Elder & Ors v Cameron & Ors [2007] NSWSC 984 | Case summary

The issue 1 On 9 July 2007, I heard an application by the plaintiffs for specific performance of an agreement. I made orders in favour of the plaintiffs. In particular, I ordered that, in accordance with a deed of indemnity, Malcolm Bruce Cameron, the first defendant, sign a withdrawal form for the payment of money invested in the names of Mr Cameron and the first, second and third plaintiffs (Elder & Ors v Cameron & Anor [2007] NSWSC 743). 2 Tricia Mary Crane was the second defendant in those proceedings. She did not appear at the hearing. Subsequently, she filed a notice of motion that the orders be set aside. Background 3 Mr Cameron was a partner of the law firm Cameron & Myers who acted for Ms Crane in relation to the deed of indemnity. Christopher Andrew Elder, the first plaintiff, was the solicitor for Ranchmoor Pty Ltd, the fourth plaintiff. Maurice John McCarthy, the second plaintiff, was the solicitor for Bedizen Pty Ltd, the fifth plaintiff. Stuart Graeme Holden Tipple, the third plaintiff, was the solicitor for Anthony John Morton and his wife, Pamela Morton, the sixth and seventh plaintiffs. Ranchmoor, Bedizen and Mr and Mrs Morton alleged they had lent moneys to Ms Crane. They held caveats over her property at Terrigal in New South Wales. 4 As is pointed out in my reasons for judgment at [9], Ms Crane proposed that the settlement of a contract for sale of her property should be allowed to proceed with the net proceeds, after payment of the registered mortgagee, rates and the vendor solicitor's costs and disbursements, to be held in an account in the joint names of the solicitors for the caveators and the vendor pending agreement on distribution of the proceeds or court order. At [11] is set out a letter of 1 May 2006 written by Ms Crane's solicitor to the solicitors for each of the other parties stating that Ms Crane had agreed to allow a release of all money held upon payment of her solicitor's fees in a reduced figure, the balance to be released for distribution between the other parties on the basis that a release was given to Ms Crane against any further claims. The solicitor sought a deed of release for execution by the parties. As is set out at [19], Ms Crane's solicitor, on 4 October 2006, confirmed that he would accept a reduced amount for fees. A deed of indemnity was executed by all parties except Ms Crane. 5 I found, at [36], that Ms Crane's solicitor had the actual authority of Ms Crane to make the offer on 1 May 2006. On her behalf he accepted a variation in the amount to be paid to him and the offer, as amended, was accepted by the other parties and they executed the deed of indemnity that set out their bargain. 6 Alternatively, at [37], I concluded that on 4 October 2006, Ms Crane, by her solicitor, made an offer in the terms contained in the final deed of indemnity in consideration for the acceptance of those terms by the other parties. They having already indicated their willingness to execute the document, that offer was accepted by execution of the deed by the other parties. Uniform Civil Procedure Rules 2005, r 36.15(1) 7 In her application to set aside the orders, Ms Crane relies upon the Uniform Civil Procedure Rules 2005, r 36.15(1). It is in the following terms: "A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith." 8 It was submitted that the orders should be set aside because they were made irregularly and against good faith. 9 This was because material on file or served on the plaintiffs was not brought to my attention during the hearing. By analogy with the duty of counsel in an ex parte application to advert to matters against interest, it was submitted that counsel was bound to bring that material to my notice. 10 In my view, it is a moot point whether counsel for a plaintiff, at a hearing of which notice has been given to a defendant who does not appear, is bound to advance the case of the absent defendant to the court. Counsel's duty is to advance the case of his client and to avoid misleading the court. The position is much like that when an application for judgment is made in default of a defence under the Uniform Civil Procedure Rules 2005, r 16.3(1)(a). 11 If a plaintiff is obliged, upon the failure of a defendant to appear at the hearing, to put the defendant's case to the court, an impossible burden would be placed upon the plaintiff. Allegations in affidavits that would have been subject to cross-examination had the defendant read them, would stand unchallenged before the judge. Affidavits upon which the defendant might have chosen not to rely would have to be filed and read by the opposing party. 12 In my view, it cannot be the duty of a party, or the party's counsel, to put the evidence of the opponent of which the appearing party is aware before the court when the opposing party fails to attend at trial despite notice having been given. 13 Furthermore, I am of the view that if counsel had referred me to the evidence of Ms Crane of which his clients were aware, it would not have altered the orders. 14 In her affidavit in support of her application to set aside the orders, Ms Crane said she had never told Mr Cameron or his partner Matthew Myers to agree to the deed on her behalf. On the contrary, she said that on a number of occasions she said she did not agree to the terms of the deed. That was already the subject of evidence before me. As I said at [20] of my reasons for judgment, Ms Crane refused to execute the deed of indemnity on the basis that she had other creditors and they should be treated equally. 15 Ms Crane referred to an affidavit sworn by Mr Cameron. It was not read before me. He said he disagreed with a contention in an affidavit of Mr Elder that was read before me. Mr Elder said that following settlement of the sale of Ms Crane's property no agreement could be reached between Ms Crane, Mr and Mrs Morton, Bedizen and Ranchmoor as to the division of the proceeds of sale as there was insufficient money to pay the debts of all of them. Mr Cameron said no agreement was able to be reached because Ms Crane disputed liability to Mr and Mrs Morton and did not agree with the amounts claimed by the other caveators. 16 Had that evidence been tendered before me it would not have changed the result. The disagreement to which reference was made by Mr Cameron preceded the critical letters of 1 May 2006 and 4 October 2006 and had nothing to do with the question whether Mr Myers had Ms Crane's actual or ostensible authority to write them. 17 Reference was also made to a statement in Mr Cameron's affidavit that his instructions from Ms Crane were that no agreement had been reached regarding the distribution of the moneys. That is inconsistent with the letters written by Mr Myers. He had a diary note in his file immediately before his letter of 4 October 2006 as is indicated in the reasons for judgment at [18]. No challenge was made to the letter or the diary note in Ms Crane's affidavits in support of her application. Had her assertion that no agreement was reached on the distribution of the moneys been raised before me, I would have resolved the conflict by reference to the contemporaneous diary note of Mr Myers who, rather than Mr Cameron, was acting for Ms Crane at the relevant time. The result would have been no different. 18 Since the submission that the orders were entered irregularly or against good faith was based upon the proposition that counsel owed a duty to draw the court's attention to the case of Ms Crane so far as the plaintiffs understood it, a proposition that I have rejected, I reject Ms Crane's reliance upon the Uniform Civil Procedure Rules 2005, r 36.15(1). Furthermore, I am of the view that if counsel had referred me to the evidence of Ms Crane of which his clients were aware, it would not have altered the orders I made and sufficient cause has not been shown to enliven the rule. Uniform Civil Procedure Rules 2005, r 36.16(1) 19 Ms Crane also relied upon the Uniform Civil Procedure Rules 2005, r 36.16(1). It is in the following terms: "The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order." 20 The orders had not been entered and the discretion of the court to set aside the orders under the Uniform Civil Procedure Rules 2005, r 36.16(1) was available. 21 But the public interest in maintaining the finality of litigation means that it is only in the rare case that the power will be exercised and then, usually, only where the applicant can show that by accident without fault on the part of the applicant, the applicant has not been heard. In Wentworth v Woollahra Municipal Council (1981-1982) 149 CLR 672 at 684, Mason ACJ, Wilson and Brennan JJ said: " The applicant, who now appears in person, seeks to argue a number of grounds in support of her application. However, as we had occasion to point out recently in State Rail Authority of New South Wales v Codelfa Construction Pty Ltd (1982) 150 CLR 28, the circumstances in which this Court will reopen a judgment which it has pronounced are extremely rare. The public interest in maintaining the finality of litigation necessarily means that the power to reopen to enable a rehearing must be exercised with great caution. Generally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard." 22 That passage was cited with approval by the majority in Autodesk Inc v Dyason (No 2) (1992-1993) 176 CLR 300 at 308, 317, 322. 23 On 30 May 2007, the solicitors for the plaintiffs wrote to Ms Crane informing her that the matter had been listed for hearing before me on 9 July 2007. On 4 July 2007, the solicitors wrote again reminding Ms Crane that the matter had been listed for hearing before me on Monday 9 July 2007 at 10.00 am. 24 The law list for 9 July 2007 set out below my name a matter for judgment at 9.30 am and the hearing of this matter at 10.00 am. Immediately below reference to this matter, was the heading for Brereton J with the matters he was to hear in court 1.2, Hospital Road, Sydney. 25 Ms Crane swore an affidavit that she prepared herself in which she swore that she had access to the law list on the internet and noted the heading for Brereton J immediately below her matter. She swore that she attended in court 1.2, Hospital Road. When his Honour took a break close to 11.00 am she spoke with an assistant about her matter and was told it was before me in court 8D of the Supreme Court Building. By the time she arrived in court 8D she found the courtroom empty. 26 Notwithstanding the reference to my hearing the matter in the letters of the plaintiffs' solicitors, I appreciate her confusion upon viewing the law list and her assumption that the matter was to be heard by Brereton J. I am prepared to treat Ms Crane as falling within the principle in Wentworth as an applicant who has shown that, by accident without fault on her part, she was not heard. 27 But that does not mean Ms Crane is necessarily entitled to a general re-opening of the case. As Brennan, Dawson, Toohey and Gaudron JJ said in Smith v New South Wales Bar Association (1992) 176 CLR 256 at 265: " It is said in Ritchie's Supreme Court Procedure that the power to review a judgment in a case where the order has not been entered will not ordinarily be exercised "to permit a general re-opening". As a general statement that is correct, both as to whether leave to re-open will be granted and, if it has been, as to the nature of the review involved. But it is a general statement only and, once a matter has been re-opened, the nature and extent of the review must depend on the error or omission which has led to that step being taken. Very little will be required in a case where, for example, all that is involved is a mathematical error in the calculation of some particular item of loss or damage. And, in the case of a factual error, the extent of the review will vary depending on whether the error goes to the heart of the matter or whether its significance is confined to some discrete subsidiary issue ." 28 In Autodesk at 328-329, Gaudron J expressed the view that the interests of justice did not require the judgment be vacated because it was not fairly arguable that the judgment involved a misunderstanding of the facts or misapplication of the law in relation to one or more of the issues on which the respondents wished to put further argument. 29 And in Patterson v Cohen [2005] NSWSC 740 at [7] - [9], Hamilton J refused an application to set aside an order where the additional evidence sought to be adduced was to the same effect as that which was already in evidence such that the same order would be made and there was no utility in setting aside the order. 30 To similar effect is the statement in Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 143 where the question was whether a new trial should be ordered where further evidence was unavailable at trial because of a significant failure by the successful party to comply with an order for discovery: "While it is not necessary that the appellate court be persuaded in such a case that it is "almost certain" or "reasonably clear" that an opposite result would have been produced, the question whether the verdict should be set aside will almost inevitably be answered in the negative if it does not appear that there is at least a real possibility that that would have been so." 31 I gave leave to Ms Crane to file in court and read an undated affidavit. Most of the material in it responded to affidavits read by the plaintiffs on interlocutory applications which affidavits were not read before me at the hearing. Most of the material in Ms Crane's affidavit is irrelevant to her current application. 32 She said that the deed of indemnity was drawn up by the plaintiffs without her knowledge, consent or agreement. She did not agree to it and had not seen it until recently, after the commencement of these proceedings. That statement falls into the same category as the statement in Mr Cameron's affidavit. I would have rejected it for the same reasons. 33 Ms Crane said there was no reason a court should force her to sign a document that gave all the money she had in the world to three creditors and only three of all her creditors. That submission does not address the central issue, whether Mr Myers had the actual or ostensible authority of Ms Crane to enter into the alternative contracts described in my reasons for judgments. 34 Ms Crane attached to her affidavit a long letter in response to one from Philip James Thomas Stroud, the solicitor for the plaintiffs, that was not in evidence. Again, most of the letter is irrelevant to Ms Crane's current application. It repeated her assertion that the funds should be made available to all her creditors, not just those three unsecured creditors who had been able to place caveats on her home. 35 It was submitted that the question of Mr Myers' authority to bind Ms Crane should not have been aired at the hearing because Ms Crane was not present. But the undated affidavit read in her behalf, does not challenge Mr Myers' authority. Nor was there any evidence that she conveyed to Mr Myers or Mr Cameron before the letters of 1 May 2006 and 4 October 2006 her position that the funds should be distributed amongst all her creditors and not just the parties to the deed. Prior to the hearing, Ms Crane did not dispute, by affidavit or otherwise, that her solicitors lacked the authority to write the two letters. Ms Crane had ample opportunity to put evidence before the court challenging Mr Myers authority. She did not do so. It was submitted that Ms Crane was not legally represented and the orders should be set aside to allow her to challenge that authority. No factual basis for that challenge was put forward on Ms Crane's behalf. All that was said was that there might be correspondence in a file that should be aired at a hearing on the merits. In my view, that is an insufficient basis to justify a general re-opening of the matter. 36 A copy of a letter from Ms Crane to Mr Myers of 6 December 2006 was tendered. It took issue with the letter of 4 October 2006, stating that Ms Crane had not agreed to the release of the moneys on the terms suggested by the parties. Had that letter been tendered at the hearing it would have been necessary for me to resolve the conflict between Mr Myers and Ms Crane. I would have reached the same result. As I have said, in resolving that conflict I would have placed weight upon the diary note of Mr Myers as contemporaneous support for his version of the events. 37 Reference was made to that portion of Ms Crane's letter to Mr Stroud where she said she had a number of conversations with Mr Cameron and he assured her that settlement would not take place without her knowledge. But that was in reference to a loan by Ranchmoor negotiated by her ex-partner to which she made reference earlier in her letter. 38 It was submitted that Ms Crane was in partnership with Mr and Mrs Morton and before they left the partnership a debt was incurred. It was submitted that there was a real question, not only as to the distribution of the funds, but also whether Mr and Mrs Morton were liable for that debt. It was submitted that that was another point upon which Ms Crane would like to get further evidence. This is an application to set aside orders. If Ms Crane wished to investigate that issue, she should have done so before the hearing. Furthermore, whether Mr and Mrs Morton were in partnership with Ms Crane when a debt was incurred is not germane to the question whether there was a concluded contract for the disbursement of the funds. 39 It was submitted that Mr and Mrs Morton, because they had fiduciary obligations, lacked the standing to be plaintiffs in these proceedings. I do not understand that submission. 40 It was submitted that there may be creditors of the partnership that Ms Crane was entitled to investigate. I reject that submission. It is not a question of what Ms Crane would like to investigate. The question is whether the orders made on 9 July 2007 should be set aside. 41 To like effect was the submission that the fourth member of the partnership was her ex-partner and there were issues that might need to be enlivened in relation to him. 42 It was submitted that the indebtedness of Ms Crane was a live issue and it might be that she wished to enliven that issue in these proceedings. That submission suffers the same fate as those already mentioned. 43 It was submitted that by comparison of Ms Crane's signature on one deed with that on another, the signature on the latter was, potentially, not hers. These were deeds by which loans were established. They are irrelevant to the matters in issue in these proceedings. Conclusion 44 In the result, none of the material to which reference was made would, if tendered and allowed as relevant evidence, have caused me to arrive at a different conclusion for the reasons set forth above. 45 Ms Crane has failed to establish, in my opinion, a proper basis for setting aside the orders of 9 July 2007. 46 I dismiss her notice of motion and order her to pay the respondents' costs.

Elder & Ors v Cameron & Ors

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Judgment (12 paragraphs)

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Cases Cited (5)