TUGVALE PTY LIMITED vy COMMONWEALTH BANK OF AUSTRALIA SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL KIRBY P, MAHONEY JA and CLARKE JA 13 December 1993 [1993] NSWCA 274 MORTGAGES — failure to insure — consequences of — absence of any relevant loss — whether default sustains exercise by mortgagee bank of statutory power of sale — complaint not argued at trial — summons for leave to appeal — offer to tender evidence which would have been available at the trial — held: (1) The "fresh evidence", having been available at the trial, would not be admitted in the application; (2) The point of law not argued at the trial concerning the loss, if any, suffered by the mortgagor would not be sustained because (a) if it was raised at the trial it would have opened up issues which the mortgagee was entitled to contest; and (b) it was contrary to the authority of the Court in Morrisey v Bright [1978] 2 NSWLR 1 (CA); (3) Summons for leave dismissed with costs. LEGAL PRACTITIONERS — possible misconduct — failure to prosecute claim with diligence — receipt by counsel of his brief in summons for leave to appeal only 20 minutes before hearing commenced — held: (per Kirby P): The transcript should be referred to the Law Society of New South Wales for investigation of the circumstances relevant to the interests of the claimant and the reputation of the legal profession — reference without pre-judgment of any misconduct. Kirby P. Before the Court is a summons for leave to appeal. The matter has already been considered by Master Malpass, who entered summary judgment. An appeal to James J failed. Application is now made for leave to appeal to this Court from the determination of James J. There are two other proceedings before us. The first is an application for an extension of the time for a claim to be made out of time. The other is for a stay of execution of the order of James J. The stay is the immediate problem. Arguments have been advanced that the claimant should have leave so that it can contest the basis upon which, ultimately, the summary judgment was entered by the Master and upheld by James J — viz the failure of the claimant to insure the property in accordance with a clause in its mortgage. The claimant's chief point was that it wished to prove before this Court, with evidence which was not tendered below, that the property was, in fact, uninsurable. Hence, the failure to insure was not one to which the mortgage referred. The judgment, based thereon, was thus misconceived and should be set aside. It appears that this matter was argued below, but rejected by James J. This Court could not, conformably with ordinary principles, permit fresh evidence to be admitted which would have been available at the trial and which was not called to support the point before the previous judge. The question was raised during submissions as to whether an alternative argument might not have been available to the claimant. This was that the failure of the claimant to insure was not relevant to any loss incurred by the bank. This matter was not argued at the trial. Nor was it raised in the notice of appeal. If now 2 UNREPORTED JUDGMENTS permitted, it would be vulnerable to the suggestion that it opened up issues which the bank would not have been entitled to contest at the trial. More fundamentally, the point appears contrary to the authority of the Court in Morrisey v Bright [1978] 2 NSWLR 1 (CA) , 11. The claim is therefore without legal merit. It should be dismissed with costs. It is, therefore, unnecessary for the Court to consider the application for an extension of time or the application for a stay of the judgment pending the appeal. They each fail with the summons. I should say that it is a matter of concern to me that it was revealed, in answer to questions by me addressed to counsel for the claimant, that he received his brief only twenty minutes prior to the commencement of the proceedings before the Court this afternoon. A great deal of money is involved in this case. The vital interests of the claimant are involved. The Court can only deal with the matter on the basis of the issues and arguments presented to it. Counsel had only twenty minutes to consider the issues and to prepare his arguments. The explanation for that fact was not fully provided. It may be capable of explanation. In my view, the circumstances should be investigated by the Law Society of New South Wales. I believe that the defence of the interests of the claimant, and of the reputation of the legal profession for diligent attention to its clients" interests, requires that this be done. The transcript should be referred to the Law Society for that purpose. Taking this course involves no prejudgment of what the Law Society will discover. Mahoney JA. I agree that the application should be dismissed with costs. Clarke JA. So do I. Kirby P. The order of the Court is that the summons for leave is dismissed with costs. The motions fail with the summons. They are dismissed. 1. Summons for leave to appeal dismissed with costs; and 2. Motions dismissed. Counsel for the claimant: A D M Hewitt Solicitors for the claimant: Bouris Cominos Counsel for the opponent: R G Forster Solicitors for the opponent: Abbott Tout