Fifteenth Eestin Nominees Pty Ltd & Ors v Rosenberg & Anor [2009] VSCA 112

Fifteenth Eestin Nominees Pty Ltd & Ors v Rosenberg & Anor [2009] VSCA 112 - VSCA 2009 case summary — Zoe

[77]

While Mr Rosenberg was present, we discussed the proposed restructure, among other matters, and the fact that Mr Rosenberg would be required to transfer his shares in Project Hardware Pty Ltd.[52] Mr Rosenberg told me that he was agreeable to that, subject to there being no problem in relation to any capital gains tax issues.
I also said to Mr Rosenberg that in addition to the restructure, we would need to deal with the Trust. I said: 'You have no ongoing involvement, it's being managed by Ian for Sabbie and the children, and it is appropriate that in tidying up the paperwork, if you are still the appointor or guardian, you should resign in favour of Sabbie' (or words to that effect). He readily agreed to that. He said: 'Yes, do that'.
In the same discussion I also raised with Mr Rosenberg issues relating to Rangeway Nominees Pty Ltd, in its capacity as trustee of the E. Rosenberg Family Trust.[53] I discussed with him, the need for his resignation as a director, the transfer of his shares, and his resignation as appointor or guardian if necessary. I told him it was appropriate to fix up the paperwork. I said: 'These arrangements which you entered into in 1990 whereby Sabbie and Ian have been in control, have to be formalised', or words to that effect. Again, he readily agreed.
We also discussed the need for new wills for Ian and Sabrina Berger and for Mr Rosenberg. Mr Rosenberg raised the issue because he wanted to ensure that provision would be made in the wills of Ian and Sabrina Berger for his maintenance, in case they happened to predecease him. Ian and Sabrina Berger readily agreed to this.
During the meeting, and in the presence of Ian and Sabrina Berger, I told Mr Rosenberg that we had reviewed his own will and codicils. I told him that I had concerns with the inter-relationship of his existing will and codicils. He instructed me to prepare a new will to ensure that the residue of his estate passed to Sabrina if she survived him, and to her children if she predeceased him.

[102]

COUNSEL: So the words were, 'I agreed to allow Sabrina to manage the trust along with me'?

WITNESS: Yes.

COUNSEL: Now when did you make that agreement? Mr Rosenberg - - - ?

WITNESS: When did I make the agreement?

COUNSEL: I've asked you when you made that agreement, no need to look at any document?

WITNESS: I can't remember when I made that agreement.

COUNSEL: You actually said to Sabrina that she could manage the trust with you?

WITNESS: No.

COUNSEL: When did you say that - well how did you agree to allow Sabrina to manage the trust along with you?

WITNESS: Along with me?

COUNSEL: How did you agree to that and when, what date. I'm asking you that?

WITNESS: Well I can't remember the date.

COUNSEL: Well was it before the dissolution agreement, after the dissolution agreement?

WITNESS: No, I can't recall that. I'm sorry, I can't recall.

COUNSEL: Do you recall at any stage agreeing to allow Sabrina to manage the trust along with you?

WITNESS: No.

COUNSEL: Did you ever indicate to Sabrina that she and you could manage the trust for the benefit of you and Bloom?

WITNESS: No.

COUNSEL: I'll take that slowly for you. Did you ever agree in anyway with Sabrina that you, she and you could manage the trust for the benefit of you, Mr Rosenberg, and Bloom?

WITNESS: No.

COUNSEL: You told Sabrina, did you, that you would make sure that she would benefit from the trust assets after your death?

WITNESS: No.

COUNSEL: I'll take that slowly. Would you look at p.380 at the top?

WITNESS: Yes.

COUNSEL: Now you see the words, 'I told Sabrina'?

WITNESS: Yes.

COUNSEL: Just read that sentence to yourself. Have you read that sentence?

WITNESS: Yes.

COUNSEL: Is that true or not?

WITNESS: The bottom part's true.

COUNSEL: No, no, just the one sentence, 'I told Sabrina that I would ensure', just that sentence, the first - - - ?

WITNESS: No, no.

COUNSEL: That's not true?

WITNESS: I made a will and it was in the will, was in the will.

COUNSEL: But this is talking about what you told Sabrina?

WITNESS: No, I didn't tell Sabrina, to my knowledge now I don't - I can't remember - - -

COUNSEL: All right.

HIS HONOUR: Well that's slightly different Mr Rosenberg. Are you saying that sitting now in the witness box, you can't remember whether or not you told Sabrina - - - ?

WITNESS: No.

HIS HONOUR: That you'd be sure that she'd benefit from the trust assets after her death or are you saying - - - ?

WITNESS: I'm not saying I didn't, but I can't remember I did.

[235]

COUNSEL: If you go to your affidavit of 21 December 2005. It's p. 995, Mr Berger. Do you have that?

WITNESS: Yes.

COUNSEL: Paragraph 7 is the first occasion upon which you speak about any statement of promise by Mr Rosenberg in relation to Project Hardware, isn't it? In the last sentence, that was the first occasion upon which you mentioned it?

WITNESS: Yes.

COUNSEL: Mrs Berger had not suggested in her affidavit of 12 September 2004, when you made yours, that Mr Rosenberg had made any promise to her about Project Hardware at all, did she?

WITNESS: I can't recall.

COUNSEL: We might look at that later. Anything that Mr Rosenberg said to you about taking a position with Project Hardware was irrelevant to issues of how the assets of the trust might be employed, wasn't it?

WITNESS: They were two separate issues, yes.

COUNSEL: Now at a later stage then in Paragraph 14 of that affidavit, can I suggest that you sought to improve your hand further in Paragraph 14 by saying that not only had Mr Rosenberg made a promise in relation to Project Hardware but he'd made a promise in relation to his other assets as well? Do you see that?

WITNESS: In relation to the discussion he had with Sabbie?

...

COUNSEL: If you look at Paragraph 14 you say, 'In or about mid 1990, Sabrina told me that she had had a discussion with her father in which he told her in substance that to avoid any dispute between her and her brother over the division of the assets after his death, he would during his life split up his assets between his two children'. Now any discussion that you had had with Mr Rosenberg concerning splitting up his assets between his two children had centred upon the result that would be achieved by the dissolution agreement, wasn't it?---

WITNESS: We discussed it as well, yes.

COUNSEL: You add, 'and that Sabrina would become a director of Fifteenth in order to participate in the management and control of the trust'. Discussions about her becoming a director of Fifteenth were in the context of the arrangements made for the dissolution agreement, weren't they?

WITNESS: Yes.

COUNSEL: Then you add, 'And that the assets of the trust and his other assets would be used for the benefit of Sabrina and her parents while her parents were alive'. Now she never says in her affidavit material that Mr Rosenberg made a promise in relation to his other assets, does she?

WITNESS: I don't know what Sabbie said - I can't recall what Sabbie said in her affidavit.

COUNSEL: You can't recall what she said to you in 1990, can you?

WITNESS: I recall a very traumatic time between the time when Mr Rosenberg had open heart surgery up until the time of the dissolution. It was very clear in my mind.

COUNSEL: Yes, but he made no promise to you and she did not tell you that he made a promise to her that his other assets would be for her benefit, did he?

WITNESS: Well - could you ask the question again please?

...

COUNSEL: I put it to you that at no time did Mr Rosenberg say to you and at no time did Mrs Berger say to you that Mr Rosenberg had told her that his other assets would be used for her benefit?

WITNESS: I can't recall at what point he did tell me about his will, that he had provided for Sabbie in the will.

COUNSEL: So you've drawn an inference have you, from what Mr Rosenberg told you about the terms of his will?

WITNESS: He had told me at the time that the trust - the assets - in mid 1990, there was issues in regards to the Project Hardware or to Rosekay Holdings that had yet to be resolved.

COUNSEL: Is the fact that as a result of something Mr Rosenberg said to you about the terms of his will, you drew an inference?

WITNESS: He said to me that Sabbie wouldn't have to rely on Barry. He said to me that she - he would look after her in the future.

COUNSEL: Yes?

WITNESS: Yes.

COUNSEL: But he didn't say to you that- - -?

WITNESS: And that he's splitting everything up with Barry and Barry gets his and you'll get mine.

COUNSEL: But he didn't say to you and she didn't say that he had said that his other assets would be used for the benefit of Sabrina and her parents whilst her parents were alive, did he?

WITNESS: He said that he would take care of Sabrina into the future.

COUNSEL: You are differentiating there, are you not, between trust assets, Project Hardware and other assets. I'm putting to you that he never said to you anything about the other assets, did he?

WITNESS: What, which other assets are you talking about?

COUNSEL: All right well, can I suggest that the reason that that found its way into your affidavit is because you were concerned about the shareholding that Rangeway had in Project Hardware?

WITNESS: Nothing to do with it.

[344]

In such cases the remedy relates to the understanding of the parties and the expectation that has been encouraged. Prima facie the estopped party can only fulfil his or her equitable obligation by making good the expectation which he or she has encouraged. The estopped party, having promised to confer a proprietary interest on the party entitled to the benefit of the estoppel, and the latter having acted upon the promise to his or her detriment, is bound in conscience to make good the expectation.[238] It follows that the detrimental reliance that supports the estoppel need not constitute in any sense a consideration moving to the party bound. It is a unilateral element of the estoppel and not the price paid for it.[239]

The prima facie position will yield to individual circumstances. Principle and authority compel the view that where a plaintiff's expectation or assumption is uncertain or extravagant or out of all proportion to the detriment which the plaintiff has suffered, the court should recognise that the claimant's equity may be better satisfied in another and possibly more limited way.[240] Thus, as was also said in Giumelli,[241] before granting relief the court is required to consider all of the circumstances of the case, including the possible effects on third parties, and to avoid going beyond what is required for conscientious conduct or would do injustice to others. But that does not mean that the court is required to be 'constitutionally parsimonious'[242] or that it is necessary for there to be substantial correspondence between expectation and the monetary value of the detriment suffered, or which but for the relief to be accorded would be suffered.[243] The object of the exercise is to do equity and for that purpose 'detriment' is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances.

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Judgment (473 paragraphs)

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Cases Cited (18)