ARCHER and PERMANENT CUSTODIANS LTD - [2011] WASAT 15

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: CONSUMER CREDIT (WESTERN AUSTRALIA) CODE

CITATION: ARCHER and PERMANENT CUSTODIANS LTD [2011] WASAT 15

MEMBER: JUSTICE J A CHANEY (PRESIDENT)

HEARD: 8 SEPTEMBER 2010

DELIVERED : 1 FEBRUARY 2011

FILE NO/S: CC 1178 of 2009

BETWEEN: GREGORY JOHN ARCHER
VANESSA KERAN ARCHER
Applicants
AND
PERMANENT CUSTODIANS LTD
Respondent

Catchwords:

Consumer credit - Judgment against applicants in Supreme Court - Whether doctrine of res judicata applies to prevent continuation of proceedings in Tribunal

Legislation:

Consumer Credit (Western Australia) Code, s 70, s 70(2), s 70(7), s 71
Supreme Court (Court of Appeal) Rules 2005 (WA)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicants: Self-represented
Respondent: Mr BW Ashdown

Solicitors:

Applicants: Self-represented
Respondent: Galilee Solicitors

Case(s) referred to in decision(s):

Archer v Permanent Custodians Ltd
Jackson v Goldsmith [1950] 81 CLR 446
Rogers v The Queen [1994] 181 CLR 251

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The respondent sought dismissal of proceedings brought to re-open a transaction pursuant to s 70 of the Consumer Credit (Western Australia) Code. The loan agreement and mortgage which the applicants sought to reopen had been the subject of a judgment in the Supreme Court in favour of the respondent. For that reason, the respondent contended that the claim in the Tribunal proceedings was barred by operation of the doctrine of res judicata.
The Tribunal examined the history and subject matter of both sets of proceedings and concluded that it was no longer open to the applicants to pursue their claims in the Tribunal.

The application

The respondent, Permanent Custodians Ltd, (Permanent Custodians) applied to have proceedings commenced by the applicants, Gregory John Archer and Vanessa Keran Archer dismissed on the basis that the subject matter of the application is res judicata, or is otherwise an abuse of process. That application was heard together with an application by Mr and Mrs Archer for an injunction restraining Permanent Custodians from enforcing a judgment obtained by Permanent Custodians against them in the Supreme Court of Western Australia. The application for an injunction was dismissed at the conclusion of the hearing for reasons which were given orally. A decision on the application to dismiss the claim was reserved and these reasons relate to that application.

Background to the application

On 5 September 2007 Mr and Mrs Archer submitted an application for a loan to 'Bluestone Mortgages' which is a mortgage manager appointed by Permanent Custodians. The application was for what was described as a 'lo doc loan'. It consisted of some 76 pages including various identification documents, a self certification of income, a valuation report for the proposed security property and various financial statements in relation to the existing mortgage over the property. The security property was to be Mr and Mrs Archer's home at 5 Grove Park Lane, Pinjarra. The value attributed to that property in the attached valuation was $630,000. The loan purpose was shown as refinancing $424,000 and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Archer and Permanent Custodians Ltd [2011] WASAT 15
Case: [2011] WASAT 15
Decision Date: 1 FEBRUARY 2011

CaseChat Overview and Summary

The case involves Mr and Mrs Archer, who appealed a decision of the Supreme Court of Western Australia to the Court of Appeal. The Archers sought to set aside a loan agreement and mortgage taken out with Permanent Custodians Ltd. The primary issue was whether the doctrine of res judicata applied to prevent the Archers from continuing their proceedings in the State Administrative Tribunal (SAT) after a judgment had been made against them in the Supreme Court. The Archers argued that the loan agreement and mortgage were unjust under the Credit Code because they did not have the capacity to repay the loan, and that the lender should have been aware of this.

The Court of Appeal considered the grounds of appeal, which included claims that the loan agreement and mortgage were unjust and that the loan was made in contravention of the Credit Code. The Court concluded that the Archers had failed to provide evidence to support these claims, and that the grounds of appeal were defective. The Court emphasised that the Archers had not provided any explanation for their failure to adduce evidence in the Supreme Court proceedings, and that they had not pursued their application to adduce additional evidence in the appeal. The Court found that the Archers had not provided any explanation for their failure to adduce evidence in the Supreme Court proceedings, and that they had not pursued their application to adduce additional evidence in the appeal. The Court held that there was no substance in the Archers' claims, and that the appeal should be dismissed.

The final orders of the Court of Appeal were that the appeal be dismissed, and that the Archers pay Permanent Custodians Ltd's costs of the appeal.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

JUSTICE J

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Ratio Decidendi

Legal Principle Established

Established by: JUSTICE J

On 29 March 2010, Mr and Mrs Archer's solicitor, Ms Horwood lodged an application in the appeal seeking a stay of the order for possession and seeking leave to adduce evidence not previously before the Master. That application was listed for hearing on 28 May 2010. On 24 May 2010, the Court of Appeal Registrar issued a notice to attend to consider the application for a stay and to adduce additional evidence, and in addition requiring Mr and Mrs Archer to show cause why the appeal should not be dismissed because of a failure by the appellants to obey an order made under the Supreme Court (Court of Appeal) Rules 2005 (WA), or because none of the grounds of appeal have a reasonable prospect of success. The Court of Appeal considered that there was no substance in para 1(a), 1(b) or 1(e) of the grounds. It concluded that, as to grounds 1(c) and (d), there was no evidence before the Master upon which it could have been found that the loan agreement or mortgage was liable to be set aside by SAT, and that the grounds as expressed were plainly defective in form. Their Honours identified the real question as being whether the appellants should be given a further opportunity to adduce additional evidence to support an arguable case that the loan agreement and mortgage were unjust within the meaning s 70 of the Credit Code and are liable to be set aside under s 71. The Court said at [24] - [27]:24The only explanation of the factual basis of the appellant's claim in SAT is set out in the affidavit of Mr Archer, sworn and filed on 29 March 2010, which accompanied the application for a stay of the judgment. In that affidavit, Mr Archer refers to the application the appellants have lodged at SAT and says that:'[A]t the time the [respondent] or there [sic] agents or assigns advanced the money it should have been obvious that the [appellants] did not have the capacity to repay the loan and the [respondent] or their agents or assigns have breached the Code by advancing monies to me and taking a security over my property in those circumstances.'25In addition, annexed to Mr Archer's affidavit of 21 April 2010, among other things, is a copy of a document entitled "Statement of Issues, Facts and Contentions" which the appellants have filed and served in the SAT proceedings. The document was also annexed to Mr Archer's affidavit of 17 November 2009 in the summary judgment proceedings. In neither affidavit does Mr Archer depose to the truth of the statements made in that document.26Putting aside questions of admissibility, it therefore appears, as in McLean v Westpac Banking Corporation, the appellants contend that at the time it was entered into the loan agreement was unjust because the respondent knew, or ought to have known, that the appellants did not have the financial capacity to make the loan repayments. That in turn seems to rest on the proposition that a lender is under a duty to satisfy itself of the capacity of a borrower to repay a loan before making the loan. We were not referred to any provision of the Act or Code (or any other relevant legislative provision) which imposes such a duty. What appears from s 70(2)(l) of the Code is that whether the lender knew or could reasonably have ascertained that the borrower could not pay in accordance with the terms of the loan is a factor that SAT may take into account in determining whether, in all the circumstances, a transaction was unjust.27The case the appellants seek to advance depends upon evidence which was not before the master. No explanation has been provided for the failure to adduce that evidence. In that connection, it is significant that at that stage the appellants had legal representation. Nor has any explanation been provided for the failure to pursue the application to adduce further evidence, although that application is clearly critical to the appeal. It has made no progress since it was filed, unsupported by an affidavit, on 29 March 2010. Despite the order of 19 April 2010 that the appellants file and serve any affidavits in support of the application by 30 April 2010, no such affidavit has been filed. The evidence upon which the appellants seek to rely remains unidentified.