ANZ Banking Group Ltd v Tonkin
[2000] TASSC 7
•29 February 2000
[2000] TASSC 7
CITATION: ANZ Banking Group Ltd v Tonkin & Ors [2000] TASSC 7
PARTIES: AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
v
TONKIN, Peter JamesBURGESS, Ian Thomas
BURGESS, Elizabeth Anne
BUCHANAN, Donald Bruce
BUCHANAN, Judith AmyAUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITEDv
EDDY, Craig Ashton
EDDY, Susan Mary
TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)
JURISDICTION: APPELLATE
FILE NO/S: FCA 77/1999
FCA 78/1999
DELIVERED ON: 29 February 2000
DELIVERED AT: Hobart
HEARING DATES: 8 November 1999
JUDGMENT OF: Wright, Crawford and Slicer JJ
CATCHWORDS:
REPRESENTATION:
Counsel:
Appellants: S P Estcourt QC
Respondents: S B McElwaine
Solicitors:
Appellants: Butler McIntyre & Butler
Respondents: S B McElwaine
Judgment Number: [1999] TASSC 7
Number of Paragraphs: 16
Serial No 7/2000
File No FCA 77/1999FCA 78/1999
AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v
PETER JAMES TONKIN, IAN THOMAS BURGESS,
ELIZABETH ANNE BURGESS, DONALD BRUCE BUCHANAN,
JUDITH AMY BUCHANAN
AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v
CRAIG ASHTON EDDY and SUSAN MARY EDDY
REASONS FOR JUDGMENT FULL COURT
WRIGHT J
CRAWFORD
SLICER J
29 February 2000
Orders of the Court
(FCA 77/1999)
Appeal allowed.
Order dated 6 September 1999 set aside and in lieu, defendants ordered to answer fully each part of interrogatories 3 and 5 administered by the plaintiffs on 22 June 1998.
(FCA 78/1999)
Appeal allowed.
Order dated 6 September 1999 set aside and in lieu, defendants ordered to answer fully each part of interrogatories 3 and 5 administered by the plaintiffs on 22 June 1998.
Serial No 7/2000
File No FCA 77/1999FCA 78/1999
AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v
PETER JAMES TONKIN, IAN THOMAS BURGESS,
ELIZABETH ANNE BURGESS, DONALD BRUCE BUCHANAN,
JUDITH AMY BUCHANAN
AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v
CRAIG ASHTON EDDY and SUSAN MARY EDDY
REASONS FOR JUDGMENT FULL COURT
WRIGHT J
29 February 2000
The appellants (ANZ) have brought two appeals in allied actions against orders dismissing appeals from the Master in respect of interrogatories.
In 1988, the defendants in each action gave guarantees to ANZ in respect of financial accommodation provided by ANZ to Tonkin Holdings Pty Ltd (Tonkin). Tonkin has become insolvent and ANZ has sued the guarantors. The guarantors have denied liability on the basis that ANZ negotiated and paid cheques drawn in disregard of limitations which applied to Tonkin's overdraft account, viz, that company cheques were only to be negotiated if bearing at least two authorised signatures. In fact, the cheques in question were signed by one authorised signatory only.
ANZ has responded to this defence by alleging that even if the cheques were signed and negotiated in this way:
(1)the defendants are estopped from denying ANZ's authority to pay the cheques because they knew that the cheques were signed by one person only;
(2) the defendants ratified any such unauthorised signing of the cheques;
(3)the cheques were applied in payment of legal liabilities incurred by Tonkin in the ordinary course of its business and thus, it would be unconscionable for the company to retain the benefit of the payments; and
(4)the payment of the cheques resulted in benefit to the defendants and it would be unconscionable for the respondents to retain the benefit of such payment.
The cheques referred to by the defendants were identified in further and better particulars of their defence dated 7 April 1996. There were approximately 380 such cheques drawn between 12 February 1989 and 1 November 1989. The total sum for which they were drawn was $308,000. ANZ administered interrogatories to the defendants which were answered on affidavit on 25 September 1998. In those answers, the defendants admitted that except as to 89 identified cheques, the 380 cheques previously mentioned, when paid, resulted in the reduction or discharge of a debt or financial obligation of Tonkin incurred in the ordinary course of its business.
ANZ's case at trial will be that the defendants are liable in respect of the sums comprised in those 291 cheques and the interest which has accumulated in respect thereof. In this respect, ANZ plainly has an arguable case. In respect of the remaining 89 cheques, it will be necessary for ANZ to establish at trial that those cheques were also paid in respect of company debts or, alternatively, that their payment resulted in financial benefit to the defendants. For this purpose, it will be necessary for ANZ to establish all of the foundational facts necessary to support a submission at trial that, as a matter of law, the payments were of legitimate debts for the purposes of the company's business or otherwise benefited the defendants. As the pleadings currently stand, these foundational facts are all denied. It will be necessary for ANZ to establish the relevant details of each cheque, including the payee, the purpose for which it was paid, and the benefit derived by Tonkin or the defendants in respect of that cheque. ANZ has administered a second set of interrogatories directed to ascertaining these facts.
The Master disallowed all the interrogatories, except interrogatory number 3(a). An appeal against the Master's decision was dismissed by Underwood J, who held that the interrogatories in question were oppressive and unfair, principally on the basis that to answer the interrogatories in the detail required would necessitate the defendants answering over 1,000 questions in relation to the cheques. His Honour accepted that it was legitimate to interrogate as to the purpose of the payments made by each cheque, but suggested that this could be done simply by, for example, asking whether the payments in question were "made to discharge (wholly or partially) a debt incurred in the ordinary course of business and if no with respect to each cheque state how otherwise".
Counsel for ANZ submits that such an approach is deceptively simple and inadequate because the question posed could be answered by non-helpful assertions, eg, that the payment was one made by the company outside the ordinary course of its business without describing how the payment came to be placed in this category. Counsel also submits that the interrogatories are neither oppressive, nor unfair, to the defendants as it is the defendants themselves who have singled out 89 cheques and have denied that they were paid in the ordinary course of the company's business or that such payments resulted in benefit to the defendants.
It was submitted that the defendants, having thus identified the cheques, must be able to establish the reason for which they challenge each of those cheques. It was further argued that the facts now being pursued are solely within the knowledge of the defendants and the company and are not matters which ANZ itself will be able to establish by evidence at the trial. Thus, it is submitted that the mere fact that there is no connection on the pleadings between the defendants and Tonkin, other than in respect of the guarantee, does not render the interrogatory unfair.
It was submitted that the defendants themselves have demonstrated sufficient knowledge of the company's business and the individual cheques concerned, to assert that 89 of those cheques were outside the ordinary course of business and it can therefore be presumed that they are in a position to substantiate this assertion. It is submitted that notwithstanding the multiplicity of questions to be answered in respect of the subject matter of the challenged cheques, this is purely a product of the number of cheques actually identified by the defendants themselves as being outside the ordinary course of the company's business.
The Master appears to have allowed the first parts of interrogatories 5(a) and 5(b), but the balance of each interrogatory has been disallowed. The first part of the interrogatory asks the defendants to state whether they had a belief as to, or knowledge of, the fact that the relevant cheques had been signed by Peter Tonkin as sole signatory. The second part of the interrogatory asks if they did, what that belief was and when it was acquired. Counsel for ANZ submits that this inquiry is relevant, not only as to the defence of ratification, but also as to the defence of estoppel.
Counsel for the defendants submitted that the sheer volume of the answers required is, of itself, oppression, see American Flange Manufacturing v Rheem [1965] NSWR 193. He submitted that each cheque must be identified, the amount stated, the payee stated and the date of the cheque stated. He pointed out that particulars already provided contained these details and the original of each cheque had been made available during the course of discovery. He pointed out there had been no notice to admit facts by ANZ, no notice to admit documents in respect of the challenged cheques and no certificate of readiness had been prepared against a proposal that all or any of the cheques be agreed documents for the purposes of trial. He submitted that interrogatories should not be used as a substitute for further and better particulars, a notice to admit documents or a notice to admit facts (see Clark v Garwood A58/1995 and Boxhall v Mayne 56/1997).
Reliance was also placed on an earlier decision of mine in respect of the same proceedings, ANZ Banking Group Limited v Eddy 115/1997. That decision was given in respect of the first set of interrogatories. However, at that stage, the bank was seeking full details in respect of each of the 380 cheques, ie, at that stage, there had been no discrimination made between those which were allegedly applied to payment of company debts in the normal course of business and those which were used for other purposes. That distinction has now been made and, as a consequence, the issues have been further refined and substantially narrowed.
Although at that stage I determined that the interrogatories should be disallowed en masse, as being oppressive, I have not formed the same opinion in respect of those currently under consideration. I am of opinion that the fact that each cheque has been discovered, that there has been no notice to admit facts relevant to the disputed 89 cheques, and that there has been no notice to admit documents, is not a sufficient basis for depriving ANZ of the answers required. In my opinion, the interrogatories disallowed are not oppressive, prolix or unnecessary and they should, in my opinion, be answered.
I would accordingly allow the appeal, set aside the whole of the order of Underwood J made on 6 September 1999 in each action, and order, in lieu thereof, that the defendants be ordered to answer fully each part of interrogatories 3 and 5 administered on behalf of the appellants on 22 June 1998.
File No FCA 77/1999
FCA 78/1999
AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v
PETER JAMES TONKIN, IAN THOMAS BURGESS,
ELIZABETH ANNE BURGESS, DONALD BRUCE BUCHANAN,
JUDITH AMY BUCHANAN
AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v
CRAIG ASHTON EDDY and SUSAN MARY EDDY
REASONS FOR JUDGMENT FULL COURT
CRAWFORD J 29 February 2000
I agree with Wright J that the appeals should be allowed and that orders should be made in accordance with his reasons.
File No FCA 77/1999
FCA 78/1999
AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v
PETER JAMES TONKIN, IAN THOMAS BURGESS,
ELIZABETH ANNE BURGESS, DONALD BRUCE BUCHANAN,
JUDITH AMY BUCHANAN
AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v
CRAIG ASHTON EDDY and SUSAN MARY EDDY
REASONS FOR JUDGMENT FULL COURT
SLICER J
29 February 2000
I have had the advantage of reading in draft form the reasons for judgment of my brother Wright J. I agree with both his reasoning and conclusion. I would allow the appeal, set aside the orders made and substitute an order that the defendants answer each part of interrogatories 3 and 5.
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