Australia and New Zealand Banking Group Limited v Ashcroft

[2021] QSC 293

SUPREME COURT OF QUEENSLAND

CITATION:

Australia and New Zealand Banking Group Limited v Ashcroft & Ors [2021] QSC 293

PARTIES:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522

(applicant)

v
CAROLYN ANN ASHCROFT
(first respondent)
PLATINUM SUCCESS PTY LTD ACN 128 629 283
(second respondent)
ROSS IAN ASHCROFT

(third respondent)

FILE NO/S:

BS No 1061 of 2021

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

15 November 2021

DELIVERED AT:

Brisbane

HEARING DATE:

23 July 2021

JUDGE:

Martin J

ORDER:

1.   The application to further amend the Amended Originating Application is allowed.

2.   I will hear the parties on further orders and costs.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – GENERALLY – where the applicant seeks leave to further amend its amended originating application – where the applicant seeks to plead a claim for relief by way of declaration in respect of a mortgage – whether the applicant should be granted leave to further amend its amended originating application

Property Law Act 1974, s 228

Uniform Civil Procedure Rules 1999, r 444

COUNSEL:

KA Gothard for the applicant
P Roney QC for the first and second respondents

Third respondent appeared for himself

SOLICITORS:

Gadens for the applicant

Stone Group for the first and second respondents

1. The applicant, Australia and New Zealand Banking Group Limited (“ANZ”), seeks leave to further amend its Amended Originating Application filed on 29 January 2021.

2. The action arises out of a series of self-inflicted injuries suffered by ANZ, which have been exacerbated by the clumsiness of its attempts to stanch those wounds.

   A brief history

3. In 2008, Ms Ashcroft granted a mortgage (“the first mortgage”) over her property at Norman Park to ANZ to secure the loan which the ANZ had extended to her in the sum of $270,000. Later that year, ANZ provided a further loan to Ms Ashcroft in the sum of about $700,000. The loan secured by the first mortgage was repaid by the second loan which, in turn, was secured by another mortgage (“the second mortgage”).

4. In 2012, the terms of the loan were altered to reflect the extension of further credit by ANZ.

5. In 2014, another mortgage was registered on the title in favour of the second defendant (“the Platinum mortgage”).

6. In 2017, after some negotiations, the ANZ loan was changed from a residential investment loan to a home loan (“the 2017 loan agreement”). The loan secured by the first mortgage had been discharged by the loan secured by the second mortgage, and Ms Ashcroft sought to have that first mortgage released.

7. In September 2017, ANZ issued internal settlement instructions to effect the release of the first mortgage only. Contrary to that instruction, and due to some error for which Ms Ashcroft carries no blame, ANZ lodged a release of both the first and the second mortgages. Those releases were registered.

8. In 2018, Ms Ashcroft informed ANZ that “it appeared there was no registered document on the title” to the Norman Park property. ANZ responded by placing a caveat on the title to the property. Soon after that, ANZ asked Ms Ashcroft to execute a new mortgage. She did not and has not done so since.

9. ANZ took no action with respect to the caveat, and, as a result, it lapsed in March 2018. It was removed from the title in August 2019. Before it was removed, the third defendant (Mr Ashcroft) executed, and Ms Ashcroft lodged a mortgage in favour of Mr Ashcroft securing the sum of $70,000 (“the Ashcroft mortgage”).

10. This proceeding was commenced by way of Originating Application in which a number of orders were sought, including:

    (a)a declaration that the property is subject to an equitable mortgage in favour of ANZ,

    (b)a declaration that the equitable mortgage secures payment by Ms Ashcroft of all monies owing to the ANZ under the 2017 loan agreement, and

    (c)an order that Ms Ashcroft execute a mortgage here in the same terms as those contained in the second mortgage.

    What orders have been made?

11. This matter has been placed on the Supervised Case List, and orders have been made for the conduct of the matter.

12. On 14 May 2021, Boddice J ordered that, by 21 May 2021, the ANZ:

    (a)was to serve any proposed Amended Statement of Claim on the defendants, and

    (b)provide a full response to the First and Second Defendant’s request for particulars and r 444 of the UCPR letters to the extent that they had not been addressed in the proposed Amended Statement of Claim.

13. There was no order requiring ANZ to file the proposed Amended Statement of Claim. Yet, it did so. The purpose of the order made by Boddice J was to allow the defendants to see the proposed amendments and to make any objection to them so that ANZ might deal with them before any amended pleading was filed. That is a fairly common order and one which conduces to greater efficiency. That, though, apparently did not appeal to ANZ.

14. On 18 June 2021, Boddice J ordered that ANZ file and serve any application for leave to bring claims other than those in the Amended Originating Application and, if necessary, for leave to amend the statement of claim in the proposed form served by ANZ on 21 May 2021. A further order was made repeating the order made on 14 May 2021 about a provision of a response to the request for particulars, et cetera.

    What does the applicant seek to plead?

15. The amendment sought by ANZ is a claim for relief by way of a declaration in respect of the Ashcroft mortgage under s 228 of the Property Law Act 1974. That section provides:

    “Voluntary conveyances to defraud creditors voidable

    (1)    Subject to this section, every alienation of property, made whether before or after the commencement of this Act, with intent to defraud creditors, shall be voidable, at the instance of any person prejudiced by the alienation of property.

    (2)This section does not affect the law of bankruptcy for the time being in force.

    (3)This section does not extend to any estate or interest in property conveyed for valuable consideration and in good faith to any person not having, at the time of the conveyance, notice of the intent to defraud creditors.”

16. In the Amended Statement of Claim, ANZ seeks a declaration that the Ashcroft mortgage was an alienation of property made by Ms Ashcroft with the intention of defrauding creditors.

17. In order to support that, ANZ seeks to plead that Mr Ashcroft is a “relative” of Ms Ashcroft within the meaning of that term as defined in the Corporations Act 2001and that Mr Ashcroft is a “related entity” of Platinum Success within the meaning of that term as defined in the Corporations Act. These are bold and adventurous pleadings but entirely misconceived. The meaning that “relative” has for the purposes of the Corporations Act is irrelevant to these proceedings.

18. There are other matters in the Amended Statement of Claim which deserve attention:

    (a)there is a pleading of an estoppel against claiming priority in the absence of a defence claiming priority for Platinum mortgage when there is no such pleaded claim,

    (b)there is a pleading that Platinum does not have the benefit of indefeasibility when there is no such pleaded claim, and

    (c)a claim that it would be unconscionable for Platinum to assert priority et cetera when it has not yet pleaded anything.

19. These may just be examples of a plaintiff wanting to get its retaliation in first, but to leave a pleading in that state will only lead to further confusion.

    What should be done?

20. The applicant was not in a position at the hearing to deal with the pleading points raised on behalf of the first and second respondents.  A cursory examination of the Amended Statement of Claim, which was filed notwithstanding the orders which had been made, reveals a number of defects – many of which were identified in the submissions of Mr Roney QC – which need to be remedied.

21. Mr Chatsworth made a number of complaints about the pleadings, and some of them had a considerable weight. However, in the absence of a formal application and the appropriate notice being given to strike out the Amended Statement of Claim, I do not propose to deal with it on this application.

22. The application to further amend the Amended Originating Application is allowed. But, ANZ will have to revisit its pleading and thoroughly renovate it. Subject to any further submissions, I will make an order that ANZ serve upon the other parties a further amended statement of claim but that any such document not be filed until any objections the other parties might have to it have been dealt with upon a properly formulated application.

23. I will hear the parties on costs.