New South Wales Court of Appeal CITATION: Ford by his tutor Beatrice Ann Watkinson v Perpetual Trustees Victoria Limited [2009] NSWCA 43 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 5 March 2009 JUDGMENT DATE: 5 March 2009 JUDGMENT OF: Allsop P at 1; Young CJ in Equity at 17; Sackville AJA at 18 EX TEMPORE JUDGMENT DATE: 5 March 2009 1. Grant leave to the respondent to file within 7 days and rely upon a cross appeal in the form presented to the court in this application minus ground 4. 2. Vacate the hearing of the appeal today. 3. Orders that the respondents to pay the costs of today and of the application before the Registrar on an indemnity basis and that the appellant have leave to tax such costs forthwith. 4. Order 3 to supplant any order for costs made by the Registrar on an indemnity basis. DECISION: 5. Grant the appeal and the cross appeal expedition. 6. Direct the parties to approach the Registrar as soon as possible for the arrangements of a new date on or after 9 May 2009 on the basis of one to two days. 7. Grant leave to the appellant within 14 days to file an amended notice of appeal. 8. Within 14 days the appellant file and serve the submissions on the cross appeal and the amended appeal. 9. Within 14 days thereafter the respondent file and serve written submissions and reply. CATCHWORDS: PROCEDURE - Notices of motion to review of decision of the Registrar - filing of cross appeal out of time - potential prejudice to the appellant - leave granted to file cross appeal LEGISLATION CITED: Contracts Review Act 1980 (NSW) CATEGORY: Procedural and other rulings PARTIES: Patrick John Ford by his tutor Beatrice Ann Watkinson Perpetual Trustees Victoria Limited FILE NUMBER(S): CA 40141/2008 COUNSEL: D H Murr SC, M W Sneddon (Appellant) B Coles QC, I S Docker (Respondent) SOLICITORS: Legal Aid NSW (Appellant) Gadens Lawyers (Respondent) LOWER COURT JURISDICTION: Supreme Court LOWER COURT FILE NUMBER(S): 15045/2005 LOWER COURT JUDICIAL OFFICER: Harrison J LOWER COURT DATE OF DECISION: 1 February 2008 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40141/2008 ALLSOP P YOUNG CJ in EQ SACKVILLE AJA 5 March 2009 PATRICK JOHN FORD BY HIS TUTOR BEATRICE ANN WATKINSON v PERPETUAL TRUSTEES VICTORIA LIMITED Judgment - on application for review of decision of Registrar 1 ALLSOP P: This is a notice of motion brought by the respondent to the appeal to review a decision of the Registrar in February refusing the respondent leave to file a notice of cross-appeal out of time. It is unnecessary to detail the chronology of the matter fully. It is sufficient to say that on 1 February 2008 a judge of the Court in the Common Law Division ordered that judgment be entered for the respondent/plaintiff for $268,629.33 in restitution in relation to moneys that had been paid by the respondent to the appellant and his son pursuant to a loan agreement and mortgage. 2 In those proceedings before the primary judge the appellant successfully argued that the loan agreement and the mortgage had not in effect been executed by reason of the doctrine of non est factum. Notwithstanding those conclusions, the primary judge in dealing with the principles of restitution found the appellant liable to repay personally the full sums that had been lent by the respondent. 3 The matter came before the Court of Appeal by reason of a notice of appeal by the appellant challenging the restitution findings and conclusions. No cross-appeal was filed in relation to the conclusions as to non est factum. Late in 2008, the respondent changed its view as to its desire to file a notice of cross-appeal and gave notice in December as to that desire. A motion was brought before the Registrar with not a great deal of expedition on behalf of the respondent but the matter came before the Registrar in February who refused the leave to file the cross-appeal on the basis in part of the lack of proper explanation as to the delay and because it would disturb the one day date that had been made available today for the hearing of the appeal. 4 The appeal is listed for today together with the motion to review the Registrar's decision. While, if I may respectfully say so, there is considerable force in the reasons of the Registrar, in my view, for the reasons that I will give in a moment, and subject to the conditions that I will identify in a moment, both parties should have the opportunity to ventilate all issues that they wish to in this dispute and I would grant leave to file the cross-appeal. 5 The cross-appeal raises potentially important legal issues and is brought on the basis that there is no challenge whatsoever to the findings of fact of the learned primary judge. The question of the operation of the doctrine of non est factum in a case such as this with the found incapacity of the appellant is an important one. The issue of non est factum being raised brings into play an aspect of the proceedings dealt with only conditionally by the learned primary judge and that is the operation of the Contracts Review Act. Given the conclusions that his Honour came to that there was in effect no contract, on one view - and I express no concluded view about it - for that reason alone the Contracts Review Act may have been seen to be irrelevant to these appeal proceedings. However, if the question of the existence of a binding contract is brought into play real issues arise as to the operation of the Act. His Honour expressed the view that the Act on its face could not apply because of s 6 (2) of the Act. That was a proposition contradicted the appellant to by submissions below and those submissions would be re-agitated in an amended notice of appeal. 6 It is most regrettable that this has occurred in the way it has. It is unnecessary to repeat the circumstances of the appellant. All those present should understand that the Court is fully cognisant of all terms of the primary judge's reasons and of the disadvantages that the appellant faces. However, these are important legal issues that may affect the rights of both parties given the inter-connected nature of the Contracts Review Act, non est factum, incapacity and restitution and in the long run the most appropriate and most expeditious way of dealing with the totality of the issues is, in my view, to allow the cross-appeal to be brought and to allow the other issues to unfold on that basis. 7 The potential prejudice to the appellant which is the most powerful reason why the cross-appeal might not be allowed to be filed is the attitude of a trustee in bankruptcy. The appellant was made bankrupt on an ex parte application in connection with workers' compensation premiums said to be related to the business that was funded by the loan in this case. That bankruptcy was annulled by orders of the Federal Magistrate's Court but there are fees to be paid to the trustee in a not inconsiderable amount of money. The evidence reveals that there have been negotiations taking place between the parties as to meeting those fees which negotiations have not reached any finality. It should be noted that those negotiations have been conducted on the basis that this appeal will be heard today. The risk is, of course, that the trustee may have a view as to moving in relation to the property should the appeal today not go ahead. 8 I wish to make the following remarks about that possibility: First, the respondent to this appeal has an equal interest in ensuring that no steps are taken prematurely by any party, the trustee in bankruptcy or otherwise, to interfere with the property given that its success on the cross-appeal could mean that its security interests are reinstated in relation to the property. 9 The orders that I am prepared to make are made on the understanding that the respondent will support any attempt to protect the property should that unfortunate eventuality arise if the trustee in bankruptcy takes a view that steps are necessary to be taken. 10 However, might I say (if I may put it this way, recognising that the trustee is not here and without seeking to trench at all upon the professional judgment of the trustee in bankruptcy, controlled as that trustee would be in that regard by a federal court) that it might be seen to be contrary to the interests of justice in respect of both parties to this litigation for the trustee to move prematurely in relation to the property, which, depending on the result of the appeal and cross-appeal, could lead to prejudice to the respondent in relation to its security interests or could lead to prejudice in relation to the appellant, a man of very limited capacity, in relation to his home. It would be deeply regrettable if costs were expended that were unnecessary in that regard but, as I say, I do not intend to trench at all upon the professional judgment of the trustee or, of course, upon the judicial control of the trustee by the Federal Court or Federal Magistrates Court. 11 Having said that, and related to that issue is the recognition that I should express clearly that today's position has not been brought about in the slightest by the appellant who has opposed the filing of the cross-appeal, who has (with some delays which have been identified) generally brought the appeal on with due expedition. A special fixture was given and the appellant is not to be criticised for the filing of the cross-appeal causing any delay. 12 Because of my view, for the above reasons, that the prejudice is unlikely to come home given what I would anticipate to be the proper approach of the trustee in bankruptcy I am prepared to allow the notice of cross-appeal to be filed, again on the understanding that the respondent will act responsibly in supporting the appellant in relation to the property. 13 Mr Murr, senior counsel for the appellant, has indicated that he would prefer the position that the appeal today be vacated if the notice of cross-appeal is allowed to be filed. Mr Coles submitted that in his view the day should be sought to be used in relation to the restitution arguments. Given the position that the respondent has placed the appellant in I do not think, with the greatest respect to Mr Coles, that it lies in his mouth to contest Mr Murr's position. It is one that is reasonable. The issues are all inter-related, the restitution, the non est factum and the Contracts Review Act and it not only might be seen to be wasteful in terms of costs but prejudicial in terms of presentation of argument on behalf of the appellant to dealt with the matter in two bites which would necessarily be a significant time, that is, some weeks, apart. 14 For those reasons I would make orders in relation to the vacation of the appeal conformable with the wishes of senior counsel for the appellant. 15 Therefore the orders that I propose are as follows: 1. Grant leave to the respondent to file within 7 days and rely upon a cross appeal in the form presented to the court in this application minus ground 4. 2. Vacate the hearing of the appeal today. 3. Orders that the respondents to pay the costs of today and of the application before the Registrar on an indemnity basis and that the appellant have leave to tax such costs forthwith. 4. Order 3 to supplant any order for costs made by the Registrar on an indemnity basis. 5. Grant the appeal and the cross appeal expedition. 6. Direct the parties to approach the Registrar as soon as possible for the arrangements of a new date on or after 9 May 2009 on the basis of one to two days. 7. Grant leave to the appellant within 14 days to file an amended notice of appeal. 8. Within 14 days the appellant file and serve the submissions on the cross appeal and the amended appeal. 9. Within 14 days thereafter the respondent file and serve written submissions and reply. 16 Those are the orders that I would propose and those are the reasons I would give for those proposed orders. 17 YOUNG CJ IN EQ: I would agree with those reasons and have nothing to add. 18 SACKVILLE AJA: I also agree. 19 ALLSOP P: The orders of the court are as I have proposed. The parties should approach the Registrar as soon as possible to obtain a date. ********** 31/07/2009 - Change to short case title - Paragraph(s) Coversheet 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.