E Co [a pseudonym] v Q [a pseudonym] (No 4) [2019] NSWSC 429

Supreme Court New South Wales

Medium Neutral Citation: E Co [a pseudonym] v Q [a pseudonym] (No 4) [2019] NSWSC 429 Hearing dates: 19-23 November 2018; 10-13 December 2018 Decision date: 18 April 2019 Jurisdiction: Common Law Before: Ward CJ in Eq Decision: (1) Direct the parties to notify my associate within 7 days of any further anonymisation sought of these reasons for judgment and as to any amendment sought to the proposed orders to correct any arithmetical errors or so as better to implement the relief contemplated in these reasons. (2) Reserve the question of costs of the proceedings to be dealt with following the filing of final submissions on costs and/or any oral hearing on costs that may be considered appropriate. Catchwords: CIVIL PROCEDURE — Hearings — reopened hearing on question of relief –– whether making good of the plaintiffs' expectations would be inequitably harsh in all the circumstances –– whether imposition of conditions of the kind proposed in the principal judgment would be financially ruinous for the parties –– whether capital gains tax liability flowing from the relief granted would render the relief otherwise proposed to be granted wholly disproportionate or out of all proportion to the detriment suffered

ESTOPPEL – Proprietary estoppel – whether to grant declaratory relief recognising the existence of a constructive trust over properties and shares –– whether acceleration of the expectation would be appropriate in order to do equity and effect a clean break –– whether declared constructive trust arises at the time it becomes unconscientious or unconscionable for the promisor to resile from the promise Legislation Cited: Civil Procedure Act 2005 (NSW), ss 94, 100 Duties Act 1997 (NSW), s 274 Evidence Act 1995 (NSW), ss 55, 79(1), 135(a), 135(c), 192A(a) Income Tax Assessment Act 1936 (Cth), ss 102(1), 170 Income Tax Assessment Act 1997 (Cth) Uniform Civil Procedure Rules 2005, r 14.14(2)(a) Cases Cited: Ambridge Investments Pty Ltd (in liq) (rec apptd) v Baker [2010] VSC 59 Arfaras v Vosnakis [2016] NSWCA 65 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd ( 2001) 208 CLR 199; [2001] HCA 63 Australian Securities & Investments Commission (ASIC) v Rich (2005) 190 FLR 242; [2005] NSWSC 149 Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 Bathurst City Council v PWC Properties Pty Limited (1998) 195 CLR 566; [1998] HCA 59 Beslic v MLC Ltd [2015] NSWSC 908 Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384; [1929] HCA 24 Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44 Breen v Williams (1996) 186 CLR 71; [2009] HCA 57 Bristol & West Building Society v Mothew [1998] Ch 1 Carl Zeiss Stiftung v Herbert Smith & Co (No 2) [1969] 2 Ch 276; [1969] 2 All ER 367 Commonwealth of Australia v Verwayen (1990) 170 CLR 394; [1990] HCA 39 Cooke v Commissioner of Taxation (2002) 51 ATR 223; [2002] FCA 1315 Crabb v Arun District Council [1976] Ch 179 Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21 Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 Department of Social Security v Agnew (2006) 96 FCR 357; [2000] FCA 59 DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728 Donis v Donis (2007) 19 VR 577; [2007] VSCA 89 E Co v Q (No 3) [2018] NSWSC 646 E Co v Q [2018] NSWSC 442 Ellison v Sandini Pty Ltd (2018) 125 ACSR 249; [2018] FCAFC 44 Evans v Evans [2011] NSWCA 92 Flinn v Flinn [1999] 3 VR 712; [1999] VSCA 109 Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 GE Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1; [2003] FCA 50 Gibson Motorsport Merchandise Pty Ltd v Forbes (2006) 149 FCR 569; [2006] FCAFC 44 Gibson v Goldsmid (1854) 5 De GM & G 757; 43 ER 1064 Gillett v Holt [2010] [2010] Ch 210 2; All ER 289 Giumelli v Giumelli (1999) 196 CLR 101 at 123-124; [1999] HCA 10 Gould v Mount Oxide Mines Ltd (In Liq) (1916) 22 CLR 490; [1916] HCA 81 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Honeysett v The Queen (2014) 253 CLR 122; [2014] HCA 29 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2008) 73 NSWLR 653; [2008] NSWCA 206 Jennings v Rice [2003] 1 P & CR 100 Kafataris v Deputy Commissioner of Taxation (2015) 243 FCR 291; [2015] FCA 874 Kevin John Lewis v Peter William Stewart by his tutor Peggy Lillian Mayhew [2018] NSWSC 1186 Lambert Leasing Inc v QBE Insurance Australia Ltd [2012] NSWSC 953 Langman v Handover (1929) 43 CLR 334; [1929] HCA 42 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305 McNab v Graham (2017) 53 VR 311; [2017] VSCA 352 Mercanti v Mercanti [2015] WASC 297 Muschinski v Dodds (1985) 160 CLR 583 NA & J Investments Pty Ltd v Minister Administering the Water Management Act 2000; Arnold v Minister Administering Water Management Act 2000 (No 4) [2012] NSWLEC 120 Paino v Paino [2005] NSWSC 1313 Paino v Paino [2008] NSWCA 276 Parsons v Bain (2001) 109 FCR 120; (2001) 192 ALR 722; [2001] FCA 376 Pascoe v Turner [1979] 1 WLR 431 Phelan v Middle States Oil Corporation (1955) 220 F 2d 593 Pilmer v Duke Group Ltd (In liq) (2001) 207 CLR 165; [2001] HCA 31 Pirie v Richardson [1927] 1 KB 448 Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370 Priestley v Priestley [2017] NSWCA 155 R v Turner [1975] QB 834 Rhoden v Wingate [2002] NSWCA 165 Rodda v Ian Rodda Pty Ltd (No 2) [2015] SASC 128 Rodda v Ian Rodda Pty Ltd [2015] SASC 95 S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 9 Sledmore v Dalby [1996] 72 P & CR CA 196; [1996] 2 WLUK 129 Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 Truesdale v Commissioner of Taxation of the Commonwealth of Australia (1970) 120 CLR 353; [1970] HCA 27 Tyson v Brisbane Market Freight Brokers Pty Ltd (1994) 120 ALR 1; [1994] HCA 67 Varma v Varma (2010) 6 ASTLR 152; [2010] NSWSC 786 Westpac Banking Corporation v Ollis [2008] NSWSC 281 Texts Cited: AW Scott, Law of Trusts (Little Brown & Co, 3rd ed, 1967) B Macfarlane, The Law of Proprietary Estoppel, Oxford University Press, 2014, G D Pont et al, Halsbury's Laws of Australia (Lexis Nexis, vol 430) J D Heydon & MJ Leeming, Jacobs' Law of Trusts in Australia (Lexis Nexis, 8th ed, 2016) J Jacob and I Goldrein, Pleadings Principles and Practice (Sweet & Maxwell, 1990) JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (7th ed, 2006) P Young, C Croft and M Smith, On Equity (LawBook Co, 2009) Category: Principal judgment Parties: E Co [a pseudonym] (First Plaintiff) EM Co [a pseudonym] (Second Plaintiff) A [a pseudonym] (Third Plaintiff) B [a pseudonym] (Fourth Plaintiff) C [a pseudonym] (Fifth Plaintiff) Q [a pseudonym] (First Defendant) "Second Defendant" (Second Defendant) Representation: Counsel: A McInerney SC with N Kabilafkas (Plaintiffs) J Priestley SC with B Lloyd (19-23 November 2018); B Lloyd (10-13 December 2018) (Defendants)