Evans v The Heather Thiedeke Group Pty Ltd

[1988] HCATrans 296

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B44 of 1988

B e t w e e n -

JOHN D. EVANS

Applicant

and

THE HEATHER THIEDEKE GROUP

PTY LTD

Respondent

Application for special

leave to appeal

WILSON J

DEANE J

DAWSON J

Evans

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 25 NOVEMBER 1988, AT 12.07 PM

Copyright in the High Court of Australia

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MR H.G. FRYBERG, QC:  May it please the Court, I appear

with my learned friend, MS M.J. WHITE, for the applicant; (instructed by King & Co.)

MR P.D. McMURDO:  May it please the Court, I appear for

the respondent in this matter.

(instructed by Morris, Fletcher & Cross)

WILSON J:	Yes, Mr Fryberg.
MR FRYBERG:	Your Honours, the major question before the

Full Court in this matter was whether a particular
matter which on all sides, it was agreed, was discussed
between the parties to this application and to

the contract that is the subject of it, became a

term of the respondent architect's retainer. That

this is so appears in the application book in the

judgment of the Full Court which was given by

Mr Justice Connolly for the court at page 48 of

the book, lines 1 to 15, which is in fact, as Your Honours will see, the second page of the

judgment, where His Honour said:

Although the proposition is variously

stated, it is sufficient for present

purposes to say that the appellant

contends that it was part of the retainer that the units should be so designed that

the cost of their construction would not

exceed a figure which would return a

profit of about 20 per cent to the appellant

if they were sold at an average price of

$70,000.

(Continued on page 3)

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MR FRYBERG (continuing):

Williams J, who tried the action, gave

judgment for the respondent, finding that

while the discussions between Mr Heather on

the one hand and Mr Crisp and the appellant

on the other revealed a desire on the part

of the appellant to keep the sale price

per unit as close as possible to an
average of $70,000.00, there was never

a contractual term that the respondent's

design should be such that the units could

be marketed profitably for that price.

That that is so appears in the judgment of the

learned trial judge and the reference to that

is at page 27, line 29 through to page 28, line 6.

The duty of the Full Court was to decide

the appeal in accordance with inferences of

fact which they themselves drew from uncontroverted

primary facts or primary facts as found by the

trial judge. That, with respect, is clearly

stated in the judgment of this Court in

WARREN V COOMBES, (1979) 142 CLR 531 and the

passage on which we would rely is at page 552,

in the judgment of the majority, At about line 10,

it is said:

Again with the greatest respect, we can see no justificatio.for holding that an

appellate court, which, after having

carefully considered the judgment of the

trial judge has decided that he was wrong

in drawing inferences from established facts,

should nevertheless uphold his erroneous

decision. To perpetuate error which has

been demonstrated would seem to us a complete

denial of the purpose of the appellate process. the case - the facts as well as the law -

for itself. In so doing it must recognize the

advantages enjoyed by the judge who conducted

the trial. But if the judges of appeal
consider that in the circumstances the trial

judge was in rio better position to decide

the particular question than they are themselves,
or if, after giving full weight to his decision,

they consider that it was wrong, they must

discharge their duty and give effect to their

own judgment.

WILSON J: Is not your difficulty that they did all that and

were unable to persuade themselves that it was wrong?

MR FRYBERG:  Your Honour, no, because in the present case

first, they formed the view in the Full Court that

the contract was partly oral and partly in writing,

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whereas the trial judge had held it to be

in writing. That is of course a starting point

when what is. being said is that there should

be an inference as to whether something which

was discussed became a term of the contract.

That that is so appears in the application book

at page 50, on page 4 of the Full Court
judgment at line 14, and continuing to page 51,

line 2. At line 14 on page 50, the Full Court

says:

The learned Judge came to the conclusion

that the only relevant terms of the

contract between the parties were those

recorded in correspondence to which he had

already referred which would appear to be -

and then they list out what the documents were,

and I will not read that. After the listing

at line 25:

(Continued on page 5)

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MR FRYBERG (continuing):

However, it is clear enough that none of this

correspondence Joes so much as identify the

project so that the contract between the parties

required resort to evidence which went beyond

this correspondence. Nothing in that correspondence

could have precluded a finding that the respondent

had agreed to design the units in such a way

that the cost constraints to which I have

referred could be satisfied.

And he proceeds then to quote from the learned trial

judge and to deal with matters of law with which we

do not dissent. That is the first point in which

the Full Court, in effect, found in our favour. Then,

we submit, it is clear that the Full Court would have

drawn the inference contended for by the applicant but for the Full Court's wrong view that the trial

judge's contrary finding was, or depended upon, his

impression of the witnesses.

The Full Court made it clear in two passages

that that was its approach. First, at page 52 line 19

through to page fi3 line 6 ,. where His Honour said:

The appellant's problem is, of course, that the

learned trial judge has found as a fact that

the respondent was never a party to an agreement

such as is contended for.	The question is
whether that finding can be displaced.	I

should say at the outset that, having regard to

the appellant's personal situation, made known
to the respondent and particularly the fact
that the appellant had no means of financing

this project, except the land, as he did not

wish to involve the home in which his wife was

jointly interested, there was certainly no

inherent improbability in the appellant's
seeking to have the respondent investigate the

feasibility of the .. project within the financial

constraints with which he was concerned. These

constraints continued to be the subject of

discussion up to 3rd January, 1985, as the
learned judge's findings clearly demonstrate.
His Honour's conclusion that, nonetheless, the
respondent was not retained to design units

within those restraints must, I think, in the long

run depend upon his stated preference for the

evidence of Mr Heather.

And the fact that the Full Court was of that view is

confirmed at the passage then commencing at the foot

of that page, 53, line 27 and continuing to line 13

on the following page where, after dealingwith the

actual reasons of the trial judge for his conclusion

and I will come back to them shortly - the Full Court

said, or Mr Justice Connolly for the Full Court said:

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For my part, I would, I think, have been disposed to conclude where a client conveys

to a designing architect a desire to limit

cost in a particular way, that will ordinarily

be a term of the retainer so that if the

restraint cannot be complied with,, the contract

either goes off or is modified. Indeed

Mr Heather conceded that the architect must

produce something which will meet the budget of

--: ·the': client and that this is a reasonable

constraint for the client to impose. Nevertheless,

I feel considerable difficulty about giving

effect to this view in the teeth of the finding of

fact for in the long run it is a question of fact

whether the architect agreed to work within the

constraint.

(Continued on page 7)

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MR FRYBERG (continuing):

This, in turn, must depend, in a case such

as this, on the impression which the witnesses

made on the trial Judge. It is at this stage

that the significance of the issue as to

whether the appellant was or was not present

on 12th November, 1984 emerges.

Now that issue was concerned with the credibility of

the architect, Heather. It really is not a matter that

does govern that at all, indeed the learned trial

submission, quite independently of any impression which	judge's conclusion on this question was made, in our
the witnesses may have made upon him. And - - -

DAWSON J: The trial judge did say he preferred, where there

was conflict, the evidence of Heather, did not he?

MR FRYBERG:  He did, but on this particular - - -

DAWSON J: And clearly Heather said there was no such term

agreed upon?

MR FRYBERG:  Not so, with respect, Your Honour, not so, no.

What happened was that the trial judge's reasons for

drawing the inference are set out at page 26 of the

appeal book and it is convenient··,_ -4..n answer to

Your Honour,to go to that now. At page 26 of the

record, line 18, going through to page 28, line 6,

His Honour sets out at line 18 the effect of the

term "contended for" as part of the contract and then

says:

I am not satisfied -

I am reading from line 25 -

that there was an agreement on that date to

that effect. I expressly find that the

plaintiff was never a party to any such proposal.

The plaintiff was the architect, so he is saying, not

that there was no such proposal but the plaintiff

was not a party to it:

It is true that at the meeting on 12th November

there was discussion which led to Heather

concluding, on the basis of costs provided by

Crisp, that units could be marketable at about

$70,000.00. But it was never a term of the

retainer that the plaintiff would design units

which could be sold at that price. It is clear

from the brief resume of facts I have set out

above -

and he then goes on, and I will not read the whole of

the passage, in that paragraph to set out what can

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be summarized as two reasons for his conclusion.

The first of the two reasons relates to building costs

and budget estimates which were later given in evidence

and the second relates to an amendment of the amount

of $70,000 to $78,000 and later to $85,000 by the

present applicant. Now,as well as that,there is the

last sentence of that paragraph to which I will return

in a moment, which might be thought to constitute a

third reason for the trial judge's approach. Those

three matters, there set out, clearly form the basis

of the conclusion because the trial judge then goes

on at line 26:

The price of $70,000.00 was mentioned

at the first meeting, and the budget estimates discussed at the meeting on 3rd January, 1985, tended to indicate that a sale price of not

more than $70,000.00 was attainable. Clearly

Heather was aware at all material times that

the defendant wished the sale price per unit to

be as close to $70,000.00 as possible, and

all the parties contemplated that the plaintiff

would bear that in mind as work progressed. But

that is well short of finding that the plaintiff's

retainer was to design units which could be

marketed for no more than $70,000.00.

(Continued on page 9)

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DAWSON J:  Mr Fryberg, you left out the last line of the

preceding paragraph, "such conduct on his - - -

MR FRYBERG:  I am coming back to that, with respect,

Your Honour. I thought I had said that and I want

to come back to it in the context of showing how

the Full Court dealt with what I put were the three

reasons. That was the third of the three reasons

which the trial judge seems to have given, Your Honour,

and the treatment of those matters in the Full Court dealt with each one of those. The Full Court dealt

with the first two, the direct primary facts, if one

can call them that, at page 53, lines 7 to 26.

That is the passage that I broke from in what I

read to Your Honours earlier, and it is unnecessary

to read or go into the merits of that. It is

sufficient to say that the Full Court disagreed in
relation to those two matters with what the trial

judge had found. It did not think that those matters

were a sufficient basis for his conclusion.

As to the third matter - the reference which

His Honour made in the last sentence of the

paragraph on page 27 of the record - what His Honour

said there was:

Such conduct on his part confirms what

is established by Heather's evidence,

which I accept, that the retainer was

not limited as alleged.

That is capable of being construed in two ways: one

is as a reference to something said by Heather, and

the other is as a conclusion by the trial judge as to a sunnnary of his view of the evidence. It does not

matter which approach one adopts. If one takes the

former view one goes to what that evidence in fact

was and that is considered by the Full Court at

page 55, line 21 of the record where Your Honours

might have noticed that what happened was that

evidence in-chief was given in the form of written

statements, the case being one decided in the commercial

causes jurisdiction in the supreme court.

The oral evidence then consisted of cross-

examination and what was put to Heather, as is

recorded at line 21:

It was put to him that the statement was made to him by either Mr Crisp or

Mr Evans that the units must be designed

and built so as to sell at an average of

$70,000 and he replied that he did not

recall it in as clear terms as that.

And that is it. That is the whole of the direct

evidence from Heather about it. Now, that is why

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we said that the alternative way of viewing what the

trial judge said in the last sentence of the

paragraph on page 27 is that he intended it rather

as a summary way of stating his conclusion about

whether the term should go into the contract. It

does not matter because in neither case is it possible
to hold with the Full Court that there is a finding
of primary fact which depends upon the judge's
impression of the witness, and that is the reason

advanced in the Full Court for not applying their

own view of the facts.

(Continued on page 11)

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MR FRYBERG (continuing): It is our submission that the

Full Court ought to have acted in accordance with

WARREN V (X)()MBES and to have applied their own

inferences of fact.

WILSON J: It is a very narrow point, Mr Fryberg. Is not that

statement	on page 27 a finding of primary fact,
that:

Such conduct on his part confirms what is established by Heather's evidence, which I

accept, that the retainer was not limited as

alleged.

MR FRYBERG:  Your Honour, with respect, a finding of primary

fact can be a finding of a fact which occurred.

WILSON J: Yes.

MR FRYBERG:  But there can be - in this case, it is our

submission - certainly no possibility of saying that

whether a particular limit became a term of the

contract when it is acknowledged that it was discussed

- it is not a question of what was said between the

parties but, rather, whether what was said occurred

in such a way as to become a term of the contract

that, by its very nature, that is a finding which is

a matter of inference and which an appeal court is in

as good a position as the trial judge to make,

provided the inference is to be drawn from undisputed

primary facts.

DAWSON J: Well, you say that Heather's evidence did not

establish that and the Court can look at the evidence

and see that for itself.

MR FRYBERG:  Yes.

DAWSON J: Yes.

MR FRYBERG:  And the Full Court did do that but then having,

as it were, found for us all the way down the line

went wrong right at the end and somehow conceived

the view that the trial judge must have been acting

under some impression of the witness or witnesses.

(Continued on page 12)

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MR FRYBERG (continuing):  The issue of credibilit½ which, ....

largely in some of the passages in the Full Court

judgment, of· course relates to Heather's credibility

and it is not a matter we need in this application

have any reference to because it does not bear

upon the issue on which we, in effect, won in the

Full Court.

Your Honours, once it is accepted that there

was an oral term to the effect contended for by

the applicant,. then the architect's claim must have

failed. The only evidence relating to compliance

with that term showed that when tenders were called

the cost was much higher than the stated amount;.

that was the only evidence that was called on the

issue. No evidence was called to suggest that

the architect's design could have been realized

for the stated amount.

It is our submission that it is in the interests

of the administration of justice in this case that

special leave should be granted. It should be

granted also because only this Court can correct

the wrong application of the law governing the role

of an appeal court such as the Full Court.

Your Honours, there is another passage, in our

submission, in WARREN V COOMBES which is apposite - - -

DAWSON J:	They did not misconceive their role, did they?
MR FRYBERG:	They wrongly applied it, Your Honour.
DAWSON J:	Yes.
MR FRYBERG:	And it is when that is done for the first time

at an appellate level then only this Court is able

to correct it. And there is a passage, with.respect,

in WARREN. V COOMBES which highlights that, in

our submission, at page 552 to 553:

The interest of the community in the speedy

termination of litigation might, no doubt,

be an argument in favour of the complete

abolition of appeals, although that would

be far too high a price to pay merely for

finality.

(Continued on page 13)

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MR FRYBERG (continuing):

However, if the law confers a right of

appeal, the appeal should be a reality,

not an illusion; if the judges of an

appellate court hold the decision

of the trial judge to be wrong, they

should correct it.

Justice to this particular applicant requires

that the Full Court do what it should have done.

Those are our submissions.

WILSON J: Yes, thank you, Mr Fryberg. The Court does

not need to trouble you, Mr McMurdo.

MR McMURDO:  As Your Honours please.

WILSON J: This case raises no question of law of general

importance and the Court is not persuaded that

the interests of the administration of justice

in the particular case warrants the grant of

special leave to appeal. Special leave is

therefore refused.

MR McMURDO:	I ask for costs.
WILSON J:	Can you oppose that, Mr Fryberg?

MR FRYBERG:  No, Your Honour. I have no submissions on

that.

WILSON J:  Special leave will be refused with costs.

AT 12.30 PM THE MATTER WAS ADJOURNED SINE DIE

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