Bank of SA v Ferguson
[1997] HCATrans 236
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Adelaide No A39 of 1996
B e t w e e n -
BANK OF SOUTH AUSTRALIA LIMITED
Appellant
and
KENNETH EDWARD FERGUSON
Respondent
BRENNAN CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
TRANSCRIPT OF PROCEEDINGS
AT ADELAIDE ON WEDNESDAY, 3 SEPTEMBER 1997, AT 12.13 PM
Copyright in the High Court of Australia
MR W.J.N. WELLS, QC: If the Court pleases, I appear with my learned friend, MR J.M. CUDMORE, for the appellant (instructed by Ward & Partners).
MR J. JANSON: If it pleases, your Honours, I appear for the respondent with my learned friend MR M. BROWN (instructed by Janson & Co).
BRENNAN CJ: Mr Wells, we have your written submissions, of course, and we are familiar with the general nature of the case.
MR WELLS: Your Honours, ought, I think, also to have some further material from us, if I can just ensure that the list is complete. There is the list of authorities with the cases. There is a copy of the Real Property Act which we have provided which I will occasion to refer to in a moment. There is a supplementary appeal book with some additional materials and there is a corrected chronology which I think we have not handed up. We were concerned about some of the dates, I think, on the third page not being quite accurate. So if I can hand that up to the Court. We would invite the Court to have regard to that chronology rather than that which is at the back of our written submissions.
Can I just also clear the decks in one other respect. Your Honours will have seen that this case, over the course of its time, has raised a number of issues and before this Court there are a number of things that this case is not about. As your Honours know, there was a counter-claim for damages for breach of contract and for fraudulent misrepresentations. This case is not about that counter-claim. The trial judge held that Mr Ferguson had not proved any loss or damage in support of that counter-claim, and his Honour made no findings on the claims as to misrepresentation or conduct which was alleged to have been misleading and deceptive. His Honour held that there was no basis for any fiduciary duty and, therefore, no breach of any such alleged duty and, indeed, that the position is that that course of action was abandoned at trial, in any event. Now, those particular findings appear in the last two pages of the learned trial judge’s reasons for judgment which is in appeal book 4, can I take your Honours very quickly to it. Page 891 of appeal book 4, where his Honour at line 35 turned to the consideration of the amended counter-claim, and your Honours will there see the first of three times in that page and the next page in which his Honour said, in effect, no loss has been established. The first of those at the bottom of page 891 and on the next page, again, at line 3 or 4, the defendant has failed to establish any head of damage, and again at line 15. At line 11, his Honour said:
not made any findings on the claims for misleading and deceptive representation or conduct.
For the reason that his Honour had held, as he put it:
the defendant is entitled to an order under section 69 placitum 1 of the Real Property Act.
Could I just say, your Honours, before I move to that, that the dismissal of the counter-claim was upheld in the Full Court, the Supreme Court, and there is no cross-appeal, so that can be put aside. But what the case is about, is the apparent destruction of a security by an order made by his Honour in respect of which, for security, namely, the mortgage remains registered on the certificate of title, and the peculiarity that that, amongst other things, presents. We say that that probably does little more than put one on one’s inquiry as to how one got to that position, which is what this appeal is about.
Can I take your Honours to the order that his Honour made, which order was upheld by the Full Court. That is to be found at page 893 of appeal book 4.
GUMMOW J: It was order 4, was it not?
MR WELLS: Yes, your Honour.
GUMMOW J: But there does not seem to have been any consequential relief.
MR WELLS: There was none. His Honour dismissed the plaintiff’s claim for possession which is how this action, again, as a summary action for ejectment under the Real Property Act which was sent - - -
GUMMOW J: All that seems to have been sought was the declaration that the mortgage was void pursuant to the provisions of section 69 I.
MR WELLS: It seems to be, although - - -
GUMMOW J: But it now seems to be put on the basis, looking at the other side’s written submissions here, put on the basis that what was really happening was a claim that the mortgage was liable to be set aside for fraud of some sort, but without the attachment of any price for that relief being repayment.
MR WELLS: That appears to be the way the matter is now put on behalf of the respondents.
GUMMOW J: And it said that there is no need to attach any such relief, that it could be absolute.
MR WELLS: That is what is said, and that is what we stand to meet because it - - -
GUMMOW J: You rely on Mr Justice Matheson’s judgment to explain that the fraud arguments do not really run?
MR WELLS: We do, in every respect except one, your Honour. We would, with great respect to his Honour, adopt his Honour’s reasons except as to the very last step which was, with respect, curious, because his Honour - - -
KIRBY J: He held back from making orders, did he not? Is that what happened at the end of his reasons?
MR WELLS: His Honour took the view - - -
KIRBY J: There should be mediation.
MR WELLS: Well, that, I think, was because the learned trial judge had been sitting as an auxiliary judge of the Supreme Court and had ceased his term of duty, so there was a question for his Honour about how it could be sent back to the trial judge when the trial judge was no longer sitting as a member of the court, and that is why he urged mediation.
KIRBY J: But did he ever actually say that he thought the appeal should be upheld, the orders below set aside, and certain things done? I could not find that.
MR WELLS: No, what his Honour held, if I can take your Honour to the judgment ‑ ‑ ‑
KIRBY J: It is at pages 940 and 941.
MR WELLS: ‑ ‑ ‑was that he took the view that, as he said at line 24, he did not think that the respondent, Mr Ferguson, “succeeded in establishing fraudulent misrepresentation or fraud” and breach of fiduciary duty was abandoned.
The consequence of that, had he been in the majority, would have been to have set aside the orders below and to have made an order for possession which is the order we seek, giving effect to the security. His Honour, however, took a strange course at line 27 and suggested that all other claims of the respondent were open.
GAUDRON J: Well, do you agree with that?
MR WELLS: No, we do not, with great respect, agree with that at all. Indeed, it is curious because his Honour had already - - -
GAUDRON J: There having been no, you say, cross-appeals?
MR WELLS: That is correct, there is no cross-appeal. There was a cross-appeal to the Full Court, your Honour. There is not a cross-appeal to this Court.
GAUDRON J: No, but the cross-appeal - wouldn’t the cross-appeal to the Full Court raise those issues?
MR WELLS: They sought to. The difficulty is this, your Honour, that it was against a finding made by the learned trial judge that there had been no loss proved and that, therefore, the claim for damages which was the only claim - - -
GAUDRON J: But did not that finding, in part, depend on the decision that the mortgage was to be set aside. It may well be no loss proved if the mortgage is set aside and left at that. The situation may well be different if the mortgage is not set aside.
MR WELLS: Your Honour, the order that his Honour the trial judge made was to dismiss the claim and the counter-claim except in so far as he was proposing to make an order which declared that the mortgage no longer had the benefit of indefeasibility, I think is the fair summary of the order that we made.
Our respectful submission is that what his Honour held was that in so far as there was sought to be proved loss and damage, none was proved. Your Honour says to me, maybe that is so if one makes an order which in some way has the effect of nullifying the security. But our response with respect to that is that that does not identify any loss or damage.
GAUDRON J: But his Honour deals with it after he has indicated that the mortgage is to be set aside.
MR WELLS: No, with great respect, he does not ‑ ‑ ‑
GAUDRON J: Does he not?
MR WELLS: ‑ ‑ ‑go so far as to say the mortgage should be set aside.
GAUDRON J: Well, whatever he says with respect to it.
MR WELLS: Your Honour is speaking about the trial judge, I take it?
GAUDRON J: Yes. You see, there is not a lot of - there is no elaboration of reasoning at pages 891 and 892, under the heading of “The legal position of the defendant’s amended counter-claim”. I would have thought the obvious reason for coming to the conclusions there stated was that the mortgage was not going to be given effect to.
MR WELLS: Your Honour, with great respect, that assumes that the destiny of the effectiveness of the mortgage in some ways speaks about loss and damage or not. That is an assumption that we would, with great respect, challenge and what is more, it is not the process of reasoning by which the learned judge moved to it. Can I take your Honours back to the numbered findings that the learned trial judge made before he came to any conclusions at all about what was to happen to the security, whether it was to be upheld in his way of seeing it, or not. One sees at page 887, at finding No 18, in the middle paragraph which is about line 26, that one of the findings that his Honour makes is there were crops of potatoes planted:
There is no evidence that the defendant ever made a loss from his potato growing activities.
And further down, at line 30, his Honour makes the comment that, it is not clear from the evidence whether his cattle business made a loss or not, but that was not anything to do with the circumstances in which the loan was made, which was a loan to finance the potato growing business.
That is the nature of the loss that his Honour was addressing, and then on the basis of those findings, his Honour then turns to consider what further conclusions is he to draw from that which brings us to the passage on page 890 which appears to be the vital conclusion from the point of view of the learned trial judge, conclusions which were upheld by the majority in the Full Court starting at line 4:
I am satisfied.....and make a finding that the actions of the plaintiff’s Bank manager had the effect of initial fraud -
I shall not read the whole of that passage, but we could not overemphasise enough the critical nature of that passage, if the Court pleases and, in particular, as Mr Justice Matheson observed, the failure of the learned trial judge to identify just exactly what it was that was withheld because, at the end of the day, the nature of the fraud that his Honour identified appears to have been a withholding of what he calls, at line 16, very relevant material facts. The suggestion that the statement of position to which we will come, which was set to be forged, was operative and led to the making of the loan.
Now, having made those conclusions, his Honour at line 24 then asks:
What then are the consequences -
as his Honour puts it:
of denying the plaintiff its indefeasible title to the statutory charge?
His Honour apparently taking the view that a finding of fraud has an effect by virtue of a statute.
GUMMOW J: Yes, that was responding to the relief that was sought which was a declaration that the mortgage was void pursuant to the provisions of section 69 I, rather than is liable to be set aside because of fraud and section 69 I does not provide a bar of indefeasibility to that equitable claim.
MR WELLS: The relief that was sought, we say, was a misconceived request.
GUMMOW J: Yes, but it is now in this Court, it is put on what we might say is an understandable basis.
MR WELLS: Yes, that is right.
GUMMOW J: Namely, to set it aside, et cetera, and that is how it is brought here in opposition to it.
MR WELLS: Yes. That is how it is put now but, of course, one still has to understand what his Honour was about in order to follow the error that is revealed by his Honour’s reasoning. In effect, what his Honour has done is to say, I am making a declaration that in some way, by reason of the fraud, section 69 operates to render or to destroy the security by virtue of the section. It was against that background that his Honour then considered the contractual matters.
GUMMOW J: Well, he seems to have considered fraud at large, as it were, rather than fraud practised on the plaintiff by the defendant.
MR WELLS: Seems to have, seems to have taken that view. I would want to inevitably deal with that, if your Honour pleases. What I am tracking now, though, is the response to your Honour Justice Gaudron’s request, namely, is not the result of Justice Matheson’s view that, inevitably, there is now issues that arise on the counter-claim or elsewhere. My answer to that is that one has to ask the question, what are the types of losses that we are looking at here? The first thing I can say is that, losses by virtue of the potato venture, which is what the contract of loan was all about, be put aside because there was - - -
BRENNAN CJ: Perhaps, yes, if one says that there is nothing owing under the mortgage. But if money is owing under the mortgage and the interest was accruing on that, and that is taken into account in determining whether there is a profit or loss, what is the result then?
MR WELLS: Can I think through that again? Your Honour puts the proposition that, taking into account what is owed under the contract of loan.
BRENNAN CJ: Either what is owed under the contract of loan, or the additional amount that was borrowed which would accrue interest in order to undertake the potato venture. In other words, one does not really know from the finding at page 887, whether the question of profit or loss was calculated by taking into account the cost of capital.
MR WELLS: I think the answer that can be given to that, your Honour, is that there was, apart from what happened under the contract of loan itself, there was really no evidence that was brought forward that showed anything other than a profit. In other words, a profit on the whole venture including taking into account the obligations under the contract of loan itself. That can be seen when we go to the budgets which were the - - -
GAUDRON J: But that only looks at the initial crops, does it not? What happened in the end?
MR WELLS: Your Honour, what happened was this, that there were three crops in all, and the potato venture ceased to be profitable because the factory which took the supplies, depending on how one puts it, renegged oin the contract and would not accept the supply.
GAUDRON J: Yes.
MR WELLS: But that, with great respect, is not an event which bears upon the grant of the loan or - - -
GAUDRON J: I am not too sure about that, when it was a loan for a potato growing venture.
MR WELLS: In part, it was not only for that. It was also a loan to refinance other debts. But at all events, the potato venture, until an intervening event unrelated to the loan took place, the potato venture showed a profit and a profit in accordance with a budget which took account of the expenses of the loan, the expenses of the borrowings.
BRENNAN CJ: What you are seeking to do, as I understand it, is to have the orders made below set aside.
MR WELLS: Yes.
BRENNAN CJ: And to affirm the validity of the mortgage and to have the relief which you are entitled under it.
MR WELLS: That is right, your Honour.
BRENNAN CJ: The question might then arise as to whether there is anything on that hypothesis which requires consideration of the issues raised by the counter-claim.
MR WELLS: The question might arise, your Honour. You will understand that we would reject the submission - - -
BRENNAN CJ: Oh, you would reject the argument that anything should. But the question is whether, on that hypothesis if you obtained the relief that you were seeking on this appeal, whether that would, in fact, enliven for consideration and determination by a court some of the issues on the counter-claim.
MR WELLS: What we would want to put to this court is that there is evidence at the trial which would put an end to any such hypothesis, and we will put that to the Court and put it collected together.
BRENNAN CJ: Mr Wells, the Court thinks it would be advantaged if we dealt with the matter in this way. You are seeking to reinstate the mortgage and the relief that you are entitled under it. If you were to proceed with whatever has to be said on that score, your opponents could then deal with that subject matter and if, having dealt with that subject matter, they thought there was some issue arising on a counter-claim, they could raise it and you could deal with that question of the counter-claim in your reply. Is there any difficulty in your argument in proceeding in that fashion?
MR WELLS: No difficulty. My hesitation was at the absence of a cross‑appeal or an application for leave to cross appeal.
BRENNAN CJ: You can deal with that in your reply.
MR WELLS: If the Court pleases, I am happy to do that.
BRENNAN CJ: What additional material do you wish to place before us with respect to the question of the entitlement to relief upon the mortgage?
MR WELLS: When your Honour says additional material.
BRENNAN CJ: Additional to your written submissions.
MR WELLS: Your Honour, no written material, but it would be necessary, we respectfully submit, to make out our case, to start where we say the nature and extent of the error first is to be exposed. That is in the pleadings. For that purpose, could we invite the Court to take up book 4 and to turn in book 4 to the reasons for judgment of the trial judge. In those reasons, at page 842, your Honours will see that the learned trial judge helpfully set out some of the pleadings which is the reason why not all the pleadings are otherwise in the appeal book, as they have been set out to some extent here. Your Honours will see that at page 842, in the statement of claim, there is a short pleading sufficient to establish the existence of a security and default under the security - page 843, paragraph 8 - the notices of default and the intention to sell are not in the appeal books but we have provided them in the supplementary material. The claim was for possession under the mortgage. There was then a defence filed and the first of a number of defences. The first defence - - -
GUMMOW J: You have to get to the one that matters. Why do we have to sit here and go through this tortuous process of what the pleadings came to be? Why do we not just look at the one that mattered, the last one?
MR WELLS: Your Honour, the reason for that is because it is in the pleadings that, in our respectful submission, the learned trial judge went wrong. It was from the pleadings. It is tortuous, I agree.
GUMMOW J: In must have been more than the pleadings.
MR WELLS: But if your Honour would bear with me, there is a reason for doing this. Your Honours will see that there were a number of admissions made and they are also set out. The first defence, which we find is on page 844, that is the defence of 5 September 1994. That defence did a number of things - pages 844 and following, 845. It asserted that it was not, that is, that Mr Ferguson was not in breach of the contract, the defence asserted that, in fact, the plaintiff was in breach of the contract by, as it was put, freezing the defendant’s account capriciously. We identify that because this is the first stage at which it is apparent that all that had been pursued by the defendant, initially, is a claim on the contract and nothing more. That is, I want to enforce my contract; this is my contract; under it, I have been doing the right thing; you have not. No suggestion at this stage of rescission or anything rescission, in fact, never really a suggestion of rescission.
What one gets is paragraph 4 down the bottom of 845 in which the defendant denies that the plaintiff is entitled to or has any legal or statutory right to possession. It is a bare denial but that denial is the denial which, in subsequent pleadings, is expanded in order to take into account what it is said was found in the bank file. But it was simply a denial of the entitlement to possession. I might add that with that defence at about that time, came also an affidavit from the defendant in support, because it was at that stage a summary proceeding, and that affidavit was put to him in the course of the trial.
GUMMOW J: Are you saying that it was not open to your opponents to put a case for rescission of this mortgage?
MR WELLS: Yes, we are.
GUMMOW J: A more attractive position must be that if it were, it would properly have failed. Why do we have to get emerged in a pleading trap or whatever it is?
McHUGH J: I must say I cannot follow that. If you go to that final further amended defence, everything seems to stem on paragraph 4, they say that the mortgage is void. That point is hopelessly wrong, because as I understand it, it is abandoned. That is the end of the case, unless they have got a counter-claim against you, you must win. Is there anything more needs to be said in the case?
MR WELLS: With great respect, we would say, probably not. But, of course, we are here to expound that, your Honour. The short point that I am putting lengthily here, is that by the time they got to that last defence and counter-claim asserting voidness, they had already affirmed the contract, Mr Ferguson had already affirmed it. It was not open to him even to, however inexpertly in the pleading, raise the question of rescission. It was already affirmed and it was affirmed, because - your Honours will see at page 846 - and the learned judge records that on 25 November 1994 there was an amended defence and counter-claim filed. That was at a time after, by about a month, the defendant had taken inspection on discovery, and on that inspection had turned up documents which, ultimately, came forward in the trial as being the forged statement of position, the said to be altered cash flow budget, and the evaluation.
GUMMOW J: Yes, but they are internal documents, inside the bank, that is one of your points is it not?
MR WELLS: It is.
BRENNAN CJ: Having said that, what more do you need to say?
MR WELLS: Your Honour, we would have thought nothing more, but we are facing a judgment of the Full Court by a majority which says that, in all of that, there was disclosed a fraud which spoke against the validity of our security and that, of course, is the very point that - - -
BRENNAN CJ: Well, we understand that that was what was said.
MR WELLS: Your Honours will understand from our outline that we put our case on more than one basis because we say, first of all, it was not open to rescind because by the time there was an attempt to rescind the contract, whether properly or not, which is another ground of our appeal, the contract had already been affirmed. All that was left to the defendant then was to sue on the contract or to sue for damages for deceit. All of that has been disposed of by the counter-claim. So, if we are wrong about that, if we are wrong in saying it was affirmed, then we say there is only one other remedy that is available and that is rescission, and rescission on terms, on terms that require restitution, restitutio in integrum, which was also not undertaken here.
The difficulty that the case presents is to follow what the learned trial judge, in fact, has done.
McHUGH J: It is pretty easy to see what he has done. The question is whether it is right or wrong, at the moment - - -
KIRBY J: In law.
McHUGH J: In law.
MR WELLS: Indeed, your Honour is right, of course, in one sense but in order to expound this one has to, in good faith, look at what the learned trial judge has done and attempt to follow that according to what the legal principles are and we say it is not possible to follow it in that sense. We know, in the end, what his Honour has done, but the difficulty is understanding how he got there.
BRENNAN CJ: That might be a problem for your opponent.
McHUGH J: That is a problem for your opponent, I think.
BRENNAN CJ: We propose to sit until one o’clock, Mr Wells.
MR WELLS: If the Court pleases.
BRENNAN CJ: That is not an encouragement to you at all.
MR WELLS: I am obliged to the Court. Your Honours will find in the supplementary appeal book that we have put together, in a slightly more helpful way, the final pleading. It is behind tab 2. We have actually put together there the two final pleadings, the one that was brought in immediately after inspection in which there was no rescission pleaded or asserted, so the point of course being that when it appears that eventually a fraud is discovered according to the likes of the defendant, notwithstanding that, the pleading that next comes in is a pleading which seeks only to enforce the contract and nothing more, perhaps to get damages for deceit in the counter-claim but not to rescind either the contract of loan or the memorandum of mortgage.
If your Honours turn to the second of the two pleadings, which is the last of the pleadings, one finds that there has been added, and we have highlighted the additions - this is the pleading which was brought in in the middle of the trial over the objection of the plaintiff - there has been added to paragraph 4 the claim about the security being void pursuant to section 69, which we are happy to accept for present purposes is equivalent to a purported rescission which, we say, was ineffective. Particulars are given about that. Can we just identify these because I would propose next to take your Honours to the documents which were the subject of all the problem.
GUMMOW J: We have read all that. But the issue that is put against you in the written materials, which we were provided with to try and expedite things, the issue that is put against you is said to be on page 11, simply whether the respondent is entitled to rescission and, if so, upon what terms. As I understand it, you say, you have got good answers to both.
MR WELLS: Yes.
GUMMOW J: End of case, on your side.
MR WELLS: That is right, that is the end of our case. As a proposition, we say no rescission available but, if rescission, on terms.
GUMMOW J: Exactly.
MR WELLS: Exactly.
BRENNAN CJ: You are not going to strengthen that by repeating it.
MR WELLS: No, I understand that, your Honour. But my task, I think, is to offer such assistance from that point of view as I can and, your Honour, it may be that it is a short point. It may be that that is all that there is. But if it is put against me, for instance, that, well there was fraud and, in the circumstances, we were entitled to a rescission without terms, which appears to be what the Full Court has done which is why we are appealing, then we have a complaint about that which we want to air. I would understand that that is my task, to air that complaint.
BRENNAN CJ: You can do it in reply, if that is what is put against you.
MR WELLS: I am happy to do it in reply, your Honour. Can I, therefore, just raise one other thing with the Court because the last thing I want to do is to detain the Court. There is a finding or a conclusion, I should put, by the learned trial judge upheld in the Full Court, that there was fraud of a nature that entitled the trial judge to do what he did. I have put it in that general way because it is not clear that, in our respectful submission, the learned trial judge actually applied any correct principles in order to produce the result that he did. We dispute that. We say there was no fraud of any operative kind and we have developed that course here.
GUMMOW J: You say there was relevantly no fraudulent misrepresentation, that is what they had to show to get prescission.
MR WELLS: That is all that was pleaded.
GUMMOW J: But fraud enters into it sideways, in a sense, through section 69. But the use of the word fraud there is not at large. It is not generative of a course of action that otherwise did not exist in the absence of the Torrens system.
MR WELLS: Indeed. There are two things, first of all, that under that proviso which only is dealing with indefeasibility in circumstances where we are dealing with successes in title, and not as here, when we are talking about the original parties. It is only speaking of the defrauded party who has the benefit of that proviso and they are sent back to the position that they would have been at general law, had they not been under the Torrens system, so we then have to deal with the general law and that means one looks at what kind of fraud will provide a remedy of the general law.
BRENNAN CJ: And your submission is that it has to be fraud practised upon the registered proprietor and, in this case, there was no such fraud.
MR WELLS: That is our position.
BRENNAN CJ: That is your position.
MR WELLS: If the Court pleases, it was a position that was rejected not only apparently by the learned trial judge, who spoke of withholding relevant information as being the nature of the fraud, one compares that with the pleadings apart from anything else, but his Honour does not, in fact, identify what the basis for the fraud is in withholding that, and if the Court pleases, it is upheld by the Full Court as being a proper finding. If the Court pleases, I think the best way to deal with that, if the Court will bear with me, is to look at the documents.
McHUGH J: Can I just tell you this, which may help you, and I speak only for myself. Prima facie, the judgment of the trial judge and the judgment of the majority judgment, so far as I am concerned, is wrong. Now, Mr Janson may be able to persuade me that it can be supported, or he may have another argument which he does appear to have, and that is another matter that has to be dealt with. But for my part, you need not say anything further in your argument in-chief.
MR WELLS: If that is what your Honours have been hinting at me for the last 10 minutes - - -
GUMMOW J: More than hinting, Mr Wells.
MR WELLS: It is not on a matter that I would wish to assume, if the Court pleases, and if that invitation - - -
BRENNAN CJ: No, we appreciate that, Mr Wells, but the point is that the issues that you have to raise are very simple ones; that there is no fraud of a relevant kind, that there was no ground there for rescission, and that there
was, in fact, no rescission in any event and therefore you are entitled to your relief.
MR WELLS: Indeed.
BRENNAN CJ: There has been no offer, even if there were a rescission, of restitutio.
MR WELLS: Correct.
BRENNAN CJ: Well, that is really all that you need to show, I should have thought.
MR WELLS: If the Court’s view is that it is not necessary, and it does not wish to look at the documents, then, of course, I will not go into - - -
McHUGH J: Your opponent may be able to present a powerful case against what appears, prima facie, at least to me reading the material, to be the result and he apparently has another independent case, then you will get an opportunity in reply to deal with it.
MR WELLS: I am happy to deal with it that way, if the Court pleases.
BRENNAN CJ: I think you have understood the situation, Mr Wells. Now, Mr Janson, you can see the problems.
MR JANSON: Yes, your Honour.
McHUGH J: Can I just get this plain before you start. Mr Janson, do you support the reasoning in the majority judgments or in the trial judge or do I gather from your written submission that you have got an independent argument?
MR JANSON: Your Honour, I certainly support the effect of the orders.
McHUGH J: I understand that.
MR JANSON: I concede that the arguments to support the orders are somewhat thin but, at the end of the day, your Honour, I believe that there is law that supports the finding of the trial judge and findings of the Full Court on appeal. The difficulty for my client is that the arguments were not articulated as effectively as they could well have been.
As my respectful submission says, your Honours, that at the end of the day, the conduct of the officers of the bank or the appellant were of such a magnitude that it may well have suggested itself that the respondent, in some sense, deserved the sort of orders that were at the end of the day made, and it is in my submission that those orders, by and large, reflect what is an equitable outcome for Mr Ferguson. Mr Ferguson was, to a large extent - and I understand from the Court’s remarks so far today that there may not be a great deal of sympathy with him - but Mr Ferguson, in my submission, was by and large induced into coming into the arrangement with the bank in the exact nature of the terms of that arrangement. Mr Ferguson placed a great deal of reliance on the representations that were made to him by the respective bank managers.
McHUGH J: Can I just stop you there, because that is what I want to understand the way you are seeking to put your case. What I want you to do is to assist me by taking us to the findings, and the pleadings, and how the case is framed. Because my problem reading the trial judge’s reasons against the background of the pleadings, and the Full Court’s judgment against the background of the pleadings, it just does not make, with great respect, any legal sense to me.
MR JANSON: Well, your Honour, I perhaps suggest that the issue of Mr Ferguson on becoming aware of what is alleged to be the frauds and the conduct, in particular the forgery of his name to one of the documents, that the - - -
McHUGH J: Mr Janson, that does not help. First of all, we have got to get a legal framework. What is the cause of action, what is it - do you rely on section 69 I, because I understood from your written submissions you do not. You do not contend that section 69 I makes the mortgage void. Am I right in understanding that?
MR JANSON: I do not think that is correct, your Honour, and if that is, in fact, actually the suggestion in the outline of argument, then I would make a submission that, in fact, it needs to be amended. The point in relation to the fraud, your Honour, is that it does, in fact, result in a defeasible title and that the nature of - - -
GUMMOW J: No, what fraud? That is not what it says. That is not what section 69 says. Section 69 says, that you:
shall have all rights and remedies that you would have had if the land were not under the provisions of this Act.
What are the rights and remedies you say you would have had, if the land were not under the provisions of the Act? Having established that, you then come to section 69 which removes what would otherwise be the bar if you can describe your rights as a case of fraud. You have to come first and start with the rights and remedies you would have had if the land were not under the provision of the Torrens system. Is that not what it says on its face?
MR JANSON: But this is, in fact, actually land that is subject to the Torrens system, and in that situation then, as Mr Ferguson has entered into the facility and the arrangement with the bank on the representations and misrepresentations, together with the forgery of the bank officer’s signature ‑ ‑ ‑
GUMMOW J: You say, entered on, now what does that mean?
MR JANSON: Sorry, your Honour.
GUMMOW J: Entered into a reliance upon?
MR JANSON: There was a reliance upon.
GUMMOW J: Upon what, a document you did not know about?
MR JANSON: The difficulty with this particular case, your Honour, is that as I see it, we have a situation of Mr Ferguson, by and large, relying on what are procedural requirements to be satisfied by officers of the bank which he is not privy or party to necessarily, but which he understands are being complied with in a bona fide, honest and forthright manner, but which he states, and I believe is confirmed by the trial judge, was not in fact the case. So, that while Mr Ferguson was unaware of the substance of these documents, and on its face it appears that that being the case he cannot have been aware of any fraudulent misrepresentation, the misrepresentation goes to the extension of a facility to Mr Ferguson, it is perpetrated by the bank officers and, therefore, the appellant itself cannot be exonerated.
BRENNAN CJ: Just pause there. The misrepresentation consisted of what - an extension of the facility?
MR JANSON: Your Honours, the misrepresentation that Mr Ferguson complains about comprises the view that the potato venture was to be a viable one, would be a viable one, and in the event that it would not be viable on the cash flow statements that were provided to the bank by him, in the event that it was not evidenced that it was a viable concern, then the bank officers would, again, advise Mr Ferguson back and, effectively, then Mr Ferguson was under the mistaken apprehension up until the time that he signed the facility and, more importantly, up until the time of discovery, he was of the apprehension that the venture was deemed by the bank to be a viable one. That was not the case. The bank have, at all times, misled Mr Ferguson in such a material fashion as to create a situation which is effectively compounded with the fraud or the forgery of his signature - - -
BRENNAN CJ: Just a moment, before you get to the terms to apply to it, let us just get to the representation. The representation is a representation by the bank to Mr Ferguson that the potato venture, if he entered into it, would be viable. Is that right?
MR JANSON: Indeed, your Honour.
BRENNAN CJ: Is that said to be a false representation?
MR JANSON: By the Bank’s officers failing to advise Mr Ferguson that the venture, on their own estimates, looked as though it would not be successful; by that failing, that is a misrepresentation.
BRENNAN CJ: So that in other words, they represented their opinion to be that which their opinion was not?
MR JANSON: Indeed, your Honour.
BRENNAN CJ: Now, where is the finding? Where is the allegation and where is the finding to support it?
MR JANSON: Your Honour, the trial judge made a number of statements in relation to first, the credibility of the parties, and took Mr Ferguson to be a - - -
BRENNAN CJ: Perhaps you can answer the question after lunch. How long do you expect your argument to take? It might be difficult for you to answer at this stage.
MR JANSON: It may be, your Honour.
BRENNAN CJ: In all events, we will adjourn until a quarter past 2, and we will not take any special leave matters before 3.30 this afternoon.
AT 1.03 PM THE MATTER WAS ADJOURNED
UNTIL LATER THE SAME DAY
UPON RESUMING AT 2.15 PM:
BRENNAN CJ: Yes, Mr Janson.
MR JANSON: In relation to the matter of the fraud, your Honours, we state that - which is trite law, nevertheless - but that common law by and large recognises a number of categories of bases for findings of fraud, being forgery, fraudulent misrepresentations and unconscionable deceptive dealings, as well as perhaps a fourth element, non-disclosure of materials or information, both prior to and after entering into an agreement at a time when such information ought to have been disclosed. We say that those four categories, if I can call them that, are by and large satisfied in the representations in the conduct of the Bank.
We say that, at first instance, Ferguson had no interest in changing activities from being a grazier to a potato farmer. He was approached by McMellon, the Bank officer or manager, at first instance on at least two occasions and advised by the Bank manager that the potato industry was very profitable. He further made representations to the effect that the industry was backed by the State government; that it was a sound and forthgoing business to be involved in and likely to be very, very profitable. The Bank manager concerned was presenting as very eager for Ferguson to change his accounts to the local branch, and effectively transfer his business from the Commonwealth Bank, where he was by and large conducting most of his financial affairs, to the State Bank at Penola.
At that stage, Ferguson had never indicated and, in fact, stated in evidence that he was not considering entering into potatoes, but that he was adopting a position of some curiosity in relation to the industry in so far as it seemed to be flourishing around him. On a number of occasions, after speaking to Ferguson, then without the authority of Ferguson, McMellon, the manager, fraudulently brought an application for finance in Ferguson’s name - forged the respondent’s signature to that document. That is exhibit D3 at appeal book 4, page 811.
That particular application contained details which Ferguson, in evidence, stated were substantially - or the details of which were substantially incorrect. McMellon also attached to that an elaborate narrative. Part of the narrative I bring your Honours’ attention to at page 782 of appeal book 4. On the second page of that narrative, the “Purpose of the Advance”:
Provide Working Capital until main cattle herd is sold.
That was never the intention of Ferguson - to go out of grazing and into potato production. That was a falsehood represented by the Bank manager, without the knowledge of Ferguson. While it is conceded that some of the information contained in the application of the Bank manager, McMellon, was provided by Ferguson through his own draft document, it is also the case that a significant proportion of the information contained in it was incorrect and never been seen before by Ferguson.
The Bank manager, McMellon, provided Ferguson with cash flow forms. He told him to prepare the forms and that they would be assessed and, if Ferguson ever followed through with the application, he had assured him that if the cash flows were not correct that the Bank would thereafter advise him. Ferguson was basically reliant upon these undertakings of the Bank officer concerned but, at the same time, at that point had still not made any commitment whatsoever to changing his activities from grazing to potato production. His views at the time, and for a period of time up until the intervention of Towner, the replacement Bank manager, were that he was of the view potato production was basically too expensive to become involved in.
The trial judge made observations in relation to the credibility of McMellon, though he was never called as a witness, and it was by and large held that he was a rogue and dishonest. The evidence of one Hutchinson, the second witness called by the appellant at trial, indicated that McMellon was involved in transferring moneys between accounts without the information of the account holders, and may also have been involved in frauds of various other species, none of which were investigated at any length at trial. But, nevertheless, the conclusion was that McMellon was grossly dishonest.
BRENNAN CJ: Now, given all of that, what does that lead to in terms of the relationship between the Bank and the appellant?
MR JANSON: Well, your Honour, we say that the Bank has engaged in an ongoing course of conduct involving fraudulent documents, misrepresentations of such substance that Ferguson was by and large misled into entering into an agreement which he would otherwise never have done, with the adverse consequences that have taken place since, that Mr Ferguson now, who stood in a position owning approximately $688,000 in assets prior to entering into the potato arrangements with the Bank, at 1994, when the matter by and large came to a head, was left simply with land; effectively a loss to Ferguson, if some of the assets that could have been included are not, in the order of either $160,000, or even as much as $400,000. Ferguson has clearly lost.
BRENNAN CJ: Before you get on to the question of damages, let us come back to the question of misrepresentation.
MR JANSON: Yes, your Honour.
BRENNAN CJ: Now, what findings do you have of any misrepresentation which induced your client to enter into the transaction?
MR JANSON: The findings of the trial judge page 890, appeal book 4, where he states that he was:
satisfied on the facts of his case and make a finding that the actions of the plaintiff’s Bank Manger had the effect of initial fraud in the first application made by Mr McMellon -
And he states that the defendant was effectively:
defrauded by his execution of the Memorandum of Mortgage and acceptance the facility offer ‑ ‑ ‑
BRENNAN CJ: Where is the finding of any representation which induced your client to enter into the transaction?
MR JANSON: Your Honour, the learned trial judge made reference to what he calls “very relevant material facts”. It is my submission that those “very relevant material facts” that go to constituting the finding of fraud are, first, that McMellon did forge Ferguson’s signature to a loan application without Ferguson’s ‑ ‑ ‑
BRENNAN CJ: How does that affect Mr Ferguson?
MR JANSON: Mr Ferguson is now caught in a situation where he has before the Bank a loan application, without his knowledge.
BRENNAN CJ: As a result of this document, the Bank offered a facility, is that right?
MR JANSON: Indeed, your Honour.
BRENNAN CJ: And Mr Ferguson chose to accept it.
MR JANSON: On certain understandings in relation to undertakings made by the various officers concerned; Towner at second instance, and McMellon at first.
BRENNAN CJ: Where are those findings of undertakings made and representations made?
MR JANSON: At page 891, your Honour, the learned trial judge stated:
In my judgment the basis upon which the defendant executed the mortgage and accepted the facility offer was not the same basis as that upon which the Bank agreed to make the advances once the defendant had executed the mortgage -
Effectively, it is my submission that the learned trial judge is saying to the court, in words to that effect, that ‑ ‑ ‑
McHUGH J: He is not certainly saying it in terms, and I do not see how you could say he is saying it in effect.
MR JANSON: It is my submission, your Honour, what we are confronting here in the judgment of his Honour Justice Legoe is subject to various ways of being looked at but, at the end of the day, the ineluctable conclusion to be drawn from it is that the Bank has acted fraudulently in respect of the way it has dealt with Mr Ferguson, and the manner of the fraud comprises a course of conduct, as well as the preparation of fraudulent forged documents.
McHUGH J: But what is the misrepresentation made to your client? Now, you have been asked that several times, and you have failed to identify it. There is not a hint in any of the judgments in the court below as to what was the fraudulent misrepresentation made to your client upon which he acted. The only fraud in this case was a fraud on the Bank by one of its employees.
MR JANSON: Well, with greatest respect, your Honour, I must differ. I believe in the case of Krakowski, your Honour, it was held that:
A division of function among officers of the corporation responsible for different aspects of the one transaction did not relieve the corporation from responsibility.
Effectively, in my submission, in that case the Court has found - if that particular finding can be applied to this set of facts, it has found that McMellon and Towner are acting as agents of the Bank, they cannot be distinguished from the Bank and, in that respect, anything that they do which is of a deceptive, fraudulent, or misleading nature must have ramifications back onto the Bank - adverse effects back on the Bank.
BRENNAN CJ: We have got them then as agents of the Bank, officers of the Bank, is that right?
MR JANSON: Yes, your Honour.
BRENNAN CJ: And they did something in relation to their head office which was fraudulent, is that right?
MR JANSON: In relation to our client as well, your Honour.
BRENNAN CJ: Well, how, in relation to your client?
MR JANSON: In failing to disclose, your Honour, that the cash flows that they had prepared, which were used as the basis of making the advance of the moneys to Mr Ferguson, did not disclose that the enterprise was viable. At the end of the day ‑ ‑ ‑
BRENNAN CJ: But what does that matter? I mean, as between the Bank and your client, your client accepted an offer from the Bank for the provision of a facility secured by a mortgage. That is all he knew. Is that not so?
MR JANSON: He was a fool, your Honour. Indeed, that is true. He was left completely in the dark.
McHUGH J: Well, he was not a fool at all. He thought he had a good commercial deal, and he had a lot of experience as a farmer. He had taken 70 acres. He was going to plant 70 acres there and, apparently, the potato farming was profitable. What is more, the Commonwealth Bank debt of his was paid out, he had got money from the Bank over a period of time, and now you want to say that you do not have to pay a penny of it back; you keep the land, you have had the benefit of the money, and you do not want to pay it back.
MR JANSON: Well, we say, your Honour, in response to that, that, no, he has acted to his own detriment at the end of the day. He stands in a position far worse off than what he was at the outset.
McHUGH J: It does not matter whether he has acted to his own detriment or not; the question is, has the Bank committed some fraud on him? And you have so far failed to identify what misrepresentation the Bank has made to him that he acted on to his detriment.
MR JANSON: Very well, your Honour, I will address that as sharply as I can. The misrepresentation, the fraud, lies in the fact that the Bank undertook to Mr Ferguson to vouchsafe the enterprise that he was going to set up with potatoes - the Bank would vouchsafe that enterprise and only - I withdraw that. In the event that the enterprise was, on the Bank’s own assessment, a viable one, then they would proceed with the loan.
McHUGH J: Well, there is no finding of fact to that extent. I am not even sure that the summary of the evidence, in fact, in Justice Legoe’s judgment would lead to that conclusion; but certainly none of the 20 findings of fact that his Honour made support that. There is not a word in those findings of fact about it.
MR JANSON: With the greatest respect to your Honour, I also submit that much of the judgment of his Honour, in fact, actually goes to the matters that are presently concerning the Court in relation to the fraud. His Honour found, in relation to the credibility of Mr Ferguson, for example, that more or less all that Mr Ferguson had to offer to the Court by way of evidence his Honour, Justice Legoe, was prepared to accept. He found, after extensive, lengthy questioning, that Mr Ferguson presented as a person who was ‑ ‑ ‑
BRENNAN CJ: Accepting that, where is the evidence, if you like to put it that way, that was accepted of a representation made by the Bank upon which Mr Ferguson acted in entering into the transaction? I mean, what happened in the courts below is that they were mesmerised by the fact that the Bank officers, for the purposes of making the representation between the Penola branch and head office, produced a forged document, is that not right?
MR JANSON: In part, your Honour, yes.
BRENNAN CJ: Now, what else? What else, in terms of the Bank’s representation to Mr Ferguson, upon which Mr Ferguson acted when he decided to take up the offer? I mean, point to something; either the evidence which was accepted, or to the finding of fact.
McHUGH J: Far from it being a fraud on your client, it has all the appearance of being done for his benefit, even if, on his evidence, which was accepted, he was totally unaware of what these men were doing. I mean, if one had to guess, the probability was that it was in their interest to lend money out to people and they wanted loans to be effectuated. But in terms of any detriment to your client, well, at the moment you have not been able to point to anything - that is, as a result of a misrepresentation by the Bank to your client - which induced him to enter this contract.
MR JANSON: What I rely on, your Honour, I rely on the evidence of Mr Ferguson at trial, where he indicated on a number of occasions that undertakings were given to him by officers of the Bank that they would advise him if the proposal that he was having assessed by the Bank at that stage was not viable. It never happened. The fact that the Bank ‑ ‑ ‑
BRENNAN CJ: Now, take that - take it easily, bit by bit. He relied upon the fact that the Bank said that they would do something, is that right?
MR JANSON: Indeed, your Honour.
BRENNAN CJ: So, that is a promise, is it not? It is not a representation, is it?
MR JANSON: Yes, your Honour.
BRENNAN CJ: It is a promise, right. Now, there is no question of breach of promise, is there?
MR JANSON: No, your Honour.
BRENNAN CJ: It is a question of a representation, upon which he acted. Have you got any evidence of a representation?
MR JANSON: Only the evidence of Mr Ferguson at trial, your Honour.
BRENNAN CJ: Can you point to anything there which indicates a representation by the Bank on which he acted?
MR JANSON: Yes, your Honour. I say that ‑ ‑ ‑
BRENNAN CJ: What page are we looking at?
MR JANSON: Appeal book 1, your Honour, at page 117, at or around line 8, the question was put to Mr Ferguson, in relation to the Bank manager, McMellon:
Q. Did he say anything about the cash flows and what he intended to do with them.
And Mr Ferguson answered:
A. He said that the figures that he had on those budgets, that he would assess them and if they didn’t come up to what he thought would be a profitable cash flow he would get back to me and inform me that the figures wouldn’t suit the operation.
McHUGH J: That is not a representation, that is a promise. What evidence is there there is a breach of that promise anyway; that he did not think it was a profitable cash flow?
MR JANSON: Well, the point is that the Bank manager never, in fact, satisfied that promise.
McHUGH J: How do we know it? How do we know he did not? He said that he would come back if it did not come up to what he thought would be a profitable cash flow. There is no evidence that he did not think it was a profitable cash flow.
MR JANSON: The point is, your Honour, that ‑ ‑ ‑
McHUGH J: I mean, this is most unfortunate, from the defendant’s point of view in this particular case but, as the Chief Justice has put to you, the courts below seem to have been mesmerised by the fact that you have got a crooked employee in the Bank who set out to forge somebody’s signature. It is to the detriment of the Bank, rather than your client. And now everybody jumps on board and tries to seize on that conduct as, in some way, entitling you to rescind this contract. But unless you can show us some representation on the part of the Bank that was fraudulent, which was acted on by your client and induced him to enter this contract, it is difficult to see a legal basis for the defendant’s case, Mr Janson.
MR JANSON: Your Honour, with respect, I again ‑ ‑ ‑
KIRBY J: You cannot make it better than you have endeavoured to do. You say that your client relied on the Bank to provide correct information to him concerning the cash flow position and, when it did not, then he was, as it were, sucked into a transaction against which he ought to have been advised, and which he assumed he would be advised, but was not.
MR JANSON: That is correct, your Honour. The difficulty that we have here, your Honour, is that we have two consecutive Bank managers acting in ways which are questionable - seriously questionable; in the case of Towner, providing a valuation of land at more or less double the real value of the land, McMellon holding out special knowledge and the like. These two managers, as I understand from the transcript of evidence, had virtually no direct dealings with each other. McMellon was moved out of the Bank and Towner replaced him shortly thereafter, yet both of these managers are, in fact, engaging in a course of conduct which is highly questionable and injurious to my client.
It is, as his Honour Justice Millhouse seemed to indicate, perhaps a legacy of the madness of the 80s which caused lending institutions to basically loan moneys to whomsoever walked in the door. But at the end of it, it is not an unreasonable conclusion to draw that there was, in fact, some form of policy operating in the Bank to draw in clients where they possibly could ‑ ‑ ‑
GUMMOW J: There is no evidence of that. There is certainly no finding of such a policy.
MR JANSON: I concede that, your Honour. No, there is no hard evidence on that, no.
GUMMOW J: No.
BRENNAN CJ: The problem really is that Mr Ferguson’s exercise as a whole failed; whether because of the failure of the potatoes, or because of the failure of a cattle business does not clearly appear. He failed at a time when he had this large mortgage around his neck and, then, there is the problem about the discovery of the forged document. But from the point of view of the Court, the difficulty seems to be this, that he was offered the facility, and he took the facility. He may have been foolish in taking the facility, but he took it and, having taken it, unless there is some fraud which induced him to take it, then he is bound by it.
MR JANSON: Your Honour, I again say that fraud can take any one of a number of forms, and if there is a fraudulent misrepresentation made to Mr Ferguson ‑ ‑ ‑
BRENNAN CJ: But there is no relevant kind of fraud in this case but a fraud by way of representation inducing him to act to his detriment.
MR JANSON: Well, that essentially - that summarises Mr Ferguson’s position, at the end of the day.
BRENNAN CJ: But you have not been able to point to the representation that he acted on to his detriment.
MR JANSON: Well, your Honour, the unconscionable nature of the representations of the Bank alone, I would respectfully submit, can ‑ ‑ ‑
BRENNAN CJ: But what representations? You are speaking about the document, are you not? If you have to leave the document aside because it is an internal Bank document - if you have to do that - is there anything that you have got left?
MR JANSON: Yes, your Honour. I submit that it would be an unconscionable outcome for Mr Ferguson to be left with nought in the event that the Bank were able to enforce it’s mortgage in a circumstance where Mr Ferguson has already suffered considerable financial loss..
BRENNAN CJ: What, is this a plea to the mercy of the Court, as it were?
MR JANSON: Your Honour, it is my submission that it is essentially unconscionable on the part of the Bank to continue to assert that it has an entitlement. I mean, it is essentially relying, to some extent, on its own illegalities. The forgery of the signature on the loan application, which the trial judge found comprised the first domino, if we can call it that ‑ ‑ ‑
McHUGH J: But in any event, it is only a facility; it does not create any legal obligations. Until your client started to draw down money, no legal obligations were created and, as he did, and took effect of a facility that was there, the mortgage secured those loans. But at the end of the day, your client has had the benefit of very considerable sums of money, and they were charged on his property. Now, what is unconscionable in the Bank saying, “We want to be paid what we are owed, and which you had the benefit of. You took our money. You have had the benefit of it. We want it back and, if you cannot pay us back, then we want to sell your property, which is secured on that.” Now, what is unconscionable about that?
MR JANSON: Isolated from the other circumstances of the representations - the dishonesty of the officers of the Bank - there is nothing unconscionable about that. That represents a conventional transaction between a client and a Bank, or a financial institution. I see no difficulties with that, and I daresay that Mr Ferguson would not have had a difficulty with that, except for the unconscionable conduct; the misrepresentations and the forgery. And at the end it is my submission, your Honour, that the Bank cannot be exonerated; that it is left in a position where perhaps it is, in my submission, essentially estopped from arguing that it is entitled to recover because of those forms of conduct. Again, I refer back to that instance in the case of Krakowski, where the Court found that the officers cannot be distinguished from the institution.
BRENNAN CJ: Mr Walsh was quite right, was he not? He did pretty well.
MR WELLS: Yes, indeed.
BRENNAN CJ: And that, indeed, from his point of view was, to use his Honour’s words, “the most sensible course” from the practical point of view.
MR WELLS: One cannot argue with that, your Honour.
GAUDRON J: But once the $500,000 is on your side of the ledger, different considerations apply.
MR WELLS: But we ask, why? The fact of the matter is that the defendant made a choice before the Full Court as to how he wanted that aspect to be dealt with. I am reminded, he was confronted fairly and squarely with that issue: “How do you want to deal with this?” That was his final response.
BRENNAN CJ: His preferred response.
MR WELLS: That is as the learned judge puts it here, your Honour, but offered those two choices that is what he said. In the face of that, in our respectful submission, it makes it even harder, we would submit, for the defendant now to say, “Actually, I want it all.” Those are our submissions, if the Court pleases.
BRENNAN CJ: Thank you. Mr Janson, the question is whether you wish to seek special leave to cross-appeal on the ground that I have outlined to Mr Wells.
MR JANSON: Like I say, I do, your Honour.
BRENNAN CJ: Yes.
MR JANSON: That would be in relation to having further consideration given to the fact that the cross-claim was never properly canvassed ‑ ‑ ‑
GUMMOW J: The cross-appeal.
MR JANSON: The cross-claim.
GAUDRON J: The cross-appeal to the Full Court is what you are talking about. This is an appeal from the decision of the Full Court. What was there an issue was an appeal which related back to your cross-action or cross-claim.
MR JANSON: Yes, I stand corrected, your Honour.
GAUDRON J: When would you - you would have to file a document ‑ ‑ ‑
BRENNAN CJ: Yes. Mr Janson, you would need to get hold of a copy of the transcript of the last part of today’s proceedings and formulate your notice of cross-appeal if you seek special leave to cross-appeal. The Court,
for its part, would reserve its decision on that application. Is that all you wish to say?
MR JANSON: Yes, your Honour. I was just wondering whether the Court had some indication of the time frame in which to lodge that.
BRENNAN CJ: You would have to do that within the space of seven days, I should think. If that application was successful, have you said all that you wish to say, Mr Wells?
MR WELLS: Your Honour, I was going to ask the Court if there could be reserved to us an opportunity to make any further responses to that, in a written form, being an application for leave to cross-appeal. At the moment, not seeing exactly what the nature of that is, although your Honour would be quite right in saying that to an extent we can guess, we would still ask for ‑ ‑ ‑
BRENNAN CJ: The assumption is that the special leave would be sought to cross-appeal on a ground that I outlined to you.
MR WELLS: Yes, we would want, and ask the Court for the opportunity to make any further responses to that, having seen the document, in writing.
GAUDRON J: Your responses will be on the hypothesis that the Court is considering the merits of the issue and not simply the application for special leave to cross-appeal.
MR WELLS: Quite so. Yes, I would deal with it on that basis.
BRENNAN CJ: Yes, and Mr Janson would then have to have an opportunity to reply. How long would you want after the filing of the notice of cross-appeal?
MR WELLS: Fourteen days. Would that be appropriate?
BRENNAN CJ: Yes, 14 days. And you would have another 14 days after that, Mr Janson, to reply.
MR JANSON: Indeed, your Honour, thank you.
BRENNAN CJ: So that the order of the Court at this time will be that Mr Janson shall be at liberty to file a note seeking special leave to cross‑appeal on a ground already indicated, in seven days of today’s date, and to serve a copy of that notice on the appellant.
The appellant shall have 14 days beyond the date of the service for the purpose of making any further submissions on the merits of the cross-appeal.
The written submissions, if any, filed by the appellant to be served on the respondent and the respondent then to have a further 14 days in which to reply to those submissions.
Otherwise, the Court will consider its decision in this matter.
AT 4.26 PM THE MATTER WAS ADJOURNED
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