Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance [2009] HCATrans 337 (11 December 2009)

Last Updated: 15 December 2009

[2009] HCATrans 337

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M69 of 2009

B e t w e e n -

MILLER & ASSOCIATES INSURANCE BROKING PTY LTD ACN 089 245 465

Applicant

and

BMW AUSTRALIA FINANCE LIMITED ACN 007 101 715

Respondent

Application for special leave to appeal

KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 11 DECEMBER 2009, AT 1.29 PM

Copyright in the High Court of Australia

MR J.J. GLEESON, SC: If the Court pleases, I appear with MS G. CRAFTI on behalf of the applicant. (instructed by Minter Ellison)

MR M.A. ROBINS: May it please the Court, I appear for the respondent. (instructed by Francis V Gallichio)

KIEFEL J: Yes, Mr Gleeson.

MR GLEESON: If your Honours please. This was an eight-day trial and eight days after it had concluded the trial judge delivered reasons dismissing comprehensively the plaintiff’s claim. His Honour made adverse findings against Reynolds and Jones, and his language moved from bemusement to bewilderment and then disbelief in respect of the evidence and conduct of Reynolds and Jones. His Honour is polite but clear in his rejection of their evidence.

Critical to his Honour’s disposal of the case was his finding that BMW did not believe that the policy was cancellable, only that they were uncertain about that fact, and critical to that was his view of the credit of Reynolds and Jones - - -

KIEFEL J: Were they uncertain about that fact, or at most, the representation was one which might have created uncertainty?

MR GLEESON: It is the former, with respect, your Honour.

KIEFEL J: Right.

MR GLEESON: I might take the opportunity to take your Honour to the four occasions on which the learned trial judge says they were not certain. In the application book, page 12, your Honours will see paragraph 34, and at the mid-point, about line 43, his Honour says:

I do not find that either of them understood the policy to be non-cancellable.

That is a very different thing to finding that they believed it was cancellable. If the two are opposites, one might hold the view as to either opposite, or not have a belief either way, and we know that it was a belief not either way from the concluding sentences of paragraph 34, where his Honour says:

In my view, had they been pressed at the time, they would have truthfully answered an inquiry as to the cancellability of the policy that the policy was an unusual one and that they could not be sure and, further, that it was probably cancellable.

If any confirmation is needed, you will see at paragraph 36, in the second sentence – this is a conversation between Mr Jones and Gina Meth, a few days after the certificate was faxed, and Mr Jones gave evidence that Gina Meth:

asked about the underlying insurance Mr Jones responded, in my view truthfully, that he was not sure, but that he had an invoice or a certificate and, further, that the policy “could be for four properties”.

Then at 41, his Honour refers in the third line to:

the lack of certitude which he confessed to Ms Meth -

Then in the critical finding by his Honour at the conclusion on page 22 of the application book, paragraph 67:

The short answer to this representation allegation is that the HIH certificate, properly understood, did not convey the represented fact. At best, from BMW Finance’s point of view –

I emphasise those words:

it created an uncertainty as to this.

Those words that I emphasised, your Honour, put beyond doubt that it is the former and not the latter. His Honour found that they did not have any certainty as to cancellability. Now, if a person thinks to themselves “I am not sure about this, but I am going to act in a certain way - - -

KIEFEL J: His Honour seemed to think that they were acting on erroneous assumptions which they had created for themselves.

MR GLEESON: Indeed.

KIEFEL J: Your draft notice of appeal commences in grounds 2, 3 and 4 with matters relating to causation.

MR GLEESON: Yes, your Honour.

KIEFEL J: It is not until ground 9 that you get to the representation question.

MR GLEESON: Your Honour, they are inextricably linked and the - - -

KIEFEL J: I would have thought so, because you cannot really determine causation until you determined what was represented.

MR GLEESON: It is a slightly different point, with respect. It is partly what was represented, but there is a finding against us that is not the subject of appeal, that there was misleading deceptive conduct.

KIEFEL J: I was wondering about that because I did not quite understand what was involved in ground 9.

MR GLEESON: Yes, your Honour. The focus of grounds 2, 3, 4 and 5 and ground 9 is not on the content of the representation, but rather what it led to or did not lead to. It did not lead to a belief as to cancellability and so you have these causation points because I took your Honour to what - - -

KIEFEL J: I am sorry, what is 9 meant to convey?

MR GLEESON: Ground 9 is the - - -

KIEFEL J: I mean, a ground that says “the law in relation to representations which are ambiguous” does not really very clearly identify what the ground is.

MR GLEESON: A little ambiguous, your Honour.

KIEFEL J: It is a little ambiguous, yes.

MR GLEESON: I confess that could do with some refinement, but the nub of the point is this, that if a person is left with the belief that what they have been told is ambiguous, they have not been misled.

KIEFEL J: They cannot be reliant.

MR GLEESON: They cannot be reliant.

KIEFEL J: Grounds 2, 3 and 4 expressed, I suppose, following the Court of Appeal, as matters of causation could be also described as causation in the context of reliance. Is that right?

MR GLEESON: Indeed. There are two layers to the causation or reliance point here. Firstly, if they held an erroneous assumption about cancellability, did they hold that because of the misleading conduct, or as his Honour found, because they just swept themselves along in self-serving optimism?

KIEFEL J: Yes.

MR GLEESON: There is a second layer. If they held that belief, did that belief cause them to enter the loan agreement, and his Honour found at that level as well, it did not.

KIEFEL J: There you have probably got an overlap of concepts, but it is reliance that would be the principal amongst them.

MR GLEESON: Indeed.

KIEFEL J: How do you deal - now that you have clarified that you are not appealing in relation to a finding of misleading and deceptive conduct, does it matter that the Court of Appeal appears to have come at that question in different ways?

MR GLEESON: It does not, your Honour, because we do not seek to disturb it. The fact that there is a finding of misleading and deceptive conduct does not strip the ability of the High Court to look at the content of the representation. It is not a complete answer that you then package away and say “that is that.” You bring the content of - - -

KIEFEL J: But you have three judges in the Court of Appeal and the trial judge approaching it in different ways, so on what basis would this Court be asked to deal with it?

MR GLEESON: This Court would, in view of the fact that the finding of misleading conduct is not the subject of challenge - - -

KIEFEL J: But which finding?

MR GLEESON: That the certificate was misleading and deceptive, or likely to mislead and deceive. I think there is that common element to – not the trial judge, he found that it was not.

KIEFEL J: No, Justice of Appeal Ashley found that the - - -

MR GLEESON: That the certificate was misleading and deceptive.

KIEFEL J: But that is the certificate in the context of other conduct. But I thought that the focus of Acting Justice of Appeal Robson’s approach was on a representation by silence, that BMW having asked a question about a policy, it was incumbent upon Millers to make clear to them, to BMW, what it was that was being put forward as the insurance.

MR GLEESON: With respect, no, your Honour. What Acting Justice of Appeal Robson found was that there was misleading and deceptive conduct and he certainly makes reference to silence, but the focus of all three Justices of Appeal was on the certificate.

KIEFEL J: Could you take me to that part of his Honour’s reasons that deals with the certificate?

MR GLEESON: Yes, at application book page 99. His Honour says:

In my opinion, the first issue to be addressed is, did Miller represent to BMW that the insurance was property insurance.

What his Honour says at 155 is:

I accept, as the trial judge appears to have, that the evidence established that . . . they believed that the insurance was property insurance and was cancellable.

That takes me back to my opening point, if we could just distract ourselves for a moment, your Honour. His Honour just misunderstands the fundamental point made by the trial judge when he says there “the trial judge appears, as I have, to accept that their evidence that they believe positively one way”.

KIEFEL J: Where is the representation finding?

MR GLEESON: At 159, his Honour says at the second sentence:

If the certificate did create uncertainty, which I do not accept –

So he reverses the trial judge’s decision without any Fox v Percy analysis –

that was due to the conduct of Miller in failing to inform BMW what it knew of the nature of the insurance as BMW had asked.

The focus of that, of course, is in sending the certificate, but his Honour leaves open the rest of the conduct leading up to December. But what his Honour does, with respect, is he forgets that when the certificate was sent, my client had been told “The loan agreement is done. The deal is done” and they were never disabused of that position. That was common ground. So as for the proposition that - - -

KIEFEL J: The answer to my question is, I suppose, one draws an inference from paragraph 159, is it, that the certificate conveys the nature of the insurance?

MR GLEESON: That seems to be the nub of his Honour’s conclusion.

KIEFEL J: And you accept that?

MR GLEESON: I accept that the certificate was found to be misleading and deceptive, but that it did not mislead or deceive, and his Honour found that. It did not mislead them. I am not misled if I think I am not sure. What is the fact that I am misled about?

KIEFEL J: But you do not dispute that the character or the certificate was that it was capable of misleading and deceiving?

MR GLEESON: That is right.

KIEFEL J: It is just a question of reliance then?

MR GLEESON: It is a question of reliance, but reliance is of course an intensely personal and subjective matter.

KIEFEL J: Yes.

MR GLEESON: His Honour looked at the witnesses and said “I do not accept your evidence that you believed this was cancellable. I think you were at best uncertain”. So it throws up this issue of Fox v Percy but, in our submission, the special leave point can be put this way. Fox v Percy is of course a case about a horse and a Kombi van, a motor vehicle collision. Most of the cases that carry those instructions to intermediate appellate courts about how they might disturb a trial judge’s findings of fact focus on workplace injuries, motor vehicle accidents, the veracity of evidence given by plaintiffs. They do not, and they are arguably ill equipped to deal with a trial judge’s finding about the state of mind of a person, about what they believe.

Now, this trial judge looked at these witnesses over many hours of cross-examination and said “I do not accept you”. It might just be possible for Acting Justice of Appeal Robson to have disturbed that, but not by simply saying, as he did at 171, in the language of the trial judge:

I am not prepared to reject the sworn evidence of Mr Reynolds and Mr Jones - - -

KIEFEL J: Do you say that the majority in the Court of Appeal did not identify an error on the part of the trial judge?

MR GLEESON: I do say that.

KIEFEL J: Could I take you to some of the other grounds of appeal, if I could just ask for your assistance in clarifying what is involved?

MR GLEESON: Yes, your Honour.

KIEFEL J: Proposed ground 5, is this a point which goes to the question of reliance or causation, as you refer - - -

MR GLEESON: It goes to this Fox v Percy point, that one of the key factual findings of his Honour was that when they got the actual policy, he says they reassured themselves – the trial judge – they reassured themselves this was the policy.

KIEFEL J: I think I know the finding that you are referring to. So this is by way of pointing out a matter of evidence or fact that was critical to his Honour’s finding?

MR GLEESON: Indeed, your Honour, one of a couple of pivotal matters of evidence - - -

KIEFEL J: So it is a subset of grounds 2, 3 and 4, really?

MR GLEESON: Yes, your Honour.

KIEFEL J: It is by way of a particular.

MR GLEESON: Yes.

KIEFEL J: Ground 6 is a reference to apportionment?

MR GLEESON: Yes, it is, your Honour, and it is not the strongest ground. I have nothing to say about that today.

KIEFEL J: Do you propose to?

MR GLEESON: Your Honour, I am content, if your Honour is troubled by ground 6, for it not to be the subject of - - -

KIEFEL J: You do not get to it if your principal grounds are made out, do you?

MR GLEESON: That is right, your Honour.

KIEFEL J: What about ground 8, the notice of contention point? Is that seriously to be pursued?

MR GLEESON: Yes, indeed, your Honour. The notice of contention point is ground 10 and - - -

KIEFEL J: I thought it was linked with ground 8 as well. Is that right?

MR GLEESON: It is, but there are points of distinction between the two. Grounds 7 and 8 are the Gould v Vaggelas point. Can you paper over a lack of actual reliance by drawing on the principle of Gould v Vaggelas and saying - - -

KIEFEL J: I see, and that was Justice Neave’s approach?

MR GLEESON: Yes.

KIEFEL J: I see. Thank you.

MR GLEESON: Point 10 is the notice of contention point, and we really say that that could be viewed either as a point of principle, or one of visitation in the general sense. It is inimical to the administration of justice. The words are “administration of justice”. For a Justice of Appeal to simply forget to deal with one of the grounds of defence - - -

KIEFEL J: It often happens depending on how matters are argued. Was the matter pressed?

MR GLEESON: It was pressed in oral and written argument.

KIEFEL J: I see, and the notice of contention point was to the effect that a contract had come into existence, and that is a stand alone point, not as a factor which may have influenced the minds of those affected by the conduct.

MR GLEESON: That is right, your Honour. The plaintiff, BMW, asked the trial judge to put them back in the position if they had not been misled. If they had landed back in that position, it was one where they were contractually bound on their own evidence. His Honour dealt with it in one paragraph, and we say with respect, not adequately, by saying the contract had come to an end, in effect. Of course, the right to sue for damages survives. It is a complete answer in the event that all the other points are wrong, in any event.

Your Honours, just to return to the uncertainty point. As I say, there is overlap. The learned trial judge made the findings. The Court of Appeal disturbed them without adopting the approach compelled of them by Fox v Percy and other cases. But the question of confusion is ripe for

consideration by this Court in the context of private commercial transactions. There is a case of Campomar v Nike from 2000 which deals with confusion or bewilderment in a passing-off case.

KIEFEL J: Yes.

MR GLEESON: That has been picked up four times by this Court since, but our researches indicate there has been no analysis of the role of confusion or bewilderment in a private contractual section 52 case.

KIEFEL J: I suppose it is so highly fact, circumstance dependent, is it not?

MR GLEESON: It is, but as a concept, it is capable of a statement of principle, with respect, and in this Court recently in the Backoffice Investments Case, his Honour the Chief Justice pointed up the differences in concept between public cases, passing-off style of section 52 cases on the one hand and private cases, and that feeds very neatly into this position where a statement of principle in respect of the confused, as distinct from the misled, is ready for determination by the court.

The points of principle, the special leave points, sit harmoniously together. My learned friend, if called upon, I am sure will say it is a fact-rich case. It is a simple fact case. What did they believe? Why did they enter the contract? If the Court pleases.

KIEFEL J: Thank you. Yes, Mr Robins.

MR ROBINS: If your Honours please. Your Honours, there was a significant occurrence in the Court of Appeal that radically changed the complexion of this case. Our learned friends for the applicant, in their submissions to the Court of Appeal, conceded the matter which they again concede on this application, which is set out in their reply summary which is at application book 161, paragraph 4:

The Respondent correctly submits that the Applicant accepted that policy cancellability was of critical importance to an insurance premium funder and the Applicant knew this.

Given that our learned friends have now confirmed the position that they do not challenge the findings of the Court of Appeal as to there being misleading and deceptive conduct – and we would respectfully submit that that was central to the learned trial judge’s conclusion that Jones and Reynolds were, in effect, on a frolic of their own carelessness in concluding that the policy was probably cancellable – once one puts into the mill that concession and that finding of misleading and deceptive conduct, which is not the subject of any challenge by this application, with respect we would submit not only does the appeal become hopeless, with respect, it exposes the fact that neither is this a proper vehicle, but nor does it produce or truly present any special leave points, in our respectful submission.

BELL J: In the circumstances of that concession, what do you say to Justice Ashley’s point that an appropriate course may have been the remitter rather than have the court consider the critical issue of causation which it might be thought on these facts was a lively issue?

MR ROBINS: Yes, that was certainly a course that was open to the Court of Appeal. The approach preferred by Justice of Appeal Neave and Acting Justice of Appeal Robson was of course, to decide the question of causation and, with respect, their Honours were correct to do so on the material for a number of reasons. Firstly, we would say, it was significant that although the applicant had pleaded positive defences below, and in particular that there was an explicit conversation between Mr Jones and Mr Dick of the applicant, to the effect at the time of the October 2000 cancellation, that one of the reasons BMW was not proceeding with the loan was because the policy was not cancellable.

That conversation was put by our learned friends to Mr Jones during cross-examination, but no evidence was called for Mr Dick at all. A similar conversation was asserted in respect of Mr Merton. No evidence was called for Mr Merton at all. Our learned friend again referred to his Honour’s reference to the conversation between Mr Jones and Ms Meth. Ms Meth was a person named on the applicant’s list of witnesses for trial and was indeed subject to a subpoena, but she was not called either.

We respectfully submit that when one looks at the totality of the evidence, and in particular when one looks at what we would say was the fundamentally erroneous finding of the learned trial judge at judgment paragraphs 55 and 56 – I will come to that in a moment – this was a proper case which invited the Court of Appeal to consider causation. We respectfully submit that on the basis of the evidence that was not only in documentary form but in transcript form, the Court of Appeal was entitled to arrive at the conclusion that the majority did.

Let me take your Honours to paragraphs 55 and 56 of the learned trial judge’s judgment. Perhaps before I do that, I will take your Honours back to paragraph 34 of the judgment, because we say with respect to our learned friends, it is mischaracterisation of the learned trial judge’s conclusion to say that he found there to be a belief that the certificate was ambiguous, or the insurance position was ambiguous. His Honour’s closing remarks at the top of application book 13 make clear that his Honour accepted that both Jones and Reynolds believed that the policy was “probably cancellable”. As I have already said to your Honours, his Honour’s conclusion, that was - - -

KIEFEL J: That is a reference to their belief that at paragraph 67 – I think is the reference to it - at best the certificate creates an uncertainty.

MR ROBINS: Yes, but with great respect to our learned friends, now that they have conceded the findings made by the Court of Appeal, that finding in paragraph 67 becomes of very questionable assistance to the Court. What we respectfully submit the learned trial judge erred upon was the finding that he made in paragraphs 55 and 56 that somehow Mr Jones and Mr Reynolds reassured themselves as to the HIH certificate on the basis of the policy in the bundle. We have set out our criticism of that in longhand in our written submissions, but I will try your Honours’ patience just to hammer the points again.

It was common ground that the two documents bore different policy numbers. It was common ground that they had different parties, albeit with some overlap. It was common ground that whilst it referred to similar properties, they were different references. It was common ground that the term of the policy in the bundle, as opposed to the certificate, was different. The bundle provided for 60 months from the date of first advance, the HIH certificate provided for a fixed term.

KIEFEL J: Was the - what impression was gained from what was in the bundle important to any of the justices on the Court of Appeal?

MR ROBINS: Yes, your Honour. The bundle was found both by the trial judge and by the justices in the Court of Appeal as going to the financial soundness of the borrower - - -

KIEFEL J: Yes, but in relation to reliance on representation.

MR ROBINS: Yes. Can I take your Honour to paragraphs 167 and 168 of Acting Justice of Appeal Robson’s decision, and it is really paragraph 168, although 167 does lead into it:

The trial judge found that the brief examination of page 9 of the cost of production policy in the bundle . . . reassured [Mr Reynolds and Mr Jones] that it was the same policy as that referred to in the HIH certificate without noting the different policy number and the other differences . . . The trial judge earlier noted that ‘it was agreed before me that, notwithstanding the different policy number, this was in fact the policy referred to in the HIH certificate.’

Your Honour will see that is in paragraph 53 of the trial judge’s judgment.

KIEFEL J: So it is a reassurance? That is the point.

MR ROBINS: Yes.

KIEFEL J: So this stands in contrast to the trial judge’s findings?

MR ROBINS: Yes, and we respectfully say it is a clear overruling of an important conclusion by the trial judge and with great - - -

KIEFEL J: Where is the error in it? Where does his Honour identify the error in the trial judge’s approach in that regard?

MR ROBINS: That is in part of paragraph 167, and we say it really emerges from the totality of the judgments of both Justices Neave and Acting Justice of Appeal Robson. It was accepted at trial and on appeal that there was no explanation of the policy in the bundle. It was not seriously put to either of the witnesses at trial, and we provided your Honours with the relevant transcript, that a reasonable reader of the policy in the bundle and the HIH certificate could possibly have connected the two. Each of the two witnesses clearly, without any qualification, expressed evidence that they never connected the two. What they each believed was that that policy in the bundle was part of the financial information that they had actually requested, and with respect that was an irresistibly reasonable and appropriate conclusion.

When one looks at his Honour’s findings, the learned trial judge’s finding at paragraph 56, with respect, that was just simply not open to his Honour, either on the evidence or on the simple document themselves. It is really at application book 20 at about line 21:

Their brief examination of this page reassured them that it was the same policy as that referred to in the HIH certificate without noting the different policy number and the other differences which a more careful and interested reading might have disclosed.

With respect, there was no evidence to support that. We, in effect, challenged our learned friends on appeal to address the Court of Appeal as to any evidence that they were likely to support that. They never supported that. We repeated that challenge in our summary in this Court, and again our learned friends have not deigned to take the Court to any transcript or documentary evidence that would support that finding. We have put the proof in the pudding, in the terms of the transcript we have identified, which with respect, fairly covers both our learned friend’s cross-examination, the evidence-in-chief and, indeed, questions of his Honour during the running of the two witnesses.

When we come to Fox v Percy, which is where this case really heads, we say a number of things. Acting Justice of Appeal Robson expressly addressed Fox v Percy. Justice of Appeal Neave broadly agreed with Justice Robson, and whilst her Honour did not expressly separately refer to Fox v Percy, we say on a fair reading of her Honour’s judgment, she broadly picked up the principal points of Justice Robson and added some further matters of her Honour’s own conclusion.

If that be right, we submit a number of things. Firstly, given the concession, given the unchallenged finding of misleading and deceptive conduct, this was a proper case for the Court of Appeal to arrive at a different conclusion to the learned trial judge, and in particular we would say that paragraph 56 of the learned trial judge’s judgment, which concludes with the words:

It represents a further disaster on the road to BMW Finance’s ultimate loss -

you take that keystone out of the arch of his Honour’s conclusion, and the edifice, with respect to the learned trial judge, falls down. Can I grapple with another matter that our learned friends - - -

BELL J: There is a fair bit of the edifice left in terms of the trial judge’s findings concerning the reasons that led to the entry into the agreement in December, and they are powerfully put in Justice Ashley’s judgment.

MR ROBINS: With respect, we would say they are equally powerfully addressed in Justice of Appeal Neave’s judgment where her Honour had regard to exactly the same matters which were led in-chief in virtually every instance, if memory serves me, your Honour –and her Honour considered that redounded to the credit of the two men, that they were making frank and proper concessions.

BELL J: But does that not tend to highlight the point that Justice Ashley made, that in a case such as this, where causation had not been considered by the trial judge and given the critical nature of the evidence of Mr Reynolds and Mr Jones, it was perhaps not an appropriate approach for the court to embark on making findings which really did turn on considerations of credit.

MR ROBINS: If there had not been the concession as to the critical importance of policy cancellability then there may have been great force in Justice Ashley’s preference for remitting the question to the learned trial judge, rather than the Court of Appeal proceeding. We respectfully submit that once one accepts, as both parties did below and before your Honours, that policy cancellability is of critical importance and the applicant knew that, in those circumstances, the court is well equipped to look at the transcript, look at the concessions, and look at the contemporaneous documents which, in contradistinction to Justice Ashley’s conclusion – and I will come to that in a moment – actually supported the honest belief that the trial judge found Jones and Reynolds to have.

KIEFEL J: You cannot really determine reliance in a case like this entirely objectively though, can you, because you have people who are motivated on the trial judge’s findings, motivated by matters such as not disclosing errors and trying to make the best of a bad thing, in the situation they found themselves. So that raises the question, does it not, about whether or not the Court of Appeal should have had regard to the trial judge’s findings?

MR ROBINS: In that context, your Honour, I respectfully submit that the Court of Appeal did pay careful regard to the learned trial judge’s findings, and the difficulty for our learned friends is in their draft notice of appeal – although not in their written submissions, I stress – the draft notice of appeal is at 124 of the application book. Their first ground accepts that there was “no express finding as to causation”. We, with respect, agree that there was no express finding by the trial judge as to causation - - -

KIEFEL J: But there were findings which went some way towards it and the question is whether or not, I suppose, what a Court of Appeal does with it.

MR ROBINS: Your Honour is, of course, quite correct, and our learned friends trying to make a fist of things, provided your Honours with a catalogue of the findings on which they rely in their reply submissions. We respectfully submit that when your Honours – and that is at application book 159, paragraph 1, and they provide factors (a) through (i), and we respectfully submit that none of them are, strictly speaking, demeanour-based findings in relation to causation and to the extent any of them are demeanour-based findings, we would say that at best, paragraphs (d) and (e) on page 160, that:

Mr Jones . . . is not a careful man and he does not have a good understanding of insurance policies.

Paragraph (e), that there was:

a good deal of reconstruction -

Given a trial that is occurring some seven or eight years after the event, with respect, the finding of “good deal of reconstruction” is neutral, but again I come back, your Honours, to paragraph 34 of his Honour’s reasons, which presupposes, as his Honour found, that there was no misleading and deceptive conduct, but when we take that finding out, even so, his Honour found that there was an honest belief that the policy was probably cancellable. I keep coming back to our learned friend’s important and appropriate concession on appeal. His Honour did not have the benefit of that. Justices of Appeal Ashley and Neave and Acting Justice of Appeal Robson did.

So there are a number of courses open. This was a case where no evidence was called by our learned friends below and that does impact, with respect, on causation because if Mr Dick truly did have the conversation that was pleaded with Mr Reynolds, Mr Merton had a similar conversation, or Ms Meth had such conversation, and those were matters that should have been put in evidence.

Her Honour Justice of Appeal Neave was right to pick up Justice Wilson’s cudgel in Gould v Vaggelas to say that there is a shifting onus. Of course my client retained the ultimate burden of proof, but there was an evidentiary shift where there is a matter that Miller could and should have put in evidence, if it seriously wished to challenge the, with respect, credible and well-corroborated testimony of Jones and Reynolds. They elected not to.

That also goes to the notice of contention point, because of course the learned trial judge found at judgment paragraph 70 that, in effect, CTHL demanded its money back, got its money back, then demanded interest on the money and got that too. That all occurred by 17 November, before Mr Merton approached Mr Reynolds later in November or early in December to renegotiate.

We say that at that stage on, with respect, any view of the law, whatever Mr Reynolds and Mr Jones may have believed was the case, any proper legal construction – what had occurred was there was an abrogation or abandonment of the October deal, if such was in fact a binding contract. The borrower had demanded its instalment back with interest. It was totally consistent with it maintaining any ongoing obligation on the part of BMW Finance to advance moneys. So we respectfully say that Justice of Appeal Robson was right to agree with the learned trial judge in that context, and again whilst Justice of Appeal Neave did not expressly address the issue, we respectfully submit that the overall nub of her Honour’s judgment reflected considerable agreement with Acting Justice of Appeal Robson.

My learned friends also grapple with the real problem posed by Henville v Walker, I & L Securities and all of the authorities of this Court and the various intermediate courts that have followed, that they bear a large burden to, in effect, satisfy the court, once there is misleading deceptive conduct, that the sole cause of my client’s loss was the carelessness of Jones and Reynolds. This was a $4 million commercial loan. Our learned friends would have this Court believe that two men, because of a mistake by a junior clerk, were prepared to, in effect, advance $4 million dollars with no security whatsoever in the face of a document, which is now accepted to have been misleading and deceptive. If your Honours please.

KIEFEL J: Anything in reply?

MR GLEESON: Two quick points, your Honour. Much has been made at various stages by our learned friend as to my client’s so-called failure to lead evidence. In fact, it was a decision to refrain from calling evidence because there was no need. Reynolds and Jones made numerous concessions. At the end of their evidence, their case was hopeless, and his Honour found that very quickly and very clearly. There is no need to call witnesses on the question of intent, because it is irrelevant for section 52 purposes. We admitted that the certificate was sent. It was a case about causation and reliance. The certificate spoke for itself. There was a forensic decision made that there was no point calling evidence and the fact that there had been positive matters pleaded does not take the matter anywhere.

My learned friend says, and Justice Robson relied heavily in his Honour’s judgment, on the proposition that cancellability is one of the most important things to a lender and that was a concession apparently made. It was in fact something we embraced, because if cancellability is one of the most important things to a lender, and the evidence established that my client knew the deal had been done, only one possible inference arises – a satisfaction by the broker that the lender has satisfied itself about cancellability. Why should there be this excessive caution on the part of a broker to double check that the lender has ticked all the boxes, when the broker knows the deal has been done?

The second point, it is suggested by my learned friend that it was not put to the witnesses that the policy that they received, the one policy they ever received, was the policy in respect of which they were funding. The short answer is it was, and I will not the burden the Court with taking you to the transcript that is there, but it is acknowledged by his Honour Justice Robson in his judgment at paragraph 118.

The third point is that it is said by my learned friend that these are not demeanour-based findings. Reliance, what a party believed and what caused it to act in a certain way, is the paradigm case of a demeanour-based finding. In the end, you can have all of the surrounding documents and all the supporting evidence you like, but if a trial judge observes a witness say “I believed this was cancellable” and he says “No, I do not think you did. I think that at best you thought it was probably cancellable”, that is a demeanour-based finding, that if the Court of Appeal wished to disturb, there were instructions and clear instructions as to how it needed to go about that task. If the Court pleases.

KIEFEL J: Yes, the matter will be referred. The application for special leave will be referred into a Full Court. Are counsel agreed that the matter will take no more than one day?

MR GLEESON: Yes, your Honour.

MR ROBINS: Yes, your Honour.

KIEFEL J: Thank you. The proposed grounds of appeal - Mr Gleeson, you might take into account the matters which have been discussed today in any redrafting of those proposed grounds.

MR GLEESON: Yes, your Honour.

KIEFEL J: Thank you. The Court will adjourn for a few moments.

AT 2.14 PM THE MATTER WAS CONCLUDED