Reported Decision : (2000) DFC 95-229 New South Wales Court of Appeal CITATION : Attwells vCampbell [2000] NSWCA 132 FILE NUMBER(S) : CA 40760/98 HEARING DATE(S) : 19 April 2000 JUDGMENT DATE : 25 May 2000 PARTIES : Appellant: David Gordon Attwells Respondent: Louise Erica Campbell JUDGMENT OF : Meagher JA at 1; Fitzgerald JA at 11; Heydon JA at 17 LOWER COURT JURISDICTION : Supreme Court LOWER COURT Ed No 1971/1996 FILE NUMBER(S) : LOWER COURT Simos J JUDICIAL OFFICER : COUNSEL : Appellant: E Cohen / V Bedrossian Respondent: B Collins SC / E White SOLICITORS : Appellant: David Hand (Hurstville) Respondent: Haydon Fowler Corbett Jessop (Caringbah) CATCHWORDS : DeFacto relationship - Imperfect deed - Whether amounted to binding contract - Intention of parties - enforceability - Specific performance LEGISLATION CITED : Child Support (Assessment) Act 1989 (Commonwealth) DeFacto Relationship Act 1984(NSW) CASES CITED: Baumgartner v Baumgartner (1987) 164 CLR 137 DECISION : Appeal dismissed with costs. David Gordon ATTWELLS V Louise Erica CAMPBELL DE FACTO RELATIONSHIP-IMPERFECT DEED-WHETHER AMOUNTED TO BINDING CONTRACT-INTENTION OF PARTIES-ENFORCEABILITY-SPECIFIC PERFORMANCE Facts: The parties were involved in a de facto relationship which lasted for several years. They had one child, who lived with the respondent in a house which was registered in the respondent's name. The appellant paid the mortgage instalments on the house, as agreed under a document titled "Statutory Declaration" which was signed by the appellant but not the respondent. The appellant ceased to make payments on the house. The respondent brought action seeking to enforce the document. The trial judge found the document constituted a contract between the parties. The appellant appealed against this decision, arguing that the finding of a legally binding contract was against the weight of the evidence. Held per Meagher JA, Heydon JA agreeing: The defences presented by the appellant were rejected by the trial judge and should also be dismissed by this court. The wording of the document, plus the circumstances surrounding its execution clearly show an intention by both parties to be legally bound. per Fitzgerald JA (agreeing): Although specific performance may not be the most appropriate relief, there would be no point in changing the respondent's pleadings to claim damages in lieu of specific performance. ORDERS 1. Appeal dismissed with costs THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40760/98 MEAGHER JA FITZGERALD JA HEYDON JA 25 MAY 2000 ATTWELLS v CAMPBELL JUDGMENT 1 MEAGHER JA: The appellant, Mr Attwells, appeals against certain orders made by Simos J in favour of the respondent, Miss Campbell. For many years up to 1993 Miss Campbell had been his mistress. In 1991 she bore him a child. In about August 1993 the relationship was terminated. 2 At the time when the relationship was terminated, her situation was rather precarious. She was unmarried, she had a child to support, her employment could hardly be regarded as permanent, she had little or no money, she had no permanent home. She was, however, living in a home known as 65 Raglan Road, Miranda. (Miranda is a suburb of Sydney.) That house was registered in her name, and was subject to a long-term mortgage to St. George Bank, which was guaranteed by the appellant. In these circumstances, it is hardly surprising that there were altercations between the two of them, often very heated. Eventually, after one such altercation, the appellant produced a document, which the parties referred to (misleadingly) as a Statutory Declaration. It was in the following form: " STATUTORY DECLARATION "This deed made the 12th August 1993 between Louise Erica Campbell & David Attwells. There is a child of the parties namely Jacey Jean Campbell born 3rd July 1991. (1) By contract Louise purchased a property known as 65 Raglan Road Miranda for 227.500. (2) This property was purchased with the assistance of David who provided the Deposit & Guarantee for Louise's obligations for the mortgage to the St. George Bank Ltd. (3) The parties have agreed to enter this deed in order to finalise any claim which may be made by either of them against the other & acknowledge that neither party make any further claims against each other. (4) Both parties agree that on or before the 11th day Oct 1998 David will pay to the St. George Bank Ltd. all monies in full to extinguish the 1st mortgage secured on 65 Raglan Road Miranda. (5) David will & agrees that he shall continue to pay the monthly payments to the Bank until the loan is paid out in full. (sgd.) D. Atwells _____________________________________________________________ SIGNED _____________________________________________________________ WITNESS _____________________________________________________________ SIGNED _____________________________________________________________ WITNESS AT ENFIELD THIS DAY 12th OF AUGUST 1993" 3 It was signed by the appellant but not by the respondent. His Honour held that it amounted to a binding contract. 4 Eventually, after nearly five years, the appellant showed signs of defaulting on his obligation to pay all the mortgage instalments, which prompted Miss Campbell to bring these proceedings for, in effect, specific performance of the agreement embodied in the "Statutory Declaration". Simos J acceded to her suit. 5 The appellant pursued a number of defences, all repeated in this appeal. It was submitted that there was no intention on the part of either party to enter into a binding legal relationship, a claim which is rebutted by the words of the document itself, not to mention the circumstances surrounding its execution. Likewise, there was an allied submission that there never was a contract between the parties. Closely related to these submissions was a third, viz. that there was no evidence that Miss Campbell ever accepted her obligations under the "Statutory Declaration". These three submissions are refuted by the fact that she never sued the appellant for maintenance (either for herself or for her child), which bespeaks a reliance on clause 3 of the "Statutory Declaration". 6 It was further submitted that Miss Campbell had procured the execution of the "Statutory Declaration" by the appellant by duress or undue influence, or even by "blackmail" within the meaning of s.100A of the Crimes Act. Simos J found that she had said to the appellant: "I want you to pay off my mortgage now, otherwise I'm going to tell your wife everything". But to categorise that as an "unwarranted demand" seems to me to verge on the ridiculous. Moreover to back a reasonable request with a threat to do something which is neither illegal nor tortious cannot, in my view, ever amount to duress. 7 The appellant also submitted that there had been a resulting trust, which had never been rebutted. It is trite law that, prima facie, if a property is vested in A but was purchased with the money of B, A holds the property in trust for B. In this case the property was vested in the respondent, but had been purchased partly with the money of the appellant and partly with the money of the respondent. However, his Honour held that any such resulting trust had been rebutted. It is, of course, equally trite law that a resulting trust is rebutted by a donative intention. In the present case, it is as clear as can be that the appellant intended his mistress to own her house, as he himself said many times . For example, he said "it was to be her superannuation fund". This is to say nothing of how caddish his behaviour would have been not to have had such an intention. 8 Finally, there was a submission that the agreement could not be subject to a decree of specific performance through lack of mutuality. The modern formulation of the test for that somewhat elusive doctrine which his Honour applied is that of Dr Spry: "The defence of lack of mutuality arises if the defendant in proceedings for specific performance is able to show that if he were ordered specifically to perform his contractual obligations he would not, in all the circumstances, himself be sufficiently protected to avoid possible injustices to him, having regard to such unperformed obligations of the plaintiff as might not be susceptible of subsequent specific enforcement." Spry, Equitable Remedies (2 ed) 83. 9 This submission must also fail, and for the reasons set out by his Honour. If she sued for relief under the Child Support (Assessment) Act 1989(Commonwealth), or under the DeFacto Relationships Act 1984(NSW), he could rely, at least in part, on clause 3 of the "Statutory Declaration". If she sued for equitable relief under the doctrines enunciated by the High Court in Baumgartner v Baumgartner (1987) 164 CLR 137, clause 3 would be a complete defence. On the other hand, if he sued her for anything arising out of their past relationship, she would be able to rely on clause 3 as a complete defence to his claim. In other words, the "Statutory Declaration" confers rights on each party, such as to avoid any of the "injustices" referred to by Dr Spry arising. 10 In my view the appeal should be dismissed with costs. 11 FITZGERALD JA: The circumstances giving rise to this appeal are set out in the reasons for judgment of Meagher JA. Subject only to the following comments, I agree with the orders proposed by his Honour and with his reasons. 12 The appellants submitted that his obligations under the document relied upon by the respondent were not supported by consideration. Irrespective of whether clause 3 would provide the appellant with a complete defence to a claim by the respondent for equitable relief arising out of their relationship under the doctrines enunciated by the High Court in Baumgartner v Baumgartner, (1987) 164 CLR 137. the clause would benefit the appellant in such litigation. In any event, it is sufficient to refer to the other benefits the appellant identified by Meagher JA in paragraph 9 of his judgment to answer the submission that the appellant received no consideration. 13 The principles relating to duress, undue influence and, I think, unconscionability were also raised but have nothing to do with the circumstances in which the appellant executed the parties' contract. Further, a cursory perusal of s 100 A of the Crimes Act demonstrates that it has no potential application. 14 I have some doubt whether specific performance was the appropriate relief in view of the circumstance that the appellant could not have obliged the respondent to perform the contract although he could have relied upon it in response to any claims which he made in contravention of clause 3. 15 However, the appellant's counsel did not oppose an amendment by the respondent to claim damages, and there would be no practical utility in substituting a judgment for damages for the decree of specific performance made by the trial judge. The time for the appellant to extinguish the mortgage on the Miranda property has passed, and a judgment for damages would simply require the appellant to pay to the respondent the amount which the specific performance decree requires him to pay to the mortgagee, leaving the respondent to pay the mortgage herself. 16 As proposed by Meagher JA, the appeal should be dismissed with costs. 17 HEYDON JA: I agree with Meagher JA. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.