Catlin v National Australia Bank Ltd
[2003] WASC 245
CATLIN & ANOR -v- NATIONAL AUSTRALIA BANK LTD & ANOR [2003] WASC 245
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 245 | |
| Case No: | CIV:2200/2002 | 17 SEPTEMBER & 24 NOVEMBER 2003 | |
| Coram: | MASTER NEWNES | 17/12/03 | |
| 28 | Judgment Part: | 1 of 1 | |
| Result: | Claims struck out | ||
| B | |||
| PDF Version |
| Parties: | ADRIENNE MARIE CATLIN ADRIAN CHARLES STEPHEN CATLIN NATIONAL AUSTRALIA BANK LTD INDIRAN RAJADURAI |
Catchwords: | Practice and procedure Application to strike out claims Whether res judicata or issue estoppel apply to claim Anshun estoppel Whether plaintiffs can amend to alter capacity in which they sue Turns on own facts |
Legislation: | Fair Trading Act 1987 (WA), s 11 Rules of the Supreme Court, O 16 r 1, O 20, r 19, O 20 r 5(4) |
Case References: | Angel v National Australia Bank Ltd [2001] FCA 1053 Blair v Curren (1939) 62 CLR 464 Bride v Peat Marwick Mitchell [1989] WAR 383 Bride v The Australian Bank Ltd & Ors, unreported; FCt SCt of WA, 25 September 1996, Library No 960565 Catlin & Anor v National Australia Bank Ltd [2002] WASCA 224 Catlin & Anor v National Australia Bank Ltd [2002] WASCA 316 Catlin & Anor v National Australia Bank Ltd [2003] WASC 97 Catlin & Anor v Registrar of Titles & Ors [2003] WASC 94 Chamberlain v Deputy Commissioner of Taxation (ACT) (1988) 164 CLR 502 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 79 Inglis v Commonwealth Trading Bank of Australia Ltd (1972) 126 CLR 161 Jackson v Goldsmith (1950) 81 CLR 446 Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Ramsey v Pilgrim (1967) 118 CLR 271 Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572 Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 335 Bren v Australian Memory Pty Ltd (1997) 149 ALR 393 Dey v Victorian Railways Commissioners (1948) 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 Lidden v Corporate Buyers Ltd (1996) 67 FCR 560 McKechnie v Campbell (1996) 17 WAR 62 Northwest Water Ltd v Binnie & Partners [1990] All ER 547 Pearson v Commissioner of Taxation 116 FCR 357 Queensland v Commonwealth Territory Representation Case (No 2) (1977) 139 CLR 585 Rogers v R (1994) 181 CLR 251 Romage v WACLAW (1998) 12 NSWLR 84 Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 Tudor Grange Holdings Ltd v City Bank NA [1991] 4 All ER 1 Watts v Midland Bank [1986] BCLC 12 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 Woddington v Silverchain Nursing Association (1998) 20 WAR 269 Zotovic v Bobel Boat Hire Pty Ltd (1985) 62 ACTR 29 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- ADRIAN CHARLES STEPHEN CATLIN
Plaintiffs
AND
NATIONAL AUSTRALIA BANK LTD
First Defendant
INDIRAN RAJADURAI
Second Defendant
Catchwords:
Practice and procedure - Application to strike out claims - Whether res judicata or issue estoppel apply to claim - Anshun estoppel - Whether plaintiffs can amend to alter capacity in which they sue - Turns on own facts
Legislation:
Fair Trading Act 1987 (WA), s 11
Rules of the Supreme Court, O 16 r 1, O 20, r 19, O 20 r 5(4)
(Page 2)
Result:
Claims struck out
Category: B
Representation:
Counsel:
Plaintiffs : In person
First Defendant : Ms P E Cahill
Second Defendant : Ms K S Banks-Smith
Solicitors:
Plaintiffs : In person
First Defendant : Jackson McDonald
Second Defendant : Freehills
Case(s) referred to in judgment(s):
Angel v National Australia Bank Ltd [2001] FCA 1053
Blair v Curren (1939) 62 CLR 464
Bride v Peat Marwick Mitchell [1989] WAR 383
Bride v The Australian Bank Ltd & Ors, unreported; FCt SCt of WA, 25 September 1996, Library No 960565
Catlin & Anor v National Australia Bank Ltd [2002] WASCA 224
Catlin & Anor v National Australia Bank Ltd [2002] WASCA 316
Catlin & Anor v National Australia Bank Ltd [2003] WASC 97
Catlin & Anor v Registrar of Titles & Ors [2003] WASC 94
Chamberlain v Deputy Commissioner of Taxation (ACT) (1988) 164 CLR 502
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 79
Inglis v Commonwealth Trading Bank of Australia Ltd (1972) 126 CLR 161
Jackson v Goldsmith (1950) 81 CLR 446
Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Ramsey v Pilgrim (1967) 118 CLR 271
Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572
(Page 3)
Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 335
Case(s) also cited:
Bren v Australian Memory Pty Ltd (1997) 149 ALR 393
Dey v Victorian Railways Commissioners (1948) 78 CLR 62
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432
Lidden v Corporate Buyers Ltd (1996) 67 FCR 560
McKechnie v Campbell (1996) 17 WAR 62
Northwest Water Ltd v Binnie & Partners [1990] All ER 547
Pearson v Commissioner of Taxation 116 FCR 357
Queensland v Commonwealth Territory Representation Case (No 2) (1977) 139 CLR 585
Rogers v R (1994) 181 CLR 251
Romage v WACLAW (1998) 12 NSWLR 84
Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275
Tudor Grange Holdings Ltd v City Bank NA [1991] 4 All ER 1
Watts v Midland Bank [1986] BCLC 12
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Woddington v Silverchain Nursing Association (1998) 20 WAR 269
Zotovic v Bobel Boat Hire Pty Ltd (1985) 62 ACTR 29
(Page 4)
1 MASTER NEWNES: There are two applications by the first defendant before me. The first is an application by the first defendant for summary judgment under O 16 and, in the alternative, for an order striking out the plaintiffs' claim under O 20 r 19 as an abuse of process. In substance, the first defendant says that the claims made by the plaintiffs against it are res judicata, those issues having been determined in earlier proceedings between them, or are the subject of an issue estoppel. Alternatively, the first defendant says that the plaintiffs are estopped from raising those issues on the grounds described by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.
2 The second application is to strike out pars 18 - 24 of the amended statement of claim on the ground that they are an abuse of process.
3 There is also an application by the second defendant to strike out the (separate) statement of claim against him and for the plaintiffs' claim to be dismissed.
4 To set the plaintiffs' claim against the first defendant in context, it is necessary to refer to the background to these proceedings and the earlier litigation between the plaintiffs (the "Catlins") and the first defendant (the "Bank").
5 The Catlins were customers of the Bank. On 19 December 1995, the Bank approved a home loan to the plaintiffs in the sum of $150,000. The loan was secured by a mortgage ("the house mortgage") granted by the Catlins over their home at 13 Shadwick Drive, Karratha. The house mortgage secured all moneys then or thereafter owing by the Catlins to the Bank.
6 In 1997, the Bank approved two further loans. The first was a Flexiplus mortgage facility approved on 19 December 1997 for a maximum sum of $79,000. The other was an Instalment Loan facility in the name of ANA Enterprises Pty Ltd ("ANA"), as trustee for the Catlin Family Trust, trading as Adrienne's Cafe (the "Cafe"), which was approved on 19 December 1997. The Catlins entered into a guarantee of ANA's obligations under this loan facility to a maximum of $50,000.
7 The house mortgage, by its terms, secured the moneys advanced to the Catlins under the 1997 facility and any liability of the Catlins under the guarantee. The mortgage was up-stamped in respect of the amount of that additional security.
(Page 5)
8 On 14 November 2000, the Bank served a notice of demand on the Catlins. The demand stated that ANA had failed to pay an amount of $33,454.20 due under the Instalment Loan facility and the Catlins were thereby in default under their guarantee. The demand stated if they failed to remedy the default within 31 days, the Catlins would also be in default under the Flexiplus loan facility, with the result that the further sum of $81,923.96 would become payable pursuant to that facility.
9 Subsequently, certain moneys were paid to the Bank and the matter was pursued no further.
10 On 7 June 2001, a second notice of demand was served on the Catlins demanding payment of the whole of the moneys owing under the three accounts. The total sum demanded was $269,132.78. Payment of that sum was not made by the Catlins and on 18 June 2001 the Bank served on them a notice to quit possession of the property at 13 Shadwick Drive, Karratha within 10 days. The Catlins did not comply with the notice and the Bank instituted proceedings in this Court for an order for possession.
11 After the entry of an appearance to the writ by the Catlins, the Bank applied for summary judgment. That application came on for hearing before Master Bredmeyer on 15 March 2002. At that hearing the learned Master had before him, in opposition to the application, affidavits of Mr Catlin sworn 2 November 2001 and 14 March 2002, and affidavits of Mrs Catlin sworn 2 November 2001 and 14 March 2002.
12 At the hearing of the summary judgment application, the Catlins raised four defences. They were, in essence:
1. The Bank had sold the Cafe, owned by ANA, at an undervalue;
2. The Catlins and the Bank had entered into an agreement to settle the Catlins' outstanding indebtedness to the Bank and the Bank was in breach of the agreement in seeking to enforce its security;
3. The loans secured by the Bank's mortgage were not in arrears when demand was made;
4. Mrs Catlin had entered into the guarantee without any legal advice and without any explanation of its effect.
13 In addition, the Catlins made an application for a stay of the proceedings on the ground that they had been charged with criminal
(Page 6)
- offences arising out of their operation of the bank accounts and were awaiting trial on those charges. They contended that the civil proceedings would prejudice their rights in the criminal proceedings and, therefore, the civil proceedings should be stayed pending finalisation of the criminal proceedings. The learned Master refused to grant a stay.
14 The first ground of defence relied upon by the Catlins, the alleged sale of the Cafe at an undervalue, was rejected by the learned Master on the basis of the principle in Inglis v Commonwealth Trading Bank of Australia Ltd (1972) 126 CLR 161, there being no payment into Court of the amount secured.
15 In his reasons for judgment in respect of the second ground of defence, the alleged agreement between the Bank and the Catlins, Master Bredmeyer summarised the Catlins' contentions as follows:
" … [in his affidavit] under the hearing [sic heading] 'Agreement with the Plaintiff to settle the debt' [Mr Catlin] there refers to various proposals made by the defendants to settle the debt. One of those proposals is contained in a letter from Arns & Associates, solicitors, who were then acting for the defendants, dated 30 June 2000. This letter was sent during the period of the receivership, the receiver having been appointed on 23 May. In that letter, Mr Arns, on behalf of the defendants, said that his clients had been given tentative finance approval by Shelf Lease & Finance Services subject to adequate security being provided in the sum of $500,000. The writer asked if the bank was willing to accept that $500,000 in full and final settlement of all debts and enter into a deed of release and discharge. Mr Catlin's affidavit does not annexe a letter from the bank accepting that offer, but he says on 19 June 2000 his wife telephoned Mark Murrell of the bank's office in Perth and he 'is informed by her and verily believe that Mark Murrell agreed to a settlement of $500,000'. That was prior to this particular offer being put in writing and is not an acceptance of the written offer. The affidavit goes on to state how the defendants attempted to arrange the finance of $500,000 …
Mr Catlin goes on to say that on the afternoon of 13 October 2000 at 4.55 pm the receiver handed to his wife a handwritten letter seeking a resolution of the deal to settle for $500,000 by 5.30 pm. … [Mr Catlin] arranged for the receiver to speak to Liberty Finance and to Clough Engineering to establish if the
(Page 7)
- approvals had been given as outlined, but, given the lateness of the hour, it was difficult to contact them and, in any event, the receiver did not seem interested in reaching a genuine solution. He said, 'It was apparent by about 6 pm that the receiver was going to remove us from the cafe' and had security guards in place to ensure that they did not come back. He said the receiver signed the offer to purchase already mentioned of $110,000 plus stock at 9 pm that night."
- The learned Master concluded:
"I am unable to see that all of that amounts to an arguable defence. The proposal for a $500,000 settlement in complete satisfaction of the defendants' debts to the bank was never agreed in writing by the bank. The time given by the receiver in his letter of 13 October to provide written confirmation of the financial approval from the non-bank financial institution, and written confirmation of Clough Engineering's intention to inject $109,000, was ridiculously short. The receiver demanded confirmation by 5.30 pm on that day. However, seen in the context of Mr Arns' offer letter of 30 June 3000, as at 13 October 2000 the defendants had had three-and-a-half months to show confirmation of the finance available to satisfy the bank that the offer was genuine. Also, it was a compromise offer. The bank's debt exceeded $500,000. The bank did not have to accept a compromise offer. There is no letter of acceptance annexed to Mr Catlin's affidavit, neither is there any verbal acceptance from any bank officer post-30 June."
"I consider the [Catlins] have no arguable defence in saying that the three loans the subject of the mortgage were not in default when the notices of demand were issued."
17 The learned Master concluded that, on the facts, no arguable defence was available on the fourth ground relied upon; that is, that Mrs Catlin had entered into the guarantee without any legal advice or explanation as to its effect.
(Page 8)
18 The plaintiffs subsequently applied to the Full Court for a stay of execution pending the determination of the plaintiffs' appeal against the Master's decision. In the course of its reasons for decision in refusing the stay, reported as Catlin & Anor v National Australia Bank Ltd [2002] WASCA 224, the Full Court said, in relation to the alleged agreement between the Catlins and the Bank:
"26. The appellants further contend that the learned Master erred in failing to have regard to their offer made to the respondent to compromise the debt by the payment of the sum of $500,000. They contend that an officer of the respondent agreed on its behalf on 19 June 2000 to accept such a settlement, but by selling the business on 13 October 2000 the respondent made it impossible for the offer of compromise to be put into effect. It seems that there was to be some refinancing of at least part of the debt, upon which the appellants hoped to reach an agreement with the respondent.
27. At pars [22] - [24] the Master referred to this and the evidence by which the appellants sought to establish that until the receiver signed the offer to purchase the business known as Adrienne's Cafe the appellants had in place, or had promised to them, finance to enable them to raise the sum of $500,000. The Master found no arguable defence in the facts established before him and we can see no error in his approach. This was a proposal. It was not, it would seem, ever accepted by the respondent, although the appellants contend that an officer of the bank had indicated that the offer of compromise might be approved.
28. However, if there was an accepted offer of compromise, there is nothing to indicate that it was in terms which would preclude the respondent from relying upon its security at a later time, given that there is no suggestion that there was any tender of payment of any kind, let alone pursuant to an accepted offer of compromise, by the time the operative notice of demand upon which the respondent relies was given. As counsel for the respondent put it to us, the appellants have acknowledged their debt. It is not contested that they were in default. No payments had been made or tendered and the debt
(Page 9)
- continues, having regard to the accrual of interest, to grow."
19 On 6 November 2002, the plaintiffs renewed their application to the Full Court for a stay of execution on the basis that there was fresh evidence. This application was heard by a differently constituted Full Court. On this occasion, the Full Court also had before it an affidavit sworn by Mrs Catlin on 4 November 2002. In the affidavit, Mrs Catlin referred to a conversation that she said she had recently had with Mr Murrell, the Bank officer through whom it was alleged the agreement with the Bank had been made. Mrs Catlin said Mr Murrell had confirmed to her that on 21 June 2000 he had agreed, on behalf of the Bank, that the Bank would accept the sum of $500,000 in full and final satisfaction of all the Catlins' indebtedness to it and would release the securities. Mrs Catlin also said that Mr Murrell told her the agreement would have been noted on the bank files because he would have made a diary record of it. Mrs Catlin said that Mr Murrell told her he clearly remembered the agreement and that the Catlins should ask for access to the bank's records.
20 Mrs Catlin contended before the Full Court that there was now, which had not been previously, firm evidence about an agreement with the Bank to settle the outstanding debt.
21 In refusing the stay of execution, in Catlin & Anor v National Australia Bank Ltd [2002] WASCA 316, Templeman J (with whom Wheeler and McKechnie JJ agreed) said:
"It is submitted by Mrs Catlin that in the circumstances a promissory estoppel arises which would have prevented the bank from moving to take possession. However, I am not persuaded that there is any evidence of that because there is no evidence of any representation made by the bank beyond apparently an agreement to extend to 31 July 2000.
In any event, even if there was a promissory estoppel, a promise can be withdrawn on reasonable notice. In the circumstances, albeit that the notice when given was very short, apparently only an hour or so, it would, I think, be unlikely that the Court would exercise any discretion in favour of the Catlins. There is no evidence that even then, some two months beyond the extension they had sought, they were in a position to raise the $500,000.
(Page 10)
- It seems to me therefore, that the new evidence which the Catlins seek to rely on does not carry the matter any further, and I would not on the basis of that material be prepared to stay the execution of the order made by Master Bredmeyer."
22 On 26 August 2002 the Catlins commenced the current proceedings against the Bank and the Receiver. In the initial statement of claim the Catlins sued in their personal capacity. On 26 July 2003 the statement of claim against the first defendant was struck out as disclosing no cause of action: Catlin & Anor v National Australia Bank Ltd [2003] WASC 97. The first defendant's application for summary judgment was stood over until the pleading had been put in order. The plaintiffs were granted leave to file an amended statement of claim. That was filed on 4 August 2003. The first defendant has applied to strike that out as disclosing no reasonable cause of action or as embarrassing. It is of significance that, at least in part, by the amended statement of claim the plaintiffs now seek to sue as trustees of the Catlin Family Trust.
23 In the amended statement of claim, the plaintiffs plead that they are husband and wife and are the trustees of the Catlin Family Trust. So far as is material, they go on to plead:
"4. At all material times the Trust was the owner of the business known as ADRIENNE'S CAFE (hereinafter called 'the Cafe') which carried on business in Karratha.
5. The plaintiffs were the registered proprietors of the residential property situated at 13 Shadwick Drive, Karratha ('the house').
6. Between the 19th December 1995 and the 19th December 1997 the plaintiffs and the Trust entered into 3 loan contracts with the first defendant.
PARTICULARS OF LOAN CONTRACTS
- 6.1 A Home Loan account 10-333-0889 for $150,000.00 approved on the 19th December 1995;
6.2 A Flexiplus Mortgage facility account 63-506-0645 approved on the 19th December 1997 for a maximum sum of $79,000.00.
(Page 11)
- 6.3 An Instalment Loan facility account 69-658-5165 approved on the 19th December 1997.
(hereinafter called 'the loans'), which were secured by a registered mortgage against the house.
- 7. On or about the 19th December 1995, the first defendant and the plaintiffs in consideration of the Plaintiffs opening and operating bank accounts with the first defendant made an agreement in which the first defendant would provide to the plaintiffs financial and banking advice ('the First Agreement').
PARTICULARS OF THE FIRST AGREEMENT BEING MADE
- 7.1 The first defendant was represented by Graeme Thompson an employee of the first defendant. The plaintiffs were represented by the first named plaintiff.
7.2 The agreement was reached at the offices of the first defendant at its Karratha branch.
8. The plaintiffs on or about the 19th December 1995 opened and then operated with the first defendant at Karratha accounts between 1995 and November 1999 as follows:-
8.1 A Cafe account ('the Cafe account');
8.2 ANA Promotions account, ('the ANA account').
8.3 A joint personal account in the names of the plaintiffs being account 63506-0648 ('the personal account').
9. It was an express term of the First Agreement that the plaintiffs could operate in overdraft the ANA account, and the Cafe account, and the personal account.
10. It was an express term of the First Agreement that:
(Page 12)
- 10.1 The plaintiffs could overdraw the ANA account and deposit the overdrawn funds to the Cafe account so that the Cafe account was in credit;
10.2 The plaintiffs could at the expiration of 30 days or at a time when told by the First Defendant to so do then overdraw the Cafe account and deposit the overdrawn funds to the ANA account so that the ANA account was then in credit;
10.3 The plaintiffs could continue to overdraw the ANA account and the Cafe account on a cyclical basis so that during each 30 day cycle or at a time when told by the First Defendant to so do at least one of the Cafe and ANA accounts was in credit.
- 11. It was an express term of the First Agreement that the first defendant would not cancel the overdraft facility pleaded in paragraph 9 whilst the plaintiffs continued to conduct the accounts pleaded in paragraph 8 hereof.
12. Between the 3rd November 1997 and the 22nd November 1999 the plaintiffs in accordance with the term of the agreement pleaded in paragraph 10 hereof drew and deposited cheques from and into the ANA and Cafe accounts with the advice, knowledge and consent of the first defendant and from time to time as told to do by the first defendant who then levied certain financial charges and fees in respect of these transactions.
PARTICULARS OF CHEQUES AND FINANCIAL CHARGES
The details and dates of these transactions and the employees of the first defendant who had the knowledge and gave consent to the transactions exceed 3 folios and will be provided separately and before trial.
13. At all material times the plaintiffs conducted the accounts pleaded in paragraph 8 with the first defendant.
14. In breach of the express term of the First Agreement pleaded in paragraph 11 hereof, the first defendant on or about the 23rd November 1999 at Karratha revoked the
(Page 13)
- overdraft for each of the ANA, Cafe and personal accounts.
- 15. On or about the 1st May 2000, the first defendant claimed that the Trust was in default of its obligation for the loans and was indebted to it for $322,654.05, of which sum it claimed the plaintiffs had personally guaranteed the sum of $50,000.00, and it claimed from the plaintiffs personally the sum of $50,000 and interest.
16. The first defendant on the 4th July 2001 issued a Supreme Court Writ of Summons against the plaintiffs personally seeking possession of the house, on the basis that the Trust and the plaintiffs had defaulted on the loans, and had failed to pay to it the sums pleaded in paragraph 15 hereof.
17. On the 3rd May 2002 Master Bredmeyer in the Supreme Court gave the first defendant an Order for possession of the house and the first defendant has since taken possession of the house and has sold it.
18. The first defendant sold the house at a value substantially less than its true value causing a loss to the plaintiffs personally of $80,000.
PARTICULARS OF CALCULATION OF LOSS
- 18.1 The market value of the house: $300,000.00
18.2 The sale price of the house: $220,000.00
Loss: $80,000.00
19. After it took possession of the house the first defendant owed a duty of care to the plaintiffs when selling the house, to prepare it for sale and in selling it to achieve the best possible price.
20. The first defendant breached its duty of care to the plaintiffs as follows:
20.1 It failed to maintain the lawns and gardens and failed to water the gardens with the result in the
(Page 14)
- hot Karratha climate that the lawns and gardens died before the sale;
- 20.2 The house was vandalised with windows and doors broken after the first defendant took possession and the first defendant did not carry out repairs before it was open to the public for sale;
20.3 The first defendant sold the house to Mr and Mrs Howe by private treaty when it knew or ought to have known that Mrs Howe was a real estate sales person who was employed by the First Defendant's agent and had a conflict of interest and was aware of the true value of the house.
- 21. As a result of the breaches pleaded in paragraph 20 hereof the plaintiffs suffered the loss pleaded in paragraph 18 hereof.
22. On the 21st June 2000 at Perth the plaintiffs and the first defendant entered into an agreement with respect to the discharge of the plaintiffs and Trust's total liability to the first defendant (hereinafter called 'the Second Agreement').
PARTICULARS OF THE SECOND AGREEMENT
22.1 The first defendant was represented by its employee Mark Murrell;
22.2 The plaintiffs were represented by the second name plaintiff,
23. It was an express term of the Second Agreement that in consideration of the plaintiffs paying to the first defendant the sum of $500,000 the first defendant would completely discharge the plaintiffs and the Trust from all liability to it.
24. It was an implied term of the Second Agreement that the payment of $500,000 by the plaintiffs to the first defendant would be made within a reasonable time, and in the event that the first defendant then required a firm
(Page 15)
- settlement date for payment, reasonable written notice of its requirement thereof would be given to the plaintiffs.
- PARTICULARS OF IMPLICATION
24.1 The term is implied:
24.1.1. in that it is reasonable and equitable;
24.1.2. is necessary to give efficacy to the Second Agreement;
24.1.3. is so obvious that 'it goes without saying';
24.1.4. is capable of clear expression, and
24.1.5. does not contradict any express terms of the Second Agreement.
- 25. In breach of the Second Agreement the first defendant instructed the second defendant to sell the Cafe on the 13th October 2000.
PARTICULARS OF BREACH
- 25.1 The first defendant failed to give reasonable written notice or any notice at all to the plaintiffs of its requirement for a firm settlement date or of its intention to sell the Cafe;
25.2 The sale of the Cafe denied the plaintiffs the means of raising $500,000.00 as the Cafe was providing an income for the plaintiffs; and was to be used as security for a loan to raise the $500,000.
26. Further with respect to the personal account the plaintiffs allege, the first defendant by its conduct pleaded in paragraphs 14, and 20.1 to 20.3 acted in an unconscionable manner in breach of section 11 of the Fair Trading Act 1987, and caused them loss and damage.
27. As a result of the breach of the first agreement as pleaded in paragraph 14 the plaintiffs suffered the following loss and damage:
(Page 16)
- 27.1 The plaintiffs could no longer operate the ANA and Cafe accounts, and in turn could not operate the Cafe business, which resulted in the default pleaded in paragraph 15 hereof.
27.2 The first defendant appointed the second defendant as receiver and he in turn sold the Cafe;
27.3 The plaintiffs therefore suffered the loss of the Cafe and income therefrom.
- 28. As a result of the breaches pleaded in paragraph 25 hereof, and as an alternative claim for damages to the breach of the first agreement, the plaintiffs have suffered loss and damage:
PARTICULARS OF LOSS AND DAMAGE
- 28.1 The Trust lost the Cafe causing a monetary loss of $350,000.00 or thereabouts;
28.2 The plaintiffs personally have lost their employment with the Cafe and therefore an annual joint income of $50,000 being a loss of $225,000.00 to the date hereof, which is accruing at the rate of $4,166 per month.
AND THE PLAINTIFF CLAIMS AS AGAINST THE FIRST DEFENDANT
1 Damages pursuant to paragraph 18 for $80,000;
2 Damages pursuant to paragraph 27 or alternatively paragraph 28;
3 Damages pursuant to paragraphs 26;
4 Interest on the awards of damages from the 13th October 2000 at 8% per annum until payment or judgment."
24 It must be said, with respect to the Catlins, that the statement of claim is not easy to follow. That is no doubt due, in part, to the fact that the Catlins are acting in person and, understandably, have had difficulty in drawing a pleading in what is a not uncomplicated matter. Another reason, however, is that they have failed adequately to distinguish
(Page 17)
- between claims made in their personal capacity and claims sought to be made in their capacity as trustees of the Trust.
25 Moreover, the statement of claim entirely omits any reference to the fact that, between 20 May 1987 and 15 December 2002, ANA was the trustee of the Trust. Although in the initial statement of claim against the first defendant, which was struck out, there was a reference to ANA in its capacity as trustee, all reference to ANA has now disappeared. ANA was deregistered under s 601AB of the Corporations Act on 15 December 2002. The Catlins said from the Bar table they were appointed trustees of the Trust on 14 March 2003. That also emerges from the Catlins' claim against the second defendant.
26 In my view, the amended statement of claim would be liable to be struck out as embarrassing on the basis that it fails sufficiently to distinguish between the Catlins in their personal capacity and as trustees of the Trust, and appears to plead, contrary to the acknowledged fact, that the Catlins were at all material times the trustee of the Trust.
27 It appears, however, from the amended statement of claim that there are essentially four claims made against the Bank. Three claims are said to arise out of the alleged "First Agreement" and one claim is said to arise out of the alleged "Second Agreement".
28 It is alleged that the Bank was in breach of the "First Agreement" in that it cancelled the overdrafts and, following that breach, making demand for repayment of the amounts outstanding under the three accounts, including an amount of $50,000 claimed against the Catlins personally pursuant to their personal guarantee of ANA's loan account, secured by the mortgage over their house.
29 The Catlins say, first, that as a result of the breach they could no longer operate the ANA and Cafe accounts and therefore could not operate the Cafe, leading to the default under the various loan agreements with the Bank. As a consequence, it is alleged, the Bank appointed a receiver and the receiver sold the Cafe. The Catlins say that they lost the Cafe and the income from it and they seek damages for breach of contract.
30 Secondly, the Catlins say that, as a result of the default brought about by the breach of the First Agreement, the Bank obtained an order for possession of the house and subsequently sold it at an undervalue. The Catlins say that, in selling it at an undervalue, the Bank was in breach of its duty of care to them. The Catlins claim the sum of $80,000, being the amount of the alleged undervalue.
(Page 18)
31 Thirdly, it is alleged that the cancellation of the overdraft in breach of the alleged First Agreement, and the failure of the Bank to exercise reasonable care in the sale of the house, constituted unconscionable conduct, contrary to s 11 of the Fair Trading Act 1987 (WA).
32 Fourthly, it is alleged that in breach of the "Second Agreement" the Bank instructed the second defendant to sell the Cafe, causing the Catlins to lose the value of the Cafe and their personal income from it.
33 As I have said, it is not at all clear which of the claims are made by the Catlins in their personal capacity and which they seek to make as trustees of the Trust. The point is significant beyond the pleading difficulties it causes. That is because the first defendant says that, so far as the Catlins seek to claim as trustees of the Trust, such a claim is not open to them in these proceedings. The first defendant made two substantive submissions in that regard.
34 First, the Catlins' claim as trustees first emerged in the amended statement of claim. It was hitherto apparent from the writ and the original statement of claim that they sued in their personal capacities. Order 21 r 5(4) provides that an amendment to alter the capacity in which a party sues may be allowed if the capacity in which, if the amendment is made, the party will sue, is one in which at the date of issue of the writ the party might have sued. It was submitted that the Catlins could not have sued as trustees as at the date of the issue of the writ, 26 August 2002, because they were not then trustees. At that date ANA was the trustee of the Trust. On their own admission the Catlins did not become trustees of the Trust until 14 March 2003. They cannot, therefore, now amend the writ or statement of claim to sue in their capacity as trustees.
35 In my view, that is right, if and to the extent that the Catlins propose that, instead of in their personal capacity, they are to be substituted as plaintiffs in their capacity as trustees. As they were not, and therefore could not have sued as, trustees at the time the writ was issued, they cannot now be substituted as plaintiffs in that capacity; it is irrelevant that since the writ was issued they have been appointed trustees: Bride v The Australian Bank Ltd & Ors, unreported; FCt SCt of WA, 25 September 1996, Library No 960565.
36 It appears, however, that the Catlins propose to be plaintiffs in both capacities, but in respect of different claims; that is to say, they seek to be added as plaintiffs in their capacity as trustees. Quite which claims they seek to pursue in what capacity is not entirely clear.
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37 Counsel for the first defendant opposed any leave being granted to add the Catlins as parties in their capacity as trustees, if such an amendment is open to them. Counsel submitted that this application had gone on far too long, and it was too late in the day, to contemplate that. I accept that.
38 It was also contended by the first defendant that, in any event, the Catlins have no arguable claim as trustees. It was submitted, in essence, that the trustee of the Trust was not a party to the First Agreement and accordingly cannot sue on it. The First Agreement is alleged to have been made between the Catlins and the Bank, in consideration of the Bank providing "financial and banking advice" to the Catlins. At the relevant time, ANA was the trustee of the Trust. The amended statement of claim does not allege to any basis upon which the Catlins, in their current capacity as trustees of the Trust, would be entitled to sue for breach of the First Agreement.
39 The same difficulty arises with any claim under the alleged Second Agreement. The Second Agreement is alleged to have been made on 19 December 1995, at a time when ANA was the trustee of the Trust. It is not alleged that ANA was a party to the Second Agreement. The parties to the alleged agreement were the Catlins in their personal capacities and the Bank. There is nothing pleaded which would give the Catlins, as trustees, a cause of action under the Second Agreement.
40 In my view, on that basis also the claims by the Catlins as trustees are liable to be struck out.
41 The first defendant also seeks judgment under O 16 on the basis that, to the extent the claims are made by the Catlins in their personal capacities, those claims are not open to them.
42 It is clear that the power to order summary judgment must be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 79.
43 The first issue on this application is whether the claims that the Catlins now seek to make against the Bank are res judicata or whether there is an issue estoppel which precludes the Catlins from prosecuting these claims.
44 The rule as to res judicata is that, where an action has been brought and judgment has been entered in that action, no other proceedings can
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- thereafter be maintained on the same cause of action: Jackson v Goldsmith (1950) 81 CLR 446, at 466.
45 The distinction between res judicata and issue estoppel was described by Dixon J in Blair v Curren (1939) 62 CLR 464, at 532, in the following terms:
"The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer any independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order."
46 There is a question as to what material a Court may look at when seeking to ascertain whether the res judicata rule applies. The issue was discussed in Angel v National Australia Bank Ltd [2001] FCA 1053 where, having reviewed the authorities, Carr J reached the view that the same approach is to be taken in respect of both res judicata and issue estoppel. That is to say, that in both cases the Court is entitled to look not only at the formal judgment but also the reasons for judgment, any pleadings and the evidence. I respectfully agree with the conclusion reached by his Honour. In this case, in my view, regard may be had to the reasons for judgment and the affidavit evidence in the summary judgment proceedings and in the proceedings in the Full Court which followed it.
47 In Blair v Curren (supra), Dixon J described the principle of issue estoppel as follows (at 531 – 532):
"A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same party or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily establishes as the legal foundation or justification of its conclusion whether that conclusion is a money sum to be recovered or that the doing of an act be commanded or be restrained or that rights be declared."
48 The estoppel extends, not only to ultimate issues that are expressly declared in the judgment or order, but to any matter which it was necessary to decide or central to the determination, even if that matter was
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- not itself contested in the litigation: Blair v Curren per Dixon J at 531 - 533; Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572. In the case of both res judicata and issue estoppel, it is necessary to focus on the substance, not the form, of the relevant actions: Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 per Clarke JA, at 559; Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 335 per Gummow J, at 347
49 In determining whether res judicata applies or an issue estoppel arises, the starting-point is what was decided in the summary judgment proceedings.
50 In my view, the judgment entered on 3 May 2000, and affirmed by the decisions of the Full Court on appeal, decided that default had occurred under the three loan agreements referred to, that the Catlins were in default under the house mortgage and that the Bank was entitled to possession of the house under that mortgage. It also decided that no binding agreement had been made between the Catlins and the Bank in the terms now alleged to constitute the "Second Agreement".
51 It follows, in my view, that an issue estoppel arises in respect of the Catlins' claim under the Second Agreement. This Court has already found as a fact that no such binding agreement was ever made. In addition, to the extent the Catlins seek to establish that they were not in default under the loan accounts they are estopped from doing so. That, too, is the subject of an express finding in the earlier proceedings.
52 The Catlins contend that any such estoppel cannot, however, affect them in their capacity as trustees of the Trust, as the trustee was not a party to the earlier proceedings.
53 As a general proposition, that is clearly right: Bride v Peat Marwick Mitchell [1989] WAR 383 per Malcolm CJ, at 389, and the cases there cited. But, for the reasons I have previously given, I consider that a claim in their capacity as trustee of the Trust is not available to the Catlins in this action. I might also add that they are likely to face an additional difficulty. If the trustees have any entitlement to sue under the Second Agreement, that presumably would arise from some right derived by, through or under the Catlins in their personal capacities. Any entitlement derived from the Catlins in their personal capacity is unlikely to avail them as trustees as there has been an express finding of this Court that the Second Agreement was never made between the Catlins and the Bank. If
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- the Catlins, as trustees, acquired any rights from themselves in their personal capacities, they are likely to be bound, as trustees, by the earlier decisions by privity of interest: Ramsey v Pilgrim (1967) 118 CLR 271.
54 The next question is whether the claims pleaded in respect of the alleged First Agreement are open to the Catlins. The Bank submits that they are not. It submits that what, in substance, is alleged by the Catlins is that, by virtue of the alleged First Agreement, the loan accounts were not in default and the Bank was therefore not entitled to cancel the overdraft facilities and make demand as it purported to do. The Bank submits that, in the summary judgment proceedings, there was an express finding that the loan accounts were in default and therefore the issue is res judicata or the subject of an issue estoppel.
55 Alternatively, the Bank says this was a defence that was open to the Catlins to raise in the summary judgment proceedings. Had it been made out on the facts, it would have provided a complete defence to the Bank's claim to possession of the house. It is too late to raise it now. Moreover, a finding to that effect now would be inconsistent with the express finding of Master Bredmeyer that the Catlins were in default in respect of the various loan accounts.
56 In Port of Melbourne Authority v Anshun (supra), Gibbs CJ, Mason and Aickin JJ said, at 602:
"There will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding."
- At 603 - 604 their Honours said:
"The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By 'conflicting' judgments we include judgments which are contradictory, though they may
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- not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction."
57 In Bryant v Commonwealth Bank of Australia(supra) the Full Court of the Federal Court said:
"… where, as here, a defendant's claim is intimately connected with that of the plaintiff, in the sense that each arises, substantially, out of the same set of facts, there is every reason to require that both be litigated at the same time; thereby minimizing costs and avoiding the possibility of inconsistent judgments."
58 In my view, the Catlins are estopped from relying in these proceedings on the alleged First Agreement. The alleged First Agreement was so relevant to the subject matter of the summary judgment proceedings that it would have been unreasonable for the Catlins not to rely upon it in those proceedings. It was directly relevant to whether the Catlins and ANA were in breach of the loan agreements and, accordingly, whether the Bank was entitled to possession of the house under the mortgage. The outcome depended upon a finding that the loan accounts were in default and that the Catlins were in breach of their obligations to the Bank. That finding was expressly made in those proceedings.
59 It is not, in my view, to the point that the First Agreement is now sought to be raised in relation to the sale of the Cafe. A finding in favour of the Catlins in the current proceedings would necessarily be inconsistent with the previous decision of this Court that the loan accounts were in default and that the Bank was entitled to enforce its security, in circumstances where the alleged First Agreement could have been raised in the earlier proceedings.
60 On the material before me, no special circumstances existed which would have justified the matter not being raised in the earlier proceedings. It is too late to raise it now. There must be an end to litigation and the Bank is entitled to finality in the manner it now seeks in respect of the matter: Chamberlain v Deputy Commissioner of Taxation (ACT) (1988) 164 CLR 502, at 510 - 11.
61 For the reasons I have already given, no claim under the First Agreement is available to the Catlins as trustees of the Trust in this action.
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62 In these proceedings, the Catlins also claim damages for an alleged breach of a duty of care owed to them by the Bank, in that the Bank, as mortgagee, sold the house at an undervalue. The statement of claim particularises the respects in which it is alleged the Bank was in breach of that duty.
63 The Bank says first, that it did not owe the alleged duty of care to the Catlins and secondly, that the specific matters relied upon by the Catlins as constituting a breach of the duty have already been held by this Court, in Catlin & Anor v Registrar of Titles & Ors [2003] WASC 94, not to amount to a breach by the Bank of its obligations to the Catlins in respect of the sale of the house. That case concerned an application for an extension of a caveat lodged by the Catlins over the property. The caveat was lodged to prevent the completion of the mortgagee's sale to a third party, on the basis that the property had been sold at an undervalue and the Bank was therefore in breach of its obligations to the Catlins. In an affidavit sworn in support of the application, Mr Catlin set out the grounds upon which it was said the Bank was in breach of its obligations to the Catlins in respect of the sale. In dismissing the application, EM Heenan J held that those matters did not amount to a breach by the Bank of its obligations to the Catlins. Those matters are the same as the particulars relied upon in the statement of claim in this action.
64 In my view, therefore, the Catlins' claim as it is pleaded is unsustainable. That is not to say, however, that the Catlins are precluded from bringing a claim against the Bank for a breach of its obligations in respect of the sale of the house, if evidence of such a breach exists. But the breach of duty pleaded in the statement of claim is not maintainable at law. This Court has already found that the matters currently relied upon do not constitute a breach of the Bank's obligations to the Catlins. The plea should therefore be struck out.
65 The Catlins also claim in par 26 of the amended statement of claim that the Bank acted in an unconscionable manner, contrary to s 11 of the Fair Trading Act, and seek damages. A similar claim was made in the initial statement of claim and was struck out on the ground that it disclosed no reasonable cause of action. The present claim, in my view, is equally unsustainable and for the same reason. Section 11(5) of the Act limits the services to which s 11 applies to services "of a kind ordinarily acquired for personal, domestic or household consumption". The services allegedly supplied by the Bank plainly do not fall within that description. Accordingly, s 11 has no application.
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66 I would therefore strike out the amended statement of claim and would dismiss the claims by the Catlins in their personal capacities, save for that alleged in pars 16 to 21 of the amended statement of claim.
67 It is now necessary to turn to the claim against the second defendant. That claim is now contained in a separate statement of claim, although the claim is brought in this action. The initial statement of claim was filed on 29 November 2002. At that time, as was pleaded, ANA was the trustee of the Trust. It was not, and is not, a party to the action and the claims against the second defendant were made by the Catlins in their personal capacities.
68 A minute of amended statement of claim was filed on 21 March 2003. The amendments to the statement of claim were not opposed by the second defendant, subject to the preservation of his right to pursue an application to strike it out and to apply for summary judgment.
69 The Catlins have since filed a further minute of proposed amended statement of claim. That was filed on 4 September 2003. Leave has not been granted to amend in terms of that minute and the second defendant opposes leave being granted. I will turn to that issue shortly.
70 The amended statement of claim of 21 March 2003 pleads that the Catlins were the sole directors and shareholders of ANA, which between 20 May 1987 and 20 December 2002 was the trustee of the Trust. It is pleaded that the Catlins are now the joint trustees of the Trust. As I have mentioned, the Catlins say they became trustees on 14 March 2003.
71 The Catlins plead that on 22 May 2000, pursuant to a debenture dated 8 February 1994, the second defendant was appointed by the Bank to be the receiver and manager of the Trust and acted in that capacity until he retired on 23 February 2001. It is alleged that the second defendant breached duties he owed to the Trust to act with reasonable care and in the best interests of the Trust in that, in his capacity as receiver and manager, he sold the Cafe at an undervalue. It appears to be alleged that the Cafe was sold for $350,00 less than its true value.
72 It is alleged that, as a result, the Trust has suffered loss and damage in that its assets have been diminished by an amount of $350,000. The Catlins claim damages for that diminution. It seems that that claim is made in their capacity as trustees of the Trust.
73 It is also alleged that, by acting negligently and in breach of his duty to act honestly and in the best interests of the Trust, the second defendant
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- engaged in conduct that was misleading or deceptive, contrary to s 10 of the Fair Trading Act. That also appears to be a claim made by the Catlins as trustees.
74 In addition, the Catlins claim that they worked in the Cafe and each derived their sole income of $50,000 per annum from it, and that the sale of the Cafe has deprived them of that income, for which they seek damages. That is clearly a claim made by the Catlins personally.
75 The second defendant has applied to strike out the statement of claim as disclosing no reasonable cause of action and for summary judgment.
76 The claim by the Catlins for the loss of their personal income can be dealt with quite shortly. Counsel for the second defendant pointed out that in the amended statement of claim it was pleaded that the second defendant had been appointed pursuant to the Bank's powers under the debenture, entered into by ANA as trustee of the Trust, by which the assets of the Trust were charged in favour of the Bank. It was also pleaded that the Cafe was an asset of the Trust. No issue was taken, and nor could it be taken, as to the power of the second defendant to sell the Cafe under the terms of the debenture. The Catlins' complaint was simply as to the amount for which it had been sold. But the loss of the Catlins' employment was a result of the sale of the Cafe, not a result of the alleged undervalue for which it was sold. There was therefore no basis for any claim for the loss of their employment.
77 In my view, that is plainly right. I would strike out par 18 of the amended statement of claim, where that claim is made.
78 The second defendant took two substantive points in relation to the claims by the Catlins in relation to the claim for the diminution of the Trust assets by reason of the sale of the Cafe at an alleged undervalue. First, the Catlins cannot by amendment to the statement of claim alter the capacity in which they sue in this action. As they were not the trustees at the date upon which the action was commenced they do not come within O 21 r 5(4) and it would not, therefore, be open to them to amend the statement of claim to substitute themselves, in their capacity as trustees, as plaintiffs.
79 For the reasons I have given in relation to the claim against the first defendant, in my view that is correct. In addition, to the extent that the Catlins might seek to add, rather than substitute, themselves as plaintiffs in their capacity as trustees I consider, apart from anything else, it is simply far too late to allow that application now to be brought.
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80 The other substantive objection taken by the second defendant was that, in any event, no claim would lie with the trustee even if it made out the allegation (which the second defendant denies) that the Cafe was sold at an undervalue.
81 Under the debenture, which was in evidence, ANA charged all of the "undertaking, property and assets both present and future held or to be held by [ANA] as trustee of the Trust Fund with the payment and satisfaction of the Secured Amounts." It was not in issue that the Cafe was the only asset of the Trust. ANA, as trustee, held no other undertaking, property or asset of the Trust between the time it executed the debenture and the time it ceased to be trustee.
82 According to the affidavit of the second defendant, he was informed by the Bank at the time of his appointment that the total amount owing by ANA was approximately $654,954.00. The second defendant says that on 11 December 2000 he reported to the Bank that there would be a net return to the Bank of $52,662.00, leaving a shortfall of $602,292.00. The Bank informed the second defendant's solicitors by letter dated 16 April 2003 that there had been no reduction in the liability of ANA since the second defendant's report.
83 Although the Catlins told me from the Bar table that they did not accept the amount of the debt deposed to by the second defendant, they put on no evidence to dispute it and could point to no credible evidence which cast doubt upon it.
84 It was submitted on behalf of the second defendant that in light of the magnitude of ANA's debt to the Bank, the issue of whether or not the Cafe had been sold at the alleged undervalue is irrelevant. If, as the Catlins contend, an additional amount of $350,000 should have been obtained on the sale, that money would have been subject to the Bank's charge and would have been paid to the Bank to reduce ANA's debt, albeit it would not have completely discharged that debt. It would not have resulted in any assets being left in the Trust.
85 It seems to me, once again, that that must be correct. Putting aside questions as to the ability of the Catlins, in their capacity as the current trustees, to sue the second defendant for the alleged sale at undervalue, if the alleged breach of duty had not occurred the Trust would be no better off. The indebtedness of the former trustee, ANA, would have been reduced but there would still be no Trust assets remaining. Accordingly,
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- "the Trust" has suffered no loss by reason of the alleged sale at an undervalue. It follows that, on that basis also, the claim must fail.
86 I would therefore dismiss the Catlins' claims against the second defendant.
87 I would not grant leave to amend the statement of claim in terms of the minute of proposed amended statement of claim of 4 September 2003. There is nothing in the proposed amendments that would overcome the deficiencies in the case as pleaded in the existing statement of claim.
88 I will hear the parties on the form of the orders and on costs.
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