SCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD

Court of Appeal (NSW)|1994-05-26|Before: Powell JA, Young J, Keefe CJ

MAHONEY AP, POWELL JA and O' KEEFE CJ) COMM DIV 26 May 1994, 6 September 1994

COMPANIES - Proceedings between companies and third parties - necessity for company to carry on proceedings by solicitor and to be represented in Court by counsel or solicitor.

Mahoney AP I agree with the orders proposed by Powell JA and generally with the reasons his Honour has given. In view of the complexity of the matter (the appeal papers alone comprise some 1110 pages) I shall add some short observations of my own.

When the proceeding commenced, Mr Dennis, Solicitor for Scotts Head Development Pty Ltd, appeared for that company, Mr Harrison appeared on his own behalf and Mr Hodgekiss appeared for the first and second respondents. The Court was informed that the other parties to the appeal had been served and, in various ways, have indicated that they do not wish to participate in it.

At the commencement of the hearing a question arose as to the procedure to be followed. Mr Dennis announced that he appeared for the company appellant, for which submissions in writing comprising some 86 pages of material had been filed. It was proposed, in effect, that the oral submissions to be made for the company would be made by Mr Harrison and that Mr Dennis would adopt those submissions as the oral submissions for the company. This, it was indicated, was the arrangement which had been made between Mr Dennis and Mr Harrison.

Mr Hodgekiss, for the respondents who are participating in the appeal ("the respondents") objected to such a procedure. In the circumstances, the Court gave consideration to whether Mr Harrison could in this way effectively appear for the appellant company. This, as it became clear from discussion, was what Mr Dennis and Mr Harrison sought to achieve.

The Court, after consideration, concluded that Mr Harrison should not be permitted to appear for the company or to make submissions for the company in the way that, as it was accepted, was sought to be achieved. The Court indicated that it would accept the written submissions that had been filed for the appellant company as its submissions on the appeal and would allow Mr Dennis, who remained its advocate before the Court, to make such additional oral submissions as were appropriate.

Mr Harrison's application to appear for and argue the case for the appellant company raises issues of principle and I shall refer to some aspects of them. The application depends, conceptually, upon two things: (a) that he should be allowed to advance arguments for the company because of the right which he has claimed to appeal personally against the order for costs made against him; and (b) that he may and should be given the right to appear for the company to argue its case.

(a) Mr Harrison was a party in the proceeding before the trial judge. An order for costs was made against him: no other relief was sought or, at least, none was given against him. It was not suggested that there was any other matter against which, in his personal capacity, he is entitled to appeal. Accordingly, this basis of his claim is that he should be allowed to address submissions to the Court directed to reversing the Court's findings against other parties because, if those findings are reversed, a different order as to costs can and should be made against him

However, several things may be said in relation to such a contention. First, Mr Harrison accepted that he did not wish to submit arguments directed to reversing the order for costs as such: I mean by this that, if the findings made as between the other parties stand, he did not wish to argue that the order for costs made against him could be reversed. This is understandable. The order for costs made by Young J was plainly one which was made following an assessment of relevant factors and, subject to what I shall say, it is unlikely that an appeal against that order would succeed.

However, if the appeal as between the other parties resulted in the orders made between them being changed, it may be that the order for costs made against Mr Harrison would require reconsideration. That is a matter on which I express no final view. But, if those findings were changed, it would be possible to argue for a change in the costs order Accordingly, as I understand what was said, it would be contended that Mr Harrison should be permitted to submit arguments to secure the reversal of those findings.

Second, it emerged in argument that no leave had been given to Mr Harrison to appeal against the costs order made against him. His appeal was an appeal only against that costs order. In my opinion, his appeal does not lie without leave of the Court: Supreme Court Act 1970, s101(2)(c). No such leave was obtained.

Third, prima facie this is not a case in which leave should be given. The Court has before it argument directed to the reversal of the findings of fact made between the other parties. Mr Harrison and Mr Dennis participated in the preparation of those submissions. The matter will accordingly be sufficiently canvassed before the Court. There is no apparent reason why, in addition to what is before the Court, Mr Harrison should be given leave to appeal against the costs order in order to enable him to make further submissions in relation to the orders made between the other parties.

In this context, the Court indicated that it would treat Mr Harrison as having made an application for leave to appeal against the costs order and would determine that application in the light of, inter alia, the other findings made in the appeal. For the reasons indicated by Powell JA, I am of opinion that no relevant change should be made in the orders made as between the other parties. Accordingly, I would refuse leave to appeal against the costs order.

(b) The same result in substance is reached if Mr Harrison's claim be treated as a claim to appear for or to argue a case for the company. There are, inter alia, two main bases on which such a claim could be based: (i) that a private individual has the right or, in the Court's discretion may be allowed, to argue an appeal for another party; and (ii) because Mr Harrison and his wife have (as it is claimed) the substantial interest in and control of the appellant company.

(i) The circumstances in which a person not admitted to practice before the Court will be allowed to represent a party in a proceeding before this Court are, in my opinion, limited. Such an appearance will, of course, not be allowed where

URSCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (Mahoney AP) 3

it constitutes the carrying on of practice as a legal practitioner: see generally the Legal Profession Act 1987. It was not suggested that this was such a case.

As a general principle, this Court will not allow a party to be represented before it by a person who is not entitled to practise before the Court Pt4 R4 provides that, with exceptions not here relevant, "any person may proceed in the court by a solicitor or in person' and except as provided by or under any Act, a corporation "may not commence or carry on any proceedings otherwise than by a solicitor". This rule represents the established law. This Court, as a superior court, has a discretion to determine who will be allowed to appear before it However, it lias long adopted the general rule that it will not allow an appearance by a person who has not been admitted to practise before it. This accords with the long established practice of superior courts in Australia and in England see generally Holdsworth's History of English Law, Vol 6, at 432 et seq; Halsbury's Laws of England (1st ed) Vol 2, para621 et seq. The general principles upon which the rule is based have been examined and affirmed in this Court: Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104; and in the English Court of Appeal: Abse and Ors v Smith and Ors [1986] QB 536 at 547 et seq.

In Magistrates and similar Courts, the discretion to allow representation by persons not admitted to practise in superior Courts has, I think, been seen as more flexible. The history of Magistrates Courts in Australia was considered by the Privy Council in O'Toole v Scott and Anor [1965] AC 939. See generally Ex parte Browne (1913) 13 SR (NSW) 593; Beaton v McDivitt (1985) 13 NSWLR 134 at 160. In some cases where the discretion exercised in Magistrates Courts has been considered, the issue has turned upon statutory provisions limiting those who may appear to the solicitor "on the record": see, eg, Garrett v Phillips (1926) 26 WN (NSW) 79; Ex parte WA Grubb Pty Ltd; Re Johnstone and Anor (1949) 66 WN (NSW) 224 at 226 et seq. But, subject to such matters, Magistrates Courts have, I think, been seen to have a discretion the exercise of which is less well settled: see R v Leicester City Justices; Ex part Barrow and Anor [1991] 2 QB 260.

The rule of practice which the Court has adopted whereby appearance is limited to persons admitted to practise before the Court is not based on technicalities. It has long been regarded as based on considerations central to the proper administration of justice and the protection of the parties in the litigation. First, the Court has emphasised the importance, for the administration of justice, of the fact that those permitted to appear before it owe a responsibility to the Court to ensure that the Court is properly informed and not misled: see Meek v Fleming (1961) 2 QB 366. In Ex parte Browne: at 597; Pring J referred to the importance of having, as the party before the Court, a person "who was responsible to the Court, responsible to his client and responsible to the other party to the litigation". See also Ex parte WA Grubb Pty Ltd; Re Johnstone and Anor at 226, Tritonia Ltd v Equity and Law Life Assurance Society [1943] AC 584 at 587.

Second, the Court has regard to the possibility of unqualified or untrained advocates interfering with the course of a proceeding before the Court and causing loss to the parties involved. Reference was made to considerations of this kind in Hubbard Association of Scientologists International v Anderson and Anor [1972] VR 340 and in Abse and Ors v Smith and Ors [1986] QB 536. Experience has shown that a proceeding conducted by a person unskilled in advocacy tends to last longer and to cost more. In determining whether to allow such an advocate

to appear, the Court must have regard not merely to the position of the party for whom he seeks to appear, but also to that of the other party. The interest of the defendant in having the proceeding dealt with without unnecessary delay and cost is one which, in my opinion, is to be borne in mind.

Third, there remains the public interest in the effective, efficient and timeous disposal of litigation. The administration of justice requires that full assistance be available to the Court in determining the issues of fact and law which come before it. The isolation of issues and the presentation of the consideration which support one answer rather than another are things best done by a person experienced in such matters. Where one party is represented by an advocate less than appropriately skilled, the duty of the Court to act with fairness and impartiality between the parties is more difficulty and may in some cases be compromised. The Court cannot adopt the role of advocate for one party or the other. Ordinarily it cannot undertake investigation of matters beyond the evidence formally before it. As to the position of the Court in relation to an unrepresented party see Gamester Pty Ltd v Lockhart (1993) 67 ALJR 547; see generally Rajski v Scitec Corporation (Court of Appeal, 16 June 1986, unreported); Rowett and Anor v Westpac Banking Corporation (Court of Appeal, 13 December 1993, unreported).

Iam conscious of the high cost of legal services and of the difficulties which confront parties to litigation in the superior courts. Legal aid and pro bono legal services do not entirely remove these difficulties. Where parties represent themselves in superior courts, the cost, in terms of personal loss and public resources, is apt to be great. For reasons such as this, the power to allow representation by a person not admitted to practice has conventionally been seen as "a reserve or occasional expedient, produced primarily in emergency situations when counsel is not available or in straightforward matters where the assistance of counsel is not needed by the court or where it would be unduly technical or burdensome to insist upon counsel": Re GJ Mannix Ltd [1984] 1 NZLR 309 at 314. I do not think this is such a case: there is no evidence to suggest that it is.

(ii) The question of representation has sometimes arisen where the party to the litigation is a limited company and the person seeking to appear is an officer and/or a shareholder in the company. In such a case, it has sometimes been suggested, there is a special reason why the litigant company should be represented by a private individual.

In cases of that kind, two questions are apt to arise: whether the person seeking to appear has been validly authorised by the company to do so; and whether (if he has) he should be allowed to appear. Such questions were considered by this Court in Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104.

Not infrequently, the person who seeks to appear for the company does not have the full authority from the company to do so. Where a company is involved in litigation it is, of course, apt to incur liabilities, for costs and otherwise, if it actively pursues the litigation. If such liabilities are incurred, they may affect not merely the shareholders of the company but those to whom it has obligations, as creditors or otherwise. The fact that a person is, eg, a shareholder of a company or an officer of it does not, as such, warrant the person causing the company to incur liabilities which are to be borne by others. If a company validly, in accordance with its constitution, authorises a person to appear for it, this

URJ SCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (Powell JA) 5

objection does not exist and the right to appear will then depend ordinarily upon the general considerations to which I have referred.

In the present case, Mr Harrison, when asked, informed the Court that the directors of the company were himself and his wife and that they were the only shareholders of it. In view of the course of the proceeding at trial and the terms of his Honour's judgment, it is not clear whether this is so or whether the company has creditors. It does not appear whether the company has granted any formal authority to Mr Harrison to represent it. In the circumstances, I do not think that their control or their shareholding in the company should be assumed without proof or that Mr Harrison was properly authorised to appear in this regard.

In saying this, I do not impugn Mr Harrison's personal credibility. That does not arise for consideration by this Court. But I am not satisfied to act upon the basis that his authority from the company may be assumed from what he has said before the Court.

Mr Dennis has appeared as solicitor for the company and as its advocate before this Court His authority to act in this way has not been withdrawn.That is a further reason why Mr Harrison should not himself be permitted to act as the advocate of the company. The Court has had the advantage of long and detailed written submissions in support of the company's appeal Mr Hodgekiss, for the respondents, has relied essentially upon the written submissions provided by him and referred orally only to one incidental matter arising in the litigation. Mr Dennis, for the appellant company, addressed the Court in reply. Even if the principles of representation were to be fully reconsidered in this case, I would not as a matter of discretion allow Mr Harrison to appear as advocate for the appellant company.

Powell JA Not only is the present Appeal irregular in a number of respects butan attempt was made, on the hearing of the Appeal, to compound those irregularities in the manner to which I will later refer. However, given the events which gave rise to the two proceedings from the decision in which this Appeal purports to have been brought, which history of events is replete with irregularities, that should hardly have come as a matter of surprise.

Despite the varying forms of relief which were claimed in each of these two sets of proceedings, the proceedings are ultimately concerned with the ownership of a large area of vacant land - which land was at an material times thought fit for development - situated at Scotts Head, which is located within the Shire of Nambucca That land - the title to which was registered under the provisions of the Real Property Act 1900 - was at an material times prior to the middle of 1988 owned by what purports to be the First Appellant, Scotts Head Developments Pty Ltd ("Developments") the shares in which were held by one Mr HE Vogt and his solicitor Mr JJ McGlinchey - each of whom was a director - but the beneficial ownership of which belonged to Ausam Companies Pty Ltd (""Ausam") the whole of the shares in Ausam being, in their turn, beneficially owned by Mr Vogt, although one such share was held by Mr McGlinchey on Mr Vogt's behalf.

It would seem that, by early 1988, Mr Vogt had determined to divest himself of his Australian investments, and was giving thought to the way in which that might best be done without exposing himself to a significant taxation burden - from his point of view, the most effective way in which that could be done would have been for him to sell his shares in Ausam.

The fact that Mr Vogt was seeking to divest himself of his investments appears to have come to the attention of the Third Respondent Mr RG Winslett, who, although having been made bankrupt in New Zealand, and not having been discharged from bankruptcy in New Zealand, had, as it would appear, for some years at least, carried on business in this country as a property developer.

One of those with whom Mr Winslett had apparently become associated was one Gordon Walker, a solicitor who, with one Richard Mitry, then carried on practice in partnership, under the style of "Mitry Walker".

In early 1988, Mr Winslett advised Mr Walker that the land at Scotts Head was a good development prospect, and that, as Mr Vogt wished to realise his Australian investments, the land could probably be acquired at a favourable price. However, while Mr Walker and those with whom he came to be associated in an attempt to acquire the land at Scotts Head were of the view that, from their point of view, it was more advantageous - from a taxation point of view - that they acquire the land itself, Mr Vogt - who, as I have previously indicated, was also concerned with the impact of taxation - was not prepared to have Developments sell the land but wished to divest himself of the shares in his various companies.

Having become aware of the Scotts Head land, Mr Walker, together with Mr Mitry and two other persons - one Terrence John Smith and one Ross Edward Taylor - with whom he was associated, (to an four of whom I will refer collectively as "the syndicate"), entered into negotiations with Mr Vogt and Mr McGlinchey for the acquisition of the shares As a result of those negotiations, the members of the syndicate, on 19th May 1988, executed an Agreement for the Sale by Mr Vogt and Mr McGlinchey and the purchase by the members of the syndicate of the shares in Ausam, the total consideration payable - by way of purchase price, of the provision of funds to enable creditors of Ausam and Developments to be paid out and otherwise - being of the order of $3 million.

After the execution of the Share Sale Agreement, Mr Walker, on behalf of the syndicate, approached a number of banks and financial institutions in an endeavour to obtain the finance necessary to enable the completion of the Share Purchase Agreement. As well as seeking finance in this way, Mr Walker and Mr Mitry apparently made approaches to a number of people in an endeavour to interest them in becoming associated with the project. Among those who were approached were a Mr Eric Jury - who, within a short time, indicated that he was not interested in becoming "a partner" - and a Mr Charles Cropper, who, however, does not appear to have been approached until late June, or early July, 1988.

Meantime, however, so it would seem, Mr Winslett had told Mr Walker that he might be able to arrange finance in a sum which would enable the members of the syndicate to complete the Share Sale Agreement, a fact which led Mr Walker and Mr Taylor, seemingly on behalf of the syndicate, to inform Mr Winslett that if he were able to do so, the syndicate would be prepared to pay him a commission of some $100,000.00. It would also seem that, at about the same time, Mr Winslett indicated to Mr Walker that he (Mr Winslett) would be prepared to assist in the marketing of the lots which would be produced upon a subdivision of the land, a fact which led Mr Walker, so it is suggested, to offer Mr Winslett 10 of the subdivided lots of his choosing as compensation for being involved in the marketing of the lots.

URJ SCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (Powell JA) 7

Although, when he was approached, Mr Cropper had indicated his interest in joining with Mr Walker and his associates in acquiring the land at Scotts Head, it would appear that he was not interested in doing so if that were to involve him in purchasing shares in Ausam; his only interest, so it would seem, was in purchasing the land outright. As the result of Mr Cropper's attitude, Mr Walker conceived the idea of acquiring a shelf company which would then purchase the shares in Ausam, and which shelf company would then cause Developments to transfer the land at Scotts Head to another company to be controlled by the members of the syndicate and Mr Cropper. To that end, arrangements were made to purchase a shelf company known as Donavon Holdings Pty Ltd ("Donavon") from a Mr Richard Bobb, an accountant.

For reasons which are by no means clear to me, it appears to have been decided that the directors and shareholders of Donavon should be persons other than the members of the syndicate and Mr Cropper. It would appear that, that decision having been taken, Mr Walker then approached Mr Winslett with a view to his becoming one of the directors and shareholders, the other proposed director and shareholder being one "Raymond Roberts", who Mr Walker apparently believed to be a friend of Mr Winslett, but who, as it now transpires, was merely an alter ego devised by Mr Winslett for himself. Mr Winslett, on behalf of himself and his alter ego, having agreed to become a director and shareholder of Donavon and, in due time, to cause Developments to transfer the land at Scotts Head to the other proposed company, Mr Walker then instructed Mr Bobb to make the appropriate arrangements for the transfer of shares in Donavon to Mr Winslett and "Mr Roberts" and for the appointment of Mr Winslett and "Mr Roberts" as directors of Donavon. The appropriate procedural steps to enable this to be done appear to have been carried out by, or on, 16 August 1988.

Before that had occurred, the date for the completion of the Share Sale Agreement had passed, and, accordingly, on 9th August 1988, a Notice of Termination had been served on the members of the syndicate, that Notice of Termination being - at least for tactical reasons - disputed.

Meantime, however, Mr Cropper had decided that he did not wish to be involved in the Scotts Head project.

As the members of the syndicate were concerned that, as the result of the service of the Notice of Termination, they might be exposed to liability for damages for breach of the Share Sale Agreement, they approached Mr Jury once more with a view to ascertaining whether he would be prepared to take over "the Scotts Head project". Although it is not entirely clear that this was so, it would seem that, at first, Mr Jury indicated that he would be prepared to have Pallisar Pty Ltd ("Pallisar''), a company which he controlled, purchase the land from Developments if the Share Sale Agreement were able to be completed. However, as the members of the syndicate were unable to arrange sufficient finance to enable them to complete the Share Sale Agreement, an approach seems then to have been made to Mr Jury with a view to his providing the finance to enable the Share Sale Agreement, or a new Share Sale Agreement which was to be substituted for the original, to be completed. To this latter suggestion Mr Jury appears to have agreed.

Although it is by no means clear to me how it came to be so, it would appear that following Mr Jury's agreement, a new Share Sale Agreement was prepared, the vendors being, as before, Mr Vogt and Mr McGlinchey but the purchaser being Donavon, the liabilities of which under the Agreement being guaranteed by Mr Walker and Mr Mitry and by Logwon Pty Ltd ("Logwon') another company

controlled by Mr Jury - as best as can judge it, the reason for this would seem to have been that, at that stage, it was envisaged that Logwon would become the beneficial owner of the shares in Ausam and that, at an appropriate time, Donavon would cause Developments to transfer the land at Scotts Head to Logwon. It seems further to have been envisaged that, when that had been done, Mr Winslett and "Mr Roberts" would resign as directors of Donavon and would transfer shares in Donavon to whomsoever were nominated for that purpose by Logwon.

Although this appears initially to have been the parties' intentions, it would seem that Mr Jury's intentions later changed so that, once more, Pallisar was to become the ultimate purchaser.

The new Share Sale Agreement was executed on 19th August 1988, the vendors being, as before, Mr Vogt and Mr McGlinchey, the purchaser being Donavon, the liabilities of which under the Agreement being guaranteed by Mr Walker and Mr Mitry and - instead of Logwon - Mr Jury himself.

The total sums required to be paid by Donavon amounted to some $2,865,000 00, of which sum the purchase price was $1,476,328.23 and the balance of $1,398,671.77 was to be provided by Donavon either by way of loan, or, by the taking up of equity capital, that sum representing the total amount owing to creditors of Developments - $738,076.14 - or to Mr Vogt as a creditor of Ausam

$656,521.73. Of the purchase price of $1,476,328 23, $100,000.00 was payable by way of deposit, $11,328 23 was payable on completion and the balance of $1,365,000.00 was payable within 90 days of completion. On the execution of the Share Sale Agreement the deposit of $100,000.00 was, in fact, paid by Logwon, one assumes, on behalf of Pallisar.

Although it is not clear that this was so, it seems to be suggested that, at about the time when the Share Sale Agreement was executed, Mr Mitry suggested to Mr Winslett, and that the latter agreed, that he (Mr Winslett) and "Mr Roberts" would sign blank resignations as directors of Donavon and share transfers of the shares in Donavon, which blank resignations and share transfers would then be left with Mr Walker. It seems also to be suggested that, either then, or later, Mr Winslett agreed that he, and "Mr Roberts", seemingly in the character of directors of Developments - as it was then contemplated that they would become - would execute in blank a contract for the sale of, and a Memorandum of Transfer of, the land at Scotts Head to Pallisar. Although blank forms of each of such documents appear to have been delivered to Mr Winslett, and although a form of contract for sale bearing the common seal, not of Developments, but of Donavon, was later delivered to Mr Walker (Appeal Book at 777), none of the documents appears ever to have been executed as contemplated, or returned to Mr Walker.

The Share Sale Agreement was completed on 24 August 1988, at which time Mr Mitry together with Mr Jury and a Mrs Sutton, a solicitor/clerk employed by Mitry Walker, attended at Mr McGlinchey's office for that purpose. On completion, Mr Jury delivered to Mr McGlinchey bank cheques for the amount payable on completion, in favour of the several creditors of Developments and in favour of Mr Vogt in his capacity as a creditor of Ausam, following which there were then delivered to Mr Jury the resignations, as directors of Ausam and Developments, of Mr Vogt and Mr McGlinchey, the common seal, minute book and share register of each of Ausam and Developments and the several Certificates of Title to the various parcels of land making up the land at Scotts Head of which Developments was the registered proprietor - the company

URJ SCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (Powell JA) 9

records appear as if they were then delivered to the office of Messrs Hungerfords or of Messrs Peat Marwick and Mitchell ("Peat Marwick") (see Appeal Book at 784).

Although it is not clear when this occurred, it would appear that, despite the fact that the balance of the purchase price was not paid within 90 days of completion, and despite the fact that, because of that fact, proceedings to recover the balance of the purchase price were thereafter commenced, the balance of the purchase price had been paid to Mr Vogt before these proceedings were to come on for hearing.

After the Share Sale Agreement had been completed, Mr Mitry returned to his office where he was met by Mr Winslett and a Mr George Savvas, the former of whom asked him "Do you have my cheque for $100,000.00" to which he (Mr Mitry) replied "I don't know what you are talking about" To this, so it seems, Mr Winslett then said "It is the money for my commission and I need it now" to which Mr Mitry replied "I am sorry I do not know anything about that and no-one has mentioned it to me" After Mr Winslett and Mr Savvas had left Mr Mitry's office, Mr Mitry telephoned Mr Jury who, so it seems, told him that, as far as he (Mr Jury) was concerned, he was not aware of any obligation to pay any commission whatsoever to Mr Winslett.

It would seem that, in the course of the following days, Mr Winslett, on a number of occasions, telephoned Mr Walker pressing for payment of his commission - a claim which Mr Walker rejected upon the ground that the conditions to which Mr Winslett's entitlement was subject had never been fulfilled - and also telephoned Mr Jury who told him that he recognised no obligation to pay him (Mr Winslett) any commission whatsoever.

Although Mr Winslett (Appeal Book at 788) was to admit on the hearing of the proceedings that it was never the intention of the parties that he have any beneficial interest in the land at Scotts Head or that he be given any charge against the assets of Developments (Appeal Book p. 788), and that his only claim was "to (his) commission $100,000.00 and 10 blocks of ground that was promised to (him) by the previous syndicate" it seems clear enough that, having been rebuffed by Mr Mitry, Mr Walker and Mr Jury, he (Mr Winslett) formed the opinion that the only way in which he might secure payment of his commission was by making himself as obstructive as possible, or, to use his own charming - but less than delicate - phrase, "being 'a pain in the arse"' (Appeal Book at 788).

Although the state in which the evidence has been left is such as to make it difficult, in the extreme, to determine quite how it was that Mr Winslett took the various steps which he did, the narrative upon which I am about to embark, as best as I can judge it from such evidence as there is, records what is said to have occurred.

Although the probability is that it was not executed on 24th August 1988, the date which it is said to bear, the evidence suggests that at some time - but how completely escapes me unless he managed to obtain the common seal from Hungerfords or from Peat Marwick - Mr Winslett had had prepared and had had purportedly executed by Developments, a Deed of Charge whereby Developments purported to charge its property in his favour to secure the payment to him of the sum of $1,387,000.00, which charge was then registered with the Corporate Affairs Commission ("CAC").

It further seems that, at some time in September 1988, Mr Winslett went to Mr Bobb's offices, where, the records of Donavon were then kept and having identified himself as one of the new directors of Donavon, sought to examine the

records of Donavon. After the records had been produced, Mr Winslett then surreptitiously removed them from Mr Bobb's office.

It would seem that, not long after this occurred, Mr Jury became aware of what Mr Winslett had done and, assuming - no doubt rightly - that Mr Winslett's co-operation in having the land at Scotts Head transferred to Pallisar could no longer be relied upon, determined to take matters into his own hands As best as one can judge it (Appeal Book at 609 et seq) Mr Jury, having taken some advice, purported to convene a meeting of Donavon, at which meeting he purported to have two of his employees, Mr Visser and Mr Zoranias appointed directors of Donavon, and then of Developments After this had been done, Mr Visser and Mr Zoranias, purporting to act as directors of Developments, and using the common seal of Developments which had been handed over to Mr Jury on the completion of the Share Sale Agreement, executed a form of contract for the sale of the land at Scotts Head to Pallisar, the consideration being sid to be $995,000 (Appeal Book at 626); and a form of Memorandum of Transfer of that land in pursuance of that contract. That form of contract and that form of Memorandum of Transfer were prepared, not by either Mr Walker or Mr Mitry, who seem by this time, to have severed their previous partnership, but by Mrs Sutton who seems, after the dissolution of the Mitry Walker partnership, to have taken over some of the clients of the firm. Thereafter, the Memorandum of Transfer was lodged at the Land Titles Office, following which Pallisar became the registered proprietor of the lands at Scotts Head.

Although, again, the evidence is less than clear, it would seem that at about this time (see Appeal Book at 780), Mr Winslett had had prepared, and lodged at the Land Titles Office, a Caveat, or Caveats, claiming, in respect of the lands at Scotts Head, a charge to secure the sum of $1,387,000.00 which he claimed to be owed to him by Developments. However, as it would appear that, by the time the Caveat was, or the Caveats were, lodged, Pallisar had become registered as the proprietor of the lands that Caveat was rejected. Thereafter - but seemingly not until December 1988, at which time, so he says, he first became aware that the lands had been transferred into the name of Pallisar - Mr Winslett caused to be lodged a further Caveat, or Caveats, against the subject land but the nature of the interest in the land which was claimed by him in that Caveat, or in those Caveats. is anything but clear.

Although, yet again, the position appears to be anything but clear, it seems as if it would have been at about this time when Mr Winslett purported to allot to "Mr Roberts" and to himself two parcels - each of 3,000 - of shares in the capital of Developments.

Although it is not clear that this was so, the probability is that, on 2nd December 1988, there was filed on behalf of Pallisar and Mr Jury the Summons in the first of these proceedings, in which Summons there was sought against Donavon (in the Summons described as the First Defendant) Mr Winslett (in the Summons described as the Second Defendant) and "Mr Roberts" (in the Summons described as the Third Defendant) the following (inter alia) relief:

A Declaration that the 4,999 shares in Ausam Pty Ltd the subject of a transfer by Harry Eugene Vogt to the first defendant are held on trust for the first plaintiff.

An order that the first defendant transfer the 4,999 shares in Ausam Pty Ltd referred to in paral of the first plaintiff.

URJ SCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (Powell JA) 11

A declaration that the one share in Scotts Head Development Pty Ltd the subject of a transfer from John Joseph McGlinchey to the first defendant is held in trust for the first plaintiff.

An order that the first defendant transfer the one share in Scotts Head Development Pty Ltd referred to in para3 to the first plaintiff.

A declaration that the one share in Ausam Pty Ltd, the subject of a transfer from John Joseph McGlinchey to the second defendant is held in trust for the second plaintiff.

An order that the second defendant transfer the one share in Ausam Pty Ltd referred to in paraS to the second plaintiff.

An order that the second and third defendants be restrained from dealing with the property of the first defendant other than with the consent of the plaintiffs.

A declaration that the Charge in favour of the second defendant over Scotts Head Developments Pty Ltd is of no effect.

An order that the Charge in favour of the second defendant over Scotts Head Developments Pty Ltd as removed. "

That Summons appears as if it were made returnable at short notice.

The filing of the Summons appears as if it came to the attention of Mr Winslett on the same day, or within a day or two thereafter, for it is said that, within a few days of 2nd December 1988, Mr Winslett had a discussion with his accountant, Mr JC Harrison - who claims to have been involved in, and to have advised Mr Winslett concerning, the latter's various actions in relation to the Scotts Head project - in the course of which conversation Mr Winslett said to Mr Harrison "T've just had a meeting with Ray Roberts who has just resigned as a director and shareholder of the companies Donavon Holdings Pty Ltd, Scotts Head Development Pty Ltd and Ausam Companies Pty Ltd. Will you agree to become a director and shareholder in those companies", to which Mr Harrison replied "Yes, you had now better lodge the Form 61's with the CAC". This appears as if it may have occurred on 5th December 1988 on which day there seems to have been lodged with the Corporate Affairs Commission a form of Particulars and Changes of Particulars in the Register of Directors and Officers of Donavon (see Appeal Book at 966) and a form of Return of Allotment of Shares in Donavon purporting to record the allotment to Mr Harrison for services rendered as an accountant,some 5,000 shares (see Appeal Book at 784).hat it is suggested - although when it was that it is said to have occurred.

It seems also to be suggested that, at about the same time, Mr Winslett - or, perhaps, it was Mr Winslett and Mr Harrison - purported to allot to Mr Harrison a parcel of 4,000 shares in the capital of Developments, the consideration for such "allotment" being said to have been accountancy services alleged to have been provided to Developments.

Thereafter, Mr Winslett, purporting to act on behalf of Developments, retained a firm of solicitors Hovan and Co to commence proceedings against Pallisar in relation to the transfer to Pallisar of the land at Scotts Head. It would seem that, in pursuance of those instructions, an application was made to McLelland J (as he then was). On 7th February 1989 for leave to file, and to give short notice of, a Summons in which there was claimed on behalf of Developments as against Pallisar (in the Summons described as the First Defendant) and the Registrar-General (in the Summons described as the Second Defendant) the following (inter alia) relief:

"1. A declaration that the First Defendant holds the land described in the schedule together with an and any profits derived therefrom upon trust for the Plaintiff absolutely.

An order that the First Defendant do an things and execute an documents necessary or appropriate to be done to transfer the land in the schedule to the Plaintiff.

An order that the First Defendant account to Plaintiff for an and any profits derived by it from the land in the schedule.

An order that pending determination of these proceedings the First Defendant be restrained deposing (sic) of or otherwise dealing with the land in the schedule otherwise than with the consent and at the direction of the Plaintiff.

An order that pending the determination of these proceedings the Second Defendant be restrained from registering any dealing with the land in the schedule, including any dealing already lodged and not yet registered otherwise than with the consent and at the direction of the Plaintiff."

For some reason which escapes me, no challenge was made, either then, or later, to the retainer of Hovan and Co or of Dennis and Co - which claimed later to act on behalf of Developments - in relation to the proceedings.

As best as I can judge it, both sets of proceedings appear to have been listed before Young J on 23rd November 1989, but for what purpose I am unable to say. However, although it is not clear that this was so, it seems at least likely that, on that day, application was made on behalf of Pallisar to amend the first of these proceedings by adding Mr Harrison as a Fourth Defendant and by amending the Summons so as to add the following two further prayers:

"8A A declaration that the allotment of shares in Scotts Head Developments Pty Ltd in favour of each of the second third and fourth defendants is void and of no effect.

8B In the alternative to para8A, an order that the shares referred to in para8A be transferred to the first plaintiff."

It would further seem that, on the same day, application was made on behalf of Pallisar in the second of the proceedings to file a Cross-Claim in which it sought as against Developments the following (inter alia) relief:

"1. An order that the cross defendant remove its caveat over the property set out in the schedule below.

An order that the cross defendant be restrained from lodging any further caveat over the property set out in the Schedule below."

In each case, the appropriate Orders seem to have been made and, either, the hearing of the proceedings adjourned to, or, the hearing of the proceedings fixed for, 27th November 1989.

Quite what it was which led to the varied appearances on 27th November 1989 is not entirely clear, but perhaps it was that, whereas Mr Winslett appears only to have been interested in securing the payment of "his commission", Mr Harrison had determined to procure for Developments - and, thus, indirectly for himself- the title to the land at Scotts Head. Be that as it may, when the proceedings were again listed before Young J on 27th November - on which day the second in point of time of the proceedings was listed first, while the first in point of time, was listed second - Mr BV Dennis appeared for Developments, Mr WG Hodgekiss appeared with Mr GA Moore for Pallisar, Mr PB Walsh - instructed by Hovan and Co - appeared for Donavon and Mr Winslett, there was - not unsurprisingly - no appearance on behalf of "Mr Roberts", while Mr Harrison appeared in person -

URJ SCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (Powell JA) 13

Mr WL Wright who had appeared for the Registrar-General to submit to such order other than as to costs as the Court might see fit to make was excused from further attendance.

Prior to the commencement of the hearing of the proceedings, leave was sought by, and granted to, Mr Winslett to file a Cross-Claim in which he sought as against Mr Jury the following (inter alia) relief:

"1. A Declaration in the events that have occurred, the Cross Claimant is entitled to have the oral contract made in August, 1988 for the performance of certain services by the Cross- Claimant at the request of the Cross-Defendant specifically performed and carried into effect.

An Order that the Cross Defendant do all things necessary to specifically perform and carry into execution the said contract.

In addition to or in lieu of specific performance of the said contract, an Order that the Cross Defendant pay to the Cross Claimant the damages which the Cross Claimant has sustained by reason of the refusal and neglect of the Cross Defendant to perform the said contract and the matter be referred to the Master for an assessment of the amount of damages."

After some preliminary matters had been dealt with, Young J then, by consent, ordered that both proceedings be heard together, Pallisar to have the carriage of the matter. Although there was no formal Order made by His Honour that the evidence in each of the proceedings, so far as was relevant, be evidence in the other, the hearing appears to have proceeded on the basis that such an Order had been made.

Thereafter, the hearing proceeded on 27th, 28th, 29th November and Ist December 1989, on the last of which days following the conclusion of the evidence, Mr Dennis addressed on behalf of Developments. Leave appears then to have been reserved to the other parties to file written submissions, those on behalf of Pallisar being delivered on 15th December 1989, extensive submissions

some 74 pages in length - being filed by Mr Harrison on 31st January 1990, short submissions by Mr Walsh on behalf of Mr Winslett being filed on 13th February 1990 and the submissions in reply on behalf of Pallisar being filed on 19th February 1990.

As the length of the submissions which he was later to file would suggest, Mr Harrison, although not having been joined as a party- Defendant until but a few days prior to the commencement of the hearing before Young J, took an active role in the conduct of the proceedings - in addition to calling a number of witnesses - including people who had acted on behalf of what might be called *the Jury interests" - Mr Harrison appears to have carried by far the greatest burden of the cross-examination of the witnesses who had filed affidavits on behalf of "the Jury interests' with Mr Dennis' contribution to cross-examination being limited in the extreme, while Mr Walsh's cross-examination appears to have been limited to attempting to obtain admissions which would tend to support the Cross-Claim which had been filed on behalf of Mr Winslett.

That this is not an overstatement of the position and that what occurred during the course of the hearing very clearly led to the special order as to costs which was made by Young J when he delivered that Judgment in March 1990, is I suggest made clear by the following passage in the transcript at the commencement of the second hearing day, 28th November 1989:

"HIS HONOUR: I will have it noted that an the parties, other than Mr Harrison would be in favour of limiting the issues in this case to one, namely, whether the defendant Winslett is entitled to $100,000 plus 10 blocks of land at Scotts Head.

Mr Harrison is not content to say that that is the only issue in the case. He wishes to continue to litigate the issue as to whether Mr Jury's company Pallisar Pty Ltd or Mr Jury himself is entitled, as the beneficiary, to the shares in Ausam Pty Ltd (sic) as opposed to only being entitled to repayment of loan funds to Mr Winslett to enable Donavon Holdings to purchase the land. It being the situation that ane litigant wishes to keep pressing with an the issues, it seems that the only thing I can do is to try an the issues, but I have made those notes because they will be relevant as to costs."

If I may, with respect to Young J say so, in proceeding as he thereafter did, he was being overly generous to the position of Mr Harrison I say this since if the position were - and the transcript does not record any dissent from his statement

then the only issue which Mr Harrison was entitled to litigate was that raised by prayers 8A and 8B of the Amended Summons in the first of these proceedings
those being the only proceedings to which Mr Harrison had been joined as a party - insofar as those prayers related to the shares in developments which had purportedly been allotted to him.

Further, if the position were as His Honour recorded in the passage which I have set out above, there would have remained no issue outstanding, as between Pallisar and Mr Jury - for whom Mr Hodgekiss and Mr Moore appeared - on the one hand and Donavon and Mr Winslett - for whom Mr Walsh appeared - on the other hand in the first of the proceedings so that declarations and orders in terms of at least prayers | to 7, and in addition, prayers 8A and 8B insofar they affected Mr Winslett and "Mr Roberts" might then have been made.

Further still, if the position were as His Honour recorded in that passage, there would have remained no outstanding issue in the second of the proceedings as between the two active parties, Pallisar - for which Mr Hodgekiss and Mr Moore appeared - and Development - for which Mr Dennis appeared - so that those proceedings might then have been dismissed and Orders at least in terms of prayers | and 2 in the Cross- Claim then made.

If the procedure which I have suggested might then properly have been adopted, had, in fact, been adopted, then there would have remained outstanding only two issues, they being:

whether the shares in the capital of Developments which had purportedly been allotted to Mr Harrison had been validly allotted, and, if so, whether he held those shares beneficially; and

whether the agreement which Mr Winslett sought to set up in his Cross-Claim had been made, and, if so, to what remedy for the alleged breach of that agreement was Mr Winslett entitled.

However, as is apparent from what I have earlier recorded, that course was not adopted, so that the hearing proceeded, in large measure, to no real purpose. That the comment which I have just made is not a overstatement is, I suggest, made clear by the following passage at arms which occurred early on the third hearing day (Appeal Book at 714)

"HIS HONOUR: So far, Mr Harrison, you are going out backwards. Do you want to keep going?

Accordingly the hearing proceeded on its pointless way and, despite his hold assertion. Mr Harrison never did "get there".

hen he came to deliver Judgment on 20th March 1990, Young J, so far is relevant to the present Appeal held:

that Pallisar should be declared to hold the land at Scotts Head beneficially;

URJ SCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (Powell JA) 15

that Mr Winslett had failed to make out the agreement with Mr Jury which he sought to set up in the Cross-Claim.

"It seems to me, in the circumstances, that an I need to to order removal of the Caveats which have been placed on Pallisar's title and dismiss Mr Winslett's Cross-Claim. There may be various procedural matters which should be the subject of orders and there is also the question of costs. Prima facie the Jury interests have succeeded on an grounds, but there may be something that can be said on the question of costs as to the effect of the unauthorised and unilateral action taken by Mr Jury and his associates to have Pallisar registered as proprietor of the land. There may be other things that might be said as wen. In the circumstances, it seems to me that I should, in due course, hear counsel on costs and this can be done when Short Minutes are handed up dealing with the matters raised in these reasons."

Although the appeal papers do not disclose when it was that it occurred, it seems tolerably plain that, at some time prior to 17th May 1990 when the formal Orders in the second of these proceedings were entered, Short Minutes were brought in and argument occurred before Young J as to the form of any Declarations and Orders to be made and as to costs.

The formal Order in the first proceeding, so far as is relevant was in the following terms:

Declares that the First plaintiff as between itself and the defendants is the beneficial owner of an the property referred to in the schedule hereto.

Orders the second defendant to pay the plaintiff's costs of the Summons and Amended Summons.

Orders the fourth defendants to pay one-third of the plaintiffs' costs of the Summons and Amended Summons as were incurred since 23rd November 1989 and are not recovered from the second defendant.

Orders the Cross-claim by Raymond George Winslett be dismissed.

Orders Raymond George Winslett pay the costs of the said Cross-Claim."

While the formal Orders which were made in the second of these proceedings were as follows:

Orders that the cross defendant remove its caveat over the property set out in the Schedule below;

Orders that the cross defendant be restrained from lodging any further caveat over the property set out in the Schedule below;

Orders that in default of any order in the previous paragraph then a Registrar of the Court to execute such documents as are necessary to implement the orders in the previous paragraph of these orders.

Order that the plaintiff pay the costs of the Defendants.

Thereafter, there was filed a Notice of Appeal - the date of which and the contents of which are not revealed by the appeal papers - and an Amended Notice of Appeal which was filed on 24th May 1991 by Dennis and Company on behalf of Development, Mr Harrison and Donavon. The Respondents to that Notice of Appeal - which purported to embrace both sets of proceedings - being Pallisar, Mr Jury, "Raymond George Winslett (aka Raymond John Roberts)" and the Registrar-General. I see no purpose in recording the grounds of appeal taken in that Notice of Appeal for the draftsman of it appears to have been overcome with

a severe case of logorrhea, there being some 35 grounds of appeal, many of which are not even intelligible English, and most of the rest of which are totally lacking in substance.

Although they were not the subject of the formal evidence before the Court. On the nearing of the Appeal, material which had been filed prior to the Appeal coming on for hearing coupled with what the Court was told on the hearing of the Appeal would tend to indicate that, both Ausam and Donavon had been deregistered, the date of dissolution of the former being 10th July 1992 and the date of dissolution of the latter being 24th June 1993, while Mr Winslett had been convicted of some offence in respect of which he was at the time of the hearing in gaol.

When the Appeal came for hearing, Mr Dennis who appeared for Developments informed the Court that he had been requested by Mr Harrison to cease acting for him but that, while appearing for Developments, he wished to do no more than adopt the submissions which had been prepared by and which it was proposed would be advanced by Mr Harrison on behalf of both Developments and himself. Given what I have earlier recorded, it will come as no surprise when I record that these submissions were some 87 pages in length many pages of which were directed to matters which were of not the slightest relevance.

As permitting that course to be adopted would, in substance, having involved the Court in granting to Mr Harrison leave to appear for and argue the case Oh behalf of Developments and as Mr Hodgekiss, who, as before, appeared for Pallisar and Mr Jury, objected to such a course being adopted, it became necessary for the Court to examine the matter a little more closely before determining what course ought to be adopted. In the course of the discussion which then took place, Mr Harrison seemed to advance to bases upon which, so he suggested, the Court ought to grant him leave to appear for Scotts Head, they being:

that he was, in any event, entitled to appear in person to support his appeal against the Order for costs made in respect of him in the first proceedings, and

that - so he said - he and his wife were the sole shareholders in directors of Developments it following that - so he said - he was appearing.

The force of these submissions was, however, in my view, greatly diminished by the facts:

that, although, as I have earlier recorded, sought a Declaration, or in the alternative, an Order against (inter alia) Mr Harrison in relation to the shares in the capital of Developments purportedly allotted to him, in the event, no such Declaration or Order was made, and the only Order made against Mr Harrison was an Order in relation to costs, that Order, in any event, being of a limited nature. This being so, any appeal by Mr Harrison in respect of that Order lay, not as of right but only by leave, which leave, had neither been sought nor granted; and

that even if it were the fact that Mr Harrison and his wife were the only shareholders in, and directors of, Developments - the validity in law of which assertion is, in my view, in the circumstances which I have recorded above, subject to the gravest of doubts - that fact would not. without more justify the grant of the leave sought.

In the event at the conclusion of that discussion, the Court indicated:

URJ SCOTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (Powell JA) 17

that Mr Harrison would not be permitted to appear for, or to make submissions on behalf of, in the way which had been suggested but that, in the light of what had been said by Mr Dennis, it would treat the written submissions as having been adopted by Developments; and

that as Mr Harrison appeared to accept that, unless the Appeal by Developments were to succeed, the Order for costs which had been made against him could not successfully be challenged, it would treat Mr Harrison as having made an application for leave to Appeal in respect of that Order and would determine the fate of that application in the light of the fate of the Appeal by Developments.

In joining with the other members of the Court in declining to give Mr Harrison the leave which he sought, in substance to appear for, and to make submissions on behalf of, Developments, I was influenced not merely by the fact that Mr Dennis remained On the record as Development's solicitor, nor by the fact that the established rule of the Court is that, except as provided by or under any act, a corporation may not commence, or carry on, any proceedings otherwise than by a solicitor, but by one of the reasons which underlies the policy reflected in that rule of court, namely, that it is important for the due administration of justice that those appear for a party before a court may be regarded by the court as persons who are responsible to it, to their clients and to the other parties to the litigation to ensure that the court is properly informed and not misled. As will be apparent from what I have earlier recorded, I remain to be persuaded that Mr Harrison was ever validly allotted shares in the capital of either Donavon or Developments or was ever validly appointed a director of either company and still less that he and his wife are now the only shareholders in and directors of Developments.

In the result, as it seems to me the fate of this Appeal turns upon the answer to a simple question.

It being the fact that Pallisar had prior to the commencement of either of these proceedings become registered as the proprietor of the land at Scotts Head, then, having regard to the provisions of the Real Property Act 1900, Developments bore the onus of establishing that it had whatever interest it claimed in that land and, further, that that interest prevail over the interest of Pallisar as registered proprietor. What I have earlier recorded as to the manner in which the hearing proceeded before Young J would appear to demonstrate first that those acting for Developments accepted that Developments had no such interest in the land, and that both the legal and beneficial title to the land resided in Pallisar. But even if that were not so, nothing which is contained in the written submissions which were prepared by Mr Harrison and adopted by Mr Dennis for the purposes of this Appeal and nothing which was said by Mr Dennis in the course of his short oral submissions in support of the Appeal, has persuaded me that, either at the time of the commencement of these proceedings or at the time of the hearing before Young J, Developments retained any beneficial interest in the land. This being so, and despite the irregularity involved in his making a Declaration as to the title of the land in the first of the proceedings, to which proceedings Developments had not been joined as a party-Defendant, Young J did not fall into error when, in the second of the proceedings, he ordered the withdrawal of the Caveat which had been lodged on behalf of Developments.

This being so, I conclude that insofar as it affects Developments, the Appeal should be dismissed with costs.

In the light of that conclusion and of the indication given by him during the course of the discussion to which I have earlier referred, it follows that leave should not be granted to Mr Harrison to appeal and that insofar as it affects him, the Appeal, being incompetent, should be dismissed with costs.

For these reasons I would propose the following formal Orders:

In each of these proceedings ORDER that the Appeal be dismissed.

In each of these proceedings ORDER that the Appellant or Appellants pay the costs of the Respondent or Respondents, Pallisar Pty Ltd and Eric Abraham Jury.

O'Keefe CJ Comm Div This is an appeal from a decision of Young J given on 20 March, 1990. There were two proceedings before him which were heard together, ED5009 of 1988 and ED1331 of 1989. They involved a large area of vacant land at Scotts Head in the Nambucca Shire. The title to the land is under the provisions of the Real Property Act and until the middle of 1988 the registered proprietor of the land was Scotts Head Developments Pty Ltd. This land was later transferred to Pallisar Pty Ltd, which became the registered proprietor. The circumstances in which this and associated transactions occurred were the subject of considerable dispute at the trial, as were the circumstances in which a caveat was lodged on the title to the land to secure a somewhat nebulous interest which Scotts Head Development Pty Ltd claimed in the land, but was said to be in the nature of a charge to secure an amount of $1,387,000 claimed to be owing by Scotts Head Developments Pty Ltd to one of the defendants, Mr Winslett. Powell JA has set out the facts in relation to the matter in considerable detail and it is therefore unnecessary for me to repeat them. However it is convenient to summarise the issues raised for decision before Young J. Those issues were stated by him to be as follows:

A Who is the beneficial owners of the shares in Ausam Companies Pty Ltd and Scotts Head Development Pty Ltd?

B Was any money provided by Pallisar Pty Ltd for the purchase of the Scotts Head land advanced by way of loan?

C In an the circumstances is Scotts Head Development Pty Ltd entitled to be restored to the register as registered proprietor of the Scott Head land?

D Is Mr Winslett entitled to any payment by way of any commission, and if so, what, from whom and in what amount?

E Questions of illegality involving a conspiracy to defraud the revenue. F Problems created by the evidence given by Mr RG Winslett, the second defendant in proceedings ED 5009 of 1988.

Young J answered the questions posed in the case as follows:

A Pallisar Pty Ltd holds the Scotts Head land beneficially.

C Technically yes, but as equity does nothing in vain and as Pallisar Pty Ltd is the beneficial owner of the land it would be a waste of time making any decree.

E If there were any conspiracy to defeat or purpose of defeating the revenue it was never put into effect.

F There are disturbing aspects of Mr Winslett's evidence as a result of which a copy of parts of his evidence should be forwarded to the appropriate Crown authority to consider whether action should be taken under the criminal law in respect of such evidence.

\RDTTS HEAD DEVELOPMENTS PTY LTD v PALLISAR PTY LTD (O'Keefe CJ Comra Div)

As a consequence of these findings the formal orders of the Court resulted in Pallisar Pty Ltd being declared the beneficial owner of the land at Scotts Head, an order being made for the removal of the caveat over such land and an injunction being granted restraining the lodging of any further caveat over it. In addition Mr Harrison was ordered to pay one third of the costs incurred after 23 November, 1989 in the first proceedings to the extent that they were not recovered from Mr Winslett. There were other consequential orders not relevant to the present appeal.

Although the Notice of Appeal filed in the matters contains thirty five grounds, there are only three that can for consideration. They relate to the determination that Pallisar Pty Ltd was the legal and beneficial owner of the land at Scotts Head, the refusal to restore Scotts Head Developments Pty Ltd to the register as registered proprietor of the land and the order for costs made against the second appellant, Mr JC Harrison, who was the fourth defendant in proceedings number 5009 of 1988. Powell JA has dealt with the procedural problems involved in relation to the appeal and I agree with what he had said in that regard.

At the trial, those acting on behalf of Scotts Developments Pty Ltd accepted that the legal and beneficial title to the Scotts Head land was in Pallisar Pty Ltd and that Scotts Developments Pty Ltd had no interest in the land which would prevail over it as the registered proprietor. That being so the declaration which 'Young J made was virtually inevitable, as was the order that the caveat on the title be removed. The only real question before him (as he said in his judgment - at 17) was that posed in question D ie relating to Mr Winslett's claim for commission. That question was resolved as a question of fact by His Honour. He preferred the evidence of a Mr Jury to that of Mr Winslett, whose evidence he found to be such as to warrant its reference to the Crown authorities. The preference for Mr Jury's evidence depended substantially upon His Honour's impression of the demeanours of the competing witnesses, Mr Jury and Mr Winslett. When regard is had to the fact that Mr Winslett swore two affidavits containing details of fictitious conversations in which he created a fictitious life history and financial position for a fictitious person and that he also signed the name of such fictitious person for the purposes of deceiving Mr Jury, it is not hard to understand why His Honour did not accept Mr Winslett's evidence and preferred that of Mr Jury. His decision in this regard is not one which should be interfered with, indeed on the face of the judgment, it appears correct.

Long written submissions were filed in the appeal, but I agree with Powell JA that there is nothing in them which should cause this Court to find that Scotts Head Developments Pty Ltd retained any beneficial interest in the land at Scotts Head. It follows that the trial judge did not fall into error when he made the declaration relating to such land and ordered the removal of the caveat which had been lodged on behalf of Scotts Head Developments Pty Ltd The order for costs involved the exercise of a discretion. The trial judge exercised this discretion in accordance with established principle. The costs followed the event and were apportioned between Mr Harrison and Mr Winslett. No error is demonstrated in respect of the exercise of this discretion.

There is one other matter to which I should refer, namely, the application by Mr Harrison for leave to represent Scotts Head Developments Pty Ltd, of which he claimed to be one of the directors. I have had the benefit of reading in draft the judgment of Mahoney AP in relation to this aspect of the appeal and I agree with what he has said. In addition it should be remembered that Pt4 R4(2) of the Supreme Court Rules provides:

"Except as provided by or under any Act, a corporation may not commence or carry on any proceedings otherwise than by a solicitor"

That rule has, as Samuels JA points out in Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104 at 110, been consistently and strictly applied; and, in my opinion, for good reason. In addition in Re Education Pty Ltd and the Companies Act - 1936 - 1960 (1963) 80 WN (NSW) 497 McLelland CJ in Eq held that the common law forbade a corporation to appear other than through a legally qualified person. I agree with Samuels JA that this remains the law and that the power, if any, to dispense with the application of the above rule and the common law should be exercised only in exceptional cases and then only subject to appropriate conditions.

I agree with the orders proposed by Powell JA in respect of each of the appeals.

For these reasons I would propose the following formal Orders:

In each of these proceedings ORDER that the Appeal be dismissed.
In each of these proceedings ORDER that the Appellant or Appellants pay the costs of the Respondent or Respondents, Pallisar Pty Ltd and Eric Abraham Jury.

Counsel for Appellant (Scotts Head): BV Dennis (Solicitor) Instructed by: Dennis and Co

Counsel for the Respondents: WG Hodgekiss (Pallisar and Jury) Instructed by: DJ Balog and Associates

Counsel for the Respondent (Winslett): No appearance

At a glance

Court

Decision date

Before

Source

Judgment (183 paragraphs)

Parties

Cases Cited (4)