When is a gift horse not a gift? Challenging a court’s assessment of evidence
The dispute in Kennedy v Proctor[1] involved, at its heart, a simple question: had a competition horse, purchased by one friend for another and claimed to have been a gift, in fact been a gift? Of greater significance to appellate practice, however, the case demonstrates the difficulty in seeking to overturn a court’s decision on grounds of its assessment of trial evidence. The decision is illustrative, therefore, of the tasks parties face either in prosecuting or in defending against such an appeal.
The facts
K and P had fostered a close friendship over the years through a shared passion for horse riding. In 2014, P fell off her horse when competing in an event and the horse subsequently was retired. K offered to buy a horse for P so that P could continue to compete. K purchased a horse for $20,000, paying the money directly to the vendor. In early 2015, the horse was transported directly from the vendor’s property to P’s property.
In late 2018 and following an apparent deterioration in K and P’s friendship, K made a written demand for return of the horse. K then sued for recovery of the horse in the Magistrates’ Court, claiming she had lent the horse to P for her non-exclusive use and enjoyment as a competition horse. P, in defence, argued that the horse had been gifted to her. The Magistrate found in P’s favour.
K appealed the Magistrate’s decision to the Supreme Court under the Magistrates’ Court Act 1989 (Vic) s 109.
On appeal
On appeal before Quigley J, the parties agreed that the Magistrate had applied the correct test for determining whether or not the horse was a gift. That test, set out in the decision in Nolan v Nolan,[2] provides that the three essential elements for a valid gift of a chattel inter vivos (that is, while the donor is alive and in the absence of a deed of gift or declaration of trust) are:
intention to make a gift, such intention usually being expressed by words;
intention on the part of the donee to accept the gift; and
delivery of the chattel.[3]
Such principles not being in dispute, Quigley J held that ‘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’.[4] The appellant argued that the Magistrate, in reaching his decision, had analysed a number of documents in isolation and had formed his view on that basis rather than by reference to the whole of the evidence. Among other things, the appellant noted that the Magistrate had reviewed a particular piece of documentary evidence and, in his reasons, had stated that the document possessed the ‘indicia’ of an intention to make a gift.
The questions of law raised on appeal were:
Whether the Magistrate misapplied the test for determining whether the horse was a gift.
Whether it was open to the Magistrate to conclude on the documentary evidence that the essential elements for a gift had been satisfied at law.
The crux of the appeal, therefore, related to the quality of the Magistrate’s assessment of the evidence before him.
An appeal to the Supreme Court under the Magistrates’ Court Act can only be ‘on a question of law’. In a way, a challenge to the manner of application of a legal test and to the assessment of evidence in light of that test — in circumstances where the test was the correct one to apply — sits on the very fringe of what is a ‘question of law’. There is a significant body of jurisprudence regarding the distinction between a question or fact (which is generally not appealable) and a question of law, which distinction has been described as ‘mired in uncertainty’.[5]
Manner of assessment of oral and documentary evidence
Quigley J found no error in the Magistrate’s manner of assessment of the evidence and dismissed the appeal. In doing so, her Honour made a number of informative comments.
First, her Honour noted that, so far as an assessment of the evidence was concerned, ‘[w]hile I have access to the transcript of the trial … there are communicative nuances that are not capable of being transcribed’ and that the Magistrate ‘had the benefit of seeing the witnesses and making his assessment of their oral evidence’.[6] This is perhaps the prime difficulty a party faces in challenging an interpretation of such evidence.
Second, her Honour referred to a number of precedents which provide that it is incumbent on a judge (or jury, as a finder of fact) to look at evidence not simply in isolation but also holistically. In Transport Industries Insurance Co Ltd v Longmuir,[7] Tadgell JA described the task as follows:
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.[8]
Third, her Honour noted that the Magistrate had referred to each piece of documentary evidence in his reasons and that ‘examining each piece of documentary evidence and its relative weight individually does not negate that his Honour also considered the evidence as a whole’.[9] Her Honour noted:
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 … 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.[10]
In response to the appellant’s submission regarding the Magistrate’s use of the word ‘indicia’, Quigley J held that such an expression simply meant that the document had the tendency to support a particular version of events so far as intention to make a gift was concerned (rather than the document itself being stand-alone proof of intention).
In concluding, Quigley J stated:
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 v Nolan], of looking at each piece of evidence individually and then discarding it if it was not conclusive, did not occur here.[11]
The Magistrate’s assessment of the evidence, and ultimately his conclusion as to the most likely version of events, was not disturbed on appeal; the gift horse had indeed been a gift.
[1]: [2021] VSC 521.
[2]: (2003) 10 VR 626. The formulation of the test was endorsed on appeal: Nolan v Nolan [2004] VSCA 109.
[3]: Ibid 647.
[4]: Kennedy v Proctor [2021] VSC 521, [28].
[5]: Justice Margaret Beazley, ‘The Distinction Between Questions of Fact and Law: A Question Without Answer?’ (Speech, Land and Environment Court Conference, 24 May 2013) 15.
[6]: Kennedy v Proctor [2021] VSC 521, [48].
[7]: [1997] 1 VR 125.
[8]: Ibid 141.
[9]: Kennedy v Proctor [2021] VSC 521, [60].
[10]: Ibid [62].
[11]: Ibid [66].