Heap, John v Olliver, Brian
[1996] FCA 253
•13 Feb 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No G 823 of 1991
)
GENERAL DIVISION )
BETWEEN: JOHN HEAP
First Applicant
JS HEAP CONSTRUCTIONS PTY LIMITED
Second Applicant
BRIAN OLLIVER
Respondent/Cross-Claimant
MICHAEL NOYCE
Cross-Respondent
Coram: Davies J.
Date: 13 February 1996
Place: Sydney
MINUTES OF ORDER
THE COURT ORDERS THAT:
There be judgment in favour of the second applicant, J.S. Heap Constructions Pty Ltd, against the respondent, Mr Brian Olliver, in the sum of $577,522.60 and in favour of the first applicant, Mr John Heap, against Mr Olliver in the sum of $272,364.86.
The respondent, Mr Brian Olliver, pay 60 per cent of the applicants' costs of the proceedings.
The cross-respondent, Mr Michael Noyce, abide his own costs of the proceedings.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No G 823 of 1991
)
GENERAL DIVISION )
BETWEEN: JOHN HEAP
First Applicant
JS HEAP CONSTRUCTIONS PTY LIMITED
Second Applicant
BRIAN OLLIVER
Respondent/Cross-Claimant
MICHAEL NOYCE
Cross-Respondent
Coram: Davies J.
Date: 13 February 1996
Place: Sydney
COSTS
Counsel are agreed that judgment should be entered in favour of J.S. Heap Constructions Pty Ltd ("Heap Constructions") against the respondent, Mr Brian Olliver, in the sum of $577,522.60 and in favour of Mr J.S. Heap against Mr Olliver in the sum of $272,364.86.
It is not in dispute that there should be some apportionment of the costs. When I mentioned the figure of 50 per cent in my reasons which were delivered on 12 December 1995, I was influenced by the fact that there were two broad areas in which
the claims were made. One area comprised claims made against Mr Olliver personally. The other claims were against Mr Olliver as the employer of the cross-respondent, Mr Michael Noyce. The figure of 50 per cent substantially reflected that. Mr M. Cashion, for the applicants, has put the submission that that percentage was inadequate. Mr J.B. Simpkins, for the respondent, has put the submission that it was more than generous to the applicants.
It is difficult to determine this issue as the matters were so intertwined. I see, however, that in my reasons for judgment I spent a great deal more time on the transactions in respect of which the applicants were successful than on those in respect of which the applicants failed. After a lengthy introductory part, which perhaps dealt rather more with those areas in which the applicants failed but nevertheless was generally relevant, I did not spend much time on the claims in which the respondent succeeded. Having listened to counsel and reviewed my reasons, I now consider that I should give the applicants 60 per cent of the costs of the proceedings.
The cross-respondent, Mr Noyce, also seeks an order as to costs. I indicated in my reasons of December that it seemed to me that Mr Noyce should abide his own costs of the proceedings. I remain of that view. It was based upon Mr Noyce's conduct and the effect thereof on the transactions which occurred. It seems to me that Mr Noyce's conduct contributed materially to the problems which confronted Mr Heap and Heap Constructions.
Mr Noyce conducted himself both as a solicitor and as a property developer. This is a circumstance which, time and again, gives rise to problems because persons with whom such persons deal become confused or fail to understand the different relationships - that which exists between a person and his solicitor and that which exists between a person and a businessman with whom he is dealing. In my reasons of December, I said that it is from the combining of property development with legal work that allegations of negligence, breach of fiduciary duty, conflict of interest and so on arise.
Mr Noyce had done legal work for Mr Heap and for Heap Constructions for many, many years and, in addition, they had had business associations together. It seems to me that, by the time that these present transactions commenced, Mr Heap had arrived at the time in life when his business perspicacity no longer prevailed, at least outside the ordinary course of his business. In my reasons of December, I said that Mr Heap's perspicacity in active business did not translate to the lending of money to others, at least from late 1988 onwards. Mr Heap was gullible and within a short time had lost a great deal of money.
It is difficult to know what exactly the position was in 1988, whether Mr Heap was suffering from the effects of age or suffering in some way from medical conditions, the heart problems he had had by the time of the trial. Quite plainly, at the time of the trial, he was a man whose mental resources were very much affected both by health and by age. It may well be that that was also the position in 1988. It seems to me that, in that case, it was unwise for Mr Noyce to have encouraged Mr Heap into the transactions with which we were concerned in these proceedings.
I was influenced in my reasons of December by Mr Olliver's recorded note that Mr Noyce had told him that he, Mr Noyce, had been trying to get Mr Heap slowly
involved, "so that he is locked into us". Mr Noyce said to Mr Olliver that Mr Heap had money and he was 100 per cent on side. Mr Noyce went on to say that everything was fine and that John (Mr Heap) had never lost money on any deal with him. That is an indication that Mr Noyce took positive steps to obtain money from Mr Heap which was invested in the subject dealings.
Mr Heap and Heap Constructions in fact lost a great deal of money. Mr Noyce held himself to be in some part responsible for he wrote to Mr Heap in the middle of 1989 that: "When I resigned from the group - that is the Blue Dolphin Group - I agreed to only on the condition that I would be responsible for your debt and would receive sufficient projects for me to be satisfied that your debt plus interest could be satisfactorily repaid in a satisfactory time." So Mr Noyce felt himself responsible and took steps to try to deal with the situation.
He was unable, of course, to meet Mr Heap's losses for he became insolvent and it was only a composition of his creditors that saved him from bankruptcy. The result was that Mr Heap and Heap Constructions lost a great deal of money as a result of Mr Noyce's encouragement, and, as I say, I think it was most unwise for Mr Noyce to have acted as he did. He had been solicitor for Mr Heap as well as a business partner and Mr Heap relied on him. I am sure that his position as solicitor had an effect upon Mr Heap in encouraging him to invest.
For those reasons it seems to me that Mr Noyce ought to pay his own costs. His conduct in relation to the whole of the transactions and in particular his conduct towards
Heap and Heap Constructions was such that I will order that Mr Michael Noyce abide his own costs.
I certify that this and the 4 preceding pages
are a true copy of the reasons for judgment herein of
the Honourable Justice Davies.
Associate:
Date: 13 February 1996
Counsel for the 1st & 2nd applicants: M. Cashion
Solicitors for the 1st & 2nd applicants: J.M. Caruana, Kay & Barry
Counsel for the respondent/cross-claimant: J.B. Simpkins
Solicitors for the respondent/cross-claimant: Phillips Fox
Counsel for the cross-respondent: D. Walsh
Solicitors for the cross-respondent: Noyce & Associates
Date of hearing: 13 February 1996
Date of judgment: 13 February 1996
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