Angius v Salier & Ors

Supreme Court of NSW|2019-02-19|Before: Henry J, Albert Salier AM

Background

In order to understand the Court's decision it is necessary to set out in some detail the background to these proceedings, including the history of other proceedings involving Mr Angius, the deceased and members of their family, proceedings involving Mr Salier, and earlier orders of this Court.
Mr Angius is a self-funded retiree of around 82 years of age. He and the deceased were married for approximately 55 years at the time of her death and had two children, Robert Angius and Gianna Angius (Jenny Angius).
As at January 2008, Mr Angius was registered as the sole proprietor of the property at 2-4 Allen Street, Waterloo and he and the deceased were the registered proprietors as joint tenants of 6 Allen Street, Waterloo. Mr Angius, the deceased and a third party proceeded with a development on the properties at 2-6 Allen Street, Waterloo, following which Mr Angius and the deceased became registered proprietors as joint tenants of units 5, 6, 17, 18, 19, 23, and 24, 8 Allen Street, Waterloo and the retail/commercial properties known as R2, R3, C4 and Shop 5, 8 Allen Street, Waterloo (together, the Waterloo properties).
Mr Angius and the deceased, although still married, separated in about 2010. On 10 May 2011 they entered into a 'Separation Agreement' and, on 6 October 2011, entered into a further agreement also called 'Separation Agreement', which primarily provided for an adjustment of their title to the Waterloo properties. This was modified by a deed of variation on 15 November 2011 and a further agreement on 16 November 2011. In these reasons, I refer to the Separation Agreements, deed of variation and other agreement as the Deeds.

Para 1(a) - repairs, maintenance and improvements

Para 1(a) of the amended statement of claim seeks an order for payment of $41,471, representing 50% of the amounts claimed as having been paid by Mr Angius in respect of repairs, maintenance and improvements undertaken at the Property since the death of the deceased.
In his written submissions, Mr Angius amended the claim to $68,545.00, which was based on twelve items of expenditure. In closing submissions Mr Angius did not press one of those items, with the result that the amount being claimed is $64,078.88, based on eleven items of expenditure. No issue was taken at the hearing with this change.
Mr Angius submits that, as an occupying co-owner who has paid for repairs, maintenance and improvements, he is entitled to an allowance and that it would be unconscionable for the estate, as the co-owner, not to account to Mr Angius for his proper share: Forgeard v Shanahan (1994) 35 NSWLR 206; Biviano v Natoli (1998) 43 NSWLR 695.
Mr Salier and Robert Angius accept that, as a matter of principle, Mr Angius would be entitled to 50% of the cost of repairs, maintenance and improvements if it can be shown that the costs relate to the Property and had been paid by Mr Angius himself after the death of the deceased.
However, Mr Salier submits that no reimbursement should be made as the Court could not be satisfied that the sums had been paid by Mr Angius himself having regard to Mr Angius' evidence. Mr Salier also submits that two of the items do not fall into the category of repairs or improvements.
Mr Angius gave evidence that he mingled his personal finances, including money he received in respect of rental properties in his own name, with monies held in accounts in the name of Angius Investments Pty Ltd. He also gave evidence that he made payments using funds from the accounts of Angius Investments Pty Ltd about "90% of the time". Payments for expenses in relation to the Property might, therefore, have been made out of those accounts.
I do not accept Mr Salier's submission to be a complete answer to Mr Angius' claim in respect of repairs and improvements having regard to the totality of the evidence, which includes evidence from Mr Angius that he paid for some of the items out of "my own pocket" and that he had access to large amounts of cash to make payments towards the Property, stating that $30,000 was "nothing". There is also documentary evidence in the form of invoices and quotations which were tendered in support of his claim.
Robert Angius submits that Mr Angius should not be entitled to recover the amounts claimed in circumstances where, it is said, any improvements and repairs Mr Angius undertook to the Property were for his own benefit. This is because he did the improvements knowing that he was going to be the ultimate owner of the Property, having done everything he could to be the successful bidder at the auction.
I also do not accept Robert Angius' submission as a complete answer to the claim. Mr Angius may receive some benefit from the improvements or repairs he made to the Property in the context where he later bought it back. However, Mr Angius had to purchase the Property on the open market at auction for $6 million. A significant proportion of that purchase price went to the estate. Therefore, the improvements and repairs were also to the benefit of the estate.
Having regard to the evidence, I allow a claim of $6,589.32, being 50% of the amounts identified in five invoices totalling $13,178.64. This comprises: 1. an invoice dated 9 January 2012 from Kevin Wong Locksmiths in the amount of $520.00 in relation to the changing of the locks at the Property. Based on the evidence, I am satisfied that this amount was paid by cheque from Mr Angius' own account; 2. an invoice dated 1 March 2012 from Commercial Blinds in the amount of $360.00 which related to blinds in the garage. The invoice identifies that it was paid in full on 8 March 2012 and I am satisfied that Mr Angius paid this amount himself based on his evidence; 3. an invoice dated 8 March 2012 from Alex Bowen Carpets Pty Ltd in the amount of $9,363.64. I accept Mr Angius' evidence that the carpets were installed after the deceased passed away and that the invoice was paid in full by him. This evidence is also consistent with the words on the invoice which refer to an installation date of 28 February 2012 and that it has been paid; 4. an invoice dated 14 March 2012 from All Smart Kitchens Pty Ltd in the amount of $935.00 for works installing cupboard doors. I accept Mr Angius' evidence that this invoice relates to works in the garage and that it was paid by him. This evidence is also consistent with the invoice which identifies that it had been paid in full; and 5. an invoice dated 2 April 2012 from ND Electrics for $2000.00. Based on his evidence, I am satisfied that this related to the Property and was paid by him.
I do not accept the claims based on the remaining six items of expenditure for the following reasons.
I accept that Mr Angius paid the invoices dated 21 February 2012 from Palazzo Design Group in the amount of $8,400.00 and 28 March 2012 from Yardware in the amount of $4,000.00. However, these invoices relate to outdoor roof furniture. I agree with the submissions of Mr Salier that, not being fixtures to the Property, they cannot relate to a claim for contribution to the cost of repairs, maintenance or improvements. Mr Angius also gave evidence that he removed at least some of the outdoor roof furniture when he vacated the Property. To the extent that any of it was not removed, Mr Angius now has the sole benefit of that furniture. There was also no evidence before me that any of the remaining outdoor roof furniture improved the overall value of the Property.
The claim for $20,000.00, which was said to be for painting work on the Property undertaken in 2012 by a South American painter named Hector (who is now deceased), is not supported by any documentary evidence. Further, Mr Angius' oral evidence was not clear on this issue referring, as he did, to the painter also having done work at Mr Angius' property in Bowral and paying him various other amounts. I am, therefore, not satisfied that the evidence supports that work to the value of $20,000.00 was done at the Property or paid by Mr Angius after the death of the deceased.
Based on Mr Angius' evidence, I am not satisfied that the invoice dated 4 February 2013 from Urban Lighting in the amount of $758.00 relates to the Property Initially, Mr Angius could not recall to what it related. He then said it related to materials used at the "land" at 2 - 4 Allen Street, which is part of the Waterloo properties.
I accept Mr Angius' evidence that the two invoices from North Shore Aluminium dated 23 January 2013, in the amounts of $6,905.60 and $74,915.52, relate to the installation of doors, window grilles, railing and gates at the Property. However, I am not satisfied that they were paid for by Mr Angius from his personal finances given his oral evidence that he could not recall from which bank account he paid them, and that they were "most probably" paid using funds belonging to Angius Investments Ltd.

Para 1(b) - outgoings

Paragraph 1(b) of the amended statement of claim seeks an order for payment of $28,846.00 in respect of outgoings for the Property paid by Mr Angius during the period from the death of the deceased to the date he vacated the Property.
At the hearing, this amount was amended to claim $21,056.00. No issue was taken with that change.
The outgoings claimed are for council rates, basic water rates and monthly security monitoring charges for the years 2012 to 2016 (inclusive) and home insurance premiums for the years 2012 to 2015 (inclusive).
The calculation of $21,056.00 is largely based on estimates for the outgoings charged and paid as there are only five documents in evidence for the relevant period comprising: 1. a Randwick council rates notice for the 2015 financial year in the amount of $4,418.93; 2. two invoices from Sydney Water for basic water rates (excluding usage charges) for the fourth quarter in 2014 and the first quarter in 2015 in the amounts of $288.15 and $318.40; 3. an invoice for a GIO home and contents insurance premium due on 18 August 2012 in the amount of $3,495.88; and 4. an invoice from Nycon Security Group for the month of October 2012 which included an amount of $66.00 and was said to represent the monthly security monitoring fee paid by Mr Anguis throughout the period.
It was accepted by Mr Salier and Robert Angius that Mr Angius is entitled to a contribution to the council and water rates and insurance premium for which invoices had been provided if the Court was satisfied that they had been paid by Mr Angius. They also submit that the security monitoring charges are not outgoings.
I accept Mr Salier's and Robert Angius' submissions in relation to the security monitoring charges. While Mr Angius may have paid security monitoring charges for the period claimed, those charges do not run with the Property itself. They are more akin to usage charges which are paid for by a tenant and not by an owner of a Property. Therefore, they should not be the subject of contribution by the estate.
In the absence of documentary evidence supporting all the amounts claimed and payments made, and having regard to Mr Angius' evidence that he regularly made payments from the account of Angius Investments Pty Ltd, I am not satisfied that Mr Angius is entitled to reimbursement for the outgoings claimed other than for the amounts for which invoices in relation to council rates, basic water rates and insurance have been put before the Court. I accept Mr Angius paid those invoices on his own account in circumstances where his evidence was that he paid them himself and that evidence was not challenged in cross-examination.
Accordingly, in relation to the claim for outgoings, I find that Mr Angius should be paid an amount of $4,260.68, being 50% of the value of the invoices totalling $8,521.36 for council rates, basic water rates and insurance.

Para 1(c) - funeral expenses

Paragraph 1(c) of the amended statement of claim seeks an order for the payment of $438,576.78, being the expenses paid by Mr Anguis for the funeral of the deceased. At the hearing, this amount was amended to $440,738.72. No issue was taken with this amendment.
Mr Angius also seeks a declaration that such claim has priority as contemplated by Schedule 3 Part 1 of the Probate and Administration Act 1898 (NSW).
At the hearing, Mr Loupos confirmed that this claim is made up of the invoice from White Lady Funerals dated 2 February 2012 in the amount of $55,738.72, and the invoice from Eastern Suburbs Memorial Park dated 10 January 2012 in the amount of $385,000.00 in respect of the twelve-person vault in which the deceased was buried.
It was accepted by Mr Salier and Robert Angius that Mr Angius had paid both of these invoices personally and that the estate should reimburse Mr Angius for the whole of the White Lady Funerals invoice of $55,738.72.
The only issue in dispute is whether the estate should pay for the cost of the twelve-person vault.
Mr Salier submits it is not reasonable for the estate to pay for the entire vault and reimbursement should be limited to one-twelfth of the cost, being $32,083.33.
Robert Angius submits that, in circumstances where he has been denied access to the vault for seven years, he is the main beneficiary of the estate and he is unlikely to be buried in the vault, there is no reason why any amount should be reimbursed to Mr Angius in respect of the vault.
Mr Angius submits that the estate should pay for the entirety of the cost of the vault as it is reasonable, having regard to family tradition and Italian Catholic custom, and a necessity as there were only two twelve-person above-ground vaults available in what Mr Angius described as the Italian section of the Botany cemetery at the time.
I prefer the submissions of Mr Salier for the following reasons.
The principles applicable to the right of burial are summarised by Young J in Smith v Tamworth City Council (1997) 41 NSWLR 680 at 693-694. These principles include the following: 1. if a person has named an executor in his or her will and that person is ready willing and able to arrange for the burial of the deceased's body, the person named as executor has the right to do so; 2. where no executor is named, the person with the highest right to take out administration will have the same privilege; 3. the right of a surviving spouse or de facto spouse will be preferred to the right of children; 4. a person who expends funds in burying a body has a restitutionary action to recover his or her reasonable costs and expenses; and 5. the reasonable cost of a reasonable headstone is recoverable from the deceased's estate.
Where the executors undertake the task, they may spend a reasonable sum of money to erect a monument over the testator's grave, having regard to the estate and the circumstances in life of the testator: Chesterman v Mitchell (1923) 24 SR (NSW) 108.
Where a person carries out the legal or moral duties of another in the absence of another, an agency of necessity may arise, and may recover the costs incurred as agent: Croskery v Gee [1957] NZLR 586.
I accept that Mr Angius was an appropriate person to have arranged for the burial of the deceased and it was reasonable for him to try to bury her having regard to family and Italian Catholic tradition.
However, that does not mean that it is reasonable for the estate to pay for the entire cost of a twelve-person above-ground vault.
Mr Angius did not lead any evidence to support his assertion that burial in an above-ground vault is consistent with his family and Italian Catholic tradition.
Further, he did not put forward any documentary evidence as to the availability or cost of any alternatives to the twelve-person vault and simply asserted that there was only one other available at the same time and for the same price. He went on to assert that he paid for it out of "the love and respect" he had for his wife. He appears to have proceeded in the way he did as, in the words of Mr Loupos, for a "person of Mr Angius' standing and wealth, it was an insignificant amount, and a choice he made without hesitation".
The evidence before me indicates that, at the time of her death, Mr Angius and the deceased were separated. There was no evidence about the deceased's wishes for her burial or whether Robert and Jenny Angius were consulted at the time of the burial.
It was accepted by Mr Angius that he and other family members may be buried in the vault in the future. In fact, he sought to justify his position by saying this could occur without cost to them in the future. It is, therefore, clear that others may use and benefit from the vault in the future.
Mr Angius made a choice and others will benefit from the vault in the future. Having regard to the evidence and the principle that what is recoverable from a deceased's estate is the reasonable cost of a reasonable headstone, I am not satisfied that it is was a necessity for Mr Angius to have chosen a twelve-person vault nor that it equates to a reasonable cost of a reasonable headstone for which the estate should be liable.
No submission was put to me as to an alternative percentage of the cost of the vault to be paid by the estate. Accordingly, I order that the estate should pay Mr Angius $87,822.05, being one-twelfth of the cost of the vault at $32,083.33 and the cost of the funeral expenses, being $55,738.72.

Para 1(a) - mesne profits

Mr Salier seeks an order that Mr Angius pay one half of mesne profits at the market rate for Mr Angius' occupation of the Property for the period from 15 January 2012 to 1 May 2017, being 276 weeks and 2 days.
Mesne profits are a form of damages arising out of trespass. As Cohen J noted in Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 at 435 (Lamru v Kation) "It is said that a claim for mesne profits was in origin an action of trespass and was formerly brought after judgment for ejectment". See also Fleming's The Law on Torts, 10th edn, 2011 (Lawbook Co., Australia) at [3.110].
The person claiming mesne profits is normally the person entitled to possession of the property. A trustee appointed with the power to sell property under s 66G of the Conveyancing Act 1919 (NSW) has a right to enter into, and remain in possession of, a property even though they are not the registered proprietor. It follows that trustees for sale have the power to claim possession and accordingly to seek mesne profits: Lamru v Kation at 435-436.
The usual measure of mesne profits is the market rent for the premises which the trespassor should have paid for the period of its occupation. It will not depend on whether the person entitled to possession would have been able or willing to let the premises to someone else during the relevant period: Lamru v Kation at 439, and citing with approval Megaw LJ in Swordheath Properties v Tabet [1979] 1 WLR 285 at 288; 242.
As to the position of a co-owner like Mr Angius, the rights of one co-owner against another co-owner of real property, when one has been in occupation and the other has not, include the payment of an occupation fee by the co-owner in possession. However, this is only where the other co-owner has been excluded from occupation or the owner in occupation claims an allowance in respect of improvements. Equity will permit such an allowance in respect of improvements only on terms that he is accountable for an occupation fee - this is an example of he who comes to equity having to do equity: Forgeard v Shanahan (1994) 35 NSWLR 206 at 223.
Mr Salier submits that mesne profits are payable from 15 January 2012, being the date on which the Property vested in the initial trustees for sale pursuant to the operation of the Consent Orders. As Mr Angius remained in occupation of the Property throughout the period from 15 January 2012 to 1 May 2017, he submits that Mr Angius is liable to the estate for mesne profits calculated as half of the market rent for the Property for the entirety of that period.
As an alternative, Mr Salier submits that mesne profits are payable from 3 December 2015, being the date on which Mr Angius agreed to give vacant possession to Mr Salier in accordance with the notation in Hallen J's orders in the 2012 proceedings.
Mr Angius submits that mesne profits are not payable because Mr Salier is estopped from seeking them, having regard to the principles in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. Mr Angius argues that a claim for mesne profits should have been brought by Mr Salier in the 2012 proceedings, in which proceedings Mr Salier sought to have the Deeds and Consent Orders specifically enforced. He also points to Mr Salier not having sought, and Hallen J not making, an order requiring Mr Angius to vacate the property in the 2012 proceedings.
I do not accept that Mr Salier is estopped from claiming mesne profits for the reason that he did not make that claim in the 2012 proceedings. The question is not whether Mr Salier could have made a claim for mesne profits at that time but whether it was so relevant to the subject matter in the 2011 proceedings that it was unreasonable not to rely on it: Conference & Exhibition Organisers Pty Ltd v Johnson [2016] NSWCA 118; Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.
In my opinion, it was not so relevant and it was not unreasonable for Mr Salier not to have raised the claim for mesne profits in the 2012 proceedings. Those proceedings were primarily about whether the Consent Orders and Deeds were operative. They did not involve any claims for payment by Mr Angius from the estate of the type being sought in the current proceedings, with his claims for money being limited to provision under s 59 of the Succession Act 2006. The cross-claim of Mr Salier, in so far as it related to the Property, sought to enforce the Consent Orders or, alternatively, to replace himself and another trustee as the trustees for sale of the Property.
In any event, the 2012 proceedings were resolved upon terms which included an express notation that Mr Angius would provide the co-trustees with vacant possession of the Property within 28 days. Mr Angius cannot now be allowed to resile from that notation. It is not an answer to say that there was no Court order to that effect and that the notation is an unenforceable agreement without consideration.
The Orders made by Hallen J in the 2012 proceedings also included a notation that Mr Angius would provide the estate with evidence of any liabilities which he asserted the estate was liable to pay him, which the estate would then assess and make an adjustment and/or payment to Mr Angius. This clearly contemplated that, in the future, some form of account would be taken in respect of liabilities and payments made by both Mr Angius and the estate. This is precisely what these proceedings are doing.
Mr Angius also submits that mesne profits should not be payable in circumstances where Mr Angius gave evidence that he was living at 23/8 Allen Street, Waterloo for at least part of the period for which mesne profits are being claimed.
I accept Mr Angius' evidence that he stayed at 23/8 Allen Street on occasion. However, his evidence was that he did so while 'renovating' or undertaking 'repairs' to that or other Waterloo properties and for some indeterminate periods of time. Mr Angius also gave evidence that he spent approximately 2% of his time at his home in Bowral.
It does not follow that Mr Angius was not in occupation of, and therefore not liable for mesne profits in relation to, the Property during that time. The evidence given by Mr Angius and the documents he relied on in support of his claim for repairs and improvements make clear that Mr Angius considered the Property to be his principal place of residence to which he was entitled to occupy, and did in fact occupy, throughout the period. If it were otherwise, Mr Angius would not have taken the steps he did to seek to vacate the Consent Orders, agree to give vacant possession in November 2015 and seek to stay the writs of possession in 2016 and 2017.
In final submissions, Mr Angius' solicitor asserted that it would be inequitable to allow mesne profits to be payable to Mr Salier as it would amount to 'double-dipping' in circumstances where the estate had already received 50% of the sale price of the Property. I do not accept that submission. There is no double dipping in this case. Mr Angius had the benefit of the sole occupancy of the Property up until 1 May 2017 in circumstances where he had no right to it. If, as he should have, he had vacated the Property by 3 December 2015, he may have been able to acquire it for a lower amount. He chose not to do so. The fact that the value of the Property may have increased over that time provides no basis for him not to pay mesne profits now.
I am satisfied that mesne profits are payable by Mr Angius even though he was a co-owner of the Property. He has made a claim for improvements and refused to vacate when he should have. However, for the reasons that follow they should only be payable during the period between 3 December 2015 and 1 May 2017.
In Lamru v Kation, the Court held that the trustees for sale were entitled to mesne profits from just before the date they were appointed even though they had not initially taken steps to eject the party in possession. This was because, at the time the trustees were appointed, the party in possession of the premises did not have the consent of one of the joint owners. Further, the trustees for sale had not waived their rights to have them ejected and no consent could be implied as the trustees had persisted with an attempt to negotiate a proper occupation fee throughout the relevant period.
In Skyllas v State Trustees Limited [2008] VSC 52, the plaintiff claimed an equitable interest in property owned by his mother, in which he resided. The defendant, State Trustees Ltd, who had been appointed the administrator of the plaintiff's mother's affairs on 2 February 2004, sought a right to sell the property and damages for trespass by way of mesne profits. The Court granted mesne profits from the date on which the plaintiff was required by the defendant to give vacant possession (being 23 January 2005), not from the date on which the trustee had the power to take possession and sell the property of the plaintiff's mother.
In Vogt v Vaughn [2006] NSWSC 1003 at [8], Campbell J noted that "the plaintiff had, up to that time, an implied license to occupy the premises". After that point, however, the plaintiff was liable for damages.
The death of the deceased between the date on which the Consent Orders were made and 15 January 2012, being the date on which the initial trustees for sale were to be appointed, raises a question as to the self-executing nature of the Consent Orders. Even if they were self-executing, it is possible that her death may have impacted the position of the initial trustees for sale and their understanding of what steps they should take.
Whatever the position, it is accepted (and there is no evidence before me to the contrary), that the initial trustees for sale did not take any steps to sell the Property or seek to exercise any rights they had to have Mr Anguis vacate and give up possession of the Property, or pay an occupation fee to them.
In those circumstances, it appears that from 15 January 2012 Mr Angius occupied the Property with the apparent acquiescence, if not the implied consent, of the initial trustees for sale.
Mr Angius also took steps to seek to set aside the Consent Orders as early as May 2012 which, if successful, would have meant that the Property would not have vested in the initial trustees for sale.
It is true that Mr Salier filed a cross-claim in April 2014 in the 2012 proceedings seeking to enforce the terms of the Consent Orders which, if successful, would have enabled him to enforce the sale of the Property by the initial trustees. However, the 2012 proceedings were resolved on terms that involved an agreement by Mr Angius to vacate the Property by 3 December 2015.
Accordingly, I am not satisfied the evidence supports a finding that Mr Angius should pay mesne profits for the period from 15 January 2012 to 3 December 2015.
The calculation of mesne profits was based on expert evidence given by Robert Paridis, a real estate agent in Sydney's eastern suburbs, who estimated the market rent for the Property. Mr Paridis' evidence was that market rental could be achieved for the property in the amount of $1,800.00 per week between 1 January 2015 and 31 December 2016 and $1,950.00 per week between 1 January 2017 and 1 May 2017. No evidence was put forward by another expert to contradict Mr Paridis.
I accept the calculation of mesne profits payable by Mr Angius for the period from 3 December 2015 to 1 May 2017 based on that evidence. No allowance should be made for any vacancy factor having regard to the principles referred to above.
For these reasons, I allow Mr Salier's claim for mesne profits in the amount of $67,371.43.

Para 1(b) and 1(c) - rents

The remaining claims for relief in the cross-claim relate to rents paid to Mr Angius in the sum of $32,880.00 in respect of 19/8 Allen Street Waterloo and the sum of $18,082.05 in respect of Lot 32, 8 Allen Street.
These claims reflect the sums of rent which were to be paid by Mr Angius to Mr Salier pursuant to paras 9(b) and 9(d) of the orders made by Hallen J in the 2012 proceedings.
The evidence in support of these claims are the rental statements for 19/8 Allen Street and Lot 32, 8 Allen Street, as well as correspondence from the relevant managing agent.
Mr Angius accepts that these amounts are payable to the estate. Mr Angius initially sought to set off a claim of $22,000.00 against the rent for 19/8 Allen Street Waterloo. However, this was not pressed on day two of the hearing.
Accordingly, I find that the amount of $50,962.05 should be paid by Mr Angius to Mr Salier.

Set-off

Mr Salier sought to set off the amounts he claims against any amounts found to be payable by Mr Salier to Mr Angius.
Set-off is appropriate in a case like this. The Court also has power to give judgment for the balance only of the sums of money awarded on the respective claims: s 90(2)(a) Civil Procedure Act 2005 (NSW) (CPA).
Accordingly, based on my findings above that Mr Angius is owed $98,672.05 and that Mr Salier, on behalf of the estate, is owed $118,333.48, the amount of $19,661.43 is payable by Mr Angius to Mr Salier, on behalf of the estate.
In light of the outcome, it is not appropriate to make a declaration in relation to the priority of the funeral expenses as sought by Mr Angius.

Costs of separate questions

The position on costs in relation to the separate questions is not straightforward. Mr Angius succeeded with some of his claims in part, as did Mr Salier. Both parties made concessions, as was appropriate to do so, and the end result is finely balanced.
In those circumstances, the proper order for costs is for Mr Angius and Mr Salier to each pay their own costs in relation to the separate questions.
As he was joined as a party at risk of his own costs, I will also order that Robert Angius pay his own costs in relation to the separate questions.

Leave to file a further amended statement of claim

Mr Angius seeks leave to file a further amended statement of claim to include a new claim seeking contribution for payment of a GST liability. As I refused leave to amend at the hearing of the separate questions, the application is being made to enable Mr Angius to pursue the claim as part of the remaining issues in the proceedings.
The new GST claim is made against Mr Salier only and is expressed in the following terms (the GST claim): 1. An additional prayer for relief in the following terms: "$270,106.25 plus interest from 27 July 2012 as reimbursement for the Assessed and Penalty amounts paid by the plaintiff to the ATO on behalf of the estate of the deceased". 1. Four new paragraphs in the pleading: "Contribution for taxation payments on behalf of Estate On 29 May 2012 John and Laura Angius received from the Australian Taxation Office a Notice of Assessment for Net Amount Owing for periods between 1 July 2010 to 31 December 2011 in the sum of $423,905.00. On 30 May 2012 John and Laura Angius received from the ATO a Notice of Penalty relating to shortfall in Activity Statements for periods between 1 October 2010 and 31 December 2011 in the sum of $107,307.50. The plaintiff and deceased were jointly liable for the assessment and penalty amounts totalling $540,212.50. The plaintiff completed payment of the assessment and penalty amounts on 27 July 2012. The Plaintiff claims a 50% contribution towards the above assessment and penalty amounts from the First Defendant in the sum of $270,106.25 plus interest from 27 July 2012".
The Court has power to grant Mr Angius leave to amend to include the GST claim under s 64 of the CPA.
That power must be exercised in accordance with the overriding purpose and principles established by s 56 of the CPA: Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 at [29].The proposed amendment must also comply with the CPA and Uniform Civil Procedure Rules 2005 (NSW) (UCPR) by disclosing a reasonable cause of action.
The overriding purpose of the CPA and the UCPR in their application to civil proceedings is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56(1) CPA.
The Court must seek to give effect to the overriding purpose in exercising its powers under the CPA and UCPR (s 56(2)) and must manage proceedings having regard to the objects, which include the just determination of the proceedings, the efficient disposal of the business of the Court, the efficient use of available judicial and administrative resources and the timely disposal of the proceedings, and all other proceedings in the Court, at a cost affordable to the respective parties: s 57(1) CPA.
The weighing of these factors was considered in relation to an application for leave to amend under ACT provisions similar to s 56 of the CPA in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 in which Gummow, Hayne, Crennan, Kiefel and Bell JJ stated (at [102]): "The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the Court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment."
At the hearing of the separate questions, Mr Loupos, on behalf of Mr Angius, made the application to amend orally and did not provide any affidavit evidence in support.
He submits that leave should be granted as no prejudice will be suffered in circumstances where Mr Salier has been on notice of the GST claim since the start of the proceedings. He also sought to explain the delay in making the application due to Mr Angius having been in hospital in early December 2018 and not being represented when the matter was before Robb J on 5 February 2019, at which time he may not have understood the proceedings.
Mr Salier and Robert Angius do not consent to the application and submit that leave should be refused having regard to the delay and prejudice from the late amendment and because the pleading itself is deficient and unlikely to succeed, including because of a limitation issue. If the Court is minded to grant leave to permit the addition of the GST claim, they submit that the amendment should take effect from 18 February 2019.
The history of the proceedings does not support Mr Loupos' submissions regarding notice of the GST claim. They also make plain that Mr Angius has had many opportunities to plead and re-plead a claim in respect of GST since these proceedings were commenced.
A claim referrable to a GST liability that arose out of the sale of certain of the Waterloo properties, which were sold to pay down construction debt, was included in the statement of claim filed on 9 May 2016 (initial GST claim). That claim was struck out by Kunc J on 15 November 2016 for failing to disclose any reasonable cause of action. Mr Loupos was acting for Mr Angius at that time.
Mr Angius' new lawyers filed an amended statement of claim (on 17 February 2017) which omitted any claim referable to GST.
A second iteration of a claim referable to GST following a 2014 Australian Taxation Office (ATO) audit was the subject of Mr Angius' notice of motion dated 23 May 2018 seeking leave to file a further amended statement of claim. That motion was heard by Robb J on 2 November 2018, at which time Mr Angius was represented by counsel and Mr Loupos was the solicitor on the record. Leave to file the claim in the form proposed was refused as it was not properly pleaded. As Robb J noted on that occasion, "when I look at this it doesn't tell me anything about how this GST liability arose".
Mr Angius was given another opportunity to re-plead to include a GST claim, on the basis that a draft was to be served on Mr Salier by 16 November 2018.
The draft pleading included the GST claim in the form now proposed, which is the third iteration of a claim referable to GST and, for the first time, based on an ATO assessment and penalty notice received in 2012.
Mr Salier's solicitor sent a proposal to Mr Angius' solicitor consenting to leave being granted if it was filed and served by 5 December 2018 and Mr Angius produced copies of certain tax invoices relating to the claim by 7 December 2018. A response from Mr Loupos on 4 December 2018 noted that Mr Angius had been admitted to hospital and asked for an extension to respond by 10 December 2018.
Without notice to Mr Salier, Mr Angius attempted to file a further amended statement of claim including the GST claim and other amendments with the Registry on 14 December 2018. This was rejected as it was not verified and did not include a solicitor's certificate. On 20 December 2019, Mr Angius filed a verified version which included a solicitor's certificate by Mr Loupos. The tax invoices sought to Mr Salier were not produced and it was asserted at the hearing that they do not exist.
The matter came back before Robb J on 5 February 2019 at which time his Honour directed that the further amended statement of claim that was filed on 20 December 2018 be removed from the Court file because it was filed without leave of the Court, in breach of directions and to permit it to be filed at such a late stage would render the conduct of the hearing on the separate question impossible. On that occasion his Honour commented that "It seems obvious, on the face of it, through the conduct of the plaintiff, that this matter has now become delinquent".
Based on the above, it is clear that the version of the GST claim now being proposed is materially different to the other iterations of claims seeking contribution to GST. It is therefore incorrect for Mr Angius to assert that Mr Salier has been on notice of the GST claim since May 2016.
It is also clear that Mr Angius has not adequately explained the delay and has had many opportunities to formulate a claim referrable to GST in a proper form.
While delay is an important case management consideration, regard must also be had to whether any prejudice would be suffered as a result of the proposed amendment and whether it is in a form that should be allowed.
Mr Salier raised the prospect of a Limitation Act 1969 (NSW) (Limitation Act) defence, submitting that s 14(1)(a) of the Limitation Act, which provides for a six year limitation period, applies in this case as Mr Angius' claim for contribution is a claim in quasi-contract: Barber v De Prima [2018] NSWSC 601 at [26]-[49], citing and applying the judgment in Lang v Le Boursicot (1993) 5 BPR 97,406.
The pleading states that Mr Angius completed payment of the ATO assessment and penalty amounts by 27 July 2012. The evidence provisionally submitted at the hearing of the separate questions also indicates that the last payment received by the ATO was on 1 August 2012. Mr Salier submits that the cause of action (if any) accrued on that day and, therefore, became statue barred in August 2018, by virtue of s 63 of the Limitation Act.
Leave to amend to add a new cause of action after the expiry of a limitation period may be granted under s 65(2)(c) of the CPA if the new cause of action being proposed arises from the same (or substantially the same) facts as those giving rise to an existing clause of action in the statement of claim. In such cases, the amendment is taken to have affect from the date on which the proceedings commenced, rather than the date of amendment: s 65(3) CPA.
The GST claim now being proposed does not appear to arise from the same or substantially the same facts giving rise to an existing cause of action in these proceedings. The contribution and reimbursement claims made against Mr Salier in this case relate to payments made by Mr Angius which are unconnected with any facts that could give rise to a GST liability in the amount claimed. The current GST claim is also unconnected to the previous iterations of GST claims, noting that those previous iterations were struck out and are not existing causes of action.
Even if the conditions of s 65(2)(c) of the CPA are not satisfied, the Court retains power to permit an amendment adding a statute-barred cause of action under its general power of amendment conferred by s 64 of the CPA.
Further, and as accepted by Mr Salier, any prejudice in respect of the limitation defence may be dealt with via an order that the amendment to include the GST claim takes effect from the date of amendment, rather than the date of commencement of the proceedings.
A submission was also made that leave should not be granted as there is a need for resolution of all the issues in dispute between Mr Salier and Mr Angius in these proceedings. It was put that, until those issues are finalised, the estate cannot be settled and other steps, including the FPA proceedings, cannot progress.
I accept that it is important for the issues between the estate and Mr Angius to be finally resolved soon, particularly in the context where proceedings relating to the estate have been in this Court since 2012, Mr Salier was appointed administrator in 2014 and the separate questions were ordered for that purpose. However, the GST claim relates to a known sum of money. If needed, the value of the estate could be finalised with a provision made for that amount.
These proceedings will also continue on other issues and there remains a claim in para 1(g) of the amended statement of claim which, although put as an alternative, seeks payment of an additional sum from Mr Salier. Accordingly, the outcome of the separate questions may not finally resolve the final value of the estate.
It is also a very relevant factor that Mr Salier accepted, as a matter of principle, that the estate would be liable to reimburse Mr Angius for 50% if Mr Angius and the deceased had a GST liability and Mr Angius had paid the whole liability himself.
Having regard to the above, and notwithstanding the delay, a just determination of the issues in dispute supports Mr Angius having the opportunity to pursue a claim now proposed in respect of GST.
However, I do not accept that leave should be granted to Mr Angius to file a further amended statement of claim to include the GST claim in its current form or in the form handed up to Court on the morning of the hearing.
This is because the GST claim is not adequately pleaded, failing as it does to plead all material facts and to properly particularise the claim. The most fundamental of these failings is that it does not plead how the purported tax liabilities arose. The claim does not even identify whether the liability relates to GST or some other type of tax liability. It also fails to identify from which accounts and when payments were made by Mr Angius, referring only to the completion date of payment being 27 July 2012.
The further amended statement of claim handed up to Court also includes amendments that go beyond the GST claim.
I will make directions to enable Mr Angius to serve a draft further amended statement of claim, in which the amendments are to be limited to include a GST claim of the nature now proposed but in a proper form, and to bring the matter back before me to determine whether leave should then be granted.
The timetable for these directions will be short in order to finalise this issue. I will not make any direction for the filing of further evidence by Mr Angius in support of the proposed GST claim having regard to the previous orders made, which prevent Mr Angius from leading further evidence without leave of the Court, and Mr Loupos' submissions that all of the evidence Mr Angius will rely on in support of the GST claim has been served in these proceedings.
In view of the history of this matter, the opportunity being provided to Mr Angius to re-plead a claim in respect of GST must be the last one afforded to him. It would be contrary to the objectives of s 56 of the CPA to allow Mr Angius additional opportunities to do so.
The appropriate costs order in relation to Mr Angius' application made at the hearing of the separate questions for leave to file a further amended statement of claim is that Mr Angius should pay Mr Salier's costs.

Orders

For the reasons given, the Court makes the following orders: 1. In relation to the claims for relief at paragraphs 1(a), 1(b), 1(c), 1(d), 1(e) and 1(f) of the amended statement filed 17 February 2017 and the relief claimed in the cross-claim filed on 4 September 2018 (the separate questions), the plaintiff/cross-defendant pay to the first defendant/cross-claimant the sum of $19,661.42. 2. The plaintiff/cross-defendant, the first defendant/cross-claimant and the seventh defendant pay their own costs in relation to the hearing of the separate questions. 3. Dismiss the plaintiff's application made at the hearing of the separate questions seeking leave to file the further amended statement of claim. 4. Order the plaintiff to pay the costs of the first defendant in relation to the plaintiff's application made at the hearing of the separate questions seeking leave to file the further amended statement of claim. 5. Direct the plaintiff to serve on the first and seventh defendants by 15 March 2019 a draft of a further amended statement of claim, with any amendments to be limited to the plaintiff's claim that he is entitled to contribution from the estate of the late Mrs Angius in respect of his payment of an assessment dated 29 May 2012 and notice of penalty dated 30 May 2012 issued by the ATO to the plaintiff and the late Mrs Angius. 6. Direct the first and seventh defendants to inform the plaintiff by 22 March 2019 whether they consent or object to the plaintiff being given the leave to further amend the statement of claim in the form proposed. 7. Stand the matter over on 29 March 2019 at 9.15am before me for the purpose of making appropriate orders in relation to any application by the plaintiff for leave to amend. 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: 01 March 2019

CPA and Uniform Civil Procedure Rules 2005(NSW)

6 Gordon Salier v Robert Angius [2015] NSWSC 853 Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 Lang v Le Boursicot (1993) 5 BPR 97,406 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Skyllas v State Trustees Limited [2008] VSC 52 Smith v Tamworth City Council (1997) 41 NSWLR 680 Swordheath Properties v Tabet [1979] 1 WLR 285 Vogt v Vaughn [2006] NSWSC 1003 Texts Cited: Fleming's The Law on Torts, 10th edn, 2011 (Lawbook Co., Australia) Category: Principal judgment Parties: John Angius (Plaintiff / Cross-Defendant) Gordon Albert Salier AM (First Defendant / Cross-Claimant) Angius Hotel Investments Pty Ltd (Second Defendant) Togumi Pty Ltd (Third Defendant) J&L Angius Pty Ltd (Fourth Defendant) Tararba Pty Ltd (Fifth Defendant) Angius Investment Pty Ltd (Sixth Defendant) Robert Angius (Seventh Defendant) Representation: Counsel: M Willmott SC w C Birtles (First Defendant / Cross-Claimant) J Baird (Second to Sixth Defendants) V Culkoff (Seventh Defendant)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (10 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (18)

Cited By (7)