Financial Planning Association of Australia Limited v National Australia Bank Limited

[2000] VSC 515

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 4379 of 2000

THE FINANCIAL PLANNING ASSOCIATION OF AUSTRALIA LIMITED	Plaintiff
v.
NATIONAL AUSTRALIA BANK LIMITED	Defendant

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	4 DECEMBER 2000
DATE OF JUDGMENT:	14 DECEMBER 2000
CASE MAY BE CITED AS:	THE FINANCIAL PLANNING ASSOCIATION OF AUSTRALIA LTD. v. NATIONAL AUSTRALIA BANK LTD.
MEDIUM NEUTRAL CITATION:	[2000] VSC 515

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CATCHWORDS:      Practice and Procedure – Third Party Notice – Substantial delay in making application for leave – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. J.D. Lowenstein	McGrath Carey Katz
For the Defendant	Mr. T. Tsalanidis	Russell Kennedy

HIS HONOUR:

1. On 18 August 1994 one Carol Dawn Fairbairn commenced employment with the plaintiff The Financial Planning Association of Australia Ltd. as a filing clerk.

1. On 1 January 1996 Fairbairn was promoted to office manager.

1. Between March 1995 and November 1997 Fairbairn fraudulently altered and forged 193 cheques totalling $292,030.38.  The cheques were drawn on the plaintiff's account at the Stock Exchange branch of the National Australia Bank Ltd. (NAB).

1. Fairbairn deposited the cheques at various branches of the St. George Bank Limited (St. George).  St. George presented the cheques for collection to NAB which paid the cheques and debited the plaintiff's account.

1. Fairbairn was duly arrested and charge in relation to the matter.  On 15 June 1999 she was convicted of theft and attempted theft, and was sentenced to 18 months' imprisonment, 14 months of which was suspended for two years.

1. On 22 February 2000 the plaintiff filed this proceeding in the Court whereby it seeks to recover the sum of $292,030.38 from NAB.

1. On 22 March 2000 NAB filed its defence to the plaintiff's statement of claim.  By its defence it pleads an estoppel arising from the acts and omissions of the plaintiff in the drawing of the cheques, inexcusable delay by the plaintiff in alerting NAB to the fraud perpetrated by Fairbairn, a statutory defence under s.94 of the Cheques Act 1986 (Clth.) and a breach of duty by the plaintiff to take reasonable precautions in drawing cheques to prevent forged or fraudulent alterations.

1. On 6 April 2000 the proceeding came before Master Bruce to enable Master Bruce to make orders in relation to the further interlocutory steps to be taken by the parties.

1. By consent of the parties the Master made a number of orders in the proceeding including an order that by 4.00 p.m. on 20 April 2000 NAB file and serve any Third Party Notice.

1. NAB did not avail itself of the opportunity given to it in that regard.

1. On 13 November 2000 the proceeding again came before Master Bruce for directions.

1. By consent of the parties orders were made by the Master that there be a mediation of the proceeding.  That mediation was to take place on 13 December.

1. No application was made by NAB on 13 November for an order extending the time within which it might serve a Third Party Notice.

1. On 17 November NAB's solicitors filed a summons in the Court seeking leave to file and serve a Third Party Notice on Fairbairn and St. George.

1. The summons was supported by two affidavits by the solicitor for NAB, one sworn on 20 November 2000, the other on 23 November 2000.

1. In paragraph 5 of the first affidavit NAB's solicitor states:

"5.Following an inspection of the Plaintiff's discovered documents and the receipt by the Defendant of an investigator's report relating to the events surrounding the commission of the fraud by Fairbairn, I believe that the Defendant has a claim against Fairbairn and St. George Bank Limited ('St. George Bank').  These claims relate to or are connected with the subject matter of this proceeding and give rise to questions between those persons and the parties to this proceeding that should be determined at the same time in the one proceeding."

1. In paragraphs 4 and 7 of the second affidavit NAB's solicitor states:

"4.I personally inspected the Plaintiff's discovered documents on 25 July 2000 and subsequently wrote requesting copies.  The issue of copies was followed up on a number of occasions and they were not finally provided until 16 October 2000.

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7.The investigator's report regarding the events surrounding the commission of the fraud by Carol Dawn Fairbairn is obviously a privileged document and the Defendant seeks to rely on privilege in respect of same."

1. NAB's summons came before Master Evans on 24 November 2000.  The Master dismissed the application.

1. NAB now appeals from that order to a Judge of the Court.

1. In my opinion the delay which has occurred in this matter is such that it would now be quite inappropriate to accede to NAB'S application.

1. This proceeding is now ready for trial.  If it is not settled at mediation I have little doubt but that a trial date will be fixed for a hearing of the proceeding in the first half of 2001.

1. Why should the plaintiff now be delayed in taking steps to have that occur.

1. In my opinion there is no satisfactory reason for NAB not filing and serving any Third Party Notice against Fairbairn and St. George either within the time stipuated by the Master, or at the least shortly following the inspection by NAB's solicitor of the plaintiff's discovered documents on 25 July 2000.

1. It must have been apparent to NAB and its solicitors by that time that NAB had potential claims against both those parties.

1. If NAB now intends to pursue those claims as it apparently does, it can now institute a separate proceeding against St. George and Fairbairn.  If that proceeding is pursued with alacrity it can then make application to the Court for an order that it be heard at the same time as the present plaintiff's proceeding.

1. The appeal is dismissed with costs to be taxed and paid by the defendant.

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