James v Australia and New Zealand Banking Group Limited

[2019] NSWCA 70

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

James v Australia and New Zealand Banking Group Limited [2019] NSWCA 70

Hearing dates:

27 March 2019

Date of orders:

27 March 2019

Decision date:

12 April 2019

Before:

McCallum JA at [1]
Sackville AJA at [15]

Decision:

1. By consent, within 14 days, the respondent is to provide a response in the nature of a pleading to the “particulars of representation by silence by ANZ” document dated 7 December 2018.

 

2. The summons seeking leave to appeal filed 12 March 2019 is dismissed.

 3. The applicant is to pay the respondent’s costs.

Catchwords:

CIVIL PROCEDURE – summons seeking leave to appeal against decision refusing application for disclosure of documents and leave to issue subpoenas – whether documents were necessary for the resolution of the real issues in dispute – finding by primary judge that the need for disclosure was obviated by a concession made by the respondent – no error or injustice established

Legislation Cited:

Practice Note SC Eq 11
Supreme Court Act 1970 (NSW), s 101(2)(e)

Cases Cited:

Australia and New Zealand Banking Group Limited v James (No 2) [2019] NSWSC 59
Harvey v Phillips (1956) 95 CLR 235; [1956] HCA 27

Category:

Procedural and other rulings

Parties:

David Anthony James (applicant)
Australia and New Zealand Banking Group Limited (respondent)

Representation:

Counsel:
Mr D Pritchard SC, Mr J Baird (applicant)
Mr R Foreman, Ms K Boyd (respondent)

  Solicitors:
Allsop Glover Lawyers (applicant)
Allens Lawyers (respondent)

File Number(s):

2019/79380

Publication restriction:

None

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity Division

Citation:

Australia and New Zealand Banking Group Limited v James (No 2) [2019] NSWSC 59

Date of Decision:

12 February 2019

Before:

Ball J

File Number(s):

2013/306563

Judgment

1. McCALLUM JA: David James sought leave to appeal against the decision of Ball J dismissing an application for disclosure and leave to issue subpoenas. [1] Leave was required because the decision was interlocutory. [2] On 27 March 2019, the Court dismissed the application, reserving reasons. These are my reasons for joining in the orders made.

   1. Australia and New Zealand Banking Group Limited v James (No 2) [2019] NSWSC 59.

   2. Supreme Court Act 1970 (NSW), s 101(2)(e).

2. The circumstances in which the production of documents was sought require explanation. Australia and New Zealand Banking Group Limited (“ANZ”) had provided financial facilities to companies within a group associated with Mr James. The facilities were secured by charges over the assets of the companies and guarantees given by Mr James.

3. In April 2013, ANZ appointed PwC to conduct a review of the balance sheets of two companies within the group. The review indicated a range of valuations including the possibility of full recovery of the debt to ANZ against the assets of those companies. In August 2013, ANZ appointed PwC as receivers and managers of the two companies. In October 2013, ANZ commenced the primary proceedings against Mr James seeking to enforce his guarantees. The amount claimed was in the order of $14 million plus interest, being the total amount of principal and interest under the relevant facilities.

4. On 23 April 2014, ANZ filed a notice of motion for summary judgment against Mr James. On 16 May 2014, he consented to the entry of judgment against him in the full sum claimed. However, he later sought to have the consent judgment set aside.

5. The application was made by notice of motion filed 19 September 2017. The motion did not specify the grounds on which the order was sought. On 17 November 2017, Mr James filed a notice of motion seeking disclosure and leave to issue subpoenas. The affidavits in support of the disclosure application indicated that the basis for the application to have the consent judgment set aside was alleged misrepresentation on the part of ANZ. Specifically, the affidavits asserted that, by reason of ANZ’s silence as to completed and anticipated realisations of the assets of the two companies in receivership, Mr James had assumed that recoveries under the securities held by the bank would meet the debt in full and accordingly that he was misled into consenting to the entry of judgment in May 2014. The application thus invoked the principle stated by the High Court in Harvey v Phillips (1956) 95 CLR 235 at 243; [1956] HCA 27.

6. Following a series of separate applications and appeals in respect of the same borrowings, the disclosure motion was eventually listed for hearing before Rein J in November 2018. Before that hearing, ANZ had sought particulars of the alleged misrepresentations by silence but Mr James had refused to provide the particulars sought. When the disclosure motion came before Rein J, his Honour (with respect, appropriately) ordered that the particulars be provided and adjourned the disclosure motion to abide the provision of those particulars.

7. On 7 December 2018, Mr James provided detailed particulars (in the nature of a pleading) of the alleged misrepresentations by silence.

8. The disclosure motion then came before the primary judge (Ball J) on 7 February 2019. On 12 February 2019, his Honour published his judgment refusing the application.

9. The disclosure motion proceeded on the common assumption that the motion concerning the consent judgment was governed by Practice Note SC Eq 11, which denies any entitlement to disclosure in proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings.

10. The only category of documents sought that remains in contest is documents disclosing ANZ’s state of awareness between April 2013 and May 2014 as to the assets of the two companies and the realisation and likely future realisation of those assets during that period.

11. The primary judge rejected the application on the basis that ANZ had conceded its awareness of the realisations to date and the likelihood of a significant shortfall. His Honour noted that the substantive motion (to have the consent judgement set aside) was resisted by ANZ not on the basis that it did not have the information it allegedly ought to have disclosed but on other grounds. In those circumstances, the primary judge was not satisfied that the documents sought were relevant, let alone necessary to a resolution of the issues that would be in dispute on the substantive motion.

12. The draft notice of appeal was framed in terms that accepted ANZ had made the concession in question but argued that it did not follow, from that concession, that the documents sought were not necessary for the resolution of the real issues in dispute. The submissions in support of the summons for leave argued that Mr James ought not to be restricted to having to rely on that concession and that he was entitled to test the extent of the bank’s knowledge.

13. However, at the hearing of the application for leave to appeal, the argument was developed in terms suggesting that ANZ had made no such concession and that the primary judge was wrong to find that it had. ANZ responded to the modified case by indicating that its knowledge alleged in the particulars provided in December 2018 was not in issue and that it would consent to an order requiring it to provide a response in the nature of a pleading to that document in accordance with those indications. Those developments put beyond doubt that the decision of the primary judge did not entail error and that the proposed appeal raised no issue of principle or injustice such as to warrant a grant of leave.

14. For those reasons, I joined in the making of the following orders at the conclusion of the hearing:

1. By consent, within 14 days, the respondent is to provide a response in the nature of a pleading to the “particulars of representation by silence” by ANZ document dated 7 December 2018.

2. The summons seeking leave to appeal filed 12 March 2019 is dismissed.

3. The applicant is to pay the respondent’s costs.

15. SACKVILLE AJA: I agree with McCallum JA.

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Endnotes

Decision last updated: 16 April 2019