Vial v. Cossa [1999] NSWSC 60

New South Wales Supreme Court CITATION : Vial v. Cossa [1999] NSWSC 60 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 6244/91 HEARING DATE(S) : 12/02/99 JUDGMENT DATE : 12 February 1999

PARTIES : Susan Elizabeth Vial (P) Antonio Stefano Cossa (D) JUDGMENT OF : Master McLaughlin

COUNSEL : Mr. L. Aitken (P) Ms. K. Ottesen (D) SOLICITORS : Horowitz & Bilinsky (P) Watsons (D) CATCHWORDS : ACTS CITED : De Facto Relationships Act 1984 Commissioner of Stamp Duties v Bone (1976) 135 CLR 223 Federal Commissioner of Taxation v Orica Limited (1998) 154 ALR 1 Foakes v Beer (1884) 9 AC 605 CASES CITED : Musimeci v Windadell Pty. Limited (1994) 34 NSWLR 723 Mortgage Acceptance Nominees Limited v Australia Thoroughbred Finance Limited (1996) 69 SASR 302 Ayodeji v Biscoe [1964] 3 All ER 556 Je Maintiendrai Pty. Limited v Quaglia (1980) 26 SASR 101 DECISION : See paragraph 55

- 21 - 1 MASTER: By a notice of motion filed on 12 February 1999 the plaintiff, Susan Elizabeth Vial, seeks substantively an order that the plaintiff have summary judgment pursuant to Part 13 rule 2 of the Supreme Court Rules. In addition, the plaintiff by that notice of motion seeks, in the alternative, that the plaintiff have judgment by admission pursuant to Part 18 rule 3 of the Supreme Court Rules, and, further, an order that the cross-claim of the defendant, Antonio Stefano Cossa, be struck out pursuant to Part 15 rule 26 of the Supreme Court Rules. 2 The substantive proceedings were instituted by summons filed by the plaintiff on 13 December 1991. That summons seeks relief in respect to a deed made between the parties on 6 December 1990. The principal item of relief sought in the summons is an order that the defendant pay to the plaintiff the sum of $364,000, pursuant to clause 2 of the deed. 3 The defendant on 21 March 1997 filed a document entitled "cross claim". Somewhat curiously (since the proceedings were instituted by a summons, which sought merely relief) the cross claim was in the form of a pleading. It pleads certain facts and in addition seeks relief. 4 The facts which the cross claim pleads include, in paragraph 1, the making of the agreement (which was the deed to which I have already referred), and, in paragraph 2 various terms and conditions of that deed, including the provision of clause 2 thereof, that the defendant would pay to the plaintiff the sum of $400,000 by weekly instalments of $1000, commencing from the date of the agreement until the said amount was paid. 5 It would appear that the parties were in a de facto relationship in the 1980s and that upon the termination of that relationship the present defendant, Antonio Stefano Cossa, instituted proceedings against the present plaintiff, Susan Elizabeth Vial, being proceedings 5766 of 1990 in th Equity Division, whereby orders were sought adjusting the interests of the parties in property pursuant to the provisions of the De Facto Relationships Act 1984. 6 Orders were made in those proceedings on 6 December 1990. To those orders was annexed the deed to which I have already referred. 7 For a period after the date of that deed the defendant paid to the plaintiff sums of $1000 a week. It would appear that there were then negotiations and discussions between the parties and, so it is asserted on behalf of the present defendant, there was an agreement between himself and the plaintiff that he should pay to the plaintiff, and that she should accept in fulfilment of the terms of the deed, not $1000 a week but $700 a week. That assertion is disputed by the plaintiff. Nevertheless the defendant for a period paid to the plaintiff the sum of $700 a week. The defendant has not paid to the plaintiff that sum or any other sum since 28 June 1996. 8 I have already recorded that the principal claim of the plaintiff sought in the notice of motion which is presently before me is a claim for summary judgment pursuant to the provisions of Part 13 rule 2 of the Supreme Court Rules. 9 Sub-rule (1) of that rule provides: Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff (a) there is evidence of the facts on which the claim or part is based; and (b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed, (c) the Court may, by order, on terms, give such judgment for the plaintiff on that claim or part as the nature of the case requires. 10 The principles upon which such summary judgment may be given are well recognised. The Court will not make such an order for summary judgment where there is a real question to be tried. It is for the plaintiff to establish that the present is a case which entitles it to have the Court make an order for such summary judgment. 11 The plaintiff seeks to rely upon the specific provisions of the deed which entitled the plaintiff to payment of $400,000 by the defendant. The plaintiff by her evidence says in her affidavit of 25 November 1996 that to that date the defendant had paid the sum of $252,100, leaving a balance outstanding of $147,900. In her affidavit of 12 March 1998 the plaintiff altered that amount slightly, by saying that since the date of the deed the defendant had paid to her a total of $252,150 and that the amount outstanding was the balance between that figure and the $400,000, --- that is, an amount of $147,850. 12 The plaintiff in that affidavit, by paragraph 4, fulfilled the essential requirement of paragraph (b) of subrule (1) of Part 13 rule 2 by saying, "I believe that the defendant owes me the said amount of $147,850 under the deed and has no defence to the whole or any part of my claim for those moneys". 13 The plaintiff by that affidavit (in paragraph 5) puts in issue the assertion of the defendant in his affidavit evidence that the plaintiff had said to him words to the effect, "I will not insist on strict enforcement of my rights under the deed". 14 The defendant by the cross claim in the form in which it has been prepared and filed admits the execution of the deed and admits that certain payments were made under that deed. The evidence of the defendant sets forth details of the payments asserted to have been made under the deed. That evidence discloses that no payments have been made since 28 June 1996. I note that there appears to be a discrepancy between the evidence of the plaintiff as to the total amount paid to her by the defendant, which she says was $252,150, and the evidence of the defendant, who says that the total amount was $303,800. 15 It was submitted on behalf of the plaintiff that, there being a deed between the parties, the plaintiff is entitled to enforce her legal rights under that deed and to receive payment of the total sum of $400,000, that since some of the amounts have already been paid, credit should be given to the defendant for those amounts and that the plaintiff is entitled to summary judgment for the outstanding balance. 16 The cross claim which has been filed asserts essentially that by reason of the conduct of the parties, which is particularised in that cross claim, the parties have by their conduct revoked the agreement, or, alternatively, consented to the revocation of the agreement; further by the cross claim it is asserted that the agreement has ceased to have effect. 17 I would here note that the cross claim speaks of the agreement; the summons speaks of the deed. The document is in fact a deed, although by its terms it is recognised to be a separation agreement under the provisions of Part 4 of the De Facto Relationships Act. I shall refer to it as "the deed". 18 Whilst it was the submission of the defendant, a submission consistent with the assertions to which I have just referred, made in the cross claim, that the deed has been revoked or has ceased to have effect, the argument of the defendant could be more precisely stated by saying not that the deed has been revoked, but rather that in, consequence of the conduct of the parties, either there has been a binding and legally recognisable agreement that the plaintiff would not seek to enforce the terms of the deed or that the plaintiff is by some principle of law precluded from enforcing its terms. 19 Since the cause of action relied upon by the plaintiff in the present proceedings is a cause of action arising out of a deed, the rights of the parties under that deed, including the plaintiff's present cause of action can be released or varied only by a further deed between the parties. 20 In Commissioner of Stamp Duties v. Bone (1976) 135 CLR 223, a decision of the Judicial Committee of the Privy Council upon appeal from the High Court of Australia, Lord Russell of Killowen in giving the decision of their Lordships said, at 229: A debt can only be truly released and extinguished by agreement for valuable consideration or under seal. 21 That passage was cited by the High Court of Australia in Federal Commissioner of Taxation v. Orica Limited (1998) 154 ALR 1 in the joint judgment of Gaudron, McHugh, Kirby and Hayne JJ at 33. 22 In equity however and even in the absence of a further deed, an agreement for valuable consideration to release or vary a contract under seal would be enforced (see Federal Commission of Taxation v. Orica Limited). 23 In the instant case there is evidence of negotiation which took place between the parties. The defendant asserts that there was more than negotiation, that there was in fact a binding agreement between the parties. 24 In an application for summary judgment the Court must not proceed to give summary judgment where there is a real question to be tried. It seems to me however that even if one accepts the assertion of the defendant, an assertion which is denied by the plaintiff, that there was an agreement between the parties that the plaintiff would accept $700 a week instead of $1000 a week, as provided in the terms of the deed, nevertheless even the existence of such an agreement between the parties does not of itself preclude the plaintiff now from enforcing her rights under the deed. That is because for the past two and a half years the defendant has not abided by the terms of the agreement which he says came into force and bound the parties in variation of the deed. 25 The payment of a lesser amount is not sufficient consideration for the variation of a deed. (see Foakes v. Beer (1884) 9 AC 605, a decision of the House of Lords). In Musimeci v. Windadell Pty Limited (1994) 34 NSWLR 723 Santow J at 739 referred to the part payment of a debt and said: This proposition pre-dates any doctrine of consideration and provides that part payment of a debt or the promise thereof does not afford consideration: Pinell's case (1602) 5 Co Rep 177a; 77 ER 237 (already accepted as early as 1455, Anon YB 33 Henry VI (47 pl 32). That proposition received the approval of the House of Lords in Foakes v. Beer (1884) 9 App Cas 605 and has not been over-ruled. 26 The fact that the plaintiff accepted a lesser amount does not discharge the liability of the defendant under the deed. If it can be established that there was an agreement, albeit not under seal, between the parties that the plaintiff would accept $700 a week instead of $1000 a week, then the plaintiff was precluded from enforcing her rights under the deed whilst the defendant continued to pay the $700 a week. He has not done so since 28 June 1996. Accordingly, even accepting the evidence of the defendant as the terms of such an agreement, the plaintiff cannot thereby be precluded now from enforcing her rights under the deed. 27 The defendant further submits that the terms of the deed are such that the Court should not in any event allow the plaintiff to rely upon it. He submits firstly that it is harsh and unconscionable. But the defendant does not, either in the cross claim or in his evidence, assert any equity which would generate a right to prevent enforcement by the plaintiff on the basis of mere harshness or alleged unconscionability. The only fact which appears to be relied upon by the defendant in support of this assertion that the terms of the deed were harsh and unconscionable is the fact that a piece of real property the sale of which was contemplated by the deed and for which a reserve price of $600,000 was nominated, in fact realised only $474,000. 28 It does not seem to me that that fact could possibly result in the deed being regarded as harsh and unconscionable. At the time when the deed was entered into both parties expected that a price of $600,000 would be achieved. That the ultimate sale price was considerably less than that amount does not in my view affect a determination of whether or not the deed when it was executed by the parties contained terms which were harsh and unconscionable. It was commercial reality and the condition of the real estate market which resulted in the proceeds of the sale of that property being considerably less when it was eventually sold than the parties had at some earlier time expected them to be. 29 In any event, even if somehow or other it could be argued that the considerable diminution in the proceeds of sale constituted something which was unfair to the defendant, nevertheless that does not of itself have the consequence argued for on behalf of the defendant, that the plaintiff should be deprived of her legal right to enforce the terms of the deed and to bring this present claim for the moneys owing to her under that deed. 30 As I have already observed, no equity is asserted in the cross claim and there is no evidence to support the existence of such an equity which would generate a right of the nature presently said by the defendant to prevent enforcement of the plaintiff's rights under the deed. 31 In this regard also the defendant has referred to the provisions of Part 4 of the De Facto Relationships Act and in particular to the provisions of section 46 and of section 50 of that Act. 32 Section 46 provides: Except as otherwise provided by this Part, a cohabitation agreement or separation agreement shall be subject to and enforceable in accordance with the law of contract, including, without limiting the generality of this section, the Contracts Review Act, 1980. 33 Section 50 provides: Without limiting or derogating from the provisions of section 46, on an application by a de facto partner for an order under Part III a court is not required to give effect to the terms of any cohabitation agreement or separation agreement entered into by that partner where the court is of the opinion --- (a) that the de facto partners have, by their words or conduct, revoked or consented to the revocation of the agreement; or (b) that the agreement has otherwise ceased to have effect 34 It has been submitted on behalf of the defendant that section 50 of the De Facto Relationships Act has operation in the circumstances of the present proceedings and, in particular, in the circumstances of the present application by the plaintiff for summary judgment. 35 I am of the view that that submission is misconceived and is incorrect. The present proceedings relevantly are proceedings for the payment of money under the terms of a deed. They are not proceedings which fall within the description contained in section 50 of "an application by a de facto partner for an order under Part 3". There were such proceedings between the present parties, being proceedings number 5766 of 1990, in which Mr Cossa was the plaintiff and Miss Vial was the defendant. The present proceedings are proceedings 6224 of 1991, in which Miss Vial is the plaintiff and Mr Cossa is the defendant.The present proceedings are proceedings for the enforcement of the deed between the parties. 36 The final ground upon which the defendant submits that the plaintiff should not be entitled to rely upon the rights given to her under the deed and should not be entitled to enforce the deed in accordance with its terms, is the ground of estoppel. It is submitted on behalf of the defendant that the plaintiff is estopped from relying upon her legal rights arising under the deed. The Full Court of the Supreme Court of South Australia in Mortgage Acceptance Nominees Limited v. Australia Thoroughbred Finance Limited (1996) 69 SASR 302 had occasion to consider the principles relating to estoppel. That court was constituted by Doyle CJ and Bollen and Lander JJ. At 305 Doyle CJ said: "First, as should be obvious, the principle which underlies promissory estoppel is not one which is directed to the enforcement of voluntary promises." 37 In the circumstances of the instant case, it will be appreciated that if there was a mere acquiescence or voluntary promise by the plaintiff to accept a lesser amount than $1000 a week, the principle of promissory estoppel would not apply. But I have already observed that, since in an application for summary judgment the Court should not attempt to resolve any disputed questions of fact, and since the defendant asserts that there was a binding agreement between the parties that the plaintiff would accept $700 a week rather than $1000 a week, it is appropriate that, for the purposes of the present application, I should accept that the parties had entered into such an agreement. 38 Accordingly, until 28 June 1996 the plaintiff would have been estopped from enforcing her legal rights under the deed. However, because the defendant has chosen since that date not to make any payments, the plaintiff is no longer estopped from enforcing her rights. 39 In addition, in Mortgage Acceptance Nominees Limited Doyle CJ said, at 306: The second relevant point which emerges is that the detriment which is identified as a basis for the estoppel must be a detriment which results from the person asserting and relying upon the estoppel having acted upon the promises or representations from which the estopped party is ultimately not permitted to depart. 40 There is no evidence --- indeed there is no such assertion contained in the cross claim --- that the defendant has acted in such a way, in reliance upon the alleged agreement to which I have referred, that he has suffered detriment. 41 Further, it is also relevant that, in any event, a person who is alleged to be the representor in a relationship giving rise to promissory estoppel may (to use the word appearing in the authorities) resile from a promissory estoppel on giving a sufficient notice. See Ayodeji v. Biscoe [1964] 3 All ER 556, where Lord Hodson said at 559: This equity is, however, subject to the qualification (a) that the other party has altered his position, (b) that the promisor can resile from his promise on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position, (c) the promise only becomes final and irrevocable if the promisee cannot resume his position. 42 In the circumstances of the instant case the correspondence between the solicitors for the parties and the institution of the present proceedings clearly constituted notice by the plaintiff to the defendant that she was no longer relying on any agreement between the parties that she would accept a lesser sum for the sum of $1000 as set forth in the deed. 43 Further, as I have already observed, there is no evidence to suggest that the defendant in reliance upon the continued acceptance by the plaintiff of the lesser sum for the greater sum altered his position in any way, let alone to his detriment. 44 Further, as I have already observed, the defendant for the past two and a half years has not chosen to abide by the agreement which he asserts has given rise to the estoppel precluding the plaintiff from enforcing her legal rights. 45 It has been suggested that the loss of the use of the motor car which was the subject of agreement and subsequent negotiations between the parties has constituted some detriment to the defendant. I am not satisfied that that is so, and I certainly am not satisfied that the defendant altered his position to his detriment in reliance upon the negotiations or upon any final agreement between the parties. 46 I have been taken to the further decision of the Supreme Court of South Australia in Je Maintiendrai Pty Ltd v. Quaglia (1980) 26 SASR 101, in which the principle of promissory estoppel was considered by the Full Court of the Supreme Court of South Australia. The facts in that case are somewhat different from the facts in the instant case, since that case concerned an alleged reduction in rental for an indefinite period and where the lessor, after accepting the reduced rent for eighteen months, then claimed payment of the arrears of the full rent. 47 In the instant case I do not understand the defendant at the time of the negotiations with the plaintiff or at any other time to have been asserting that he was liable to pay to the plaintiff any amount less than the $400,000 specified in the deed. There is no suggestion in the instant case that the plaintiff is attempting to obtain payment of any greater sum than the $400,000. 48 The grounds upon which the defendant argues that the plaintiff is deprived of the right to enforce the terms of the deed are not that the defendant should pay some amount less than the $400,000 but that, because of negotiations relating to the size of the instalments to be paid and other negotiations relating to the motor vehicle and its use, the plaintiff is estopped from enforcing the deed. But I have already emphasised that, whilst I would agree with that submission if the defendant had complied with the terms of the agreement which he himself sets up in the evidence, he has signally failed to comply with those terms. 49 In all the circumstances therefore I am satisfied that there is no real issue to be tried in this matter, that there is no legal ground upon which the plaintiff should be deprived of enforcing her rights under the deed, and that the plaintiff is entitled to summary judgment for the difference between the amount already paid by the defendant and the amount of $400,000. 50 Since there appears to be a dispute in the evidence as to the precise amount, I will at this stage direct entry of summary judgment for the plaintiff in the amount which she asserts in her affidavit and which is the amount sought or almost the amount sought in the notice of motion. But I will reserve to the defendant liberty to apply for variation of that amount within a specified period. I would expect that the parties would be able to do some calculation as to how much has actually been paid. 51 I will also make an order of the nature sought in the notice of motion dismissing the cross claim of the defendant. It will be unnecessary for me to grant the relief sought in the alternative paragraph 2 of the notice of motion, that the plaintiff have judgment by admission pursuant to Part 18 rule 3. 52 AITKEN: I ask for costs and I also ask that interest be paid on the amount that is ultimately found to be owing, at the Supreme Court rate, from 30 June 1996 and I ask for that on the basis that from that period of time on we have been kept out of our money. 53 OTTESEN: There is no provision under the deed for interest to be paid. 54 MASTER: But if your client had abided by what he claims was the agreement between the parties this matter would never have arisen. 55 I make the following orders: (1) I direct that on or after 22 February 1999 judgment be entered for the plaintiff against the defendant in the sum of $147,850 together with interest upon such sum from 28 June 1996 at Supreme Court rates. (2) I reserve to the defendant liberty to apply to me on twenty-four hours' notice on or before 19 February 1999 for an order varying the sum of $147,850 referred to in order (1) hereof. (3) I order that the cross claim filed by the defendant on 21 March 1999 be dismissed. (4) I order that the defendant pay the costs of the plaintiff of the notice of motion filed by then plaintiff on 12 February 1999 and of the proceedings. I certify that this and the preceding pages are a true copy of the reasons for judgment of Master McLaughlin