Pollak v National Australia Bank S87/2000 [2000] HCATrans 715 (24 November 2000)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S87 of 2000

B e t w e e n -

JOSEPH POLLAK

Applicant

and

NATIONAL AUSTRALIA BANK LIMITED

Respondent

Application for special leave to appeal

McHUGH J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 24 NOVEMBER 2000, AT 11.59 AM

Copyright in the High Court of Australia

MR. R.B.S. MACFARLAN, QC: If the Court pleases, I appear with my learned friend, MR J.W.J. STEVENSON, for the applicant. (instructed by Baron & Associates)

MR S.M.P. REEVES: If the Court pleases, I appear for the respondent. (instructed by Mallesons Stephen Jacques)

McHUGH J: The Registrar has informed me that although Mrs Stern was a party to the proceedings in the Federal Court is not a party to the special leave applications. She has advised that she does not intend to take part in the application. Before you commence, Mr Macfarlan, I have informed the legal representatives for the applicant and the respondent in this matter that I have a shareholding in the National Australia Bank. I understand there is no objection to me sitting in this application, is that so?

MR MACFARLAN: That is so, your Honour.

CALLINAN J: I have also informed the Registrar, I think, the same position applies.

MR MACFARLAN: There is no objection on our part, your Honour.

MR REEVES: Nor ours, your Honour.

McHUGH J: Yes. Yes, Mr Macfarlan.

MR MACFARLAN: Your Honours, there are two points that are raised. The first is the Browne v Dunn point and it is to that which I will go first. That is this, that it is asserted that there was no challenge made to the evidence given by the applicant of an oral representation which was crucial to his case. Could I deal with our argument by taking your Honours first to page 69 of the application book where, at line 27, your Honour will a quotation of the relevant part of the statement of claim, the allegation at line 28 that:

the Bank had represented to Dr Pollak and Mrs Stern:

"(a) That the Bank was entitled to enforce the due on sale provision of the Mortgage.

And (b) is a consequential provision to the effect "That the Bank would not enforce" that provision if Dr Pollak and Mrs Stern signed "an assumption agreement", and so forth. The particulars at the foot of the page rely on two matters, a "conversation" and a "letter agreement" and it is the conversation which is of particular relevance on this application.

McHUGH J: Yes.

MR MACFARLAN: The defence, your Honours, is quote at 71 of the application book, or described at that point and it is said by the amended defence relating to the representation said to have been made in the conversation:

the Bank said that it was entitled to demand immediate repayment of the Van Nuys loan as a consequence of the death of Mrs Pollak -

That is, its position is consistent.

McHUGH J: This is the Kirschbaum conversation, is it?

MR MACFARLAN: Yes, your Honour.

McHUGH J: Yes. Well, there are three aspects of it. You argue that clause 2.26 empowered the Bank to require repayment of the loan and the Bank had decided not to call on the loan so long as the applicant, Mrs Stern, signed personal guarantees, and you also had a third claim in respect of that conversation, did you not, that when the assumptions agreements were signed that they would extinguish any personal liability of the applicants to the Bank. Now, do you press that last - - -?

MR MACFARLAN: The last one was not put, your Honour. The last matter had some similarity to an argument that was put relating to quite separate representations in 1992. We lost on that and that is not pursued.

McHUGH J: No.

MR MACFARLAN: As to the first two, your Honour, I think the matter is really put the other way around, namely, we say there was no power to call up the loan.

McHUGH J: But that is your second argument, is it not?

MR MACFARLAN: No, your Honour, we say - - -

McHUGH J: But that turns on the construction of clause 2.26 which is an issue to be decided according to the Californian law.

MR MACFARLAN: Yes.

McHUGH J: But unless you win on your first point that second point does not arise, does it?

MR MACFARLAN: Your Honour, we need to win on both those points, yes.

McHUGH J: I know, you have got to win on both.

MR MACFARLAN: What we say is that there was no acceleration but the Bank represented that there was.

McHUGH J: Yes, I understand that. Now, can I put to you what my difficulty at the moment is, that there is nothing special about the case because it is a well-settled principle that the Browne v Dunn point can be taken not merely by putting questions in cross-examination but by the pleadings. Now, that being so, does this case involve any more, at best, from your point of view, of a wrongful application of a principle?

MR MACFARLAN: Your Honour, our answer to that is that there is more to the Browne v Dunn principle than we would submit, with respect, than your Honour just mentioned. One aspect of it is that a party should know that a matter is in issue and the courts below said that by the defence that was sufficiently done, but another important feature of it is that if evidence is to be challenged, then the means by which, and in particular the other evidence to be relied upon to effect the challenge, should be put to the witness to enable the witness to respond.

That is expressly dealt with by his Honour Justice Hunt in Allied Pastoral, but it was an aspect of the principle that was ignored by the Full Court here and the learned trial judge.

McHUGH J: Well, I understand that is the way you put it but does it not come down to this, that you are claiming that there was a wrong application of principle? I know there is a lot of money involved and I can understand your client's dismay at not being accepted on this but, fortunately, he was not disbelieved in terms, was he, it was just that - - -

MR MACFARLAN: He was disbelieved on other parts of the claim but credit was not expressly stated as a factor in relation to this matter.

McHUGH J: Yes.

MR MACFARLAN: Your Honour, there are two answers to that. One is that what occurred amounted to a serious injustice to the applicant because matters were relied upon by the Bank in address that had not been put to Dr Pollak in cross-examination. They were matters about which some explanation could have been given and those matters - - -

McHUGH J: But supposing counsel had just simply said, "Well, our case is we do not believe you, or question you, or" as you often hear, "I put it to you it is false, that what you have said is false". Now, what is the witness going to say? He would just reassert what he said, would he not?

MR MACFARLAN: Yes. That would not be enough, though, your Honour. I would need to illustrate it, if your Honours would just bear with me while I do that.

McHUGH J: Yes.

MR MACFARLAN: Your Honours probably have noticed the conversation at page 71 of the application book. It is set out there.

McHUGH J: Yes.

MR MACFARLAN: The cross-examination can be found at 119, line 20. What was said there was that:

Didn't you say in your affidavit that Mr Kirschbaum spoke to you -

I will not read it all but it - - -

McHUGH J: Yes, I have read it, but having appeared in one or two trials myself, you do not necessarily get the right flavour just reading the words on the transcript. The questions may have been asked with an air of sarcasm in them, indicating that the cross-examiner was challenging the whole view. Is there any finding by the - did the learned judge at first instance make a finding that the conversation was never challenged, as such?

MR MACFARLAN: Well, what he said, your Honour, was that it was sufficient that it was put in issue by the defence. Before coming to that, could I take your Honours, by way of example, to the proposition I want to make. If your Honours have the supplemental material from the applicant, the black volume, at tab 2 your Honours will see an extract from the written submissions of the Bank where the quotation appears of the conversation and then on the next page at 11.2:

The Bank submits that Pollak's evidence in this regard should not be accepted for the following reasons -

Now, there is a whole variety of circumstances relied upon by the Bank to support the submission that the evidence should not be accepted which were not put to Dr Pollak. May I give an example, your Honours? Number (vi) at the foot of the page:

Stern/Pollak did not sign the guarantees in December 1988 as a consequence of any threat on the part of Bank to call up the Van Nuys loan, but because they wished to refinance the Burbank loan and to document the Bank's consent to both parties being distributed to them out of the estate -

Your Honours, if those matters had been put to Dr Pollak he could have given an explanation. We do not know precisely what he would have said because he has not been asked but it should have been said to him in cross-examination, "Well, you signed these documents because you wanted a loan relating to a different property, namely the Burbank property, did you not, and that was the reason you signed the documents" and he could have explained, your Honour, what the position was.

McHUGH J: Yes, I appreciate the force of this - - -

MR MACFARLAN: Now, that is one example.

McHUGH J: Yes.

MR MACFARLAN: If I go, your Honours, to the trial judge's finding at 72 of the application book, the trial judge gives a number of reasons for his conclusion that the conversation should be rejected and I will insert notional numbers, if I could, and just run through at least some of them. First, that Dr Pollak does not give any evidence as to any part of the conversation other than is pleaded as misrepresentation. Now, what he had said, as your Honours would see from the previous page at line 27, is that he did:

not recall the exact words spoken during the remainder of the conversation -

Now, if the cross-examiner wanted to allege or assert that there was some significance on his failure to recall the balance of the conversation, it needed to be taken up with the witness, your Honours. Obviously, the trial judge thought there was some significance in an inability to recall the balance of the conversation.

CALLINAN J: Well, the answer is, nobody asked him what else was said.

MR MACFARLAN: That is so.

CALLINAN J: On either side, because nobody thought it was relevant.

MR MACFARLAN: Well, the trial judge did.

CALLINAN J: I mean, neither of the parties did.

MR MACFARLAN: That is, I think, one matter that is not in the Bank's list of circumstances relied upon in its defence, but there were a number of matters which the Bank put in address which were picked up by the trial judge, and - - -

CALLINAN J: I mean at the time when the case was actually being conducted before the addresses did nobody ask Dr Pollak about the balance of any conversation.

MR MACFARLAN: No. Well, there was no - - -

CALLINAN J: There was no challenge on the basis, "Well, tell us what else was said if you allege that that was said" or anything like that.

MR MACFARLAN: No, it was not, your Honour. We had led the evidence that he could not recall the balance of the conversation and we are entitled to think there was not any particular significance in his inability to recall unless someone suggested otherwise. Your Honours, the second matter on page 72, line 29, his Honour said:

There are no notes of it by either party and no other records or correspondence were produced in evidence that any such conversation occurred.

Now, the cross-examiner should have put to Dr Pollak that if he had had the conversation he would have made a note and Dr Pollak could have given an explanation. It may have been that it was not his practice to make notes, it may have been that he did not see any particular significance in the conversation at the time. If I just explain that for a moment. There was no evidence that Dr Pollak became aware of the alleged falsity of the representation until about the time of the commencement of the present proceedings.

So, he was told, on his case back in 1993, that the Bank had a right to accelerate but he had no reason to doubt or disbelieve it and that would have been a proper answer to be given in response to a question from the cross-examiner to that effect.

McHUGH J: Mr Macfarlan, when you look at the reasons the judge gave they do not reflect the arguments that were put by the Bank, do they?

MR MACFARLAN: There is an overlap, your Honour.

McHUGH J: But the most important one, number 6 in those submissions, was not one of the reasons why the judge - - -

MR MACFARLAN: Yes, it was elsewhere, your Honour. At 73, line 25 - I will just need to find that reference, your Honour. If your Honours look at 79, line 15, the Full Court there says:

Senior counsel for the appellants placed a considerable weight upon the rhetorical question of why the appellants would have executed the documents.....It will be recalled that his Honour -

the trial judge, found that.

McHUGH J: Yes.

MR MACFARLAN: Then, the Full Court, towards the foot of the page, says at about line 37, there was not any hurry to distribute:

In this sense it is no doubt correct, as the primary judge found, that Dr Pollak and Mrs Stern would need and therefore would desire to have the property ultimately transferred to their names. However, it is doubtful that this was the sole reason. What is important is that the circumstances of the Burbank transaction provide an explanation for the need of both Dr Pollak and Mrs Stern to assume liability - - -

Now, that is the very matter not put.

McHUGH J: Yes, I understand. Well, now, what about the second aspect? What is the special leave point? Assuming that you were successful on that and that this - the judge should not have rejected the conversation. The falsity of the statement depends upon the construction of the agreement which has to be construed according to Californian law. Why should we grant special leave in respect of an issue concerning a document that has to be construed according to Californian law? What is special about that?

MR MACFARLAN: Yes. Well, if there is a special leave point in our first point, we do not have to find one in the second. With respect, we would argue that on the appeal, without needing to show that that has any particular importance to it. And, your Honours, the presumption needs to be made, in the absence of evidence to the contrary, that Californian law is in this respect the same as Australian law.

McHUGH J: Yes.

MR MACFARLAN: The Full Court referred to an Alabama decision which was not in evidence. It was not referred to before them or before the trial judge and impermissibly did so, in our submission, and, it was for the Full Court, in our submission, to presume that Californian law was the same as Australian law and it should have come to the conclusion that there was no exception to the contra proferentem rule of the nature there defined. The negotiations that occurred between the parties about this document did not touch on this clause 2.26 and, therefore, we say that the contra proferentem rule could still, and did still, operate because the only relevant fact that one is left which is that the clause emanated from the Bank and it was for the benefit of the Bank.

Your Honours, we say that the contra proferentem rule is an important one and the ambit of it and whether there is an exception to it of the character described by the Full Court is a very important question of contract law and the Full Court decision, we submit, should not be allowed to stand and provide authority for the proposition that there is such an exception. Those are the submissions we make, your Honours.

McHUGH J: Yes, thank you. Yes, Mr Reeves.

MR REEVES: May it please your Honour. Your Honours, my learned friend, Mr Macfarlan, made a number of statements which are quite incorrect. Firstly, in relation to the issue of credit, he said that that was not determined by the trial judge. Your Honours, it was determined and most adversely to the applicant. If your Honours go to page 74 of the application book at the top of the page, line 10, his Honour said:

I do not accept either of the applicant's evidence in relation to any matter of significance which is not supported by objective facts -

So, his Honour found, and the Full Court confirmed, that this applicant had no credit and he would not be accepted. That, in itself, is sufficient to ensure that he cannot succeed on this appeal, because even if he were to succeed on the issue of procedural fairness he could not persuade this Court that he should be believed, (a), that the representation was made, and, (b) that he relied upon it. Now, if your Honours then go - - -

McHUGH J: Well, to what extent, though, may that finding not be influenced by the matters referred to at 79 that Mr Macfarlan referred to, and which, to some extent, is based on that sub-proposition (vi) in 11.2 of the Bank's submissions? I mean, did the judge make any statement about demeanour?

MR REEVES: Well, perhaps if I can take your Honours to page 73, at line - just after 25 where the Full Court records the trial judge's judgment:

The applicants submit that the Kirschbaum conversation should be accepted insofar as it alleges that he claimed that the Bank was empowered to sell on the basis that the contrary was not expressly put in cross-examination. However, the whole conversation was put in issue in the pleadings and it was apparent that both the occurrence and context of that conversation were in issue.

CALLINAN J: But what more could Dr Pollak have done? He had sworn an affidavit. Not even a forensic point seems to have been sought to have been made by the Bank in cross-examination. What more could he have done? Even the language in which he swore his affidavit and gave his evidence apparently was not challenged.

MR REEVES: Well, with respect, your Honour, it was challenged and perhaps if I can take you to commence with - perhaps if I take your Honours to page 77 of the application book. Now, there were two aspects to the conversation, but, essentially, it is to be treated as one, and the cross-examiner challenged the conversation by - as the Full Court said:

pouring scorn upon a particular element of it -

and, he did it by pointing out that what Dr Pollak was putting was this, that he said that Mr Kirschbaum said to him, "The Bank will call the loan due unless you, the applicants, assume the loan and when you assume it you will not be liable". So, the threat to Dr Pollak, according to his evidence, was that if he did not assume the loan without any liability the Bank would call that due and the cross-examiner spent time pointing out how absurd that proposition was and the proposition commenced with the evidence of Mr Kirschbaum, who was dead at the time and could not be called, that the Bank has the right to call up the loan, and it then followed that the Bank would call up the loan unless the loan was assumed without any liability.

Now, when you look at that conversation as a whole, it is quite clear that the cross-examiner was pointing out the total absurdity of it and that is what is being recorded by the Full Court. Now, even if your Honours then look at the reply of Dr Pollak at page 119 of the application book where the transcript is set out, the cross-examiner refers to the conversation and he says:

don't you say, is it not your position -

And asserts it. And, then, if you look at the whole tone of this cross-examination it is quite apparent that the cross-examiner is not accepting it and is challenging it and in fact is almost ridiculing it, your Honours, when he says:

Well, did that assertion drive you back to the documents to look for yourself?---No.

You didn't?---No.

Did it prompt a question of any kind when you went to the solicitors, to the attorneys?---No.

It didn't?---No.

Right. In any event you say you simply accepted -

et cetera. So, it is quite apparent, in my respectful submission, that the cross-examiner is challenging him on that conversation and indicating his complete disbelief in it. Now, in addition, your Honour - and this is something that I apologise I did not put in our materials - in my submission, it is apparent that Dr Pollak was well aware of the challenge which was going to be made to this conversation. And, if I may have your Honour's leave to hand up his second affidavit which he filed in the proceedings, I might take you to a portion of it.

McHUGH J: But, be that as it may, what about the proposition in sub-paragraph (vi) at 11.2? That was never put to him, was it?

MR REEVES: I am sorry, your Honour, perhaps if I could just find that.

McHUGH J: The argument that they did not do so as the consequence of any threat but because they wanted to refinance the Burbank loan.

MR REEVES: Your Honour, the linkage between the Burbank loan and the Van Nuys loan was in fact the subject of cross-examination and Dr Pollak said in his evidence that the link between the two did not occur to him until he saw the Bank's defence in the proceedings. So it is quite clear that he was aware that there was asserted by the Bank a linkage between those two loans, your Honours.

McHUGH J: Well, now, where is the passage in the affidavit that you say indicated that Dr Pollak knew that his version was under challenge?

CALLINAN J: Paragraph 41?

MR REEVES: At 40 and 41, your Honours, where he seeks in advance to explain why it was that he did not mention this matter to his attorneys. At 41 he said he did not mention it to them because he believed Mr Kirschbaum. So, he is aware that this is going to be an issue and anticipates it. At 43, your Honour, he says that he has:

inspected the documents produced by the Bank in the course of the Bank giving discovery -

So, he is very involved in the proceedings and he is well aware of the documents in discovery, and then, at paragraph 53, he says:

I did not tell Mr Ivie of my conversation with Mr Kirschbaum in 1988 because Gibson Dunn & Crutcher in acting for my sister as executrix since 1988 never informed me that the Bank could not call the loan due and I believed what Mr Kirschbaum had told me was therefore was true.

So, here he is in anticipation explaining why it was that he did not do what one would expect someone to do if it had been put to him that the conversation did not occur. So, the cross-examiner, in the passage which I have referred to at page 119, elicits information, firstly, that Dr Pollak did not go back to the documents to look at them when the matter was put to him, that it did not prompt any question when he went to the solicitors, both facts which you would expect to be done if suddenly you were faced with such a threat.

So, here is evidence being elicited which you would expect would have - I withdraw that. Here is evidence of Dr Pollak not doing those things which you would expect if this conversation had occurred. Your Honour, this is a matter where both the trial judge considered the matter carefully, as did the Full Federal Court, and both the trial judge and the Full Federal Court found that there had been no denial of procedural justice. This Court, with respect, is not as well placed as the trial judge to understand the way in which the case proceeded and the way in which the evidence unfolded, and I have already referred your Honours to the passage which indicated that there was no doubt, at least in the judge's mind, that the matter of the conversation was at issue, and this example of the affidavit indicates that Dr Pollak was well aware of it.

So, there was a challenge to the conversation as to the representation in that indirect method which appears in the passage which appears in Dr Pollak's reply, then there was substantial cross-examination to demonstrate how absurd the whole proposition was, and that is noted by the Full Federal Court, and also a number of matters were put to him which demonstrated that he did not do those things which would have been expected, ie, he did not tell his solicitors, two, he did not make a record. Our learned friend said that there was no cross-examination about whether he made a record of it. That is totally incorrect, with respect, your Honours. There was cross-examination about it and it is recorded by the Full Federal Court who refer to it at page 78 at the top of the page.

Counsel for the Bank did raise with Dr Pollak whether he took a note of the conversation and did so immediately after suggesting Dr Pollak's account of the conversation involved a "bizarre proposition".

That makes it more than evident that this conversation was being challenged. It was described as being "bizarre", the idea that a banker would threaten to call up a loan unless you assume liability, but without liability.

CALLINAN J: Were those words actually put to Dr Pollak, "bizarre proposition"?

MR REEVES: Yes, with respect, and that is how it is recorded by the Full Federal Court. So that, in my respectful submission, there was no doubt at all that the matter was in issue, both from the pleadings, from the fact that Dr Pollak in his affidavit sought in advance to explain it and that the cross-examiner did go into that conversation in a number of ways. The problem which he had was he was handicapped by the fact that Mr Kirschbaum was dead and could not give evidence, your Honours, so he could not put it in a positive way.

But the Full Court who examined this in detail and looked at the evidence in detail, they concluded that the finding of the trial judge must stand. So that it is quite incorrect, in my respectful submission, to submit that there was no challenge to that conversation. He was also cross-examined about the Bank's requirements as to the financial position of himself and his sister, and that sort of cross-examination would be inconsistent with the Bank being the moving party in requiring the assumptions alone. He was cross-examined about instructions to his US attorneys in defending the US proceedings because at no time, your Honours, did he say a word about this conversation until these proceedings in the Federal Court.

In other words, he never mentioned what had occurred, he said, in 1988 to the Bank when it required him to assume the loan. He did not bring this up with his attorneys in California when the Bank sued him. He consented to judgment in California and it was only after judgment was entered against him that he brought it up in this court. And, he was cross-examined about whether he made a note, and I have referred to that. He was cross-examined whether he referred to his solicitors. These are all clearly matters of challenge, and as I indicated, in respect of the documents.

So, they are the matters to which I would take your Honours in relation to the aspect of procedural fairness, but I point out that a Full Federal Court examined this in detail. These very submissions were made, with respect, and having considered the evidence, they concluded that the finding of the trial judge must stand. Now, do your Honours wish me to go to the other aspects?

McHUGH J: We might hear Mr Macfarlan in reply on this - - -

MR REEVES: May it please your Honours.

McHUGH J: Well, Mr Macfarlan, you have the - - -

MR MACFARLAN: The job is ahead of me, your Honours.

McHUGH J: You were well ahead - - -

CALLINAN J: You had me, too, Mr Macfarlan.

MR MACFARLAN: Well, your Honours, I will need a moment to explain the problem, then. Your Honours, what was challenged was the last sentence of that conversation of which Dr Pollak gave evidence, not the part that gave rise to the representation upon which we rely. At page 71 of the application book, line 26:

When you sign the assumption agreements that will extinguish your liabilities.

Now, Dr Pollak interpreted that as meaning that you will not have any liability. Now, the view was obviously taken by those appearing for him that that did not have much support in the words that were actually used because they are quite capable of a sensible reading as simply a reference to the assumption agreement superseding the guarantee, and that was never part of our claim that those words have that consequence. The critical part of the conversation was the earlier part; and the fact that there was cross-examination about that other part and not about the critical part under the exclusio unius - - -

McHUGH J: Yes, I know, but that is put in issue and if that is not - I mean, the argument, if you do not believe the applicant or do not accept the applicant on that aspect then why accept him on the rest, and Mr Reeves points out a cross-examination does indicate a high degree of sarcasm, and then you have the finding at 74 about credit. Although, I must say I find some aspects of the matter troubling, the difficulty I have at the moment, Mr Macfarlan, is whether this appeal has sufficient prospects of success, when you look at the whole, particularly having regard to the Full Court's examination of the matter.

MR MACFARLAN: Yes, well, your Honour, there were extrinsic circumstances which really made it highly likely that the representation was made, not least of them the fact that it accorded with the Bank's view. We have in the defence the assertion that the Bank was entitled to accelerate the loan. The proposition that it communicated that view to Dr Pollak is not a very surprising one and the idea that he assumed a personal liability that he did not hitherto have for the purpose of obtaining distribution was contradicted by the - - -

McHUGH J: Yes, I know, but the point is there is no special leave point in the case unless one was convinced there was a real chance, that there was a miscarriage of justice.

MR MACFARLAN: Yes.

McHUGH J: That is a very large burden to - I mean, we are not here to interfere with findings of facts simply because we think they are wrong, we would never grant special leave, but if we thought there was a likely miscarriage of justice, yes, but - - -

MR MACFARLAN: The credit findings have no present significance, your Honour, because Dr Pollak was not given the opportunity to deal with these circumstances said to support the view that the conversation did not occur. In terms of the question of principle, if your Honours would look at application book 76, line 40, which is the end of the quotation from Allied Pastoral, the third aspect to what his Honour said about the Browne v Dunn principle was that there was a need to give an opportunity to - and I am reading the second-last line:

explain or to qualify the other evidence upon which the challenge is to be based.

Now, both the trial judge and the Full Court applied a different principle. They said it is enough that the matter is in issue.

McHUGH J: But, is that not supported by Seymour, a case I was in in your position. I argued the appeal in Seymour and the points were never put to Seymour, really, and yet it was held that it was - - -

MR MACFARLAN: Yes. Well, it is to some extent supported by Seymour and that is an approach which we say is in error. If a witness' evidence is to be challenged by the assertion that there is other evidence in the case which is inconsistent with it, basic fairness demands that the witness be asked about that other evidence and how he or she explains it. That is reflected in the provisions of the Evidence Act concerning prior inconsistent statements. I do not suggest they apply literally here but the rationale is the same. It is a matter of both justice to the individual and also the proper administration of justice, your Honours, that - - -

CALLINAN J: It can to be a problem. Judges go away and they think of other reasons to reach a conclusion and those other reasons sometimes appear in the reasons for judgment and it is not unknown for neither party to have dealt with them or raised them. It is unfortunate if it happens.

MR MACFARLAN: Well, there can be injustice there, because obviously one has to look at it in a broad, robust sense, but the substance of the case needs to be put and if there are critical considerations arising out of the evidence, in our submission, fairness demands that they be put to the witness and this was a case where the Bank relied on a number of matters which were picked up by the court which were not put to the witness. If the Court pleases.

McHUGH J: The principal point in this appeal is whether by reason of the failure to challenge the applicant's evidence of a conversation a miscarriage of justice occurred when the trial judge rejected his evidence concerning that conversation. Although the application has some troubling aspects, we think that by reason of various findings by the trial judge that any appeal would have insufficient prospects of success to warrant the grant of an appeal. In those circumstances, the application for special leave to appeal is refused. It must be refused with costs, Mr Macfarlan.

MR MACFARLAN I cannot say anything, your Honour.

McHUGH J: The application is dismissed with costs.

The Court will now adjourn to reconstitute.

AT 12.42 PM THE MATTER WAS CONCLUDED