Players Pty Ltd v Clone Pty Ltd & Ors [2006] HCATrans 625 (10 November 2006)

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Players Pty Ltd v Clone Pty Ltd & Ors [2006] HCATrans 625 (10 November 2006)

Last Updated: 22 November 2006

[2006] HCATrans 625

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Adelaide No A16 of 2006

B e t w e e n -

PLAYERS PTY LTD

Applicant

and

CLONE PTY LTD

First Respondent

GREGORY MICHAEL GRIFFIN

Second Respondent

DARREN JOHN CAHILL

Third Respondent

CHRISTOPHER STEPHEN McDERMOTT

Fourth Respondent

Application for special leave to appeal

HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO MELBOURNE

ON FRIDAY, 10 NOVEMBER 2006, AT 9.56 AM

Copyright in the High Court of Australia

__________________

MR R.J. WHITINGTON, QC: May it please the Court, I appear for the applicant. (instructed by Griffin Hilditch)

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friends, MR P.A. McNAMARA, QC and MR A.L. DAL CIN, for the first respondent. (instructed by Grope Hamilton)

MR WHITINGTON: I understand that there is no attendance by the second to fourth respondents and that they do not want to submit oral argument.

HAYNE J: Yes, they filed submitting appearances save as to costs and have filed written submissions on that subject, as I understand.

MR WHITINGTON: Thank you, your Honour.

HAYNE J: Yes, Mr Whitington.

MR WHITINGTON: If the Court pleases, this application raises a very important issue in the administration of justice in South Australia. The appeal from the judgment of Justice Vanstone to the Full Court, as your Honours would appreciate, was governed by section 50 of the Supreme Court Act 1935. Section 50 was amended this year, effective 4 September, but not in any relevant respect.

HAYNE J: Mr Whitington, let it be assumed for the purpose of debate that your construction of the obligation on the Full Court was correct. Where did they fail to comply with that injunction?

MR WHITINGTON: It is principally, your Honour, in the reasons of the Chief Justice at paragraphs 189 and 190 at application book 115. We say this discloses the approach which the Chief Justice took to the decision of the appeal. His Honour said:

The submissions by Mr Whitington, attacking the Judge’s conclusions, were thorough and to the point. But I am not persuaded that the Judge erred. The conclusion that she reached was open to her on the evidence. There was no objective fact that stood in the way of the conclusion that she reached. The mark on P9 and D9 was an objective fact –

it is one that the trial judge called a striking objective fact –

but its origin remained an issue to be decided. The conclusion that her Honour reached is not at all improbable. The matters to which she pointed as being inconsistent with the claim that “NIL” was deleted had considerable force. Her acceptance of the evidence from Clone’s witnesses was another matter to go in the scales.

Her Honour was entitled to rely upon each of the matters upon which she relied. They supported the conclusion that she reached.

But the question, we say interpolating, is what was the conclusion of the Full Court on a review.

To acknowledge that Mr Whitington advanced a solid argument for the contrary conclusion does not mean that the conclusion that her Honour reached was wrong.

In other words, his Honour appears to be looking for clear error which is the test on a strict appeal and which is a test that his Honour has applied in another important Full Court decision called Wade, which I will take the Court to in a moment, which predated Fox v Percy. His Honour goes on:

As I have said, I am not persuaded that her Honour erred.

So he is looking to be persuaded that her Honour was wrong. We accept that in the Coal & Allied Case this Court said that any appeal was.....an error must be found, but that must be seen in the light of Fox v Percy which addresses the process by which error is identified. So you do not start by looking for error in the rehearing, you start by rehearing. If the conclusion is error, then the power to make some different order on appeal is invoked. His Honour in a different context in his reasons, not a context directly relevant for present purposes, indicated the same approach. That is at application book 103, paragraph 109.

His Honour there in three places, in effect, says that he has to be persuaded that the trial judge was wrong. Justice Sulan agreed with the Chief Justice without more. Justice Layton agreed with the Chief Justice and the Court has her reasons at application book 121 until 122. Critically, paragraphs 229, 230 and 231 are relevant. At 229 and 230 her Honour appears to embark upon what we say is a proper Fox v Percy-type rehearing and really says, “Looking at the matter afresh I may have differed from the trial judge”, but then she simply says without more at 231:

I am persuaded by the process of reasoning of the Chief Justice as to the effect of the evidence, which supports that the trial judge had a firm basis for her rejection of the evidence of Mr Griffin and Mr McDermott –

and can I stress there, her Honour the trial judge rejected the evidence of Mr Griffin by reference to what she called the inherent probabilities and she listed seven matters. In relation to Mr McDermott, she simply said she found his evidence unpersuasive. Each of them said that the agreement was amended, but it was never suggested to Mr McDermott, for instance, that he was lying. It was never suggested that they had colluded or that their evidence was otherwise than independent. We say that is another important objective fact and that is a matter where we say the Full Court should have, in effect, started afresh.

HAYNE J: How should it have started afresh in a case where the central issue is secondary proof of a written agreement where you have this mark as disclosed – do we find it at page 180 of the application book?

MR WHITINGTON: Yes, your Honour, except the Court will appreciate that this document has been photocopied many times.

HAYNE J: I understand that, but where you have this mark on a document which, as I understand it, your side contends lead to an agreement obliging transfer for consideration.

MR WHITINGTON: Yes.

HAYNE J: What sort of consideration, Mr Whitington, peppercorns?

MR WHITINGTON: We submitted to the trial judge, based on a number of authorities, that consideration there meant by implication fair consideration or fair market consideration and we took her Honour to a number of authorities to that effect.

HAYNE J: But the central issue is one of secondary proof of a written agreement; is that right?

MR WHITINGTON: Yes, your Honour, and a written agreement - - -

HAYNE J: As to which witnesses give evidence?

MR WHITINGTON: Yes.

HAYNE J: What more should the Full Court have done than it did?

MR WHITINGTON: It should have started, with great respect, with the objective evidence which was the document with a mark through it. It should have considered possible explanations. It should have excluded the explanation of a fortuitous machine-made mark because the probabilities against that are so remote as to make it virtually inconceivable. There were no other marks in the same place as indicative of a photocopying blemish. It should have then considered the possibilities that the mark was made by human hand.

Now, his Honour the Chief Justice speculated that the mark might have been made – he did not put it higher than that – as a matter of possibility by human hand after the parties had executed the document. We say that there was really no basis in the case at all to speculate in that way. There was no reason for any party to change the document after it had been executed and, what is more, these copies all emanated from the other side, from their agent. The critical documents both appeared to have the mark.

So we say the suggestion that the mark might have been made by human hand after execution was again so remote as to be inconceivable. That left the possibility it had been made by human hand at a time prior to execution. We say that was the relevant starting point in much the same way as in State Rail Authority the relevant starting point was the objective documentary evidence. Then a witness’ evidence should be tested against the document, as this Court said in State Rail Authority. But, rather than that, first of all, the trial judge started not with the document but with the account of witnesses and then said she found improbable their account that they would have changed the document and that, therefore, left unexplained the striking fact that the document was changed.

The Full Court really went about it the same way but further, in effect, deferred to the findings of the trial judge and required that they be displaced. We say that that demonstrates a fundamental error in appellate approach if section 50 demands an appeal by way of rehearing. I perhaps should tell the Court that the legislative provisions in Western Australia, Victoria and Queensland stand in the same position. In each case, what Chief Justice Mason in Mickelberg called a bare right of appeal without more is given by the legislation. In certain cases, the nature of the appeal is elaborated on in the Rules made under the Supreme Court Acts, but, of course, as the Court well knows, the Rules cannot be used to control the interpretation of the Act. So in those jurisdictions the prime question is raised, what is the nature of the appeal? That is not a matter that has ever been decided by the High Court.

If I could trouble the Court for a moment to go to our book of authorities which I hope has been supplied to the Court. We have another decision of the Full Court at case 5, Wade v Australian Railways Historical Society [2000] SASC 233; 77 SASR 221. I wonder whether I could trouble the Court to go to page 227. There is a passage there in paragraphs 38, 39 and 40 which we say indicates the approach which the Chief Justice at least thought in 2000 was the correct approach to an appeal under section 50.

HAYNE J: That is before Fox v Percy.

MR WHITINGTON: It is before Fox v Percy, yes, but this approach infects, we say, and reflects his Honour’s approach in the present case. That is that his Honour, in effect, still has not shed the vestiges of this approach, but, moreover, as late as August of this year in another decision of the Full Court called Papps, which we footnote in paragraph 1 of our submissions, Justice Gray speaking on behalf of the Full Court said that section 50 had not been the subject of any judicial pronouncement.

So the question still remains, is the Wade approach, is the old approach of Chief Justice Barwick discredited in Warren v Coombes, still the approach which is to be applied under a section such as section 50, or is section 50 and all its other counterpart sections in Victoria, Queensland and Western Australia to be interpreted as if it introduced the notion of a rehearing. Now, that was a matter upon which Chief Justice Mason said something in passing in Mickelberg [1989] HCA 35; 167 CLR 259. The Court has that at tab 12. At page 270 his Honour identified the problem two-thirds of the way down the page, the paragraph that starts:

There is force in the argument that, in the light of contemporary notions of justice, a grant of appellate jurisdiction to a court should be understood as empowering the court, in its discretion, to receive further evidence with a view to determining whether the decision of the court below was erroneous and, if so, what order should be made in its place.

I will pause there. His Honour is talking about the appellate jurisdiction of this Court.

On the other hand, the authorities to which I have referred make it very clear that in 1900 or thereabouts a mere grant of appellate jurisdiction without more would not be understood as carrying with it a power to receive further evidence.

That is, of course, set in a constitutional context and so the considerations might be a little different, but that begs the question whether section 50 and its counterparts around Australia should now be interpreted in the Fox v Percy way, but bearing in mind that Fox v Percy was a decision under the Supreme Court Act (NSW) which, like the Supreme Court Act (Tas), expressly provided that the appeal is by way of rehearing, or whether the strict approach still applies in South Australia. As I say, we say that, first of all, that point has not been decided and that was recognised by the Full Court, as I have said, as late of August of this year. It is a matter, we say, that is important for this Court to consider and - - -

HEYDON J: What do you say about rule 292(1) of the 2006 Rules of the Supreme Court?

MR WHITINGTON: Your Honour, we say that that purports to create an appeal by way of rehearing, but it has been said in our Supreme Court many times that the rule cannot control the statutory jurisdiction - - -

HEYDON J: Yes, but your contention is that section 50 provides to the same effect as rule 292; is that not so? So at least for the future, either way, the Supreme Court will be applying rule 292. Your submissions are really relating to a past period.

MR WHITINGTON: Except for this, your Honour. Section 50, which was altered this year, is still in substantially the same terms. It simply says there shall be an appeal to the Full Court. It says nothing about the nature of the appeal and it leaves that to the Rules. That is the same position in Queensland, Western Australia and Victoria. But there is a lot of authority in our court and, I think, there is also High Court authority that the subordinate legislation or the rule cannot control the interpretation of the constating legislation. So if section 50 merely grants a strict appeal or an appeal of some other description short of a rehearing, then rule 292 cannot amplify the jurisdiction.

HAYNE J: But your central contention is that no such problem arises because the rule accurately reflects the effect of the statute.

MR WHITINGTON: Our central contention is that section 50 does not expressly confer a right of rehearing but that the dictum of Chief Justice Mason in Mickelberg should be applied and that section 50
should be interpreted in a contemporary light and a result will be an appeal by way of rehearing, but that we were not given an appeal by way of rehearing, but that in any event the issue still remains because it is still open to somebody in South Australia – presumably a respondent in whose interests it would be to put this submission – to submit that the rule goes further than the section and that the rule, therefore, is invalid to the extent that it purports to confer a rehearing. So the issue of statutory construction remains and it remains an important aspect of the administration of justice, not just in South Australia, but in the other jurisdictions I have mentioned where the same issue arises.

As I say, that is the fresh old question, we say, which should attract leave and, of course, if we get leave on that point and we satisfy the Court that a rehearing is the appropriate prescription, we will attempt to satisfy the Court that we did not get a rehearing; rather, the Chief Justice adopted the former approach to a strict appeal where he was seeking out clear error and seeking to be persuaded that the reasons of the trial judge should be displaced, a kind of approach identified by Justice Callinan in Fox v Percy as being the wrong approach certainly to a rehearing. Alternatively, if the Court were to find that section 50 confers a strict appeal, we would nonetheless seek to persuade the Court that the Full Court was wrong in any event in not finding clear error in her Honour’s reasons. I think that is all I need to say.

There is just one other matter I should refer to in passing. We have included in our notice of appeal a ground which goes to a separate issue, an issue relating to a consent agreement in October 2003. We would not for a moment suggest that that would attract a grant of leave on its own, but should the Court be minded to grant leave, we would respectfully submit it could be on all grounds agitated in the draft notice of appeal. They are my submissions, if the Court please.

HAYNE J: Yes, thank you, Mr Whitington. We need not trouble you, Mr Walker.

In 1994 the first respondent agreed to lease commercial premises to the applicant. The other respondents to the present application were directors of the applicant. By the agreement for lease the applicant was bound on termination of the lease to transfer certain licences to the first respondent. The central dispute between the parties is whether that transfer was agreed to be “for nil consideration” or was agreed to be “for consideration”.

The written agreement between the parties was not in evidence. Secondary evidence was given of its content and the trial judge concluded that, as the first respondent had contended, the agreement had provided for transfer of the licences for nil consideration. Her Honour concluded that, contrary to the applicant’s contention, the word “nil” had not been struck out.

The applicant seeks special leave to appeal to this Court to challenge that finding of fact. It submits that the Full Court of the Supreme Court of South Australia did not sufficiently examine for itself the correctness of the trial judge’s findings. No question of general principle would conveniently fall for determination if special leave to appeal were granted. In any event, an appeal to this Court would enjoy insufficient prospects of success to warrant a grant of special leave. Special leave is accordingly refused.

MR WALKER: If it please the Court, we have put on a supplementary summary of argument dated - - -

HAYNE J: What form of order for costs do you seek?

MR WALKER: Simply that the applicant and the second, third and fourth respondents pay the costs of the first respondent with respect to the application for special leave to appeal, and for the reasons there set out.

HAYNE J: The second, third and fourth respondents have filed written submissions in answer which we have considered in that respect.

MR WALKER: They have, your Honour.

HAYNE J: There will be an order that the applicant and each of the second, third and fourth respondents pay the first respondent’s costs of the application for special leave.

AT 10.19 AM THE MATTER WAS CONCLUDED