Charan v Commonwealth Bank of Australia
[2017] NSWCA 209
•16 August 2017
Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Charan v Commonwealth Bank of Australia [2017] NSWCA 209 Hearing dates: 16 August 2017 Decision date: 16 August 2017 Before: Leeming JA at [1], [21];
Payne JA at [20]Decision: The summons seeking leave to appeal filed 9 June 2017 is dismissed with costs.
Catchwords: APPEALS – application for leave – no question of principle – no question of general importance – no substantial injustice Legislation Cited: Civil Procedure Act 2005 (NSW), s 64 Cases Cited: Charan v Commonwealth Bank of Australia [2015] NSWCA 364 Category: Principal judgment Parties: Prabhaka Charan (Applicant)
Commonwealth Bank of Australia (First Respondent)
Registrar General of NSW (Second Respondent)
Bruce Gleeson (Third Respondent)
Scott Darren Pascoe (Fourth Respondent)
Andrew John Scott (Fifth Respondent)Representation: Counsel:
Solicitors:
Ms Charan (Applicant)
Ms Fishburn (First Respondent)
Mr Booth (Second Respondent)
Mr Djurdjevic (Third, Fourth and Fifth Respondents)
Dentons Australia (First Respondent)
Office of the Registrar General (Second Respondent)
Daniela Fazio Lawyers Pty Ltd (Third, Fourth and Fifth Respondents)
File Number(s): 2017/173599 Decision under appeal
- Court or tribunal:
- Supreme Court
- Jurisdiction:
- Equity
- Citation:
- [2017] NSWSC 616
- Date of Decision:
- 12 May 2017
- Before:
- Darke J
- File Number(s):
- 2016/318834
EX TEMPORE Judgment
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LEEMING JA: Mr Prabhakar Charan commenced proceedings by statement of claim filed in October 2016 against the Commonwealth Bank of Australia, the Registrar-General, and the trustees in bankruptcy of his wife and son. He appears to be unassisted by any lawyer. There can be no dispute that the pleading is materially defective. The primary judge (Darke J) was told as much by counsel formerly retained by Mr Charan, and the draft notice of appeal seeks orders permitting the pleading “to be amended in a satisfactory form”.
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The real issue which arises on this application for leave to appeal is not so much the decision to strike out the statement of claim, but the decision to dismiss the proceedings. Consequently, it is possible to pass over the details of the statement of claim, but it is necessary to say something about the background to this litigation.
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It is convenient to reproduce the following from the decision of this Court in Charan v Commonwealth Bank of Australia [2015] NSWCA 364 at [1]-[8] (Basten JA, Tobias AJA agreeing):
“The applicants, Prabhakar Charan and Usha Wati Charan, are husband and wife. They have an adult son, Prashant Prashikar Charan.
In 1999 the applicants purchased a property at Holsworthy, in their joint names. They built a house on the land.
In 2003, a property was purchased at Casula, in the names of Usha Wati Charan and Prashant Charan. The property was owned as tenants in common, in unequal shares, 13/20 being the share of Usha Wati Charan and 7/20 being the share of her son. The first respondent in the proceedings, the Commonwealth Bank of Australia (“the Bank”) was the mortgagee of both properties.
Soon thereafter the Charan family faced financial difficulties. In November 2006, the second respondent (Bruce Gleeson) was appointed as trustee in bankruptcy of Prashant Charan’s estate. He has since been discharged from bankruptcy. In June 2012 the third respondents (Scott Pascoe and Andrew Scott) were appointed joint trustees in bankruptcy of the estate of Usha Wati Charan. She remains an undischarged bankrupt. In oral submissions, she asserted that she was pursuing a claim for personal injury or wrong within the scope of s 116(2)(g) of the Bankruptcy Act 1966 (Cth). The entitlement to bring such proceedings in her own name is disputed by the trustee, but the Court has, in any event, heard from her speaking for herself and (with leave) for her husband. It is not necessary to determine her standing to bring these proceedings.
Upon default occurring under the respective mortgages, possession proceedings were taken by the Bank, in respect of both properties, in November 2012. In February 2013 the Bank obtained default judgment in the absence of any defence being filed and in April 2013 the Bank obtained possession of the properties. The Casula property was sold in July 2013 and the Holsworthy property in October 2013.
On 3 July 2014, Prabhakar Charan (the first applicant) commenced proceedings against the respondents. Those proceedings involved claims for compensation against the Bank and the trustees in bankruptcy, together with a claim for return of the properties. The latter claim was appropriately abandoned and, when the proceedings came before White J in October 2014, the primary issue was whether the plaintiff should be allowed leave to re-plead.
White J delivered judgment on 8 October 2014 ordering that the proceedings be dismissed, but without prejudice to the right of the plaintiff to claim an account or equitable damages against the Bank in respect of its conduct as mortgagee in possession of the properties, or in respect of its power of sale, or in respect of the net proceeds of sale that were held on trust by the Bank for the mortgagors, including Prabhakar Charan and the respective trustees in bankruptcy: Charan v Commonwealth Bank of Australia [2014] NSWSC 1473. The plaintiff was ordered to pay costs in a specified sum.
On 9 December 2014, two months after the judgment given by White J, the present proceedings were commenced in the Equity Division. They were heard and disposed of by McDougall J on 27 March 2015. The plaintiffs appeared before him unrepresented. McDougall J ordered that the statements of claim be dismissed and ordered the plaintiffs to pay the defendants’ costs: Charan v Commonwealth Bank of Australia [2015] NSWSC 411.”
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The Court dismissed the application for leave to appeal from the judgment of McDougall J. That is the essential background to the present litigation, which is between the same parties (save that Usha Wati Charan is not a plaintiff and that Mr Charan has this time joined the Registrar-General).
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The primary judge recorded that the defendants’ motions to strike out the statement of claim and to dismiss the proceeding were adjourned, when solicitor and counsel then retained advised in April 2017 that it was not sought to support the present statement of claim: at [8]. When the matter returned on 12 May 2017, the solicitor had ceased to act, and Mr Charan was represented by his wife, as has occurred tody with the Court’s leave. The primary judge referred to the history of litigation from [11]-[16] and expressed the view that the pleading should be struck out: at [19]. As noted at the outset, that is not in issue on this application for leave.
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At [20] and following, the primary judge considered whether the plaintiff should be given a further opportunity to plead his case. In light of the history, his Honour considered that it was appropriate to proceed immediately to decide whether the proceedings should be dismissed.
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His Honour identified three issues sought to be raised: that the plaintiff had an interest in the properties under a resulting trust which was therefore not property divisible amongst the creditors of the two bankrupts; that the trustees in bankruptcy became registered wrongfully; and that the power of sale was exercised wrongfully. His Honour regarded the first issue as falling within the exclusive jurisdiction of the Federal Court or the Federal Circuit Court, and saw no merit in the second and third issues.
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His Honour expressly stated that the power to dismiss a proceeding summarily was to be exercised sparingly and only in clear cases where no tenable claim exists, and that the plaintiff’s claim must, in effect, be manifestly groundless: at [28].
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His Honour exercised the power of summary dismissal, but on a qualified basis. White J had earlier dismissed the earlier proceedings subject to a particular qualification:
“[49] In my view the proceedings should be summarily dismissed. But the dismissal of the proceedings will be without prejudice to the plaintiff's right, if any, to an account or to equitable damages against the Bank in respect of its conduct as mortgagee in possession of the subject properties, or in respect of the exercise of its power of sale in respect of those properties, or in respect of a determination of the amount of the net proceeds of sale held on trust by it for the mortgagors (including the plaintiff) or their trustees in bankruptcy.”
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Darke J made it plain that the dismissal of the current proceedings was “not intended to diminish the right which White J referred to at [49] of his judgment”.
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Mr Charan seeks leave to appeal from the summary dismissal. Leave is required because the order was interlocutory. In my view, leave to appeal should be refused for these reasons.
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First, no question of principle or of general importance arises, because it is plain that Darke J applied the very high standards applicable to summary dismissal. It is therefore necessary for Mr Charan to demonstrate an injustice which is reasonably clear, in the sense of going beyond what is merely arguable.
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Secondly, even today, more than three months after the summary dismissal, no proposed pleading has been provided. When this was raised with Ms Charan she confirmed that no such pleading had been brought into existence and lawyers had not yet been retained in that respect.
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Thirdly, it is plain that Mr Charan is not prevented from litigating, if he chooses to do so, the matter left open by each of White and Darke JJ.
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Fourthly, the summary of argument supplied by Mr Charan is long (indeed, slightly longer than is prescribed by the rules) but none of it is directed to identifying errors by the primary judge. Instead, it is directed to setting out a history of dissatisfaction with the bank and the trustees in bankruptcy. I appreciate that Mr Charan is unassisted by lawyers and has a grievance in relation to what has occurred. However, the summary of argument does not indicate why Darke J erred in dismissing the proceeding. Nor is there anything in Darke J’s reasons which is suggestive of appellable error.
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Fifthly, the section of the summary of argument directed to “Why leave should be granted” is relatively concise. In its entirety, it states:
“This is a clear case based on merit that involves breach of statutory laws and rules, breach of fiduciary obligations, breach of trust and promise, unconscionable conduct and misuse of powers given for particular purposes.
The issues relating to the case has not been adjudicated to give justice to the plaintiff. Instead other judgments has been made which does not answer the issues. Issue estoppel does not arise where the defendants have breached the laws and are liable.
Issue estoppel can only apply after trial of the case and a final judgment has been given which cannot be appealed. If there are discrepancies in pleadings then section 64 of the Civil Procedure Act 2005 (NSW) allows amendments at any stage of the hearing and the appeal should be allowed and statement of claim to be amended. Procedural fairness was not accorded to the plaintiff/appellant to save his properties.”
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Nothing there persuades me that there was appellable error in the primary judge summarily dismissing the proceeding.
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Ms Charan in oral submission confirmed that she did not seek to defend the current pleading. Her principal submission was that she should be given another chance to amend the proceedings pursuant to s 64 of the Civil Procedure Act. She maintained that Mr Charan enjoyed a beneficial interest under a resulting (or perhaps a constructive) trust. However she had no answer to the proposition relied upon by Darke J that this Court had no jurisdiction in that respect. She also maintained and reiterated her complaints and indeed allegations of misconduct directed to the bank and the trustees in bankruptcy but once again she did not go beyond the matters addressed by Darke J or single out any aspect of his reasons for criticism despite being invited to do so by this Court, indeed repeatedly.
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For those reasons I propose that the application for leave to appeal be dismissed with costs.
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PAYNE JA: I agree with Leeming JA.
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LEEMING JA: The order of the Court therefore is that the summons seeking leave to appeal filed 9 June 2017 is dismissed with costs.
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Decision last updated: 21 August 2017
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