The Present Case
36 The circumstances of the present case are considerably removed from those in which leave to withdraw admissions is typically granted. This is not a case where a legal advisor has mistakenly or inadvertently failed to dispute an allegation made by another party, drafted pleadings on a misapprehension as to the instructions given by the client, or abandoned a legal point without full consideration of the implications of doing so. Nor is this a case where a party has made an admission without an opportunity to ascertain the facts upon which the admission is founded. I do not suggest that these are the only circumstances in which leave to withdraw an admission will be granted. Far from it. The point is simply to draw attention to the unusual features of the present case.
37 Mr Jeans instituted proceedings in this Court in March 2000, claiming an order to set aside the guarantee in favour of the CBA. He sought relief on the basis that he had been induced to execute the guarantee by misrepresentations made on behalf of the CBA. The starting point for the relief he sought was the fact that he had executed a personal guarantee. Mr Jeans did not merely plead that fact. In his first affidavit, he asserted (as he acknowledged in his oral evidence at the trial) that he had indeed signed the personal guarantee. He repeated that assertion in subsequent affidavits sworn at a time when his legal representatives had a copy of the guarantee available for his inspection. (It was an agreed fact that a copy of the deed of guarantee bearing two purported signatures of Mr Jeans, was annexed to the affidavit of Mr Andrew Pavli (an officer of the CBA) sworn on 27 July 2001, and was also served on the applicants' legal advisers around that time.) In fact, Mr Jeans swore that he had executed the personal guarantee in three separate affidavits, executed over a period of three years.
38 It is hardly surprising that the pleadings filed on Mr Jeans' behalf proceed on the basis that he had signed the guarantee in his personal capacity. Mr Jeans had said so in his affidavits. His legal advisors (he has had a number over the course of the litigation) were entitled to assume that Mr Jeans, an experienced businessman, knew whether or not he had signed the guarantee as guarantor. They did not operate under any misapprehension as to their instructions.
39 In my opinion, Mr Jeans has had more than a fair opportunity to put forward any basis that may be available to him to challenge the validity or enforceability of the guarantee. Whether he signed the guarantee is a matter within his own knowledge. It is true that he did not have a copy of the guarantee before him when he swore his first affidavit (13 March 2000), but his legal advisors had a copy when he swore the second and third affidavits. Indeed, Mr Jeans' affidavit of 25 September 2002 exhibits a copy of the guarantee.
40 In substance what has happened in this case is that Mr Jeans, while in the witness box, identified an apparent discrepancy between the two signatures on the guarantee. That led him to change his previous evidence that he had executed a personal guarantee. The differences between the two signatures do not of themselves establish (as Mr Ireland acknowledged) that Mr Jeans did not sign the guarantee in both places. If leave is given to withdraw the admissions, it would open up a further factual issue that would presumably depend (like the other major factual issues in the case) on an assessment of the evidence of Mr Jeans and of that of other witnesses, including Mr Cleary. (I should make it clear that I express no view as to Mr Jeans' evidence at the trial. It is not appropriate that I should do so at a time when the evidence in the case is incomplete.)
41 Mr Ireland suggested that this should be regarded as a case where the issue now sought to be raised by Mr Jeans, if resolved in his favour, would be determinative of the outcome. However, this is not so. Mr Bell made it clear that if the applicants were given leave to withdraw their admissions and amend their pleadings, the CBA would not only dispute Mr Jeans' evidence, but rely on other contentions. These would include claims that Mr Jeans had entered into an oral contract of guarantee (Mr Jeans having accepted that he had always intended to provide a personal guarantee to the CBA) and that Mr Jeans was estopped from denying that his signature appears on the personal guarantee. Mr Ireland pointed to what he said would be difficulties facing the CBA in establishing either an oral contract of guarantee or the elements of promissory estoppel. It is possible that Mr Ireland's observations might ultimately have some force. Nonetheless, at this stage of the litigation, it is impossible to say that the CBA would not have an arguable case on the issues foreshadowed by Mr Bell. Accordingly, a grant of leave to the applicants would open up a number of fresh issues that would need to be explored in detail at the trial.
42 Mr Ireland acknowledged that if leave were granted to the applicants, an adjournment of the proceedings was inevitable, if only because the applicants needed to obtain expert handwriting evidence to support Mr Jeans' claims. The fact that an adjournment would be necessary is, in my opinion, a relevant factor to take into account in determining whether to grant leave.
43 This would not be the first time a hearing in these proceedings has had to be adjourned or vacated. The trial was first set down for hearing in early December 2002, for nine days. On 1 November 2002, a month before the trial was scheduled to commence, I vacated the hearing date on the applicants' motion. I did so reluctantly having regard, among other things, to the applicants' repeated breaches of directions of the Court in the course of these proceedings: Deangrove Pty Ltd (Receivers and Managers Appointed) v Commonwealth Bank of Australia [2002] FCA 1352. (Indeed, in an earlier judgment I referred to the "lamentable history of the litigation", a state of affairs virtually wholly attributable to the failure of the applicants to comply with directions made by the Court: Deangrove Pty Ltd (Receivers and Managers Appointed) v Commonwealth Bank of Australia [2002] FCA 1545, at [11].) In the judgment vacating the hearing dates, I recorded that I had made it clear to the then counsel for the applicants that they could expect no further indulgences in relation to an adjourned hearing.
44 I regard the need for an adjournment as relevant not because of any inconvenience occasioned to the Court (although the Court would be inconvenienced, not for the first time), but because yet another delay in these already protracted proceedings would work unfairness to the CBA. I appreciate that the CBA is a well-resourced bank. But, like other litigants, it is entitled to be treated fairly by its opponents. Yet another adjournment would expose it to a risk that some of the very large costs incurred in this case might prove to be irrecoverable, notwithstanding the indemnity thus far provided by Mr Jeans. Moreover, a grant of leave would require the CBA and one of its officers to address a claim for fraudulent and, indeed, criminal conduct that has never been hinted at in three years of litigation. In my view, having regard to the history of this litigation, it would be unfair to the CBA to grant leave to the applicants to withdraw their admissions and mount a case of fraudulent conduct against Mr Cleary and the CBA. There must come a point at which the interests of justice demand that a party to litigation take responsibility for his own conduct.
45 I have reached the conclusion that the applicants should not be granted leave to withdraw their admissions independently of whether they have provided an adequate explanation for the admissions having been made in the first place. In my opinion, however, the explanation provided is not satisfactory. As I have noted, whether Mr Jeans did or did not sign the guarantee in his personal capacity is a matter within his knowledge. Accepting that he did not scrutinise the guarantee so as to inspect what purported to be his signatures, the fact is that he swore three times that he did sign as guarantor. On two of those occasions, he had the guarantee available for inspection if he chose to do so. Mr Jeans is an experienced businessman who (as is not in dispute) understands the significance of having signed a personal guarantee. I do not regard his failure to check the authenticity of his signature prior to swearing two affidavits asserting that he had signed a personal guarantee as amounting to a satisfactory explanation for withdrawing admissions on factual questions central to the case on the third day of the trial.