SHOULD LEAVE TO APPEAL BE GRANTED?
20 The question whether leave to appeal should be granted falls to be determined according to the criteria set down by the Full Court in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. First, whether the impugned decision is attended with sufficient doubt to warrant its reconsideration. Secondly, whether substantial injustice would result if leave were not granted, supposing that the impugned decision was wrong.
21 The applicant, by his submissions, contends that:
"9. … The proposition that [the second respondent] and/or Mr Ariss could have been expected to contend for, if present before the [Federal Magistrates] Court, namely, that they or one of them was the true owner of the jewellery, was clearly articulated as was the basis upon which they might seek to rely to establish such a claim:
(a) there was express disclosure that [the second respondent] and Mr Ariss were persons named as insureds in relation to the jewellery;
(b) there was express disclosure that the bankrupt gave evidence that when she asked her husband (ie, Mr Ariss) for the jewellery, he said the jewellery was the property of [the second respondent] and that she could not have it;
(c) there was express disclosure that when the husband had been examined pursuant to s81 of the Bankruptcy Act, he asserted that he had given certain items of the jewellery to one or both of this daughters, consistent with ownership of the jewellery by him or [the second respondent];
(d) there was express disclosure that the bankrupt expressed the opinion that some of the house contents, the subject of the same policy of insurance, might be owned by [the second respondent] although, like the jewellery, such items of contents were not disclosed as an asset in the balance sheet of [the second respondent].
10. In order to determine whether or not there was 'material'
non-disclosure, it is necessary to have regard to the evidence of the bankrupt as a whole. It is asserted that the fact she had earlier given evidence contrary to the proposition the jewellery was hers was not disclosed. What the transcript of the evidence given by the bankrupt on 22 December 2005 discloses is that she did on occasion give contrary evidence. That is, on occasion she gave evidence that she thought that the jewellery was either that of Mr Ariss or [the second respondent]. However, what is critical is that she was examined as to why she might hold to that view. She said in evidence that she held that view for two reasons, namely:
(a) because those persons were named as insureds in relation to the jewellery; and
(b) her husband had told her that the jewellery was the property of [the second respondent] or of himself.
Both considerations which had led [the bankrupt] to on occasion state that the jewellery might be the property of [the second respondent] or of Mr Ariss were disclosed on the ex parte application, as was the fact there was evidence consistent with such potential claims.
11. The cases establish that, on an application made ex parte, there must be disclosure of material facts. The material facts which were required to be disclosed here were:
(a) that [the second respondent] and Mr Ariss were persons who were named as persons having an insured interest in relation to the jewellery. This was disclosed in the King … affidavit and the relevant insurance documents were exhibited;
(b) that Mr Ariss, currently the sole director of [the second respondent], held the view that the jewellery in question was either his or [the second respondent's]. This was also disclosed.
12. The best evidence that Mr Ariss and/or [the second respondent] would claim to be the owners of the jewellery, and the basis of that claim, was before the Federal Magistrates Court. There was direct evidence, of which the Court was informed, that Mr Ariss asserted the jewellery was his or [the second respondent's] and, on that basis, refused to return it to his wife. In those circumstances, the fact there was additional evidence from the bankrupt that, on the basis of the insureds' interest and on the basis of what her husband told her, she believed that the jewellery may be his or [the second respondent's] jewellery, was not material. …
…
17. The King … affidavit disclosed that [the second respondent] or Mr Ariss would assert an entitlement to the jewellery. The … Magistrate knew that was the case they would make and knew there was documentary evidence in support of that case, at least as to an arguable insurable interest, notwithstanding none of the jewellery appeared on the balance sheet of [the second respondent]."
22 The proposition in the first sentence of para 11 in the passage quoted at [21] is correct. A party seeking an order ex parte must disclose all material facts. However, as Campbell CJ said in Re South Downs Packers Pty Ltd [1984] 2 Qd R 559 (Full Court) at 560:
"What is material in any case depends, in the first instance, upon the nature of the case sought to be made out and, to that end, must be viewed in the context of all the relevant circumstances."
23 The applicant has taken far too narrow a view of what constituted material facts that should have been disclosed to the Magistrate. His submissions quoted at [21] are, to a large extent, beside the point. A reasonable person in the Magistrate's position who had the benefit of the transcript of the bankrupt's second examination (or an accurate summary thereof) would readily discern that the bankrupt was saying that though she did not own the jewellery in question, and that it was owned by the second respondent, she thought she was "emotionally" or, indeed, morally entitled to it. Mr King's affidavit did not disclose this to the Magistrate. That was a serious omission for an affidavit that purported to give an accurate account of the evidence given by the bankrupt at her second examination. Nor was that omission rectified before the Magistrate.
24 In Milcap Publishing, Davies J said at 35:
"When an ex parte order is sought, the person seeking the order must be frank and disclose to the court all the matters which, if put before the court, might have an effect upon the court's decision. The facts that should be disclosed go both to matters of liability and matters of discretion. If a fact is material in that it would be a matter to be taken into account by a court in the making of the decision to grant an injunction or in the formulation of an order that is to be made, it is a matter that ought to be disclosed."
(The emphasis is mine.) I think it clear that that test has been satisfied. A reasonable person in the Magistrate's position would have taken into account what the bankrupt was in fact saying at her second examination in deciding whether or not to grant the mandatory injunction. Undoubtedly, that information might have affected that decision.
25 The applicant contended that the Court should apply the test in Re South Downs Packers. In that case, Connolly J said at 566 that "[a] non-disclosure will not be material unless it be likely to influence the court in acceding to the application". (The emphasis is mine.) Though I prefer to follow Milcap Publishing as it is a decision of this Court, the application of the test in Re South Downs Packers would not lead to a different result.
26 The applicant also contended that the Magistrate erred when he said at para 40 of his reasons (see the second passage quoted at [12]) that "the court was not … provided with all the evidence which was then known to either the deponent and/or his client". (The emphasis is mine.) His Honour posited and said he would apply the tests found in Thomas A Edison and Milcap Publishing. A fair reading of his reasons discloses that, notwithstanding the language of para 40, the Magistrate correctly applied those tests. At para 35, his Honour said that the respondents had contended that a comparison between Mr King's affidavit and the transcript of the bankrupt's second examination showed that the court "was clearly misled in relation to what could be described as a crucial issue" leading to the granting of the mandatory injunction. The "crucial issue" to which his Honour referred is that highlighted at [23]: that the bankrupt had conceded that she did not own the jewellery in question. The Magistrate's reference to "all the evidence" was a reference to all the evidence going to the "crucial issue". The comparison shows that the concession was not disclosed by Mr King's affidavit. The Magistrate's reference to "all the evidence then known" (emphasis added) shows that the Magistrate was engaging in the comparison. That is further shown by his statements that the material before him on 23 December 2005 was:
· "incomplete and … had the effect of misleading the court in relation to the true state of the evidence which had been given by the bankrupt on the previous day" (para 44); and
· "inadequate and misleading … in relation to the full extent of the evidence given concerning a crucial issue of significance to the court's deliberation, based upon the … evidence of the previous day's … examination" (para 48).
(The emphases are mine.) Further, the Magistrate said at para 43 that:
"It seems logical to me and irresistible that if the bankrupt or indeed if the First Respondent had been present upon the hearing of the application by this court on 23 December 2005, then the complete extract of the bankrupt's evidence would have been referred to along with other extracts during the course of the examination before the Registrar, indicating that a concession was made by the bankrupt that the jewellery was owned by the Second Respondent, even though the bankrupt believed the jewellery had been a gift and that it belonged to her or, to use her words, was 'mine'."
In each of the two paras preceding the one I have just quoted, the Magistrate said that the obligation of a party seeking an order ex parte was to bring forward all material facts. Clearly, the Magistrate was of the opinion that all material evidence on the crucial issue equated with all the evidence on the crucial issue. He was correct in that opinion.
27 Finally, the notice of appeal referred to at [3] says that the Magistrate erred in "failing to have regard to, or to apply, the decision in Re Bayliss (1987) 15 FCR 167 to which he was referred, to the case before him". Though the applicant's submissions mention Re Bayliss, the applicant's counsel did not mention it before me. In any case, I cannot see how Re Bayliss could have advanced the applicant's case as it stands for a proposition of a highly general nature. I can see no circumstance in this case that makes that proposition of especial significance.
28 The Magistrate's decision is not attended with sufficient doubt to warrant its reconsideration. I do not think it necessary to go on to consider whether substantial injustice would result if leave were not granted, supposing that the Magistrate's decision was wrong. The two limbs of the test in Décor Corporation cannot be considered in isolation from one another: see Décor Corporation at 398-399. The prospect that an appeal, if leave were granted, would be successful is so remote that it would be artificial to suppose that the decision below is wrong. See Applicant VMAO v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 427 at [22].