Brehm v Wright

The Alliance Bank (Ltd) v Broom (1864) 2 DR & SM 289 (62 ER 631) Butler v Fairclough (1917) 23 CLR 78 CASES CITED : Payne v Wilson (1827) 7 B & C 423 (108 ER 781) Oldershaw v King (1857) 2 H & N 517 (157 ER 213) Official Trustee in Bankruptcy v Lopatinsky (2003) 129 FCR 234

PARTIES : Susan Brehm - Plaintiff Norman William Wright - Defendant

SOLICITORS : Mr Rosier - Rosier Partners - Plaintiff Dib Lawyers - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2029/05 SUSAN BREHM v NORMAN WILLIAM WRIGHT JUDGMENT 1 Susan Brehm, the plaintiff, and Norman William Wright, the defendant, acquired a property at Wahroonga, Sydney where they lived together. The relationship deteriorated and Ms Brehm brought proceedings for an adjustment of property interests under the Property (Relationships) Act 1984. Those proceedings were compromised and the parties executed terms of settlement on 19 June 2006. The terms were not made orders of the court. Ms Brehm seeks that they be and she seeks specific performance of them and of an acknowledgment signed by Mr Wright on 11 July 2006. Terms of settlement 2 The terms of settlement were in the following terms: "1) By way of adjustment of property interests under the Property (Relationships) Act 1984 (NSW) a) The plaintiff to pay the defendant the sum of $32,000 upon the defendant vacating that portion of the premises which he currently occupies. b) The defendant to transfer his right title and interest in the property situate at 24 Campbell Drive Wahroonga, Torrens Title Reference 24/216409 within 21 days of this date. 2) The plaintiff to indemnify the defendant in relation to the mortgage and any outgoings on the said property whether accruing in the past or in the future. 3) The plaintiff will discharge the defendant in respect of his obligation to the ANZ Bank. 4) The defendant undertakes to leave the premises in the condition that was otherwise in at the time of valuation of the subject premises, being 5 June 2006 and will not commit any act of "waste" between the date of settlement and the date at which he vacates the subject premises. 5) Within the said period of 21 days of the signing of these terms by both parties the defendant will vacate that portion of the premises, which he currently occupies giving the plaintiff one hours prior notice to allow the plaintiff to inspect that portion to insure that it is in clean and reasonable condition. 6) Each party to pay their own costs of these proceedings. 7) Upon settlement, the parties will discontinue these proceedings." 3 Had the terms of settlement been brought to the attention of the court, it most likely would have noted the agreements of the parties and stood the matter over to a suitable date to enable the agreements to be finalised whereupon a notice of discontinuance with the consent of the defendant might have been filed. 4 Mr Wright was represented in the substantive proceedings by counsel and his then solicitor, Peter Proctor of Proctor & Associates. They were involved in the negotiations that led to the terms of settlement. Mr Wright acknowledged that he was advised by Mr Proctor that the terms of settlement were fair and reasonable and should be accepted. On that basis he executed them. Subsequent events 5 In anticipation of Mr Wright executing the transfer of his interest in the Wahroonga property and vacating it, Ms Brehm obtained a bank cheque for $32,000 in favour of Proctor & Associates' trust account and gave it to her solicitor, Marcus Galanos. He photocopied the cheque and sent the copy to Mr Proctor. Acknowledgment 6 The terms of settlement were not effected by 11 July 2006. Mr Galanos received no response from Mr Proctor to his request for confirmation that the transfer had been executed by Mr Wright and for an appointment of date, time and place for settlement. On that day, however, Mr Wright signed an acknowledgment in the following terms: "I Norman Wright of 24 Campbell Drive Wahroonga NSW 2076 acknowledge irrevocably that should I remain in the subject premises after Tuesday 11 July, 2006 I will incur a deduction of $100 per day in favour of Susan Brehm until I vacate the premises, such amount being deducted from the settlement sum. I confirm that I will be vacating the subject premises on Saturday 15th and clean up on the Sunday 16th July, 2006." 7 Mr Wright acknowledged that he received the acknowledgment from his solicitor and executed it. He said he did so because he was making arrangements to vacate by Saturday 15 July 2006 and he believed that he would be liable for no more than $300-$400. 8 Mr Wright did not vacate the premises and was still there at trial. Earlier conversation 9 Mr Wright said that in early July 2006, prior to the execution of the acknowledgment, he and Ms Brehm had a conversation in the driveway to the premises, Ms Brehm in her motor vehicle and Mr Wright on foot. According to Mr Wright, Ms Brehm said: "The cheque is going to Peter Proctor" to which he responded: "Well, you know, as soon as Peter Proctor advises me he has got the cheque I will go". Ms Brehn responded: "That's good." 10 Mr Wright said he did not move out because Mr Proctor did not inform him that he had got the cheque. In cross-examination Mr Wright conceded that Ms Brehm would not pay any money to Mr Proctor unless she received the transfer. Mr Wright said that no transfer was placed before him for execution. He took no steps to ensure that a transfer was executed. 11 Ms Brehm denied the conversation. She said that an apprehended violence order was made against Mr Wright in January 2004 that prevented him from communicating with her. She said the police advised her not to speak at all to Mr Wright and she had not done so. 12 While Mr Wright denied this was so, he did say that they had only spoken on a few occasions. Ms Brehm said that their comings and goings were at different hours and they rarely intersected. Earlier Deed 13 In an earlier deed executed by the parties, Mr Wright acknowledged that Ms Brehm contributed $110,000 towards the acquisition of the property and he contributed no money and, at the time of purchase, he agreed to transfer his interest if Ms Brehm requested him to do so. The operative part of the deed provided that Mr Wright should transfer the whole of his interest in the property within seven days, Ms Brehm agreeing to procure the release of Mr Wright from the mortgage. In accordance with that document, Mr Wright signed an instrument of transfer. But it was not witnessed and no further instrument was executed by him under the terms of settlement. 14 While the deed appeared to be complete on its face, Mr Wright alleged in cross-examination that there was a further document in which Ms Brehm agreed to pay him an amount he believed to be $70,000. No mention of such a document was made until Mr Wright's cross-examination. The arguments 15 On Mr Wright's behalf, it was submitted that the acknowledgment was unenforceable for lack of consideration and the method of implementing the terms of settlement had been altered by the oral agreement that Mr Wright would vacate upon being informed the money had been deposited to his solicitor's trust account. 16 Mr Wright also argues that Ms Brehm is estopped from relying on the acknowledgment because of the vulnerability of Mr Wright, Ms Brehm's ascendency over him and his acting to his detriment by signing the acknowledgment in reliance upon her statement that the money was being deposited to Mr Proctor's trust account. 17 On Ms Brehm's behalf it was submitted that the acknowledgment was enforceable, the consideration being her forbearance to sue under the terms of settlement and there never was an oral agreement varying the terms of settlement. Ms Brehm also argued that Mr Wright was estopped from denying the reduction in the settlement sum of $100 per day during continued occupation, she having acted to her detriment by forbearing to sue on the terms of settlement. The oral agreement 18 I prefer the evidence of Ms Brehm that no conversation took place in the driveway to the Wahroonga premises. Mr Wright conceded that they spoke rarely. Ms Brehm said never and her explanation for this was the advice given to her by the police. 19 Mr Wright said there was a further document in relation to the deed under which he executed a transfer of his interest in the land for a promised payment to him of $70,000. If that was so, why did he not seek to enforce that agreement? He was better off under it than with the $32,000 the subject of the terms of settlement. 20 Mr Wright knew that Ms Brehm would pay no moneys to Mr Proctor's trust account until she received a transfer of his interest in the Wahroonga property in proper form. Yet he made no effort to ensure that this was done. 21 If the conversation took place, why did Mr Wright sign the acknowledgment thereafter exposing himself to a penal rate if he remained in occupation of the premises? Why did he sign it when no moneys had been deposited to Mr Proctor's trust account? Why did he not instruct Mr Proctor to make inquiries of Mr Galanos as to when his client would deposit the moneys with Mr Proctor? Why did he not move out instead of incurring a deduction from the $32,000 of $100 a day? 22 These unanswered questions lead me to the conclusion that it was inherently unlikely that Ms Brehm would have had the conversation. 23 And if she did, I fail to see what consideration was given by Mr Wright to found an enforceable agreement. 24 I reject the submission that the parties entered into an oral agreement varying the form of implementation of the terms of settlement.

Consideration for the acknowledgment 25 In The Alliance Bank (Ltd) v Broom (1864) 2 DR & SM 289 (62 ER 631) a customer being called upon by his bankers to give security for moneys due agreed to give security. A demurrer was filed against the bill filed to enforce the agreement on the ground that the agreement was without consideration. It was held that the forbearance of the bank to enforce payment of the existing debt, in consequence of the agreement, was a sufficient consideration to support it and the demurrer was overruled. 26 Ms Brehm said that if Mr Wright had not signed the acknowledgment, she would have taken enforcement action immediately. 27 In Butler v Fairclough (1917) 23 CLR 78 at 96, Isaacs J said that a promise not to sue for a limited period, definite or indefinite, was a valuable consideration where the substantive claim was one for which the other party was liable. 28 In Payne v Wilson (1827) 7 B & C 423 (108 ER 781) it was held that where a promise to forbear is not for a fixed time, a reasonable time will be implied (see, also, Oldershaw v King (1857) 2 H & N 517 (157 ER 213)). 29 But where, as here, the forbearance is simple actual forbearance, there is no need to imply forbearance for a reasonable period. Some degree of forbearance is sufficient. In Alliance Bank (2 DR & SM at 292 (62 ER at 632)), Sir Richard Kindersley VC said: "It appears to me that, when the Plaintiffs demanded payment of their debt, and, in consequence of that application the Defendant agreed to give certain security, although there was no promise on the part of the Plaintiffs to abstain for any certain time from suing for the debt, the effect was, that the Plaintiffs did in effect give, and the Defendant received, the benefit of some degree of forbearance; not, indeed, for any definite time, but, at all events, some extent of forbearance." 30 In my view, the actual forbearance in this case is good consideration and the reduction of $100 per day is enforceable. 31 In Official Trustee in Bankruptcy v Lopatinsky (2003) 129 FCR 234 at 250 [103], it was said that actual forbearance to sue does not constitute consideration unless it is evidence of an implied promise to forbear or unless it is given at the express or implied request of the other party. Alliance Bank was cited for that proposition. 32 If it be a correct statement of law, I am of the view that there was an implied promise to forbear in the acknowledgment to give effect to continued occupation on payment of $100 per day. Further, it is to be implied that Mr Wright requested the extension of his occupation of the premises and impliedly requested Ms Brehm to forbear from enforcing the terms of settlement. As in Payne, it must be inferred that a request for extra time was made by Mr Wright and that led Ms Brehm to impliedly promise to forbear from suit if Mr Wright executed the undertaking. 33 In my view, whichever approach is taken to the issue, the acknowledgment is supported by good consideration and is enforceable. Estoppel 34 Since estoppel was based upon Mr Wright executing the acknowledgment in reliance upon the statement alleged to have been made by Ms Brehm during their conversation and I have found the conversation did not take place, the estoppel issue fails.

Conclusion 35 In my judgment, Ms Brehm is entitled to specific performance of the terms of settlement and of the acknowledgment. She does not need to rely upon estoppel. I will hear the parties on the appropriate terms of orders and I will hear the parties on costs. I direct the parties to bring in short minutes of order reflecting these reasons. **********

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