Edmonds v Barrington Winstanley Group Pty Ltd

Link copied
Case Copied 68 min read

FEDERAL COURT OF AUSTRALIA

Edmonds v Barrington Winstanley Group Pty Ltd [2024] FCA 821

Appeal from: Edmonds v Barrington Winstanley Group Pty Ltd [2023] FedCFamC2G 785
File number(s): NSD 1075 of 2023
Judgment of: PERRY J
Date of judgment: 26 July 2024
Catchwords:

PRACTICE AND PROCEDURE – application to disqualify the respondent’s legal representatives – summary of legal principles – appellants’ evidence inadmissible on the basis they contain bare assertions of a scandalous nature – application dismissed

PRACTICE AND PROCEDURE – application for leave to amend the notice of appeal – appellants’ submission that the amended notice raises the same issues as the original notice of appeal – prejudice to the respondent if application granted due to late filing of the application to amend – no adequate explanation given for lateness of the application – application dismissed

PRACTICE AND PROCEDURE – application to lead fresh evidence on appeal – failure to provide adequate explanation as to why the evidence could not have been, with reasonable diligence, produced prior to the trail before the primary judge – evidence not of the nature that it would have very probably resulted in a different outcome before the trial judge – evidence would blur the distinction between original and appellate jurisdiction – application dismissed

BANKRUPTCY – bankruptcy notice issued in respect of a judgment debt arising from a proceeding in the Supreme Court of New South Wales, affirmed on appeal by the NSW Court of Appeal – proceeding before the primary judge seeking to set aside the bankruptcy notice – no error by the primary judge in not accepting that the appellants could not have set up the counterclaims, set offs and/or cross demands in the Supreme Court as required by s 40(1)(g) of the Bankruptcy Act 1966 (Cth) – no error by the primary judge in declining to go behind the judgments of the Supreme Court and the Court of Appeal – appeal dismissed

Legislation:

Australian Securities and Industries Commission Act 2002 (Cth)

Bankruptcy Act 1966 (Cth) ss 40(1)(g), s 41(5)

Corporations Act 2001 (Cth)

Federal Court of Australia Act 1976 (Cth) ss 27, 37M, 37N

National Consumer Credit Protection Act 2009 (Cth) ss 5, 6, 29, 180(3), Schedule 1 cls 4, 5, 8

Australian Consumer Law ss 18-22

Federal Court Rules 2011 (Cth) rule 36.11

Farm Debt Mediation Act 1994 (NSW)

Real Property Act 1900 (NSW) s 74P

Court Procedures Rules 2006 (ACT)

Legal Profession Uniform Australian Solicitors’ Conduct Rules rule 32.1
Cases cited:

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175

Barrington Winstanley Group Pty Ltd v Edmonds [2022] NSWSC 531

Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261

CKT20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 124; (2022) 294 FCR 318

Edmonds v Barrington Winstanley Group Pty Ltd [2023] FedCFamC2G 785

Edmonds v Barrington Winstanley Group Pty Ltd [2023] NSWCA 166

El-Cheikh v Miraki [2017]…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Edmonds v Barrington Winstanley Group Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2024] FCA 821
Decision Date

CaseChat Overview and Summary

Edmonds v Barrington Winstanley Group Pty Ltd is a case before the Court of Appeal where the appellants, Ms and Mr Edmonds, sought to appeal against a decision from the Supreme Court of New South Wales and its subsequent affirmation by the NSW Court of Appeal. The central dispute involves a financial arrangement between BWG, DSJSE Pty Ltd, and the appellants, with the appellants acting as guarantors for DSJSE’s obligations. The primary issue before the Court of Appeal was whether the appellants could introduce new grounds of appeal that were not previously raised before the primary judge. The Court of Appeal had to determine whether these new claims, which included allegations of breaches of fiduciary duty, breaches of the National Consumer Credit Protection Act, and various other statutory and common law claims, could be considered on appeal.

The Court of Appeal found that the new grounds of appeal could not be considered as they were not raised before the primary judge. The Court held that the appellants had ample opportunity to formulate and present their defences and counterclaims but chose not to do so. Furthermore, the Court rejected the appellants' argument that procedural fairness was denied, stating that the appellants had been adequately served with documents and had legal advice. The Court emphasised the importance of adhering to the principles of case management and the distinction between original and appellate jurisdiction, concluding that allowing new grounds of appeal would undermine these principles.

In dismissing the appeal, the Court of Appeal highlighted that the appellants had not demonstrated exceptional circumstances that would warrant permitting new claims on appeal. The Court also noted that the failure to raise these claims before the primary judge was not due to any procedural unfairness. The appeal was dismissed, and costs were reserved for later determination. The Court further noted that the parties should endeavour to agree on a timetable for any subsequent applications regarding costs, with a relisting for case management if an agreement could not be reached.

Orders

Orders of the court

1. The appeal is dismissed.

2. Costs are reserved.

3. There be liberty to apply.

THE COURT NOTES THAT:

4. The parties are to endeavour to agree a timetable for the filing of any application as to costs, together with any associated steps.

5. In the absence of agreement as to the appropriate timetabling orders, the matter will be relisted for case management.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons set out below, neither contention is established, and the appeal must therefore be dismissed.2. BACKGROUND2.1 The origins of the dispute BWG relevantly conducts business as a finance broker. On 3 November 2017, BWG, DSJSE Pty Ltd (as borrower) and the appellants (as guarantors of DSJSE’s obligations) executed an Exclusive Mandate and Fee Agreement by which DSJSE retained BWG to obtain finance for it. Also on 3 November 2017, Ms Edmonds (the first appellant) executed a Letter of Offer provided by In Base Investments Pty Ltd for a loan in the amount of $3,840,000 for a term of 3 months. That loan did not proceed. From time to time after 3 November 2017, BWG presented further possible offers to DSJSE. However, it is not in dispute that no funds were ultimately advanced. On 27 April 2018, DSJSE and the appellants executed a Deed of Acknowledgment of Debt. In addition to referring to the Agreement and the Letter of Offer, the recitals to the Deed explain that:(1)BWG lodged a caveat over various properties in December 2017 following DSJSE’s failure to make payment of the Service Fee under the Agreement;(2)on or around 5 April 2018, BWG was served with a notice to caveator of proposed lapsing of the caveat over the properties;(3)on 11 April 2018, the appellant’s then legal representatives confirmed their instructions to withdraw the lapsing notice; and(4)DSJSE and the appellants acknowledged their respective obligations under the Agreement including repayment of the Service Fee. As I explain below, the caveat was ultimately removed on 10 November 2022 after the decision by Darke J and before the decision of the Court of Appeal. Various proceedings arose following these transactions which I summarise below.2.2 Supreme Court proceedings By a Statement of Claim filed on 22 April 2021 in the Supreme Court, BWG sought a monetary judgment against various defendants, including the appellants (Ms and Mr Edmonds) and DSJSE (which later went into liquidation). Specifically, BWG sued on the Deed and, in the alternative, on the Agreement for a fixed sum plus interest and to enforce the securities which it alleged were created by the Agreement. On 4 May 2022, Darke J handed down judgment in that proceeding: Barrington Winstanley Group Pty Ltd v Edmonds [2022] NSWSC 531 (SC Judgment). Justice Darke found that BWG had not established that monies were owed under the Agreement because the conditions for payment under the Agreement (relevantly, BWG obtaining a loan offer within the ambit of specified instructions in Schedule A to the Agreement) were not met: SC Judgment at [77]–[81]. BWG was therefore also unsuccessful in enforcing securities allegedly created by the Agreement: SC Judgment at [81]–[88]. However, BWG’s claim under the Deed was upheld with the result that judgment should be entered for BWG against Mr and Ms Edmonds for $240,520 plus interest at the agreed rate, being 2.5% per month: SC Judgment at [73]–[76]. On 20 May 2022, orders were made by the Supreme Court including that judgment be entered for BWG in those proceedings against the appellants in the sum of $801,116.89 (including interest) (Judgment Debt).

Evidence

Evidence Before The Court

In those circumstances and given the proximity of the hearing of the appeal, I considered that the appeal should proceed on the basis of the notice of appeal as originally filed and that the application for leave to amend should be dismissed. In my view, this result best promoted the overarching objective in s 37M of the FCA Act and accords with the modern approach to case management explained in Aon Risk, and the subsequent decisions to which I have referred. Accordingly, orders were made in those terms at the hearing. I note however, that this did not involve any concession by the respondent that all of the issues raised by the grounds of appeal in the original notice of appeal had been litigated at first instance.3.4 Application to lead fresh evidence on appeal3.4.1Relevant principles Section 27 of the FCA Act provides that “[i]n an appeal, the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact and, in its discretion, to receive further evidence”. Importantly, however, the power to adduce fresh evidence on an appeal “should not be construed in such a way as to obliterate the distinction between original and appellate jurisdiction”: Frigger v Trenfield (No 3) [2023] FCAFC 49 at [152]. The principles guiding the consideration of applications to adduce further evidence on appeal are well-settled and were not in issue. These are conveniently summarised in Northern Land Council v Quall (No 3) [2021] FCAFC 2 at [16] by Griffiths and White JJ as follows:(1)The discretion conferred by s 27 is unfettered, save that it must be exercised judicially and according to principle.(2)The power to receive further evidence is remedial and its primary purpose is to empower the Court to receive further evidence to ensure that proceedings do not miscarry.(3)The power is not constrained by common law rules that govern the grant of new trials on the ground of discovery of “fresh evidence”.(4)The following two considerations will normally be relevant to the exercise of the discretion:(i)the further evidence is such that, had it been adduced at trial, the result would very probably have been different; and(ii)the party seeking to adduce the evidence demonstrates that it was unaware of the evidence and could not have been, with reasonable diligence, made aware of the evidence;(5)The interests of third parties and the public at large may outweigh a party's interest in the finality of litigation …(Emphasis added.) This summary was quoted recently with approval by the Full Court in Veale v Coleman [2024] FCAFC 83 at [7]: see also, eg, CKT20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 124; (2022) 294 FCR 318 at [32]–[34] and Frigger at [152]. In addition, as the Full Court explained in CKT20 at [34], the power in s 27 of the FCA Act:is one of the civil practice and procedure provisions covered by s 37M of the FCA Act. Section 37M(3) imposes an obligation on the Court to exercise any such power in the way that best promotes the overarching purposes of those provisions. That purpose is described in s 37M(1) as the facilitation of the just determination of disputes as quickly, efficiently and inexpensively as possible.

Decision

Reasons for decision

On 24 July 2023, the Court of Appeal dismissed Mr and Ms Edmonds’ appeal from the SC Judgment: Edmonds v Barrington Winstanley Group Pty Ltd [2023] NSWCA 166 (CA Judgment). Relevantly, by the notice of appeal in the Court of Appeal, the appellants sought leave to rely upon a number of claims despite not raising them before Darke J, including a claim under the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act). As Stern JA (with Meagher JA and Leeming JA agreeing at [1] and [2] respectively) explained at [25]–[26]:Some further grounds in the NOA were relied upon in the appellants’ written, but not oral, submissions. These were characterised in the appellants’ submissions in reply as “defences, counterclaims and appeal grounds” that would have been advanced by the appellants “but for said setbacks, systemic access unavailability of Mrs Edmonds, and failures to accord due process”. These included grounds based upon claims of breach of fiduciary duty, breaches of the National Consumer Credit Protection Act 2009 (Cth), misleading or deceptive and unconscionable conduct both at common law and under statute, claims of common law fraud and reliance upon the second limb of Barnes v Addy (grounds 5(f)-(g), 6, 9, 10, 14-16) (“Further Grounds”). I also include within this category of “Further Grounds” the submissions advanced by the appellants in writing that the Deed was liable to be set aside for unilateral or common mistake and that there was a defence available to the appellants under s 12DMA of the Australian Securities and Investments Commission Act 2001 (Cth).These were not matters that were raised before the primary judge. They were not pleaded, either by way of defence or cross-claim, nor were they relied upon in submissions before the primary judge. In those circumstances and there being no exceptional circumstances, the Court of Appeal held (at [27]–[28]) that the new grounds could not be relied upon on the appeal (applying University of Wollongong v Metwally [1985] HCA 28; (1985) 59 ALJR 481 at 483). Nor did the Court of Appeal accept the appellants’ submission that the failure to advance these claims before Darke J was due to any denial of procedural fairness: CA Judgment at [28]. Specifically, Stern JA held (at [89]) that:Having regard to the matters set out above, the appellants had a reasonable opportunity, over the course of the proceedings, to formulate such defences or counter claims as they wished to rely upon. Over that period, they had some legal advice and otherwise themselves, in particular through Mrs Edmonds, gave close attention to the matters alleged in the claim and how best to respond to them. They were sufficiently aware of the provisions of the [Farm Debt Mediation Act 1994 (NSW) (FDM Act)] and its ambit of application to rely upon the FDM Act in other proceedings. They were appropriately served with the court documents and evidence relied upon by the respondent. They were advised as to further matters that they could potentially rely upon by Mr Edwards apparently between 5 and 18 April 2022 but did not seek to amend their Defence to rely upon such matters. Further, the hearing was fixed in September 2021 by reference to Mr Edwards’ availability. There was no explanation as to why, in these circumstances, attempts were not made to secure the attendance of Mr Edwards, or another legal representative, at the hearing until 8 April 2022. There was no denial of procedural fairness.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.