FEDERAL COURT OF AUSTRALIA Australian Solar Mesh Sales Pty Ltd v Anderson [2000] FCA 1256 APPEAL – fresh evidence – presentation of appeal without legal representation – questions of fact decided on oral evidence. Abalos v Australian Postal Commission (1990) 171 CLR 167 applied Devries v Australian National Railways Commission (1993) 177 CLR 472 applied Italiano v Barbaro (1993) 40 FCR 303 applied Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 applied CDJ v VAJ (1998) 197 CLR 172 applied Walsh v Law Society of New South Wales (1999) 73 ALJR 1138 applied Ashmore v Corp of Lloyd's [1992] 2 All ER 486 referred to Banque Keyser Ullmann v Skandia Insurance Co [1991] 2 AC 249 referred to AUSTRALIAN SOLAR MESH SALES PTY LTD v NEVILLE JOHN ANDERSON & ORS N 562 of 1999 BURCHETT, WHITLAM AND TAMBERLIN JJ 5 SEPTEMBER 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 562 of 1999 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: AUSTRALIAN SOLAR MESH SALES PTY LTD Appellant AND: NEVILLE JOHN ANDERSON, DANIEL RALPH SHANAHAN, JOHN GORDON HINDE, FRASER PATISON OLD, DAVID CARLYLE GRIFFITH, JOHN DAVID O'CONNOR, SIMON DUDLEY WILLIAMS AND KENNETH JOHN McINNIS T/A SPRUSON & FERGUSON Respondents JUDGES: BURCHETT, WHITLAM AND TAMBERLIN JJ DATE OF ORDER: 5 SEPTEMBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: The appeal be dismissed with costs, to include any reserved costs and the costs of the motion for adjournment heard on 1 September 2000. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 562 of 1999 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: AUSTRALIAN SOLAR MESH SALES PTY LTD Appellant AND: NEVILLE JOHN ANDERSON, DANIEL RALPH SHANAHAN, JOHN GORDON HINDE, FRASER PATISON OLD, DAVID CARLYLE GRIFFITH, JOHN DAVID O'CONNOR, SIMON DUDLEY WILLIAMS AND KENNETH JOHN McINNIS T/A SPRUSON & FERGUSON Respondents JUDGES: BURCHETT, WHITLAM AND TAMBERLIN JJ DATE: 5 SEPTEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT 1 This is an appeal from a judgment dismissing a proceeding in which the appellant sought damages for professional negligence and breach of contract of retainer from the Respondents, who practised as patent attorneys under the name Spruson & Ferguson. It was alleged that the Respondents were retained on behalf of the Appellant in or about August 1985 (according to the Statement of Claim, although May was also suggested) as patent attorneys in relation to rights claimed in respect of a fibreglass mesh product, to advise and to pursue a patent application; that they owed a duty of care in respect of these matters; that they obtained the grant of a petty patent; that the petty patent was subsequently revoked by order of the Court by reason of the Respondents' negligence in failing to advise that the invention was incapable of patent or alternatively in failing to draft the specification appropriately; and that the Respondents were also negligent in failing to identify a second invention, being a new combination which would have avoided the fatal problem of prior publication affecting the original invention (the original invention was referred to as Solar Mesh Mark I and the later invention as Solar Mesh Mark II). 2 The learned trial judge, in a careful and thorough judgment, came to the conclusion that the Appellant's principal witness, its managing director Mr Ivory, was not to be believed on a number of vital issues. At the same time, her Honour formed "a favourable view" of the credibility of the employee of the Respondents who was directly involved in the matter, a Mr Dummer. Although these views were supported at numerous points by documentary evidence, and by considerations not dependent merely on the word of the participants, it is inevitable that the impression created by the witnesses who gave oral evidence was of very great importance. As is well known, the authorities require an appellate court to acknowledge the advantages of the trial judge with respect to the evaluation of oral evidence, and permit a reversal of the trial judge's views concerning such evidence only in quite restricted circumstances: Abalos v Australian Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472; Italiano v Barbaro (1993) 40 FCR 303 at 326; Walsh v Law Society of New South Wales (1999) 73 ALJR 1138 at 1148; Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 at 199-200. As Thomas J said in the Court of Appeal of New Zealand in the last case at 199: "The advantages possessed by the trial Judge in determining questions of fact are manifest. Of paramount importance, of course, is the fact the trial Judge hears and sees the witnesses first hand over a matter of days, or even weeks, of taking evidence. He or she can form an impression of the reliability of witnesses and, where necessary, their credibility – although in deference to the witness's feelings the Judge may not always express an adverse conclusion in that regard. As the evidence unfolds the trial Judge gains an impression from the evidence which is not necessarily or usually apparent from the cold typeface of the transcript of that evidence on appeal. The Judge forms a perception of the facts in issue from which he or she adds or subtracts further facts as witnesses give their evidence, and so obtains as complete a picture as is possible of the events in issue. The Judge perceives first hand the probabilities inherent in the circumstances traversed in the evidence and can obtain a superior impression of those probabilities as a result. An appellate Court has none of these advantages and must acknowledge that the Court at first instance is far better placed to determine the facts. …. Exceptional caution in departing from the trial Judge's findings of fact [is] therefore regarded as imperative." 3 Having expressed her conclusions as to the credit of the principal witnesses, the trial Judge turned to the crucial issues in the case. The first of these was the alleged retainer. As to this, her Honour accepted the evidence of Mr Dummer that the initial letter of retainer enclosed a form of application in the name of a Mr Smith, who was both the applicant and the actual inventor according to the instructions given to the Respondents. Thereafter, her Honour found, the Respondents corresponded with Mr Smith and sent debit notes to him. He approved the provisional specification prepared for lodgment with the Patent Office, and gave instructions concerning it and concerning the complete specification. He gave instructions for the petty patent application to be made. 4 As the trial judge pointed out, the initial pleadings stated that it was Mr Smith who had retained the Respondents. For almost the first two years of the life of the proceeding, Mr Smith was named as first plaintiff, and the Statement of Claim alleged that the "first Plaintiff retained the Defendants to act as Patent Attorneys … ." Only after Mr Smith discontinued his claim against the Respondents was the Statement of Claim amended to allege that the Appellant was actually the client of the Respondents. In the circumstances, the trial judge concluded that at all relevant times Mr Smith was in fact the client and that the Appellant "did not at any relevant time retain the Respondents". This conclusion, of course, would have been sufficient in itself to justify the dismissal of the action. 5 The trial judge went on to reject Mr Ivory's evidence that he was an inventor of the product, pointing out that in an affidavit sworn by him in a different proceeding, Mr Ivory had referred to Mr Smith as "the original inventor of the reflective screen mesh … known … as SOLAR-MESH". Furthermore, particulars provided on behalf of the Appellant in the proceeding against the Respondents on 5 December 1994 also referred to Mr Smith as "being the original inventor". 6 A further issue crucial to the Appellant's claims against the Respondents arose out of Mr Ivory's evidence that the invention the subject of the retainer of the Respondents related to a new product, "Solar Mesh Mark II". Other evidence in the case suggested there was only ever one product, the invention of which had been prior published, as the Respondents pointed out upon being retained to seek a patent for it. According to Mr Dummer's evidence, when he drew attention to the difficulty, Mr Smith suggested the possibility of obtaining patent protection in relation to a white coloured mesh, the prior published mesh being black. The issue thus raised was whether the only distinction was one of colour - so that the validity of any patent would be doubtful and the claims of a valid patent (if one could be issued) would have to be extremely narrow - or whether there were indeed two distinctly different meshes. Mr Ivory claimed that significant quantities of Solar Mesh Mark I were installed in buildings, yet no sample of Solar Mesh Mark I was placed in evidence, nor was any specification for its manufacture. An employee of a manufacturer of the mesh supplied in 1984, that is prior to the application for a patent in respect of the alleged Solar Mesh Mark II, denied that mesh of the kind described by Mr Ivory was ever made by it, and he denied that it had the facilities to produce such a mesh. There was also evidence from a former franchisee, who produced samples of mesh which her Honour was satisfied were supplied to him in 1984; these samples were also inconsistent with Mr Ivory's description. That former franchisee had never seen a mesh that complied with the description. 7 What may well have been regarded by her Honour as clinching evidence was obtained from the Appellant's own expert, a Mr Dredge, in cross-examination. Mr Dredge acknowledged that he had initially prepared a draft report which failed to support the Appellant's case against the Respondents, and only afterwards was he told about the alleged Solar Mesh Mark I. That is to say, the basis of the allegation of negligence in relation to a failure by the Respondents to recognize a new and inventive combination was only formulated after the initial complaint against them was left without expert support. As her Honour said: "Mr Dredge said that at the time that he prepared his draft report his understanding, based on what he had been told by Mr Ivory, was that Mr Ivory was seeking to draw a distinction based on colour between a product in respect of which he sought a patent and a product which had already been sold." 8 Having regard to these and other matters mentioned by the trial judge, we can see no error in her conclusion, on the material before her, that Mr Ivory's evidence about Solar Mesh Mark I ought not to be accepted. 9 The judgment of the trial judge was delivered on 14 May 1999, and orders were made on 21 May 1999. The notice of appeal was filed on 11 June 1999. An amended notice of appeal was filed on 10 December 1999, in which a challenge was raised to the jurisdiction of the Court. On 13 December 1999, the listing judge ordered that the jurisdictional question be determined separately, and on 12 May 2000 Wilcox, Burchett and Tamberlin JJ rejected the Appellant's challenge to the jurisdiction of the Court, reserving their reasons, which were subsequently handed down on 30 June 2000. On 7 June 2000, at a Full Court callover, Beaumont J ordered that the appeal be fixed for hearing in the Full Court sittings in August, and that it be listed for directions before the presiding Judge on 26 July 2000, both parties having liberty to seek an earlier date than 26 July. On 20 July 2000 a notice of ceasing to act was filed by the Appellant's solicitors, Greg Dunstan & Associates. 10 When the matter came before Burchett J, as the presiding Judge, on 26 July 2000, although the two appeal books prepared for the jurisdictional hearing were available, further appeal books had not been prepared. Orders were made for settlement of an index on 2 August 2000, for the fixing of the date of the hearing of the appeal on 4 September 2000, and for the filing and service of the appeal books by the Respondents within 14 days of 2 August 2000. The usual order was made for written submissions; liberty to apply on seven days notice was reserved; and the Appellant was granted liberty to supplement the appeal books with a supplementary bundle. On 29 August 2000, a notice of motion was filed by the Appellant seeking the vacation of the hearing date until after the determination by the High Court of an application for special leave to appeal in respect of the jurisdictional decision. Rather than leave such a motion to the day of hearing itself, the Court assembled on 1 September 2000 to hear it. The application was dismissed, costs being reserved until the hearing of the appeal, and the Court indicated that it would give its reasons in delivering reasons in relation to the appeal. 11 Substantially, two issues arose upon the application for adjournment. In the first place, the Appellant contended that priority should be given to its special leave application. There are several difficulties about this. Such an application is not likely to be heard for some time, and if the application fails, the already long delays in this matter will be prolonged. Furthermore, it is not generally the practice of the High Court of Australia to hear interlocutory appeals, or appeals on matters which may never require decision since a principal proceeding could be decided on some other question. Until the present appeal is determined, it cannot be said that the special leave question will necessarily arise. 12 The second issue on the application for adjournment was the antiquity of this appeal. It is now well over a year since judgment was given by the trial judge. The issues on which the decision turned were issues of fact. The Appellant has had ample time in which to prepare the appeal, and ample warning, at successive directions hearings, that it would need to do so without delay. Justice to the Respondents requires that such a matter should not continue to hang over their heads indefinitely. There was no assurance that a lawyer would ever in fact be engaged to conduct the appeal. In all the circumstances, the Court was not merely not satisfied that the Appellant should have an adjournment; it was positively satisfied that the appeal ought to proceed on the day fixed for it. 13 At the hearing, the Appellant was not represented by counsel or by a solicitor. Mr Ivory, as a director, appeared and asserted that the Appellant was prevented by its impecuniosity from obtaining legal representation. In the circumstances, we gave the Appellant leave to be represented by its director, Mr Ivory. 14 Mr Ivory addressed the Court for almost one and a half days. He made numerous statements which, to put the point in subdued language, were emotional in character. But, unfortunately, he seemed to be unable to grasp the requirements of an appellate argument. That may be understandable, as he is not legally qualified. It may also reflect the difficulty which any person presenting the Appellant's case would have, having regard to the very nearly impregnable position of findings of fact based on oral evidence, such as those made by the trial judge. The Court drew Mr Ivory's attention to the nature of the issues it was necessary for him to confront on a number of occasions. The Court continued to hear him until it became apparent that he had nothing more to say by way of argument, but only general statements of his attitude toward the proceedings and repeated references to material that was not in evidence. The Court is satisfied that it gave Mr Ivory the fullest opportunity to present to it any reason which might be available in law why the judgment should be overturned. We are not bound to allow any party to indulge in mere vain repetitions: cf Ashmore v Corp of Lloyd's [1992] 2 All ER 486 at 493; Banque Keyser Ullmann v Skandia Insurance Co [1991] 2 AC 249 at 280-281. 15 Dealing first with the material put before the learned trial judge, and on which her judgment was based, Mr Ivory was unable to articulate any basis for thinking that her Honour was in error. 16 But Mr Ivory sought to persuade the Court that it should admit fresh evidence. Although, in the course of his argument, he ranged widely in the material to which he referred, the amended notice of appeal raises only one matter of fresh evidence. This is a brochure which Mr Ivory claims was used by the company in about March and May 1985. The notice of appeal asserts that the production of this brochure would show evidence of the Respondents "founded on the brochure contained in their files is fabricated and false as that brochure was located later in time and not available to the Respondents at the relevant time in 1985". Alternatively, it is alleged that a mistake is revealed as the brochure in the Respondents' file could not have been available to them at the relevant time. 17 The principles governing an appeal on the ground of fresh evidence have recently been restated by the High Court in CDJ v VAJ (1998) 197 CLR 172. Apart altogether from any question of the availability of the evidence to the Appellant at the trial, had it exercised reasonable diligence, the joint judgment of McHugh, Gummow and Callinan JJ makes it clear (at 202): "The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial." Their Honours also said (at 218) that the proper exercise of the discretion, in cases of this kind, requires that "the further evidence if tendered before [the trial judge] was likely to have produced a different result. It is not enough that the Full Court thought that, upon the whole of the evidence including the further evidence, another judge might make a different order." Their Honours referred (at 224) to "the finality of orders made by primary judges" and suggested that a different view would give such orders "a merely provisional status". That would be contrary to the public interest. 18 We have considered what effect the brochure now produced by Mr Ivory might have had if it had been tendered before the trial judge. In our opinion, it is not at all likely that it would have produced a different result. Her Honour's views as to the credit of the witnesses were not anchored in the brochure produced by the Respondents, but rested on much more secure foundations. In our opinion, there are many answers which would have been available to the Respondents had the particular version of the brochure now sought to be relied upon been produced at the hearing. The fresh evidence sought to be tendered is therefore inadmissible. 19 For these reasons, the appeal must be dismissed. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 7 September 2000 For the Appellant (by leave): Mr K Ivory, a director Counsel for the Respondents: Mr J L B Allsop, SC with Mr J V Nicholas Solicitor for the Respondents: Ebsworth & Ebsworth Dates of Hearing: 4 & 5 September, 2000 Date of Judgment: 5 September 2000