Fister & Anor v King & Anor

[2022] HCATrans 186

[2022] HCATrans 186

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B17 of 2022

B e t w e e n -

KAREN AMANDA FISTER

First Applicant

CHRISTOPHER ROBERT HALL

Second Applicant

and

ANDREW ROBERT KING

First Respondent

JODI LEANE KING

Second Respondent

Application for special leave to appeal

KIEFEL CJ
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 21 OCTOBER 2022, AT 1.30 PM

Copyright in the High Court of Australia

____________________

KIEFEL CJ:   In accordance with the protocol for remote hearings, I will announce the appearances of the parties.

MR M.A. JONSSON, KC appears for the applicants.  (instructed by Murray & Lyons Solicitors)

MS W.A. HARRIS, KC appears with MS J.E. MOIR for the respondents.  (instructed by Preston Law)

KIEFEL CJ:   Yes, Mr Jonsson.

MR JONSSON:   Thank you, your Honours.  The first of the areas that provoke this application can be seen in the first sentence of paragraph [33] of the reasons of Justice Davis in the court below at page 67 of the application book, read with the apparently explanatory observations that immediately follow in that paragraph.  It is difficult, with respect, to reconcile the suggested mutuality with what follows in that paragraph, the arrangements described in the balance of the paragraph being essentially, I would submit, reciprocal as distinct from mutual, and I will develop that proposition.

To give it some further context, may I take your Honours, please, to the circumstances of the broader arrangement set out in the reasons of the learned judge at first instance at application book page 7, particularly paragraphs [7] through [10].  Could I just please emphasise that the applicants acquired the subject property in the applicants’ names, as recorded in paragraph [8], and with moneys borrowed by the applicants alone, as noted in paragraph [10], save to the extent of the deposit which was found to have been sourced by the first named respondent from a relative, which is referred to in paragraph [9], read with paragraphs [229] and [230] at page 38, and repayment of which the learned primary judge effectively credited to the respondents, which your Honours will see in paragraphs [123] through [128].

The manifest objectively intended benefits for the respondents in the arrangements, as found by the learned primary judge, were that the respondents would live in the property as their home, and with the associated intention that the respondents’ possession would be exclusive.  That much was emphasised by the second named respondent having  . . . . . early in the arrangement into a tenancy agreement with the applicants.  The respondents criticise my clients’ reliance upon the tenancy agreement, but there was an explicit finding that a general tenancy agreement was entered into, which is recorded at page 8 of the application book, paragraph [18]; also at page 22, in paragraph [111].

The female respondent was said to have done so for her own peace of mind, as recorded by the learned primary judge in paragraph [108], at page 21, extending over onto page 22.  The learned primary judge held that the tenancy agreement was not the sole and exclusive charter of the arrangements between the parties, at page 38 of the application book, paragraph [228], but there was no suggestion that it was.  The applicants’ case it was at all times by part of or . . . . . a broader arrangement, including, for example, the associated expectation that the respondents might ultimately acquire the house from the applicants, referred to at page 6 of the application book, paragraph [1].

The significance of the tenancy agreement is that it serves to emphasise two matters of immediate relevance – one being that the applicants had – and were intended to have – exclusive possession to subject dwelling, and two, that a material countervailing benefit for the moneys that were periodically paid by the respondents was immediate and continuing use possession of the property.

As to the conclusion of mutuality, what was in the broader arrangement for the applicants, on the learned primary judge’s findings, the arrangements were predominantly – and that was her Honour’s words – but not entirely altruistic.  One will see findings to that effect recorded at page 43 of the application book, in paragraphs [263] and [268].  The altruism referred to by her Honour in paragraph [268] had two aspects.  It involved – as recognised back in paragraph [263] – a sister helping out her brother and his family, and it also had the further aspect of involving the daughter helping out her mother by relieving her mother of the increasingly uncomfortable presence of the respondents and their family, who were at the time living in the mother’s home, as recorded in paragraph [267] of her Honour’s reasons.

On the reasoning of Justice Murray in the Western Australian matter of Lloyd v Tedesco, which is referred to in an extract that your Honours will find in paragraph 3 of my clients’ reply to the respondents’ amended response, particularly in the two sentences in the passage extracted in that paragraph, the first two sentences extracted.  Altruism of that kind is not conventionally, at least without more, sufficient to ground meaningful equity.  That is, as the – there is though, I respectfully acknowledge, as is submitted in paragraph [22] of the application for special leave, something of a competing paradigm emerging in which the suggested criterion of mutual anticipated benefit has been disclaimed by the Supreme Court of New South Wales, and that is particularly so in the observations of Justice Parker of that court, mentioned in footnote 17 in the application for special leave.  That is the matter of Woods v McKinlay (No 2) at paragraph [248] read in particular with paragraph [243].

I should acknowledge to your Honours that the learned primary judge’s findings attributed other incidental benefits for the applicants in the arrangements entered into.  If you turn, please, to page 43 of the application book, in paragraph [264] the arrangement gave the female applicant the opportunity to repay her brother for the help he had given in the way of renovation works he had been undertaking on her . . . . . and in the immediately following paragraph, the dealings permitted a set‑off arrangement to facilitate payment for works of that kind.  But these were in the nature of incidental personal conveniences involving what were, I would respectfully submit, essentially countervailing benefits which had a reciprocal character facilitating remuneration for work done, as one might expect in any number of simple factual arrangements as between party and counter‑party, and as quite distinct from being mutual benefits in the sense described in Lloyd v Tedesco.

STEWARD J:   Mr Jonsson, I am sorry to interrupt.  This is all looking a little factual from my perspective.  Can you perhaps just express the point of principle that you wish to pursue if leave were granted?

MR JONSSON:   Yes, your Honour.

STEWARD J:   Aside from the fact that you obviously disagree with the conclusion about mutuality, which I understand.

MR JONSSON:   Yes, the point is essentially whether as a threshold requirement for the equity arising there must be a purpose underlying the creation of the arrangements in the first instance of reducing, or generating, or enjoying some future joint benefit, or mutual benefit, or shared benefit as distinct from and in contrast to benefits of the kind that I have just taken the Court through, which are essentially distinct and reciprocal or countervailing.

So the point goes to the threshold requirement that distinguishes the equity from any multitude of other simple contractual arrangements of the kind that one might otherwise encounter, and it is a distinction that has been acknowledged with respect to joint ventures having a more commercial flavour by Justices Mason, Brennan and Deane, as their Honours then were, in their joint reasons in United Dominions Corporation v Brian, which is cited in footnote 15 in my clients’ application, that case being relevant, in my respectful submission, because the equity that we are concerned with here – the windfall equity – arises essentially out of the commercial context and in the context of partnerships and joint ventures having a more commercial flavour.  So, in my respectful submission, it does involve an important point of principle going to that threshold, or initial pathway to a finding as to the equity.

STEWARD J:   Do you accept – I am so sorry, Chief Justice, you go first.

KIEFEL CJ:   No, no, you follow on, Justice Steward.

STEWARD J:   I was just going to ask whether you will also be attacking the 80/20 split.  Do you accept that?

MR JONSSON:   That is the second point, and it is not so much the 80/20 split as such, it is the impressionistic apportionment, particularly having regards to the evidentiary shortcomings that are identified in paragraph 38 of the application, but I was proposing to address that second point shortly, if that would be convenient to the Court.

KIEFEL CJ:   Can I just return to the joint venture question.  As you say, in earlier decisions it was regarded as having more of a commercial flavour.  I think it is referred to in this context more as “joint endeavour”, is it not?

MR JONSSON:   Yes, your Honour.

KIEFEL CJ:   Yes.  To be a joint endeavour constructive trust, there just has to be some mutual or common benefit of the same kind, is that right?

MR JONSSON:   That is certainly the intention I am urging as the special leave point.

KIEFEL CJ:   That is pretty well established as a matter of principle, is it not?

MR JONSSON:   I would certainly submit that that is the conventional view.  But that is a view from which, for example, Justice Parker has differed in the matter of Woods v McKinlay, which I have referred the Court to in paragraph 17 of the application ‑ ‑ ‑

KIEFEL CJ:   That being the case, does this appeal not – on grounds 1 and 2 in particular – simply question how the principle was applied by the Court of Appeal; that is, how the principle was applied to the facts of this case?

MR JONSSON:   It does at the threshold, if one reads the first sentence of paragraph [33] of Justice Davis’ reasons in isolation, it is really the balance of the paragraph that call into question – or enliven the error, as I have put it to your Honours – those arrangements, as I think I have described them as being essentially reciprocal in character.

In summary – in a nutshell, your Honours, with respect to that first point, contrary to our learned friends’ submissions, the proposed special leave point is a live one on the authorities, including those canvassed in the applicant’s reply to the amended response, and on the foundational findings that I have taken your Honours through in the reasons of the learned District Court judge, the proposed appeal would provide a suitable vehicle for the agitation of the point.

If I am wrong about that, then the position of the joint endeavour constructive trust was – in truth and in law – justified, but the other error that I would respectfully submit justifies a grant of special leave involves the point raised by your Honour Justice Steward; that is – as I have described it – the impressionistic apportionment of contribution appearing in paragraph [44] of Justice Davis’ reasons, which was apparently premised upon items 1 through 4, back in paragraph [41].  And apportionment which would only be achieved as a matter of broad impression, given the evidentiary deficiencies I have sought to identify in paragraph 38 of the applicant’s application, and the complaint in a nutshell goes to that broad impressionistic apportionment absent the categories of evidence mentioned in paragraph 38.

KIEFEL CJ:   Mr Jonsson, in relation to grounds 3 and 4, what is the point of principle here?

MR JONSSON:   It is, as I have described it, the impressionistic apportionment of contributions in a manner akin to an impressionistic apportionment of damages in a different context.  Given the evidentiary deficiencies that I have mentioned, in particular, if I might take your Honours through those very briefly – or two of them – the evidence of the kind described in paragraph 38(a) of the application – that is, evidence going to the extent to which the respondents asserted improvements to the property – served actually to enhance the realised value of the property.

In my respectful submission, it was not open to the learned primary judge or the Court of Appeal below to identify to what extent the renovation works were truly and objectively in the nature of a capital contribution, analogously with capital contribution under a more commercial partnership‑type scenario – discussed by Justice Deane in Muschinski at page 619 – and as distinct from work and expenditure that might have gone towards mere enhancement of the respondents’ immediate ongoing use and enjoyment of the property.

Without evidence of the kind described in paragraph 38(b) of the application – that is evidence of the extent, if at all, to which the payments periodically made by the respondents actually exceeded a fair market rental to the property, it was not open to the courts below objectively to apportion any part of the payments made on that account as in the nature of pre‑payments towards some future anticipated benefit comparable to a premium of the kind identified by Justice Deance in Muschinski paid in circumstances where that future enjoyment has been prevented.  That is the point or points of principle that are associated with what I have described as that impressionistic apportionment.

The associated issue, your Honours, goes to the unquantifiable character of those elements, if you like, of the contribution.  If the unquantifiable contribution on account of renovation and other works is considered to justify some notional apportionment, it should have vested for the respondents, have been to the extent of 50 per cent, consistently with equitable principle.

The principle point that the applicant would ultimately seek to propound, relying upon the mutuality point and drawing also from Justice Gordon’s and Justice Edelman’s recent joint reasons in Bosanac at paragraph 115 is that, as in many modern relationships of close trust, which one person has contributed towards a property registered in the name of another, there may be occasions where it is simply not appropriate to engraft an equitable interest onto the lead interests, and that this ultimately might be just such a case.

Those are the applicant’s submissions, if your Honours please.

KIEFEL CJ:   Thank you, Mr Jonsson.  The Court will adjourn briefly to consider the course that it will take.

AT 1.48 PM SHORT ADJOURNMENT

UPON RESUMING AT 1.50 PM:

KIEFEL CJ:   Ms Harris, we need not trouble you.

We are of the view that this application for special leave to appeal raises no question of principle.  It involves the application of settled principles to the facts.  Special leave is refused with costs.

The Court will now adjourn until 2.30 pm.

AT 1.50 PM THE MATTER WAS CONCLUDED