Kavanagh v Londy

Case [2024] QCA 140

SUPREME COURT OF QUEENSLAND

CITATION:

Kavanagh v Londy [2024] QCA 140

PARTIES:

MICHAEL ANTHONY KAVANAGH
(appellant)
v
ANNE LYNETTE LONDY AND GERARD PHILIP PENDER AS THE EXECUTORS AND TRUSTEES OF THE WILL OF MARY HILARY KAVANAGH (DECEASED)
(first respondent)
JOHN DENNIS BYRNE
(second respondent)

FILE NO/S:

Appeal No 10014 of 2022
DC No 32 of 2017

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

District Court at Brisbane – [2022] QDC 161 (Sheridan DCJ) and [2022] QDC 259 (Sheridan DCJ)

DELIVERED ON:

2 August 2024

DELIVERED AT:

Brisbane

HEARING DATE:

12 May 2023

JUDGES:

Bond JA and Mitchell AJA and Davis J

ORDER:

The appeal is dismissed with costs.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL GENERAL PRINCIPLES – INTERFERENCE WITH THE JUDGE’S FINDINGS OF FACT – PROOF AND EVIDENCE – OTHER MATTERS – where the appellant appeals against the dismissal of his claim and judgment given against him on a counterclaim – where the appellant entered into a written agreement with the deceased – where the executors and trustees of the deceased are the first respondents – where the family of the appellant and the deceased held agricultural land in Queensland – where in 2012 the appellant and the deceased entered into a written agreement to historical complaints concerning transactions effected in the early 1900s – where the agreement provides that the deceased would pay the appellant $250,000 (which did occur), and sell a property to the appellant for $200,000 (which did occur), and bequest another property to the appellant (this did not occur) – where the appellant sought at trial a declaration that the property was held on trustee for his benefit, and an order for profits earned, or alternatively, damages, and an order that the property be transferred to him – where the respondents contended that the agreement was voidable and not a valid contract – where the respondents at trial counterclaimed seeking a declaration that the Agreement was voidable, and that the $250,000 be returned, and further and in the alternative, that the property that had already been transferred be returned to the respondents – whether the primary judge erred in rejecting evidence of the appellant, and inappropriately dealing with evidence of the deceased – whether the agreement was procured by unconscionable conduct or undue influence, and whether it was supported by sufficient consideration – whether the appellant suffered detriment – whether the respondents are estopped from avoiding the agreement, even if it is voidable

Evidence Act 1977 (Qld), s 92, s 102

Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81, cited
Bull v The Queen (2000) 201 CLR 443; [2000] HCA 24, cited
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14, followed
Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39, followed
Dairy Farmers Co-operative Milk Co Ltd v Acquilina (1963) 109 CLR 458; [1963] HCA 59, cited
Devries v Australian National Railways Commission (1993)…

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AGLC
Kavanagh v Londy [2024] QCA 140
Case
[2024] QCA 140
Decision Date

CaseChat Overview and Summary

Michael Kavanagh appeals against the dismissal of his claim and the judgment given against him on a counterclaim in relation to a written agreement with the deceased Mary Kavanagh. The agreement, which involved the payment of $250,000 and the sale of a property for $200,000, was not fully honoured as Mary failed to bequeath another property to Michael. Michael sought a declaration that the property was held on trust for his benefit, an order for profits earned or damages, and an order for the transfer of the property. The respondents argued the agreement was voidable and not a valid contract, and counterclaimed for the return of the $250,000 and the property that had been transferred. The legal issues included whether the primary judge erred in rejecting Michael’s evidence and inappropriately dealing with Mary’s evidence, whether the agreement was procured by unconscionable conduct or undue influence, whether it was supported by sufficient consideration, whether Michael suffered detriment, and whether the respondents were estopped from avoiding the agreement, even if it was voidable.

The court considered the evidence and found that Michael’s claims should fail. The court held that the primary judge’s findings were not “glaringly improbable” or “contrary to compelling inferences” and did not amount to a failure to use or misuse their advantage. The court found that Michael’s evidence did not justify his submissions, as he exaggerated the costs and time spent on the property. The court also found that the primary judge’s findings concerning the lack of sufficient consideration and detriment were correct. The court concluded that the appeal should be dismissed with costs.

The appeal is dismissed with costs.

Orders

Orders of the court

The appeal is dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Issues 1, 2 and 3 all allege errors concerning the evidence and what the trial judge ought to have made of it. Issues 4, 5 and 6 concern the bases upon which the trial judge determined that Mary was not bound by the Agreement. Issue 7 raises Michael’s alternative case that if it is found that the Agreement is voidable, Mary was estopped from avoiding it. Unless Michael is successful on Issue 7, the appeal will fail unless he wins on each of Issues 4, 5 and 6.Issue 1 – The rejection of Michael’s evidence This appeal is one by way of rehearing. The Court’s function is to conduct a real review of the evidence and draw its own inferences.[46] That function is subject to well established limitations based on the advantage held by a trial judge in seeing and hearing the witnesses give evidence.[46]Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at [43]. Where, as here, the trial judge’s findings are influenced by impressions gained from seeing and hearing the witnesses give evidence, interference on appeal with factual findings is only justified where the findings are “glaringly improbable” or “contrary to compelling inferences” or “inconsistent with facts incontrovertibly established by the evidence” or “the trial judge has failed to use or has palpably misused [their] advantage”.[47][47]Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 followed in Fox v Percy (2003) 214 CLR 118 at [26]-[27]; see Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at [43] explained in Lee v Lee (2019) 266 CLR 129 at [55]; see analysis of Bond JA in Sutton v Hunter (2022) QCA 208 at [46]-[50]; and Wang v Hur [2024] QCA 126 at [23]-[24]. Michael points to paragraph [165] of the July reasons which is in these terms:“[165] This submission is rejected.[48] First, the evidence of Michael does not justify the submission. In cross-examination, Michael explained that he used $200,000 of the money given to him by Mary to pay for the acquisition of the Thagoona property. When asked about the other $50,000, Michael responded that it was used for other things, and added that a lot of it was used to repair the house. He said he would have spent $30,000, which subsequently changed to $40,000, repairing the house. In re-examination, he explained that he had to re-screw the roof, the plumbing was in a bad way, a lot of the stumps underneath the house had to be levelled, there was a problem with the electricity, and he had to recarpet the house. His comments made it clear that some of this work was in response to matters raised with him by the tenants. When asked about whether he engaged tradesman or did it himself, Michael responded that he did most of it himself. No other details, let alone documentary proof, were provided of the time taken to do the work or the costs of any materials. Michael is prone to exaggeration and hyperbole. I am not satisfied that Michael spent a considerable amount of time and money on the property. Secondly, if any costs were incurred, they were, of course, taken out of the funds provided by Mary.” (emphasis added)[48]A submission that equitable relief was inappropriate as the Agreement had been partially performed.

Decision

Reasons for decision

Third, Michael could not argue that his purchasing the Thagoona property constituted a detriment. No challenge was made to the primary judge’s finding that conditions (a) and (b) of the Agreement were to be regarded as creating a round-robin transaction the effect of which was that Mary transferred to Michael the Thagoona property and $50,000 and that could not be regarded as causing detriment to Michael. We agree with Davis J that there is no basis to overturn the primary judge’s finding.Conclusion The appeal must be dismissed with costs. DAVIS J: The appellant, Michael Anthony Kavanagh (Michael), appeals against the dismissal of his claim and judgment given against him on a counterclaim.[12][12]Kavanagh v Londy [2022] QDC 161; and Kavanagh v Londy (No 2) [2022] QDC 259. The proceedings concern a written agreement entered into between Mary Hilary Kavanagh (Mary), now deceased, and Michael. Mary’s executors and trustees are the first respondents and were the counterclaiming first defendants in the proceedings. Stephen Joseph Kavanagh (Stephen) and Matthew Owen Kavanagh (Matthew) were brothers. Their father was Hugh Kavanagh (Hugh Senior). Stephen and his wife had six children, four girls and two boys, one of whom was Mary and one of whom was John Patrick Roache (Jack). Jack’s niece Anne Lynette Londy is one of Mary’s trustees and executors. The other, Gerard Philip Pender, is a solicitor. Matthew and his wife Agnes had four children, one of whom was Hugh Leo Kavanagh (Hugh Junior). Michael is Hugh’s son, Matthew’s grandson and Hugh Senior’s great grandson. The Kavanagh family have held agricultural land in southern Queensland for well over a century. There are four properties which are relevant to the current appeal. “Home View” is a parcel of land near Esk. This was owned by Hugh Senior in the late 1800’s. In 1905, he allegedly entered into an arrangement with Patrick O’Brien that Mr O’Brien and his wife would either own (or at least occupy; the position is unclear) Home View for the term of their lives and then it would pass in equal shares to Stephen and Matthew. Michael alleged that Home View did not pass to Stephen and Matthew but was acquired in some way by Stephen alone who, in 1954, sold it to a relative of Patrick O’Brien. It is alleged by Michael that Stephen retained the whole of the sale proceeds and those proceeds formed part of his estate which ultimately passed to his daughters, one of whom being Mary. Three properties of significance were owned by Mary, namely “Emerald View”, a property at 1 Kavanagh Road Thagoona (Thagoona House), and a property on Turnbull Road known as “Byrnes”. On 11 February 2012, Mary and Michael made the written agreement on which Michael based his claim (the Agreement). The Agreement is in these terms:“Agreement between Mary Hilary Kavanagh of 5 Kavanagh Road Thagoona, via Rosewood, Queensland, and Michael Anthony Kavanagh of 73 McMahon’s Road, Sladevale, via Warwick, Queensland, 4370.I, Michael Anthony Kavanagh, Sole Executor of the Estate of Hugh Leo Kavanagh, hereby agree to accept the sum of $250,000, (Two hundred and fifty thousand Dollars), in full settlement of all monies and accumulated Interest, owed to me, only son of the abovementioned Hugh Leo Kavanagh, of Sladevale, via Warwick, formerly of Milora, via Munbilla, Welwyn Crescent, Coorparoo, Townsville, and Lowood, only son of the late Matthew Owen Kavanagh of Lowood, subject to the conditions listed below.The debt referred to, relates principally to the disposal by Stephen Joseph Kavanagh of a half share of a farming property, previously occupied by Patrick Joseph O’Brien, of Crossdale via Esk, which, on the Instruction of Hugh Kavanagh (Senior), his Uncle, who financed that original Property, was to be bequeathed in equal shares to Stephen Joseph Kavanagh and Matthew Owen Kavanagh, sons of the aforementioned Hugh Kavanagh (Senior).Other items and events referred to in this agreement include:-(1)The transfer, registration and use of the cattle brand OB8, by Frances Cecelia Kavanagh, and the Individual Partners and the Partnership of “The Estate of S.J. Kavanagh”, who benefited from this action, and the subsequent refusal to return the said brands on several occasions, when requested by Hugh Leo Kavanagh, the lawful Registered owner of those Brands.(2)The disposal of any assets of the Estate of Mary Flynn which may have been due to Hugh Leo Kavanagh, as his share of the abovementioned Estate.(3)The Disposal by Stephen Joseph Kavanagh, or his Heirs and successors, of any share of any other Land, Cattle, Shares, Dividends or other items or assets which may have been due to Hugh Leo Kavanagh, or his Heirs and Successors.This agreement is subject to the following conditions:-(a)Mary Hilary Kavanagh shall pay to Michael Anthony Kavanagh, the amount of $250,000. (Two hundred and fifty thousand Dollars), in settlement of all the above.(b)Michael Anthony Kavanagh shall Purchase from Mary Hilary Kavanagh, the House and Land situated on the corner of Kavanagh and McGeary Roads, known as 1 Kavanagh Road Thagoona, formerly owned and occupied by the late Margaret and Bill O’Connell, for the sum of $200,000. (Two hundred thousand Dollars). This Property has an area in the vicinity of two thousand square meters.(c)Mary Hilary Kavanagh honours the previous Agreement, to bequest the House, Land and Contents of the House known as “Emerald View” to Michael Anthony Kavanagh, or his Heirs and Successors. This Property is within the boundaries of Kavanagh Road, to the North, McGeary Road to the West, Turnbull Road to the South, and the Property owned by the Turnbull Family to the East. This property has an area in the vicinity of 27 Ha.(d)Michael Anthony Kavanagh agrees not to contest or otherwise attempt to gain ownership of the Property, owned by Mary Hilary Kavanagh, known as “Byrnes”, situated South of Turnbull Road. This property has an area in the vicinity of 57 Ha.(e)I, Michael Anthony Kavanagh, agree, without reservation, that any other unresolved issues between the family of the late Hugh Leo Kavanagh, and the family of the late Stephen Kavanagh both in Money and Kind shall be wholly and totally settled under the terms of this agreement, and that Mary Hilary Kavanagh shall be totally absolved from any implication of responsibility for any of the aforementioned grievances.(f)I agree that the terms and conditions of this Agreement shall remain private and confidential, and, where possible, not be disclosed or become public knowledge.”

Ratio Decidendi

Legal Principle Established

For reasons set out under separate headings below, we conclude that to the extent that it is necessary to consider them, those arguments should fail. Accordingly, we agree with Davis J that the appeal should be dismissed with costs.Whether the Agreement was supported by sufficient consideration The effect of the Agreement was to provide for Michael to receive $250,000 in cash from Mary, for Michael to purchase Thagoona House from Mary for $200,000 and for Mary to bequest Emerald View to Michael in her will. During Mary’s lifetime, Michael received the $250,000 in cash from Mary and used $200,000 of that money to purchase Thagoona House from Mary. The cash payment and ‘sale’ of Thagoona House provided for by the Agreement was a ‘round-robin’ transaction which, in substance, amounted to a transfer by Mary of Thagoona House without any payment by Michael together with payment of an additional amount to Michael which could be used to cover transfer costs. The Agreement provided for Michael to receive, in substance, the benefit of a transfer of Thagoona House without payment and the bequest of Emerald View in Mary’s will. Under the Agreement, Michael accepted these benefits ‘in settlement of all monies and accumulated interest owed to me’ and agreed not to contest ownership of Byrnes. The only consideration to which senior counsel for Michael pointed in oral submissions to this Court was the forbearance by Michael in suing Mary on the historical complaints. Counsel accepted that all of Michael’s eggs were in that one basket and did not seek to identify sufficient consideration elsewhere in the Agreement. Counsel also accepted that, for forbearance in making a claim based on the historical complaints to constitute sufficient consideration, Michael must have held a subjective good faith view that he had a claim which he could enforce in court against Mary. Counsel accepted that there would be no sufficient consideration if Michael considered that Mary merely owed a moral obligation which could not be pursued in court. We accept the concession that, for forbearance of a claim to constitute consideration, the person must have a genuine belief in the existence of the claim.[1][1]See, for example, Wigan v Edwards (1973) 47 ALJR 587 at 594 – 595 per Mason J. The primary judge expressed the relevant principle in the following terms:[2]“Where a person bona fide believes that they have a fair chance of success in an action or a reasonable ground for suing, their forbearance to sue would constitute good consideration.[3] To put it another way, forbearance of a non-existing claim would not be forbearance at all.[4] It is only if an intending litigant bona fide forebears a right to litigate a question of fact or law which is not frivolous or vexatious to litigate, that they give up something of value.[5]” (emphasis added)[2]Kavanagh v Londy [2022] QDC 161 at [111], footnotes in original.[3]Callisher v Bischoffsheim (1870) LR 5 QB 449 at 452; Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 at 737.[4]Miles v New Zealand Alford Estate Company (1886) 32 Ch D 266 at 291.[5]Miles v New Zealand Alford Estate Company (1886) 32 Ch D 266 at 291; Alford v Ebbage [2003] 1 Qd R 343 at 353.