Appellant v Respondent

2 Ms Proctor brought a counterclaim in the same proceedings before the Magistrates' Court for services performed in training and livery services for two other horses owned by Ms Kennedy.[1] However, the appeal relates only to the dispute over the ownership of Ishker.

3 The parties to this proceeding met in 2014 in Gembrook, Victoria. The appellant, Ms Andrea Kennedy engaged the respondent, Ms Tarryn Proctor, to give her daughter horse riding lessons. Ms Proctor was an able horse woman and aspiring dressage rider. Ms Kennedy later also received horse riding lessons personally from Ms Proctor. A very close relationship developed between Ms Kennedy and Ms Proctor, described by the learned Magistrate as 'an extremely close relationship such as one might exist between a mother and daughter'[2] and that 'loving relationship is borne out by the evidence given by the parties themselves.'[3]

4 At some time in 2014, Ms Proctor fell off her horse when competing at an event and suffered serious injuries from the fall. Unfortunately, 'Quest', the horse that she had been riding at the time, had a serious injury and could no longer be ridden at competitive events.

5 In November 2014, Ms Kennedy recognising the keen commitment to competitive horse riding shown by Ms Proctor, offered to buy a horse to enable Ms Proctor to continue to compete. Ms Kennedy purchased a horse known as 'Ishker' in the sum of $20,000. The horse 'Ishker' is the subject of the ownership dispute.[4] The $20,000 purchase price was paid directly by Ms Kennedy to the vendor. 'Ishker' travelled from the vendor's property directly to Ms Proctor's property in February 2015.

6 It was clear that Ms Kennedy did not want anyone to know about the arrangement between herself and Ms Proctor. Ms Kennedy did not tell her husband or her daughter about purchasing Ishker. It was common ground between Ms Kennedy and Ms Proctor that Ms Kennedy wished to have the arrangement hidden from her husband and her daughter as Ms Kennedy believed that they would be jealous if they knew of the arrangement.[5]

7 In or around November 2016, Ms Proctor had conversations with a friend, who owned a stallion, about artificially inseminating Ishker. In December 2017, Ishker produced a colt named (Trooper). Ms Kennedy paid for the embryo to be implanted. At the time of the hearing before the Magistrates' Court no claim had been made for Trooper by Ms Kennedy.[6]

8 It is not recorded when or why the close relationship between Ms Kennedy and Ms Proctor broke down but 'the relationship had come to an end on any view in September 2018'[7]. On 25 October 2018, Ms Kennedy's husband, Russell Kennedy sent a text message to Geoff Proctor, the father of Ms Proctor which said:

Hi Geoff would you have any idea when we will see the money for the debt owing by Tarryn (which I had no idea that money was lend [sic] in the first place) Also would you be able to grab my electric scooter and charger and given to Shaun on Tuesday would be great thanks Russell.

9 Ms Kennedy formally demanded the return of Ishker on 4 December 2018 via a letter of demand.

10 There was no dispute that Ishker was purchased for $20,000 nor was it in contention that Ishker came to reside at the property where Ms Proctor resided. It was also common ground that Ms Kennedy wished to have the arrangement hidden from her husband and from her daughter.

11 Ms Kennedy contends that Ishker was loaned to Ms Proctor for her non-exclusive use and enjoyment as a competition horse. Ms Proctor argues that Ishker was gifted to her (Dispute).[8]

12 The Dispute was heard by Magistrate Foster in the Magistrates' Court of Victoria on 17 March 2020 over three days.

13 On 19 March 2020, the learned Magistrate handed down an ex tempore (oral) decision, which held that Ms Kennedy had on the balance of probabilities gifted the horse to Ms Proctor.

14 His Honour stated the relevant legal principles as being of those identified in Nolan v Nolan.[9] There are three valid ways of making a valid gift of a chose in possession inter vivos, being a deed, a declaration of trust and delivery. As there was no question of a deed or a declaration of trust, the only relevant manner of making a gift was by delivery.[10]

15 The essential elements required to establish a valid gift were set out as being the intention to make a gift (usually expressed by words), the intention on the part of the donee to accept the gift and delivery.

16 The learned Magistrate found that both parties endeavoured to give truthful evidence at the trial. However, his Honour found there to be some significant differences between the parties' oral evidence and as such, his Honour looked to some of the written documentation to give context to the veracity of the evidence given.[11] His Honour also considered the oral evidence of Ms Kowalski but for reasons stated in his decision he did not place any weight on that evidence.[12] The documentation to which his Honour made reference included text messages, a certificate of registration and a statement of assets in a family law proceeding concerning Ms Proctor.

17 Firstly, there was a text message from Ms Kennedy to Ms Proctor in that stated:

I furious [sic] cause I refused my name on Ishker but now I regret not having my name on Woody cause I could have just taken him back the difference was you deserved her and I thought she did too.

18 The context of the text message is that Ms Kennedy had purchased a horse named Woody and generously given or loaned Woody to a 16-year old girl, named Lucy. Lucy was apparently not giving Woody the requisite care required, which resulted in Ms Kennedy wanting return of Woody to her possession. The learned Magistrate viewed that Ms Kennedy had identified a difference in what could have been a similar approach taken to Lucy in relation to Woody and Ms Proctor in relation to Ishker.[13]

19 Secondly, the learned Magistrate considered a Certificate of Registration document issued by Equestrian Victoria (Certificate). The certificate named Ms Proctor (but not Ms Kennedy) for the purposes of the registration. A Certificate is required to be lodged for horses that are intended to compete at events. It is noted that on the relevant application paperwork it is specifically stated that the Certificate is not title of ownership.

20 Registration of the horse whilst not in itself proving legal title was considered by the learned Magistrate to be 'certainly indicia of those matters' and the fact that Ms Kennedy allowed Ms Proctor to register the horse in her name indicated an 'intention to make the gift and the clear intention on the part of the donee, Ms Proctor, to accept the gift.'[14] The learned Magistrate considered that the Certificate, together with Ms Kennedy's own words in the text message (referred to above) that Ms Proctor 'deserved her', and the fact that Ms Kennedy had the option to have her name on the registration documents but did not do so was evidence supporting Ms Kennedy's intention of making the gift. This was so notwithstanding the evidence of both parties that Ms Kennedy did not want the world at large to know of the arrangement.

21 Thirdly, the Magistrate considered the timing of the initial demand of return of Ishker in the context of the text message sent on 25 October 2018 from Ms Kennedy's husband, Mr Russell Kennedy, to Ms Proctor's father, Mr Geoff Proctor (October text), which stated:

Hi Geoff would you have any idea when we will see the money for the debt owing by Tarryn (which I had no idea that money was lend [sic] in the first place) Also would you be able to grab my electric scooter and charger and given to Shaun on Tuesday would be great thanks Russell.

22 The Magistrate noted the omission of demanding Ishker in the text message. His Honour highlighted that such a demand was not made formally until a letter was sent by Ms Kennedy and her husband to Ms Proctor on 4 December 2018. The demands for return of debt and property in the October text and the absence of a reference to Ishker was found to be notable by the Magistrate.

23 Fourthly, the Magistrate noted that in separate family law proceedings between Ms Proctor and her ex-husband, Ishker was included in a deed of settlement that itemised Ms Proctor's possessions for the purposes of asset division. The Magistrate took this evidence to indicate Ms Proctor's acceptance of Ishker as a gift from the appellant.

24 The absence of a claim upon the progeny of the Ishker, Trooper, was also considered by the learned Magistrate as significant.[15] His Honour expressed the view that the absence of a claim upon Trooper in the context of the other demands being made, which followed the breakdown of the relationship in September 2018 was significant and supported the claim by Ms Proctor.[16]

(a) Did the Magistrates' Court fall into error in applying the legal test to decide if the horse named Ishker was gifted by the appellant to the respondent? (Grounds 1, 2, 3, 4 & 5)

(b) Was it open to the Court to hold, on the documentary evidence referred to in its reasons for decision, that the essential elements of a valid gift of the horse were satisfied at law? (Grounds 1, 2, 3 & 5)

26 Ms Kennedy argued that the Magistrates' Court fell into error in applying the legal test to decide that Ishker was gifted.

27 It was not disputed that the learned Magistrate had identified the correct legal test of a gift as per Nolan v Nolan.[17] The question was whether his Honour applied that test to the evidence before him and whether there was probative evidence to discharge the burden of proof.

28 In essence, the real contention is the manner in which the Magistrate has dealt with the evidence, in order to satisfy himself that the legal test had been met and the burden of proof satisfied.

29 The appellant provided the below grounds of appeal in her written submissions. Ms Kennedy maintained that the trial judge erred in law by:

1. finding or holding that a text message between Ms Kennedy and the respondent manifested or constituted donative intention on the part of the appellant with respect to Ishker; and/or

2. finding or holding that by allowing the respondent to register the Horse with Equestrian Victoria without inclusion of the appellant's name as owner or as one of the owners manifested or constituted donative intention on the part of the Appellant with respect to Ishker; and/or

3. finding or holding that the demand made by the appellant's husband, Russell Kennedy, to the respondent's father, Geoff Proctor, made on 25 October 2019, manifested or constituted donative intention on the part of the appellant with respect to Ishker being documentary evidence the Court ruled inadmissible; and/or

4. finding or holding that the absence of a claim in the aforesaid demand or in her proceeding by the appellant upon the progeny of Ishker viz a colt named 'Trooper', manifested or constituted donative intention on the part of the appellant with respect to the Horse; and/or

5. finding or holding that the terms of an Order in case number (P)MLC14724/2018 filed in the Federal Circuit Court of Australia between Evan Wayne Pettigrove (Applicant) and the Respondent (First Respondent), by which Ishker was retained by the Respondent in their property division, manifested or constituted an 'acceptance' of the purported gift of the Horse by the appellant to the respondent.

30 The learned Magistrate set out the requirements for a gift to be effective at law as set out in Nolan v Nolan (Nolan Trial),[18] which was upheld on appeal (Nolan Appeal).[19] In Nolan Trial, the trial judge stated that the essential three elements of a valid gift of a chattel inter vivos (while alive) (in the absence of a deed of gift or direction declaration of trust) are:

(a) the intention to make a gift usually expressed by words;

(b) intention on the part of the donee to accept the gift; and

(c) delivery.

31 The Court of Appeal upheld the three elements of a valid gift consistent with the trial judge's formulation.

32 In the matter before me, the intention of Ms Kennedy to gift Ishker was the crucial issue at trial. Ms Proctor bore the onus of establishing that Ishker was gifted to her by Ms Kennedy.[20]

33 In Nolan Trial, the relevant facts were as follows. Jinx Nolan, the adopted daughter of Sir Sidney Nolan, issued proceedings against Sir Sidney's widow, Lady Mary, claiming beneficial ownership over three paintings. The paintings in question were alleged to have belonged to Jinx's mother, Cynthia Nolan, who was the previous partner of Sir Sidney and had passed away. Jinx claimed that the paintings were gifted to Cynthia by Sir Sidney and that as Jinx was the beneficiary of her mother's estate, the paintings belonged to her. The trial judge dismissed the proceeding as the claim was made out of time. Jinx appealed to the Court of Appeal, which dismissed the appeal upholding the trial judge's decision that the claim was statute barred.[21] While the Court of Appeal upheld the trial judge's approach to the legal elements of a gift, they disagreed with her Honour's approach to the evidence, which is discussed in greater detail below.

34 Ms Kennedy argued that the learned Magistrate did not attempt to resolve any conflict between the oral evidence given by the parties.[22] Rather than embarking on 'that rather hard and arduous task' of assessing oral evidence, it was said that his Honour turned instead to the documentary evidence. It was contended that his Honour should have 'considered the oral evidence' and instead bypassed it. This approach was viewed as a misdirection by the appellant given how extensive the oral evidence was.

Treatment of documentary evidence - Application of Nolan Appeal

35 Ms Kennedy submitted that the learned Magistrate did not treat the documentary evidence as circumstantial, but rather, his Honour treated the evidence as indicia of intention. It was argued that the learned Magistrate's treatment of the documentary evidence improperly demonstrated a view that indicated the documents were considered (in and of themselves) to constitute an intention to gift Ishker to Ms Proctor.

36 Ms Kennedy submitted that the legal test as enunciated in Nolan Trial and Nolan Appeal was not appreciated and correctly applied by the learned Magistrate. In Nolan Appeal, the Court of Appeal was critical of the trial judge for examining documentary evidence in a piecemeal fashion, which was an error.[23] Reference was made to the distinction between evidence treated as 'links in a chain' rather than 'strands in a cable'.[24] In this sense, it was argued that the Magistrate fell into the same error as the judge in Nolan Trial.

37 Further, Ms Kennedy argued that the inclusion of Ishker in the deed of settlement within the family law proceedings did not go to Ms Proctor's acceptance of being gifted Ishker. Ms Kennedy claimed that the inclusion of Ishker in the deed of settlement indicated that Ms Proctor had Ishker in their possession, custody and control and no more.

38 Ms Kennedy argued that the trial judge did not apply the appropriate test as stated in Nolan Trial, whereby in the absence of words of gift, the putative donee bears the onus of proving the existence of a present, unequivocal donative intention, attended by the requisite certainty as to object, extent and whether the gift would take immediate effect.[25] It was argued that the documentary evidence does not meet this test.

39 It was not contentious that the insemination of Ishker was paid for by Ms Kennedy. In the hearing below, when asked if Ms Kennedy had made a claim over Trooper, Ms Kennedy had replied 'not yet'. The learned Magistrate had stated his surprise at this answer; the surprise indicating an expectation perhaps that if Ms Kennedy was bona fide in her claims over Ishker then a claim would have also been made over Trooper.

40 Ms Kennedy alleged that the trial judge misdirected himself in considering that by virtue of Ms Kennedy not making a claim for Trooper, there was an inference of donative intention. It was argued that it would be illogical to find that the absence of a claim met the test of donative intention in accordance with the Nolan Trial test.

41 It was submitted that the learned Magistrate's reasons provide an intelligible explanation of the process of reasoning that led him to the ultimate conclusion that was made.

42 Firstly, the respondent argued that it was plain that the learned Magistrate considered the oral evidence. Reference was made to his Honour's reasons in which his Honour stated he believed the parties had endeavoured to give truthful evidence in spite of the differences between the direct oral evidence given.[26] His Honour further stated that in 'identifying those differences, I do need to look to some of the written documentation', which was said to assist in considering the 'veracity of evidence' being given.

43 At a different stage of his Honour's reasons, he said that 'I accept the words that were used by that [sic] Ms Proctor gave that she was told that the horse was to be hers...'.[27] While Ms Kennedy argued that this statement was a recitation, Ms Proctor countered that it is plain his Honour had considered the oral evidence and accepted Ms Proctor's version of events. It was submitted that it was not open to conclude it was a recitation of evidence and these words suggest his Honour did take the oral evidence into account.

44 Ms Proctor argued that the learned Magistrate used the documentary evidence to support the task of determining which of the parties' evidence to prefer.

45 Ms Proctor contended that none of the documents were individually found to manifest or constitute donative intent. Rather, the documents were examined as indicia to support the parties' version of the oral evidence. It was submitted by Ms Proctor that it was plainly open to the learned Magistrate to determine what weight to give each piece of evidence and that was what occurred.

46 A distinction was raised between Nolan Trial and the circumstances in this matter being that in the former, individual documentary evidence was examined to determine donative intent whereas in the latter, documentary evidence was examined to support the respective versions of the oral evidence.

47 Words of gift can be evidence of donative intention whether verbally or in writing. The respondent in her submissions directed to relevant parts of the transcript, where direct oral evidence was given as to the words of gift.[28]

48 An appellate judge should be slow to overturn a primary judge's decision on grounds that involves conflicting evidentiary assessment which go to matters of weight.[29] This case is no exception. The trial judge has had the benefit of seeing the witnesses and making his assessment of their oral evidence. While I have access to the transcript of the trial, I acknowledge that there are communicative nuances that are not capable of being transcribed. My task is limited to considering whether it was open to the trial judge to come to the determination that was made.

49 I note also that the learned Magistrate delivered an ex tempore decision as is commonplace in delivering judgement in the Magistrates' Court. As a consequence, the transcribed version of a decision may not be as refined in its expression as it might be if a written decision were before me.[30]

50 I accept Ms Kennedy's view that the trial judge's task was to examine all of the evidence as a whole or its cumulative effect, rather than each document separately and in isolation from relevant material.[31]

51 It is incumbent upon an arbiter of fact to consider all of the facts at the conclusion of a case, where evidence is said to have a 'cumulative effect'.[32]

52 A true picture can only be derived from an accumulation of detail and assessing the 'overall effect' of the details in their totality.[33] As Tadgell JA explained in Longmuir, the task is to establish

whether the evidence paints a picture to be derived from an accumulation of detail. The overall effect of the detailed picture can sometimes be best appreciated by standing back and viewing it from a distance, making an informed, considered, qualitative appreciation of the whole. The overall effect of the detail is not necessarily the same as the sum total of the individual details.[34]

53 In Longmuir, President Winneke also observed that

[H]is Honour deprived himself of the opportunity of assessing the full impact of [the] evidentiary facts by engaging in a false process of reasoning. Rather than considering what inferences flowed from the combination of evidentiary facts which were not in contest, the learned judge appears to have treated each of the individual evidentiary facts as if it were the ultimate factum probandum; in the sense that unless, when analysed, it was capable by itself of supporting the inference that the respondent was responsible for lighting the fire, it should be discarded without regard to the support which such fact might have received from the other facts.[35]

54 In Chamberlain v The Queen (No 2), Gibbs CJ and Mason J said

that the jury should decide whether they accept the evidence of a particular fact, not by considering the evidence directly relating to that fact in isolation, but in light of the whole evidence, and that they can draw an inference of guilt from a combination of facts, none of which viewed alone would support that inference.[36]

55 While Chamberlain relates to a criminal matter, the principles remains helpful in a civil context.[37]

56 The difference in the present circumstances and Nolan Trial is that the learned Magistrate was not dealing solely with circumstantial evidence as lengthy oral evidence was given by the parties to this proceeding as well as documentary evidence from which his Honour could draw an overall picture of the evidence.

Did the learned Magistrate assess the evidence as a whole?

57 I have concluded that on a fair and proper reading of the Magistrate's reasons, his Honour did consider all of the oral and the documentary evidence and did so globally or cumulatively, as his Honour is required to do.

58 I cannot conclude that his Honour undertook the task improperly as submitted by the appellant.

59 In Nolan Trial, the learned trial judge considered a number of documents in evidencing whether or not Sir Sidney Nolan had gifted paintings to the late Cynthia Nolan. In contrast to the trial judge in that case considering each document in isolation, as though 'running through items on a checklist',[38] I have concluded that the learned Magistrate here has considered the documentary evidence in totality. Ms Kennedy seems to place a different meaning or emphasis on the term 'indicia' used by the learned Magistrate to that which I consider a fair reading of the whole of the decision directs me to conclude. I have understood the use of the term 'indicia', as used by the learned Magistrate, as meaning a 'tendency' or 'indication' that certain documentary evidence supports a particular parties' version of events. He concludes that version of events is that of Ms Proctor.

60 The learned Magistrate did indeed go through each piece of documentary evidence individually in his Honour's reasons. However, examining each piece of documentary evidence and its relative weight individually does not negate that his Honour also considered the evidence as a whole. The utility of going through each piece of evidence is rational given each piece provides a different angle from the picture being analysed from afar.[39] Regardless, his Honour makes reference to evidence being viewed in conjunction with each other in statements such as:

It's that [registration] document together with [the appellant's] own words...that the difference was you deserved [Ishker]'...'I accept the words that were used by...Ms Proctor...that the horse was to be hers was the making of a very generous gift...[40]

61 His Honour framed his ex tempore reasons in the context of finding the parties equally endeavoured to give truthful evidence but that there were some significant differences between them and in order for his Honour to determine which version of the events he preferred he needed to look at the oral testimony with the documentary evidence. While his Honour referred to the documentary evidence as 'indicia' or matters significant in inferring donative intent, there is no failure or error manifest in his reasoning in this regard. Rather, his Honour considered the documentary evidence in order to persuade his view of the oral evidence one way or the other.

62 In the examination of documentary evidence, there is no preclusion from referring to documents in a rational manner. What would be problematic is if the examination of the documents was done in isolation with each document being assessed as proof or otherwise of an element that needed to be proven of documents in an almost list-like fashion.[41] I cannot conclude that this is the manner in which his Honour approached the documentary evidence as alleged by Ms Kennedy.

63 I disagree with the appellant's submission that the absence of a claim made for Ishker's progeny, 'Trooper' bears no relevance to the claim made by Ms Kennedy for Ishker. It was open to his Honour to infer this from the oral evidence and the chronology of events and behaviour. It was a fact from which an inference of intention could be drawn in the context of all of the evidence.

64 The burden of proof (on the balance of probabilities) rested with Ms Proctor. His Honour was not satisfied on the oral evidence alone that Ishker had been gifted to Ms Proctor, given the differences in the parties' respective versions of the facts. What his Honour did, appropriately, was to look at the balance of the evidence. There was documentary evidence of different forms and whilst each piece of evidence alone was not proof of any one or more elements of the test to be met, his Honour was satisfied that a conclusion could be made on the balance of probabilities that there was a gift of Ishker from Ms Kennedy to Ms Proctor.[42]

65 In my assessment of the reasons, his Honour did not attempt to evaluate each piece of documentary evidence in insolation but looked at all of it in the context of the oral evidence.

66 What is necessary is a holistic assessment - all of the strands leading to a conclusion which meets the evidentiary burden. The improper methodology that the Court of Appeal criticised in Nolan Trial, of looking at each piece of evidence individually and then discarding it if it was not conclusive, did not occur here.

67 The appellant urged upon the Court the significance of the decision in this matter and concerns in the equestrian world where, I understand, that horses are often loaned to professional or aspirational competition riders. If it is the practice in equestrian circles for valuable horse to be loaned then it would no doubt be prudent for the arrangement to be documented.

68 I do not find error in the approach to the evidence nor the application of the legal test to that evidence in the reasons provided by the learned Magistrate.

[1] Amended Statement of Counterclaim, filed in Kennedy v Proctor (Magistrates' Court of Victoria, K10671554, commenced 15 March 2019), 12 August 2019.

[2] Transcript of ex tempore decision, Kennedy v Proctor (Magistrates' Court of Victoria, K10671554, Magistrate Foster, 19 March 2020) 1 ('Ex Tempore Decision').

[4] The horse has been spelt variously as 'Ishker' or 'Ishka' in the documents but will be referred to as Ishker in this decision.

[6] Ibid 5. The Ex Tempore Decision records that the Magistrate noted that at the end of Ms Kennedy's evidence she said 'not yet' when asked if she had made a claim for Trooper.

[8] Complaint, filed in Kennedy v Proctor (Magistrates' Court of Victoria, K10671554, commenced on or around 15 March 2019), 15 March 2019.

[9] [2003] VSC 121; (2003) 10 VR 626 [122] (Dodds-Streeton J).

[17] [2003] VSC 121; (2003) 10 VR 626.

[18] [2003] VSC 121; (2003) 10 VR 626 ('Nolan Trial').

[19] Nolan v Nolan [2004] VSCA 109 ('Nolan Appeal').

[21] Nolan v Nolan [2004] VSCA 109.

[23] Nolan v Nolan [2004] VSCA 109 [118], [138].

[24] R v Huisman & Shiells [1999] VSCA 170 [14] (Buchanan JA).

[28] Respondent's submissions, filed in Kennedy v Proctor (Supreme Court of Victoria, S ECI 2020 01816, commenced 20 April 2020), 19 April 2021 [34].

[29] Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513 [520] (Stephen J); Casano v Antipov (No 2) [2017] FAMCAFC 234 [15] (Thackray, Ryan and Kent JJ).

[30] The learned Magistrate's judgment was provided in the form of a transcription of the audio tape recording.

[31] Nolan Trial [117] (Dodds-Streeton J).

[32] Nolan Appeal [119] (Chernov and Eames JJA); Shepherd v The Queen [1990] HCA 56; (1990) 170 CLR 573 [580] (Dawson J).

[34] Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 ('Longmuir'). See also Nolan Appeal [120].

[36] [1984] HCA 7; (1984) 153 CLR 521 [580] ('Chamberlain').

[39] Nolan Appeal [120] (Chernov and Eames JJA).

[41] See Longmuir [141] (Tadgell JA).