Fulton v Burnett[1998] QCA 49

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 5458 of 1997

Appeal No. 10690 of 1997

Brisbane

BETWEEN: 

MAXWELL ROBERT FULTON

(Plaintiff) Appellant

AND:

PAMELA MARY MILLICENT BURNETT

(Defendant) Respondent

Fitzgerald P

Davies JA

Williams J

Judgment delivered 20 March 1998.

Judgment of the Court.

APPEAL NO. 5458 OF 1997 DISMISSED WITH COSTS.

APPEAL NO. 10690 OF 1997 ALLOWED; ORDER FOR COSTS MADE IN THE DISTRICT COURT SET ASIDE; ORDERED IN LIEU THAT THE APPELLANT PAY 80% OF THE RESPONDENT’S COSTS OF AND INCIDENTAL TO THE TRIAL OF THE CLAIM AND COUNTERCLAIM; AND THE RESPONDENT TO PAY THE APPELLANT’S COSTS OF AND INCIDENTAL TO THIS APPEAL.

CATCHWORDS: CONTRACTS - financial agreement for purchase of house within de facto relationship - status of document - document not intended to record or vary terms of oral contract.

COSTS - general rule: costs follow the event - costs of issues where claim and counterclaim - whether successful respondent should recover costs of significant issues on which she failed - appropriate percentage.

District Court Rules 1968, r. 363. 

Sunbird Plaza Pty Ltd v. Boheto Pty Ltd [1983] 1 Qd.R. 248 distinguished.

Counsel: Mr G Brandis with him Mr D Atkinson for the appellant

Mr P Dutney Q.C. with him Mr M Evans for the respondent

Solicitors: Barry & Nilsson for the appellant

N.R. Barbi for the respondent

Hearing Date:  12 March 1998

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 5458 of 1997

Appeal No. 10690 of 1997

Brisbane

Before  Fitzgerald P

Davies JA

Williams J

BETWEEN: 

MAXWELL ROBERT FULTON

(Plaintiff) Appellant

AND:

PAMELA MARY MILLICENT BURNETT

(Defendant) Respondent

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 20 March 1998

The appellant has appealed against a District Court judgment delivered on 23 May 1997 and a subsequent order for costs made on 31 October 1997.  He was the plaintiff in the District Court action.  The respondent, the defendant, succeeded on her primary counterclaim.  The present appeals relate to part only of the District Court’s judgment and orders; namely, the costs order and a declaration that the respondent holds a house property “subject to a trust for the benefit of herself and [the appellant] so that upon the sale of that house and land she shall pay from the sale price -

1. $100,000 to [the appellant];

2. $19,812.05 to herself

and then all remaining proceeds of the sale shall be divided equally between them”.  Although the appellant’s notice of appeal does not expressly ask for that declaration to be set aside, that is implicit in the orders which he seeks; which are, so far as presently material, the following:

“... That the Respondent pay the Appellant a sum of $95,000 together with interest pursuant to the agreement dated 14 March 1988.

... That the Respondent pay the Appellant a further sum of $5,000 with interest pursuant to the Supreme Court Act.

... Alternatively ... that the Respondent pay the Appellant the sum of $100,000 together with interest pursuant to the Supreme Court Act.”

The foundation of the appellant’s argument is what is referred to in the orders which he seeks in his Notice of Appeal as “... the agreement dated 14 March 1988".  The trial judge found that the respondent signed a two page document dated that day which was in the following terms:

“PARTICULARS OF LOAN TO P.M.M. BURNETT

NAME AND ADDRESS OF MONEYLENDER:

Maxwell Robert FULTON

Officers’ Mess,

RAAF Base,

AMBERLEY....QLD....4305.

NAME AND ADDRESS OF BORROWER:

Pamela Mary Millicent BURNETT

33 Headfort Street,

GREENSLOPES....QLD....4120.

AMOUNT OF LOAN:

Ninety-five thousand dollars ($95,000.00)

TERM OF LOAN:

4 years 6 months - maturing 15th September, 1992

REPAYMENTS:

$1,192.65 monthly in advance

First monthly interest payment effective 1st April, 1988

SECURITY:

Certificate of Title Deed for the house and property at 31 Tallaroon Street, Jindalee, Lot 297 on RP 106947 County of Stanley Parish of Oxley Volume 3819 Folio 44 Area of 41.7 p.

I agree with the above Terms and Conditions of the Loan.

DATED this fourteenth DAY OF March 1988.

(signed)      (signed)

_______________________    ______________________

Witness      P.M.M. Burnett

I, Pamela Mary Millicent BURNETT, of 33 Headfort Street, GREENSLOPES in the State of Queensland, hereby acknowledge have received a bank cheque from Maxwell Robert FULTON in the sum of Ninety-five thousand dollars ($95,000) made payable to P.M.M. BURNETT, representing Loan on this Agreement.

- 2 -

DATED THIS fourteenth DAY OF March 1988.

(signed)      (signed)

_______________________    ______________________

Witness      P.M.M. BURNETT  ”

The appellant relied upon a statement by McPherson J., with whom Campbell C.J. agreed, in Sunbird Plaza Pty Ltd v. Boheto Pty Ltd^[1] to the effect that a person is bound by a written contract which he or she has signed “because, by signing it, he manifests his assent to the terms it contains ... , whether or not he has read or knows of those terms, and subject only to certain exceptional circumstances recognised by law such, for example, as give rise to a defence of non est factum or operative mistake in the law of contract”.

However, the respondent’s case, which was accepted by the trial judge, was that she did not sign the document dated 14 March 1988 as a contract.  His Honour, who rejected the appellant’s evidence and accepted much, but not all, of the respondent’s evidence, found that, prior to 14 March 1988, the parties had agreed “to live together in a de facto marital relationship”, that a home would be purchased in the respondent’s name, that she would contribute to its purchase price and associated expenses but that the balance of the purchase price would be paid by the appellant from moneys which he would borrow and that, in the event that their relationship ended, the property would be sold, their respective contributions repaid and any profit divided between them equally.  His Honour also found that the house property the subject of the declaration was purchased by the respondent to give effect to this agreement by a contract dated 18 February 1988 under which the purchase price was $118,000, and that the appellant paid a deposit of $5,000.  The appellant borrowed an amount in excess of $95,000 and lent that sum to the respondent by a cheque which she deposited on 11 March 1988.  Subsequently, she completed the purchase of the house property, providing $18,000 of her own money and using a further $1,812.05 to pay legal fees and stamp duty.

It is of critical importance that the trial judge accepted the respondent’s evidence that she signed the document dated 14 March 1988 following a statement by the appellant, which neither party alleged was false, that the purpose of the document was merely an acknowledgement that she had received $95,000 in order to protect his children: “... if anything happens to us it’s really the kids’ money.”  The document was not intended to record the terms of the parties’ oral contract or to vary those terms in any way.  It was not intended to have contractual effect by the respondent, or by the appellant if his statement to the respondent concerning the purpose of the document was truthful.  This was not a novelty in the parties’ relationship; there was at least one earlier document which they signed which was not intended to have legal effect according to its terms.

That was the effect, although not the precise terms, of the trial judge’s findings.  In the circumstances, the appellant has not demonstrated that his Honour’s dismissal of the appellant’s claim based on the document was erroneous.  Nor has any error been shown in the declaration made, which was in conformity with the factual findings.

The appellant’s other appeal was against an order that he pay 95% of the respondent’s taxed costs of and incidental to both the appellant’s claim and the respondent’s counter claim.  The trial lasted five weeks, and was conducted on the basis of pleadings which had been amended on a number of occasions.  Numerous claims, some alternative to others, were made by each of the parties.  While the appellant failed on all of his claims, he successfully defended some of the respondent’s claims and defeated some of her defences to some of his claims.  In particular the appellant successfully answered the respondent’s allegation that the “loan agreement” had been fraudulently altered, her allegation that there was no consideration for the loan agreement, and her contention that if a constructive trust existed her own interest had been increased proportionately because she had participated in obtaining the loan monies for the house; and he also successfully defended six specific claims made by the respondent in her counter claim.  The total amount in issue in the counter claim on which the appellant was successful exceeded $200,000.

Counsel for the appellant asked the District Court judge to order that the respondent pay the costs of  proving the authenticity of the “loan agreement”; experts were called.  The appellant succeeded on that issue but it was not decisive.  The District Court judge concluded that the circumstances were not sufficiently unusual to justify him making such a special order.  Further, counsel for the appellant asked the District Court judge for an order that the respondent pay the appellant’s costs of proving facts detailed in a notice to admit facts delivered 11 days prior to trial.  Because that notice was delivered after the signing of the certificate of readiness, the cost consequences referred to in the rules did not apply; the question remained to be answered in the exercise of discretion.  The District Court judge declined to exercise his discretion in favour of the appellant as a mark of the court’s disapproval of the breach of the rule.  But it appears obvious that the appellant incurred costs in proving some of the matters referred to in that notice; it is not possible for this court to be more definite in its conclusion because the whole of the record was not reproduced.

The District Court judge noted r.363 of the District Courts Rules and specifically rejected the appellant’s submission that he had “succeeded in the substantial part of his claim”.  On the contrary, his Honour stated that he had accepted the respondent’s primary case and that a “review  of the issues raised by the parties will reveal [the appellant’s] lack of any success in this action”.  He noted that the respondent had failed in some of her claims but found that substantial issues on which she succeeded were fundamental to the major disputes between the parties and said that “[v]ery little time was spent in court hearing the evidence directed to the claims upon which [the respondent] did not succeed”.  The judgment then concluded:

“... There may, of course, have been some costs incurred by [the appellant] for the purpose of resisting those claims especially that relating to question of workmanship and of Council or Building Code requirements.  I am aware of the view that the complicated taxations which would be necessary to give effect to an order which recognises that [the respondent] succeeded on issues raised both by [the appellant] and by herself while failing on other issues raised by her should be avoided (see Colburt v. Beard [1992] 2 Qd.R. 67 at p.75).  I exercise the discretion conferred by Rule 363 and shall give the ‘direction’ referred to therein rather than leave costs to follow the result of each of the causes of action raised by the claim and counterclaim.  I order that the [respondent’s] costs of and incidental to both the [appellant’s] claim and to the [respondent’s] counterclaim be taxed and that 95% thereof be paid by the [appellant] to the [respondent].  That order is intended to reflect the view that, on balance, it was [the respondent] who had the greater measure of success.  Viewed objectively, [the appellant] can be described as having only a pryhhic [sic] victory on issues raised by [the respondent].  I referred during the submissions on costs to two English decisions upon a rule similar to Rule 363: Anglo-Cyprian Trade Agencies Ltd v. Paphos Wine Industries Ltd (1995) 1 All E.R. 873 and Alltrans Express Ltd v. CVA Holdings Ltd (1984) 1 All E.R. 685.  Although neither case involved a counterclaim, each is instructive as to the broad view which can be taken to the question of ‘success’ in an action and as to the need to approach the result in a practical way.”

In summary, it was the District Court judge’s opinion that the respondent was almost entirely successful in the action, or at least in respect of those parts of the action which occupied almost all of the trial.  Conversely, it was his opinion that the appellant was almost entirely unsuccessful.   As already noted this Court does not have a full record of the trial, but there is sufficient before us to demonstrate that the District Court judge erred in the exercise of his discretion in reducing the respondent’s recoverable costs by only 5%.  The effect of his order is that the respondent will be recovering costs of significant issues on which she failed and on some matters which could have been the subject of admission at the outset of the trial.

When one has regard to the substance of the passage quoted above from the reasons of the District Court judge and the observations made herein on the costs question, it becomes obvious that the respondent should recover no more than 80% of her costs of and incidental to the trial of the claim and counterclaim.

Appeal No.  5458 of 1997 should be dismissed with costs.  Appeal No. 10690 of 1997 should be allowed and the order for costs made in the District Court be set aside and in lieu thereof it be ordered that the appellant pay the respondent 80% of the costs of the trial of the claim and counterclaim.  The respondent should pay the appellant’s costs of that appeal.