- Unreported Judgment
- Appeal Determined (QCA)
SUPREME COURT OF QUEENSLAND
Upton v Westpac Banking Corporation & Ors  QCA 171
JAMES SYDNEY UPTON
Appeal No 8886 of 2016
DC No 1244 of 2015
Court of Appeal
General Civil Appeal
District Court at Brisbane –  QDC 278
11 August 2017
13 March 2017
Fraser and Gotterson JJA and Mullins J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made
APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF COURT – ORDERS SET ASIDE OR VARIED – where the appellant appeals against the dismissal of his application under r 668 of the Uniform Civil Procedure Rules 1999 (Qld) to set aside the summary judgment given against him – where the appellant was refused an extension of time to appeal against the summary judgment – where the appellant applied under r 668 alleging that facts had been discovered, that if discovered in time, would have entitled the appellant to a different order – whether the appellant can establish that there was an error by the primary judge in concluding that these were no new facts discovered after summary judgment was given against him
Uniform Civil Procedure Rules 1999 (Qld), r 668
Amos v Wiltshire  QCA 77, considered
IVI Pty Ltd v Baycrown Pty Ltd  1 Qd R 428;  QCA 461, considered
Rockett v The Proprietors – “The Sands” Building Units Plan No 82  1 Qd R 307;  QCA 99, considered
Upton v Westpac Banking Corporation  QCA 220, related
Westpac Banking Corporation v Upton  QDC 278, related
The appellant appeared on his own behalf
E J Goodwin for the respondents
The appellant appeared on his own behalf
Henry Davis York Lawyers for the respondents
- FRASER JA: I agree with the reasons for judgment of Mullins J and the orders proposed by her Honour.
- GOTTERSON JA: I agree with the orders proposed by Mullins J and with the reasons given by her Honour.
- MULLINS J: On 10 November 2015 the learned primary judge gave summary judgment against the appellant Mr Upton in favour of the respondent Westpac Banking Corporation in the amount of $617,440.17 for principal and interest (but not enforcement costs and expenses) based upon the guarantee and indemnity (the guarantee) signed on 3 December 2008 by Mr Upton (as varied by letters of variation dated 20 August 2010, 13 September 2011 and 5 May 2012). Judgment was also given against Mr Upton in respect of his counterclaim against the second and third respondents who were receivers and managers appointed by Westpac to the property at Dugandan mortgaged to Westpac by the borrower Cambridge Pacific Investments Pty Ltd as trustee for the Cambridge Pacific Investments Trust (the borrower). In addition, Mr Upton’s amended counterclaim against Westpac filed on 5 June 2015 was struck out, but liberty to re-plead was given, in accordance with the reasons for judgment. See Westpac Banking Corporation v Upton  QDC 278 (the reasons).
- Mr Upton did not appeal against the judgment within time and his application for an extension of time in which to appeal was refused: Upton v Westpac Banking Corporation  QCA 220 at  (the Court of Appeal judgment).
- Mr Upton then applied under r 668 of the Uniform Civil Procedure Rules 1999 (Qld) to set aside the orders made on 10 November 2015, on the basis facts had been discovered after the orders were made that, if discovered in time, would have entitled Mr Upton to an order or decision in his favour or to a different order. At the hearing on 5 August 2016, Mr Upton had also sought leave to file an application seeking relief pursuant to r 225 of the UCPR and his further affidavit (numbered 15) that was in support of the application to set aside the orders of 10 November 2015. The primary judge refused to allow this application and affidavit to be filed. By ex tempore reasons given on 5 August 2016, the primary judge dismissed the r 668 application and ordered Mr Upton to pay Westpac’s costs of the application on the indemnity basis.
- Mr Upton now appeals against the dismissal of his r 668 application and the other orders made on 5 August 2016. The receivers were not named as parties to that application and had therefore not appeared at the hearing on 5 August 2016. They were not parties to this appeal, but to the extent that their presence may have been required for the disposition of the appeal, the representatives for Westpac were also instructed to appear for the receivers.
The facts supporting the summary judgment
- The facts identified by the primary judge for the purpose of the summary judgment application were set out in - and - of the reasons. They were summarised by McMurdo JA (with whom the other members of the court agreed) in the Court of Appeal judgment at - as follows:
“The relevant facts for the bank’s claim, which for the most part are now undisputed, were as follows. Mr Upton was sued as the guarantor of a loan or loans by the bank to a company called Cambridge Pacific Investments Pty Ltd of which he was the director and which was the trustee of a trust under which he was a beneficiary. In May 2013 he caused the company to be removed as trustee immediately before placing it into liquidation. He was its sole director from August 2007 until 10 August 2014 when the company was deregistered.
Part of the bank’s security was a registered mortgage over the Dugandan property. When that property was transferred to the replacement trustee, CPAC Residential Pty Ltd, it became bound by the mortgage. In January 2014 the bank appointed the receivers to the property pursuant to a power conferred by the mortgage. As I will discuss, the receivers took some steps towards selling the property but no sale was made.
The Dugandan property was purchased in September 2007, financed by the bank’s loan to Cambridge Pacific Investments. The borrower’s liability was capped at $539,000 (plus 20 per cent to cover certain fees, costs, expenses and interest). Mr Upton guaranteed the borrower’s performance. In December 2008 the bank made a further loan to Cambridge Pacific Investments, this time for the purchase of a house at Norman Park. Mr Upton also guaranteed the repayment of this loan, which was capped at $396,000 (plus 20 per cent for fees, etc.).
In August 2010 the original loan of $539,000 was increased by a further advance of $30,000. Mr Upton as a guarantor agreed to this increase. Between December 2010 and September 2012 there was a series of further variations to the terms of that loan of 2007 and each was agreed by Mr Upton as a guarantor.
In February 2013 Cambridge Pacific Investments sold the Norman Park property and an amount of approximately $500,000 was paid from the sale proceeds to the bank.
The liquidation of Cambridge Pacific Investments in May 2013 constituted an event of default for the purposes of its borrowing and Mr Upton’s guarantee. At first the bank agreed to Mr Upton’s request that the bank accept payments of interest, as Mr Upton proposed in an email to an officer of the bank in May 2013, to ‘allow us to sell the [Dugandan] property in a more orderly fashion.’ But the property was not sold and the receivers were appointed in January 2014.
In the meantime, of course, interest had continued to accrue and in April 2015, when the bank commenced its proceeding against Mr Upton, it claimed a total of $665,742.13, comprised of $560,723.53 for principal, $56,716.64 for interest and $48,301.96 for enforcement costs and expenses. The bank was given judgment for that principal and interest.” (footnote omitted)
- In addition, the primary judge had referred at  of the reasons to the deed of forbearance dated 10 September 2013 executed by Mr Upton and his wife Ms Nott. The entry into this deed and its expiry on 31 December 2013 upon which Westpac claimed to be entitled immediately to commence enforcement action without further notice to Mr Upton in respect of the debt secured by the guarantee were facts that had been pleaded by Westpac in its statement of claim.
Rule 668 of the UCPR
- Rule 668 of the UCPR provides:
“(1)This rule applies if—
- facts arise after an order is made entitling the person against whom the order is made to be relieved from it; or
- facts are discovered after an order is made that, if discovered in time, would have entitled the person against whom the order is made to an order or decision in the person's favour or to a different order.
- On application by the person mentioned in subrule (1), the court may stay enforcement of the order against the person or give other appropriate relief.
- Without limiting subrule (2), the court may do one or more of the following—
- direct the proceedings to be taken, and the questions or issue of fact to be tried or decided, and the inquiries to be made, as the court considers just;
- set aside or vary the order;
- make an order directing entry of satisfaction of the judgment to be made.”
- In IVI Pty Ltd v Baycrown Pty Ltd  1 Qd R 428 at -,  and - the Court had regard to the principles applicable when a party relies upon fresh evidence in an appeal when considering whether facts newly discovered would “entitle” a person against whom an order had been made to be relieved from it or to an order or decision in that person’s favour in a r 668(1)(b) application. As Jerrard JA observed at  “Any lesser degree of proof would not establish that the applicant was “entitled” to relief from, or to a different, order”. See also Amos v Wiltshire  QCA 77 at -, per Fraser JA (with whom Gotterson and Philippides JJA agreed).
- Rule 668(1) therefore requires an applicant to satisfy the criterion in either paragraph (a) or (b), and if that threshold is reached, the court then has a discretion under r 668(3) to make orders of the type set out in that subrule.
The grounds for the r 668 application
- The new facts Mr Upton sought to rely on for the purpose of the r 668 application were set out in paragraph 3 of his written submission dated 1 August 2016 to the primary judge:
“a)The Development Approval to subdivide the Property was not renewed and was allowed to lapse on 15 September 2015;
b)The Plaintiff and the Judge relied on the Forbearance Deed in the decision of 10 November after submitting to the court on 1 September that the Deed was not relevant;
c)The quantum of the initial loan (the Loan) to the borrower was about 700% ($480,000) above the maximum borrowing capacity that the Borrower could borrow from the Plaintiff under the relevant lending criteria of the Plaintiff as supported by the Defendant as guarantor;
d)Two subsequent loans to the Borrower and one subsequent loan to an additional guarantor, all forming part of the security for the initial loan (the Loan) also exceed the maximum borrowing capacities of the Borrowers as supported by the guarantors under the relevant lending criteria of the Plaintiff;
e)A number of the loan application forms were altered in a material way by the Plaintiff after the Borrower had signed them without the knowledge or consent of the Borrowers;
f)The initial guarantee for the Loan was signed and provided to the Plaintiff prior to any loan offer being made by the Plaintiff to the Borrower; The Defendant was not, and could not possibly have been, aware of his obligations under that guarantee when it was executed;
g)The subsequent guarantee of 3 December 2008 was altered in a material way by the Plaintiff after the guarantor had signed it without the knowledge of consent of the guarantor;
h)The Plaintiff, in its dealings with these loans and guarantees, breached the following legislation, ASIC Act, Queensland Property Law Act, Corporation Act, Competition and Consumer Act, Trade Practices Act, and Consumer Credit (Qld) Act;
i)The Plaintiff, in its dealings with these loans also breached the Banking Code of Practice (2004 version was applicable) and its own Code of Conduct and its own Principles for Responsible Lending;
j)The Plaintiff failed to comply, and is continuing to refuse to comply with, Rule 211 UCPR – Duty of Disclosure.” (footnotes omitted)
The reasons for dismissal of the r 668 application
- The primary judge noted the application was advanced only under paragraph (b) of r 668(1). The primary judge dealt separately with each of the alleged new facts set out in paragraphs (a) to (j) quoted above as follows.
- Accepting that Mr Upton may not have been aware of the facts set out in paragraph (a) when the summary judgment application was argued before the primary judge on 1 September 2015, the primary judge found that fact did not satisfy the criteria in r 668(1)(b). Even if it qualified as a new fact discovered after the order was made, it was not a fact which, if it had been known at the time, would have made any difference to the orders made by the primary judge. The failure to renew the development approval may be relevant to whether Westpac was taking reasonable care in the exercise of the power of sale under the mortgage, but that was not a matter which was closed off by the orders made by the primary judge on 10 November 2015. It was also not relevant to the question of whether Mr Upton was liable to Westpac for the amount Westpac claimed nor the question of whether the second and third defendants added by counterclaim might be liable to Mr Upton for the reasons that the primary judge had given when giving summary judgment (which appears to be a reference to  and  of the reasons where the primary judge held that any claim for damages by Mr Upton against Westpac could not be set off against Westpac’s claim, but had to be pursued by way of counterclaim, and to - and - of the reasons where the primary judge explained why Mr Upton did not have any arguable cause of action against the receivers).
- With respect to paragraph (b), although counsel for Westpac may have submitted on the summary judgment application that the deed of forbearance was irrelevant, the primary judge had found the deed of forbearance was not irrelevant, in the sense it provided an independent basis of Mr Upton’s liability for the amount owing under the guarantee, although the summary judgment was given on the basis of liability under the guarantee. The primary judge therefore accepted that the deed of forbearance was relevant, but it was not obvious that Mr Upton was prejudiced by the submission that had been made by counsel for Westpac that it was irrelevant.
- Each of paragraphs (c), (d) and (f) asserted facts that were not new facts, as they were facts known to Mr Upton at the relevant times.
- In respect of paragraph (e), it had not been shown there was any material alteration to any relevant document. The document particularly relied on by Mr Upton as having been materially altered was one which related to a different transaction which was not the subject of the claim.
- In respect of paragraph (g), it had also not been shown that the relevant guarantee was altered in a material way by Westpac after Mr Upton had signed it, without the knowledge and consent of Mr Upton. The primary judge noted that Mr Upton “did say that, at one stage, he had sent a signed guarantee which was partly incomplete with various other documents in relation to a loan application to the plaintiff, and the plaintiff, at some stage, had, in connection with approving the loan application, completed the relevant particulars of that guarantee. Plainly, insofar as that document was completed by the plaintiff after it had been signed by the defendant, that the plaintiff did so was something that the defendant knew about and impliedly authorised at the time.” The fact Mr Upton might have forgotten about that did not bring it within r 668(1)(b) and, in any event, it would not have made any difference because, if he chose to sign a guarantee in blank and forward it to Westpac, he authorised Westpac to fill in the necessary and relevant details for the guarantee to enable it to be used to guarantee the transaction.
- With respect to paragraph (h), none of the matters advanced by Mr Upton showed there was any relevant breach of any of the statutes relied upon, but in any event, arguments advanced based on the statutes do not fall within r 668(1)(b).
- Paragraph (i) was not based on new facts, as it was based on new arguments advanced on existing facts within the means of knowledge of Mr Upton at the time of the original hearing.
- Paragraph (j) was also not based on new facts, and the question of disclosure was irrelevant to the applications before the primary judge on 1 September 2015. It was not shown the outcome of the application for summary judgment would have been any different as a result of the making of any relevant disclosure.
Grounds of appeal
- The notice of appeal set out 12 general grounds of appeal that were refined by Mr Upton’s written and oral submissions on the appeal, including his written summary of the oral submissions made on the hearing of the appeal. The active grounds of appeal are:
- the primary judge failed to give proper weight to the new evidence discovered by Mr Upton of the terms of the loan application form and fax header sheet sent by Mr Upton on 13 August 2007 to Mr Brown of Westpac;
- the primary judge failed to take into account that Mr Upton could show that Westpac had altered the loan application form made by Ms Nott in relation to the Bodalla Street property and that there were discrepancies in his execution of the guarantee;
- the primary judge failed to take into account Westpac’s refusal to disclose relevant documents;
- the primary judge erred in not treating the evidence of the receivers’ failure to renew the development application as relevant;
- the primary judge should not have relied on the deed of forbearance, when Westpac’s counsel at the hearing on 1 September 2015 had submitted the deed of forbearance was not relevant to the proceedings.
Were new facts discovered by Mr Upton after 10 November 2015?
- These grounds of appeal relate to evidence adduced before the primary judge on the r 668 application. To the extent Mr Upton submits the evidence amounts to new facts discovered by him after the date summary judgment was ordered on 10 November 2015, Mr Upton must show there was some error of fact or law made by the primary judge in concluding that there were no such new facts.
- Although Mr Upton did not have a copy of the fax header sheet prepared on 13 August 2007 and the accompanying loan application form until he located them after 10 November 2015, the evidence of those documents is of factual matters of which Mr Upton had knowledge prior to 10 November 2015 (as he created the header sheet and sent the documents), even though at the time of the summary judgment application he may have forgotten about the contents of, and sending, the facsimile on 13 August 2007 with the accompanying documents.
- There was no error therefore in the primary judge’s conclusion that this fax header sheet and accompanying loan application form did not constitute facts discovered after 10 November 2015 and therefore did not satisfy r 668(1)(b). The other requirement in r 668(1)(b) is that any facts discovered after the order were made would, if discovered in time, have entitled the person against whom the order was made to a different order. The communications of 13 August 2007 were relevant to the original guarantee given by Mr Upton in respect of the loan made to the borrower on 14 September 2007. It was the subsequent guarantee signed on 3 December 2008 (as varied subsequently) on which Mr Upton was sued by Westpac which was the primary basis of the liability found by the primary judge. Mr Upton’s original guarantee for the business loan that showed Mr Upton’s signature witnessed by Mr Brown of Westpac was dated 14 September 2014 which was the same date on which the mortgage on behalf of the borrower that was the primary security for the business loan was shown as being signed by Mr Upton. Mr Upton made no attempt before the primary judge to address the fact that the offer of the business loan was not made to the borrower until 10 September 2007 and whether there was any meeting with the witness Mr Brown on 14 September 2007. Mr Upton has possibly jumped to a conclusion about the significance of his communications with Westpac on 13 August 2007 that is not consistent with the other evidence that was before the primary judge. Mr Upton does not show the re-discovery of these documents sent to Westpac on 13 August 2007 would have made any difference to the making of the summary judgment order.
- Mr Upton also relies on the emergence of this loan application form as evidence to show that its contents fell short of meeting Westpac’s approval criteria for a business loan and did not show serviceability of the proposed loan, resulting in a submission that Westpac had engaged in “automated loan decision-making”. The argument about automated loan decision-making was not one advanced before the primary judge on the r 668 application or raised specifically in any ground of appeal. It was also based on assumptions made by Mr Upton as to the process undertaken by Westpac in approving the original business loan to the borrower and those assumptions were assertions not supported by any evidence before the primary judge. This argument does not fall within the grounds of appeal, is not of a nature for which any amendment would be allowed to the grounds of appeal at this stage of the proceeding, and therefore should not be considered on the appeal.
- In relation to the primary judge’s failure to take into account the discrepancies that Mr Upton pointed to in the loan application form signed by Ms Nott on 14 August 2008 in respect of the purchase of the Bodalla Street property, Ms Nott was not sued in this proceeding. If the claim against Mr Upton had proceeded to trial, it may not have been an inappropriate forensic approach for Mr Upton to cross-examine relevant officers of Westpac on these perceived discrepancies, in an attempt to impeach their credit or to use any admissions of improper conduct in respect of other transactions for the purpose of drawing inferences concerning Westpac’s conduct in relation to Mr Upton’s guarantee. The problem for Mr Upton is that his speculation about what can be proved in relation to Ms Nott’s guarantee does not have any consequence for his indebtedness to Westpac under the guarantee. It is noteworthy that Ms Nott has not sworn to any facts that would amount to evidence of a material alteration by Westpac to a document completed by her. Mr Upton had also relied on handwriting on the guarantee which he swears was not his and that he never met Mr Perrett who is shown as witnessing his signature on 3 December 2008. The particular handwriting which Mr Upton identifies as not his is the date of 3 December 2008 inserted as the execution date and the answers on the “Form of Acknowledgement” that was required to be attached to the back cover of the guarantee that deals with the steps Mr Upton took about reading the guarantee and obtaining advice, before it was signed. Mr Upton failed, however, to deal in his affidavit with the circumstances in which he did sign the guarantee. Mr Upton makes allegations against officers of Westpac about the handwriting on the guarantee, but the evidence he relied on before the primary judge falls far short of proving there was any material alteration to the guarantee without his authority. Mr Upton has not shown that there was any error in the primary judge’s conclusion that he failed to prove on the r 668 application there was any material alteration to any relevant document.
- Mr Upton is again speculating as to what disclosure by Westpac of relevant documents may have revealed. It appears from - of the reasons that the application for summary judgment was brought a little over a month after Mr Upton filed an amended defence and counterclaim on 5 June 2015. The original business loan made to the borrower on 21 September 2007 by Westpac was an admitted fact by Mr Upton in his defence which meant that the circumstances of the making of that loan were never an issue for disclosure in the proceeding. In any case, the question of what documents may have been revealed on disclosure by Westpac cannot be characterised as facts having the quality required for the threshold issue under r 668(1)(b). Again, Mr Upton has not shown any error in the primary judge’s rejection of his complaints about disclosure on the basis they were irrelevant to the summary judgment application or that Mr Upton had not shown that disclosure would have resulted in a different outcome for the summary judgment application. (It also follows that there was no error in the primary judge’s refusal to allow Mr Upton to file an application under r 225 of the UCPR.)
- The process of reasoning by the primary judge in the reasons with respect to the deed of forbearance as an alternative basis for Mr Upton’s liability under the guarantee cannot be characterised as a fact for the purpose of r 668(1). McPherson JA (with whom Williams JA and Wilson J agreed) doubted in Rockett v The Proprietors – “The Sands” Building Units Plan No 82  1 Qd R 307 at  that the decision of a court could be a “fact” for the purpose of r 668(1). No error has been shown in the primary judge’s rejection of the primary judge’s reliance on the deed of forbearance in the reasons as a new fact.
- The failure of the receivers to renew the development application was ascertainable between the hearing on 1 September 2015 and the giving of summary judgment on 10 November 2015. It was not a fact that arose after the orders were made on 10 November 2015. In any case, any right which accrued to Mr Upton in respect of the power of sale by the receivers, as a result of their failure to renew the development application, was relevant to the counterclaim against Westpac and not the issue of whether there was liability under the guarantee for the primary debt for which there could be no set off. No error is shown in the primary judge’s approach to this issue.
- Although Mr Upton supported his r 668 application before the primary judge with extensive material and submissions which were largely repeated on the appeal to this court, he cannot impugn the primary judge’s conclusion that no new facts were relevantly discovered by Mr Upton after 10 November 2015 to fulfil the threshold issue under r 668(1)(b).
Mr Upton’s affidavit filed on 5 September 2016
- Westpac did not object to Mr Upton’s relying on an affidavit he filed in connection with this appeal on 5 September 2016. The affidavit exhibits Mr Upton’s affidavit sworn on 4 August 2016 that the primary judge refused leave to Mr Upton to file and read on the hearing of the r 668 application. The content of that affidavit was largely repeated in submissions before the primary judge on 5 August 2016 and to the extent that it relates to the conduct of the receivers in respect of the sale of the mortgaged property could have had no bearing on the outcome of the r 668 application. There was no error in the primary judge’s refusal to allow the affidavit to be filed. The content of Mr Upton’s affidavit filed on 5 September 2016 deals with many of the arguments that were repeated in the material that was before the court on this appeal and recorded Mr Upton’s recollection of what occurred before the primary judge on 5 August 2016, much of which is reflected in the transcript of the hearing that is incorporated in the record for the purpose of this appeal. There is nothing additional in the affidavit of 5 September 2016 that assists Mr Upton on this appeal.
- It follows that the orders should be:
- Appeal dismissed.
- The appellant pay the respondents’ costs of the appeal.
- Published Case Name:
Upton v Westpac Banking Corporation & Ors
- Shortened Case Name:
Upton v Westpac Banking Corporation
 QCA 171
Fraser JA, Gotterson JA, Mullins J
11 Aug 2017
|Event||Citation or File||Date||Notes|
|Primary Judgment||DC1244/15 (No Citation)||05 Aug 2016||-|
|Notice of Appeal Filed||File Number: Appeal 8886/16||01 Sep 2016||-|
|Appeal Determined (QCA)|| QCA 171||11 Aug 2017||-|