Blake v Bankwest a Division of Commonwealth Bank of Australia
[2019] WASC 390
•8 NOVEMBER 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BLAKE -v- BANKWEST A DIVISION OF COMMONWEALTH BANK OF AUSTRALIA [2019] WASC 390
CORAM: ALLANSON J
HEARD: 16 OCTOBER 2019
DELIVERED : 8 NOVEMBER 2019
FILE NO/S: CIV 2997 of 2018
BETWEEN: JOHN FRANCIS BLAKE
Plaintiff
AND
BANKWEST A DIVISION OF COMMONWEALTH BANK OF AUSTRALIA
Defendant
Catchwords:
Practice and procedure - Where defendant applied for summary judgment - Where plaintiff shareholder of a company to which defendant provided financial facilities - Whether plaintiff claims for wrongs to the company - Whether the plaintiff has standing to bring action
Practice and procedure - Where defendant applied for summary judgment - Where plaintiff claims for causes of action vested in his trustee in bankruptcy - Where proceedings defective not nullity - Whether judgment should be entered or pleading struck out
Legislation:
Federal Court of Australia Act 1976 (Cth), s 31A
Supreme Court Rules 1971 (WA), O 16
Result:
Summary judgment application granted in part
Strike out application granted in part
Category: B
Representation:
Counsel:
| Plaintiff | : | In person |
| Defendant | : | Mr S K Dharmananda SC |
Solicitors:
| Plaintiff | : | In person |
| Defendant | : | Corrs Chambers Westgarth |
Case(s) referred to in decision(s):
Morris v IMF Bentham Limited [2018] FCA 1009
Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 80
Rajski v Scitec Corporation Pty Ltd (Unreported, NSWCA, 16 June 1986)
Rolfe v Investec Bank (Australia) Ltd [2014] VSCA 38
Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118
Stanich v Bankwest a Division of Commonwealth Bank of Australia [2019] WASC 357
Stone v ACE-IRM Insurance Broking Pty Ltd [2003] QCA 218
ALLANSON J:
The plaintiff, John Francis Blake, commenced this action by writ filed 13 November 2018. A statement of claim was filed the same day.
The defendant, Bankwest (the Bank), entered an appearance on 30 November 2018.
On 21 December 2018, the Bank applied by chamber summons for orders that:
1Judgment be entered for the Defendant on the basis that the action is frivolous, the Defendant has a good defence, and the action should be disposed of summarily pursuant to Order 16 rule 1 of the Rules of the Supreme Court 1971 (WA) (Rules).
2Alternatively to order 1 above:
(a)the Defendant have leave to bring on or before 21 December 2018 an application pursuant to Order 20 rule 19 of the Rules to strike out the statement of claim dated 13 November 2018 in its entirety; and
(b)pursuant to Order 20 rule 19(1)(a) and (c) of the Rules, the statement of claim dated 13 November 2018 be struck out in its entirety because it does not disclose a reasonable cause of action.
3The Plaintiff pay the Defendant's costs.
The application was supported by an affidavit of Michelle Leanne Dean, affirmed 21 December 2018. Ms Dean filed a supplementary affidavit, affirmed 22 February 2019.
In written submissions filed in support of the application, the Bank submitted that the claims brought by Mr Blake suffer from two fatal flaws:
(a)they are claims which belong to corporations, not Blake; and
(b)if any of the claims are Blake's, those claim vested in the bankruptcy trustee on Blake's bankruptcy, and cannot be maintained, so the proceedings are a nullity. The proceeding should be dismissed.
Mr Blake was in bankruptcy between 13 February 2014 and 2 April 2017.
On 8 October 2019, I delivered judgment on the Bank's application for summary judgment in an action brought by Gary Michael Stanich.[1] Mr Stanich filed his action about three weeks after Mr Blake filed his writ.
[1] CIV 3082 of 2018.
Both actions relate to the dealings between the Bank and three companies, Prodale Pty Ltd, Cassius Holdings Pty Ltd, and Tocoan Pty Ltd. Mr Blake and Mr Stanich were shareholders in those companies. Mr Blake was a director of all three companies, Mr Stanich was a director of two of them. Both plaintiffs gave guarantees in relation to financial facilities between the companies and the Bank.
The statements of claim in each action are almost identical. None of the differences is material in this application.
Mr Stanich had also been declared bankrupt, and discharged from bankruptcy before commencing his action. The critical difference between the two cases is that, by the time of the hearing of the application for summary judgment, Mr Stanich had received an assignment from his trustee in bankruptcy of any personal causes of action against the Bank which had vested in the trustee. Mr Blake had also sought an assignment from his trustee. In an affidavit sworn 1 October 2019, Mr Blake attached correspondence and legal advice relating to his dealings with the trustee. The trustee has not assigned to Mr Blake the causes of action which vested in the trustee. Mr Blake deposed that negotiations are ongoing.
In Stanich v Bankwest a Division of Commonwealth Bank of Australia [2019] WASC 357, I discussed the pleadings in detail, and the common factual circumstances regarding the steps being taken by Mr Blake and Mr Stanich to reinstate the registration of Prodale. Mr Blake was present at the hearing of the summary judgment application. He was given leave to sit with Mr Stanich at the bar table and give him advice and assistance (although not to speak on his behalf). It was apparent at the hearing of the present application that he was familiar with my earlier judgment.
In these unusual circumstances, I will not repeat what I wrote in the earlier decision. With one exception, those reasons apply here. I am satisfied:
(1)Judgment should be entered on the penalty interest claim, and the claims relating to the appointment and actions of the receivers and managers (including the claim for failure to register a charge). That is, there should be summary judgment on those claims in statement of claim [68] to [95], and [105] to [111].
(2)There should be judgment for the Bank on the claim to set aside variations to the Advance Facilities on the 'no consideration' plea in statement of claim [28], [31] and [35].
(3)There is no arguable basis for the plea that Mr Blake was owed a fiduciary duty by the Bank, through Mr Earl, but no separate claim appears to be made for breach of fiduciary duty.
The critical difference is that Mr Blake has not been able to receive an assignment of those personal claims which vested in his trustee on bankruptcy. The question is whether judgment should be entered on those claims, by reason of the plaintiff's lack of standing to pursue those claims.
The Bank's written submissions were predicated on the proceedings being a nullity. In Mr Stanich's case, the Bank accepted that the proceedings, although defective when commenced, were not a nullity.[2] The Bank still pressed for summary judgment on the basis that, since its application was brought in December 2018, Mr Blake has been unable to secure assignment of the relevant causes of action. There is no evidence that Mr Blake will succeed in his attempts to obtain an assignment.
[2] Stone v ACE-IRM Insurance Broking Pty Ltd [2003] QCA 218; Rolfe v Investec Bank (Australia) Ltd [2014] VSCA 38 [86].
The Bank referred to the judgment in Morris v IMF Bentham Limited.[3] The plaintiff in that case had commenced proceedings on causes of action that had vested in his trustee on bankruptcy. The plaintiff had attempted to obtain a transfer or assignment but had been unable or unwilling to agree to the terms on which the trustee was prepared to assign the causes of action. At the time of the summary judgment application, the right to bring proceedings still resided with the trustee. Wigney J said that the plaintiff had been allowed a lengthy period of time to secure the transfer, and the lack of capacity or standing to bring the action would be sufficient reason to enter summary judgment against him.[4]
[3] Morris v IMF Bentham Limited [2018] FCA 1009.
[4] Morris v IMF Bentham Limited [76] ‑ [77].
The question before Wigney J arose under s 31A of the Federal Court of Australia Act 1976 (Cth), by which the court may give judgment in relation to the whole or any part of a proceeding if satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. Section 31A 'is to be understood as requiring a different inquiry from that which had to be made under earlier procedural regimes'.[5]
[5] Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 [56].
The question under Supreme Court Rules O 16 is whether the action is frivolous or vexatious, the defendant has a good defence on the merits, or the action should be disposed of summarily or without pleadings. The action is defective, but the defect may be cured by a subsequent assignment. I am not satisfied that the evidence shows that the gate has been shut on that outcome, although the chances that Mr Blake will receive an assignment diminish as time passes.
The defendant has not shown that the action is frivolous or vexatious; and the question of standing relates to a procedural defect and not the merits. Mr Blake may not be successful in his negotiations with his former trustee, but while negotiations continue I am also not satisfied that the defendant has shown that the action should be disposed of summarily.
In Mr Stanich's case, I struck out the balance of the statement of claim and said that if he wished to re-plead, he must confine the plea to personal causes of action against the Bank and to losses that are separate and distinct from those suffered by the companies and caused by a breach of duty independently owed to him. On balance, I believe the interests of justice are better served by following the same course here. Judgment will be entered on those parts of the claim identified above as causes of action that may only be brought by the companies, and the balance of the claim will be struck out.
Mr Blake will be further limited in that he may not seek to proceed on causes of action which vested in his trustee unless he is able, before re-pleading, to have them assigned to him.
Finally, I will deal briefly with the application made by Mr Blake at the hearing to adjourn. I refused the adjournment.
The application by Mr Blake to adjourn was brought 10 months after the summary judgment application was filed. The summary judgment application had originally been listed for hearing in June, but was adjourned at Mr Blake's request (the Bank consenting) to allow proceedings before the master for the re-registration of Prodale to proceed, and also to allow Mr Blake to negotiate with his trustee in bankruptcy.
An adjournment would, in my opinion, have prejudiced the Bank and provided no real benefit to Mr Blake.
The defect in the plea is fundamental. No attempt was made from when the Bank filed its application in December 2018 to the date of hearing to amend the statement of claim and nothing was presented at the hearing by way of a minute of proposed amendment. There are limits to the allowance that the court can or should make for an unrepresented litigant. As Samuels JA said in Rajski v Scitec Corporation Pty Ltd:
... the absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement ... An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent.[6]
[6] Rajski v Scitec Corporation Pty Ltd (Unreported, NSWCA, 16 June 1986) [27] - cited with approval in Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806 [47].
Mr Blake and Mr Stanich apparently wish to proceed with their actions together. There would be an obvious efficiency in the two matters being managed and heard together to the extent that they raise the same issues. But there is presently the fundamental difference that Mr Blake cannot proceed on personal causes of action. It is preferable to deal with the cases separately.
On the Bank's application there will be summary judgment on the claims relating to penalty interest and the appointment and actions of the receivers and managers in statement of claim [68] to [95], and [105] to [111]. There should also be judgment for the Bank on the claim to set aside variations to the Advance Facilities on the 'no consideration' plea in statement of claim [28], [31] and [35].
The balance of the Statement of Claim will be struck out on the grounds that it does not disclose a reasonable cause of action.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CG
Associate to the Honourable Justice Allanson7 NOVEMBER 2019
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