FEDERAL COURT OF AUSTRALIA

Wilson v Official Trustee in Bankruptcy [2000] FCA 304

PROCEDURE – Leave to appeal – final or interlocutory judgment – principles governing leave to appeal – whether denial of natural justice by primary judge – evidence of witness not adequately adverted to before the primary judge – principles governing admission of fresh evidence – evidence of witness not “fresh evidence” – evidence of witness not highly likely to have produced opposite result.

Williams v Official Trustee in Bankruptcy (1994) 122 ALR 585cited

Wilson v Commonwealth [1999] FCA 1308 cited

Brouwer v Titan Corporation Ltd (1997) 73 FCR 241 cited

Council of the City of Greater Wollongong v Cowan (1954) 93 CLR 435 cited

CDJ v VAJ (1998) 157 ALR 686 considered

ERNEST ARTHUR WILSON and PATRICIA LORRAINE WILLIAMS & ANOR v OFFICIAL TRUSTEE IN BANKRUPTCY & ANOR

N 1256 of 1999

N 1257 of 1999

FINN, MARSHALL AND GOLDBERG JJ

20 MARCH 2000

SYDNEY

ON APPEAL FROM A SINGLE JUDGE OF

THE FEDERAL COURT OF AUSTRALIA

IN THE MATTER OF Ernest Arthur Wilson and Patricia Lorraine Williams

THE COURT ORDERS THAT:

1.                  The application for leave to appeal is dismissed.

2.         The appellants/applicants pay the respondents’ costs of the application.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

ON APPEAL FROM A SINGLE JUDGE OF

THE FEDERAL COURT OF AUSTRALIA

IN THE MATTER OF Ernest Arthur Wilson and Patricia Lorraine Williams

REASONS FOR JUDGMENT

Introduction

1                     The appellants, by notice of appeal, filed 2 November 1999, seek to appeal from an order of the primary judge on 14 October 1999 dismissing the appellants’ notice of motion filed 6 October 1999 which sought orders that an order of Sweeney J on 10 December 1992 be set aside and that the first respondent, the Official Trustee in Bankruptcy (“the Trustee”), be restrained from disposing or dealing with certain assets of the appellants. 

2                     The first appellant, Ernest Arthur Wilson (“Mr Wilson”) died on 15 January 2000 and probate of his will was granted to the second appellant, Patricia Lorraine Williams (“Ms Williams”) on 28 February 2000.  At the hearing, leave was granted to Ms Williams pursuant to O 6 r10 of the Federal Court Rules to be added as an appellant in her capacity as executrix of the will of Mr Wilson.  Although the heading on the court documents describes the late Mr Wilson and Ms Williams as “Appellants” they are more appropriately described as applicants because, for reasons to which we refer, an appeal does not lie as of right from the decision of the primary judge.  Leave to appeal is required as his Honour’s order was interlocutory rather than final.  The parties were content to have the application treated as the hearing of the appeal, if the Court was disposed to grant leave, and we have proceeded on the basis of treating the parties’ submissions as the submissions to be made on the appeal if leave to appeal is granted. 

3                     The motion before the primary judge was the most recent of a number of applications made to the Court over the years in relation to events which commenced in 1979.  It is necessary to rehearse those events in a little detail in order to put the present application in context.  The facts to which we refer are taken partly from his Honour’s judgment, partly from evidence before his Honour and partly from previous decisions of the Court in proceedings between the same parties.

Background

4                     On 7 March 1975 Welona Pty Ltd (then known as R Bowen (Properties) Pty Ltd) (“Welona”) granted to Donald Wiggins a lease of the Gardiners Inn Hotel at Blackheath, New South Wales (“the hotel”) for a term of five years.  On 6 April 1979 the applicants purchased the balance of the term of the lease from Mr Wiggins.  They went into possession of the hotel on 29 July 1979 and, after a dispute with Welona was settled, Welona granted a new lease of the hotel to the applicants for a term of five years commencing on 29 January 1980 and terminating on 28 January 1985.  The lease was dated 17 July 1980.  The lease contained a covenant on the part of the applicants that they would keep the hotel in good and substantial repair during the term of the lease.  The applicants vacated the hotel on the expiration of the lease.  A dispute arose between the parties as to the state of the repair of the hotel and who was obliged to repair the hotel.  Welona contended that the hotel was in a reasonable state of repair at the commencement of the lease and that it fell into a state of serious disrepair thereafter with the result that the applicants were in breach of the covenant to keep the hotel in good and substantial repair.  The applicants contended that the hotel was in a very bad state of repair when they went into occupation of the hotel and that there was either a collateral agreement or a collateral term of the lease which obliged Welona to put the hotel in repair.  Eventually Welona carried out substantial repairs to the hotel and incurred substantial costs and expenses in that respect. 

5                     A sequestration order was made against the estate of Mr Wilson on 23 April 1986 and against the estate of Ms Williams on 17 February 1986.  In each case the Official Receiver on behalf of the Official Trustee is the trustee of the estate of each bankrupt.

6                     On 10 August 1988 Welona lodged a proof of debt against each of the estates in the sum of $151,756.57 in respect of the costs of the repairs to the hotel.  On 28 March 1991 the Trustee rejected certain items to the extent of $55,162.18, and admitted the proofs of debt in the amount of $96,594.39. 

7                     On 12 April 1991 each of the applicants filed an application in the Court seeking an order that Welona’s proofs of debt against their respective estates be disallowed further in significant respects.  On 24 February 1992 Welona filed an application in respect of each of its proofs of debt seeking orders that the decision of the Trustee partially rejecting the proofs of debt be reviewed and varied so as to allow the proofs of debt in full.

8                     The applications were heard by Sweeney J in early October 1992.  The applicants contended that the lease was subject to a collateral agreement, or that the lease contained a collateral term, that the hotel would be put into a proper state of repair by Welona prior to the commencement of the tenancy or early in the tenancy.  A critical issue in the proceedings before Sweeney J was the state of repair of the hotel at the commencement of the lease in 1980.  Sweeney J delivered his reasons for judgment on 10 December 1992.  His Honour accepted Welona’s evidence as to the state of repair of the hotel rather than the evidence of the applicants.  Sweeney J placed reliance on the evidence of Mr Bell, a chartered architect, whose reports had been obtained on the initiative of the Trustee but paid for by Welona.  Mr Bell, in preparing his reports, relied on two earlier reports relating to the hotel prepared by Mr Benson, a builder and contractor retained by Welona.  Those reports were based on inspections of the hotel held on 12 May 1983 and 28 January 1985. 

9                     The result of his Honour’s judgment was that, leaving aside orders made by consent, a sum of $132,722.97 was allowed to Welona in respect of the cost of repairs carried out by it.  Ultimately, orders were made allowing Welona’s proofs of debt in the total amount of $145,534.45.

10                  The applicants appealed to the Full Court, the appeal was heard on 30 September 1993 and the Full Court reserved its decision.  However, before judgment could be delivered the applicants filed a notice of motion dated 8 February 1994 seeking orders that they be granted leave to lead further evidence.  The notice of motion was supported by a number of affidavits which set out the nature of the further evidence.  It related to twenty‑six photographs which the applicants contended were taken in 1980 and which showed the run‑down condition of the hotel at the time of the commencement of the lease in January 1980.  The applicants claimed that if the photographs had been available at the hearing before Sweeney J they would have corroborated their evidence as to the state of repair of the hotel at the time of the commencement of the lease.  The applicants claimed that the photographs were not available at the time of the hearing because they had been mislaid by the Trustee and that they had only been discovered in the Court file in an envelope (which contained an exhibit in the proceeding before Sweeney J being a single photograph) the day prior to the hearing of the appeal. 

11                  The Full Court analysed the evidence in support of the application to lead fresh evidence in considerable detail in its reasons for judgment:  Williams v Official Trustee in Bankruptcy (1994) 122 ALR 585.  In the course of its reasons  the Full Court said at 597:

“… it would be quite unsafe now to accept at its face value Mr Wilson’s evidence that the photographs were taken in April 1980”

The Full Court ultimately rejected the application to lead fresh evidence.  The Full Court said at 598:

“There may be cases which will from time to time provide appellate courts with difficulty because it will not be easy to determine the significance that particular evidence which has subsequently come to light may have had for the outcome of the trial.  There may be cases in which it may be difficult to make a satisfactory judgment about the matter.  This is not such a case.  We do not have a sufficient degree of confidence in Mr Wilson’s evidence to say that it is at all likely there would have been a different outcome if the photographs in question had been produced at the trial.  Mr Wilson’s evidence is quite unsatisfactory.  There is no consistency in the evidence looked at as a whole. There are inconsistencies in the evidence led before Sweeney J and further inconsistencies when the evidence before us is taken into account.  The lettered pars (a) to (g) must be looked at cumulatively [set out previously in the judgment].  The accumulation of them demonstrates, in our opinion, that the availability of the photographs at the trial would have been quite unlikely to have made any difference to its outcome”. 

The Full Court dismissed the motion.  It therefore determined the appeal upon the basis of the matters which had been argued on 20 September 1993 and, save for a variation as to the costs order made by Sweeney J, it dismissed the appeal.

12                  The applicants applied to the High Court for special leave to appeal from the decision of the Full Court.  That was refused on 17 February 1995.  Mason CJ said:

“This case commands no prospect of success whatsoever.  The application is therefore refused.”

13                  On 16 September 1998 the applicants filed an application in the Court seeking various declarations and orders against the Trustee under the Bankruptcy Act 1966 (Cth) (“the Act”).  The application came on for hearing before Branson J on 1 February 1999.  The applicants placed principal reliance on claims for orders under s 178 of the Act and an inquiry under s 179 of the Act.  The substance of the claim before Branson J was that had the Trustee properly conducted himself in relation to the claim made by Welona, particularly in relation to the photographs, the outcome of the proceeding before Sweeney J would have been different and the estates of the applicants would not have been exposed to the liabilities imposed upon them as a result of the judgments and orders of Sweeney J and the Full Court.  Branson J dismissed the application.  In the course of her Honour’s reasons for judgment she gave extensive consideration to the issue and relevance of the missing twenty‑six photographs.

14                  The appellant sought leave to appeal from the order of Branson J and the application for leave came on for hearing before the Full Court on 1 September 1999.  The Full Court observed that the validity of Welona’s proofs of debt was authoritatively established by an order of this Court which was not sought to be set aside in the proceeding before it.  The Full Court said later in its judgment (Wilson v Commonwealth of Australia [1999] FCA 1308) at [13]:

“The contention that a different judgment would have been pronounced had the evidence of the photographs been available before Sweeney J invites a collateral attack on the decision of the Full Court.  It is not open to the appellants now to contend that the outcome of the proceedings before Sweeney J would have been different had the photographs been available, because that contention was put by the appellants to the Full Court, and rejected.  Unless the appellants can make good that position then there is no foundation for any claim to compensation against the Official Trustee, however that claim is expressed, and whatever other difficulties may lie in their path.”

The applicants were unable to overcome what the Full Court called “that fundamental obstacle”.  Leave to appeal was refused.

The present proceeding

15                  On 6 October 1999 the applicants filed a notice of motion seeking an order that “the judgment” of Sweeney J on 10 December 1992 be set aside.  The notice of motion was supported by an affidavit of Ms Williams sworn on 2 October 1999.  The applicants appeared before the primary judge ex parte on 6 October 1999 seeking an ex parte injunction or, alternatively, short leave.  As is recorded in his Honour’s reasons on 14 October 1999, he granted them short leave on 6 October 1999 but indicated that at that time he would need to be persuaded why “at this late stage” the Court should embark upon the inquiry sought in the notice of motion.  At that time Ms Williams handed to his Honour a written submission by the applicants which at the hearing on 14 October 1999 was marked for identification. 

16                  The motion came on for hearing before the primary judge on 14 October 1999 when his Honour heard argument and dismissed the motion.  In his Honour’s reasons for judgment he briefly recited a chronology of events, to which events we have referred in some detail, and concluded at [8]:

“In my opinion the present notice of motion is an abuse of the process of the Court.  It is, in form and in substance, an attempt to agitate the same matters that were dealt with by the Full Court in 1994.  In those circumstances, the Court has no alternative other than to order that the notice of motion be dismissed.  I so order.”

17                  Although the matter before the Court is the hearing of the applicants’ notice of appeal filed 2 November 1999, the applicants require leave to appeal as the order of the primary judge was interlocutory rather than final, notwithstanding the consequence of the order for the applicants.  It is clear from the authorities that whether a judgment is final, as distinct from interlocutory, depends upon whether the judgment finally determines the rights of the parties to the proceeding:  Licul v Corney (1976) 8 ALR 437; Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248.  In Brouwer v Titan Corporation Ltd (1997) 73 FCR 241 the Full Court said at 242:

“In applying this test [whether a judgment is interlocutory or final], the court must have regard to the legal rather than the practical effect of the judgment, so that the question is whether the judgment finally determines, in a legal sense, all the rights of the parties that are in issue in the proceedings …”

(See also Minogue v Williams [2000] FCA 125 at [18]).

18                  Although the primary judge dismissed the applicants’ motion as an abuse of the process of the Court, the judgment has not, in a legal sense, determined the rights of the parties.  It has been established in a number of authorities that dismissal of an action on the ground that it does not disclose a reasonable cause of action is interlocutory and not final:  Hunt v Allied Bakeries Ltd [1956] 1 WLR 1326 at 1328; Salter Rex & Co v Ghosh [1971] 2 QB 597 at 601; Weatherall v Satellite Receiving Systems (Australia) Pty Ltd [1999] FCA 741; Wickstead v Browne (1992) 30 NSWLR 1 at 11; Little v State of Victoria [1998] 4 VR 596.  As was pointed out in Minogue v Williams (supra) a different view was taken in Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd [1972] WAR 148 at 149.  That view appears to be inconsistent with a long line of authorities.

19                  Although no application for leave to appeal has been made we consider it appropriate to treat the notice of appeal filed on 2 November 1999 as an application for leave to appeal.  In Décor Corporation Pty Ltd v Dart Industries Inc (1990) 33 FCR 397, the Full Court set out in some detail the principles to be applied in determining whether leave to appeal should be granted.  Those principles, in general terms, are that leave should not be granted unless two tests are satisfied.  The first is that in all the circumstances the decision is attended with sufficient doubt to warrant its reconsideration on appeal.  The second involves asking whether substantial injustice would result if leave were refused, supposing the decision could be wrong. 

20                  The only ground relied upon in the notice of appeal is that the primary judge:

“Refused the applicants their right to be heard and in doing so deprived them of ‘natural justice’”.

Ms Williams, who appeared in person, submitted that his Honour did not give the applicants the opportunity to present their case in two respects.  First they were precluded from presenting the evidence of a proposed witness, Mr Farthing.  Secondly his Honour was not interested in the submissions made by Ms Williams and did not ask her any questions about them.

21                  This Court had before it on the hearing of the application for leave to appeal the primary judge’s reasons for decision and Ms Williams’ affidavit sworn 2 October 1999.  The applicants filed a motion on 14 January 2000 seeking leave to rely on further material.  The Court granted leave to the applicants to rely on the affidavit of Mr Peter Farthing sworn 26 October 1998 for the limited purpose of identifying the material which the applicants had wanted to present before the primary judge.  On one view that affidavit was formally before the primary judge although it was not specifically referred to on 14 October 1999.  The Court formally allowed the applicants to rely upon it out of an abundance of caution.

The hearing on 14 October 1999

22                  When the motion was called on for hearing Ms Williams announced that the applicants were unrepresented and that she was representing both applicants.  In response to his Honour’s enquiry as to the relief they were seeking, Ms Williams responded that they wished to bring matters before the Court which had not been looked at by the earlier Court.  Ms Williams said she relied upon her affidavit sworn 2 October 1999.  His Honour put to Ms Williams that the essence of the affidavit was that the applicants were seeking to agitate matters upon which Sweeney J had made findings.  Ms Williams agreed with that proposition.  His Honour then referred to the written submission which Ms Williams had handed up on 6 October 1999 and marked it for identification.  The following exchange then occurred:

“HIS HONOUR:    But, the submission seem to cover similar ground to what’s in your affidavit?

MS WILLIAMS:      It is the same sort of thing, yes, your Honour, without sort of going to the explanation of it.

HIS HONOUR:      Yes, and in essence it’s this, is it, that you say that Sweeney Js findings of fact should be looked at again because you say you have some material, you say, of a very serious nature to deal with photographs, that sort of thing.

MS WILLIAMS:      Exactly, that’s right.

HIS HONOUR:      And this goes to the condition of the premises?

MS WILLIAMS:      Exactly, your Honour.”

There was then a dialogue between his Honour and Ms Williams in relation to the missing photographs which had been found and the manner in which the Full Court hearing the appeal from Sweeney J had dealt with that issue.

23                  His Honour then asked Ms Williams to be seated whilst he read her affidavit and written submission (both of which he had earlier looked at briefly).  Having done this he asked Ms Williams whether the essence of her claim was found in par 54 of the affidavit.  Ms Williams responded:

“Yes, I would say so, your Honour, yes, just looking quickly down there.”

Paragraph 54 raised a number of issues as to the photographs of the hotel.

24                  There was then further dialogue between his Honour and Ms Williams in relation to the photographs and his Honour then put to Ms Williams that he wanted her to tell him why he should not stay the proceeding as an abuse of process.  His Honour put to Ms Williams that she was seeking to re‑agitate issues that had been looked at by Sweeney J, Branson J and two Full Courts which had heard appeals from those judges and that she wanted to go back over the same ground.  Ms Williams said that that was not the position and she referred to one of the matters dealt with in her affidavit, namely that it had not been the Official Trustee who had considered the proofs of debt but rather his solicitor who had obtained information from the first lessee Mr Wiggins and Mr Bowen, a director of Welona.  His Honour indicated to Ms Williams that he did not find these matters helpful, he repeated that she was trying to agitate the issues dealt with by Sweeney J and he then said “Now, thank you, I’ve heard you”.  His Honour asked Ms Williams to resume her seat and he then asked Mr Wilson whether there was anything he wished to say.  The following dialogue then occurred:

“MR WILSON:       I do wish to say, your Honour.  We have a person here I would like you to hear under oath, today. 

HIS HONOUR:      But I’m not a Royal Commission.

MR WILSON:        I don’t want – this person here has seen the hotel.  He’s a building inspector.  Prior to us vacating the premises, he’s had a meeting with Mr -

HIS HONOUR:      I can understand why you are upset.

MR WILSON:         No, you don’t.

MS WILLIAMS:      Your Honour, we’re losing everything.

HIS HONOUR:      You’ve got a very serious dispute but I can only deal ---

MR WILSON:         No, but if you just listen to me.  This man had a meeting with Mr Cruikshank, he informed Mr Cruikshank about the condition of the hotel.

HIS HONOUR:      But I don’t - - -

MR WILSON:         Let me finish.  Mr Cruikshank told him certain things which I think the court should hear and you should listen to what Mr Farthing has to say, please.

HIS HONOUR:      Well, obviously I would if this were – if you could just hear me for a minute.  If I were here in 1992, before Sweeney J, obviously I would hear all of these things but there’s a limit ---

MS WILLIAMS:      We don’t know.

MR WILSON:         We didn’t know.  This man has come forward since.  Sweeney J ---

HIS HONOUR:      But you have had two Full Courts, you have had two trial judges, we cannot provide any more.

MR WILSON:         Your Honour, Sweeney J did not know about the false evidence.  We didn’t know.  We didn’t know about – we got told by the Trustee that we had no photographs and then they say they were mingled.  How do you mingle 41 photographs into 45?  It’s an impossibility – two photographs you might, your Honour, but not 41.  Now, that’s just ridiculous.”

His Honour then delivered his reasons for judgment.

25                  After he concluded Mr Wilson said he wanted to ask him again:

“I beg of you to have Mr Farthing go in the box and speak to you about this.”

His Honour said that he did not have any authority to do that because he could only deal with matters that were properly before the Court.  The following dialogue occurred:

“MR WILSON:       …We’ve got a person here that has seen the hotel, he’s seen the hotel beforehand.  Mr Cruikshank has interviewed the person.

HIS HONOUR:      I can only deal with matters properly before this court.  This matter is not properly before the court.  That is the limit of my authority.

MR WILSON:         But you made a statement there before when you were saying about if we could show you, or convince you, well I think if Mr Farthing is allowed to speak he will show you and convince you.

MS WILLIAMS:      I found it difficult, your Honour, that you didn’t want to listen about the evidence, the knowledge, that the Official Trustee had at the hearing before Sweeney J that wasn’t a matter before the Appeal Court.  That wasn’t found until 1998 and you never listened to it.  I find that difficult because that is new evidence.”

26                  In her outline of submissions filed with the Court for purpose of the appeal, and in oral submissions, Ms Williams was critical of the manner in which his Honour conducted the hearing.  She submitted his Honour did not give the applicants the opportunity to present their case.  We do not accept that submission.  His Honour read the affidavit and written submission placed before him and gave Ms Williams the opportunity to respond to difficulties which he found in the material.  In particular, his Honour gave Ms Williams the opportunity to respond to his concern that the applicants were seeking to re‑litigate issues which had already been heard and determined by earlier courts.

27                  In the written outline of submissions filed for the purpose of the appeal the applicants said that they wished to set aside the decision of Sweeney J on three major points:

(a)                photographic evidence which had been tampered with;

(b)               freedom of information documents obtained in 1996;

(c)                a creditor’s false affidavit prepared for the Official Trustee. 

Each of those matters had been raised in Ms Williams’ affidavit and written outline of submissions which his Honour read.  His Honour had sought clarification from Ms Williams as to the nature of the claims, namely that they involved a re‑consideration of Sweeney J’s findings.  The applicants were given full opportunity to place these matters before his Honour and they did so in writing.  Once his Honour had understood the nature of the submissions on this issue, it was very much a matter for his Honour whether he asked Ms Williams any further questions.  His Honour did not do so, no doubt taking the view it was not necessary.  His Honour did not err in taking this approach.  Having given the applicants the opportunity to make their point, it was for his Honour then to consider it.  He did so and, in our view, reached the correct conclusion – the applicants’ submissions were an attempt to raise again the same matters considered by the Full Court on appeal from Sweeney J.

28                  We are satisfied that the primary judge gave the applicants full opportunity to present the case set out in the written outline of submissions, Ms Williams’ affidavit and the case explained by Ms Williams in her oral submissions.

29                  Mr Farthing’s evidence raises different considerations as its existence and potential relevance was not clearly placed before his Honour on a consideration of the material before him and it was not adverted to orally by Ms Williams who said she was speaking on behalf of both applicants.  There was no specific reference in the written outline of submissions to the evidence of Mr Farthing or that he had sworn an affidavit on 26 October 1998.  Although Ms Wilson had said in par 101 of her affidavit sworn on 2 October 1999, which was before the primary judge, that she wished to refer to Mr Farthing’s affidavit, Ms Williams’ affidavit did not identify or explain the substance or contents of that affidavit nor the reason why it was sought to be relied upon; nor does the written submission.  The written submission makes no reference whatsoever to Mr Farthing, nor to his affidavit or the nature of the evidence he could give.

30                  At the time at which his Honour, in substance, had informed the applicants that he had heard enough from them, the applicants had not articulated before him what was said to be the new evidence which Mr Farthing could give.  In substance that evidence was that in 1984 he had inspected the hotel and given a written report as to its then structural condition.  He concluded that the hotel was in a bad state of repair.  In his affidavit sworn 26 October 1998 he expressed the opinion that at the time of his inspection of the hotel in 1984 the structural defects would have taken many years, and at least fifteen years prior to this inspection, to be in the condition he observed them to be.  He informed Mr Wilson of these matters in early 1997. 

31                  An examination of the transcript of the hearing before the primary judge shows that although the applicants contend that his Honour did not give them the opportunity to explain why they wanted to call Mr Farthing, who was then present in Court, his Honour was misled in that respect by the material which the applicants had placed before his Honour and the submissions they had made.  It was not articulated to his Honour that what was sought to be led and be relied upon was the fact that Mr Farthing had inspected the hotel in 1984 and was able to express an opinion as to the state of the hotel at the time the applicants entered into occupation.

32                  A careful reading of the transcript shows that his Honour had not been made aware of the nature of Mr Farthing’s evidence and had assumed that the issues before him as to what was relied upon by the applicants as fresh evidence was set out in the body of Ms Williams’ affidavit and her written outline of submissions.  That was not the position.

33                  However, the Court is satisfied that even if his Honour had been aware of the nature of Mr Farthing’s evidence he would have been bound to have refused the applicants leave to rely on it as it was not, in substance, fresh or further evidence, nor was it highly likely to have produced an opposite result.  Accordingly, he was bound to dismiss the motion to set aside the order of Sweeney J. 

34                  In order for the applicants to open the door to a consideration whether fresh or further evidence should be the subject of consideration for the purposes of setting aside an earlier regularly entered judgment it is necessary to establish that the evidence could not, with reasonable diligence, have been discovered or found out prior to the handing down of the judgment which is sought to be impugned. 

35                  The principles which govern the admission of further evidence are well established.  At common law in order to obtain a new trial on the ground of the discovery of fresh evidence it was necessary to overcome the threshold that the evidence in question was not available at the trial and could not have been obtained by the exercise of reasonable diligence:  Council of the City of Greater Wollongong v Cowan (1954) 93 CLR 435 at 444 per Dixon CJ.  Once that threshold was overcome it was necessary to establish that if the evidence had been available at trial:

“… an opposite result would have been produced or, of it is not reasonably clear that it would have been produced, it must have been so highly likely as to make it unreasonable to suppose the contrary.”

(Council of the City of Greater Wollongong v Cowan (supra) at 444 per Dixon CJ, see also Orr v Holmes (1948) 76 CLR 632; Commonwealth Bank v Quade (1991) 178 CLR 134.)

36                  In CDJ v VAJ (1998) 157 ALR 686 the High Court held that the principles laid down in Council of the City of Greater Wollongong v Cowan (supra) were not determinative of the admission of further evidence in the Family Court, that issue being regulated by s 93A(2) of the Family Law Act 1975 (Cth) (“the Family Law Act”) which is, in material respects, in similar terms to s 27 of the Federal Court of Australia Act 1976 (Cth) (“the Federal Court of Australia Act”).  The majority of the High Court (McHugh, Gummow and Callinan JJ) said at 709:

“When regard is had to Pt X and its place in the scheme established by the Act, it is apparent that the common law rules which govern the admission of fresh evidence in the common law courts cannot exhaustively define the scope of the discretion.  The discretion is more ample than the principles applicable in common law proceedings and applied in Wollongong Corporation.  That, of course, does not mean that the discretion reposed in the Full Court by s 93A(2) is unfettered, a point recognised by the Full Court in In the Marriage of Abdo.  Although the discretion to admit further evidence is not attended by any express words of limitation, the subject matter, scope and purpose of the appeal provisions in Pt X of the Act and the issues involved in each appeal will point to the considerations which are or are not extraneous to the exercise of the power.”

Their Honours had earlier observed that the terms of s 93A(2) of the Family Law Act and s 27 of the Federal Court of Australia Act do not coincide but are similar and that both conferred a power to be exercised by the court “in its discretion” and both used the expression “further evidence” rather than “fresh evidence”.  Their Honours continued at 710‑711:

The power to admit the further evidence exists to serve the demands of justice.  Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial.  Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.

…

In any event, we cannot accept that the discretion to receive further evidence is so wide that the Full Court can admit further evidence merely because it is useful.  Such a criterion is inconsistent both with the nature of the appellate jurisdiction exercised by that court and with the perceived purposes of s 93A(2).

…

The failure to have adduced the evidence before the primary judge will be a variable factor, the weight of which will depend upon all the other factors pertinent to the case.  Where the evidence has been deliberately withheld, the failure to call it will ordinarily weigh heavily in the exercise of the discretion.  In other cases, the failure to call the evidence even if it could have been discovered by the exercise of reasonable diligence may be of little significance.  No invariable rule concerning the failure to call the evidence can or should be laid down in view of the wide discretion conferred on the court by the section.”

37                  Mr McGovern of counsel, who appeared for the second respondent, submitted that Mr Farthing’s evidence did not fall into the category of “fresh” or “further evidence”.  This submission relied upon the following analysis which is derived substantially from Mr Farthing’s affidavit.

38                  Mr Farthing had been employed by the Waverley Municipal Council between 1954 and 1985 in various positions which included senior building surveyor and legal officer.  In late 1984 he was asked by Mr Murphy, the solicitor for Mr Wilson, to inspect the hotel because of his qualifications as a building surveyor and to make a written report as to its structural condition.  He visited the hotel as requested and compiled a written structural report which he delivered to Mr Murphy.  During his inspection of the hotel he met Mr Wilson and prior to leaving the hotel he told Mr Wilson that the hotel was in a “dilapidated and insanitary condition” and that he should report the condition to the local council who would require the owner to repair the structural defects or serve a closing order under the provisions of the “Public Health Act”.

39                  The written structural report which Mr Farthing delivered personally to Mr Murphy contained an itemised list of the defects.  On 22 April 1991 Mr Wilson swore an affidavit which was filed in the proceeding which was ultimately heard by Sweeney J.  That affidavit is Exhibit PLW‑15 to Ms Williams’ affidavit of 2 October 1999 sworn in support of the motion to set aside the judgment of Sweeney J.  In par 9 of Mr Wilson’s affidavit he said:

“Exhibited before me at the time of swearing this affidavit and marked “EAW1” are 41 colour photographs that I caused to be taken in about April 1983.  These photographs depict many of the structural defects which were present at the time the applicants entered into the lease and of the consequential damage caused by the defective condition of the premises.  The nature and extent of these defects were communicated to Bowen by me orally on a number of occasions from the time of taking possession of the premises until about September 1984.  The defects shown in the photographs included: …”

In fact no photographs were exhibited to the affidavit.  There is then set out a list of numbered and itemised defects under various headings such as “Externally”, “Bedrooms Located at First Floor Level” and other headings relating to other parts of the hotel.

40                  In his affidavit Mr Farthing said that he has been shown those pages in “Mr Wilson’s Appeals Book” which is apparently a reference to the appeal book before the Full Court which heard the appeal from the judgment of Sweeney J as the pages bear sequential numbers which appear to be the numbers of an appeal book.  Mr Farthing annexed a copy of those pages to his affidavit and said that the structural report referred to under the headings to which we have referred “was in fact my report” including some general comments at the end.

41                  It is therefore apparent that prior to the proceeding coming on for hearing before Sweeney J, not only had Mr Wilson met Mr Farthing and had the benefit of his observations as to the state of the hotel, he had also seen Mr Farthing’s detailed report on the structural condition of the hotel.  Indeed Mr Wilson had incorporated in par 9 of his affidavit a defects list prepared and supplied directly by Mr Farthing.

42                  It cannot be said therefore that Mr Farthing’s evidence is fresh or further evidence.  Although it might be said that he did not express the view at the time he spoke to Mr Wilson in 1984 that the state of the hotel which he then observed must have existed for some considerable time and would have existed at the time of the commencement of the applicants’ occupation of the hotel, the point is rather that the existence of Mr Farthing was known to Mr Wilson and his solicitor as was the fact that he had given a detailed report on the structural condition of the hotel from which conclusions might be drawn.  His Honour was therefore bound to refuse the application for leave to rely on Mr Farthing’s evidence.

43                  There is a further reason why his Honour was bound to refuse to allow the applicants to rely on Mr Farthing’s evidence.  We do not consider that there is any basis upon which it can be said that Mr Farthing’s evidence would have produced a different result at trial.  The effect of the admission of Mr Farthing’s evidence would be that there was then available further evidence of an opinion as to the state of the hotel in 1980.  Mr Farthing had not seen the hotel in 1980 but concluded from his inspection in 1984 that the state of the hotel must have been poor in 1980.  However, there was other evidence to the contrary before Sweeney J, namely the evidence of Mr Bowen, a director of Welona, and the evidence of Mr Bell, the chartered architect who had relied on the reports of Mr Benson who had inspected the hotel on 12 May 1983 and 28 January 1985.  Mr Bell had given evidence before Sweeney J and had been extensively cross‑examined.  His evidence was accepted by Sweeney J who noted in particular at 11:

“… his evidence that there had been ‘accelerating vandalism and deterioration’ of the leased premises during the period 1980 to 1985.  I also accept the evidence of Mr Bowen as to the state of the premises in January 1980 rather than that of Mr Wilson.”

Sweeney J referred in his judgment to passages of Mr Bell’s evidence which included the following:

The question of things like plumbing had obviously – there’d been obviously major leaks in the not so distant past in terms of 1985.  In terms of water damage to ceilings it was visible in photographs, with once again reference to where Benson talks about, you know, plumbing difficulties, leaks and so on.  There was every good reason, every bit of supporting evidence to suggest it was happening in the early part of the 1980s.  Yes, some aspects might have happened earlier, but all the evidence to my mind essentially established that the major deterioration not – well and over and above normal wear and tear happened basically in that period of time leading up to the mid 80s.”

44                  It can therefore be seen that if Mr Farthing’s evidence had been before Sweeney J it would have been evidence which his Honour would have had to weigh with the evidence of Mr Bell and the directors of Welona.  Thus, Mr Farthing’s evidence would not have been decisive of the issue. 

45                  If the primary judge had allowed the applicants to lead evidence from Mr Farthing in the terms which are set out in his affidavit of 26 October 1998 and had allowed them to refer in detail to that affidavit, he was bound to conclude that in the circumstances the evidence did not satisfy the requirements for the admission of fresh or further evidence.

46                  The consequence is that in all the circumstances leave to appeal should not be granted because any appeal on the ground raised by the applicants must fail.

47                  The application for leave to appeal will be dismissed with costs.

Associate:

Dated:              20 March 2000