Bride & Anor v Anglo Australian Foods Pty Ltd & Ors P50/2000 [2001] HCATrans 554 (25 October 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P50 of 2000

B e t w e e n -

EDWARD JAMES BRIDE

WENDY MARGARET BRIDE AS TRUSTEES OF THE PINWERNYING FAMILY TRUST

First Applicants

EDWARD JAMES BRIDE

Second Applicant

and

ANGLO AUSTRALIAN FOODS PTY LTD

First Respondent

FREEHILL HOLLINGDALE PAGE (A FIRM) MUIRWIL NOMINESS PTY LTD

Second Respondent

ELDERS PASTORAL LTD

Third Respondent

ALAN PORTER

LINDA BRIDGET PHILOMENA PORTER

Fourth Respondents

GEORGE ARTHUR FULFORD

PATRICIA FULFORD

Fifth Respondents

Application for special leave to appeal

GLEESON CJ

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON THURSDAY, 25 OCTOBER 2001, AT 9.29 AM

Copyright in the High Court of Australia

____________

MR E.J. BRIDE appeared in person.

MS C.H. THOMPSON: I appear for the first respondent. (instructed by Freehills)

MR. P.P. McCANN: I appear for the second respondent. (instructed by Phillips Fox)

MR S. ADAMS: May it please the Court, I appear for the third respondent. (instructed by Corrs Chambers Westgarth)

GLEESON CJ: There is a certificate from the Deputy Registrar to the effect that she has been informed by Williams Ellison, the solicitors for the fourth and fifth respondents, that the fourth and fifth respondents do not wish to be represented at the hearing of this application and will submit to the order of the Court, save as to costs. Yes, Mr Bride.

MR BRIDE: Your Honours, in all ways this matter would be res judicata and an abuse of the process of the Court if it was not for the discovery of fresh evidence. The

matters of this particular action, when it was basically the same defendants save for Freehill Hollingdale & Page, Muir Williams Nicholson and the first respondent, which was Anglo Australian Foods was it had all been through the process. Could I take you to the book? The new evidence I talk to is in the book of authorities and specifically to page 174, please.

GLEESON CJ: Page 174?

MR BRIDE: Yes. Now, it is the spreadsheet of the Raveh Group structure in 1991. It shows at the top the firm of "Freehill, Hollingdale and Page". It goes across to the left to "Muirwil Nominees". It goes further over to the left which is "G.S. Laitt", which is a partner of Freehills. It then goes down to the "Anglo Australian Rural" group of companies. It goes across and down the bottom. Under the Anglo Foods in the centre of the page there is a company called "Milne Feeds", which is the company which is a subsidiary of this group and which currently is in possession of one of our properties.

If you can bear with me for a moment. If you go to page 118 please. On 20 October 1994, some 10 years and a couple of months after the receivership took place, I did an inspection of the receiver managers and the mortgagees' records getting ready for trial and in the course of that I came across the evidence which is at a/, which was the:

Notice of appointment of Receiver Managers dated the 9th August 1984, handed to my self on the 10th August 1994, with a hand written notation -

b/ was the same "Notice of Appointment" with a notation on it "Not yet Appointed" and in the trial of that matter when that matter came to Court to trial on the 30 day trial in November 1999, the handwriting was identified as being John Anderson, one of the receivers. It then goes on at d/:

Deed of Appointment of Receiver Managers, dated the 22nd August 1984. pursuant to Mortgage -

and it has the identification, the discovery identification, and also at e/ is the same document. On the following page, your Honours, if you could go to the last paragraph of that and if you see this was sent to the associates of Justice Kennedy on 24 October in a matter which was pending, a Full Court matter which was pending, which was 4145 of 1993. On the last page I put in my letter to his Honour. I think I should read, perhaps, the full page:

I would ask that you hand the letter and the attachments thereto to The Honourable Mr Justice Kennedy and copies to Justices Owen and Anderson -

who were the other judges on the quorum.

I believe I am within the Rules of The Court in forwarding this evidence to you and my request that copies thereof be handed to the Honourable Judges.

Should this not be the case please advise me and I will then Move The Court to accept the New Evidence.

That matter is in a judgment which precedes - at page 111, your Honours, at the bottom of page 111. I have marked it out in pencil:

The appellant, after judgment had been reserved in this matter, forwarded to the Court a number of documents relating to the appointment of Messrs J D Anderson and D J Young of Peat Marwick Mitchell & Co as receivers and managers under various securities. As was the case with many of the documents exhibited to the appellant's affidavits, their significance in the context of this appeal is not self-evident and the appellant has not sought to, or not been able to, explain how they support his claim.

Well, your Honours, I put that as being a mistake by the court because they could obviously have not read the second page of my letter where I said that I would come to the court and move that the documents be accepted.

GLEESON CJ: Mr Bride, you are not seeking leave to appeal against this decision of Justice Kennedy. You are seeking leave to appeal against a decision of Justices Pidgeon, Parker and McKechnie that was given on 10 May 2000.

MR BRIDE: That is correct, your Honour.

GLEESON CJ: And the leading judgment was written by Justice McKechnie.

MR BRIDE: That is correct, your Honour.

GLEESON CJ: Where, in the reasons for judgment of Justice McKechnie do we find the error upon which you rely?

MR BRIDE: I believe it is at page 75 of the application books, your Honours.

GLEESON CJ: Thank you.

MR BRIDE: And that is at paragraph 1, 2, 3:

In this regard I would respectfully note it is the plaintiff's case relying on the "fresh" evidence, that the receivers and managers were not validly appointed pursuant to the mortgages over the lands in question on 9 August 1984 because their appointments were not effected until 22 August 1984. But no event relevant to title to the land occurred between 9 and 22 August 1984. The sales relied on were in 1985. As the receivers and managers were appointed on 22 August 1984 it is not shown how any failure to appoint on 9 August 1984 can avail the plaintiffs in these proceedings.

Now, that is the crux of what it is. I tried to lead you to the evidence, the fresh evidence which we were talking about when that evidence was obtained and how this set of circumstances arose, which is, without that fresh evidence, an abuse of the process of the court. Your Honours, if I can take you to a judgment - - -

GLEESON CJ: Where is the error in that passage?

MR BRIDE: The error is, your Honour, that because the appointments were not effected until 22 August 1984. Now, our argument is, on the authorities, that for there to be a valid appointment of receivers and managers, bearing in mind that it has been accepted that the appointment was not effective, or the first appointment was incorrect and that has been accepted by all parties, that for there to be a valid appointment of receivers and managers, regardless of whether they were entitled to or not, there had to be a process of law go through and that process of law is highlighted in the judgment of Justice Parker in another matter which came before this Court, which was Velcrete v Melsom, Robson.

In that particular matter the part that was given special leave to appeal was whether or not the receiver/managers had been validly appointed pursuant to the clause of singular or plural and it was lost, but the judgment of Justice Parker clearly identifies the authority by which, and the process by which, a receiver/manager, if they have been invalidly or incorrectly appointed, must go through.

This judgment of Justices McKechnie and Parker in this instance clearly overrides the authorities which are before the court and clearly sets out a dangerous precedent for the future consequences with relation to these findings and these are the findings of Justice McKechnie and Justice Parker. He said, "All authorities on the appointment of receivers/managers being invalidly appointed are rewritten". The authorities, if I can take you to them, and specifically to page 203 of the authorities, which is the start of the judgment, if you could go to page 212, please.

GLEESON CJ: Yes.

MR BRIDE: In the middle of page 212:

While documents relating to the fresh appointment were lodged with the Corporate Affairs Department soon after the appointment (3 August 1988), including a notice that the first defendant had ceased to act under the first appointment, the further appointment was made without reference to the plaintiffs and without their knowledge. Nor were the required statutory notifications given to the first plaintiff of these changes -

the sections of the Companies Code, which is exactly what happened with us. In fact, we did not know, and there are judgments before the court whereby we did not know until 20 October 1994 that, in fact, the receiver/managers were in trespass. Then, on the following page, the commentary is:

the failure to give statutory notices to the first plaintiff and the treatment of the appointments in the accounts of receipts -

I am sorry, perhaps if I could go to paragraph (a):

the defendants were conscious in July 1988 of the possibility that their joint and several appointment in June 1986 was invalid -

In our circumstances, your Honour, it was not a case of the plurality of the appointment. It was a case of they had acknowledged, by their own documents, that they had not yet been appointed.

If I can take you to the authorities his Honour cites. At page 223, under the heading of "The Validity of the Second Appointment":

As outlined above, on 3 August 1988 the second defendant gave notice to the Corporate Affairs Department that on 27 July 1988 he had ceased to act under the first appointment. Notice was also given on that day that the Bank had appointed, on 27 July 1988, the first defendant as sole receiver and manager.

It then goes down to the next paragraph:

The 27 July 1988 appointment was made without the knowledge of the plaintiffs -

exactly the same set of circumstances in our case.

If you go to the following page, which is page 224, it then cites the authority of Yango Pastoral Company Pty Ltd v First Chicago Australia and it says:

The principal bases for challenging the second appointment are contained in para 12(d) and (e) of the further re-amended statement of claim:

"(d) The First Plaintiff was not restored to possession of the charged assets; [and]

(e) the First Plaintiff was not given any opportunity to make arrangements to repay any relevant amount to the bank;"

The plaintiffs rely on the judgement of Goff J in R A Cripps & Son v Wickenden -

and he then states at the bottom of the page:

"As it seems to me, if I had held the first appointments bad I would have found the second appointments to be bad also, because no person can take advantage of his own wrong. In my judgment the bank could not appoint a receiver until it had restored the company to possession of its assets and renewed its demand. If it could not do that because it had sold the assets, then there might be a serious question whether it had forfeited its rights altogether, or would be entitled to appoint a receiver after restoring the proceeds, the company having an action for damages for conversion for any loss not recouped by return of the proceeds, but the bank never affected to do anything of the sort, and I need not pursue that further."

His Honour then goes down to the bottom of the page and I have lines identifying the part I am referring to:

In my view, however, the principle formulated by Goff J is somewhat broader than this; it is based on the rationale that "no person can take advantage of his own wrong". It involves a recognition that an invalidly appointed receiver, insofar as he has possession, is not entitled to such possession and is in law a trespasser. That being so, the invalidly appointed receiver cannot take advantage of his unlawful possession by retaining assets pending a valid appointment. As such, whilst it may not, in this case, have been necessary for a fresh demand to issue, there was, in my view, an obligation on the invalidly appointed receivers and managers to restore the company to possession pending a fresh appointment.

It then, at the following page 226 in O'Donovan in Company Receivers and Managers:

"If an invalidly-appointed receiver and manager enters into possession and assumes control of the company's property, the debenture holder cannot validly appoint a second receiver and manager until the control of the property is returned to the company and a fresh demand (if necessary) is made on the company."

It then goes down and cites "Jaffe Ltd (in liq)". Your Honour, I think I have covered that aspect of it.

This judgment has also, exactly two days after this matter was heard, two days after there is judgment given by Justice Parker in another matter, and this is the matter I referred to earlier which is the Bride v The Australian Bank, he gave us at page 103, which is in the - I think it is the first respondent's list of authorities at page 103 "Hence, I have been persuaded that in the" and I will identify it for you, it is page 103 of that judgment and at paragraph 162: "Hence, I have been persuaded in the circumstances of this case insofar as the receivers and managers purported to enter in possession of the Oatmill land on 9 August 1984 and thereafter to remain in possession until 22 August 1984 the receivers and managers have trespassed. They had no lawful authority to do it and they did".

Your Honours, our argument is we are not time barred because of discovery of fresh evidence in Fisher v Lightwoods under the Limitations Act relating to Western Australia and I can take you to that if you wish me to. We are not time barred by concealed fraud because it was discovered in October 1994. The situation is that the pleadings are, and have been stated in Master Chapman's reasons for judgment as not being doomed and simply what you have, your Honours, is a situation where the court has erred in law and we have had a gross miscarriage of justice in that there has been a purported valid appointment of receivers and managers when the law did not allow any such appointment.

It was not until 10 years after in the discovery of documents that we came across this evidence and when we did we tried in a number of ways to put it to the court but it was not until November 1999 when the evidence came before the court it was put before the court in evidence, it was tested and we got a judgment of trespass on that for that period of time. Your Honours, I have nothing more to say.

GLEESON CJ: This is an application for special leave to appeal against a decision of the Full Court of the Supreme Court of Western Australia given on 10 May 2000. The decision was that of Pidgeon, Parker and McKechnie JJ, the principal judgment in the case being written by McKechnie J.

The matter has an extremely long litigious background which is referred to in the reasons for judgment of McKechnie J.

The applicants in their written argument and in the oral submissions of Mr Bride have failed to point to any error on the part of the members of Full Court and for that reason the application for leave to appeal is refused. The applicants must pay the costs of the respondents.

AT 9.51 AM THE MATTER WAS CONCLUDED