Owens v Lofthouse - [2008] HCATrans 216

[2008] HCATrans 216

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M165 of 2007

B e t w e e n -
SUZANN JANET OWENS
Applicant
and
DAVID LOFTHOUSE (AS TRUSTEE OF THE PROPERTY OF SUZANN JANET OWENS, A BANKRUPT)
Respondent
Application for special leave to appeal

HEYDON J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 23 MAY 2008, AT 3.22 PM

MR C. TRUONG: Your Honours, if it please the Court, I appear with my learned friend, MR D.M. YARROW, on behalf of the applicant. (instructed by Margot Foster Lawyer)

MR S.P. GARDINER: I appear on behalf of the respondent, your Honour. (instructed by Aitken Walker & Strachan)

HEYDON J: Yes, Mr Truong.

MR TRUONG: Your Honours, our special leave point is this. We say that the 1920 High Court decision of CSD v Jolliffe was wrongly decided. That was Justices Duffy and Knox in majority in that decision. We say that primarily for two reasons. First, we say that only Justice Isaacs’ dissenting view in that decision is able to adequately identify and prevent the moral hazard of allowing someone who has undertaken a solemn undertaking from resiling from that undertaking later on. As Justice Isaacs said at 187:

It is just as improper morally to permit a man who has openly undertaken such a trust to escape his conscientious obligation by reason merely of a secret mental reservation not to fulfil what he has openly undertaken.

The effect of allowing the admission of evidence of Mr Jolliffe’s mental reservation was to allow Mr Jolliffe to declare himself trustee for his wife, which was for an illegal purpose of extracting additional interest under the relevant Queensland legislation, but which allowed Mr Jolliffe to resile from that declaration later on merely because he had that secret mental reservation, as Justice Isaacs put it. We say in a similar vein, a recent Privy Council decision of Choithram has held similarly to Justice Isaacs that it would be unconscionable and contrary to the principles of equity to allow a donor to resile from a gift.

Secondly, we say, your Honours, in our respectful submission, there appears to be an emerging jurisprudence, particularly in England, where courts have upheld the validity of trusts, namely, resulting trusts, even though the trust has arisen out of a legal transaction. The other reason why the courts in England have upheld such resulting trusts has been to prevent the putative trustee from obtaining the full fruits of a trust property at the expense of the putative beneficiary, and we cite and rely on the cases of Tinsley v Milligan and Lowson v Coombes in that regard, which are part of your bundle of authorities, your Honours.

We say with respect to this second reason, your Honours, particularly that the second reason provides or means that the basis upon which the High Court majority in Jolliffe is on an unsecure footing,…

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.

Keep reading for free

Create a free CaseChat account to read Owens v Lofthouse and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2008] HCATrans 216
Decision Date

CaseChat Overview and Summary

In *Owens v Lofthouse*, the High Court of Australia considered a dispute concerning the interpretation of a clause within a deed of settlement. The parties, Owens and Lofthouse, had entered into this deed to resolve prior litigation. The central issue revolved around whether a specific payment obligation under the deed was contingent upon the occurrence of a future event, or if it represented a liquidated debt that had already fallen due.

The High Court was required to determine the proper construction of clause 3(a) of the deed of settlement. Specifically, the court had to ascertain whether the phrase "upon the successful completion of the sale of the Property" referred to a condition precedent to the obligation to pay, or if it merely described the circumstances under which the payment was to be made, implying the debt was already established.

The Court held that the language of clause 3(a) indicated that the payment was conditional upon the successful completion of the sale of the property. Their Honours reasoned that the phrase "upon the successful completion" clearly established a prerequisite for the payment obligation to arise. The court applied principles of contractual interpretation, emphasizing the importance of giving effect to the plain and ordinary meaning of the words used by the parties in the deed.

The High Court found that the condition precedent had not been met, and therefore, the payment obligation had not yet arisen. Consequently, the appeal was dismissed.

Orders