Dyason v Egan

Case

[2015] FCCA 2371

1 September 2015


FEDERAL CIRCUIT COURT OF AUSTRALIA

DYASON & ANOR v EGAN & ORS [2015] FCCA 2371
Catchwords:
PRACTICE AND PROCEDURE – Application for summary dismissal – whether Court has jurisdiction – whether applicant has no prospect of successfully prosecuting application – parts of claim struck out.

Legislation:

Bankruptcy Act1966, ss.27(1), 33(1)(c), 178(1), 178(2), 179
Federal Circuit Court of Australia Act 1999, ss.17A(2)(b), 18
Federal Circuit Court of Australia Rules 2001, rr.1.03, 1.05(2), 13.10
Federal Court Rules2011, rr.16.02, 16.02(1)(b), 16.02(1)(d), 16.02(2)(e)

Australian Securities and Investments Commission (ASIC) v Edensor Nominees Pty Ltd & Ors (2001) 204 CLR 559
Barclays Bank Ltd v Quistclose Investments Ltd [1980] AC 567
Ghana Commercial Bank v Chandiram [1960] AC 732
Heshmati v Paul Burness and Morgan Lane as trustees of the bankrupt estate of Bijan Heshmati [2012] FMCA 884
Jones  (Bankrupt), in the matter of  Jones  v Porter (Trustee) [2015] FCA 644
Kneipp v Jonsson [2013] FCCA 1695
McIntosh v The Official Trustee in Bankruptcy [2014] FCCA 2502
Re Wakim; Ex Parte McNally & Anor (1999) 198 CLR 511
Tomasetti v Andrew John Scott as trustee of the property of Peter Charles Tomasetti & Anor [2013] FCCA 1693

Glister, The nature of Quistclose trusts: classification and reconciliation (2004) 63 Cambridge Law Journal 632
Rickett, Different Views on the Scope of the Quistclose Analysis: English and Antipodean Insights (1991) 107 LQR 608
Swadling Orthodoxy and Penner Lord Millett’s analysis in W Swadling (ed), The Quistclose Trust: Critical Essays (2004)
Thomas D, Reflections on the “Quistclose trust” – Twinsectra Ltd v Yardley (2002) 20 C&SLJ 352

First Applicant: LINDEN DYASON
Second Applicant: IIB GLOBAL N.V.
First Respondent: JEFFREY FRANCIS EGAN
Second Respondent: MARGARET ANNE SIMPSON
Third Respondent: DARREN SCOTT PASCOE
Fourth Respondent: ELIZABETH ANN FLEMING
Fifth Respondent: LINDSEY JANE DYASON
File Number: BRG 204 of 2014
Judgment of: Judge Jarrett
Hearing date: 26 November 2014
Date of Last Submission: 26 November 2014
Delivered at: Brisbane
Delivered on: 1 September 2015

REPRESENTATION

The First Applicant appeared in person and for the second applicant.
Solicitor for the First and Second Respondents: Ms Oliver
Solicitors for the First and Second Respondents: Colin Biggers & Paisley
Counsel for the Third and Fourth Respondents: Mr Crawford
Solicitors for the Third and Fourth Respondents: DLA Piper
No appearance for the Fifth Respondent.

ORDERS

  1. Pursuant to rule 13.10(a) of the Federal Circuit Court Rules 2001, the claim made in paragraphs 1A and 7 of the applicants’ Amended Originating Application filed on 4 November, 2014 be dismissed.

  2. By 4.00pm on 15 September, 2015 the applicants file and serve a further amended originating application in accordance with paragraph 50 of the reasons for judgment delivered on 1 September, 2015.

  3. Otherwise the application in a case filed on 31 July, 2014 be dismissed.

  4. The application be adjourned to 21 September 2015 at 9.30 a.m. for directions in the Federal Circuit Court of Australia sitting at Brisbane.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 204 of 2014

LINDEN DYASON

First Applicant

IIB GLOBAL N.V.

Second Applicant

And

JEFFREY FRANCIS EGAN

First Respondent

MARGARET ANNE SIMPSON

Second Respondent

DARREN SCOTT PASCOE

Third Respondent

ELIZABETH ANN FLEMING

Fourth Respondent

LINDSEY JANE DYASON

Fifth Respondent

REASONS FOR JUDGMENT

  1. Mr Dyason’s son, Arthur, was made bankrupt on 3 May, 2007.  The third and fourth respondents are the trustees of his estate in bankruptcy.  The first applicant, Linden Dyason, is Arthur’s father.  He tried to rescue his son from his bankruptcy.  He ascertained that a payment of $44,500 would have his son’s bankruptcy annulled.  However, Mr Dyason Snr. soon became aware that it was not that easy.

  2. By their principal application, Mr Dyason and IIB Global N.V., a company of which he is the only director and shareholder apparently, seek redress against the first and second respondents for professional negligence and breach of contract.  Against the third and fourth respondents, they seek relief which I shall explore more fully shortly, but for present purposes it is sufficient to say that the relief is sought in equity and pursuant to the Bankruptcy Act1966 (Cth). No relief is claimed against the fifth respondent, who is Arthur’s now estranged wife.

  3. These reasons relate to an interlocutory application by the third and fourth respondents whereby they seek that the proceedings against them be dismissed for want of jurisdiction.  Alternatively, they seek summary judgment in respect of certain parts of the claim and an order that the balance of the statement of claim be struck out with leave to re-plead.

  4. The present interlocutory application came before the Court on 8 October, 2014 before another judge.  On that day, directions were made that permitted the applicants to file and serve an amended originating application and an amended statement of claim.  The application was adjourned for further hearing to 26 November, 2014.  The applicants took the opportunity to file and serve an amended originating application and an amended statement of claim.  However, the third and fourth respondents contend that the amendments do nothing to address the deficiencies in the application and they press their interlocutory application, both in respect of the principal relief sought (dismissal for want of jurisdiction) and the alternative relief (summary judgment).

  5. The first and second respondents have not participated in this interlocutory application, although they did appear and voiced support for the third and fourth respondent’s position.

The applicants’ case

  1. As the third and fourth respondent’s submissions point out, there are two distinct claims against the third and fourth respondents.

  2. The first claim lies within paragraphs 7 – 14 of the statement of claim and is made only by Mr Dyason against the third and fourth respondents.  Relevant to the first claim, Mr Dyason alleges that:

    a)on 3 May 2007 Arthur became bankrupt;

    b)on 19 July, 2007 the third and fourth respondents wrote to Arthur informing him that, provisionally, the sum of $44,500 was required in order to annul the bankruptcy and had to be paid by 10 August to avoid further costs;

    c)on 9 – 11 August, 2007 the first applicant paid the sum of $44,500 to the third and fourth respondents;

    d)“The sum was paid by [the first applicant] for the express and sole purpose of obtaining a discharge of the bankruptcy of his son”;

    e)“As such the money ... was impressed with an express or resulting trust in favour of [the first applicant]”;

    f)the third and fourth respondents used the money to pay their own fees and disbursements “when they knew that the bankruptcy was not going to be annulled and that the use of the money ... was contrary to the purpose for which [the first applicant] had entrusted them with the money”;

    g)in the circumstances:

    i)the third and fourth respondents breached the trust and are liable to pay equitable compensation in the sum of $44,500;

    ii)the third and fourth respondents have been unjustly enriched and ought to repay the sum of $44,500 to the first applicant;

    iii)“As officers or [sic] the Court, or as trustees in bankruptcy, [the third and fourth respondents] ought in conscience repay the money to [the first applicant] and are amendable [sic] to an order by the Court that they repay the money with interest.”

  3. The third and fourth respondents argue that Mr Dyason’s claims suggest the following 3 causes of action:

    a)there was an express trust for a non-charitable purpose, which the third and fourth respondents breached;

    b)there is a resulting trust in favour of the first applicant;

    c)the first applicant is entitled to restitution from the third and fourth respondents.

  4. I agree with the third and fourth respondent’s submissions that whatever else, the pleading that “as officers of the Court, or as trustees in bankruptcy, [the third and fourth respondents] ought in conscience repay the money” does not plead a valid cause of action.  However, Mr Dyason does otherwise plead identifiable causes of action arising out of his payment to the third and fourth respondents on behalf of his son.  The third and fourth respondents’ submissions appear to acknowledge that.

  5. By his amended statement of claim, Mr Dyason added a claim whereby he alleged that:

    a)“…from time to time [the first applicant] has asked [the third respondent] and [the fourth respondent] to pay him back the sum of $44,500 and they have refused to do so”; and

    b)“The refusal to refund the $44,500 is a decision of a trustee in bankruptcy reviewable pursuant to section 178 of the Bankruptcy Act.”

  6. The second claim against the third and fourth respondents is advanced by both Mr Dyason and IIB Global.  The facts upon which that claim is based also involve the first and second respondents.  I have included them below.  In respect of these claims, the applicants allege:

    a)on 4 November, 1999, Arthur and his wife, the fifth respondent, became joint tenants of land located at Martells Road, New South Wales;

    b)as at 3 May, 2007 (the date of Arthur’s bankruptcy), there was a registered mortgage over the land in favour of Permanent Trustee Australia Limited;

    c)on 23 April, 2008 the second applicant, under Mr Dyason’s instructions, paid $331,171.60 to Permanent, which was “sufficient to discharge the mortgage”;

    d)on 9 May, 2008 the first respondent, acting as the applicants’ solicitor received the certificate of title and a discharge of mortgage from Permanent;

    e)“[The first applicant] or [the second applicant] had a right to possession and to retain possession of the certificate of title and [the discharge of mortgage] ... as the documents were held as security for repayment of the money paid to discharge the registered mortgage”;

    f)as at 6 April, 2009 the third and fourth respondents were aware:

    i)that either the first applicant or the second applicant “had a charge or equitable mortgage” on the land in the sum of at least $331,171.60;

    ii)that they ought to recompense either the first applicant or the second applicant for this money should they sell the property, in priority to any other claims on the fund;

    g)in December, 2013 the land was sold for $404,000;

    h)the third and fourth respondents have failed and refused to pay any of the proceeds of sale to the applicants;

    i)the third and fourth respondents ought to pay from the proceeds of sale the sum of $331,171.60 plus interest, or alternatively half that sum as:

    i)the applicants are subrogated to the rights of Permanent;

    ii)the land is charged for payment of the sum of $331,171.60 by reason of the first applicant causing the payment to be made to discharge the mortgage and to secure the land for the benefit of Arthur and his wife, such endeavour having failed and it being unconscionable for the third and fourth respondents to take the benefit of the payment of the mortgage without reimbursing the applicants;

    iii)“as officers or [sic] the Court, or as trustees in bankruptcy, [the third and fourth respondents] ought in conscience repay the money and are amendable [sic] to an order by the Court that they repay the money with interest;

    iv)“Further, in the circumstances [the third and fourth respondents] ought not be indemnified from the bankrupt estate for their remuneration and costs”.

  7. I think that it is readily apparent that as against the third and fourth respondents, Mr Dyason has no cause of action arising from these facts.  As the third and fourth respondents point out, Mr Dyason did not advance the money to Permanent; IIB Global did.  Having done so, IIB Global is arguably entitled to be subrogated to Permanent’s rights under the loan agreement and associated mortgage between it and Arthur.  That might have included an entitlement to a charge over the property.  That is to say, IIB Global might have had security over the property that was subsequently sold by the third and fourth respondents.

  8. However, as with the claim of a similar nature made by Mr Dyason in respect of his payment of $44,500, the claim against the third and fourth respondents that “as officers of the Court, or as trustees in bankruptcy, the respondents ought in conscience repay the money” does not constitute a valid cause of action.

  9. Similarly, the claim against the third and fourth respondents that “in the circumstances [the third and fourth respondents] ought not be indemnified from the bankrupt estate for their remuneration and costs” is not supported by any pleaded facts.  As the third and fourth respondents submit, the applicants have not set out:

    a)the basis upon which they are entitled to apply for such an order;

    b)the facts that would disentitle the third and fourth respondents to remuneration or to their costs; or

    c)the statutory provision that authorises the Court to make such an order.

  10. However, by their amended statement of claim filed on 4 November, 2014 Mr Dyason and IIB Global seek that an “enquiry under section 179 of the Bankruptcy Act ought to be had into the conduct of [the third respondent] and [the fourth respondent] and orders made as set out below:” Those orders are that the third and fourth respondents pay to Mr Dyason and IIB Global $331,171.60 plus interest and costs.

  11. Insofar as the first and second respondents are concerned, they admit that they were retained by the second applicant.  The claim against the first and second respondents is for negligence and breach of contract.  It is not difficult to identify the nature of the claim made by IIB Global against the solicitors if the other allegations of fact set out in the amended statement of claim concerning the discharge of Permanent’s mortgage and the payment of $331,171.60 are made out.

  12. As the third and fourth respondents summarise in their written submissions, the following causes of action against the third and fourth respondents appear as candidates on the amended statement of claim:

    a)The first applicant paid the sum of $44,500 to the third and fourth respondents so that they would hold it on trust for the purposes of obtaining an annulment of Arthur’s bankruptcy. The third and fourth respondents did not annul the bankruptcy and thereby breached the trust and, as a result, must pay the sum of $44,500 to the first applicant.

    b)The third and fourth respondents hold the sum of $44,500 on resulting trust for the first applicant.

    c)The third and fourth respondents have been unjustly enriched in the sum of $44,500 and are liable in restitution to pay that amount to the first applicant.

    d)To the extent that the third and fourth respondents have made a decision not to refund the $44,500 to Mr Dyason, he seeks a review of that decision under s.178 of the Bankruptcy Act;

    e)The applicants are subrogated to the rights of Permanent under the mortgage and, accordingly, are entitled to be paid the sum of $331,171.60 from the proceeds of sale of the property;

    f)The circumstances surrounding the discharge of the Permanent’s mortgage and the subsequent sale of Arthur’s property demand an enquiry into the third and fourth respondent’s conduct of Arthur’s estate.

Jurisdiction

  1. As the third and fourth respondents point out, the Federal Circuit Court is a statutory court, not a court of general jurisdiction. For it to be seized of jurisdiction in any given case, the jurisdiction must be conferred upon it by a Commonwealth statute. The Bankruptcy Act confers jurisdiction in bankruptcy on this Court: s.27(1) of the Bankruptcy Act.

  2. However, federal claims not otherwise the subject of express statutory conferral, and non-federal claims may be brought within the Court’s jurisdiction if they are associated with matters in which the jurisdiction of the Court is otherwise invoked: s.18 of the Federal Circuit Court of Australia Act1999 (Cth).

  3. For the purposes of s.18 of the Act, matter is not confined to the particular proceedings before the Court, but is a reference to “the justiciable controversy between the actors to it comprised of the substratum of facts and claims representing or amounting to the dispute or controversy between or among them”: Re Wakim; Ex Parte McNally & Anor (1999) 198 CLR 511 per Gummow and Hayne JJ at [139]-[141].

  4. Here, there is one matter.  It comprises the substratum of facts and claims representing the disputes between the applicants and the respondents about the administration of the estate of Arthur in bankruptcy by the third and fourth respondents.  Specifically it comprises the dispute about the payments Mr Dyason and IIB Global have made, the purposes for which those payments were made and whether in all of the circumstances there ought to be an enquiry into the conduct of the third and fourth respondents of Arthur’s estate in bankruptcy.

  5. A matter, once within jurisdiction is forever within jurisdiction: Australian Securities and Investments Commission (ASIC) v Edensor Nominees Pty Ltd & Ors (2001) 204 CLR 559 per Gleeson CJ, Gaudron and Gummow JJ at [7].

  6. In the present case, the applicants have clearly invoked federal jurisdiction in relation to their claims against the third and fourth respondents pursuant to s.179 of the Bankruptcy Act.

  7. Whilst the applicants also invoke state, not federal, jurisdiction in their claims against the third and fourth respondents, the matter is a federal matter and the Court has jurisdiction in respect of those claims: s.18 of the Federal Court of Australia Act.

  8. In my view, the third and fourth respondent’s challenge to the jurisdiction of the Court to hear and determine the applicants’ claims fails.

Summary judgment

  1. The third and fourth respondents submit that if the Court determines that it has jurisdiction in these proceedings then nonetheless the third and fourth respondents should have summary judgment against the first applicant in respect of paragraphs 3-5 of the originating application and against both applicants in respect of paragraphs 6-7 of the originating application.

  2. The Court may give judgment for a respondent in a proceeding in relation to the whole or any part of a proceeding if the Court is satisfied that the applicant has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding: s.17A(2)(b) of the Federal Circuit Court of Australia Act 1999; r.13.10 Federal Circuit Court of Australia Rules 2001.

  3. Insofar as Mr Dyason’s claim to review the decision of the third and fourth respondents not to repay him his $44,500 pursuant to s.178(1) of the Bankruptcy Act is concerned, I am satisfied that he has no reasonable prospect of prosecuting that claim and that it should be summarily dismissed. By s.178(2) of the Act, the application must be made not later than 60 days after the day on which Mr Dyason became aware of the third and fourth respondents’ decision about that matter. On the evidence, his claim is well out of time. The approach of other judges of this Court has been to consider that the time limited by s.178(2) of the Act cannot be extended by recourse to s.33(1)(c) of the Act: Heshmati v Paul Burness and Morgan Lane as trustees of the bankrupt estate of Bijan Heshmati [2012] FMCA 884; McIntosh v The Official Trustee in Bankruptcy [2014] FCCA 2502; Tomasetti v Andrew John Scott as trustee of the property of Peter Charles Tomasetti & Anor [2013] FCCA 1693; Kneipp v Jonsson [2013] FCCA 1695.

  4. However, I cannot come to the view that Mr Dyason cannot successfully prosecute his claim for a return of the $44,500.  His case is that the payment was given to the third and fourth respondents for an express, specific purpose, namely to secure an annulment of Arthur’s bankruptcy.  He has pleaded that the third and fourth respondents were made known of that purpose.  Whilst his pleading might lack some particularity, that is not a matter that spells the end of his proceeding at this stage. 

  1. The claim to an inquiry pursuant to s.179 of the Bankruptcy Act does not suffer from the same time limitation problem that Mr Dyason’s claim pursuant to s.178(1) does. It can still be prosecuted. I cannot say that at this stage he has no prospects of successfully prosecuting his claim. Indeed, if the facts set out in his statement of claim are proved, there may well be a need for an inquiry.

  2. The claim based upon the subrogation argument should not be summarily dismissed.  Because IIB Global made the relevant payment, I accept that Mr Dyason has no claim in respect of it and insofar as the proceedings seek to prosecute a claim by him based upon IIB Global’s payment, it should be dismissed.   But otherwise, the claim to subrogation does not appear, on its face, to be unable to be successfully prosecuted.  IIB Global has the benefit of the principle in Ghana Commercial Bank v Chandiram [1960] AC 732. Where a third party pays off a debt secured by mortgage he is presumed, unless the contrary appears, to intend that the mortgage shall be kept alive for his own benefit.

  3. If IIB Global had the benefit of Permanent’s mortgage, then arguably the proceeds of sale of Arthur’s property are charged with repayment of the amount paid by IIB Global to Permanent.  I cannot say that at this stage the claim is unable to be successfully prosecuted by IIB Global.

Statement of Claim

  1. The third and fourth respondents argue that if the Court determines that it has jurisdiction and is not inclined to summarily dismiss all of the applicants’ claims, then the statement of claim is defective and should be amended.  The respondents refer me to the pleading rules in the Federal Court Rules 2011 and in particular rule 16.02.

  2. However, whilst those rules might be capable of application in this Court by derivation (FCCR 1.05(2)), application of the Federal Court Rules 2011 is discretionary where; if in a particular case this Court’s rules are insufficient or inappropriate. Even if the Court decides to apply them, the Court may apply the Federal Court Rules “in whole or in part and modified or dispensed with, as necessary”. The application of the rules of the Federal Court in this Court must be consistent with the objects and principles of the Act that establishes this Court (as set out in s.3 of the Federal Circuit Court of Australia Act and the objects of this Court’s rules set in in FCCR 1.03 and esp. 1.03(3).

  3. Mr Dyason is not a lawyer.  He represents himself in these proceedings.  The third and fourth respondents cannot expect to receive from him a pleading in a form that one would expect to receive from a represented party. In Jones (Bankrupt), in the matter of Jones v Porter (Trustee) [2015] FCA 644, Katzman J pointed out:

    33.    The FCCR are designed to assist the just, efficient and economical resolution of proceedings: r 1.03(1). But the right balance needs to be struck. It is no accident that the Rules give pre-eminent position to the adjective “just”. The just resolution of proceedings includes adherence to due process. Sometimes applications appear to be baseless but, upon close examination, there is a good point. The good point might easily be overlooked when efficiency becomes the overriding consideration. In this case, having reached a preliminary view that there were no reasonable prospects of the applicant succeeding, the primary judge should have listed for hearing the question of whether the proceeding should be summarily dismissed. That would have given each party, but most importantly Mr  Jones, a fair opportunity to marshal his evidence and make his submissions and to do so in person and through a lawyer if he so chose.

  4. The third and fourth respondents argue that there are three major problems with the statement of claim:

    a)It does not plead all of the material facts necessary to make out the first applicant’s claim for breach of an express trust, in contravention of Federal Court Rules 16.02(1)(d) and 16.02(2)(e);

    b)In respect of the second applicant’s claim for subrogation, it does not state material facts that are necessary to give the third and fourth respondents fair notice of the case to be made against them at trial, in contravention of Federal Court Rule 16.02(1)(d); and

    c)It pleads evidence not material facts, is unduly lengthy and is likely to cause prejudice and delay in the proceeding, in contravention of Federal Court Rule 16.02(1)(b), 16.02(1)(d) and 16.02(2)(d).

  5. But in my view, the applicants’ amended statement of claim suffers from none of those defects. 

  6. As to Mr Dyason’s claim based upon his payment of $44,500, it is true that he does not seek to set up an express trust by pleading that both he and the third and fourth respondents intended that the money he paid to them would be held by them on trust.  But he does not have to.  The third and fourth respondents’ argument is based upon the proposition that Mr Dyason’s claim is based upon an express trust.  But as I understand his case, it is based upon the payment of money to the respondents for an express purpose.  Upon the failure of that purpose, the respondents held the money on trust for Mr Dyason.  It was not held by them for their own use.  Whether that is an express trust, or an resulting trust or an implied trust is the subject of significant debate.  The classification of a trust arising in respect of property given for a specific purpose, particularly as exemplified by the decision in Barclays Bank Ltd v Quistclose Investments Ltd [1980] AC 567, has been the subject of considerable academic comment: see, for example, Rickett, Different Views on the Scope of the Quistclose Analysis: English and Antipodean Insights (1991) 107 LQR 608; Thomas D, Reflections on the “Quistclose trust” – Twinsectra Ltd v Yardley (2002) 20 C&SLJ 352; Swadling Orthodoxy and Penner Lord Millett’s analysis in W Swadling (ed), The Quistclose Trust: Critical Essays (2004); and Glister, The nature of Quistclose trusts: classification and reconciliation (2004) 63 Cambridge Law Journal 632.

  7. However, it is also true that Mr Dyason does not plead that he expressly made known to the respondents the purpose of his payment of $44,500 to them.  He might argue that it is open to inference from the fact that the respondents requested that sum and he paid the sum so requested, but if it is his case that he said to them (orally or in writing) that the payment was for a particular purpose, those facts should be pleaded.

  8. As to IIB Global’s claim based upon subrogation, the third and fourth respondents argue that under the principle in Ghana Commercial Bank a party will not be entitled to subrogation if he did not intend that the mortgage should be kept alive for his own benefit.  If the true nature of the transaction between the payer of the money and the person at whose instigation it is paid is simply the creation of an unsecured loan, the payer will not be entitled to subrogation.  In other words, if what was intended between the parties was really an unsecured borrowing, there is no room for the doctrine of subrogation.

  9. The third and fourth respondents point out that in paragraph 17 of the amended statement of claim the applicants plead that on 23 April, 2008 IIB Global transferred the sum of $331,171.60 to Permanent. In paragraph 19, the applicants allege that at the same time as the payment Mr Dyason attended upon the first respondent “for the purpose of documenting a loan from IIB Global to Arthur and Lindsey Dyason for the money used to obtain a discharge of the mortgage”.  The respondents suggest that it appears that a loan agreement between the IIB Global, Arthur and the Lindsey Dyason was reached at about the time that the money was paid to Permanent.  The respondents argue that the loan agreement and its terms are material facts that should be pleaded because they are necessary to give the third and fourth respondent fair notice of the case to be made against them at trial.

  10. But in my view that is not so.  The fact of the agreement has been pleaded.  It may be that a properly directed request for particulars is all that is needed.  That is especially so given that at paragraph 27 of the amended statement of claim there is a claim that the first respondent sent to Arthur and Lindsey Dyason a “draft mortgage with IIB for their consideration” and later at paragraph 29 of the amended statement of claim it is pleaded that there was a “verbal agreement by Arthur Dyason and his wife, Lindsey, to give a mortgage”. 

  11. The case that the third and fourth respondents are to meet is demonstrably clear.  Whilst it is not pleaded elegantly or with the precision that might be expected from a well-practiced pleader, it is sufficient in my view to inform the respondent the case that they have to meet.  A request for particulars from the respondents might assist to focus Mr Dyason’s mind on what they think remains unclear.

  12. Finally, the respondents complain that the third problem with the statement of claim is that it pleads evidence, not facts.  Whilst that might be so in some respects, the respondents are, in my view looking for perfection from the applicant in circumstances where it is unreasonable to do so.

  13. By their own written submissions, the respondents have identified the essential facts pleaded by IIB Global::

    a)that Arthur owned the land;

    b)that Permanent had a mortgage over the land;

    c)that it reached a loan agreement with Arthur;

    d)that, pursuant to the loan agreement, it paid the $331,171.60 owing to Permanent under the mortgage;

    e)that, in light of (a)-(d), it was entitled to a right of subrogation in respect of Permanent’ s mortgage;

    f)that the third and fourth respondents were appointed as trustees of Arthur’s bankrupt estate;

    g)that the land was sold for $404,000 by the third and fourth respondents, who received the sale proceeds;

    h)that, in light of (a)-(g), the third and fourth respondents should pay the sum of $331, 171.60 to the second applicant.

  14. IIB Global has pleaded each of those matters.  The balance of the pleading seems to go to the applicants claim against the first and second respondents and the claim for negligence and breach of contract against them.

  15. Those respondents make no complainant about the pleading.

Conclusion

  1. This Court has jurisdiction in these proceedings.

  2. The third and fourth respondents should have summary judgement in respect of the relief claimed in paragraphs 1A and 7 of the Amended Originating Application filed on 4 November, 2014.

  3. The Amended Originating Application filed on 4 November, 2014 should be further amended to make clear that the orders sought in paragraphs 4 and 5 are orders sought by IIB Global only.

  4. Otherwise the application in a case filed on 31 July, 2014 is dismissed.  

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Associate: 

Date:       1 September 2015

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Cole v Whitfield [1988] HCA 18