Northey v Juul - [2008] NSWSC 275

No judgment structure available for this case.

CITATION: Northey v Juul [2008] NSWSC 275

HEARING DATE(S): 20/08/07 - 23/08/07. 03/12/07

JUDGMENT DATE :
1 April 2008

JURISDICTION: Equity Division

JUDGMENT OF: Macready AsJ at 1

CATCHWORDS: Succession - Executors and Administrators - Proceedings against executors. Accounting on basis of wilful default. Nature of just allowances. Allowance to executors of just allowance for work done by one executor's husband during lifetime of deceased.

PARTIES: Henry John Northey v Jennifer Frances Juul and James Knight Northey (Estate of the late Betty Frances Northey)

FILE NUMBER(S): SC 4408/2004

COUNSEL: Mr J Wilson SC and Miss R Winfield for plaintiff
Mr R Lovas for 1st defendant
Ms J Baxter for 2nd defendant

SOLICITORS: Delwyn A Bishop for plaintiff
Wood Marshall Willams for lst defendant
Small Business Legal Services for 2nd defendant

LOWER COURT JURISDICTION: Compensation Court

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Associate Justice Macready

Tuesday 1 April 2008

4408/04 - Henry John Northey v Jennifer Frances Juul and James Knight Northey (Estate of the late Betty Frances Northey)

JUDGMENT NO 2

1 His Honour: On 16 September 2005 I gave judgment in these proceedings and ordered that there be an accounting by the defendants as executors of the late Betty Francis Northey. As I mentioned in my judgment in the earlier proceedings the hearing concerned the proper administration of the estate of the late Betty Frances Northey who died on 7 December 2003 aged 90 years. Her husband died in 1996 and the deceased was then left with a large run down house and some unused tennis courts. She decided to stay in the house and to subdivide the tennis courts in order to provide, in part, the funds needed to renovate her house.

2 The renovations were done with the help of her daughter, Jennifer Juul, the first defendant and her husband who was a former builder. Mr and Mrs Juul were to pay all the costs of the subdivision and to receive one block in the subdivision for their efforts. Over the ensuing years three blocks were sold and the funds received were used in part to renovate the deceased’s house.

3 The deceased had seven children and she treated them equally under her will. The defendants, two of her children, are the Executors. As I mentioned in my judgment she appears not to have told some them of the arrangements she had made with Mrs Juul and her husband and this has unfortunately split the family after her death. The plaintiff, one of the deceased’s children, brings these proceedings on his behalf as well as two of his sisters and a brother.

4 In the proceedings the plaintiff, Mr Henry John Northey, asked the court to order the taking of accounts in the estate of the deceased and he suggested that this accounting be on the basis of Mrs Juul’s and her co-Executor’s wilful default in getting in the estate of the deceased. The estate, which he said was not got in, is the amount that he suggested is due by Mrs Juul and her husband following the completion of the renovations to which I have referred.

5 In my judgment I indicated that I would make an order for the taking of an account on the basis of wilful default in respect of the construction of the house and that an account be taken of the rest of the estate in common form with liberty to apply in respect of any further wilful default being identified.

6 On 27 September 2005 I made directions which included:

(i) the property comprised in the Estate of the late Betty Frances Northey Deceased; and

(ii) of all dealings and transactions of the Defendant therewith.

(c) What amount is owed to the estate of the late Betty Northey.

………………………………………”

7 I reserved the costs of the hearing for further consideration after the taking of the account.

8 Pursuant to the first and third directions, the first defendant filed her affidavit dated 28 November 2005 in which she sets out a chronological table of 533 items being the moneys received and disbursed by Mr and Mrs Juul in respect of the renovations carried out at 62 Rose Ave, Wheeler Heights.

9 By way of totals, those items reveal: Affidavit, Jennifer Frances Juul, 28.11.05, page 21.

10 The plaintiff responded to this evidence by serving a “Notice of Surcharges and Falsifications” dated 3 February 2006 in which issue was taken with most of the 533 items. The plaintiff made no allegation of any surcharges. All the allegations are allegations that the disputed items are falsifications. That is, in this context, the plaintiff alleges that the disputed items were wrongly inserted and ought not to be charged against the $515,000.00 advanced by the deceased to Mr and Mrs Juul.

11 At this stage it is probably useful to set out a little of the history which I included I my earlier judgement so that matters can be put in context.

Chronology

12 The deceased, Betty Frances Northey, was born in 1913. She married James Henry Northey and they had seven children. Her husband died on 30 July 1996.

13 In late 1996 Mrs Juul and her husband said that they had a conversation with Betty Northey about the subdivision of the large property which she then owned and a renovation of her house. After looking at alternative accommodation Betty Northey decided that she would prefer to continue living in the house where she had lived with her husband. According to Mrs Juul and her husband there was an estimate for the cost of renovating the house at $515,000.

14 On 24 February 1997 Betty Northey and Mr and Mrs Juul entered into a Deed which provided that Mr and Mrs Juul would do all the work necessary at their expense to enable a subdivision of the property into five allotments. In return they were to receive one of the lots in the sub-division. The Deed itself provided that deceased appoint Mr and Mrs Juul as her Attorneys to sign any documents and, in addition, Betty Northey gave a separate power of Attorney to Mrs Juul. Between mid 1997 and April 2001 substantial renovations took place to the deceased’s property at 62 Rose Avenue, Collaroy, which was situated on Lot 55 in the new subdivision.

15 In September 1997 Mr and Mrs Juul borrowed $460,000 secured on other properties they owned to commence the subdivision and the renovation work on 62 Rose Avenue, Collaroy.

16 On 2 February 1998 Lot 52 in the subdivision was transferred to Mr and Mrs Juul in accordance with the arrangement set out in the Deed. The transfer was stamped on the basis of a value of $175,000 being the consideration for the transfer. The deceased personally signed the transfer.

17 It seems that the subdivision was finally approved in September 1998. In October 1998 Lot 54 was sold to a Mr and Mrs Webster for $320,000, which amount, was paid to the deceased. Mrs Juul, as Attorney for the deceased, signed the transfer to the Webster’s. On 28 October 1998, in what Mr Juul said was a discussion between him and the deceased, the deceased indicated that she wished to pay him $250,000 for the work he had done. The deceased went to the Commonwealth Bank and withdrew $250,000 and paid it to him on 30 October 1998. According to Mrs Juul her husband did not tell her about this withdrawal until December 2004.

18 Between October 1998 and October 1999 Mr and Mrs Juul constructed two townhouses on Lot 52 which became known as 62B Rose Avenue, Collaroy. They were let in October 1999.

19 In January 1999 Lot 53 was transferred to Mr and Mrs Briggs for $305,000 which was paid to the deceased. Mrs Juul, as Attorney for the deceased, signed the transfer to the Briggs. A few days later, on 24 February 1999, the deceased withdrew amounts of $165,000 and $100,000 and paid them into Mrs Juul’s accounts.

20 On 9 April 2003 Lot 51 in the subdivision was transferred to Gaetan Juul, the son of Mr and Mrs Juul for $300,000. The duty paid indicates a value of the property at that time for stamp duty purposes of $475,000. The purchase price of $300,000 was paid into the deceased’s account on 28 April 2003. The deceased personally signed the transfer. In my judgement I found that this did not constitute wilful default by the executors.

21 Betty Northey died on 7 December 2003 and at that stage she had in her bank accounts sums totalling $341,503.75. She still retained Lot 55 which was her home 62 Rose Avenue, Collaroy. That property was at the time of the earlier hearing on the market for sale by the Executors for a price in excess of $900,000.

22 By the time of the hearing the cash had been distributed by an equal division between the deceased’s seven children pursuant to the terms of her will.

The accounting

23 It is the Executors who have to account not Mr and Mrs Juul although they both gave evidence. In this respect the second defendant took different positions during the hearing. Initially he supported the plaintiffs’ case. Notwithstanding opportunities to do so he did not seek to file any cross claim seeking indemnity from Mrs Juul his coexecutor.

24 The following issues arose in the accounting.

1. Items said to be not relevant to the building work,

2. The claim by the executors for a just allowance for work done by Mr Juul,

3. Cash payments for which vouchers were not held,

25 The defendant sought that I make different findings as to the conversations between the deceased and Mr Juul based upon new evidence. Before dealing with these matters I should deal with the attack on Mr Juul’s credit.

Mr Juul’s credit

26 In the earlier hearing I said that Mrs Juul was apprehensive as a witness and somewhat argumentative when giving her evidence. On the other hand I said that I found Mr Juul calm and dispassionate and he seemed to give his evidence as accurately as possible. I noted that he gave his evidence on the basis that he appreciated that they had only justified part of the expenditure of $515,000.

27 The plaintiff’s submissions referred to the following matters on this aspect:

“(a) the inclusion of items of expenditure in the statement of disbursements which clearly do not fall within the terms of the direction made on 27 September 2005. Illustrations of this category are the expenditures on council rates, water rates and telephone accounts as well as purchases of furniture and household appliances;

(b) the inclusion of items in the statement of disbursements of items of expenditure said to have been incurred in respect of the deceased's home but the invoices for these expenditures were located in the subdivision file (Ex 4);

(c ) misdescription in the statement of disbursements and in Ex A of the goods the subject of the disbursement;

(d) Mr Juul's explanation as to how he was able to reproduce in Ex C copies of invoices which were in the subdivision file which he said had not been in his possession since September 2005 (Transcript p128 line 26 to p130 line 4);

(e) Mr Juul's explanation for the inclusion in the building application to Warringah Council and the application to Sydney Water of the cost of the works at $80,000. The cost of the works estimated in these documents is impossible to reconcile with his evidence that he informed the deceased the work would cost $515,000.”

28 On the first matter the parties seem to have overlooked the fact that there were two accountings ordered in the matter. See the terms of the directions made on 27 September 2005 set out above. The affidavit of Mrs Juul of 28 November 2005 by which she gave her account seems to pick up this difference. Para 4 was as follows:

“4. The writing within contains a full, true and just accounting of

a) all moneys received and disbursed by Ole Juul and myself or any person on his or my behalf in respect of the renovations carried out to the real property of the Deceased at 62 Rose Avenue, Wheeler Heights by the said Ole Juul and or me from 1996 to date;

b) all dealings and transactions of the said Ole Juul and myself or either or us in relation thereto.”

29 The words “in relation thereto” could be a reference to the particular property. I do not think this affects Mr Juul’s credit.

30 As to the third matter it is plain that Mr Juul has on occasion been wrong in his recollection and description. However in many of the challenges to his evidence on individual items he was able to give cogent reasons for his descriptions. Given the number of items I do not think that these errors detract from the viewwhich I had earlier formed of his credibility.

31 With regard to the subdivision file Mr Juul’s evidence was to the effect that he did not have those documents in his possession at the time of the hearing. He did not know what had happened to those documents other than recalling that they had been used as evidence in Court (in the 2005 hearing). The documents had not thereafter been returned to him and he had not seen the file in a long time. He did not compile the file as it now appears. Its present appearance is not his doing.

32 The evidence is that since Mr Juul last had possession of that file the chain of custody included Mrs Juul’s former solicitors, counsel for the plaintiff and Mrs Juul’s present solicitors. It is true that Mr Juul had no explanation for how copies of the originals of invoices which now appeared in the subdivision file, were included in ex C which was prepared when he said he had no access to the subdivision file.

33 There may be a number of explanations but it would be speculation to say how it occurred without some positive evidence about the state of and the disposition of the file over the relevant years. In the absence of such evidence I would not draw any adverse inference.

34 On the last matter it is plain that the figure of $80,000 is irreconcilable with the total cost of construction and renovation.

35 The reference of $80,000.00 in Ex C, document 53 did not take into consideration the renovation work, only the construction work (by which is meant the extensions to the existing house). The estimate came from the architect and was adopted by Mr Juul. The evidence as to how the decision was arrived at appears at T 64.52 to T 65.15. and it is plain that Mr Juul was prepared to take a piece of advice that he did not believe as a figure to put in to the paperwork in order to get the plans through Council.

36 This does reflect on his credit but I am still left with the view that he was trying to give his evidence before me in an accurate and reliable way. On occasions he made concessions and he was endeavouring to be helpful in his evidence.

The nature of the evidence on the accounting

37 The nature of the documentary evidence was helpfully set out in the plaintiffs’ submissions that I will incorporate with some amendment.

38 The affidavit of Jennifer Frances Juul sworn 28 November 2005 annexed a 19-page statement of disbursements in respect of expenditure on renovations to and building work carried out at the property at 62 Rose Avenue, Collaroy Plateau ("62 Rose Avenue") owned by the deceased. Although the Mrs Juul annexed the statement of disbursements to her affidavit, her oral evidence discloses that she was not involved in the preparation of the statement and had no detailed knowledge of the basis upon which disbursements were claimed.

39 The statement of disbursements and itemised expenditures on 62 Rose Avenue totals $383,091.87. The statement of disbursements also records a labour cost of $137,445 for the time spent working on or at 62 Rose Avenue by Mr Ole Juul. The deceased in fact made no payments to Mr Juul on account of the time he expended on renovating the deceased’s home.

40 The evidence supporting the statement of disbursements is contained principally in the affidavit of Ole Juul sworn 26 October 2006. There are a number of documents exhibited to this affidavit (OJ-1A, OJ-1B and OJ2 to OJ6) which became exhibits in the proceedings being respectively exhibits A to G.

41 The scheme behind the documents exhibited to Mr Juul's affidavit sworn 26 October 2006 was usefully summarised by the plaintiffs’ as follows:

42 The deceased took out an owner builder’s licence and nominally undertook the building work at 62 Rose Avenue. Her involvement in the work was limited to discussions with Mr and Mrs Juul. Mr Juul organised the work, supervised tradesmen, purchased materials, organised contractors and personally carried out some work.

43 So far as the onus of proof is concerned the plaintiff bears the onus of proving the allegations of falsification in the Notice of Surcharges and Falsifications. See Pit v Cholmondeley (1754) 2 Ves Sen 565 at 566; 28 ER 360:

44 However in respect of that part of the accounting where it has been directed to be conducted on a ‘wilful default’ basis the onus is on the accounting parties: Glazier v Australian Men’s Health (No 2) [2001] NSWSC 6 at [42].

Items said to be not relevant to the building work

45 This category relates to items such as council and water rates, which as the plaintiffs’ point out, do not relate to the actual renovation of the house in question. It was conceded that if Mr and Mrs Juul paid expenses on behalf of the deceased they could claim as creditors of the estate. It was submitted that they could not support their claim to retain the $515,000 by producing documents proving the payment of liabilities of the deceased that are in no way related to the purpose for which amounts totalling $515,000 were advanced.

46 However as I have pointed out the accounting is somewhat wider than that envisaged by the plaintiff’s submissions and provided the amounts fall within order 1 of 27 September 2005 they are allowable.

47 Having regard to the proof available including cheque butts the following items objected to by the plaintiff should be allowed. For rates and the like. Items 1, 2, 5, 9, 12, 54, 68, 72, 88, 109, 167, 173-176, 178, 180-181, 186, 199, 268, 302, 413, 433, 510, 511, 517.

48 In respect of items of household goods and furniture having regard to the proof available and the likely recollection of Mr Juul for particular items the following items objected to by the plaintiff should be allowed. Items 3, 4, 70, 91, 103, 140, 225, 249, 253, 255, 256, 300, 405, 438, 442, 467.

49 In respect of the other items area the items objected to by the plaintiff are not allowed.

The claim by the executors for a just allowance for work done by Mr Juul

50 There is a claim in the accounting for work done by Mr Juul on the deceased’s house. The claim is formulated by reference to the number of hours he worked on the house.

51 At the time the work commenced Mr Juul was being paid for his work as a paramedic on a contract basis and he kept in diaries records of the time which he worked on particular contracts. When work on the subdivision and renovations started he extended these diaries to include the time that he spent on these projects. He kept these diaries from 1997 onwards and he would update the diary every few days. In 2001 he transferred the handwritten diary on to a computer and he has reproduced that information in a document which became AJ5 and exhibit F before me. The document sets out in tabular form when he was in Australia and out of Australia or travelling from Australia to his overseas work. He then records the hours he worked on particular days on the subdivision, for 62B Rose Avenue which was his own duplex and 62 Rose Avenue which was the deceased’s house. The hours referred to in this document were then transposed by him into OJ-1A at the rate of $65 per hour with a description of the work which was from his memory. The actual hours claimed tallied with his contemporaneous records which were transmitted on to the computer in 2001. Also included in OJ-1A are travelling times when he spent time sourcing materials. His estimates for these were calculated at the Australian Taxation Office approved rate of a 2 litre engine car. On some days he made several trips to suppliers but he only made one calculation which was one trip to include all suppliers.

52 As I have mentioned the rate was $65 per hour and the total claim including travelling was $139, 057.82.

53 In my earlier judgment I set out the affidavit evidence given by Mr and Mrs Juul at paragraphs 32 to 35. I accepted that evidence and expressed my conclusion at paragraphs 46 to 47 in these terms:

It seems apparent to me that having given consideration to the conversations between the deceased and Mr and Mrs Juul they do not disclose any agreement that Mr and Mrs Juul would do the work for a fixed price. What in fact was happening was that Mr Juul was agreeing to assist with the work and that his best estimate of what it would cost the deceased was around $515,000 and that this would be covered by the sale of the two blocks of land.

There is nothing in the conversation with Mr Juul to indicate that he was to be reimbursed for his time and effort. In the conversation with Mrs Juul there is a reference to him being paid for the work although that is expressed more as a hope. Certainly there was no agreement on the basis of that conversation with the deceased that she would reimburse Mr Juul for the time he spent organising and supervising the work.

54 The matter came back before me and further evidence was given by Mr Juul as follows. He gave evidence of a discussion about whether or not the deceased would have to move from her house while the renovations took place. His evidence continued in his affidavit as follows:

55 The plaintiff submitted that there was an issue of estoppel arising out of my earlier findings and that the later evidence should not be accepted. In Blair v Curren (1939) 62 CLR 464 at 531-533 Dixon J formulated issue estoppel in the these terms:

A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.

Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of ColeridgeJ. in R. v. Inhabitants of the Township of Hartington Middle Quarter [139] , at p. 293], the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.

In the phraseology of Lord Shaw, "a fact fundamental to the decision arrived at" in the former proceedings and "the legal quality of the fact" must be taken as finally and conclusively established ( Hoystead v. Commissioner of Taxation [140] ). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation.

56 The first defendant submitted that the proceedings before 2005 were in the nature of an interlocutory application and it was not a final determination. Reference was made to what was said in Nevill and Ashe, Equity Proceedings with Precedents (NSW) (Butterworths, Sydney, 1981) at [301] where the authors explained:

"In Equity it is often the case that the proceedings cannot be completely disposed of or finally determined until certain accounts or inquiries have been taken or made. They are usually alternative remedies although an inquiry is often necessary in an administration proceeding for account. The need for accounts arises where between the parties there is a liability to account. After the account or enquiry is concluded further considerations may be given in the proceedings. An order for account or enquiry is therefore a necessary preliminary before the rights and interests of the parties can be ascertained with any accuracy in respect of the subject property. Usually the account is a procedure to ascertain the monetary dealings of the parties in respect of the subject property and to determine with precision the balance due between them. After the balance is ascertained orders are made as to the rights of the parties to that balance.”

57 Although the authors are no doubt correct in that accounts or inquiries may have to be taken before the extent of each party’s rights and obligations are finally crystallised, it would be taking it too far to suggest that a hearing in which a plaintiff obtains an order for inquiries or account is “wholly interlocutory in character”. This is because by considering whether to order such a remedy and in particular whether to award an order for account of administration in common form or on the basis of wilful default, involves matters of judgment and ultimate findings of fact.

58 This is made clear at [25-025] of Meagher, Gummow & Lehane: Equity Doctrines and Remedies (4th ed, LexisNexis, Sydney, 2002) where the authors note:

“In any case where a plaintiff seeks the remedy of an account, he must prove, inter alia, that the defendant is an accounting party, and that he, the plaintiff, is entitled to some sum from the defendant, although he is uncertain what is the quantum of that sum. He must do more than demonstrate that he might be owed some money, or that he wants, as it were, to have a kind of general discovery. The locus classicus in this regard is the judgment in Doss v Doss (1843) 3 Moo Ind App 175 at 196-7; 18 ER 464 at 472 by Dr Lushington, who said:

It is also fit to state, that in the course of these proceedings, issues were asked for on the part of the Appellants to try the validity of the Will and the Deeds.

Again, it must be remembered that the Decree cannot stand unless it be first clearly proved that the Appellants are, if anything should be found due to the Respondents arising from the acts and dealings of Ramchund, liable to answer that demand; we cannot make a Decree, ordering them to account, without first determining that they are liable to pay if anything be found due.
A Decree for an account is not, as appears to have been assumed, a mere direction to inquire and report. It proceeds, and must always proceed, upon the assumption that the party calling for it is entitled to the sum found due. It is a Decree affirming his rights, only leaving it to be inquired into how much is due to him from the party accounting.”

This has been applied by Wanstall J in Prapid Metal Developments (Austrlaia) Pty Ltd v Rosato [1971] Qd R 82 and Drummond J in Re Sharpe (Fed C of A, Drummond J, 11 December 1992, unreported).”

59 Whether there is an issue estoppel will depend upon whether the issue which I decided was fundamental and necessary for my earlier decision. If it was not and can be characterised as collateral no issue estoppel will arise. See Spencer Bower, Turner and Handley, The Doctrine of Res Judicata (3rd ed, Butterworths, London, 1996) at [201].

60 The actual issue which is of concern is my conclusion at para 47 of my earlier judgment which I have set out above at para 53.

61 My conclusion as to liability is set out at para 50 of my earlier judgment which was in these terms:

“The was much debate before me as to whether or not all the expenses set out in Schedule D to Mrs Juul’s affidavit were incurred in the renovation or other matters. I have had no submission on what ultimately flows but it is plain having regard to the course of cross-examination and the subsequent non-objection to its tender, that prima facie the upper amount expended by Mr and Mrs Juul was $370,839.62. It is also apparent from my conclusions above that there was no agreement to pay Mr Juul for his time and effort although plainly he did spend a lot of time doing what the deceased had requested. In these circumstances Mr and Mrs Juul are obliged to account to the estate for the difference between $515,000 and the amount spent and this amount will be at least $144,160.38. This is subject to a question which has not been debated before me and that is whether on the taking of the accounts there should be a just allowance for the work involved in assisting with the renovation. This may raise question of whether there was any fiduciary relationship at the time. The extent of any such just allowance cannot be determined on the present evidence.”

62 It is plain that my conclusion in para 47 was a fundamental part of my reason for decision. In these circumstances I should reject the new evidence of Mrs Juul. Although this disposes of this aspect I also mention for completeness the other objection.

63 The second objection to this evidence was formulated by the plaintiff in these terms:

(a) there is no explanation of why this evidence was not led at the hearing in August/September 2005;
(b) the conversation was first referred to after the judgment had flagged the difficulty with Mr Juul's claim for his time said to have been spent on the work;
(c) there is not one item of supporting evidence for the conversation;
(d) the evidence is inconsistent with the case presented by Mr and Mrs Juul at the first hearing which was that they had an agreement with the deceased that they would receive $515,000 for the work which had been discussed.

64 It is correct that there is no supporting evidence for the conclusion and in my earlier judgment I referred to the difficulty in accepting evidence given of conversations with deceased persons. I do not think that the new evidence is inconsistent with the earlier evidence. It is a further explanation for how a particular figure was determined, namely, the per metre rates upon which Mr Juul based his calculations.

65 There is a natural suspicion in accepting this evidence as it is plain from my earlier judgment that I concluded there was not an agreement about payment for Mr Juul’s time. Although it may be described as opportunistic, given the view I formed of Mr Juul’s credit, I would have been prepared to accept that the conversation with the deceased occurred. What effect the conversation has is another matter.

66 In the present case the claim by the Mrs Juul is that a just allowance ought to be made by the Court for the time and effort which the deceased asked to be carried out by Mr Juul for her benefit. A just allowance if allowed would be for the benefit of the two executors who are now responding to the claim for an accounting.

67 In Dale v Sollet (1767) 4 Burr 2133; 98 ER 112 the court was concerned with an action for money had and received for the plaintiff’s use. The defendant, a ship broker, acted as the plaintiff’s agent in recovering a sum of 2000 pounds for damages done to the plaintiff’s ship. Of this sum he retained 40 pounds for his labour. The jury found this was a reasonable allowance. At the trial the plaintiff had objected that a reasonable allowance was not available but that a set-off should have been pleaded. The argument was successful subject to the opinion of a higher court.

68 It was held at p 43 by Lord Mansfield with the concurrence of two other judges that:-

“This is an action for money had and received to the plaintiff’s use. The plaintiff can recover no more than he is in conscience and equity entitled to: which can be no more than what remains after deducting all just allowances which the defendant has a right to retain out of the very sum demanded. This is not in the nature of a cross-demand or mutual debt: it is a charge which makes the sum of money received for the plaintiff’s use so much less”

69 In Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676 in a discussion of the remedy, Lord Mansfield stated (at 1010; 679) that a party sued for moneys had and received for the plaintiff’s use

“can be liable no further than the money he has received; and claim every equitable allowance;…he may defend himself by every thing which shews that the plaintiff, ex aequo & bono, is not intitled to the whole of his demand, or to any part of it.”

70 “Just allowances” has a long history being referred to in Lord Provost of Edinburgh v Lord Advocate (1879) 4 AC 823 as including everything which the court might think just and proper. There is a useful discussion of the principles in Kalyk v Whelan a decision of Justice Bryson (unreported 31.8.88). There His Honour said:-

Boardman v Phipps

Re Jarvis Dec'd

Boardman v Phipps

Beatty v Guggenheim Exploration Co

71 The issue of just allowances has most commonly arisen in cases were an individual or third party has made a profit from conducting a business that was predicated upon a breach of fiduciary duty. However it is not limited to this situation and the principle has broader application: Duggan v Yuile (Unreported, NSWSC, 17 November 1995, Simos J). This can be seen from rationale that has been cited in the cases dealing with breaches of fiduciary duty. In Warman International Pty Ltd v Dwyer (1995) 182 CLR 544 for example, the High Court at 561 in granting an allowance stated that they were doing so because equity must always be moulded to the facts of the case and that it “should not be transformed into a vehicle for the unjust enrichment of the plaintiff”.

72 A similar point was made by Spigelman CJ in Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 at 311 where his Honour noted that:

“Equity is concerned with the conscience of both parties, so that a balancing exercise is always required…..On the one hand, it is oppressive to impose burdens on a defaulting fiduciary which go beyond any benefit that he or she has received or any detriment suffered by the beneficiary. On the other hand, it is not just for a beneficiary to receive a benefit in the nature of a windfall not reflecting any detriment suffered or benefit which the beneficiary ought to have received.”

73 In areas of testamentary law this is of most commonly manifested in the rights of executors to recover expenses properly incurred by them in improving the estate: see see Re Walden (1903) 3 SR (NSW) 375. This will include expenses properly incurred by an executor in engaging a third party to perform such work: Re Bennett [1896] 1 Ch 778. If the beneficiaries were able to take the benefit of such works without providing allowances it would, in effect, be granting them a windfall at the expense of the executor, an unjust enrichment which Courts have not been willing to countenance.

74 There is no doubt that Mr Juul did a substantial amount of organising and building work himself to complete the renovations of the deceased’s house. The fact that such work came about was because of the familial relationship between Mr and Mrs Juul and the deceased. It was because he was the deceased’s son-in-law that he was prepared to do the work for the deceased and no doubt for his wife who became an executor. It is a situation where an executor was instrumental in having her husband, through familial ties during the deceased’s lifetime, carry out extensive work for the deceased.

75 These circumstances indicate that in the present case it is appropriate that there be a just allowance for the work undertaken by Mr Juul. If such an allowance is not made the plaintiff and the other beneficiaries will receive a windfall gain which the deceased did not intend to occur. The deceased did not expect Mr Juul and his wife to repay any part of the sums paid. I do not the regard the conversation with the deceased, even if it did amount to an agreement and was admissible, as binding in the determination of what amount should be allowed. That is a matter for the Court to determine.

76 In the present case there is evidence from Mr Clifford Ventris, a Chartered Quantity Surveyor. He gave the appropriate rate for the relevant years in 1999 according to the Rawlings Cost Guide which was about $50 per hour. Given that this was when the arrangement was made it seems to me that the just allowance for the hours worked should be based on $50 per hour as being a reasonable rate. The allowances claimed by Mr Juul for travelling allowances seem to be reasonable and should stand.

77 Both the executors are jointly liable for any amount found to be due. As there has been no cross-claim brought by the second defendant against the first defendant for indemnity I do not express a view about what might happen on this aspect if such a claim were made.

78 The second defendant made reference to the terms of s 10 of the Home Building Act 1989 which is in the following terms:

10 Enforceability of contracts and other rights

(a) in contravention of section 4 (Unlicensed contracting), or

(b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6 (2)), or

(c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph,
is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.
(4) This section does not affect the liability of the person for an offence against a provision of or made under this or any other Act.”

79 It is plain that Mr Juul was an unlicensed builder. The prohibition in the section denies the right to damages or to enforce any other remedy for breach of contract. This has not happened in the present case. What has happened is that a Court is determining whether the executors are entitled to a just allowance for work which by their own efforts they procured for the benefit of the deceased and her estate. In my view the section does not apply to the present situation.

Cash payments for which vouchers were not held

80 The first of these relates to a series of cash payments made by Mr Juul to his father who he engaged on the site to do building work. His father was a builder in Denmark and had appropriate skills. He died in 2002 before these proceedings were commenced.

81 I accept that he did work on the building but there is a total lack of documentation which would support any drawing of cash funds to pay his father. In these circumstances I do not allow these items.

82 Item 529 concerns a charge for plumbing. Mr Juul has no records for this and the plumber has not been called. He declined to assist but he could have been subpoenaed. Some of his other charges have been allowed but given the absence of evidence as to precisely what this covers I do not allow this item.

83 Item 330 is another cash payment but evidence is given by Mr Juul as to the work involved. Given that it was only one job I think it likely that Mr Juul’s recollection is correct. I allow this item.

84 Item 532 relates to the supply and erection of steel beams. It is a cash payment and as it was only one job I think it is likely to be remembered by him. I allow this item.

85 Item 533 relates to removal and supply of windows doors and balustrades. It was a large item done over different periods. Mr Juul has no means of saying when and in what amounts he made payments and the supplier could have been subpoenaed to give evidence. Apart from evidence of work, which he has given, I do not accept that Mr Juul has any independent recollection of the amount or progress payments. I do not allow this item.

86 Item 531 is for waterproofing work done by this company. Mr Juul has no independent recollection of the time or amount of payment. I do not allow this item.

87 Item 460 relates to the purchase of lights. There is no documentation and given an absence of recollection by Mr Juul. I do not allow this item.

88 Item 240 relates to some roofing work. There is evidence of the work and one payment was in cash. Given it was a one off job I accept that Mr Juul has a recollection. I allow this item.

Items that were not identified or not sufficiently identified with the deceased’s property

89 Items 310 and 414 are payments to Classic Australian Homes. Having regard to the cheque butts I allow these items.

90 Item 129 is for a number of payments in cash or perhaps one cheque for various items. Mr Juul has no independent recollection of the items or payments. I do not allow this item.

91 Item 301 is from the same builder and Mr Juul has no recollection of the individual items or payments. The builder could have been subpoenaed. I do not allow this item.

92 Item 148 is for concrete. There is an adequate explanation and a docket. This item is allowed as there is no proof of duplication.

93 Item 82. This is for hire of truck and is supported by docket and cheque. The evidence of Mr Juul is not disproved. I allow this item.

94 Item 110 is preparation for footings and is relevant to deceased’s house and is supported by docket and cheque. I allow this item.

95 Item 530 is for excavation. Although relevant there is no basis for Mr Juul to have a recollection. I do not allow this item.

96 Item 59 is for electrical work and is supported by cheque butt and evidence. I allow this item.

97 Item 177 is supported by documentation and is for electrical work. I accept that it was for the deceased’s house. I allow this item.

98 Item 251 is electrical work and there is evidence, which I accept, that it was relevant work and is supported by documentation. I allow this item.

99 Item 360 is electrical work and there is evidence that it was done on the house and is supported by documentation. I allow this item.

100 Item 412 is further electrical work. This is further work for the deceased’s house and is supported. I allow this item.

101 Items 357 and 469 are for plumbing and are supported by documentation. I allow these items.

102 Item 463 is for plumbing and is supported by a cheque butt. Given the date it would be for the deceased’s house. I allow this item.

103 Item 529 is a balance payment or payments for the plumber and I do not accept that Mr Juul would have a recollection of these payments. I do not allow this item.

104 Item 90 for blue metal. I am not satisfied that this was used for the deceased’s house. It may have been used for concrete for the subdivision. I do not allow this item.

105 Item 113 for concrete. The evidence does not satisfy me it was used for the deceased’s house. I do not allow this item.

106 Item 114 for sand and cement. The evidence is supported by docket which shows it was for the deceased’s house. I allow this item.

107 Item 119 for sand etc. I accept evidence it was used for the house. I allow this item.

108 Item 121 for concrete. I accept that Mr Juul has a recollection of this amount and the reason why it was for the house. I allow this item.

109 Item 125 for sand and cement. The evidence of Mr Juul is pure supposition. I do not allow this item.

110 Item 138 for wall stone. I am satisfied these were for the deceased’s house. I allow this item.

111 Item 144 for mesh. A one-off item not supported but would be for the house. On the evidence I allow this item.

112 Item 150 for concrete mix and 151 for a grate. I allow these items.

113 Item 153 for concrete mix. I allow this item.

114 Item 399 for concrete. Given the time the explanation is likely to be correct. I allow this item.

115 Item 480 for sand. One-off and given time likely to be correct. I allow this item.

116 Item 78 for building blocks and relates to the deceased’s house. I allow this item.

117 Item 116 for blocks. Applies to house and is supported in part. I allow this item.

118 Item 156 for blocks. Applies to house and is supported. I allow this item.

119 Item 197 for concrete cutting. Given the evidence of a minimum charge this is adequately proved. I allow this item.

120 Item 208 for structural timber. Given the date and nature of the materials this would be for the deceased house. I allow this item.

121 Item 260 for structural timber. Given the date and the recollection of Mr Juul this is for the deceased’s house. I allow this item.

122 Item 332 for structural timber. Given the date and the recollection of Mr Juul this is for the deceased’s house. I allow this item.

123 Item 337. Given the documentation and the recollection of Mr Juul and the date this is for the deceased’s house. I allow this item.

124 Item 404. Given the date and Mr Juul’s recollection this is for the deceased’s house. I allow this item.

125 Item 425. Given the date and the description by Mr Juul and his recollection this is for the deceased’s house. I allow this item.

126 Item 432 for the supply of windows by Stella. There is a lack of explanation by Mr Juul and a lack of documentation. I do not allow this item.

127 Item 17. This relates to two items being a bathroom cabinet for $358 and a spa for $985. The evidence shows that these items were requested by the deceased but she changed her mind and they were not installed. They remain in the estate. I allow these items.

128 Item 324 for software. This seems to have been retained by Mr Juul. I do not allow this item.

129 Item 497. PC items. There is an absence of documentation and a description this item. I do not allow this item.

130 Item 214 melamine timber for cupboards. It is apparent from the explanation this was used for the deceased’s house and is supported by documents. I allow this item.

131 Item 20 purchase of teak doors in Burma. Given the recollection of Mr Juul and the purpose I allow this item.

132 Item 133 tiles. There is no document for this item and it is apparent that Mr Juul has simply made an estimate rather than being able to recollect the actual purchase price. I allow this item.

133 Item 233 plasterboard. This is supported by documents which shows the address as the deceased’s house. I allow this item.

134 Item 397 plastering. Given the document and the date and the explanation this is for the deceased’s house. I allow this item.

135 Item 520. Given the documentation and the explanation this is for the deceased’s house and I accept Mr Juul’s explanation that the invoice was received some months later. I allow this item.

136 Item 94 fencing on the neighbour’s boundary. I accept Mr Juul’s recollection of this amount which was paid. It may be that there was some claim for the adjoining owner to pay half the cost but it was not for him to make that claim on behalf of the deceased. I allow this item.

137 Item 95 fencing. Given the document the payment and the evidence I accept this was for further similar fencing. I allow this item.

138 Item 184 garage doors. Given the documentation and the explanation by Mr Juul I accept this was for the deceased’s home. I allow this item.

139 Item 235 lighting. Given the explanation I accept the lighting was paid by Mr Juul. I allow this item.

140 Item 69 rain waste. I am not satisfied that this was for the deceased’s house. I do not allow this item.

141 Items 407, 428, 474, 507 and 509 for rubbish removal. Payments were made by Mastercard and given the dates this was for the deceased’s house. I allow these items.

142 Items relating to tools. There are a number of items for purchase of tools and equipment all of which were for building work which are objected to. In my view they should be allowed even if they were used on Mr Juul’s house. The documents adequately describe the tools. I allow these items.

143 Item 65 insurance. I am not satisfied this was for other than the subdivision. I do not allow this item.

144 I note that in submissions items 61, 85, 170 and 444 are allowed by the plaintiff and are not challenged. I allow these items.

145 The balance of the items are objected to under the heading Miscellaneous at page 33 of the falsifications and these mainly relate to advertising. I do not allow these items.

146 Other matters under the heading of allowances. I have already dealt with these elsewhere. They are item 198, 398 and 408.

147 On page 34 there is a heading Insufficiently Identified Items. The plaintiff concedes that an allowance should be made for items 191, 216, 287, 293, 322, 341, 345, 352, 366, 396, 411, 446. The plaintiff objects to the balance of the items because of lack of documentation or inadequate documentation.

148 Items 67, 77 and 105 are payments to Buildex and they describe work done by Mr Juul. There is evidence of payment either by cheque or by Mastercard and given the nature of the materials I accept Mr Juul’s explanation. I allow these items.

149 Item 160 for sand and cement. This is not clearly identified as being for the deceased’s house. I do not allow this item.

150 The balance of the amounts are a large number of items from various hardware stores which may or may not have been for the deceased’s house. Given the number of items I do not accept that Mr Juul could have an appropriate recollection. I do not allow these items.

151 There were objections to items 226, 245, 299, 317, 318, 378, 419, 441, 443 and 483. There was no description or dockets for these items. They appear to be various furnishing items. I do not accept that Mr Juul could have an independent recollection of these items. I do not allow these items.

152 As I have pointed out earlier there has been no cross-claim by the second defendant against the first defendant. In these circumstances the first and second defendant are jointly liable for any money that is to be repaid.

153 I direct the parties to bring in short minutes to reflect these reasons.

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Citations

Northey v Juul [2008] NSWSC 275

Most Recent Citation

Northey v Juul [2014] NSWSC 464

Cases Citing This Decision

2

Juul v Northey [2010] NSWCA 211

Northey v Juul [2014] NSWSC 464

Cases Cited

4

Statutory Material Cited

0

Glazier v Australian Men's Health (No 2) [2001] NSWSC 6

R v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8

CITATION:	Northey v Juul [2008] NSWSC 275
HEARING DATE(S):	20/08/07 - 23/08/07. 03/12/07
JUDGMENT DATE :	1 April 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Macready AsJ at 1
CATCHWORDS:	Succession - Executors and Administrators - Proceedings against executors. Accounting on basis of wilful default. Nature of just allowances. Allowance to executors of just allowance for work done by one executor's husband during lifetime of deceased.
PARTIES:	Henry John Northey v Jennifer Frances Juul and James Knight Northey (Estate of the late Betty Frances Northey)
FILE NUMBER(S):	SC 4408/2004
COUNSEL:	Mr J Wilson SC and Miss R Winfield for plaintiff Mr R Lovas for 1st defendant Ms J Baxter for 2nd defendant
SOLICITORS:	Delwyn A Bishop for plaintiff Wood Marshall Willams for lst defendant Small Business Legal Services for 2nd defendant
LOWER COURT JURISDICTION:	Compensation Court