Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : HALL & ANOR -v- PHILIP ROLAND WILSON as Executor of the estate of ANTHONY LAWRENCE PATRICK DUFFY (Dec) & ANOR [2005] WASC 207

New evidence of the fluctuation in value of assets - Turns on own facts

Hall & Anor v Philip Roland Wilson as Executor of the estate of Anthony Lawrence Patrick Duffy (Dec) & Anor [2005] WASC 207

Knight v Anderson (1997) 17 WAR 85

Mulholland v Mitchell [1971] AC 666

Atlantic 3-Financial (Aust) Pty Ltd v Marler [2003] QCA 529; [2004] 1 Qd R 579

Doherty v Liverpool District Hospital (1991) 22 NSWLR 284

Thomas v Bass [2006] WASCA 59

1 WHEELER JA: This is the appellant's application to adduce new evidence on the hearing of the appeal and to amend the grounds of appeal. The two applications are linked, since proposed grounds 1A and 2A refer to, and rely upon, the new evidence.

2 The background to the applications is as follows. On 22 September 2005, Master Newnes delivered judgment in a family provision case which he had heard on 30 and 31 August 2005. Those dates are, as it will appear, potentially significant.

3 The present appellant had married the testator in February 1961. The first respondent and her brother were plaintiffs in the application. They were the children of the testator and the appellant, and were both born in the 1960s. The testator and the appellant divorced in 1991, when the two plaintiffs were adults. There was a dispute as to the distribution of the matrimonial property and orders were made following contested proceedings in the Family Court. One of those orders was for the subdivision of property at Mundijong then occupied by the testator and the appellant. The testator retained and lived on his portion while the appellant sold hers.

4 The testator died in 2003 without ever changing his will. That will had been made in 1962 and had left the whole of his estate to the appellant. The principal portion of that estate was the testator's portion of the Mundijong property. There had been a valuation of that property in February 2004. At trial, it was apparently accepted on all sides that the value of the Mundijong property was $540,000, the amount of the February 2004 valuation. The Master referred to that valuation as "possibly slightly outdated" (Hall & Anor v Philip Roland Wilson as Executor of the estate of Anthony Lawrence Patrick Duffy (Dec) & Anor [2005] WASC 207 at [69]). However, based upon that valuation, and upon the then estimate of a variety of costs, the Master estimated that the net amount of the estate would be of the order of $300,000.

5 The Master determined that both the testator's children had been left without adequate provision for their proper maintenance, education and advancement in life. He determined that the needs of the first respondent, both at the date of the testator's death and subsequently, were significantly greater than that of her brother. The learned Master also considered the financial position of the appellant. He determined that proper provision for the first respondent would be an amount equal to 80 per cent of the net value of the estate. That amount, based upon the valuation and estimate of costs at trial, would, of course, amount to approximately $240,000. The remaining 20 per cent the Master considered should pass to the first respondent's brother. It was his view that because of the relatively modest size of the estate, and because, in his view, the first respondent and her brother had greater call on the estate for their proper maintenance than did the appellant, once reasonable provision had been made for the plaintiffs, the estate would be exhausted.

6 It is not now in contest that in January of 2006, the Mundijong property sold for the sum of $785,000. It is by no means clear what costs have been paid or remain to be paid from that sum. However, if one accepts the estimate apparently made at trial of $240,000 for costs and expenses as being approximately correct, the net value of the estate would be approximately $545,000 rather than $300,000, a sum obviously significantly in excess of the value accepted by the Master.

7 The submission made on behalf of the appellant is to the following effect. First, it is submitted that the ordinary fluctuations in property values could hardly explain the increase in the value of the property between the date of trial and the date of sale. It is submitted that the evidence of the sale price plainly could not have been obtained with reasonable diligence for use at the hearing, since the property did not sell until February 2006.

8 It is submitted that the principles which should apply are those discussed by the House of Lords in Mulholland v Mitchell [1971] AC 666 and accepted by this Court in Knight v Anderson (1997) 17 WAR 85. Those principles are broadly to the effect that the discretion of the Court of Appeal to admit new evidence as to matters occurring after the date of trial is one of "discretion and degree". The principles which require to be balanced are that there should be finality in litigation on the one hand, and on the other that in exceptional circumstances such as where it might be said that "basic assumptions at the trial had been falsified", it may be just to admit such evidence. Further, it is to be expected that courts will allow fresh (or new) evidence when to refuse it "would affront common sense, or a sense of justice" (Mulholland, per Lord Wilberforce at 679 - 680, Knight per Malcolm CJ at 90). Accepting those principles, it is my view that this is a case in which the new evidence should not be admitted.

9 The appellant's proposition that the value of the Mundijong property had dramatically increased since the date either of trial or of judgment, cannot be accepted as being necessarily accurate. There is no evidence before me suggesting what portion of the increase in value is attributable to the period between trial and sale, rather than between valuation and trial.

10 By the date of trial, it must have been obvious to all parties that the valuation which had obtained was of the order of 18 months out of date. The appellant must have been broadly familiar with the location, since she had lived there many years earlier. There is no explanation in the appellant's affidavit as to why it was that she was prepared simply to accept that earlier valuation. This was not, it seems to me, a case in which there was a "basic assumption" common to both parties, reasonably made, as to the value of the property. Rather, it was a matter which the appellant seems content not to have explored.

11 I was informed from the Bar table, without opposition, by counsel for the appellant, that the appellant's solicitors had at one stage raised with the solicitors for the respondents the desirability of obtaining a further valuation. However, in the face of some opposition or lack of co-operation from the respondents' solicitors, that issue had not been pursued. It seems to me that it does not matter whether the appellant had not considered the question of the accuracy of the valuation at all, or whether she had suspected it to be inaccurate but had not pursued the matter. In either event, there was a decision on the part of the appellant to conduct the trial on the basis of the earlier valuation.

12 In those circumstances, it seems to me that it would be an affront to commonsense and to justice to permit the adducing of further evidence of valuation on the appeal, merely because at some stage between the obtaining of the original valuation in 2004 and the sale of the property in 2006, its value had substantially increased. In any trial involving the valuation of assets, it is likely that the value of those assets will fluctuate over time and that at the date of an appeal, values will not be precisely the same as those either at trial or at some earlier time. The situation is not confined to real property. An estate consisting wholly of shares may fluctuate very significantly in value between one date and another. Nor is the situation confined to actions of this kind. In personal injuries actions, the cost of treatment will fluctuate, average earnings in a plaintiff's occupation will fluctuate, and the plaintiff's condition may vary either for better or worse in a manner not clearly foreseen by treating physicians. The Court should be slow to permit the reopening of such an issue, merely because some facts assumed to be correct at trial have altered by the date of an appeal.

13 It is not possible to lay down any clear guide as to when evidence of a fluctuation in value should be admitted. However, the cases recognise that it must be only in "exceptional" circumstances that such further evidence should be admitted. These circumstances have not been demonstrated to be exceptional. Any person with any ordinary understanding of property values in Western Australia would have expected an increase in value between 2004 and 2005, and again between 2005 and 2006. The appellant chose not to explore this issue at trial at all. In those circumstances, there is no injustice to the appellant in having the appeal conducted on the basis of an assumption which she was content to make.