Freeman v National Australia Bank Limited [2003] FCAFC 200 (26 August 2003)

Last Updated: 26 August 2003

FEDERAL COURT OF AUSTRALIA

Freeman v National Australia Bank Limited [2003] FCAFC 200

BANKRUPTCY - sequestration order - alleged counterclaim against petitioning creditor - counterclaim based on Bank appointed receiver's sale of property at alleged under value - appeal against sequestration order - application for further evidence to be received - whether evidence said to go to Bank's intermeddling with receiver and acquiescence in alleged misconduct by receiver and to quantum of undervalue - criteria for admission of further evidence - evidence not cogent - unlikely to have yielded a different result - evidence mostly available at trial - evidence not admitted - appeal dismissed

Bankruptcy Act 1966 (Cth) s 52

Federal Court of Australia Act 1976 (Cth) s 27

Property Law Act 1974 (Qld) s 85

National Australia Bank Ltd v Freeman [2001] QCA 473 cited

National Australia Bank Ltd v Freeman [2000] QFC 295 cited

Freeman v National Australia Bank Ltd [2002] QFC 148 cited

Udovenko and Others v Mitchell (1997) 79 FCR 418 cited

Corney v Brien [1951] HCA 31; (1951) 84 CLR 343 cited

Re Schmidt; Ex parte Anglewood Pty Ltd (1997) 13 FLR 111 cited

Ling v Enrobook pty Ltd (1997) 74 FCR 19 cited

Council of the City of Greater Wollongong v Cowan [1955] HCA 16; (1955) 93 CLR 435 cited

CDJ v VAJ [1998] HCA 76; (1998) 197 CLR 172 approved

Guss v Johnstone [2000] FCA 1455 approved

Cottrell v Wilcox [2002] FCA 232 considered

Muirhead v Commonwealth Bank of Australia (1997) 1 Qd R 567 cited

State Bank of New South Wales v Kit Cheng Chia [2000] NSWSC 552; (2000) 50 NSWLR 587 cited

American Express v Hurley [1985] 3 All ER 564 cited

Standard Chartered Bank v Walker [1982] 1 WLR 1410 cited

Gomez v State Bank of New South Wales [2002] FCA 442 cited

LYNTON NOEL CHARLES FREEMAN v NATIONAL AUSTRALIA BANK LIMITED

Q44 OF 2002

FRENCH, COOPER and RD NICHOLSON JJ

26 AUGUST 2003

PERTH (Heard in Brisbane)

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q44 OF 2002

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	LYNTON NOEL CHARLES FREEMAN APPELLANT
AND:	NATIONAL AUSTRALIA BANK LIMITED RESPONDENT
JUDGES:	FRENCH, COOPER and RD NICHOLSON JJ
DATE OF ORDER:	26 AUGUST 2003
WHERE MADE:	PERTH (Heard in Brisbane)

THE COURT ORDERS THAT:

1. The appeal is dismissed.

2. The appellant is to pay the respondent's costs of the appeal to be taxed and paid out of the bankrupt estate.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q44 OF 2002

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	LYNTON NOEL CHARLES FREEMAN APPELLANT
AND:	NATIONAL AUSTRALIA BANK LIMITED RESPONDENT

JUDGES:	FRENCH, COOPER and RD NICHOLSON JJ
DATE:	26 AUGUST 2003
PLACE:	PERTH (Heard in Brisbane)

REASONS FOR JUDGMENT

THE COURT:

Introduction

1 On 12 March 2002, Spender J made a sequestration order against the estate of the appellant, Lynton Noel Charles Freeman. The order was made pursuant to a creditors petition filed by the National Australia Bank Ltd (`the Bank'). The Bank had sued Mr Freeman in the Supreme Court of Queensland for recovery of the possession of land under mortgage and for a debt owed to the Bank under an expired bank facility.

2 In the creditors petition it was asserted by the Bank that Mr Freeman owed it the amount of $1,427,890.08 pursuant to a Bill facility dated 19 December 1997 and an order of the Supreme Court of Queensland dated 11 October 2000. The Bank asserted it held security over property belonging to Mr Freeman, valued at $1,331,877.69, and comprising:

(a) land

(b) livestock

(c) income derived from the land

This left an unsecured amount of $96,012.39 said to be owed by Mr Freeman to the Bank. The act of bankruptcy relied upon was that:

`On 20 November 2000, an enforcement warrant issued against the real and personal property of the respondent debtor consequent upon a judgment obtained by the applicant creditor against the respondent debtor in Supreme Court of Queensland proceedings number S4013/98 was returned unsatisfied to the Supreme Court of Queensland on 20 December 2000.'

3 When Spender J made the sequestration order he ordered that it be stayed for twenty-one days. The purpose of the stay was to permit consideration by Mr Freeman of an appeal. A notice of appeal was filed on the last day of the stay. An amended notice of appeal was filed shortly thereafter. On 9 April 2002, Spender J further stayed the sequestration order pending the determination of the appeal. He nevertheless required Mr Freeman to prepare and file a statement of affairs with his trustee in bankruptcy.

4 A second amended notice of appeal was filed on 13 June 2002 and a Further Amended Notice of Appeal on 2 July 2002. There were three grounds of appeal in the latter notice which was considerably shorter than its predecessors. In the event only the first of the grounds raised in the Further Amended Notice of Appeal was relied upon. By that ground Mr Freeman seeks to have this Court consider further evidence. That evidence is said to raise an arguable case that he has a claim against the Bank for the sale of his property at an under value and that the claim, if made good, would exceed his indebtedness.

The Ground of Appeal

5 The single ground of appeal relied upon in the case was that:

`The decision of the learned judge that there was "no other sufficient cause" to dismiss the petition within the meaning of s 52(2)(b) of the Bankruptcy Act 1966 was wrong in fact and law as there is new evidence available to the appellant (which was not before his Honour) that the appellant's claim against the respondent in matter No S2339 of 2002 in the Supreme Court at Brisbane has sufficient validity to justify dismissal or adjournment of the petition.'

The Nature and History of the Bank's Proceedings against Mr Freeman in the Supreme Court of Queensland

6 The background to the proceedings in the Supreme Court of Queensland is conveniently set out in the judgment of White J in the Queensland Court of Appeal in National Australia Bank Ltd v Freeman [2001] QCA 473 and in the judgment of Ambrose J at first instance - National Australia Bank Ltd v Freeman [2000] QFC 295 Action No 4013 of 1998.

7 Mr Freeman was, in 1992, the registered lessee of about 10,000 hectares of grazing land known as Glassford Vale located about 100 kilometres south west of Gladstone. The property was used for cattle rearing, for some crops, for timber harvesting and for the extraction of gravel and mining for metal. In 1992, Mr Freeman had debts to a number of financial institutions in connection with his operation of the property. These obligations were refinanced with the Bank in mid 1992. The refinancing was by way of a loan repayable on demand and secured by a mortgage over the land and various stock mortgages. Mr Freeman's initial indebtedness to the Bank was about $480,000. The mortgages secured his indebtedness in respect of a farm management account, a fixed rate interest only loan account, a fully drawn advance account and an overdraft account.

8 Mr Freeman contended that an officer of the Bank had made representations to him in 1992 and 1993 that the Bank would support him in a plan he had to build up cattle numbers by holding back from sale female breeders. This would reduce for a time the cashflow from the property. He said that the Bank represented it would require interest only repayments until the number of cattle reached 2,500 or 1,000 female breeders or until the operations on the property as a whole generated a gross annual income of $240,000. He said that in reliance on these representations he increased his borrowings to purchase more cattle and to make improvements to the property.

9 By mid 1993 Mr Freeman had borrowed about $800,000 from the Bank and his property was affected by drought. He said he had discussed the future of the property with the Bank at its Bundaberg branch and that the Bank agreed to carry him until the end of the drought or until he reached a gross annual income of $240,000 or the target cattle numbers. The representations and agreement were denied.

10 It was Mr Freeman's position before the Supreme Court of Queensland that his difficulties with the Bank began with the arrival of a new Bank officer at the Bundaberg branch in mid 1996. He was required to reduce his overdraft from $120,000 to $90,000 by the end of November 1996. To meet this demand he had to sell breeders. This reduced his herd and adversely affected his capacity to keep to his productivity plan. The money sought by the Bank would have to come from an interest subsidy which he would have received, from the Queensland Rural Assistance Authority, in the following April had the Bank provided the necessary support.

11 He complained that the Bank failed to support his application for an interest subsidy for 1997. The Bank regarded his operation as unviable and declined to guarantee support for the requisite twelve months in 1997. During 1997 the Bank continued to seek to have Mr Freeman improve his debt position and advised him that unless an acceptable proposal was received by the end of September in that year it would commence proceedings. The Legal Aid Office in Queensland wrote to the Bank on behalf of Mr Freeman on 23 September 1997 proposing a change of financiers at a discounted payout figure of $360,000 to take account of his alleged losses from the sale of breeder cattle. However the Bank was not prepared to release its securities without a full payment of principal and interest and wanted an acceptable plan to deal with the debt. In the event the Bank invited Mr Freeman to enter into a mediation.

12 Mediation proceeded on 4 December 1997 before Mr RR Douglas QC, then a barrister at the Queensland Bar. The mediation lasted a full day at the end of which a written agreement was produced which Mr Freeman and the Bank executed. This was known as the Deed of Mediation.

13 Relevant provisions of the Deed of Mediation are set out in the first instance judgment of Ambrose J and included the following:

Recital E:

`E. As a result of the mediation Freeman has agreed to an offer from the Bank to forebear from enforcing the mortgages immediately to allow him to repay the facility indebtedness on the terms and conditions contained in this Deed.'

Clause 3.1 provided:

`Freeman acknowledges that the Bank is entitled at any time on and from 5 March 1998 to issue to Freeman any Demands, Notices of Exercise of power of Sale and any other Notices which may be required to enable the Bank to exercise its power of sale.'

Clauses 4.1 and 4.2 provided:

`4.1 Freeman must use his best endeavours to refinance the debt or to sell the property and to exchange contracts of sale no later than 4 March 1998. Settlement of any sale or refinance must be effected no later than 6 April 1998.

4.2 In the event the refinance is not approved or contracts are not exchanged under clause 4.1 by 4 March 1998, Freeman agrees to deliver to the Bank by 6 April 1998 vacant possession of the property to enable the Bank to sell the property as mortgagee exercising power of sale.'

Clause 6.1 provided:

`6.1 Freeman acknowledges and agrees that clause 4.2 requires Freeman to give the Bank vacant possession of the property in the event that such refinance is not approved or contracts are not exchanged in accordance with that clause.'

Clauses 7.1 and 7.2 provided:

`7.1 In the event that Freeman does not comply with the provisions of the Deed, Freeman agrees that the Bank is entitled to commence proceedings so that a Writ of Possession for the property may issue.

7.2 Freeman agrees that he will not take any active part in the proceedings including, without limitation the filing of the defence of the proceedings.'

Clause 8.1 provided:

`8.1 Except as otherwise provided in this Deed, the Bank agrees to forebear from enforcing the Mortgages.'

There was a release contained in cl 9 in the following terms:

`9. RELEASE

9.1 By the execution of this Deed Freeman immediately, absolutely and unconditionally releases the Bank, its officers and agents, from all claims which Freeman now has or, but for this Deed might have had against the Bank, its officers and agents, in respect of the Facilities, the Mortgages, the Proceedings, or any other matters referred to in the recitals TO THE INTENT THAT this Deed may be pleaded by the Bank as a complete and absolute bar to any claims by Freeman in respect of the matters released by this Deed.

9.2 Clause 9.1 applies to the Bank mutatis mutandis.'

14 Mr Freeman's attempts to refinance were unsuccessful and on 4 March 1998 he was in default under the Deed of Mediation and therefore under the Bill facility. On 7 April 1998 the Bank sent a notice of termination of the facility which had expired on 6 April 1998. Mr Freeman did not pay the Bank the value of the bill of exchange on its maturity date. There was no dispute that he was in default under the Bill facility.

15 The Bank commenced proceedings for recovery of possession of the land and stock the subject of the securities on 1 May 1998. It claimed $1,029,255.05 together with interest to the date of issue of the proceedings and a further claim for interest falling due after their issue. Mr Freeman admitted default under the Bill facility but as Ambrose J characterised it, sought relief `... based upon events alleged to have occurred, representations and promises made, etc during the course of his dealings with the plaintiff from 1992 until the occasion of his executing a Deed of Mediation with the plaintiff subsequent to a Mediation conducted in December 1997'.

16 In his defence to the proceedings before Ambrose J Mr Freeman raised a number of matters going to the enforceability of the securities and of the Deed of Mediation. The latter he contended was voidable on account of unconscionable conduct by the Bank in procuring its execution. Ambrose J however, rejected all the defences and dismissed Mr Freeman's counterclaim and his claim to set off any sum against the money owed to the Bank.

17 Mr Freeman then appealed to the Court of Appeal in Queensland which, on 2 November 2001, dismissed his appeal with costs. White J wrote the judgment of the Court, with which Davies and Thomas JJA agreed. One of the contentions on appeal was that the Bank misrepresented to him at the time of mediation that the value of the secured property was $1.6 million. This was based upon a valuation from Herron Todd & White dated 8 December 1997 that the valuation on fair market value in aggregation was $1.5 million, in subdivision was $1.6 million and at a forced sale $1.3 million. Her Honour said:

`The submission was not developed and it is not apparent what use His Honour might have made of such a finding since it can have had no effect on his conclusion.'

18 Subsequently Mr Freeman instituted proceedings against the Bank in action number S2339 of 2002 in the Supreme Court of Queensland. These proceedings were based on the contention that the Bank was liable to Mr Freeman for the sale of the property, Glassford Vale, at an under value. A summary judgment application by the Bank was dismissed by Muir J on 7 May 2002 - Freeman v National Australia Bank Ltd [2002] QFC 148. His Honour held the applicable principles to be `imprecise in their nature and their application difficult to assess in the absence of an established factual matrix'.

The Judgment Appealed From

19 Spender J delivered three judgments in the proceedings on the creditors petition. The first was an interlocutory judgment in which His Honour dismissed a motion for review of a Deputy Registrar's decision refusing Mr Freeman an order for discovery. The motion, which was filed on 27 July 2001, sought an order that the National Australia Bank produce for inspection documents referred to in an affidavit attached to that motion. In dismissing the motion on 10 December 2001, Spender J referred to the circumstance that there had been a contested trial over four days before Ambrose J and a contested appeal in the Court of Appeal. He observed that it was quite unlikely that a reason could be made out why a court in bankruptcy should go behind that judgment. He said:

`In this case, Mr Freeman is seeking to re-litigate the question of whether he owes a debt to the National Australia Bank. That misunderstands the circumstances in which a Court of bankruptcy will exercise its discretion to go behind a judgment. Those circumstances plainly have not been made out in the present case.'

His Honour was satisfied that the documents sought by Mr Freeman ought not to be the subject of an order for discovery under O 15 of the Federal Court Rules in the proceedings. The documents which he sought, some of which appeared to go to the question whether there had been compliance with the Bank's internal procedures, had not been shown to be relevant to any issue in the Federal Court proceedings apart from the issue of Mr Freeman's indebtedness.

20 In his reasons for judgment delivered on 12 March 2002, Spender J referred to the history of the proceedings in the Supreme Court of Queensland and noted that subsequent to the judgment of the Court of Appeal Mr Freeman had sought special leave to appeal to the High Court of Australia. At the time that his Honour's judgment was delivered the application for special leave had not been heard and one of the submissions which Mr Freeman put to the Court as a reason against the making of sequestration order was that to make such an order might prejudice his capacity to pursue that special leave application. His Honour said:

`While I acknowledge that that is a possible consequence of the making of a sequestration order, depending as it does on decisions that may be made by the Trustee of the estate should Mr Freeman be made bankrupt, such a consequence must be viewed in light of the prospects of special leave being granted. As the document to which I have referred makes plain, Mr Freeman is acting on his own behalf in his application for special leave, and such applications have a very low success rate.'

His Honour assessed the prospect of special leave being granted as quite remote. The questions raised in the application seemed to be almost exclusively confined to the particular dealings between the Bank and Mr Freeman. In the event special leave to appeal to the High Court was refused on 14 March 2003.

21 His Honour identified the original grounds for Mr Freeman's defence to the petition as those appearing in his affidavit filed on 27 February 2001.

22 Spender J referred to the grounds for opposition to the petition initially filed by Mr Freeman. In a further document headed `Amended Notice of Intention to Oppose Application or Petition' the following grounds of opposition to the petition were specified:

`To have the notice set aside. To amend the Notice to Oppose to include disputed service, not indebted as alleged or at all, livestock are not the property of the respondent. Quantum of the warrant incorrect. Frauded trial, fraud, intend (sic) to defraud, deceit, false pretences, false evidence, fabricating evidence, perverting justice, judgment between the parties is unresolved. Failure to produce documents. Deceptive and misleading conduct, unconscionable conduct, non-compliance with discovery order in the Supreme Court. Negligence.'

23 His Honour noted that the question of service had already been dealt with by an affidavit by Sergeant Harms which was filed on 13 July 2001. He also noted the outcome of the appeal to the Court of Appeal and the absence of any substance in any of the grounds of appeal raised by Mr Freeman.

24 His Honour referred to extensive affidavit material filed by Mr Freeman going to those matters compendiously referred to in the Amended Notice of Intention to Oppose the Petition. There were three affidavits sworn by a Mr Salmon before his Honour. He described Mr Salmon as a consultant specialising in assisting persons who assert that they are the victims of banking malpractice. These were not directed to questions of whether the enforcement warrant was returned unsatisfied. They were directed to questions of the Bank's behaviour.

25 There were also affidavits from Mr Freeman himself, from a registered valuer and agricultural consultant, Mr Quinlan, from Kristen Lynne Freeman and from Adam Noel Freeman. These affidavits concerned matters which were live in the Supreme Court trial and appeal, although they also went to the question of the failure to provide bank statements which was raised before his Honour. So far as the failure to provide bank statements was concerned, his Honour observed that the judgment debt was the amount owing as at October 2000. Issues relating to the debt before that date were the subject of the Supreme Court trial and since that date the Bank had relied on the statutory interest under the Supreme Court Act 1995 (Qld) in respect of which the bank statements had no bearing. His Honour identified two `real questions' raised by Mr Freeman's defence:

1. Whether on the whole of the material the Court should go behind the judgment of the Supreme Court of Queensland.

2. That his Honour should deal with complaints that the receiver had sold Mr Freeman's property at an undervalue.

26 In relation to the first matter, namely whether the Court should go behind the judgments of the Supreme Court and the Court of Appeal, his Honour referred to Udovenko and Others v Mitchell (1997) 79 FCR 418 at 420-421. In that judgment Davies J referred to the authority of the High Court in Corney v Brien [1951] HCA 31; (1951) 84 CLR 343. Spender J referred to a passage from the judgment of Davies J which he described as the crucial statement for the present case:

`If the judgment in question followed a full investigation at trial on which both parties appeared, the Court will not reopen the matter unless a prima facie case of fraud or collusion or miscarriage of justice is made out.'

27 Applying that principle to the case before him, Spender J held that a prima facie case of fraud or collusion or miscarriage of justice had not been made out such as to impeach the judgment that was obtained after a full investigation at a trial at which both parties appeared and were represented by solicitors and counsel. His Honour held that despite the voluminous nature of the material which had been put forward by Mr Freeman no substantial reason had been shown for questioning whether there was in truth and reality a debt due to the petitioning creditor.

28 His Honour's observations in that respect were subject to the more particular matter raised by the second question, namely Mr Freeman's complaint that the sale of property by the receiver was at an undervalue.

29 At the time that the creditors petition came before his Honour, Mr Freeman had instituted proceedings against the Bank in the Supreme Court of Queensland in action number S2339 of 2002. In that action he claimed damages against the Bank for sale of his mortgaged property at an undervalue. His Honour referred to the statement of claim filed in those proceedings. It was alleged in the statement of claim that the Bank was mortgagee of Mr Freeman's interest in land under a registered Memorandum of Mortgage L85084 and the mortgagee of stock under Livestock Mortgage 920253. In par 6 of the statement of claim it was alleged that in or about June 2001 the Bank as mortgagee in possession enforcing its power of sale sold Mr Freeman's interest at a net price of $768,347.49. It was said that the sale of his interest at that price constituted a breach of a duty of care owed by the Bank to him. Particulars of the breach were:

`(a) Failing to advertise the land and attributes, improvements, Timber royalties and potential property;

(b) Failing to obtain the True Value.' (sic)

Loss and damage said to flow from the breach of the duty of care comprised:

(a) the grazing value at the time of sale;

(b) the cattle;

(c) the timber;

(d) mining royalties;

(e) gravel royalties;

(f) Mined Screening Royalties;

(g) Irrigation;

(h) Interest on the sum of $7,081,652.51.

The Bank defended the claim in part on the basis that the receiver was in truth Mr Freeman's agent and any claim he had was against the receiver as his principal, which claim would not assist him as against the Bank. His Honour accepted, on the authorities, that a provision in the mortgage had the effect that the receiver appointed by the mortgagee, exercising the power expressed in the mortgage, was acting as agent for the mortgagor. His Honour also held that the legal position was that if there were actual negligence in the conduct of the sale Mr Freeman would have a claim against the receiver. This was notwithstanding that the receiver would have received an indemnity from the Bank.

30 His Honour concluded that Mr Freeman had not established that there was in truth and reality a debt owing by him to the Bank arising from an offset based upon the sale of his property at an undervalue in breach of the Bank's duty to him. His Honour was satisfied of the act of bankruptcy alleged in the petition and the other matters of which the Act required proof. He was not satisfied that there was any other sufficient reason why a sequestration order ought not to be made. In those circumstances, he made the sequestration order against Mr Freeman's estate and made an order for costs to be paid in accordance with the provisions of the Bankruptcy Act 1966 (Cth).

31 On 9 April 2002, his Honour published reasons for making an order that proceedings under the sequestration order of 12 March 2002 be stayed until the determination of Mr Freeman's appeal against that sequestration order. In making that order his Honour identified, as a contentious point in the appeal, the question whether any default by the receiver in the sale of Mr Freeman's property could be sheeted home to the Bank notwithstanding the terms in the mortgage which provide that the receiver is the agent of the mortgagor. His Honour said he was not to be taken as indicating any view as to the strength of the point but was not prepared to say it was unarguable given that the property was sold at a figure which was considerably less than the valuation which the Bank's valuer had placed on the property at a not irrelevant time.

Statutory Framework

32 The Bankruptcy Act 1966 (Cth) deals, in s 52, with the proceedings and order on a creditors petition. Relevantly for present purposes it provides:

`52(1) At the hearing of a creditors petition, the Court shall require proof of:

(a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);

(b) service of the petition; and

(c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing; and

if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.

...

(2) If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:

(a) that he or she is able to pay his or her debts; or

(b) that for other sufficient cause a sequestration order ought not to be made;

it may dismiss the petition.'

33 Section 27 of the Federal Court of Australia Act 1976 (Cth) deals with the reception of evidence on appeal as follows:

'27. In an appeal, the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact and, in its discretion, to receive further evidence, which evidence may be taken:

(a) on affidavit; or

(b) by video link, audio link or other appropriate means in accordance with another provision of this Act or another law of the Commonwealth; or

(c) by oral examination before the Court or a Judge; or

(d) otherwise in accordance with section 46.'

Section 46 deals with orders and commissions for examination of witnesses.

The Proposed New Evidence - The Freeman Affidavit Sworn 7 May 2002

34 The proposed further evidence comprises two affidavits, one sworn by Mr Freeman himself on 7 May 2002, the other sworn on the same day by Mr David Quinlan, a registered valuer.

35 In his affidavit, Mr Freeman sets out that prior to about 18 June 2001 he was the registered leasehold owner of five lots of land covered by three grazing homestead freeholding leases and two special leases issued by the Minister for Lands under the Land Act 1994. The lots comprised approximately 10,000 hectares of predominantly grazing and cultivated land. Prior to 23 October 2000 he operated the land as a mixed enterprise, including grazing, cropping, timber harvesting, mining and extraction of commercial minerals.

36 The affidavit refers to millable timber on the land (pars 5 to 9). It describes the timber and refers to information he had received about its volume from the Department of Forestry. Mr Freeman goes on to say that in the period from January to October 2000 he grossed approximately $20,000 in timber royalties under a contract with a sleeper cutter.

37 The affidavit also describes the extent of irrigation on the land (pars 10 to 13). In these paragraphs Mr Freeman states that the land is watered by seasonal creeks with some permanent water holes. It has 19 dams, 5 bores and 5 wells. It has 60 acres of irrigated land serviced by a network of underground water mains fed by a well in Glassford Creek. The irrigation system has a capacity in excess of 15,000 gallons per hour down to 10,000 gallons per hour in dry times. He contends that the irrigated land has increased the carrying capacity of the property generally by approximately 200 to 400 bullocks per annum at a current value of approximately $1,200 per bullock depending on season and sale prices. It created a drought mitigation process.

38 The affidavit then deals with cultivation of the land (pars 14 to 16). The land comprises approximately 600 acres of cultivated land farmed under rotation. Mr Freeman refers to various crops which he has grown upon the land. He claims to have grossed approximately $500 per acre twice annually from the cash crops. Where the selling price of the crop would fail to reach that gross amount he otherwise used the crop as livestock fodder.

39 In relation to the carrying capacity of the land (pars 17 to 20) Mr Freeman claims the land had the capacity, because of the irrigation and cultivation of the land, to graze approximately 2,500 cattle on it. He claimed to be able to fatten and sell off 800 cattle through the breeding herd and an additional 200 to 400 bullocks more than he otherwise would expect to have done. Absent irrigation and cultivation, he estimated he would have been able to graze 1,600 cattle in dry times or 2,500 in good times. The cultivation allowed him to extend the fattening season throughout the year with the result that it became an annual enterprise instead of a seasonal one.

40 The affidavit then refers to a Mining Compensation Agreement (pars 21 to 46). Mr Freeman says that he first discovered mineral prospects in the land and surrounding area in about 1976. In late 1995 he entered into a Mining Joint Venture Agreement with a Mr Puce and with Roger and Ann Wenzel to explore, mine and market any minerals occurring in the land. They formed a company called Zinace Pty Ltd (`Zinace') in January 1996. The company took up a mineral exploration permit in May 1996 and a second permit in the later part of the same year. In May 1997 a Joint Venture Agreement was concluded between Zinace and North Mining Ltd (`North') for the exploration and mining of the tenements.

41 In September 1997 Mr Freeman entered into a Mining Compensation Agreement with Zinace in favour of himself in respect of the land. In or about that year Zinace had resolved to upgrade its exploration permit to a mineral development licence with a view to mining building stone on the property. North was not interested but required the Compensation Agreement to be made between Zinace and Mr Freeman before agreeing to the application for a mineral development licence proceeding. Under the agreement with Zinace the company agreed to buy the land at $5 million plus the value of millable timber on the land to be assessed, with settlement to occur on or by 9 September 1999. Zinace was to pay $3 per cubic metre of aggregate removed from the area during the period from October 1997 until settlement. A copy of the Compensation Agreement is exhibited to his affidavit (LNCF 1).

42 Mr Freeman claims that in September 1997 he spoke with Mr Luck of the Bank and advised him of the existence of valuable mining tenements on the property and of the Compensation Agreement. He says he told Mr Luck that he wanted to sell the land to Zinace under the Compensation Agreement and North's joint venture. A letter from the Bank dated 17 September 1997 is exhibited to the affidavit (LNCF 2). In that letter Mr Luck told Mr Freeman that the Bank disclaimed knowledge of any charge against the properties subject to its mortgage.

43 Mr Freeman alleges that his applications to the Department of Mines for mining development leases were sabotaged by the Bank which `poisoned the well' with the Mining Registrar from 1998 onwards. After the property was sold by the Bank's receivers mining development lease documents were issued to Zinace.

44 Mr Freeman then claims that in March 1998 the Bank proposed a Workout Agreement under which it would extend time for compliance with its demands for repayment in exchange for a charge from Zinace over all its tenements (pars 47-49). However the agreement did not proceed.

45 Turning to the value of the land, Mr Freeman claims that in September 1997 HTW Valuers assessed the fair market value of the land at $1.5 million if sold in aggregate or $1.6 million if in subdivision. However, on 14 April 1998, according to an internal memorandum of the Bank, Mr Luck placed an estimated reserve of $770,000 on the land. The internal memorandum was exhibited to an affidavit sworn by Mr Freeman in July 2001.

46 He then recites the order made by Ambrose J on 11 October 2000 and the unsuccessful appeal (pars 54-56). The next topic in Mr Freeman's affidavit is the appointment of the receivers and managers (pars 57-58), they being Philip Arthur Hennessey and Geoffrey Earl Gray who were appointed on 11 October 2000.

47 He alleges an inadequate marketing program referring in particular to the limited duration of advertising of the sale of the land from 25 January 2001 to early March 2001. The land was put up for auction on 13 March 2001 but was passed in.

48 The absence of any proper advertisement of the property for sale is then addressed (pars 65-68). Mr Freeman exhibits an advertisement published on 1 March 2001 and refers to its failure to mention `key features' of the property and in particular the irrigation. He also claims that the carrying capacity of the land was incorrectly advertised at 1,300 head of cattle. The true capacity, he says, is 2,000 to 2,500 cattle. He also complains that there was no mention in the advertisement of the Mining Compensation Agreement.

49 The next part of the affidavit is that particularly relied upon by Mr Freeman's counsel and refers to the alleged active participation by the Bank in the sale of the property at an undervalue (pars 69-77). He says in his affidavit that on or about 12 or 13 October 2000 he drove to Glassford Vale with Peter Lloyd of KPMG, representing the receivers and managers, for an inspection of the property. In the course of the inspection he asked Mr Lloyd when the property would be sold. He claims that Mr Lloyd said `it's up to the Bank but about February or March 2001 I expect'. He asked Mr Lloyd how he would set the value if the property wasn't sold at auction. Mr Lloyd told him the Bank would do that. In the course of the return trip he asked Mr Lloyd how his firm, KPMG, had got the receivership. Mr Lloyd said to him `the Bank is an audit client of KPMG'.

50 At this point in the affidavit Mr Freeman exhibits a memorandum from Mr Hennessey, the receiver, to Mr Luck of the Bank dated 9 January 2001 (LNCF 5). The memorandum enclosed correspondence for Mr Luck's perusal comprising outstanding rates and debtors advices from the Calliope Shire Council, details of cattle mustered and sold in conjunction with Primac Elders, details of cattle mustered and sold by one Sam Cox and a schedule of expenses paid and revenues received. Mr Hennessey then referred to advice from Mallesons that all amounts owing to the Calliope Shire Council would have to be paid by the receiver in order that the property could be sold with clear title. He requested the Bank's approval to pay the outstanding amount of $17,376.96 from receivership funds. He also requested that the Bank peruse the particulars of cattle mustered by Cox and confirm its approval to issue payment of $7,407.59 for the mustering of 54 cattle to that date. Mr Freeman asserts that the receivers reported to the Bank and kept the Bank informed of developments at each stage of the sale of the property. He also exhibits a copy of a facsimile dated 27 March 2001 from Mr Lloyd to Mr Luck (LNCF 6). This memorandum said shortly:

`Please find attached further offer dated 27 March from Ron and Ann Carige. Please confirm that this offer is also declined.'

The written offer attached to the memorandum was for the sum of $90,000 per year for five years with a payment at the beginning of the sixth year of $150,000. The offer was made subject to suitable finance.

The Proposed New Evidence - The Quinlan Affidavit Sworn 7 May 2002

51 Daniel Quinlan is a registered valuer. His affidavit exhibits a valuation report which he had been instructed to prepare by Mr Freeman in order to ascertain the unencumbered `market value' of Glassford Vale as at 18 June 2001. In the valuation report he indicated that he had partially relied upon and/or considered the following matters:

. Valuation dated 8 December 1997 by HTW Valuers Market Value in Subdivision - (highest and best use) - $1.6 million excluding commercial timber, gravel deposit value and mineral value under the Mining Compensation Agreement attached to the property. Stated valuation by HTW was 2,000 mixed head.

. Auction brochure 1 May 1985 which described a carrying capacity of 2,500 mixed cattle in a breeding and fattening operation.

. QRAA's estimate of carrying capacity.

. Property inspection as of 17, 18 and 19 September 2000.

The report assessed commercial timber on the property at a current value of $200,000. Carrying capacity was estimated at 2,400 head of adult stock by inspection. Mr Quinlan also referred to advice from Mr Freeman that a Mining Compensation Agreement had been negotiated and registered in the Mines Department. The valuer asserted that the purchasers of the property could have that agreement available to them. He referred in his report to the sale of the property on 18 July 2001 by the receivers and managers on behalf of the Bank for $800,000 following what appeared to have been a four to six week selling period. He considered the timeframe for the advertising was inadequate and the more reasonable advertising timeframe would be three months. He also claimed that the advertisements which he had seen excluded value improvements as well as mis-stating the sustainable carrying capacity of the property. The advertisements, he said, failed to mention irrigation, cultivation and the value of saleable timber and gravel attached to the property and developed on the property. If the Mining Compensation Agreement had existed at the time of sale the receivers and managers may have failed to advise their prospective purchasers that a Mining Compensation Agreement was present.

52 Mr Quinlan noted that on 8 December 1997 HTW Valuers had valued the property at $1.6 million at its highest and best use. A carrying capacity of 2,000 head of mixed cattle was assessed. Mr Quinlan found it difficult to believe that carrying capacity should have decreased by 1,300 head as suggested in the advertising material. Additionally the property market did not appear to have decreased since December 1997 such that the property would only be worth $800,000 at 18 June 2001. His valuation of the property as at 18 June 2001 was $2,200,000 plus timber sold by the receivers and managers up to the date of sale of Glassford Vale.

53 It should be noted that there were before Spender J three affidavits sworn by Mr Quinlan on 18 June 2001, 31 October 2001 and 21 February 2002. In the first of those affidavits Mr Quinlan exhibited a letter dated 10 March 2001 in which he set out deficiencies in the advertising of the property and another letter making an assessment of losses which he considered had been suffered by Mr Freeman. The amount of the losses was made on the assumption that the valuation of the property by HTW Valuers at $1,600,000 was correct. The affidavit of 31 October 2001 referred to the previous affidavit and deposed that in that affidavit he had `... used a calculated value of Glassford Vale in those calculations at $1,600,000'. His affidavit exhibited the same letter setting out advertising deficiencies as the earlier affidavit. In his third affidavit before Spender J, Mr Quinlan shortly and baldly deposed:

`2. I am a registered Valuer and Agricultural Consultant.

3. I have reviewed and reassessed the losses of the above respondent in this instance as $7,356,709.38.

4. I have valued the property Glassford Vale at $2,200,000 for the purposes of this assessment.

5. My method of calculation has been shown in my previous Affidavit.'

His Honour, it should be noted, made no express finding in his reasons for judgment about this evidence having regard to his conclusion that any default on the part of the receiver was not able to be sheeted home to the Bank.

54 As to the valuation report prepared by Mr Quinlan and relied upon as further evidence on appeal, the Court was informed from the bar table that the report had been prepared on 6 or 7 May 2002. It evidently was initially prepared for the purpose of meeting a summary judgment application brought by the Bank in the proceedings S2339 of 2002.

The Appellant's Submissions

55 It was submitted on behalf of Mr Freeman that there was sufficient cause to dismiss the creditors petition under s 52(2)(b) of the Bankruptcy Act there being in fact no debt owing by him to the Bank by reason of an offsetting claim. The offsetting claim was that made by him in action number S2339 of 2002 against the Bank. In that action he seeks damages against the Bank for negligence and/or breach of duty of good faith arising from the sale of his property by the receivers and managers appointed by the Bank in circumstances in which the Bank either directed the exercise of their powers of sale or acquiesced in the exercise of those powers.

56 Counsel submitted that in determining whether there is sufficient cause not to make a sequestration order the Court on appeal must be satisfied that there was sufficient validity in Mr Freeman's claim to justify dismissing or adjourning the petition upon which the sequestration order was sought. Reference was made to Re Schmidt; Ex parte Anglewood Pty Ltd (1967) 13 FLR 111 at 116 and Ling v Enrobook Pty Ltd (1997) 74 FCR 19. This did not involve the appeal court in deciding the claim. The relevant test, it was submitted, was whether Mr Freeman has a reasonably arguable claim against the Bank.

57 The appellant's submission then turned to s 27 of the Federal Court of Australia Act which, it was said, empowers the Court to receive further evidence on appeal notwithstanding that it may not satisfy common law rules governing the admission of further evidence - Council of the City of Greater Wollongong v Cowan [1955] HCA 16; (1955) 93 CLR 435; CDJ v VAJ [1998] HCA 76; (1998) 197 CLR 172 at 184-186 (Gaudron J), 199-201 (McHugh, Gummow and Callinan JJ) and 230-238 (Kirby J). Reference was also made to Guss v Johnstone [2000] FCA 1455 at [29]- [46]. In the latter case the Full Court (Drummond, Sackville and Dowsett JJ) observed that on the construction of s 27 most favourable to the appellant it is ordinarily necessary for the party seeking to adduce further evidence to demonstrate that the evidence relied on is cogent. That is to say, the court exercising appellate jurisdiction should be satisfied that the proffered evidence would be likely to have produced a different result had it been available at the trial. It was submitted that a wider approach was indicated by the Full Court in Cottrell v Wilcox [2002] FCA 232 where it was said that s 27 confers upon the Court a discretion as to whether or not to receive further evidence confined only by the requirement that it be exercised judicially and consistently with the judicial process. It was also submitted that a greater willingness has always been demonstrated in bankruptcy cases to receive further evidence on appeal where the interests of creditors generally are affected.

58 Even assuming the stricter common law insistence on cogency, it was said to be reasonably clear that if the further evidence had been available at the hearing of the petition a different result would have been likely.

59 Other discretionary factors relevant to the reception of the further evidence were that the evidence and, in particular, exhibits LNCF 5 and LNCF 6, were not known to Mr Freeman at the time of the hearing of the creditors petition. They only came to light later in the course of non-party discovery in the Supreme Court. The evidence was said to have been first available to Mr Freeman when produced by the receivers and managers and received by him on or about 26 April 2002 in response to a notice of non-party disclosure given by the appellant in action number 2339 of 2002 in the Supreme Court of Queensland. On this basis it was said the evidence was not capable of being ascertained by reasonable diligence. Exhibits 5 and 6 to Mr Freeman's affidavit were said to be objective evidence and accordingly able to be admitted without the need to have the proceedings reheard.

60 Turning to the substance of the case to be advanced by the new evidence, counsel for Mr Freeman accepted that the effect of the Bank's mortgage on its plain meaning, as appears from cl 9 of the mortgage, is to make the receivers the agents of Mr Freeman in exercising the power of sale. A claim would not lie against the Bank in an action at the suit of Mr Freeman for breach of s 85 of the Property Law Act 1974 (Qld) by reason of the receiver's conduct in exercising their powers of sale - Muirhead v Commonwealth Bank of Australia (1997) 1 Qd R 567 at 579. However it was submitted that the area of operation of the statutory duty under s 85 of the Property Law Act was narrowly circumscribed and only operates in relation to sales by mortgagees exercising a power of sale. Outside the ambit of the statutory duty any duty owed by the Bank to Mr Freeman, whether at common law or in equity, is not displaced by s 85 of the Property Law Act.

61 Then it was said that where a mortgagee (in this case the Bank) directs the exercise of the powers of the receiver it is subject to the duties of the receiver - State Bank of New South Wales v Kit Cheng Chia [2000] NSWSC 552; (2000) 50 NSWLR 587 at [881]; American Express v Hurley [1985] 3 All ER 564 at 571; Standard Chartered Bank v Walker [1982] 1 WLR 1410 at 1415 and 1418. It was also submitted that the like result arises when the Bank can be seen to have acquiesced in the misconduct of the receiver.

62 Relying upon Gomez v State Bank of New South Wales [2002] FCA 442 it was said that the duty owed by a receiver can be formulated as an equitable obligation of good faith to take reasonable care to obtain market value of the asset at the date of sale.

63 The submissions then turned to the relationship between the receiver and the Bank and cited authority for the proposition that although a receiver is not automatically the agent of the mortgagee it may become so if the mortgagee treats it as such. So involvement in the performance of the receiver's functions to the extent of directing when and to whom the receiver could sell the security would constitute the mortgagee treating the receiver as agent - State Bank of New South Wales v Chia at [886].

64 Then it was said there was evidence of absence of good faith and a sale at a significant under value. The value for which the land was ultimately sold on 7 May 2002 was said to be an under value so gross as to amount to evidence of fraud. Reference was also made to inadequate advertising and the various deficiencies mentioned earlier.

Whether the Further Evidence Should Be Received

65 Section 27 of the Federal Court of Australia Act confers upon the Court, in the exercise of its appellate jurisdiction, a discretion to `receive further evidence'. The discretion is not in terms confined by any conditions or criteria for its exercise. Such approaches as have emerged from the case law relating to s 27 and like provisions applicable to other courts do not require the confinement of the discretion by rigid judge-made rules. In CDJ v VAJ which concerned a similar provision, s 93A(2) of the Family Law Act, McHugh, Gummow and Callinan JJ said (at 200):

`The discretion conferred by s 93A(2) to receive further evidence on appeal is not expressed to be limited in any way. In particular, the subsection contains no requirement, comparable with that often found in statutes conferring power on an appellate court to receive further evidence, that "special grounds" or "special leave" be shown before the evidence can be adduced.'

Section 93A(2) was viewed in the joint judgment in CDJ as remedial (at 201):

`Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.'

66 So much having been said it is necessary, in determining an application for the receipt of further evidence, to have regard to the circumstance that the application is made in the appellate jurisdiction of the Court. Generally speaking, it is in the exercise of the Court's original jurisdiction at the trial of an action or other proceeding, that all relevant evidence will be adduced. Appeals brought in the Court from the decision of trial judges or federal magistrates are appeals de novo. But the appellate jurisdiction of the Court is not intended to provide an opportunity for a retrial of issues tried at first instance on further evidence. In the joint judgment in CDJ it was said at 202:

`... it is highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction.'

Ordinarily the trial of an action will provide the opportunity for all relevant evidence to be adduced and findings of fact made upon it.

67 In Guss v Johnstone, Sackville J, with whom Drummond and Dowsett JJ agreed, observed that it was not in dispute that on the construction of s 27 most favourable to the appellant:

`... it is ordinarily necessary for the party seeking to adduce further evidence to demonstrate that the evidence relied on is cogent; that is, the Court exercising appellate jurisdiction needs to be satisfied that the proffered evidence would be likely to have produced a different result had it been available at the trial.'

Although Cottrell v Wilcox was relied upon by Mr Freeman's counsel as taking a more relaxed position, that is probably putting a construction on it which is too favourable to the appellant. In that case of course the Court did say that s 27 empowers the Full Court to receive further evidence on appeal not withstanding that it may not satisfy the somewhat narrower common law constraints.

68 In our opinion, consistently with the principles enunciated in CDJ, Guss and Cottrell, there are good reasons that the further evidence sought to be tendered in this case should not be received by this Court.

69 With respect to the affidavit of Mr Freeman:

1. Little of it raises any matter which was not or could not have been put before the judge at first instance.

2. The documentary evidence in LNCF 5 and LNCF 6 is not so compelling that it could be said that the case must have gone the other way had it been available to the trial judge. The memorandum, LNCF 5, from the receiver and manager to Mr Luck seeks approval from the Bank for payment of certain outgoings necessary to give clear title to the land. It does not involve the Bank in directing the receivers as to the sale of the land. LNCF 6 is more directly suggestive of involvement by the Bank in the sale of the land. In substance, however, it seeks confirmation of the rejection by the Bank of an offer for the subject land which appears to have totalled $700,000 spread over a period of five years. This, it might be noted, was an offer on considerably less favourable terms than the offer which was ultimately accepted by the Bank after the property was passed in at auction. It should also be noted that in any sale of the property the Bank's consent would be necessary for the discharge of its mortgage. This also appears from the affidavit of Mr Lloyd as an explanation of his action in referring the offer to the Bank. The Bank sought the admission of his affidavit and that of Mr Luck in the event that Mr Freeman's application for the reception of further evidence was acceded to.

3. The affidavit does refer to a conversation between Mr Freeman and Mr Lloyd of the receiver's office conducted in October 2000 which would suggest that the Bank was controlling the timing of the sale and the reserve price to be set at auction. That of course was a matter well known to Mr Freeman at the time of the hearing before Spender J. It does not appear that this conversation was put to Spender J.

4. Various parts of the affidavit are essentially argumentative, particularly the claims about the effect on carrying capacity of irrigation and cultivation.

70 The valuation report prepared by Mr Quinlan was based upon an inspection in 2000 and an assessment of value in 2002 as at 18 June 2001. It is clearly material which could have been put before Spender J who already had three affidavits from Mr Quinlan including his unexplained assertion that the value of the property was $2,200,000 notwithstanding his prior calculation of losses based on an assumed value of $1,600,000. It is very doubtful that the additional evidence from Mr Quinlan would have made any difference to the outcome before Spender J, even assuming that his Honour had been prepared to find that any default on the part of the receiver was attributable to the Bank. Having regard to the precursor affidavits sworn by Mr Quinlan and used before Spender J, it is difficult to regard his additional evidence as cogent in the sense that it ought to be received by this Court as probative of an arguable case that the property was actually worth $2.2 million and that its sale properly conducted would have wiped out the debt to the Bank. It may be noted that a calculation was carried out by Mr Luck and exhibited to his affidavit on the assumption that the property was sold at $1.3 million, the forced sale value given by HTW. The calculation yielded a net deficit of $153,682.20 - see p 47 of the supplementary volume of new evidence. It did not take account of the indemnity costs awarded by Ambrose J in the Supreme Court of Queensland in favour of the Bank and against Mr Freeman. In our opinion the utility of Mr Quinlan's evidence is surrounded by such doubt as not to warrant the Court in receiving it in these proceedings.

71 It was not contended before us that Spender J erred in coming to the conclusion that he did, on the evidence before him, that the receiver was not the agent of the Bank for the purposes of liability arising from the alleged sale at under value. Quite apart from the documents LNCF 5 and LNCF6 which have been discovered since the hearing before Spender J, Mr Freeman was in a position to have adduced evidence of his conversation with Mr Lloyd which would appear to have been of more direct relevance to the question of `intermeddling' than the documentary material.

72 It may be appreciated that Mr Freeman was representing himself before Spender J. He was however, by then, an experienced litigant. He placed, as appears from the record, a very substantial amount of documentary material before the trial judge. On his evidence, Mr Lloyd had told him that the Bank was setting the value for the purposes of auction. Given that he was seeking to hold the Bank responsible for the sale of the property at an under value, even if not conscious of the agency issue, it is surprising that he did not raise this matter before Spender J.

73 The affidavit from Mr Freeman brings in no evidence which could not have been brought before Spender J, in relation to the claim of acquiescence by the Bank in misconduct by the receivers. That acquiescence was said, by counsel for Mr Freeman, to arise out of Mr Luck's 1998 estimate of the value of the property at $770,000, an estimate said to be unconsidered and later reflected in the actual sale price obtained by the receivers. Acquiescence is also said to be demonstrated in connection with the alleged understatement of the carrying capacity of the property. Counsel for Mr Freeman submitted that the Bank had been involved in the management of Mr Freeman's property from about 1992 and that Mr Luck had been involved from about 1997. On that basis it was said that the Bank must have known or ought to have known that the carrying capacity was understated at 1,300 head of cattle. These matters are matters of mixed evidence and argument which could have been put to Spender J at the time of the sequestration hearing. Moreover the evidence does not, in our opinion, disclose a cogent case for acquiescence in any misconduct on the part of the receivers which would have been likely to bring Spender J to a different conclusion.

74 The Court was referred, in some detail, by counsel for the Bank to affidavit evidence from Mr Luck and Mr Lloyd which it sought to rely upon in answer to Mr Freeman's further evidence. While we have made passing reference to this evidence in the preceding paragraphs we have not found it necessary to receive that additional material as in our opinion, on its own merits, Mr Freeman's further evidence should not be received. We do not consider it appropriate to exercise the discretion under s 27 in favour of Mr Freeman. If there be merit in his counterclaim then no doubt the trustee in bankruptcy and other creditors will have an interest in pursuing it.

75 Having regard to the way in which the single ground of appeal in this case was framed and its sole reliance upon the receipt of the further evidence going to the question of alleged intermeddling and acquiescence by the Bank and the quantum of loss allegedly suffered by Mr Freeman, the appeal must be dismissed.

I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices French, Cooper and RD Nicholson.

Associate:

Dated: 26 August 2003

Counsel for the Appellant:	Mr C Wilson
Counsel for the Respondent:	Mr I Perkins
Solicitor for the Respondent:	Mallesons Stephen Jaques
Date of Hearing:	28 August 2002
Date of Judgment:	26 August 2003