Fletcher v Westpac [No 2] - [2014] WASCA 42

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: FLETCHER -v- WESTPAC [No 2] [2014] WASCA 42

CORAM: NEWNES JA
MURPHY JA

HEARD: 17 OCTOBER 2013

DELIVERED : 24 FEBRUARY 2014

FILE NO/S: CACV 129 of 2011

BETWEEN: BRIAN FLETCHER AS TRUSTEE OF THE BRIAN FLETCHER FAMILY TRUST
Appellant
AND
WESTPAC BANKING
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :ALLANSON J
Citation  :BRIAN FLETCHER AS TRUSTEE OF THE BRIAN FLETCHER FAMILY TRUST -v- ST GEORGE BANK LTD [No 2] [2011] WASC 277
File No  :CIV 2186 of 2006

Catchwords:

Practice and procedure - Trustee of appellant bankrupt - Application to substitute new trustee as appellant - Whether appeal has reasonable prospect of success - Appeal against findings of fact by trial judge - Relevant principles - Findings clearly open to trial judge - Appeal has no reasonable prospect of success

Legislation:

Nil

Result:

Application to substitute appellant dismissed
Appeal dismissed

Category: B

Representation:

Counsel:

Appellant:     In person
Respondent:     Ms C L Di Russo
Non-party:     Mr C P Stokes

Solicitors:

Appellant:     In person
Respondent:     Gadens Lawyers
Non-party:     Chris Stokes & Associates

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

Brian Fletcher as Trustee of the Brian Fletcher Family Trust v St George Bank Ltd [No 2] [2011] WASC 277
Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549
Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472
Fletcher v Westpac [2012] WASCA 154
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Leeder v The State of Western Australia [2008] WASCA 192
Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359
Williams v The Minister, Aboriginal Land Rights Act 1983 [2000] NSWCA 255

JUDGMENT OF THE COURT: There are two applications before the court. One is an application to substitute a new trustee of the Brian Fletcher Family Trust, Mr William Fletcher (the applicant), as the appellant. The other is an application by the respondent to dismiss the appeal on the ground that the appeal has no reasonable prospect of success.
The first application has come about because the current appellant, Mr Brian Fletcher (the appellant), is now bankrupt and accordingly the appeal cannot be pursued further by him: see Fletcher v Westpac [2012] WASCA 154. Mr William Fletcher is his brother and has been appointed as the trustee of the trust in substitution for the appellant.
The application to substitute Mr William Fletcher for the appellant was initially opposed by the respondent, among other things, on the ground that he would not be able to meet any order for costs that might be made against him and the trust has no tangible assets from which he might be entitled to be indemnified. Mr William Fletcher has since filed an affidavit in which he has said that he is a pensioner but he owns his home which is unencumbered. The home was valued in a subsequent affidavit at $300,000. In light of that material, the respondent does not now press that ground of opposition to the application but it opposes the application on other grounds.
It is appropriate, however, to turn first to the respondent's application to dismiss the appeal. No purpose would be served in substituting a new appellant if the appeal has no reasonable prospect of success.

Background

The appeal arises out of the sale of a property that the appellant owned in Bull Creek (the property). The appellant leased the property to Baysilk Holdings Pty Ltd, a company associated with the appellant, which used it to operate a health club.
In July 1995, the appellant granted a first mortgage over the property to Ould Pty Ltd. In August 1995, Baysilk obtained three loan facilities from the respondent, secured by, among other things, a second mortgage over the appellant's interest in the property. The appellant subsequently obtained further loan facilities from the respondent, also secured by the second mortgage. The appellant, the respondent and Ould entered into a Deed of Postponement under which the respondent would have priority and rank first in payment of any money owing to it by the appellant or Baysilk.
In 1997, Baysilk sold the health club business to Tonesports Pty Ltd, which took an assignment of the lease. It appears that the appellant had no interest in Tonesports.
On 4 July 2000, Ould demanded payment of the sum of $88,945.24 and interest of $38,945.24, which it said was due and owing under its first mortgage. The appellant claimed that the money had been repaid. Ould subsequently took steps to sell the property pursuant to its power of sale under the mortgage. On 12 December 2000, the appellant obtained an interim injunction to restrain the sale. The appellant failed, however, to comply with a condition of the injunction that $75,000 be paid into court and, on 31 January 2001, the injunction lapsed.
In February 2001, Ould entered into a contract to sell the property. That contract did not proceed. On 16 June 2001, Ould entered into another contract with the same purchaser. Settlement of that contract occurred on 20 July 2001. The whole of the proceeds of sale were paid to the respondent in partial discharge of the appellant's indebtedness to it.

The appellant's claim

The appellant subsequently brought an action for damages against the respondent. The substance of the appellant's case was that:
•on several occasions between February and July 2001, the appellant had sought from the respondent, by one of its managers, Mr Bassett, and Mr Bassett had given, an undertaking that the respondent would inform him if it became aware of any proposal by Ould to sell the property so that the appellant could take steps to prevent the sale; and
•in about May or June 2001, Mr Bassett had undertaken to inform the appellant if the respondent became aware that a contract for the sale of the property had become unconditional so that the appellant could take steps to prevent the sale.
The appellant alleged that Mr Bassett told him that no sale could be completed without the respondent being aware of it because the respondent held the duplicate certificate of title.
It was alleged that each of the undertakings gave rise to an assumption or expectation by the appellant (relevantly) that the respondent would inform the appellant immediately upon becoming aware that a contract of sale had become unconditional, or that a settlement to complete the sale was proposed or arranged.
The appellant pleaded that the respondent knew he would rely on the undertakings and would suffer damage if they were not fulfilled. He alleged, in effect, that in breach of the undertakings the respondent did not inform him of the existence of an unconditional contract in time for him to seek an injunction restraining its completion, and he thereby suffered damage.
The causes of action relied upon by the appellant were, in summary, as follows:
(a)breach of a general duty to inform him that the sale was to take place and not to produce the certificate of title to allow the sale to proceed, the legal foundation of which duty was uncertain but which the judge dealt with as arising in tort;
(b)breach of a more limited and specific duty to inform the appellant in time to enable him to act to prevent the sale;
(c)promissory estoppel arising from alleged representations made by the respondent to the appellant which the appellant acted on to his detriment as a source of legal obligation; and
(d)breach of a fiduciary duty to promptly inform the appellant in relation to the sale of the Bull Creek property.
The appellant advanced two alternative bases for assessing damages. The first was the loss of the equity of redemption of the property, being the difference between its true value at the date of trial and the net proceeds of the sale, together with the loss of rental income for the period from the sale up to trial. Alternatively, the appellant claimed that the property was sold for less than its true value and claimed the difference in value and interest, together with the loss of rental income.
The respondent, among other things, denied that the alleged undertakings were given, and further pleaded that they did not give rise to the assumptions or expectations alleged by the appellant and denied that the appellant relied on them.
The primary judge dismissed the appellant's claim: Brian Fletcher as Trustee of the Brian Fletcher Family Trust v St George Bank Ltd [No 2] [2011] WASC 277.

The reasons of the primary judge

His Honour identified the critical factual issue in the case to be whether Mr Bassett, on behalf of the respondent, made promises or assurances which would reasonably give rise to the assumption or expectation claimed by the appellant [78]. He found against the appellant on that issue.
The primary judge found that Mr Bassett had told the appellant that he would keep the appellant informed about the sale of the property. His Honour also found that Mr Bassett had told the appellant that the property could not be sold without the respondent's knowledge. However, his Honour did not accept the appellant's evidence that he asked for, and was given, assurances by Mr Bassett that Mr Bassett would inform him if any offer for the sale of the property became unconditional so that he could take action to prevent the sale [82]. His Honour expressed a number of reasons for that conclusion.
First, Mr Bassett gave evidence that he did not believe he would have given any indication to the appellant that the respondent would assist him in attempting to stop the sale of the property. Mr Bassett said that the position of the respondent had to be protected. His Honour accepted that it was unlikely Mr Bassett would have agreed or undertaken to inform the appellant of a pending sale in order that he could take action to prevent the sale [83]. In that connection, his Honour noted that the respondent had not attempted to stop the earlier sale and, in May 2001, after the second contract of sale had been entered into, the respondent had foreshadowed action to recover its debt from the appellant but had waited for the sale. While the respondent had then reached an agreement with the appellant to progressively reduce his debt, it had also served default notices on the appellant [83].
Secondly, the appellant accepted he could not remember the words used by Mr Bassett but said that the 'essence' of the assurances given by Mr Bassett was 'in the emails'. However, no emails containing any relevant assurances were produced [84].
Thirdly, the only documents in evidence in the relevant period recording conversations between the appellant and Mr Bassett about the possible sale of the property were two letters, dated 1 May 2001 and 21 May 2001. They did not support the claim that such assurances were given.
In the letter of 1 May 2001, Mr Bassett had written to the appellant regarding his overdraft facility which was then overdrawn by approximately $44,000. In the letter, Mr Bassett foreshadowed legal action for full recovery of all debts, but went on to say, '[The respondent] may consider withholding legal action should the sale of [the property] become unconditional by 10 May 2001'.
In the letter of 21 May 2001, Mr Bassett had written to advise the appellant of the last update from the selling agent of the property. In that letter, Mr Bassett said that the respondent had been informed that the offer to buy the property was not yet unconditional due to negotiations between the purchaser and the tenant over GST, and that while the date for finance approval had passed the vendor had agreed to an extension of it. Mr Bassett concluded, 'We will keep you informed as we are updated with the progress of this or any other offer on the property that may eventuate'.
The primary judge found that the letters showed an expectation on the part of the respondent that the property would be sold and were concerned with the effect on the appellant's indebtedness to the respondent and the foreshadowed recovery action [85].
Fourthly, as the appellant was aware, the respondent had not attempted to stop the auction in December 2000 [86].
The primary judge also concluded that in light of the two letters in May 2001 the appellant could not thereafter reasonably have held any assumption that the respondent would do anything that would assist him to prevent the sale. His Honour considered that this was reinforced by two events in June and July 2001 [86].
Those events were, first, on 18 June 2001 the appellant had received an email from the tenant of the property saying that Ould had received an unconditional offer for the property which was 'in the process of settling in the next 30/60 days' [42]. The appellant had forwarded the email to Mr Bassett and enquired whether Mr Bassett had heard about the offer. He had received no response [44]. There was no evidence he had followed up the matter or that Mr Bassett had given any assurances at this critical time [46]. Second, on 10 July 2001, in an email from Mr Drake‑Brockman, the state manager of corporate finance of the respondent, to the appellant, Mr Drake‑Brockman had said that he understood the property would be sold 'within a short period' and that the respondent 'does not want anything to prejudice that sale' [88].
The primary judge was also not satisfied that the appellant relied on the assurances he claimed to have been given [89]. His Honour noted that the injunction obtained by the appellant to restrain the earlier sale had lapsed because the appellant had failed to pay the disputed amount into court. His Honour considered that the appellant would have known that a payment into court was likely to be a condition of any further injunctive relief [90]. The appellant would also have been aware that the amount of notice he might be given of a sale was unpredictable. Despite that, he had taken no steps to put himself in a position to make any payment into court, in circumstances where all of his properties were mortgaged and his account with the respondent overdrawn. The appellant had no satisfactory explanation as to how or when he was going to raise the necessary funds. His Honour concluded that the appellant's conduct was inconsistent with any reliance on the respondent to inform him of a pending sale of the property [90].
Turning to the causes of action pleaded, the primary judge found that there was no general duty on the respondent to inform the appellant that the sale was to take place or to decline to produce the certificate of title before the appellant had had an opportunity to apply to restrain the sale [100], [106]. In relation to the claim of a more limited duty to inform the appellant in time to enable him to act to prevent the sale - said to arise as a result of the undertakings allegedly made by Mr Bassett - his Honour concluded that the claim must fail in light of his finding that the appellant had failed to establish that Mr Bassett gave undertakings on which the appellant could reasonably have formed the assumptions and expectations he alleged [102], [106].
The primary judge also found that the appellant had failed to prove that the respondent was the cause of his alleged loss. His Honour found that the respondent had learnt on 6 July 2001 of an unconditional contract to purchase the property and informed the appellant of that on 18 July 2001 [87]. The appellant had taken no steps to arrange funds for a payment into court prior to 6 July 2001 and gave no evidence of any plans to obtain funds [104]. What, if anything, the appellant could have done to prevent the sale if informed on 6 July 2001 that it was imminent was simply speculative [104]. It was also uncertain whether the court would have granted a further injunction in circumstances where the earlier injunction had been allowed to lapse [105]. His Honour concluded that even if the appellant had been notified on 6 July 2001, he would not have been able to prevent the sale [105].
The primary judge concluded that the claim based on promissory estoppel must fail in light of his finding that the appellant had failed to prove representations by the respondent which could reasonably have induced the appellant to adopt the assumptions or expectations on which he said he relied [110].
Finally, in relation to the claim of breach of fiduciary duty the primary judge noted that the relationship between the appellant and the respondent did not fall within one of the accepted categories of fiduciary relationships, the ordinary banker‑customer relationship not being a fiduciary relationship [116]. His Honour concluded that there was nothing in this case which would give rise to a fiduciary relationship. Even if Mr Bassett gave the assurances alleged, that would not give rise to any fiduciary duty and there were no other factors which would do so [117] ‑ [119].
On damages, the primary judge found there was no evidence as to the value of the property at the date of trial, and accordingly the claim for the loss of the equity of redemption, being the difference between its true value at the date of trial and the net proceeds of the sale, must fail [122]. On the alternative claim, the primary judge found that the appellant had failed to prove that the property was sold for less than its true value. His Honour did not accept the valuation of $2.135 million by the appellant's expert valuer. His Honour found that the properties and transactions relied on by the valuer in determining the land value, passing yield and market rent for the property, on which the valuation was based, were not truly comparable [150]. His Honour regarded the range of properties relied upon by the respondent's valuer as being a more satisfactory comparison [142] ‑ [143], [150]. The respondent's valuer had valued the property at $1.7 million, the amount for which it was sold. The primary judge concluded that whilst the figure of $1.7 million may be towards the bottom of the range of figures which could be regarded as being within the market value, it was within that range [151].
His Honour dismissed the appellant's claim and ordered the appellant to pay the respondent's costs of the action to be taxed.
The appellant filed a notice of appeal on 13 October 2011.

The grounds of appeal

The grounds of appeal are as follows:
1.[Judg. 82] His Honour believed some of Fletcher's statements regarding being informed by Bassett in 'continuing' phone conversations, but not all, even though, as time went by, with the knowledge provided by Bassett of an existing conditional contract, that Fletcher's 'need to know' was becoming more critical, as he was awaiting a trial against Ould to prevent a sale. Error of fact.
2.[Judg. 83] His Honour stated he didn't believe the bank would take any action to prevent the sale because the bank didn't do anything to prevent the auction in 2000. Error of fact.
3.[Judg. 84] The letter from Bassett, … assuring Fletcher of ongoing information regarding a potential sale, is consistent with Fletcher's claim of ongoing assurance provided by Bassett to keep Fletcher informed, from the time he informed Bassett of the attempted auction. When questioned by His Honour, Fletcher made an error regarding early email communication after the auction with Bassett, which he confused with phone communication, but the 'essence' of the communication is clear and acknowledged by Bassett, from that time. Error of fact.
4.[Judg. 85] The various commitments referred to above, confirm Fletcher was to be kept informed. The two letters [TB vol 2 p 412, 416], referred to two separate issues, the first regarding the overdraft, where the possible legal action to recover was resolved by the agreement depicted in letter entitled 'Overdraft Arrangement' [TB vol 2 p 456]. The bank's default notice was part of normal process in the event they may decide to foreclose. The 'overdraft reason' for their default notice had been resolved. The second letter [TB vol 2 p 416] was letter promising to keep Fletcher 'informed as we are updated with this or any other offer on the property that may eventuate'. Referring to both letters, his Honour states 'they do not support Mr Fletcher's claim'. Error of fact. (original emphasis)
5.[Judg. 86] The ongoing premise of his Honour's judgment is that either Fletcher required or expected the bank to 'help' to prevent a sale. Error of fact.
6.[Judg. 87] The email referred to was received from Tonesports, the tenant of Bullcreek (who had caused the overdraft problem by withholding rent). Fletcher was very sceptical that Tonesports would be in a position to know what was happening regarding a potential sale, when he was led to believe (based on no further information from Bassett) the bank did not. It was reasonable to assume that the combination of Bassett's lack of response to Fletcher's enquiry into the contents of Tonesports' email (knowing how critical an unconditional contract would be) and lack of reference in the conversation between Fletcher and Bassett, was seen by Fletcher that the email information was without foundation. It contained also what was clear misinformation regarding St George becoming the new landlord. The topic of the conversation/email with Bassett was about the reduction of the overdraft. The absence of a response was in fact, evidence of Bassett's withholding of information promised. The attitude to fletcher is referred to in 'Judgments'. Error of fact.
7.[Judg. 88] Given the proof that the bank was holding an unconditional contract of sale at this time (TB vol 2 p 467), the comment of Mr Drake Brockman 'It is my understanding that the building will be sold within a short period' was also a prevarication. (His Honour also felt the need to reinterpret the meaning of the statement in his decision). Stating the bank 'would not do anything to prejudice the sale' is irrelevant. They were not expected to prevent or to facilitate a sale. Fulfilling their obligation to provide Fletcher with information about the sale, as stated in Bassett's letter (TB vol 3 p 416), is consistent with 'not doing anything to prejudice a sale'. By wilfully withholding information (as with the example of withholding of the settlement statement), the bank in fact did prejudice Fletcher from 'doing anything to prevent the sale'. Error of fact.
8.[Judg. 89] Fletcher knew from the time of the attempted auction, that it was he who would have to act to prevent a sale. He started an action in the Supreme Court for that purpose (CIV 2628 of 2000). For His Honour to presume Fletcher was not relying on the bank as the only source of reliable information before he initiated seeking an injunction to stop the sale, is an error of fact.
9.[Judg. 90] His Honour's statement that Fletcher 'knew a payment into court was likely' was an error of fact.
10.[Judg. 90] The statement 'Fletcher knew he would have to sell properties' to raise potential security monies, was also an error of fact. He had over $700,000 in equity in the St George secured properties (TB vol 2 p 247q) and could have offered a mortgage security for any amount the court may have required.
11.[Judg. 90] To associate the link between relying on Bassett and not attempting to raise potential funds is 'an error of fact'.
12.[Judg. 91] His Honour states that Fletcher's attempt to try to influence the selling agent into not being confident on behalf of a potential buyer (knowing the sale was invalid) was incomprehensible. Error of fact.
13.[Judg. 101] The description of Bassett's commitments to inform was incorrectly labelled as 'gratuitous' is an error of fact. The information required was needed to save a financial disaster for Fletcher, and to maintain a mutually profitable relationship with the bank. Bassett was well aware of the seriousness of the situation.
14.[Judg. 102] Fletcher had no other reliable source of information of an impending sale other than the bank. The sale could easily have taken place in total secrecy if the bank withheld information regarding any contract. He has been consistent regarding his claim of seeking ongoing verbal assurances from Bassett. Fletcher had no reason not to continue to enquire. His whole financial stability depended upon such information. Error of fact.
15.[Judg. 103] There is a clear causation chain between the bank 'withholding information' and the sale by Ould. Fletcher could not have blocked a sale (pending trial against Ould/Hooper) if he didn't know of a sale. St George were in possession of that information, knew the first injunction had lapsed, and wilfully withheld the information, as well as withholding the settlement statement, (which included requests for invalid monies for Ould's lawyers' fees). Error of fact.
16.[Judg. 104] His Honour is speculating whether an injunction would be granted. The reasoning regarding fund raising is covered in 12 ‑ 14 above. Error of fact.
17.[Judg. 105] The speculation whether an injunction would have succeeded or not, did not remove the obligation of the bank to inform Fletcher. His Honour's view regarding security deposit didn't take into account Ould's financial position of not receiving any funds if the property had been sold. He would not lose money, so no security deposit would have been expected. Error fact.
18.[Judg. 110] Prior to June 2001 the assurance of keeping Fletcher informed is not disputed. After June, there was no statement verbally or in writing to retract that commitment. Bassett was not available (on holiday), and Drake Brockman was introduced to Fletcher for the first time. Error in fact.
19.[Judg. 118] The letter referred to in 1995 '96 and '98 declares 'mutual benefit' between the customer and bank, as part of the mortgage documentation. As a result of their behaviour, the bank in fact caused mutual disadvantage, thus breaching their stated commitment 'to act for mutual benefit'. Error of fact. (original emphasis)
20.His Honour did not consider the bank's withholding of the settlement statement from Fletcher (prepared by Ould's settlement agent James Ride) [TB vol 2 p 519], as a significant example of the breach of duty of care. Omission of fact. (original emphasis)
21.[Judg. 151] The valuation of the property of $1.92 million was produced by the bank's valuers [exhibit V2], based on taking the high capitalization rates of comparable properties, (a rate of 13.75%) and then increasing it, above all other comparisons, (to 15.5%), based on the 'tiredness' of the building, and THEN removed $220 000 which the owner decided to spend on improvements. His Honour stated 'this deduction was questionable', but in spite of that, suggested that $1.7 m was the correct selling price. It is wrong to produce the valuation figure because of the perceived 'state', and then further reduce by an amount that a buyer decides to spend for further improvements to improve that 'state'. Error in fact.

Disposition of the appeal

The grounds of appeal contained in the appellant's case were prepared by the appellant, who has at all times been acting in person. They do not comply with the Supreme Court (Court of Appeal) Rules 2005 (WA) in a number of substantial respects. Nor do the appellant's written submissions. The appellant has also failed entirely to comply with Practice Direction 7.4, which requires an appellant who relies on a ground of appeal which requires this court to undertake a review of the evidence to identify (by transcript page or exhibit) both the evidence which supports the ground of appeal and the evidence which supports the challenged finding.
The inadequacy of the appellant's case, and in particular the grounds of appeal, has been raised with counsel for the applicant on two previous occasions (6 March 2013 and 18 April 2013). It was raised again on the hearing of this application. Acting no doubt on instructions, counsel said on this occasion that no amendments would be sought to the appellant's case if the applicant were to be substituted as the appellant. Inevitably, the deficiencies in the appellant's case have made the task of determining whether the appeal has any reasonable prospect of success more time‑consuming than it ought to have been.
The appeal is by way of a rehearing based on the evidence before the primary judge. The relevant principles are well established and for present purposes can be shortly stated. On such an appeal, it is necessary to bear in mind the limitations inherent in a rehearing on the basis of the written record, where the appellate court does not always have the advantage of matters such as the 'feeling' of the case or considerations which may not be adequately reflected in 'cold type': Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549, 561; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [23].
The onus which lies on an appellant who appeals against findings of fact goes beyond merely showing that an alternative finding was available on the facts. The appellant must show that a factual error was made by the learned trial judge. As the Full Court of the Federal Court said in Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359:
The court must be satisfied that the judgment of the trial judge is erroneous and it may be so satisfied if it reaches the conclusion that the trial judge failed to draw inferences that should have been drawn from the facts established by the evidence. The court is unlikely to be so satisfied if all that is shown is that the trial judge made a choice between competing inferences, being a choice the court may not have been inclined to make but not a choice the trial judge should not have made (369).
See also Williams v The Minister, Aboriginal Land Rights Act 1983 [2000] NSWCA 255 [60]; Leeder v The State of Western Australia [2008] WASCA 192 [84].
In relation to findings of fact based on credibility, in Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472, Brennan, Gaudron and McHugh JJ said:
More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against - even strongly against - that finding of fact. If the trial judge's finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge 'has failed to use or has palpably misused his advantage' or has acted on evidence which was 'inconsistent with facts incontrovertibly established by the evidence' or which was 'glaringly improbable' (479). (footnotes omitted)
It is not necessary to canvass the grounds of appeal in detail. Many of the grounds are difficult to understand and some are either meaningless or plainly irrelevant. On the hearing of the appeal, counsel for the applicant relied on the following grounds which, in substance, he described in the following way:
1.grounds 1, 3 and 4 contend that the primary judge erred in fact in finding that the respondent did not give any undertaking to inform the appellant of a pending sale of the property so that he could take action to prevent it was against the weight of the evidence (ts 82);
2.grounds 5, 6, 7 and 8 contend that the primary judge erred in fact in finding that the appellant could not reasonably have held any assumption or expectation that the respondent would inform the appellant of a pending sale of the property, as his Honour misapprehended the appellant's case as being that the respondent would assist the appellant prevent the sale whereas it was simply that it would inform the appellant of a pending sale of the property (ts 84);
3.grounds 9, 10, 11, 16 and 17 contend that the primary judge erred in fact in finding that the appellant knew that a payment into court was likely to be a condition of any injunctive relief sought by the appellant and that the appellant would need to sell property to make such a payment (ts 85); and
4.ground 20 contended that his Honour erred in fact and law in not finding that the respondent was under a duty to disclose the settlement statement it received from Ould's agent (ts 87).
It is critical to the success of the appeal that the appellant successfully impugn the finding of fact of the primary judge that Mr Bassett did not give any assurance or undertaking which would reasonably give rise to the appellant's alleged assumption or expectation. In addition, it is necessary for the appellant successfully to impugn the finding of fact of the primary judge that the appellant did not rely upon any such assurances or undertakings which were given by the respondent. In our view, the appellant does not have a reasonable prospect of demonstrating error in respect of either finding.
In support of grounds 1, 3 and 4, counsel for the applicant relied upon '[the appellant's] evidence about his conversations with Mr Bassett', the respondent's letter of 21 May 2001 and '[Mr Bassett's] own evidence' (appeal ts 82). Again, we were not given transcript references to the relevant evidence. It has therefore been necessary to read, among other things, all of that evidence and the relevant exhibits. Having done so, we are satisfied that the submission is without substance. His Honour's finding was one that was clearly open to him on the evidence.
The only evidence of the conversations alleged to constitute the assurance or undertaking was the evidence of the appellant. In his written witness statement the appellant said that between February and June 2001 he telephoned Mr Bassett at least once a fortnight to find out if anything was happening in relation to the sale of the property. He said he was told by Mr Bassett that nothing could happen without his (Mr Bassett's) knowledge and that Mr Bassett said, 'I assure you I will tell you if there is any activity regarding the sale of this building' (exhibit B [96]).
The appellant said in his witness statement that, in May 2001, he had a conversation with Mr Bassett about an offer which Mr Bassett said he had heard had been made for the property. According to the appellant, he said to Mr Bassett, 'You will tell me of course if this becomes formal so that I can take out an injunction', to which Mr Bassett replied, 'Of course I'll let you know'. In the witness statement, the appellant said he did not want to apply for another injunction unless Mr Bassett told him the sale was unconditional. He said he continued to rely on Mr Bassett's assurances that he would tell him if and when the contract became unconditional.
At trial, in answer to a question from the primary judge, the appellant said that he could not recall precisely what Mr Bassett had said by way of the assurances but that the substance of it was that 'he [Mr Bassett] would keep [the appellant] informed about the status of any sale that was in the wind' (ts 178). The appellant said the 'essence' of what Mr Bassett told him was in 'the emails' (ts 178 ‑ 179). In cross‑examination, the appellant conceded that he could not recall a specific email to the effect of the alleged assurances (ts 179). It is the case, as the primary judge noted, that no such email was produced.
Mr Bassett was able to recall very little of the events of the time. That is not surprising in circumstances where some 10 years had passed and Mr Bassett had ceased to be an employee of the respondent in November 2001. In his written witness statement Mr Bassett said he had a vague recollection of telling the appellant that he would keep him informed as to the sale of the property but he said he would not have given him any indication that the respondent would assist him in attempting to stop the sale of the property, as the respondent's position had to be protected.
As the primary judge found, the contemporaneous documents do not assist the appellant. Notwithstanding the importance the appellant said he attached to the alleged undertakings, they are not mentioned in any of the contemporaneous documents. Moreover, a number of those documents are inconsistent with such undertakings having been given.
The correspondence of May 2001 was, as the primary judge observed, entirely consistent with a desire on the part of the respondent that the property be sold and the appellant's indebtedness to the respondent thereby reduced. In Mr Bassett's letter of 1 May 2001, in which legal action was threatened if the appellant's overdraft was not brought within approved limits, Mr Bassett went on to say that the respondent 'may consider withholding legal action should the sale of [the property] become unconditional by 10 May 2001'. And in his letter of 21 May 2001, Mr Bassett simply explained that there had been delays which had prevented the contract 'becoming unconditional'. He also noted that while the time for finance approval had passed, the vendor had agreed to an extension of time.
The appellant attached considerable weight to the statement in the letter of 21 May 2001 that the respondent would keep the appellant informed as it was updated with the progress of the sale of the property. That statement, however, is to be understood in its context. When so understood, it falls a long way short of an undertaking of the nature alleged. It is quite consistent with an intention that the sale should proceed to completion.
The email of 18 June 2001 from the tenant of the property stating that there was an unconditional offer for the property was simply forwarded to Mr Bassett by the appellant with the somewhat laconic enquiry, 'Heard anything re below?'. When he received no reply, the appellant did not follow up the enquiry in writing and, as the primary judge observed, there was no evidence that he did so orally. In cross‑examination the appellant said he could not recall whether he subsequently spoke to Mr Bassett about it (ts 189). It is notable, however, that the following day, 19 June 2001, Mr Bassett sent an email to the appellant confirming discussions earlier that day regarding the appellant's agreement to reduce his indebtedness but making no reference to the sale of the property.
The email Mr Drake‑Brockman sent to the appellant on 10 July 2001 in connection with a dispute between the appellant and the tenant of the property was quite inconsistent with the undertakings the appellant said he had been given. As mentioned earlier ([28]), in the email Mr Drake‑Brockman said he understood the property would be sold 'within a short period' and that the respondent did not want anything to prejudice the sale. He went on to say that to resolve the dispute with the tenant he had suggested to the respondent's legal advisers that a managing agent be appointed by the respondent or the intending purchaser.
That evoked the following response from the appellant later the same day:
How can effective property management prejudice a potential sale?
If anything, bringing the property up to standard would improve the marketability.
Why are you so keen that a sale takes place, knowing (or assuming you know) the circumstances?
Hooper [a director of Ould] has been saying there is an imminent sale since before Christmas, and Gavin [Bassett] has informed me that the bank is assuming there is no sale on foot.
Have you heard anything to the contrary?
I have further evidence regarding the falsification of the mortgage position of Hooper, and intend to apply for an injunction to stop a sale. We are also at the stage where discovery is about to be granted regarding his current claim, which will demonstrate his lies.
I have been informed on a number of occasions that if a sale does go through, that all funds will go to the bank and none to Hooper. Is this still the case?
Any sale will eliminate the mortgage of Hooper, and will remove the caveats on the other properties
Regarding the position of the bank, a collateral mortgage to only 55% of the current value doesn't seem to be much to worry about.
Regarding your point of getting involved in any dispute between Cowling [a director of Tonesports] and myself, why are you?
The appellant sent a further email to Mr Drake‑Brockman the following day, 11 July 2001, complaining about the direction in Mr Drake‑Brockman's email of 10 July 2001 to send future correspondence to the respondent's solicitors.
At trial the appellant sought to explain the absence of any mention of the alleged undertakings in his emails to Mr Drake‑Brockman. He said that he did not raise the undertakings because '… having talked to Bassett about that many times, … I didn't feel that there would be need to continue that conversation with other parties' (ts 203). It is evident that the primary judge did not accept that explanation.
As the primary judge observed, the first mention in the correspondence of the alleged undertakings did not occur until almost three weeks after the appellant was informed of the settlement of the sale. The appellant learnt of the settlement by an email from the managing agent on 20 July 2001. On 23 July 2001, the appellant sent an email to Mr Bassett simply asking for his comment. Mr Bassett replied the same day confirming that the sale had been completed and saying that they would need to discuss the remaining debt.
On 31 July 2001, the appellant asked Mr Bassett if the respondent would provide funds to assist the appellant to purchase another health club. He set out some details of the proposal in an email to Mr Bassett on 2 August 2001. In that email he also dealt with some matters arising out of the sale of the property.
On 8 August 2001, Mr Bassett informed the appellant that the respondent had refused the request for the funds. In an email later that day the appellant expressed surprise at the refusal and went on, for the first time, to allege the undertakings on which he relied in the action.
On the evidence, it was clearly open to his Honour to find that the alleged assurances or undertakings had not been given. The only evidence of them was the appellant's evidence of conversations he said he had with Mr Bassett, the precise terms of which he could not recall. There was no reference to them in any of the contemporaneous documents and there was nothing to suggest that Mr Bassett had any reason to undertake that he would provide the appellant with information about the sale so that the appellant might prevent its completion. On the contrary, the respondent's correspondence and its internal documents were all consistent with the respondent wanting the sale to proceed.
The primary judge had the benefit of seeing and hearing the witnesses. He rejected the appellant's evidence as to the assurances or undertakings he claimed to have been given. There is nothing contained in the grounds of appeal which is capable of establishing that the primary judge was in error in doing so. It follows that the appeal has no reasonable prospect of success. The application to substitute the applicant as the appellant, and the appeal, must therefore be dismissed.
We would add that it is also clear, as his Honour found ([86]), that whatever may have been the appellant's assumptions or expectations prior to the emails from the respondent of 1 May, 21 May and 10 June 2001, any assumption or expectation that the respondent would inform him of any unconditional contract so that he might take steps to prevent its completion could not reasonably have survived that correspondence. It was entirely clear by then, at the latest, that the respondent would do nothing which might lead to the sale of the property being obstructed. The submission that the primary judge misapprehended the appellant's case on this issue is simply misconceived.
It is unnecessary to consider the other grounds of appeal.

Conclusion

The following orders should be made:
1.The application to substitute William Fletcher as the appellant be dismissed.
2.The appeal be dismissed.