Dao v Dao [1990] QSC 398

( :::, IN THE SUPREME COURT OF QUEENSLAND Before Mr. Justice Cooper BETWEEN: PHUOC DAO SANH DAO JUDGMENT - COOPER J. No. 1588 of 1989 No. 748 of 1990 Applicant/Plaintiff Respondent/Defendant Delivered the 30th day of November, 1990. CATCHWORDS: Counsel: P.J. McHugh for applicant/plaintiff M.O. Plunkett for respondent/defendant Solicitors: Messrs. Toogoods for applicant/plaintiff Messrs. Richardson, McGhie & Associates for respondent/defendant Hearing dates: 20 and 26 July, 1990. -- 1 of 18 -- IN THE SUPREME COURT OF QUEENSLAND BETWEEN: AND: PHUOC DAO SANH DAO JUDGMENT - COOPER J. No. 1588 of 1989 No. 748 of 1990 Applicant/Plaintiff Respondent/Defendant Delivered the 30th day of November, 1990. By writ of summons the plaintiff sought a declaration that the defendant held land of which he was the registered owner on trust for himself and the plaintiff in equal shares and for other consequential orders. The plaintiff and the defendant are brothers. On 5 February, 1990 the trial of the action commenced before me. It was adjourned on 7 February, 1990 because of difficulties which had arisen as to interpreter services. The plaintiff now contends that on the evening of 7 February, 1990, in the precincts of the court, the action was settled. A further writ was filed to enforce the settlement. The matter was heard by me on notice of motion supported by affidavit. As at 7 February, 1990 the plaintiff and the defendant were in dispute as to the interest which the plaintiff, in his own right and as administrator of the estate of his late brotherf held in the land the subject of this action and other land which was sold by order of this Court. The allegation was that the -- 2 of 18 -- 2 defendant had fraudulently procured the registration of himself as registered proprietor with the late brother to the exclusion of the plaintiff. Additionally, there were domestic disputes as to the care of the plaintiff's and the defendant's aged mother. The land in question is a house property at 31 Skinner Street, West End. On 7 February, 1990 the mother resided in the home and was cared for by the plaintiff's son who also resided there. An aged aunt was also a resident of the house. The defendant wished to return to live in the house, however, there were allegations that the aunt and the mother did not want his return and that there was ill-will between the defendant and the plaintiff's son. At that time the defendant operated a restaurant and there were questions as to his ability to properly care for the mother. There was then on 7 February, 1990 two quite distinct categories of dispute. The first was the legal dispute as to ownership of. property, including the land the subject of this action, which dispute was before the court. The second dispute was purely domestic and related to family relationships and, in particular, the care of the aged mother. After court on 7 February, 1990 the parties met alone in a witness room to discuss the matter privately. I find that the defendant asked two women who had been present at the trial to come into the witness room. One was Annie Lau Toms. Mrs. Toms had acted as interpreter at the trial. The other was Mrs. Mae Que Nguyen who was acting as interpreter for the plaintiff. Mrs. Nguyen was known to the defendant. Mrs. Toms, on an envelope which was in the room, recorded in Chinese characters what she swore· was agreed by the parties. -- 3 of 18 -- 3 The document is set out in numbered paragraphs. I find that each paragraph was agreed by the plaintiff and the defendant and transcribed by Mrs. Toms separately. That is, para. 1 was agreed and transcribed before the parties moved to para. 2, and so on. The document, ex. A to the affidavit of the plaintiff filed on 29 May, 1990, was translated by the Translation Service Centre of the Department of Immi~ration, Local Government and Ethnic Affairs. The translation is part of ex. B to the affidavit of Christopher Toogood filed on 29 May, 1990 and provides:- "(1) the house is to be shared half half, 50% 50% (2) San (sic) Dao will move in and live at the house by himself (after the two of us have signed) (3) A child of Phuc Doa (sic) will look after grandma until the 31st of March. (4) From 31st of March, 1990 onward San Doa (sic) will take over the duty of looking after mother (5) rates and insurance will be shared 50% 50% (6) electricity, gas and telephone expenses are the responsibilities of those residing in the house (7) should mother pass away, the house can only be sold two months after that event (8) we the two brothers will visit mother (9) none of us should put a mortgage on the property (10) we the two brothers will go back to a friendly basis and will respect each other (11) we will not rake over old ashes or take action against each other Signed: Phuc Doa (sic) Dated: 06. 02. 90 Signed: signature not legible Witnesses: Rose Annie" -- 4 of 18 -- 4 The parties are agreed that the word "two" in para. 7 should read "four". The date 6 February, 1990 is also incorrect. The defendant, by his points of defence, pleaded:- "3. The said document was not a compromise of all issues in dispute in the said action. 4. The said document was an informal agreement, at all times subject to a formal and legally binding agreement being drawn up by the parties' solicitors and signed by both the Plaintiff and the Defendant. 5. Neither the Plaintiff nor the Defendant have signed a formal legally binding agreement drawn up by their respective solicitors. 6. Further, or in the alternative, if the said document was intended to be a compromise of all issues in dispute in the said action (which is denied): ( i ) (ii) (iii) (iv) the said document is void for uncertainty; in the alternative, the said document has been repudiated by the Plaintiff; in the further alternative, the said document was subject to a condition subsequent that the terms thereof be carried out on or before the 31st day of March 1990 whereas the said terms remain wholly unexecuted; in the further alternative, the terms of the said document have been breached by the Plaintiff, such breaches giving rise to a right of recission (sic) by the Defendant." The defendant's present solicitor was not acting for him in February 1990. On 9 February the plaintiff's solicitors wrote to the defendant's then solicitors. The letter said, inter alia:- "We confirm that the above matter has been settled. We enclose herewith the terms of a draft Order which we believe embodies the terms of settlement herein. Kindly suggest any alterations· or amendments to the order that you consider prudent." -- 5 of 18 -- 5 On 13 February, 1990 the defendant's then solicitors wrote advising, amongst other things, that they held a bill of mortgage which the defendant had given in favour of the solicitors to secure payment of their fees and the solicitors wished to register the mortgage. On 16 February, 1990 the defendant's solicitors sent to the plaintiff's solicitors a draft Order and a draft Deed. The draft Order provided:- "BY CONSENT IT IS ORDERED:- (a) It is declared that the defendant Sanh Dao holds the property described as Lots 19 and 20 on Registered Plan No. 11094 situated in the County of Stanley Parish of South Brisbane being the whole of the land described in Certificate of Title Volume 2771 Folio 63 (hereinafter called 'the said land') upon trust for himself and the plaintiff in equal shares; (b) Upon this order being made the order for injunction made by His Honour Mr Justice Cooper on the seventh day of February, 1990 shall be vacated and the defendant shall be at liberty to take up residence in the dwelling house situated upon the said land; ( c) From the date of this order until the thirty-first day of March, 1990 one child of the plaintiff shall be permitted to reside in the dwelling house upon the said land to assist the residents therein to care for the mother of the parties Nhuan Cuc Tran. After the thirty-first day of March, 1990 only the defendant, his said mother and Cau Giang shall reside in the said dwelling; (d) That from the twenty-sixth day of February, 1990 the Plaintiff and the Defendant shall equally bear the costs of local authority rates and fire, storm and tempest insurance with relation to the said land and the dwelling house thereon; (e) That all expenses with relation to electricity, telephone, food and other proper expenses incurred by the residents for the time being of the said dwelling house be borne by them in such proportion as they shall mutually agree; -- 6 of 18 -- 6 (f) That upon the death of the said Nhuan Cuc Tran the said dwelling house shall be listed for sale with real estate agents and at a price mutually agreed upon between the parties and failing agreement as may be ordered by the court upon condition that completion of any contract of sale shall not take place earlier than four (4) months after the date of death of the said Nhuan Cuc Tran; (g) That from the date hereof, notwithstanding the residence of the defendant in the said dwellinghouse, two only at a time of the plaintiff and his children shall have free access to the said dwelling house for the purpose of visiting the said Cau Giang and the said Nhuan Cuc Tranbetween the hours of 7.00 a.m. and 7.00 p.m. and assisting the defendant in caring for both of the said persons; (h) Without the written consent of the other of them first had and obtained (which consent shall not be unreasonably withheld) neither party shall in any way whatsoever deal with the property at 31 Skinner Street, West End, either by selling, mortgaging or in any respect disposing of or encumbering the said property; (i) The moneys presently retained in the trust account of Gilshenan & Luton being the balance proceeds of the sale of the property of 24 Ashington Street, West End shall belong to thedefendant absolutely; (j) Each party shall bear their own costs; (k) The liberty to apply. The draft Deed provided:- ''WHEREAS: By the Court Registrar" A. PHUOC DAO (hereinafter called 'the Plaintiff') commenced Supreme Court Action No. 1588 of 1989 against SANH DAO (hereinafter called 'theDefendant'); B. Nhuan Cuc Tran made certain claims against theDefendant in respect of the partnership of theDefendant and Buu Dao now deceased and the estateof Buu Dao; -- 7 of 18 -- 7 C. Phuoc Dao has made certain claims against Sahn (sic) Dao in respect of his late brother's estate; D. The Plaintiff and the Defendant wish to settle all matters in dispute between themselves personally and all claims by or on behalf of the estate of Buu Dao; E. The parties have executed a form of agreement in their native language (hereinafter called 'the informal agreement'); F. The Plaintiff and the Defendant wish to give more formal expression to the said agreement. NOW THIS DEED WITNESSES AS FOLLOWS:- 1. That the informal agreement shall form part of this Deed and a copy thereof is attached hereto· and marked 'A' . 2. That the proposed consent court order also form part of this Deed and a copy is attached hereto and marked 'B' . 3. The furniture in the said house at 31 Skinner Street, West End as at the seventh day ofFebruary, 1990 shall remain in the house and remain or become the sole property of Sanh Dao to be used by him for the comfort and enjoyment of the residents of and visitors to the said house. 4. That Phuoc Dao in his capacity as administrator of the estate of Buu Dao makes no claimwhatsoever in respect of the partnershipinvolving the Mandarin Room Restaurant or any assets of the partnership including furniture and fittings and the motor vehicle used in connection with the restaurant or any money or otherproperty claimed to be owing by the Defendant to Buu Dao deceased. 5. The Defendant will place no unreasonable obstacles in the way of the Plaintiff and hischildren meeting with Mrs Tran at their residence or at other appropriate place. IN WITNESS HEREOF the parties have hereunto set their hands and seals the day and date hereinafter set forth." On 19 February, 1990 the defendant's then solicitors wrote to the plaintiff's solicitors:- -- 8 of 18 -- 8 "Dear Sirs, RE: DAO ATS DAO The parties have reached agreement in this matter. You and I as the solicitors have been attempting to formalise the matter. We now understand that your client wants to change the agreement. There appears to be no basis for a change to the substantive aspects of the agreement and unless the matter can be resolved prior to your departure overseas we .intend to advise our client in accordance with the agreement that they reached between themselves." There was some discussion as to an adjournment of the matter which was then listed to come before the Senior Master on 26 February, 1990. On 20 February, 1990 the defendant's then solicitors wrote to the plaintiff's solicitors as follows:- "Dear Sirs, Re: DAO ATS DAO We acknowledge receipt of your letter dated 20th February, 1990 and advise that our client does not consent to the adjournment. However, we understand that our client is of the opinion that a binding agreement has been reached and he wishes to move in to the house ·to live on 26th February, 1990." By this time the plaintiff, by his solicitors, was asserting that there was no binding agreement and by letter of 20 February, 1990 sought from the defendant's solicitors what the defendant alleged were the terms of the agreement. On 20 February, 1990 the defendant's then solicitors wrote asking to be advised in writing "as to why you and your client do not believe a concluded agreement was reached on 7th February, 1990". -- 9 of 18 -- 9 On 9 April, 1990 the defendant by his present solicitors wrote, inter alia, as follows:- "We refer to the above matter and advise that we have received instructions to act on behalf of the Defendant. We enclose Notice of Change of Solicitors, by way of service. We note from the correspondence between your firm and the former solicitors for our client, that there appears to have been some confusion about whether the · matter was settled. We note, further, your most recent contention that the matter was not settled. In the event that the matter proceeds further, we submit your client has not made a full discovery. The Affidavit by Tong Dao clearly amounts to a waiver of legal professional privilege by your client. If this Affidavit (or any evidence to the same effect) is to be relied on by your client he must discover the· entire file held by his former solicitors, Messrs Woodgate & Associates. Would you please ensure that a further supplementary Affidavit of Documents is filed on behalf of your client as soon as possible. We look forward to hearing from you." On 27 April, 1990 the plaintiff by his solicitors wrote stating:- "Our client has advised that in his opinion the agreement reached and reduced to writing subsequent to the last Court appearance in the Supreme Court of Queensland, is an agreement which brings matters of dispute between the parties to an end. We invite 30th April, application agreed upon you to attend at Court on Monday the 1990 and join with us in making for Consent Orders in terms of the matters between the parties. Unless you are prepared to join with us we will be submitting that the matters are at an end, that a compromise has been reached and we will be making appropriate application for enforcement of the compromise. If you have any questions with relation to this matter kindly do not hesitate to contact the writer." The defendant refused to join in making the orders sought by the plaintiff and thereafter contended that no agreement had -- 10 of 18 -- 10 been made and otherwise took the position pleaded in the defence which I have set out above. I am satisfied that the plaintiff and the defendant intended on 7 February, 1990 to finally resolve the matters in issue between them in relation to both the legal dispute and the domestic dispute. I am satisfied that the condition of the aged mother, who was seriously ill, required that both the legal and the domestic dispute be resolved because the domestic dispute could not be resolved with the legal dispute outstanding. I find that the plaintiff and the defendant intended that their agreement as to the matters the subject of the legal dispute was to take effect immediately and that the document which they signed was to bind them and operate immediately. I find that it was the common intention of the parties that such further documentation as was to be signed was simply for the purpose of recording in a more formal manner that which had been agreed and to provide the machinery to carry it into effect. The preamble to the draft agreement forwarded by the defendant's then solicitors accurately records the circumstances which in fact existed at the time the draft was tendered. It is permissible for the court to look at the conduct of the parties subsequent to the date of the alleged agreement where such conduct constitutes admissions as to the existence of a contract, the parties to it and its basic terms and such conduct may be referred to for the purpose of determining each of those matters (see Australian Energy Ltd. v. Lennard Oil NL [1986] 2 Qd.R. 216 at 237 per Thomas J., with whom Andrews C.J. agreed·, and the cases cited there). The conduct of the parties, until -- 11 of 18 -- 1 1 the plaintiff firstly and latterly the defendant began to deny the existence of any contract, is only consistent with the matter being finally determined. The change in position of inconsistent with his conduct the defendant is entirely as reflected by his then solicitors. There has been no suggestion that the solicitors were acting otherwise thati in accordance with his instructions. The change of attitude of the plaintiff was, I find, induced by his ascertaining that the defendant had mortgaged the property to his then solicitors. I find that the defendant had told the plaintiff on 7 February, 1990 that the property was not mortgaged, a previous mortgage having been paid out with funds from the sale of another property, the Ashington Street property, which was also the subject of a dispute between the parties. It was submitted by Mr. Plunkett on behalf of the defendant that paras. 10 and 11 of the handwritten agreement are unenforceable, uncertain and not intended to have legal effect. I do not agree. I accept the evidence of Mrs. Toms with respect to these two clauses. She prepared them and they were intended to reflect an agreement that all matters in dispute were resolved as between the brothers and no further action would be taken in respect of them. I find that the parties agreed on 7 February, 1990 that:- 1. the parties would thereafter hold the Skinner Street property in equal shares; 2. the defendant would be entitled to move into and live in the house property once the parties had signed such -- 12 of 18 -- 12 documents as were necessary to secure the plaintiff's legal entitlement to his interest; 3. until 31 March, 1990 one child of the plaintiff would reside in the dwelling house to assist in the care of Nhuan Cuc Tran, the mother of the parties and the grandmother of the child, who lived in the said home; 4. after 31 March, 1990 the defendant would assume responsibility for the care of the mother for so long as she lived in the house; 5. the rates and insurance costs relating to the property should thereafter be paid in equal shares by the parties; 6. all expenses relating to electricity, gas and telephone services to the house property were to be paid for by the persons residing in the house for the time being; 7. upon the death of Nhuan Cuc Tran, the house property would be sold at a price agreed by the parties provided that completion and vacant possession could not be made or required to be yielded up before the expiration of four months from the date of the death of Nhuan Cuc Tran; 8. the parties would have liberty to, and would in fact, visit their mother at the house property during her residence there; 9. neither the plaintiff nor the defendant would mortgage or encumber the property; 1 0. the parties compromised all existing claims which the plaintiff, for himself or as administrator of the estate of Buu Dao deceased, then asserted against the defendant or may in the future have asserted and the parties would take -- 13 of 18 -- 13 no further legal action against each other in relation to those claims; and 11. the solicitors of the parties would prepare such formal documentation as was necessary to formalise and give effect to the agreement and the parties would sign such documentation. The agreement did not specify any time for the carrying out of the agreement, although I find that it was the expectation of the parties that the defendant would take up residence by 31 March, 1990 when his business closed. In the circumstances, there was therefore implied as terms of the agreement that the agreement would be performed within a reasonable time and that the parties would do all such things as were necessary on their respective parts to enable the agreement to be fully performed. I find that the plaintiff, through his solicitors, from some time after 15 February, 1990 determined not to regard himself as bound by the agreement because he learned of the existence of the unregistered mortgage in favour of the defendant's then solicitors. The case before me has not been argued on the basis that the plaintiff had any right to rescind the agreement on the ground of misrepresentation as to there being no mortgage on 7 February, 1990. Nor that the plaintiff in fact exercised any valid right to rescind. The defendant denied that he made the representation or that if there was any agreement, which he denied, that he did anything in breach of it. The case, as argued by the defendant, was that the refusal of the plaintiff to be bound was a repudiation of the contract which entitled him to rescind. -- 14 of 18 -- 14 Even assumingthat the conduct of the plaintiff constituted a repudiation of the agreement by him, the defendant did not elect to accept the repudiation and terminate the entire contract. The best position for the defendant is that the letters of 19 and 20 February, 1990 do not amount to an unconditional affirmation of the entire contract but a demand for performance coupled with· an intimation that failing timely performance the defendant would take such legal action as he might be advised. The consequence was that "it kept the contract open for a limited time and conditionally upon compliance" (Holland v. Wiltshire (1954) 90 C.L.R. 409 at 415). The letter of the defendant's solicitors of 9 April, 1990 notes that "there appears to be some confusion about whether the matter was settled" and seeks some position. On 27 April, solicitor on that date, renunciation and sought clarification as to the plaintiff's 1990, by letter from the plaintiff's the plaintiff withdrew his previous that the defendant join with the plaintiff in having consent orders made on 30 April, 1990 to give effect to the contractual terms. At the time the plaintiff withdrew his renunciation and offered and called for performance, the contract was on foot for the benefit of both parties (Peter Turnbul~ & Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. (1953-1954) 90 C.L.R. 235 at 250). The defendant, having failed to determine the contract by that time (assuming a right to do so), was thereafter bound to perform his obligation under it. The defendant has therefore failed to make out any of the matters pleaded by way of defence. -- 15 of 18 -- 15 The parties' mother, Nhuan Cuc Tran, died on 4 May, 1990. As appears from ex. 3, the defendant has secured his personal cheque account number 362983008 with the A.N.Z. Bank, Turbot Street, Brisbane by mortgage over the Skinner Street property .. As at 6 July, 1990 the account had a debit balance of $3,757.58. The plaintiff has sought a declaration that he is a co-owner with the defendant of the house property in equal shares. Having regard to my finding that there was an agreement made on 7 February, 1990 whereby it was agreed that as and from that date he held such an interest, irrespective of whether he was entitled to such an interest prior to that date, the plaintiff is entitled to such a declaration. The plaintiff has also sought the appointment of trustees for sale under s. 38 of the Property Law Act 1974. Christopher Toogood, the plaintiff's solicitor, and Stephen Andrew McGhie, the defendant's solicitor, have both consented to act as trustees for sale, if I am minded to make such an order. The history of this matter and the findings I have made persuade me that such orders ought to be made. The mortgage on the Skinner Street property ought to have been discharged pursuant to the order of Mr. Justice de Jersey made on 2 June, 1989 (ex. 5). This has not been done and the defendant has maintained the mortgage on the property to support his own indebtedness to the bank. The mortgage, and any other encumbrance the defendant has given over the property, ought to be discharged out of the defendant's share of the proceeds of sale. -- 16 of 18 -- 16 Orders: 1. Declare that action number 1588 of 1989 between the plaintiff and the defendant commenced in this honourable Court on 11 May, 1989 was compromised by the agreement of the parties on 7 February, 1990. 2. Declare that the defendant as registered proprietor holds the property described as Lots 19 and 20 on Registered Plan No. 11094 situate in the County of Stanley, Parish of South Brisbane, being the whole of the land contained in Certificate of Title Volume 2771, Folio 63 (the said land) upon trust for himself and the plaintiff in equal shares. 3. Order that Christopher Toogood and Stephen Andrew McGhie be appointed trustees for sale of the said property. 4. Order that the said land be vested in the trustees to be held by them upon statutory trust for sale pursuant to s. 38 of the Property Law Act 1974. 5. Order that the trustees do sell the said land in such manner as the trustees think fit ( including by public auction or private treaty) and deal with the proceeds of sale, after payment of costs and expenses in respect of the sale thereof, any rates and taxes, and the trustees' proper costs including their legal professional costs, associated with the performance by them of their trust duties, (hereinafter referred to as the "nett proceeds") to be applied as follows:- (a) first to be paid in and towards discharging the indebtedness to the Australian and New Zealand Banking -- 17 of 18 -- 17 Group Limited under Mortgage No. H255624 over the said land; (b) second to be paid in and towards discharging any bill of mortgage or encumbrance over the said land necessary to enable the trustees to convey a clear and unencumbered title to the said land; (c) third to pay to the plaintiff one half share of the nett proceeds as defined in this order; ( d) Fourth to pay the balance of the moneys to the defendant. 6. Order that the trustees to be at liberty to sell the property to the plaintiff or the defendant who shall be at liberty to purchase the same and to bid at any auction of the said land. 7. Order that the defendant pay the plaintiff's costs of and incidental to the action, including the costs of the motion and reserved costs, if any, to be taxed. 8. Liberty to the trustees and the parties to apply for such further or other orders or directions as to the honourable the Chamber Judge may seem meet. -- 18 of 18 --