[28] The bank has not appealed against the trial judge's reasons in this regard. Nor is there any cross-appeal or notice of cross-contention filed. However, in the course of argument on appeal, counsel for the bank maintained the bank's position that it was not obliged to credit Pinnacle's account with the amount of volume rebates received by it which are referrable to the legal costs incurred in connection with Pinnacle's facilities and their enforcement.
[29] It was submitted on behalf of the guarantors to the trial judge that the bank's claim under the guarantee should be dismissed because, in the absence of the ability to rely upon the certificate of indebtedness, there was no other evidence before the court as to the quantum of the debt. The trial judge rejected this approach, and ordered that the question of quantification be referred to a master for determination without reliance upon the certificate of indebtedness. The grounds of appeal challenging this course were abandoned at the commencement of argument on the appeal.
[30] Further, counsel for the guarantors submitted to the trial judge that, because the amount claimed by the bank was constituted by legal costs incurred by it, the bank's claim should be dismissed because it was based upon an illegal agreement between the bank and its solicitors to share income from a legal practice, in contravention of s 317 of the Legal Practice Act 1996 and s 2.2.9 of the Legal Profession Act 2004. The trial judge rejected the appellants' submissions in this regard. The grounds of appeal challenging this aspect of the trial judge's decision were abandoned in argument.
[31] An issue arises as to whether, at the hearing on 12 December or in later written submissions considered by the trial judge, the guarantors relied upon a further argument based upon illegality or public policy. This involves a comparison of the submissions in fact made to the trial judge with the arguments advanced on appeal. I will deal with this issue when considering those arguments.
[32] In December 2007 the account was taken by a master. The account certified by the master included substantial credits to reflect an appropriate proportion of the fee rebates received by the bank which were referrable to the legal costs debited by the bank to Pinnacle's account. We were informed by senior counsel for the guarantors that the amount exceeded $80,000. The bank did not contest this.
[33] The guarantors then appealed against the determination by the master on the taking of accounts. That appeal was dismissed by the trial judge. The argument relied upon on the hearing of the appeal from the master did not involve any attack upon the master's calculations. Rather, senior counsel having been brought into the matter, a new point was relied upon. As the appeal from the master was a hearing de novo and the guarantors did not seek to rely upon any new material than had been relied upon before the master, this new point was entertained by the trial judge. In summary, it was submitted on behalf of the guarantors that the bank, having obtained an order for party and party costs in the earlier proceeding, could not proceed to recover under its contractual entitlement to be paid indemnity costs until the process of taxation of the party and party costs had taken place pursuant to O 63 of the Supreme Court (General Civil Procedure) Rules 2005 and until interest in accordance with s 101 of the Supreme Court Act 1986 had been calculated. The trial judge found against the guarantors in this regard, and dismissed the appeal from the master's decision determining the amount due under the guarantee.
[34] For reasons which were not explained, Dr Irani has not appealed to this court. The appeal is brought by the corporate guarantors only. Further, at the commencement of the appeal hearing, the court was informed that one of the appellants, Thirteenth Corp Pty Ltd, had been placed in liquidation and the liquidator had given no instructions to prosecute the appeal on its behalf. However, for convenience and consistency, I will nevertheless refer to the remaining appellants as "the guarantors".
[35] On appeal, the guarantors raise three issues. First, they contend that the bank's claim should be dismissed on grounds of illegality or public policy ("the illegality grounds"). Second, the guarantors contend that the master's determination of the quantum of the amount due under the guarantee should be set aside, and the determination of any residual contractual entitlement of the bank to be paid its legal costs of enforcement of its securities should be deferred until after taxation of the bank's party and party costs awarded in its favour in the earlier proceeding ("the deferral ground"). Third, the guarantors seek to raise a new issue, not raised before the trial judge, that the bank should be refused relief on discretionary grounds ("the discretionary ground").[14] (footnotes omitted)