(a) "the lease conferred no net benefit on the defendant at all but instead subjected him to a series of one-sided and enigmatic burdens with no corresponding benefits" - at [29];
(b) the appellant displayed "considerable passion for the task at hand" and an obsessive concern about detail, often insignificant detail - at [30] and [31], and
(c) the appellant was present when the lease was signed by the respondent - at [29].
52 The inferences and findings of which complaint is made were very much a matter for the trial judge who observed the parties in the course of the hearing and, particularly, in giving evidence. In any event, it is not clear what flowed from these findings, the first two being made in the course of considering the third (the presence of the appellant when the lease was signed).
53 The objective facts identify the lease as having been signed by the respondent on the execution page and initialled by him on the front page. Why he would have initialled the front page (or only the front page) unless directed to do so was unclear. Why the Justice of the Peace (who was not called by either party) would have invited him to initial the front page (and only the front page) was also unclear. However, these findings provided little basis for further findings, nor did they materially affect the outcome of the case. The presence of the appellant might have been relevant in respect of the exercise of undue influence, perhaps including the concealment of the written special conditions. However, the trial judge was not satisfied that a case of undue influence had been made out, nor that the respondent's claim that the handwritten special conditions were not in the agreement at the time it was signed had been made good. The challenge to the first three findings appears to go nowhere and should in any event be rejected, as the correctness of the findings should be accepted.
54 The fourth finding that was subject to challenge was the refusal of the primary judge to accept the appellant's evidence that he told the respondent to have the lease explained to him by his solicitor, Mr Nicolas Radich, who worked on the Gold Coast. The appellant noted that this finding was based in part on what he described as "a cynical view of the appellant", namely that he would not have wished to have the document subjected to the scrutiny of an independent solicitor (the fifth finding). The appellant submitted that it may have been "equally reasonable" to conclude that, as a competent solicitor, he would have wished the respondent to obtain independent advice because he, the solicitor, was obtaining an interest under the agreement.
55 To say that two inferences are equally available does not avail the appellant in the present case. Furthermore, it is clear why the primary judge preferred the inference adverse to the appellant. His Honour did not treat the appellant as a competent and fair-minded solicitor seeking to protect the interests of his client. The terms of the lease themselves provide objective support for that view. It was a view which was based, at least in part, on matters of demeanour to which the primary judge had referred in other passages of his reasons.
56 Of more substance is the challenge to the sixth finding, namely that the appellant did not explain the terms of the lease to the respondent. This was a matter dealt with at some length by the primary judge at [37]-[45]. His Honour noted that the appellant did not assert that any explanation had been given in either of his affidavits and then set out part of the evidence given after the trial judge had directed the appellant's attention to the issue. His Honour stated that the appellant's evidence "of the explanation he said he gave to the defendant is also both wholly unsatisfactory and in my view incredible": at [39].
57 His Honour gave reasons for that conclusion. First, the evidence was contradictory and confusing and gave the impression of recent invention: at [40]-[41]. Secondly, he noted the inadequacy of the explanation purportedly given in respect of the power of attorney: at [42]-[43]. Thirdly, he noted that there were portions of the special conditions that were, in his view, "incapable of explanation": at [44]. He gave as an example the inter-relationship between special conditions 5 and 12 and the explanation given by the appellant in his oral evidence.
58 The respondent gave evidence that the appellant did not provide any explanation of the special conditions and his Honour accepted that evidence: at [45]. There is no basis for this Court to interfere with that finding.
59 Finally, the appellant claimed there was an implicit finding that the respondent did not understand the terms of the lease. This claim was made in the written submissions without any attempt at particularity. His Honour found that the respondent "understood it to be a lease of the property to the plaintiff": at [48]. There were undoubtedly terms of the lease which, without independent advice and without an explanation from the appellant, the respondent could not have been expected to understand and which the Court (quite appropriately) described as confusing or difficult to understand. However, there was no finding that the respondent did not understand the lease as a whole, nor was the relief based upon any such implicit finding. Rather, it was based upon the characterisation of certain conditions within the lease as unjust. It might have been open to the appellant to cross-examine the respondent to establish that he did in fact understand how the lease operated, but it was not suggested that his Honour failed to make findings on that basis.
60 It follows that the challenges raised under topic six must be rejected.
Topic 3: costs
61 In a supplementary judgment delivered on 28 November 2008 the primary judge made orders dismissing the summons, declaring specific conditions in the lease to be unjust within the meaning of s 7 of the Contracts Review Act and declaring those conditions void. His Honour made an order that the appellant pay the respondent's costs of the proceedings, including those of the cross-summons.
62 The appellant seeks to challenge that order on two bases. First, he says that he was successful in demonstrating that he had a right to occupy the property pursuant to a lease which was a residential tenancy agreement. That right or entitlement remained unaffected by the respondent's success on his cross-claim. Secondly the appellant says that, to the extent that the respondent sought to rely upon a claim of fraud, that claim was not made good and, at the very least, the appellant should not pay the costs of so much of the proceedings as concerned that claim.
63 So far as the dismissal of the appellant's summons is concerned, there was no challenge to the order made by the primary judge. Accordingly, so much of the costs order as relates to that relief was concerned, it must stand. Further, the respondent was clearly entitled to obtain a costs order based on his significant success in establishing that fundamental elements of the agreement, set out in the unjust special conditions, should be set aside. The practical result was to require a reassessment of the appellant's purported compliance with his obligations under the lease, including the payments of rent.
64 With the exception of the fraud issue, it was by no means clear that, although the defendant was unsuccessful on some aspects of his claim, it would have been appropriate to award costs on the basis of severable issues. Nor does it appear that his Honour was invited to act on that basis. Accordingly, and again subject to the fraud allegation, the separate challenge to the costs order must fail.
65 With respect to the allegation of fraud, it is significant that the matter was not pleaded (being dealt with by way of summons and cross-summons) and that the allegation of fraud appears to have been identified by reference to the respondent's claim that there were no handwritten special conditions in the lease at the time at which he executed it. Indeed, the respondent's assertion was that, when he signed it, the lease was "blank", presumably meaning that the details of the parties, the property, rent and the term of the lease, completed in handwriting on the first page, had not been completed.
66 In relation to these allegations, the primary judge stated in his supplementary judgment at 2-3:
"Mr Adamson, both at trial and again before me today, emphasises that the defendant's allegations with respect to the circumstances in which the lease was executed amount to an allegation against him of fraud. It was part of his case at the trial that I should disregard the claims by the defendant about the circumstances in which the lease was executed because fraud had not been particularised in the statement of cross-claim or in any other way, according to Mr Adamson, that complied with the relevant rules.
In the events which have occurred I decided the cross-claim - indeed the whole proceedings - without reference to and without the need to involve myself in the question of whether or not allegations of fraud had been made or had been proved. In my opinion the so-called fraud issues were side issues not relevant to the true issues joined between the parties and it was unnecessary for me to deal with them or to decide them."
67 By this statement, I do not take his Honour to mean that the allegation that the lease was signed in blank at the direction of the appellant was not addressed and determined at the trial. Rather, what was not addressed was whether that constituted an allegation of fraud which should have been specifically pleaded. There is a question, accordingly, as to whether the principle relied upon by the appellant should have been applied with respect to the substance of the unsuccessful claim, despite the lack of pleading.
68 His Honour dealt with the matter upon the one authority to which he was directed, on the basis that a party might lose some part of the costs where he had otherwise been successful, but failed on a severable claim for fraud. In Parker v McKenna (1874) 10 Ch App 96, James LJ stated at 125:
"It is not because a person has made himself liable to proceedings in equity or proceedings at law that the adverse litigant is entitled to make the court the place, and the proceedings of the court the means, by which personal spite or party hostility is enabled to indulge itself in unfounded aspersions upon character. … Unfounded aspersions have been wantonly and recklessly made, and the consequence of that is that this Court is obliged to give effect to what it has so often said it would do - make persons so dealing with the proceedings of this Court pay, and pay fully, in costs for it. I am of opinion, therefore that the plaintiff must pay the costs of so much of the proceedings as the Lord Chancellor has pointed out, and that he has so mixed that up with the rest of the suit that he has forfeited, in my opinion, his title to the costs which he otherwise would have been entitled to receive."
69 That principle was said by this Court to be applicable in relation to an allegation that it was not the company's common seal, but rather the common seal of another company, that had been affixed to a mortgage: see Hermann v Charny [1976] 1 NSWLR 261 at 267 (Hutley JA, Glass and Samuels JJA agreeing). The somewhat punitive approach identified in Parker was not followed, but the respondent was deprived of costs referable to particular aspects of the claim, on the basis of "serious misconduct in the litigation": at 268F-G.
70 The allegation that a solicitor obtained the execution of an agreement in blank in circumstances where he was the intended beneficiary of the agreement and the other party was a former client, in circumstances where the agreement secured to the solicitor a means, at least by way of set off, for payment of legal costs, is an allegation of dishonourable conduct. It is a more serious allegation than that of not explaining the contents of the agreement and not directing the other party to obtain independent legal advice. However, the allegation was not found to have been made in bad faith and was not summarily dismissed. It was not found to have been proved, in part because it was quite possible that, at least in relation to the special conditions, the respondent was never made aware of the pages of the agreement which contained the handwriting.
71 Certainly, there was no finding of misconduct on the part of the respondent in raising the matter, which was a finding of the kind which lay peculiarly within the proper province of the trial judge who had heard the proceedings. Nor was it clear that his Honour was invited to make a finding in those terms. There was not even an implicit suggestion in his Honour's reasons that the respondent had been guilty of misconduct, let alone "serious misconduct", in the prosecution of his cross-claim.
72 In these circumstances, although there may have been grounds for a costs order which deprived the respondent of some part of this costs, the appellant has not made good a basis for intervention by this Court in relation to a discretionary order with respect to costs.
Topic 2: reopening motion
73 The allegation in relation to this matter identified in the written submissions was that, on 31 October 2008, being the day on which his Honour was to hand down judgment, the appellant "filed and served a motion to reopen". He stated that he raised the matter with the trial judge prior to the delivery of judgment, but that his Honour declined to hear the motion. (The appellant contended he had a "right" to have the motion considered.) After delivery of judgment, the matter was stood over until 28 November 2008 to allow the parties to bring in short minutes of appropriate orders. That was done, and the appellant attended on 28 November but did not raise again his application to reopen the hearing. The application, it should be noted, sought to claim by way of equitable set-off and defence the amounts which he said had been spent by the tenants on the property between 31 July 2001 and 19 September 2003. The amounts claimed were amounts which might have been set-off against the rent under the lease, if the relevant provisions of the lease had been upheld.
74 There were several reasons why the motion was properly not dealt with in the proceedings below. First, there was no suggestion that it had been filed or served prior to 31 October. Accordingly, absent an order for abridgement of time, it could not have been dealt with on that date. The affidavit in support of the motion, setting out the details of the amounts claimed, would have required extensive pre-trial consideration, and probably pleadings, before any such hearing could have been conducted. It was not conceivable that the motion could have been dealt with on 31 October on any view of the matter.
75 Secondly, the appellant took no steps to have the matter properly served and listed for hearing between 31 October and the date when the orders were made on 28 November. There was some suggestion that the appellant thought that such steps were not open to him, although the basis upon which that was so was unclear and in any event did not matter. After the first abortive attempt to have the motion heard on 31 October, no further attempt was made after the effluxion of the usual period of notice following service on the respondent.
76 Thirdly, any claim for payment, whether for legal expenses, work carried out on the landlord's property, or on any other basis, would have required the commencement of an entirely novel proceeding with pleadings, various interlocutory steps and a hearing which would address none of the issues which had been considered in the proceedings sought to be reopened, although the relief might be consequential upon the result.
77 The failure of the primary judge to deal with the motion on 31 October, or thereafter, was not erroneous and provided no ground of appeal.
Conclusions
78 The grounds of appeal raised by the appellant and addressed in both written and oral submissions should be rejected. It follows that the following orders should be made: