Bank of Western Australia Ltd v Faylette Pty Ltd
[2003] WASC 262
BANK OF WESTERN AUSTRALIA LTD -v- FAYLETTE PTY LTD & ORS [2003] WASC 262
| Link to Appeal : | [2004] WASCA 234 |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 262 | |
| Case No: | CIV:2315/2000 | 27 NOVEMBER 2003 | |
| Coram: | MASTER SANDERSON | 18/12/03 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Application for leave to amend refused | ||
| B | |||
| PDF Version |
| Parties: | BANK OF WESTERN AUSTRALIA LTD FAYLETTE PTY LTD STEPHEN LAWRENCE JAMES JENNIFER FAY JAMES |
Catchwords: | Practice and procedure Application for leave to amend defence in terms of minute Turns on own facts |
Legislation: | Corporations Act, s 441A, s 442D Trade Practices Act, s 52 |
Case References: | Continental Illinois National Bank & Trust Co of Chicago v Papanicolaou ("The Fedora") (1986) 2 Lloyd's Law Rep 441 O'Callaghan & Ors v Custom Credit Corporation Ltd & Ors, unreported; SCt of WA; Library No 970709; 17 December 1997 Buckeridge v Mercantile Credits Ltd (1981) 147 CLR 654 Castlemaine Perkins Ltd v Queen Street Hotels Pty Ltd [1968] Qd R 501 Daewoo Australia Pty Ltd v Porter Crane Imports Pty Ltd [2000] QSC 050 Davy v Garrett (1877) 7 Ch D 473 Expo International Pty Ltd v Chant (1979) 2 NSWLR 820 Graeme Webb Investments Pty Ltd v St George Partnership Banking Ltd (2001) 38 ACSR 282 Jenner v Selmoore Pty Ltd (1997) 23 ACSR 552 Kimberley Downs Pty Ltd v Western Australia, unreported; SCt of WA; Library No 6414; 1 October 1986 Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167 Nationwide News Ltd v Wiese (1990) 4 WAR 263 Petropoulos v Commissioner for Railways [1963] NSWR 286 Smith v McCusker [2000] WASCA 320 State Bank of New South Wales v Chia (2000) 50 NSWLR 587 State Bank of Victoria v Parry (1989) 7 ACLC 226 Taylor v Bank of New South Wales (1886) 11 AC 596 Visboard v Federal Commissioner of Taxation (1943) 68 CLR 354 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
FAYLETTE PTY LTD
First Defendant
STEPHEN LAWRENCE JAMES
Second Defendant
JENNIFER FAY JAMES
Third Defendant
Catchwords:
Practice and procedure - Application for leave to amend defence in terms of minute - Turns on own facts
Legislation:
Corporations Act, s 441A, s 442D
Trade Practices Act, s 52
(Page 2)
Result:
Application for leave to amend refused
Category: B
Representation:
Counsel:
Plaintiff : Mr G H Murphy
First Defendant : No appearance
Second Defendant : In person
Third Defendant : No appearance
Solicitors:
Plaintiff : Blake Dawson Waldron
First Defendant : No appearance
Second Defendant : In person
Third Defendant : No appearance
Case(s) referred to in judgment(s):
Continental Illinois National Bank & Trust Co of Chicago v Papanicolaou ("The Fedora") (1986) 2 Lloyd's Law Rep 441
O'Callaghan & Ors v Custom Credit Corporation Ltd & Ors, unreported; SCt of WA; Library No 970709; 17 December 1997
Case(s) also cited:
Buckeridge v Mercantile Credits Ltd (1981) 147 CLR 654
Castlemaine Perkins Ltd v Queen Street Hotels Pty Ltd [1968] Qd R 501
Daewoo Australia Pty Ltd v Porter Crane Imports Pty Ltd [2000] QSC 050
Davy v Garrett (1877) 7 Ch D 473
Expo International Pty Ltd v Chant (1979) 2 NSWLR 820
Graeme Webb Investments Pty Ltd v St George Partnership Banking Ltd (2001) 38 ACSR 282
Jenner v Selmoore Pty Ltd (1997) 23 ACSR 552
(Page 3)
Kimberley Downs Pty Ltd v Western Australia, unreported; SCt of WA; Library No 6414; 1 October 1986
Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167
Nationwide News Ltd v Wiese (1990) 4 WAR 263
Petropoulos v Commissioner for Railways [1963] NSWR 286
Smith v McCusker [2000] WASCA 320
State Bank of New South Wales v Chia (2000) 50 NSWLR 587
State Bank of Victoria v Parry (1989) 7 ACLC 226
Taylor v Bank of New South Wales (1886) 11 AC 596
Visboard v Federal Commissioner of Taxation (1943) 68 CLR 354
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
(Page 4)
1 MASTER SANDERSON: This is the second defendant's application for leave to amend his defence in terms of a minute of amended defence and counterclaim filed 26 November 2003 ("the minute"). This latest minute was a variation of a minute lodged on 22 October 2003. There was only one very minor change in the later document and with the concurrence of counsel for the plaintiff, it was the later document that was considered.
2 Before dealing with the application I should say something of the background facts. The plaintiff's claim is straightforward. It lent money to the first defendant, the advances being guaranteed by the second and third defendants. The first defendant defaulted in its obligations under the loan covenants and the plaintiff appointed a receiver. Certain assets of the first defendant were sold to reduce the first defendant's indebtedness to the plaintiff and eventually the first defendant slipped into insolvency. The plaintiff seeks to recover from the second and third defendants pursuant to the guarantees.
3 Against this claim the second defendant raises a number of defences. These are to be found in par 4 through to 13 of the minute. Without going into detail, the second defendant alleges breach of contract by the plaintiff, breach of s 52 of the Trade Practices Act and estoppel. None of these matters is presently relevant. While some criticism may be made of the form of these pleas, the defence is of long standing and will be tested at trial. The present par 14 through to 20 of the minute replead certain matters which I earlier struck out and it is these paragraphs to which the plaintiff takes exception.
4 The new pleas may be divided into two different categories. The first category, which might be referred to as the misrepresentation plea, is to be found in par 14 and 15. By par 15 the second defendant claims that the plaintiff misrepresented the position to him with respect to the guarantees. It is said that it was orally represented to the second and third defendants that the guarantees would not be called upon because adequate security for the facilities secured by the guarantees had otherwise been provided. Particulars are provided by par 14.1 and 14.2. By par 15 it is said that based upon misrepresentation the second and third defendants elected to "rescind" the guarantees.
5 It is immediately apparent that par 14 and 15 are not properly pleaded. It is not entirely clear what defence or cause of action the defendant seeks to raise against the plaintiff. Based upon the written and oral submissions made by the second defendant, I assume that he intends to rely upon the provisions of the Trade Practices Act ("the Act"). That being so, it seems likely that he intends to rely upon s 52 of the Act.
(Page 5)
- Neither s 51A(1) nor s 51AC would appear to be relevant. However, in his submissions the second defendant did not indicate precisely what section or sections of the Act he intended to rely upon. I have assumed it is s 52, based upon what is contained in par 14 of the minute and on the oral submissions made by the second defendant.
6 If the second defendant intends to rely upon s 52, then he must plead the representation which was made. It may be that this is the representation presently pleaded in par 14 of the minute. If that plea is made, the second defendant should plead where it was made, by whom the representation was made and when it was made. He must then plead that he acted in reliance upon that representation. He must plead how it is said the representation is misleading or deceptive. He must plead what remedies he seeks, either under s 87 of the Act or otherwise.
7 It was conceded by counsel for the plaintiff during the course of his submissions that it would be appropriate to give the second defendant leave to replead the matters raised in par 14 and 15. If a plea under s 52 of the Act is to be raised, then it should follow the form that I have set out above. But in referring to s 52 I do not mean in any way to limit the scope of any proposed amendment relating to the misrepresentation plea. Of course, any plea which is made by the second defendant needs to conform with the rules and failing agreement on the part of the plaintiff, leave to amend will be required.
8 The second category is the remaining paragraphs of the minute which deal with three matters. First, the second defendant says that the plaintiff appointed a receiver to the first defendant and the receiver acted in an improper fashion. Secondly, he says that the plaintiff took possession of a property in Osborne Park belonging to the first defendant before the security crystallised. He says this amounts to trespass and that this trespass gives him certain rights against the plaintiff. Thirdly, it is alleged that the receiver converted certain property of the first defendant. It would appear that the argument with respect to this claim is that had the property not been converted by the receiver, the indebtedness of the first defendant to the plaintiff would have been reduced by an amount, specified in par 18 of the minute to be $200,000.
9 It is clear that par 16 through to 20 are not proper pleas. The material facts necessary to establish what is said to be the causes of action are not pleaded and the pleading in its form is confusing. Leave ought not be given to amend in terms of par 16 through to 20. The question is whether or not the second defendant should be permitted to replead these matters.
(Page 6)
10 The claims put by the second defendant in these paragraphs rely upon the receivers appointed to the first defendant being an agent of the plaintiff. However, it is clear from cl 7 of the deed of appointment and the charge under which the appointment was made that the receiver was the agent of the borrower, not the plaintiff: see affidavit of Lucas Mark Wilk ("Mr Wilk"), sworn 5 July 2002, par 5 and 6. The prior appointment of an administrator to a company does not, as a matter of law, render a receiver appointed over the companies assets as the agent of the receiver's appointor. Pursuant to s 441A and s442D of the Corporations Act, the powers and functions of an administrator are subject to the powers and functions of a receiver. Furthermore, the fact that the plaintiff made the appointment and may have given directions does not alter the position at law that the receiver is the borrower's agent. Any directions given by a mortgagee or chargee, emanate, at law, from the mortgagor/chargor, not the mortgagee/chargee; see O'Callaghan & Ors v Custom Credit Corporation Ltd & Ors, unreported; SCt of WA; Library No 970709; 17 December 1997 per Anderson J at pages 7-8. In the circumstances then, it is very difficult to see how the second defendant has any claim arising out of either the actions of the receiver or the directions given to the receiver by the plaintiff. If that is not enough, under cl 3.1, 11.3 and 12.1 of the guarantees (which appear as annexures "JK7 and "JK8" to the affidavit of John Kadak ("Mr Kadak"), sworn 17 September 2002, the defendants are precluded from making any counterclaim in these proceedings: see Continental Illinois National Bank & Trust Co of Chicago v Papanicolaou ("The Fedora") (1986) 2 Lloyd's Law Rep 441 at 444 - 445.
11 I am satisfied that none of the causes of action the second defendant seeks to plead in par 16 to 20 has any prospects of success. If that be wrong and the second defendant wishes to take action against the plaintiff or the receiver, then he can do so in separate proceedings. I am not satisfied that it would be proper to allow what amounts to a counterclaim to be pleaded in these proceedings.
12 Accordingly, I will permit the second defendant to replead the cause of action in relation to misrepresentation found in par 14 and 15 of the present minute. I would refuse leave to replead the matters presently to be found in par 16 to 20 of the minute. Leave to plead in the form of the minute will be refused.
13 I will hear the parties as to the precise form of orders and as to costs.
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