Culleton v Dakin Farms Pty Ltd
[2015] WASCA 183
•8 SEPTEMBER 2015
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: CULLETON -v- DAKIN FARMS PTY LTD [2015] WASCA 183
CORAM: MARTIN CJ
NEWNES JA
MURPHY JA
HEARD: 11 MAY 2015
DELIVERED : 8 SEPTEMBER 2015
FILE NO/S: CACV 130 of 2013
BETWEEN: IOANNA CULLETON
First Appellant
RODNEY NORMAN CULLETON
Second AppellantAND
DAKIN FARMS PTY LTD
First RespondentBALWYN NOMINEES PTY LTD
Second Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :CURTHOYS DCJ
Citation :DAKIN FARMS PTY LTD -v- ELITE GRAINS PTY LTD [No 2] [2013] WADC 160
File No :CIV 2787 of 2011
Catchwords:
Contract for lease and subsequent sale of land - Repudiation by lessee/purchaser - Loss of bargain damages - Owner of land established loss on leasing component of transaction - Allegation by repudiating party that owner only entitled to nominal damages where owner had not negatived the prospect of any benefit arising from the nonperformance of the sale component of the transaction - Owner entitled to substantial damages and not just nominal damages
Legislation:
Nil
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
First Appellant : Mr T O Coyle
Second Appellant : No appearance
First Respondent : Mr G M Abbott & Mr C P K Russell
Second Respondent : Mr G M Abbott & Mr C P K Russell
Solicitors:
First Appellant : Lavan Legal
Second Appellant : No appearance
First Respondent : King & Wood Mallesons
Second Respondent : King & Wood Mallesons
Case(s) referred to in judgment(s):
Baume v Commonwealth [1906] HCA 92; (1906) 4 CLR 97
Dakin Farms Pty Ltd v Elite Grains Pty Ltd [No 2] [2013] WADC 160
IDI Enterprises Pty Ltd v Classified Transport Pty Ltd [2011] SASCFC 123; (2011) 111 SASR 155
Manwelland Pty Ltd v Dames & Moore Pty Ltd [2001] QCA 436
Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd [2012] WASCA 50; (2012) 43 WAR 91
TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1936] HCA 57; (1963) 180 CLR 130
The Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
The Mediana [1900] AC 113
MARTIN CJ: This appeal should be dismissed for the reasons given by Murphy JA, with which I agree.
NEWNES JA: I agree with Murphy JA.
MURPHY JA:
Introduction
This is an appeal against a decision of the primary judge in which his Honour upheld certain claims by the second respondent, Balwyn Nominees Pty Ltd (Balwyn), against the appellants (the Culletons).[1] Balwyn had claimed damages arising out of the alleged repudiation by the Culletons of an agreement dated 16 December 2009 in relation to the lease and sale of certain farm land from Balwyn to the Culletons. The primary judge awarded damages to Balwyn in the sum of $205,536.50.
[1] Dakin Farms Pty Ltd v Elite Grains Pty Ltd [No 2] [2013] WADC 160.
After filing the notice of appeal, the second appellant (Mr Culleton) became bankrupt. The first appellant (Mrs Culleton) appeared by counsel at the hearing of the appeal. Mr Culleton was not represented at the hearing of the appeal, but counsel for Mrs Culleton informed the court that Mr Culleton was in court for the hearing of the appeal.[2] The effect of Mr Culleton's bankruptcy on the appeal is addressed at the end of these reasons.
[2] Appeal ts 85.
Background and the properties
At all material times, Mr Lester was a director of two companies, Balwyn and Dakin Farms Pty Ltd (Dakin). Balwyn owned a large area of farming land just outside of Williams in Western Australia.[3] Dakin carried out a farming operation on the land, including the growing of oats.[4]
[3] Daikin [No 2] [2].
[4] Daikin [No 2] [3].
Mr Culleton was a director of Elite Grains Pty Ltd (Elite).[5] Elite bought and sold grains, including oats. Elite mixed the grains it purchased and sold it for horse feed.[6] The Culletons owned a farm near
Balwyn's farming property known as 'Rathgar'.[7] The Culletons wished to acquire some more land to expand their farming operations to produce more oats. They became aware that Rathgar was for sale and decided to buy it.[8] (There appears to be an error at [9] of the primary judge's decision where the lessor and vendor is described as Dakin.)
[5] Daikin [No 2] [7].
[6] Daikin [No 2] [5].
[7] Daikin [No 2] [8].
[8] Daikin [No 2] [9].
The Culletons sought to finance the acquisition of 'Rathgar' by using the funds generated by Elite.[9]
The land
[9] Dakin [No 2] [9].
Balwyn at all material times was the registered proprietor of certain land in the district of Williams in Western Australia. The land included land known as:
(a)Rathgar;
(b)Low Waters;
(c)Wilga Mia;
(d)Janjanning; and
(e)Fitts Creek.[10]
[10] Lester statement, exhibit A, GB 4 ‑ 7.
The land at Rathgar, Low Waters, Wilga Mia and Janjanning (often in the primary judgment collectively described as 'Rathgar') was situate on the northern side of Williams and Narrogin Highway.
The land in Fitts Creek was situate on the southern side. It was spread over nine paddocks, and there were nine certificates of title in respect of the Fitts Creek land.[11] A number of those paddocks had been sown with canola in 2009. Those paddocks were known as Bannister, Middle, Power Line, Cowchers, Soak and Big Dam.[12]
The agreement
[11] Lester responsive statement, exhibit B, par 38, GB 40.
[12] Lester responsive statement, exhibit B, par 38, GB 40 ‑ 41.
The Culletons entered into an agreement (in writing) with Balwyn on 16 December 2009.[13] In general terms, the Culletons agreed to lease from Balwyn an area of Rathgar (again, strictly speaking, Rathgar, Low Waters, Wilga Mia and Janjanning) on the north side of Williams and Narrogin Highway, and part of the Fitts Creek land on the southern side.[14]
[13] Dakin [No 2] [42].
[14] Daikin [No 2] [43].
The lease was for a fixed term of one year commencing on 1 March 2010 and ending on 28 February 2011. The total rent was $500,000 excluding GST, payable by quarterly instalments of $125,000 plus GST.[15]
[15] Dakin [No 2] [43].
The Culletons also agreed (by the same instrument) to purchase the majority of Rathgar (strictly speaking, Rathgar, Low Waters, Wilga Mia and Janjanning). The purchase price was $13.2 million. The sum of $6.5 million was to be paid on 28 February 2011 (in relation to Low Waters and Wilga Mia). The balance of the purchase price of $6.7 million was to be paid on 28 February 2012 (in relation to Rathgar and Janjanning).[16]
Events of March/April 2010
[16] Dakin [No 2] [44].
The first rental instalment of $125,000 was due on 1 March 2010.[17] Mr Culleton informed Mr Lester that he was having cash flow problems.[18] It was agreed that the first payment would be made in instalments of $67,500. The first payment of $67,500 was made by the Culletons on 1 March 2010 and they then went into possession.[19]
[17] Dakin [No 2] [56].
[18] Dakin [No 2] [57].
[19] Dakin [No 2] [58].
On 15 March 2010, the Culletons met with Mr Lester, and Mr Culleton delivered a letter to Mr Lester. The judge concluded that the letter and the statements made by Mr Culleton on 15 March 2010 constituted a repudiation of the written agreement.[20]
[20] Dakin [No 2] [98].
The primary judge also found that on 16 March 2010, Balwyn accepted the Culletons' renunciation of the agreement, and effected a termination of the agreement.[21]
[21] Dakin [No 2] [100], [120].
As to damages for the renunciation, Balwyn sought damages of $205,536.50 for:
(a)the balance of rent for the remainder of the lease (said to be $482,500) less rent received from reletting the property (said to be $301,779.50); and
(b)a reletting fee of $24,816.[22]
[22] Dakin [No 2] [114].
The Culletons did not dispute this calculation. However, they argued that since the lease was an 'inextricable part of the lease and purchase agreement', the 'carving out of the lease in the manner put forward by Balwyn' was not 'conceptually correct'.[23]
[23] Dakin [No 2] [15].
The primary judge accepted that the lease and purchase terms were interconnected, but his Honour effectively held that since the entire agreement had been renounced by the Culletons, and since there was no evidence of any benefits accruing to Balwyn from the renunciation of the agreement, it was appropriate to calculate Balwyn's loss by reference to the loss of lease income and related losses.[24]
[24] Dakin [No 2] [120].
In this regard, and contrary to Balwyn's assertions in this appeal,[25] on a proper construction of the judge's reasons,[26] his Honour found that the agreement as a whole dated 16 December 2009 was terminated, not just that part of it concerning an agreement to lease. The specific finding at [111], that his Honour accepted that the Culletons had terminated 'the lease', is not inconsistent with that broader finding.
[25] Respondents' submissions par 4(4), WB 26.
[26] Dakin [No 2] [120] read with [72], [100], [101], [105].
The terms of the agreement
The relevant terms of the written agreement were as follows:
Agreement to Lease and Purchase
Rathgar - Williams, WA 16 December 2010
1.Rodney and Ioanna Culleton have agreed to take a lease of Rathgar (total property on north side of Williams and Narrogin Highway) excluding [certain identified property, including 'Proposed Lot 2']:
...
but include six paddocks of Canola stubble (2009 crop) at Fitts Creek on south side of Williams Narrogin Highway, for one year commencing on 1 March 2010 and ending on 28 February 2011 at a clear rental excluding GST of $500,000 payable quarterly in advance.
1.2This lease to include the Wilga Mia house …
1.3Summary of lease area:
Rathgar - excluding Bush area and proposed Lot 2
Wilga Mia
Janjanning
Low WatersFitts Creek paddocks [Bannister, Middle, Power line, Cowchers, Soak, Big Dam]
1.4Rental is $68.40 per acre …
1.5Rental Payments:
1 March 2010 $125,000 plus GST
1 June 2010 $125,000 plus GST
1 September 2010 $125,000 plus GST
1 December 2010 $125,000 plus GST
2.Rodney and Ioanna Culleton have agreed to purchase Rathgar (north side of Narrogin Williams Highway only) including:
2.1.1Proposed Lot 2 …
2.1.2… bush area
2.2For a total purchase price of $13.2 million cash as follows:
2.2.1For settlement on 28 February 2011 - $6.5 million, when Low Waters and Wilga Mia will be transferred to the Culletons; and
2.2.2On 28 February 2012 - $6.7 million, when the balance of the property being:
- Rathgar …
- Janjanning
will be transferred.
2.2.3Interest to apply on the new remaining $6.7 million, or such lesser amount, at the rate of $68.40 per title acre (equivalent to farm lease rental) for period from 1 March 2011 to final settlement, payable quarterly in advance.
2.2.4The settlement of Wilga Mia and Low Waters and the payment of $6.5 million on 28 February 2011 is very important.
2.2.5In the event that Rodney and Ioanna have difficulty in meeting the settlement proceeds of $6.5 million on 28 February 2011 and $6.7 million on 28 February 2012, the parties have agreed:
(a)To exercise their best endeavours.
(b)To be just and faithful to one another.
(c)To negotiate in good faith.
(d)To agree to pay and receive the maximum amount that Rodney and Ioanna can manage on that date - minimum of Half the Amount Due - with any balance remaining immediately increasing by 10%. (Capital balance remaining increases by 10%).
2.2.6In the event that the above arrangements are interrupted by unforeseen events (equine influenza, palatability issues, etc), the parties agree to work together to find a solution in order to continue these sale and purchase arrangements.
2.2.7Interest to apply on the remaining balance at the same pro‑rata rate equivalent to $68.40 per title acre for the balance of the land remaining unsettled.
2.2.8In any event, the whole of the balance is due and payable as soon as possible after 28 February 2012 and in any event, not later than 28 February 2013.
2.2.9It is agreed that 'what Dick and Rodney and Ioanna have agreed to do is to sell and purchase the whole property' (north side of Williams/Narrogin Highway only) and it is agreed that the settlement and transfer of Low Waters and Wilga Mia will be followed by the settlement of Rathgar … and Janjanning and that no part of this Agreement provides for the settlement of Low Waters and Wilga Mia unless it is followed by the payment of the whole balance of the agreed price of $13.2 million (adjusted as provided) and the transfer of the whole of the balance of the land.
2.3The parties should target to enter into a formal and unconditional Offer and Acceptance to complete this Sale and Purchase in August 2010 when Rodney and Ioanna Culleton will have about nine months trading of the Auskeg/Elite Grains/Ingham enterprise in the Eastern States and Rodney's bankers may be more ready to support this transaction.
Ground of appeal and appellants' arguments
The Culletons' ground of appeal contained only one ground in the following terms:
1.The learned trial judge should have dismissed [Balwyn's] claim for an award of loss of bargain damages and should have instead held that [Balwyn] was entitled to nominal damages only having regard to the following:
1.1The assessment of such damages required [Balwyn] to prove by admissible evidence the overall net loss suffered by its consequent upon the termination of the Lease and Purchase Agreement;
1.2In addition to the leasing component, the Lease and Purchase Agreement obliged [Balwyn] to convey farming property to the [Culletons] for a total price of $13.2 million;
1.3No evidence was adduced by [Balwyn] as to whether the conveying of the farming property for the agreed price would have constituted a benefit or loss to it, and absent such evidence, [Balwyn] did not prove and was not entitled to any award of loss of bargain damages.
Counsel for Mrs Culleton said[27] that the fundamental contention was that absent evidence as to the amount of any loss or benefit that would have accrued to Balwyn from its sale of the farming property for $13.2 million, Balwyn did not establish an entitlement to an award of loss of bargain damages, and was entitled to nothing more than nominal damages. Counsel contended that this conclusion followed simply from the fact that the agreement contained a sale component, as well as the leasing component. Alternatively, he submitted that the conclusion, in any event, followed from the nature and extent of the interconnectedness between the sale and leasing components.[28]
[27] Appellants' outline of submissions, par 1, WB 6.
[28] Appellants' outline of submissions, par 42, WB 17.
In substance, the argument was that unless Balwyn led evidence to establish that the value of the land at the contractual time for settlement was no greater than the contractual purchase price for the land, then Balwyn could not recover more than nominal damages for the Culletons' repudiation of the agreement.[29]
[29] Appeal ts 108.
Counsel for Mrs Culleton referred to the well‑known principle that where a party sustains a loss by reason of a breach of contract, that party is to be placed in the same position, with respect to damages, as it would have been had the contract been performed.[30] The corollary is that the plaintiff is not entitled, by way of damages, to be placed in a superior position than it would have been had the contract been performed.[31] Counsel placed particular reliance on Manwelland Pty Ltd v Dames & Moore Pty Ltd[32] and TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd.[33]
[30] The Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64, 80.
[31] Amann (82).
[32] Manwelland Pty Ltd v Dames & Moore Pty Ltd [2001] QCA 436.
[33] TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1936] HCA 57; (1963) 180 CLR 130.
Mrs Culleton applied to amend the grounds of appeal but, as explained below, the application was dismissed.
The first appellant's application to amend
Mrs Culleton applied to amend the ground of appeal by adding an additional ground to the effect that the agreement dated 16 December 2009 was void for uncertainty on the basis that the sales component was uncertain and unenforceable and, in consequence, the whole of the agreement was uncertain and unenforceable. It was submitted, in effect, that the proposed amendment was merely responsive to Balwyn's notice of contention (discussed below) insofar as it alleged that the sale agreement component of the agreement was void for uncertainty.
Balwyn resisted the application to amend on the basis that the proposed amendment raised a point which had not been raised below and which was fundamentally inconsistent with the way that the Culletons had pleaded their case below and with the way that the parties had conducted the trial. Balwyn said that had it been alleged by the Culletons in the primary court that the written agreement as a whole was void for uncertainty, it may have sought to rely on other parol evidence, and the doctrine of part performance, to prove an enforceable agreement to lease for less than three years, as contemplated by s 35(2) of the Property Law Act 1969 (WA).
The principles to be applied where a party seeks to raise a new point on appeal are well known. They were discussed relatively recently by this court in Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd.[34] On the application of those principles, this was not a 'very exceptional' case.[35] The point, had it been raised below, might have resulted in additional or different evidence being led to prove a lease enforceable in equity for less than three years.[36] Accordingly, the court dismissed the application to amend.
[34] Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd [2012] WASCA 50; (2012) 43 WAR 91 [48] ‑ [54].
[35] Rizhao [52].
[36] Rizhao [50].
Notice of contention
The respondents, by notice of contention, alleged, in effect, that:[37]
•the 'lease agreement' and the 'agreement for the sale of land' were, in substance, entirely separate agreements, alternatively were severable, and only the 'lease agreement' was terminated;
•the 'sale agreement' was void for uncertainty and severable from the 'lease agreement', alternatively the 'sale agreement' was conditional upon the Culletons obtaining finance.
[37] Paragraph 1, WB 49.
Disposition
The ground of appeal assumes that the provisions of cl 2 of the agreement, dealing with the sale of the land, were sufficiently certain to be binding, and that the lease component of the agreement, and the sale and purchase component of the agreement, were not, in substance, separate agreements or severable. The following observations proceed on those assumptions.
It is unlikely that the parties objectively intended that the terms as to the sale and purchase of the land should be performed independently of performance by the parties of the terms regarding the lease. If (as occurred) the Culletons failed to perform their obligations to lease the land, the parties could hardly have intended that Balwyn should remain obliged to hold the land until 28 February 2011, and then be ready and willing to sell the land to the Culletons. That consideration has particular force where the parties evidently envisaged that Balwyn may not receive the full purchase price on the date specified for completion of the sale. It is equally unlikely, in the circumstances, that objectively the parties intended that Balwyn could refuse to grant a lease, but still require the Culletons to purchase the land in February 2011. In 2009, the parties were aware that the Culletons wished to acquire more land to expand (through Elite) their farming operation for the production of oats, and that the income generated by Elite in that regard, in addition to its eastern states operations, was to assist in the purchase of the land.[38]
[38] Dakin [No 2] [9]; cl 2.3 of the agreement.
However, obligations need not be dependent for all purposes.[39] The parties could not, objectively, have intended that the performance of the lease obligations, which were expressed to be anterior in time to the sale and purchase component of the agreement, was to be dependent upon the performance of the latter obligations.
[39] Carter JW, Carter's Breach of Contract, (2011) [1-11].
On the assumptions referred to earlier, performance of the obligations with respect to the sale and purchase of the land were dependent upon performance of the obligations with respect to the lease agreement, but the performance of the obligations with respect to the lease agreement were not dependent upon the performance of the obligations with respect to the sale and purchase of the land.
Had the Culletons performed their lease obligations, Balwyn would have had the benefit of the lease until 28 February 2011 and would thereupon be subject to the benefits and obligations created by the sale and purchase component of the agreement under cl 2.
Balwyn proved that it had suffered a loss by the Culletons' renunciation of the agreement by proof that it had lost the agreed rent, less the net amount it was able to recover by reletting. Upon proof of that loss, it had established a prima facie entitlement to substantial damages, and not merely nominal damages.
In Baume v Commonwealth,[40] Griffith CJ referred to Lord Halsbury's statement in The Mediana,[41] as to the nature and meaning of nominal damages:
'Nominal damages' is a technical phrase which means that you have negatived anything like real damage, but that you are affirming by your nominal damages that there is an infraction of a legal right which, though it gives you no right to any real damages at all, yet gives you a right to the verdict or judgment because your legal right has been infringed. But the term 'nominal damages' does not mean small damages.
[40] Baume v Commonwealth [1906] HCA 92; (1906) 4 CLR 97, 116.
[41] The Mediana [1900] AC 113, 116.
Having established an entitlement to more than nominal damages, no further onus was on Balwyn to disprove a theoretical proposition, which had no grounding in the evidence, that the Culletons' repudiatory breach had conferred a windfall on Balwyn which equalled or exceeded its proved loss. There was no evidence that if Balwyn recovered the damages for the loss it had proved in respect of the Culletons' repudiatory breach, it would have been placed in a superior position to that in which it would have been had the contract been performed. Not only was there no evidence to that effect, but the parties' arm's length agreement as to the terms of the sale and purchase of the land provides prima facie evidence of the value of the land to Balwyn at the contractual settlement date.[42]
[42] See, for example, IDI Enterprises Pty Ltd v Classified Transport Pty Ltd [2011] SASCFC 123; (2011) 111 SASR 155 [53].
The case of Manwelland relied upon by counsel for Mrs Culleton has no relevance for present purposes. That was a case where reliance damages were claimed by a developer who had acquired certain property for development based on misleading advice concerning the level of industrial contamination of the site. The developer nevertheless proceeded to remediate the property and develop it, including selling parts of it at a profit. It was held that its damages were to be measured by reference not only to the losses resulting from the acquisition of the site, but also to the gains and receipts from its ultimate development.[43]
[43] Manwelland [17].
Nor does the decision in TC Industrial assist Mrs Culleton. In that case a chattel was bought by a purchaser to enable it to fulfil a contract with the Commonwealth. The chattel proved unfit for purpose, and the purchaser sued the vendor of the chattel for damages. It obtained damages in two components. The first represented the expenditure and liabilities it incurred in the course and for the purposes of carrying out its contract with the Commonwealth, less the amounts paid by the Commonwealth. The second component was for a further sum (of £12,000) for the profits it alleged it would have been able to make had it been able to perform its contract with the Commonwealth, and in respect of a further contract which it probably would have obtained from the Commonwealth. There was an issue as to whether the purchaser could claim both for the expenditure it uselessly incurred as a result of the vendor's breach, as well as the loss of profits it would have earned had the chattel been fit for purpose. It was held that the purchaser was entitled to both, but that the purchaser had not adduced sufficient evidence to prove its claim for lost profits. The High Court remitted the assessment of damages to the Supreme Court for further consideration and observed that rather than breaking the assessment of damages into two parts, it may be preferable to work out 'a single calculation, taking the whole of the actual and probable expenditure which the plaintiff would have incurred in performing its contract with the Commonwealth and the probable extension thereof had the [chattel] been of the warranted fitness, and subtracting the resulting figure from the total receipts the plaintiff would have obtained under the contract and the extension'.[44]
[44] TC Industrial (143).
In the present case, Balwyn was entitled to loss of bargain damages. It had established substantial damages in that regard with reference to the Culletons' failure to perform the leasing obligations. There was no evidence that there were any countervailing advantages arising from the loss of bargain, and Balwyn was not seeking to enlarge its damages on account of the Culletons' failure to proceed with the purchase of the land.
For these reasons, ground 1 of the appeal must be dismissed.
It is unnecessary to deal with the specific matters raised by the notice of contention.
Bankruptcy of the second appellant
Following the hearing of the appeal, the solicitors for the respondents filed supplementary submissions concerning the effect on the appeal of the bankruptcy of Mr Culleton.[45] The submissions stated that they were being served on the solicitors for Mrs Culleton, and on Mr Culleton personally. Counsel for Mrs Culleton, in effect, informed the court[46] that the following matters in the respondents' supplementary submissions were not in dispute by Mrs Culleton:
(a)Mr Culleton had been made bankrupt by a sequestration order made on 31 October 2014, and that his subsequent appeal against that order had been dismissed;
(b)by letter dated 4 November 2014, the respondents' solicitors notified Mr Culleton's trustee in bankruptcy of the fact that the appeal was on foot, and requested that the trustee make an election to prosecute or discontinue the appeal in accordance with s 60(2) of the Bankruptcy Act 1966 (Cth);
(c)no election was made by the trustee, and the trustee is deemed to have abandoned the appeal under s 60(3) of the Bankruptcy Act; and
(d)Mr Culleton has not made an application pursuant to s 178 of the Bankruptcy Act to challenge the decision of the trustee in bankruptcy to, in effect, abandon the appeal.
[45] Respondents' supplementary submissions, 18/05/2015.
[46] By letter dated 19 May 2015.
Conclusion
The appeal by Mrs Culleton should be dismissed.
As to Mr Culleton, his appeal is deemed to have been abandoned, and it has, in any event, been shown to have no substantive merit. In proceedings at first instance, the courts have been inclined not to dismiss an action, commenced by a bankrupt, after a deemed abandonment of the action, because a dismissal might in effect extinguish the underlying claim by creating a res judicata.[47] That consideration has no force in determining whether to dismiss an appeal following a deemed abandonment, particularly where (as here) the appeal does not seek to vindicate an underlying cause of action in the bankrupt, and there is no reason why an appeal which is deemed to have been abandoned, should not be dismissed: Savage v Australian Unity Funds Management Ltd.[48]
[47] See, eg, Queensland v Beames [2003] QSC 399 [16].
[48] Savage v Australian Unity Funds Management Ltd [2011] NSWCA 270 [25] ‑ [26]; see also Cole v Challenge Bank Ltd [2002] FCAFC 200 [19], [20], [22].
In the circumstances, the second appellant's appeal should also be dismissed.
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