Giumelli & Anor v Giumelli

[1999] HCATrans 440

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P55 of 1997

B e t w e e n -

ROSA GIUMELLI in her capacity as Executrix of the Estate of the late GIOVANNI GIUMELLI and ROSA GIUMELLI

Appellants

and

ROBERT JOHN GIUMELLI

Respondent

GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 3 DECEMBER 1999, AT 2.19 PM

Copyright in the High Court of Australia

MS C.J. McLURE, QC:   May it please the Court, I appear with my learned friend, MR C.W. LOCKHART, for the appellant. (instructed by Michael Rennie)

MR M.J. McCUSKER, QC:   May it please the Court, I appear with my learned friend, MR R.A.C. CULLEN, for the respondent. (instructed by Dwyer Durack)

GLEESON CJ:   Thank you.  Ms McLure and Mr McCusker, if we could have a look at you.  We understand that there will be an argument about costs, but it may be convenient if we first of all get out of the way in respect of which there is going to be no argument.  So the first thing, I think, we need to do is to make an order in relation to parties, is that correct?

MR McCUSKER:   That is so, your Honour.

MS McLURE:   Yes, your Honour.

MR McCUSKER:   I believe there is a consent order that has been filed by the appellant in that regard.

GLEESON CJ:   Well, then, I will simply note that I have a certificate from the Senior Registrar who certifies that she holds a consent signed by the solicitors for the second-named appellant and the respondent in this appeal consenting to the making of an order in the following terms:  Rosa Giumelli, in her capacity as executrix of the estate of the late Giovanni Giumelli, the first-named appellant in these proceedings, be joined to this appeal.  An order to that effect will be made.

MS McLURE:   Thank you.

MR McCUSKER:   May it please the Court.

GLEESON CJ:   Now, again leaving the matter of costs to one side for the moment, if we go to page 20 of the print of the reasons for judgment in paragraph 58, is there any argument about whether we should make orders in terms of that paragraph?

MR McCUSKER:   No, your Honour, not from the respondent.

MS McLURE:   Your Honours, if I might, we have no objection to the orders being made in the terms set out in the paragraph, save we would also move that orders 3, 6 and 7 of the orders made by the Full Court of the Supreme Court also be set aside.  That appears to be ‑ ‑ ‑

GLEESON CJ:   Is that a matter of contention?

MR McCUSKER:   It is, your Honour, in that it relates to the cost issue, I think.

GLEESON CJ:   Well then, shall we leave that matter to one side for the moment and simply right now make the orders as to which there is no dispute, leaving it open to Ms McLure to argue for those additional orders.

The orders that we will now make are that the appeal to this Court is allowed.  Orders 2, 8 and 9 of the orders of the Full Court made on 12 March 1997 are set aside, and in place thereof, orders 1 and 2 of the orders made by Justice R.D. Nicholson on 26 May 1994 are set aside.  In place thereof it is declared that:

(a)  the respondent is entitled to payment by the appellants of a sum representing the present value of the Promised Lot to be determined by a judge of the Supreme Court in accordance with the reasons of this Court, taking into account all considerations for which allowances should be made in calculating that sum, so as to do equity between the parties to the action and all relevant third parties, and upon such further evidence as that court may allow; and

(b) such sum when so ascertained and made payable by the appellants will be charged upon the whole of the Dwellingup property with interest under section 32 of the Supreme Court Act as fixed by the Supreme Court.

Now, what we propose to do is hear your respective arguments on the matters relating to costs, and then we will just go off the Bench for a little while to decide the course we will take, and then we will come back and announce our decision in relation to that further matter.  Is that convenient to both of you?

MS McLURE:   Thank you, your Honours.

MR McCUSKER:   Yes, thank you, your Honours.  I am reminded by Ms McLure that, in fact, order 3 of the orders made by the Full Court does not relate to costs, so that could be included in the orders set aside.  So it would be 2, 3, 8 and 9.

GUMMOW J:   Well, that would have the effect that this person was wrongfully in possession during a period of time, would it not, and therefore liable to an action in tort?

MR McCUSKER:   That may be arguable.

GUMMOW J:   Yes, that is why the order was not made that way.

GLEESON CJ:   On the matter of costs, it is probably convenient to hear you first, Mr McCusker, is it not, because you are the one ‑ ‑ ‑

MR McCUSKER:   I think so, your Honour.

GLEESON CJ:   - - - who has the labouring oar, as it were?  Yes, Mr McCusker.

MR McCUSKER:   Your Honours, the written submissions, I think, are already before the Court on this; I will not go through them in detail, but could I remind your Honours of these salient points:  in the trial itself before Justice Nicholson there was no contention on the part of the defendants, the present appellants, that, if there were to be any relief, it should not be by way of conveyance, but should instead be by way of some charge on the promised lot.  The issue was fought simply on the question of whether or not there had been a promise and, if so, what did the promise relate to and, as a matter of law or equity, was there any entitlement to an interest in the promised lot.  That is a brief summary of the situation.  So no evidence was adduced by the defendants as to any improvements or any interest of third parties, which would have affected the relief given.

In the result, Justice Nicholson made an order which, as your Honours are aware, was somewhat unusual in that he ordered that the plaintiff have paid to him the value of the house and the curtilage, that is the land immediately underneath the house.  From that decision, the present respondents appealed to the Full Court of the Supreme Court of Western Australia seeking a declaration that the promised lot, the entirety of the lot, was held in trust for the plaintiff, the then appellant.  The present appellants to the High Court raised a cross-appeal seeking that the order of Justice Nicholson, limited though it was, be set aside.  The contentions before the Full Court were therefore, once again, the question of whether there was any, as a matter of law, entitlement to have the promised lot vested in the plaintiff.

It was only after the reasons of the Full Court were given that a question as to the nature of the orders to be made by the Full Court was ventilated and that was not on the basis that the promised lot should not be conveyed, but rather that the promised lot should be conveyed, but subject to allowance to be made in respect of various expenditures that had been made, improvements made, since Robert Giumelli was first expelled from the partnership.  I should add, in relationship to the partnership, your Honours, because I see that that is referred to in the appellants’ outline of submissions on this point, that the partnership dispute was the subject of an action which commenced in 1986 and progressed, but on two occasions the present appellants, and the other two members of the partnership who were partners at various times, successfully sought stays of the partnership action.  There was never any attempt on their part to join the partnership action with the present proceedings and before neither the trial judge nor the Full Court was there, as I say, any contention, but the relief, if given, should be relief limited to a payment of a monetary sum.

If I could direct your Honours attention to page 93 of the application book.  On the appeal to this Court, what was sought by the appellants - this appears under the heading “Orders Sought” in the draft notice of appeal - was that the appeal be allowed with costs, the respondent’s claim be dismissed, which meant, in effect, that the appellants to this Court were seeking an order, not only that the declaration of trust of the promised lot be set aside, but also that the order made by Justice Nicholson, limited though it was, should also be set aside, the entirety of the claim be dismissed.  It was only, in my respectful submission, in the course of discussion before this Court on the appeal, that the question became, as it were, clear that this Court was of a view that the nature of the order made, as such, might not be appropriate in the circumstances and that there should be taken account by the court below matters which were never the subject of evidence in the court below and never agitated as a reason for a different kind of order being made.

So our submission, in short, your Honours, is that the appellants lost, both before the Full Court - they lost on the cross-appeal, which was dismissed, and they lost on the appeal and, on the appeal to this Court, they did not succeed, they substantially lost save that the nature of the remedy was changed to a remedy that they had never sought in the court below and in respect of which they had never adduced any evidence.

As for the question of a partnership issue being determined first, the appellants to this Court had applied twice to stay the partnership proceedings on the basis that the present proceedings on foot should be determined first.  I do not think I can add any more, unless your Honours would like to question me on that.  The outline of submissions goes into somewhat more detail.  It is our submission that the respondents have fully succeeded in the court below and effectively succeeded on the real issue before this Court raised by the notice of appeal, and that was whether there was an enforceable promise, one which would give the respondent an entitlement to either the promised lot or moneys worth.  May it please your Honour.

KIRBY J:   May I ask you, Mr McCusker, does that mean that you suggest that the proper order is simply that no order is made as to costs or do you accept that an order in some amount, or some proportion, should be paid?

MR McCUSKER:    Our submission, your Honour, is that the order made by the Full Court as to costs should stand and not be set aside, and that is that the present appellant, who was the respondent below, should pay the costs of the appeal to the Full Court, which it lost, and the appellant to this Court should pay the costs of this appeal because, in substance, when one looks at the orders sought, it failed on this appeal.  So we are seeking an order against the appellant as to the costs in this Court, that the appellant should pay the costs of the appeal to this Court, because it failed on the substantive argument, and the only success, if one can call it that, was that, instead of getting the box, as it were, we get the money.  We successfully resisted the main thrust of the appeal, which was a contention that, in equity, we should not be entitled, based on an argument related essentially to Verwayen’s Case, an argument that we should not be entitled in law to any relief at all.

GLEESON CJ:   Now, if you look at paragraph 59 of the reasons for judgment, the reasons in that paragraph deal with three subjects:  the first is the costs order made by Justice RD Nicholson, and you have got no submission to make about what was said there?

MR McCUSKER:   No, there is no contention about that, your Honour.

GLEESON CJ:   Then we had proposed that there should be no order as to the costs of this appeal and you say we should order that the costs of the appeal be paid by the appellants?

MR McCUSKER:   That is so, your Honour.

GLEESON CJ:   And then, thirdly, we deal with the matter of the costs of the proceedings before the Full Court and we say that they should be costs of the proceedings in the Supreme Court, and you say we should not disturb the order made by the Full Court?

MR McCUSKER:   Yes, your Honour; we succeeded before the Full Court and the Full Court’s essential decision has not been disturbed save that, after the decision, the question of whether some other order, not contended for before the Full Court, should be made rather than a conveyance there should be a payment of the money sum.  So we say that the order or the decision of the Full Court upholding our appeal is essentially untouched, save for a variation as to the nature of the remedy.

GLEESON CJ:   Thank you, Mr McCusker.  Yes, Ms McLure.

MS McLURE:   Your Honour, the appellant relies on the details set out in the outline of submissions.  If I might just directly address the submissions

put by my learned friend, Mr McCusker.  Dealing firstly with the High Court appeal, the essence of the submission, as I apprehend it, is that the appellants were entirely unsuccessful before the High Court.  A cursory perusal, in our submission, of the Court’s reasons would reveal the inaccuracy of the submission, as the High Court found there were two matters before the Full Court:  the detriment question, in broad terms, and the appropriate relief.  The respondent was unsuccessful in one and successful in the other.  So the outcome before the High Court, we say, was a split decision, it being appropriate in that case that the order for costs be as foreshadowed in the High Court’s reasons.

We set out in our submissions the places in the grounds of appeal and in the submissions where the appellant expressly raised the question of the appropriateness of the proprietary relief ordered by the Full Court. 

Going to the costs order in relation to the Full Court appeal, the submissions for the respondent, as I apprehended, are once again that the appellants were entirely unsuccessful.  It is clear, we say, from the High Court’s reasons, that that is not the case.  The Full Court erred in the proprietary relief that it granted.

In any event, what is also clear from the High Court’s reasons is that in order to be able to make a decision on the costs of the Full Court, it is necessary to have the comprehensive picture that is required by consideration of the partnership aspect of the relationship, as well as the other matters that affect third parties.  So, we say the costs orders foreshadowed by the High Court are appropriate for two separate reasons.  The parties were, in effect, successful on issues before the Full Court as a result of the High Court decision, and secondly, the time for the making of the costs order should appropriately await the outcome of the matter referred back to the single judge of the Supreme Court who will have to take into account matters unrelated to precisely to the value of the lot, such as the value of improvements and matters of that nature.  They are the grounds on which the appellant supports the foreshadowed costs orders referred to in the High Court’s reasons.

GLEESON CJ:   Thank you, Ms McLure.  Yes, Mr McCusker.

MR McCUSKER:   Your Honours, the problem with that argument is that neither in the court below at first instance, nor before the Court of Appeal was that argument raised nor was any evidence addressed to it.  It was only, I think, his Honour Justice Kirby at one stage remarked to Mr Casten, was any evidence led on this point, and Mr Casten had to concede that no evidence at all was led.  It was simply an issue which raised its head for the first time before this Court.  In those circumstances, in our submission, it would be unjust to the respondent not to be awarded costs simply because

there was a variation of an order which, had it been before the Full Court, could well have been made by the Full Court with evidence led, but that was not the basis on which the Full Court was urged to make any order.  They are our submissions in reply, your Honour.

KIRBY J:   Mr McCusker, if the Court takes the view that the orders which it foreshadowed in paragraph 59 are the ones which ought now to be formally made, and then perfected, why ought your clients not have to pay the costs of this additional motion – in the sense that I assume it is your insistence that has brought the matter back before the Court today and brought the appellants back – why, in those circumstances, if the Court proceeds to make the orders which it foreshadowed, ought you not to have to pay the costs today?

MR McCUSKER:   Your Honours, I cannot answer that.  I would say that if your Honours were to take that view, we would have to accept an order for costs to be made against us on this application.

GLEESON CJ:   Thank you, Mr McCusker.  We will adjourn for a short time to consider the course we will take in this matter.

AT 2.38 PM SHORT ADJOURNMENT

UPON RESUMING AT 2.42 PM:

GLEESON CJ:   In relation to the matters the subject of paragraph 59 of the reasons for judgment, we are obliged to counsel for their written and oral submissions.  We accept the submissions of Ms McLure.  In consequence we will, as foreshadowed, not disturb the order for costs made by Justice R. D. Nicholson.  In relation to the costs of the appeal to this Court, we will make no order as to the costs of the appeal.  We set aside order 5 of the orders of the Full Court and order that the costs of the appeal and cross‑appeal to the Full Court be costs of the remaining proceedings in this action in the Supreme Court.

Before we deal with the costs of today’s motion, could I ask whether either counsel wants to make any further submission about any other orders that should be made.

MS McLURE:   Your Honours, if I might.  Can I also move in relation to costs that orders 6 and 7 of the Full Court of the Supreme Court be set aside as part of the order on costs.  And further, in relation to order 3 of the Full Court of the Supreme Court, I ask that proviso (i) be set aside.  That appears to deal with an issue that has, in fact, been referred by this Court back to the single judge for determination in the mix of matters to be considered.

GLEESON CJ:   Just let me get that clear.  You want us to set aside, in addition to order 5 of the orders of the Full Court, orders 6 and 7 of the orders of the Full Court?

MS McLURE:   Yes, your Honour.

GLEESON CJ:   In relation to order 3 made by the Full Court, what do you want us to do?

MS McLURE:   Set aside so much of order 3, that is proviso (i), that the appellant accounts ‑ ‑ ‑

GLEESON CJ:   Yes.

GUMMOW J:   There is never going to be a conveyance to the promised land now, that is spent, is it not?

GLEESON CJ:   Why do we need to deal with that at all?

MS McLURE:   Yes, I think you are right.  Thank you, your Honours.

GLEESON CJ:   So, it is limited to orders 6 and 7?

MS McLURE:   Yes, thank you.

GLEESON CJ:   Now what do you say about those Mr McCusker.

MR McCUSKER:    I accept that, your Honours.

GLEESON CJ:   Very well then. 

In relation to the orders of the Full Court of the Supreme Court, I will amend what was said earlier to say we would set aside orders 5, 6 and 7 of the orders of the Full Court and order that the costs of the appeal and cross‑appeal to the Full Court be costs of the remaining proceedings in this action in the Supreme Court. 

We order that the respondent pay the appellants’ costs of the motion before this Court today.

We will adjourn.

AT 2.46 PM THE MATTER WAS CONCLUDED