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Deputy Commissioner of Taxation (Cth) v Luckhardt


[2006] QCA 53





(third party/appellant)


DC No 227 of 2003

Court of Appeal


General Civil Appeal



3 March 2006




21 February 2006


McMurdo P and Williams and Keane JJA

Separate reasons for judgment of each member of the Court, each concurring as to the orders made


1.  Appeal dismissed

2.  Appellant to pay the respondent's costs of the appeal to be assessed on the standard basis


CONTRACTS - STATUTE OF FRAUDS, SECTION 4 - NON-COMPLIANCE WITH STATUTE - where respondent alleged that appellant had promised to "indemnify" respondent for any liabilities incurred by the respondent as a director of a company - where appellant argued this promise was a guarantee - where appellant argued the promise was unenforceable because no written note or memorandum of the promise as required by s 56  of Property Law Act 1974 (Qld) - where absence of written note or memorandum not pleaded in appellant's defence - where promise was not a promise to answer for the debts of another - whether the promise was unenforceable by reason of s 56 of Property Law Act 1974 (Qld)

APPEAL AND NEW TRIAL - INTERFERENCE WITH DISCRETION OF COURT BELOW - IN GENERAL - JUDGE MISTAKEN OR MISLED - where appellant argued learned trial judge relied upon evidence of matters collateral to issues between parties - where appellant challenged reliance upon evidence of appellant's general strategy of concealment of his business connections - where appellant challenged reliance upon evidence that appellant had sworn false affidavit in Family Court proceedings - where challenged evidence was admitted without objection by appellant's counsel at trial - where appellant argues that appellant's representation at trial was so abjectly and manifestly incompetent as to amount to miscarriage of justice - whether there was a miscarriage of justice

APPEAL AND NEW TRIAL - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - OTHER MATTERS - where appellant claimed findings of learned trial judge were against the weight of the evidence - whether the findings made by learned trial judge were inconsistent with admitted or proven facts, inherently improbable and reasonably open on the evidence

Property Law Act 1974 (Qld), s 56

Ali v The Queen [2005] HCA 8; (2005) 79 ALJR 662, cited

Marginson v Ian Potter and Co (1976) 136 CLR 161, applied

State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306, applied

University of Wollongong & Ors v Metwally (No 2) (1985) ALJR 481, cited


D A Savage SC, with D H Katter, for the appellant

K C Fleming SC, with A G Jamieson, for the respondent


Barry & Nilsson for the appellant

Zerrin Jamieson for the respondent

[1] McMURDO P:  I agree with Keane JA's reasons for dismissing the appeal with costs to be assessed.

[2] WILLIAMS JA:  I have had the advantage of reading the reasons for judgment of Keane JA wherein all issues relevant to this appeal are considered.  The learned trial judge was clearly entitled to accept and act upon the evidence of the respondent.  For the reasons given by Keane JA the appeal should be dismissed with costs.

[3]  KEANE JA:  The respondent was appointed the sole director of Hamlyn Crest Corporation Pty Ltd ("Hamlyn Crest") on 14 December 1999.  On 15 November 2002, liquidators were appointed following a special resolution that the company be voluntarily wound up.  The Deputy Commissioner of Taxation ("the DCT") recovered a judgment by consent from the respondent in respect of director's penalties payable by him because Hamlyn Crest had not met its obligations in respect of the remittance of group tax payments.  The respondent brought proceedings against the appellant seeking an indemnity in respect of the sum for which the respondent was liable to the DCT.

[4] The respondent's claim was that in late 1999 he had agreed to become a director of Hamlyn Crest at the request of the appellant, who wanted to conceal the fact of his association with the company, in return for the appellant's promise to indemnify him for any liability incurred by him as a result of being a director of the company.  The agreement was said to have been made orally.  The only issue before the learned trial judge was whether the oral agreement for which the respondent contended had been made.  The learned trial judge preferred the evidence of the respondent to that of the appellant, and concluded that the agreement had been made.  Accordingly, judgment was given in favour of the respondent.

[5] The appellant has sought to overturn the judgment on a number of grounds which may be summarised as follows:


(a) the appellant's promise was unenforceable because it was a guarantee of which there was no note or memorandum in writing as required by s 56 of the Property Law Act 1974 (Qld) ("the PLA");

(b) the learned trial judge erred in considering inadmissible evidence as to the credibility of the appellant.  Associated with this ground is the ground that the learned trial judge's findings were materially affected by the manifest incompetence of the appellant's counsel at trial in failing to object to the agitation of collateral issues and in failing to lead evidence about those issues in the event that his objections were disallowed, and in failing to cross-examine the respondent about the terms of the alleged agreement between the parties; and

(c) the learned trial judge erred in finding in favour of the respondent on the agreement issue when that finding was against the weight of the evidence.

[6] I shall address the submissions advanced by the parties in relation to these issues, but it is necessary first to summarise the facts of the case and the learned trial judge's findings so that the arguments on appeal may be properly understood.

The judgment

[7] The learned trial judge, in a characteristically thorough and careful judgment, canvassed the evidence fully.  As a result, it is possible to summarise the evidence and his Honour's findings quite briefly.

[8] The business of Hamlyn Crest was the promotion and sale of a computer program which, it was claimed, was able to predict the result of horse races.  The business employed up to 50 people engaged in marketing the program.

[9] The respondent's case was that the appellant, who had been living in a de facto relation with the respondent's daughter since 1992, asked the respondent to become a director of one of the appellant's companies.  The respondent said that this conversation occurred in 1999, by telephone, at a time when the appellant and the respondent's daughter were living in Vanuatu.  The respondent said that the appellant said that he would have to do nothing.  The respondent said that he asked the appellant: "What if something goes wrong?" to which the appellant replied: "Well, you can resign at any time.  If anything goes wrong, you know, I'll completely indemnify you."  The respondent asked: "What does that mean?" and the appellant replied: "Any liabilities, anything you could cut short on I will - I will pick up the tab on that", and the appellant repeated: "You could resign at any time."  The respondent's evidence was that he did not immediately agree to the appellant's request, but had several discussions with his daughter over time, and agreed to become a director of the company which turned out to be Hamlyn Crest.

[10]  The documents required for this purpose were brought to the respondent by Wayne Evans who was known to the respondent as the appellant's business manager.  Mr Evans was called as a witness by the appellant.  In cross-examination he acknowledged that it was possible that he took the necessary documents to the respondent for his signature, but then asserted that the documents he recalled taking to the respondent may have related to the lease of premises at Creek Street by Hamlyn Crest rather than the documents relating to the formation of the company.

[11]  Hamlyn Crest was registered on 14 December 1999 with the respondent as its sole director.  On 17 December 1999, the respondent visited the appellant and his daughter in Vanuatu for eight days.  According to the respondent's evidence, nothing of significance in relation to Hamlyn Crest happened during this visit.

[12]  In October 2000, the respondent's daughter, who was then expecting a child, returned to Australia where she lived with the respondent.  After the child was born in December 2000, the appellant also returned to Australia, and lived with the respondent and his daughter.

[13]  The respondent said that in early 2000 he was presented with more documents to sign.  Thereafter, apart from possibly signing some further documents, he had nothing to do with Hamlyn Crest until early 2001.  At that time, at the appellant's request, he agreed to become a personnel director for the company's business.  For these services, it was agreed that the respondent would be paid $1,000 per week.  His duties involved interviewing prospective telemarketers.  He said that the appellant attended the company's premises in Orchid Avenue, Surfers Paradise every business day.  Mr Evans acted as general manager.

[14]  As a result of adverse publicity in early 2002, the business stopped operating.  Payments to the respondent from Hamlyn Crest stopped in April 2002.  According to the respondent, the business was taken over by another company, Soft Holdings Limited, in which he was not involved although he subsequently interviewed potential telemarketers for the new company at a hotel.

[15]  In May 2002, the respondent's daughter and the appellant separated.

[16]  The appellant said that in the early 1990s he went to London with the respondent's daughter.  He said that while there he set up a company dealing in stock exchange software and a racing program.  He was a director for a time, but then ceased to be a director.  His involvement was not in administration, but in artwork and promotion.  He had involvements with other companies in Hong Kong and Capetown.  In late 1997 or 1998 he moved to Vanuatu.

[17]  According to the appellant, the respondent's daughter was always asking him to "do something for Dad".  The appellant said that, during the respondent's visit to Vanuatu, the appellant invited the respondent to become involved in a tourist business which the appellant was attempting to set up in Vanuatu.  According to the appellant, the respondent said that he did not want to be involved.

[18]  The appellant denied that the telephone conversation on which the respondent's case was based had occurred at all.  The appellant said that, at some time that he could not recall, he had told the respondent that he believed that Highland Investments, a Hong Kong company to whom the appellant provided services but in which he had no formal position, would supply necessary product to Hamlyn Crest if the respondent took up with that company.  Hamlyn Crest did receive its software from Highland Investments. The appellant accepted that his agreement with Highland Investments remunerated him by way of a possible percentage of an increase in profitability of the companies which dealt with Highland Investments.  The appellant said that he had no involvement beyond assisting with design work, brochures and letterheads.  The appellant said that he was not involved with the formation of Hamlyn Crest, and had no contact with that company apart from visiting its premises from time to time.

[19]  After the respondent's daughter and the appellant separated, the appellant married another woman.  The appellant's wife, from whom he is separated, gave evidence by telephone from England.  She said that the appellant had told her that Hamlyn Crest was his company and that he owned it.  The appellant denied that he had said this.

[20]  The learned primary judge identified a number of reasons which led him to regard the appellant's evidence as unreliable.  Among other things, the learned trial judge referred to:


(a) the remarkable deficiency and inherent improbability of the appellant's evidence relating to the association of the respondent with Hamlyn Crest.  That evidence failed to provide any explanation at all as to the appellant's appreciation of how the respondent became involved in Hamlyn Crest and its business.  The appellant could be expected to be in a position to offer at least some evidence in this regard, as a result of his admitted association with Hamlyn Crest and its supplier, to explain his understanding of how the respondent came to be a director of Hamlyn Crest.  The appellant offered no such explanation;[1]

(b) the appellant's modus operandi, whereby he organises his affairs so as not to have his name attached to property or businesses in which he is involved, made the respondent's evidence of the appellant's request plausible, in contrast with the appellant's "thoroughly implausible" evidence of his exiguous involvement in companies from whose operations he evidently derives significant financial benefits;[2] and

(c) his appreciation that the appellant appeared to be "evasive in the witness box".  His Honour was so unimpressed by the appellant as a witness that he was not prepared to accept his evidence unless it was supported by "other credible evidence or contemporaneous documentation, or is otherwise inherently credible".[3]

[21]  An examination of the evidence shows that each of these considerations is compelling.  Together they amply justify his Honour's willingness to prefer the evidence of the respondent where it was in conflict with the evidence of the appellant.  By way of example in relation to the second and third points referred to in the preceding paragraph, the following passage from the appellant's evidence illustrates both the appellant's strategy of concealment of his ownership of assets and his evasiveness:


"MR JAMIESON:  Mr Pickering, could I just take you to something that you said to your barrister today?  He asked you about a Rolls Royce and you said, 'I've never owned a Rolls Royce.'?--  Not the one he's talking about.

  Did you not say, 'I have never owned a Rolls Royce.'?--  Well, I'm relying on you saying that.  I'm referring to the Rolls Royce you're referring to.

  Well, have you owned a Rolls Royce at any time?--  Yes, at any time I have, yes.  One time I did.

  Was it a silver Rolls Royce?--  No.

  Now, you say that when you came back from Vanuatu the Rolls Royce was just there;  is that what you're saying?--  No, I went out and purchased it.

  Didn’t you say to his Honour that you didn’t [know] who owned it?--  I still don't know who owned it.  I went out and organised the money for it.

  $89,000, wasn’t it?--  I think it was, yes.

  That was purchased from the Gold Coast?--  Yes, it was some chap on the Gold Coast.

  Some chap on the Gold Coast;  wasn't it purchased from a dealership on the Gold Coast?--  Well, I think he had two or three of them;  you'd hardly call it a dealership.

  Well, you say that you don’t know who owned it but you purchased it?--  Well, I organised for the purchase of it.

  Was the person who you believed to be the owner with you when you purchased this $89,000 car for him?--  I didn’t say I purchased it for anyone, I said I purchased it.  I don’t know if it was on behalf of - I don’t - actually still don’t know who paid for it, but I did - I did arrange for the purchase of the car.  In other words I nominated that that car was a good buy because I happen to be a bit of a car buff and - and that was it.

  But who asked you to go and do that?--  I think it was a discussion between - I don’t know - it could have been Wayne, it could have been - I don’t know, but it was decided to get one for the client - to drive clients around in.

  Well, when you said, 'I don’t know who owns it;  it was just there', did you expect his Honour to understand from that question - sorry, that answer - that when you returned from Vanuatu, the car was 'just there'?--  No, the car wasn’t there.

  So it's not correct when you said, 'I don’t know who owned it;  it was just there'?--  That is correct.

  That is correct?--  I don’t know who owned it.  I didn’t say it was there when I got back from Vanuatu.

  Well, did you have any instructions as to any particular type of Rolls Royce to buy from anyone?--  Yeah, a good one.  

  I'm sorry?--  A good one.

  Who told you to buy a good one?--  I don’t know;  it was just automatically - it could have been Wayne - it was just decided that the company, Hamlyn Crest, wanted a Rolls Royce.

  But you do remember someone told you to buy a 'good one'––-?--  No, I didn’t say that––-

  ––-whoever that person––-?--  ––-you're putting words in my mouth.  I said, I would be required to buy a good one.  I wouldn't be required to go out and buy a heap of rubbish, because they were going to drive clients around in it.

  Well, I asked you a moment ago if you had any instructions and didn’t you say to his Honour - and forgive me if I have this wrong - but you were told to go and buy a good one?--  Well, I wouldn't be told to buy a bad one.

  Of course not?--  And I didn’t say I was told to anyway.  I said it was agreed.

  What do you mean it was agreed?--  It was agreed.  I'll go back over it again for you.  Either Mr Luckhardt, your client, or Wayne Evans or whoever it was, had decided that a Rolls Royce was going to be used for clients of Hamlyn Crest and I was asked to go and locate one.  I don’t know what else I can say about––-

  So you're now adding in to that equation Mr Luckhardt was in the agreement;  is that what you're saying?--  Well, he - I said he may have been, yes - could well have been.

  Didn't you fill out papers at the car dealership, buying it in the name of George Luckhardt?--  No.  I filled out papers buying it in the name of George Luckhardt?

  Yes?--  Well, I don’t know, you can surprise me if you want, but I don’t recall that.

  Well, does it surprise you that the car was purchased in the name of George Luckhardt?--  No, it doesn't surprise me at all.  He was the director of Hamlyn Crest.

  Who else at Hamlyn Crest would have had an interest in this car if Mr Luckhardt was the sole director?--  I'm not sure what you mean, I'm sorry.  Why would anyone else have an interest in it?

  That's what I'm asking you.  You understood that Mr Luckhardt was the sole director of Hamlyn Crest, did you not?--  That's what I understood the situation to be, yes.

  Yes.  Well, why would you assume anyone else owned it, other than Mr Luckhardt––-?--  Well, anyone could have owned it.  It may have been Wayne Evans.  I don’t know.

  Please let me finish.  It might be easier for you to answer my question.  Why would anyone else but Mr Luckhardt have an interest in the Rolls Royce motor vehicle?--  Look, I honestly don’t know.  It wasn’t my business.

  All right.  When you came back from Vanuatu, you drove the car, did you not?--  Yes, I did.  I didn’t have one.

  All right.  Now, I want to take you to a conversation you had with Mr Tony Gough;  did you not have the vehicle in your possession as at the 29th of January 2004?--  I can't recall that date, I'm sorry.

  That was last year?--  Well, it may well have been, but you're - you're - you're sort of itemising a particular date, are you?

  When was the last––-?--  It may not have been in my possession on that date.  I don’t know.

  When was the last time you saw the Rolls Royce?--  The last time I saw it?

  Yes?--  Oh, some time ago now.

  How long?--  Months.

  A month ago?--  Months, plural.

  Months?--  Mmm.

  Has it been sold?--  I don’t know.

  But it was in your possession, wasn’t it?--  Yes, but it wasn’t my car.  I don’t know who sold it or whether it was sold or whether there was the incumbent or what.  I don’t know."

[22]  In the light of evidence like this, any reasonable tribunal of fact would have been reluctant to accept that the appellant was not well acquainted with the affairs of Hamlyn Crest and would have had serious reservations about acting upon the appellant's uncorroborated evidence.

[23]  In summarising the considerations which weighed with the learned trial judge in rejecting the evidence of the appellant, his Honour referred as well to other considerations which arose from evidence given in relation to matters which were arguably collateral to the issues material to the respondent's case.  The appellant complains that the learned trial judge should not have relied upon any of these matters in reaching his decision.  I shall refer to these matters in more detail when I address the appellant's submissions in this regard.  For the present, it is sufficient to say that the learned trial judge's rejection of the appellant's evidence was, in my view, amply justified by the considerations summarised in paragraph 18 of my reasons.

[24]  Further, it is to be emphasised at this point that the rejection by the learned trial judge of the appellant's evidence did not lead his Honour "automatically" to accept the evidence of the respondent in relation to the crucial conversation.  His Honour identified substantial reasons for accepting the evidence of the respondent.  The respondent's involvement in Hamlyn Crest was not suggested to have involved the respondent incurring any personal expense, or making arrangements for meeting the expenses of establishing and running the company.  These expenses must have been met from other sources.  The arrangement for the deployment of such resources must have been made by people other than the respondent.  Further, the respondent was originally offered no payment for assuming the role of director of the company.  There was certainly no suggestion that he ever received any remuneration other than the $1,000 per week received well after the original arrangements for the formation of the company had been completed.  In circumstances where the respondent was agreeing to "lend his name" to a business from which, at that time, he was not to receive any benefit, it was no more than ordinary prudence on his part to seek and obtain an assurance - such as that said to have been given in the telephone conversation - that he would not himself be out of pocket as a result.

[25]  It is convenient to note here that one of the appellant's particular complaints about the judgment is that the respondent's evidence of the crucial conversation with the appellant diverged substantially from the respondent's pleaded case and his particulars.  The appellant emphasised that the pleaded case was put in different terms (the word "indemnity" was not used) and the particularised agreement was alleged to have been made at the Gold Coast.  The learned trial judge adverted to these points.[4]  In relation to the particulars, which asserted that the relevant conversations had taken place at the Gold Coast rather than by telephone when the appellant was in Vanuatu, the respondent denied that he had given such instructions to his solicitors.  The learned trial judge was willing to accept that there may have been an error on the part of the solicitor. 

[26]  I do not accept the appellant's submission that his Honour must be taken to have erred in this regard.  Experience suggests that misunderstandings between lawyers and clients occur not infrequently.  The appellant asserts that this explanation is not satisfactory in this case because, as appears from an affidavit that the appellant read on the appeal without objection from the respondent, the respondent's solicitor was related to him.  Therefore, it is said, the solicitor would have been scrupulous to ensure that no such error was made.  The existence of that relationship was not made known to the learned trial judge; but it seems to me that, if it is relevant at all, it does not detract from his Honour's willingness, having seen and heard the respondent give evidence, to ascribe the divergence between the respondent's evidence and his case as pleaded and particularised to an error in communication.  All lawyers, whether or not related to their clients, no doubt do their best to ensure that they accurately reflect their client's instructions, but imperfections in human communication mean that their efforts are sometimes in vain.

[27]  Before I turn to discuss further the grounds on which the appellant challenges the judgment against him, I should also mention here the evidence of Wayne Evans.  Mr Evans said that he was a friend of the appellant, and had visited him twice while living in Vanuatu.  Keyfact Pty Ltd, a company of which Mr Evans was a director, provided services to Hamlyn Crest.  Hamlyn Crest took over premises previously occupied by another company of which Mr Evans' brother-in-law was a director.  He said that payments for his company's services came by international transfer from Hong Kong.  He said that he saw the appellant at the Orchid Avenue premises of Hamlyn Crest from time to time.  Mr Evans was, of course, unable to give evidence in relation to the crucial conversation at which he was not present.  The most important feature of Mr Evans' evidence, however, is that it left the circumstances of the respondent's initial involvement with Hamlyn Crest a mystery so far as the case made for the appellant was concerned.  In this important respect, it affords no support for the appellant's evidence. 

[28]  I turn now to consider the appellant's submissions.

An oral guarantee

[29]  The appellant contended in written submissions that the promise found by the learned trial judge was a guarantee, and was, therefore, unenforceable because there was no written note or memorandum of the promise as required by s 56 of the PLA.

[30]  There are two answers to this contention which was, in any event, not pressed on the hearing on the appeal.  First, the absence of a written memorandum of the appellant's promise was not pleaded in his defence.  It has long been established that, notwithstanding the language of s 56 of the PLA, an action may be brought on an oral guarantee, and that the absence of written evidence of the guarantee is a defence which must be pleaded if the absence of written evidence is to defeat the claim on the guarantee.[5]  Thus, the absence of a written note or memorandum of the appellant's promise was simply not an issue in the case.[6]

[31]  The second answer to the appellant's contention is that the promise found by the learned trial judge was not a guarantee:  it was not a promise to answer for the debts of another.  The promise found by his Honour was not that the appellant would pay any debts owed by Hamlyn Crest to the respondent, but that the appellant would pay "any liabilities" incurred by the respondent as a result of becoming a director of Hamlyn Crest.  The respondent's debt to the DCT is a liability of the respondent, and no less so because it arose by reason of the failure of Hamlyn Crest to comply with its obligations as an employer in respect of the remittance of group tax payments to the DCT.

[32]  At the hearing of the appeal, the guarantee point was relied upon only as a "straw in the wind" pointing to the incompetence of counsel who had failed to plead by way of defence the absence of a written note or memorandum of the appellant's promise.  As is apparent, however, this is not a case where the relevant promise sought to be enforced could have been categorised as a guarantee.  The appellant's counsel at trial cannot be criticised for failing to plead this ground of defence. 

Collateral issues and the incompetence of counsel

[33]  The appellant complains that his entitlement to a fair trial was prejudiced by the fact that the learned trial judge relied upon evidence of matters collateral to the issues between the parties.  In this regard, the appellant complains of the learned trial judge's reliance upon evidence:


(a) relating to his strategy of concealment of his business and property connections; and

(b) evidence that the appellant had sworn a false affidavit in Family Court proceedings, which evidence the learned trial judge accepted as reflecting adversely on the appellant's reliability as a witness.

[34]  There was also evidence led by the respondent that the appellant made a false statement in 2004 to the Child Support Agency that the rent on his unit was paid with the assistance of his father-in-law.  His Honour rejected the appellant's attempt to put an innocent explanation upon this false statement.

[35]  The obvious point to be made in relation to these complaints is that the evidence in question was admitted without objection by the appellant's counsel at trial.  Whether or not the evidence would have been admitted over objection, it was not objected to, and it was admitted.  It is, therefore, nonsense to speak of the learned trial judge relying on inadmissible evidence.  The respondent's position is that the appellant is bound by the conduct of his case below.[7] 

[36]  The appellant replies that the appellant's representation at trial was so abjectly and manifestly incompetent that there has been a miscarriage of justice.  Further in this regard, the appellant points at the failure of his counsel at trial to lead evidence in answer to the collateral points made against the appellant, and the failure of his counsel adequately to cross-examine the respondent in relation to the crucial conversation.

[37]  In relation to the evidence led in the respondent's case to demonstrate the appellant's strategy of concealing his association with business and property, it seems to me that this evidence was not collateral to the issues in the case.  Rather, it was admissible as evidence, both of the appellant's modus operandi in business, and of the relationship between the appellant and the respondent without which the crucial conversation may have seemed odd or unreal.[8]

[38]  As to the other evidence of which the appellant complains, the appellant seeks to import into a civil case the stringent rules developed to prevent miscarriages of justice in criminal cases.[9]  There are powerful reasons, associated with values of individual autonomy and the finality of litigation, for resisting attempts to import into civil litigation those qualifications upon the adversarial system which have been accepted as necessary to protect the liberty of the subject in the law of criminal procedure.  But even in criminal cases, it is established that the incompetence of counsel is no ground to regard a result adverse to the accused as involving a miscarriage of justice unless the conduct of counsel of which complaint is made is not explicable by reference to the possible pursuit of some forensic advantage.[10] 

[39]  In the present case, it seems to me that there "could be a reasonable explanation for the course that was adopted at trial"[11] by the appellant's counsel in relation to much of the now challenged evidence.  The evidence of the appellant's false statement to the Child Support Agency, and of his falsely swearing an affidavit in matrimonial proceedings (all of which were disputed by him), could have been thought to afford the appellant the opportunity to appear as the victim of a vendetta on the part of the respondent, the respondent's daughter and the appellant's estranged wife of which a false claim by the respondent in the present proceedings was but one aspect.  Such a strategy might well be regarded as fraught with risk; but the assessment of the extent of that risk depends upon the totality of the instructions from client to counsel, and that information this Court does not have.  There is, however, available to this Court some evidence of the appellant's instructions to his trial counsel.  The affidavit which the appellant was permitted to read on the hearing of the appeal deposed to the circumstance that the appellant orally instructed his counsel at the trial that both the respondent's daughter and his estranged wife "bear considerable antipathy towards him and are intent upon hurting him financially".  The affidavit does not purport to be comprehensive in relation to the instructions provided by the appellant to his counsel at trial; but it can be seen that a strategy of the kind which I have hypothesised would be consistent with these instructions.  Further in this regard, it is apparent from the learned trial judge's reasons that the appellant at trial did indeed seek to argue that the respondent's daughter and his estranged wife had put "their heads together to give a false account of the (appellant's) involvement in these businesses, an account which the (appellant) denied".[12] 

[40]  It is of some interest that the appellant's affidavit does not complain that he regarded himself at any disadvantage at the trial as a result of having to address the matters said to be collateral or that he raised any concern on his part in that regard with his trial counsel.   

[41]  It may also be that the multiplication of credibility issues might have been thought to be likely to enure to the disadvantage of the respondent as the party who bore the onus of proof at trial.  Especially is this so where, as the learned trial judge said, whether or not the activities in which Hamlyn Crest was involved were illegal, they brought no credit upon any of the individuals involved. 

[42]  Finally, it might also have been that the appellant's counsel was keen to present the appellant as a person with nothing to hide.  Experienced advocates often adopt a tactic of insouciance. 

[43]  The appellant's complaint is also that, although the appellant's counsel at trial cross-examined the respondent on some of the differences between the respondent's pleaded case and his testimony at trial, his counsel failed to cross-examine the respondent adequately on the terms of the crucial conversation.  The old adage that "one can't make a silk purse out of a sow's ear" springs to mind.  The appellant's case was essentially a denial of the respondent's evidence.  That bare denial was not particularly plausible in the circumstances to which I have referred.  The discrepancies between the respondent's case as pleaded and particularised were readily apparent and were noted by the trial judge.  The appellant's counsel at trial may well have thought that to press the respondent with all the discrepancies between his pleaded case and his evidence-in-chief would merely provide the respondent with a further opportunity to explain those discrepancies.

[44]  The appellant also complains in the affidavit which he was permitted to read on the appeal that his counsel at trial failed to cross-examine his estranged wife in accordance with his instructions that she had been ordered by the court in England to return to Australia with their daughter pursuant to the Hague Convention on Child Abduction.  It is apparent from the record that the appellant's counsel sought to cross-examine his estranged wife about the custody case, and that she refused to respond to those questions on the basis that she had been given legal advice not to discuss the custody proceedings.

[45]  Even if the appellant's complaints in relation to the conduct of the trial were to be accepted, I am of the opinion that on the whole of the evidence there is sufficient support for the decision of the learned trial judge to conclude that matters of which the appellant complains did not lead to a miscarriage of justice so as to warrant a new trial.[13]

[46]  The appellant's complaints under this heading should, in my respectful opinion, be rejected.

The weight of the evidence

[47]  The weight of the evidence upon which the learned trial judge was entitled to act amply justified the conclusion to which his Honour came.

[48]  The findings made by the learned trial judge in favour of the respondent were not inconsistent with admitted or proven facts, they were not inherently improbable and they were reasonably open on the evidence.[14]

Conclusion and orders

[49]  The appeal should be dismissed.  The appellant should pay the respondent's costs of the appeal to be assessed on the standard basis.


[1] [2005] QDC 163 at [28].

[2] [2005] QDC 163 at [32].

[3] [2005] QDC 163 at [35].

[4] [2005] QDC 163 at [36].

[5] See Marginson v Ian Potter and Co (1976) 136 CLR 161 at 168.

[6] Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at 461 [51] - [52].

[7] University of Wollongong and Ors v Metwally (No 2) (1985) ALJR 481 at 483.

[8] O'Leary v The King (1946) 73 CLR 566 at 577 - 578.

[9] Cf TKWJ v The Queen (2002) 212 CLR 124.

[10] Ali v The Queen [2005] HCA 8; (2005) 79 ALJR 662 at 664 - 665 [7] - [13], [17] - [18], 666 [25], 677 [98] - [99].

[11] Ali v The Queen [2005] HCA 8; (2005) 79 ALJR 662 at 666 [25].

[12] [2005] QDC 163 at [30].

[13] See Uniform Civil Procedure Rules 1999 (Qld), r 770; Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 39; cf Piddington v Bennett and Wood Pty Ltd (1940) 63 CLR 533 at 554, 560 - 561.

[14] State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306 at 331 - 332; Fox v Percy (2003) 77 ALJR 989.


Editorial Notes

  • Published Case Name:

    Deputy Commissioner of Taxation (Cth) v Luckhardt & Anor

  • Shortened Case Name:

    Deputy Commissioner of Taxation (Cth) v Luckhardt

  • MNC:

    [2006] QCA 53

  • Court:


  • Judge(s):

    McMurdo P, Williams JA, Keane JA

  • Date:

    03 Mar 2006

  • White Star Case:


Litigation History

No Litigation History

Appeal Status

No Status