COMMONWEALTH BANK OF AUSTRALIA v RIGG SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, CLARKE and MEAGHER JJA 17 August 1989 [1989] NSWCA 43 Mahoney JA The plaintiffs sued the Bank in respect of certain financing transactions carried out between them. The Bank cross claimed against the plaintiffs in respect of two matters: a claim for $750,000 plus interest, based on a bill of exchange alleged to have been drawn by the plaintiffs; and an amount of $288,747.88 plus interest, alleged to be due on a guarantee of the liabilities to the Bank of a certain company. The Bank sought summary judgment on its cross claims. On 19 April 1989 Young J gave judgment for the Bank for $1,215,038.48. The plaintiffs have appealed against that judgment. The Bank has now applied to this Court for an order striking out the appeal or giving judgment for the Bank upon it; alternatively, it has asked for an expedited hearing of the appeal. In support of the Bank's application that the appeal be disposed of summarily, Mr Emmett QC has argued that the power of the Court to make the order sought may be derived from the Rules relating to summary judgments generally or from the Court's inherent power to prevent abuse of process. Mr Garnsey, for the plaintiffs, submitted that there was no power to make such an order as is sought. There was no significant argument in relation to the Court's power in this regard and authorities were not referred to. Iam prepared to accept that the Court has power, in some cases, to dismiss an appeal which, to take an example, has so obviously no prospect of success that to allow it to remain current would be to allow an abuse of the Court's process. Whether, in disposing of an appeal in this way, the Court is to be seen as exercising a particular and special power or merely as disposing of an appeal after argument, but argument of a summary kind, need not for present purposes be pursued. The submissions in the present case were directed essentially to whether an appropriate case has been made out for the exercise of that power. The contentions of the parties have been based upon a mass of material placed before the Court in this application. It is not necessary, nor is it appropriate in a summary application of this kind, to attempt to detail that material or to reconcile the factual contentions made by the parties. Counsel have, in their oral argument, developed the contentions which, as they contend, can be supported by that material. The Bank's case is, Mr Emmett QC submits, simple. In relation to the claim based upon the bill of exchange, he submitted that it was admittedly signed by Mrs Rigg; that the admitted documents show her authority to sign for herself and Mr Rigg; that the bill was not met at the due date; and that, by reason of the law governing bills of exchange, it was not necessary formally to present the bill for payment. As to the claim based upon guarantee, Mr Emmett submitted: that the amount in question represented charges debited by the Bank to a company of 2 UNREPORTED JUDGMENTS which the plaintiffs were directors and in which they held shares as, as it is contended, legal but not beneficial owners; that those amounts represented, as I shall describe them compendiously, ancillary costs in respect of bills of exchange drawn by the plaintiffs during the previous operation of transactions between them and the Bank; that those amounts were properly debited to the company; that the company has not paid them; and that the plaintiffs are liable upon a guarantee which admittedly they executed in respect of the company's liabilities to the Bank. Mr Emmett QC said, inter alia, that it was clear that the capital amounts in question were advanced either to the plaintiffs or the company; that the additional amounts claimed represented ancillary costs and interest admittedly due upon the capital amounts advanced; and that in practical terms it was of little consequence whether primarily the amounts were owed by the plaintiffs or by the company because, under the relevant guarantee, the plaintiffs were liable for the company's obligations to the Bank. One of the difficulties confronting the Court in dealing with the Bank's application has arisen because of the difficulty which has been experienced in obtaining from the plaintiffs a sufficiently precise indication of the grounds on which it is contended that the judgment of Young J was incorrect. The notice of appeal is, in form, not satisfactory in that it does not clearly indicate the nature of the points to be argued by the plaintiffs. In argument, counsel appeared to have, on his instructions, difficulty in formulating those grounds with precision. In addition, counsel indicated that, in relation to the hearing of the appeal, leave would be sought to adduce fresh evidence. The fresh evidence, as far as appears, will relate to an admitted mistake made by the Bank in dealing with the plaintiffs and the company in the transactions and the accounting for the various amounts which the Bank made. Reference was made to a letter written by the Bank and there is, in the material before the Court, a letter which refers to matters of this kind. At one stage during the argument, Mr Garnsey, for the plaintiffs, was prepared to limit the scope of the fresh evidence to be brought in a way which, on Mr Emmett QC's contention, would remove or at least substantially reduce the area of contest between the parties. As I understand the argument advanced for the plaintiffs, it involves a denial of present liability on the guarantee because, though originally given by the plaintiffs, the guarantee was discharged because of the manner in which the Bank dealt with the plaintiffs and the company during the course of the transactions. It was submitted also, as I understand, that liability of the plaintiffs on the bill of exchange was able to be contested for substantially formal reasons. Mr Emmett QC submitted that the result of the plaintiffs' clarification of their case was essentially that the capital amounts involved had been advanced; that the plaintiffs were liable for them under the bill facilities or the guarantee; and that, if the rearrangement of the affairs between the plaintiffs and the company were to take place as foreshadowed by the plaintiffs, the plaintiffs would be personally liable for the amounts in respect of which the primary claim was made under the guarantee. The onus is upon the Bank to satisfy the Court that there is no dispute appropriate to be dealt with upon the appeal. It is not necessary to formulate the precise principles on which such a matter is to be determined because, in my opinion, on whatever basis the matter be approached, I am not satisfied that the failure of the appeal is inevitable, and obviously inevitable, so as to warrant the orders in question. URJ COMMONWEALTH BANK OF AUSTRALIA v RIGG (Meagher JA) 3 It is sufficient for the plaintiffs, on this application, to indicate that there is, in respect at least of one part of the claim against them, an appropriately arguable ground of appeal. There is, in my opinion, such a ground in relation to the claim of liability made by the Bank based upon the guarantee. The Judgment given for the Bank by the learned Judge related, as to $288,747.88 and amounts of interest, to the Bank's claim under the guarantee. It is, I think, not sufficient to say that, if the appeal could succeed in relation to that, it would be able to succeed against the plaintiffs personally upon another basis. There is, in my opinion, an arguable case as to the effect which the admitted error which the Bank made in relation to, as I shall describe it compendiously, the debiting of the company's account and the effect of that upon the continuation of the guarantee, to entitle the plaintiffs to an appropriate hearing of the appeal. In what I have said, I have not attempted to detail all of the contentions advanced for the Bank or which may be drawn from the argument for the plaintiffs and I have not pursued what, as it is contended, were other bases for the dismissal of this application. It is sufficient, in my opinion, on an interlocutory application of this kind to indicate that there is one matter upon which the plaintiffs may succeed and which would affect the substance of the judgment given against them. ORDER If the application fails, as it does, it is appropriate that an order be made for the expeditious hearing of the appeal. The Court should, in my opinion, direct that the appeal be expedited and should be heard upon a date to be fixed by the Registrar to be notified to the parties. For reasons which appear in argument, it is proper that the issues to be argued in the appeal be appropriately formulated and therefore directions should be given in relation to these matters. The appeal should be listed for directions upon a date to be notified by the Registrar to the parties for this purpose. One further matter may be mentioned. During argument, the parties referred to the possibility of the Bank's exercise of its securities in support of the present obligations of the plaintiffs. This is not a matter which properly is to be dealt with by this Court. If the Bank desires to execute upon the securities and the plaintiffs desire to restrain it from so doing, the parties should pursue their differences before a judge of the Equity Division. Meagher JA I agree with the judgment of Mahoney JA. I should only add that in my view the pendency of the appeal does not constitute any reason to defer the Bank's exercise of its rights under the securities in question. The costs of the present application should be reserved to the court dealing with the appeal.