Catlin & Anor v National Australia Bank Ltd P86/2002 [2002] HCATrans 524 (24 October 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P86 of 2002

B e t w e e n -

ADRIENNA MARIE CATLIN and ADRIAN CHARLES STEPHEN CATLIN

Applicants

and

NATIONAL AUSTRALIA BANK LTD

Respondent

KIRBY J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON THURSDAY, 24 OCTOBER 2002, AT 2.56 PM

Copyright in the High Court of Australia

MR A.C.S. CATLIN and MRS A.M CATLIN appeared in person.

HIS HONOUR: You are Mrs Catlin?

MRS CATLIN: I am, your Honour.

HIS HONOUR: And, you are appearing here in person. Is your husband, Adrian Catlin with you?

MRS CATLIN: Yes, sir.

MR CATLIN: That is correct.

HIS HONOUR: Have you agreed between yourselves who is going to have the speaking part?

MR CATLIN: We were both wanting to do it, sir, if we could?

HIS HONOUR: Both of you. Yes, all right. We will just take it in turns as is convenient.

MS P.E. CAHILL: If the court pleases, I appear for the respondent. (instructed by Jackson McDonald)

HIS HONOUR: Thank you. The first thing we have to do is to get the record straight, which is a matter of formally placing on the record the evidence that you are relying on, so let us do that first of all. There is an affidavit which you have filed. It is in the name of Adrian Charles Stephen Catlin and it is a long affidavit which is sworn 30 August 2002. Now, that is your affidavit, is it, Mr Catlin?

MR CATLIN: That is correct, sir.

HIS HONOUR: That is in support of the application by both of you, is that correct?

MR CATLIN: That is correct.

MRS CATLIN: Yes.

HIS HONOUR: Very well. Now, there was also another affidavit that came in just before I came to sit today. That is an affidavit of 24 October of Adrienne Marie Catlin. That is your affidavit, Mrs Catlin?

MRS CATLIN: That is correct, sir.

HIS HONOUR: And you read that affidavit - each of you reads his or her affidavit, is that correct?

MRS CATLIN: Sir, the reason I have actually put this affidavit in is that when I was going through our affidavits I have realised that at one point I have written "the 19^th" as opposed to "the 21^st" so, I felt that it was in fairness to everyone that I correct that mistake and that is why I actually got Telstra to - - -

HIS HONOUR: Yes, I saw that, but in any case all I am doing at the moment is making clear the evidentiary foundation of the application, and you read your affidavit of 24 October and Mr Catlin reads his affidavit of 30 August, is that correct? You do not have to actually read it out but you rely on it and you put it before the Court, is that right?

MR CATLIN: That is correct, sir.

MRS CATLIN: I will also be reading some of the other affidavit, too, your Honour. Is that okay?

HIS HONOUR: That is all right, do not worry about that. The main thing, at the moment, is I am getting the evidence before me for the purpose of the application. Now, are those two affidavits the only affidavits that you are placing before me? Is there any other affidavit or any evidence that you wish to place before the Court?

MR CATLIN: Sir, the actual judgments - - -

HIS HONOUR: They are part of the record. I have those - at least I have the Full Court judgment which is dated 16 August 2002 and there is the judgment of Master Bredmeyer which is dated 3 May 2002. I have those two judgments. Is the other judgment that you are referring to the judgment of Master Sanderson, is it?

MR CATLIN: No, sir, the judgment of 28 August from the Full Court. We had to go back and make a second application, as I understood it, so that we could get access to the High Court. We had to go through the process of exhausting all avenues, so we - - -

HIS HONOUR: I do not have that judgment of 28August. Where is that?

MR CATLIN: I do not know, sir, I am sorry. I thought that had been submitted but - - -

HIS HONOUR: What is that about?

MR CATLIN: It is virtually - it was - we asked for a second stay, based on the - application for stay of - another stay of execution pending the application to the High Court for special leave to appeal.

HIS HONOUR: I follow. The first one was an application for a stay pending the hearing in the Full Court.

MR CATLIN: Yes, sir.

HIS HONOUR: That was the one which was the subject of the judgment of 16 August 2002.

MR CATLIN: That is correct, sir.

HIS HONOUR: Then you went ahead and made an application for special leave to appeal to this Court and in support of that you sought an application from the Full Court on a second occasion to protect this application and you do not have that judgment.

MR CATLIN: I do have that judgment, sir, which you do not have a copy of it.

HIS HONOUR: I see, all right. I would like to have that. Hand that up, please? Thank you. Now, is that the whole of the evidentiary and formal matter that you wish to place before the Court?

MR CATLIN: Yes, sir. There is probably one other thing. We were at the Supreme Court this morning for a chamber summons to extend our leave - to extend time to put our appeal in.

MRS CATLIN: Enter our appeal, your Honour.

MR CATLIN: To enter our appeal. So, I guess we need to tell you about that one.

HIS HONOUR: You can just tell me about that later, unless Ms Cahill has an objection. We will just leave it at the moment that the affidavits you read are the two that have been identified and you place before me the three judgments, a judgment of Master Bredmeyer, the first judgment of the Full Court of 16August and the second judgment of the Full Court of 28 August and that is the evidentiary material.

MR CATLIN: Thank you, sir.

HIS HONOUR: Very well. You may just sit down.

MRS CATLIN: Thank you.

HIS HONOUR: Now, Ms Cahill, do you have any objection to my receiving, first of all, either of the affidavits?

MS CAHILL: No, your Honour.

HIS HONOUR: Do you wish to cross-examine either Mr Catlin or Mrs Catlin?

MS CAHILL: No, your Honour. Essentially, our argument will be that in reliance upon, the record the court record, is sufficient to dispose - - -

HIS HONOUR: So you do not have any objection to my receiving the three reasons for judgment of the courts below?

MS CAHILL: No, your Honour.

HIS HONOUR: Very well. Do you have any evidence on behalf of the respondent that you wish to place before the court?

MS CAHILL: No, your Honour. As I say, the position for the respondent is we simply rely on the court record.

HIS HONOUR: Yes, very well. You should go first, I suppose, Mr Catlin. You tell me what you want to say about the matter. Perhaps you might just excuse me for a moment and I will read this second judgment of the Full Court. I have read the first judgment but I have not seen the second one. This is a judgment of Justice Murray with which Justices Wallwork and Parker agreed which is dated 28 August 2002.

MR CATLIN: That is correct, sir.

HIS HONOUR: Yes, I have read that judgment, now. Now, what do you wish to say, Mr Catlin?

MR CATLIN: Your Honour, we seek a stay of execution by the orders of Master Bredmeyer on 3 May 2002. We have a number of grounds for appeal but I would like to highlight two points of law that we believe the Master and the Full Court of the Supreme Court have erred in law. Sir, in the Master's judgment, the - I refer to the final page, paragraph 40, where he outlines the power to order summary judgment. I am sure you are well aware of that, that it:

should be exercised with great care and should never be exercised unless it is clear that there is no real question of law or fact to be tried.

It is this that we argue that - and I refer to my state - to my affidavit dated 14 March 2001 on page 11, that - - -

HIS HONOUR: Where do I find that?

MR CATLIN: It will be in your - in the August 30.

HIS HONOUR: Yes, whereabouts in there? Is it paginated?

MR CATLIN: Page 11.

HIS HONOUR: Is it 11 down at the bottom of the page?

MR CATLIN: That is correct, sir.

HIS HONOUR: I see. Yes, I have that document.

MR CATLIN: It has a heading of "AGREEMENT WITH THE PLAINTIFF TO SETTLE DEBT".

HIS HONOUR: Yes.

MR CATLIN: This was a fact that I had sworn that this was a compromised agreement that was struck between my wife, on behalf of the

ANA Enterprises Pty Ltd and Mr Mark Murrell on behalf of the National Australia Bank during their phone conversation on 21 June 2001 which will lead to that small affidavit that we presented today because, as my wife had indicated, we had made an error of dates.

HIS HONOUR: Yes.

MR CATLIN: The main fact here on that fact: at no point has the Bank denied in any sworn affidavit that this agreement did not exist. Sir, the Master erred by concluding that it was a compromised offer, as he has stated in his judgment on page 14 of his judgment, paragraph 24.

HIS HONOUR: Yes.

MR CATLIN: Our contention is that it was not an offer, it was an agreement that had been concluded between the two parties. Now, one of the things hat has been coming up in our - as we have understood - court appearance before the Full Court was the that the word "compromise" kept coming up but what I was not aware of was the word of the "offer" and that makes a huge difference because at no - this was an agreement that had been struck and my wife will go through it fully with your Honour.

The Full Court also erred with the same conclusion because they relied on the Master's judgment and as stated in the judgment dated 16 August 2002 by the Full Bench on page 11, "This was a proposal." Once again, it was not a proposal. It was an agreement which we have highlighted clearly in my affidavit which is sworn. This was a fact that should have been tested in a court of law. So that is one issue where we believe that both the Full Court and the Master have erred. Our second is - and which we believe that the High Court should come into jurisdiction - was the right to remain silent. I do not know whether you have been able to read much of - - -

HIS HONOUR: Yes, I have looked at the submission and the material on this but the problem that I see in that right in this context is this: that you entered into the mortgage; the mortgage contained certain strict provisions. If those provisions were not complied with it gave the Bank certain rights against you.

MR CATLIN: Yes, sir.

HIS HONOUR: Those rights you had agreed to and the Bank sought to enforce them. You therefore - and they sought to enforce them summarily. You, then, were seeking relief from the effect of the instrument that you had executed, so, in accordance with ordinary principles, the obligation was on you to establish why, notwithstanding the instrument that you had executed, you should be given relief against the promise that you had signed and that put you in something of a quandary because of the concurrent proceedings elsewhere, which I understand but, vis-à-vis these particular proceedings, you had to establish some foundation to relieve you from the written mortgage that you had executed.

So, although it presented a quandary to you, without that evidence you would not be providing a foundation to secure the relief from what would otherwise follow, as a matter of law, because of the instrument that you and your wife had executed. That is the problem that you face and that was the problem that the Master faced. It is not forcing you to breach your right to silence in the criminal proceedings but it is in the civil proceedings saying unless you can establish a basis for getting relief the Court will not give it to you.

MR CATLIN: So does not that mean, sir, that then by giving that - by giving that cause and being unrepresented and not being able - not knowing, as we have found out in some of these procedures that we have said and done things and had those turned against us because we do not have representation and so the right to remain silent - we are then being asked to put in the form of an affidavit, under duress, because to tell the story of how the situation occurred - you know, it is one thing to say, sir, that you are in default of the debt, it is how that default came about and at the time of the default notice that was issued against us we, indeed, were not in default in our mortgage.

We also - there are accounts that have been brought up in these cases that relate directly to the criminal case, so how can we give evidence, how can we argue without compromising our situation?

HIS HONOUR: I understand that and I am sorry that you are put into this quandary and particularly without proper legal advice but unless you can put evidence before the Court, the Court has really no alternative but to give effect to the written mortgage that you and your wife executed. That really makes it difficult for you, unless you have some other source of evidence, to provide the ground for the intervention of the Supreme Court. You just then have to make one of those extremely painful elections that people have to make from time to time when they are seeking, concurrently, to protect themselves against a criminal charge and to protect their interests in civil proceedings which are in various ways factually connected.

People have to face these problems all the time, unfortunately. That is the difficulty that I see with that argument. You are entitled to rely on your right to silence but if you do that then you do not place before the Court the evidence that will ground giving you relief in the civil proceedings and it is just a fundamental matter which is symbolised by the way I began these proceedings that courts act on evidence. That is why I asked you to identify the evidence that you were relying on in the application before me. That is just basic.

MR CATLIN: Okay, so - well, then I will refer to our evidence of that agreement that was struck between my wife and Mark Murrell. We believe that that evidence and that agreement estops the Bank from using its securities against us. I will now hand over to my wife who will go through that agreement and the principles behind our belief that there is a fact here.

MRS CATLIN: Your Honour, I would like to refer to 21 June 2000, approximately ten past ten when I made a telephone to Mr Mark Murrell who is controller of - head of asset structuring in the Perth branch of the National Australia Bank.

HIS HONOUR: Now, is this proved by - because I cannot act what you say in unsworn statements. I have to rely on what is in the evidence, that is why we got the evidence put before the Court, formally, at the beginning.

MRS CATLIN: We have stated that in our affidavits that this telephone conversation - - -

HIS HONOUR: Yes. Perhaps you might just tell me what you say is the effect of the evidence and Ms Cahill can take a note of it and if she disagrees or says it is not borne out by the sworn evidence that you have placed or that your husband has placed before me then she can raise that and we will have to deal with that at that stage.

MRS CATLIN: Okay, your Honour. The telephone conversation was made on 21 June in the year 2001 - no, 2000, I am sorry. It lasted for approximately 17 minutes and it was actually discussing what was happening within our café at that point in time. Our company had been placed in receivership by the National Australia Bank and there was a receiver/manager appointed to the business which we saw on infrequent occasions. We had made a number of proposals to the National Australia Bank but on this particular instance we were becoming quite frustrated with not hearing anything so that amounted in my telephone call.

In that telephone call Mr Mark Murrell made an offer to us which was an offer that was accepted and it was binded as a contract between us that if we were able to raise $500,000 which included the mortgage of our house, it included our business and any other debt that we had with the National Australia Bank, then he would take us out of receivership and we would go back on with our lives as normal. So, this deal was a deal. It was not an offer of anything other than a deal, you know, "Adrienne, you come up with $500,000. That is all I am interested in. The Bank just wants the money. You come up with $500,000 then we get out of your life. You go back on living your life as normal".

We then proceeded to go on and raise this money which we seeked help from other financial institutions. We had family that was going to come in and help us with money. There was another business within Western Australia that was actually going to invest in the company. We had all avenues coming into help. The community actually heard that we were $50,000 short. They started raising money for us.

They actually had a meeting with the receiver/manager who - he told them that there was no imminent need for them to worry about raising the money because nothing was actually happening. So there was never at any point any direction given to us that we were running out of any sort of time or that we needed to hurry up. If anything, the National Australia Bank helped us. They sent us bank statements when it was required to actually send to financial institutions. Mr Mark Murrell constantly received my letters when I sent him information about what was happening.

So, to me, the deal that we actually had comes under the arm of promissory estoppel. It was never placed in writing, but then the National Australia Bank put very little in writing. They were not interested in doing that. All Mr Mark Murrell was interested in doing was getting the money and he would go on with his life and we would go on with our life, and that is what we were doing. Now, the promissory estoppel - you know, we had the offer, we had the acceptance and we also had consideration and the consideration caused us enormous detriment when on a Friday afternoon when most people are out celebrating and having a drink we - - -

HIS HONOUR: Not judges.

MRS CATLIN: Okay. Maybe not judges. After 6 pm that night the receiver/manager walked in and told us that that was it. He had security guards ready to escort us out of our business. Because it was a Friday afternoon it meant that we had no access to any judges to gain an injunction to find out what was going on or to any solicitors for any information. You know, it was a very sleazy way of the Bank actually using its securities to come and do what they were doing after we had been encouraged by the National Australia Bank to move on and to come - see this deal come to fruition.

It was never an offer and it was never a proposal, your Honour. It was a deal and it was a deal that was binding. I trusted the National Australia Bank. I trusted Mr Mark Murrell. I actually flew to Perth, on occasions, to discuss with Mr Mark Murrell how we were going and what we were doing and it was a very important time for us because we were all working towards seeing this deal come to fruition. The mortgage was part of the promissory estoppel. You know, I find it difficult to understand how now the mortgage can be pulled out of that and people are telling me that that deal never existed. It did. It was there. It was happening.

HIS HONOUR: These matters were, I think, canvassed in the Full Court. You have been sitting in the Court this afternoon, I think, and maybe even this morning whilst the special leave applications have been heard.

MRS CATLIN: No, your Honour, I did not hear that.

MR CATLIN: Just this afternoon, sir.

HIS HONOUR: I think you were sitting there when I was sitting with Justices Gaudron and Gummow earlier this afternoon and you were sitting at the back of the Court.

MRS CATLIN: No, sir, I was not. We came in at the latter part - - -

MR CATLIN: Yes, we were. We were.

MRS CATLIN: Was I?

MR CATLIN: Just now.

MRS CATLIN: Just now, yes, sorry. I am sorry.

HIS HONOUR: And if you had been there you would see that it is a very difficult thing to get special leave because you have to show something special about your case.

MRS CATLIN: I can understand that, sir.

HIS HONOUR: That is simply because we are only seven people and we have to deal with a whole range of matters, including important constitutional and other questions. So, what you have to really show, as the cases indicate, is that there is something special and exceptional. Now, the problem for you, from that point of view is that you have had two goes in the Full Court of the Federal Court to get a stay and that court has gone through the issues and it has a discretion to grant a stay and, generally, if there is something in the matter they would grant a stay just for sufficient time to allow you to bring the matter to this Court and let this Court deal with the issue. However, for the reasons that Justice Murray has indicated, they did not believe that there was a proper foundation for that to be done.

MRS CATLIN: Your Honour, may I say that I feel that the Full Court, as did Master Bredmeyer, looked at this deal as an offer and a proposal. They did not look at it as a deal. There was no factual information that was gained from this. We had the sworn affidavits in both courts and at no time did anyone seek to find out "is this deal happening". There was no discussion with the solicitors for the Bank to inquire if Mr Mark Murrell was available to produce a document to say, "No, I never did that with the Catlins" or, "Yes, I did do that with the Catlins".

HIS HONOUR: But the problem is that you are the one that is seeking the relief. It is you and your husband who are seeking the relief from the effect of the mortgage which you executed, therefore, the burden of proving the basis of the relief is on you and if you - - -

MRS CATLIN: I understand that, your Honour.

HIS HONOUR: You can make an assertion but if you do not prove it to the satisfaction of the Master then you have lost on that issue, so that what the Full Court appears to have said is that they could not see that you had any real prospects of winning on that point and, therefore, it was futile to give you a stay because they did not think you had any prospects of success.

MRS CATLIN: Your Honour, they kept referring to this as a proposal. This is what they told us in the court: it was a compromise proposal.

HIS HONOUR: I think that is the Bank's case. The Bank does not agree that there was an agreement. The Bank says that this was simply toing and froing.

MRS CATLIN: Your Honour, the Bank has never said this under oath. They have never come forward and said, "No, that did not exist" or, "Yes, that did exist". They have never been asked, "Did this exist?" or, "Did this not exist?"

HIS HONOUR: They are taking, presumably, the point that the onus of establishing this is upon you or was upon you before the Master.

MRS CATLIN: Your Honour, if we have sworn affidavits in the Court saying that this is what happened - should we go out and seek Mark Murrell ourselves and bring him to the Court so that he can then say, "Yes, this deal was alive"?

HIS HONOUR: We will hear what Ms Cahill has to say about that but as I understand it the Bank's case is that this was simply negotiation and that is not uncommon in cases of this kind.

MRS CATLIN: This was not negotiation, your Honour, this was a deal and it was a deal with an offer - - -

HIS HONOUR: That is the issue - it is a question. We will hear what Ms Cahill has to say about that, in due course. You continue, and I think it will be more efficient if you present what you say is your case and then Ms Cahill can present the bank's case and then we will proceed to the conclusion of the matter.

MRS CATLIN: Okay, your Honour. What I would like to bring up is in the Master Bredmeyer summations he actually made a comment on page 14 of summations of 2002 WASC 103. He made a comment the amount of time we were given to come up with the money on Friday, 13 of that day "was ridiculously short". It concerns me as to why Master Bredmeyer made that comment. Was he actually looking at it as some factual information that he chose to ignore? There had to be a reason why he said this "was ridiculously short".

We were given no opportunity to produce that money to the Bank on that morning because of the lateness in the afternoon and the fact that it is mentioned in this particular summations and also that it was a compromise offer. We find that very difficult to understand and I do know what you are saying, your Honour, but had we walked into the Bank with a cheque for $500,000 are you telling me they would have said, "No, Adrienne, there is no deal here". I do not think.

HIS HONOUR: I do not know. That did not happen, so that is speculation.

MRS CATLIN: It nearly happened, your Honour, but because the Bank took the café away that stopped everything from happening and under the terms and conditions of what a promissory estoppel is, and as I read it to what I understand it to be, the plaintiff assumed that a particular legal relationship then existed between the parties, expected that a particular legal relationship would exist between them and in the latter case that the defendant would not be free to withdraw from the expected legal relationship.

These are actually what Justice Brennan said were critical elements for a promissory estoppel. The No 2: The defendant induced that the assumption or expectation. The plaintiff acts or abstains from acting in reliance on the assumption or expectation. The defendant knew or intended him to do so. The plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled and the defendant has failed to act to avoid that detriment. The fact that there was a deal to our understanding - and we assume and we will continue to protest this - had the Bank decided at any point along that time that they chose that they did not want to do this, I feel that there should have been a time limit given to us and said, "Look, I'm sorry, Adrienne and Adrian, you have seven days to produce this amount. If you do not come up with this money, then the deal is off". We would then accept it and we would not be standing here arguing it today.

But the Bank did not do that. The Bank constantly helped us. They gave us statements, they encouraged us to continue and do work. We were doing outside catering that we normally would not have done because of the pressure that we were under, but we were all working together to bring this deal to fruition and that is why I am so strong on the fact that this was a deal, it was alive. The Bank had said all they were interested in was getting the money. We were interested in getting our life back and that is how we put it all together. Reading promissory estoppel, it has all the criteria. When they took the café away from us on that Friday the 13^th, that ended anything that we were able to do to raise the money to give it to the Bank. They caused us enormous detriment by doing that. Not only was it enormous detriment, your Honour, there was no time allowed for us to do anything. There was no pre-warning that anything was going to happen.

The promissory estoppel is my argument with the High Court and I feel that the Full Court overlooked it because they constantly said to us that it was a compromised offer. I feel that Master Bredmeyer perhaps in his situation should have been very satisfied that there was no defence from us before he actually issued summary judgment. I do not feel that he actually looked into that enough. To us there were factual issues that are happening. Is it really up to a Master to decide on factual issues? If there was something that Master Bredmeyer was unsure of, should it have gone to a trial judge so that we could have brought it up in front of a trial judge?

HIS HONOUR: No, a Master in exercising the Master's jurisdiction can certainly resolve factual issues and in that respect is in the same position as a judge of the Supreme Court. So long as the Master has jurisdiction over the matter, as Master Bredmeyer did, he is in the position of a judge. He has to decide the matter from beginning to end and, indeed, is obliged to do so.

MRS CATLIN: I find that the Master was wrong, your Honour. I think he misunderstood what we were saying.

HIS HONOUR: I realise you say that and you do have an appeal to the Full Court against the Master's decision.

MRS CATLIN: We also need to discuss that, your Honour, because we do actually have an appeal and it is live, but this morning we had to actually appear in front of the chambers in front of Master Chapman. The application that we had before him was an extension of time because our time for the appeal has actually overlapped. There are a number of issues as to why this has happened but it was brought before Master Chapman. He denied us the opportunity to the extra time to enter our appeal, so what we are actually now doing is because our appeal is still alive and we do wish this to be heard, we will be applying to the Full Court to extend the time for entry at the same time as the appeal. Therefore, we do still seek a stay, otherwise we feel that the appeal will be fruitless.

HIS HONOUR: Yes, very well. Is there anything else that you wish to say or any aspect of the long affidavit that you want to draw my notice to especially that is relevant - either you or your husband?

MRS CATLIN: I feel that the promissory estoppel is the main argument, your Honour. We were denied something that was alive and well and being worked towards and it was taken away without any notification. Under the terms of promissory estoppel, that does not work that way. You need to be told that this is not happening. If the Bank did not want us to feel that we had a deal, they should have come to us and said, "Adrienne and Adrian, I'm sorry, that doesn't exist".

HIS HONOUR: The complaint about the breach of natural justice relates, as I understand it, to the fact that the Master received submissions from the respondent after the hearing was completed.

MRS CATLIN: That is correct, your Honour.

HIS HONOUR: That does not seem to be much of an argument really. Courts nowadays are not in the Dickensian era. We do show a bit of flexibility, and you are up before the Full Court asking for a bit of flexibility yourself, so it does not seem to be much of an argument. Correct me if I am wrong.

MRS CATLIN: Your Honour, we are learning as we go.

MR CATLIN: Sir, can I just make a comment on that?

HIS HONOUR: Yes.

MR CATLIN: The letter that was sent was sent on the very day that the Master was supposed to have given the judgment. The date was the 12^th, if my memory is correct. We got a fax from the Master saying that he would delay his judgment for one week. I understand the flexibility, but to send a letter on the day that the judgment was supposed to be given outlining a number of cases to me - I did not think that was right.

HIS HONOUR: Were you given a chance to respond to the submissions?

MR CATLIN: No, we were not, and that was our - - -

HIS HONOUR: They were your response to your issues, were they? The Bank's late submissions were responding to your issues?

MR CATLIN: That is correct, but three weeks after we had sent ours in and on the very day that the Master was supposed to be giving the order. It just seemed to me to be - that is not the correct procedures. I understand flexibility but that seems to me to be a little bit beyond that.

HIS HONOUR: Order 14 of the Supreme Court Rules, the breach of that in the receipt of the evidence of a letter of 7 December 1999, that does not seem to be a very strong argument.

MR CATLIN: Once again, your Honour, there was a situation that we had a preliminary hearing for our criminal case and, as has been established via that preliminary hearing, there is a number of - the agents of the Banks were well and truly aware that in their eyes there was a criminal act going on and yet we submitted a letter that we - - -

HIS HONOUR: You had better be careful what you say about this, please.

MRS CATLIN: Your Honour, they have stated this in their statements.

MR CATLIN: This is one of the problems. This is the very fact that we talk about as far as the right to remain silent.

HIS HONOUR: Well, that is true but you are the one who is seeking a benefit from the Court, you see.

MRS CATLIN: This actual letter was dictated to us with the help of the National Australia Bank. It was in the very early days of when we discovered that there was an issue. They asked us to submit a letter to them advising them of how we were going to repay the debt. They gave us the figures. Those figures have never actually been justified to this day. We put the letter together, we sent it to the National Australia Bank. That letter was actually handed up in the court under Master Bredmeyer and I think, if I remember correctly, the Master's words were, "Well, you can't deny this because it has your name all over it", and we said, "Yes, it does but we don't want that letter handed up. That's not what we want in this particular case. That has to do with the criminal case". But the Master would not listen to that.

HIS HONOUR: What does Order 14 of the Supreme Court Rules say? Is that in the compilation of documents? I come from another part of Australia and I do not carry around the Supreme Court Rules in my head, fortunately.

MR CATLIN: We have not got our copy either, your Honour.

HIS HONOUR: Just tell me roughly what it says. I think you have a copy now. Read out the rule if you would. Which rule is it? It is Order 14, rule what? Which is the paragraph?

MR CATLIN: Your Honour, you are relating it from where, please, so that I can - - -

MRS CATLIN: Yes, Order 14:

Where in an action to which this Order applies a statement of claim has been served on the defendant and that defendant has entered into an appearance, the plaintiff may, on the ground that that defendant has no defence to a claim included in the writ, or to a particular part of such claim -

Actually, your Honour, can I just have a few seconds to look at this?

HIS HONOUR: Order 14 is the Rules of the Supreme Court of Western Australia governing summary judgment, is it?

MRS CATLIN: That is right, but there is a number of them, your Honour, and this is not the ones we got them off.

HIS HONOUR: What is the breach of the rule that you are complaining about?

MRS CATLIN:

(1) An application under Rule 1 shall be made by summons supported by an affidavit verifying the facts of which the claim or the part of the claim to which the application relates is based, and stating that in the deponent's belief there is no defence to that claim or part thereof, as the case may be, or no defence except as to the amount of any damages claimed.

HIS HONOUR: What is the paragraph number on the side of it?

MRS CATLIN: That says paragraph 14 2, your Honour. Our objection to that was actually that the letter was handed up in the court. It was not attached to an affidavit and we said that we did not want it but it was still tendered because of the criminal proceedings.

HIS HONOUR: Yes, but I think that is the aspect that we discussed earlier that I explained to you that, as you were seeking to counter the summary judgment, which itself was relying upon the mortgage which you had executed, you had to put some basis before the Master on which he could give you some relief from the summary judgment which on the face of the mortgage seemed necessarily to follow as a matter of law.

MRS CATLIN: Your Honour, that particular letter was used against us a bit later by the solicitors when they said that we had admitted to the debt, which is incorrect as well. So therefore, we did have reason to object to that letter.

HIS HONOUR: Very well, but the main matter you want to argue relates to the promissory estoppel issue, is it?

MRS CATLIN: It does, your Honour.

HIS HONOUR: Yes, very well. Is there anything else that you want to say, Mrs Catlin?

MRS CATLIN: I ask that I could come back after Mrs Cahill if that is okay if I have something to say.

HIS HONOUR: Yes, you have a right of reply. Take notes about what she says and then you can reply. Is there anything else you wish to say at this stage, Mr Catlin?

MR CATLIN: Yes, your Honour, now that you have - I would like to bring up the issue of - - -

HIS HONOUR: Just steer clear of the criminal proceedings if you would.

MR CATLIN: I will be, your Honour. I believe that the default notice that was issued to us had a guarantee placed in that. It was part of the mortgage.

HIS HONOUR: This was over the business running the café?

MR CATLIN: That is right. There was a guarantee by us as directors under the mortgage against a business loan. That business loan was paid out by the sale of the café, which to our way of reasoning makes that guarantee expunge once it is paid out. What has happened is that the guarantee was then used against an account which again is the subject of a criminal case. So the Bank has used this $50,000 guarantee, has paid off the loan, then taken that guarantee and put it against another account, which is the café account which is subject to the criminal case.

There has been no proof of that debt, and again that is the subject of what will happen in the criminal court, so we cannot defend it. We can say that we do not owe that money but the Master and the Full Bench has once again in their summation said that we did not deny the debt but we cannot prove that the debt exists or does not. We cannot prove that because it is the subject of the criminal action. So I believe that the initial default notices that were handed to us are incorrect.

HIS HONOUR: Have you completed what you want to say at this stage?

MR CATLIN: Yes, sir, I have.

HIS HONOUR: Both of you should take notes of what Ms Cahill says and then you will have a right of reply. Yes, Ms Cahill.

MS CAHILL: It is important, your Honour, to remember the context of this application for a stay of execution, which is an application for stay pending the hearing of an application for special leave to appeal. The respondent accepts that the utility of the application for special leave and any appeal that might follow from that would be effectively lost if a stay were not granted here. This is an order for possession of what we understand - I do not think it is in dispute - is the applicants' home.

But the point of course that we are at is that the application for a stay of execution is being made before the Court has had an opportunity to consider the application for special leave and rule upon it. The authorities, in my submission, are quite clear that it would be exceptional for the Court to grant the stay and that there is a stringent standard that is brought to bear in determining this application for a stay, the most essential feature of which or the most relevant feature of which is that one must consider whether or not there are substantial prospects of the application for special leave succeeding.

We say the first point to bear in mind generally in determining whether there are substantial prospects is that this application for special leave to appeal concerns what is effectively an interlocutory decision of the Full Court insofar as the Full Court's decision concerned an application for stay of execution itself pending an appeal proper to that court. It involves, secondly, private rights between parties. There is no wider public issue. Of course, as Mrs Catlin has identified, a real difficulty for the applicants but which is relevant is that this morning the Supreme Court refused an extension of time within which to enter the Full Court appeal which - - -

HIS HONOUR: I am told that is the subject in turn of a third application to the Full Court.

MS CAHILL: Presumably it will be. I am not sure, your Honour, whether or not the applicants have in fact instituted that, given that it is - - -

HIS HONOUR: That was only this morning.

MS CAHILL: Yes.

HIS HONOUR: I suppose you would be entitled to say that the Full Court having refused relief on two occasions, that the same considerations that were relevant to their refusal of relief on the first two occasions might be thought by them to be relevant to whether they should extend the agony by providing relief against the time default.

MS CAHILL: Indeed, your Honour. The Full Court decision, it is quite clear, the one of 16 August, insofar as the court recognised that the utility of the appeal would be lost if a stay were not granted, but refused the stay entirely on the basis that it found there were no arguable prospects for the appeal, having reviewed extensively the affidavit material that was before the court on the summary judgment application at first instance. Of course, the issue of the prospects of the appeal will be equally as relevant, in my submission, to any application for leave which the applicants make to the Full Court for leave to appeal from the Master's decision in refusing to extend time for entry. We say, your Honour, that it is inevitable that, given the Full Court's view of the prospects of success on the appeal proper, that the extension of time would not be granted. We say that that is a relevant matter for your Honour to take into consideration in determining the prospects of the application for special leave to appeal.

More specifically, your Honour, moving away from those general points, in considering the prospects of the application for special leave before this Court, it is clear from the Full Court's decision that it applied uncontroversial principles of law both in relation to the application for a stay and the way in which it treated the application for summary judgment. Certainly the applicants identify no error in the Full Court's reasoning in that regard.

HIS HONOUR: They do attack the decision in relation to the promissory estoppel.

MS CAHILL: Yes. Of course, your Honour, we say the pertinent point of that is it is a complaint about the findings of fact which the Full Court made and that attends the efficacy of the application for special leave and whether or not it would be likely to be granted. Can I very briefly touch upon the specific issue which seemed to be the - - -

HIS HONOUR: Where did the Master make a finding in relation to the issue of promissory estoppel, if anywhere?

MS CAHILL: At page 14 of Master Bredmeyer's decision.

HIS HONOUR: Which paragraph of his reasons?

MS CAHILL: I am sorry, page 11 of Master Bredmeyer's reasons.

HIS HONOUR: Which paragraph?

MS CAHILL: The Master's reasons in relation to the alleged compromise arrangement commence at paragraph 22 of page 12 and continue on through to the bottom of page 13, concluding at the top of page 14. Your Honour, it is important to appreciate the evidence that is before your Honour as to this alleged compromise arrangement. It appears in the affidavit of Mr Catlin at page 11 paragraph 61. Mr Catlin says:

On the 19^th June 2000, my wife telephone Mark Murrell of the plaintiff in Perth to discuss what was happening about our business and a proposal to refinance. I am informed by her and verily believe that Mark Murrell agreed to a settlement of $500,000. Annexed hereto and marked "AC 12" is a copy of a fax from our solicitors Arns & Associates dated the 30^th June 2000.

So coming later. It is to be pointed out that this paragraph expresses rather ambiguously where this settlement agreement might have been achieved, whether in the context of the telephone conversation or subsequently in the document that is annexed to the affidavit.

When one goes to that document at page 52 of the affidavit - it is annexure "AC 12", your Honour - we say that it is on the basis of this document that both Master Bredmeyer at first instance and the Full Court found the basis for finding that the allegation of a compromise arrangement had simply not been made out by the applicants. This is a without prejudice letter postdating the telephone conversation of - - -

HIS HONOUR: This is to Indiran Rajadurai. Who are they - solicitors for whom?

MS CAHILL: As I understand it, that is a person involved in the receivership of the applicants' café business. Importantly, your Honour, this is the document relied upon by the applicants to support their allegation of a compromise arrangement.

HIS HONOUR: This is not a letter from the Bank?

MS CAHILL: No, it is a letter from the applicants' solicitors at the time, and that is why it is so important, we say, when one has a look at the fourth paragraph on the first page where it is said:

On the basis of the tentative approvals provided by -

and certain entities are nominated there -

my clients are confident of their ability to put a firm proposal to the National Australia Bank by which its liability to the bank is entirely discharged upon payment of an amount of $500,000.00. That offer will be - - -

HIS HONOUR: That does not talk of the agreement of the Bank; it is related to a firm proposal by the present applicants to the Bank.

MS CAHILL: And it is not in itself a firm offer; it contemplates a firm offer. That is made clear over the page, your Honour, in the final paragraph of the letter where it is said:

Would you please advise whether your client is prepared to extend time . . . to allow my clients the time they require to finalise the arrangements that they need to put a firm offer to the bank.

Of course, we say that demonstrably proves that there was no deal, as Mrs Catlin has put to your Honour this morning, at a point earlier in time on 21 June. So on that basis alone, we say that there was obviously sufficient evidence before both Master Bredmeyer at first instance and the Full Court which would have permitted them to conclude without error that there was no arguable defence based on promissory estoppel founded on an alleged compromise arrangement, as asserted by the applicants.

Your Honour, I am not sure to what extent you might wish me to address the further specific points that Mr and Mrs Catlin raised. The position with the exchange of submissions subsequent to hearing before Master Bredmeyer was simply this. The record, together with the affidavit of Mr Catlin, shows that the applicants put forward a letter to Master Bredmeyer copied to the solicitors for the respondent subsequent to the hearing and that precipitated a further responding piece of correspondence from the respondent's solicitors on 12 April 2002.

The handing down of Master Bredmeyer's judgment had been listed for 12 April but it did not occur on that day. Master Bredmeyer's decision was delivered on 3 May. We say that it is simply - - -

HIS HONOUR: Was it open to the applicants to put in any written submissions in reply?

MS CAHILL: I am not sure that Master Bredmeyer invited them to do so, but certainly there was - - -

HIS HONOUR: He had invited written submissions from both parties, had he?

MS CAHILL: I do not believe he had, your Honour, if I can just say this from the Bar table, because I was not counsel who appeared at the application before Master Bredmeyer, but my understanding is that the applicants simply, subsequent to the hearing and whilst the decision was reserved - - -

HIS HONOUR: They had put in their own written submissions and the Bank replied.

MS CAHILL: Responded to them. There was then a period of a few weeks before Master Bredmeyer's decision was in fact handed down.

HIS HONOUR: I would not worry too much about that issue. It does not seem to be very significant.

MS CAHILL: Your Honour, I think the final point that Mr Catlin raised was in relation to a default notice regarding the café business. I confess I am not entirely clear on the point that Mr Catlin was seeking to make there but of course, the guarantee document for the purposes of the application before you today and demonstrating substantial prospects of success on the application for special leave, the guarantee which he says was expunged by the payment of debts arising from the sale of the café business is not before you on the affidavit material that he has produced. We say that was a typical all moneys guarantee and it certainly held force in relation to the other indebtedness that remained of the applicants.

Essentially we say that that is not a matter that can really - that there is any evidentiary foundation before your Honour today for your Honour to be able to accept the submissions that Mr Catlin makes in that regard. Unless your Honour has any further questions of me, those are the submissions for the Bank.

HIS HONOUR: Thank you, Ms Cahill. Yes, Mr Catlin.

MR CATLIN: Your Honour, in respect to the letter from our solicitors to the receiver - and he says that he was working under instructions. Well, he was not instructed to make the assumption that this was a compromise proposal. He was merely bringing together the legal formalising of that particular deal which - - -

HIS HONOUR: But the point that is being made is that the correspondence falls far short of proving that there was any deal. It was something that you hoped would come to pass but it was still in prospect.

MR CATLIN: Then our contention is that the Bank at that point should have written back and said, "This does not exist".

HIS HONOUR: Maybe that would have been good commercial practice, but they did not and it still remains for you to prove that there was a deal.

MR CATLIN: Certainly, sir.

HIS HONOUR: The letter that you have put before the Court falls far short of that. On the contrary, it indicates that this is just something that you are trying to get together as a proposal which the Bank might accept.

MR CATLIN: So then if further correspondence which is attached to our affidavit showing that we are moving towards the finalisation of that deal and silence from the Bank to accept that that is happening - - -

HIS HONOUR: Normally silence does not prove concurrence. You have to have something affirmative.

MR CATLIN: Okay, your Honour. I am going to hand over to my wife at this issue because she is the one that has done the most study on it.

MRS CATLIN: Your Honour, I am led to believe that under the Act a promissory estoppel, silence is also part of the terminology of acceptance, because the Bank had every opportunity to come back to us at any point and say, "What are you talking about? Why are you sending us these faxes? Why do you keep annoying us? What deal do you refer to?" That never occurred, your Honour.

HIS HONOUR: No, but this is correspondence not with the Bank but with the receiver of the café business.

MRS CATLIN: The receiver?

MR CATLIN: Yes.

HIS HONOUR: So I was told. It says, "(Receiver and Manager Appointed)", so Indiran Rajadurai - - -

MRS CATLIN: Yes, but I corresponded directly to the Bank at all times. I sent my information to the Bank. I also copied the receiver/manager into everything. But my dealings were with Mr Mark Murrell and he was the controller of asset structuring. That is stated in our affidavit, your Honour.

HIS HONOUR: Could I explain to you that I know that many people come to us. Maybe you saw some of the migration cases. People come to the High Court thinking we can fix everything up, but we have to act in accordance with law and proper procedure. I have to tell you it is extremely rare for the Court to become involved in procedural matters, interlocutory matters, practice matters and factual matters just because we just do not have enough time to do all those things, there are just so many thousands of cases every day in courts around Australia.

Basically you want to have the High Court revisit factual matters relating to your dealings with Mr Mark Murrell, and I have to tell you from the seven years that I have sat here that that would be something that would be very, very rare - very rare indeed that the Court would do that. There are too many factual points being decided in courts around Australia every hour of every day. If we started revisiting all the factual questions, we just would not get through the work. That is why there is the special leave gateway. It has to be something, as has been said in the cases, that is special or extraordinary that brings the matter up. I have tried to explain that to you so that you will understand looking at it from my point of view.

MRS CATLIN: Yes, we do, but, your Honour, we also need you to understand that the letter from Mr Arns was something that is obviously part of his training and, being a solicitor, he simply wrote a letter asking for formalisation from the Bank. The Bank was never going to do that. Mr Mark Murrell made that quite obvious to me. All they were interested in doing was getting their money. We actually also have the receiver, but I do not have it here - he has also confirmed that there is a deal on the table. We had him on the stand in the criminal court for the preliminary hearing and he was asked that question and it is actually in our transcripts that he confirmed that the deal was alive.

This was a deal, your Honour. I know it is difficult for you to sit there and I know I keep harping on about this, but we had an offer, we had an acceptance and we had consideration, and they took it away from us by doing what they did without letting us know what was going on and giving us the opportunity to finalise it. We did not just decide one day we are going to go out and earn $500,000 and give it to the Bank and pay them off.

HIS HONOUR: No, I can see that you were in the process of negotiation, but the point is that the Bank says it is not established that they had actually agreed.

MRS CATLIN: We had a reason for it. Your Honour, they did. They agreed to $500,000. Where do I get this figure from? It was the Bank that came up with the figure. They said, "You pay $500,000. We go away, you get on with your life". That was exactly how it was put to me in the 17-minute conversation. It was then confirmed when I flew to Perth to see Mr Murrell. I know I have nothing on paper but the Bank does not give you anything. To this day we still have nothing from the Bank on paper through any of the procedures.

HIS HONOUR: You have already said that. At this stage you are replying to anything that Ms Cahill has said. Is there anything else that she said that you would like to reply to?

MRS CATLIN: Mr Arns's letter was sent purely as a solicitor would to try and formalise something. I have explained my feelings on the promissory estoppel to you. The amount of money that is in discrepancy, it may be best for Adrian to finalise that, but that is all I have to say, your Honour.

HIS HONOUR: Thank you, Mrs Catlin. Yes, Mr Catlin. Is there anything else?

MR CATLIN: The all moneys guaranteed: the Master in his summation in his judgment has highlighted how that particular loan, which was the guarantee, was paid off. So it was the Master that highlighted it, so once that was paid off, then the guarantee was moved to another account. As is stated in the Full Court, they said that could merely be a wrong account number. They do state that in their actual judgment. It is on page 7 paragraph 12:

This is not a matter raised by the grounds of the appeal and, indeed, in argument before us, it appeared that there may be no more to this point than the identification of the wrong account concerned with the business of the café -

It was not a matter of a wrong account. They moved it to a debt that they say exists, which is the subject of the criminal act.

In the criminal proceedings it is the complainant to the fraud squad - there is retribution of - and I am going to have to use round figures here but it is over half a million dollars. We do not know what that half a million dollars is made up of. We do not know whether it relates to the debt of that particular account. So in our way of thinking, there is a double dipping going on because it has not been highlighted to us. But the fact that the guarantee - it is an all moneys guarantee, we have been told, but if you pay that loan off, we never were under the understanding that it would just keep going on and going on, but I contest that you cannot put it against an amount of money that has not been proved.

I just wish to finish with that Justice Parker, when we were before him, did give us leave to change our appeal.

HIS HONOUR: I do not think that is really relevant. That is the detail of what goes on in the Full Court. At the moment we are looking at it from the point of view of the High Court and whether we give you the stay in this Court. Have you said everything that you want to say?

MR CATLIN: Thank you, sir.

HIS HONOUR: This is an application for a stay of orders of the Supreme Court of Western Australia.

The background facts

On or about 19 December 1997 Mr and Mrs Adrian Catlin ("the applicants") gave the National Australia Bank Limited ("the respondent") a mortgage over their home in Karratha in Western Australia. The mortgage was registered on 8 January 1998. On 22 May 2000, the respondent appointed a receiver to a café business that was operated by the applicants. This was done pursuant to the terms of a deed of debenture.

In October 2000 the café business was sold by the receiver and manager who was appointed pursuant to the deed. The applicants complain that the business was sold at an undervalue. The applicants contend, in effect, that the respondent had earlier accepted an offer made by the applicants on 19 June 2000 to compromise the debts owed to the respondent by a payment of $500,000. The respondent, through its legal representatives, has at all times denied that it accepted such an offer. No payment has ever been made by the applicants of the sum which was the subject of the alleged compromise or another sum.

In June 2001, default notices were served by the respondent upon the applicants pursuant to the mortgage over their home. On 18 June 2001, the respondent served a notice to quit on the applicants. On 23 August 2001 the respondent filed a chamber summons for summary judgment. That summons came before Master Bredmeyer in the Supreme Court of Western Australia. The Master considered lengthy affidavits which had been filed by the applicants. However, on 3 May 2002, he gave judgment in favour of the respondent. He ordered that within 32 days the applicants give vacant possession of the property to the respondent and pay the respondent's costs.

Issues in the proposed appeal

On 10 May 2002 the applicants filed a notice of appeal to the Full Court of the Supreme Court of Western Australia against the Master's orders. The grounds of appeal relied on before the Full Court give an indication of the kind of issues the applicants wished to raise before that court. Those issues are relevant to the issues that would arise in this Court in an application for special leave to appeal from the orders of the Supreme Court of Western Australia.

First, the applicants claim that, although they were not legally represented, they had been effectively required to abandon their right to silence in relation to contemporary criminal proceedings that have been brought against them. The applicants objected to having to place before the Master evidence which they were concerned might adversely affect their position in the criminal proceedings. As I explained to the applicants in the course of these proceedings, they were required to give some proper foundation to the Master to secure relief from the consequences to which they had agreed when they entered the mortgage with the respondent. It is true that this put the applicants into something of a quandary. In law, they retained their right to silence in the criminal proceedings. However, unless they provided evidence or some material to the Master, the likelihood was that the Master would not have a foundation upon which to relieve them of the consequences of their default under the mortgage. I do not consider that this first complaint is reasonably arguable.

Secondly, the applicants complain that there had been a breach of the requirements of natural justice in the receipt by the Master of submissions from the respondent after the hearing before the Master had been completed. The Supreme Court record and the affidavit before me show that the applicants themselves filed written submissions after the Master had reserved his decision. I make no criticism of them for doing so. However, when they filed their written submissions, it was natural enough that this would precipitate a response from the respondent. As it happened, the respondent's written submissions in reply were delivered to the Master (with copy to the applicants) on the day before the Master was due to give his decision. His decision was postponed. By inference, the Master delayed the giving of the decision in order to have time to consider the respondent's response to the submissions of the applicants. I see no arguable breach of the rules of natural justice in the course that the Master took.

Thirdly, the applicants complain of the rejection by the Master of a propounded triable issue (and arguable defence) advanced by them. This concerned the circumstances in which the café, in which they had an interest, was disposed of by the receiver and manager. They contend that the receiver and manager should have cleared the secured debt to the respondent but failed to do so. This issue is not, in my opinion, proved or sufficiently proved, in any evidence that is before me in this application. In any case, it would appear to be a side issue or a minor consideration in the litigation between the applicants and the respondent. It is not a point that would be likely to engage the attention of this Court.

Fourthly, the applicants contend that there was a breach of Order 14 rule 14(2) of the Rules of the Supreme Court of Western Australia. These are the Rules governing the practice of that court in the provision of summary judgment, such as had been sought by the respondent against the applicants. The complaint is related to the receipt into evidence by the Master of a letter of 7 December 1999 from the applicants to the respondent. The complaint concerns the suggestion that the receipt of that evidence was unfair and prejudicial to them in the criminal proceedings in which they are engaged. Again, it does not seem to me that this issue loomed very large in the determination of the issues by the Master. I would not regard this point as reasonably arguable.

Fifthly, there is the issue upon which the applicants chiefly relied. This concerned an offer which they said they had made to the respondent in the sum of $500,000 to compromise all of their debts to the respondent. In effect, the applicants said that their offer had been expressly accepted by the respondent, in conversations between the female applicant and Mr Mark Murrell of the respondent. Alternatively, the applicants argued that a promissory estoppel had been established against the respondent to prevent it from relying on any default of the applicants.

This issue was considered on pages 12 to 14 of the Master's reasons. It involves a consideration of the evidence that had been placed before him. That evidence, so far as objective facts were concerned, related to a letter from the then solicitors for the applicants to the receiver and manager of the café business. However, when that letter is examined, it falls short of affirming, so far as such a letter could, that the respondent had agreed to the compromise of $500,000. There is no doubt that such a compromise was being discussed with the respondent. But the letter from the then solicitors for the applicants suggests, in its terms, that no final agreement had been reached. It suggests that no firm offer had been made to that time although an offer was being contemplated. In short, the terms of the letter appear adverse to the submission that an agreement had actually been reached with the respondent which would answer, or estop it from relying on its rights under, the claim on the mortgage.

Applications for a stay are refused by the Supreme Court

On 3 May 2002 the applicant sought a stay of execution of the Master's judgment for possession in favour of the respondent. They first made an application to Master Sanderson. However, he refused to grant a stay. They then applied to the Full Court of the Supreme Court. The application to the Full Court was first heard by Wallwork, Murray and Parker JJ on 19 June 2002. On 16 August 2002, that court delivered its reasons refusing the stay.

A second application was then made by the applicants to the Full Court. This was a prudent course because the first application had sought a stay in defence of the applicants' appeal to the Full Court. When that was refused the applicants sought special leave to appeal to this Court against that refusal. They made their second application to the Full Court for a stay in order to defend the utility of their application to this Court.

On 28 August 2002 the Full Court, in its second decision, refused to provide the stay in respect of the application to this Court. That step was taken on the footing that the Full Court was of the opinion that the matters which the applicants sought to raise did not disclose an arguable case that would attract special leave from this Court.

It is against this background that the applicants have today, unrepresented, appeared before me in Perth seeking the provision by the High Court of the stay which has thrice been refused by the Supreme Court. In the first reasons of the Full Court reference was made to relevant authorities governing relief of the kind sought in the Supreme Court. Those authorities included Inglis v The Commonwealth Trading Bank [1972] HCA 74; (1972) 126 CLR 161 and The Federal Commissioner of Taxation v Myer Emporium Limited [No 1] [1986] HCA 13; (1986) 160 CLR 220.

Principles governing the provision of a stay

It is important to recognise that I do not now have before me the application for special leave itself. That application has not yet been heard by this Court. In the normal course it would be heard later this year or early in 2003. This application, therefore, has to be decided without knowing what a Full Court of this Court would do in disposing of the application for special leave. I am not prejudging the decision of the Full Court if and when the application comes before it.

The applicants fairly point out that, unless they are provided with the stay, the utility of their application to this Court for special leave will be lost. The respondent, through its counsel, has properly accepted that this is the case. The respondent has acknowledged that, unless a stay is now provided, the application for special leave will effectively be rendered otiose.

The principles to be applied by this Court in applications of this kind have been stated in many decisions. Many of those principles are conveniently collected in the decision of Brennan J in Jennings Construction Pty Ltd v Burgundy Royale Investments Pty Ltd [No 1] [1986] HCA 84; (1986) 161 CLR 681 at 684. His Honour there said:

A stay to preserve the subject matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. If an order for a stay is made, the respondent is kept out of the benefit of the order of the Court in which the matter is pending until the hearing of the application for special leave to appeal.

He went on:

In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court's discretion. In each case when the Court is satisfied a stay is required to preserve the subject matter of the litigation, it is relevant to consider - first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the Court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.

Application of the principles to the case

First, I accept for the purpose of this application that the applicants have fully exhausted the steps that were necessary to seek a stay from the Supreme Court of Western Australia. I also accept that a delay in recovering the fruits of the judgment of that court, that would be inherent in an order for a stay, would cause some loss to the respondent. In the nature of things, the losses that would be suffered by the applicants would be greater than the loss to the respondent being the delay of some months in the determination of these proceedings. In this case, the issue therefore comes down, so far as I am concerned, to whether I can say that there are substantial prospects that special leave to appeal will be granted and where the balance of convenience lies.

Secondly, I accept that it is relevant to take into account the serious consequences that would be involved in putting the applicants out of their home. Doing so would have an impact on them that would be harmful to them, both personally and financially. I also accept that the applicants have, by law, an entitlement to seek special leave to appeal to this Court from a judgment of the Supreme Court of a State. That is a valuable right. They have exercised it. In the ordinary course they should have the opportunity of having the Full Court of this Court pass upon their application.

Thirdly, I am not unaware of the fact that the applicants are involved in criminal proceedings. I have no wish to add to their problems in that regard, which problems would doubtless to some extent be compounded if they were put out of their home with the personal and financial consequences that this would cause. However, when I turn to whether the applicants have demonstrated that they enjoy a substantial prospect that special leave will be granted, I cannot conclude that that is the case.

The orders of the Supreme Court of Western Australia are in the nature of procedural orders. They are interlocutory orders. They involve the exercise of discretion on the part of the Master and of the Full Court. These considerations do not mean that special leave would not be granted. However, they are well-recognised categories that make a grant of special leave very doubtful. cf House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505.

In addition, as I have indicated in reviewing the grounds of appeal upon which the applicants have relied, the issues which they contest in the Master's reasons are substantially issues of fact. Most especially they wish to canvass before this Court the suggested mistake by the Master in the determination of the question of promissory estoppel which he decided against them. In its appellate jurisdiction this Court does consider mistakes of fact: State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306 at 311-315 [24]- [33], 327-328 [88]. Sometimes mistakes of fact can have very serious consequences that are gravely unjust to the parties. However, having considered the grounds of appeal which the applicants wish to agitate in the Full Court of the Supreme Court of Western Australia, incidental to the present application for special leave to appeal to this Court, I could not conclude that the grant of special leave in the circumstances is likely. On the contrary, I think it is most unlikely that this Court would intervene in the matter, certainly at this stage.

An additional factor relevant to that consideration is that the problems of the applicants, already substantial, have been further compounded. They have become out of time in the entry of an appearance in their intended appeal to the Full Court. By reason of this fact, they earlier today appeared before Master Chapman to seek an extension of time within which to appeal to the Full Court. The Master denied that application. They are therefore now in the difficult position of applying to the Full Court for an extension of time to keep their appeal to that court alive.

Accordingly, the issue that would be before the High Court would be thrice removed from the merits of the matter. The application would involve a consideration of procedural and discretionary decisions of the Full Court of the Supreme Court of Western Australia. I do not believe that this Court would engage itself in such an issue. It is therefore not necessary for me to consider the final issue of the balance of convenience. However, if it were, the balance of convenience favours refusing the application.

Conclusion and orders

The result is that the application for a stay is refused. The applicants must pay the respondent's costs of the application. I certify for the appearance of counsel in chambers.

The Court will now adjourn.

AT 4.32 PM THE MATTER WAS CONCLUDED