Landmark Operations Ltd v J Tiver Nominees Pty Ltd - [2009] SASC 185

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
LANDMARK OPERATIONS LIMITED v J TIVER NOMINEES PTY LTD & ORS
[2009] SASC 185
Judgment of The Full Court (ex tempore)
(The Honourable Justice Bleby, The Honourable Justice Vanstone and The Honourable Justice White)
25 June 2009
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - WHEN APPEAL LIES - BY LEAVE OF COURT
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - FROM INTERLOCUTORY DECISIONS - LEAVE TO APPEAL
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - POINTS AND OBJECTIONS NOT TAKEN BELOW - WHEN NOT ALLOWED TO BE RAISED ON APPEAL - QUESTIONS NOT RAISED ON PLEADINGS OR IN ARGUMENT
Application for permission to appeal against refusal to grant stay of execution of judgment of trial judge – four earlier applications for stay refused – notice of appeal against substantive judgment of trial judge filed but appeal not set down for hearing – discussion of principles relating to applications for leave to appeal against interlocutory orders – when appropriate to grant stay of execution of judgment.
Appeal against substantive judgment of trial judge taken to have been discontinued – case now sought to be advanced in notice of appeal against substantive judgment not raised at trial – no real prospect of success on appeal against substantive judgment – no grounds for granting stay of execution – no real prospect of success on appeal in question – permission to appeal refused.
Trade Practices Act 1974 (Cth) ss 51AA, 51AB, 51AC; Supreme Court Civil Rules 2006 (SA) r 22, r 285, r 289, r 291, r 295, r 300, referred to.
South Australian Government Financing Authority v Bank of New Zealand [2002] SASC 56; BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VR 756; Glenauchen Pty Ltd v Circuit Finance Pty Ltd [2001] SASC 61; Water Board v Moustakas (1988) 180 CLR 491, applied.
Landmark Operations Limited v J Tiver Nominees Pty Ltd [2009] SASC 14, discussed.
Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184; Technilock (Australia) Pty Ltd v Mondami Pty Ltd [1999] SASC 94; Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] 1 VR 150; Alexander v Cambridge Credit Corporation Ltd (Receiver Appointed) (1985) 2 NSWLR 685; Galladin Pty Ltd v Aimnorth Pty Ltd (1992) 60 SASR 145; Niemann v Electronic Industries Pty Ltd [1978] VR 431, considered.

LANDMARK OPERATIONS LIMITED v J TIVER NOMINEES PTY LTD & ORS
[2009] SASC 185
Full Court: Bleby, Vanstone and White JJ

BLEBY J. (Ex tempore) After giving reasons for judgment on 21 November 2008, Sulan J made the necessary consequential orders on 26 November 2008 in granting relief to the plaintiff against the defendants. The orders included an order that the plaintiff recover from the second to sixth defendants the judgment sum of $10,857,200.18, and that the plaintiff also recover the same amount against the first defendant pursuant to a certain guarantee of the other defendants’ liability given by the first defendant in favour of the plaintiff. The counterclaim of the defendants against the plaintiff was dismissed.
By notice of appeal filed on 10 December 2008, all the defendants were party to an appeal against the trial Judge’s judgment on a number of grounds. The notice of appeal was filed by the second defendant on behalf of all the defendants, and was signed by or on behalf of the first, third, fourth and fifth defendants (“the present appellants”).
On 23 December 2008 the defendants made the first of five unsuccessful applications for a stay of execution of the judgment or of certain aspects of it. The fifth such application was made on 22 April 2009 by the present appellants in circumstances to which I shall refer in a moment. The application was refused by David J on 6 May 2009.
On 22 May 2009 the present appellants filed a notice of appeal against the judgment of David J. Being an appeal against an interlocutory judgment, the appellants require permission to appeal. The application for permission was made under r 285(1)(a) of the Supreme Court Civil Rules 2006 (SA). It was referred by this Court for oral argument today pursuant to r 291(3)(b). The Court has been assisted by written outlines of argument and the convenient assembly of all relevant documents in a bound volume.
Before dealing with the application it is necessary to refer to some additional facts. The second to sixth defendants carried on a substantial farming partnership. The second and sixth defendants (“the Tiver Parents”) are the parents of the fourth and fifth defendants. The third defendant is the grandmother of the fourth and fifth defendants.
The defendants were unrepresented at the trial. At various times the Tiver Parents and the fifth defendant appeared in person and on behalf of all the defendants with the leave of the Court. That leave was given with the implied, if not the express, authority of all the other defendants and at the request of the defendants who appeared.
The notice of appeal filed on 10 December 2008 by all the defendants contained some 25 grounds. No steps have been taken to pursue that appeal or those grounds.
The first application for a stay was refused by Sulan J on 23 January 2009.[1] In the course of his reasons for judgment Sulan J found, among other things, that the defendants were unable to make interest payments on the judgment sum, and that they did not dispute that it is unlikely that the plaintiff will recover the full amount of the judgment. The Judge was not satisfied that the defendants would not be able to purchase property in the same area if their appeal was successful and their properties had been sold. Finally, he observed that none of the grounds in the judgment appealed against by the defendants provided a strong arguable case.
[1] Landmark Operations Ltd v J Tiver Nominees Pty Ltd [2009] SASC 14.
On 2 March 2009 the plaintiff took possession of the real property of the partnership in accordance with the orders of Sulan J.
On 6 April 2009 the Tiver Parents were each declared bankrupt.
On 17 April 2009 the present appellants filed and served a supplementary notice of appeal as permitted by r 289(2) of the Supreme Court Civil Rules 2006. By that supplementary notice of appeal the appeal is now only pursued by the present appellants and not by the Tiver Parents. The grounds of appeal contained in the first notice of appeal are now not pursued. It is necessary to summarise briefly the grounds contained in the supplementary notice of appeal.
Ground 1 recites various findings of the trial Judge as to the deteriorating financial position of the partnership over a number of years as a result of various alleged misconceptions of and actions taken by the Tiver Parents in managing the partnership.
In ground 2 the present appellants allege that the Tiver Parents owed them a fiduciary duty which, on the findings of the trial Judge, was breached.
In ground 3 it is alleged that the trial Judge erred in permitting the Tiver Parents to represent the present appellants. It is alleged that they had no right so to represent the present appellants, and that in doing so, they had a conflict of interest.
Ground 4 alleges that the trial Judge erred in not warning or advising the present appellants of the fact that there was no such right of audience, that there was a conflict of interest, of the fact that the case which they could put was a very different case from that which the Tiver Parents were putting, and that the present appellants should get independent legal advice and representation. It is not explained how the trial Judge was to know that there was a conflict of interest as now alleged or that the present appellants could be putting a rather different case.
Ground 5 alleges that the trial Judge erred in “not releasing funds held in Court to the [present appellants] which were the proceeds realised on the sale of crops owned and produced by the Partnership. Had those funds been released to the [present appellants] that would have enabled the [present appellants] to obtain separate legal representation”. Once again, it is not explained whether any such application for the release of funds in that manner was made to the Judge.
Ground 6 pleads the alternative case that the present appellants could have put, including an allegation that the present appellants were in a position of special disadvantage in the operation of the partnership in respect of which the plaintiff took an unconscientious advantage, particulars of which are pleaded, and as a result of which the present appellants were entitled to relief under ss 51AA, 51AB or 51AC of the Trade Practices Act 1974 (Cth).
None of those grounds or anything resembling them appears in the notice of appeal filed on 10 December 2008.
In their prayer for relief the present appellants seek an order for a new trial between the plaintiff and the present appellants.
The only other fact that should be noted is that the present appellants acknowledge that the judgment debt is far beyond the financial capacity of the present appellants to pay, and that the plaintiff has issued bankruptcy notices against the third, fourth and fifth defendants. An application to set aside the bankruptcy notices was dismissed in the Federal Court of Australia on 22 May 2009.
It is convenient to address first the principles applicable to an application for permission to appeal. In South Australian Government Financing Authority v Bank of New Zealand[2] the Full Court of this Court cited with approval the practice adopted in the Supreme Court of Victoria in BHP Petroleum Pty Ltd v Oil Basins Ltd.[3] In that case Fullagar J said:[4]
As this is an application for leave to appeal from interlocutory orders, the authorities show that this Court should address itself to two questions, as follows: (1) whether the correctness of the orders [appealed against] is attended with sufficient doubt to warrant their being reconsidered on appeal; and (2) whether substantial injustice will be caused to the applicant … if the orders [appealed against] stand: see, for example Niemann v. Electronic Industries Ltd. [1978] V.R. 431, at p. 433, per McInerney J., and at pp. 441-2, per Murphy J. At p 441, Murphy J said, inter alia: “If the order was correct then it follows that substantial injustice could not follow. If the order is seen to be clearly wrong, this is not alone sufficient. It must be shown, in addition, to effect a substantial injustice by its operation.”
[2] [2002] SASC 56, [13].
[3] [1985] VR 756.
[4] Ibid 758.
This is consistent with an earlier decision of this Court in Glenauchen Pty Ltd v Circuit Finance Pty Ltd[5] to similar effect.
[5] [2001] SASC 61, [3].
The first question therefore involves a consideration of the correctness of the decision of David J, and whether the appeal has any prospect of success. As this is an application for permission to appeal against a refusal by David J to grant a stay pending an appeal, it is also appropriate to consider the circumstances in which a stay will be granted pending an appeal. The position concerning such applications was, with respect, correctly summarised by Sulan J in deciding the first application for a stay.[6] After reviewing a number of authorities Sulan J said:[7]
Rule 300(2) provides that the Court may grant a stay for a proper reason. In determining a proper reason, the Court will determine whether, having regard to all the circumstances, the justice of the case requires the making of such an order.
The Court will have regard to what is fair in the circumstances of the case. In so doing, the Court must balance the interests of the parties and have regard to the balance of convenience.
[6] Landmark Operations Ltd v J Tiver Nominees Pty Ltd & Ors [2009] SASC 14.
[7] Ibid [29]-[30].
Apart from a number of relevant discretionary considerations to which I will refer later, a stay will not be granted where the grounds of appeal are unarguable,[8] where the failure of the appeal is clearly demonstrable,[9] or where an appeal, not requiring leave, is lodged without any real prospect of success and simply in the hope of gaining a respite against immediate execution upon the judgment.[10] I therefore turn to a consideration of the prospects of success of the appeal against the judgment of Sulan J on the trial.
[8] Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184; Technilock (Australia) Pty Ltd v Mondami Pty Ltd [1999] SASC 94, [6].
[9] Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] 1 VR 150.
[10] Alexander v Cambridge Credit Corporation Ltd (Receiver Appointed) (1985) 2 NSWLR 685, 695.
By purporting to lodge a supplementary notice of appeal, the present appellants have sought to amend their original notice of appeal.[11] In such an event this is the same appeal as that commenced on 10 December 2008.
[11] See r 289(2) Supreme Court Civil Rules 2006 (SA).
Rule 295(2) of the Supreme Court Civil Rules provides:
(2)Unless an appellate proceeding is set down for hearing within 6 months after the proceeding is commenced or a longer time allowed by the Court, the proceeding is taken to have been discontinued and lapses.
The appeal has not been set down for hearing. The Court has not extended the time within which it may be set down for hearing. The appeal is therefore taken to have been discontinued. I am aware that an application for an extension of time within which to set down the appeal for hearing was filed on 10 June 2009. I am not aware that that has been set down for hearing. It is not for this Court to decide whether that application will be successful. However, the timing of that application in relation to this application is not insignificant, and I can only observe that, as at present, the appeal is taken to have been discontinued.
There is, however, a significant argument that the supplementary notice of appeal is not merely an amendment of the original notice of appeal but a completely new appeal. The parties are not the same and the grounds are quite different. If it is a fresh appeal, the appeal is many months out of time, and no application has been made to extend the time within which to bring the appeal.
There are therefore substantial procedural difficulties in the way of the present appellants in proceeding with their appeal.
There are, however, further significant hurdles in the way of the present appellants. The case now sought to be advanced against the plaintiff was neither pleaded nor litigated at the trial. Although there was an unconscionable conduct case sought to be pleaded by way of counterclaim, that was quite a different case from that evidenced by the supplementary notice of appeal.
Upon the hearing of the application before David J the present appellants conceded that the matters now sought to be raised in the supplementary notice of appeal were not pleaded or argued at the trial, and that so far as the trial Judge was concerned, questions of conflict of interest among the defendants were not an issue. They conceded that a new defence would have to pleaded and that, as is obvious, if they were successful there would have to be a new trial. There can be no doubt that the present grounds raise questions of fact which did not arise and which would require the leading of evidence which was not led at the first trial.
Ground 3 of the supplementary notice of appeal, which asserts that the trial Judge erred in permitting the Tiver Parents to represent the other defendants on the ground that they did not have a right of audience other than to represent themselves, has no foundation in law. Under the 1987 Supreme Court Rules the Court has a discretion to permit non-legal representation if in the interests of justice that appears to be necessary or convenient.[12] Furthermore, representation was not left entirely to the Tiver Parents. The fifth defendant appeared on his own behalf and on behalf of the other defendants. There was never any suggestion before the trial Judge that the representation was inappropriate or that there was any conflict of interest between the parties.
[12] Galladin Pty Ltd v Aimnorth Pty Ltd (1992) 60 SASR 145, 147. Note that under the Supreme Court Civil Rules 2006, r 22, a person may only be represented in proceedings before the Court by a lawyer, but that a party who appears personally in proceedings may, with the Court’s permission, be assisted in the presentation of the case by a person approved by the Court.
Furthermore, contrary to assertion in ground 4 of the notice of appeal, the trial Judge had no duty to advise the appellants as to any alternative case that they might have, let alone to identify a conflict of interest when the presentation of the case suggested quite the contrary.
Before David J counsel for the present appellants said that they did not challenge any of the trial Judge’s findings of fact. Mr O’Brien repeated that before us today. He acknowledged before David J that the present appellants were not seeking to attack any of the findings made by the trial Judge. If that is so, a number of the particulars alleged in ground 6 of the supplementary notice of appeal cannot stand.
It is well established that a party is bound by the manner in which it pleads and conducts the case at trial. Save in exceptional circumstances, new issues and claims cannot be raised for the first time on appeal. Water Board v Moustakas[13] is authority for the proposition that generally, where a case against a party, which is not a case which the party has been required to meet at trial, and involves evidence which the party was not required or permitted to lead in relation to that case, an appellant will not be permitted to raise it on appeal. In their joint judgment, Mason CJ, Wilson, Brennan and Dawson JJ said:[14]
More than once it has been held by this Court that a point cannot be raised for the first time upon appeal when it could possibly have been met by calling evidence below. Where all the facts have been established beyond controversy or where the point is one of construction or of law, then a court of appeal may find it expedient and in the interests of justice to entertain the point, but otherwise the rule is strictly applied.
In deciding whether or not a point was raised at trial no narrow or technical view should be taken. Ordinarily the pleadings will be of assistance for it is one of their functions to define the issues so that each party knows the case which he is to meet. [Footnote omitted].
[13] (1988) 180 CLR 491.
[14] Ibid 497.
In this case the present appellants now seek to mount a case against the plaintiff which was neither pleaded nor the subject of any evidence at the trial. I agree with David J that the supplementary notice of appeal does not have sufficient prospects success as to warrant the granting of a stay of execution pending the appeal.
The Judge also took into account other discretionary factors. I would reject, as David J did, the present appellants’ argument that the failure to grant a stay would destroy the subject matter of the appeal. The execution on the judgment has now largely been carried out. The argument put by the present appellants is that if they are forced into bankruptcy, as seems likely, they would be required to pay any income in excess of a specified amount to their trustee in bankruptcy, and this would deprive them of the means to fund an appeal. That may be so, but if there were any merit in the appeal there is nothing to prevent the trustee in bankruptcy from stepping into their shoes. It is not a question of destroying the subject matter of the appeal.

It might be different if the present appellants had shown any enthusiasm to prosecute the appeal. They have been dilatory in seeking to progress the appeal to the extent that it is now taken to be discontinued. There has been no offer to make any payment of interest on the judgment pending the appeal. The present appellants would appear to have no means of satisfying the judgment other than by way of sale of the partnership property, of which the plaintiff has now taken possession. There is no evidence to suggest that if the present appellants were to be successful on the appeal, the plaintiff could not pay to them any monies ordered to be paid as a result, nor is there any suggestion that, if they were successful, they could not purchase land in or around the same area in order to conduct a similar business.
It follows that, in my opinion, the present appellants have no real prospect of succeeding on the appeal against the decision of David J. Accordingly, I would refuse permission to appeal.
VANSTONE J. I agree with the order proposed by Bleby J and with the reasons he has given.
WHITE J. I agree, the application for permission to appeal be refused. I also agree with the reasons just given by Bleby J.