The allegation of conspiracy or collusion to explain the applicant being misled by the undertaking to the L&E Court
29 If the applicant is correct about there being a material difference between the benefit the applicant thought that she would be getting and the benefit she would in fact be getting from the undertaking given by her neighbours (and I later assume that to be so), that might rationally be thought to have arisen due to error, misunderstanding, miscommunication, a canny or even deceptive opponent, or perhaps negligent advice on the effective settlement. However, in the proceedings in the Federal Circuit Court and in this Court, as well as elsewhere, the applicant did not accept any benign explanation for what happened.
30 The applicant relied, and continues to rely, on sinister and improper reasons for the terms of the undertaking given to the L&E Court in aid of the 2004 Consent Orders, motivated by malign intent on the part of everyone around her at the time. An affidavit by Mr Leonardo Carlo Muriniti, the principal of L.C. Muriniti & Associates, the solicitors on the record for the applicant in these proceedings and in the Court below, sworn 30 September 2015, filed in the Federal Circuit Court proceedings and admitted into evidence on this application deposes to the following - noting that most of what follows is in the format of assertion and conclusion:
(1) there had been a long-standing history of the applicant's local council failing to address, or even acquiescing to, historic unauthorised building works taking place at the property next door, long before the present neighbours even became the owners;
(2) the local council wanted to engage in a "cover up" of their historic "delinquent and corrupt conduct";
(3) in order to perpetuate this alleged cover up, the council "conscripted" the assistance of the applicant's own lawyers, and a wider "conspiracy" was hatched which also involved the neighbours' lawyers;
(4) the present respondents, in their capacity as the expert engineer and his employer company retained by the applicant, contributed to this nefarious outcome by what the applicant's solicitor asserted was their "dishonest conduct" and "wilful disregard and breaches of … their obligations under the Expert Code of Conduct";
(5) the respondents were also "conscripted" and were "initially brought into the matter ostensibly as hydraulic experts on behalf of the applicant", but had only addressed ground water and not surface water - the explanation given by the present second respondent in the L&E Court that he had not been asked to consider surface water by the applicant's then solicitors was dismissed in this affidavit as "completely unsatisfactory";
(6) what was "now known" was that the respondents were working collaboratively with the council, the applicant's former lawyers, the neighbours' solicitors and a number of other experts to "create a false version of reality", apparently a reference to the undertaking given by the neighbours to the L&E Court and noted as part of the 2004 Consent Orders; and
(7) the undertaking was the means by which the applicant would be left with an unacceptable outcome to which she would have purportedly acquiesced.
31 The reliance on a conspiracy was maintained in the written submissions for the applicant in this Court, which were signed by Mr Muriniti. Those written submissions contain references to the malign intention of the local council, and to the L&E Court proceedings being conducted so as to cause the applicant to think that she was getting the benefit of a solution to the drainage problem coming from her neighbours' land, but was in fact being burdened with that problem and being made to look like she was agreeing to that burden. The present respondents were said to have knowingly contributed to that false representation being made to the applicant, being an inference to be drawn by the terms of the undertaking and documents that were said to contradict those terms, with references made both to conspiracy and to misconduct on the part of the respondents.
32 In oral submissions for the applicant made by Mr Newell, a former barrister and now solicitor advocate employed by the firm of solicitors acting for the applicant, it was said that:
(1) the "gravamen of her [the applicant's] allegations [was] that there was a conspiracy according to which the council intended to shift the burden of drainage to her land from that of [her neighbour's land]";
(2) "it was the misconduct of the respondents informed by the fact of a conspiracy, that is to say that what they did was deliberate as opposed to accidental";
(3) "The conspiracy is to deceive the applicant for the purpose of creating an obligation by which she has a drain on her side of the boundary";
(4) the conspirators were "Initially, the Kings [the neighbours] and the council", later joined by the applicant's former lawyers and the applicant's former experts [being the present respondents];
(5) the existence of the conspiracy was "all to be inferred from conduct";
(6) "It's a conspiracy if it was represented to be drain and retain and there was no such intention" and "if they all agreed to participate in that same outcome, that's the conspiracy. A single person's conduct in holding out to the court it's drain and retain or to the applicant in the court is serious misconduct if they intend something fundamentally different with different implications for her obligations and for the future of her house. If they work together to achieve that, then you have a conspiracy …";
(7) the applicant's case was "not a cause of action in conspiracy, it's a section 98 claim [referring to s 98 of the Civil Procedure Act 2005 (NSW) concerning the powers as to costs]. The evidence of conspiracy is simply the factual matrix in which the breach of the expert code of conduct occurs", but the breach of the code of conduct was part and parcel of the second respondent's component or contribution to the alleged conspiracy.
33 The oral submissions by Mr Newell for the applicant also referred to the terms of the undertaking, contemporaneous correspondence, certain affidavits and other documents, and parts of the transcript from the Federal Circuit Court hearing and the hearing before Sheahan J on 2 December 2015 in Young v King (No 9).
34 Mr Newell's argument about what the terms of the undertaking in fact meant, the work that was in fact required to be carried out to address the problem created by excavation, and the material difference between the two, entails understanding some convoluted, and indeed confusing, arguments advanced by him. Those arguments were disjointed, laced with technical terms and asserted regulatory and other legal and technical requirements, and were very difficult to follow, let alone understand. I do not consider that I need to become a de facto L&E Court judge and attempt to decide whether this threshold argument is correct or not.
35 For present purposes only, and because it does not affect the outcome of this application and therefore prejudice the respondents, I am prepared to assume in the applicant's favour that there is an arguable case that:
(1) there was a material difference between the benefit that the applicant thought that her neighbours, acting upon their undertaking, would give her and what in fact that benefit would be; and
(2) the applicant had been misled in that regard.
36 I am thereby giving the applicant the benefit of those parts only of the argument advanced by Mr Newell. However, I expressly do not take the next step of making any assumptions in the applicant's favour as to how or why such an assumed misleading of the applicant took place. That is largely because that critical part of the applicant's case depends on her establishing at least a prima facie or arguable case as to the existence of an alleged conspiracy (to which the respondents are alleged by her to have been either parties, or at least knowing contributors in deliberately assisting in the misleading of her by way of improper collusion).
37 It was accepted by Mr Newell that in order for the applicant to succeed in this Court, her conspiracy claim would have to be accepted, at least to a prima facie level. That was an unavoidable concession given the way in which the applicant's case was presented and argued both in the Federal Circuit Court and in this Court. As is apparent from the above summary of parts of the affidavit of Mr Muriniti, the substance of which was maintained in oral and written submissions, the applicant's case before the primary judge and before this Court relied upon the only reasonable explanation for the terms of the undertaking that she regarded not just as unsatisfactory, but fraudulent, being a collusion between not just her neighbours, their lawyers, and their expert witness in achieving an unduly favourable outcome against her, but also involving her own lawyers, her own expert witness and his employer company (who together are the present respondents), officers of the local council and others. That alleged collusion has been advanced on the applicant's behalf as being in the nature of a conspiracy to defraud her of what she was entitled to obtain from her success in the L&E Court proceedings.
38 During the course of the hearing of this application for an extension of time I repeatedly indicated to Mr Newell that he would need to satisfy me that there was a proper factual foundation for drawing the necessary inference as to the existence of the alleged conspiracy and that it was up to him on behalf of his client to make good that claim, at least to the point of it being an arguable or prima facie case. Mr Newell's argument seemed to be largely based upon an assertion that the series of events that had taken place leading up to the settlement of the L&E Court proceedings in 2004, including in particular the terms of the undertaking when compared to work that actually needed to be carried out, were so unreasonable and unacceptable and involved such a measure of departure between what the applicant thought she was settling the case for and what she was in fact settling the case for, that this could only be explained by a wide-ranging and extraordinary conspiracy or collusion.
39 Most alleged conspiracies (including this alleged conspiracy) be they civil or criminal, involve drawing an inference as to the existence of the required agreement from proof of things said and done by the participants, because express agreements are rare. In criminal proceedings these are commonly referred to as "overt acts", being the overt manifestations of the agreement from which its existence can be inferred. Most conspiracies are therefore established by circumstantial evidence from which the existence of the agreement constituting the conspiracy is inferred. All circumstantial cases, at least as to indispensable ultimate findings, require the person advancing them to exclude any reasonable alternative explanation for what has happened, because without that the necessary inference cannot safely be drawn. In the case of criminal proceedings, that is described as excluding any reasonable explanation, or hypothesis, consistent with innocence, but the concept is the same for civil conspiracies reliant on circumstantial evidence. In criminal proceedings, alternative reasonable explanations must be excluded beyond reasonable doubt and in civil proceedings on the balance of probabilities.
40 As stated above, any reasonable alternative explanation for the applicant being misled had to be excluded as a reasonable possibility by the applicant at the hearing of the proposed appeal. It may be that this does not need to be done at the extension of time stage, as opposed to at a final appeal, but this may still be relevant to the exercise of discretion because it goes to the question of the ultimate merit of the proposed appeal. For that reason I have used the term "arguable case" and not just "prima facie case", because pointing to a bare prima facie case alleging conspiracy may not suffice to support the grant of an extension of time. In the result, that distinction did not need to be decided because not even a prima facie case was established for the existence of a conspiracy, and thus there could not be any arguable case.
41 During oral submissions, in common with the prior written submissions signed by Mr Muriniti, Mr Newell devoted most of his time to the intricacies of the problems with the applicant's property caused by the excavation next door, why the works contemplated by the undertaking were incapable of remedying those problems, and the disparate things that were said by various people on that topic at the time and since then. It seems that this was done in order to prove the existence of a conspiracy by reverse engineering the existence of that conspiracy as being the only explanation for this disparity. Repeated requests made to Mr Newell to identify any basis for a conspiracy beyond this were to no avail. The case for a conspiracy at no time rose higher than an assertion that collusion in the nature of a conspiracy was the only explanation for what had happened. It never got close to even the barest of prima facie cases, and certainly never came close to excluding a range of possible innocent explanations, such as mistake or miscommunication, or even adverse conduct by the neighbours and their advisors independently, relevantly, of the respondents.
42 The applicant, both in this Court and before the primary judge, has therefore failed at the first hurdle of showing any proper basis for inferring the existence of the conspiracy that she relied upon. That is so both to ground the costs application she needs to succeed in order to have a counter-claim, set-off or cross demand equal to or exceeding the costs order upon which the bankruptcy notice was based, and, as a practical matter, to ground the abuse of process argument based on the alleged collateral purposes behind the bankruptcy notice. The applicant did not even get to the point of excluding other reasonable explanations for how the undertaking underpinning the 2004 Consent Orders was arrived at so as to mislead her as these were not even addressed, let alone displaced. There has not been placed before me a single scrap of evidence capable of demonstrating the existence of a conspiracy, in the sense of supporting the reading of anything extra into the face of the events, documents and transactions to which I was referred, let alone one to which the present respondents were either a party, or in some way accessories. Indeed the allegation of conspiracy or collusion does not appear to have any factual foundation at all.
43 It simply will not do for any party in litigation to make such serious allegations upon nothing more substantial than a bare assertion that this is the only possible explanation for what has transpired. It is no answer to say, as Mr Newell did, that the alleged conspiracy was only the factual matrix relied upon to ground the applicant's entitlement to costs, so as to establish a prima facie or arguable case for the likely existence of a counter-claim, set-off or cross demand equal to or exceeding the costs order upon which the bankruptcy notice was based.
44 The applicant in substance has relied upon the baseless conspiracy theory referred to above to explain all that has gone wrong for her in the course of proceedings in the L&E Court that commenced in 2003 and later in the Supreme Court and Court of Appeal. That conspiracy theory continues to underpin the basis for her assertion that the respondents, who originally were experts retained by her, should have paid their share of her costs arising out of her entire litigation history in the L&E Court, following her unsuccessful application to set aside the 2004 Consent Orders. The conspiracy theory also underpins the basis for the assertion that the bankruptcy notice is an abuse of process, and for each of the particulars relied upon for the asserted improper collateral purpose in having the bankruptcy notice issue.
45 The success of the application for an extension of time to bring an appeal against the decision of the primary judge ultimately depended on demonstrating that such a conspiracy exists, and then in demonstrating how it entitles the applicant to the relief she now seeks in this Court. The applicant's central problem is that the conspiracy she alleges has never risen above a theory, and a mostly fanciful theory at that. Unfortunately, the applicant's lawyers have fuelled this conspiracy theory and appear to be resolutely convinced of its existence as the only explanation they can find for their lack of success in acting for the applicant over many years.
46 The balance of these reasons proceed on the basis of the finding that I have made that no prima facie or arguable case has been established for the existence of the conspiracy upon which the applicant relies, nor of any like impropriety by way of collusion or otherwise on the part of the respondents in contributing to the process by which the undertaking, including its terms, came to be given by the applicant's neighbours as part of the making of the 2004 Consent Orders. It follows that I have independently reached the same conclusion as the primary judge that no conspiracy has been proven.