Wright v Corani - [2006] SASC 115

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
WRIGHT & ANOR v CORANI & ANOR
Judgment of The Full Court
(The Honourable Justice Sulan, The Honourable Justice Anderson and The Honourable Justice Layton)
24 April 2006
APPEAL AND NEW TRIAL - APPEAL GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - AFTER SATISFACTION OF JUDGMENT
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - EXTENSION OF TIME FOR APPEAL
APPEAL AND NEW TRIAL - APPEAL GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - WHERE INFERENCES OF FACT INVOLVED
CONVEYANCING - RELATIONSHIP OF VENDOR AND PURCHASER - MATTERS ARISING BETWEEN CONTRACT AND CONVEYANCE - DESCRIPTION, MISDESCRIPTION AND COMPENSATION FOR "ERROR OR MISDESCRIPTION" - ``ERROR OR MISDESCRIPTION'' - DEFICIENCY IN OR EXCESS OF AREA
RESTITUTION - OTHER MATTERS - RECOVERY OF MONEY PAID UNDER JUDGMENT OR ORDER
Application for leave to appeal out of time - appeal against decision of Judge of the District Court - decision which the appellants seek to challenge has already been the subject of a successful appeal to this Court - appellants were not joined as respondents in the appeal to the Full Court - appellants paid money into court following the District Court judgment - monies paid out to respondents before decision of the Full Court but after District Court judgment - Full Court did not know that the money had been paid out of Suitors Fund - whether District Court judgment still binding against appellants - whether there is a prejudice caused to parties in granting an extension of time - merits of the appeal - whether misrepresentation resulted in any loss - what was the true value of the land - effect of valuation evidence - whether evidence of underbid relevant - principle of restitution in full - Held: leave granted to appeal out of time - appeal allowed - amount paid for land at auction was the true value of the land, despite the misdescription, - reasons of previous Full Court adopted - money to be repaid to the appellants with interest.
Trade Practices Act 1974 s52, 82; Fair Trading Act 1987 s56, 84; Misrepresentation Act 1972 s7; Supreme Court Rules 1987 r3.04(d), 95.16, referred to.
The Commonwealth of Australia v McCormack (1984) 155 CLR 273; Basheer & DeConno Pty Ltd v Corani & Anor (2005) 92 SASR 468; Gallo v Dawson (1990) ALR 479, applied.
Modra v Police [2006] SASC 52; Warren v Coombes (1979) 142 CLR 531; Devries & Anor v Australian National Railways Commission & Anor (1993) 177 CLR 742; State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306; Fox v Percy (2003) 214 CLR 118, discussed.
Jackamarra v Krakour (1998) 195 CLR 516, considered.

WRIGHT & ANOR v CORANI & ANOR
[2006] SASC 115
Full Court: Sulan, Anderson & Layton JJ
THE COURT
Introduction

This is an appeal against a decision of a Judge of the District Court. The appeal was filed out of time and therefore this Court must first consider the preliminary issue of whether an extension of time should be granted in all the circumstances.
The history of this matter is unusual in that the decision, which the appellants seek to challenge, has already been the subject of a successful appeal in this Court. The appellants in this appeal were the first and second defendants at trial. The appellant in the previous Full Court appeal was the third defendant and the plaintiffs at trial were respondents in both appeals. The main issue for this Court to consider is whether the judgment of the District Court awarding damages to the plaintiffs against all three defendants, is still binding against the first and second defendants, who had paid money into court which was later paid to the plaintiffs. Unlike the third defendant, they were not heard on the Full Court appeal which overturned the District Court decision. This will require an assessment of any prejudice caused to the parties in granting an extension of time and ultimately the merits of the appeal.
The District Court Action
The appellants, William Harold Wright and Glenys Margaret Wright (“the vendors”) were first and second defendants in a District Court action. Judgment was delivered on 5 November 2004. In that action, Guiseppe Corani and Jean Marie Corani (“the purchasers”) sued the vendors together with the third defendant Basheer & DeConno Pty Ltd (“the agent”) for damages under s 82 of the Trade Practices Act 1974 (Cth) for breach of s 52 of the said Act; for damages under s 84 of the Fair Trading Act 1987 for breach of s 56 of the said Act; compensation for “error, omission or misdescription of the land” pursuant to Clause 5.4 of the contract; damages for negligent misrepresentation and damages pursuant to s 7 of the Misrepresentation Act 1972 , in relation to the sale of land at 43 and 45 North East Road, Collinswood. The land contained building improvements.
In a brochure prepared by it, the agent had represented that the area of the land for sale by auction was approximately 2,469 sqm whereas the correct area was 2,300 sqm. It was alleged that the misrepresentation as to the size of the land caused the purchasers financial loss.
Following a public auction where the purchasers were the successful bidders, they entered into a contract to purchase the land for the sum of $513,000. The purchasers were successful in the District Court action and were awarded damages in the sum of $29,204. The trial Judge accepted valuation evidence that the land and improvements were worth less than the amount actually paid by the purchasers because of the misrepresentation as to the size of the land. It was effectively an arithmetical calculation based on a value per square metre multiplied by 169. The calculation of the difference in value was $27,885 and to that was added the amount of $1,319 which represented the excess fees paid making up a total of $29,204. Interest of $8,220 was also awarded by the trial Judge.
The Full Court Appeal
The full details of the appeal are contained in Basheer & DeConno Pty Ltd v Corani & Anor (2005) 92 SASR 468. The Full Court allowed the appeal and found that the purchasers had in fact suffered no loss because the price paid by the purchasers equalled the true market value of the land as determined by the auction process. The Full Court considered whether the valuer who gave evidence in the trial had, when cross-examined, abdicated his earlier views. The trial Judge found that he had not abdicated his views. The Full Court decided that the valuer had made relevant and significant concessions in cross-examination and that the trial Judge was in error in finding that he had not abdicated his views.
The Full Court held, in paras [32] – [44] that apart from the question of the valuation evidence, the evidence of a genuine underbid of $512,000 was also relevant in determining the market value of the land.
The Parties and Their Correspondence
The vendors, although named as respondents to the appeal in the Full Court when the appeal was initiated, did not appear at the hearing in the Full Court, and by that time, had been removed as parties. There is considerable uncertainty as to how and why, and in what circumstances this took place.
When the notice of appeal was filed on 19 November 2003 by Rowell Forrest & Co on behalf of Basheer & DeConno Pty Ltd, William Harold Wright and Glenys Margaret Wright (“the vendors”) were joined as respondents with the Coranis (“the purchasers”). On 18 January 2005 Jamison & Associates, solicitors for the appellants in this matter, wrote to Treloar & Treloar, solicitors for the respondents, stating that, “Notwithstanding that we have not filed an Appeal, our clients are still parties to the action and bound by the Full Court’s decision”.
However, on 11 March 2005 an amended notice of appeal was filed on behalf of the agent which no longer included the vendors as respondents. There is no explanation of the facts prompting the removal of the vendors. It is likely that the vendors were not fully aware that they were actually joint respondents in the appeal to the Full Court, thus their letter on 18 January 2005. It appears that some time before 11 March 2005, Basheer & DeConno decided to file an amended notice of appeal which was no longer to include the vendors as respondents. Neither the letters produced to us on this appeal, the trial file from the first appeal to the Full Court, nor Counsel’s submissions have been able to shed any light on the surrounding circumstances.
Following the decision in the District Court, there was an exchange of correspondence between the solicitors for the purchasers and the solicitors for the vendors. On 13 January 2005 the solicitors for the purchasers noted in their letter to the solicitors for the vendors that the vendors had not appealed and they requested payment of the judgment sum of $37,424 plus interest from the date of judgment. The response to this letter was that even though the vendors had not filed an appeal, they accepted that they were nevertheless still parties to the action and bound by the Full Court’s decision, and that therefore, they considered, as earlier indicated, it would be appropriate to pay the money into court and not to the purchasers’ solicitors directly. They were concerned, unnecessarily it would seem, that such a payment to Treloar & Treloar may amount to a contempt of court.
The response to that letter dated 2 February 2005, was a reference by the purchasers’ solicitors to Rule 95.16 of the Supreme Court Rules 1987 with a reminder that an appeal did not operate as a stay of judgment. The demand for payment of the judgment amount was repeated as well as a threat that unless the sum was paid, enforcement proceedings would be commenced.
On 8 February 2005 the solicitors for the vendors wrote to the solicitors for the purchasers and said:
In view of your intention to press for payment, I will advise my clients to pay the money into court to abide any subsequent order.
The response to that from the solicitors for the purchasers was:
We put you on notice that if monies are paid into court, our clients will make an application to the court for the payment of monies to them. In view of the fact that there is no stay of judgment, we think there is no reason preventing our clients from recovering monies from your clients.
On 16 February 2005, the solicitors for the vendors advised that their client would pay the money into the Supreme Court Trust Account. They indicated that once the funds were in the Supreme Court Trust Account the purchasers would be at liberty to apply (emphasis added) for the funds to be released to their client. They repeated that if the funds were released then “we would not think that our client could be seen as having acted in contempt.” That advice was followed up by a further communication, dated 8 March 2005 from the vendors’ solicitors, advising that in fact the sum of $35,733 had been paid into the Supreme Court Trust Account in satisfaction of the orders made in the District Court. The letter went on to state that:
In due course, you can advise us of your additional interest and legal fees and disbursements so that we can finalise this matter.
Events Between Judgment and Appeal
We were informed by counsel during this appeal, that on 15 July 2005, following an ex parte application by the solicitors for the purchasers, the money was paid out of the Supreme Court by order of a Master, to the solicitors for the purchasers. That money was then disbursed from the solicitor’s trust account within a few days and sent to the purchasers.
The hearing of the Full Court appeal in Basheer & DeConno Pty Ltd v Corani & Anor took place on 6 May 2005. Judgment in that matter was given on 3 August 2005. The payment out following the ex parte application therefore took place after the Full Court had heard the argument on the appeal but prior to the Full Court delivering judgment. It is uncertain what documents were before the Court, on the ex parte application, other than those contained on the court file. These documents shed little light on whether the Master knew of the nature of the ongoing correspondence between the solicitors for the purchasers and the solicitors for the vendors.
At this point in time the amended notice of appeal had been filed and the vendors were therefore no longer parties to the appeal. However, the court file indicates that there was “no appearance” for the vendors, but that Mr Roder appeared for the purchasers. This indicates a certain amount of confusion as to who remained as parties when the application was made and which parties were aware that such an application was being made. In our opinion, it is unlikely that such an order would have been made if the Master had been aware of the surrounding circumstances.
Request by Vendors for Repayment
Following the delivery of judgment by the Full Court, the solicitors for the vendors wrote on 8 August 2005 to the solicitors for the purchasers indicating that following the judgment of the Full Court, they had instructions to apply for the refund of the monies that they had paid into the Supreme Court. They also sought interest on those monies. It is obvious that they were not aware that the monies had already been disbursed following the ex parte application. They indicated at that time that they would not apply for an order for costs in respect of the proceedings in the District Court, provided there was no opposition by the purchasers to the refund of the monies paid by them into court.
That letter was responded to on 22 August 2005. It pointed out that the vendors had not appealed against the order of the District Court and that therefore, there was still a judgment in the District Court standing against them with respect to the judgment sum and costs. The solicitors for the purchasers indicated that they intended to enforce that judgment with respect to costs. They also referred to a comment made by Bleby J following the delivery of judgment by the Full Court. Justice Bleby said:
Before making any formal orders, there was an appeal by only one of the defendants. I take it, in the absence of any arrangement between the parties, the judgment will remain against Mr and Mrs Wright?
The solicitors for the purchasers made the point that counsel was present when judgment was delivered and had assented to that proposition, but of course the vendors were not represented at that time and had no knowledge that the monies had been paid out of court. An order had been sealed in the District Court on 22 December 2004 confirming the judgment in the District Court against the vendors.
At the time judgment was delivered by the Full Court, and when Bleby J made the comment set out above, the Full Court was not advised by counsel for the purchasers either about the payment into court or the subsequent ex parte application which resulted in the release of those monies from court. No doubt if those matters had been raised there would have been discussion and argument, with the likely subsequent attendance of someone representing the vendors. It is highly unlikely that the comments made by Bleby J would have been made had the court been informed of what had occurred. Notwithstanding that the court was not fully informed, the solicitors for the purchasers then proceeded to use the comments of Bleby J as a focus for their letter of 22 August 2005 to the vendors’ solicitors.
It is necessary to recall that at that point of time the solicitors for the purchasers were saying that they were going to enforce the judgment in the District Court against the vendors notwithstanding that the Full Court had indicated that the judgment of the District Court was wrong in that the purchasers had sustained no loss. Further, at that time, the purchasers were holding some $35,000 to which their entitlement was dubious at best and which they had obtained on an ex parte application without full disclosure to the Court of all the background facts. If they had any possible entitlement, it was from the fact that the vendors were not parties to the appeal. This situation arose because neither the solicitors for the vendors nor the Court were informed of all the material facts. There was still in existence a judgment in the District Court in favour of the purchasers against the vendors and the purchasers relied upon it to support their application for payment of the monies to them.
Leave to Appeal Out of Time
It is against this background therefore that the vendors seek leave to appeal out of time. In the District Court the vendors’ liability arose solely because they were vicariously liable for the agent. Specifically the District Court Judge found that there was no independent liability on the vendors, and indeed that the vendors had not been part of the preparation of the relevant brochure. In those circumstances therefore the appellants argue that it was reasonable for them to assume that following the decision of the Full Court in August 2005 that there would be no judgment enforced against them. To make that assumption may have been misguided or somewhat careless, but having regard to the basis on which the agent’s liability was determined, not unreasonable. The vendors say that they had limited financial means and took the attitude that it was unnecessary for them to be involved in the appeal. As reflected in their correspondence, they were prepared to abide the decision of the Full Court. Whether in retrospect that was a wise position to take is beside the point. We believe that it was reasonable for the vendors to assume that if the agent ultimately was successful in its appeal, it would follow that the vendors should also have the benefit of that outcome and that any monies which they had paid out on the basis of any previous liability would be refunded to them.
Counsel for the appellants relied on the authority Gallo v Dawson (1990) 93 ALR 479. In that case, the applicant applied for an extension of time 16 months out of time. Justice McHugh held that, pursuant to the relevant High Court Rules, the discretion to extend time for leave applications “is given for the sole purpose of enabling the court to do justice between parties.”
At p 180 McHugh J went on to state that:
In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time… It is always necessary to consider the prospects of the applicant succeeding in the appeal.
The South Australian Supreme Court Rules contain a similar provision in rule 3.04(d) as the one relied on by the applicant in this case.
The respondents relied on Jackamarra v Krakouer (1998) 195 CLR 516. That decision was discussed in Modra v Police [2006] SASC 52, by Besanko J at [32] as follows:
The principles which govern an application for an extension of time have been discussed in a number of cases. It is sufficient to refer to Jackamarra v Krakouer (1998) 195 CLR 516; Gikas v Police (1999) 202 LSJS 301. In Gikas v Police (above) Lander J said (at 306):
In summary, any application for an extension of time within which to appeal must be supported by an explanation for the failure to comply with the time limits prescribed by the statute of any Rules of Court regulating the time limit. When the delay is very short and there is no obvious prejudice to any party the explanation need not be in great detail. Where the delay is lengthy or prejudice may be suffered by some other party then there is an obligation on the party seeking the extension of time to give a detailed explanation for the party’s failure to comply with the prescribed time limit. When a party is not able to proffer a satisfactory explanation for failing to observe a time limit, or where another party might suffer prejudice by reason of the delay, an extension of time will only be granted if the party seeking the extension of time can point to the real possibility that a miscarriage of justice might occur by the failure to extend time.

In this case, it is our view that the correspondence tendered in court shows a basis for the appellants misunderstanding which in turn led them to believe that they need not appeal the decision of the trial Judge.
Prejudice
We must consider the question of prejudice to the purchasers. The prejudice asserted by the purchasers is that they may well have sought leave to appeal to the High Court from the decision of the Full Court and that they are now out of time in that respect. As against that, the vendors argue that they have paid out a sum of money which, on the basis of the Full Court decision, they are entitled to recover. If they are not given leave out of time then they have no ability in this action to seek the return of the money. It is our view that the prejudice to the vendors so far outweighs any potential prejudice to the purchasers, that the appeal should be allowed out of time. If as a result of this appeal the purchasers wish to apply for Special Leave to appeal to the High Court, they can still do so. Any time limit will only run from the time of publication of this judgment. The purchasers argue that they are prejudiced in that respect because it makes its target the vendors whereas, had it appealed at an earlier point of time from the earlier decision of the Full Court, it would have had the agent as its ultimate target. It may therefore be prejudiced in costs. We reject this argument on a practical basis, namely that, all parties would no doubt seek to be represented in any application for Special Leave. It is highly unlikely in the circumstances of this case that all parties would not be heard in any subsequent appeal, if Special Leave was granted.
We have considered the injustice which would be done to the vendors if the District Court judgment was to stand, and we have balanced that against the arguments put by the purchasers. It is our view that the misunderstanding evidenced in the correspondence between the parties and the apparent uncertainty surrounding the ex parte application, are good reasons why, if an extension of time was not granted, a miscarriage of justice would be the likely result.
The Merits on this Appeal
Ms Nelson QC for the appellants relied entirely upon the judgment of the Full Court already referred to. She relied on that decision for the purpose of showing that she had a strong arguable case which was also relevant to the question of granting leave to appeal out of time. She also relied upon that judgment for her submission that the appeal, if allowed out of time, should also be allowed on its merits, for the same reasons as expressed by the Full Court in Basheer & DeConno Pty Ltd v Corani & Anor.
For the respondents, Mr Quick QC argued that there were apparent errors in the decision of the Full Court. These suggested errors essentially related to the assessment by the Full Court of the valuation evidence called in the trial. It was argued that the Full Court was wrong in that it failed to follow a principle of declining to interfere with a trial Judge’s assessment of the evidence and then substituted its own view in interpreting the evidence of the valuer.
The principles which govern the approach of an appellate court to interfering with findings by a trial Judge were discussed in Warren v Coombes (1979) 142 CLR 531 by Kirby J at 551. His Honour said:
Shortly expressed, the established principles are, we think, that in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it.
This principle was further considered in Devries & Anor v Australian National Railways Commission & Anor (1993) 177 CLR 742 per Deane and Dawson JJ at p 479 and 480 where it was stated:
An appellate court which is entrusted with jurisdiction to entertain an appeal by way of rehearing from the decision of a trial judge on a question of fact must set aside a challenged finding of fact which is shown to be wrong…..The appellate court will be guided by the impression made on the judge who saw the witnesses, but there may be other circumstances which show whether or not a statement is credible and they may warrant the court in differing from the judge’s finding based on the credibility of witnesses.
An example of this principle was in State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306 where Gaudron, Gummow & Hayne JJ said at [63]-[64]:
It is true that the trial judge, in determining whether to accept the evidence of Mrs Page, was heavily swayed by his impression of her while giving oral evidence. However, this circumstances does not preclude a court of appeal from concluding that, in light of other evidence, a primary judge had to fragile a base to support a finding that a witness was unreliable. The documentary evidence in this case … provides significant support to the allegations made by Mrs Page.
As Kirby J and Callinan J point out in their reasons for judgment, these were matters to which weight was not given either by the trial judge or the Court of Appeal. The substance of the matter is that there has not yet been a determination of the SRA’s case upon a consideration of the real strength of the body of evidence is presented.
In Fox v Percy (2003) 214 CLR 118 at 217 [26], the High Court confirmed its earlier statement in Warren v Coombes (1979) 142 CLR 531.
We have read the evidence of the valuer, and in particular having regard to the concessions made by the valuer in cross-examination, we agree with the Full Court in Basheer & DeConno Pty Ltd v Corani & Anor. We agree that it was appropriate for that Court to interfere due to the error made by the trial Judge. It was not a question of credit and it was in our view an error by the Judge to accept that evidence as he did. It was appropriate for the Full Court to interfere in those circumstances.
We also agree with the reasons of the Full Court in relation to the use of the underbid in determining the market value of the property for the reasons expressed by the Court in paras [32] to [44] inclusive.
Therefore, in relation to the vendors’ appeal, which we have now allowed out of time, we would allow the appeal on the merits for the same reasons as published in the Basheer & DeConno Pty Ltd v Corani & Anor decision.
The Money Paid Out to the Purchasers
That leaves the question of the money which has been paid out of court to the purchasers. They were unsuccessful in the earlier Full Court matter and now in this appeal.
This case is similar to the case of The Commonwealth v McCormack (1984) 155 CLR 273. In that case the High Court re-affirmed the proposition that an appellant who has satisfied a judgment for the payment of money is entitled on reversal of the judgment to repayment together with interest on the principle of restitution in full.
It is our view that that money should be repaid by the purchasers, with interest calculated from the time that the money was disbursed from the Supreme Court and that there should be an adjustment made in relation to any interest earned on that money between the time it was initially deposited into the Supreme Court by the vendors and the time when it was taken out by the purchasers. We will hear the parties as to the appropriate orders.