Krys Properties Pty Ltd v State Bank of New South Wales
[1998] FCA 842
•30 JUNE 1998
| IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG 721 of 1997 |
BETWEEN: | KRYS PROPERTIES PTY LTD | |
AND: | MICHAEL VINCENT BOURKE L & M HOLDINGS PTY LIMITED LRA RESTAURANTS PTY LTD HUNTER DEVELOPMENT COMPANY PTY LIMITED now HUNTER LAND RESOURCES PTY LIMITED EMAS PTY LIMITED BONOTO PTY LIMITED AVITO PTY LIMITED TERENCE MARCELLIN BOURKE STATE BANK OF NEW SOUTH WALES | |
JUDGES: | SPENDER, MOORE AND TAMBERLIN JJ | |
DATE OF ORDER: | 30 JUNE 1998 | |
WHERE MADE: | SYDNEY | |
THE COURT ORDERS THAT:
The appeal is dismissed with costs.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
| IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG 721 of 1997 |
BETWEEN: | KRYS PROPERTIES PTY LTD |
AND: | MICHAEL VINCENT BOURKE L & M HOLDINGS PTY LIMITED LRA RESTAURANTS PTY LTD HUNTER DEVELOPMENT COMPANY PTY LIMITED now HUNTER LAND RESOURCES PTY LIMITED EMAS PTY LIMITED BONOTO PTY LIMITED AVITO PTY LIMITED TERENCE MARCELLIN BOURKE STATE BANK OF NEW SOUTH WALES |
JUDGES: | SPENDER, MOORE AND TAMBERLIN JJ |
DATE: | 30 JUNE 1998 |
PLACE: | SYDNEY |
REASONS FOR JUDGMENT
The Court has reached a clear view as to the disposition of the appeal and I will give my reasons briefly.
On 18 August 1997 Lindgren J made orders that there be judgment for the State Bank of New South Wales (‘the State Bank’) against Krys Properties Pty Limited (‘Krys Properties’) of $3,851,872.50; that there be judgment for the State Bank for possession of the land the subject of folio identifier 1/738913, having a street address of 36 Freechurch Street, Maitland NSW; the State Bank have leave to issue a writ of possession to enforce that last order; the respondents pay the applicant's costs of the application; the cross-claims be dismissed and the cross-claimants pay the cross-respondent's costs of the cross-claims.
The judgment arose out of the following circumstances. Krys Properties Pty Limited is the registered proprietor of property at 36 Freechurch Street in Maitland. That land was converted from old system to Torrens title in late 1986. On 30 June 1986 Krys Properties executed an old system mortgage in favour of the State Bank to secure the debts of a company, L & M Holdings Pty Limited, to the State Bank. The mortgage incorporated the provisions of registered memorandum S709315.
The obligations of L & M Holdings secured by the mortgage were those set out in a facility agreement dated 30 June 1986. Pursuant to that agreement, the first interest payment was due six months after the funds advanced pursuant to the facility, that is to say, the first interest payment was due on 31 December 1986, or at least by 8 January 1987. The first interest payment was not paid, and that event was an event of default under the facility agreement. By clause 3A(ii) of the mortgage, Krys Properties agreed that it would pay to the State Bank the moneys secured upon demand. A notice to Krys Properties dated 10 March 1987, demanded payment of $5,902,138,52 within one month. That notice was served by certified mail on or about 19 March 1987.
At the date of trial, the trial judge found that the amount owing by L & M Holdings and secured by the mortgage was $3,851,872.50. In his Honour's reasons for judgment, he concluded in respect of the bank's claim:
“In the result, subject to any question arising on the amended cross-claim, I conclude that the Bank has established its right to judgment against Krys for $3,851,872.50 as sought, the judgment for possession and leave to issue a writ of possession, and an order that Krys pay the Bank's costs of the application.”
The amended cross-claim referred to by his Honour as being the matter to which his conclusion was subject, was a cross-claim in which the first cross-claimant was Mr Michael Vincent Bourke. The second to eighth cross-claimants were companies which were ultimately controlled by him, referred to as the Bourke Group. They included two companies of direct relevance: L & M Holdings Pty Limited, who borrowed the money from the bank, and Krys Properties, the seventh cross-claimant, who mortgaged the property to the bank as security for that loan. Of the amended cross-claim his Honour said:
“It is desirable that I attempt to convey the nature of the amended cross-claim. It bears the heading “ADDENDUM TO AND AMENDMENT OF STATEMENT OF CROSS-CLAIM PART A PART B and PART C”. It was filed on 23 April 1996 and comprises 41 pages. Part A comprises 46 paragraphs, Part B 24 paragraphs, and Part C 32 paragraphs. The document was apparently prepared by Mr Bourke without the assistance of professional legal skill. It consists of allegations of facts, many of which are in the form of purported paraphrases or quotations of passages from affidavits filed in another proceeding in the Court, NG1210 of 1988, brought by the present cross-claimants as applicants against the Bank as respondent (“the Earlier Proceeding”), and other documents, interspersed with what purport to be statements of the claimed legal consequences of those facts.”
His Honour at page 10 of his reasons noted the submission by the Bank:
“The Bank submits that a cross-claim can be brought only by a respondent, and that therefore, of the nine cross-claimants, only Krys was competent to cross-claim against the Bank. Order 5 of the Federal Court Rules provides that “a respondent” may cross-claim in the circumstances there set out. The cross-claim, in so far as it is brought by Mr Bourke, Terrence Bourke and the Bourke Group, with the exception of Krys, should be dismissed with costs as incompetent. As will appear below, I will also dismiss it for other reasons in the alternative.”
His Honour then referred to the earlier proceeding, and I adopt that part of his Honour's reasons which commences:
“All nine of the present cross-claimants were the applicants, and the present applicant was the respondent, in the Earlier Proceeding. The amended statement of claim in the Earlier Proceeding was identical to the original “cross-claim” which was filed in this proceeding on 2 September 1994, except for necessary changes of appellation of parties.
On 15 June 1994, Wilcox J made the following orders in the Earlier Proceeding:
“1.The proceedings stand dismissed, unless not later than Friday, 1 July 1994, the Applicant companies:
(a)File and serve an Amended Statement of Claim;
(b)File and serve all affidavits on which they propose to rely at the trial in respect of issues of liability;
(c)Provide security in the sum of $40,000 either by cash deposit with the Registrar or by payment into a bank account under the joint control of the solicitors for the Applicant companies and the Respondent, or in such other form as the solicitor for the Respondent may agree in writing.
2. Order that the proceedings insofar as they are brought in the name of Michael Vincent Bourke and Terrence Bourke, be dismissed forthwith.
3. Order the Applicant companies to pay the costs of the Notice of Motion filed on 15 June 1992.
4. Stand over to the Directions List on 22 July 1994.”
Order 1 was not complied with. Rather, the eight corporate applicants (the Bourke Group) moved for a variation of it. Their motion was dismissed by Davies J on 7 July 1994. There was an appeal from the orders of Wilcox J and Davies J. The appeal was dismissed with costs by a Full Court on 4 August 1995. The Full Court, exercising afresh the discretion of the trial Judge in relation to Mr Bourke’s defamation claims, summarily dismissed them. In the Reasons for Decision of the Full Court it was noted that “[all] the other causes of action [i.e. other than actions for defamation] pleaded by him [Mr Bourke] and his brother [Terrence Bourke] have vested in their trustee and are deemed to have been abandoned’ (at 12). The reference to “their trustee” is a reference to the bankruptcy of Mr Bourke and of his brother Terrence Bourke. They were discharged from bankruptcy well before the present hearing.”
His Honour then continued:
“The current form of cross-claim is found in the document entitled “ADDENDUM TO THE AMENDMENT OF STATEMENT OF CROSS CLAIM PART A PART B and PART C” filed on 23 April 1996 to which I have referred earlier. It is an expanded form of the original “cross-claim” which had been filed on 2 September 1994. In so far as it repeats the claims made by the cross-claimants as applicants in the Earlier Proceeding, and therefore in the original cross-claim filed in this proceeding on 2 September 1994, it is an attempt to circumvent the order made in the Earlier proceeding, represents an abuse of process accordingly, and should be dismissed on that ground. However, I do not find it necessary to assay the task of distinguishing between those causes of action and claims in the amended cross-claim which were asserted in the Earlier Proceeding and those which were not, in the light of the clear view which I have formed, for the reasons that appear below, that the amended cross-claim fails on the merits.”
It will thus be apparent that insofar as a number of the cross-claimants were not respondents to the application by the bank, their cross-claim was incompetent. Insofar as the cross claim covered grounds which had been the subject of the earlier proceedings, they constituted an abuse of process and were dismissed on that ground.
And thirdly, his Honour was of the view that the amended cross-claim in any event failed on the merits. The grounds of appeal from his Honour's judgment as filed tersely stated the following grounds:
“2. (a) Erred in law finding for the applicants.
(b) denied natural justice to the appellants.
(c)erred in law in entering judgement for the respondent for $3,851,872.20 against the first appellant.”
The notice of appeal as filed said:
“Further grounds shall be notified on receipt of futher [sic] transcripts and legal advice.”
The essence of Mr Bourke's submission to us today was that, if the State Bank had acted reasonably or properly, there would have been no debt, with the consequence that his Honour ought not to have made the orders that he did. That submission essentially is based on Mr Bourke's recitation of much of the factual material that was put before his Honour.
On the appeal before us Mr Bourke orally and in his extensive written submissions referred to much factual material which was, of course, before his Honour, and repeated many of the submissions which he made to the learned trial judge.
I accept that there are difficulties that Mr Bourke faced in appearing for himself before the trial judge and in presenting his case on appeal. Those difficulties may have been exacerbated by the health difficulties that he was suffering. However, nothing put by Mr Bourke before us, in my opinion, reveals any error either of fact or of law in the reasons for judgment of Lindgren J. In particular, I should make reference specifically to the complaint of Mr Bourke concerning what is said to be a failure by the bank to produce relevant documents.
A very extensive notice to produce was filed on 24 April 1997. Mr Russell, who appeared for the bank below, and before us, has said from the bar table that the bank produced every document that it had, but that the boxes of documents produced to the court were not in any order and no list of documents had been prepared. The consequence was that the retrieval of any document would have been a difficult matter, and any inquiry as to the existence of any particular document rendered difficult. It may be that these difficulties were even greater for Mr Bourke than they were for the bank.
However, nothing in the material before this court suggests that there was any error or failure by the bank to comply with its legal obligations. It has not been demonstrated that there was a failure by the bank to disclose or produce that which ought to have been disclosed or produced. In this particular, as well as generally, no error has been demonstrated in the trial before his Honour Lindgren J. In my opinion, therefore, the appeal should be dismissed with costs.
MOORE J: I respectfully agree with the reasons given by the presiding judge and for those reasons would dismiss the appeal with costs.
TAMBERLIN J: I also agree with the reasons given by his Honour the presiding judge and with the proposed order that the appeal be dismissed with costs.
SPENDER J: The order of the court is that the appeal is dismissed with costs.
| I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Court. |
Associate:
Dated: 30 June 1998
| Mr Michael Vincent Bourke appeared on behalf of the appellants | |
| Counsel for the Respondent: | Mr D J Russell |
| Solicitor for the Respondent: | Mallesons Stephen Jaques |
| Date of Hearing: | 30 June 1998 |
| Date of Judgment: | 30 June 1998 |
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