Rigg & Anor v Commonwealth Bank

[2001] HCATrans 175

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S186 of 2000

B e t w e e n -

ANTHONY THOMAS RIGG and DOROTHY ANNE RIGG

Applicants

and

COMMONWEALTH BANK OF AUSTRALIA

First Respondent

STEPHEN HENDERSON ROGERS

Second Respondent

W. ROGERS REALTY PTY LIMITED

Third Respondent

Application for special leave to appeal

GAUDRON J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 1 JUNE, 2001, AT 2.20 PM

Copyright in the High Court of Australia

_________________

MR D. C. FITZGIBBON:   May it please the Court, I appear for the Riggs.  (instructed by Mr A.T. Rigg and Mrs D.A. Rigg)

MR A. G. BELL:   If it please the Court, I appear for the respondents (instructed by Mr L.E. Taylor)

GAUDRON J:   Yes, Mr Fitzgibbon.

MR FITZGIBBON:   Thank you.  May it please the Court, there is a request in the oral submissions but I determined, in looking at the matter earlier this week, that it may be preferable that I set out the gravamen in what I am saying.  I have done so in a short submission of four pages, and there is nothing in there that will come as a surprise, I do not think, to my friend.  Attached to that are two sets of documents, which were not, in fact, made available to the Court in the other material.  One is a judgment which we were only able to obtain yesterday, and that is the matter of Moylan. That is a Court of Appeal judgment.  In addition to that there are the two parts of the 1922 Pubic Service Act and the regulation, that part of it which I rely on.

GAUDRON J:   Yes, well, I will be interested to hear how you say you rely on them, but we will receive those documents at this stage.  You have no objection, do you, Mr Bell.

MR BELL:   No.

MR FITZGIBBON:   Thank you.I did attempt to tender them through the Registry before but they said I should seek leave to hand them up in Court.

GAUDRON J:   You will speak to these?

MR FITZGIBBON:   I will speak to those, thank you, your Honour.  I believe it will assist the Court in both narrowing the issues ‑ ‑ ‑

GAUDRON J:   Now, when I look at page 2, do I not detect that there is there sought to be made a case that was not made below?

MR FITZGIBBON:   Only in a limited sense, and, although my opponents deny this in their answer, in fact, the argument that was put to the Court of Appeal, and, indeed, to the lower court, was an argument that was a duty of care, and that, in fact, in the very lengthy submissions I put to the Court of Appeal I included a closing argument ‑ ‑ ‑

GAUDRON J:   The first question is, was that case pleaded at first instance?

MR FITZGIBBON:   No.  I would suggest it – but, certainly, it is so that it has not been pleaded to the extent that the conduct of the Bank officers, as, in fact, officers of the Commonwealth under 75(v).  That part of it is certainly my submission in this Court.

GAUDRON J:   Well, it may be – well, Mr Fitzgibbon, it was not pleaded at first instance?

MR FITZGIBBON:   No, although the context ‑ ‑ ‑

GAUDRON J:   On what basis can I possibly assume that had the matter been pleaded, it would not have elicited evidence from the respondent?

MR FITZGIBBON:   Well, the answer to that, your Honour, is that it has always been an issue, and, indeed, my learned leader, Mr Parker QC, cross‑examined and challenged and submitted – in fact, I would suggest a good bulk of the case concerned the conduct of the Bank’s officers and, in particular, of course, the one I challenge in the written submissions, and that, of course, is also the basis in the Court of Appeal.  But I do admit I have taken it a step further.  I have said that, and that submission is my submission, and I do not, in fact, retract from that.  That, in fact, under the issue of a duty of care it is a very clear factor that these parties were, in fact, officers of the Commonwealth under 75(v).

GAUDRON J:   Now, this matter at first instance was about, in essence, the compromise reached between your clients and the Bank; is that correct?

MR FITZGIBBON:   Yes.

GAUDRON J:   The duty of care argument, which you concede you are taking a little bit further, how does it relate to the compromise agreement?

MR FITZGIBBON:   Well, your Honour, the position is this, that what I submitted to the Court of Appeal - and that material is, in fact, in front of you by way of a notice of appeal in the application books themselves - but in the actual submissions I put, I put:

It is respectfully submitted –

at page 12.

that if the submissions of the appellants are correct with respect to the breaches of ordinary conveyancing procedure and co-lateral obligations, together with a total inadequate notice, then the flagrant and contumacious behaviour the Bank is plainly and unarguably discerned.

Now, you may think that there is an older and wiser head who helped me prepare those submission in equity, but that is the basis of what I submitted to the Court of Appeal, and the first argument that I raise is that the Court of Appeal failed to address any of those submissions.

GAUDRON J:   Do we have the notice of appeal to the Court of Appeal?

MR FITZGIBBON:   Not the phraseology that I put to your Honour but the actual submissions.

GAUDRON J:   No, but do we have the notice of appeal?

MR FITZGIBBON:   Yes, they are, in fact, before your Honours.

GAUDRON J:   Whereabouts?

CALLINAN J:   Mr Fitzgibbon, you have a much more fundamental problem than that.  In this document that you have handed up, you have alleged or your clients have alleged:

unlawful and unconscionable conduct and possibly criminal conduct contrary to the Commonwealth Crimes Act.

In other words, an allegation of criminal conduct is made against people for the first time in this Court.  Now, I am sorry, that is totally the wrong thing to do.  To make those sorts of allegations, to seek to make them here, when it was not even pleaded, no case was made, no case in that respect was sought to be made at all, and you want to raise it for the first time here.

MR FITZGIBBON:   No, I do not.

CALLINAN J:   Well, yes, you do.  In paragraph 6 you say that.  I am reading from your paragraph 6.

MR FITZGIBBON:   Yes, I say that, your Honour, but I do not rely on it in terms of what I am really submitting.

CALLINAN J:   Well, we can strike that out, can we?  Can we strike paragraph 6 out?

MR FITZGIBBON:   Certainly, the last part of that paragraph, your Honour, I would agree is not appropriate, but the first part of the paragraph I do rely on, and, indeed, I suggest that was the very purpose.

CALLINAN J:   Well, you are alleging improper motive.

MR FITZGIBBON:   Yes, I am

CALLINAN J:   Well, again, that is a matter that evidence might be called about.  Needs to be the subject of an allegation?  An opportunity for the defendant to strike it out as scandalous and vexatious unless it is supported by properly pleaded facts.

MR FITZGIBBON:   Yes.  Yes.

CALLINAN J:   It is totally wrong for us to permit you to try to raise a serious point like this alleging misconduct at this stage for the first time:  improper motive.

MR FITZGIBBON:   Well, with respect, your Honour, it was raised ‑ ‑ ‑

CALLINAN J:   Not as I read Justice Brownie’s reasons for judgment.

MR FITZGIBBON:   No, that is correct.

CALLINAN J:   Well, that was the trial, Mr Fitzgibbon.

MR FITZGIBBON:   Yes, thank you.

CALLINAN J:   Not what happened in the Court of Appeal.  That is where the facts were dealt with.  That is where people were given an opportunity of raising facts and cross-examining.

MR FITZGIBBON:   Yes, and, in fact, your Honours, that is what occurred.  My learned leader, in fact, cross-examined extensively to that purpose, and I agree that the last part of the paragraph is inappropriate; I have no difficulty with that, but the part of the first part of paragraph 6 I suggest is something that arises out of a conduct of -.and the cross‑examination during the trial.  If your Honours doubt that, I have ‑ ‑ ‑

GAUDRON J:   It is not sufficient that there be cross-examination; the case has to be pleaded.  The trial judge has to know what the case he or she is to determine.

CALLINAN J:   What is the cause of action anyway?

MR FITZGIBBON:   I believe the cause of action, your Honour, is, in fact, unconscionable conduct but not within the trade practices.  As your Honour would know, it has a much wider gravamen than that.

CALLINAN J:   Well, there is no claim under a head of “unconscionable conduct” in the pleadings, is that right?

MR FITZGIBBON:   No.

CALLINAN J:   No facts were, therefore, pleaded in order to support such a claim, is that not right?

MR FITZGIBBON:   No, I do not think that to be, with respect, quite correct.

CALLINAN J:   Well, there is no cause of action pleaded.  So nothing that was adduced in evidence, whether in cross-examination or otherwise, could be relevant to a matter that was not pleaded.

MR FITZGIBBON:   With respect, I believe there was a case made out which was very clear, and it was very clearly on the misconduct of the Bank and its officers, and that is the way the case developed.

GAUDRON J:   Notwithstanding that the issue was about the settlement that had been reached.

MR FITZGIBBON:   Yes, that is certainly the way the case started out.

GAUDRON J:   What was the misconduct?  In respect to what was the misconduct alleged:  the settlement agreement, or matters that had developed between the parties prior to the settlement?

MR FITZGIBBON:   The answer to that is both, but in the immediate context the argument that was made out by my learned leader was in relation to the carrying out and conduct of certain officers.

GAUDRON J:   In relation to what?

MR FITZGIBBON:   In relation to the actual agreement and the matters that, in fact, that flowed from that, and, in essence ‑ ‑ ‑

CALLINAN J:   Well, the allegation was that they had not acted promptly in managing and selling the property, is that not right?

MR FITZGIBBON:   That is one aspect, your Honour, but the other ‑ ‑ ‑

CALLINAN J:   Justice Brownie found as a fact that the value of the property or the price at which it was sold was about the value that it had before the Commonwealth Bank entered into possession or sought to sell it, and that is at paragraph 36 at pages 14 and 15, so even it there had been mismanagement, there was no loss.  That is what his Honour found.

MR FITZGIBBON:   I accept that, but the difficulty is, your Honour, that the case proceeded on the basis of particularly the conduct of the solicitor who was part of the Bank but advising the Bank, and, in effect, there were a series of wrongful conduct alleged.  They are not before your Honour, but they were very carefully set out in front of the Court of Appeal.  The Court of Appeal simply chose to say, “We agree with the judge down below.”  Those are my words.  I can, in fact, refer precisely to what they said, but, in effect, the conduct of the Bank and its officers was not dealt with.

GAUDRON J:   By whom?

MR FITZGIBBON:   By the primary judge, nor, indeed, by the ‑ ‑ ‑

GAUDRON J:   Well, what do you say that it was necessary to deal with?

MR FITZGIBBON:   May I put it this way, and with my friend’s permission, it may become more clear if I have liberty to hand to your Honours the submissions that I made to the Court of Appeal, none of which I say were answered.

GAUDRON J:   The question is what was in issue at first instance?  You could make all the submissions you would like to the Court of Appeal, but unless they are necessary to answer, you have no basis for a complaint that they were not answered.

Now, what were the submissions at first instance that raised misconduct, and how did they come before the Court of Appeal in a way that required answer?

MR FITZGIBBON:   Yes, thank you. 

CALLINAN J:   Why cannot you just tell us, Mr Fitzgibbon?  What do you say – now, please, do not interrupt me – what do you say Bank officers did that they should not have done or the solicitor for the Bank did that he or she should not have done.  Just tell us.  Tell us in a few sentences.  Summarise it.

MR FITZGIBBON:   Yes, certainly.  Thank you.  What I say is this. that the officer, Mr Mathews, failed to respond to his opposite number, Mr Lockhart, and that is found at precise pages.

CALLINAN J:   Respond about what?

MR FITZGIBBON:   Well, about the negotiations of the settling of the loan under the agreement involved.

CALLINAN J:   All right.  What else was misconduct?

GAUDRON J:   Now, is that before or after the settlement?

MR FITZGIBBON:   This is, in fact, after what is said to be the settlement act.  I do believe it would of assistance if your Honours were to see the basis - it is a very complex case - because other than that you really may not understand what I am saying, and I think that would be unfair in itself.  Now, I have copies of those prepared, and it would seem to be a much more expeditious way of dealing with it.

GAUDRON J:   Have you seen a copy of these?

MR BELL:   I gather these are the submission to the Court of Appeal.  I do not object if they are handed up.

GAUDRON J:   We will receive those.

MR FITZGIBBON:   Thank you.

GAUDRON J:   Which page?

MR FITZGIBBON:   The matter of misconduct of the Bank I say arises on page 2, page 3.

GAUDRON J:  

The bank never elected to terminate the contract.

MR FITZGIBBON:   Yes, if your Honour moves beyond that, that is a part of it, but, it in fact, goes into greater detail on 2, 3, and 4.

CALLINAN J:   Well, you are saying Mr Mathews, who presumably is a Bank officer, did not answer letters and respond to telephone calls.  Is that the essence of it?

MR FITZGIBBON:   It goes much deeper than that, and I do have the evidence available if your Honours wish to see that.

CALLINAN J:   Why do you not just summarise it for me.  Is that the effect on it?

MR FITZGIBBON:   Well, in essence, what it amounts to is this.  That there was conduct where, one could say it best, avoidance.  He said, “I am acting on instructions of the Bank.”  He was not to negotiate a settlement.  No, I am sorry.  I withdraw that point.  He was to do other things.  In effect, he failed to respond.  There is much evidence concerning that. 

CALLINAN J:   Mr Fitzgibbon, I am sorry to mention this so belatedly, but I have a superannuation fund that has some shares in the Commonwealth Bank.  It is fewer than 3,000.  I cannot tell you the number, but I should tell you that.  I am sorry for not mentioning it before.

MR FITZGIBBON:   No, your Honour, no issue is taken.  We would have no difficulty with your Honour’s judgment on that, no difficulty at all.

GAUDRON J:   Now, at first instance, those matters, I take it, were relevant to the question whether the Bank terminated and, perhaps, as to whether the Bank waived.

MR FITZGIBBON:   Yes.

GAUDRON J:   Were they relevant to anything else?

MR FITZGIBBON:   Yes, they go to the ‑ ‑ ‑

GAUDRON J:   Now, at first instance.  Were they relevant at first instance to anything else?

MR FITZGIBBON:   Yes, I believe that they do go to that, but they go beyond that because ‑ ‑ ‑

GAUDRON J:   Well, to what?  What other issues did they go to at first instance?

MR FITZGIBBON:   Well, it emerges in evidence, your Honour, in short, that my client was one of the persons who went to the banking inquiry, among others.  There is a juxtaposition between that, in my submission, and that emerges in the evidence, and, in effect, that is a further matter that - is a matter that goes beyond just avoiding phone calls and not getting back in touch with the solicitor.

GAUDRON J:   Yes, but to what issue to be determined by the trial judge in relation to the settlement did these matters go?  Mr Fitzgibbon, this Court does not conduct Royal Commissions.  We are restricted to the issues raised at first instance and on appeal.  We cannot go beyond them.

MR FITZGIBBON:   Yes.  My submission on that would be, your Honour, if your Honours turned to page 7 of the submissions I made to the Court of Appeal, I believe that summarises the answer I would give in relation to that.  In effect, the primary judge did not rule on these issues at all, in my submission, and, indeed, it is just not sufficient for the Court of Appeal to say, as it did ‑ ‑ ‑

GAUDRON J:   Why was it necessary for the trial judge to rule on them?  He determined the issues raised against you by reference to the contract and by the conduct.

MR FITZGIBBON:   Yes, but, with respect, if I may raise it in this way, that what I believe should have been determined there, and, indeed, so should the Court of Appeal, not simply said, “Well, we accept it.”, and I am thinking particularly of Amadio.  Now, I am not saying this is an Amadio Case in terms of an illiterate lady or anything like that, but what I am saying is that Justice Deane at pages 474 and 475 said this:

The equitable principles relating to relief against unconscionable dealing and the principles relating to undue influence are closely related.   . . . however, distinct.

He goes on to state:

Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so.

Now, what I say is this, that the trial judge, in fact, avoided this issue completely, and, indeed, my learned leader spent ‑ ‑ ‑

GAUDRON J:   Was there an application for equitable relief before the trial judge?

MR FITZGIBBON:   Yes, there was certainly a reliance on ‑ ‑ ‑

GAUDRON J:   No.  What was the application for relief?  Now, am I right in thinking these proceedings were commenced by the Bank?

MR FITZGIBBON:   Yes.

GAUDRON J:   And you defended them?

MR FITZGIBBON:   Yes, thank you.

GAUDRON J:   Yes.  You sought to resist what the Bank was seeking, but you, yourself, did not seek any relief.  Is that right?

MR FITZGIBBON:   No, that is not quite correct, your Honour.  In fact, one of the issues that was in front of the trial judge – I am probably well over my 20 minutes – but one of the issues was, in fact, whether equitable principles as to forfeiture - I think I put that in broad terms - was available here.  Yes, I called that forfeiture, but that is one of the – and the trial judge just simply says, “No, it is not available here.”  Then he moves to the second set of defences and he said, “Because the first failed, the second failed.”

So there is that equitable part of the trial that, in fact, is available and that is found at page 7 of the appeal document.  At paragraph 11, his Honour says:

The body of rules of equity relied upon operates to soften or ameliorate -

but at about point 8 he says:

But that is not this case.  Here, the Riggs did not pay the $380,000 by the date specified and BCA sues, seeking to enforce the contract according to its terms.  No party rescinded or purported to rescind the contract, and the Riggs do not seek specific performance of the contract.

The significant part about it was a good percentage of the case was taken up with the cross-examination by Mr Parker of Mr Mathews, and his instructing seniors, I will put it that way, and, yet, there is absolutely nothing about that.  Now, it goes to the heart, as I say, of the very challenge that was brought as it was put that, in fact, there was that avoidance, and then the Bank said, in effect, “We have no duty of care.”  That is really, really what was being said.  Now, I admit I have extended it to the officers of Commonwealth, and that was not certainly in front of the Court of Appeal, but the issue I clearly put to the Court of Appeal which they did not answer.  This is page 12 of my submissions:

that if the submissions of the appellants are correct with respect to breaches of ordinary conveyancing procedure and co-lateral obligations -

and I say the co-lateral obligation arise not only by reason of what was done, but what also was not done, and the difficulty here is this person is quite clearly an officer of the Commonwealth.

The other matter, your Honour, is probably that of reasonable notice, which I rely on equally as much.  That is part of my submissions.

GAUDRON J:   Now, your time has well run over.  Could you be brief?

MR FITZGIBBON:   I will wrap up very quickly.  Indeed, in the appeal notice, which is before you, at paragraph 6, the concluding part of that is important because it says:

The primary judge was wrong in his construction and interpretation of the express and implied terms of the contract in that he wrongly held that the first respondent was not in breach of the said terms, or that the implied terms did not arise . . . in not hold that the clause that the first respondent would assist and not hinder the appellants to refinance the loan was not so obvious that it went without saying when such construction gives licence to the conduct of which Mr Mathews gave evidence –

and, as I say, was cross-examined extensively on.

and by which the first respondent stand condemned.

Now, the difficulty is it is just not sufficient, as the Court of Appeal did here, to say it is a good judgment and not give a reasoned decision, and that is why I relied particularly, of course, on that quite recent matter, particularly of Moylan, because I believe, in essence, at the third page of my submissions, that really is a very necessary part: an appellant court should intervene, can intervene, but did not intervene.  For that reason ‑ ‑ ‑

GAUDRON J:   Yes, well, we think we understand that part of your submissions.

MR FITZGIBBON:   Thank you.  Yes, I do not believe I can at this time raise the matter beyond that.  Thank you.  I am grateful for the extra time.

GAUDRON J:   Thank you, Mr Fitzgibbon.  Yes, we need not trouble you, Mr Bell.

Having regard to the issues raised in the pleadings and the findings of fact at first instance and also to the acceptance by the applicants in the Court of Appeal that the Commonwealth Bank of Australia did not waive its rights with respect to payment of the first instalment under the agreement by which they settled the litigation between them, the proposed appeal does not enjoy sufficient prospects of success to justify the grant of special leave.  Accordingly, special leave is refused with costs.

AT 2.55 PM THE MATTER WAS CONCLUDED