George v Bourke

[2003] NSWCA 196

CITATION:	George v Bourke & Anor [2003] NSWCA 196
HEARING DATE(S):	17/07/03
JUDGMENT DATE:	17 July 2003
JUDGMENT OF:	Hodgson JA at 43; Ipp JA at 1; Gzell J at 47
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	GROUNDS OF APPEAL - Notice of appeal - Defectively drawn grounds - Appeal on grounds that the trial judge erred in the factual findings he made - Approach of an appeal court - Appeal dismissed. D
CASES CITED:	Abalos v Australian Postal Commission (1990) 171 CLR 167 Devries v Australian National Railways Commission (1993) 177 CLR 472 Fox v Percy (2003) 197 ALR 201 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588; 73 ALJR 306
PARTIES :	Peter George (Appellant) Peter John Bourke (First Respondent) Lee Anne Marie Bourke (Second Respondent)
FILE NUMBER(S):	CA 40911/02
COUNSEL:	F Santisi (Appellant) J Reimer (First Respondent) B Murphy (Second Respondent)
SOLICITORS:	Maurice Harrison & Associates (Appellant) Hardinlaw Lawyers (First Respondent) Xenos Jordan (Second Respondent)

LOWER COURTJURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 4331/00
LOWER COURT JUDICIAL OFFICER :	Nield DCJ

CA 40911/02
DC 4331/00

HODGSON JA
IPP JA
GZELL J

Thursday, 17 July 2003

PETER GEORGE v PETER JOHN BOURKE & 1 OR

Judgment

1 IPP JA: This appeal concerns a liquidated claim, the subject of an action in the District Court, whereby the appellant claimed $230,313 from the first and second respondents.

2 The statement of claim alleged firstly, that the first respondent owed the appellant the sum of $230,313 in respect of moneys lent and advanced. Secondly, it alleged that the second respondent had guaranteed the repayment by the first respondent to the appellant of $42,000 of the total sum lent and advanced and, hence, was indebted to him in that sum.

3 The statement of claim contained an alternative cause of action against the first respondent alone. On the alternative basis, the appellant claimed the full amount of $230,313 as money had and received by the first respondent for the use of the appellant. This claim was based on allegations that the first respondent was an employee or agent of the appellant, that he had collected the sum in question from debtors of the appellant, and had failed to pay that sum to the appellant.

4 Significantly, there were no documents, not even receipts, that evidenced the loans or the moneys alleged to have been collected on the appellant’s behalf or the guarantee by the second respondent. In addition, as regards the alternative cause of action, the appellant did not call any of the debtors from whom the moneys were allegedly collected to testify.

5 The appellant relied only on the testimony of himself and his chauffeur or bodyguard, one Dimitri Moskovich. Against their evidence was ranged the evidence of the respondents and others called on the respondent’s behalf. The trial judge, Nield DCJ, accepted the evidence of the respondents and their witnesses and disbelieved the appellant and Moskovich. He dismissed the appellant’s claim with costs.

6 The appellant now appeals on several grounds. The notice of appeal is lamentably deficient. The first five grounds of appeal consist of bald allegations that the trial judge erred in making particular findings of fact and in not making others. No explanation is given as to why the judge erred. Ground 6 alleges that his Honour “erred in making findings of fact as to the credit of the witnesses for which there was no evidence in support”. Whatever this may mean, and the meaning escapes me, it does not identify with any precision or particularity the errors said to have been made; ground 6 simply does not engage his Honour’s reasons. Ground 7 asserts that his Honour erred in placing no weight on the documentary evidence. There were 258 pages of documentary evidence and the grounds of appeal do not attempt to identify any particular document on which reliance is placed. Ground 8 asserts that:

“His Honour erred in making findings of fact as to the credibility of the defendants and the defendants’ witness, which findings were not supported by the evidence and observations made nor the documents”.

Whatever that means it appears to be similar to ground 6 and the comments I made in regard to that ground apply.

7 Grounds of appeal should be formulated with clarity. The respects and manner in which the trial judge erred in law or in fact should be identified simply and shortly, but clearly. The Court should not be left to ferret out for itself the decisive issues in the appeal. It is impossible in this case to discern from the notice of appeal, the true issues intended to be raised. Should a notice of appeal be materially defective, the Court of its own motion may refuse to hear the appeal until the grounds of appeal are amended into proper form or may strike them out. I do not propose that this course be followed in this case, but parties should be aware of the potential consequences of attempting to proceed with a notice of appeal containing defectively drawn grounds.

8 The written submissions filed on behalf of the appellant rely largely on statements made in evidence by the appellant and Moskovich, and ignore the fact that these witnesses were disbelieved by Nield DCJ. Submissions of that kind have to be rejected.

9 Some attempt is made in the written submissions to refer to the documents on which the appellant relies but all too often they are identified by reference to several pages and it is difficult to identify the particular document and the precise part of that document from which the appellant seeks to derive support. It is often not possible to determine the precise point that the appellant wishes to make from the documents to which such sweeping reference is made.

10 It is, however, clear that the appellant appeals on the ground that his Honour erred in the factual findings he made. The approach of an appellate court to appeals of this kind has recently been restated in Fox vPercy (2003) 197 ALR 201.

11 In that case Gleeson CJ, Gummow and Kirby JJ said at 209 to 210:

“[t]he mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge’s conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being ‘incontrovertible’, an appellate conclusion may be reached that the decision at trial is ‘glaringly improbable’ or ‘contrary to compelling inferences’ in this case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must ‘not shrink from giving effect to’ its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.
It is true, as McHugh has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in an appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d’Avances Commerciales (Société Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The “Palitana”) :
‘… I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.’
Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical.”

12 McHugh J reaffirmed the principles expressed in Abalos v AustralianPostal Commission (1990) 171 CLR 167 and Devries v AustralianNational Railways Commission (1993) 177 CLR 472. His Honour concluded at 223:

“It is a serious mistake to think that anything said in Abalos or Devries necessarily prevents an appellate court from reversing a trial judge’s finding when it is based, expressly or inferentially, on demeanour. Those cases recognise – in accordance with a long line of authority – that it may be done. But there must be something that points decisively and not merely persuasively to error on the part of the trial judge in acting on his or her impressions of the witness or witnesses. Recently in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) , (1999) 160 ALR 588; 73 ALJR 306 for example, this Court held that undisputed and documentary evidence was so convincing that no reliance on the demeanour of witnesses could rebut it”.

13 Fox v Percy and the other authorities to which I have referred indicate that an appellant may establish that a trial judge’s factual findings are erroneous where that is demonstrated by “incontrovertible facts or uncontested testimony”, or “in some quite rare cases” where, although the facts fall short of being “incontrovertible” the decision at trial is “glaringly improbable” or “contrary to compelling inferences”, or where it is otherwise shown that the trial judge failed to use or misused his or her advantage of hearing or seeing the witnesses. The appellate court must be concerned as to the whether the trial judge has too readily drawn conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses and their demeanour. In carrying out this exercise the appellate tribunal should examine “contemporary materials, objectively established facts and the apparent logic of events”.

14 In this case there was no uncontested testimony that supported the appellant’s version, which was strongly denied by both respondents and their witnesses.

15 The trial judge’s finding depended to a substantial degree on the credibility of the witnesses. His Honour considered that the appellant and Moskovich gave vague and unsatisfactory evidence. He said that the appellant prevaricated and embellished and changed the basis of his claim. He said that Moskovich was histrionic and garrulous and his memory was vague. On my reading of the transcript, these findings were open to his Honour and I can find nothing to fault them.

16 His Honour believed the respondents in material respects as well as their witnesses. He gave reasons for his conclusions. Again, from my reading of the transcript, I can find nothing to fault these findings. On the contrary, there were several aspects of the appellant’s case that supported them.

17 Firstly, as his Honour observed, the very manner in which the appellant pleaded his case cast serious doubts upon it. In his statement of claim the appellant asserted that he had lent the first respondent a sum of $252,000 made up of seven different loans (and advances). Particulars were given of the dates and amounts of each loan and advance and the place where each occurred. Repayments by the first respondent were also alleged. The appellant’s alternative case, however, namely, that the first respondent had collected money from the appellant’s debtors on the appellant’s behalf, was fundamentally inconsistent with moneys being lent and advanced by the appellant to the first respondent on the dates and at the places alleged.

18 Secondly, the appellant’s oral testimony as to how the first respondent was indebted to him entirely justified his Honour’s epithet of “vague”.

19 According to the appellant’s statement of claim he lent the first respondent $20,000 on 1 February 1995. In his oral testimony he said that this loan occurred before the loan of $22,000 which, according to the statement of claim, took place on 1 May 1995. In his oral testimony, however, he said that the loan of $22,000 took place in May 1994, which would mean that the loan of $20,000 could not have been effected in 1995 (See Grey Appeal Book 17). Later, in response to a leading question, the appellant agreed that the loans of $20,000 and $22,000 had been made in February and May 1995 respectively (Grey Appeal Book 30). This testimony should be contrasted with the appellant’s evidence that the $22,000 was not a loan but was moneys collected by the first respondent from one John Sant, and not in one lump sum (Grey Appeal Book 17).

20 Although the statement of claim alleged that on 1 August 1996 the appellant had lent the first respondent $80,000 at 8 Lavender Place, Alfords Point, in his oral evidence the appellant said that the $80,000 represented moneys collected by the first respondent. When he was asked from whom the moneys were collected he said:

“Probably most are from John Sant but there [were] some funds from Jason [the first respondent’s brother] and I’m not sure but I did at one stage lend Leanne some money as well.”

The debts allegedly owing and the precise amounts collected were never specified. The vagueness and inconsistencies in this testimony are self-evident.

21 According to the statement of claim, the appellant lent the first respondent $88,000 on 3 January 1997 at 8 Lavender Place, Alfords Point. In his oral testimony the appellant said that, while he was in Cairns, the first respondent obtained from Jason Bourke $38,000 owing to the appellant. The appellant said that the first respondent also obtained “other moneys … from John Sant and Jason at other stages over that five month period” being from August 1996 to January 1997. Again the vagueness and inconsistencies in this testimony are self evident.

22 The appellant said that on the date the first respondent had “accumulated” another $22,000 (Grey Appeal Book 17) he, the appellant, wrote down “on that particular date” that the first respondent owed him a further $22,000. It is not clear what is meant by “on that particular date”, but I infer that it was on 1 May 1995, that being the date pleaded in the statement of claim. The appellant later said, however, that the $22,000 was “compiled or lent in May 1994”.

23 The appellant’s evidence as to how he knew that $22,000 was owing to him was hardly persuasive. In answer to a leading question in his evidence-in-chief, he agreed that the $22,000 “was a combination of amounts that you worked out from your records and Peter Bourke’s records” (Grey Appeal Book 18). But the undisputed evidence was that the first respondent was illiterate. It was later suggested by the appellant that the second respondent had compiled the first respondent’s records, but the second respondent denied this and her evidence was accepted by Nield DCJ.

24 According to the appellant’s evidence, the $80,000 he alleged the first respondent owed him “was based on” what the first respondent told him he (the first respondent) had collected on his (the appellant’s) behalf. There was no documentary evidence that established the existence of this debt or the amount so owing. The first respondent denied that he had collected any money on the appellant’s behalf and Nield DCJ accepted this.

25 I do not think it necessary to detail all the other obscurities in and flimsiness of the evidence relating to the moneys said to be owing by the first respondent to the appellant, but they were of the same order.

26 There is, of course, an inherent improbability in a person experienced in the ways of business, as was the appellant, lending more than $200,000 in seven instalments or, in appointing someone a collection agent to collect large sums of money, without making some written record of the material elements of the transactions.

27 In addition, the first respondent was, to the appellant’s knowledge, a drug dealer, a drug addict and a person without fixed employment. By the time the indebtedness, the subject of the action, had been incurred, the first respondent had owed the appellant $16,000 for several years. He had not repaid this debt despite, according to the appellant, having made several promises to do so. The appellant indeed agreed that the first respondent was “the last person in the world that you would want to lend a quarter of a million dollars to”.

28 It is surprising to say the least, that the appellant produced no evidence of the moneys allegedly owing to him by the persons from whom the first respondent allegedly collected the money that he failed to account to the appellant. The principal debtors in this regard were John Sant and Jason Bourke. The appellant did not call them to testify. In the appellant’s written submissions it was suggested that the respondent should have called Jason Bourke, but the evidence of Jason Bourke was critical to the appellant’s case, not to that of the respondent.

29 The trial judge relied on all these matters in finding against the appellant. It was plainly open for him to do so. In my view, there was nothing that demonstrates that his Honour failed to use or misused his advantage of hearing or seeing the witnesses. Moreover, there was nothing in his findings that were glaringly improbable.

30 In the circumstances, the only way in which the appellant could establish some incontrovertible fact or facts that demonstrated that the trial judge’s conclusions were erroneous was if he could point to some document that refuted the respondents’ denials of liability.

31 In the written submissions the appellant complained that the trial judge had refused to allow him to tender a schedule of amounts owing to him by the first respondent. This schedule was a document allegedly compiled from the appellant’s records and the records of the first respondent. I have referred to this document when pointing out that the first respondent is illiterate. The appellant said that he had inspected the first respondent’s records (Grey Appeal Book 21). He said that the first respondent had showed him “the files” and had showed him “his records”. The appellant said that “we then were able to ascertain” the amounts owing. I understand this to mean, that is the word “we”, the appellant and the first respondent. The trial judge disbelieved this evidence. There was every reason to do so. It is difficult to believe that a person with the first respondent’s background would retain files, keep records and by reference to them, be able to discuss the detail with the appellant. He was, after all, only able to read his name. Accordingly, no weight could be given to the appellant’s schedule of amounts.

32 Next, the appellant sought to rely on certain correspondence between Lorton Duke and Xenos Jordan, two firms of solicitors. Lorton Duke represented the appellant and Xenos Jordan represented the second respondent and, for a material time, Jason Bourke in negotiations they had with the appellant and between themselves concerning the sale of property owned jointly by the respondents and Jason Bourke.

33 In the course of this exchange, Lorton Duke wrote to Xenos Jordan by letter dated 15 December 1999 stating:

“We are instructed that an amount of $270,000 is to be paid by Mr Jason Bourke and Mr Peter Bourke to satisfy the debt due by them to Mr Peter George”.

By letter dated 16 December 1999, Xenos Jordan replied:

“We advise that the agreement you refer to in that letter is in fact what we understand is to occur”.

Later, by letter dated 15 September 2000, Xenos Jordan sent another firm of solicitors acting for the appellant, a cheque for $90,000 and stated:

“[The] cheque … is in repayment of the amount owed by our client Jason Bourke to your client.
This cheque represents full payment of any and all indebtedness from our client owed to your client”.


The letter also referred to a document in which Jason Bourke acknowledged that he owed the appellant $150,000 and stated that that amount “incorporated the value” of an aeroplane that had been registered in Jason’s name. The letter enclosed documents relating to the ownership of the aircraft and stated that Jason would sign all documents required to effect transfer of ownership in the plane to the appellant.

The cheque for $90,000 was apparently accepted by the appellant.

34 It was submitted on the appellant’s behalf that it should be inferred from all the circumstances that Xenos Jordan were acting for the first respondent. But according to Mr Jordan, the solicitor in Xenos Jordan who dealt with the matter when the letters in question were written, Xenos Jordan did not act for the first respondent. Mr Jordan indeed testified that he did not speak to the first respondent “when Lorton Duke were sending me the letters” (Grey Appeal Book 32). The following exchange also took place:

“Q. I am talking about those letters you received from Lorton Duke on behalf of Peter George where there are allegations of substantial amounts of money due; you never took instructions on that, did you?
A. No I did not.”

I should also point out that it was accepted on behalf of the appellant, in oral argument this morning, that it was not put to Jordan in cross-examination that at the relevant time he was acting on behalf of the first respondent.

35 The trial judge believed Jordan that he was not acting on behalf of the first respondent when the letters relied on by the appellant were sent, and his Honour was entitled to make this finding.

36 In the circumstances, the correspondence between Lorton Duke and Xenos Jordan cannot be used to prove that the first respondent made any admissions about money owing by him to the appellant. Essentially, that correspondence, which establishes that at one time $150,000 was owing by Jason Bourke to the appellant, is irrelevant.

37 As regards the second respondent, it was submitted that the failure in Xenos Jordan’s letters to deny the existence of the alleged guarantee or that the second respondent owed money to the appellant, constituted an implied admission by the second respondent. But the letters written by Lorton Duke did not assert that the second respondent had guaranteed any indebtedness by the first respondent and did not assert that the second respondent was indebted to the appellant. In the circumstances, nothing in the correspondence establishes an implied admission that the second respondent owed money to the appellant.

38 The appellant attempted to make some point of the fact that in September 1998 both the first respondent and Jason Bourke wished to sell their share in 8 Lavender Place, Alfords Point to the second respondent. Both respondents and the second respondent’s de-facto spouse denied that, as far as they were concerned, the transaction had anything to do with the appellant. Whether Jason Bourke sold his share to the second respondent to obtain money to pay whatever he owed the appellant is not to the point. None of the documentation refutes the testimony of the respondents in regard to the dealings in connection with this property.

39 The appellant sought to rely on some remarks made by the first respondent’s counsel in an interlocutory application in the District Court. None of these remarks constituted an admission and the reliance is misplaced. I may say that the same applies for the argument in the written submissions that the “style” of the cross-examination of the appellant and Moskovich, corroborates the appellant’s case.

40 At a meeting between Moskovich, Jordan, the respondents and Jason Bourke, Moskovich stated that money was owing by Jason and the first respondent to the appellant. Thereafter, Moskovich was asked to leave, which he did. During the course of the meeting, which then continued between the respondents, Jason and Mr Jordan, the first respondent did not deny the statement made earlier by Moskovich, namely, that the first respondent owed money to the appellant. It was submitted that this omission to speak was an admission by the first respondent that he owed money to the appellant. But in context, there was no call for the first respondent to say anything. He was in a private discussion with his solicitors at the time and there was no requirement for him to refute what had been said earlier on behalf of the appellant.

41 Some further point was sought to be made about a reference to illegal transactions between the appellant and the first respondent made by one or other of the respondents when speaking to Moskovich in the course of the transactions leading up to the sale of the property to which I have referred. The illegal transactions were not identified, however, and there was no evidence that connected them with the loans alleged to have been made or the moneys alleged to have been collected on the appellant’s behalf. In the circumstances, the reference to the illegal transactions does not support the appellant’s case.

42 In my opinion, none of the arguments advanced on the appellant’s behalf demonstrate any error by his Honour. I would dismiss the appeal with costs.

43 HODGSON JA: I agree and would just add a couple of further comments. Although not foreshadowed in the notice of appeal, a submission was made that the primary judge was in error in making findings of credit that were not appropriately supported by reasons. In my opinion, the reasons given by the primary judge for his credit findings were adequate, particularly having regard to matters in the transcript such as those referred to by Justice Ipp.

44 A submission was made that reference by the first respondent in evidence to illegal transactions was a recent invention and therefore such as to be damaging to his credit, and also such as to support an inference that a particular meeting at a solicitor’s office was for the purpose claimed by the appellant.

45 In my view, this matter was not of such moment as to require express reference by the primary judge and not of such moment as to throw doubt on his assessment of credit. On the other aspect, the material in support of the inference claimed by the appellant as to the purpose of the meeting, as involving a means of payment of a debt by the first respondent, was so tenuous that an inference in favour of the appellant could not in any event be drawn.

46 The substantial case sought to be made out by the appellant was that an inference should be drawn from correspondence between solicitors concerning a proposed transfer of interests of the first respondent and his brother in certain property. However, as shown in the judgment of Justice Ipp, the involvement of the first respondent in that correspondence was tenuous in the extreme, and in my view that correspondence is insufficient to support a conclusion either that the transactions alleged by the appellant occurred or that the primary judge was in error.

47 GZELL J: I agree with the reasons given by both Justices Hodgson and Ipp.

48 HODGSON JA: So the order of the Court is appeal dismissed with costs.

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Last Modified: 07/21/2003