American Express v D S Kells

[1995] QSC 163

IN THE SUPREME COURT
OF QUEENSLAND

Writ No. 1168 of 1995

Brisbane

[American Express v. D S Kells]

AMERICAN EXPRESS INTERNATIONAL INC.
  (ARBN 000 618 208)

Plaintiff
  v.

DONALD SYDNEY KELLS
  Defendant

JUDGMENT - MACKENZIE J.

Judgment delivered  11/08/1995

CATCHWORDS:           PRACTICE - Application for summary judgment - defendant held charge card account with plaintiff - third person issued with supplementary card - whether consent form forged - whether plaintiff obliged to inform defendant of dealings of supplementary cardholders - whether serious question or questions to be tried.

Counsel:K. Fleming Q.C. for applicant

R. Derrington for respondent

Solicitors:Flower & Hart for applicant

Jones King for respondent

Hearing date: 9 August 1995

IN THE SUPREME COURT
OF QUEENSLAND

Writ No. 1168 of 1995

Brisbane

[American Express v. D S Kells]

AMERICAN EXPRESS INTERNATIONAL INC.
  (ARBN 000 618 208)

Plaintiff
  v.

DONALD SYDNEY KELLS
  Defendant

JUDGMENT - MACKENZIE J.

Judgment Delivered 11 August 1995

The plaintiff has applied for summary judgment for a sum owing as a result of the use of an American Express Gold Card by the defendant and holders of supplementary cards on the account.  The essential facts are quite brief.  The defendant having been befriended by one Schultz was persuaded to allow him to have a supplementary card on his account with the plaintiff.  Schultz incurred a large number of debts by using the card, which resulted in the claim for $223,720.07 being made.  There is evidence tending to establish that Schultz was a confidence trickster and one of the elements of the submissions before me was that a document entitled Account Management Consent Form purporting to be signed by the defendant is a forgery.  The effect of the receipt of the form by the plaintiff was that Schultz gained the right to manage the account and to have the monthly statement of accounts redirected from a city post-office box to a suburban box also rented in the name of the defendant but not used by him.  The evidence suggests that Schultz acquainted the defendant of the amount attributable to the defendant and his family members who had cards and that those amounts were paid to the plaintiff.  The defendant appears not to have enquired about the total amount of indebtedness at any material time.
          It was also an element of the defendant's submissions that there had been representations made that any deviation from the ordinary pattern of use of the card would be reported to him as the person in whose name the card had been issued.  The defence claims that the plaintiff was negligent, in breach of contract, in breach of s.51AB of the Trade Practices Act and in breach of statutory duty pursuant to the Credit Act to deliver statements in respect of each billing cycle to the defendant.
          The applicant submitted that an "entire agreement" clause would only give way to a representation if it was a fraudulent misrepresentation.  It was submitted that the pleading of the defence did not raise this.  However it was conceded that the clause could not prevail against a statutory entitlement.  It was also accepted that the power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried (Fancourt v. Mercantile Credits Ltd (1983) 154 C.L.R. 87). It was submitted that it was incumbent upon a respondent to an application for summary judgment to condescend upon particulars of the defence without needing to go the whole distance to establishing a defence (Fancourt v. Mercantile Credits Ltd, 98).
          In the course of the hearing the solicitor who had deposed to a belief that there was no defence to the action was cross-examined by leave.  The thrust of the cross-examination was directed towards whether in view of the raising of the issue of fraud on the part of Schultz, the solicitor had directed his mind to that aspect in deposing as he did.  I am satisfied that the solicitor considered the information within his knowledge and concluded that notwithstanding the raising of the issue of fraud on the part of Schultz the defendant remained contractually liable to the plaintiff.  I reject any suggestion that there was anything untoward in the solicitor's conduct.  I have considered the submissions on behalf of the defendant as well.  In my opinion there is a serious question to be tried.   The heart of the matter is whether representations were made that the plaintiff would monitor the account and advise the person in whose name it was held of any unusual operations on the account by supplementary cardholders.  If that were to be established it would be necessary to determine whether the account management consent form was a forgery and if that was the case what the legal consequences were of the plaintiff being persuaded to treat Schultz as the manager of the account and sending monthly statements to him.  It is no part of my function in proceedings of this kind to try to make nice distinctions or to try to predict what the outcome of the matter may be.  The question is whether there is a serious question or serious questions to be tried.  I am satisfied that that is the case and the application is dismissed.  The defendant is given unconditional leave to defend.  Costs are reserved.