Serves Pty Ltd atf The Rosemont Trust v Roche (Deceased); Roche (Deceased) v Serves Pty Ltd atf The Rosemont Trust

Medium Neutral Citation: Serves Pty Ltd atf The Rosemont Trust v Roche (Deceased); Roche (Deceased) v Serves Pty Ltd atf The Rosemont Trust [2025] NSWSC 336

Hearing dates: 2 April 2025

Date of orders: 8 April 2025

Decision date: 08 April 2025

Jurisdiction: Equity - Real Property List

Before: Hammerschlag CJ in Eq

Decision: The cross-claim is dismissed.

Catchwords: EQUITY — LIMITATION OF ACTION — Limitation Act 1969 (NSW) ss 14, 23 — Right of equitable contribution — Claim by a co-owner of real property for contribution from the other co-owner to payment of asserted co-ordinate liabilities in relation to the real property — Whether liabilities were co-ordinate and, if so, to what extent — Whether no right to equitable contribution arose because the payments were made without any intention of recovery or contribution — Whether, if there was otherwise a right to equitable contribution, the claim is statute-barred as being analogous to a claim in contract or quasi contract — HELD: no right of equitable contribution arose because the payments were made with the intention that they would not be recoverable — HELD: claim not statute barred as not analogous to a claim in contract or quasi contract

Legislation Cited: Civil Procedure Act 2005 (NSW) s 90
Conveyancing Act 1919 (NSW) s 66G
Land Tax Management Act 1956 (NSW) s 27
Limitation Act 1969 (NSW) ss 14, 23
Local Government Act 1993 (NSW) s 560
Strata Schemes Management Act 1996 (NSW) s 78

Cases Cited: Barber v De Prima (2018) 97 NSWLR 932; [2018] NSWSC 601
Burke v LFOT Pty Ltd (2002) 209 CLR 282; [2002] HCA 17
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8
Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21
Gerace v Auzhair Supplies Pty Ltd (2014) 87 NSWLR 435; [2014] NSWCA 181
Global Consulting Services Pty Ltd v Gresham Property Investments Ltd [2018] NSWCA 255; (2018) 365 ALR 143
Lang v Le Boursicot (1993) 5 BPR 11,782
Muschinski v Dodds (1985) 160 CLR 583

Category: Principal judgment

Parties: Serves Pty Ltd in its capacity as trustee for the Rosemont Trust ACN 008 086 888 (Plaintiff/Cross-Defendant)
Deborah Ann Hamilton as joint executor of the estate of John Justin Roche (Defendant/Cross-Claimant)
Fiona Roche as joint executor of the estate of John Justin Roche (Defendant)

Representation: Counsel:
S Docker SC / S Phillips (Plaintiff/Cross-Defendant)
M Cairns (Defendant (Hamilton)/Cross-Claimant)
Submitting Appearance (Defendant (Roche))
Solicitors:
Thomson Geer (Plaintiff/Cross-Defendant)
Grope Hamilton Lawyers (Defendant (Hamilton)/Cross-Claimant)
Iles Selley Lawyers (Defendant (Roche))

File Number(s): 2022/00372048

Publication restriction: Nil

JUDGMENT

Introduction

1. The claim to be adjudicated is a remnant of a long running dispute between two sisters who have fallen out with one another and who, by all accounts, inherited or otherwise received a fortune from or via their late father, John Justin Roche (the deceased), who died on 24 April 2010.

2. It is brought by way of a cross-claim, the protagonists to which are the cross-claimant, Deborah Ann Hamilton, in her capacity as an executor of the estate (Hamilton) and a company (Serves), the cross-defendant, which was established by the deceased. Hamilton and her sisters, Fiona Roche (Roche) and Shauna Roche (Shauna) are shareholders and directors of Serves.

3. Hamilton and Roche are joint executors of the estate, but Hamilton, on behalf of the estate, is the real protagonist of the cross-claim. Roche, no doubt instructs on behalf of Serves, but takes no active part in the proceedings in an individual capacity. She has filed a submitting appearance.

4. Shauna Roche plays no role in this contest.

5. To put things into perspective, the maximum positive outcome for Hamilton on her pleaded case (if she won on everything) would be a verdict for one-half of $279,904 (ie. $139,952), which would go into the estate, the residuary beneficiary of which is a trust for the benefit of her daughters, Airlie and Alexandra. In fact, in the manner in which the case was conducted, the maximum amount she could have recovered is one-half of $85,998 (ie. $42,999), which amount was established not by Hamilton, but by an appropriate, if somewhat generous, admission by Serves.

6. But as will be explained, her case fails in any event.

7. To put things further into perspective, the matter was set down to be heard over two days. I was provided with a court book (including affidavits) exceeding 1,000 pages. The written submissions run to 30 pages. Although legal costs may be of a matter of indifference to these parties, I required them to complete the hearing in one day, which counsel comfortably achieved.

Background

8. The deceased was a highly successful businessman who, with his family, did property developments and conducted agribusiness, predominantly through a group of companies called the EDC/ADC Group (the Grou****p). He amassed significant wealth. The family is based in Adelaide, South Australia.

9. By will dated 16 February 2006 (the Will), he appointed Hamilton and Roche joint executors. Probate in common form of the Will was granted by the Supreme Court of South Australia on 22 August 2011 and probate in solemn form was re-sealed by this Court on 2 August 2019.

10. In the 1960s, the deceased’s mother (Dorinda) acquired a residential property at Rosemont Avenue, Woollahra (the Property), an eastern suburb of Sydney. Dorida died on 2 February 1986, leaving a half-share in the Property to each of the deceased and his brother, David Roche (David). They became registered owners of the Property as tenants-in-common in equal shares on 17 October 2003.

11. The Property was used as a Sydney family holiday home. According to Hamilton, the deceased liked to visit Sydney each year for the Royal Easter Show. He also had friends in Sydney. He stayed at the Property during visits here. Other members of the family, friends and some employees also stayed there from time to time.

12. In 1995, the Group was owned and controlled by the deceased and his siblings. There were discussions about splitting the group assets amongst different family groups. In 2000, the deceased’s family group acquired the interests of his siblings in a number of assets. The deceased funded the acquisitions, which were made through entities controlled by or established for the benefit of his daughters.

13. In the context of the splitting, the deceased and David agreed that the deceased (or his interests) would buy David’s half-share in the Property for $571,188. To this end, the deceased arranged for the establishment of the Rosemont Trust and for it to be the vehicle for the acquisition. The Rosemont Trust has never held any assets apart from its interest in the Property. The beneficiaries of the Rosemont Trust include the respective corporate entities of the three sisters, Darden Pty Ltd (Roche), Dairal Pty Ltd (Hamilton), and Proscenium Pty Ltd (Shauna). The purchase price paid by Serves was financed by the deceased.

14. Serves, which had been incorporated in October 1985 and was part of the Group, was made trustee of the Rosemont Trust. The deceased was appointed a director of Serves on incorporation. He held shares in it. Hamilton was appointed a director in 1994, and Roche and Shauna were appointed in 2003. They are the current shareholders. Roche is the executive chairman of the Group and since 2008 has been the managing director of Serves.

Hamilton’s Claim

23. Hamilton on behalf of the estate claims equitable contribution of half of what the deceased or his estate paid during the Period in respect of the Property.

24. The principles of contribution were elucidated by McHugh J in Burke v LFOT Pty Ltd (2002) 209 CLR 282; [2002] HCA 17 at [38] as follows:

Both common law and equity give a person the right to obtain contribution to a payment made by that person in discharging “a common obligation” that is owed by that person and others. In determining whether there is “a common obligation”, the traditional test is whether the liability of each party “is of the same nature and to the same extent”. Early cases suggested that the common law right arose as a result of an implied contract between the parties. But whether that be right or not — and if it is, in many cases, it must be the result of a contract imputed to the parties — the equitable principles now cover the field. Those principles are based on the equitable doctrine of equality. When a person pays more than his or her share of a common monetary obligation, the payment pro tanto discharges the obligation of all who owe the common obligation. In accordance with the maxim that equality is equity, equity requires the common burden to be shared equally so that none of those owing the common obligation will pay more than his or her share of the burden. An order of contribution prevents the injustice that would otherwise flow to the plaintiff by the defendant being enriched at the plaintiff’s expense in circumstances where they have a common obligation to meet the liability which the plaintiff has met or will have to meet.

(footnotes omitted)

See too Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 at [40] and following.

25. Hamilton pleads her case in the following numbered paragraphs (which are a little out of sequence) of her Second Further Amended Statement of Cross-Claim (underlining removed):

Expenses associated with ownership of the Property

56. At all material times, the Property Expenses included (amongst other things) usual rates, taxes and outgoings associated with ownership of the Propety, inter alia:

56.1. Council rates to the City of Woollahra;

56.2. Emergency Services Levy;

56.3. Strata fees and charges;

56.4. Cleaning costs;

56.5. Gardening;

56.6. Land Tax;

56.7. Water and sewer rates and charges;

56.8. Repairs and maintenance costs;

56.9. Upgrading and refurbishment costs;

56.10. Furnishing costs.

…

Payment of Property Expenses after 17 October 2003 to in or about mid to late 2011

60. For the period commencing on or about 17 October 2003, until in or about mid to late 2011, John or his Estate paid 100% or the majority of the Property Expenses without contribution by Serves atf Rosemont Trust, as the other co-owner.

PARTICULARS

60.1. The books and records of John, the Estate and of the entities within the family group of companies through which John and his Estate’s expenses were paid, are in the possession, custody or control of Fiona as one of the Executors of the Estate and as a director of those entities.

60.2. Deborah reserves the right to give further particulars after discovery/production of records has occurred.

61. During that period, John and then his Estate and Serves atf Rosemont Trust, were jointly liable for the Property Expenses as co-owners of the Property being tenants in common in equal shares.

62. Serves atf for the Rosemont Trust:

a. benefitted from John’s and then his Estate’s payment of the Property Expenses; and

b. is liable to repay to the Estate 50% of that total amount paid by John and his Estate, by way of equitable contribution.

63. [not used]

Payment of Property Expenses and payment of joint or co-ordinate liabilities

64. Serves atf Rosemont Trust had a common obligation with John and then his Estate, to pay the Property Expenses. The Property Expenses paid by John, and then the Estate, was payment of joint or co-ordinate liabilities owed by him and his Estate and Serves as trustee of Rosemont Trust, as the legal co-owners of the Property, for which both parties derived a benefit.

63A. (sic) Serves atf Rosemont Trust benefitted from John and his Estate’s payment of these joint or co-ordinate liabilities.

63B. (sic) In the premises, the Estate is entitled to equitable contribution by Serves atf Rosemont Trust of 50% of the Property Expenses paid by John and his Estate.

26. The order sought by her in her cross-claim was:

An order that the Cross-Defendant (Serves) reimburse the Estate an amount equivalent to 50% of all maintenance costs, rates, taxes and outgoings paid from 17 October 2003 to in or about mid to late 2011 by [the deceased and] the Estate in respect of the property situated at Unit XX (known as Unit XX), XX-XX Rosemont Avenue, Woollahra 2025 (the Property).

27. Three things may immediately be observed.

28. First, the only basis for the claimed right of contribution is the joint or co-ordinate liability of the estate and Serves as co-owners of the Property for the described expenses, and payment by the deceased or the estate to the benefit of both. It was submitted on behalf of Hamilton that the pleading comprehends some other species of right to contribution, which I understood to be on the basis that Serves merely received some benefit from the payments concerned. If there is such a right of equitable contribution, it was not pleaded.

29. Second, the amount said to have been paid is neither pleaded nor particularised.

30. Third, the above formulation of the relief specifies no amount and its scope and operation cannot be divined from its terms. An order in that form would be of no utility and would leave over for dispute whether any particular expense which might fall within the description is co-ordinate or not. Describing a payment or liability as being for “maintenance costs, rates, taxes and outgoings” says nothing of whether the payer had any, let alone a co-ordinate, liability to pay or discharge it.

31. At the end of the hearing, the Court having raised the problem with the form of the relief sought, Hamilton applied for and I gave her leave (which was not opposed) to amend the terms of the relief claimed to be:

An order that the cross-defendant pay the estate $139,952.03

32. Hamilton did not take upon herself the burden of proving that any particular amount making up the total of $279,904.06 paid by the deceased and the estate was a joint or co-ordinate liability of the deceased and Serves as co-owners of the Property. Indeed, she took the position that it was impermissible for the Court to have regard to the accounting material which establishes the amounts and for what they were paid.

33. Hamilton relies exclusively on an admission which results from a non-response by Serves to a Notice to Admit Facts served on behalf of Hamilton dated 3 September 2024 (the Notice), which required admission of the following fact:

That John Justin Roche and his Estate collectively, paid a total of $279.904.06 in maintenance costs, rates, taxes and outgoings from October 2003 to May 2011 in respect of the property situated at Unit XX (known as Unit XX), XX-XX Rosemont Avenue, Woollahra NSW 2025.

34. This admission to which the Notice gives rise, suffers from the same deficiency as the relief originally claimed. It says nothing of whether any of the amounts paid were the subject of a joint or co-ordinate liability.

35. I record that on behalf of Hamilton, it was sought to tender documents which explained how the forensic decision came to be made to rely on the Notice. I rejected the tender. The admission operates according to its tenor and no more, and Hamilton’s reasons for the forensic decision are irrelevant.

36. Many, if not the bulk of payments recorded in the drawings ledger would not appear to be for joint or co-ordinate liabilities at all, let alone ones such arising because of co-ownership of the Property and counsel for Hamilton did not wish to be heard to contend otherwise in relation to any particular payment. Examples of these include:

37. Cleaning;

38. Audit fees;

39. Design consultancy fee;

40. Bed linen;

41. Watercolour-Sydney house;

42. Soft furnishing Rosemont;

43. Custom made coffee table;

44. Alcohol for unit [xx] Rosemont;

45. Rosemont broadband;

46. Dry cleaning;

47. Rosemont framing;

48. DAH Rosemont airfares;

49. Rosemont water glasses; and

50. Consultancy fees.

51. I was provided with an aide memoire intended to compare the level of payments made respectively by the deceased and the estate on the one hand and for the later period when Serves paid on the other. I think this was for the purpose of demonstrating that Serves spent more than the deceased or the estate, giving rise to the implication that the claim in this case is a modest ask. Such a comparison has no role to play in the determination of the issues in this case.

52. Serves, however, made a voluntary admission that joint liabilities of $85,998.73 (strata levies, rates, land tax and water service) were paid by the deceased or the estate. Half of this is $42,999 (1.1% of the amount held by the trustee for sale).

53. Unsurprisingly, given her exclusive reliance on the Notice, it was not submitted on behalf of Hamilton that any amount different from that claimed should be awarded. However, if Hamilton was otherwise entitled to succeed, a verdict for $42,999 may have been appropriate as an order which the nature of the case required (Civil Procedure Act 2005 (NSW) s 90).

Defences

40. I turn then to Serves’ defences.

41. Serves abandoned an untenable contention that there was a binding agreement between the deceased and Serves that the deceased would pay all of the expenses in connection with the Property without any recourse to Serves, and an alternative contention that an estoppel arose because they adopted this a common assumption, acted upon it and departure from it would occasion detriment to Serves.

42. As to the first, the evidence did not establish any such agreement or any consideration for it. As to the second, Serves did not identify any cognisable detriment. It was put that based on the common assumption, Serves did not rent out the Property. But the evidence clearly establishes that this was never an option. Moreover, it is manifest that the deceased paid the expenses voluntarily.

43. Next, Serves argued that any equitable relief should be withheld because of Serves itself had discharged joint liabilities of it and the estate (although, after the period to which the claim in this case relates) and that to do equity Hamilton must take this into account. The amount said to have been expended by Serves (and proved by the documents) is $30,658.41 of which half is $15,329. If this contention were to have been upheld and Hamilton been otherwise entitled to succeed, the resulting verdict would be reduced from $42,999 to $27,670. I, however, reject Serves’ contention because;

44. on Serves’ own case (to which further reference is made below), there was never any intention on behalf of the deceased or Serves (which had been his creature) that there would be such an accounting;

45. the contention was made late; and

46. in the particular circumstances of this case, it should have been pleaded or made clear early on in the piece. It was not.

47. It was put on behalf of Hamilton that this contention should be rejected for the additional reason that to entertain it may give rise to some issue estoppel preventing a claim by the residuary beneficiary. That beneficiary is not a party to these proceedings. It apparently wishes to bring a claim against Serves. Hamilton intends to make an application for leave to bring a derivative action on its behalf. I confess to having had some difficulty understanding the thrust of this contention but in any event, any potential problem with it was overcome by an undertaking by Serves to the Court not to take any such point in any such further proceedings.

No right of equitable contribution

45. Serves put a further contention that the deceased made, and Serves received, the benefit of the payments without any intention on the part of either that there would ever be any recovery from Serves (or, for that matter, any other entity representing his family interests), so that no right of equitable contribution arose.

46. I uphold this contention.

47. In Global Consulting Services Pty Ltd v Gresham Property Investments Ltd [2018] NSWCA 255; (2018) 365 ALR 143 at [65] and following, Leeming JA said that it is uncontroversial that the right of contribution will not be available if there is a contrary “common intention falling short of a legally enforceable agreement”. The parties’ intentions are not references to their subjective intentions but rather the intentions to be imputed to them having regard to the transaction in its context: see Muschinski v Dodds (1985) 160 CLR 583 and Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8.

48. That is this case.

49. The common intention on the part of the deceased and Serves that contribution would not be available can be inferred from each of the following circumstances on its own. The cumulative effect leaves no real room for doubt:

50. Serves was a creature of the deceased which held one asset for the benefit of his family and did not have the wherewithal in its own right to pay;

51. over the years, the deceased paid everything and never asked for anything;

52. there is no evidence in any accounting or other material placed before the court which reflects any entitlement or expectation on the part of the deceased to be reimbursed for the payments he made or in the records of Serves of any corresponding liability;

53. various members of the family, and others, used the property without paying any rent or other expenses;

54. to have expected payment in either direction would have amounted to asking the family to pay to and receive money itself; and

55. the deceased’s handwritten letter reflects an intention that his assets would maintain the Property.

56. It follows that the cross-claim fails.

Limitation Act Defence

51. Finally, Serves contends that the claim is statute-barred under the Limitation Act 1969 (NSW) in any event.

52. The following are the relevant sections of the Limitation Act:

14 General

(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims—

(a) a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed,

…

23 Equitable relief

Sections 14, 16, 17, 18, 20 and 21 do not apply, except so far as they may be applied by analogy, to a cause of action for specific performance of a contract or for an injunction or for other equitable relief.

53. The last payment subject of the cross-claim, was made on 16 May 2011 (the last payment of a liability conceded by Serves to be joint, for rates, was made on 18 August 2010). If s 14 (1)(a) applies, all components of the claim were statute barred at the latest by 17 May 2017. These proceedings were commenced on 9 December 2022 (although the cross-claim was only filed on 18 May 2023 by s 74(1)(b)(i) of the Limitation Act).

54. The question is whether s 23 applies the time bar in s 14(1)(a) to Hamilton’s cause of action because the cause of action is analogous to one founded on contract, including quasi contract.

55. The common obligation in discharge of which the payments admitted by Serves were made was, in each case, a statutory joint and several obligation on the co-owners of the Property: Local Government Act 1993 (NSW) s 560; Land Tax Management Act 1956 (NSW) s 27; Strata Schemes Management Act 1996 (NSW) s 78. The precise source of the joint obligation to pay water rates and charges was not identified. Both sides appeared to accept that such an obligation exists.

56. There is no doubt an equitable right of contribution in an owner of land against a co-owner for payment of a pro tanto share made by the owner of a co-ordinate obligation (equity now covers the field – Burke v LFOT (supra)).

57. The difficult question is whether that right is analogous to the legal right in contract or quasi contract referred to in s 14(1)(a).

58. The Court was not referred to any direct authority on the point (maybe because there is no analogy or no authority).

59. The statutes imposing the obligations give no such right of contribution.

60. Reliance was placed on Barber v De Prima (2018) 97 NSWLR 932; [2018] NSWSC 601 in which Robb J made reference to and followed McLelland J (subsequently CJ in Eq) in Lang v Le Boursicot (1993) 5 BPR 11,782 which was a dispute between co-guarantors. McLelland J referred to the fact that a claim for contribution between co-guarantors under the same instrument may be brought as a claim at law for a simple contract debt in quasi contract. McLelland J considered, and Robb J agreed, that s 14(1)(a) applied by analogy to a claim by a guarantor for contribution from another guarantor where the very same facts gave rise to a claim for contribution in equity and the equivalent claim at common law: Barber v De Prima at [45].

61. This holding does not solve the difficulty in this case. While there is clearly a right to contribution in equity, I am unpersuaded that there is also a parallel right at law or, if there is, that it is a right which can be analogised to contract or quasi contract, as opposed to being exclusively equitable.

Conclusion

65. The cross-claim is dismissed.

66. I provisionally order that the cross-claimant pay the costs of the cross-defendant. This order will solidify 7 days after delivery of this judgment, unless a party notifies the others, and my Associate in writing that some other order is sought, specifying briefly the basis for it, in which event the order will not take effect and I will give directions for the resolution of costs.

67. The exhibits are to be returned.

**********

Endnote

Account total at 30 June 2011 $272,859.48 plus the following amounts 29/04/2004 Telephone $14.49; 1/07/2005 Telstra $3.45; 6/07/2005 Telstra $3.45; 6/08/2005 Telstra $4.63; 6/09/2005 Telstra $4.57; 6/10/2005 Telstra $3.57; 6/01/2006 Telstra $9.55; 6/03/2006 Telstra $4.19; 3/09/2008 Landscape works $6,630.80; 7/01/2009 Cleaning $75.00; 22/01/2009 Water $141.00; 14/07/2009 Cleaning $75.00; and 1/10/2009 Cleaning $75.00. Totalling $279,904.06.