Knight v Bell
[2000] VSCA 48
•7 April 2000
SUPREME COURT OF VICTORIA
COURT OF APPEAL Not Restricted
No. 451 of 1998
| ALAN ROBERT KNIGHT |
| Appellant |
| v |
| RANDALL JOHN BELL and PETER CLIFFORD FALCONER |
| Respondents |
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JUDGES: | ORMISTON, PHILLIPS and BATT, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 10 February 2000 | |
DATE OF JUDGMENT: | 7 April 2000 | |
MEDIUM NEUTRAL CITATION: | [2000] VSCA 48 | |
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PROCEDURE – Application for summary judgment pursuant to r.23.01 and r.23.03 – Judgment pursuant to r.23.03 on ground that statement of claim “does not disclose a cause of action” – Whether judgment appropriate – Additional claim in respect of chattels and livestock – Stay of whole proceeding without prejudice to bringing proceeding for latter claim in Magistrates’ Court – Whether order properly made that plaintiff not file further applications in court relating to subject transactions.
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APPEARANCES: | Counsel | Solicitors |
For the Appellant | In person | |
| For the Respondents | Mr J. Elliott | Landers & Rogers |
ORMISTON, J. A.:
In this appeal I have had the benefit of reading the judgment of Phillips, J.A. in draft form. It sets out fully the facts and circumstances which have led to the appeal to this Court. With some reluctance, for reasons appearing below, I would join with him in his conclusions as to the disposition of this appeal. In substance I agree that the proper conclusion in this case was to treat the appellant's primary claim as unsustainable and therefore one where it was appropriate to make an order summarily for the respondents as defendants terminating that claim. I also agree that the second effective claim relating to the misapplication of chattels and livestock ought not, on the present materials, to be summarily dismissed, but that in its present form it should be stayed, without prejudice to the appellant bringing a fresh proceeding on that claim in the Magistrates’ Court. Likewise I agree that the order precluding the appellant from filing "any further applications … relating to the transactions to which this proceeding related", except with leave, ought not to have been made.
If it were not for certain matters which arose in the course of the hearing of this appeal, as well as the necessity to bring the respondents' application to some kind of finality, I regret to say that I would have concluded that the learned judge's reasons for judgment were so unsatisfactory as to require the application to be heard again. One may sympathise with the judge that an application estimated to take one and a half hours extended, with relatively little judicial intervention, for the whole of the sitting day in circumstances where it was made clear to the parties that it was not possible to continue the argument for at least three weeks, unless it was disposed of that afternoon. It was not, however, strictly an urgent matter inasmuch as it was a claim for damages commenced earlier that year, so that I find it hard to see why it was necessary to deliver a one-and-a-half page off-the-cuff judgment unless it had been expressed in terms which made clear the reasoning behind the orders made or precisely which of counsel’s arguments was being adopted. Unfortunately, even in its revised form, it did not achieve that end. In particular it did not make clear why summary judgment was given in favour of the respondents under r.23.03, where the stated basis for the decision was that the amended statement of claim did “not disclose a cause of action”. It also failed to make clear the basis for making the order preventing the appellant from filing further "applications", and whether that word was intended to comprehend any application in the proceeding or any further proceeding in the Court. One may accept that the appellant was a litigant in person, that he was said to be attempting to relitigate in one way or another that which had already been resolved against him and that his submissions were put in a repetitive, confusing and irritating way, but that does not mean that appropriate reasons should not be given, especially where counsel for the applicant-defendants had needed more than half a day to explain what in fact the defects were and more especially when the decision was intended to bring the appellant's action to an end.
In the ordinary course of events the judgment should have been set aside for want of sufficient or clear reasoning, and remitted for reconsideration, so that, if the same result followed, this Court might on appeal have the benefit of sufficient reasoning to enable it to give proper consideration to the merits of the appeal. Although I was first inclined to such a course, I have reluctantly agreed that this Court should now determine the merits. More often than not it is not practical to examine the whole of the material which has been before a judge at first instance and it would be counter-productive if appeal courts were required on every occasion to do so. As it happened those members of the Court hearing this appeal had had the opportunity of reading the whole of the 300 or 400 pages of the Appeal Book including the submissions, and thus we have felt able to reach final conclusions as to the proper outcome of the respondents' application. Whether our reasons coincide with those of the trial judge may be doubted, but at least our conclusions will avert the necessity of sending this "interlocutory" matter back yet again for hearing in the Trial Division with the possibility of yet another appeal. It will also, as I perceive it, bring some finality to that part of the claim which in the end I believe to be frivolous and vexatious (in the legal sense), although I would not necessarily characterise the appellant's behaviour in that way, for, with his limited understanding of the law, it is possible that he believed that his primary claim could properly be litigated.
I should emphasise that my view as to the proper disposal of the application and the termination of the appellant's primary claim flows not from any asserted application of the rules of issue estoppel but from the appellant's inability to satisfy this Court that he has a viable and arguable claim which he can now pursue, in the light of the fact that the respondents have properly recovered possession of the mortgaged lands from him. In applications such as the present, where litigants in person spray diffuse allegations with little regard to legal principle, it is, more often than not, not merely impractical but unfair to dispose finally of such a plaintiff's proceeding merely on the basis that a cause of action was not disclosed: cf. Wentworth v. Rogers (No. 5)[1] and Re Morton; ex parte Mitchell Products Pty. Ltd.[2]. This is the more so where the statement of claim which the Court has dealt with is only the first or second such statement of claim, as in the present case. Here the appellant realised that his original statement of claim would be insufficient and thus attempted to produce a different claim in the amended statement of claim which he delivered shortly before the judge at first instance came to hear the matter. The Court is familiar with many more sophisticated claims pleaded by competent lawyers which nevertheless are amended three or four or even half a dozen times without its being suggested that there is no cause of action, although there is a point of time at which inability to identify a cause of action accurately may well demonstrate that there is no such cause of action: cf. Trau v. The University of Sydney[3].
[1](1986) 6 N.S.W.L.R. 534 at 536
[2](1996) 21 A.C.S.R. 497
[3](1989) 34 I.R. 466 at 475 per Gleeson, C.J.
The essential facts appear in the judgment of Phillips, J.A. However, the argument both below and on this appeal concentrated not so much on the statement of claim appearing in the first paragraph of his judgment as on the amended statement of claim which extended for some 35 paragraphs and in which only paragraphs 1, 6 and 10 remained substantially in the form appearing in the original document. It should be noted that, among a large number of seemingly irrelevant but at best merely evidentiary allegations, the following would appear to form the basis of the appellant’s principal claim, in addition to the effective repetition of the former paragraph 1:
“6.In April 1995 Anbac Financial Services Pty. Ltd. (Anbac), approached the defendants on behalf of the plaintiff, seeking a loan of $130,000 to assist with the purchase of a rural property at Maude and provide funds to complete reconstruction of two units and renovate two existing dwellings at 257-259 Yarra Street and 31 Balliang Street, Geelong …
7.In May 1995, the defendants sent a letter [the 5 May 1995 letter] to the plaintiff, via Anbac, offering the plaintiff $130,000 or 66.67% of valuation.
…
16.A loan was given in August 1995 for $140,000 in return for a mortgage over the first land in favour of the defendants.
…
20.[In March 1996] the defendants instructed the valuer to update the valuations using the two-thirds lending ratio.
21.A variation of mortgage was signed in April 1996 increasing the mortgage by $30,000.
…
23.The plaintiff continued to rely on the defendants’ lending ratio of 66.67% to complete his projects, but was only drawing down the money as he needed it to save on costs.
…
24.Anbac, on behalf of the plaintiff approached the defendants on 8 January 1997 seeking a further advance of $30,000.
…
27.The defendants sent a letter to the valuer on 7 February 1997 asking for a further valuation but this time to be set at a maximum lending ratio of 50%of valuation.
…
31.The failure of the defendants to keep the lending ratio at 66.67% and not advance any more money has caused the plaintiff to default on the mortgages on the second land. Those mortgagees have sold the Geelong properties.
…
35.By reason of the matters aforesaid the plaintiff has suffered loss and damage.”
The only substantive remedy now sought is damages, the claim for possession now being abandoned.
This would have been a case where I would not have terminated the principal claim permanently but for a clear and repeated concession made by the appellant in argument. At all times the appellant insisted that his real complaint was that the respondents had failed to lend what they personally had agreed with him to lend on the security of his properties, which he alleged was an amount up to two-thirds of the value of those properties. Other than the claim with respect to the chattels and livestock, he conceded that his claim depended on proving a contract in the terms suggested. It seems that relatively little communication had taken place between him and the respondents, most of the negotiations taking place through his broker. The only letter or other communication which seemed to be the basis for the appellant's claim was the letter to him from the respondents dated 5 May 1995. The proffered terms included a reference to the loan amount as being "$130,000 or 66.67% of valuation, whichever is the lesser amount". That appears twice in the letter, although it also appears once without the qualification but in circumstances which made the qualification quite obviously that which the respondents intended. That letter was explicitly relied upon in the amended statement of claim but in terms which deleted the expression "whichever is the lesser amount". When asked on several occasions whether his claim was founded on any other letter, correspondence or conversation, the appellant reiterated that it depended on what was said in that letter of 5 May and that he could point to no other communication which would support his allegation. There was some attempt to allege an estoppel based on a supposed mutual understanding but in the end even that was said to derive from the letter in question. The misunderstanding or misstatement of that term seems the fundamental weakness in the appellant's case. If it is the sole basis for his case then it must fail. He did not suggest to the Court that there was any other basis, so that it would be pointless to give him the opportunity to replead his case. Nothing in his submissions or voluminous supporting material would have supported an amended pleading and his oral submissions did not suggest that there was anything further upon which he might rely.
In these very special circumstances I am content to agree that the matter should be disposed upon the basis that the principal claim in the amended statement of claim should be stayed under r.23.01, nor could any substituted or amended statement of claim make the appellant's case any better, whatever form his claim takes. It is in effect frivolous and vexatious or an abuse of process as it cannot be sustained. It would thus be a relief to all parties to bring it to an end, but it will also save the appellant incurring unnecessary costs and liabilities upon a false and hopeless expectation.
If I were to differ in any way from the reasons of Phillips, J.A. it would be that I have little doubt that the basis upon which counsel who argued the matter below put the case to the learned judge was that the matter had already been resolved by the decision of the Court of Appeal on 20 February 1998 when it refused three applications brought by the appellant in the earlier proceeding in which the respondents obtained possession. Of those only one was relevant, namely the application for leave to appeal out of time against the summary judgment for possession. There it was again argued that there was an agreement between the respondents and the appellant that the respondents had bound themselves to advance up to two-thirds of the sworn valuation of the mortgaged land. The Court on that occasion looked at a number of documents relied upon by the appellant, of which there now seems no precise record, and, in concurring with what Tadgell, J.A. said on that occasion, I said that I had done my best, having read the papers put before the Court, to see whether the appellant had proper grounds to appeal. That application was refused but it cannot be treated in those circumstances as creating any issue estoppel between the parties upon which the respondents were entitled to rely before the trial judge on this occasion or on this appeal. If there were here any issue estoppel it would have occurred by reason of the findings of the judge on the application for possession, but there were no reasons given and in fact, so far as can be ascertained, there was not even an affidavit filed by the appellant seeking to set out his supposed claims. It seems that that application was resolved upon consideration solely of the then plaintiffs' materials and an amended defence which the appellant had then put in. That provides little basis for suggesting that an issue estoppel arose in relation to a contract for the lending of money, the only issue then in question being whether the respondents had a right to possession under their mortgage. Moreover, although this Court expressed views as to the whether there was some such agreement as that which the appellant now relies upon, what was then said depended entirely upon the materials supporting the application. Notoriously such materials do not contain all the evidence upon which the fact findings were made in the court below, so that ordinarily in consequence of an interlocutory application to this Court it would be very difficult to reach conclusions or findings which could thereafter amount to an issue estoppel. That is my view in the present case, but I should make it entirely clear that, merely because it is a leave application, that does not mean that in certain, probably very limited, circumstances there cannot be an issue estoppel created or, perhaps, reinforced by virtue of the refusal of an application for leave. That, however, would arise only where the factual materials were comprehensive and there could be no doubt that the Court had been acting in reliance upon all relevant evidentiary materials. It is, however, not necessary to go further into an examination of the circumstances in which findings on appeal, or on applications for leave to appeal, can create an issue estoppel.
As I have said, I am inclined to the view that the learned judge, in the reasoning largely set out in the judgment of Phillips, J.A., was expressing the conclusion that the appellant's amended statement of claim did not disclose a cause of action (in respect to the primary claim) because the earlier judgment of this Court in February 1998 had found that there was no agreement on the part of the respondents to lend up to 66.67% of valuation. I am confirmed in this view by a consideration of the affidavit filed on behalf of the respondents in support of the application to strike out, admittedly at a time when the appellant was seeking in his un-amended statement of claim only possession and damages for wrongful possession. Nevertheless, that affidavit clearly asserted that this action should not be allowed to continue "given the outcome of the related proceeding" which had been already referred to in some detail, although there were additional assertions (otherwise unsupported) that it did not disclose a cause of action and was vexatious and an abuse of process. Counsel before the judge below did not dispel this view, although seeking in the alternative summary judgment pursuant to r.23.03. To my way of thinking counsel's detailed analysis of both the original and the amended statement of claim was merely intended to show that there was no cause of action pleaded in either document (relating to the primary claim) unless it were that which depended on the alleged agreement to lend up to two-thirds of valuation. It was implicit in his contentions that, insofar as that claim could be elucidated from much which was irrelevant, it was already the subject of a binding judgment of this Court. As he contended, that matter had been "thoroughly ventilated before the Court of Appeal and found not to have any substance". Moreover, although it is often dangerous to refer to what a judge may say in the course of argument, that view of counsel's argument appeared to be the impression which the learned judge gained from hearing it, for, after listening patiently to the appellant's ill-organised and repetitive arguments, the judge said, "That's the matter that the Court of Appeal found … so I mean that's over and done with." On the following page that view was repeated in similar terms with the addition of the opinion "and I could find no different anyway".
It is not difficult to see why the learned judge came to a conclusion that the statement of claim, even in its amended form, was of a kind which could not be allowed to stand, for its 35 paragraphs contained much that was irrelevant and unrelated (in law) to the claims sought to be alleged. But why that should be done pursuant to r.23.03 is much harder to discern, unless it were that the judge had treated the findings of the Court of Appeal in the earlier proceeding as conclusively preventing the appellant's relitigating in this case the question whether there was an agreement to lend up to two-thirds of valuation and thus providing a complete defence. After all r.23.03 is not designed, nor was it intended, to provide a remedy based on the defective form of a plaintiff’s statement of claim. Rather it assumes that there is an identifiable claim on the record but that there is "a good defence on the merits" to that claim. The onus thus rests on the defendant to bring forward evidence which would inevitably lead to the loss of the action by the plaintiff. It is a rule strictly construed and depends upon what the defendant puts forward, unless by chance the plaintiff's own pleading or materials otherwise filed are such to justify the conclusion that the defendant has a good defence. Here, whatever may be said about the form of the pleading (which could well have justified an order under r.23.02), there was the germ of a pleading claiming damages for a failure to lend moneys as promised, certainly a plea as might otherwise have led to an order granting leave to serve a better formulated statement of claim.[4] But the answer here put forward was that the earlier judgment of the Court of Appeal on the application for leave to appeal prevented the appellant from making out such a case.
[4]Under r.23.02: cf. Turner v. Bulletin Newspapers (1974) 131 C.L.R. 69
If the learned judge reached the conclusion stated in the judgment in reliance upon the argument that there was an issue estoppel preventing the plaintiff from bringing such a claim, then the conclusion so reached was wrong. If, however, the conclusion was based on the judge's own assessment of the factual materials before the Court, then it was an extremely dangerous step to take, one fraught with potential unfairness, if the appellant's claim might have been disposed of by consideration of the pleadings and a few largely incoherent affidavits. As Phillips, J.A. has pointed out and as the authorities referred to in Williams' Civil Procedure at 23.03.1-23.03.15 make clear, the jurisdiction under r.23.03 is not to be invoked for a purpose of having a trial run on affidavit of a claim which otherwise ought to go to trial. The conclusion this Court has now reached depends essentially on the appellant conceding, at least four times, to this Court, that his primary claim, based on the alleged contract, depended solely on the terms of the letter of 5 May 1995 and his concession that no other conversation or document founded such an agreement (or might form the basis of some estoppel to like effect). No such view was expressed by the judge at first instance, indeed the reasons can be treated as no more than an acceptance in general terms of the respondents' argument. The reasoning is also defective inasmuch as it is not possible to discern which arguments were accepted, for, if the issue estoppel argument had been accepted, the conclusion would have been wrong for reasons I have stated and, if a defence on the merits were thought otherwise to have been made out, then it required some further exposition as to why the respondents had satisfied the heavy onus upon them to establish that the plaintiff's claim was hopeless. In my opinion, moreover, the respondents had not demonstrated that there was a complete defence on the merits to the whole of the appellant’s claim, and still have not done so, but the appellant’s own documentary materials and his concessions to this Court may, in other circumstances, have justified an order under r.23.03.
My inclination, however, has been to proceed to a conclusion on this application in reliance on r.23.01, not upon the basis that the statement of claim does not disclose a cause of action (for in part it does), but upon the basis that the primary claim (for the present excluding the claim in respect of the chattels and livestock) was bad in form and, howsoever it was expressed, it was frivolous and vexatious within the meaning of 23.01.(1)(b) or an abuse of process within the meaning of r.23.01(1)(c): the distinctions between these two paragraphs are now largely irrelevant. Both the original and amended statement of claim are clearly deficient and would have to be struck out. Only if the plaintiff's claims are incapable of resuscitation should an order be made pursuant to r.23.01 for the normal remedy for a defective pleading is under r.23.02.[5] In the ordinary course, where a plaintiff has not exhausted its opportunities and it is conceivable that a better formulated claim might be drafted, the Court would give leave to deliver an amended statement of claim. Such a conclusion would, however, here be inappropriate for the reasons stated, but essentially because the claim is so hopeless as to justify the making of an order in favour of the respondents on all claims other than those relating to the chattels and livestock. For the most part the pleading was deficient inasmuch as it made a series of irrelevant allegations but, insofar as the allegation related to an agreement for lending up to 66.67% of valuation, it was not so deficient in form, as a pleading, as in itself to justify judgment or a stay of proceedings. The weakness in the appellant's case arises because he has conceded that the foundation for that claim depends on a letter which cannot be construed in the way he has alleged. To that extent the claim should otherwise be treated as frivolous and vexatious or an abuse of process for it depends upon a quite unsustainable foundation. I would therefore order a stay pursuant to r.23.01 in favour of the defendants, but without prejudice to the appellant bringing a fresh proceeding in the Magistrates’ Court with respect to the claim relating to the goods and livestock.
[5]See above para.[9]
Finally I should state that the supplementary order made by the learned judge was in my view unsustainable. It could not have meant that the appellant was not to bring further applications in the present matter for that was effectively terminated, except for the taxation of costs in respect of which the appellant clearly would have been entitled to bring applications. The order must be construed as one precluding the appellant from bringing any application in the Court relating to the "transactions", whatever that might mean. Not only was the subject matter of the general stay poorly identified but, notwithstanding the irritation which perhaps was caused to the judge, this was only the third occasion in which the appellant had effectively failed and two of those failures related only to resisting the earlier claim for possession. In the present proceeding the appellant had in fact succeeded before the Court of Appeal in relation to the earlier interlocutory order but had failed before the primary judge on this occasion, an order for various reasons being now partly confirmed but not for the reasons there expressed. With such a short history it would be wrong to make an order of the kind made by the judge. In effect this was conceded by the respondents and the question of the judge's jurisdiction was not even examined then or before this Court. It was clearly an erroneous order which must be overturned.
PHILLIPS, J.A.:
This appeal arises in a proceeding commenced by the appellant as plaintiff against the respondents as defendants on 13 January 1998, when the writ was filed. The endorsement on the writ which, it was said, was to stand as a statement of claim read:-
"1.The Plaintiff is the registered proprietor of all those pieces of land being the whole of the land more particularly described in Certificates of Title:
Volume 10242 Folio 972
Volume 8448 Folio 129
Volume 10224 Folio 062 and
Volume 10247 Folio 741
and being the land situate at Maude and Sheoaks (“Land”)
2.The Defendants offered the Plaintiff money in return for a mortgage over the “Land”. (“Mortgage”)
3.The Defendants failed their duty of care to properly draw up a correct and valid “Mortgage” document.”
4.The Defendants failed their duty of care to properly draw up a correct and valid “Variation of Mortgage” document.
5.The Defendants changed their lending ratio from 66.67% of valuation to 50% of valuation.
6.The Defendants failed to notify the Plaintiff both verbally or in writing of this change.
7.As a consequence of which has caused the Plaintiff enormous loss and damage.
8.The Defendants have obtained an order of possession on the said “Land” using the incorrect “Mortgage” and “Variation of Mortgage” documents.
9.The Defendants have obtained a Writ of Possession as a result of the Court Order, which was obtained using the incorrect “Mortgage” and “Variation of Mortgage” documents.
10.As a consequence of which will cause the Plaintiff enormous loss and damage.
AND the Plaintiff claims possession of the Land and unspecified damages and such further or other relief as the Court shall deem proper."
This drew a defence from the respondents, dated 20 February 1998, in which they admitted the allegations in paragraph 1 and admitted that by instrument of mortgage dated 18 August 1995 the appellant had mortgaged the land to the respondents “in consideration of an advance of $140,000”. For the rest, they denied the allegations and claimed that the pleading was embarrassing.
On 14 April 1998 the appellant applied by summons for an injunction to restrain the respondents from selling the land the subject of the mortgage mentioned in the pleading. In an earlier contested proceeding (which I shall describe more fully in a moment) the respondents had obtained judgment for possession; a warrant had issued on 1 December 1997 and it had been executed on 18 February 1998. It is perhaps not surprising that the judge dismissed the appellant’s application for an injunction, but it is surprising that his Honour went further and dismissed the proceeding as a whole, apparently as lacking all merit, although that can scarcely have been a part of the appellant’s application. Inasmuch as the appellant was seeking possession of the land in question, perhaps there was an answer to be made in the previous judgment recovered, but even that lay outside the scope of the issues raised by the appellant’s application for an injunction to prevent sale of the land. Accordingly on 29 May 1998 (by which time the mortgagee had in fact sold the mortgaged property) the Court of Appeal allowed an appeal by the appellant by consent and set aside the orders made on 28 April (meaning, no doubt, the order dismissing the proceeding as a whole as distinct from the order dismissing the application for injunction). At the same time their Honours suggested to the respondents that they might apply formally “by summons for dismissal of the proceeding”.
Of course whether such an application was made, and in what precise form and on what basis, remained entirely a matter for the respondents and their legal advisers. By summons filed on 7 August 1998, the respondents did apply for judgment in the proceeding under Rule 23.01 “on the basis that (a) the statement of claim does not disclose a cause of action; (b) the proceeding is scandalous, frivolous or vexatious; or (c) the proceeding is an abuse of the process of the Court”. Alternatively, the respondents sought judgment under Rule 23.03 “on the basis that the statement of claim does not disclose a cause of action against the defendants”. This summons was supported by an affidavit sworn by Amanda Joy Cowley on 3 August 1998 (an affidavit to which I shall return). It should be noted, however, that at this stage the appellant’s pleading remained unamended: it still included a claim for possession of the mortgaged property.
On 18 August 1998, the respondents’ summons came on for hearing before Ashley, J. who adjourned the hearing at the request of the appellant, who appeared in person. At the same time his Honour directed the appellant to provide to the respondents any proposed amendments to his pleading and to file and serve any affidavits on which he intended to rely.
Pursuant to this direction the appellant filed and served two affidavits of his in opposition to the application, both sworn on 21 August. He also served on 20 August a document entitled “ammended (sic) STATEMENT OF CLAIM” in which he omitted the claim for possession, maintaining only his claim to damages. At the same time he elaborated somewhat on the circumstances attending upon his mortgaging of his property to the respondents and set out a little more fully the complaint which was founded in an allegation that the respondents, in lending him money on the security of a mortgage over the land, had failed “to keep the lending ratio at 66.67% and not advance any more money”. The amended pleading was not drawn by a lawyer and its meaning and purport are not beyond argument; but as I read it I think that the appellant was alleging that he relied upon the respondents to lend up to the limit of 66.67% and that in failing to do so they caused him loss and damage.
On 24 August 1998, the respondents’ summons of 7 August came on for hearing again before another judge in the Trial Division. After hearing the parties – and again the appellant represented himself – the judge granted the application, with costs. Paragraph 1 of the authenticated order was as follows: -
"Pursuant to Rule 23.03 of the Supreme Court Rules, there is judgment in the proceeding generally for the Defendants on the basis that it does not disclose the cause of action”.
As will be seen shortly from the reasons for judgment, “the cause of action” here is an obvious slip for “a cause of action”, and with that correction paragraph 1 granted relief in the terms sought in the summons, in the alternative. It is against that order inter alia that the appellant now appeals. Again the appellant has appeared in person, contending that the judge ought not to have granted the respondents’ application. According to the notice of appeal, the judge fell into error in purporting to act under Rule 23.03 and erred in giving judgment “on the basis that it [the statement of claim] does not disclose the cause of action”.
When announcing the decision on 24 August 1998, the learned judge gave brief reasons for judgment. According to a document headed “Revised Judgment” which is in the Appeal Book, the judge, after first referring to the desirability of considering all of the claims which the appellant wished to raise as disclosed in his so-called “Amended Statement of Claim” and giving leave to amend accordingly, proceeded thus:-
"Having said that, I accept the submission of [counsel for the respondents] that it [the amended statement of claim] does not disclose a cause of action. That being so, pursuant to rule 23.03, I give judgment in the proceeding generally for the defendants.”
This brings me to the first difficulty, as I see it. The respondents’ summons expressly sought relief under Rule 23.01 or 23.03 on the basis, in part at least, that the pleading disclosed no cause of action (as the judge said was the case here). But while Rule 23.01 so refers (in part), Rule 23.03 does not; it enables the Court to give judgment for a defendant against a plaintiff “if the defendant has a good defence on the merits”. There is a plain difference between an assertion on the part of the respondents that the amended Statement of Claim is insufficient as a pleading to disclose a cause of action and an assertion that the respondents have a complete answer on the merits to the claim the appellant is making. The brief reasons for judgment do not differentiate between these two and therefore suggest that there was probably some confusion between the two rules. If there was, it stemmed no doubt from the terms in which the summons was cast, a fact which, if I may say so, emphasises the importance of an applicant’s first considering under which rule it is intended to mount the application for summary disposition and then following, more faithfully than here, the wording of that rule when the summons is being drawn.
In this instance, further consideration of the reasons for judgment leads me to conclude that the judge was indeed acting under Rule 23.03 (as paragraph 1 of the authenticated order declares) and so acted (despite the failure to follow the wording of Rule 23.03) on the ground that the respondents had a complete answer to such case as the appellant was seeking to make in his amended statement of claim – and not because of mere insufficiency in pleading. Thus, the reasons for judgment continued (immediately after what I have so far quoted):-
"I would say to Mr. Knight that as the Court of Appeal found, the mortgage was for a total sum of $170,000, first $140,000 and then an additional $30,000. That was the deal that was done. As the Court of Appeal, with respect, rightly found, it was not a loan for 66 per cent of valuation, and when a request for a further loan was made, it was for the mortgagees to decide what amount they wanted to lend.”
This last is a very cryptic reference to what had occurred between these same parties in the earlier proceeding I mentioned before: proceeding No.457 of 1997. The affidavit of Ms Cowley filed in support of the respondents’ application under Order 23 in this proceeding recounted much of that previous history and I shall set it out in summary.
Proceeding No.457 of 1997 commenced with a claim by the respondents as mortgagees for possession of the mortgaged property. The writ was filed on 2 April 1997. On 20 May appellant filed a defence alleging that the mortgage was irregular and void and asserting that the respondents had acted in breach of an agreement with him to lend the 66.67 per cent of valuation. The respondents, as plaintiffs in that proceeding, then applied on summons for summary judgment, relying upon an affidavit of 30 September 1997 setting out the circumstances which, they asserted, attended the giving of the mortgage, asserting the enforceability of the mortgage and seeking to answer the matters alleged by way of defence. The Master agreed that there was no defence and on 22 October 1997 granted summary judgment for possession and costs. An appeal to a judge in the Trial Division was dismissed on 17 November and the warrant for possession issued on 1 December 1997.
A few days later, on 8 December, the appellant filed a summons seeking from the Court of Appeal leave to appeal out of time from the judge’s decision of 17 November. During December and January, the appellant also made two unsuccessful attempts in the Trial Division to obtain a stay on the execution of the warrant, in each case filing a summons in the Court of Appeal for leave to appeal from the decision whereby his application for a stay was refused. The first of these was filed on 19 December 1997, the second on 9 February 1998.
On 20 February 1998, Tadgell and Ormiston, JJ.A. heard and determined the appellant’s three outstanding applications for leave to appeal. The two later summonses, by which the appellant sought leave to appeal against the refusal of a stay of execution, were dismissed on the ground that, the warrant having been executed two days previously (on 18 February), any such appeal would now be futile. As for the first summons, that filed on 8 December 1997 by which the appellant sought leave to appeal, out of time, from the judge’s order of 17 November (dismissing his appeal from the summary judgment), the Court said that the appellant had no merits and on that ground there should be no leave to appeal. Having heard the appellant (who appeared in person) propound his defences to the claim for possession, Tadgell, J.A., who delivered the principal judgment, said that he was not persuaded that there was any irregularity attending the mortgage; that no agreement had been established to lend 66.67 per cent of valuation; that no failure had been established to provide a pay-out figure (another complaint made by the appellant); and that, contrary to the appellant’s submission, the solicitor-mortgagee (one of the two respondents) owed no duty to the appellant as his solicitor because he had not agreed or purported to act as such.
The reasons given by Tadgell J.A. on 20 February 1998 in proceeding No. 457 of 1997 provided the basis for the respondents’ case in this proceeding as set out in the affidavit of Ms. Cowley in support of the respondents’ summons of 7 August (the summons with which are now concerned). The circumstances attending the mortgaging of the appellant’s property were before the judge when the summons was heard and determined on 24 August 1998; for a copy of the affidavit (with its exhibits) filed in the first proceeding in support of the respondents' application for summary judgment for possession, was exhibit “AJC 4” to Ms Cowley’s affidavit in this proceeding. At the same time Ms Cowley deposed – argumentatively – “that all of the matters raised and dismissed in the first action are now raised in the present proceedings”. She ended her affidavit with the submission that “the existence and continuation of the present proceeding, given the outcome of the related proceeding, does not disclose a good cause of action; is vexatious; and otherwise constitutes an abuse of process.”
That submission was scarcely surprising given the judgment for possession in the earlier proceeding, the taking of possession under the warrant in February 1998 and the sale of the mortgaged property by the mortgagee, which was achieved during May 1998. After all, the affidavit was sworn on 3 August 1998, and at that time – and indeed when the summons was filed on 7 August seeking relief under Order 23 – the appellant’s pleading was unamended and contained a claim for possession to which the resolution of the earlier proceeding would presumably have provided a complete answer. But by 24 August, things had changed. The new pleading had been delivered by the appellant and leave to amend was given; in the new pleading there was no claim for possession and so attention became focused on the claim for damages, arising principally (though not exclusively as will be seen) out of the appellant’s allegations that the respondents were bound to lend up to 66.67% of valuation and had failed to do so. That claim for damages was very different from the claim for possession that had been determined in the earlier proceeding; and although the appellant’s assertions about the respondents’ failure to observe the lending ratio of 66.67% had found expression in his defence in the earlier proceeding, it is difficult to see that there was any adjudication on that issue now standing in the appellant’s way. What Tadgell, J. A. said on 20 February 1998 was said in the context of the appellant’s application for leave to appeal in relation to summary judgment against him for possession of the mortgaged property and, given that the essential elements of the claim for possession were not directly affected (it would seem) by his allegations of the respondents’ failure to lend the 66.67% of valuation, what his Honour said then about those allegations (and in a proceeding that was plainly interlocutory) might well be characterised as obiter dicta.
Be that as it may, with the change in the appellant’s pleading when he was granted leave to amend according to the statement of claim dated 20 August 1998, it became much more difficult to contend, as did Ms Cowley in her affidavit of 3 August, that all the issues raised by the appellant in this proceeding had already been determined in the earlier proceeding, adversely to the appellant. If in the reasons for judgment delivered on 24 August 1998 the judge meant that the appellant must be taken to have no merits in this present proceeding because of what had been said by Tadgell, J.A. on 20 February 1998 in the earlier proceeding, then that would have been error. But in his admirable argument Mr. Elliott, counsel for the respondents before us (but not below), submitted that the judge did not so decide and he did not seek to sustain the orders made below on any such footing, saying frankly that he saw considerable difficulty in establishing in this proceeding any estoppel against the appellant arising out of the earlier proceeding. Instead he submitted that on a fair reading of the reasons for judgment the judge had come to the conclusion, independently of anything said by the Court of Appeal in the earlier proceeding, that the appellant had no merits – albeit, as the judge noted, that that conclusion was in line the opinion previously expressed by Tadgell J.A. Mr. Elliott then set out to demonstrate that that view of the appellant’s case was amply justified. In my opinion he succeeded.
For the moment I confine attention to the appellant’s claim in relation to the supposed lending ratio of 66.67 per cent. On that aspect it seems to me plain enough that the crux is the appellant’s belief that the respondents agreed, at an early stage, to lend him 66.67 per cent of valuation. Thus, paragraph 7 of the amended pleading asserts that “in May 1995 the defendants sent a letter to the plaintiff, via Anbac [the brokers acting for the plaintiff in seeking the loan] offering the plaintiff $130,000 or 66.67 per cent of valuation”. Yet on examination the letter relied upon, which was dated 5 May 1995, offers no such thing. The letter could not be clearer: it offers a loan of $130,000 or 66.67 per cent of valuation “whichever is the lesser”. As it happened, that offer did not lead to a loan being made; it was supplanted by a subsequent offer, after further negotiation, of $140,000. Paragraph 12 of the amended statement of claim alleges that “in August 1995 the defendants sent a letter to the plaintiff, via Harwood Andrews, solicitors, offering the $140,000”. That letter too is in evidence, and on examination it is fairly described in paragraph 12: it offers $140,000, neither more nor less. In these circumstances, there is no basis in the appellant’s own case for supposing that he can establish any promise to lend 66.67 per cent of valuation per se, and that rules out of court the case he would make in damages. It is unnecessary to explore the pleading further: in my opinion the respondents had a complete answer to the case that the appellant was seeking to make.
In saying that I do not overlook that the onus was on the respondents to establish that they were entitled to summary judgment under Rule 23.03. When defendants make that application, they do not thereby cast an onus on the plaintiff to establish his case in some summary way: see and compare State Electricity Commission of Victoria v. Rabel.[6] But in this case the respondents were claiming to have a complete defence to the case that the appellant was seeking to make against them according to his amended statement of claim: and in my view that is what they established. The material available to the Court on 24 August had become quite voluminous, given the recounting of the earlier proceeding, the inclusion of the affidavit material relied upon by the respondents in that proceeding, and the comparison that was made in the affidavit of Ms Cowley between the allegations made in the earlier proceeding and the allegations made in this. It was in the course of all this that the documents relevant to the plaintiff’s case in his amended statement of claim went into evidence, and as well there were the two affidavits of the appellant himself (sworn on 21 August), in the second of which he canvassed in some detail the history of his dealings with the respondents and his complaints in regard thereto and incidentally confirmed very clearly that his case against the respondents depended upon the letter of 5 May 1995. It was by reference to the very documents upon which the appellant himself was relying to make his case that the conclusion could be reached that the respondents had a complete defence. As Ormiston, J.A. observes, it may be unusual to find that the case being made by a plaintiff in person can be seen so plainly on a defendant’s application under Order 23; but so it was here, and in all the circumstances I think that (had this been the only claim made by the appellant) the judge was right to grant relief under Rule 23.03.
[6][1998] 1 V.R 102
Certainly, there is some comfort for this conclusion in the appellant’s own address on this appeal. Because the appellant appeared in person, we listened very carefully to all he had to say in support of the case that he wished to make. Plainly he was aggrieved at what he saw to be the injustice of the mortgagees’ actions in declining to lend him any further money when he sought a further advance in January 1997 of $30,000 and in acting, instead, to call up the moneys owing and to enforce the mortgage security. He saw this as unfair because, as he put it to us, he was relying upon the respondents to lend him up to 66.67 per cent of valuation, and even though he had already borrowed $170,000, that ratio had still not been reached. As the appellant pointed out to us, it seems from the documents that the mortgagees, for whatever reason, instructed their valuers in 1997 to act upon a maximum lending ratio of 50 per cent instead of, as previously, 60 per cent or 66.67 per cent (it does not matter which). Aggrieved by this the appellant might be; the difficulty in law is that he had nothing which might have justified his relying upon the respondents to lend up to 66.67 per cent of valuation. If he did rely upon them, that seems from what he said to have been because of previous experience with other lenders rather than the direct result of anything done or said by or on behalf of the respondents. During his address, the appellant stated very plainly that, if given the chance to re-plead his case, he would still be depending upon the contents of the letter of 5 May 1995 - and it is beyond argument, in my opinion, that that letter cannot sustain the case he would make, whether couched in terms of promise, reliance, estoppel, duty of care or whatever. This was therefore no mere insufficiency in pleading; this went to the merits, establishing that the respondents had a complete answer to the case which the appellant was seeking to make in respect of the so-called lending ratio.
Thus far, I would not disturb the decision below. But that does not conclude this appeal; for there is another claim to consider. The revised reasons for judgment continued:-
“As to the claim for damages in respect of the sale of chattels which is new in this amended statement of claim, as [counsel] pointed out, it is not claimed that that [i.e., sale of the chattels] is inconsistent with the mortgage. Clause 15(3)(c)(viii) gives a power to sell, but as Mr. Knight has pointed out, it does require the mortgagee to account to the mortgagor for the proceeds of that sale, and that is a matter that I would be confident that the mortgagee will attend to with all convenient speed. There will no doubt be other matters concerned in the final accounting.”
I have not so far mentioned this claim and I turn back therefore to the amended statement of claim dated 20 August 1998 upon which the appellant relies. The claim in respect of “chattels and livestock” is expressed very briefly. Paragraph 32 reads thus:-
“The defendants have sold chattels and livestock belonging to the Plaintiff.”
I suppose to this must be linked the final paragraph of the pleading (paragraph 35) which makes a general allegation of loss and damage “by reason of the matters aforesaid”. Together, paragraphs 32 and 35 suggest a possible claim in conversion. The judge found the answer in clause 15(3)(c)(viii) of the Memorandum of Common Provisions which expressly gives power to the mortgagee to -
“… remove carry away and … sell in such manner as the Mortgagee thinks fit any chattels found upon the land [which is mortgaged] the removal carrying away … or sale of which the Mortgagee considers necessary or desirable for the sale of the land …”
So far the respondents have not filed a defence to the amended statement of claim, but this clause might in the end provide a complete defence to the appellant’s claim in respect of “chattels and livestock”. It would be necessary, however, for the respondents first to establish the conditions upon which the clause depends and that seems to have been overlooked below. There is provision, too, in clause 15(3)(c)(viii) requiring the mortgagee to account should the power I have mentioned be exercised; I do not know what the position is in that regard.
Little, if any, attention appears to have been paid below to the problems raised by the respondents’ relying upon clause 15(3)(c)(viii), perhaps because there was not then time for proper analysis. (The judge had been given an estimate of time for the application, which was grossly exceeded.) As Mr. Elliott pointed out, the notice of appeal does not make particular complaint in relation to chattels or livestock, but, the point having emerged in argument, he made no objection to our dealing with it now provided only that he might be allowed time to prepare a submission. To that end we gave time and we have since received a submission in writing from counsel and a subsequent submission from the appellant himself. In the result, despite counsel’s submission to the contrary, I have concluded that it would be premature to shut the appellant out from all argument in relation to chattels and livestock, and to that extent the appeal must be allowed and paragraph 1 of the orders below set aside in order to modify its effect. There is no need for me to canvass any further the written submissions; indeed, as the issue in respect of which they were sought is still live, it is wiser not to.
Finally, I turn to paragraph 2 of the orders made on 24 August 1998, against which also the appellant appeals. Paragraph 2 reads:-
“The Plaintiff not file any further application in this Court relating to the transactions to which this proceeding related except with leave of a Judge of the Court, save for any Notice of Appeal.”
To my mind this order was made without justification. Counsel who appeared for the respondents below – as the applicants for relief under Order 23 – asked for such an order (as was foreshadowed in Ms Cowley's affidavit) and the order was granted without argument. I say nothing about whether there was power to make that order; suffice it to say that, even if there was such power, I cannot see that there were reasons for it. The parties had already been through the earlier proceeding and a like order was made against the appellant by Beach J. on 22 January 1998 when he dismissed for the second time in two months an application by the appellant by summons for a stay of execution in respect of the warrant for possession. But the summons of 19 January 1998 copied the summons of the previous 15 December and that might well have been regarded as sufficient to prohibit any further repetition without leave of the Court. No such situation existed here. In this proceeding the appellant had first sued for possession and damages and whatever might have been the position in respect of the claim for possession (and I note in passing, without further comment, that on 28 April 1998 Beach, J. included a prohibition on suing in relation to the land among the orders later overturned by the Court of Appeal by consent on 29 May), the claim for possession was omitted from the amended statement of claim dated 20 August 1998. The claim for damages was all but novel and this was the first serious contest over it. The appellant lost the contest but that is not per se a reason for prohibiting any further applications by the appellant, whether by writ or summons (supposing that that is what the order meant) in relation to the subject matter of the suit. Such an order should be rare and made only after careful consideration. With respect, the order made on this occasion was not soundly based. On that score, too, the appeal should be allowed in order that paragraph 2 be set aside (notwithstanding once again that the appellant included no particular complaint about paragraph 2 in his grounds of appeal).
Conclusion
For the reasons I have given I think that the appeal must be allowed. In the circumstances all the orders made below on 24 August 1998 should be set aside. There was no error, I think, in the judge’s decision to bring to an end summarily the appellant’s principal claim (i.e., the claim against the respondent in relation to the so-called lending ratio of 66.67 per cent); that was fatally flawed. The respondents do have a complete answer to that claim, and it may be said to be vexatious for the appellant to be pursuing it (thus attracting Rule 23.01 in relation to that claim). The balance of the proceeding is the claim for damages in respect of chattels and livestock (if that is what the appellant intends by paragraph 32 of the present pleading when coupled with paragraph 35). That claim should not have been the subject of judgment; nor should it be stayed permanently, were it not for two other considerations.
First, the amount involved in the claim over chattels and livestock is small – too small to justify the action continuing in this court. The appellant told us from the Bar Table that, although he was not certain of the details, there were perhaps 100 sheep involved which should have fetched some $15 each; instead they had been sold, he thought for $6. Mr. Elliott told us they had been sold for $900 which suggests that there were perhaps 150 sheep involved. As for the chattels (or other chattels) their worth was said to be about $5,000 so that, whether or not due credit has been given by the respondents to the appellant for the amount realised on sale of these items, the appellant’s claim is proper for the Magistrates’ Court. I would therefore be strongly disposed to include, if necessary, among the orders we make now by way of substitution for those made below, an order under s.30 of the Courts (Case Transfer) Act 1991 for the transfer of this proceeding to the Magistrates’ Court for any further hearing and determination.
That should not, however, be necessary. The claim in respect of chattels and livestock is very poorly pleaded (assuming that I have grasped the intent at all) and the claim must be re-pleaded before the respondents can be expected to answer it. In this respect it is true that the pleading does not disclose a cause of action; it merely suggests one. The simplest course, then, as the respondents have a complete answer to the principal claim, is to order (by way of substitution for the orders made below) that the whole proceeding in this Court be forever stayed under Rule 23.01, but without prejudice to the appellant’s bringing a fresh proceeding in the Magistrates’ Court for whatever claim he seeks to make in respect of the chattels and livestock – but only the chattels and livestock. And that is the order that I would make.
There should be no order in substitution for paragraph 2 of the orders below. I would hear the parties on costs.
BATT, J.A.:
I have had the benefit of reading in draft the reasons for judgment of Phillips, J.A. I concur in them and with the orders his Honour proposes.
I would add this. If (as I think notwithstanding its use of the word “application”) the second order made on 24 August 1998, which is set out in the reasons of Phillips, J.A., on its true construction prevents the commencement by the appellant of any new proceeding relating to the transactions the subject of proceeding No.451 of 1998, then, besides being unwarranted in the circumstances, it was beyond power[7]. That would not be so if on its true construction the order is limited to applications in the existing proceeding[8]. But the order would, in my view, still be unwarranted. It is scarcely necessary to say that the order in question could not be justified under s.21 of the Supreme Court Act 1986 because it was not obtained by the Attorney-General.
[7]Commonwealth Trading Bank v. Inglis (1974) 131 C.L.R. 311, but cf. Ebert v. Venvil [1999] 3 W.L.R. 670.
[8]Commonwealth Trading Bank v. Inglis at 319 and Guss v. Magistrates’ Court of Victoria [1998] 2 V.R. 113 esp. at 122.
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