Vale v Sutherland

[2009] HCATrans 27

[2009] HCATrans 027

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S440 of 2008

B e t w e e n -

MALCOLM GEOFFREY VALE

Applicant

and

RODERICK MACKAY SUTHERLAND

Respondent

Application for special leave to appeal

GUMMOW J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 FEBRUARY 2009, AT 12.05 PM

Copyright in the High Court of Australia

MR G.T. BIGMORE, QC:   If it please the Court, I appear with my learned friend, MR J.T. JOHNSON, for the applicant.  (instructed by Watson Mangioni)

MR B.J. SKINNER:   May it please the Court, I appear for the respondent.  (instructed by Spark Helmore)

GUMMOW J:   Yes, Mr Skinner, we will hear from you first.

MR SKINNER:   Thank you, your Honour.  Your Honour, there are, in effect, two significant aspects of the application for special leave.  They are, in effect, the valuation point and there is the pleading point.  So far as the valuation point is concerned, it is our submission that that part of the application does not enjoy sufficient prospects insofar as the majority and the minority judgment below are, in effect, on all fours.

GUMMOW J:   Which of the grounds in the draft notice of appeal, as you see it, reflect the difference between Justice Lindgren and the other members of the court?  Just on page 83.....

MR SKINNER:   Yes, your Honour.  The one that shows any difference is ground 2(a) and, so far as (b) is concerned, it is our position that Justice Lindgren’s dissent is only in respect of the pleadings aspect, not on the valuation point itself.  So far as 2(c) is concerned, we say that is confined, of course, just to the majority. 

Your Honour, so far as the valuation point is concerned, it becomes somewhat murky in this respect.  The section which was relied upon in the section 139ZQ notice concerns the question of market valuation and that is the critical issue of valuation so far as the principle underlying the notice is concerned.  Where this case went off the rails, in our submission, concerns the valuation figure which was inserted for purposes of the notice and, in our respectful submission, the majority below were correct in their assessment of the importance of that figure, so far as that is concerned. 

It is tangential to the underlying issue of whether the matters complained of were in fact transfers not for market value.  So that, in our respectful submission, undue influence is being placed in the draft notice of appeal on the question of the figure that was inserted for valuation in the section 139ZQ notice.

KIEFEL J:   Do you say that it did not require proof?  What is your position in relation ‑ ‑ ‑

MR SKINNER:   Yes.  Our position is it did not require proof.  With respect, the relevant passage for that, your Honours, is in the dissenting

judgment below, the judgment of Justice Lindgren.  At page 67 his Honour expressed the view at line 40 that:

Mr Sutherland . . . bore the onus of proving that the market value of the property Mr Vale received from Mrs Vale was $270,000.

We say that is incorrect and we say the majority was correct in that regard.  We respectfully submit, that is the critical and germane point for whether or not there would be a grant of special leave and, in our respectful submission, for the reasons that the majority expressed, that would not enjoy sufficient prospects of success. 

So far as the application of section 139ZQ notices is concerned, we would respectfully submit that the majority’s analysis of the cases which have been decided to date is correct.

GUMMOW J:   Yes, Mr Bigmore.

MR BIGMORE:   If your Honours please.  With respect to our learned friend, Justice Lindgren and the majority were ad idem on the application of Halse v Norton and I take the Court to page 56 in the joint judgment at paragraph 24, line 41.  All three members of the court applied the wisdom in Halse v Norton.  We accept it would be open to our learned friend to put that in contention because this Court has not considered, to our knowledge, section 139ZS or ZQ of the Bankruptcy Act, but where the majority went wrong appears in paragraphs 25 and following.  They thought that the earlier document relating to a reasonable asking price for the property was a valuation and they regarded it as competitive with the later valuation for stamp duty purposes.

What Justice Lindgren said, and, in our respectful submission, entirely correctly, is really distilled at paragraph 93 of his Honour’s judgment at page 77 of the application book.  So, if Halse v Norton is correct, then, as Justice Lindgren explains, the onus fell upon the trustee to prove the value and, for the reasons given by Justice Lindgren, the trustee failed to do that.  On the evidence as a whole the valuation suggested that there was a $62,000 difference and given the draconian nature of these notices which imposed criminal sanctions in some cases, although not in this, and so on, it is something that a trustee must get right.  That was the position as it stood after Halse v Norton and that has not been, on the face of it, disturbed in this case, however, we accept that this Court would bring a fresh mind to the whole issue.  If the Court please.

GUMMOW J:   Yes, Mr Skinner.

MR SKINNER:   Your Honour, so far as Halse v Norton is concerned, we respectfully submit that the majority, and indeed in their analysis of it, their analysis is correct.  May it please your Honour.

GUMMOW J:   There will be a grant of special leave in this matter.  What is the estimate of time, gentlemen?

MR BIGMORE:   Half a day, your Honour.

GUMMOW J:   There will be a grant of special leave in this matter, as indicated.

AT 12.13 PM THE MATTER WAS CONCLUDED