the Longueville Property upon trust for Robert and himself "in such proportions as the court seems just".
By an Amended Statement of Claim filed at the outset of the hearing on 19 March 2012, that claim was abandoned.
10So far as concerns the declaration referred to in paragraph [8](c) that Walter's interest in the Longueville Property be charged with the sums contributed by Robert, that matter was not pursued in final submissions and is, as I understand, not pressed.
11The questions for determination by me are thus whether the constructive trust alleged has been made out and, in the alternative whether provision should be made for Robert under the Act.
The Basis of the Constructive Trust Claim
12The basis of Robert's claim for a constructive trust is an agreement that he alleges that he reached with Walter in July 1989 (the Alleged Agreement) and a representation allegedly made by Walter in 1993.
13The Alleged Agreement is said to have arisen from a conversation between Robert and Walter at the Longueville Property. It is clear from a reference in a diary kept by Frances that this conversation took place on 24 July 1989. Present on that occasion were Robert, Libby, Walter and Frances.
14Robert claims he had two earlier conversations with Frances, and one with both Walter and Frances that led to the 24 July 1989 conversation.
15The 1993 representation allegedly arose out of a conversation at the Longueville Property between Robert and Walter some time after May 1993.
16The pleaded case is that: -
"In 1989 [Robert] entered into an agreement with Walter to pay for the cost of a first floor extension to the Longueville Property to provide accommodation for [Robert and Libby], and to enable Robert to provide ongoing care for Walter and Frances, on the basis that Robert would own half the Longueville Property" and;
"In or about 1993, Walter promised [Robert] that he would leave him half the Longueville property in his will".
17It is also pleaded that:
"In reliance on the promises, [Robert] performed the bargain and acted to his detriment in failing to obtain alternative accommodation for himself and his family".
Matters not in dispute
18There is no dispute about the following matters.
19In September 1988 Robert and Libby were involved in a motor vehicle collision. As a result Robert suffered serious injuries including an intra-cerebral haemorrhage, a complicated fracture of the right acetabulum and a dislocation of the right hip.
He remained in hospital for about eight weeks and was unable to return to his previous employment as a location sound recordist in television. He was left with significant shortening of the leg and requires the use of a walking stick.
20By 1989 all of Robert's siblings, except Michele, had left the Sydney metropolitan area. They have not since returned. Katriona is a medical practitioner who lives at Blackheath. Martin is a primary school principal who lives at Adamstown Heights near Newcastle.
Gregory is also a primary school principal who lives at Tuggerawong on the central coast of New South Wales. Helen is a musician/music teacher who lives at Clear Creek near Bathurst.
21In around March 1990 Robert and Libby moved into a spare room at the Longueville Property. | [
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|
nsw_caselaw:54a636e73004de94513d9722:33 | nsw_caselaw:54a636e73004de94513d9722 | 405There is evidence about the testamentary intentions of the deceased.
406First, there are the remarks made by Walter to Martin, Gregory and Michele that I have set out above.
407Second, Walter made two earlier wills, in 1993 and 1999. I have discussed those wills above. I found those wills to be equivocal in the context of Robert's contentions concerning the Alleged Agreement.
408However, they do suggest that Walter long recognised the appropriateness of making a bequest to Robert in respect of the Longueville Property to reflect his expenditure on the property, and over and above a bequest in Robert's favour qua his position as one of Walter's six children.
409Third, Walter made the statutory declaration of 13 October 2009 in which he stated, as I have earlier set out, that he had under his will provided Robert with "significantly greater benefits" than his other children "because Robert had spent money building at Longueville and as he didn't have a house that would appreciate in value, like my other children, I did not want him to be disadvantaged"
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so
410There is no evidence of any direct maintenance by Walter of Robert.
411Walter did permit Robert and his family to live upstairs at the Longueville Property without charge, other than 1/2 of utilities and, until 2004, 1/2 the council and water rates.
412I do not think this factor weighs heavily, if at all, in the balance.
413After all, Robert and his family were living in that part of the house Robert had paid for.
(l) whether any other person is liable to support the applicant
414In early 1993, Robert received approximately $500,000 in compensation for the injuries he sustained in the accident of 1988.
415Otherwise, apart from the Commonwealth Government's responsibility to continue to provide Robert (along with all other Australians) with a pension in due course, there is no other person with a liability to support him.
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
416Mr Meek submitted that there was evidence that Robert had treated Walter in a "shabby" fashion from time to time.
417Mr Meek pointed to some acrimonious correspondence from Robert to Walter in July 2009, after the falling out, and to Robert's evidence that, thereafter, he hardly spoke to his father.
418It does seem clear that Walter and Robert became estranged in mid 2009, to the point where Robert did not visit his father in hospital immediately before his death.
419However, I am not able to form view about the rights and wrongs (if there are any) of those circumstances.
420In my opinion it is necessary to look at Robert's relationship with Walter in a broader view and in the context that, for almost 20 years Robert (and Libby) lived with Walter and Frances in relative harmony.
421It is true that Frances's diary notes point to occasions of family friction, which may have been caused by Robert's sharp reaction to events.
422In cross-examination, Katriona, who is a medical practitioner, agreed that it was not uncommon for people who had suffered injuries of the kind suffered by Robert following the 1988 accident "to become, in general parlance, a little bitter and twisted".
423That may explain Robert's reaction to some events over the years.
424I do not think it is a factor on which I can place any particular weight when evaluating Robert's claim for provision.
(n) the conduct of any other person before, and after, the date of the death of the deceased person
425There was no conduct of any other person relevant to my consideration of this matter.
(o) any relevant Aboriginal or Torres Strait Islander customary law | [
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|
nsw_caselaw:54a636e73004de94513d9722:29 | nsw_caselaw:54a636e73004de94513d9722 | 352But I do not think it reasonable to assess the "value" of Robert's contribution by reference to the present value of the improvements on the property. Nor, it seems, did Walter.
353In these circumstances I find that Walter's bequest to Robert, in clauses 8 and 9 of his will, of a 1/3 interest in the Longueville Property was intended by Walter to do no more than return to Robert his "investment', in 1990 terms, in the Longueville Property, and that, in broad terms that is in fact the effect of the bequest.
354The corollary of that finding is a finding that Walter did not intend to, and did not in fact in clauses 8 and 9 of his will, make any bequest to Robert in respect of the Longueville Property qua Robert's position as his child, notwithstanding his earlier statements to the effect that he wished to deal with all his children equally.
355Instead, by clauses 8 and 9 of his will, Walter has left to the Siblings, alone, that part of the value of the Longueville Property that does not, in this sense, represent recoupment to Robert of his "investment". He has left Robert no part of that part of the property's value.
356This is to be contrasted with clause 10 of the will which, had it been engaged, would have left Robert an equal share in that part of the property's value.
357In my opinion, these matters point to the inadequacy of the provision made by Walter for Robert in clauses 8 and 9 of his will.
358However, there are other matters I must consider.
Robert's financial circumstances
359An applicant for family provision must make a full and frank disclosure of his or her financial circumstances. One reason for this is that, absent such disclosure, the Court cannot make an informed determination as to adequacy of provision.
360In Mann v Starkey [2008] NSWSC 263 White J said: -
"It has often been said that an applicant for provision must make a full and frank disclosure of his or her 'financial and material circumstances' (eg Fraser v Venables (Supreme Court of New South Wales, McLaughlin M, 30 September 1998 unreported); BC9805011; Draper v Nixon [1999] NSWSC 629 at [35];
Bennett v Bennett [2001] NSWSC 987 at [23]; Ernst v Ryf [2001] NSWSC 1167 at [37]; Van Ooyen v O'Driscoll [2002] NSWSC 445 at [55], [56]; Zaleski v Patterson [2005] NSWSC 54 at [42]; Troy v Slede [2005] NSWSC 1080 at [20]; Wheatley v Wheatley [2006] NSWCA 262 at [26]).
" (at [25])
361Mr Meek submitted that Robert had failed to make full and frank disclosure and that the Court could not be confident that he had placed before it all of the financial resources available to him.
362Robert disclosed assets which he valued at approximately $1.67 million, including a property at 49 Mawson Street, Shortland. He also disclosed assets in Libby's name, including a property at 285 Coxs River Road, Little Hartley, valued at $454,475. The total assets disclosed were said to be worth in the number $2.25 million against which liabilities of sum $750,000 were disclosed.
363Robert disclosed that his and Libby's total income was in the order of $93,000 per year and that their total monthly expenses were in the order of $14,500 such that: -
"Our combined monthly expenses exceed our gross monthly income by approximately $7,682 per month. We live on month by month basis and are unable to save any money."
364Mr Meek was not able to point to any particular asset, or source of income that either Robert or Libby had failed to disclose.
365However, Robert was given notice to produce his personal income tax returns, and those of his company, Bigger Than Ben Hur Pty Limited.
366He gave evidence that his last personal tax return was filed in respect of the year 30 June 2006. He later purported to correct this by saying that his last tax return was filed in respect of the year 30 June 2007. He agreed that he had not caused Bigger Than Ben Hur Pty Limited to lodge a tax return since the year ended 30 June 2008. | [
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|
nsw_caselaw:54a636e73004de94513d9722:17 | nsw_caselaw:54a636e73004de94513d9722 | 210The reference to "Jenny" was a reference to Robert's former wife. At the time of the conversation litigation was on foot between Robert his former wife. Libby gave evidence that, at the time of this conversation, Robert's former wife had caused to be served on Walter a subpoena to produce documents and that Walter was very concerned about that development.
211Libby gave a similar account of the conversation. She also attributed to Robert the words "my part ownership of the house".
212The fact that Robert referred to his part ownership "of the house" (rather than of "the property" or something similar) may suggest, in my opinion, that Robert had the same understanding as Walter as to the arrangements between them and thus as to the subject of the Alleged Agreement.
213Certainly, that must have been how Walter understood what Robert said.
214I accept that, in common parlance, one often speaks of "my house" as meaning not only the physical structure of a home, but also the land upon which it is built.
215Whether this is what Robert had in mind is something that must be further considered in light of later events.
Robert's evidence concerning reliance
216 Robert gave the following evidence in his affidavit under the heading "Reliance and Detriment": -
"Had my father not said that I would have a 50% share of the house before construction started, and subsequently that he would leave me 50% of the house in his will, I would not have borrowed money to construct the second storey. Instead, Libby and I would have purchased a house in the local area. The house two-doors down Kenneth Street sold for $531,000 at about that time."
217Both Robert and Libby gave evidence that, in or around 1989 and 1990 they were looking in the Longueville area to buy a property.
218Before me, there was debate as to whether between the date of the Alleged Agreement in July 1989 and the commencement of construction at the Longueville Property in September 1990, Robert and Libby could have afforded to purchase a property in Longueville.
219In my opinion, to a large extent, this debate was beside the point.
220What Robert must show is that, first, there was a common intention that he would have beneficial interest in the Longueville Property, and second, that he acted to his detriment on the basis of that common intention.
221Leaving aside the question of precisely what that common intention was, it seems to be plain that Robert acted to his detriment by borrowing money from Walter to effect the extensions, committing himself to repayment of that loan (with interest) and using his own funds to pay the balance needed to carry out the work.
222Robert and Libby gave evidence that, but for the alleged agreement with Walter, they would have looked to purchase a house in the Longueville Property area for an amount in the vicinity of $500,000.
223I accept Mr Meek's submission that the evidence shows that it was unlikely that Robert and Libby could have afforded to purchase such a property in 1989 or 1990.
224At that time Robert said he had approximately $80,000 in liquid assets which could have been used as a deposit for a property. Had Robert used such funds to pay a deposit on the property, he (and/or Libby) would have had to borrow something in the order of $400,000 to buy a property of the kind proposed.
There is no evidence that, in 1989 and 1990 Robert and Libby could have serviced such a loan. On the contrary, the evidence points strongly to the conclusion that they could not.
225However, at that time, Robert had a legitimate expectation that he would receive a substantial payment by way of compensation for the injuries sustained in the 1988 accident. Ultimately, in early 1993 he received a payment in the order of $515,000. | [
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|
nsw_caselaw:54a636e73004de94513d9722:11 | nsw_caselaw:54a636e73004de94513d9722 | 126Robert gave evidence of four conversations in 1989 which he described in his affidavit as "conversations forming the basis of the agreement".
First conversation
127Robert gave evidence of the following conversation with Frances: -
Robert: "You appear upset, Mum. What's the matter?
Mother: Your father is letting the place go to rack-and-ruin, it's very hard for me to turn these taps off, the lights switches are starting to not work and the roof is leaking...
Your father is allowing the place to get run-down, as he figures we're getting old, he's planning on selling-up and moving us into a retirement village, because all he needs is somewhere where he can sleep, read his newspaper and eat the meals which his wife prepares for him.
I don't want to leave Longueville, my life is here, and I don't want to have to get rid of all my things so that he can move us into somewhere smaller. He's only thinking about himself."
128Although Robert had not referred to Libby's presence in his affidavit, in cross-examination Robert said that Libby was present on this occasion.
Second conversation
129Robert said this conversation occurred at the Longueville Property. In cross-examination he said Libby was also present (although there is no reference to this in Robert's affidavit). According to that affidavit the following conversation occurred: -
Robert: "Mum, you know how you mentioned that Dad intends to sell the house soon and move you into a retirement village, well Libby and I have an idea.
Mother: What's that?
Robert: You know how Libby and I have been looking to buy a house around here?
Mother: Yes.
Robert: We thought that maybe it would be a good idea if we we were to rip the old roof off this house and build a second storey. That way you won't have to move, as we will live here to be around to look after you into your old age. The house will also get a new roof in the process, because I should be able to pay for it with the money I get from the accident.
Mother: That does sound like an idea... That would be a wonderful idea, but you'll have to talk to your father about that. As it's his house, you'll have to ask him."
130Libby made no reference to the first or second conversations in her affidavit although, as I have mentioned, she did say in cross-examination that at the time she swore her first affidavit, she could recall having some conversations with Frances. It may well be that these are those conversations.
131Both Robert and Libby were challenged in cross-examination about whether or not they were in a position to "buy a house around here" as Robert claims he said to Frances. I will return to that aspect below.
Third conversation
132This is the conversation that, in their initial affidavits, both Robert and Libby placed as having taken place at the Black Stump restaurant in North Sydney.
133According to Robert's affidavit, the following conversation took place: -
Robert: "Mum told us the other day that you are intending to sell Longueville and move into a retirement village soon, and as the house is in need of a new roof...
Father: Yes, I've been thinking of selling soon, because we don't need such a big house anymore.
Robert: Well you know that Libby and I have been looking to buy a house locally, so we've been thinking that maybe it would be a good idea if we were to build a second storey on Longueville so that Mum and you can stay there as you get older and won't have to move out. That way we will be around to look after you both into your old age.
Father: Yes, that sounds like a good idea.
Mother: Yes, I think it is as well.
Robert: This was Libby and I will be around to look after the lawns and maintenance of the property."
134In her first affidavit, Libby gave an account of this conversation (also placing it at the Black Stump restaurant). Libby's account of the conversation is very similar to that of Robert's, although Libby also said the following took place: -
Frances: "I think it is a good, my friend's daughter did that.
Libby: Built a second storey on her home? | [
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|
nsw_caselaw:54a636e73004de94513d9722:15 | nsw_caselaw:54a636e73004de94513d9722 | 178However, its final form was prepared by Mr O'Neill who attended on Walter, read to him the statutory declaration, and witnessed his signature on it. Mr O'Neill had sworn an affidavit in the proceedings (concerning costs) but was not cross-examined about the circumstances of the statutory declaration (or at all).
179In those circumstances, my opinion is that there is no reason to doubt that the statutory declaration represents an accurate statement of Walter's views on the date it was made.
180In the statutory declaration Walter said: -
"There was no agreement made with Robert and Libby concerning my house before they built upstairs at No 78 Kenneth Street Longueville. My understanding was that they would build upstairs where they would live and that Frances and I would continue to live downstairs. I would remain the owner of the property...
The only remarks I ever made to Robert were words to the effect, 'I don't want to invest too much money downstairs because whoever buys the property after Mum and I go will probably pull down the house and put his own building up'.
In my opinion the value of the property has always been in the land. As far as resale goes the additions have probably made no difference at all to the property's value. Many local houses have been demolished and the new owners have built from scratch...
....my current will does in fact provide Robert with significantly greater benefits than those which I have provided to my other children. I did this because Robert had spent money building at Longueville and as he didn't have a house that would appreciate in value, like my other children, I did not want him to be disadvantaged...
As stated above there was never any agreement about Robert and Libby having any equity in the land."
181I do not read the statutory declaration as being a repudiation by Walter of what Gregory, Martin and Katriona had reported that Walter had said earlier, namely that, in Walter's view, Robert had an "interest" in the Longueville Property which Walter described as being something to the effect "half the house".
182Rather, what Walter was at pains to state in the statutory declaration was that there was not what he regarded as an "agreement" to that effect.
183That seems to be consistent with a conversation Libby said occurred a few months earlier, on 21 June 2009 in which she says Walter denied there was an "agreement" and said: -
"What agreement? There was nothing in writing, so there was no agreement. You put in $250,000 and I am being generous and leaving you $500,000."
184I shall return to this conversation further when I consider in more detail the events of 2009.
Statements by Robert about his interest in the Longueville Property
185Michele and Martin said that Robert had never asserted to them that Walter had said that he had a half interest in the Longueville Property.
186Robert asserted that he said to Gregory "I own half of Longueville".
187Gregory said that he could not recall that conversation but would have disputed the assertion, had it been made.
What was the common intention?
188It seems probable that some arrangement or understanding was reached between Walter and Robert concerning the manner in which his proposed expenditure on the first floor extension would be recognised.
189As a matter of ordinary human experience, it seems highly unlikely that Robert would agree to fund the extension without receiving from Walter some indication of a means by which he would retain the benefit of that expenditure.
190On Robert's own account of it, all that was said was that Walter "supposed" that if Robert built "the second storey" he would own "half the place". On that account, Robert said that he "supposed" he would.
191On Robert's account, Walter referred to owning half the "place", rather than half the "property" or the "house". | [
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|
nsw_caselaw:54a636e73004de94513d9722:24 | nsw_caselaw:54a636e73004de94513d9722 | 304However, it was common ground that the principles developed in the case law under the Family Provision Act will, for the most part, be applicable to claims under the Act: see Hulme v Graham [2010] NSWSC 1281 per Hallen AsJ.
305There is no dispute that Robert, as a son of the deceased, is an "eligible person" within the meaning of s 57(1)(c) of the Act.
306The key provision of the Act is s 59. The test to be applied under this section is a two-stage test: Singer v Berghouse (No 2) (1994) 181 CLR 201.
307The first stage is a question of fact, namely whether Walter has made adequate provision for Robert's proper maintenance, education and advancement in life.
308The aim of the first stage is to assess whether the court can make an order for provision. As Hallen AsJ said in Lajcarova v Todorov [2011] NSWSC 522: -
"Unless the court comes to the conclusion that inadequate provision has been made, it is not empowered to make an award. This is commonly referred to as 'the jurisdictional question'. At this stage, the court will consider whether it can make an order for provision for the maintenance, education and advancement in life of a particular applicant". (at [79]; emphasis in original).
309The second stage, should it arise, involves an exercise of discretion. The court must assess whether provision ought to be made in Robert's favour.
310The object of the second stage is to assess whether the court should make an order for provision. As Hallen AsJ said in Lajcarova v Todorov:-
"At the second stage, the court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the court at the time the order is made. The fact that the court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour." (at [84]; emphasis in original).
311Although Hallen AsJ was then considering a claim under the Family Provision Act 1982, there was no suggestion before me that I should adopt a different approach.
312It is clear that the determination of the second stage involves similar considerations to that of the first stage: Singer v Berghouse (No 2) at 209-210.
313Section 60(2) of the Act sets out the matters to which the court may have regard when determining whether to make a family provision order, namely:
"a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the (deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
(e) if the applicant is cohabiting with another person-the financial circumstances of the other person,
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g) the age of the applicant when the application is being considered, | [
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|
nsw_caselaw:54a636e73004de94513d9757:24 | nsw_caselaw:54a636e73004de94513d9757 | They are unlikely to have intended that different disputes should be resolved before different tribunals, or that the appropriate tribunal should be determined by fine shades of difference in the legal character of individual issues, or by the ingenuity of lawyers in developing points of argument."
118Similar remarks were made by Allsop J (as his Honour then was) in Comandate Marine Corp supra at [164], Finn and Finklestein JJ agreeing:
"[164]Relevant to the above process, as part of the surrounding circumstances, is the fact that this is a standard form international contract, often used in the commercial time chartering of working ships. The parties did not refer us to any authorities on the scope of clause 45.
That is not to say, however, that that international context does not remain relevant. Regard should be had in construing clause 45 to the clear tenor of approach internationally in construing arbitration clauses in international agreements.
The authorities (to which I will refer shortly) are clear that a liberal approach should be taken. That is not to say that all clauses are the same or that the language used is not determinative.
The court should, however, construe the contract giving meaning to the words chosen by the parties and giving liberal width and flexibility to elastic and general words of the contractual submission to arbitration."
119See also Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102 at [41]-[42]; Global Partners Fund Ltd supra at [60]-[65] per Spigelman CJ, Giles and Tobias JJA agreeing; Lipman Pty Limited supra at [6]-[8].
120That is not to say that the words of the clause can be given a meaning they do not have to satisfy a perceived commercial purpose. Such an approach would be inconsistent with the approach to construction of contracts to which I have referred above. As stated by French J in Paper Products supra at 444 the scope of disputes covered by an arbitration clause must depend on the language of the clause.
Similar statements were made by Allsop P whilst a judge of the Federal Court, in Walter Rau supra at [41] and Comandate Marine Corp supra at [164] and in this Court in Lipman Pty Limited supra at [6]-[8]. Rather, the words of an arbitration clause should be, to the extent possible, consistent with the ordinary meaning of the words, liberally construed.
121It follows that it is not appropriate for this Court to adopt what Lord Hoffman described in Fiona Corporation supra at [12]
as a "fresh start" and construe clauses irrespective of the language in accordance with the presumption that the parties are likely to have intended any dispute arising out of the relationship into which they have entered to be decided by the same tribunal unless the language makes it clear certain questions were intended to be excluded:
Fiona Corporation supra at [13].
Whilst the presumption that parties intended the same tribunal to resolve all their disputes may justify a liberal approach consistent with the plain meaning of the words in question, the approach suggested by Lord Hoffman is contrary, in my opinion, to the approach laid down by the High Court as to the construction of commercial contracts.
122In reaching this conclusion I am conscious that the Court of Appeal in Western Australia in Paharpur Cooling Towers Ltd v Paramount (WA) Ltd [2008] WASCA 110, cited the speech of Lord Hoffman in Fiona Corporation supra with approval, stating at [39] that: "It was consistent with the approach taken in Australia".
To the extent their Honours were stating that the approach was reflective of the liberal approach to which I have referred above, that is uncontroversial. However, to the extent their Honours were suggesting a particular rule of construction be applied irrespective of the plain meaning of the words, I am unable to agree. | [
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nsw_caselaw:54a636e73004de94513d9757:5 | nsw_caselaw:54a636e73004de94513d9757 | HPPL and the Hancock Group are desirous of obtaining the undertakings of the Covenantor to wholly retract, cease and desist from any such activities now and in the future.
E.The parties hereto by their execution hereof acknowledge that the primary nature of the HPPL business, is very long-term, complex, large-scale mining projects.
The HPPL business necessitates long term consistent business plans, and many dealings with third parties on a strictly confidential basis, and the contrary, short-term and time consuming demands of the Covenantor, linked to his use of sensationalist media to publicise his contrary views, are opposed to the careful focus required and successful achievement and attainment of HPPL's interests.
Accordingly, the Board of HPPL, having considered the matter in depth, has resolved that the making of the payments to the Covenantor under this Deed is necessary in order to enable the required focus and to protect the confidential nature of information, including with third parties, the business, prosperity and the future profitability of HPPL."
"2.Release of the Releasees by Covenantor
The Covenantor hereby wholly releases and discharges all and singular the Releasees and each of them and all of the successors in time and title of them and each of them from all and any obligations they and each of them may have to him in any manner and in any capacity whatsoever as at the date of execution hereof.
3.Further Releases by Covenantor
Without limiting or derogating from the provisions of clause 2 herein, the Covenantor additionally:
(a)hereby releases and forever discharges all and singular the Releasees from all and any liability, claims, demands, suits and actions of any nature whatsoever and any loss, injury or damage that might be caused to the Covenantor therefrom, and the liability of the Releasees in respect of any such claim is hereby absolutely extinguished, discharged and in all respects ended;
(b)abandons any claims against all and singular the Releasees which he may, but for this provision, at the date of executing this Deed have had on any account whatsoever;
(c)will not bring or make any other claim or proceeding against all and singular the Releasees or any one or more of them that is in any way connected with or incidental to the matters the subject of this Deed or any earlier claims;
(d)acknowledges that this Deed may be pleaded in bar against any claim or proceeding by him against all and singular the Releasees; and
(e)releases and forever discharges all and singular the Sisters from all and any liability, claims, demands, suits and actions of any nature whatsoever and any loss, injury or damage that might be caused to the Covenantor therefrom, and the liability of the Releasees in respect of any such claim is hereby absolutely extinguished, discharged and in all respects ended."
8Further disputes arose between the parties to the Trust Deed which led to the execution in August 2006 of the Settlement Deed. The parties to this deed included GHR, JLH, GHFR, BHR, HRW and HPPL. The construction and effect of the Settlement Deed, and particularly cl 20 thereof, is the subject of the present proceedings.
9It is convenient to set out the relevant portions of the Settlement Deed in full.
10The recitals so far as relevant provide as follows:
"(B)JLH and BHR, HGRW, GHFR are the natural children of GHR and with GHR they constitute the total present class of capital and income beneficiaries of the HMH Trust.
(C)GHR, the Trustee, JLH, BHR, HGRW, GHFR, HMHTI and 150 together constitute one hundred per cent (100%) of the legal and beneficial owners of all of the issued share capital of HPPL.
(D)Those of the parties hereto who are parties to the Porteous Settlement Deed and who are parties to the Deed of Obligation and Release desire by their execution hereof to reaffirm and ratify the same." | [
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] | What is the purpose of the Settlement Deed, and who are the parties to it? | [
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nsw_caselaw:54a636e73004de94513d9757:4 | nsw_caselaw:54a636e73004de94513d9757 | Judgment
1BATHURST CJ: The appellants in these proceedings, Gina Hope Rinehart ("GHR") and Ginia Hope Frances Rinehart ("GHFR") appeal against the orders of Brereton J declining to order a stay of proceedings brought against GHR by the respondents Hope Rinehart Welker ("HRW"), John Langley Hancock ("JLH") and Bianca Hope Rinehart ("BHR").
Summary of Conclusions
2I have reached the following conclusions:
(a)The respondents' claim, viewed in isolation from the defences raised by the appellants, is not a dispute under clause 20 of the Confidential Settlement Deed of August 2006 (the "Settlement Deed") (see [114]-[127] below).
(b)The fact that the appellants rely on various provisions of the Settlement Deed in the defences does not lead to the conclusion that the whole dispute, and in particular the respondents' claims, arise under the Settlement Deed (see [128]-[148] below).
(c)Claims such as those made by the respondents in the present case are capable of settlement by arbitration (see [164]-[183] below).
(d)As a matter of discretion, no part of the proceedings should be stayed (see [184]-[192] below).
(e)The primary judge did not err in declining to refer the proceedings to mediation (see [193]-[194] below).
(f)In these circumstances the appeals should be dismissed.
Background
3The appellant GHR is presently the trustee of a trust ("the Trust") created by a deed of settlement dated 27 December 1988 by Mr Langley George Hancock ("the Trust Deed"). The principal assets of the Trust are shares in a company Hancock Prospecting Pty Limited ("HPPL").
4The Trust Deed provided that on the death of Mr Hancock, GHR became absolutely entitled to a proportion of the shares in HPPL, which constituted part of the Trust fund.
The balance of the shares in the fund were to be held by the trustee on trust until the date on which the youngest of the surviving children of GHR attained the age of 25 years, described as the vesting date. Thereafter the shares were to be held by the trustee on trust for the survivors as tenants in common in equal shares.
5Clause 7 of the Trust Deed gave power to the trustee prior to the vesting date to alter or vary any of the trusts provided in the Trust Deed, subject to the provisos that any such variation shall not alter the entitlements or benefits of GHR in the Trust, and shall be solely for the benefit of all or any one or more of the children of GHR.
6The Trust Deed was amended by a deed of amendment dated 24 August 1995. The only amendment of significance for present purposes was the insertion of cl 7H, a "Governing Law" clause.
It provided that the Trust Deed and Trust were to be governed by the laws of Western Australia, but also sought to exclude the operation of certain provisions of the Trustee Act 1962 (WA). The provisions are not material for present purposes.
7By 2005, disputes had arisen between various parties to the Trust Deed. The nature of the disputes is not relevant for present purposes. However, resolution of the disputes resulted in GHR, JLH, GHFR, HRW, BHR and various other parties entering into a deed described as a "Deed of Obligation and Release".
In that deed, JLH, described as the Covenantor, gave extensive releases to the other parties to the deed in consideration of certain payments and other benefits being conferred on him by HPPL and other companies related to the Rinehart family. Of relevance to the present proceedings are recitals D and E to, and cll 2 and 3 of, the Deed of Obligation and Release, which provide as follows:
"D.
Having particular regard to the commercial interests and the commercial sensitivities of the Hancock Group (and the potential for the Covenantor to negatively seek exposure with the public or with the media particularly during periods of negotiation of large commercial projects such as the Hope Downs Project currently under complex negotiation by HPPL at the date of execution of this Deed), | [
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] | What was the decision of the Court in Rinehart v Welker [2012] NSWCA 95 regarding the stay of proceedings? | [
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nsw_caselaw:54a636e73004de94513d9757:22 | nsw_caselaw:54a636e73004de94513d9757 | notwithstanding the fact that the beneficiaries, when they entered into the Settlement Deed, could not have known of, or consented to on a fully informed basis, the breaches of trust.
They submitted that these latter issues raised important policy questions for the administration of trust estates, which should be decided by the court rather than in private arbitration.
Appeal of HPPL: Respondents' submissions
103In response to the submissions of HPPL, the respondents, whilst recognising that as a general proposition a liberal approach should be taken to the construction of arbitration clauses, submitted it was important to recognise the limits of this proposition.
They submitted that the principle did not require all arbitration clauses be given an identically broad meaning, and did not entitle the words to be given a meaning which they do not have.
They stated that there was no presumption as to the interpretation of such clauses nor legal rule that a dispute falls within an arbitration clause unless a court can be persuaded with positive assurance that the clause is not susceptible to any meaning that would include the dispute.
104The respondents also submitted that different considerations may apply in respect of an arbitration clause relating to a dispute between beneficiaries of a trust and a clause in relation to an international commercial agreement.
They submitted that if the parties did in fact intend cl 20 to apply to every dispute concerning GHR's position as trustee of a trust irrespective of its nature, subject matter or timing, the court's inherent supervisory jurisdiction over the trust would be fully denuded.
105So far as the particular clauses relied upon by HPPL were concerned, the respondents submitted that cl 1.1 only related to claims in existence at the time of the entry into the Settlement Deed.
They submitted further, that cl 1.1(a)(ii) did not apply because it only related to attempts to replace GHR with a non-Hancock Family Group Member. They stated that cl 7(c) had no operation for the same reason.
106The respondents further submitted that cl 1.1(a)(iv) had no operation for the additional reason that GHR was not being sued as a director but rather in her capacity as trustee.
107The respondents otherwise relied on what they had said in answer to the written submissions of GHR and GHFR, and in respect of HPPL's reliance on cll 10.1 and 13 of the Settlement Deed and cl 2 of the Deed of Obligation and Release adopted the reasoning of Brereton J.
108On the hearing of the appeal senior counsel for the respondents pointed to the fact that there was no arbitration clause in the Trust Deed.
He submitted that to the extent that cases such as Fiona Corporation supra and Comandate Marine Corp supra mandated a liberal approach to the construction of arbitration agreements,
they were concerned with international commercial arbitration principles, and such an approach should not be adopted in construing a deed which it was suggested imposed significant limitations on the rights of beneficiaries of a trust.
109Senior counsel for the respondents emphasised that the events said to amount to misconduct arose in September 2011, five years after the execution of the Settlement Deed. He submitted that GHR's refusal to provide accounts and other information concerning the Trust was unreasonable and the accounts were something which the trustee was obliged to provide.
110So far as the ambit of the dispute was concerned, senior counsel for the respondents emphasised that it was necessary to characterise the dispute. He submitted that the respondents' dispute involved a breach of the trustee's obligations which, irrespective of the defences raised, was not a dispute under the Settlement Deed. | [
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] | What approach should be taken to the construction of arbitration clauses in the context of a trust estate, according to the respondents in Rinehart v Welker [2012] NSWCA 95? | [
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nsw_caselaw:54a636e73004de94513d9757:3 | nsw_caselaw:54a636e73004de94513d9757 | Gina Frances Rinehart and Ginia Frances Hope Rinehart sought leave to appeal and the respondents, by notice of contention, contested the primary judge's finding that their claims were properly arbitrable. Hancock Prospecting Pty Ltd also sought leave to appeal. At the outset of the hearing leave to appeal was granted, and the appeals were heard and determined together.
ISSUES ON APPEAL
(a) Whether the respondents' claim was a dispute within the scope of the arbitration clause in the Settlement Deed:
(i) Whether in construing arbitration clauses, the word "under" should be construed more narrowly than phrases such as "arising out of", "in connection with", and "in respect to", or the presumptive approach of the UK Supreme Court in Fiona Trust & Holding Corporation v Privalov [2007] 4 All ER 951 adopted; and
(ii) Whether the provisions of the Settlement Deed invoked by the appellants rendered the respondents' claim a dispute "under" the Settlement Deed.
(b) Whether claims for orders pursuant to the courts' statutory, inherent or equitable jurisdiction to vary a trust and remove a trustee are arbitrable.
(c) Whether declining to stay proceedings where part of the relevant dispute falls within the arbitration clause and part does not constitutes an error of discretion.
(d) Whether the failure to refer the dispute to mediation constituted an error of discretion.
HELD (Dismissing the Appeal):
1. (Per Bathurst CJ; McColl JA and Young JA agreeing): The words of an arbitration clause should be, to the extent possible consistent with the ordinary meaning of the words, liberally construed.
The approach adopted in Fiona Trust & Holding Corporation v Privalov [2007] 4 All ER 951, that arbitration clauses are to be construed irrespective of language in accordance with the presumption that the parties are likely to have intended any dispute arising out of the relationship between them to be decided by the same tribunal, unless clear language to the contrary existed should not be followed.
The phrase "under this deed" has consistently been given a narrower construction than phrases such as "arising out of the deed" or "in connection with the deed".
2. (Per Bathurst CJ, Young JA agreeing): A dispute is "under this deed" if the outcome of the dispute is "governed or controlled" by the deed, regardless of whether the claimant is invoking or enforcing a right created by the deed.
3. (Per McColl JA): a "dispute under this deed" refers to disputes regarding the rights and obligations created by the deed and which depend upon the deed for their enforcement.
4. (Per Bathurst CJ; McColl JA and Young JA agreeing): The claims made by the respondents are not disputes "under this deed".
The appellants' potential defences do raise disputes "under this deed"; however those defences will not necessarily determine the outcome of the proceedings, and thus do not render the respondents' claim one "under this deed". It is appropriate to consider, without finally determining, the merits of the defences in reaching this conclusion.
5. (Per Bathurst CJ; McColl JA agreeing; Young JA dissenting): The claims made by the respondents are arbitrable. Neither the statutory jurisdiction of the court, the nature of the relief sought, the allegations made, nor the courts' supervisory jurisdiction of the administration of trusts render the dispute incapable of arbitration.
6. (Per Young JA): A claim for the removal of a trustee is not arbitrable. The potential difficulties in enforcing an arbitrator's award against a former trustee make it undesirable that disputes in this area be referred to arbitration.
7. (Per Bathurst CJ; McColl JA and Young JA agreeing): As the respondents' claim is not "under this deed" there was no error of discretion in refusing to stay the proceedings, even if the potential defences do raise disputes under the deed. The primary judge correctly exercised his discretion.
8. (Per Bathurst CJ; McColl JA and Young JA agreeing): The primary judge's refusal to refer the dispute to mediation did not constitute an error of discretion. | [
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] | What is the approach to construing arbitration clauses in New South Wales, according to the decision in Rinehart v Welker [2012] NSWCA 95? | [
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nsw_caselaw:54a636e73004de94513d9757:0 | nsw_caselaw:54a636e73004de94513d9757 | Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Rinehart v Welker [2012] NSWCA 95
Hearing dates: 8 February 2012
Decision date: 20 April 2012
Before: Bathurst CJ at [1]; McColl JA at [196]; Young JA at [218]
Decision: 1. Leave to appeal granted
2. Appeals dismissed with costs
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system.
Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: PRACTICE AND PROCEDURE - Stay of proceedings - Referral to arbitration - Arbitration clause - Construction of arbitration clauses.
PRACTICE AND PROCEDURE - Stay of proceedings - Referral to arbitration - Agreement to refer "any dispute under this deed" to arbitration - Construction - Whether claim pursuant to Trustee Act 1962 (WA) and court's inherent and equitable jurisdiction a "dispute under this deed" - Relevance of defences invoking deed.
PRACTICE AND PROCEDURE - Stay of proceedings - Referral to arbitration - Claim pursuant to Trustee Act 1962 (WA) and court's inherent and equitable jurisdiction - Claims by beneficiaries to remove a trustee and vary trust - whether arbitrable.
PRACTICE AND PROCEDURE - Stay of proceedings - Civil Procedure Act 2005 s 67 - Exercise of discretion - Referral to arbitration - Part of dispute within scope of arbitration clause - Whether error of discretion to refuse stay.
PRACTICE AND PROCEDURE - Stay of proceedings - Civil Procedure Act 2005 s 67 - Exercise of discretion - Mediation clause - Whether error not to refer to mediation.
Legislation Cited: Building and Construction Industry Security of Payment Act (NSW) 1999
Civil Procedure Act 2005 (NSW) s 67
Commercial Arbitration Act 1985 (WA) s 33, s 37, s 38, s 39, s 40, s 53
Companies Act 2006 (UK) s 994
Corporations Act 2001 (CTH) s 232
Judiciary Act 1789 (US) s 25
Sherman Act 1890 (US)
Trade Practices Act 1974 (CTH) s 82, s 87
Trustee Act 1962 (WA) s 42, s 77, s 79, s 85 s 90, s 94
Cases Cited: A Best Floor Sanding Pty Limited v Skyer Australia Pty Limited [1999] VSC 170
ACD Tridon Inc v Tridon Australia Pty Limited [2002] NSWSC 896
Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; (2005) 223 CLR 251
AMEC Civil Engineering Ltd v Secretary of State for Transport [2005] 1 WLR 2339
Andco Nominees Pty Limited v Lestato Pty Limited [1995] 126 FLR 404; (1995) 17 ACSR 239
Armitage v Nurse [1998] Ch 241
Bristol Corporation v John Aird [1913] AC 241
BTR Engineering (Australia) Ltd v Dana Corporation [2000] VSC 246
Camilla Cotton Oil Co v Granadex SA [1976] 2 Lloyd's Rep 10
Channel Tunnel Group Limited v Balfour Beatty Construction Ltd [1993] AC 334
Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337
Cohens v Virginia 19 US (6 Wheat.) 264 (1821)
Comandate Marine Corp v Pan Australian Shipping Pty Limited [2006] FCAFC 192; (2006) 157 FCR 45
Collins (Contractors) Ltd v Baltic Quay Management (1994) Ltd [2004] EWCA Civ 1757
Cunningham-Reid v Buchanan-Jardine [1988] 2 All ER 438; [1988] 1 WLR 678
Czarnikow v Roth Schmidt & Company [1922] 2 KB 478
Desputeaux v Editions Chouette (1987) Inc [2003] 1 SCR 178 | [
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|
nsw_caselaw:54a636e73004de94513d9757:10 | nsw_caselaw:54a636e73004de94513d9757 | Appeals of GHR and GHFR: Procedural history and pleadings
21Further disputes arose between the parties which led to the filing of a summons on 5 September 2011 by HRW, JLH, BHR and GHFR, in respect of GHR's conduct as trustee of the Trust.
22On 17 October 2011 an amended summons was filed by HRW, JLH and BHR. GHFR had by that time determined not to seek the relief sought by her brothers and sisters and joined with GHR in opposing it. As a consequence, she was named as a defendant.
23By the amended summons the respondents thereto sought an order that GHR as trustee of the Trust provide accounts for the Trust for the years 1992 to date and the accounts of HPPL for the same period. They also sought certain orders pursuant to s 90 of the Trustees Act or in the court's equitable jurisdiction varying the Trust Deed.
What was sought in effect was that the Trust fund be split into two portions to be held on separate trusts, the first relating to that portion of the fund to which GHR was beneficially entitled and the second relating to the funds to which the respondents and GHFR were beneficially entitled.
The amended summons sought a consequential order that GHR be removed as trustee of the second trust to be established.
24The amended summons also sought declarations that GHR had misconducted herself in the administration of the Trust and an order appointing such of the children of GHR who consent as the trustees of the new trust in favour of the children of GHR.
25As an alternative to the orders sought above, the respondents sought an order that GHR be removed as trustee of the Trust and such of her children who consent be appointed as trustee in substitution.
26Particulars of misconduct were supplied. It is unnecessary to set out the particulars in any detail but it should be noted that the conduct complained of was conduct which occurred in the period between 3 September 2011 and 8 September 2011. However, cl 12 of the Schedule of Particulars sought to reserve the right to add further particulars after discovery.
27By notices of motion dated 16 September 2011 and 6 October 2011 respectively, GHR and GHFR moved the Court under s 67 of the Civil Procedure Act 2005 seeking orders that the proceedings be stayed. They contended that the dispute was one arising under the Settlement Deed and that cl 20 required the parties to resolve their dispute by confidential mediation and arbitration.
28The motions for stays were dismissed by Brereton J on 7 October 2011: Welker & Ors v Rinehart & Anor (No. 2) [2011] NSWSC 1238. GHR and GHFR sought leave to appeal from that decision.
Directions were made for the concurrent hearing of the leave application and the appeal and at the outset of the hearing of the appeal the Court indicated without objection from the parties that leave would be granted.
29Subsequent to the decision of Brereton J, each of HRW, JLH and BHR filed statements of claim in the proceedings. On 20 January 2012, GHR filed a defence. A defence was filed by GHFR on 8 February 2012. Notwithstanding the fact that the statements of claim and defences were not before Brereton J, none of the parties objected to the Court referring to them for the purpose of the appeal.
30The statements of claim, which are in identical form, make similar allegations to those set out in the summons and in the particulars, but also make a substantive broader claim in respect of failure to supply information.
31In par [55] of the statements of claim the respondents plead that in their capacities as beneficiaries of the Trust they requested copies of various documents from the trustee, GHR, including copies of the accounts of the Trust since the date of death of Mr Hancock.
In par [56], they plead that on 22 October 2011 they sought a large number of other documents from GHR in their capacity as beneficiaries. In par [58] they claim that as beneficiaries of the Trust they are entitled to such documents and in par [59] that GHR has refused to supply these documents to them. | [
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|
nsw_caselaw:54a636e73004de94513d9757:12 | nsw_caselaw:54a636e73004de94513d9757 | A claim that she should do something that she has not agreed to do is not a claim that depends on or derives from clause 9.1. In any event the plaintiffs' present claim, for removal of the first defendant as trustee, does not invoke, involve, derive from or depend on clause 9.1 in any way."
38The primary judge also held that the releases in cl 6 of the Settlement Deed did not lead to the conclusion that the dispute was a dispute "under this deed".
He reached this conclusion first because the respondents' application to replace the trustee with persons who were themselves Hancock Family Group Members was not within the definition of "Claim" (at [36]) and second because the definition of "Claim" was limited to claims existing or discontinued at the time of the Settlement Deed (at [37]).
He reached the same conclusion in relation to cl 11 of the Settlement Deed.
39The primary judge also rejected the contention by GHFR that because she asserted as an alternative to GHR continuing as trustee that a non-family member be appointed as trustee, this was now a "Claim" as defined by cl 1.1(a)(ii) of the Settlement Deed.
The primary judge held (at [42]) that just because such a claim may be within the definition of "Claim" it does not depend on or derive from the Settlement Deed; only such claims as existed or had been discontinued as at the date of the Settlement Deed are released.
He further concluded that even if the alternative propounded by GHFR was a "Claim" "under this deed", it was not one advanced by the respondents and in those circumstances cl 20 had no operation.
40The primary judge also rejected arguments based on cl 7(d) and 7(e) of the Settlement Deed. The primary judge accepted that a dispute as to whether or not the respondents were engaging in "disparagement" in contravention of cl 7(d) would be a dispute under the Settlement Deed subject to it not being void as contrary to public policy (at [44]).
However, he held that disparagement was not the subject matter of the proceedings, let alone the respondents' claim, and was, therefore, not a claim under the Settlement Deed.
41So far as cl 7(e) was concerned the primary judge again held that as the respondents did not invoke or rely on any right given by cl 7(e), their claim did not depend on or derive from it (at [46]).
He rejected the argument by GHFR that the proceedings were a challenge to the rights of GHR under the Settlement Deed, stating that the expression "title or interest" in any trust in which they or any member of the Hancock Group is a beneficiary was a reference to title or interest as a beneficiary, and not as trustee.
He reached this conclusion for the following reasons. First, that the clause identifies the relevant interest by reference to the beneficiaries, as distinct from the trustee. Second, that cl 1.1(a)(ii) evinced an intention not to preclude claims for removal of the trustee, so long as the proposed replacement was a family group member.
Third, that the construction contended for would preclude any attempt to remove the trustee for breach of trust prospectively, before the breach had taken place. This would be void as contrary to public policy so far as it involved an inability to remove a trustee for breaches of core obligations to act honestly and in good faith.
Fourth, he stated the reference to the Hancock Group in that clause did not affect the position, as the clause would operate harmoniously by applying to shareholders in respect of companies and beneficiaries in respect of trusts.
Finally, he said the intention of cl 7(e) was that the parties accepted the rights of each other in the Hancock Group and any relevant trust as they then existed, not to prevent the recognition of future changes to the trust. | [
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|
nsw_caselaw:54a636e73004de94513d9757:25 | nsw_caselaw:54a636e73004de94513d9757 | 123So far as the clause in question is concerned the phrase "under this deed" has consistently been given a narrower construction than phrases such as "arising out of the deed" or "in connection with the deed". In Samick Lines Co Ltd v Owners of the Antonis P Lemos [1985] AC 711, Lord Brandon, with whom the other of their Lordships agreed, made the point in the following fashion (at 727):
"I would readily accept that in certain contexts the expression 'arising out of' may, on the ordinary and natural meaning of the words used, be the equivalent of the expression 'arising under' and not that of the wider expression 'connected with'.
In my view however, the expression 'arising out of' is, on the ordinary and natural meaning of the words used, capable, in other contexts, of being equivalent of the wider expression 'connected with'. Whether the expression 'arising out of' has the narrower or the wider meaning in any particular case must depend on the context in which it is used."
124In Paper Products supra, French J considered the meaning of the phrase "any dispute between the parties hereto arising under this agreement". His Honour made the following comments (at 448):
"Case citations and examples could be multiplied but there is little point. When the language of the arbitration clause in question is sufficiently elastic, then the more liberal approach of the courts to which Kirby P and others have referred can have some purchase.
A wide construction of such clauses can be supported on the basis advanced by Clarke JA that it is unlikely to have been the intention of the parties to artificially divide their disputes into contractual matters which could be dealt with by an arbitrator and non-contractual matters which would fall to be dealt with in the courts.
When, as here, the parties have agreed upon a restricted form of words which in their terms, and as construed in the courts, limit the reference to matters arising ex contractu, there is little room for movement.
I am satisfied that neither the trade practices claim, nor the claims for breach of warranty and negligent misstatement can be said to arise out of the agreement. They all arise out of matters which are antecedent to the contract even though they may involve questions which also go to its performance.
No authority has been cited to me which would support the wide construction of the clause contended for by Tomlinsons and certainly the natural meaning of the words does not support their extension to disputes arising out of matters antecedent to the agreement.
I come to this conclusion with some regret because I have no doubt, having regard to the various provisions of the agreement which have been set out, that much of the evidence in this case would go to the actual performance of the machines and would be evidence of the kind that one would expect to hear in an action for breach of contract.
It may be that the resort to the Trade Practices Act, negligent misstatement and breach of collateral warranty is made necessary because of the limiting provisions of the agreement.
It is of course possible that the parties may consent to have their dispute referred to arbitration. However, there is nothing in the language of the agreement which would justify an order for the stay of these proceedings. In the circumstances, the motion will be dismissed."
125In BTR Engineering (Australia) Ltd v Dana Corporation [2000] VSC 246, Warren J (as her Honour then was) interpreted the word "under" to mean "governed, controlled or bound by; in accordance with", at [27].
A similar construction was given to the word by Hargrave J in TCL Airconditioner (Zhongshan) Co Ltd v Castel Electronics Pty Limited [2009] VSC 553 at [34], his Honour describing himself as "adopting a broad meaning".
As I indicated earlier (at [36]) the primary judge took the view that the words "under this deed" in the present case involved enforcing or invoking some right created by the Settlement Deed. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:6 | nsw_caselaw:54a636e73004de94513d9757 | The entity HMHTI is a company, HMHT Investments Pty Limited. The entity 150 is a company, 150 Investments Pty Limited. The Porteous Settlement Deed refers to a deed dated 15 September 2003. These companies and the Porteous Settlement Deed do not have any bearing on these proceedings.
11Clause 1.1(a) of the Settlement Deed defines the expressions "Claim" and "Proceedings" in the following terms:
"Claim means:
(a)any claim, demand, action, suit or proceeding whether existing or discontinued, whether at law, under statute, in equity or otherwise:
(i)for damages, injunctions, debt, restitution or other remedy including, without limitation, breach of fiduciary duty of whatever nature and howsoever arising with respect to events or matters arising or actions taken prior to the date of this deed but not including any claim,
demand, action, suit or proceedings arising as a consequence of the obligations and releases which any of the parties to this deed have agreed to in the Deed of Obligation and Release or the Deed of Loan or the Porteous Settlement Deed;
(ii)with respect to any attempt to remove or vary the Trustee or any subsequent Hancock Family Group Member as trustee of the HMH Trust and replace the trustee with a person or entity who or which is not a Hancock Family Group Member; and
(iii)any damage, loss, liability, costs, charge, expense, outgoing or payment;
(iv)any action against any of the Directors of any company within the Hancock Group, including without limitation, the Other Directors; and
(b)without limitation of clause (a) includes any claim made in the Proceedings;
(c)any damage, loss, liability, costs, charge, expense, outgoing or payment; and
(d)without limitation of sub-clause (a) includes any claim made in the Proceedings; and
(d)without limitation of sub-clauses (a) and (b) includes any claim made in any proceeding or any discontinued proceeding and any documents to support such claim and without limitation and for clarity in the case of the Proceedings includes the unsigned draft affidavit of JLH;
...
Proceedings (whether existing or discontinued or the subject of disputed discontinuance) mean Supreme Court of Western Australia action numbered CIV 1327 of 2005 of the parties to which are the HMH Trust and GHR and to which JLH is seeking to be joined."
12Clause 3 of the Settlement Deed so far as relevant, contains the following affirmations and acknowledgment:
"3(ii)All parties to this deed which or who were parties to the Deed of Obligation and Release reaffirm and ratify the Deed of Obligation and Release and all their obligations and releases thereunder.
3(iii)The parties acknowledge that the obligations of the Hancock Group, due to HDIO's ownership and interest in the Hope Downs Tenements and pursuant to the HDJVA and HDIO's obligations under financing arrangements for its interest in the HDJV may include the following:
(a)as a result of the HDJV transaction a Capital gains tax of $36,856,597.00;
(c)no repayment of or contribution by the HMH Trust for all expenditure by HDIO to date on the Hope Downs Tenements, overheads and HDJV costs, and including without limitation the financing costs for HDIO's interest in the HDJV; and
(d)HDIO, and where relevant HPPL, will continue to finalise and maintain to the best of its endeavours, the required financing for HDIO's interest in the Hope Downs Joint Venture."
13HDIO is a wholly owned subsidiary company of HPPL, and HDJV refers to the unincorporated joint venture between members of the Hancock Group and the Rio Tinto Group.
14Clause 5 of the Settlement Deed contains various distribution covenants by HPPL and the trustee. It is not necessary to set them out in detail. However, the beneficiaries' entitlements to distributions under this clause are conditional upon them not breaching any obligations under the Settlement Deed. In that context cl 5(d) provided as follows: | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:23 | nsw_caselaw:54a636e73004de94513d9757 | In those circumstances it was submitted that the Court had no power to stay the respondents' dispute and that it was not an incorrect exercise of discretion to decline to send that part of the dispute (the defences) which may arise under the Settlement Deed to arbitration. He submitted that each side may have different disputes but the respondents' dispute fell outside the Settlement Deed.
111In response to the reliance by GHR on cl 21 of the Settlement Deed, senior counsel for the respondents submitted that the use of different language in cl 21 served to emphasise the narrow construction which should be given to the words "under this deed" in cl 20. He submitted that the parties were careful to use different words to apply to the different circumstances envisaged by the clause.
112So far as the demands for accounts were concerned, it was submitted that there was no release from the provision of such information in the Settlement Deed and to the extent that there was one in the earlier Deed of Obligation and Release such a release was only given by one of the respondents, JLH.
113So far as the exercise of discretion was concerned, it was submitted that this was a matter of practice and procedure and that this Court should be wary of interfering with the exercise of discretion by a primary judge in this area.
Consideration: Construction and scope of cl 20 of the Settlement Deed
114Because of the competing submissions of the parties it is necessary to say something about the correct approach to the construction of arbitration clauses generally.
115The approach to be adopted in relation to the construction of such clauses is, in my opinion, no different to the construction of any other contractual provisions.
The clause, like any other clause in a contract, is to be construed objectively. The principles were stated by the High Court in Toll (FGCT) Pty Limited v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 in the following terms (at [40]):
"[40]This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined.
It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.
References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement.
The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction."
116That does not mean that the court is entitled to disregard clear and unambiguous language used by the parties to produce results which the surrounding circumstances may indicate are more commercial or business-like: Western Export Services Inc v Jireh International Pty Limited [2011] HCA 45; (2011) 86 ALJR 1.
Resort may only be had to surrounding circumstance where the words in question exhibit uncertainty or ambiguity: Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 352.
117It has frequently been stated that arbitration clauses should not be construed narrowly. In Francis Travel supra, Gleeson CJ made the following remarks (at 165):
"When the parties to a commercial contract agree, at the time of making the contract, and before any disputes have yet arisen, to refer to arbitration any dispute or difference arising out of the agreement, their agreement should not be construed narrowly. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:38 | nsw_caselaw:54a636e73004de94513d9757 | Once it is established that the claim for removal of the trustee did not arise under the Settlement Deed, this Court has no power to refer that claim to arbitration. There are therefore two alternatives; stay the proceedings pending determination of the issues raised by the defence or refuse the stay.
188In my opinion, it would not be appropriate to stay the proceedings pending determination of the defences. As I have indicated, the releases in cl 6 and the provisions of cll 7, 11 and 13 of the Settlement Deed do not bar the claim. They will not be relevant to a claim for removal of the trustee arising out of misconduct subsequent to the date of the Settlement Deed.
Whether the other defences raised will result in a refusal of the relief could only be determined in the context of a consideration of the allegations of the respondents and whether, even taking into account the provisions of the Settlement Deed, the conduct complained of, if made out, would render GHR unfit to remain as trustee.
189The approach which I have suggested is appropriate.
It is consistent with the approach commonly taken by courts to avoid multiplicity of proceedings and the possibility of inconsistent findings: Paharpur Cooling Towers Ltd v Paramount (WA) Ltd supra at [43]-[44];
Savcor Pty Limited v State of New South Wales [2001] NSWSC 596; (2001) 52 NSWLR 587 at [47]-[50]; Taunton-Collins v Cromie [1965] WLR 633; [1964] 2 All ER 332 at 334; McGrath v O'Sullivan [1964] NSWR 436 at 437.
190The position may be different in circumstances where that part of the claim which cannot be referred to arbitration is only a small part of the dispute: Bristol Corporation v John Aird [1913] AC 241 at 249-250; Radio Publicity (Universal) Ltd v Compagnie Luxembourgeoise de Radiodifusion [1936] 2 All ER 721 at 728. That is not the present case.
191In my opinion it is also relevant in considering this issue, that the respondents' claim relates to the proper conduct of a trustee, a matter warranting close public scrutiny: Rinehart v Welker supra at [52].
Whilst I have expressed the view that that factor would not render the dispute incapable of arbitration, it would not be a proper exercise of discretion to deny a beneficiary the right to approach the court in respect of alleged misconduct of a trustee where the issue in question was not covered by the arbitration clause.
192In those circumstances, I am of the view that the primary judge was correct in refusing a stay.
Consideration: Referral for mediation
193It was contended by the appellants that the primary judge erred as a matter of discretion in declining to refer the proceedings to mediation.
His reason for declining to make such an order was that in his view they were not yet "ripe" for mediation and further disclosure would have to take place before such a referral. The appellants, in their submissions, have not identified any error in the exercise of discretion by the primary judge.
194That being said the proceedings have progressed somewhat since the primary judge made his order. The issues have been defined by pleadings and whilst there has been no argument on the merits, the parties in the various applications which have come before the courts, have fairly clearly articulated their respective positions.
It is plainly in the interests of the parties, both personally and in preserving the Trust fund, that their disputes be resolved as quickly as possible.
In those circumstances it seems to me that an attempt to mediate this dispute sooner rather than later will be of benefit to all the parties. However, it is not up to this Court to order the parties to mediate in circumstances where no error by the primary judge has been demonstrated.
Conclusion
195For these reasons, in my opinion, each appeal should be dismissed with costs.
196MCCOLL JA: I have read the reasons of Bathurst CJ and Young JA in draft. The facts and submissions are sufficiently set out in the Chief Justice's reasons. I agree with the orders Bathurst CJ proposes for the following reasons.
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:26 | nsw_caselaw:54a636e73004de94513d9757 | It seems to me that consistent with the authorities to which I have referred, if the outcome of the dispute was governed or controlled by the Settlement Deed, then there would be a dispute under the Settlement Deed irrespective of whether the claimant was invoking or enforcing some right created by the Settlement Deed.
It may be that that was what the primary judge was referring to when he said the dispute must derive from or depend on the Settlement Deed.
126In the present case the respondents by their respective statements of claim seek orders that GHR provide information concerning the Trust, relying on their entitlements as beneficiaries.
The other orders which they seek are first, orders pursuant to the various provisions of s 90 of the Trustee Act or the court's inherent jurisdiction varying the Trust, and orders under the Trustee Act or the court's inherent or equitable jurisdiction appointing one or more of the respondents as trustee of that part of the split Trust of which the respondents and GHFR were proposed beneficiaries;
second, a declaration that GHR has misconducted herself as trustee within the meaning of s 77(2)(b) of the Trustee Act (misconduct in the administration of the Trust) and third, an order pursuant to the Trustee Act or the equitable jurisdiction of the court removing GHR as trustee of the Trust.
127None of these matters, viewed in isolation from the defences, involve invoking or enforcing any rights created by the Settlement Deed nor is their outcome generated or controlled by the Settlement Deed.
As GHR submitted (see par [64] above), a court does not remove a trustee without looking at the whole of the circumstances; that would include the Settlement Deed but it would not lead to the conclusion that the outcome was governed or controlled by the Settlement Deed.
Similarly, whilst it may be that it would be open to GHR to argue that what was done was reasonable in the context of the regime established by the Settlement Deed, this would not of itself lead to the conclusion that the outcome was governed or controlled by the Settlement Deed as distinct from the proper application of the statutory and inherent jurisdiction of the court.
128Thus far I have dealt with the position without regard to the defences. As I have indicated, the appellants contend that it is not correct to look at the respondents' claim in isolation, but rather that regard must be had to the defences foreshadowed and in fact ultimately raised.
GHR submitted that once it was contended that it was not legally open for the respondents to pursue the claims made by virtue of the provisions of the Settlement Deed, then the whole dispute was a dispute under the Settlement Deed.
As I indicated, she sought to draw an analogy between the expression "under this deed" and the expression "arising under this Constitution" or "arising under any laws made by the Parliament" submitting that once reliance was placed on any provision of the Settlement Deed, the whole dispute was governed by the Settlement Deed.
129I do not believe the analogy with the expressions "under this Constitution" or "under any laws made by the Parliament" provide particular assistance in the present case.
It is well established that once a matter arises under the Constitution or under the laws of the (Federal) Parliament, the court has full authority to deal with all matters necessary for the complete adjudication of the matter whether Federal or non-Federal, unless the non-Federal matters are severable and distinct from the matter which attracted Federal jurisdiction: Felton v Mulligan [1971] HCA 39;
(1971) 124 CLR 367 at 402-403; Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 471-472.
It is unnecessary to deal in any detail with the origin of this principle, which was ultimately derived from a decision of the United States Supreme Court interpreting s 25 of the Judiciary Act 1789 (see Cohens v Virginia 19 US (6 Wheat.) 264 (1821) at 379 relied upon in Osborne v Bank of the United States (9 Wheat. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:50 | nsw_caselaw:54a636e73004de94513d9757 | 1 of the Hope Downs Deed; Clause 1 of the 2007 Deed
iii) represented to the Plaintiffs that the 3 September Deed was required to be signed by them;
ii) denies subparagraph 64(ii) and repeats subparagraph 64(i), and says that at all times the plaintiffs were aware of the vesting date of the Trust and had previously agreed in 2006 to extend the vesting date to the maximum extent permitted by law;
iv) engaged in the conduct pleaded in (iii) above despite being aware that the Plaintiffs were not required to sign the 3 September Deed by any law or legal obligation;
Particulars clause 9.
1 of the Hope Down Deed.
v) represented to the Plaintiffs that it was necessary for them to sign the 3 September Deed before the First Defendant would agree to extend the vesting date of the Trust;
iii) admits subparagraph 64(iii) and says that the 3 September Deed had, as to part, been previously agreed to by the plaintiffs and the releases sought in the 3 September Deed were in conformity with the 3 September letter;
vi) from the time at which the 2011 Deed had been executed to at least 8 September 2011, falsely represented to the Plaintiffs and the Second Defendant that the vesting date of the Trust had not been extended;
Particulars: Hope Downs Deed
vii) from the time at which the 2011 Deed had been executed to at least 8 September 2011, deliberately concealed the fact that the vesting date of the Trust had been extended;
iv) denies subparagraph 64(iv) and otherwise repeats the mattes pleaded at subparagraphs (ii) and (iii) hereof and repeats earlier paragraphs 17, 19, 36, 37 and 38;
viii) Falsely represented to the first Plaintiff that it was necessary for her to execute one or more of:
v) admits subparagraph 64(v) and repeats paragraphs 17, 19, 36, 37 and 38 and subparagraphs (ii) and (iii) above;
an "additional agreement";
.
...
5 September 2011 Deed;
viii) denies subparagraph 64(viii) and says that the first plaintiff had previously agreed to extend the vesting date to the maximum extent permitted by law and were on notice from at least 5 September 2011 that the vesting date of the Trust had been extended;
Revised Deed Poll,
Particulars:
Clause 9.
1 of the Hope Downs Deed
If she wished the First Defendant to extend the vesting date of the Trust;
ix) denies subparagraph 64(ix) and says that the second plaintiff had previously agreed to extend the vesting date to the maximum extent permitted by law and were on notice from at least 5 September 2011 that the vesting date of the Trust had been extended;
ix) falsely represented to the Second Plaintiff that it was necessary for him to execute the Second Revised Deed Poll if he wished the First Defendant to extend the vesting date of the Trust;
Particulars: Clause 9.
1 of the Hope Down Deed; email from Mr Newby to the second plaintiff dated 5 September 2011 at 7.46pm.
x) falsely represented to the Third Plaintiff that it was necessary for her to execute the Deed Poll if she wished the First Defendant to extend the vesting date of the Trust;
x) denies subparagraph 64(x) and says that the third plaintiff had previously agreed to extend the vesting date to the maximum extent permitted by law and was on notice from at least 5 September 2011 that the vesting date of the Trust had been extended;
[Particulars omitted]
Particulars:
Clause 9.
1 of the Hope Downs Deed; email from Mr Newby to the third plaintiff dated 5 September 2011 (11.58pm)
....
...
[65] By reasons of the matters pleaded in paragraph [64] the First Defendant has:
[65] The first plaintiff [sic] denies paragraph 65 and repeats paragraph 64.
i) breached her duty to act honestly and in good faith;
ii) acted with gross dishonesty in her dealings with the beneficiaries of the trust;
iii) acted deceitfully in her dealings with the beneficiaries of the Trust.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision.
The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 23 April 2012 | [
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|
nsw_caselaw:54a636e73004de94513d9757:1 | nsw_caselaw:54a636e73004de94513d9757 | Dowling & Ors v St Vincent de Paul Society Victoria Inc [2003] VSC 454
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Francis Travel Marketing Pty Limited v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160
Fulham Football Club (1987) Ltd v Richards [2012] 1 All ER 414
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Government Insurance Office (NSW) v Atkinson-Leighton Joint Venture [1981] HCA 9; (1981) 146 CLR 206
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Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 86 ALJR 14
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Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:7 | nsw_caselaw:54a636e73004de94513d9757 | "any default by a Beneficiary under the Deed of Obligation and Release dated 1 April 2005 (or as such is amended in writing by mutual agreement of all parties thereto) shall be deemed to be a default by that Beneficiary under this deed for the purpose of this clause;"
15Clause 6 contains what are, on their face, extremely wide mutual releases. That clause provides as follows:
"6RELEASES
Each party hereto both in its own right and in any representative capacity hereby:
(a)releases and discharges each of the other parties hereto now and in the future from any Claims,
(b)Irrevocably covenants not to take any proceedings against any of the other parties to this deed in relation to any matter arising in any jurisdiction, in respect of the Claims;
(c)Withdraws and forever abandons any and all allegations made against any of the other parties to this deed in respect of or arising (in whole or in part) directly or indirectly out of:
(i)the Proceedings and any of the other Claims;
(ii)the subject matter of the Proceedings;
(iii)any claim relating to an undertaking given or costs orders made in the Proceedings,
wherever and whenever arising, whether;
(iv)known or unknown at the time of execution of this deed;
(v)presently in contemplation of such parties; or
(vi)arising under common law, equity, statute or otherwise."
16The various appellants in support of their contentions place considerable reliance on cll 7, 8 and 9 of the Settlement Deed. In these circumstances, it is necessary to set them out in full:
"7UNDERTAKINGS
Each of the parties to this deed undertakes with each of the other parties to this deed
(a)that they will not at any time do, nor attempt to do nor encourage, nor assist in any way any other party or third party to do anything which could have an adverse impact on the Hancock Group's rights under:
the Services and Commingling Agreement entered into or which may subsequently be entered into between Hamersley Iron Pty Ltd and members of the Hancock Group;
or any of the documents entered into by the Rio Tinto Group and the Hancock Group in respect of the Hope Downs Joint Venture;
or under any of the financing arrangements entered into by members of the Hancock Group in respect of the Hope Downs Joint Venture;
(b)not to challenge the right of any member of the Hancock Group to any of the Hancock Group interests at any time.
(c)not to take any steps at any time which would result in HPPL ceasing to be wholly owned and controlled by Hancock Family Group Members, including without limitation any change to the Trustee in contravention of the provisions of this Deed; and
(d)not to Disparage at any time.
(e)subject to the rights of HPPL under the Deed of Loan not to challenge the rights of any of GHR, JLH, BHR, HGRW or GHFR who execute this Deed to any of their right title or interest in any of the Hancock Group or in any trust in which they or any member of the Hancock Group is a beneficiary.
8GHR CONTROL OF HPPL
The parties hereto acknowledge that GHR by her direct ownership of the share capital of and voting power in HPPL, has control of HPPL and without limiting in any way the legal and other rights of GHR in that regard whether at law or in equity or pursuant to the Constitution of HPPL,
the parties hereto acknowledge that during her lifetime GHR shall maintain full ongoing control and management of HPPL and that GHR shall accordingly have the continuing right during her lifetime at her election from time to time to maintain or relinquish or re-establish herself as the chairman on an executive or non executive basis as she in her sole discretion shall decide of HPPL.
9VESTING OF HMH TRUST
9.1Subject to GHR's agreement at any time prior to 6 September 2011, the Beneficiaries agree to extend the vesting date of the HMH Trust to the maximum extent permitted by law or to any prior date after 6 September 2011 by agreement of the majority of Beneficiaries.
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|
nsw_caselaw:54a636e73004de94513d9757:33 | nsw_caselaw:54a636e73004de94513d9757 | 164There do not seem to be any firm principles that determine whether a particular dispute is capable of being resolved by arbitration. The position was stated in Mustill and Boyd supra in the following terms (at 149-150, citations omitted):
"In practice therefore, the question has not been whether a particular dispute is capable of settlement by arbitration, but whether it ought to be referred to arbitration or whether it has given rise to an enforceable award. No doubt for this reason, English law has never arrived at a general theory for distinguishing those disputes which may be settled by arbitration from those which may not.
The general principle is, we submit, that any dispute or claim concerning legal rights which can be the subject of an enforceable award, is capable of being settled by arbitration. This principle must be understood, however, subject to certain reservations.
First, certain types of dispute are resolved by methods which are not properly called arbitration. These are discussed in Chapter 2, ante.
Second, the types of remedies which the arbitrator can award are limited by considerations of public policy and by the fact that he is appointed by the parties and not by the state.
For example, he cannot impose a fine or a term of imprisonment, commit a person for contempt or issue a writ of subpoena;
nor can he make an award which is binding on third parties or affects the public at large, such as a judgment in rem against a ship, an assessment of the rateable value of land, a divorce decree, a winding-up order or a decision that an agreement is exempt from the competition rules of the EEC under Article 85(3) of the Treaty of Rome.
It would be wrong, however, to draw from this any general rule that criminal, admiralty, family or company matters cannot be referred to arbitration: indeed, examples of each of these types of dispute being referred to arbitration are to be found in the reported cases.
Nor should one conclude that an arbitrator cannot effectively rule on a claim or defence raised under Articles 85 or 86 of the Treaty of Rome. Unless the nature of the question is such as to render the arbitration agreement itself void, or the European Commission has itself initiated proceedings on the question, the arbitrator can and should rule on it."
165Born, in International Commercial Arbitration (2009) Klewer at 768, states the position as follows (citations omitted):
"Although the better view is that the Convention imposes limits on Contracting States' applications of the non-arbitrability doctrine, the types of claims that are non-arbitrable differ from nation to nation.
Among other things, classic examples of non-arbitrable subjects include certain disputes concerning consumer claims; criminal offences; labour or employment grievances; intellectual property; and domestic relations.
The types of disputes which are non-arbitrable nonetheless almost always arise from a common set of considerations.
The non-arbitrability doctrine rests on the notion that some matters so pervasively involve public rights, or interests of third parties, which are the subjects of uniquely governmental authority, that agreements to resolve such disputes by 'private' arbitration should not be given effect."
166In Comandate Marine Corps supra, Allsop J (as his Honour then was) in discussing the issue in the context of international commercial arbitration made the following comment (at [200]):
"First, the common element to the notion of non-arbitrability was that there was a sufficient element of legitimate public interest in these subject matters making the enforceable private resolution of disputes concerning them outside the national court system inappropriate. Secondly, the identification and control of these subjects was the legitimate domain of national legislatures and courts.
Thirdly,
in none of the travaux préparatoires was there discussion that the notion of a matter not being capable of settlement by arbitration was to be understood by reference to whether an otherwise arbitrable type of dispute or | [
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|
nsw_caselaw:54a636e73004de94513d9757:19 | nsw_caselaw:54a636e73004de94513d9757 | It contended that the words should be construed as extending to any dispute concerning GHR's position as trustee of the Trust even if such a dispute does not arise directly from the terms of the Settlement Deed.
86Alternatively, it submitted that even if the construction it contended for was not accepted, a number of disputes had arisen under the Settlement Deed. It contended that the proceedings constituted a Claim under cl 1.1(a)(ii).
It repeated its submission, made in the Court below, that "Claim" in that context dealt firstly with any attempt to remove GHR as trustee and secondly, with the removal of any subsequent Hancock Family Group Member as trustee and a replacement by a non-Hancock Family Group Member.
It contended that this was supported by the powers conferred on GHR to appoint any one of her children as trustee and her right to reclaim the position (cl 9.
2). It also contended that the prohibition should be construed to extend to any attempt to remove GHR as trustee in the future. It pointed out that at the time of the execution of the Settlement Deed the first and third respondents, HLW and BHR, were not taking any action to replace the trustee and that the second respondent, JLH's, application against GHR as trustee was dismissed by consent.
It contended the phrase "any attempt" in cl 1.1(a)(ii) was inconsistent with limiting the operation to only those claims which existed or had been discontinued at the time of the Settlement Deed, contending this construction was also supported by cl 6(b).
87HPPL also repeated its submission made in the Court below that even if its construction of cl 1.1(a)(ii) was not accepted the proceedings still constituted a "Claim" under that clause because it was inevitable that the respondents would be forced to seek to appoint a person or entity who is not a Hancock Family Group Member as trustee of the Trust.
It submitted that is because none of the respondents are suitable trustees relying on the decision of the Court of Appeal of the Supreme Court of Western Australia in Scaffidi v Montevento Holdings Pty Limited [2011] WASCA 146 at [178].
88In the alternative, HPPL relied on cl 1.1(a)(iv). It submitted that that clause applied irrespective of whether the claim was against GHR in her capacity as a director of HPPL, as trustee of the Trust or otherwise.
It submitted that that construction was consistent with "the extensive and detailed provisions in the various deeds executed by the parties" that they would not make claims against each other and that disputes which might arise would be dealt with by confidential mediation or arbitration.
89In his oral submissions, senior counsel for HPPL seemed to suggest that the construction for which he contended did not give rise to the position that the effect of the releases in cl 6 of the Settlement Deed and the barring provisions in cll 11 and 13 of the Settlement Deed was that no claims could be made against GHR,
but rather, that any claims must be made pursuant to the confidential mediation and arbitration provisions contained in cl 20.
It is difficult with respect to see how the releases and barring provision can be construed in this way if HPPL's primary construction of the definition of Claim is correct.
90HPPL contended that his Honour erred in his construction of cl 7(c) of the Settlement Deed, submitting that the words in that clause "any steps at any time" meant that the clause should be construed so as any action or conduct that could have the consequence that HPPL will cease to be wholly owned and controlled by Hancock Family Group Members is caught by cl 7(c).
91HPPL also contended that irrespective of whether or not an application for a change in trustee would result in a non-Hancock Family Group Member being appointed trustee, cl 7(c) prohibited an application to remove GHR as trustee. | [
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|
nsw_caselaw:54a636e73004de94513d9757:15 | nsw_caselaw:54a636e73004de94513d9757 | 61It will be convenient to deal with the matters the subject of the notices of appeal as set out by each of the appellants, followed by the matters raised by the notice of contention.
Appeals of GHR and GHFR: Submissions of GHR
62In her written submissions, GHR contended that the primary judge erred in four ways.
(a)Failing to properly construe cl 20 of the Settlement Deed by affording too narrow an ambit to the concept of a dispute under it, especially by relying on the terms of the originating process alone and not properly appreciating the nature of the issues that would arise.
(b)Failing to hold that the amended summons generated a dispute between the parties because of the terms of cll 5 and 9 of the Settlement Deed.
(c)Alternatively, failing to hold that a dispute was generated because, by pursuing the relief, the respondents were breaching cl 7(d) of the Settlement Deed.
(d)Alternatively, failing to hold that the amended summons generated a dispute because it involved a breach of the undertaking by the respondents recorded in cl 7(e) of the Settlement Deed.
63In addition to these grounds, GHR submitted that the primary judge erred in reaching a concluded view on the arguments of the appellants concerning the effect of the terms of the Settlement Deed, contending this was a matter which should have been left to arbitration.
She submitted that the primary judge erred in holding that he would not have exercised the discretion to grant a stay even if he was satisfied that part of the dispute arose under the Settlement Deed.
64GHR submitted that the focus by the primary judge on the summons alone was wrong because the dispute was not within the sole province of the respondents, it was a dispute as between the parties. She submitted, relying on Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572 at 580-581, that a court does not remove a trustee without considering all relevant circumstances of their tenure.
She submitted that although the particulars of misconduct relied on in support of the claim that GHR be removed as trustee only related to conduct in September 2011,
it would be artificial to consider the question of removal only by reference to what occurred in that month without regard to the nature of the Trust which "administers shareholding interests in one of Australia's most significant mining companies .
.. and the administration of which has been the subject of a number of compromises in deeds over the course of many years". She also pointed out that, notwithstanding the limited nature of misconduct alleged, the relief sought included seeking access to information relating to the Trust extending back over many years.
65In relation to the construction of the Settlement Deed, GHR submitted that the primary judge was incorrect in holding that the words "under this deed" had a much narrower compass than phrases such as "with respect to" or "in respect of".
She emphasised that cases in this Court have stated that arbitration provisions required a liberal and flexible construction, reflecting the presumed intention of the parties that they did not intend their disputes to be bifurcated between different tribunals.
In that regard she relied on decisions of this Court in Francis Travel Marketing Pty Limited v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 and Global Partners Fund Limited v Babcock & Brown Limited (In liq) [2010] NSWCA 196; (2010) 79 ACSR 383 and the decision of the Full Court of the Federal Court in Comandate Marine Corp v Pan Australian Shipping Pty Limited [2006] FCAFC 192; (2006) 157 FCR 45.
She reiterated her contention that a dispute linguistically requires an active contention, controversy or debate between two persons and not simply a consideration of whether the particular claims of the respondents seek to enforce a right under the Settlement Deed. | [
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|
nsw_caselaw:54a636e73004de94513d9757:18 | nsw_caselaw:54a636e73004de94513d9757 | 79In addition, reliance was placed on the choice of law clause contained in cl 21 of the Settlement Deed on two bases.
First it was submitted that the use of the expression "for all purposes in respect of this deed" in cl 21 was an indication that the parties were using words like "under", "hereunder" and "in respect of" interchangeably. It was submitted that this told against a narrow reading of the words "under this deed" in cl 20.
Further, reliance was placed on the provisions of s 37 of the Commercial Arbitration Act 1985 (WA), which obliges the parties to an arbitration agreement to "do all things which the arbitrator or umpire requires to enable a joint award to be made". It was submitted that this would involve bringing forward all matters of claim or defence which would allow a just award to resolve a controversy.
80Alternatively, it was submitted orally that even if this broad construction was not accepted, the reliance placed by GHR on the provisions of the Settlement Deed, referred to in the written submissions as a bar to the respondents' claims, led to the conclusion the matter arose under the Settlement Deed.
Appeals of GHR and GHFR: Submissions of GHFR
81The written submissions of GHFR raised substantially similar matters to those raised by GHR. She pointed to the fact that by letters dated 30 September 2011 and 4 October 2011, GHFR had notified the respondents that the prosecution of the amended summons gave rise to disputes under the Settlement Deed and in particular breaches of cl 7(d), 7(e) and 8.
She submitted that she had the right to have those claims arbitrated and that that right could only be protected by staying the respondents' claim. She said otherwise her rights would be rendered nugatory.
82GHFR further submitted that the primary judge erred in characterising contractual rights asserted by her under cll 7(d), 7(e) and 8 of the Settlement Deed solely as potential defences to the respondents' claim.
She submitted that as well as being deployed as defences they could be deployed as affirmative rights entirely and arbitrated to make an award preventing further conduct of these proceedings. She submitted that the primary judge erred in considering the merit of her claims under cll 7(d), 7(e) and 8 of the Settlement Deed and that his findings in that regard were in error.
83In his oral submissions senior counsel for GHFR emphasised that the dispute involved a controversy between parties and thus arose under the Settlement Deed. He submitted that even if this was incorrect, the matters raised in her notice of dispute in reliance on the Settlement Deed gave rise to a dispute under the Settlement Deed and provided a reason for the proceedings being stayed.
Appeal of HPPL: Submissions of HPPL
84HPPL adopted the submissions of the other appellants. In particular, it submitted that a liberal approach should be taken to the construction of the dispute resolution clause.
It submitted such an approach did not depart from the meaning of the words chosen by the parties but gave effect to a coherent business purpose through an assumption commercial courts around the world will make, namely that parties are unlikely to have intended multiple venues or occasions for the resolution of their disputes unless they say so.
In that context, it submitted the word "dispute" should be interpreted inclusively rather than restrictively and that whilst the mere making of a claim does not amount to a dispute, a dispute should be held to exist when it can be reasonably inferred that a claim is not admitted.
85HPPL also contended that, following the decision of the House of Lords in Fiona Corporation supra, "under" the Settlement Deed should not be construed less restrictively than words such as "arising out of".
In that context it submitted that the phrase "any dispute under this deed" should not be limited to a dispute which derives from or depends on the Settlement Deed or involves enforcing or invoking some right created by the Settlement Deed. | [
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|
nsw_caselaw:54a636e73004de94513d9757:17 | nsw_caselaw:54a636e73004de94513d9757 | 72GHR further contended that the provisions of cll 5 and 9 of the Settlement Deed demonstrated that the amended summons gave rise to a dispute under the Settlement Deed as the splitting of the Trust into two trusts would prevent the implementation of the distribution covenants by HPPL and the trustee contained in cl 5 of the Settlement Deed and be contrary to the fact that it was envisaged in cl 9.
1 of the Settlement Deed that the Trust would be ongoing and extend beyond the vesting date of 6 September 2011. It was also contended that it was contrary to the collaborative arrangement in cl 9.2 relating to the appointment of new trustees and the right of GHR even if she retires to subsequently reassume the position of trustee.
73It was also contended by GHR that the attempt to remove her as trustee constituted a challenge to her property rights in contravention of the undertaking contained in cl 7(e) of the Settlement Deed and that the allegations in the summons contravene the non-disparagement provisions in cl 7(d).
She submitted that the effect of cl 7(d) was that the ventilation of the issues raised in the amended summons was enough to generate a dispute under the Settlement Deed that enlivened the discretion for a stay.
74In her written submissions GHR also relied on the definition of "Claim" in cl 1.1 of the Settlement Deed, the releases in cl 6 and the covenant in cl 13 not to advance any claim the subject of a release in the Settlement Deed.
She submitted that the definition of "Claim" related to prospective claims as well as claims existing as at the date of the Settlement Deed and that the advancing of such claims was a contravention of cl 13.
75GHR submitted that the primary judge was wrong to find that even if the defences arose under the Settlement Deed he would not exercise his discretion to grant a stay because they were aspects of a larger dispute.
She submitted this would negate the bargain between the parties as reflected in the Settlement Deed and render nugatory its key provisions and that his Honour erred in forming a view as to the strength of the defences or claims of the appellants.
76Orally, senior counsel for GHR submitted that the connecting phrase "under this deed" seeks a link between the controversy and the provisions of the Settlement Deed. He submitted that an essential part of the defence raised by GHR is that what she did was reasonable in the context of the regime established by the Settlement Deed.
He submitted in those circumstances the Settlement Deed would have to be considered in dealing with the merits of the respondents' claim, not merely in relation to specific defences.
77Senior counsel for GHR also submitted that fine distinctions between expressions such as "arising out of", "in connection with" or "arising under" should not be made in this field.
In this regard, in addition to the cases relied on in the written submissions, he placed particular reliance on what was said by Lord Hoffmann in Fiona Corporation supra, that there should be a "fresh start" in the construction of arbitration clauses and that they should be construed with a presumption that the parties did not intend their disputes to be dealt with in two separate tribunals.
78It was submitted that having regard to the provisions of cl 8 and 9.
2 of the Settlement Deed, a court or an arbitrator, in considering whether or not to remove the trustee, would have to consider whether there had been wrongful conduct, whether it was excusable or whether it went to the heart of the Settlement Deed,
what "continuing life" would exist under the Settlement Deed after her removal and whether it is appropriate to radically alter the long term administration regime the Settlement Deed contemplated.
It was submitted that that meant the merits of the claim arose under the Settlement Deed. Presumably this submission was referring to the fact that the appointment of a new trustee would affect GHR's entitlement to shares in HPPL and her power to appoint and remove trustees. | [
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|
nsw_caselaw:54a636e73004de94513d9757:8 | nsw_caselaw:54a636e73004de94513d9757 | 2Each of the Beneficiaries shall do all matters and things necessary to implement and facilitate any decision at any time by the Trustee to appoint any one or more of JLH, BHR,
HGRW and GHFR as trustee of the HMH Trust and such appointment may be as an additional trustee together with the Trustee or to replace the Trustee permanently or temporarily or to succeed the Trustee when at some future time she may retire or otherwise
cease to be trustee during her lifetime (which shall be deemed to be conditional upon the continuing right of GHR to decide to reassume the position of trustee by herself or with one or more of her children if and when she should subsequently so decide).
9.3Notwithstanding either of the provisions in clause 9.1 and 9.2, the Trustee and the beneficiaries agree that nothing in this Deed limits any of the powers of the Trustee of the HMH Trust."
17Clause 10 imposes obligations of confidentiality on the parties to the Settlement Deed in respect of its content and in respect of any correspondence or negotiation between the parties or their legal advisers in relation to its subject matters or matters relating to it.
18Clauses 11 and 13 of the Settlement Deed are covenants ancillary to the releases contained in cl 6. They provide as follows:
"11.PLEA IN BAR
On and from the Effective Date each party may plead this deed in bar to any Claim or proceeding the subject of a release in this deed PROVIDED HOWEVER that nothing in this clause shall prevent any party from enforcing the provisions of this deed, the Porteous Settlement Deed, the Deed of Obligation and Release or Deed of Loan.
...
13.PARTIES NOT TO ASSIST PROSECUTION OF CLAIMS
Each party severally covenants with each of the other parties to this deed that he, she or it will not advance, cause, procure, finance, support, encourage or otherwise assist or facilitate in any way (except on compulsion of law including, but not limited to, service of a subpoena) directly or indirectly the advancement, institution or prosecution of any Claim the subject of a release in this deed."
19Clause 20 provides for certain disputes to be resolved by mediation or arbitration. That clause so far as relevant provides as follows:
"20.CONFIDENTIAL MEDIATION/ARBITRATION
In the event that there is any dispute under this deed then any party to his [sic] deed who has a dispute with any other party to this deed shall forthwith notify the other party or parties with whom there is the dispute and all other parties to this deed ('Notification') and the parties to this deed shall attempt to resolve such difference in the following manner.
20.1Confidential Mediation
(a)the disputing parties shall first attempt to resolve their dispute by confidential mediation subject to Western Australian law to be conducted by a mediator agreed to by each of the disputing parties and GHR (or after her death or non-capacity, HPPL);
(b)each of the disputing parties must attempt to agree upon a suitably qualified and independent person to undertake the mediation;
(c)the mediation will be conducted with a view to:
(i)identifying the dispute;
(ii)developing alternatives for resolving the dispute;
(iii)exploring these alternatives; and
(iv)seeking to find a solution that is acceptable to the disputing parties.
(d)any mediation will not impose an outcome on the disputing parties. Any outcome must be agreed to by the disputing parties;
(e)any mediation will be abandoned if:
(i)the disputing parties agree;
(ii)any of the disputing parties request the abandonment.
20.2Confidential Arbitration
(a)Where the disputing parties are unable to agree to an appointment of a mediator for the purposes of this clause within fourteen (14) days of the date of the Notification or in the event any mediation is abandoned then the dispute shall on that date be automatically referred to arbitration for resolution ('Referral Date') and the following provisions of this clause shall apply; | [
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|
nsw_caselaw:54a636e73004de94513d9757:14 | nsw_caselaw:54a636e73004de94513d9757 | He also repeated the views he expressed in his earlier judgment that the relevant definition of "Claim" related to claims "existing or discontinued" at the date of the Settlement Deed (at [24]).
53Further, he rejected the contention that the substantive proceedings related to a claim for the removal of GHR and her replacement by a non-Hancock Family Group Member. He repeated his view that the claim was limited to claims existing or discontinued at the date of the Settlement Deed and stated that the substantive proceedings did not seek that relief (at [26]).
54The primary judge also rejected the proposition that the proceedings were a Claim within the definition in cl 1.1(a)(iv) of the Settlement Deed. He said this was for two reasons.
First, (and again) it was not a claim existing or discontinued at the date of the Settlement Deed and, secondly, the reference to "any action against any of the Directors" in the subclause was a reference to an action against them as directors, and not in some other capacity (at [27]).
55His Honour also rejected the contention that the proceedings were a Claim within the meaning of cl 1.1(d). He repeated his view that the definition of Claim did not relate to future proceedings (at [28]).
56The primary judge also rejected the contention that the proceedings were brought in breach of undertakings given in cl 7(c) of the Settlement Deed.
He concluded that the prohibition in cl 7(c) was on taking steps which would result in the appointment of a non-Hancock Group Family Member as trustee, not proceedings which could have that result. He reiterated that that was not what the respondents sought (at [30]).
57His Honour also rejected the submission that the respondents' claims for accounts were contrary to the release and discharge given in cl 2 of the Deed of Obligation and Release which was incorporated into the Settlement Deed. His Honour concluded that cll 2 and 3 of the Deed of Obligation and Release were only incorporated into the Settlement Deed for the purpose of cl 5.
1(d) and not for the purpose of cl 20 (at [38]). He also held that the claims for accounts were merely an aspect of, or incidental to, the substantive relief sought in the proceedings and would not result in the proceedings as a whole being characterised as a dispute "under this deed" (at [38]).
He also pointed out that the releases given in the Deed of Obligation and Release were only given by JLH (at [39]).
58The other grounds raised by HPPL were similar to those raised by GHR and GHFR. The primary judge rejected them for the same reasons.
Grounds of appeal
59I do not propose to set out the grounds of appeal in detail. The issues as they were ventilated on the appeal will emerge from my consideration of the parties' submissions below. Further, each of the parties submitted statements of issues to be argued on the appeal. Whilst there was a difference between them they may be summarised as follows:
(a)Whether the respondents' claim involved a dispute under the Settlement Deed.
(b)Whether in considering whether or not the claim is a dispute under the Settlement Deed, it is appropriate to focus only on the allegations made by the respondents and the relief sought, or rather, whether regard should be had to defences raised or potentially raised by the appellants which invoke the provisions of the Settlement Deed.
(c)Whether it was appropriate on the application for a stay for the primary judge to determine the merits of GHR's and GHFR's reliance on various provisions of the Settlement Deed, in particular the clauses to which I referred in pars [37]-[42] above.
(d)Whether, irrespective of the effect of the arbitration clause, the primary judge erred in failing to refer the proceedings to mediation.
60The respondents, by notice of contention, have also contested the finding of the primary judge that the claims brought by them can properly be the subject of arbitration. | [
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|
nsw_caselaw:54a636e73004de94513d9757:9 | nsw_caselaw:54a636e73004de94513d9757 | (i)in the event that no agreement on the arbitrator can be reached within three (3) weeks of the Referral Date, the arbitrator will be Mr Tony Fitzgerald QC (provided he is willing to perform this function and has not reached 74 years of age at that time), or in the event Mr Tony Fitzgerald QC is unwilling or unable to act,
the Honourable Justice John Middleton (provided he is no longer a Judge of the Federal or other Australian Court and provided he has not reached 74 years of age at that time), and irrespective of whether either of these persons have carried out the mediation referred to above, or in the event that neither is willing or able to act,
(ii)subject to paragraph (iv) below by confidential arbitration with one (1) party to the dispute nominating one (1) arbitrator, and the other party to the dispute nominating another arbitrator and the two (2) arbitrators selecting a third arbitrator within a further three (3) weeks,
who shall together resolve the matter pursuant to the Commercial Arbitration Act of Western Australia and whose decision shall be final and binding on the parties;
(iii)if the arbitrators nominated pursuant to paragraph 2(a)(ii) are unable to agree in the selection of a third arbitrator within the time provided in paragraph 2(a)(iii),
the third arbitrator will be designated by the President of the Law Society of Western Australia and shall be a legal practitioner qualified to practise in the State of Western Australia of not less than twenty (20) years standing.
(iv)in the event that a disputing party does not nominate an arbitrator pursuant to Clause 2(a)(ii) within twenty-one (21) days from being required to do so it will be deemed to have agreed to the appointment of the arbitrator appointed by the other disputing party.
(b)The dispute shall be resolved by confidential arbitration by the arbitrator agreed to by each of the disputing parties or appointed pursuant to paragraph 2(a)(i) above (or if more than one is appointed pursuant to paragraph 2(a)
(ii) then as decided by not less than a majority of them) who shall resolve the matter pursuant to the Commercial Arbitration Act of Western Australia and whose decision shall be final and binding on the parties.
(c)
The arbitration will take place at a location outside of a Court and chosen to endeavour to maintain confidentiality and mutually agreed to by the disputing parties and failing agreement in Western Australia and the single Arbitrator
or the Chairman of the Arbitral Tribunal as the case may be will fix the time and place outside of a Court for the purposes of the confidential hearing of such evidence and representations as any of the disputing parties may present.
If any of the parties request wheelchair access, this will be taken into account in the selection of the premises and parking needs. Except as otherwise provided, the decision of the single arbitrator or, if three arbitrators, the decision of any two of them in writing will be binding on the disputing parties both in respect of procedure and the final determination of the issues.
(d)The arbitrators will not be obliged to have regard to any particular information or evidence in reaching his/their determination and in his/their discretion procure and consider such information and evidence and in such form as he/they sees fit;
(e)The award of the arbitrator(s) will be to the extent allowed by law non-appealable, conclusive and binding on the parties and will be specifically enforceable by any Court having jurisdiction.
...
20.8Confidentiality of Proceedings
The dispute the subject of the mediation/arbitration, the mediation and arbitration hearing and submissions thereto and the decision of the mediation and/or arbitration shall be kept confidential."
20Clause 21 provides that the Settlement Deed should be governed by and interpreted according to the laws of the State of Western Australia. | [
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|
nsw_caselaw:54a636e73004de94513d9757:40 | nsw_caselaw:54a636e73004de94513d9757 | in accordance with" and, using the same reference, that "to involve" meant to "include or affect in its operation" so that "the parties [had] agreed to refer [to arbitration] a dispute including or affecting their rights and obligations governed, controlled, or bound by or in accordance with the agreement".
Applying that construction, her Honour held (at [24]) that "the parties intended to confine the matters to be referred to arbitration to matters relating to their rights and obligations under the agreement and not other matters such as allegations of misleading or deceptive conduct, negligent misstatement or fraudulent misrepresentation".
203In my view this interpretation, focussing on the "rights and obligations" under the agreement, bears some resemblance to that used in relation to the expressions "under the Constitution" or "under the laws of the Parliament". A matter falls within those expressions where "the right or duty in question ...
owes its existence to, ... or depends upon, Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law": R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50; (1945) 70 CLR 141 (at 154) per Latham CJ.
A matter may be said to so arise whether it is advanced to support, or as a defence to, a claim: Felton v Mulligan [1971] HCA 39; (1971) 124 CLR 367 (at 387 - 388) per Windeyer J.
I agree, however, with Bathurst CJ (at [129]) that the analogy with such cases is limited - I would not extend it in the context of cl 20 to mean that any reliance on a provision of the Settlement Deed meant the whole dispute was governed by that Deed.
204Insofar as Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40;
[2007] 4 All ER 951 (at [13]) is concerned, I also agree with Bathurst CJ (at [121]) that to approach arbitration clauses on the basis of "[an] assumption that the parties, as rational businessmen,
are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal" is not in accord with High Court authority requiring the construction of contracts to be undertaken by reference to the terms of the contract,
the meaning of which is to be determined by what a reasonable person would have understood them to mean:
Toll (FGCT) Pty Limited v Alphapharm Pty Ltd [2004] HCA 52;
(2004) 219 CLR 165 (at [40]).
The assumptive approach Lord Hoffmann embraced is inconsistent with that methodology.
205Further, Fiona Trust & Holding Corporation v Privalov concerned the scope and effect of arbitration clauses in eight charter parties each governed by a "widely used" standard form contract (Shelltime 4): Fiona Trust & Holding Corporation v Privalov (at [12]).
The relationship between the parties arose from only one contract. Lord Hoffmann (at [12]) was concerned to assure the reputation of English commercial law.
In that context, he endorsed Longmore LJ's opinion in the Court of Appeal "that the time has come to draw a line under the authorities to date and make a fresh start", an opinion Longmore LJ (who delivered the judgment of the Court) stated was appropriate "for cases arising in an international commercial context": Fiona Trust & Holding Corporation v Privalov [2007] EWCA Civ 20;
[2007] All ER (D) 169 (at [17]).
206Such cases are a far remove from the present. The parties' relationships in this case arising out of their family relationships. Mundane as it may seem, they are concerned with domestic affairs, and not the lofty climes of international commerce.
Moreover, the parties' relationships are not, unsurprisingly found in standard form contracts, but in unique and inter-woven agreements: the Trust Deed, the Deed of Obligation and Release and the Settlement Deed. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:37 | nsw_caselaw:54a636e73004de94513d9757 | Consistent with that reasoning, where the allegations of serious misconduct are made against the party seeking the stay the fact that the allegations involve serious misconduct is relevant in the exercise of the discretion, but does not mean that a court as a matter of course would refuse a stay.
181Further, the fact that the claim involves the status of GHR as trustee does not seem to me to affect the position. The removal and replacement of a trustee does not destroy the substratum of the Trust.
In that regard the position may be contrasted with the winding-up of a company which, as Warren J (as her Honour then was) pointed out in A Best Floor Sanding Pty Limited v Skyer Australia Pty Limited supra at [18], strikes at the very heart of the corporate structure enshrined in the Corporations Act.
In a case of removal of a trustee neither the trust property nor the rights of beneficiaries are affected. In these circumstances the fact that the claim involves the so-called status of the trustee does not alter the position.
182GHFR relied on the provisions of s 42(f) of the Trustee Act which conferred upon the trustee the power to refer to arbitration "any debt, account, claim or thing whatever relating to the trust or to the trust property", in support of the submission that the dispute was capable of settlement by arbitration.
Having regard to the conclusions which I have reached it is not necessary to reach a final view on the scope of that section.
However, it does seem to me that the section is dealing with claims made by or against third parties of the Trust as distinct from claims between the trustee and beneficiaries. See Royal Bank of Scotland Ltd v Byng supra; Dowling v St Vincent De Paul Society of Victoria Inc supra at [21]; c/f Perpetual Trustees Australia Ltd v Wallace [2007] FCA 527 at [40].
183It follows, in my view, that if the parties had in fact agreed that the claim for the removal of GHR as trustee should be submitted to arbitration such a dispute would be arbitrable.
The question remains whether as a matter of discretion the present proceedings should be stayed in circumstances where the respondents' claim is not covered by the arbitration clause but particular defences raised by the appellants fall within the scope of that clause.
Consideration: Discretion
184Each of the parties agreed that the grant of a stay whether sought under s 67 of the Civil Procedure Act or under s 53 of the Commercial Arbitration Act was discretionary. It follows that it was necessary for the appellants to demonstrate error in the sense referred to in House v The King [1936] HCA 40; (1936) 55 CLR 499.
185The primary judge took the view that having concluded the respondents' claim was not a claim arising under the Settlement Deed, the question of discretion did not directly arise (at [50]).
However, he concluded that even if the prospective defences under cl 7(e) and (8) were disputes under the Settlement Deed, he would not have stayed the proceedings, primarily for the reason that those defences were "but aspects of a larger dispute not properly characterised as one 'under this deed'" (at [49]-[50]).
186I have concluded that the respondents' claim was not a dispute under the Settlement Deed, that the Settlement Deed did not have the effect of barring any claim for removal of the trustee and that the other defences, although arising under the Settlement Deed, did not necessarily bar a claim for removal of GHR as trustee.
In these circumstances, the manner in which the primary judge concluded he would have exercised his discretion had the occasion arisen would not have involved error in a House v The King sense.
187Further, to the extent it is necessary for this Court to re-exercise the discretion, having regard to the comment of the primary judge that it did not directly arise, I would reach the same conclusion. | [
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|
nsw_caselaw:54a636e73004de94513d9757:13 | nsw_caselaw:54a636e73004de94513d9757 | 42The primary judge also held that cl 8 of the Settlement Deed did not bar the respondents' claim. He held that its ultimate purpose was to acknowledge that during the lifetime of GHR she was to have the continuing right to maintain her position as chairman on an executive or non-executive basis. He said that the proposed proceedings were not inconsistent with that right (at [48]).
43Finally his Honour concluded on the construction issue that even if the clauses invoked by GHFR involved a dispute under the Settlement Deed they were but aspects of a larger dispute which as a whole, was not accurately characterised as a "dispute under this deed" (at [49]).
44It will be seen that the conclusion reached by the primary judge on the question of construction primarily depended upon the proposition that for cl 20 to have effect, the dispute brought by the respondents must be a dispute under the Settlement Deed in the sense of enforcing or invoking some right created by it.
It was not enough, in the view of the primary judge, that the Settlement Deed may in some way impact on the rights of the respondents to bring their claims or could constitute a defence to those claims. That approach is challenged on the appeal.
45Further, the primary judge in rejecting certain of the submissions made by GHR and GHFR, construed various provisions of the Settlement Deed as providing no answer to the claims of the respondents.
Both his Honour's construction of the provisions and the fact that he sought to deal with these issues on the stay application rather than leaving them for an arbitrator to consider are also the subject matter of the appeal.
46The primary judge also declined to refer the proceedings to mediation. He stated (at [51]) that whilst it may well be desirable that they be referred to mediation, they were not yet ripe for that process. He took the view that further disclosure would have to be made before the proceedings could be so referred.
Appeal of HPPL: Procedural history and pleading
47Before considering the grounds of appeal, it is necessary to first deal with the history of HPPL's appeal, which was heard and will be decided together with that of GHR and GHFR.
48By notice of motion filed on 15 November 2011 and amended on 22 December 2011, HPPL sought an order staying the proceedings.
49On 22 December 2011 that motion was dismissed by Brereton J: Welker v Rinehart (No 4) [2011] NSWSC 1636. On 4 January 2012 HPPL filed a summons seeking leave to appeal from that judgment. On 20 January 2012 the respondents HRW, JLH and BHR, filed a notice of contention on the grounds that HPPL lacked standing to seek a stay and that its motion constituted an abuse of process.
50On 3 February 2012 this Court ordered that HPPL's application for leave to appeal be heard at the same time as the applications of GHR and GHFR. It was agreed, however, that the matters raised in the notice of contention filed by the respondents on 20 January 2012 would be heard separately and at a later time.
51There is a substantial overlap between the submissions of HPPL and the submissions of the other appellants. In those circumstances it is convenient to deal with the issues raised by each appeal in the same judgment.
Appeal of HPPL: Judgment of the primary judge
52The primary judge rejected the contention by HPPL that an application for the removal of GHR as trustee was a "Claim" within the definition in cl 1.1(a)(ii) of the Settlement Deed and was therefore released.
The primary judge rejected the submission that that definition was dealing with two separate issues: first, the removal of GHR as trustee and, second, the removal of any subsequent Hancock Family Group Member as trustee and the replacement with a person who is not a Family Group Member.
He held that the clause, as a matter of construction, related to any attempt to remove GHR or any subsequent Hancock Family Group Member as trustee and to replace the trustee so removed with a person or entity not a Hancock Family Group Member (at [23]). | [
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|
nsw_caselaw:54a636e73004de94513d9757:21 | nsw_caselaw:54a636e73004de94513d9757 | They contended that if the conduct in bringing the proceedings was not in breach of the arbitration clause in the Settlement Deed, it was not open to a court to stay proceedings permanently on the basis that the appellants might make allegations by way of defence that would raise provisions of the Settlement Deed.
They relied in that regard on the fact that applications for stays are generally concluded before the close of pleadings. They submitted that even if the defendants' arguments were likely to raise matters within the scope of the arbitration clause, that would not justify a stay, having regard to the fact the principal dispute was outside the terms of the agreement.
100The respondents submitted that Brereton J was correct in considering the merits of the defences raised because it was said that in seeking a stay of proceedings an applicant is required to demonstrate that the conduct
of the plaintiff in commencing those proceedings was in breach of a valid and enforceable arbitration agreement and that it was incumbent on the applicant for a stay to demonstrate that the arbitration clause was engaged.
In relation to the particular provisions of the Settlement Deed relied upon by the appellant, the respondents' submissions may be summarised as follows:
(a)The application for removal of GHR as trustee did not give rise to a dispute under cl 8 because cl 8 proceeds on the basis that GHR in her personal capacity has control of HPPL by direct ownership of share capital and voting power in HPPL, which will remain the case even if the respondents are successful in the proceedings.
(b)The application for removal was not inconsistent with the terms of either cl 9.1 or 9.2.
(c)Brereton J was correct in holding that the respondents' application did not give rise to a dispute as to whether cl 7(d) of the Settlement Deed had been breached.
The respondents submitted that no reason had been proffered as to why Brereton J erred in his conclusion and that it would be perverse to contend that the proceedings brought by the respondents could be stayed in reliance on cl 7(d) because the grounds which the respondents put forward in support of the application may be embarrassing.
They submitted that if cl 7(d) had that operation it would "to that extent be void as contrary to public policy" because it would prohibit an application being made to a court in respect of any alleged misconduct by GHR as trustee.
(d)In relation to cl 7(e), the respondents submitted that Brereton J was correct in saying the clause was confined to the parties' right, title or interest as beneficiaries,
and submitted if cl 7(e) had a wider operation it would be void as contrary to public policy to the extent it protected the trustee from the obligations to act honestly and in good faith, each of which obligation was put in issue.
(e)So far as cll 1.1, 11 and 13 were concerned the respondents submitted that the definition of Claim and the releases related to claims in existence at the date of the Settlement Deed and not future claims which may arise.
101It is evident from the respondents' submissions referred to in the immediately preceding paragraph that there are at least issues between the parties as to the meaning of various provisions of the Settlement Deed.
102The respondents also submitted that Brereton J was correct in concluding that even if the defences potentially raised by GHR gave rise to disputes under the Settlement Deed, he would have declined to grant a stay in the exercise of his discretion.
They submitted that Brereton J was correct in concluding that the prospective defences were but aspects of a larger dispute not properly characterised as a dispute "under this deed", and that a number of defences foreshadowed by the appellants were objectionable for reasons of public policy as they sought to use provisions of the Settlement Deed as means of foreclosing the application, | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:30 | nsw_caselaw:54a636e73004de94513d9757 | (b)Clause 7(d) - Assuming that the institution of the proceedings amounted to a breach of the non-disparagement clause, whilst that may give rise to remedies under the Settlement Deed, it would not in my opinion mean that a court would decline to remove a trustee for proven misconduct.
(c) Clause 7(e) - assuming cl 7(e) is not limited to beneficial interests in the entities referred to in that subclause, it does not seem to me that the clause would absolutely bar a claim to remove the trustee even if such a claim was in breach of the provision.
If the clause absolutely precluded the right to remove GHR as trustee it would be void as ousting the beneficiaries' right to due administration of the trust (see [139]-[140]).
(d)Clause 8 - Clause 8 contains an acknowledgement by the parties that GHR has control of HPPL by her direct ownership of the share capital and voting power.
Her removal as trustee would result in the reduction of her legal ownership of the share capital and her voting power from 100 percent to 76.55 per cent. Whether that would prevent her from retaining full ongoing control and management may well be open to doubt.
She would certainly be left with sufficient voting power to control the board of directors and pass any special resolution. However, even if it did diminish her ownership or control to some extent, that would not in my opinion prevent a court from removing her as trustee if it found that she was unfit to carry out that function.
(e)Clause 9 - The operation of cl 9.1 may be frustrated by a splitting of the Trust. It would not be frustrated by the appointment of a new trustee. So far as cl 9.2 is concerned, the power of a court to remove a trustee for misconduct is not excluded by the conferral of a power on an existing trustee to appoint new trustees.
147In these circumstances, particularly as this is an interlocutory judgment, it is neither necessary nor desirable to express any concluded view on the likelihood of the success of any of these particular defences.
148It follows that Brereton J was correct to the extent he found that the defences raised under the Settlement Deed were part of a larger dispute. The question remains whether these defences having been made, the Court should, in the exercise of its discretion, stay the whole or any part of the proceedings.
It is convenient to deal with that issue after I have dealt with the contention that the claims made by the respondents are not capable of arbitration.
Notice of Contention of JLH, HRW, BHR: Respondents' submissions
149The respondents by their notice of contention contended that the dispute was not one capable of resolution by arbitration.
150In support of this submission, they relied in particular on the fact that s 77(2)(b) of the Trustee Act empowers the court to remove a trustee if the trustee "has been held by the Court to have misconducted himself in the administration of the trust" (emphasis added).
They submitted that this augmented the inherent jurisdiction of the court of equity to remove a trustee on grounds assessed and adjudicated upon by the court. They emphasised that a trust is a creature of the courts of equity, which retain an inherent supervisory jurisdiction over their administration.
In that context they submitted that the case fell within that category of case identified in Mustill and Boyd, Commercial Arbitration, 2nd ed (1989) Butterworths at 149 and Siemens Ltd v Origin Energy Uranquinty Power Pty Ltd [2011] NSWSC 195;
(2011) 279 ALR 759 as being one where it is "apparent from the nature of the subject matter or the way that it is dealt with by the legislature that it is appropriate for disputes concerning that subject matter to be resolved by the courts, or specialist tribunals established for that purpose" (Siemens supra at [38]). | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:2 | nsw_caselaw:54a636e73004de94513d9757 | Toll (FGCT) Pty Limited v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102
Western Export Services Inc v Jireh International Pty Limited [2011] HCA 45; (2011) 86 ALJR 1
Texts Cited: Born, International Commercial Arbitration (2009) Klewer
Cohen and Staff, "The Arbitration of Trust Disputes" Journal of International Trust and Corporate Planning (1999) vol 7 No 4
Jacobs Law of Trusts in Australia 7th ed (2006) LexisNexis Butterworths
Lewison & Hughes, The Interpretation of Contracts in Australia (Law Book Company, Sydney, 2012)
Mustill and Boyd, Commercial Arbitration, 2nd ed (1989) Butterworths
Tweeddale and Tweeddale, Arbitration of Commercial Disputes: International and English Law and Practice (2007) Oxford University Press
Category: Procedural and other rulings
Parties: Gina Hope Rinehart (First Appellant)
Ginia Hope Frances Rinehart (Second Appellant)
Hope Rinehart Welker (First Respondent)
John Langley Hancock (Second Respondent)
Bianca Hope Rinehart (Third Respondent)
Representation: J T Gleeson SC and P Kulevski (First Appellant)
F Kunc SC and P Flynn (Second Appellant)
A S Bell SC and D F C Thomas (First, Second and Third Respondents)
Corrs Chambers Westgarth (First Appellant)
Gadens Lawyers (Second Appellant)
Johnson Winter & Slattery (First, Second and Third Respondents)
File Number(s): CA 2011/344306; 2011/344307
Decision under appeal Citation: Welker & Ors v Rinehart & Anor (No. 2) [2011] NSWSC 1238
Date of Decision: 2011-10-07 00:00:00
Before: Brereton J
File Number(s): 2011/285907
HEADNOTE
[This headnote is not to be read as part of the judgment]
FACTS
On 5 September 2011, the respondents Hope Rinehart Welker, John Langley Hancock and Bianca Hope Rinehart commenced proceedings against the appellant Gina Frances Rinehart, alleging misconduct in her conduct as trustee of a family trust of which they were beneficiaries,
and seeking certain trust information and orders under the Trustee Act 1962 (WA) and the court's inherent and equitable jurisdiction varying the trust and removing Gina Frances Rinehart as trustee.
As she opposed the claims brought by the respondents, the appellant Ginia Frances Hope Rinehart was also named as a defendant in those proceedings.
On the 16 September 2011 and 6 October 2011 respectively, the appellants sought an order that the proceedings be stayed, on the basis that in 2005 the respondents had signed a "Settlement Deed" requiring them to refer disputes "under" the Settlement Deed to confidential mediation and arbitration.
The appellants argued that the respondents' claims were a dispute under the Settlement Deed, relying principally on other terms of that deed which, it was said, barred or provided defences to the respondents' claims.
In separate proceedings commenced on 15 November 2011, the appellant Hancock Prospecting Pty Ltd, shares in which constitute the primary asset of the relevant trust, also applied for a stay of the proceedings on the same basis.
The primary judge rejected the applications for a stay, finding that the dispute was not one under the Settlement Deed, and that even if certain provisions of that deed, relied on by the appellants, did raise disputes under the Settlement Deed, he would not in the exercise of his discretion stay the proceedings.
The primary judge also declined to refer the proceedings to mediation, and held that as a matter of principle the respondents' claims were capable of resolution by arbitration. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:45 | nsw_caselaw:54a636e73004de94513d9757 | i) denies that the content and effect of the 3 September Deed is sufficiently set out in the statement of claim and will at the hearing seek to rely upon the 3 September Deed as if fully set out herein and says that it cannot be read in isolation without referring to the Hope Downs Deed;
....
....
iv) by clause 2 provided that if any of the beneficiaries of the Trust intended to marry or live in a marriage like relationship, the beneficiary was required to enter into a prenuptial agreement on the terms set out in clause 2.
v) in answer to subparagraph 19(iv) that first defendant says that the requirement in clause 2 of the 3 September Deed was in the interests of each of the beneficiaries and was otherwise in conformity with:
clause 7 of the Hope Downs Deed; and
recital F of the Confidential Settlement Deed dated 13 April 2007 between the second plaintiff the first defendant and HPPL [binding the second plaintiff to the Hope Downs Deed]
vi) in further answer to paragraph 19 the first defendant repeats subparagraphs 17(iv) and 17 (v) [requests were not unreasonable and consistent with the terms of the Hope Downs Deed]
[22] The First Plaintiff was:
[22] In answer to paragraph 22 the first defendant:
i) was not provided with access to the material requested in paragraph [21(i)] on 4 September 2011 or at any time since;
.
..
ii) did not receive confirmation that the vesting date of the Trust had been extended for a period of six months on 4 September 2011 or at any time since.
ii) denies that the first defendant was under an obligation to provide access to the Trust information requested, other than in accordance with the Trust Deed and the Hope Downs Deed;
...
iv) otherwise denies that the first plaintiff is entitled at law to copies of the past accounts and says further that such request was proscribed by the terms of the Hope Downs Deed.
Particulars: Clauses 1.1(b), (d) and (d) [sic] and clause 6 of the Hope Downs Deed
[23] By an email dated 4 September 2011 to Mr Newby, the Third Plaintiff:
[23] In response to paragraph 23 the first defendant:
i) sought "preliminary information" including:
.
..
....
ii) says in answer to subparagraph 23(i):
Financial statements, tax returns, bank and other records for the Trust;
denies that the third plaintiff had any entitlement to be provided with copies of the financial statement, tax returns and bank records of the Trust and says that the request was otherwise proscribed by the terms of the Hope Down Deed;
Financial statements, tax returns, bank and other records for HMHT Investments Pty Ltd for all available years;
Particulars: Clauses 1.
1(b), (d) and (d) [sic] and clause 6 of the Hope Downs Deed
....
d) denies that the third plaintiff had any entitlement to be provided with copies of the financial statements and bank records for HMHT Investments Pty Ltd and says that the request was otherwise proscribed by the terms of the Hope Downs Deed;
Particulars: Clauses 1.1(b), (d) and (d) [sic] and clause 6 of the Hope Downs Deed
[24] By email dated 4 September 2011 to the Third Plaintiff, Mr Newby:
[24] In answer to paragraph 24 the first defendant.
..otherwise repeats the matters set out in paragraphs 22 and 23 above, and says further it was reasonable to limit the financial statements provided to the years 2007 to 2010 because this was in conformity with the Hope Downs Deed.
i) agreed to provide the Third Plaintiff with the financial statements of the Trust for the years 2007 to 2010 but only on condition that "you kindly advise us this is your last request for Trust information";
Particulars: Clause 1.
1(b), (d) and (d) [sic] and clause 6 of the Hope Downs Deed
....
[30] By email dated 5 September 2011 to Mr Newby, the Third Plaintiff:
[30] In response to whole of paragraph 30 the first defendant:
...
...
ii) reiterated her request for copies of the bank statements and tax returns of the Trust;
ii) refers to and repeats the matters pleaded at paragraphs 23 and 24 above.
...
[31] The First Defendant did not and never has complied with the request pleaded at [30] above. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:11 | nsw_caselaw:54a636e73004de94513d9757 | They assert (pars [73] and [74]) that by reason of the failure to supply the accounts and other documents along with the other allegations of misconduct in the statement of claim, GHR is unfit to act as trustee of the Trust and has misconducted herself in its administration.
It is further alleged (par [76]) that the failure to supply the accounts and other documents along with the other allegations demonstrated a want of honesty on behalf of GHR in the execution of her duties and a want of reasonable fidelity with respect to her obligations as trustee.
32The defence filed on behalf of GHR puts the allegations of misconduct in issue. In addition, it expressly pleads cll 1.1(b), (d) and (d) [sic], 5, 6, 7, 9 and 13 of the Settlement Deed in answer to the various allegations made by the respondents (see pars [17], [19], [22], [23], [24], [30], [31], [38], [40], [42], [43], [44], [63], [64] and [65] of the statements of claim).
Attached to this judgment is a schedule setting out the particular allegations made in the statement of claim and the response in the defence where reliance is placed on the Settlement Deed (referred to in the defence as the Hope Downs Deed).
33The defence filed by GHFR pleads that by cl 7(e) of the Settlement Deed the respondents are estopped from contending that GHR ought be removed as trustee of the Trust.
It pleads that by cl 7(d) of the Settlement Deed the respondents are estopped from making and prosecuting the allegations in the statement of claim and it pleads that by cl 8 of the Settlement Deed the respondents are estopped from seeking to remove the GHR as trustee of the Trust.
Appeals of GHR and GHFR: Judgment of the primary judge
34The primary judge identified three issues for resolution on the application. First, whether the Settlement Deed was binding on HRW and BHR. He concluded that it was and his conclusion was not contested on appeal.
35The second issue was whether a proceeding in the court's equitable or statutory jurisdiction for removal of a trustee was susceptible to "private justice" by reference to arbitration. The primary judge held that there was no reason in his view why such a dispute could not be referred to arbitration and, "a fortiori, mediation".
He held that this would not exclude the jurisdiction of the court and that if anything public policy encourages the private resolution of disputes concerning family matters. This conclusion is the subject of the notice of contention in the proceedings.
36The third issue was whether the subject proceedings were in respect of a dispute "under this deed", so as to be caught by cl 20 of the Settlement Deed. His Honour held that the dispute was not a dispute under the Settlement Deed.
He concluded (at [27]) that it was necessary to focus on whether, "for the purposes of these proceedings, the plaintiffs have a dispute "under this deed" with any other party" (emphasis in original).
His Honour held that the words "under this deed" are of narrower scope than phrases such as "with respect to" or "in respect of", relying in particular on the judgment of French J, as his Honour then was, in Paper Products Pty Limited v Tomlinsons (Rochdale) Ltd & Ors (1993) 43 FCR 439.
He said in those circumstances the dispute must derive from or depend on the Settlement Deed, or involve enforcing or invoking some right created by the Settlement Deed.
37The primary judge rejected the argument that the provisions of cl 9 of the Settlement Deed, in particular cl 9.1, led to the conclusion that the claim by the respondents, so far as it related to a unilateral extension of the vesting date of the Trust by the trustee, was a dispute under the Settlement Deed. The primary judge expressed his views in the following terms (at [32]):
"Even the original claim - for an order that the trustee exercise her discretion to extend the vesting date - did not involve enforcing or invoking any right given by clause 9.1 against the first defendant. Clause 9.1 was an agreement to agree, expressed to be 'subject to GHR's agreement'. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:28 | nsw_caselaw:54a636e73004de94513d9757 | GHR, however, does at least implicitly suggest this, in her defence that the releases sought by her in the draft deed of 3 September 2011 were not different from the releases granted in the Settlement Deed.
GHR does assert that the claim for accounts was absolutely barred by the Settlement Deed. HPPL however contends that the effect of cl 1.1 of the Settlement Deed coupled with the releases given in cl 6 and the provisions of cl 13, is that the claims brought against GHR are barred. As stated above, in their submissions GHR and GHFR adopted the same position.
135If the Settlement Deed had the effect of barring the claims of the respondents, then it would follow that the dispute in question was governed or controlled by the Settlement Deed as the outcome would be regulated by its terms. However, the mere fact that these assertions were made does not mean that it automatically follows that the whole claim is a dispute under the Settlement Deed.
The primary judge, in my opinion, was entitled to examine the claim to form a view as to whether he could properly conclude, in the light of the evidence available, that the assertion that the claim was barred by the Settlement Deed was sustainable: see Channel Tunnel Group Limited v Balfour Beatty Construction Ltd [1993] AC 334 at 356.
This was particularly the case when each party made extensive submissions on the issue and none suggested there was any further material which may become available which would be of assistance to the Court on the issue of construction of the clause in question.
It was also relevant, in my opinion, to look at the strength of the assertion to determine whether, as a matter of discretion, a stay of the whole or any part of the proceedings should be granted.
136I have set out the definition of "Claim" above. Clause 1.1(a) is widely expressed to include any claim whether existing or discontinued, whether at law, under statute, equity or otherwise. Clause 1.
1(a)(i) limits its operation to any matters prior to the date of the Settlement Deed, although cl 1.1(a)(ii)-(iv) do not contain any such limitation. Clauses 1.1(c) and 1.1(d) are not on their face limited to existing or discontinued proceedings.
137In my opinion, however, the clause is limited to claims existing or discontinued or claims which were in existence at the time the Settlement Deed was entered into.
138In Grant v John Grant & Sons Pty Limited [1954] HCA 23; (1954) 91 CLR 112, the High Court held that general words of a release should be restrained by the particular occasion (at 123). In that case the plurality (Dixon CJ, Fullagar, Kitto and Taylor JJ) also made the following remarks (at 129-130):
"From the authorities which have already been cited it will be seen that equity proceeded upon the principle that a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations
falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence,
character and extent of the liability in question and the actual intention of the releasor.
"
See also Marinchek v Cabport Pty Limited [2010] NSWCA 334 at [47].
139Further, a construction of the nature of that contended for by the appellants would in effect render the trustee immune from any liability for breach of trust, whenever or however occurring. This would in effect destroy the trust.
In Jacobs Law of Trusts in Australia 7th ed (2006) LexisNexis Butterworths, the authors, JD Heydon and MJ Leeming describe the personal obligation of the trustee to deal with the trust property for the benefit of the beneficiaries as an essential element of a trust (at [110]). Citing Armitage v Nurse [1998] Ch 241 at 253-254 the learned authors make the following comments: | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:32 | nsw_caselaw:54a636e73004de94513d9757 | 157The submissions of GHFR were in substantially the same terms as those of GHR. Like GHR, she submitted that the conferral of statutory power to remove a trustee on the court did not render the dispute non-arbitrable, relying by analogy on Francis Travel supra, ACD Tridon supra, as well as IBM Australia Ltd supra.
In addition, she relied on s 42(f) of the Trustee Act which conferred upon a trustee the power to submit to arbitration any debt, account, claim or thing, whatever relating to the trust or to the trust property. She submitted that an action to remove a trustee fell within this section.
158She also suggested that as a matter of public policy it was desirable for parties to have the ability to resolve sensitive familial and financial matters between siblings, parents and children privately. Otherwise, she submitted, parties may be inhibited in having complaints relating to the administration of a trust fully ventilated and determined.
159Orally, senior counsel for GHFR placed considerable reliance on the decision of the Court of Appeal of the United Kingdom in Fulham Football Club (1987) Ltd v Richards [2012] 1 All ER 414 in which the Court held that a dispute under s 994 of the Companies Act 2006 (UK) (the equivalent to s 232 of the Corporations Act 2001 (Cth)) was capable of submission to arbitration.
He submitted that consistent with the approach in that case, the current dispute was capable of arbitration.
Notice of Contention of JLH, HRW, BHR: Submissions of HPPL
160HPPL contended it would be bound by any arbitration by reason of the provisions of cl 29(e) of the Deed.
Notice of Contention of JLH, HRW, BHR: Respondents' submissions in reply
161In their submissions in reply the respondents emphasised that the narrowing of what has been considered to be non-arbitrable in recent times has been mainly in the area of international commercial arbitration.
They referred in that regard to Tweeddale and Tweeddale, Arbitration of Commercial Disputes: International and English Law and Practice (2007) Oxford University Press at 4.32. They again emphasised the provisions of the Trustee Act in which powers to remove a trustee, make a vesting order and review the conduct of a trustee, were vested in the court.
They referred to s 94(3) of the Trustee Act which confers on a court a power to direct that a person shall be made a party to the proceedings.
They submitted that this avoided the problem which arose in arbitration that third parties could not be compelled to arbitrate: see Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 86 ALJR 14 at [90]; Sun Life Assurance Company of Canada v Lincoln National Life Insurance Company [2005] 1 Lloyd's Rep 606 at [68].
162So far as the reliance placed by GHFR on s 42(f) was concerned, the respondents pointed to the decision of Megarry VC in Re Earl of Strafford Deceased;
Royal Bank of Scotland Ltd v Byng [1980] Ch 28 and that of Nettle J in Dowling & Ors v St Vincent de Paul Society Victoria Inc [2003] VSC 454 at [21] to the effect that s 42(f) and its equivalent provisions only related to claims by third parties against the trustee, and not to what Sir Robert Megarry described in Royal Bank of Scotland Ltd v Byng supra as "internal disputes" (at 32).
163The respondents submitted that what distinguished the present case from cases such as Comandate Marine Corp supra, Francis Travel supra and IBM Australia Ltd supra, which held that claims under s 82 and s 87 of the Trade Practices Act were arbitrable were the following features:
(a)The dispute was not a commercial dispute.
(b)The dispute involved fiduciary obligations the original province of the Court of Chancery.
(c)The dispute concerned the status of GHR as a trustee.
(d)The dispute would involve the vesting of property which affects the world and operates in rem.
(e)The respondents' case involved allegations of a serious misconduct which the statute says are to be found "by the Court" (Trustee Act s 77(2)(b)).
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|
nsw_caselaw:54a636e73004de94513d9757:44 | nsw_caselaw:54a636e73004de94513d9757 | 226As the Chief Justice notes, there is no authority directly on point. There are, as the Chief Justice has detailed, indications in some of the cases which give some support to his view. However, I consider that the difficulties in a court enforcing any decision of an arbitrator are so great (or could be so great if a party was uncooperative) that the opposite view is preferable.
Whilst a court could make orders authorising a Registrar to sign transfers on behalf of the former trustee and direct the Registrar General to register them, removal and replacement of trustees usually involves the taking of accounts and an in personam order against the former trustee which if he or she disobeys it leads to imprisonment.
It is stretching things to contemplate that an order for imprisonment would be an appropriate enforcement procedure to perfect an arbitrator's award.
227I believe that history supports this view. Nineteenth century attempts to merge common law and equity tended to fall down because only the Chancery had the proper machinery to enforce in personam orders.
228Even if my view is erroneous, it would be a rare case where discretion would be exercised in favour of permitting the arbitration to proceed.
229My difference of opinion on this issue does not affect the result of the appeal.
230As to mediation, the primary judge considered that the application for mediation was premature. This does not preclude a further application at the appropriate time. That, however, is not a matter for this Court on appeal.
**********
SCHEDULE
Statement of Claim
Defence
[17] The 3 September email:
[17] In answer to the whole of paragraph 17 the first defendant:
....
...
ii) attached an unexecuted deed between the First Defendant, the Plaintiffs and the Second Defendant ("3 September Deed");
ii) says that each of the first and third plaintiffs and the second defendant entered into a Confidential Settlement Deed in August 2006 (Hope Downs Deed).
The second plaintiff bound himself to the Hope Downs Deed upon execution of a Confidential Deed on 13 April 2007 (2007 Deed). The first defendant will rely upon the terms of the Hope Downs Deed and the 2007 Deed as if fully set out herein;
iii) stated that the Deed was "required to be signed by each beneficiary";
iii) says that pursuant to the terms of the Hope Downs Deed the vesting date of the Trust was expressly provided for as follows:
...
"Subject to [the first defendant's] agreement at any time prior to 6 September 2011, the Beneficiaries agree to extend the vesting date of [the Trust] to the maximum extent permitted by law or to any prior date after 6 September 2011 by agreement of the majority of Beneficiaries"
Particulars: Clause 9.1 of the Hope Downs Deed
iv) the first defendant further says that the request contained in the 3 September email was not unreasonable, both in respect of this Trust and the benefits for the beneficiaries pursuant to the Hope Dows Deed and given the protections usually available to trustees and providers of various professional services.
Further, the request was not unreasonable given the terms and operations of the Trust and the Hope Downs Deed and was consistent with the Hope Downs Deed.
....
v) the first defendant further states that the 3 September letter and enclosed 3 September Deed did no more than:
ask the plaintiffs to act in conformity with the Hope Downs Deed in relation to the vesting date, given that it was in the interest of the plaintiffs to do so;
confirm that the releases and covenants contained in the Hope Downs Deed would apply to conduct of the first defendant that occurred after the execution of the Hope Downs Deed;
....
Particulars: Clauses 5, 6, 7 and 9 of the Hope Downs Deed.
[19] The 3 September Deed:
[19] In answer to paragraph 19 the first defendant:
i) contained a recital to the effect that the First Defendant was willing to extend the vesting date of the Trust if each of the Plaintiffs and Second Defendant executed the Deed; | [
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|
nsw_caselaw:54a636e73004de94513d9757:16 | nsw_caselaw:54a636e73004de94513d9757 | 66In her submissions in reply, GHR submitted that the distinction between the expressions "under this Deed" and expressions such as "with respect to" or "in respect of" had been expressly abandoned by the House of Lords in the context of arbitration clauses, referring to Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40;
[2007] 4 All ER 951, which decision, it was submitted, was endorsed unanimously by this Court in Lipman Pty Limited v Emergency Services Superannuation Board [2011] NSWCA 163 at [6].
67GHR also sought to draw an analogy between the expression "under this deed" and the phrases "arising out of this Constitution" and "arising under any laws made by the Parliament". She submitted that where the appellants relied on provisions of the Settlement Deed, whether by way of defence, cross-claim, as an immunity or in reply, then the whole dispute became one under the Settlement Deed.
She referred in this context to LNC Industries Ltd v BMW (Aust) Ltd [1983] HCA 31; (1983) 151 CLR 575 at 581-582 and Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; (2005) 223 CLR 251.
68GHR ultimately characterised the dispute in this way:
(a)A claim by the respondents for the accounts of the Trust and the company going back 20 years, a splitting of the Trust and removal of GHR as trustee.
(b)Claims by GHR, GHFR and HPPL that:
(i)it was not legally open to the respondents to seek from the court the relief claimed as the Settlement Deed barred them from doing so;
(ii)even if it was open, no such relief should be granted on the merits;
(iii)by reason of the respondents agitating the claims barred by the Settlement Deed, the respondents had breached the Settlement Deed thereby relieving HPPL of the obligation to pay dividends on the A Class shares.
She stated the dispute includes:
"i.An examination of the entire conduct of the trustee beyond merely the 3 September letter, as might be relevant to whether the very serious step of removing her as trustee should occur;
ii.An examination of whether the conduct of the trustee, in the 3 September letter or otherwise, set against a background of the relationship of the parties, as substantially modified by the deed, justifies the label of "misconduct" or requires a very substantial interference with the trustee's powers constituted by ordering of accounts for 20 years or splitting of the trust;
iii.All matters of defence or immunity considered above;
iv.The matters of counter-claim: whether the conduct of the plaintiffs in bringing the court proceedings is a breach of the deed, entitling the trustee and the company to suspend the distributions under cl 5 of the deed."
69GHR submitted that once the dispute involved the contention that it was not legally open to the respondents to pursue in court the claims made in the amended summons, there was a dispute under the Settlement Deed even giving these words their narrowest meaning.
She submitted that once this part of the dispute was a dispute under the Settlement Deed, the whole dispute is a dispute under the Settlement Deed.
70Alternatively, she submitted that if there was a defence or immunity against the proceedings being brought in court, the court should uphold the contract and allow the mediation or arbitration to resolve it first and that no court proceedings on the substantive dispute should proceed unless or until it is determined the preliminary defence has failed.
71GHR submitted that a broader characterisation of the dispute is that the parties are in dispute as to whether the respondents have a legal entitlement to the relief claimed, such dispute including all matters the respondents would need to establish to obtain such relief and all matters of defence and counter-claim the parties resisting such relief can properly raise.
She submitted such a dispute both grows out of the Settlement Deed and cannot be correctly resolved without a close examination of it. She submitted that the Settlement Deed forms the subject matter out of which the claims arise. | [
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|
nsw_caselaw:54a636e73004de94513d9757:31 | nsw_caselaw:54a636e73004de94513d9757 | 151In submissions on the hearing of the appeal, senior counsel for the respondents emphasised that the power under s 77(2)(b) of the Trustee Act and the power to make a vesting order under s 79(1) of the Trustee Act were derived from statute. He submitted that an arbitrator's power and authority does not derive from statute but from a private agreement between the parties
152Senior counsel for the respondents also pointed to the fact that ss 85(4), (5), (6) and (7) demonstrate that vesting orders made under the Trustee Act can affect the rights of third parties.
He submitted, consistent with what was decided by Santow J in Andco Nominees Pty Limited v Lestato Pty Limited [1995] 126 FLR 404; (1995) 17 ACSR 239 that a vesting order of itself vests ownership in the person in whose favour it is made by operation of law and gives the person named in the vesting order the right to compel a transfer in the person's own favour (see Andco Nominees supra at 258-259).
In those circumstances, it was submitted, the orders would effect the rights of third parties, in this case HPPL, which would be required to register a transfer of shares, as a vesting order will prevent any conduct by the directors preventing the registration of share transfers (see Andco Nominees supra at 259-260).
It was said that as third party rights were affected this was another reason that the dispute was not capable of settlement by arbitration. Reliance was placed in this context on the decision of Austin J in ACD Tridon Inc v Tridon Australia Pty Limited [2002] NSWSC 896 at [189] and Mustill and Boyd supra at 149.
Notice of Contention of JLH, HRW, BHR: Submissions of GHR
153In her written submissions GHR said the relevant principles applicable to whether a dispute was arbitrable were correctly summarised by Hammerschlag J in Larkden Pty Limited v Lloyd Energy Systems Pty Limited [2011] NSWSC 268; (2011) 279 ALR 772.
She pointed out that in that case it was held that a dispute between parties as to their rights and entitlements to a patent application was capable of being arbitrated, as it did not impinge upon powers reserved to the Commissioner of Patents or the Federal Court.
She pointed out that a similar approach was taken by the Supreme Court of Canada in Desputeaux v Editions Chouette (1987) Inc [2003] 1 SCR 178 at [38] in determining that a copyright dispute between the parties was arbitrable.
154She submitted that the fact that the statutory power to remove a trustee was reposed in the court did not render the dispute incapable of arbitration, referring by way of analogy to cases such as IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466, where disputes involving claims under s 82 and s 87 of the Trade Practices Act 1974 (Cth) were held to be arbitrable.
155Orally, senior counsel for GHR submitted that just as an arbitrator could deal with claims under the Trade Practices Act, an arbitrator could exercise the statutory power conferred upon a court to remove a trustee.
Senior counsel for GHR also referred to the fact that the court had defined degrees of control of the arbitration process by virtue of the provisions of ss 38, 39 and 40 of the Commercial Arbitration Act which led, he submitted, to the conclusion that the supervisory jurisdiction of the court over trustees was not entirely ousted.
156Senior counsel for GHR also pointed to the fact that a vesting order was not sought in the statement of claim and to the reluctance of courts to make vesting orders as a substitute for ordinary conveyancing practice: Re Purkiss [1999] 3 VR 223 at [18].
He submitted that there would be no need for a vesting order as an arbitrator could make an award removing GHR as trustee and requiring her to execute the deed of appointment of a new trustee. He submitted that this would be enforceable under s 33 of the Commercial Arbitration Act.
Notice of Contention of JLH, HRW, BHR: Submissions of GHFR | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:48 | nsw_caselaw:54a636e73004de94513d9757 | vii) provided that the Second Plaintiff would not take any action, suit, claim, demand in relation to, or in connection with, the First Defendant including amending the 1988 Trust Deed and the Trust (cl 9);
viii) provided that the Deed could be pleaded in bar to any action or suit taken by the Second Plaintiff now or hereafter against the First Defendant in relation to, or in connection with, the First Defendant including amending the 1988 Trust Deed and the Trust (cl 9).
[55] On or about 13 September 2011, the Plaintiffs, in their capacity as beneficiaries of the Trust, requested copies of the following documents from the First Defendant in her capacity as trustee of the Trust:
[55] In response to paragraph 55 the first defendant:
i) copies of the accounts of the Trust since the date of death of Mr Hancock;
i) admits the same but says that the 1995 Trust Amendment Deed was effective.
..;
ii) a copy of the executed version of the 1988 Trust Deed;
ii) denies that the plaintiffs had any entitlement to be provided with such copies of the Trust information requested, other than in accordance with the Trust Deed or the Hope Downs Deed;
iii) a copy of the executed version of the 1995 purported variation of the 1988 Trust Deed;
iii) says that if the plaintiffs did have an entitlement, which is denied, says that it was a condition of any such request that the plaintiffs make the same in good faith and reasonably, and the first defendant denies that any such condition was satisfied;
iv) details of all dividends declared by HPPL since the date of death of Mr Hancock.
iv) further says that the request that was made was not reasonable, not necessary and not made for a proper purpose;
...
[56] On or about 27 October 2011, the Plaintiffs, in their capacity as beneficiaries of the Trust:
[56] In response to paragraph 56 the first defendant:
i) requested copies of...
documents from the First Defendant in her capacity as trustee of the Trust:
.
..
[List includes Trust Deed, documents executed by Mr Hancock and/or first defendant purporting to vary Trust Deed, financial statements, management accounts and tax returns, documents identifying assets of trusts,
all resolutions executed by Mr Hancock and the First Defendant] ii)
denies that the plaintiffs had any entitlement to be provided with such copies of the Trust information requested,
other than in accordance with the Trust Deed and the Hope Downs Deed;
iii) says that if the plaintiffs did have an entitlement, which is denied, says that it was a condition of any such request that the plaintiffs make the same in good faith and reasonably, and the first defendant denies that any such condition was satisfied;
iv) further says that the request that was made was not reasonable, not necessary and not made for a proper purpose;
...
[57] On or about 27 October 2011, the Plaintiffs, in their capacity as beneficiaries of the Trust sought confirmation from the First Respondent as to whether any property other than the Shares was, or had been the property of the Trust.
[57] in response to paragraph 57 the first defendant:
...
ii) denies that the plaintiffs had any entitlement to be provided with such copies of the Trust information requested, other than in accordance with the Trust Deed or the Hope Downs Deed;...
[58] the Plaintiffs, in their capacity as beneficiaries of the Trust had an entitlement to be furnished with each of:
[58] In response to paragraph 58 the first defendant:
[cites multiple Trust documents including; copies of accounts of Trust, executed version of Trust and Trust variations; details of dividends; all documents executed by Mr Hancock and the First Defendant purporting to vary the Trust; financial statements; | [
-0.037087582051754,
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|
nsw_caselaw:54a636e73004de94513d9757:43 | nsw_caselaw:54a636e73004de94513d9757 | His Honour considered (at 166) the effect of IBM Australia v National Distribution Services to have been that "it is possible and lawful for parties to agree to refer to arbitration a dispute under the Trade Practices Act 1974 (Cth),
secondly, that an arbitrator to whom such a dispute has been referred may, in general, exercise the discretionary powers which the Act confers upon the Supreme Court or the Federal Court .
.." (Emphasis added).
216I accept the force of Young JA's observations about the potential difficulties of enforcing an arbitrator's award. However, compelling as they are, they do not militate against conclusion that the respondent's claims, if within cl 20, would be arbitrable. As Patten LJ said in Fulham Football Club (1987) Ltd v Richards [2011] EWCA Civ 855; [2012] 1 All ER 414 (at [84]):
" ... [A]s explained earlier in this judgment, these jurisdictional limitations on what an arbitration can achieve are not decisive of the question whether the subject-matter of the dispute is arbitrable.
They are no more than the practical consequences of choosing that method of dispute resolution: see Societe Commerciale de Reassurance v ERAS (International) Ltd [1992] 1 Lloyd''s Rep 570; Wealands v CLC Contractors Ltd [1999] 2 Lloyd's Rep 739."
Mediation
217I agree with Bathurst CJ's reasons on this issue.
218YOUNG JA: I agree with the Chief Justice and with the orders he proposes, but wish to add some comments of my own.
219I respectfully agree with the Chief Justice in [121] that we should not follow what Lord Hoffmann said in Fiona Trust and Holding Corporation v Privalov [2007] 4 All ER 951, 958 [12]. However, I would not want to think that my concurrence means that the prime thrust of what Lord Hoffmann said in that case should be rejected.
Lewison & Hughes, The Interpretation of Contracts in Australia (Law Book Company, Sydney, 2012) section 2.06, clearly shows that much of the Fiona case is consistent with leading Australian authority. I agree with the Chief Justice's caveat in his [122].
220However, as French J (as his Honour then was) said in Paper Products Pty Ltd v Tomlinsons (Rochdale) Ltd (1993) 116 ALR 163, 172, where parties have chosen narrow words, a court is somewhat inhibited in resorting to a general proposition that commercial contracts are to be construed liberally.
221When considering the phrase "under this deed" a court must take into account the treatment that the word "under" has received in decisions in the past. One would like to think that drafters of legal documents would have had them in mind when preparing the document in question.
222I respectfully agree with the Chief Justice in his [129] that authorities dealing with the phrase "under the Constitution" or the like are not of assistance. However, I consider that there is some useful material in cases which have construed the phrase "under a treaty".
223Although the authorities have not always spoken with one voice, the prevailing view is that a matter will not be said to be within the phrase merely because the treaty has to be interpreted to get to a result in the litigation.
What is essential is, in the words of Miles CJ in R v Donyadideh (1993) 114 FLR 43, 47-8, "that the right, duty or liability in question 'owes its existence' to the treaty or depends upon the treaty for its enforcement, or has its source in the treaty".
See also the discussion by O'Keefe J in this Court in Matchett v Deputy Commissioner of Taxation [2000] NSWSC 975; 158 FLR 171, 185-188 and the remarks of Kirby J in Re East; Ex Parte Nguyen [1998] HCA 73; 196 CLR 354, 382.
224These thoughts confirm the views expressed by the Chief Justice.
225Where I respectfully differ from the Chief Justice is his view summarised in [175] that, subject to the exercise of discretion a claim for removal of a trustee and associated issues would be arbitrable. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:36 | nsw_caselaw:54a636e73004de94513d9757 | The only authority cited in support of that proposition was the decision of the United Kingdom Court of Appeal in Czarnikow v Roth Schmidt & Company [1922] 2 KB 478 which held void a provision in the rules of the Refined Sugar Association prohibiting an application by the arbitrator to the court for an opinion of the court on any question of law.
The clause was held to be void for the reasons set out by Atkin LJ at 491:
"The jurisdiction that is ousted in this case is not the common law jurisdiction of the Courts to give a remedy for breaches of contract, but the special statutory jurisdiction of the Court to intervene to compel arbitrators to submit a point of law for determination by the Courts. This appears to me to be a provision of paramount importance in the interests of the public."
175Notwithstanding these matters, it is my opinion that at least in circumstances where the trustee and each beneficiary have expressly agreed to their disputes being referred to arbitration, a court should give effect to that agreement.
The supervisory jurisdiction of the court is not ousted. It continues to have the supervisory role conferred upon it by the relevant legislation, in this case the Commercial Arbitration Act.
There may be powerful commercial or domestic reasons for parties to have disputes between a trustee and beneficiary settled privately. It does not seem to me that the matters to which I have referred above should preclude a court from giving effect to such an agreement provided the jurisdiction of the court is not ousted entirely.
176The fact that an arbitrator may not have power to remove a trustee or make a vesting order does not alter this position. An arbitrator could give effect to a claim for removal by ordering the trustee to resign, to appoint a new trustee and to convey the trust property to that person. Such an award could be enforced as a judgment under, in this case, the Commercial Arbitration Act s 33.
177In these circumstances it does not seem to me to be contrary to public policy for the beneficiaries under the Trust and the trustee to agree to resolve their disputes by arbitration, provided the supervisory jurisdiction of the court contained in the relevant legislation is maintained.
It is not necessary in the present case to deal with a more difficult question which would arise if the arbitration clause was contained in the Trust Deed and purported to bind all persons beneficially entitled under the Trust, including infants and unborn beneficiaries.
178The other grounds on which it is said the dispute is not capable of resolution by arbitration may be dealt with shortly. The fact that it is not a commercial dispute and involves breaches of fiduciary duty does not mean that it is incapable of arbitration.
I have already dealt with the public policy argument and the fact that it is not a commercial dispute seems irrelevant, particularly as there may be sound reasons for the parties desiring that a family or domestic dispute be resolved privately.
179So far as the suggestion that third party rights are affected, the only third party identified was HPPL, which supports the reference to arbitration. Its position could be readily accommodated by making a stay conditional upon it submitting to the arbitration and agreeing to be bound by the result.
180Nor does it matter in my view that the claim involves an allegation of serious misconduct. The fact that serious misconduct found by the court is a ground for the removal of a trustee does not, in my opinion, lead to the conclusion that a claim for serious misconduct is not capable of settlement by arbitration.
It has been held that in cases of alleged fraud a stay will be refused as a matter of course where the stay is opposed by the party against whom the fraud is alleged, not where the stay is opposed by the defrauded party: Russell v Russell (1880) 14 Ch 471 at 476-477;
Camilla Cotton Oil Co v Granadex SA [1976] 2 Lloyd's Rep 10 at 16; Cunningham-Reid v Buchanan-Jardine [1988] 2 All ER 438; [1988] 1 WLR 678 at 685-686, 690, 691. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:27 | nsw_caselaw:54a636e73004de94513d9757 | ) 737 (1824) at 824, cited in Miller v Haweis [1907] HCA 44; (1907) 5 CLR 89 at 93 cited with approval in Felton v Mulligan supra). Suffice to say this principle does not, in my opinion, provide any real assistance to the construction of a private arbitration clause.
130The opening words of cl 20 require any party to the Settlement Deed who has a dispute with any other party to notify the other party of the dispute. For this obligation to arise the dispute is required to be one under the Settlement Deed.
The reference to the party who has a dispute and the requirement of that party to notify tends to suggest that the focus of the clause is on the claim raised by the party asserting the dispute.
The dispute in the present case was whether GHR was entitled to engage in the conduct complained of and whether as a consequence the Trust should be split and/or GHR removed as trustee.
Although at that time GHR had not formally responded to the claim, it could be reasonably anticipated she would deny the allegations and in that sense there was a dispute: AMEC Civil Engineering Ltd v Secretary of State for Transport [2005] 1 WLR 2339 at [30]-[31]; Collins (Contractors) Ltd v Baltic Quay Management (1994) Ltd [2004] EWCA Civ 1757 at [62]-[63].
131As appears from the schedule attached to this judgment the defence of GHR utilises the Settlement Deed in three ways.
First, by justifying the conduct of seeking the releases sought by GHR in a draft deed of 3 September 2011 sent to the respondents as seeking no more than the releases which had already been given (see pars [17], [19], [38], [40], [42], [44], [58], [64] and [65] of the statement of claim and defence);
second, by pleading the Settlement Deed as a bar to the claim for accounts (see pars [23], [24], [30], [31], [55] and [56] of the statement of claim and defence); and third, by pleading other clauses of the Settlement Deed as justification for the conduct, for example, par [17] of the statement of claim and defence (cll 9.
1 and 9.7), par [40] of the statement of claim and defence (cll 7 and 13), and par [64] of the statement of claim and defence (cl 9.1).
132The defences raise disputes under the Settlement Deed as they rely on provisions of the Deed in answer to the respondents' claims. However, those defences will not necessarily determine the outcome of the proceedings.
133GHFR in her defence relies on cll 7(d), 7(e) and 8 of the Settlement Deed as constituting either a representational or conventional estoppel against the respondents making the claims in the proceedings. These pleadings, on their face, do not demonstrate that the claims of the respondents will be governed by or controlled by the Settlement Deed.
As the pleading recognises they will depend in part on whether GHFR relied on representations said to have been made by other parties to the Settlement Deed in entering into it or whether she relied on the mutual assumptions said to arise from the entry into the Settlement Deed. It will also involve the question of whether GHFR will suffer detriment as a result of a departure from these assumptions.
Whilst it is inappropriate to express a final view on these issues, the pleading ignores the fact that JHL only became a party to the Settlement Deed sometime after the other respondents and GHFR bound themselves to the Settlement Deed. It is difficult to see how GHFR in those circumstances could have relied on any representations made by JHL contained in the Settlement Deed.
However, what is of importance is that to the extent that the respondents are bound from pursuing their claim as a result of the estoppels alleged by GHFR, that is not a matter governed or controlled by the Settlement Deed, although the representations and assumptions said to arise from the Settlement Deed will be relevant to the determination of the claim.
134Neither GHR nor GHFR plead in terms that the effect of the Settlement Deed is to absolutely bar any claim by the respondents to remove GHR as trustee or to make claims against her for breach of trust. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:49 | nsw_caselaw:54a636e73004de94513d9757 | all resolutions executed by Mr Hancock or the First Defendant in capacity as trustees; all advices about such resolutions; all documents recording payment of income of the Trust; the advice from PWC; information about property that was or had been Trust property.
] i) denies that the plaintiffs had any entitlement to be provided with such copies of the Trust information;
...
iii) further says that the request that was made was not reasonable, not necessary and not made for a proper purpose, particularly in circumstances where:
the plaintiffs had released the first defendant for any breaches of duty as Trustee of the Trust prior to the ratification of the Hope Downs Deed on 13 April 2007;
...
[63] At all material times, the First Defendant, in her capacity as trustee of the Trust, has been under each of the following duties:
[63] In answer to paragraph 63 the first defendant denies the content of the duties alleged against the first defendant in her capacity as Trustee of the Trust adequately and sufficiently describe the duties to which she is subject in the particular circumstances of this Trust and according to the terms of the Trust Deed, and save as aforesaid:
i) to obey the terms of the Trust in the absence of a court order to the contrary;
.
...
ii) to act honestly and in good faith;
iv) says in answer to subparagraph 63(iv) the first defendant had a wide discretion under the Trust and her duty was to exercise it by reference to the objects and purposes of the Trust having regard to the competing interests of the various beneficiaries of the Trust, and without taking into account improper, irrelevant or irrational considerations.
The first defendant furthers says that she had a duty to exercise the discretion personally and from time to time, having regard to all relevant circumstances as they exist from time to time;
iii) to act in the best interests of the beneficiaries of the Trust;
.
...
iv) to act impartially as between beneficiaries;
ix) admits subparagraph 63(ix) subject to the right of the first defendant to act despite other interests in accordance with clause 7C of the Trust Deed;
v) not to interfere with the lawful exercise of rights held by the Plaintiffs in their capacity as beneficiaries of the Trust;
x) denies subparagraph 63(x), refers to and repeats the matters in paragraph 58 above; [plaintiffs had no entitlement to be provided with copies of the relevant Trust information]
vi) to exercise such care and skill in the exercise of her duties as trustee as is reasonable in the circumstances;
Particulars: Hope Downs Deed, 2007 Deed, 2009 Deed.
vii) to refrain from acting irresponsibly, capriciously or wantonly;
xi) denies subparagraph 63(xi), refers to and repeats the matters in paragraph 58 above;
viii) not to exercise, or refrain from exercising, powers for ulterior or improper purposes;
.
..
ix) to avoid any conflict of duty and interest;
x) to provide the accounts of the Trust to beneficiaries as and when requested;
xi) to give to beneficiaries full and accurate information as to the amount and state of the trust property as and when requested; and
xii) to furnish beneficiaries with the terms of the Trust;
xiii) to make available to beneficiaries all documents relating to the trust as and when requested.
[64] The First Defendant:
[64] In response to the whole of paragraph 64 the first defendant says as follows:
i) gave the Plaintiffs only one business day in which to consider the contents of the 3 September Letter and 3 September Deed before the Trust was due to vest in the absence of a variation to the 1988 Trust Deed;
i) admits subparagraphs 64 I) but says that the first and third plaintiffs had previously agreed to extend the vesting date to the maximum extent permitted by law by the Hope Downs Deed and in the case of the second plaintiff by the 2007 Deed and further says that the plaintiffs were all sui juris;
ii) engaged in the conduct in (i) above despite being aware of the vesting date of the Trust at all material times;
Particulars: Clause 9. | [
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|
nsw_caselaw:54a636e73004de94513d9757:46 | nsw_caselaw:54a636e73004de94513d9757 | [Further request on 5 September 2011 for copy of HPPL constitution, copies of bank statements and tax returns for trust, information provided to PWC,
and cashflow forecasts for Hope Downs] [31] In answer to paragraph 31 the first defendant refers to and repeats the matters pleaded at paragraphs 23 and 24 above.
[There was no obligation to provide requested material, and in certain respects to do so was proscribed by the Hope Downs Deed]
[38] The 5 September 2011 Deed provided:
[38] In answer to paragraph 38 the first defendant:
i) that the First Plaintiff released and discharged the First Defendant from all actions, suits, claims, demands and causes of action both in law and in equity in relation to, or in connection with, the First Defendant including amending the 5 September 2011 Deed (cl 4.
1);
i) refers to and repeats the matters pleaded in paragraphs 17, 19, 36 and 37 [Content and effect of emails not sufficiently set out in statement of claim;
what was sought by First Defendant was in conformity with Hope Downs Deed]
ii) that the First Plaintiff covenanted that she would not take any action, suit, claim, demand in relation to, or in connection with, the First Defendant including amending the "Deed of Settlement" (cl 4.
2);
ii) says further that the release and discharge and covenant sought from the first plaintiff were not materially different to the releases provided for in the Hope Downs Deed and what was sought by the 3 September Deed;
iii) that the 5 September 2011 Deed could be pleaded in bar to any action or suit taken by the First Plaintiff then or hereafter against the First Defendant in relation to, or in connection with, the First Defendant including amending the 5 September 2011 Deed (cl 4.2).
Particulars: Clauses 5 and 6 of the Hope Downs Deed and Clause 3 of the 3 September 2011 Deed.
[40] The Deed Poll:
[40] In answer to paragraph 40 the first defendant admits the same but denies that the content and effect of the Deed Poll is fully set out therein:
i) stated that "clause 6" of the 1988 Trust Deed "will be amended to provide that the Trust is to vest on 1 July 2068, as follows" (recital B);
i) that the release and discharge and covenant sought from the third plaintiff was not materially different to the releases provided for in the Hope Downs Deed and what was sought by the 3 September Deed and repeats paragraph 17;
ii) provided that the Third Plaintiff had no objection to the First Defendant amending the 1988 Trust Deed in the manner provided for (cl 1);
ii) the first defendant further says that the request contained in the Deed Poll was not unreasonable, both in respect of this Trust and for trustees generally, given the terms and operation of the Trust and the Hope Downs Deed and the protections usually available to trustees and providers of various professional services.
iii) provided that the Third Plaintiff released and discharged the First Defendant from all actions, suits, claims, demands and causes of action both in law and in equity in relation to, or in connection with, the First Defendant amending the 1988 Trust Deed in the manner provided for (cl 2);
iii) the first defendant furthers states that the Deed Poll did no more than seek to confirm that the releases and covenants contained in the Hope Downs Deed would apply to conduct of the first defendant that occurred after the execution of the Hope Downs Deed and the protections usually available to trustees and providers of various professional services.
iv) provided that the Third Plaintiff acknowledged and confirmed that the amendments provided for were in the best interests of the beneficiaries of the Trust and the First Defendant in making the amendments was acting in the best financial interests of the beneficiaries of the Trust (cl 3).
Particulars: Clauses 6, 7 and 13 of the Hope Downs Deed. | [
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|
nsw_caselaw:54a636e73004de94513d9757:41 | nsw_caselaw:54a636e73004de94513d9757 | Underpinning those agreements are equitable principles arising, to a substantial extent from, though not confined to, the law of trusts. In such circumstances, in my view, there is little or no room for the application of the presumption Lord Hoffmann declared.
207Returning to the approach taken in the authorities dealing with language in the same terms as cl 20 and having regard to the language of that clause, focussing as it does on a "dispute under this deed" (emphasis added),
I would conclude that the parties intended to refer to arbitration only those disputes that may arise regarding the rights and obligations which are created by the Settlement Deed itself and which depend upon it for their enforcement.
I agree therefore with the primary judge's construction of cl 20 (at [30]).
I do not, however, agree with his Honour (at [27]) that determining whether there is "a dispute under" the Settlement Deed focuses on whether the respondents have such a dispute. As Windeyer J said in Felton v Mulligan, both claims and defences have to be examined to determine whether the dispute can be characterised as "under this Deed".
I agree with Bathurst CJ (at [126] - [127]) that the orders the respondents seek are not a "dispute under this deed". I also agree with Bathurst CJ (at [144] - [145]), that the Settlement Deed does not bar the respondents' claims.
208I would also agree with the primary judge (at [49]) and Bathurst CJ (at [148]) that even if, as I would accept, the clauses invoked by the appellants in their defences raise "dispute[s] under this Deed", they were part of a "larger dispute", as to which it is a matter of discretion whether the Court should grant a stay pending arbitration.
209I agree with Bathurst CJ's reasons (at [184] - [192]) that it would not be appropriate to stay the proceedings pending determination of the defences by arbitration.
Arbitrability
210I agree with Bathurst CJ's reasons that the fact that the respondents' claims seek to invoke both the inherent and statutory jurisdiction of the court to remove GHR as trustee and to reconstitute the trust, a process which will include the making of a vesting order and ancillary issues, does not render such dispute non-arbitrable.
I would add the following to his Honour's consideration of this issue.
211The common element to the notion of non-arbitrable matters is that there is a sufficient element of legitimate public interest in their subject matter making the enforceable private resolution of such disputes outside the national court system inappropriate: Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192;
(2006) 157 FCR 45 (at [200]) per Allsop J (as his Honour then was) (Finn and Finkelstein JJ agreeing).
His Honour listed disputes such as those concerning intellectual property, anti-trust and competition disputes, securities transactions and insolvency as types of disputes which national laws may see as not arbitrable.
212In Larkden Pty Limited v Lloyd Energy Systems Pty Limited [2011] NSWSC 268; (2011) 279 ALR 772 (at [62]) Hammerschlag J stated that "[g]enerally, any dispute or claim which can be the subject of an enforceable award is capable of being settled by arbitration"; see also Mustill and Boyd (at 149).
His Honour (at [64]) considered that criminal prosecutions are non-arbitrable, as well as the determination of status matters "such as bankruptcy, divorce, and the winding up of corporations in insolvency" and "certain types of dispute concerning intellectual property such as whether or not a patent or trade mark should be granted".
He observed that "[t]hese matters are plainly for the public authorities of the state" commenting that "[p]atents and trade marks are monopoly rights that only the state can grant": (at [64]). | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d9757:47 | nsw_caselaw:54a636e73004de94513d9757 | [42] The revised Deed" ("Revised Deed Poll"):
[42] In response to paragraph 42 the first defendant:
...
...
iv) provided that the Third Plaintiff released and discharged the First Defendant from all actions, suits, claims, demands and causes of action both in law and in equity in relation to, or in connection with, the First Defendant amending the 1988 Trust Deed in the manner provided for, and otherwise in regard to the First Defendant and the Trust (cl 2);
ii) says further that the first defendant formed the view that the exercise by her of the power to extend the vesting date was in the best financial interests of the plaintiffs and the second defendant and repeats paragraphs 17, 19, 36, 37 and 38.
[Content and effect of emails not sufficiently set out in statement of claim; what was sought by First Defendant was in conformity with Hope Downs Deed]
...
vii) provided that the First Plaintiff released and discharged the First Defendant from all actions, suits, claims, demands and causes of action both in law and in equity in relation to, or in connection with, the First Defendant including amending the 1988 Trust Deed and the Trust (cl 8);
viii) provided that the First Plaintiff would not take any action, suit, claim, demand in relation to, or in connection with, the First Defendant including amending the 1988 Trust Deed and the Trust (cl 9);
ix) provided that the Deed could be pleaded in bar to any action or suit taken by the First Plaintiff now or hereafter against the First Defendant in relation to, or in connection with, the First Defendant including amending the 1988 Trust Deed and the Trust (cl 9).
[43] By email dated 6 September 2011 to the Second Plaintiff, the First Defendant requested that the Second Plaintiff execute the "revised Deed" attached to the email ("Second Revised Deed Poll").
[43] In response to paragraph 43 the first defendant admits the contents of the email attaching the Second Revised Deed Poll and repeats paragraphs 17, 19, 36, 37 and 38. [Content and effect of emails not sufficiently set out in statement of claim; what was sought by First Defendant was in conformity with Hope Downs Deed]
[44] The Second Revised Deed Poll:
[44] In response to paragraph 44 the first defendant:
i) stated that consideration had been given that it was not in the best interests of the beneficiaries of the Trust to vest on 6 September 2011 and should provide that the Trust is to vest on 1 July 2068 "as follows" (recital B);
i) admits the same .
..and repeats paragraphs 17, 19, 36, 37 and 38; [content and effect of emails not sufficiently set out in statement of claim; what was sought by First Defendant was in conformity with Hope Downs Deed]
ii) stated that the Plaintiff had commenced the Proceedings against the First Defendant "in relation to the Trust" (recital C);
iii) provided that the Second Plaintiff had no objection to the First Defendant amending the 1988 Trust Deed in the manner provided for (cl 1);
iv) provided that the Second Plaintiff released and discharged the First Defendant from all actions, suits, claims, demands and causes of action both in law and in equity in relation to, or in connection with, the First Defendant amending the 1988 Trust Deed in the manner provided for, and otherwise in regard to the First Defendant and the Trust (cl 2);
v) provided that the Second Plaintiff acknowledged and confirmed that the amendment pleased at [26(ii)] above was in the best interests of the beneficiaries of the Trust and the First Defendant in making the amendment was acting in the best financial interests of the beneficiaries of the Trust (cl 3);
vi) provided that the Second Plaintiff released and discharged the First Defendant from all actions, suits, claims, demands and causes of action both in law and in equity in relation to, or in connection with, the First Defendant including amending the 1988 Trust Deed and the Trust (cl 8); | [
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|
nsw_caselaw:54a636e73004de94513d9757:34 | nsw_caselaw:54a636e73004de94513d9757 | claim will be ventilated fully in the arbitral forum applying the laws chosen by the parties to govern the dispute in the same way and to the same extent as it would be ventilated in a national court applying national laws.
"
167The approach outlined above suggests that it is only in extremely limited circumstances that a dispute which the parties have agreed to refer to arbitration will held to be non-arbitrable.
This expansive view has generally been accepted by the courts. It was reflected in the remarks of Mason J (as his Honour then was) in Government Insurance Office (NSW) v Atkinson-Leighton Joint Venture [1981] HCA 9; (1981) 146 CLR 206 (at 246-247):
"For my part, I do not think that the answer to the question should depend on what was decided in Edwards over one hundred years ago when the basis of the Court's decision was not clearly elaborated in the judgment.
The real question, as it seems to me, is whether there is to be implied in the parties' submission to arbitration a term that the arbitrator is to have authority to give the claimant such relief as would be available to him in a court of law having jurisdiction with respect to the subject matter.
In the United States it is accepted that the parties to an arbitration are free to clothe the arbitrator with such powers as they may deem it proper to confer, provided that they do not violate any rule of law (5 Am.
Jur. (2d), p. 539). There it has been held that the parties may authorize the arbitrator to grant equitable relief, even including relief by way of injunction (5 Am. Jur. (2d), p. 620; 70 A.L.R.
(2d), p. 1058). I see no reason why the parties cannot authorize an arbitrator to decide whether interest is payable by one party to another, just as they can authorize him to decide whether damages should be awarded.
It is to the submission that one looks to find the powers of the arbitrator, though the powers thereby conferred are supplemented by the Arbitration Act and by other relevant statutory provisions."
168This approach is also reflected in the fact that it has been held that parties can submit to arbitration issues involving rights conferred under statute and claims where the power to grant statutory remedies has been conferred on the court.
169I referred earlier to the decision of this Court in Francis Travel supra. In that case it was held that claims under the Trade Practices Act, including the granting of discretionary remedies under s 87 of that Act, could be settled by arbitration.
In that case, Gleeson CJ, with whom the other members of the Court agreed, referred to the decision of the United States Supreme Court in Mitsubishi Motors Corporation v Soler-Chrysler Plymouth Inc 473 US 614 (1985),
where it was held that anti-trust claims under the Sherman Act 1890 (US) were arbitrable under an agreement which provided for arbitration by the Japanese Commercial Arbitration Association and in which the proper law of the contract was Swiss.
Gleeson CJ (at 167) cited the following passage from the judgment of Blackmun J in Mitsubishi Motors supra with approval:
"There is no reason to assume at the outset of the dispute that international arbitration will not provide an adequate mechanism. To be sure, the international arbitral tribunal owes no particular allegiance to the legal norms of particular states; hence, it has no direct obligation to vindicate their statutory dictates. The tribunal, however, is bound to effectuate the intentions of the parties.
Where the parties have agreed that the arbitral body is to decide a defined set of claims which includes, as in these cases, those arising from the application of American antitrust law, the tribunal therefore should be bound to decide that dispute in accord with the national law giving rise to the claim" (Mitsubishi Motors at 636-637). | [
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|
nsw_caselaw:54a636e73004de94513d9757:35 | nsw_caselaw:54a636e73004de94513d9757 | 170Further, the fact that an arbitrator cannot grant all the relief a court is empowered to grant does not mean the dispute is incapable of arbitration. In IBM Australia Ltd supra the majority held that an arbitrator could not make an award under s 87 of the Trade Practices Act to declare a contract void ab initio.
However, it was held that that did not make the dispute incapable of arbitration. In that case Clarke JA, with whom Handley JA agreed, made the following comment (at 486):
"But the fact that it is not open to an arbitrator to exercise all of the remedies set out in the relevant sections of the Act does not mean that he is not entitled to determine claims made under s 52 and to grant a successful party one or more of the remedies enumerated in s 82 and s 87 of the Act to the extent that it is appropriate that an arbitrator grants such a remedy."
171A similar approach has been taken by the Court of Appeal of England and Wales, in Fulham Football Club supra (permission to appeal to the Supreme Court refused by the Supreme Court). In that case Longmore LJ, with whom Rix LJ agreed, made the following comment (at [103]):
"It is well settled that the fact that an arbitrator cannot give all the remedies which a court could does not afford any reason for treating an arbitration agreement as of no effect, see Societe Commerciale de Reassurance ERAS (International) Ltd, Re ERAS EIL appeals [1992] 1 Lloyd's Rep 570 at 610.
The inability to give a particular remedy is just an incident of the agreement which the parties have made as to the method by which their disputes are to be resolved.
The reason put forward by Mr Marshall for regarding the FAPL rules and FA rules as inapplicable to unfair prejudice petitions (because of the effect any award might have or might not have on third parties) is of even less substance than the supposed inability of an arbitrator to give any particular remedy."
172Thus it has been held that although an arbitrator would not have power to order the winding-up of a company (see A Best Floor Sanding Pty Limited v Skyer Australia Pty Limited [1999] VSC 170 at [13]-[19]) claims for relief under s 232 of the Corporations Act and its United Kingdom equivalent s 994 of the Companies Act have been held to be capable of being resolved by arbitration:
ACD Tridon supra at [191]-[194];
Fulham Football Club supra at [76]-[79], [83], [101]-[103].
Similarly, the Supreme Court of Canada has concluded that disputes between parties as to the ownership of copyright are capable of settlement by arbitration: Desputeaux v Editions Chouette supra at [38], while Hammerschlag J in Larkden Pty Limited supra held that a dispute as to entitlements to a patent application was capable of resolution by arbitration.
173It is with this background that it falls to be determined whether a claim to remove a trustee is capable of settlement by arbitration. None of the parties were able to point to any authority on the question.
It is correct, as the respondents submitted, that a trust is a creature of equity and the courts maintain an inherent supervisory jurisdiction over the administration of trusts: McLean v Burns Philp Trustee Co Limited (1985) 2 NSWLR 623 at 633, 637.
This Court in Rinehart v Welker [2011] NSWCA 403 at [52] expressed the view that the proper conduct of trustees was a matter which required close public scrutiny.
Further, the approach of a court in evaluating all relevant circumstances in considering whether it is in the interests of the beneficiaries to remove a trustee (Miller v Cameron supra) is a matter which tends against such disputes being arbitrable.
174In an article "The Arbitration of Trust Disputes" Journal of International Trust and Corporate Planning (1999) vol 7 No 4, Messrs Cohen QC and Staff expressed the view that the statutory jurisdiction of the court to appoint a new trustee could not be ousted by an arbitration provision. | [
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|
nsw_caselaw:54a636e73004de94513d9757:39 | nsw_caselaw:54a636e73004de94513d9757 | 197I agree with Bathurst CJ (at [120]) that determining the proper construction of cl 20 of the Settlement Deed turns on the language of the provision, bearing in mind that the words of an arbitration clause should, to the extent possible, be consistent with the ordinary meaning of the words liberally construed.
198There are multiple examples of the construction of the various verbal formulae used in arbitration clauses (and elsewhere), however as Sir Michael J Mustill and Stewart C Boyd said in Commercial Arbitration, 2nd ed, Butterworths, 1989 (at 118), after referring to numerous such illustrations:
"... any attempt to ascribe an immutable meaning to a particular form of words would be not only unprofitable but positively misleading.
Each arbitration clause must be construed in the context of the contract as a whole, and the meaning of a particular formula may be broader or narrower depending on the nature of the transaction, the circumstances in which the arbitration clause came into existence, and the other provisions of the contract.
A decision on a particular form of words in one contract is no sure guide to its meaning in another."
199While Mustill and Boyd's cautionary words must be borne in mind, it is also of some assistance to look at some of the authorities for guidance.
200Evans J's statement in Overseas Union Insurance Ltd v A A Mutual International Insurance Co Ltd [1988] 2 Ll R 63 (at 67) usefully illustrates the narrower approach taken to construing words such as those used in cl 20 of the Settlement Deed:
"[A] broad distinction ... may be drawn between those clauses which refer to arbitration only those disputes which may arise regarding the rights and obligations which are created by the contract itself, and other clauses which show an intention to refer to some wider class or classes of disputes.
This distinction is obviously clear and justified as a matter of law. It may also be one which would be recognised by the parties whose contract it is, for at the very least, by making the contract, they demonstrate their agreement to create a new category of legal rights and obligations, legally enforceable between themselves.
Disputes regarding this category may well be described, as a matter of language, as ones arising 'under' the contract, and this meaning of that phrase has been authoritatively recognised and established, e.g. by the House of Lords in Heyman v Darwins and by the Court of Appeal in Ashville.
Conversely, if the parties agree to refer disputes arising 'in relation to' or 'in connection with' their contract, a fortiori if the clause covers disputes arising 'during the execution of this contract' (The Damianos [1971] 1 Lloyd's Rep.
502; [1971] 2 QB 588) or in relation to 'the work to be carried out hereunder', a common form in construction contracts, then, both as a matter of language and of authority, some wider category may be intended."
201As Austin J pointed out in ACD Tridon v Tridon Australia [2002] NSWSC 896 (at [155]), "the basic distinction propounded by Evans J is reflected in Australian cases". Echoing Mustill and Boyd, his Honour added:
"The position under Australian law depends upon the precise meaning of the language used. The Australian approach is not without disadvantage. There is a risk that important commercial outcomes might be made to depend on over-subtle semantic distinctions, a risk to be avoided by a common sense and practical approach to the task of construction."
202BTR Engineering Australia Ltd v Dana Corporation [2000] VSC 246 involved the interpretation of an arbitration clause, the operation of which was invoked in the case of "a dispute involving their respective rights and obligations under this Purchase Agreement".
Warren J (as her Honour then was) held (at [24]) by reference to the Shorter Oxford Dictionary definition of "under" that, as used in the arbitration clause, it meant "governed, controlled, or bound by; | [
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|
nsw_caselaw:54a636e73004de94513d9757:42 | nsw_caselaw:54a636e73004de94513d9757 | 213In Siemens Ltd v Origin Energy Uranquinty Power Pty Ltd [2011] NSWSC 195; (2011) 279 ALR 759 (at [38]) Ball J also indicated that in certain circumstances, a subject matter may be non-arbitrable where jurisdiction was conferred on a specialist tribunal, referring to Metrocall Inc v Electronic Tracking Systems Pty Ltd [2000] NSWIRComm 136; (2000) 52 NSWLR 1.
Applying that principle, his Honour concluded that a dispute under s 15(2)(a)(i) of the Building and Construction Industry Security of Payment Act 1999 (the "BSOP Act") was not arbitrable.
In his Honour's view it was apparent from the nature of the subject matter with which that BSOP Act dealt that it was appropriate for disputes concerning its subject matter to be resolved by the courts, or specialist tribunals established for that purpose.
In that case, s 34(1) of the BSOP Act which says that the Act takes effect despite any provision to the contrary in any contract, was clearly a strong factor in his Honour's decision: see (at [42]). His Honour also said:
"[43] It follows from these provisions that arbitration cannot be a substitute for an adjudication under the Act. In addition, in my opinion, the supervisory jurisdiction the court exercises over the adjudication process cannot be the subject of an arbitration.
In exercising that jurisdiction, the court is exercising a public function of ensuring the integrity of a dispute resolution system established by parliament. It is not simply resolving disputes between private litigants ..."
214Matters of the special nature of which Ball J wrote aside, the mere fact that a power is conferred on a Court by statute, does not mean that an arbitrator cannot exercise such a power. The question turns on the language of the arbitration clause.
Thus it has been held an arbitrator can award relief and make orders under s 87 of the Trade Practices Act 1974 (Cth): IBM Australia v National Distribution Services Pty Ltd (1991) 22 NSWLR 466; Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 (at 167).
In IBM Australia v National Distribution Services, Handley JA said (at 487) he could "see no basis for excluding [from an arbitrator's consideration] claims arising under statutes which grant remedies enforceable in or confer powers on courts of general jurisdiction." In ACD Tridon v Tridon Australia, Austin J held that disputes arising under the Corporations Act 2001 (Cth) were arbitrable.
His Honour (at [192]) could "see nothing special about the Corporations Act that would distinguish it, as a whole, from other legislation such as the Trade Practices Act".
His Honour accepted, however, (at [192]) that public policy considerations such as those to which Warren J (as her Honour then was) referred in A Best Floor Sanding Pty Ltd v Skyer Australia Pty Ltd [1999] VSC 170, "operate against referring to arbitration a determination to wind up a company on the grounds upon which a court may order that a company be wound up.
" However, winding-up aside, to the extent that the statutory powers of a court under the Corporations Act were, "generally speaking, comparable to the powers exercised by a court under the general law", his Honour (at [193]) was of the view that they were "generally not special powers to be exercised having regard to specialist public interest criteria".
215The critical question appears to be "whether there was to be implied in the parties' submission to arbitration a term that the arbitrator is to have the authority to give the claimant such relief as would be available in a court of law having jurisdiction with respect to the subject matter":
Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (at 167), per Gleeson CJ (Meagher and Sheller JJA agreeing).
In that case, at issue was whether an arbitrator had jurisdiction to determine a claim for damages in respect of a contravention of s 52 of the Trade Practices Act. | [
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|
nsw_caselaw:54a636e73004de94513d9757:20 | nsw_caselaw:54a636e73004de94513d9757 | 92HPPL also relied on cl 7(d), the anti-disparagement clause of the Settlement Deed. It submitted that any question of that clause being void on the grounds of public policy did not arise, because the respondents were not prevented from raising allegations of misconduct by GHR in the context of a confidential mediation or arbitration conducted "by lawyers of the highest standing".
It submitted the clause was justified because the public profile of GHR was critical to the business interests and future of HPPL.
93HPPL reiterated its contention that the proceedings constituted a breach of cl 7(e) in that they amounted to a challenge to the right, title and interest of GHR in the Hancock Group.
94HPPL also repeated its submission, made in the Court below, that the proceedings constituted a breach of cl 8 of the Settlement Deed as they challenged GHR's right to "full" ongoing control and management of HPPL.
It submitted that as GHR had a 76.55 per cent shareholding in HPPL outside the Trust, the provision would be unnecessary if a 75 per cent interest in HPPL was sufficient to give full ongoing control and management.
95HPPL also asserted that any claim to remove GHR as trustee would be ineffective by virtue of cl 9.2, as the clause gave GHR the right to be reappointed as trustee should she otherwise cease to be a trustee during her lifetime.
HPPL further contended that the respondents' threatened disclosure of the Deed of Obligation and Release and the Settlement Deed to litigation funders was a breach of cl 9 of the Deed of Obligation and Release and cl 10.1 of the Deed.
It contended that the seeking of an order to provide accounts for the Trust for the years 1992 to date and HPPL for the years 1992 to date, was a breach of the release and discharge given in cl 2 of the Deed of Obligation and Release which was reaffirmed and ratified by the Settlement Deed.
It further submitted the beneficiaries are not shareholders of HPPL and so should not be entitled to HPPL accounts. HPPL did not explain why the respondents other than JLH were bound by cl 2 of the Deed of obligation and release or why the fact that they were not shareholders of HPPL in someway disentitled them to information not from HPPL but from the trustee.
96HPPL submitted that if the construction of cl 20 of the Settlement Deed for which it contended was accepted, the proceedings must be stayed pending the outcome of the mediation or arbitration proceedings or that they should be stayed because they constitute "'Claims' or disputes under the Deed".
97HPPL accepted that its submissions that the commencement of the proceedings by the respondents contravened cll 7(c), 7(d), 7(e), 8, 9.2 and 10.
1 of the Settlement Deed and cl 2 and 3(c) of the Deed of Obligation and Release fell into a different category, but submitted that the Court should exercise its power to grant a stay because HPPL intended to seek to restrain such breaches through the confidential mediation and arbitration process and that the proceedings should be stayed to allow that to be determined.
Appeal of GHR and GHFR: Respondents' submissions
98The respondents submitted that the primary judge was correct to find that the expression "under this deed" was narrower than phrases such as "with respect to" or "in respect of".
They submitted that his Honour was correct in holding that a dispute under the Settlement Deed meant a dispute which derived from or depended on the Deed or involved enforcing or invoking some right created by the Deed. They submitted this analysis was supported by what was said by French J, as his Honour then was, in Paper Products supra.
99The respondents submitted that the subject matter of the proceedings is demonstrated by the relief sought by the moving party, and the allegations made in support of that relief. | [
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|
nsw_caselaw:54a636e73004de94513d9757:29 | nsw_caselaw:54a636e73004de94513d9757 | "It has been held that there is an irreducible core of obligations owed by the trustees to the beneficiaries and enforceable by the beneficiaries which is fundamental to the concept of a trust. If these do not exist, or if the beneficiaries have no rights to enforce them, there is no trust.
The minimum duty is the duty to perform the trusts 'honestly and in good faith' for the benefit of the beneficiaries; it does not include the trustee's duties of skill, care and diligence." (at [1620])
140That passage was cited with approval by the Court of Appeal of Western Australia in Scaffidi v Montevenda Holdings supra at [149].
Whether a provision in an instrument separate to the trust deed exonerating a trustee for the breach of any obligation to act honestly and in good faith would be void as against public policy need not be decided, although it could well be held to be void as ousting the beneficiaries' right to due administration of the trust: Permanent Trustee Company v Dougall (1931) 34 SR (NSW) 83;
Leerac Pty Limited v Fay [2008] NSWSC 1082.
What is clear in the present case is that it would require clear words to achieve that result.
141HPPL in its submissions sought to overcome this difficulty by suggesting the releases only extended to claims made in court as distinct from claims utilising the provisions of cl 20 of the Settlement Deed. There is no justification in the language for this limitation.
142It does not seem to me that the word "otherwise" in the opening words of cl 1.1(a) of the Settlement Deed produces the result that any claim against GHR, whether existing or otherwise at the date of the Settlement Deed, cannot be brought.
The words "or otherwise" refer to the nature of the claim and do not extend the operation of the provision to claims which had not arisen at the time of entry into the Settlement Deed. If there was any doubt about this it is made clear, in my opinion, by the use of the same expression in cl 6(vi) of the Settlement Deed.
143As the releases in cl 6 of the Settlement Deed are limited to the defined Claims and the defined Proceedings (1327 at 2005 in the Supreme Court of Western Australia), it would follow that the releases would not extend to the present claim. As cll 11 and 13 are also limited to defined Claims, they also do not extend to the present claims.
144Clause 7(c) also does not bar the proceedings. The claims made by the respondents do not seek to replace GHR with a non-Hancock Family Group Member, nor can it be said that it is inevitable this will occur, particularly when it is not sought by the respondents.
145It follows that the provisions of cll 6, 7(c), 11 and 13 of the Settlement Deed do not lead to the conclusion that the claims of the respondents are governed or controlled by the Settlement Deed in the sense that their outcome will be determined by its provisions.
146The other provisions of the Settlement Deed raised in answer to the claims of the respondents, whilst relevant to the outcome of the proceedings, do not of themselves govern or control the outcome of those claims. As HPPL correctly submitted, if established, they amount to breaches of various undertakings under the Settlement Deed.
Such breaches may be relevant to a tribunal determining whether to grant the relief sought, but would not necessarily be determinative of the outcome. That can be demonstrated by a consideration of each of the provisions relied upon as a defence:
(a)Clause 5 - This is a covenant between HPPL, "the trustee" and the other parties to the Settlement Deed. The benefit of the covenant would be assignable to a new trustee on his or her appointment. Clauses 5(c) and 5(d) vary HPPL's obligations to make distributions if the beneficiaries breach provisions of the Settlement Deed.
Assuming that the institution of the proceedings amounted to a breach of the Settlement Deed, that would not bar a court or arbitrator from granting the relief sought. It would only mean that HPPL was relieved of its obligation under cl 5(a), and the trustee of its obligation under cl 5(b). | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d975b:14 | nsw_caselaw:54a636e73004de94513d975b | Q. If something had been said by the plaintiff about Aelitist being in season would you have ridden Wrangler down to the area where Aelitist was situated?
A. Absolutely not.
Q. And why not?
A. My job at Burke Stud was to handle the stallions for collection, in so doing and in many years of experience prior to that one becomes aware of what a horse is capable of from a physical and emotional standpoint when it becomes aroused, it's dangerous and under the best of circumstances is hazardous and you just simply wouldn't do it." (T 350)
66In cross-examination, the defendant denied being told, in either conversation:
"Q. Can I suggest to you that a conversation occurred during one of these daily conversations between you and Lorna Watson do you agree with that?
A. Quite likely yes.
Q. And can I suggest to you that at the same time she told you that Aelitist was in season, that happened didn't it?
A. No it did not.
Q. And can I suggest to you, you said to here "that's fine", do you agree with that?
A. No." (T 387)
67This was put to the defendant a second time:
"Q. I want to suggest to you that not only did Lorna tell you over the telephone some days beforehand that she'd put the horses in there and Aelitist was in season, but she also told you on that very day just as you were about to set off riding, that's right isn't it?
A. No it isn't." (T 393)
68Mr Jones went on to ask:
"Q. Just before you set out did you have a conversation in which she reminded you that the two mares were there?
A. No.
Q. Yes or no, okay?
A. I was feeding them, why would she remind me of that?
Q. Well she also said to you not to forget that Aelitist was in season?
A. No, absolutely not.
Q. And can I suggest to you that she said the mares could always go in the spare paddock before we go up, if you like. That's what she said to you wasn't it?
A. No.
Q. And you said "No it'll be fine" didn't you?
A. No I did not." (T 393)
69The defendant said that it should have been obvious to the plaintiff, if she knew, as it was obviously potentially dangerous:
"Q. That's something she should have told you at the time?
A. If she knew.
Q. Yes?
A. Sure.
Q. Because it was something - I withdraw that. It should have been obvious to her that if you were to go through that paddock to get to the arena it may well have been dangerous if you were on Wrangler and one of the mares was in season?
A. So what's the question?
Q. That's because it should have been obvious to her that if you were to go through that paddock with one of the mares in season it may well be dangerous?
A. I think that was obvious to everyone.
Q. Even someone with a lot less knowledge and experience than Lorna?
A. I would say yes.
Q. Well can I suggest to you that the communication one of those mares was in season was indeed so obvious that she told you, do you agree with that?
A. No." (T 395)
70In order to feed the horses, the defendant drove to her property very early in the morning before starting work and again in the evening after finishing. He would wheel the food (which the plaintiff had left out for him) along the track to the feed bins along the trail road, dump the food in and then leave immediately to return to the stud where he lived.
He said that unless the horse showed its rear to him, he could not have observed "winking", and that horses did come to the food trough as he approached, but less than 50% of the time.
The circumstances leading to the accident
71On the day in question, the plaintiff and defendant made preparations for their usual ride. The defendant was adamant, both in examination in chief (T 350) and cross-examination, that the plaintiff said nothing about Aletist in season. He said if he had known Aletist was in season, he would "absolutely not" (T 350) have ridden Wrangler to the area where Aletist was situated. | [
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] | What would the defendant have done if he had known that Aelitist was in season, according to his testimony in Watson v Meyer [2012] NSWDC 36? | [
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nsw_caselaw:54a636e73004de94513d975b:34 | nsw_caselaw:54a636e73004de94513d975b | 184Mr Sanna's evidence at T 143-144 concerning Wrangler's feeding regime was as follows:
"Q. So in your comments about the manner in which - sorry, I withdraw that.
In relation to the feeding regime of Wrangler, if I was to say to you that Wrangler for a period of one month before the incident was on 200 grams of what could be described as sweet feed which is molasses, lupins, sunflower, corn and soya, that wouldn't, 200 grams per day is not a large amount of corn so to speak, or sweet feed?
A. 200 grams is not excessive.
Q. It's not excessive?
A. No.
Q. It would not give rise to any heightened behaviour on behalf of the horse, the stallion?
A. It depends on the horse and it depends on the work. If a horse has a propensity to get a bit excitable then the work-to-feed ratio is relevant. If you are asking me is 200 grams is an excessive amount of feed, no I don't think it's an excessive amount of feed."
185The defendant's evidence was that the horse Wrangler had been on a high protein diet for months. The defendant said at T 399-400:
"Q. You had fed Wrangler grain in the lead up to this event, hadn't you?
A. I fed Wrangler a high protein diet.
Q. That was to get him more energy, wasn't it?
A. To give him more energy and to build his muscle.
Q. That would tend to make him more frisky, wouldn't it?
A. I think the term you're looking for is "hot"
Q. More hot?
A. It can do with some horses.
Q. That would make him harder to control, would it not, when you were riding him?
A. For a period of time, maybe.
Q. Particularly if he hadn't been ridden that much?
A. True.
Q. You hadn't ridden him that much, had you?
A. I hadn't ridden him for a week.
Q. Feeding somebody - a horse a high protein diet and not having exercised him for a week may suggest that there may be some difficulties with him becoming "hot" and having more energy due to the high protein diet, that's right, isn't it?
A. He's been on a high protein diet for months.
HER HONOUR
Q. How many months?
A. Since before the national finals, so it would have been around February.
Q. That would be most of the time he was there, wouldn't it?
A. That's correct.
JONES
Q. And most of that time he hadn't been ridden regularly?
A. No, that's not correct.
Q. He'd been ridden at the most, generally, once a week?
A. That's - that's - with regard to frequency; I would ride for hours at a time."
186Mr Sanna said (T 144) that questions of management of the horse by an experienced person such as the defendant would largely be a matter for that person to make informed decisions about. The expert evidence does not go so far as to say Wrangler was "fresh" or "pepped up" by reason of diet or lack of exercise.
187The defendant said that he rode Wrangler at every opportunity. There was no evidence that Wrangler needed exercise or was restive due to lack of exercise.
188This particular of negligence is not made out.
(e) Instructing the plaintiff "don't let him get past" after Wrangler had thrown him to the ground when it was not safe for the plaintiff to get near to Wrangler.
189According to the answers to particulars, the plaintiff relies upon the statement by the defendant that he should "don't let him get past" meaning Wrangler, which had just thrown the defendant to the ground, when it was not safe for the plaintiff to go near to Wrangler.
This particular of negligence is independent of whether or not the defendant knew Aletist was in season and relates to his response to the danger.
190The plaintiff's evidence on this was as follows:
"Q. So the horse dips near the second little tree and Mr Meyer is thrown off, all right?
A. That's right.
Q. You are about ten or fifteen metres back?
A. That's right.
Q. You are witnessing all this, did Mr Meyer get up?
A. He began to get up and as he started to get up he shouted to me, "Don't let him get past".
Q. And what was Wrangler doing at this stage?
A. Wrangler, I'm not sure the horse eventually spun around because he realised I guess that Alan wasn't on him any more and the horse spun around and was charging back. | [
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nsw_caselaw:54a636e73004de94513d975b:50 | nsw_caselaw:54a636e73004de94513d975b | 254The plaintiff was wholly responsible for the decision to put the two mares in the arena paddock in which she and the defendant had been regularly riding for the past eight months. She was the owner of the property, she was responsible for the transfer of these mares, which were her property, and she formed the decision to put them in this paddock without consulting the defendant.
255The defendant was absent from the property and would have had no way of knowing that either of the horses was in season unless he was told by the plaintiff.
Being told seven days beforehand that a horse was in season would not, as I have already found, have been enough to put him on notice, in relation to his Saturday ride with the plaintiff, that there was a horse in season in the paddock in which the parties regularly rode, if the plaintiff started saddling up for the ride without mentioning the matter.
The question is whether or not the plaintiff reminded the defendant on the day of the accident that the paddock in which they usually took their rides was not available because she had put a horse in season into that paddock.
256I have indicated I do not accept the plaintiff's evidence that she did have such a conversation.
If she did not tell the defendant (and I note again that this is a case of actual knowledge being pleaded, not constructive knowledge of the potential for danger) then this was negligence to the standard considered by the court to be appropriate for a finding of 100% contributory negligence as authorised by s 5S Civil Liability Act 2002 (NSW).
This is negligence at the same standard as the conduct of the plaintiff in Wynbergen v Hoyts Corp Pty Ltd (1997) 149 ALR 25 and in Adams by her next friend O'Grady v State of New South Wales [2008] NSWSC 1257 where Rothman J explained at [132]:
"[132] The relative culpability of the State of New South Wales and Ms Adams, on the above analysis, would result in Ms Adams' contributory negligence being 100% of the damage caused. Section 9 of the Law Reform (Miscellaneous Provisions) Act 1965 provides that contributory negligence does not defeat the claim for damage.
However, ss 5R and 5S of the Civil Liability Act, require the Court to apply the same principles in determining contributory negligence, as are applied in determining the claim for negligence. In that respect, the standard of care in contributory negligence is that of a reasonable person in the position of that person.
I take that to include the diminished responsibility of Ms Adams. Further s 5S of the Civil Liability Act reinstates the outcome that contributory negligence can be assessed at 100% of the damage. This is not a reinstatement of the historical position that contributory negligence was a complete defence.
Historically, minimal contributory negligence would be a complete defence to an action in negligence. This simply clarifies that in assessing relative culpability and respective share in the responsibility, the Court is entitled to come to a view that the contributory negligence should be assessed at 100% of the cause of the injury."
257If I have erred in accepting the evidence of the defendant as to the conversation on the day in question, the plaintiff still failed to take due care for her own safety by creating the danger in the first place, in that she put two mares, one of whom she knew to be in season, in the paddock which she knew was used for weekly rides by herself and the defendant.
Had she put these two mares into another paddock, the likelihood of the accident occurring would be non-existent.
There was no reason for these horses to be in this particular paddock, and it would have been a straightforward matter for the plaintiff to put them in another paddock; the plaintiff said that she suggested to the defendant, on the morning in question, that these two horses could have been easily moved to another paddock. | [
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] | What is the standard of care in contributory negligence under the Civil Liability Act 2002 (NSW)? | [
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nsw_caselaw:54a636e73004de94513d975b:23 | nsw_caselaw:54a636e73004de94513d975b | A. I just don't quite understand. He just simply told me that the horse had attacked Lorna or had become aggressive and injured Lorna and then that he'd had the horse but down, other than that I didn't ask him any questions about whether he thought it was a wise thing to do or not, I just accepted it, that it was after the fact and there was no point in trying to change anything." (T 422-423)
120As is noted elsewhere, the Braidwood incident was the one upon which Mr Sanna based his opinion, in that he uncritically accepted the account of events given by the plaintiff, namely that of a rider put in danger by reason of one horse trying to mount another without inquiry as to whether the horse was sexually excited or whether there was another explanation for these events.
Mr Sanna's revision of this evidence in the witness box at T 152 was significant.
Conclusions concerning the Braidwood incident
121Ms Fenner is the defendant's former wife. Caution should be exercised when considering issues of credibility of a witness, but Ms Fenner's hostility towards her former husband was very evident.
She was dismissive of his claim that he had trained three international champions (T 299) and referred a number of times to Wrangler as having insufficient training (for example T 302-303 and 313) and as having caused her concern in relation to each of the three incidents, in dramatic terms (for example "very dangerous, quite frightening" at T 297).
122Ms Fenner suffered no injury beyond a bruised knee which does not appear to have prevented her carrying out her activities on the day in question. Mr Boileau, who was also present, did not even know about this incident.
123All of this suggests an incident of minor proportions. I also note the concessions of Mr Sanna in cross-examination, in which he revised the opinions he expressed in his report.
124Taking all of the above into account, I am satisfied that this was not evidence of Wrangler behaving dangerously, but the horse rearing simply because another horse had come too close. It is not evidence of Wrangler's bad disposition.
(ii) The paddock escape incident in 2007
125Ms Fenner described this event as follows:
"A.
Alan and I came in, in the car, initially he decided he might try and sort of round him up in the car, which obviously wasn't going to work we realised that very quickly, and we got out of the car and he was trying to catch him,
but Wrangler was very excited and it was really a very dangerous quite frightening situation because the stallion was galloping the fence line and he wouldn't be caught and he - we did eventually catch him but it took quite some time, I was quite nervous.
" (T 297)
126The particulars relied upon by the plaintiff were read by Mr Wilson for the defendant to Mr Sanna in cross-examination, and Mr Sanna's response is of relevance, given the defendant's admission that his failure to lock the gate was the reason Wrangler had got out:
"Q. The second incident that you have been provided information about and I will read from the letter of instruction.
"In about 2007 Wrangler got out of his paddock and got into a paddock close to two mares. Wrangler was charging around and was very excited and agitated. The defendant had great difficulty restraining the horse and requested assisted from another person who was present."
I think you evidence is that that really didn't cause you any real concern or the facts didn't form any basis for your opinion that Wrangler was unruly or of an unruly disposition?
A. No I agree with that, that's what you would expect with any stallion. The only thing is it depends on how he got out of the paddock. If someone left the gate open or did he clamber through a decent well built fence to try and get to the mares? That's more the issue. | [
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] | What was the outcome of the Braidwood incident, according to the Court's conclusions? | [
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nsw_caselaw:54a636e73004de94513d975b:20 | nsw_caselaw:54a636e73004de94513d975b | It is up to the rider or handler of the stallion to look for possible problems or conflicts that could arise (Exhibit 2, paragraph 15) and this is what the defendant did on the brumby hunt.
Conclusions concerning the conversations alleged by the plaintiff
103I am satisfied that the plaintiff did not appreciate the dangers of a stallion being ridden into a field where a mare in season was to be found, and that the conversation she alleges took place on the day of the accident never occurred at all.
I am similarly satisfied that any conversation the plaintiff had with the defendant about seven days beforehand, on the day she brought Aletist home from agistment, did not include any reference to Aletist being in season, either because the plaintiff did not notice that Aletist was in season, or because she did not appreciate its significance.
Taking all of the above into account, the plaintiff has not proved, on the balance of probabilities, that either of the conversations she deposed to took place.
104There are additional problems. The conversation on the day of the horses being brought back to the property seven days before the accident would not amount to an appropriate provision of information about riding dangers a week later to the defendant, who was living away from the property and who had returned, it would appear, only on the day of the accident.
The crucial conversation is the conversation which took place at about 2.
30pm on 5 October 2009, which occurred when the defendant was already on his horse heading out of the stable and the plaintiff was getting stirrups and girth organised (Exhibit J, page 1).
The plaintiff and defendant had already decided to go for a ride and were on their way. This is not a conversation of reliance; it is a discussion between two experienced horse riders of a very brief nature, which is relevant to the issue of both volenti and obvious risk.
105However, if the defendant had knowledge of prior bad disposition of the horse Wrangler, and of the horse's tendency to become excited in the presence of other horses, whether mares or not, that would be a different basis upon which negligence could be asserted, and it is to this evidence that I now turn.
106None of these incidents involved a horse in season. A finding of the horse having a bad disposition is evidence I could accept independent of any finding as to whether or not the defendant knew that the horse Aletist was in season.
Evidence in relation to the prior bad disposition of the horse Wrangler
107It was the addition of particular 10(i) to the Amended Statement of Claim, concerning the alleged known propensity of Wrangler to become excited or agitated in the presence of other horses which led to the adjournment of the proceedings before Elkaim DCJ on 1 June 2011.
108The plaintiff, in the opening to these proceedings, identified three examples as follows:
"Now if I could just stop there because your Honour will also hear some evidence that there'd been problems with this stallion Wrangler in the past. Particularly in the presence of other horses and particularly mares.
Your Honour will hear evidence that at one stage whilst the defendant was riding Wrangler with another person who was riding a mare Wrangler had, whilst the other rider was still on the mare, attempted to mount the mare and that is particularly dangerous.
Such that Mr Sanna says that if that had been known Wrangler would have been banned from any competition because of the dangerousness demonstrated by that action. It would be classified as a dangerous horse.
Furthermore, in the past Wrangler had escaped from its paddock and this is before the defendant knew the plaintiff in order to try and gain access to a paddock in which there were some mares and Wrangler had, as it were, gone quite berserk charging up and down the fence trying to get into the paddock where the mares were. | [
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] | What did the Court decide regarding the conversations alleged by the plaintiff in Watson v Meyer [2012] NSWDC 36? | [
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nsw_caselaw:54a636e73004de94513d975b:37 | nsw_caselaw:54a636e73004de94513d975b | A. If the horses have a history of interacting well, stallions normally can differentiate a mare from a gelding and they're much comfortable, they're much less likely to get excitable about a gelding being near them, then I don't disagree with what you are saying.
Provided it is not on the move, you know, if it's stationary and you can get a hold of it for a moment, then the rider can jump up and grab it, then I think it's probably quite appropriate. If the thing's already on the move and got, it's sort of got a clear direction and he's sort of on the run, then I think it would be, it would be dangerous to try and attempt that manoeuvre.
Q. But in that momentary situation whereby you've been thrown from this stallion, the horse is standing there and there's that other person with the experience I outlined, on a horse such as Freckles, before the horse started to move, in other words before the stallion started to move, it was a reasonable reaction to attempt to restrain the stallion?
A. Yes I wouldn't disagree with that.
Q. You would not disagree?
A. No.
Q. And for you to say something like "hold him" or something like that, to that person who's on that gelding such as Freckles, in that split second when he's stationary, would be a reasonable thing in your view?
A. If they were close. If they, you know, I think if they were right here then yes I think that would be a reasonable thing to do. As I say, if there was any distance and they have to gallop up to the horse or if the horse had turned around started to gallop, then to try and grab a hold of it then would be, would be a very different proposition I think."
195The events in question occurred within seconds. The defendant denies that he said "don't let him get past", and says he said "hold him", but they amount to much the same thing. The difficulty is that, whatever the plaintiff did, she did not have time to react, and her horse in fact barely moved. Wrangler was already on the way, as the expert evidence makes clear.
196Mr Sanna in his report of 6 December 2010 comments that the events which led to the plaintiff's injuries were
"really a random series of actions resulting from the defendant losing control of his horse, as he was trying to extricate himself and the horse from a situation he had come to realise was very dangerous. Unfortunately the horse had become over excited at being confronted (albeit on the other side of a very flimsy wire fence) by a couple of mares, one of which at least was posturing towards him.
The defendant's fall from the horse, the resulting attack on the plaintiff by the now loose and excited stallion were all foreseeable if unfortunate consequences of the initial poor decision to take the stallion into that situation." (report 6 December 2010, Exhibit H)
197Mr Sanna concludes that whether the plaintiff responded to an instruction to block the stallion or was "merely in the path between the loose stallion and the mares in the paddock" was probably irrelevant (report 29 June 2011, Exhibit H).
198In practical terms, the defendant's instruction to the plaintiff made no difference. She had no time to move out of the way and there was nothing that the defendant could do or say to help her. The accident was about to happen by reason of the fact that the plaintiff and defendant had ridden towards the paddock into which the plaintiff had put a mare in season.
199Mr Chant expressed some opinions about the defendant's course of action, in his cross-examination by counsel for the plaintiff. He is a lay person who was not present at the time.
He agreed that it was the direction that he would have been unlikely to give (T 480) but he said that if the horse was closer than 15 metres away it would be an acceptable direction to give (T 484), particularly if the person to whom the direction was given was familiar with the horse (T 485). This evidence does not take the matter much further. | [
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|
nsw_caselaw:54a636e73004de94513d975b:25 | nsw_caselaw:54a636e73004de94513d975b | 130Ms Fenner's account of this event was overly dramatic ("very dangerous", "quite frightening", "quite nervous" - T 297). The defendant said he was to blame for not locking the gate. Mr Sanna agreed at T 153 that most stallions would behave in this way. This is not an incident of significance and does not demonstrate the conduct asserted in particular (i).
(iii) The Wingadene show incident in 2007
131The third particular of prior bad behaviour by Wrangler was as follows:
"At the Wingadene show in 2007 Wrangler was misbehaving and was screaming and rearing in the presence of other horses. Wrangler was excited and agitated for most of the day and had to be restrained."
132Ms Fenner described this as follows:
"Q. In 2007 at some stage did you and Mr Meyer go to the Windradyne [sic] Show?
A. Yeah Windradyne Quarter Horse Show yes.
Q. And was Wrangler taken along?
A. Wrangler was taken along, along with the old polo pony that my son rode.
Q. Now at some stage was Wrangler secured to a trailer or horse float?
A. Yes he was.
Q. And did something happen?
A. Yes he just was very badly behaved he was raring, sort of jumping up and down and calling out all the time and just very restless and quite badly behaved.
Q. How long did that behaviour go on for?
A. The rest of the day that we were there, Alan took him in some classes and for western, the horse is supposed to be very relaxed and have its head low and Wrangler had his head quite high and he wouldn't jog and he was trotting and he was basically very excited all day long.
Q. And were there other horses in the immediate vicinity?
A. Yes, yes.
Q. Now Mr - we are told that Mr Meyer says that he settled down the horse and went on to win a medal at that show, what do you know about that?
A. I know that he did come home with a couple of ribbons from the show.
I also remember that he didn't actually beat any other horses, if you - I remember one of the classes there was three horses in hit and he got a third, and he went in a couple of other classes, but I don't remember him actually beating another horse and I don't know what the medal is about, I don't think any medals were awarded at the show." (T 297-298)
133Mr Sanna's evidence was as follows:
"Q. The third incident that you were provided with was at the Wingadene(?) show in 2007. Wrangler was misbehaving. Was screaming and rearing in the presence of other horses. Wrangler was excited and agitated for most of the day and had to be restrained. Did you place much emphasis on that as a basis for any opinion?
A. Only to form a view that it's not a dobbin. You know like with a dobbin, in the industry something that's really quiet. I mean he's obviously, he has a propensity to get excited and in certain situations he appears not to be very quiet and very amenable in certain situations and I can see in certain situations, as from the photograph with the ..(not transcribable).. on him he's very, very quiet.
Q. Yes.
If the facts in that situation were just briefly that Wrangler didn't want to be tied to the trailer as everyone passed by,
walked past that particular trailer and he demonstrated this by calling and frolicking though he was a nuisance he didn't interrupt the show or break away or run amok as some horses tend to do and also Mr Meyer saddled him and rode him in open company in the warm up arena thereafter until it was time for him to show.
The first event for him was the stallion class and he did very well. Then later in that day he was again ridden in open and mixed company, in other classes, to demonstrate his ability to perform under saddle. He was well placed in these particular events.
This was a sanctioned show and if the judges had deemed him to be a danger or disruptive he would've been expelled. So does that set of circumstances change your view about the manner in which Wrangler behaved on that occasion?
A. I think it's normal. They get excited. They're put in a particular place. They don't particularly want to be there. They get excited. They scream and holler and maybe kick out at anything that comes past. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d975b:53 | nsw_caselaw:54a636e73004de94513d975b | 5 x 64 x 938,2) $187,640.00
(c) Future Paid Property Management Assistance: Horse feeding $50 pw (T 74 line 20); Gardening $90 per mth (T 73 line 32); Clearing & Maintenance $175 per qtr (T 74 line 4; M Ellis p3.8) (86 x 938.
2) $80,685.00
Economic Loss:(a) Past (agreed)(b) Interest (agreed)($35,000 x 0.7 x 2.1 x 0.05)(c) Superannuation Loss (agreed)($35,000 x 0.
11)(d) Future Economic Loss(Cushion) $35,000.00$2,573.00$3,850.00$150,000.00
$191,423.00
TOTAL
$801,
177.
29
Non-economic loss
266The plaintiff submits that the percentage of a most extreme case pursuant to s 16 Civil Liability Act 2002 (NSW) is 38% while the defendant submits it is between 30% and 32%. In my view, having regard to the seriousness of the plaintiff's injuries, 38% would be appropriate.
Past and future out-of-pocket expenses
267Past out-of-pocket expenses of $37,606.29 are agreed.
268The defendant submits that the claim for future out-of-pocket expenses is excessive in that the plaintiff does not have the need to attend her general practitioner or orthopaedic surgeon as often as claimed. This is particularly the case as the possibility of an arthroscopy and knee replacement is only expressed by Dr Ryan to be a possibility in that the plaintiff "may" require such treatment.
However, the possibility of a knee replacement given the degree of the plaintiff's injury does seem more likely than not and it is accordingly appropriate to make the kind of allowance that has been made by the plaintiff in the damages schedule.
269I note the opinion of Dr Ryan about a mobilisation program. While the amount claimed seems high, it is appropriate to allow for costs of the kind outlined by Dr Ryan and I would allow this item.
270In relation to hydrotherapy, the benefits of this form of exercise for injuries of this kind is commonly observed in claims for damages. The claim is modest in compass ($1,624.00). I would allow the amount.
Past and future home care and domestic assistance
271The claim for past home care and domestic assistance is not disputed by the defendant.
272The claim for future paid property management assistance, feeding horses and looking after the farm is asserted not to be commercial assistance and therefore not claimable. I do not accept this submission. These are tasks which are beyond the plaintiff to perform and it is appropriate that these kinds of job should be performed by someone who is paid to do them.
Past and future economic loss
273Past economic loss is agreed. A claim of $150,000.00 as a cushion for future economic loss is claimed.
274In this regard, I do accept the submissions of the defendant. This is a very substantial sum to be claimed as a cushion in circumstances where the plaintiff has not only returned to work at her former employment, but has also managed to continue her second job of working at Horselands.
275The plaintiff is working in a managerial role in secure government employment, in a situation where she can manage her work hours. She has sufficiently recovered to participate in her second job. | [
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|
nsw_caselaw:54a636e73004de94513d975b:46 | nsw_caselaw:54a636e73004de94513d975b | The plaintiff submits that there is "simply no evidence" (written submissions, paragraph 206) capable of satisfying the court if I accept that the plaintiff had been assured by the defendant that despite the risk it would be "fine" (T 27) for them to ride into a paddock notwithstanding the fact that the defendant was riding a stallion and one of the mares was known by him to be in season.
235The test has been more recently considered by the New South Wales Court of Appeal. In Canterbury Municipal Council v Taylor [2002] NSWCA 24 Ipp AJA said at [145]-[147]:
"[145] As Burt CJ said in Jeffries v Fisher (at 253):
"Of course in many cases that appreciation and acceptance [of the risk] can readily be inferred from knowledge, but the point to be made is that knowledge alone is insufficient ..."
[146] It does not follow merely from the fact that the respondent appreciated or should have appreciated the dangers of simultaneous dual use that he believed that the touch football players would carelessly walk into the cyclists' path.
He may well have believed that the footballers were quite capable of acting without negligence and would play their game in safety. These issues were not properly investigated at the trial. What evidence there was on this issue tends to support a finding that the respondent did not expect that the risk would materialise.
[147] A belief that the dangers (of which the respondent had full appreciation) would not materialise, would negative the proposition that he accepted those dangers: cf O'Shea v The Permanent Trustee Co of New South Wales Ltd (1971) Qld R1;
Suncorp Insurance and Finance v Blakeney; State Government Insurance Co v Hitchcock (unreported, Full Court, Supreme Court of Western Australia, delivered 11 March 1997).
"
236Counsel for the defendant points out that McClellan CJ at CL in Carey v Lake Macquarie City Council at [83]-[84] noted that this passage was open to misinterpretation:
"[83] This passage is open to misinterpretation. In a recent article ("Personal responsibility and the 'new' volenti" (2005) 13 Tort L Rev 76), Associate Professor Lunney refers to Canterbury Municipal Council and says (at 86):
In this case, Ipp AJA held that a belief by the plaintiff that the dangers would not materialise would negative the proposition that the dangers had been accepted. Taken literally, this would require the plaintiff to expect injury as a result of the conduct.
It is difficult to imagine any plaintiff testifying that they expected to be injured as a result of his conduct. Rather, the question is whether the plaintiff accepted the risk of injury.
[84] Lunney's conclusion is correct but his analysis of Canterbury Municipal Council may not be.
There is a very real difference between the proposition (which Ipp AJA advanced) that a belief that a risk will not materialise will negative consent to the risk, and the proposition (which Lunney attributes to his Honour) that consent can only be inferred where the plaintiff believed that a risk would materialise.
All that must be proved is that the plaintiff voluntarily accepted a chance that a perceived and fully appreciated risk would materialise. A genuine belief that the risk would not materialise will negative the defence, but a positive belief that the risk would materialise is not required to make the defence out."
237In other words, even if a plaintiff perceived and full appreciated the risk, the defence cannot be made out unless the plaintiff had "a genuine belief that the risk would not materialise" (at [82]).
McClellan CJ at CL referred to the failure of a defence of volenti in Suncorp Insurance & Finance v Blakeney (1993) 18 MVR 361 where a passenger who got into a car with a driver that the plaintiff knew to be a drunk had not voluntarily assumed a risk because the plaintiff had thought, notwithstanding the driver being drunk, that he still "seemed alright". | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d975b:8 | nsw_caselaw:54a636e73004de94513d975b | A. Yes.
Q. You were aware of that?
A. Well, and that's why I had advised Allan where I had put the horses and noted to him that they were the farthest away from his stallion and up the back of the property.
Q. When you went riding with Mr Meyer that day it was your plan to go down, that was your intention to go down into the paddock which was where the arena was located, is that right?
A. We were both going there.
Q. And you're aware at that time that it wasn't advisable to go into a paddock where there was a mare on season?
A. Are you talking - sorry I don't understand the question.
Q. Well as at 5 October 2009 when you were injured, were you aware of the dangers associated with taking a stallion into a paddock where there was a mare which was in season?
A. No.
Q. You weren't aware of that at all?
A. On that day when I advised Allan again that the mare was in season, yes I did have some concern in relation to the behaviour of his stallion which is why I reminded him and asked him if his horse was going to be okay. I have not experience in terms of people riding with stallions in paddocks with mares in season.
Q. See Ms Watson, you never told Mr Meyer either on the telephone or even before the ride, that Aletist was in season?
A. I absolutely told him on each occasion.
Q. Are you suggesting the reason you told him was that you were aware of the dangers associated with riding a stallion into a paddock or even in the vicinity of a mare?
A. I told him because his - sorry his horse is a stallion, the mares were up there and I'm reminding him this is where we're going is your horse going to be okay, because I didn't know how his horse would respond, hence my question to him in terms of will he be okay." (T 185-186)
31The plaintiff repeated (T 187 line 14) that she was not aware of there being any danger. She said the second conversation was simply "a courtesy" to him in case he had forgotten what she said in the phone call some seven days earlier (T 187).
32In cross-examination it was put to the plaintiff (T 188-189) that she had not told the defendant that Aletist was in season. She denied this.
33As the plaintiff and defendant set out on 5 October, she said the defendant told her Wrangler was "a bit fresh" because he had been given "a fair bit of grain" and not much exercise (T 229).
The circumstances of the accident
34The plaintiff described the accident as follows. The plaintiff and defendant proceeded from the stable where they had saddled the horses and began to ride their horses up the track. They were heading towards the arena paddock. The plaintiff said that Wrangler appeared fresh, and was zigzagging.
35The plaintiff and defendant reached the paddock previously occupied by Freckles. This paddock was empty of horses on the day (T 30). The defendant was a short distance ahead (about 10-15 metres) and they were riding towards the end of the track where the arena was. Before that, it was necessary to go through the gated or cordoned-off area of the paddock occupied by Aletist and Butterfly.
36When they were approximately 20-25 metres from the gate, Aletist and Butterfly could be seen. The plaintiff said that Aletist was facing backwards and it was obvious from her rear end that she was "winking". The defendant denied this.
37Wrangler began to play up (T 40-41) by tossing his head, dipping his head down and beginning to prance. The defendant was gripping the reins and would go forward with the movement of the horse. The horse then began screaming. The plaintiff said "I think we better go back", to which the defendant agreed, saying he was already trying to get the horse away from the fence.
The plaintiff turned her horse around and began to walk very slowly back towards the home. She was looking back to see how the defendant was going on his horse and observed that the horse was moving sideways. He was at about a 45-degree angle to the right hand side fence line, which was the electrified fence line. | [
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] | null |
|
nsw_caselaw:54a636e73004de94513d975b:39 | nsw_caselaw:54a636e73004de94513d975b | Even if the defendant had known that Aletist was in season, the speed with which Wrangler reacted and, as a powerful stallion, escaped the control of the defendant by throwing him and charging towards the plaintiff, was such that the accident was, as both experts point out, inevitable.
There is no evidence, expert or otherwise, to support the contention that the defendant could have directed the plaintiff to go to a safe area.
The provisions of s 5H are also of relevance; as soon as Wrangler became excited, the plaintiff, an experienced horsewoman, should have known of the danger and not require warning by the defendant. In relation to leaving the plaintiff on the ground, the defendant had no alternative as he had to call an ambulance.
211Further, the parties should be held to the case that they plead and particularise, and if the case as particularised in relation to particular (h) is "not directing her to go to a safe area" it is not appropriate for me to speculate as to what other material may be derived from the evidence in support of this particular.
I note that the plaintiff's written submissions do not identify specific matters going to this particular of negligence.
(i) Approaching, or continuing to approach, Aletist, knowing that Wrangler had previously become excited/agitated in the presence of other horses and in particular mares.
212The evidence relied upon according to the particulars provided by the plaintiff are the three prior incidents in 2006 - 2007 where Wrangler is asserted to have behaved in a manner indicating he became excited or agitated in the presence of other horses. As set out at [107] - [112], I have not accepted this evidence.
213There is no evidence that the plaintiff and defendant continued to approach Aletist after Wrangler began to become excited or agitated. The evidence is that as soon as this occurred, the defendant attempted to get him under control and to turn him around.
214As I have rejected the evidence of the prior three occasions in relation to Wrangler, and I am satisfied that the plaintiff and defendant did not continue to approach Aletist after Wrangler began to become excited or agitated, the plaintiff has failed to make out evidence to support this particular.
215The plaintiff has failed in relation to the findings of fact that I have made in relation to each of the particulars of negligence (a) - (i). However, in relation to each of the particulars of negligence, the defendant additionally relies upon defences under the Civil Liability Act 2002 (NSW).
Both the issue of liability for harm from obvious risks of dangerous recreational activities (s 5L) and voluntary assumption of risk (ss 5F and 5G) may apply to certain of the particulars whether or not the plaintiff and defendant had the conversations deposed to by the plaintiff about Aletist being in season.
The relationship between the plaintiff and defendant is, I have found, a relationship of persons who were living in some form of de facto relationship, not teacher/pupil, or occupier/licensee. They were both horse lovers and, while the defendant was more experienced than the plaintiff, the plaintiff still had considerable knowledge.
In particular, both plaintiff and defendant were engaging in a recreational activity, horse riding, which was dangerous, and the question of whether or not both knew of the danger is relevant to the defence of volenti. It is to a consideration of these defences that I now turn.
Liability for harm from obvious risks of dangerous recreational activities
216Section 5L Civil Liability Act 2002 (NSW) provides:
"5L No liability for harm suffered from obvious risks of dangerous recreational activities
(1) A person ("the defendant") is not liable in negligence for harm suffered by another person ("the plaintiff") as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff.
(2) This section applies whether or not the plaintiff was aware of the risk."
217Section 5F defines "obvious risk" as follows:
"5F Meaning of "obvious risk" | [
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|
nsw_caselaw:54a636e73004de94513d975b:33 | nsw_caselaw:54a636e73004de94513d975b | 171This particular of negligence is therefore based upon the knowledge of the defendant that Aletist was in season, or could be in season, and that there was a foreseeable risk that Wrangler would become excited.
172Mr Sanna told the court that stallions were so potentially dangerous that they are required to wear green discs at shows and events so that persons could identify them (T 154 line 15) and that children are not allowed to ride stallions because of their dangerous propensities (T 148).
However, this only relates to competitions, not to private riding activities, as Mr Sanna noted in his comments about the photograph of Ms Fenner's nephew seated on Wrangler (T 148-149). What Mr Sanna had to say about that was as follows:
"Q. In a situation such as this, in a controlled environment, on a private property with a horse which is familiar with the operator being Mr Meyer there's nothing wrong with that is it under those circumstances?
A. Doesn't look like it there looking at those photos."
173Mr Lawson, in his report (Exhibit 2), states that when working with a stallion the rider/handler is always looking for possible problems or conflicts that could arise. However, Mr Lawson said it would be unreasonable simply because Wrangler was a stallion that he should be closeted away and never permitted to interact with other horses.
174As I have found that the defendant did not know that Aletist was in season, and as there was no additional reason for the plaintiff not to ride her horse in the vicinity of Wrangler, this particular of negligence is not made out.
(c) Allowing his horse Wrangler to be close to the horse Aletist when he knew that Aletist was in season.
175The particulars (Exhibit 3) state that the defendant knew that the horse Aletist was in season because the plaintiff told him before they commenced their ride.
176For the plaintiff to succeed on this particular, she must prove that the defendant knew that Aletist was in season and/or that he knew of Wrangler's prior history of becoming excited or agitated in the presence of other horses and in particular mares.
177I am satisfied that the defendant did not know that Aletist was in season, although the plaintiff did. In addition, I have found that there is no evidence of Wrangler having the prior history of becoming excited or agitated in the presence of other horses, especially mares.
178The defendant also draws to my attention that in the particulars for paragraph (c) there is no reference to the plaintiff informing the defendant in a telephone conversation the week before. This is a minor point, as I am satisfied that the plaintiff did not inform the defendant that Aletist was in season.
179It was the plaintiff, not the defendant, who placed the two mares in the paddock where she and the defendant took their weekly rides. The plaintiff, and not the defendant, had the responsibility for the care, control and management of the property and the horses on it.
180In addition, the defendant did not allow his horse to "be close" to Aletist at the first sign of trouble. He endeavoured to control his horse and to return the stable.
181As is set out elsewhere, there is no evidence that his decision to turn around and return to this stable was made too late, or in circumstances where he allowed the horse to become too close. This particular of negligence accordingly fails.
182The plaintiff has not made out evidence capable of supporting this particular.
(d) Allowing the plaintiff and her horse to ride together with Wrangler when he knew or should have known that Wrangler was "fresh" and had been fed grain recently so that Wrangler was "pepped up".
183The particulars provided refer to a statement to this effect by the defendant to the plaintiff. It is based on the claim that Wrangler had not been having enough exercise, as well as to the claim that the horse was "pepped up" by reason of his grain-feeding regime. It is a particular of negligence capable of being relied upon whether the defendant knew Aletist was in season or not. | [
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|
nsw_caselaw:54a636e73004de94513d975b:4 | nsw_caselaw:54a636e73004de94513d975b | And he was quite a spirited and afraid horse and I had contacted the proprietor of the steel company that had done the modification on the float and I'd asked him or he'd recommended to me Allan again as a horse expert and at
that particular time when I spoke to the proprietor he had been or was having one of his horses trained by Allan and he spoke very highly of the work that Allan had done with the horse and that's how I came to be put on to Allan.
" (T 14-15)
14The plaintiff described her own horse knowledge and background at the time she met the defendant:
"Q. What happened after your discussion?
A. I told him what my background and experience was and I said to him I'm an English rider. I had dressage lessons when I was a much younger person. A couple of years ago I purchased an old quarter horse gelding who was an old rodeo horse and that horse was teaching me. I don't know what I'm doing.
I don't know much about how to ride a western horse and the horse that I was hoping he would help me with was a young - and I was saying this,
was a young quarter horse gelding who had had some reining training prior to me purchasing him and I explained that to me the horse was quite afraid and quite fast and had training in working at speed and being manoeuvrable and during the conversation just prior to that I'd asked
Allan when he had explained what the John Lyons Select Training was I'd asked him what sort of training do you do and he told me that he could train anything and that he'd trained national champions and he was a reining trainer and he'd also trained police horses in the states.
" (T 16)
15The plaintiff compared her knowledge to the defendant's knowledge of horses as follows:
"Q. How would you compare your knowledge of horses with Mr Meyer's knowledge?
A. Very little. He was highly experienced from what I could see. He was successful with the time that he worked on that horse. The more I saw of what he was doing with the horse the more I realised I didn't know." (T 17)
16Counsel for the plaintiff, Mr Jones, indicated (T 17) that although there was no payment of money for these training activities, there would be evidence about reliance upon the defendant's expertise (T 17 line 27; T 18 lines 5-7). She said that the defendant gave her lessons (T 19-21).
17The plaintiff commenced to have a personal relationship with the defendant, and in December 2008, approximately eight months before the events the subject of this litigation, he moved into her property.
18The plaintiff painted a picture of the defendant as essentially remaining at home and performing the farm duties, as well as going for lengthy rides on his horse (T 19), while she worked full time. In fact the defendant worked even longer hours (see [24] below).
19The evidence of the extent of the plaintiff's expertise was the subject of challenge in cross-examination.
Although the plaintiff had painted a picture of the lessons she received from the defendant as being beginner's lessons, she had been riding, including riding in competitions, since about the age of 12 (T 83), winning ribbons in gymkhanas. She competed in events called "barrel racing" around New South Wales (T 85-86).
She worked as a trail guide, supervising groups of people on horsebacks (T 243) for inexperienced rider on country riding holidays. She refused to describe herself as an experienced rider (T 86), although she had a part time job at "Horselands" (T 86), a shop which supplied horse care products, and had bought the property in 2005 so that she could stable all her horses.
Those horses included a stallion which she bred with a mare, although she said that she was unsuccessful, as this stallion was injured in the process (T 87-88).
20The plaintiff described (T 16) how the defendant trained her horse. She did not pay him for this (T 17 line 13). She said that after the defendant moved in "I had asked him if he would give me lessons" (T 19) on Freckles in western riding. | [
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