Commonwealth Bank of Australia v Tabet

[2008] VSC 161

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE COMMERCIAL AND EQUITY DIVISION

No. 8613 of 2007

IN THE MATTER OF

COMMONWEALTH BANK OF AUSTRALIA	Plaintiff
(ABN 48 123 123 124)
v
MARWAN TABET	Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 April 2008
DATE OF JUDGMENT:	24 April 2008
CASE MAY BE CITED AS:	CBA v Marwan Tabet
MEDIUM NEUTRAL CITATION:	[2008] VSC 161  1st revision 14/7/2008

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EVIDENCE – Writ for possession by a bank – Proof of loan and amount outstanding to the bank – Reliance by bank on s 1305 of the Corporations Act 2001 – Whether loan contract including details of interest, repayments, fees and charges was a document of prime entry for the purposes s 9 of the Act – Whether such a loan contract was a financial record within the meaning of s 286(1) of the Act – Whether the loan contract was a book kept by the bank under a requirement of the Act for the purposes of s 1305 - Whether court may take judicial notice that bank statement was produced from electronically stored information – ss 9, 286, 1305 and 1306 of Corporations Act 2001

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G W Moffat	A J Mullumby
For the Defendant	Mr A W Sandbach	Lennon Mazzeo
HIS HONOUR:

1. I have before me an appeal from the order of the master in which the master ordered that the plaintiff recover from the defendant possession of land described in the statement of claim indorsed on the writ, being the land described in certificate of title vol. 10643 folio 733 situate at 75 New Road, Oak Park. The defendant was also ordered to pay the plaintiff $257,967.54. The defendant was ordered to pay the plaintiff’ costs but there was a stay of execution until 30 April 2008.

2. Speaking generally, the bank produced the loan contract with the defendant whereby it agreed to advance him a loan of $264,000. The loan contract also sets out the interest rate payable, amounts to be repaid and a range of fees, government charges and the like which were to be paid by the borrower.

3. The bank also relies upon the bank statements of the customer which show the advance of the money and the repayments. The bank has produced the registered mortgage and a certificate under the standard terms which specifies how much is outstanding. The bank also produces demands for payment and gives evidence that the demands were not met.

4. Mr Sandbach of counsel, who appears for the defendant, raised evidentiary points alleging that the loan contract was not proved, the advance was not proved, and the amount owing was not proved.

5. The bank seeks to prove the contract under the Corporations Act 2001. In particular, it relies upon s 1305, which provides -

(1)	[Prima facie evidence] A book kept by a body corporate under a requirement of this Act is admissible in evidence in any proceeding and is prima facie evidence of any matter stated or recorded in the book.
(2)	[Documents] A document purporting to be a book kept by a body corporate is, unless the contrary is proved, taken to be a book kept as mentioned in subsection (1).

Books are defined in s 9 as including;

(a) a register; and
(b) any other record of information; and
(c) financial reports or financial records, however compiled, recorded or stored; and
(d) a document.

1. Mr Sandbach submitted that the only provision relied upon by the plaintiff as giving rise to a requirement to keep a book for the purposes of s 1305 was s 286. Section 286(1) relevantly provides -

   [Obligation to keep records] A company, registered scheme or disclosing
   entity must keep written financial records that:

   (a)        correctly record and explain its transactions and financial position and

   performance; and -

   (b)       would enable true and fair financial statements to be prepared and

   audited.

   The definition of financial records found in s 9 includes;

   (a)         invoices, receipts, orders for the payment of money, bills of exchange,

   cheques, promissory notes and vouchers; and

   (b)         documents of prime entry and

   (c)          working papers and other documents needed to explain the methods by

   which financial statements are made up and adjustments to be made in preparing
   financial statements.

2. In my view, the loan contract including its financial information is a document of prime entry. It is the document to which the accountants must refer to ascertain the amount that is loaned, the terms of the loan and the interest rate payable. It is a document which records the fees and expenses which are to be paid by the borrower. It is the document in which the loan transaction and its financial terms are first recorded. It is thus a book and financial record under s 9. I find that the loan contract was a book kept by the bank under a requirement of the Act for the purposes of s 1305. In particular, I find that the loan contract was a financial record required to be kept under s 286 as it correctly recorded and explained the loan transaction and would enable true and fair statements to be prepared and audited. In my opinion the bank has proved the loan contract.

3. Mr Sandbach took me to the provisions of the Corporations Act 2001 dealing with the form and evidentiary value of books, in particular in 1306(1) where it provides -

   [Method of keeping] A book that is required by this Act to be kept or
   prepared may be kept or prepared:

   (a)       by making entries in a bound or looseleaf book; or

   (b)       by recording or storing the matters concerned by means of a mechanical, electronic or other device; or

   (c)        in any other manner approved by ASIC.

   In sub-s (6) of s 1306 provides -

   [Deemed reproduction] A writing that purports to reproduce a matter recorded or stored by means of a mechanical, electronic or other device is, unless the contrary is established, taken to be a reproduction of that matter.

   In my view the bank statements purport to be reproductions of matters which are stored by electronic means. I believe I may take judicial notice of the fact that in this day and age banks store financial information by electronic means, and it is inconceivable that a bank could even operate without doing so. I accept that the bank statements have been proved.

4. As for the amount that was owing, the bank, in addition to relying upon the bank statements, relies upon a certificate given under the standard terms of the mortgage. Clause 24 provides:

   A written statement made up from our books and signed by one of our authorised officers about the amount payable under this mortgage is sufficient evidence of the amount and of any other matter referred to in the statement in connection with the amount unless it is contested in any proceedings between you and us.

   I think the proper construction of ‘contested’ must mean more than saying a plea is not admitted or denied. I think ‘contested’ means genuinely contested, and there is no evidence that this amount is contested at all. All that we have is a denial to a pleading.

5. Despite the extensive submissions of Mr Sandbach, including his written submissions, and despite his best efforts, I dismiss the appeal, and I order that the defendant pay the costs of the appeal.

6. I will vary Order 4 made by the master on 31 March 2008, as follows:

   4.         That there be a stay on execution of this judgment until after 4 p.m. on

   20 May 2008.

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