Freeman v National Australia Bank
[2006] QCA 329
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- Unreported Judgment
- Appeal Determined - Special Leave Refused (HCA)
- Freeman v National Australia Bank[2006] QCA 329
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Freeman v National Australia Bank[2006] QCA 329
Freeman v National Australia Bank[2006] QCA 329
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Court of Appeal | |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | |
DELIVERED ON: | 1 September 2006 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 21 July 2006 |
JUDGES: | McMurdo P, Jerrard and Holmes JJA Separate reasons for judgment of each member of the Court, each concurring as to the orders made |
ORDER: | 1.Appeal dismissed 2.Appellant must pay the respondent’s costs of the appeal 3.Leave granted to parties to make written submissions within 14 days of the publication of this judgment as to whether costs should be assessed on the standard or the indemnity basis |
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – JURISDICTION AND GENERALLY – GENERALLY – eight year history of litigation between appellant and respondent – trial judge ordered under r 293 Uniform Civil Procedure Rules 1999 (Qld) that the remaining parts of the appellant’s pleadings be struck out because there was no real prospect of success and there was no need for a further trial – trial judge ordered costs against appellant – whether appellant’s pleadings sought to re-litigate issues decided in prior court proceedings and therefore constituted an abuse of process PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – JURISDICTION AND GENERALLY – GENERALLY – appellant was acquitted of charges of stealing cattle that belonged to the respondent –appellant alleged that an employee of the respondent pressured the police to bring criminal proceedings against the appellant – trial judge held evidence did not establish any complicity by the respondent in the unsuccessful prosecution – trial judge held police had exercised independent discretion in deciding to prosecute the appellant – trial judge held appellant’s claim about malicious prosecution had no prospects of success and struck out the claim – whether the trial judge erred in striking out this claim about malicious prosecution Bankruptcy Act 1966 (Cth), s 58 Uniform Civil Procedure Rules 1999 (Qld), r 668 Balson v State of Queensland & Anor (2002) QSC 419; SC No 6325 of 2001, 12 December 2002, cited Davis v Gell (1924) 35 CLR 275, considered D’Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR 755; [2005] HCA 12, followed NAB v Freeman [2001] QCA 473; Appeal No 9718 of 2000, 2 November 2001, cited Freeman v NAB [2006] QCA 260; Appeal No 219 of 2006, 18 July 2006, cited Freeman v National Australia Bank Ltd (unreported, HCA, Kirby and Heydon JJ, B96 of 2001, 14 March 2003), cited Ivory v Telstra Corporation Ltd & Anor [2002] QCA 457; Appeal No 4059 of 2001 and Appeal No 4423 of 2001, 1 November 2002, followed Mahon v Rahn (No 2) [2000] 1 WLR 2150, cited National Australia Bank Ltd v Freeman [2000] QSC 295; SC No 4013 of 1998, 11 October 2000, cited Rogers v R (1994) 181 CLR 251, cited Seabrook v Asher [2006] QCA 238; Appeal No 10732 of 2005, 23 June 2006, followed Stone v Ace-I.R.M. Insurance Broking Pty Ltd [2004] 1 Qd R 173; [2003] QCA 218, cited |
COUNSEL: | Appellant appeared on his own behalf I R Perkins for the respondent |
SOLICITORS: | Appellant appeared on his own behalf Mallesons Stephen Jaques for the respondent |
[1] McMURDO P: I agree with Jerrard JA’s reasons for refusing the appeal and with the orders he proposes.
[2] JERRARD JA: This appeal is against orders made in the Trial Division of this Court on 12 December 2005, giving summary judgment for the respondent defendant National Australia Bank (“NAB”) against the appellant plaintiff Mr Freeman pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) in respect of the claims in paragraph 15 of a Statement of Claim filed by Mr Freeman in a claim against the NAB, (BS 5438 of 2005), filed in Brisbane on 6 July 2005. Paragraph 15 claimed against the NAB for abuse of process of the Magistrates Court and District Court of Queensland for collateral purposes, and in the alternative for malicious prosecution. Rule 293 in the UCPR empowers a court to give judgment for a defendant against a plaintiff if the court is satisfied on application that the plaintiff has no real prospects of succeeding on all or a part of the plaintiff’s claim, and that there is no need for a trial of the claim or a part of the plaintiff’s claim. That learned judge also ordered on 12 December 2005 that the whole of the rest of the claim be struck out, and made orders for costs against Mr Freeman. Mr Freeman has appealed those orders on a variety of grounds, including that the learned judge struck out his claim without giving Mr Freeman the opportunity to amend his Statement of Claim and his particulars. The principal orders he seeks are reinstatement of his claims, and that he be given leave to amend.
Background dealings
[3] The claims that were struck out, and which Mr Freeman wants reinstated, plead impropriety by the NAB in transactions between it and him, and in subsequent legal proceedings. A description of those transactions and proceedings is necessary to understand his claims, and why they were struck out. A history of the litigation between these parties is given in the judgment of this Court in Freeman v NAB [2006] QCA 260[1], and will not be repeated here, although a consideration of the merits of this appeal requires some more detailed description of some of those matters. The following description is drawn from that judgment, and the judgments in National Australia Bank Ltd v Freeman [2000] QSC 295[2] and NAB v Freeman [2001] QCA 473.[3]
[4] Mr Freeman was the registered lessee of grazing land known as “Glassford Vale”, just under 10,000 hectares in area, located 100 kilometres southwest of Gladstone, and used by him for cattle rearing, crops, timber getting, the extraction of gravel, and mining for metal. In mid-1992 he refinanced with the NAB obligations he had incurred with other lenders; his indebtedness was in the vicinity of $480,000 at the beginning of his relationship with the NAB. By mid-1993 when his property was declared drought stricken, he had borrowed approximately $800,000 from the NAB, and he had received drought assistance subsidies from the Queensland Rural Assistance Authority (“QRAA”) from 1993 to 1996. To qualify for an interest subsidy the farmer’s financier had to indicate to the QRAA that the financier would continue to support the farmer for the next 12 months. Applications were made by the end of September of each calendar year for the subsidy from April to April.
[5] The bank officer with whom Mr Freeman had dealt, a Mr Carlson, was replaced in mid-1996 by a Mr Alder, and the latter required Mr Freeman to reduce his bank overdraft from $120,000 to $90,000 by the end of November 1996. Mr Freeman’s complaints in evidence in the subsequent litigation included that to meet that demand, he had to sell 300 breeders, thereby depleting his breeding herd and adversely affecting his capacity to adhere to his productivity plan. He contended that money could have come from the interest subsidy he would have received the following April, had the bank given him the necessary support in getting it, which it did not. That was because Mr Alder considered that Mr Freeman had been unable to operate without incurring further debt, even with subsidies, in the past; there was no prospect for an improvement in the future, and the debt to the bank should be reduced.
[6] During 1997 the NAB sought to have Mr Freeman reduce it, and threatened to begin proceedings against him by the end of 1997 unless it received an acceptable proposal. The Legal Aid Office (Queensland) wrote to the NAB on Mr Freeman’s behalf, and the NAB invited Mr Freeman to enter into a mediation. That mediation was held on 4 December 1997, and ultimately resulted in the NAB agreeing to refinance all Mr Freeman’s facilities, and his agreeing to use his best endeavours to refinance the debt, or else to sell the property with the NAB’s written approval before 4 March 1998, with settlement no later than 6 April 1998. In default of either refinancing or sale he agreed to deliver vacant possession to the NAB by 6 April 1998. The mediation agreement included a clause by which Mr Freeman absolutely and unconditionally released the NAB from all claims that he had against it.
[7] Mr Freeman was unsuccessful in refinancing that loan and on 7 April 1998 the NAB sent a notice of termination of the loan facility, the time for repayment having expired on 6 April 1998. Proceedings were commenced in which the NAB claimed possession for sale to enforce the mortgage security it was given under the mediation agreement. Mr Freeman contended in those proceedings that the Deed of Mediation was voidable on the basis of economic duress and avoided by him, and he counter-claimed against the NAB for misleading and deceptive conduct, estoppel, and negligence in and about the making of the loans to him and the NAB’s conduct in attempting to enforce its securities. His case at the trial was that he had suffered from stress and anxiety during the mediation and been unable to cope with the pressure or to understand the documents shown to him, and the NAB either did know, or ought to have known, of those matters.
The first trial
[8] The learned trial judge heard evidence from Mr Freeman, the mediator, the NAB’s solicitor and a NAB officer, who attended the mediation; Mr Freeman did not call either his counsel or his solicitor who were also at the mediation. The judgment at first instance recorded that none of those other people, who attended the mediation and who gave evidence, supported in any way the symptomatology of helplessness, mental instability, anxiety etc., which Mr Freeman described. The judge was accordingly not persuaded that Mr Freeman exhibited any of the indicia of mental incompetence or anxiety that day which would indicate a psychiatric disorder, and referred to the contents of the transcript of Mr Freeman’s discussions with his counsel the day before the mediation occurred. The judge concluded that that transcript demonstrated that Mr Freeman was fully seized of the strengths and weaknesses of his position at the forthcoming mediation, and that the points he sought to raise in the course of the mediation included those which he later sought to litigate in his defence and counter-claim; in particular the claim of the forced sale of 300 breeders, resulting in an estimated loss in sales over a three year period of approximately $360,000. The evidence at the trial was that in the course of that mediation, Mr Freeman had sought to set off that claimed loss of $360,000 against the debt he owed the bank, but the NAB refused to entertain that claim.
[9] He accordingly failed on that ground at trial and on appeal, which was in essence a claim of economic duress.[4] He failed on the facts on his counter-claim. The learned trial judge had accepted the evidence of the witnesses from the NAB, finding them persuasive witnesses and finding that their evidence was supported by contemporaneous correspondence and documents, including a letter written by Mr Freeman. Challenges to those findings of fact failed on the appeal. An application for special leave to appeal was refused on 14 March 2003.[5] Mr Freeman’s counsel on that special leave application unsuccessfully attempted to rely on an asserted failure by the NAB to make proper discovery of documents, a point not raised in the Court of Appeal. The undisclosed documents apparently related to the size of the debt owed to the NAB; counsel informed the High Court on the special leave application that although Mr Freeman “may well have owed the Bank some money, he did not know exactly how much.”[6]
[10] Mr Freeman’s case on his counter-claim was that Mr Carlson had represented that the NAB would “carry” Mr Freeman until his cattle, timber, and mineral sales reached $240,000 per year, or alternatively until the 1993 drought ended. Mr Freeman’s evidence was that he had increased his borrowing relying on those representations, and spent money buying cattle, improving the property, and installing irrigation equipment. Mr Carlson denied any such representation but agreed in the course of discussions that he had worked out with Mr Freeman that the latter would need to bring in gross proceeds of $240,000 per annum to break even, that is to meet the NAB interest payments and pay his operational overheads in running the property. The learned trial judge preferred Mr Carlson’s evidence, and Mr Alder’s, to Mr Freeman’s, and considered Mr Freeman’s evidence was inconsistent with the terms of contemporaneous correspondence including a letter Mr Freeman had written to the NAB on 23 September 1997, a couple of months before the December mediation. Mr Freeman said nothing in that letter of the matters on which he based his claim for misleading and deceptive conduct and estoppel.
[11] Likewise, the trial judge found, regarding the complaint that Mr Alder’s demand that the overdraft be reduced had forced Mr Freeman to sell 300 breeders, that the complaint was not supported by the evidence Mr Freeman led. The trial judge found that Mr Freeman had not produced any contemporaneous sales dockets or other documentary evidence to support his oral evidence of the sale (for $30,000) of the 300 head of breeders, and that some of the documents Mr Freeman relied on indicated that no breeders whatever were sold in the 12 month period after September 1996. Further, in the course of the pre-mediation conference with his counsel on 3 December 1997, Mr Freeman had said that he had sold $60,000 worth of breeding heifers because he was carrying too many; and the evidence at the trial was that whatever cattle he sold – if any – he had not reduced the loan facility by $30,000 as required by Mr Alder, or at all.
The first appeal
[12] On appeal in 2001 this Court held that it was open to the trial judge to prefer the evidence of Mr Carlson and Mr Alder, and that the conclusions the judge drew regarding the failure to prove the claimed representations and the sale of the 300 breeders were open to the learned judge, and further a perusal of the whole of the evidence did not suggest that any other conclusion was open.
[13] In the 2001 appeal Mr Freeman argued that he had paid an amount of $2,205 into his account with the NAB on 6 April 1996, as an interest payment to extend the facility, and complained that that payment had not been recorded or credited to his account on that day, resulted in his being in default. This Court held that argument was an error, that the Deed of Mediation required Mr Freeman to refinance the debt or exchange approved contracts of sale no later than 4 March 1998, and that if neither happened Mr Freeman was to deliver vacant possession by 6 April 1998. Accordingly it was not the case that had that $2,205 been credited to his account on the day it was paid in, he would not have been in default.
Other proceedings
[14] This Court’s judgment in Freeman v NAB [2006] QCA 260 records that the NAB then petitioned in the Federal Court of Australia for Mr Freeman’s bankruptcy. He resisted that on grounds that included fraud. A sequestration order was made on 12 March 2002, but stayed pending an appeal to the Full Court of the Federal Court, which was dismissed with costs. The day after that dismissal Mr Freeman applied in the Trial Division of this Court under UCPR r 668 to set aside the orders against him on 11 October 2000 (the first trial orders), and the orders of this Court made on 2 November 2001 dismissing that appeal. He wanted his case re-tried on the basis of fresh or further evidence. Mr Freeman’s trustee in bankruptcy declined to prosecute that application, and on 15 October 2003 the Chief Justice dismissed it, because Mr Freeman, as a bankrupt, had no standing to pursue it.[7] Mr Freeman appealed to the Federal Court from the trustee’s decision not to continue with the UCPR r 668 application in the Trial Division of this Court, and, on the dismissal of that application, he unsuccessfully appealed to the Full Federal Court. He also unsuccessfully applied to the Federal Court to annul the sequestration order against the State. Finally, on 6 July 2005 he commenced a claim in the Trial Division of this Court, that being the claim or claims struck out on 12 December 2005 in the judgment under appeal, when summary judgment was also given in the NAB’s favour on the claim for collateral abuse of process and malicious prosecution. The appeal heard in Freeman v NAB [2006] QCA 260 was Mr Freeman’s appeal attempting to set aside the order made 15 October 2003, on the basis of fresh or further evidence. This Court held that he had no standing to bring the application he made under UCPR r 668 to set aside the orders made on 15 October 2003, those being in the proceeding under UCPR r 668 in which he sought to set aside the original trial decision. This Court also held that the merits appeared most unpromising, apart from his lack of standing.
The appeal – the matters struck out
[15] The judgment now under appeal described the struck out portions of the Statement of Claim filed 6 July 2005. It pleads that Mr Freeman was forced to the mediation by a ruse on the NAB’s behalf, which was continued at mediation. The pleading contains relatively extensive factual material but does not clearly identify the ruse. He also pleaded misleading and deceptive conduct in respect of the Mediation Deed; that the NAB had a corporate culture of withholding deposits, so that accounts went into default; and that the learned trial judge at the original trial had been mistaken in his reasons and evidence, in not including a reference to cattle sale dockets that were exhibit 36 at the trial. Mr Freeman also pleaded that he has discovered fresh medical evidence, identifying the presence of a Delta horse toxin in his body at April 2000, caused by the presence of Regulus Coagulus Staphylococcus, and that the symptoms he had pleaded he displayed at the mediation were the direct or derivative result of that toxin and Staphylococcus in his system. He likewise pleaded that the judges in this Court on his 2001 appeal had made a similar mistake in failing to refer to the exhibit 36; he pleaded that the NAB’s solicitors had resisted that appeal for the collateral purpose of bankrupting him.
[16] His pleading complains of errors by the Federal Court Judge, who made the sequestration order, of “intermeddling” by the NAB in the receivership, wrongly denied by the NAB’s witnesses in proceedings in that court. He also pleaded that the NAB pursued its petition and resisted the Federal Court appeal proceedings, relying on facts it knew to be incorrect, and intentionally withholding other facts showing that the NAB had an excess (presumably of assets over liabilities owed by Mr Freeman) as a result of the receivership, and he pleaded an improper resistance to his annulment application in the Federal Court. He also pleaded that he had established the existence of a corporate culture in the NAB’s operations of false accounting, and claimed for $14,315,958 in damages for “the loss of his land, livestock, timber, income, property, mining royalties, gravel royalties, health and in suffering thereby loss of business custom[ers] and goodwill and having his trade and business interrupted and disrupted and reputation, and for the costs of court on an indemnified basis”.[8]
[17] Those pleadings reveal that Mr Freeman is in part repeating the claims of misleading and deceptive conduct on which he failed at trial six years ago, in part expanding the assertions of deposits being withheld, a matter regarded as irrelevant in his first appeal to this Court, and in part challenging the conclusion that he had not established the claimed sale of 300 or any fewer number of breeders, forced on him by Mr Alder’s demands, as he claimed. It is simply far too late to attempt to do any of that, and the learned judge in the decision now under appeal was correct in holding that Mr Freeman’s pleading sought to re-agitate issues decided in prior court proceedings between the same parties. The judge also held the pleadings sought to go behind the Deed of Mediation, which had been upheld as valid in those very proceedings; and that his pleadings really urged that different results should have been reached in those earlier proceedings. That meant those pleadings constituted an abuse of process, as described in D’Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR 755[9] and Rogers v Queen (1994) 181 CLR 251.
[18] In D’Orta-Ekenaike v Victoria Legal Aid the joint judgment of Gleeson CJ, Gummow, Hayne and Heydon JJ described, as a fundamental observation about the way in which this society is governed, that judicial power is exercised as an element of the government of society; that the immediate parties to a controversy are very interested in the way in which it is resolved; and the community at large has a vital interest in the final quelling of that controversy. The judgment describes as a central and pervading tenet of the judicial system that controversies, once resolved, are not to be re-opened except in a few, narrowly defined, circumstances.[10] That joint judgment described as the unique and essential function of the judicial branch the quelling of controversies by the ascertainment of the facts and the application of the law, and that once the controversy had been quelled, it was not to be re-litigated. The judgment described a public need for decisions of the courts, unless set aside or quashed, to be accepted as incontrovertibly correct.[11] That joint judgment then described as an abuse of process a proceeding which required challenging the result arrived at in earlier proceedings, other than by appropriate appeal.
[19] The trial judge applied that law in this matter and added that there was the further problem caused by s 58 of the Bankruptcy Act 1966 (Cth), which vested Mr Freeman’s property in the trustee, and that his pleaded cause of action, having vested in the trustee, remained so vested despite Mr Freeman’s discharge from his earlier bankruptcy. The judge cited Stone v Ace-I.R.M. Insurance Broking Pty Ltd [2004] 1 Qd R 173.[12] The judge also, correctly, held that the claimed damage had its foundation in losses which had resulted as a result of the decisions on the first trial and the first appeal, and as a result of conduct and matters held lawful in those judgments. Accordingly, there could be no cause of action known to law in either Mr Freeman, or his trustee in bankruptcy, in respect of that damage; what Mr Freeman wanted to do was to recover for losses sustained from conduct vindicated by decisions of the court. For those compelling and separate reasons the claims based on the Deed of Mediation, the original trial, and the first appeal, were struck out. The same reasoning of course applies to the complaints about the result of, and the conduct by the NAB in relation to, the proceedings in the Federal Court. The clear and applicable principle that there must be an end to litigation (by earlier judgment in it) applies here to prevent Mr Freeman litigating in this Court complaints about the conduct of unsuccessful litigation in the Federal Court.
The appeal against dismissal of the malicious prosecution claim
[20] Regarding the claim on which judgment was given to the NAB, that of malicious prosecution and abuse of process, it arises out of criminal proceedings brought against Mr Freeman for stealing cattle, allegedly the property of the NAB. Mr Freeman was acquitted, in a trial held in March 2002. The learned judge in the judgment under appeal held that there was no evidence which suggested that any pressure to bring the charges was applied by any employee of the NAB to the police officers, who did bring charges against Mr Freeman. The judge accepted that the fact the prosecution was instituted and conducted by the police did not entirely answer the critical question of who was in truth the prosecutor (citing Davis v Gell (1924) 35 CLR 275). The judge noted that a person other than the prosecuting authority might be regarded as the prosecutor if that person counselled or procured the prosecuting authority to institute proceedings, by dishonestly prejudicing the prosecutor’s judgment, or by making a complaint which was false to the knowledge of that person, or by influencing the prosecutor to assist in bringing about the trial of an innocent person (citing Balson v State of Queensland & Anor [2002] QSC 419[13] and Mahon v Rahn (No 2) [2000] 1 WLR 2150).
[21] The judge held that the prosecuting police conducted an investigation and collected their own evidence, and were in a position to exercise an independent discretion. The judge also referred to information from former employees of Mr Freeman, who had provided evidence, which if accepted, formed a strong basis for concluding that he had stolen the NAB’s cattle. The judge was satisfied that a careful analysis of sale documents and the like, which Mr Freeman had made, analysing stock numbers, did not establish any complicity by the NAB in the unsuccessful prosecution. While the NAB supplied the police with some information, neither it nor the receiver had any obvious knowledge of their own as to the details of the stock on the property, and the judge was satisfied that most of the information and contact with the investigating and prosecuting police had been by the receiver, not the NAB. The learned judge was satisfied that Mr Freeman simply had no prospects of success at all on the claim for malicious prosecution, and so upheld the NAB’s claim for judgment.
Mr Freeman’s oral argument on appeal
[22] In presenting his oral argument, Mr Freeman no longer relied at all on a written argument filed on 31 January 2006, relied in part on written submissions filed on 17 March 2006, and otherwise relied on submissions filed on 19 July 2006. He was given leave to file and read an affidavit annexing various NAB statements for his account 45-802-2447. His purpose was to demonstrate that money from the sale of 80 head of cattle in January 2003 was not recorded as a credit in that account, and the NAB had thereby fraudulently failed to reduce the debt owing by him. Those 80 head were some of the cattle he was accused of stealing, and it became clear during the argument that the 80 cattle were the majority of a larger number seized by police on 27 November 2001, in the course of the police investigation into the complaint that Mr Freeman had stolen cattle.
The cattle stealing prosecution
[23] The general background to that prosecution was that after litigation between Mr Freeman and the NAB had begun an order was made on 10 August 1998 which provided for Mr Freeman to continue to manage “Glassford Vale”, to sell cattle in the normal course of business, and to draw funds from the proceeds (up to a certain amount each month) to cover running expenses. The order also provided for the NAB to call for a full stock muster from time to time. A muster conducted in the latter part of 1998 recorded a total of 867 head, which compared adversely with records the NAB held of 1,580 in a stock mortgage in September 1996. A further head count in May and June 2000 reported 542 head. The NAB got judgment on 11 October 2000 following the trial, and on the same day it appointed two members of KPMG as receivers and managers of the mortgaged property, which included the livestock. A muster returned only some 450 odd head, and the receivers advised the NAB that approximately 100 head had been mustered from “Glassford Vale” and transported to another property, “Skeleton Creek”, owned by a Mrs Williams, who let Mr Freeman agist cattle on “Skeleton Creek” from about mid-2000.
[24] The receivers advised that those cattle taken to “Skeleton Creek” carried the brand VPB, the property of a company Zinace Pty Ltd, associated with Mr Freeman, and that they were mostly young cattle. The “Glassford Vale” brand was OLQ. A Mr Lloyd from KPMG had inspected cattle on “Skeleton Creek” on 8 November 2000, 93 head in all, all branded VPB; of which eight were cows, 41 steers, 39 heifers, and two were bulls. Mr Lloyd thought most of the steers were aged eight to 12 months, with the oldest 18 months, and the heifers ranged in age from six months to two years. He considered that all the steers and heifers had only recently been branded with the VPB brand, within the last three to four months. All cattle inspected appeared to be of a similar breed to “Glassford Vale” cattle, which Mr Freeman had inspected earlier that day. The essence of the stealing charge against Mr Freeman was that he had dishonestly branded, with the VPB brand, “Glassford Vale” calves or weaners from “Glassford Vale” cows, which had carried the OLQ brand.
[25] Mr Freeman told Mr Lloyd on 8 November 2000 that the cattle at “Skeleton Creek” belonged to Zinace Pty Ltd, or to Mr Freeman’s children. On this appeal, Mr Freeman said that there had been only a few VPB cows that day for Mr Lloyd to see, and many more young VPB cattle, for the simple reason that the older VPB cows had been sold. However, back in late 2000, Mr Lloyd had been told before 8 November 2000, by two people, that cattle had been removed from “Glassford Vale” by Mr Freeman, and one of those people had told Mr Lloyd the cattle were moved to “Skeleton Creek”. Mr Lloyd had also spoken to two former employees of Mr Freeman and been told by both, and believed, that Mr Freeman had removed unbranded cattle from “Glassford Vale”; and that on instructions from him, when working on “Glassford Vale”, those employees had branded young cattle with a VPB brand when the cattle were from “Glassford Vale” cows bearing the OLQ brand. Mr Lloyd had in turn told the police of all that information, and it was the reason he went to “Skeleton Creek” on 8 November 2000, to inspect cattle transported there by Mr Freeman.
[26] Finally, Mr Lloyd had been told that there were only about 20 VPB cattle on “Glassford Vale” in May and June 2000. Mr Lloyd swore an affidavit, which the NAB read in the application for summary judgment in the claim for malicious prosecution, in which he swore that the above described information was the reason he contacted the Stock Squad, being concerned that cattle, the subject of the NAB’s mortgage, may have been moved off “Glassford Vale”. Mr Lloyd’s affidavit evidence on the summary judgment application was that he was not instructed by the NAB to contact the Stock Squad, but did contact it because of his own concerns, and that he kept Mr Fuhrman-Luck of the NAB, the person conducting Mr Freeman’s file on behalf of the bank, informed of what was going on; and that he told Mr Fuhrman-Luck that some of the NAB’s cattle may have been moved to “Skeleton Creek” or elsewhere. Mr Fuhrman-Luck also swore an affidavit read by the NAB, deposing to the same sequence of events, and swearing that the NAB did not make a complaint to the police, but that Mr Lloyd gave information to the police at about that time; and that Mr Fuhrman-Luck had encouraged the receivers to do that, because it seemed reasonable to conclude the cattle at “Skeleton Creek” may have belonged to the NAB under its stock mortgage.
[27] The police investigated the matter and ultimately charged Mr Freeman. Subsequently the charge was withdrawn, then reinstated. There was a committal hearing, and then the trial in which Mr Freeman was acquitted. The critical witnesses were the two former employees of Mr Freeman’s, who had reportedly told Mr Lloyd about Mr Freeman removing unbranded cattle, and Mr Freeman instructing them to brand OLQ weaners with the VPB brand. The NAB put the entire police brief, the affidavits of Mr Fuhrman-Luck and Mr Lloyd, and the transcript of the criminal trial, as well as a considerable body of other material, before the learned trial judge when successfully applying for the order summarily dismissing the claim against the NAB for malicious prosecution and collateral abuse of process.
[28] That collection of statements and transcript of the trial shows that the male employee signed a statement on 8 November 2000 stating that in the “last three months” he had seen young calves and weaners born from OLQ brand cattle branded with the VPB brand and transported to “Skeleton Creek”, and had also seen unbranded calves and weaners born to OLQ brand cattle taken as clean skins to “Skeleton Creek”. To his knowledge some were branded there with the VPB brand. That witness, although supporting the prosecution case, was not called at the criminal trial. The other employee described a specific occasion when 20 calves from OLQ cows were branded VPB, on Mr Freeman’s instructions. She was called at the trial, and although counsel for the NAB submitted on this appeal that she had not come up to proof, the problem for the prosecution seemed to me much more that she swore in cross-examination that, to her knowledge, both Mr Freeman’s son and daughter had each owned some OLQ branded cows on “Glassford Vale”; she did not know how many. She also swore that so too did Mr Freeman’s female partner. Mr Freeman gave similar evidence.
[29] The prosecution case had somewhat collapsed when the male employee was not called to support the description in his statement of some 200 cattle having been moved from “Glassford Vale” to “Skeleton Creek” in the three months prior to 8 November 2000. Absent that evidence, and having only that of the second employee, the prosecution failed. But despite that, in hearings conducted subsequently pursuant to s 425 of the Police Powers and Responsibilities Act 2000 (Qld), the end result was that 80 cattle and their progeny seized by the investigating police were found by judicial decision to be owned by the NAB, under a stock mortgage Mr Freeman gave to the NAB.
[30] A statement by Mrs Williams prepared for the committal proceeding, and the evidence of Detective Tomlin of the Rockhampton Stock Squad at the trial, established that the police had mustered 103 head on “Skeleton Creek” in early November 2000. That number was exclusive of some 20 head Mrs William owned. The cattle were trucked from the property on 27 November 2000. The criminal trial was conducted on the assumption, apparently common to all parties, that those 103 head mustered on 27 November included all of the cattle seen on the property on 8 November 2000 by Mr Lloyd. Ultimately, in hearings after Mr Freeman’s acquittal, it was concluded by a District Court Judge, who heard an appeal from a Magistrate, that 80 of those cattle did in fact belong to the NAB. Those were the cattle sold in January 2003, and about which Mr Freeman said that the proceeds of sale should have appeared as a credit in his bank account, reducing his indebtedness.
[31] Regarding the claim for collateral abuse of process and malicious prosecution, Mr Freeman agreed on this appeal that he had put in affidavit material in response to that filed by the NAB, in its application for summary judgment. Mr Freeman’s strong emotions about all matters are understandable; he was lent a very great deal of money which resulted in interest and capital repayment levels he could not meet, and he had understood the NAB would give him much more latitude in repayments. He lost the property, his cattle were sold, and then he was charged with stealing and tried on a case that ultimately went nowhere. But that does not establish grounds for a claim for malicious prosecution or abuse of process by the NAB.
[32] The NAB relied on the affidavit of Mr Lloyd and Mr Fuhrman-Luck, and the contents of the police brief, to establish that the NAB did not instigate the prosecution of Mr Freeman, and that in any event it was not a malicious one. There certainly were grounds for concluding the cattle numbers had dropped considerably on “Glassford Vale”, and for the investigating police to form the view that Mr Freeman had caused calves from OLQ cows to be branded VPB, without producing documents to support a right to do that. On the application for summary judgment the NAB also relied on the evidence of Detective Tomlin at the trial, that he had obtained a number of statements from quite a number of witnesses, and that he was responsible for charging Mr Freeman with stealing cattle. The statements Mr Tomlin had obtained included evidence from a person responsible for carrying quite a few cattle by truck from “Glassford Vale” to “Skeleton Creek”.
[33] To establish the complaint of malicious prosecution Mr Freeman had to prove, apart from damage, that he had been prosecuted, the proceedings brought against him had terminated in his favour, that the prosecution was instituted without reasonable and probable cause, and that it was instituted or continued maliciously.[14] To establish the absence of reasonable and probable cause he had to prove the absence of any honest belief in the (real) complainant – be that the NAB, the receiver, or Detective Tomlin – that there was a proper case against Mr Freeman on which to bring him before the court, or else to establish the absence of sufficient grounds for that belief to be reasonable on the facts available to the complainant after sufficient inquiry. To prove the existence of malice Mr Freeman had to establish that the complaint against him came from a motive or desire other than to do what the complainant bona fide believed to be right in the interest of justice, or that it was an indirect or improper motive and not one in furtherance of justice.[15]
[34] Where, as here, Mr Freeman’s case was that a third party, the NAB, was the real instigator of the prosecution conducted at its behest by the police, Mr Freeman had to establish that absence of reasonable and probable cause, and the presence of malice, in the NAB, and that the NAB, because of information it supplied to the police, had such a real role in inducing Detective Tomlin to begin the prosecution that the NAB must virtually have driven it. Expressing the conclusion that way accords with the judgment of this Court, relevantly given by Holmes JA, in Seabrook v Asher [2006] QCA 238.[16] Holmes JA reviewed a number of authorities on malicious prosecution instituted by a third party, before expressing the matter as I have described.[17] Her Honour examined the law applicable where the claim made is that a third party, by false information, has influenced a prosecuting authority with an independent discretion to bring and pursue criminal proceedings. She held that what those authorities establish is that the false information must have had some real role in inducing a police officer to commence a prosecution, so much so that the informant must “virtually” have driven the prosecution.[18]
[35] The NAB’s material placed before the learned trial judge in this matter, and Mr Freeman’s material, established that Mr Freeman could not show that the receiver, Mr Lloyd, had put any false information before the police, nor that Mr Lloyd put false information to the police because he was instigated by the NAB to do so, nor that any of the information on which the police acted in charging Mr Freeman was false. The fact that Mr Freeman had support from his previous employee for his own evidence that an unspecified number of cows branded OLQ were owned by his children or partner did not make false any information on which he was prosecuted. The NAB thus established that Mr Freeman had no prospects at all of proving on the balance of probabilities that it initiated the prosecution, or that it was done without reasonable or probable cause, and with malice. The learned judge was correct in summarily dismissing the claim.
After acquired property
[36] Part of Mr Freeman’s argument included that his claim for malicious prosecution was property acquired after he had become bankrupt, as perhaps were his claims in respect of the failure to credit the proceeds of the sale of the 80 cattle, and that after his discharge from bankruptcy in 2005 those causes of action were revested in him, as his property. The argument rested on his construction of certain provisions of the Bankruptcy Act, and was dealt with in the reasons for judgment of the President in Freeman v NAB [2006] QCA 260 at [13]. The President held there that s 126 of the Bankruptcy Act, on which Mr Freeman relied, did not have the effect that after acquired-property of a bankrupt belonged to the bankrupt until the bankrupt’s trustee claimed it, and held that the position was not changed because Mr Freeman was discharged from his bankruptcy.[19] I agree with the reasoning supporting those conclusions, which are binding in any event.
The proceeds of sale of the 80 head
[37] By the end of oral argument the position regarding the complaint of un-receipted proceeds of sale of the 80 head was that the NAB contended that not all the relevant bank records were before this Court, and that the proceeds had been credited in reduction of the debt, as had been foreshadowed in an affidavit by Mr Fuhrman-Luck sworn 28 February 2002, and read in the Federal Court and on this appeal. While Mr Freeman made many references to the NAB’s dishonesty in failing to credit the proceeds of those sales, there was simply insufficient information before this Court to conclude that had not happened. But if it did not, that was a matter for Mr Freeman’s trustee in bankruptcy, since those events were during the period of the bankruptcy.
Charging interest
[38] Mr Freeman’s oral argument made a purported connection between the asserted failure to credit the sale of those cattle into any bank account in his name, and the existence of what he described as “dummy” bank statements. He ultimately clarified that term as meaning a second set of bank statements for his account, which the bank had produced and sent to him in or about 2001, and in which his debt to the NAB had been increased by the addition of interest. He pointed to what he described as genuine bank statements for the same account, which did not record interest being charged after 7 April 1998. He contended that the “dummy” statements – the ones adding interest – had been created by the NAB to support its overall debt claimed in the Certificate of Debt relied on against him.
[39] Those general propositions were put in various ways in his oral and written argument. But his own material shows that it is common for banks which are not expecting actually to receive payments of interest, to not record its receipt, for taxation purposes; but to maintain at the same time a record of what the bank might get, should the debtor win the casket one day, or the security the bank held increase sharply in value. I was not persuaded Mr Freeman’s arguments demonstrated the pleaded deceit, and once again, if the debt claimed by the bank was dishonestly increased by the addition of interest, that was the matter for the trustee to challenge, not Mr Freeman.
Agreement to take $500,000
[40] Allied to those matters was a proposition Mr Freeman advanced only in his oral argument, namely that in or about March of 1998 he had agreed with the NAB that it would accept payment of $500,000 in (complete) settlement of his debt to it. Mr Freeman in fact paid no money at all in settlement of the debt, and appeared to concede in his oral submission that the payment he made on 7 April 1998 was calculated on the debt appearing in the bank statements for the time, namely $1,020,000 owing by him to the NAB; but he said both that it was agreed the NAB would take $500,000 and agreed that it would not charge further interest.
[41] That agreement was not pleaded at the original trial or in the struck out pleadings, and Mr Freeman acknowledged that he had said nothing about it in his evidence at the original trial. Even now he does not describe any matter that could possibly have raised an estoppel against the NAB because of his reliance on that promise, on the assumption it was made, a matter about which there is actually no evidence at all. It is simply far too late to raise that now.
Other matters
[42] Mr Freeman complained that the original trial judge, and the Court of Appeal, had simply failed to advert to evidence supporting his description of the forced sale of 300 breeders in late 1996 and early 1997. But the only documents to which he referred this Court were his affidavit assertions and pleadings, not actual records of sale. That point went nowhere.
[43] Mr Freeman also referred to documents in the appeal record disclosing that the bank expected to recover perhaps $770,000 from the sale of “Glassford Vale”, and internal NAB documents describing his debt as a “non accrual” loan. He relied on those to support his argument that the bank had agreed not to charge him interest, and to take $500,000 only (and then increased the amount to $770,000). But all that those documents show is that the NAB only expected to recover $770,000, and no further interest. So far events have justified both assumptions. The property was sold for $770,000, and Mr Freeman did not pay any more in interest. Those documents do not support the struck out pleadings, even if those did disclose a cause of action Mr Freeman could enforce.
[44] It follows that this appeal must fail entirely, and I would dismiss it, and order that the appellant Mr Freeman pay the respondent’s costs of the appeal; with leave to the parties to make written submissions within 14 days of publication of this judgment as to whether costs should be assessed on the standard or the indemnity basis.
[45] HOLMES JA: I agree with the reasons of Jerrard JA and with the orders proposed.
Footnotes
[1] Appeal No 219 of 2006, 18 July 2006.
[2] SC No 4013 of 1998, 11 October 2000.
[3] Appeal No 9718 of 2000, 2 November 2001.
[4] As described by McHugh JA in Crescendo Management v Westpac (1988) 19 NSWLR 40 at 46, referring to Barton v Armstrong [1976] AC 104.
[5] Freeman v National Australia Bank Ltd (unreported, HCA, Kirby and Heydon JJ, B96 of 2001, 14 March 2003).
[6] Quoted at Freeman v National Australia Bank Ltd (unreported, HCA, Kirby and Heydon JJ, B96 of 2001, 14 March 2003).
[7] Cummings v Claremont Petroleum NL (1995) 185 CLR 124 at 136-138, 146.
[8] At AR 27.
[9] [2005] HCA 12; M61 of 2003, 10 March 2005.
[10] These statements are [33] and [34] in the judgment.
[11] Those observations are in [43] and [77] of the joint judgment.
[12] [2003] QCA 218; Appeal No 8623 of 2002, 30 May 2003.
[13] SC No 6325 of 2001, 12 December 2002.
[14] Butler v Simmonds Crowley & Galvin [1999] QCA 475; Appeal No 10337 of 1998, 12 November 1999 at [17] - [18].
[15] See Ivory v Telstra Corporation Ltd & Anor [2002] QCA 457 at [28]-[31]; Appeal No 4059 of 2001 and Appeal No 4423 of 2001, 1 November 2002.
[16] Appeal No 10732 of 2005, 23 June 2006.
[17] Those cases include Davis v Gell (1924) 35 CLR 275, Commonwealth Life Assurance Society Ltd v Brain (1935) 53 CLR 343 per Dixon J at 379, Mahon v Rahn (No 2) [2000] 1 WLR 2150 and Commercial Union Assurance Company of NZ Ltd v Lamont [1989] 3 NZLR 187.
[18] Seabrook v Asher [2006] QCA 238 at [17].
[19] Relying on Stone v Ace-I.R.M. Insurance Broking Pty Ltd [2004] 1 Qd R 173 and Daemar v Industrial Commission of New South Wales [No 2] (1990) 22 NSWLR 178 per Kirby P at 182-185.