[2012] NSWSC 3
CONTRACTS – Whether deceased made certain promises to plaintiff in 2003 in consideration of her leaving escort industry to become his non-exclusive mistress -alleged promises include establishment of multi-million dollar trust funds for plaintiff’s children, and half a million dollar annual allowance and allowances for accommodation and business expenses for plaintiff – whether deceased made promises question of fact – defendant calls no evidence, save for tendering some documents – plaintiff’s evidence challenged but uncontradicted – cases against deceased estates founded on oral utterances of deceased which only deceased can refute require Court to closely scrutinise plaintiff’s evidence – no legal requirement for corroboration but corroboration ordinarily sought – plaintiff’s version of events of doubtful reliability – in context of a case involving extraordinary wealth deceased who had other “mistress” relationships plaintiff’s evidence not inherently incredible – some limited corroboration of plaintiff’s version – plaintiff consulted solicitors about claim prior to death of deceased – defendant could have called associate of deceased to deny subsequent conversation detailing promises allegedly made to plaintiff – witness in defendant’s camp and practically available to defendant – Jones v Dunkel inference drawn that associate’s evidence would not have assisted defendant’s case – held that deceased made promises as alleged in 2003 conversation.
CONTRACTS – Certainty – terms of agreement discussed in 2003 conversation sufficiently certain and complete.
CONTRACTS – Intention to create legal relations – absence of express statement that arrangements are legally binding -inference of fact whether intention to create legal relations – intention objectively determined – parties to family, social and domestic arrangements or agreements generally do not intend to create legal relations – rebuttable presumption that in such contexts parties do not intend arrangements and agreements to be legally binding – creation of “mistress” relationship determines that context of present case social – not obvious plaintiff relied on enforceable promise – parties did not seek legal advice and agreement not recorded in writing – incongruous to assume deceased could have obtained injunction restraining plaintiff from returning to escort industry or claimed damages for disappointment if plaintiff did not adequately discharge “mistress” role – subsequent conduct considered in assessing whether legally binding agreement intended – plaintiff’s subsequent letter to deceased does not assert legal right to performance of promise – presumption no intention to create legal relations not rebutted – parties did not intend to make contract.
CONTRACTS – Contracts that are void, illegal or unenforceable on grounds of public policy – contracts that are sexually immoral and/or prejudicial to the status of marriage – historically contracts for an ‘immoral purpose’ unenforceable – changing social mores result in liberalised attitude to extramarital cohabitation – rule as to unenforceability of contracts that are sexually immoral and/or prejudicial to status of marriage still pertains – content of rule – authorities establish two classes of case where contract will be not be void: where contract does not bring about state of extramarital cohabitation but makes provision for extant one; and/or where sexual relationship part of wider relationship including cohabitation and mutual support – contracts to provide meretricious sexual services contrary to public policy and illegal – arrangements between plaintiff and deceased not made to facilitate continuation of extant cohabitation or for a relationship beyond sexual services – contract void as contrary to public policy.
ESTOPPEL – Equitable estoppel – plaintiff must establish that she acted to her detriment on basis of assumption adopted by reason of the conduct or acquiescence of the defendant in circumstances where unconscionable for defendant to deny assumption – plaintiff claims suffered detriment by reason of giving up escort business, closing accessories business and not documenting agreement with deceased in writing – plaintiff had left escort business six years prior to arrangement – no evidence deceased asked plaintiff to close accessories business – omission to record agreement in writing not relevant detriment – detrimental reliance not established – rule that courts will refuse to enforce rights where enforcement would offend public policy equally applicable to claims arising in estoppel as in contract – plaintiff’s claim in equity also fails on public policy grounds.
CONTRACT – Whether plaintiff’s claim not maintainable by reason of an accord and satisfaction said to have occurred in February 2005 – plaintiff offered via email $100,000 and transfer of ownership in a car “in full and final settlement” of all claims against the deceased – plaintiff accepts moneys and car – accord and satisfaction requires sufficient material in relevant documents so that it is seen that acceptance of payment will be in full and final settlement of claim – any reasonable reader would have construed payment to be made in full and final settlement of all claims – plaintiff’s reply to email that she “accepted” and “acknowledged” the communication evince agreement to its terms – plaintiff’s claims not maintainable.
CONTRACT – Whether plaintiff’s claim not maintainable by reason of an accord and satisfaction said to have occurred in November 2005 – plaintiff offered, via document provided to her by associate of deceased, $50,000 “in full and final settlement of all current and future claims” against deceased – plaintiff denies reading document – highly improbably plaintiff did not read document as corrected spelling of her name and signed it – no application to set aside release – plaintiff again released claims in November 2005.
Date heard: 12, 13 14 & 15 September 2011
Decision date: 16 January 2012
Judgment: Bereton J
Judgment for the defendant with costs.
Contract
30 Family, social, and domestic arrangements do not normally give rise to binding contracts, because the parties lack the necessary intention [ Teen Ranch Pty Ltd v Brown (1995) 87 IR 308, 310 (Handley JA, referring to Balfour v Balfour [1919] 2 KB 571)]. In Balfour , a husband’s promise to pay his wife an allowance of 30 per month until she could rejoin him in Ceylon was held not binding for lack of intent that it be legally enforceable. In Cohen v Cohen (1929) 42 CLR 91, Dixon J (as he then was) held an arrangement between intending husband and wife as to a dress allowance to be not a contract (at 96):
The parties did no more, in my view, than discuss and concur in a proposal for the regular allowance to the wife of a sum which they considered appropriate to their circumstances at the time of marriage.
31 In Jones v Padavatton [1969] 2 All ER 616, a mother’s promise to maintain her daughter at a specified rate if she would go to England and read for the Bar with a view to later practising in Trinidad was held not legally binding, notwithstanding that performance would necessitate the daughter abandoning secure accommodation and employment in Washington and her teenage son’s education there. The court found that the arrangement between the mother and daughter was a family arrangement depending on the good faith of the parties in keeping the promises made and was not intended to be a binding agreement. The daughter’s claim thus failed. Salmon LJ said (at 621):
Did the parties intend the arrangement to be legally binding? This question has to be solved by applying what is sometimes (although perhaps unfortunately) called an objective test. The court has to consider what the parties said and wrote in light of all the surrounding circumstances, and then decide whether the true inference is that the ordinary man and woman, speaking or writing thus in such circumstances, would have intended to create a legally binding agreement.
32 As Ward J has recently explained in Darmanin (at [206]), there is a rebuttable presumption of fact that arrangements or agreements made in a family are not intended to have legal force, the rationale being that, at the time of making the alleged promise, the parties would not have regarded their arrangements in terms of legal consequences. As her Honour also explained (at [207]), this presumption has been applied beyond the family context to other social and domestic arrangements [citing, as examples, Coward v Motor Insurer’s Bureau [1963] 1 QB 259; Buckpitt v Oates [1968] 1 All ER 1145; and Parker v Clark [1960] 1 All ER 93] .
Public Policy
38 One of the heads of public policy under which contracts have traditionally and conventionally been held void and illegal is that they are sexually immoral and/or prejudicial to the status of marriage. In Girardy v Richardson (1793) 1 Esp Cas 13, 170 ER 275, Lord Kenyon CJ held that where the wife of the plaintiff – who managed the business of his house in letting the lodgings – let rooms to the defendant who was a “woman of the town”, knowing of the defendant’s mode of life, the contract for use and occupation of the rooms upon which the plaintiff sued was ” contra bonos mores ” and could not found an action. The classic case is Pearce v Brooks (1866) LR 1 Exch 213, in which the plaintiffs let on hire to the defendant, a prostitute, a new horse-drawn vehicle, with knowledge that it was to be used in the course of her trade. The contract was held illegal on the ground of sexual immorality. In Upfill v Wright [1911] 1 KB 506, the plaintiff by his agent let a flat to the defendant for a term of three years, the agent knowing that the defendant was the mistress of a certain man, and assuming that the rent would be provided by that man on account of her being a “kept woman”. The court held that as the flat was let for an immoral purpose, the plaintiff was not entitled to recover the rent.
39 In more modern times, the House of Lords in Fender v St. John-Mildmay [1938] AC 1 held that a promise made by a spouse, after a decree nisi for the dissolution of the marriage had been pronounced, to marry a third person after the decree became absolute, was not void as being against public policy. But Lord Wright explained (at 42) (emphasis added):
The law will not enforce an immoral promise, such as a promise between a man and woman to live together without being married, or to pay a sum of money or to give some other consideration in return for immoral association . But nothing of the sort was suggested in this case. On the contrary, the promise, if carried out, would have regularized an immoral association. English law recognises the right of divorced people to marry though their former consorts are alive. The law has furthermore sacrificed a rigid idea of morality to the idea of making reparation by enforcing obligations under seal by a man to pay money to a woman in respect of past immoral cohabitation, though it might have been said that to enforce such obligations tended to encourage immorality.
40 Later, his Lordship said (at 49):
Of course if the promise is given in consideration of future immoral relations it is illegal and void on that ground , but I cannot see any implied general tendency to immorality in such a promise. If the guilty parties are living together in immoral relations, the promise points to moral relations being established by marriage in the near future, when the decree is made absolute. If the parties are acting morally, I cannot see why the promise after decree nisi should lead them into immorality.
41 Lord Thankerton said (at 26):
There remains the question of immorality, and it is in this regard that I find a vital distinction between a promise to marry on the contingency of a dies incertus , and a promise to marry on the decree nisi, already in existence, being made absolute . The general tendency of the latter, I should assume, will be to promote patience until the expiry of a period, which, in the vast number of cases, is practically mechanical in its operation.
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