Jacqueline Mara Lallemand v Russell Brown

• Jurisdiction: Australian Capital Territory
• Judge: Mossop M
• Judgment Date: 25 September 2014
• Docket Number: File Number(s): SC 306 of 2012
• Date: 25 September 2014
• Court: Supreme Court of ACT

[2014] ACTSC 235

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Before:

Mossop M

File Number(s): SC 306 of 2012

Jacqueline Mara Lallemand

(First Plaintiff)

David Philip Stevenson

(Second Plaintiff)

and

Russell Brown

(First Defendant)

William Nelson Joseph Swan

(Second Defendant)

Representation:

Counsel:

Mr G Waugh (Plaintiffs)

Mr L Ellison SC (Defendants)

Cases Cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175

Archbold v Scully (1861) 9 HLC 360

Banque Commercial SA v Akhil Holdings Ltd (1990) 169 CLR 279

Baburin v Baburin (No 2) [1991] Qd R 240

Barnes v Addy (1874) LR 9 Ch App 244

Boynes v Lackey [1958] SR (NSW) 395

Clegg v Edmonson (1857) 8 De G M & G 787

Crago v McIntyre [1976] 1 NSWLR 729

Ernest v Vivian [1861–73] All ER Rep 1531

Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89

Grundt v Great Builder Pty Gold Mines Ltd (1937) 59 CLR 641

Hughes v Schofield [1975] 1 NSWLR 8

In re Pauling's Settlement Trusts [1962] 1 WLR 86

In re Pauling's Settlement Trusts [1964] 1 Ch 303

Gerace v Auzhair Supplies Pty Ltd (2014) 310 ALR 85

Lindsay Petroleum Co v Hurd (1874) 5 LRPC 221

Morlea Professional Services Pty Ltd v Richard Walter Pty Ltd (In Liq) [1999] FCA 1820

Orr v Ford (1989) 167 CLR 316

Paramavisam v Flynn (1998) 160 ALR 203

P & O Nedlloyd BV v Arab Metals Co & Ors (No 2) [2007] 1 WLR 2288

Re Jarvis (Deceased) Edge v Jarvis [1958] 2 All ER 336

Taverners J Pty Ltd v Saxo Bank A/S [2011] VSC 27

Williams v Hensman (1861) 1 J&H 546; 70 ER 862

Legislation Cited:

Limitation Act 1929 (UK) s 29

Limitation Act 1967 (NSW) s 9

Limitation Act 1980 (UK) s 36(2)

Limitation Act 1985 (ACT) s 6, 11, 27, 33

Limitation Ordinance 1985 (ACT)

Texts Cited:

Butt, Land Law (6 ^th ed, Law Book Co, 2010)

Halsbury's Laws of England (3 ^rd ed, Butterworth & Co.)

Halsbury's Laws of England (4 ^th ed reissue, Butterworths)

Meagher, Heydon and Leeming, Meagher, Gummow & Lehane's Equity Doctrines & Remedies (4 ^th ed, Butterworths, 2002)

New South Wales Law Reform Commission, First Report on the Limitation of Actions (LRC 3) (1967)

Proposals for the Reform and Modernization of the Laws of Limitation in the Australian Capital Territory, Working Paper (Attorney General's Department, April 1984)

EQUITY — Equitable doctrines and presumptions — Barnes v Addy claim — equitable defences — laches — delay with prejudice — whether the defence of laches is available notwithstanding whether the statutory limitation period has expired

PRACTICE AND PROCEDURE — Insufficient pleadings — application to amend statement of claim at the end of the trial

Decision:

Application to amend statement of claim dismissed

Judgment for the defendants

See [184]

Introduction

1 The plaintiffs, Jacqueline Mara Lallemand and David Philip Stevenson, make a claim on the defendants arising out of the sale of property that they say was given to them by their mother prior to her death in 1978. The property was a house in Charlotte Street in Red Hill. The defendants, Russell Brown and William Swan, are the executors of the estate of Margaret Stevenson. Margaret Stevenson was the plaintiffs' father's second wife and step-mother to the plaintiffs. She died in 2011.

2 The plaintiffs say that in 1978 their father, Sir Hugh David Stevenson, gave an undertaking to their mother, Myra Stevenson, that the plaintiffs would have the proceeds of half of the Charlotte Street property when he died or sold it. As a consequence of this undertaking, the plaintiffs assert that the joint tenancy over the property was severed and a trust arose, whereby their mother's interest in the house would be held by him on a trust that permitted him to use it until he died or sold the property and then to distribute the proceeds to the children. The house was, in fact, sold in 1985. No amount was paid to the plaintiffs by their father during his lifetime or by Margaret Stevenson during hers. The plaintiffs claim against the executors of Margaret Stevenson's estate an order that they repay or restore the trust property with interest and costs.

Personalia

3 Without intending any disrespect to the people who gave evidence or who were referred to in the evidence I will refer to them by their first names to make the narrative easier to understand. I will refer to the plaintiffs' father as David Stevenson and the second plaintiff as Pip Stevenson in order to clearly distinguish between them. The plaintiffs referred to their father as ‘the Admiral’ while giving their evidence.

4 David Stevenson was the father of the two plaintiffs, Jacqueline (‘Jackie’) Lallemand and Pip Stevenson. David Stevenson was married to Myra Stevenson up until her death in 1978.

5 David Stevenson then married Margaret Wright in 1979 who became Margaret Stevenson. Margaret had two children from a previous marriage who are now known as Tookie Capezio and Matthew Wright.

6 David Stevenson's brother was William Stevenson and he was married to Patricia Stevenson who was also a friend of Margaret over many years.

Procedural history

7 It is worth noting at this stage that by the end of the hearing of the proceedings there was an unresolved issue about the pleadings and an application to amend those pleadings. In order to understand how this somewhat unsatisfactory position arose it is necessary to set out some of the procedural history of the case.

8 The originating claim was filed on 21 September 2012. The defence was filed on 29 November 2012. A certificate of readiness was filed on 7 August 2013 and the matter was set down for hearing on 17 March 2014. The evidence was heard on 17 and 18 March 2014.

9 The statement of claim referred in paragraphs 8 and 9 to the existence of an agreement made at a ‘family conference’ in 1978 when the plaintiffs' mother was terminally ill. It pleaded that ‘this agreement constituted a Trust whereupon half of the eventual proceeds of the sale of Charlotte Street were to be held for the benefit of the plaintiffs’. The only pleading of any breach of any obligation by Margaret (or indeed anyone else) was in paragraphs 47 and 48 which said:

47. Margaret left a Will dated 18 June 2010. Margaret's Will left nothing to the plaintiffs.

48. The making of the said Will was in breach of the Trust the terms of which are set out in paragraphs 8 and 9 herein.

10 This was not a pleading which made much sense because it pleaded that the making of the will by Margaret constituted a breach of the trust alleged to have been established by what occurred at the family conference in 1978 at which she was not present. There is no articulation of facts which would make the making of the will a breach of trust.

11 Unsurprisingly, the defendants had put on a defence to the claim as pleaded rather than anticipating a more coherent claim that might have been pleaded. The defence did not admit the making of the agreement at the family conference and denied that the making of Margaret's will constituted a breach of the trust alleged to have been established.

12 However the defence was not without its own suite of difficulties. In answer to the whole of the claim it pleaded a number of defences including what appears to be a pleading of laches (described in the pleading as delay with prejudice). However as a particular of that pleading, rather than a separate defence, was included a claim that, ‘[t]o the extent that the Plaintiffs plead their case in contract’ the pleadings were statute barred by s 11 of the Limitation Act 1985 (ACT) (Limitation Act). Even accepting the problems with the plaintiffs' claim, it is not clear why the Limitation Act point was limited to contract when paragraph 48 specifically pleaded a breach of trust or why it was not pleaded as a separate defence rather than as a particular of laches.

13 Prior to the commencement of the proceedings both parties had been directed to provide to the Court statements of the legal principles which would need to be applied in determining the case. The plaintiff's statement had addressed the authorities relating to severance of a joint tenancy, the establishment of a trust, liability for breach of trust, accessorial liability of third parties pursuant to the rule in Barnes v Addy (1874) LR 9 Ch App 244. The defendants' statement said that, ‘[w]hilst the Defendants accept generally the legal principles outlined by the Plaintiffs it will be submitted they are, for the most, irrelevant to the case before the Court’. It pointed out that the statement of claim did not plead severance of a joint tenancy or trust. It pointed out that the breach of trust pleaded in paragraph 48 was the making of Margaret's will in June 2010 and that the making of a will could never of itself be a breach of trust.

14 The plaintiffs' opening did not specifically articulate any departure from the pleaded case. Counsel for the defendants did foreshadow an intention to delete the qualification to the limitation defence by omitting the words ‘To the extent the plaintiffs plead the case in contract’. Counsel indicated that he did not want to be caught out by a claim that it was a trust case and not a contract case. Before the witnesses were made available for cross examination, counsel for the plaintiffs was asked whether the case was a trust case or a contract case or both and he confirmed that it was a trust case.

15 The position appears to be at this point that the plaintiffs, having commenced proceedings based on pleadings drafted by earlier counsel, had been reluctant to amend the pleadings to correspond to the case that new counsel considered it appropriate to run. The defendants, recognising the weakness of the pleaded case, were content to allow the deficiently pleaded case to run to trial because it gave them stronger grounds for defending the claim.

16 During the course of...