Porter v Hoskin - [2004] WADC 156

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: PORTER -v- HOSKIN [2004] WADC 156

CORAM: GROVES DCJ

HEARD: 30 SEPTEMBER 2003, 1-2 OCTOBER 2003

DELIVERED : 23 JULY 2004

FILE NO/S: CIV 2187 of 2002

BETWEEN: IAN PORTER
Plaintiff
AND
CHERYL A HOSKIN
Defendant

Catchwords:

Contracts - Payment of monies - Issue as to whether payment was gift or loan - Terms of advancement - Legal professional privilege - Rule in Jones v Dunkel - Turns on findings of credibility

Legislation:

Nil

Result:

Plaintiff's action dismissed

Defendant's counterclaim for $9,457.28 allowed

Representation:

Counsel:

Plaintiff: Mr T Lampropoulos
Defendant: Dr P MacMillan

Solicitors:

Plaintiff: Pye & Quartermaine
Defendant: G M Rattigan & Associates

Case(s) referred to in judgment(s):

Davies v Taylor [1974] AC 207
Dolan v Australian & Overseas Telecommunications Corporation (1993) 42 FCR 206
Giannarelli v Wraith (No 2) (1991) 171 CLR 592
Gillard v Bates (1840) 6 M & W 547
Jones v Dunkel (1959) 101 CLR 298
R v Wilmot (1988) 89 Cr App Rep 341
Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87
Wentworth v Lloyd (1864) 10 HLC 589

Case(s) also cited:

Payne v Parker [1976] 1 NSWLR 191
Shum Yip Properties Development Ltd v Chatswood Investment & Development Co Pty Ltd [2002] NSWSC 13

GROVES DCJ: The plaintiff claims that on 8 June 2000 he loaned the defendant the sum of $240,000. He pleads that it was agreed that the defendant would repay that sum as soon as practicable, but in any event, no later than upon the sale of the defendant's property situate at 17 Devon Road, Swanbourne ("the property").
The defendant denies that it was a loan. She admits that the plaintiff advanced the monies to her but says that as much as she was bound to reimburse was the net amount of such monies that she either had received and was from time to time to receive from the estate of her deceased brother. She claims there was no obligation on her to repay any shortfall. She says in the alternative that any shortfall was to be regarded as a gift.
The amount of the shortfall after the plaintiff has given credit for all monies either held by him from all sources at the date of the advance or received subsequently is $115,839.
The arrangement, whatever it might be found to be, was not recorded in any formal documentation, eg acknowledgment of debt or deed of gift, nor was it secured, eg by way of mortgage, or otherwise protected, eg by way of caveat against the property. The advance made by the plaintiff was interest free to the defendant. There was no fixed term for the advance.

Preliminary issue – defendant's divorce settlement – legal professional privilege – issue as to drawing adverse inference

The plaintiff and the defendant first met in March 1997. The defendant, then known as Cheryl Anne Fooks, had been separated from her former husband for approximately four years.…

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.

Continue reading Porter v Hoskin

Details

AGLC: Porter v Hoskin [2004] WADC 156
Case: [2004] WADC 156
Decision Date: 23 July 2004

CaseChat Overview and Summary

In Porter v Hoskin, the parties were in dispute over whether a payment made by the defendant to the plaintiff was a gift or a loan, and if it was a loan, whether it had been repaid. The matter was heard by Spender J in the Federal Court of Australia. The plaintiff alleged that the defendant had agreed to repay the $240,000 as soon as practicable but no later than the sale of the defendant’s property, while the defendant argued that the payment was a gift and not a loan.

The central legal issue was whether the plaintiff had discharged the burden of proving that the payment was a loan and that it had not been repaid. The court had to determine the credibility of the parties and the weight to be given to their evidence, particularly in light of the defendant's invocation of legal professional privilege which prevented the plaintiff from calling a crucial witness. The court was also required to assess whether the plaintiff had provided substantial benefits to the defendant, which could have influenced the nature of the relationship between the parties.

Spender J found that the plaintiff had not discharged the burden of proving the loan agreement. The judge observed that the plaintiff’s evidence was not sufficiently cogent to establish the terms of the alleged agreement. The court held that it was not open to draw an adverse inference from the defendant's refusal to waive legal professional privilege, as such an inference would undermine the purpose of the privilege. The judge concluded that the plaintiff had not proven on the balance of probabilities that the payment was a loan that had not been repaid.

The court did not make any orders regarding the repayment of the $240,000 as the plaintiff did not wish to reopen the case to call the witness whose testimony was precluded by legal professional privilege.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

It is not in general open to a court to draw an inference against a party refusing to waive legal professional privilege; such inference may not be drawn sub silentio by the tribunal of fact where privilege is relied upon. As Spender J remarked in Dolan v Australian & Overseas Telecommunications Corporation (1993) 42 FCR 206 at 215‑216:"There is no doubt that no adverse inference can be derived from a claim to legal professional privilege: Wentworth v Lloyd; Giannarelli v Wraith (No 2). The reason given in Phipson as to why the position about inference is not different in relation to the self‑incrimination privilege from that in respect of other privileges is compelling: 'the privilege is intended to protect the innocent and the guilty alike'." Although as I concluded legal professional privilege did not apply the plaintiff did not wish to reopen its case. Had it chosen to do so Mr Bowen may have been able to give definitive evidence as to what he was told concerning the $240,000. Be that as it may as the matter has been left, it is not open to me to drawn any inference whatsoever from the fact that the defendant declined to waive the claim for privilege. Were I to draw any such inference either expressly or sub silentio that would have the effect of destroying the privilege in that a choice to rely on the privilege would carry with it a threat of an adverse inference rendering the privilege nugatory. The defendant provided $240,000 to the defendant to facilitate her divorce settlement. It is common cause that had he not done so the defendant would have had to sell the property to pay out her former husband. Insofar as the arrangement is concerned it was common cause also that the defendant would pay to the plaintiff such monies as she received as a beneficiary from her deceased brother's estate. Where the issue lies is whether or not on the plaintiff's case there was agreement that the sum would be repaid as soon as practicable but in any event no later than upon the sale of the defendant's property. The onus is on the plaintiff to establish on the balance of probabilities that there was such agreement. When speaking of a degree of cogency which evidence must reach in order that it may discharge the legal burden in a civil case Denning J in Davies v Taylor [1974] AC 207 at 219 said:"That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that the Tribunal can say: 'we think it more probable than not', the burden is discharged, but if the probabilities are equal it is not. When the plaintiff and defendant first met they were each separated from their respective spouses. They each maintained their separate residences although they did stay over at each other's place with some regularity and would see each other most weekends. They socialised together and with friends. The plaintiff joined the defendant's tennis club. There is no doubting that the plaintiff was extremely generous towards the defendant. He provided her with substantial financial benefits over the period of their relationship. He did painting work and gardening at the property and engaged and paid for tradesmen to do work there. He paid fares for her to accompany him on several overseas and interstate trips or holidays. He bought an antique table and a painting for the property and jewellery for the defendant including a sapphire and diamond ring valued at $3,500‑$4,000. He estimated reluctantly and perhaps conservatively that the total benefits which he had provided to the defendant over the course of their relationship to be in the order of $30,000.