(b) Whether the plaintiffs are estopped by the judgments of Gzell J and Biscoe AJ from contending that the Somersby property should be treated as a joint venture asset, and sold with the proceeds to go to the joint venture and credited against money owed by Mr Thompson to the joint venture with any balance being held on behalf of the joint venturers.
Estoppel
24 There can be no doubt that the two parts of the action in the proceedings before Gzell J and Biscoe AJ were argued and determined on the basis of that the payments from the proceeds of sale of Seaforth so far as they were applied to the Somersby property should be treated as payments to Thompson from the joint venture. They were accounted as such and when taken into account gave rise to a liability in Thompson to the joint venture. It would be no different from a partner overdrawing entitlements being found in a suit for partnership accounts to be liable to the partnership to the extent of the overdrawn account.
25 The question is whether, having proceeded on that basis and accepted the accounts were to be taken on that basis, the plaintiffs can in another action seek to have the land brought to account as a joint venture asset. If that can be done there can be no doubt there is a possibility and really a certainty of conflicting judgments. To some extent the plaintiffs seek to overcome this problem by seeking what would be a charge over the proceeds of sale of Somersby sufficient to enable the debt Thompson owes to the joint venture to be paid but at the same time requiring any surplus to be added to the controlled moneys account and thereafter to be credited to the joint venture. So far as the first point is concerned, what this really amounts to is an attempt to get security for a judgment debt owed by one venturer to the joint venture partners. So far as the balance is concerned, it would require rewriting of the joint venture accounts.
26 The plaintiffs stated many times that they had attempted to bring the claim to include the Somersby land before Gzell J and Biscoe AJ but that those judges had said that this was not a matter before them. Nevertheless, Acting Justice Biscoe had allowed a motion to be filed and ultimately Mr White said the plaintiffs accepted a statement made by Palmer J that separate proceedings should be commenced.
27 I do not think that this is an answer. The accounting action treated the payments towards the Somersby as raising a debt to the extent to which those payments combined with others resulted in an overdrawing. Had an alternative claim been made to have that property included as a joint venture asset then prior to any judgment the plaintiffs would have been required to elect which way they wished to go. Had they sought the judgment which in fact they have obtained they would not have been able to seek judgment on a joint venture claim as there could have been different results. Any rights that they had in connection with the joint venture claim would have merged in the judgment. They are estopped from bringing the joint venture claim here at least as against Mr Thompson.
28 Although the decision of Justice Brennan in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 was founded on different reasons from those in the joint judgment he nevertheless set out clearly the basis of election and merger. The following passage commences on page 661:
"When the same facts support rights to different remedies against the same defendant, the plaintiff cannot recover a judgment giving a remedy in respect of more than one right ( United Australia Ltd v Barclays Bank Ltd [1941] AC 1; Mahesan v Malaysia Housing Society [1979] AC 374. He may pursue his remedies concurrently in the same action, but he is put to his election before judgment as to which remedy he shall have. And when judgment is entered, all of the rights which he might have claimed in that litigation are merged in the judgment. Lord Atkin in United Australia Ltd v Barclays Bank Ltd [1941] AC at p 30 defined the effect of a judgment upon alternative remedies:
'Up to that stage the plaintiff may pursue both remedies together, or pursuing one may amend and pursue the other: but he can take judgment only for the one, and his cause of action on both will then be merged in the one.'
The party entitled to relief cannot improve his position by bringing separate actions. Though he may elect between inconsistent remedies pursued in the one action, or between the actions to be pursued in order to recover a judgment giving the remedy he chooses, the merger in the judgment first recovered of a right to another remedy takes effect by operation of law. When those rights (or causes of action) are extinguished, no further litigation may be pursued to recover a second judgment upon them."
29 It is necessary to deal with the claim against Mrs Thompson separately. She was separately represented and so the claim might be thought to be a claim separate from the claim which cannot be brought against her husband. Nevertheless the difficulty about that is that the claim for relief is made in respect of the whole of the Somersby land not just part of it and this is relief which cannot be given.
30 It is I think necessary to set out certain additional facts relevant to this part of the claim. Mr and Mrs Thompson had owned a house at Palm Beach. Mr Thompson got into financial difficulties and the house was sold in 1997. After payment out of secured and unsecured liabilities there was a surplus remaining of $285,000. Mrs Thompson said that it was agreed at the time of the sale that Mrs Thompson was entitled to the whole of the surplus and would have been entitled to more if the surplus had been greater. In other words, a substantial part of the sale price was paid out to discharge debts of her husband.
31 The Seaforth property was purchased in 1997 and $285,000 went towards the purchase. Although Mrs Thompson says that she provided that money by way of capital contribution to purchase, it was treated in the accounting as a contribution by Mr Thompson although it was always acknowledged that it came from his wife.
32 In 2000 Mr and Mrs Thompson entered into what was described as a Deed of Agreement and Trust which is dated 18 April 1997. Mrs Thompson said that was the date of the verbal agreement in the same terms and that was why it was backdated to that date. The recitals and operative clauses of the deed are as follows:
"A In February 1997 Byron Thompson & Jennifer Thompson's residence at 8 Ebor Rd. PALM BEACH was sold for $785,000.00 to extinguish Byron Thompson's business debts.
B It was agreed that all remaining monies belonged to Jennifer Thompson as part of her rightful fifty percent ownership of said Palm Beach property as the wife of Byron Thompson.
C The remaining funds of $285,000.00, notably less than Jennifer Thompson's rightful fifty percent of said property, were dutifully placed into Jennifer Thompson's personal Advance bank account at Neutral Bay.
D Byron Thompson further agreed that Jennifer Thompson was still entitled to the full balance of her fifty percent ownership of said property to be paid by Byron Thompson when affordable in the future.
NOW THIS DEED WITNESSES THAT :
1 Jennifer Thompson agrees to provide Byron Thompson with $285,000.00 of her own monies in order that Byron Thompson may purchase a block of land at 65 Ellery Parade SEAFORTH.
2 The ownership of said portion of land Lot 276 is to be held in trust on Jennifer Thompson's behalf by Byron Thompson.
3 Byron Thompson agrees to obtain a bank mortgage loan from the Advance Bank for $270,000.00 to pay the balance of the purchase price of $555,000.00 for said portion of land.
4 Jennifer Thompson is to maintain equitable ownership with associated rights allowing that at any time in the future Jennifer Thompson may place a caveat or mortgage upon the title of said property to protect her personal interests.
5 Byron Thompson affirms that he still owes Jennifer Thompson a further $107,500.00 as the balance of her fifty per cent share of said PALM BEACH property.
6 Byron Thompson further affirms that the agreed rate of interest on the aforementioned loan is 10 per cent per annum simple interest."
33 Some of the evidence of Mrs Thompson as to the deed was untrue or at least inaccurate. Nevertheless it is clear that the deed was in fact recommended and drafted in part by Mr White. The important fact for present purposes is that Mrs Thompson does not claim she had a proprietary interest in Seaforth. Her evidence in her affidavit of 13 February 2009 is that her husband owed to her at the time of the purchase of Somersby $392,500 plus interest at 10 per cent from 18 April 1997 and that she was entitled to repayment of this by her husband. Paragraph 20 of her said affidavit is as follows:
"The Deed of Agreement and Trust stipulated that I was to be repaid this money when affordable in the future. I regarded my one-half unencumbered interest in the Somersby property as being paid for from moneys owed to me by my husband pursuant to the Deed of Agreement and Trust."
34 None of this really conflicts with the facts found in the earlier proceedings upon which the accounts were based. When the Seaforth property was sold there were in fact funds available to pay the amounts due to Mrs Thompson and the other creditors declared by Biscoe AJ. As between Mrs Thompson and her husband she was entitled to those moneys. As between Mr Thompson and his co-venturers he had been credited with those moneys before being debited with the $774,709 purchase moneys for Somersby. While it is not an altogether easy question, I consider it likely that as a result of the deed which was known to Mr White, Mrs Thompson became a privy of her husband so far as her claim to benefit from Seaforth was concerned and as such became entitled to the benefit of the estoppel available to him. However, it is not at all clear that this defence was understood and pleaded and no submissions were really directed to it so I will not base my judgment on it. The second defendant does rely on estoppel and has pleaded an estoppel in paragraphs 25 - 31 of her defence which are as follows:
"25 In further answer to paragraph 24, Mrs Thompson says that in no cross claim or claim in proceedings between the parties in relation to the joint venture has a claim been propounded for an interest in the Somersby property against Mr Thompson or Mrs Thompson until the proceedings herein.
26 At all material times, in the proceedings between the parties, White and Libut have claimed that Mr Thompson is or may be on a proper accounting for the joint venture, indebted to them and/or other companies and entities, by reason of the alleged joint venture dealings, including the payments referred to in the claim herein, and have obtained judgment for an amount that includes taking into account each of the amounts referred to herein as distributions of joint venture property or the repayment of moneys advanced or contributed by Mr Thompson in the acquisition and improvement of the Seaforth land or in relation to the said joint venture.
27 White and Libut obtained judgment on the basis aforesaid against Mr Thompson.
28 By the conduct aforesaid, White and Libut adopted the transactions of payment as transactions of the joint venture to be taken into account on a joint venture accounting as repayment of moneys, drawings or distribution of profits by Mr Thompson.
29 By reason of the conduct aforesaid White and Libut are estopped from commencing or prosecuting herein as proceedings res judicata by reason of the judgment and by reason of the fact that no claim that could have been made was made in any proceedings in relation to a claim of an interest in the Somersby land by trust or otherwise.
30 By the conduct of the proceedings and the judgment obtained on the basis aforesaid, White and Libut elected to affirm the payments referred to in the claim herein as repayment of moneys advanced or contributed by Mr Thompson or as distributions to Mr Thompson of joint venture property, and obtained judgment accordingly.
31 By reason of the conduct aforesaid, White and Libut are estopped from alleging herein a right inconsistent with the right on which judgment has been obtained."
35 It has been found as a fact that the money that came from Mrs Thompson was a contribution by Mr Thompson to the joint venture and has been credited to his account. It has been found as a fact that the drawings from the Seaforth property which went to Somersby were a distribution to Mr Thompson of joint venture moneys. I consider the plaintiffs are bound by those findings. It would be an abuse of process for the plaintiffs to make some claim to proprietary interest in the whole or part of the Somersby property when first, their accounting proceeded on a different foot and second, when at least the interest of Mrs Thompson in the property was purchased from moneys due to her as a debt from her husband which were credited to him in the joint venture accounts.
36 While a claim for interest in Somersby could have been brought as an alternative claim in the proceedings 2684/03 with the plaintiffs bound to elect between alternative remedies had that been done Mrs Thompson as joint registered proprietor would have had to be joined as a defendant. As any right to bring such a claim against Mr Thompson has now merged in the judgment obtained the plaintiffs ought to be estopped from bringing against Mrs Thompson a claim which if successful, would result in a judgment conflicting with that obtained. That would in my opinion be a clear abuse of process even though an additional party is involved. It is not an abuse in the nature of Reichel v Magrath (1889) 14 App Cas 665 as it is not the same case but it is a case which can no longer be brought against one defendant but which if it had been brought would have had to be brought against Mrs Thompson as well. The orderly administration of justice cannot allow this to be done. Cases where an estoppel has been found not withstanding an additional or new defendant has been involved include MCC Proceeds Inc v Lehman Bros International (Europe) [1998] 4 All ER 875; Morris v Wentworth-Stanley [1999] 2 WLR 470 and Rippon v Chilcotin [2001] NSWCA 142. The general principles in those cases as to abuse of process apply here.
37 I add that irrespective of estoppel the claim against the share of Mrs Thompson in the Somersby property would fail. The plaintiffs were well aware that the contribution of Mr Thompson to the purchase price of Seaforth came from Mrs Thompson. When funds were available she was entitled to repayment. The price of a one half interest in Somersby was less than the debt.
Conclusion
38 The proceedings should be dismissed with costs.