Taylor v Taylor [2021] VSCA 352

4 In July 2016, the respondent commenced a proceeding against the applicant in the Magistrates' Court at Shepparton, seeking damages for breach of contract and equitable relief based on promissory estoppel.

5 Following a trial in the Magistrates' Court in June 2018, a magistrate upheld the respondent's promissory estoppel case and ordered the applicant to pay the respondent the sum of $100,000, being the jurisdictional limit of the Magistrates' Court. The magistrate said that, if it were not for the jurisdictional limit, the respondent would have been entitled to equitable compensation of $111,500.[1]

6 Pursuant to s 109 of the Magistrates' Court Act 1989, the applicant appealed against the magistrate's orders requiring him to pay the respondent $100,000 plus interest plus costs. On 14 June 2019, that appeal was heard by Daly AsJ sitting in the Trial Division. On 4 September 2019, pursuant to reasons published on 20 August 2019,[2] her Honour set aside the magistrate's orders and made an order that 'the assessment of damages be remitted to the Magistrates' Court ... to be conducted according to law'.

7 On 16 April 2020, following the receipt of further submissions by the parties, the magistrate delivered reasons for judgment in which she 'assessed [the respondent's] damages for promissory estoppel in the amount of $76,500'.[3]

8 Pursuant to s 109 of the Magistrates' Court Act, the applicant again appealed to the Trial Division. As with his first appeal, the applicant's second appeal was heard by Daly AsJ. On 29 June 2021, her Honour dismissed the applicant's second appeal.[4]

9 On 27 August 2021, the applicant filed an application for an extension of time to file an application for leave to appeal to this Court against the associate judge's dismissal of his appeal from the magistrate's second assessment of the respondent's equitable compensation. For the reasons that follow, that application will be refused.

10 In the first trial, the respondent (as plaintiff) sought equitable compensation in respect of amounts he had incurred in reliance upon the applicant's promise that he could live in the home on the property rent free for the rest of his life. He also sought an amount equivalent to the value of the rent he had paid and would have to pay as a result of the applicant's failure to honour his promise.

11 In support of his claim, the respondent gave evidence of the amounts he had spent purchasing, relocating and fitting out the home. Various photographs were tendered of the home and its surrounds. The evidence was that the home was a substantial one, with four bedrooms.

12 The respondent gave evidence that, after being evicted from the property, he and Ms Everett moved to a house in Numurkah, which they rent for $250 per week. The respondent sought equitable compensation referable to his share of the rent he was now required to pay ($125 per week).

13 As I have already said, the magistrate upheld the respondent's claim based in promissory estoppel. She assessed the respondent's equitable compensation at $35,000 for the cost of purchasing and relocating the home, together with $76,500 relating to rent the respondent had paid and would have to pay as a result of the applicant evicting the respondent.

14 The applicant's appeal against the assessment of equitable compensation (the first appeal) was upheld on two grounds: the principal ground being that, in making an award which comprised an amount equivalent to that expended by the respondent and compensation for failing to fulfil the promise of rent free accommodation, the magistrate doubly compensated the respondent.[5]

15 Having made this conclusion, the associate judge then said the following about the proper approach to be taken in the assessment of equitable compensation:

I agree with the submissions of counsel for the respondent that the respondent was entitled to compensation for the appellant resiling from his promise to allow the respondent to remain at the dwelling rent free for the rest of his life, and that the particular features and benefits associated with living at the dwelling (as opposed to living in other accommodation of a lesser standard) were relevant matters to be taken into account in calculating that compensation, given that compensation was payable for the appellant's failure to make good the representation he had made. However, the proper approach to compensation in that regard would have been to calculate the damages from the date of the respondent's departure from the property based upon a notional rental value for the dwelling, as opposed to the rent actually paid by the respondent for alternative accommodation after the date of his departure from the property.

...

Accordingly, the appeal should be allowed, and the assessment of damages should be remitted to the Magistrates' Court to be determined according to law. It was conceded by counsel for the appellant that the respondent would not be bound by the manner in which he put his case for damages below. Given the observations I have made regarding the manner in which the respondent could have put his case regarding the calculation of expectation damages (that is, based upon the rental value of the dwelling, rather than the rent actually paid and payable by him after departing the property) the parties may wish to reflect upon the cost effectiveness of continued disputation regarding this matter.[6]

16 These passages, referred to by the applicant in this Court[7] as 'the comment' (which description I will use as appropriate) were contended by the applicant to be critical in the hearing of the remitted proceeding and the second appeal.

17 In her order remitting the proceeding to the Magistrates' Court, the associate judge recorded in 'Other Matters':

For the avoidance of doubt, the assessment of damages is to be conducted afresh, with neither party being bound by the findings made previously, or by the manner in which they put their case previously.

18 In the result, the magistrate determined the remitted proceeding on the evidence that had already been called and the further submissions of the parties. In the Second Trial Reasons, the magistrate recorded the associate judge's 'remark that the proper approach to compensation ... would have been to calculate upon a notional rental value for the dwelling [the home], as opposed to the rent actually paid by the respondent'.[8]

19 After referring to the evidence, the magistrate said:

The defendant [the applicant] promised the plaintiff [the respondent] that he could reside at the dwelling rent free for the rest of his life. It was a commercial arrangement in my view. Following the passing of the plaintiff and the plaintiff's late wife, the defendant would gain the commercial benefit of an additional dwelling upon his property both in terms of capital improved value of the land and the rental that he may obtain if he chose to.

The plaintiff at the time of the initial hearing was 80 years of age ... . The ABS Life Tables calculate the plaintiff's life expectancy by statistical average at nine years. I calculate his future loss from 13 July 2018 to date and for his future life expectancy at 499 weeks at $125 per week being $62,375. This calculation makes no adjustment for any exposure that the plaintiff may have in the event he is unable to continue to mitigate his rental costs with his friend Lorraine Everett due to breakdown of that friendship or similar vicissitude. I consider this award of damages a modest and reasonable value for the plaintiff's disappointed expectations.

Accordingly, I assess the plaintiff's claim in damages for promissory estoppel in the amount of $76,500, being the rent incurred by the plaintiff from 13 May 2016 to 13 July 2018 in the amount of $14,125 together with the plaintiff's rental loss from 14 July 2018 to date and continuing in the amount of $62,375.[9]

In so holding, the magistrate accepted that the rent the respondent was required to pay was the rent incurred occasioned by the applicant's failure to make good his promise, and that the respondent had mitigated his past and ongoing rental loss by living with Ms Everett.[10]

20 The applicant appealed the magistrate's second assessment of equitable compensation on two grounds as follows: first, the magistrate erred in awarding the respondent a sum calculated by reference to the amount of rent he was now paying, rather than by reference to the 'notional annual rental value of [the home]'; and secondly, the magistrate erred in awarding 'substantial damages rather than nominal damages' in circumstances where evidence was available, but not led, of the 'notional annual rental value of [the home]'.

21 In detailed and thorough reasons, the associate judge set out the relevant history of the proceedings between the parties, including her reasons for allowing the first appeal, the parties' submissions to the magistrate on the remitted hearing, the Second Trial Reasons and the parties' submissions on the second appeal. The associate judge rejected the applicant's grounds of appeal. Specifically, the associate judge rejected a submission by the applicant that the magistrate erred in not assessing equitable compensation on the basis of the comment.[11] The associate judge said:

I do not agree with Michael's [the applicant's] submission that the comment was so central to the resolution of the first appeal such as to make it binding upon the learned magistrate at the remitter. In my view, the fundamental issue in the first appeal was the double‑counting issue: that is, my finding that it was open to the learned magistrate to award compensation on a "reliance" basis, or on an "expectation" basis, but not both. That was the legal principle upon which the first appeal was decided. The comment did no more than describe one conceptually sound mechanism by which compensation for Max's disappointed expectations could be calculated: it did not lay down any prescriptive rule which the learned magistrate was required to slavishly follow at the remitter. I agree that, provided that she did not fall into error by engaging in double‑counting, or by failing to apply the general principles governing the award of equitable compensation, her Honour was not constrained by the comment in calculating the appropriate compensation for Max's disappointed expectations.[12]

22 After referring to Giumelli v Giumelli,[13] Donis v Donis,[14] Delaforce v Simpson-Cook,[15] Sidhu v Van Dyke[16] and Harris v Harris,[17] the associate judge concluded that it was open to the magistrate to calculate equitable compensation based on the respondent's actual past and future rental costs, and that there was no appealable error in the magistrate's decision.[18]

23 On 27 August 2021, the applicant filed the application for an extension of time to file an application for leave to appeal (to which I have already referred); an affidavit in support of that application, sworn by his solicitor, James Thompson; and an outline of submissions in support of the application. The application for the extension of time provided that the application was made on the grounds that 'the proposed appeal has a real prospect of success'; 'the applicant should be allowed to pursue the appeal despite being out of time'; and 'the respondent will not suffer any significant prejudice by virtue solely of an extension of time in which to file the application for leave to appeal being granted'.

24 In the applicant's outline of submissions in support of the extension of time application, it was asserted that the last day for filing the application for leave to appeal was 11 August 2021. Rule 64.05(1)(a) of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules') relevantly provides that the application for leave to appeal in a case such as the present was required to be filed within 42 days after the decision to which the application for leave to appeal relates. As the associate judge's decision was made on 29 June 2021, the last day for filing the application for leave to appeal was in fact 10 August 2021.

25 The respondent opposes the application for an extension of time. He contends that the proposed appeal 'is not meritorious'; the explanations given for the applicant's delay 'are inadequate and do not justify an extension'; and the costs of any application for leave to appeal 'would be disproportionate to [the] subject matter of the proceeding particularly given the history of the matter'.

26 The application for an extension of time is made under r 64.08 of the Rules. The principles to be applied in respect of an application under that rule were recently summarised by Kaye and Niall JJA in Beling v Victorian Legal Services Commissioner.[19] In that case, their Honours said:

The underlying object of that rule is to provide to the Court a discretion to extend time with a view to avoidance of an injustice. In Kambouris v Kiatos, McLeish JA and Riordan AJA identified the principal relevant factors that are ordinarily taken into account on such an application in the following terms:

In deciding whether an extension of time to seek leave to appeal should be granted, the Court will take into account several factors, including: (a) the length of delay; (b) the reasons for delay; and (c) the extent of any prejudice suffered by the respondent if the extension is granted. An extension of time will not be granted if the appeal 'is so devoid of merit that it would be futile to do so'.

The exercise of the discretion must be undertaken taking into account that the overarching purpose of the Rules is to facilitate 'the just, efficient, timely and cost effective resolution of the real issues in dispute', and that, upon the expiry of the time limited for the appeal, the respondent had a vested right to retain the judgment obtained at first instance unless the application for an extension of time is granted.[20]

27 In the present case, it is the reasons for the applicant's delay and the merits of the applicant's proposed grounds of appeal that are most relevant to the application for the extension of time. Accordingly, it is to those matters that I will now turn.

28 In his affidavit in support of the application for an extension of time, Mr Thompson deposes to the following:

• There were COVID-19 lockdowns between 15 and 20 July 2021, and again between 5 and 9 August 2021, and then from 21 August 2021 up to the time of the filing of the application for an extension of time.
• The COVID lockdowns caused disruption to the operation of his legal practice, with significant time being expended in administrative arrangements regarding the operation of the practice during lockdown. 'Valuable time' was spent cancelling and rebooking appointments; filing applications for extensions of time; and identifying matters which required urgent attention.
• During the lockdowns, support staff who usually worked on-site to assist Mr Thompson were 'unable to access the office on a normal basis'. This created a difficulty for Mr Thompson to perform his work in a timely manner.
• During the lockdown commencing on 21 August 2021, professional staff at the office had been subject to self-isolation as a result of the then current outbreak of COVID-19 in Shepparton.
• It was not feasible for Mr Thompson to move the relevant file from his office - it occupying 'the best part of an entire filing cabinet and several large boxes'.
• The applicant was unvaccinated and told Mr Thompson (on some unspecified occasion or occasions) that 'he does not travel beyond his home into public areas, unless absolutely necessary'. The applicant '[had] been prepared to attend [Mr Thompson's] office on one occasion only since 29 June 2021'.
• The most appropriate and efficient means 'of progressing complex matters such as these proceedings is taking instructions and provide (sic) advice on a face-to-face basis with clients, and with ready access to the full file so that relevant documents can be viewed by all parties simultaneously and there is a reduced possibility of misinterpretation of requests for instructions and enquiries made by clients'.
• The application for leave to appeal in the present case had 'had to have been progressed principally by telephone and email exchanges between [Mr Thompson's] office, counsel and the applicant. Such a process [had] not been conducive to the efficient and timely preparation of the necessary documentation for the application.'

29 Immediately it may be observed that the explanation for the delay occurring in this case is at a high level of generality, descending to no detail about the precise communications which occurred between the applicant, his solicitor and counsel. Ordinarily, one might have expected an explanation which set out the dates and times of relevant communications; details of when the applicant first gave instructions to his solicitor to investigate the possibility of an appeal; similar details about when the applicant first gave instructions to his solicitor to seek leave to appeal; and specific details about the particular difficulties created by any extrinsic circumstances (in the case, the lockdowns and related consequences) so far as the pursuit of the applicant's case was concerned. No details of the kind ordinarily expected have been provided on behalf of the applicant.

30 Moreover, it is also to be noted that there is simply no explanation as to what if any steps the applicant or his solicitor took between the date on which the associate judge gave judgment (29 June 2021) and the commencement of the first lockdown (15 July 2021); or the period between 21 July 2021 and 4 August 2021; or the period between 10 and 20 August 2021. There is much to be said for the proposition that during these periods there was more than adequate time for the applicant to consider (and if so advised) commence a proceeding in this Court seeking leave to appeal from the decision of the associate judge made on 29 June 2021.

31 The matters in dispute between the parties during the hearing of the second appeal were quite confined, relating only to the assessment of equitable compensation. To the extent that the applicant submitted that the proceeding at that stage was a complex one, or that there was any significant complexity in determining whether an application for leave to appeal should be commenced, that submission must be rejected. The applicant has not given any explanation about why his application for leave to appeal could not have been 'progressed ... by telephone and email exchanges' as it ultimately was progressed according to Mr Thompson's affidavit.

32 Additionally, there is a total lack of detail or explanation about the applicant's apparent preparedness to attend Mr Thompson's office on only one occasion between 29 June 2021 and 27 August 2021. Mr Thompson's affidavit is silent as to whether the applicant actually attended and whether any and if so what instructions were given by the applicant to his solicitor.

33 Shortly put, notwithstanding that the application for an extension of time was filed only 17 days after the time for filing a notice of application for leave to appeal had expired, the applicant's explanation for his failure to commence his application for leave to appeal in this Court within the time prescribed by the Rules is unsatisfactory.

34 The applicant advances four proposed grounds of appeal as follows:

1. The Honourable Associate Justice Daly erred in upholding Magistrate Medina's calculation of compensation due to the respondent by reference to the rent being paid by the respondent for alternative accommodation. Her Honour should have held that compensation due to the respondent was to be calculated with reference to the notional rental value of the subject dwelling.

2. Her Honour erred in upholding Magistrate Medina's decision to award substantial damages to the respondent in the absence of evidence as to the quantum of damages in circumstances where such evidence was readily available. Her Honour should have ordered that the respondent's claim in the Magistrates' Court be dismissed, or alternatively remitted the proceeding to the Magistrates' Court for a calculation of compensation according to law.

3. Alternatively, her Honour erred in upholding Magistrate Medina's calculation of compensation due to the respondent by reference to the rent being paid by the respondent for alternative accommodation in the absence of evidence that the alternative accommodation was comparable to the subject dwelling. Her Honour should have ordered that the respondent's claim in the Magistrates' Court be dismissed, or alternatively remitted the proceeding to the Magistrates' Court for a calculation of compensation according to law.

4. Her Honour erred in holding that Magistrate Medina was not constrained by the comment made by her in Taylor v Taylor [2019] VSC 533 at paragraphs [28] and [42] ("the Comment") as to the proper approach to be taken with respect to the calculation of compensation due to the respondent, and was not bound to calculate compensation due to the respondent in accordance with the Comment.

35 Before dealing specifically with the applicant's proposed grounds of appeal, it is necessary to say something about the way in which the parties have conducted this case from its inception.

36 Notwithstanding the existence of authorities which support the proposition that when awarding relief to enforce a promissory estoppel (as distinct from cases involving proprietary estoppels) the 'minimal equity' necessary to do justice to the plaintiff is a governing principle,[21] the applicant's claim at trial (and on appeal) was argued on the basis that the 'minimum equity' approach should not be taken when assessing the respondent's entitlement to equitable compensation. Indeed, in written submissions made by the respondent prior to the delivery of the First Trial Reasons, the respondent submitted:

Fundamentally, equity seeks to protect a representee from detriment that flows from a representor resiling from a promise. Although equity does not seek explicitly to give the minimum relief, it does seek to do justice between the parties in the circumstances of the case. Some cases warrant relief of small monetary outlays, whereas others warrant holding the representor to the promise in full; other cases find some little ground.

37 Thus, no issue was taken by the applicant (either before the magistrate or before the associate judge) with the application of the principles set out in Donis, Delaforce, Sidhu (and later, during the second appeal) Harris to the assessment of the respondent's equitable compensation. Both sides accepted (and in particular the applicant accepted) the applicability of the principles relating to the assessment of equitable compensation in cases involving proprietary estoppels as if they also applied to the promissory estoppel found to exist in the present case.[22]

38 Having regard to the evidence called at trial, and the way the parties chose to run the litigation (both at trial and on appeal to the associate judge) there is no substance in any of the applicant's proposed grounds of appeal. The associate judge was correct, for the reasons she gave, when she determined that 'the comment'[23] did not bind the magistrate on the remitted hearing.[24]

39 Moreover, and in any event, the applicant's submission that there was no evidence about the rental value of the home is equally without merit. The evidence before the magistrate was that the home was a four-bedroom home. Photographs of the home were tendered in evidence. The magistrate was well-entitled to conclude that the notional weekly rental value of the home was likely to be in excess of the $125 per week claimed by the respondent. The fact that the respondent's claim was calculated by reference to his half share of the rent which he was required to pay for the house to which he has moved with Ms Everett is really not to the point. The question before the associate judge on the second appeal was, in substance, whether there was any error of law involved in the magistrate's conclusion that an award of equitable compensation, based on a figure of $125 per week for rent, was not open or involved some other error of law.

40 The associate judge held that, on the evidence called and tendered at trial, it was open to the magistrate to assess the loss of the promised benefit (rent free accommodation) at $125 per week. That conclusion was plainly correct. More particularly, the relief awarded by the magistrate has not been shown to have been disproportionate.[25] To the contrary, there was no error in the magistrate's conclusion that the amount she ultimately assessed was, on the evidence, 'a modest and reasonable value for [the respondent's] disappointed expectations'.[26] Similarly, the associate judge did not err in dismissing the applicant's appeal from the magistrate's assessment of the respondent's entitlement to equitable compensation. Put simply, the magistrate did not err in law in any of the ways contended for by the applicant.

41 The applicant's explanation for his failure to commence his application for leave to appeal in this Court within time is unsatisfactory. Moreover, the applicant's proposed appeal does not have any real prospect of success, meaning that his application for leave to appeal (if it had been made in time) would have to be refused.[27] It would thus be futile to grant the applicant the extension of time which he seeks. For these reasons, the applicant's application for an extension of time within which to file his application for leave to appeal is refused.

42 If either party wishes to make any submission about costs, such submissions (of no more than two pages in length) are to be filed and served within 7 days, and the issue of costs will be dealt with on the papers.

[1] Taylor v Taylor (Unreported, Magistrates' Court of Victoria, Magistrate F Medina, 13 July 2018) ('First Trial Reasons').

[2] Taylor v Taylor [2019] VSC 533 ('First Appeal Reasons').

[3] Taylor v Taylor (Unreported, Magistrates' Court of Victoria, Magistrate F Medina, 16 April 2020) [19] ('Second Trial Reasons').

[4] Taylor v Taylor [2021] VSC 381 ('Second Appeal Reasons').

[6] Ibid [28], [42] (emphasis in original).

[7] See proposed ground 4 of the application for leave to appeal.

[11] First Appeal Reasons [28], [42].

[13] [1999] HCA 10; (1999) 196 CLR 101 ('Giumelli').

[14] [2007] VSCA 89; (2007) 19 VR 577 ('Donis').

[15] [2010] NSWCA 84; (2010) 78 NSWLR 483 ('Delaforce').

[16] (2014) 251 CLR 505 ('Sidhu').

[17] [2021] VSCA 138 ('Harris').

[19] [2021] VSCA 256.

[20] Ibid [47]-[48] (citations omitted).

[21] See, eg, ACN 074 971 109 Pty Ltd v National Mutual Life Association of Australasia Pty Ltd [2008] VSCA 247; (2008) 21 VR 351, 394 [169]. But cf Sidhu (2014) 251 CLR 505 (in particular at 511 [1], 529 82] and 530 [85]).

[22] See further Zugic v Vesuvius Australia Pty Ltd [2020] NSWSC 106, [269]-[270] (Ward CJ in Eq); Moore v Aubusson [2020] NSWSC 1466 [343]-[346] (Ward CJ in Eq); J D Heydon, M J Leeming, P G Turner, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis) [17-285].

[23] First Appeal Reasons [28], [42].

[25] See generally Delaforce [2010] NSWCA 84; (2010) 78 NSWLR 483, 495 [77] (per Handley AJA).

[27] See s 14C of the Supreme Court Act 1986.