Neale v Commonwealth Bank of Australia Ltd

Neale v Commonwealth Bank of Australia Ltd - [2015] NSWCA 136 - NSWCA 2015 case summary — Zoe

ex tempore Judgment

LEEMING JA: After a 14 day trial in the Commercial List of the Equity Division of this Court, the respondents to this appeal obtained a judgment in the amount of $31,552,497 and an order for possession of property in Wahroonga in suburban Sydney: Neale v Bank of Western Australia Ltd [2014] NSWSC 315. Mr Neale and his company JW Neale Pty Ltd (Receivers and Manager Appointed) have appealed from that judgment. After some delays, submissions in support of the appeal were filed on 18 February 2015 and on behalf of the respondents on 7 April 2015. The appeal is listed for hearing, with an estimate of two days, on 27 and 28 August 2015. On 13 April 2015, an order was made giving leave to the appellants to file and serve submissions in reply, not exceeding 10 pages in length, by 16 July 2015.
Mr Neale acted for himself and (with leave) for his company throughout the trial at first instance, at a further hearing on 19 August 2014 in which his application for a stay of enforcement of the judgment was dismissed: Neale v Bank of Western Australia Ltd [2014] NSWSC 1219, and in an application brought by the respondents determined by me late last year: Neale v Commonwealth Bank of Australia [2014] NSWCA 443. The consequence of that application was an extension of time for the appellants' submissions. In support of his application, Mr Neale read an affidavit sworn by him on 8 December 2014 which referred to his legal representation in September and October 2014, including a conference with senior counsel, the difficulties he had had when his former solicitors had ceased to act for him, and concluded in paragraph [12]: "I have received loan funds sufficient to enable me to now brief Senior Counsel to prosecute my Appeal. I am now able to amend my grounds of appeal and draft my submissions on Appeal."
The first paragraph in the notice of motion filed 13 April 2015, which is before me today, is an application for legal assistance pursuant to r 7.36 of the Uniform Civil Procedure Rules 2005 (NSW) to Mr Neale and his company. The respondents take no position one way or the other as to whether that legal assistance should be provided. In order for such a referral to be made, the Court must be satisfied that it is in the interests of the administration of justice. Even then, there is a discretion to make a referral. It is not sufficient to conclude that the litigant, or the other party, or the Court, would be advantaged by the provision of pro bono assistance. It was said by Ward JA, in Sharpe v Hargraves Secured Investments Ltd [2013] NSWCA 288 at [42], that: "It has been recognised that the mere fact that a litigant would be assisted by pro bono legal assistance is not sufficient of itself for an order for referral to be made (Re F [2013] NSWCA 239). The Court must consider what the interests of justice require in each case."
To the same end, in Lane v Northern NSW Local Health District (No 2) [2014] NSWCA 32 at [8], Basten JA said that: "It is true that in every case this Court benefits from the availability of professional legal assistance, however it is not always available and there are limits to the cases in which this Court can impose upon members of the Bar to provide assistance without return by way of fee."
In Kelly v Mosman Municipal Council [2010] NSWCA 370 at [19], Campbell JA said: "Any orders for pro bono legal assistance need to be made bearing in mind that the resources of the Pro Bono Panel are limited, that the lawyers whose names appear on the Pro Bono Panel provide their services voluntarily, and that the Court should ask them to give up their time and exercise their skill only in circumstances where there is an appropriate reason, for the overall administration of justice, to make that request."
The same approach has regularly been expressed subsequently: see for example Hetherington-Gregory v All Vehicle Services (No 2) [2012] NSWCA 257 at [3]-[5], Maxwell-Smith v S & E Hall Pty Ltd [2013] NSWCA 397 at [11] and M v Director General, Department of Family and Community Services [2013] NSWCA 118 at [21]. The latter is a decision of Basten, Barrett JJA and Bergin CJ in Eq.
Although it is established that a refusal of legal aid for lack of merit is highly relevant to the discretion Mr Neale asks me to exercise in his favour, that is not this case. The evidence before me establishes that Mr Neale has applied for, and been refused, legal aid because of a policy which excludes disputes about investment transactions (he disputes that the policy is applicable; I do not express a view as to whether or not that is so).
One primary consideration underlying r 7.36 is the possibility that the fact that a litigant is unrepresented may materially bear upon the fairness of the process or outcome of litigation. An example may be seen in Margan v NSW Director of Public Prosecutions [2013] NSWCA 196, where the unrepresented applicant had suffered significant injuries as a result of an assault which was central to his appeal, including a speech impediment, which impacted upon the clear and coherent presentation of his case orally.
It is plain from his written and oral submissions that Mr Neale is capable of articulating the points he wishes to make. It is plain that the trial was long, that the appeal itself is a large undertaking, and would involve a great deal of work for any counsel prepared to act pro bono. I think I should also refer to the fact that there appears to have been a history of lawyers acting, and then ceasing to act, for Mr Neale and his company. Indeed, the first ground of his appeal is that the primary judge erred in permitting his solicitor to cease to act for him immediately before the commencement of the hearing. I note that I understand that Mr Neale did not oppose his solicitor taking that course at the time.
Mr Neale instructed other practitioners after the trial, who ceased to act for him late last year. When the matter came before me last December, Mr Neale's evidence was that he had funds sufficient to enable senior counsel to prosecute the appeal. Moreover, paragraph 7 of the motion before me today, to which I will come, seeks an order that he have returned to him within seven days all documents held by three law firms.
I do not know, with any specificity, the circumstances in which a number of lawyers have ceased to act for Mr Neale, or his company, or as to why what was confidently stated in Mr Neale's affidavit of 8 December 2014 has not come to fruition. I do have the benefit of statements by Mr Neale from the bar table. They fall short of a full explanation by way of evidence, but in saying all of that I should not be taken to be expressing any criticism of either Mr Neale or any of the lawyers who have formerly acted for him. It is the fact though that that history causes me some concern. Like Meagher JA in Margan at [8], I too am conscious of the need to exercise caution because of the limited and valuable nature of the resource which is being drawn upon every time a referral is made. The limited resource of services provided by counsel on the Pro Bono Panel should not lightly be expended on a litigant who has a history of previous lawyers ceasing to act for him. However, although I am concerned by that history, I do not decide this paragraph of the motion on that basis.
A further matter that is relevant is that it has been made clear today by Mr Neale that he proposes to seek to adduce further or fresh evidence in support of the appeal, and the impression that I have is that it will be a substantial task, and one that needs to be performed early on following the acceptance of any pro bono brief, to go through a deal of material with a view to determining whether it is appropriate for such evidence to be adduced before the Court of Appeal.
Finally, the amounts at stake in this appeal are extremely large - in excess of $30 million. I cannot readily envisage an occasion where pro bono referral would be made in such a case. Ordinarily, one might expect that a litigation funder or a lawyer prepared to act on a contingency basis might be able to be found in a case where the amounts at stake dwarf the legal costs, should the matter have sufficient prospects of success. It is plain from Mr Neale's submissions that he has a considerable amount of experience in the financial world and in dealing with solicitors and litigation funders.
Having regard to all of those matters, but, most particularly, the history of these proceedings at first instance and on appeal and the written submissions which have been filed by Mr Neale to date, I am not satisfied that this is an appropriate case for a referral to be made.
The second paragraph of the notice of motion seeks an order that Mr Neale be given reasonable time to reply to the respondents' 25 pages of written submissions served in April 2015. As already noted, the existing orders permit Mr Neale to file and serve submissions in reply by 16 July 2015. No complaint is made about that time limit. However, Mr Neale would prefer there to be a larger number of permitted pages. I think it is in the interests of the Court as well as both sides to this appeal that, to the extent possible, the submissions which Mr Neale wishes to make on behalf of him and his company are made known to the Court and the respondents sooner rather than later. On that basis, I am prepared to vary the order made on 13 April 2015 to extend it to 15 pages. Those submissions should be strictly in reply to the submissions filed on 7 April 2015.
The third order sought in the notice of motion is that Mr Neale be given a reasonable time to prepare an affidavit and submissions in support of these orders. That paragraph has fallen by the wayside, I think in part by reason of the fact that by consent this motion was adjourned 14 days ago. It is this paragraph, however, that has in the course of submissions from both parties, which have occupied the whole of the morning, given rise to the concern or the likely concern that Mr Neale will seek in a substantial way to supplement the materials before the Court of Appeal to include matters by way of fresh evidence or further evidence which were not before the primary judge.
During the course of debate, Mr Neale has been made aware of the facility to adduce fresh evidence on appeal. It is a matter for him but I gained the impression that both he and Mr Dowdy appreciated the wisdom of advising each other (a) as to any such application that may be made, and (b) the response to any such application, well in advance of the appeal which, as I have said, is listed to be heard for two days in August.
On any view, it would seem to be desirable for Mr Neale and his company to have the time that has been allocated by the Court devoted to the main issues on the appeal rather than the question of whether additional evidence may and should be adduced by way of fresh evidence. I do not propose to make any direction as to any application that Mr Neale may seek to make.
The fourth and fifth paragraphs of the notice of motion are in the following terms: "4. The respondent shall not sell any security property of the Appellant prior to determination of the appeal. 5. The Respondents shall not at any time sell any security property of the Appellant prior to its being put to public auction."
Those paragraphs were not pressed before me today and Mr Neale accepts that the bank has, last year, sold security properties it has held. His complaint is in part that he was not notified in advance and also, in part, that one of the sales did not proceed by way of public auction. He sought today orally to amend these paragraphs seeking, in substance, declarations that there had been a breach of duty by the bank. He said that he did not have today the evidence on which he sought to rely, and that it had not been served on the bank. I do not propose to permit Mr Neale to apply for orders of that kind orally without notice and unsupported by evidence.
Paragraph 6 of the notice of motion seeks an order that an officer or appointee of the Court is to inspect the damage done to the appellant's former home at Avon Road, Pymble while it was in the possession of the mortgagee. Mr Neale has said from the bar table that there was damage taking place from around 2011. I do not see how the result of any inspection by an officer or appointee of the Court could be relevant to the appeal. The question ultimately on appeal is whether the primary judge made appellable error. If as Mr Neale says damage has been done for a number of years, a further difficulty will be that anything that is seen today in 2015 may not directly bear upon what Mr Neale asserts to be the case. I do not propose to make an order in terms of paragraph 6.
Paragraph 7 of the notice of motion identifies three solicitors of three separate law firms and seeks a mandatory injunction that they return within seven days "all documents relating to the above matter and the appellant's associated action against the NSW Department of Planning and Infrastructure which is the consent authority for the appellant's principal security at Avon Road, Pymble".
The three named solicitors were not joined as respondents to the motion. There is no evidence that they are even aware that this application was being made today. I am not prepared to make an order in the nature of a mandatory injunction against three solicitors of this Court without their joinder or even notice of the order being sought.
Paragraph 8 seeks, "Such orders as the Court deems appropriate to cause" various investigators to "continue with and report on their investigations into the allegedly criminal aspects of the CBA's takeover of Bankwest". The paragraph then identifies a Detective Inspector within the New South Wales Police Area Command Fraud Squad, two officers within the Australian Federal Police, four officers of ASIC and two senators of the Commonwealth Parliament.
The threshold question for a single judge of appeal is what power there exists under s 46 of the Supreme Court Act 1970 (NSW) to make any such order. It must be within the scope of the appeal which has been commenced in this Court by Mr Neale which will, in due course, be determined by three judges of appeal. I am far from convinced that I have the power, or for that matter that this Court has the power, to make any directions by way of injunction against senators in the Commonwealth Parliament or federal police officers or officers of ASIC. However, it is sufficient for me to say, in relation to this aspect of the notice of motion, that I do not see how such an order is going to assist the Court of Appeal in due course to determine whether or not appellable error was made by the primary judge.
By his submissions filed and served last week, Mr Neale has expanded the orders he sought, without objection by the respondents, to include two additional matters. The first is that he seeks an order that, "this matter be heard before a jury following Bankwest v Ross [2014] QSC 149". That is a case in which a plaintiff suing Bankwest at first instance, succeeded in defeating Bankwest's application that the matter proceed and be determined before a judge sitting alone. The critical difference in the present proceedings is that this is an appeal, following a trial before a judge alone.
Although I have not heard full argument on the point, my present view is that there is no power to make the order sought. Trial by jury is regulated by s 85 of the Supreme Court Act. Section 85(1) provides that proceedings in any Division are to be tried without a jury unless the Court orders otherwise. There are two Divisions in this Court, the Common Law Division and the Equity Division. The Court of Appeal is not a Division: see s 38 of the Supreme Court Act. Section 85 continues the tradition inherited from Great Britain, that the appellate process is not something that is the subject of determination by juries.
Secondly, s 85(2) of the Supreme Court Act authorises a court to make an order under subs (1) if, inter alia, "(b) the Court is satisfied that the interests of justice require a trial by jury in the proceedings". Mr Dowdy directed me to Maroubra Rugby League Football Club Inc v Malo [2007] NSWCA 39 which concerned an order by a judge in the Common Law Division for part of a trial to be determined by a jury. In the leading judgment of Mason P, with whom Ipp and Tobias JJA agreed, at [14], his Honour stated that, "Whatever its nature, the power [in s 85] is only available to be exercised if the conditions in subs (2) are met."
The presently relevant condition is that the Court must be satisfied the interests of justice require trial by jury. That is to say, the Court of Appeal in Maroubra Rugby League Football Club v Malo proceeded on the basis that s 85 was a code and that s 85(2) identified necessary conditions without which there was no power to order a jury. I am not satisfied that the interests of justice require a trial by jury in the proceedings. It suffices to consider how difficult it would be and how long it would take for members of the jury to read the judgment at first instance, the submissions of the parties and the material before the primary judge in a trial over 16 days. I am satisfied that the interests of justice are antithetical to a trial by jury in the appeal.
Mr Neale, in response to this, says that the Civil Procedure Act 2005 (NSW) and its exhortation for the just, quick and cheap resolution of the real issues in the proceedings overrides this and gives procedural power to make the order he seeks. I am not persuaded that anything in the Civil Procedure Act impliedly amends or repeals s 85 of the Supreme Court Act.
Mr Neale also seeks an order that a man with whom he has had dealings from Rebel Property Group Pty Ltd be required to file an affidavit. His submissions contend that over the last six months or so, between December 2014 and today, he has had communications including email communications with the man. He has said from the bar table that, speaking generally, although initially he was sympathetic to the matters sought to be raised by Mr Neale, more recently he has been reluctant to assist.
This application falls into the same category as paragraph 7 of the notice of motion. I am not prepared to make an order directing a man to put on an affidavit to support Mr Neale's appeal without him being joined to the motion or at least receiving notice that the order is being sought. There is no evidence of that before me. In any event, I struggle to see how dealings between Mr Neale and that man well after the trial from which this appeal is brought, are likely to have any relevance to the question whether appellable error has been demonstrated on the part of the primary judge.
The result is that in all respects save one Mr Neale has been unsuccessful. I will make the following orders: 1. Vary the orders made on 13 April 2015 to permit submissions in reply not exceeding 15 pages to be filed and served by 16 July 2015. Such submissions are to be strictly in reply to the written submissions filed on 7 April 2015. 2. I otherwise dismiss the notice of motion filed 13 April 2015. 3. Mr Neale pays the Respondents' costs of the notice of motion dated 13 April 2015.

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