HAREL JOSEPH HERROD (first appellant) ROBERT MATTHEW HERROD (second appellant) RACHAEL REBECCA HOLLINGSWORTH (third appellant) v HARELLA CAROLINE JOHNSTON (first respondent) LEAH DELILAH FELSMAN (second respondent)
FILE NO/S:
Appeal No 4369 of 2012 SC No 501 of 2007
DIVISION:
Court of Appeal
PROCEEDING:
General Civil Appeal
ORIGINATING COURT:
Supreme Court at Townsville
DELIVERED ON:
18 December 2012
DELIVERED AT:
Brisbane
HEARING DATE:
19 October 2012
JUDGES:
Muir and Gotterson JJA and Applegarth J Separate reasons for judgment of each member of the Court, each concurring as to the orders made
ORDERS:
1. The appeal be allowed.
2. Paragraphs 3(b) and 5 of the declarations and orders at first instance be varied by substituting $273,851 for $433,709.67.
CATCHWORDS:
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – where parties to the proceedings are siblings and deceased was their father – where deceased in a cattle property partnership with first and second defendants – where deceased’s interest in partnership and residue was left to third appellant and respondents in equal shares – where there were meetings in which discussions took place with respect to the respondents assigning their interest in partnership to first and second appellants for monetary sum – where first respondent signed agreement to this effect but second respondent did not – where partnership agreement provided for an option to purchase share of partnership – where partnership agreement provided for the giving of notice when exercising option – where appellant submitted primary judge erred in law in finding that the first and second appellants had not validly exercised option because the notice of exercise of option was not given in accordance with partnership agreement – where appellants submitted primary judge erred in law in declaring that an oral agreement entered into by the second respondent was unenforceable and ought to be set aside and concluding that no legally binding agreement had been made – whether option validly exercised – whether legally binding and enforceable agreement created with second respondent
EQUITY – EQUITABLE REMEDIES – GENERALLY – where primary judge concluded that respondents entitled to award of equitable compensation – where appellants submitted primary judge erred in declaring that respondents each entitled to elect to have an account of profits which accrued to the appellants by reason of their breach of duty or equitable compensation of $433,709.67 after allowing compound interest on the basis that the first and second appellants made the most profitable use of the shares of the deceased in the partnership – whether primary judge erred in making such declaration
EQUITY – EQUITABLE REMEDIES – GENERALLY – where appellants identified delay on the part of the respondents with respect to, inter alia, the institution and trial of proceedings – where appellant submitted respondents should be denied equitable relief on account of delay – whether such relief should be denied
APPEAL…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Herrod & Ors v Johnston & Anor [2012] QCA 360
Case
[2012] QCA 360
Decision Date
CaseChat Overview and Summary
In this case, the siblings were involved in a dispute regarding their father’s estate. The father had been in a cattle property partnership with two of the siblings, and his interest in the partnership and residue was to be left equally to the third sibling and the respondents. The appellants, two of the siblings, had discussions with the respondents about assigning their interest in the partnership to the appellants for a monetary sum. The first respondent signed an agreement to this effect, but the second respondent did not. The partnership agreement provided for an option to purchase the share of the partnership, and the appellants argued that the primary judge erred in law in finding that the option had not been validly exercised. The appellants also argued that the primary judge erred in law in finding that an oral agreement with the second respondent was unenforceable and that the respondents were each entitled to elect to have an account of profits or equitable compensation.
The court considered whether the option was validly exercised, whether a legally binding and enforceable agreement was created with the second respondent, and whether the respondents were entitled to equitable relief. The court also considered whether the primary judge’s findings regarding the value of the herd, partnership plant and equipment, and debt were erroneous. The court found that the primary judge’s findings were not erroneous and that the appellants had not established that the primary judge erred in law. The court found that the primary judge was correct in finding that the respondents were entitled to equitable compensation and that the amount should be reduced to $273,851.
The court allowed the appeal and varied the declarations and orders at first instance by substituting $273,851 for $433,709.67. The court found that the primary judge’s findings were correct and that the appellants had not established that the primary judge erred in law. The court found that the respondents were entitled to equitable compensation and that the amount should be reduced to $273,851. The court did not find that the respondents should be denied equitable relief on account of delay, and the court did not find that the primary judge erred in not drawing an inference adverse to the respondents from their failure to call the first respondent’s daughter as a witness.
Orders
Orders of the court
1. The appeal be allowed.
2. Paragraphs 3(b) and 5 of the declarations and orders at first instance be varied by substituting $273,851 for $433,709.67.