RAHME v COMMONWEALTH BANK OF AUSTRALIA SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, SHELLER and POWELL JJA 5 November 1993, 30 November 1993 [1993] NSWCA 224 MORTGAGE — GUARANTEES — SUMMONS FOR POSSESSION — LEAVE TO AMEND GROUNDS OF APPEAL The appellants gave guarantees and a mortgage to secure the repayment of moneys borrowed from the respondent by DS Pty Ltd and A and TR Pty Ltd. DS Pty Ltd and A and TR Pty Ltd had failed in the Federal Court to have the guarantees and mortgage set aside but were ordered on the respondent's cross claim to pay to the respondent an amount claimed under the loan agreements and interest. An appeal by DS Pty Ltd and A and TR Pty Ltd to the High Court was upheld to the extent that the respondent's claim should be adjusted to allow for overpayments made by DS Pty Ltd and A. and TR Pty Ltd on account of withholding tax paid by the respondent but subject to its being established that the payments on account of withholding tax were made under a mistake of law. After the hearings at first instance and on appeal in the Federal Court but before the hearing on appeal to the High Court Studdert J made an order for possession of the mortgaged land in favour of the respondent. The appellants filed a notice of appeal and two supplementary notices of appeal against this order. When the appeal came on for hearing the appellants abandoned the grounds in these three notices of appeal and applied for leave to file two supplementary notices of appeal raising fresh grounds. In the first the appellants claimed that notices issued under s57 (2) (b) of the Real Property Act 1900 claimed a sum which was excessive because it failed to give credit to the right of the appellants as sureties to a set off for overpayments by the principal debtors to the respondent of sums referable to withholding tax and accordingly the notices were not valid. By the second the appellants claimed that in the course of correspondence up to the time of the hearing of the appeal the respondent had repudiated the guarantees and mortgage which the appellants had in consequence terminated. Held: There was no arguable case based on any new grounds for appeal sought to be filed because, even allowing for overpayment on account of withholding tax by the principal debtors and assuming that the respondent's right to possession depended upon the notices issued under s57 (2) (b) of the Real Property Act being valid, the sums claimed in the notices were not excessive and further the correspondence relied upon did not evince an intention by the respondent no longer to be bound by the guarantees or to fulfill them only in a manner substantially inconsistent with its obligations. Accordingly leave to file the amendments was refused and, no further ground being argued, the appeal dismissed. Mahoney JA I agree with the judgment of Sheller JA. When the hearing of the appeal commenced before this Court, Mr Rares, for the appellants ("the guarantor") sought two amendments to the notice of appeal. The court, after argument, refused the amendments. After consideration of his position, Mr Rares accepted that, the amendments having been refused, the appeal could not succeed. It was therefore dismissed. When the amendments were refused, the court indicated that it would subsequently give reasons for the refusal. 2 UNREPORTED JUDGMENTS The amendments to the notice of appeal which Mr Rares proposed were, as I shall describe them, the withholding tax amendment and the repudiation amendment. It was accepted that neither of the issues raised by the amendments were within the terms of the notices of appeal previously filed. The guarantors sought to raise the new issues only within a short time before the hearing of this appeal; the second of the points was, it would appear, formulated only on the day of the hearing of the appeal or the day before. When an amendment is fairly arguable, the court will ordinarily grant leave to amend, even on appeal, unless there is prejudice to the other party which cannot be compensated by costs or an adjournment or both or, as more recently has been suggested, where to grant the amendment would be inconsistent with the public interest in the effective, efficient, timeous and just disposal of litigation. See generally Sali v SPC Ltd (1993) 67 ALJR 841 at 843-4, 849, and the cases there referred to. In the present case, the amendments proposed were not fairly arguable: for the reasons to which I shall refer, neither of them had a fairly arguable prospect of being held to provide a defence to the Bank's claim to possession of the relevant land. For that reason alone, it was proper that the amendments be refused. But there are, in my opinion, other reasons why it was proper that the amendments be refused. In the present case, it was proper that amendments be not granted unless it appeared that there was a reasonable prospect of the guarantors succeeding on the issues sought to be raised, that the result of success upon the issues would be that the Bank's claim to possession would be effectively answered, and that the ends of justice would be served by allowing the amendments to be raised. I appreciate that, in this case, the effect of judgments against the guarantors may be serious indeed. I appreciate also that a party against whom proceedings are brought is entitled to contest the proceedings in any way open to him or her; he or she is entitled to raise any defence which, on a proper application of the law, will defeat the particular proceeding. But there are limits. The present question is whether, in the exercise of a judicial discretion, the amendments should be allowed and the relevant issues raised. On the material before this Court, those limits would be exceeded if the amendments were granted. The claim against the guarantors arises out of debts owed by the two companies in which they are interested. Litigation between the Bank and those companies and/or the guarantors has now been before the High Court of Australia, the Supreme Court of New South Wales and the Federal Court of Australia on some eight. or more occasions over a period of some three years. As the result of the decision of the High Court of Australia in David Securities PtY Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, it is now clear that companies owe the Bank sums totalling at least some millions of dollars. The only matter in dispute between the companies and the Bank relates to withholding tax: it remains to be determined whether an amount of approximately $52,000 can be recovered by one or other company from the Bank. Subject to this, the liability of the companies to the Bank has been finally established. The appellants are liable because they gave guarantees to the Bank of the amounts owed by the companies to the Bank and their guarantees were secured by the mortgage here in question. The Bank has long since called upon them to pay under their guarantees. They have not paid and, the court has been informed, have made no relevant offer of payment. In their case also there is (subject to URJ RAHME v COMMONWEALTH BANK OF AUSTRALIA (Mahoney JA) 3 what I shall say) no doubt but that they are liable for some millions of dollars, the amount of which depends only upon the claim in respect of withholding tax. Mr Rares, who has argued every point which could be taken for the guarantors, has submitted that, whether the companies may recover the withholding tax, the guarantors, as guarantors, may not be debited by the Bank with the amount of it. It is not necessary to determine whether this is so. Even if it be so, the amount owing by them is of the order to which I have referred. And, of course, as Mr Emmett QC for the Bank has emphasized, no offer of payment of any portion of the indebtedness has been made. Accordingly, even if the effect of the contentions in respect of the withholding tax be that the liability of the guarantors is reduced and that the notices given by the Bank to the guarantors under s57 of the Real Property Act 1900 are defective - I do not think that is the case - the result would be merely that other notices could and would be served. It is not suggested that there could be any objection to them, that they would be satisfied by payment, or that there could be any defence to the Bank's consequent claim for possession of the land. In such circumstances, no practical purpose would be served by allowing the proposed issues to be argued; to allow them to be argued and (as I shall assume) to succeed would result only in further delay and cost and the accrual of further interest. I am inclined to the view that, in exercising a discretionary judgment as to whether an amendment should be allowed to the notice of appeal to raise a matter never before raised, it is proper 'o take such matters into account. Were it necessary, I would see such matters as constituting a separate and distinct basis for the refusal to allow the amendments. It was in this context that the court determined that the amendments to the notice of appeal should not be allowed. I come now to the first amendment sought the withholding tax amendment. The basis of this amendment was as follows. The present proceeding was brought by the Bank to recover possession of land owned by the guarantors and mortgaged by them to the Bank. The trial judge held that the Bank was entitled to possession. This amendment was based upon s57 of the Real Property Act. The guarantors' claim was that the Bank was not entitled to possession under the mortgage unless a proper notice had been served under s57 entitling it to exercise power of sale; that the s57 notices which had been served did not comply with s57; and that accordingly the Bank had no present right to possession. Before this Court, it was not in question but that s57 notices had been served. The contention was that they were ineffective because the amount specified in them did not take account of the position in respect of withholding tax as between the two companies and the Bank. The withholding tax issue arose in the following way. (I shall, for brevity, not distinguish between the two companies or the precise issues which, in this regard, each of them raised). The companies had become indebted to the Bank for large sums in respect of foreign currency borrowings. The Bank had sued the companies for recovery of the amounts owing to it. Various defences had been raised and (subject to what I shall say) these had been ruled in favour of the Bank: see 175 CLR at 359-62, 387-8. However, an issue had arisen as to how, in assessing the quantum of the debt which the companies owed, an amount of withholding tax was to be brought to account. That issue had been taken to the High Court of Australia and in due course that Court ruled in favour of the companies. The amount involved was of the order of $52,000. The effect of the 4 UNREPORTED JUDGMENTS High Court's decision was, in substance, that the finding of the lower court that the companies were indebted to the Bank was confirmed subject to credit being allowed to them for the withholding tax amount if certain quest:ions were decided in the companies' favour. The effect of the final orders of the High Court was that the proceeding was returned to the Federal Court of Australia to consider the right.s of the parties in respect of the withholding tax amount. That Court has not yet determined the matter. The s57 notices served on the guarantors were served before the High Court had determined the withholding tax issue in favour of the companies. The basis of the withholding tax amendment was to the effect that the notices served were defective because they did not take into account the "credit" to which the guarantors were entitled in respect of the withholding tax amount. On the evidence before this Court, such a ground of appeal could not succeed. The court has before it the notices served under s57. A mortgagee is not, under pain of invalidity, required to specify in such a notice only the precise amount which, in total, is then due under the mortgage: that has not been suggested. The amount specified is of the order only of some $300,000: the total owing was much more than that. Even if credit be given for the withholding tax amount, the amount so specified is much less than the amounts for which under the guarantees the guarantors are liable. Accordingly, liability for the amount specified in the notices cannot as such be affected by what happens in relation to the withholding tax, whether in respect of the companies or the present appellants. It is not necessary to consider in detail the position of a guarantor where the principal debtor's debt, though its existence is established, is still subject to dispute as to amount. The right of a creditor to call upon a guarantor for an amount which beyond dispute is owing by a principal debtor and to realise securities upon failure to pay it cannot, I think, be affected by the fact that the precise amount for which the principal debtor and the guarantor are liable remains to be determined. It is not necessary to consider what, if any, is the effect of demanding payment of a lesser amount upon the creditor's right to pursue the guarantor or the securities for the balance of the amount found ultimately to be due. What is here in issue is only the right of the creditor to exercise its right to have possession of the land. The issues of accounting and the like, if any, which may arise in such a case need not be pursued. There may be a further answer to such a ground of appeal. As Powell JA pointed out in argument, the Bank seeks merely possession; it does not presently seek to sell the land. The right to possession arises primarily under s60 of the Real Property Act. It may be that, under the statute, that right may be pursued notwithstanding that a notice required by s57 as a precedent to sale has not been given. Mr Rares has argued that, by the terms of the mortgage, the Bank agreed that its right to possession should be conditional upon a right to sell having arisen and that a right to sell cannot arise unless and until s57 is complied with. I do not think that it is necessary to pursue that matter. The notice which has been given under s57 is in my opinion clearly sufficient for the purpose. Were it necessary to rely upon it, I would see another reason why this amendment should be refused. The possibility of raising the argument that the notices under s57 were defective because of the contentions in respect of withholding tax has existed for a long time: the withholding tax issue was pending before the High Court for a substantial time and, if it was desired to rely upon it, it could and should have been raised by way of defence in the present URJ RAHME v COMMONWEALTH BANK OF AUSTRALIA (Mahoney JA) 5 proceeding. No such defence was raised. Mr Rares has contended that, when the proceeding came on for hearing before Studdert J, an adjournment was sought inter alia to rely upon this defence. His Honour's judgment suggests that the amendment then proposed was of a different kind and did not relate to this issue. But however that be, to have allowed the amendment at that stage was apt to cause prejudice to the Bank. Had the possibility of a defect in the s57 notices been raised earlier, precautionary notices to overcome the defect could have been given. The amount involved is large and interest is accumulating: it may be that the Bank would have taken that precaution. Because the matter has been raised so late it has not had the opportunity to do so. The point that is sought to be raised is essentially technical. If successful, it would require merely that notices be given again, specifying a different amount. It has not been suggested that the appellants or the companies could or would pay the amounts. When this was raised Mr Rares was asked what defences there would be: his answer was that his clients would await the terms of the notices. The history of the present litigation and the steady mounting of interest are, to put the matter no higher, unfortunate. Orders must, of course, be made only upon the proof of proper entitlement. But that entitlement depends upon the issues raised in litigation. It would, I think, be sad, and do little to support the credibility of the law, if, in these circumstances, leave was given at this very late stage to raise an issue which could have been raised earlier and which, at best, went only to a technicality of this kind. However, for the reasons, I have indicated, it is not necessary to rely upon this matter. The second amendment sought to raise the contention that the Bank had, by its recent conduct, repudiated the guarantees; that accordingly the appellants were not liable upon them or upon the mortgage given to secure them; and that the present proceeding should therefore fail. This contention is based, it is said, upon the fact that the Bank has denied the right, which the appellants claim, to have the amount of the withholding tax brought to account in their favour. This, it is said, constitutes a repudiation by the Bank of the guarantees. In support of this contention, Mr Rares tendered correspondence between the solicitors for the parties in relation to the matter. It is in my opinion sufficient to say that there is no arguable case that the Bank repudiated the guarantees. Mr Rares contended that the repudiation had taken place only very recently, in the course of "the last few days". But the actions of the Bank relied on to constitute the repudiation, the letters exchanged, show only that the Bank claimed what it was entitled to under the guarantees, the existing judgments, and the orders made by the High Court. That constitutes no arguable case of repudiation. In dealing with these matters the Court has of course had regard to the decision of the High Court in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353. The parties put before the court the transcript of the proceeding in the High Court and the form of the orders which, in due course, the High Court made. The effect of those orders was to grant a "stay", limited in terms, in respect of the judgments given by Hill J against the principal debtors. It was not, I think, the intention of the High Court that, because a "stay" had been granted, the liability of the principal debtors or the guarantors should, in respect of the balance of the judgments, be affected or, at least, affected in the sense that they could not be enforced until the determination of the matter related to withholding tax to which the stay related. It was not suggested, nor could it be, that the orders ultimately made by the High Court prevented further steps being taken against the principal debtors or the guarantors in that regard. Indeed, it may 6 UNREPORTED JUDGMENTS be that the inference should be drawn that the orders were drawn in the way they were in order to ensure that, in respect of the balance of the indebtedness, proceedings for enforcement could be taken. Mr Rares sought a stay of the court's orders against the possibility that leave to appeal might be granted by the High Court against the orders now made. The court refused that application. In my opinion, the circumstances of the present case would not warrant this Court exercising the power to grant a stay at the present time. Sheller JA INTRODUCTION On 16 May 1983 the appellants Antoine Maroun Rahme and Therese Rahme, "the Mortgagor", executed a mortgage of Real Property Act land at 24 Wetherill Street, Narrabeen to the respondent Commonwealth Trading Bank of Australia for the purpose of securing to the bank the payment of all moneys mentioned in the Memorandum filed in The Registrar General's Office as No R356325". They covenanted to observe the provisions set forth in that Memorandum. In the Memorandum they covenanted with the respondent on demand to pay to the respondent "All moneys (including moneys advanced by way of loan for fixed term or provided by way of overdraft) now or hereafter to become owing or payable to the bank by the Debtor and the Mortgagor or either of them either alone or on joint or partnership account or any other account whatsoever whether as principal or surety." The debtor was A and T Rahme and Sons Pty Ltd. CLE, so far as presently material, was as follows: "Tt is hereby agreed and declared that - 2. The power of sale and all other powers conferred on a mortgagee by the Real Property Act, 1900, or the Conveyancing Act, 1919 may be fully exercised by the Bank immediately upon or at any time after (i) the requirements of a notice pursuant to s57 of the Real Property Act, 1900, in respect of default in payment of all or any part of the moneys hereby secured are not complied with within one month after service of the notice, or (ii) default other than a default referred to in para(i) in performance or observance of any of the covenants or agreements on the part of the Mortgagor herein contained or implied. Subject to para(i) the said powers may be exercised without regard to any restriction imposed by the said Acts and no notice or expiration of time whatsoever under the said Acts or either of them shall be required previous to the exercise of the said powers. 3. Upon the power of sale becoming exercisable hereunder it shall be lawful for the Bank at any time and from time to time without giving to the Mortgagor any notice to do all or any of the following: (a) To enter upon and take possession and/or to enter into receipt of the rents and profits of an or any of the mortgaged premises and to manage the same and to pull down rebuild site: and add to any then existing building or erection thereon and to erect or make any new building or improvement thereon and to do all such things as the Bank may deem necessary to manage and efficiently carry on the mortgaged premises or to obtain income therefrom and for any of such purposes to employ managers workmen and others and otherwise to act in all respects as the Bank in its absolute discretion may think fit." URJ RAHME v COMMONWEALTH BANK OF AUSTRALIA (Sheller JA) 7 On 17 May 1983 the appellants executed a guarantee in favour of the respondent to pay to the respondent on demand "all moneys" then or thereafter to become owing or payable to the bank by David Securities Pty Ltd and on 27 February 1985 a similar guarantee in respect of moneys owing or payable to the respondent by A and T Rahme and Sons Pty Ltd. FEDERAL COURT AND OTHER PROCEEDINGS In February 1988 David Securities Pty Ltd, A and T Rahme and Sons Pty Ltd and the appellants sued the respondent and others in the Federal Court claiming they had suffered significant losses by reason of their entry into foreign currency borrowing arrangements at the inducement of the defendants. Against the respondent they relied upon alleged misleading conduct and representations, and allegations that the respondent had breached either a contractual obligation or a common law duty to advise of the dangers inherent in foreign currency loans. The respondent cross claimed to recover money due under the borrowing arrangements. On 11 May 1989 Hill J, who heard the proceedings, dismissed the claim which was amongst other things to set aside the guarantees and mortgage and to recover moneys paid, pursuant to CL8 (b) of the Loan Agreements, to reimburse the respondent for withholding tax it had paid. The respondent paid withholding tax because the loan moneys were provided by its branch in Singapore. On 14 June 1989 his Honour ordered David Securities Pty Ltd to pay the respondent $US 106,113.76 or the Australian dollar equivalent of that amount at the time and date of payment and A and T Rahme and Sons Pty Ltd to pay the respondent the sum of $US286,632.58 or the Australian dollar equivalent of that amount at the time and date of payment. The two companies were also ordered to pay interest from the date of judgment. Appeals by the two companies and the appellants to the Full Federal Court were dismissed on 10 May 1990. In 1990 the appellants commenced proceedings in the Equity Division of the Court claiming that the guarantees and mortgage should be set aside under the Contracts Review Act 1980. These proceedings were dismissed by Bryson J on 28 February 1991. An appeal from this decision was dismissed by this Court on 20 December 1991. HIGH COURT ORDERS On 12 October 1990 the High Court granted special leave to appeal from the decision of the Full Federal Court limited to the dismissal of the claim in relation to withholding tax. The appeal was heard in October 1991 and judgment delivered on 7 October 1992; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353. The Court upheld the appeal and held that CL8 (b) of the Loan Agreements with David Securities Pty Ltd and A and T Rahme and Sons Pty Ltd was void pursuant to s261 of the Income Tax Assessment Act 1936 with the result that payments made by the borrowers to the respondent were overpayments. The Court held further that the moneys could be repayable if paid in the mistaken belief by the payer that it was under a legal obligation to pay them or that the payee was legally entitled to payment. On 7 October 1992 the High Court made the following orders: "Appeal allowed with costs Set aside the order of the Full Court of the Federal Court in so far as it relates to the appellants' appeal on the cross-claim and in lieu thereof order that: (i) the appeal to the Full Court on the cross-claim be allowed; and (ii) the order of the trial judge made 14 June 1989 be set aside. Remit the matter to the trial judge for determination, in accordance with the judgment of this Court, of the following issues: 8 UNREPORTED JUDGMENTS (i) whether the appellants should be permitted to call evidence on the issue of mistake; (ii) whether the appellants paid the additional amounts because of their mistaken belief that their contractual arrangements with the respondent required the payments: (iii) whether the respondent changed its position on the faith of receipt of the payments by the appellants" On 12 October 1992 before the orders were taken out the respondent filed a notice of motion seeking to vary them. This application was heard on 7 September 1993 on which date the High Court made the following orders: "1. Set aside the orders of 7 October 1992. 2. In lieu of the orders made on 7 October 1992 make the orders set out in the schedule below. 3. Order that the respondent pay the appellants' costs of the notice of motion of 12 October 1992. Schedule 1. Appeal allowed with costs. 2. Set aside the order of the Full Court of the Federal Court in so far as it relates to the appellants' appeal from the order made on 11 May 1989 dismissing the appellants' application and in lieu thereof order that: (i) the appeal to the Full Court of the Federal Court from the order made 11 May 1989 dismissing the appellants' application be allowed in part. (ii) the order of the trial judge made on 11 May 1989 dismissing the appellants' application be set aside in part, but only so far as that order: (a) dismissed the appellants' claim for reimbursement of payments made to the respondent pursuant to CL8 (b) of the loan agreements referable to withholding tax and interest thereon; and (b) required the appellants to pay the costs of that claim for reimbursement. (iii) remit so much of the appellants' application as claims reimbursement of payments made to the respondent pursuant to CL8 (b) of the loan agreement referable to withholding tax to the trial judge for determination of the issues: (a) whether the appellants should be permitted to call evidence on the issue of mistake; (b) whether the appellants paid the additional amounts because of their mistaken belief that their contractual arrangements with the respondent required the payments; and (c) whether the respondent changed its position on the faith of receipt of payments by the appellants, in accordance with the judgment of the High Court and for the entering of judgment (including costs) accordingly. 3. Stay, pending further order of the Federal Court, O.1 made by the trial judge on 14 June 1989 to the extent of $US60,000 plus interest on that amount of $US60,000 in accordance with O.4 made 14 June 1989. 4. Stay, pending further order of the Federal Court, O.2 made by the trial judge on 14 June 1989 to the extent of $US52,000 plus interest on that amount of $US52,000 in accordance with O.5 made 14 June 1989." PROCEEDINGS FOR POSSESSION OF LAND On 24 February 1992 the respondent commenced proceedings by summons against the appellants for an order that they give the respondent possession of the land and premises at 24 Wetherill Street, Narrabeen. Pursuant to consent orders URJ RAHME v COMMONWEALTH BANK OF AUSTRALIA (Sheller JA) 9 and directions a statement of claim was filed on | June 1992. This identified the parties, the land, the mortgage and the terms of the mortgage. CL6 and CL7 of the statement of claim were as follows: "6. It was a further term of the mortgage that the power of sale and all other powers conferred on a mortgagee by the Real Property Act, 1900 or the Conveyancing Act, 1919 could be fully exercised by the Bank immediately upon or at any time after the requirements of a notice pursuant to s57 of the Real Property Act, 1900 in respect of default in payment of all or any part of the moneys thereby secured was not complied with within one month after the service of the notice. Particulars Memorandum CLE2 7. It was a further term of the mortgage that upon the power of sale becoming exercisable thereunder, it would be lawful for the Bank, inter alia, to enter upon and take possession of the property. Particulars Memorandum CLE3" Under the heading "Default in respect of moneys payable by A and T Rahme and Sons Pty Ltd" the statement of claim continued: "8. On 14 June 1989 Justice Hill of the Federal Court ordered that A and T Rahme and Sons Pty Ltd pay to the Bank the sum of USD$286,632.58 or the Australian dollar equivalent of that amount at the time and date of payment and that A and T Rahme and Sons Pty Ltd pay interest on the Australian dollar equivalent of USD$286,632.58 calculated at the Bank's spot selling rate applicable at the close of business that day 14 June, 1989 at the rate of 15 per cent per annum until such time that sum is satisfied. 9. The Bank's spot selling rate at close of business on 14 June 1989 in relation to the USD/AUD exchange rate was 0.7441. 10. At the spot selling rate of 0.7441 the Australian dollar equivalent of the amount of USD$286,632.58 is AUD$385,207.07. 11. As at 17 October 1990 an amount not less than USD$286,632.58 and AUD$76,479.04 was owing and payable to the Bank by A and T Rahme and Sons Pty Ltd on certain accounts pursuant to the Federal Court order. 12. By letters dated 17 October 1990 the Bank made demand on the mortgagors to pay the amount of USD$286,632.58 and AUD$76,479.04. 13. The mortgagors have not paid to the Bank the amount of USD$286,632.58 and AUD$76,479.04 or any lesser amounts." The statement of claim continued in paral5 as follows: 15. On 14 June 1989 Justice Hill of the Federal Court ordered that David Securities Pty Ltd pay to the Bank the sum of USD$1,106,113.76 or the Australian dollar equivalent of that amount at the time and date of payment and that David Securities pay interest on the Australian dollar equivalent of USD$1,106,113.76 calculated at the Bank's spot selling rate applicable at the close of business that day 14 June 1989 at the rate of 15 per cent per annum until such time as that sum is satisfied. 16. The Bank repeats the allegations in para9 above. 17. The Australian dollar equivalent of the amount of USD$1,106,113.76 at the exchange rate of 0.7441 is the amount of AUD$1,486,512.24. 18. As at 17 October 1990 an amount of not less than USD$1,106,113.76 and AUD$298,727.82 was owing and payable to the Bank by David Securities Pty Ltd on certain accounts pursuant to the Federal Court Orders. 10 UNREPORTED JUDGMENTS 19. By letters dated 17 October 1990 the Bank made demand on the mortgagors to pay the amount of USD$1,106,113.76 and AUD$298,727.82. 20. The mortgagors have not paid to the Bank the amount of USD$1,106,113.76 and AUD$298,727.82 or any lesser amounts. S57 (2) (b) Notice 21. On or about 24 October 1990 the Bank served on the mortgagors notices dated 24 October 1990 pursuant to s57 (2) (b) of the Real Property Act, 1900. 22. The s57 (2) (b) notices required the mortgagors to pay certain moneys in respect of the payment of which they were in default pursuant to the demands dated 17 October 1990 in respect of the liability of A and Rahme and Sons Pty Ltd to the Bank. 23. At no time have the mortgagors paid to the Bank the amount of money in respect of the payment of which they have made default or any lesser amounts. Right to Possession 24. The power of sale became exercisable by the Bank in respect of the property one month after service of the s57 (2) (b) notices, which was a point in time prior to the commencement of these proceedings seeking possession. 25. On the power of sale becoming exercisable by the Bank, the Bank was authorised, pursuant to the mortgage, to enter upon and take possession of the property. 26. Pursuant to s60 of the Real Property Act, 1900 once the Bank became entitled to enter upon and take possession of the property pursuant to the mortgage, the Bank became entitled to bring proceedings in the Supreme Court for possession of the property." As I have said the respondent claimed an order for possession and an order granting it leave to issue a writ of possession forthwith. A verified defence was filed on 18 June 1992 in which the appellants admitted, relevantly, the mortgage, the terms of the orders of Hill J (para8 and paral15) and paral2 to paral4 inclusive and paral9 to para23 inclusive of the statement of claim. The proceedings came on for hearing before Studdert J on 27 August 1992. On that day the appellants applied to amend the defence by withdrawing the admissions going to para21, para22 and para23. In refusing the application Studdert J said: "Once again Mr Churchill relies upon the pending appeal to the High Court which concerns a sum of withholding tax. y that appeal succeeds then there would be some $40,000 odd by way of adjustment as between the plaintiff in these proceedings and David Securities Pty Ltd and A and T Rahme and Sons Pty Ltd. The amount de according to the judgment of the Federal Court as at the time of the pleading of the statement of claim, and I refer to para8 which is admitted in the defence, is US$286,000 in round figures. I do not consider it would be doing justice between the parties if I were to allow the amendment now sought to the pleadings, the pleadings containing admissions being pleadings which were verified." On the proceedings for possession Studdert J delivered judgment on 4 September 1992. His Honour summarised the various proceedings before the Court and dealt with what seemed to be the only or principal defence argued namely a plea of res judicata as explained in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. His Honour rejected this defence. He said: "There being no other basis of challenge to the present claim, I conclude that the plaintiff is entitled to the judgment sought." He made an order directing the entry URJ RAHME v COMMONWEALTH BANK OF AUSTRALIA (Sheller JA) 11 of judgment for possession of the subject premises in favour of the respondent and ordered the appellants to pay the respondent's costs. On 22 September 1992 the appellants filed a notice of appeal to this Court. The grounds of appeal, which were extensive, go to the point of res judicata argued before and rejected by Studdert J. On 2 October 1992 a supplementary notice of appeal was filed going to the same contention. There was tendered to us a document "Supplementary Notice of Appeal" which bears a filing stamp dated 25 November 1992. This set out supplementary grounds of appeal as follows: "1. The Judgment of Justice Hill of the Federal Court of Australia relied upon to establish debt has been set aside and is of no effect. 2. The Judgment of Justice Hill of the Federal Court of Australia relied upon to establish debt was not a final judgement." This no doubt was intended to take advantage of the order of the High Court in the form it was made on 7 October 1992. HEARING OF APPEAL When the appeal was called on for hearing on 5 November 1993 the appellants did not seek to pursue any of the grounds set out in the three notices of appeal to which I have referred. Rather they sought to file in Court notices of motion to enable them to rely upon one or both of two further notices of appeal described respectively as "Second Further Amended Notice of Appeal" and "Third Further Amended Notice of Appeal'. After hearing argument the Court indicated that it would dismiss both applications to file these amended forms of notices of appeal with costs and would deliver its reasons for doing so later. No further ground being argued the appeal was then dismissed with costs. SECOND FURTHER AMENDED NOTICE OF APPEAL The grounds of appeal in that document were as follows: "1. His Honour erred in refusing to grant the appellants leave to amend their defence to raise the ground the subject of the then reserved judgment in the High Court of Australia (AB2/566E-S). 2. His Honour erred in failing to hold that: 2.1 the Notices purportedly issued under s57 (2) (b) of the Real Property Act, 1900 ('RPA') (AB1/32 and 33) ('the Notice') claimed a sum (being the judgment sum originally ordered by Justice Hill in the Federal Court of Australia; 'the First Judgment') which was excessive by reason that it failed to give credit for the right of the appellants as sureties to a set-off for overpayments by the principal debtor to the respondent of sums referable to withholding tax; 2.2 the Notices, accordingly, were not valid notices under s57 (2) (b) of RPA; 2.3 in the premises, no right to possession under CLE3 of the mortgage (AB1/45M-N) arose, since no valid power of sale was exercisable by the Respondent. 3. Having regard to the judgments of the High Court of Australia (on appeal from decisions of Full Federal Court and Hill J), delivered on 7 October 1992 and 7 September 1993, inter alia, partially staying the First Judgment ('the Stay'), 3.1 the Notices were and are invalid for substantial overstatement; 3.2 the First Judgment is not presently enforceable and the order for possession made by Mr Justice Studdert:- 3.2.1 should be set aside accordingly as the same was based on the validity of the First Judgment; 3.2.2 would not now be enforced by this Honourable Court; and or 3.2.3 ought to be stayed pending determination of the proceedings remitted to Justice Hill by order of the High Court of Australia 12 UNREPORTED JUDGMENTS 3.3 No power of sale was or could be exercisable by the respondent pursuant to the failure of the appellants to comply with the Notices, since the Notices are and were not valid 4. The stay has rendered any enforcement of the order for possession made by Mr Justice Studdert: 4.1 inequitable or unconscionable in that the basis for which that order was made was or is erroneous because it assumed that the First Judgment was fully enforceable. 4.2 inconsistent with the continuance of the stay." Based on these the appellants ask that the appeal be allowed with costs and the proceedings for possession of land dismissed with costs. It can be said at the outset that there was no real reason advanced why grounds 1 and 2, if they were to be relied upon, were not raised in the original notice of appeal. I do not propose to dwell upon this delay or the prejudice to the respondent which may have, had reliance on the point been brought to its attention, resolved the continuance of the litigation by issuing fresh notices under s57 of the Real Property Act 1900. Nor need I dwell upon the question of whether the respondent was entitled to enter into possession pursuant to s60 of the Real Property Act regardless of whether it had given a notice or a valid notice under s57. In its statement of claim the respondent claimed to be entitled so to do. CLE2 and CLE3 do not to my mind necessarily limit that statutory right. However all that may be it is undisputed that pursuant to the guarantee the appellants owe to the respondent, in respect of amounts which Hill J ordered David Securities Pty Ltd and A and T Rahme and Sons Pty Ltd to pay on the respondent's cross claim, well in excess of $1 million and accordingly the notices given pursuant to s52 (2) (b) requiring payment to the respondent by the first and second appellants respectively of US$286,632.58 and interest of AUD$78,518.90 on 24 October 1990 far from overstating the appellants' liability to the respondent substantially understated it. Thus the error alleged in CL2 of the proposed amended notice of appeal could not be made out. The order of the High Court made on 7 September 1993 set aside the order of the Full Federal Court so far as it related to the appellants' appeal from the order made on 11 May 1989 dismissing the appellants' application but let O.1 and O.2 on the respondent's cross claim intact. The orders on the cross claim was stayed to the extent of US$60,000 and interest pending further order of the Federal Court. It is unnecessary and undesirable that we should express any opinion about the effect of this beyond saying that once again even allowing for the appellants' claim to reimbursement for reasons already given the notices under s57 substantially understate the amount owing to the respondent by each of the appellants. Accordingly the matter stated in CL3.1 of the second further notice of appeal "the Notices were and are invalid for substantial overstatement" is incorrect. From what I have said so far it is apparent that grounds 1, 2 and 3 upon which the appellants wish to rely have no substance and would inevitably be rejected. No other basis was advanced to support ground 4 and that too would, in my opinion, inevitably be rejected. It is for these reasons that leave to file the Second Further Amended Notice of Appeal was refused. THIRD FURTHER AMENDED NOTICE OF APPEAL By this document the appellants sought to add the following grounds: "2A.1 On 4 November 1993, the respondent unequivocally elected not to allow the appellants a set off in respect of the amounts of withholding tax. URJ RAHME v COMMONWEALTH BANK OF AUSTRALIA (Sheller JA) 13 2A.2 That election fundamentally prejudiced the appellants in that the respondent seeks to assert its right to retain the order for possession in the basis of the Notices which demanded to the present knowledge of the respondent substantially more than the respondent was entitled to demand as at 24 October 1993. 2A.3 In those circumstances a right arose in the appellants as sureties to terminate and/or cancel the guarantees and mortgage the subject of these proceedings for breach by the respondent which on 5 November 1993 the appellants did. 2A.4 The respondent is accordingly no longer entitled to any moneys under the guarantee or to retain the benefit of the mortgage." Counsel for the appellants filed in Court. at the hearing of the appeal and read against objection an affidavit of Peter Alan Jackson of 5 November 1993 to which was annexed correspondence between the solicitors for the parties from 11 October 1993 to 5 November 1993. I set out the substance of this interchange so that the point raised under the third further amended notice of appeal can be understood. 11.10.93 Respondent's solicitor to appellants' solicitor "T refer to the orders made by Kirby P this morning and in particular to the direction that the Bank file any further affidavit evidence upon which it wishes to rely by 25 October 1993. The Bank wishes to prepare up to date valuations of the various security properties over which mortgages have been given by Mr and Mrs Rahme or by David Securities Pty Ltd. Would you please obtain your clients' instructions as to whether they will grant access, for valuation purposes, to the properties located at: 24 Wetherill Street, Narrabeen 67 Lincoln Avenue, Collaroy 6/7 Gurrigal Street, Mosman" 15.10.93 Respondent's solicitor to appellants' solicitor "Just to avoid a repetition of the eleventh hour confusion in the High Court, it would assist me if you would confirm that the only material additional to the appeal books in these proceedings which you have filed and upon which you may wish to rely at the hearing on 5 November 1993 is: 1. Notice of motion dated 7 October 1992. 2. Affidavit of Therese Rahme sworn 29 September 1992 3. Affidavit of Peter Alan Jackson sworn 7 October 1993. I recognise, of course, that you may add to this with any material sworn in answer to the Bank's (yet to be filed) affidavit pursuant to the orders of Kirby P on 11 October 1993." 18.10.93 Appellants' solicitor to respondent's solicitor "We refer to the judgment of the High Court delivered on 7 October 1992 (reported in 175 CLR 353) and the orders made by the High Court on 7 September 1993. As you know, the High Court held that the covenants to pay withholding tax were void. It follows that the Bank has been paid a substantial sum in respect of withholding tax to which it was not entitled. Our clients cannot understand why the Bank has persisted in these proceedings Mr and Mrs Rahme require to know whether the Bank accepts that it must give credit to them for the overpaid withholding tax and interest thereon in reduction of any liability which they may have. This credit must be given whether or not the principal debts are successful in establishing a liability of the Bank to repay (although obviously Mr 14 UNREPORTED JUDGMENTS and Mrs Rahme do not seek to assert that if repayment were ordered that they would be entitled to have the same liability deducted twice). It follows that the appeal should be allowed and the judgment below should be reversed with costs This should be achieved forthwith by filing consent orders This will avoid the unnecessary incurring of costs and the need to file an Amended Notice of Appeal raising, inter alia, matters which have occurred after judgment. Please inform us no later than 22 October 1993 of the Bank's response." 21.10.93 Respondent's solicitor to appellants' solicitor "I refer to your letter of 18 October 1993. I do not fully understand para3. Do your clients, in asserting that the Bank is obliged, pursuant to the (revised) orders of the High Court made on 7 September 1993, to 'give credit to them for the overpaid withholding tax and interest thereon in reduction of any liability which they may have' therefore accept the quid pro quo of their assertion, namely that David Securities Pty Ltd presently has a liability to the Bank for the amount of the judgment debt on the cross claim entered by Hill J net of that portion of the judgment which has been stayed by the High Court?" 25.10.93 Appellants' solicitor to respondent's solicitor We refer to your letter of 15 October 1993. Our clients will rely upon the Affidavit of P A Jackson sworn 7 October 1993 and the decision by the High Court (reported in 175 CLR 353). Having regard to the undertaking given by the Bank when the matter was last before Kirby ACJ, is there any reason for the stay motion to proceed for our respective clients except to seek an order that costs of it be costs in the appeal?" 25.10.93 Appellants' solicitor to respondent's solicitor "We refer to your facsimile of 21 October 1993. No 'quid pro quo' of the kind to which you refer is asserted or accepted by our clients. They are enquiring as to what the Bank claims are its rights against them and whether in doing so the Bank accepts that it should give the credit referred to. We notice a typographical error in para3 of our letter, namely 'principal debts' in line 4 should read principal debtors' Please respond to our request by 10.00 am on 26 October 1993." 27.10.93 Appellants' solicitor to respondent's solicitor "We refer to our facsimile of 25 October 1993 referring to the earlier letter of 18 October 1993. Can you please provide us with your response to our earlier letter." 27.10.93 Respondent's solicitor to appellants' solicitor "T refer to your letter of 25 October 1993 (which came to my attention after I had sworn the affidavit which was filed that day and served upon you through the document exchange). The short answer to your enquiry 'as to what the Bank claims are its rights against [your clients]. ' is that the Bank claims those rights which have accrued to it pursuant to the judgment of Hill J on the cross claims against A and T Rahme Pty Ltd and David Securities Pty Ltd as varied by the orders of the High Court made 7 September 1993. As for the matter raised in your other facsimile letter of the same date relating to the application for a stay, I am seeking the Bank's instructions." 29.10.93 Respondent's solicitor to appellants' solicitor URJ RAHME v COMMONWEALTH BANK OF AUSTRALIA (Sheller JA) 15 "T refer to your facsimile transmission of 28 October 1993 [which was not annexed to the affidavit] and am not so sure that we are at cross purposes. The situation, as I see it, is this - Kirby P on 11 October, directed written submissions [he did not grant the appellants leave to interrogate the respondent, specify the form in which answers should be given and demand answers by specific times.] The rules of court provide for the order in which those submissions are to be made. The appellants make their submissions first and the respondent then provides submissions in reply. Your tendentious request is really an attempt to induce the Bank to put its position before it receives your submission. If you are seeking (what you consider to be) a 'responsive' reaction to the propositions which you advanced in your letter of 18 October, I respectfully suggest that you incorporate those propositions in your written submissions and you will then have the benefit of the Bank's 'responsive' reply. Furthermore, I do not understand your tilt at the affidavit the Bank has filed "suggesting [you] are not answering....letters' Is there any issue that at the time the affidavit was sworn no reply had been received by me to either of the two letters referred to? It is true that your letter of 27 October 'crossed' with the affidavit (which I have already acknowledged) but that still leaves my letter of 11 October unanswered, almost three weeks later." 1.11.93 Appellants' solicitor to respondent's solicitor "We refer to the captioned matter and your fax dated 29 October 1993. Plainly, our client is entitled to know the claim that is being made against it. Our letter of 18th October 1993 is for that purpose. We are unable to finalise the drafting of our client's submissions until we have a response to our letter of 18th October 1993. Please advise before 12 noon today." 1.11.93 Respondent's solicitor to appellants' solicitor "T refer to your letter of today's date. I cannot understand why you are 'unable to finalise the drafting of [your] client's submissions...." because of my declining to provide a Readers' Digest version of the claim that is being made against [your clients]'. The claim is contained within the pleadings, surely, (that is their purpose, after all) and your clients have brought an appeal against the first instance judgment on that claim. The grounds upon which that judgment is attacked are, presumably, contained within the notices of appeal and the proper place for discussion/argument about the nature of the claim and the effect of the judgment is during the hearing of appeal itself (of which written submissions, in the order prescribed by the rules of court, form part). I do not wish to be discourteous but it seems to me I have already made this clear: indeed, I feel that I am repeating myself Would you please advise when I may expect to receive your written submissions." 2.11.93 Respondent's solicitor to appellants' solicitor "T attach copy of supplementary notice of appeal, apparently filed on 25 November 1992." 2.11.93 Respondent's solicitor to appellants' solicitor "T refer to your facsimile of today's date. The matter raised in your second paragraph will be addressed by Counsel in the Bank's reply to your written submissions." 5.11.93 Appellant's solicitor to respondent's solicitor "We refer to the written submissions filed on behalf of your client. It is abundantly clear from those submissions that the Bank does not accept that the judgment of Studdert J is effected by the orders of the High Court (see para7, para8, parall, paral2 and particularly paral5). That is the Bank does not accept 16 UNREPORTED JUDGMENTS that it is obliged to give the Rahmes a set-off for the withholding tax extracted out of A and T Rahme and Sons Pty Ltd pursuant to a provision rendered 'absolutely void' by s261 of the Income Tax Assessment Act. In those circumstances it seems to us that the answer to the questions we first asked you on 18 October 1993 is 'no'. By persisting in defending the original order for possession based as it was on a notice rendered insupportable by the High Court's orders of 7 September 1993, your client has sought to obtain something from our clients to which it is no longer entitled: possession of premises based upon a demand which gives not credit for the overpaid withholding tax. course quite clearly prejudices our clients: they stand to lose possession whereas if the Bank accepted its obligations they would not. In the circumstances your client's culminating in its written submissions evinces an intention not to be bound by the terms of the guarantees and mortgage. Furthermore, that conduct causes substantial prejudice to our clients. The Bank's unequivocal conduct is therefore an act which gives rise to a right in our clients to cancel the guarantees. Our clients do so. It follows that our clients are entitled to cancellation of the guarantees and delivery of the certificate of title with a discharge in registrable form. Please deliver these forthwith." As the last of these letters indicates the appellants seek to squeeze from this interchange an intention evinced by the respondent not to be bound by the terms of the guarantees and mortgage, and substantial prejudice. The paragraphs referred to from the written submissions were as follows: "7. Such a case is without merit in fact or law. On 24 October 1990 the Bank forwarded notices demanding payment of US$286,632.58 and A$78,518.90. (AB21 M-O and AB32 and AB33). The aggregate of those sums is far less than the amount owing by the Appellants even if credit is given for the amount for which the stay was ordered. 8. Even if the Appellants' argument succeeded, the Bank could issue fresh notices for a lesser amount and immediately obtain judgment for possession, assuming, which is denied, that a valid notice is a prerequisite of the Bank's entitlement to possession. It is difficult to conclude otherwise than that the motive of the Appellants is to delay the Bank's legitimate right to enforce its securities which have twice previously been tested before the Courts and twice previously been upheld. 11. If the preposed ground 1 in the 'Second Further Amended Notice of Appeal' had been raised in accordance with the Rules, the Bank could have considered the possibility of 'another notice which would have remedied the situation... when no prejudice would have been caused to any party' - (see Websdale v S and JD Investments Pty Ltd 24 NSWLR 573, 582E per Clarke JA). By seeking to put in issue the validity of the notices at this late stage prejudice is occasioned to the Bank and further delay will be the inevitable result. Accordingly, for that reason alone, leave to amend the grounds of appeal should be refused. 12. In any event, the refusal of Studdert J to grant leave to amend the defence was clearly correct. The application to amend was made on the day of the hearing without prior notice to the Bank. The application to amend did not merely raise new grounds, but required the withdrawal of verified admissions contained in the URJ RAHME v COMMONWEALTH BANK OF AUSTRALIA (Sheller JA) 17 defence. The Appellants had admitted the matters alleged in para21, para22 and para23 of the statement of claim and thereby admitted the validity of the s57 (2) (b) notices. 15. Accordingly, the Appellants should not be given leave to amend the Notice of Appeal or to rely on the submissions in their written submissions. Further, as no submissions are put forward in support of the existing notice of appeal and supplementary notice of appeal in the Appeal Book the appeal should be dismissed with costs. However, if the Court is disposed to grant leave, it should only be on terms that the Appellants tender immediately the amount of the undisputed indebtedness of the Appellants to the Bank of US$1,280,746.34 together with material of A$1,127,505.14." The High Court held that CL8 (b) requiring the appellants to reimburse the respondent for withholding tax was void and that it was no defence to the recovery by the appellants of the amounts overpaid that they were paid under a mistake of law. The questions remain whether they were paid under a mistake and, if so, whether the respondent changed its position on the face of receipt of payments by David Securities Pty Ltd and A and T Rahme and Sons Pty Ltd. The matters are to be decided by Hill J. I accept for present purposes that there is a powerful argument that whatever the result of this debate and even if in the account between the principal debtors and the respondent the amount of overpayment is not to be deducted from the principal debtors' liability for further payments, the guarantors, the appellants in this case, stand in a different position and should be allowed the benefit of the amount of any payment to be deducted from their liability to the respondent under the guarantees; Egbert v National Crown Bank [1918] AC 903 at 909-910. The appellants urged that on the evidence, to adapt the language of Gibbs CJ in Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625-6, the respondent had evinced an intention no longer to be bound by the contract or showed that it intended to fulfil the contract only in a manner substantially inconsistent with its obligations and not in any other way. See also Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 634 per Mason CJ. Accordingly it was argued the respondent by its conduct evidenced in the correspondence and submissions had repudiated the contracts of guarantee. No argument was addressed as to the effect of the acceptance of the alleged repudiation upon nights already unconditionally acquired; see McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-7; Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (In Liquidation) (1936) 54 CLR 361 at 380 and 386; Elkhoury v Farrow Mortgage Services Pty Ltd (In Liquidation) (1993) 114 ALR 541 at 546. Furthermore in Green v Sommerville (1979) 141 CLR 594 at 611 Mason J, as he then was, said: ".. it is a general principle of the law of contract that the Court will not readily infer from a party's insistence on a wrong construction of a contract that he is unwilling to perform it according to its true construction." While the appellants' solicitor was apparently attempting to gain a statement from the respondent upon which the appellants could rely to terminate the contracts of guarantee the responses, to my mind, nowhere approached objective evidence that the respondent intended to fulfil the contracts only in a manner substantially inconsistent with its obligations or in any other way renounced the contracts. Fairly read the interchange showed that the respondent chimed no more than those rights accrued to it pursuant to the judgment of Hill J as varied by the order of the High Court. If the consequence is that the liability of the 18 UNREPORTED JUDGMENTS appellant guarantors must be reduced to the extent of any overpayment and interest thereon there is nothing to suggest that the respondent does not accept that. At the present time the respondent seeks only an order for possession. Plainly the appellants are indebted to it in an amount far in excess of the amount claimed in the notice under s57. There is, in my opinion, no prejudice to the appellants in the making of the order for possession. No doubt if in due course the property is sold an account will be taken in the manner the appellants suggest if that is appropriate in law. I need not dwell on the procedural question raised by the appellants' seeking to agitate on appeal what is in substance a fresh claim not covered by the pleadings. It is sufficient to say that the evidence produced does not, in my opinion, support the conclusion upon which the proposed amendment is based that the respondent unequivocally elected not to allow the appellants a set off in respect of the overpayments on account of withholding tax. Accordingly the grounds relied upon in the third further amended notice of appeal would inevitably be rejected. For these reasons leave to file the notice of appeal was refused. Powell JA I agree with the Judgment of Sheller JA, as also do I agree with the additional observations made by Mahoney JA in his Judgment. Orders Applications dismissed with costs. Appeal dismissed with costs. Counsel for the Appellants: S D Rares/N Pemm Counsel for the Respondent: A R Emmett QC/J E Marshall Solicitors for the Appellants: I S P Law Solicitors for the Respondent: L E Taylor