Northey v Juul & Ors [2011] HCATrans 57

[2011] HCATrans 57

[2011] HCATrans 057

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S215 of 2010

B e t w e e n -

HENRY JOHN NORTHEY

Applicant

and

JENNIFER FRANCIS JUUL

First Respondent

JAMES KNIGHT NORTHEY

Second Respondent

JOHN STEWART HUNTER & RICHARD JOHN BOOKER (AS TRUSTEES OF THE ESTATE OF THE LATE BETTY FRANCES NORTHEY)

Third Respondents

Application for special leave to appeal

GUMMOW J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 MARCH 2011, AT 12.01 PM

Copyright in the High Court of Australia

MR B.A.J. COLES, QC:   If your Honours please, I appear with MS R.N. WINFIELD for the applicant.  (instructed by Delwyn A. Bishop)

MR R.M. LOVAS:   If it please your Honours, I appear for the first and only active respondent.  (instructed by Murphy’s Lawyers Civil)

GUMMOW J:   There is a submitting appearance for the second and third respondents.  Yes, Mr Coles.

MR COLES:   If your Honours please.  Your Honours, the judgment in the Court of Appeal surveys a broad range, but your Honours will see at page 79 of the appeal book in paragraph 234, the principal judgment, when the Court records its conclusion in relation to allowing the appeal, that is to say, that:

the primary judge erred in concluding that there were any monies owing to the estate and that the first respondent had established an occasion of wilful default.

That is prefaced by reference to the foregoing reasons.  As I say, despite the breadth of the judgment, the foregoing reasons are in a relatively confined range.  Would your Honours then go back to those which commence at page 75 of the application book, particularly paragraphs following paragraph 222.  Can I deal with really the three observations I want to put to your Honours about those principal reasons, really, I suppose, in ascending order of their relative importance, starting with the third one in paragraph 226.  Your Honours will see at the top of page 77 of the application book the judgment recorded that –

the objective evidence supports the arrangement for which the appellant and Mr Juul contended, including the conclusion that the deceased was happy for the work to be carried out without requiring a detailed accounting or any refund.

May we simply draw attention to one important feature which, in our respectful submission, significantly undermines that conclusion, namely, the absence of the evidence.

GUMMOW J:   Which ground of proposed appeal are you addressing?  Looking at page 207.

MR COLES:   I think this one is picked up in – the proposed new grounds 2, 4 and 5, I think, your Honour.

GUMMOW J:   Sorry, what page?

MR COLES:   The short point to be emphasised there, your Honours ‑ ‑ ‑

GUMMOW J:   Page 207.  I am looking at the draft notice of appeal at page 206.  We are trying to find out what ground of appeal ‑ ‑ ‑

MR COLES:   Yes, there is a proposed ground set out, your Honour, that draws attention – it is paragraph 5 on page 2, that:

The Court of Appeal erred in holding that there was objective evidence supporting the conclusion the deceased was happy with the work –

I am sorry.  Your Honour was looking at ‑ ‑ ‑

GUMMOW J:   We have another document filed yesterday.

MR COLES:   Yes, that was only sent up yesterday, your Honour.

GUMMOW J:   Yes, I see.

MR COLES:   Can I say at the outset, your Honour, the draft notice of appeal ‑ ‑ ‑

GUMMOW J:   Which one in that document, Mr Coles?

MR COLES:   Ground 5, for present purposes, your Honour.

GUMMOW J:   Ground 5, I see.

MR COLES:   The short point – I am sorry, I will pause while your Honour reads it.

GUMMOW J:   This is all about the actual cost of work.  It does not immediately shout out as a special leave point.

MR COLES:   No, I will need to make good a couple of propositions before your Honours are ‑ ‑ ‑

GUMMOW J:   Are you pressing ground 7, for example?

MR COLES:   It does not raise any special leave question, your Honour.  If your Honours granted leave and granted the appeal, costs would fall into place.

GUMMOW J:   All right.  You continue, Mr Coles.

MR COLES:   Yes, but there is no special argument about ground 5 as a ground of application for leave to appeal, your Honour.  I am sorry, I was drawing your Honours’ attention, as I said, in reverse order, I suppose, to the reasoning and I have drawn attention to paragraph 226 at the foot of page 187, and to what was asserted to be the conclusion that –

the deceased was happy for the work to be carried out without requiring a detailed account or any refund.

The short factual proposition which we suggest seriously undermines that conclusion is the seeming absence of evidence that the deceased had been acquainted with the fact that she had, indeed, paid at least $144,000 more than the amount which had been expended by Mr and Mrs Juul on the building works.  In other words, absent any evidence which might have been forthcoming from those who gave evidence in the first respondent’s case that the deceased was acquainted with the detail of the – or of any information at all as to the actual cost of the work, then, in our respectful submission, a conclusion that she was happy with the outcome is somewhat.....then if I could take your Honours ‑ ‑ ‑

GUMMOW J:   This is not a particularly large estate, is it?

MR COLES:   It is not, your Honour.  There are, I think, seven persons involved in its distribution.

GUMMOW J:   It is a great pity that there has been so much litigation here.

MR COLES:   Your Honour’s observations are undoubtedly correct.  Could I shortly take your Honours to the next point because I do need to put some other matters to your Honour as to whether these circumstances could justify your Honours granting leave.  If your Honours go back to paragraph 225, your Honours see that one of the matters called into play to suggest that the deceased was not concerned about any matters of accounting is said to be, in paragraph 225:

the conversation to which Mr Juul deposed in the wilful default hearing that “in April 2001 we agreed that our agreement was finished and all parties were perfectly happy . . . The primary judge does not appear to have given that evidence any weight in the wilful default judgment.  Yet it was evidence which, in my view, indicated that to the extent there was any balance of the $515,000 when the renovations were complete, the deceased intended Mr Juul and/or the appellant to retain it.

Three short matters may be said about that.  Firstly, as the copy of the transcript I understand that was sent up to your Honours yesterday indicates, that evidence – and I do not know if your Honours have it and I will not strain to have your Honours take up time looking for it – but the short point is that that ‑ ‑ ‑

GUMMOW J:   We have it.  Page 73?

MR COLES:   Yes, it is the first question.  Your Honour will see the question asked and the response given and it is plain that the matter to which Mr Juul is said to have deposed is embedded in the material in the first couple of lines.  It is equally claimed, in our submission, that it is unresponsive, it was not objected to, and difficulties would attend both its form and its content.  Accordingly, we suggest, your Honour, that not only does the earlier point count, that is to say that this is all rather artificial in the absence of the deceased being made aware about the extent of what she had paid relative to the extent of the expenditure, but, in our respectful submission, it was inappropriate to ascribe error to the primary judge or to assert that he did not appear to have given that evidence any weight because, with respect, that was a matter which he was entitled to have regard to and he was entitled not to give it any weight and, in our respectful submission, for the very same reasons honour an appeal by way of rehearing. 

The proper course was for the Court of Appeal to take exactly the same approach.  It did not deserve weight and in the context of the state of knowledge shown to have been possessed by the deceased, it could not have, in our respectful submission, plausibly have supported the conclusion attributed to it.  Accordingly, the proposition for which it is said to support, namely, that the deceased was not concerned that there be a dollar for dollar accounting, is, in our respectful submission, undermined by appreciating those circumstances.  Then one comes to the conclusions expressed in paragraph 223 at the bottom of page 186 to 187 of the application book.  The conclusion appears at about line 9 of page 187, where:

A total figure of $515,000 was agreed to cover both aspects of the renovations.

That is to say, the cost of doing the work and the cost of managing and supervising it.  That conclusion, in our respectful submission, which is not attended by the exposition of any reasoning at all, in our respectful submission, it completely substitutes, it would appear, the conclusion reached by the trial judge.  He was invited to find, as we follow it, or he considered whether the conversations between the deceased and Mr and Mrs Juul produced a lump sum contract for a fixed price of $515,000 and for sensible reasons which were clearly articulated and discussed in his judgment, came to the conclusion that could not be so.  In our respectful submission, what the Court of Appeal has done really, in a line or a stroke, without subjecting the evidence to analysis by way of seeing where it led and by way of examining the conclusions which activated the primary judge’s decision, has simply ‑ ‑ ‑

GUMMOW J:   What do you say about Justice Basten’s reasons which to some degree stand by themselves?

MR COLES:   Yes.  We rely, your Honour, on that part of the application that draws attention to the fact that the cross-appeal was dismissed.  Our first observation about Justice Basten would be to indicate that what we particularly – I will just find the passage if I may, your Honour – we, in effect, embrace his observations at paragraph 255 at page 198 in connection with the inappropriateness of the trial judge at a later hearing or at the second hearing, the accounting hearing, embarking upon an account at the instance of the executors on the basis of a claim for just allowances, the just allowances being said to be or being asserted to be the value of the time and effort ‑ ‑ ‑

GUMMOW J:   He took the view the proceedings were improperly constituted, did he not?

MR COLES:   That is right, yes.  We agree with that, with respect.  We ascribe error to the learned trial judge in embarking upon the accounting, not simply because of the constitution of the proceedings, but we support the observation also that it could only be determined in circumstances where really the account was against somebody in a fiduciary relationship.  For example, Mr Juul was not entitled to defend an action for moneys had and received on the basis of just allowances and, in our respectful submission, that process miscarried.  We would however add, if your Honours please, that the insistence of the executors in pressing the claim for allowance for Mr Juul for just allowances goes some distance to supporting what we claim appears to have been their acceptance of the conclusion reached by the primary judge as to the proper construction of the oral contract between the deceased and Mr and Mrs Juul or Mr Juul, as the case may be.

Seemingly, if your Honours please, a number of matters went wrong or miscarried and the outcome is unquestionably then unfortunate.  I have not and I will not take your Honours to the particular conversations, but, in our respectful submission, a fair reading of them reasonably suggests that there was no area at all in that this Court would readily enough come to the same conclusion about the provision or estimated nature of the evolution and the significance of the figure of $515,000.  In other words, it was not and could not reasonably have been found to be a lump sum contract orally

made for that fixed price.  Your Honours have read the material, we do not to take your Honours through it to make good that point.

Where does this then lead, your Honours, in point of attracting a grant of special leave?  Plainly, I do not point to any matter of transcending public importance or any matter of significance, with one possible qualification, evolution in the development of the law or matters of that kind.  But it is apparent, in our respectful submission, that the outcome of the proceedings on the basis of the reasoning which we have respectfully criticised in the paragraphs to which I have taken your Honours can be seen – we respectfully invite your Honours to consider – to amount to a significant injustice to the beneficiaries of the estate on whose behalf the applicant has brought the proceedings. 

Sufficient, we invite your Honours to conclude, to justify the intervention of the Court and we would add no more than this, that if but only if that intervention succeeded and leave were granted, it would generate or agitate necessarily a consideration of the matters urged in the cross-appeal and that would call attention or into call into perhaps focus the not unimportant issue of just allowances and the appropriateness and role that the evaluation of entitlements to them may place or may carry in the process of taking accounts in an equity proceeding.  Those are our submissions in the application, if your Honours please.

GUMMOW J:   Thank you.  We do not need to call on you, Mr Lovas.

We are not satisfied that there are sufficient prospects of success in displacing the reasons given in the New South Wales Court of Appeal by Justice Basten to warrant a grant of special leave.  In particular, we do not see that any question of principle emerges on this application.  The application is refused with costs.

AT 12.19 PM THE MATTER WAS CONCLUDED