New South Wales Trustee and Guardian v Philpott

1. [1]

   The Plaintiff, the New South Wales Trustee and Guardian, is the executor of the estate of the late Elizabeth Harris. The deceased died on 9 September 2015 leaving a will dated 24 March 2001. Probate was granted of that will on 20 January 2016.

2. [2]

   One of the assets of the estate is a home unit at 3/394 Bronte Road, Bronte. The Plaintiff brings proceedings against the Defendant seeking possession of the property. The Defendant is the sister of the deceased.

3. [3]

   In her Defence filed 3 March 2017 the Defendant denies being presently in occupation of the property but says that she is entitled to an order transferring the property to her ownership on the basis set out in a Cross-Claim filed the same day. An email to the Plaintiff’s solicitors from the Defendant’s son, Andrew Philpott, on behalf of the Defendant dated 16 September 2016, asserted that the property is in her possession “and shall remain so”. It appears that estate agents engaged on behalf of the Defendant have arranged for the leasing of the property to tenants who currently occupy the property.

4. [4]

   The Cross-Claim pleads that prior to the deceased’s death the deceased encouraged and induced in the Defendant an expectation that the ownership of the Bronte property would be transferred to her prior to or upon the death of the deceased. It pleads further that on 17 July 2014 the deceased signed a transfer without monetary consideration purporting to transfer the property to her in consideration “for love and affection as a gift to my sister of 81 years”. The Cross-Claim further pleads that the Defendant has altered her position to her detriment in reliance on the expectation encouraged and induced by the deceased.

5. [5]

   On 24 April 2013 the Guardianship Tribunal made orders appointing the Plaintiff as guardian of the deceased and committing management of the estate of the deceased to the Plaintiff. Although the evidence showed that the Tribunal allowed the guardianship order to lapse on the yearly review, the management order remained in place and was extant at the time of the death of the deceased.

6. [6]

   The Plaintiff applies by Motion filed 10 April 2017 for orders pursuant to r 13.4 and/or r 14.28 Uniform Civil Procedure Rules 2005 (NSW) that the Cross-Claim be dismissed, pursuant to r 14.28 that the defence be struck out and that pursuant to r 13.1 there be summary judgment for the Plaintiff on the claim. It does so principally on the basis that the present Defence and Cross-Claim are an abuse of process and that there is an issue estoppel arising from earlier proceedings initiated by the Defendant against the Plaintiff.

7. [7]

   On 22 February 2016 the Defendant herein filed a Summons seeking the following relief:

8. [8]

   A Statement of Claim was filed the same day which pleaded that the deceased made representations between May and 17 July 2014 that she wished to transfer the Bronte unit to the Plaintiff by way of a gift. It pleaded the execution of the transfer on 17 July 2014, asserted that it was made in contemplation of the deceased’s death and that it was conditional upon it taking effect on the death of the deceased. On that basis it was said on the principle of donationes mortis causae that an imperfect gift had been left to the Plaintiff in the form of the Bronte unit.

9. [9]

   The Statement of Claim pleaded further that due to the representations alleged and additional representations by the deceased from the date of purchase of the unit until her death the Plaintiff and the deceased had a common intention. It asserted that the deceased did everything necessary to be done by her to give effect to the transfer and make the gift binding. It pleaded that outside the control of either party the gift failed, the particulars of which were said to be the order of the Guardianship Tribunal and letters from the Trustee and Guardian (the content of those letters was not disclosed).

10. [10]

    The Defence filed by the NSW Trustee & Guardian admitted certain factual matters associated with the ownership of the unit by the deceased and the terms of her will, did not admit the allegations relating to a donationes mortis causae and the constructive trust but pleaded, in answer to the whole of the claim, reliance on s 71(1) of the NSW Trustee and Guardian Act 2009 (NSW) that the deceased’s power to deal with her estate was suspended.

11. [11]

    On 22 June 2016 Short Minutes of Order were filed and entered in those proceedings that provided as follows:

12. [12]

    The Plaintiff submitted that there were three bases for the making of the orders sought in the present motion:

1. Management order

1. [13]

   Section 71 of the NSW Trustee and Guardian Act 2009 relevantly provides:

2. [14]

   The orders made by the Guardianship Tribunal on 24 April 2013 were these:

3. [15]

   The claim made by the Defendant is that on 17 July 2014 the deceased signed a transfer of the Bronte property to the Defendant and thereafter wrote to the NSW Trustee and Guardian requesting that it take the steps necessary to give effect to the transfer. There is, however, no evidence of any authorisation in accordance with s 71(2) in relation to the Bronte property or any other property of the deceased. In those circumstances, the transfer was wholly ineffective to pass the property to the Defendant or to give her any rights in it pursuant to s 71(1).

2 & 3. Estoppel

1. [16]

   The Cross-Claim seeks the following relief:

2. [17]

   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:

3. [18]

   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.

4. [19]

   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:

5. [20]

   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:

6. [21]

   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.

7. [22]

   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?

8. [23]

   In the first place it may be accepted that there is no claim in the present Cross-Claim based on a donatio. However, in both proceedings the Defendant seeks a declaration that the Plaintiff holds the Bronte property on a constructive trust. In both pleadings representations by the deceased are alleged which the Defendant claims to have relied upon. The representations in paragraphs 8 and 10 of the Cross-Claim are the same as those in paragraph 10 of the Statement of Claim. The allegation of execution of the transfer by the deceased pursuant to those representations is the same in paragraph 11 of the Cross-Claim as in paragraph 9 of the Cross-Claim. The reliance on the representations in paragraph 18 of the Statement of Claim is the same as is contained in paragraph 16 of the Cross-Claim.

9. [24]

   In both cases what is alleged is a form of estoppel whether characterised as promissory or proprietary. Ultimately it is a form of estoppel in pais.

10. [25]

    In Legione v Hateley (1983) 152 CLR 406 Mason and Deane JJ said:

11. [26]

    The only claim made in the Cross-Claim is, therefore, found in the earlier Statement of Claim. The subject-matter is the same. The relief sought is the same.

12. [27]

    In Land Enviro Corp Pty Ltd v HTT Huntley Heritage Pty Ltd (2008) 72 NSWLR 160; [2008] NSWSC 185 Barrett J said:

13. [28]

    In Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 Bathurst CJ (with whom Beazley P and Emmett AJA agreed) said:

14. [29]

    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.

15. [30]

    It is necessary, however, to consider s 91 of the Civil Procedure Act 2005 (NSW). That section provides:

16. [31]

    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).

17. [32]

    The position was similar in Land Enviro. Earlier proceedings had been settled by consent orders that provided as follows:

18. [33]

    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.

19. [34]

    Part 40 r 8 relevantly provided:

20. [35]

    Justice Barrett, having quoted the rule, went on to say:

21. [36]

    As Barrett J noted at [60] rule 29.8 UCPR is in relevantly the same terms as Pt 34 r 6A.

22. [37]

    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.

23. [38]

    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.

24. [39]

    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.

25. [40]

    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.

26. [41]

    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]:

27. [42]

    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:

Conclusion

1. [43]

   In the light of the principles established in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 at [24] and what was said, as a useful summary of those principles, by Emmett JA in State of New South Wales v Williams [2014] NSWCA 177 at [71] (Macfarlan JA and Simpson J agreeing), the Defence and the Cross-Claim filed in the present proceedings should not be permitted to go to trial. Those pleadings should be struck out and summary judgment should be given for the Plaintiff.

2. [44]

   The affidavit of Andrew Khee Tuan Ng Saad sworn 28 November 2016 identifies the occupiers and proves service of the required Notice upon them.

3. [45]

   Accordingly I make the following orders:

   1. (1)

      The Defence and Cross-Claim each filed 3 March 2017 are struck out.

   2. (2)

      Judgment for the Plaintiff for possession of the property known as 3/394 Bronte Road, Bronte in the State of New South Wales being the whole of the land contained in folio identifiers 3/SP1237 and 15/SP1237.

   3. (3)

      The Defendant is to pay the Plaintiff’s costs of the proceedings.