Commonwealth Bank of Australia v PBT (WA) Pty Ltd

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   COMMONWEALTH BANK OF AUSTRALIA -v- PBT (WA) PTY LTD [2019] WASC 365
CORAM:   SMITH J
HEARD:   9 OCTOBER 2019
DELIVERED          :   9 OCTOBER 2019
PUBLISHED           :   10 OCTOBER 2019
FILE NO/S:   CIV 3058 of 2016
BETWEEN:   COMMONWEALTH BANK OF AUSTRALIA
Plaintiff
AND
PBT (WA) PTY LTD
First Defendant
BELINDA ANNE TOPPING
First Named Second Defendant
PAUL MCKENZIE TOPPING
Second Named Second Defendant

Catchwords:

Application - For leave for an individual to represent a company - To suspend a property and (seizure and delivery) order - To suspend a default judgment

Legislation:

Civil Judgments Enforcement Act 2004 (WA), s 15, s 95
Rules of the Supreme Court 1971 (WA), O 4 r 3(2), O 12 r 1(2)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Ms T E Strack
First Defendant	:	Mr P M Topping
First Named Second Defendant	:	No appearance
Second Named Second Defendant	:	In person

Solicitors:

Plaintiff

Dentons Australia

Case(s) referred to in decision(s):

Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178; (2000) 22 WAR 372
Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
HPM Pty Ltd v Fear [2002] WASCA 249; (2002) 171 FLR 12
Re Hoffman [2004] WASCA 238; (2004) 187 FLR 263
Sims v Suda Ltd [No 2] [2015] WASC 180
Tomcsanyi v National Australia Bank Ltd [2019] WASCA 154

SMITH J:

The application

This is an application by Paul McKenzie Topping and PBT (WA) Pty Ltd (PBT) for orders that:
(a)Mr Topping have leave to represent PBT;
(b)the property (seizure and delivery) order issued by the court, on 10 September 2019, be suspended in respect of the property at 137 Ashton Road, Bullsbrook in the State of Western Australia being Lot 132 Plan 23712 and being the whole of the land comprised in Certificate of Title Volume 2173 Folio 790 (the property); and
(c)a suspension of the default judgment made by Registrar Boyle on 17 February 2017 (default judgment).
The application was made on 9 October 2019 together with a supporting affidavit of Mr Topping sworn on the same day. Mr Topping also filed a certificate of urgency on grounds that the property (seizure and delivery) order was to be executed on 10 October 2019. Mr Topping is a director of PBT.
The application was opposed by the Commonwealth Bank of Australia (CBA).
After hearing Mr Topping and counsel for CBA, I made an order dismissing the application.
These are the reasons for making the order.
This action was commenced by writ of summons on 29 November 2016. Mr Topping filed a memorandum of appearance on behalf of himself and PBT. However, the appearance was not accepted in respect of PBT.
An affidavit of Mr Benjamin Michael Green sworn on 9 February 2017, on behalf of CBA, annexed a letter sent to 'The Director' of PBT, by solicitors for CBA in which it was stated that a valid appearance had not been entered on behalf of PBT as pursuant to O 12 r 1(2) of the Rules of the Supreme Court 1971 (WA) an appearance on behalf of a company can only be entered by a solicitor. That letter also contained advice that CBA's solicitors had instructions to file a request to the Supreme Court to enter default judgment against PBT.
The default judgment made by the Registrar on 17 February 2017 was made by order as follows:
1.No appearance having been entered by the first defendant judgment is entered in the terms set out hereunder.
2.The first defendant within 28 days of service of this judgment give the plaintiff possession of the property at 137 Ashton Road, Bullsbrook in the State of Western Australia being Lot 132 Plan 23712 and being the whole of the land comprised in Certificate of Title Volume 2173 Folio 790.
3.The first defendant pay the plaintiff the sum of $888,245.17 being the amount due under the mortgage as at 13 February 2017 together with interest in the sum of $123.04 per day from 14 February 2017 until payment in full in accordance with the terms of the mortgage.
4.The first defendant pay the plaintiff's costs of the action including the costs of the application for judgment to be taxed.
Despite no appearance being entered on behalf of PBT and judgment having been entered, steps were taken by Mr Topping in the proceedings to file an affidavit on 27 April 2017 to oppose CBA's application to enter summary judgment. However, no further steps were taken by PBT. In particular, no appearance was filed by a solicitor and no application was filed in the court to set aside the default judgment or to apply for leave to appeal the default judgment.
On 5 September 2019, solicitors for CBA wrote to Mr Topping by letter addressed to a friend of Mr Topping who was assisting him.[1] CBA notified Mr Topping that it would now be taking steps to enforce the default judgment that was entered on 17 February 2017 and made an offer of settlement to remain open until CBA took possession of the property.[2]
[1] Exhibit 3.
[2] Mr Topping informed the court that he did not wish to accept the offer.
At the hearing of the application, Mr Topping informed the court that:
(a)he visited the property on Friday, 4 October 2019 and saw a copy of a notice indicating that a property (seizure and delivery) order had been made and that it was to be executed on 10 October 2019;
(b)he attempted to instruct solicitors to act for PBT in this application; and
(c)he disputes the liability of PBT and his liability as guarantor to pay the amounts claimed by CBA.
It should be noted, however, that the default judgment is not made against Mr Topping personally.
In his affidavit sworn on 9 October 2019, Mr Topping states that:
(a)a Mr Meredith from WLM Legal is willing to represent 'my case' after his trial in Bunbury (which is listed until Friday, 11 October 2019);
(b)the property (seizure and delivery) order was not served on him by the sheriff;[3] and
(c)he has been in negotiations for some time with CBA and that his former solicitors, Pragma Legal, had reached an agreement that PBT would be able to lodge a defence to the default judgment if all parties were unable to settle.
[3] It is notable that there is nothing in the Civil Judgments Enforcement Act 2004 (WA) or the Civil Judgments Enforcement Regulations 2005 (WA) that requires service of a property (seizure and delivery) order on any person.
In the affidavit sworn by Mr Topping on 27 April 2017, Mr Topping annexed a copy of a determination of a complaint made by Mr Topping against CBA, made by the Financial Ombudsman on 29 July 2014[4] in which the Ombudsman found that:
(a)CBA did not properly assess PBT's loan application;[5]
(b)CBA should reduce its claim against Mr Topping as guarantor by $246,047.09 in compensation for its irresponsible lending; and
(c)CBA is entitled to use the proceeds of sale to repay the debt due by PBT and if there is a shortfall after the sale, CBA can only pursue Mr Topping for the shortfall, less $247,047.09.
[4] Affidavit of Paul McKenzie Topping sworn on 27 April 2017, PT‑04, pages 15 ‑ 27.
[5] Affidavit of Paul McKenzie Topping sworn on 27 April 2017, PT‑04, page 20.
Counsel for CBA informed the court that Mr Topping did not accept the determination.
Counsel for CBA tendered into evidence, in this application, emails which make it clear that an agreement was reached between CBA and Mr Topping's solicitors, Pragma Legal, to put the 'Supreme Court proceedings on hold' for six weeks (from 14 September 2017 until 8 January 2018) to enable Mr Topping to make enquiries regarding his liabilities under other encumbrances registered against the property.[6]
[6] Exhibit 1 and 2.
At the outset of the hearing of the application, I informed Mr Topping that I would allow him to make submissions on behalf of PBT in the application. However, I informed him that, in my view, there was a fundamental difficulty in him filing the application for orders on behalf of PBT on grounds that he, as an individual, does not have standing to make the application and that, pursuant to O 4 r 3(2) of the Rules of the Supreme Court, a company is prohibited from carrying on any proceedings otherwise than by a solicitor.
The reasons why I made the order dismissing the application are as follows.
Firstly, the court does not have power to dispense with the explicit requirements of O 4 r 3(2) of the Rules of the Supreme Court. Consequently, even in exceptional circumstances, an individual is not at liberty to take a step in the action on behalf of a company.[7] On this ground, alone, the application should be dismissed. In the following second and third reasons, I leave this issue aside.
[7] Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178; (2000) 22 WAR 372 [47] (Hasluck J); HPM Pty Ltd v Fear [2002] WASCA 249; (2002) 171 FLR 12 [22] - [25] (Steytler J, Malcom CJ & Murray J agreeing); Re Hoffman [2004] WASCA 238; (2004) 187 FLR 263.
Secondly, I have doubts about whether I have jurisdiction to suspend the property (seizure and delivery) order as there is no express power to suspend an order made under s 95 of the Civil Judgments Enforcement Act 2004 (WA) (CJEA Act).[8] If I assume that I do, the criteria that should be considered is the criteria for suspending the enforcement of judgments which is applied by the court pursuant to s 15 of the CJEA Act.
[8] See Sims v Suda Ltd [No 2] [2015] WASC 180 (Pritchard J).
I do have power to suspend the judgment entered on 17 February 2017. However, for reasons that follow, I am not satisfied that there are special circumstances so as to warrant the suspension of the judgment.
Thirdly, whilst I may have power, within the inherent jurisdiction of the court, to stay or suspend the property (seizure and delivery) order, in the exercise of the court's discretion to grant an injunction, I must consider the principles that apply to an assessment as to whether there are arguable grounds to set aside or appeal the judgment in default.
When considering whether there are special circumstances to suspend a judgment pursuant to s 15 of the CJEA Act or whether, considering the principles to grant an injunction pending the determination of an appeal, the applicable principles are as recently considered by the Court of Appeal in Tomcsanyi v National Australia Bank Ltd as follows:[9]
[9] Tomcsanyi v National Australia Bank Ltd [2019] WASCA 154 [49].
The principles to be applied in a case such as this were outlined in T v B:
'In Mercanti v Mercanti, the court said:
"The exercise of this court's discretion to grant an injunction pending the determination of an appeal requires an assessment to be made of the decision under appeal and also the balance of convenience, including whether refusal of the injunction would render the appeal nugatory. See Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd [1988] HCA 53; (1988) 165 CLR 452, 460. The nature of the criteria which are ordinarily relevant to the exercise of this court's discretion to grant an injunction, pending an appeal, are analogous to those which are relevant to the grant of a stay. Although it is ordinarily necessary to establish that the appellant has reasonable prospects of success on the appeal, the appellant's prospects are, to some extent, interdependent with the balance of convenience. See Apache Northwest Pty Ltd v Agostini [2009] WASCA 147 [10].
The general principles which apply to an application for a stay are not materially different from those which apply to an application for a suspension order under s 15 of the Civil Judgments Enforcement Act 2004 (WA). Those principles were summarised in Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308 [9]. See also Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203 [3]."
In Eastland Technology Australia Pty Ltd v Whisson, the court outlined the relevant principles in the following terms:
"•The successful litigant at first instance will ordinarily be entitled to enforce the judgment pending the determination of any appeal.
•It is for the applicant for a stay to move the court to a favourable exercise of its discretion.
•It will not do so unless special circumstances are shown justifying the departure from the ordinary rule.
•The central issue will be whether the grant of a stay is perceived to be necessary to preserve the subject matter or the integrity of the litigation, or where refusal of a stay could create practical difficulties in respect of the relief which may be granted on appeal. It is often put shortly that it will first and foremost be necessary to establish that without the grant of a stay, the right of appeal, whether upon the grant of leave or special leave or not, will be rendered nugatory.
•If that can be demonstrated, the stay will generally still be refused unless it can be established that the appeal process, whether upon the grant of leave or special leave or not, has ultimately reasonable prospects of success so as to result in the grant of relief to the appellant.
•If that hurdle can be overcome, the stay may still be refused where it appears that the balance of convenience does not lie in favour of the applicant; where, for example, the grant of a stay will occasion hardship to the respondent which may not be alleviated by the terms upon which the stay may be granted." (footnotes omitted)'
The principles in Eastland Technology Australia Pty Ltd v Whisson[10] were applied in Sims v Suda Ltd [No 2][11] which was an application to suspend or stay the enforcement of a property (search and seizure) order and a costs order on grounds that the plaintiff in that matter wanted a suspension of the property (search and seizure) order or a suspension or stay of the costs order to enable him to bring an appeal against the costs order.
[10] Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308.
[11] Sims v Suda Ltd [No 2] [2015] WASC 180.
In circumstances where:
(a)the property is unoccupied;[12]
[12] Mr Topping did, however, inform the court that there are some vehicles, tools, other equipment and building materials on the property that Mr Topping will need to take steps to remove.
(b)the default judgment was entered well over two and a half years ago;
(c)PBT has taken no steps in the action to enter an appearance by a solicitor at any time;
(d)Mr Topping was aware, from at least early 2017, that he was unable to represent PBT in the action;
(e)no steps have been taken to set aside the default judgment or to seek leave to appeal the default judgment; and
(f)Mr Topping has yet to seek advice, on behalf of PBT, as to whether there are any grounds to set aside or obtain leave to appeal the default judgment;
I am not satisfied that special circumstances have been shown so as to justify the granting of suspension orders or, alternatively, an injunction. Nor can I be satisfied, in these circumstances, that it can be demonstrated that any appeal (if lodged) has reasonable prospects of success.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
VV
Associate to the Honourable Justice Smith
10 OCTOBER 2019

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established