Jeans v Commonwealth Bank of Australia Ltd

The Judgment on the Motion. 17 As his Honour noted, it was common ground that the relevant principles to be applied on the motion for leave were those dealing with an application to withdrawn an admission. His Honour summarised these principles. There was no suggestion on the appeal that his Honour applied the wrong principles or summarised them inaccurately. His Honour correctly rejected the approach taken in England in H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694 where it was suggested that, except in cases which gave rise to an estoppel, an admission might be withdrawn, at least if the other party was not prejudiced otherwise than in a way that might be cured by a costs order. Rather his Honour accepted the view advanced by Rogers CJ in Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 that a party should not be permitted easily to withdraw an admission as otherwise the making of an admission might become meaningless. Nevertheless there was a countervailing policy, his Honour accepted, that a party not be discouraged from making admissions out of fear that once given they might not be withdrawn. 18 The true position was, his Honour said, that there was no principle that admissions might or might not be withdrawn. Rather the Court had a broad discretion to weigh up all matters with the overall question being to ensure that there was a fair trial. His Honour accepted the principles stated by Santow J of the Supreme Court of New South Wales in Drabsch v Switzerland General Insurance Co Ltd (unreported, 16 October, 1996) as follows: ' 1. Where a party under no apparent disability makes a clear and distinct admission which is accepted by its opponent and acted upon, for reasons of policy and the due conduct of the business of the court, an application to withdraw the admission, especially at appeal, should not be freely granted…. 2. The question is one for the reviewing judge to consider in the context of each particular appeal, with the general guidelines being that the person seeking on a review to withdraw a concession made should provide some good reason why the judge should disturb what was previously common ground or conceded… . 3. Where a court is satisfied that admissions have been made after consideration and advice such as from the parties' expert and after full opportunity to consider its case and whether the admission should be made, admissions so made with deliberateness and formality would ordinarily not be permitted to be withdrawn… . 4. It will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts. Leave may also be appropriate where circumstances show that the admission was made inadvertently or without due consideration of material matters. Irrespective of whether the admission has or has not been formally made, leave may be refused if the other party has changed its position in reliance upon the admission… . 5. Following Cohen v McWilliam & Anor (1995) 38 NSWLR 476, a court is not obliged to give decisive weight to court efficiency, such that a party who wishes to defend its claim is entitled to a hearing on the merits, with costs orders being available as a means of compensating the other party for any costs thereby unnecessarily incurred or not fairly visited on the other party.' 19 His Honour considered, also, the effect of the decision of the High Court in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 which, contrary to the view of Rogers CJ in Coopers Brewery, rejected an emphasis upon case management as a ground for refusing an application to amend a defence, which application would lead to the vacating of a hearing date and an adjournment of the proceedings, and instead made it clear that the ultimate aim of the Court was the attainment of justice. Case management should not be allowed to prevail, their Honours said, over the injustice of shutting the applicants out of raising an arguable defence (see at 155). 20 Consistently with that judgment his Honour observed that, while case management was not an irrelevant consideration, it was neither decisive nor paramount in determining whether leave should be given to withdraw the admission. However, his Honour pointed out that the facts before his Honour were distinguishable from those in JL Holdings where the application was made six months before the trial date and not after the hearing had actually commenced. Further, as his Honour observed, the admission sought to be withdrawn was on a factual issue within the knowledge of the person making the admission. 21 His Honour then turned to weigh up the various factors relevant to the question of discretion. His Honour pointed out that, from the outset of the litigation, Mr Jeans had relied upon his execution of the guarantee. He was an experienced businessman and had been advised by competent lawyers. Mr Jeans had more than a fair opportunity to put forward any case open to him that he was not liable on the guarantee. His Honour noted that if leave were given it would open up new and quite different issues from those to that date presented for trial, namely whether Mr Jeans had in fact executed the guarantee (it being accepted that the mere difference in signatures did not itself establish this issue) and that these issues would no doubt include a defence by the bank (foreshadowed by Senior Counsel for the Bank) that Mr Jeans was liable under an oral agreement to guarantee or was estopped by his conduct from denying execution. The question of fraud on the part of the Bank and on the part of Mr Cleary would also require determination and would turn upon matters of credit. His Honour commented: '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.' 22 Other matters which his Honour took into account were: · An adjournment would be inevitable if leave were given. · There had been previous adjournments or orders made vacating previous hearing dates. · There had been numerous failures on the part of the applicants to comply with directions made and his Honour had when vacating a previous hearing date made it clear that no further indulgences would be granted. · Delay would work unfairness to the Bank. It would be exposed to large amounts of costs which might prove to be irrecoverable despite an existing indemnity given by Mr Jeans to Deangrove for its costs and supported by a guarantee given by Mr Jeans. · The Bank and Mr Cleary would need to address the claim for fraudulent (or criminal conduct) which claim had not been hinted at in the three years since the litigation had been instituted. · The interest of justice demanded that Mr Jeans take responsibility for his conduct in the litigation. · Mr Jeans had given no adequate explanation for making the admission in the first place. Such explanation as he had given, namely that he had not scrutinised the guarantee which originally was not in his possession, but which had been produced to his advisers on discovery, was not satisfactory. He had not chosen to inspect the guarantee. · The admission was only sought to be withdrawn after the hearing had continued for three days. · The Bank's cross-examination would not be prejudiced if leave was granted.

The Question on Appeal. 23 It was common ground between the parties that the tests to be applied in considering whether leave be granted to withdraw an admission were correctly stated by the learned Primary Judge. It was also common ground that the appeal, concerning as it did a matter of practice and procedure, could only succeed if the appellant showed that the learned Primary Judge made an error of principle such that his discretion miscarried and that the appellant had suffered prejudice: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; House v The King (1936) 55 CLR 499. 24 Counsel for the appellant submitted that his Honour's discretion miscarried on either or both of two grounds. 25 First, it was submitted that the learned Primary Judge had, despite disavowing doing so, taken into account his impressions on the credit of Mr Jeans made during the two days of cross-examination that had preceded the making of the motion. It is submitted that the leave to amend was refused because his Honour did not believe Mr Jeans when he said that the issue of execution of the guarantee had only arisen after the case had commenced. It is said that in doing so his Honour must be taken to have rejected the evidence given by Mr Jeans that the signature on the guarantee was not his signature. Otherwise, it was submitted the overwhelming importance of the fact of execution to the case would have required that it be permitted to be an issue. 26 Alternatively, or cumulatively, it was submitted that the question was one of balancing the prejudice to the parties. The prejudice to Mr Jeans was overwhelming as he was unable to advance the factual case he maintained. The countervailing prejudice to the Bank was not such as to outweigh the prejudice to Mr Jeans. It could be cured by a costs order and it had been accepted by counsel for Mr Jeans that such an order would necessarily follow. The need for an adjournment or the difficulty for the Bank in addressing a claim of fraud by one of its officers were not, it was said, sufficient reasons for refusing leave.

Reasons for Disallowing the Appeal. 27 In our view the appellant has not shown that the learned Primary Judge made any error in principle such as would justify allowing the appeal. 28 We were taken to the transcript of the proceedings in the period up to the hearing of the motion. It is unnecessary to summarise what happened. Suffice it to say that to the point of the hearing of the motion the cross-examination of Mr Jeans had involved matters of credit. Indeed, there were already grounds for his Honour to conclude that Mr Jeans' evidence should not be accepted. But it is another thing to say that his Honour took these matters of credit into account in dismissing the motion. 29 It is clear that his Honour was conscious of the fact that the credit of Mr Jeans and, for that matter, of Mr Cleary would be relevant matters in determining whether Mr Jeans had executed the guarantee and any defence on the part of the Bank that might be advanced thereafter. But it is also clear, indeed, his Honour specifically stated, that for the purposes of the motion he would leave aside matters of credit. It is clear from the judgment on the motion that his Honour accepted that the question of execution of the guarantee involved a triable issue. But there is nothing in the judgment which suggested that his Honour decided that issue let alone decided it on the basis of a finding of credit. It appears to have been accepted in the course of argument on the motion that his Honour would not be invited on the motion to make an assessment of Mr Jeans' credit but that the motion should be decided on the evidence as it stood, that is to say on Mr Jeans' evidence that the signature on the guarantee was not his signature. This is consistent with what his Honour said on the question of credit set out earlier in these reasons. 30 There is not sufficient reason to go behind what his Honour said on the matter nor is there anything in his Honour's reasons to suggest that his Honour in any way addressed the issue whether Mr Jeans had in fact signed the guarantee. Nor is there sufficient reason to suggest that his Honour was incapable of putting to one side any tentative view as to Mr Jeans' credit which he might have formed as a result of the cross-examination which had taken place prior to the making of the motion. 31 The second submission reveals no error of principle. Once it is accepted, as it was, that the question whether leave should be given was one which involved weighing all the relevant circumstances, the weight which might be given to any particular circumstance is a matter for the Primary Judge in the exercise of his discretion. 32 We accept that if Mr Jeans had been given leave to withdraw the admission he had made the question whether he had executed the guarantee would have become a very significant issue in the application. While it might not, as his Honour said, have ultimately been determinative, refusal of the motion clearly locked Mr Jeans out for all time to have this issue determined. Failure to grant the motion thereby created a prejudice to Mr Jeans that could not thereafter be remedied. While this is clearly a very important matter to take into account in deciding whether leave should be granted it is not the only factor. Other factors, such as the prejudice to Mr Cleary and the Bank in dealing with the allegation of fraud some five years after the event will also be relevant. So too is the time at which the application is raised and the lack of an adequate explanation for the fact that the matter was raised at so late a time. Ultimately, as his Honour realised, the question is one of 'the attainment of justice' as Dawson, Gaudron and McHugh JJ observed at 143 in JL Holdings. That involves balancing all relevant circumstances including the prejudice which must attach to one party or the other. No error of principle having been shown, the appeal must be dismissed with costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Hill, Madgwick and Conti.

Associate: Dated: 19 December 2003 Counsel for the Appellant: JM Ireland QC

Counsel for the Respondent: AG Bell SC and DA McLure

Solicitor for the Respondent: Commonwealth Bank Legal