Fulton v Burnett

[1998] QCA 49

IN THE COURT OF APPEAL	[1998] QCA 049
SUPREME COURT OF QUEENSLAND
Appeal No. 5458 of 1997 Appeal No. 10690 of 1997
Brisbane
[Fulton v. Burnett]
BETWEEN:

MAXWELL ROBERT FULTON

(Plaintiff) Appellant

AND:

PAMELA MARY MILLICENT BURNETT

(Defendant)	Respondent
Fitzgerald P Davies J.A. Williams J

Judgment delivered 20 March 1998

Judgment of the Court

APPEAL NO. 5458 OF 1997 DISMISSED WITH COSTS.

APPEAL NO. 10690 OF 1997 ALLOWED; ORDER FOR COSTS MADE IN THE DISTRICT COURT SET ASIDE; ORDERED IN LIEU THAT THE APPELLANT PAY 80% OF THE RESPONDENT’S COSTS OF AND INCIDENTAL TO THE TRIAL OF THE CLAIM AND COUNTERCLAIM; AND THE RESPONDENT TO PAY THE APPELLANT’S COSTS OF AND INCIDENTAL TO THIS APPEAL.

CATCHWORDS:	CONTRACTS - financial agreement for purchase of house within de facto relationship - status of document - document not intended to record or vary terms of oral contract.
distinguished.
Sunbird Plaza Pty Ltd v. Boheto Pty Ltd [1983] 1 Qd.R. 248 claim and counterclaim - whether successful respondent should recover costs of significant issues on which she failed - appropriate percentage. District Court Rules 1968, r. 363.
Counsel:	Mr G Brandis with him Mr D Atkinson for the appellant Mr P Dutney Q.C. with him Mr M Evans for the respondent
Solicitors:	Barry & Nilsson for the appellant N.R. Barbi for the respondent
Hearing Date:	12March1998

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 5458 of 1997 Appeal No. 10690 of 1997
Brisbane
Before	Fitzgerald P Davies JA Williams J

[Fulton v. Burnett]

BETWEEN:

MAXWELL ROBERT FULTON

(Plaintiff) Appellant

AND:

PAMELA MARY MILLICENT BURNETT

(Defendant) Respondent

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 20 March 1998

The appellant has appealed against a District Court judgment delivered on 23 May 1997 and a

subsequent order for costs made on 31 October 1997. He was the plaintiff in the District Court action.

The respondent, the defendant, succeeded on her primary counterclaim. The present appeals relate

to part only of the District Court’s judgment and orders; namely, the costs order and a declaration that

the respondent holds a house property “subject to a trust for the benefit of herself and [the appellant]

so that upon the sale of that house and land she shall pay from the sale price -

(i)          $100,000 to [the appellant];

(ii)         $19,812.05 to herself

and then all remaining proceeds of the sale shall be divided equally between them”. Although the appellant’s notice of appeal does not expressly ask for that declaration to be set aside, that is implicit

in the orders which he seeks; which are, so far as presently material, the following:

“... That the Respondent pay the Appellant a sum of $95,000 together with interest
pursuant to the agreement dated 14 March 1988.
... That the Respondent pay the Appellant a further sum of $5,000 with interest
pursuant to the Supreme Court Act.
... Alternatively ... that the Respondent pay the Appellant the sum of $100,000 together

with interest pursuant to the Supreme Court Act.”

The foundation of the appellant’s argument is what is referred to in the orders which he seeks in his

Notice of Appeal as “... the agreement dated 14 March 1988". The trial judge found that the

respondent signed a two page document dated that day which was in the following terms:

“PARTICULARS OF LOAN TO P.M.M. BURNETT

NAME AND ADDRESS OF MONEYLENDER:

Maxwell Robert FULTON
Officers’ Mess,
RAAF Base,

AMBERLEY....QLD....4305.

NAME AND ADDRESS OF BORROWER:

Pamela Mary Millicent BURNETT
33 Headfort Street,

GREENSLOPES....QLD....4120.

AMOUNT OF LOAN:

Ninety-five thousand dollars ($95,000.00)

TERM OF LOAN:

4 years 6 months - maturing 15th September, 1992

REPAYMENTS:

$1,192.65 monthly in advance

First monthly interest payment effective 1st April, 1988

SECURITY:

Certificate of Title Deed for the house and property at 31 Tallaroon Street, Jindalee, Lot 297 on RP 106947 County of Stanley Parish of Oxley Volume 3819 Folio 44 Area of 41.7 p.

I agree with the above Terms and Conditions of the Loan.

DATED this fourteenth DAY OF March 1988.

(signed) (signed)

_______________________	______________________
Witness	P.M.M. Burnett

I, Pamela Mary Millicent BURNETT, of 33 Headfort Street, GREENSLOPES in the State of Queensland, hereby acknowledge have received a bank cheque from Maxwell Robert FULTON in the sum of Ninety-five thousand dollars ($95,000) made payable to P.M.M. BURNETT, representing Loan on this Agreement.

- 2 -

DATED THIS fourteenth DAY OF March 1988.

(signed) (signed)

_______________________	______________________
Witness	P.M.M. BURNETT ”

The appellant relied upon a statement by McPherson J., with whom Campbell C.J. agreed, in Sunbird

Plaza Pty Ltd v. Boheto Pty Ltd[1] to the effect that a person is bound by a written contract which he or

[1] [1983] 1 Qd.R. 248 at pp. 261-262.

she has signed “because, by signing it, he manifests his assent to the terms it contains ... , whether or not

he has read or knows of those terms, and subject only to certain exceptional circumstances recognised

by law such, for example, as give rise to a defence of non est factum or operative mistake in the law of

contract”.
However, the respondent’s case, which was accepted by the trial judge, was that she did not sign the

document dated 14 March 1988 as a contract. His Honour, who rejected the appellant’s evidence and

accepted much, but not all, of the respondent’s evidence, found that, prior to 14 March 1988, the

parties had agreed “to live together in a de facto marital relationship”, that a home would be purchased

in the respondent’s name, that she would contribute to its purchase price and associated expenses but

that the balance of the purchase price would be paid by the appellant from moneys which he would

borrow and that, in the event that their relationship ended, the property would be sold, their respective

contributions repaid and any profit divided between them equally. His Honour also found that the house

property the subject of the declaration was purchased by the respondent to give effect to this agreement

by a contract dated 18 February 1988 under which the purchase price was $118,000, and that the

appellant paid a deposit of $5,000. The appellant borrowed an amount in excess of $95,000 and lent

that sum to the respondent by a cheque which she deposited on 11 March 1988. Subsequently, she

completed the purchase of the house property, providing $18,000 of her own money and using a further

$1,812.05 to pay legal fees and stamp duty.

It is of critical importance that the trial judge accepted the respondent’s evidence that she signed the

document dated 14 March 1988 following a statement by the appellant, which neither party alleged was

false, that the purpose of the document was merely an acknowledgement that she had received $95,000

in order to protect his children: “... if anything happens to us it’s really the kids’ money.” The document

was not intended to record the terms of the parties’ oral contract or to vary those terms in any way.

It was not intended to have contractual effect by the respondent, or by the appellant if his statement to the respondent concerning the purpose of the document was truthful. This was not a novelty in the

parties’ relationship; there was at least one earlier document which they signed which was not intended

to have legal effect according to its terms.

That was the effect, although not the precise terms, of the trial judge’s findings. In the circumstances,

the appellant has not demonstrated that his Honour’s dismissal of the appellant’s claim based on the

document was erroneous. Nor has any error been shown in the declaration made, which was in

conformity with the factual findings.

The appellant’s other appeal was against an order that he pay 95% of the respondent’s taxed costs of

and incidental to both the appellant’s claim and the respondent’s counter claim. The trial lasted five

weeks, and was conducted on the basis of pleadings which had been amended on a number of

occasions. Numerous claims, some alternative to others, were made by each of the parties. While the

appellant failed on all of his claims, he successfully defended some of the respondent’s claims and

defeated some of her defences to some of his claims. In particular the appellant successfully answered

the respondent’s allegation that the “loan agreement” had been fraudulently altered, her allegation that

there was no consideration for the loan agreement, and her contention that if a constructive trust existed

her own interest had been increased proportionately because she had participated in obtaining the loan

monies for the house; and he also successfully defended six specific claims made by the respondent in

her counter claim. The total amount in issue in the counter claim on which the appellant was successful

exceeded $200,000.
Counsel for the appellant asked the District Court judge to order that the respondent pay the costs of

proving the authenticity of the “loan agreement”; experts were called. The appellant succeeded on that

issue but it was not decisive. The District Court judge concluded that the circumstances were not

sufficiently unusual to justify him making such a special order. Further, counsel for the appellant asked

the District Court judge for an order that the respondent pay the appellant’s costs of proving facts

detailed in a notice to admit facts delivered 11 days prior to trial. Because that notice was delivered

after the signing of the certificate of readiness, the cost consequences referred to in the rules did not

apply; the question remained to be answered in the exercise of discretion. The District Court judge

declined to exercise his discretion in favour of the appellant as a mark of the court’s disapproval of the

breach of the rule. But it appears obvious that the appellant incurred costs in proving some of the

matters referred to in that notice; it is not possible for this court to be more definite in its conclusion

because the whole of the record was not reproduced.

The District Court judge noted r.363 of the District Courts Rules and specifically rejected the

appellant’s submission that he had “succeeded in the substantial part of his claim”. On the contrary, his

Honour stated that he had accepted the respondent’s primary case and that a “review of the issues

raised by the parties will reveal [the appellant’s] lack of any success in this action”. He noted that the

respondent had failed in some of her claims but found that substantial issues on which she succeeded

were fundamental to the major disputes between the parties and said that “[v]ery little time was spent

in court hearing the evidence directed to the claims upon which [the respondent] did not succeed”. The

judgment then concluded:

“... There may, of course, have been some costs incurred by [the appellant] for the purpose of resisting those claims especially that relating to question of workmanship and of Council or Building Code requirements. I am aware of the view that the complicated taxations which would be necessary to give effect to an order which recognises that [the respondent] succeeded on issues raised both by [the appellant] and by herself while failing on other issues raised by her should be avoided (see Colburt v. Beard [1992] 2 Qd.R. 67 at p.75). I exercise the discretion conferred by Rule 363 and shall give the ‘direction’ referred to therein rather than leave costs to follow the result of each of the causes of action raised by the claim and counterclaim. I order that the [respondent’s] costs of and incidental to both the [appellant’s] claim and to the [respondent’s] counterclaim be taxed and that 95% thereof be paid by the [appellant] to the [respondent]. That order is intended to reflect the view that, on balance, it was [the respondent] who had the greater measure of success. Viewed objectively, [the appellant] can be described as having only a pryhhic [sic] victory on issues raised by [the respondent]. I referred during the submissions on costs to two English decisions upon a rule similar to Rule 363: Anglo-Cyprian Trade Agencies Ltd v. Paphos Wine Industries Ltd (1995) 1 All E.R. 873 and Alltrans Express Ltd v. CVA Holdings Ltd (1984) 1 All E.R. 685. Although neither case involved a counterclaim, each is instructive as to the broad view which can be taken to the question of ‘success’ in an action and as to the need to approach the result in a practical way.”

In summary, it was the District Court judge’s opinion that the respondent was almost entirely successful

in the action, or at least in respect of those parts of the action which occupied almost all of the trial.

Conversely, it was his opinion that the appellant was almost entirely unsuccessful. As already noted

this Court does not have a full record of the trial, but there is sufficient before us to demonstrate that the

District Court judge erred in the exercise of his discretion in reducing the respondent’s recoverable costs

by only 5%. The effect of his order is that the respondent will be recovering costs of significant issues

on which she failed and on some matters which could have been the subject of admission at the outset

of the trial.

When one has regard to the substance of the passage quoted above from the reasons of the District

Court judge and the observations made herein on the costs question, it becomes obvious that the

respondent should recover no more than 80% of her costs of and incidental to the trial of the claim and

counterclaim.
Appeal No. 5458 of 1997 should be dismissed with costs. Appeal No. 10690 of 1997 should be

allowed and the order for costs made in the District Court be set aside and in lieu thereof it be ordered

that the appellant pay the respondent 80% of the costs of the trial of the claim and counterclaim. The

respondent should pay the appellant’s costs of that appeal.