Lunt v New Resource Holdings Pty Ltd - [2010] WASCA 126

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: LUNT -v- NEW RESOURCE HOLDINGS PTY LTD [2010] WASCA 126

CORAM: PULLIN JA

HEARD: 11 JUNE 2010

DELIVERED : 11 JUNE 2010

FILE NO/S: CACV 78 of 2008

BETWEEN: WILLIAM TREVOR LUNT
Appellant
AND
NEW RESOURCE HOLDINGS PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :TEMPLEMAN J
Citation  :NEW RESOURCE HOLDINGS PTY LTD -v- LUNT [No 2] [2008] WASC 140
File No  :CIV 1489 of 2001

Catchwords:

Practice and procedure - Application to amend grounds of appeal - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category: B

Representation:

Counsel:

Appellant: Mr B W Duckham
Respondent: Mr P G McGowan

Solicitors:

Appellant: B W Duckham & Co
Respondent: Vincent Partners

Case(s) referred to in judgment(s):

de la Espriella Velasco v The Queen [2006] WASCA 31; (2006) 31 WAR 291
Lunt v Briggs [2009] WASC 134

PULLIN JA: The application which is before the court is an application dated 5 February 2010 to amend the grounds of appeal in accordance with the minute annexed to the affidavit of the appellant sworn 3 February 2010. The case involved proceedings before Templeman J.
New Resource Holdings Pty Ltd sued Mr Lunt and Waste Recovery Systems Ltd (WRSL) in action CIV 1489 of 2001. The plaintiff, WRS, those initials relating to an earlier name of the respondent, claimed that Mr Lunt, who was a director of the plaintiff, arranged for the payment of $200,000 of the plaintiff's money to a third party.
There is no dispute that this happened but Mr Lunt's defence was that his company WRSL was entitled to the money and that he collected the money as a result of that entitlement.
The background is, and there is no dispute about this, that WRS was indebted to WRSL in the sum of $325,000. This was owing because of an agreement between WRS, WRSL, Essex Properties, a company associated with Mr Briggs, and another company.
Under the agreement WRSL agreed to sell certain assets to the plaintiff for $3,325,000, that price to be satisfied by allotment of $3 million worth of shares and, as to the balance, the agreement read:
$325,000 shall be a loan owing by the plaintiff to WRSL which shall be classified as a subordinated loan and be payable in accordance with the terms and conditions of clause 11.
Clause 11 provided:
The subordinated loans shall be interest free and subordinated to all other creditors and loans and shall be repaid pro rata on the balance outstanding from time to time as at 1 July out of audited after-tax profits. In the event that the subordinated loans are not wholly or in part repaid from all of the audited after-tax profits in any financial year, then the subordinated loans shall with the agreement of WRSL and Essex Properties become repayable on demand.
There was also provision in cl 13 of the agreement for a pre-emption; that is, to prohibit parties from selling, assigning, transferring or otherwise disposing of any fully paid ordinary shares in the plaintiff without the written consent of the other parties.
Mr Lunt contended that in December 1992, Mr Briggs on behalf of Essex Properties, agreed that the loan of $325,000 would no longer be subordinated and he produced some correspondence concluding with a letter of 23 December 1992 which he said was signed by Mr and Mrs Briggs as directors of Essex Properties, acknowledging that the loan which was previously subordinated of $325,000 then ranked equally with all other creditors.
Mr Briggs denied that he made any such agreement. The letter produced by Mr Lunt, according to the trial Judge was a poor quality photocopy and Mr and Mrs Briggs denied having signed the document. Templeman J in his reasons found that he accepted the evidence of Mr and Mrs Briggs that they did not sign the letter and did not see it until after the proceedings had commenced.
Mr Lunt in his second line of argument said that Mr Briggs approved the payment to him and the explanation of this as revealed by the trial Judge's reasons was as follows. He said that $200,000 was money due to the plaintiff by an investor, a Mr Latief, who was to acquire some shares in WRS in a complicated transaction which involved Mr Latief providing to WRS $200,000 in the form of a bank cheque in April 1995. The bank cheque was not deposited into the plaintiff's Citibank account but into a bank account of one of Mr Lunt's companies, which I will give the initials ACT. This was at the Karrinyup branch of BankWest. According to the trial Judge Mr Lunt then drew a cheque on that account in the sum of $200,000 which on 15 April 1995 he deposited in a new account in the plaintiff's name, also at BankWest Karrinyup.
Mr Lunt was the sole signatory of that new BankWest account. On the basis of that authority he then arranged to have $200,000 transferred telegraphically from the plaintiff's account to someone in Hong Kong. Mr Lunt then flew to Hong Kong. The payee drew a cheque and used it to purchase a bank cheque payable to Mr Lunt. Mr Lunt then paid that money into an account in his own name and that of his wife. It was common ground according to the trial Judge that as at April 1995 the plaintiff had no after-tax profits, audited or otherwise.
On the basis of the finding that the loan of $325,000 remained subordinated, as the Judge had found, it followed that Mr Lunt had no authority to make a payment of $200,000 out of the plaintiff's funds in reduction of that loan if there was no other authorisation for the payment.
Templeman J in his reasons was prepared to accept that if Mr Briggs approved of the payment, Mr Lunt would have a complete defence to the claim against him. Templeman J said that this was so because although Mr Briggs was not a director of the plaintiff he controlled the plaintiff because of his shareholding in the company. I have already mentioned that Mr Briggs was also associated with Essex Properties.
Mr Briggs denied that he knew of or approved of the payment or of the Latief transaction. Mr Lunt sought to counter this denial by reference to a number of documents. These documents, which I need not refer to in detail, were documents which Mr Lunt said were either received by Mr Briggs and referred to the transaction and to the fact of the payment of the $200,000 to him, or documents signed by Mr Briggs, or documents faxed to Mr Briggs.
There was also a reference to a letter of 22 May 2000 in which Mr Briggs apologised to Mr Lunt for Mr Briggs' treatment of Mr Lunt. It was a letter of apology which Mr Lunt said was inconsistent with the claims brought against him because by then it was said that Mr Briggs knew that the unauthorised payment had been made.
For various reasons which it is not necessary to mention his Honour said that either the documents referred to were not received by Mr Briggs or were not signed by him. In relation to the letter of apology his Honour found that Mr Briggs had explained that he was in ignorance of the full circumstances of the April 1995 transaction and therefore the letter of apology did not support Mr Lunt's submission about its effect.
The result was that his Honour awarded judgment for WRS in the sum of $200,000, and the judgment was then made the subject of appeal to this Court.
I might just mention the history of the appeal and the proceedings below. The trial before Templeman J was in April and May 2008 and the reasons of the trial Judge were published on 16 July 2008. On 4 August 2008 there was an appeal notice. A consent notice was filed on 3 September 2008 extending the time for filing the appellant's case.
The appellant's case was filed on 25 September 2008. There was an application to amend the grounds of appeal in June 2009. An amended case was filed on 20 August 2009. The respondent's answer was filed on 11 September 2009. There was then an application in September 2009 to adduce fresh evidence which was an amended form of application which had first been made in June 2009.
There was then an amended appellant's case filed on 16 November 2009, another version filed on 3 December 2009 and on 15 December 2009 a further amended case was filed. Then on 5 February 2010 there was this application to amend the grounds of appeal.
By ground 13 of the grounds of appeal Mr Lunt seeks to establish that there was a miscarriage of justice based on fresh evidence. The fresh evidence was said to be evidence which came to light in other litigation between the parties and which the appellant says would support his claims that Mr Briggs knew of information or displayed knowledge of matters which would have altered the decision or may have altered the decision of Templeman J and for that reason seeks to have the judgment set aside. Ground 13 at present reads:
The appellant seeks a new trial/reopening or other orders upon the basis of the recently discovered fresh evidence in that failure to adduce the same would constitute a miscarriage of justice.
In the particulars there is a reference to a statement of Thomas William Johnson, an affidavit of Owen McShane and an affidavit of Mr Briggs, and these were annexed to an affidavit of the appellant sworn on 9 November 2008. There is also a reference to some other documents. The application that the appellant now makes is one to add the following words to ground 13:
And on the clean hands doctrine insofar as the witness Peter Briggs on behalf of the respondent failed to disclose the full circumstances of the appellant's loss of entitlement and denial of entitlement of, with and from the respondent.
In support of that proposed amendment to the ground the appellant proposes some particulars consisting of a reference to an affidavit of the appellant made on 3 February 2010. The affidavit refers to the witness statement signed by Mr Briggs in the action before Templeman J in which Mr Briggs said:
The defendant and I did not work for a salary but hoped to share the benefits of our work at the sale of (the plaintiff).
The affidavit continues that the evidence was adduced against the background which was then set out in the affidavit. It refers to the consultancy fees which were found to be payable to Mr Lunt in other proceedings between these parties or associated with these parties, that is in proceedings CIV 1501 of 2001 and CIV 1974 of 2001 which are the subject of reasons for decision and judgment of Heenan J in Lunt v Briggs [2009] WASC 134 and which is also the subject of an appeal to this court.
From the submissions made at the hearing today counsel for the appellant seeks to establish that what Mr Briggs said in his affidavit was disproved by matters referred to in the affidavit.
The affidavit of Mr Lunt goes on to refer to purported diversion of entitlements to shares in a company called Max Resources Ltd which resulted in some other proceedings between the parties, apparently in CIV 2762 of 2002. There is then a reference to alleged efforts to remove the appellant as a shareholder in the respondent and a transaction that was entered into which involved removal of the appellant and his companies as shareholders in the respondent, '[n]ot only without justification or documentation but also illegally.'
From all of this the appellant seeks to contend that Mr Briggs was speaking falsely when he said in his witness statement that Mr Lunt and Mr Briggs hoped to share the benefits of their work at the sale of the plaintiff.
The affidavit from Mr Lunt says that he recognises that all of the evidence was available at or upon the hearing of the proceedings before Templeman J but says that the thrust of the defence of such proceedings did not at the time include such matters as being 'of prominence.'
He deposes that he did cause the matter to be raised with counsel. He says that the matters are of such gravity, including an allegedly blatantly false ASIC form 484 which Mr Lunt claims contains false information, that this comprised 'exceptional circumstances' supporting the appellant's claims for a rehearing or new trial. In par 18 Mr Lunt continues:
In these circumstances I seek to adduce as fresh evidence in this appeal the above referred to facts as indicating that the respondent as plaintiff in participating in proceedings 1489 of 2001 did not come before the court with clean hands.
There is no merit at all in the application to amend the ground for various reasons. If Mr Briggs gave evidence in accordance with the statement which is referred to in the affidavit, then the particular statement relied upon was not in fact relevant to the issues even though it was allowed into evidence without objection.
Secondly, the information relied upon to suggest that the attempts were made to divert entitlements from Mr Lunt or his companies or to remove Mr Lunt as a shareholder in the respondent are irrelevant to the issues in this appeal and could only have gone to the credit of Mr Briggs and so could not have been led even at trial because it would have been evidence of collateral matters.
Thirdly, it is clear that consideration was given to whether the evidence identified in the affidavit could be led in the proceedings at trial. It was made the subject of consideration by counsel and clearly the decision was made not to lead it, probably for good reason including the reasons that I have already mentioned.
Although under r 47 of the Supreme Court(Court of Appeal) Rules 2005 (WA), an order may be made admitting additional evidence, that power to admit further evidence exists to serve the demands of justice. It is highly unlikely that parliament in conferring jurisdiction on the court to hear appeals intended that such a provision should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. The appellant admits that he knew about the evidence before the trial and it would not serve the interests of justice, even if relevant, to allow the appellant to now adduce this evidence. See de la Espriella Velasco v The Queen [2006] WASCA 31; (2006) 31 WAR 291 [146] and following. There are no exceptional circumstances in this case which would justify this additional evidence being led for the reasons that I have mentioned and so the application to amend the grounds of appeal is dismissed and I so order.