Lawrence v Gunner

The notices of motion

1. In chronological order the notices of motion are as follows:

• first, a notice of motion filed 2 November 2015, by which Mrs Gunner, the respondent to the appeal, sought an order for summary dismissal of the notice of appeal filed 8 October 2015, pursuant to the UCPR, r 13.4;
• secondly, a further amended notice of motion, filed 24 November 2015, by which the applicants, Mr and Mrs Lawrence, sought leave to file an amended notice of appeal; and
• thirdly, a notice of motion, filed 22 January 2016, by which the applicants, Mr and Mrs Lawrence, sought a range of orders. These included: • a variation of the existing stay ordered by this Court on 15 October 2015 (orders 2 and 5); • the joinder of additional respondents to the appeal (orders 3 and 5); • the dismissal of Mrs Gunner's notice of motion filed 2 November 2015 (order 6); • the striking out of particular paragraphs of the respondents' amended cross-claim filed 17 January 2014 (order 4); and • leave to issue five subpoenas (orders 9 - 13).

1. Other orders sought in that motion were: the remittal of the judgments of Stevenson J to be paginated with references to the evidence and affidavits (order 7); the referral of Mr Lawrence's quantum meruit claim for assessment (order 8); and for the Court to exercise its jurisdiction under s 99 of the Civil Procedure Act 2005 (NSW) in relation to unnecessary costs alleged to have been incurred by the respondent's solicitor, Mr Tony Marshall (order 14).
2. Ultimately, Mr Lawrence who was self-represented, did not press the orders sought in paragraphs 7, 8 and 14 of the motion. He was correct not to do so. Those orders either sought to pre-empt the outcome of the appeal, or went further than the relief that the appellants could obtain on appeal, if successful.
3. It is convenient to deal with the first and second motions together.

Amended notice of appeal

1. In response to directions made on 4 December 2015, the appellants served a document styled "Revised Amended Notice of Appeal 18 December 2015". The respondent did not object to the terms of the amendments to the grounds of appeal and the relief sought. Although somewhat lengthy, the amended grounds of appeal were an improvement on the rambling and expansive nature of the asserted grounds in the notice of appeal. The Court granted leave for the appellants to file the amended notice of appeal, subject to the appellants appropriately numbering the grounds of appeal.
2. Both parties sought costs in relation to their respective motions, each arguing that they had been successful. The position is more nuanced.
3. The appellants have succeeded in obtaining leave to amend their notice of appeal, but only after having served two earlier drafts the second of which was abandoned at the hearing of the motion on 4 December 2015. In my view, the appropriate order as to costs of the motion filed 24 November 2015 is that the appellants' costs of the amendment to the notice of appeal in the form of the revised document dated 18 December 2015 shall be the appellants' costs in the appeal.
4. As to the respondent's motion for summary dismissal, this became otiose once the appellants served their revised amended notice of appeal dated 18 December 2015 in a form not objected to by the respondent. The respondent's costs of her notice of motion filed 2 November 2015 should be the respondent's costs in the appeal. However, those costs should be limited to the period up until 18 December 2015.

Variation of the stay

1. The background to the present application is as follows. The Court made orders on 15 October 2015 dealing with an application for a stay pending appeal: Lawrence v Gunner [2015] NSWCA 322 (the October judgment).
2. Relevantly, the orders made by Stevenson J on 21 August 2015 were in the following terms: (1) The further amended statement of claim be dismissed. (2) Judgment that the plaintiffs/cross-defendants [Mr and Mrs Lawrence] pay the defendant/cross-claimant [Mrs Gunner] $315,000. (3) Order, pursuant to s 100 of the Civil Procedure Act 2005, that the plaintiffs/cross-defendants pay interest to the defendant/cross-claimant on the judgment referred to in order 2 at the rates set forth in Uniform Civil Procedure Rules r 36.7 from 1 March 2012. (4) Order that the proceedings RT 12/15580 and RT 12/09391 transferred to the Court from the CTTT by reason of the order made by the CTTT on 12 September 2012 and remitted NCAT to be dealt with by NCAT in light of the reasons given in these proceedings on 16 July 2015 in Lawrence v Gunner; Gunner v Lawrence [2015] NSWSC 944. (5) Grant liberty to the parties to apply for such further orders as may be required arising out of NCAT's consideration of the matter. (6) Order that the further amended cross-claim be otherwise dismissed. (7) Order that the plaintiffs/cross-defendants pay 95 per cent of the defendant/cross-claimant's costs of the proceedings (other than the costs of preparation of affidavits of any witness not called to give evidence other than affidavits prepared solely for the purpose of an interlocutory application) on a party-party basis until 2 August 2013 and on an indemnity basis thereafter. ….
3. The stay ordered by this Court on 15 October 2015 was in the following terms: 1. Subject to order 2 below, stay the enforcement of orders 2 and 3 made by Stevenson J on 21 August 2015 until the determination of the appeal or earlier further order. 2. The stay in order 1 above does not prevent the enforcement of orders 2 and 3 made on 21 August 2015 up to a maximum amount of $15,000 together with interest thereon. 3. Otherwise dismiss the applicants' notice of motion filed on 12 October 2015. 4. Costs of the motion be the applicants' cost in the appeal.
4. On 4 December 2015, the Court dismissed an application by Mr and Mrs Lawrence to vary the existing stay, for reasons given on 11 December 2015: Lawrence v Gunner (No 2) [2015] NSWCA 395 (the December judgment).
5. By their latest motion the appellants again seek to vary the existing stay. The variation sought is in substantially the same terms as the application that was dealt with and rejected in December judgment. The ordinary rule of practice is that an application to set aside, vary or discharge an earlier order with respect to a substantive interlocutory application, must be founded on a material change in circumstances since the original application was heard, or the discovery of new material which could not reasonably be put before the Court on the original application: Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46 ( McLelland J as his Honour then was). See also Serobian v Commonwealth Bank of Australia [2009] NSWCA 309 (Campbell JA).
6. As this Court explained in Bajramovic v Calubaquib [2015] NSWCA 139 at [40] Emmett JA (Leeming JA and Adamson J agreeing): … it would be conducive to injustice and would be an enormous waste of judicial time and resources if there were no limits imposed on the entitlement of a party to re-litigate at will an application for interlocutory relief. That is to say, it may well be an abuse of process for a party who has been unsuccessful in obtaining interlocutory relief or in resisting interlocutory relief to re-litigate the very same question. However, there will be circumstances in which it will not be an abuse of process. His Honour continued (at [41]) by observing the over-riding principle is that the Court must do whatever the interests of justice require in the particular circumstances of the case.

Clontarf Street

1. In the present case, the appellants have made two earlier unsuccessful applications for a stay of the order made by Stevenson J remitting the possession proceedings to the New South Wales Civil and Administrative Tribunal (the Tribunal). Those proceedings concerned the respondent's claim to possession of the property at 134 Clontarf Street, North Balgowlah (Clontarf Street).
2. Mr Lawrence informed the Court that the appellants have now vacated Clontarf Street. Their appeal to the Appeal Panel of the Tribunal against the orders made by the Tribunal on 6 November 2015 terminating the residential tenancy agreement and requiring that possession be given to the respondent immediately (which order for possession was suspended for four weeks), was heard on 12 February 2016. The Court was informed that the Appeal Panel has reserved its decision. Importantly, the appellants did not point to any new material, or change in circumstances that had occurred since the refusal of their earlier applications for a stay.
3. No basis has been demonstrated for a stay of orders 4 and 5 made by Stevenson J on 21 August 2015.

$15,000 component of the $315,000 profit

1. The appellants assert that they have new evidence justifying a stay of the enforcement of the whole of the judgment for $315,000 and interest thereon, not only so much of the judgment as exceeds $15,000 plus interest thereon: see order 2 made by this Court on 15 October 2015 (set out above at [11]). The new evidence is in the form of an affidavit of Mr Lawrence of 11 December 2015 which annexes a page from the bank statements for Minsden Pty Ltd (Minsden). This page records a deposit of $15,000 on 20 February 2012. Mr Lawrence gives evidence in his affidavit that "the $15,000 that Dennis Mirosevich refers to was banked in the Commonwealth Bank, and paid into the Minsden Pty Ltd Business Transaction Account …on 20 February 2011".
2. The reference to Mr Mirosevich's evidence requires a brief explanation. His Honour found that the appellants obtained a profit or gain of $315,000 in February 2012 from the on-sale by SLN Developments Pty Ltd (SLN Developments) to Henlong Pty Ltd (Henlong) of a property at 79-87 Malton Road, Beecroft (the Beecroft property) for $2,178,000. SLN Developments was a company in which Mr and Mrs Lawrence had a 51% shareholding and Mr Mirosevich was a director, but not Mr Lawrence. SLN Developments had purchased the Beecroft property from the respondent for $1,200,000. His Honour found that the appellants did not inform the respondent of their shareholding in SLN Developments: principal judgment at [166]. His Honour also found that Mr Mirosevich caused the amount of $315,000 to be paid by SLN Developments in two amounts, one comprising $300,000 and the other the balance of $15,000. Only the second amount of $15,000 is currently in issue.
3. It is not in dispute that Minsden is an entity controlled by Mr Lawrence. His Honour found that Minsden is effectively the "alter ego" of Mr Lawrence: see principal judgment at [549]. Mr Lawrence acknowledged in oral submissions that he had requested Mr Mirosevich to pay the profit of $15,000 from SLN Developments to his wife, and that he deposited that cheque in favour of Mrs Lawrence into the account of Minsden.
4. The appellants seem to assume that they may use the Minsden bank statement as evidence on appeal. That view ignored that the circumstances in which evidence may be admitted on appeal, either as "fresh evidence" or "further evidence", are constrained: s 75A(7)-(8) and (9) of the Supreme Court Act 1970 (NSW). The appellants seek to rely upon the exception concerning "further evidence" which is authorised by s 75A(7), subject to the proviso in subs (8). Under s 75A(8), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds.
5. Akins v National Australia Bank (1994) 34 NSWLR 155 at 160 and cases which have followed it, such as Tjiong v Tjiong [2012] NSWCA 201 at [166], establish that, in general, three conditions need to be met to satisfy the requirement of "special grounds" in s 75A(8): 1. the evidence could not have been obtained with reasonable diligence for use at the trial; 2. the evidence must be such that there must be a high degree of probability that there would be a different verdict; and 3. the evidence must be credible.
6. Here there is no evidence that the document could not have been obtained with reasonable diligence and adduced as evidence at the trial. Mr Lawrence submitted that the appellants' focus at trial was on the alleged profit of $315,000, not the separate payment of $15,000. This is really not to the point. It also overlooked that the evidence of Mr Mirosevich at trial was that there were two payments, one for $300,000, and the other for $15,000.
7. Further and importantly, the further evidence does not demonstrate that it is likely, let alone highly probable, that there would have been a different verdict, if the bank statement had been tendered at trial. It does not contradict the substance of Mr Mirosevich's evidence at trial, which his Honour accepted, that in February 2012, after settlement of the Beecroft sale, Mr Lawrence requested that the rest of his share of the profits from the sale be paid to his wife, and that Mr Mirosevich gave Mr Lawrence a cheque in favour of Mrs Lawrence for $15,000. It is to be recalled that the appellants were 51% shareholders in SLN Developments. How they dealt with the cheque for $15,000 between themselves does not affect his Honour's finding that they received the cheque for $15,000 as an unauthorised profit or gain from the on-sale of the Beecroft property.
8. The principles to be applied when exercising the Court's power to grant a stay pending an appeal are well-known. It is unnecessary to repeat the matters referred to in the October judgment: at [11]-[13]. See Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694-695, and Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; 55 NSWLR 737 at [17]-[20].
9. I remain unpersuaded that arguable grounds of appeal have been demonstrated in relation to the challenge to his Honour's findings concerning the payment of $15,000 in February 2012.
10. Although unnecessary for the resolution of the application to vary the stay, it is appropriate to say something about the balance of convenience. In the December judgment (at [48]) reference was made to the statement by this Court that a person "seeking the benefit of a stay and, if they are entitled to it, having shown a reason or demonstrated an appropriate case, they must still provide the court with material upon the basis of which the court can fix the terms of the stay that will be just to both parties": Alexander v Cambridge Credit Corporation Ltd at 697.
11. On the present application, the appellants made no offer to pay into court or otherwise provide security for that part of the money judgment, namely $15,000 and interest thereon, which is not the subject of the existing stay. Nor was there any evidence concerning the current financial circumstances of the appellants so that, if necessary, it could be tested by cross-examination. They have not asserted, let alone made out a case of hardship in relation to payment of part of the judgment debt in the amount of $15,000 and interest thereon, or that the absence of a stay of that part of the money judgment would stifle their appeal. If it were necessary to determine, the balance of convenience does not favour the variation of the terms of the existing stay.

Joinder of additional parties on appeal

1. The appellants seek to join two additional respondents to the appeal. One is the estate of the late Norman Henry Gunner (the Estate). The other is the Tribunal. No proper basis has been demonstrated for the joinder of either as a respondent.

The Estate

1. As to the Estate, the appellants applied unsuccessfully to amend their statement of claim before Stevenson J, apparently to make certain claims against the Estate. The Court was not taken to the proposed amended pleading against the Estate. His Honour rejected that application on 17 April 2014. It does not appear that formal reasons were given by his Honour, beyond what appears in the transcript for that day, only part of which was before the Court on this application (Exhibit 1, tab 6). That decision is now the subject of challenge in the amended notice of appeal, but the basis of the challenge to his Honour's discretionary decision on a matter of practice and procedure was not explained. No error in the House v The King sense was identified (House v The King [1936] HCA 40; 55 CLR 499 at 556).
2. In his affidavit of 22 January 2016, Mr Lawrence complained that the respondent, to whom the Court granted letters of administration in respect of the Estate on 10 December 2009, had not addressed certain issues with respect to the administration of the Estate including the filing of a final tax return for the Estate. Complaint was also made that the respondent had potentially collected rental from properties owned by Mr Gunner during his lifetime and that the respondent or Mr Gunner had avoided land tax between 2005 and 2009 in respect of the Clontarf Street property. Mr Lawrence asserted (in pars 17) that "all of these issues support the reopening of the Estate of the Late Norman Henry Gunner because the Estate is what the appellants claim is about in the joint venture of the project or the quantum meruit claim."
3. Having regard to the lateness of the proposed amendment to introduce new claims concerning the administration of the Estate, it is unsurprising that Stevenson J was not disposed to allow the amendment. Whether or not his Honour's discretionary decision to refuse the amendment is vitiated by error will be determined in the fullness of time in the appeal. On the information presently available, and taking into account that the claims concerning the administration of the Estate were not the subject of pleadings, or it seems evidence at trial, nor findings by his Honour, there does not seem to me to be a proper basis to seek to join the Estate as a respondent on the appeal.

The Tribunal

1. The appellants seek the joinder of the Tribunal as a respondent, in the alternative to a stay of the orders made on 21 August 2015 remitting the possession proceedings to the Tribunal. The appellants say that the appeal and their claim to reside at Clontarf Street, which has been rejected by the Tribunal, should be dealt with in the one proceeding. This ignores that the right of appeal from decisions of the Tribunal to the Supreme Court is governed by the Civil and Administrative Tribunal Act 2013 (Tribunal Act).
2. With respect to a decision made by an Appeal Panel, which is an internal appeal, a party may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings: s 83(1) Tribunal Act. Whether an appeal from the Tribunal to the Supreme Court is assigned to this Court, is governed by s 48 of the Supreme Court Act 1970 (NSW).
3. If the appellants wish to challenge any adverse decision of the Appeal Panel, which is presently reserved, they must follow the course laid out in the Tribunal Act. They cannot bypass the provisions in the Tribunal Act by seeking to join the Tribunal as a party to the present appeal. That is not to say that the present appeal and any future appeal from the decision of the Appeal Panel, if properly brought in this Court, could not be dealt with together as a matter of case management.

Should leave be granted to issue subpoenas?

1. The appellants seek leave to issue a subpoena for production to five persons or entities. Leave is necessary because the appellants are not represented by a solicitor and UCPR r 7.3(1) provides that in that situation a subpoena shall not issue except by leave of the Court.
2. The appellants seem to assume that they may use the documents sought on the proposed subpoenas as evidence on appeal. This assumption is incorrect since, as already indicated, the appellants need to demonstrate "special grounds" to rely upon further evidence on appeal: s75A(8) Supreme Court Act: see [21] - [22] above.
3. The appellants provided a description of the documents sought for only three of the five proposed subpoenas. I will deal with each in turn.
4. The first is to Mr Tony Marshall, a solicitor at Paton Hooke Lawyers, the legal representatives for the respondent. (Mr Marshall is now a solicitor at Marshall Law, the respondent's present solicitors.) It seeks all documents, including bank accounts, controlled monies, monies paid out directly or indirectly, including all accounts of Mrs Gunner and Gunner Estates Pty Ltd; all documents directly or indirectly associated with the Range Rover Sports owned by Mrs Gunner and transferred into the personal name of Mr Marshall; all accounts directly or indirectly associated with a video clip produced by Mr Marshall advertising a development at Old Bar and any payments, including gifts to Mr Marshall's family for participating in the video; all accounts directly or indirectly for consultants within all the sub-divisions and potential purchasers of future developments through any real estate agents, any gifts directly or indirectly; all costs directly or indirectly relating to the travel and accommodation of senior counsel, Mr Bruce Collins, from London to Sydney or any other places directly or indirectly; and all accounts or invoices directly or indirectly associated with the Intercontinental Sydney Hotel or the Sheraton on the Park Hotel.
5. The second is to Mr Rob Chapman. It seeks all documents (including his appointment as enduring guardian for Mrs Gunner) associated directly or indirectly with Mrs Gunner or with any of Mrs Gunner's affairs regarding her businesses.
6. The third is to MJR Accountants, Taree. Other than identifying that firm as the respondent's accountants, no documents are identified.
7. The fourth is to Manning Tax Business Consultants. It seeks documents relating to the Clontarf Street property and the tax returns of the Estate.
8. The fifth is to WM Weekes & Partners, accountants. No documents are identified.
9. There is no evidence that any of the documents sought by the proposed subpoenas could not have been obtained with reasonable diligence for use at the trial which took place in November and December 2014 and February and May 2015, other than possibly the documents relating to the travel expenses incurred by the respondent's senior counsel in relation to the trial. As to those documents, no legitimate forensic purpose has been identified. If the appellants dispute their liability for those costs under the costs order obtained by the respondent, that is a matter to be taken up in any costs assessment process.
10. As to the documents sought from Mr Marshall and the respondent's enduring guardian, Mr Rob Chapman, and her accountants and tax advisers, not only was their relevance on appeal unexplained, but how they would, with a high degree of probability, lead to a different verdict was also unexplained. Even if these difficulties were overcome, the subpoenas are objectionable on the grounds that they are cast far too widely and would appear to be no more than "fishing".
11. There is a further difficulty with some the documents sought. The proposed subpoena to Mr Marshall seems to be largely directed to matters which, although in dispute at the trial, involve a collateral attack on his conduct, first, in his dealings with the respondent in relation to certain property developments and secondly, relating to stalking allegations which were apparently made against him by a witness at trial. No legitimate forensic purpose has been shown.
12. Leave to issue the proposed subpoenas should be refused.

The striking out of part of the amended cross-claim

1. The appellants complain that an amended cross-claim was filed by the respondent on 17 January 2014 without the consent of the appellants or the leave of the court. They seek an order in advance of the appeal that pars 63-73 of the amended cross-claim be struck out.
2. Although the Court was not taken to the amended cross-claim, it seems that the relevant amendment related to an existing claim against the appellants that they had breached their fiduciary duty to the respondent in selling the Beecroft property to SLN Developments, a company in which they had an undisclosed 51% interest as shareholders. The amendments in pars 62, 62A and 63 pleaded that the appellants had obtained an unauthorised profit of $315,000 from the sale of the Beecroft property. So much appears from an extract of the amended cross-claim in Exhibit 1, tab12, tendered by Mr Lawrence on this application.
3. It is to be noted that prior to those amendments, the cross-claim included a pleading relating to the Beecroft property (pars [61]-[65]) and a claim for possession relating to the Clontarf Street property (pars [66]-[72]). The appellants could not complain in relation to existing paragraphs of the cross-claim, yet that is part of their present complaint which also seeks to strike out those paragraphs.
4. Whether or not there was a procedural irregularity in the filing of the amended cross-claim may be doubted. The material tendered by Mr Lawrence in Exhibit 1, tab 2, included a letter from the respondent's solicitors to the appellants dated 3 February 2014, stating: The proposed Amended Cross Claim was emailed to you on 24 December 2013, you provided consent to the filing of the Amended Cross Claim in your email dated 15 January 2014 and a sealed copy of the Amended Cross Claim was subsequently served on both plaintiffs on 20 January 2014.
5. It is also significant that no application seems to have been made by the appellants at trial to strike out the amended cross-claim. It is tolerably clear that the claim against the appellants (that they obtained an unauthorised profit of $315,000 from the sale of the Beecroft property) was a matter the subject of pleadings, evidence and submissions before his Honour. Further and importantly, the amended notice of appeal does not assert any relevant error by his Honour in dealing with the amended cross-claim.
6. Even if it be assumed that there was some procedural irregularity in the filing of the amended cross-claim, no basis has been shown for striking out parts of the cross-claim in advance of the appeal.

Other matters

1. On the hearing of the motion, Mr Lawrence sought leave to file in court a further amended notice of motion seeking additional relief, including a stay of the costs orders made by Stevenson J on 21 August 2015; a referral of the proceedings back to Stevenson J to provide reasons for certain evidentiary rulings disallowing the appellants' evidence at trial; a subpoena to Mr Bruce Collins QC concerning his travel arrangements, and other matters. Counsel for the respondent objected to the filing of this document on the grounds of lack of notice and that it raised new issues which were collateral to the appeal, and otherwise an abuse of process.
2. I refused to grant Mr Lawrence leave to file this document in court (which was marked MFI 1). My reasons included: the late notice of the new matters sought to be raised; the fact that the Court has already dealt with an application to stay the costs orders made by Stevenson J in the December judgment, and the appellants did not point to any new material or change in circumstances that had occurred since that time; and that some of the new matters sought to be raised involved claims for relief unrelated to the appeal.

Costs

1. For the reasons given above, the notice of motion filed 22 January 2016 should be dismissed. With respect to costs, no reason was shown why costs should not follow the event in relation to that motion: UCPR r 42.1.
2. The respondent sought costs of the motion on an indemnity basis. Counsel for the respondent characterised the appellants' pursuit of the motion as harassing. There is some force in that argument, which is understandable in the context of hard fought litigation between persons who fell out some time ago. Nonetheless, I am not satisfied that the conduct of the motion was unreasonable or improper so as to attract an order for indemnity costs. That however is not to be taken as any encouragement to the parties to make further applications of a similar nature.

Orders

1. The orders of the Court are as follows: 1. The appellants' notice of motion filed 22 January 2016 be dismissed with costs. 2. The respondent's notice of motion filed 2 November 2015 be dismissed. 3. The appellants' costs of the amendment to the notice of appeal in the form of the revised document dated 18 December 2015 shall be the appellants' costs in the appeal. 4. The costs of the respondent's notice of motion filed 2 November 2015, but only up until 18 December 2015, shall be the respondent's costs in the appeal.

Amendments 23 February 2016 - [2] - Line 5 - insert "of" between "stay" and "the" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 February 2016