Commonwealth Bank of Australia v Daleport Pty Ltd
[2013] NSWSC 981
•23 July 2013
Supreme Court
New South Wales
Medium Neutral Citation: Commonwealth Bank of Australia v Daleport Pty Ltd [2013] NSWSC 981 Hearing dates: 23 July 2013 Decision date: 23 July 2013 Before: McCallum J Decision: Direct that the defendants serve and provide to the associate any further proposed amended defence for each defendant within 21 days.
Direct that the plaintiff, within a further 14 days thereafter, inform the defendants whether they have any objection to that proposed pleading and, if so, to articulate the objection with specificity by reference to relevant paragraph numbers of the document.
Catchwords: PROCEDURE - defendants seeking leave to file in court amended pleadings - leave not granted - further particulars required Cases Cited: Bank of Western Australia v daleport Pty Ltd [2011] NSWSC 819
Daleport Pty Ltd v Bank of Western Australia Ltd [2012] NSWCA 402Category: Procedural and other rulings Parties: Commonwealth Bank of Australia (plaintiff)
Alexander Raymond Walton (first defendant)
Daleport Pty Ltd (in Receivership) (second defendant)Representation: Counsel:
P Dowdy (plaintiff)
N Obrart (defendant)
Solicitors:
Gadens Lawyers (plaintiff)
Ledger Lawyers (defendants)
File Number(s): 2008/00287869 Publication restriction: None
Judgment - ex tempore
HER HONOUR: These are proceedings arising out of four loan facilities entered into between the then Bank of Western Australia, which was subsequently acquired and Daleport Pty Ltd, now in receivership. The facilities are alleged to have been guaranteed by the second defendant, Mr Alexander Walton.
The background to the issues raised in the proceedings is recorded in the earlier interlocutory judgment of Davies J in Bank of Western Australia v daleport Pty Ltd [2011] NSWSC 819. In that decision, his Honour held (at [80]) that the Bank was entitled to summary judgment against Mr Walton: at [80]. That order was subsequently set aside by the Court of Appeal: see Daleport Pty Ltd v Bank of Western Australia Ltd [2012] NSWCA 402.
The application for summary judgment was brought in circumstances where a cross-claim brought by Daleport against Bank of Western Australia had previously been dismissed after the company failed to provide security for the plaintiff's costs in accordance with an earlier order made by Hislop J. A question debated during argument in the Court of Appeal was whether the dismissal of the cross-claim precluded Daleport from pursuing the contentions raised in the dismissed cross-claim by way of defence to the bank's claim. The argument in the Court of Appeal reveals that the Court contemplated that the defendants should be permitted to bring in an amended pleading relying on those same contentions by way of set-off against the debt claimed by the plaintiff. The quantum of damages previously claimed in the cross-claim was in the order of some $87 million, while the plaintiff's debt stands at around $14.5 million.
Against that background, in accordance with directions made by Davies J, each defendant has propounded a proposed amended defence. In the case of Daleport, the relevant proposed amendment is the third further amended defence. In the case of Mr Walton, it is the proposed second further amended defence.
The application before the Court today is the defendants' notice of motion filed 9 May 2013 seeking leave to file those pleadings. The form of the pleadings by reference to which argument proceeded today is annexed to the affidavit of Blayne Ledger sworn 22 July 2013.
The bank opposes the proposed amendments. The parties provided written submissions in advance of the hearing which enabled me to distil the real objections to the proposed pleadings and argument proceeded by reference to those particular issues. At the conclusion of argument Ms Obrart, who appears for the defendants, accepted that the appropriate course would be for defendants to propound a further draft of each defence addressing those issues raised in argument as to which I have indicated I think the pleading requires improvement. Mr Dowdy, who appeared for the bank, did not oppose an order allowing a further period of time for that to be done. As I indicated during argument, I would not be minded at this stage to refuse leave to file the defences because it is tolerably clear that the defences sought to be put forward should be able to be articulated in pleadable form if the specific issues raised in Mr Dowdy's submissions are addressed. It is appropriate, however, to record the particular issues as to which further amendment is anticipated.
First, Mr Dowdy objected to paragraph 6(iii) of the second further amended defence which asserted that there are additional terms to the second commercial advance without specifying what those additional terms are. Ms Obrart has indicated that that assertion will be withdrawn.
Secondly, Mr Dowdy submitted that the defendants ought not be allowed to file a pleading that includes paragraphs not admitting that Mr Walton entered into a written guarantee and indemnity with the plaintiff guaranteeing the obligations of Daleport, since both Daleport and Mr Walton admitted that allegation in the earlier version of the defence (in response to paragraph 21 of the statement of claim). No explanation as to why leave should be granted to withdraw that admission has been offered. In those circumstances, Ms Obrart has indicated (after obtaining instructions) that the defendants will revert to the original form of the pleading admitting that paragraph.
The principal objections were to paragraphs 86 to 96 of Daleport's proposed third further amended defence and a like pleading in Mr Walton's proposed second further amended defence. Those paragraphs allege, under the heading "Funds Representation: Misleading and Deceptive Conduct and Unconscionable Conduct", that the plaintiff, from February 2005 and continuously thereafter, impliedly represented to Daleport that it had sufficient funds to fund the development the subject of the facilities in dispute.
The pleading further alleges that the representation was or became false from about June or July 2007 in that the plaintiff did not have sufficient funds to fund the completion of the development from about that time.
It may be accepted that that is a big proposition and one which the defendants may think long and hard about before prosecuting. Specifically, however, the complaint made by the plaintiff is that the pleading fails to identify the facts, matters and circumstances on the basis of which those contentions are made. In my view, there is some force in that complaint. If the allegation is to be maintained, the further version of the pleading should articulate precisely what facts, matters and circumstances will be relied upon to support the contention.
Secondly, it is complained that the pleading fails to identify a causal link between the funds representation and the loss and damage suffered by Daleport. Ms Obrart accepted that the particular part of the pleading that pleads the funds representation does not contain any such averment, although she noted that elsewhere in the pleading in respect of other causes of action a causal link between the plaintiff's conduct and the defendants' loss is pleaded. Ms Obrart accepted during argument that the plaintiff is entitled to know the precise steps Daleport contends it would have taken had the funds representation not been made (which amounts, in effect, to a contention as to the steps it would have taken had it known that the plaintiff did not have sufficient funds to fund the development, as the allegation is put).
Finally, the plaintiff complains that there is no particularisation of the quantum of the loss allegedly suffered. Ms Obrart responded that there is a document available which particularises the loss previously the subject of the dismissed cross-claim. Those particulars, however, should be included in the pleading rather than being left to surmise.
Those are the matters which will be required to be addressed in any further iteration of the pleading if leave is to be granted. The order I proposed (in effect by agreement between the parties) was to direct the defendants to circulate a further proposed amended defence for each defendant and to afford the plaintiff an opportunity to consider that document.
The orders are:
(1) I direct that the defendants serve and provide to my associate any further proposed amended defence for each defendant within 21 days.
(2) I direct that the plaintiff, within a further 14 days thereafter, inform the defendants whether they have any objection to that proposed pleading and, if so, to articulate the objection with specificity by reference to relevant paragraph numbers of the document.
(3) I stand the proceedings over before me on 3 September 2013.
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Decision last updated: 20 August 2013
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