ACX15 v Minister for Immigration and Border Protection
[2017] ACTCA 33
•24 July 2017
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Volanne Pty Ltd v International Consulting and Business Management (ICBM) Pty Ltd (No 2) |
Citation: | [2017] ACTCA 33 |
Hearing Date: | 10 May 2017 |
DecisionDate: | 24 July 2017 |
Before: | Refshauge J |
Decision: | 1. That the application of the Appellants dated 5 May 2017 be listed for hearing. 2. That the matter be adjourned to Wednesday 2 August 2017 at 10:00am for further directions. |
Catchwords: | APPEAL – PRACTICE AND PROCEDURE – Re-opening of the appeal – seeking to adduce evidence not before the Court on appeal – Metwally discretion – Anshun estoppel – res judicata – exercise of the Court’s discretion – appeal re-opened to receive further evidence – matter referred to the three judges who constituted the Court of Appeal for the hearing of the application |
Legislation Cited: | Supreme Court Act 1933 (ACT), ss 37E, 37J Court Procedures Rules 2006 (ACT), r 407 |
Cases Cited: | Bynon v ATMA Nominees Pty Ltd (as trustee of the Badjyn Investment Trust and H & B Farm Trust) [2017] WASC 30 Commonwealth v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; 282 FLR 1 |
Texts Cited: | S Tilmouth, “Notices and Grounds of Appeal” in G Blank and H Selby (eds), Appellate Practice (The Federation Press, 2008) K R Handley, Spencer Bower, Turner and Handley: The Doctrine of Res Judicata (Butterworths, 3rd ed, 1996) |
Parties: | Volanne Pty Ltd (ACN 077 412 232) (First Appellant/First Cross-Respondent) John Fragopoulos (Second Appellant/Second Cross-Respondent) Anthoula Fragopoulos (Third Appellant/Third Cross-Respondent) International Consulting and Business Management (ICBM) Pty Ltd (ACN 080 349 855) (First Respondent/Cross-Appellant) Skybase (Vic) Pty Ltd (ACN 067 591 955) (Second Respondent) |
Representation: | Counsel Mr C Donohue (Appellant) Mrs A Hogan (Respondent) |
| Solicitors Donohue & Co (Appellant) Namadgi Legal (Respondent) | |
File Number: | ACTCA 54 of 2014 |
REFSHAUGE J:
The application before me is made after the hearing of these proceedings, being an appeal from a decision of the Master, when reasons have been delivered but before judgment has been entered.
The appeal concerned commercial dealings between the parties and, in particular, the nature and amount of money advanced by the respondents to the first appellant and the terms on which that was done. The respondents originally sued the appellant in the ACT Supreme Court, claiming money from the appellants under the dealings and obtained judgment for them from the Master, delivered on 25 July 2014.
In that decision, International Consulting and Business Management (ICBM) Pty Ltd v Volanne Pty Ltd [2014] ACTSC 175, Master Harper found that the plaintiff had lent certain money to the first defendant secured by a guarantee entered into by the second and third defendants. His Honour held that the plaintiffs, the respondents to the appeal, were entitled to recover from the defendants, the appellants to the appeal, the balance of the moneys advanced together with interest. The appellants then commenced the appeal against that decision. Relevantly to the appeal, his Honour had found that, after 1 July 2001, there were loans made by the respondents to the first appellant secured by a guarantee of the second and third appellants, that repayments were made but a balance of funds was still outstanding, that interest was payable on the loan amounts, that the interest was payable at the Westpac indicator lending rate plus 2 per cent, and that the interest payable was compound interest.
On appeal, the actual issues agitated were limited to questions of whether interest was payable, the rate at which it was payable, and whether it was compound interest. On 30 September 2016, the Court held that interest was payable on the loans from 1 July 2001 and at the Westpac indicator lending rate plus 2 per cent. It held, however, that the interest was simple interest. See Volanne Pty Ltd v International Consulting and Business Management (ICBM) Pty Ltd [2016] ACTCA 49.
The Court then directed the parties to confer and to provide, if possible, agreed draft orders to give effect to the reasons.
The parties were unable to agree on draft orders and each filed detailed submissions on the respective positions they took as to why they were unable to agree and what orders should be made. At issue were questions of how the interest was to be calculated both prior to and also after judgment, as well as differences in the awarding of costs.
The respondents submitted that payments made by or on behalf of the appellants should be regarded as having been appropriated first to interest and only after that as repayment of principal. They submitted further that post-judgment interest should be calculated at the rate found to be the interest provided for in the loan agreement, either because there was no merger of the rate on judgment or because it was in the interests of justice that it not merge because of the expectations of the director of the first respondent who had had the dealings with the appellants.
The appellants submitted, however, that the first respondents had, in fact, appropriated the payments first to principal and not to interest and that this was shown in Income Tax Returns of the first respondent. They also rejected the submission of the respondents as to post-judgment interest on the basis that there was no evidence of the asserted expectation.
For reasons that do not need to be addressed, the Court was unable to deal with these submissions before 5 May 2017, when the appellants lodged an Application in Proceedings. It sought the following orders:
1.That, pursuant to rule 6702 of the Court Procedures Rules 2006 (ACT), Exhibit 14, being the tax returns and financial documents of the first respondent for the years 2001 to 2007, tendered in the trial proceedings before the Supreme Court (SC No 398 of 2007), be produced to the Court of appeal.
2.That the appellants have leave to produce for the purpose of evidence a letter dated 25 July 2007 from the respondents’ then solicitors to the appellants’ solicitors and the spreadsheet attached thereto giving particulars of the calculation of the amount claimed in the statement of claim filed by the respondents on 22 June 2007;
3.That, pursuant to rules 6748(4)(b) and 6900 of the Court Procedures Rules, 2006 (ACT), the respondents produce the following documents to the Court for the purpose of evidence:
the tax returns and financial statements of the first respondent from 1 July 2007 to the present.
4.That the orders for costs referred to in paragraphs 108 and 109 of the decision of this Honourable Court given on 29 September 2016 [sic] not be made and instead a decision as to costs be made after consideration of the evidence sought in this application to be adduced.
5.That a special fixture date be allocated for the hearing of this application.
6.Any other orders the Court considers appropriate.
The matter came before me as a single judge on 10 May 2017. A single judge may, under s 37J of the Supreme Court Act 1933 (ACT), constitute the Court of Appeal for certain purposes including “any other question of practice or procedure in the Court of Appeal”.
This is a wide provision; practice and procedure encompasses a wide range of matters as, for example, discussed in GJ v AS (No 4) [2017] ACTCA 7 at [41]-[57]. Nevertheless, there do seem to be matters which, even if strictly within the concept of practice and procedure, should be heard by the three judges who heard the appeal.
Thus, for example, while it seems that a single judge would have the power under s 37J of the Supreme Court Act to admit fresh evidence on an appeal, unless the application is by consent, or at least unopposed, it is rare but not improper for a single judge to deal with such an application, and for it normally to be dealt with on the hearing of the appeal by the three judges who will hear the appeal.
In this case, orders 1 to 3 sought by the appellants seemed to me effectively to constitute a re-opening of the proceedings. That, in my view, is a matter that should ordinarily be dealt with by the three judges who heard the appeal.
Nevertheless, order 5 is a matter that can and should ordinarily be dealt with by a single judge and I agreed to consider the request. Particularly in this jurisdiction, where a member of the Court is usually from interstate – in fact there were two judges located ordinarily interstate on this appeal – there is a reasonable consideration of logistics in deciding the question of whether to permit a party to relist a matter, such as to argue the re-opening of the appeal and this should be decided by a single judge. If there is no real question to be agitated or the application has no prospects of success, is vexatious or could not affect the result, the single judge can dismiss it without the cost and disruption of requiring the matter to be dealt with by all three judges.
I heard oral submissions on 10 May 2017 and the appellants gave a brief explanation of the reasons why the appeal should be re-opened to receive the material the appellants sought. The respondents, however, vigorously opposed the application.
In their opposition, the respondents pointed out that the matters on which the appellants now rely were not pleaded in the Court below nor in the Notice of Appeal in this Court, that this raised a real problem because the case at trial did not address these issues thus leading to a lack of relevant and arguably necessary expert evidence about these issues.
In the light of this response, I considered that the appellant had to make out a better case if the application were to be referred to be heard by the three judges who heard the appeal. The solicitor then appearing for the appellants, Mr C Donohue, indicated to me at the hearing that he was not then fully prepared to argue the whole matter as he appears to have assumed that I would simply list the matter for hearing before the three judges. He sought an opportunity to address the issues more comprehensively. I adjourned and directed the filing and service of written submissions. Both parties filed helpful submissions.
The appellants submitted that the findings of this Court on appeal had not accepted the primary contentions of either party because it had decided that interest was payable (contrary to the appellants’ submissions) but not at compound rates (contrary to the respondents’ submissions). The appellants submitted that, on either case, there was simply no relevant issue concerning the appropriation of the payments to principal or to interest. The Court’s decision, however, had now made that issue relevant.
Submissions from both the appellants and the respondents had accepted that, as held in Falk v Haugh (1935) 53 CLR 163 at 173, in the absence of any actual appropriation by a debtor or creditor of repayments in respect of debts comprising both principal and interest, those repayments will be appropriated first to interest and then to principal as a matter of law.
There was some evidence at trial that the appellants pointed to which addressed the question of appropriation. It had not, however, been reproduced in the Appeal Books, no doubt because it was not seen to be relevant to an issue in the respective cases put by the appellants and the respondents on the appeal.
This application sought to do three things:
(a)draw the attention of the Court to evidence in the Court below but not reproduced in the Appeal Books;
(b)permit the appellants to adduce further evidence (called, probably incorrectly, “fresh” evidence) to address the issue which had become relevant as a result, not of the cases conducted by the parties, but because of the way the Court had decided the case; and
(c)permit the appellants to adduce further evidence (again, probably incorrectly, called “fresh” evidence) which, however, was a document of the respondents themselves.
The appellants submitted that this was not an application for re-opening the appeal in a true sense, for it was not intended to canvas findings already made so as to achieve a different result, but to permit the Court, on the findings it had already made, to come to a just result where the evidence on which it could do so was not yet before it.
Whether what was sought was to re-open the case may merely be a semantic argument, though sometimes characterisation may have consequences.
It is to be accepted that the Court has not delivered its judgment. In that sense, though findings of fact and law have been made, the Court’s final judgment has not been announced much less entered and is reserved.
It is in this context that applications for re-opening are usually made. See Watson v Metropolitan (Perth) Passenger Transport Trust [1965] WAR 88; Commonwealth v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; 282 FLR 1.
That is to say, the appellants in this case seek to adduce evidence that was not before the Court in the appeal and, indeed, in some cases not even before the Master at trial, and rely on it not merely to quantify the loss but also to require the Court to make findings which were not addressed in the hearing of the appeal and which hearing has concluded. In this sense, the appellants seek to have material put before the Court after the time for adducing such material had passed – submissions had been made, the time for consideration of the evidence and the occasion for adducing further evidence had passed.
It seems to me likely that this would be regarded as re-opening the appeal notwithstanding that the need has arisen because of findings of the Court, which the appellants submit cannot be converted into a judgment in place of that of the Master without the further evidence.
It was further submitted that, just because the parties did not address the issues at first instance, they may still be addressed by an appellate Court. Reference was made to Mareva Building Consultants v Zevon [2013] ACTCA 28 and Ruskic v Greenwich Contractors Pty Ltd [2013] ACTSC 263.
In Mareva Building Consultants v Zevon, the appellant challenged a decision at trial that the contract on which it sued had been abandoned or otherwise discharged by agreement. The respondents had not pleaded abandonment or discharge in their defence said to be required under r 407 of the Court Procedures Rules 2006 (ACT). The trial judge, however, had considered it appropriate to consider such a defence on the evidence and raise the matter with the parties.
The appellant there submitted that, had such a defence been pleaded, it would have adduced further evidence but the Court found (at [43]) that, in the circumstances, it was difficult to comprehend what further evidence could have been called.
The Court of Appeal held at [44] that r 407 of the Court Procedures Rules did require abandonment or discharge to be pleaded but that, as there was no prejudice suffered by the failure to do so, the ground of appeal based on the failure of the pleadings should be rejected.
The appellants have relied on this decision to justify an approach that they explain as follows:
It was therefore open to the Court to consider issues that the parties had overlooked at first instance and invite submissions on those issues.
The Court of Appeal, however, was dealing with the consideration by the trial judge of an issue that had been overlooked, not a matter that was raised first on appeal.
I accept that the decision supports the proposition that, where there is no prejudice such as would be caused by a party being unable to adduce evidence on an issue, a trial judge may invite the parties to address an issue that both had overlooked and which had not been pleaded.
It does not, however, seem to me to assist in the question here where a party wishes to raise an issue that, subject to some references in the Notice of Appeal, was not pleaded in the Court of Appeal and, indeed, not even argued on appeal until after reasons had been delivered on the issues that were raised on the appeal. The question of prejudice, however, as identified in this decision is, of course, a very relevant matter that needs to be addressed.
That the issue was not pleaded and the relevance of r 407 of the Court Procedures Rules was not here raised by the respondents.
The second decision, Ruskic v Greenwich Contractors Pty Ltd, involved the learned Master being asked to give leave to amend pleadings which had not raised the question of which of a NSW Act or an ACT Act relating to compensation for injured workers applied. His Honour held that, as the evidence was all one way, the contention that the NSW Act applied, though not so pleaded, had been clearly submitted to be the applicable law by the defendant at the beginning of the hearing and that there was no evidentiary prejudice, the application for the amendment should be granted.
Again, this seemed a quite different situation to that here. Apart from the relevance and importance of prejudice and the flexible approach to pleadings, it did not seem to me to assist the appellants.
Indeed, if this was an issue of pleading, then it seems to me that the respondent’s opposition may be the stronger, since there has been a trial and an appeal, during the actual hearing of which, none of those issues were raised, indeed by either party.
Nevertheless, insofar as r 407 of the Court Procedures Rules may be relevant, because of an absence of pleading in the Court below, though not in terms raised by the respondents, I accept that it is a rule to be applied flexibly as in these decisions, especially where no prejudice is suffered by any party.
The fact is, however, that issues not addressed at trial are not generally permitted to be raised on appeal: University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483. That is, of course, subject to exceptions, where the court will exercise its undoubted discretion to permit them, though these are said to be likely to be rare – “the most exceptional circumstances”. That may be referred to as the Metwally discretion.
In this case, it may be arguable that the decision of the Court itself has given rise to the need for the further evidence sought by the appellants. That is merely an arguable matter. That, however, may be enough for me to accede to the matter being listed to be heard by the three judges who heard the appeal.
The respondents, however, submitted that there was no basis on which the matter was sufficiently arguable to justify it being listed before the three judges of the Court.
The respondents said that there was no occasion for the orders sought by the appellants to be made. I accept that, if the matters sought to be inferred from the evidence that the appellants seek leave to adduce are as they say, then the calculation of the judgment sum will properly accord with the facts.
The respondents say that there are significant reasons why the appellants should not be granted that opportunity. The respondents’ contentions may be summarised as follows:
1. The claim by the first respondent was for repayment of moneys advanced under a loan agreement to which the first appellant agreed, secured by a guarantee into which the second and third appellants agreed to and did enter, which agreement provided for principal and interest.
2. In their pleadings, the appellants denied that the agreement required payment of interest but did not plead in the alternative that, if interest was payable, the debt should be calculated on the basis that the payments already made were appropriated by the first respondent to principal first and then, if any balance, to interest.
3. The first respondent claimed $429 159.66, relying on the evidence of its expert accountant, whose report, while calculating the amount by six scenarios, did not, at any stage, assume other than the usual basis that repayments were first appropriated to interest and then any balance to principal.
4. The expert’s report was read without objection at trial and he was not required for cross-examination.
5. When the Master delivered judgment, his Honour considered that none of the six scenarios precisely reflected his Honour’s findings of fact and required the respondents (as plaintiffs) to lodge a summary consistent with his Honour’s reasons setting out the amount for which judgment was to be entered and, if challenged by the appellants (as defendants), that the matter be relisted.
6. The respondents arranged for their expert to prepare a further report and the appellants challenged it, relying on a critique of it from an expert retained by them, though the appellants’ expert did not take issue with the fact that the calculations of the respondents’ expert had again based his calculations on the appropriation of payments first to interest.
7. A further hearing was held before the learned Master on 26 September 2014, when his Honour accepted the calculation of the amount owing on the basis that payments were first appropriated to interest.
8. After filing their Notice of Appeal, the appellants obtained a further report from another accountant which they served on the respondents on the basis that they proposed to rely on it in the event that the appellants were successful on appeal. That report expressly stated the assumption on which the author relied, namely of “applying each repayment firstly [sic] to interest and then to reduction of principal”.
9. This report, however, was not tendered nor admitted on the appeal nor was the matter of the appropriation of payments agitated on the appeal.
These matters, the respondents submitted, showed not only that it was too late now for the appellants to agitate this issue, but that there would be real prejudice for the respondents since they did not adduce specific evidence at the trial because the question of the appropriation of the payments was not an issue raised either on the pleadings or otherwise at trial. In particular, the issue was not raised with the director of the first respondent when he gave evidence because it was not an issue in the pleadings, in the expert evidence or in cross-examination.
The respondents did not descend to particulars of the relevant evidence; there may be some. It is not clear how expert evidence would be relevant, other than as to calculations but perhaps the respondents could explain in a further hearing. I accept, however, that some evidence could be sought from the director of the first respondent but, again, it is not clear how that could undermine the documentary evidence on which the appellants propose to rely.
Nevertheless, the matters raised by the respondents are, of course, weighty matters which strongly tell against the Court exercising its discretion in the appellants’ favour. They are, however, matters which go to the exercise by the Court of a discretion as to whether the evidence should be received and do not prevent the Court from receiving it.
The respondents raised two other issues, however, which would prevent the Court from receiving such evidence and considering the matter and which, therefore, I must address.
In the first place, the respondents submitted that the appellants were estopped from raising the issue now because of the principle enunciated in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 (Anshun). I refer to this as the Anshun estoppel. I do not agree with the respondents’ contention that the Anshun estoppel applies.
While Anshun dealt with a significant range of important issues, the key principle that it articulated that is relevant here was that a decision in a judgment in proceedings where an issue was or reasonably should have been raised in other proceedings estops a party from re-litigating that issue. In Anshun, the proceedings that had this character were separate proceedings from those in which the estoppel was applied. That is to say, the first proceedings in that case were commenced in the Supreme Court, judgment was entered and no appeal taken from the judgment; the second proceedings were later separately commenced in the Supreme Court and these were stayed for breach of the Anshun principle. This is the situation in which the question of Anshun estoppel is regularly raised. Here, these were not proceedings of that kind, but proceedings on appeal from a judgment amenable to such appeal.
It seems to me that the Anshun principle is applicable in successive proceedings, the first proceedings being heard, finalised and not appealed, or appealed and determined and then other proceedings later commenced as first instance proceedings, raising issues where in the earlier proceedings the relevant party did or should have raised the very issues which the fresh proceedings sought to litigate.
While an appeal is in a real sense a separate proceeding, often in a different Court (though in this jurisdiction the Court of Appeal is the Supreme Court while exercising certain appellate jurisdiction: s 37E of the Supreme Court Act), it is dependent on and, in a relevant sense, a continuation of, the proceedings from which the appeal is taken so that, for example, the decision of the appeal court replaces the decision of the court from which the appeal is taken, even if the appeal is dismissed: Wishart v Fraser (1941) 64 CLR 470 at 478, 483; R v Marks (1981) 147 CLR 471 at 476. There cannot, for example, be inconsistent decisions between an appellate court on appeal from a first instance decision. If the appeal is successful, the former simply replaces the latter which is set aside or otherwise nullified; if the appeal is dismissed, the original judgment is expressly or implicitly confirmed and becomes the decision of the appeal court.
The policy basis for the Anshun estoppel of refusing to permit the re-litigation of issues already decided, or which should have been raised and so decided in the previous proceedings, may be similar to the policy basis for declining to permit a party to raise an issue on appeal that should have been raised in the primary proceedings. Both are clearly based on the need for finality in proceedings and for the efficient despatch of court proceedings. There are differences between the two circumstances. For example, the availability of an appeal and its pendency introduce the possibility of review of the first instance decision which rob it of its otherwise character of finality, and it will be the unavailability of an appeal, the lapse of the appeal period without an appeal, or the dismissal of an appeal that would be required to confer that finality on the trial decision. Further, the existence of the Metwally discretion permits an appeal court to hear an argument or evidence that was not raised in the first instance proceedings.
Under the Anshun estoppel, once the issue is identified as one which was or should have been raised in the earlier proceedings, then the estoppel applies to prevent it being re-litigated; there is no discretion as to whether to apply the estoppel or not.
On the other hand, permission to raise on appeal an issue not raised at trial is a matter of discretion: Coulton v Holcombe (1986) 162 CLR 1 at 8-9.
Matters that are relevant to whether leave should be granted to raise an issue not raised at trial, such as prejudice to the other party, will not be relevant to whether Anshun estoppel applies. Once the facts are made out that give rise to the estoppel, it is to be applied.
No authority was cited by the respondents for the application of the Anshun estoppel to this situation. I do note, however, that Anshun is cited as authority for the proposition that an appeal court will generally not permit a party to agitate a point not taken in the tribunal from which the appeal is taken in extra-curial writings of Judge S Tilmouth, “Notices and Grounds of Appeal” in G Blank and H Selby (eds), Appellate Practice (The Federation Press, 2008) 47, 54-5. His Honour gave no authorities in which it had been so applied; it was mere assertion.
I have been unable to find any authority which does apply the Anshun estoppel in this circumstance. The closest I have been able to find is a suggestion of such an application in the following statement of Ward JA, with whom Beazley P and Gleeson JA agreed, in State of New South Wales v Shaw [2015] NSWCA 97 at [115]:
The first issue that arises in this context is whether the respondents can, consistently with the principles outlined in University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 60 ALR 68 at 71 and Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 8, maintain such an argument on appeal when their case was not so pleaded or run at first instance and/or whether there is an Anshun estoppel that precludes them from so doing, having regard to the principles analysed in Beck v LW Furniture Consolidated (Aust) Pty Ltd [2012] NSWCA 76 at [94] - [97] and Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33; (2010) 75 NSWLR 245.
The difficulty I have with this passage is that, in both the authorities cited, what was at issue was whether earlier proceedings of the kind to which ordinarily Anshun estoppel applies had or should have resolved an issue raised or sought to be raised in later proceedings. It was, in neither case, a question of whether, on appeal, a party was estopped from raising a ground that had not been argued below.
In any event, the Court did not decide whether or which of these alternatives was relevant for it was held (at [129]) that it was not necessary to do so as the decision below could not be disturbed on the basis of the fresh argument.
In my view, insofar as the question of allocation of payments to principal or interest is now sought to be raised by the appellants for which they seek to have the Court’s attention drawn to further evidence, they are not prevented by an Anshun estoppel from doing so, though they must address the issue of the Metwally discretion and the significant hurdle that this places in their way.
Further, the respondents submitted that the appellants were prevented by the doctrine of res judicata from raising this issue.
That doctrine may be stated as follows: where a final decision has been pronounced on the merits by a judicial tribunal with jurisdiction over the parties and the subject matter, any party to that litigation, as against any other party, is estopped in any subsequent litigation from disputing that decision on the merits: K R Handley, Spencer Bower, Turner and Handley: The Doctrine of Res Judicata (Butterworths, 3rd ed, 1996) 9-10; [9].
As pointed out by the High Court in D’Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12; 223 CLR 1 at 17-18; [34]-[35], however, the appeal provisions in the court system are an exception to the doctrine.
The point was expressed succinctly and accurately by Tottle J in Bynon v ATMA Nominees Pty Ltd (as trustee of the Badjyn Investment Trust and H & B Farm Trust) [2017] WASC 30 at [25]:
The basic principle is clear: the final decision in a case estops or precludes any party to the litigation from disputing against any other party in later litigation the correctness of the earlier decision, except on appeal.
There may be a conceptual basis for suggesting that a finding by a court which is not explicitly the subject of an appeal is, therefore, a finding that is res judicata. There may be some force in this, but it does not make proper allowance for the Metwally discretion which would, in the circumstances under which it operates, permit such a matter as that to be considered on the appeal.
In this case, in any event, the Notice of Appeal did challenge the judgment of the Master and it put the whole of the judgment in issue. The grounds were more limited and, it is accepted, did not address the issue now to be raised, but that seems to me to be of no moment; the Notice of Appeal did not waive any entitlement to seek the exercise of the Metwally discretion in favour of the appellants.
Unless the respondents can show that the doctrine of res judicata is an exception to the Metwally discretion, and that seems to be a proposition that is not logical, then res judicata is irrelevant.
It is not logical because the application of the res judicata doctrine to the Metwally discretion would negate any operation of that discretion; it would mean that any issue not raised in the Notice of Appeal was res judicata and so there could be no occasion for an appellate court to exercise a discretion to allow that issue to be raised. That, of course, is not the law: Fingleton v The Queen [2005] HCA 34; 227 CLR 166 at 218; [147].
In my view, the doctrine of res judicata is irrelevant to this application.
That the respondents’ arguments have overreached is not, however, a basis for diminishing the weight of the arguments otherwise advanced. The application of the appellants does require them to reach a high bar before it can be accepted.
The appellants sought leave to file, and did file, submissions in reply. That reply took issue with the assertion of the respondents that the Anshun estoppel applied or that the doctrine of res judicata prevented the issue from being agitated by the Court if it exercised the Metwally discretion in their favour. I do not need to address these matters further.
The appellants also submitted that, in the context of the decision actually made by the Court, the further material would “assist the Court in making a just determination with regards to ... the judgment sum”. This is, of course, a matter relevant to the exercise of the Court’s discretion. It was noted that the sums for which the parties contended that judgment should be entered differs by $285 142.35, a not inconsiderable amount in the context of the respondent’s claim of $429 159.60.
The appellants submitted that the issue fell “firmly within post-judgment matters” consequent upon the Court’s deferral of entry of judgment.
It is accepted, as the appellants urged, that the presumption that payments by a debtor to a creditor are first applied to the payment of interest, is a rebuttable one.
The appellants further submitted that the Notice of Appeal was apt to raise squarely the issue of interest.
In reliance on Mareva Building Consultants v Zevon and in Ruskic v Greenwich Contractors Pty Ltd, the appellants submitted that the issue is one that does arise on the facts as found by the Court of Appeal and that the respondents are not prejudiced by the question now being raised because they were relevantly aware of evidence pointing to an appropriation of payments first to principal, second to interest. Indeed, they put matters in cross-examination of the director of first respondent which showed that he turned his mind to that issue. Further, an exhibit in the Court below was support for the appellants’ position. Thus, the appellants asserted that this was not prejudice that could inhibit the Court from exercising its right to permit the adducing of this evidence.
The further experts report, they pointed out, was never tendered or admitted in the appeal. It was submitted that the respondents could not rely on this report when they objected to the appellants’ application to adduce further evidence. The inconsistency was obvious. Whether, of course, the respondents could tender it if the application by the appellants is successful is not a matter I have to decide.
Nevertheless, I note that if, as appears accepted by the appellants, the issue was not the subject of a direct and clear consideration before the Master, it may well be that there is some prejudice, for the respondents may have other evidence including oral evidence, that they would have adduced had the issue been squarely agitated in the trial. That, however, is a matter that goes to the question of whether the Court should exercise its discretion in the appellants’ favour.
Thus, the matter is one for the exercise of a discretion and while the respondents’ opposition is strong, I cannot say that the application could not, in the proper exercise of the Court’s discretion judicially exercised, be granted.
I will, therefore, refer the matter to the three judges who constituted the Court of Appeal for the hearing of the application.
I shall also make directions as to the proper disposal of the application..
| I certify that the preceding eighty-three [83] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Refshauge. Associate: Date: 9 August 2017 |
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