Clarey v Permanent Trustee Co Limited & Anor [2005] VSCA 128

AGENCY AND ESTOPPEL - Sale of land - Transfer a forgery - Sale price misappropriated by vendor's conveyancing agent - Duties of conveyancer - Agent having no actual or ostensible authority to receive sale price on behalf of vendor - Estoppel - No representation by vendor that conveyancer had authority to receive payment or to transfer vendor's land to another - Plaintiff not estopped from denying such authority.

Introduction

1 On 5 September 2000 settlement took place for the sale of property at 1 St. Andrews Crescent, Bulleen with the appellant, Elizabeth Clarey, as vendor and Nick Thomson, as purchaser. Mrs Clarey owned the land subject to a mortgage with National Australia Bank. The purchase price was $520,000 and Thomson had obtained finance by way of a loan from Permanent Trustee Co. Limited ("Permanent") in the sum of $468,000 that loan having been negotiated through Permanent's agent Morbanc Securities Ltd. ("Morbanc"). The loan was to be secured by a mortgage over the property. At settlement the solicitors for Permanent, Anderson Rice, handed over two cheques, the first payable to the National Australia Bank in the sum of $149,709.50 and the second payable to Middle East Investments Pty. Ltd. ("Middle East"), its representative at the settlement being one Peter (Boutros) Chalhoub. Although the precise role of Chalhoub and Middle East was very much an issue in the trial, for present purposes it may be accepted that Chalhoub purported to act as "conveyancer" in the transaction, for both the vendor and purchaser. The cheque for $269,970.58 payable to Middle East was banked by Chalhoub and the funds were then immediately withdrawn and misappropriated by him.

2 On 14 September 2000 Mrs Clarey obtained an interim injunction, followed on 4 October 2000 by an interlocutory injunction restraining the Registrar of Titles from registering the discharge of mortgage from the National Australia Bank, the transfer of land to Mr Thomson and the mortgage from Thomson to Permanent. Mrs Clarey commenced proceedings by writ against seven defendants; in order they were, Thomson, Middle East, Chalhoub, the Registrar of Titles, National Australia Bank, Morbanc and Permanent. Thomson was not served with the writ and took no part in the proceedings. Middle East and Chalhoub were served, entered an appearance and filed a defence but their solicitor gave notice of ceasing to act and neither Middle East nor Chalhoub appeared at the trial and no relief was sought against them by the plaintiff. The Registrar of Titles announced that he would abide the result of the proceeding.

3 The plaintiff's claim was contested by the National Australia Bank being represented by its own counsel and by Morbanc and Permanent who were jointly represented by their own senior and junior counsel. A further party to the proceeding was Giuseppe Verduci, the former husband of the appellant. He was joined as a third party by Permanent and Morbanc and was represented throughout the trial by the same counsel and solicitor as represented Mrs Clarey.

4 By a counterclaim Permanent sought relief against the first and second defendants and also against the third and fourth defendants. The counterclaim against the first and second defendants and also the third party claim raised allegations by Permanent that the appellant together with Verduci, Thomson and Chalhoub conspired to defraud Mrs Clarey's creditors and Permanent.

5 The proceedings commenced on 23 July 2001. The progress of the trial was very severely disrupted by the ill health of the appellant. Although estimated as an eight-day trial, 22 hearing days had been occupied hearing evidence on the appellant's case when (subject to the completion of the appellant's evidence) the plaintiff's case closed and a no-case submission was made by the represented defendants.

6 The appellant swore that she had not signed the transfer document and that the signature on it which purported to be her own was a forgery. Notwithstanding her allegation in the Further Amended Statement of Claim[1] that in or about June 2000 the appellant had appointed Middle East and/or Chalhoub "to act as her agent by carrying out the conveyancing in and about the sale of the property", the appellant claimed in her evidence that neither Middle East nor Chalhoub were authorised to attend the settlement and to receive moneys on her behalf. The appellant pleaded that Middle East and/or Chalhoub in acting on behalf of Thomson, had participated in a fraudulent scheme to defraud Morbanc, Permanent and/or the appellant. The primary claim was that the funds due and owing to the appellant were paid to Middle East and Chalhoub without them having actual or ostensible authority to receive moneys on her behalf.

7 Submissions by counsel on the no-case applications concluded on 21 August 2001, whereupon the learned trial judge reserved his decision. On 6 May 2002 the judge upheld the no case submissions, then publishing extensive written reasons for those decisions. His Honour ruled that the appellant was estopped from denying the validity of the transaction, and held that Middle East and Chalhoub had actual authority to receive the moneys on behalf of Mrs Clarey. His Honour subsequently dismissed the proceedings and ordered that the appellant pay the fifth, sixth and seventh defendants' costs on a solicitor and client basis.

8 The appellant now appeals against his Honour's orders on multiple grounds[2], the first of which concerns the failure of the judge to grant an adjournment of the hearing. That ground raised a number of discrete but related issues, and reads as follows:

"That at the time the plaintiff's legal advisers made applications . . . for the matter to be adjourned the plaintiff was a person under a disability and was not represented by a litigation guardian and/or those applying should have been accorded the right to adduce evidence as to her physical and mental condition without the case proceeding."

9 To understand this ground and the issues it raises it is necessary to discuss the circumstances which attended the hearing.

Applications for an adjournment

10 The appellant fell ill before she had completed her evidence, her mental infirmity being such that she was confined as an involuntary patient in a psychiatric hospital. It is contended on her behalf that the trial judge ought to have granted one or other of the applications for an adjournment made by her counsel and that his Honour's failure to accede to that application constituted a denial of procedural fairness which vitiated the trial. In order to appreciate the complaint on this ground it is necessary to provide some detail as to the events that transpired during the trial.

11 Mrs Clarey commenced her evidence on 24 July 2001. By agreement between counsel for the defendants, the appellant was first cross-examined by Mr North, senior counsel for Permanent. That questioning commenced on 25 July 2001 and continued throughout 26 July and into Friday 27 July at which time her counsel objected that the cross examination was oppressive and inordinately long. In its course she had been asked about her history of psychiatric illness. His Honour declined to intervene and observed that topics had been returned to several times because the witness was contradicting herself. Nevertheless, his Honour expressed concerns whether Mrs Clarey was unwell.

12 The appellant said she was feeling dizzy and faint. The judge suggested a short adjournment to enable her to obtain medical assistance that day and for the doctor to give evidence on the Monday or to report that she would be able to continue her evidence. Her evidence was stood over until the Monday with her counsel agreeing to continue the day's proceedings by taking evidence from Mr Verduci. On Monday 30 July the appellant was not at court, and her counsel sought an adjournment until she regained her health, but agreed to his Honour's suggestion that the trial continue pending the receipt of a medical report. Later that day a report of consultant psychiatrist, Dr Philip Tune, was handed to his Honour. That report stated, inter alia:

"Mrs Clarey is currently an inpatient at Upton House Psychiatric Unit and is currently unfit to participate in the court process or instruct her lawyer. Please refer to my previous reports for background information.

She is currently undergoing further evaluation, investigation and treatment. She may need to remain in hospital for a further 2-3 weeks."

13 Psychiatric reports dated April and August 2000 were considered by his Honour which indicated that the appellant had a history of a major depressive disorder and personality disorder. Counsel sought an adjournment, for the case to be to be refixed by the listing master in two or three weeks when a report could be made to the judge about the state of the appellant's health and her ability to proceed. He submitted that it was "a very important principle of justice" that his client be present and able to instruct her legal advisers. Discussion ensued, for the first time, about the possible need for the appointment of a litigation guardian, but it was agreed that that was a question for the future. Counsel for the defendants opposed an adjournment and submitted that Dr Tune ought be called for cross-examination. Mr North observed that documents relating to a previous proceeding concerning Mrs Clarey disclosed that Verduci had then been appointed litigation guardian. His Honour proposed that the case should proceed, with Verduci continuing his evidence and with the doctor to be later called. Mr Arthur, for Mrs Clarey, agreed to that course.

14 The following day, 31 July, which was a Tuesday, Dr Tune gave evidence that he had treated Mrs Clarey in 2000 for a major depressive episode which had caused her to be hospitalised for three months and to require electro-convulsive therapy. Since that time she had remained on anti-depressant medication. He said she had "an underlying personality disorder which could be classified as a histrionic personality disorder". She had been admitted on the previous Friday to Upton House, the psychiatric unit at Box Hill Hospital, in an acutely disturbed state, being unable to answer simple questions. He said that in Upton House her treating doctor was Professor Nicholas Keks. In all likelihood, he said, after further tests a report on her progress could be made by the end of the week.

15 Under cross-examination by counsel for National Australia Bank, Dr Tune said that he had seen her on the Sunday and she was able to answer questions and respond appropriately, and had made a significant improvement. He said that her behaviour at that time may or may not be consistent with her having the ability to "withstand the rigours of a trial". The judge intervened and said his observations on the previous Friday had been that Mrs Clarey seemed to be in a trance.

16 His Honour then said to Mr Arthur that they had agreed to continue with Verduci in the meantime, a proposition to which Mr Arthur did not then demur, but some days later said had not accurately reflected his position. The cross-examination of Verduci continued for two days. On 2 August 2001 Mr Arthur reported that he had obtained a brief written report by way of update of Mrs Clarey's condition. He applied again for an adjournment, pending a final medical report, at which time he would know if his client was competent to give instructions and how long it would be before she was able to continue. Counsel said that if at that time the medical advice was that it might require longer than a week's delay "then clearly we would be compelled to seek that a guardian ad litem or a litigation guardian be appointed for her, but in our submission, sir, we would like to leave that option until the report comes down from the doctors". The judge said that appointment of a guardian would not address counsel's concern that his client was not present to instruct him. Counsel responded that a litigation guardian might be able to take the decision on a proposal which had been made by counsel for Permanent that the property be sold if the matter was to be adjourned.

17 His Honour asked why counsel could not continue with the other witnesses in his case, and why he would need his client's instructions or presence in order to do so. Counsel submitted that it was "a fundamental principle of natural justice" that his client ought be able to be present to instruct him. Counsel could not point to an area on which he might need instructions but said that he and his solicitor felt that they would not be acting professionally to proceed. Counsel renewed his application to stop the case pending a report from Professor Keks.

18 Mr North submitted that the case could and ought proceed, given the presence of Verduci, who was obviously himself taking the leading advisory and tactical role in the litigation and was capable of assisting counsel to present the case for Mrs Clarey. He suggested that Verduci would be a logical choice for litigation guardian. His Honour decided to continue with evidence and await receipt of a medical report, expected the following day, at which time he would then decide whether to adjourn the case.

19 On the morning of Friday 3 August, in a joint medical report, Professor Keks and a Dr Gelman, stated that Mrs Clarey remained in a severe psychiatric relapse and would be unable to testify for two weeks. Counsel said he would attempt to have a medical witness available that afternoon in order that counsel for the defendants could test the psychiatric opinions, and he agreed to his Honour's proposal that they start with the next witness, Mr Adicho ( who was present outside court), in the meantime.

20 On Monday 6 August, after Adicho finished his evidence, counsel renewed his application for an adjournment, "pending Mrs Clarey's recovery". He read a new medical report from psychiatric registrar, Dr Gelman, who stated :

"Although she remains severely psychiatrically ill, she may have recovered sufficiently by the end of the week or early next week to be able to instruct her lawyers, and, if she can cope with that, attendance at court. She may in subsequent days be able to again give evidence. She needs to remain in Upton House as an involuntary patient for at least another two weeks and would return [there] after giving evidence."

21 Counsel then applied for four weeks' adjournment. He said that one issue facing the advisers was whether Mrs Clarey would agree to the sale of the property (without prejudice to her claim), which would enable the payout of National Australia Bank and its withdrawal from the case. His Honour said the situation would be a lot simpler if a litigation guardian was appointed. The solicitor was attempting to contact the appellant's family in Sydney to see if one of them would agree to be litigation guardian, but the family members were unwilling to become guardian and be at risk on costs.

22 His Honour then expressed another concern he had - that he was due to commence as judge in the commercial list in September and that it would create "real havoc" to those arrangements if he did not do so. As to the medical report received that day, his Honour said: "Well, it does paint a grim picture of Mrs Clarey, doesn't it?" He again asked how counsel would be prejudiced by her absence from the case. Counsel said it was Mrs Clarey who was prejudiced, by the very fact of her non-attendance. The medical reports posed the possibility, the judge said, that even if they recommenced after a month Mrs Clarey might suffer a relapse. He said "We can't just leave the case up in the air forever". He suggested they continue with witnesses, none of whom as it seemed to him, required the presence of Mrs Clarey to give instructions.

23 Mr North then raised the question of the Court's own power to appoint a litigation guardian under r.15.3. He submitted that if Mrs Clarey was incapable of giving instructions then it was incumbent on her advisers to have a guardian appointed, and he again proposed Mr Verduci as the appropriate person. Mr North suggested that the case continue until it was closed subject to the right to recall Mrs Clarey for "re-examination" (but in context, counsel meant further examination-in-chief) and that if medical evidence showed that she was too unwell to be cross-examined then he would decline to do so and the judge could then decide the case without the benefit of further cross-examination by himself or counsel for National Australia Bank.

24 Mr Arthur sought a four week adjournment in order to obtain a litigation guardian, but his Honour said that if that was persisted with then he would have to hear medical evidence. His Honour noted that if a litigation guardian was appointed and counsel could not show that he would be impeded by Mrs Clarey's absence then the judge would want the case to continue. He acknowledged that counsel had been co-operative by agreeing to further witnesses being called, and that no apparent problems had been caused Mr Arthur in dealing with those witnesses in the absence of his client. He noted that at some stage a new witness might present such a problem, which his Honour would need to address, but no such problem had arisen to date. Whilst it was unusual for a case to proceed without the presence of a party, his Honour said, "it's not as if its being heard without her being represented or her interests being looked after . . ."

25 No ruling was made on the adjournment application, and a further witness was called pending the hearing of medical evidence.

26 On Tuesday 7 August his Honour was told that a family member might agree to appointment as guardian the next day. Another witness was then called by counsel for the appellant.

27 On Wednesday 8 August a psychiatric social worker from Upton House gave evidence[3] that Mrs Clarey was able to give evidence about the signature of the transfer and other documents and might be able to be cross-examined on discrete topics, but not generally. His Honour declined to take that course. The case then proceeded over several days and on 14 August counsel for the plaintiff announced that, subject to re-calling Mrs Clarey, the case was closed.

28 On 15 August Mrs Clarey was, indeed, re-called, over objection from Mr North that she give evidence or be cross-examined without medical evidence as to her fitness. As he commenced what was accepted to be his right of further general cross-examination Mr North said that he was concerned about the demeanour of Mrs Clarey and the judge said he was troubled, too. The cross-examination had barely commenced when Mrs Clarey became upset and the judge asked defence counsel if they had any objection to Mrs Clarey being "excused" by him. They did not, and the witness withdrew.

29 On 16 August Dr Gelman gave extensive evidence to the court, stating that Mrs Clarey was severely depressed, was suicidal and required electroconvulsive therapy. She was on anti-psychotic medication, remained an involuntary patient and was "very severely ill" and had deteriorated with her recent appearance in court. He estimated it would be a month before she would be able to adequately recover. He said she was "extremely vulnerable and in a deteriorating mental state". He said she was incapable of giving informed consent to her treatment, but he agreed that she had been capable of speaking to her legal advisers and her family when they attended the hospital.

30 Dr Gelman said that he had consented to her being called to give evidence the previous day only because he had understood that her attendance would be very brief and she would be asked only a few questions[4].

31 Upon Dr Gelman being excused, Mr Arthur applied for an adjournment of four weeks. His Honour said that he had to be persuaded that it would be a denial of procedural fairness for Mrs Clarey not to be present and able to give instructions during the calling of evidence in the defendant's case, but Mr Arthur cited no authority in support of that contention. His Honour urged again that a litigation guardian be appointed so that a decision could be made about the sale of the property. To his Honour's suggestion that any adjournment might be on that condition, counsel said he could not get instructions to agree to that.

32 Mr North opposed an adjournment, pointing to the prejudice his client would suffer by the matter going off, possibly indefinitely. He said that there was no assurance that his client's witnesses would remain available. Counsel submitted that there was an allegation of fraud being made against Permanent, i.e. "a case of conspiratorial conduct and fraud in respect of an investment scheme". Mr North criticised the legal advisers for Mrs Clarey for not having called Dr Gelman at the outset, when Mrs Clarey was first admitted to hospital, and for not having attended to a litigation guardian. He submitted that they had ignored the proposal that Verduci take that role.

33 His Honour responded that, in fairness to Mr Arthur, he had said, at once, that "he was in difficulties" but on a witness by witness basis had accepted that the case could proceed. His Honour said that it was he, the judge, who suggested that Mr Arthur not proceed with his earlier adjournment application, pending the outcome of discussions with relatives about a litigation guardian. His Honour said it was now a convenient time to consider what was a new adjournment application, because the plaintiff's case had closed and he could therefore hear the foreshadowed no-case submission from National Australia Bank.

34 Mr North agreed with the judge that the presence of Mrs Clarey would serve two purposes, instructing counsel generally as the case proceeded, and instructing counsel about settlement prospects. Mr North submitted that her presence was unnecessary for the first purpose, and she could give instructions for the second without attending court, or else a litigation guardian could be appointed.

35 Mr Arthur countered that any prejudice to the defendants was outweighed by prejudice to his client by the trial proceeding in her absence. He said it was inappropriate that Mr Verduci be appointed guardian, given the defence suggestions that he had manipulated Mrs Clarey.

36 His Honour observed that the reality was that any adjournment would be for a long time, as it would take time to find dates when all parties could re-assemble. His Honour then heard the no-case submissions and advised that if he resolved that the case would proceed then he would adjourn the further hearing until the health of Mrs Clarey improved.

37 Several observations may be made about these events. In the first place, it is clear that his Honour, when faced with an extraordinary dilemma, endeavoured with scrupulous fairness to balance the needs of all parties. Secondly, no one contended to his Honour that the appointment of a litigation guardian was mandatory, as r.15.3 would suggest was the case; discussion merely focussed on the desirability of such an order. Thirdly, although the illness of Mrs Clarey manifested itself on 27 July 2001, only five days into the hearing, evidence continued to be called over a further 15 days, in her absence.

38 From the time of his first application for an adjournment, Mr Arthur continually agreed to his Honour's proposals that one witness after another be called. His Honour recognised, however, that whilst counsel acceded to that course he did so reluctantly, and at no stage did he abandon his contention that it was his client's right to be present and that the hearing ought stop until she was.

39 On the appeal counsel for Mrs Clarey contended that the appellant was denied procedural fairness by virtue of his Honour's decision to continue with the taking of evidence and with the hearing of the no-case submissions, when Mrs Clarey was absent, through no fault of her own.

40 A number of questions are raised under ground 1 one of the grounds of appeal arising out of the above events:

(a) Was the appellant denied procedural fairness by the refusal of an adjournment and, if so, what consequence ought flow;

(b) Was it appropriate to continue the proceedings without the appointment of a litigation guardian, and what consequences flow from failure to make such appointment?

Procedural fairness

41 The history discussed above demonstrates that there is no validity on the complaint made in ground 1 that the appellant was at any time denied the right to adduce evidence as to her physical and/or mental condition. The problem was that although the judge wanted to receive such evidence the appellant's advisers were not in a position to provide it any earlier or more comprehensively than they did. The real thrust of the argument presented by Mr Cook, counsel for the appellant on the appeal, was that the proceeding ought to have been adjourned when Mrs Clarey first became an involuntary patient, or, at the very least, when evidence was called from Dr Tune. Failure to then adjourn constituted a substantial miscarriage of justice, he submitted, and that miscarriage continued thereafter.

42 A party has a prima facie right to have his case heard in his presence and if by virtue of illness or misfortune he is shut out from the hearing "then common justice demands, so far as it can be given effect to without injustice to other parties" that the party ought be given the opportunity to be present: Grimshaw v. Dunbar[5], per Jenkins, L.J. The court has a duty to give a party a reasonable opportunity to present his or her case[6]. In Re Pochi and Minister for Immigration and Ethnic Affairs[7] Brennan, J. addressed the situation where a party was excluded from an administrative tribunal for the hearing of certain confidential evidence, although his counsel and solicitor were permitted to remain. His Honour held[8]:

"Serious though the exclusion of the public is, the exclusion of a party from a hearing which affects his interests is a much graver step. To exclude a party from such a hearing, even if his legal advisers are permitted to remain, is to deny him a full opportunity to cross-examine upon, to comment on or to controvert the case against him - a denial which, in the absence of statutory authority, would constitute an indefensible denial of fair treatment by the Tribunal. In Commissioner of Police v. Tanos [1958] HCA 6; (1958) 98 C.L.R. 383, at 395-6, Dixon, C.J. and Webb, J. said: 'For it is a deep-rooted principle of the law that before any one can be punished or prejudiced in his person or property by any judicial or quasi-judicial proceeding he must be afforded an adequate opportunity of being heard."

43 The entitlement of the party to be present at all times before an administrative tribunal has been held not to be absolute: the requirements of procedural fairness, and in particular what will constitute a fair opportunity for a party to present his case, must be judged by reference to the circumstances of the case, the nature of the inquiry, the subject matter of the inquiry, its statutory framework, and so forth[9]. Although the entitlement of a civil litigant to be present in a court, at all times, might be expected to be even more assured than the entitlement of a party before a tribunal, there must nonetheless be circumstances where the absence of a party would not constitute a denial of procedural fairness. It is, of course, a not uncommon situation that due to illness or competing commitments a party is not present on some occasions during a trial, the party being content to allow counsel to protect his or her interest. An absolute rule that civil proceedings must stop because one party was ill, whether or not the interests of the party would be prejudiced to any or any significant degree by the case proceeding, and notwithstanding the fact that counsel continued to represent the party, would cause great inconvenience to the courts and litigants, both those awaiting trial and those whose hearing was directly affected. No authority was cited in support of such an absolute rule. Counsel for the appellant conceded that the judge had a wide discretion as to granting or refusing an adjournment in such circumstances.

44 An appellate court will rarely interfere with the exercise of a discretion by a judge to refuse an adjournment application, but would do so if the refusal prevented a party from presenting his case altogether and in so doing caused an injustice[10]. In McColl v. Lehmann[11] Kaye, J. held that it is essential to a fair trial that that all parties are able to present their case as fully as necessary and within the limits of the law, but, as his Honour acknowledged, the circumstances had to be fully considered so as to determine whether the refusal did in fact constitute an injustice[12].

45 Counsel for Mrs Clarey contended that it was her right to be present so as to offer instructions, if required, but he did not demur to the suggestion that Mr Verduci had been and remained capable of assisting counsel in her absence. Nor did counsel identify any potential or actual problem faced by him in questioning the witnesses for the appellant whom he called in Mrs Clarey's absence. Although counsel's preference was to adjourn the further conduct of the proceedings, he did agree to the proposal of the judge that each further witness be called.

46 As Kirby, P. observed in Sydney City Council v. Ke-Su Investments Pty. Ltd.[13], the question whether the discretion has miscarried directs attention to whether the decision to refuse the adjournment was not exercised judicially or was exercised upon a wrong principle or resulted in a gross injustice. Given the conclusions we have reached on other grounds of appeal it is unnecessary for us to reach a concluded view as to whether the judgment and orders ought be set aside on the basis that the failure to grant an adjournment was in itself an error justifying that outcome. The narrative relating to the adjournment applications does, however, provide the backdrop against which the other grounds of appeal must be assessed, and, as will emerge, we have reached a firm view that by reason of the combination of factors highlighted under those grounds, the appeal ought be allowed.

Litigation Guardian

47 Ground 1 of the grounds of appeal does not raise a discrete complaint as to the failure of the appointment of a litigation guardian, but asserts that the absence of a litigation guardian was one factor justifying an adjournment of the case. In the course of argument on appeal, however, counsel for the appellant did contend that it was mandatory for the judge to have made an appointment and that the omission made the proceedings irregular. Mr Cook conceded that at trial counsel for the appellant had not made that submission to the judge.

48 Order 15 of the Supreme Court (General Civil Procedure) Rules 1996 deals with persons under a disability. Rule 15.01 defines "handicapped person" to mean "a person who is incapable by reason of injury, disease, senility, illness or physical or mental infirmity of managing his affairs in relation to the proceeding". Rules 15.02 and 15.03 read as follows:

"15.02 Litigation guardian of person under disability

(1) Except where otherwise provided by or under any Act, a person under disability shall commence or defend a proceeding by his litigation guardian.

(2) Except where otherwise provided by these Rules, anything in a proceeding that is required or permitted by the Rules to be done by a party shall or may, if the party is a person under disability, be done by his litigation guardian.

(3) A litigation guardian of a person under disability shall act by a solicitor.

15.03 Appointment of litigation guardian

(1) A person may be a litigation guardian of a person under disability if he is not himself a person under disability and he has no interest in the proceeding adverse to that of the person under disability.

(2) Where a person is authorized by or under any Act to conduct legal proceedings in the name of or on behalf of a handicapped person, that person shall, unless the Court otherwise orders, be entitled to be litigation guardian of the handicapped person in any proceeding to which his authority extends.

(3) Where after a proceeding is commenced a party to the proceeding becomes a handicapped person, the Court shall appoint a litigation guardian of that party.

(4) Where the interests of a party who is a person under disability so require, the Court may appoint or remove a litigation guardian or substitute another person as litigation guardian.

(5) Where a party has a litigation guardian in a proceeding, no other person shall act as litigation guardian, unless the Court otherwise orders.

(6) Except where a litigation guardian has been appointed by the Court, the name of a person shall not be used in a proceeding as litigation guardian of a person under disability unless there is first filed in the office of the Prothonotary [in County Court: Registrar] -

(a) the written consent of the person to be the litigation guardian; and

(b) a certificate by the solicitor for the person under disability certifying that he knows or believes that -

(i) the person to whom the certificate relates is a minor or is a handicapped person, giving the grounds of his knowledge or belief; and

(ii) the litigation guardian of the person under disability has signed the said written consent and has no interest in the proceeding adverse to that person."

49 The appointment as litigation guardian carries significant responsibilities, in particular placing the guardian at risk of an order of costs[14]. When no one was nominated as litigation guardian the judge was placed in a dilemma. As his Honour said, the litigation guardian could have played two roles, that of instructor for counsel and also as decision-maker as to settlement or on such issues as the sale of the property being a condition of an adjournment. There being no one willing to accept the role the issue, in effect, was put to one side. Counsel for the appellant was not himself making it an issue with the judge; it was counsel for the defendants who kept raising the issue.

50 Mr Arthur advised the judge that no member of the appellant's family was willing to be appointed litigation guardian, but he did not say that Mr Verduci was also unwilling to be so appointed. Counsel's expressed concern about him being appointed related to the potential prejudice which it might have caused the appellant in the eyes of the trial judge.

51 By r.15.03(1) a litigation guardian cannot be a person who has an interest in the proceeding adverse to the party under disability, but it was not suggested on either side that that debarred Mr Verduci. Indeed, Mr North invited his appointment. It seems very unlikely that his Honour would have drawn any adverse inference from Mr Verduci's appointment, had he been put forward. His Honour knew that Verduci had taken that role in a previous proceeding involving the appellant. Had he been appointed the property might have been sold, whereupon the opposition to an adjournment would have largely dissipated.

52 Mr North submitted to the judge that he had power of his own motion to appoint a litigation guardian, but he did not suggest whom his Honour might appoint. The Court would be slow to appoint an officer of the court to take that responsibility[15], and it was not suggested that that course be adopted. On appeal the Court queried whether the Public Advocate might have been appointed litigation guardian under the Guardianship and Administration Act 1986. On neither side, however, did counsel suggest that that was a realistic option and it is unnecessary for us to consider the matter further since it is not disputed that Mrs Clarey is now competent to handle her own affairs.

53 Although the Rule is cast in mandatory terms, Mr Cook did not contend on appeal that the failure to appoint a litigation guardian rendered the proceeding a nullity. It was, he agreed, a mere irregularity, and was capable of being cured by a subsequent order[16]. In any event, r.2.01 provides that non-compliance with the rules does not render the proceeding a nullity; it is a curable irregularity[17]. But despite the concession that the omission was a mere irregularity Mr Cook submitted that the omission nonetheless constituted so fundamental a denial of the appellant's rights as to mandate that the appeal be allowed. Counsel placed reliance on Murphy v. Doman[18], but in that case the critical factor leading to the order of a new trial was not the failure to have appointed a litigation guardian but the want of procedural fairness in the continuation of the trial in circumstances where the litigant had been denied a hearing of his case.

54 In that case the appellant had been the plaintiff in civil proceedings for conversion brought by him with respect to personal chattels stored in a shed, to which he believed he had rights as a tenant. He conducted the trial without legal representation and upon the completion of evidence the judge reserved his decision on the merits but invited the parties to provide written submissions as to damages. For some eight months thereafter the plaintiff failed to comply with directions and when the matter was listed for a further directions hearing the plaintiff, having produced a 350 page submission, said he would not tender it, as things were "getting too much" for him. It was later discovered that some four days before the directions hearing the plaintiff had been diagnosed as suffering a recurrence of a psychotic illness arising out of pre-existing schizophrenia. Several days after the directions hearing he was admitted as an involuntary patient to a psychiatric hospital, being released a month later whereupon he wrote to the judge seeking an extension of time to file his written submissions. The judge refused that application and delivered the judgment he had already prepared. The Court set aside the judgment.

55 Handley, J.A., who wrote the leading judgment (and with whom Tobias, J.A. agreed) held that by virtue of a similar rule to r.2.01 the failure to appoint a litigation guardian (called a "tutor" in the New South Wales rules) was an irregularity and did not constitute a nullity. Applying s.159 of the District Court Act, which gave discretionary power to the Court to set aside the judgment in whole or part if it saw fit[19], his Honour held that a new trial ought be held, concluding that the appellant had been "denied a proper hearing"[20] or "the substance of a hearing"[21].

56 Handley, J.A. held:

"47 I am not aware of any decision directly in point but relevant analogies are to be found in the cases. In Dick v Piller [1943] KB 497 the Court of Appeal held that a party prevented by illness from attending the hearing had a strong prima facie right to an adjournment. In Grimshaw v Dunbar [1953] 1 QB 408 that court held that a party who did not attend the hearing because of a mistake by a court official had, through no fault of his own, been denied a hearing and the judgment given in his absence had to be set aside.

48 Taylor v Taylor [1979] HCA 38; (1979) 143 CLR 1 and Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 are decisions to the same effect. They establish that where judgment had been given in the absence of a litigant who has been denied a hearing through no fault of his own and where his absence has been adequately explained, that litigant has a prima facie right to have that judgment set aside to permit a re-hearing on the merits."

57 His Honour held that the mental illness of the appellant meant that he was prevented from being "effectively heard" on the day when he was to tender his submissions. Meagher J.A. agreed that the appellant "had his litigation adjudicated upon without being heard"[22].

58 As Handley J.A. held, even if a want of procedural fairness was established an appellate court would not order a new trial where the inevitable result would be the making of the same order as that made below: Stead v. State Government Insurance Commission[23]. Thus, an appellate court would not conclude that there had been a miscarriage of justice, even when the failure of the party to appear was due to no fault of his own, if upon re-hearing no different result would be reached or if the re-hearing would work an irremediable injustice to the other side, one not capable of being cured by a costs order: Allesch v. Maunz[24]. Those exceptions did not apply in the case at hand, Handley, J.A. concluded.

59 Murphy v. Doman may be distinguished. In the first place, the rule with which the court was concerned was expressed in much stronger terms than in r.15. The rule provided that where a person became incompetent "no step in the proceeding shall be taken by or against the incompetent person until a tutor for him has been appointed by the Court". Secondly, the Court of Appeal in setting the judgment aside was exercising a discretionary power in circumstances where the incompetent party had conducted the case without a lawyer and where the court was entirely unaware that when he did so he was probably incompetent by virtue of mental illness.

60 Handley, J.A. held, that a court cannot ignore the prohibition against the continuation of a proceeding in the absence of a tutor once it "knows that a litigant in person is not capable of managing his own affairs"[25] (my emphasis). His Honour did not address the situation of a litigant represented by counsel. In Dick v. Pillar[26], which was cited by Handley, J.A., the Court held that an unrepresented litigant who, without fault, was entirely denied the opportunity to be heard had "a strong prima facie right to an adjournment", but it was not suggested in either case that it was an absolute right.

61 Trial counsel was unable to point to any actual prejudice which had been occasioned to the appellant by the case proceeding in the absence of the appellant or by the absence of a litigation guardian, save for the possibility that an adjournment might have been more likely had the subject property been sold by direction of a litigation guardian. In the conduct of the case, however, no prejudice was demonstrated by the absence of a litigation guardian. Both counsel and his instructing solicitor remained present throughout the case and counsel did not suggest that his ability to question witnesses or to make submissions was in any way hampered by the absence of his client or a litigation guardian.

62 We conclude that in the circumstances of this case the irregularity of non-compliance with the requirement in the rules for appointment of a litigation guardian did not, of itself, constitute a denial of procedural fairness to the appellant, nor otherwise constitute a miscarriage of justice which would justify the setting aside of the judgment and orders of the trial judge. In particular, the failure to appoint a litigation guardian was not a factor which by itself or when taken with other complaints as to procedural fairness necessitated that the hearing be adjourned.

63 We turn, then, to consider other grounds of appeal advanced on behalf of the appellant.

Hearing the no-case submissions

64 Appeal ground 2 reads:

"That his Honour was wrong in permitting the seventh defendant [Permanent] to lead a "no-case" submission at the time during the trial which it did."

65 In argument it was contended that the timing was wrong on three counts, first, that the appellant was not present at court; secondly, because the evidence in the appellant's case had not concluded; thirdly, because the defendants had not been required to elect not to call evidence.

66 When the no-case submissions were heard the appellant's evidence had not concluded; further cross-examination, and re-examination were yet to be conducted. Although her counsel left the possibility open, there seems to have been no further evidence-in-chief to be led from the appellant. Upon her brief return to the witness box the appellant had denied her signature on the transfer of land, had agreed that the signature on the caveat was her own and when shown a bundle of documents (Exhibit AA) said they all bore her signature. However, while it seems she had no further evidence-in-chief to give, the weight of her evidence when re-called on that occasion was, it seems, adversely affected by her obvious illness[27]. Mr Arthur plainly thought so, and suggested that further evidence in his client's case might be called from her after an adjournment (or perhaps from her daughter, if the appellant remained unwell), as to the signature on the transfer. To that suggestion his Honour said: "[Y]ou put Ms Clarey forward yesterday as being able to give evidence. She's given that evidence. Now it may be that I will rule that out, but why should you have a second go or a third go?"

67 Pressed as to what evidence remained to be called on his case counsel did not mention re-examination. Indeed, counsel did not contend that his Honour ought not hear the no-case submission before his client had been re-examined, nor did he say that he was proposing to conduct any re-examination. Counsel's failure to make that point ought not be overstated, however. There were undoubtedly many topics which had arisen in cross-examination which, in normal circumstances, might have been assumed to generate re-examination.

68 The no-case submission by Permanent was advanced on the basis that the evidence was insufficient to support a verdict against it on any of the several causes of action on which the appellant pleaded her case. In considering that question his Honour extensively reviewed the evidence and considered whether the allegations of fact on which the claims relied had been made out on the evidence.

69 His Honour said that in determining the no-case submissions he would attempt to avoid, wherever possible, making findings of fact on all of the issues raised by the parties "particularly issues going to credit" because the hearing might continue were he to reject the submission. He said he would confine himself to making findings on those facts necessary to be determined in order to decide the no-case applications.

70 His Honour identified the principles he should apply as being those stated in Protean (Holdings) Ltd. (Receivers and Managers appointed) v. American Home Assurance Co., so that he was able "to consider all questions which bear on the sufficiency of the evidence" and that he had "power to draw or decline to draw all inferences from the evidence given" on which the plaintiff might rely[28].

71 His Honour said that when assessing the evidence he would have regard to the fact that the appellant had not concluded her evidence, and for that reason he would assume without deciding that Mrs Clarey had intended to attend the settlement. His Honour also assumed, without deciding[29], that Mrs Clarey was correct in her denial that she had signed the transfer of land.

72 In Jones v. Dunkel[30] Windeyer, J. held that when assessing the sufficiency of the evidence to resist a no-case submission the question for the judge was "would you the judge on the evidence given, decide for the party against whom the submission is made". That approach was adopted by Young, C.J. in Protean who held that a negative answer to the question constituted a conclusion that "the evidence could not sustain a finding against the party making the submission"[31]. Thus, as Fullagar, J. observed in Protean, when a no-case submission is being heard on a trial before judge alone the judge is not necessarily restricted to the question whether the evidence could sustain a verdict for the plaintiff. Likewise, Tadgell, J., agreed that the submission of no-case may be made on the basis that while there is some evidence to support the plaintiff's case "it is so unsatisfactory or inherently unreliable or equivocal that he should find that the burden of proof resting on the respondent party has not been discharged"[32]. It was when the no-case submission really falls within that category that Tadgell, J. held that the judge must assess the quality of the evidence, and in so doing has power to draw or decline to draw all inferences from the evidence given on which the respondent party might seek to rely.

73 It was a no-case submission of this kind that was made in this case on behalf of Permanent, whereas the National Australia Bank no-case submission raised a pure question of law, as to whether any cause of action had been shown to exist.

74 The difficulty for the judge in evaluating the evidence for the Permanent no-case submission by reference to the question posed by Windeyer, J. was that he had to assume that no inference or finding of fact could be affected by any additional evidence which the appellant might have given had the no-case submission been delayed until after she had regained her health and concluded her evidence.

75 As we have said, Mr North in resisting an adjournment and urging that the plaintiff's case be closed (subject to her right to be re-called) and the no-case submission be heard, said that were the appellant to be too unwell to give further evidence upon her recall then he would have waived his client's right to further cross-examination. The judge might well have concluded that either there would be no further cross-examination or else if it was conducted it could not improve the appellant's case. Furthermore, the judge might have thought that any relevant topics for re-examination had either been covered when she was re-called for further evidence-in-chief or else that any further re-examination would have had little prospect of restoring the appellant's credit. Given that counsel for the appellant did not make any issue of the right of re-examination it would be understandable if the judge did not give much weight to that question. Indeed, at [11] in his judgment the judge said that counsel closed her case "Subject to Mrs Clarey's unfinished cross-examination", and his Honour repeated that statement later[33].

76 Whilst it is understandable that the judge might have so reasoned, he did not say that he had taken those matters into account and, in any event, we do not see how the judge could have been sure that the lost ground of the appellant's case could not have been re-gained upon her re-examination. Had the case been adjourned until after her health improved it may well have been that the appellant's account would have been less strident and unconvincing.

77 We recognise that the judge was placed in a difficult position, and was attempting to do justice to all parties. Furthermore, the judge had seen the appellant and all of her witnesses give evidence in her case. He had come to a firm view that her case was beyond rescue. Nonetheless, in our opinion, the judge, in the exercise of his discretion ought to have declined to entertain the Permanent no-case submission until after the appellant had concluded her re-examination. As we shall next discuss, however, that was not the only reason why, in our opinion, it was inappropriate for his Honour to have entertained Permanent's no-case submission at the time or in the circumstances in which his Honour agreed to do so.

Putting the defendants to their election

78 Under cover of appeal ground 2, counsel for Mrs Clarey submitted that the judge ought to have first required Permanent to elect not to call evidence if he was to hear its no-case submission[34].

79 His Honour accepted that the general rule was that a party ought to be required to make an election before making a no-case submission[35], but concluded that this case fell within the exception identified by Tadgell, J. in Protean Holdings[36] where adherence to the rule "would not serve the ends of justice or convenience". His Honour said that he based his decision not to require an election on the ground of "the efficient disposition" of the case. His Honour expanded on that:

"Already this case has occupied 22 sitting days and many more days would be required to complete the defendants' evidence. (Mr North stated that he would call possibly 12 witnesses). This will involve the parties in further expense were they required to take that course. I consider that it would not be in the interests of justice to put the defendants to their election now that I have heard and considered and formed firm views about the lack of substance in the plaintiff's case against these defendants. Notwithstanding the difficulties that may be caused by a successful appeal, I consider that the most appropriate course, in all the circumstances of this case, is to rule on the defendants' no case submissions without putting them to their election."

80 The decision not to put the defendants to their election was a discretionary one[37], and can only be overturned if clearly wrong or tainted by some error of law or fact[38]. As earlier stated, the no-case submission made by Permanent related to the sufficiency of the evidence, the test being, as Tadgell, J. stated it, "whether there is any evidence that ought reasonably to satisfy the tribunal of fact that the facts sought to be proved are established"[39]. When a no-case submission is made on that basis the judge in a civil trial is not obliged to accept the plaintiff's evidence at its highest, but is entitled to evaluate the weight of that evidence. As Tadgell, J. noted[40], the party moving the submission was entitled to have the judge draw or leave room to draw all reasonable inferences in its favour, but must accept the risk that because the evidence was limited to that which had been produced at the time of the submission the judge might decline to draw inferences in favour of the party making the submission. In Jones v. Peters Herring, C.J. held[41] that in the ordinary course it was most undesirable that a no-case submission would be made without an election having first been taken, but agreed to that course in that case because the submission was directed to questions of law raised on the pleadings, which were "quite unconnected with the sufficiency or insufficiency of the evidence".

81 The judge in this case (as we have said) was placed in a difficult situation, with a trial which had already occupied 22 days, after being estimated to take 8 days, and where he had come to a clear view that the appellant's version of disputed facts could not be accepted. In those circumstances we can readily appreciate why considerations of convenience (not just for the defendants, but also for other litigants awaiting hearings) would be given prominence. As Tadgell, J. observed, one reason for entertaining a no-case submission would be the prospect "of justly facilitating the disposition of the litigation"[42]. No doubt his Honour considered that having formed the view that the appellant's case was hopeless then he was also acting in her best interest, by bringing the case to an end as soon as possible.

82 Consideration of the avoidance of unnecessary costs to litigants and factors of case management are not irrelevant to the exercise of the discretion to dispense with an election, but such considerations must always be subject to the ultimate requirement of the attainment of justice[43]. What is required in that regard is not always easy to discern. His Honour carefully weighed many very significant competing considerations, and we recognise that the arguments advanced on appeal, and the emphasis given to them, are not identical to those addressed to his Honour at trial. Nonetheless, we have come to the conclusion that the judge fell into error in concluding that he ought not put Permanent to its election. (We accept that different considerations applied in the case of the National Australia Bank no-case submission, and his Honour was entitled to deal with that as he did).

83 Among the factors which, in our opinion, ought to have weighed in favour of requiring an election from Permanent the most important factor was the very fact that the evidence from the appellant had not concluded. Even if that fact did not necessitate an adjournment it bore strongly on the appropriateness of the requirement of an election. The fact that his Honour regarded the appellant's evidence to be unpersuasive must have been a factor in the decision not to put Permanent to its election. That deficiency was clearly identified in the judge's reasons for decision, but they were not delivered until eight months after his Honour reserved to consider his decision on the no-case submission and it might well have been that in the interim the appellant's mental health may have been restored [44].

84 When he was asked by counsel for Permanent to hear its no-case submission without requiring it to make an election, his Honour did not say that the apparent deficiencies of the appellant's evidence was one factor which motivated him not to require that an election be made. It would have been inappropriate to have taken that approach because the weight and sufficiency of the evidence was the very matter which had to be evaluated; the complexity of the issues of law and fact were reflected in the very substantial reasons for judgment delivered by his Honour on the no-case submission. In any event, any apparent deficiencies evident in the appellant's evidence had to be set against the fact of her later diagnosed mental illness.

85 Had the defendant been put to its election and elected to call evidence then by the time the appellant was re-called to conclude her cross-examination and re-examination it could only have been in circumstances where her mental health had improved[45]. In those circumstances it is at least possible that the judge's evaluation of the weight of her evidence might have changed. But her evidence in reply might itself have brought about the same consequence.

86 Whilst the convenience of Permanent was a relevant factor the fact remained that on the very important issues of actual and ostensible authority witnesses in its camp must have had relevant evidence to give, and the deficiencies of the appellant's evidence (plainly affected as it must have been by her mental illness) might well have assumed less importance when regard was had to that other evidence. Given that possibility, and given the fact that through no fault of her own the appellant was not present at court and had been unable to complete her evidence, the factors of convenience ought to have been accorded much less weight, in our opinion, than maintenance of the general rule that an election would be required before a no-case submission was heard.

87 Once again, the question arises whether the same result would have followed even if the judge had put Permanent to its election. We do not know whether it would have pursued the no-case submission, and that being so it can not be concluded that the result must have been the same. Cross-examination of defence witnesses might well have produced a different outcome.

88 In our opinion, this ground of appeal is made out with respect to the failure to call on Permanent to elect, and on this basis, too, the appeal ought be allowed.

Agency and estoppel

89 It remains to consider the substance of the no case submission. The questions which his Honour was required to decide were whether the evidence as it stood ought reasonably have satisfied him that the facts sought to be established by the plaintiff were established and whether any of the defences could be made out.[46] Understandably, however, in light of the way in which the case was conducted his Honour went almost immediately to the defences. It was accepted that the plaintiff did not receive the balance of the purchase price, and Permanent did not dispute that the transfer was a forgery.[47] The issues were whether Chalhoub or Middle East had the plaintiff's authority to receive the balance of the purchase price in the form of a cheque drawn payable to Middle East, and whether the plaintiff was estopped from contending that the transfer was a forgery.

90 It may be noted that the defences were not pleaded in those exact terms. Rather it was said in paragraph 27 of the Defence that:

"27. [Permanent] denies [that the payment of purchase price to Chalhoub or Middle East was not authorized by the plaintiff and did not constitute payment to the Plaintiff] and says further the Plaintiff's agent received all sums due to her arising from the settlement of the sale of the property."

And in paragraph 49 of the Amended Defence and Counterclaim it was alleged that:

"49. By reason of:

(a) the Plaintiff's admitted agency of MEI and/or Chalhoub;

(b) the settlement instructions

the Plaintiff is estopped from denying the contract of sale, the settlement, the discharge of NAB Mortgage and the conveyance, alternatively it would be unconscionable for the Plaintiff to seek in equity by reason of her own conduct to make the claims in this pleading.

"[T]he Plaintiff's admitted agency of MEI and/or Chalhoub" is a reference to the allegation made in paragraph 5 of the plaintiff's Further Amended Statement of Claim that:

"9. In or about June, 2000, the Plaintiff appointed MEI and/or Chalhoub to act as her agent by carrying out the conveyancing in and about the sale of the property ('the Chalhoub appointment')."

91 Nevertheless, his Honour's reasons record that Permanent submitted that Middle East or Chalhoub "had actual authority to attend settlement and collect the cheque for $269,970.58"[48] and that Permanent submitted that the plaintiff "... should be estopped from alleging that the settlement occurred without her agreement or approval and from claiming that the discharge from the NAB, the transfer from her to Mr Thomson, and the mortgage from Mr Thomson in favour of Permanent should not be registered".[49]

Actual authority

92 The judge said that he rejected any suggestion that Middle East or Chalhoub did not have actual authority from the plaintiff to receive the purchase price at settlement.[50] As his Honour saw it, the possibility was excluded by the fact that the plaintiff had allowed Middle East or Chalhoub to receive the deposit and to retain it pending settlement in Middle East's or Chalhoub's "trust account", and that by her facsimile of 5 September 2000 the plaintiff had directed Middle East or Chalhoub as to how the moneys to be received at settlement were to be disbursed (albeit, as his Honour put it, that the direction was not followed by Middle East or Chalhoub).

93 With respect we do not disagree with that part of his Honour's analysis. While the fact that the plaintiff authorised Chalhoub to receive the deposit does not necessarily imply that she authorised Chalhoub to receive the balance of the purchase price, it is a basis for inferring that there was such an authorisation, and the inference is supported by the contents of the fax of 5 September 2000. On the evidence as it stood therefore, it was open to find that the plaintiff gave actual authority to Chalhoub to attend settlement and to receive the balance of the purchase price on the plaintiff's behalf.

94 The judge next said, however, that he also rejected, or at least regarded as being irrelevant, the plaintiff's submission that Chalhoub did not have actual authority to receive the balance of the purchase price in the form of a cheque drawn payable to Middle East.[51] As we follow the judge's reasoning, his Honour reached that conclusion on the basis that Permanent was not required to pay the balance of the purchase price to the plaintiff, but only to act at the direction of the purchaser, and that it was up to the purchaser to enure that moneys were paid as required by the vendor. As his Honour expressed it:

"...Permanent was not itself paying money to Mrs Clarey. It was lending the money to Mr Thomson [the purchaser], and it paid the loan at his direction or the direction of his agent, Middle East and/or Mr Chalhoub, to the vendor, Mrs Clarey, or her agent. It just so happened that Mrs Clarey's agent, Middle East and/or Mr Chalhoub, was the same person as the agent of the purchaser/borrower. Further, Permanent did not require the authority of Mrs Clarey to pay Middle East. It acted at the direction of its borrower. It was up to the purchaser/borrower to ensure that the monies were paid as required by the vendor, as otherwise there would be no settlement. Unfortunately for Mrs Clarey, her agent, Middle East and/or Mr Chalhoub, accepted one cheque, and the NAB accepted the other cheque, proffered by or on behalf of Mr Thomson."

95 With respect we disagree with that part of the judge's analysis; for in our opinion it misses the point. We accept that Permanent was not required (in the sense of being legally bound) to pay anything to the plaintiff. As his Honour said, Permanent's legal obligations were to its client, the purchaser, and thus to disburse the loan funds as the purchaser directed. We also accept therefore that, if the plaintiff's claim against Permanent were for breach of legal obligation to pay her the purchase price, the claim would be bound to fail. But the plaintiff's claim against Permanent was not for compensation for breach of a legal obligation to pay her the purchase price. Her contention was that until she was paid the balance of the purchase price, by whom she did not care, the purchaser was not entitled to register the transfer and Permanent was not entitled to register any mortgage from the purchaser. And in point of principle that contention was correct.

96 A purchaser is not entitled to a transfer or thus to be registered as transferee until the purchase price is paid.[52] So long as a vendor remains unpaid, he or she has every right to prevent a purchaser's lender from being registered as mortgagee. A purchaser may satisfy the obligation to pay the purchase price by paying it either to the vendor or to a duly authorised agent of the vendor. But the purchaser cannot discharge the obligation to pay the purchase price by paying it to an agent who is not authorised to receive it [53] or to an agent in a manner in which the agent is not authorised to receive it.[54] In the result, payment to an agent who is not authorised to receive it or in a manner in which the agent is not authorised to receive it does not entitle the purchaser or his mortgagee to be registered. So, unless Chalhoub were shown to have had actual or ostensible authority to accept payment in the form of a cheque drawn payable to Middle East, or that the plaintiff was estopped from denying that he had such authority, she was entitled to resist registration. Permanent's legal obligations to the plaintiff were in that sense beside the point.

97 We also think that his Honour was, with respect, wrong in fact. As the evidence stood, it was not open to conclude that Chalhoub had actual authority to receive the balance of the purchase price in the form of a cheque drawn payable to Middle East Finance. Apart from anything else, the fax of 5 September 2000 expressly limited Chalhoub's authority to receiving the balance of the purchase price in the form of a bank cheque drawn payable to the plaintiff.

Ostensible authority

98 We regret to say that we disagree too with his Honour's reasons[55] for concluding that Chalhoub had ostensible authority to receive the balance of the purchase price in the form of a cheque drawn payable to Middle East. His Honour said that the plaintiff's submission that the existence of such ostensible authority had not been established:

"...ignore[d] the fact that agents often hold funds on trust for their principals and that the proposed lender/mortgagee tenders funds at settlement at the direction of the borrower/purchaser. As far as Permanent and Morbanc were concerned, no funds would have been advanced without the transfer from the vendor, Mrs Clarey, to their borrower, Mr Thomson, and the certificate of title being handed over. In return, Permanent and Morbanc were prepared to advance the funds as directed by their borrower."

In our opinion, there are, with respect, two deficiencies in that reasoning.

99 The first is that while some agents do hold funds on trusts for their principals, and it may be that it is in the usual or ordinary scope of their duties to do so, there was nothing in the evidence in this case to say that it is in the usual and ordinary scope of the duties of a "conveyancer" to hold funds on trust for their principals.[56] At common law a vendor's solicitor did not have authority to receive payment on behalf of the vendor,[57] and while the position was altered by statute[58] the statute does not apply to "conveyancers" who are not solicitors. The second is that, even if there were some basis in the evidence for concluding that "conveyancers" customarily hold funds on trust for their clients, there was nothing to indicate that it is in the usual and ordinary scope of authority of a "conveyancer" to receive the purchase price on behalf of a client in the form of a cheque drawn payable to the conveyancer.[59]

100 One is perhaps entitled to take notice of the fact that in cases where parties are represented by solicitors, a purchaser's solicitor will usually insist upon written authority from the vendor before paying the vendor's solicitor in the form of a cheque drawn payable otherwise than to the vendor. In part that is because it is a condition of many contracts for the sale of land that payments be made by cash or bank cheque. It follows that, in the absence of contrary authority from the vendor, payment by cheque drawn payable to the solicitor would not be payment for the purposes of the contract.[60] But the concern which breeds insistence on written authority from the vendor is informed also by the broader consideration that wherever it is proposed to make payment to a person who purports to be an agent of the person entitled to the payment of the money, the purchaser is under an obligation to ascertain the extent of the authority of the that person.[61]

101 In this case the conditions of sale are not in evidence, although the particulars of sale refer to the "General Conditions" and we are tempted to think that they were the conditions in Table A[62]. But in any event we see no reason to suppose that the degree of care required in dealing with a "conveyancer" should be any less than that customarily displayed when dealing with a solicitor; indeed the contrary. In our opinion, it was not open on the evidence as it stood to conclude that a "conveyancer" has customary authority to receive payment on behalf of the conveyancer's client and even less to conclude that a "conveyancer" has customary authority to receive payment on behalf the client in the form of a cheque drawn payable to the conveyancer.

Estoppel

102 It is of some significance that the only estoppel pleaded in the Defence was in this form:

"49. By reason of:

(a) the Plaintiff's admitted agency of MEI and/or Chalhoub;

(b) the settlement instructions

the Plaintiff is estopped from denying the contract of sale, the settlement, the discharge of NAB Mortgage and the conveyance alternatively it would be unconscionable for the Plaintiff to seek in equity by reason of her own conduct to make the claims in this proceeding."

The reference to the "admitted agency of MIE and/or Chalhoub" was to an allegation in paragraph 9 of the Statement of Claim that:

"9. In or about June, 2000, the Plaintiff appointed MEI and/or Chalhoub to act as her agent by carrying out the conveyancing in and about the sale of the property ("the Chalhoub appointment").

The Chalhoub appointment was partly oral and partly to be implied. In so far as it was oral it was contained in conversations between Guiseppe Verduci, the Plaintiff's husband and Chalhoub in or about July, 2000. In so far as it was implied such implication arose to give business efficacy to it. "

The reference to the "settlement instructions" was to the fax of 5 September 2000.

103 But as opposed to the pleading, it is apparent from the judge's reasons that the no case submission was advanced on the basis that the elements of the estoppel included not only the Chalhoub appointment and the fax of 5 September 2000 but also the following:

"... When settlement did not take place as soon as expected, [the plaintiff] tried to hurry it up. She was informed that settlement was to take place on several occasions and did not suggest that it should not proceed. Indeed, she complained when settlement failed to occur. So keen was she for settlement to occur that, when she was told that she should not have Middle East and/or Mr Chalhoub acting for her and was advised that it was not a good idea to have the same person acting for both vendor and purchaser, she refused to change for fear of upsetting the settlement. When told that settlement was to take place on 5 September 2000, she sent a facsimile to her conveyancing agent directing how the proceeds of sale were to be paid to her, although the conveyancing agent did not follow her instructions in this regard. But by giving these instructions, Mrs Clarey was representing that Middle East and/or Mr Chalhoub were her agent, with authority to participate in the settlement, even though she knew that she had not signed a transfer. Her agent, Mr Verduci, was told the time and place of settlement, but chose not to attend. When Mrs Clarey heard that settlement had taken place, her initial complaint was not that it had occurred but that she had not received her cheque from Permanent. All of this, Mr North submitted, meant that the forged transfer did not lead to a transaction being carried out "behind the back" of Mrs Clarey. She was clearly prepared to sign the transfer and would have done so had it been presented to her for signing before the settlement. Thus, her real complaint is that her conveyancing agent did not obtain payment of all of the purchase price from Mr Thomson before settling, and what it and/or he did receive was not paid to her. In fact, it was only the second matter that became the subject of complaint."[63]

"... Klement[64] establishes, in my opinion, the important proposition that a party may be estopped from denying the validity of a transaction, notwithstanding that the relevant document may be a forgery. It is a matter of considering all of the circumstances of the case. For the reasons advanced by Mr North, I consider that Mrs Clarey is estopped from denying that she is bound by the contract of sale with Mr Thomson, that the settlement occurred with her knowledge and approval, that the NAB discharged its mortgage over the Bulleen property, that she transferred that property to Mr Thomson and that he mortgaged it to Permanent. Therefore, Mrs Clarey's claim that she is entitled to restrain the registration of the discharge from the NAB, the transfer to Mr Thomson and the mortgage from Mr Thomson to Permanent must fail... "[65]

105 With all respect, we do not agree that the elements there identified were a sufficient basis to hold in favour of the estoppel alleged. Taking each of those factors in turn, we begin with the "Chalhoub appointment". In our opinion it was incapable of taking the matter any further than the question, already considered, of whether it is in the scope of the usual or ordinary authority of a "conveyancer" to accept payment of purchase price in the form of a bank cheque drawn payable to the conveyancer. As we have explained, it was not open on the evidence to conclude that a "conveyancer" has customary authority to receive payment on behalf of the conveyancer's client and even less to conclude that a "conveyancer" has customary authority to receive payment on behalf the client in the form of a cheque drawn payable to the conveyancer.

106 Counsel for the respondent referred to the decision of the High Court in Pacific Carriers Ltd. v. BNP Paribas[66] as demonstrating that a representation as to an agent's authority need not be express but may be implied from conduct, as by equipping an officer of a company with a certain title, status and facilities. By parity of reasoning, he submitted, it was open to conclude that even if the plaintiff had not made an express or precisely implied representation to Permanent as to the scope of Chalhoub's authority to act on her behalf, she had clothed him with the title of her "conveyancer" and armed him with conveyancing documents, such as the contract and s.32 statement, and left it to him to prepare a transfer for her for signature, and thereby impliedly represented to Permanent that he had authority to hand over an apparently executed transfer and to require in return that he be paid the purchase price in the form of a cheque drawn payable to Middle East. That submission is not convincing.

107 We accept of course that a representation as to authority may be implied from any number of circumstances, of which equipping an agent with a particular title, status and facilities is one, and arming the agent with a document which when signed bears the hallmark of authenticity is another.[67] But in our opinion the facts in this case are not such as to attract the operation of that principle. It is one thing, as in Pacific Carriers, to conclude that a relatively senior banking officer with express authority to sign documents in one capacity has ostensible authority to sign them in another capacity or, as in Crabtree-Vickers, to reason that a managing director with unlimited actual authority has ostensible authority to delegate powers to others. It is, however, quite another thing to conclude that the appointment of someone as a "conveyancer" and instructing him to arrange for the preparation of conveyancing documents and settlement, implies that he has authority to receive the purchase price in the form of a cheque drawn payable to himself. That was not so at common law in the case of solicitors, and in the absence of compelling evidence that it is so in the case of "conveyancers", we are unable to see why should it should be so.

108 Turning then to the fax of 5 September 2000, it strikes us that it was largely irrelevant to the issue of estoppel and that, insofar as it was relevant, it was opposed to the idea of an estoppel. In our opinion it was irrelevant because Permanent never saw it. Consequently, it did not represent anything to Permanent (let alone represent that "that Middle East and/or Mr Chalhoub were her agent, with authority to participate in the settlement").[68] In our opinion it was opposed to the idea of an estoppel - indeed directly contrary to the allegedly assumed state of affairs - because it was an express instruction that Chalhoub did not have authority to receive the purchase price in the form of a cheque drawn payable to himself. However many ways there may be in which a principal can clothe an agent with ostensible authority, an express prohibition is obviously incapable of being one of them.

109 Counsel for the respondent submitted that the "settlement instructions" should not be conceived of as limited to the fax of 5 September 2000 but should be taken as including the plaintiff's instructions, howsoever constituted, for Chalhoub to attend settlement on her behalf. It was submitted therefore that inasmuch as the plaintiff had armed Chalhoub with actual authority to organise the settlement, it should be found that she had thereby conferred ostensible authority on Chalhoub to direct the purchaser as to the manner in which the purchase price be paid.

110 That is not the way in which the case was pleaded, however, and in any event we do not think it persuasive. It simply does not follow from the fact that a party appoints an agent to arrange for settlement and receive payment in the manner provided for in the contract, that the party thereby confers ostensible authority on the agent to receive payment in a manner that is not provided for in the contract.

111 Counsel for the respondent also stressed that the plaintiff had left it to Chalhoub to arrange for preparation of the transfer, and had thereby conferred on him ostensible authority to produce a transfer at settlement, albeit forged, and to represent to Permanent that it was valid. He referred to cases such as Abigail v. Lapin[69] and Breskvar v. Wall[70] in which prior equities were postponed to subsequent equities upon the basis that the holders of the prior equities had contributed to false assumptions upon which the holders of the subsequent equities had acted when the subsequent equities were created.

112 We think that analogy is misplaced. Cases like Abigail v. Lapin and Breskvar v. Wall turn ultimately on the proposition that when an owner is found to have given another party the means of representing himself as able to convey good title, the owner will be estopped from denying that the other party did not have the owner's authority to convey the land. So in Abigail v. Lapin, the owners were estopped from denying the authority of their fraudulent lender; for they had transferred legal title in their land to the lender, although by way only of security, and as it was found they had thereby armed the lender with apparent authority to transfer the land to another. Similarly, in Breskvar v. Wall, the owners were estopped from denying that their fraudulent lender had authority to transfer their land to another; for as security for the loan they had armed the lender with both the duplicate certificate of title and a blank signed transfer which he later fraudulently filled up.

113 But the plaintiff in this case did not arm Chalhoub with the means of representing that he had authority to transfer her land to another. She did not execute any transfer, blank or filled up. Her evidence was that the transfer was a forgery and, as the judge noted, that was not disputed. Simply to entrust a duplicate certificate of title to another is not to arm him with the means of representing that he has authority to transfer the title and, even if it were, the plaintiff did not entrust the duplicate certificate of title to Chalhoub. The duplicate certificate of title was with her mortgagee, the National Australia Bank, and although the plaintiff may have instructed Chalhoub to arrange the settlement and to attend the settlement on her behalf, in her evidence she was adamant that she instructed Chalhoub that she was to be present at the settlement. She also said that because she intended to sign the transfer at settlement she did not believe that the settlement could proceed in her absence. And while the judge identified some considerations which he said cast real doubt on that evidence[71], in the end his Honour was prepared to assume that what she said was so.

114 At all events, we do not accept that the plaintiff's instructions to Chalhoub to prepare a transfer for her for signature at settlement and to arrange and attend on her behalf at settlement at which she was also to be present and at which the purchase price was to be paid to her in the form of a bank cheque drawn payable to her, may be taken without more to have conferred ostensible authority on Chalhoub to arrange and attend a settlement at which she was not present and to receive the purchase price in the form of a bank cheque drawn payable to Middle East.

115 That brings us to the last of the elements to which the judge referred as having constituted the estoppel, which was the notion that the plaintiff should be estopped from denying Chalhoub's authority to do as he did because she was advised that it was not a good idea to have the same person acting for both vendor and purchaser but that she so much wanted the settlement to go ahead that she persisted with Chalhoub as her conveyancing agent. This notion we also cannot accept.

116 Doubtless it is seldom wise to have the same person acting for vendor and purchaser. To a solicitor, and thus to Permanent which was represented by solicitors, so much should be obvious. But it does not follow that the risks associated with an apparent conflict of interest should be thought to expand the ostensible authority of a "conveyancer". If anything, the fact that there were such risks and that they would have been apparent to Permanent's solicitors, suggests that Permanent should have been on guard as to the exact scope of Chalhoub's authority.

117 As counsel for the respondent developed the proposition before us, however, it was that the plaintiff had reason to suspect that Chalhoub might act fraudulently, or at least contrary to the plaintiff's instructions, and that she allowed Chalhoub to proceed to settlement without warning Permanent that Chalhoub might act in that way. On that basis it was contended she is now estopped from contending that he did act fraudulently or contrary to her instructions. Counsel referred in support of that submission to the observation of the High Court in Pacific Carriers v. Paribas[72] that a holding out might result from permitting a person to act without taking proper safeguards against misrepresentation, and to observations of the Queensland Court of Appeal in Klement v. Pencoal Ltd[73] that a man may act so negligently by failing to warn another of the falsity of an assumption upon which he knows the other is acting or may act, that the former may be estopped from denying the truth of the assumption. In counsel's submission it was open to the judge to conclude that the plaintiff was estopped by her silence from denying that Chalhoub did not have authority to receive the purchase price in the form of a cheque drawn payable to Middle East and from contending that the transfer was a forgery.

118 In our opinion, that submission also faces difficulties at a number of levels. In the first place, no such estoppel was pleaded. As has been seen, the only estoppel averred in the Defence was one alleged to inhere in the Chalhoub appointment and the fax of 5 September 2000. That is to say, an estoppel by representation constituted by the appointment of Chalhoub as conveyancing agent and to attend at settlement. Such an estoppel is the gist of and, in this context, goes no further than, the doctrine of ostensible authority. It is plainly different to, and therefore does not contemplate, an estoppel which is the result of foreseeing the possibility of fraud or misconduct and standing by without warning a party whom it is known will or may be induced by that fraud or conduct to act to its detriment.

119 In the second place, although counsel for Permanent submitted that it was open to the judge to determine the no case submission on the basis of the way in which the case had been run, as opposed to the way in which it had been pleaded[74], it is hardly clear that the case was run on the basis that the plaintiff was alleged to have foreseen the possibility that Chalhoub might act fraudulently or otherwise contrary to her instructions and stood by knowing that Permanent might thereby be induced to act to its detriment. The only points in the transcript at which we can find some such proposition expressed are in the cross examination of the plaintiff and her husband Mr Verduci. In each case it was put that they had not made any attempt to contact Permanent to express their concerns about Chalhoub. We were not taken to any passage in the transcript, and we have been unable to find any, in which it was put to the plaintiff or Mr Verduci that their concerns about Chalhoub were of a nature which led them to believe or even regard it as a possibility that Permanent might be deceived by Chalhoub.

120 In the third place, while there was evidence that the plaintiff and Mr Verduci had developed some concerns about Chalhoub, the preponderance of evidence was that until 4 September 2000 (the day before settlement), their concerns were confined to irritation that Chalhoub had taken too long to achieve settlement and that there had been a number of occasions on which settlement had been scheduled to occur but then been postponed. We were not taken to any passage in the transcript and we have not found any where it was suggested that the plaintiff or Mr Verduci had any concerns about Chalhoub's honesty before 4 September 2000.

121 Mr Verduci's evidence on this point, which the judge does not appear to have rejected, and which in substantial respects was corroborated by evidence given by Mr Adicho (whose evidence the judge did not say that he doubted) and by Mr Nelson (whose evidence the judge said that he accepted), was that it was not until 4 September 2000 that Mr Verduci had any reason to doubt the professionalism of Chalhoub; and it was only when he spoke the next day to another finance broker, Mr Adicho, that he was told that Chalhoub was not to be trusted. Furthermore, having thus been warned, Mr Verduci spoke almost immediately to Mr Nelson, who was a solicitor, to arrange to terminate Chalhoub's instructions, only to be assured by Mr Nelson that he had acted for Chalhoub and that the plaintiff was in good hands with Chalhoub. Mr Nelson gave evidence in chief, which was not sought to be impeached in cross examination, that Mr Verduci had telephoned him on the morning of 5 September 2000 and asked him to contact Chalhoub and ascertain the true position, and that he had then told Mr Verduci that Chalhoub was someone for whom Mr Nelson had acted in the past and a person in whom Mr Nelson had quite full confidence. Mr Nelson said that in accordance with Mr Verduci's request he contacted Chalhoub to ascertain what was going on and ascertained that settlement was to occur later that day and as a result, as he put it: "I was myself reassured that everything was on the up and up and conveyed those thoughts to Mr Verduci." Thus reassured Mr Verduci, and hence the plaintiff, allowed the matter to remain with Chalhoub.

122 On the evidence, therefore, it was not a case of the plaintiff suspecting a fraud and taking the chance without warning Permanent. It was a case of the plaintiff staying with Chalhoub because of Mr Nelson's advice that she was "in good hands" with someone in whom Mr Nelson had "quite full confidence".

123 In the fourth place, one need hardly cite authority for the proposition that the informing principle of equitable estoppel is reliance upon an assumed state of affairs, created or encouraged by the party to be estopped, to the detriment of the other party.[75] Reliance is what makes departure from the assumed state of affairs unconscionable or unconscientious. Thus proof of reliance is essential. Furthermore, the question of whether departure from the assumed state of affairs would be unconscionable must be resolved by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption.[76] But because this matter was decided on the basis of a no case submission, there was no evidence from Permanent as to any reliance which it placed on Chalhoub or as to how it was, if it were the case, that Permanent was misled by Chalhoub into allowing the purchaser to pay over a cheque for the purchase price drawn payable to Middle East. And there was apparently no thought given to the reasonableness of Permanent in allowing itself to be persuaded by Chalhoub, if that were the case.

124 Counsel for Permanent submitted that where a purchaser pays over the purchase price to a fraudulent agent for a vendor in the belief that the agent has authority to receive the price in the form of a cheque drawn payable to the agent, it goes without saying that the purchaser suffers detriment which but for reliance upon the authority of the agent the purchaser would not have suffered. There was also an alternative submission, as we understood it, that it is to be assumed that the judge was in the best position to judge whether reliance was established, because he alone had seen the evidence for the plaintiff and had a perception of the "feel" of the case which no appellate court could achieve on the basis only of the transcript. We reject both submissions.

125 The first assumes that Permanent must have relied upon some sort of representation by Chalhoub that he had authority to receive the purchase price in the form of a cheque drawn payable to him. But at the point at which the judge decided the no case submission, other possibilities were open. For example, as far as one can tell, Permanent or at least its solicitors may have had reason to doubt Chalhoub's authority to take the price in the form of a cheque drawn payable to Middle East, and yet for whatever reason they chose to take the risk. As the evidence stands it is also possible that Permanent simply acted on what it was told by its client, the purchaser, who upon the evidence may or may not have been in league with Chalhoub, and without any thought for the authority of Chalhoub as conveyancer for the vendor. Both possibilities are reflected in the facts recorded in paragraph 41 of the reasons:

"41. ... According to the facsimile, settlement was anticipated to be at 2.30 p.m. on 4 September 2000... According to a...file note [of Permanent's solicitors], Ms Asling telephoned "Henny of Middle East Conveyancing" at 12.15 p.m. on the same day to advise that:

"we required a fax from her client advising that it is okay to drawer [sic] the balance of funds to their office."[77]

By facsimile also dated 31 August 2000, Ms Asling requested "Henny" at Middle East to provide:

"Authority from the borrower that the balance of funds can be made payable to your firm."

Although it is not clear, it would appear that Middle East responded to this request by faxing to [Permanent's solicitors] on 31 August 2000 a document purportedly signed by Mr Thomson authorising: 'that the balance of settlement be lodged with Middle East Investments Pty Ltd.'

Mr Thomson's signature was witnessed by Mr Chalhoub."

126 We have not been provided with a copy of the file note and to that extent our comprehension is limited. But subject to that restriction we observe that if the "your client" referred to in the note is the vendor, the note implies that Permanent's solicitors well understood the need to obtain express authority from the vendor, and thus that they were not acting in reliance upon any assumptions about the scope of Chalhoub's authority. As the matter stands there is no evidence as to whether Permanent's solicitors were provided with the authority which they sought and if not what happened to change their mind about the need for it. If on the other hand the "your client" is a reference to the purchaser, as may perhaps be suggested by the earlier fax of 31 August 2000, there is nothing to explain why, if Permanent were prepared to assume that Chalhoub had ostensible authority as conveyancer for the vendor to direct the manner in which the purchase price be dispersed, Permanent was not prepared to assume that Chalhoub had ostensible authority as conveyancer for the purchaser to give similar directions on behalf of the purchaser. The strong implication would be that Permanent did not make any assumptions about the scope of Chalhoub's authority as conveyancer for the plaintiff but was instead prepared simply to do as the purchaser directed. Interestingly too, that latter possibility squares more or less with the submission pressed on behalf of Permanent before the trial judge - and, and as has been seen, accepted by his Honour - that "Permanent did not require the authority of Mrs Clarey to pay Middle East."[78]

127 A further problem facing the submission is that it assumes that the purchaser was not aware that Chalhoub lacked the vendor's authority to take the purchase price in the form of a cheque drawn payable to Middle East. Yet Chalhoub knew that he lacked that authority - he had the fax of 5 September 2000 which expressly limited his authority to taking the balance of the purchase price in the form of a bank cheque drawn payable to the plaintiff - and other things being equal, Chalhoub's knowledge ought be imputed to the purchaser because Chalhoub was the purchaser's agent.

128 Counsel for the respondent suggested that Chalhoub could have defrauded the purchaser, in which event Chalhoub's knowledge could not be imputed to the purchaser. But there was no evidence of that, or at least none which the judge considered in determining the no case submission, and at most it could be a matter of inference. Counsel submitted that it was an inference that it was open to the judge to draw and that this court should not hesitate to draw. But we reject that contention also. Even allowing that adverse inferences may be drawn against a plaintiff on a no case submission - which, in a case of trial by judge alone, is a proposition said to have been sanctioned by the decision of the Full Court in Protean, but about which controversy remains [79] - it would not be appropriate to draw inferences about fraudulent conduct and those who had knowledge of it without a full consideration of all of the evidence and a reasoned analysis of its effect.

129 A third problem is the absence of any evidence as to how it comes about that a publicly listed registered trustee company represented by solicitors is induced to believe that a "conveyancer" has authority to receive the purchase price for the sale of land in the form of a cheque drawn payable to Middle East. Just what is it about the plaintiff's conduct that so encouraged Permanent to make that assumption that it would be unconscionable for the plaintiff now to depart from it? And what is it that demonstrates that it was reasonable for Permanent to make the assumption in any event? As far as we can see, apart from the suggestion that the plaintiff suspected the possibility of fraud and stood by without warning Permanent - and for present purposes we have eliminated that as a possibility - the only thing which the plaintiff is alleged to have done which might have led Permanent into making false assumptions about the scope of Chalhoub's authority was to appoint Chalhoub as her "conveyancer". But, as has already been observed, there was no evidence that it is in the usual and ordinary scope of a "conveyancer's" authority to receive moneys due to his client in the form of a cheque drawn payable to third party or himself, and there was no evidence even that Permanent or its solicitors believed it to be so. There is moreover nothing which establishes that Permanent acted reasonably in making the assumption that Chalhoub had such authority and, without expressing a concluded view on the subject, not a little to suggest that it acted quite unreasonably.

130 In our opinion, counsel's submission as to the judge's ability to perceive the evidence takes the matter little further. So to say is not to deny that the trial judge had an advantage over this court in hearing and being able to assess first hand the quality and effect of viva voce evidence and to assess the feel of the case. In a case like this it may also be allowed that the judge's findings and conclusions were a necessarily incomplete statement of his Honour's perception of the evidence and of the relative weight, minor qualification and nuance of which time and language do not permit an exact expression.[80] But the need for appellate respect for the advantages of trial judges in matters involving the credibility of witnesses does not derogate from the obligation of this court to perform its appellate function.[81] Accordingly, where error has been shown, we are obliged so to treat it.

Not open to find agency or estoppel

131 In our judgment it was not open on the no case submission to be satisfied that Chalhoub had either actual or ostensible authority to receive the balance of the purchase price in the form of a cheque drawn payable to Middle East or to be satisfied that the plaintiff was estopped from denying the existence of that authority.

Conclusion

132 The appeal should be allowed and the orders the subject of appeal should be set aside, and the matter should be remitted to the Commercial and Equity Division for a new trial to be had before another judge.

[1] Paragraph 9, as amended by order of the trial judge on 24 July 2002, that is, after the trial had commenced.

[2] On 21 June 2002 this Court refused to grant a stay of judgment, upon Permanent by its counsel undertaking to the Court that in the event of the appeal succeeding Permanent would not argue that any damages payable by it to Mrs Clarey would be less on account of Permanent having become registered as owner of the Bulleen property. The caveat which had been lodged by Mrs Clarey having been removed, the transfer and mortgage were registered and the property was subsequently sold by Permanent as mortgagee in possession on 6 November 2002.

[3] Her qualification to give this evidence was challenged by defence counsel.

[4] Dr Gelman was asked about processes under the Mental Health Act 1986 for the appointment of a guardian or administrator but nothing came of that discussion.

[5] [1953] 1 Q.B. 408, at 416, cited by Gibbs, C.J., in Taylor v. Taylor [1979] HCA 38; (1979) 143 C.L.R. 1, at 4.

[6] Cameron v. Cole [1944] HCA 5; (1944) 68 C.L.R. 571, at 589, per Rich, J.; Taylor v. Taylor [1979] HCA 38; (1979) 143 C.L.R. 1, at 8-9, per Gibbs, C.J., at 15-16, per Mason, J.; Sullivan v. Department of Transport (1978) 20 ALR 323, at 343, per Deane, J.; Pantorno v. The Queen [1989] HCA 18; (1989) 166 C.L.R. 466, at 472, per Mason, C.J. and Brennan, J.

[7] [1979] AATA 64; (1979) 26 ALR 247.

[8] At 270-271.

[9] See Mobil Oil Australia Pty. Ltd. v. Federal Commissioner of Taxation [1963] HCA 41; (1963) 113 C.L.R. 475, at 503-4, per Kitto, J; see too Kioa v. West [1985] HCA 81; (1985) 159 C.L.R. 550, at 584, per Mason, J.

[10] Maxwell v. Keun [1928] 1 K.B. 645, at 653, per Atkin, L.J.; Sydney City Council v. Ke-Su Investments Pty. Ltd. (1985) 1 N.S.W.L.R. 246, at 252; GSA Industries Pty. Ltd. v. N.T Gas Ltd. (1990) 24 N.S.W.L.R. 710, at 712-3, per Kirby, P., at 715, per Samuels, J.A.

[11] [1987] VicRp 46; [1987] V.R. 503, at 506.

[12] See, too, R v. McGill [1967] VicRp 79; [1967] V.R. 683, at 695-6; Humphrey v. Wills [1989] VicRp 42; [1989] V.R. 439, at 444-5; Sullivan v. Department of Transport (1978) 20 ALR 323, at 342-4; Opitz v. Repatriation Commission (1991) FCR 50, at 58-59.

[13] (1985) 1 N.S.W.L.R. at 252.

[14] Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 C.L.R. 62, at 113, per Williams, J.; Rhodes v. Swithenbank (1889) 22 Q.B.D. 577.

[15] Deputy Commissioner of Taxation v. P (1987) 11 N.S.W.L.R. 200, at 202, 204.

[16] Hubbard Association of Scientologists International v. Anderson & Just (No.2) [1972] VicRp 66; [1972] V.R. 577, at 579-581; Crockett v. Roberts [2000] TASSC 148, at [3], per Underwood, J.

[17] Not every case of non-compliance can be saved by the rule, however: See Hubbard Association, supra, at 578-9.

[18] [2003] NSWCA 249.

[19] Rule 2.01(2) is to similar effect.

[20] At [49].

[21] At [51].

[22] At [14].

[23] [1986] HCA 54; (1986) 161 C.L.R. 141, at 145.

[24] [2000] HCA 40; (2000) 203 C.L.R. 172, at 182-3.

[25] At [52].

[26] [1943] K.B. 497; see too Grimshaw v. Dunbar [1953] 1 Q.B. 408.

[27] His Honour said in his reasons, at [77], that the appellant "was clearly unwell (and should not have been recalled)".

[28] Protean (Holdings) Ltd. (Receivers and Managers appointed) v. American Home Assurance Co. [1985] VicRp 18; [1985] V.R. 187, at 239, per Tadgell, J.

[29] Reasons on no-case Ruling, at [81].

[30] [1959] HCA 8; (1959) 101 C.L.R. 298, at 330-1.

[31] [1985] V.R. at 215.

[32] [1985] V.R. at 239.

[33] See too [59], but at [111] his Honour said that the plaintiff's case was closed "subject to Mrs Clarey completing her evidence".

[34] No appeal is brought concerning the upholding of the no-case submission by National Australia Bank. In any event, without formally being put to its election by the judge its counsel had advised the judge that it intended not to call any evidence.

[35] Protean [1985] V.R. at 238, per Tadgell, J. In Humphrey v. Collier [1946] VicLawRp 60; [1946] V.L.R. 391, at 402, the Court held, when considering a jury trial, that the rule requiring that an election be made, ought be departed from only in exceptional circumstances.

[36] At 238.

[37] Jones v. Peters [1948] VicLawRp 56; [1948] V.L.R. 331, at 334, per Herring, C.J.

[38] House v. The King [1936] HCA 40; (1936) 55 C.L.R. 499, at 504-5.

[39] Protean [1985] V.R. at 240, citing Commissioner for Corporate Affairs v. Green [1978] VicRp 48; [1978] V.R. 505, at 514.

[40] At 240.

[41] At 333.

[42] At 237.

[43] See Rasomen Pty. Ltd. v. Shell Company of Australia Ltd. (1997) 75 FCR 216, at 224.

[44] The judge had in the meantime assumed duties as a judge in the very busy Commercial and Equity Division.

[45] When he adjourned to consider his ruling on the no-case submission his Honour told the parties that if he concluded that the no-case submission should not be upheld, he would grant an adjournment to the appellant rather than immediately proceed to hear further evidence.

[46] Protean (Holdings) Ltd (Receivers and Managers Appointed) v. American Home Assurance Co [1985] VicRp 18; [1985] V.R. 187 at 240.

[47] Reasons for judgment at [59].

[48] Reasons for judgment at [139].

[49] Reasons for judgment at [182].

[50] Reasons for judgment at [149].

[51] Reasons for judgment at [153] et seq.

[52] Foran v. Wight [1989] HCA 51; (1989) 168 C.L.R. 385 at 396.

[53] Maffey v. Hobart [1888] VicLawRp 156; (1888) 14 V.L.R. 880 at 883 and 885-6.

[54] Brien v. Dwyer [1978] HCA 50; (1978) 141 C.L.R. 378 at 387 per Barwick, C.J., at 395, per Gibbs, J. and at 408, per Aickin, J.

[55] Reasons for judgment at [160] et seq.

[56] Con-Stan Industries of Australia Pty. Ltd. v. Norwich Winterthur Insurance (Australia) Ltd. [1986] HCA 14; (1986) 160 C.L.R. 226 at 236 -328.

[57] Viney v. Chaplin [1858] EngR 688; (1858) 2 De G. & J. 468 at 482, 44 E.R. 1070 at 1075-76 at [479]-[480]; In re Bellamy and Metropolitan Board of Works (1883) 24 Ch.D. 387 at 395-6; Bell v. Rowe [1901] VicLawRp 84; [1901] 26 V.L.R. 511 at 517.

[58] Property Law Act 1958, s.69; Wikrama-Nayake, Voumard, The Sale of Land, 5th Ed. at [13 150].

[59] cf. Cousens v. Grayridge Pty. Ltd. [2000] VSCA 96 at [52].

[60] Petersen v. Moloney [1951] HCA 57; (1951) 84 C.L.R. 91 at 95.

[61] Voumard, The Sale of Land at [13.150]; Maffey v. Hobart [1888] VicLawRp 156; (1888) 14 V.L.R. 880.

[62] In the Seventh Schedule to the Transfer of Land Act 1958.

[63] Reasons for judgment at [181].

[64] Klement v. Pencoal Ltd [2000] Q.Conv.R. 54-546.

[65] Reasons for judgment at [186].

[66] [2004] HCA 35; (2004) 78 A.L.J.R. 1045.

[67] Crabtree-Vickers Pty. Ltd. v. Australian Direct Mail Advertising & Addressing Co. Pty. Ltd. [1975] HCA 49; (1975) 133 C.L.R. 72 at 80, referred to in Pacific Carriers at (2004) 78 A.L.J.R. at 1053.

[68] Cousens v. Grayridge Pty. Ltd. [2000] VSCA 96 at [45].

[69] (1934) 59 C.L.R. 58 at 72.

[70] (1971) 126 C.L.R. 376 at 389.

[71] Reasons for judgment at [146].

[72] (2004) 78 A.L.J.R. at 1054.

[73] [2000] Q.Conv.R. 54-546 at [22].

[74] Gould v. Mount Oxide Mines Ltd. (in liq) [1916] HCA 81; (1916) 22 C.L.R. 490 at 517; Dare v. Pulham [1982] HCA 70; (1982) 148 C.L.R. 658 at 664; Banque Commerciale SA (in liq) v. Akhil Holdings Ltd. [1990] HCA 11; (1990) 169 C.L.R. 279 at 297.

[75] The Commonwealth v. Verwayen (1990) 170 C.L.R. 394 at 443.

[76] ibid. at 443; Giumelli v. Giumelli [1999] HCA 10; (1999) 196 C.L.R. 101 at 123[42].

[77] Emphasis added.

[78] See footnote 51 above.

[79] Australian Securities Commission v. McLeod (1993) 40 FCR 155 at 157; cf Compaq Computer Australia Pty. Ltd. v. Merry [1998] FCA 968; (1998) 157 ALR 1 at 8-9; Rasomen v. The Shell Company of Australia Ltd. (1997) 75 FCR 216 at 228; and Cross on Evidence at [9120].

[80] Biogen Inc v. Medeva plc [1996] UKHL 18; [1997] R.P.C. 1; (1996) 36 I.P.R. 438 at 452; ACCC v. CG Berbatis Holdings Pty. Ltd. (2003) 214 C.L.R. 51 at 86 [83].

[81] Fox v. Percy [2003] HCA 22; (2003) 214 C.L.R. 118 at 127 [27].