Ensor & Anor v International Alpaca Management Pty Limited & Ors S180/1995 [1996] HCATrans 277 (5 August 1996)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S180 of 1995

B e t w e e n -

BEN K.E. ENSOR and GARRYMERE FARMS LIMITED

Applicants

and

INTERNATIONAL ALPACA MANAGEMENT PTY LIMITED, TEXTILE FINANCE LIMITED and COOLAROO ALPACA GENERAL PARTNER PTY LIMITED

Respondents

Application for special leave to appeal

BRENNAN CJ

GAUDRON J

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 5 AUGUST 1996, AT 12.51 PM

Copyright in the High Court of Australia

MR M.J. WEBECK: I appear for the respondents. (of Webeck Farland Pender)

BRENNAN CJ: You are appearing in person, Mr Ensor? You are not legally represented?

MR B.K.E. ENSOR, in person. No, your Honour. I apologise for this.

BRENNAN CJ: No, there is no need to apologise, but so long as you understand what the question is that you have to address. You have to show us that not only is there something that went wrong in the courts below but there is some question involved in this case which makes it a special case warranting a grant of special leave to appeal to this Court.

MR ENSOR: Yes, your Honour; I will do my best to address that, and I thank you for my ability to appear. I will now turn to the Full Court's reversal of the trial judge's findings upon the evidence of payment and.....of moneys payable under the purchase contracts, and respectfully ask you to turn to page 200 of the application book.

Upon reading it at 10 in the margin you see a request for costs of the shipment totalling $210,000. You further note that the sum is itemised into (a) airfreight, (b) associated costs. You further note midway down, the purchase contract is at the moment in default. At the bottom of the line you see Mr Forrest's specific provision that the funds afforded upon the condition they are held in trust with the ACL lawyer and used only for the cost of transporting the alpaca from Chile to Australia, including the quarantine on Cocos. But there is absolutely no reference to these funds being settlement of purchase moneys in default.

And over the page, at 201 of the application book, you see some acceptance by the Full Court judges that this payment was sent from Australia upon 17 August and arrived upon the 18th, and I respectfully submit that this was not possible at that time, and a minimum of seven days should be allowed, if not more, as we have done a considerable number of transactions and are aware of the steps money takes from branch here to head office in Australia, to the New York correspondent bank, to the correspondent bank's head office in Chile, to the recipient's bank's head office and, then, a transfer to Arica.

It is not a quick process and, subject to glitches, can only delay it beyond a seven-day transfer. Now, I wish to cite the documents of Mrs J Street's affidavit of May 1995 and refer to clause 14, which states:

"In the event that any of the Alpaca from the CAM5 shipment were to be sold it would not be practically possible to re-establish Coolaroo's existing breeding herd and I.A.M.'s breeding program would be irreparably damaged.

This statement by Mrs Street was made to the Federal Court while in the full knowledge of their own next import of 300 camelid sitting upon Cocos Island quarantine station. And this imports propriety was the cause of Australia and Chilean government's protocol being withdrawn.

Bearing in mind the aforementioned example, and the willingness of my opponents to not only mislead me, but clearly the Court also, I would respectfully request that the documentation by my opponents in relation to the final payments being credited towards purchase moneys in default, instead of the clearly specified delivery and quarantine expenses, and documents relating to the $210,000 transfer to arrive in Chile be viewed with extreme suspicion, as opposed to the finding at the top of page 207, which speaks of a variation of the purchase agreement, which is justifiably likely to be a fabricated item after the event to suit the cause, bearing in mind the aforementioned example. This affects items 3, 4, 5 and 6 of my opponent's summary of argument.

GAUDRON J: Mr Ensor, can I interrupt you there?

MR ENSOR: Yes, your Honour.

GAUDRON J: What you would do, in essence, is seek to overturn factual findings against you? You would seek this Court to overturn factual findings?

MR ENSOR: I am briefly highlighting just one or two factual findings. Really, the basis of my address to you, your Honour, is upon good faith, and the basis of my appeal is really the fact that the Full Court found on issues of good faith when, in fact, they were not even asked to, I think - or were not applied to.

GAUDRON J: Well, once it was found that there was a contract and that the property passed, questions of good faith and notice inevitably arose, did they not?

MR ENSOR: Yes.

GUMMOW J: In a technical sense.

MR ENSOR: Yes, of course they do. Of course they do, because that is very material to the case.

GUMMOW J: But "good faith" has various meanings to various people. Here it has got a legal context to it.

MR ENSOR: Yes, your Honour. And the basis of my submission to you is on that very issue, and I am about to turn to that.

GAUDRON J: Thank you.

MR ENSOR: I might just comment that it was the lead into my full address, but I was aware that I needed to get point form here to you very quickly, and I was not familiar with format and delivery to you, your Honours, and I apologise, I am doing the best I can.

BRENNAN CJ: You are doing very well, Mr Ensor.

GAUDRON J: Yes, no need to waste your time apologising.

MR ENSOR: No, my 20 minutes are ticking by. May I continue, please?

BRENNAN CJ: Yes.

MR ENSOR: Thank you. I respectfully submit that the appeal court erred in allowing this additional documentation, as supplied by my opponents, for factual purpose and, even if they do allow it, they should authenticate it in light of the aforementioned misleading conduct of my opponents. I now turn to section (e) of my affidavit, and just wish to express my surprise at the lack of weight upon the delivery to Ensor in good faith. I am not going to go further into legal points, I wish now to turn to the issues of good faith.

Firstly, we need to be correct about the facts of the case before we can construct the true situation, and I must commend the Honourable Justice Beazley for a remarkably accurate trial judgment. However, it is with disappointment I move to the issue of inaccuracies within the judgment of the Full Federal Court, and the resulting findings that followed. The inaccurate facts statement within the appeal judgment of the Honourable Justice Davies are upon page 12, or 174 of the application book. First example:

Mr Ensor did not see the agreement until much later.

This clearly infers that I saw this contract, which is not the truth. I only became aware of its very existence after the commencement of the legal proceedings, about six weeks after my reserved contract to purchase. The Honourable Justice Davies then correctly states that Ensor had not agreed to pay any additional price for the additional 45 alpacas. This is page 171 of the application book, midway in the second paragraph. And upon page 17, 179, just about point 20 in the right margin, and upon the combined judgment of Justice Beaumont and Carr at page 21, or page 202 of the application book, they state, "Relevant other portions of the Reserved Contract read as follows" and, for some strange reason, they leave out the specific clause 6 which relates to the additional payment.

At page 229 of the application book, they state there was no consideration for the contract. These payments relate to an excess of $210,000 and are in addition to the trial judge's findings upon the consideration contained within the permit. Returning to the Honourable Justice Davies' finding upon page 179 of the application book, the statement that I acted positively to obstruct IAM's purchase is not at all balanced, as I initially rang Mr Forrest on 20 March 1992 informing him of a vendor unconsented fraudulent contract and, indeed, offered to help him gain proper title to the alpacas and entry upon my permit to Australia.

Further to the first paragraph upon 178 of the application book is a totally unjust and unjustifiable misconception of the facts. The true position is well documented. I told Morales that I would honour my purchase for the 200 alpacas and export these only. I only entered discussion with Morales over the purchase of the remaining 100 alpacas after notification Mr Inglis had terminated his agreement with Mr Forrest upon reasonable grounds, that he was behind in payments, and the correspondence shows this. I did not proceed as deposed, because I thought Mr Forrest did not have an enforceable contract. I did not know he had one at all with the vendor.

Turning to page 174 of your application, second paragraph, this factually incorrect statement, "Mr Ensor did not see this agreement until much later", the truth is, Ensor did not know about the contract or have any idea of its existence until after the commencement of the proceedings, some six weeks after the reserved contracts negotiation. The aforementioned corrections to the crucial facts of this appeal judgment are verifiable within your own preparatory knowledge, and certainly within the application book.

In fact, upon reading the appeal judgment, I was so appalled at the number of incorrect facts and incorrect resulting assertions, I wrote a paragraph by paragraph, page by page list of corrections and comments upon the Full Court judgment. This totalled 12 and two third typed pages. There it is. This is in complete contrast to the trial judge's findings that was an astonishing 143 pages and over twice the size, and yet the minor corrections would not have filled half of a postcard. It was, indeed, a remarkably accurate and true reflection of the situation and circumstances..

The appeal judges, equipped with these clearly incorrect facts and resulting perceptions, proceeded to determine the case upon the issue of good faith, even, although as my solicitor pointed out, the issue was not even raised upon appeal, or did we have the opportunity to respond to it. What is more, these findings upon credit were in complete contrast to the trial judge, who was in an infinitely better position to assess these characters than the appeal judges. The trial judge had witnessed first-hand the character of all the individuals involved, having seen them in cross-examination, and all of the written documents and correspondence questioned by counsel over 18 days, and some contentious issues of credit affecting my opponents withdrawn from the record.

The trial judge made her finding as to credit and detail: "Inglis - ruthless and dishonest"; "Forrest - would conduct his business in a way to achieve his commercial ends, even if this involved threats and falsehoods." The honourable trial judge then quotes the very letter sent to Mr Wren of 28 July that was supposedly notice to Ensor. Upon oath, under cross-examination, Mr Forrest admitted that statements within the letter were not his state of belief and, at the time he wrote the letter, rather, he made these statements for negotiation purposes. Mr Forrest's statement is, indeed, a very polite way of saying these were, in fact, more deliberately misleading deceptive lies.

We turn to the trial judge's comments upon Morales: "Morales presented as an unsatisfactory witness, an opportunist, and would change his evidence within cross-examination." In contrast, the trial judge said her overall impression was that I was an honest witness and I would just err - that if counsel for the other side had not deliberately tried to confuse me with long, twisted questions, they would have received more rapid, straightforward answers, especially as they dragged into six and a half exhaustive days. Mr Harrison - described by the trial judge as, "a most credible witness."

The trial judge concluded with the comment, "Having regard to the findings on credit, with the evidence of Inglis and Morales conflicts, that Harrison and Ensor, I prefer -" I am sorry, I will read that again. The trial judge concluded with the comment, "Having regard to my findings on credit, where the evidence of Inglis and Morales conflicts with the that of Harrison Ensor, I prefer the evidence of the latter."

With this established background of information relating to credit, I wish to move to the judgment of the honourable appeal judges in the Full Court, and I now turn to the specific issues of good faith, as outlined in both judgments, and supposed notice from Inglis' letter direct to me, and Forrest's letter to the other people I viewed, or conversations.

As time precludes from answering each example individually, I can state on oath that in all cases these assertions from Inglis or Forrest were never verified as truth by the true vendor, Mr Morales, who sat down with me in his office and outlined how Mr Inglis had gained a fraudulent and unconsented contract showing his chain to title. Mr Morales then prepared a proper letter addressed to Mr Inglis informing him that he could not access my import permit and had this properly notarised in Chile to make this fully legal and binding. At no time did Mr Morales tell me of any formal or informal agreement with Mr Inglis, Mr Forrest, or was anything even suggestive of this other than, "How was Carlos to cope with Mr Inglis, who had performed a contract with Mr Forrest that he had not consented or agreed to?"

I faced a continual barrage of lies and misleading conduct from Mr Inglis and Forrest and, hence, paid no attention to any assertions they made. Please turn to page 174 of your application book; a comment at approximately 20 in the margin, please. I said that this is not notice either. In fact, it is confirmation to the contrary. It was a letter ascertaining an assertion or postulation to title that he obviously did not have, or he would not have been offering a large sum of money to bribe Mr Morales to legalise his fraudulent chain to title of the alpacas. Consequently, I viewed Mr Forrest's letter of 28 July to Mr Wren as yet another assertion, and to take no conscious knowledge from it.

I honestly did not know there was a link or sale between Mr Morales to Mr Inglis. Please turn to page 177 of your application book. I believe this is crucial to vindicating my situation. Please turn to 15, or 177. At the bottom of the first paragraph states:

Ensor was shocked when he later found out that IAM had had a contract to which ACL was a party.

I believe this true statement of emotion "shocked" as given in cross- examination totally vindicates my testimony of lack of knowledge of prior sale by the vendor. Clearly "shock" is a reaction to a totally unexpected situation, or one that you had not even an inkling of.

I move down to the next statement in the requirement of the reserved contract to be kept secret and state the following reasons: (1) commercial common sense in such a competitive environment; (2) confidentiality agreements are common practice in my business deals; (3) the Honourable Justice Beazley, on page 45 of the application book, Mr Inglis is quoted from correspondence to Mr Forrest:

"Forget the threats, Andrew, nothing & nobody frightens me least of all you."

BRENNAN CJ: I should point out, Mr Ensor, that the yellow light has gone on, which means you have another three minutes.

MR ENSOR: Three minutes, thank you. Mr Inglis has sought to purchase - I just comment there: and further, just prior to the export, Mr Inglis had sought to purchase a revolver in Chile in August `92, as he put it to Mr Harrison, "to finish the matter off with Ensor." I totally reject the comments that - upon 239 of the application book - something had gone seriously wrong and the vendor was attempting to sell the alpacas twice. Morales, the vendor, had been on notice for some six months that I, as a permit holder, would not sanction Inglis' use of my permit, and this notice was accepted by Morales prior to the bribe letter from Mr Forrest that I had seen.

It was perfectly reasonable for me to assume that Mr Morales, in the situation, would put off making a decision as to whom to sell - to sell until the end, or closer to the export time, and that his position was one of sitting on the fence without commitment either way. There is no doctrine of constructive notice. It is well documented that both Mr Inglis and Mr Forrest had continually misled me and lied to me, in written and oral form, and Mr Forrest's last comments to me was, "My position is none of your business." Given the circumstances, it is not reasonable to have expected me to have made inquiry of Mr Inglis or Mr Forrest to determine the true position.

The true position: how could I possibly determine this from these individuals? Mr Inglis had lied and misled to me from the start and, for two years, had a track record of doing so. Mr Forrest had done the same, and even betrayed me. And, when I genuinely tried to assist him and his company some six months earlier, he entered into a deceptive and corrupt conduct. I was provided the information of termination by Harrison prior to entering the purchase discussions that resulted and the reserve contract. Mr Harrison was regarded by the trial judge as impartial and, in the presence of Mr Inglis and Mr Morales and, what is more, Mr Inglis left Chile at the point which was consistent with the termination.

I clearly verified this the best I could with Mr Harrison as impartial, and the vendor and the solicitors. With the aforementioned knowledge of events, I ask you to combine this with the trial judge's findings of credit of my opponents, and consider cases as outlined by the London Joint Stock Bank - I am sorry you got a great wad of those papers, but there is a case by the London - - -

BRENNAN CJ: I am afraid your time has expired, Mr Ensor.

MR ENSOR: Sorry, your Honour.

BRENNAN CJ: So, that, I think, extinguishes the entitlement that you have to submit that there should be a grant of special leave.

MR ENSOR: There is no possibility of just summing up, your Honour?

BRENNAN CJ: How long would you take?

MR ENSOR: One paragraph.

BRENNAN CJ: Yes, certainly.

MR ENSOR: Thank you. I respectfully request that the leave be granted for this case to enter the High Court as it is imperative in the national interest of Australians that special leave to the High Court be granted to this case because if the current findings in the Full Federal Court are allowed to remain, set such a dreadful precedent and example to society in future generations of Australians. If allowed to remain, it condones my opponents' total non-use of lawyers to prepare, or indeed verify, the dates of documentation prepared, especially in light of their blatant and misleading conduct and lies in oral and written form.

Further, it condones bribery or financial inducement to perform fraudulent contract of supply and threatening behaviour and in contrast to myself, who had consulted consistently with my lawyers for advice on all legal documentation. And, indeed, I always did my best, in often very difficult circumstances, to effect this import and maintain my faith in the legal system.

BRENNAN CJ: Yes, thank you, Mr Ensor.

MR ENSOR: I thank you for the opportunity, your Honour, to be able to appear.

BRENNAN CJ: Thank you, Mr Ensor. We need not trouble you, Mr Webeck.

This case turns on the findings made by the Full Court of the Federal Court and their Honours' appreciation of the contractual terms relevant to Mr Ensor's claim. Despite the detailed and careful submissions by Mr Ensor, the case raises only criticisms of findings of fact. This Court does not grant special leave merely to canvass again the findings of fact made in the Court appealed from. For that reason, the application for special leave must be refused. Special leave is accordingly refused.

MR WEBECK: Application for costs by the respondent.

BRENNAN CJ: Do you have anything to say about that, Mr Ensor? It automatically follows unless there is some special reason that costs must be granted to the successful party.

MR ENSOR: I am being asked to respond to the reason as to costs?

BRENNAN CJ: Yes.

MR ENSOR: I did outline one. As it would be unjust as I contacted Mr Forrest on 20 March 1992 immediately upon advice that he had paid money on the basis of a fraudulent and unconsidered contract. I tried to enter a trustworthy communication and conduct with Mr Forrest which would have avoided the whole situation and he chose the path of deceptive and devious and corrupt conduct which has resulted in this current situation. I thank you for the opportunity of being able to appear.

BRENNAN CJ: Thank you, Mr Ensor. I am afraid the ordinary rule has to be applied, Mr Ensor. Special leave will be refused with costs.

AT 1.17 PM THE MATTER WAS CONCLUDED