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  • Unreported Judgment

Bank of Queensland Limited v Wright

 

[2014] QSC 67

 

 

SUPREME COURT OF QUEENSLAND

PARTIES:

FILE NO/S:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

DELIVERED ON:

16 April 2014

DELIVERED AT:

Brisbane 

HEARING DATE:

10 April 2014

JUDGE:

Chief Justice

ORDER:

In relation to the first defendant:

1. Judgment in favour of the plaintiff against the first defendant in the amount of $5,581,240.58;

2. Order that the first defendant pay the plaintiff’s costs, including reserved costs, to be assessed as necessary on the indemnity basis.

In relation to the second defendant:

3. The plaintiff’s application for summary judgment against the second defendant is dismissed.

4. Pursuant to Rule 298 UCPR, as a condition of defending the plaintiff’s claim, the second defendant must pay into court the sum of $200,000 by 4 pm on 24 April 2014.  In default of such payment, the plaintiff may, upon filing an affidavit deposing to the default, enter judgment in the Registry against the second defendant in the amount of $5,581,240.58 together with interest accrued to 24 April 2014 and costs to be assessed on the indemnity basis.

5. The second defendant must file and serve any amended defence and counter claim on or before 1 May 2014.

6. The plaintiff must file and serve any amended reply and answer by 8 May 2014.

7. The parties must make disclosure by list of documents by 29 May 2014.

8. By 29 May 2014 the parties must consult with each other regarding the need for expert evidence, to comply with the UCPR and any applicable practice direction.

9. The parties must complete inspection of disclosed documents by 12 June 2014.

10.   Subject to order 6, any expert report to be relied on by any of the parties must be filed and served by 25 July 2014.

11.   The parties must exchange summaries of evidence of lay witnesses on or before 18 August 2014.

12.   The parties must agree upon a bundle of documents to be tendered by consent, such agreed bundle to be filed on or before 22 August 2014.

13.   The proceeding be listed for trial in the Supreme Court at Brisbane for five days commencing 25 August 2014.

14.   Costs reserved.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SUMMARY JUDGMENT – the plaintiff applies for summary judgment against defendant guarantors – the plaintiff’s case against the defendants is founded in contract, not tort – whether the Code of Banking Practice can assist in providing a defence to either defendant – whether the defences raised by either or both defendants pass the threshold required to be factually explored at trial –  whether summary judgment should be entered against the first and/or second defendant

Bank of Western Australia Limited v Phil Zhanming Luo & Anor [2010] NSWSC 733, cited

Commonwealth Bank of Australia v Finding [1998] QSC 68, considered

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, considered

Politarhis v Westpac Banking Corporation; Politarhis v Australian Central Credit Union Ltd [2008] SASC 296, cited

Raging Thunder Pty Ltd v Bank of Western Australia Ltd [2012] QSC 329, cited

Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] 1 AC 80, cited

COUNSEL:

C Wilson for the plaintiff

P A Ahern for the defendants

SOLICITORS:

Gadens Lawyers for the plaintiff

Kelly Legal for the defendants

[1] CHIEF JUSTICE: The plaintiff applies for summary judgment against the defendant guarantors. 

[2] The case against the male defendant is very strong, in relation to the defence in negligence, because the plaintiff’s relationship with the guarantor is founded in contract not tort.  See Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] 1 AC 80, 107, referred to in Politarhis v Westpac Banking Corporation; Politarhis v Australian Central Credit Union Ltd [2008] SASC 296 para 185.  I note that in Raging Thunder Pty Ltd v Bank of Western Australia Ltd [2012] QSC 329, Applegarth J nevertheless was not prepared to exclude a similar claim in tort summarily.  But see also the remarks in Bank of Western Australia Limited v Phil Zhanming Luo & Anor [2010] NSWSC 733.  I consider this application should be determined on the law as it stands, and not allowing for possible development, and I believe the law as it stands to be clear.

[3] Ms Ahern, who appeared for the defendants, referred me to my decision in Commonwealth Bank of Australia v Finding [1998] QSC 68, where I dealt with a claim in negligence against a bank by concluding it was not justified by the facts.  Whether a claim in negligence was in law available appears not to have been agitated.

[4] It may be argued, perhaps, somewhat unusually, that the claim in negligence could be assisted by, or a contractual claim constructed from, the as yet unpleaded provision of cl 3.2 of the Code of Banking Practice, that is the duty to act fairly and reasonably.  But that is a vague obligation and an uncertain base for a defence on these facts.

[5] I acknowledge that the full circumstances surrounding the plaintiff’s grant of consent to the reconfiguration may be yet to emerge, but this application should be determined on presently available material absent speculation.  At the moment, I would not think the defendants’ factual case particularly promising in relation to the alleged delay in the granting of consent (and in relation to that, “fairness”), or as to any relevant consequence of that, and likewise as to the suggestion that the plaintiff “recklessly sacrificed” the interests of the mortgagee thence the interests of the guarantors.  It is difficult to see how the allegations in paras 62 to 78 of the defence, if established, could reasonably warrant that conclusion against the plaintiff.

[6] Any breach of cl 31.5 of the Code, as to allowing a day before signing, would not invalidate the guarantee, though it might possibly bear on a Garcia type defence by the female defendant.  The fundamental weakness of such a defence rests in her being a shareholder with her husband in the borrower company.  She may be able to rely on the circumstance, as she alleges, that her husband dealt with all of the financial issues, although again I would not think this particularly promising for her, allowing for her having been involved in a series of transactions, and the fundamental point that she was, with him, the owner of the borrower company.  But I consider that case does just pass the threshold where the facts should be explored at a trial.

[7] Overall, I take the view that there should be a trial limited to the claim against the second defendant, but that the second defendant’s right to defend should be conditional.  That is because I regard the defence as “shadowy” as that term has traditionally been used in this context. 

[8] The claim against the first defendant should however be summarily determined in favour of the plaintiff.  I am of course conscious of the constraints on the court’s capacity to act summarily under Rule 292.  Ms Ahern referred to Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99.  As Counsel for the unsuccessful party in the High Court, it has been imprinted in my mind for three decades.

[9] The parties have agreed that any trial take place over five days commencing 25 August 2014, and they have agreed on other necessary directions.

[10] The condition proposed by Mr Wilson, for the plaintiff, is that within a fortnight the second defendant pay $200,000 into court to the credit of the proceeding.  He informed me that that is the amount of the interest which will fall due, absent payment, in the four months to trial.  Ms Ahern pointed out that the plaintiff’s position is secure in the end, because the value of the mortgaged land exceeds the amount of the debt – that is, in the absence of any fall in the market.  Nevertheless I consider the proposed condition to be reasonable, and one which should be imposed because of my present, albeit summary, assessment of the strength of the defences.  In other words, the second defendant’s right to run what seems to me to be a weak defence should come at a price which will afford the plaintiff some relief should the defence fail at trial, with the plaintiff now to be denied a right to immediate judgment.

[11] Ms Ahern has pointed out that she had no prior notice of the possibility of such a condition, and that there is no affidavit material about it from the defendants.  She submits that the imposition of such a condition would “stifle the litigation, given their financial position”.  That may be so, but for the reasons just expressed, I consider the condition should be imposed.

[12] These are the orders which I make.

In relation to the second defendant:

1.             The plaintiff’s application for summary judgment against the second defendant is dismissed.

2.             Pursuant to Rule 298 UCPR, as a condition of defending the plaintiff’s claim, the second defendant must pay into court the sum of $200,000 by 4 pm on 24 April 2014.  In default of such payment, the plaintiff may, upon filing an affidavit deposing to the default, enter judgment in the Registry against the second defendant in the amount of $5,581,240.58 together with interest accrued to 24 April 2014 and costs to be assessed on the indemnity basis.

3.             The second defendant must file and serve any amended defence and counter claim on or before 1 May 2014.

4.             The plaintiff must file and serve any amended reply and answer by 8 May 2014.

5.             The parties must make disclosure by list of documents by 29 May 2014.

6.             By 29 May 2014 the parties must consult with each other regarding the need for expert evidence, to comply with the UCPR and any applicable practice direction.

7.             The parties must complete inspection of disclosed documents by 12 June 2014.

8.             Subject to order 6, any expert report to be relied on by any of the parties must be filed and served by 25 July 2014.

9.             The parties must exchange summaries of evidence of lay witnesses on or before 18 August 2014.

10. The parties must agree upon a bundle of documents to be tendered by consent, such agreed bundle to be filed on or before 22 August 2014.

11. The proceeding be listed for trial in the Supreme Court at Brisbane for five days commencing 25 August 2014.

12. Costs reserved.

In relation to the first defendant:

1.             Judgment in favour of the plaintiff against the first defendant in the amount of $5,581,240.58.

2.             Order that the first defendant pay the plaintiff’s costs, including reserved costs, to be assessed as necessary on the indemnity basis.

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Editorial Notes

  • Published Case Name:

    Bank of Queensland Limited v Wright & Anor

  • Shortened Case Name:

    Bank of Queensland Limited v Wright

  • MNC:

    [2014] QSC 67

  • Court:

    QSC

  • Judge(s):

    de Jersey CJ

  • Date:

    16 Apr 2014

Litigation History

No Litigation History

Appeal Status

No Status