Hardie and Anor v Milling

[2014] HCATrans 260

[2014] HCATrans 260

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S131 of 2014

B e t w e e n -

DAVID HARDIE

First Applicant

TRACEY HARDIE

Second Applicant

and

KENNETH JOHN MILLING

Respondent

Application for special leave to appeal

CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 NOVEMBER 2014, AT 10.01 AM

Copyright in the High Court of Australia

MR B.W. RAYMENT, QC:   May it please your Honours, I appear with my learned friend, MR M.A. BRADFORD, for the applicant.  (instructed by Booth Brown Legal)

MR G.M. MCGRATH:   May it please the Court, I appear for the respondents to the application.  (instructed by Hannaford Cox Connellan & McFarland Solicitors)

CRENNAN J:   Yes, Mr Rayment.

MR RAYMENT:   Your Honours will have noticed that there was a radical difference of view between the Court of Appeal and the trial judge about the evidence which was led before the trial judge and its effect.  The trial judge said that, having heard the witnesses over some three days, both parties – both father and daughter – understood the father to have encouraged the daughter and her husband to believe that in due course she would inherit the “Weeraman” house block. 

CRENNAN J:   It was not a case, was it, where any finding of the primary judge turned on the acceptance of evidence from a particular witness or on questions of demeanour or anything of that kind?  The evidence of Mr Milling’s conduct was not in dispute.

MR RAYMENT:   Well, it was in dispute in some detail, your Honour.  He was asserting that he had made it clear to my clients that yes, they had a future there but it was only so far as living there was concerned and the trial judge rejected that in his findings about detriment.  His Honour found that if that had been made clear to my clients they would have left the land and ceased to improve it and made their home elsewhere.

KIEFEL J:   Then you get into the area of detriment which the Court of Appeal had something to say about.  Mr Rayment, could you point me to the primary judge’s finding about the evidence of the father to the effect that he would leave the interest in the property in Lots 110 and 118 by will?

MR RAYMENT:   The evidence that he intended to do that by will?

KIEFEL J:   Yes.

MR RAYMENT:   Well, he made a will to that effect and the judge referred to it.  Then he disinherited.

KIEFEL J:   But that is different from making representations.

MR RAYMENT:   I see.

KIEFEL J:   That is his own act.

MR RAYMENT:   Yes.

KIEFEL J:   It is just that the primary judge’s judgment appears to be rather more negative than positive.  His Honour seems more concerned to deal with the issue about whether or not there was a representation that he would transfer the property inter vivos but says little about what was said by the father.

MR RAYMENT:   He did say little.

KIEFEL J:   Yes.

MR RAYMENT:   It was common ground that the future was mentioned, that is to say both the applicant and her husband gave evidence and it is actually cited – or parts of it are cited in Justice Macfarlan’s judgment particularly, your Honours, at – if your Honours would go to page 41 of the application book.  Mr Hardie’s evidence in the second part of paragraph 15 of Justice Macfarlan’s judgment is there cited:

we have been repeatedly assured by him that both Tracey and myself have a future at the property and, as a result of these conversations, Tracey and I have expected at all times that the property would by now have been transferred to us by Mr Milling –

That is what he says.  Similarly – and I have just picked one aspect of that, it is referred to elsewhere in his judgment – Mrs Hardie is cited to the same effect at page 43, just above line 40.

CRENNAN J:   May I just ask you?  Does the primary judge say anything about Mr Milling’s proven conduct which justified the expectation on their behalf that they would inherit some part of “Weeraman” as distinct from what they have said?  I hope I am making myself plain about the distinction.

MR RAYMENT:   Well, I was just about to add that Mr Milling himself agreed that he had referred to the future – their having a future at “Weeraman”.  It is at the foot of page 43 and your Honours see that his assertion is that he did say that.

KIEFEL J:   But the point that Justice Macfarlan makes ‑ ‑ ‑

MR RAYMENT:   Made a qualification to it.

KIEFEL J:   ‑ ‑ ‑ is that when he has spoken that way he was speaking of occupation, not inheritance.

CRENNAN J:   Yes.

MR RAYMENT:   Your Honours, what his Honour found, having seen the witnesses – if I can go back to his judgment, paragraph 62 – was that his appreciation of the matter – the judge’s appreciation was that Milling himself knew that he had been taken to have given an assurance about inheritance and that is paragraph 62 of the judgment.  It is a very strong finding, in our submission, to have made having seen the witnesses.

CRENNAN J:   Is not 62 about the belief that they have a right to use the homestead?

MR RAYMENT:   No, no.  It goes as far as title – paragraph 62.  The beginning does but, your Honour, it ends up with a reference to title.  Similarly, the trial judge was really emphatic about this.  He says in paragraph 67 that, in effect, he had spent 20 years encouraging these parties to do as they did in the belief that they would – the wife would in due course inherit.  Paragraph 73 makes the same point.

The defendant cannot, in good conscience, deny them the security of tenure and title he has, to their detriment, encouraged them, over many years, to expect.

His Honour made findings in 54 which were referred to in the Court of Appeal ‑ ‑ ‑

KIEFEL J:   Paragraph 73 reads more akin to a moral entitlement rather than the content of a representation which could found an estoppel.

MR RAYMENT:   Well, except the last few words stress again that he has encouraged them to expect it.  That is, we submit, a primary finding of fact that was open to this trial judge.

KIEFEL J:   To expect what?

MR RAYMENT:   To expect inheritance.

KIEFEL J:   That is the key, is it not – occupation or inheritance?

MR RAYMENT:   Well, yes, but ‑ ‑ ‑

CRENNAN J:   You are taking inheritance all the time from those instances where his Honour refers to title.

MR RAYMENT:   Yes, your Honour.

CRENNAN J:   Yes.

MR RAYMENT:   Your Honours, a similar sort of question arose in the House of Lords, of course, in Thorner v Major.  There they had a trial judge who had made a finding in an “estoppel by encouragement” case about precisely how whatever was said between parties who did not express themselves with great clarity was understood by the recipients of the statement.  Your Honours, I think, have been supplied with a copy of that.  If I could just go to page – I am referring to Thorner v Major [2009] 1 WLR 776 at 778 to 779 in Lord Hoffmann’s speech by way of example.

In paragraph 3 of that judgment at 779 his Lordship said – and the other members of the House of Lords agreed with this – or noted that a question of how these words were understood by the parties in the circumstances that the person speaking them was a man who spoke obliquely:

was a finding of fact which was not open to challenge.

It was a matter for the trial judge to sit there and, as it were, in the armchair of the parties and understand what their representations were reasonably understood to mean to each other.  We submit this kind of matter is primarily for the trial judge and, not only that, none of the traditional means by which an intermediate court will review and overrule a finding of fact is referred to in the judgment below.  That is, Abalos is not mentioned.  There is nothing incontrovertible.  There is nothing ‑ ‑ ‑

CRENNAN J:   Well, even so, if an appellate court concludes that there has been an error shown in the primary judge’s reasoning it may be part of the discharge of appellate duties to consider evidence such as Mr Milling’s proven conduct to discern whether or not it justified an expectation of inheritance as distinct from occupation.  I am referring obviously to Warren v Coombes and Fox v Percy.

MR RAYMENT:   Yes.  We really say two things about it.  Firstly, they had to entitlement to interfere.  Secondly, if they were going to interfere they just could not because they had not heard the witnesses.  They could not make de novo findings of fact as they appear to have done, in our submission.  We submit this is a matter of some real importance, not only to the parties – certainly to the parties – in appellate procedure. 

This is the kind of matter that the House of Lords has said is a matter for the trial judge, working out what “representation” would reasonably be taken to mean.  He has made the findings emphatically.  He has found that both parties knew of the effect of what was said.  Your Honours, there is a firm basis for it.  He has not expressly referred to this – his remarks about future – but his findings about detriment indicate that if there had been the kind of qualification Mr Milling asserts there was, it would have led my clients to leave the land. 

Your Honours, paragraph 54 makes special reference to the context.  The Court of Appeal seemed to put to one side – if one reads paragraph 58 of Justice Macfarlan’s judgment – the kinship.  That is an important circumstance to have been taken into account by the judge in understanding the effect of these representations. 

What you had here was a farmer with one daughter and two sons.  He had thousands of acres of property, a quite large area.  This is less than five per cent of his holdings.  The daughter and the son were spending their time there.  Their children were growing up there.  They had nothing else to leave to them in the way of real estate of significance.  They used to be very close people together, the grandfather and the children.  We submit it was well and truly open to the trial judge to conclude as he did that they were, as they said, of a firm belief by reason of encouragement from their father to believe in the prospective inheritance. 

Now, your Honours, there are three other matters put forward in the special leave application.  The first is this.  The Court of Appeal appears to have held that Willmott v Barber is part of the law of estoppel by encouragement and it is plainly not, in our submission.  The House of Lords said so in Thorner v Major and Lord Justice Oliver expressly said so in the case to which we have referred in the outline of argument at paragraph 10 at page 88 of the book.

Secondly, Justice Macfarlan, which whom the President agreed, said that there was a second reason why the detriment could not be had regard to which was the fact that it had not been quantified.  As it happens, not only are they at odds with the House of Lords in the respect that I have indicated, but they are now at odds with the Privy Council in that regard.  Lord Sumption said in Kelly v Fraser, to which we gave a reference, at paragraph 17, if I can just read it, about detriment: 

A common form of detriment, possibly the commonest of all, is that as a result of his reliance on the representation, the representee has lost an opportunity to protect his interests by taking some alternative course of action.

That is just what happened here -

It is well established that the loss of such an opportunity may be a sufficient detriment if there were alternative courses available which offered a real prospect of benefit, notwithstanding that the prospect was contingent and uncertain -

His Lordship preceded that by saying:

the detriment need not be financially quantifiable, let alone quantified, provided that it is substantial and such as to make it unjust for the representor to resile.

Your Honours, in the third place, the Court of Appeal – and we put this in the final alternative, as it were - construed what happened in this case as a promise during his lifetime to allow them to reside in the house.  Now, at the very least, Inwards v Baker shows that this would be a lifetime right of occupancy, not something limited to the autre vie of the owner of the land who is in a position to control its future.  We sought to put that forward under the second limb of the provision.  Those are our submissions, if the Court pleases.

CRENNAN J:   Thank you, Mr Rayment.  We will not trouble you, Mr McGrath.

The decision of the Court of Appeal of New South Wales in this matter is not attended by sufficient doubt to warrant a grant of special leave.  Special leave to appeal is refused with costs.

The Court will adjourn briefly to reconstitute.

AT 10.17 AM THE MATTER WAS CONCLUDED