Fulmer v Thompson - [2017] QSC 119

SUPREME COURT OF QUEENSLAND

CITATION:

Fulmer v Thompson & Ors [2017] QSC 119

PARTIES:

PETER JOHN FULMER

(Plaintiff)

v
GRAHAME LIONEL THOMPSON

(First Defendant)
SHANE THOMPSON
(Second Defendant)
CAYSAND NO. 24 PTY LTD ACN 010 615 586
(Third Defendant)
CAYSAND NO. 25 PTY LTD ACN 117 364 511

(Fourth Defendant)

FILE NO/S:

No 431 of 2012

DIVISION:

Trial

PROCEEDING:

Claim

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

12 June 2017

DELIVERED AT:

Cairns

HEARING DATE:

20, 21, 22, 23 and 24 February 2017

JUDGE:

Henry J

ORDERS:

1.       Judgment for the plaintiff.

2.       Counterclaim dismissed.

3.       The plaintiff will file and serve a list of the orders he seeks by 4 pm on 7 July 2017.

4.       I will hear the parties at 9.15am on 14 July 2017 as to appropriate further orders.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the parties entered into an oral agreement for business purposes – where the parties entered into a subsequent Heads of Agreement – where parties’ agreement required a ‘target sum’ to be met by the plaintiff – whether or not ‘target sum’ had been met

INTERPRETATION – ADMISSIBILITY OF EXTRINSIC EVIDENCE IN RELATION TO INSTRUMENTS – MATTERS PARTICULARLY RELATING TO CONTRACT – IN GENERAL – RELEVANT PRINCIPLES – where the parties entered into an oral agreement for business purposes – where the parties entered into a subsequent Heads of Agreement – whether or not the Heads of Agreement constitutes the entirety of the agreement

Lewison, L and Hughes, D The Interpretation of Contracts in Australia 1^st ed Thomson Reuters, Sydney 2012

Helicopter Sales Pty Ltd v Rotorwork Pty Ltd (1974) 132 CLR 1, distinguished
Johnson v American Home Assurance Company (1998) 192 CLR 266, applied
Phosphate Co-operative Co v Shears (No 3) [1989] VR 665, cited

COUNSEL:

M T Hickey for the plaintiff

M A Jonsson QC for the first, second and third defendants

SOLICITORS:

B & G Law for the plaintiff

Preston Law for the first, second and third defendants

Introduction

The plaintiff seeks orders including specific performance and damages for breach of a contract by which he acquired an interest in a vehicle sales business.
The plaintiff’s interest in the business was to crystallise once a profit target was reached. The owners of the business admitted on 20 January 2010 that the target sum had been met. They thereafter failed to honour their end of the bargain.
Before me they argued the target sum had not been met, notwithstanding their 2010 admission to the contrary. It was an unconvincing attempt to avoid liability.
The players
The plaintiff, Mr Fulmer, an experienced car salesman, commenced work on contract to a used vehicle sales business trading as Australian Motors in about 2003.[1] Drawing on his extensive contacts in the motor vehicle industry, Mr Fulmer would acquire a range of vehicles for potential acquisition and sale by Australian Motors. He would receive payment from Australian Motors for those which it chose…

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 Fulmer v Thompson

Details

AGLC: Fulmer v Thompson [2017] QSC 119
Case: [2017] QSC 119
Decision Date: 12 June 2017

CaseChat Overview and Summary

Fulmer v Thompson involved a dispute between the parties regarding an oral agreement for business purposes and a subsequent Heads of Agreement. The primary issue was whether the plaintiff had met a 'target sum' stipulated in the agreement. The court had to determine the admissibility of extrinsic evidence in relation to the instruments, particularly if the Heads of Agreement constituted the entirety of the agreement.

The court examined the admissibility of extrinsic evidence, particularly the credibility of the experts appointed by the parties. The plaintiff's expert, Bruce Coutts, had no significant issues with his credibility, but the defendants' expert, Ian Hogbin, faced credibility challenges due to his prior involvement with the defendants and his active strategising with the defendants’ solicitor. The court found that the defendants' expert's evidence was compromised by partisanship and lacked credibility.

The court concluded that the plaintiff had met the target sum and ordered judgment in his favour. The counterclaim was dismissed, and the plaintiff was directed to file and serve a list of the orders sought by a specified date. The court scheduled a hearing to discuss further orders.

Orders

Orders of the court

1. Judgment for the plaintiff.

2. Counterclaim dismissed.

3. The plaintiff will file and serve a list of the orders he seeks by 4 pm on 7 July 2017.

4. I will hear the parties at 9.15am on 14 July 2017 as to appropriate further orders.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

That is what the defendants tried to do. But there were problems with the proof and reliability of the evidence and analysis of Caysand 24’s financial records and disagreements about calculation methodologies. The former is best illustrated by reviewing what occurred in the adducing of expert evidence. I will do that first. I will then deal with the latter by discussing eight calculation methodology issues on which the experts disagreed. That exercise will demonstrate that the admission of 2010 was likely not infected with errors of interpretation or methodology of the kind later cultivated, thus confirming it is proper to regard it as an admission against interest. Expert Evidence On 3 October 2014 I ordered by consent that each party was at liberty to appoint their own expert accounting witness. The plaintiff chose to appoint Coutts Redington’s Bruce Coutts, who had been Mr Fulmer’s accountant during the era in question. The defendants chose to appoint HQB’s Ian Hogbin, who had been one of Caysand 24’s accountants during the era in question. Both men have been mentioned above in the context of their roles as witnesses to relevant events and, in Mr Hogbin’s case, active involvement in those events. There may be benefits and disadvantages in enlisting a professional person with pre-existing involvement as a witness to relevant matters in a case to testify as an expert witness in the case about more broad ranging matters. The most obvious disadvantage is the risk that a pre-existing professional allegiance to a party may compromise the degree of independence and objectivity with which the expert approaches the task, resulting in evidence so tainted by partisanship as to lack credibility and reliability. That risk did not manifest itself in respect of Mr Coutts but it did with Mr Hogbin. Mr Hogbin’s credibility for the defendants’ purpose of arguing the target sum had not been met carried the handicap that he had been an accountant on the defendants’ team when it made the considered but allegedly erroneous decision to admit the target sum had been reached on 20 January 2010. Unless he could provide a compelling explanation for how such an error occurred on his watch this was a significant encumbrance upon his credibility. It was not the only such encumbrance. It emerged at trial that Mr Hogbin had actively strategised with the defendants’ solicitor, working on how to placate and deter Mr Fulmer from pursuing a case and how to shape the financial calculations to avoid liability in meeting such a case. Reference to some emails amply illustrates his involvement in the machinations of developing a defence. On 19 January 2012 HQB’s Greg Hardy emailed Mr Hogbin after meeting with Caysand 24’s solicitor. The email, tendered without objection, asserted that the Heads of Agreement was “an unenforceable piece of shit and not worth wasting any more time on” but highlighted that the retention of Mr Fulmer’s $150,000 contribution would be unfair enrichment. Mr Hardy relayed a suggestion:“[T]hat Caysand repay the amount and squeeze some advantage out of it by repaying (say) $30K every 6 months if Peter meets his targets. Caysand puts the golden handcuffs on him for a couple of years and Peter has a secure job.A simple three page deed would kill the HOA and enshrine the above.If Shane and Grahame want to get heavy they can set off benefits (rent, cars etc) provided to Peter against the deposit (or loan?), pay him the reduced amount (if any) and piss him off.”[94]The email went on to assert it was believed “that Peter is still under bankruptcy threat and cash is king for him”. [94] Ex 12 p 2.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Fulmer v Thompson & Ors [2017] QSC 119
PARTIES:	PETER JOHN FULMER (Plaintiff) v GRAHAME LIONEL THOMPSON (First Defendant) SHANE THOMPSON (Second Defendant) CAYSAND NO. 24 PTY LTD ACN 010 615 586 (Third Defendant) CAYSAND NO. 25 PTY LTD ACN 117 364 511 (Fourth Defendant)
FILE NO/S:	No 431 of 2012
DIVISION:	Trial
PROCEEDING:	Claim
ORIGINATING COURT:	Supreme Court at Cairns
DELIVERED ON:	12 June 2017
DELIVERED AT:	Cairns
HEARING DATE:	20, 21, 22, 23 and 24 February 2017
JUDGE:	Henry J
ORDERS:	1. Judgment for the plaintiff. 2. Counterclaim dismissed. 3. The plaintiff will file and serve a list of the orders he seeks by 4 pm on 7 July 2017. 4. I will hear the parties at 9.15am on 14 July 2017 as to appropriate further orders.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the parties entered into an oral agreement for business purposes – where the parties entered into a subsequent Heads of Agreement – where parties’ agreement required a ‘target sum’ to be met by the plaintiff – whether or not ‘target sum’ had been met INTERPRETATION – ADMISSIBILITY OF EXTRINSIC EVIDENCE IN RELATION TO INSTRUMENTS – MATTERS PARTICULARLY RELATING TO CONTRACT – IN GENERAL – RELEVANT PRINCIPLES – where the parties entered into an oral agreement for business purposes – where the parties entered into a subsequent Heads of Agreement – whether or not the Heads of Agreement constitutes the entirety of the agreement Lewison, L and Hughes, D The Interpretation of Contracts in Australia 1^st ed Thomson Reuters, Sydney 2012 Helicopter Sales Pty Ltd v Rotorwork Pty Ltd (1974) 132 CLR 1, distinguished Johnson v American Home Assurance Company (1998) 192 CLR 266, applied Phosphate Co-operative Co v Shears (No 3) [1989] VR 665, cited
COUNSEL:	M T Hickey for the plaintiff M A Jonsson QC for the first, second and third defendants
SOLICITORS:	B & G Law for the plaintiff Preston Law for the first, second and third defendants