13 Miss Lodge lived at Burwood, in her own home, until 1 February 1991. She then moved to a serviced apartment at Springwood, in an aged care complex. After Miss Lodge moved to Springwood, Mr Lavender says that he visited her about every three weeks to deal with her business affairs. On such visits he says that:
"Quite often I would arrive there sometimes 9.30, 10.00am in the morning and I would never very rarely leave before 3.30, sometimes it got to 5.00 before I left." (T64)
14 Mr Lavender was, at the time he first started working for Miss Lodge, employed in the Australian Taxation Office. He became a Chief Taxation Inspector in about 1980. He retired from the Australian Taxation Office on 31 January 1990. Prior to his retirement from the Australian Taxation Office, it had not been possible for him to act as a tax agent, but he assisted Miss Lodge to prepare taxation returns which she signed and lodged herself. Fairly soon after his retirement, he became registered as a tax agent, and also undertook all of the preparation and lodgement of Miss Lodge's income tax returns. For preparing and lodging the income tax returns, he charged her a separate fee. For the year ended 30 June 1993 the precise amount of that fee cannot be established from the evidence, but it is not more than $850, being the amount shown in Miss Lodge's tax return for that year under the heading, "Other Deductions". For the year ended 30 June 1996 he charged $985. This was paid by a cheque written by Miss Lodge on 25 November 1996. Her notation on the cheque butt is, "Mr Lavender accountant for submitting tax return". For the year ended 30 June 1997 Mr Lavender also charged $985. This also was paid by a cheque which Miss Lodge wrote on 27 October 1997. The notation which Miss Lodge wrote on the cheque butt of that cheque, is "To Mr Lavender accountant for tax return expenses".
Issues, Onus, and Principles About How the Evidence is to be Evaluated
15 That the defendant made the various withdrawals from Miss Lodge's account was admitted. It was also admitted that at all material times Miss Lodge relied on the advice, expertise and financial assistance of Mr Lavender, and that Mr Lavender owed Miss Lodge a fiduciary duty. The only allegations in the Amended Statement of Claim which were denied were allegations in paragraphs 11 and 12, that the monies withdrawn were not paid for the benefit of Miss Lodge, and that the withdrawals constituted a breach of fiduciary duty on the part of the defendant. On the first day of the hearing, after some discussion about which of the parties should appropriately go first, the Court made the following note:
"The Defendant stated, subject to the matters and allegations raised in his Defence, which was the Further Amended Grounds of Defence, the defendant admitted paragraphs 11 and 12 of the Amended Statement of Claim."
16 The trial then proceeded with the defendant going first.
17 The allegations made by the defendant, in his Further Amended Grounds of Defence, included the following:
"3 …
a. those funds were withdrawn by the defendant with the full agreement and understanding of (Miss Lodge), and in accordance with her written authority and explicit instructions …
b. the funds were used for purposes fully agreed to and approved by her, and were made out to payees in accordance with those agreements and approvals. The defendant denies having benefited by the withdrawals of funds referred to OTHER THAN in strict accordance with the contractual Agreements for Services rendered, and his said entitlement to be paid, how and when in his complete discretion, from the said Accounts, and
c. the funds were withdrawn pursuant to the terms of an explicit Contractual arrangement(s) between the Deceased and the Defendant, WHICH THE defendant was at all material times performing: particulars of which are set out in paragraphs 2 to 14 inclusive of the Further Amended Cross Claim …"
18 That Further Amended Cross Claim pleaded an agreement under which Mr Lavender was entitled to charge for all of his professional time, expertise and disbursements at his usual rates. It alleged that, throughout the period June 1964 to June 1998 charge rates were discussed and explicitly agreed between the parties from time to time. It was pleaded that it was an explicit term of the agreement that the fees were to be assessed and charged at fair and reasonable rates, and that Mr Lavender could draw on the accounts of which he was a joint signatory in his complete discretion to reduce the total indebtedness at any time. It was also alleged to be a further explicit term that Mr Lavender,
"was to be entitled to all and any monies in the 'joint accounts', to ensure that his accrued fees and charges were fully paid, in his complete discretion, and at such time and manner of withdrawal as he deemed appropriate."
19 Mr Ashhurst, counsel for the plaintiffs, submitted that this defence was far more narrow and precise than a defence of consent to the withdrawal of the money; rather, he submitted, it was a defence which required Mr Lavender to prove a very particular contract if he was to succeed. I do not read the defence so narrowly. It seems to me that the various matters pleaded in paragraph 3 of the Further Amended Notice of Grounds of Defence ought fairly be taken as alternatives, rather than as being cumulative.
20 Counsel did not agree about who bore the onus of proof. In my view, it is an essential element of the plaintiffs' claim that they establish that the withdrawals were made without authority. If the plaintiffs were to raise a case from which an inference of a lack of authority could be drawn, an onus of adducing evidence might well shift to Mr Lavender, but the legal onus of proof remains with the plaintiffs throughout. I do not regard the Defendant's statement, that I have referred to in paragraph 15 above, as effecting a change in what would otherwise be the onus of proof. It was a statement made for the specific purpose of deciding which party should go first, and with comparatively little opportunity for reflection.
21 The allegation that Mr Lavender has, regularly and over many years, taken Miss Lodge's money without authority, is an allegation of very serious wrongful conduct on his part. When the plaintiffs' allegation is of that type of conduct, the standard of proof remains the ordinary civil standard of balance of probabilities; however, if a court is to be satisfied on the balance of probabilities about such a serious matter, it must also take into account the seriousness of the allegation which has been made. As Dixon J expressed it in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362:
"The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite graduations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences."
22 Mr Ashhurst submitted that the present case was one like Simon v NRMA Insurance Ltd (NSW Court of Appeal, 22 October 1991, unreported). That was a case where the plaintiff sued his insurer, alleging that the insurer had not paid a claim which the plaintiff had made following the theft of his vehicle. The insurer called evidence which gave reason to believe that the plaintiff himself had been implicated in the disappearance of the vehicle. The trial judge had found for the insurer, holding that the plaintiff had failed to prove that the vehicle was stolen, but refraining from making any finding of fraud against the plaintiff. From that decision the insured appealed. Samuels AP said, at 7-8:
"The appellant's primary argument was that the finding that the appellant had failed to discharge the onus of proof on the balance of probability was, in the circumstances of the case, necessarily a finding of fraud so that the learned judge had fallen into error by failing to apply to it the requirements of Briginshaw v Briginshaw 60 CLR 336. However, I entirely fail to see how Briginshaw has any bearing upon the failure of the appellant to discharge the onus which clearly rested upon him. Moreover, I do not think that the finding that the learned judge made is necessarily equivalent to a finding of fraud. It was perfectly open to the learned judge to say, as he did, that he was not satisfied that the appellant had proven that the car was stolen, on the footing that the probability was that it was exactly equal to the probability that it was not …"
23 That was a case where, to make out his claim, it was necessary for the plaintiff to prove that the vehicle had been stolen. Satisfying the tribunal of that element of his claim did not involve satisfying the tribunal that anyone (other than the thief) had engaged in any wrongful conduct. Nor did it involve the plaintiff in proving that he was not the thief. Likewise, for the insurer to succeed in raising enough doubt about whether the vehicle had been stolen to prevent the plaintiff from discharging his onus of proof did not require the defendant to convince the court that the vehicle actually had been stolen by the insured.
24 The present case is different. Here, the plaintiffs need to persuade the court that the taking of the money by Mr Lavender was indeed without authority. It is an intrinsic part of their claim that the court needs to be satisfied that there has been conduct which is seriously wrongful. Thus, in the present case, the court needs to take into account the requirements of Briginshaw v Briginshaw in deciding whether the plaintiffs have made out their case.
25 There is another factor which also needs to be taken into account in evaluating the evidence in the present case. In Hunt v Barlow [2000] NSWSC 324 Bryson J summarised it as follows:
"Where a claim is made against the estate of a deceased person and knowledge of the facts on which the claim is based is not available to those who represent the estate, judicial experience requires a careful approach to fact-finding, although there are no special legal rules relating to the burden or to the standard of proof. In Plunket v Bull (1915) 19 CLR 544 at 548-549 observations of Isaacs J show how such cases are scrutinised. Isaacs J said:
"Then we come to the question how far the onus of proof which lay upon the plaintiff was satisfied. She had the burden of establishing the original creation of the indebtedness of the deceased to her, and undoubtedly it is established that in cases of this sort the Court scrutinizes very carefully a claim against the estate of a deceased person. It is not that the Court looks on the plaintiff's case with suspicion and as prima facie fraudulent, but it scrutinizes the evidence very carefully to see whether it is true or untrue. In the case of Lachmi Parshad v Maharajah Narendro Kishore Singh Bahadur some observations were made by the Privy Council with reference to the sufficiency of proof. In that case their Lordships were not satisfied that the plaintiff had established a reasonably clear case. For instance, he had failed to bring forward evidence which he ought to have brought forward, and which was available. That was a material circumstance, and having regard also to some other circumstances of the case their Lordships thought that his appeal should fail. Lord Morris said: 'In an action brought to recover money against an executor, or, as in this case, the heir, of a deceased person, it has always been considered necessary to establish as reasonably clear a case as the facts will admit of, to guard against the danger of false claims being brought against a person who is dead and thus is not able to come forward and give an account for himself.' "
Other members of the High Court did not refer to this subject and the authorities cited by counsel (at 545) do not appear to relate to it.
There were also expressions of caution in Birmingham v Renfrew (1937) 57 CLR 666, which related to mutual wills; Latham CJ referred to the need for care at 674 and Dixon J at 681 said: "Such an agreement can be established only by clear and satisfactory evidence." There is no legal requirement for corroborative evidence: see In Re Cummins (dec'd); Cummins v Thompson [1972] 1 Ch 62 at 68-69. See too Grundel v The Registrar General (1990) 5 BPR 97-340 at 11,219 (McLelland J). These cases express the results of much judicial experience in fact-finding.
In dealing with the facts in Lachmi v Maharaja , (1891) LR 19 IA 9, to which Isaacs J referred, the Judicial Committee took a remarkably exacting approach and showed an expectation that all persons involved in the transaction in any way should be called. It would not always be appropriate to make such exacting requirements, but in the present case the plaintiff in fact called all persons allegedly involved in making the agreement who could be called, and reasonable limits have to be accepted to the expectation that the plaintiff will call witnesses who might be able to deal with corroborating circumstances."
26 In Clive Eggins & 2 Ors v Allan Robinson [2000] NSWCA 61 Sheller JA (with whom Powell JA agreed) said, at 26:
"The respondent's case was based on conversations that had taken place between him and Mr Ellis when alone and depended upon the acceptance of his evidence. Mr Ellis was no longer living and could neither accept nor rebut what the respondent said. The nature of the respondent's claim called for it to be carefully scrutinised in accordance with the principle exemplified by Plunkett v Bull (1915) 19 CLR 544 and described by McLelland CJ in Eq in Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 789 as follows:
"...in a claim based on communications with a deceased person, the court will treat uncorroborated evidence of such communications with considerable caution, and will regard as of particular significance any failure of the claimant to bring forward corroborative evidence which was, or ought to have been, available." "
27 This approach to evaluation of the evidence, when a claim is made against a deceased's estate, arises from the fact that the deceased is not able to give his or her account of the transaction; the other party to the transaction therefore has an opportunity, often not available in litigation, to give evidence knowing it cannot be checked or contradicted by the deceased. The approach to the evaluation of evidence is not connected with who, in any particular piece of litigation, bears the legal onus of proof. Thus, even though in the present litigation Mr Lavender is, in one sense of the expression, "making a claim" against a deceased's estate only insofar as he brings a Cross-Claim for unpaid fees, these principles for evaluation of facts apply also to the scrutiny of the evidence which he brings in defence of the claim which the plaintiffs bring against him, to recover the money he has already received.
Miss Lodge's Estate, and Will
28 Miss Lodge's Estate was disclosed for probate purposes as follows:
Money in bank accounts $178,657.69
Monies due from Endeavour Retirement Villages $175,000.00
Shares in Burns Philp & Co Limited $2,668.50
Shares in National Australia Bank $481,296.00
Shares in Westpac Banking Corporation $79,079.00
Shares in CSR Limited $13,672.39
Shares in BHP Limited $245,087.10
$1,175,460.68