Ladmore v Ashton

The plaintiffs' pleaded case and the proposed amendments

The current pleaded case in relation to the Birchmans Estate

1. In 2007, Mr Quinn and his wife were the registered proprietors of land in Wamboin, New South Wales, which was being developed as a rural residential subdivision known as Birchmans Estate. Mr and Mrs Ladmore first met Mr Quinn in 2007 when they were working for Pybar Mining, which had been contracted to undertake earthworks and certain other work for the Birchmans Estate subdivision.
2. In their amended statement of claim filed in February 2023, the plaintiffs plead that Mr Quinn made an oral promise to Mr and Mrs Ladmore in about late 2007 that they could have any lot in the subdivision of Birchmans that they wanted if Mrs Ladmore was able to work out a way to develop the lots as freehold title rather than community title. Mr and Mrs Ladmore agreed, and Mrs Ladmore subsequently provided Mr Quinn with "a scheme allowing freehold title to be created". Mr Quinn then agreed that Mr and Mrs Ladmore had fulfilled "their part of the deal" and assisted them to choose a lot in Birchmans Estate. They chose lot 7, and Mr Quinn "represented that he would transfer lot 7 to Richard and Jan Ladmore without further consideration when the mortgagor [sic - mortgagee] allowed him to do so". Mr and Mrs Ladmore "agreed to wait for that transfer". [4]
3. The plaintiffs plead that they agreed with Mr Quinn on or about 25 February 2010 to "swap their entitlement to a transfer of lot 7 for an entitlement to a transfer of lot 26", and that Mr Quinn said that lot 26 would be transferred "when the mortgagee was paid off". [5]
4. The title to lot 26 was never transferred to the plaintiffs.
5. The plaintiffs plead that Mr Quinn told Mrs Ladmore that he was in financial difficulties in about July 2015. Mrs Ladmore, who had become a licensed real estate agent in 2014, offered to sell lot 26 "and lend the funds" to Mr Quinn "to assist him with his financial difficulties". [6] The sale of lot 26 settled on 30 September 2015. The plaintiffs plead that the "net sale price" was paid to Mr Quinn. The plaintiffs plead that they "have not been repaid" by Mr Quinn or his estate. [7]
6. The plaintiffs plead that, "in the premises", they are "entitled to receive the net sale price of Lot 26 from the defendants". [8]
7. The only claim for relief in the amended statement of claim filed in February 2023 is a claim for damages for breach of contract in failing to repay the net proceeds of sale of lot 26. [9]

The proposed amendments relating to Birchmans Estate

1. The proposed further amended statement of claim would introduce a new claim in paragraph 86 that, "in the premises": 1. Mrs Ladmore reasonably relied on the assumption that Mr Quinn would keep his promise made in about late 2007 that Mr and Mrs Ladmore could have any lot in the subdivision of the Birchmans Estate that they wanted if Mrs Ladmore was able to work out a way to develop the lots as freehold title rather than community title; 2. Mrs Ladmore reasonably relied on that assumption to her detriment by undertaking the work required to provide, and by providing, a scheme for freehold title for the Birchmans Estate; 3. Mrs Ladmore will suffer detriment if the defendants are permitted to resile from Mr Quinn's promise; and 4. it would be unconscionable for the defendants to so resile.
2. The proposed further amended statement of claim would expand the plaintiffs' claims for relief to include a claim in proposed prayer 3(f) for equitable compensation for the defendants' failure to pay to Mrs Ladmore the net sale proceeds of lot 26.
3. These proposed new claims are not expressed to be in the alternative to the existing claim for damages for breach of the alleged loan agreement.

Consideration and determination

1. Contrary to the defendants' submissions, the amended statement of claim pleads an agreement between the plaintiffs and Mr Quinn for the plaintiffs to lend the net sale proceeds of lot 26 to Mr Quinn. The facts pleaded as constituting that alleged agreement are the offer communicated to Mr Quinn by Mrs Ladmore in July 2015, and Mr Quinn's alleged acceptance of that offer by receiving the net sale proceeds on settlement in September 2015. It is true that the amended statement of claim is silent as to the term of the loan and any interest payable, and the amount of the alleged loan is described by reference to the sale proceeds rather than as a specific monetary sum. Contrary to the defendants' submissions, that does not render the pleading deficient. A loan for no fixed term is repayable on demand and creates an immediate debt upon which a claim may be brought. [10] There is some tension between the pleading that the plaintiffs are "entitled to receive" the net sale proceeds of lot 26, which suggests a claim in debt, and the claim in prayer 5 of the amended statement of claim for damages for breach of contract. However, that infelicity in the existing pleading is not relevant to the application for leave to amend to introduce the promissory estoppel claim in proposed paragraph 86 and the claim for equitable compensation in proposed prayer 3(f) of the proposed further amended statement of claim.
2. As counsel for the defendants submitted, the proposed new promissory estoppel claim in proposed paragraph 86 relating to the alleged promise of a lot in the Birchmans Estate is inconsistent with the existing claim for damages for breach of contract. Specifically, the proposed new pleading that Mr Quinn (and his executors) have resiled from the alleged promise to transfer to Mr and Mrs Ladmore a lot in the Birchmans Estate is inconsistent with the existing pleaded allegation that it was Mrs Ladmore who offered to facilitate the sale of the lot alleged earmarked for them, but not yet transferred to them, and to lend the net sale proceeds to Mr Quinn. As a matter of logic, any reliance by the plaintiffs or Mrs Ladmore on the alleged 2007 promise of the transfer of a lot must have been superseded by Mrs Ladmore's alleged 2015 offer to facilitate the sale of the relevant lot, which is said to have led to the loan agreement in respect of the proceeds of sale of that lot. That inconsistency which the proposed amendments would introduce into the plaintiffs' pleaded case is embarrassing.
3. For those reasons, the proposed new paragraph 86 and proposed new prayer 3(f) are not necessary amendments for the purpose of determining the real questions raised by or depending on the proceedings. Even if I had considered that those proposed amendments were necessary within the meaning of s 64(2) of the Civil Procedure Act, I would have held that it would be inconsistent with the dictates of justice in s 58 and with the overriding purpose in s 56 of the Civil Procedure Act to grant leave to amend because the inconsistency between the existing case and the proposed expanded case would obfuscate the plaintiffs' case in relation to the alleged promise of a lot in the Birchmans Estate. This is not consistent with the overriding purpose, and would forensically disadvantage the defendants whose cross-examination of the plaintiffs was well advanced by the time the amendment application was first made on the second day of the hearing. The defendants had completed their cross-examination of Mr Ladmore and were mid-way through their cross-examination of Mrs Ladmore when the amendment application was made. The injustice of inflicting that forensic disadvantage on the defendants is compounded by the absence of any explanation from the plaintiffs for their delay in seeking leave in respect of these amendments.

The current pleaded case in relation to Glencoe

1. The plaintiffs plead that Mr Quinn and his wife were the registered proprietors of a rural property known as "Glencoe" near Murrumbateman in New South Wales at all relevant times until July 2011 when Mrs Quinn passed away and Mr Quinn then became the sole registered proprietor. [11] Mr Quinn and Mr Ladmore entered into a share farming arrangement in respect of Glencoe in January 2010. A written share farming agreement was signed by Mr Quinn (for himself and as power of attorney for Mrs Quinn), and by Mr and Mrs Ladmore, in January 2011. [12]
2. The plaintiffs' estoppel claims rely on the following representations allegedly made by Mr Quinn: 1. a representation in about late 2009 that there were good opportunities for Mr Ladmore if he entered into a share farming arrangement at Glencoe and, as long as Mr Ladmore was prepared to put in his labour and to invest in the first years then he would make good money out of sheep and cropping (referred to as the "Good Opportunities on Glencoe Representation"); [13] 2. a promise made on or about 15 March 2010 to transfer a portion of the Glencoe farm to Mr and Mrs Ladmore "as an inducement for Richard Ladmore to continue to farm Glencoe farm for an initial five years plus a further five years plus possibly another five years or maybe two depending on circumstances at the time" (referred to as the "Glencoe Lot Representation"); [14] 3. a promise made on or about 30 January 2011 to build a Masterton Home for Mr and Mrs Ladmore on their chosen lot in the Birchmans Estate when Mr Quinn was "out of the bank's clutches", which was upgraded in mid-June 2011 to an offer to build a PAAL design house for them on either their chosen lot in the Birchmans Estate or the portion of Glencoe that Mr Quinn had allegedly promised to transfer to them (referred to as the "House Representation"); [15] 4. a promise in September 2011 to transfer the promised portion of the Glencoe farm to Mr and Mrs Ladmore and to build the PAAL home on that land "as soon as he could" if Mrs Ladmore could arrange for the sale and settlement of five or six lots in the Birchmans Estate by 31 December 2011 (referred to as the "Varied Glencoe Lot and House Representation"); [16] 5. a promise in 2014 that Mrs Ladmore would be Mr Quinn's exclusive agent for the sale of Birchmans Estate, Glencoe and Mr Quinn's property at Fisher in the Australian Capital Territory (referred to as the "Exclusive Agency Representation"); [17] 6. a promise in or about August 2015 that Mr Quinn would give Mr and Mrs Ladmore the stock and machinery on Glencoe "when he was gone or when Glencoe was sold", allegedly made at the same time as repeating the promise to give them a portion of Glencoe and to build them a house (referred to as the "Stock and Machinery Representation"); [18] and 7. a representation on or about 25 September 2018 that Mr and Mrs Ladmore "could only have two more years of share farming after he died" (referred to as the "Two Years Representation"). [19]
3. The amended statement of claim defines these representations collectively as "the Representations". [20]
4. The plaintiffs' case concerning the assumptions that they claim the representations and promises induced them to make, their claim to have reasonably relied on those assumptions, the manner in which they claim to have altered their position on the basis of those assumptions, their allegation that Mr Quinn intended them to rely on the alleged Representations (and each of them) and on the assumptions induced by the Representations, and their claim that they will suffer loss if the defendants resile from the Representations, is encapsulated in paragraph 82 of the existing amended statement of claim.
5. The plaintiffs plead that the Good Opportunities on Glencoe Representation induced them to assume that that there were good opportunities for Mr Ladmore to make good money out of sheep and cropping under a share farming arrangement on Glencoe and that, on the basis of that assumption, they altered their position by Mr Ladmore commencing share farming with Mr Quinn on Glencoe in about January 2010 and giving up a profitable trucking business in order to do so. [21] The plaintiffs further plead that, on the basis of the assumptions induced by the Good Opportunities on Glencoe Representation together with the Glencoe Lot Representation, they spent $80,000 on improving the farm. [22]
6. The plaintiffs plead that the Glencoe Lot Representation induced them to assume that they would obtain a portion of the Glencoe farm which is described as "Lot 1" on the plan attached to the amended statement of claim and that, on the basis of that assumption, they invested time and money in renovating and improving the house that was on the portion of Glencoe that they claim Mr Quinn promised to them, they spent $80,000 on improving the farm as referred to above, they signed a share farming agreement with Mr Quinn on or about 30 January 2011, and they moved into the farm house on Glencoe in April 2011 which they described as substandard and barely habitable. The plaintiffs further plead that, on the basis of the assumptions induced by the Glencoe Lot Representation together with the House Representation and the Varied Glencoe Lot and House Representation, Mrs Ladmore acted as Mr Quinn's personnel assistant, doing his secretarial and administrative work without receiving any salary or wage. [23]
7. The plaintiffs plead that the House Representation induced them to assume that Mr Quinn would pay for the construction of a new home for them. On the basis of that assumption, together with the assumption induced by the Glencoe Lot Representation, the plaintiffs moved into the substandard and barely habitable farm house on Glencoe in April 2011 as referred to above. On the basis of the assumptions induced by the House Representation and the Varied Glencoe Lot and House Representation, Mrs Ladmore arranged the sale of six lots in Birchmans Estate by the end of December 2011 and acted as Mr Quinn's personnel assistant. [24] The plaintiffs also plead that Mr Ladbroke agreed to continue share farming Glencoe after August 2015 on the basis of the assumptions induced by the House Representation, together with the assumption induced by the Stock and Machinery Representation. [25]
8. The plaintiffs plead that the Exclusive Agency Representation induced them to assume that Mrs Ladmore would be Mr Quinn's exclusive agent for the sale of lots in Birchmans Estate, Glencoe and the Fisher property. The plaintiffs pleaded that it was on the basis of that assumption, together with the assumptions induced by the Glencoe Lot Representation, the House Representation and the Varied Glencoe Lot and House Representation, that Mrs Ladmore acted as Mr Quinn's personnel assistant without any salary or wage as compensation. [26]
9. The plaintiffs plead that the Two Years Representation induced them to assume that they could farm the whole of Glencoe for two years after Mr Quinn's death and that, on the basis of that assumption, they continued to manage Glencoe and implemented their cropping programme, and continued to care for the stock and the farm, after September 2018. [27]
10. In paragraphs 82(n)-(r) of the existing amended statement of claim (which would become paragraphs 82(o)-(s) if the proposed amendment to paragraph 82 is allowed), the plaintiffs plead that Mr Quinn intended them "to rely on the Representations and each of them and on the assumptions the Representations induced", that they did rely on them and that it was reasonable for them to do so, and that they will suffer loss and damage if the defendants resile from the Representations.
11. The plaintiffs claim: [28] 1. a declaration that the defendants hold on constructive trust for them the portion of Glencoe identified as Lot 1 in the amended statement of claim, and an order requiring the defendants to subdivide Glencoe, transfer Lot 1 to the plaintiffs and to pay for the construction of a new PAAL home on Lot 1; 2. a declaration that the defendants hold on constructive trust for them the interest held by Mr Quinn immediately prior to his death in the stock and farm equipment on Glencoe, and an order requiring the defendants to transfer that stock and equipment to the plaintiffs; and 3. orders requiring the defendants to instruct Mrs Ladmore as exclusive selling agent for the remaining portion of Glencoe (that is, excluding Lot 1), and for any other landholdings of Mr Quinn, at 2 per cent commission plus GST.
12. Alternatively, the plaintiffs claim equitable compensation. [29]

The proposed amendments in relation to Glencoe

1. The proposed further amended statement of claim would introduce the following new sub-paragraph (n) in paragraph 82: "By making the Good Opportunities on Glencoe Representation, the Glencoe Lot Representation, the House Representation and the Exclusive Agency Representation and the Stock and Machinery Representation, Neil Quinn created an assumption that he would keep the promises as represented or made and in reliance the plaintiffs continued to share farm Glencoe."
2. There is no proposed amendment to the plaintiffs' claims for relief in respect of the alleged representations referred to at [24] above.

Consideration and determination

1. Counsel for the plaintiffs submitted that the purpose of proposed paragraph 82(n) is to make it clear that the plaintiffs allege that they continued to share farm Glencoe in reliance on all of the Representations. It was submitted that the defendants should have apprehended from the existing pleading that the plaintiffs would rely on the totality of the Representations "because as each new promise was made to deal with an issue, the earlier promises stood", so that "the promises would be treated as additive in keeping Mr Ladmore on the farm".
2. In opposing leave to amend, counsel for the defendants submitted that the plaintiffs' existing case is pleaded as distinct promises, each of which is alleged to have resulted in a distinct detriment, and the application to amend by introducing paragraph 82(n) was the first time that the promises had been said to "feed into each other" as one "evolving" promise or as "a series of promises that are wrapped up into one". Specifically, it was submitted that this very late amendment application introduced a new assumption (being the assumption allegedly induced by each promise that Mr Quinn would keep the earlier alleged promises) and also introduced a new allegation that the plaintiffs suffered the detriment of continued share farming on Glencoe as a result of each of the Representations identified in paragraph 82(n). It was submitted that, on the existing pleadings, it is only the alleged Stock and Machinery Representation that is said to have caused the plaintiffs to continue share farming on Glencoe. It was submitted that the defendants would be prejudiced if the plaintiffs were permitted to introduce these new allegations after the defendants have completed their cross-examination of Mr Ladmore, and that there is no explanation of any reason at all for the lateness of the amendment application, let alone a reason that would warrant inflicting that forensic prejudice on the defendants. It was further submitted that the prejudice would not end there, because counsel for the defendants has undertaken extensive preparation for the hearing based on the existing pleadings and would need to revisit her preparation for cross-examination of all witnesses if the plaintiffs were granted leave to amend in respect of proposed paragraph 82(n).
3. In my opinion, both the plaintiffs' submissions and the defendants' submissions mispresent the existing pleadings in relation to Glencoe. As revealed by my summary of those existing pleadings at [23]-[34] above, it is not the plaintiffs' case that each Representation gave rise to a detriment distinct from that said to have been suffered in reliance on the other Representations. Nor is it the case that the plaintiffs rely on the totality of the Representations as giving rise to the totality of the detriment. On the contrary, the plaintiffs have identified the specific kinds of detriment said to have been suffered as a result of the way in which they claim to have acted in reliance on each alleged Representation, either alone or taken together with one or more of the other alleged Representations. It can therefore readily be seen from the existing pleading that some of the alleged Representations are relied on as having had a particular cumulative effect, but that is not the case in relation to all of the alleged Representations. The existing pleading does not put the defendants on notice that all of the alleged Representations, taken together, are relied on as having caused the plaintiffs to continue share farming Glencoe. It is the Good Opportunities on Glencoe Representation, the Glencoe Lot Representation, the House Representation, the Varied Glencoe Lot and House Representation and the Stock and Machinery Representation that are said to have caused the plaintiffs to commence and continue share farming at various points in time. Contrary to the plaintiffs' submissions, the existing pleading does not put the defendants on notice that the plaintiffs intend to rely on all of the other the alleged Representations - including, for example, the Exclusive Agency Representation - as having induced them to keep share farming Glencoe. In the existing pleading, none of the alleged Representations are expressly pleaded as having induced the plaintiffs to assume that the earlier alleged promises would be kept, although I accept that this might be implied in relation to the Glencoe Lot Representation and the Varied Glencoe Lot and House Representation due to the close connection between the subject matter of those alleged Representations. I do not accept that such an assumption is impliedly pleaded in relation to any of the other Representations.
4. I accept the defendants' submission that they would be prejudiced if the plaintiffs were permitted at this late stage on the second day of the hearing to amend their claim by pleading that each alleged Representation confirmed the promises that were made by all of the previous alleged Representations, and that all of the alleged Representations taken together caused the plaintiffs to continue share farming Glencoe. That prejudice arises from the fact that the defendants have already cross-examined Mr Ladmore, and have made forensic decisions in conducting that cross-examination based on the existing pleadings. I accept that further prejudice would arise from the need to revisit the preparatory work already done for the cross-examination of other witnesses. It seems to me that this would either: (1) cause delay in the progress of the hearing with a real risk that the hearing will not conclude within the ten days that has been allocated to it and may need to be adjourned until much later this year or some time next year to be completed, or (2) impose an intolerable burden on the defendants' legal representatives to do the work necessary to meet the proposed amendments at the same time as appearing at the hearing each day and undertaking all of the work ordinarily required in conjunction with those appearances. In my opinion, it would be contrary to the overriding purpose and the dictates of justice to inflict that prejudice on the defendants in circumstances where the plaintiffs have had ample opportunity since commencing these proceedings in 2019 to identify the alleged Representations and the interaction between them in terms of the assumptions they are said to have induced and the detriment that the plaintiffs claim they will suffer if the defendants resile from them.

Conclusion

1. For those reasons, the plaintiffs' application for leave to amend by filing a further amended statement of claim in the form of MFI6 is dismissed.

Endnotes

1. Civil Procedure Act 2005 (NSW), s 56.
2. Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [71] (Gummow, Hayne, Crennan, Kiefel and Bell JJ); Rennie Golledge Pty Ltd v Ballard (2012) 82 NSWLR 231; [2012] NSWCA 376 at [103] (Campbell JA).
3. (2009) 239 CLR 175; [2009] HCA 27 at [111]-[113] (references omitted); see also [96]-[103].
4. Paragraphs 15-21.
5. Paragraphs 22-24.
6. Paragraphs 54-56.
7. Paragraphs 62-63, 80(a).
8. Paragraph 86.
9. Prayer 5.
10. Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 566; [1956] HCA 51; Loureiro v Mac Aus Unit Pty Ltd (No. 2) [2022] NSWSC 226 at [122] (Gleeson J).
11. Paragraphs 25 and 41.
12. Paragraphs 28 and 34.
13. Paragraphs 26-27.
14. Paragraphs 29-30.
15. Paragraphs 35-40 and 42-43.
16. Paragraphs 45-46.
17. Paragraph 51.
18. Paragraphs 57-61.
19. Paragraph 71.
20. Para 82(a).
21. Paragraphs 82(b)-(c), referring to paragraphs 27 and 28.
22. Paragraph 82(b)-(c), referring to paragraph 33.
23. Paragraphs 82(d)-(e), referring to paragraphs 31-34, 37, 50 and 52.
24. Paragraph 82(f)-(g), referring to paragraphs 37, 46, 47, 48, 50 and 52.
25. Paragraphs 82(f)-(g) and (j)-(k), referring to paragraphs 60 and 61.
26. Paragraphs 82(d)-(i), referring to paragraph 52.
27. Paragraph 82(l)-(m), referring to paragraphs 72 and 76.
28. Prayers 1 and 2.
29. Prayer 3. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 October 2024