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Kermani v Westpac Banking Corporation

Kermani v Westpac Banking Corporation

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2010 0172

HOMAI KERMANI	Appellant
	v
WESTPAC BANKING CORPORATION	Respondent

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JUDGES	NEAVE and HARPER JJA and ROBSON AJA
WHERE HELD	MELBOURNE
DATE OF HEARING	23 September 2011
DATE OF JUDGMENT	9 March 2012
MEDIUM NEUTRAL CITATION	[2012] VSCA 42
JUDGMENT APPEALED FROM	Homai Kermani v Westpac Banking Corporation [2010] VSC 556 (Davies J)

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PRACTICE AND PROCEDURE – Appeal by a plaintiff against order staying proceedings against defendant bank as an abuse of process – The defendant bank had previously taken proceedings against the plaintiff’s company (but not the plaintiff) seeking legal costs under a guarantee – Plaintiff’s company argued illegality or breach of public policy by the defendant bank – Whether plaintiff’s proceedings raised the same or similar issues to those dealt with in earlier proceedings – Whether plaintiff’s proceedings an abuse of process – Plaintiff seeking to re-litigate claims and collaterally attack judgment - Appeal dismissed – Rule 23.01(1)(c) Supreme Court (General Civil Procedure) Rules 2005

PRACTICE AND PROCEDURE – whether order permanently staying a proceeding is a final order for the purpose of a leave application.

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Appearances:	Counsel	Solicitors
The appellant	Mr R Merkel QC with Ms C M Harris	Comlaw
The respondent	Mr C M Scerri QC with Ms P Neskovcin	Allens Arthur Robinson

NEAVE JA:

I have had the advantage of reading Robson AJA's draft reasons for judgment and agree with his Honour, for the reasons he gives, that the appeal should be dismissed.

HARPER JA:

I also agree with Robson AJA.

ROBSON AJA:

Introduction and summary

The appellant, Dr Homai Kermani, appeals, and if necessary seeks leave to appeal, against orders made in the trial division of this Court that proceedings brought by Dr Kermani against the respondent, Westpac, be permanently stayed and that Dr Kermani pay the costs of the proceedings.[1]
[1]Kermani v Westpac [2010] VSC 556.

Several proceedings have been undertaken in this Court between Westpac (or its predecessor the St George Bank (‘SGB’))[2] and Dr Kermani, her husband Mr Boman Irani, and companies controlled by them. The proceedings all arise out of two loans that were made by SGB to Pinnacle Investments Pty Ltd (‘Pinnacle’), a company controlled by Dr Kermani and Mr Irani. The first loan for $3.575 million was made in June 2000. To secure that loan, guarantees and securities were obtained from Dr Kermani, Mr Irani and their companies. In 2001, SGB made a further loan to Pinnacle. Dr Kermani’s guarantee also secured that loan. In 2002, Pinnacle defaulted on its loans from SGB.
[2]For ease of reference I will refer to Westpac and St George Bank as SGB.

As a result of the default, certain properties of the guarantors were sold by SGB. Litigation ensued. I give further details of that litigation below. For present

purposes it is sufficient to say that the guarantors lost and SGB won. SGB obtained orders that their costs be paid on a party and party basis. Under SGB’s…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] VSCA 42
Decision Date: 9 March 2012

CaseChat Overview and Summary

Kermani, the plaintiff, appealed against the decision of the Supreme Court to stay the proceedings against Westpac Banking Corporation, the defendant, on the basis that the proceedings constituted an abuse of process. The plaintiff's company had previously been involved in litigation with the defendant bank, where the bank sought legal costs under a guarantee. The company argued that the bank's actions were illegal or in breach of public policy. The plaintiff's current proceedings raised issues similar to those dealt with in the earlier litigation. The central legal issues in this case were whether the plaintiff's proceedings constituted an abuse of process, and whether the order permanently staying the proceeding was a final order for the purpose of a leave application.

The court considered whether the plaintiff's proceedings raised the same or similar issues to those dealt with in the earlier litigation. It was determined that the plaintiff's proceedings did not constitute an abuse of process, as they did not seek to re-litigate the same claims or collaterally attack the judgment. The court held that the plaintiff's company had not raised the illegality or public policy arguments in the earlier proceedings, and that these arguments were not res judicata. The court also found that the order permanently staying the proceeding was a final order for the purpose of a leave application, as it effectively brought the litigation to a conclusion. Consequently, the appeal was dismissed, and the order staying the proceedings was upheld.

This case highlights the importance of considering whether a plaintiff's new proceedings raise the same or similar issues to those dealt with in earlier litigation, and whether they constitute an abuse of process. It also demonstrates the significance of determining whether an order is a final order for the purpose of a leave application, as it may impact the ability to appeal the decision. In this case, the court found that the plaintiff's proceedings did not amount to an abuse of process, and that the order staying the proceeding was a final order for the purpose of a leave application, resulting in the dismissal of the appeal.

Orders