ANSA Enterprises Pty Ltd v Commonwealth Bank of Australia
[2014] WASC 314
•9 SEPTEMBER 2014
ANSA ENTERPRISES PTY LTD -v- COMMONWEALTH BANK OF AUSTRALIA [2014] WASC 314
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 314 | |
| 09/09/2014 | |||
| Case No: | CIV:1343/2014 | 25 AUGUST 2014 | |
| Coram: | MASTER SANDERSON | 25/08/14 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | ANSA ENTERPRISES PTY LTD ANTHONY ESPOSITO COMMONWEALTH BANK OF AUSTRALIA AUSTRALIAN FINANCIAL GROUP |
Catchwords: | Pre-action discovery Application by plaintiff against first defendant No contractual relationship and no identification of cause of action Turns on own facts |
Legislation: | Nil |
Case References: | GLR Injection Technologies Pty Ltd v Forton Automative Treatments Pty Ltd [2009] WASC 131 Hardie Finance Corp Pty Ltd v Ahern [2010] WASC 403 Palmer Bruyn & Parker Pty Ltd v Parsons [2001] 208 CLR 388 The Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
ANTHONY ESPOSITO
Second Plaintiff
AND
COMMONWEALTH BANK OF AUSTRALIA
First Defendant
AUSTRALIAN FINANCIAL GROUP
Second Defendant
Catchwords:
Pre-action discovery - Application by plaintiff against first defendant - No contractual relationship and no identification of cause of action - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
First Plaintiff : Mr T Galic
Second Plaintiff : Mr T Galic
First Defendant : Ms E L Blewett
Second Defendant : No appearance
Solicitors:
First Plaintiff : Galic & Co
Second Plaintiff : Galic & Co
First Defendant : Corrs Chambers Westgarth
Second Defendant : No appearance
Case(s) referred to in judgment(s):
GLR Injection Technologies Pty Ltd v Forton Automative Treatments Pty Ltd [2009] WASC 131
Hardie Finance Corp Pty Ltd v Ahern [2010] WASC 403
Palmer Bruyn & Parker Pty Ltd v Parsons [2001] 208 CLR 388
The Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147
1 MASTER SANDERSON: By notice of originating motion filed 12 March 2014 the plaintiffs sought orders for pre-action discovery against the first defendant. Counsel for the plaintiffs advised during the course of the hearing the second defendant had not been served with the application and, accordingly, no orders were sought with respect to it. After hearing argument, I dismissed the application. I said I would publish reasons for my decision. These are those reasons.
2 The plaintiffs in their notice of originating motion sought the following orders:
1. The First Respondent make preliminary discovery of all documents and things that are or have been in the First Respondent's possession that may assist the Applicants in identifying a potential party within the meaning of Order 26A Rule 3 of the Rules of the Supreme Court 1971 (WA).
2. The First Respondent make preliminary discovery of all documents and things that are or have been in the First Respondents' [sic] possession that may assist the Applicants in making the decision to commence proceedings against the First Respondents [sic] within the meaning of Order 26A Rule 4 of the Rules of the Supreme Court 1971 (WA).
3. In the alternative to Orders (1) and (2) above, the First Respondent do give discovery of all documents and things which is to include but not be limited to, correspondence, electronic databases and electronic communications, file notes and any other documents in respect to the following categories:
3.1 all documents in the First Respondents [sic] possession, custody or control (or a list of documents that were, but are not now in the first Respondents [sic] custody, possession of [sic] control) relating in any way to:
a) Mr Anthony Esposito;
b) Ansa Enterprises Pty Ltd;
c) St James FC;
d) Michael Brian Paul Thoms.
3 The application was supported by two affidavits of the second plaintiff, the first sworn 27 December 2013 and the second sworn 30 June 2014. In her written submissions, counsel for the first defendant objected to a large number of paragraphs in the second plaintiff's first affidavit. Counsel for the plaintiffs did not object to these pars being struck out. Accordingly, the pars complained of in par 10 of the first defendant's written submissions were struck out. That means, strictly speaking, the attachments to Mr Esposito's first affidavit are unverified. However, the correspondence speaks for itself and, where necessary, I have referred to it. It does nothing more than provide an indication of the chain of events leading to the present application. During the course of submissions by both counsel I referred to the correspondence, and counsel for the first defendant did not object to these references. No purpose would have been served by requiring a further affidavit of the second defendant to be filed simply annexing the correspondence.
4 In his written outline of submissions counsel for the plaintiffs summarised the facts - I think fairly - in the following way. The second plaintiff is a finance broker and a director of the first plaintiff. The first plaintiff had a Contractor Agreement in place with St James Finance Corporation Pty Ltd (SJFC). SJFC had an agreement in place with the mortgage aggregator named as the second defendant to this application. The first plaintiff had an authority to act as a nominee broker under an intermediary agreement between various banks and the second defendant.
5 By letter dated 30 January 2013 SJFC informed the second plaintiff that he was suspected of being involved in the submission of a fraudulent Bankwest loan application. On 25 January 2013 the first defendant revoked the second plaintiff's authority approval under the agreement between the first and second defendants. The Mortgage and Finance Association (MFAA) appointed RISQ Group Pty Ltd (RISQ) in January 2013 to investigate any disciplinary issues arising from the second plaintiff's involvement with a client named Thoms. RISQ found that there was insufficient evidence of misconduct by the second plaintiff.
6 On the second plaintiff's case, that leaves him in a difficult position. He has had his authority to act as a nominee broker cancelled. He has lost his relationship with the first defendant. He has lost the income stream and clientele that is locked up with the first defendant. Most importantly, he cannot earn an income through any other aggregator until the previous aggregator - the second defendant - issues a certification or separation letter advising that there are no issues. The plaintiffs maintain the second defendant is not prepared to provide such letter in light of the first defendant's internally made findings against the second plaintiff.
7 Although the originating motion refers, in par 1, to O 26A r 3 it is clear that rule has no application. The plaintiffs do not need discovery to identify a potential party. In fact, in both written and oral submissions counsel for the plaintiffs relied upon O 26A r 4. If this application was to succeed then the plaintiffs had to satisfy the requirements of that rule. So par 1 of the originating motion can be put to one side.
8 Based upon the decision in The Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147 the authors of Civil Procedure Western Australia [26A.4.0] set out four conditions which are necessary to justify the making of an order. They are:
1. The applicant wants to take proceedings against the potential party.
2. The applicant has made reasonable enquiries.
3. The applicant has not been able to obtain sufficient information to enable the decision to be made as to whether to commence or take the proceedings.
4. There are reasonable grounds for believing the potential party had, has or is likely to have had, or to have, possession of documents that may assist in making the decision whether to take proceedings.
9 Although it is nowhere stated in the affidavit evidence, it can be inferred from the fact this application has been made and the general tenor of the affidavit evidence, the plaintiffs want to take proceedings against the first defendant. It would seem the first plaintiff, and through it the second plaintiff, are, at present, prevented from acting as a finance broker occasioning both plaintiffs financial loss. The plaintiffs apparently believe the only way to rectify the position is to take some proceedings against the first defendant and perhaps others.
10 The plaintiffs have made some enquiries of the first defendant. On 1 February 2013 the plaintiffs' solicitors wrote to the first defendant effectively asking why his relationship with the first plaintiff was terminated. A copy of that letter is attachment G to the second plaintiff's first affidavit. The second plaintiff wrote back pointing out there was no contractual relationship between the plaintiffs and the first defendant. On 30 August 2013 the plaintiffs' solicitors wrote again to the first defendant setting out the plaintiffs' complaints in rather more detail and asking for a number of documents. That letter appears not to have drawn a response. In the circumstances I am satisfied the plaintiffs have made reasonable enquiries. I am also satisfied the plaintiffs have not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take proceedings.
11 In my view there are reasonable grounds for believing the first defendant has in its possession documents which may assist in making the decision whether to take proceedings. It is clear from the documents there has been some interactions between the first and second defendants and SJFC. What is clear is an application for finance was lodged by the plaintiffs on behalf of Mr Thoms. Consideration of that application led directly to the termination of the plaintiffs' business arrangements with the second defendant and SJFC.
12 In summary then I am satisfied the four conditions necessary to justify an order being made were satisfied.
13 The further question is whether or not the plaintiffs may have a cause of action against the first defendant. Relying upon GLR Injection Technologies Pty Ltd v Forton Automative Treatments Pty Ltd [2009] WASC 131 the authors of Civil Procedure Western Australia [26A.4.1] set out seven criteria which an plaintiff must satisfy. They are:
1. It must establish that it 'may have a cause of action'.
2. That the potential cause of action is against a person whose description has been ascertained.
3. That it either wants to commence proceedings against the potential party or wants to take proceedings against the potential party in the cause of action to which the person is a party'.
4. If after 'reasonable enquiries' it has not been able to ascertain sufficient information to decide whether or not to commence proceedings.
5. As a necessary concomitant to (4) at the time of making the application the plaintiff has not reached a decision about whether or not to take proceedings.
6. There are reasonable grounds for believing that the potential party has, in its possession, documents that may assist in making a decision.
7. The application must be supported by an affidavit which is served on the potential party.
14 It is the first of these criteria which the plaintiffs, in my view, were not able to satisfy. In his written submissions counsel for the plaintiffs identified what he saw as four potential causes of action. They were:
1. A right to seek declaratory relief from the court that the second plaintiff was not involved in the submission of any fraudulent loan application and was not involved in the commission of any fraud.
2. The tort of injurious falsehood.
3. The tort of wrongful or unlawful interference with business or trade.
4. The tort of conspiracy to cause economic harm or harm to trade, business or other economic interest.
15 It is important to bear in mind when considering what cause of action the plaintiffs may have against the first defendant there was no contractual relationship between either of the plaintiffs and the first defendant. It would appear the first defendant had some contractual relationship with the second defendant. In a letter of 25 January 2013 from the first defendant to the second plaintiff reference is made to an 'Intermediary Agreement between the Commonwealth Bank and Australian Finance Group Pty Ltd': see attachment B to the second plaintiff's first affidavit. It would also seem there was a contractual relationship between the plaintiffs and SJFC. Although it is not possible to be sure from the documentation, it is likely there is some form of contractual arrangement between SJFC and the second defendant. But none of that creates any contractual relationship between the plaintiffs and the first defendant, and nothing in the plaintiffs' submissions suggest otherwise.
16 It has sometimes been said there is virtually no situation in respect of which a declaration cannot be made: see Meagher RP, Heydon JD and Leeming MJ, Meagher, Gummow & Lehane'sEquity: Doctrines & Remedies (4th ed) [19-075]. But it is difficult to see here how a declaration might arise. How, for instance, would such a declaration be formulated. There may well be issues between the plaintiffs, SJFC and the second defendant. But none of that feeds into a cause of action as between the plaintiffs and the first defendant. It is not possible to identify any legal or equitable right available to the plaintiffs which has been infringed by the first defendant. So the mere claim the plaintiffs intend to seek a declaration is not, in my view, sufficient to ground this application.
17 There are, in general terms, four elements to a cause of action for an injurious falsehood. They are:
1. A false statement of or concerning the plaintiff's goods or business.
2. Publication of that statement by the defendant to a third person.
3. Malice on the part of the defendant.
4. Proof by the plaintiff of actual damage (which may include a general loss of business) suffered as a result of the statement.
See Palmer Bruyn & Parker Pty Ltd v Parsons [2001] 208 CLR 388 [52].
18 In this case there is no evidence of any statement being made by the first defendant, false or otherwise, concerning the plaintiffs. There is also no evidence of publication of that statement by the first defendant to a third person. If that is not enough there is certainly no evidence of malice on the part of the first defendant. At least three of the four elements of the cause of action are missing such as to make it unlikely a claim for injurious falsehood could succeed.
19 The tort of unlawful interference is 'embryonic' and difficult to define: see Hardie Finance Corp Pty Ltd v Ahern [2010] WASC 403. But it would appear the tort has at least three aspects. They are:
1. A requirement of the doing of an unlawful act in the sense that the act is forbidden by law; it is not sufficient the act is unauthorised only in the sense it is ultra vires or void.
2. There must be an intentional act calculated in the ordinary course of business to cause harm.
3. The acts complained of must not fall within the realm of negligence or misfeasance in public office.
20 The state of the evidence presented by the plaintiffs does not satisfy any of these requirements. There is nothing to suggest whatever was done by the first defendant was in some way an unlawful act that was forbidden by the law. There is no evidence that any act taken was calculated to cause harm. Finally, it is possible to see how negligent acts on the part of the first defendant might cause loss to the plaintiffs. That being so it is doubtful whether the tort of unlawful interference would be available to the plaintiffs.
21 Finally there is the tort of conspiracy. The essential elements of such a cause of action are:
1. An agreement (not necessarily contractual) between two or more persons.
2. An intention to injure (that must be the predominant purpose of the agreement).
3. The agreement was executed in whole or in part.
4. The plaintiff suffered some pecuniary loss as a result of the defendant's acts in furtherance of their agreement.
22 The plaintiffs have not provided evidence to satisfy the first three of these requirements and, consequently, have not satisfied the fourth. I need not go through each of the requirements in turn. It is sufficient if I say there is simply no evidence at all to justify such a cause of action.
23 Although it was not specifically advanced by the plaintiffs, it is possible to envisage a scenario consistent with the limited material available which might give rise to a cause of action in negligence. If it were the case the loan application was submitted to the first defendant and the first defendant negligently dealt with the application, formed an adverse view of the plaintiffs' honesty and accordingly put in chain a sequence of events which caused the plaintiffs' loss, then a cause of action may arise. But to put the position that way is to highlight the lack of any evidence in this case which would justify concluding such a cause of action may lie. Surely the place to start was with SJFC or perhaps the second defendant. Both have a much closer relationship with the plaintiffs than the first defendant. It would seem the plaintiffs have started at the wrong end of the chain.
24 Having said all of that I am in no way suggesting the plaintiffs do not have reason for complaint. After all, RISQ were asked to investigate the circumstances which led to the plaintiffs' contractual agreement with SJFC being terminated. They concluded there was no basis for such termination. RISQ's investigation took some eight months so presumably it was thorough. Perhaps there are some grounds for a contractual claim by the plaintiffs against SJFC. But on the state of the evidence at the moment there appears to be no prospect of taking proceedings against the first defendant.
25 For these reasons I dismissed the plaintiffs' motion. The plaintiffs should pay the defendants' costs of the application, including reserved costs to be taxed.
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