Jabulani Pty Ltd v Walkabout II Pty Ltd
[2016] NSWCA 267
•22 September 2016
|
New South Wales |
Case Name: | Jabulani Pty Ltd v Walkabout II Pty Ltd |
Medium Neutral Citation: | [2016] NSWCA 267 |
Hearing Date(s): | 28 July 2016 |
Decision Date: | 22 September 2016 |
Before: | Bathurst CJ; Leeming JA; Payne JA. |
Decision: | (1) Purported appeal in the notice of appeal filed 7 December 2015 is dismissed as incompetent; |
Catchwords: | PARTNERSHIP – appointment of receivers – adoption of referees’ report |
Legislation Cited: | Annual Holidays Act 1944 (NSW) |
Cases Cited: | Aroona Developments Pty Ltd (in liq) v Killen (2004) 50 ACSR 668; [2004] NSWCA 363 |
Category: | Principal judgment |
Parties: | Jabulani Pty Ltd ACN 108 084 126 as Trustee for the Simunye Discretionary Trust (first appellant / first cross-respondent) |
Representation: | Counsel: |
File Number(s): | 2015/359050 |
Decision under appeal: | |
Court or Tribunal: | Supreme Court of NSW |
Jurisdiction: | Equity Division |
Citation: | [2015] NSWSC 1569 |
Date of Decision: | 22 October 2015 |
Before: | Lindsay J |
File Number(s): | 2012/298134 |
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
HEADNOTE
[This headnote is not to be read as part of the Judgment]
In 2011, the corporate appellants, (“Jabulani” and “Kwafunda”) and the respondent (“Walkabout II”) formed a partnership, referred to in this judgment as “the P3 Partnership”. The natural persons who are the 100 per cent shareholders of each of the partners are Filomena Sousa (second appellant), Daniel Wilkinson (fourth appellant), and Barry Henson, who is not a party to the litigation.
A dispute developed between the parties soon after the formation of the P3 Partnership and resulted in proceedings being commenced by the respondent, Walkabout II, in September 2012 seeking the appointment of a receiver to the P3 Partnership.
In March 2014, the receivers to the P3 Partnership were appointed as referees to provide a report on the account of the partnership. The referees issued a “final report” dated 14 November 2014 and a “supplementary report” dated 31 March 2015. It is the “supplementary report” dated 31 March 2015 which has been treated as the relevant report for the purposes of its adoption or variation by the Court.
The appeal and cross-appeal arose out of two findings made by the referees.
1. The subject of the appeal was the referees’ finding that the appellants continued to trade using the P3 Partnership’s assets until 6 December 2012 without the authority of the receivers. The referees found that this trading resulted in a net loss of $115,670 suffered by the P3 Partnership, and this amount should be repaid by the appellants to the P3 Partnership.
2. The subject of the cross-appeal was the referees’ finding that no adequate explanation had been given by Ms Sousa or Mr Wilkinson as to why the P3 Partnership annual leave provision increased from $29,061 in FY11 to $212,959 in FY12. The referees had found that $162,937 should be repaid to the P3 Partnership by the appellants. The primary judge rejected this part of the referees’ report, finding that the referees had misunderstood an explanation for the increase and erroneously discounted primary documentation.
On the appeal, the appellants submitted that the primary judge erred by adopting the report concerning unauthorised trading without specifically identifying a breach of fiduciary duty or some other legal duty by the appellants causing a loss to the P3 Partnership.
On the cross-appeal, the cross-appellant submitted that the primary judge fell into a House v The King (1936) 55 CLR 499 error by applying the wrong principle in rejecting part of the report relating to annual leave entitlements.
At the commencement of the appeal, the Court invited submissions from the parties about whether the leave to appeal and to cross-appeal was required in the present case. Neither party had addressed this issue in their written submissions or sought leave to appeal.
Held per the Court:
1. Leave to appeal was required as less than $100,000 was “at issue” in the appeal. If the appellants were unsuccessful on the appeal, and the appellants were required to pay the $115,670 back to the P3 Partnership, the corporate appellants will receive one-third of that amount each, namely $38,557: [76], [82].
2. Leave to cross-appeal was required as less than $100,000 was “at issue” in the cross-appeal. The cross-appeal related to an allowance for annual leave of $162,937. The cross-appellant’s share of the distribution from the P3 Partnership and the likely change in wealth of the cross-appellant if the appeal was successful was only one-third of that sum, being $54,312: [77], [83].
Dunn v Ross Lamb Motors [1978] 1 NSWLR 26; Jensen v Ray [2011] NSWCA 247; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164; Nanschild v Pratt [2011] NSWCA 85 (applied)
Environment Protection Authority v Condon as liquidator for Orchard Holdings (NSW) Pty Ltd (in liq) (2014) 86 NSWLR 499; [2014] NSWCA 149, Aroona Developments Pty Ltd (in liq) v Killen (2004) 50 ACSR 668; [2004] NSWCA 363 (distinguished)
3. Ordinarily, leave to appeal to the Court of Appeal in matters involving small claims such as the present is limited to matters which involve issues of principle, questions of general public importance or an injustice which is reasonably clear: [87].
Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69 per Kirby P and Joo v Yoo [2016] NSWCA 172 (applied)
4. The appeal raised no issue of principle, question of general public importance or an injustice which was reasonably clear: [90] – [91], [104].
5. The cross-appeal raised no issue of principle, question of general public importance or an injustice which was reasonably clear: [105] – [106].
6. In circumstances where no party challenged the competency of the appeal or cross-appeal, no party is entitled to costs of the appeal if the appeal is nonetheless dismissed as incompetent. This was the appropriate order in this case: [117], [119].
Uniform Civil Procedure Rules 2005 (NSW) r 51.41
Kassem v Colonial Mutual General Insurance Co Ltd [2001] NSWCA 38, Falamaki v Wollongong City Council (2001) 113 LGERA 207; [2001] NSWCA 55, Asuzu v Council of the New South Wales Bar Association [2012] NSWCA 406 (applied)
JUDGMENT
THE COURT: This matter concerns a long running partnership dispute between three partners, Jabulani Pty Ltd ACN 108 084 126 as Trustee for the Simunye Discretionary Trust (first appellant / first cross-respondent) (“Jabulani”), Kwafunda Pty Ltd ACN 108 084 117 as Trustee for the Funda Discretionary Trust (third appellant / third cross-respondent) (“Kwafunda”) and Walkabout II Pty Ltd ACN 134 709 881 as Trustee for the Walkabout Trust (the respondent / cross-appellant) (“Walkabout II”).
The natural persons who are the 100 per cent shareholders of each of the partners are Filomena Sousa (second appellant / second cross-respondent), Daniel Wilkinson (fourth appellant / fourth cross-respondent), and Barry Henson, who is not a party to the litigation. For all relevant purposes on this appeal the interests of the corporate appellants and the individual appellants are identical. Although, as will become clear, this is a case where leave to appeal and cross-appeal is required, we will refer to the parties as the “appellants” and the “cross-appellant” or “respondent”.
The history of this matter is an unhappy one. The latest evidence is that the net assets of the partnership which is the subject of this dispute are $258,317. On the evidence a sum greater than that has been spent on fees paid to the receivers to the partnership who subsequently became the referees tasked with taking an account of the partnership. It was apparently hoped by the parties that the appointment of referees would be a “low-cost” and informal option. Unfortunately, it has not proved to be such.
Each side of the dispute was represented. No doubt, in accordance with section 56 of the Civil Procedure Act2005 (NSW), the desirability of reaching a commercial resolution has been explained to all of the parties. It is clear that no such commercial resolution has been achieved.
It is nonetheless worth emphasising to the parties that the partnership’s resources, to the extent not already destroyed by this internecine dispute, could be completely consumed by its continuation.
A brief history of the matter
In 2011, Jabulani, Kwafunda and Walkabout II formed a partnership to exploit, with a view to profit, intellectual property by providing training in services described as “error reduction” for client businesses. That partnership will be referred to in these reasons as “the P3 Partnership”.
Prior to its formation, a partnership carrying on the same business was operated by the corporate appellants, Jabulani and Kwafunda. That earlier partnership will be referred to in these reasons as “the P2 Partnership”.
A dispute developed between the parties soon after the formation of the P3 Partnership and resulted in proceedings being commenced by the respondent, Walkabout II, in September 2012 seeking the appointment of a receiver to the P3 Partnership.
On 8 October 2012, orders were made for the appointment of receivers to the P3 Partnership.
It was submitted on this appeal that the proceedings were “largely resolved” by orders made by the primary judge on 18 March 2014. In what follows, it will be seen that was not so.
On 18 March 2014, orders were made by consent to the effect that the receivers to the P3 Partnership be appointed as referees pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 20.14 to provide a report on the account of the partnership that had been ordered to be taken on 8 October 2012.
The referees issued a “final report” dated 14 November 2014 and a “supplementary report” dated 31 March 2015. It is the “supplementary report” dated 31 March 2015 which has been treated as the relevant report for the purposes of its adoption or variation by the Court.
On 22 October 2015, the primary judge gave judgment on the respondent’s application under UCPR r 20.24 for the adoption of the report and the appellants’ application for variations of parts of the report.
The primary judge adopted the report, in part, with variations, and rejected other parts of it.
The subject of the appeal is the adoption by the primary judge of one part of the referees’ report relating to the so called “unauthorised trading” issue. The subject of the cross-appeal by Walkabout II is the extent to which his Honour rejected one part of the report relating to the so called “annual leave” issue.
History of proceedings
On 25 September 2012, a summons was filed in the Supreme Court by Walkabout II against the four appellants to these proceedings.
On 28 September 2012, an order was made by consent that[1]:
[1] The Schedule to those orders outlined a non-exhaustive list of intellectual property.
Until further order, the defendants be restrained, by themselves, their officers, employees or agents, from:
a trading under;
b licensing, suffering or causing any third party to trade under;
c marketing, selling, distributing or otherwise providing (or licensing, suffering or causing any third part to trade under;
d licensing, suffering or causing any third party to market, sell, distribute
or otherwise provide any product bearing any of the trade marks set out in Item 1 of the Schedule to these Orders, or any trade mark which is substantially identical with, or deceptively similar to any of them, save as is necessary for the winding up of the partnership between the plaintiff and the first and third defendants styled “Talsico”, “Talsico International” and “Talsico Australia” (the partnership).
Until further order the defendants be restrained, by themselves, their officers, employees or agents, from performing, or authorising, licensing, suffering or causing any other party to perform any act comprised in the copyright in any of the works set out in item 2 of the Schedule to these Orders, save as is necessary for the winding up of the partnership.
Until further order the defendants be restrained, by themselves, their officers, employees or agents, from copying, using, disseminating or divulging any of the confidential information set out in item 3 of the Schedule to these Orders, save as is necessary for the winding up of the partnership.
On 8 October 2012, orders were made, again by consent, that:
1. A declaration that the partnership between the plaintiff and first and third defendants styled “Talsico”, “Talsico International” and “Talsico Australia” was dissolved on 17 September 2012 (“the partnership”).
2. An order that the partnership be wound up under the direction of this Court.
3. An order that Mr Atle Crowe-Maxwell and Mr James Michael White of BDO East Coast Partnership, official liquidators, be appointed joint and several receivers of the partnership without security.
4. An order that the plaintiff and the defendants deliver all assets of the partnership in his, her, its or their custody possession or control to the said receivers within 7 days of the making of this order.[2][2] Order 4 was struck through in handwriting and initialled.
5. An order that the receiver be given the powers in relation to the partnership as are given to a liquidator pursuant to the provisions of s. 477 of the Corporations Act 2001.
6. An order that the receivers be authorised in addition to the powers which they may have apart from this order to:
a. Sell the business or assets of the partnership, if the receivers think best, upon the following terms and conditions:
i. The sale be under the control and at the direction of the receivers;
ii. The sale to be by private auction;
iii. Liberty to any party to bid at the auction;
iv. The auctioneer/s to be appointed by the receivers;
v. The reserve for the auction to be determined by the receivers after taking into consideration the advice of the auctioneer/s or if they cannot agree then the reserve to be the average of the reserves determined by each of the auctioneer/s and in default of any such determination, to be fixed by the Court.
b. To invest the proceeds of any sale of the partnership in any mode of investment permitted by law for the investment of trust funds pending the determination of the parties entitlement to such proceeds.
7. An order that an account be taken and an inquiry be held as to:
a. All of the relevant dealings and transactions of the said partnership and of the said partners or either of them in relation to the said partnership for the purpose of establishing 7(b) and (c) below;
b. What are the assets and liabilities of the partnership;
c. What are the respective interests of the partners in the said assets.
On 8 October 2012, the BDO East Coast Partnership’s Messrs Crowe-Maxwell and White consented to be appointed as receivers but not managers of the P3 Partnership.
On 12 March 2014, an amended statement of claim was filed pursuant to leave granted by the primary judge.
On 18 March 2014, the primary judge made orders, again by consent, that:
1. By and with the consent of the parties, orders and notations in accordance with the draft “consent orders” initialled by me dated today and placed with the papers.
2. Note that the parties advise the court that the receivers have consented to their appointment as referees pursuant to these orders.
3. Order that the costs of the proceedings to date:
a. Be paid out of the partnership assets after payment of all other expenses of the partnership and subject to any claim to priority that the receivers/referees may have to payment of their remuneration out of those assets; and
b. To the extent that no assets are available to meet the costs of the parties, be borne by the parties personally.
4. Reserve liberty to apply in the working out of those orders, including the order for costs.
5. Direct that the solicitor for the Plaintiff provide to my Associate an electronic copy of the draft “consent orders”.
6. Order that exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be returned intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.
The orders made on 28 September 2012, set out above, restraining the conduct of the appellants were continued by consent.
On 17 April 2015, notations and orders were made by McDougall J, relevantly:
I. Note that each of the second defendant and third defendant in person, and each of the first defendant by its director and officer, the second defendant; and the third defendant by its director and officer, the fourth defendant; undertakes to the Court that once the Court has dealt with the question of the adoption of the referees’ report dated 31 March 2015 he, she or it as the case may be, will forthwith pay into court for the benefit of the partnership between the plaintiff, the first defendant and the third defendant, such amount (if any) as may be found to be so payable by him her or it, once the question of the adoption of the report has been decided.
…
5. Mr James White and Mr Atle Crowe-Maxwell be discharged as Receivers of the Partnership on the day following the day on which the payment into the fund contemplated by Order 4 above is completed.
The referees’ reports
The receivers, in their capacity as referees, delivered to the Court their reports dated 14 November 2014 and 31 March 2015. The only two relevant issues for present purposes were the referees’ findings about:
(1)annual leave (ultimately the subject of the cross-appeal); and
(2)unauthorised trading (ultimately the subject of the appeal).
There was a lengthy process of consultation with all parties prior to the referees providing their final report. All parties were given the opportunity to comment and provide additional material in response to a draft of the report circulated at some time in November 2014 and a further draft circulated on 23 December 2014, which were both near identical to the final report in all relevant respects relating to this appeal and cross-appeal.
Annual leave provision
The referees’ report noted that the P3 Partnership’s Annual Leave Provision increased from $29,061 in FY11 to $212,959 in FY12. The referees made inquiries into this increase and found:
The P3 Partnership’s former internal accountant (“JB”) informed the referees that the increase reflected a “transfer” of Ms Sousa’s and Mr Wilkinson’s annual leave balances from “Talsico US” (presumably Talsico LLC) to the Partnership;
JB produced an email sent to her by Ms Sousa instructing her to record those amounts as a liability in the P3 Partnership accounts;
following inquiries from the referees, Ms Sousa said that to the best of her knowledge there was no transfer; that annual leave entitlements had always been accrued in the accounts of the P3 Partnership. Ms Sousa said that annual leave provisions were “manually” transferred to the accounting software used by the P3 Partnership and that perhaps these amounts had been omitted in error and later corrected;
Mr Wilkinson also stated that there was no transfer, but offered no explanation for the increased provision in the accounts of the P3 Partnership.
The referees found Ms Sousa’s proffered explanation to be unconvincing. They found that they had not been provided with “any satisfactory explanation” about the increased annual leave provision. The referees’ report found in respect of annual leave that Ms Sousa should repay $71,630 and Mr Wilkinson should repay $91,307 to the P3 Partnership, being a total of $162,937.
The primary judge rejected this aspect of the referees’ report. That order, reflected in order 2(a) made on 10 November 2015, was the subject of the cross-appeal.
Unauthorised trading
The referees’ report identified unauthorised trading using assets of the P3 Partnership taking place between 9 October 2012 and 6 December 2012. The referees’ report addressed two questions.
First, a sum of $184,108.36 was paid out of P3 Partnership assets, purportedly as redundancy payments. The referees found that:
of that $184,108.36, $83,111.52 was paid to Ms Sousa and $71,236.80 was paid to Mr Wilkinson;
the P3 Partnership, as a small business, was not required to make redundancy payments to employees on termination;
Ms Sousa and Mr Wilkinson both asserted that the redundancy payments were made in accordance with statutory guidelines and were consistent with the P3 Partnership’s previous practice of paying redundancies;
Ms Sousa and Mr Wilkinson both conceded that the funds should not have been dealt with without the express authority of the receivers.
A challenge to these findings was rejected by the primary judge and is not the subject of an appeal.
Second, Ms Sousa and Mr Wilkinson continued to trade using the P3 Partnership’s assets until 6 December 2012 without the authority of the receivers. The referees found that:
the P3 Partnership received new income of $65,968 from the unauthorised trading;
the P3 Partnership incurred $181,638 of expenses in conducting the unauthorised trading;
the net cost of this period of unauthorised trading to the P3 Partnership, including the additional annual leave entitlements accrued, was $115,670;
by the time of writing the report, contrary to their position during the referees’ investigations, Ms Sousa and Mr Wilkinson conceded that they had dealt with property of the P3 Partnership during the period of the unauthorised trading.
In those circumstances, the referees found that the appellants were responsible for the loss suffered by the P3 Partnership, being $115,670, and should repay that amount to the P3 Partnership.
The primary judge adopted this part of the referees’ report in order 2(b) of the orders dated 10 November 2015. This is the subject of the appeal.
The decision of the primary judge
On 22 October 2015, the primary judge delivered his reasons. His Honour described the procedural context including the orders made by the Court on 28 September 2012, 8 October 2012, 18 March 2014 and 17 April 2015 set out above.
The primary judge noted that the receivers retained partnership funds pending consideration of their reports and their discharge would not be fully effective until those funds were paid into Court or otherwise dealt with consensually.
The primary judge noted that having published their reports to the parties the receivers had ceased active participation in the proceedings.
The primary judge identified two motions before the Court. The first was the plaintiff’s notice of motion filed on 20 April 2015 and the second was the defendants’ amended notice of motion filed on 29 May 2015.
The proceedings were governed by UCPR r 20.24 which provided as follows:
20.24 Proceedings on the report
(1) If a report is made under rule 20.23, the court may on a matter of fact or law, or both, do any of the following:
(a) it may adopt, vary or reject the report in whole or in part,
(b) it may require an explanation by way of report from the referee,
(c) it may, on any ground, remit for further consideration by the referee the whole or any part of the matter referred for a further report,
(d) it may decide any matter on the evidence taken before the referee, with or without additional evidence,
and must, in any event, give such judgment or make such order as the court thinks fit.
(2) Evidence additional to the evidence taken before the referee may not be adduced before the court except by leave of the court.
On the substantive issues, the parties agreed that the principles to be applied by the primary judge (and in this Court) concerning the discretion to adopt, vary or reject in whole or in part a report of a referee were those conveniently summarised by McDougall J in Chocolate Factory Apartments v Westport Finances [2005] NSWSC 784 at [6] – [8] and this Court in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184.
The primary judge noted that the parameters of the parties’ present dispute were defined by reference to Table 9.1 in the referees’ summary of findings. The Table commences with an estimate of the net assets of the partnership as at 28 February 2015 of $258,317.
This figure for net assets was obtained by identifying in the balance sheet annexed to the report total assets of $826,313 comprising cash and a term deposit. The balance sheet notionally provided for the addition of potential recoveries (which were attributed with a nil value) and the subtraction of potential liabilities, being all those liabilities then known to the referees (including the receivers’ and referees’ costs), of $567,995.
Each of the items the subject of this appeal was identified in the balance sheet as a “potential recovery”. The only material “potential liabilities” noted in the balance sheet were the parties’ costs of the proceedings before the primary judge and any additional receivers’ and referees’ fees and expenses over and above the amounts of $180,131 and $75,949 which were already taken into account in calculating the net assets of the P3 Partnership of $258,317.
The parties agreed on the inclusion of a liability being the sum of $167,194.50, being long service leave to be allowed in favour of the two natural persons who the primary judge recorded “for practical convenience, may be recognised as the “partners on the defendants’ side of the record”. This amount was already accounted for in the balance sheet in determining the net assets of the P3 Partnership of $258,317.
The disputes before the primary judge related to the following matters:
(1)first, $162,937 comprising annual leave entitlements paid to the appellants which the referees’ report found should be repaid by the appellants;
(2)second, $154,384.32 comprising redundancy payments made to the appellants which the referees’ report found should be repaid by the appellants (this amount is no longer in dispute);
(3)third, $115,670 comprising losses incurred by the P3 Partnership by reason of unauthorised trading by the appellants following the appointment of the receivers which the referees’ report found should be repaid by the appellants.
The primary judge’s reasons were brief. His Honour concluded that the referees’ report should be adopted, subject to the following qualifications.
First, as noted above an allowance should be made in the sum of $167,194.50 in favour of the appellants for long service leave. This amount was already accounted for in determining the net assets of the P3 Partnership of $258,317. This was not the subject of the appeal or the cross-appeal.
Second, the primary judge adopted the referees’ report concerning $154,384.32 comprising redundancy payments made to the appellants which the referees found should be repaid by the appellants. This too was not the subject of the appeal or the cross-appeal.
Third, the primary judge rejected the referees’ finding that $162,937 comprising annual leave entitlements paid to the appellants should be repaid by the appellants. The primary judge accepted the appellants’ submission that the referees misunderstood an explanation given to them by the P3 Partnership bookkeeper about why the annual leave entitlements of the second and fourth appellants had been charged to the P3 Partnership, with the consequence that they discounted primary documentation provided by the appellants. The primary judge also found that there was an incongruity in accepting the second and fourth appellants’ entitlement to long service leave (as the respondent on the appeal did) but rejecting their entitlement to annual leave. This was the subject of the cross-appeal.
Fourth, in relation to the recovery of unauthorised trading losses, being the only other subject in dispute, the primary judge accepted the respondent’s submission that the report was appropriately thorough, analytical and scientific in its approach. The primary judge did not accept the appellants’ contention that the qualification contained in the interlocutory injunctions granted against them on 28 September 2012 conferred upon them authority to trade in P3 Partnership assets for the purpose of the winding up of the Partnership. The primary judge found that partners who dealt in partnership assets following dissolution of the partnership, pending its winding up, retained fiduciary obligations referrable to their dealings in partnership assets: Chan v Zachariah (1984) 154 CLR 178. This was the subject of the appeal.
The primary judge concluded that the referees/receivers did not acquiesce in the appellants’ post-receivership trading in circumstances where, because of the dispute about partnership property, the appellants claimed an entitlement to do what they did. The appellants “traded at their own risk”. Having done so, having had an opportunity to engage with the referees in the adjudication process leading to the referees’ final report, there was no basis upon which the referees’ finding should be disturbed.
On 10 November 2015, the primary judge made orders reflecting these findings:
1. ORDER that Table 2.1 (comprising sections 2.1 and 2.2 relating to annual leave) of the Referees’ report dated 31 March 2015 (the Report) be rejected.
2. ORDER that Table 9.1 on page 18 of the Report be varied as follows:
(a) The reference to recovery of annual leave in the sum of $162,937.00 be deleted;
(b) the figure for recovery of losses arising from unauthorised trading of “$181,638.00” be deleted and replaced by the figure “$115,670.00”;
(c) A reference under “Potential Liabilities” to the long service leave entitlements of the second and fourth defendants in the total sum of $167,194.50 be included.
3. ORDER that the Report otherwise be adopted by the Court pursuant to UCPR Rule 20.24.
4. ORDER that the plaintiff’s notice of motion dated 21 April 2015 and the defendants’ amended notice of motion dated 28 May 2015 are otherwise dismissed.
5. ORDER that the Second and Fourth Defendants pay into Court for the partnership constituted by the plaintiff, first and third defendants (the Partnership) the sum of $83,967.30.
6. ORDER that the parties’ costs of the notices of motion referred to in order 4 be paid from the Partnership fund.
The Notice of appeal
Grounds 1 – 3
The notice of appeal filed on 7 December 2015 provided:
The primary judge erred in fact and law in determining that the Appellants are liable at law to pay $115,670.00 without making findings of fact supporting a legal liability or identifying the breach of fiduciary duty committed by the Appellants, or any supporting evidence for such finding (Reasons at [39]-[40]).
The primary judge failed to give adequate reasons for finding the Appellants liable as a matter of law to pay $115,670.00 to the partnership (Reasons at [34] and [39]-[40]).
The primary judge should have found that the facts as found by the referees did not support a finding that the Appellants were liable to pay $115,760.00 [sic] to the partnership.
All three grounds were directed, and only directed, to the appellants’ submission that the primary judge erred in adopting section 4.2 of the referees’ report concerning unauthorised trading without specifically identifying a breach of fiduciary duty or some other legal duty by the appellants causing a loss to the P3 Partnership.
The appellants emphasised that there was no basis for such a finding in the referees’ report and therefore the primary judge should have, but failed to, consider the legal issues afresh. The appellants submitted that the primary judge did not make any finding of breach of a legal or equitable duty, nor was such a finding open to him on the face of the report.
The primary judge’s reasons, the appellants submitted, were inadequate and failed to identify and apply the relevant legal principles applying to the remedy of equitable compensation. The appellants submitted that the majority of the net loss was spent on staff wages and related expenses, a liability that they were obliged to meet regardless of any “unauthorised trading”. It followed, they submitted, that those expenses could not found a breach of duty that caused loss to the P3 Partnership.
Grounds 4 ‑ 6
Grounds of appeal 4 ‑ 6 relate to a bundle of documents sought to be tendered (marked for identification as “MFI D3”), which were not admitted by the primary judge.
The evidence contained within MFI D3 required leave pursuant to UCPR r 20.24(2). The primary judge found that to allow the tender of MFI D3;
would substantially undermine the alternative dispute resolution procedure for which references to referees provide, and condemn the parties to a reopening of factual disputes relating to findings made by the receivers.
The primary judge said that the parties could fairly and should be held to the dispute resolution procedure for which a reference to referees provides. His Honour stated:
They should not be permitted under the guise of a debate about the terms upon which a reference report should be adopted, to reagitate questions in dispute.
The notice of cross-appeal
Issues on the cross-appeal
Walkabout II relied upon two grounds in its cross-appeal:
The primary judge erred in fact and law in determining that the Cross Respondents were not liable at law to pay to the Partnership $162,667.00 [sic] that the Second and Fourth Defendants had received from the Partnership (reasons at [34] ‑ [37]).
The primary judge erred in fact and law in finding that the Receivers misunderstood an explanation given to them by the Partnership bookkeeper about why annual leave entitlements of the Second and Fourth Cross Respondents had been charged to the Partnership in that:
It was not open on the evidence to the primary judge to make a finding as to the Receivers’ understanding or misunderstanding; and
The finding by the Receivers that the annual leave amounts were repayable by the Cross Respondents was open to them on the evidence and the submissions before them.
Walkabout II submitted that the primary judge fell into a House v The King (1936) 55 CLR 499 error by applying the wrong principle in rejecting part of the report relating to annual leave entitlements.
As noted above, the referees made enquiries regarding the substantial increase in annual leave entitlements between FY11 and FY12. Those enquiries resulted in the referees rejecting an account of the increase offered by Ms Sousa. The primary judge found that the referees had misapprehended the responses of the P3 Partnership’s accountant. The cross-appellant submitted that the primary judge rejected this aspect of the report because his Honour would have reached a different factual conclusion to that reached by the referees.
The cross-appellant submitted that his Honour should only have rejected part of the report if the referees reached a decision which no reasonable referee could have reached, or rather, that if there was sufficient material to enable the referees to reach the conclusion that they did, his Honour should not have disturbed their findings. The cross-appellant further submitted that not only was there sufficient material for the referees to have reached the conclusion contained in the report, but that was the preferable conclusion.
Leave to appeal and cross-appeal is required
At the commencement of the appeal, the Court invited submissions from the parties about whether the leave to appeal and to cross-appeal was required in the present case. Neither party had addressed this issue in their written submissions or sought leave to appeal.
Facts relevant to the grant of leave to appeal and cross-appeal
In paragraph 16 of the statement of claim in this matter the cross-appellant alleged that the P3 Partnership was a partnership of three equal shares, both as to assets and to profits. That allegation was admitted in paragraph 16 of the defence by all of the present appellants.
Accordingly, each of the partners will receive a one-third distribution of the remaining funds of the P3 Partnership after these proceedings have been completed. It was submitted by the appellants that this conclusion was subject to the following relevant “uncertainties”:
(1)the distribution rights to the partners may be other than what the parties by their pleadings have each accepted; and/or
(2)the P3 Partnership may have negative assets and no distribution will be made.
As to the first potential uncertainty, although the suggestion was tentatively made by the appellants and the cross-appellant that the partners’ respective rights on a distribution might somehow be different to the distribution rights alleged in the statement of claim and admitted in the defence, neither explained how this could be so. No evidence was tendered or referred to which lent any support to that suggestion.
In those circumstances, the appropriate conclusion is that the partners’ respective rights, both as to capital and income, were each a one-third interest in the P3 Partnership’s assets.
As to the insolvency risk, the evidence was that at February 2015:
(1)the P3 Partnership had net assets of $258,317;
(2)each of the items the subject of this appeal was identified as a “potential recovery”; and
(3)the only material “potential liabilities” about which there was evidence were the parties’ costs of the proceedings before the primary judge and any additional receivers’ and referees’ fees and expenses over and above the amounts of $180,131 and $75,949 recorded in the balance sheet forming part of the referees’ final report, which were already taken into account in calculating the net assets of the P3 Partnership of $258,317.
The submission was made that there was “uncertainty” about the parties’ costs of the proceedings before the primary judge and any additional receivers’ and referees’ fees and expenses. It was submitted that the referees recognised a degree of uncertainty and that these amounts may be so significant that it was reasonably arguable the net assets of $258,317 may be exhausted and thus, the appellants would not each receive back as a partnership distribution one-third of any amount they were ordered to contribute to the P3 Partnership.
That submission should not be accepted. On the material before the Court, it should be concluded that the P3 Partnership, after payment of the parties’ costs of the one day matter before the primary judge and such additional costs of the referees as there may be after completion of their final report will not exhaust its net assets of $258,317.
In addition, in addressing net assets of the P3 Partnership it will be recalled that the appellants were ordered to pay the P3 Partnership the sum of $154,384.32 comprising redundancy payments and this order was not the subject of this appeal. Thus the net assets of the P3 Partnership will be enhanced to that extent.
The parties did not make any submission or refer to any evidence about the quantum or likely quantum of the parties’ costs of the proceedings before the primary judge and any additional receivers’ and referees’ fees and expenses over and above the amounts of $180,131 and $75,949 recorded in the balance sheet forming part of the referees’ final report. It is to be noted that the receivers and referees have played no part in this litigation and, so far as the evidence discloses, have had no occasion to incur additional fees.
If there was any serious risk that the P3 Partnership’s net assets would be depleted by costs in the way tentatively suggested, it would reasonably be expected that the parties, who must surely be aware of the precise amounts involved, would have made that submission or pointed to evidence which established it. Even if at the hearing of the appeal such information in admissible form was not readily to hand, such an application could have been made to tender such evidence, were it available. No such application was made. To the contrary, despite the opportunity offered by the Court to make further submissions about the matter at a later date, the parties elected to proceed on 28 July to conclusion.
In those circumstances, and having regard to the allegations and admissions in the pleadings, it should be concluded that the amount of $115,670 the subject of the appeal, once paid to the P3 Partnership, will be available for distribution as to one-third per partner.
Accordingly, based on the evidence before the Court, the corporate appellants, if unsuccessful on the appeal, will receive back two-thirds of the $115,670 they have been ordered to pay, namely $77,113.33. That is, on the facts before the Court, the appellants will each suffer a change in their wealth in an amount of $38,557, a sum less than half of the jurisdictional threshold for leave to appeal.
The position in relation to the cross-appeal is even clearer. The cross-appeal relates to an allowance for annual leave of $162,937. The cross-appellant’s share of the distribution from the P3 Partnership and the likely change in wealth of the cross-appellant if the appeal is successful is only one-third of $162,937, being $54,312.
Unlike the position of the purported appeal, the financial position of the cross-appellant does not involve any risk that the P3 Partnership will not be solvent at the time of the distribution of funds. This is because the cross-appellant is a recipient of funds and will not be forced to contribute to the P3 Partnership by the order challenged on the cross-appeal. That is, the cross-appellant’s best case, regardless of any alleged insolvency risk, is that if successful on the cross-appeal its wealth will change by an amount of $54,312.
Legal principles relevant to the grant of leave to appeal
Section 101(2)(r) of the Supreme Court Act 1970 (NSW) provides:
(2) An appeal shall not lie to the Court of Appeal, except by leave of the Court of Appeal, from:
(r) a final judgment or order in proceedings of the Court, other than an appeal:
(i) that involves a matter at issue amounting to or of the value of $100,000 or more, or
(ii) that involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more.
The following principles emerge from the cases which consider the requirements set out in s 101(2)(r) of the Supreme Court Act:
(1)Section 101(2)(r)(i) involves “a matter at issue” amounting to or to the value of $100,000 or more.
(2)Under s 101(2)(r)(i) the determinative factor is not the amount of the judgment, nor the amount of the original claim, but the value of the matter at issue in the appeal: Dunn v Ross Lamb Motors [1978] 1 NSWLR 26 at 28; Jensen v Ray [2011] NSWCA 247 at [7] per Brereton J with whom Campbell JA and Sackville AJA agreed; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [13] per Basten JA with whom Tobias AJA agreed.
(3)The phrase “at issue” must be construed as meaning truly at issue or, inversely, not unrealistically at issue: Gillard v Hunter Wire Products Pty Ltd (No 2) [2001] NSWCA 450 at [11] per Priestley JA and Sperling J; Jensen v Ray at [11].
(4)A “matter at issue” involves a realistic prospect that the appeal would change the wealth of the appealing party by more than $100,000, it being the realistic worth of the claim that must exceed $100,000, rather than the property the subject of the claim: Pegela Pty Ltd v Oates [2010] NSWCA 186, Young JA, with whom Allsop P and McColl JA agreed; Jensen v Ray at [12].
(5)There are material differences between the requirements under s 101(2)(r) and those under the pre-1984 versions of the Judiciary Act 1903 (Cth) considered by the High Court in cases such as Moller v Roy (1975) 132 CLR 622 at 625 (Barwick CJ): see Blackmore v Browne; Kara Kar Holdings Pty Ltd v Blackmore [2011] NSWCA 114 at [31] ‑ [32] per Campbell JA and Jensen v Ray at [10].
(6)Care must be exercised in relying for the purposes of 101(2)(r) of the Supreme Court Act upon authorities under the pre-1984 s 35 of the Judiciary Act, as the language of the statutes is quite different: Peter Hansen v Slattery Transport (NSW) Pty Ltd [2011] NSWCA 193 at [2] per Basten JA; Jensen v Ray at [10]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das at [13].
(7)Section 101(2)(r)(ii) involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more. Illustrations of the sort of cases caught by that provision are a judgment for an injunction, for specific performance of a contract, for administration of a trust, for a declaration of right, or for the issue of a prerogative writ in which a judgment is not given for a sum or matter at issue between the parties but nevertheless the issue between the parties ‑ described as a claim, statement or question ‑ may be capable of an estimate of value: Nanschild v Pratt [2011] NSWCA 85 at [27].
(8)Notwithstanding the difference in the language used in subsections (i) and (ii) of s 101(2)(r), the question whether an appeal lies as of right turns on whether the right claimed by the appellant, but denied by the judgment, prejudices the appellant to the amount of $100,000: Nanschild v Pratt at [28].
(9)The decision in Aroona Developments Pty Ltd (in liq) v Killen (2004) 50 ACSR 668; [2004] NSWCA 363, relied upon by the cross-appellant here, must be treated with a little care. In that case Ipp JA, relied upon cases decided under the pre-1984 versions of the Judiciary Act, s 35. Under that legislation, it was the amount of the judgment at first instance not the amount at issue in the appeal which was relevant - Jensen v Ray at [10]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das at [13].
(10)The decision in Environment Protection Authority v Condon as liquidator for Orchard Holdings (NSW) Pty Ltd (in liq) (2014) 86 NSWLR 499; [2014] NSWCA 149 at [11], which is also relied upon by the cross-appellant, is distinguishable from the present case. That case addressed the rights of the Environment Protection Authority as a creditor of a company in liquidation.
Where, as here, there is a partnership being wound up with an apparent surplus of assets over liabilities, the application of s 101(2)(r) must at least ordinarily have regard to the net position of the partners. That is to say, it is necessary to have regard not only to the contributions to partnership assets required by orders sought to be challenged on appeal, but also to the distributions to be made to partners when the winding up is complete.
In any event, the principle in Aroona and Environment Protection Authority does not assist the cross-appellant in the present case. Aroona concerned an appeal relating to a proof of debt rejected by a liquidator where the proof of debt was greater than $100,000, but the individual creditor’s likely share of any distribution, if successful in the appeal, was likely to be less than $100,000. The financial position of the cross-appellant here does not involve any risk of that kind. The cross-appellant’s best case, irrespective of the ultimate capacity of the P3 Partnership to make a distribution, if successful on the cross-appeal, is that its wealth will change by an amount of $54,312.
The position of the appellants, who did not in terms rely upon Aroona, may be stronger. On the facts of this case, however, it is tolerably clear that the appellants, if successful, will suffer a change in their wealth in an amount of $38,557, a sum less than half of the jurisdictional threshold for leave to appeal. The position of the partners in the P3 Partnership is sufficiently distinguishable from the liquidation considered in Aroona, and the facts concerning recovery here are sufficiently clear, that it should be concluded that the appeal involves “a matter at issue” not amounting to or to the value of $100,000 or more.
There is another important point about leave. Section 60 of the Civil Procedure Act provides:
60 Proportionality of costs
In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.
As Basten JA pointed out in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das at [39]:
This direction has an important operation in respect of leave applications involving amounts below the statutory threshold. Where, as in the present case, the costs of the trial are disproportionate to the amount in dispute, the incurring of additional costs, for a potentially uncertain return, will be a factor weighing heavily against a grant of leave.
The present is a case where this principle of proportionality weighs heavily against the grant of leave.
Ordinarily, leave to appeal to the Court of Appeal in matters involving small claims such as the present is limited to matters which involve issues of principle, questions of general public importance or an injustice which is reasonably clear: see, for example, Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69 per Kirby P and Joo v Yoo [2016] NSWCA 172.
Absent demonstration of an issue of principle, a question of general public importance or an injustice which is reasonably clear, this is not a case where leave to appeal or cross-appeal should be granted.
Whether the appeal or the cross-appeal raise such issues will be considered separately.
The appeal
It is clear that grounds 1 ‑ 3 of the appeal raise no issue of principle or question of general public importance. The parties are agreed on the legal principles to be applied: see Chocolate Factory and Mainteck.
The appeal does not involve an injustice which is reasonably clear. Whilst it is true that the primary judge did not identify the legal basis of his finding about unauthorised trading, be it a breach of fiduciary duty or breach of some other duty, that failure is explicable for the following reasons.
First, the appellants were given ample opportunity to engage with the referees’ draft findings about unauthorised trading and did not raise the issue of the identification of relevant legal principles upon which they could be liable with the referees. That failure to raise the issue formed the factual backdrop in which the proceedings came before the primary judge.
Second, although represented by Senior Counsel before the primary judge, the appellants in their written submissions did not raise any of the issues agitated on this appeal with the primary judge. The challenge mounted in writing before the primary judge addressed the factual premises adopted by the referees, namely an assertion that the appellants were, in truth, permitted by the referees/receivers to continue to trade. That is, the written submissions of the appellants did not seek a finding that section 4.2 of the Report should not be adopted without identifying a breach of fiduciary duty by the appellants causing the net loss on trading.
Third, in oral submissions before the primary judge the appellants raised, almost tangentially, the submission that the referees’ report had failed to identify the legal duty breached by the appellants. The submission, however, was intertwined in a submission that despite having now accepted that the relevant intellectual property belonged to the P3 Partnership, the appellants were nonetheless entitled to trade using that property in the P2 Partnership. In fairness to the primary judge, and having regard to the tangential way the appellants’ central point on this appeal was raised with him, it is unsurprising that his Honour did not regard the “fiduciary duty finding” point as one which needed to be addressed.
It is also relevant to the question whether this appeal involves an injustice which is reasonably clear that the respondent sought to identify numerous ways in which the findings of the primary judge might be supported on the basis of a breach of fiduciary duty by the appellants. Given the way in which the case had been conducted by the appellants before the primary judge, none of those submissions were made by the respondent below.
If this Court were to grant leave to appeal and set aside the order of the primary judge on the basis advanced by the appellants, consideration would need to be given to whether, in these circumstances, it would be appropriate for the Court to itself make findings and determine the matter or, alternatively, decide the matter should be remitted to the primary judge to address the issues which had only been raised tangentially with him by the appellants, if at all.
In circumstances where no submissions whatever about this topic were addressed to the primary judge (at least in writing) and the only mention in oral submissions about the issue was, at best, tangential, it could not be concluded that the present case was an example of a clear injustice warranting the grant of leave. It was not an injustice to the appellants, let alone a clear injustice, that the primary judge did not address a case that was not put squarely to him. The primary judge was exercising a discretion, and “when a court is invited to make a discretionary decision, to which many factors may be relevant, it is incumbent on parties who contend on appeal that attention was not given to particular matters to demonstrate that the primary judge's attention was drawn to those matters, at least unless they are fundamental and obvious”: Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar (2008) 237 CLR 66; [2008] HCA 42 at [102].
Leave to appeal on grounds 1 ‑ 3 should be refused.
So far as grounds 4 ‑ 6 of the appeal are concerned, there was no error shown in the decision of the primary judge to refuse leave to tender the evidence contained in MFI D3.
If the primary judge had permitted the tender of MFI D3, it would likely have been incumbent upon him to have permitted the respondent to the appeal to make enquiries of the referees and to have had the opportunity to tender its own additional evidence. Self-evidently, that course would likely have undermined the alternative dispute resolution procedure upon which the parties had embarked by consent.
The appellants were given a fair opportunity to engage with the concerns expressed by the referees in their draft report and to tender any material they believed relevant at that time. To have permitted the appellants to raise the fresh material at the hearing before the primary judge would, as the primary judge found, have led to a re-agitation of the questions in dispute under the guise of a debate about the terms upon which the referees’ report should be adopted.
The appellants’ submission that no unfairness would have arisen in that the material in MFI D3 “must” have been known to the referees as they had been the receivers of the P3 Partnership should be rejected. The critical problem with the submission is that, assuming the material was available to the referees in their former capacity, it was not drawn to the attention of the referees in the time provided to comment on the draft conclusions the referees had expressed.
The primary judge found that having been given an opportunity to comment on the referees’ final draft report, and having failed to draw this material to the attention of the referees, the appellants should not be permitted to seek to deploy the material in the proceedings before him. The primary judge did not err in so concluding.
Grounds 4 ‑ 6 of the appeal do not involve issues of principle, questions of general public importance or an injustice which is reasonably clear. Leave to appeal on grounds 4 ‑ 6 of the appeal should be refused.
The cross-appeal
It is equally clear that the cross-appeal raises no issue of principle or question of general public importance. The parties are agreed on the legal principles to be applied: see Chocolate Factory and Mainteck.
Further, the cross-appeal does not involve an injustice which is reasonably clear.
In addressing a question relating to any legal liability under the Annual Holidays Act 1944 (NSW), it is clear that a critical question (if not the critical question) was who was the employer of the second and fourth appellants at the relevant time and what was the employer’s accrued liability. That question was not addressed by the primary judge and it appears the cross-appellant did not ask him to address it.
If there was a legal liability in the P3 Partnership to pay annual leave to the second and fourth appellants, it matters not that the internal bookkeeping records of the P3 Partnership were inaccurate or that their systems for recording that liability were lax. If there was a legal liability to make annual leave payments to the second and fourth appellants, those amounts were required to be paid. There was no suggestion before the primary judge and no evidence was referred to on this appeal which would lead to the conclusion that if the second and fourth appellants were employees of the P3 Partnership they would not have been entitled to annual leave in the amounts apparently paid to them.
The cross-appellant’s submission that notation 1 to the orders of McDougall J dated 17 April 2015 (set out at [23] above) sufficiently dealt with the basis of the appellants’ legal liability tends to obscure the fact that the critical findings were not made by the referees about that matter and the issue of legal liability under the relevant statute was not addressed by the primary judge as his Honour was not asked to do so.
As a result of questions posed by this Court about the basis of liability underpinning the cross-appeal, numerous issues were raised by both parties about the annual leave payment which had not been explored before the primary judge.
In particular, the cross-respondents submitted that an additional reason for dismissing the cross-appeal was that his Honour did not identify the source of the legal liability of the cross-respondents to make any payment to the P3 Partnership of the identified sum representing annual leave entitlements.
The cross-respondents accepted that this argument about the absence of any identification of a legal basis to require the cross-respondents to repay annual leave entitlements was not made to the primary judge.
If this Court were to grant leave to cross-appeal and set aside the order of the primary judge on the basis advanced by the cross-appellant, consideration would need to be given to whether, in these circumstances, it was appropriate for the Court to itself make findings about the legal basis, if any, supporting the adoption of the referees’ report or, alternatively, to make an order remitting the matter to the primary judge to address the issues which had not been raised with him by the parties.
In circumstances where the cross-appellant did not raise with the primary judge matters essential to success on the annual leave issue, it is unable to demonstrate an injustice, let alone a clear injustice.
Leave to cross-appeal should be refused.
Costs of the appeal and the cross-appeal
UCPR r 51.22, provides that if an appeal as of right is restricted by any Act by reference to a specified amount or value, the appellant on filing the notice of appeal must file and serve an affidavit that identifies the nature of the restriction and sets out the material facts on which the appellant relies to show that the restriction does not apply. Neither the appellants nor the cross-appellant filed such an affidavit.
UCPR r 51.41 provides that a respondent who objects to the competency of an appeal must by notice of motion filed and served on all other parties to the appeal within 28 days after service of the notice of appeal apply for an order dismissing the appeal as incompetent, and otherwise is not entitled to costs of the appeal if the appeal is nonetheless dismissed as incompetent, unless the court otherwise orders:
(1) A respondent who objects to the competency of an appeal must, by notice of motion filed and served on all other parties to the appeal within 28 days after service on the respondent of the notice of appeal, apply to the Court for an order dismissing the appeal as incompetent.
(2) If the respondent fails to comply with subrule (1) and the appeal is nevertheless dismissed as incompetent:
(a) the respondent is not entitled to costs of the appeal unless the Court otherwise orders, and
(b) the Court may order the respondent to pay the appellant any costs of the appeal proving useless or unnecessary.
Neither the appellants nor the cross-appellant made an application to dismiss the appeal or the cross-appeal as incompetent.
This is a case where the appropriate order is to refuse leave to appeal and to cross-appeal and to order each party to pay their own costs: UCPR r 51.41; Kassem v Colonial Mutual General Insurance Co Ltd [2001] NSWCA 38 and Falamaki v Wollongong City Council (2001) 113 LGERA 207; [2001] NSWCA 55, each cited in Asuzu v Council of the New South Wales Bar Association [2012] NSWCA 406 at [52] per Ward JA.
In oral argument, the appellants and the cross-appellant accepted that if the Court concluded that the appeal and cross-appeal were both incompetent it followed that the parties were each not entitled to costs.
Orders
The orders of the Court are:
(1)Purported appeal in the notice of appeal filed 7 December 2015 is dismissed as incompetent;
(2)There be no order as to costs of the purported appeal, with the intention that the parties bear their own costs;
(3)Purported cross-appeal in the notice of cross-appeal filed on 23 December 2015 is dismissed as incompetent;
(4)There be no order as to costs of the purported cross-appeal, with the intention that the parties bear their own costs.
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