Trembath v Bank of Western Australia
[2005] QDC 213
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- Unreported Judgment
- Trembath v Bank of Western Australia[2005] QDC 213
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Trembath v Bank of Western Australia[2005] QDC 213
Trembath v Bank of Western Australia[2005] QDC 213
DISTRICT COURT OF QUEENSLAND
CITATION: | Trembath v Bank of Western Australia [2005] QDC 213 |
PARTIES: | Gordon Richard Trembath (appellant) v. Bank of Western Australia Ltd (respondent) |
FILE NO/S: | 361/04 |
DIVISION: | Appellate |
PROCEEDING: | Appeal |
ORIGINATING COURT: | Maroochydore |
DELIVERED ON: | 16 June 2005 |
DELIVERED AT: | Maroochydore |
HEARING DATE: | 25 May 2005 |
JUDGE: | K.S. Dodds, DCJ |
ORDER: | Appeal allowed. The respondent pays the appellants costs of the appeal. Cost of the application for summary judgment reserved for the magistrate. |
CATCHWORDS: | Appeal against order for summary judgment. Whether need for a trial of the claim. |
COUNSEL: | Mr Beacham for the appellant Mr Scott – MacKenzie for the respondent |
SOLICITORS: | Sols Sykes Pearson Miller for the appellant Jones King Lawyers for the respondent |
- [1]This proceeding involved two appeals. There was an appeal against a decision of a magistrate giving summary judgment. On the 17th of September 2004 the magistrate gave summary judgment pursuant to rule 292 Uniform Civil Procedure Rules (UCPR) against the appellant who was a defendant in a proceeding in the magistrates court. He also dismissed the appellant’s application for further disclosure in the proceeding. There was also a cross appeal by the respondent against the magistrate’s order for costs.
- [2]On the 13th of October 2003 the respondent had commenced proceedings in the magistrates court Maroochydore against one Carrington, the appellant and one McNeil for $33,309.90 pursuant to guarantees and indemnities allegedly given by them. On 2nd December 2003 the appellant issued a third party notice to McNeil and Carrington claiming contribution of one third of any monies payable by the appellant to the respondent under the guarantees. On the same date the appellant filed his defence and counterclaim. On 14th September 2004 default judgment was entered against McNeil on the respondent’s claim. On 17th September 2004 the magistrate gave a consent judgment for the respondent against Carrington on the respondent’s claim.
- [3]The grounds of appeal against the summary judgment were that the magistrate was wrong in finding:- that there was evidence that the appellant had executed guarantees, and that he had in fact executed guarantees; that the respondent was a party to the guarantees, that the guarantee were not tainted by unconscionable conduct and undue influence, and that the appellant had no real prospect of successfully defending the respondent’s claim and there was no need for a trial. The grounds of the cross appeal were that the magistrate was wrong in holding that he was not bound to order costs in accordance with clause 22.4 of the standard terms and conditions, part of a guarantee and indemnity and that he had a discretion in awarding costs.
- [4]The facts before the magistrate
In or about 1997 the respondent appointed Leasebank (Australia) Pty Ltd (Leasebank) as its agent to purchase goods for leasing under leasing agreements and to enter into leasing agreements in relation to those goods.
- [5]At all material times, Carrington, McNeil and the appellant were directors of Coolum Beach Club Hotel Pty Ltd (Hotel) Coolum Beach Club Properties Pty Ltd (Properties) and Coolum Beach Club Pty Ltd (Club).
- [6]In February 1998 Hotel was in touch with Leasebank regarding the leasing of poker machines. By letter dated 16th of February 1998 addressed to Carrington as project director of Hotel Leasebank advised that a finance request from Hotel for $200,000.00 to purchase gaming equipment had been approved subject to certain conditions. One of those conditions with respect to the first $70,000.00 of the amount, involved a sale and lease back arrangement over 48 months with respect to some used gaming machines. The letter advised that joint and several guarantees from all directors would be required.
- [7]Minutes of a meeting of Properties held on the 8th of April 1998 regarding financial accommodation from Leasbank to Hotel dealt with the lease arrangements. The minutes recorded a resolution dealing with the security in favour of the bank for advances made and to be made to Hotel. Carrington and the appellant were appointed to be authorised signatories of Properties “for all purposes in connection with the security”.
- [8]In furtherance of Leasebank providing credit, Leasebank required the directors to sign an authority under the Privacy Act 1988 as guarantors and to provide a statement of assets and liabilities. Signatures which purport to be those of Carrington and the appellant appear on an authority.
- [9]On or about the 9th of October 1998 Hotel sold to Leasebank and leased back five gaming machines on the terms and conditions of a lease agreement (the first lease agreement). This lease agreement, as did the second and third lease agreements incorporated “the attached standard terms and conditions applicable to lease agreements”. Carrington and the appellant purportedly executed the lease agreement under the common seal of Hotel. Carrington, McNeil and the appellant purportedly executed the lease agreement as guarantors. In doing so each acknowledged that the terms and conditions of the lease agreement were as set out in the lease agreement form and the attached standard terms and conditions applicable to lease agreements and agreed to be bound by the terms and conditions of the agreement. The purported signatures of Carrington Trembath and McNeil purport to be witnessed by one Helen Jeanette Huston.
- [10]On 19th October 1998, Leasebank leased to Hotel eight new signs on the terms and conditions of a lease agreement (the second lease agreement). This lease agreement was purportedly executed by Carrington and McNeil under the common seal of Hotel. Carrington, McNeil and the appellant purportedly executed this lease agreement as guarantors acknowledging that the terms and conditions of the agreement were as set out in the lease agreement form and the attached standard terms and conditions applicable to lease agreements and agreed to be bound by the terms and conditions of the agreement. The purported signatures of Carrington the appellant and McNeil purport to be witnessed by Helen Jeanette Huston.
- [11]On 29th January 1999 Leasebank leased to Hotel seven gaming machines (the third lease agreement). This lease agreement was purportedly executed under the common seal of Hotel by Carrington and McNeil. Carrington McNeil and the appellant purportedly executed the agreement as guarantors, acknowledging that the terms and conditions of the agreement were set out in the lease agreement form and the attached standard terms and conditions applicable to lease agreements and agreed to be bound by the terms of this agreement. The purported signatures of Carrington the appellant and McNeil purport to be witnessed by one Sharon Robson.
- [12]Hotel defaulted under the lease agreements.
- [13]On or about the 7th of February 2003 Leasebank received from solicitors for Discovery Beach Projects Pty Ltd, a facsimile informing that on 20th December 2002 their client acquired the business and property of Hotel and asking that Leasebank collect the gaming machines and signs. On the same date the respondent terminated the lease agreements. The gaming machines were returned to Leasebank and sold by private treaty. Leasebank was unable to recover the signs. $29,927.93 remained due under the three lease agreements.
- [14]On or about the 30th of August 2003 the respondent sent to Carrington, McNeil and the appellant demand for payment of the amount of $29,297.93, plus $292.79 GST and interest.
The appellant’s defence was filed on 2nd December 2003. He denied that he ever entered into any lease agreement with Leasebank in his personal capacity. He said he did not execute the lease agreements on behalf of Hotel. He denied any liability to pay the respondent the sum claimed. He said he had no recollection of executing any guarantees in favour of Leasebank under the first, second or third lease agreement. He said he was never made aware by any representative of Leasebank or the respondent that guarantees could be enforced by the respondent. He said no demands had been made to him by Leasebank or the respondent for payment of the money the subject of the proceeding. He said that Carrington had requested him to sign various documents relating to business being conducted by Hotel. He said that if he had executed the guarantees it would be unconscionable for the respondent to enforce them because at the time of execution he was suffering from a deterioration of his health necessitating the taking of prescribed medication and was under psychiatric treatment, was extremely upset and had difficulty coping with his affairs, was acting on advice from Carrington and McNeil, was unaware he was signing personal guarantees guaranteeing the obligations of Hotel, had obtained no independent advice, was not advised by Leasebank or the respondent’s employees as to the effect of the guarantees, Carrington and McNeil were acting as agents for Leasebank and / or the respondent, the conduct of Carrington and McNeil was undertaken pursuant to Section 84 of the Trade Practices Act at the behest of the respondent and was unconscionable, contrary to section 51 of the Trade Practices Act.
Discussion
- [15]Rule 292 UCPR makes provision for summary judgment for a plaintiff. Before a court may grant summary judgment it must be satisfied the defendant has no real prospect of successfully defending all or a part of the claim and that there is no need for a trial of the claim or the part of the claim.
- [16]In decisions when courts have considered the application of the rule there is discussion about the meaning of “no real prospect of successfully defending” and “no need for a trial”.
- [17]In Foodco Management Pty Ltd and Anor v. Go My Travel Pty Ltd 2001 QSC 291 10 August 2000, Wilson J said, “In order to succeed on its application for summary judgment the defendant must persuade the court that the plaintiff has no prospect of succeeding on all or part of their claim, and that there is no real need for a trial of the claim or part of the claim … This is a new rule which is similar to rule 24.4 of the Civil Procedure Rules UK. In Swain v. Hillman (2001) All ER 91 at 92, Lord Wolfe said of the UK rule: The words “no real prospect of succeeding” do not need any amplification, they speak for themselves. The word “real” distinguishes fanciful prospects of success or … they direct the court to the need to see whether there is a “realistic” as opposed to a “fanciful” prospect of success …. In Bernstrom v. National Australia Bank Limited 2003 1 QR 469 the Court of Appeal endorsed the approach of the Court of Appeal in Swain v. Hillman. See also Queensland University of Technology v. Project Constructions (Aust) Pty Ltd and Anor 2003 1 QR 259. In Gray v. Morris 2004 QCA 5 McMurdo J observed that rules 292 and 293 should be applied by reference to “their clear and unambiguous language without a need for any paraphrase or comparison with a previous rule. In applying the rules “in particular the consideration of whether there is a need for a trial a court must keep in mind why the interests of justice usually require the issues to be investigated at a trial.” His honour as did Chesterman J endorsed the decision of the High Court in Fancourt v. Mercantile Credits Ltd (1983) 154 CLR 87, where the justices said ‘the power to order summary or final judgement is one which should be exercised with great care and should never be exercised unless there is no real question to be tried”. In National Australia Bank Ltd v. Troiani and Anor 2002 QCR 196 Fryberg J with whose reasons McPherson JA and Helman J agreed said “For a plaintiff to obtain summary judgment the court must be satisfied that the defendant has no real prospect of successfully defending the claim and that there is no need for trial of the claim. Although the bank bore the onus of proof on the application there was an evidentiary onus on the appellant to show some basis for arguing that there was a real prospect within the meaning of the rule. I do not think that they did so … However the question whether there is a need for a trial of the claim is more difficult. Before us the appellants submitted that the examination of the factual circumstances surrounding the relationship between the bank and the receivers was a matter which should have been allowed to proceed to trial. … Some support for this decision is to be found in the decision of Megarry J in Miles v. Bull. That was a decision under the English equivalent of the (repealed) rules of the Supreme Court of Queensland. This court has held: “Subject to the particular requirements of (the Uniform Civil Procedure Rules) the principles developed in leading cases concerned with such applications remain relevant. Megarry J said (referring to the words in the previous rule “that there ought to for some other reason to be a trial”) “These last words seem to me to be very wide. They also seem to me to have special significance where as here most or all of the relevant facts are under the control of the plaintiff and the defendant would have to seek to elicit by discovery, interrogatories and cross examination those which will aid her. If the defendant cannot point to a specific issue which ought to be tried but nevertheless satisfies the court that there are circumstances that ought to be investigated, then I think that those concluding words are invoked. There are cases when the plaintiff ought to be put to strict proof of his claim and exposed to the full investigation possible at a trial; and in such cases it would in my judgment be wrong to enter summary judgment for the plaintiff”. The considerations referred to by Megarry J were applied by the Full Court of the Supreme Court of Western Australia in Wedge v. Service Finance Corporation Ltd 18 March 2002.
- [18]The issues in the appeal can be dealt with under three heads:
On the material to be considered by the magistrate, was it shown:
the appellant had executed the guarantees;
the respondent was a party to the guarantees;
the respondent was not a party to any material unconscionable conduct or undue influence such that equity should intervene.
- [19]The appellant swore an affidavit in the proceedings before the magistrate. He deposed to being involved in a resort known as Discovery Beach resort. It was owned by Properties. It consisted of apartments and a licensed hotel and bottle shop run by Hotel. Club had the management rights to the resort. He along with Carrington and McNeil was a director of the three companies. Carrington was an experienced businessman, McNeil an experienced solicitor. He trusted his co-directors to appropriately advise him. In 1996 he commenced to suffer from depression which became severe. He sought counselling from a psychologist and later with a psychiatrist. He took antidepressant medication. His concentration was poor, his thinking processes disturbed and he had difficulty making decisions. He had difficulty coping and became reliant on others in making decisions. He had no recollection of being informed Hotel was to lease goods from the respondent. He denied having any discussions with one Peter Adams of Leasebank in February 1998 and May 1998 in which the respondent was mentioned. He had no recollection of signing any of the lease agreements or guarantors acknowledgements. It was his practice to sign documents given to him to sign by Carrington or McNeil. He had no recollection of ever being told by either that documents he was signing were personal guarantees or being provided with the standard terms and conditions. He did not appear to have filled in writing on the acknowledgement of guarantee forms. The signatures purporting to be his on the leases and guarantees and acknowledgements of guarantee looked similar to his signatures, but because he always puts a full stop after his signature, he has doubts whether the signatures are his. In 1996 he provided Carrington with a statement of his assets and liabilities at Carrington’s request in relation to the purchase of Discovery Beach property. He was unaware his statement of assets and liabilities was provided to Leasebank.
- [20]Exhibited to his affidavit were reports from a psychologist a Ms Parmenter, a general practitioner Dr Hopkins, and a psychiatrist, Dr Hutchinson. All were dated in October 2002. Their content was to the effect the appellant attended the psychologist for weekly therapy sessions between 22 October 1997 and 12 December 1997 and thereafter intermittently until mid 2000. In the initial consultations there was evidence of extreme depression with some suicidal ideation. He had claimed he had difficulty making decisions and was concerned his severe depression was affecting his professional and private life and was apprehensive decisions he was making may not have been appropriate. There was anecdotal evidence of irrational behaviour during the early stages of therapy. On the 27th of July 2000 Dr Hopkins saw the appellant. He referred him to Dr Hutchinson, psychiatrist. He was commenced on an antidepressant (Lovan). Dr Hutchinson had been treating the appellant for over two years when he wrote the report I have referred to. Dr Hutchinson referred to a history of depression commencing in 1996. He said the appellant had an obsessive compulsive personality disorder. In the first three years post 1996 the appellant’s judgment was suspect and because of his obsessive compulsive disorder he had some trouble making up his mind.
Whether it is shown the respondent was a party to the guarantees.
- [21]The undisputed evidence before the magistrate showed the leased property was purchased and leased by Leasebank as agent for the respondent. Additionally the Lease agreements incorporated the standard terms and conditions, clause 1.9 of which provided that “Leasebank may enter into this agreement as principal or agent …”
- [22]For present purposes it may be accepted that the respondent was an undisclosed principal. An undisclosed principal may sue on a contract entered into by the agent where the agent was acting within the scope of his actual authority. The undisclosed principal may be prevented from intervening where the contract the agent has entered into, expressly or by implication clearly conveyed that no other party was involved in the contract, or where personal considerations would make the undisclosed principal unacceptable to the third party. Neither is the case here. The appellant sought to rely upon the fact that the lease agreement and the guarantees name Leasebank as the lessor and do not refer to it as agent, that in the standard terms and conditions, there is reference to the leased goods being “our property” “we own them” that “us, we, the bank means Leasebank (Australia) Pty Ltd”. Clause 1.2 and 1.4 and 35. However these aspects of the standard terms and conditions in the context of other terms therein do not either expressly or by necessary implication convey that no other party was involved in the contract. Leasebank may contract as principal or agent. Nor could it on any objective view be considered that the respondent as the financier would be personally unacceptable to the appellant.
Was it shown the appellant had executed the guarantees.
- [23]The magistrate had before him the affidavit of one Peter Adams, the chief executive officer of Leasebank. A number of documents were exhibited to his affidavit. Those documents suggest that Gordon Trembath, a director of Hotel, Properties and Club had purportedly executed a number of documents. Where that person had signed the documents the signatures were consistent. The documents included:
an authorisation to Leasebank by guarantors to provide information to a credit reporting agency for the purposes of obtaining a credit report in the names of Carrington and the appellant, purportedly signed by Carrington and the appellant;
the first lease agreement, the second lease agreement and the third lease agreement. Execution of the first lease agreement under the common seal of Hotel purports to be by Carrington and the appellant. Execution of all lease agreements by the individual guarantors, purports to be by Carrington, the appellant and McNeil. Execution of the first and second lease agreement by Properties and Club as guarantors under the common seal of those companies purports to be signed by Carrington and the appellant. Execution of the second and third lease agreements under the common seal of Hotel purports to be by Carrington and McNeil. Execution of the third lease agreement as guarantor by Club under its common seal purports to be signed by Carrington and McNeil and as guarantor by Properties under its common seal by Carrington and the appellant;
guarantors acknowledgements bearing dates 12 October 1998 and 22 January 1999 and another undated purporting to be by Gordon Richard Trembath and purporting to be signed by the appellant and witnessed by Helen Janette Huston. The answers to questions in the one undated is in a different handwriting to the other two and is the same handwriting as the undated guarantors acknowledgment purportedly completed by Carrington and McNeil.
- [24]In his affidavit, Adams deposed that between in or about January 1998 and January 1999 inclusive he as duly authorised agent of the plaintiff dealt with the appellant from time to time about general enquiries by the appellant regarding the operation of the lease agreements and guarantees, documentation in support of the appellant’s guarantee pursuant to each of the lease agreements including declaration of the appellant’s personal nett worth and the obtaining of copies of rates notices by the appellant for the purposes of establishing property ownership.
- [25]Exhibit PA 13 to Mr Adam’s affidavit is said to be a copy of a facsimile from the appellant to Adams dated 6 April 1998. It is handwritten. It reads:
“To Leasebank, for Peter Adams from Gordon Trembath, Director Coolum Beach Club.
Peter, Neil Carrington has asked me to urgently fax you current rate notices for properties listed in my statement of assets. I will have to get them from our farm, we are currently living in Noosa at the Wesley Court property. I am faxing the current notices of valuation for three of those properties however, which I trust will suffice. Please note the farm … is valued as for primary production, and as such is not representative of its resale value. Likewise Wesley Court … is very undervalued for a waterfront property on Noosa Sound. Please ring me on 0754473420 if you have any queries at all.” It is signed “Regards, GRT”.
Exhibit PA 14 to Mr Adams affidavit is said to be a facsimile from Adams to the appellant dated 6 April 1998, asking the appellant to sign and date his personal assets and liabilities statement. Exhibit PA 16 is said to be a copy of the appellant’s list of assets and liabilities dated 6 April 1998. It is signed with what appears to be the appellant’s signature as it appears on all the other documentation I have referred to. There is also a personal statement of assets and liabilities dated 20 January 1999 purporting to be that of the appellant signed with what is said to be the appellant’s signature and with alterations initialled. There is written on it “see prior amended statement annexed” which is initialled. This appears to be a reference to that statement of assets and liabilities dated the 6th of April 1998 which has had two assets deleted by a line drawn through them and initialled. The initialling is similar to that on the personal statement of assets and liabilities dated 20 January 1999.
Unconscionable conduct, undue influence.
- [26]There was nothing in the evidentiary material to support a view that the respondent or Leasebank was aware that the appellant was at some disadvantage, or was subject to some undue influence in executing the guarantees, if it were in fact the case that the appellant’s psychological state of health at material times was such as to provide a factual basis to consider those matters. Nor is there any support in the evidentiary material that Carrington or McNeil were agents for the respondent or Leasebank when guarantees were signed by the appellant.
Conclusion
- [27]There is an almost overwhelming inference that the signatures purporting to be those of the appellant are indeed his signatures on the various documentation. The evidentiary support for the other submissions was lacking. The magistrate was entitled to conclude, that on all the material which was before him there appeared no real prospect of successfully defending the respondent’s claim.
- [28]There remains, however, the question whether the respondent has shown there is no need for a trial of the claim. The appellant submitted that in the light of the appellant’s claimed lack of recollection of executing the guarantees, the evidence of psychological instability of the appellant over the material period, the fact that most if not all of the documentation relating to the various transactions is in the hands of the respondent, the respondents failure to produce evidence from any person to directly prove execution of the relevant documentation by the appellant and the lack of any explanation why that was not done required that the matter go to trial rather than be disposed of on a summary judgment application.
- [29]Proving by direct evidence execution of the various documentation by the appellant, meeting the inferences about forgery and being taken advantage of which may flow from the appellants assertions in his defence and his affidavit should have been a simple matter. In the absence of any explanation for their absence, the inference is that persons would be available to swear to signatures on documents and to the appellant’s participation in the various activities which occurred. Why this was not done is not apparent.
- [30]In the final analysis and with some hesitation I have come to the view that the better view is that it was not shown that there was no need for a trial of this matter.
- [31]The appeal is allowed. The judgment and the magistrate’s orders are set aside.
- [32]Regarding the application by the appellant for an order for further and better disclosure, Order per paragraph 1 of the application.
- [33]Order the respondent pay the appellant’s costs of the appeal.
- [34]Order the costs of the respondent’s application for summary judgment and the appellant’s application for further and better disclosure filed 13 September 2004 be reserved to the magistrate.