Kwa v Bank of Western Australia Ltd

[2003] WASCA 227

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE FULL COURT (WA)

CITATION:   KWA -v- BANK OF WESTERN AUSTRALIA LTD [2003] WASCA 227

CORAM:   MALCOLM CJ

MCKECHNIE J

HEARD:   19 AUGUST 2003

DELIVERED          :   19 AUGUST 2003

PUBLISHED           :  25 SEPTEMBER 2003

FILE NO/S:   FUL 72 of 2003

BETWEEN:   FRANCIS TAK LAU KWA

Applicant (Defendant)

AND

BANK OF WESTERN AUSTRALIA LTD
Respondent

Catchwords:

Application for leave to appeal - No new principles - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Applicant (Defendant)     :     In person

Respondent:     Mr D P Nolan

Solicitors:

Applicant (Defendant)     :     In person

Respondent:     BankWest Legal

Case(s) referred to in judgment(s):

Bank of Western Australia Ltd v Kwa [2003] WASC 110

Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311

Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161

Kwa v Bank of Western Australia [2003] WASCA 163

National Australia Bank Ltd v Baker [2003] WASC 6

Case(s) also cited:

Nil

1. MALCOLM CJ:  By a notice of motion dated 2 August 2003 and filed on 4 August 2003, the applicant, who appeared in person, applied for orders that:

   "(1)The decision of Master Newes [sic Newnes] of 29 April 2003 be set aside.

   (2)The appellant [be] given leave to defend action number CIV 2132 of 2002.

   (3)There be a judgment that the appellant entered into the mortgage in his own personal capacity only for house number 24 – 28 Wheatcroft St, Scarborough and that the respondent gives the appellant repossession of the said land."

2. Certain other consequential orders were also sought.  The grounds upon which these orders were sought were that the learned Master erred in law in that he:

   "(1)Failed to give reasons for decision at [the] time of the hearing or alternatively

   (2)Denied the appellant of his right to natural justice for a fair trial.

   (3)Found against the weight of evidence that was presented before him that

   (a)the appellant entered into the mortgage as trustee of the FTL Kwa Trust;

   (b)the respondent's own unconscionable conduct did not effect [sic affect] the appellant's ability to pay off his debt.

   (4)Found contrary to that which was obvious from the face of the evidence presented that the mortgage document that was signed after a trust declaration was signed as trustee when the said trust declaration clearly referred only to previous signed documents.

   (5)Allowed indemnity costs."

3. The applicant had previously applied to the Full Court constituted by Murray ACJ and Steytler J for a stay of execution of the order the subject of the applicant's motion pending the determination of the appeal from that order which had been instituted on 19 May 2003.

4. The matter before the Master was an application for summary judgment by the respondent in respect of a writ claiming possession of certain land in Scarborough.  The Bank's claim was as mortgagee.  The applicant had given a mortgage over the land in question, of which he was the registered proprietor in part in his own name and in respect of the balance of the land as a trustee.  There was no issue that the mortgage was granted, although the point which the applicant took before their Honours on 21 July 2003 was that he did not, as he had been asked by the respondent to do, mortgage the land as trustee and, consequently, the mortgage had effect only to the extent that it affected land owned by him personally.

5. There was no dispute before their Honours that the respondent had advanced funds in the order of $1.35 million; that the applicant had defaulted in making the repayments required by the loan agreement; and that the money remained outstanding, together with accrued interest.  As to that, the applicant suggested in the previous proceedings that the respondent bank acted unfairly in foreclosing on the mortgage and taking possession of the properties because, if left in possession, he could have continued to run his business by refinancing the mortgaged debt or, alternatively, he could sell the properties and repay the loan.  In that context, Murray ACJ and Steytler J said:

   " … It can be no answer to the bank's pursuit of its remedies under its security that it might recover the funds advanced and the interest owing by another means which might provide a more favourable outcome to the appellant."

6. Before the Master the applicant had argued that he ought to be given leave to defend the claim on the basis that he did not execute the mortgage as trustee, but in his personal capacity.  The Master found against him on that question as a matter of fact.  The Master also found that there was no merit in a claimed set‑off.  There were other issues raised which were the subject of comment that the applicant had negligible prospects of success in his appeal.

7. It was noted that since the Master's judgment and since the appeal was commenced, there had been two previous applications of the kind brought before the Full Court for a stay of execution.  Both had been unsuccessful.  The first was to the Master on 16 June 2003 and the second was heard by Barker J on 11 July 2003.  When the matter was before the Full Court on 21 July 2003, the respondent had obtained possession of the land on 14 July 2003 and was in the process of pursuing procedures appropriate to the sale of the mortgaged land.  Their Honours took the view that, generally speaking, neither an injunction nor a stay of execution will be granted in a case where the debt leading to the judgment for possession is not of itself sought to be impeached, which was the situation in this case, so as to restrain the exercise by a mortgagee of its rights under the mortgage instrument, unless there is paid into Court or otherwise secured to the mortgagee the amount of the mortgage debt, including accrued interest:  Inglis v Commonwealth Trading Bank of Australia(1972) 126 CLR 161; Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311.

8. That general rule will apply equally where a stay is sought pending an appeal:  National Australia Bank Ltd v Baker [2003] WASC 6 per Pullin J at [14]. Their Honours went on to say in [11] – [12] that:

   "11.In the circumstances of this case, apart from the incapacity to demonstrate any likelihood of success on appeal, it seems to us that there being no dispute about the calculation of the mortgaged debt and the judgment of the Master not being impeached in that sense, if, pending the appeal, the Bank was to be impeded in its capacity to exercise its rights under its security it ought to be on the condition that the debt owed to it was otherwise secured by payment into court or in some other manner.  The general rule should be applied in this case and, as security has not been given and there has not been an unequivocal undertaking that it can be provided, that is an additional powerful reason why a stay should be refused.

   12.There is a further difficulty in this case in that the Bank has executed its judgment for possession and is now in the process of pursuing its power of sale.  What is sought therefore is not purely a stay of execution, but, as reflected in a minute of proposed orders tendered by the appellant on arguing his application, he seeks orders that he be placed again into possession of his properties, together with orders that he be compensated for any loss or damage caused to the properties and the business

conducted upon those properties.  There is no need to consider whether in any circumstances the Court may have an inherent jurisdiction to make all or any of such orders.  It is sufficient that there were no grounds advanced upon which the exceptional course of the making of an order staying execution of the judgment should be taken and, for those reasons, we dismiss the application."

1. At the time of the hearing of this application, the applicant had not served the respondent with an appeal book index or taken steps to prepare appeal books.  This is a case in which, on the previous application, this Court concluded that the subject appeal had negligible prospects of success.

2. A substantial bundle of affidavit material was put before the Court by the applicant.  In my opinion, much of the material sought to be relied upon is inadmissible.  Insofar as it is admissible, none of it casts any doubt on the correctness of the original decision that the applicant had no arguable defence to this action.  Neither do they provide any fresh reasons to justify a grant of leave to appeal.  It was for these reasons that I joined in making the order that the application for leave to appeal should be dismissed.

3. MCKECHNIE J:  On 19 August 2003 the Court unanimously dismissed the application for leave to appeal and indicated that it would publish reasons later.  These are my short reasons for joining in that decision.

4. The background of the matter is set out in the judgment from which leave to appeal is sought: Bank of Western Australia Ltd v Kwa [2003] WASC 110. Master Newnes granted the application by the Bank for summary judgment against Mr Kwa in an action claiming possession of land pursuant to a mortgage. It was not in issue that the Bank had advanced funds in the sum of $1,352,315.46 to the defendant and that the defendant had defaulted under the agreement and the mortgage and that the money remained outstanding.

5. At the hearing before Master Newnes, Mr Kwa raised three matters of significance.  The first was that he did not execute the mortgage as trustee of the trust but in his personal capacity.  The Master reached a contrary view, having regard to all the documents, including the trust deed, declaration and the mortgage.  In my opinion it was open for him to reach that conclusion.

1. Next, Mr Kwa raised a defence by way of set‑off on the basis of, what he described as, the Bank's unlawful disclosure of his financial affairs to another person.  On the material the Master was not satisfied that there was any arguable defence of set‑off.  I agree.

2. The third basis for resistance to the application was on the grounds of unconscionability due to the claimed high rate of interest in the agreement and the fact that Mr Kwa was unable to service the mortgage because of events outside his control, including matters related to his health.  The Master considered neither of those raised an arguable defence and again, having examined the material, I agree.

3. Following judgment, Mr Kwa sought a stay of execution pending the appeal.  Eventually this matter came before the Full Court and is reported as Kwa v Bank of Western Australia [2003] WASCA 163. The Court considered the prospects of success of the appeal in the context of deciding whether it should order a stay of execution. The Court came to the view that there were negligible prospects of success.

4. Mr Kwa sought to put a series of affidavits of himself and others before the Court for its consideration.  It may be doubted that any of that material is admissible.  Nevertheless, I have read them and taken account of them.  None of that material has caused me to question the correctness of the original decision to the effect that Mr Kwa had no arguable defence to the action, nor does that material provide any new reason to justify a grant of leave. 

5. It is for these reasons that I concluded the application for leave should be dismissed.