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Westpac Banking Corporation v Upton (No.2)[2016] QDC 59

Westpac Banking Corporation v Upton (No.2)[2016] QDC 59

DISTRICT COURT OF QUEENSLAND

CITATION:

Westpac Banking Corporation v Upton (No.2) [2016] QDC 59

PARTIES:

WESTPAC BANK CORPORATION

ABN 33 007 457 141

(applicant)

v

JAMES SYDNEY UPTON

(respondent)

FILE NO/S:

1244/2015

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

24 March 2016

DELIVERED AT:

Brisbane

HEARING DATE:

11 March 2016

JUDGE:

Farr SC DCJ

ORDER:

  1. The Re-pleaded Counterclaim filed 23 February 2016 is struck out.
  2. The respondent is ordered to pay the application costs of and incidental to this application to be determined on the indemnity basis.

CATCHWORDS:

PRACTICE AND PROCEDURE – PROCEDURE UNDER THE UNIFORM CIVIL PROCEDURE RULES – application to strike out counterclaim on the basis of a fundamental defect – where counterclaims previously filed by the respondent were struck out – where the respondent brought a counterclaim against the applicant alleging losses caused by breaches of s 85 of the Property Law Act 1974 – where applicant seeks an order that the respondent not be granted leave to re-plead – where the respondent was self-represented.

Uniform Civil Procedure Rules 1999, r 149, r 155, r 166, r 165, r 171 Property Law Act 1974, s 85

Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109

Buckeridge v Mercantile Credits Limited (1981) 147 CLR 654

O'Day v Commercial Bank of Australia Ltd (1933) 50 CLR 200

Westpac Banking Corporation v Upton [2015] QDC 278

COUNSEL:

G D Sheahan for the applicant.

The respondent was self-represented.

SOLICITORS:

Henry Davis York solicitors for applicant.

Application

  1. [9]
    The applicant (plaintiff) applies to strike out the Re-pleaded Counterclaim filed on 23 February 2016 (“counterclaim”) by the respondent (defendant). This is the fourth version of a counterclaim filed by the respondent against the applicant. Each of the previous versions have been struck out by orders of McGill SC DCJ and Koppenol DCJ.

Background

  1. [10]
    The respondent is a guarantor of certain liabilities owed to the applicant by Cambridge Pacific Investments Pty Ltd as trustee of the Cambridge Pacific Investment trust (“CPI/The Trust”). Those facilities were and are secured by, amongst other things, a registered mortgage granted by the borrower over an industrial property which was owned by CPI/the trust but by change of trustee affected by the respondent is now owned by CPAC Residential Pty Ltd as trustee (“the property”).[1] 
  1. [11]
    Second and third defendants are sought to be added by counterclaim and are the receivers and managers appointed by the applicant to the property on 21 January 2014.[2]  As at today’s date the property remains unsold.[3]
  1. [12]
    The applicant obtained summary judgment for the sum of $617,440.17 as against the respondent by order of McGill SC DCJ on 10 November 2015. His Honour also struck out the respondents then counterclaim and gave leave to re-plead.[4]  The respondent filed a “Re-pleaded Counterclaim” on 8 December 2015.
  1. [13]
    On 19 January 2016 the respondent filed a further document entitled “Re-pleaded Counterclaim”.
  1. [14]
    Again on the applicant’s application, each of those Re-pleaded Counterclaims were ordered to be struck out by Koppenol DCJ on 21 January 2016.
  1. [15]
    On 23 February 2016 the defendant filed the Re-pleaded Counterclaim the subject of this application.

Striking out pleadings

  1. [16]
    Rule 171 of the Uniform Civil Procedure Rules 1999 (UCPR) states:

171 Striking Out Pleadings

  1. (1)
    This rule applies if a pleading or part of a pleading—
  1. (a)
    discloses no reasonable cause of action or defence; or
  1. (b)
    has a tendency to prejudice or delay the fair trial of the proceeding; or
  1. (c)
    is unnecessary or scandalous; or
  1. (d)
    is frivolous or vexatious; or
  1. (e)
    is otherwise an abuse of the process of the court.
  1. (2)
    The court, at any stage of the proceeding, may strike out all or part of the pleading and order the costs of the application to be paid by a party calculated on the indemnity basis.
  1. (3)
    On the hearing of an application under subrule (2), the court is not limited to receiving evidence about the pleading.

Alleged fundamental defect

  1. [17]
    The respondent’s principle claim for relief is that the applicant and/or the receivers appointed by it breached their respective statutory duties owed pursuant to s 85(1) of the Property Law Act 1974 (Qld) (“PLA”), which imposes a duty on the bank and receivers appointed by it “to take reasonable care to ensure that the property is sold at the market value”.[5] 
  1. [18]
    In ordering summary judgment in favour of the applicant against the respondent for the sum of $617,440.17 McGill SC DCJ found that a Deed of Forbearance entered into between the applicant and the respondent gave rise to a liability of the respondent to pay to the applicant the said judgment sum, and that that obligation arose prior to the appointment of receivers.[6] 
  1. [19]
    The applicant has submitted that the fundamental difficulty with the counterclaim as presently pleaded is in respect of the allegations that the conduct of the applicant and the receivers in purporting to exercise the power of sale and in the latter’s management of the assets of the receivership, gave rise to the indebtedness the subject of the judgment debt.[7]
  1. [20]
    The applicant submits however that as McGill SC DCJ found, the liability for the judgment debt arose prior to the appointment of the receivers. It is submitted therefore that the essential claim for relief is untenable and on that basis alone, the Re-pleaded Counterclaim cannot possibly succeed.
  1. [21]
    The applicant has submitted that an independent obligation on the part of the respondent to pay the moneys owing to the applicant arose upon expiry of the forbearance period in the deed, namely 31 December 2013 which pre-dated the appointment of the receivers. This accords with the conclusions of McGill SC DCJ at paragraphs [14] and [25]-[27].
  1. [22]
    The applicant submits therefore that the conduct of the receivers after their appointment could not have given rise to the judgement debt, yet that is the claim made in the Re-pleaded Counterclaim.[8]

Respondent’s submission regarding the alleged fundamental defect

  1. [23]
    The respondent has submitted that the application to strike out the Re-pleaded Counterclaim due to the alleged fundamental defect should fail. He submits that paragraph 6 of the pleadings identifies that both the applicant and the receivers (who the applicant seeks to join as third and fourth defendants by counterclaim) have a duty of care pursuant to s 85(1) of the PLA and that that duty has been particularised in paragraphs 8 and 9 of the Re-pleaded Counterclaim. He also submits that he has, with adequate particularity, outlined the “systematic” breaches of that duty in paragraphs 10 and 12-57 of the Re-pleaded Counterclaim. He also submits that he has identified in paragraph 11 of the Re-pleaded Counterclaim how he had been “damnified” by the actions of the third and fourth defendants by counterclaim.[9]
  1. [24]
    When specifically asked what is his response to the applicants assertion that McGill SC DCJ concluded that the obligation to pay the amount the subject of the summary judgment arose upon the expiry of the forbearance period, namely 31 December 2013, which predated the appointment of the receivers, the respondent, in essence, repeated the matters raised in his written outline of submissions,[10] which in turn, mostly referred to paragraphs in the Re-pleaded Counterclaim.

Consideration of the issue

  1. [25]
    The is no dispute that the receivers were appointed after the date by which the Deed of Forbearance terminated and the full amount of the outstanding debt became due and payable according to the terms of the deed. The debt became due and payable on 31 December 2013 although the applicant suggested that it may have been due at some earlier time. There is also no dispute that the applicant as guarantor, became liable for the debt on the day it became due and payable. In accordance with the findings of McGill SC DCJ I will proceed on the basis of the relevant date being 31 December 2013. As his Honour said at paragraphs 25 – 27:

“[25]…, the defendant executed the deed of forbearance dated 10 September 2013 which expressly provided that the outstanding debt, defined to include all moneys owning by CPI, would be paid by the last day of the forbearance period, or if not paid would become immediately due and payable by the guarantors without the need for any demand or notice to be given to any of them upon the termination or expiry of the forbearance period. That period expired prior to the making of the demand, and the effect of the provision was to make all moneys owning by CPI immediately due and payable by the defendant upon the expiry of the forbearance period. Accordingly, even if that money did not become payable under clause E10, it became payable upon the expiry of that period pursuant to the deed.

…

[26]…. Hence under the deed there was an independent or new obligation to pay the full amount of the moneys outstanding under the facility to the plaintiff by no later than 5:00pm on 31 December 2013.

[27]The defendant did not comply with that obligation, and accordingly under clause 5.1 of the deed it was expressly provided that in those circumstances the outstanding debt was immediately due and payable by each obligor, which included the defendant, without the need for any demand or notice to be given to the obligor or any other person, other than a notice expressly required by a finance document, and the plaintiff could immediately commence enforcement action for the recovery of the outstanding debt without further notice. In these circumstances the deed goes much further then the interpretation sought to be put on it by the defendant, and contains an independent obligation to pay, during the forbearance period, the full amount of the outstanding debt, which obligation can, immediately after the expiry of the forbearance period (which has occurred), be enforced against the defendant.”

  1. [26]
    As his Honour concluded, the money was lent, and was not repaid and therefore prima facie, the respondent became liable under his guarantee and indemnity in respect of the loan.
  1. [27]
    The basis of the counterclaim is that the receivers and/or the applicant had a duty to take reasonable care to ensure that the property was sold and to take reasonable care to ensure that the sale price of the property was at market value, and that they collectively or individually failed in those duties. The duties are said to arise from the provisions of s 85(1) PLA.
  1. [28]
    Section 85(1) of the PLA states:

“85 Duty of mortgagee or receiver as to sale price

  1. (1)
    It is the duty of a mortgagee, including as attorney for the mortgagor, or a receiver acting under a power delegated to the receiver by a mortgagee, in the exercise of a power of sale conferred by the instrument of mortgage or by this or any other Act, to take reasonable care to ensure that the property is sold at the market value.”
  1. [29]
    An immediate difficulty for the respondent is that s 85(1) of the PLA does not create the first of the alleged duties. Section 85(1) creates a duty on a receiver or mortgagee to “take reasonable care to ensure that the property is sold at the market value”. It does not create a duty that reasonable care must be taken to ensure the property is sold. I need take that matter no further.
  1. [30]
    A second difficulty for the respondent is that this property has not yet sold.[11]  As McGill SC DCJ said at [58], the mere fact that the property has not been sold does not demonstrate that the statutory duty has been breached (of course, that statement assumes that the failure to sell could amount to a breach of duty). McGill SC DCJ then very helpfully laid out at paragraph [59] the approach that the respondent must adopt in a compliant counterclaim:

“It is necessary first to plead properly the existence of facts giving rise to the duty under s 85(1), and then the terms of the actual duty imposed by the statute, and then it is necessary to allege with particularity what it is that is relied on constituting the breach of that duty by the plaintiff, and how it is said that the defendant has suffered loss by that breach of duty, as to give rise to the remedy in s 85(3).”

  1. [31]
    As I have already indicated, the Re-pleaded Counterclaim alleges that the respondents indebtedness arising from the judgment debt is the loss that he has suffered as a consequence of the conduct of the plaintiff and/or the receivers when purporting to exercise the power of sale and the management of the asset.
  1. [32]
    Yet, as the judgement debt arose prior to the appointment of the receivers, the alleged “loss” is a fallacy and the failure to plead how the applicant suffered loss as a consequence of a breach of duty is fatal to the entire Re-pleaded Counterclaim . In other words, the respondent had failed to plead how he has suffered loss by the breach of duty alleged (assuming such a duty exists). In such circumstances it is inevitable that this court order that the Re-pleaded Counterclaim be struck out.

Individual defects in Re-pleaded Counterclaim

  1. [33]
    Notwithstanding my view that the Re-pleaded Counterclaim should be struck out for the reasons stated above, I will also deal with the objections to individual paragraphs in that document as raised by the applicant.

Paragraph 6(a)

  1. [34]
    Paragraph 6(a) of the Re-pleaded Counterclaim alleges that “the receivers and/or the plaintiff” owed a duty to take reasonable care to ensure the property is sold.
  1. [35]
    There is no obligation contained in s 85 of the PLA that the receivers or the applicant take reasonable care to sell the property. It is an allegation which cannot be sustained.

Paragraph 8

  1. [36]
    In paragraph 8 of the Re-pleaded Counterclaim, the respondent pleads that in order to comply with their statutory duty, the receivers should have sold the property within 12 months from the date of their appointment. The applicant had submitted that this is an unstainable proposition and I agree.
  1. [37]
    The bank has no duty to enforce any particular security,[12] and the terms of the 2008 guarantee granted by the respondent make clear that the bank is not required to enforce securities in any order or at all and has no obligation to sell the property bought before pursuing the respondent under his guarantee.[13]  I have no reason to doubt the validity of those clauses.[14]   
  1. [38]
    There is no duty upon a receiver to sell a property within a particular period. There is no logical connection between a duty to take reasonable care to sell a property at market value and the completion of a sale within any particular period.
  1. [39]
    Furthermore, none of the facts pleaded at subparagraphs 8(a) to 8(g) of the Re-pleaded Counterclaim, even if all of them were proven, are capable of supporting the inference pleaded at paragraph 8, that a sale no later than 12 months from the appointment date is a prerequisite to compliance with the statutory duty.
  1. [40]
    The applicant submits that paragraph 8 therefore discloses no reasonable cause of action and should be struck out. I agree.

Paragraph 9

  1. [41]
    Paragraph 9 speculates as to the price for which the property would have been sold had it been sold within 12 months of the receivers appointment. The only facts pleaded in support of that inference are those pleaded at paragraph 57 namely the existence of valuations and appraisals which are said to disclose an opinion as to market value in the period between 2007 and 2014.
  1. [42]
    The existence of such valuations and appraisals is, of itself, incapable of supporting an inference that a sale of the property within 12 months of the receivers appointment would have achieved a price in excess of $750,000.

Paragraph 10

  1. [43]
    The applicant objects to paragraph 10 firstly by reason of the use of the “and/or” conjunction. There may be merit in that submission but putting that to one side for the moment I turn to the other submission regarding this paragraph.
  1. [44]
    It is a paragraph which consists of a lengthy series of assertions said to be the components of a breach of duty by the applicant “and/or” the receivers. The applicant has submitted that these assertions are exceedingly vague and do not properly inform the applicant of the substance of the allegations.
  1. [45]
    I do not intend in this decision to go through each of the individual subparagraphs of paragraph 10 but, by way of example I will refer to just a few.
  1. [46]
    Paragraph 10(a) asserts that the receivers and/or the applicant breached their duty by failing to sell the mortgaged property. Paragraph 10(b) asserts that the breach occurred by reason of the failure to obtain the market value for the mortgaged property and paragraph 10(c) asserts that the breach occurred by virtue of the failure to sell the mortgaged property within a reasonable time. Paragraph 10(g) alleges that a breach of duty was occasioned as a consequence of the receivers and or the applicant refusing to allow the respondent to continue his marketing campaign. Paragraph 10(o) alleges that the breach occurred by virtue of the receivers and/or the applicant failing to collect rent, and in paragraph 10(p) the breach is said to be occasioned by virtue of the eviction of a tenant. Paragraph 10(t) alleges that the applicants or receivers breached the alleged duty by failing to make a claim on the existing insurance policy with respect to theft and vandalism.
  1. [47]
    As I have already indicated, the property has not yet sold so it is unclear as to how there can be a claim for any loss arising as a result of the property not being sold at market value or because of the failure to, for instance, advertise appropriately.[15]
  1. [48]
    Furthermore and significantly, any loss on the sale of the property would be a loss to the owner of the property, being formerly CPI/The Trust, and now CPAC Residential Pty Ltd. The respondent is not the owner of the property. He has no standing for such a claim even if he is a potential beneficiary of the discretionary trust.[16]
  1. [49]
    It seems to me that the problem that I have identified with paragraph 6(a) of the Re-pleaded Counterclaim also applies to paragraphs 10(a) to 10(ff) as they are all dependent on a duty existing pursuant to that which is asserted in paragraph 6(a).
  1. [50]
    Furthermore:
  1. (a)
    As to subparagraph 10(b):
  1. (i)
    the defects identified in relation to paragraphs 8 and 9 also have application to this paragraph;
  1. (ii)
    the matters identified in paragraph 17 are irrelevant to the alleged failure to obtain market value;
  1. (iii)
    paragraph 57 is of no assistance to the respondent. It pleads a value of the property “at all material times”. The material times in this pleading must be that period of time during which the respondent seeks to impugn the conduct of the receivers and/or the applicant and therefore must relate to the period of the receivers’ appointment. In the context of an allegation that the receivers ought to have sold the property within 12 months of their appointment on 23 January 2014, the material time is presumably that 12 month period. While it may be accepted that valuations, appraisals and offers made in the vicinity of the 12 month period may be relevant, the earliest of the appraisals, offers or valuations referred to in subparagraphs 57(a) to 57(e) occurred greater than two years prior to the commencement of the 12 month period. The applicant has submitted that they therefore can’t be relevant and that those allegations and the allegations that refer to them ought be struck out. The respondent has offered no sensible response to that submission.
  1. (iv)
    the alleged market value of the property is not in fact pleaded anywhere in the Re-pleaded Counterclaim ; and
  1. (v)
    as the property has not sold, it is impossible to understand, as a matter of logic, how the receivers have failed to obtain market value for the property.
  1. (b)
    As to subparagraph 10(c):
  1. (i)
    This paragraph is affected by the defects already identified in relation to paragraphs 8 and 17;
  1. (ii)
    The allegation that the applicants and/or the receivers failed to sell the mortgaged property within a “reasonable time” is meaningless given that there is an absence of any plea as to what constitutes a “reasonable time”. As such, the applicant is deprived of procedural fairness in that it does not know the case that it would be required to meet.
  1. (iii)
    This paragraph’s reliance on paragraph 61 of the Re-pleaded Counterclaim is nonsensical as there is no paragraph 61.
  1. (c)
    As to subparagraph 10(d):
  1. (i)
    Although the respondent alleges that the applicant and/or the receivers failed to investigate the pre-existing offers to purchase, he has failed to identify the pre-existing offers to purchase which allegedly existed at the time thus depriving the applicant of procedural fairness in that it does not know the case it is to meet.
  1. (ii)
    This subparagraph is also afflicted by the defects identified in relation to paragraph 8;
  1. (iii)
    The applicant submits that this paragraph’s reliance on paragraphs 19, 21-25, 31-38, 45, 46 and 48 is unhelpful to the issue as those paragraphs, save for paragraphs 35, 38 and 41, allege certain communications between the respondent, the agent, the applicant and the receivers. The applicant has submitted that it is not apparent how any of those communications are relevant to the cause of action alleged. Upon reading those paragraphs I find myself in the same state of confusion.

Additionally, the allegations in paragraphs 35, 38 and 41 are not relevant to the cause of action alleged.

  1. (d)
    As to subparagraph 10(e):
  1. (i)
    it is afflicted by the defects identified in relation to paragraphs 8, 19, 21-25, 31-38, 45, 46 and 48;
  1. (ii)
    the absence of any identification of the ‘pre-existing qualified leads’ allegedly not investigated by the receivers deprives the applicant of procedural fairness in that it would not be able to know the case it has to meet.
  1. (e)
    As to subparagraph 10(f):
  1. (i)
    this paragraph fails to identify the “parties identified as interested in purchasing the property” allegedly not investigated by the receivers. That omission deprives the applicant of procedural fairness in that it would not know the case it is to meet; and
  1. (ii)
    this subparagraph is also afflicted by the defects identified in relation to paragraphs 8, 19, 21-25, 32-38, 45, 46 and 48.
  1. (f)
    As to subparagraphs 10(g) and 10(h):
  1. (i)
    the duties as defined in paragraph 6 do not refer to, nor impliedly include, a duty to allow the defendant to continue or finalise his marketing campaign; and
  1. (ii)
    these paragraphs are afflicted by the defects identified in relation to paragraph 17.
  1. (g)
    As to subparagraph 10(i), it is reliant on paragraph 54. Paragraph 54 is irrelevant to the alleged duty. Paragraph 54 is also incomplete and incomprehensible.
  1. (h)
    As to subparagraph 10(o), the collection of rent is irrelevant to the duties pleaded.
  1. (i)
    As to subparagraph 10(p), the eviction of the tenant is irrelevant to the duties pleaded in circumstances where it is not pleaded that the property would be more saleable if tenanted by the tenant pursuant to an unwritten lease with uncertain terms.
  1. (j)
    As to subparagraphs 10(q) and 10(r) they are reliant upon the appropriateness of paragraph 50. Paragraphs 49, 50 and 51 (save for subparagraph 50(d)) are alleged to relate to the exercise of the receiver’s duty under s 85 of the PLA. How they do so is not apparent on the face of the paragraph. As to subparagraph 50(d) the applicant submits that the allegation that the property has not been adequately maintained is unparticularised to such an extent that the applicant is deprived of procedural fairness as it does not know the case it has to meet. I agree with that submission. An allegation of that nature would obviously require specificity and the absence of such particulars makes it an impossible allegation to respond to.
  1. (k)
    As to subparagraph 10(s), the reporting of matters to the police is irrelevant to the duties pleaded.
  1. (l)
    As to subparagraph 10(t):
  1. (i)
    the alleged failure to make a claim in respect of chattels located on the property is irrelevant to the duties pleaded; and
  1. (ii)
    it is afflicted by the defects identified in relation to paragraph 50.

As to subparagraph 10(u), it is afflicted by the defects identified in relation to paragraphs 17, 18 and 49 to 51. The reliance in this paragraph on the contents of paragraph 52 may be of some relevance but due to its vagueness is of no assistance. The allegation that the Development Approval would have added “significant value” might well be true but is nevertheless vague and imprecise to such an extent that it does not permit the applicant to properly plead to it.

  1. (m)
    As to subparagraphs 10(v) and 10(w), which allege a breach of duty by reason of alleged failures in relation to the person engaged to “manage the property”, they rely on facts pleaded in paragraphs 17 to 52. Many of those paragraphs are defective for reasons already articulated. Additionally, many of the allegations contained within those paragraphs have no relevance to the management of the property. For example see paragraph 44. The ultimate effect is that subparagraphs 10(v) and 10(w) are confusing, imprecise and vague to such an extent as to render them worthless.
  1. (n)
    As to subparagraph 10(x):
  1. (i)
    its reliance on paragraphs 17, 18, 45 and 57 is confusing as those paragraphs appear to have no obvious connection with the allegation contained in subparagraph 10(x).
  1. (o)
    As to subparagraph 10(y), its reliance upon paragraph 46 is confusing as it would appear to have no relevance to the issue.
  1. (p)
    As to subparagraph 10(z), it is reliant upon paragraphs 25, 26, 27, 39 and 42-47. Those paragraphs detail correspondence that has taken place between the respondent and the applicant. Its relevance to the alleged duty owed is mysterious.
  1. (q)
    As to subparagraphs 10(aa) and 10(bb):
  1. (i)
    a refusal to discuss the marketing campaign with the respondent or the registered proprietor is unrelated to the duties pleaded; and
  1. (ii)
    these subparagraphs are also afflicted by the defects that have been identified in relation to paragraphs 13, 14, 45 and 47.
  1. (r)
    As to subparagraph 10(cc), it is afflicted by the defects identified in relation to paragraphs 17, 19 and 20.
  1. (s)
    As to subparagraph 10(dd):
  1. (i)
    a “reasonable time” has not been defined in paragraph 6 or elsewhere;
  1. (ii)
    the absence of any plea as to what constitutes a “reasonable time” deprives the applicant of procedural fairness in that it cannot possibly know the case that it is required to meet; and
  1. (iii)
    is afflicted by the defects identified in relation to paragraphs 17, 38 and 41.
  1. (t)
    As to subparagraph 10(ee), it is afflicted by the defects identified in relation to paragraph 52 and
  1. (u)
    As to subparagraph 10(ff):
  1. (i)
    it is afflicted by the defects identified in relation to paragraphs 18, 20 to 24, 36, 37 and 46; and
  1. (ii)
    the matters pleaded in that subparagraph are unconnected with the relevant duty.

Paragraph 11

  1. [51]
    There is no causal connection between the alleged breaches and the judgment debt for the reasons I have already explained. The respondent became liable to pay the amount the subject of the judgment debt on and from 31 December 2013 prior to the appointment of the receivers. That liability cannot therefore have arisen by reason of the receivers’ alleged breaches.
  1. [52]
    Similarly there is no causal connection between the alleged breaches and the loss claimed in subparagraphs 11(b), 11(c) or 11(d).

Paragraphs 12 to 16

  1. [53]
    The fact of the communications and matters relating to the litigation pleaded in paragraphs 12 to 16 are irrelevant.

Paragraph 56

  1. [54]
    Paragraph 56 purports to plead the findings of an expert report. The form of pleading is in breach of r 149(1)(c) of the UCPR which provides that a pleading must not contain the evidence by which facts alleged are to be proved.

Relief

  1. [55]
    In addition to the relief sought in the form of the amount of the judgment debt obtained by the applicant against the respondent, the respondent also claims damages to be assessed.[17]
  1. [56]
    Rule 155(4) of the UCPR states:

“In addition, a party claiming damages must specifically plead any matter relating to the assessment of damages that, if not pleaded, may take an opposing party by surprise.”

  1. [57]
    The applicant has submitted that the unparticularised claims for damages to be assessed do not comply with that obligation. That is quite obviously correct.

Disposition

  1. [58]
    For the reasons outlined above I am satisfied that the applicant is prejudiced by the pleading in its current form and that the Re-pleaded Counterclaim filed 23 February 2016 should be struck out under r 171 of the UCPR.
  1. [59]
    The applicant has also submitted that as the respondent has had at least four opportunities to properly plead a counterclaim in reliance on a breach of statutory duty under s 85(1) of the PLA the court should not give leave to the respondent to re-plead.
  1. [60]
    I accept that the respondent has had ample opportunity to plead a viable case against the applicant via counterclaim. I also accept that there must be some limit to the extent to which a party must be subjected to repeated unsustainable claims via defective pleadings. I note though that the respondent is self-represented and that the undertaking that he is attempting is by no means without its complications. I’m not satisfied that the proceedings have yet reached the stage where leave to refile should not be granted, although in my view any future opportunity should be restricted to one attempt only. Whilst that view of course does not carry weight of authority it will nevertheless be relevant for any future application by the respondent seeking leave to re-plead. Having said that, I note that no application has in fact been made seeking the court’s leave to re-plead and consequently I will make no order in that regard.

Other issues

  1. [61]
    The respondent has submitted that as the applicant has failed to answer the Re-pleaded Counterclaim which was filed on 23 February 2016 that, pursuant to r 166 of the UCPR, all allegations in his counterclaim are taken to be admitted as there are no pleadings before the court or served on the respondent denying or stating that the allegations are not admitted in the pleadings.
  1. [62]
    The applicant has submitted that on a worst case scenario, all that has occurred is that the applicant’s failure to respond would be deemed a non-admission pursuant to r 165(2) of the UCPR.
  1. [63]
    The reality however is that as a consequence of my conclusion as to the validity of the Re-pleaded Counterclaim the issue is moot and requires no resolution.

Costs

  1. [64]
    The respondent was expressly informed by letter written by the applicant’s solicitors on 1 March 2016 of the deficiencies in the latest version of the Re-pleaded Counterclaim.
  1. [65]
    Despite being informed expressly of those concerns, the respondent has maintained the pleading in its defective form.
  1. [66]
    Rule 171 of the UCPR expressly provides for the court in striking out all or part of a pleading to order that the costs of the application be paid by a party calculated on the indemnity basis. I note that such an order was made by Koppenol DCJ on 21 January 2016 and by McGill SC, DCJ on 10 November 2015. In the circumstances it is appropriate that such an order be made again.
  1. [67]
    Orders
  1. 1.
    The Re-pleaded Counterclaim filed 23 February 2016 is struck out.
  1. 2.
    The respondent is ordered to pay the applicant’s costs of and incidental to this application to be determined on the indemnity basis.

Footnotes

[1]  See reasons for judgment of McGill SC DCJ in Westpac Banking Corporation v Upton [2015] QDC 278 at para [11].

[2]  See reasons for judgment of McGill SC DCJ in Westpac Banking Corporation v Upton [2015] QDC 278 at para [14].

[3]  Affidavit of Benjamin Stuart Shaw filed 11.03.16.

[4]  See Westpac Banking Corporation v Upton [2015] QDC 278.

[5]  Re-pleaded Counterclaim paras 6-11.

[6]  Reasons for judgment of McGill SC DCJ (supra) at [14] and [25]-[27].

[7]  See para 11 of the Re-pleaded Counterclaim.

[8]  See para 11(a)(ii) of the Re-pleaded Counterclaim.

[9]  See paragraph 1(a) to 1(f) of Respondent’s Outline of Submissions filed by leave on 11.03.16.

[10]  Transcript of proceedings at p 1-16 line 21, p 1- 17 line 8.

[11]  Affidavit of Benjamin Stuart Shaw filed 11.03.16 at [4]. 

[12]  See for example O'Day v Commercial Bank of Australia Ltd (1933) 50 CLR 200 at 224.

[13]  See clause E11 of the MOCP: affidavit of Stuart Anthony Meager filed 14.07.15, exhibit SAM-5 p 59.

[14]  See for example Buckeridge v Mercantile Credits Limited (1981) 147 CLR 654 at 675 – 676.

[15]  See paragraphs 10(j); 10(k); 10(l); 10(m); 10(n); 10(x); 10(y); 10(z); 10(aa).

[16]Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109 at [55] approving Scott on Trusts, 4th Ed (1989), Vol 4 at 282 “the interests of the beneficiaries of a trust are protected against a third person acting adversely to the trustee through proceedings brought against him by the trustee and not by the beneficiaries. As long as the trustee is ready and willing to take the proper proceedings against the third person, the beneficiaries cannot maintain a suite against him.”

[17]  See the prayer for relief paragraphs 5 and 6.

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Editorial Notes

  • Published Case Name:

    Westpac Banking Corporation v Upton (No.2)

  • Shortened Case Name:

    Westpac Banking Corporation v Upton (No.2)

  • MNC:

    [2016] QDC 59

  • Court:

    QDC

  • Judge(s):

    Farr SC DCJ

  • Date:

    24 Mar 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109
2 citations
Jump To
Cite 1 - (2004) 216 CLR 109
Cite 2 - (2004) 216 CLR 109
Buckeridge v Mercantile Credits Ltd (1981) 147 CLR 654
2 citations
Jump To
Cite 1 - (1981) 147 CLR 654
Cite 2 - (1981) 147 CLR 654
O'Day v Commercial Bank of Australia (1933) 50 CLR 200
2 citations
Jump To
Cite 1 - (1933) 50 CLR 200
Cite 2 - (1933) 50 CLR 200
Westpac Banking Corporation v Upton [2015] QDC 278
4 citations
Jump To
Cite 1 - [2015] QDC 278
Cite 2 - [2015] QDC 278
Cite 3 - [2015] QDC 278
Cite 4 - [2015] QDC 278

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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