Thomas v HP Mercantile Pty Ltd

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NEW SOUTH WALES COURT OF APPEAL

CITATION:
Thomas v HP Mercantile Pty Ltd [2008] NSWCA 308

FILE NUMBER(S):
40822/06
40220/07
40221/07

HEARING DATE(S):
6 - 7 November 2008

JUDGMENT DATE:
20 November 2008

PARTIES:
Peter Thomas
HP Mercantile Pty Limited (A.C.N 097 362 877)

JUDGMENT OF:
Spigelman CJ Tobias JA Sackville AJA   

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
2614/03, 2902/03, 2909/03

LOWER COURT JUDICIAL OFFICER:
N G Rein SC DCJ

LOWER COURT DATE OF DECISION:
30 November 2006

COUNSEL:
Appellant: Einfield QC, J Stephenson

Respondent: D Fagan SC, Mr P Stitz

SOLICITORS:
Appellant: GJ Gooden Solicitor

Respondent: Versace McKenzie Lawyers

CATCHWORDS:
ASSIGNMENT OF CHOSE IN ACTION: Deed of loan between financier and investor in orchard project – offer of assignment of debt capable only of oral acceptance – whether funds actually advanced under deed of loan – whether offer of assignment validly accepted – whether assignment supported by consideration – whether assignment was immediate and unconditional so as to be enforceable in equity.
APPEAL – Application to adduce further evidence under s 75A(7) of the Supreme Court Act 1970 (NSW) – whether “special grounds” where evidence could have been obtained at trial.

LEGISLATION CITED:
Bankruptcy Act 1966 (Cth)
Civil Procedure Act 2005 (NSW)
Crimes Act 1914 (Cth)
Family Law Act 1975 (Cth)
Federal Court of Australia Act 1976 (Cth).
Passports Act 1938 (Cth)
Supreme Court Act 1970 (NSW)

CATEGORY:
Principal judgment

CASES CITED:
Akins v National Australia Bank (1994) 34 NSWLR 155
Aztech Science Pty Ltd v Atlanta Aerospace (Woy Woy) Pty Ltd [2005] NSWCA 319
CDJ v VAJ [1998] HCA 67; 197 CLR 172
Cook v Wright (1861) 1 B & S 559 at 569; 121 ER 822
Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; 205 CLR 507
Nolan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116
Norman v Federal Commissioner of Taxation [1963] HCA 21; 109 CLR 9
Nyerlucz v Dei Rocini (Court of Appeal, 8 September 1995)
Tamas v Streimer (Court of Appeal, 10 July 1981, unreported)
Wollongong Corporation v Cowan [1955] HCA 16; 93 CLR 435

TEXTS CITED:

DECISION:
1. The summons filed on 28 March 2007 by the claimant in CA No 40822 of 2006 (“Mr Thomas”) seeking leave to appeal from the decision of the primary Judge be dismissed.
2. Mr Thomas pay the costs of the opponent (“HPM”) to application for leave to appeal referred to in Order 1.
3. Mr Thomas’ summons filed on 1 October 2008, seeking an order that the Court receive further evidence, be dismissed.
4. Mr Thomas pay HPM’s costs of the summons referred to in Order 3.
5. The amended summons filed on 24 October 2008 by the claimant in CA No 40220 of 2007 (“Mr Hobson”), seeking an order extending the time for the filing and serving of a summons seeking leave to appeal, be dismissed, with costs.
6.The summons filed on 13 April 2007 by the claimant in CA…

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Details
Case
[2008] NSWCA 308
Decision Date

CaseChat Overview and Summary

The case involved an appeal from a decision of the primary Judge in the District Court of New South Wales. The proceedings were brought by HP Mercantile Pty Ltd (HPM) against several participants in the Tumut River Orchard Project, including Mr Thomas, Chandelle Nominees Pty Ltd, and Adrian Hobson. HPM sought to recover amounts allegedly due under Deeds of Loan executed by these participants. The claims were based on a series of assignments of the debts, ultimately from Merilbah Pty Ltd to HPM. The defendants challenged both the existence of the debts and the validity of the assignments. The primary Judge found that the debts existed and that the assignments to HPM were valid in equity concerning Mr Thomas, but not for Chandelle and Mr Hobson.

The legal issues before the Court of Appeal included whether the primary Judge erred in finding that the debts were created and validly assigned to HPM in equity, particularly in relation to Mr Thomas. A further issue arose from Mr Thomas' application to adduce further evidence, which was made pursuant to section 75A of the *Supreme Court Act 1970* (NSW). This required the Court to consider whether "special grounds" existed to receive evidence that could have been obtained at trial, given that the appeal was from a judgment after a trial on the merits.

The Court considered the evidence presented at trial and the primary Judge's findings of fact. The primary Judge had accepted the evidence of Mr Purcell regarding the validity of the assignments, including the acceptance of an offer of assignment by Treetop Project Ltd (TPL). Mr Thomas sought to adduce an affidavit from Mr Moody, a former director of TPL, which directly contradicted Mr Purcell's evidence and asserted that the offer of assignment was never accepted. The Court noted that section 75A(8) of the *Supreme Court Act 1970* (NSW) restricts the reception of further evidence on appeal from a trial on the merits unless special grounds are shown. The Court found that the evidence sought to be adduced by Mr Thomas did not meet the threshold for admission under this provision, as it was evidence that could have been obtained and presented at trial.

Consequently, the Court dismissed Mr Thomas' application for leave to appeal and his summons seeking to adduce further evidence. Mr Thomas was ordered to pay HPM's costs of these applications. The Court also dismissed applications by Mr Hobson and Chandelle for extensions of time to seek leave to appeal, with costs.

Orders

Orders of the court

1. The summons filed on 28 March 2007 by the claimant in CA No 40822 of 2006 ("Mr Thomas") seeking leave to appeal from the decision of the primary Judge be dismissed. 2. Mr Thomas pay the costs of the opponent ("HPM") to application for leave to appeal referred to in Order 1. 3. Mr Thomas' summons filed on 1 October 2008, seeking an order that the Court receive further evidence, be dismissed. 4. Mr Thomas pay HPM's costs of the summons referred to in Order 3. 5. The amended summons filed on 24 October 2008 by the claimant in CA No 40220 of 2007 ("Mr Hobson"), seeking an order extending the time for the filing and serving of a summons seeking leave to appeal, be dismissed, with costs. 6.The summons filed on 13 April 2007 by the claimant in CA No 40221 of 2007, seeking an order extending the time for the filing and serving of a summons seeking leave to appeal, be dismissed, with costs.

Background

Background to the litigation

Mr Thomas requires leave to appeal because the judgment and orders of the District Court do not involve any claim or civil right amounting to or of the value of $100,000 or more: District Court Act 1973 (NSW), s 127(2)(c). This Court has heard full argument on the issues raised by the application for leave to appeal and by the appeal itself (should leave be granted).PROCEDURAL BACKGROUND The primary Judge heard three proceedings together. Each involved a claim by HPM against a participant in a scheme known as the Tumut River Orchard Project (“the Project”) set up by Tumut River Orchard Management Ltd (“TROM”). Each of the defendants had executed a Deed of Loan. Execution of a Deed of Loan was an element in the scheme and was the means by which Treetop Finance, an entity related to TROM, financed participants in the Project. The defendants in the proceedings were Mr Thomas, Chandelle Nominees Pty Ltd (“Chandelle”) and Adrian Hobson (“Mr Hobson”). They were sued for the amount said to be due and unpaid by each of them under the relevant Deed of Loan. The three defendants had common legal representation in the proceedings. HPM relied on a series of assignments of the debt due under the relevant Deed of Loan, as follows:(I) Treetop Finance to TROM (“First Assignment”);(ii) TROM to Treetop Project Ltd (“TPL”) (“Second Assignment”);(iii) TPL to Arnott-Smith Holdings Pty Ltd, later called Merilbah Pty Ltd (“Merilbah”) (“Third Assignment”); and(iv) Merilbah to HPM (“Fourth Assignment”). At the trial, the defendants challenged the existence of each of the debts alleged to be due under the relevant Deed of Loan. They also challenged the validity and efficacy of each of the assignments. The primary Judge found that the debts had been created and that, in the case of Mr Thomas, the successive assignments were valid and effective in equity. However, his Honour held that the debts of Chandelle and Mr Hobson, for reasons applicable only to them, had not been validly assigned to HPM. He therefore dismissed the actions against them. The primary Judge dealt with the question of costs at a hearing held on 8 December 2006. His Honour ordered that Mr Thomas pay half of HPM’s costs of the three proceedings, to be assessed on the ordinary basis. While two of the three defendants had succeeded in resisting HPM’s claims, they had common representation and, for the most part, had advanced identical arguments. The particular point on which Chandelle and Mr Hobson had succeeded had not occupied a great deal of hearing time. Mr Thomas filed his summons for leave to appeal on 28 March 2007, having previously filed a holding summons. On 8 February 2007, HPM filed holding summonses for leave to appeal against the decision dismissing its claims against Chandelle and Mr Hobson. However, on 28 March 2007, HPM discontinued its applications for leave to appeal against the decision. On 13 April 2007, Mr Thomas, Chandelle and Mr Hobson filed summonses seeking leave to appeal from the costs orders made by the primary Judge and seeking extensions of time for the filing of the summonses. Mr Thomas’ submissions, filed in support of his own application for leave to appeal, contend that this Court should order HPM to pay Mr Thomas’ costs of the appeal and of the proceedings at first instance.

Evidence

Evidence Before The Court

Clause 4 of the agreement constituted by TPL’s acceptance of the Second Assignment Offer does not alter this conclusion as it is merely a machinery provision. Clause 8(a), which concerns entitlement to interest and principle, does not detract from cl 3, since it is concerned only with the rights and duties of TROM and TPL as between themselves. It is not concerned with their rights as against third parties such as Mr Thomas.THE APPLICATION TO ADDUCE FURTHER EVIDENCE As I have noted, Mr Thomas’ application to adduce further evidence was made pursuant to s 75A of the Supreme Court Act 1970 (NSW). Subject to certain irrelevant exceptions, s 75A applies to an appeal to the Court and to an appeal in proceedings in the Court: s 75A(1). Section 75A(5) provides that an appeal to the Court of Appeal is by way of rehearing. The provisions most pertinent to the application are subsections (7) and (8) which provide as follows:“(7) The Court may receive further evidence.(8)Notwithstanding subsection (7), where the appeal is from a judgment after a trial hearing on the merits, the Court shall not receive further evidence except on special grounds”.Section 75A(9) states that s 75A(8) does not apply to evidence concerning matters occurring after trial or hearing. The application is apparently made on the basis that the evidence is to be adduced in support of Mr Thomas’ substantive appeal. The assumption underlying the application appears to be that this Court will grant leave to appeal and, at that point, should receive the proffered evidence pursuant to the power conferred by s 75A(7) of the Supreme Court Act. The evidence Mr Thomas wishes to adduce is in the form of an affidavit sworn by Mr Moody in separate proceedings brought by HPM against other participants in the Project. That affidavit does not appear to have been filed in the other proceedings which, the Court was told, have not yet been heard by the District Court. Nor is there anything to indicate that the affidavit was ever served on HPM’s solicitors (except in the context of the present application). There is therefore nothing to indicate that those solicitors became aware of the existence of Mr Moody’s affidavit during the trial in the present proceedings. In his affidavit, Mr Moody deposes that he was a director of TPL between May and July 1998. He says that until swearing his affidavit he had never seen the Second Assignment Offer and that he“certainly did not ever accept orally or otherwise the offer made therein, either by the date referred to in clause 2 of the document (namely 31 July 1998) nor at any other time.”Mr Moody also swears that the meeting of 10 July 1998, referred to in the minute signed by Mr Purcell recording Mr Moody’s presence never took place. According to Mr Moody, no meeting answering the description of the one in the minutes ever occurred. This affidavit directly contradicts the evidence of Mr Purcell which the primary Judge accepted. If Mr Moody’s evidence were to be accepted, HPM’s claim against Mr Thomas would fail since the Second Assignment Offer would not have been accepted by TPL and the Second Assignment would not have been validly effected. Mr Thomas’ debt could not have been validly assigned to HPM.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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