The recent Supreme Court decision of his Honour Justice Ginnane in ANZ Banking Group Ltd v Loftus [2014] VSC 342 concerned an appeal from a summary judgment granted by an Associate Justice. It provides a helpful refresher on when a party may be allowed to tender new evidence on appeal. 

Background

ANZ sued Mr Loftus for debts owing under a loan contract and possession of a property given as security for the loans.  Mr Loftus defended the claim, alleging in his defence that he had not signed the mortgage.  On 2 April 2014, an Associate Justice granted summary judgment in favour of ANZ.  Mr Loftus had a solicitor on record who appeared for him at the hearing of the summary judgment application. However, no affidavit in opposition was filed on his behalf.  In her reasons, the learned Associate Justice observed:

In the course of the hearing I directly asked Mr Loftus’ solicitor why an affidavit had not been filed on behalf of Mr Loftus. The Court was informed that Mr Loftus’ solicitor had some concerns about Mr Loftus in that she thought he may have an acquired brain injury and that this presented difficulties in terms of Mr Loftus being able to attend to give instructions and to prepare such an affidavit. This is an extremely serious matter that was put before the Court. Mr Loftus is legally represented and yet no material has been put before the Court. There was no application for an adjournment for more time so that an affidavit could be filed by Mr Loftus.

In granting summary judgment, her Honour stated:

Having considered the evidence and heard submissions, I do not consider Mr Loftus has any real prospect of success. It was open to Mr Loftus to put some material before the Court and he failed to do so. In circumstances where he makes an allegation of fraud, it is incumbent on Mr Loftus to put some evidence to substantiate the allegation or that demonstrates there is at least a question to be tried. [Emphasis added.]

Mr Loftus terminated the solicitor's retainer and appealed to a Judge of the Trial Division against the summary judgment under the relatively new provisions which came into force on 1 January 2013; see r 77.06 – 77.06.9

The new evidence on appeal

On appeal, Mr Loftus sought to rely upon an affidavit sworn by him in May 2014 which was not available before the Associate Justice.  In that affidavit, Mr Loftus:

  1. explained why there was no affidavit before the Associate Justice.  He said that he met with his solicitor to give instructions for an affidavit and it was agreed that the solicitor would send a draft to him.  However, Mr Loftus swore that he did not receive a draft affidavit from his solicitor and he did not do anything further because he thought his solicitor had everything under control;
  2. said that he did not have a brain injury; and
  3. set out his version of events concerning the ANZ loans and denied ever signing a mortgage.

In respect of comments regarding a brain injury, the two counsel appearing on the appeal for Mr Loftus informed Ginnane J that they had not seen evidence of a brain injury in their contact with him.  In Ginnane J's decision, his Honour states that he was not able to understand, from the material before him, why the solicitor had made the statement to the Associate Justice and that it:

"was likely to have undermined confidence in the reliability of [Mr Loftus'] recollection of the events concerning the signing of the loan agreement and the credibility of [Mr Loftus'] defence that he had not signed the mortgage."

Grounds of appeal

The parties accepted that, on an appeal from a decision of an Associate Justice, Mr Loftus had to establish an error in the Associate Justice's decision.  The notice of appeal identified grounds including these: -

  1.  the Associate Justice erred in finding that Mr Loftus "elected" not to file an affidavit in opposition to the summary judgment application and erred in having regard to the solicitor's statements of him having a brain injury which caused difficulties in him being able to give instructions to prepare an affidavit.   In the event the court allowed Mr Loftus' new affidavit into evidence, it was contended that the court should find that Mr Loftus did not "elect" not to file an affidavit in opposition to the summary judgment application and did not have a brain injury;
  2. the Associate Justice erred in finding that Mr Loftus did not suffer prejudice by ANZ not producing the original mortgage when he denied signing it; and
  3.  the Associate Justice erred in finding that it was incumbent on Mr Loftus to adduce evidence to substantiate his allegation and erred in finding that Mr Loftus’ defence did not have any real prospects of success.  In the event the court allowed Mr Loftus' new affidavit into evidence, it was contended that the court should find that he had disclosed a triable issue.

The question of whether to allow the new evidence

In considering whether to allow the new affidavit, Ginnane J referred to rule 77.06.9(3) which gives the court power to receive further evidence on appeal on questions of fact by affidavit.  Reference was also made to Clark v Stingel [2007] VSCA 292 in which the Court of Appeal set out the principles upon which the Court will grant leave to introduce fresh evidence upon an appeal.  In that case, it was held that it was not in doubt that leave should be given only if:

  • by the exercise of reasonable diligence such evidence could not have been discovered in time to be used in the original trial;
  • it is reasonably clear that if the evidence had been available at the trial, and had been adduced, an opposite result would have been produced; and
  •  the evidence proposed to be adduced is reasonably credible.

The affidavit of Mr Loftus and the affidavits of ANZ concerning the relevant facts were in conflict. Ginnane J considered that where there are disputed questions of fact, those disputes are best resolved at trial after hearing oral evidence of witnesses and, in the absence of expert evidence, the question of whether a person has signed a document is also best determined at a trial.  When applying s 63 of the Civil Procedure Act 2010, his Honour was of the view that Mr Loftus had real prospects of defending ANZ’s claim because his version of events may be accepted after hearing the oral evidence of relevant witnesses at trial.

Ginnane J held that it was reasonably clear that if Mr Loftus’ evidence had been before the Associate Justice, summary judgment would not have been granted. 

Another factor that was held to justify the receipt of Mr Loftus’ affidavit was that the judgment was not obtained after a full hearing at trial; it was obtained on a summary judgment application which is made on affidavit.  The case was therefore distinguished from Clark v Stingel where further evidence was sought to be introduced at an appeal after a trial.  The principle of finality of litigation was viewed as being stronger after the completion of a trial as compared to obtaining judgment in a summary fashion.

The interests of justice were also viewed by his Honour as an important factor when considering the admission of new evidence on appeal.  By reason of Mr Loftus’ account of his dealings with his solicitor and her failure to file an affidavit or seek an adjournment to enable an affidavit to be filed, his Honour was persuaded to rely on the new affidavit.

The decision

The affidavit was allowed into evidence.  The appeal was also allowed on the basis that Mr Loftus had real prospects of defending ANZ’s claim and it was a proceeding that should go to trial.  The appeal was allowed not because of any error shown in the Associate Justice’s reasons, but on the basis of the new evidence filed.

Takeout from the decision

On an appeal from a judgment granted in favour of a lender, it is not uncommon for a borrower to seek to rely on new evidence.  Whilst the Loftus case was one involving a legally represented borrower, in my experience, attempts to rely on new evidence are more often encountered with litigants-in-person.  Accordingly, it is important to be familiar with the relevant principles governing the tendering of new evidence on appeal in order to properly assess the likelihood of that material being allowed and, in turn, the likely outcome of the appeal. 

In any given case, leave may well be given if: (i) the evidence could not have been discovered in time to be used at the original hearing; (ii) it is clear that if the evidence had been available and adduced at the original hearing, the opposite result would have been produced; and (iii) the new evidence sought to be adduced is reasonably credible.  The interests of justice and the desire for finality of litigation will also be factors taken into account in assessing the question; though the principle of finality of litigation may have less importance when a borrower is appealing against a summary judgment rather than a judgment obtained after a trial.

Finally, it would seem that some extra consideration will be given to litigants who are self-represented at first instance.  On that point, it should be noted that in a recent Court of Appeal decision, fresh evidence was permitted even after a full trial in circumstances where the appellant appeared for himself at first instance: see Sgargetta v NAB [2014] VSCA 159 at [38].