Commonwealth Bank of Australia v Ross
[2014] QSC 149
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- Unreported Judgment
- Commonwealth Bank of Australia v Ross[2014] QSC 149
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Commonwealth Bank of Australia v Ross[2014] QSC 149
Commonwealth Bank of Australia v Ross[2014] QSC 149
SUPREME COURT OF QUEENSLAND
CITATION: | The Commonwealth Bank of Australia trading as Bankwest v Ross & Ors [2014] QSC 149 |
PARTIES: | COMMONWEALTH BANK OF AUSTRALIA TRADING AS BANKWEST ABN 48 123 123 124 |
FILE NO: | 1076 of 2012 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 3 July 2014 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 26 June 2014 |
JUDGE: | Ann Lyons J |
ORDER: | The application is refused |
CATCHWORDS: | JURY – GENERAL - JURY IN CIVIL TRIALS – where the first defendant/plaintiff by counterclaim has elected for a trial by jury – where the plaintiff/defendant by counterclaim seeks an order that the trial proceed without a jury Jury Act 1995 (Qld); s 65A Uniform Civil Procedure Rules 1999 (Qld); r 367 Coronis v Jilt Pty Ltd [2012] QCA 66; [2013] 1 Qd R 104 (considered) Mizikovsky v Queensland Television Ltd & Ors [2011] QSC 205 (cited) |
COUNSEL: | G Sheahan for the applicant M M Stewart QC and D Keane for the respondent |
SOLICITORS: | Henry Davis York Lawyers for the applicant Collas Moro Ross for the respondent |
- The plaintiff, the Commonwealth Bank of Australia (“the CBA”) is seeking to recover from the first defendant, William Joseph Ross (“Ross”), a residual debt owing under a guarantee after it realised secured assets which included the real property and business associated with the Mermaid Beach Tavern. Ross disputes that claim and counterclaims against the CBA. The issue for determination in this application is whether the civil trial should proceed with a jury. Ross, who is the plaintiff by counterclaim has elected for a trial by jury however the CBA (the applicant) now seeks an order that the trial proceed without a jury. Ross (the respondent) resists that order.
The proceedings
- The claim and statement of claim were filed on 7 February 2012. The CBA claims money due and owing under a guarantee given by Ross dated 22 November 2005 with respect to funds advanced to Glenreel Pty Ltd, the owner of the Mermaid Beach Tavern. By his defence and counterclaim filed on 23 May 2012, Ross seeks orders that the guarantee and indemnity executed by him in favour of the CBA be declared void. At the time the defence and counterclaim were filed Ross elected for trial by jury and this election was confirmed when the request for trial date was signed. By a further defence and counterclaim filed on 20 January 2014, Ross joined Grant Dene Sparks, David John Lee and PPB Advisory Pty Ltd, the second defendants by counterclaim who are the receivers appointed on 7 December 2011. The Tavern was sold by the receivers on 27 November 2012.
- Pursuant to an application filed on 5 June 2014 the CBA seeks an order, pursuant to s 65A of the Jury Act 1995 (Qld) or within the inherent jurisdiction of the Court and r 367 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) that the trial of these proceedings be conducted without a jury. Essentially, the CBA submits that the issues raised in the proceedings cannot be conveniently considered and resolved by a jury. Ross resists that application.
Submissions by the CBA as to why trial by jury is not appropriate
- The CBA argues that there are three principle grounds why the trial should not be conducted by jury. First it is argued that the factual issues to be determined are numerous and involve complex commercial and quasi legal inquiries which cannot be conveniently considered and resolved by a jury. The CBA argues that there is no current indication that there will be a reduction in the factual issues to be determined by the jury or that any questions have as yet been framed for the jury. Accordingly it is argued that as things currently stand all factual issues which arise on the pleadings would need to be determined by the jury.
- In particular the CBA points out that Ross has alleged:
- the CBA breached its statutory duty under s 85 of the Property Law Act 1974 (Qld) (“PLA”) and is entitled to set off his claim for damages from the CBA’s claim for debt owing under the first defendant’s guarantee;
- the CBA is estopped from asserting that Glenreel, the owner of the Tavern, and the first defendant are responsible to CBA for any residual debt after sale of the secured assets;
- the CBA engaged in unconscionable conduct within the meaning of s 12CA of the Australian Securities and Investment Commission Act 2001 (Cth) (“ASIC Act”); and
- the receivers breached their duty of care pursuant to s 420 of the Corporations Act 2001 (Cth) and the receivers were in fact the agents of the CBA.
- Counsel for the CBA argues that those pleaded allegations raise complex issues of fact and involve mixed questions of fact and law. In particular, it is argued that the allegations of breaches of statutory duty and unconscionable conduct each require an ascertainment of the elements of those legal concepts. Counsel for the CBA also argues that there is no indication at this point in time how the many separate factual inquiries will need to be measured against the established elements comprising unconscionable conduct; namely situational disability, the knowledge of such disability, and the taking of unconscientious advantage of that disability by the CBA and causing loss to Ross. Counsel argues that there are real issues as to how matters are to be dealt with by a jury.
- Second, the CBA argues that the duration of the trial is likely to be lengthened, and at substantial expense, if the issues are to be determined by a jury. In this regard I note the CBA’s estimate is for a six day trial, whereas Ross anticipates three days would be required.
- Third, the CBA argues that there is no substantial public interest in the nature of the allegations made in these proceedings.
Are there complex issues of fact?
- The CBA’s submissions contain an analysis of the pleadings and have referred in detail to the complexity of the factual issues in this case. Having considered that material and Ross’ responses to the CBA’s submission it is clear that a number of factual issues said to be in issue are, in fact, admitted. In particular, the making of the Loan Facility and Bank Guarantee on 15 December 2010, the entry into successive loan agreements, the appointment of receivers and the sale of the Tavern are admitted.
- Furthermore the construction of the guarantee and supporting documents is a matter of law and those legal issues will not fall to the jury for determination but rather to the trial judge who will outline the legal basis for the factual issues the jury will need to determine. All the issues in relation to the variations of the agreements will be questions of law for the judge to determine. The trial judge will give the jury directions in relation to the construction of the documents. Similarly the jury will be given directions from the trial judge in relation to the legal concepts which arise in relation to the Corporations Act, the ASIC Act, what constitutes unconscionable conduct, the doctrine of estoppel, s 85 of the PLA, the requirements of the Banking Code of Practice and what constitutes a “special disadvantage”. The jury will be required to make factual findings on the basis of the law as explained to them by the judge. Juries in criminal trials undertake such a process of decision making every time they are empanelled.
- I agree with the submission of counsel for Ross that the real factual issues are not as numerous as the issues highlighted by counsel for the CBA. In my view the crucial issues for determination by the jury will essentially be:
- the circumstances of the meeting on 18 November 2011, the matters discussed at that meeting particularly whether an indulgence was granted and whether the bank orally agreed to give Glenreel time to allow an orderly sale.
- the circumstances of the meeting of 23 November 2011 and whether any representations were made by the bank. If so were the representation relied on by Glenreel;
- the circumstances surrounding the appointment of the receivers on 7 December 2011;
- the conduct of the bank in relation to the sale of the Tavern and the business of the Tavern;
- the conduct of the receivers and the question of market value of the real property at the time of the sale and whether the receivers obtained a true market value; and
- whether the circumstances were such that the first defendant was in a position of special disadvantage.
- Counsel for the CBA argues that Ross has not framed any specific questions that will be put to the jury. However, I note the requirements of the Practice Direction 1 of 2002 which relates to Civil Jury Trials, the relevant provisions of which are in the following terms:
“2. The following alternative approach is now to be adopted:
(a) Counsel for the plaintiff, in opening, will read aloud a statement, agreed between the parties, setting out:
(i) the essential facts necessary to establish the plaintiff’s claim,
(ii) the essential facts necessary to establish any defence relied on by the defendant,
(iii) details of all admitted facts, and
(iv) the issues in question for resolution by the jury.
(b) The statement should not contain the ultimate questions for the jury to answer: their formulation should be left until after the conclusion of the evidence.
(c) The agreed statement must be submitted to the Trial Judge at least three working days prior to the commencement of the trial. If no agreement has been reached, then each party should submit a draft of the statement, to the Trial Judge, three working days prior to trial commencement, so that the Trial Judge will have the opportunity to resolve the areas of disagreement in advance of the trial.”
- Clearly then the ultimate questions for the jury will be formulated with the trial judge after the conclusion of the evidence.
Will the trial be unduly prolonged?
- The current estimates seem to be a trial of either three days without a jury or six days with a jury. It would seem to me that the trial would still accurately be classified as a short trial even if it lasts for six days. I am not satisfied however that the trial would actually last six days, given the actual issues in contention and the indication by Ross that he will only be calling two or three witnesses. Neither do I consider any significant length of time will be consumed in the task of empanelling a jury.
- I also consider that given the contents of the Practice Direction once a trial judge is assigned many of the issues will be clarified and the actual issues in contention will reduce. There is no doubt that before the trial commences counsel for the parties will confer to prepare an agreed statement outlining the essential facts that need to be determined, the admitted facts and the issues in question which need to be resolved by the jury. Accordingly it would seem to me that the estimate of the duration of the trial would not in fact expand to six days as the CBA submits.
- I am not satisfied therefore that the trial would be unduly prolonged if a jury is involved. I also note the comments by Chesterman JA in Coronis v Jilt Pty Ltd[1] where reference was made to earlier decisions of Kelly v Kelly[2] and Smit v Chan [3] that a jury trial will necessarily be longer and more expensive than a trial by judge alone but that factor does not by itself mean that a jury trial is necessarily inconvenient.
Is there a substantial public interest in the case?
- I accept that this case involves the commercial interests of the parties but I do not accept the proposition that a jury would not be of assistance in a matter of this nature and that the perception of the trial process would not be enhanced by a trial of this nature. I also consider that there would be some significant public interest in a trial involving the conduct of receivers, the lending practices of banks and the interrelationship between the receivers and the bank as well as the duties owed.
Should the jury be excluded pursuant to s 65A of the Jury Act 1995 (Qld)?
- As the Court of Appeal noted in Coffey v State of Queensland & Ors[4] the common law right to have issues of fact determined by a jury “was not received in Australia.” There is no doubt that Ross has the right to elect to have a trial by jury pursuant to r 472 of the UCPR which provides that unless trial by a jury is excluded by an Act, a plaintiff in the statement of claim or a defendant in the defence may elect trial by jury. Such an election has clearly been made in this case and that election has been consistently maintained by Ross since it was first made in 2012.
- Section 65A of the Jury Act then sets out the circumstances in which the Court may order a trial without a jury despite such an election as follows:
“65A Civil trial without a jury
A court may order a civil trial without a jury if the trial—
(a) requires a prolonged examination of records; or
(b) involves any technical, scientific or other issue that cannot be conveniently considered and resolved by a jury.”
- The requirements of s 65A of the Jury Act were previously contained in r 474 of the UCPR and were in identical terms. The requirements of r 474 were considered in 2011 by Boddice J in Mizikovsky v Queensland Television Ltd & Ors[5] where his Honour indicated that notwithstanding an entitlement to a trial by jury the court has a discretion to dispense with trial by jury as follows:[6]
“[7] Notwithstanding that entitlement, both the Act and the UCPR provide the court with a discretion to dispense with a jury trial. That discretion arises if the trial:
(a) requires a prolonged examination of records; or
(b) involves any technical, scientific or other issue that cannot be conveniently considered and resolved by a jury.
[8] The exercise of the discretion is to occur having regard to the particular features of the case, and the provisions of the Act and the UCPR. The onus is on the party seeking the order to establish that the discretion should be exercised in favour of dispensing with trial by jury.
[9] The word ‘conveniently’ directs attention to whether it is convenient for the effective and efficient administration of justice. The efficient administration of justice may be rendered less than convenient where:
(a) there is a physical problem of handling, in the confines of a jury box, large bundles of documents;
(b) the number and complexity of documents will prolong the trial if held before a jury;
(c) the expense involved in the trial will be significantly increased because of trial by jury; and
(d) there is a risk a jury may not sufficiently understand the issues on the documents so as to be able to resolve them.” (footnotes omitted)
- It is clear therefore that the onus is on the party seeking the order to establish that the discretion should be exercised so that trial by jury is dispensed with. Accordingly, the onus is on the CBA to establish that the discretion should be exercised in its favour.
- Turning then to the particular features of this case. I note that counsel for the CBA essentially concedes that in the present case a prolonged examination of records is not required. Whilst it is also conceded there are no technical or scientific issues in the case counsel for the CBA argues that there are issues of market value to consider which could be a difficult exercise for a jury particularly as no expert evidence is being called by Ross on this issue.
- As I have already indicated, I do not consider that the factual issues for determination by the jury in this case are unduly complex or difficult. Many of the factual issues are issues which juries are well placed to determine, including what version of events they prefer in relation to the circumstances of meetings, the conversations at the meetings and conduct which occurred subsequent to the meetings. I also consider that the question of market value is something well able to be determined by the jury based on the evidence presented to it. Indeed, the concept of market value is well understood by members of the public and is a concept within the range of normal experience. I am not satisfied that there is any risk that the jury will not understand the issues so as to be able to resolve them. Neither has some “other issue” arisen which would require the exercise of the discretion in favour of the CBA. The parties are represented by Counsel and this case has already been subject to supervision by the Caseflow Reviews judge, Justice Atkinson.
- Furthermore in my view there is no physical problem with handling the documents in this case which do not appear to me to be large or voluminous. If there were to be a large bundle of physical documents, then the courts e-trial system could easily be utilised. Neither am I satisfied that the case will be unduly prolonged or that the expense involved in the trial will be significantly increased.
- I am not satisfied requirements of s 65A have been satisfied. Is there, however, another basis for the exclusion of the jury from the trial? Counsel for the CBA argues that the jury should be excluded pursuant to r 367 of the UCPR or the inherent jurisdiction of the Court.
Should the jury be excluded pursuant to the Court’s inherent jurisdiction?
- Counsel for the CBA also argues that the statutory power given to the Court by s 65A is also consistent with the Court’s inherent power to control its own processes, as discussed by Chesterman J in Coronis v Jilt Pty Ltd[7] and that there is therefore a further power in r 367 of the UCPR to order a dispensation from a jury trial quite apart from r 474 (now s 65A of the Jury Act) where the interests of justice require it.
- Counsel for the CBA relies on the general principles on what constitutes effective and efficient administration of justice which were outlined in Beta Construction Ltd & Anor v Channel 4 Television Co Ltd,[8] the inherent jurisdiction of the Court, r 367 and the decision of Chesterman JA in Coronis to argue that in an application of this nature the Court has a broader discretion than that contained in s 65A. In particular counsel argues that there is a real concern in this case that the jury will not understand the issues given their complexity and as the jury is not required to give reasons the fact that the jury has misunderstood the issues will never be known.
- In Coronis Chesterman JA held:[9]
“[72] In my opinion, UCPR r 474 should be construed so as to confer the power to dispense with a jury in that circumstance. Such an approach is consistent with the Court‘s inherent power to control its own processes. The power is undoubted. Lord Diplock (with whom Lord Edmund-Davies and Lord Russell agreed) said in Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909 at 977:
‘The High Court’s power to dismiss a pending action for want of prosecution is but an instance of a general power to control its own procedure so as to prevent its being used to achieve injustice. Such a power is inherent in its constitutional function as a court of justice.
… [I]t would stultify the constitutional role of the High Court as a court of justice if it were not armed with power to prevent its process being misused in such a way as to diminish its capability of arriving at a just decision of the dispute.’
Lord Diplock restated the principle in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536:
‘[T]his is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would
nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied ….’
[73]The latter passage was quoted with approval by Mason CJ, Deane and Dawson JJ in Walton v Gardiner (1993) 177 CLR 378 at 393. The cases in the House of Lords concerned applications to strike proceedings out, in Walton the remedy sought was a stay of proceedings, but the power is not limited to making such orders. The power extends to any order which will suit the justice of the case and prevent injustice or rectify the abuse of process. It extends, in my opinion, to ordering a trial to proceed without a jury or, alternatively, to ordering a stay of the action as long as the party in question insists upon trial by jury.
[74]This was a case in which the trial judge could properly conclude that the issues could not conveniently be resolved by a jury, and an order could be made under rule 474.
[75]If it be thought that UCPR 474 does not extend to cases where the inconvenience flows from the presentation of the issue rather than the issue itself, there is nevertheless power to make an order dispensing with a jury if to proceed with one would make the trial unfair. The power is to be found in UCPR 367 which provides:
(1) The court may make any order or direction about the conduct of a proceeding it considers appropriate, even though the order or direction may be inconsistent with another provision of these rules.
(2) In deciding whether to make an order or direction, the interests of justice are paramount.
…
(5) If the court‘s order or direction is inconsistent with another provision of these rules, the court‘s order or direction prevails to the extent of the inconsistency.
(6) The court may at any time vary or revoke an order or direction made under this rule.
[76]The power is extremely wide. The court may make any order about the conduct of a proceeding. The power may be exercised by making an order different to, or inconsistent with what a rule dealing with a specific subject matter provides. It clearly extends to making an order dispensing with a jury where the interests of justice require it. The order may be made in circumstances additional to those identified in UCPR r 474. Rule 367 was a sufficient source of power for the order made by the primary judge.
[77]I do not intend to suggest that an order dispensing with a jury may be had for the asking. The right of a party to elect trial by jury is to be respected. That point was made in Matthews v General Accident Fire and Life Insurance Corporation Ltd [1970] QWN 37; Kelly v Kelly [1990] 2 Qd R 147 and Smit v Chan [2003] 2 Qd R 431. I respectfully agree with Mullins J in Smit that the consideration that trial by jury will necessarily be longer and more expensive than trial by judge alone does not make a jury trial inconvenient for the purposes of UCPR 474. I also agree with Mullins J, and the President, that rule 5 does not have that effect.”
- In this regard I note that r 367 of the UCPR provides:
“367 Directions
(1) The court may make any order or direction about the conduct of a proceeding it considers appropriate, even though the order or direction may be inconsistent with another provision of these rules.
(2) In deciding whether to make an order or direction, the interests of justice are paramount.
(3) Without limiting subrule (1), the court may at any time do any of the following in relation to a trial or hearing of a proceeding—
(a) require copies of pleadings for use by the court before the trial or hearing;
(b) limit the time to be taken by the trial or hearing;
(c) limit the time to be taken by a party in presenting its case;
(d) require evidence to be given by affidavit, orally or in some other form;
(e) limit the number of witnesses (including expert witnesses) a party may call on a particular issue;
(f) limit the time to be taken in examining, cross-examining or re-examining a witness;
(g) require submissions to be made in the way the court directs, for example, in writing, orally, or by a combination of written and oral submission;
(h) limit the time to be taken in making an oral submission;
(i) limit the length of a written submission or affidavit;
(j) require the parties, before the trial or hearing, to provide statements of witnesses the parties intend to call.
(4) In addition to the principle mentioned in subrule (2), in deciding whether to make an order or direction of a type mentioned in subrule (3), the court may have regard to the following matters—
(a) that each party is entitled to a fair trial or hearing;
(b) that the time allowed for taking a step in the proceeding or for the trial or hearing must be reasonable;
(c) the complexity or simplicity of the case;
(d) the importance of the issues and the case as a whole;
(e) the volume and character of the evidence to be led;
(f) the time expected to be taken by the trial or hearing;
(g) the number of witnesses to be called by the parties;
(h) that each party must be given a reasonable opportunity to lead evidence and cross-examine witnesses;
(i) the state of the court lists;
(j) another relevant matter.
(5) If the court’s order or direction is inconsistent with another provision of these rules, the court’s order or direction prevails to the extent of the inconsistency.
(6) The court may at any time vary or revoke an order or direction made under this rule.”
- I am not satisfied that r 367 can be construed in the way counsel for the CBA argues. I note that McMurdo P in Coronis did not refer to the inherent jurisdiction of the Court when considering the requirements of r 474 and held that the discretion only arose if the matters set out in r 474 existed as follows:[10]
“[41]The terms of r 474 make clear that the discretion it provides to order a trial without a jury only arises where the matters listed in either r 474(a) or (b) exist. As Ms Coronis points out, this case did not involve a prolonged examination of records nor any technical or scientific issue that could not be conveniently considered and resolved by a jury. The respondents' counsel submitted that the judge was entitled to make the order under r 474 because it came within "or other issue" in r 474(b). I cannot accept that submission. The phrase "or other issue" clearly relates to other issues of a kind involving some complexity which would be difficult for a jury to consider and resolve. The fact that this case was to be presented by a self represented litigant and that it was unfocussed and rambling was insufficient to bring it within the phrase "or other issue" in r 474. As the circumstances enlivening the discretion did not arise, the judge had no discretion in this case to order a trial without a jury under r 474. That conclusion is consistent with the approach taken in Kelly v Kelly which considered O 39 r 4 and r 24A of the Supreme Court Rules which predated the introduction of the UCPR. It is also consistent with the approach taken more recently under the UCPR by Mullins J in Smit v Chan and by Daubney J in Syddall v National Mutual Life Association of Australasia Ltd (where the application to proceed to trial without a jury was granted); and by Boddice J in Mizikovsky v Queensland Television Ltd & Ors (where the application to proceed to trial without a jury was refused).” (my emphasis)
- I also note that in the same decision Wilson J specifically stated that she declined to express a view as to whether there was an inherent power in the court to order that a trial proceed without a jury and also declined to express an opinion as to whether r 367 would have been enlivened as follows:[11]
“[91]Whether a court’s inherent powers to control its own processes extend to ordering that a trial proceed without a jury or, alternatively, to staying a proceeding for so long as a party insists upon trial by jury was not argued, and I decline to express any opinion upon the question.
[92]Nor was there argument upon whether such an order could properly have been made pursuant to r 367 of the UCPR, and in the circumstances of the present case, I decline to express any opinion on that question, also.”
- Given the specific provision of s 65A of the Jury Act I am not convinced that r 367 or the inherent powers of the court would permit a dispensation with trial by jury in circumstances which were beyond the factors outlined in s 65A. In the present case however it is not necessary for me to decide that issue as I do not consider that there are any factors here which would enliven such a discretion in any event. I can see nothing in the circumstances of this case which would trigger such a consideration.
- The application is refused.
- I will hear from the parties as to the costs of the application.
Footnotes
[1] [2012] QCA 66.
[2] [1990] 2 Qd R 147.
[3] [2001] QSC 493; [2003] 2 Qd R 431.
[4] [2010] QCA 291.
[5] [2011] QSC 205.
[6] [2011] QSC 205 at [7] – [9].
[7] [2012] QCA 66; [2013] 1 Qd R 104 at [72].
[8] [1990] 1 WLR 1042; [1990] 2 All ER 1012.
[9] [2012] QCA 66 at [72] – [77].
[10] [2012] QCA 66 at [41].
[11] [2012] QCA 66 at [91] – [92].