Witherspoon v Hutson - [2015] QCA 109

SUPREME COURT OF QUEENSLAND

CITATION:

Witherspoon & Anor v Hutson & Ors [2015] QCA 109

PARTIES:

JOHN CLIVE WITHERSPOON
(first appellant)
SALLY-ANNE WITHERSPOON
(second appellant)
v
ROBERT WILLIAM HUTSON
(first respondent)
ROBERT WILLIAM BUCKBY
(second respondent)
MARK FRANCIS XAVIER MENTHA
(third respondent)

FILE NO/S:

Appeal No 10501 of 2014
SC No 9450 of 2014

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane – Unreported, 29 October 2014

DELIVERED ON:

19 June 2015

DELIVERED AT:

Brisbane

HEARING DATE:

30 April 2015

JUDGES:

Margaret McMurdo P and Gotterson JA and Flanagan J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

1. Appeal dismissed.

2. The first and second appellants pay the first, second and third respondents’ costs of the appeal.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL - GENERAL PRINCIPLES – POINTS AND OBJECTIONS NOT TAKEN BELOW – QUESTIONS NOT RAISED ON PLEADINGS OR IN ARGUMENT – GENERALLY – where the appellants held a number of finance facilities with a bank – where the bank appointed receivers purportedly on the basis of non-payment of interest and deregistration of the guarantor company – where the respondent receivers applied for the appellants to deliver up possession of properties and stock pursuant to the relevant financial documentation – where the failure to pay interest was not disputed before the trial judge – where the appellants seek to argue a factual dispute, for the first time, on appeal, as to the payment of interest – whether the appellants ought to be permitted to dispute the alleged non-payment of interest on appeal notwithstanding the effectual concession at first instance

APPEAL AND NEW TRIAL – INTERFERENCE WITH DISCRETION OF COURT BELOW – WRONG PRINCIPLE – PARTICULAR CASES – REFUSAL OF ADJOURNMENT – where the appellants submit that the trial judge wrongly refused an oral application for an adjournment on the day of the respondents’ application – where the appellants applied for an adjournment of the application – whether the trial judge wrongly exercised his discretion in refusing any application for an adjournment

APPEAL AND NEW TRIAL – INTERFERENCE WITH DISCRETION OF COURT BELOW – OTHER MATTERS – where the appellants held a number of finance facilities with a bank – where the bank appointed receivers purportedly on the basis of non-payment of interest and deregistration of the guarantor company – where the respondent receivers applied for the appellants to deliver up possession of properties and stock pursuant to the relevant financial documentation – where the appellants applied for an interim injunction of the respondents’ application pending the determination of a separate, related action brought by the appellants and for consolidation of the proceedings – where the appellants argue that interest payments on a number of financial facilities occurred through the debiting of an overdraft facility – where the appellants argue that deregistration of the guarantor company was not an act of default, was not relied on by the bank to appoint…

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: [2015] QCA 109
Decision Date: 19 June 2015

CaseChat Overview and Summary

The appeal in Witherspoon v Hutson concerns a dispute between the appellants, who held various finance facilities with a bank, and the respondent receivers, who were appointed by the bank. The primary issue at hand was whether the trial judge erred in dismissing the appellants' application for an interim injunction and ordering them to deliver up possession of properties and stock. The appellants argued that interest payments were made via an overdraft facility, that the deregistration of the guarantor company was not a default, and that the receivers were not validly appointed. Additionally, the appellants contended that the trial judge wrongly refused an adjournment application and that the deregistration could be remedied.

The court found that the appellants were not permitted to argue on appeal a factual dispute regarding the payment of interest, which they had effectively conceded at first instance. The court further held that no error in the exercise of the trial judge's discretion was identified in the refusal of an adjournment. The court found that the deregistration of the guarantor company was an event of default, and the receivers were validly appointed under the relevant financial documentation. The court held that the deregistration was not the basis for the appointment of receivers, and that relief against forfeiture was not available in the circumstances presented.

In summary, the appeal was dismissed, and the appellants were ordered to pay the respondents' costs of the appeal. The court's reasoning centred on the appellants' failure to raise certain arguments at the appropriate time and the validity of the receivers' appointment. The decision underscores the importance of presenting evidence in support of submissions and the need to adhere to the principles of procedural fairness.

Orders

Orders of the court

1. Appeal dismissed.

2. The first and second appellants pay the first, second and third respondents’ costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

I accept the respondents’ submission that even if the appellants are to be taken as having applied for an adjournment to obtain more evidence to defend the respondents’ application, no error in the exercise of his Honour’s discretion is identified.[77] The originating application having been adjourned once, it was incumbent on the appellants to present evidence in support of any submission that there was a causal connection between the Bank’s conduct and the default in payment of interest. As already discussed above, his Honour correctly found that there was no reasonable factual basis for such a causal connection.[77]Respondents’ outline of submissions dated 5 January 2015, [48].Deregistration of JC & SA Pty Ltd There was uncontested evidence before his Honour that JC & SA Pty Ltd was deregistered on 1 October 2014, one day before the appointment of the respondents.[78] Neither the notice of demand,[79] nor the covering letter dated 3 September 2015[80] nor the Deed of Appointment of Receivers and Managers dated 2 October 2014[81] identified either the deregistration of JC & SA Pty Ltd or the default in the payment of interest as a specific event of default. These documents in fact did not identify any specific event of default. The language used was general, for example, “the borrower is in default of the facilities” or “by reason of events which have happened, and by virtue of the powers contained in the security, the Bank is entitled to appoint receivers and/or managers of the property …”.[78]Affidavit of Sally-Anne Witherspoon affirmed 27 October 2014, [16]; appeal record book, 342; exhibit JS-11 to the affidavit of Joseph John Saba Shaw sworn 28 October 2014; appeal record book, 1498.[79]Exhibit TC-8 to the affidavit of Timothy John Collins sworn 3 October 2014; appeal record book, 236-237.[80]Exhibit TC-8 to the affidavit of Timothy John Collins sworn 3 October 2014; appeal record book, 234-235.[81]Exhibit TC-12 to the affidavit of Timothy John Collins sworn 3 October 2014; appeal record book, 247-257. There was no contractual obligation on the part of the Bank to specify any particular event of default, nor was there any other legal obligation to do so. As observed by McPherson J (as his Honour then was) in Minion v Graystone Pty Ltd:[82]“… the action taken must be capable of being justified at law, but that the grounds of justification, although they must have existed, need not have been known or relied upon at the time the action was taken.”[82][1990] 1 Qd R 157, 164. Applying that principle to the notice of default, it matters not whether the deregistration of the company or the default in payment of interest was specified as an event of default. If these matters constituted a relevant event of default under the securities entitling the Bank to appoint the respondents as receivers and manager, then the existence of such a power is sufficient. Whilst senior counsel for the appellants faintly submitted, by reference to clause 16.1(k) of the Business General Terms for Business Lending,[83] that the deregistration was not an event of default, an examination of these terms and the security documents show that deregistration is an event of default. Clause 16.1 of the Business General Terms provide, in clause 16.1(v), that an event of default occurs, whether or not it is in the appellants’ power to prevent it, if an event specified as an “event of default” in the facility terms or the facility documents occurs.[84] By clause 1.1, “facility documents” comprise, inter alia, the security documents. The consequence of such an event of default is that the Bank may exercise its rights under any security.[85][83]Exhibit TC-2 to the affidavit of Timothy John Collins sworn 3 October 2014; appeal record book, 87-129.[84]Exhibit TC-12 to the affidavit of Timothy John Collins sworn 3 October 2014; appeal record book, 110.[85]Exhibit TC-2 to the affidavit of Timothy John Collins sworn 3 October 2014, 16.2(h); appeal record book, 111.

CITATION:	Witherspoon & Anor v Hutson & Ors [2015] QCA 109
PARTIES:	JOHN CLIVE WITHERSPOON (first appellant) SALLY-ANNE WITHERSPOON (second appellant) v ROBERT WILLIAM HUTSON (first respondent) ROBERT WILLIAM BUCKBY (second respondent) MARK FRANCIS XAVIER MENTHA (third respondent)
FILE NO/S:	Appeal No 10501 of 2014 SC No 9450 of 2014
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane – Unreported, 29 October 2014
DELIVERED ON:	19 June 2015
DELIVERED AT:	Brisbane
HEARING DATE:	30 April 2015
JUDGES:	Margaret McMurdo P and Gotterson JA and Flanagan J Separate reasons for judgment of each member of the Court, each concurring as to the orders made
ORDERS:	1. Appeal dismissed. 2. The first and second appellants pay the first, second and third respondents’ costs of the appeal.
CATCHWORDS:	APPEAL AND NEW TRIAL – APPEAL - GENERAL PRINCIPLES – POINTS AND OBJECTIONS NOT TAKEN BELOW – QUESTIONS NOT RAISED ON PLEADINGS OR IN ARGUMENT – GENERALLY – where the appellants held a number of finance facilities with a bank – where the bank appointed receivers purportedly on the basis of non-payment of interest and deregistration of the guarantor company – where the respondent receivers applied for the appellants to deliver up possession of properties and stock pursuant to the relevant financial documentation – where the failure to pay interest was not disputed before the trial judge – where the appellants seek to argue a factual dispute, for the first time, on appeal, as to the payment of interest – whether the appellants ought to be permitted to dispute the alleged non-payment of interest on appeal notwithstanding the effectual concession at first instance APPEAL AND NEW TRIAL – INTERFERENCE WITH DISCRETION OF COURT BELOW – WRONG PRINCIPLE – PARTICULAR CASES – REFUSAL OF ADJOURNMENT – where the appellants submit that the trial judge wrongly refused an oral application for an adjournment on the day of the respondents’ application – where the appellants applied for an adjournment of the application – whether the trial judge wrongly exercised his discretion in refusing any application for an adjournment APPEAL AND NEW TRIAL – INTERFERENCE WITH DISCRETION OF COURT BELOW – OTHER MATTERS – where the appellants held a number of finance facilities with a bank – where the bank appointed receivers purportedly on the basis of non-payment of interest and deregistration of the guarantor company – where the respondent receivers applied for the appellants to deliver up possession of properties and stock pursuant to the relevant financial documentation – where the appellants applied for an interim injunction of the respondents’ application pending the determination of a separate, related action brought by the appellants and for consolidation of the proceedings – where the appellants argue that interest payments on a number of financial facilities occurred through the debiting of an overdraft facility – where the appellants argue that deregistration of the guarantor company was not an act of default, was not relied on by the bank to appoint…