Hawker v Barretts Bowyangs Pty Ltd

[2001] NSWSC 913

CITATION:	HAWKER & ANOR v. BARRETTS BOWYANGS PTY LTD & ANOR [2001] NSWSC 913
CURRENT JURISDICTION:	EQUITY
FILE NUMBER(S):	SC 4769/2000
HEARING DATE(S):	11 & 12/10/2001
JUDGMENT DATE:	17 October 2001
PARTIES :	Bruce Gordon Hawker and Dianne Lorraine Hawker - Plaintiffs Barretts Bowyangs Pty Limited and Geoffrey Arnould Barrett - Defendants Barretts Bowyangs Pty Limited and Geoffrey Arnould Barrett - Cross-claimants Bruce Gordon Hawker and Dianne Lorraine Hawker - Cross-defendants
JUDGMENT OF:	Bryson J at 1

COUNSEL :	C.R. Newlinds - Plaintiffs D.A. Smallbone - Defendants
SOLICITORS:	Gray & Perkins with Laurence & Laurence Solicitors - Plaintiffs Whiteley, Ironside & Shillington Solicitors - Defendants
CATCHWORDS:	PARTNERSHIP - joint venture - real estate development - dispute over quantum of item to be allowed one Joint Venturer for providing services of Project Manager - it was alleged that there was an oral agreement varying provision of written agreement which fixed maximum of $50,000 - claim for $98,000 was rejected on finding that there was no oral variation agreement.
CASES CITED:	BP Refinery (Westernport) Pty Ltd v. Hastings Shire Council (1977) 180 CLR 266 Muschinski v. Dodds (1985) 160 CLR 583 Baumgartner v. Baumgartner (1987) 164 CLR 137
DECISION:	Allowance of $50,000. For Orders see para [36]

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

4769 OF 2000

BRYSON J.

WEDNESDAY 17 OCTOBER 2001

BRUCE GORDON HAWKER & DIANNE LORRAINE HAWKER v. BARRETTS BOWYANGS PTY LTD & GEOFFREY ARNOULD BARRETT

Judgment

: I now state reasons for the orders which I made on 12 October 2001. The principal issue related to the quantum of an entitlement of the first defendant Barretts Bowyangs Pty Ltd to payment out of the proceeds of sale of a property owned by a Joint Venture, payable before ascertainment of the net fund which is equally divisible between the Joint Venturers. The plaintiffs claimed that the amount allowable to the first defendant was $50,000 and the defendants claimed that it was $98,000. The effect was that the defendants would be $24,000 better off if $98,000 is payable to the first defendant before ascertainment of the balance to be divided up equally. This conflict has impeded distribution of $311,220.85 and accruing interest which has been held undistributed in bank accounts. That is to say, almost 13 times as much money as was in dispute has been neutralised since the Joint Venture property was sold and the proceeds realised. There has been no good reason for this. If the Court had been informed of the circumstances soon after the litigation was commenced it would not have been difficult to make some fairer interlocutory arrangement.

2 The circumstances in which dispute over this item existed were alleged in paras 1 to 11 of the Statement of Claim and were admitted. The plaintiffs Mr and Mrs Hawker form one of the two parties to the Joint Venture; the first defendant Barretts Bowyangs Pty Ltd of which Mr G.A. Barrett is the principal is the other party, and Mr Barrett is the second defendant. Mr Hawker is and has long been a licensed builder and Mr Barrett is a licensed builder and has experience in development business; both have various business interests. The Joint Venture was formed by an agreement in writing dated 31 October 1997 prepared by Mr Booler, a solicitor who acted for all parties, and related to purchase of a property at 11-13 Wells Street, Annandale, with the intention of developing the property into residential units and the formation of “… a joint venture for the development and sale of residential units …”. By cl.2.2 the Joint Venture was to continue until the completion of the works and sale of the residential units and distribution of net profits or adjustment of loss. The Hawkers were to contribute $140,000 towards purchase of the property at $1,120,000 and they were to provide security for funds to be borrowed; Barretts Bowyangs was to provide security properties, and both were to raise finance secured on the property to enable completion of the works. See cl.3.1, 3.2.

3 By the Agreement the Joint Venturers appointed Mr Barrett himself as Project Manager with wide authority including organising plans and applications, obtaining permits, appointing architects and other professionals, keeping books and records, registering the strata plan, setting up the Owners’ Corporation, marketing and sale of residential units and arranging finance to carry out the works. Mr Barrett did not during the Joint Venture or in his evidence distinguish between his own interests and the interests of Barrett’s Bowyangs: he spoke of them as if they were the same, and that is how they were treated by both sides and it is the substance of the matter. Mr Hawker was to be the licensed builder for the work.

4 Clause 6 was entitled Distribution and cl.6.1 was as follows:

6.1 Upon completion of the sale of each residential unit and after payment of agent’s commission and legal costs and disbursements relevant to the sale, the proceeds shall be used as follows:
(a) In reduction of the mortgage on the property obtained for the development;
(b) Payment of any other moneys owing on development costs;
(c) In reduction of the $140,000.00 advanced by the second party;
(d) Balance to be shared equally between the first and second party.

Clause 6.1 does not literally apply to distribution in the events which have happened, in which after development consent was obtained the property was not developed into residential units but was sold as it was. There is no provision which literally provides for entitlements on distribution of proceeds arising otherwise than on completion of sales of each residential unit.

5 Clause 7 was entitled Miscellaneous and provided among other things:

7.3 The first and second parties shall each draw the sum of $1,000.00 per week in consideration of their obligations herein, commencing from the start of construction of the works.
7.4 The first party shall be entitled to an amount of $1,000.00 per week commencing from 10th October 1997 until date of approval of the Development Application. The total to be received shall not exceed $50,000.00 and shall be paid as to $25,000.00 out of any surplus funds following purchase of the property (if any surplus) and the balance out of the proceeds of the construction loan and shall not form part of the first party’s drawings but shall be a cost of the Joint Venture.

6 Under cl.7.3 each side was entitled to draw $1000 per week commencing from the start of construction of the works, but construction did not ever start and neither joint venturer was entitled to draw or did draw any such sum. Under cl.7.4 Barretts Bowyangs accrued an entitlement to $50,000, because 84 weeks passed from the date of the Joint Venture Agreement until the grant of development consent by the Land and Environment Court on 19 May 1999. As there were no surplus funds following purchase of the property there was no fund out of which the first $25,000 was to be paid, and as no construction loan was ever drawn there was no fund out of which the second $25,000 ever could be paid.

7 Apart from the significant contribution of making properties available to secure bank loans, the contributions made by the parties were these. Mr and Mrs Hawker contributed the funds initially required towards the deposit and stamp duty; only $133,649 was required and contributed. Barretts Bowyangs and Mr Barrett contributed Mr Barrett’s endeavours and activities as Project Manager. Some other funds were raised by contributions from the parties from time to time on the basis of equality; the evidence does not establish in detail what was done to raise such funds, which included borrowed funds, and it was not significant for me to establish what in detail happened as these dealings have not given rise to any dispute. In some way with the details of which I am not concerned they led to the availability of $2,720.85 in a bank account at the National Australia Bank at Orange shown by Balance Summary Exhibit 3, in the names of Barretts Bowyangs and Hawker Developments Pty Ltd which Mr and Mrs Hawker controlled; that can be dealt with, and was dealt with in the order which I made, by equal distribution to the Joint Venturers, as there is ample money in the other fund to make any just adjustment. In some ways these transactions also led to an entitlement of the Hawkers to a credit of $200 for over-payment of interest on a loan; this was conceded. Otherwise the assets of the Joint Venture at the time of the hearing were $308,500 which Mr Booler invested in an Interest Bearing Deposit in the St George Bank after acting for all concerned and settling the sale of the property, and the interest which accrued on that deposit.

8 Mr Hawker contributed work and labour over a period which is not exactly established but was six weeks at the least or three months at the most, up to some date in September 1999. This work was described as stripping out and preparation for installing steel beams; it was not construction work. There was a need to avoid embarking on construction work as no building approval had been obtained and there was a risk of penalties. Under the terms of the Joint Venture Agreement there was no contingency in which Mr Hawker could be entitled to any payment for work before construction. Mr Barrett also participated in this work to a considerably less degree than Mr Hawker; Mr Barrett had other things to do for the Joint Venture.

9 The sale of the property prevented the literal fulfilment of the Joint Venture as described in the Agreement. I regard it as clear however that the exercise of selling the property and the process of ascertaining rights and distributing the proceeds were within the ambit of the Joint Venture and that the rights and obligations of the parties are established by the terms of their Agreement, so far as they are applicable. It should be understood that the parties impliedly agreed that if, in the obvious possibility that the Joint Venture was not carried to completion because the property was sold or resumed, the proceeds would be distributed and the rights of the parties would be regulated according to terms of their Joint Venture Agreement, and that if those terms could not literally be applied they would be applied with modifications necessary to achieve, as far as possible, the purposes of the Joint Venture. In my view an implication to this effect fulfils the requirements for implied terms as stated in BP Refinery (Westernport) Pty Ltd v. Hastings Shire Council (1977) 180 CLR 266 and frequently applied since then. The implication meets all five tests stated in the opinion of the Privy Council at 283; (1) it is reasonable and equitable; (2) the contingency that the property may be sold was obvious and the contract was not effective unless that contingency was dealt with in this way; (3) the implication is so obvious that it goes without saying; (4) the implication can be clearly and simply expressed and (5) it does not contradict any express provision. With an allusion to their Lordships’ observations at 286, if an officious by-stander had asked, when the parties made the agreement “If you decide to sell the property before completing the project, will you follow cl.6.1 as far as it can be applied in distributing the proceeds” it cannot be doubted that the answer would have been “Of course”.

10 If an implied contractual term was not the correct basis in principle for resolving the parties’ rights, the applicable principle would, in my opinion, be the principle stated by Deane J in Muschinski v. Dodds (1985) 160 CLR 583 at 620 and approved by Mason CJ, Wilson and Deane JJ in Baumgartner v. Baumgartner (1987) 164 CLR 137 at 147-148; where a joint endeavour fails after contributions have been made in circumstances in which it was not intended that the other party should enjoy them, there is to be an equitable adjustment. In determining what adjustment is equitable the burdens and benefits on which the parties agreed in their contract have an overwhelming claim to be applied so far as they can be.

11 The manner in which the proceedings were pleaded and conducted made it unimportant to establish the basis in legal principle on which the decision was founded. In their Statement of Claim para. 13(b) the plaintiffs set out how they asserted that the net proceeds of sale should be divided; in their Amended Defence and Cross-claim the defendants set up much the same scheme of division, differing only in respect of whether $50,000 or $98,000 should be allowed to the first defendant, and the case raised both by para. 4 of the Amended Defence and by the evidence which was (most belatedly) filed on behalf of the defendants was to the effect that the allowance should be $98,000 because that amount was ascertained in accordance with several express agreements or arrangements made between the parties before the property was sold. The issue tendered and fought was whether these agreements in fact were made and were binding; if they were the course of the proceedings committed the defendants to allowing $98,000 for this item in the same scheme of division, while if they were not, the plaintiffs approached the Court contending that $50,000 should be allowed, and did not ever depart from that position or seek to advocate a more advantageous position. The defendants bore the onus of proof that $98,000 should be allowed.

12 Mr Barrett's evidence included material to the following effect. Leichhardt Municipal Council refused the Development Application on 1 October 1998. Later in October 1998 the Hawkers, Mr Barrett and Mr Booler the solicitor for all concerned attended a meeting at Mr Booler’s office, discussed the cost of an application of the Land and Environment Court and obtained Mr Booler’s estimate of the costs. After leaving Mr Booler’s office the parties had a further discussion and decided to go ahead with the project and appeal and not to sell the property, and that each side would cover a half share of the legal costs. Mr Barrett says and the Hawkers deny that he then said “The $1000.00 per week to cover my expenses will have to continue. I am well and truly out of pocket on this already” and that Mrs Hawker replied “Yes, your expenses will have to be added to project costs.”

13 The parties then instructed Mr Booler to conduct the appeal and this led to the grant of development consent by the Land and Environment Court on 19 May 1999.

14 Mr Barrett’s evidence is that in a telephone conversation with Mr Hawker on 22 May 1999 Mr Barrett said “Since last October I have incurred about $20,000.00 more in costs – making a total of $70,000.00. This is a cost to the Joint Venture and is due to me know. We should include it in the first progress payment from the bank, otherwise, I’m carrying all of these expenses myself.” Mr Hawker said “Yes, let’s do it that way.”

15 Mr Barrett prepared an itemised schedule in support of an application for a construction loan to the National Australia Bank. This referred to estimates of itemised costing. There were many items and one of the estimates was referred to as follows: “Project costs-incurred by G A Barrett until commencement $70,000.00” This was known to Mrs Hawker who approved its being submitted to the Bank in connection with the application for a construction loan, which was approved by the Bank, although no construction loan was ever drawn. Mr Barrett also says that Mr Hawker saw the Schedule and did not dissent from it.

16 In September 1999 in discussion between Mr Hawker and Mr Barrett it was established that the parties would not go on with the project, for which there was not yet a building approval, and that the property would be sold. Mr Barrett joined in arrangements to advertise the property for sale. In his evidence he sought to present this turn of events and the proposal to sell the property as a grievance and a turn of events imposed on him, but there was no sign in the evidence that he resisted it, and he participated in the steps which led up to the sale and in the sale. There is no substance in a view that in some way the Hawkers failed him or wronged him or that these circumstances give rise to some claim for him to have redress.

17 It is Mr Barrett’s evidence that on the evening of 16 September 1999, the day on which the subject was first discussed with Mr Hawker, he spoke to Mrs Hawker by telephone and made arrangements to lodge the advertisement that evening in the Sydney Morning Herald. He says that during this conversation he said “My further expenses up the date of issue of the construction certificate at the rate of $1,000.00 per week have to be paid by the joint venture from the sale proceeds” and that Mrs Hawker replied “I’ve always agreed your costs will have to be covered. You will have to replace your car after this.”

18 Mr Barrett claims that the fact that there was such an arrangement is confirmed by a discussion which took place in the auction room on 21 December 1999 between himself and Mrs Hawker. (Mr Hawker was not present). While other auction sales were progressing but before the auction of this property was reached, he said to her, in the context of discussions about the price that would be accepted “I need to be covered for my expenses because I have been working for nearly two years on this project without any of my expenses being reimbursed. I need them to be covered.” He asked his daughter Vanessa who was present to total up expenses of the project, told her amounts which she wrote down and reached $98,000; then he said to Mrs Hawker referring to the $98,000 “This sum is made up of $50,000.00 as originally agreed, $20,000.00 in additional work regarding the Land & Environment Court proceedings, $20,000.00 to chase up the Construction Certificate and $8,000.00 in relation to marketing.” She replied “Of course. I agree that the amount is owed to you – there is no question of that. You will probably need to replace your vehicle in the near future due to all the travelling that you have made.” Mr Barrett reached and in my understanding his evidence was that he brought forward a total about $350,000 of project expenses; as well as the $98,000 this included $38,000 which he had paid for interest and legal expenses (and which has not given rise to dispute) $133,649 owing to the Hawkers for their initial contribution, $38,200 for interest and legal expenses paid by them, $43,890 to be paid on settlement for various outstanding expenses; also there was a bank debt of $1.2m.

19 The Hawkers deny making the oral agreements alleged. It is oath against oath and it is important to look for corroboration and considerations of probability. It is important to look for written confirmation of the agreements or other written material corroborating the allegation that the Hawkers undertook an additional obligation to pay expenses to Mr Barrett or Barretts Bowyangs beyond the obligation in cl.7.4 with its limitation of $50,000.

20 The parties went to some care to record the terms of their Joint Venture Agreement in a document which was prepared by Mr Booler, who acted as solicitor for all concerned and continued to act until a conflictual situation developed. The parties had ready access to his advice, and the rights of each party were fully considered and carefully expressed in the Joint Venture Agreement which he prepared. Under that Agreement the maximum limitation at $50,000 was completely unmistakably expressed. It would have been imprudent to give a commitment to Mr Barrett or his company to pay a continuing amount which might extend indefinitely for as long as it took for him to complete the project, bearing in mind that the project was entirely under his management, and he was in a position to control or influence how much time was used, while the Hawkers were not. The limitation of $50,000 reflects perception of the imprudence of an unlimited obligation; the claim is that the Hawkers agreed to an open-ended departure from this protection. This is inherently improbable. It is also improbable that such a modification would not be recorded in a written agreement or in some other written material. In fact however there was no correspondence before February 2000 which could be thought to confirm such an arrangement or to reflect its existence in any way.

21 The anomaly of this is amplified by the fact that Mr Booler prepared an agreement in October 1999 which was to govern rights in the event of a sale (which did not eventuate) to Lecon Constructions. According to the terms of that document, which the Hawkers accepted for the limited purpose of the contemplated sale to Lecon Constructions, Barretts Bowyangs was to receive $140,000, and the Hawkers were to receive back $140,000 in respect of the capital they had contributed. Whatever else this may mean, it does not confirm but tends to contradict the existence of a standing arrangement under which Mr Barrett or his company was to receive expenses at the rate of $1000 per week, or was to receive actual expenditure. If there had been an arrangement to receive $1000 a week up to any particular time which could be established, I do not find it possible to see why it would not have been recorded in the draft of this ultimately ineffectual agreement, instructions to prepare which were given to Mr Booler by Mr Barrett. I sought to obtain from Mr Barrett an explanation of why he was to be paid $140,000 and the basis of calculation, but he did not reply in any way which was intelligible. It is plain that on this occasion he sought to impose a stipulation that had the effect that the Barretts would not get back their contribution unless he got back an equal amount of money which could not be justified. In this instance it is plain to me that he was not observing good faith in the conduct of Joint Venture affairs and was seeking to take advantage of the Hawkers’ expressed strong wish to achieve resolution of their involvement.

22 The incident relating to the Lecon Constructions draft followed fairly closely an exchange of correspondence in which on 27 September 1999 the Hawkers put a strong claim to achieve resolution. Among other things they described their own state in the following terms: “Geoff, we have no money left. We have no overdraft. We have exhausted all avenues of fundings. We can’t afford to wait for the plans promised from Council as we are not confident they will be forthcoming.” They also said “You have indicated all along that you have done all this work at your own expense and we agree but this was your agreement in the beginning.” The letter put many concerns and anxieties and ended by asking “Where do you want to go from here?” Mr Barrett replied on 5 October 1999, protesting against the terms of the letter which he said was accusing, contradictory and very offensive and mostly ravings. He dealt with some of their concerns. He did not however dispute or say anything about their assertion that he had indicated that he had done the work at his own expense, or that this was his agreement in the beginning. If he had any belief or understanding that he had the benefit of an agreement for more to be paid to him than was in the agreement at the beginning, it is, it seems to me, hardly possible that he would not have mentioned it on this occasion among the small number of things which he did mention.

23 In the context of the concern and anxiety revealed in the Hawkers’ letter of 27 September, imposing a stipulation that he was to receive $140,000 out of the Lecon Constructions transaction was plainly an attempt to exploit their relative weakness, and it was a departure from dealing with them in good faith.

24 The entry in the estimate sent to the National Australia Bank in support of the construction loan was referred to as if it in some way confirmed Mr Barrett’s claim and as if Mrs Hawker’s allowing it to go forward in some way acknowledged the claim. She was confronted with her participation in allowing it to go to the Bank as if her participation was discreditable to her in some way. In my view there was no substance in this and the cross-examination was based on a wrong view of what the Schedule said. It could not be adverse to Mrs Hawker’s credit, or to her case now, that she accepted an estimate made by Mr Barrett that “Project Cost” which was to be “Incurred by GA Barrett until commencement” that is to say, in the future, or partly in the future was $70,000. The entry in the bank loan application related to expenses incurred by Mr Barrett, not to Mr Barrett. The words “Project Cost” and the contents of the estimate do not indicate that the $70,000 or all of it represented payments at the rate of $1000 per week to Barretts Bowyangs, but if they did it is not possible to see where 70 weeks were derived from or how adopting 70 weeks could be consistent with the defendants’ case. By 19 May 1999 when development consent was obtained from the Court almost 84 weeks had passed since the Joint Venture Agreement was made; it was not possible to see then why the following month Mr Barrett would be talking about an estimate of $70,000 including future costs incurred by him, if the reference was to payments of $1000 per week to his company.

25 The defendants’ claim was first recognisably put forward in writing in an invoice dated 1 February 2000 which he sent to Mr Booler in these terms:

FOR: Work carried out on 11 Wells Street, Annandale $
1. Management Fee as agreed 50 000
2. Preparation and follow-up work for Land & Environment
Court application as agreed in our Bank Loan application
signed by both Bruce and Dianne Hawker 20 000
3. Time and Costs involved to achieve Construction Certificate :
Weekly trips to Sydney for supervision and revising of plans (with
Draftsman, Hydraulics Engineer, Fire Engineer, Private Certifiers);
Including telephone, facsimile, mail and travel expenses over
twenty-two weeks 20 000
4. Time and Costs involved in Marketing 11 Wells Street :
Advertising, telephone, facsimile and travel expenses over eight
weeks. This $8 000 was recovered from agents commission
(commission was reduced from 2% to 1.5%) because I introduced
the purchaser prior to auction 8 000
TOTAL 98 000

26 The source of the first item is obvious. The source of the second item could be attributed to the agreement of October 1998 alleged but if so it is not possible to understand why the figure $20,000 was chosen or to what period it related and it was obviously incorrect to describe that figure as “as agreed in our Bank Loan application”.

27 The third and fourth items can be related in some way to the agreement alleged to have been made by telephone with Mrs Hawker on 16 September 1999 but cannot be related to any particular 28 weeks of work which can be identified. The whole claim $48,000 in excess of $50,000 is difficult to understand because of its lack of relation to any particular period of time. There is no suggestion in Mr Barrett’s evidence that the Hawkers particularly agreed to allow any charge in respect of achieving the Construction Certificate or in respect of marketing.

28 There are anomalies in the expressions which Mr Barrett’s evidence says were used in this series of agreements. He depicts the Hawkers as always agreeing fully and immediately to whatever he asked, sometimes with endorsement. As to the agreement of October 1998 he says that Mrs Hawker immediately agreed to a proposal that $1000 per week would have to continue, without any discussion or mention of how long it was to continue, or when it might end, and without any reference to the existing limit which had been reached shortly before that time, or without any attempt to rely on the limit or obtain protection from it, and without any reference to Mr Barrett’s commitment to act in the management of the project or to the advantages which that could be expected to bring to him. It is very unlikely that at about the time the $50,000 limit was reached the Hawkers abandoned the protection of it, without any other limitation and without any real discussion. In October 1998 there was no need to discuss further payment to Mr Barrett because entitlement was settled by the terms of the Joint Venture Agreement. As time wore on disadvantages accrued for each party, but they were obliged to bear them if they were to pursue the Joint Venture in good faith.

29 Mr Barrett’s counsel sought to point to an advantage conferred on the Hawkers by the arrangement in terms of the project having been brought to a practical end by the refusal by Leichhardt Council of development consent, the lack of any contractual obligation to pursue an appeal and the need to abandon the project unless Mr Barrett’s services continued. To my mind this was an altogether unreal explanation; Mr Barrett was in substance a principal with much to gain, and the commitment he had given to pursue the development consent was just as good for pursuing it to the Land and Environment Court as for pursuing it to Leichhardt Council, and bound him to go on with his efforts if the Joint Venturers agreed to the appeal, which they did. If he truly sought and obtained an agreement that he would be paid more than he agreed to be paid to go on with his efforts in the interests of the Joint Venture, seeking the arrangement would reflect very badly on him in the context of a good faith obligation under which he had already obtained an entitlement for $50,000. There was no real additional advantage for the Hawkers, who were to continue to be tied up and have their capital tied up and were to find some more money for the appeal. The claim that they abandoned their protection in this way and allowed the position to become open-ended was extremely improbable.

30 In Mr Barrett’s account of what was said in a conversation with Mr Hawker on 22 May 1999, he did not refer back to any varying agreement which had been made in October 1998. In his account of his conversation with Mrs Hawker on 16 September 1999 the words which he attributes to Mrs Hawker are equivocal; they do not necessarily have the meaning that she agreed to pay more than was prescribed in the Joint Venture Agreement; the words he attributes to her are “I have always agreed your costs will have to be covered.” He attributes a similar statement to Mr Hawker earlier in the day. Mr Barrett’s account of these conversations does not include any reference back to what he says were earlier arrangements; he simply speaks of what he said had to be paid as if the subject was being raised for the first time.

31 What he says of the conversation at the auction on 21 December is generally similar; he does not speak in terms of a claim of right based on an existing arrangement. Mrs Hawker agrees that he raised the subject of some claim at the auction, but according to her evidence she gave a non-committal or fobbing answer. The real point of difference about the events on 21 December is whether Mrs Hawker gave a commitment, more or less immediately on hearing of the claim for $98,000, to meet it, and added some further endorsement about Mr Barrett’s need for a car. In the circumstances where they were in attendance to auction the property, his co-operation was essential, the Hawkers strongly wished the property to be sold, Mr Barrett could disrupt this project easily by withdrawing his instructions to the auctioneer and he had sought to impose an excessive burden in the Lecon Constructions transaction, a temporising answer which did not engage with what he said could readily be understood, and the proposition that Mrs Hawker immediately agreed to a new list totalling $98,000, which she had never heard of before or and had never had an opportunity to consider, and which he came up with on the spot is extremely unlikely. Again Mr Barrett’s evidence if true depicts him in a poor light; what he says he did crossed the business in hand of maximising auction realisation with attempts to obtain and he says actually obtaining collateral advantages for himself. In the context of his earlier behaviour, the disruptive influence is obvious and must have been obvious at the time.

32 Mr Barrett’s evidence of events at the auction room was corroborated with suspicious completeness by the evidence of his daughter Ms Galina Barrett who gave an account of the critical events almost exactly identical with his evidence. She had plainly discussed the events with him before giving her evidence. She had no particular reason to treat the events as important at the time or to remember them in detail, and her endorsement of her father’s evidence should in my view be attributed largely to family loyalty. Her endorsement does not overcome the high inherent improbability of there having been a commitment of a kind which the defendants allege was made at earlier times and was affirmed by arrangements made in the auction room. It is inherently unlikely that Mrs Hawker agreed, forthwith and without discussion, that an amount of over $90,000 details of which she never heard of before was payable, and Ms Barrett’s evidence does not overcome this.

33 Nothing in the demeanour or answers of Mr Hawker or Mrs Hawker gave me an unfavourable impression of them, their sincerity as witnesses or their reliability. Claims that there were concessions of wrong conduct on their part in approving information forwarded to the bank were based on a wrong view of the contents and meaning of the document, which Mrs Hawker too readily accepted when she adopted the terms of the cross-examiner’s questions. It does not reflect well on Mr Barrett’s credit that while Project Manager in a good faith relationship he demanded, as he says he did, more advantages from the Joint Venture if he was to continue to maintain activity in support of Joint Venture affairs. The advantage he tried to get in the proposed Lecon Constructions sale also reflects badly on him. Mr Barrett and his evidence formed a poor impression on me; in respect of his claim to have obtained agreement to extract additional advantages if he were to go on with what he had agreed to do, and also in respect of his difficulty in producing comprehensible responses dealing with difficulties when they appeared, and his manner generally. I regard his case as infected with a high degree of general improbability. It is adverse to his credit that he put forward a case which, if true, shows a lack of respect for his obligations to participate in the Joint Venture in good faith and to serve its interests. Obviously it was seen from the beginning by the parties that he may have to work more than 50 weeks, it was an unremarkable turn of events when that happened, and it gave no cause for reconsideration of the limit on what he was to receive. The possibility that the application for Development Consent would need to be pursued to an appeal was obvious from the first. In a relationship where significant rights were recorded in writing Mr Barrett put forward an implausible claim based on attributing oral agreements of unlikely simplicity to the Hawkers, without there being written traces of kinds which such arrangements could be expected to produce. I did not believe his case. The correct amount to allow is $50,000.

34 In my view it was appropriate to award interest on the sums to which each party was entitled out of the amount held in the St George Bank account and earnt on that bank account. The course which I adopted was to apportion all interest on the whole of the moneys in the bank account to the sums to which parties were specially entitled.

35 The orders which I made on 12 October were later modified to overcome a drafting error which counsel pointed out. As so modified the orders were:-

1. Declaration in accordance with Claim 13(a) in the Statement of Claim.

2. Order that the principal moneys of $308,500.00 in Interest Bearing Deposit Account 340089380 with the St George Bank Limited deposited by Messrs Thomas Booler & Co. on account of the parties be divided as follows:

(i) $133,849.00 to the Plaintiffs
(ii) $50,000.00 to the First named Defendant
(iii) the balance of the principal equally between the Plaintiffs on
the one part and the First named Defendant on the other part.

3. Order that interest accrued and interest to accrue until payment out on the Interest Bearing Deposit Account with the St George Bank Limited be paid out as follows:

(i) 133,849 parts in 183,849 parts to the Plaintiff, and
(ii) 50,000 parts in 183,849 parts to the First named Defendant.

4. Order that all moneys held by Barretts Bowyangs Pty Ltd and Hawker Development Pty Ltd in Business Cheque Account BSB No: 082-774 Account No: 69-368-3085 in the National Australia Bank at Orange be paid out one half to the Plaintiff and one half to the First named Defendant.

5. The Cross-claim is dismissed with costs.

6. Order that the Defendants pay the Plaintiffs’ costs of the proceedings.
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Last Modified: 12/05/2001