McCarthy v McIntyre - [2000] FCA 1250

FEDERAL COURT OF AUSTRALIA
McCarthy v McIntyre [2000] FCA 1250
PRACTICE & PROCEDURE – remitter – whether trial judge erred in refusing appellant leave to re-open and adduce additional evidence – whether trial judge acted upon wrong principle, took irrelevant matters into consideration, mistook the facts or failed to take into account some material consideration – whether trial judge erred in concluding that without additional evidence claims remitted by Full Federal Court for determination could not succeed
TRADE PRACTICES – misleading or deceptive conduct – third party reliance – causation
Trade Practices Act 1974 (Cth) ss 52, 82
Fair Trading Act 1987 (NSW) s 42
House v The King (1936) 55 CLR 499 referred to
Flannery v Halifax Estate Agencies [2000] 1 All ER 373 referred to
Smith v NSW Bar Association (1976) CLR 256 referred to
McCarthy v McIntyre [1999] FCA 784 referred to
MAXWELL McCARTHY v NEVILLE McINTYRE & ORS
N 360 OF 2000
WHITLAM, EMMETT & HELY JJ
8 SEPTEMBER 2000
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 360 OF 2000

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

MAXWELL McCARTHY
APPELLANT

AND:

NEVILLE McINTYRE
FIRST RESPONDENT

AURO ROMANO McINTYRE
SECOND RESPONDENT

NEVITORO INVESTMENTS PTY LIMITED
THIRD RESPONDENT

JUDGE:

WHITLAM, EMMETT & HELY JJ

DATE OF ORDER:

8 SEPTEMBER 2000

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
       The appeal be dismissed.
2.        The appellant pay the respondents’ costs.
Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 360 OF 2000

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

MAXWELL McCARTHY
APPELLANT

AND:

NEVILLE McINTYRE
FIRST RESPONDENT

AURO ROMANO McINTYRE
SECOND RESPONDENT

NEVITORO INVESTMENTS PTY LIMITED
THIRD RESPONDENT

JUDGE:

WHITLAM, EMMETT & HELY JJ

DATE:

8 SEPTEMBER 2000

PLACE:

SYDNEY

REASONS FOR JUDGMENT
THE COURT:

This appeal arises out of a transaction that occurred in 1993 relating to shares in Edlan No. 54 Pty Limited (“Edlan”). At that time, Edlan owned a hotel known as the Tropicana Hotel (“the Tropicana”). The transaction gave rise to a proceeding commenced in the Court by Mr Ronald Ian McCarthy, generally referred to as Jack McCarthy (“Jack”), his brother Maxwell McCarthy (“Max”) and Edlan against Neville McIntyre (“Neville”), Auro McIntyre (“Auro”) and Nevitoro Investments Pty Limited (“Nevitoro”). Nevitoro is owned by interests associated with Neville and Auro.
A number of separate and discrete claims were made in the proceeding. A judge of the Court dismissed those claims that are presently relevant. Jack, Max and Edlan appealed against the orders dismissing those claims. On 16 June 1999 a Full Court, differently constituted from the present Full Court, ordered that the appeal by Max against the orders for dismissal be allowed and remitted certain claims by Max (“the Remitted Claims”) to the trial judge for determination by him consistently with the reasons for judgment of the Full Court.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] FCA 1250
Decision Date: 8 SEPTEMBER 2000

CaseChat Overview and Summary

In the case of McCarthy v McIntyre, the dispute involved claims made by the appellant, Max, against the respondents, the McIntyre interests, regarding a transaction involving the Tropicana. The case was heard in the Federal Court of Australia. Max sought to adduce new evidence to support his claims, which had been previously dismissed by the trial judge. The primary legal issue the court had to address was whether the trial judge had erred in his exercise of discretion when he refused Max leave to reopen the case to adduce new evidence.

The court examined the grounds on which the trial judge based his decision to deny leave to reopen the case. It was established that the trial judge had to consider specific factors such as whether the Full Court had expected additional evidence, the necessity of further evidence from Jack, the potential for re-litigating the case in its entirety, and any identifiable prejudice to the McIntyre interests. The court found that the trial judge had not erred in his discretion as there was no clear indication from the Full Court that additional evidence would be accepted, and the reopening of the case could lead to extensive litigation and expense. Moreover, the court did not find any specific prejudice to the McIntyre interests that would result from a reopening of the case.

Consequently, the court dismissed the appeal and ordered that the appeal costs be paid by the appellant, Max. The court upheld the trial judge's decision not to allow the case to be reopened for new evidence, concluding that the trial judge had exercised his discretion appropriately based on the circumstances presented.

Orders

Orders of the court

The appeal be dismissed.

2. The appellant pay the respondents’ costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

His Honour found at the trial that the average weekly sales for the Tropicana in the relevant period were approximately $40,000 per week. It was common ground that the figures supplied to the valuer were in the order of $47,000 to $48,000 per week. His Honour was not prepared to take judicial notice that Westpac would, or would not, have provided finance in the present connection if it had known that the takings of the Tropicana were only $40,000 per week rather than $47,000 to $48,000 per week. His Honour concluded, therefore, that there was no specific evidence that would support a finding that, had the true figures been revealed, Westpac would not have provided finance. Nor, in the absence of any specific evidence, was his Honour prepared to conclude that finance would not have been available from any other source or that the parties would not have entered into the Tropicana transaction as they did. His Honour also found that there was no evidence that Max had suffered loss as a result of entering into the transaction. His Honour concluded, therefore, that the Remitted Claims must fail. Accordingly, his Honour ordered that the Remitted Claims be dismissed.NEW EVIDENCE Senior counsel for Max accepted that, to be successful on the appeal from the order refusing leave to reopen, it was necessary to demonstrate that the trial judge had erred in the exercise of his discretion in refusing leave. It is only if it could be shown that the trial judge acted upon the wrong principle, took irrelevant matters into consideration, mistook the facts or failed to take into account some material consideration that the exercise of discretion could be reviewed – House v The King (1936) 55 CLR 499 at 504-5. It was submitted that, if the Full Court concluded that the exercise of discretion miscarried, the Full Court should itself exercise the discretion, rather than remit the matter to the trial judge for redetermination. It was contended on behalf of Max that the trial judge erred in the exercise of his discretion in four respects:· in assuming that the Full Court had remitted the claims on the basis that they be decided on the evidence that was presently before the trial judge;· in considering that the additional evidence sought to be adduced by Max would necessarily involve further evidence from Jack because of the reliance that Max placed on Jack’s opinions;· in considering that the re-opening would inevitably involve reagitating lengthy litigation in most of its dimensions and would put the parties to immense expense;· in failing to take into account the lack of any identifiable prejudice to the McIntyre interests that might follow from a reopening. There is nothing in the reasons of the first Full Court to suggest that the Full Court expected that additional evidence would be received. There was no suggestion of a new trial. The Full Court’s conclusion was simply that the Remitted Claims had not been addressed by the trial judge. The order made was for Max’s “third party reliance claim” against the McIntyre interests to be remitted for determination by the trial judge consistently with the Full Court’s reasons.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 360 OF 2000

BETWEEN:	MAXWELL McCARTHY APPELLANT
AND:	NEVILLE McINTYRE FIRST RESPONDENT AURO ROMANO McINTYRE SECOND RESPONDENT NEVITORO INVESTMENTS PTY LIMITED THIRD RESPONDENT
JUDGE:	WHITLAM, EMMETT & HELY JJ
DATE OF ORDER:	8 SEPTEMBER 2000
WHERE MADE:	SYDNEY

JUDGE:	WHITLAM, EMMETT & HELY JJ
DATE:	8 SEPTEMBER 2000
PLACE:	SYDNEY