Australia and New Zealand Banking Group Limited v Jeff Manny (No 3)

[2013] ACTSC 223

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED v JEFF MANNY & ORS (No 3)

[2013] ACTSC 223 (11 November 2013)

CIVIL LITIGATION – practice and procedure – pleading – statement of claim – where self-represented litigant given leave to replead claim – attempt to join company in liquidation to proceedings without consent – statement of claim discloses no cause of action

CORPORATIONS – receivers – where receiver exercising power of sale – whether receiver owed common law duty of care to guarantor – no duty of care owed

Corporations Act 2001 (Cth) ss 267, 277
Corporations Regulations 2001 (Cth) r 5.6.54

Court Procedures Rules 2006 (ACT) r 222

Chahwan v Euphoric Pty Ltd (2008) 65 ACSR 6613
Carpenter v Pioneer Park Pty Ltd (2008) 71 NSWLR 577
Cater-KingPty Ltdv Westpac Banking Corporation (1989) 7 ACLC 993
Cuckmere Brick Co Ltd v Neutral Finance Ltd [1971] Ch 949
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Farah Constructions v Say–Dee (2007) 230 CLR 89
Florgale Uniforms Pty Ltd v Orders (2004) 11 VR 54
GE Capital Australia v Davis (2002) 180 FLR 250
Gahahan Pty Limited (In Liquidation) v Advance Bank of Australian Limited [2001] ACTSC 118
Jovanovic v Commonwealth Bank of Australia (2004) 87 SASR 570
Mills v Sheahan (2006) 95 SASR 49
Permanent Custodians Limited v AGB Developments Pty Ltd [2010] NSWSC 540
Standard Chartered Bank Ltd v Walker [1982] 1 WLR 1410
Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646
Westpac Banking Corporation Ltd v Kingsland (1991) 26 NSWLR 700

EX TEMPORE JUDGMENT

No.  SC 746 of 2011

Judge:             Master Mossop
Supreme Court of the ACT

Date:              31 October 2013

IN THE SUPREME COURT OF THE     )
  )          No.  SC 746 of 2011
AUSTRALIAN CAPITAL TERRITORY           )

BETWEEN:AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Plaintiff        

AND:  JEFF MANNY

Defendant

ANTHONY SIMS and STEPHEN PARBERY

First Defendant to counterclaim

SHANE O’KEEFFE and MURRAY SMITH

Second Defendant to counterclaim

ORDER

Judge:  Master Mossop
Date:  31 October 2013
Place:  Canberra

THE COURT ORDERS THAT:

1. The application dated 19 September 2013 is dismissed with costs.

1. On 26 July 2013 I made a number of orders in relation to the present proceedings.  One of those orders was that counterclaim filed by Mr Manny on 7 February 2013 be struck out.  I also ordered that he not be permitted to file any additional pleading without the leave of the Court and set a timetable for him doing so.  I required that if any proposed pleading for the counterclaim requires or results in the joinder of additional parties then the application to join those parties be heard at the same time as the application for leave to file the pleading and that the application for leave to file the pleading be served on any proposed new party to the proceedings. 

1. Mr Manny has appealed from some aspects of my decision. Orders 1, 2 and 7 were stayed but not those relating to the counterclaim or the process for the filing of a new pleading in relation to the counterclaim.  The stay of orders 1, 2 and 7 was in place until 4 pm on 25 October 2013.  That was the date on which the appeal from my decision was heard.  It appears that the stay was not continued after that date.

1. By application dated 19 September 2013 Mr Manny has sought leave to add three additional parties to the proceedings, JK3L Pty Ltd, Lonagann Pty Ltd and Jeff Manny Constructions Pty Ltd.  He has also sought leave to file a revised counterclaim.

1. Each of these companies are companies of which Mr Manny is a director and, as I understand it, a shareholder.  Each company is now in liquidation.

Proposed Revised Counterclaim

1. In order to understand the application it is necessary to say a little more about the revised counterclaim.

1. The counterclaim consists of 41 paragraphs extending over 22 pages.  It sets out a number of alleged causes of action.  It is clearly drafted by Mr Manny and reflects the numerous difficulties that a litigant in person can have in articulating one or more causes of action in accordance with the rules of pleading.

1. The first alleged cause of action is that outlined in paragraphs [1]–[11].  That is a claim by JK3L Pty Ltd against the first defendants to the counterclaim (“the Receivers”).  The claim alleges that JK3L Pty Ltd owned a number of properties which were sold by the receivers at “substantially less than market value of the properties concerned”.  The claim is pleaded apparently in negligence and a loss of $8,010,000 is claimed as damages.

1. The second cause of action described in paragraphs [12]-[14] appears to be a claim in contract by Landagency Pty Ltd against the Receivers arising out of a contract for property management services in relation to the real property owned by JK3L Pty Ltd, Lonagann Pty Ltd and Jeff Manny Constructions Pty Ltd.  I mention at this point that Landagency Pty Ltd is a company which is not in liquidation which Mr Manny also seeks to have joined as a party to the proceedings. It is alleged that the Receivers repudiated the contract with Landagency Pty Ltd and are liable to Landagency Pty Ltd in damages.

1. The third cause of action described in paragraphs [15]–[20] relates to the sale by the Receivers of properties owned by Lonagann Pty Ltd as trustee for the Manny Family Trust.  It is alleged that the sale of the properties led to a surplus over and above the security interest of the bank of $1,565,823.69.  It is alleged that the surplus was held on trust by the Receivers for the beneficiaries of the Manny Family Trust.  It is alleged that the surplus amount was wrongly appropriated to the obligations of other claimants.

1. The fourth cause of action described in paragraphs [21] and [22] is a claim for damages by Lonagann Pty Ltd.  It alleges that the Receivers sold three properties for “substantially less than market value of the properties concerned” and that the Receivers were negligent in doing so.

1. The fifth cause of action described in paragraph [23] is a claim that the plaintiff (“the ANZ”) “inappropriately reversed” a $10,000 payment from a Visa credit card of Mr Manny to the account of the Receivers.  There are a large number of purported particulars to this briefly stated claim.

1. The sixth cause of action described in paragraph [24] of the claim is a claim that the ANZ engaged in “[u]nconscionable/inequitable/unfair/inappropriate and draconian foreclosures” on JK3L Pty Ltd, Lonagann Pty Ltd and Jeff Manny Constructions Pty Ltd.  There is no claim for damages made but this appears to be a claim asserted by JK3L Pty Ltd, Lonagann Pty Ltd and Jeff Manny Constructions Pty Ltd.

1. The seventh cause of action alleged at paragraph [25] is a claim which appears to be by JK3L Pty Ltd, Lonagann Pty Ltd and Jeff Manny Constructions Pty Ltd in “negligence in Law, Contract and Tort” against the Bank in foreclosing on those companies when the asserted value of the properties substantially exceeded the debt of those companies.  There are four pages of largely embarrassing particulars of this claim.

1. The eighth cause of action is a claim against the ANZ described as “[c]ontempt/misconduct in the Australian Family Court in the matter of Jeff Manny v Kazuko Manny … on 12 July 2010 and beyond”.  The particulars state that Mr Manny is in the process of filing proceedings in the Family Court in relation to contempt/misconduct by the ANZ.  There are some difficult to understand particulars which appear to assert that the failure to use certain valuations by the ANZ amounts to “cover up of [c]ontempt/misconduct” of Family Court orders.

1. Paragraphs [27]–[41] appear to contain 14 more alleged causes of action which are stated in terms which are embarrassing in the sense of being incoherent conclusions and are statements which do not articulate the material facts of a cause of action or appropriately make identifiable claims for relief.  Only two of those causes of action appear to relate to the second defendant to the counterclaim (“the Liquidators”) (see paragraphs [30] and [40]).

Procedure adopted

1. When the application was first before the Court on 11 October 2013, Mr Manny provided written submissions in support of his application.  Although Mr Manny stated that he was not in a position to make his submissions, each of the other parties was.  As a consequence, because Mr Manny was not legally trained and unrepresented, I permitted the representatives of each of the other parties to make their submissions as to whether or not leave to file the revised counterclaim should be granted.  I considered that course appropriate because it meant that Mr Manny was clearly on notice of the arguments which were to be put against him prior to being required to make his submissions.  No party objected to this course.  The proceedings were then adjourned until 31 October 2013 when there was time available to hear the balance of his submissions, as well as for him to tender any evidence upon which he intended to rely and to make any objections to any of the evidence that was led by the other parties. 

1. Today, when the matter was reached, Mr Manny moved on an application to stay the further hearing of the application.  That stay application was filed yesterday.  I dismissed that application for reasons which I gave at the time.  Notwithstanding Mr Manny’s stated intention to appeal from my decision, I declined to adjourn the hearing of the present application further.  I then adjourned for lunch. 

1. After lunch, Mr Manny made further submissions as to why I should not hear the matter further.  He raised three matters: firstly, the pending appeal against my decision on 26 July 2013 in relation to which Refshauge J is currently reserved; secondly, his intention to appeal from my decision earlier today on his application dated 30 October 2013, in which I refused to adjourn the hearing of this application beyond today; thirdly, his intention to apply for a judicial inquiry.  It was not clear to me what he proposed to seek a judicial inquiry into.  I asked to whom he was going to apply for such an inquiry.  He said, “Whatever the law says to me”.  He submitted that I should disqualify myself from further hearing the application or alternatively, simply decide that it was more appropriate that another judicial officer hear it. 

1. I declined to disqualify myself or determine that another judicial officer should hear the application.  In relation to decisions of the Master, there is a right of appeal from interlocutory decisions to a single judge which distinguishes the position of the Master from the position of judges in relation to whom an appeal from an interlocutory decision is to the Court of Appeal and may only be brought with leave.  In my view, nothing in the circumstances surrounding this case as it has proceeded today or the history of the case up until now, insofar as I have dealt with it, indicated to me that a fair minded lay observer might reasonably apprehend that I might not bring an impartial mind to the resolution of the question that I am required to, namely the proper determination of the application dated 19 September 2013 (see Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at paragraph [6] and [8]). I therefore declined to disqualify myself and did not consider it appropriate that I cease hearing the application.

1. Mr Manny submitted that for him to make further submissions on his application would amount to an abuse of process, because of proceedings pending in the Family Court arising out of allegations made by Mr Manny that the ANZ is in contempt of previous orders of the Family Court.  I am not satisfied that there would be any abuse of either the process of the Family Court or of this Court in Mr Manny making submissions on his part-heard application.  When he made this submission, I told him what my view was.  Notwithstanding that I made it clear to him that he had the opportunity to lead any evidence that he wished and that he had the opportunity to make any objections to the evidence that had been led by the other parties or make any additional submissions beyond the written submissions provided on 11 October 2013, he indicated that he did not wish to and understood that I would then deal with the matter in his absence.

1. Having regard to the fact that he declined to lead any evidence, take any objections to the evidence of the other parties or make any further submissions, I briefly reserved my decision and dealt with the matter on the basis of the evidence and submissions that I had available to me.  Upon resuming after the adjournment, consistent with his earlier indication as to the course he proposed to adopt, Mr Manny was no longer present in court. 

Submissions by Mr Manny

1. I will firstly deal with the submissions made by Mr Manny. Mr Manny provided written submissions in support of his application for leave to file the counterclaim. I have reproduced the relevant sections from his submissions:

I am seeking leave to file my Revised Counterclaim of 19 September 2013:1.   

1.1    Refer to orders 12 June and 26 July of 2013 of Master Mossop which he says if counterclaim is written in a proper manner then there might be some cause of actions in the case. I got most of my Revised counterclaim and structure of the counterclaim written by my old lawyer.

1.2    Refer to the law of counterclaim described in the Australian Civil Procedure Ninth Edition

·           Set –Off [starts from page 257]

·           Pleading a set off [page 261]

·           Counter-Claims and Cross-Claims [Starts from page 262]

·           Amendment [page 273]

·           Adding Cause of Action [page 284]

·           Parties and Cause of Action [page 296]

1.3    Refer to the Acts of Corporation ACT 2001

·           I have outline all the sections of corporation ACT 2001 and the rules of Court Procedures 2006 in the beginning of my Application in Proceeding of 19 September 2013 in the matter of SC 746 of 2011 which is heard today

1.4    I have not added any new Cause of Actions. Please match the pleading of the old counterclaim with the Revised counterclaim.

I am seeking leave to include the companies of Jeff Manny Group in the proceedings:2.   

2.1    The Receivers can not act for Jeff Manny group of companies under receivership in these proceedings:

·           Because Receivers can’t act against themselves.

·           Because Receivers will become in conflict of interests with themselves.

·           The Receivers, ANZ bank and their lawyers have charged my companies around $2 million fees [copy of these fees and charges are enclosed]. I and my companies must know the diligence of ANZ bank Receivers appointed by the ANZ bank and their lawyers for the fees they have removed from my accounts and work and act they have committed as per Corporations ACT 2001.

· I have outlined sections of Corporations ACT in my application in Proceedings of 19 September 2013.

·           For the interest of the justice [I know this is a wrong phrase to use in these proceedings, as we are not talking about justice any more here. It is about bunch of people ambush a businessman to take all of his belonging and burry him alive in the name of the law. The major preceding case is in 1800 AD courts (lords) in England declared Aborigines in Australia are not humans to take their land and case of Nelson Mandela whom was jailed for 26 years because he did not accept the apartheid system. Similarly I do not accept children under 16 be inappropriately handled by adults especially when they are in a position of the trust.]

Liquidators’ submissions

1. Mr Carmody who appears for the Liquidators read the affidavit of Shane O’Keeffe, a partner in the firm who was appointed jointly with Mr Murray Smith as administrator of Jeff Manny Constructions Pty Ltd, JK3L Pty Ltd and Lonagann Pty Ltd on 28 February 2011.  On 18 April 2011 both gentlemen were appointed liquidators of those companies pursuant to resolutions of the companies’ creditors.  Neither has consented to Mr Manny bringing any court proceedings on behalf of the companies.

1. Mr Manny, although a former director of each company, is not entitled to act on behalf of the companies or to cause the companies to consent to being plaintiffs in the proceedings. Rule 222 of the Court Procedures Rules provides “a person may be included or substituted as a plaintiff in a proceeding only if the person agrees to be included or substituted.” There is no evidence that JK3L Pty Ltd, Lonagann Pty Ltd or Jeff Manny Constructions Pty Ltd has consented to being included as a plaintiff. Rule 222 precludes their joinder in those circumstances.

1. Section 236 of the Corporations Act permits a person to bring proceedings on behalf of a company for the purposes of taking responsibility on behalf of the company for those proceedings if the person is a member, former member, officer or former officer of the company. Sections 236 and 237 of the Act provide:

236  Bringing, or intervening in, proceedings on behalf of a company

(1)A person may bring proceedings on behalf of a company, or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for those proceedings, or for a particular step in those proceedings (for example, compromising or settling them), if:

(a)        the person is:

(i)a member, former member, or person entitled to be registered as a member, of the company or of a related body corporate; or

(ii)an officer or former officer of the company; and

(b) the person is acting with leave granted under section 237.

(2)Proceedings brought on behalf of a company must be brought in the company’s name.

(3)The right of a person at general law to bring, or intervene in, proceedings on behalf of a company is abolished.

237  Applying for and granting leave

(1)A person referred to in paragraph 236(1)(a) may apply to the Court for leave to bring, or to intervene in, proceedings.

(2)        The Court must grant the application if it is satisfied that:

(a) it is probable that the company will not itself bring the proceedings, or properly take responsibility for them, or for the steps in them; and

(b)        the applicant is acting in good faith; and

(c)it is in the best interests of the company that the applicant be granted leave; and

(d)if the applicant is applying for leave to bring proceedings—there is a serious question to be tried; and

(e)        either:

(i)at least 14 days before making the application, the applicant gave written notice to the company of the intention to apply for leave and of the reasons for applying; or

(ii)it is appropriate to grant leave even though subparagraph (i) is not satisfied.

...

1. No express application for leave under s 237 has been made. Nor has there been any other application for the Court to exercise any other power which it might have so as to permit Mr Manny to bring proceedings on behalf of companies where the liquidators of those companies have not brought any such proceedings.

1. There is, however, a reference to ss 236 and 237 in that part of his application which identifies the statutory provisions upon which it is based. Even if I was to treat the application as an application for leave under those provisions they have no application where a company is in liquidation: see Chahwan v Euphoric Pty Ltd (2008) 65 ACSR 661. Therefore not only does Mr Manny not have leave to bring proceedings on the part of the companies, he could not obtain leave under ss 236 and 237.

1. No application for leave has been made pursuant to the inherent jurisdiction of the Court for leave to allow Mr Manny to sue in the name of a company in liquidation.  The principles applicable to such an application are set out in Carpenter v Pioneer Park Pty Ltd(2008) 71 NSWLR 577 at [23]-[36]; see also Gahahan Pty Limited (In Liquidation) v Advance Bank of Australian Limited [2001] ACTSC 118. These considerations are fatal to any application to join three of the additional corporate counterclaimants, JK3L Pty Ltd, Jeff Manny Constructions Pty Ltd and Lonagann Pty Ltd.

1. Further, although not expressly raised by Mr Carmody in this aspect of his submissions, the revised counterclaim only contains limited allegations against his clients.  Those are in paragraphs [30] and [40]. 

1. Paragraph [30] relates to the failure by all three defendants to give consent to the refinancing of loans with the Bank of Queensland when they had a letter of offer.  No cause of action is identified in that pleading. 

1. Paragraph [40] alleges that the Liquidators did not accept Mr Manny and Landagency Pty Ltd as creditors of JK3L Pty Ltd, Lonagann Pty Ltd and Jeff Manny Constructions Pty Ltd and did not invite them to creditors’ meetings.  Facts relevant to that allegation or that possible cause of action are not pleaded.  Assuming proofs of debt were lodged and were rejected by the liquidator, then that rejection may be subject to a right of appeal under regulation 5.6.54 of the Corporations Regulations, but the present pleading does not identify itself as such an appeal and does not identify any other cause of action. Similarly, the failure to invite entities to a creditors’ meeting does not give rise to any identifiable cause of action. 

1. Those limited pleadings may need to be addressed when I consider the application by the Liquidators dated 28 October 2013, that they be removed as parties to the proceedings or any other directions in relation to the case. 

Receivers’ submissions

1. Mr Bird, who appears for the Receivers, makes the submissions directed to four different areas.

1. First, in relation to the alleged first and fourth causes of action identified above, those which asserted a sale of properties at an undervalue, he submits that there is no duty owed to JK3L Pty Ltd or Lonagann Pty Ltd as the case may be.  Both of those claims are framed as common law claims.  That is made clear by the references to negligence in paragraph [7] and [22].  Mr Bird points to two authorities, Permanent Custodians Limited v AGB Developments Pty Ltd [2010] NSWSC 540 and Jovanovic v Commonwealth Bank of Australia (2004) 87 SASR 570 in support of the submission that no duty of care in tort exists that would permit such claims to be made against the Receivers.

1. Dealing with those cases chronologically, Jovanovic stands for the proposition that a mortgagee exercising a power of sale does not owe a common law duty of care to either a mortgagor or a guarantor of the mortgagor’s obligations: see Jovanovic at [92]. Similarly Permanent Custodians stands for the proposition that no common law duty of care is owed by a mortgagee to a guarantor of the mortgagor’s obligations.  Although decided after Jovanovic, no reference was made to that decision.  However it is clear that both cases have adopted the Australian approach to the issue which is different from that reflected in the English Court of Appeal in Cuckmere Brick Co Ltd v Neutral Finance Ltd [1971] Ch 949. There are a number of cases which gather together the relevant authorities: Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646 at [15]-[26], Permanent Custodians at [33]-[34]; GE Capital Australia v Davis (2002) 180 FLR 250 at [66]-[72]. The Australian approach has been that there is no tortious duty owed by a mortgagee to a mortgagor or guarantor. Further, the same approach has been adopted in relation to a receiver so that a receiver owes no common law duty.

1. Cuckmere held the duties of a mortgagee extended beyond a mere duty to act in good faith and embraced a duty to take reasonable care to obtain a proper price founded in the law of negligence.  This decision was applied to receivers in Standard Chartered Bank Ltd v Walker [1982] 1 WLR 1410 at 1415–1416. That approach was rejected by Cole J in Westpac Banking Corporation Ltd v Kingsland (1991) 26 NSWLR 700. In that case his Honour struck out a claim in negligence founded upon the decision in Standard Chartered Bank brought by guarantors against receivers and managers who were responsible for selling the assets of the mortgagor.  Having reviewed the reasons in Standard Chartered Bank and the Australian authorities his Honour (at 709) concluded that the cross-claim against the receivers as not alleging “a duty which accords with existing law in Australia” and struck it out.  The reasoning of Cole J in Westpac was approved by Bryson J in GE Capital Australia v Davis at [70] as applicable to the position of mortgagees and by the majority in Jovanovic.  In my view, having regard to its reliance upon and approval of Westpac, Jovanovic should be taken as authority for the proposition not only that a mortgagee owes no duty in tort to a mortgagor or guarantor but also that a receiver owes no such duty.  That is consistent with the assimilation in the authorities of the position of a receiver and a mortgagee.  Justice Besanko, one of the judges in Jovanovic, himself considered that Jovanovic described the position relevant to both receivers and mortgagees in possession: Mills v Sheahan (2006) 95 SASR 49 at [58]. Similarly Young CJ in Eq in Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646 at [15], [26] rejected the application of a common law duty in negligence in terms which appeared to assimilate the position of mortgagees and receivers.

1. Having regard to my understanding of Jovanovic set out above and what was held in Farah Constructions v Say–Dee (2007) 230 CLR 89 at 151-152, I should follow the decision in Jovanovic.  I would, in any event, have followed the decision of Cole J in Westpac which specifically applies to the duties of receivers. 

1. As a consequence, a claim against the Receivers for damages for negligence would be doomed to fail and hence leave to file a counterclaim which includes such claims should be refused.

1. Second, in relation to the claim which is identified as the second alleged cause of action, counsel for the Receivers submits that the Receivers never adopted the contract which was alleged and as a consequence any action would only lie against the company.  In that regard, he refers to the decision of Master White in the Supreme Court of Western Australia in Cater-KingPty Ltdv Westpac Banking Corporation (1989) 7 ACLC 993. In that case Master White said at 997–998 :

The true position, in my opinion, is that a receiver is not “entitled” to repudiate any contract.  The real distinction between the two kinds of contracts referred to is as to the nature of the relief available to the plaintiff and not as to any “entitlement” on the part of the receiver.  In the case of a contract in respect of which equitable relief is given, the “repudiation” by the receiver is of no avail and cannot prevent the grant of the appropriate relief by a Court.  In the case of contracts which do not attract equitable relief, the result of the “repudiation” is to give rise to a common law claim for damages against the company... .

The second defendants were not parties to the contract and have never “adopted” it.  Accordingly, as it seems to me, no action can lie against them personally for damages for breach of the contract.  Any such claim would be available only against [the company], whose agents they were at all material times.

1. I accept this submission.  It provides a further basis for refusing leave.

1. Third, counsel for the Receivers submits that the claim which I have identified as the third alleged cause of action which relates to the alleged surplus of monies said to be payable to the beneficiaries of the Manny Family Trust, is misconceived because the security given by Lonagann Pty Ltd was also security given on behalf of the other companies and hence available to be appropriated to meet those companies obligations as well as those of Lonagann Pty Ltd.

1. He points to the terms of the “corporate guarantee and indemnity” which is found commencing at page 1217 of exhibit MR2 to the affidavit of Matthew Roser sworn 10 October 2013.  That document identifies Jeff Manny Constructions Pty Ltd, JK3L Pty Ltd and Lonagann Pty Ltd as guarantors of the obligations of Jeff Manny Constructions Pty Ltd, JK3L Pty Ltd and Lonagann Pty Ltd in its own capacity and as trustee for the Jeff Manny Family Trust.  The liability of the guarantors under the guarantee is identified as being “unlimited”.  The guarantee in clause 1.1 is to pay to ANZ all “Guaranteed Money”.  That includes all money owing to the ANZ for any reason by the customer alone or together with the guarantor or one or more others now or in the future actually or contingently: see clause 2.2.  The document is executed by Jeff Manny Constructions Pty Ltd, JK3L Pty Ltd and Lonagann Pty Ltd.  I am satisfied as a consequence of this cross-collateralisation that Lonagann Pty Ltd or the Jeff Manny Family Trust is not entitled to the surplus of the funds so long as there was other money owing by Jeff Manny Constructions or JK3L Pty Ltd.

1. This provides a further ground for refusing leave to file the proposed revised counterclaim.

1. Fourth, counsel for the Receivers submits that the claims in paragraph [23] and following are not against the Receivers but instead are, insofar as they are intelligible, against the ANZ.

ANZ’s submissions

1. Ms Britton provided written submissions which deal with some of the issues raised by the other parties.  Those submissions:

(a)        address specifically the pleading deficiencies in paragraphs [23] and following of the proposed counterclaim;

(b)        point to the rejection of previous applications by Mr Manny to join additional parties;

(c)        point to the likelihood that if the additional parties were joined an application for security for costs would be made and neither the company nor Mr Manny would be able to provide such security;

(d) submit that if the claim for damages relating to sale at an undervalue is based on s 420A of the Corporations Act 2001 then Mr Manny, as a guarantor, has no standing to bring such proceedings: GE Capital v Davis; Ultimate Property Group Pty Ltd v Lord; Florgale Uniforms Pty Ltd v Orders (2004) 11 VR 54 and Permanent Custodians.

1. I am satisfied that, in addition to the other grounds for refusing leave to permit the revised counterclaim to be filed, in relation to the pleadings against the ANZ (at [23] and following) the claim should not be permitted to be filed because the pleadings suffer from the following vices:

(a)        they fail to identify duties or obligations known to law which could give rise to a cause of action;

(b)        they fail to plead material facts;

(c)        they fail to identify the relief claimed;

(d)        they inappropriately include argumentative or conclusory statements;

(e)        they include passages which are embarrassing and irrelevant.

1. For these reasons I refuse to make the orders sought by Mr Manny in the application dated 19 September 2013 and I dismiss that application with costs.

Orders

1. The application dated 19 September 2013 is dismissed with costs.

I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of Master Mossop.

Associate:

Date:    11 November 2013

Counsel for the plaintiff:  KM Britton
Solicitors for the plaintiff:  Gadens Lawyers
Counsel for the defendant:  The defendant appeared in person     

Counsel for the first defendant
to the counterclaim:   JN Bird  

Solicitors for the first defendant                   Ashurst Australia

to the counterclaim:

Counsel for the second defendant
to the counterclaim:   M S Carmody

Solicitors for the second defendant               Dibbs Barker
to the counterclaim

Date of hearing:  11 October, 31 October 2013

Date of judgment:  31 October 2013