New South Wales Court of Appeal CITATION : CURRIE & ANOR v LISTON & ANOR [1999] NSWCA 256 FILE NUMBER(S) : CA 40661/97 HEARING DATE(S) : 16 July 1999 JUDGMENT DATE : 16 July 1999 PARTIES : DALE HENRY CURRIE & ANOR v HENRY LIGHT LISTON & ANOR JUDGMENT OF : Mason P at 1; Stein JA at 17; Davies AJA at 21 LOWER COURT JURISDICTION : Supreme Court - Common Law Division LOWER COURT FILE NUMBER(S) : SC 16258/90 LOWER COURT JUDICIAL OFFICER : Master Malpass COUNSEL : J Christie/ MSM White (Appellant) R W White SC/ A J Slink (Respondent) SOLICITORS : Kell Moore & Co (Appellant) Blake Dawson Waldron (Respondent) CATCHWORDS : APPEAL - application to amend grounds refused - case might have been conducted differently below DECISION : Dismissed THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40661/97 MASON P STEIN JA DAVIES AJA Friday 16 July 1999 DALE HENRY CURRIE v HENRY LIGHT LISTON JUDGMENT 1 MASON P: In 1981, the appellants sold a bus run business which they owned to Mr and Mrs Arandale. The purchase price was secured by an indenture. The assets of the business were its book debts and goodwill. A primary item of the business related to rights under an arrangement with the Department of Transport for payments to be made periodically for transporting schoolchildren. 2 In 1981 some of the purchase price was paid but there was subsequent default under the indenture. In 1984, to the knowledge of the appellants, Mr Paul Arandale, the son of Mr and Mrs Arandale, became the new operator of the bus runs. There was a proposal from Mr Paul Arandale involving the offer of a bill of sale from him to the appellants and certain advice was taken by the appellants from Mr Liston, now deceased, a partner in the firm of the respondents who were solicitors. 3 The upshot of the advice was that the appellants did not take the new form of security that was being proposed by Mr Paul Arandale. Mr Arandale Senior went bankrupt in 1985 and Mrs Arandale, who was quite sick at the time, subsequently died. 4 Proceedings were brought and they were heard by Master Malpass of the Common Law Division. It was alleged that the solicitor had been negligent in the advice that he gave to the appellants. The case that was pleaded was that the solicitor had been retained to advise the plaintiffs with respect to their existing security, which was a registered bill of sale, and as to the advisability or otherwise of obtaining a bill of sale from Paul Arandale which he had offered to give them. While that was the retainer, the particulars of negligence in paragraph 15 of the amended statement of claim in the form which they were at the time of trial were confined to allegations of negligence in failing or neglecting to ensure that Paul Arandale gave the bill of sale that he was offering. 5 The claim was dismissed on a number of grounds which it is not necessary to consider. 6 The appeal to this Court initially challenged some of the reasoning of the Master. However, a couple of weeks ago notice was given to the effect that the appellants wished to present their case on an alternative basis. This morning an application was made to amend the notice of appeal and to amend the particulars of negligence in paragraph 15 of the statement of claim. 7 The case now sought to be brought pursuant to the amendments was that there was a formal invalidity in the transfer of the business from Mr and Mrs Arandale to Paul Arandale, this transfer not being evidenced in writing; and, so the argument goes, the solicitor not having drawn that matter to the attention of the clients or turned his own mind to it was negligent in the way that he addressed the retainer and the matters which he was asked to advise upon in 1985. 8 Mr Christie has, as I have said, formulated by paragraph 15(d) the new way in which he would seek to plead the relevant particular of negligence. 9 The written submissions effectively joined issue on a number of grounds but principally on the question of whether on an appeal by way of rehearing it was appropriate for the Court to permit the case to be conducted in this new way. We invited Mr White, senior counsel for the respondents, to formulate the ways in which he might have conducted the case differently below, had it been formulated in the way it is now sought to be formulated. 10 There were six matters raised and the transcript will record those matters. One of them, which I think is sufficient for my own purposes, is that had the validity of the assignment been put in issue (because it was in effect common ground that the business had been assigned at trial) there would have been further exploration as to whether there was a lost written document. Alternatively, there would have been argument for which there clearly was an evidentiary basis to the effect that the Arandales, Senior and Junior, and the relevant government department were together estopped by a form of estoppel by convention from denying that there was a transfer. Indeed, there is probably a basis for saying there may have been an estoppel as between the appellants and the respondents, because of the correspondence passing between the solicitors in 1985 (red appeal book 80 line M). 11 Mr Christie submitted forcefully that the matters which Mr White raised were not real issues or were matters which were clearly established to the contrary below. But the difficulty remains that the question is whether the case might have been conducted differently and whether evidence which was not brought to light, or cross-examination which did not take place, might have been brought to light or there may have been different cross-examination had the point now said to be the critical aspect of the negligent advice been formulated as such. 12 The principles are clearly established and I do not understand them to be in dispute. Two recent cases where they have been discussed in this Court are Multicon Engineering Pty Limited v Federal Airports Corporation (Court of Appeal Unreported 15 October 1997) and Council of the Municipality of Woollahra v Sved (Court of Appeal Unreported 24 July 1998). Mr Christie accepted, as I understand it, that the principle was that if the case might possibly have been conducted differently below, either in terms of argument or evidence, then that provides a fatal barrier to recasting it on appeal. 13 That is the first reason why I would refuse the leave. 14 The second reason is that I am just not satisfied that the new way in which the case is sought to be formulated leads to any doubt being cast upon the verdict. I say that because I would not wish the appellants to think that leave is being refused on some technical basis. The first ground is not a technical basis, it is a matter going to essential questions of fairness. But in any event I am quite unpersuaded by Mr Christie's argument that the advice which is said to have not been given would have had any bearing upon the rights of the appellants against the solicitor. I just cannot see the connection between being told that there was something invalid in the assignment between the Arandales Senior and Paul Arandale on the one hand and the effective cause of the appellant's loss on the other. From start to finish it was the insolvency of Mr and Mrs Arandale Senior that prevented the repayment of the debt. There was a security which according to the appellant's own evidence was a valid security. They had that security. It was valid notwithstanding the bankruptcy of Mr Arandale Senior and the death of Mrs Arandale Senior. The real problem was that it was not enforced, for reasons which are understandable but reasons which do not betoken any negligence on the part of the solicitor. 15 The case and I believe the only case that was run at trial was that the solicitor was negligent in not advising the appellants to take Paul Arandale's offer of some form of alternative security. That case failed at trial and it was not in any way part of the case which the appellants press in the appeal. Once that case is put aside (I am not suggesting there was any error in putting it aside), then the alternative case, which is the only one for this Court to consider, is one which in my view leads to a total blind alley and therefore would not be the basis of overturning the judgment below or granting a new trial. 16 Accordingly, I would propose that the leave to amend the pleading and the notice of appeal be refused. I will be asking Mr Christie whether he accepts that that disposes of the appeal but at this stage I merely deal with the amendment application. 17 STEIN JA: I agree with the President that leave should be refused to rely on the amended notice of appeal handed up this morning and the proposed amendment to the statement of claim. It quite clearly raises a new case and one which was not propounded before the Master. It was never raised on the pleadings including, importantly in my view, the particulars of negligence. It could have been raised as an amendment to the statement of claim before the Master and the Master could then have determined whether to permit it. Contrary to the submission of the appellant's counsel, there is patently the possibility of prejudice to the respondents. This is obvious from the submissions made by Mr White SC for the respondents, in opposing the amendments. 18 Coulton v Holcombe (1986) 62 CLR 1, The University of Wollongong v Metwally No 2 (1985) 60 ALR 68, and the other authorities mentioned by the President, dictate in these circumstances that the Court should not allow the amendments sought at this very late stage. This is not an exceptional case which would lead the Court to waive the rule. What the appellants are seeking to do is to argue a different ground of negligence to that alleged before the Master. 19 I also observe that the notice of grounds of appeal was lodged in October 1997 and not until the written submissions of appellant's counsel were filed in the last few days, was the new case foreshadowed. No explanation has been given in relation to this delay. One may only assume that it may have been dreamt up only recently. 20 I agree with the orders proposed by the President. 21 DAVIES AJA: I agree with the President and with Stein JA. 22 MASON P: Mr Christie, is there anything left in the appeal? 23 CHRISTIE: No, your Honour, that does dispose of it. 24 MASON P: The appeal is dismissed with costs. 25 WHITE: Before the Court does adjourn, I'm instructed to make an application for indemnity costs arising from service of a Calderbank letter in January this year. I don't know if the Court wishes to deal with that now or would invite submissions in writing in relation to it. 26 MASON P: Is there any real difference between indemnity costs and ordinary costs in the Court of Appeal? 27 WHITE: Having regard to the practice of taxing officers or other assessors, the answer is I don't know the answer to your question. 28 MASON P: You seek that the costs awarded in your favour be on the indemnity basis? 29 WHITE: Rather than on a party-party basis. 30 MASON P: Mr Christie? 31 STEIN JA: It's based on a Calderbank letter as I understand what Mr White said. 32 WHITE: Based on a letter of the 27th, yes, that's right. 33 MASON P: What was the date of the letter, Mr White? 34 WHITE: 27 January 1999. 35 MASON P: Is that the time when the indemnity costs kick in? 36 WHITE: It would be, yes. 37 MASON P: Mr White, this is just an ordinary Calderbank offer is it not? 38 WHITE: Yes it is. It's not an offer of compromise under the rules and there's a question then as to whether the Court has to consider reasonableness as well. 39 MASON P: Yes. We will not make an order for indemnity costs. ************** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.