Hawkins v Farley

[1996] QCA 520

IN THE COURT OF APPEAL	[1996] QCA 520
SUPREME COURT OF QUEENSLAND

Appeal No. 276 of 1995.

Brisbane
[Farley v. Hawkins & Ors.]

BETWEEN:

CHRISTOPHER JOSEPH FARLEY

(Defendant) Appellant

AND:

VICTORIA LEE HAWKINS, ELIZABETH KATE HAWKINS, and DAMON THOMAS HAWKINS (by his next friend VICTORIA LEE HAWKINS)

(Plaintiffs) Respondents

___________________________________________________________________

Fitzgerald P.
Pincus J.A.

Derrington J.

___________________________________________________________________________

Judgment delivered 17 December 1996

Separate Reasons for Judgment of each member of the Court, all concurring as to the order
made.

___________________________________________________________________________

APPEAL DISMISSED WITH COSTS TO BE TAXED

___________________________________________________________________________

CATCHWORDS: Fixtures - dishwasher - galvanised iron shed - degree of

annexation - ease of removal - damage to item and land.

Trust Fund - succession - liability of appellant (trustee, executor and residuary beneficiary) for trust monies paid to the appellant when others beneficially entitled to the money under pre-existing trust - "practically just" - "double dipping" through trust fund entitlement and money otherwise spent on maintenance of children.

Counsel:	Mr A J Kimmins, with him Mrs A Julian-Armitage, for the appellant. Mr M K Conrick for the respondents.
Solicitors:	McLaughlins for the appellant. McDonald & Company for the respondents.
Hearing date:	15 August 1996.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 276 of 1995

Brisbane

Before Fitzgerald P.
Pincus J.A.
Derrington J.

[Farley v. Hawkins & ors.]

BETWEEN:

CHRISTOPHER JOSEPH FARLEY

(Defendant) Appellant

AND:

VICTORIA LEE HAWKINS, ELIZABETH KATE
HAWKINS and DAMON THOMAS HAWKINS

(by his next friend Victoria Lee Hawkins)

(Plaintiffs) Respondents

REASONS FOR JUDGMENT - FITZGERALD P.

Judgment delivered 17 December 1996

This is an appeal against portions of a judgment given by the District Court at Southport

on 21 November 1995. In part, the judgment was expressed to be against the appellant

in his personal capacity, and in part in his capacity as sole executor and trustee of the

estate of Elizabeth Mary Farley, who died on 16 July 1992, not long after she had married

the appellant. The respondents are the late Mrs Farley’s children by her former husband,

who pre-deceased her.

Under Mrs Farley’s will, the respondents became entitled to her dwelling house and the appellant became entitled to her residuary estate. On or about 31 March 1994, the

appellant removed a dishwasher from the house and converted it to his own use. (He also

removed a refrigerator.) On or about 21 May 1994, he attempted to remove a galvanised

iron shed to convert it to his own use. The trial judge said:

“... The shed is a substantial structure which was used to house earthmoving machinery used in a business which [the appellant] conducted with the deceased (through a limited company). I have no clear impression whether or not [the appellant] personally paid for the shed. This matter of who made payment in respect of all of the alleged ‘fixtures’ is immaterial. The important question is whether they are fixtures and so part of the ‘dwelling house’ (which was the deceased’s unencumbered property) or were or became under the Will [the appellant’s] property to remove.

The shed, which is erected on the same land as the dwelling house, is clearly a fixture, in my view. The components of which it is made are bolted into substantial concrete blocks buried in the ground. I do not accept the [appellant’s] suggestion that the shed ought to be regarded as something separate from the ‘dwelling house’. It is in a substantially disassembled state at the moment, police summoned at the [respondents’] instance having prevailed upon [the appellant] not to remove the disassembled components. The evidence in my opinion justifies a finding that the cost of reassembling the shed is no less than $2,000.00. That represents a sum which the [appellant] must pay in damages.”

Before this Court, the appellant has submitted that the shed was not a fixture which the

appellant, who had directly or indirectly contributed to the purchase of the materials of

which it was made and participated in its erection, was not entitled to remove, and, in any

event, that the respondents “[had] not discharged the burden of proof that rested upon

[them] to prove damage”.

In dealing with the dishwasher, the trial judge said:

“... It is clear from ... photographs ... that the other fixtures in the kitchen (benches and cupboards and the like) have been constructed to incorporate a dishwasher, to the extent that the floor in that area has not been tiled. The dishwasher is connected to inlets and outlets for water, the latter of which is integrated with the drainage system of the dwelling house. The absence of a dishwasher leaves a glaring and unsightly gap in the kitchen, which has been custom designed to hold such an item.”

His Honour followed a decision of Judge Ward in the District Court of South Australia at

Adelaide, Thomas v. Beck (1983-84) Aust. & N.Z. Conveyancing Reports 200, and held

that the dishwasher was a fixture. After pointing out that the dishwasher was not new when

converted, the trial judge assessed the damages payable in respect of its conversion by

the appellant at $500.00.

On appeal, the appellant has submitted that the dishwasher was not a fixture. At the

hearing before this Court, he sought, but was refused, leave to amend the notice of appeal

to challenge the amount of the damages awarded in respect of the conversion of the

dishwasher if it was a fixture.

The trial judge dismissed the respondents’ claim in respect of conversion of the refrigerator

and cross-applications by the respondents and the appellant under s. 41 of the Succession

Act 1981. Those matters are material in relation to the appellant’s appeal against the

order that he pay 90% of the respondents’ taxed costs of and incidental to the action and

the respondents’ application under the Succession Act; the issue of costs will be referred

to further below. Before doing so, it is necessary to refer to two other claims by the

respondents, in relation to what were known as the “first trust fund” and the “second trust

fund”. The respondents failed in their claim against the appellant in respect of the second

trust fund, but judgment was given for the respondents against the appellant in his personal

capacity and as executor of the estate of the late Mrs Farley for the amount of $32,269.30

in respect of the first trust fund together with interest thereon of $3,000.00. The appellant
has appealed against that judgment.

As the trial judge acknowledged, the late Mrs Farley was alleged to be the “primary

defaulter” in relation to the first trust fund, which came into existence pursuant to the will of

her mother, Mabel Flynn, who died on 19 December 1987, leaving a will dated 27 April

1987 which was admitted to probate in the Supreme Court of Victoria on 23 September

1988. Under Mrs Flynn’s will, the late Mrs Farley received the amount of the first trust fund

“UPON TRUST to apply the whole of the income and capital thereof in or towards the

maintenance education or advancement otherwise for the benefit of [the respondents]”.

Mrs Farley paid the amount which she received upon that trust into her bank account,

mixing it with her other funds and expending money from that account as she saw fit. After

her death, the appellant, as sole executor and trustee of Mrs Farley’s will, paid the amount

in her bank account to himself as residuary legatee.

The trial judge held that Mrs Farley had, inter alia, failed to invest the first trust fund for the

benefit of the respondents or to account to them for the first trust fund. However, his Honour

recorded that the respondents “have elected to forego their full entitlements, which does

them credit”, and “no longer wish to pursue [the appellant] for interest. No claim is made

against him that he is personally liable. He is only sought to be made liable to the extent

of assets in the estate”. Later, his Honour stated that “... when she died, [Mrs Farley] had

cash monies available (in the [bank] account) which roughly approximated the aggregate

of ‘the first trust fund’ and ‘the second trust fund’, albeit without the accretions which ought

to have been earned on them by prudent investment”. Elsewhere, his Honour stated that

“[t]o the extent that the first trust fund has been depleted, the [appellant] has been the sole
beneficiary”.

His Honour also said:

“... The evidence does not show [the appellant] knew of the existence or
terms of ‘the first trust fund’, but the authorities show that to be irrelevant.

It was not contested by Mr Kimmins [for the appellant] that the applicable principles are set out in Jacobs’ Law of Trust in Australia (5th) 2212:

‘[2212] If a trustee dies, after having committed a breach of trust, but before restitution is made, his personal representatives must make good the loss out of his estate. If his personal representatives distribute his estate, they will be personally liable, even although they had no notice of the breach, unless the distribution was made under the sanction of the court, or under statutory provisions such as the Wills Probate and Administration Act 1898 (NSW) ss 92, 93, and the Administration and Probate Act 1958 (Vic) s 30. But the estate of a deceased trustee is not liable for a breach of trust committed after his death where the trust funds have been left in a proper state of investment at his death.’

Section 66(1) of the Succession Act 1981 provides:

‘66.(1) Subject to the provisions of this section and with the exception of causes of action for defamation or seduction, on the death of any person after the 15 October 1940 all causes of action subsisting against or vested in the person shall survive against, or, as the case may be, for the benefit of, the person's estate.’

Subsections (7), (8) and (9) (formerly paragraphs (b), (c) and (d) of subsection (6) provide:

‘(7) Where an action is brought against a beneficiary to whom a part of the estate has been distributed that beneficiary is entitled to contribution from any beneficiary to whom a distribution has been made, being a beneficiary ranking in equal degree with himself or herself for the payment of the debts of the deceased, and to an indemnity from any beneficiary to whom a distribution has been made, being a beneficiary ranking in lower degree than himself or herself for the payment of the debts of the deceased, and the beneficiary may join any such beneficiary as a party to the action brought against him or her.

(8) Where an action is brought against a beneficiary (including a beneficiary who has been joined as aforesaid) whether in respect of an action which has survived against the estate or for contribution or indemnity, the beneficiary may plead equitable defences and if the beneficiary has received the distribution made to the beneficiary in good faith and has so altered the beneficiary's position in reliance on the propriety of the distribution that, in the opinion of the court, it would be inequitable to enforce the action, the court may make such order as it thinks fit.

(9) In no case may a judgment against a beneficiary exceed
the amount of the distribution made to the beneficiary.’

... I do not think that it is tenable to suggest that Mrs. Farley, in the course of providing for [the respondents’] needs as they arose from time to time during her lifetime can be regarded as making applications of ‘the first trust fund’ ... . Her obligation to maintain [the respondents] from her own resources is made clear by s.66B of the Family Law Act:

‘[s66B](1) The parents of a child have, subject to this
Division, the primary duty to maintain the child.
(2) Without limiting the generality of subsection (1), the duty of
a parent to maintain a child:

(a)       is not of lower priority than the duty of the parent to maintain any other child or another person;

(b)       has priority over all commitments of the parent other than commitments necessary to enable the parent to support:

(i)	himself to herself; and
(ii)	any other child or another person that the parent has a duty to maintain; and

(c) is not affected by:

(i)        the duty of any other person to maintain the child; or

(ii)        any entitlement of the child or another person to an income tested pension, allowance or benefit.’

On the assumption that Mrs. Farley was intending to do the right thing as trustee during her lifetime, she certainly became guilty of a gross abuse when she left all of her personal estate to [the appellant] in her Will.

In my view, the liability of the estate, represented by [the appellant] is clear in respect of the first trust fund. As to his own liability, to the extent that his own estate has been enriched by the deceased's testamentary gifts, he should be held liable to make good the first trust fund, none of which is shown to have been applied for the benefit of any of the [respondents]. I would have been willing to make orders to increase the liability by an appropriate sum to cover what ought to have been earnt on ‘the first trust fund’, but the [respondents], perhaps out of sympathy for the practical position [the appellant] finds himself in, have not pressed their pleaded claim in this behalf.”

Later, in connection with a submission that the appellant’s liability should be reduced

because of contributions which he had made to the “joint household” while living at the late

Mrs Farley’s dwelling house with the respondents for a period after her death, the trial judge

said:

“... I appreciate that there may be particular items, particularly in respect of the boy, Damon, in respect of which real contributions have been made by Mr. Farley. However, I think it is right to take a ‘broad brush’ approach, and not to regard even these items as ones in respect of which Mr. Farley is entitled to repayment or some kind of credit, given all of the circumstances.

Mr. Kimmins was allowed to tender survey material relating to the cost of maintaining children such as is commonly used in the Family Court of Australia. See Streets and Streets (1994) F.C. 92-509 in which the ‘Lee’ and ‘Lovering’ scales are discussed. In the end this material is not helpful to me. The idea of the tender was to establish a credit that Mr. Farley and/or the deceased’s estate might be entitled to for the support given to the [respondents] over recent years. Any correspondence between the scales and actual expenditure would be mere coincidence; some support of the [respondents] (or one or more of them) has come from other sources. My view is that no credit along these lines is appropriate in respect of ‘the first trust fund’ in any event.

...

... So far as the deceased is concerned, she has simply treated ‘the first trust fund’ as her own money. This may have been honest, but is not shown to be reasonable. The evidence shows no significant change of position by her in reliance on a belief the money was hers; as it happens she had more than enough cash resources in her [bank] account to make good the first trust fund at her death. Excusing her would simply be allowing her to keep the [respondents’] money, and would not be ‘fair’. As to [the appellant], accepting that he acted without knowledge that he was taking trust moneys as the deceased’s residuary legatee, I can see no basis on which it is any more ‘fair’ to leave the [respondents] without their money. It is not sought by them to hold [the appellant] responsible for any more than he received, inappropriately, from the deceased’s estate. In that sense he is not being made personally liable at all. Even if he has to disgorge $32,269.30, he will have retained far more than that sum in benefits from the estate.

...

[The appellant] should be ordered, in both his capacities, to pay over the

amount of the capital of the first trust fund.”

The appellant’s appeal was substantially based upon two propositions. One was that

there was no justification for finding the appellant liable in his personal capacity as he took

the residuary estate of Mrs Farley without notice of the trust in favour of her children. The

other point went only to the amount of the judgment; it was submitted that after she received

the first trust fund under her mother’s will, Mrs Farley and subsequently the appellant

expended moneys on the maintenance, education and advancement of the respondents;

for example, they were privately educated. The respondents submitted that any moneys

expended on their maintenance, education and advancement from the bank account should

not be set-off because there was a duty at law to maintain them under s. 66B of the Family

Law Act 1975 (Cth.); however, the respondents were respectively born on 29 July 1971

(Victoria Lee Hawkins), 18 January 1974 (Elizabeth Kate Hawkins) and 12 December

1979 (Damon Thomas Hawkins) and it is plain that the Family Law Act cannot have had

application in relation to all of the respondents for the entire period after the death of Mrs

Flynn.

I have been unable to identify any support in either the appellant’s written or oral

submissions for his first proposition, which appears to have been substantially conceded

below. The argument seems to be based on the trial judge’s references to the appellant’s

personal capacity. However, there is no suggestion that the estate has not been fully distributed. As part of this process, the appellant, as sole executor and trustee, distributed

to himself as residuary legatee, a fund to which the respondents were beneficially entitled.

He is simply being required to reimburse what he was overpaid, albeit innocently. Subject

to what follows, nothing said in argument explains why that should not occur.

The appellant’s second proposition with respect to this aspect of the appeal was

substantially based on exhibits showing amounts expended in relation to one or other of

the respondents for a variety of goods and services, including, for example, food, school

and other tuition fees, books, clothes and medical expenses, car and motorcycle repairs,

bus tickets, and even liquor for a 21st birthday party. The submission seemed to be that

amounts expended by either Mrs Farley or the appellant in relation to any of the

respondents, or in the case of the appellant on the family home, at least after some date

not earlier than the death of Mrs Flynn, should be debited to the first trust fund and “set off”

against the respondents’ entitlement to that fund. The basis of the submission was that

such a course was necessary to prevent the respondents from “double dipping”, which - it

seems - was said to be inequitable in the circumstances. To “double dip”, it was

explained, meant that the respondents took both the benefits provided to them by Mrs

Farley and the appellant and the value of the first trust fund.

No authority was cited for any aspect of this argument which, to the best of my

understanding, depended upon the premise that the judgment below is not - but the course

urged by the appellant would be - “practically just for both parties”: Vadasz v. Pioneer

Concrete (S.A.) Pty Ltd (1995) 130 A.L.R. 570, 579. However, I see no reason to disagree

with the trial judge’s assessment of the practical justice of the case, especially in the light of his conclusion, not previously referred to, that each of the respondents would otherwise

(at least) have been entitled to increased provision - in a total amount exceeding the first

trust fund - out of Mrs Farley’s estate pursuant to s. 41 of the Succession Act.

To return to the fixture questions, the appellant founded his argument in relation to the

dishwasher upon Abercrombie v. Wollington (1956) 73 W.N.(N.S.W.) 336. In that case, an

electric stove connected to the house by conduit wires but otherwise easy to remove was

held to be a fixture. The decision does not seem to me to assist the appellant. It

establishes that if a chattel is securely affixed to a dwelling house there is a strong

presumption that it is a fixture although all the circumstances of the case have to be

considered. While the electric connection of the dishwasher was not a secure affixation

within the sense of that decision, the plumbing connections for both the entry of clean water

and the exit of dirty water seem to me to meet that description. A submission was made

for the appellant that the dishwasher was not a fixture because it could be easily removed

without damage to itself or the dwelling house, apparently in reliance upon remarks by

Joyce J. in Lyon & Co v. London City & Midland Bank (1903) 2 K.B. 135 at pp. 139, 140,

which were referred to by Herron J. in Abercrombie at p. 338. A perusal of the passage

in Lyon & Co. shows that his Lordship was referring to a situation where annexation was

incomplete in the context of a statement that “... a chattel on being attached to ... a building

prima facie becomes a fixture ...”. In any event, the facts of the present case do not seem

to me to establish that the dishwasher could be easily removed without damage. Its

removal left the kitchen cabinets etc. plainly incomplete, and an area of the floor which was

untiled visible. While the point might be debateable, I see no reason to depart from the

decision of the trial judge.
The trial judge described the shed as a “substantial structure” which was “bolted into

substantial concrete blocks buried in the ground”. The respondents’ contention that the

shed was a fixture was substantially, and perhaps entirely, based on the degree of

annexation. The appellant’s proposition that it was not a fixture was essentially based on

Webb v. Frank Bevis Ltd [1940] 1 All E.R. 247and Billing v. Pill [1953] 2 All E.R. 1061,

although other cases were also referred to. While Webb was a landlord and tenant case,

and Billing a criminal case, they provide some superficial support for the appellant. In

Webb, a structure apparently broadly similar to the shed in the present case was held not

to be a tenant’s fixture because it was erected for a temporary purpose and could be

removed without losing its identity. In Billing, it was held that a wooden army hut at a war-

time gun emplacement - again in a general sense comparable to the present shed - was

capable of being stolen since it was not a fixture because it was erected for a temporary

purpose and could be removed without doing any damage to the freehold.
It appears from the decisions referred to in relation to both the dishwasher and the shed

that all circumstances must be considered in deciding whether or not an object is a fixture,

with varying degrees of emphasis upon different factors from case to case. From a

common sense perspective, the shed seems to me a fixture; for example, a purchaser of

the freehold would be surprised if the shed were missing when possession was delivered.

While the issue is again debateable, I am not persuaded that the trial judge was wrong

with respect to the shed.

The appellant’s complaint with respect to the quantum of damages has nothing much to

commend it. There was little evidence on the topic, but enough for the trial judge to

estimate that the cost of re-erection of what had been dismantled would be at least

$2,000.00, the amount awarded; the appellant said that the components had cost a little

under $11,000.00 and that a contractor would have charged about $15,000.00 to supply

and erect the shed. The amount awarded was half the difference.

The only remaining issue concerns the order for costs, which of course involved an

exercise of discretion by the trial judge. While the respondents were not entirely

successful, they did succeed in many respects and the entire trial occupied only two days.

Although I consider that a less generous order for costs in favour of the respondents would

have been justified, I am not persuaded that the order made went beyond what could

properly be ordered.

In summary, I would dismiss the appeal, with costs to be taxed.
IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 276 of 1995.

Brisbane

Before Fitzgerald P.

Pincus J.A.

Derrington J.

[Farley v. Hawkins & Ors.]

BETWEEN:

CHRISTOPHER JOSEPH FARLEY

(Defendant) Appellant

AND:

VICTORIA LEE HAWKINS, ELIZABETH KATE HAWKINS, and DAMON THOMAS HAWKINS (by his next friend VICTORIA LEE HAWKINS)

(Plaintiffs) Respondents

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 17 December 1996

I have read the reasons of the President. I do not wish to add anything to his Honour’s treatment (with which I agree) of the claim relating to the first trust fund.

As the President explains, there were issues to be resolved with respect to alleged fixtures. The primary judge took the view that the dishwasher was a fixture. His Honour did so on the ground that the benches and cupboards in the kitchen were constructed to incorporate the dishwasher, to the extent that the floor in the space it occupied was not tiled; his Honour said that removing the dishwasher would leave "a glaring and unsightly gap in the kitchen, which has been custom designed to hold such an item". The dishwasher was not set on wheels, but intended to remain in its position under a bench. The degree of annexation was not great; the dishwasher had inlet and outlet hoses which were no doubt easily detached; there was also a power point.

The distinction between the dishwasher, affixed to the extent I have described, and a domestic refrigerator may not be very evident; one would expect such a refrigerator, whether or not fitted with a water inlet, to be treated as a chattel. But I agree with the decision of the trial judge that the dishwasher should be regarded as a fixture; I am of opinion that his Honour was right not to depart from the position indicated by such direct authority as exists, namely the South Australian decision discussed in the reasons below.

A slightly more complicated question is raised by the shed which was erected on the property which was left to the respondents. The judge held this to be a fixture, also. There are to be found cases in which comparable buildings have been held to be chattels. An example is Billing v. Pill [1954] 1 Q.B. 70, where the question was whether the appellant was guilty of larceny in dismantling and removing a hut; if the hut was realty, then under the relevant statute there was no larceny. The floor of the hut was attached to a concrete base by bolts let in to the concrete; this makes the case seem analogous to the present, where the structure of the shed was bolted to concrete pylons buried in the ground. In Billing v. Pill the concrete floor was of course held to be realty, but the hut held to be a chattel, principally, it appears, on the basis that the evidence showed that it was not intended, when erected, to be other than a temporary structure; here, there was no finding to that effect.

A contention made for the respondent that the shed should be treated as a trade fixture, removable on cessation of a tenancy, was rejected by the trial judge on the ground that the law relating to tenant’s fixtures did not apply in contexts such as the present. It appears to me that the submission that the shed was a tenant’s fixture and therefore able to be removed was not shown to have any relevance; assuming there was a right of removal, it was one vested in the entity which owned the business using the shed and that was on the evidence a company, not the appellant.

To my mind, the question whether the shed was a chattel or realty was not, on the authorities, necessarily easy to answer, but on balance I favour the conclusion at which the trial judge arrived.

On the other aspects of the case, I agree with the reasons of the President. I also agree with the order his Honour proposes.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 276 of 1995

Brisbane

Before Fitzgerald P
Pincus JA
Derrington J

[Farley v. Hawkins & Ors]

BETWEEN:

CHRISTOPHER JOSEPH FARLEY

(Defendant) Appellant

AND:

VICTORIA LEE HAWKINS, ELIZABETH KATE HAWKINS
and DAMON THOMAS HAWKINS (by his next friend

VICTORIA LEE HAWKINS)

(Plaintiffs) Respondents

REASONS FOR JUDGMENT - DERRINGTON J

Judgment delivered 17 December 1996

The circumstances and issues are set out in the reasons of the President with whom I

respectfully agree but would add some comments.

The Dishwasher

In respect of the dishwasher, its status as a fixture is established because not only is it lightly

connected with fixtures but also it is set into fixtures. Although it could easily be removed after the

disconnection of the plumbing, the entire fixture into which it was built was intended as an integrated
whole.

This is not the case where it merely occupies an empty space. Nor is the relevant machine of

the kind that are free-standing and mobile, and this distinction helps to explain why the two are different

in their status.

This distinction accords with general community understanding.

The Shed

The shed was so substantial as to amount to a fixture. The ease by which it could be

disconnected from the concrete slab to which it was bolted is irrelevant and would normally be so in

such a case unless the structure were light and easily portable. It is not of the type of structure

fabricated for easy transportability where the bolting to a base is merely for security during its temporary

location at the place where the base is located.

By its size and relative permanence the shed in this case is intended to be a fixture and its being

bolted to the base as a convenient form of building construction does not detract from this. Many

houses built on stumps were secured only by their own weight until some form of bolting, which was

removable, was added against wind damage; and yet it was never suggested that they were other than

fixtures.

Conclusion

I agree with the orders proposed by the President.