Joice v Permanent Trustee Company Limited

[2004] NSWCA 262

CITATION:	Joice v Permanent Trustee Company Limited & Anor [2004] NSWCA 262
HEARING DATE(S):	26 July 2004
JUDGMENT DATE:	30 July 2004
JUDGMENT OF:	McColl JA at 1
DECISION:	Notice of Motion dated 30 June 2004 dismissed with costs
CATCHWORDS:	Appeal - Extension of time - where five year delay - principles considered.
LEGISLATION CITED:	Local Government Act 1919 (NSW) s 310, s 310(b) Supreme Court Rules 1970 (NSW) Pt 51 r 4, r 5(4), Pt 72 r 13
CASES CITED:	Allen v Mercer & Sons Pty Ltd (NSW Court of Appeal, unreported, 26 October 1992) Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 Cohen v McWilliam (1995) 38 NSWLR 476 Coulton v Holcombe (1986) 162 CLR 1 Gallo v Dawson (1990) 64 ALJR 458 Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) [1916] HCA 81; (1916) 22 CLR 490 Itek Graphix Pty Limited v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207 Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 Jarvan Pty Limited (In Liq) v Seery (NSW Court of Appeal, unreported, 1 December 1998) Kara Kar Holdings Pty Limited v Brookton Holdings (NSW Court of Appeal, unreported, 27 March 1997) Metwally v University of Wollongong (No 2) (1985) 59 ALJR 481 Moulieux Pty Limited v Girvan (NSW) Pty Limited (Receiver and Manager appointed) (NSW Court of Appeal, unreported, 20 September 1991) Nine Network Pty Limited v Kennedy-Miller Television Pty Limited (NSW Court of Appeal, unreported, 8 June 1994) Outboard Marine Australia Pty Limited v Byrnes [1974] 1 NSWLR 27 R v Birks (1990) 19 NSWLR 677 Stollznow v Calvert [1980] 2 NSWLR 749 Suttor v Gundowda Pty Limited (1950) 81 CLR 418 Water Board v Moustakas (1988) 180 CLR 491 Whisprun Pty Limited v Dixon [2003] HCA 48; (2003) 77 ALJR 1598 Wykanak v Rockdale City Council [1999] NSWCA 191
PARTIES :	Robert Joice (Claimant) Permanent Trustee Company Limited (First Opponent) Morlend Finance Corporation (VIC) Pty Limited (Second Opponent)
FILE NUMBER(S):	CA 40528/04
COUNSEL:	D L Williams SC/M J Fisher (Claimant) G K J Rich (First and Second Opponents)
SOLICITORS:	Gilbert + Tobin (Claimant) Watson Mangioni (First and Second Opponents)

CA 40528/04

McCOLL JA

Friday, 30 July 2004

Robert JOICE v PERMANENT TRUSTEE COMPANY LIMITED & ANOR

Judgment

1 McCOLL JA: By Notice of Motion filed on 30 June 2004 the claimant, Robert Joice (“Mr Joice”), seeks an order pursuant to Part 51 r 5(4) of the Supreme Court Rules that he be granted an extension of time to appeal from the decision of Davies AJ dated 22 July 1999 in which he ordered Mr Joice to pay a total of $1,908,853.00 damages to Permanent Trustee Company Limited and Morlend Finance Corporation (VIC) Pty Ltd (“the Financiers”).

2 Mr Joice provided to the Court a proposed Notice of Appeal from which it is apparent that, if successful in this application, his appeal would seek to challenge both Davies AJ’s decision and that part of an interlocutory judgment of Simpson J insofar as her Honour adopted a Referee’s Report of Mr H Nicholas QC (as he then was) dated 7 April 1999.

3 The Financiers oppose the relief sought.

Statement of the case

4 This case has a labyrinthine history. In brief, it revolves around an allegation by Mr Joice that his former legal representatives acted negligently in conducting his defence in the proceedings in which the Financiers recovered the damages. This account of the facts is taken from Mr Joice’s affidavit and the affidavit of the Financiers’ solicitor, Mr Rainbow. In reading the following account it should be borne in mind that Mr Joice’s former legal representatives are not parties to this application and, hence, have not been represented before me. The allegations which I recite concerning them have not been tested.

5 Mr Joice is a valuer. He commenced employment with R V Dimond (Valuations) Pty Limited (t/as Dimond’s First National) (“Dimond”) in September 1985. He became the manager of Dimond’s Valuation Department in June 1990. Mr Rowan was the managing director of Dimond. He employed Mr Joice and a Mr Daczko, another valuer. On 15 June 1990 Dimond prepared a valuation of a Penrith property for the Financiers pursuant to a request communicated in a letter dated 4 June 1990 marked to Mr Joice’s attention. In March 1991 Mr Joice left Dimond’s employment.

6 In January 1992 solicitors acting for the Financiers wrote to Mr Rowan asserting that the June 1990 valuation was prepared negligently in that Dimond had failed to advert to the non-compliance of a factory erected on the premises with building permit conditions issued under the Local Government Act 1919 (NSW). The letter advised that the borrowers were in default and notified Dimond that to the extent the Financiers were unable to recover the debts owing by the borrowers they would look to Dimond for compensation.

7 In February 1992 Dimond, on behalf of itself, Mr Daczko, Mr Joice and Mr Rowan, notified its insurer C. E. Heath and General Insurance Limited (relevantly “HIH”) of the potential claim.

8 On 16 September 1992 the Financiers commenced proceedings in the Supreme Court of New South Wales (the “Finance Proceedings”) against (inter alia) Dimond (as fourth defendant), Mr Daczko (as fifth defendant), Mr Joice (as sixth defendant) and Mr Rowan (as seventh defendant). As against Dimond, the Financiers asserted that that company had been retained as their agents and valuers, in substance, to undertake a valuation of the property to determine its adequacy as security for the advance of money by the Financiers to the borrowers. The Statement of Claim alleged that Dimond had acted in breach of retainer and negligently in two critical respects: first, in failing to ascertain that Penrith City Council had issued a certificate under s 310 of the Local Government Act 1919 (NSW) making orders in respect to the proposed security properties and secondly in the preparation of the valuation.

9 The case against the fifth, sixth and seventh defendants was pleaded on the basis that each was a registered valuer who acted pursuant to the retainer of the fourth defendant, who was under a duty to carry out the valuation carefully and diligently and who acted in breach of the retainer and/or duty of care and negligently, in substance, in the same respects alleged against Dimond.

10 In October 1995 the fourth to seventh defendants in the Finance Proceedings filed a cross-claim against HIH (the “Indemnity Proceedings”) seeking an order that HIH indemnify them in accordance with indemnity insurance policies said to have been issued by HIH of which they had the benefit.

11 Mr Joice asserts in his affidavit in support of this application that he was a mere employee of Dimond and that he was never involved in the June 1990 valuation. He says he assigned the valuation to Mr Daczko and heard no more about it until September 1992, I infer, when he was served with the Statement of Claim. He says that he gave those instructions to his legal representatives from the outset and communicated his position to the Financiers’ solicitors. He says his position has never changed.

12 On 13 May 1994 Mr Joice’s defence to the then Further Amended Statement of Claim in the Finance Proceedings was filed. In response to the allegation that the fifth, sixth and seventh defendants acted pursuant to the Financiers’ retainer of Dimond, Mr Joice’s defence pleaded that as at the relevant dates he was an employee of Dimond. He did not otherwise admit the paragraph.

13 On 28 September 1995 solicitors acting, inter alia, for Mr Joice wrote to the Financiers’ solicitors enclosing a statement of events prepared by Mr Joice and asking that they consent to discontinuance of the proceedings against him. In the statement of events which was dated 25 September 1995 Mr Joice noted:

(a) that he was an employee of Dimond from September 1985 until March 1991;

(b) that the valuation report prepared in June 1990 was authorised by Mr Rowan above where his (Mr Joice’s) name and credentials were typed;

(c) that “to the best of my recollection, I did not assist in the preparation of the valuation, the establishment of value or the authorisation of the report”.

(d) that he had confirmed to Mr M Landy, a representative of one of the Financiers, in September 1992 that the authorisation signature was not his but appeared to be Mr Rowan’s and had confirmed that fact in a confirming letter forwarded the next day.

14 The Financiers did not discontinue the Finance Proceedings against Mr Joice.

15 In May 1996 pursuant to Part 72 of the Supreme Court Rules the Supreme Court ordered, by consent, that the Finance and Indemnity Proceedings be referred for inquiry and report by Mr Nicholas QC (as he then was).

16 In August 1996 Mr Nicholas QC determined the Indemnity Proceedings in favour of the cross-claimants (the “Indemnity Report”). After Mr Nicholas QC’s report in the Indemnity Proceedings, but before an order that that report be adopted (cf Part 72 r 13 Supreme Court Rules), Murray Stewart & Fogarty, solicitors apparently retained by HIH to defend the valuers, assumed conduct of the defence on behalf of the valuers, including Mr Joice.

17 On 4 November 1996 the hearing of the Finance Proceedings reference commenced before Mr Nicholas QC. Mr McCulloch of counsel appeared for the fourth to seventh defendants.

18 Mr Joice says that on or about 6 November 1996 he had a meeting with Mr Murray of Murray Stewart & Fogarty during which he reiterated that he did not have anything to do with the valuation. He asserts that, in substance, Mr Murray reassured him that he (Mr Murray) felt that he (Mr Joice) had “a strong case” and asked him to sign an amended defence which he did. Mr Joice verified his amended defence.

19 Mr McCulloch filed the amended defence the same day before Mr Nicholas QC together with amended defences for Mr Daczko and Mr Rowan. Mr Williams SC informed me that the amended defences were identical, save, I assume, by reference to the defendant to whom each related.

20 The amended defence did not repeat the reference in Mr Joice’s first defence to the fact that Mr Joice was an employee of Dimond. Rather, in response to the paragraph of the Further Amended Statement of Claim which alleged the fifth, sixth and seventh defendants had acted pursuant to the Financiers’ retainer of Dimond, the amended defence admitted that Dimond was retained to carry out a valuation in accordance with the letter of 4 June 1990, sought to refer to the letter at the hearing and otherwise denied the allegations.

21 Mr Joice was not called in the proceedings before Mr Nicholas QC. No statement or affidavit prepared by him was tendered in evidence.

22 It was common ground in those proceedings that his signature had not appeared on the valuation above his typed name and credentials but, rather, that the signature which appeared as authorising the valuation was Mr Rowan’s. However, it should also be noted that in his affidavit dated 21 December 1995, Mr Rowan said that he “signed [the valuation] on behalf of Mr Joice who was unavailable at the time”.

23 Mr McKay, an officer of one of the Financiers, gave evidence before Mr Nicholas QC in a statement about a telephone conversation in August 1990 with Mr Daczko to the following effect:

“I said: Have you spoken to Michael Landy or Geoff Grecian about the fact that the property is not finished. Does it have any affect (sic) on the fair market valuation and will it impact on the forced sale valuation.
Daczko: I don’t know about that. I will call in Bob Joice.
After a short delay he said: I’ve got Bob Joice. I’ll put you on loud speaker. We have had a discussion . The fact that the building is not finished has no effect on the saleability and we have taken it into account in our valuation figure.” (emphasis supplied)

24 Mr McKay also gave oral evidence before Mr Nicholas QC. His account of the conversation set out above was not challenged in cross-examination.

25 There was also evidence before Mr Nicholas QC of a letter dated 15 August 1990 which Dimond sent to Mr McKay referring (inter alia) to “your recent telephone conversation Joice/McKay”. Mr Daczko signed the letter.

26 During Mr Daczko’s re-examination before Mr Nicholas QC, Mr McCulloch elicited from him that Mr Joice had written an internal note (Ex 19) to Mr Daczko which said:

“John,
Please call Peter McKay re outstanding $200,000 for office and amenities.
They are worried if the property becomes a mortgagee sale they could well require completion of these works prior to issue of 317AE.”

27 This note appeared to relate to a fact, mentioned in the valuation, that the building on the proposed security was “yet to be completed with inclusion of amenities and office area”. The valuation also mentioned that the owner had indicated a further $200,000 would be required to complete the work.

28 The evidence on the reference concluded in December 1996. Mr Nicholas QC delivered his report on 7 April 1997. To the extent that it is relevant I note the following passages:

“The Fourth Defendants, R V Dimond (Valuations) Pty Limited and R V Dimond (Sales) Pty Limited t/as Dimonds First National were retained by the Plaintiffs as valuers of the property. Mr J Daczko, the Fifth Defendant, Mr R J Joice, the Sixth Defendant and Mr Stuart Rowan, the Seventh Defendant were each registered valuers and the agents of the Fourth Defendants. (For convenience I refer to these Defendants collectively as “the valuers”) …
By letter dated 4th June 1990 FML requested the valuers to value the property. It was written by Mr Grecian and marked for the attention of Mr Joice …
The valuation report is dated 15th June 1990. It included the following information … [the information is then set out]. The valuer was Mr Daczko and the report was authorised by Mr Joice …
Liability
It is convenient to deal with the issue of liability at this point. As against the valuers the failure to discover the Notice and to advise FML as to its effect was said to be negligent and in breach of the retainer. It was also alleged that in breach of the retainer and of duty the valuation was made negligently. …
As to the failure to obtain the Notice and consequent liability, the evidence establishes the Plaintiffs’ case. I accept the submission on behalf of the Plaintiffs that Mr Daczko appreciated that special instruction para 6 encompassed orders under s 310 Local Government Act . However he never actually made a visit to the Health and Building Department, Penrith City Council, which he acknowledged to be the most appropriate department for him to visit. In retrospect he recognised that he should have made such enquiries. Indeed, so much was accepted by Counsel for these Defendants. It was not disputed that they were under a duty to ascertain whether such a Notice had issued and to inform the Plaintiffs of its existence. The evidence on this issue of Mr Robertson, the expert valuer on behalf of the Plaintiffs, was not challenged. …
Reliance/Causation
… Between 1st August and 8th August 1990 Mr McKay had one or more conversations with Mr Daczko. Exhibit 19 is Mr Joice’s handwritten note dated 1st August 1990 of a conversation with Mr McKay concerning [Mr Nicholas QC then set out the handwritten note to which I have already referred].” (emphasis supplied)

29 Although Mr Nicholas QC found in favour of the Financiers on their s 310 case, he concluded that the June 1990 valuation itself was not prepared negligently. While the Financiers succeeded in establishing the valuers owed them a duty, Mr Nicholas QC found that had they known of the s 310 Notice, they would not have declined to make the loan. Accordingly, he concluded that the Financiers’ case against the Fourth – Seventh defendants should be dismissed.

30 After Mr Nicholas QC’s report in relation to the Finance Proceedings was delivered, Murray Stewart & Fogarty made an application to the Supreme Court for it to be adopted. That application was heard by Simpson J who gave judgment on 13 March 1998. Mr Joice was again represented by Murray Stewart & Fogarty and Mr McCulloch of Counsel. The Financiers opposed the adoption of that part of the report in which Mr Nicholas QC had found against them on the issue of reliance.

31 On 13 March 1998 Simpson J delivered her judgment. She ordered that Mr Nicholas QC’s report be adopted only as to his findings that:

“(a) In failing to discover the s 310 Notices and to advise FML of its effects, the Fourth to Seventh defendants were negligent and in breach of their retainer;
(b) The plaintiffs had failed to establish as against the Fourth to Seventh defendants that in breach of their retainer and of duty the valuation was made negligently;
(c) The plaintiffs claim against the Third defendant be dismissed.”

32 Her Honour then ordered, inter alia, that the Financiers’ claim against the Fourth to Seventh defendants be listed for hearing as to damages, including the issues of reliance and causation.

33 In October 1998 Murray Stewart & Fogarty filed a Summons in the Court of Appeal on behalf of, among others, Mr Joice, seeking leave to appeal from Simpson J’s decision. Leave to appeal was refused.

34 The proceedings then came before Davies AJ. In those proceedings Murray Stewart & Fogarty and Mr McCulloch of Counsel represented the fourth to seventh defendants.

35 Davies AJ commented that there was a tension between orders (a) and (b) insofar as it might be thought the s 310 Notice would affect the valuation. He interpreted Simpson J’s order as meaning that he was not determining the question whether the valuation itself was negligently done but, rather, the effect of the failure to discover the s 310 Notice.

36 Davies AJ concluded that the loans would not have been advanced if the defendants had brought the s 310 Notice to the Financiers’ attention. Accordingly, he held that the Financiers were entitled to damages in respect of “the defendants’ failure to ascertain the existence of the s 310(b) Notice and to bring it to their attention”. He entered judgment against the valuer defendants for, in total, $1,908,853.00.

37 In August 1999 the Financiers filed a Notice of Motion seeking the adoption of the Indemnity Report.

38 On 10 August 1999 Murray Stewart & Fogarty wrote to Mr Rainbow enclosing a Notice of Appeal without Appointment in the Finance Proceedings.

39 On 24 August 1999 Mr Rainbow, the Financiers’ solicitor, wrote to Murray Stewart & Fogarty noting, inter alia, that:

“5. Mr Landy, on behalf of the plaintiffs, has been told by each of the valuers, including the liquidator of R V Dimond (Valuations) Pty Ltd (fourth defendant) that they knew nothing of the judgment against them. Plainly this was because you were receiving instructions from HIH.
6. On 10 August 1999, you, on behalf of the valuers, filed a Notice of Appeal against the judgment of Acting Justice Davies. Again, according to Mr Landy, none of the valuers were consulted about this. Plainly the instructions came from HIH.
7. By Notice of Motion dated August 1999 the plaintiffs have sought to have the report of Mr Nicholas formally adopted [this was a reference to Mr Nicholas QC’s report in the Indemnity cross-claim]. Your firm has instructed Mr McCulloch of Counsel to oppose this adoption. You have been somewhat coy in responding to our request to know on behalf of whom you are acting and receiving instructions. Plainly to oppose the adoption of the report is directly contrary to the interests if [sic - this should be of] your clients, the valuers who are the insured. It was your clients who succeeded in persuading the referee to make the findings he did … If, as the court record shows, you are acting for the valuers in opposing the adoption of the report, you are doing so directly contrary to the instructions and interests of your clients. You therefore have no authority to instruct Mr McCulloch to put the submissions opposing the adoption of the report. We propose to challenge your authority to put these submissions.

If you are no longer acting for the valuers (notwithstanding the failure to serve a Notice of Ceasing to Act) then you have no authority to lodge the appeal on behalf of the valuers or make an application for a stay of proceedings. If that is the case it would seem the course open to us is to file a motion to have the appeal dismissed for want of authority of the appellants and/or alternatively for security for costs against the appellants.”

40 On 30 August 1999 Murray Stewart & Fogarty advised Mr Rainbow that R V Dimond (Valuations) Pty Limited had gone into liquidation. They also advised that they had ceased to act on behalf of, inter alia, Mr Joice.

41 On 30 August 1999 Mr Rainbow sent an email to Mr Joice to which he attached Davies AJ’s judgment. The email pointed out to Mr Joice that he was jointly and severally liable for the full amount of the judgment, referred to the fact that HIH was opposing the Court entering judgment “against HIH which would protect your interests” and told him “our client would prefer to enforce the judgment against HIH than you”. He told Mr Joice that Mr Daczko had retained Mr Davies, a solicitor, and that Mr Daczko and Mr Davies were to attend a meeting with him. He suggested Mr Joice also attend.

42 The following day, 31 August 1999, Mr Joice retained Mr Davies to act for him.

43 On 3 September 1999 Roberts Mann Davies wrote to Mr Rainbow advising that they were acting for, inter alia, Mr Joice.

44 On or about 23 September 1999 Sully J declined to adopt the Indemnity Report.

45 In November 1999 Mr Rainbow telephoned Mr Joice and informed him of Sully J’s decision. He repeated his earlier advice that his clients would prefer to enforce their judgment against HIH and said that his clients would be prepared to fund an appeal against the decision. Mr Joice agreed.

46 On 3 November 1999 Mr Joice wrote to Mr Rainbow noting that the latter was acting for him in “pursuit of the claim against HIH”. He said (inter alia):

“As you are aware, it has always been my contention that I should not have been involved in this matter from the outset. Mr Michael Landy of Morlend Finance is now also of this view, alas somewhat belatedly.
In our discussions over the many years this matter has progressed, I have maintained my reluctance to participate in an active defence for three principal reasons.
Firstly, my view that I did not have a case to answer and should have been removed as a defendant long ago; Secondly, if the Plaintiffs insisted in continuing the action against me, that I was being defended by the insurer’s lawyers, Murray Stewart Fogarty; and thirdly my inability to meet the financial burden of an independent defence.
I had had no formal advice as to the progress of the matter since receipt of your Notice of Motion dated 30 May 1996, until receipt of your email dated 30 August 1999 attaching a copy of the Judgment. Upon your recommendation that it was in my, (and presumably Permanent’s) interest to participate in the case to have the Referee’s decision in respect to HIH Insurance reinstated, I agreed to instruct the solicitor for the other defendants, to act for me and share the costs of this hearing. …”

47 Mr Joice then noted he had been presented with an account for legal costs which he could not pay. He asked Mr Rainbow to make representations to Morlend and Permanent Trustee on his behalf to consider contributing to its payment.

48 On 28 June 2000 Mr Rainbow wrote to Mr Joice noting that his firm was currently acting on Mr Joice’s behalf and on behalf of the Financiers in an appeal from Sully J’s decision. He said:

“The point of the appeal is to have the Court adopt the Referee’s report (so that HIH will be liable to indemnify you). The reason that we are acting for all the appellants is that they all have a common interest in HIH’s liability to pay the judgment against you.”

49 He then noted that HIH’s solicitors had written to his firm asserting that there was a conflict of interest in their acting on behalf of the valuers to seek the adoption of the Indemnity Report because of the appeal filed on 10 August 1999 from Davies AJ’s judgment. The letter noted:

“We understand that your consent to the filing of that appeal was not sought by HIH, nor did you give instructions to file the appeal. Nor did any of the other valuers.”

50 The letter continued:

“It appears that after it filed the appeal from the judgment of his Honour Acting Justice Davies, HIH decided to simply stop acting in the appeal proceedings at all.
As a result no step to progress the appeal has been taken within the three month period from the initial filing of the Notice of Appeal, as set by the Court rules, and the appeal expired in November 1999. Under the Court rules, the appeal is therefore discontinued. At what point HIH’s solicitors ceased to act on the appeal we do not know.
Because the appeal is defunct and the main proceedings at an end, we do not believe that we currently have any conflict of interest in the present application for leave to appeal from the judgment of his Honour Mr Justice Sully. The only question left in the proceedings is the liability of HIH to indemnify you.” (emphasis supplied)

51 Mr Rainbow suggested, however, that for the sake of certainty and in order to protect the interest of all concerned Mr Joice obtain advice from an independent solicitor. He noted he was copying the letter to Mr Davies.

52 On 23 October 2000 the Court of Appeal declined to grant leave to appeal against Sully J’s decision.

53 Apart from the proceedings in the Court of Appeal, little appears to have happened after the June 2000 letter until in March 2001 when a firm of solicitors contacted Mr Joice apparently at the Financiers’ solicitors’ request suggesting they might act for him in relation to the claim against HIH. That letter does not appear to have been followed up.

54 In April 2001 following the appointment of a provisional liquidator to HIH Mr Rainbow wrote to Mr Joice “formally” demanding payment from him of the judgment debt. In a without prejudice letter bearing the same date, Mr Rainbow invited Mr Joice, on behalf of the Financiers, to meet to discuss how the matter might be resolved.

55 In May 2001 Mr Joice retained McInnes Pynt to act for him. That firm wrote to Mr Rainbow in May 2001 confirming their instructions and noting that the Financiers had agreed to defer enforcement of the judgment against Mr Joice for a short time to permit him to consider his position.

56 In June 2001 McInnes Pynt wrote to Mr Rainbow contending that Mr Joice’s position in the matter appeared “to have been entirely overlooked by all parties, each of whom appeared to have been most concerned with the recovery of the judgment debt from the valuer’s insurer”. They referred to the letter written in September 1995 on Mr Joice’s behalf providing his statement of events to the then Financiers’ solicitors and seeking discontinuance of the proceedings against him to which correspondence they noted they had been unable to locate any response. They said that Mr Joice did not recollect swearing the affidavit verifying the defence filed in the Finance Proceedings, a document which they said included errors including referring to Mr Joice who was the Sixth defendant as the Fifth defendant as well as having him swear “erroneously that he was a ‘director of the defendant’.” They noted that the judgment had not considered the respective liabilities of the individual valuers and asserted that Mr Joice had an absolute defence to the claim, having been an employee of Dimond who had not undertaken the valuation nor been responsible for its accuracy. They asserted that, in the circumstances, “the judgment which your client has must be flawed in its enforceability against” Mr Joice. They expressed the opinion that the judgment against Mr Joice “may be overturned, either by appeal, or simply as an error, dealt with either by application of the slip rule as an application to the trial judge to reopen the case so that the order against Mr Joice may be rescinded”.

57 On 6 June 2001 Mr Rainbow replied advising that the Financiers would oppose any application by Mr Joice to have the judgment set aside, noting that Mr Joice had “determined that opposition rather than corporation ((sic) this should be cooperation) with the plaintiffs is in his interests” and advising that he had been instructed to issue enforcement proceedings immediately against the respective judgment debtors.

58 On 3 July 2001 Mr Rainbow caused bankruptcy notices to be issued against each of the individual valuer defendants in the Finance Proceedings. That notice relied upon the judgment given in the Finance Proceedings.

59 Shortly thereafter, McInnes Pynt wrote to Murray Stewart & Fogarty referring to numerous attempts to discuss Mr Joice’s matter with Mr Murray and explaining the circumstances in which that contact was sought. After briefly reciting Mr Joice’s contentions, including that Murray Stewart & Fogarty had received instructions as to his defence but that that defence appeared not to have been brought to the attention of the Court, McInnes Pynt noted that “the solicitors for the Plaintiff have proposed to Mr Joice that he should claim against you in negligence for the whole of the judgment debt”.

60 In July 2001 Mr Joice and Mr Pynt attended a meeting with Mr Rainbow and Mr Landy at which it was proposed that the Financiers would not proceed with recovery proceedings against Mr Joice “if he were to commence action in respect of the negligence of his former solicitor, Mr Murray”. The agreement was to be “subject to you [I infer Mr Rainbow] having clear oversight and supervisory control over those negligence proceedings”. The proceedings were to be funded by the Financiers out of funds recovered from the other judgment debtors. This proposal was confirmed as generally acceptable to Mr Joice by Mr Pynt in a letter he wrote to Mr Rainbow on 6 August 2001. The following day Mr Rainbow wrote to Mr Pynt advising he was still awaiting instructions from Permanent Trustee Company Limited in connection with the proposal.

61 Without descending into any further detail it is apparent that over the next six months the proposal was not significantly advanced. The Financiers did, however, allow the bankruptcy notices to expire. Towards the end of 2001 Permanent Trustee Company Limited assigned its interests in the judgment to FML Securities Pty Limited. (I was informed that Permanent was, nevertheless, a proper party to Mr Joice’s application and that the assignee’s interests were represented). In early 2002 a receiver was appointed to FML Securities Pty Limited. It appears the receiver instructed Mr Rainbow “to recommence discussions with the judgment debtors with a view to achieving a commercial outcome which would overcome the commercial imperatives to issue bankruptcy proceedings against Mr Joice … on the grounds of his failure to comply with the bankruptcy notice served on him on 12 July 2001”.

62 By February 2002 it appears that an agreement had been reached pursuant to which the Financiers would pay Mr Joice’s legal costs of prosecuting an action for damages against Murray Stewart & Fogarty and, if advised, Mr McCulloch. The Financiers nominated Mr Joice’s present solicitors, Gilbert + Tobin, to act on Mr Joice’s behalf. Soon after they were retained, it appears Gilbert + Tobin advised Mr Joice that before commencing proceedings against his former legal representatives he should seek to have the judgment against him set aside. Not surprisingly, Mr Rainbow advised Mr Joice’s solicitors that while Mr Joice should take whatever action he may be advised, the Financiers were not prepared to “render him any assistance other than by way of supporting a damages claim against Murray Stewart & Fogarty”. The letter advised that the Financiers would not make any payment to Mr Joice until the question of setting aside the judgment was resolved in their favour. It also stated that if Mr Joice decided not to advance matters with Gilbert + Tobin that week bankruptcy proceedings would be recommenced against him.

63 In March 2002 Gilbert + Tobin wrote to Mr Murray of Murray Stewart & Fogarty outlining Mr Joice’s contentions that, in substance, his defence had never been advanced during the Finance Proceedings notwithstanding his instructions, contending that he had not been consulted after the judgment was entered against him and alleging that “his appeal rights had been lost through your failure to prosecute the appeal you commenced in his name (without his knowledge)”. The letter noted that Gilbert + Tobin had been instructed to make an application to the Court to have the judgment against Mr Joice set aside and demanded that, “having regard to the negligent way in which you conducted our client’s defence and appeal”, Mr Murray fund the application. At the time this letter was written it appears that the judgment debt in the Finance Proceedings amounted to approximately $3.4 million.

64 No response was received to that letter. Mr Joice then instructed Gilbert + Tobin to commence proceedings against Murray Stewart & Fogarty. Those proceedings were commenced by the filing of a Statement of Claim on 8 July 2002 naming the partners of Murray Stewart & Fogarty as defendants (the “Negligence Proceedings”). The Statement of Claim alleged that the defendants had both breached the terms of Mr Joice’s retainer of them as well as their duty of care to him. The particulars of breach of retainer and breach of duty of care were the same. They asserted, in substance, that the defence presented at the Finance Proceedings did not reflect Mr Joice’s instructions. They also complained of the failure to prosecute an appeal on Mr Joice’s behalf from the judgment in the Finance Proceedings.

65 Mr Joice asserts in his affidavit, in support of the present application, that the Financiers have been paying his legal fees in the Negligence Proceedings. He says that he has never had the financial capacity to fund an appeal against Davies AJ’s judgment. He says that since that judgment was given it has been his objective to ensure that no steps would be taken to enforce it against him. Finally, he says that in the Negligence Proceedings the “defendants’ insurers” had alleged “recently” that he had not mitigated his loss in those proceedings as he had not appealed the judgment in the Finance Proceedings. He says that the defendants’ insurers are funding the application which I am considering and will fund the appeal if his application is successful.

66 Mr Joice asserts that his contention that he was not in any way involved in the valuation “was communicated to the Financiers’ solicitors and it has never changed”. Mr Rainbow, who has acted for the Financiers since the Finance Proceedings were commenced and who has been present at every hearing says that at none of the hearings (i.e. before Mr Nicholas QC, Simpson J and Davies AJ) was an argument advanced that the claim against Mr Joice should be dismissed on the basis that Mr Joice had no involvement in and was not in any way responsible for the valuation nor was it argued that a distinction should be drawn between Mr Joice’s liability and that of Dimond, Daczko and Rowan.

67 The Negligence Proceedings have been listed for hearing on 6 September 2004.

The claimant’s submissions

68 Mr Williams SC who appeared with Ms Fisher for Mr Joice submitted that the guiding principle in determining whether the application should be granted was the interests of justice, referring to Moulieux Pty Limited v Girvan (NSW) Pty Limited (Receiver and Manager appointed) (NSW Court of Appeal, unreported, 20 September 1991).

69 He submitted that the general principles governing an application for an extension of time to lodge a notice of appeal were those stated by McHugh J in Gallo v Dawson (1990) 64 ALJR 458 which were applied by Handley JA (with whom Mason P and Giles JA agreed) in Wykanak v Rockdale City Council [1999] NSWCA 191.

70 He said that factors relevant to be taken into account in the exercise of the discretion were:

(a) the prospects of success on appeal: Gallo v Dawson (1990) 64 ALJR 458;

(b) that where there are genuine issues to be litigated, it is appropriate to take a benign view of an application to extend time: Outboard Marine Australia Pty Limited v Byrnes [1974] 1 NSWLR 27;

(c) the blamelessness of the applicant: Stollznow v Calvert [1980] 2 NSWLR 749;

(d) the fact that “the party is innocent of default and the default is occasioned by legal representatives”: Moulieux per Kirby P (as he then was) at 5; and

(e) the fact that a claim should not pass into judgment against a party who wished to defend it unless there had been a hearing upon the merits: Cohen v McWilliam (1995) 38 NSWLR 476.

71 He submitted that it was no answer to the application to say that Mr Joice had an action against his legal advisors, referring to a statement to that effect by Sheller JA in Cohen v McWilliam, above, at 492.

72 Mr Williams SC drew attention to cases where extensions of time to appeal had been granted after lengthy periods including Allen v Mercer & Sons Pty Ltd (NSW Court of Appeal, unreported, 26 October 1992 – 4 years) and Kara Kar Holdings Pty Limited v Brookton Holdings (NSW Court of Appeal, unreported, 27 March 1997 – 2 years and 11 months).

73 Mr Williams SC submitted that Mr Joice had arguable prospects of success on appeal. He said that Mr Joice’s defence had put in issue Mr Joice’s role in the valuation exercise and, in the circumstances, it was incumbent upon the Financiers to place before Mr Nicholas QC evidence which justified a finding that Mr Joice owed them a duty. He said that they had not discharged that obligation. He said that the finding of duty and breach as against Mr Joice was not supported by evidence or, when it came to the Referee’s report, by analysis. He complained that Mr Nicholas QC did not consider Mr Joice’s liability separately. He said that Mr Joice had not had a proper opportunity to have his case advanced before Mr Nicholas QC. He said that that occurred because of the negligence of his solicitors.

74 Mr Williams SC outlined the history of the proceedings to demonstrate, as I understand the way the case was put, that Mr Joice had not been idle in the interim but, rather, had been seeking to protect his interests through the Negligence Proceedings. He submitted that Mr Joice’s impecuniosity was another explanation for the delay.

The opponents’ submissions

75 Mr Rich submitted that the application was futile and misconceived. He contended that the putative appeal had no prospects of success. He drew attention to the application for the adoption of Mr Nicholas QC’s report which was made on behalf of, inter alia, all the valuer defendants in the Finance Proceedings. That application included inviting Simpson J to adopt, as she did, Mr Nicholas QC’s findings concerning duty and breach.

76 He pointed to Nine Network Pty Limited v Kennedy-Miller Television Pty Limited (NSW Court of Appeal, unreported, 8 June 1994) in which Gleeson CJ (with whom Meagher and Handley JJA agreed) held that an appeal from the decision of a judge of this Court adopting and giving effect to the report of a referee appointed pursuant to Part 72 of the Supreme Court Rules was concerned with error on the part of the judge, not with reviewing the referee’s report. It was only if the judge’s decision to adopt, vary or reject the referee’s report in whole or in part could be shown to be based upon a material error on the part of the judge that there would be a basis for attacking the judgment based on that decision. Gleeson CJ observed:

“The important point is that it is the judge at first instance who reviews what the referee did; the Court of Appeal within the limits of the ordinary rules governing appeals reviews what the judge did.”

[See also Jarvan Pty Limited (In Liq) v Seery (NSW Court of Appeal, unreported, 1 December 1998, per Stein JA, with whom Meagher and Sheller JA agreed)].

77 He submitted that Mr Joice could point to no appellable error in Simpson J’s decision to adopt that part of Mr Nicholas QC’s report dealing with duty and breach. Accordingly, any appeal was bound to fail.

78 Mr Rich also submitted that the proposed appeal was hopeless for other reasons. He submitted that each of the proposed grounds of appeal in the Amended Notice of Appeal handed to the Court involved questions of fact which could have been addressed by evidence at the trial which would have prevented the proposed appeal from succeeding: cf Suttor v Gundowda Pty Limited (1950) 81 CLR 418 at 438; Coulton v Holcombe (1986) 162 CLR 1 at 7 – 8.

79 He contended that if Mr Joice’s responsibility or involvement in the preparation of the June 1990 valuation had been raised before the Referee as a discrete issue, it was possible that Messrs Daczko and Rowan would have been cross-examined on that topic. He contended there was material by reference to which such cross-examination could have proceeded including the initial letter of instruction which was addressed to Mr Joice, the internal note, the telephone conversation between Messrs McKay, Daczko and Joice prior to 8 August 1990 and the fact that the valuation itself stated that it had been “authorised by” Mr Joice who was described as “Manager – Valuations”.

80 He also contended that it was significant that Mr Joice did not give evidence before the Referee. Again, he argued that had Mr Joice’s responsibility or involvement in the preparation of the relevant valuation been raised as a discrete issue before the Referee, the Referee would have been entitled to draw the inference that Mr Joice’s evidence would not have assisted the argument such that it would “almost certainly have failed”. He contended that it would be “most unsatisfactory if Mr Joice was now able to challenge the sufficiency of the evidence before the Referee without having made himself available for cross-examination and thereby escape the otherwise inevitable adverse inference”.

81 Mr Rich also drew attention to the fact that, before the Referee, the valuer defendants had not disputed that they were under a duty to ascertain whether a s 310 Notice had been issued and to inform the Financiers of its existence.

82 Mr Rich submitted, in sum, that in the light of the references to Mr Joice in the evidence to which I have referred, his failure to give evidence and the acceptance on his and the other valuers’ behalf that they were under the relevant duty, it was open to the Referee to make the finding that Mr Joice owed the relevant duty of care and to find, upon the uncontroversial evidence that the s 310 Notice was not brought to the Financiers’ attention, that the duty was breached.

83 Mr Rich argued that this was not a case in which the injustice relied upon by Mr Joice arose from the operation of any rules of Court but, rather, on his version of events, from the manner in which Mr Joice’s former solicitors conducted his defence in the Finance Proceedings. He contended that the appropriate forum in which that injustice (if any) should be addressed was in the Negligence Proceedings.

84 Mr Rich also drew attention to the fact that, inter alia, Mr Joice had previously sought leave to appeal from Simpson J’s decision adopting Mr Nicholas QC’s report and that leave was refused.

85 Mr Rich submitted that the length of the delay was extraordinary. He argued that the Court would only grant an extension of time having regard to the period of delay in the “rarest and most compelling of cases”.

86 Mr Rich submitted that the explanation Mr Joice proffered to explain his delay was inadequate. He argued that impecuniosity was not an explanation for delay which would attract the Court’s jurisdiction.

87 Mr Rich drew attention to the fact that there was no explanation for the inaction between early 2002 when Gilbert + Tobin advised Mr Joice should seek to have the judgment set aside and 2004 when the present application was filed. He submitted that the fact that the defendants in the Negligence Proceedings had “recently” asserted Mr Joice had failed to mitigate his loss in not seeking to prosecute an appeal in the Finance Proceedings was not an explanation for delay but, rather, an explanation as to why the application was brought now, rather than earlier.

88 Mr Rich drew attention to the fact that there was no suggestion Mr Joice was unaware of the applicable time limits nor, he submitted, could the delay be blamed on Mr Joice’s former solicitors. He noted that they ceased to act for him on or about 30 August 1999 and that, in substance, from that time Mr Joice had been represented by other firms of solicitors, two of which had earlier advised him to seek to set aside the judgment in the Finance Proceedings. He noted that the Financiers had always made it clear that they would oppose any application to set aside Davies AJ’s judgment.

89 Finally, Mr Rich submitted that the Financiers would be prejudiced by an extension of time. He drew attention to the fact that the events the subject of the Finance Proceedings occurred in 1990 with proceedings commenced in 1992 and the judgment in favour of the Financiers having been entered in July 1999. He noted that the history recounted in the affidavits indicated numerous Court appearances, hearings and applications involving considerable cost. He argued that the grounds of appeal indicated that Mr Joice would seek to adduce further evidence on appeal if an appeal was permitted to proceed.

Consideration

90 The Notice of Appeal Mr Joice seeks to file identifies the judgments from which Mr Joice would seek to appeal as being:

“(a) the part of the decision of Davies AJ whereby [Mr Joice] was found liable to each of [the Financiers].
(b) the interlocutory judgment of Simpson J insofar as her Honour adopted in part the referee’s report of H Nicholas QC dated 7 April 1999 which found that the appellant was negligent and in breach of contract.”

91 The grounds of appeal proposed are:

“1. Each of Davies AJ and Simpson J treated each of the appellant (the sixth defendant in the proceedings) and the fourth defendant, the fifth defendant and the seventh defendant as being indistinguishable and as being “the valuers”.
2. Davies AJ and Simpson J failed to have regard to the fact that:
(a) the appellant was an employee only of the fourth defendant;
(b) the appellant did not perform the valuation the subject of the proceedings;
(c) the appellant did not sign the valuation;
(d) the valuation was signed by the seventh defendant over the appellant’s pre-printed name without his knowledge; and
(e) the valuation was performed by the fifth defendant.
3. The respondents failed to demonstrate that the appellant was responsible for the valuations.
4. There was no evidence to base a finding of liability against the appellant.
5. Neither Davies AJ nor Simpson J gave reasons for the finding of liability against the appellant.

92 Davies AJ’s judgment was delivered on 22 July 1999 and took effect that day. The Notice of Appeal without Appointment was filed on 10 August 1999. No further steps were taken in relation to that appeal and, accordingly, it was taken to be discontinued: Part 51 r 4 Supreme Court Rules. The discontinuance took effect, therefore, on 10 November 1999.

93 Accordingly, from that time the Financiers were entitled to regard themselves as having a “vested right to retain the judgment” unless this application is granted: Gallo v Dawson (1990) 64 ALJR 458 at 459 per McHugh J, applied in Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 at 519 [4] per Brennan CJ and McHugh J at 530 [36] per Gummow and Hayne JJ.

94 Where the time for appeal has expired it is necessary in determining an application to extend the time to appeal to consider the prospects of success of the appeal: Gallo v Dawson, above at 459; Jackamarra v Krakouer per Brennan CJ and McHugh J at 521, per Gummow and Hayne JJ at 527 – 529, per Kirby J at 540.

95 In my view, the appeal has little prospect of success.

96 Nine Network Pty Limited v Kennedy-Miller Television Pty Limited makes it plain that it would not be open to the Court of Appeal to revisit the issues Mr Nicholas QC determined on an appeal. Rather, any appeal to this Court would be limited to the question whether Simpson J erred in the adoption proceedings. Apart from the bald assertions in grounds 1, 2 and 5 of the proposed Notice of Appeal complaining, in substance, that neither Simpson J or Davies AJ singled out Mr Joice’s position, Mr Williams SC did not identify any respect in which Simpson J or Davies AJ was said to have erred. The course which Simpson J and Davies AJ was, as Mr Williams SC concedes, consistent with the manner in which the valuers’ legal representatives presented the case, without distinguishing between them on the basis of their respective roles.

97 It is true that Simpson J received the evidence which was before Mr Nicholas QC. The Financiers tendered that evidence, as I understand it, to support their opposition to the report being adopted on the issues of reliance and causation. No issue arose which required examination of the issues of duty and breach.

98 Simpson J ordered that that part of Mr Nicholas QC’s report dealing with breach and duty should be adopted – a course to which it appears both sides of the record assented.

99 When the matter came before Davies AJ, there was, again, no issue as to duty or breach. Rather, the focus of the hearing was whether the Financiers could succeed on the issues of reliance and causation.

100 It is plain, therefore, that the thrust of Mr Joice’s appeal if permitted to proceed would be directed to grounds 3 and 4 challenging Mr Nicholas QC’s findings on the reference – a course Nine Network proscribes.

101 Even if the Court of Appeal was permitted to review Mr Nicholas QC’s findings, it is not apparent to me that a challenge to those findings would be successful. I have already set out the evidence which was before Mr Nicholas QC which identified Mr Joice as the Manager of Dimond’s Valuation Department. It is apparent that he supervised Mr Daczko. Mr Nicholas QC found he was an “agent” of Dimond and that he “authorised” the valuation. Mr Joice has made it plain from the outset that he did not sign the June 1990 valuation – however there was evidence from Mr Rowan to which I have referred that he signed the valuation on Mr Joice’s behalf.

102 In any event, it has to be recalled that the finding of breach of retainer and duty which was made by Mr Nicholas QC did not involve the valuation. Rather, it involved Mr Daczko’s failure to become aware of the s 310 Notice and Dimond’s failure to advise the Financiers of it. Mr Joice was arguably implicated in that omission because of his role as manager of the area in which Mr Daczko worked.

103 Mr Nicholas QC referred to the evidence concerning Mr Joice’s involvement in his Report. Although the Report did not examine the issue of duty of care against Mr Joice individually, he took that approach with all the valuer defendants. That approach was justified in circumstances where it is apparent that the issue of duty was conceded by counsel who appeared on their behalf.

104 Mr Joice says in his affidavit in support of this application that he was not and has never been a principal of Dimond and has only ever been an employee. However, that fact did not mean that there could be no finding of a duty of care, let alone breach, against him. An employer’s liability does not exclude the personal liability of an employee.

105 For those reasons, in my opinion, the appeal has no prospect of substantive success. However there are other reasons, relating to the manner in which the case was conducted, which militate against an appeal succeeding.

106 A party is bound by the manner in which the case was conducted at trial. That was emphasised in Metwally v University of Wollongong (No 2) (1985) 59 ALJR 481 at 483 where, in refusing an application by Metwally to reopen an appeal to argue that an Act was invalid when the validity of the Act had earlier been accepted, the High Court in its joint judgment said that “(e)xcept in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case has been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so”.

107 In their joint judgment in Coulton v Holcombe (1986) 162 CLR 1 at 7, Gibbs CJ, Wilson, Brennan and Dawson JJ said:

"To say that an appeal is by way of rehearing does not mean that the issues and the evidence to be considered are at large. It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish.”

108 Their Honours emphasised that such an approach was essential to the interests of expedition, finality and justice.

109 Mr Williams SC submitted that permitting Mr Joice to conduct an appeal in circumstances where the argument he would need to advance had not been raised at trial did not fall foul of these principles as recently enunciated in Whisprun Pty Limited v Dixon [2003] HCA 48; (2003) 77 ALJR 1598 at [51] where Gleeson CJ, McHugh and Gummow JJ said:

“ [51] … It would be inimical to the due administration of justice if, on appeal, a party could raise a point that was not taken at the trial unless it could not possibly have been met by further evidence at the trial. Nothing is more likely to give rise to a sense of injustice in a litigant than to have a verdict taken away on a point that was not taken at the trial and could or might possibly have been met by rebutting evidence or cross-examination. Even when no question of further evidence is admissible, it may not be in the interests of justice to allow a new point to be raised on appeal, particularly if it will require a further trial of the action. Not only is the successful party put to expense that may not be recoverable on a party and party taxation but a new trial inevitably inflicts on the parties worry, inconvenience and an interference with their personal and business affairs.” [omitting footnotes]

110 He submitted this was not a case where Mr Joice would seek to advance fresh evidence on appeal nor was he seeking to agitate a point not raised at trial. Rather, he contended, the issue of Mr Joice’s role in the valuation exercise was put in issue on Mr Joice’s defence but not addressed either by evidence on behalf of the Financiers or by the Referee in preparing his report.

111 Although he did not refer to it, it seemed to me Mr Williams SC was seeking to advance a case similar to Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279. In that case, the plaintiff sued the bank and another defendant, claiming that the defendant had procured the bank to transfer away shares held on trust for the plaintiff. The bank filed a defence pleading that the proceedings were statute barred. It did not appear at the hearing. Judgment was given for the bank and the defendant on the ground that the plaintiff had not established a beneficial interest in the shares. On appeal, the bank relied on its defence that the proceedings were statute barred. It was held that it could do so.

112 Mason CJ and Gaudron J said that the bank’s failure to appear was not a reason to treat the defence as withdrawn. After referring to the cases about taking a point for the first time on appeal, including Water Board v Moustakas, they said (at 284):

“In the present case there is no basis upon which it could be suggested that Akhil may have wished to call evidence to show that the breaches by the Bank occurred at a time inside the six-year period of limitation. Nor, by reason that the trial judge would not have been free either to disregard the defence or to treat it as withdrawn from the trial, can it be said that the case sought to be made on appeal is new or different from that which emerged at the trial. Accordingly, neither the decision in Moustakas nor the rule upon which it rests prevented the Bank from relying on its pleaded defence in the Court of Appeal.” (emphasis supplied)

113 Brennan J (at 288) said (omitting some citations):

“When the pleadings bring the parties to the issue, the court’s function is to determine that issue and to grant relief founded on the pleadings unless the parties are allowed to alter the issues at the trial without amendment of the pleadings (as to which, see the observations in London Passenger Transport Board v Moscrop . The rule is clearly laid down in the judgment of this Court in Dare v Pulham :
‘Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings.’ ” (emphasis supplied)

114 Toohey J said (at 304):

“But these decisions involved the way in which a trial was conducted and arguments presented. Here the Bank did not appear at the hearing; its absence did not affect the course of the trial and the issues as pleaded remained the issues between it and Akhil Holdings . Likewise, no question of election could arise. The failure of the Bank to appear at trial did not constitute any representation on its part that the issues for determination were other than the issues as pleaded; …” (emphasis supplied)

115 As these references make plain, the pleadings are not the sole basis upon which a party’s rights to raise a matter on appeal will be determined. The conduct of the trial is also relevant. In Water Board v Moustakas (1988) 180 CLR 491 at 497 Mason CJ, Wilson, Brennan and Dawson JJ said:

“In deciding whether or not a point was raised at trial no narrow or technical view should be taken … it is necessary to look to the actual conduct of the proceedings to see whether a point was or was not taken at the trial, especially where a particular is equivocal.”

116 In Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) [1916] HCA 81; (1916) 22 CLR 490 at 517 – 518, Isaacs and Rich JJ said (omitting citations):

“Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest. There is abundant authority for this, even if the matter were required to rest on authority only. See, for instance, Nevill v. Fine Art and General Insurance Co. … at p. 76; Browne v. Dunn … at p. 75, the relevant passage being quoted fully in Rowe v. Australian United Steam Navigation Co… at p. 24. There are qualifications, no doubt, and each case must depend for the proper application of the principle upon its own facts. It has been laid down by the Privy Council that "As a rule relief not founded on the pleadings should not be granted." "But in this case" (said their Lordships) "the substantial matters which constitute the title of all the parties are touched, though obscurely, in the issues; they have been fully put in evidence, and they have formed the main subject of discussion and decision in all three Courts. The High Court are right in treating the case as not within the rule": Sri Mahant Govind Rao v. Sita Ram Kesho … at p. 207.” (emphasis supplied)

117 I have not seen all the transcript of the hearing before Mr Nicholas QC. From what I have seen, however, it appears plain that the valuers’ legal representatives conducted the case on the basis that they were all “in the same boat”. Mr Rainbow says, in effect, that that was how the proceedings were, to his observation, conducted. In this regard, it is relevant to note that, as Mr Williams SC conceded, Mr McCulloch did not dispute before Mr Nicholas QC that the valuers were under a duty of care, a proposition said to have been founded, on the Financiers’ part, in expert evidence they called from a Mr Robertson. Thus Mr McCulloch appears to have acknowledged, most probably after a review of all the evidence, that the pleaded denial of duty could not be maintained.

118 This being so, no proper basis existed for Mr Nicholas QC to distinguish between the valuer defendants to find in favour of Mr Joice in respect of the defence of “no duty” which had been put in issue on the pleadings by all valuer defendants but was apparently abandoned having regard to the way the case was conducted.

119 This is not, therefore, a case like Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd. It is possible that, had Mr Joice’s individual position been vigorously pursued, the Financiers would have conducted the reference differently both in terms of the evidence they called and their cross-examination.

120 Mr Williams SC sought to draw support for Mr Joice’s position from the reference in the footnotes to the passage from Whisprun Pty Limited v Dixon I have set out above to R v Birks (1990) 19 NSWLR 677. In that case the Court of Criminal Appeal ordered a new trial on the basis that there had been a serious miscarriage of justice in circumstances where the appellant’s defence had been conducted incompetently by inexperienced counsel. However that case has no application in the present case. Birks was a clear case. Counsel acknowledged he had failed to cross-examine on relevant matters on which he had instructions. In the present context Birks simply begs the question. I am not deciding, and cannot decide, whether Mr Joice’s legal representation was wanting. That decision can only properly be made in the Negligence Proceedings.

121 I am also not persuaded that it would, in any event, be in the interests of justice to permit an extension of time.

122 This case is not like Cohen v McWilliam, above, where Priestley JA forcefully expressed the view that a litigant should not be “shut out by procedural default from litigating … a defence which the Court felt was arguable”. Mr Joice had an opportunity to put his defence in the Finance Proceedings. To all intents and purposes, so far as the Financiers were concerned, he raised that defence through his legal representatives at the Reference before Mr Nicholas QC, before Simpson J, before this Court on the application for leave to appeal from Simpson J’s judgment and before Davies AJ.

123 I accept that a party’s personal blamelessness for delay is a factor to be considered in the exercise of the discretion. However, it cannot, in my view, be said that Mr Joice is entirely blameless for what has happened. To all intents and purposes he has taken a comparatively passive role since the initiation of the Finance Proceedings, prepared to allow people to act on his behalf without, apparently, taking active steps to ensure that his interests were being properly represented. This is possibly understandable having regard to his view of his role in the relevant retainer as well as his professed impecuniosity. However, it is remarkable that throughout the period from when this Court ordered the Reference to Mr Nicholas QC in 1996 until August 1999 when Mr Rainbow emailed Davies AJ’s judgment to him, Mr Joice appears to have made no inquiry as to the outcome of the Finance Proceedings.

124 Once apprised of the outcome he did not move immediately to set the judgment aside, even after he was apparently expressly advised that that was the course to pursue from at least early 2001. Again, it is perhaps understandable, having regard to his belief about his ability to finance proceedings to challenge the original judgment, that Mr Joice seized upon the Financiers’ offer to attack the judgment through the route of the Negligence Proceedings. But it cannot be ignored that, in doing so, he appears to have made a deliberate decision at that stage not to seek to set aside the judgment: cf Itek Graphix Pty Limited v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207 per Ipp JA at 224 ff (with whom Spigelman CJ and Sheller JA agreed).

125 I am also of the view that the Financiers would be prejudiced by an extension of time for Mr Joice to appeal from the judgment in the Finance Proceedings. They conducted those proceedings throughout on the basis that the case advanced on Mr Joice’s behalf was one in which his position was not differentiated from the other valuers. The course of the proceedings before Mr Nicholas QC (and, inferentially, Simpson J and Davies AJ) may have taken a different course if Mr Joice’s position had been flagged.

126 Further, the Financiers have incurred substantial costs consequent upon those Court hearings which there is no doubt Mr Joice could not now recoup if (contrary to the view I have formed) he was to be successful at this late stage in challenging the original judgment against him.

127 This is not a case where the Court rules might become instruments of injustice. Rather, it is one which stems from the asserted failure to advance Mr Joice’s defence. In my view justice would not be done between the parties if Mr Joice were permitted an extension of time within which to appeal from Davies AJ’s judgment.

128 The Notice of Motion dated 30 June 2004 is dismissed with costs.

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Last Modified: 08/03/2004