Irvine and Bugden v State Bank of New South Wales

[1997] QCA 420

IN THE COURT OF APPEAL	[1997] QCA 420
SUPREME COURT OF QUEENSLAND

Appeal No. 5137 of 1996.

Brisbane
[Irvine v. State Bank of NSW]

BETWEEN:

ROBERT WILLIAM IRVINE

(Second Defendant) Appellant

AND:

STATE BANK OF NEW SOUTH WALES LTD
ACN 003 963 228

(Plaintiff) Respondent

AND:

ROBERT ALFRED BUGDEN

(First Defendant)

___________________________________________________________________

Pincus J.A. Davies J.A. McPherson J.A.

___________________________________________________________________________

Judgment delivered 25 November 1997

Joint reasons for judgment of Pincus and Davies JJA, separate reasons of McPherson J.A
concurring as to the orders made.

___________________________________________________________________

APPEAL DISMISSED WITH COSTS

___________________________________________________________________________

CATCHWORDS: GUARANTEE - whether the bank documents show misleading

and deceptive conduct - whether the respondent was obliged to distribute money to the company but failed to do so - whether judge below was correct in finding there was no evidence that the company was entitled to any commissions after a particular settlement - whether interest was wrongly calculated - whether issues raised in argument in the appeal were raised in the District Court - whether a guarantor’s obligation cannot be enforced until the creditor first has recourse to other securities - whether appellant should be given leave to amend notice of appeal in relation to matters argued orally.

Counsel:	Appellant appeared on his own behalf. Mr P W Hackett for the respondent.
Solicitors:	Appellant appeared on his own behalf. Bain Gasteen for the respondent.
Hearing date:	19 August 1997.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 5137 of 1996.

Brisbane

Before Pincus J.A. Davies J.A. McPherson J.A.

[Irvine v. State Bank of NSW]

BETWEEN:

ROBERT WILLIAM IRVINE

(Second Defendant) Appellant

AND:

STATE BANK OF NEW SOUTH WALES LTD
ACN 003 963 228

(Plaintiff) Respondent

AND:

ROBERT ALFRED BUGDEN

(First Defendant)

JOINT REASONS FOR JUDGMENT - PINCUS AND DAVIES JJA.

Judgment delivered 25 November 1997

This is an appeal from a judgment of the District Court given in favour of the respondent bank in an action on a guarantee. The defendants in the action were Mr R A Bugden and the appellant Mr Irvine.

The appellant appeared for himself at the hearing of the appeal and made a number of points, not all of which appear to have been litigated below. Some of the matters orally argued are, and some are not, covered by the grounds set out in the notice of appeal. The appellant’s outline of argument makes a number of criticisms of the judgment appealed from; first and principally, it argues that a study of the relevant documents shows that the bank was guilty of misleading or deceptive conduct or unconscionable conduct or misrepresentation; and secondly, it complains that the bank failed to make certain distributions into the company’s account after 8 March 1991; and thirdly, it challenges the respondent’s calculation of interest. It appears to us that the convenient course is to begin by dealing with the three issues raised in the outline.

Misleading or deceptive conduct

The respondent set up a deed of guarantee executed by Bugden and the appellant on 25 July 1990. The appellant’s defence admitted executing such a document, but on a date later than 25 July 1990, and it set up oral representations made by one Grey on behalf of the respondent; the defence also complained of the respondent’s failure to advise the appellant of various matters relating to the guarantee. In addition, it advanced a case of unconscionable conduct.

The appellant’s outline says in para. 4:

"Without canvassing any of the disputed facts, it is submitted that the documents show misleading and deceptive conduct on the Bank’s part with regard to the applicability of the Guarantee to the second loan. There was no evidence that Irvine was given more information other than that contained in the documents . . . " (emphasis added)

The "second loan" referred to is that which is the basis of the respondent’s claim.

The outline raises a question not covered by the allegations in the defence; nor did the
appellant assert, in argument before us or in evidence below, that anything in the form of the
documents misled him. The judge remarked, as to the case of misleading conduct led below:

" . . . Irvine received from the Bank but did not rely upon either a standard loan details document or a minimum statements document, each of which he signed; . . . Irvine’s reason for his having signed the guarantee was that, since his co-directors had done so, he himself ought to do so that being, he considered at the time, the right and proper thing to do."

This finding is not challenged, either in the notice of appeal or in the outline or by oral submissions made by the appellant. It is, in our view, a complete answer to the misleading conduct claim (Wardley Australia Ltd v. The State of Western Australia (1992) 175 C.L.R. 514 at 525). The allegation of unconscionable conduct and that of misrepresentation dealt with by the outline rely on the same facts as are said to support the misleading conduct claim. The arguments advanced under these headings in the outline therefore all fail.

Bank’s failure to make distributions

The second point made in the outline is that the respondent was obliged to distribute certain money to Terranora Leisuretime Sales Pty Ltd ("the company") after 8 March 1991, but failed to do so; the outline says that had it done so there would have been no debt, the subject of the guarantee.

This point is made in the notice of appeal ("ground 2 f") and was discussed by the appellant in his oral argument. The respondent’s contentions, on this point, were that first, there was a resolution to wind up the company and that was enough to justify a direction to the respondent not to pay any further monies to the company and, secondly, that there was no evidence that the company was entitled to any money after 28 February 1991. The oral submissions made by the appellant about this point were, principally, as follows. He said a Mr Jurd was the only one to sign a winding-up resolution and that minutes purporting to show such a resolution were inconsistent with those kept by the appellant’s wife, which showed that no resolution to wind-up was put at the relevant meeting.

In the respondent’s reply and answer, paras. 6 and 7, it is alleged in effect that Permanent Trustee Limited was required by a certain clause of a trust deed, dated 23 December 1987, to pay certain monies and that the company was entitled to be paid certain monies under an agreement of 24 June 1987. The trust deed is not in the record, although it was tendered; the judge treated the issue as depending on the terms of the agreement of 24 June 1987, which is Exhibit 30. Under cl. 9.10(c) of that agreement the respondent was obliged to pay certain monies to the company "provided no Potential Event of Default or Event of Default shall have occurred or be subsisting". The judge found that by 8 March 1991, the directors of the company had resolved to place it in voluntary liquidation and that that constituted a default under the agreement of 24 June 1987 to which we have referred. Reference to cl. 10.1(d) and to the schedule of the agreement shows that if the company was resolved to be wound-up, that was indeed an event of default. In his oral submissions the appellant discussed a communication made under the trust deed to which I have referred and, in effect, argued that it was not authentic. It was not possible to determine whether that aspect of the matter has any relevance, in the absence of the trust deed, but it seems unlikely that the deed would have placed any obligation on the respondent more extensive than that contained in the agreement of 24 June 1987, to which we have referred; and the appellant’s oral argument assumed that a question between the parties on which the fate of the appeal depended was whether there had been a resolution to wind the company up. Jurd gave evidence (146, 147) of a meeting of 8 March 1991 which he said was attended by the appellant, the appellant’s wife, Bugden, a Mrs Levy and Jurd himself. It is not absolutely clear from that evidence what resolution was passed at the meeting, but reference is made to putting "the company into voluntary liquidation through insolvency", to the faxing of minutes, and to a "resolve" as having been made; it seems likely that the judge relied on this evidence as sufficiently proving a resolution and we would not disagree with that conclusion. There are no minutes in the record and so it is not possible to discuss the appellant’s criticism directed to minutes.

The other question raised in the outline under this heading is whether the judge was right in finding as he did that there was no evidence that the company was entitled to any commissions or expenses after settlement 151, which his Honour said was completed on or about 28 February 1991. There is no specific reference to that finding in the notice of appeal, nor in the outline. However, in his oral submissions the appellant made what we take to be a reference to the matter, submitting that settlement 151 did not take place on 11 March, but on 3 March 1991. The complaint appears to be that money which the company should have received, under the provisions of the agreement of 24 June 1987 to which we have referred, under settlement 151, was paid elsewhere. We have found nothing in the record supporting this assertion. In particular, the appellant’s evidence does not deal with the topic.

The appellant’s case with respect to distribution of monies after 8 March 1991 must be

rejected.

Calculation of interest

The third and last point taken in the outline is that the interest is wrongly calculated and what is said to be a correct calculation is supplied. This point was not orally argued by the appellant, nor is there any reference to it in the notice of appeal. The argument of the respondent is based on Exhibit 18 which is in the record and is a statement of the amount claimed to be due as at 26 February 1996, the day the trial began. It seems unlikely that there could have been any argument directed to this point below; counsel for the respondent before us thought there had been none and one finds no reference to any controversy about the matter, in the reasons for judgment. We have found nothing to support the assertion in the outline, and it also must be rejected.

Matters not dealt with in outline

In addition to the three topics discussed, the appellant in his oral submission raised a

number of issues, which will now be mentioned.

1. He argued that a number of persons, whom he named, purported to sign cheques as directors of the company, when they had no authority to do so. There is no reference to this point in the reasons, in the notice of appeal, or in the outline. The defence, in a sense, alludes to it in para. 21, which asserts that any guarantee given by the appellant was conditional upon restrictions on the advance of monies to the company "which restrictions included, inter alia, a certain procedure whereby cheques drawn by the company were to be signed, and have not been met".

In the evidence given by Hogarth (78, 87, 90) there is discussion of this topic, but it is inconclusive, Hogarth finished by saying that he could not recall who was authorised to operate on the company’s account. The appellant’s evidence below made no reference to the point, nor are there any authorities to sign cheques in the record. It is therefore not possible to give effect to this complaint of the appellant.

2. Next, the appellant argued that Jurd was in a position of trust and, as we understood the argument, abused that position. There is no reference to this in the pleadings, the reasons, the notice of appeal or the outline. Evidence is to be found in the record that trust was reposed in Jurd (Bugden, 204), but that cannot make the point taken good, and it must be rejected.

3. The appellant also argued, orally, that the respondent stated that the company could only receive a 25% commission, but that in the appellant’s experience it should have been at least 45%. That is in accordance with the evidence of Bugden (206) to the effect that 45% reflected "the cost involved in the sales company on behalf of the management and development company". The point is not raised in the pleading, the notice of appeal, or the outline, nor does it appear to lead anywhere and it must therefore be rejected.

4. The appellant contended that he was not liable for an amount of $50,000 lent to the company because he did not know about any loan for $50,000 or agree to it. In his evidence below, the appellant made no specific reference to the loan of $50,000. The appellant argued that he had not been told about an intention to make the $50,000 loan. This is raised in the defence (paras. 17 and 18), but not discussed in the reasons, the notice of appeal or the outline. Hogarth gave evidence that at a meeting at which further overdraft assistance was discussed the appellant was not present (55), and Jurd agreed that the $50,000 overdraft was never "formally voted on by the sales company board of directors" (178) . However, Jurd claimed the matter was discussed with Bugden and Irvine (144) and the appellant did not raise any point about it when he gave evidence. The conclusion one must draw is that the issue was not, in the end, pursued below.

5. The appellant argued that there should have been 3 months notice given; this may refer to the company going into liquidation; we can find nothing in the record relating to the point.

6. The appellant said he is owed $771,835 for sales commission and other matters. This is not an issue to which reference can be found in any of the documents or in the record.

7. The appellant said that the bank should have taken a certain block of land, or the appellant’s money. This is not mentioned in the pleadings or in the reasons for judgment, but para. 2 f of the notice of appeal says in effect that the judge should have credited some money to the company’s account which, if so credited, would have meant that the company did not need an overdraft facility. There is reference in the evidence of Jurd (176) that at the meeting on 8 March 1991, referred to above, directors thought that land owned by Bugden would be enough to cover the then overdraft and the appellant said in evidence below (273) that he thought that the respondent would take money out of completed sales to pay off the loan and that the bank should have sold Bugden’s block of land. To some extent this point has been dealt with above, in discussing the allegation that the bank should have paid money to the company after 8 March 1991. As far as Bugden’s land is concerned, apart from the deficiency of evidence about the matter, there is nothing in the 1987 agreement, nor in the general law, to say that a guarantor’s obligation cannot be enforced until the creditor first has recourse to any other securities.

8. There was also a complaint about the witnessing of a certain document by Mr Hogarth;

it was said that Grey was the witness. This point appears to be of no consequence; there was
in the end no dispute with respect to the execution of any relevant document.

9. The appellant said that he wanted independent advice about the loan documents but was given an assurance that they would operate only for a few weeks. Hogarth said the guarantors (who of course included the appellant) were given the opportunity to seek their own advice (59) and Grey, the relevant officer of the respondent, said he did not discuss with the appellant his signing the guarantee (93). It was suggested to him on behalf of the appellant below that he described the guarantee to the appellant as "merely to tidy up some paperwork" (127). In the appellant’s evidence (256, 257) he said that Grey asked him to attend the bank to "tidy up some paperwork" and also said that he was told "we had money in the trust account that would pay this in a short space of time . . . ". The judge made no reference to the discrepancy between the evidence of Grey and that of the appellant, to which we have referred, but he dealt with evidence given by Bugden, to similar effect, saying that it was "not accurate" and giving an explanation for that conclusion. There is nothing about this aspect of the matter in the notice of appeal or the outline and it does not seem to be a matter which this Court should attempt to pursue further.

10. Lastly, the appellant said that the respondent was paid out and the Commonwealth Bank took over the debt. There is some evidence given by Bugden on that subject (204), but nothing else relating to it.

General

The requirement that grounds be stated in a notice of appeal has, like the process of pleading at first instance, the purpose of identifying issues. It happens fairly commonly, in this Court, that the appellant’s outline of argument raises matters which are not mentioned in the notice of appeal; since the outline is ordinarily delivered well before the hearing of the appeal, there is usually no great difficulty in obtaining, if necessary, leave to incorporate in the notice of appeal a matter raised in the outline. Where, however, an argument is advanced orally which has not previously been foreshadowed - as happened, in relation to a number of the appellant’s oral arguments - the appellant is in greater difficulty. Even then, and particularly where the appellant is unrepresented, it will on occasions seem necessary to accede to an application to amend the notice of appeal and to take such further steps as may seem necessary properly to decide the new point - for example, obtaining material to supplement the record and providing an opportunity, by adjournment or otherwise, to the respondent to consider and answer the new point.

In the present case, as to the new matters raised by the appellant, it does not appear to us that any of them is of sufficient substance to warrant such steps. The appellant bears the onus of showing that the judgment under appeal is incorrect and has not discharged it.

We would dismiss the appeal with costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 5137 of 1996

Brisbane

Before Pincus J.A. Davies J.A. McPherson J.A.

[Irvine v. State Bank of NSW]

BETWEEN:

ROBERT WILLIAM IRVINE

(Second Defendant) Appellant

AND:

STATE BANK OF NEW SOUTH WALES LTD.
ACN 003 963 228

(Plaintiff) Respondent

AND:

ROBERT ALFRED BUGDEN

(First Defendant)

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered 25 November 1997

I agree that, for the joint reasons given by Pincus and Davies JJ.A., this appeal should be

dismissed with costs.