Manny v Australia and New Zealand Banking Group Ltd
[2014] ACTCA 42
•5 September 2014
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Manny v Australia and New Zealand Banking Group Ltd |
Citation: | [2014] ACTCA 42 |
Hearing Date: | 14 August 2014 |
DecisionDate: | 5 September 2014 |
Before: | Murrell CJ, Gilmour J and Robinson AJ |
Decision: | Leave to appeal is granted to the Appellant to the extent necessary. Refuse leave to adduce fresh evidence. The appeal is dismissed. The Appellant is to pay the Respondent’s costs of the appeal |
Category: | Principal judgment |
Catchwords: | APPEAL – general principles – review of concurrent findings APPEAL – general principles – review of interlocutory orders |
Legislation Cited: | National Consumer Credit Protection Act 2009 (Cth) sch 1 (National Credit Code), s 89A Consumer Credit (Australian Capital Territory) Code 1995, s 66 |
Cases Cited: | Australia and New Zealand Banking Group Ltd v Manny (No. 2) [2013] ACTSC 143 Australia and New Zealand Banking Group Ltd v Manny(No. 4) [2013] ACTSC 236 |
Parties: | Jeff Manny (Appellant) Australia and New Zealand Banking Group Ltd (Respondent) |
Representation: | Counsel Self-represented (Appellant) Mr A Casseldin (Respondent) |
| Solicitors Self-represented (Appellant) Gadens Lawyers (Respondent) | |
File Number: | ACTCA 87 of 2013 |
Decision under appeal: | Court/Tribunal: Supreme Court Before: Refshauge J Date of Decision: 2 December 2013 Case Title: Australia and New Zealand Banking Group Limited v Manny (No. 4) Citation: [2013] ACTSC 236 |
THE COURT:
Background
These proceedings are an appeal from the judgment of Refshauge J in Australia and New Zealand Banking Group Ltd v Manny(No. 4) [2013] ACTSC 236.
In that case his Honour heard an appeal from the decision of Master Mossop (Australia and New Zealand Banking Group Ltd v Manny(No. 2) [2013] ACTSC 143) who had entered summary judgment for possession of land at Flynn in favour of the Australia and New Zealand Banking Group Ltd (ANZ) (the Respondent) on that bank’s claim and had then made consequential and procedural orders for the balance of the proceedings. It will be necessary to return to those orders in greater detail below.
Some background is of assistance to understand this proceeding. Mr Manny (the Appellant) was a developer and by mid-2009 held a substantial portfolio of residential and commercial real property. He controlled this portfolio through a series of trusts and companies. These companies and trusts obtained financial accommodation from the ANZ and gave security to that bank to support the accommodation.
Mr Manny also personally borrowed from the ANZ. It is in connection with his personal borrowings that these proceedings arise although Mr Manny made many references during the hearing of the appeal to the trusts and companies. Those trusts and companies were said to provide the factual basis for Mr Manny’s counterclaim, which counterclaim it was further said provided an impediment to summary judgment for possession of the land at Flynn.
By its statement of claim filed on 27 October 2011, the ANZ sought possession of the land at Flynn and also a monetary sum said to be the amount owing on two agreements for loans. It was alleged that there had been default under two loans and that an entitlement for possession had accrued under the mortgage which was security for those loans. It is not necessary to further consider, for present purposes, the claim for a monetary sum for it is not the subject of the appeal to this court.
Mr Manny filed a defence and counterclaim against the ANZ. The document appears to have been filed without any legal assistance. In any event, its relevance to this proceeding is that it makes no admissions and leaves the ANZ to prove the whole of its case to obtain an order for possession of the property in question.
The ANZ, by amended application in the proceeding, then moved, relevantly, for summary judgment for possession and for an order that the counterclaim against it be dismissed.
It is this application that came before Master Mossop. He heard it over two days. The Master considered the contractual arrangements between the parties and found that Mr Manny had failed to make minimum payments required by those contracts in mid-2011 and Default Events, as defined by the loan documentation, had arisen so that an entitlement on behalf of the ANZ to enforce its powers under clause 7.3 of the Mortgage was engaged. That entitlement included an entitlement to take possession of the property in question.
The Master went on to consider the substantial submissions made by Mr Manny as to the legal impediments which he submitted arose, having the consequence of the ANZ being unable to enforce its right to take possession of the property. The Master found that there were no such impediments.
The Master also scrutinised the material in the counterclaim made against the ANZ to determine whether any material in that counterclaim might defeat or curtail the Respondent’s claim to possession or its execution upon the judgment for possession. At paragraph [38] he recorded that he was satisfied that the material did not do so.
The Master went on to determine the application by ANZ to dismiss the counterclaim. At paragraphs [40]-[42] he found that the counterclaim did not demonstrate a clear cause of action. He declined to dismiss the counterclaim at paragraph [43] but rather struck it out and gave a further opportunity to the Appellant to re-plead a cause of action. He gave this relief, upon terms, for the reasons set out at paragraph [44] in his judgment.
At paragraph [45] the Master found that there was a significant risk of further delay to the Respondent’s claim if that claim was not separated from the defendants counterclaim. The Master made an order under r 471 for the counterclaim to be heard separately. The Master was satisfied that the preconditions of the rule were made out.
The Master’s Orders
The orders made by that Master were, in substance, that:
(i) There be judgment for the ANZ for possession of the land at Flynn;
(ii) The counterclaim brought by Mr Manny be heard separately from the hearing of the proceedings brought by the ANZ;
(iii) The counterclaim filed by Mr Manny on 7 February 2013 be struck out;
(iv) Mr Manny not be permitted to file any additional pleading for his counterclaim without the leave of the court;
(v) Any application to file a further pleading for the counterclaim be filed and served within 28 days of the publication of these reasons and that any such application annex a copy of the proposed pleading;
(vi) If any proposed pleading for the counterclaim requires or results in the joinder of additional parties to the proceedings then any application to join those parties be heard at the same time as the application for leave to file the proposed pleading and the application for leave to file the pleading be served on any proposed new party to the proceedings; and
(vii) Mr Manny pay the ANZ’s costs of the application in proceedings dated 30 November 2012 and the amended application in proceedings dated 27 June 2013.
The Appeal to a Single Judge
Mr Manny appealed against all orders made by the Master. The appeal was heard by Refshauge J.
As a preliminary point, the ANZ claimed that the appeal was not validly constituted. It submitted that it was, in effect, an appeal against a final order made by the Master which should have gone to the Court of Appeal. Refshauge J rejected this, stating at [48]-[50]:
48. In this case, the judgment of the learned Master resolved the issue of whether the ANZ bank was entitled to possession; it did not, however, resolve the question of what, if any, debt was payable by Mr Manny to the ANZ bank. In this sense, then, it was a partial summary judgment.
49. It is, however, clear that a partial summary judgment is not a final judgment, but is an interlocutory judgement, as held in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 at 392-3; [64]-[70] (Rares J), 418-22; [174]-[191] (Gordon J). See also Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348 at 360; John Grant & Sons Ltd v Trocadero Building and Investment Co Ltd (1938) 60 CLR 1 at 35, and Wills v Australian Broadcasting Corporation (2009) 173 FCR 284 at 290; [30].
50. Accordingly, I dismissed the challenge to the competency of the appeal.
It is not necessary to pass comment upon His Honour’s reasoning as to the competency of the appeal. It is clear he entertained the proceedings as an appeal to the Court without the need for leave to be granted. The appeal was conducted on that basis.
Refshauge J commenced dealing with the appeal against the order for summary judgment at [67]. He concluded at [86] that none of the claims made by Mr Manny amounted to a viable defence to the ANZ claim for possession.
There are concurrent findings by the Master and Refshauge J on the question of default under the loans giving rise to an entitlement to possession under the Mortgage. It is not necessary to set these out in detail in the way the argument developed before the Court of Appeal.
There was no finding by Refshauge J on the appeal of matters that may take away or curtail the ANZ’s right to possession on the Mortgage.
His Honour did consider, as a matter of discretion, the grant of a stay of the order ([104]). However, that is not the subject of this appeal.
At [105]-[114] His Honour dealt with the challenge to the balance of the orders. His Honour observed that these orders involved discretionary decisions on practice and procedure and found no error on the part of the Master.
The Appeal to the Court of Appeal
At the commencement of the hearing of the appeal, Mr Manny was asked to summarise the errors he submitted had been made by Refshauge J. The list was revised and revisited several times but essentially the errors the Appellant relied on were as follows.
Adjournments
Mr Manny argued that Refshauge J erred in refusing to grant him an adjournment and that as a consequence, he was unable to properly prepare for or present his appeal. He submitted that Refshauge J should have granted the adjournment for four reasons: (1) the ANZ was in contempt of the Family Court; (2) he was in ill-health, in both a physical and psychological sense, in the lead-up and at the time of the hearing (although this does not seem to have been articulated to Refshauge J at the time); (3) he was caught by surprise by the Respondent’s argument that the appeal was not competent, made known to him two days before the hearing; (4) he was not given adequate notice or time to prepare for the appeal because during the 25-day lead in period he was preparing for several other proceedings.
Mr Manny further submitted that Refshauge J erred in refusing him a brief adjournment on the day of the appeal hearing to enable him time to find transcript references that His Honour requested.
Hardship
Mr Manny argued that Refshauge J erred in finding that the ANZ’s refusal to grant him an indulgence based on hardship grounds was, “in effect”, not relevant to his defence.
Unauthorised transactions
Mr Manny argued that Refshauge J erred in failing to have regard to the ANZ’s reversal of $10,000 as an unauthorised transaction, and in failing to take account of other monies handled without authority by the ANZ including sums of $6,467, $4,524 and $165,000. Mr Manny claimed that but for the ANZ’s unlawful handling of this money, he would have met his loan repayments and there would have been no default.
General dishonesty
Mr Manny complained that Refshauge J erred in failing to take into account general dishonest conduct on the part of the ANZ in family court proceedings and a number of other contexts.
Separation of defence and counterclaim
Mr Manny argued that Master Mossop erred in the exercise of his discretion to deal with his defence and counterclaim separately rather than jointly and that as a result of this he did not receive a fair hearing. By this, we take it that Mr Manny was complaining that the Master separated the Bank’s claim from his counterclaim.
Fresh Evidence on Appeal to Court of Appeal
Mr Manny sought leave to rely upon two further documents on the appeal. The Court looked at them and reserved its decision on admitting them. They are at AB 1/309 and 1/310. They are both Commonwealth Bank statements of Mr Manny’s personal credit card account. They show credit balances as at 5 May 2011 of $6,467 and as at 6 June 2011 of $4,524. The significance of these sums for Mr Manny’s case was that this credit balance, when taken together with the sum of $10,000 referred to below, would have enabled Mr Manny, on his submissions, to either avoid default or rectify any default. The documents should not be admitted. We are not satisfied that there was reasonable diligence to obtain those documents prior to the hearing of this appeal. We are also not satisfied the admission of the evidence would have had any effect on the outcome of the trial.
During the course of the hearing of the appeal the Court was told from the bar table of two significant events. The first to come to light was that on 23 December 2013, Master Mossop had given judgment on an application to re-plead the counterclaim. This was the application contemplated by order 5 set out in paragraph 13 above. The application to re-plead the counterclaim was not only unsuccessful but judgment was entered for ANZ on the counterclaim: see Australia and New Zealand Banking Group Ltd v Manny (No. 6) [2013] ACTSC 261. Accordingly, there was no current prospect of any matter on the counterclaim, in the nature of an equitable set off, impeaching the judgment for possession on the ANZ claim. The second matter to come to light is the fact that judgment for possession had, in fact, been executed in February 2014 and the ANZ had been put into possession of the property.
These two matters do not relieve us from addressing the submissions on appeal but they do allow us to deal with them more economically.
Dealing with the submissions in the order in which they are recorded in [23]-[28] above, the answers to them are as follows.
Adjournments
There was no specification of any different outcome that would have occurred, had Refshauge J acceded to the adjournment. It is clear that whatever could be said about these matters was open to be said at the hearing of the appeal before us. No relevant matter was suggested. The question of an adjournment was a matter of practice and procedure for His Honour and the exercise of discretion has not been shown to have miscarried.
Hardship
In September 2011 Mr Manny wrote a letter to the ANZ seeking the bank’s agreement to alleviate his hardship through a variation of the terms of his loan. The bank proceeded with its action for recovery of possession without responding to the letter. Mr Manny argued that this conduct should defeat the bank’s claim to possession. Master Mossop dealt with this at paragraph [36] of his judgment:
In my view these submissions do not provide a reasonably arguable basis for defeating the plaintiff's claim to possession. Nothing in the letters of offer or Conditions prevents the ANZ from exercising its rights under the security documentation. The Information Statement included at the end of the Conditions in accordance with the Consumer Credit Code makes it clear that the ANZ can take action against the borrower if the borrower is in default under the contract. There is no evidence of any application being made to the bank’s Customer Advocate or the Financial Ombudsman Service. There was, at the time, no prohibition on the ANZ commencing proceedings for recovery of possession prior to providing a response to Mr Manny’s hardship application (although now see s 89A of the National Credit Code inserted with effect from 1 March 2013).
On appeal, Refshauge J found no error in the Master’s reasoning, agreeing that the ANZ’s decision not to grant Mr Manny an indulgence was not a viable defence to the bank’s claim (paragraphs [83]-[85]).
Mr Manny’s submission to this Court was that both the Master and Refshauge J erred in this conclusion on the basis that they failed to consider the application of s 66 of the Consumer Credit (Australian Capital Territory) Code 1995. This argument is without merit for a number of reasons. First, the section does not apply to loans of more than $125,000. The housing loan in question was over $300,000 in value. Second, in the event that a creditor does not agree to vary the loan terms on the basis of hardship, the debtor’s remedy under the legislation is to apply for a court-ordered variation. Mr Manny did not seek such a remedy. The ANZ’s refusal to grant Mr Manny an indulgence based on his claims of hardship is no answer to the summary judgment.
On the appeal before Refshauge J, another argument on “hardship” was advanced which related to the question of a stay. His Honour dealt with this argument at [98] to [104]. We find no error in Refshauge J’s analysis.
Unauthorised transactions
On 21 January 2011, the document at AB 1-321 shows that a payment of $10,000 came into the personal account of Mr Manny. It also shows that this transaction was reversed on 29 March 2011. It was common ground between the parties on the hearing that the money had been redirected back from the ANZ Bank to the St George Bank to the account of a corporation called JK3L Pty Ltd. JK3L Pty Ltd was put into receivership on 21 January 2011 and there is no reason to believe that the receivers did not notify the St George Bank of their appointment on that day. On their appointment the receivers took control of JK3L Pty Ltd including control of the bank accounts.
Mr Manny told us from the bar table that he only received notification of the appointment of receivers on 25 January 2011 and in the meantime had transferred the sum of $10,000 from JK3L Pty Ltd to his own personal account. Whether Mr Manny had notice of the appointment of receivers is not relevant and does not affect the efficacy of the transaction. At the time he transferred the $10 000, Mr Manny had no entitlement to effect the transfer. Apparently, in a way not specified in the evidence, the St George Bank caused the ANZ Bank to repay the money to the company on the date above. What is clear is that the receipt of the $10,000 by Mr Manny did not represent any money beneficially owned by him. It does not matter whether the ANZ Bank was entitled to retransfer it. As it turned out, the money was returned to the person who had a beneficial entitlement to it. The receipt of the money and its subsequent retransfer is something that Mr Manny cannot complain about. For relevant purposes, he cannot be heard to say that with that $10,000 he could have avoided the default which was to occur some 4 or 5 months later.
It was conceded by Mr Manny that without the $10,000 referred to above, he could not avoid default and, even if the money held in the Commonwealth Bank account of $6,467 or $4,524 (referred to at paragraph 29 above) was available to him.
In respect of the $165,000 which Mr Manny claimed had been wrongly taken by the ANZ between August 2010 and May 2011, this was money debited to the account of Lonagann Pty Ltd. It was debited for legal fees to which the ANZ claimed under its security documents to be entitled. Lonagann Pty Ltd was a borrower from the ANZ and had executed security documentation to support the borrowings. Whether the ANZ was entitled to debit this money or not does not help Mr Manny. Certainly, he had no entitlement to it, even if Lonagann Pty Ltd was the trustee of his family trust and he was a discretionary beneficiary.
General dishonesty of the ANZ Bank
The court is unable to act upon this assertion. Any dishonesty would have to be sheeted home to an element necessary to impinge upon the ANZ’s right to obtain judgment to possession of the land. Mr Manny did not do this during the course of the hearing.
Separation of defence and counterclaim
The judgment of Master Mossop in making these orders was a sound discretionary one for the reasons he gave. Had there been a matter on the counterclaim which could have impeached the action on the claim, no such separation would have been made. There is no error to be found here and Refshauge J’s judgment on this matter reflected His Honour’s view that he too could find no error.
As it turned out, Mr Manny’s attempts to articulate and plead a tenable counterclaim failed. There is therefore no utility in further investigating the wisdom of the orders made to separate out the Bank’s claim from the counterclaim.
Further communications
After we had reserved judgment, we received further communications from Mr Manny concerning submissions in an aspect of the appeal. We have disregarded these communications. There was no leave to serve further submissions.
Orders
The orders of the Court are:
(i) Leave to appeal is granted to the Appellant to the extent necessary;
(ii) Refuse leave to adduce fresh evidence;
(iii) The appeal is dismissed;
(iv) The Appellant is to pay the Respondent’s costs of the appeal.
I certify that the preceding forty-six [46] numbered paragraphs are a true copy of the Reasons for Judgment of the Court of Appeal
Associate:
Date:
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