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- Schepis v Esanda Finance Corp Ltd[2007] QCA 263
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Schepis v Esanda Finance Corp Ltd[2007] QCA 263
Schepis v Esanda Finance Corp Ltd[2007] QCA 263
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | SC No 521 of 2006 |
Court of Appeal | |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | |
DELIVERED ON: | 10 August 2007 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 2 August 2007 |
JUDGES: | Holmes JA, Mackenzie and Atkinson JJ Separate reasons for judgment of each member of the Court, each concurring as to the orders made |
ORDER: | Appeal dismissed with costs |
CATCHWORDS: | PROCEDURE – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE – ACTIONS TO REVIEW OR SET ASIDE JUDGMENT – WHERE FRAUD, MISREPRESENTATION OR SUPPRESSION OF MATERIAL FACTS – where the appellants alleged in the Supreme Court of Queensland that in earlier proceedings in New South Wales the judge had erred and the judgment was procured by fraud – where the appellants sought leave to appeal from the summary dismissal of their action in the Supreme Court of Queensland – whether the appellants were able to succeed without having the New South Wales decision set aside Estoppel – Former adjudication and matters of record or quasi of record – Former adjudication – Judgment inter partes – Res judicata – where the appellants commenced proceedings in the Supreme Court of Queensland subsequent to earlier proceedings in New South Wales – where the learned judge held the defence of res judicata to be a complete bar to the action commenced in Queensland – whether the learned judge erred in finding that the appellants claim in Queensland was based on the same grounds as the New South Wales proceedings and barred by res judicata Cabassi v Vila (1940) 64 CLR 130, considered Cachia v Westpac Financial Services Ltd [2005] NSWCA 239, considered Emanuel Management Pty Ltd (in liq) v Fosters Brewing Group Ltd [1999] SASC 68, considered |
COUNSEL: | The appellants appeared on their own behalf R Lilley SC for the respondent |
SOLICITORS: | The appellants appeared on their own behalf Thynne & Macartney for the respondent |
[1] HOLMES JA: This appeal is brought against a summary judgment given for the respondents, who were the first and third defendants to the appellants’ action for conspiracy. In their claim, the appellants sought damages “due to the First Defendants’ wrongful repudiation of a lease between Anthony’s Stainless Steel Fabrications Pty Limited…” and, the claim continued, “…subsequent fraudulent, covert and underhanded conduct of the first defendant in conjunction with other co‑conspirators being the second and third defendants”; which conduct, it was said, consisted of collusion to fabricate evidence and suborning a witness. The claim went on to assert that fraudulent evidence produced by the three defendants resulted in a “miscarriage of justice in the Local Court Proceedings in Sydney”.
The New South Wales proceedings
[2] The background to this case is as follows: the appellants were directors of Anthony’s Stainless Steel Fabrications Pty Ltd. In 1992, they guaranteed the company’s lease of equipment from the first respondent, Esanda. On 20 October 1992, the lessee, having got into financial difficulties, ceased to trade. The appellants asked a firm of accountants (who subsequently formed the corporation which was the second defendant in the proceedings below) to assist in commencing a voluntary winding up of the lessee company. The leased equipment came back into the possession of Esanda, which sold it, and, in a New South Wales Local Court, sued the appellants as guarantors for the amount outstanding under the lease. Esanda originally obtained a default judgment in August 1993, but it was set aside by consent, because of questions as to service.
[3] Esanda did not, in the contested proceedings which followed, rely on any breach of the lease. Rather, it alleged that the lessee had surrendered the equipment to it, entitling it under the terms of the lease to sell it and recover the amount outstanding after the proceeds of sale were received. An employee of Esanda gave evidence that he had a telephone conversation with the male appellant, Mr Schepis, on 5 November 1992, in which the latter advised that the lessee had ceased trading and that the goods were to be picked up, although some of them had been stolen; Mr Schepis was preparing a list of the stolen items for police and the insurance company. That conversation was supported in documentary form by “scratch pad” entries: an electronic recording system maintained by Esanda in which its employees recorded on computer details of telephone conversations and correspondence.
[4] The appellants denied that conversation and gave evidence instead that Mr Schepis had been negotiating with Esanda to obtain a payout figure, so that the lease could be transferred to purchasers of the lessee’s business. On 20 October 1992, on Mr Schepis’ evidence, a representative of Esanda advised that the equipment was to be repossessed, and it was subsequently seized. The magistrate preferred Esanda’s account of events: he accepted that the conversation of 20 October 1992 as recorded in the “scratch pad” entry had occurred, found that the goods were collected at the lessee’s behest and gave judgment for Esanda.
[5] The appellants sought leave to appeal to the New South Wales Supreme Court on the basis that the magistrate had wrongly rejected evidence from representatives of the proposed purchasers of the lessee’s business as to negotiations with them which had failed because of the repossession of the goods. The application for leave was refused, Brownie AJ concluding that the evidence was rightly rejected on a combination of relevance and procedural grounds. The New South Wales Court of Appeal refused leave to appeal that result on 25 October 2000, essentially for the reasons given by Brownie AJ. An application for special leave to appeal to the High Court seems not to have proceeded.
The Queensland proceedings
[6] In August 2006, the appellants filed the claim the subject of this appeal. Their damages were said to be the loss of the value of the shares in the company because its business could not be sold, Esanda having repudiated the lease; losses incurred in meeting the judgment debt; legal expenses and legal costs; “14 years of anguish”; and “loss of opportunity”.
[7] The statement of claim begins by reprising the appellants’ case in the Local Court and giving the history of the proceedings there. It pleads, relevantly, that the “scratch pad” notes were produced in November 1994 fraudulently, as a result of collusion by all three defendants; that in 1998, inspection of the second defendant’s documents revealed diary notes showing that the three defendants had colluded to alter evidence; and that the appellants had attempted to introduce the diary notes in the New South Wales Local Court but the magistrate had upheld a claim of privilege and thus –
“excluded this very important evidence which would have discredited the main evidence of the first respondent being the ‘scratch pad’ notes”.