New South Wales Trustee and Guardian v Philpott

2 & 3. Estoppel

The Cross-Claim seeks the following relief: 1. A declaration that the cross claimant is the owner in equity of the unit premises known as 3/394 Bronte Road, Bronte NSW, including a garage, being the whole of the land contained in folio identifiers 3/SP1237 and 15/SP1237 (Property). 2. A declaration that the cross defendant holds the whole of its interest in the Property as a constructive trustee for the cross claimant. 3. An order that the cross defendant transfer legal title of the Property to the cross claimant. 4. Alternatively to prayer 3, an order that the cross defendant pay to the cross defendant [scil. cross-claimant] a sum representing the value of the cross claimant's interest in the Property taking into account all considerations for which allowance should be made in calculating that sum so as to do equity between the parties.
The Cross-Claim then pleads that prior to her death the deceased encouraged and induced in the cross-claimant an expectation that ownership of the property would be transferred to her prior to or on the death of the deceased. Included amongst the Particulars of these representations were these: a. Over the past 40 years, the deceased and her late husband (Joe) told the cross Claimant on many occasions that the cross claimant would eventually become the owner of the property in which they lived upon their passing. b. While the deceased and Joe lived at their house at 34B Gardyne Street, Bronte (Gardyne Street Property) in the period approximately 1980-2006 (the deceased lived there alone following Joe's death in 1995), they would refer to that property in the cross-claimant's presence as "Anne's property" in recognition of the representation pleaded in particular (a). c. After the sale of the Gardyne Street Property in 20006, the deceased requested the cross claimant to accompany her while she searched for alternative houses, because she intended the cross claimant to own the house.
It then pleaded the orders of the Guardianship Tribunal, the fact that the Guardianship Tribunal decided that the guardianship order should lapse and the execution by the deceased of the transfer of the property to the cross-claimant.
The cross-claimant pleaded that she has altered her position to her detriment in reliance on the expectation that the property would be transferred to her. The particulars given are these: a. The cross claimant and her son assisted the deceased with the sale and packing up of the Gardyne Street Property. b. The cross claimant accommodated the deceased and her cat in her house in Melbourne between April 2007 and June 2007 following the sale of the Gardyne Street Property and the purchase of the Property; c. The cross-claimant's son painted the Property, purchased and installed air-conditioning, purchased a fridge, dishwasher and other household items. d. The cross claimant assumed responsibility for and paid the Properties' outgoings including body corporate fees. e. The cross claimant, relying on the facts pleaded at paragraphs 9 to 11 and 14 of this Cross Claim, did not: i. seek any order revoking the management order, or varying the Management Order such that it ceased to apply to the Property; or ii. apply for a review of any decision by the cross defendant about whether to authorise the Transfer.
I have set out earlier the pleading in the earlier proceedings in relation to the claim of a gift in the guise of a donatio. The pleading in relation to the constructive trust, under a heading "Constructive/Resulting Trust" was as follows: 15. Due to the representations above, and additional representations from the date of purchase of the Bronte Unit until the deceased's death, and the execution of the transfer, the plaintiff and the deceased had a common intention. Particulars Conversations between the deceased and the plaintiff between September 2007 and the date of death. 16. The deceased did everything necessary to be done by her, to give effect to the transfer and make the gift binding. 17. Due to circumstances outside the control of either party, the gift failed to subsist. Particulars i. The transfer; ii. Letter from the deceased to Mr Nick Kalokotos of the New South Wales Trustee and Guardian (NSWTG) dated 17 Jufy 2014; iii. Letters from NSWTG dated 14 April 2015 and 30 September 2015; iv. Order of the Guardianship Tribunal appointing the NSWTG to manage the affairs of the deceased dated 24 April 2013. 18. In the premises, the defendant holds the Bronte property on constructive or resulting trust on behalf of the plaintiff, to fulfil the representations induced by the deceased leading to the agreement upon which the plaintiff relied.
Two matters should be noted in passing taking into account the matters set out in [17] and [19] above. First, nothing is pleaded to justify any claim of a resulting trust. Secondly, it is passing strange, in the light of the matters pleaded in the present Cross-Claim, that the deceased's Will of March 2011, which post-dated many of the representations (particularly those set out in [17] above) and acts claimed as acts of reliance, did not make any provision for the property to pass to the Defendant. I do not, however, have any regard to that in determining what is ultimately a legal question.
In reaching a conclusion on whether an issue estoppel arises from the bringing and termination of the earlier proceedings, two matters must be considered: (1) was the subject matter of the earlier proceedings the same as the subject matter of the present Cross-Claim, and (2) was the dismissal of the earlier proceedings by consent capable of giving rise to an issue estoppel?

(2) Consent dismissal

In Land Enviro Corp Pty Ltd v HTT Huntley Heritage Pty Ltd (2008) 72 NSWLR 160; [2008] NSWSC 185 Barrett J said: [63] It is well established that orders made by consent may create an estoppel and that, in this respect, an order of dismissal is no different from any other order. In Re South American and Mexican Co; Ex parte Bank of England [1895] 1 Ch 37 at 45, Vaughan Williams J said: "It has always been the law that a judgment by consent or by default raises an estoppel just in the same way as a judgment after the Court has exercised a judicial discretion in the matter … if [the parties] agree upon a result, or upon a verdict, or upon a judgment, or upon a verdict and judgment, as the case may be, an estoppel is raised as to all the matters in respect of which an estoppel would have been raised by judgment if the case had been fought out to the bitter end." [64] In Isaacs v Ocean Accident and Guarantee Corporation Ltd (1957) 58 SR (NSW) 69 at 75, Street CJ and Roper CJ in Eq said: "It is clear that the mere fact that the judgment is by consent does not detract from its conclusive effect upon the issues determined by it: Re South American and Mexican Co; Ex parte Bank of England. But a judgment operates by way of estoppel only as to those matters which are necessarily decided by it. (Cf Blair v Curran; Jackson v Goldsmith.) 'Though consent judgments and orders are undoubtedly in every case decisions in the sense that the actual mandatory or prohibitive parts of the judgment or order are conclusively binding upon … the parties … it may often be a matter of legitimate doubt and debate as to what, if any, particular questions or issues of right, title, or liability were, expressly or impliedly, the subject of the consent, and of the decision. For this purpose, as for all other purposes connected with the ascertainment of the subject-matter of a decision, the court will closely examine all such evidence, if any, as is available and admissible, and, by the aid of such materials, will ascertain whether any and what adjudication of matters in dispute was expressed, or necessarily involved, in the actual decision assented to' (Spencer Bower on Res Judicata, p 24, para 34). Again, at p 114, para 174, the learned author says: 'In the case of judgments and orders by consent … it is absolutely essential to refer to the pleadings or affidavits of the parties, if the judgment or order is in a naked and general form, in order to ascertain what, if any, decision of particular questions or issues was impliedly consented or submitted to by the party against whom such consent … judgment or order was made'." [65] Whether an order of dismissal in a proceeding acts as a bar to the pursuit of a later proceeding depends on whether the causes of action in the two are the same. In the Macquarie Bank case (above), Clarke JA said that what is necessary is: "… an examination of the factual circumstances relied upon to establish the right to relief in each case in order to determine whether there is a sufficient identity between them to found the conclusion that the same cause of action was in question in both cases."
In Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 Bathurst CJ (with whom Beazley P and Emmett AJA agreed) said: [110] The principles which determine whether an issue estoppel arises are well established although their application can cause difficulty. For an issue estoppel to arise it is necessary that it be established that the same question arises, that the judicial decision said to create the estoppel was final and that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies: Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] 1 AC 853 at 935 and Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 at [21]. [111] It was accepted correctly by the parties that a consent judgment could give rise to an issue estoppel: Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1988) 164 CLR 502 (Chamberlain) (although that was a case of res judicata or cause of action estoppel), Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 (Habib) at [186] and Makhoul v Barnes (1995) 60 FCR 572 at 582. [112] An issue estoppel will only arise in respect of those matters which a primary decree, order or judgment necessarily established as the legal foundation for the decision and nothing but that which is legally indispensable to the conclusion is thus finally closed or precluded: Blair at 531-532. In the case of a judgment by consent this may be productive of some difficulty: Chamberlain at 508 and Isaacs v The Ocean Accident and Guarantee Corporation Ltd and Winslett (1958) SR (NSW) 69 (Isaacs) at 75. As was pointed out in the latter case, a court will examine all evidence that is available and admissible and with the aid of such material ascertain any and what adjudication of matters in dispute was expressly or necessarily involved in the actual decision assented to. … [114] In Handley, Spencer Bower and Handley Res Judicata (4th ed 2009, LexisNexis) (Spencer Bower and Handley Res Judicata), the learned author points out at 2.16 that the extent to which a consent judgment gives rise to an issue estoppel has not been finally decided. However, it seems clear that in determining that issue the court can consider the objective background leading to the judgment to determine what was decided: Isaacs and In re South American and Mexican Company; Ex parte Bank of England [1895] 1 Ch 37 at 50. [115] The appellant submitted that the reason for the Dismissal was the inability of the company to meet an order for security of costs or the security for the undertakings given by the respondent and the receivers and managers. To the extent this submission suggests that regard should be had to the subjective motivation of those controlling the company in consenting to the judgment, it is incorrect. The test, in my opinion, is objective: Spencer Bower and Handley Res Judicata at 2.17. However, regard can be had to the background leading up to the order.
In the present case, there was no judgment as such. Rather, short minutes of order were filed which provided for the proceedings to be dismissed. From a practical point of view that was the order disposing of proceedings because they commenced by summons. Ordinarily, in the case of proceedings commenced by statement of claim, proceedings conclude favourably to a defendant by a judgment for the defendant and, in the case of proceedings commenced by summons, by an order dismissing the summons or the proceedings.
It is necessary, however, to consider s 91 of the Civil Procedure Act 2005 (NSW). That section provides: 91 Effect of dismissal of proceedings (cf SCR Part 40, rule 8) (1) Dismissal of: (a) any proceedings, either generally or in relation to any cause of action, or (b) the whole or any part of a claim for relief in any proceedings, does not, subject to the terms on which any order for dismissal was made, prevent the plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings. (2) Despite subsection (1), if, following a determination on the merits in any proceedings, the court dismisses the proceedings, or any claim for relief in the proceedings, the plaintiff is not entitled to claim any relief in respect of the same cause of action in any subsequent proceedings commenced in that or any other court.
In the present case sub-s (2) is not engaged because there has not been a determination on the merits. The question arises, therefore, whether a dismissal by consent of the parties enables the Plaintiff to bring fresh proceedings claiming the same relief in the manner envisaged by sub-s (1).
The position was similar in Land Enviro. Earlier proceedings had been settled by consent orders that provided as follows: 1. The proceedings be dismissed against the fourth defendant, seventh defendant, eighth defendant and ninth defendant. 2. There be no order as to costs.
The plaintiff in the earlier proceedings was seeking to advance a breach of duty against those defendants in new proceedings. The Associate Judge had declined to strike out the claims in the new proceedings. A preliminary issue was whether the predecessor to s 91 (SCR Pt 40 r 8) meant that the proceedings could be brought again.
Part 40 r 8 relevantly provided: Where … under these rules … the Court makes an order for the dismissal of proceedings or for the dismissal of proceedings so far as concerns any cause of action or the whole or any part of any claim for relief, the order for the dismissal shall not, subject to any terms or conditions on which the order for dismissal is made, prevent the plaintiff or claimant from bringing fresh proceedings or claiming the same relief in fresh proceedings.
Justice Barrett, having quoted the rule, went on to say: [56] In a case where an order for dismissal of proceedings is made "under these rules", the plaintiff or claimant may, because of part 40, rule 8(1), bring fresh proceedings or claim the same relief in fresh proceedings, except to the extent that the right or ability to do so is qualified by "any terms or conditions on which the order for dismissal is made". [57] In speaking of an order for dismissal made "under these rules", part 40 rule 8(1) obviously had in contemplation cases where proceedings are dismissed because they are frivolous or vexatious, or where the plaintiff does not appear or diligently prosecute the proceedings, as well as other cases explicitly dealt with by rules allowing dismissal. Such special cases dealt with by provisions of the rules are, clearly enough, cases in which an order for dismissal is made "under these rules". [58] The present case is not a special case of the kind to which I have referred. The dismissal order of 1 September 2004 was made, in essence, because all the parties affected by it wished it to be made and asked the court to make it. That, however, may, on one view, be sufficient to have caused the order to be one made "under these rules", for the purposes of part 40 rule 8(1). This is because of part 34 rule 6A: "The Court, on the application of any party making a claim for relief in any proceedings, may, at any time but, in the case of trial with a jury, before verdict, make an order, on terms, for the dismissal of the proceedings so far as concerns any cause of action or the whole or any part of any claim for relief made by him." [59] There arises from this rule a possibility that every order for dismissal, made by consent (and thus with the concurrence of the claimant) in relation to any cause of action or the whole or any part of any claim for relief, was, in terms of part 40 rule 8(1), made "under these rules", because made "under" part 34 rule 6A. That possibility was raised but not resolved by Hamilton J in Ferella v Otvosi [2005] NSWSC 678. His Honour said at [15]: "The only argument that occurs to me, that would avoid Part 40 r 8 having this effect, is that the dismissal was not a dismissal under the rules, and therefore not within the ambit of Part 40 r 8. However, Part 34 r 6A of the SCR provides that the Court on the application of any party making a claim for relief may at any time make an order for the dismissal of the proceedings so far as concerns any cause of action or any claim for relief. In my view the plaintiffs in this case, within the meaning of Part 34 r 6A, applied for the dismissal of the proceedings, so far as the subsequent prayers were concerned, by joining in asking the Court by the consent orders to dismiss the proceedings in relation to those prayers. In any event, this argument was not put to me." [60] I am not persuaded that part 34 rule 6A was activated or relied upon in the present case. The rule is concerned, in terms, with an application for a dismissing order made by "any party making a claim for relief". It deals, in my view, with the situation where the claimant alone decides not to press a particular claim and asks for it to be dismissed. A claimant in that position would often take steps to discontinue, a process which clearly leaves the relevant cause of action intact. But, as is pointed out at para 12.1.10 of Ritchie's "Uniform Civil Procedure (NSW)", an alternative, under the present Uniform Civil Procedure Rules 2005, is to resort to rule 29.8 which is in terms generally corresponding with those of the former part 34 rule 6A. The purpose of part 34 rule 6A was, it seems to me, to place a claimant seeking to withdraw unilaterally by means of an application for an order for dismissal in the same position as a claimant seeking to withdraw unilaterally by discontinuance. [61] It follows that, if an order for dismissal is made by consent of all affected parties (that is, the claimant and all parties against whom the relevant claim has been brought), the case is not within part 34 rule 6A. It is, rather, a case in which all those parties have agreed that the dismissal is to be of the same force and effect as if there had been a hearing on the merits. An order for dismissal after such a hearing is clearly capable of raising an estoppel despite part 40 rule 8: Newmont Pty Ltd v Laverton Nickel NL (No 2) [1981] 1 NSWLR 221. [62] I am thus of the opinion that the provisions of the Supreme Court Rules in force when the consent orders were made on 1 September 2004 did not affect the question whether the causes of action advanced in the 2001 proceedings could be re-asserted. That question is to be determined by reference to general law principles unaffected by those rules of court. (emphasis added)
As Barrett J noted at [60] rule 29.8 UCPR is in relevantly the same terms as Pt 34 r 6A.
As in Land Enviro, in the present case the dismissal of the proceedings was intended by the parties, viewed objectively, to be of the same force and effect as if there had been a hearing on the merits. The provision that there be no order as to costs, effectively an order that each party bears its own costs, strengthens that view. The present Plaintiff would scarcely be paying its own costs if the intent of the dismissal was similar only to a discontinuance.
In my opinion, the dismissal of the earlier proceedings results in an issue estoppel. The Defendant is precluded from bringing the present Cross-Claim and from defending the claim for possession based on any claim for a constructive trust.
If I am wrong in the view that the claim for proprietary estoppel in the Cross-Claim is a different claim from the one brought in the earlier proceedings I am comfortably satisfied that an Anshun estoppel precludes the cross-claimant from making the present claim: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. Whatever else may be unclear concerning the similarity of the earlier proceedings with the present Cross-Claim, what is clear is that the right asserted by the cross-claimant in the present proceedings is said to depend upon her reliance on representations made by the deceased in relation to the property. It cannot be doubted that the matters set out in the Cross-Claim are so relevant to the subject matter of the claim pleaded in the Statement of Claim that it would have been unreasonable not to rely on the presently pleaded matter: Anshun at 602.
Mr Philpott made clear that the reason the claim based on proprietary estoppel has now been made is that he and the Defendant were dissatisfied with the lawyers who previously acted for them and they obtained a further opinion from solicitors in Sydney who advised them to bring the proprietary estoppel claim. That is, perhaps, a classic example of where an Anshun estoppel will operate to preclude a later claim.
In C G Maloney Pty Ltd v Noon [2011] NSWCA 397 Campbell JA (with whom Tobias AJA agreed and Handley AJA agreed on this aspect) said at [87]: Rein J said, at [63] of the Principal Judgment: "In recent times there has been an increased awareness of the importance of efficiency and proper use of court resources in the manner in which litigation is conducted, not only by the courts themselves (see Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [96]-[102] per Gummow, Hayne, Crennan, Kiefel and Bell JJ and [133]-[134] per Heydon J) but by the legislature as well (see ss 56-61 of the Civil Procedure Act 2005 (NSW) and Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 per Spigelman CJ at [28]-[29], with whom Basten and Campbell JJA concurred at [34] and [35]). The need for parties to bring before the court all of the matters relevant to their dispute is a requirement long ago recognised in Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 and reiterated in Anshun , and is an important part of the orderly and fair administration of justice." While that part of the judgment below was not attacked by CGM on the appeal, I should record my agreement with it. It is consistent with the remark of Allsop P in Champerslife that I have set out at [62] above. It is also consistent with a remark of Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1 at 31.
If, technically, there is no issue estoppel, I consider in the circumstances that it would be an abuse of process for the Defendant to maintain her present Defence and Cross-Claim. In Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 the joint judgment of French CJ, Bell, Gageler and Keane JJ said: [24] To explain contemporary adherence to the comparatively narrow principle in Ramsay v Pigram, it is appropriate also to explain the relationship between the doctrine of estoppel and the doctrine of abuse of process as it has since come to be recognised and applied in Australia. The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding. [25] Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel. [26] Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. …

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