Fitzsimons v Commonwealth Bank of Australia
[2011] NSWSC 537
•03 June 2011
Supreme Court
New South Wales
Medium Neutral Citation: Fitzsimons v Commonwealth Bank of Australia [2011] NSWSC 537 Hearing dates: 3 June 2011 Decision date: 03 June 2011 Jurisdiction: Equity Division Before: Windeyer AJ Decision: Leave granted to file a second amended statement of claim
Catchwords: PRACTICE AND PROCEDURE - application to file a second amended statement of claim Legislation Cited: Legal Profession Act 2004 (NSW) Category: Procedural and other rulings Parties: Maria Angela Fitzsimons (plaintiff)
Commonwealth Bank of Australia (defendant)Representation: M K Rollinson (plaintiff)
S Aspinall (defendant)
Lyons & Lyons (plaintiff)
Henry Davis York (defendant)
File Number(s): SC 2009/291227
EX TEMPORE Judgment
This is a notice of motion filed on 20 May 2011 for leave to file a second amended statement of claim. In the proceedings as presently constituted there is only one plaintiff, Mrs Maria Angela Fitzsimons. What is now sought is that there be a new claim with added plaintiffs, namely Mr Christopher Ronald Fitzsimons and Mrs Louisa Danielle Roberts, who I understand is the daughter of Mr and Mrs Fitzsimons.
There is at present a judgment in favour of the Commonwealth Bank of Australia ( the "Bank" ) entered against the three proposed plaintiffs, first, for possession of three properties in Potts Point and Darlinghurst and one property in Queensland; and second for money judgments totalling, I am told, about $3.8 million.
What is sought to be claimed in this action is that the defendant Bank failed to give proper discovery in the earlier proceedings. Category 6 of documents requirements for discovery was:
"All files, letters, correspondence, e-mails, faxes and notes relating to and dealing with claims made on the Bank by Jean Sayer and particulars of monies paid to her".
It is claimed here that the list of the documents did not include, among other things, a letter dated 16 January 2006 and documents enclosed therewith from Miss Sayer to the Bank, and a letter dated 22 February 2006 and documents enclosed therewith from the Law Society to the Bank. There are other documents listed in paragraph 16 of the proposed new pleading, but it is accepted that they are not relevant because they bear dates after what would be described here as the crucial date, namely some time around the middle of 2006.
The first document referred to advised the Bank that Miss Sayer had been appointed receiver of Mr Fitzsimons pursuant to s 630 of the Legal Profession Act 2004 (NSW) , stated that he kept a trust account with the Bank and asked for copies of statements in relation to that account from the date it was opened up to 1 January 2002 and from 28 March 2005 until the account was closed.
With her letter Miss Sayer included a copy of the notice of appointment of receiver and a copy of the court order dated 21 December 2005 which included in order 4 an order that Mr Fitzsimons be restrained from removing, causing or permitting to be removed from New South Wales; or selling, charging, mortgaging or otherwise dealing with or disposing of; or causing or permitting to be sold, charged, mortgaged or otherwise deal with or disposed of all or any of his assets within the State of New South Wales without first obtaining the leave of the plaintiff or of the court to do so. I accept that these orders would have been obtained ex parte, but there was nothing to prevent Mr Fitzsimons applying for their discharge or variation.
The second document to which attention was drawn was a letter from the solicitor, I think in-house solicitor, of the Law Society dated 22 February 2006 to the Bank advising of the appointment of Miss Sayer as receiver; and advising, in a condensed way, of the terms of the asset freezing order; and also advising that the orders had been registered against the title to the properties at Kings Cross and Potts Point.
The first question, I think, which would have to be decided is whether or not those documents fell within the category for discovery which I have mentioned. In my view, without making a final determination, it is more likely than not that the first document does fall within that category. In my view, it could be held to be a claim made on the Bank by Miss Sayer for either the monies in the account or for details of the account, and the fact that it also seeks particulars of monies paid to her does mean it is not a claim. That is not a final decision, but a decision which is sufficient for the purposes of this matter to say that such a claim would not be bound to fail. So far as the second document is concerned, that I consider would also on its face amount to notification of a freezing order.
What is alleged has happened is that after the Bank obtained notice of the freezing order, Mr Fitzsimons used monies in the Bank accounts for the purpose of paying gaming debts. While it is not altogether clear, it appears from paragraphs 10 and 11 of the propounded document that Mr Fitzsimons gave a mandate to TAB Limited to demand through its bankers, Westpac Banking Corporation, periodic payments from the Bank to pay for debts which Mr Fitzsimons had incurred with the TAB through his gambling. It is said, therefore, that the Bank, by its failure to comply with the freezing order, allowed those payments to be made.
It is then alleged, at least as I understand it, that had those monies not been paid for gambling debts then there would have been sufficient money available to Mr Fitzsimons to enable him to make payments which were due under his various mortgages. And, as I understand it, it is said, although some of the correspondence indicated he did not understand this, that he could have approached the Law Society or the court for a variation of the freezing order to enable the mortgage payments to be made. There is some evidence that the Law Society would not consent to this, but that would not have meant that he could not have approached the court.
Whether or not Mr Fitzsimons could have benefited from this is quite unclear to me. The basis on which this is a matter of complaint when he himself was breaching the freezing order is also a matter which I find difficult to comprehend. However, the position could be different with his wife and daughter who may not necessarily have known what was happening.
As I understand the matter, while the consent judgment remains it is not possible to take proceedings circling around it as if it did not exist. In other words, it is necessary to obtain an order, normally in separate proceedings, setting aside that judgment, and if that is successful then to take any other action which may be available as a result of that judgment being set aside. As a general rule it is necessary to establish a judgment was obtained by fraud to have it set aside.
I said to counsel earlier that I had been made aware during a case I was hearing many years ago of an authority which held that a failure to discover relevant documents might amount to fraud, but in the interval I have not been able to find it. Nevertheless, if there was a fraudulent failure to discover the documents and that was something which bore on the giving of the consent then it is possible that the judgment could be set aside.
Mr M K Rollinson, counsel for the plaintiff, also submits that a negligent or innocent misrepresentation that no such documents had ever existed would also be sufficient. I have the greatest doubt about that, but at the present moment if the matter proceeds any further I would not prevent him trying to plead that if it can be properly done.
So far as the claim about unconscionable conduct is concerned, it seems to me that that could give rise to nothing further and on any basis that should not be allowed to go ahead.
The defendant Bank says that this litigation is costing it money; that it is unlikely that the proposed plaintiffs will be able to pay costs if unsuccessful, which is a matter on which I have no evidence at all; and that the claim, even if allowed to go ahead, is quite unlikely to result in any benefit to the proposed plaintiffs. However it does not appear to me that I could find that the claim to set aside the judgment is one which is doomed to fail.
Having said that, however, it is an entirely different claim sought to be made and with different parties from the claims pleaded in the present proceedings. The last document on the file has already been struck out so that there is now no pleaded statement of claim. As I take the view that in ordinary circumstances it is necessary to bring separate proceedings to set aside a judgment whether obtained by consent or not on the ground of fraud and as this is an entirely new action brought by three new plaintiffs, it did seem to me that it would not be sensible to allow it to proceed in the existing proceedings and if the proposed plaintiffs wish to pursue the claim now proposed then they should do so by separate proceedings once again brought in the commercial list.
This could involve them in some additional costs, but I thought as it is accepted the present proceedings are not properly constituted and not properly pleaded they cannot proceed, that is the correct course.
I have, however, listened to further argument from Mr Rollinson about whether the present proceedings should be allowed to be maintained and an amended statement of claim with new plaintiffs should be allowed to be filed in these proceedings because he says that the documents upon which the claim for fraud is now based were discovered in these proceedings. Whether or not that is technically a good enough reason, it may be a fair basis to allow this to happen as it will not disadvantage the Bank, provided the claim is limited to setting aside the consent judgment.
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Decision last updated: 07 June 2011
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