Evans & Ors v CBFC Limited

[1994] HCATrans 49

IN THE HIGH COURT OF AUSTRALIA

Registry         No C20 of 1993

B e t w e e n -

DONALD COLIN EVANS & MARGARET
  JOAN EVANS

First Applicant

TRESARC PTY LIMITED

Second Applicant

and

CBFC LIMITED

Respondent

Application for special leave
  to appeal

DEANE J
TOOHEY J
GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 12 OCTOBER 1994, AT 2.15 PM

Copyright in the High Court of Australia

MR D. EVANS:   I am the applicant.

MR R.G. FORSTER:   May it please the Court, I appear for the respondent.  (instructed by Abbott Tout)

DEANE J:   Yes, Mr Evans.

MR EVANS:   Your Honours, this matter remains before the High Court as the result of the respondent fundamentally breaching a deed of settlement that would have concluded the litigation between the parties, both in this Court and in several courts.

DEANE J:   Mr Evans, we are not concerned why.  Before us is an application for special leave which we will deal with if you can give the reasons why we should grant leave.

MR EVANS:   Your Honour, with respect to your observations just now, the matter of the special leave to a certain extent has been overtaken by the actus interveniens that I have just referred to of the respondent that has brought about a notice of motion to have orders made to deal with the matters between the parties and to resolve the issues quickly and succinctly.

DEANE J:   Yes, I have seen that, but the only basis on which the matter is before this Court is an application for leave.

MR EVANS:   Yes, Your Honour.

DEANE J:   If that application is refused that will be the end of the matter.  So we will proceed at once to the application for leave.

MR EVANS:   As the Court pleases.  Your Honours, the matters specifically for special leave are at paragraphs 44 to 47 of my summary of argument.  Those arguments are that we were shut out of proceedings at far too early a point in the contest when, having respect for the difficulties and the specificity required to plead fraud, we had taken the course of seeking to bring all the parties who were involved in what we saw as a combination, together in the one forum so that the matters may have been weighed and judged as between the several parties.

TOOHEY J:   I do not quite follow that, Mr Evans.  The application for special leave to appeal is from an order of the Court of Appeal, is it not, an order which dismissed a motion for a stay of a judgment earlier granted which, itself, was the subject of a notice of appeal but that notice was not germane to what the Court of Appeal had to decide in the particular matter with which we are concerned.

MR EVANS:   The appeal essentially relates to who would have possession of the property while the several proceedings continued, and in that guise the judgment against us by Hunt CJ at common law effectively was to end the contest in which we were unable to plead fraud.  However, there were attendant proceedings, No 1354 of 1991, in which the fraud had been pleaded and which was pleaded against the respondent and a third party, can we say was the leader in the fraudulent conduct, and hence it was impossible for us in advance of interlocutory steps to be able to weigh where the blame lay; whether there was innocence on the part of the respondent or whether it was entirely involved in the fraudulent conduct.

Having taken advice of counsel in late 1992 that it was better to allow the proceedings in which the respondent agitated for possession, better to allow those proceedings to go to finality and then bring appeal proceedings in the Court of Appeal so that the interlocutory judgment and the final judgment could both be considered, and if there was an error in the interlocutory judgment it was at that point that it should be corrected, and our application has always been that all parties should be in the one forum and the matters resolved there.

Again we were disabled because of the lack of the specificity of the pleading of fraud in these proceedings from winning acceptance by the Court of Appeal that our case was anything other than hopeless.

TOOHEY J:   Perhaps I am not making myself clear.  You had a judgment against you by Mr Justice Hunt and that was the subject of a notice of appeal which has not been dealt with, and the reasons why do not appear to be relevant to the present application.  But at the same time, you then sought a stay of execution ‑ is that right?

MR EVANS:   Yes, Your Honour.

TOOHEY J:   That was refused by the Court of Appeal and it is against that refusal that you seek special leave to appeal to this Court?

MR EVANS:   Yes, Your Honour.

GAUDRON J:   And that is a discretionary judgment on the part of the Court of Appeal?

MR EVANS:   It is a discretionary judgment, Your Honour, but all discretions must be weighed against the administration of justice.

GAUDRON J:   Except that there are settled rules as to the basis on which discretionary judgments can be attacked in appellate proceedings.

MR EVANS:   The discretionary basis is that the judgment was necessarily obtained by the fraud that infected the contract from the beginning.  The respondent, of course, is seeking specific performance of the contract from the Court, and therefore the fraud that infected it in the first place remains to infect it even though judgment has been given.

TOOHEY J:   The writ of possession which effectively is what was sought to be stayed by this motion was apparently executed back in December 1993, that is about four months before the order of the Court of Appeal.

MR EVANS:   A month after the order of the Court of Appeal, Your Honour. 

TOOHEY J:   Well, is that right?

MR EVANS:   22 November 1993 is ‑ ‑ ‑

TOOHEY J:   Yes, you are quite right.

MR EVANS:    ‑ ‑ ‑ the Court of Appeal refusal, yes, and then we filed the application for leave on 1 December; simultaneously the writ was being executed upon the property.  Now, we had alternatively argued ‑ ‑ ‑

TOOHEY J:   But is it right to say that the writ of possession has, in fact, been executed, and the respondent has taken possession of the property?

MR EVANS:   Yes, Your Honour.

TOOHEY J:   So in a sense, realistically, there is nothing to stay at this stage, is there?

MR EVANS:   The alternative, Your Honour, that we sought before the Chief Justice, was that if the writ had been executed that the operation of it be suspended.  Now, for some reason or another, the suspension alternative was overlooked before the Chief Justice and, it is our submission, that that want may still be cured by the Court today and the second consideration is that the second applicant, the company, which ran the farming operation, remains in possession of the property; the sheep have been grazing, they have been shorn and they are due for another shearing now.

TOOHEY J:   Well, the company there is under a share‑farming arrangement, is it not?

MR EVANS:   The company is there under a share‑farming arrangement, but effectively remains in possession and, Your Honour, it also owns parcels of land that are so integral to the property that the property effectively cannot be sold without their inclusion and hence, when the respondent came before His Honour the Chief Justice and said that the property would be sold, that necessarily had to be tongue-in-cheek, because effectively the property could only be given away because of the way that the company’s land impacts upon the total.

Now, all the indications were that a nil-all draw would effectively be attained, because of this strategic holding, and the parties eventually saw some degree of reason and executed the deed, which effectively puts us back into a - well it is certainly an extremely equitable interest in the property.  We have but to pay $155,000 under the deed by 6 March and they return possession to us.  So effectively there has been an equivocal situation.  The respondent has not exercised right of domain over the property, it has not excluded the sheep, effectively no real change occurred as between the status quo anti the exercise of the writ and post exercise.

Our submission is that from the time that the fraudulent conduct began the respondent was placed in a position of preponderant power in relation to ourselves and since it was thereby way of fraudulent conduct, there was an initial abuse that cannot be corrected save that we entirely waive our rights against the respondent.

We pointed out this to the respondent in correspondence when it began its breaches of the deed, but to no avail.  The respondent continued to abuse its preponderant legal power towards us. 

We say that these proceedings would have been annulled by the filing of consent orders if the respondent had fulfilled the terms of the deed.  In other words, it broke its promise, reneged, and it resumed its abuse of its preponderant power.

GAUDRON J:   You do seem to be straying away from the question of special leave, Mr Evans.

MR EVANS:   I will bring the Court back to the question of special leave by coming to the second point which is the refinance element.

DEANE J:   What you have to face is this:  there was a refusal of a judge at first instance to grant a stay.  The Court of Appeal then refused to grant a stay.  Now, it is only in absolutely exceptional circumstances that this Court would contemplate granting leave to appeal from an interlocutory order of an essentially, discretionary nature of that kind.  You have said nothing to date to show that the refusal of an order for a stay comes in that extraordinary category where this Court is the county’s final appellate court, would contemplate intervening at an interlocutory stage.  That is what you need to address.

MR EVANS:   Thank you, Your Honour.  It is extreme circumstances because the writ that ran from the execution of the deed was but six months.  The resumption of the abuse of the earlier power indicated that the respondent was not going to brook any cure to its power.  Even before the High Court it was saying, “No, it means nothing, we will continue to run against you as we see fit and no one, including the High Court, will dissuade us from that view”. 

The difficulty that both the Court of Appeal and earlier have had is the problem of what to do about the refinance element of the judgment.  Several of the justices have been prepared to give us consideration but come back and say, “Well, there’s this refinance element.  You paid out other people’s mortgages, you must pay that back.”  My submission, Your Honour, is that that is to place a very minor doctrine against the major doctrine that there has been fraudulent conduct and that that fraudulent conduct is evil to the court and must be stayed. 

TOOHEY J:   But you have a notice of appeal against the judgment of Justice Hunt lodged some time back - I suppose lodged before the end of 1993.  Surely, the course then open to you is to bring on that appeal for hearing.

MR EVANS:   It remains in the bowels of ‑ ‑ ‑

TOOHEY J:   Subject now to what has happened following this latest round with which we are not directly concerned.

MR EVANS:   I submit, Your Honour, that you remain concerned because judgment has not been entered against us.

TOOHEY J:   That just leaves you in the position that there was a judgment entered against you back in 1993, execution on which has been carried out.  The Court of Appeal refused an application to stay that execution and you are asking this Court to intervene at this point.

MR EVANS:   Yes, Your Honour, because the abuse is being conducted before this Court, not before any other court.  This Court remains the only court in which proceedings are extant, and it is the ‑ ‑ ‑

DEANE J:   That is not so.  You have got an appeal pending to the Court of Appeal.

MR EVANS:   If the respondent has filed short minutes of consent orders, then that appeal has been terminated and therefore, in coming before this Court, we are seeking orders to set aside ‑ ‑ ‑

DEANE J:   If that was done pursuant to fraud, the Court of Appeal could deal with it.  If it was done pursuant to agreement, that is something the parties have done.  But all this Court has before it is an application for leave to appeal.  I am trying to assist you by pointing out to you that unless you can show good grounds for thinking that the decision of the Court of Appeal refusing a stay was mistaken and bring this case into the exceptional category where this Court would intervene an interlocutory matter, there is really nothing else to be said.

MR EVANS:   Your Honour, the three points that I have sought to make in relation to the special leave application are the shutting out question, the refinance taking an undue prominence in Their Honours’ decision to refuse leave, and the third one is the question of the consequences of fraudulent misrepresentation being voidable, not void.

My succinct statement is that from Lord Hardwicke onwards, there has been no question that the Court will make whatever judgments it sees fit to redistribute rights and duties as between the parties.  A simple notion of “voidable, not void” simply ignores the great weight of authority and power that the Court as an equitable exercise ‑ ‑ ‑

DEANE J:   Mr Evans, the plain fact remains that when money is owed and the debtor loses at first instance, the ordinary situation is that matters will not be stayed pending an appeal.  The rights of appeal remain and if the appeal succeeds, what happens follows.  But we are dealing here with an interlocutory stay as a matter of discretion.  That is what you must direct your attention to.  Since, in an effort to help you, we have interrupted you more than we normally would, I would suggest you disregard the red light for five minutes, if that can be done, and add anything you want

to on that particular question, because that is what you should be concerned with.

MR EVANS:   As Your Honour pleases.  Your Honour, the short answer is that without the abuse of the deed, the proceedings would not be here and I submit that that is sufficiently exceptional that the respondent has chosen to resume its ill conduct, to flaunt the end of the bad relations between the parties and resume.  These proceedings being the only proceedings that are extant, it is open to this Court to exercise its discretion to grant the orders that we have sought, principally to set aside the judgments that have been terminated in the Court of Appeal and in proceedings 1354 which remain on foot against other parties but from which the respondent has been able to escape.

Now, the effect of such an order is that the court is recognising that a further abuse has taken place and, therefore, it is an affront to the court and the court may exercise its discretion to overrule the respondent in its conduct.  Now, since the special leave application remains on foot, one course open to the Court is to suspend the operation of the writ and allow us back into possession so that we can get on with getting the 155,000 and shutting the respondent out.  If we fail to get it then there is no loss.

So it is a fairly simple request that we seek to put before the Court, that the Court exercise its discretion and let us back into possession.  Thank you.

DEANE J:   The Court will take a short adjournment to consider what course it will follow in this matter.

AT 2.40 PM SHORT ADJOURNMENT

UPON RESUMING AT 2.43 PM

DEANE J:   The Court need not trouble you, Mr Forster.

This is an application for special leave to appeal from an order of the New South Wales Court of Appeal refusing to grant a stay of execution, pending an appeal to the Court of Appeal, of an order for possession made by Mr Justice Hunt, the Chief Judge at Common Law.  It is, of course, only in exceptional circumstances that this Court would grant special leave to appeal from a refusal to make such an interlocutory order of an essentially discretionary nature.     The application in this case does not fall within that category.  Indeed, regardless of the ultimate merits of the litigation, there is nothing in the material before us which indicates that the Court of Appeal was in error in refusing a stay in the circumstances. 

Accordingly, special leave to appeal is refused.  That being so, the notice of motion filed in the special leave proceedings necessarily lapses.

MR FORSTER:   I ask for an order for costs, Your Honours.

DEANE J:   Have you anything to say on costs, Mr Evans?

MR EVANS:   Yes, Your Honour.  The matter only comes before the Court in the interests of the administration of justice.  The acts that brought it about were entirely those of the respondent and, in seeking justice, it was the appropriate course for me to adopt.  I think in the circumstances, that the respondent has waived costs in all previous proceedings, then it is fit that the Court make no order as to costs today.

DEANE J:   The application is refused with costs.  Adjourn the Court until 9.30 am tomorrow in Sydney.

AT 2.46 PM THE MATTER WAS ADJOURNED SINE DIE