Bertola v Australia and New Zealand Banking Group Ltd
[2016] WASC 165
•8 JUNE 2016
BERTOLA -v- AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD [2016] WASC 165
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 165 | |
| Case No: | CIV:2274/2015 | 18 FEBRUARY 2016 | |
| Coram: | MARTINO J | 8/06/16 | |
| 39 | Judgment Part: | 1 of 1 | |
| Result: | Defendants' applications successful Statement of claim struck out First and second plaintiffs given leave to file a minute of proposed amended statement of claim against the first defendant in respect of alleged sale in breach of duty of good faith Claims otherwise dismissed | ||
| B | |||
| PDF Version |
| Parties: | FRANCIS PETER BERTOLA FRANCIS PETER BERTOLA as Trustee for the FP and HT Bertola Family Trust FRANCIS PETER BERTOLA as Director of OLAWA PTY LTD [ACN 008 992 130] (in liquidation) AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD PERMANENT CUSTODIANS LTD LANDMARK OPERATIONS LTD LANDMARK (QLD) LTD RABOBANK AUSTRALIA LTD REGISTRAR OF LAND TITLES MASTER CRAIG SANDERSON THE STATE OF WESTERN AUSTRALIA |
Catchwords: | Civil practice and procedure Applications to strike out statement of claim Applications that action be dismissed |
Legislation: | Transfer of Land Act 1893 (WA) |
Case References: | Australia & New Zealand Banking Group Ltd v Olawa Pty Ltd [2013] WASC 415 Bertola v Australia & New Zealand Banking Group Ltd [2014] WASCA 66 Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 Christie v Christie (1873) LR 8 Ch App 499 Fingleton v The Queen [2005] HCA 34; (2005) 227 CLR 166 Glew v Frank Jasper Pty Ltd [2010] WASCA 87 Hart-Roach v Public Trustee (Unreported, WASC, Library No 980044, 11 February 1998) Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414; 25 August 1986) MBF Investments Pty Ltd v Nolan [2011] VSCA 114; (2011) 37 VR 116 Pendlebury v Colonial Mutual Life Assurance Society Ltd [1912] HCA 9; (1912) 13 CLR 676 Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 QBE Insurance (Australia) Ltd v Lois Nominees Pty Ltd [2012] WASCA 186 Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 Warner v Jacob (1882) 20 Ch D 220 Wentworth v Rogers (No 5) (1986) 6 NSWLR 53 Wentworth v Wentworth [2000] NSWCA 350; (2001) 52 NSWLR 602 Wildflower Electrical Refrigeration Service (WA) v Refrigid Pty Ltd [2014] WASC 382 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
AND
FRANCIS PETER BERTOLA as Trustee for the FP and HT Bertola Family Trust
Second Plaintiff
AND
FRANCIS PETER BERTOLA as Director of OLAWA PTY LTD [ACN 008 992 130] (in liquidation)
Third Plaintiff
AND
AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD
First Defendant
AND
PERMANENT CUSTODIANS LTD
Second Defendant
AND
LANDMARK OPERATIONS LTD
LANDMARK (QLD) LTD
RABOBANK AUSTRALIA LTD
Third Defendants
AND
REGISTRAR OF LAND TITLES
Fourth Defendant
AND
MASTER CRAIG SANDERSON
Fifth Defendant
AND
THE STATE OF WESTERN AUSTRALIA
Sixth Defendant
Catchwords:
Civil practice and procedure - Applications to strike out statement of claim - Applications that action be dismissed
Legislation:
Transfer of Land Act 1893 (WA)
Result:
Defendants' applications successful
Statement of claim struck out
First and second plaintiffs given leave to file a minute of proposed amended statement of claim against the first defendant in respect of alleged sale in breach of duty of good faith
Claims otherwise dismissed
Category: B
Representation:
Counsel:
First Plaintiff : In person
Second Plaintiff : In person
Third Plaintiff : In person
First Defendant : Mr D W John
Second Defendant : Mr D W John
Third Defendants : Mr T J Palmer & Mr C F McLeod
Fourth Defendant : Mr J Misso
Fifth Defendant : Mr J Misso
Sixth Defendant : Mr J Misso
Solicitors:
First Plaintiff : In person
Second Plaintiff : In person
Third Plaintiff : In person
First Defendant : Herbert Smith Freehills
Second Defendant : Herbert Smith Freehills
Third Defendants : Norton Rose Fulbright Australia
Fourth Defendant : State Solicitor's Office
Fifth Defendant : State Solicitor's Office
Sixth Defendant : State Solicitor's Office
Cases referred to in judgment:
Australia & New Zealand Banking Group Ltd v Olawa Pty Ltd [2013] WASC 415
Bertola v Australia & New Zealand Banking Group Ltd [2014] WASCA 66
Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
Christie v Christie (1873) LR 8 Ch App 499
Fingleton v The Queen [2005] HCA 34; (2005) 227 CLR 166
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Hart-Roach v Public Trustee (Unreported, WASC, Library No 980044, 11 February 1998)
Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414; 25 August 1986)
MBF Investments Pty Ltd v Nolan [2011] VSCA 114; (2011) 37 VR 116
Pendlebury v Colonial Mutual Life Assurance Society Ltd [1912] HCA 9; (1912) 13 CLR 676
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
QBE Insurance (Australia) Ltd v Lois Nominees Pty Ltd [2012] WASCA 186
Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93
Warner v Jacob (1882) 20 Ch D 220
Wentworth v Rogers (No 5) (1986) 6 NSWLR 53
Wentworth v Wentworth [2000] NSWCA 350; (2001) 52 NSWLR 602
Wildflower Electrical Refrigeration Service (WA) v Refrigid Pty Ltd [2014] WASC 382
Summary of my decision 6
The applications 7
The principles to be applied on the applications 11
The amended statement of claim 13
CIV 2674 of 2012 27
Further background facts 30
The plaintiff's claim that the judgment in CIV 2674 of 2012 is void 31
The first, second and third defendants' applications that the claims
in respect of the granting of securities be struck out 32
The claims made by the third plaintiff 34
The claims that property was sold at an undervalue 34
The claims against the fourth, fifth and sixth defendants 35
Outcome of the first and second defendants' application 37
Outcome of the first and second named third defendants' applications 37
Outcome of the third named third defendants' applications 38
Outcome of the fourth, fifth and sixth defendants' applications 39
1 MARTINO J: The three plaintiffs act in person in this action. On 11 August 2015 they filed a writ of summons with a statement of claim endorsed on it. They filed an amended writ of summons with an endorsed amended statement of claim on 6 January 2016, pursuant to an order that I made on 7 October 2015. The plaintiffs' claims concern farming properties known as San Pedro and Coonawarra which were mortgaged to the first defendant. Those properties have been sold pursuant to powers contained in securities given to the first defendant.
2 The amended statement of claim begins with a summary of the plaintiffs' claims and six paragraphs containing the relief that the plaintiffs seek. It then contains 32 numbered paragraphs, with two paragraphs numbered 27. After the paragraph numbered 31, the statement of claim contains a section headed Prime Grounds of Claim in which there are 16 numbered paragraphs. After the 16th paragraph of the Prime Grounds of Claim, the statement of claim contains a section headed Specific Grounds of Claim in which there are 12 numbered paragraphs, with two paragraphs numbered 2.
3 None of the defendants have filed defences. I have directed that the time limited to file and serve defences be extended until the determination of the applications that the defendants have made.
Summary of my decision
4 I have concluded:
1. That the requirement to file a memorandum of conferral should be waived for all of the defendants' applications;
2. The statement of claim should be struck out;
3. The action of the third plaintiff should be dismissed;
4. The first plaintiff and the second plaintiff should have liberty to file a minute of proposed amended statement of claim making claim against the first defendant that San Pedro, Coonawarra and personal property were sold in breach of the first defendant's duty of good faith and for relief for that alleged breach of the duty of good faith;
5. The action of all plaintiffs against the second, third, fourth, fifth and sixth defendants should be dismissed.
5 It will be necessary for the first plaintiff and the second plaintiff clearly to plead in the minute of proposed statement of claim that they file:
1. the facts that they say give rise to a duty of good faith being owed to each of them in respect of the sale of San Pedro, the sale of Coonawarra and the sale of personal property;
2. how they say that the duty of good faith owed to each of them was breached; and
3. the loss or damage that they say that each of them have suffered by reason of the breach of the duty of good faith.
The applications
6 The defendants make the following applications.
7 The first and second defendants apply to strike out the claims made against them in the amended writ of summons and statement of claim on the grounds that:
a) they disclose no reasonable cause of action and/or are scandalous, frivolous or vexatious and/or may prejudice, embarrass or delay the fair trial of the action. The application made on these grounds is pursuant to O 20 r 19(1) of the Rules of the Supreme Court 1971 (WA) (RSC);
b) they are an abuse of process of the Court. The application is made on this ground pursuant to the Court's inherent jurisdiction and RSC O 20 r 19(1)(d)
and for an order that the plaintiffs' action against the first and second defendants be dismissed.
8 The first and second defendants have filed an affidavit of Catherine Helen Morton Butt which was filed on 27 January 2016. That affidavit is not dated in the attestation clause, but the first page of the affidavit states that it was sworn on 27 January 2016. At the hearing of the first and second defendants' application, they relied upon that affidavit and also the Court's files in action CIV 2674 of 2012 and CACV 141 of 2013. CIV 2674 of 2012 was an action by the first defendant in this action against Olawa Pty Ltd as first defendant and the first plaintiff in this action and Helen Terese Bertola as second defendants. On 21 November 2013 Master Sanderson granted summary judgment in favour of the plaintiff in CIV 2674 of 2012. CACV 141 of 2013 was the file on the appeal against Master Sanderson's decision.
9 The first and second-named third defendants apply:
a) to strike out paragraphs 1 k) to 5, 8 to 10, 12, 14, 19, 21(ii), 21(v), 24(i), 27 b), and 28 of the amended statement of claim and paragraphs 7 - 8, 10, 12 and 14 of the Prime Grounds of Claim. This application is made pursuant to RSC O 20 r 19(1)(a);
b) alternatively for summary judgment pursuant to RSC O 16 in relation to those paragraphs of the amended statement of claim and the Prime Grounds of Claim;
c) to strike out paragraph 25 of the amended statement of claim and paragraphs 8 a), b) and d) of the Specific Grounds of Claim. This application is made pursuant to RSC O 20 r 19(1)(c) or alternatively RSC O 20 r 19(1)(a);
d) alternatively for summary judgment pursuant to RSC O 16 in relation to the claims pleaded in paragraph 25 of the amended statement of claim and paragraph 8 b) of the Specific Grounds of Claim;
e) to strike out paragraphs 26(iii) to (iv) of the amended statement of claim, paragraph 15 of the Prime Grounds of Claim and paragraphs 3 to 4 of the Specific Grounds of Claim. This application is made pursuant to RSC O 20 r 19(1)(c);
f) alternatively to strike out those paragraphs of the amended statement of claim, the Prime Grounds of Claim and the Specific Grounds of Claim pursuant to RSC O 20 r 19(1)(a);
g) for summary judgment pursuant to RSC O 16 in relation to the claims pleaded in paragraphs 21(i), 24(ii), to (ii) (sic) of the amended statement of claim, paragraphs 9 to 11 of the Prime Grounds of Claim and paragraph 2 of the Specific Grounds of Claim;
h) to strike out paragraphs 24, 26(i) and (iii) and 31 of the amended statement of claim, paragraphs 6, 13 and 14 of the Prime Grounds of Claim and paragraphs 2, 8 e) and 8 f) of the Specific Grounds of Claim. This application is made pursuant to RSC O 20 r 19(1)(c); and
i) to strike out paragraph 6 of the Specific Grounds of Claim. This application is made pursuant to RSC O 20 r 19(1)(c).
10 The first and second defendants have filed an affidavit of Jehan-Philippe Wood sworn on 27 January 2016.
11 The third-named third defendant applies to strike out the following parts of the plaintiffs' amended statement of claim pursuant to RSC O 20 r 19(1)(a) - (d) on the grounds that they reveal no reasonable cause of action against the third-named third defendant, they are scandalous, frivolous or vexatious and they may prejudice, embarrass or delay the fair trial of the action:
a) page 5;
b) paragraph 1(k) on page 8;
c) paragraphs 3, 4 and 5 on page 9;
d) paragraphs 6, 8 and 9 on page 10;
e) paragraph 10 on page 11;
f) paragraphs 14 and 15 on page 12;
g) paragraph 21(v) on page 15;
h) paragraphs 22 and 24 on page 16;
i) paragraphs 25 and 26 on page 17;
j) paragraph 27(b) on page 19;
k) paragraphs 27 and 28 on page 20;
l) paragraphs 29 and 30 on page 21;
m) paragraph 31 on page 22;
n) paragraphs 1, 2, 6, 7, 8, 9, 10, 12, 13, 14 and 16 of the Prime Grounds of Claim; and
o) paragraph 2, 5 and 8 of the Specific Grounds of Claim
and for an order that the plaintiffs' action against the third-named third defendant be dismissed.
12 The fourth, fifth and sixth defendants apply to strike out the following parts of the plaintiffs' amended statement of claim pursuant to RSC O 20 r 19(1)(a) and (c) on the grounds that they reveal no reasonable cause of action against the fourth, fifth and sixth defendants and may prejudice, embarrass or delay the fair trial of the action:
a) page 5 and the second paragraph on page 7;
b) the words 'And that same could not have happened but for the culpability of the Fourth Defendant and that same ought to be declared to be so by the Honourable Court' on page 10;
c) paragraph 21(iv) and (v) on page 15;
d) paragraphs 22, 23 and 24 on pages 16 - 17;
e) paragraphs 27 - 31 on pages 18 - 22; and
f) paragraphs 4, 11 and 12 of the Prime Grounds of Claim
and for an order that the plaintiffs' action against the fourth, fifth and sixth defendants be dismissed.
13 The plaintiffs have filed affidavits made by Mr Francis Peter Bertola on 5 October 2015 and filed on that day, an affidavit made by Mr Bertola on 1 September 2015 and filed on 15 February 2016, an affidavit made by Mr Bertola and sworn on 16 February 2016 and an affidavit made by Mr Bertola on 17 February 2016 and handed up in court at the hearing of the applications on 18 February 2016.
14 All parties filed submissions for the hearing on 18 February 2016. During that hearing, I gave the parties the opportunity to file further submissions. The plaintiffs, the first and second defendants and the first and second-named third defendants have done so.
15 On 7 October 2015 the parties appeared before me. After hearing from the parties, I made directions for the plaintiffs to file and serve an amended statement of claim, for the defendants to file applications they wished to make and for the parties to file outlines of submissions. I listed the hearing of the defendants' applications on 18 February 2016.
16 I did not make directions for conferral. That is because no party submitted that conferral was likely to be of any value. No party submitted on the hearing of the applications on 18 February 2016 that conferral would have achieved any practical benefit. The Court does not insist on compliance with the obligation of conferral contained in O 59 r 9 RSC when there would be no utility in doing so.1 It is my view that conferral would not have been of any benefit and I waive the obligation to file a memorandum of conferral contained in O 59 r 9(1) RSC.
17 Not all parties complied with the time limitations contained in the directions I made on 7 October 2015. At the hearing on 18 February 2016, I heard submissions from the parties. I also made directions giving the parties the opportunity to file further submissions after the hearing, which some parties did. The plaintiffs, the first and second defendants and the first and second-named third defendants did so. The other parties did not. I am satisfied that all parties had the opportunity to make and respond to submissions on the applications that concerned them.
The principles to be applied on the applications
18 In considering the applications and the submissions, I need to bear in mind that the plaintiffs are not legally represented. I need to ensure that I consider the statement of claim carefully and bear in mind that a poorly expressed or unstructured document prepared by a litigant in person can contain viable causes of action. If the statement of claim does contain a viable cause of action, then I should not summarily terminate the action.2 Due allowance must be made for the fact that the plaintiffs are not legally represented. Some leniency is required in relation to compliance with the rules. However, the defendants are entitled, as a matter of fairness to be adequately informed of the case they have to meet, just as the respondent to an appeal is so entitled.3
19 The principles applicable to an application to strike out a statement of claim on the ground that it discloses no reasonable cause of action were summarised by Master Staples in Kimberley Downs Pty Ltd v Western Australia:4
(1) The rule is intended to apply only to cases which are really not arguable and not to cases where under the previous practice demurrer would have been the proper course: Packard v Transport Trading and Agency Co Ltd(1912) 14 WALR 191 per Burnside J at p 195.
(2) On the application, not only must all the facts alleged in the statement of claim be accepted as true, but it must be taken for granted that on all other points the pleading is unassailable: Niven v Grant (1903) 29 VLR 102 per Holroyd J at p 106.
(3) Great care must be exercised to ensure that a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal: General Steel Industries Inc v Commissioner for Railways NSW (1964) 112 CLR 125 per Barwick CJ at p 130.
(4) But the rule should not be reserved for those cases where argument is unnecessary to show the futility of the plaintiff's claim. Argument, even extensive argument, may be necessary to demonstrate that the plaintiff's case is so clearly untenable that it cannot possibly succeed: ibid at p 130.
(5) As a general rule a plaintiff is entitled as of right to have his case heard, to have the facts found and then to argue the question of law as it arises before the trial judge upon the facts as found. It is only in cases in which it can be seen from the outset that, however the facts be found, there is no basis for the legal conclusion contended for by the plaintiff that the pleading should be struck out: Dalgety Australia Ltd v Rubin per Burt CJ (1984, unreported, Lib No 5485).
(6) A court at first instance should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that, as the law develops, it will be found that a cause of action will lie: Hospitals Contribution Fund of Australia v Hunt (1982-1983) 44 ALR 365 per Master Allen at 373.
20 Material which is scandalous will not be struck out unless it is also irrelevant.5
21 A pleading may be struck out pursuant to O 20 r 19(1)(c) RSC on the ground that it may prejudice, embarrass or delay a fair trial of this action. This phrase is a composite one which imports the notion the character of the pleading is such as to make the fair trial of the action more difficult to achieve, that the trial will be unduly protracted or delayed or the pleading is calculated to prejudice the legal process. Pleadings can be struck out on this ground because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the party's case with reasonable particularity or they raise a case in terms which are simply too general.6
22 Order 16 r 1 RSC enables the court to give summary judgment in a defendant's favour if satisfied that the action is frivolous or vexatious, that the defendant has a good defence on the merits or that the action should be disposed of summarily or without pleadings.
The amended statement of claim
23 To determine the applications made by the defendants, it is necessary to set out the statement of claim in some detail. Where possible, I have summarised the statement of claim. Where that has not been possible, I have quoted from it.
24 There are three plaintiffs in this action. In the statement of claim, the plaintiffs frequently refer to the plaintiff asserting a fact. It appears that they are pleading that all of the plaintiffs assert that fact. The plaintiffs also frequently refer to the plaintiff when pleading that matters have happened in the past. In referring to conduct involving or concerning the plaintiff in the past, it appears that the plaintiffs are sometimes referring to Francis Peter Bertola, the first plaintiff, and at other times are referring to other entities with which he has been associated.
25 In the first section of the statement of claim, the plaintiffs state that the defendants or their agents or servants do jointly and severally or in discrete matters each bear responsibility for a part or parts of the series of: breaches of the statute law, breaches of the criminal law, including perjury, the general law, inter alia including in respect of unjust enrichment, fraud, fraudulent conversion, breaches of contract, breaches of trust, negligence, the law of equity, tort law, the Australian Securities and Investments Commission Act 2001 (Cth), the Competition and Consumer Act 2010 (Cth) and the Insurance Contracts Act 1984 (Cth) as shown in the statement of claim and for substantial unspecified damages and costs so occasioned. The plaintiffs state that the complete evidence for their claims will be before the court after the defendants comply with their duties of discovery in this action.
26 The plaintiffs then submit that the defendants or their legal representatives ought to be dealt with for knowingly misleading the court and acting in breach of their duty of discovery on one or more previous occasions, inter alia in contravention of the duty an officer of the court owes to the court and that the fifth defendant ought to be dealt with for his failure to act judiciously when presiding over the plaintiff as a defendant in CIV 2674 of 2012.
27 The Plaintiffs then claim that they are entitled to:
1. A declaration that all of the Orders previously made in CIV 2674 of 2012 are void ab initio or, in the alternative, that in law there is no res judicata in relation to any matters dealt with in that action.
2. Reinstatement as Registered Proprietor of two land titles pursuant to the fraud exception in the statue and general law.
3. Orders in detinue for:
a) Return undamaged of chattels including farm equipment, tools, vehicles, farm chemicals, wool, livestock and personalty including the contents of the family home on the 'San Pedro' property; and/or
b) Damages for any derogation of the utility or condition of those goods; and/or
c) Damages quantified as the replacement value of any of those goods which are not returned undamaged or restitutionary orders for their damaged or derogated condition, in which case the plaintiff may elect for replacement value.
4. Damages at large under multiple heads of damages to be assessed.
5. Exemplary or punitive damages in the discretion of the court.
6. Indemnity costs.
28 The first numbered paragraph of the statement of claim contains three paragraphs. In the first paragraph of paragraph 1, the plaintiffs plead that in Supreme Court action CIV 2674 of 2012 and the relevant dealings in that matter between the plaintiff and the first defendant, the first defendant did not conduct itself acceptably, did not have clean hands as that is known to equity, did not comply with the duty of discovery, actively misled the court and was guilty of a plethora of improprieties to the extent that there can be no res judicata in those matters, inter alia due to concealed and not revealed facts.
29 In the second paragraph of paragraph 1, the plaintiffs plead that the fifth defendant did not conduct himself judicially and his conduct vitiates ab initio the orders made by him.
30 In the third paragraph of paragraph 1, the plaintiffs plead that in the proceedings pleaded in the first paragraph the first defendant:
a) was not a proper party and/or
b) made false pre-contractual representations to the plaintiff and/or
c) had no valid contract with the plaintiff and/or
d) acted in vitiating breach of contract with respect to the plaintiff and/or
e) applied duress to the plaintiff and/or
f) acted unconscionably towards the plaintiff and/or
g) failed to discover what the law requires to the plaintiff or the court and/or
h) misled the court and/or
i) acted unlawfully to appoint an agent for sale over the plaintiff's real property and without authority proceeded to sell that property in breach of trust and/or
j) acted unlawfully to appoint an agent for sale over the plaintiff's other property without authority and proceeded to sell valuable chattels, tools, machinery, equipment, livestock and personalty in breach of trust and/or
k) either directly or through an associated entity or entities such as the second defendant (as the allegedly precursive mortgagee by assignment) or the third defendant (as the originator of the contractual arrangements between the parties) or both enjoyed unjust enrichment at the plaintiff's expense by:
i. without the plaintiff's knowledge or requisite formal consent, securitising (or selling) the mortgages along with all associated rights and entitlements over the plaintiff's real property for an amount of money in excess of what the plaintiff owed;
ii. knowingly misled the plaintiff, to trick him into further contracting and providing novated mortgage security to the first defendant when the first defendant knew or should have known that there was no residual debt in relation to the precursive mortgage and misrepresenting that the mortgage to the first defendant in prospect was merely replacing a functionally and financially equal one with another lender; and
iii. financially benefitting from the further realisations on the plaintiff's assets, both real and personal, when even prima facie, based on the allegation that monies were still owed by the plaintiff (which is disputed) there was no shortfall on the unproved amount claimed, it having been met in full from the sale of real property
- to the extent that in law the decision in that action is void ab initio or otherwise void.
31 The plaintiffs plead in the paragraph 2 of the statement of claim that the issue and incidence of a process known as 'securitisation' is germane to the dealings which are the nub of this case and that on dates specified later in the statement of claim mortgages over the plaintiff's real farm property comprised of two titles, one freehold and the other leasehold, were granted by the plaintiff to the third defendant and registered by the fourth defendant.
32 In paragraph 3, the plaintiffs plead that on 2 June 2006, without the consent of the then registered owners, mortgages over both of the two properties were sold 'in a nefarious process known as "Securitisation" as described by the Reserve Bank of Australia in a 2004 published paper "Asset Securitisation in Australia" as: "the process of converting a pool of illiquid assets, such as residential mortgages into tradeable securities."' The plaintiffs plead that mortgages over the two properties were transferred in different batches. 'San Pedro' was transferred under Landgate number J 771447 TM as part of a batch of mortgages over 159 land titles transferred to the second defendant by the third defendant. 'Coonawarra' was transferred under Landgate number J 771432 TM as part of a batch of mortgages over 136 land titles transferred to the second defendant by the third defendant.
33 In paragraph 4, the plaintiffs plead that on or before 2 June 2006 San Pedro, which was the freehold property, was registered with the fourth defendant in the plaintiff's name but Coonawarra, which was the leasehold property, was still registered in the name of Lynch as the plaintiff was yet to purchase that property. The plaintiffs plead that both properties had been batched for sale in secret and 'they did acquire a "CUSIP Number" (an acronym derived from: Committee on Uniform Securities Identification Procedures) "CUSIP Global Services" is managed on behalf of the American Bankers Association (ABA) by Standard & Poor's Capital IQ and the First Defendant is capable of producing all relevant records'.
34 The plaintiffs plead in paragraph 5 that any such securitisation process, such as the two cases that they have pleaded, were incompatible with the law of Western Australia because they lacked the written consent of the registered owner as required by s 85 of the Transfer of Land Act 1893 (WA) (TLA). They plead that this could not have happened without the culpability of the fourth defendant.
35 In paragraphs 6 and 7, the plaintiffs plead that on 7 February 2007 the second defendant purportedly discharged the mortgage over Coonawarra and that the plaintiff had signed a mortgage in relation to a loan agreement set out in a letter of offer provided by the third defendant. The plaintiffs plead that on 15 February 2007 a settlement statement issued by the third defendant advised that the sum of $1,235,978.09 had been paid to the third defendant for the purchase of Coonawarra. The plaintiffs plead that no monies were paid by or to the second defendant in relation to the purchase of Coonawarra and that notwithstanding the facts pleaded the second defendant appeared on the Landgate record as mortgagee of Coonawarra. The plaintiffs plead that the second defendant was not and is not a proper party and had no contractual rights in relation to the plaintiff.
36 In paragraph 8, the plaintiffs assert that at a time prior to 2 June 2006 in relation to San Pedro and at a time prior to 3 October 2012 in relation to Coonawarra the respective defendants, or one or more of them, on one or more occasions, securitised, that is sold, the mortgages granted by the plaintiff or, in respect of Coonawarra granted by the former registered proprietor, along with all appurtenant rights as mandated by s 83(1) TLA to an unnamed third party or third parties.
37 The plaintiffs plead in paragraph 9 that any such sale would be unlawful, having regard to the TLA as all the rights had already been offered for sale and purchased by another or other parties.
38 In paragraph 10, the plaintiffs plead that on a date preceding 2 June 2006 the third defendant sold to a third party or parties all of the rights and entitlements to and in the mortgage granted by the plaintiff over San Pedro.
39 Paragraph 11 deals with a mortgage over Coonawarra held by the second defendant as mortgagee. The plaintiffs plead that the second defendant could not be the mortgagee inter alia because it had not advanced any funds to the plaintiff.
40 In paragraph 12, the plaintiffs assert that the second defendant while shown as mortgagee on one or more of the plaintiff's titles 'may or did … purport to sell or "securitise" said mortgage or mortgages or otherwise to act to facilitate same'.
41 In paragraph 13, the plaintiffs plead that the second defendant 'never was a Proper Party to these proceedings (other than as for their involvement in assisting the determination of some issues now afoot)', that it was not a proper party to CIV 2674 of 2012, that, despite misleading the court as to its asserted right to be a party to CIV 2674 of 2012, none of the relevant loan agreement, documents executed, monies paid or monies received involved the second defendant and that the second defendant cannot evidence any valid assignment of the mortgage rights.
42 The plaintiffs plead in paragraph 14 that on a date prima facie before 2 June 2006 when the title to Coonawarra and another property encumbered by the same mortgage were held in the name of Lynch one or more of the defendants sold to a third party or parties all first ranked mortgage rights and entitlements to and in the leasehold of the property, presumably along with the other property subject to the same mortgage. The plaintiffs plead that, by a process known as securitisation, the sale of those rights preceded the taking of the Coonawarra lease by the plaintiff as purportedly authorised by the then Minister for Lands or her delegate with the effect that, 'as a matter of Law:
Either No residual rights in said Lease subsisted to be passed to the Plaintiff or anyone else.
Or The granting by the Minister of a novated lease in the Plaintiff's name (irrespective of the Minister or her delegate having been materially misled by the Defendants or one of them), subsumed any and all irregularities occasioned by the prior selling to a Third party or parties of all rights going with the said land.
43 Paragraph 15 pleads that the first defendant fraudulently or negligently, or in the alternative by false pre-contractual representations, led the plaintiff to understand that the second defendant had a valid mortgage over Coonawarra when in fact the second defendant did not pay any consideration for those rights (either in its own right or as trustee for another). The plaintiffs also plead in this paragraph that the Coonawarra lease had been sold (or securitised) prior to 2 June 2006 and the third defendant had been more than paid any indebtedness in relation thereto before that date.
44 In paragraph 16, the plaintiffs plead that notwithstanding the facts pleaded by them the first defendant in or about early November 2010 presented papers relating to discharges by the second defendant of mortgages over both of the plaintiff's properties to the plaintiff with a request to execute them. They plead that this was the first occasion on which the plaintiff had any inkling that the second defendant was alleged to be his mortgagee in respect of either property. They plead that mortgage number L 513925 M over Coonawarra was registered by the first defendant as mortgagee on 21 December 2010 and that before that time the first defendant fraudulently or negligently represented to the plaintiff that it would pay or had paid the sum of approximately $1,250,000 to discharge the entitlements of the prior registered owner Lynch when in fact no such consideration, or alternatively any consideration was previously paid by the second defendant to obtain any rights over Coonawarra.
45 The plaintiffs plead in paragraph 17 that in CIV 2674 of 2012 two officers of the first defendant gave sworn evidence that the second defendant had paid such a sum of money to discharge the loan contract and mortgage of Lynch. The plaintiffs plead that in fact the third defendant, at settlement in favour of the plaintiff on 7 February 2007 had paid $1,235,978.09 to discharge a mortgage given by Lynch. This allowed the registration of a mortgage over Coonawarra which showed the second defendant as mortgagee when in fact any consideration had been paid by another.
46 In paragraph 18, the plaintiffs plead that it is not admitted that the existence of 'a Memorandum of Provisions numbered 1867952 allegedly registered at the premises of the Fourth Defendant as apparently lodged by the First Defendant was ever brought to Plaintiff's attention and at no time was a copy of same provided to Plaintiff'. The plaintiffs plead that the plaintiff was denied procedural fairness, inter alia because its signature or signatures were demanded with practically no notice and no time to seek and obtain counsel or legal advice.
47 In paragraph 19, the plaintiffs assert that the first defendant did, on or after 21 December 2010 in respect of Coonawarra and on or after 12 November 2010 in respect of San Pedro, securitise or sell either or both of those mortgages to a third party or parties.
48 The plaintiffs plead in paragraph 20 that neither the first nor second defendant 'nor any party on whose behalf they purported to act, asserting a Right to have standing to sue in the above proceedings had at the relevant time or has in their own right:
(i) legal personality or Standing to sue and/or
(ii) offered Terms Certain sufficient to form a valid Contract and/or
(iii) at the relevant time had or had access to a lawfully requisite status, namely were or had a stated agency for an Authorised Deposit-taking Institution as required by the (CTH) Australian Prudential Regulatory Authority Act 1988 and the Banking Act 1959 allowing for them to be or be party to a lawful financial Contract for lending money or the levying of interest charges.
49 In paragraph 21, the plaintiffs plead that the first defendant did by fraudulent or, alternatively negligent, or unconscionable conduct or 'vitiating Misrepresentation or Duress' in respect of purporting to merely replace contractual arrangements with the third defendant with an equivalent contract or contracts when:
(i) Neither the Facts nor the Terms were equivalent, or that Section 15 of the Carbon Rights Act 2003 applied to what was stated by or on behalf of said First Defendant to be an "equivalent" prior contract and
(ii) The First Defendant knew or should have known that the extant mortgages over Plaintiff's land titles had already been securitised or sold to a third party or parties at least once, leaving no mortgage rights or appurtenant rights to lawfully demand any payment from Plaintiff as mortgagor. That is to say that the First Defendant did Fraudulently mislead Plaintiff and misrepresent that the about to be novated mortgage with the First Defendant was merely a replacement for, with no material difference to the mortgages earlier granted to the Third Defendant.
(iii) The First Defendant did apply Duress and act Unconscionably at the above Pre-Contractual time in pressuring Plaintiff into signing a grossly Unconscionable Contract, in that it, inter alia, provided for the imminent undervalue sale of Plaintiff's real properties.
(iv) The Fourth Defendant acted Negligently or alternatively, in Breach of Duty to keep records adequate and suitably advise Plaintiff to protect Plaintiff's real property and
(v) No possessory right passed from the Second or Third Defendant as the previous asserted mortgagee to the First Defendant and the Fifth Defendant failed to require the Evidence his duty necessitated before ordering the unlawful disposal of Plaintiff's property, this failure invoking responsibility for loss and Damage against the Sixth Defendant.
50 In paragraph 22, the plaintiffs plead that the 'above facts involve Fraud which in Law vitiates all, and requires reinstatement of Plaintiff's Land Titles and further, sounds in Damages for any affected party (including Plaintiff) rateably against all Defendants'.
51 The plaintiffs plead in paragraph 23 that the fourth defendant acted 'in Negligence and/or Breach of a duty of prudential control of land title systems and records owed by the Fourth Defendant to Plaintiff in the above dealings and specifically:
(i) failure to perform a statutory duty imposed by Part IV, Division 2A of the Transfer of Land Act 1893 and consequentially, improper registration of a Carbon Rights instrument as an encumbrance against Plaintiff's titles and
(ii) Failure to provide adequate systems to differentiate between mortgages that give rights to possession and sale of real property, and instruments which do not and
(iii) improper removal of caveats placed on Plaintiff's titles and
(iv) unlawful registration of transfers of Plaintiff's titles
creating a liability in the Fourth and Sixth Defendants to Plaintiff for loss and Damage
52 In paragraph 24, the plaintiffs plead that fraudulent or alternatively negligent 'or in any event vitiating Misrepresentation by the Third and/or Second Defendant in respect of them:
(i) Without notice having sold to a third party the security given as Consideration into the purportedly valid Contract or Contracts between Plaintiff and the Third Defendant, thus relinquishing any right to sue upon said document/s and / or
(ii) Subsequently Misleading the Master of the Supreme Court and Plaintiff by, without Notice, substituting for the first ranked mortgage a Carbon Right mortgage which gives no possessory right.
(iii) Passing off to the First Defendant a Carbon Right mortgage as a first ranked mortgage over land of which Plaintiff was the Registered Proprietor when in fact the only rights said Defendant or Defendants had were subject to Sections 8(2)(a) and 15(a) of the Carbon Rights Act 2003 (WA) and Division 2A of the Land Transfer Act 1893 (WA) which required written consent of the Registered Proprietor before registration when such statutorily required consent had not been sought or obtained by the Fourth Defendant.
53 In paragraph 25, the plaintiffs plead that the third defendants:
(i) gave the plaintiff no, or no adequate pre-contractual notice of relevant terms or facts or any adequate opportunity to consider the terms or to obtain legal advice before executing a mortgage or mortgages; and
(ii) failed to give notice of or provide to the plaintiffs a copy of a memorandum of common provisions at, before or subsequent to the execution of the contract or contracts relied upon. The plaintiffs plead that this omission in law mandates that any terms contained in that contract or contracts are void as against the plaintiffs.
54 The plaintiffs plead in paragraph 26 that the first, second or third defendants or one or more of them or their agents or appointees are guilty of:
(i) breach of contract in respect of one or more essential terms, including implied terms or other terms of their contract with the plaintiff;
(ii) unconscionable conduct;
(iii) breach of trust which resulted in a large shortfall in values achieved at sale of the plaintiffs' freehold and leasehold titles for which the defendants are liable in damages; and
(iv) breach of trust which resulted in a large shortfall in values achieved at the 'Unlawful' sale of the plaintiffs' other property including farm machinery, vehicles, tools and equipment, livestock, proceeds of harvest and personalty from the family home and the home itself.
55 In the first paragraph numbered 27, the plaintiffs plead matters which they describe as 'further improprieties by an assortment of Defendants' which have come to notice just prior to the amendment of the writ and statement of claim. The matters pleaded are:
a) Discharges of mortgages not being done and duly recorded by the Fourth Defendant when a new mortgage is executed. This leaves in place two or more first ranked mortgages and whilst same would normally soon create a conflict between interested parties which needs be must be resolved in the Law of Priorities, there is another reason (below) as to why same has not and likely will not arise in the nefarious dealings known as securitisation. In respect of Plaintiff's acquisition of the "Coonawarra" leasehold property on 7 February 2007, a Discharge of Mortgage was executed by the illegitimate, (professing to be) mortgagee, the Second Defendant herein and lodged with the Fourth Defendant on that day. However, that Discharge was not recorded by the Fourth Defendant until 7 July 2010.
b) It is now tolerably clear that multiple, serial acts of securitisation are taking place by parties, including several of the Defendants herein whilst ever a mortgage subsists. This must constitute a Fraud, not only on the land title holder, but also on the investors who are purchasing the bulk, bundled, unlawfully purveyed 'securitised' mortgages. Discovery will Evidence this, but it appears that the same bundle on mortgages are being 'sold' on multiple occasions. To do this once is arguably fraudulent; it is certainly unlawful, to sell a Registered owner's mortgage AND the balance of his equity in secured real property without any notice or consent. To sell same for multiples of the value verified by sworn valuation, simply because securitisation may be done without Evidence of property values is tantamount to fraud against an investor, but to repeatedly novate the same deal with new investors is definitely fraud.
c) It is also now tolerably clear that the Fourth Defendant is allowing and facilitating such Negligent practices with the inevitable outcome that the opportunity for multiple rounds of fraud, serial sales of the same bundles of mortgages, vastly inflated as to their value as same misrepresented to investors is thus created - as an exercise in "worthless paper" creation for cash, given that a first mortgage already is was in place and a contrived but worthless 'add on' was added. To then add on multiples, further rounds of worthless paper creation sold to innocent investors for the same pool of mortgages is not merely immoral or reprehensible; it is massively Fraudulent.
The fact that no outcry has yet been heard from massively defrauded investors points to the probability that subsequent securitisations yield cash enough to provide a return investors. This is a classic "Ponzi Scheme" which the Law makes illegal and the courts have a duty to stop, not ignore. Nevertheless, there are still a number of illegitimately sanctioned fraudulent sales of Registered Owners' real property going through this Honourable Court each and every week due to identical dealings as are herein described.
57 The plaintiffs seek recovery of the mortgaged land (second paragraph numbered 27), exemplary and punitive damages and indemnity costs (paragraph 28) and unspecified damages at large, including for loss of profits, restitution in respect of real property and for the livestock, machinery and equipment that may be available, exemplary damages, punitive damages and indemnity costs (paragraph 31).
58 The 16 paragraphs of the statement of claim in the section headed Prime Grounds of Claim begin with pleas about the plaintiffs which are followed by paragraphs which repeat some of the matters pleaded in the earlier paragraphs and add some new allegations.
59 In paragraph 1 of the Prime Grounds of Claim, the plaintiffs plead that they are associated entities of long standing and a successful family farming enterprise at Bremer Bay. They plead that the enterprise was built up by Mr Bertola and his wife and that it was illegally destroyed by the actions of the defendants.
60 In paragraph 2 of the Prime Grounds of Claim, the plaintiffs plead that the second plaintiff is a trading company illegally liquidated and its assets sold off in breach of trust by the actions of the defendants. It is probably the third plaintiff which is referred to in this paragraph.
61 Paragraph 3 of the Prime Grounds of Claim pleads that the third plaintiff is a family trust set up for the benefit of the first plaintiff and his wife, that those children have contributed to the family farming enterprise for no 'fiscal' reward and that they have been unlawfully deprived of their entitlements. It is probably the second plaintiff which is referred to in this paragraph.
62 In paragraph 4 of the Prime Grounds of Claim, the plaintiffs plead that 'in the earlier proceedings in which Plaintiff was so substantially harmed, this Honourable Court, in the person of a Master, proceeded without requiring proof of any entitlement residing in the hands of any of the Defendants to make an order for possession and sale of substantial real property'.
63 In paragraph 5 of the Prime Grounds of Claim, the plaintiffs plead that they reserve their right further to amend their pleadings after completion of discovery and the issue of subpoenas.
64 Paragraph 6 of the Prime Grounds of Claim is a plea that prior to contracting with the plaintiffs the third defendant made promises and representations to the plaintiffs which were relied upon by the plaintiffs that the usual fluctuating lending facilities made available to farmers would be made available to the plaintiffs. The plaintiffs plead that these contractual obligations were not met, giving rise to a number of claims for breach of contract.
65 In paragraph 7 of the Prime Grounds of Claim, the plaintiffs plead that the third defendants securitised the mortgages over real property provided by the plaintiffs 'at a time before any attempt to artificially contrive to create an act of alleged default and obtain an order for possession and sale' of the plaintiffs' property 'with the result that the respective Defendants retained no lawful right to seek such an order for possession and sale and subsequent application to obtain that type of order were (not merely tantamount to) Fraud'. There then follows a definition of fraud as being 'action taken to unlawfully deal with Plaintiff's assets in a way or ways intended to permanently deprive Plaintiff of the benefits thereof'.
66 The plaintiffs plead in paragraph 8 of the Prime Grounds of Claim that the third defendants acted covertly.
67 In paragraph 9 of the Prime Grounds of Claim, the plaintiffs plead that the third defendant purported to create a carbon right as defined in the Carbon Rights Act 2003 over the real property of which the plaintiffs were the registered proprietor, that s 15 of the Carbon Rights Act 2003 provides that a carbon right creates no possessory rights and so no entitlement to apply for an order for possession or sale of real property, that such an order could only be sought or obtained by misleading the court, as was wilfully done and perpetrating a fraud, that the capacity to exercise a possessory right had previously been on sold to entities of persons unknown to the plaintiffs and that this undisclosed fact meant that any attempt to obtain or use possession was fraudulent.
68 In paragraph 10 of the Prime Grounds of Claim, the plaintiffs plead that there was no consideration for the third defendants' assignment of their rights over the plaintiffs' real property to the second defendant and so the transfer of those rights was invalid.
69 In paragraph 11 of the Prime Grounds of Claim, the plaintiffs plead that the fourth defendant failed to comply with its obligations and that further details will be clarified by discovery. This pleading is also made in paragraph 12 of the Prime Grounds of Claim along with a plea that the first, second and third defendants misled the court.
70 Paragraphs 13 to 15 of the Prime Grounds of Claim appear to repeat claims of misconduct made in the statement of claim. In paragraph 16 of the Prime Grounds of Claim the plaintiffs submit that the illegality that they have pleaded 'require the imposition of substantial Damages and Costs reimbursements well above the ordinary, under the heads of Damage listed above'.
71 In paragraph 1 of the Specific Grounds of Claim, the plaintiffs assert that the contract relied upon in CIV 2674 of 2012 by the defendants in this action is invalid.
72 In the first paragraph numbered 2 of the Specific Grounds of Claim, the plaintiffs plead that the three third defendants are not a legal person and so are not able to contract, that a Mr Galantino, an employee of one of the third defendants, ignored sworn valuations, justified repayment of an unmanageable part of the principal loaned in an impossible time frame and coerced the plaintiff to agree to sell his farm and that the third defendants acted unconscionably or fraudulently or applied duress and pre-contractual misrepresentation to procure acquiescence to unconscionable terms, inter alia, in a letter dated 21 May 2010 and a letter of offer dated 6 September 2010. The plaintiffs also plead that part of the fraud is that a mere carbon right was passed off as a first ranked mortgage to mislead the plaintiff and caused him to execute a later mortgage with the first defendant.
73 The plaintiffs commence the second paragraph numbered 2 of the Specific Grounds of Claim by pleading that the passing off pleaded in the first paragraph numbered 2 of the Specific Grounds of Claim caused 'the Supreme Court by and through the Judicially inadequate conduct of the Fifth Defendant in not requiring crucial evidence to issue an order for possession and sale over all that Plaintiff owned'. The remainder of the paragraph makes complaint about engagement of a liquidator by the first defendant and the conduct of that liquidator. The plaintiffs plead that the engagement of the liquidator was unlawful.
74 Paragraphs 3, 4 and 8 of the Specific Grounds of Claim appear to repeat claims of misconduct made in the statement of claim.
75 In paragraph 5 of the Specific Grounds of Claim, the plaintiffs plead that a Mr Davis on behalf of the first, second or third defendants had no authority to act as the holder of a power of attorney and that the power of attorney was restricted.
76 In paragraphs 6 and 7 of the Specific Grounds of Claim, the plaintiffs plead that the first defendant, the first-named third defendant and other entities did not hold an authorised deposit taking institution licence as required by the Australian Prudential Authority Act 1988 (Cth)and the Banking Act 1959 (Cth)and that as a consequence no debt of the plaintiffs can be recovered or appointments made.
77 In paragraphs 9, 10 and 11 of the Specific Grounds of Claim, the plaintiffs claim discovery of documents.
CIV 2674 of 2012
78 The plaintiffs claim a declaration that all of the orders made in CIV 2674 of 2012 are void ab initio or, in the alternative, that in law there is no res judicata in relation to any matters dealt with in that action.
79 As I have said earlier in these reasons CIV 2674 of 2012 was an action by the first defendant in this action against Olawa Pty Ltd as first defendant and Mr Bertola and his wife Helen Terese Bertola as second defendants. On 21 November 2013 Master Sanderson gave summary judgment in favour of the plaintiff in CIV 2674 of 2012.7 An appeal against the decision of Master Sanderson by Mr Bertola was dismissed.8
80 The facts relevant to CIV 2674 of 2012 are set out in the reasons of Master Sanderson.
81 In summary they were that before September 2010, Olawa had borrowed money from the second defendant in this action. The loan was due for repayment by 31 December 2010.
82 By an agreement dated 6 September 2010, the plaintiff in CIV 2674 of 2012 (the first defendant in this action) made two loans to Olawa. The loans were for $1,300,000 and $1, 935,000 so the total of the moneys lent was $3,235,000. Olawa was the registered proprietor of a property known as Coonawarra. The loans were secured by a mortgage over the Coonawarra property and a charge over all of Olawa's assets and undertakings. The plaintiff in CIV 2674 of 2012 also obtained from Mr and Mrs Bertola a guarantee and indemnity in respect of the monies lent to Olawa. The guarantee and indemnity was supported by a mortgage over the property known as San Pedro, the registered proprietors of which were Mr and Mrs Bertola. The securities taken by the first defendant in this action replaced equivalent securities which had been granted to the second defendant in this action.
83 The monies lent to Olawa by the plaintiff in CIV 2674 of 2012 were used to repay the second defendant in this action.
84 It was a term of both loans made by the plaintiff in CIV 2674 of 2012 that it would be repaid by 31 December 2010 out of the proceeds of sale of Coonawarra.
85 Coonawarra was not sold and the loans were not repaid by 31 December 2010. On 23 May 2011 Olawa and Mr and Mrs Bertola executed a written agreement whereby the parties agreed that the plaintiff in CIV 2674 of 2012 would increase the $1,300,000 loan by $300,000 to assist Olawa's working capital requirements. The parties also agreed that the loan of $1,935,000 would be extended to 28 February 2012 in the same amount as the initial advance. Mr and Mrs Bertola provided a further guarantee of Olawa's obligations. The parties also entered into an asset management agreement whereby Olawa and Mr and Mrs Bertola were to dispose of Coonawarra and San Pedro.
86 Neither Coonawarra nor San Pedro was sold.
87 Between 25 June and 3 September 2012, the plaintiff in CIV 2674 of 2012 sent default notices, notices of demand and a notice to quit. In CIV 2674 of 2012, the plaintiff sought possession of both properties and judgment for the debt.
88 Master Sanderson quoted the submissions of counsel for the defendants on the summary judgment application at [9] of his reasons:
The grounds advanced by the defendants in the Bertola Affidavit, as being the grounds upon which the defendants should be given leave to defend the claim, can be summarised as follows:
(a) Olawa is not indebted to ANZ, but is, in fact, indebted to PCL as the defendants did not 'authorise or direct' ANZ to discharge the PCL Facility (Bertola Affidavit at [5.1], [9], [12] arid [14]); and
(b) ANZ engaged in unconscionable conduct. In essence, this allegation relies upon the following:
(1) the defendants 'did not notice' that the letter of variation to the PCL Facility dated 5 May 2009 (5 May 2009 PCL Variation) changed the Final Repayment Date of the PCL Term Loan (which loan was re-paid as a consequence of funds advanced pursuant to the ANZ Business Loan) from the year 2031 to 31 March 2010 (Bertola Affidavit [24]), even though the defendants signed that letter by way of acceptance;
(2) whilst the facility was still a PCL Facility (but with ANZ as servicer), by a variation to the PCL Facility entered into on 21 May 2010 (21 May 2010 PCL Variation), the defendants agreed to commence marketing Coonawarra by 31 August 2010 with a view to a sale by 31 December 2010; and
(3) although the defendants agreed to the terms of the Initial ANZ Facility, which had substantially the same terms regarding repayment as the PCL Facility, it is alleged that:
(A) the defendants were 'pressured' into doing so, knowing that Olawa 'would not be able to repay the Business Loan Facility by 31 December 2010' and 'deliberately structured the new facility to force Olawa into early default' (Bertola Affidavit [40]);
(B) ANZ took advantage of the improper reduction in the term of the PCL Facility, to impose the same repayment date of 31 December 2013; and
(C) for the reasons set out at (a) above, ANZ did not advance any funds, as the PCL Facility was not repaid.
90 The Court of Appeal held that Mr Bertola's appeal had no reasonable prospect of success. The appeal was dismissed.
Further background facts
91 On 19 January 2004 Mr and Mrs Bertola granted a mortgage over San Pedro in favour of the third defendants. On 2 June 2006 the mortgage was transferred to the second defendant. On the same day the third defendants transferred a mortgage they held over Coonawarra to the second defendant. At that time the leasehold interest in Coonawarra was owned by Yvonne Phyliss Lynch.
92 On 4 June 2006 Olawa signed a contract to purchase the leasehold interest in Coonawarra from Mrs Lynch for $1,250,000. On 7 February 2007 the leasehold interest in Coonawarra was transferred from Mrs Lynch to Olawa. On the same day a mortgage granted by Olawa over Coonawarra to the second defendant was registered at Landgate.
93 As I have noted when summarising the facts of CIV 2674 of 2012, in September 2010 the first defendant lent monies and took securities which replaced equivalent securities which had been granted to the second defendant.
94 On 19 December 2013 a court appointed liquidator was appointed to Olawa. The first defendant in this action, acting through agents, took possession of San Pedro and Coonawarra as mortgagee in possession. San Pedro was sold for $1,800,000 in August 2014 and sold Coonawarra for $1,650,000 in September 2014.
95 The agents for the first defendant were appointed as receivers of Olawa on 24 September 2013.
The plaintiff's claim that the judgment in CIV 2674 of 2012 is void
96 The plaintiffs claim that a declaration that the orders made in CIV 2674 of 2012 are void ab initio or, in the alternative, that in law there is no res judicata in relation to any matters dealt with in that action.
97 The court can set aside a judgment if it was obtained by fraud or is tainted in a manner that justifies the exceptional relief of setting aside a court's judgment. The principles were explained in Wentworth v Rogers (No 5) at 538 - 539. First, the essence of an action to set aside a judgment on this ground is fraud. As in all actions based on fraud, particulars of the fraud claimed must be precisely given. Secondly, it must be shown by the party asserting that a judgment was obtained by fraud that there has been a new discovery of something material, in the sense that fresh facts have been found which provide a reason for setting aside the judgment. Thirdly, a mere suspicion of fraud will not be sufficient to secure relief. Fourthly, although perjury by the successful party or a witness or witnesses may, if later discovered, warrant the setting aside of a judgment on the ground that it was obtained by fraud, and although there may be exceptional cases in which such proof of perjury could suffice, without more to warrant relief of this kind, the mere allegation, or even proof, of perjury will not normally be sufficient to attract such drastic and exceptional relief as to set aside a judgment. Fifthly, it must be shown that the successful party was responsible for the fraud which taints the judgment under challenge. Sixthly, the burden of establishing the components necessary to warrant the drastic step of setting aside a judgment allegedly affected by fraud or other relevant taint lies on the party impugning the judgment.
98 The plaintiffs make a number of general allegations against the first defendant in the way it conducted itself in CIV 2674 of 2012. They contend that the first defendant did not conduct itself acceptably, did not have clean hands in equity, did not comply with the duty of discovery, actively misled the court and was guilty of a plethora of improprieties. However, the plaintiffs have failed to identify in their statement of claim particulars which would justify setting aside the judgment in CIV 2674 of 2012 or the discovery of fresh facts which would warrant the drastic and exceptional relief of setting aside the judgment.
99 I conclude that the plaintiffs cannot succeed in their claim that the orders made in CIV 2674 of 2012 are void and that the statement of claim discloses no reasonable cause of action for that relief.
The first, second and third defendants' applications that the claims in respect of the granting of securities be struck out
100 The first and second defendants submit that the plaintiffs' claims in this action are attempts by Mr Bertola to re-litigate the issues which were the subject of CIV 2674 of 2012. The first plaintiff submits that the majority of the allegations against it should be struck out or dismissed on the basis of the principles of res judicata, issue estoppel, Anshun estoppel or abuse of process. The second defendant submits that the majority of the allegations made against it ought to be struck out on the basis of the principle of Anshun estoppel or abuse of process. Like the second defendant, the third defendants were not parties to CIV 2674 of 2012. However, they also point to the judgment in that action in their submissions.
101 Res judicata and issue estoppel involve mutual rights and obligations. The only persons who can take advantage of them are those who would have been bound by them if the decision had gone the other way.9 The first defendant is the only defendant in this action who was a party to CIV 2674 of 2012. Therefore only the first defendant could take advantage of res judicata or issue estoppel. It is only the first defendant who seeks to do so.
102 Res judicata operates to prevent a party attempting to litigate a cause of action which has merged into judgment in a prior proceeding. Issue estoppel arises when a party seeks to litigate a matter of fact or law which has necessarily been decided in an earlier action.10
103 Anshun estoppel arises when it appears that the matter sought to be litigated in an action was so relevant to the subject of an earlier action that it would have been unreasonable not to rely upon it.11Anshun estoppel does not require mutuality.12
104 All of these principles operate against the broader backdrop that the court has inherent power to prevent its procedures from being abused.13105 The plaintiffs' claim that the securities granted to the first, second and third defendants were invalid, that Olawa and Mr and Mrs Bertola were not indebted to them and that the plaintiffs have suffered loss by reason of the conduct of the first, second and third defendants in relation to the granting of those securities can be summarised as follows:
1. Mortgages had been securitised;
2. The terms of the documents were not disclosed before mortgages were required to be signed;
3. Mr and Mrs Bertola were placed under duress before mortgages were signed;
4. The defendants acted unconscionably;
5. The defendants acted fraudulently;
6. Mortgages were not validly assigned
7. The defendants failed to comply with requirements contained in legislation.
106 All of these claims are an abuse of process. This court has decided in CIV 2674 of 2012 that the securities held by the first defendant were valid and that Olawa and Mr and Mrs Bertola were indebted to the first defendant. By the time judgment was given in CIV 2674 of 2012 the second and third defendants no longer held any securities and Olawa and Mr and Mrs Bertola were no longer indebted to them. The securities taken by the first defendant were taken on the discharge of earlier securities.
107 The claims made by the plaintiffs in this action that the securities granted to the first, second and third defendants were invalid, that Olawa and Mr and Mrs Bertola were not indebted to them and that the plaintiffs have suffered loss by reason of the conduct of the first, second and third defendants in relation to the granting of those securities attempts by the plaintiffs to litigate issues that were resolved in CIV 2674 of 2012. This is made abundantly clear by the order sought by the plaintiffs that the orders made in that action are void ab initio. It would be an abuse of the court's process to allow the plaintiffs to continue with the claims which seek to challenge the result of that action.
108 In my view there is no basis upon which the claims can succeed. The plaintiffs have filed two lengthy statements of claim. They have failed to identify particulars which would justify setting aside the judgment in CIV 2674 of 2012 or the discovery of fresh facts which provide a reason for setting aside the judgment. I see no basis upon which the plaintiffs should be given the opportunity to re-plead the claims that the securities granted to the first, second and third defendants were invalid, that Olawa and Mr and Mrs Bertola were not indebted to them or that they have suffered loss by reason of the conduct of the first, second and third defendants in relation to the granting of those securities. I bear in mind that the plaintiffs are not legally represented. Due allowance and leniency should be extended to them. However, the statement of claim provides no intelligible basis for these claims.
109 Further the plaintiffs seem to accept that they have no claim against the second defendant. They plead in paragraph 13 of the statement of claim that the second defendant is not a proper party to this other to assist in the determination of some of the issues raised in the action. That is not a valid basis upon which the second defendant can be named as a defendant to this action.
The claims made by the third plaintiff
110 The third plaintiff is Mr Bertola as director of Olawa. Olawa has been placed in liquidation. Mr Bertola has no standing to bring an action as director of Olawa. The third plaintiff cannot succeed in any claims in this action and all of its claims should be struck out because they are frivolous, vexatious and an abuse of process.
The claims that property was sold at an undervalue
111 The plaintiffs claim in paragraphs 26 (iii) and (iv) of the statement of claim that property was sold at an undervalue. To the extent that those claims are made against the second, third, fourth, fifth and sixth defendants those claims cannot succeed. The sales were not made by them. Any such claims are frivolous, vexatious and an abuse of process.
112 The claims are pleaded as being claims for breach of trust. Those claims cannot succeed. A mortgagee is not a trustee of the power of sale.14
113 However, a mortgagee is required to exercise the power of sale in good faith.15
114 Mr Bertola was a mortgagee of San Pedro and a guarantor of the loan to Olawa. It may be that the FP and HT Bertola Family Trust was affected by the exercise of the power of sale in a way that it is not made clear in the current pleading.
115 It is possible that the first plaintiff and the second plaintiff may be able to plead a claim that in exercising the powers of sale of San Pedro, Coonawarra and personal property the first defendant did not comply with the duty of good faith and that they have suffered loss.
116 In my view, I should give the first plaintiff and the second plaintiff the opportunity to do so. In accordance with O 20 r 19(5) RSC, the first plaintiff and the second plaintiff should file a minute of the proposed amended statement of claim so that their proposed amended statement of claim can be considered before they are given leave to file an amended pleading.
117 It will be necessary for the first plaintiff and the second plaintiff clearly to plead:
1. the facts that they say give rise to a duty of good faith being owed to each of them in respect of the sale of San Pedro, the sale of Coonawarra and the sale of personal property;
2. how they say that the duty of good faith owed to each of them was breached; and
3. the loss or damage that they say that each of them have suffered by reason of the breach of the duty of good faith.
The claims against the fourth, fifth and sixth defendants
118 The fourth, fifth and sixth defendants contend that the plaintiffs have no reasonable cause of action against them.
119 The plaintiffs claim that the fourth defendant is liable for negligence or breach of statutory duty. The relevant pleadings allege:
1. Culpability in permitting securitisation in a manner that was not consistent with s 85 of the TLA (paragraph 5);
2. Negligence or breach of duty in keeping records and advising the plaintiff (paragraph 21(iv));
3. Negligence or breach of statutory duty in control of the land titles system and records (paragraph 23);
4. Allowing negligent practices (paragraph 27(c)); and
5. Impropriety in carrying out its responsibilities (paragraphs 11 and 12 of the Prime Grounds of Claim).
120 The plaintiffs claim that the sixth defendant is liable for the alleged negligence or breach of statutory duty in control of the land titles system and records (paragraph 23).
121 For the plaintiffs to have a cause of action for breach of statutory duty the legislation upon which they rely must impose an obligation for the protection or benefit of a particular class of persons and the legislation must, upon its proper construction, be intended to provide a ground of civil liability.16
122 The amended statement of claim does not identify any basis upon which any duty of care at common law or statutory duty can be established. Further, s 198 of the TLA provides that the fourth defendant is not liable to any action suit or proceeding for or in respect of any act or matter bona fide done or omitted to be done in the exercise or supposed exercise of the powers of the TLA or the Electronic Conveyancing Act 2014 (WA). Section 198 of the TLA demonstrates that the TLA does not provide a civil liability for any actions of the fourth defendant that does not comply with the TLA and that, in any event, the plaintiffs cannot bring any action in respect of these matters against the fourth defendant. The statement of claim discloses no reasonable cause of action against the fourth defendant or the sixth defendant. The paragraphs of the statement of claim in which claim is made against them should be struck out and the action against them should be dismissed.
123 The plaintiffs' claim against the fifth defendant concerns only the performance of his functions as an officer of the Supreme Court of Western Australia. The Supreme Court of Western Australia is a superior court of record.17 The Supreme Court consists of its judges and masters.18 A master is appointed by the Governor.19
124 A judge of a superior court is not liable to be sued in respect of acts done in the performance of the judge's judicial duties.20 This immunity from civil liability is conferred by the common law, not for the private advantage of judges, but for the protection of judicial independence in the public interest.21 A master of the Supreme Court performing judicial functions in the exercise of the court's jurisdiction is entitled to the same immunity as a judge.22
125 The fifth defendant can have no liability to the plaintiffs. The statement of claim discloses no reasonable cause of action against him. The paragraphs of the statement of claim in which claim is made against him should be struck out and the action against him dismissed.
Outcome of the first and second defendants' application
126 The statement of claim will be struck out on the grounds that it discloses no reasonable cause of action, that it may prejudice, embarrass or delay the fair trial of the action and that it is an abuse of process of the court.
127 The action of all plaintiffs against the second defendant will be dismissed. The action of the third plaintiff against the second defendant will be dismissed.
128 The first and second plaintiffs will have liberty to file a minute of proposed amended statement of claim against the first defendant making claim that San Pedro, Coonawarra and personal property were sold in breach of the first defendant's duty of good faith.
Outcome of the first and second-named third defendants' applications
129 Summary judgment will be given in favour of the first and second-named third defendants in respect of paragraphs of the statement of claim in which the plaintiffs make claim that they are entitled to relief because mortgages had been securitised, namely paragraphs 1k) to 5, 8 to 10, 12, 14, 19, 21(ii), 21(v), 24(i), 27 b), and 28 of the amended statement of claim and paragraphs 7 - 8, 10, 12 and 14 of the Prime Grounds of Claim. The claims are an abuse of process and the first and second-named third defendants have a good defence on the merits to those claims.
130 Summary judgment will be given in favour of the first and second-named third defendants in respect of paragraphs of the statement of claim in which the plaintiffs make claim that they are entitled to relief because the terms of documents were not disclosed to them before they were required to be signed, namely paragraph 25 of the amended statement of claim and paragraph 8 (a), (b) and (d) of the Specific Grounds of Claim. The claims are an abuse of process and the first and second-named third defendants have a good defence on the merits to those claims.
131 The paragraphs in which the plaintiffs make claim against the first and second-named third defendants that they are entitled to relief because property was sold at an undervalue, namely paragraphs 26(iii) to (iv) of the amended statement of claim, paragraph 15 of the Prime Grounds of Claim and paragraphs 3 to 4 of the Specific Grounds of Claim will be struck out on the grounds that they may prejudice, embarrass or delay the fair trial of the action. The plaintiffs' claims made in those paragraphs against the first and second-named third defendants will be dismissed. The plaintiffs cannot make claim against the third defendants in respect of those sales. The sales were not made by the third defendants.
132 Summary judgment will be given in favour of the first and second-named third defendants in respect of paragraphs of the statement of claim in which the plaintiffs make claim that they are entitled to relief arising out of the creation of carbon rights, namely paragraph 24(i), 24(ii), 24(iii) of the amended statement of claim, paragraphs 9 to 11of the Prime Grounds of Claim and paragraph 2 of the Specific Grounds of Claim. The first and second-named third defendants have a good defence on the merits to those claims. The claims are not intelligible and there is no basis on which the plaintiffs could be entitled to relief in respect of those claims.
133 The paragraphs in which the plaintiffs make claim against the first and second-named third defendants that they are entitled to relief because of misrepresentations, unconscionable conduct, breach of contract and the failure to hold a deposit taking licence, namely paragraphs 24, 26(i) and (ii) and 31 of the amended statement of claim, paragraphs 6, 13 and 14 of the Prime Grounds of Claim and paragraphs 2, 8 (e) and (f) and 6 of the Specific Grounds of Claim will be struck out on the grounds that they may prejudice, embarrass or delay the fair trial of the action. The plaintiffs' claims made in those paragraphs against the first and second-named third defendants will be dismissed. The plaintiffs cannot make claim against the third defendants in respect of those matters, which are an abuse of process.
Outcome of the third-named third defendants' applications
134 The paragraphs of the statement of claim in which the plaintiffs make claim against the third-named third defendant, namely page 5, paragraphs 1(k), 3, 4, 5, 6, 8, 9, 10, 14, 15, 21(v), 22, 24, 25, 26, 27, 28, 29, 30 and 31 of the amended statement of claim, paragraphs 1, 2, 6, 7, 8, 9, 10, 12, 13, 14 and 16 of the Prime Grounds of Claim and paragraph 2, 5 and 8 of the Specific Grounds of Claim be struck out on the ground they may prejudice, embarrass or delay the fair trial of the action and as an abuse of process of the court. The plaintiffs' claims against the third-named third defendant will be dismissed. The plaintiffs cannot succeed in any of their claims against the third-named third defendant.
Outcome of the fourth, fifth and sixth defendants' applications
135 The paragraphs of the statement of claim in which the plaintiffs make claim against the fourth, fifth and sixth defendants, namely page 5, the second paragraph on page 7, the words 'And that same could not have happened but for the culpability of the Fourth Defendant and that same ought to be declared to be so by the Honourable Court' on page 10, paragraphs 21(iv) and (v), 22, 23, 24, 27, 28, 29, 30 and 31 of the amended statement of claim and paragraphs 4, 11 and 12 of the Prime Grounds of Claim will be struck out as disclosing no reasonable cause of action against those defendants and on the ground that they may prejudice, embarrass or delay the fair trial of the action. The plaintiffs' claims against the fourth, fifth and sixth defendants will be dismissed. The plaintiffs cannot succeed in any of their claims against those defendants.
1Wildflower Electrical Refrigeration Service (WA) v Refrigid Pty Ltd [2014] WASC 382 [14] (Acting Master Gething, as his Honour then was).
2Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536 - 537.
3Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10].
4Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414; 25 August 1986).
5Christie v Christie (1873) LR 8 Ch App 499, 503 - 504.
6Hart-Roach v Public Trustee (Unreported, WASC, Library No 980044, 11 February 1998) 8 - 9 (Murray J).
7Australia & New Zealand Banking Group Ltd v Olawa Pty Ltd [2013] WASC 415.
8Bertola v Australia & New Zealand Banking Group Ltd [2014] WASCA 66.
9QBE Insurance (Australia) Ltd v Lois Nominees Pty Ltd [2012] WASCA 186 [179] (Murphy JA).
10Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589, 597 (Gibbs CJ, Mason & Aickin JJ).
11Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589, 602 (Gibbs CJ, Mason & Aickin JJ).
12Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [121] (Murphy JA).
13Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [118] (Murphy JA).
14Warner v Jacob (1882) 20 Ch D 220; MBF Investments Pty Ltd v Nolan [2011] VSCA 114; (2011) 37 VR 116.
15Pendlebury v Colonial Mutual Life Assurance Society Ltd [1912] HCA 9; (1912) 13 CLR 676.
16Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410, 424 (Brennan CJ, Dawson & Toohey JJ).
17Supreme Court Act 1935 (WA) s 6(2).
18Supreme Court Act 1935 (WA) s 6(3).
19Supreme Court Act 1935 (WA) s 11A.
20Gallo v Dawson (1988) 82 ALR 401.
21Fingleton v The Queen [2005] HCA 34; (2005) 227 CLR 166, 38 (Gleeson CJ).
22Wentworth v Wentworth [2000] NSWCA 350; (2001) 52 NSWLR 602 [58] (Fitzgerald JA).
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