Cheng v Lam [No 2]

[2021] WASCA 196

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT  :   THE COURT OF APPEAL (WA)

CITATION:   CHENG -v- LAM [No 2] [2021] WASCA 196

CORAM:   MURPHY JA

BEECH JA

VAUGHAN JA

HEARD:   1 NOVEMBER 2021

DELIVERED          :   25 NOVEMBER 2021

FILE NO/S:   CACV 63 of 2020

BETWEEN:   MARY YUEN SHAN CHENG

Appellant

AND

FRANCIS HUNG LAM

First Respondent

ANDREA MAN YEE CHENG

Second Respondent

CHAN THANH LAM

Third Respondent

DAVID CUONG CHAN LAM

Fourth Respondent

ON APPEAL FROM:

Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA

Coram:   TOTTLE J

Citation: CHENG -v- LAM [No 4] [2020] WASC 175

File Number            :   CIV 1706 of 2015

Catchwords:

Practice and procedure - Taking of account - Dissolution of informal partnership between parties - Taking of account in accordance with orders of judge - Where judge ordered account to be taken before a registrar - Adoption by judge of registrar's report - Principles - Whether primary judge erred in adopting registrar's report - Turns on own facts

Legislation:

Nil

Result:

Leave to amend ground 1 granted
Leave to appeal refused
Appeal dismissed

Category:    B

Representation:

Counsel:

Appellant	:	M A Tedeschi
First Respondent	:	P G McGowan
Second Respondent	:	P G McGowan
Third Respondent	:	No appearance
Fourth Respondent	:	No appearance

Solicitors:

Appellant	:	GA Lacerenza & Associates
First Respondent	:	Johnstone Crouse Lawyers
Second Respondent	:	Johnstone Crouse Lawyers
Third Respondent	:	No appearance
Fourth Respondent	:	No appearance

Case(s) referred to in decision(s):

Agricultural Land Management Ltd v Jackson [No 2] [2014] WASC 102; (2014) 48 WAR 1

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25

Cheng v Lam [No 2] [2018] WASC 199

Cheng v Lam [No 3] [2020] WASC 45

Cheng v Lam [No 4] [2020] WASC 175

Fox v Percy [2003] HCA 22; (2003) 214 CLR 118

Glazier Holdings Pty Ltd v Australian Men's Health Pty Ltd [No 2] [2001] NSWSC 6

Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66

Mighty River International Ltd v Mineral Resources Ltd [2020] WASCA 44

Park Trent Properties Group Pty Ltd v Australian Securities and Investments Commission [2016] NSWCA 298; (2016) 116 ACSR 473

Re Ellis; Ellis v Ellis [2015] WASC 77; (2015) 14 ASTLR 475

Rowe v National Australia Bank Limited [2019] WASCA 140; (2019) 56 WAR 1

Starr v Minister for Pensions [1946] 1 KB 345

Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549

Tame v New South Wales [2002] HCA 35; (2002) 211 CLR 317

Wenco Industrial Pty Ltd v WW Industries Pty Ltd [2009] VSCA 191; (2009) 25 VR 119

Wilden Pty Ltd v Green [No 6] [2018] WASCA 198

JUDGMENT OF THE COURT:

Introduction

1. It is not now in dispute that the appellant and the respondents, or some of them in varying combinations, were partners in eight land development partnerships.  The partners were all members of the same family.

2. Following a breakdown in relations between the partners, the appellant brought proceedings seeking an order that the other partners account to her in relation to the partnership projects.  The other partners denied there was an agreement on the terms claimed by the appellant, but pleaded that there were eight developments for which an account should be taken on the basis of separate partnership agreements in relation to each project.  In the course of the primary proceedings, the appellant accepted that there should be an order for an account in relation to all eight properties.

3. On 28 June 2018, Chaney J made orders for an account in relation to the eight properties, specifying the basis on which the account should be taken.[1] 

   [1] Cheng v Lam [No 2] [2018] WASC 199 (reasons of Chaney J).

4. Pursuant to the orders of Chaney J, a registrar conducted an account, the hearing extending over nine days.  The registrar published her report on 19 February 2020.[2] 

   [2] Cheng v Lam [No 3] [2020] WASC 45 (registrar's report).

5. The primary proceedings then came before the primary judge on the defendants' application that the court adopt the registrar's report.  The primary judge ordered that, with one exception, the registrar's report be adopted.[3]

   [3] Cheng v Lam [No 4] [2020] WASC 175 (primary reasons).

6. The appellant now appeals against the primary judge's decision to adopt the registrar's report, advancing 12 grounds of appeal.

7. Although not recognised by the appellant, she requires leave to appeal because the judge's decision to adopt the registrar's report is interlocutory.

8. For the reasons that follow, leave to appeal should be refused because none of the grounds of appeal has sufficient merit to justify a grant of leave to appeal.  It has not been established that the primary judge's decision was wrong or attended by sufficient doubt to warrant its being reconsidered.  This is particularly so where the primary judge was exercising a judicial discretion and it was incumbent on the appellant to demonstrate that his Honour's exercise of the discretion miscarried in accordance with the House v The King standard of appellate review.

The parties

1. The parties to this appeal are all related and, as has occurred in the proceedings to date, it is convenient to refer to them by the names that they apparently use and by which they were referred to at trial. 

2. The appellant, Mary Yuen Shan Cheng (Mary), was, but no longer is, married to the third respondent, Chan Thanh Lam (Chan), who was the second defendant by counterclaim.  The first respondent, Francis Hung Lam (Frank), who was the first defendant, is married to the second respondent, Andrea Man Yee Cheng (Andrea), who was the second defendant.  Frank and Chan are brothers.  The fourth respondent, David Cuong Chan Lam (David), who was the third defendant by counterclaim, is the brother of Frank and Chan.  The fourth defendant by counterclaim is not a party to the appeal[4] and is the uncle of Chan, Frank and David.

   [4] See WAB 5.

3. The protagonists below were, and in these proceedings are, Mary, on one side, and Frank and Andrea, on the other side.  Consequently, at times we will refer to Mary as the plaintiff or as the appellant and Frank and Andrea as the defendants or as the respondents.

The primary proceedings:  the parties' contentions at the trial before Chaney J

1. At trial, Mary contended that a series of property developments had been undertaken pursuant to an oral partnership agreement made in about September 2001.  She sought a declaration as to the existence of a partnership on the terms she specified, and for an order that the defendants account to her in relation to the partnership projects.  Initially, she claimed that four projects were undertaken pursuant to the oral partnership agreement, but, in the course of the trial, accepted that there should be an order for an account in relation to all eight properties.[5]

   [5] Reasons of Chaney J [6], [8].

2. The respondents' case at trial was to deny the agreement pleaded by Mary, and to plead that there were eight development projects for which an account should be taken on the basis of separate partnership agreements in relation to each project.  The separate agreements were said to be substantially on the same basic terms other than as to the identity of the participants in each project.  The respondents counterclaimed declarations as to the terms of the agreements and for an order for an account to be taken on each of the eight projects.  Although they initially sought an order for an account in relation to nine properties, the claim in relation to one was abandoned.[6] 

   [6] Reasons of Chaney J [7].

3. It was common ground before Chaney J that the statement of agreed facts relating to the various property transactions would bind the parties in the account.[7]

   [7] Reasons of Chaney J [17].

4. Both parties sought a remedy of an order for an account; what had to be determined was the basis of the account.  Chaney J identified the issues for determination to be, in substance, as follows:[8]

   (1)the terms of the agreement between the parties in respect of the various developments;

   (2)the meaning of 'capital contribution';

   (3)how the costs of development are to be assessed and brought to account;

   (4)how a particular payment to Frank and Andrea from the sale of a particular property was to be treated for accounting purposes; and

   (5)how properties which remain unsold should be treated for the purpose of the account as between the parties.

   [8] Reasons of Chaney J [13] ‑ [18].

5. His Honour's resolution of those issues is reflected in the terms of (a) ‑ (f) of order 4 of his orders set out at [25] below.

The decision of Chaney J

Nature and terms of agreements to develop properties

1. The threshold issue was whether the development projects were undertaken pursuant to an express oral agreement made in September 2001 on particular terms, as claimed by Mary, or undertaken pursuant to separate oral agreements for each development, on the terms claimed by the defendants.

2. The judge found that the partnership agreement was not on the terms pleaded by Mary.  Rather, his Honour found that from time to time, as investment opportunities were identified, the parties reached agreement to jointly undertake the purchase and development of the identified property, and that the particular parties and the interests to be held were determined in the context of each separate venture.[9]

   [9] Reasons of Chaney J [109].

3. His Honour concluded that the terms were largely as pleaded by the respondents, with the exception of the method of division of profit,[10] and were as follows.[11]  Any proceeds realised from the sale of the relevant property was to be applied, first, in payment of any borrowings used to purchase or develop the property; second, in payment of all costs and expenses incurred in the purchase and development of the property; and third, in repayment of any amounts paid by any of the participants towards the maintenance or development of the properties.  Any balance remaining was to be divided between the participants in the project in proportion to their interests registered against the title to the project property at the time of its purchase.

Whether an order for an account should be made

[10] The defendants gave evidence that profits were to be shared on the basis of 'contribution', where contribution means only funds advanced towards a project other than by way of joint borrowings.   Chaney J did not accept that evidence.

[11] Reasons of Chaney J [114].

1. It was not in issue between the parties that there should be an account in relation to the eight property developments and that the first defendant, Frank, should be called upon to account.  Chaney J stated that it was clear that there was an entitlement, of any party to whom a balance of funds is due, to an order in their favour for payment of that balance.  His Honour said as follows:[12]

   The ultimate balance of an account as between Mary and Chan on the one hand and Frank and Andrea on the other is likely to produce a balance in favour of Mary and Chan.  I am mindful, however, that Mary retains several properties in her name which will need to be brought to account, as will properties standing the names of other participants.  How that might affect the ultimate balance is presently unclear.  It is not necessary to finally determine whether the accounting will result in a sum being due to Mary and Chan from Frank and Andrea, because both parties seek an account and seek payment to them of any balance found due.  It is clear that there is an entitlement, of any party to whom a balance of funds is due, to an order in their favour for payment of that balance.  In practical terms, it is Frank who should provide that account, and I propose to so order.

Findings as to the basis of the account

[12] Reasons of Chaney J [117].

1. Justice Chaney made findings on the following three issues as to the basis of the account:

   (a)how the costs of development are to be assessed and brought to account;

   (b)how a payment to the first and second defendants from the sale of the Spencer Avenue property should be treated for accounting purposes; and

   (c)how properties which remain unsold should be treated for the purpose of the account as between the parties.

(a)     Bringing costs of development to account

1. With one exception, for each of the developments the participants entered into a lump sum building contact with Chemech Pty Ltd (Chemech), a company controlled by the first and second defendants.  Rejecting Mary's contention to the contrary, Chaney J found that, for the purpose of the accounts to be prepared, development costs should be assessed by reference to the relevant building contracts.[13]

(b)     Spencer Avenue property

[13] Reasons of Chaney J [130].

1. The first and second defendants' claim for an account in relation to the Spencer Avenue property, a ninth property, was ultimately not pursued.  The only issue was whether payment of a sum of $406,998 by Mary and Chan to Frank and Andrea was a contribution to later development projects or repayment of unpaid building costs and one‑third profit share for the Spencer Avenue project.  His Honour found that the payment should not be brought to account as a contribution by Mary and Chan and that the agreement in relation to the Spencer Avenue property had been completely performed.[14]

(c)     Treatment of unsold properties

[14] Reasons of Chaney J [126].

1. His Honour held that for the purpose of accounting, there should be no distinction drawn between the developed properties which were sold and those that had not yet been sold.  His Honour stated that the value of the unsold properties should be treated as, in effect, a receipt of value of those properties in accordance with the title ownership.[15]

   [15] Reasons of Chaney J [131].

The orders of Chaney J

1. The orders of Chaney J dated 28 June 2018 were as follows:

   1.A declaration that the partnerships in relation to the projects referred to in paragraph 2 is dissolved from the date of commencement of this action.

   2.An account be taken between the first and second defendants the plaintiff and the second defendant by counterclaim in relation to those parties' respective entitlements under partnership agreements relating to the purchase, development and sale of each of the following properties:

   (a)17 Darch Street, Yokine;

   (b)73 Main Street, Osborne Park;

   (c)111 Shakespeare Avenue, Yokine;

   (d)78 Edgecume (sic) Street, Como;

   (e)167 and 167A Lockhart Street, Como;

   (f)70 Edgecumbe Street, Como;

   (g)250 Ewen Street, Woodlands; and

   (h)82 and 84 Matlock Street, Mount Hawthorn.

   3.Such account to be taken before a registrar of this Honourable Court.

   4.The account is to be based on the following findings:

   (a)The accounts are to be prepared on the basis that each agreement giving rise to the interests of the parties to that agreement provided that the proceeds of the relevant development and sale of the property are to be applied first in payment of any mortgage or borrowings over the property, then in payment of all costs and expenses incurred in relation to the acquisition, development or sale of the property, and then repayment of any payments made a party to the agreement in discharge of such costs and expenses other than by use of the parties joint funds or borrowings with the balance to be divided in accordance with the interest of the parties as reflected on the title to the relevant property at the time of its purchase by the parties.

   (b)Entitlements and liabilities of either the Plaintiff or the Second Defendant by Counterclaim, whether separate or joint, are to be treated in all cases as joint entitlements.

   (c)The interest of parties other than the Plaintiff, First Defendant, Second Defendant, and Second Defendant by Counterclaim in any of the projects referred to are to be taken to have been settled upon completion of those projects so that there is no further liability to account in relation to those interests.

   (d)For the purpose of the account, costs of development are to be brought to account on the basis of the lump sum building contract prices for the development applicable in each case.  Any balance due in relation to a building contract which remains unpaid is to be taken as an expense of the partnership and be taken as payable from the net proceeds of sale of the properties concerned.

   (e)Proceeds paid to the First and Second Defendants in the sum of $406,998 from the sale of 8A Spencer Avenue are not to be treated as a contribution by the Plaintiff and Second Defendant by Counterclaim to any of the other partnership projects referred to above.  Proceeds paid to the First and Second Defendants from the sale of 8A Spencer Avenue are not to be treated as a contribution by the Plaintiff and Second Defendant by Counterclaim to any of the other partnership projects referred to above.

   (f)For accounting, there should be no distinction drawn between the developed properties which were sold, and those that are yet unsold.  The value of the unsold properties are to be treated as a receipt of value of those properties in accordance with the interest of the parties as reflected on the title to the relevant property at the time of its purchase by the parties.

   5.By 17 August 2018 the First and Second Defendants are to file and serve upon the Plaintiff and the Second Defendant by Counterclaim an account in relation to each partnership in accordance with the Orders made in paragraphs 2 and 4.

   6.Within 28 days of service on the Plaintiff and the Second Defendant by Counterclaim of the accounts in relation to each partnership the Plaintiff and the Second Defendant are to apply to a Registrar for directions as to the way any dispute as to any item of the accounts is to be resolved.

   7.Any party to the account found liable to the other party to the account do pay to that other party the amount due within 28 days of the Order being made that such party is liable to another party to make such payment.

   8.Each party is to bear its own costs of the proceedings to the date of these orders.

   9.The question of costs of the accounts is reserved to the Registrar dealing with the account.

The registrar's report

1. On 29 March 2019, the defendants filed and served their account, which was verified by an affidavit sworn by the first defendant on 20 August 2018, pursuant to order 5 of Chaney J's orders. 

2. The hearing of the taking of the account was lengthy and protracted, extending over nine hearing days.  Five witnesses were called and 62 exhibits tendered.[16]

   [16] Registrar's report [39] - [41].

3. The registrar's report is voluminous, totalling 732 pages.  The registrar's reasons contain 589 paragraphs.  The report attaches three schedules.  Schedule A reproduced the contentions of the opposing parties in relation to each item in the accounts that was in dispute.  Schedule B reproduced the first and second respondents' account.  Schedule C was the statement of agreed facts.

4. The primary judge provided the following overview of the structure of the registrar's reasons:

   (a)introduction and background - [1] - [19];

   (b)statement of the governing rules and principles - [20] - [38];

   (c)description of the procedure followed by the registrar - [39] ‑ [57];

   (d)preliminary findings - divided into general findings dealing principally with specific issues raised by the plaintiff in relation to the approach to be taken to the taking of accounts … - [58] ‑ [90]; and general findings setting out the approach taken to particular categories of items within the first and second defendants' account - [91] - [124];

   (e)specific findings in relation to items in the first and second defendants' account that were the subject of dispute - [125] ‑ [553];

   (f)specific findings in relation to items in the plaintiff's account -[554] ‑ [587];

   (g)a summary - [588] ‑ [589].

1. At this stage, it is sufficient to provide only a broad outline of the registrar's findings.  We will say more as to the findings concerning some specific disputed items in the course of considering the grounds of appeal.

2. In outlining the background, the registrar noted that Chaney J did not make any finding of breach of fiduciary duty, wilful default or wrongful conversion by the first and second defendants and did not order an account to be taken on any such basis.  Rather, the orders provided for a taking of an account in common form.[17]

   [17] Registrar's report [13] - [14]; see also [36] - [38].

3. The registrar also noted that the orders required the first and second defendants to prepare an account and, to the limited extent of two properties, also required Mary to prepare an account.[18]

   [18] Registrar's report [15].

4. Among other things, the registrar's general findings included the following.

5. The registrar considered that the parties were bound by the agreed facts in the statement of agreed facts and by findings of fact made by Chaney J.[19]

   [19] Registrar's report [19], [60].

6. The registrar recognised that once a dispute or objection had been notified in respect of a particular item, the onus was on the accounting party to prove the correctness of the item.[20] 

   [20] Registrars report [26].

7. The registrar said that the orders of Chaney J provided for an account in common form.  The registrar found that that required the accounting parties to prepare accounts in accordance with the orders and it was then open to the other party to falsify or surcharge items in those accounts.  A surcharge is the showing of an omission for which credit ought to have been given.  A falsification is the showing of a charge which has been wrongly included, the falsifying party alleging that money shown in the account as paid or claimed was either not paid or was improperly paid or claimed.[21] 

   [21] Registrar's report [15], [61].

8. The registrar considered that Mary's submissions that the taking of accounts was to be on the basis of the preparation of accounts for financial accounting or taxation purposes or for the purposes of the Partnership Act 1895 (WA) did not reflect the taking of accounts in common form.[22]   As will be seen, Mary contended to the primary judge and contends in this court that this reasoning reveals fundamental error on the part of the registrar.  However, as we will explain, like the primary judge, we agree with the registrar.

   [22] Registrar's report [62].

9. The registrar found that where a sum of money is an agreed fact between the parties, the quantum, description, source and application/destination of that sum could not be challenged on the taking of the account so as to be inconsistent with any agreed fact.[23]

   [23] Registrar's report [64].

10. The registrar rejected Mary's tender of what was referred to as the Barrington report, a report prepared in December 2013 by Mr Charles Napoli for Family Court proceedings between Mary and Chan.  However, the registrar considered it was open to Mary to tender any relevant source documents or to seek to persuade the registrar to the same conclusions as were contained in the report.[24]

    [24] Registrar's report [69] - [70].

11. The registrar rejected Mary's preparation of her own competing version of the accounts prepared by Frank and Andrea.  The registrar explained the difference between the taking of an account in common form and account on the basis of wilful default, referring to authorities including Glazier Holdings Pty Ltd v Australian Men's Health Pty Ltd [No 2];[25] Re Ellis; Ellis v Ellis[26] and Agricultural Land Management Ltd v Jackson [No 2].[27]  The registrar found that Mary's complaints on the taking of account were primarily of a nature apt for an account on the basis of wilful default.  The registrar concluded that Mary's right to falsify items in the account was limited to demonstrating that items were not authorised by the terms of the partnership agreements.  It did not permit the ventilation of issues of breach of fiduciary duty or fraud or for the taking of an account of profit.[28]

    [25] Glazier Holdings Pty Ltd v Australian Men's Health Pty Ltd [No 2] [2001] NSWSC 6.

    [26] Re Ellis; Ellis v Ellis [2015] WASC 77; (2015) 14 ASTLR 475.

    [27] Agricultural Land Management Ltd v Jackson [No 2] [2014] WASC 102; (2014) 48 WAR 1 [334] ‑ [349].

    [28] Registrar's report [88].

12. The registrar then made detailed specific findings as to each disputed item in the first and second respondents' account:  see [125] ‑ [553] of the registrar's report.

13. The registrar then set out her findings in respect of disputed items in Mary's account relating to the two properties for which she was required to account:  see [554] - [587] of the registrar's report.

14. The registrar concluded with a list of the items for which she had allowed the objections.[29]

    [29] Registrar's report [588].

The defendants' application for the registrar's report to be adopted

1. On 20 March 2020, the primary judge made orders extending the time for the parties to make any application for the adoption or non‑adoption of the registrar's report.  The orders required any minutes of further directions to be filed and served by 30 March 2020 and a further directions hearing on 2 April 2020.

2. By her minute of 30 March 2020, Mary sought an order that the report not be adopted and proposed the appointment of Mr Napoli as an independent expert who would be ordered by the court to express a 'preliminary opinion' that addresses the following questions:  (i) whether the registrar's report, the first and second defendants' account and the plaintiff's account were each capable of producing a final outcome for each of the eight partnerships and the final distribution outcome for each of the partners; (ii) whether the registrar's report is capable of being utilised to provide a determination of the full assets and liabilities as at each accounting date; and if not, (iii) what are the deficiencies and from which sets of accounts may the necessary information be identified.[30]

   [30] Primary reasons [12].

3. Frank filed a minute of orders proposing the adoption of the report subject to an exception in relation to one individual item and proposing the appointment of an independent accountant to take the findings set out in the report and make consequential changes to the first and second defendants' accounts. 

4. At the directions hearing of 2 April 2020, the primary judge made directions for the filing of submissions, limited to 20 pages, in relation to the question of whether the report should be adopted.  His Honour directed that Mary's submissions identify the orders she sought and the court's power to make such orders.  The matter was adjourned to a directions hearing on 8 May 2020.

5. The hearing on 8 May 2020 was vacated and the matter listed on 14 May 2020.

6. The applications came before the primary judge on 14 May 2020.  After hearing oral submissions from the parties, his Honour reserved his decision.  The following day, on 15 May 2020, the primary judge gave short reasons for adopting the report, save in relation to one item, and told the parties that he would deliver more detailed written reasons at a later time.  After hearing from the parties, his Honour made the orders referred to in [69] ‑ [70] below.  We will say more about the hearing of 14 May 2020 in considering ground 10.

The primary decision

1. His Honour published written reasons on 22 May 2020.

The relevant legal principles

1. Neither party takes issue with the primary judge's statement of the relevant legal principles, which was as follows:[31]

   [31] Primary reasons [16] - [19].

   Section 50(2) of the Supreme Court Act 1935 (WA) provides relevantly, in effect, that the report of a registrar to whom the court has referred for inquiry or report any question arising in a cause or matter (other than a criminal proceeding) may be adopted wholly or partially by the court and, if so adopted, may be enforced as a judgment or order to the same effect.

   By O 35 r 9 of the (RSC) read with O 35 r 11, any party may apply to the court to adopt or carry into effect the report of (relevantly) a registrar to whom a question or issue has been referred.

   In Wenco Industrial Pty Ltd v WW Industries Pty Ltd [[2009] VSCA 191; (2009) 25 VR 119. See also Able Tours Pty Ltd v Mann [No 2] [2013] WASC 96], the Victorian Court of Appeal set out at [17] the following guidelines as to how the question of the adoption of a referee's report should be approached - (references to O 35 r 9 have been substituted in place of references to the comparable provisions of Victorian rules):

   (a)In exercising the power conferred by O 35 r 9 to adopt the report of a special referee, the Court has a wide power which is to be exercised 'as the interests of justice require'. This broad mandate should not be the subject of restrictions laid down in advance of judges exercising it. Subject to what follows, it is undesirable to attempt closely to confine the manner in which the discretion is to be exercised.

   (b)The purpose of O 35 r 9 is to provide, where the interests of justice so require, a form of partial resolution of disputes alternative to orthodox litigation. Further, that purpose would be frustrated if the reference were to be treated as 'some kind of warm-up for the real contest'.

   (c)Insofar as the subject matter of dissatisfaction with a report is a question of law, or the application of legal standards to established facts, a proper exercise of discretion requires the judge to consider and determine that matter afresh.

   (d)Where a report shows a thorough, analytical and scientific approach to the assessment of the subject matter of the reference, the Court would have a disposition towards acceptance of the report, for to do otherwise would be to negate both the purpose and the facility of referring complex technical issues to independent experts for inquiry and report.

   (e)If the referee's report reveals some error of principle, absence or excess of jurisdiction, patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason for rejection.  In this context, patent misapprehension of the evidence refers to a lack of understanding of the evidence as distinct from the according to particular aspects of it different weight; and perversity or manifest unreasonableness mean a conclusion that no reasonable tribunal of fact could have reached.  The test denoted by these phrases is more stringent than 'unsafe and unsatisfactory'.

   (f)Generally, the referee's findings of fact should not be re-agitated in the Court.  The Court will not reconsider disputed questions of fact where there is factual material sufficient to entitle the referee to reach the conclusions he or she did, particularly where the disputed questions are in a technical area in which the referee enjoys an appropriate expertise.  Thus, the Court will not ordinarily interfere with findings of fact by a referee where the referee has based his or her findings upon a choice between conflicting evidence.

   (g)The purpose of O 35 r 9 would be frustrated if the Court were required to reconsider disputed questions of fact in circumstances where it is conceded that there was material on which the conclusions could be based.

   (h)The Court is entitled to consider the futility and cost of re‑litigating an issue determined by the referee where the parties have had ample opportunity to place before the referee such evidence and submissions as they desire.

   (i)Even if it were shown that the Court might have reached a different conclusion in some respect from that of the referee, it would not ordinarily be (in the absence of any of the matters referred to in subpar (e) above) a proper exercise of the discretion conferred by O 35 r 9 to allow matters agitated before the referee to be re-explored so as to lead to qualification or rejection of the report.

   In Wilden Pty Ltd v Green [No 6] [[2018] WASCA 198], the Court of Appeal cited the decision in Wenco with approval and stated:

   The court exercises a judicial discretion as to whether to adopt the Registrar's report.  The discretion is to be exercised in the interests of justice consistently with the object and purpose of the rules permitting the court to direct the necessary inquiries or accounts to be taken or made.  An application to adopt the report is neither an 'appeal' de novo nor an appeal by way of rehearing.  The nature of the complaints made about the report, the type of litigation involved and the length and complexity of the proceedings before the registrar may all be relevant considerations [Super Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549, 563 ‑ 564; Wenco [17]].

   If a report reveals an error of principle, an absence or excess of jurisdiction, a patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason for its rejection [Super (563 ‑ 564); Wenco [17]]. In this context, patent misapprehension of the evidence refers to a lack of understanding of the evidence as distinct from according aspects of the evidence with particular weight. Perversity or manifest unreasonableness means a conclusion that no reasonable tribunal of fact could have reached [Wenco [17]]. Also, the court is entitled to consider the futility and costs of re-litigating an issue determined by the registrar where the parties have had ample opportunity to place before the registrar such evidence and submissions as they desire [Wenco [17]].

Mary's grounds of opposition

1. The primary judge observed that, although set out in her written submissions, the grounds relied on by Mary in support of her contention that the court not adopt the report lacked clarity.  The judge adopted the classification of Mary's grounds advanced in oral submissions by counsel for the first and second defendants as involving:[32]

   (a)a challenge to the methodology adopted by the registrar;

   (b)challenges to the approach taken by the registrar to the evidence generally and to certain items of evidence; and

   (c)challenges to particular factual findings.

Challenge to the methodology

[32] Primary reasons [27].

1. The primary judge said that Mary's central proposition was that the first and second defendants' account was inadequate for the purpose of providing a true and accurate account of the financial position of the partnership because it did not reflect the requirements of partnership accounts.  That is, because it was not presented in accordance with a conventional partnership set of accounts, it did not accord with the relevant Australian Accountings Standards and it did not reflect the requirements of the taxation legislation.

2. The judge stated that this challenge confused the remedy of the taking of an account with 'accounting'.  The judge referred to the discussion of the nature of an account in cases such as Agricultural Land Management Ltd v Jackson [No 2] and Rowe v National Australia Bank Limited.[33]  The judge said that, expressed simply, the taking of the account involved the preparation of a list of receipts and payments falling within the categories identified in order 4 of the orders of Chaney J.[34] The judge rejected the challenge to the registrar's methodology.

   [33] Rowe v National Australia Bank Limited [2019] WASCA 140; (2019) 56 WAR 1.

   [34] Primary reasons [30].

3. Ground 1 of the appeal to this court challenges this reasoning and conclusion.

4. The judge also noted that the registrar construed the order of Chaney J for the taking of an account to require the taking of a common account.  The judge accepted this construction and stated that the registrar was correct to reject the plaintiff's argument that the account be taken on the basis of a wilful default.[35]

Challenges to the approach to the evidence

[35] Primary reasons [33].

1. Mary argued that the registrar, in determining factual issues, should have applied, instead of the civil standard of proof, various accounting techniques.  The judge rejected this argument.

2. Mary also argued that the registrar erred by refusing to admit evidence on the taking of the account that had been tendered at trial, namely the Barrington Report and exhibit 54 - a schedule of payments made to Chemech. In support of this, Mary relied on O 36 r 9 of the Rules of the Supreme Court 1971 (WA). The judge found that there was no error in the registrar's approach to the admission of the Barrington Report. With respect to exhibit 54, the judge referred to the registrar's reasons and stated that while the registrar may have overlooked the operation of O 36 r 9, the registrar's reasons did not reveal any error of principle.

3. This conclusion is challenged in this court by ground 10.

Challenges to factual findings

1. Mary's written submissions to the primary judge identified eight errors said to have been made by the registrar.  The judge dealt with, and dismissed, each of those complaints.  Each of them is reventilated in this court by a ground of appeal.  We will outline the judge's reasoning in relation to each alleged error in the course of dealing with the ground of appeal.

2. The judge also observed that, in the course of oral submissions, Mary's counsel asserted that the registrar had made 'errors of millions of dollars'.  His Honour considered that the attempts by Mary's counsel to make good that assertion by reference to the best examples of error he was able to identify were not persuasive.  Mary's counsel argued to his Honour that she would have been able to provide detailed submissions on the allegations of error had the limit on the length of submissions not been 20 pages.  The judge expressed concern that had the limit on the length of submissions been lifted, the result would have been, in substance, a rehearing of the taking of the account.[36] 

   [36] Primary reasons [40].

3. Ground 10 impugns his Honour's approach in this regard.

First and second defendants' challenge to item 363

1. The first and second defendants contended that the registrar erred in disallowing the amount claimed under item 363 - being an expense item relating to 84 Matlock Street and described as 'Interest of David Lam Loans (Land Purchase & Partial Building Cost)' in the amount of $99,515.  The first and second defendants argued that the registrar overlooked a concession made by counsel for the plaintiff with respect to the item in finding that there was no support for the existence of David's contribution to the project.

2. The judge stated that the relevant passage of the transcript supported the existence of a concession and that the item should be allowed as claimed.

3. This conclusion is challenged by ground 12.

The primary judge's conclusions

1. The judge concluded that he should adopt the registrar's report, other than in respect of item 363.

2. The judge expressed his reasons for reaching this conclusion by reference to the factors enumerated in Wenco Industrial Pty Ltd v WW Industries Pty Ltd.[37] His Honour's reasons were as follows:[38]

   [37] Wenco Industrial Pty Ltd v WW Industries Pty Ltd [2009] VSCA 191; (2009) 25 VR 119.

   [38] Primary reasons [65] - [69].

   (1)The exercise undertaken by the registrar was the exercise ordered to be undertaken, and the report is the result of the exercise.

   (2)The report's contents and the registrar's approach to the taking of the account, which was careful, thorough and methodical, disposed his Honour to adopt the report.  The primary judge stated:[39]

   The report contains a careful, thorough and methodical analysis of a very significant volume of detailed accounting data put before the court for the purposes of taking the account.  The report reveals a careful consideration of the submissions made by both sides.  The plaintiff was afforded every opportunity to challenge the account and to present her arguments.

   While, as will be seen, much of the primary judge's reasons are challenged (there are 12 grounds of appeal), there is no challenge to this aspect of his Honour's reasons.

   (3)The report does not reveal any error of principle or any error of the nature identified in Wenco that would justify not adopting the report.

   (4)The alleged errors in fact finding asserted by Mary do not reveal any error, and certainly not systematic or widespread errors of the nature alleged by her.

   (5)As discerned from Mary's submissions as a whole, she is seeking an opportunity to re-agitate the factual issues that were determined by the registrar in the course of taking the account, without having established an error of the nature discussed in the authorities, which would negate the very purpose of the matter being referred to the registrar for the taking of the account.

   [39] Primary reasons [66].

1. The judge stated that the next steps to be taken towards finalising the matter are to make orders addressing the deficiencies in Mary's account, which were identified in the registrar's report, and for the appointment of an independent accountant to complete the process of taking an account.[40]

   [40] Primary reasons [70] - [71].

The primary judge's orders

1. The judge made orders that the registrar's report be adopted save in respect of item 363, in relation to which there should be a finding that item 363 be allowed.  The judge also made orders for the appointment of an independent accounting expert to carry out tasks detailed in the orders, so as to make appropriate adjustments to the first and second defendants' accounts in light of the registrar's findings.

2. Paragraph 7 of the judge's orders instructed the appointed independent accounting expert to carry out the following tasks:

   (a)to take the findings by the Registrar on Items 9, 10, 28, 104, 105, 106, 121, 122, 128, 133, 134, 139, 167, 168, 186, 246, 247, 258, 275, 304, 305, 306, 313, 314, 315, 335, 341, 372, 373, 374, 386, 387, 388, 416, 421, 426, 427 and 432 ([120]) and in each case identify in the First and Second Defendants accounts (Schedule B to the Registrar's Report) the item, adjust the amount in accordance with the Registrar's finding and make any consequential changes to the First and Second Defendants' accounts;

   (b)to take the finding by the Registrar as to Item 214 ([303]) and adjust the First and Second Defendants' accounts (Schedule B to the Registrar's Report) accordingly and make any consequential changes to the First and Second Defendants' accounts;

   (c)to take the Registrar's findings as to Item 230 ([325] - [326]) and make adjustments to the First and Second Defendants accounts (Schedule B to the Registrar's Report) and make any consequential changes to the First and Second Defendants' accounts;

   (d)to take the Registrar's findings as to Items 251 to 259 ([347] ‑ [348]) and make adjustments to the First and Second Defendants accounts (Schedule B to the Registrar's Report) and make any consequential changes to the First and Second Defendants' accounts;

   (e)to take the Registrar's findings as to Items 265 to 269 ([355] ‑ [361]) and make adjustments to the First and Second Defendants accounts (Schedule B to the Registrar's Report) and make any consequential changes to the First and Second Defendants' accounts;

   (f)to take the Registrar's findings as to Item 217 ([310] - [311]) and make adjustments to the First and Second Defendants accounts (Schedule B to the Registrar's Report) and make any consequential changes to the First and Second Defendants' accounts;

   (g)to take the Registrar's findings as to Item 399 ([520] - [521]) and make adjustments to the First and Second Defendants accounts (Schedule B to the Registrar's Report) and make any consequential changes to the First and Second Defendants' accounts; and

   (h)to take the Registrar's finding at [111] and to include interest and cost expenses incurred from the partnership joint Commonwealth Bank home loans 511031108 and 422911901 as set out in the affidavit of Mr F.  Lam of 30 March 2020 be brought to account since 30 June 2018 to the date of the IAE's report.

Leave to appeal

1. The notice of appeal asserted that leave to appeal is not required.  Following correspondence from the court inviting submissions on whether leave to appeal was required, Mary maintained the position that the primary judge's orders were final in nature so that leave to appeal is not required.[41] 

   [41] Appeal ts 38.

2. In our view, leave to appeal is required because the primary judge's orders were interlocutory in nature.  The judge's orders did not finally dispose of the parties' rights.  No order was made for payment of any sum of money, and the judge's orders did not quantify any amount to be paid pursuant to order 7 of Chaney J's orders.  In Wenco, the Court of Appeal of Victoria reached a like conclusion.

3. In reply, counsel for Mary made an oral application for leave to appeal if the court was to find that leave is necessary.[42]

   [42] Appeal ts 100.

4. Criteria for determining whether the grant of leave to appeal is in the interests of justice are well known.  Without being exhaustive, the two main questions are usually whether the judgment is attended with sufficient doubt and whether a substantial injustice will occur if the judgment is left undisturbed.

5. As the first of these matters directs attention to the merits of the appeal, it is convenient to deal with the merits of the appeal before returning to the question of leave.

Grounds of appeal - introductory observations

1. Regrettably, Mary advances 12 grounds of appeal, some with sub‑grounds.  The assertion that the primary judge made 12 appellable errors in 10 pages of reasoning to his Honour's conclusions calls to mind what McHugh J said in Tamev New South Wales[43] as to the unlikelihood of a judge making so many errors.

   [43] Tamev New South Wales [2002] HCA 35; (2002) 211 CLR 317 [70].

2. Further, to a significant extent, Mary's grounds of appeal and supporting submissions do no more than pay lip service to the legal principles, summarised in [51] above, governing the question of whether a court should adopt a referee's report.

3. As those principles demonstrate, the decision whether and to what extent to adopt a referee's report involves an exercise of judicial discretion.[44]  Consequently, an appeal against a decision to adopt a referee's report attracts the House v The King standard of appellate review.  That is how appellate courts have approached such appeals, requiring an appellant to demonstrate that the discretion has miscarried.[45]

   [44] Wenco [17]; Wilden Pty Ltd v Green[No 6] [2018] WASCA 198 [53].

   [45] See, for example, Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549, 564, 568; Wenco [51].

4. Although, when pressed, counsel for the appellant accepted that the appeal fell to be considered in this framework,[46] Mary's grounds of appeal to this court, and her submissions in support, are, generally speaking, not framed consistently with those fundamental principles.  Rather, with the exception of grounds 1, 10 and 12, the tenor of the appeal was to contend that the registrar was wrong to allow or fail not to take into account various items as complained about in the taking of the account.  Thus, according to the appellant, the primary judge was in error in not coming to a different conclusion to the registrar.

   [46] Appeal ts 77 - 79, 83, 85.

5. Moreover, it is incumbent on parties who contend, on an appeal against a discretionary decision, that attention was not given to particular matters to demonstrate that the primary judge's attention was drawn to those matters, at least unless they are fundamental and obvious.[47]  In a case such as the present one, in which the discretion related to the adoption of a referee's report almost 600 paragraphs long concerning hundreds of disputed items, this consideration has particular application. As will be seen, a number of the contentions advanced by Mary in this court were not put to the primary judge.

   [47] Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 [120]; Mighty River International Ltd v Mineral Resources Ltd [2020] WASCA 44 [77]; Park Trent Properties Group Pty Ltd v Australian Securities and Investments Commission [2016] NSWCA 298; (2016) 116 ACSR 473 [51]; Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25 [48].

6. In broad summary, in our view none of the primary judge's five essential reasons for adopting the report, as set out in [67] above, has been shown to reveal error.

Ground 1 - misconstruction of Chaney J's orders

1. As explained below, Mary applied to amend ground 1.  The effect of the proposed amendment is to introduce what is a quite distinct point. Consequently, it is convenient to deal first with ground 1 in its original form and then with the additional point introduced by the amendment.

2. Ground 1 contends that the judge erred, in [29] - [33] of his reasons, in adopting the registrar's construction of Chaney J's orders, namely that the taking of the account was to be in common form, when properly understood the nature and scope of the orders required the taking of 'proper partnership accounts'.

Appellant's submissions

1. Mary submits that the taking of accounts in common form, which was adopted by Tottle J, does not reflect the nature of the accounts ordered by Chaney J.  She submits that Chaney J ordered the taking of accounts by the production of proper partnership accounts in the form of annual financial statements meeting accounting standards and complying with applicable taxation laws.[48]  Mary also complained about the non-provision of annual partnership income tax returns, business activity statements and full and complete bank statements, cheque books and supplier payment documentation.  Mary submits that this was the remedy sought by the parties at trial. 

   [48] Appellant's submissions [2] - [5]; appeal ts 54, 57, 63.

2. In support of these submissions, Mary refers to passages of the decision of Chaney J at [13] ‑ [17], [55] ‑ [58] and [132].  She also points to aspects of what his Honour said during the hearing on 24 April 2018,[49] where, she contends, Chaney J set out the methodology required.[50]

   [49] ts (24.04.18) 689 - 691.

   [50] Appellant's submissions [2] - [5]; appeal ts 53, 57 - 60.

3. Mary further submits that the judge erred in his characterisation of the taking of account exercise 'expressed in the simplest terms' at [30] of his reasons.[51]  The appellant refers to [117] of the reasons of Chaney J, submitting that his Honour there observed that the ultimate balance of a partners account is in accordance with the state of the capital accounts of the partners.

   [51] Primary reasons [30].

4. Mary makes further submissions, purportedly under the rubric of ground 1, that go beyond the scope of the ground.[52]  It is not necessary to say more as to these submissions since, as was made clear at the hearing of the appeal, the court's function is, and is only, to determine the grounds of appeal.[53]

Disposition

[52] Appellant's submissions [7] - [15].

[53] Appeal ts 75.

1. Ground 1 reflects the fundamental misconception as to the nature of the account ordered by Chaney J that has infected Mary's conduct of the taking of the account, the proceedings before the primary judge and this appeal.  At the hearing before the primary judge, Mary's counsel submitted that the issue as to the registrar's methodology was the fundamental problem and that either that methodology was wrong - because proper financial statements were required - or Mary and her counsel were 'terribly wrong'.[54]  The latter is the position.  As the registrar and the primary judge have correctly observed, the order for an account is for an account in common form.  That does not entail the preparation of a set of annual financial accounts meeting accounting standards or the other sort of documentation mentioned in Mary's submissions.  By order 2, Chaney J ordered that 'an account be taken' between the parties in dispute and, by order 3, that '[s]uch account to be taken before a registrar'.  That language indicates that the judge's orders refer to the taking of an account as that term is understood in curial proceedings as a remedy, not to the preparation of annual partnership accounts as might be understood by accountants.

   [54] ts (14.05.20) 847.

2. This understanding of Chaney J's orders is reinforced by the terms of order 4 of those orders.  Various features of what is stipulated in that order to be the basis for the taking of the account are inconsistent with Mary's contention as what the orders require and entail.  For example, par (c) prescribes that the interest of any party apart from Mary, Chan, Frank and Andrea is taken to have been settled so that there is no further liability to account in respect to them.  Conventional financial statements for the partnership, which Mary contends are required by these orders, would necessarily encompass all aspects of the partnership and so would not exclude matters relating to any particular partner(s).  The reference in par (c) to there being no further 'liability to account' is a further indication that the judge's orders refer to the taking of an account as a remedy.

3. As both the judge[55] and the registrar[56] recognised, this understanding of Chaney J's orders is also supported by the nature of the remedy of account.  The long history of the remedy of account was traced in some detail in Rowe v National Australia Bank Limited.[57]  The remedy of account requires a party who is responsible for the administration of a business enterprise or fund or other property to account for money received and disbursed, and then to pay any amount found to be due on the taking of the account.  Dissolution of a partnership is one of the established categories of case in which the court will order an account.[58]  Absent demonstrated wrongdoing by the accounting party, the order to account is an order for an account in administration in common form, requiring the accounting party to account only for what they have actually received and their disbursement or distribution of it.[59]  On proof of misconduct cognisable in equity the court may order an account in administration on the basis of wilful default.[60]

   [55] Primary reasons [29].

   [56] Registrar's report [79] - [85].

   [57] Rowe v National Australia Bank Limited [57] ‑ [85].

   [58] Rowe v National Australia Bank [64]; Glazier Holdings v Australian Men's Health [37].

   [59] Rowe v National Australia Bank [97] - [100]; Glazier Holdings v Australian Men's Health [38]; Agricultural Land Management Ltd v Jackson [No 2] [334], [339].

   [60] Rowe v National Australia Bank [99]; Glazier Holdings v Australian Men's Health [39].

4. The absence of any specification that the account be on the footing of wilful default suggests that the account is an account in common form.[61]  Moreover, to obtain an account on the basis of wilful default, the plaintiff must plead and prove misconduct by the accounting party.[62]  No wrongdoing was alleged in the trial before Chaney J, and none was found by his Honour.

   [61] Glazier Holdings v Australian Men's Health [65].

   [62] Glazier Holdings v Australian Men's Health [39].

5. In those circumstances and for these reasons, Chaney J's orders for an account to be taken are naturally to be understood as requiring the taking of an account in common form.  As we have said, that required the accounting party to account for money received and disbursed.  It did not require the production of a set of financial statements amounting to partnership accounts as would meet accounting standards.

6. Chaney's J's reasons reinforce this understanding of the orders he made.  See, for example, [116] ‑ [117] of his Honour's reasons.

7. What is required for the taking of an account is shaped by the order which requires the account to be taken.  The primary judge's expression in simple terms of the effect of the account required by orders 2 - 4 of Chaney J's orders - as involving the preparation by the accounting party of a list of receipts and payments falling within the categories identified in order 4 of the orders of Chaney J - was an apt characterisation of the effect of the orders.

8. As the registrar rightly observed, in an account in common form, the other party to the accounting may challenge the accounting party's account, by asserting that more was in fact received (surcharging) or by asserting either that less was disposed of, or that claimed disbursements were not properly incurred and should be disallowed (falsifying).[63]  Mary did not approach the taking of the account in that framework.  Her failure to do so persisted notwithstanding that the registrar delivered an interlocutory decision on 18 July 2019 making plain the registrar's view as to the nature of the account and what that dictated as to the scope of the issues, and notwithstanding Mary's failure to request the registrar to refer any question to a judge.  Mary's conduct of the taking of the account in a manner not informed by an appreciation of the nature of the exercise presented considerable challenges for the registrar and, no doubt, the other parties.

   [63] Rowe v National Australia Bank [98].

Application to amend ground 1

1. Immediately prior to the hearing of the appeal, Mary applied for leave to amend ground 1, by adding the words 'on 28 June 2018' at the end of the ground, and to rely on further submissions in respect of ground 1.

2. In the absence of any prejudice to the respondents, who have made submissions in relation to the proposed amended ground, leave should be granted.

3. The additional submissions challenge order 7(h) made by the judge.  That order required the independent accounting expert (IAE):

   to take the Registrar's finding at [111] and to include interest and cost expenses incurred from the partnership joint Commonwealth Bank home loans 511031108 and 422911901 as set out in the affidavit of Mr F Lam of 30 March 2020 be brought to account since 30 June 2018 to the date of the IAE's report.

4. Mary submits that his Honour misconstrued and misapplied the orders of Chaney J, which required the accounts to be calculated to the date of dissolution of the partnership, on 28 June 2018, and thereby impermissibly added interest and costs incurred on two loans after 28 June 2018.

5. For the following reasons, there is no merit in these submissions

6. The amended ground and its supporting submissions are founded on a false premise, namely that Chaney J's orders required the preparation of accounts as at 28 June 2018.  Nothing in the terms of his Honour's orders suggests that this is so.  That the orders were made on that day is, in itself, of no moment.  The context and purpose of the orders distinctly point against Mary's construction of the orders.  To have fixed the date of the orders as the point in time at which the account must be taken, in circumstances where some of the eight partnerships still owned land and owed money to external lenders, would have been quite arbitrary.  By definition, the account would have to be prepared some time after 28 June 2018.  No reason is apparent why an accounting party should be neither permitted nor required to account for monies received or disbursed after 28 June 2018.  Nothing in the text, context or purpose of his Honour's orders sustains a construction that the orders require the account to be taken as at 28 June 2018.  Ground 1 in its amended form fails accordingly.

7. Further, on 15 May 2020, having announced that he would make orders substantially in the terms sought by Frank and Andrea, the judge invited Mary's counsel to make submissions as to the precise terms of the order to be made.[64]  The respondents' minute included an order in terms of order 7(h).  While Mary's counsel made submissions as to other aspects of the proposed orders, he raised no objection to the terms of what became order 7(h).  As noted in [80] above, generally speaking, it is incumbent on parties who contend, on an appeal against a discretionary decision, that attention was not given to particular matters to demonstrate that the primary judge's attention was drawn to those matters.  In the circumstances of this case, the judge did not err in making an order in the terms of order 7(h), given the absence of any specific objection to it by Mary.

   [64] ts (15.05.20) 882.

8. Ground 1 in its amended form is without merit.

Ground 2 - first alleged factual error

1. Ground 2 contends that the primary judge erred, in [42] of his reasons, in adopting the registrar's report that the registrar was not required to make findings on items 1, 48, 96, 161, 207, 299 and 362, which related to the acquisition costs of the separate parcels of land that were developed.  It further contends, in effect, that his Honour erred in adopting the registrar's report, as the report misallocated these items as costs instead of as assets.

1. This ground challenges the judge's finding on the first error alleged by the appellant.  The judge found that the registrar was not required to make findings in respect of the items because they were agreed facts.

Appellant's submissions

1. Mary submits that the judge erred in omitting the items representing the acquisition cost of the respective properties, thereby repeating the 'fundamental error' of the registrar, with the result that the items were erroneously misallocated as costs, rather than assets, of the partnership.[65] She further submits that Chaney J determined the purchase price of the eight properties to total $6,426,500 but that the registrar, and the judge in accepting the report, did not account for the land acquisition events and therefore the sum of $6,426,500.[66] 

Disposition

[65] Appellant's submissions [18] - [20].

[66] Appellant's submissions [20].

1. In the course of argument, Mary's counsel ultimately accepted that ground 2 and its supporting submissions were founded on acceptance of the contention advanced by ground 1 - that proper partnership accounts were required.[67]  Counsel was correct to do so.  It is only through establishing via ground 1 that full partnership accounts are required that recording the acquisition of property as an asset can be said to be required.  Ground 1 having failed, ground 2 fails.

   [67] Appeal ts 69 - 70.

2. All of the items the subject of this ground were matters that were agreed in the statement of agreed facts.  That can be seen by an examination of the relevant items in schedule B and in schedule C - the statement of agreed facts.  Consistently with that, none of these items were mentioned in schedule A, which, for each item in dispute, set out the contentions of the opposing parties. 

3. Neither the judge nor the registrar erred.  Much less has Mary established an error by the registrar of a kind that would justify a decision not to adopt the registrar's report. 

Ground 3 - second alleged factual error

1. Ground 3 contends that the primary judge erred, in [43] of his reasons, in determining that there was nothing in the report or the materials relied on, including the statement of agreed facts, to support Mary's contention that the registrar made an error by not bringing the bank loan proceeds into account.  The ground further contends that:

   (1)[47] of the reasons of Chaney J sets out his findings as to the loan accounts, and identifies partnership bank loan transactions as the ultimate source of purchase monies, as contained in the statement of agreed facts; and

   (2)the first and second respondents, in their taking of account, erroneously misallocated the borrowings of the partnership as their personal contributions in the purchases of 167 & 167A Lockhart Street, 70 Edgecumbe Street and 82 & 84 Matlock Street.

2. This ground challenges the judge's findings on the second factual error alleged by the appellant.  Those findings can be summarised as follows.

The primary judge's reasons

1. The judge found that many, but not all, of the relevant items, being items 224, 276 - 283 and 445 ‑ 449, were either agreed facts or aggregate of sums that were agreed and that, with respect to items that were not agreed, there was nothing in the report or the materials relied on by the plaintiff that supported her contention of error in the nature she contended, being 'patent misapprehension and perversity, manifest, unreasonableness in fact finding and/or lack of understanding of the evidence'.

Appellant's submissions

1. Mary's complaint under this ground is that the judge erred in accepting the findings of the registrar, as to items 224, 276 - 283 and 445 - 449, that the source of the acquisition cost of 167 & 167A Lockhart Street, 70 Edgecumbe Street and 82 & 84 Matlock Street, was the first and second respondents' personal account.  She submits that this is contrary to the findings of Chaney J, that the source of the acquisition cost of the properties was from partnership loan proceeds.[68]

   [68] Reasons of Chaney J [47(3)-(4)].

2. Mary submits that the payment of the acquisition cost of the properties was from the first and second respondents' personal account but that the source of the money was from partnership loan proceeds.[69]  She submits that the first and second respondents listed the source of the purchase cost for the properties as their personal account and this was accepted by the registrar.  The consequence, she submits, is that the partnership must now repay the borrowed funds twice - to the bank, which is yet to be repaid, and to the first and second respondents.[70]

   [69] Appellant's submissions [22].

   [70] Appellant's submissions [25].

3. Mary makes other submissions as to a sum of $7,039,352 that are outside the scope of this ground, and not the subject of the part of his Honour's reasons impugned by the ground.[71]

Disposition

[71] Appellant's submissions [23] - [24].

1. The registrar did not overlook the findings of Chaney J as to the acquisition costs.  To the contrary, she set out the findings, observing that she was bound by them, but further noting that she was required to take account of additional evidence as to further transactions on the loan accounts.[72]  The registrar then observed that many of the loans, including details as to quantum, lender, borrower and the application, were agreed facts on the taking of the account.[73]

   [72] Registrar's report [92].

   [73] Registrar's report [94].

2. In resolving the objections to the items the subject of this ground, namely items 224, 276 ‑ 283 and 445 ‑ 449, the registrar relied almost entirely on what had been agreed in the statement of agreed facts or simple aggregation of agreed sums. This can be seen in the registrar's reasons at [318], [364] ‑ [369] and [534]. In these circumstances, no error of a relevant kind is shown in the primary judge's conclusions summarised at [112] above.

3. In oral submissions, Mary's counsel reframed the complaint under this ground as a complaint that (i) the proceeds of the partnership bank loans were, in effect, redrawn by Frank and Andrea and then used to pay the acquisition costs, and (ii) the account as a whole did not bring those redraws to account.[74]  However, that does not reflect the issues before the primary judge.  As the judge recorded,[75] Mary's case as to the second alleged error impugned the registrar's findings as to the relevant items on the basis that they contradicted Chaney J's findings and evidenced a 'patent misapprehension and perversity, manifest unreasonableness in fact‑finding and/or lack of understanding of the evidence'.[76] 

   [74] Appeal ts 70.

   [75] Primary reasons [43].

   [76] Mary's submissions dated 24 April 2020, page 11.

4. For the reasons already given, no error of a relevant kind has been demonstrated in the primary judge's conclusion on the issues before him.

Ground 4 - third alleged factual error

1. Ground 4 contends that the primary judge erred, in [44] and [45] of his reasons, in determining that the appellant had not made out any error in the registrar's findings in respect to items 116 - 122. Those items concerned bank and construction costs for the 78 Edgecumbe Street properties.  The ground asserts that his Honour misdirected himself, as the registrar's findings were contrary to [47(8)] of Chaney J's reasons.

2. This ground challenges the judge's finding on the third error alleged by the appellant.  The judge's reasons in rejecting the alleged error can be summarised as follows.

The primary judge's reasons

1. The primary judge considered that Mary was attempting to re‑argue objections that she had raised before the registrar, recording Mary's submission that the core issue was that the expenditure of items 116 ‑ 122 'did not occur' and had been 'manufactured'.[77] 

   [77] Primary reasons [44], quoting Mary's submissions dated 24 April 2020, page 12.

2. His Honour observed that the registrar had the benefit of having before her all of the records, having heard the submissions of the parties and being able to assess the reliability of the parties as witnesses.  The judge was not persuaded that there was any basis for revisiting the factual findings made by the registrar in relation to these items.  His Honour concluded that Mary had not established any error on the part of the registrar, let alone an error of a nature that would justify a decision not to adopt the report.[78]

Appellant's submissions

[78] Primary reasons [45].

1. Mary submits that the judge erred in adopting the findings of the registrar, who accepted items 116 - 122.  She submits that payment of the settlement proceeds of 78A, B and D Edgecumbe Street was never received by the partnership, as shown by [47] of Chaney J's reasons.

2. Mary further submits that the discharge of the bank loan, item 116, did not occur and the bank has since obtained default judgment against the first, second and third respondents.  Thus, she submits, she is at risk of being prejudiced by the interest and default costs associated with the loan.  She also submits that the balance of the proceeds of settlement has been retained by the first and second respondents and was never brought to account as having been received by them.[79]

Disposition

[79] Appellant's submissions [26] - [28].

1. The submissions in [124] above assume that Chaney J's findings at [47] were, and purported to be, comprehensive, when that is plainly not so.  His Honour expressly acknowledged the incompleteness of the evidence before him.

2. It is not easy to connect the remainder of Mary's submissions with the relevant part of the registrar's report, namely [251] ‑ [252].  Mary's submissions, both to the primary judge and to this court, on this ground are replete with factual assertions, but do not identify error of the relevant kind on the part of the registrar or the judge.  Her submissions do not go beyond an attempt to revisit factual matters that were raised before and determined by the registrar.

3. Ground 4 is not established.

Ground 5 - fourth alleged factual error

1. Ground 5 contends that the primary judge erred, in [46] and [47] of his reasons, in determining that the registrar did not err in allowing the first and second respondents to bring into account the net proceeds, as opposed to the gross proceeds, of the sale of the properties. 

2. The ground also contends that his Honour misdirected himself as one half of the proceeds of sale of 70B Edgecumbe Street, received by Tinh Au (Ivan), and the full proceeds of sale of 250A Ewen Street, received by the fourth respondent, David, totalling $1,571,508, were not brought to account. 

Appellant's submissions

1. Mary notes that Chaney J identified in his reasons the gross sale amount for the properties, which his Honour referred to as the contract price.  She submits that the registrar erred in that the report brought into account the net amount for the sale of the properties.[80]  She submits that this error resulted in the registrar omitting $280,346 of partnership income from the account.

   [80] Appellant's submissions [29].

2. Mary also submits that the registrar incorrectly brought into account only half of the contract price for 70B Edgecumbe Street, contrary to the findings of Chaney J at [45(1) ‑ (2)], and did not bring into account the full contract price for 250A Ewen Street, contrary to the findings of Chaney J at [35(1)].[81]

Disposition

[81] Appellant's submissions [29].

1. These contentions and submissions are without merit.  The amounts of the net proceeds of each sale were agreed facts.  As the judge observed, the account taking process required the bringing into account of the net proceeds, not the gross proceeds, because the account was concerned with the actual amount received in respect of the properties.

2. The point made in [132] above, which complains of failure to bring to account amounts paid to Ivan and to David, overlooks the fact that the taking of accounts did not require that account be taken of interests other than Mary, Chan, Frank and Andrea.  As the registrar rightly observed,[82] the parties did not need to account for the disbursement of the settlement to Ivan, as by order 4(c) his interest is taken to have been settled.  The same is true of the sum paid to David.

   [82] Registrar's report [349].

3. For these reasons, ground 5 is without merit.

Ground 6 - fifth alleged factual error

1. Ground 6 contends that the primary judge erred in fact and law, in [48] ‑ [50] of his reasons, in (a) failing to find that Chemech had received a sum of $8,866,977 and was liable to repay to the partnership any overpayments, and (b) failing to add back surcharge amounts of $512,000 paid to Chemech.

Primary judge's reasons

1. The judge recorded that, by this alleged error, Mary alleged that the registrar failed to bring into account all payments made to Chemech since the date of the Barrington report, 17 December 2013.  The judge observed that the statement of agreed facts included all payments made to Chemech other than in relation to the two properties, namely 250 Ewen Street and 84 Matlock Street. In relation to these two properties, as noted by the registrar, Mary relied on the document prepared by her, namely exhibit 49.  The judge then set out the following findings of the registrar:[83]

   [Mary] contends that Chemech, a third party to the account, is not owed amounts claimed as outstanding under Building Contracts.  In the Plaintiff's Schedule, [Mary] contends (at various points) that Exhibit 49 Partnership cash and other monies paid to Chemech Pty Ltd amount to $8,866,977 confirmed by bank statements valid Chemech Pty Ltd contractual documents total $6,251,839.  Whilst what amount [Mary] contends for at any specific point in the First and Second Defendants' account is far from clear, there is an overarching assertion that Chemech has been overpaid by the partnerships.  In support of this [Mary] relies on a document prepared by her (Exhibit 49); the problem with this document is that it is a selective analysis of payments from partnership accounts to Chemech, which focuses on payments out to Chemech without properly accounting for payments back in by Chemech.  [Frank] gave evidence that the relevant transactions (both into and out of the relevant accounts) were effected by him, as a director of Chemech, to reduce interest liability on partnership loan accounts.  [Mary] contended for a broader interrogation Chemech's accounts (sic) to find evidence in support of her contention (this included an examination of Chemech beyond the Chemech bank statements and documents produced on the Taking of Account).  Such broader interrogation of a third party is out with (sic) the scope of the Orders.

   [83] Primary reasons [49] quoting registrar's report [100].

2. The primary judge observed that this was a matter of fact finding and that there was no basis to conclude that the registrar's approach to this fact‑finding exercise was affected by any error of principle.[84]

Appellant's submissions

$6,846,712 error

[84] Primary reasons [50].

1. Mary submits that the primary judge erred in adopting the finding in the report that exhibit 49, a document prepared by her, was a selective analysis of payments out to Chemech without accounting for payments in to Chemech.  She submits that Frank was found by Chaney J to be an unreliable witness and that the primary judge erred in failing to address what she asserts are major inconsistencies in Frank's oral evidence.

2. Mary further submits that the primary judge erred in adopting the findings in the report that show that the construction and development funding has been met predominantly by Frank, Andrea and Chemech, as the findings are contrary to the findings of Chaney J.

$512,000 error

1. Mary submits that the primary judge further erred in adopting the report by failing to bring to account $512,000 paid to Chemech from the sale of 6/84 Matlock Street.  She submits that 'it was proven in evidence and cross‑examination' that Frank failed to disclose payments to Chemech, from the sale of one of the properties, in the sum of $512,000.  In support of this, she directs attention to various exhibits and parts of the evidence before the registrar.[85]

Disposition

[85] Appellant's submissions [38] - [40].

1. These submissions involve an attempt to reargue, afresh, factual and evidentiary matters. The submissions do not engage with the important restraints on the bases on which the court will decline to adopt a referee's report (as correctly identified by the primary judge at the passages reproduced at [51] above). For example, Mary's submissions to this court relied on what exhibit 49 'shows', without engaging with the registrar's finding that that document was a selective analysis.[86] No error of a relevant kind has been shown in that finding or, more generally, in the registrar's reasoning, nor in the primary judge's conclusion summarised at [138] above. Ground 6 is not made out.

   [86] Appeal ts 78 - 80.

Ground 7 - sixth alleged factual error

1. Ground 7 asserts that the primary judge erred in law in [52] of his reasons in adopting the registrar's reasons in relation to the 'unsure items' of the first and second respondents' account.

The primary judge's reasons

1. The primary judge considered that the registrar gave cogent reasons for accepting the approach of the first and second defendants to the 'unsure items', setting out those reasons, and found that there was no basis for contending that the registrar had erred.

2. The registrar's reasoning can be summarised as follows.  The registrar noted the competing factual contentions as to the 'unsure items.' The registrar found that, following her careful examination of each relevant entry of the first and second defendants' account, the proper conclusion was that where the destination of the funds from the various loan accounts could not be verified, referred to as 'unsure items', they assumed the value of the 'unsure item' to be a liability on their side of the accounting exercise.  The registrar considered that this approach meant that for 'unsure items' there was no detriment, and arguably a corresponding benefit, to Mary.

Appellant's submissions

1. Mary submits that the primary judge erred in law, making a 'fundamental error of principle', in accepting the registrar's finding in respect of the 'unsure items' because the items were never unsure.  All transactions, Mary contends, were recorded in bank statements and were before the registrar in her affidavit dated 16 May 2019.  She lists examples of items classified as 'unsure items' for which she contends they are not unsure, setting out the source and destination of the particular transaction and referring to sections in her affidavit dated 16 May 2019.[87]

   [87] Appellant's submissions [43] - [44].

2. Mary contends that the consequence of the primary judge adopting the registrar's approach is that Frank and Andrea have given themselves a false benefit and falsely inflated the amount due to Chemech.

Disposition

1. Given the registrar's approach as outlined in [145] above, Mary's complaint under the rubric of this ground does not rise above an attempt to reargue her factual assertions to the registrar.  The registrar analysed the competing evidence and drew conclusions from it that have not been shown to be perverse or otherwise not open to a reasonable tribunal of fact.  Indeed, Mary has not demonstrated error of any kind in the registrar's findings.  The judge was correct to find that there is no basis for concluding that the registrar made a fundamental error, an error of principle, or otherwise misunderstood the evidence in relation to the unsure items.[88]

   [88] Primary reasons [53].

2. Ground 7 is without merit.

Ground 8 - seventh alleged factual error

1. By ground 8 Mary contends that the primary judge erred in law, in [54] ‑ [57] of his reasons, in determining that the registrar dealt with items 409 and 410 compendiously in [93] of the registrar's report, which is said to be contrary to the reasons of Chaney J at [47(12)].  Items 409 and 410 concerned the application of the net proceeds of sale of two properties.  This ground also contends that the primary judge erred in law in not finding that a sum paid by Chan to Frank was unaccounted for, proven by bank records and an admission by Chan.

1. This ground challenges the primary judge's finding on the seventh error alleged by Mary.  The judge's reasons in dismissing the error can be summarised as follows.

The primary judge's reasons

1. The primary judge noted that at [47(12)] of the decision of Chaney J, his Honour identified seven 'substantial payment or receipts the source or destination of which are unclear on the evidence'.  The primary judge noted that this included the application of the net proceeds of units 4/84 and 5/84 Matlock Street, being items 409 and 410.

2. The judge found that the registrar did not specifically address items 409 and 410, however the registrar dealt with the issues compendiously in [93] of the report, where the registrar stated that the transactions referred to in [47(12)] were accounted for on the taking of account.

3. His Honour noted that Mary relied on her affidavit of 1 July 2019, but the affidavit was not accepted in evidence on the taking of the account.

4. In relation to 5/84 Matlock Street, the judge referred to [545] of the registrar's report, where the registrar stated that Mary, Frank and Andrea all agreed that Chan received the settlement amount from the sale of 5/84 Matlock Street and characterised Mary's complaint as being that she only found out that Chan received the money on the taking of account.[89]

   [89] Primary reasons [56].

5. The judge found that the registrar did not make the error contended for by the plaintiff.

Appellant's submissions

1. Mary submits that the primary judge erred in determining that the registrar dealt with the destination of the proceeds of sale of 5/84 Matlock Street in [93] of the report.  She further asserts that the judge erred, in referring to what the registrar recorded at [545] of the report, namely that the Mary, Frank and Andrea agreed that Chan received the settlement amount from the sale of 5/84 Matlock Street, as the parties did not agree that Chan received the money but rather that it was received by Chemech. 

2. Mary also submits that the judge erred by not considering as admissible bank records and a signed statement of Chan, said to be an admission as to his payment of $604,580 to Chemech.  Mary refers to exhibit 49, the document prepared by her with respect to the partnerships' transactions with Chemech and submits that part of the proceeds of sale were paid into Chemech's account.

Disposition

1. The registrar did not proceed inconsistently with what Chaney J had said at [47(12)].  As already noted, his Honour expressly acknowledged the incompleteness of the evidence before him.

2. No error of a kind sufficient to justify refusal to adopt a referee's report is shown in relation to the registrar's finding at [545]. Mary's submissions overlook or fail to grapple with findings made by the registrar concerning the evidence upon which Mary now seeks to rely. As already noted, the registrar found that exhibit 49 was a selective analysis that did not account for payments back in to the partnership made by Chemech.[90] Further, the registrar ruled that Mary's affidavit dated 1 July 2019 was inadmissible on the taking of the account.[91]  That ruling was not challenged before the primary judge[92] - indeed, the ruling was not even referred to.  Simply referring in submissions to an affidavit, without mentioning the registrar's ruling, cannot be treated as amounting to a claim that the ruling reveals error of a kind that justifies a decision not to adopt the registrar's report in a relevant respect.  For reasons already given, in those circumstances the registrar's ruling as to the affidavit of 1 July 2019 cannot be revisited in the appeal to this court.  Also, Mary did not rely upon s 79B or s 79C of the Evidence Act 1906 (WA) before the primary judge and cannot now do so to demonstrate error in the judge's discretion.

   [90] Registrar's report [100]

   [91] Interlocutory reasons [26].

   [92] See Mary's submissions, 24 April 2020, page 18. Simply referring to the affidavit in submissions, without mentioning the registrar's ruling cannot be treated as amounting to a claim that the ruling reveals error of any kind.

3. For these reasons, ground 8 does not demonstrate error on the part of the primary judge.

Ground 9 - eighth alleged factual error

1. By ground 9 Mary contends that the primary judge erred in fact and law, in [58] ‑ [60] of his reasons, in adopting the report regarding the retrospective building costs for 17 Darch Street, by (1)(a) accepting inadmissible evidence from Mr McAree, a quantity surveyor, as to the cost of construction, (1)(b) finding that the cost of construction was, in accordance with Mr McAree's evidence, $838,426, (1)(c) by adopting the decision of Denning J in Starr v Minister for Pensions[93] and (2) failing to find that the cost of construction was $180,000 when Frank and Andrea could not vouch for any actual expenditure.

   [93] Starr v Minister for Pensions [1946] 1 KB 345.

2. This ground challenges the primary judge's finding with respect to alleged error 8.  The judge found that the factual issue as to the cost of construction of 17 Darch Street was addressed at length by the registrar and that there was no basis for concluding that the registrar erred.

Appellant's submissions

1. Mary submits that the primary judge erred in adopting the report because, in accordance with [134(1)] of the reasons of Chaney J, Frank and Andrea were required to itemise all costs incurred in the construction of 17 Darch Street and they failed, and are unable, to do so.

2. Mary asserts that the evidence of Mr McAree, a quantity surveyor, who was called by Frank and Andrea to provide an estimate as to the construction cost for 17 Darch Street, was inadmissible, unreliable, unsubstantiated and should not have been adopted by the primary judge.[94] Mary submits that, contrary to what is required of an expert witness, there was no evidentiary foundation for Mr McAree's opinion.  She also submits that '[i]t is not to the point' that she did not adduce expert evidence to contradict the evidence of Mr McAree, as the onus was on Frank and Andrea to prove their case.

   [94] Appellant's submissions [58].

3. In further support of this ground, Mary argues that Chaney J made an 'unequivocal' finding, at [80] of his reasons, that the cost of construction of Darch Street was $188,000, contrary to the registrar's characterisation that the passage was a statement of the evidence given by Frank at trial and did not amount to a finding.[95]

   [95] Registrar's report [171].

4. Mary also submits that the primary judge erred in adopting the report as the registrar erred in stating that she could not reject or adjust Mr McAree's calculations in the absence of probative and admissible evidence in accordance with Starr v Minister for Pensions, when she was not bound to follow the authority and that it is contrary to Wenco and Fox v Percy.[96]

   [96] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118.

5. Mary's submissions asserted, as a conclusion, that the registrar's conclusion was perverse, but did not engage with the registrar's reasoning and the evidence on which it was based.  Consequently, it is necessary to identify the issues before the registrar, the evidence concerning those issues and the registrar's reasoning in dismissing Mary's objection to this item.

The taking of the account before the registrar

1. Ground 9 concerns item 53, which relates to the construction cost of 17 Darch Street.

2. Frank and Andrea's account claimed a sum of $838,426.  As their case on this item was explained in opening, there was no building contract so Frank, as owner builder, was entitled to charge a reasonable sum for the building work.  Frank and Andrea sought to quantify that sum through the evidence of a quantity surveyor, Mr McAree.[97]

   [97] ts (22.05.19) 191 - 192.

3. That was also the effect of Frank's evidence in the taking of the account.[98]

   [98] See for example, affidavit of Francis Hung Lam 20 August 2018 [6]; ts (22.05.19) 265, (23.05.19) 290.

4. Frank was cross‑examined as to the figure of $188,000 in the building licence application.  He said that was the estimate he made at the time.[99]  He said the building was done in two phases, only the first of which was covered in the initial estimate.[100]  He also said that the initial estimate was made at a time before many of the details, such as fittings and fit outs, were known.[101]

   [99] ts (22.05.19) 259.

   [100] ts (22.05.19) 261.

   [101] ts (22.05.19) 262.

5. Frank was also cross‑examined about having told Mr Napoli that the cost of the building was approximately $493,000 ‑ $604,000 but that he did not have a way of verifying the costs.  He accepted that he had said this, saying that it was the estimate he gave at the time.[102]

   [102] ts (22.05.19) 263 - 264.

6. Mary's schedule set out numerous lengthy objections to this item.[103]  Among Mary's principal objections were:

   (1)the amount claimed was inconsistent with the amount claimed by Frank at the trial - $180,000 - and with Chaney J's finding in that regard;

   (2)Frank had failed to provide documents to substantiate the amount claimed;

   (3)the amount claimed was glaringly improbable as it meant that the cost of construction was more than 93% of the sale price of the property; and

   (4)the evidence of Mr McAree was inadmissible, unsubstantiated and unreliable.

The registrar's reasons

[103] BAB 261 - 266.

1. The registrar accurately summarised Mary's objections.[104]  She considered each of them, giving detailed reasons for rejecting them.  Among other things, the registrar:

   (1)Found that Mary's repeated reference to exhibit 54 at the trial, entitled 'First and Second Defendants' Capital Contributions to Projects', did not assist her.  Exhibit 54 was not sought to be introduced in evidence in the taking of the account, was not put to Frank in cross‑examination and so did not provide evidence as to the construction costs.[105]

   (2)Gave a detailed outline of Mr McAree's experience and reasoning, finding that his experience equipped him with the expertise to conduct a retrospective assessment of building costs.[106]

   (3)Outlined substantial aspects of Mr McAree's evidence in cross‑examination, finding that the evidence was admissible and should be accepted.[107]

   (4)Referred to Mr McAree's evidence that it would be wrong to assume that developed properties necessarily produce a profit when sold, evidently accepting that evidence in response to Mary's assertion in [174](3) above.[108]

   (5)Considered and rejected Mary's contention that the construction cost should be found to be $180,000.  In that context, the registrar noted that by the time of the Barrington report Frank was asserting a considerably higher level of costs than the $180,000 stated in the licence application.  The registrar accepted Mr McAree's evidence that things can change a lot between the application for a building licence and the ultimate completion of construction.[109]

   (6)Accepted that Frank and Andrea's methodology was permissible in the absence of any documentary record of the actual costs incurred and that Mr McAree's evidence was the only admissible evidence as to the reasonable value of the building work done.[110] The registrar considered that in the absence of other expert evidence there was no basis on which she could make adjustments to the calculations made by Mr McAree.[111]  In so finding, the registrar referred to Starr v Minister for Pensions.

Disposition

[104] Registrar's report [170] - [172], [178].

[105] Registrar's report [184].

[106] Registrar's report [186].

[107] Registrar's report [187] - [191], [193].

[108] Registrar's report [183].

[109] Registrar's report [190].

[110] Registrar's report [192] - [193].

[111] Registrar's report [193].

1. Most of the points made in Mary's submissions to this court were not put to the primary judge.  The whole of her submissions as to 17 Darch Street were on page 19 of her written submissions dated 24 April 2020.  Counsel advanced no oral submissions as to this alleged factual error.  Mary's written submissions made two complaints.  The first related to item 72, rather than item 53.  In relation to item 72, Mary complained that there was no evidence that the amount of $695,138 for construction costs was ever received by the partnership as 'actual funding'.  The second point, relating to item 53, was to allege error on the part of the registrar in accepting Frank's evidence in the absence of any documentary record of the actual costs incurred.

2. Of the four complaints now sought to be made in ground 9, summarised in [162] above, only the fourth was put to the primary judge.  So, for example, ground 9(1)(a) asserts, in effect, that the judge erred in adopting the report because the report was based on the inadmissible evidence of Mr McAree.  But no contention that Mr McAree's evidence and report was inadmissible was put to the primary judge.  Consequently, it cannot be said that the judge erred in failing to act on a matter that was not drawn to his attention.[112]

   [112] See [80] above.

3. Otherwise, Mary's submissions in support of this ground largely seek to reargue the matters she put to the registrar.  As already emphasised, the question for this court is not whether it might or would have reached a different conclusion as to the evidence and the competing submissions.  The issues for this court are as summarised in (e) of the quote set out in [51] and in [78].  The question is whether the judge erred in failing to find that the registrar's report as to this item revealed a patent misapprehension of the evidence, or whether the registrar reached a conclusion that no reasonable tribunal of fact could have reached.  We are not so satisfied.

4. The registrar dealt with all of Mary's principal objections to this item.  The registrar's reasoning is founded on evidence led in the taking of the account and can readily be followed.  The registrar's detailed reasoning does not reveal any patent misapprehension of the evidence.  Nor are we persuaded that the registrar's conclusions can be said to be perverse or manifestly unreasonable, in the sense that no reasonable tribunal of fact could have reached those conclusions.

5. For completeness, we note that no argument was advanced that order 4(d) of Chaney J's orders precluded the accounting for costs of construction on any basis other than the terms of a lump sum contract.  That is understandable, as Chaney J was aware, and found, that there was no lump sum contract for 17 Darch Street, which was done by Frank under an owner builder licence.[113]  In those circumstances, order 4(d) would not be understood as excluding the costs of construction of 17 Darch Street.

   [113] Reasons of Chaney J [127].

6. For these reasons, ground 9 is not made out.

Ground 10

1. Ground 10 is a mishmash of several conceptually distinct complaints.  It asserts that the primary judge:

   (1)erred, in [35] - [40] of his reasons, in adopting the report and in denying the appellant procedural fairness in excluding relevant and admissible evidence within the scope of the orders made by Chaney J; and

   (2)failed to address comprehensive submissions made by Mary, failed to give adequate reasons and denied Mary procedural fairness in limiting written submissions to 20 pages, and in not allowing sufficient time for oral argument, on objections to adopting the registrar's report.

2. In substance, the complaint in (1) is of the wrongful exclusion of admissible evidence.  To state the obvious, a wrongful exclusion of admissible evidence is not thereby a breach of the requirements of procedural fairness.

3. Three distinct complaints are made in (2): (i) failure to address Mary's submissions; (ii) failure to give adequate reasons; and (iii) a breach of procedural fairness by limiting written and oral submissions.

Appellant's submissions

1. Regrettably, the conceptual confusion in the framing of ground 10 infects Mary's diffuse submissions in support of the ground.

2. Mary submits that the judge should have ruled as admissible (i) 'almost all' of the 'Barrington report', prepared by Mr Napoli, which was admitted at trial, (ii) the expert report of Ms Muriel Oliver and (iii) the accounts prepared by Mary containing profit and loss statements, balance sheets with partner capital accounts, and explanatory notes for each of the partnerships.[114]

   [114] Appellant's submissions [69] - [78].

3. Mary argues that the judge erred in not referring to or addressing substantial parts of the accounts and submissions prepared by her in respect of the various projects, including her schedules of evidence dated 23 September 2019 and 2 October 2019 and her submissions dated 2 December 2019.[115]

   [115] Appellant's submissions [78] - [82].

4. Mary submits that she was denied procedural fairness by the primary judge, arising from (i) the limit on the length of written submissions of 20 pages and (ii) counsel for Mary expecting that the hearing on 14 May 2020 was a directions hearing, not a hearing of the merits of the application, and therefore was not given an adequate opportunity to raise and argue objections to the adoption of the report.[116]

   [116] Appellant's submissions [67], [83]; appeal ts 88 - 90.

5. The remainder of the written submissions in support of ground 10 go beyond the ambit of the ground, even when it is given the generously expansive ambit referred to in [183] - [184] above.

Disposition

1. Mary did not demonstrate to the primary judge, and has not established in this court, error of the relevant kind by the registrar in the manner in which the registrar dealt with the question of whether the Barrington report was admissible on the taking of the account: see [65] ‑ [70] of the registrar's report.  The same is true of the registrar's rejection of Mary's preparation of her own competing version of the accounts prepared by Frank and Andrea, as to which see [40] above.  The registrar correctly found that Mary's proposed evidence was inconsistent with the role of the other party in an account in common form, being apt for an account on the basis of wilful default.

2. The affidavit and expert report of Ms Oliver was ruled inadmissible by the registrar in her preliminary ruling delivered on 18 July 2019.[117]  In short, the registrar found that the proposed evidence did not reflect, and sought to contradict, the effect of Chaney J's orders, which required an account in common form.  Mary has not demonstrated error in the registrar's decision not to admit Ms Oliver's evidence. 

   [117] See interlocutory reasons [29] ‑ [35].

3. There is no merit in Mary's complaints summarised in [187] and [188] above.  Both complaints are founded on Mary's failure to appreciate the scope of the questions for determination by the primary judge.  The judge's task, in accordance with the principles his Honour accurately distilled as summarised in [51] above, was to discern whether error of a kind sufficient to justify rejection of the registrar's report had been demonstrated.  Mary's submission that the judge erred in failing to have regard to her 125‑page submissions made to the registrar overlooks the basic point that it was not for his Honour to redo the taking of the account.  The limits on written and oral submissions imposed by the primary judge were both appropriate and necessary.  They were appropriate because, as so limited, the parties had ample opportunity to make their submissions on the salient matters.  The limits were necessary because, regrettably, it was apparent from the conduct of proceedings to that point that there was a real prospect of those representing Mary making submissions that misunderstood the scope of what was relevant and which would have been of a length that was inconsistent with the efficient and proportionate administration of justice.

4. Further, Mary's counsel did not object to the order directing that submissions be limited to 20 pages.  On 2 April 2020, before making directions for the filing of submissions limited to 20 pages, the judge foreshadowed orders to that effect and asked Mary's counsel whether there was any objection to such orders, to which counsel replied that there was no objection.[118] 

   [118] ts (2.04.20) 842.

1. Also, Mary's submissions summarised in [188] are founded on a factual assertion that must be rejected.  Consideration of the record demonstrates that, contrary to counsel's assertions to this court - which were unsupported by evidence -  at the hearing of 14 May 2020, Mary's then counsel did not expect that the hearing was a directions hearing rather than a hearing of the merits of the application.  Apart from anything else, immediately after the taking of appearances and without the judge having said anything, Mary's counsel opened by saying that Mary relied on her written submissions.[119]  Thereafter counsel proceeded to develop those submissions.  It is thus plain that, without any indication from the court, counsel for Mary commenced the hearing with the expectation that the hearing would, as it did, deal with the merits of the question of whether the registrar's report should be adopted.

   [119] ts (14.05.20) 846.

2. The fact that the matter was listed as a directions hearing is not inconsistent with that, bearing in mind the interlocutory nature of the question of whether a referee's report should be adopted.  Moreover, that is evidently how Mary's counsel understood the position as, at a hearing on 20 March 2020, counsel said that once the competing minutes were received, the matter could be listed for an appropriate directions date 'where the matters could be heard, aired, contested or whatever'.[120]

   [120] ts (20.03.20) 826.

3. For these reasons, ground 10 is without merit.

Ground 11

1. Ground 11 contends that the primary judge erred in law, in [31] and [40] of his reasons, in adopting the taking of accounts for 78 Edgecumbe Street and 167 & 167A Lockhart Street in the following three respects:

   (a)in allowing the claims for additional interest and enforcement costs arising from the default judgment, being items 101 and 220, to be brought to account against Mary, when there is no judgment against her;

   (b)by not bringing into account as a liability to the partnership, on the part of Frank and Andrea, money received by Frank and Andrea which exceeded their entitlements and was unaccounted for by them; and

   (c)in allowing the addition of interest and enforcement costs in the orders of the primary judge dated 15 May 2020, because of the matters raised above in (b), and in failing to give reasons for so doing.

Appellant's submissions

1. Mary submits that the primary judge erred in law in allowing items 101 and 220 because the registrar's finding that all parties are liable for the interest and enforcement costs in respect of the loans is 'perverse'.  This is so, Mary submits, because in another item Frank and Andrea brought to account the discharge of the bank loan, although the loan was not discharged.[121]

   [121] Appellant's submissions [92].

2. Mary argues that the judge further erred by bringing into account the additional interest and enforcement costs merely on the basis of default judgment being obtained by the bank against Frank, Andrea and Chan.  Mary argues that the amount owing to the bank could, and should, have been paid out by Frank, Andrea and Chan and that, furthermore, if, as she contends, Frank and Andrea have accepted liability for the payment of the amount, they have failed to discharge the liability.  Mary also asserts that she has a good defence to the claim against her by the bank.

3. Mary further submits that the judge erred in allowing the additional interest and enforcement costs for the two relevant loans, without analysing whether Frank and Andrea had overdrawn partnership cash or assets and were liable to repay the amounts, and failed to give adequate reasons with respect to this issue.

Disposition

1. There is a fundamental disconnect between the error asserted in the ground of appeal and the submissions in support of it. As noted above, ground 11 asserts error by the primary judge in [31] and [40] of the primary reasons. The submissions complain that items 101 and 220 should have been disallowed. Yet, [31] and [40] of the primary reasons do not mention and do not relate to items 101 and 220 or any specific items. Paragraph 31 of the primary reasons rejected Mary's attack on the registrar's general methodology in conducting the account. The judge's conclusion in that regard was unsuccessfully challenged by ground 1 of the appeal to this court. Paragraph 40 of the primary reasons contains general observations that were unsuccessfully challenged by ground 10 of the appeal to this court. Ground 11 does not identify any distinct error by the primary judge. The ground fails accordingly.

2. The failure of the ground to identify error on the part of the primary judge is consistent with the fact that the contentions in ground 11 were not advanced to his Honour.  The reason that Mary could not identify where the judge had erred in relation to these contentions was that they had not been put to him and so his Honour did not deal with them.  Mary's counsel ultimately accepted that this was so.[122]  For the reason in [80] above, that is an additional fatal obstacle to this ground.

   [122] Appeal ts 92.

3. Further and in any event, Mary's complaints under the rubric of ground 11 overlook the terms of order 4(b) of the orders of Chaney J.  In substance, Mary made submissions to the registrar to the same effect as her submissions in support of ground 11.  The registrar rightly rejected Mary's argument, describing it as misconceived.[123]  As the registrar pointed out, the account to be taken was one between Mary and Chan on the one hand and Frank Andrea on the other.  For the purposes of taking the account, Mary and Chan's interests were joint, as stipulated in order 4(b) of the orders of Chaney J. 

   [123] Registrars report [105] - [109).

4. There is no merit in ground 11.

Ground 12

1. In ground 12, Mary contends that the judge erred in law, in [61] ‑ [63] of his reasons, by allowing item 363, when the item was not conceded and when the entitlement to interest was beyond the scope of the orders made by Chaney J.

Submissions

1. Mary submits the registrar's reasons[124] for disallowing item 363 relating to the Matlock Street property - that the evidence did not establish that David had contributed to the purchase and the building costs such that the accounting parties were obliged to account to him for the interest claimed -  were correct.

   [124] Registrar's report [452] - [455].

2. Mary submits that the judge erred in allowing the item by finding that it was conceded by counsel for Mary, when no such concession was made.

3. The respondents submit that the judge was right to find that the point had been conceded before the registrar in the course of the taking of the account, where the following exchange occurred during counsel for Mary's cross-examination of Frank:[125]

   Yes.  Okay.  Yes?---13th deposit, David Lam made a deposit payment in to the account for 33 per cent share of Matlock street. 

   Yes.  Okay.  It was the 13 April, what year?---13 April 2010. 

   Okay.  So that accounts for that payment.  And you've accounted for that in the accounts that you've prepared?---Correct, that's purchase of the property.

   Yes.  Yes, no.  That's fine.  I'm happy - if I can take you next to 12B, it's the proceeds of sale of 250D Ewen Street?---Yes.

Disposition

[125] ts (29.05.19) 597.

1. It may be accepted that this does not involve any express concession by counsel on behalf of Mary.  Nevertheless, in acknowledging that Frank's account in relation to the Matlock Street property was prepared on the basis that David had contributed funds in April 2010 - which was when the property was acquired[126] - and in not challenging Frank's evidence in that regard, in substance Mary accepted in the proceedings before the registrar the fact of David's contribution to the purchase of the property.  The basis for the registrar's rejection of item 363 was therefore removed.  In substance, the registrar failed to understand the true effect of the evidence on this issue.  The judge did not err in declining to adopt the registrar's report as to this item.

   [126] Reasons of Chaney J [39].

2. Ground 12 consequently fails.

Conclusion

1. For the above reasons, none of the grounds of appeal has been established.  The lack of merit in the grounds makes it appropriate to refuse leave to appeal.

2. We would make orders as follows:

   (1)The appellant has leave to amend ground 1 of the appeal and advance the additional submissions in the term of the application and minute filed 1 October 2021.

   (2)Leave to appeal is refused.

   (3)The appeal is dismissed.

3. We would hear from the parties as to the costs of the appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

JR

Research Associate to the Honourable Justice Beech

25 NOVEMBER 2021