Bakarich v Commonwealth Bank of Australia (No 2)
[2012] NSWCA 390
•30 November 2012
Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Bakarich v Commonwealth Bank of Australia (No 2) [2012] NSWCA 390 Hearing dates: 14 November 2012 Decision date: 30 November 2012 Before: Basten JA;
Campbell JA;
Macfarlan JADecision: (1) Appeal dismissed.
(2) Anthony George Bakarich to pay the costs of the appeal, including the costs of the proceedings before Bryson AJ on referral.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: APPEAL AND NEW TRIAL - Court of Appeal - practice and procedure - constitution of court - most issues decided in principle by 2007 decision of Court of Appeal, but orders not then made, and some questions remitted for inquiry and report - only one member of original Court of Appeal bench available after answering of remitted questions by court below - power to reconstitute - s 45AA Supreme Court Act not sufficient - importance that original court hears all aspects of matter to conclusion - consideration not as acute for appellate courts - only final orders to be decided - appropriate to reconstitute new bench
APPEAL AND NEW TRIAL - Court of Appeal - practice and procedure - powers of Court of Appeal - power to set aside own order and re-open appeal - grounds argued not different in substance to grounds argued in earlier application to re-open original appeal - abuse of processLegislation Cited: Contracts Review Act 1980
Corporations Act 2001
Judicature Act 1873
Supreme Court Act 1970
Uniform Civil Procedure RulesCases Cited: Algama v Minister for Immigration (2001) 115 FCR 253
Attorney General (Cth) v Finch (No 2) (1984) 155 CLR 107
Australian Securities and Investments Commission v Forge [2007] NSWSC 1489
Bagshaw v Scott [2005] FCA 104
Bakarich v Commonwealth Bank of Australia [2004] NSWSC 283
Bakarich v Commonwealth Bank of Australia [2007] NSWCA 169
Bakarich v Commonwealth Bank of Australia [2010] NSWCA 43
Bakarich v Commonwealth Bank of Australia [2010] NSWCA 130
Bakarich v Commonwealth Bank of Australia [2010] NSWCA 314
Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364
Bird v Colonial Sparkplug Pty Ltd (1942) 66 CLR 43
Bolton v Bolton [1949] 2 All ER 908
Brennan v Brennan (1953) 89 CLR 129
C v Registrar, Court of Appeal [1995] NSWCA 67
Cameron v Cole (1944) 68 CLR 571
Chua Chee Chor v Chua Kim Yong [1962] 1 WLR 1464
Coleshill v Manchester Corporation [1928] 1 KB 776
Collins v The Queen (1975) 133 CLR 120
Commercial Bank of Australia v Amadio (1983) 151 CLR 447
Cotogno v Lamb (No 2) [1985] 3 NSWLR 221
Ex parte Zietsch; re Craig (1944) 44 SR (NSW) 360
HMS Vanity (1946) 79 LlLR 594
Kable v State of NSW [2012] NSWCA 243
Lahoud v Lahoud [2006] NSWSC 126
Mary Patricia Bakarich v Commonwealth Bank of Australia [2011] NSWSC 1559
Munday v Munday [1954] 2 All ER 667
North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595
Orr v Holmes (1948) 76 CLR 632
R v Lewis (1988) 165 CLR 12
R v Pepper [1921] 3 KB 167
R v Southwark Crown Court [1993] 1 WLR 764
Re British Reinforced Concrete Engineering Co's Application (1929) 45 TLR 186
Re Macks; Ex parte Saint [2000] HCA 62; 204 CLR 158
Smartec Capital Pty Ltd v Centro Properties Ltd [2011] NSWSC 495
Smartec Capital Pty Ltd v Centro (CPL) Ltd [2011] NSWSC 644
The Hopemount (1943) 75 LlLR 94
Wentworth v Rogers (No 3) (1986) 6 NSWLR 642
Witham v Holloway (1995) 183 CLR 525
Whittle v Whittle [1939] 1 All ER 374
Wyman v Paterson [1900] AC 271Texts Cited: Archer, The Queens Courts, 2nd ed (1963) Penguin Books
Sir Anthony Mason, "The Use and Abuse of Precedent" (1988) 4 Australian Bar Review 93Category: Consequential orders Parties: Anthony George Bakarich as Executor of the estate of the late Mary Patricia Bakarich (First Appellant)
Anthony George Bakarich as Representative of the estate of the late Allan John Bakarich (Second Appellant)
Anthony George Bakarich (Third Appellant)
Vitlern Pty Limited (Fourth Appellant)
A Bakarich Industries Pty Limited (Fifth Appellant)
Commonwealth Bank of Australia (Respondent)Representation: Counsel:
A Bakarich, in person (Appellants)
DFC Thomas (Respondent)
Solicitors:
A Bakarich, in person, (Appellants)
Commonwealth Bank of Australia (Charles Tilley), (Respondent)
File Number(s): 2005/270113 Decision under appeal
- Citation:
- Allan John Bakarich and Anthony George Bakarich as Executors of the Estate of the late Mary Patricia Bakarich & Ors v Commonwealth Bank of Australia [2004] NSWSC 283
- Date of Decision:
- 2004-04-20 00:00:00
- Before:
- Nicholas J
Judgment
THE COURT:
Nature of the Casse
The Appellants were unsuccessful in a claim that they brought in the Equity Division. An appeal against that decision resulted in reasons for judgment being delivered in 2007: Bakarich v Commonwealth Bank of Australia [2007] NSWCA 169 ("the 2007 Appeal Judgment"). Though nearly all the questions raised in the appeal were decided by those reasons for judgment, the only orders eventually made following delivery of the 2007 Appeal Judgment remitted six specific questions to the Equity Division for inquiry and report. Those questions have now been answered.
The appeal that was dealt with by the 2007 Appeal Judgment has now been re-listed, for the purpose of deciding what orders should be made in light of the answers that have been given to the questions remitted to the Equity Division.
Two of the judges who gave the 2007 Appeal Judgment have since died. There is a preliminary question about whether the Court, as presently constituted, can and should finalise the appeal that was in large measure dealt with by the 2007 Appeal Judgment. If, as we decide is possible, the bench as presently constituted can and should make those final orders, there remains the question of what final orders should be made.
Facts Giving Rise to the Present Hearing
Demson Pty Ltd ("Demson"), a company associated with members of the Bak FILLIN \* MERGEFORMAT arich family, borrowed money from the Commonwealth Bank of Australia ("the Bank"). Two companies that were also associated with members of the Bakarich family, A Bakarich Industries Pty Ltd ("ABI") and Vitlern Pty Ltd ("Vitlern"), guaranteed the borrowings.
Without intending any disrespect by so doing, it is convenient on occasions to refer to members of the Bakarich family using their first names. Tony, Allan and Mary Bakarich also guaranteed the borrowings. Mary's guarantee took the form of a third-party mortgage of land. The business enterprise in which the borrowings were invested failed, and the Bank sought to enforce its securities. Mr Tony Bakarich arranged for the Bank to be paid out, but made the payment under protest, contending that the Bank was not entitled to receive as much as it claimed.
The borrowers and guarantors brought proceedings in the Equity Division seeking to recover the alleged overpayment. Nicholas J heard the liability part of that case over 17 hearing days in 2003. In a judgment of 20 April 2004, he dismissed all the claims: Bakarich v Commonwealth Bank of Australia [2004] NSWSC 283. In particular, he declined to set aside or vary the guarantees pursuant to the Contracts Review Act 1980, or on the basis of the type of unconscionability expounded in Commercial Bank of Australia v Amadio (1983) 151 CLR 447.
An appeal was brought to the Court of Appeal. Hodgson, Santow and Campbell JJA heard it over three days in April 2007. Arising from that hearing, the 2007 Appeal Judgment was delivered in July 2007. In substance, eight issues were raised in the appeal. They are identified at [71] of the 2007 Appeal Judgment:
"(1) Whether the primary judge was in error in concluding that the guarantees were executed on 18 August 1989 and the mortgage on 12 September 1989.
(2) Whether the primary judge was in error in not finding that the Bank had represented to Tony that commercial risks would be managed by the Bank by only making finance available on confirmed orders and/or in finding that Tony was aware of the commercial risks of the operation (particularly in so far as they were affected by whether or not credit was limited to confined [sic - should be "confirmed"] orders) and/or in finding that Allan and Mary were aware of these risks.
(3) Whether the primary judge was in error in finding against the appellants on the question of the Bank's misleading conduct.
(4) Whether the primary judge was in error in finding against the appellants on the question of discharge of the guarantees, this involving the sub-issues of:
(a) whether the terms of the principal contracts were changed, and
(b) if so, whether the Bank was protected by terms in the guarantees and the mortgage permitting such changes.
(5) The question of unconscionability and the Contracts Review Act.
(6) The question whether the appellants were precluded from challenging the guarantees and the mortgage because of the acknowledgement dated 7 November 1991.
(7) Whether the payment [sic - should be "payments"] actually made by the appellants were voluntary payments and thus irrecoverable.
(8) In the event that relief was given to the personal appellants pursuant to the Contracts Review Act, what should be the form of that relief, and in particular whether ancillary orders could and should be made relating to the liability of the companies under their guarantee."
The only claim upheld was that the guarantees should be varied under the Contracts Review Act. The Court held that guarantees given by Tony Bakarich, ABI and Vitlern should not be modified. Hodgson JA (with whom Santow and Campbell JJA agreed) specifically stated, at [129], that "the appeals by ABI and Vitlern must fail, as well as that by Tony". However, the Court also held that guarantees given by Mary and Allan Bakarich (who were not involved in the ordinary operation of the business enterprise) were unjust to the extent that they did not limit the amount recoverable under them to what it would have been if the Bank had restricted lending within limits it had approved at the time the loan facility was approved. Those limits had been significantly exceeded, without notice to or consent of Mary and Allan.
However, there remained a question of whether any remedy should be granted by reason of that injustice. By the time of the hearing in the Court of Appeal both Mary and Allan were dead. Tony had become the sole executor of them both. At the time of that hearing it was not clear exactly what interest Tony had in their estates (if only because it was not clear what debts the estates had, or whether they were insolvent) but it appeared that he may have had a substantial interest in them. The consequence of a lesser amount being recovered from the estates of Mary and Allan might have been that Tony, ABI and Vitlern would have an extra liability, to make up the amount that Mary and Allan were not liable to pay under their guarantees as originally written. Those matters gave rise to a question of whether there would be any point in ordering an inquiry to ascertain how much the Bank should repay to the estates of Mary and Allan. Also, it was not known what the indebtedness of the borrower, Demson, would have been if the original lending limits had been adhered to.
The only orders that were made at the conclusion of the 2007 Appeal Judgment were to direct submissions within a fixed timeframe on whether there should be an inquiry, and order that if the Appellant did not provide his submissions within that time, the appeal would be dismissed with costs.
The Appellant provided evidence and submissions within the appropriate time, so the appeal was not dismissed. This Court made the following orders on 24 April 2008:
"1. That the proceeding be remitted to a single judge of the Equity Division of the Court in order to consider the following questions:
(a) To what extent, if any, were the sums paid to the respondent on 2 July and 22 October 1993 beneficially owned by Allan and/or Mary or sums which otherwise count as payments by Allan and/or Mary?
(b) What proportion of the sums paid by Allan and/or Mary related to the obligations of Demson guaranteed by them respectively in the 18 August 1989 guarantee and 12 September 1989 mortgage?
(c) To what extent, if at all, are the estates of Mary and/or Allan insolvent?
(d) What relief, if any, should be granted to Mary's and/or Allan's estates under the Contracts Review Act? If relief is granted, what is the quantum of that relief?
(e) What conditions should be placed on the granting of relief to Allan and/or Mary?
(f) Is the respondent entitled to restitutionary relief from Tony, ABI and Vitlern with respect to any amount required to be repaid to Mary and/or Allan?
2. Costs reserved pending the outcome of the inquiry."
Bryson AJ was given the carriage of that matter in the Equity Division.
In the course of the Equity Division inquiry, Mr Bakarich filed a Notice of Motion seeking to have both the orders of Nicholas J, and the orders of the Court of Appeal, set aside. Bryson AJ referred that application to the Court of Appeal. Hodgson JA gave some directions, and other interlocutory steps occurred as outlined by Hodgson JA in a judgment of 2 June 2010, Bakarich v Commonwealth Bank of Australia [2010] NSWCA 130.
As appears from those reasons for judgment, Mr Bakarich sought to issue some subpoenas in support of his application to reopen the appeal, to make good an allegation that the Bank had stolen some $400,000. Hodgson JA indicated that if such an allegation was to be pursued for the purpose of the application to reopen the appeal, there should be a draft of an amendment to the Statement of Claim to raise the allegation. No such draft amendment was ever produced, notwithstanding there being more than one subsequent directions hearing.
In [21] of his judgment of 2 June 2010, Hodgson JA said:
By his affidavit of 23 May 2010, Mr Bakarich indicates that he is seeking to issue subpoenas and seeking a much wider inquiry than contemplated by the directions I have made. I am not prepared to accede to this, but I give this judgment in order to give Mr Bakarich the opportunity to seek a review of my directions."
No review was ever sought of the directions of Hodgson JA.
In the course of preparation to hear the application to reopen, it became apparent that one of the grounds upon which Mr Bakarich was relying was that Mr Sackar QC (as he then was), who had been counsel for the Bank at the trial, had had various prior connections with Nicholas J. Mr Sackar had been in a cattle breeding venture with Nicholas J, had occupied chambers on the same floor as Nicholas J, and had been a co-director with Nicholas J (whilst both were at the Bar) of Counsels Chambers Ltd and Denman Chambers Pty Ltd. As well, Nicholas J had been briefed, while at the Bar, by the Bank.
Campbell JA stated in open court, at a directions hearing concerning the re-opening application, certain matters that he said he would not in the ordinary course have felt any need to disclose, but that he thought prudent to disclose in light of the particular allegations that were being made in the re-opening application. They were that when he was at the Bar he also had been on the same floor of barristers as Mr Sackar and Nicholas J for a period of time, had on occasions (though not often) been briefed by the Bank, and had been a shareholder in Counsels Chambers Ltd.
That led to an application for Campbell JA to disqualify himself on the ground of ostensible bias, from hearing the re-opening application. He refused that application: Bakarich v Commonwealth Bank of Australia [2010] NSWCA 43 ("the 2010 Recusal Judgment").
By 2010, Santow JA had died. Hodgson and Campbell JJA and Lindgren AJA heard the application to re-open the appeal. The application was based on allegations of widespread fraud, collusion, tampering with transcripts, misuse of information obtained from files of the Family Court of Australia, ostensible bias of Nicholas J, improper behaviour of Mr Sackar QC, disappearance of documents from a joint tender bundle, dishonesty by the Bank in its conduct of the case, and other such matters. Mr Bakarich appeared for himself and all other applicants on the application to reopen. The application to reopen was refused, in a joint judgment of the Court: Bakarich v Commonwealth Bank of Australia [2010] NSWCA 314 ("the 2010 Re-opening Judgment").
On 15 December 2011, Bryson AJ delivered reasons for judgment and made an order that answered the questions posed by the Court of Appeal: Mary Patricia Bakarich v Commonwealth Bank of Australia [2011] NSWSC 1559. By that time it had been ascertained that Tony was the sole ultimate beneficiary of the estates of Mary and Allan. In broad terms, Bryson AJ concluded that the debt secured by the guarantees arose in part from causes other than the Bank having exceeded the lending limits. He concluded that if the lending limits had been adhered to, Allan's liability to the Bank would have been about $300,000 less than had been established by Nicholas J. However, even though Allan's estate was insolvent, it had not been established that anyone other than Tony, such as creditors who were not also creditors of Tony, had anything to gain from awarding a remedy to Allan's estate. Bryson AJ also concluded that if the lending limits had been observed, Mary's estate would not have had to pay anything under her guarantee. However, her estate was solvent, and thus the effect of awarding a remedy to Mary's estate would likewise be to benefit Tony. For those reasons, Bryson AJ concluded that it was inappropriate to grant a remedy to either estate. That was because this Court had already determined that, to the extent there was a shortfall in the amounts payable to the Bank by Mary and Allan under their separate guarantees, the Bank would be entitled to recoup that amount from ABI, Vitlern and Tony: 2007 Appeal Judgment at [154-[156].
On 23 December 2011, the Bakarich parties filed a Notice of Intention to Appeal from Bryson AJ's decision. The effect of filing that Notice was that the time for filing a Notice of Appeal was extended to 15 March 2012. However, no Notice of Appeal against the decision of Bryson AJ has been lodged.
By letter dated 21 March 2012 to the Registrar of the Court of Appeal, the Bank requested that the appeal be re-listed for further hearing in order that the Bank could seek an order that the appeal be dismissed with costs.
By May 2012, Hodgson JA had retired from the Court. On 14 May 2012, the Registrar wrote to the solicitors for the Bank and the Bakarich parties, saying:
"The Commonwealth Bank is directed to file and serve, within 21 days of the date of this letter, the following:
- Its submissions about what final orders should be made in the appeal that was dealt with by the judgment [2007] NSWCA 169, in light of the decision of Bryson AJ in [2011] NSWSC 1559.
- A copy of any material that in its submission the court should take into account (other than the reasons for judgment of Bryson AJ) for the purpose of making those final orders.
- In light of the retirement and subsequent death of Santow JA, and the retirement of Hodgson JA, its submissions about whether there is any reason why the final orders should not be made by any three judges of the Court of Appeal (possibly, but not necessarily, including Campbell JA).
- Its submissions about whether the proceedings for the making of final orders in the appeal should be conducted in open court, or on written submissions in chambers, together with reasons for adopting that course.
The solicitors for the appellants are directed, within six weeks of the date of this letter, to file written submissions that deal with the same topics as those listed above, and that respond to the submissions of the Commonwealth Bank on those topics.
The court will decide what the future course of this appeal should be once those submissions have been received."
The Bank filed submissions on 4 June 2012.
After making submissions about the appropriate orders, the Bank's submissions continued:
"IV - COMPOSITION OF THE APPEAL BENCH
32. CBA is content for final orders to be made by any three judges of the Court of Appeal. There is no reason why Campbell JA should not sit if that course is otherwise considered appropriate by the Court.
33. For the point of completeness, CBA notes that s 45AA of the Supreme Court Act 1970 (NSW) empowers two members of the bench to continue to hear an appeal if one or more other members of the bench die, resign or become unable to continue to sit. That section is not enlivened where, as here, only one member of the original bench (Campbell JA) continues to hold a commission. However, it is well established that the Court of Appeal enjoys the power to reconstitute itself in the present circumstances [Cotogno v Lamb (No 2) [1985] 3 NSWLR 221 at 223C-D]. Section 45AA should not be construed as exhaustively identifying the circumstances in which the power may be exercised.
V - ORAL HEARING
34. The appellants have been represented by Tony in person at a number of stages in the litigation, including applications before the Court of Appeal: eg [2010] NSWCA 314. During those periods in which Tony has been self-represented, various allegations of misconduct and apprehended bias have been levelled against both opposing counsel and the Court.
35. In these circumstances, CBA considers it would be most appropriate for the appeal to be disposed of in open court, rather than on the papers. However, CBA is content for the latter course to be taken if the Court of Appeal considers that course to be appropriate notwithstanding the matters identified immediately above.
36. If the appeal were listed for hearing, CBA estimates that its oral submissions should not exceed 30 minutes and that the total duration of the hearing should not exceed 1.25 hours. CBA's time estimate is, however, subject to review upon receipt of the appellant's written submissions. The duration of any hearing may also be affected by whether the appellants are represented by counsel or Tony." (footnotes included in text)
Hodgson JA died on 5 June 2012.
Mr Bakarich has filed submissions in response. We will return later to consider in greater detail the submissions of both Mr Bakarich and the Bank.
Mr Bakarich's submissions objected, on the ground of ostensible bias, to Campbell JA continuing to hear the matter. The President directed that at least in the first instance the matter would be listed before the bench as presently constituted. That listing was made with the intention that we would consider whether it was possible for the final orders in the appeal to be made by the bench as presently constituted, and that Campbell JA would decide whether he would decline to sit. At the hearing on 13 November 2012, after hearing further submissions from Mr Bakarich, Campbell JA announced that he would refuse the recusal application, and that he would deliver separate reasons for judgment to explain why he had taken that course.
Though ABI and Vitlern were originally appellants, they do not continue to be parties to the appeal. Vitlern was deregistered on 5 August 2008. ABI went into liquidation on 30 August 2010 and the liquidator has taken no step for ABI to continue as a party to the appeal. Thus, the only continuing appellant is Tony, in his own right and as executor of the estates of Mary and Allan.
Power to Reconstitute
Even though Mr Bakarich has made no submissions that dispute the contention of the Bank that it is possible for final orders to be made concerning the appeal by the bench as presently constituted, we should satisfy ourselves that it is appropriate to make those orders.
Section 45AA(1) Supreme Court Act 1970 provides:
"If an appeal is commenced before 3 or more Judges of Appeal and, before the appeal is determined, one or more of the Judges dies, resigns from office or otherwise becomes unable to continue as a member of the Court of Appeal for the purposes of the appeal, the hearing and determination of the appeal may be completed by the remaining Judges of Appeal so long as at least 2 Judges remain and the parties consent."
It is the only statutory provision that governs the Court of Appeal reconstituting when a member of the Court who has commenced hearing an appeal becomes unable to continue to hear it. As two judges who delivered the 2007 Appeal Judgment do not remain, s 45AA(1) does not offer a mechanism to reconstitute the court in the present case. Thus, whether it is possible, and proper, for the Court as presently constituted to finalise the appeal that was largely decided by the 2007 Appeal Judgment, must depend upon principles of the general law.
First Instance Tribunals
There is a significant line of authority concerning the circumstances in which it is permissible for one first-instance judge or tribunal to make a decision concerning proceedings that another judge or tribunal has commenced to hear, but has been unable to continue to hear. Even though the present case concerns reconstitution of an appellate court, the cases concerning reconstitution of first-instance tribunals can illuminate what, if any, limitations on reconstitution there are simply by virtue of being a court.
Concerning reconstitution of first-instance tribunals, if a statute specifically required the same judges to be present during the whole of the proceedings, that provision must be complied with: Munday v Munday [1954] 2 All ER 667. Conversely, if a statute permitted substitution of one judicial officer by another in certain circumstances, if a case begun by one judge has become part-heard, a different judge can complete the case in the circumstances permitted by such a statute: Chua Chee Chor v Chua Kim Yong [1962] 1 WLR 1464.
Subject to those matters, whether it is permissible for another judge to complete the part-heard case, rather than starting the hearing afresh, can be influenced by whether the trial is civil or criminal: R v Southwark Crown Court [1993] 1 WLR 764. It can be influenced by whether the trial is before a judge sitting alone, a judge and jury, or some differently constituted form of tribunal. It can be influenced by whether there is a significant conflict in the evidence: Bolton v Bolton [1949] 2 All ER 908; Re British Reinforced Concrete Engineering Co's Application (1929) 45 TLR 186; Brennan v Brennan (1953) 89 CLR 129 at 136-137. It can be influenced by whether the reason why a judge who has embarked on hearing a case does not continue to hear it to its conclusion is because it is impossible for the judge to continue (whether through death, ceasing to hold office as a judge, or other causes such as incapacitating illness) or whether it is a matter of personal or administrative convenience. It can be influenced by the nature of the tasks that remain to be done when the first judge becomes unavailable.
Notwithstanding the greater procedural strictness that usually applies in criminal trials, if the judicial officer before whom a criminal trial that resulted in a conviction has died, it is permissible for a sentence to be imposed by a different judicial officer who has been provided with the shorthand notes of the trial and heard submissions on sentence: R v Pepper [1921] 3 KB 167. That principle has been applied in Australian Securities and Investments Commission v Forge [2007] NSWSC 1489, when White J at [31] imposed civil penalties for contraventions of the Corporations Law on the basis of evidence that had been admitted before Foster AJ, when liability had been found by Foster AJ, and that finding had been upheld in the Court of Appeal and the High Court.
If one judge decides contested questions of fact on the basis of evidence that had been heard by another judge, that has been held to be a circumstance warranting a new trial at least in situations where the parties do not consent: Bolton v Bolton; The Hopemount (1943) 75 LlLR 94; HMS Vanity (1946) 79 LlLR 594. One reason for that is that the appellate court, exercising its obligation to re-hear, can have no confidence in a credit-based finding made by a tribunal the members of which have not fully heard the evidence in question: Whittle v Whittle [1939] 1 All ER 374. However, in Whittle, Sir Boyd Merriman P declined at 376 to say that as a matter of law the court was bound to set aside a decision in which the decision-maker had not heard all the evidence that was given. Thus, notwithstanding the irregularity of a judge making findings of fact on the basis of evidence that he or she has not heard, if the appellate court can be confident about whether the result arrived at at first instance is correct or incorrect it can decline to order a new trial: Bolton v Bolton at 911; Brennan v Brennan. Similarly, it has been held that when a judge dies when part-heard in civil proceedings concerning which there is no real dispute as to issues of fact, it can be permissible for another judge to decide the issues on the basis of the shorthand notes, and with the parties' consent: Re British Reinforced Concrete Engineering Co's Application; Bagshaw v Scott [2005] FCA 104 at [35] per Bennett J. Even if there has been no explicit consent to a second judge continuing with the matter after the unavailability of the judge who had commenced it, acquiescence in the second judge continuing with the matter can deprive the party acquiescing of any right to complain about the procedure: Wentworth v Rogers (No 3) (1986) 6 NSWLR 642 at 649 per Kirby P, 653 per Priestley JA (Glass JA agreeing).
In Coleshill v Manchester Corporation [1928] 1 KB 776 a judge died before the evidence was completed in a jury trial of a civil action, and another judge presided over the remainder of the trial. The witnesses who had already given evidence were not recalled, and the replacement judge read the shorthand notes of their evidence. The trial resulted in a verdict for the plaintiff. On appeal, Scrutton LJ at 785-6 made the following inconclusive remarks:
"I can understand that in the unprecedented and painful circumstances it is unnecessary to take any objection to what happened, but I think it is a precedent which should not be followed in future. I doubt whether a judge has any jurisdiction to continue the hearing of a case in which witnesses have been called in Court in the course of the trial before the jury and another judge, it not being a case of evidence being taken on commission or before an examiner."
Neither of the other judges in the Court of Appeal (Atkin LJ and Eve J) commented on the procedure that had been followed. The order of the Court of Appeal was that the appeal be allowed and judgment entered for the defendants. That order would not have been possible if the first-instance proceedings had been irretrievably vitiated.
In Brennan v Brennan a judge hearing contested divorce proceedings had died after the evidence was completed, but before he delivered judgment. At the request of the parties, another judge read the transcript. Some, but not all, of the witnesses were recalled before the second judge. Though the case involved contested questions of fact, the High Court (Williams ACJ, Webb and Kitto JJ) did not hold that the resulting decree nisi was one that should be set aside ex debito justitiae. Instead, their Honours declined to make an order for a new trial, and dealt with the appeal on its merits. A factor in their Honours deciding to take that course was that the parties had consented to the procedure adopted by the second judge. In several of the cases referred to at [38] above, the court had also referred to the fact that the parties had consented to another judge continuing with the case as though it was a matter relevant to whether the second judge should have completed the hearing. However, the consent of the parties could not have conferred validity on the proceedings, if it were inherently impossible for a trial begun by one judge to be completed by another.
The explanation for this may well be that, although in Coleshill Scrutton LJ referred to whether the second judge had "jurisdiction" to continue to hear the case, that is probably not the most apposite term. The trial in Coleshill was held at the Manchester Assizes. After the Judicature Act 1873 a judge of assize was part of the High Court of Judicature (Archer, The Queens Courts, 2nd ed (1963) Penguin Books p 140). Thus a judge presiding at Assizes in 1928 was a judge of a superior court. Apart from limitations arising from the constitution (Kable v State of NSW [2012] NSWCA 243), an order of a superior court is valid until it is set aside: Cameron v Cole (1944) 68 CLR 571 at 590-591, Re Macks; Ex parte Saint [2000] HCA 62; 204 CLR 158, and other cases referred to by Gaudron J in Re Macks at 184 [49], fn 80; Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364 at [11]. Further, if the party to whom a procedural law is addressed "chooses to disregard it, the normal outcome is that choice accrues to the other party either to do nothing, or to seek an appropriate order from the court" (Berowra Holdings at [14]). It is not as though any irregularity that there might be in the trial proceeding before the second judge makes it a nullity, at least when the trial is being held in a superior court.
In Wentworth v Rogers (No 3) Cantor J had become ill and unable to continue after deciding a question concerning production of documents on subpoena. Maxwell J then decided how the costs of that application should be borne. On an application for leave to appeal from Maxwell J's decision, Kirby P said, at 646:
"It seems clear that when a judge dies, retires or otherwise loses office in the middle of proceedings, this eventuality will not be permitted to frustrate the completion of those proceedings."
Similarly, Priestley JA (Glass JA agreeing) said at 653:
"The circumstance of the change of judge was made the subject of a submission that Maxwell J had no jurisdiction to make the orders which he did. I do not think this can be right. If a judge is unable through absence to make an order which needs to be made for some proceeding before the court to be completed there must be jurisdiction in the court enabling another judge to make the order."
As Priestley JA observed, at 653:
"In England the only place where the matter is at all fully discussed appears to be in Sir Robert Megarry's A Second Miscellany-at-Law (1973) at 53-58."
Sir Robert began his account at 53 by saying: "Like all human endeavour, the judicial process is subject always to the paramount claims of death."
In Smartec Capital Pty Ltd v Centro Properties Ltd [2011] NSWSC 495, Barrett J considered an application by a member of a company under s 247A(1) Corporations Act 2001 for an order to inspect certain of the documents of the company. In a reserved judgment he decided in principle what sorts of documents could be inspected, and on what terms. The judgment concluded, at [93]-[94]:
"Because I have now entered on long leave, it will be necessary for the final orders to be settled and made by another judge: Wentworth v Rogers (No 3) (1986) 6 NSWLR 642.
The parties therefore have leave to approach the Corporations Judge for the time being for that purpose and for the determination of the costs of the proceedings."
In due course White J made the orders relating to the application, and the costs order: Smartec Capital Pty Ltd v Centro (CPL) Ltd [2011] NSWSC 644. Debate before White J concerned the description of the documents of which inspection would be allowed. His Honour said, at [11]:
"This is the sort of question that is often debated when the court is asked to make orders to give effect to the reasons for decision. I think, consistently with Wentworth v Rogers (No 3) (1986) 6 NSWLR 642, that I can make such orders as appear to me to be appropriate to give effect to his Honour's reasons so as to advance the purpose that his Honour identified as the proper purpose that Smartec was pursuing."
White J also made decisions concerning the identity of the people who should be permitted to inspect the documents ([12]) and the purpose for which the documents inspected could be used ([14]), as well as orders concerning the costs of (inter alia) the hearing before Barrett J.
Similarly, in Lahoud v Lahoud [2006] NSWSC 126 Campbell J decided how costs should be borne concerning some proceedings the merits of which had been decided by Palmer J, who had gone on long leave.
These cases concerning reconstitution of a first instance tribunal show that there are circumstances in which it could sometimes be irregular, to an extent justifying setting aside on appeal, for a first instance decision to be reached by one judge completing a proceeding that had been begun by another judge. Of the cases we have surveyed, the only authorities that bind us are Brennan v Brennan and (subject to leave to reargue being granted) Wentworth v Rogers (No 3), so we would not wish to say anything definitive about what would amount to such circumstances. However, what is of particular relevance for the present decision is that those cases also show that, except when there is a statutory prohibition on adopting such a course, it is not inherently impossible for one judge of a superior court to complete a legal proceeding that has been begun by another judge of that court. That conclusion can be drawn from both Brennan v Brennan and Wentworth v Rogers (No 3). There is no statutory prohibition on a reconstituted bench of this Court completing the appeal that was largely decided by the 2007 Appeal Judgment. Rather, whether we should complete the proceeding depends on whether there would be any procedural inappropriateness in us completing the task.
Appellate Courts
Somewhat different considerations apply to reconstitution of an appellate court to those that apply concerning replacement of one first-instance judge by another. Except in the rare case where fresh evidence or further evidence has been received in the appellate court, there will be no possibility of the reconstituted court lacking an advantage that the original court had of seeing the witnesses.
In Cotogno v Lamb (1985) 3 NSWLR 221 this Court considered a situation where a bench comprising Kirby P, Mahoney and McHugh JJA had heard and determined a preliminary matter about whether an appellant should be permitted to enlarge his grounds of appeal. After that judgment had been delivered, Mahoney JA was due to go on long leave. The hearing resumed before a bench comprising Kirby P, Glass and Samuels JJA. Their Honours held that there was power to reconstitute the Court to include a judge of appeal in substitution for Mahoney JA. They held, at 223:
"There is a long line of authority which stresses the importance of courts, once constituted to hear a matter, proceeding to hear all aspects of the matter to conclusion: see, for example, R v Marrington (1850) 1 SCR (NSW) (App) 11; 1 Legge 643; Ex parte Ryan (1864) 3 SCR (NSW) 221; Fulker v Fulker [1936] 3 All ER 636 and Munday v Munday [1954] 1 WLR 1078; [1954] 2 All ER 667. However, these cases deal with hearings at first instance where the court deciding the matter must have the advantage of hearing and seeing all of the witnesses. Such a consideration does not govern the hearing of appeals. The power to reconstitute an appellate court cannot be in doubt in the case where that is necessary after a judge dies, retires or is incapacitated in the midst of a hearing and before judgment is delivered. Otherwise, by reason of the statutory obligation to constitute the court with three or more judges (see Supreme Court Act 1970, s 43(1), the facility of appeal could be entirely frustrated. Similar considerations apply in circumstances where a judge takes extended leave, although internal arrangements of an administrative kind usually avoid difficulties such as have now arisen."
Wyman v Paterson [1900] AC 271 at 273 notes that an appeal to the House of Lords was argued before three Law Lords, but when one of them died without leaving a written judgment it was argued a second time before the two surviving Law Lords, and additional Law Lords. The report does not say whether the course of re-arguing the case, rather than having one or more additional Law Lords read the appeal book and transcript of argument and then deciding whether they wished to hear additional argument, was adopted because it was felt necessary to do so, rather than prudent or convenient to do so. Nor does the report give any indication of whether the parties were invited to consent to any lesser course than full re-argument, or whether either party opposed anything less than full re-argument.
In any event, the situation in Wyman, where the tribunal before which the case had originally been argued had not formed any collective decision, is quite different from that of the present case, where this Court in the 2007 judgment not only decided all the substantive questions involved in the appeal except those remitted for enquiry and delivered a unanimous judgment concerning them, but in the 2010 Re-opening Judgment declined to permit further argument on those questions.
Orr v Holmes (1948) 76 CLR 632 arose when the Queensland Full Court had set aside a verdict, directed a new trial, but adjourned the question of costs. After that order had been made, one of the judges who had constituted the Full Court died, and the question of costs was dealt with by a differently constituted Full Court.
Dixon J was the only judge in the High Court who considered the effect of the order for costs having been pronounced in those circumstances. He said, at 637-8:
"It is objected that it was not competent to a court not composed of the same judges to deal with the costs. The objection is mistaken.
An order had been pronounced upon the appeal or application for a new trial. The order which was drawn up included a specific provision adjourning or reserving the question of costs and so treating it as a distinct matter. The case is not one of the death of a judge before the hearing and determination of a proceeding are concluded by a court of which he is a necessary member. The order had disposed of the proceeding before the court and, as a matter of jurisdiction, the Supreme Court constituted as a Full Court in any manner might hear and determine the question of costs adjourned or reserved. No doubt as a matter of convenience the court would not be differently constituted to deal with costs that are adjourned or reserved, if it could be avoided. But that consideration does not affect jurisdiction."
In C v Registrar, Court of Appeal [1995] NSWCA 67 a litigant had been found guilty of contempt of court. The court comprising Kirby P, Meagher and Powell JJA had imposed a particular penalty upon him. Later, that litigant moved the Court for relief from that penalty. At the time the motion seeking that relief came before the Court, Meagher JA was on long leave. The motion came before a court comprising Kirby P, Mahoney and Powell JJA. The Court said:
"We see no difficulty in the reconstitution of the Court. The present motion amounts to a fresh proceeding. The previous proceedings were concluded in this Court by the declarations that the claimant was guilty of the offences charged and the orders providing for his punishment. Those declarations and orders were the subject of an application to the High Court of Australia for special leave to appeal. However, that Court declined to provide such special leave. Accordingly, the orders of this Court, which had been perfected for the High Court proceedings, concluded the earlier hearings. Whilst retention of the same Bench would have been normal in a case of this kind, it was not essential. Neither party argued to the contrary."
By the time that decision was given, the High Court had decided Witham v Holloway (1995) 183 CLR 525. Witham held that proceedings for contempt were criminal. Their Honours remarks would need to be read with that in mind.
In R v Lewis (1988) 165 CLR 12, the High Court (Wilson, Brennan, Dawson, Toohey and Gaudron JJ) rejected an application by the Crown for special leave to appeal from a decision of the Court of Criminal Appeal of the Northern Territory, in which a conviction had been quashed and a verdict of acquittal entered. A court comprising three particular judges of the Court of Criminal Appeal had given directions concerning interlocutory steps to be taken in an application for leave to appeal. The application was heard by a bench comprising three judges, of whom one was different to the judges who had given the directions. The High Court did not regard that change of membership of the court as warranting special leave. Their Honours said, at 15:
"Of course, it is of fundamental importance that a court which enters upon the exercise of jurisdiction should see the matter through to finality. If through force of circumstances that cannot be done then the hearing must be commenced de novo unless there is some other more convenient arrangement which has the consent of all the parties and is not inimicable to the proper adjudication of the matter."
However, there were several reasons why that principle did not warrant the grant of special leave. Their Honours said, at 15-16, that the occasion when directions were given was:
"... no more than a preliminary examination of the issues sought to be raised by the respondent in order to determine the manner in which the hearing should proceed. In short, it was no more than a directions hearing and concluded with the Court giving the necessary directions. It did not embark on a hearing of the merits of the application. This is borne out by the absence of any objection from either party when the proceedings resumed before a differently constituted Court on 1 July 1987. In any event, a perusal of the transcript of the entire proceedings fails to yield any cause for concern that the reconstitution of the Court was prejudicial in any way to either party, with the consequence that even if the hearing of the merits of the application was thought to have begun on [the day of the directions hearing] the point now taken by the Crown would not warrant the grant of special leave."
Thus, the statement of principle that we have set out at [58] is obiter. Further, as the statement was made in the course of refusing the special leave application it is not a binding precedent: Collins v The Queen (1975) 133 CLR 120 at 122-3 per Barwick CJ, Stephen, Mason and Jacobs JJ; Attorney General (Cth) v Finch (No 2) (1984) 155 CLR 107 at 114-5 per Gibbs CJ, Mason, Wilson and Dawson JJ; North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595 at 643 per McHugh J; Sir Anthony Mason, "The Use and Abuse of Precedent" (1988) 4 Australian Bar Review 93 at 96-98. Statements made in the course of dismissing a special leave application have, however, persuasive value: Algama v Minister for Immigration (2001) 115 FCR 253 at 265 per Whitlam and Katz JJ, French J agreeing; Bird v Colonial Sparkplug Pty Ltd (1942) 66 CLR 43 at 47 per Starke J; Ex parte Zietsch; re Craig (1944) 44 SR (NSW) 360 at 368 per Jordan CJ. In light of the other cases to which we have referred, in which reconstitution of an appellate bench has been permitted in a civil appeal, and the fact that greater procedural strictness is commonly required in criminal cases than in civil cases, we would not regard the remarks in R v Lewis as providing guidance outside the context of criminal appeals.
Decision
All the substantive questions affecting ABI, Vitlern and Tony personally were decided by the 2007 Appeal Judgment. Thus, dismissing their appeal does not involve us in doing anything other than authorising a formal step. The remitting of the six questions, the answers to which were needed to decide whether relief should be granted to the estates of Allan and Mary, treated those questions, in the manner described by Dixon J in Orr v Holmes, as a distinct matter. There is no challenge to the correctness of the findings of Bryson AJ, and in the light of those findings it is quite clear what orders should be made to dispose of the appeal brought by Tony as executor of the estates of Mary and Allan. There was no evidence heard in the course of the hearing leading to the 2007 Appeal Judgment that is relevant to any determination we must now make. The occasion for the Court needing to consider whether it is possible to reconstitute is the total impossibility of the Court as originally constituted completing the hearing, by reason of the deaths of Santow JA and Hodgson JA.
As was said in Cotogno v Lamb, the:
"... power to reconstitute an appellate court cannot be in doubt in the case where that is necessary after a judge dies... in the midst of the hearing before judgment is delivered otherwise, by reason of the statutory obligations constitute the court was three or more judges... the facility of appeal could be entirely frustrated".
Once it is accepted that the Court as reconstituted has power to determine the appeal, the desirability of taking that course is overwhelming. The alternative would be to recommence the appeal before a newly constituted court. Because that course would re-agitate issues already determined, it should not be taken. Neither Mr Bakarich nor the Bank make any objection on the ground of lack of power, or procedural inappropriateness, to judges different to those who heard the 2007 appeal now completing the appeal. Accordingly this Court should complete the appeal by making orders to give effect to the matters determined by the 2007 Appeal Judgment and further findings of Bryson AJ.
The Appropriate Orders
We have set out at [24] above the directions that defined the ambit of the present hearing. The Bank filed submissions in which it contended that the appropriate order to make was that the appeal be dismissed with costs.
Mr Bakarich's submissions mention nothing about the answers that Bryson AJ gave to the questions posed, nor about what order should be made in the appeal in the light of those answers. His submissions were directed to crimes and corruption that he alleges have occurred in the course of this litigation, and errors in the original judgment of Nicholas J. He seeks to re-open the entire matter, to ventilate those claims.
There is a procedural difficulty in giving effect to those submissions, in that there is no process before the Court that identifies the precise orders that he seeks, or the basis upon which they are sought. However, there is also a reason of substance why those submissions should not be given effect to. The claims that he makes are similar to the grounds on which he relied on the unsuccessful application to re-open the appeal in 2010. Insofar as they are identical to the claims made in the 2010 re-opening application, it would be an abuse of process to argue them again. Insofar as there might be small differences of detail in the claims made, it was unreasonable not to bring them as part of the 2010 re-opening application
Mr Bakarich complains of never having had the opportunity to issue subpoenas to gather the evidence to make good his contentions. However, the question of whether he should be permitted to issue subpoenas arose in the course of preparation to hear the application to re-open, in circumstances that we have set out at [14]-[16] above. Mr Bakarich did not articulate, at that time, the claim in support of which he wished the subpoenas to be issued, and did not avail himself of the opportunity that Hodgson JA gave him of seeking a review of Hodgson JA's decision not to permit the subpoenas. It is too late to do so now.
In our view, the reasoning of Bryson AJ about why it was inappropriate to grant a remedy to either estate is persuasive, in light of the facts he has found. The orders that should be made concerning the appeals brought by ABI, Vitlern, and Tony in his personal capacity have already been decided in the 2007 Appeal Judgment. In our view, the appeal should be dismissed insofar as it is brought by Tony as executor of the estates of Mary and Allan.
Even though Vitlern and ABI are no longer active parties to the appeal, we see no reason why an order for dismissal of the appeal that they brought should not be made. At the least, such an order would be justified on the basis that they were not prosecuting the appeal. However, the deregistration of Vitlern has the effect that it is not possible to make an order for costs against it. Nor, when it is not represented before us on the present hearing, would it be proper to make an order for costs against ABI. In circumstances where all the appellants had acted by the one set of lawyers, or with Mr Bakarich appearing for them, and where the appropriate order for costs, if ABI and Vitlern had remained involved in the proceedings would be for all appellants to be jointly and severally liable for the costs of the appeal and the proceedings before Bryson AJ, the lack of an order for costs against Vitlern and ABI will probably make no practical difference.
In its written submissions, the Bank sought an order giving it twenty-one days in which to file any written submissions as to why a special costs order should be made in its favour. At the hearing, counsel for the Bank accepted that if any special costs order were to be sought, it could be done by seeking a variation of orders in accordance with Uniform Civil Procedure Rule 36. We see no occasion, on the material now before us, to make any costs order other than that costs follow the event, so far as the active appellants are concerned.
Even though Tony appears in the appeal in his own right, and also as executor of the estates of Mary and Allan, there is no occasion to recognise those different capacities in the order for costs that is made. If there is occasion to apportion the costs between Tony personally, and the two estates, that apportionment should be carried out as a matter of the internal administration of the two estates.
The orders that the Court makes are:
(1) Appeal dismissed.
(2) Anthony George Bakarich to pay the costs of the appeal, including the costs of the proceedings before Bryson AJ on referral.
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Decision last updated: 30 November 2012
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