Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia

1. [1]

   MACFARLAN JA: I agree with Leeming JA’s judgment and add the following observations.

Adjournment of hearing

1. [2]

   For the reasons given by Leeming JA, it is apparent that Mr Neale was well aware when his solicitor was given leave to withdraw at the commencement of the hearing on 3 February 2014 of the possibility of him seeking an adjournment. Mr Neale’s Notice of Motion that came before me on 30 January 2014 sought not only an adjournment of the hearing of his appeal that was fixed for 27 February 2014 but also an adjournment of the Equity Division proceedings that were fixed to commence before Hammerschlag J on 3 February 2014. My ex tempore judgment of 30 January 2014 made it plain to Mr Neale that the making of any such order concerning the Equity Division proceedings was a matter for Hammerschlag J’s consideration ([2014] NSWCA 7 at [2], [11]). Yet Mr Neale did not apply to Hammerschlag J for an adjournment either then or thereafter.

2. [3]

   Some light is shed on Mr Neale’s decision not to seek an adjournment by his reference in court on 3 February 2014 to having received advice from Senior Counsel “not to delay the Court” (Transcript p 8) and his previous statement to the Court (on 22 November 2013), a time at which he was unrepresented, that his then decision to represent himself was a decision that he should have made “years ago” (Transcript p 5).

The sale of Yatala Road

1. [4]

   I add the following to Leeming JA’s reasoning.

2. [5]

   As Mr Neale’s complaint about the sale of Yatala Road was clearly not pleaded or litigated, success for him on appeal depended upon him successfully challenging the primary judge’s refusal of his application to amend his pleadings to include such a complaint.

3. [6]

   Mr Neale’s main argument before this Court was that the primary judge erred in focusing solely on the overarching case that Mr Neale wished to prosecute alleging deliberate denigration of the mortgage securities by the bank, and in not referring to the separate case he sought to advance that the bank had been negligent in relation to the sale. The manner in which Mr Neale put his application for amendment to the primary judge however justified his Honour’s focus on the alleged “deliberate destruction strategy” given that Mr Neale had told his Honour, for example, that he put “his whole case on this basis” and that “if I don’t convince your Honour of those things I will withdraw my case” (Transcript p 236).

4. [7]

   In any event, even if the primary judge erred in not considering the Yatala Road negligence claim separately, refusal of the amendment was inevitable considering the history of the proceedings, including the initial pleading of the negligence claim and its subsequent abandonment, and Mr Neale’s failure to take advantage of many subsequent opportunities to plead the claim in a timely fashion. If the amendment had been allowed, an adjournment would have been required to give the respondents an opportunity to put on evidence to meet it. However, Mr Neale admitted he was insolvent and could not have paid the costs thrown away by such an adjournment. The case would in effect have had to have been restarted despite it being on foot for over two years. In these circumstances, even if the primary judge’s reasons for refusing leave to amend were erroneous in the respect Mr Neale alleged, this Court would not have ordered a new trial as it would not have been satisfied that a “substantial wrong or miscarriage” had resulted from the refusal of the amendment application (Uniform Civil Procedure Rule 51.53(1)).

5. [8]

   WARD JA: I have had the opportunity to read the comprehensive reasons of Leeming JA. I agree, for the reasons his Honour gives, that the appeal should be dismissed with costs.

6. [9]

   LEEMING JA: Mr James Woodward Neale and his company JW Neale Pty Ltd (Receivers and Managers Appointed) were defendants and cross-claimants in proceedings heard over 14 days in the Commercial List against the Commonwealth Bank of Australia (Bank). In 2008 the Bank of Western Australia (Bankwest), which was subsequently acquired by the Bank, had lent some $19,770,000 to Mr Neale and his company. It was common ground at trial that there was a debt of in excess of $22 million.

7. [10]

   There were three properties mortgaged to secure the indebtedness: an industrial property at Yatala Road, Mount Kuring-gai, a property on Fox Valley Road, Wahroonga, and certain parcels of land on Avon Road, Pymble. The last-mentioned adjoined other parcels of land owned by other members of Mr Neale’s family, but the Bank’s security was confined to parcels of land owned by Mr Neale and his company.

8. [11]

   The land at Yatala Road was owned by Mr Neale personally. It was sold by receivers appointed by the Bank on 13 October 2011, before the trial. The other two properties were sold after the trial: Fox Valley Road for $4.7 million in September 2014 and the Avon Road properties for a total of $35.7 million in January 2015.

9. [12]

   Aspects of the sale of Yatala Road were at least superficially troubling. The sale price was $635,000, and Mr Neale claimed that a great deal of the proceeds were used to pay the receivers’ fees. Mr Neale had a roughly contemporaneous written valuation for $3.58 million, based on a rate per square metre derived from sales of nearby properties said to be comparable. The property was passed in at auction, and counsel for the Bank told the primary judge that there had been “the usual negotiating post auction”. The contract for sale was entered on 13 October 2011, shortly before the introduction of an obligation to use reasonable care when exercising a power of sale over land, effected by s 111A of the Conveyancing Act 1919 (NSW) (which, although enacted by the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW), only commenced on 1 November 2011). Mr Neale claimed that there had been a series of inadequacies in the steps taken to prepare the property for sale.

10. [13]

    On the other hand, counsel for the Bank flagged during the hearing that the Bank or its receivers had a Jones Lang Lasalle valuation at $840,000 current value and $630,000 sale value, and asserted that the markedly lower values were attributable to the presence of asbestos on the site. It should also be noted that the proposed sale had been the subject of an unsuccessful application for an interlocutory injunction by Mr Neale (see below).

11. [14]

    As will be seen below, the course taken at trial meant that these matters were not the subject of scrutiny and decision by the court (and the matters referred to in the previous two paragraphs merely reflect the claims made by the parties).

12. [15]

    There was another aspect of the trial which is capable of giving rise to concern. In circumstances described in more detail below, Mr Neale’s solicitor was granted leave to cease acting on the first day of the trial. Thereafter Mr Neale appeared for himself and (with leave) for his company.

13. [16]

    The hearing occupied 14 days by reason of an elaborate cross-claim, which the primary judge dismissed for reasons delivered, promptly, on 24 March 2014: Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 315. Final orders were made on 27 March 2014: Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 750.

14. [17]

    On appeal, Mr Neale and his company were represented by counsel, who abandoned many of the grounds of appeal and submissions which had previously been formulated by Mr Neale personally. So far as I can see, the result was a focus upon the strongest grounds of appeal available to Mr Neale, and an abandonment of grounds formulated before Mr Altan had been retained and which were either hopeless or bordering on hopeless.

15. [18]

    As reformulated there were two principal bases of appeal. The first was a challenge to the decision by the primary judge to permit the solicitor on record to cease to act on the first day of the hearing and to permit the trial to proceed thereafter without an adjournment. The second was the refusal to permit an amendment to plead that the Yatala Road property had been sold at undervalue. Related to this was a complaint that the Bank should have sold the Avon Road property promptly and thereby discharged the whole of the indebtedness.

16. [19]

    It is no small thing to grant leave to a solicitor on the record to cease to act at the outset of heavy commercial litigation, and for that litigation to proceed without representation or an adjournment. It is also no small thing to fail to adjudicate a claim that mortgaged property valued by a registered valuer at $3.58 million was sold on behalf of the Bank for $635,000. However, for the reasons given below, an examination of the course of this litigation demonstrates that no appellable error has been made out in what has occurred. In order to explain why, it is necessary to turn to the procedural history of the litigation and the conduct of the trial in more detail.

The commencement of proceedings and the sale of Yatala Road (June – October 2011)

1. [20]

   The Bank claimed that the facility provided to Mr Neale expired on 28 February 2010. Whether or not that is so was a live issue at trial. Mr Neale contended that it had been extended, or that the Bank should be prevented from claiming that it had not been extended. These issues were resolved in the Bank’s favour, and not re-agitated on appeal.

2. [21]

   Following Mr Neale’s failure to repay in accordance with Bankwest’s demands, receivers (the second and third respondents Messrs Lord and Parbery) were appointed over the Avon Road and Yatala Road properties on 23 June 2011. Mr Neale commenced proceedings on 29 June 2011 seeking orders removing the receivers and restraining them from interfering with the orderly sale of the security properties. The application was heard and dismissed by Bergin CJ in Eq on 1 July 2011. The receivers retained a firm of real estate agents to conduct the sale by auction on 4 October 2011. In the week prior to that auction, Mr Neale sought an injunction preventing the sale, which was heard by Ward J (as her Honour then was) and dismissed on 30 September 2011. No challenge has been brought to either decision. In both applications, Mr Neale acted for himself.

3. [22]

   As noted above, the Yatala Road property was passed in at auction but was sold on 13 October 2011 for $635,000. Shortly thereafter, it appears that Mr Neale obtained a written valuation from Alcorn Lupton & Associates. The valuation was signed by Mr Lupton, who described himself as a registered valuer. It was dated 20 December 2011, and was in the amount of $3,580,000.

December 2011 – March 2012 – the Commercial List proceedings

1. [23]

   Proceedings were commenced by Bankwest on 13 December 2011 in the Commercial List, seeking judgment against Mr Neale and his company in the amount of $22,584,097.37 and an order for possession of the land at Fox Valley Road. Mr Neale and his company filed a commercial list response on 3 February 2012, once again seemingly without legal assistance. The response identified a “limited dispute” and a “wider dispute”. The response stated that the “limited dispute” concerned:

2. [24]

   The “wider dispute” involved a number of serious allegations against the Bank, which included contentions that “CBA arbitrarily reassessed impairment of Bankwest’s loans to 1,100 of their clients, including me, to cause the low purchase price for Bankwest” and that “CBA unconscionably or fraudulently devalued the real estate security for the loans in order to receiver a financial advantage which they would not otherwise receive.” Mr Neale contended that when CBA acquired Bankwest from HBOS in 2008, it “insisted on and got a bad debt indemnity on Bankwest’s loans.” Mr Neale contended that “CBA maximised their profit by valuing the assets as low as possible because the indemnity from Lloyds meant CBA could not lose.” I am not seeking fully to summarise the ways in which Mr Neale’s wider dispute was advanced, still less expressing any view as to its merits, for it formed no part of the appeal.

3. [25]

   Mr Neale also summarised in his commercial list response, aspects of the “wider dispute” involving the Department of Planning and Infrastructure (this relates to delays in approving development on the Avon Road site) and a claim involving the architects, Ancher Mortlock & Woolley Pty Ltd, about a success fee claimed by the firm.

4. [26]

   In late March 2012, Mr Neale served a cross-claim which repeated the “limited dispute” and “wider dispute” referred to in the commercial list response. No solicitor was on the record for Mr Neale and his company at that stage. According to a chronology prepared by the Bank, senior counsel appeared on 30 March 2012 and successfully opposed a summary judgment application made by Bankwest. An agreed chronology states that on 30 March 2012, orders were made by consent for Mr Neale and his company to file and serve an amended commercial list response and an amended cross-claim; that appears to have been in response to the Bank’s application to strike out the cross-claim.

Mr Neale’s amendments abandon the claim that Yatala Road was sold at an undervalue

1. [27]

   The amended commercial list response, amended commercial list cross claim statement and cross-claim amended cross-summons were filed on 19 July 2012. Those documents indicated that Mr Neale and his company were now represented by Mahony Taren Lawyers. Significantly, in light of what had been alleged in the documents filed in February and March 2012, neither the amended cross-claim nor the amended commercial list cross claim statement contained allegations that Yatala Road had been sold at an undervalue.

2. [28]

   Paragraphs 71–77 of the amended cross claim statement did concern Yatala Road. They alleged that the property had been sold for $635,000 on 13 October 2011 by Messrs Lord and Parbery “purportedly as receivers and managers appointed under the Mortgages”, that “the appointment of Mr Lord and Mr Parbery as the receiver and manager … was invalid and is void and of no effect” and that the Bank was liable to account for the sale proceeds. The pleading continued:

3. [29]

   Conspicuous by its absence was an allegation that Yatala Road was sold at an undervalue, or in breach of any obligation owed by the receivers. The pleading did not mention the Alcorn Lupton valuation of $3,580,000.

4. [30]

   That is not to say that those matters were wholly outside the scope of the litigation. Mr Neale had sworn an affidavit on 26 March 2012 (at the time the cross-claim was filed) which addressed the valuation and sale of Yatala Road in some detail. Paragraphs 157–189 of Mr Neale’s affidavit, under the heading “CBA directed Improper Valuations of … Yatala Road”, contained a series of complaints about the valuation and sale process of Yatala Road. The affidavit annexed the Alcorn Lupton valuation of the site.

The proceedings are set down for hearing (August – December 2013)

1. [31]

   It is not clear whether the incongruity, insofar as it concerned the sale of Yatala Road, between paragraphs 157–189 of Mr Neale’s 26 March 2012 affidavit and the narrower pleadings, played any part in the readying of the proceedings for trial (for example, in relation to questions of discovery). It was clear from their oral submissions that both parties regarded what occurred in the six months prior to trial as much more critical to the appeal. In that they must be correct.

2. [32]

   In August 2013 the proceedings were set down provisionally for hearing on 3 February 2014 with an estimate of two weeks. On 8 November 2013 Mr Neale and his company filed a notice of motion seeking leave to file and serve a further amended commercial list cross claim statement in the form annexed to the motion. The proposed amendments were substantial. They involved a large number of serious allegations of impropriety directed to officers and employees of the Bank, and professional people retained by it. It is unnecessary for the purposes of this appeal to say anything more of those allegations, for they formed no part of the appeal. The proposed cross-claim also included new issues relating to the sale of Yatala Road, including (at paragraph 24):

3. [33]

   In the proposed amended cross claim statement, paragraphs 71–77 concerning the sale of Yatala Road remained unaltered. However, it was proposed to include a new paragraph 78 in the following terms:

4. [34]

   The motion came before the primary judge, coincidentally sitting as the Commercial List judge, on 11 November 2013. Mr Jacobs of Queens Counsel appeared for Mr Neale and his company. He made it clear that he had only very recently been briefed and that he did not move on the motion. He said, “May I say immediately, I don’t support, I can’t move for it and it has problems.” He added that he was satisfied that there was substance “in some of the contentions that have been put forward, provided they are pleaded properly”, and that, “I don’t think they have been pleaded properly in the cross-claim as it stands”. He sought a “reasonably tight timetable” for some amendments, and advised that “there is further evidence that needs to be put on, there must be further valuation evidence.”

5. [35]

   The primary judge dismissed the motion, stating that any application to amend ought be brought promptly and be accompanied by an explanation for the delay. He listed the matter for further directions on 22 November 2013 and added “I won’t make a direction but I suggest any draft amended cross-claim be served with a copy provided to Mr Dowdy (who appeared for the Bank at first instance and on appeal) no later than Monday 18 November”. It is quite plain that, based on what had been said by Queen’s Counsel, the primary judge apprehended that an amendment application would shortly be made.

6. [36]

   On 22 November 2013 the matter returned for directions. The primary judge advised that he had received an email from Mr Jacobs saying that he had withdrawn from the matter and no longer had a brief. Mr Dowdy advised that his client had received a notice of ceasing to act from Mr Mahony. Mr Neale appeared in person.

7. [37]

   The Bank referred to an amendment adding a British Virgin Islands company, Secured Global Opportunity Ltd (SGOL, the fourth respondent to this appeal), as an additional plaintiff. Around 12 months earlier the Bank had assigned the loan and the security to that company. Most of the directions hearing was occupied by debate about a potential amendment by Mr Neale.

8. [38]

   Mr Neale said that “I was present at the last hearing when Mr Jacobs was here” and said “what I want to do is further amend”. The primary judge confirmed the final hearing date on 3 February 2014 and granted liberty to apply on three days’ notice. His Honour said: “You can make any application you want to amend that at any time except time is running. The longer you wait the less chance there is that it will be granted.”

9. [39]

   His Honour stood over the proceedings for further directions on 16 December 2013.

10. [40]

    On 16 December 2013, the Bank’s amendment adding the British Virgin Islands assignee was granted by consent. An employed solicitor of Levitt Robinson, Ms Teffaha, appeared for Mr Neale and his company, saying that she had been instructed in the matter only last week. She handed an unfiled notice of motion to the court, which appears to have concerned amendments to Mr Neale’s claims. The primary judge refused to receive the motion without an affidavit. There was the following exchange:

11. [41]

    On 18 December 2013 Mr Neale’s solicitors filed a notice of motion seeking leave to file and serve a proposed amended commercial list cross-claim by 23 December 2013. The motion also sought leave to file and serve a preliminary expert witness report prepared by an accountant (who was named) by 23 December 2013 and sought orders for discovery of four categories of documents. No proposed amended pleading accompanied the motion, which was made returnable on 7 February 2014.

12. [42]

    The motion came before the primary judge, again sitting as the list judge, on Friday 20 December 2013. Ms Teffaha appeared and asked for the hearing on 3 February 2014 to be vacated. That was not an order which had been sought in the notice of motion. His Honour made it clear that he would not vacate the hearing, but advised that any application could be made during the vacation to the vacation judges (and indicated who they were).

January 2014

1. [43]

   No application was made to the vacation judges during the vacation for leave to amend or to vacate the hearing.

2. [44]

   However, two applications were made during the vacation. The first came before the vacation judge on 9 January 2014. Ms Teffaha appeared for Mr Stewart Levitt, the sole principal of the firm of solicitors acting for Mr Neale and his company, and sought leave to withdraw. Junior counsel for the Bank stated that it neither consented to nor opposed the application. Mr Levitt’s application was opposed by Mr Neale. The application was based on what was said to be a breakdown in the relationship between Mr Levitt and Mr Neale. Mr Neale denied that there had been a breakdown in the relationship, and said that he had a high regard for Mr Levitt and for Ms Teffaha. Although Mr Neale expressed some criticisms of his lawyers, he said, “Nothing has happened in this matter to cause me to revise downwards my respect for the intellect and the expertise of these lawyers.”

3. [45]

   The vacation judge, Lindsay J, dismissed Mr Levitt’s application on the strength of the opposition from Mr Neale and the limited evidence provided by Mr Levitt (who had not himself sworn an affidavit nor appeared). Following the delivery of judgment, there was the following exchange:

4. [46]

   His Honour asked whether anything else was required. No application was made, either at that time or subsequently, to a judge sitting in the Equity Division.

5. [47]

   The second application during the vacation was a motion filed in the Court of Appeal seeking a vacation of Mr Neale’s appeal against a decision of the District Court in favour of his former architects, Ancher Mortlock & Woolley Pty Ltd. However, the motion, as amended, sought to join the appeal with the pending proceedings in the Commercial List, and to vacate the hearing set down for 3 February 2014. It also sought orders that Levitt Robinson pay Mr Neale’s costs of the litigation.

6. [48]

   The application came before Macfarlan JA on 30 January 2014 and was dismissed. Mr Neale appeared in person. So far as is presently relevant, Macfarlan JA said of the orders sought in relation to the proceedings in the Commercial List that:

7. [49]

   No challenge was made to any aspect of that decision.

Mr Levitt is granted leave to cease to act

1. [50]

   The motion which came before Macfarlan JA on 30 January 2014 had been filed and served on 24 January 2014. Around the same time, there were emails suggesting a breakdown in relations between Mr Neale and his solicitors, and indeed Mr Neale made serious allegations of misconduct. Ms Teffaha had resigned without notice from Mr Levitt’s firm. There was a medical certificate stating she was unfit for work, and evidence that she had relocated to Melbourne. Mr Levitt said that no one else in his firm apart from Ms Teffaha had read Mr Neale’s file or was able to provide proper representation to him and his company. Mr Levitt also gave evidence that his firm had acted for a senior officer of SGOL, the British Virgin Islands assignee of Mr Neale’s loan, in pending (but unrelated) proceedings in the Supreme Court of New South Wales. On 27 January 2014 he advised Mr Neale that “we are renewing our application to withdraw from acting for you”. In support of that application, Mr Levitt swore an affidavit on 29 January 2014 which included the following paragraph:

2. [51]

   It is not necessary to summarise the considerable quantity of communications between Mr Neale and Mr Levitt’s firm, which were tendered at the commencement of the hearing on 3 February 2014. It suffices to say that Mr Neale asserted, and Mr Levitt denied, serious allegations against Mr Levitt and those in his firm. To be clear, nothing in these reasons should be construed as expressing a view one way or the other as to the conduct of Mr Neale or his former lawyers.

3. [52]

   Two matters in that material are relevant for present purposes. One of Mr Neale’s complaints was that “[t]he effect of your acting for me since about 25 November 2013 has been to … prevent me from amending my proceedings to reflect the written advice of Sandy Street SC in relation to the mortgagee’s duty of good faith in relation the sale of Yatala Road”. The other is that one of the communications between Mr Levitt and Mr Neale was an email dated 20 January 2014 which included the following:

4. [53]

   All this material was served and then read and tendered in support of a further application made by Mr Levitt at the commencement of the hearing. Mr Dowdy stated that, “as we see it, this is an application which doesn’t directly affect us”. After some of the supporting evidence was read and tendered, there was the following exchange:

5. [54]

   After the evidence on the application had been admitted, his Honour ruled upon it:

6. [55]

   Reliance was placed by the appellants on the following exchanges:

The remainder of the first day of the trial

1. [56]

   There was a short debate about the order in which the parties would be heard, because the separate proceedings commenced by Mr Neale in the Equity Division and Bankwest in the Commercial List had been consolidated. The primary judge gave leave to Mr Neale to represent JW Neale Pty Ltd, and offered him the choice of either going first in support of his cross-claim, or permitting the Bank to prove its case to the extent it was able to do so and then going second. There was the following exchange:

2. [57]

   Mr Neale stated that he was not sure how he should start, and the primary judge advised that ordinarily there would be an opening, saying what the case was about. There followed this exchange:

3. [58]

   His Honour reiterated that:

4. [59]

   Mr Neale thereafter proceeded to open his case. Immediately before the short adjournment, Mr Levitt’s notice of ceasing to act was filed in court and he was excused from further attendance.

5. [60]

   The opening continued until shortly before lunchtime, during the course of which the primary judge said:

6. [61]

   Immediately before the luncheon adjournment there was the following exchange:

7. [62]

   After the luncheon adjournment objections were taken to Mr Neale’s lengthy affidavit. Paragraphs 157–189 relating to Yatala Road were objected to in their entirety, and dealt with collectively. Objection was taken on the basis that the pleading extended only to a claim of trespass against the receivers and on the inadmissibility of the material. It was said, “There’s no claim for the sale of Yatala Road at an under value, and in any event, none of this is admissible evidence of sale at an under value even if there were such a claim”. Mr Neale made it clear that he was asserting that “this is an extraordinary example of an under value sale … valuation after the sale is $3.58 million, and the value of the sale 635, and they took 440 out of the 635.” His Honour ruled as follows:

8. [63]

   There followed a series of exchanges in which the primary judge confirmed that he was ruling only upon the admissibility of Mr Neale’s affidavit to prove matters going to the proper value and sale process of Yatala Road. That occurred in the following exchange:

9. [64]

   His Honour then added:

10. [65]

    At the conclusion of the day Mr Neale asked the primary judge “will it be open to me to call witnesses for my case like Mr Lupton, for instance?” His Honour answered:

11. [66]

    His Honour added:

12. [67]

    Counsel for the Bank objected to that course, on the basis that the written valuation did not accord with the rules and expert code of conduct. The primary judge said “we’ll have to deal with it, Mr Dowdy”, but observed that “we don’t even get there unless he’s produced and so let’s wait and see whether Mr Lupton comes through the door and says whether he’s going to give evidence”. The Bank agreed with that course.

13. [68]

    At the conclusion of the day Mr Neale referred to needing to make amendments, and there followed this exchange:

The second day of the trial

1. [69]

   At the commencement of the second day there was a short adjournment to permit a discussion between Mr Dowdy and Mr Street SC to take place outside court. Their discussions were not fruitful and the hearing resumed. (To be clear, it seems that at no stage did Mr Street actually appear for Mr Neale or his company at trial). Mr Neale handed up a document in response to the statement by the primary judge that he needed to tell Mr Dowdy straight away what Mr Lupton might give evidence about. Some material was handed up, and when the appeal was heard, documents marked MFI1 and MFI2 were said to be that material. I am prepared to proceed on the basis that those documents were the documents provided to the primary judge at the time, in accordance with the instructions given to Mr Altan by Mr Neale. The documents included a précis of the reasons which Mr Lupton would give in support of his valuation. I suspect that there was an additional document handed up, because MFI1 refers to an email from Mr Lupton, as does the exchange between Mr Neale and the primary judge referred to below; the email seems to have confirmed that Mr Lupton would attend as a witness. But little turns upon this. It is clear that Mr Neale was indicating what he hoped Mr Lupton would say, and the present relevance of the material is not whether or not it reflected Mr Lupton’s views. Rather, its relevance is that it confirmed that Mr Neale understood what he had been told the previous day would be required if he were to be permitted to advance a case that the Yatala Road property had been sold at an undervalue.

2. [70]

   Mr Neale said to the primary judge that:

3. [71]

   Mr Neale was then cross-examined for most of the second day. At the conclusion of the day, after cautioning Mr Neale not to talk to anyone about the evidence that he was giving, the primary judge said:

4. [72]

   Mr Neale said that, “what I think I have to spend time on is preparing and advising these three people that – actually, four or five people – that I’m hoping you will permit to be in court”. Mr Neale then asked whether Mr Lupton might be cross-examined on the third day of the trial. There was a protest from the Bank, on the basis that there would be no time for the Bank’s expert to critique the report. There was then this exchange:

The third and fourth days of the trial

1. [73]

   Mr Lupton did not appear on the third day of the hearing. Nor was any report or affidavit supplied. On the fourth day of the hearing, the motion which had been filed at the end of term in 2013 was the subject of debate. It was the occasion for Mr Neale advising the court that he wished to move to plead the undervalue sale as soon as possible.

2. [74]

   Mr Neale was assisted by the primary judge in providing him a copy of paragraph 78 (which is reproduced above). There followed this exchange:

3. [75]

   However, notwithstanding that refusal, the primary judge then gave Mr Neale the option to renew his application and deal with it at a later date, an indulgence granted because “I don’t think you can do it [scil, now] in a manner which gives you the best prospect of it succeeding.” His Honour added:

The second week of the trial

1. [76]

   The trial proceeded on Thursday 6 February and then adjourned to Monday 10 February. The question of the amendment to allege the undervalue sale of the Yatala Road property arose:

2. [77]

   There appears to have been no other reference to Mr Lupton in the second week of the hearing (at least, I have not noticed any such reference, and neither party took the Court to one).

The third week of the trial and the refusal to grant leave to amend

1. [78]

   On Monday 17 February 2014, the ninth day of the trial, Mr Neale was permitted to file in court a notice of motion seeking an amendment of his commercial list cross claim statement and the withdrawal of an admission. Debate on the amendment occupied the whole of the morning. The amendment as proposed was not confined to a claim that Yatala Road was sold at an undervalue; it extended to wide claims of misconduct by the Bank. The primary judge explained the position to Mr Neale:

2. [79]

   No application was made by Mr Neale for leave to amend confined to an allegation that Yatala Road had been sold at an undervalue. On the afternoon of 17 February 2014, the primary judge advised that he would not permit the amendment. He said that he would give full reasons in his final judgment. In those reasons, his Honour said the following (at [24]-[27] and [33]-[39]).

3. [80]

   His Honour then stated reasons telling against the “deliberate destruction strategy”. Those reasons did not deal separately with Yatala Road.

4. [81]

   In light of the foregoing, it is now possible to address the grounds of appeal.

Permitting Levitt Robinson to withdraw and not granting an adjournment

1. [82]

   Grounds 1(a) and (b) of the amended notice of appeal allege error in granting leave to Levitt Robinson to cease to act on the first day of the hearing and not granting an adjournment. The absence of an adjournment was said to result in Mr Neale and his company being denied the opportunity to argue for damages based on the Contracts Review Act 1980 (NSW), although the latter point was not developed in written or oral submissions.

2. [83]

   The primary judge was faced with an unopposed application by the solicitor on the record for leave to cease to act. There was uncontroversial evidence that the solicitor with primary carriage of the matter had resigned without notice, was unwell and had left the State. There was also evidence of a serious breakdown in relations between client and solicitor, so much so that serious allegations of impropriety were being made. Indeed, the client had filed a notice of motion seeking orders that “Levitt Robinson pay the Appellant’s costs until these proceedings are completed” and that “the Defence filed by Serene Teffaha … be withdrawn without prejudice”. Moreover, and perhaps most importantly, the firm of solicitors had only been retained late in the previous year, and for much of the proceedings, Mr Neale had been unrepresented. There was ample basis for the grant of leave.

3. [84]

   Mr Neale criticised the statement by the primary judge reproduced above (at [55]) discouraging an explanation of why Mr Neale had not opposed Mr Levitt’s application. The criticism is unfounded. Having determined to grant leave in light of the non-opposition, the reasons which Mr Neale might state were irrelevant to any remaining issue, and could only lead to distraction, embarrassment and delay.

4. [85]

   The gravamen of these two grounds of appeal was not so much the grant of leave to cease to act following an unopposed application per se, but the failure to grant an adjournment at the same time. It was said that “the Appellant should, in all those circumstances, have been provided with an opportunity to seek alternative legal representation”. I disagree.

5. [86]

   First, at no time did Mr Neale ask for an adjournment. Against this, it was submitted on his behalf that, as a layperson, Mr Neale should not have been expected as clearly to seek an adjournment as a lawyer. I cannot accept that submission. The procedural history of this litigation demonstrates that Mr Neale was well acquainted with the concept of applying for an adjournment. He had done so, twice, in the previous six weeks when Levitt Robinson had been acting for him and his company, including an application to Macfarlan JA to adjourn his pending appeal in the Court of Appeal the previous Thursday. In addition, he was invited in terms by Lindsay J on 9 January to make an application for an adjournment if he sought fit. He had been given advice from Mr Levitt concerning adjournments and Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 as recently as 20 January 2014. And it is clear that he was receiving at least some assistance (I would infer, pro bono) from senior counsel who sought to assist him, even on the morning of the second day of the hearing.

6. [87]

   In those circumstances, there can be no basis for concluding that Mr Neale did not know what was involved in an application for an adjournment on 3 February 2014.

7. [88]

   Mr Neale’s failure to apply is not necessarily an end to the matter, as Mr Dowdy properly acknowledged by reference to what Deane J had said in Sullivan v Department of Transport (1978) 20 ALR 323 at 343. There will be occasions when, in order for a court to resolve litigation in a way which is procedurally fair, the court must raise the possibility of an adjournment of its own motion. Usually if not invariably, those circumstances will be confined to cases where the unrepresented litigant is unaware of the ability to apply for an adjournment. That is not this case.

8. [89]

   Secondly, in the particular circumstances of this case, there is no reason to conclude that any different outcome would have been achieved by an adjournment, short or long, save for the possibility of an adverse costs order. For Mr Neale concedes that, in the event that there is a retrial, the only issue he would wish to relitigate is the allegedly undervalued sale of Yatala Road (submissions in reply filed 11 August 2015, paragraph 25). It follows that to the extent that there is shown to be appellable error, the only question that can arise is whether there has been a substantial miscarriage of justice in relation to the claims of the undervalued sale of Yatala Road.

9. [90]

   In those circumstances, there is no sound basis for a suggestion that this was a case where the court must or should, of its own initiative, have granted an unsought adjournment to a party without representation. The ultimate question is whether Mr Neale and his company were given a reasonable opportunity to present the only aspect of their case which they press on appeal, the challenge to the sale of Yatala Road. As will be seen below, in my view that is precisely what has occurred.

The sale of Yatala Road

1. [91]

   Ground 1(f) complains of a failure by the primary judge to find that the loss sustained by the sale of Yatala Road had been pleaded. Ground 1(g) is, alternatively, a challenge to the refusal by the primary judge to allow an amendment to plead that Yatala Road had been sold at undervalue. Ground 1(h) is a challenge to the refusal by the primary judge to determine the undervalued sale of Yatala Road. Ground 2(a) claims that there was a substantial miscarriage of justice by reasons of ground 1. Grounds 1(d)-(e) and (i)-(m) and 2(b) were formally abandoned. Ground 1(c) was a complaint about being refused leave to amend, which was not formally abandoned (possibly by oversight, having regard to paragraph 32 of the submissions in reply filed on 11 August 2015), but in any event was not advanced separately, and will be dealt with below.

2. [92]

   One theme in the submissions on these grounds was that Mr Neale’s pleading in the form it took going to trial, although deficient, should have been treated as extending to the alleged improper exercise of a power of sale. Another was that although much of what Mr Neale wished to submit at trial was unfounded in the evidence, the claimed improper sale of Yatala Road was in a different category, and should have been treated differently by the primary judge. A third was that the reasons given by the primary judge for refusing leave to amend, when application was made on the ninth day of the trial, focussed on the “deliberate destruction strategy” and failed to consider the possibility of permitting the much more modest amendment challenging the exercise of the power of sale. A fourth was that the assurances given by the primary judge that he would seek to deal with the case according to its substance were not carried through.

3. [93]

   These grounds must be rejected. The reason I have reproduced so much of the transcript earlier in these reasons is that it is perfectly clear that the primary judge did not determine the undervalue sale of Yatala Road because, for reasons which were and remain unexplained by any evidence, Mr Neale provided no admissible evidence of its value. It was emphatically not the state of the pleadings but the failure to call Mr Lupton that caused the claims about Yatala Road not to be determined.

4. [94]

   True it is that when the appeal was heard, Mr Altan was given the opportunity to take instructions on this issue, and advised that:

5. [95]

   Although I do not doubt that those were Mr Altan’s instructions from Mr Neale in August 2015, the record precludes my acceptance that that had been the position 18 months earlier. It will be recalled that:

   1. (1)

      Mr Neale’s pleading at the beginning of 2012 had advanced a claim for an undervalued sale, as had the draft claim which was not pressed on 11 November 2013;

   2. (2)

      Mr Jacobs had referred to the need for further valuation evidence on 11 November 2013, in the presence of Mr Neale;

   3. (3)

      On the first day of the hearing, when the paragraphs of Mr Neale’s affidavit dealing with Yatala Road were objected to and struck out, the primary judge explained, “But you’re not calling the valuer”, and made it clear that it would be necessary for Mr Lupton to give evidence if that aspect of the claim was to be advanced. The primary judge said, “You’d have to bring a valuer to give evidence”, to which Mr Neale replied, “I’m happy to do that. Vic Lupton is quite happy to come here and give evidence”. His Honour advised Mr Neale emphatically: “if you’ve got Mr Lupton who says he’ll come and give evidence, bring him”.

   4. (4)

      The repeated statements of the need to provide Mr Lupton, and the absence of any need to make an amendment, could have left no doubt in Mr Neale’s mind at the end of the first day of the hearing as to what was required in order for his claims about Yatala Road to be determined.

   5. (5)

      As much was demonstrated by the document handed to the court at the beginning of the second day, which was said to reflect a brief conversation Mr Neale had had with Mr Lupton and what Mr Neale hoped he would say. Whether or not MFI1 and MFI2 were the documents handed to the court on that occasion, it is plain from what Mr Neale said at the time that he understood what the primary judge had said about Mr Lupton and was taking steps to obtain a report from him.

   6. (6)

      At the conclusion of the second day, when Mr Neale had been under cross-examination, the primary judge expressly advised that he was free to talk with Mr Lupton.

   7. (7)

      Mr Neale failed to provide any expert evidence of value. His amendment was refused on the fourth day of the hearing, but with the “indulgence” given by the primary judge to “have another look at it, to speak to Mr Lupton, and [to] deal with this application on Monday”.

   8. (8)

      Even so, no expert evidence was produced at any time in the hearing. Nor was any produced by way of fresh evidence on appeal as to what would have been tendered had the amendment been allowed.

   9. (9)

      When an amendment was pressed on the ninth day of the hearing, which included but went substantially beyond the claim that Yatala Road had been sold at an undervalue in breach of duty, it was rejected, precisely as the primary judge had indicated on the fourth day of the hearing.

6. [96]

   In short, Mr Neale was told clearly and unambiguously that he needed to procure Mr Lupton’s attendance for cross-examination. How else was the stark disparity between Mr Lupton’s valuation and the price obtained by Bankwest’s receivers to be resolved by the court? The only conclusion available from the record is that Mr Neale well understood what was required of him, and was unable to provide Mr Lupton. Mr Neale obviously has a different view of the position now, 18 months later, but that cannot displace what he said and did at the time.

7. [97]

   It follows that the primary judge’s decision to refuse the amendment was unquestionably correct. The approach taken by the primary judge, putting the precise terms of the pleadings to one side and focussing upon whether there was admissible evidence to support the essential claims advanced by Mr Neale was, in my view, appropriate in the circumstances of this case, and was in accord with s 56 of the Civil Procedure Act 2005 (NSW). The result was to give a genuine opportunity to Mr Neale to prove his claims of breach of duty by Bankwest and its receivers. It also means that, even if it is pressed, there is nothing to ground 1(c).

8. [98]

   The question posed by ground 1(f) was whether the unamended pleading extended to a claim that Yatala Road was sold at an undervalue. Again, it was the want of expert evidence, not the scope of the pleading, which mattered. But in any event it is clear that the pleading did not extend to that case, having regard to the terms of the paragraphs, and, especially, the paragraphs which had preceded them in the February and March 2012 documents and which had been abandoned in the document filed on 19 July 2012.

9. [99]

   Finally, Mr Neale sought on appeal to advance a claim that there was breach of duty in selling Yatala Road in advance of Avon Road. This was wholly outside the pleading, as was properly conceded (transcript 27 August 2015, p 21). It cannot be permitted to be advanced on appeal, for the Bank was at no time called upon to explain why Avon Road had not been sold earlier: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438.

Orders

1. [100]

   For those reasons, I propose that the appeal be dismissed, with costs.