Manny v Australia and New Zealand Banking Group Ltd
[2014] ACTSC 335
•12 December 2014
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Manny v Australia and New Zealand Banking Group Ltd & Ors |
Citation: | [2014] ACTSC 335 |
Hearing Date(s): | 8 – 9 December 2014 |
DecisionDate: | 12 December 2014 |
Before: | Cowdroy AJ |
Decision: | The Court orders that: (a) The appeal be dismissed. (b) The Appellant pay the respondents’ costs. |
Category: | Principal Judgment |
Catchwords: | PROCEDURE – Supreme Court Procedure – Australian Capital Territory – Procedure under rules of court – Commencement of action and pleadings REAL PROPERTY – Torrens Title – Mortgages, charges and encumbrances – Powers and remedies of mortgagee – Possession – Generally |
Legislation Cited: | Corporations Act 2001 (Cth) |
Cases Cited: | Aon Risk Services v Australian National University (2009) 239 CLR 175 Australia and New Zealand Banking Group Limited v Jeff Manny & Ors [2013] ACTSC 116 Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No. 2) [2013] ACTSC 143 Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No. 3) [2013] ACTSC 223 Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No. 4) [2013] ACTSC 236 Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No. 6) [2013] ACTSC 261 Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 House v The King (1936) 55 CLR 499 Manny v Australia and New Zealand Banking Group Ltd [2014] ACTCA 42 |
Parties: | Jeff Manny (Appellant) Australia and New Zealand Banking Group Limited (First Respondent) Anthony Simms and Steven Parberry (Second Respondent) Shane O’Keefe and Murray Smith (Third Respondent) |
Representation: | Counsel Self-represented (Appellant) Mr J Foley (First Respondent) Mr M Roser (Second Respondent) Mr M Carmody (Third Respondent) |
| Solicitors Self-represented (Appellant) Gadens (First Respondent) Ashurst (Second Respondent) Dibbs Barker (Third Respondent) | |
File Number(s): | SC 746 of 2011 |
Decision under appeal: | Court/Tribunal: Supreme Court of the ACT Before: Master Mossop Date of Decision: 23 December 2013 Case Title: Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No. 6) Citation: [2013] ACTSC 261 |
Cowdroy AJ:
This appeal
The Appellant appeals from all of the orders of Master Mossop dated 23 December 2013. By the Master’s orders, an application made by the Appellant for leave to rely on an amended counterclaim, and an application to join additional parties were dismissed, and judgment was entered in favour of all respondents against the Appellant in respect of the Appellant’s counterclaim: see Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No 6) [2013] ACTSC 261 (the Master’s decision). Consequential orders were made for costs. The Appellant seeks the following orders:
1.That the orders of 23 December 2013 made by the Master in SC 746 of 2011 be set aside.
2.Grant leave to the Appellant to file a new application and to seek leave to file his ‘properly articulated Counterclaim’.
3.Allow the Appellant to file a new application ‘to seek inclusion of my companies in these proceedings’.
The grounds of appeal are set out verbatim as follows:
5.The learnt Master erred not allowing me to file a new counterclaim
6.The learnt Master erred not to give me intelligible and proper directions for filing my previous Counterclaim.
7.In the previous directions of Master Mossop, I maybe wrongly understood that my new Counterclaim should be exactly like the old one but differently formatted.
8.The learnt master erred not to give me leave to include my companies in these proceedings.
9.The learnt master erred to dismiss all of my applications in contrary to the weight of evidences.
10.The learnt master erred to speculate that I am not able to articulate and file a properly drafted Counterclaim or engage a lawyer to articulate a legible Counterclaim.
11.The reasons to orders of 23 December 2013 are a good direction for filing a new application to seek leave to file my Counterclaims and leave to include my companies in these proceedings.
12.The learnt master erred to speculate that justice has a boundary. I have not given a fair opportunity to articulate a legible Counterclaim ever.
Facts
On 27 October 2011, ANZ commenced proceedings for possession of the land known as 42 Barber Crescent, Flynn ACT (the subject land) which had been mortgaged by the Appellant to the bank as security for a loan. Three companies of which the Appellant was the sole director and shareholder; namely, JK3L Pty Ltd, Jeff Manny Constructions Pty Ltd, and Lonagann Pty Ltd (the three companies), gave charges over their assets and undertaking to ANZ by way of further security.
On 16 November 2012, the Appellant filed a defence and counterclaim (the first counterclaim). In those proceedings, he sought to join in Receivers, namely Messrs Simms and Parberry (the Receivers), who had been appointed by ANZ as Receivers of the above three companies, and also against Messrs O’Keefe and Smith (the Liquidators), appointed liquidators of the three companies on 2 March 2011.
On 30 November 2012, ANZ filed an application for a summary judgment in its claim for possession, and sought to strike out the counterclaim, and sought judgment on the counterclaim.
On 7 February 2013, the Appellant filed an amended defence and an amended cross-claim (the second cross-claim). On 12 June 2013, the Master struck out various portions of the Appellant’s amended defence and cross-claim: see Australia and New Zealand Banking Group Limited v Jeff Manny & Ors [2013] ACTSC 116 (Manny (No. 1)). The Master found that the counterclaim failed to comply with the rules of pleading, in that they did not identify material facts which constitute a cause of action, or were so unintelligible, ambiguous, vague or imprecise as to be embarrassing, in the sense of likely to cause delay to the proceedings.
On 26 July 2013, the Master heard the application of ANZ for summary judgment. As a result of the hearing, judgment for possession of the subject land was granted in favour of the bank (see Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No. 2) [2013] ACTSC 143).
The Master considered that the claims made in the amended cross-claim suffered from the same defects as was present in the cross-claim referred to in Manny (No. 1). However, the Master declined to dismiss the counterclaim on the basis that the Appellant was unrepresented, and it was not possible to finally determine whether a valid cause of action might exist. Accordingly, the Appellant was granted the opportunity of preparing and filing a further cross-claim within 28 days. The Master further ordered that the counterclaim be heard separately from the proceedings brought by ANZ.
Pursuant to the leave granted by the Master on 26 July 2013, the Appellant prepared a new counterclaim which was filed with his application to rely upon such counterclaim, on 19 September 2013 (the third cross-claim). By the third cross-claim, 22 claims were raised.
On 31 October 2013, the Master dismissed the third cross-claim, as disclosing no reasonable cause of action: see Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No. 3) [2013] ACTSC 223.
The Appellant appealed the decision of the Master delivered on 26 July 2013. Such appeal was heard by Refshauge J on 24 October 2013 and, in his decision delivered on 2 December 2013, the appeal was dismissed (see Australia and New Zealand Banking Group Limited v Jeff Manny & Ors (No. 4) [2013] ACTSC 236). On 14 August 2014, the Appellant appealed the decision of Refshauge J to the Court of Appeal, and on 5 September 2014 the appeal was dismissed (see Manny v Australia and New Zealand Banking Group Ltd [2014] ACTCA 42).
Applications the subject of this appeal
On 27 November 2013, the Appellant filed a further application for leave to rely upon a revised counterclaim. No draft of a counterclaim was attached to the application. This application is one of the two applications considered by the Master in his decision now under appeal.
On 9 December 2013, Mr Manny filed another application. This application seeks leave for the Appellant ‘to act for my companies and including the companies’. The application seeks leave for the Appellant to join in the three companies of the Appellant referred to above, namely JK3L Pty Ltd, Jeff Manny Constructions Pty Ltd, and Lonagann Pty Ltd, together with another company of which he was the sole director and shareholder, but which was not placed in Receivership or liquidation, namely Landagency Pty Ltd.
On 13 December 2013, the Master heard the two applications. The Appellant then sought to rely upon a further draft cross-claim (the fourth cross-claim) which had not been made available to the respondents before the morning of the hearing, and which contained 13 claims. The Master nevertheless considered the fourth cross-claim and gave his decision on 23 December 2013. The Master dismissed both the application to rely upon the fourth cross-claim and the joinder application. In so doing, the Master considered each of the 13 cross-claims sought to be raised by the Appellant, and he also considered the application for joinder.
The Master found that the counterclaims did not disclose a reasonable cause of action. For example, one counterclaim sought to raise allegations of contempt of orders of the Family Court by ANZ, a subject matter over which this Court had no jurisdiction. In addition, the Master found that the counterclaims relating to the three companies could not succeed, as the Receivers of those companies had not, contrary to the Appellant’s assertions, assumed certain contractual obligations, as was already determined in a prior decision of the Court: see Australia and New Zealand Banking Group Limited v Manny (No. 3) [2013] ACTSC 223 at [39]-[40].
The Master noted that the Appellant had had three opportunities to articulate his proposed claims, and that he had a fair opportunity to raise the counterclaims. The Master considered that it was inappropriate to permit the Appellant a further opportunity to plead his counterclaim. For those reasons, the counterclaims were dismissed.
The orders made were:
1.The defendant’s application dated 27 November 2013 is dismissed.
2.The defendant’s application dated 9 December 2013 is dismissed.
3.Judgment is entered for Australia and New Zealand Banking Group Ltd, Anthony Sims and Stephen Parbery, Shane O’Keeffe and Murray Smith against the defendant on the defendant’s counterclaim.
4.The defendant is to pay the costs of Australia and New Zealand Banking Group Pty Ltd, Anthony Sims and Stephen Parbery, Shane O’Keeffe and Murray Smith of the counterclaim.
Appellant’s submissions
The Appellant submits that Master Mossop did not give him a fair hearing, resulting in a miscarriage of justice; that the Master erred in his understanding of the Appellant’s ‘situation’ which he described as ‘Special Disadvantage’. The Appellant has provided voluminous submissions, which raise matters concerning a potential counterclaims he wishes to make against a firm of lawyers who acted for him in Family Court proceedings; a claim against ANZ alleging misleading conduct in the ‘Australian family court’; a claim against the Receivers of the companies with which he was associated, namely the three companies; a claim against administrators (who are not specified); and a claim against his former wife’s lawyers. The Appellant claims that he is mentally unstable due to the death and grief of his mother and his young sister-in-law, but nevertheless, in his written submissions, stated that he would file a new counterclaim on or before 8 December 2014 allegedly in accordance with the directions of Refshauge J made on 5 September 2014. Refshuage J made no order as claimed, and in any event, no such counterclaim has been filed.
Findings of Master Mossop
The Court will now refer to the counterclaims raised in the same order as raised in His Honour’s judgment at paragraphs [17]-[68] of the Master’s decision. It is necessary to have regard to the detailed analysis of each claim already set out at those paragraphs, and to refer to such paragraphs in conjunction with reading this judgment, to avoid repetition in this judgment. The Court will state its findings as follows:
Counterclaim 1: Contempt by ANZ of order of Family Court in failing to disclose valuation
This claim was considered by the Master at [17]-[21] of his decision. The claim raises assertions against ANZ alleging that valuations obtained by ANZ were inaccurate and that the conduct of ANZ before the Family Court in the Appellant’s family law proceedings was misleading, ‘breach of law of court’, and constituted a contempt of the orders of the Family Court. The Appellant sought an order that the proceedings be transferred to a ‘criminal court’. A claim for ‘injuries, pain and suffering’ and damage to health was also made.
The Master regarded the claim as essentially an allegation of contempt, relating to orders made by the Family Court in proceedings in which Mr Manny was involved, and a claim for damages for monetary losses. The Master found that it did not disclose a reasonable cause of action, since any claim of contempt of the Family Court’s orders could only be considered by the Family Court.
There is no error as claimed. The Family Court exercises exclusive jurisdiction over allegations of contempt involving its orders.
Counterclaim 2: Sale of properties at undervalue
This claim involved an allegation that the Receiver negligently failed to obtain the best sale prices for the properties owned by JK3L. However, His Honour found at [22]-[24] of the judgment under appeal that an identical claim was raised and rejected in Manny (No. 3) for the reason that no duty as alleged by the Appellant is owed in tort by a Receiver: see Manny (No. 3) at [34]-[40]. As this claim has already been determined, it cannot be litigated again.
His Honour noted that as part of the second counterclaim, the Appellant alleged that the Receivers breached their obligation to hold surplus funds derived from the sale of properties of which Lonagann Pty Ltd was the registered proprietor, on trust for the beneficiaries of the Manny Family Trust. His Honour observed that a similar claim was considered and rejected in Manny (No. 3) at [41]-[43]. The reason for the rejection was that the Appellant’s family trust was not entitled to receive any surplus funds provided money remained owing under securities provided by the Appellant’s companies to the ANZ. On this basis, he determined that the Appellant should not be permitted to re-litigate this issue.
His Honour was correct to reject the identical claim.
Counterclaim 3: Misconduct by ANZ and the Receivers on sale of properties
This is a claim that ANZ breached order number 3 of the Family Court made on 6 July 2010. His Honour was correct in his conclusion at that this Court has no jurisdiction in respect of allegations of contempt of Family Court orders, and did not err in rejecting such claims (see [25]-[29] of the Master’s decision).
Counterclaim 4: Contempt of orders of Family Court in respect of unit 1/10 Wall Place, Page ACT 2614
The claim alleged that ANZ breached order number 1(b) of the Family Court, made on 10 October 2010. Apart from the fact that the order sought made no sense, the Master was correct in his finding at [30]-[32] that this Court has no jurisdiction over allegations of contempt of Family Court orders.
Counterclaim 5: Breach of contract by the Receivers
This claim alleged a breach by the Receivers of a contract made between JK3L Pty Ltd and Landagency Pty Ltd, which provided property management services to real property owned by JK3l Pty Ltd and by Lonagann Pty Ltd.
The Master considered this claim at [33]-[35] of his decision. His Honour observed that a similar claim of repudiation by the Receivers was raised in Manny (No. 3), subject to a slight variation in dates. His Honour dealt with this claim in Manny (No. 3) (at [39]-[40]). The Master dismissed the counterclaim on the basis that the Receivers never adopted the alleged contract and that as a consequence any action would only lie against the JK3L Pty Ltd. It followed that no reasonable cause of action was disclosed.
His Honour was correct in dismissing this counterclaim which is, in substance, no different to that considered in Manny (No. 3). The lengthy submissions made by the Appellant do not address the critical finding of the Master, namely that this issue is res judicata.
It should also be observed that the Appellant referred the Court to s 420(2) of the Corporations Act 2001 (Cth) (Corporations Act). Such section lists the various powers of a receiver in itemised form. The Appellant submits that s 420(2) does not give any power to the Receivers to terminate contracts. However, such submission wholly overlooks the fact that s 420(1) invests power in a receiver to do ‘all things necessary or convenient to be done for or in connection with, or as incidental to, the attainment of the objectives for which the receiver was appointed.’ Further, s 420(2) is prefaced with the words ‘Without limiting the generality of subsection (1), …’. Accordingly, there is no merit in this submission.
Counterclaim 6: Misappropriation of $10,000 from the Appellant’s credit card account
This claim alleged a breach by ANZ of its obligations to the Appellant by the inappropriate reversing of the amount of $10,000 from his personal Visa credit card to the account of JK3L Pty Ltd, which was then operated by the Receivers.
Such claim had already been raised and considered in Manny (No 1) at [36], Manny (No 2) at [32], Manny (No 4) at [93]-[96]. The Master reviewed and rejected the claim at [36]-[38] on the basis that it disclosed no reasonable cause of action.
His Honour was correct. The claim had already been considered, and the issue of this payment has already been determined. Contrary to the Appellant’s submissions, it is irrelevant that the issue was decided in the Appellant’s defence rather than in a counterclaim.
Counterclaim 7A: Failure of ANZ to pay invoices for services and rent
This claim alleged a failure by the receiver to pay invoices incurred for services and rent, rendered by Landagency Pty Ltd or by another company of which Mr Manny was the director and shareholder, namely Canwork Pty Ltd during their Receivership.
This claim was considered by the Master at [39]-[40]. His Honour found the claim to be ‘pleaded at a level of generality that makes it difficult to assess’, and that he was not satisfied that the Receivers incurred any such services, such as to give rise to an arguable case. The Master went on to find that he was not satisfied that there was merit in the claim, sufficient to constitute a contravention of ss 419, 419A(1), or 419A(2) of the Corporations Act.
The Appellant submits that the Receivers were appointed on 21 December 2010 to the three companies. However, the termination of the contract with Landagency Pty Ltd did not take effect at least until March 2011. It followed that in a three month period, namely from December 2010 to March 2011, the companies under Receivership ‘were run by the Landagency Pty Ltd’. The Court assumes that what is intended by this statement is that in the three month period, Landagency Pty Ltd provided services to the three companies. The Appellant submits that the Receivers requested Landagency Pty Ltd to obtain a certificate for the sale of one of the properties apparently owned by the three companies, namely Unit 1/10 Wall Place, Page, and that the unit was sold by Landagency Pty Ltd.
The Appellant also submits that the three companies under Receivership used premises of Landagency Pty Ltd at 64-66 Oatley Court, Belconnen, to store extensive documents from December 2010 at least until June 2014. The Appellant refers to a copy of the lease and a copy of the contract between Landagency Pty Ltd and the companies under Receivership. On this basis, the Appellant submits that services rendered, goods purchased or property hired or leased or used by Landagency Pty Ltd, justifies the claim brought against the Receivers.
The Master was not satisfied that there were in fact ‘services rendered, goods purchased or property hired, leased, used or occupied’ as referred to in s 419 of the Corporations Act. Section 419(1) provides:
A receiver, or any other authorised person, who, whether as agent for the corporation concerned or not, enters into possession or assumes control of any property of a corporation for the purpose of enforcing any security interest is, notwithstanding any agreement to the contrary, but without prejudice to the person's rights against the corporation or any other person, liable for debts incurred by the person in the course of the Receivership, possession or control for services rendered, goods purchased or property hired, leased (including a lease of goods that gives rise to a PPSA security interest in the goods), used or occupied.
Nor was the Master satisfied that there were rental obligations incurred by the Receivers which would give Landagency Pty Ltd an arguable claim against the Receivers in consequence of the operation of ss 419 and 419A of the Corporations Act. The Master came to such view even though he had been provided with documents purporting to be invoices raised by Mr Manny, on behalf of Landagency Pty Ltd.
It is not apparent to the Court that any such obligations were created. The Court concludes that his Honour was correct in dismissing this claim. Had this been a matter in which the Appellant could have provided more evidence, the Court may have been inclined to allow a re-pleading. However, there are other considerations as set out in paragraph [74]-[77] hereunder.
Counterclaim 7B: Failure of Receivers to provide accounts
This claim asserted that the Receivers had failed to give accounts of the three companies to the Appellant in breach of s 423 of the Corporations Act. The Master considered this claim at [41]-[44] of his decision. His Honour noted that no failure to provide accounts was pleaded, nor any statutory or other obligation that would require provision of the information requested by the Appellant. The Master found that s 423 of the Corporations Act provided the Court with the discretionary power to investigate Receivers ‘if it appears to the Court’ that the Receivers had not faithfully performed their functions. The pleading of the claim was found to be defective and did not disclose a reasonable cause of action.
The Master had before him no evidence that the Receivers had not faithfully performed their functions as required by s 423. Further, there had been no formal application to the Court that the Receivers should be terminated because of their failure to fulfil their duties, including the provision of accounts to the Appellant. Before this Court, evidence was produced in the form of ASIC records which established that in fact, the Receivers have provided accounts to ASIC on several occasions during their receivership. Accordingly, the claim of the Appellant that the Receivers had not produced accounts, could not be substantiated. In these circumstances, the Master was correct in his conclusion that no cause of action was disclosed.
Counterclaim 8: Failure to take notice of Appellant’s hardship
This claim identified the cause of action as a ‘failure of taking notice of [Mr Manny’s, i.e. the Appellant’s] financial and other hardships by [ANZ].’
His Honour found at [45]-[51] that the pleading of the cause of action was not intelligible, and was not satisfied that the claim disclosed a reasonable cause of action.
The Appellant has provided voluminous submissions concerning hardship he experienced resulting from the foreclosure by ANZ. However, the fact that the Appellant may have suffered financial and other hardship is not relevant. The only question is whether ANZ had a lawful right to foreclose. This question has already been determined adversely to the Appellant, and accordingly whatever consequences flow from the lawful exercise by ANZ of its rights is not a matter which per se gives rise to any cause of action against ANZ or against the Receivers. For the reasons given by the Master, he did not err in rejecting this claim.
Counterclaim 9: Inappropriate transfer of monies by ANZ from accounts of the Appellant’s companies
This claim was that ANZ ‘inappropriately transferred money’ from the bank accounts of JK3L Pty Ltd, and of Lonagann Pty Ltd ‘to pay legal fees of the First Counterclaimant’s family court which has established a contract to enable the third defendant [ANZ] to counterclaim to pay arrear of the First Counterclaimant’s [Appellant’s] home loans’. His Honour found at [56]-[57] the claim was unintelligible, and that no reasonable cause of action was disclosed.
The written submissions of the Appellant, whilst being highly critical of the Master’s decision, fail to illuminate the precise intent of counterclaim 9 sufficient to allow the Court to have the claim proceed to trial. The Court agrees that the claim is unintelligible, and that it should have been struck out.
Counterclaim 10: Failure by ANZ to maintain properties owned by the Appellant’s companies
This claim alleged the Receivers did not maintain the properties of the three companies. A declaration was sought of misconduct of the Receivers under s 434A of the Corporations Act. However, as was noted by the Master at [56]-[57], it appeared that the cause of actions sought to be raised were on behalf of the companies, but since they had not consented to being joined as plaintiffs, the claim raised no reasonable cause of action.
The Master said at [57] of his decision:
Although it is not made clear by the pleading, it appears that this cause of action is pursued by JK3L Pty Ltd, Lonagann Pty Ltd and Jeff Manny Constructions Pty Ltd. It cannot be pursued by those companies because they have not consented to being joined as plaintiffs in the proceedings: r 222, 470. Further, in so far as the claim is made under s 434A an application under that provision can only be made by the corporation and in the present case the relevant corporations have not made the application and not consented to be joined as plaintiffs. It therefore discloses no reasonable cause of action.
The Appellant has submitted that the Master failed to consider provisions of ss 447A(4), 234, 236(1) and 236(2) of the Corporations Act, which allows a member or creditor of the company and any interested person to apply for an order.
The Appellant submits that the Master failed to consider his ‘overwhelming evidence’ that he was entitled to relief in respect of the ‘breach of law / breach of contract / breach of trust’ and misconduct of ANZ under s 434A of the Corporations Act, and that he should have given leave, in the interests of justice, for the companies to be joined in the counterclaim.
There is no basis for such submissions. In the absence of the companies consenting to be joined in the proceedings, the finding of His Honour was clearly correct.
Counterclaim 11: Failure of ANZ, the Receivers and the Liquidators to consent to refinancing of the Appellant’s loans to the three companies
This claim alleged failures of the Receivers, liquidators and ANZ to consent to the three companies referred to above to refinance their loans with the Bank of Queensland. Such claim, as was noted by the Master, related only to the Receivers. His Honour found at [58]-[60] that it disclosed no reasonable cause of action.
The Appellant relies upon s 423(1), (2), and (3) of the Corporations Act. It is not possible to determine how s 423 assists the Appellant. The Court is satisfied that the conclusion of His Honour was correct.
Counterclaim 12: Inappropriate foreclosure under mortgage
This claim pleaded that the foreclosure (by the ANZ) of the mortgage over the subject land was inappropriate. The Master found at [61]-[62] that it disclosed no cause of action, and was inconsistent with the judgment possession given to ANZ: see Manny (No 2) and Manny (No 4).
The Appellant has made voluminous submissions which relate to the history of his prior litigation at its various stages. It is sufficient to note, as the Master found, that the Court has determined that ANZ was justified in its proceeding to enforce its security because of the failure of the borrower to make repayment of the monies owing under the mortgage.
Counterclaim 13: Liquidator’s failure to give notice of creditor’s meeting
This claim alleged that the three companies were not made aware of the location of the creditors’ meeting. No cause of action was disclosed, as found by the Master at [63]-[65] of his decision. In Manny (No. 3) at [31] the Master pointed out that any failure as alleged does not give rise to a cause of action.
With regard to the findings of the Master, it is a well established principle that where an exercise of discretion is challenged, a Court will usually not interfere with the exercise of discretion unless the decision-maker has acted upon a wrong principle or if he allows extraneous or irrelevant matters to guide or affect him; further, if mistakes as to facts are made, or matters are ignored, an appellate Court may interfere. That is, as was stated in House v The King (1936) 55 CLR 499, the Court observed that it must appear that there has been some error made in the exercise of discretion.
In this instance, the Master has considered the claims of the Appellant, and the counterclaims, and has concluded that they raise no causes of action have already been determined, or are otherwise unintelligible. There is no error demonstrated by the Master when one considers the nature of the claims made as referred to in the Master’s decision.
Joinder application
The Master refused the Appellant’s application to join in the companies associated with the Appellant, because the Appellant had no standing to join in such companies (see [66]-[69] of the Master’s decision). No leave had been applied for or granted as required: see s 236-7 of the Corporations Act 2001 (Cth), set out in the Master’s decision at [25]. In addition, His Honour was not satisfied that there was any viable cause of action by those companies to warrant their joinder: see [26] of the Master’s decision. Further, there was no consent from those companies to be joined into the proceedings.
During the course of the hearing, the Appellant raised an allegation that the Receivers had been illegally appointed. The Appellant referred the Court to s 436C of the Corporations Act in support of such submission. Section 436C(1) empowers a person who is entitled to enforce a security interest in the whole, or substantially the whole, of a company’s property, to appoint an administrator if this security remains enforceable. The Appellant claims that since one of his companies held no property, it must follow that the appointment of a Receiver to that company was invalid. The Court rejects such submission. There is no evidence before the Court of the extent of any assets of any of the companies in which the Appellant was associated. Further, the words ‘company’s property’ should not be construed as meaning only real estate, as the Appellant appeared to suggest. The Court is satisfied there is no merit in such submission.
As was also found in Manny (No. 3) there was no basis to bring proceedings on behalf of those companies: see authorities referred to in Manny (No. 3) at [27]-[28].
As to Landagency Pty Ltd and Canwork Pty Ltd, the Master correctly concluded that no reasonable cause of action existed to justify those companies being joined in an action against the Receivers of the three companies.
There is again no error demonstrated sufficient to show that His Honour’s discretion has miscarried with respect to the joinder application.
Overall assessment
The principles applied by the Court in determining whether a pleading is one which should be permitted have been carefully explained by the Master in Manny (No. 1) at [16]-[19] and [39]. The Court particularly refers to the decision of the High Court in Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at [18] where the Court stated:
The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (In Liquidation) [1916] HCA 81; (1916) 22 CLR 490, per Isaacs and Rich JJ at p 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.
In considering the Master’s decision, the Court has had regard to those principles, and it has also had regard to the lengthy submissions provided by the Appellant. Such submissions frequently failed to address critical reasons upon which the Master struck out the various counterclaims; namely, absence of jurisdiction, res judicata, absence of standing and unintelligible claims.
The Court has also had regard to an affidavit affirmed by the Appellant on 4 December 2014, which attached considerable documentation and to which the Appellant addressed submissions in support of his application to produce further evidence. That evidence consisted of both submissions and facts as set out in his initial submissions and in his reply submissions, which have been read by the Court prior to reaching its conclusion, and further documentation contained within the Appellant’s application to rely upon fresh evidence.
During the course of the appeal, the Appellant referred to various other sections of the Corporations Act. One such section is s 447B(2), which authorises a creditor of a company to make an application to the Court to protect the creditor’s interests while the company is under administration. Since no such application has been made, it is impossible to see how this section assists.
The Appellant also referred to s 447C of the Corporations Act, which permits an application to be made where a doubt exists relating to the validity of the appointment of the administrator to the company. However, for the reasons referred to above, the only ground that the Appellant relied upon was the fact that one of his companies owned no property and therefore the appointment should not have occurred. In the absence of evidence, and in the absence of any formal application, the Court rejects such challenge. It should also be observed that the appointment of the receivers had ceased by 2012, and that the three companies are in liquidation.
The Appellant referred to numerous other sections of the Corporations Act. The Court has considered them, but finds it unnecessary to consider them further, as the Court is satisfied that there is no merit in the submissions made in support of those sections, insofar as they are relied upon in the challenge to the Master’s decision.
In Manny No. 1, the Master observed at [19] and [20] when he was reviewing the Appellant’s first cross-claim:
Striking out a pleading because it does not disclose the material facts required by the rules and a properly constituted cause of action is to be distinguished from striking it out because the matter is properly pleaded but what is pleaded could not give rise to a cause of action. The former relates to defective pleading and the pleading is struck out so that the case can proceed in a manner that is procedurally fair by insisting on compliance with the rules of pleading. The latter relates to whether or not a cause of action could in law be made out. It is this latter type of strike out to which the high bar articulated in Dey v Victorian Railway Commissioners (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railway (NSW) (1964) 112 CLR 125 applies.
It is very clear that the counterclaim pleaded in the present case does not comply with the requirement of rule 406 that it plead the material facts required to establish Mr Manny’s causes of action. Rather, the paragraphs of the counter claim articulate a series of separate conclusions which assert either illegality or impropriety on the part of the ANZ or the Receivers or Administrators or one or more of them without articulating in any coherent way the material facts which give rise to the conclusion or articulating the legal rule which has been contravened so as to give rise to the liability of one or other of the parties.
Of all the thirteen cross-claims, only two require special consideration; namely, counterclaims 7A and 9. These claims were found to be unclear. Normally, in these circumstances a Court would grant leave to enable a re-pleading of claims struck out for lack of clarity. Had this been the first attempt to re-plead, the Court may have allowed the Appellant to re-plead only these two claims. However, as discussed hereunder, the interests of justice do not justify such leave.
This is not an instance where only the articulation of the claims has caused the Master to refuse leave to rely upon the cross-claim and to proceed to enter judgment in favour of the Respondents. Had this appeal only concerned the question of semantics of the thirteen claims, the Court may have granted leave to the Appellant to re-plead. However, there is a more fundamental reason why this course should not now be available to the Appellant.
The Master found that the claims could not succeed for the reason that the substantive claims have no foundation in that claims 1, 3, 4 and 12 were res judicata; claims 2, 5 and 6 could not be litigated in this Court because of absence of jurisdiction; the Appellant lacked legal standing to bring claims 10 and 11; and claims 7A, 7B, 8, 9 and 13 failed to establish an arguable case.
Despite such submissions and additional material, the Court is satisfied that there is no error in the decision of the Master to dismiss the application to bring the cross-claim and to enter judgment in favour of the Respondents in respect of the cross-claim.
The point has been reached where, after so many attempts of articulating a claim, it would not be in the interests of justice to allow a further opportunity for the Appellant to bring a cross-claim nor fair to the respondents to require them to face yet another application to amend: Aon Risk Services v Australian National University (2009) 239 CLR 175, [94], [112], [114]. The Master addressed this issue, concluding that the Appellant had had a fair opportunity to make a counterclaim. He was not entitled to ‘every conceivable opportunity’ (at [74] of the Master’s decision). The Court concurs with the Master’s observation.
Orders
For these reasons, the Court concludes that the appeal must be dismissed. The Court orders that:
(c)The appeal be dismissed.
(d)The Appellant pay the respondents’ costs.
| I certify that the preceding seventy-eight [78] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Cowdroy. Associate: Date: 12 December 2014 |
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