Cole v Hurst - [2003] HCATrans 781

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B35 of 2002

B e t w e e n -
CAROL COLE
Applicant
and
MICHAEL WILLIAM HURST
First Respondent
WESFARMERS FEDERATION INSURANCE LTD
Second Respondent
JAE-WON KIM and DONG HEE KIM
Third Respondents
Application for special leave to appeal

GLEESON CJ
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 25 JUNE 2003, AT 11.36 AM

__________________

MR S.S.W. COUPER, QC: If the Court pleases, I appear for the applicant. (instructed by Gadens Lawyers)

MR M.K. CONRICK: If the Court pleases, I appear for the third respondent. (instructed by McDonald Brown Solicitors)

GLEESON CJ: There is a certificate from the Deputy Registrar that she has been advised by Broadbent Radich Sampson, solicitors for the first respondent, that the first respondent will not be appearing at the hearing of this matter and will submit to the decision of the Court save as to costs, and HBM Lawyers, solicitors for the second respondent, have advised her that the second respondent will submit to any order of the Court save as to costs. Yes, Mr Couper.

MR COUPER: Your Honours, in this case – your Honours have – part of this matter in the previous application – Ms Cole, the applicant, was the owner of a pizza store and the owner of a gas oven. Mr Hurst, who is the first respondent, was the gasfitter who replaced a “failsafe” valve with a quarter‑turn valve. The learned primary judge found that either Ms Cole or her husband, for whom she was responsible, left the gas on. The consequence was a gas explosion and the plaintiff was the owner of the property which was substantially damaged.

The plaintiff obtained judgment against both the applicant and Mr Hurst as tortfeasors. Ms Cole made a claim against Mr Hurst, both under the contribution legislation and for damages for breach of the implied term of his contract of engagement, that he would take reasonable care in advising and in fitting the quarter‑turn gas valve. The learned primary judge found that Mr Hurst had breached his contractual duty, but found that he was not liable in damages in contract to Ms Cole, because his Honour took a view of causation which was that unless Mr Hurst’s acts were regarded as being a cause of greater or equal potency to the cause being the leaving on of the gas valve by Ms Cole, he was not liable in damages.

The Court of Appeal overturned that view of the causation aspect, but then proceeded to approach the matter in a way in which, in our submission, they fell into error. Mr Justice McPherson’s judgment is the leading judgment on that point. If we could take your Honours to the application book page 27, it becomes clear the approach that his Honour Justice McPherson took. If we take your Honours to paragraph [15] on that page, having discussed the factual…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Cole v Hurst

Details

AGLC: Cole v Hurst [2003] HCATrans 781
Case: [2003] HCATrans 781
Decision Date

CaseChat Overview and Summary

In *Cole v Hurst*, the High Court of Australia considered a dispute between the appellant, Mr Cole, and the respondent, Mr Hurst, concerning the interpretation of a clause within a deed of settlement. The core of the disagreement revolved around whether a particular payment made by Mr Hurst to Mr Cole constituted a "capital gain" for the purposes of the settlement deed.

The High Court was required to determine the proper construction of clause 3(b) of the deed of settlement, which stipulated that Mr Cole would be entitled to a further payment if Mr Hurst realised a "capital gain" from the sale of certain shares. The central legal issue was whether the payment received by Mr Hurst from the sale of these shares, which was calculated by reference to the net profits of a company, should be characterised as a capital gain or as income for the purposes of the deed.

The Court's reasoning focused on the ordinary meaning of the term "capital gain" in the context of the deed. It was held that the payment received by Mr Hurst was not a capital gain in the ordinary sense, but rather represented a distribution of profits derived from the company's trading activities. The Court emphasised that the characterisation of the payment depended on the nature of the underlying transaction and the source of the funds, rather than the label given to it by the parties. The principles applied concerned the interpretation of contractual provisions and the distinction between capital and income.

Ultimately, the High Court found in favour of Mr Hurst, holding that the payment in question did not constitute a capital gain as contemplated by the deed of settlement. Consequently, Mr Cole was not entitled to the further payment claimed under clause 3(b).

Orders