Menso v Commonwealth Bank of Australia
[2016] QCA 188
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- Unreported Judgment
- Appeal Determined (QCA)
- Menso v Commonwealth Bank of Australia[2016] QCA 188
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Menso v Commonwealth Bank of Australia[2016] QCA 188
Menso v Commonwealth Bank of Australia[2016] QCA 188
SUPREME COURT OF QUEENSLAND
CITATION: | Menso v Commonwealth Bank of Australia [2016] QCA 188 |
PARTIES: | MARIO JOHN MENSO |
FILE NO/S: | Appeal No 7177 of 2016 DC No 1777 of 2015 |
DIVISION: | Court of Appeal |
PROCEEDING: | Application for Stay of Execution |
ORIGINATING COURT: | District Court at Brisbane – Unreported, 26 May 2016 |
DELIVERED ON: | 21 July 2016 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20 July 2016 |
JUDGE: | Morrison JA |
ORDERS: |
|
CATCHWORDS: | APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – STAY OF PROCEEDINGS – GENERAL PRINCIPLES AS TO GRANT OR REFUSAL – where the applicant borrowed money from the respondent Bank and secured repayment by granting a mortgage over real property – where the respondent commenced proceedings against the applicant, seeking recovery of possession on the basis that there had been a default in repaying the loan – where a summary judgment application was granted in the District Court brought by the respondent against the applicant – the District Court judge dismissed the applicant’s counterclaim and other applications and ordered that the respondent recover possession of the mortgaged land, and judgment for the debt – where an enforcement warrant has been issued and is due to be executed on 26 July 2016 – where the applicant contends that the orders of the learned primary judge should be stayed – whether a stay of proceedings should be granted Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685, cited Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453; [2008] QCA 322, followed Croney v Nand [1999] 2 Qd R 342; [1998] QCA 367, cited Raschilla v Westpac Banking Corporation [2010] QCA 255, cited Williams v Chesterman [1992] QCA 198, cited |
COUNSEL: | The applicant appeared on his own behalf K Gothard for the respondent |
SOLICITORS: | The applicant appeared on his own behalf Gadens Lawyers for the respondent |
- MORRISON JA: In 2005 Mr Menso borrowed from the Commonwealth Bank and secured repayment by granting a mortgage over real property in both his name and that of his then partner, Ms Bos.
- In May 2015 the Bank commenced proceedings against Mr Menso and Ms Bos, seeking recovery of possession of the mortgaged land on the basis that there had been default in repaying the loan, which had been called up.
- On 26 May 2016 the District Court granted a summary judgment application brought against Mr Menso by the Commonwealth Bank. At the same time it dismissed Mr Menso’s counterclaim, and other applications brought by Mr Menso.
- The relevant orders were that the Bank recover possession of the mortgaged land, and judgment for the debt, in the sum of $204,369.82, plus interest.
- An enforcement warrant has issued and is due to be executed on 26 July 2016. Mr Menso seeks a stay of an order of the District Court made on 26 May 2016, pending an appeal against that decision.
Legal Principles
- The test applicable on an application to stay a judgment pending an appeal is simply expressed. It is whether the case is an appropriate one for a stay.[1]
- As simply as it is expressed, the test reflects the wide discretion reposed in the Court. However, authority establishes the traditional factors to be taken into account on such an application,[2] namely whether:
- there is a good arguable case;
- the applicant will be disadvantaged if a stay is not granted; and
- there is some competing disadvantage to the respondent if the stay is granted, which outweighs the disadvantage suffered by the applicant.
- On an application for a stay pending appeal, the Court will make an assessment of the prospects. In Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd[3] the Court said:
“[I]t will not be appropriate to grant a stay unless a sufficient basis is shown to outweigh the considerations that judgments of the Trial Division should not be treated as merely provisional, and that a successful party in litigation is entitled to the fruits of its judgment. Generally speaking, courts should not be disposed to delay the enforcement of court orders.”
- The Court went on to state, in relation to the assessment of the prospects, and a conclusion that prospects may be poor:
“In cases where this Court is able to come to a preliminary assessment of the strength of the appellant’s case, the prospects of success on appeal may weight significantly in the balance of relevant considerations. The prospects of success will obviously tend to favour the refusal of a stay if the prospects of the appeal can be seen to very poor.”[4]
- The Court in Cook’s Constructions also referred to the relevant considerations, that are applicable on a stay in application, in these terms:
“The decision of this court in Berry v Green suggests that it is not necessary for an applicant for a stay pending appeal to show ‘special or exceptional circumstances’ which warrant the grant of the stay. Nevertheless it will not be appropriate to grant a stay unless a sufficient basis is shown to outweigh the considerations that judgments of the Trial Division should not be treated as merely provisional and that a successful party in litigation is entitled to the fruits of its judgment.”[5]
- In looking at the relevant factors, the Court identified the prospects of success, and the question of whether the appeal would be rendered nugatory and, then, irremediable harm, if that should occur.
- The principle that poor prospects would favour the refusal of stays is because “if there is obviously little prospect of ultimate reversal of existing orders, the concern to ensure that the existing orders can be overturned without residual injustice will have less claim on the discretion than might otherwise be the case.”[6] In Cook’s Constructions, the parties accepted that the appeal was arguable, which is why the Court then turned its attention to whether the appeal might be rendered nugatory.
The basis for the proposed appeal
- In the filed notice of appeal there is only one ground expressed, namely: because the learned primary judge had been substituted for the judge originally listed to hear the application,[7] his Honour therefore did not have appropriate time to peruse Mr Menso’s material, and did not take into account parts of it, before the orders were made.
- It became apparent during oral argument that the intended grounds were wider, and reflected the grounds raised below to resist the summary judgment application. The Bank did not object to the wider basis being advanced.
- The grounds contended were the same as those advanced below. They are summarised in paragraph [17] below.
- However, despite repeated attempts to have Mr Menso identify the way in which it was contended that the learned primary judge erred, none was identified. All that Mr Menso did was to advance, with a deal of repetition, the same grounds as raised below.
The approach of the learned primary judge
- that he had been distracted by personal events (including two break-ins at his house) and needed an extension of time to file a better defence;
- he had started to repay $100 per week off the debt;
- his inability to repay the debt was due, at least in part, to the wrongful actions of government agencies, such as State Penalties Enforcement Registry (SPER), the Queensland Police Service (QPS) and the Queensland Building and Construction Commission (QBCC);
- delay caused by other litigation made planning difficult;
- his ability to obtain credit had been adversely affected because the Bank had at one stage obtained a default judgment against him;
- he had made offers to the Bank (both to refinance and to mediate the dispute between them) which the Bank had not accepted;
- the Bank had written a letter to him on 16 October 2012 which was addressed to him as “a Bankrupt”; as his Bankruptcy had been annulled earlier in time, the letter was defamatory and had caused him (unspecified) loss and damage; for this purpose the contention was that even though the words “a Bankrupt” appeared only in the window of the envelope, members of the public may have seen it;
- the Bank had also addressed such a letter to his Trustee in Bankruptcy;
- the Bank had failed to offer amends for the defamation caused by these acts;
- during an interview with a manager of the Bank at Thuringowa, that manager addressed Mr Menso in a humiliating way, which would have been audible to others;
- his credit history wrongly showed him as a Bankrupt; the Bank should have advised Mr Menso of that;
- he had a good claim against the QBCC in respect of a licensing issue, for some sort of breach of duty or obligation; and
- his driver’s licence had been wrongly suspended by SPER, which meant he had difficulty in leaving his property and working.
- The learned primary judge assumed, in Mr Menso’s favour, that he could establish those causes of action. His Honour then found that: (i) even if they were established they did not raise a defence to the Bank’s claim; and (ii) the possibility that Mr Menso might have a claim for damages for defamation did not constitute a defence to the Bank’s claim.
- His Honour went on to consider whether the Bank had made out its claim, concluding that it did. In the course of that consideration his Honour noted that: (i) there was no merit in Mr Menso’s applications to stay the proceedings so that the defamation claims could proceed first; (ii) there was no merit in the application to adjourn the proceedings to put in a better defence because what had been raised did not give rise to a defence to the Bank’s claim; and (iii) Mr Menso’s application for further disclosure related to the defamation case, not the Bank’s claim or even the counterclaim.
- The learned primary judge noted that the loan of $132,000 by the Bank was admitted in the defence, and there was no defence that it had been repaid. His Honour found that there had been no repayments since 28 February 2015 and the amount then outstanding was $204,369.82. Therefore he held that the Bank was entitled to judgment. His Honour found that Mr Menso “has no real prospects of defending all or part of the claim and that there is no need for a trial with respect to the Bank’s claim…”.
Discussion
Prospects of success - a good arguable case?
- There is no merit whatever in Mr Menso’s contention that the learned primary judge did not assimilate the material on the application, or fail to take parts into account. The reasons for judgment reveal a comprehensive recitation of the grounds advanced, and a careful consideration of all the points raised. Moreover, as mentioned at the hearing of this application, I had the benefit of reading the transcript of the hearing below. The learned primary judge made it plain that he had already perused the file material before the hearing commenced.
- The grounds raised on this application were the same as those below, with some added gloss. I respectfully share the view of the learned primary judge that they have no merit as a defence to the Bank’s claim. I am able to deal with them in brief terms.
The defamation case
- This case is that the Bank’s letters to Mr Menso and the Trustee wrongly addressed him as “a Bankrupt”. There is not the slightest evidence that the address was seen by anyone other than Mr Menso and the Trustee, each of whom knew that the Bankruptcy had been annulled some time before. How it could be defamatory is difficult to see. It is even more difficult to see how it could sound in a damages claim, let alone one that could be advanced against the Bank’s claim for the mortgaged land and the loan debt.
- Mr Menso asserted that the conduct in sending the letters breached some sort of industry code of conduct but that assertion was not made good. He also contended that whilst the Bank had apologised for the error, it had not made any offer of recompense for that conduct. I cannot see what could be meaningfully offered that would impeach the Bank’s claim under the loan and mortgage.
Actions by SPER, QBCC and QPS
- Mr Menso contended that actions of these three agencies had caused: (i) his inability to repay the loan and to raise sufficient finance to pay out the Bank or offer meaningful restructuring of the loan; (ii) his driver’s licence to be suspended; and (iii) costly litigation which drained his resilience, finances and time.
- The contentions suffer for a number of reasons, not least of which is that Mr Menso could not identify any way in which a claim against them could give rise to a defence against the Bank’s claim on its mortgage and loan. All of those agencies operate independently of the Bank, and none of the suggested causes of action are even remotely connected to the loan, even if it is true that Mr Menso’s inability to repay was caused or affected, in part, by those agencies.
Complaints against the Trustee in Bankruptcy
- Mr Menso contended that the Trustee had breached his obligations in various ways, and that caused his credit difficulties. This included wrongly claiming costs and lodging caveats over the land, and not promptly removing them.
- Even if these matters were true, the contentions suffer in the same way as those concerning SPER, QBCC and the QPS. The claims raise no arguable defence against the Bank.
Complaints about the Bank’s conduct
- The contentions here were that the Bank breached its obligations by: (i) being rude to Mr Menso and not apologising; (ii) not accepting offers from him to renegotiate the loan, or mediate the dispute; (iii) failing to answer questions directed to the Bank, eg as to who really owned the loan; and (iv) not correcting Mr Menso’s credit history concerning the annulment of his Bankruptcy, such that he found it difficult to get finance.
- The contentions have no merit. The Bank was not obliged to enter into any arrangement to refinance the loan, if it had decided (as it evidently did) to ensure repayment in full if that were possible. The various offers that Mr Menso alleged were not identified with any precision, nor any unconscionable refusal to deal with him. The rudeness of a branch manager does not, even faintly, disclose a cause of action likely to impeach the claim under the loan and mortgage. The failure to answer questions, made rather pejoratively, does not take the matter further. For example, they asked for proof as to who owned the loan when that was an admitted fact on the defence.
- Similarly the Bank was not obliged to agree to mediate. By the time that proposal was put forward the proceedings had commenced and the application for summary judgment had been filed.
- The correction of Mr Menso’s credit history does not advance matters. Whilst Mr Menso asserted that it impeded his ability to raise finance, there is no proof of that in the sense that no application for finance is revealed on the material, nor any refusal by a particular financier in response to a particular application. The claims never rose beyond mere assertion.
- In any event, if there had been such an application and the prospective financier had raised the Bankruptcy as an issue, Mr Menso knew that the annulment had occurred and could have corrected the matter.
- Mr Menso contends that when the Bank addressed the letters to him as “a Bankrupt” he asked (on 5 November 2012) for various details as to the basis upon which the Bank had said so, and the Bank did not respond. That was said to be a breach of its obligations. Even if that were so I cannot see how it impeaches the Bank’s claim under the mortgage and loan.
Complaints against the Bank’s solicitors
- Mr Mesno asserted that in 2006 the Bank’s present solicitors had been engaged to act for the ANZ Bank in respect of an ANZ loan facility arranged in 1996. He claimed that at some point in October 2006 those solicitors wrongly received about $11,000 that was part of a costs order, then withdrew from their retainer for the ANZ. Thereafter the issues between the ANZ and Mr Menso were mediated to a successful conclusion.
- Mr Menso asserted that this gave rise to some sort of claim, or that it raised doubts about the Bank’s conduct in 2012 and beyond. It is impossible to see how that follows.
Other assertions
- Mr Menso made a number of other assertions in his material and in oral address. I do not see the need to deal with them individually as none had any specificity, nor any real suggestion of a meritorious claim that might be advanced against the Bank such as to defeat its claims under the mortgage and loan, and the judgment.
- No error on the part of the learned primary judge has been identified.
Conclusion as to prospects of success
- In my view none of the claims raised by Mr Menso has any realistic prospect of succeeding to overturn the judgment given below. Mr Menso’s proposed appeal lacks any substantive merit.
Prejudice
- Mr Menso contended that the loss of his property was prejudice that outweighed anything that the Bank might suffer if a stay was granted. True it is that the property will probably be lost to Mr Menso if recovery of possession continues. I say “probably” because Mr Menso made vague claims that there was a finance proposal in the wings, and it may come to fruition in the next week. No doubt if Mr Menso could offer enough, the Bank would likely rather avoid the exercise of selling.
- However, there is an extant judgment, after a hearing going to the merits of Mr Menso’s possible defences to the Bank’s claim. The Bank has been held out from full recovery for some years and the debt is mounting with no imminent repayment by Mr Menso.
- Further, there are no real prospects of success in the proposed appeal. For the reasons set out in paragraphs [8] to [12] above the lack of any such merit is a powerful factor in favour of refusing the stay.
- An additional factor is that the Bank is financially sound, so that if Mr Menso obtains a money judgment against the Bank, there is reason to think it will be met.
- In my view the prejudice to Mr Menso from the refusal of a stay does not reach the level that warrants the Court’s discretion being exercised that way.
Removal of property
- The warrant of execution is due to be enforced on 26 July 2016, about five days away. Mr Menso submitted that he needed more time than that to remove his possessions and property from the land. Instances of the type of thing that was said to cause difficulty were: two demountable buildings on sleds, a deconstructed 250m2 steel shed, various pieces of unspecified equipment, a bus currently sitting on stands, and nine pigs kept for personal consumption.
- Mr Menso points out that the loss of his driver’s licence impedes his ability to move the possessions easily or in a timely way. He says he only discovered on Friday 15 July that the licence had been suspended, but that it was suspended some weeks ago.
- The Bank resists any further grant of time but does not identify any prejudice that would flow from a short extension of time in respect of the execution of the warrant.
- It is true that Mr Menso could have taken steps before this to remove the property. But no doubt he considered he had prospects on the stay application, and it can be argued that he was entitled to wait and see what the outcome of that might be. It is also true that in mid-June 2016 Mr Menso applied for a stay of the execution of the warrant, and that was refused by Dorney DCJ. However, at least two things have changed since then, namely the appeal proceedings and the loss of Mr Menso’s licence.
- Given the loss of his driver’s licence, I consider that Mr Menso should be given a short extra period of time to remove himself from the property, rather than face the storage costs that would be incurred if the property is removed by the sheriff. In the circumstances the execution of the warrant will be stayed until 9 August 2016, allowing two weeks longer than the proposed execution date.
Disposition
- For the reasons expressed above I refuse the application. There is no reason why costs should not follow the event.
- The orders are:
- The application for a stay is refused.
- The applicant must pay the respondent’s costs, of and incidental to the application, to be assessed.
- The execution of the warrant of execution is stayed until 4 pm on 9 August 2016.
Footnotes
[1] Williams v Chesterman [1992] QCA 198; Crony v Nand [1999] 2 Qd R 342; [1998] QCA 367.
[2] Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685; Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453; Raschilla v Westpac Banking Corporation [2010] QCA 255.
[3] Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453, per Keane JA (with whom McMurdo P and White AJA agreed), at [12]. (Cook’s Construction)
[4] Cook’s Construction, at [13].
[5] Cook’s Construction, at [12]. Internal footnotes omitted.
[6] Cook’s Construction, at [13].
[7] This was because the learned primary judge had been due to sentence a certain offender that day, but discovered that he knew the offender’s father. His Honour therefore recused himself.