Rubie v Rubie

[1989] HCATrans 243

•

~

~

•

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sll2 of 1989

B e t w e e n -

KEVIN ARTHUR RUBIE

Applicant

and

MARGARET ROSE RUBIE

Respondent

Application for special leave

to appeal

MASON CJ
GAUDRON J

McHUGH J

Rubie

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 OCTOBER 1989, AT 2.25 PM

Copyright in the High Court of Australia

SITl0/1/JM 1 13/10/89

MR D.M.J. BENNETT, QC: If it please the Court, I appear

with my learned friends,MR R.G. LETHBRIDGE

and MS A.T. PERRENS for the applicant.

(instructed by Westgarth Middletons)

MR K.R. HANDLEY, QC: If Your Honours please, I appear with

my learned friend, MR R.C.P. MATER for the

respondent. (instructed by McDonnell Milne & Fowler)

MASON CJ:	Yes, Mr Bennett.
MR BENNETT:	I hand to Your Honours my outline of submissions.

MASON CJ: Yes, Mr Bennett.

MR BENNETT:  If Your Honour oleases. The first matter

is simply a procedural matter, but it is a

matter of some importance and it is an incident,

I suppose, of the multiple appellate process.

Where one has three judges sitting on an appeal, as one has here, one dismisses the appeal so

the applicant comes to this Court with two out

of the four judges totally in his favour, the

other two each allow the appeal on one ground

and would not allow it, or do not deal with

the other ground, in effect the applicant has

lost. although the courts below were three to one

with him on one point and two to one with him on the

other point. In my respectful submission that

is a factor the Court would take into account

on an application for special leave in considering

whether the interests of justice in the particular

case require appellate review because, in effect,

the result is an anomalous result so far the

litigant is concerned and that is particularly

so in a court which does not have a nermanent

appellate division where the judges are of

equal status, such as the Family Court or the

Federal Court.

Secondly, if I may turn to the valuation point,

which is the major issue and, as I have indicated,

it was an issue which we only had one judge against

us on; one judge did not decide, the other two

would have decided it in my favour. The issue is

whether an offer is evidence of the uncertainty of

a valuation as opposed to being evidence of value

per se and whether in that way it can be used in

the manner it was used here. What happened here

was there were three valuations, two very high

and one lower. His Honour accepted the lower

valuation as being correct. There was also some

evidence that two people, I think, wanted to make

offers for the land. His-Honour took the view

that was inadmissible, as did the dissenting justice

on the Full Court.

Mr Justice Hase held that the evidence was

admissible because it showed that the acceptance

SITl0/2/JM	2	13/10/89
Rubie

of the other valuation was uncertain and

therefore the valuation being uncertain one

procedure for sale rather than another, a

procedure which made a very big difference

of course to whether the husband continued

his business, would be adopted. We would submit

that is reall½ by a back door, creating an

exception to the general rule about evidence of

offers which ought not to be created. The

considerations which make an offer inadmissible

on the issue of value should not make it

inadmissible on that issue. May I just show

Your Ronours what was said on this subject

in McOONALD V THE DEPUTY FEDERAL COMMISSIONER

OF LAND TAX, 20 CLR 231. I will hand copies to

Your Honours. It is the locus classicus,

for the proposition that offers are not evidence

of value. The passage which we would submit is

of relevance in this case appears at page 239

and there what is said in point 6 in the judgment

of the Court is this:

When the matter has reached the noint of

a concluded contract, there has been a

definite concrete fact established, which

not only evidences value, but to some extent

helps to create or modify it. Where an owner

has actually parted with his land for a

fixed sum and a buyer has parted with his

money for the land, a clear event has arisen,
which, based on the ordinary instincts and

impulses of human nature, indicates a

consensus of opinion between two adverse narties

in the cormnunity respecting the value of·

similar lands. Some advantage to justice is

therefore manifestly possible from considering

it, and the law presumes that up to that point

the disadvantages of having to undertake the

collateral inquiries as to comparison do not

outweight the possible advantages.

But if the negotiations do not end in a

concluded bargain -

there is a multiple of other considerations and

it is Pointed out that:

Excursions into the realm of collateral

circumstances would be endless. They would

so add to the cost, delay and uncertainty of

litigation.

One would have to know:

whether the ..... other party really terminated the negotiations, and, if so, for what reason. Had either discovered the true worth ..... or

been misinformed .... as to its real value? Did

the owner mistrust the ability of the purchaser,

SITl0/3/JM	3	13/10/89
Rubie

Or did he learn of a better bargain? Or,

again, was the offer a sham -

and so on. One would also have to know did

the purchaser have the money to pay and various
matters of that sort. Ultinately the rule is
a rule of judicial policy. It is part of the

weighing which applies throughout the law of

evidence of the need on the one hand to admit

matters which are relevant to the considerations

the court has to embark upon against, on the other,

permitting inquiries which would just go too far.

Of course, this is a particularly important question in family law where it is often of great

importance to know whether the husband is to be

at liberty to retain the asset and buy out the

wife at some agreed valuation, or vice versa, or

some valuation fixed by the court, or whether

there should be a compulsory sale with the parties

being at liberty to bid and the additional question,

does one permit the auction to take place without

the parties bidding, with the right of the party

to match the highest bid, or· does one require

them to take part in the bidding, which, of course,

creates a substantive difference. That is a

regular question in the Family Court. If the

Family Court is to accept evidence of offers in

determining how it exercises that discretion then,

we submit, there will be a huge range of collateral

inquiries and it is a matter of importance that that

should not take place.

It arises also, of course, in bankruntcv.

If one considers the situation in a urefe~en~e

case where one of the issues is the ability of
the debtor to pay his debts at a particular time,
is one to admit there evidence of offers from

family or friends saying they were prepared, or

would now be prepared to make offers for the

pay his debts. There are all sorts of circumstances	debtor's property which would have enabled him to
other than straight value where it is relevant to
look at this question and we would submit that the
rule which applies to valuation should extend to
those cases.- -

This is a fortiori however, because when one

looks at at what was said in this case, the

way the question of the offers was used was to

create uncertainty as to value so as to make

it fairer that the property should be taken from

the husband and compulsorily sold rather than

permitting him to continue to nrc1nage it.	We would
submit that is highly undesirable.	I should just

very briefly take Your Honours to the passage

at page 51 where His Honour Mr Justice Barblett,

who was one of the justices who agreed with the

applicant's submissions in this regard although

SITl0/4/JM	4	13/10/89
Rubie

he was a member of the majority because of the

other point, cited with approval this passage

from His Honour's judgment, and this is really

the way His Honour refrained from using the

evidence. At line 10 on page 51:

" ... the determination as to whether or not this property should be offered for public

sale as urged upon by the wife or whether

the husband should be given the opportunity

to purchase - to buy out the wife's interest

will be depending on considerations quite

different from the availability of purchasers.

It will depend very much on the question of

whether I can come to a firm concluded view as

and whether that price is likely to be in the

to what is a fair price, and as I have said

range the husband has indicated that he is able

to pay or whether any payout figure is going to

be so high that he does not appear to have a

reasonable prospect of raising that amount."

His Honour then concludes:

With hindsight, it can be seen that

his Honour was true to his word and that his

reasons for refusing a sale on the open market

did not include the unavailability of purchasers.

So it is not as if the fact has been taken into

account against the other submission. It was
simply irrelevant to the matter the way His Honour

looked at it and we submit His Honour was correct

in that decision.

McHUGH J:  But there is a majority in the court below in

favour of the proposition which you-assert about

offers.

MR BENNETT:  Yes, Your Honour.

McHUGH J:  Why should we grant special leave on this point

when you have got a majority in your favour on

it?

MR BENNETT: It was not the majority which prevailed. That

really goes back to my first point, Your Honour,

of the interests of justice in the case. If the

issues are of importance - I an sorry, I should

say this too: there is a real question as to what
the ratio of this case is for future generations.
Does one say, as one would say in accordance with
the old strict idea of stare decisis that this
case is authority for each proposition on which
there was a majority below and also authority for

the proposition that where both factors are present

one gets the opposite result.

SITl0/5/JM	5	13/10/89
Rubie

McHUGH J:  One thing it cannot be an authority for

has got to follow anything in this case in preference to McDONALD, have they?

is any proposition inconsistent with McDONALD.

MR BENNETT:  No, Your Honour, but the question is not

strictly McDONALD. Mr Justice Hase who was

against us on this point recognized and

treated himself as applying McDONALD. What

he did was to create an exception to it, or to
indicate that it did not apply where the question

was not value per se but certainty of the valuation.

That, we submit, is an exception which is going to

let in the evidence if His Honour's decision is

followed. Whether future judges are bound to

say, 'The ratio is the other way", or whether

more likely they will say, "Well, this case is
just indecisive on that issue" because the

majority which was in my favour on this issue

consisted of one dissentient and the other member

of the majority. So one just does not know.

MASON CJ: Well, it may be,as you have hinted, that

this case has no ratio at all. Just as it was

said of CALTEX that it had no ratio and stood for

no proposition, so may it be said of this case,

in which event you have not got a very firm

foundation for the grant of special leave.

MR BENNETT:  Your Honour, the danger is that the strict

view of stare decisis would say, "This case

is authority for three propositions." Two of

them are the two propositions which are

supported by the majority in the Full Court,

although there is a qualification to that as

Your Honours will see when I get to the next

one. The third is that where both factors

are present, one reaches the opposite result,

because that is what happened in the case.

So one really has a combination of ratios which,

we would respectfully submit, are unfortunate	for the future of the law. That is the other
way at looking at it and that is the strictly
correct way of looking at it.

McHUGH J: It is not, is it? It has been said in this

Court - I think it was probably in DICKENSON ARCADE

it was - that you cannot construct a ratio by

taking minority opinions on one point and adding

them to another point and you cannot take minority
judgments and add them to one of the majority

judgments to create a ratio on a particular

point.	You have got to have a majority of judges -
you have	to have a majority of the majority

in favour ot it.

MR BENNETT:	Yes.	To the extent that the points are
SITl0/6/JM	6	13/10/89
Rubie

not discrete, yes. Where the points are

totally discrete that line of authorities may

not apply with the same strength. But even if

it does, Your Honour, that would strengthen my

submission because if there is no ratio, but the
point is of importance, then it is an appropriate

case for this Court to grant special leave so

the issue can be decided. It has the assistance

of the judges below who have considered the

precise ooints, they have reached diverse

results.- That, I would submit, makes it more

appropriate rather than less appropriate as a
vehicle for special leave - as a vehicle for

deciding the question.

The final point involves the application of

GRONOW V GRONOW and that arose in this way,

here it is not 2:1 but 1:1 with the third not

considering the question. Mr Justice Barblett

held, and was the only judge who held, that

His Honour's decision was plainly wrong. That appears at page 49 where His Honour says:

In the reasons his Honour annears not to

have taken into account what I consider to
be a very relevant consideration but I have

assumed that he has taken it into account.

So that is not the ground.

I cannot see any wrong by expressed principle

of law or mistaken fact.	I cannot see an
extraneous or irrelevant factor.	However, an

Appeal Court must look at the weight given

to particular matters if it appears that the

trial Judge's decision is wrong. This is a

case where a sale of the land would nroduce

certainty with no possibility of injustice.

Reliance on the best of three valuations which

valuation is nevertheless flawed allows a

distinct possibility of injustice. The

question to be determined is whether a

discretion should be exercised in favour of

certainty or justice. In my opinion not
to make orders that would require a sale of
the land with the husband having the right

to bid is "plainly wrong".

What His Honour does not do is apply the true

GRONOW V GRONOW test in relation to that situation

which is referred to by Mr Justice Hase at page 102.
His Honour there, citing from Your Honour the

Chief Justice's judgment in MALLET V MALLET sets

out the familiar passage that the Family Court is

exercising a discretion, that the discretionary

rules of GRONOW V GRONOW and so on, apply to

appeals from those matters.	At line 39 Your Honour
says this:

SITl0/7/JM	7	13/10/89
Rubie

And in some cases the exercise of the

discretion may be vitiated by the primary

Judge's failure to give sufficient weight

to a relevant factor. However, an appellate

court needs to view this ground of appeal

with considerable caution.

The passage which Your Honour cited from GRONOW V

GRONOW in the judgment of Mr Justice Stephen I

can hand to Your Honours. It is GRONOW V GRONOW

144 CLR 513 at 519. At the last paragraph in that

page, at point 8, His Honour says:

The constant emphasis of the cases is

that before reversal an apuellate court must

be well satisfied that the-primary judge was
plainly wrong ..... While authority teaches that

error in the proper weight to be Biven to

particular matters may justify reversal on

appeal, it is also well established that it

is never enough that an appelalte court, left

to itself, would have arrived at a different

conclusion. When no error of law or

mistake of fact is oresent, to arrive at a

different conclusion which does not of itself

justify reversal can be due to little else

but a difference of view as to weight: it follows that disagreement only on matters

of weight by no means necessarily justifies

reversal of the trial judge. Because of

this and because the assessment of weight is

particularly liable to be affected by seeing

and hearing the parties ..... an appellate court

should be slow to overturn.

That is not, of course, what Mr Justice Barblett

has done. What he has done is simply said, an

appeal court must look at the weight if it appears

the trial judge's decision is wrong. He then

says, "I give different weight and I think it is

plainly wrong." He is the only one of the four judges

to say that because one other judge disagreed with

that, one was the trial judge himself who clearly

did not think that, and the other did not need

to get to this point.

MASON CJ:  But none the less there is much substance in that

view in this case, is there not, Mr Bennett, that

when you have a- very considerable disparity in

valuations and you have other materials which

indicate that the actual ascertainment of the
true value of the land is difficult and comnle~

that the proper solution as between the parties

is to sell the land?

MR BENNETT: No, Your Honour, for two reasons. First, where

one is dealing in a matrimonial situation where

the business is being carried on, or is desired
to be continued to be carried on by one of the

parties, the disruption inherent in requiring that

SITl0/8/JM	8	13/10/89
Rubie

party to dispose of his livelihood is a matter of importance in the Family Court. So that is

a factor one would weigh against the factor

to which Your Honour refers. Secondly, it

would be very important in making that judgment

to know how satisfied the trial judge was as to the correctness of the valuation he accepted and the absence of correctness of the

other two. He might be absolutely certain that

the other two are on principles which are not

acceptable and that that one is clearly right,

in which case one consequence might follow, or

he might really think it was a matter of just

a 51 per cent balance of probabilities, in

which case the other factor would follow. So

for an appellate court which has not heard the witnesses; has not attempted to form that sort of view; is not weighing those factors merely to

say, "Here is a factor which I think is entitled to a large amount of weight and therefore I come

to a different result"; without even, with

respect, paying lip-service to the remarks

of Your Honour in M.A.LLET and of Mr Justice Stephen

in GRONOW about the difficulty of this zround,-

we would submit, is inappropriate and is something

which this Court would be concerned about. As I

have said again, it is one justice out of four

and it has had the result of altering the result

in this case.

So, Your Honours, when one adds those factors,

in our respectful submission, this case does

involve an imuortant uoint about valuation as to
the extension.of McDONALD's case. It demonstrates

the need for clarification, or perhaps repetition

more than clarification, of the injunction - the

reservation the court has applied to reversing

a discretionary judgment on the ground of weight

and it is a case where the applicant has had a

decision against him without a ratio in the norr.1al

sense and, in my respectful submission, the

interests of justice require that this Court

provide appellate review and the irnnortance of the issue about valuation would also have that

result. May it please the Court.

MASON CJ:  The Court need not trouble you, Mr Handley.

The Court considers that the actual decision

of the Full Court of the Family Court on the

uarticular facts of this case was correct. The

case is therefore not an appropriate case for

the grant	of special leave and the application
is refused.

MR HANDLEY:  If the Court nleases. I know it is a matter

under the FAMILY.LAW ACT, Your Honour, but we

would ask for costs for the wife.

SITl0/9/JM	9	13/10/89
Rubie

MASON CJ:  What do you say about that, Mr Bennett?

MR BENNETT:  In my submission, the practice in Family Court should prevail, Your Honour. The ~olicy

of the FAMILY LAW ACT in this regard is one

which - - -

MASON CJ:  As I recollect it, we have held that the

provision in the Act does not apply to a

proceeding in this Court.

MR BENNETT:  I do not suggest it does, Your Honour. I

submit it is a significant discretionary

consideration and, in my respectful submission,

the appropriate order is no order as to costs.

MASON CJ: There will be no order for costs.

MR BENNETT: If the Court pleases.

AT 2.49 PM THE MATTER WAS ADJOURNED SINE DIE

SITl0/10/JM 10 13/10/89

Rubie