Coddington v Commonwealth Bank of Australia

[2010] NSWSC 1330

CITATION:	Coddington v Commonwealth Bank of Australia [2010] NSWSC 1330
HEARING DATE(S):	8, 9 and 10 November 2010
JUDGMENT DATE :	23 November 2010
JURISDICTION:	Equity
JUDGMENT OF:	Pembroke J
DECISION:	See judgment paragraph [33]
CATCHWORDS:	CONSENT ORDERS - finality of litigation - policy and principles - FRAUD - proof - requisite degree of satisfaction - CORPORATIONS - financial reporting - writing off debts - no effect on underlying contractual liability - PRIVATE RULING - Tax Office - not binding
LEGISLATION CITED:	Corporations Act 2001(Cth) Income Tax Assessment Act 1997 (Cth) Taxation Administration Act 1953
CATEGORY:	Principal judgment
CASES CITED:	Bailey v Marinoff (1971) 125 CLR 529 Bater v Bater [1951] P 35 at 36 Briginshaw v Briginshaw (1938) 60 CLR 336 Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 CDJ v AJ (1998) 197 CLR 172 Commissioner of Taxation v Executors of the Estate of Subrahmanyam [2001] FCA 1836 CTC Resources NL v Commissioner of Taxation (1994) 48 FCR 397 DJL v The Central Authority [2000] 201 CLR 226 Easyfind (NSW) v Paterson (1987) 11 NSWLR 98 Gamser v Nominal Defendant (1977) 136 CLR 145 Giannarelli v Wraith (1988) 165 CLR 543 Heinrich v Commonwealth Bank of Australia Harvey v Phillips (1956) 95 CLR 235 Point v Federal Commissioner of Taxation (1970) 119 CLR 453 Rejfek v McElroy (1965) 112 CLR 517 Timms v Commonwealth Bank of Australia [2004] NSWSC 76 Wentworth v Rodgers (No 5) (1986) 6 NSWLR 534
TEXTS CITED:	Spencer Bower & Handley "The Doctrine of Res Judicata" (Butterworths, 4th ed) 2009
PARTIES:	Margaret Edwina Coddington Robert Bruce Coddington Leanne Ruth Webb Anthony James Coddington Alissa Ann O'Mally East Roseville Merino Stud Pty Ltd Commonwealth Bank of Australia
FILE NUMBER(S):	SC 2006/258313
COUNSEL:	R Coddington - litigant in person - first and second plaintiffs J Fellows - third, fourth, fifth and sixth plaintiffs A Bell SC with N Owens - for the defendant
SOLICITORS:	R Coddington - litigant in person - first and second plaintiffs Adrian & Fellows - third, fourth, fifth and sixth plaintiffs J Lanser, Commonwealth Bank of Australia - for the defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Pembroke J

tuesday, 23 NOVEMBER 2010

2006/00258313 - CODDINGTON & ANOR v commonwealth Bank of australia

Judgment

Introduction

1 This is an application to set aside consent orders made in 1999. The plaintiffs rely on the established jurisdiction to set aside consent orders obtained by fraud: Harvey v Phillips (1956) 95 CLR 235 at 243-4. They allege that they were “tricked” into agreeing to the consent orders by the defendant Bank.

2 Mr Coddington represented himself and was the only witness called on behalf of the plaintiffs. As can sometimes be the case with persons in his position, he has worked extremely hard in the investigation and presentation of his case and has convinced himself of the correctness of his case. Regrettably, he has also received false encouragement from a number of sources. It is unfortunate that in deciding to pursue this claim, he did not, or was unable to, obtain legal advice. I am satisfied that if he had received reasonable legal advice, these proceedings would never have been commenced. The result is that they must be dismissed.

The Facts

3 The background facts prior to 1989 are not contentious:

(a) In 1969, Mr Coddington, as registered proprietor, granted a mortgage to the Bank over the rural property known as Dapper. The Bank made advances to Mr & Mrs Coddington who were described in the mortgage as the debtors. The mortgage was an “all monies” mortgage that secured the payment of monies owing to the Bank by Mr & Mrs Coddington on any account whatsoever both at the time of the mortgage and in the future. Collateral security was also given to the Bank over three life policies;

(b) In 1975, G H Coddington & Co Pty Ltd, as registered proprietor, granted a mortgage to the Bank over the rural property known as Leaholme. Once again, the Bank made advances to Mr & Mrs Coddington who were described as the debtors. The mortgage was an all monies mortgage;

(c) In 1983, Mr & Mrs Coddington and G H Coddington & Co Pty Ltd provided a guarantee to the Bank to secure the payment of all monies owing by Mr & Mrs Coddington in their capacity as trustees of the Coddington Family Settlement. This trust was established in 1977 to conduct the woolgrowings and Merino stud operations previously conducted by Mr & Mrs Coddington.

4 In 1989, a family decision was made to purchase a further rural property – Rose Hill. Mr Coddington’s daughter, Leanne purchased part of the property and his son, Anthony purchased the other part. Both Leanne and Anthony granted mortgages to the Bank. The debtors under both mortgages were Mr & Mrs Coddington. On 5 April 1989 the Bank advanced approximately $600,000 to Mr & Mrs Coddington to purchase Rose Hill. The indebtedness to the Bank was secured not only by the mortgages and personal covenants in respect of Rose Hill, but also by the previous mortgages and personal covenants given in respect of the Dapper and Leaholme properties.

5 The borrowing to purchase Rose Hill was by a bills discount facility for a two year fixed term with the option of converting to a fully drawn or term loan during the initial two years or at the end of that period. It is a matter of common knowledge and public record that the period immediately following the Rose Hill loan to Mr & Mrs Coddington was a period of record high interest rates. By December 1989 the Reserve Bank of Australia cash rate was 18%. In January 1990 it was 17.5%. It remained at historically high levels until late 1991. Few businesses could have sustained the cost of purchasing and maintaining Rose Hill at the prevailing interest rates – at least on a fully debt funded basis and as a single economic unit. Predictably, there was default under the bills discount facility.

6 In 1996 Mr & Mrs Coddington and their children Leanne and Anthony commenced proceedings against the Bank in this court. A central contention in those proceedings was that the purchase of Rose Hill was not a commercial proposition. They sought relief under the Contracts Review Act, 1980. They claim that, having regard to the Bank’s knowledge of the existing indebtedness, cash flow and general state of the farming and grazing activities or Mr & Mrs Coddington, the Bank should have informed them that the purchase was not commercially viable. To my mind, this does not appear to have been a very sound basis for the grant of relief under the Contracts Review Act.

7 The Coddington family had the benefit of legal advice and representation in those proceedings. Their solicitors were Verekers. Counsel was retained. Substantial monies were spent on legal costs and in obtaining expert advice from a consultant named Brian Coggan. The expenditure achieved little. On 4 April 1997, Rose Hill was sold. On 1 May 1997, Dapper was sold. On 1 August 1997, Leaholme was sold. In each case the net proceeds of sale were paid to the Bank in reduction of the indebtedness owing to it. The Bank gave discharges of mortgage but reserved its rights under the personal covenants. As at 1 October 1997, the outstanding indebtedness to the Bank by the Coddington family interests was $1,199,432. Interest was accruing at a daily rate of $442.06.

Consent Orders

8 In due course, on 13 May 1999, final orders were made by consent disposing of the proceedings. The orders were entered on 22 June 1999. Among other things, judgment was given against Mr & Mrs Coddington individually, and as trustees of the Coddington Family Settlement, and against G H Coddington & Co Pty Ltd, in the sum of $1,470,670. The orders included mutual releases and discharges from all claims, demands and causes of action arising out of the claims made in the proceedings. They also included a warranty by each of the Coddington entities that “he, she or it has obtained legal advice as to the terms and effect of the Short Minutes of Order”.

9 In fact Mr & Mrs Coddington and their family interests received legal advice at all times throughout the proceedings, including in connection with the discovery process. In particular, there was a lengthy settlement conference on 12 May 1999. On the Coddington side, the conference was attended by Mr Coddington, his counsel, Mr Bradford, his solicitor, Mr Tassell and his assistant, and his consultant expert, Mr Coggan. The Bank was represented by its counsel, Mr Oakes SC, its solicitor Mr Lee and a Bank officer, Mr Higgs. On 19 May 1999, Verekers wrote a lengthy letter to all of the Coddington entities, referring to the “four long days of negotiations” and summarising the effect of the orders.

Public Policy - Settlements

10 Before dealing with the particular allegations on which the plaintiffs rely to set aside the consent orders, I should make some general observations about the policy considerations that are relevant to an application such as this. There is a public interest in the finality of litigation. It is obvious that, unless there are rigorous limits on the ability of an unsuccessful litigant to re-agitate claims that have been resolved by the courts, the system for the orderly and efficient administration of justice would be discredited and would falter: DJL v The Central Authority [2000] 201 CLR 226 at [90]; Bailey v Marinoff (1971) 125 CLR 529; Gamser v Nominal Defendant (1977) 136 CLR 145 at 154; CDJ v AJ (1998) 197 CLR 172 at 204.

11 The principle applies to final orders after a hearing, consent orders following a compromise and interlocutory orders. The considerations will not always be the same however. Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 is an example relating to an interlocutory order. Harvey v Phillips (supra) and Easyfind (NSW) v Paterson (1987) 11 NSWLR 98 are examples relating to consent orders made following a compromise. In all cases, fraud is a well recognised exception, but it has its own limitations. The party alleging fraud must show that there has been a new discovery of something material - fresh facts which alone, or in combination with previously known facts, establish that the judgment was obtained by fraud: Wentworth v Rodgers (No 5) (1986) 6 NSWLR 534 at 538; Spencer Bower & Handley The Doctrine of Res Judicata, 4^th edition, 2009 at 17.04. In this case, the plaintiffs are not able to point to anything new. In what follows, I deal with each of their main contentions.

Shadow Ledgers

12 The substance of Mr Coddington’s first complaint is that he agreed to the consent orders in the belief that he owed $1,470,670 to the Bank. In fact, he contends, the Bank failed to tell him that it had written off the debt. He believes that because the debt was “written off” there were no monies owing. He says that in addition to a statement of the account showing the full amount of the indebtedness, the Bank also maintained another ledger which recorded the fact that the debt was written off. This is one of the grounds on which he says he was tricked into agreeing to the consent orders. It amounts to an allegation of fraudulent misrepresentation. For the reasons that follow, this claim is, I am afraid to say, wrong in law, unsupported by the facts and hopelessly confused.

Wrong in Law

13 To start with, the legal premise of the claim is incorrect. It is well established that the writing off of a debt for accounting purposes is not equivalent to the release or forgiveness of the debt. They are legally distinct concepts: Point v Federal Commissioner of Taxation (1970) 119 CLR 453. The writing off of a debt is a statutory responsibility that arises because of the bank’s obligation to ensure that its financial statements give a “true and fair view” of its financial position and performance: Sections 297 and 305, Corporations Act, 2001. But whether a debt is wholly or partly written off in accordance with that statutory responsibility has no bearing on the existence or content of the particular contractual obligation owed by the debtor to the creditor: Timms v Commonwealth Bank of Australia [2004] NSWSC 76 at [218] – [226]; Heinrich v Commonwealth Bank of Australia [2003]] FCA 539; [2003] FCAFC 315.

14 This distinction is recognised in the Income Tax Assessment Act, 1997 (Cth). A taxpayer can deduct a debt or part of a debt that it has written off as bad in the income year if it was included in the taxpayer’s assessable income for that year or an earlier year. Conversely, if in a subsequent year, an amount is recovered in respect of a debt previously written off, then the amount of the recovery and any previously claimed deduction, must be declared as income. See Sections 25-35(1) and sub-division 20A.

15 As Barrett J deftly explained in Timms (supra) at [225]:

The process [ie writing off a bad debt] is a unilateral and internal bookkeeping process undertaken by a creditor for the purpose of assigning a value to its assets (receivables) for the purpose of financial reporting, as distinct from any form of bilateral process involving creditor and debtor and definition of the rights and obligations prevailing between them.

Unsupported by Facts

16 Secondly, the factual foundation for this contention is absent. The fact that the Bank had written off the debt owed by the Coddington entities in relation to at least one of the two loan accounts was known to Mr Coddington and to his solicitors before the consent orders were made in 1999. On 23 October 1997, the Bank sent to Mr Coddington a statement for account No 142985 which showed a write off leaving a nil balance. Mr Coddington forwarded that statement to his solicitors within a week with a covering note saying “cleared trust of debt”. Mr Coddington also told the Australian Taxation Office that he believed that account No 142985 had a nil balance from the time he received the statement on 23 October 1997 until he received what he described as a “shadow ledger” in February 2000. Further still, Mr Coddington informed a Parliamentary Inquiry that he had received a bank statement showing a zero balance and that he had settled his litigation in reliance on that representation as to the level of his debt. Having regard to the knowledge that Mr Coddington and his solicitors had in relation to account No 142985, they were on notice and well equipped to make a similar inquiry in relation to the position of account No 85444. There are no fresh facts.

Confusion

17 Further, as I have mentioned, the allegation that is particularised in the plaintiffs’ amended statement of claim is that Mr Coddington did not know that the closing balances of accounts Nos 142985 and 85444 were nil. But the evidence that Mr Coddington gave in the hearing before me, the statements he made to the Australian Taxation Office and the information given by him to the Parliamentary Inquiry, all reveal quite the opposite, at least in relation to account No 142985. There is a confusing disconnection between the case advanced and the reality. At least in relation to account No 142985, the position was actually the reverse of what is pleaded and alleged.

18 The indubitable fact is, and always has been, that a bank has a statutory responsibility to write off the whole or any part of a debt owing by a customer where the circumstances of the debt make it appropriate to do so. For my part, I see no reason why a bank should have an obligation to inform its customer if it chooses to write off a debt. But whether or not it informs the customer, the fact of the debt being written off does not operate to release, forgive or extinguish the liability of the debtor. The existence of the debt is legally distinct. The debt remains unaltered notwithstanding that for, financial reporting purposes, the value of the asset represented by the debt is written off in the bank’s internal accounts. For those reasons there is no legal basis upon which the consent orders should be set aside on this ground.

ATO – Private Ruling

19 I should make one further observation on this issue. I mentioned that Mr Coddington received some false encouragement. The source of some of that encouragement was a Private Ruling dated 15 December 2003 from the Deputy Commissioner of Taxation. The ruling is concerned with the deductibility of interest. The question was whether there was any liability to pay interest. That depended on whether there was any remaining liability on the one of the loan accounts. The Ruling is not free of ambiguity – both as to its substantive conclusions and as to the manner of its expression, particularly its grammar, syntax and general coherence. Among other things, it contains a confusing analysis of the effect of the court orders made on 13 May 1999. It expresses conclusions about whether there was any continuing liability to pay money, including interest, due under the relevant loan account after August 1997. And it contains the following statement:

The preceding analysis suggests that the existence of ‘shadow ledgers’ in relation to the loan account in the books of the bank in itself would not determine whether there is a presently existing liability in respect of the interest on the loan.

20 This last statement does not assist Mr Coddington. But the Ruling is not in any event binding on me. Nor is it binding on the Bank. It depends for its conclusions on the quality and accuracy of the information provided by Mr Coddington. Some of that information was patently incorrect. The Ruling is of no assistance in the resolution of the issues that I am required to determine. That is not only for the reasons that I have explained, but also because of the statutory limitations that apply to such a ruling. In 2003, private rulings were given pursuant to the then Part IVAA of the Taxation Administration Act, 1953. In particular, Section 14ZAF provided that a person may apply to the Commissioner for a ruling on the way in which, in the Commissioner’s opinion, a tax law would apply to a person in respect of a year of income in relation to an arrangement. Gummow J explained the private rulings system in CTC Resources NL v Commissioner of Taxation (1994) 48 FCR 397 at 401. The ruling does no more than state the Commissioner’s view as to the way in which the tax law would apply to an arrangement described in the ruling. It is not a finding as to the facts. If the Commissioner takes the view that the actual arrangement that is the subject of the tax assessment is different to the arrangement described in the ruling, then the ruling is irrelevant and does not apply to those different facts. As Hill J said in Commissioner of Taxation v Executors of the Estate of Subrahmanyam [2001] FCA 1836 at [49]:

…There is no reason why the Commissioner should not issue an assessment inconsistent with the ruling where the assessment proceeds upon a different state of facts or depends on a different assumption …

21 For those reasons, the Private Ruling does not advance the plaintiff’s case. I have derived nothing from it. It cannot provide the support which Mr Coddington seeks to obtain from it.

The Forgery Claim

22 The second basis of the plaintiffs’ claim to set aside the consent orders is that there was no approval for the Rose Hill loan from the Western Division of the Bank. In this connection, it is alleged that a particular loan approval document was “forged”. It is not entirely clear what is meant by the descriptive epithet “forged” but the essence of the complaint seems to be that the document was created after the event to cover up the absence of formal approval at the time of the loan. The argument advanced by the plaintiffs has a number of key components. The first is that a particular document (124.18) was not discovered by the Bank. The second is that, if it had been discovered, the alleged forgery and the absence of any contemporaneous approval by the Western Division of the Bank, would have been ascertained. The third is that, if Mr Coddington had been aware of the “forgery” and the absence of approval by the Western Division of the Bank, he would not have agreed to the consent orders on 13 May 1999.

23 This is a complex factual issue which has obviously consumed Mr Coddington and occupied much of his time during most of the last ten years. He has endeavoured to explain to me, orally and in writing, his underlying theory of the supposed conspiracy and the documentary trail on which he relies to support it. I have considered carefully the written material that he has provided, including coloured charts, complex diagrams and cross referenced documents. He has also provided me with a CD entitled “RIS Forgery”. Although I was naturally wary of Mr Coddington’s lack of objectivity, I endeavoured to give him the maximum reasonable opportunity to demonstrate his point and make good his contentions. At the end of the process, including after considerable time and study spent following the reservation of my decision, I remain unconvinced.

24 This is a fraud case. Mr Coddington’s allegations impute deliberate dishonesty to the Bank. The evidence on which he relies is imprecise and ambiguous. Much of it is speculation. To borrow a phrase of Sir Owen Dixon, the plaintiffs’ case on this issue consists of inexact proofs, indefinite testimony and indirect references. The seriousness of the allegations require me to have an actual persuasion of the occurrence of the conduct alleged against the Bank. Naturally, the necessary degree of satisfaction will be greater depending on the gravity of the issue. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality: Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2; Rejfek v McElroy (1965) 112 CLR 517 at 521. In a case of fraud, although the standard of proof remains according to the balance of probabilities, the court requires “a degree of probability which is commensurate with the occasion”: Bater v Bater [1951] P 35 at 36-37 (Denning LJ). For those reasons, I am unable to decide this issue in favour of Mr Coddington. As I said, I remain unconvinced.

25 However, and in addition, I have concluded that the issue can and should be decided by reference to a threshold question. As I have mentioned, the first step in the elaborate and carefully constructed argument of the plaintiffs was that this was a fresh issue and that document 124.18 was not discovered by the Bank. A careful review of the discovered documents and the sequence of events demonstrates that this is not the case. The issue of the absence of formal approval by the Western Division of the Bank, and any legal significance attaching to it, should have been apparent at the time of the consent orders on 13 May 1999. The sequence of events is as follows:

(a) On 12 January 1989, a bank officer named Tony Saunders gave telephone approval to Mr Coddington for a loan of $600,000. The file note records an extensive discussion with Mr Coddington. It indicates that Mr Coddington had decided to purchase the property, that he had made his own commercial decision and was looking for an advance of $600,000. The file note also records that consideration was given to rationalising other borrowings and that it was thought that it may possibly be appropriate to write one facility for $1million;

(b) Included in the Bank file, and discovered by the Bank in the original proceedings, is a document entitled “Preliminary Application for Company and Business Advances”. It is dated 13 February 1989 and includes a Rural Information Summary as well as undated managers’ notes. The whole document is stamped with the Bank’s discovery numbers 1989.04 to 1989.09. This is the document that Mr Coddington now alleges was “forged” – in the sense that it was wholly or partly completed after the event;

(c) On 4 April 1989, settlement of Rose Hill was effected and the Bank drew an accommodation bill for $630,000. The maturity date of the bill was 4 July 1989 (91 days). The Bank advised Mr & Mrs Coddington by letters dated 4 and 5 April 1989. Included among the information was the discount amount of $27,417.51 (18.25% yield rate) and charges of $32,138.19;

(d) On 17 May 1989, after the coddington entities had exceeded their overdraft limit, Peter Martin, a senior manager of the Bank, wrote to the Western Division in Dubbo stating: “Attached is an application for Coddingtons to purchase additional property. Approval was indicated to customers by previous manager but should have been submitted.” This document was discovered in the original proceedings. Its discovery number is 1989.26A. The letter makes clear that the application for approval had not been submitted to Western Division at the time of the original loan.

26 Mr Coddington then points to a handwritten stock summary which relates in part to Rose Hill. Its discovery number is 124.18. He says he first saw this document in 2002 and formed the view that it was in the handwriting of Mr Martin. Although the summary of stock on this document does not correspond with the information set out on the Rural Information Summary referred to in paragraph 25 (b) above, Mr Coddington contends that both are in Mr Martin’s handwriting and that, taken together, they evidence the forgery on which this aspect of his case depends. Central to his contention is the proposition that document 124.18 was concealed by the Bank and was not discovered. Mr Coddington’s suspicions have been excited because the discovery number is not stamped on the document but has been added by hand.

27 I have already explained that the quality of the evidence does not permit me to accept the underlying forgery claim. But, in any event, the contention that the supposed “forgery” justifies the setting aside of the consent orders, fails at the threshold. That is because the evidence of Mr Perry, and the inferences available from the contemporaneous documents, make it clear, not only that document 124.18 was discovered, but that it, and the other documents to which I have referred, were all available to Mr Coddington’s solicitors, Verekers, during the original proceedings.

28 It may be that Verekers did not perceive what Mr Coddington now believes to have happened. On the other hand it may be that they did. They may well have taken the view that the absence of contemporaneous approval from the Western Division, and the completion of an approval after the event, would not necessarily advance Mr Coddington’s case for relief under the Contracts Review Act. After all, the file note of 12 January 1989 suggests that Mr Coddington had made up his mind and was not looking to the Bank for financial advice. And does it really matter whether approval was given before or after the loan advance? Mr Coddington now says emphatically that if formal approval from the Western Division had been sought at the time, his application would have been rejected and he would not have proceeded with the purchase and loan. I am not so sure. The evidence did not demonstrate that this would necessarily have been the case. But for the reasons that follow, it does not matter.

Finality of Litigation

29 The real point is that, no matter what the legal and factual significance of the documents is now thought to be, those documents were all discovered by the Bank in the original proceedings. They were all available to Verekers. Not only were they available but the evidence indicates that Verekers requested and obtained copies of them. The principle of finality weighs heavily against Mr Coddington. He retained experienced solicitors and counsel. They had access to all relevant documents. During the ten years since settlement of the proceedings, Mr Coddington has developed a particular theory of fraudulent conduct by the Bank. I do not think he is right, but more significantly for the administration of justice, he should not in any event be permited to re-open the question. He must abide by whatever strategic decisions and oversights (if any) have been made by his legal representatives on his behalf. As I have said, there is nothing new.

30 In Giannarelli v Wraith (1988) 165 CLR 543 at 556, Mason CJ referred to the fact that a client “may wish to chase every rabbit down its burrow”. He made that observation by way of contrast, for the purpose of explaining a barrister’s duty to the court to exercise an independent discretion or judgment in the conduct and management of litigation on behalf of his client. That independent judgment relates, among other things, to the selection of the issues of fact and law to be pursued in support of the client’s case. There would never be finality of litigation if a party were permitted to raise issues that were not taken up in the original proceedings, simply because he has conceived a new way of looking at old facts. Once it is clear that all relevant documents were available to Mr Coddington’s solicitors during the original proceedings, this ground for setting aside the consent orders must also fail.

Conclusion

31 There is no basis for setting aside the consent orders made on 13 May 1999. Even if there were, it is difficult to see a plausible basis for Mr Coddington’s underlying claim for relief under the Contracts Review Act. His wife and children may possibly be in a different position. But ultimately it does not matter because the consent orders are final.

32 In any event, and although the question does not arise, the utility of relief under the Contracts Review Act is highly questionable. The three properties Leaholme, Rose Hill and Dapper have long been sold. The impugned transaction relates to Rose Hill. But Mr & Mrs Coddington remain liable pursuant to their personal covenants given under the Dapper and Leaholme mortgages. In the case of the children, Leanne and Anthony, the Bank did not seek or obtain judgment against them pursuant to their personal covenants when negotiating the consent orders. It does not seek such a judgment now.

Orders

33 In the final analysis, authority dictates that I should not embark on a re-hearing unless and until I have decided whether the consent orders should be set aside. I have concluded that there is no sound factual or legal basis for setting aside those orders. The amended statement of claim should therefore be dismissed. The Bank’s cross claim only arises for determination if there is a re-hearing. It should also be dismissed.