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  • Unreported Judgment

National Australia Bank Ltd v Bluanya Pty Ltd

 

[2018] QSC 49

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

National Australia Bank Ltd v Bluanya Pty Ltd & Anor [2018] QSC 49

PARTIES:

NATIONAL AUSTRALIA BANK LIMITED
ABN 12 004 044 937

(plaintiff)

v

BLUANYA PTY LTD ACN 113 609 626 AS TRUSTEE FOR THE WILLIAMS FAMILY TRUST NO 2

(first defendant)

TANYA LYNETTE WILLIAMS

(second defendant)

FILE NO:

BS 7979 of 2015

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

12 March 2018

DELIVERED AT:

Brisbane

HEARING DATE:

14 July 2017

JUDGE:

Brown J

ORDER:

The orders of the Court are:

  1. That the whole of the amended defence and counterclaim be struck out and the defendants be given liberty to replead.
  1. That the further amended defence and counterclaim be filed and served by 30 April 2018.
  1. That summary judgment is refused.
  1. That the parties provide submissions as to costs by 20 March 2018.
  1. That the matter be listed before Mullins J for review at 9:15 am on 7 June 2018.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – where the plaintiff applies for summary judgment pursuant to r 292 of the Uniform Civil Procedure Rules 1999 (Qld) against the second defendant in relation to part of the claim – where the dispute arises from the alleged default of the defendant of loan agreements between the plaintiff as lender and the defendants as borrowers – where the plaintiff seeks orders that the second defendant deliver up possession of the land subject of the loan agreement or otherwise pay moneys to the plaintiff pursuant to the agreement – where the second defendant claims misleading and deceptive conduct and on the basis that the plaintiff breached the agreement – whether the defendant has no real prospect of successfully defending the relevant part of the plaintiff’s claim – whether there is no need for a trial of the relevant part of the plaintiff’s claim

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – where the plaintiff seeks, in the alternative, an order that certain paragraphs of the amended defence and counterclaim be struck out pursuant to r 171 of the Uniform Civil Procedure Rules 1999 (Qld) or the inherent jurisdiction of the Court – where the plaintiff complains that paragraphs of the pleading variously: fail to plead material facts; fail to plead particulars; do not disclose any reasonable cause of action; have a tendency to delay or prejudice a trial; are false and scandalous; are vague; are irrelevant; and are an abuse of the court process – where the second defendant is self-represented – whether the application to strike out should be granted for all or part of the amended defence and counterclaim

Uniform Civil Procedure Rules 1999 (Qld) rr 171, 292

Commercial Bank of Australia v Amadio (1983) 151 CLR 447

Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232

Schultz v Bank of Queensland [2014] QSC 305

Thorne v Kennedy (2017) 350 ALR 1

Willmott v McLeay [2013] QCA 84

Yerkey v Jones (1939) 63 CLR 649

COUNSEL:

M S Trim for the plaintiff

The second defendant appeared on her own behalf

SOLICITORS:

Gadens Lawyers for the plaintiff

The second defendant appeared on her own behalf

The nature of the application

  1. This is an application brought by the plaintiff for summary judgment pursuant to r 292 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) against the second defendant in respect of the relief sought at paragraphs 2(a) and (c) of the claim, seeking orders that:
  1. Within 28 days, the second defendant deliver up to the plaintiff possession of the land described as Lot 8 on SP 153666, County of Flinders, Parish of Uxbridge, Title Reference 50484703 and known as 8/10 Ocean Beach Drive, Agnes Water in the State of Queensland; and
  1. The second defendant pay to the plaintiff the sum of $445,420.95 plus interest pursuant to the home loan facility.
  1. In the alternative, the plaintiff seeks an order that certain paragraphs of the amended defence and counterclaim be struck out pursuant to r 171 of the UCPR or the inherent jurisdiction of the Court.
  1. The application is only directed to part of the claim of the plaintiff and does not seek relief in relation to the overdraft facility or from the first defendant, not does it seek judgment in relation to the counterclaim.
  1. The second defendant appeared for herself although she had the assistance of Ms Keys who describes herself as a “self employed advocate” providing “professional advocacy (paid and unpaid) to customers in dispute with their Bank(s) or otherwise Creditor(s)”.[1] She has been acting as the second defendant’s advisor throughout. It was not apparent whether she has any legal qualifications.  It is unfortunate given the complexity of the defences and claims the second defendant has sought to raise that she does not have legal representation. 

Background

  1. The application for summary judgment was first filed by the plaintiff on 31 March 2016 after a lengthy exchange of correspondence between the plaintiff and the defendants for over 12 months. On 19 May 2016 consent orders were made providing, inter alia, for the defendants to file and serve any amended defence and counterclaim by 9 June 2016 and adjourning the summary judgment application. On 15 June 2016 the defendants filed an amended defence and counterclaim. On 29 June 2016 the plaintiff filed a reply and answer to the amended defence and counterclaim. On 24 February 2017 the plaintiff filed an amended application and two supporting affidavits.
  1. The second defendant’s case appears to be that following the tragic death of her husband in 2009, she tried to negotiate with the bank in relation to an overdraft facility for which the second defendant is the guarantor and in relation to the home loan facility for which she was the borrower. Following her husband’s death, the application was granted for hardship assistance which included, amongst other things, a reprieve from repayments for a period of approximately 12 months in respect of the overdraft facility of the first defendant.[2]  In oral submissions she submitted that that was six months, not twelve months. 

Matters not in issue

  1. The following matters are admitted by the second defendant in her amended defence:
  1. The second defendant is and was at all material times, the registered proprietor of Lot 8 on SP 153666, County of Flinders, Parish of Uxbridge, Title Reference 50484703 (the property);
  1. The plaintiff is and was at all material times the mortgagee of the property under the registered mortgage No 709519654 (the mortgage) executed by the second defendant on 13 February 2006 and the plaintiff on 14 February 2006 and registered in the office of the Registrar of Titles on 13 April 2006;
  1. The mortgage was subject to the terms and conditions set out in the standard terms document No 704919519 filed in the office of the Registrar of Titles (the Memorandum);
  1. The Memorandum included the terms that:

 (i) The second defendant is in default if:

  (A) The second defendant does not pay the amount owing when due for payment;

 (B) The second defendant does something the second defendant agreed not to do, or the second defendant does not do something she agreed to do under the mortgage or another agreement covered by the mortgage.

  1. If the second defendant is in default for more than one day and:
  1. The plaintiff has given the second defendant a default notice allowing the second defendant a period of at least 31 days from the date of the notice to remedy the default; and
  1. Any notice is not complied with;

then the plaintiff may do any or more of the following in addition to anything else the law allows the plaintiff to do as mortgagee, at its option, without the need to give further notice or demand and despite any agreement to the contrary:

  1. Treat the amounts owing as immediately due and payable; and
  1. Sue the second defendant for the amount owing.[3]

(e) The plaintiff as lender and the second defendant as borrower entered into the home loan facility on 13 February 2006, pursuant to which the plaintiff provided financial accommodation to the second defendant up to the sum of $463,000;

  1. The home loan facility is subject to the terms and conditions contained in the letter of offer dated 17 January 2006, the facility agreement details and the facility agreement general conditions dated November 2005;
  1. The general conditions of the facility agreement state “The borrower is in default if you do not pay on time any amount due under this agreement or another loan agreement you have with us”; and
  1. The general conditions of the facility agreement state that if the borrower is in default a notice may be given stating that a default has occurred, and if that default is not remedied the total amount owing becomes immediately due for payment notwithstanding other requirements that the borrower may then be sued for that amount and/or the security enforced.
  1. The second defendant pleads additional terms of the facility agreement and that the Uniform Consumer Credit Code applies to the loan agreement.[4]

Matters in dispute

  1. The defence raised by the second defendant is that misrepresentations were made by the plaintiff.[5]  Relevantly the amended defence pleads that:
  1. In 2012 the second defendant was a partner in Agnes Water Ray White Real Estate Agency (the Agency); and
  1. The business being the Agency held a business overdraft with the plaintiff; and
  1. The Agency loan account held with the plaintiff was in the name of Agnes Water Ray White Real Estate Agency 1770; and
  1. In December 2012 the second defendant sought hardship assistance on the home loan facility;
  1. The plaintiff misrepresented to the second defendant that hardship assistance was not available on the home loan facility until the second defendant cleared the overdraft facility for the “Agency”;
  1. At the time the plaintiff had increased the minimum monthly repayments for the home loan facility to $3,400 per month, with repayments to the business overdraft at $200 per month, in addition to repayments to the overdraft facility at $980 per month; and
  1. The plaintiff had set the repayments to the home loan facility above the scheduled principal and interest repayments;
  1. The plaintiff had set the repayments for the overdraft facility in breach of the facility terms and conditions;
  1. Due to the plaintiff’s misrepresentation regarding payments required to be made to the business overdraft, to access hardship variation to the home loan facility the second defendant paid $8,000 into the business overdraft held with the plaintiff;
  1. Had the plaintiff not made the misrepresentation the second defendant would have paid the $8,000 into the home loan facility;
  1. Following the payment of $8,000 being made the plaintiff failed to make good on its promise to effect the requested variation to the home loan facility;
  1. On 12 September the plaintiff misrepresented to the second defendant that if she made a payment of $22,000 to the home loan facility, the plaintiff would agree to vary repayments from $3,400 per month (above the principal and interest payments) to the interest only rate to assist the second defendant during a period of financial hardship;
  1. As a consequence of the misrepresentations, the second defendant paid $22,000 into the home loan facility on the 13 September; and
  1. Notwithstanding the payment being made by the second defendant, the plaintiff failed to make good on its promise to effect the requested variation to the Home Loan Facility.
  1. It is also pleaded that the notices of demand that were provided as to default were defective or misleading and deceptive but the pleading fails to identify how the notices were misleading and deceptive.
  1. The second defendant also claims that the conduct of the plaintiff was unconscionable although that conduct does not all relate to the home loan facility. Unconscionable conduct is pleaded in paragraphs 40 to 55 of the amended defence. While it is difficult to discern what the conduct is which is actually said to be unconscionable, the defence would appear to be on the basis that:
  1. The second defendant was refused access to the external dispute resolution during negotiations concerning the terminated overdraft facility;
  1. The plaintiff did not provide genuine consideration of the defendants’ full financial situation and the plaintiff’s subsequently breached clause 25.2 of the Code of Banking Practice (2004);
  1. The second defendant was disadvantaged by misrepresentations made by the plaintiff in calculating and communicating the relevant arrears information relating to the home loan facility whereby the plaintiff relied on any errors resulting from that misrepresentation to deny its previous promise to vary the repayment types for that facility;
  1. The plaintiff failed to inform the second defendant of any relevant information such as the availability of referring the dispute to the relevant external dispute resolution scheme, being the Financial Ombudsman Service (FOS);
  1. The second defendant suffers from a hearing impairment; the plaintiff failed to provide the second defendant with access to a service that enabled her to fairly deal and negotiate with the bank as to the repayments to the loan during the period of hardship assistance and the plaintiff’s conduct was excessive and unjust in all of the circumstances, which includes the fact that the second defendant was suffering a physical disability, namely a hearing impairment;
  1. The second defendant was further disadvantaged by the plaintiff’s misrepresentations, being unduly influenced to deposit moneys into the agency overdraft to access hardship assistance on the home loan facility;
  1. The second defendant was disadvantaged by the plaintiff’s misrepresentation leading to the payment of $22,000 to the home loan facility on 13 September 2013 being a sum borrowed from a third party and only provided on the basis that the funds would affect the requested variation of the home loan facility;
  1. It is alleged by the defendants that, had the plaintiff not engaged in the unconscionable conduct, the second defendant:
  1. Would have overcome her financial difficulties;
  1. Would not have suffered financial loss relating to the handling of the dispute;
  1. Would not have suffered ongoing substantial stress and inconvenience relating to dealing with the dispute between 2012 to the current date; and
  1. Would not have suffered stress related complications affecting her hearing impairment.
  1. Paragraph 59 of the amended defence seeks, where permitted, a set off against any relief granted to the plaintiff as a result of any or all of the relief claimed within the counterclaim.
  1. The counterclaim seeks relief in relation to the alleged misleading and deceptive conduct and unconscionable conduct alleged, at least in part in the amended defence.

Summary judgment

  1. The principles of summary judgment are well-established. Pursuant to r 292(2) of the UCPR, the Court may give judgment for the plaintiff against the defendant for all or part of the plaintiff’s claim and may make any other order the Court considers appropriate if the Court is satisfied that:
  1. The defendant has no real prospect of successfully defending all or part of the plaintiff’s claim; and
  1. There is no need for a trial of the claim or part of the claim.
  1. In Deputy Commissioner of Taxation v Salcedo,[6] Williams JA (with whom               McMurdo P and Atkinson J agreed) stated:

“… ultimately the rules are there to facilitate the fair and just resolution of the matters in dispute.  Summary judgment will not be obtained as a matter of course and the judge determining such an application is essentially called upon to determine whether the respondent to the application has established some real prospect of succeeding at trial; if that is established then the matter must go to trial. …”

  1. The onus is on the applicant to prove the claim, but once a prima facie case has been made out entitling the applicant to judgment, then the evidentiary onus shifts to the respondent.[7]  In Willmott v McLeay,[8] Holmes JA[9] (with whom Fraser and White JJA agreed) concluded that even where the requirements of r 292(2) are met, the Court retains the ultimate discretion in deciding whether to award summary judgment.[10]
  1. In the present case the plaintiff submits that summary judgment ought to be granted because:
  1. There is evidence to support the relevant allegations in the plaintiff’s statement of claim;
  1. The allegations of fact made in the amended defence are not supported by evidence;
  1. The conclusions of law contended for in the amended defence are not supported by the material facts pleaded; and
  1. The second defendant has not placed before the Court evidence of any matters that would justify resisting the plaintiff’s claim and the plaintiff submits that there is no such evidence.
  1. While summary judgment was sought in relation to the claim for moneys owing under the home loan facility and recovery of possession of the property securing the home loan facility, the plaintiff did not seek summary judgment in relation to the overdraft facility or the second defendant’s counterclaim. Those matters were the subject of a strike out application where liberty to replead was not opposed. Both the defence to the claim of default on the home loan facility and the counterclaim plead that the plaintiff has engaged in misleading and deceptive conduct and potentially unconscionable conduct in respect of the home loan facility. That required me to consider the potential for any repleaded counterclaim to raise a potential defence to the claim of default with respect to the home loan facility, in determining whether to grant summary judgment. The prospect that the second defendant may improve her position by proper amendment to the pleadings is a basis upon which summary judgment may be refused.[11]
  1. The fact that the second defendant is self-represented, albeit with the aid of Ms Keys, is a matter which requires the Court to exercise caution to ensure that she is not deprived of the opportunity to have her claim, if any, determined according to law. However in doing so, one must also recognise that the Courts do not permit litigants, even unrepresented litigants, to prosecute claims which cannot proceed fairly to other parties.[12] The function of pleadings is to ensure procedural fairness by ensuring that a case is pleaded in accordance with the law and the procedural rules of this Court so that the other party is aware of the case it must meet.

Preliminary matter

  1. At the outset of the hearing the plaintiff objected to lengthy affidavits of the second defendant and her advisor, Ms Keys, which had been served on 10 July 2017. The plaintiff’s material had been served on 22 May 2017. That was some three weeks in advance of the time ordered by the Court on 28 March 2017. By that order, the second defendant was to file and serve her material by 30 June 2017 and any material in reply was to be filed and served by 7 July 2017. A large amount of material was served late and at the hearing the second defendant raised other affidavit material previously filed but of which she had given no notice to the plaintiff. I determined that the application should proceed on the basis that the second defendant could rely on the material referred to in her submissions. The plaintiff then made a largely successful objection to the material referred to as “collection notes” on the basis that it was “without prejudice” material provided to the Financial Ombudsman Service.[13]  Although the objection was largely successful, it appears that a number of those documents which are said to consist of collection notes containing, inter alia, conversations between officers of the bank and the second defendant may be disclosable in this litigation. The material was relied upon by the second defendant particularly to support the case that the plaintiff had made representations which were said to be misleading and deceptive.
  1. While the objection of the plaintiff was upheld it resulted in the Court being aware such documents exist and that they may be relevant to the second defendant’s claim, without being able to ascertain whether that is in fact the case. I therefore have to consider whether there is a prospect that the disclosure of any of that material could affect the considerations going to the granting of summary judgment, particularly in terms of the submission made by the plaintiff that the second defendant had no evidence to support her claim.

The plaintiff’s case

  1. The plaintiff has led evidence of the default of the home loan facility and the issuing of notices of demand which were not complied with by the second defendant.
  1. Ms Valentine-Vijendra[14] is a senior recovery associate in the small business recoveries team of the plaintiff.  On the basis of her review of the documents contained in the paper and electronic file maintained by the plaintiff in relation to the proceedings, and her personal knowledge, she states that a payment was made to the home loan facility in the amount of $2,000 on 22 September 2014.  No further payments in respect of the home loan facility were received from that date until 4 April 2016.  She further states that the bank received payments on the home loan facility of $1,018, $1,130.30 and $1,516 on 4 April 2016, 2 May 2016 and 1 June 2016 respectively, and that no further payments in respect of the home loan facility had been received after that date.[15]  The latter payments were not made on the basis of any arrangement with the plaintiff. The evidence establishes that prima facie the second defendant was in default of her obligations under the facility terms.
  1. The affidavit of Ms McKee confirmed the outstanding amounts which were the subject of the notice and letter of demand.[16] The payout figures were confirmed by the affidavit of Ms Eruera on the basis of the payout figures recorded on the plaintiff’s electronic records which were the figures used in the notices of demand.[17]  In respect of the home loan facility, there is no evidence that the amount outstanding is incorrect. 
  1. Prima facie the bank is entitled to judgment on the home loan facility and to recover possession pursuant to the terms of the mortgage.
  1. The gravamen of the plaintiff’s contention is that it is entitled to summary judgment because the defendant’s case lacks any proper factual basis and the pleaded case as to causation cannot give rise to the damages claimed. The plaintiff complains that the second defendant has not provided any sworn evidence deposing as to a factual basis supporting the allegations of misrepresentations being made and of defects in the default notice. The plaintiff contends that reference to such representations in vague terms in paragraphs 44 to 116 of an unsworn affidavit of the second defendant does not give details of the conversations which allegedly occurred.
  1. According to the plaintiff, even if one accepts the matters in paragraphs 37 to 39 of the amended defence, which plead the conduct said to constitute the misrepresentations, those matters did not cause the second defendant to fail to pay the amounts owing over several years nor excuse the failure to pay. The alleged misrepresentations were made in 2012 and on a non-specified date in September.[18]  According to the plaintiff, the conduct complained of cannot be of any relevant causal effect for the second defendant’s failure to pay the amount owing on the home loan facility.
  1. There is no doubt, given the history of the matter, that the plaintiff has sought particulars of the allegations and raised the deficient nature of the previous defence on numerous occasions in 2015 to 2016.[19] The amended defence and counterclaim were struck out by consent in May 2016 and the defendants were given the opportunity to replead.
  1. The second defendant in an unsworn affidavit outlines the facts which have been pleaded in the amended defence, albeit in vague and general terms. The submission by the plaintiff is that the Court should be reluctant to place any weight on the allegations as they are unlikely to be proved to be true, particularly given the absence of any contemporaneous records of such conversations. That however is a matter for trial.
  1. In terms of the contention that the second defendant has not met the evidential onus in relation to her defence of the claim of default on the home loan, there is also a possibility that some of the evidence may be available with disclosure particularly of the collection notes. The lack of particularity and factual evidence provided by the second defendant is a particular focus of the plaintiff’s contention that it should be granted summary judgment. While the plaintiff submitted that the second defendant had not identified what the documents are and how they would assist her claim, she has raised the collection notes in her submissions in support of the claim of misleading and deceptive conduct. As stated above, that evidence was excluded as it was provided to FOS on a “without prejudice” basis, but it may still be disclosable in this litigation. Those documents may provide evidence supporting the second defendant’s case, given that they appear to be the plaintiff’s notes of the progress of the accounts and its dealings with the second defendant. This should not be taken to suggest that the second defendant can avoid pleading material facts or providing proper particulars on the basis of the non-disclosure of such documents. The second defendant is obliged to plead her case with adequate facts to support the allegations made. She is not permitted to defer doing so on the basis that the plaintiff’s documents may disclose such a case. It is relevant in the context of the present application because the plaintiff submits that the second defendant has provided no evidence to support her case nor identified any prospect of doing so.
  1. Given the above, I will proceed to consider the application for summary judgment, by assuming that the second defendant is able to factually support the matters raised in defence of the home loan facility in order to determine whether she has raised a defence or may raise such a defence by amendments which has any real prospects of success. This approach considers the second defendant’s case at its highest. Of particular relevance to this consideration is the contention of the plaintiff that even if the second defendant’s case is considered at its highest, the matters raised by the second defendant have not caused the second defendant to default under the home loan facility.
  1. In this regard, the principal arguments contended for by the plaintiff are that:
  1. The second defendant has been in default and has made only 3 payments since September 2014 and has failed to meet even the interest only payments;[20]
  1. The pleading that the notice of default and demand are defective and misleading and deceptive are speculative and the evidence of the plaintiff establishes that the notices are correct;
  1. The pleading of unconscionable conduct does not plead an arguable case nor give rise to any relief which would negate the default by the second defendant under the home loan facility.
  1. The matters pleaded in the amended defence with respect to the home loan facility are that the second defendant made two payments, one of $8,000 and one of $22,000, to the plaintiff in reliance on separate misrepresentations said to be misleading and deceptive. The first payment of $8,000 was to pay the business overdraft for the Agency of which she was a partner, after allegedly being told by a representative of the plaintiff in or around December 2012 that payments owing on the Agnes Water Ray White Real Estate 1770 facility needed to be finalised before the plaintiff would vary the home loan facility of the second defendant to interest only repayments to assist with her financial hardship. The second defendant submits that she then made that payment in reliance on the representation and would not have done so otherwise, and that the plaintiff did not subsequently vary the repayment so as to reduce the repayments on the home loan facility following that payment being made.
  1. The second defendant further alleges that on 12 September, the plaintiff represented to the second defendant that if she made a second lump sum payment to the home loan facility of $22,000, the plaintiff would vary the home loan facility repayments to interest only. Accordingly the second defendant made the payment but the plaintiff did not vary the repayments required to be made.[21]
  1. The amended defence does not plead in [37] how the alleged misrepresentations caused the second defendant to be in default of the home loan facility. The counterclaim does however plead the loss or damage caused by the two misrepresentations.
  1. The consequence of the plaintiff’s conduct complained of in relation to the payment of the $8,000 is pleaded in paragraph 48 of the counterclaim, namely that the second defendant: (i) would not have made the payment; and (ii) may have taken steps to dispose of the security property for the home loan facility whilst property prices were increasing.  It is further pleaded in (iii) that she was denied the opportunity to manage other debts and improve her financial position. In (iv), it is alleged that, had the misrepresentation not taken place, the second defendant would have sold the property for a value of not less than $700,000, paid down all the debt owed to the plaintiff and obtained a net positive outcome of approximately $160,000. There is a further particular of damage in (v) which is incomprehensible.
  1. Paragraph 54 of the counterclaim pleads the consequences of the second alleged representation and the particulars of damage plead, inter alia, that had the representation giving rise to the payment of $22,000 not been made: (i) the payment would not have been made; (ii) the second defendant may have sold the property; (iii) the second defendant lost the opportunity to manage other debts and improve her financial position; and (vi) the second defendant would have sold the property for a value of not less than $600,000, paid all the debt owed to the plaintiff and obtained a net positive outcome of approximately $60,000.
  1. It appears that some relief was given to the second defendant by the plaintiff to make interest only repayments in November 2013 but only until February 2014, on the basis that the second defendant was to sell the property, which the second defendant was unable to do, at least for a sufficient value to clear the debt.[22]
  1. The only evident basis upon which the above loss could have affected the second defendant avoiding default of the home loan facility in reliance on the misrepresentations is if she could have, at the time the representations were made, taken other steps to meet her obligations under the home loan facility if she had not paid the $8,000 or $22,000 in reliance on the representations to avoid default, which is suggested by (iii) of the relevant particulars of damage in the counterclaim, although it is not adequately particularised. Given the amount of the payments which could have served as repayments for a period of time I am not persuaded on the basis of the evidence before me that such a claim cannot be properly raised and pleaded by the second defendant.
  1. There is presently little else to suggest that the second defendant would have been in a position to do anything to avoid the home loan facility being in default and there is a strong case for the granting of summary judgment against the second defendant in relation to the home loan facility if the second defendant is unable to plead an adequately particularised case that she would have been able to avoid the home loan facility being in default by taking other steps. I have outlined the difficulties with the alleging she would have successfully sold the property below.
  1. Contrary to the second defendant’s present approach, such a case cannot be premised on the plaintiff having fulfilled its alleged representations to grant hardship assistance and reduce the payments to be made.
  1. In determining whether there is a causal connection between the alleged offending conduct and the loss or damage said to have been suffered, the person concerned must show that they have been induced to do something or refrain from doing something which gives rise to damage or have been influenced to do or refrain from doing something giving rise to damage by the conduct.[23]  The question of what the position would have been “but for” the misrepresentation may have relevance in assessing whether the alleged conduct caused the loss.
  1. There is a real question as to whether the alleged misleading and deceptive conduct caused the second defendant to be in default, given that the second defendant stopped paying any repayments in September 2014 and only made three repayments in 2016. That suggests that even if the alleged misleading and deceptive conduct had not taken place, the second defendant would have still been in default. When the Court asked the second defendant about the lack of payment she stated, inter alia, “Well, why would you pay any money when you’ve been – when you’ve been bullied the whole time?”[24] However, if the second defendant is able to properly articulate a case that if the alleged misrepresentations had not been made she could have taken steps to manage her other debts and improve her financial position such that she may have been able to avoid default of the home loan facility, that will raise a triable issue.
  1. There is presently no reasonably arguable defence disclosed by [37] of the amended defence. In addition to the matters considered above, the pleading of the alleged misrepresentations has not been adequately particularised for the reasons set out in relation to paragraphs 40 and 49 of the counterclaim. Paragraph 37 presently has a tendency to prejudice or delay the fair trial of the proceedings.
  1. Paragraphs 38 and 39 of the amended defence plead that the notice of demand that was issued was defective and misleading and deceptive and denies that the second defendant was in breach because of that fact. It pleads that disclosure is required to complete the pleading.
  1. To the extent that it is said that the notice provided to the second defendant was misleading, no particularisation has been given as to how it was misleading, notwithstanding continued requests by the plaintiff for the second defendant to particularise the basis upon which it is said to have been misleading.[25]  In this regard I note that the affidavit of Ms Valentine-Vijendra confirms the amounts pleaded in the statement of claim. There is no evidence that the notice was misleading.  It is a matter of bare assertion. The unsworn affidavit of the second defendant did not set out the basis for the assertion nor does the pleading.[26]
  1. At present, paragraphs 38 and 39 are without any pleaded factual basis. The second defendant in order to plead such a case must plead some facts suggesting that the notice was defective and misleading and deceptive and how she relied upon such a notice. Those are matters for which she must have sufficient facts in order to plead such a case now even if some particulars are to be provided after disclosure. At present there is no reasonably arguable defence disclosed by those paragraphs.
  1. I am not presently satisfied on the state of the evidence that the second defendant has no prospect of pleading a case supported by facts which has some prospect of success or that it is so devoid of any factual basis that summary judgment should be granted. The second defendant’s unsworn statement does provide some support for the alleged misrepresentations having been made, albeit in insufficient detail, and some of the matters raised in the particulars of damage in the counterclaim may, if supported by particulars of fact, raise a defence to the alleged default by the second defendant under the home loan facility. In that event, there will be a triable issue. Whether that proves to be the case or not will be evident when the second defendant repleads the amended defence and counterclaim. Granting summary judgment now in the face of liberty to replead being given for the counterclaim may lead to conflicting decisions notwithstanding the limited relief sought for the counterclaim. While it was a finely balanced decision, a party must meet a high bar to obtain summary judgment and in this case it presently has not been met.
  1. I will however strike out paragraphs 37 to 39 for the reasons set out above.
  1. The second defendant also submitted that summary judgment should not be granted because it is not possible to decide fairly the issues affecting just the home loan facility without considering matters relating to the overdraft facility which she says impacted on her capacity to meet home loan repayments. That case has not been articulated. It is difficult to see how such a case could be pleaded since there are two different facilities which were granted to two different parties such that the second defendant holds the primary liability under the home loan facility and is guarantor of the overdraft facility. While the second defendant may perceive that the matters are interconnected, whether there is a pleadable case is a different question and I would not have refused summary judgement on this basis.

Strike out application

  1. The applicant seeks to strike out a number of paragraphs in the remainder of the amended defence and counterclaim. The plaintiff provided a schedule of its objections to each paragraph, having set out the principles relating to a strike-out. In relation to the strike out application, I will go through paragraph by paragraph.

Amended defence

  1. Paragraph 6(a): a complaint is made that the pleading “denies the plaintiff’s claim to that security” on the basis that it is unclear whether the pleading is referring to either the guarantee or the mortgage and does not provide a basis upon which the defendants deny the plaintiff’s entitlement to security. On a proper analysis, paragraph 6(a) evidently refers to the “mortgage” as security for the guarantee. The second defendant has stated that there are other legal obligations which may affect the operation of the security. This contention presumably goes to the reference to “liability” of the second defendant. The defence is unresponsive to what is pleaded. The statement of claim does not in [8] plead the factual basis of the second defendant’s liability. As the second defendant has pleaded the legal bases for challenging the second defendant’s liability rather than factual matters giving rise to those legal bases, an explanation as to the denial is not necessary, although of course, the second defendant will be limited to the legal bases which the second defendant has pleaded as basis to challenge the guarantee in the amended defence and counter-claim. On that basis I will not strike the allegation out.
  1. Paragraph 7(c): the complaint made by the plaintiff is that it cannot make sense of the pleading and that it does not contain any material facts that are relevant to the issues in dispute. According to the second defendant’s submission, the paragraph is intended to make a statement of fact in relation to the guarantee that the plaintiff was aware that the business overdraft was for the second defendant’s late husband’s business and relied on his labour. That is said to be relevant to the defence set out in Yerkey v Jones.[27]  Paragraph 7(c) is however directed to the overdraft facility not the guarantee.  The paragraph does not disclose a reasonable defence to the allegations as to the overdraft facility and as such should be struck out.
  1. Paragraph 9: the complaint made is that the matters pleaded at 9(a) are irrelevant as the “variation” pre-dates the mortgage. The statement of claim pleads that the mortgage was executed by the second defendant on 13 February 2006 and by the plaintiff on 14 February 2006. It is pleaded that the mortgage also secured the moneys relating to the liability of the second defendant under the guarantee dated 14 December 2007. The variation post-dates the mortgage but pre-dates the guarantee. The complaint of the plaintiff is misdirected. The letter of 10 December 2007 appears to be relied upon as a variation of the overdraft facility which is the subject of the guarantee in [12] of the statement of claim. As to the complaint that the remaining matters do not disclose any reasonable cause of action as the matters were all within the plaintiff’s rights under the relevant facilities, the second defendant’s case appears to be that the plaintiff expired or terminated the overdraft facility when it was not entitled to do so as there was no expiry date and the second defendant relies on various terms pleaded in 9(c) and 9(h). I consider that while it is poorly pleaded, it does disclose a reasonable defence to which the plaintiff can respond. I would not strike out paragraph 9 of the amended defence.
  1. Paragraph 10: the complaint is made that the matters pleaded in paragraph 10 do not support the conclusion contended for and do not disclose any reasonable cause of action. The second defendant claims that the defence relates to the breach of contract that followed the “unjust” transaction and “wrongful” termination of the account. There are a mixture of allegations made insofar as paragraph 10 states that the first defendant was reliant on the second defendant’s husband and his ability to work, that the plaintiff breached clause 25.1 of the Code of Banking Practice when it formed its opinion on the capacity of the first defendant to pay the loan, and that in terminating the facility the plaintiff did so in breach of the overdraft facility terms and conditions. It is evident that the conclusion in subparagraph (g) does not flow from the matters preceding in that paragraph. The conflation of matters, including that the second defendant was placed in a disadvantaged position do not support the allegation that the plaintiff is unable to rely on the mortgage security for the overdraft facility. Non-compliance with the Code of Banking Practice does not of itself have the consequence that a mortgage facility cannot be relied upon. The position of the second defendant being placed at a disadvantage by the entry into the overdraft facility also does not reveal any reasonable defence. The paragraph should be struck out as it discloses no reasonable cause of action or defence.
  1. Paragraph 13: The plaintiff complains that the defendants do not plead the manner in which the plaintiff is said to have breached the Code of Banking Practice and none of the allegations in this respect are particularised such that the plaintiff is unable to identify or respond to the case pleaded against it. The second defendant contends that the plaintiff, had it not breached the Code of Banking Practice in determining the repayment capacity of the first defendant, would not have granted the loan and thus the guarantee would not have taken place. That is not what is pleaded in paragraph 13 of the amended defence. Further, paragraph 12 relates to an increase in the facility not the grant of the facility itself. The amended defence does not plead any facts supporting an allegation that the plaintiff failed to exercise due care and skill in selecting and applying the credit assessment methods and forming an opinion about the ability of the first defendant to repay the loan. If the defendant intends to pursue such a cause of action, it needs to properly set out the material facts relied upon in order to support any claim it seeks to make. Accordingly paragraph 13 should be struck out, save for the admission.
  1. Paragraph 14 (save for the admission): The complaint of the plaintiff is that matters pleaded at paragraphs 14(a) and (b) are not proper bases upon which the plaintiff can be prevented from relying on the guarantee or the property. It further complains that paragraphs 14(c) and (c) (sic) fail to plead or particularise the allegations of breach. It is further said that paragraph 14(e) does not contain an allegation of fact to which the plaintiff can plead. The second defendant relies on the defence as per Yerkey v Jones in (e).  In the present case, however, no basis for the principle in Yerkey v Jones has been pleaded.  In order to plead a case to raise a defence under the second limb of Yerkey v Jones one must plead facts capable of establishing that:
  1. The wife did not understand the effect of the document or the nature of the transaction or suretyship;
  1. The wife is a volunteer in the transaction;
  1. The creditor has notice that the surety is a wife reposing trust and confidence in her husband;
  1. The lender has failed to take steps to explain the transaction of suretyship unless it appears that an independent third party has done so.

The matters pleaded do not support such a case.

  1. Subparagraphs 14(a)-(e) are directed to the position of the plaintiff in the grant of the overdraft facility in the first place and have no apparent relevance to the assertion that the plaintiff cannot rely on the guarantee. Subparagraph 14(b) raises no defence and is irrelevant. Subparagraph 14(c) suffers from the same difficulty in not pleading facts to support the alleged breach of the Code of Banking Practice. Further, to the extent that it is alleged in 14(d) that there was a series of breaches, that is not supported by any material facts. As to 14(e), further matters would have to be pleaded to raise the Yerkey v Jones equity.  Paragraph 14, save for the admission, will be struck out.
  1. Paragraph 16 (save for the admission): The plaintiff alleges that none of the allegations are particularised, and that the paragraph fails to plead how the plaintiff is alleged to have breached the various agreements, with the result that the plaintiff is unaware of the case it must meet for trial. The second defendant contends that the plaintiff breached the contract and went on to call in the guarantee. She claims that the action was a result of the plaintiff’s breach and that the subsequent demands for repayment constitute a further breach of contract. In relation to that, subparagraph (a) does not plead the basis upon which it is said that the second defendant is not bound by the terms of the guarantee. Paragraph 15 of the statement of claim to which it responds pleads the terms of the guarantee. The second defendant does not dispute the terms of the document per sé. The pleading is unresponsive to the allegations in [15] of the statement of claim and should set out any basis as to why the second defendant is not bound by its terms. The argument of the second defendant seems to be that a breach has occurred by the plaintiff such that the second defendant is no longer bound by the guarantee. Such a case should be pleaded in a separate paragraph supported by the material facts upon which the second defendant relies to allege the breaches that have occurred and the basis upon which the second defendant says that she is not bound by the guarantee. Paragraph 16 is struck out.
  1. Paragraph 18: The pleading is said by the plaintiff to refer to an incorrect paragraph in referring to 16(c), (d) and (e), to be vague and to not identify the factual basis of the alleged contravention. According to the second defendant, the plaintiff breached the statutory provisions of legislation by representing that she was in default of the overdraft account when she was not. It is alleged that she was not provided with any notices and was not in default of the loan. Matters referred in subparagraphs 16(c) and (d) do not allege any such representations. Further, there is no pleading of material facts to support any suggestion that there have been false representations made, particularly that the second defendant was in default of the overdraft facility. Paragraph 18 in its present form is embarrassing,[28] does not disclose a reasonable cause of action or defence and accordingly should be struck out.
  1. Paragraph 23: This is unresponsive to any allegation. To the extent that it is said to be relevant to the defence raised by the second defendant, nothing is pleaded which shows that it is relevant to the allegations or the second defendant’s defence. In those circumstances, it will be struck out.
  1. Paragraph 25: The plaintiff complains that the allegations are not particularised to the extent needed for the plaintiff to respond to them, and even if they were, the matters pleaded cannot be said to have caused the first defendant’s default of the business overdraft facility terms. The second defendant submits that the termination of the facility was in breach of the contract. Paragraph 25 of the amended defence pleads that in issuing the termination notice, the plaintiff was in breach because there was no default, or if there was a default, the first defendant claims that the default was a result of the plaintiff’s breach of the overdraft facility terms and the Code of Banking Practice. The first defendant needs to identify the factual basis for denying any default by it even if it asserts that further steps are necessary to fully particularise that allegation. The first defendant also needs to particularise the basis upon which it is said that the plaintiff’s breach of the terms and conditions caused the default by the first defendant, identifying what the breach by the plaintiff was and the material facts relied upon to say that that caused the first defendant to be in breach. Whether or not the matters complained of could not have caused the first defendant’s default is presently unclear. The pleading is embarrassing and has a tendency to delay or prejudice a trial and should be struck out.
  1. Paragraph 26: The plaintiff complains that there is no evidence that the repayments received by the plaintiff were in excess of the requirements under the overdraft facility and contends that even if the repayments made were more than the minimum repayment, they would still be offset against further amounts owing and it would still be possible for the first defendant to be in default. That could well be so, but it is a matter for reply. This may go back to the first defendant’s response to paragraph 25 of the statement of claim, where it disputes that the termination notice could properly terminate the overdraft facility and demand payment. I am presently not inclined to strike the paragraph out but rather order that the first defendant provide particulars of the allegation that repayments were made in excess of the requirement under the facility terms and conditions. Other than the details of the “excess payments” it is an allegation to which the plaintiff can respond.
  1. Paragraph 27: The plaintiff complains that the paragraph relates to the plaintiff’s default notice dated 21 July 2015, and claims that the allegations of estoppel are not sufficiently pleaded or particularised. A breach of contract does not constitute an estoppel. No material facts are pleaded giving rise to an estoppel. The submission of the second defendant that the plaintiff breached the contract when it issued the default notice, which she contends was misleading and deceptive and had the effect of placing undue influence over the second defendant, is not relevant to paragraph 27 of the amended defence as pleaded. The paragraph discloses no reasonable cause of action and has a tendency to delay or prejudice a trial. I strike the allegation out.
  1. Paragraph 28: The complaint made in relation to paragraph 28 of the amended defence is that no facts are pleaded as to when and how the plaintiff breached its obligations or how those breaches caused the first defendant’s default. The second defendant states that the overdraft was in order, under its limit and was not in default. Her unsworn affidavit refers to those matters apparently being orally confirmed to her by the banker at the plaintiff’s branch in Gladstone in 2014. As I have stated above, the first defendant needs to plead the material facts upon which it relies to support an allegation, even if it cannot fully particularise it pending further disclosure. It must plead enough of a factual basis for the allegation so that the plaintiff can identify in what respect it is said to have breached the overdraft, why the first defendant was not in default and how any breach of the first defendant was the result of a breach committed by the plaintiff. The paragraph will be struck out.
  1. Paragraphs 32, 34 and 35: The complaint of the plaintiff is that the amounts in the notice dated 21 July 2015 alleged to be “substantially unproven” and the pleading that therefore the notice substantially misrepresented the total amount payable under the guarantee, does not identify how the notice was wrong. It is also submits that there is no reliable evidence to suggest that the amounts in the notices were wrong, and thus the pleading should be regarded as scandalous. The second defendant submits that the amounts represented in the notices were incorrect and that there was a failure of the plaintiff to recast the loans when lump sum payments were made and that the plaintiff placed continual pressure upon the second defendant to make the repayments to unrelated accounts to effect hardship arrangements, which was unconscionable. The latter is not pleaded nor substantiated by facts.
  1. The pleading in paragraph 32 fails to identify the respect in which the total amount payable on demand was misrepresented. It further fails to plead how it substantially and irrevocably disadvantaged the second defendant during negotiations and resulted in access to the external dispute resolution scheme being denied to the first and second defendants to their detriment. It further fails to identify that detriment. The second defendant must plead the relevant material facts supporting the allegation even if they cannot be fully particularised. In her submissions the second defendant claims that the information is within the plaintiff’s possession and she has unsuccessfully tried to obtain it by subpoena. As set out above, at the very least, the second defendant must set out the factual basis upon which she pleads the matters in the paragraph, even if she has to plead that she cannot provide all the particulars until disclosure has been made. A party must have a factual basis for pleading an allegation and cannot plead bare assertions. The amended defence does not presently plead any basis for unconscionable conduct. The paragraph will be struck out as disclosing no reasonable defence and having a tendency to prejudice or delay a trial.
  1. Paragraph 33 appears to try and draw together all of the earlier paragraphs but in doing so raises a number of additional allegations. It is not the subject of complaint by the plaintiff.
  1. Paragraphs 34 and 35 rely at least in part on paragraph 32. The pleading as it stands is presently embarrassing and does not sufficiently identify the case which the second defendant is asking the plaintiff to meet. I strike out paragraphs 32, 34 and 35 accordingly.
  1. Paragraphs 37 to 57: I have dealt with 37 to 39 above. The plaintiff makes sweeping complaints about all of these paragraphs relying on its submissions for the summary judgment. While some of those paragraphs are dealt with in the submissions, a number are not. It is not the role of the Court to have to undertake an analysis paragraph by paragraph which the plaintiff has not undertaken. The contention that the matters pleaded tend to delay or prejudice the fair trial of the matter and appear not only scandalous but to be used as a delaying tactic is not a contention that should be made without stating the basis for such a contention.
  1. The remainder of the amended defence uses a scatter gun approach in its pleading and fails to clearly plead the conduct by the plaintiff said to be unconscionable. In particular [40] and [41] rely on conduct in relation to the first defendant, not the second defendant and [42] and 43] plead that the second defendant would not have entered into the guarantee but for that conduct in relation to the first defendant and are embarrassing. Paragraphs 40 and 41 are irrelevant to any allegation of unconscionable conduct in relation to the second defendant. Paragraphs 40 to 43 should be struck out.
  1. As to [44], the second defendant has not provided any particulars of the second defendant allegedly being refused access to external dispute resolution. At least, the notices of 7 May 2015 advised of the right to free external dispute resolution. The second defendant will be directed to provide particulars of the refusal. Failing the provision of such particulars the allegation should be struck out.
  1. As to [45], the second defendant fails to set out the factual basis for the assertion that the plaintiff failed to provide “genuine consideration” her “full financial situation”. The factual basis for each of those matters and what is meant by “full financial situation” needs to be particularised. The second defendant will be directed to provide such particulars, failing which the allegation should be struck out.
  1. As to [46], the misrepresentations as to the arrears are not identified (nor particularised) nor is the basis upon which it is asserted that the plaintiff relied on the errors. The paragraph is a matter of bare assertion and should be struck out. Without those matters being identified, the plaintiff does not know what case it has to meet.
  1. The second defendant must plead what the misrepresentation was and give particulars of the misrepresentation in terms of what was said, who said it, when and where it was said, and how she was disadvantaged; she must identify the relevant arrears information and the facts by which she says the plaintiff relied upon such errors in separate paragraphs. As to [47], the reference to “relevant information” is vague and needs to be identified with particularity. The second defendant will be directed to provide such particulars, failing which the allegation will be struck out.
  1. As to [48], the High Court in Thorne v Kennedy[29] stated that unconscionable conduct requires an innocent party to be subject to a special disadvantage which seriously affects the ability of the innocent party to make judgment as to their own best interests.  The other party must unconscientiously take advantage of that special disadvantage.  Before there can be a finding of unconscientious taking advantage, it is generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.  Similar comments were made by the High Court in Commercial Bank of Australia v Amadio.[30]  In particular, Mason J at p 462 observed:

“I qualify the word “disadvantage” by the adjective “special” in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgement as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.” 

  1. Paragraphs 48, 49 and 50 do not plead matters which constitute unconscionable conduct. Significantly more needs to be pleaded identifying the factual matters which support each of the elements of unconscionable conduct. To the extent that statutory provisions in the “TPA and ASIC Act” are relied upon, facts need to be pleaded raising those provisions. Further, the paragraphs plead a number of allegations which complain of a number of different concepts. The UCPR requires that each paragraph should plead only one allegation.[31]  Paragraph 49 refers to the second defendant being “unduly influenced to deposit money” by the alleged misrepresentations which are not properly particularised.  If the second defendant is asserting “undue influence” she needs to plead the conduct of the plaintiff by which it is alleged that the second defendant’s will was overborne by the plaintiff. 
  1. The above paragraphs do not disclose a cause of action for unconscionable conduct in their present form and [48] to [50] will be struck out.
  1. As to [51] to [53], the second defendant appears to attempt to plead a case which relies on Yerkey v Jones.[32]  Jackson J in Schultz v Bank of Queensland [33] identified the circumstances in which Yerkey v Jones equity will be raised in favour of a wife who enters into a transaction as surety for the debts of her husband or her husband’s company.   In particular, the second limb of Yerkey v Jones turns on whether the wife did not understand the effect of the document or the nature of the transaction of suretyship.  The elements for such a cause of action are discussed above in relation to [14] of the amended defence.
  1. The amended defence of the second defendant has not pleaded those matters required to raise a defence based on Yerkey v Jones.  The pleading of her husband’s position in the first defendant is not enough.  If the plaintiff is otherwise seeking to assert a case of unconscionable conduct, the plaintiff has not pleaded sufficient factual matters to constitute such a claim.  As such, [51] to [53] will be struck out.  Given that I have struck out the paragraphs which are said to constitute unconscionable conduct, it follows that [54] and [55] should also be struck out.  I should however note that the matters which are said to flow from the unconscionable conduct include an assertion that the second defendant “would have overcome their financial difficulties” and “would not have suffered financial loss relating the handling of the dispute”.   These matters again need to be supported by a pleading of the factual basis which is relied upon in order to make those allegations.  Any amended pleading must address those matters. 
  1. Paragraph 60: This paragraph seeks declarations and should be properly pleaded in the counterclaim. I have found that the second defendant needs to recast the various paragraphs complained of to set out the material facts on which she seeks to rely in order to reach such conclusions. Thus, this paragraph may ultimately be supported by the recast pleading and may cross-refer to those paragraphs. Presently, in light of the fact the other paragraphs are being struck out, it also must be struck out on the same basis.

Counterclaim

  1. Paragraph 4: The plaintiff complains that it is unsure what is meant by “expired” and what terms and conditions of the facility agreement are said to have been breached. The reference to “expired” seems clearly enough to refer to the fact that the overdraft facility could no longer be utilised. I order however, that the second defendant provide particulars as to what terms she alleges were breached.
  1. Paragraph 7: The plaintiff complains that the inferences sought to be drawn cannot be drawn from the conduct referred to and that the matter is irrelevant to the relief sought. According to the second defendant, she is pointing out that she would have available a defence of Yerkey v Jones in order to seek that the guarantee to be set aside.  That is not what is pleaded.  As set out above, a defence established on the basis of Yerkey v Jones requires a number of matters to be pleaded to be established. The plaintiff’s complaint, that the inference that is sought to be drawn of the “plaintiff’s acknowledgement” does not follow from the conduct alleged, is accepted.  It seems that the second defendant is seeking to say that the plaintiff was aware that the second defendant’s husband was the true controller of the company.  If so, that is what should be pleaded.  Accordingly, paragraph 7 is struck out.
  1. Paragraph 10: The plaintiff complains that only part of clause 37 of the overdraft facility has been pleaded but that the balance of the clause shows it relates to holding over and as such it is irrelevant. The second defendant, however, states that the bank varied the loan but did not update the expiry date which means that there was no carry over of any previous expiry date as the date had already passed. It is unclear what the second defendant’s case is in this respect. On one view, the pleading seems to suggest that the holding over provision should have operated so that the facility remained available, but on another view it seems to assert that the facility had been brought to an end without the relevant notices being given. If that is so, it is uncertain what the relevance of the holding over clause is. The pleading is embarrassing and should be struck out.
  1. Paragraph 11: The plaintiff complains that there was no change to the expiry date of the overdraft facility with the result that there was no requirement to provide any notice of such expiry and the facility was terminated by the plaintiff. That is a matter for the answer to the counterclaim. The plaintiff appears to be well aware of the point of dispute. Even though the matter is of questionable relevance, the plaintiff is able to plead to it and accordingly I do not strike it out.
  1. Paragraph 13: The plaintiff complains the first defendant has not pleaded the material facts to demonstrate how the plaintiff’s alleged breach had a material impact on the plaintiff’s dealing with this facility. There is an absence of any material facts supporting the conclusion that there was a material impact or how it gave rise to further breaches. The pleading is embarrassing and has a tendency to delay or prejudice a trial. Accordingly, I strike the paragraph out.
  1. Paragraph 14: The plaintiff complains of an absence of material facts to identify the alleged changes to the facility or particulars outlining the changes the plaintiff was alleged to have made and how that caused loss or damage. It claims in any event that the facility was terminated, the consequences of which were misunderstood by the defendants. While the latter may be so, it appears to be a matter disputed by the first defendant and is a matter to be raised by the plaintiff in its reply and answer. The second defendant’s explanation[34] of the relevance of the allegation and its intended effect is not mirrored by the terms of the pleading.  In particular, the second defendant identifies that the account was in arrears of which no notice was given.  The second defendant also asserts that the loans were not brought into account when there was the provision of hardship assistance.  Neither of those matters have been referred to in paragraphs 15 to 27 which are said to be particulars of the allegation in [14]. As to the reference to “loss and damage”, that is to be struck out for the reasons set out below.
  1. Paragraphs 15 to 27 purport to be particulars of the allegation in paragraph 14. They identify the alleged changes, the increase in the required repayment and the clause allegedly breached. While the matters may be readily answered by the plaintiff, the paragraphs sufficiently identify those matters to disclose a reasonable cause of action. The first defendant, however, needs to plead the loss and damage to the first defendant which it alleges was caused by the breach. That is a matter which should be pleaded by material facts rather than particulars. Accordingly the allegation of “loss and damage” in [14] is struck out. I am not otherwise satisfied that the remaining paragraphs do not plead an arguable case in support of the allegations in [14]. The first defendant must plead the material facts to support any alleged loss and damage in a further pleading if it wishes to sustain the allegation.
  1. Paragraphs 16 to 25 and 28: The plaintiff complains that the plaintiff had a right to terminate the overdraft facility upon default by the first defendant and exercised that right. It asserts that the facility was terminated before any requirement to vary it arose. As such there is no claim for breach of clause 32.1(g) of the facility term. That is a matter for the reply and answer. The plaintiff is well aware of what the case is in that regard and I do not strike those paragraphs out. However, the conclusion in paragraph 28 does not flow from the matters pleaded in paragraphs 25 to 27 and requires material facts to be pleaded, identifying what the breach is that the plaintiff is said to have committed which is a breach of clause 25.2 of the Code of Banking Practice. Paragraph 28 will be struck out.
  1. Paragraphs 29 to 73: The plaintiff appears to make a general complaint that the allegations are not supported by reliable evidence, are not sufficiently particularised and that the matters pleaded do not have the legal consequences contended for by the second defendant. The plaintiff then makes specific complaints as to paragraphs 29 to 39, 40 to 48, 49 to 54, 55 to 65, 66 to 69 and 70 to 73. I do not consider that it is proper to analyse the matter by reference to a generalised complaint. As such, I will analyse the matter with reference to the particular paragraphs in the groupings outlined by the plaintiff.
  1. Paragraphs 29 to 39: The complaint is that the plaintiff breached clause 25.2 of the Code of Banking Practice by failing to assist the defendants to overcome financial difficulty. It may also be that the suggestion is that relevant information was not provided. Clause 25.2 provides, inter alia, “with your agreement, we will try to help you overcome your financial difficulties with any credit facility you have with us…”. The fact that hardship assistance was granted is not in dispute. The complaint appears to be that it was not for long enough and imposed an inappropriate repayment plan for the first defendant. The fact that the assistance did not overcome the first defendant’s financial difficulties does not establish a breach to the extent, if any, that clause 25.2 creates an obligation.
  1. On the second defendant’s own case, the second defendant was given a moratorium of either twelve or six months from making repayments in respect of the overdraft facility after her husband had died. It also appears from the second defendant’s own pleading that she was given a period of interest only repayments at the end of 2013 and time to sell the property.
  1. In order to establish any cause of action, assuming that clause 25.2 of the Code of Banking Practice can constitute a contractual obligation,[35] which in my view is questionable, it must be established that:
  1. A party agreed that the bank provide help to them; and
  1. The bank did not try to provide that help.
  1. The provision provides that the bank:
  1. Will try; 
  1. With the agreement to help you;
  1. Overcome your financial difficulties
  1. That requires a party to plead facts to establish that:
  1. They were in agreement that the bank provide such assistance;
  1. There were financial difficulties that had to be overcome identifying those difficulties; and,
  1. The bank did not try to help them overcome such difficulties. 
  1. The breach, if there is one, is a failure to try to help, and not the failure to achieve the desired outcome, in this case the provision of hardship assistance. Paragraphs 30 to 39, if they are to plead matters which support the alleged breach in paragraph 29, need to be directed to those matters. At present, paragraph 30 is irrelevant to such an obligation. Paragraphs 32 and 33 may be matters which could go to the plaintiff failing to try to help the first and second defendant but the pleading must be recast to set out how there is such a failure, and particularise the respects in which the plaintiff failed to assist.
  1. Paragraph 35 appears to raise a different claim of duress and misrepresentation by omission which is unsupported by the matters pleaded. The provision needs to be replead to make clear the second defendant’s case. Paragraph 36 pleads a number of legal concepts without any factual substantiation. Paragraphs 37 and 38 do not presently have relevance to any particular allegation and paragraph 39 is a matter of bald assertion.
  1. The pleading does not disclose a reasonable cause of action and has a tendency to delay and prejudice the trial. Paragraphs 29 to 39 should be struck out.
  1. Paragraphs 40 to 48: The plaintiff complains that the paragraphs, which purport to plead a case of misrepresentation, do not disclose a reasonable cause of action and that the particulars of damage pleaded are speculative. To the extent the complaints are made as to lack of evidence, that is not relevant to the strike out application. The second defendant has referred to various collection notes which ultimately were held to be inadmissible in support of the allegation. I am not considering the strike out on the basis of the lack of potentially substantiating information. It is a matter for evidence at the trial. In any event I cannot conclude that there is no factual basis for the pleading on the evidence before me.[36] 
  1. The misrepresentation needs to be particularised. Particulars of the representation in terms of what was said, when and how it was said and who said the words must be provided. Paragraph 47 needs to particularise how the representation was misleading and deceptive. I will direct the second defendant to provide particulars of [40] and the representation made and particulars of [47] identifying the basis upon which the representation is alleged to have been misleading and deceptive. Paragraphs 45 and 46 do not identify the basis upon which the representation is said to be false in [47], and whether it is the case that the representation is said to have been false when it was made or was a representation as to the future such that the second defendant is relying on the fact it was made without reasonable grounds.
  1. Paragraph 48 combines reliance and the loss and damage that is said to have been caused by the offending conduct. The particulars of paragraph 48 may prove not to be established by the second defendant however they should not be wholly struck out. As to (ii), the possibility that a misrepresentation may have induced a course of action by a representee is not sufficient to found loss or damage and it should be struck out. The steps that the second defendant would have taken to manage her debts referred to in (iii) need to be particularised. The particular in (v) is incomprehensible and should be struck out. Particular (iv) requires the timeframe to be particularised and particulars to be given supporting the allegation that the property would have been sold. Given the plaintiff did not vary the repayment to interest only, save it appears for a short period of time with a deadline for the second defendant to sell the property, and the second defendant was aware that was the case, it is difficult to envisage how the second defendant asserts that reliance on the representation induced her not to sell the property. Other than the time before the payment was made, that appears to have always been the position. The second defendant must plead facts particularising such a contention if that is her case. The particulars in (ii) and (v) should therefore be struck out and proper particulars provided of the plaintiff’s case in relation to (iii) and (iv).
  1. Paragraphs 49 to 54: The plaintiff complains that the allegations are not properly particularised in terms of the representation and that the damage pleaded is not particularised and is speculative. The plaintiff needs to indicate who, on behalf of the plaintiff, represented to the second defendant the matters outlined in paragraph 49. While further particulars will need to be provided, it appears that particulars can be given. Particulars were given in a letter of 6 November 2015.[37]  In submissions the plaintiff provides particulars of who the conversation was with, namely Lyndsay Henwood.  While reference is made to collection notes, which were ruled to be inadmissible, the person concerned is identified in the submissions.  I will direct particulars be provided of the representation as identified in relation to [40] above.  The second defendant also must provide particulars of the basis upon which the representation is said to be misleading and deceptive in [53].  I will direct that particulars be provided identifying the basis upon which it is said to be misleading and deceptive.
  1. The same comments in relation to paragraph 48, outlined above, apply to paragraph 54. As such, I strike out subparagraphs (ii) and (v) of the particulars of paragraph 54. Subparagraphs (iii) and (iv) need to be properly particularised.
  1. Paragraphs 55 to 65: The plaintiff complains that it has adduced evidence to prove that the overdraft was validly terminated. That is a matter of dispute and is not to be resolved in a strike out application. The plaintiff also complains that the pleaded matters disclose no reasonable cause of action and will prejudice or delay the trial and that the particulars of damage are not proper particulars. The counterclaim alleges a breach occurred when the facility was terminated for reasons of unproven default causing loss and damage to the first and second defendants. Particular reliance by the second defendant is placed on the fact that the level of overdraft was within the facility limit. The basis upon which it is alleged that the contention in the counterclaim is misconceived has not been addressed by the plaintiff. The allegations in [55] to [61] are of fairly narrow compass and do not broaden the issues at trial significantly. Paragraph 62, however, does not arise from the matters pleaded above in paragraphs 55 to 61. The notion that a breach facilitated further wrongdoing is incomprehensible. It seems to be seeking to plead some sort of case of undue influence or unconscionability with no material facts to support it. It should be struck out. The losses particularised in paragraph 65, other than arguably in (j), are not matters which are loss and damage caused by the alleged breach. In the case of (k), (l) and (n) they are not recoverable losses at law. If the first and second defendant are correct that there is no breach which could justify the termination of the facility or the enforcement of the security, (m) is not a loss which will arise. The particulars in (k) to (n) should be struck out. The second defendant should provide particulars of (j) of the direct costs incurred.
  1. Paragraphs 66 to 69: The plaintiff complains that these paragraphs misconstrue the content and effect of the Code of Banking Practice and do not establish a breach of the Code even if proven, are not sufficiently particularised to allow the plaintiff to understand the case it has to meet, and do not disclose a reasonable cause of action. The second defendant submits that the plaintiff continually breached the Code of Banking Practice in failing to accept her requests for hardship assistance and making demands for repayments to access hardship which she contends were misleading and deceptive. The second defendant alleges that the plaintiff breached the Codes as it did not provide the “help” referred to in clause 25.2 of the Code of Banking Practice (2004) or clause 28 of the Code of Banking Practice (2013).
  1. As stated above, it is questionable whether either clause could give rise to a contractual warranty; that was not a matter directly argued. The second defendant’s case equates the granting of hardship assistance with the “help” to overcome financial difficulties in circumstances where the plaintiff has no obligation to grant such assistance although it did grant some assistance in 2009 to 2010. The second defendant also introduces a concept of “genuine consideration” which does not reflect the terms of the provision. I have set out above what is required to be pleaded to support any claim for breach of clause 25.2. Paragraphs 66 to 69 should be struck out as they do not plead the respects in which the plaintiff “failed to try and help” the second defendant overcome her financial difficulties. If the second defendant’s case is that the bank failed to try and help by not working with her on a repayment plan or providing information as to hardship assistance, that should be pleaded. If it is alleged that the plaintiff’s failure to help was by not considering the material provided to it, that needs to be properly particularised. At present, paragraph 69 pleads a breach of a different obligation from clause 25.2 of the Code of Banking Practice. The relief claimed is an order that the guarantee and indemnity be made void or otherwise unenforceable. Such relief cannot be properly sought for any alleged breach of clause 25.2 or 28.2. That has not been the subject of complaint by the plaintiff and I will not make any order in that regard.
  1. There is no reasonable cause of action disclosed in relation to the alleged breach of clause 25.2 and as such the allegations in paragraphs 66 to 69 are struck out.
  1. Paragraphs 70 to 73: The claim for unconscionable conduct needs to be properly identified and not made as a global complaint. The defendants must plead how the plaintiff’s conduct could be regarded as unconscionable and identify the special disadvantage the second defendant was apparently suffering from and how that was unconscientiously taken advantage of, as outlined above. The present pleading does not do that. Accordingly, paragraphs 70 to 73 are struck out.

Conclusion

  1. A summary of my findings in relation to the various paragraphs is set out below:

Amended defence

Paragraph 6(a)

Strike out refused.

Paragraph 7(c)

Strike out granted.

Paragraph 9

Strike out refused.

Paragraph 10

Strike out granted.

Paragraph 13

Strike out granted (save for the admission).

Paragraph 14

Strike out granted (save for the admission).

Paragraph 16

Strike out granted (save for the admission).

Paragraph 18

Strike out granted.

Paragraph 23

Strike out granted.

Paragraph 25

Strike out granted.

Paragraph 26

Strike out refused: First defendant directed to provide particulars of the allegation that payments were made in excess of the requirement under the facility terms and conditions.

Paragraph 27

Strike out granted.

Paragraph 28

Strike out granted.

Paragraphs 32, 34 and 35

Strike out granted.

Paragraphs 40 to 43

Strike out granted.

Paragraph 44

Second defendant directed to provide particulars of the assertion, failing which the paragraph should be struck out.

Paragraph 45

Second defendant directed to provide particulars of the assertion, failing which the paragraph should be struck out.

Paragraph 46

Strike out granted.

Paragraph 47

Second defendant directed to provide particulars of the reference to “relevant information”, failing which the paragraph will be struck out.

Paragraphs 48 to 50

Strike out granted.

Paragraphs 51 to 53

Strike out granted.

Paragraphs 55 to 57

Strike out granted.

Paragraph 60

Strike out granted.

Counterclaim

Paragraph 4

Second defendant directed to provide particulars as to what terms she alleges were breached.

Paragraph 7

Strike out granted.

Paragraph 10

Strike out granted.

Paragraph 11

Strike out refused.

Paragraph 13

Strike out granted.

Paragraph 14

Strike out granted.

Paragraphs 15 to 27

Strike out refused.

Paragraphs 16 to 25 and 28

Paragraph 28 struck out.

Paragraphs 29 to 39

Strike out granted.

Paragraphs 40 to 47

Second defendant directed to provide particulars of paragraphs 40 and 47.

Paragraph 48

(ii) and (v): Strike out granted.

(iii): Second defendant directed to provide particulars of the steps she would have taken to manage her debts.

(iv): Second defendant directed to provide particulars supporting the allegation that the property would have been sold.

Paragraphs 49 to 54

The second defendant is directed to provide further particulars of paragraphs 49, 53, 54(iii) and 54(iv).

Subparagraphs 54(ii) and 54(v) are struck out.

Paragraphs 55 to 65

Paragraph 62 is struck out.

Subparagraphs 65(k) to (n) are struck out

Paragraphs 66 to 69

Strike out granted.

Paragraphs 70 to 73

Strike out granted.

  1. The plaintiff did not seek to oppose the defendants being given liberty to replead. Given the number of paragraphs which I have ordered be struck out, I consider the best course would be for the whole of the amended defence and counterclaim to be struck out, so that the fresh pleading is not confusing (albeit that I did not find that all paragraphs were liable to be struck out). I will therefore order that the whole amended defence and counterclaim be struck out. I will make an order for the defendants to replead by 30 April 2018. That will give the defendants sufficient time to consider these matters and replead the defence and counterclaim hopefully in an adequate and permissible legal form.
  1. The application for summary judgment is dismissed.
  1. The plaintiff claims indemnity costs insofar as they relate to relief granted from 19 May 2016 in the event the Court strikes out paragraphs of the amended defence and counterclaim. I will hear the parties further as to costs in that regard once they have had sufficient time to consider these reasons.
  1. The orders of the Court are:
  1. That the whole of the amended defence and counterclaim be struck out and the defendant’s be given liberty to replead.
  1. That the further amended defence and counterclaim be filed and served by 30 April 2018.
  1. That summary judgment is refused.
  1. That the parties provide submissions as to costs by 20 March 2018.
  1. That the matter be listed before Mullins J for review at 9:15 am on 7 June 2018.

Footnotes

[1]  Affidavit of N Keys, CFI 50 at [2].

[2]  Counterclaim at [17].

[3]  I note that the second defendant also pleads further terms contained in the Memorandum in paragraph 5 of the amended defence.

[4]  Amended defence at [36] – [37].

[5]  Amended defence at [37].

[6]  [2005] 2 Qd R 232 at [17].

[7] LCR Mining Group Pty Ltd v Ocean Tyres Pty Ltd [2011] QCA 105 at [22] per White JA (with whom Margaret Wilson AJA and Ann Lyons J agreed).

[8]  [2013] QCA 84.

[9]   As Her Honour then was.

[10]  See discussion at [15] – [17].

[11] Chen v ANZ Banking Group Ltd [2001] QSC 43.

[12]   Robertson v Hollings (Imagination Television Ltd) & Ors [2009] QCA 303 at [11].

[13]   Clause 7.7 of the Financial Ombudsman Service “Terms of Reference”.

[14]  Who provided an affidavit in these proceedings, which is CFI 31.

[15]  CFI 31 at [6].

[16]   Affidavit of A McKee, CFI 5 at [17] – [19].

[17]   Affidavit of H Eruera, CFI 4, see [4], [5], [6], [7], [13] and [14].

[18]   It would appear the allegation pertains to 12 September 2013 given the reference in [49] of the counterclaim.

[19]   Affidavit of Golinelli, CFI 6, WXG-10, 11, 13, 17, 19, 25, 29, 30 and 32.

[20]  In that regard the plaintiff was pointed to the fact that for the 31 May 2016 bank statement, it states that the debit interest for the financial year to date was $20,687.53 which would, even on the second defendant’s pleaded case, be the amount that should be paid if the plaintiff had agreed to interest only payments as it had represented.  Payments made after September 2014 by the second defendant did not meet that amount and the second defendant did not present any evidence that she could have paid that amount or was unable to do so due to the plaintiff’s conduct.

[21]  The year is not nominated in the amended defence but it is evident from the pleading of the same misrepresentation in the counterclaim that it was September 2013.

[22]   See [66] of the counterclaim: “Third Request”.

[23] Kabwand Pty Ltd v National Australia Bank Ltd (1989) ATPR, 40-950.

[24]  T1-36/33-34.

[25]  Affidavit of William Golinelli, CFI 6, WXG-10, 11, 13, 17, 19, 25, 29, 30 and 32.

[26]  Affidavit of William Golinelli, CFI 6, WXG-14 and WXG-24.

[27]  (1939) 63 CLR 649.

[28]  The word “embarrass” reflects the language of the former O 22 r 32 Rules of the Supreme Court 1991 (Qld) and is used in the sense discussed by White JA in Robert Bax & Associates v Cavenham Pty Ltd [2011] QCA 5 at [16]. While not used in r 171 of the UCPR, the concept is still relevant as a pleading which is difficult to follow or objectively ambiguous or creates difficult for the opposite party insofar as the pleading contains inconsistencies is liable to strike out because it can be said to have a tendency to prejudice or delay a fair trial.

[29]  (2017) 350 ALR 1 at [38].

[30]  (1983) 151 CLR 447.

[31] R 146(1)(f).

[32]  (1939) 63 CLR 649.

[33]   [2014] QSC 305.

[34]   The second defendant made submissions by leave for the first defendant.

[35]   Which appears to have been accepted and which does not appear to have been the subject of any clear analysis and generally not subject to challenge but treated as such in cases such as: Bank of Queensland Ltd v Edwards [2017] QSC 191; Australia and New Zealand Banking Group Ltd v Fink [2015] NSWSC 506

[36]  Given the plaintiff objected to the second defendant’s affidavit being relied upon, it cannot rely on it to assert there is no evidence. 

[37]   Affidavit of Golinelli, CFI 7 at [85].

Editorial Notes

  • Published Case Name:

    National Australia Bank Ltd v Bluanya Pty Ltd & Anor

  • Shortened Case Name:

    National Australia Bank Ltd v Bluanya Pty Ltd

  • MNC:

    [2018] QSC 49

  • Court:

    QSC

  • Judge(s):

    Brown J

  • Date:

    12 Mar 2018

Litigation History

Event Citation or File Date Notes
Primary Judgment [2018] QSC 49 12 Mar 2018 Plaintiff's application for summary judgment refused; plaintiff's application for strike-out allowed - amended defence and counterclaim struck out: Brown J.
Primary Judgment [2018] QSC 93 02 May 2018 Costs Judgment (Brown J).

Appeal Status

No Status