JARDINE UNDERWRITING AGENCY PTY LTD v HILITE AGENCIES (NSW) PTY LTD and ORS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, MEAGHER and STEIN JJA 25 September 1998 [1998] NSWCA 116 Stein JA This is an appeal from a decision of Hunter J. The notice of appeal filed in July 1997 raised three grounds, two in paral and a separate ground in para2. The written submissions of counsel for the appellant abandoned ground 1(b) and ground 2 in the notice of appeal leaving reliance upon ground I(a) only. Ground 1(a) maintains that his Honour erred in adopting a referee's report in circumstances where the referee had wrongly rejected the whole of the appellant's expert report on the basis that the report did not, in express terms, make reference to the scope of works. When the hearing of the appeal commenced counsel for the appellant sought leave to file in Court an amended notice of appeal. It was said to reflect part of the argument in his written submissions. The document handed up included two grounds, ground 1(a) being in the same terms as ground 1 (a) in the original notice of appeal. Ground 1(b) added this: That his Honour erred in adopting the referee's report where the referee had unfairly informed himself by conferring privately with a respondent and other persons and unfairly failed to convey the contents of the information received to the appellants. I should interpolate that that new ground was opposed by counsel for the respondent. After hearing appellant's counsel argue why the Court should permit the amended notice of appeal to be relied on, the Court rejected the application. Mr Taylor, on behalf of the appellant, sought to be heard further in an attempt to convince the Court that the amendment ought to be permitted on the basis that he had not, he believed, put all that he could in relation to the matter. Mr Taylor then further addressed us and handed up additional written submissions which succinctly outlined his argument, not only for the amendment, but in relation to the substantive matter of the appeal itself. I will return to this document in a moment. By way of a thumb nail sketch of the matter, I should record that there was a summons before the Commercial Division and, pursuant to that summons, a referee was appointed with certain tasks. That referee was Mr Emerson. He had a tight timetable to adhere to and there was in existence a scope of works, which I referred to earlier. The scope of works is a fairly detailed document and is before us in the supplementary appeal book. The referee, it appears, went about his task and was in receipt of a number of quotations and reports to assist him. They were a quotation from C J Duncan Pty Ltd, initially of 13 December 1995 but revised with a new quotation dated either 2 or 3 May 1996; a quotation from R J Greenway dated 8 January 1996 and a report from Costin Structural Pty Ltd dated 22 April 1996. 2 UNREPORTED JUDGMENTS The referee compiled an extensive draft report dealing with the issues which had been referred to him. He provided a copy of the draft report to the parties, giving them the opportunity to make any comments or submissions on the draft before he finalised it. In that draft report, two matters of significance to the appeal appear. The first is to be found at the bottom of p21 of the appeal book. The referee stated 'I have also had the opportunity of conferring with Mr Alan Cleary, a representative of Hilite, [that is the respondent] C J Duncan of C J Duncan Pty Ltd' I interpolate that C J Duncan Pty Ltd was the firm that gave the quotation to the referee on behalf of the appellant, Jardine and Mr C J Duncan is said to be the principal of that company. The referee added 'as well as other persons'. The second matter of significance in the report appears at p22 of the appeal book between the letters U and X. The referee said in his draft report 'C J Duncan Pty Ltd has prepared its quotation on the basis of its own preferred Specification'. I continue to quote from the referee's report, 'No mention is made in that quotation of the Scope of Works of 3 March 1996. Thus there is no reference to any engineering requirements and it is deficient in detail as regards preliminaries, quality of materials and standard of workmanship. I therefore feel compelled to disqualify that quotation as being the basis for the valuation of repair costs'. In response to the draft report, the appellant's solicitor sent a four page document making comments to the referee. This is annexed to an affidavit of Mr Karp which was before his Honour. Indeed, part of Mr Karp's affidavit is quoted in the judgment. The only matter relevant to the quotations which I have made from the referee's draft report in the comments delivered to the referee prior to his final report, is to be found on the bottom of pl and the top of p2 of the document. At the bottom of p1 the submission states: 'The Referee says he spoke to Mr C Duncan of C J Duncan. Mr Duncan did not prepare the quotation dated May 2 1996, it was prepared by Mr Robert Dove of that firm. In the alleged conversation did the Referee ask what the quotation would have been if Duncans had quoted exactly in accord with the Civil Scope of Works?' There then follows some further material which argues that the referee should not disqualify the quotation on the basis the referee had indicated in his draft report. Thereafter, the referee delivered his final report in more or less the same terms as the draft report. The matter came back before Hunter J and the appellant opposed his Honour's adoption of the report. There is no document or pleading that succinctly sets out the basis upon which his Honour's adoption of the report was argued against. From his Honour's judgment, the Court is able to glean that it appears that the principal submission was what was claimed to be an inappropriate rejection of the report by the referee because it had not made mention of the scope of works of 3 March 1996. His Honour dealt with the competing arguments in relation to this issue and found against the appellant in terms of whether the report should not be adopted on the basis of the submission. His Honour also dealt with other matters described in his reasons for judgment as 'further submissions'. None of these, with one exception, is relevant to the appeal. However, at 59J of the appeal book, his Honour said: The first defendant did not persist in the argument that the referee had recourse to information not disclosed to it. UR&DINE UNDERWRITING AGENCY PTY LTD v HILITE AGENCIES (NSW) PTY LTD an@ ORS (Priestley JA) This, it appears, was a reference to the matter in the report which I mentioned earlier, appearing at p21 of the appeal book, of the referee stating that he had conferred with Mr Cleary from Hilite, Mr Duncan from C J Duncan Pty Ltd, as well as other persons. Counsel for the appellant is unable to assist as to whether the point in issue, that is the procedural fairness point if I may refer to it in that way, was a live one before Hunter J. It seems to me that we should assume, in the absence of any evidence to the contrary, and in the light of the sentence from his Honour's judgment that I have mentioned, that the point was not run before Hunter J. If there was an issue regarding it, it was well and truly waived by the appellant. There was in fact, so far as the court can ascertain from the materials drawn to attention, no evidence before Hunter J whereby any conclusion could be reached by his Honour that the referee had denied procedural fairness to the appellant. In the appellant's written submissions handed to us earlier this morning, para5 lists a number of matters which, it is submitted, his Honour failed to consider and thereby erred. Subpara(a), subpara(b) and subpara(d), it appears to the Court, simply did not arise for his Honour's consideration. The other sub paragraphs refer to matters which were dealt with by his Honour in making a discretionary decision. It has not been shown that the discretion exercised by his Honour in those regards had in any way legally miscarried. I would propose, in addition to the order already made that the amended notice of appeal be refused, that the appeal be dismissed. Priestley JA The order of the Court is that the appeal be dismissed for the reasons given by Stein JA. You wish to say something about costs Mr McKean? COUNSEL ADDRESSED ON COSTS: For the reasons that have been indicated in the course of argument, we do not think that we should order indemnity costs in this matter. Stein JA reminds me that I did not pronounce on the Court's behalf any order for costs because we were awaiting the application. The order of the Court in regard to the appeal that has just been dealt with is that it be dismissed with costs. The appeal is dismissed with costs.