Australia and New Zealand Banking Group Limited v Jeff Manny (No 2)
[2013] ACTSC 143
•26 July 2013
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED v JEFF MANNY & ORS (No 2)
[2013] ACTSC 143 (26 July 2013)
MORTGAGE – mortgage on the defendant’s property as security for home loan and investment loan – defendant failed to make repayments on home loan amounting to a default event – notice of default event given to defendant – defendant failed to remedy the default within 30 days of notice – mortgage agreement entitling plaintiff to take possession of the property in the event of a default where defendant has not remedied the default within 30 days – conditions met – plaintiff entitled to possession
Court Procedures Rules 2006 (ACT), rr 471, 1145, 1146, 1147
Land Titles Act1925 (ACT), s 93(2)(a)
Australia and New Zealand Banking Group v Manny [2013] ACTSC 116
Citibank Savings Ltd v Stergiou (1996) 66 FCR 587
Galovac Pty Ltd v Australian Capital Territory [2010] ACTSC 132
Kevern v Marshall [2012] ACTSC 9
No. SC 746 of 2011
Judge: Master Mossop
Supreme Court of the ACT
Date: 26 July 2013
IN THE SUPREME COURT OF THE )
) No. SC 746 of 2011
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN: AUSTRALIA & NEW
ZEALAND BANKING
GROUP LIMITED
Plaintiff
AND: JEFF MANNY
Defendant
AND:ANTHONY SIMS and STEPHEN PARBERY
First Defendant to counterclaim
AND:SHANE O’KEEFE and MURRAY SMITH
Second Defendant to counterclaim
ORDER
Judge: Master Mossop
Date: 26 July 2013
Place: Canberra
THE COURT ORDERS THAT:
There be judgment for the plaintiff for possession of the land being Section 10, Block 45 on Deposited Plan 3404 Flynn, contained in certificate of title Volume 647, Folio 1, and known as 42 Barber Crescent Flynn in the Australian Capital Territory.
The counterclaim brought by the defendant be heard separately from the hearing of the proceedings brought by the plaintiff.
The counterclaim filed on 7 February 2013 be struck out.
The defendant is not permitted to file any additional pleading for his counterclaim without the leave of the Court.
Any application for leave to file a further pleading for the counterclaim be filed and served within 28 days of the publication of these reasons and that any such application annex a copy of the proposed pleading.
If any proposed pleading for the counterclaim requires or results in the joinder of additional parties to the proceedings then any application to join those parties be heard at the same time as the application for leave to file the proposed pleading and the application for leave to file the pleading be served on any proposed new party to the proceedings.
The defendant is to pay the plaintiff’s costs of the application in proceeding dated 30 November 2012 and the amended application in proceeding dated 27 June 2013.
The plaintiff, Australia and New Zealand Banking Group Ltd (“ANZ”) has brought proceedings to recover possession of property that was mortgaged by the defendant, Mr Jeff Manny, as security for two loans. It has also claimed a monetary sum which it alleges to be owing pursuant to the loan agreements. ANZ has applied by application dated 30 November 2012 for summary judgment on its claim pursuant to r 1145 of the Court Procedures Rules 2006 (ACT). The application should be under r 1146 as r 1145 is merely introductory to Division 2.11.5 of the Court Procedures Rules. ANZ has also applied pursuant to r 1147 for summary judgment in relation to the defendant’s counterclaim against it. An amended application was filed on 27 June 2013 to bring this aspect of the application up to date having regard to the filing of an Amended Defence and Counterclaim on 7 February 2013. ANZ also submits that if summary judgment is not granted in its favour on the counterclaim then the Court should exercise the power under r 1147(3) to make “any other order it considers appropriate” by striking out the pleadings on the counterclaim and ordering that any proceedings on the defendant’s counterclaim be heard separately from the claim made by the ANZ.
Rule 1146 provides that the plaintiff may, at any time after a defendant files a notice of intention to respond or defence, apply to the Court for summary judgment. The Court may give judgment for the plaintiff against the defendant for all or a part of the plaintiff’s claim for relief unless satisfied that the defendant has disclosed a good defence to the claim for relief on the merits or sufficient facts are disclosed to entitle the defendant to defend the claim for relief generally.
In relation to applications for summary judgment by a plaintiff Master Harper summarised the approach to be applied in Kevern v Marshall [2012] ACTSC 9 at [30]:
The court, on the basis of affidavit evidence, may give judgment for the plaintiff if satisfied that there is no triable issue or that there is no need for a trial. Summary judgment is given sparingly, in accordance with the High Court’s pronouncement in Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99 that summary judgment should be given with great care and only where it is clear that there is no need for a trial. Once it appears to the court that there is an issue of fact or law that deserves full consideration, the court will decline to give summary judgment and will direct the parties to proceed to trial.
In relation to applications for summary judgment by a defendant the principles to be applied on such an application are usefully summarised by Justice Jagot in Galovac Pty Ltd v Australian Capital Territory [2010] ACTSC 132 at [5].
The claim of the plaintiff is for possession of property that was subject to a mortgage. A claim for summary judgment for a particular sum which was alleged to be owing, namely $516,524.40, was not pressed by the ANZ at this stage. As a consequence, so far as the plaintiff's claim was concerned, summary judgment was only sought in relation to that part of the claim seeking possession of the property.
Mr Manny entered into two loan agreements with the plaintiff. One was a “Home Loan” for a total amount of $350,000. The other was a “Residential Investment Loan” for a total of $80,000. I will refer to these as the Home Loan and Investment Loan respectively. The purpose of the Home Loan was to refinance a loan previously obtained from the National Australia Bank. The security for that loan was a mortgage over the property of which possession is sought namely 42 Barber Crescent in Flynn. The letter of offer which was ultimately signed and became part of the loan agreement was signed by Mr Manny on 13 November 2008 (“Home Loan Letter of Offer”). The Investment Loan was secured by mortgages over two properties, namely, the Barber Crescent property and a property at 37 Krichauff Street in Page. The mortgage over the Krichauff Street property was subsequently discharged and is not relevant to the current proceedings. The letter of offer for this loan was signed by Mr Manny on 7 January 2009 (“Investment Loan Letter of Offer”).
Both loans incorporated the terms and conditions set out in a booklet entitled “Consumer Lending Terms and Conditions, Version 8, May 2008” (“the Conditions”). That booklet contained a summary table identifying which of the conditions contained in the booklet applied to the different types of home loans to which the booklet applied. In relation to the Home Loan and the Investment Loan the table indicated that the “General Conditions” applied as well as the “Specific Conditions (A)” but not the “Specific Conditions (B)”. Any conditions referred to below are in either the General Conditions or Specific Conditions (A) unless stated otherwise. The booklet also contained an “Information Statement” said to be provided pursuant to the Consumer Credit Code which applied if the loans were regulated by the Code. The Home Loan was regulated by the Consumer Credit Code. The Investment Loan was not, the Investment Loan Letter of Offer providing “this loan is not regulated by the Consumer Credit Code”.
Clause 32 of the Conditions defined “event of default” by reference to the definition of that term in clause 10. Clause 10 of the Conditions provided in relation to the Home Loan (regulated by the Consumer Credit Code) that:
An event of default occurs:
· if you do not make a payment by its due date
Clause 10 provided in relation to the Investment Loan that:
An event of default occurs:
· if you fail to make any agreed payment by the due date; or
· if there is any breach of any term or condition of this loan or facility, any other facility provided to you by ANZ, or any security provided to ANZ for this loan or facility or the other facility.
The mortgage over the Flynn property which is said to give rise to an entitlement to possession is dated 13 November 2008 (“the Mortgage”). The Mortgage has different provisions depending upon whether or not the loan agreement entitling the ANZ to a mortgage is one which is governed by consumer credit law or not. One that is governed by the consumer credit law is referred to as a “Regulated Arrangement” and one that is not is described as a “Unregulated Arrangement”. The money secured by the Mortgage is described in the definition of “Secured Money” in clause 2.2. Under that clause Secured Money includes, in relation to Regulated Arrangements, all amounts that the defendant is required to pay under the Regulated Arrangement and “Enforcement Expenses”. That term is defined in clause 11.1 but it is not necessary for present purposes to set it out. In relation to Unregulated Arrangements, Secured Money means all money owing to ANZ under Unregulated Arrangements. It also includes amounts payable under clause 9 which includes an obligation to reimburse ANZ for certain enforcement expenses.
“Default Events” are defined in clause 7.1 of the Mortgage. That provides in relation to Regulated Arrangements that each of the following is a Default Event:
(i) I do not pay any part of the Secured Money payable under the Regulated Arrangement on time.
(ii) I breach or a default occurs under any other provision of the Regulated Arrangement or this Mortgage.
The consequences of a Default Event are set out in clause 7.2. That provides, in relation to Regulated Arrangements:
(a) Regulated Arrangements
If the following conditions are satisfied in relation to a Regulated Arrangement:
(i) a Default Event, as defined in clause 7.1(a) has occurred and is continuing;
(ii) ANZ notifies me in writing of the Default Event; and
(iii) the Default Event continues for at least 30 days after service of the notice or for such longer period (if any) specified in that Regulated Arrangement, then ANZ may:
(A) require me to pay to ANZ immediately all Secured Money in relation to the Regulated Arrangement; and/or
(B) do anything specified in clause 7.3.
In relation to Unregulated Arrangements each of the following is a Default Event:
(A) I do not pay any part of the Secured Money on time.
(B) I breach or a default occurs under any other provision of an Unregulated Arrangement or this Mortgage.
If a Default Event has occurred and is continuing ANZ may require repayment of Secured Money in relation to all Unregulated Arrangements immediately or do anything specified in clause 7.3: see clause 7.2 (b).
Clause 7.3, which is referred to in clause 7.2(a)(iii)(B) and 7.2(b)(ii), provides:
7.3 Enforcement powers
Subject to any laws which cannot be excluded, ANZ and each ANZ appointee may either immediately or later, even if ANZ has accepted money or negotiated with me after a Default Event, do any or all of the following if clause 7.2(a) or (b) says it may.
(a) Take possession and withdraw from possession of any of the Property once or more than once.
…
(c) Sell or lease the Property in one or more lots or with other property on terms acceptable to ANZ.
…
If the Property is sold in accordance with this clause, and the amount realised on enforcement of the Mortgage is not enough to pay all the Secured Money, I will still be liable to pay to ANZ the amount of the shortfall.
The point to note at this stage is that in relation to the Home Loan a failure to make a payment by its due date is a breach of that agreement. Such a failure is a Default Event under clause 7.1(a) of the Mortgage. Upon such a Default Event occurring and continuing then, subject to the notice requirements set out in clause 7.2(a), the ANZ has power to take possession of the property under clause 7.3.
In relation to the Investment Loan the point to note at this stage is that a breach occurs under clause 10 if there is any breach of a term or condition of any other facility provided by ANZ and that under the Mortgage a Default Event occurs if there is a breach or default under any other provision of the Investment Loan: see clause 7.1(b). Where a Default Event occurs then the ANZ has power under clause 7.2 (b) and 7.3(a) to take possession of the property.
The Home Loan Letter of Offer provided that the repayments that were required were “359 monthly repayments of principal and interest of $2477.14 each. Followed by one final repayment of $2398.81”. The payments were required to be made monthly. That repayment amount was subject to variation if interest rates changed. Clauses 2 and 19 of the Conditions and Home Loan Letter of Offer permitted the ANZ to vary the interest rate applicable to the loan and to vary the monthly repayment amount.
The Home Loan was drawn down on 21 November 2008. At that date the interest rate had reduced as had the minimum monthly repayment. On 12 December 2008 and 13 February 2009 the interest rate fell further, reducing the minimum monthly repayment accordingly. Although on some occasions the monthly payment was not made, the loan remained paid in advance until 21 January 2011. No payment was made on 21 January 2011, 21 February 2011 or on 21 March 2011 although on 24 March a catch up payment was made so that there was no longer, as at 21 April 2011 any amount identified as being overdue. The payment due on 21 May 2011 of $2,336.69 was not made. The payment due on 21 June 2011 was not made. On 7 July 2011 a payment of $10,973.86 was made which meant that payments were some $1,627 in advance. That amount was a transfer from the Investment Loan account but for reasons which are unexplained in evidence that loan payment was reversed on 18 August 2011 with effect from 18 July 2011 and the money recredited to the Investment Loan’s account. That meant that when the statement was issued on 19 August 2011 the position was that the account was in arrears by $9,346.76. The statement did not indicate that the next payment was due on 21 August 2011 but instead stated that it was a month later on 21 September 2011.
On 2 September 2011 the solicitors for ANZ wrote to Mr Manny enclosing by way of service a default notice and notice pursuant to s 93(2)(a) of the Land Titles Act1925 (ACT). The “Notice of Default” was dated 2 September 2011. It stated that it was issued pursuant to s 88 of the National Credit Code and s 93(2)(a) of the Land Titles Act 1925. It identified the defaults under the loan agreements and the Mortgage as:
a. in relation to the Home Loan “Repayment arrears as 2 September 2011 $11,683.45” [sic];
b. in relation to the Investment Loan “Default by virtue of related facility particularised above”.
It also included “Enforcement Expenses” of $990.55.
It asserted that Mr Manny was obliged to pay the total of these amounts namely $12,674.00 in order to rectify his default no later than 9 October 2011. The notice indicated that if this amount was not paid by 9 October 2011 then the whole of the amount required to pay out the loans would become immediately due and payable and that ANZ may commence enforcement proceedings in relation to the default and, if relevant, repossession of the mortgaged property. It indicated that ANZ proposed to exercise a power of sale in relation to the property and that it may exercise all or any of the other rights under the loan agreements, the Mortgage or at law. A form required by the National Credit Code providing information about a debtor’s rights after default was also included with the notice.
The notice was sent by express post to Mr Manny at the 42 Barber Crescent, Flynn address.
It is clear that Mr Manny received the notice since he had a conversation on 9 September 2011 with Shey McBride, a collections officer at the ANZ's solicitors in which he enquired about what he needed to do in relation to the statutory notice. She directed him to communicate with another collections officer, David Brassington. On 19 September 2011 Mr Brassington received an e-mail from Mr Manny. That e-mail contained as a text file a copy of the terms of the default notice. Although the format of the file as returned electronically to Mr Brassington when printed out is very different to that in which it was sent and is difficult to read, it does demonstrate that Mr Manny had received the notice. Mr Manny’s email included “therefore I request you that postponed the schedule installment payment of my mortgage until such a time either I gain an employment or some of money from the ANZ bank comes back to me” [sic].
After the date of the notice, Mr Manny made no other payments in relation to the loans.
I am satisfied that the failure by Mr Manny to make the minimum payments required on 21 May and 21 June 2011 were Default Events in that he did not pay a part of the Secured Money payable under the Home Loan on time: Mortgage clause 7.1(a)(i). As a consequence, subject to compliance with the notice requirements in clause 7.2(a) of the Mortgage, the ANZ was entitled to exercise its enforcement powers under clause 7.3 of the Mortgage. That entitlement included an entitlement to take possession of the property.
Although the notice given to Mr Manny was a notice identified as being pursuant to s 93 of the Land Titles Act 1925 (ACT), compliance with s 93 is not a precondition to the ANZ obtaining possession of the property as opposed to selling it. In Citibank Savings Ltd v Stergiou (1996) 66 FCR 587 a Full Court of the Federal Court held that s 93 was a precondition to the exercise of a power of sale but was not a precondition to the exercise of the power under s 96 of the Act to bring an action for possession of the property. As a consequence, subject to the terms of the mortgage, it was not necessary to demonstrate that, as at the date of the notice, the default in question had been continuing “for the space of 1 month” as required by s 93(2). Thus, compliance with s 93 is not a precondition to the ANZ succeeding in the present case.
However, clause 7.2 (a) of the mortgage required:
a) a Default Event to have occurred; and
b) that the Default Event was continuing; and
c) that ANZ had notified Mr Manny in writing of the Default Event; and
d) the Default Event to have continued for at least 30 days after service of the notice or such longer period identified in the loan agreement.
Clause 10 of the Conditions provided that before requiring repayment in full the ANZ would give the customer 30 days written notice to allow an opportunity to remedy the default. The evidence establishes that Mr Manny failed to remedy the default within the 30 day period from the date of receipt of the 2 September 2011 notice.
Mr Manny put forward a number of arguments in response to the ANZ's claim for summary judgment.
He submitted that the letter accompanying the notice given on to September 2011 was misleading because it referred to the “Credit Amounts” as being $350,000 and $80,000 respectively because the two loan accounts were not drawn to that extent at that time. I don't accept that submission. There was no evidence that Mr Manny was in fact misled and in my view having regard to the terms of the letter, read in the context of the loan agreements, there was no prospect that Mr Manny was misled.
He also pointed to the bank statements which indicated that as at 22 August 2011 the home loan account balance was $349,189.94. The next entry was on 8 September 2011 and it was that entry which led to the balance of the account exceeding $350,000. He submitted that the Home Loan account was not over its limit of $350,000 on 2 September 2011. He then pointed to the balance of the Investment Loan account which at 2 September 2011 had a balance of just over $69,000. He submitted that the balances of the two loan accounts could be combined and that, taken together, the loan balances did not exceed the aggregate amount of credit that was available under the loans. He submitted that this meant that there was no default. I do not accept the submission. The issue is not whether Mr Manny defaulted by exceeding the overall credit that was available under the Home Loan or under both loans but rather whether he had defaulted in failing to make repayments required by the Home Loan and that the default was, as at 2 September 2011, continuing. Therefore it is not an answer to the plaintiff's claim to assert that the overall amount of credit as at 2 September 2011 was less than the amount of credit originally permitted to be given under the loans.
Mr Manny also submitted that he had an ANZ credit card with which he could have paid the $112 or so by which the Home Loan exceeded $350,000 on 8 September 2011 except for the fact that a transfer to that credit card of $10,000 from a St George account in the name of JK3L Pty Ltd was reversed by ANZ. That was a payment made shortly after receivers were appointed to take control of the property of JK3L Pty Ltd. Mr Manny submitted that the ANZ was obliged to write to him so that he could authorise the reversal of the payment. He did not point to any contractual or other basis for such an obligation. I am not satisfied that there was one. In any event, Mr Manny's submission is based on the misconception that he could have avoided a default by merely paying the amount by which the Home Loan account exceeded $350,000. That was not the case. The argument treats the Home Loan as if it was an overdraft account. Whilst there was some capacity to redraw amounts from the Home Loan account, that capacity was subject to conditions including that “there has not been any event of default during your loan term”, a condition which was clearly not satisfied in relation to the Home Loan.
Mr Manny also submitted that it was not open to the ANZ to obtain possession of the property in circumstances where it was not also seeking summary judgment for a specific amount. He submitted that the ANZ needed to prove the exact amount owing pursuant to the Home Loan agreement. I do not accept that is the case. Rule 1146 of the Court Procedures Rules permits the Court to give judgment for the plaintiff against the defendant for “all or part of the plaintiff's claim for relief”. That power permits judgment to be given for possession in circumstances where the conditions precedent under the mortgage have been satisfied. In my view that involves proving that there was a default, that the default was continuing at the time that the notice under clause 7.2 of the Mortgage was issued, that the default was not rectified within the 30 day period and that there remains an amount owing pursuant to the loan agreement. Plainly enough possession would not be granted if this last stated condition was not satisfied. In the present case, whilst Mr Manny disputes, for a reason which I will explain in a moment, the overall amount owing, he admits in his affidavit of 10 May 2013 a total debt under the Home Loan as at 21 May 2013 of $392,955.91 and a total debt as at May 2013 on the Investment Loan of $77,004.40. That leaves a total admitted indebtedness as at 21 May 2013 of “around” $469,960.30. Similarly, his affidavit of 26 June 2013 admits the total amount owing as at 12 June 2013 is approximately $471,617.77. The evidence discloses that no payments have been made since either of these dates and hence the level of indebtedness is at least that admitted by Mr Manny. Therefore in my view it is open to grant summary judgment for possession of the property which was security on the two loans notwithstanding that there is presently no application for summary judgment for a specific monetary amount.
The dispute that Mr Manny has concerning the amount owing under the loan agreements is in relation to the addition of enforcement expenses to the amount of the loans. Mr Manny asserts that the preconditions for charging enforcement expenses to his account have not been met. Clause 11 of the Conditions provides “if you breach this loan or facility or any security required under it, you will be required to pay expenses reasonably incurred by ANZ in enforcing or preserving its rights under this loan or facility, or the security. … Enforcement expenses resulting may be debited in the same way as other fees and charges.” Mr Manny submits that there has been no court order determining that he has defaulted on his loan and hence the ANZ was not entitled to charge enforcement expenses. In my view clause 11 does not require there to be a judgment of a court prior to the debiting of enforcement expenses. In any event, any attempt to recover those enforcement expenses by judgment will, if the breach of the loan is disputed, involve determining whether or not such a breach has occurred. In the present case I have found that a breach has occurred. Mr Manny also submitted that there was no evidence backing up the claimed entitlement to enforcement expenses. It is not necessary for present purposes to assess whether or not the other conditions in clause 11 have been satisfied so as to permit the ANZ to recover the disputed enforcement expenses. It is sufficient to note, as I have above, that there remains a very substantial amount admitted to be owing under the two loan agreements.
Mr Manny referred at some length to the hardship application which he submitted by email to Mr Brassington on 19 September 2011 following the giving of notice on 2 September 2011. The evidence was that there was no response to this application. He referred to documents printed from the ANZ’s website in 2013 relating to dispute resolution and the bank's “Customer Advocate”. He said that he thought there was a “safety net”. His submissions were to the effect that he thought the bank could not take him to court because of the availability of these dispute resolution mechanisms. His submissions were that he had no understanding of the conditions of the loan or the mortgage in so far as they would permit ANZ to enforce its security under those instruments. These submissions appeared to me to be inconsistent with the terms of the loan agreement and were not supported by any evidence. He also submitted that the ANZ could have given him a payment holiday or changed the terms of the loan to an interest only loan.
In my view these submissions do not provide a reasonably arguable basis for defeating the plaintiff's claim to possession. Nothing in the letters of offer or Conditions prevents the ANZ from exercising its rights under the security documentation. The Information Statement included at the end of the Conditions in accordance with the Consumer Credit Code makes it clear that the ANZ can take action against the borrower if the borrower is in default under the contract. There is no evidence of any application being made to the bank’s Customer Advocate or the Financial Ombudsman Service. There was, at the time, no prohibition on the ANZ commencing proceedings for recovery of possession prior to providing a response to Mr Manny’s hardship application (although now see s 89A of the National Credit Code inserted with effect from 1 March 2013).
In his amended defence the defendant pleads that he is not liable to pay the monies under the two loan agreements because he gave instructions for the ANZ and the receivers to pay the amounts owing under those agreements: see paragraphs 7(a), 16, 21, 22. He refers in particular to an email to the receivers and the ANZ on 24 May 2011 requesting them to use the proceeds of the sale of one of Lonagann Pty Ltd’s properties to discharge the loans that are the subject of these proceedings. There was also an email dated 25 May 2011 to similar effect. Having regard to the fact that the Lonagann property was not security in relation to the Home Loan or the Investment Loan and no contractual or other basis for such an instruction was established, it is understandable that this instruction was not acted upon by the ANZ or the receivers and such an instruction does not provide a defence to the claim for possession.
The balance of Mr Manny submissions, as I understood them, were principally directed to whether or not there might be a cause of action underlying his defective pleadings on the counterclaim. Notwithstanding that I understood that they related to the counterclaim I did consider whether they might have given rise to a defence to the claim for possession but was satisfied that they did not. I will deal with them later in these reasons.
As a consequence none of the matters raised by Mr Manny provides an arguable basis for defeating the plaintiff's claim for possession. In my view it is appropriate, bearing in mind the stringent test, to grant the ANZ’s application for summary judgment for possession.
The ANZ also submitted that the counterclaim should be dismissed or that, in the alternative, the pleadings should be struck out. It also submitted that if the counterclaim was struck out then an order should be made separating the counterclaim proceedings from the proceedings brought by the plaintiff.
The defects in the counterclaim are similar to the defects which led me to strike out the counterclaim in so far as it related to the receivers and administrators which I dealt with in my earlier interlocutory decision: see Australia and New Zealand Banking Group v Manny [2013] ACTSC 116. In summary, the pleadings fail to comply with the rules of pleading in that they fail to identify material facts which constitute a cause of action or are so unintelligible, ambiguous, vague or imprecise as to be embarrassing in the sense of likely to cause delay to the proceedings. Further, the connection between the various assertions in the paragraphs that relate to ANZ fail to identify either expressly or impliedly the link between them and the various claims for relief which are stated.
Mr Manny made substantial submissions directed to the merits of his counterclaim against the ANZ.
(a) He claimed to be entitled to “around $5 million” in wages or director’s remuneration from companies which he previously controlled. This claim was based on various invoices which were in evidence. These were invoices dated 13 March 2013 to JK3L Pty Ltd for $1.3 million for remuneration for periods in 2003-2004, 2006-2007 and 2009-2010, to Lonagann Pty Ltd for $800,000 for periods in 2004-2005 and 2006-2007 and to Jeff Manny Constructions Pty Ltd for $800,000 for periods in 2005-2006, 2008-2009. There was also another set of invoices to “Jeff Manny Group” dated various dates between 2004 and 2009 for a total of $2.4 million. Apart from the invoices, the basis for these claims, particularly in terms of any resolution of the companies or any contract, was not disclosed.
(b) He said that he could have refinanced loans owed by his various companies to the ANZ had he been allowed two weeks. He referred to an offer made by the Bank of Queensland dated 28 July 2010.
(c) He asserted that the sale of property by the receivers was at an undervalue.
(d) He submitted that a reversal of a credit of $10,000 on his personal visa card on 28 March 2011 was unlawful. That credit had arisen because of BPAY transfer from an account of JK3L Pty Ltd to Mr Manny’s Visa card. It was made at a time when a receiver had been appointed in relation to the assets of JK3L Pty Ltd. Mr Manny submitted that because he had spent money on behalf of one or other of his companies on that card he was entitled to the payment.
(e) He submitted that the receivers should have paid for services that he or Landagency Pty Ltd provided. The details of those services were not clear, nor was the contractual or other basis for the claims.
(f) He made a complaint about the sacking of Landagency as a property manager for properties which the receivers had taken control of.
None of these arguments demonstrated to me a clear cause of action. However, I am not satisfied at this stage that I should dismiss the counterclaim proceedings since I cannot be confident to the relevant degree that the plaintiff has no arguable cause of action amongst the numerous allegations that are made or amongst the volumes of material which has been tendered. At this stage I think it is unlikely that there is a viable cause of action but, in my view Mr Manny, given that he is unrepresented, should be given a further opportunity to attempt to articulate one.
The order that I will make is one that will require Mr Manny to obtain the Court’s leave to file any further counterclaim and that any such application for leave be made within 28 days of the publication of these reasons and annex a copy of the proposed pleading. My intention is to ensure that the parties who would be responding to such a pleading have the opportunity to make submissions on whether or not leave should be granted to file that new pleading. That in my view is more appropriate than simply permitting Mr Manny to file what might turn out to be a further defective pleading and leaving it to those parties to then seek to have that defective pleading struck out. I will also make a direction that Mr Manny make any application to join additional parties to that proceeding at the same time as seeking to file any new pleading.
I am satisfied that I should make an order directing that the proceedings in the counterclaim be heard separately from the proceedings brought by the plaintiff. It is now clear, in a way that was not clear when I decided the earlier application by the administrators and receivers, that the loan agreements that are the subject of the plaintiff’s action are separate to the loan agreements and securities which led to the appointment of the receivers. The former are agreements with Mr Manny personally in relation to which the securities were originally the two properties identified in [6] above. The latter are loan agreements relating to his business activities in relation to which the property the subject of the present action by the plaintiff was not a security. Further, the combined effect of the orders that I have made in relation to the receivers and administrators and the orders that I will make in relation to the current application is that the whole of the defendant's counterclaim is struck out and any further counterclaim can only be filed with leave of the Court. It is likely that any issue of leave will also involve a consideration of whether or not it is appropriate to permit the joinder of additional parties, namely one or other of the companies previously associated with Mr Manny. I am satisfied that there is a significant risk of further delay to the plaintiff's claim if that claim is not separated from the defendant’s counterclaim. There is a real risk having regard to: (a) the fact that Mr Manny is, and is likely to remain, unrepresented; (b) the difficulty that he has in articulating a reasonable cause of action in his counterclaim; and (c) the history of the proceedings to date, that to hear the plaintiff's claim and the defendant’s possible future counterclaim together will substantially delay the hearing of the balance of the plaintiff's claim. Rule 471 of the Court Procedures Rules permits an order for a separate hearing to be made in circumstances where hearing the claim and counterclaim together would unfairly prejudice a party, embarrass or delay the hearing of the proceeding or be otherwise inconvenient. An order that a counterclaim be heard separately can be made either on application by a party before that party serves an answer to the counterclaim or on the court's own initiative. The ANZ invited me to make such an order pursuant to the inherent jurisdiction of the Court to manage the proceedings. In my view it is appropriate to make an order under rule 471 that the counterclaim be heard separately from the proceedings brought by the plaintiff as I am satisfied that the preconditions in rule 471 for the making of such an order are made out and that it is appropriate to do so.
Having regard to the substantial degree of success that the ANZ had in pursuing its application I will order that Mr Manny pay the ANZ's costs of the application.
Orders
For these reasons the orders that I will make are:
1. There be judgment for the plaintiff for possession of the land being Section 10, Block 45 on Deposited Plan 3404 Flynn, contained in certificate of title Volume 647, Folio 1, and known as 42 Barber Crescent Flynn in the Australian Capital Territory.
2. The counterclaim brought by the defendant be heard separately from the hearing of the proceedings brought by the plaintiff.
3. The counterclaim filed on 7 February 2013 be struck out.
4. The defendant is not permitted to file any additional pleading for his counterclaim without the leave of the Court.
5. Any application for leave to file a further pleading for the counterclaim be filed and served within 28 days of the publication of these reasons and that any such application annex a copy of the proposed pleading.
6. If any proposed pleading for the counterclaim requires or results in the joinder of additional parties to the proceedings then any application to join those parties be heard at the same time as the application for leave to file the proposed pleading and the application for leave to file the pleading be served on any proposed new party to the proceedings.
7. The defendant is to pay the plaintiff’s costs of the application in proceeding dated 30 November 2012 and the amended application in proceeding dated 27 June 2013.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Master Mossop.
Associate:
Date: 26 July 2013
Counsel for the applicant: Mr A Casselden
Solicitor for the applicant: Gadens Lawyers
Counsel for the respondent: In person
Date of hearing: 27-28 June 2013
Date of judgment: 26 July 2013
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