Gattellaro & Anor v Westpac Banking Corporation S92/2001 [2002] HCATrans 467 (23 September 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S92 of 2001

B e t w e e n -

YOLANDA GATTELLARO

First Applicant

ROCCO GATTELLARO

Second Applicant

and

WESTPAC BANKING CORPORATION

Respondent

Summons

GAUDRON J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 23 SEPTEMBER 2002, AT 9.31 AM

Copyright in the High Court of Australia

MR G.J. McVAY: If it please your Honour, I appear for the applicant. (instructed by Spencer Whitby & Co)

MR J.W.J. STEVENSON: If your Honour pleases, I appear for the respondent. (instructed by Henry Davis York Lawyers)

HER HONOUR: Yes, Mr McVay.

MR McVAY: Thank you, your Honour. Your Honour, there is an amended summons in the papers filed on 16 September 2002.

HER HONOUR: Yes, I have that. What is the basis for order 2?

MR McVAY: I do not press that today before your Honour.

HER HONOUR: Thank you, yes.

MR McVAY: Orders 1 and 3 I will ask your Honour to consider. Does your Honour wish me to take you to the orders and take you through the power that your Honour has to extend time?

HER HONOUR: No. I do not think that is - that is not in issue, is it, Mr Stevenson?

MR STEVENSON: No, your Honour.

HER HONOUR: No, and I have read the affidavit.

MR McVAY: Yes, thank you. I should read it perhaps formally on to the record. I rely on the affidavit of Yolanda Gattellaro of 21 June 2002.

MR STEVENSON: There is one objection to that, your Honour.

HER HONOUR: Yes, what is that objection?

MR STEVENSON: The objection is to the annexures to paragraph 24 of the affidavit. As your Honour will see, Mrs Gattellaro there gives evidence of negotiations. I do not object to the text of paragraph 24 going in so your Honour can see over what time they took place, but I do object to the letters going in because they are without prejudice letters.

HER HONOUR: Yes. Well, that would seem unanswerable, would it not?

MR McVAY: Not necessarily, your Honour, with respect. I had anticipated my friend's objection and it may be, your Honour, that all we need is the dates of the letters and the substance is not important. So, your Honour, it does not - - -

HER HONOUR: Well, you have the dates in the paragraph.

MR McVAY: That is sufficient.

HER HONOUR: Well, why do I not simply return the annexures to you.

MR McVAY: Yes, that is suitable, your Honour.

HER HONOUR: Yes. Well, I will uphold the objection to the letters and return the letters to Mr McVay.

MR STEVENSON: Your Honour, I have an affidavit to read. Is it convenient to do that later or now?

HER HONOUR: Yes. Well, we will go through Mr McVay's affidavits. Yes.

MR McVAY: Your Honour, to assist I have put together a chronology.

HER HONOUR: Have you read all your affidavits?

MR McVAY: I have.

HER HONOUR: Well, perhaps we should hear from Mr Stevenson as to his affidavits.

MR STEVENSON: I read an affidavit of Charles James Fletcher Perry sworn 18 September 2002, filed on the 19^th.

HER HONOUR: Yes, I have read that affidavit.

MR McVAY: Your Honour, I concede its relevance, however, we received this on Friday. Had it been served within more reasonable time - this may not be controversial, your Honour. If your Honour goes to page 4 of the affidavit - - -

HER HONOUR: That is a reconstruction report. Is it annexure "B"?

MR McVAY: It is, yes.

HER HONOUR: Yes.

MR McVAY: Getting towards the right-hand side of the page, your Honour will see about point 4 on the page a heading "INT RATE".

HER HONOUR: Yes.

MR McVAY: Now, if it is accepted by my friend that that is a rate which is charged upon default rather than the rate which any ordinary consumer or customer who is not in default would be charged, I would be grateful.

MR STEVENSON: I am told it is the court rate, your Honour, the rate prescribed under the Supreme Court Rules.

HER HONOUR: It is the judgment rate.

MR STEVENSON: Yes.

MR McVAY: Thank you, your Honour.

HER HONOUR: Thank you.

MR STEVENSON: Your Honour, I have three documents to tender, two of which were annexed to my submissions, one of which was not. The first is a letter to the Registrar of the Court from Mr Rocky Gattellaro of 15 January 2002.

HER HONOUR: Is that objected to, Mr McVay?

MR McVAY: No, it is, your Honour.

MR STEVENSON: Mr McVay has a copy.

HER HONOUR: Yes.

MR STEVENSON: The second is a letter from the Deputy Registrar to my friend's instructors, Spencer Whitby & Co, dated 16 April 2002.

HER HONOUR: Yes. Is that objected to?

MR McVAY: No, it is not, your Honour.

MR STEVENSON: And the third is a letter from the Deputy Registrar to Spencer Whitby & Co of 15 May 2002.

HER HONOUR: And that is not objected to either?

MR McVAY: No, your Honour.

HER HONOUR: No. Well, they will be marked exhibits A, B and C respectively, yes.

EXHIBITS: Exhibit A.....Letter to the Registrar of the High Court

from Mr Rocky Gattellaro dated 15 January 2002

Exhibit B.....Letter to Spencer Whitby & Co from the

Deputy Registrar of the High Court dated 16 April 2002

Exhibit C.....Letter to Spencer Whitby & Co from the

Deputy Registrar of the High Court dated 15 May 2002

HER HONOUR: That is your case?

MR STEVENSON: That is the evidence for the respondent on the application.

HER HONOUR: Yes. Yes, Mr McVay.

MR McVAY: Thank you, your Honour. If I could first take your Honour to Order 69A.

HER HONOUR: Yes.

MR McVAY: And if I could invite your Honour's attention to rule 13.

HER HONOUR: Yes.

MR McVAY: Your Honour, the failure on behalf of the applicant is that within six months from the filing of the application she did not comply with rule 10(9) and hence her appeal has been deemed to be abandoned. Rule 10(9) is that she has not filed the application books "Within 30 days after the receipt of the index".

HER HONOUR: It was a bit more than that, was it not, as things turned out?

MR McVAY: I think the Registry relied upon the failure to file the application book - - -

HER HONOUR: Yes, but it is something more than 30 days since the filing of the index now, is it not?

MR McVAY: It is as we speak, yes.

HER HONOUR: Yes. What is the period now?

MR McVAY: Well, it was deemed to be abandoned on or about 20 May 2002.

HER HONOUR: And we are now into September, the end of the September.

MR McVAY: Yes, but the summons to extend time was filed on 4 June. So the summons was filed promptly after that.

HER HONOUR: Thank you, yes.

MR McVAY: I am sorry, 24 June.

HER HONOUR: Is there some reason why the matter has not been brought on earlier?

MR McVAY: Certainly not for want of anything done on behalf of the applicant. I think it has just been the Court time. Your Honour, I have a chronology.

HER HONOUR: Have you shown that to - - -

MR McVAY: I have. I apologise for the manuscript. The first submission I wish to make, your Honour, is this, that the application for leave to appeal had been prosecuted appropriately up until this particular failure to lodge the application books. Your Honour will see that the application for special leave was filed on 3 May 2001; the summary of argument on 31 May; the applicant's reply on 16 July. The appointment to settle the index was made on 10 December last year.

On 16 January this year an amended application and draft notice of appeal was filed. The application book index was settled with the Registrar on 16 April. The date for filing the application books, as per the Registrar's letter, was 14 May. Now, that is what we did not comply with, your Honour, and the affidavit of Mrs Gattellaro says why she did not comply with that particular requirement. But the submission I make at this stage, your Honour, is that, as with many appeals, there just has not been an application for special leave filed and then ignored and forgotten. It has been progressed and processed right up to the point of the application books and the summons was filed very shortly after the abandonment occurred, or was deemed to have occurred.

Your Honour, there is some fairly recent law on the approach that the Court should take to applications of this nature. I refer in particular, your Honour, to - it is a case that your Honour did not sit on in the High Court. It is Jackamarra v Krakouer 195 CLR 516. I hand your Honour a copy of the volume. The case is instructive on the approach that the Court is to take, or should take.

Before I take your Honour in any detail to the case, this case is one where the appeal, or the application for leave to appeal, was started regularly and within time. The applicant does not ask the Court to extend any time to allow the appeal to be brought. This is a case similar to Jackamarra in that the appeal has been regularly brought within time but there has been a failure in a step to proceed with the appeal. Your Honour, the majority in this case - if I could take your Honour, please, to page 521 and Justices Brennan and McHugh there set out the principles that they say are applicable. About point 7 on the page:

Cases such as Palata are therefore concerned with applications that seek to put at risk the substantive rights of the respondent. It is understandable that, where the applicant's right of appeal has gone -

and this is not this case -

courts should insist, as they do, that the time for appealing will not be extended unless the proposed appeal has some prospects of success. But once an appeal has been lodged -

as this one has - - -

HER HONOUR: No, you have not. All you have is the special leave application.

MR McVAY: I beg your pardon. Yes, of course, your Honour is quite right to correct me on that.

HER HONOUR: So it may be relevant to consider, as Mr Stevenson suggests in his outline, whether there are reasonable prospects of success.

MR McVAY: In my submission, your Honour, the analogy of the appeal and the leave to appeal are the same.

HER HONOUR: Well, not so far as I know, because what you have is a final judgment of the Court of Appeal in this case. You have no appeal on foot until special leave is granted and this Court has repeatedly said that there is a distinction between a special leave application and an appeal.

MR McVAY: I accept that, your Honour, but we are dealing - but the point the Court makes - and if I can just go on a little bit further and it will make my point for me:

But once an appeal has been lodged, different considerations apply. An appeal, honestly lodged by a suitor within time, "must be investigated and decided in the manner appointed".

Now, even though this is only an application for leave, the applicant is still entitled to have her application for leave considered and decided in the manner appointed, which of course is before three Judges or two Judges.

HER HONOUR: Well, it has been decided in the manner appointed by the Rules as to what is to happen if - - -

MR McVAY: With respect, your Honour, it has not really been decided. That is a legal fiction that it is deemed to be abandoned notwithstanding that there is no intention of anybody or in fact it is an intention to be abandoned. But the Judges deal with that:

If the appeal is frivolous, it can be disposed of summarily.

No one suggests it is frivolous.

If there is gross delay in prosecuting the appeal, it may be dismissed for want of prosecution.

But, with respect, your Honour, no one could, having looked at the chronology, really seriously suggest that there has been any gross delay. It has been prosecuted up to a particular point.

If it fails to comply with a particular rule, the rules of court may entitle the respondent to strike it out.

Well, that is what happened here.

But the merits of the appeal are not a relevant consideration where the application concerns an extension of time for taking a step in prosecuting the appeal unless, unusually, the Court can be satisfied that the appeal is so devoid of merit that it would be futile to extend time.

I do not really understand that to be seriously submitted.

The merits are examined at the end of the process, not during its course. It would lead to strange consequences if consideration of the merits was a prerequisite for extending the time for each and every step in the conduct of the appeal -

and I submit, your Honour, that that is the approach the Court should take in this particular application.

HER HONOUR: It does not seem to me that the same principles apply to a notice, as it were, to extend time for special leave to appeal.

MR McVAY: I cannot certainly find a case which says that.

HER HONOUR: No, because it really is a different process. You see you are talking there of a situation in which there is a right to appeal - a right is either given by law or it has come by the grant - and you are talking about losing a right. I think you are in different territory with an application for special leave.

MR McVAY: Yes. We certainly have no right of special leave but we do have a right to be heard on it and in the time and manner appointed.

HER HONOUR: Well, that is your problem. It was not in the time and manner appointed.

MR McVAY: In any event, your Honour has a discretion, of course, under Order 69A rule 13. It is deemed abandoned unless the Court or a Justice otherwise orders or decrees. Your Honour, the reasons given for failing to meet the deadline for the application books according to Mrs Gattellaro was, first of all, her husband's illness - and your Honour has seen evidence that he had coronary angiograph surgery, which to people of their age, your Honour, with respect, is no small matter. Your Honour has seen the particular peculiar financial circumstances that they are in and there is no suggestion that that financial position is not as set out.

Your Honour has heard that over the relevant period, from March to May of this year, strenuous attempts have been made to try and settle the matter. Now, your Honour, that is important in all cases, or with most cases, where want of prosecution is suggested. If one of the parties can point to bona fide and honest settlement negotiations, then that is an answer to a complaint about want of prosecution. Your Honour, that has been looked at by the Full Federal Court in Hoefler v Tomlinson and Others 133 ALR 625. I hand your Honour a copy of the volume. Now, your Honour will see from the headnote that it is:

Use of privileged communication of offer of settlement - Delay an issue in proceedings -

If your Honour would come down to page 626, at about line 40 Justice Spender said:

I acknowledge that the common law admits of a possible exception -

this is an exception to legal professional privilege -

where delay is an issue, as in proceedings involving alleged want of prosecution or laches. In such proceedings it is clear enough that the fact of without prejudice communication between the parties may be a relevant matter. It may explain delay, for instance. Another reason for the exception may be that in such cases the communication is not genuinely intended to be attempt . . . Or it may be that the reason for its disclosure, namely to assess whether there has been unreasonable delay -

Your Honour, that is the statement of the common law and then Phipson is set out there in support of it. It is clear, your Honour, that attempts were made on both sides to settle the matter. That is a common law answer to any allegation that there has been unreasonable delay.

The final matter that Mrs Gattellaro points to is that if she had been told that her appeal would have been abandoned, or would be abandoned, and that she would not have any further rights, she would have borrowed some money from her brother - - -

HER HONOUR: Now, this is a problem. Do I take it from that that - well, I do not know. The affidavit material is not particularly helpful, but what should I make of that? No doubt the solicitors were informed.

MR McVAY: The solicitors were informed, yes.

HER HONOUR: And the solicitors drafted that affidavit.

MR McVAY: Yes.

HER HONOUR: I am forced, am I not, by implication to the conclusion that the solicitors did not advise her properly.

MR McVAY: I think your Honour is driven to that and I would not say anything against it, but - - -

HER HONOUR: The same solicitors as are on the record?

MR McVAY: Yes.

HER HONOUR: That is your solicitor in court?

MR McVAY: Yes.

HER HONOUR: And you do not ask me to draw another inference?

MR McVAY: No, I do not.

HER HONOUR: Very well.

MR McVAY: I should say this, your Honour. The affidavit was settled by the solicitor involved, and I can put it no higher than that. Justice Kirby said something about that in the same Jackamarra Case in 543. I do not want to mislead your Honour. The solicitor settled that affidavit. On my instructions, they were not informed about the nature of the appeal being abandoned, or something like that. At 543 I then take your Honour to. About three lines down from the top, your Honour, there is a sentence commencing:

I do not doubt that the four considerations mentioned in Esther Investments are relevant. But they are by no means exhaustive. Several others have from time to time been thought relevant. These include whether the delay was intentional or contumelious -

your Honour, there is nothing to suggest it is either of those two -

or merely the result of a bona fide mistake or blunder; and whether the delay is that of the litigant or of its lawyers, with which the litigant should not be saddled.

Now, it seems that at least one element of this, at least some part of it, is some failure from the solicitor to bring home clearly to the litigant that unless there is some money produced for some books to be got together, her rights will be abandoned, or her appeal will be deemed to be abandoned. So Justice Kirby has looked at that and that, of course, is - this Court has said on many occasions that the default of a solicitor should not be visited upon the applicant, especially so, your Honour, where the applicant's husband was sick and they are, on any view of it, in middle to late 60s. Such persons generally are reliant upon a solicitor and cannot normally say, "Well, you should be doing this, or you should be doing that." But I do not put it any higher than that, your Honour.

Your Honour, I come then to the merits. Now, if your Honour rejects my submission that detailed analysis of the merits is not required, I should take your Honour to the Court of Appeal judgment - - -

HER HONOUR: Well, you have a dissenting judgment in the Court of Appeal in your favour. It is not a unanimous decision against you and I suppose on the basis of the dissenting judgment you say it is fairly arguable? I would think that where one is dealing with special leave applications, the relevant question might be whether the issue is fairly arguable.

MR McVAY: Yes, that is right, your Honour. I accept that, your Honour. The only thing I would say further - - -

HER HONOUR: Well, Mr Stevenson might wish to say something in opposition, in which case you could deal with it in reply.

MR McVAY: In that case, I will reply to it. Your Honour, the only other thing then that I have to say is address perhaps the question of prejudice. If your Honour goes to the affidavit of Mr Perry that was read, your Honour will see on page 3 that the judgment was for $983,339 and that the amount of the judgment as of today is $1,190,621. That is an amount of about $207,000 interest over the period August 2000 until today.

Your Honour, the reason for my inviting your Honour's attention to the interest rate is this, that had I had more time - but your Honour will probably accept this - when your Honour looks down that interest rate it is 10, 11, 10, 9. Any bank window all around this country, your Honour, will show that people are being lent money for their housing loans now at 5 and 6 per cent. So when it comes to prejudice, your Honour will bear in mind that the interest rates being charged for the last two and a bit years are almost double that of which the Bank would earn from an ordinary consumer not in default.

My friend's affidavit, of course, makes the point that the value of the property is about equal to the amount of the loan, but the loan, of course, is at court rates which are about twice the rates that the Bank would normally earn. If I draw that to your Honour's attention on that question of prejudice. It would be an entirely different story if current interest rates were applied.

So, your Honour, since the delay has been explained in a number of ways, a variety of reasons, the delay is not gross; there is no intentional or contumelious behaviour and because the appeal had been prosecuted responsibly and with celerity up until this particular time when the settlement negotiations started, your Honour should exercise the discretion that your Honour has and extend time for filing the books. The time for which we require filing the books, your Honour, is only until 8 October 2002.

HER HONOUR: Does that mean that some work has been done? I mean, 8 October is, what, two weeks away?

MR McVAY: Yes. The index is settled. It is just photocopying the documents now.

HER HONOUR: Very well. Yes, Mr Stevenson.

MR STEVENSON: Your Honour, in my submission there are three reasons why your Honour would exercise your discretion against the application as sought. The first reason is that there is no adequate explanation given to the Court for what has happened. The critical date is 16 April 2002, which, as exhibit B reveals, is the date on which the application book index was settled and the date on which the Deputy Registrar informed the solicitors for the applicant of the deadline for the filing of the application books.

When that date is borne in mind, one sees that two of the reasons advanced on Mrs Gattellaro's behalf for what has happened are plainly irrelevant. The first is her husband's medical difficulties. The evidence that is annexed to Mrs Gattellaro's affidavit reveals - and this is Dr Eisenberg's report of 19 June 2002 which your Honour will find at page 10 of Mrs Gattellaro's affidavit. It states in the third paragraph that, happily, Mr Gattellaro "made a good recovery" from the procedure, and just dropping to the second sentence:

At last review on April 17^th, I felt that he had made a complete recovery from his procedure and would be fit to return to work.

So we have a situation where the implication from Mrs Gattellaro's affidavit is that there is some direct connection between her husband's unfortunate medical condition and - - -

HER HONOUR: No. I think if you read the last paragraph, as to what the doctor says, then you might properly infer that if she were letting sleeping dogs lie, as it were, it was because she was concerned for her husband's welfare - concerned not to cause a second episode.

MR STEVENSON: Yes, that certainly is open, your Honour, yes, but - - -

HER HONOUR: That is a reasonable inference, is it not?

MR STEVENSON: It is, your Honour, yes, but the fact of the matter is it seems that the major trauma of his disability was over at that point. The second reason advanced is the idea that Mr Gattellaro at one stage wished to be himself involved in the application for leave. As your Honour will see from exhibit A, as early as 15 January he had written to the Registrar, looking at the last sentence of the letter, saying he did not wish to play a role.

It is true that the correspondence annexed to Mrs Gattellaro's evidence reveals that he apparently in his own mind at least wished to revisit that matter and that that led to there being some letters written to him by Mr McVay's instructing solicitor, but even when that is taken into account, by the end of the February, so far as Mrs Gattellaro is concerned, that issue really did cease to be a factor, in my submission.

The other factors relied upon are the ongoing settlement discussions and the absence of legal advice. The submission I offer for your Honour's consideration in regard to those matters is that no explanation, until this morning, has been given for that fact. It is clear from the - - -

HER HONOUR: I think you got as close as you will get to a mea culpa from legal representatives, did you not, today?

MR STEVENSON: Indeed, but that does show that up until the point when your Honour took the point up, there was, I would respectfully submit, a lack of candour about that matter. The Court is entitled to expect that if the true position is that the solicitor is at fault, then the solicitor should put an affidavit on saying that so the Court is given that evidence fairly and squarely and not having to, as your Honour did, in effect, dig it out from my friend.

It has two other aspects. It is clear from exhibit B and exhibit C that my friend's instructing solicitor knew in terms of when the application books should have been filed and the inference that I would ask your Honour to draw from that evidence is that he decided not to do it, not through oversight, but because he thought the case would settle.

HER HONOUR: Well, perhaps many of us have been guilty of that from time to time.

MR STEVENSON: There is two aspects of it, your Honour. It was not an accident is what I would invite your Honour to infer. It was deliberate and that it has been - - -

HER HONOUR: Well, there may have been an excess of optimism over realism. That might be the worst you can say.

MR STEVENSON: I will just add this last sentence. If that is so, then your Honour is entitled to have had that stated clearly and candidly from the applicant's side, not to have to find out about it as your Honour has.

On the question of the merits, I come to Justice Priestley's dissent because it is, on its face, flawed. In my submission, it is quite plain that it is flawed. My submission is it is highly unlikely leave will be granted in this case for these reasons. Your Honour knows the judicial notice point. The issue in the proceedings was the form of a guarantee that the trial judge and the Court of Appeal found that Mr Gattellaro had executed in November 1985 and the particular issue was whether that guarantee contained a clause which held him liable to the guarantee even if another party named as a proposed guarantor had not signed. That was the central issue.

Now, as your Honour will see, if your Honour has the Court of Appeal judgment there, that the majority dealt with the matter at paragraph 35. Your Honour will see that it is said there:

It was submitted that the guarantee given by Mr Gattellaro might not have become operative in the absence of signature by Mrs Gattellaro as co-guarantor. However -

and this is the point I seek to emphasise -

the evidence included a guarantee given by a relative of Mr and Mrs Gattellaro in May 1986 in respect of their indebtedness -

and I should add in relation to the same transaction -

a Westpac guarantee on a printed form with a print date of 1 October 1984.

Now, the critical sentence is:

Judicial notice can be taken of the fact that institutions such as Westpac used a standard form guarantee.

Well, pausing there, it was not just a question of judicial notice; the evidence was, as indicated in the preceding sentence, that there was certainly a standard form of guarantee.

HER HONOUR: There might be a more fundamental question about onus of proof rather than judicial notice.

MR STEVENSON: Yes, and your Honour is referring to the fact that the Bank did not put evidence on of the standard form. I take your Honour's point but - - -

HER HONOUR: But, no, I just say it seems a very funny way on which to decide liability under a guarantee.

MR STEVENSON: Well, can I take that up and come to it in a sentence or two?

HER HONOUR: Yes.

MR STEVENSON: The real question for the trial judge and for the Court of Appeal was not really whether there was a standard form of guarantee that Westpac used because the evidence showed that there was a standard form because the relatives of the Gattellaros had signed it. It was printed. It had a print date. It was clearly a standard form. The real question was whether that standard form document which had the critical clause in it was the one that had been signed by Mr Gattellaro I think six months earlier.

In my submission, as is clear enough from this passage, that the Court of Appeal - the trial judge certainly did and the Court of Appeal decided that issue on the evidence, not on the basis of any question of judicial notice. When one looks at the next sentence after the one I just read, it is said:

It was submitted that this -

that is the relative guarantee -

could not be found to have been Westpac's standard form guarantee, and so the form of guarantee which would have been given in November 1985, in the absence of explicit evidence from Westpac. I think that unrealistic, and conclude -

and I would interpolate there, your Honour, conclude from the evidence of the relative guarantee -

that the guarantee given by Mr Gattellaro in November 1985 was in the same form.

Of course what his Honour means is "as that signed by the relatives". So when seen properly, in my submission, what the Court of Appeal has done is to say the inference that was open to the trial judge to draw, and which Justice Giles also drew, was that the guarantee Mr Gattellaro signed was likely to be in the same standard form as that which his cousin, I think, signed in the same transaction only six months earlier and that that inference was one which was open on the facts and was not one that this Court would be inclined to interfere with and certainly does not give rise to a special leave point.

When one turns to Justice Priestley's dissent - can I just take your Honour to paragraph 9 of the judgment because his Honour misunderstood what the majority had held. He refers in paragraph 8 to the majority's decision and then says:

The foregoing conclusion -

that is that of the majority -

depends on the view taken by Handley and Giles JJA of what was contained in the guarantee they inferred had been signed by Mr Gattellaro. This view depends upon their taking judicial notice both of the fact that the Bank used a standard for of guarantee -

and these are the critical words -

and of what was in it.

Now, that is wrong, your Honour. The majority did not take judicial notice of those two matters; only of the fact that - - -

HER HONOUR: Well, how was it proved? How was it proved?

MR STEVENSON: An inference from the - - -

HER HONOUR: Well, there must be a big question whether it can support that inference.

MR STEVENSON: Well, that is a different point and if that is the special leave point, then that is a - - -

HER HONOUR: But, I mean - - -

MR STEVENSON: Well, that is the point, your Honour. My submission - - -

HER HONOUR: - - - there is an onus. I mean, prima facie, there was an onus on the Bank to prove Mr Gattellaro's indebtedness.

MR STEVENSON: Yes, and the submission advanced below and which will be advanced here is - - -

HER HONOUR: And when it comes to a guarantee, he not being the primary debtor, I suppose, ordinarily, I would have thought, you might require fairly strict proof.

MR STEVENSON: Well, your Honour, there was in evidence a guarantee signed six months later in the same transaction on what was plainly a standard form and the inference that the court accepted was that it was more probable than not that the guarantee Mr Gattellaro signed was in the same form. My point is it was not a judicial note at all and that though their Honours, the majority, made reference to it, in effect - - -

HER HONOUR: But there is a point about proof, is there not, somewhere in there? Well, there is at least an arguable point about proof of indebtedness somewhere, it seems to me. I mean, if you say that the test is not a fairly arguable case, then I look at it somewhat differently. But if the test is a fairly arguable case - - -

MR STEVENSON: Well, the point I was endeavouring to persuade your Honour about was that there is nothing in the judicial notice point. If your Honour is of the view that it is fairly arguable that a special leave point arises from an inference that the court drew from the evidence, then there it is, your Honour. My submission is that - - -

HER HONOUR: Well, I mean, it has been referred to as judicial notice but it seems to me that it is really an inference point.

MR STEVENSON: I do not think I can take that any further, your Honour. My point is - I will say it once again - that it was an inference drawn from the evidence and that that is not, in my submission, a point that would be of - it is not a special leave point.

I will turn to the third point, your Honour, prejudice. I do not put it any higher than this, that the evidence of Mr Perry makes it clear that it is likely that the Bank will not be able to recover its costs of this application and there is some prejudice there. My friend made reference, your Honour, to interest rates. Well, they are court rates and he does seem to be seeking to raise another judicial notice point by inviting your Honour to have regard to what he has seen advertised in bank windows. But I think the shorter answer is that it is court rates, that is what the Bank is entitled to, and of course simple interest, and not compound, as one might think it would otherwise be entitled to. So Mr Perry's evidence does show, in my submission, that there is some prejudice. If your Honour pleases.

HER HONOUR: Thank you. Mr McVay, I would be minded to grant order 1 at least. What was order 3?

MR McVAY: Extending time for filing and serving the application books until 8 October.

HER HONOUR: Yes. Orders 1 and 3 on terms, however, that the applicants would have to bear the costs of this application. In view of the candour that I heard from the Bar table today, I presume that is not a matter that will fall to the direct prejudice of the Gattellaros.

MR McVAY: I had better just check on that. It is acceptable.

HER HONOUR: Yes. Well, there will be an order in terms of order 1 - well, I should say this: I am satisfied that the delay in this matter is understandable given the circumstances, one, of the husband's ill health and, two, the fact that there were settlement negotiations and, thirdly, the candour that has emerged from the Bar table today as to what advice was or was not given to Mrs Yolanda Gattellaro. I am not satisfied that it can be said that the matter is not fairly arguable in terms of a special leave application.

Accordingly, I make order 1 as sought, order 3 as sought and an order that the applicants bear the costs of this motion. That includes the respondent's costs, but I understand from what has been said at the Bar table that that is not likely to directly result in difficulties for Mr and Mrs Gattellaro.

I should return your books, Mr McVay.

MR McVAY: Thank you, your Honour.

HER HONOUR: I am sorry, thank you. The Registrar reminds that I should certify for the attendance of counsel. So the fourth order will be certify for the attendance of counsel. Thank you.

AT 10.13 AM THE MATTER WAS CONCLUDED