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[2008] WASC 289
Supreme Court of WA
2008-12-12
Martin CJ
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : AINSWORTH -v- ROBERTS [2008] WASC 289
Agreements - Ready, willing and able - Renunciation - Repudiation - Breach - Without prejudice privilege - Mistake - Turns on own facts
Defendant : Mr E Carlose & Mr P J Mugliston (16 & 20 June 2008 only)
Bentley v Nelson [1963] WAR 89
Burg Design Pty Ltd v Wolki [1999] FCA 388; (1999) 162 ALR 639
Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623
MacKenzie v Coulson (1869) LR 8 Eq 368
Maralinga Pty Ltd v Major Enterprises Pty Ltd [1973] HCA 23; (1973) 128 CLR 336
Nicholson v Southern Star Fire Insurance Co [1927] 28 SR (NSW) 124
Rigg v Lee Loy Seng [1987] WAR 333
1 In these proceedings, the plaintiffs claim declarations that an agreement for the restructure of assets held by a family through certain trusts is at an end, and for an order that land known as Chippendale Cherry Farm situated in Albany, Western Australia be transferred from the defendant to the defendant and the first plaintiff as trustees of one of the family trusts. By her defence, the defendant denies that the agreement is at an end and seeks, in effect, orders for its performance. The third plaintiff also claims $11,000 pursuant to an agreement for the sale of a motor vehicle to the defendant. The defendant counterclaims against the first plaintiff for the sum of $25,000 which she alleges she advanced by way of a loan and further alleges has not been repaid. She also claims interest on that amount.
2 The third plaintiffs named on the writ, which was issued in June 2006, are John Ainsworth (known to all as Jock) and Ellen May Ainsworth. Ellen May Ainsworth died in December 2006. An order was made to the effect that the proceedings continue without her estate taking any further part in them, although curiously, the headings to the proceedings have continued to refer to her as a party.
3 Jock and Ellen Ainsworth had five children. They are the other parties to the proceedings. Their only son, Eric John Ainsworth, is the first plaintiff. Three of their daughters, Joan Lorraine Marshall, Kaye Pitt and Lesley June Kingdon are the second plaintiffs. Their remaining daughter, Judith (Judy) Dawn Roberts, is the defendant.
4 The J and E M Ainsworth Trust (the JEMA Trust) was created by a deed of settlement dated 5 July 1995. The settlor was Mr John Pascoe, the accountant used by Jock Ainsworth. Jock Ainsworth was the trustee, guardian and appointor of the JEMA Trust when it was created. Whether or not he remained a guardian and appointor of the JEMA Trust is one of the issues in the case. The primary beneficiaries are the children of Jock and Ellen Ainsworth. Additional members of the class of general beneficiaries include any persons related by blood or marriage to Jock Ainsworth.
5 More specifically the Schedule to the Deed of Settlement defines the Guardian and Appointor to be:
JOHN AINSWORTH ('the first named person') or such other person or persons as the first named person may by Will or instrument in writing - revocable or irrevocable and whether taking effect in the future or at present or whether subject to a contingency or not appoint and failing any such appointment then upon the death of the first named person then Ellen May Ainsworth, Judith Dawn Roberts, Eric John Ainsworth, Joan Lorraine Marshall, Kaye Pitt and Lesley June Kingdon ...
6 By cl 1 of the Deed of Settlement, each of the expressions 'Guardian' and 'Appointor' is defined to mean:
... successively the person or persons successively named or described as such in the Schedule ...
7 The trust is a discretionary trust, in the sense that the trustee is empowered to allocate the income and capital of the trust as between such of the beneficiaries as he or she thinks fit, subject to prior consultation with and in some cases the consent of the guardian (cl 11). The appointor is empowered to remove any trustee, to appoint any additional trustee or trustees, or to appoint a new trustee or trustees in the place of any trustee who resigns or ceases to be a trustee by operation of law.
8 The JEMA Trust was created for the purpose of carrying on a cherry farming business under the name 'Chippendale Cherry Farm' from the property known as such. The name 'Chippendale Cherry Farm' was registered under the Business Names Act 1962 (WA) on 11 September 1995. At the time of registration, the person recorded as carrying on business in that name was Jock Ainsworth as trustee for the JEMA Trust.
9 The Ainsworth Property Trust (the Property Trust) was created by deed of settlement dated 1 July 1997. The settlor of the trust was Mr Pascoe. The original trustees were Judy Roberts and Eric Ainsworth. The primary beneficiaries are the grandchildren of Jock and Ellen Ainsworth. The general beneficiaries include a variety of categories of relative of the 'named person', being Jock and Ellen Ainsworth. By the Schedule to the Deed of Settlement, each of the guardian and appointor are specified to be:
JOAN LORRAINE MARSHALL ('the first named person'), KAYE PITT ('the second named person'), LESLEY JUNE KINGDON ('the third named person'), ERIC JOHN AINSWORTH ('the fourth named person') and JUDITH DAWN ROBERTS ('the fifth named person') or such other person or persons as they may jointly by Will or instrument in writing revocable or irrevocable and whether taking effect in the future or at present or whether subject to a contingency or not appoint and failing any such appointment then upon the death of any of the first named person, the second named person, the third named person, the fourth named person or the fifth named person the child or children of such deceased person and if more than one jointly between them shall act in lieu of his or her or their deceased parent ...
10 By cl 1 of the Deed of Settlement, the expressions 'Appointor' and 'Guardian' are each defined to mean:
... successively the person or persons successively named or described as such in the Schedule ...
11 Like the JEMA Trust, the Property Trust is a discretionary trust in the sense that the trustee has power to allocate income and capital amongst the beneficiaries, subject to prior consultation with and, in some cases, the consent of the guardian (cl 11). The appointor has the same powers of removal and appointment of trustees as conferred upon the appointor of the JEMA Trust (cl 16).
12 The Property Trust was created for the purpose of holding the property known as Chippendale Cherry Farm. That property was transferred from Jock and Ellen Ainsworth to the trustees of the Property Trust (Judy Roberts and Eric Ainsworth) by a transfer registered on 29 September 1998.
13 Changes were made to the identities of the personnel responsible for the administration of the JEMA Trust in 1999. This portion of my reasons sets out the findings of fact which I make in relation to those changes. I will deal with the legal consequence of those facts later in these reasons.
14 According to Judy Roberts, the changes were made at the suggestion of Jock Ainsworth, because of his concern that claims for compensation might be made against him as a result of charges which had been brought against him. According to her, the changes were intended to ensure that his assets were beyond the reach of claimants. However, a contemporaneous note made by Mr Pascoe at the time was produced in evidence. The note is addressed to 'Judith' - plainly a reference to Ms Roberts. It is a fair inference from the terms of the note, and an inference which I draw, that Ms Roberts had discussed removing her brother, Eric Ainsworth, as a co-trustee of the Property Trust with Mr Pascoe. In the note, Mr Pascoe advises her that because the appointors of the Property Trust are all five children of Jock and Ellen Ainsworth, their agreement would be required to remove Eric as a co-trustee of the Property Trust.
15 However, the note goes on to advise that because Jock is the appointor of the JEMA Trust:
... he can appoint you Judith to be the trustee of that trust and also the appointor and guardian so that's one bit of good news.
16 Attached to Mr Pascoe's note, and in his handwriting, is a resolution in the following terms:
Resolution of Trustee and Appointor of the J & E M Ainsworth trust held at Kojonup on 11 May 1999.
It was resolved to appoint Judith Dawn Roberts to be trustee of the above trust and also to appoint her as appointor and guardian of that trust.
__________________________ _______________________
J E Ainsworth (Original Trustee) J E Ainsworth (Appointer)
The note bears an endorsement to Mr Pascoe's secretary to 'type this up'.
17 A typed resolution in precisely those terms, signed by Mr Jock Ainsworth, both as original trustee and appointor, was tendered in evidence.
18 Also tendered in evidence was a document apparently lodged with the Ministry of Fair Trading in 1999 changing the particulars relating to the registered business name 'Chippendale Cherry Farm'. That document was signed by Ms Roberts on 17 May 1999. It clearly and unequivocally records that she commenced carrying on business under that name as trustee for the JEMA Trust on 11 May 1999. It also clearly and unequivocally records that Jock Ainsworth as trustee for the JEMA Trust ceased carrying on business under that name on 10 May 1999.
19 When Ms Roberts was giving evidence, I suggested to her that it must have been clear to her, from the terms of the document which she signed, at the time she signed it, that she was the sole trustee of the JEMA Trust. She denied that proposition. The only explanation she was able to give for her failure to appreciate the clear and unequivocal effect of the form at the time she signed it was the assertion that Mr Jock Ainsworth continued to sign documents after that date. However, obviously that could not have affected her comprehension at the time she signed the form. I therefore reject her assertion that she did not believe, at the time she signed the Business Name form, that she was the sole trustee of the JEMA Trust. Because of the terms of Mr Pascoe's note to her, which I have set out above, I find that in 1999 it was her intention to take complete control of the JEMA Trust, and that her father, Jock Ainsworth, concurred in that objective.
20 Trust resolutions for the distribution of the income of the JEMA Trust for each of the years ended 30 June 1999 - 2005 inclusive were tendered in evidence. Apart from the dates, each of the six documents is in identical terms. Each records a resolution to distribute such income as has not been paid or applied, equally between Jock and Ellen Ainsworth, by crediting the income to their names in the books of the JEMA Trust. Each of the six resolutions is signed only by Ms Roberts as trustee, and is also signed separately by her (and her only) as guardian under the words 'I/we consent to this allocation'. The resolutions were typed by the accountants to the JEMA Trust, and in each case Ms Roberts' name and position was typed on the form below the point at which she has signed. There is no provision on any of the forms for execution by Jock Ainsworth.
21 I suggested to Ms Roberts that if, after 1999, she believed that Jock Ainsworth was still a trustee or guardian, she would have expected to see his name typed on to the resolutions so that provision was made for him to sign them. She replied:
Possibly, but Pascoes used to just put the paperwork in front of you to sign and that's what I did. It didn't really mean anything to me being a guardian or anything else. I didn't understand the implications.
22 I then put to Ms Roberts that she did understand that her father's name was not on the documents. She replied:
Yes, because he wanted his name off at the time because of the charges against him.
23 This response is only explicable by an understanding that changes had been made to remove Jock Ainsworth from any formal role in relation to the JEMA Trust in order to protect that trust from claims against Jock Ainsworth. This evidence provides further support for my finding that, at all material times after 1999, Ms Roberts believed that she was the sole trustee, appointor and guardian of the JEMA Trust.
24 Copies of the taxation returns for the JEMA Trust for the years ending 30 June 1999 - 2005 inclusive were tendered in evidence. Curiously, the returns for the years 2000 and 2005 were signed by Jock Ainsworth. However, the returns for each of the years 1999 and 2001 - 2004 inclusive were signed by Ms Roberts. In all the circumstances, it seems to me to be more likely than not that the execution of the tax returns in 2000 and 2005 by Mr Jock Ainsworth were mistakes or oversights. Although Jock Ainsworth's execution of those returns is anomalous, it does not cause me to doubt the finding I have made to the effect that at all material times after 1999, Judy Roberts believed that she was the sole trustee, appointor and guardian of the JEMA Trust.
25 That finding is further reinforced by another document tendered in evidence being a document apparently submitted to Centrelink in respect of the JEMA Trust in or about June 2005. The document is a standard form which seeks a raft of different information relating to the JEMA Trust. One of the questions posed in the form seeks the identification of the trustee and the appointor. Ms Roberts is the sole person identified as trustee and appointor in the answer to that question on the form.
26 The form also seeks the identification of the person who has the power to:
The only person identified in answer to that question is Ms Roberts. Another question on the form asks whether the person named in answer to the earlier question can exercise that control independently. That question was answered affirmatively, and the person named, and the only person named as having the independent power to exercise control over the JEMA Trust, was Ms Roberts. The form was signed by Ms Roberts for and on behalf of Jock and Ellen Ainsworth.
27 The terms of the form, and the answers given, are clear and unequivocal. Those terms indicate quite clearly, and I find, that Ms Roberts knew and understood, when she executed that form in June 2005, that she was the sole trustee, appointor and guardian of the JEMA Trust.
28 Following submission of the form to Centrelink, Centrelink responded inquiring as to the date upon which Ms Roberts became the appointor in place of Jock Ainsworth and seeking evidence confirming that date. That query was directed to the accountants acting on behalf of Jock and Ellen Ainsworth. It seems from the evidence of the representatives of that accounting firm that the letter prompted them to make inquiries of Ms Roberts in relation to the changes made in 1999, which in turn prompted her to request copies of documents which might be held by the accounting firm in that regard. It further seems that only the unsigned, handwritten resolution prepared by Mr Pascoe could be found at that time, and that Ms Roberts was advised of this.
29 At all events, the accountants responded to the query from Centrelink in the following terms:
In regards to your query about the change in appointorship, John Ainsworth was the original appointor and was replaced by Judith Roberts on 11 May 1999. The only evidence we have available on file is a file note re instructions to the solicitor about the change and I am assuming that the deed of variation is being held by our clients. I will try and endeavour to obtain a copy from them and forward as soon as possible.
30 It seems likely that the letter was written under the false impression that a solicitor had been instructed to prepare a deed of variation, whereas, in fact, Mr Pascoe had prepared the relevant resolution himself. The letter to Centrelink is dated 20 September 2005. It is therefore clear from the evidence that Ms Roberts had her attention drawn to her various capacities under the JEMA Trust both in June 2005 and again in the latter part of 2005. There is no suggestion in the evidence that at any point in her dealings with the accountants in relation to that issue it was ever suggested that she was not the sole trustee, appointor and guardian of the JEMA Trust, or that any other person, particularly Mr Jock Ainsworth, shared any of those positions with her.
31 Ellen Ainsworth had moved from the Chippendale Cherry Farm to the Bethel Village Hostel in Albany (sometimes referred to as Bethel Village) at some time prior to 2005. In the latter part of 2005, Jock Ainsworth decided that he also wanted to leave the farm and join his wife at the nursing home. He understood that funds may be required by way of a deposit in order to secure his entry into Bethel Village and had proposed the sale of the cherry farm in order to realise those funds. In response to those suggestions, Ms Roberts had indicated her desire to purchase the farm.
32 It was in that context that arrangements were made for a meeting of all members of the family, other than Ellen Ainsworth, on Sunday, 18 December 2005. The meeting was held in the kitchen of the house situated on the cherry farm. Jock Ainsworth confirmed that he wanted to sell the farm and move into Bethel Village in order to be with his wife. Judy Roberts produced two letters from real estate agents giving a market appraisal of the property. She indicated that she had also received a third valuation, but did not have it with her. The group worked out the average of the three figures given to Judy as the value of the farm. That average was $658,000. It was agreed that Judy Roberts could purchase the farm for that sum.
33 It was further agreed that the proceeds of sale should be split equally between the seven family members, who were, of course, also prospective beneficiaries under the Property Trust which owned the land (being $94,000 each). However, Jock Ainsworth advised the meeting that his and Ellen Ainsworth's share of the proceeds of sale could be regarded as a loan to Judy Roberts, but that he wanted to be able to have access to the loan funds if and when he needed the money. That arrangement was agreed by all present.
34 There was also discussion about the sale of Jock Ainsworth's car. Judy Roberts indicated that she also wished to purchase that vehicle, and had obtained a price from 'the red book' of $11,000. It was agreed between Jock Ainsworth and Judy Roberts that she would purchase his car for the sum of $11,000. The evidence does not make clear precisely when Judy Roberts took possession of the car, but it seems a fair inference that it was at or around the time of this meeting.
The meeting with Debbie Keillor - January 2006
35 On 18 January 2006, Eric Ainsworth and Judy Roberts attended the accountant's office in Kojonup and spoke with Ms Debbie Keillor, who had done some of the accounting work for the family in the past. They told her what had been agreed at the family meeting on 18 December 2005. The terms of the loan from Jock and Ellen Ainsworth to Judy Roberts were discussed. Ms Keillor advised Ms Roberts that she should be aware that if a substantial bond was required from the nursing home as a condition of admitting Jock Ainsworth, she could be required to repay that loan within a very short period of time. Ms Roberts responded to her that there would be no difficulty in that regard. It was also confirmed that the loan was to be interest free.
36 There was significant discussion about the revenue implications of the proposed transaction, including stamp duty and capital gains implications. Ms Keillor advised that there could be significant savings in both areas, depending on how the transaction was structured.
37 Following the meeting, Ms Keillor gave further consideration to the issues which had been raised. Over the next few days she prepared a document entitled:
Notes from meeting Eric Ainsworth, Judy Roberts and Debbie Keillor held at PHBB Wednesday 17 January 2006 Re Family Agreement re J & E M Ainsworth.
38 Ms Keillor agrees that the heading to the note erroneously suggests that the meeting with Eric Ainsworth and Judy Roberts took place on 17 January, when in fact the meeting took place on 18 January. However, nothing turns on this. The note concludes with a reference to it having been prepared by Ms Keillor on 20 January 2006. The note was collected by Ms Roberts from the accountant's office in Kojonup on that day.
39 The note records the essential terms of the agreement which had been reached at the meeting in December 2005. It includes the following:
The proceeds of the farm/business are to be divided into shares of $94,000 being the 5 adult children and their parents Jock and Ellen. Judy is to pay Eric, Kaye, Leslie and Joan Marshall their portions of $94,000 on transfer of the land and business. The parents' share of $94,000 each ($188,000) will be lent to Judy as an interest free loan.
Any amounts of capital required by the parents that cannot be paid from pension income and any funds left over from the cherry farm operations for 2005/06 season will need to be paid by Judy as repayments off this loan.
40 The note goes on to provide advice as to a way in which the transaction could be structured to minimise capital gains tax, stamp duty and possible loss of Centrelink entitlements. The note advises that:
A number of documents have to be prepared to enable the 'sale' of the land and business via passing over control of Trusts.
41 The note goes on to identify three categories of documents required by reference to the 'Land', the 'Cherry Business', and the 'Loan Agreement'. In relation to the land, the note advises that a deed of variation will be required to retire four children as appointors and guardians and leave Judy in as sole appointor and guardian, and that a further deed of variation will be required to retire Mr Eric Ainsworth as joint trustee so as to leave Judy Roberts as sole trustee. The note further advises that a land transfer form transferring the land from Judy Roberts and Eric Ainsworth to Judy Roberts only would also be required.
42 In relation to the cherry business, the note advises that the business is owned by the JEMA Trust. It goes on to record the following:
43 The note also records that a loan agreement for the $188,000 being lent to Judy Roberts by her parents will need to be prepared.
44 Early the following week, Judy Roberts telephoned Ms Keillor to advise that she had spoken to the other members of her family and that everybody agreed with the proposals in the note. Ms Keillor then caused the note which she had prepared to be modified so as to take the form of a record of the agreement which had been reached. To that end, she altered the heading so that it read:
Family Agreement re J & E M Ainsworth - 17 January 2006
(perpetuating the erroneous reference to date) and made provision for execution of the document by each of the five children. She made arrangements for Ms Roberts to collect the modified version of the notes from her office. It was also agreed that Ms Keillor would give instructions to a solicitor with respect to the preparation of the necessary documents.
45 In later proceedings in the Magistrates Court relating to the solicitors fees, there was an issue as to precisely who had authorised Ms Keillor to instruct the solicitor. It is unnecessary for me to enter upon that controversy. It is clear that when Ms Keillor instructed the solicitor, she was acting on behalf of the plaintiffs. It is less clear that she was also acting for Ms Roberts, and I make no finding in that regard.
46 For the purposes of preparing the letter of instruction to the solicitor, Ms Keillor undertook further research in relation to the affairs of the trusts. She undertook that research by looking at the client files held by the accounting firm. Following that research, she concluded that her earlier view that Jock Ainsworth was the appointer and guardian of the JEMA Trust was wrong. She came to that conclusion because of the handwritten but unsigned resolution in John Pascoe's handwriting which she saw on the file, and the annual resolutions relating to the distribution of income of the JEMA Trust signed each year by Judy Roberts in her capacity as guardian.
47 The solicitor recommended by Ms Keillor for the preparation of the documents was Mr Michael Rogers. Mr Rogers practises in Kalamunda. Ms Keillor sent instructions to Mr Rogers by a letter dated 24 January 2006. The letter instructs Mr Rogers to prepare a deed of variation changing the appointors and guardians of the Property Trust, and a deed of variation changing the trustees of the Property Trust, as recorded in the note. The letter also instructs Mr Rogers to prepare a loan agreement dealing with the loan of $188,000 from Jock Ainsworth to Ms Roberts. The letter also instructs Mr Rogers to prepare a transfer of land in relation to the cherry farm, transferring the land to Judy Roberts as sole owner. The letter makes no reference to the JEMA Trust. Ms Keillor said in evidence that this was because, by the time she had written the letter, she had concluded that no changes were necessary in relation to the JEMA Trust. She also said in evidence that at about this time, she spoke by telephone to Ms Roberts and advised her that because she was already the appointor and guardian of the JEMA Trust, there would be no need for documents to be prepared in relation to the JEMA Trust. There is no suggestion that Ms Roberts disagreed with that proposal. She also said that she advised Ms Roberts' accountant, Ms Carol Cavill, of this at about the same time.
48 Ms Roberts denies that any conversation with Ms Keillor to this effect took place. I have no hesitation in preferring the evidence of Ms Keillor in this regard. Ms Keillor impressed me as a conscientious, reliable and impartial witness whose evidence was entirely consistent with the contemporaneous documents. I have already mentioned a number of my concerns in relation to the evidence given by Ms Roberts. I will refer to other concerns later in these reasons. In general, I gained the clear impression that the evidence of Ms Roberts was designed to promote her case at the expense of the truth. In a number of instances it is inconsistent with the contemporaneous documents or the established sequence of events. To give another example in addition to those I have already given, Ms Roberts asserted in evidence that in relation to the JEMA Trust, she:
... was always waiting and wondering why I hadn't got the deed of variation signed by my father to sign him out of that trust and me in.
However, as I will show, despite many communications between the parties and their solicitors after disputes arose, the first time any complaint was made by or on behalf of Ms Roberts with respect to the lack of a document appointing her as sole appointor and guardian of the JEMA Trust was in the sixth version of the defence to these proceedings, filed in November 2006. No request or demand was made for the execution of such a document prior to the filing of that defence. Further, there is no reason why control of the JEMA Trust would be of any particular significance to Ms Roberts after she acquired control of the land, because the only asset of the JEMA Trust was the cherry business, which she acknowledged could not be separated from the land. As the business had no value or existence separate from the land, once Ms Roberts acquired the land, control of the JEMA Trust would be of no significance to her. There is a clear inference, from the sequence of events which I will relate, that the lack of any document prepared and executed in 2006 recording any alteration to the JEMA Trust was an issue seized upon by Ms Roberts' solicitor at a point long after these proceedings had been commenced, and did not occupy Ms Roberts' mind at any material time after she had been told by Ms Keillor that no document to that effect was necessary. Ms Roberts acquiesced in the failure to prepare and execute such a document by taking no point about it when the various other documents required to give effect to the agreement were prepared and executed.
49 There was a meeting of the family members other than Ellen Ainsworth at the cherry farm on 6 February 2006. Each of the children present at that meeting signed the document which had been prepared by Ms Keillor (the Family Agreement). Mr Ainsworth was ready and willing to sign the document, but was told that his signature was unnecessary.
50 Mr Rogers prepared documents in accordance with the instructions he had received from Ms Keillor. They were:
51 These documents were executed by the relevant parties on or about 16 or 17 February 2006. Ms Roberts was instrumental in procuring their execution by all relevant parties. They were then returned to Mr Rogers, who also held the duplicate certificate of title relating to the cherry farm. When he received the documents, Mr Rogers considered that he was holding them in escrow, subject to completion of the transaction by Judy Roberts paying $94,000 to each of her siblings. That belief is entirely consistent with the essential nature of the transaction and the events both before and after execution of the documents.
52 It is a fair inference from the terms of the loan document, which records an advance in early March 2006, that it was then the contemplation of the parties that settlement of the transaction would occur around then. That inference is supported by the evidence of Mr Rogers to the effect that on 22 February 2006, Ms Roberts telephoned him and asked for him to arrange for the documents to be stamped as a matter of urgency.
53 However, settlement, in the sense of the payment of $94,000 by Ms Roberts to each of her siblings in return for the documents held by Mr Rogers in escrow, did not take place in either March or April for reasons which are unexplained on the evidence. On 9 May 2006, Mr Rogers wrote to the National Australia Bank (who were providing Ms Roberts with finance for the transaction) advising that he was in a position to deliver the executed transfer of land and duplicate certificate of title against receipt of bank cheques payable to each of the children (other than Judy Roberts) in an amount of $94,000 each. On the same date he wrote in similar terms to Ms Keillor.
54 It seems that it was about this time, or perhaps a little earlier, that it became known by the members of the family that a substantial sum was required as and by way of accommodation bond or deposit in order for Mr Jock Ainsworth to enter Bethel Village. This became the subject of discussion amongst the members of the family. Ms Roberts told at least some of her siblings that they would have to contribute their share of the amount required, notwithstanding the earlier understanding to the effect that the funds required would, if necessary, be paid by Judy Roberts as and by way of partial repayment of the loan from her father. Ms Roberts also stated to at least some of her siblings that she had paid $50,000 to Bethel Village on account of her father. That statement was false.
55 The refusal of Judy Roberts to pay the funds necessary to enable Jock Ainsworth to enter Bethel Village, or to complete the transaction for the acquisition of the farm, caused consternation within the other members of her family. By a letter dated 16 May 2006 (sent by facsimile), Jock Ainsworth wrote to Judy Roberts insisting that she attend a meeting at the accountant's office at Kojonup at 10 am on 23 May 2006. She was asked to bring all papers and cash belonging to Chippendale Cherry Farm and Mr Ainsworth. On 19 May 2006, Ms Keillor sent a facsimile to Ms Roberts seeking her confirmation that she would be attending the meeting to be held on 23 May 2006. That facsimile lists the documents that were required to be presented by her to the meeting and further indicates that it was 'essential that a proposal to meet the fees for Bethel Village be sorted out'.
56 Ms Roberts did not attend the meeting on 23 May 2006. However, Jock Ainsworth and the other members of the family did attend, either physically or by telephone. It was agreed that Ms Keillor, who was also present, would prepare letters demanding completion of the transaction and the payment of the loan agreement. Those letters were prepared and signed by Jock Ainsworth on 23 May 2006. Both letters are addressed from him to Judy Roberts. The first letter demands payment of the $94,000 due to each of Ms Roberts' siblings by no later than 7 June 2006, and repayment of the loan of $188,000 not later than 30 June 2006, together with payment of $11,000 for the car, to be paid not later than 31 May 2006. The letter concludes:
Can you please let me know within 7 days whether you intend to go ahead with the original deal.
The second letter is a formal demand for payment of the loan amount of $188,000 by 30 June 2006, so as to enable Mr Jock Ainsworth to pay the Bethel Village entry bond.
57 Ms Roberts' witness statement, which she adopted as her evidence-in-chief, records that she received the letters by facsimile on 23 May 2006.
58 On 24 May 2006, Ms Roberts attended unexpectedly at the Kalamunda offices of Mr Rogers. She told the receptionist/secretary (Ms Moseley) that she would like to pay her accounts and collect her documents, or words to that effect. While her file was located, she wrote cheques for accounts which had been issued (but which did not include work then in progress). While her files were being retrieved, she stated to Ms Moseley that she needed the title and transfer documents from the file because she was going to the Titles Office. In response to a query from Ms Moseley, Ms Roberts stated that the matter was all completed. In reliance upon that false assertion, Ms Moseley took a photocopy of the transfer form and enabled Ms Roberts to take possession of the duplicate certificate of title and original transfer form. Ms Roberts acknowledged in her evidence that she knew that she was not entitled to become the sole registered proprietor of the land until she had paid her siblings. She must therefore have known that her statement to Ms Moseley that the matter was complete, was a lie. This is another reason why I doubt much of the evidence given by Ms Roberts.
59 Mr Rogers had overheard these events from his office. After he completed the task in which he was engaged, he left his office and attended the reception area. He asked Ms Roberts to accompany him to his office which she did. He asked her to return the title and the transfer, but she refused. He then telephoned Ms Keillor and advised her of what had occurred. Ms Keillor then sent the letters of 23 May 2006 from Jock Ainsworth to Ms Roberts to Mr Rogers' office by facsimile. Mr Rogers then provided the facsimile versions of those letters to Ms Roberts. After she read the letters (again - as she had seen them previously), she told Mr Rogers that she would pay the amount due to her brothers and sisters when she could, and that in the case of Eric Ainsworth, there would be an offsetting amount to be deducted from his payment. Ms Roberts also told Mr Rogers that she was going to the Titles Office to lodge the documents which she refused to return to him.
60 In evidence Ms Roberts denied that Mr Rogers had requested her to return the executed transfer and duplicate certificate of title. I have no hesitation in preferring the evidence of Mr Rogers on that subject. The correspondence of 9 May 2006 to which I have referred makes clear that he was holding the transfer and duplicate certificate of title on the basis that they would not be released unless and until bank cheques in the amount of $94,000 in favour of each of Ms Roberts' siblings were received. His evidence of the conversation which took place in his office on 24 May 2006 is entirely consistent with that position and inherently plausible. It is inherently implausible to assert, as Ms Roberts did in evidence, that a solicitor in the position in which Mr Rogers found himself on 24 May 2006 would not have demanded the return of the documents which had been obtained by Ms Roberts as a result of a false representation to Ms Moseley.
61 The express terms of the family agreement signed by Ms Roberts and her siblings which I have set out above ([39] - [44] and [49]) made it clear that the payments to the siblings were to be made 'on transfer of the land and business'. It is clear from the evidence that upon receipt of the letters of 23 May 2006, Ms Roberts decided to take matters into her own hands, contrary to the express terms of the agreement which she had signed, and the understanding of all parties. As I have mentioned, when asked in cross-examination whether she was only entitled to get the certificate of title once she had paid the money, she agreed.
62 Ms Roberts went from Mr Rogers' office to the Titles Office, where she lodged the transfer and duplicate certificate of title, and thereby obtained registration as the sole proprietor of the land on which the cherry farm is situated on 24 May 2006.
63 There are other aspects of the evidence given by Ms Roberts which reinforce my adverse conclusions as to her credibility which it is appropriate to mention at this point. In her written statement, which she adopted as her examination-in-chief, she clearly and unequivocally states that she received the letters of 23 May 2006 by facsimile on that date. However, in her oral evidence, she denied receipt of the letters prior to attending Mr Rogers' office. I reject that oral evidence. It seems to me to be much more likely that Ms Roberts' attendance at Mr Rogers' office was prompted by her receipt of the letters of 23 May 2006.
64 Further, in her written statement, Ms Roberts states that it was always her intention to deduct from the amount of $94,000 due to Mr Eric Ainsworth the amount which he owed to her for the loan which she says she made to him in 1992. However, in her oral evidence, she stated that it was initially her intention to pay him the amount of $94,000 in full. When the contradiction in her testimony was pointed out to her, she refused to acknowledge it. Ms Roberts also said in evidence that it was always her intention to perform the family agreement, and that she was always ready, willing and able to perform that agreement. However, as will be seen, that evidence is entirely inconsistent with letters written by solicitors on her instructions and the first five versions of the defence which she filed in these proceedings, in which she asserted that the agreement was unenforceable, and resisted its performance.
65 On 31 May 2006 a solicitor acting on behalf of Ms Roberts wrote to Mr Ainsworth in reply to his letters of 23 May 2006. The letter is headed 'Without Prejudice'. I received the letter into evidence over objection because it is clear from the evidence that the letter was not written as part of a genuine attempt to compromise an existing dispute. Rather, the letter was written in a circumstance in which Ms Roberts had received a demand that she perform the terms of her agreement, and had then breached her agreement by obtaining registration of title without prior payment. As will be seen, the terms of the letter do not propose a compromise, or any process of negotiation towards a compromise but rather, maintain Ms Roberts' refusal to perform her agreement according to its terms. (see Burg Design Pty Ltd v Wolki [1999] FCA 388; (1999) 162 ALR 639; Bentley v Nelson [1963] WAR 89 at [93] and, particularly in relation to refusal to perform, Nicholson v Southern Star Fire Insurance Co [1927] 28 SR (NSW) 124)
66 After some introductory paragraphs, the letter commences with an assertion that the 'Family Agreement' is unenforceable and states that Ms Roberts will resist all attempts to have the agreement enforced. The letter also asserts that the letters of 23 May 2006 constituted a repudiation of the agreement, which was accepted by the letter of 31 May 2006. The letter further asserts that because Ms Roberts has obtained registration of title, '[t]he question of ownership of the property is no longer a live one'.
67 The letter goes on to assert that Ms Roberts will pay an amount to her sisters on condition that they each sign a Release and Discharge document, and on the further condition that an amount equivalent to their share of the amount required by Bethel Village is deducted from the amount payable to them. The letter goes on to assert that in the case of Ms Roberts' brother, Eric Ainsworth, in addition to the deduction of his share of the amount due to Bethel Village, there is a further amount to be deducted which will leave Ms Roberts 'in credit'. These assertions, viewed in context, are not an attempt to compromise a dispute, but an emphatic statement to the effect that Ms Roberts would not perform her agreement according to its terms.
68 Solicitors acting on behalf of the various plaintiffs replied to the letter of 31 May 2006 on their behalf. In that letter they assert that Ms Roberts' breach of the agreement, and the repudiation of that agreement in the letter of 31 May 2006 both constitute repudiation of the agreement by Ms Roberts, which repudiation was accepted as bringing the agreement to an end. The letter goes on to demand execution of an instrument transferring the land back to Ms Roberts and Mr Eric Ainsworth as joint tenants in their capacities as trustees of the Property Trust. The letter advises that in the event no such transfer is provided, proceedings will be commenced.
69 The solicitor acting on behalf of Ms Roberts replied to that letter by letter dated 26 June 2006. That letter asserts, quite inconsistently, that Ms Roberts had always been ready, willing and able to perform the agreement, but that the agreement would only be performed on terms whereby amounts were deducted from each of the payments to be made to reflect the amount required to enable Mr Jock Ainsworth to enter Bethel Village.
70 These proceedings were then commenced. In the meantime, a caveat had been lodged to protect the claimed interest in the land of the first plaintiff. The statement of claim was filed on 6 July 2006. It makes no reference to the JEMA Trust. It pleads the execution of the various documents which were prepared and executed in February 2006, and alleges repudiation of the agreement by Ms Roberts, which repudiation had been accepted by the plaintiffs.
71 The first version of the defence is dated 20 July 2006. It asserts that the agreement between the parties was an illegal attempt to avoid revenue obligations and a possible reduction of pension income, and was thereby unenforceable. The defence further pleads that the documents prepared and executed in February 2006 were prepared and executed in furtherance of the illegal scheme.
72 The second version of the defence, contained in a minute dated 5 September 2006, was tendered in evidence. It asserts that the documents executed in February 2006 did not transfer or vest the legal and beneficial ownership of the land and the business in Ms Roberts, but in that context, makes no reference to the JEMA Trust or to any additional document having been required. This version of the defence repeats the earlier plea of illegality and unenforceability. The defence also asserts that at the time she executed the Family Agreement, Ms Roberts was acting under the undue influence of Eric Ainsworth and Debbie Keillor.
73 A third version of the defence, contained in a minute dated 14 September 2006, was also tendered in evidence. Its material provisions are similar to the second version.
74 The fourth version of the defence, contained in a minute dated 26 September 2006, was also tendered in evidence. Like the earlier versions, it asserts that the documents prepared and executed in February 2006 were in effect to vest the legal and beneficial ownership of the land and the business in the defendant. In that context, the defendant expressly pleads that the Family Agreement provided for the preparation of the documents set out in the statement of claim (which did not include any reference to any documents relating to the JEMA Trust). This version of the defence also repeats allegations of illegality, unenforceability, and undue influence.
75 The fifth version of the defence is contained in a minute dated 10 October 2006, which was also tendered in evidence. Its material provisions are similar to the fourth version of the defence.
76 The sixth version of the defence is contained in a minute filed on 13 November 2006. In this version, it is asserted that Jock Ainsworth is the guardian and appointor of the JEMA Trust. It alleges, for the first time, that the Family Agreement contained a term requiring a deed of variation retiring Jock Ainsworth as appointor and guardian, and leaving Ms Roberts as sole trustee, guardian and appointor of the JEMA Trust. Further, the allegations of illegality, unenforceability and undue influence are withdrawn, and it is asserted that upon being appointed sole guardian and appointor of the JEMA Trust, Ms Roberts is ready and willing to pay to each of her sisters an amount of $94,000 and to her brother, such sum as may be found to be due and payable to him.
77 In summary, there are in evidence five versions of the defence, filed over many months, in which no reference whatever is made to any requirement for a document relating to the role of appointor and guardian of the JEMA Trust. In each of those five versions, Ms Roberts asserted that the Family Agreement was unenforceable for a variety of reasons. It was not until the sixth version of the defence was produced that any reference was made (in any of the dealings between these parties since 24 January 2006) to any suggested requirement that a document was required retiring Mr Jock Ainsworth from a position as appointor and guardian of the JEMA Trust. As I have already mentioned, this sequence of events gives rise to a clear inference, which I draw, to the effect that there was never any live issue as between the parties in relation to the retirement of Mr Jock Ainsworth as appointor and guardian of the JEMA Trust, because Ms Roberts was at all material times aware that she was the sole appointor and guardian of the JEMA Trust. I conclude that the issue was only raised as a result of legal advice given to Ms Roberts well after these proceedings were commenced.
78 The evidence of Mr Eric Ainsworth was to the effect that following a conversation with a guest at a farmstay that he was operating, he discussed the prospect of investing in shares with Judy Roberts. In early 1992, Ms Roberts said to him that she wanted to invest $25,000 in conjunction with him, and that whatever profits were derived would be split equally. She further stated to Mr Eric Ainsworth that she did not want a paper trail relating to the investment, because she did not want her husband to know about it.
79 Documentary evidence records payment of $25,000 from an entity associated with Mr Eric Ainsworth to a firm of stockbrokers in April 1992. There is no direct documentary evidence of any payment having been made by Ms Roberts to either Mr Eric Ainsworth or any entity associated with him, although there are journal entries in the ledgers of an entity associated with him, which record such a payment.
80 The evidence establishes that shares were bought and sold using the funds which had been contributed by Mr Eric Ainsworth and Ms Roberts. The trading was not particularly profitable. Prior to the year 2000, any funds received as the proceeds of sale of shares were reinvested in other shares. However, in 2000 it was decided to split the proceeds received from the sale of shares in a company known as Plat Gold. Banking records establish that half of the proceeds of sale of those shares, being an amount of $12,603.37, was paid to Ms Roberts by cheque dated 7 February 2000 drawn on the family account of Mr Eric Ainsworth.
81 Further share trading with the funds which had been jointly contributed occurred during 2000 and 2001. As a result of that trading, 1,211.5 shares in a company known as Gabriel Resources were held on behalf of Ms Roberts. Those shares were sold in October 2006, realising an amount of $6,550. These proceedings had been commenced by then. Mr Ainsworth states in evidence that he holds that amount to the credit of Ms Roberts, pending the resolution of the dispute, and the striking of a balance of account as between him and her.
82 Mr Ainsworth emphatically denies that there was ever any discussion between him and Ms Roberts relating to her advancing money to him, and that all their discussions related to a joint share trading fund.
83 The evidence of Mr Eric Ainsworth is corroborated by the documentary evidence to which I have referred, and the evidence of Ms Pitt to the effect that many years ago, Ms Roberts told her that she and Eric were going to put money in shares together, and on a later occasion, that she had invested $25,000 into shares. She can also recall discussions with Judy Roberts relating to Plat Gold and Gabriel Resources. The evidence of Mr Eric Ainsworth is also corroborated by his daughter-in-law, Alethea Ainsworth, who confirms undertaking share transactions on behalf of Ms Roberts on the instructions of her father-in-law, and also recalls discussing those transactions with Ms Roberts. Mr Lionel Ainsworth, who is the husband of Alethea Ainsworth and the son of Eric Ainsworth, also gave evidence to the effect that he recalled hearing a conversation between his father and Ms Roberts, to the effect that they would each put in $25,000 to invest in shares and share the proceeds of their investment.
84 This evidence is in turn corroborated by the evidence of Ms Keillor in respect of entries into the accounts of the Ainsworth Family Trust, which is a trust associated with the family of Mr Eric Ainsworth. Her evidence was to the effect that the journal entries in respect of the Ainsworth Family Trust showed the receipt of two amounts of $25,000 during the year ended 30 June 1992. She received instructions to the effect that each of those amounts was a contribution to a share trading fund, in which the family of Mr Eric Ainsworth, and Ms Judy Roberts would have an equal interest. The evidence of Ms Keillor was to the effect that she prepared the accounts in order to give effect to those instructions.
85 By contrast, the evidence of Ms Roberts is to the effect that in early 1992 she was approached by her brother who told her that he needed to borrow $25,000 which he would repay with 10% interest per annum. She denies the evidence that was given in relation to share trading, and further denies receipt of the amount of $12,603 in the year 2000. However, the documentary evidence clearly establishes that such a payment was made.
86 The overwhelming weight of the evidence on this subject supports the evidence given by Mr Eric Ainsworth. The evidence given by Ms Roberts is not supported by any evidence of any kind - whether documentary or otherwise and I reject it.
87 The pleadings in this case have generally served to obscure rather than elucidate the real issues in the case. A number of the issues raised in those pleadings have been obviated by the findings of fact that I have made. It is therefore unnecessary and unhelpful to condescend to a detailed analysis of the issues raised on the pleadings. The essential issues in the case (leaving aside the counterclaim) concern the terms of the agreement between the parties, whether the plaintiffs were ready, willing and able to perform their obligations under the agreement, and whether Ms Roberts repudiated or renounced the agreement.
88 On the findings of fact which I have made, the terms of the agreement between the parties are, I think, relatively clear. They are set out in the document originally entitled 'Notes from meeting ...' and later entitled 'Family Agreement ...' (the Family Agreement) which was in its first form orally agreed and in its later form executed by all the children, and accepted by Mr Jock Ainsworth by his conduct and in executing various documents pursuant to its terms. No point has been taken by either party in relation to the form of the agreement (that is, insufficiency of writing) under either the Statute of Frauds (1677) (Imp) or the Property Law Act 1969 (WA).
89 Under the terms of that agreement, documents were to be prepared retiring Jock Ainsworth as appointor and guardian of the JEMA Trust. However, the plaintiffs assert that this term was varied in the course of the discussion between Ms Keillor and Ms Roberts on or about 24 January 2006, whereby it was agreed that such a provision was unnecessary because Ms Roberts was already the sole appointor and guardian of the JEMA Trust. I have found that such a conversation took place. It is common ground that Ms Keillor was acting as agent for and on behalf of the plaintiffs at the time of that conversation. The clear tenor and purport of the conversation was to alter the previous agreement to the effect that a document retiring Jock Ainsworth as appointor and guardian of the JEMA Trust was required. The fact that it was intended by both parties to the conversation to have this consequence is clear from the subsequent events, in which Ms Keillor, acting at least on behalf of all plaintiffs, gave instructions to Mr Rogers to prepare documents which omitted reference to any document relating to the JEMA Trust, and, on the part of Ms Roberts, by taking no point whatever in relation to the omission of such a document until the sixth version of her defence was filed in these proceedings in November 2006.
90 On the findings of fact I have made, the sequence of events was (in very general terms) 'an oral agreement on 18 December 2005 for the sale of the land; followed by an oral agreement made between 20 and 24 January 2006 in the terms of the document entitled "Notes from meeting ..." to restructure the agreement so as to achieve the objectives of the parties by alteration of the trusts,' followed by an oral variation to that agreement on 24 January 2006 and, finally, followed by the execution of a written agreement in terms of the document entitled 'Family Agreement ...' on 6 February 2006. The last document contains provisions relating to the JEMA Trust which I have found were agreed to be deleted on 24 January 2006.
91 There is no evidence to suggest that when the parties executed the documents entitled 'Family Agreement ...' on 6 February 2006, they intended it to vary their antecedent oral agreement reached on 24 January 2006, which had excluded terms relating to the JEMA Trust. It follows that when the parties signed the document entitled 'Family Agreement ...' on 6 February 2006, they were acting under the common mistake that the document accurately embodied their antecedent oral agreement. This is one of the classic circumstances in which rectification can be ordered, so as to bring the executed document into line with the earlier oral agreement - see, for example, Maralinga Pty Ltd v Major Enterprises Pty Ltd [1973] HCA 23; (1973) 128 CLR 336, 350; Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450, 461.
92 It is trite to observe that courts do not rectify agreements, they rectify documents which purport to record agreements but do so erroneously (MacKenzie v Coulson (1869) LR 8 Eq 368, 375). The plaintiffs do not seek rectification of the document entitled 'Family Agreement ...' in this case, but there is no need for them to do so, because no point is taken in relation to the form of the agreement. Accordingly, the court can and should proceed on the basis of the true agreement between the parties, rather than by reference to those terms erroneously included in the documents signed on 6 February 2006 as a result of common mistake.
93 Accordingly, I find that the terms of the agreement between the parties were the written terms contained in the document ultimately headed 'Family Agreement ...', varied by the omission of the provisions in that document relating to the JEMA Trust.
94 On this view of the terms of the agreement between the parties, it does not matter whether or not, as a matter of law, the events which occurred in 1999 were effective to retire Mr Jock Ainsworth as the appointor and guardian of the JEMA Trust, because any provision in the Family Agreement relating to that issue was deleted by the variation to which I have referred. However, as the issue was fully argued before me, it is appropriate that I express my view upon it.
95 Submissions filed on behalf of Ms Roberts place emphasis upon the word 'or' which follows the name 'John Ainsworth' in the description of the guardian and appointor in the Schedule to the JEMA Trust. It is submitted that because that word can be construed either disjunctively or conjunctively, depending upon its context, in this context it should be construed conjunctively as including both Mr Jock Ainsworth, and the person he appointed to be appointor and guardian, namely, Ms Roberts.
96 In support of this submission, reliance is placed on the many authorities dealing with the conjunctive or disjunctive construction which might be placed upon the word 'or' in a wide variety of different contexts, including various statutory provisions. It is unnecessary to refer to those authorities because, with respect, they appear to me to miss the point.
97 Counsel for the plaintiffs submitted, correctly in my view, that the answer to this question is to be found in cl 1 of the Deed of Settlement creating the JEMA Trust, which defines each of the words 'Guardian' and 'Appointor' to 'mean successively the person or persons successively named or described as such in the Schedule'. When regard is had to the terms of the Schedule, it is clear that the word 'successively' in this context bears its natural and ordinary meaning of 'following in order' with each person listed in the Schedule succeeding, or taking the place of the person previously named. In the Schedule, Mr John Ainsworth is the first person named as each of appointor and guardian. In each category, the next person named is 'such other person or persons as the first named person may' appoint. Accordingly, when such a person or persons is appointed, he, she or they succeed, or take the place of John (or Jock) Ainsworth. So, when on 11 May 1999 Jock Ainsworth appointed Judy Roberts as appointor and guardian of the JEMA Trust, she succeeded (or replaced) him in those capacities, and he ceased to hold those functions or responsibilities.
98 This view of the effect of the changes made in 1999 is consistent with all subsequent conduct and actions of the parties, other than Mr Jock Ainsworth's execution of the tax returns for the JEMA Trust for the years 2000 and 2005, which I consider to be explicable by reference to mistake.
99 For these reasons I conclude that Ms Roberts has been the sole trustee, appointor and guardian of the JEMA Trust since 11 May 1999. It follows that if the terms of the Family Agreement relating to the retirement of Jock Ainsworth as appointor and guardian of that JEMA Trust had not been deleted by agreement, they would in any event have been of no moment as they were only included because of a mistake as to the true position in relation to the JEMA Trust. This is a different mistake to the mistake which I have found in relation to the provisions of the document itself, because it goes not to the terms of the document, but to the substratum of the agreement. It is unnecessary to delve in detail into the question of whether the applicable branch of the doctrine of mistake would be that known as mutual mistake, or that known as unilateral mistake, although in light of my finding that Ms Roberts was at all times aware that she was the sole trustee, appointor and guardian of the JEMA Trust, unilateral mistake would probably have been the more appropriate category. At all events, I reiterate that on the view which I take of the effect of the conversation between Ms Keillor and Ms Roberts on 24 January 2006, any term of the agreement relating to alterations to the JEMA Trust was agreed to be deleted.
100 Doing the best I can to put the assertions made in the defence into a recognisable legal framework, it seems that the allegations made in the pleading in respect of the failure to appoint Ms Roberts as the sole guardian and appointor of the JEMA Trust are said to go to the question of whether the plaintiffs were ready, willing and able to perform the agreement between the parties. The significance of the assertion of lack of readiness to perform was never developed in submissions on behalf of Ms Roberts. Presumably it is thought to lie in some proposition to the effect that because the plaintiffs were not ready, willing and able to perform, they were themselves in breach of the agreement, with the result that they cannot rely upon any renunciation or repudiation of the agreement by Ms Roberts.
101 Leaving to one side the question of whether that proposition could ever be made good, as a matter of law, there are a number of obvious flaws in the basic premise upon which the proposition depends.
102 The first and most obvious is my finding that the agreement was varied to delete any reference to the retirement of Jock Ainsworth as appointor and guardian of the JEMA Trust. As there was no provision in the agreement to that effect, it cannot be said that the plaintiffs were not ready, willing and able to perform their agreement by reason of the failure to produce a document in 2006 relating to the JEMA Trust. The second obvious flaw in the premise is that, as I have found, there was simply no issue at all between the parties in relation to the structure of the JEMA Trust until the sixth version of the defence was filed on behalf of Ms Roberts in November 2006. By their conduct in February 2006, the plaintiffs showed willingness to execute any and all documents that were necessary in order to give effect to their agreement with the defendant. In the absence of any demand by the defendant for a document relating to the position of appointor and guardian of the JEMA Trust, the failure of the plaintiffs to execute a document dealing with that topic in 2006 does not give rise to any conclusion to the effect that they were not ready, willing or able to perform their agreement.
103 The third obvious flaw in the premise upon which this proposition depends is my conclusion that Ms Roberts has, in any event, been the sole trustee, appointor and guardian of the JEMA Trust since 11 May 1999. Any further document on that topic would have been entirely unnecessary and superfluous. Accordingly, it can hardly be suggested that the failure of the plaintiffs to produce and execute a document which would have been entirely unnecessary and superfluous supports an inference that they were not ready, willing and able to perform their agreement.
104 Using the taxonomy adopted by the High Court in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61, the next question is whether Ms Roberts has renounced her agreement with the plaintiffs in the sense that she has evinced an intention no longer to be bound by the agreement or to fulfil it only in a manner substantially inconsistent with her obligations (see Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623 at 634), or has committed a breach of contract which justifies termination by the other party - described as a repudiatory breach (see Koompahtoo at [44]). A breach of contract will have this character if it is a breach of an essential term, or a sufficiently serious breach of a non-essential term (see Koompahtoo at [47] - [50]).
105 There are many cases dealing with the circumstances in which a party will be found to have evinced an intention no longer to be bound by the contract, or only willing to perform it in a manner substantially inconsistent with that party's obligations (sometimes described as anticipatory breach). The principles are well enunciated, and some of the older cases conveniently collected in Rigg v Lee Loy Seng [1987] WAR 333. If this case were at all marginal, it might be necessary or appropriate to refer to those authorities. However, on the facts which I have found, it is hard to imagine a clearer case of renunciation. The letter of 31 May 2006 written by a solicitor acting on behalf of Ms Roberts clearly and unequivocally denied the existence or enforceability of any agreement between the parties and foreshadowed resistance to any attempts to enforce the agreement. To the extent that it suggested payments might be made by Ms Roberts in the future, it was in terms that were substantially inconsistent with her obligations under the agreement.
106 That renunciation was accepted by the plaintiffs as having brought the agreement to an end by the letter which their solicitors sent prior to the commencement of these proceedings. In any event, the first five defences filed in these proceedings clearly renounced the obligation of Ms Roberts to perform her agreement and would, of themselves, have been quite sufficient to justify the plaintiffs treating the agreement as at an end (as they did in their pleading).
107 There are also many cases dealing with the classification of terms of an agreement as between essential and intermediate terms, and dealing with the breaches of those terms that will justify the other party in treating the agreement as at an end. Again, if this were a marginal case, it would be appropriate to refer to those cases. However, as with renunciation, there cannot be any significant doubt in relation to this issue, given the findings I have made.
108 It was an express term of the agreement between the parties that payment of the monies due from Ms Roberts would be made at the time the land was conveyed to her. This is, on any view, plainly an essential term of the agreement. By her conduct in expropriating the executed transfer of land form and the duplicate certificate of title from escrow without satisfying the condition to which their release was subject, lodging the transfer for registration, and thereafter refusing to reconvey title without making payment, she committed a serious breach of an essential term of the agreement. In my view, there cannot be any doubt that such a breach entitles the plaintiffs to regard the agreement as at an end.
109 The claim relating to the car can be quickly resolved. Ms Roberts accepts that she owes Jock Ainsworth $11,000 for the car and that it is appropriate for judgment to be entered in his favour in that amount.
110 The counterclaim can also be quickly disposed of by reference to the findings of fact which I have made. The premise upon which the counterclaim is made has not been made out on the evidence. There was no loan and there is no outstanding balance on any such loan. Mr Eric Ainsworth accepts that he holds monies on account of Ms Roberts, and is ready and willing to give credit for that amount when any balance of account as between them is struck at the completion of these proceedings.
111 For these reasons, the plaintiffs' claims should be allowed, and the counterclaim dismissed. I will invite submissions from the parties as to the precise forms of orders required to give effect to these conclusions. In relation to the substantive issue litigated, those orders will be designed to restore the parties, as nearly as possible, to the position in which they were before the agreement was entered into. There has been no claim for an account of profits or compensation, so the orders required will essentially relate to the restoration of the ownership structure which was in place prior to the agreement. In the case of Mr Jock Ainsworth, judgment will be entered in the sum of $11,000. The counterclaim will be dismissed.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : AINSWORTH -v- ROBERTS [2008] WASC 289 (S)
Practice and procedure - Costs - No reason to depart from the rule that costs follow the event
Supreme Court Act 1935 (WA), s 37
Defendant pay the plaintiffs' costs of the action and counterclaim, to be taxed
Ainsworth v Roberts [2008] WASC 289
1 MARTIN CJ: In these proceedings, I published reasons for my decision (Ainsworth v Roberts [2008] WASC 289) and entered judgment on 12 December 2008. I found in favour of the plaintiffs, and granted declaratory relief to the effect that by reason of the plaintiffs' acceptance of the defendant's renunciation of an agreement between her and the plaintiffs, the agreement was at an end. I made further declarations, and ordered the defendant to execute and deliver an instrument for the transfer of land in registrable form, for the purpose of restoring the parties to the position in which they were prior to entry into the agreement. I also found in favour of one of the plaintiffs on a claim for debt, and ordered the defendant to pay an amount of $11,000 together with interest on that amount. I also dismissed the defendant's counterclaim.
2 At the time reasons were published, counsel for the defendant foreshadowed that he wished to consider putting a submission to the effect that costs should not follow the event, and that some special costs orders should be made (ts 416 - 417). However, he indicated that he was unable to develop that submission on that occasion, and requested time to consider whether any such application would be made, and if so, to develop argument in support of it.
3 As I was then unable to see any basis upon which costs should not follow the event, I made a provisional order to the effect that the defendant pay the plaintiffs' costs of the action and the counterclaim, to be taxed, and including any reserved costs, but provisional in the sense that the order would not operate if, by 24 December 2008, the defendant had filed an application for some different costs order. On 23 December 2008, the defendant filed submissions in support of the orders which she seeks in relation to the costs of the substantive proceedings. The plaintiffs have filed written submissions in opposition to those orders. The parties have indicated they do not require an oral hearing in relation to the costs issues, and are content for me to determine the matter on the basis of the written submissions that have been exchanged.
4 The court has a general discretion with respect to the costs of and incidental to all proceedings before it (Supreme Court Act 1935 (WA), s 37), although without limiting that general discretion, the court will generally order that the successful party to any action or matter recover their costs (Rules of the Supreme Court 1971 (WA), O 66 r 1). As the plaintiffs were the successful parties in these proceedings, the starting point for the exercise of the discretion with respect to costs is that they should recover their costs from the unsuccessful party, the defendant, unless there is some reason for departure from this general practice.
5 The written submissions that have been filed on behalf of the defendant, and which seek to justify a departure from the general practice are difficult to comprehend. The primary order apparently sought is an order to the effect that each party bear their own costs of the proceedings, and that all previous costs orders be set aside. Alternatively, orders are sought, in various permutations, limiting the costs recoverable by the plaintiffs to those applicable to designated issues, and requiring the plaintiffs to pay the defendant's costs on all other issues, on an indemnity basis, or alternatively by reference to the scale. The defendant also seeks a variation of an order relating to the manner of determining costs awarded in her favour by an order made on 10 March 2008.
6 Doing the best I can to discern from the written submissions that have been filed the basis for the defendant's assertion that there should be a departure from the usual practice whereby costs follow the event, the following propositions emerge:
(a) There was a significant alteration in the way in which the plaintiffs presented their case as a result of an amendment to the pleadings which resulted in the original trial dates being vacated;
(b) '[T]he plaintiffs' claim, as originally pleaded, was made in wilful disregard of known facts and had no chance of success';
(c) There is some distinction to be drawn between a loan from the third plaintiffs, in the amount of $180,000, and the provision of vendor finance;
(d) The plaintiffs, by their pleading, raised issues which were irrelevant;
(e) The sequence of agreements and variations to the original agreement found by the court did not correspond exactly with the plaintiffs' pleaded case;
(f) An order for the taxation of the plaintiffs' costs will expose the parties to further expense.
I will deal with each of these propositions in turn.
7 Firstly, in relation to the amendments to the statement of claim, and the consequent abandonment of the trial dates originally set, on 10 March 2008 I made an order that the plaintiffs pay the defendant's costs of those amendments, and any costs thrown away by reason of the adjournment of the trial. Therefore the defendant is fully protected in relation to the costs arising from the amendment to the plaintiffs' case. The change of approach taken by the plaintiffs provides no basis for denying them their costs of the subsequent trial.
8 I turn then to the proposition that the plaintiffs' claim as originally formulated was made in wilful disregard of known facts and had no chance of success. This proposition is without foundation. The plaintiffs' claim was, at all times, a claim to the effect that there had been an agreement between the plaintiffs and the defendant which the defendant had renounced, and which renunciation had been accepted by the plaintiffs, bringing the agreement to an end. The amendments that were made to the plaintiffs' claim essentially related to differing legal nuances and processes of reasoning which supported that fundamental proposition. On the findings which I have made, the plaintiffs' fundamental proposition is, and always has been, correct.
9 The defendant's third proposition relates to some supposed distinction between a loan and 'vendor finance'. The submissions are silent on the subject of what that distinction is, or why it should have any significance in relation to the exercise of the court's discretion with respect to costs. There is nothing in this proposition.
10 Next the defendant contends that the plaintiffs raised a number of issues in their pleading which were irrelevant to the matters in issue. There are aspects of the plaintiffs' pleaded case with respect to the defendant's renunciation of the agreement which I found it unnecessary to determine because of my view that the defendant's renunciation of the agreement was clear and unequivocal. Those aspects concerned such things as the defendant's refusal to permit the third plaintiff to come and go from the farm as he pleased, that the defendant would prepare a summary of income and expenses of the cherry orchard and so on. In the view which I took of the case, those matters were peripheral. However, that is not to say that they are irrelevant, nor that they were issues upon which the defendant succeeded. Accordingly, the plaintiffs' reliance upon these additional issues provides no basis for departing from the general practice with respect to costs.
11 Next the defendant contends that the case ultimately found by me departed from the pleaded case, because I did not find that there was an agreement effected between Ms Keillor, as agent for the plaintiffs, and the defendant, to vary a term of the original agreement between the parties to the effect that a Deed of Variation of the JEMA Trust was required. This is not correct: see Ainsworth v Roberts ([89] - [90]).
12 Finally the defendant asserts that if an order is made for taxation of the plaintiffs' costs, the parties will be subjected to further expense. While that is obviously so, and it is inevitable when any order is made for costs to be taxed if not agreed, the defendant's submissions do not advance any reason why that should result in a departure from the general practice with respect to costs.
13 For these reasons there does not appear to me to be any sound reason why there should be any departure from the usual practice with respect to costs in this case. Accordingly, I will reinstate the orders with respect to costs which I provisionally made on 12 December 2008. The plaintiffs' costs to be taxed pursuant to that order should include their costs of this issue.
14 However, the defendant points out that in the order which I made on 10 March 2008, I contemplated fixing the defendant's costs of the amendments to the statement of claim and the costs thrown away by reason of the adjournment of the trial. The defendant proposes that those costs should be taxed if not agreed. As it seems likely that there will be a taxation of costs, that course seems sensible. Accordingly, I will vary the order which I made on 10 March 2008 to provide that the costs awarded to the defendant by that order are to be taxed if not agreed.
Bentley
Nelson
(1999) 162 ALR 639
(1989) 166 CLR 623
(1973) 128 CLR 336