Martin v Kenny No. DCCIV-02-83

MARTIN V KENNY
[2003] SADC 11
Judge Burley
Civil

These proceedings consist of a claim and counterclaim. The claim by the plaintiff against the defendant is for damages for breach of contract. The defendant denies that she entered into a contract as alleged by the plaintiff and has counterclaimed for damages in addition to seeking injunctive relief against the plaintiff.
When the matter was called on for trial on 28 January 2003, there was no appearance by or on behalf of the plaintiff. The defendant was represented by counsel, Mr Brohier, who invoked the provisions of Rule 75.14 of the District Court Rules which provides for the procedure to be followed when a plaintiff, who is also a defendant to a counterclaim, fails to appear at trial.
Given that the plaintiff failed to attend when the matter was called on for trial, no evidence was adduced on the claim during the course of the trial and judgment will in due course be entered in favour of the defendant on the claim. Because the defendant proceeded at trial with the counterclaim, the trial proceeded as an assessment of damages insofar as the defendant’s counterclaim consisted of a claim for damages. In addition the defendant’s counterclaim for injunctive relief proceeded as a hearing in open court in accordance with Rules 75.14 and 23.01(d). Mr Brohier called only one witness, the defendant, and various documentation was tendered during the course of her evidence. In addition, Mr Brohier tendered the report of a builder and a medical report. Both reports were received into evidence pursuant to the provisions of Section 59J of the Evidence Act.
In broad terms, the defendant’s counterclaim may be divided into three categories:
(a)a claim for damages for breach of contract;
(b)a claim for damages for assault; and
(c)a claim for injunctive relief relating to a transaction in the nature of a guarantee entered into between the plaintiff and the defendant, the guarantee being in respect of a loan in the sum of $15,000.00 obtained at the instigation of the plaintiff, the proceeds of which are alleged by the defendant to have been paid by the lender solely to the plaintiff. This aspect of the defendant’s counterclaim is a quia timet action which may be brought by a guarantor against a debtor with the object of compelling the debtor to repay the amount owing on the loan to the lender/creditor.
It is convenient at this point to turn to the evidence of the defendant. I find her to have been a truthful witness and that, for the most part, her evidence was reliable. The following narrative consists of my findings based on her evidence.
The defendant is 55 years old, having been born on 7 March 1947. She has been twice married and twice widowed. She has four children, the younger two of whom, a boy and a girl, live with her at 48 Village Road, Hackham West. The defendant has lived in that house for approximately 17 years.
In about June 2000 the defendant met the plaintiff. She was walking in the vicinity of her house and saw the plaintiff working in the garden of another house. They struck up a conversation during which the plaintiff informed her that he was a bricklayer and concreter. She informed him that she needed a concreting job done at her house in relation to the erection of a small shed which she had purchased. The plaintiff said that he would give her a quote for that work later that day.
The plaintiff came to her house about three hours later and gave her a quotation for approximately $295.00 for the laying of a concrete slab and the construction of the shed over the slab. The defendant accepted the quotation.
Approximately two months later the plaintiff came back to her house and informed the defendant that if she paid $50.00 a week on account of the contract price he would start work for her. He explained that he did not have money to buy materials and that he needed the $50.00 advances to buy materials and start the work. The defendant agreed to this and paid the plaintiff $50.00 a week. The plaintiff made a start on the work but his attendances were spasmodic and so the construction of the concrete slab and shed was not completed for some time. The defendant recalled that the concrete slab was laid on 28 September 2000.
After the completion of the shed, the plaintiff came to the defendant’s house in early October in a distressed and dishevelled state. He had a dog with him. The plaintiff explained that he had spent the night out in the open because he had left the accommodation where he had been boarding because the landlord had attacked him when the landlord was under the influence of medication and alcohol. The defendant invited the plaintiff into her house and prepared a hot breakfast for him and gave his dog something to eat. During the course of that day the plaintiff told the defendant that he was in a miserable situation and had nowhere to stay. The plaintiff spoke to both of her children and suggested that she might offer to put the plaintiff up for the night. The defendant subsequently told the plaintiff that he could stay the night but that he would have to sleep in the lounge room on the floor. The plaintiff accepted this invitation. After the first night the plaintiff asked the defendant if he could continue to stay on for a little while so that he could get himself on his feet. The defendant agreed to this.
The plaintiff continued to board with the defendant at her house. Towards the end of October 2000 the defendant became ill. Her illness had been developing gradually but at the end of October she collapsed on one occasion when the plaintiff was there. She said that the plaintiff acted in a very caring manner towards her and told her that he would look after her. Because of her illness the defendant was glad to have the plaintiff stay on.
The plaintiff commenced paying the defendant $50.00 a week for food but he also regularly borrowed money from the defendant, which he did not repay, so that to some degree the payment of board was illusory.
The plaintiff informed the defendant that he had been attempting to obtain a loan to buy equipment so that he could establish a gardening business. At that time he had been borrowing tools and a lawnmower from the defendant when he went out to work each day.
The plaintiff asked the defendant if she had access to money and she told him that she was able to redraw money on a mortgage loan which she had in respect of her house. She said (T33/24):
“... It was a constant asking, you know, surely you know, you can get money and I could - you could lend me some money I could pay it back straight away and just kept on and on and on like a drip treatment thing.”
On 14 November 2000, the defendant was admitted to the Noarlunga Hospital and she was discharged on 17 November 2000. Before her admission to hospital she had telephoned “Homestart”, the entity which held a mortgage over her house, and ascertained from them that she could redraw $2,300.00 from them. The plaintiff drove her to the Homestart office at Parafield to enable her to make the appropriate application to withdraw monies. On 14 November 2000 Homestart paid the sum of $2,300.00 into a bank account maintained by the defendant at the Adelaide Bank.
Whilst in the Noarlunga Hospital the defendant underwent surgery. After the surgery, on 15 November 2000, the plaintiff came to see her in hospital. He had with him a withdrawal slip in respect of her Adelaide Bank account. At his request she signed the withdrawal slip in the sum of $2,300.00 and that sum was withdrawn from her Adelaide Bank account on 15 November 2000.
The plaintiff induced the defendant to sign the withdrawal slip at a time when she was recovering from surgery and was on painkillers.
The defendant, in her counterclaim, has not sought to recover the $2,300.00 obtained by the plaintiff. Apparently, the reason why the defendant has not sought to recover the $2,300.00 originally borrowed by the plaintiff is that the monies were used to buy a television, stereo and DVD player which the plaintiff gave to the defendant and the defendant retained when the plaintiff was subsequently evicted from the defendant’s house.
As I understand it, evidence of this nature was led as background to the subsequent financial dealings between the plaintiff and the defendant.
The defendant next referred in her evidence to the loan transaction which forms the basis of her claim for injunctive relief.
Shortly after the defendant came home from hospital, the plaintiff informed her that he had organised a loan through the Commonwealth Bank and he asked her to guarantee that loan. He asked her to go to the bank to sign the necessary papers. It is not clear, but it seems that the defendant reluctantly agreed to guarantee the loan. She attended with the plaintiff at the bank premises and there met with a bank officer who produced certain documentation. That documentation included a Personal Loan Application, a copy of which is Exhibit D3. The form provides for a description of the borrowers and seeks various details about them. The first borrower shown on the application is the plaintiff. The amount of the proposed loan was $15,000.00 and there was a request that the proceeds of the loan be paid into a Commonwealth Bank account which I infer was the bank account maintained by the plaintiff because the defendant said that the account described in Item 17 of the Personal Loan Application relating to the plaintiff was not her account.
The second part of the loan application was made out in the name of the defendant. At the commencement of the form there is the heading “Additional Applicant/Guarantor details”. Immediately under that heading Item 1 requires the person filling out the form to designate whether they are an additional applicant or a guarantor. The defendant said that when this form was presented to her she ticked Item 1 to designate that she was to be a guarantor. She said (at T35/33):
“After I filled out the papers and I ticked as a guarantor Mr Martin, I can’t remember exactly what he said but he said something about it and then mentioning a joint loan and I said but I’m only supposed to be a guarantor and the bank officer said, ‘well, it means exactly the same thing, it’s got the same outcome and this is the way we normally process loans nowadays’. Then Mr Martin said something about, being a joint borrower will be in your benefit anyway because you’ll get a very good credit rating out of this. The bank officer said something to that agreement as well, in agreement with that.”
As a result the tick indicating that the defendant was to be a guarantor was crossed-out and a tick was placed in the section which described the defendant as an additional applicant for the loan. The second part of the loan application form was signed by the defendant and dated 21 November 2000.
The defendant explained that she initially put the tick in the box describing her as a guarantor because the plaintiff had previously told her that he wanted her to guarantee the loan and that that had been arranged with the bank.
By letter dated 22 November 2000, the Commonwealth Bank forwarded to the plaintiff, with a separate letter of the same date to the defendant, a copy of a consumer credit contract. The copy received by the plaintiff appears to have been signed by the defendant. The copy received by the defendant from the bank is unsigned. The defendant did not receive any of the proceeds of the loan. She has not made any repayments in respect of the loan. She said that the plaintiff had agreed to accept the responsibility for repayment of the loan and this is consistent with what the plaintiff has stated at paragraph 4(d) of the handwritten statement of claim filed by him. Paragraph 4(d) is as follows:
“The plaintiff was to make all loan repayments in respect of the Commonwealth Bank loan, which was taken out on the 22nd day of November 2000.”
By letter dated 2 January 2002 (Exhibit D5), the Commonwealth Bank wrote to the defendant advising her that there had been default in respect of the loan. The arrears amounted to $981.30. (The monthly instalments were $490.65). The letter demanded that the arrears be paid. The defendant was advised that if the arrears were not paid the bank would be entitled to recover the whole of the balance due under the loan and that legal proceedings might be commenced against her for the recovery of the outstanding balance. She was further advised that the balance of the loan then due as at 2 January 2002 was $11,188.83.
The defendant instructed solicitors to respond to the bank’s letter. A copy of the solicitors’ letter in reply is Exhibit D6. Part of the letter is as follows:
“Our client understood that she was simply going to be a guarantor under the loan but when she attended at the Commonwealth Bank the documents were drawn up differently as a joint loan. Despite that, the loan officer assured our client that even though the loan was in effect a joint loan between herself and Mr Martin, she would in effect be only acting as guarantor. She was not advised to obtain legal advice before signing the document.”
On behalf of the defendant the solicitors denied that she was liable for any of the payments under the loan.
The defendant next gave evidence relating to her claim for damages amounting to the cost of repainting the bathroom in her house.
On the defendant’s return from hospital in November 2000, she found that the plaintiff had made preparations to paint the interior of the house. Furniture and books had been shifted and paintings removed from walls. In addition repair and sanding work had been carried out on the paintwork in the bathroom. Photographs of the state of the bathroom have been tendered and are Exhibit D7.
The defendant has sought to recover the cost of repainting the bathroom. Two quotes have been obtained, one for $200.00 and the other for $280.00. The latter includes the cost of paint whereas the former does not. The two quotations are Exhibit D8. I am unable to find in favour of the defendant in respect of this aspect of her counterclaim. It is clear from her evidence that she had, in a general way, agreed to the plaintiff performing work at her premises, including the work in the bathroom. The defendant said that when she was in hospital the plaintiff told her that he was going to repaint the whole house as a thank you for taking him in and allowing him to stay at her home. She said that he started doing the sanding and preparation work in relation to the bathroom a couple of days after she came home from hospital but he never finished the work.
I cannot see that what the plaintiff did amounted to a trespass which would give rise to a claim in damages. In addition there does not appear to be any contractual or other basis supporting this aspect of the defendant’s counterclaim.
Towards the end of December 2000 the plaintiff told the defendant that it would take him longer than expected to obtain enough money for a bond and rent and to pay for furniture so that he could provide his own accommodation. He asked the defendant if he could live at her house “on an extended temporary basis” (T44/9). The plaintiff said that he did not want to pay board because he was trying to save money. He asked if he could remain at the house on the basis that he did maintenance work around the house. He also offered to carry out improvements to the house where he saw the need for same. He stated that the work would be done at no expense to the defendant instead of making a payment for board. The plaintiff offered to pay for his own food and for his dog’s food and that he would also pay money towards his share of the electricity, gas and telephone. He offered to pay for excess water. The defendant agreed to let the plaintiff to continue to board at her house on this basis. It is this agreement which forms the basis of some aspects of the defendant’s counterclaim to which I will refer later in these reasons.
Evidence was also called in relation to increased water and power use whilst the plaintiff was living at the premises but these extra costs have neither been quantified nor claimed.
During the course of her evidence the defendant referred to the agreement relating to the construction of the shed on her premises. This was the original transaction between the plaintiff and the defendant. Photographs have been tendered of the shed and the concrete floor of the shed. It is clear that the concrete floor has been wrongly constructed in that the concrete slopes inwards and rainwater flows into the shed. In addition, the doors to the shed are slightly out of square. The defendant tendered the report of Mr Kabelitz, who is a building consultant. The report is Exhibit D19. He refers to the garden shed and to the inadequacies of the concrete floor. He has stated that the vertical alignment of the shed is out of plumb and he has identified defects in the cladding and the screw holes in the cladding. However, no evidence has been called as to quantify the costs of remedying the defects in the shed and the shed floor. Mr Brohier submitted that the proper measure of the cost of repair might be regarded as about the same amount that the plaintiff agreed to construct the slab and the shed, namely about $300.00. I cannot accept this submission. It is tantamount to saying that the contract price is recoverable because there has been a total failure of consideration. This is plainly not the case. There are defects in the shed which need to be remedied, but in the absence of evidence as to the cost of such remedy no damages can be awarded under this heading other than nominal damages.
As part of the arrangement for doing work around the house in exchange for board, the plaintiff dismantled a fence at the north-western corner of the defendant’s house and rebuilt another fence in its place. The fence was at a point that it had a gateway at one end of it. That gateway was retained in the work carried out by the plaintiff.
The plaintiff also constructed a fence and gateway at the southern boundary of the defendant’s house. Both of these jobs were the subject of examination by Mr Kabelitz and, in addition, photographs of the completed work were tendered. Mr Kabelitz’s view, which I accept, was that the work was quite sub-standard and would need to be redone. Quotations for the cost of this remedial work (Exhibit D18) have been tendered. One quote is for $4,106.90 and the other is for $2,925.60. The quote for the lesser amount is itemised and, consequently, it is possible to make some assessment as to the reasonableness of the quote.
In constructing the fencing work referred to in a shoddy manner, I am of the view that the plaintiff breached the contract he had with the defendant for the performance of maintenance work and improvements to the defendant’s house in exchange for board. I am satisfied that the proper cost for rectification of the shoddy work is the sum of $3,000.00.
During the course of her evidence the defendant referred to having incurred a cost of some $320.00 to have rubbish removed from the premises. This is not a claim included in the defence and counterclaim and it would be inappropriate to permit the defendant now to pursue the claim in these proceedings given that the trial proceeded in the absence of the defendant.
In early 2001 the behaviour of the plaintiff changed. Up to that time the plaintiff had been quiet and retiring. However, gradually during the first half of 2001 the plaintiff’s manner changed. The defendant assisted him with preparing advertising leaflets in respect of his business. He became critical of the defendant in relation to that work. He became unpleasant to her if she reminded him that he had not paid for food and like expenses.
The defendant recalled one occasion when she broached the question of payment towards household expenses. The plaintiff became very angry and started shouting. He resorted to foul language. He adopted an aggressive stance towards the defendant who became frightened. This altercation took place outside the house. When the plaintiff became threatening the defendant moved inside.

About an half hour later the plaintiff opened the backdoor and threw two $50 notes at the defendant and said “There you are, don’t you bother me again and when I get my tax return I will pay everything I owe you in a lump sum”. However, no payment was subsequently made.
A couple of months later, when the defendant had returned home from choir practice, she saw that the plaintiff was affected by alcohol and marijuana, both of which she could smell on his person. The defendant went to go past through the backdoor when the plaintiff pushed past her into the house. The defendant said (T73/38):
“[He] went first into the lounge room and then started yelling about the fact that he was supposed to be the only person in the house that ever did any work, and he was using four letter words and swearing and yelling, and he came storming back out and started standing there looming over me, yelling and shouting at me, and by this stage you couldn’t see his eyes. His eyes were just like two big dark red balls of blood and his face was white and his jaw was all sticking out and he made himself as big as he could and he was shaking his fists at me and going on and yelling, and my son came out of his room, and tried to intervene and he started yelling and abusing and terrorising my son as well, and I tried to defuse the situation by getting my son to leave and go to his room and I was going to back off away from it as well, and when my son went to his room he followed him in there and stood in the doorway and was shouting and yelling and shaking his fists at him and threatening, and then after that he came back out and he went into the lounge room, and just passed out, went to sleep ...”
It is the defendant’s case that this incident constituted an assault upon her person by the plaintiff. No battery has been alleged but the defendant says that she has suffered psychological consequences as a result of the alleged assault.
It is necessary to identify the assault in respect of which damages have been claimed.
Assault is both a tortious and criminal act. In Smith and Hogan, Criminal Law, 8th Edition, the learned authors deal with the actus reus of assault. They say (at page 413):
“The typical case of an assault as distinct from a battery is that where D, by some physical movement, causes P to apprehend that he is about to be struck.”
Later it is said:
“There may be an assault although D has no means of carrying out the threat. The question is whether he intends to cause P to believe that he can and will carry it out and whether P does so believe.”
These comments call for a consideration of the states of mind of both the offender and the victim. The offender must intend to cause a certain apprehension on the part of the victim and the victim’s mental state is that such apprehension is experienced.
In Rozsa v Samuels [1969] SASR 205, Hogarth J said (at 207):
“A person is guilty of an assault if he unlawfully displays force against another in such a way that he creates in the mind of that other the belief that force is about to be used against him, provided he intended to create such belief. The gist of the offence is the creation of a fear in the mind of the person assailed that unlawful force is about to be used against him.”
The assault may be perpetrated recklessly by the offender: R v Venna [1976] QB 421.
In Smith and Hogan, Criminal Law, the learned authors state (at 419):
“The mens rea of assault is an intention to cause [the victim] to apprehend immediate and unlawful violence, or recklessness whether such apprehension be caused.”: R v Savage [1991] 4 All ER 698 at 711.
The approach taken in the cases to the requisite mental element in criminal proceedings allow for some variation. It is necessary to examine how the principle is formulated in tort law.
Professor Fleming in The Law of Torts, 9th Edition, said (at 31):
“Since the gist of assault lies in the apprehension of impending contact, the effect on the victim’s mind created by the threat is the crux, not whether the defendant actually had the intention or the means to follow it up. The intent required for the tort of assault is the desire to arouse apprehension of physical contact, not necessarily to inflict actual harm. ... It is sufficient if the threat would have aroused an expectation of physical aggression in the mind of a reasonable person not afflicted with exaggerated fears or peculiar and abnormal timidity.” (Footnotes omitted).
In my view, where a claim in tort is made, the requisite mental element on the part of both the plaintiff and the defendant are those stated by Professor Fleming. Put another way, it is sufficient to establish that the plaintiff intended to do the acts which created the relevant apprehension on the part of the defendant. It is not necessary to prove that the plaintiff intended actually to harm the defendant.
Applying these principles to the facts as I have found them, I consider that the aggressive stance taken by the plaintiff towards the defendant and the words that he uttered at the time the stance was taken, taken in combination with the generally aggressive behaviour during this episode, were intentional acts on the part of the plaintiff and that they created a fear in the defendant that she might come to physical harm. Consequently, I find that that episode constituted an assault upon the defendant by the plaintiff.
Given that the claim for damages for assault is part of the assessment of damages which arises because the plaintiff has not attended to defend the counterclaim, I have proceeded to these specific findings merely to identify the nature of the assault in respect of which damages have been claimed.
The plaintiff also verbally abused the defendant’s son. The situation was such that the defendant and her son barricaded themselves in their respective bedrooms. On the following day the defendant told the plaintiff that he would have to leave. He then became abusive towards her. She said (T 75/9):
“At that stage he just exploded and he said ‘How dare you do this to me’, and ‘you’ve killed me’. ‘How dare you try and throw me out of your house’, he was using a lot of swear words and that as well and then I went inside to get away from it and then he came and he threw the back door open and he screamed at me ‘I’m going to totally destroy you. I’m going to ruin you. I’m going to make sure you lose your house and everything you own and I’m going to absolutely ruin you’, virtually ‘you’re dead’.”
The plaintiff continued being abusive towards the defendant during the course of the day and later in the day told her that he was not leaving the house and that he would remain there for a further six to eight weeks.
On the following day the plaintiff advised the police of her situation and eventually was able to obtain the assistance of police to evict the plaintiff.
The eviction of the plaintiff occurred on 1 August 2001. After he had been evicted he rang the defendant on several occasions that evening. The plaintiff was abusive towards her, to the extent that she eventually unplugged the telephone. The plaintiff persisted with telephone calls the following day. On 7 August 2001 the defendant obtained a restraining order against the plaintiff in the Magistrates Court. Having given the evidence just referred to, the defendant was asked what affect dealings with the plaintiff had had upon her. I quote from the transcript (T80/25):
“QWhat occurred to you at the hands, putting that figuratively of Mr Martin, what effect did that have on you.
AWell, it’s turned me into a fearful person and I wasn’t ever a fearful person. I could go out walking at any time of the day or night without being afraid. I no longer go out for a fitness walk because I know that he knew I used to go walking, I’m afraid he might be out there somewhere. I’m always watchful at home. I get concerned if a car goes past very slowly. If I go out anywhere I have to be aware of my surroundings at all times. If I go to Colonnades, if I’m on my own, I often try and go with somebody, it’s the local shopping, I’m always aware of where the security cameras are in case he is down there and approaches me. It’s affected my health in that I have to take medication so I can digest my food properly and I’m also on depression, anxiety medication.
QWith the question of digesting your food, did you start to have that problem while Mr Martin was in the house.
AYes, I did.
QWhen was that.
AAbout the last two months when he became very moody and unpleasant and antisocial and aggressive, that actually started then, not constantly, but every so often you’d eat and go to swallow your food and it would get caught halfway down and you just couldn’t move it, and it was a very unpleasant situation. After he was evicted that was happening all the time and now I’m on medication to prevent that.”
In support of her claim for damages for assault the defendant tendered the report of Dr Fitzgerald dated 24 January 2002. I shall refer to that report shortly.
The defendant said that the conduct of the plaintiff in the days preceding the plaintiff’s eviction from the house affected her significantly. She said that it made her terrified. She was very frightened of the plaintiff. She said that if he had not been abusive to her she would not have needed to obtain medical treatment. She said that she went to the doctor on 5 August. She had had trouble sleeping and she was not eating. It is apparent from her evidence that the fear she experienced and the resulting sleeplessness and inability to eat, arose from the occasion when the plaintiff assaulted her upon her return home from choir practice. She explained that although she was under stress in the time leading up to the assault, she was able to cope. But after the assault her condition deteriorated and she was unable to cope. The position was exacerbated by the telephone calls made by the plaintiff after he was evicted from the house. On occasions he telephoned her as many as sixty times a day. During the course of those conversations he made threats to her that he was going to destroy her and ruin her. She eventually changed her telephone number.
When she saw her general practitioner she was prescribed sleeping tablets and medication which assisted with her eating. She is undergoing counselling from the Victims of Crime Association. She attends approximately once every three weeks.
The relevant part of Dr Fitzgerald’s report is as follows:
“She presented to Dr Lau on the 5/8/01 with severe stress due to her boarder. He prescribed temazepam 10-20mg nocte. She presented to me on the 27/8/01 still with severe stress and was given further temazepam. She remains severely stressed.”
That report was prepared on 24 January 2002.
Having considered the evidence of the defendant and of Dr Fitzgerald, I find that the assault which took place just prior to 1 August 2001 has markedly affected the well-being of the defendant. She suffered stress and resulting sleeplessness and difficulty with eating. She has become nervous about her safety. It is not clear whether the sleeplessness and difficulty of that type extended much beyond the end of August 2001 but I am prepared to infer that that condition persisted at least until September 2001. Thereafter she has remained a nervous individual and has a general fear for her safety when she is out of her home and unaccompanied. I consider the nature of the assault, although not involving physical injury, constituted a severe threat to her continued well-being and that stress from which she undoubtedly has suffered has continued to the present. I have no means of knowing when or if this condition will abate but I think it probable that, at the very least, her nervous condition will remain for several months into the future. I think that the conclusion of these proceedings will assist her in overcoming the effects of the assault.
Given the nature of the evidence before me both from the defendant and from her medical practitioner, I must approach the question of damages conservatively because the evidence has not enabled me to form a precise insight into the defendant’s condition and its duration. In all the circumstances I consider that an award of $5,000.00 damages is appropriate.
I now turn to the claim for declaratory and injunctive relief. I find that prior to the joint loan from the Commonwealth Bank being obtained in November 2000, the plaintiff and the defendant had agreed as between themselves that the plaintiff would be responsible for all repayments of the loan and that the defendant would merely guarantee the loan.
This situation is similar to the facts in Watt v Mortlock [1964] 1 Ch 84, a decision of Wilberforce J. In that case the plaintiff and the defendant jointly covenanted with the bank to repay the balance of the defendant’s account and the plaintiff charged her freehold cottage with payment. The agreement provided that as between the plaintiff and the defendant on the one hand and the bank on the other hand, the plaintiff and the defendant would each be principal debtors, but as between the plaintiff and the defendant, the defendant would be the principal debtor and the plaintiff a surety. The defendant failed to comply with demands for repayment and the bank gave notice to the plaintiff that it would enforce its security. The plaintiff pursued a quia timet action in which she claimed a declaration that she should be exonerated from liability by the defendant paying the bank the balance due and she sought an order that the defendant make the appropriate payment and secure a cancellation of the charge given by her.
The court held that the plaintiff was entitled to apply for quia timet relief against the defendant, who was the principal debtor and who neglected and refused to pay the creditor. Wilberforce J referred to some of the authorities, including Ascherson v Tredegar Dry Dock and Wharf Company Limited [1909] 2 Ch 401. In that case, at the instance of a surety, the court made an order that the defendant debtor, which was a company, must pay the amount necessary to the creditor so as to exonerate the surety from the liabilities under the guarantee.
Having reviewed the cases, his Lordship commented on Ascherson as follows (at 88):
“It seems that in fact the principal debtor, the company, must have been regarded as in possession of assets sufficient to enable it to pay the debt if it wished to do so.”
Having referred to other authorities, his Lordship said (at 88):
“Upon those authorities, it seems to me that the court should grant a surety in the position of the present plaintiff, the relief which is asked, but in so doing I desire to guard myself against any suggestion that the order to pay can be enforced in any specific manner. It seems to me that the right course is to do as was done in Ascherson’s case, which is to add to the relief claimed a direction that in the event of the defendant failing to make the payment which is ordered the plaintiff would be at liberty to apply. On such application the court will then consider, in the light of the facts and, in particular, the defendant’s circumstances, what, if any, further relief may be granted.”
This approach was followed by the Supreme Court of Western Australia in Rogers and Ors v Australia and New Zealand Banking Group Ltd and Tantalex Ltd [1985] WAR 304.
In both the English and the Western Australian decisions, the Court was astute to ensure that the debtor against whom an order for payment was to be made had the means to comply with the order. Consequently, the Court gave liberty to apply on the question of enforcement of the order, thereby reserving the right to ensure that, in the case of an individual debtor, the debtor did not become liable for imprisonment for contempt. The notion that a debtor might be imprisoned for failure to pay a debt has been abandoned by most if not all common law jurisdictions.
In this matter, there is no evidence that if an order is made directing the plaintiff to pay the amount outstanding to the Commonwealth Bank, he has the means to comply with such an order. Indeed, the inference might well be drawn from the evidence given by the defendant about what the plaintiff told her as to his financial position that he does not have the means to pay the amount owing to the bank. In addition, the cases, where an order is to be made, proceed either on the finding or the assumption that the guarantor, if called upon by the bank to pay the amount of the debt, is legally obliged to do so. In this case, the relationship between the defendant and the Commonwealth Bank is not that of creditor and guarantor but rather that of lender and joint borrower. It is by no means clear that the bank would be able to enforce the loan agreement against the defendant because she was clearly mislead by a bank officer as to the nature of the transaction she was entering into when the loan agreement was negotiated. The bank is not a party to these proceedings (but could have been joined as a defendant to the counterclaim by the defendant) and there is accordingly no means by which I may determine the question of whether or not a binding loan agreement between the bank and the defendant was entered into. It is that circumstance which, in my opinion, precludes the defendant from availing herself of the quia timet action that might otherwise be available to a surety. In arriving at that conclusion I have taken into account that in Watt v Mortlock (supra) the relationship between the bank and the surety was that of lender and joint borrower but I think that that case may be distinguished because there is no question that the surety/joint borrower in that case had entered into a binding transaction with the bank.
For these reasons I have come to the conclusion that the application for injunctive relief must be refused.
The defendant has established some of her claim for damages on the counterclaim but only to the extent of recovering damages in respect of the fencing and damages for assault. These amounts are respectively $1.00, $3,000.00 and $5,000.00.
I propose to make the following orders:
1That the plaintiff’s claim against the defendant be dismissed.
2That judgment be entered on the counterclaim in favour of the defendant against the plaintiff for damages in the sum of $8,001.00 plus interest.
I will hear submissions on the question of interest and costs.

[2003] SADC 11

7 February 2003