Baba v Sheehan

[2020] NSWCA 361

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Baba v Sheehan [2020] NSWCA 361
Hearing dates:	20 November 2020
Date of orders:	20 November 2020
Decision date:	20 November 2020
Before:	Brereton JA at [1] & [11] Emmett AJA at [7] Simpson AJA at [10]
Decision:	Application for leave to amend the Notice of Appeal be refused.
Catchwords:	CIVIL PROCEDURE – Court of Appeal – Application for leave to amend notice of appeal to add additional ground alleging invalid appointment of trustee – Where issue not raised before primary judge – Where no practical utility in agitating ground in circumstances where validity of subsequent appointment of same trustee unchallenged – Where application not made until day of hearing – Leave refused
Category:	Procedural rulings
Parties:	Anna Monica Baba (first appellant) Mustafa Sedat Baba (second appellant) Paul Sheehan (first respondent) Rijalu Pty Ltd (second respondent) Smart Street Optical Pty Limited (third respondent) Silktote Pty Limited (fourth respondent)
Representation:	Counsel: Phillip James Beazley (solicitor) (appellants) Ireland QC (solicitor) (respondents) Solicitors: Beazley Lawyers (appellants) McGirr Lawyers (respondents)
File Number(s):	2019/323678
Decision under appeal	Court or tribunal: NSW Supreme Court Jurisdiction: Equity Division – Corporations List Citation: [2019] NSWSC 1281 Date of Decision: 26 September 2019 Before: Parker J File Number(s): 2017/252703

Judgment – ex tempore

Application for leave to amend notice of appeal; see transcript p 7

1. BRERETON JA: Before the court, at the outset of the hearing of this appeal when it was called on for hearing, is an oral application on behalf of the appellant for leave to amend the notice of appeal by adding an additional ground, to the following effect:

"His Honour erred in upholding the validity of the appointment of the fourth respondent Silktote, as trustee of the SSO Trust."

2. In the course of argument on the application for leave to amend, it appeared that what was sought to be raised under the rubric of this ground went not so much to what has been called the ‘fraud on a power’ ground, which is said to be included in the extant grounds of appeal, but to aspects of the formal validity of the purported appointment of the fourth respondent as trustee in October 2016.

3. Before the primary judge, there was an evidentiary dispute as to whether an instrument in writing, within the meaning of the trust deed, had been delivered, giving effect to the purported removal of the previous trustee and appointment of the replacement trustee. As a matter of fact, his Honour found that such a document had been delivered. To my mind, his Honour's reference in para 40 of the judgment to a notice, when read in the context of what is said in para 41 of the judgment referring to an instrument, indicates that his Honour intended, by reference to a notice in para 42, to find that a sufficient instrument compliant with the requirements of the trust deed had been delivered.

4. It does not appear from the primary judgment, and it has not been suggested in submissions on the application for leave, that there was any dispute before his Honour as to the legal sufficiency of whatever document it was that was delivered, to meet the requirements of an instrument as described in the trust deed. Nor does it appear that there was any issue before his Honour, as is now sought to be raised, that the instrument was required to be registered before it took effect. These issues were raised for the first time at the outset of the hearing today. Mr Ireland QC, who appears for the respondents, says that he is not in any position to meet them, and that had he had earlier notice, there would at the least have been a notice of contention, seeking to rely on the later appointment, referred to by his Honour in para 30 of the judgment, where his Honour records that against the possibility that the Court might find that the purported appointment in October 2016 was invalid, a formal instrument in writing was executed shortly before the hearing commenced in November 2018. His Honour noted that there was no argument advanced that that instrument did not comply with the terms of the trust deed and Mr Beazley, who appears for the appellant before us, acknowledges that there is no such argument, other than as to whether registration was required, an issue which as I have said was not raised at trial.

5. It seems to me that even if there were not other discretionary considerations, there would be practically no utility in granting leave to permit this ground now to be agitated. That is because even if the October 2016 appointment were invalid, the November 2018 appointment is, save for the question of registration, unchallenged. In those circumstances, the Court asked what difference it would make to the relief granted if the appointment were validly made but two years later than his Honour had found. The response was that it would go to the exercise of the Court's discretion to appoint a receiver to the trust. However, his Honour did not decline to appoint a receiver on discretionary grounds, but found that it was not open to do so on legal grounds. In circumstances where the essential basis upon which appointment of a receiver is sought is what might by analogy be called the winding up of the trust on the just and equitable ground, founded on the exclusion of the appellants from the trust or from benefits under and control of and participation in the trust, their so‑called "oppression", and the failure of the relationship of trust and confidence that had previously existed between the unit holders, it seems to me that whether those circumstances arose from October 2016 or November 2018, and thus whether the new trustee was appointed in October 2016 or November 2018, makes very little if any difference.

6. On account of the lack of utility in permitting it to be raised now, and the very late stage at which it was raised, and the disadvantage to the respondent from permitting it to be raised now, and the fact that the question of any requirement for registration was not only not raised at trial but has not previously been raised until now, I would decline leave to amend.

7. Emmett AJA: This application for leave to amend, which has been made ore tenus, appears to be justified simply on the basis that the question of validity of the removal of the trustee and appointment of a new trustee, as distinct from the exercise of any power, occurred to the applicants’ counsel in the course of preparation for the hearing. I agree with what has fallen from Brereton JA that, in the circumstances, no sufficient justification has been made for raising that point at this late stage.

8. There may well have been some question as to whether or not the primary judge actually found that there was an instrument of appointment, as distinct from a notice of appointment. Be that as it may, counsel for the first, second and fourth respondents has made the important point that that is a matter that will require investigation and examination and therefore it is inappropriate that leave be granted to amend at this stage to raise that point.

9. On the other hand, counsel for the respondents indicated that the question of invalidity by reason of lack of registration of the instrument of appointment is something with which he would be in a position to deal. For that reason, I would have been disposed to grant leave to raise a new ground, limited only to the question of registration or non‑registration of the purported instrument of appointment. Otherwise I agree with what has fallen from Brereton JA.

10. SIMPSON AJA: I agree with the presiding judge, I would refuse leave to amend, principally on the ground of the very late stage at which the issues were raised.

11. BRERETON JA: The order of the Court therefore is that the application for leave to amend the notice of appeal be refused.

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Decision last updated: 19 March 2021