Mathews v National Australia Bank Ltd - [2004] WASCA 177

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: MATHEWS -v- NATIONAL AUSTRALIA BANK LTD [2004] WASCA 177

CORAM: STEYTLER J
TEMPLEMAN J
ROBERTS-SMITH J

HEARD: 17 MAY 2004

DELIVERED : 17 AUGUST 2004

FILE NO/S: FUL 78 of 2003

BETWEEN: DOUGLAS EDWARD MATHEWS
Appellant
AND
NATIONAL AUSTRALIA BANK LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram   :MASTER NEWNES
File Number             :  CIV 1624 of 2002

Catchwords:

Contract - Bank and customer - Bank allowed appellant to draw on an account into which he had deposited cheques, before those cheques were cleared - Appellant charged and convicted of fraud - Convictions quashed by Court of Criminal Appeal - Appellant alleged bank allowed his account to go into overdraft in breach of contract between appellant and bank - Claim for loss of earnings and personal income - Summary judgment for bank - Appellant not able to sustain claim for the pleaded loss or damage from the alleged breach - No causal relationship between alleged breach of contract and loss of earnings and personal income - Whether Master erred in ordering summary judgment - Turns on own facts

Malicious prosecution - Appellant alleged bank made complaint to police to cover up its own breach of banking arrangements between appellant and bank - Summary judgment for bank - No evidence to support allegations that bank acted for improper purpose or was otherwise malicious - Whether Master erred in ordering summary judgment - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant: In person
Respondent: Ms P E Cahill

Solicitors:

Appellant: In person
Respondent: Jackson McDonald

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

Beckham v Drake (1849) 2 HL Cas 579
Brown v Hawkes [1891] 2 QB 718
Chappel v Hart (1998) 195 CLR 232
Fitzgerald v Penn (1954) 91 CLR 268
March v E & M H Stramare Pty Ltd (1991) 171 CLR 506
Mathews v The Queen (2001) 24 WAR 438
Wilson v United Counties Bank Ltd [1920] AC 102

Case(s) also cited:

AL Underwood Ltd v Bank of Liverpool [1924] 1 KB 775
Bank of New South Wales Ltd v Barlex Investments Pty Ltd (1964) 64 SR (NSW) 274
Barclays Bank Ltd v Astley Industrial Trust Ltd [1970] 2 QB 527
Capital & Counties Bank Ltd v Gordon [1903] AC 240
Cuthbert v Robarts, Lubbock & Co [1909] 2 Ch 226
Dawson v Bank of New Zealand (1884) 5 NSWR 154
Dawson v Bank of New Zealand (No 2) (1884) 5 NSWR 386
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
In re Farrow's Bank Ltd [1923] 1 Ch 41
Joachimson v Swiss Bank Corporation [1921] 3 KB 110
Jones v Dunkel (1959) 101 CLR 298
Langdale v Danby [1982] 1 WLR 1123
Lill v Merchant Capital (WA) Ltd (1996) 15 WAR 536
National Australia Bank Ltd v KDS Construction Services Pty Ltd (1987) 163 CLR 668
Nye v State of New South Wales (2004) Aust Torts Rep 81725
Rouse v Bradford Banking Company [1894] 2 Ch 32
Sutters v Briggs [1922] 1 AC 1
Thermo King Corporation v Provincial Bank of Canada (1982) 130 DLR (3d) 256
Trobridge v Hardy (1955) 94 CLR 147
Westminster Bank Ltd v Zang [1966] AC 182

STEYTLER J: On 24 November 2000 the appellant was convicted upon four counts of fraud charged under s 409(1)(c) of the Criminal Code. His victim was alleged to have been the respondent, the National Australia Bank Ltd ("the bank"). The four counts related to cheques drawn by the appellant on a bank account kept by him in the name of Dart Base Metal Exploration. The first three counts related to cheques for $4000, $5000 and $30,000 respectively drawn on 29 December 1998. The fourth count related to a cheque for $100,000 drawn on 31 December 1998. Each of those cheques was paid into an account kept with the bank by a business belonging to the appellant and known as Mathews Drilling Services. The appellant then drew cash cheques on that account in order to fund his gambling. He was allowed by the bank to draw those cheques notwithstanding that none of the four cheques drawn on the Dart Base Metal Exploration account had been cleared. As matters turned out, none of those cheques was ever cleared, there having been virtually no money in the Dart Base Metal Exploration account in order to meet them.
At the trial of the criminal proceedings, the appellant's unsuccessful defence to the charges of fraud was based largely upon his evidence that he had assumed that sufficient funds to meet the four cheques had, by the time at which they were deposited into the Mathews Drilling Services account, been paid into the Dart Base Metal Exploration account by a man named Charles Leslie Stapleton. Mr Stapleton owed the appellant a considerable sum of money and was to have paid it into the Dart Base Metal Exploration account by 10 December 1998.
The appellant appealed against his conviction and, on 2 August 2001, the conviction was quashed by the Court of Criminal Appeal. The Court ordered that a verdict of acquittal should be entered under s 689(2) of the Criminal Code. It published its reasons on 31 August 2001: Mathews v The Queen (2001) 24 WAR 438.
Aggrieved by events which had led to his conviction, the appellant sued those whom he regarded as responsible. He did so by writ issued on 13 May 2002. The defendants were the Attorney‑General, the Director of Public Prosecutions for Western Australia, the Minister for Police, the Commissioner of Police, the respondent bank and the Bank of Western Australia. However, all of his claims, save for those against the respondent bank, were struck out.
Then, on 2 May 2003, Master Newnes awarded summary judgment in favour of the bank against the appellant, dismissing all claims brought by the appellant against the bank. The appellant contends that the Master erred in dismissing two of those claims, the first being a claim for damages for breach of contract and the second being a claim for damages for malicious prosecution. He has consequently lodged a notice of appeal to this Court accordingly.
Before turning to the judgment of the Master, and to the detail of the grounds of appeal, I should say something about the appellant's statement of claim.
The first of the two relevant causes of action pleaded against the bank was said to arise out of a contract (to which the appellant referred as "the Banking Contract") which came into effect between the appellant and the bank on about 18 January 1994, when the appellant opened the Mathews Drilling Services account at the bank's Gosnells branch. The appellant pleads that the following were written terms of that contract:
"6.1The … [bank] would provide special answer clearances on cheques deposited to the account pursuant to the Banking Contract and thereby the … [appellant] could then draw sums of money against cheques deposited on the same day as a deposit, rather than await a clearance by the … [bank] of the deposited cheques for a five day clearance period;
6.2The account would not operate in over-draft."
These terms are pleaded (par 7 of the statement of claim) to have been contained in a letter from the appellant to the bank dated 27 July 1994 (some six months after the contract was said to have been made).
In par 9 of the statement of claim the appellant pleads that the bank breached its contract with him in two respects. The first is by allowing him to cash 11 cheques (for sums totalling $87,000), drawn by him on the Mathews Drilling Services account between 29 December 1998 and 31 December 1998, without first obtaining a special answer on the four cheques deposited into that account which had been drawn on the Dart Base Metal Exploration account. The second is by allowing the Mathews Drilling Services account to "go into overdraft of $83,000 between the 29th December 1998 and the 31st December 1998".
In par 10 of his statement of claim he pleads that, as a result of these breaches, he has suffered loss and damage. He particularises this by pleading that the bank "created an indebtedness" by him to it in the sum of $83,000. He also pleads, as a particular, that the bank "wrongfully" complained to the police that he was guilty of fraud and, as a result of that complaint, caused the police and the Director of Public Prosecutions to prosecute him, leading to his conviction and imprisonment. He alleges that, as a result of the charges, conviction and subsequent imprisonment, he has suffered loss of employment, and continues to be unable to be employed, and has lost earnings to date of $427,083.
The second relevant cause of action, being that for damages for malicious prosecution, is pleaded in pars 17 and following of the statement of claim.
In par 17 the appellant alleges that, on about 4 January 1999, the bank "made allegations to the Western Australian Police Service of fraud against the … [appellant] and thereafter caused … [him] to be charged and prosecuted" on four counts of fraud. He then pleads (par 18) that, on 24 November 2000 "and relying upon the malicious representations of the … [bank]", he was convicted and sentenced to a term of imprisonment. There are extensive particulars of malice, as follows:
"18.1The … [bank] by its Officer and Debt Collection Manager one Glen Meyer contacted the Western Australian Police Service within 2 working days of the last cashing of the cheques.
18.2The said Glen Meyer spoke to Detective Sergeant Stuart Mirfin on the 4th January 1999 at a time when there had been no investigation of the circumstances giving rise the [sic] cashing of the cheques, and it was agreed between the said Glen Meyer and Detective Sergeant Mirfin that a written complaint of fraud would be made by the … [bank], and that only evidence pointing to the guilt of the … [appellant] would be produced by the said Glen Meyer.
18.3The … [bank] made written complaint to the Western Australian Police Service wrongfully alleging fraud against the … [appellant] on 5th January 1999.
18.4In its said written complaint the … [bank] failed to disclose to the Western Australian Police Service the terms of the Banking Contract or the written instructions from the … [appellant] to the … [bank] dated 27th July 1994.
18.5On or about the 5th February 1999 the … [bank] through its solicitors Jackson McDonald served the … [appellant] with a Statement of Claim in District Court Civil Proceedings (National Australia Bank Ltd vs Douglas Edward Mathews 221/1999) which alleged in part that the … [appellant] had fraudulently induced the … [bank] to cash the cheques.
18.6The … [bank] sent the WA Police Service to interview the … [appellant] on or about the 8th February 1999 after he had received the said Statement of Claim when it knew or ought to have known that the … [bank] was bound by the terms of the Banking Contract pleaded in paragraph 6.1 and 6.2 hereof, and the express purpose of sending the said WA Police Service to interview the … [appellant] was not for the purpose of the investigation of an alleged crime but for the purposes of collecting an alleged debt which the … [bank] then asserted was owing between the … [appellant] and the … [bank].
18.7On or about 28th May 1999 Detective Boxshall of the WA Police Service acting on behalf of the … [bank] and for the advancement of the … [bank's] allegations of fraud against the … [appellant], attended the … [appellant] at his home with a Search Warrant and removed certain documents, but rejected 28 items of exculpatory evidence offered by the … [appellant] to the [sic] Detective Boxshall in support of the … [appellant's] innocence."
In par 19 of the statement of claim the appellant pleads the fact of his successful appeal to the Court of Criminal Appeal and, in par 20, he alleges that the bank, in "prosecuting" him, acted without reasonable and probable cause. He relies, in this last respect, on the alleged terms of the banking contract, on the letter dated 27 July 1994 and on the fact that it was the bank's "own decision without the involvement of the … [appellant] to proceed to allow the … [appellant] to have an Overdraft whereby resulting in the … [bank] without complying with the … [appellant's] instructions to obtain special answers on cheque deposits proceed [sic] to cash the cheques".
The appellant goes on to allege (par 21) that, over a period of three years prior to December 1998, he had conducted "his" account with the bank on the basis of cashing cheques against cheques deposited to his account on the same day and (in par 22) that the bank knew or ought to have known, as a consequence of that history of operations and as a consequence of the terms of the contract, that "there was no question of fraud or fraudulent intent" on the part of the appellant.
Finally, in par 23, the appellant pleads that his "prosecution … by the … [bank] and his subsequent conviction and imprisonment" have resulted in harm to his reputation, have caused him to suffer mental and physical pain, have prevented him from continuing his employment and have caused him to incur expense in defending himself. He claims loss and damages accordingly.
That brings me to the judgment of the Master.
After reciting the appellant's pleading in respect of his claim for breach of contract (and also some other, now irrelevant, claims), the Master turned to consider submissions which had been advanced in that respect on behalf of the bank. These submissions were to the effect that the alleged breaches of contract "could at best only sound in a claim for any interest or related overdraft fees which were charged to the plaintiff and paid by him". Counsel for the bank had submitted that the appellant could not recover the value of money which, in truth, belonged to the bank and that, because the appellant's imprisonment was not causally related to either of the pleaded breaches of contract, there could be no claim for damages arising out of that imprisonment.
The Master said that in his opinion those submissions were "plainly correct". He added that it was clear that the appellant could not recover, by way of damages, the money advanced to him by the bank against cheques that were subsequently dishonoured and said that the bank had, in any event, obtained judgment against the appellant for payment of that money. He also said that he understood that the appellant had conceded this in the course of the hearing before him. Finally, in this respect, the Master said that he accepted a submission advanced on behalf of the bank to the effect that, as an undischarged bankrupt, the appellant's claim for breach of contract was vested in his trustee in bankruptcy and he had himself no cause of action in respect of it.
The Master then turned to the appellant's claim for damages for malicious prosecution. He focused, in this respect, on the pleaded particulars of malice.
As to the first particular (par 18.1), to the effect that the bank's Mr Meyer contacted the police within two working days of the last cashing of the cheques, he said that that, of itself, took the matter no further.
Next, he dealt with particulars 18.2 and 18.3, which refer to the alleged agreement between Mr Meyer and Detective Sergeant Mirfin and to the "wrongful" allegation of fraud by the bank. The Master said that there was no evidence, whether by way of inference or otherwise, of any agreement between Mr Meyer and Detective Sergeant Mirfin. He also referred to an affidavit sworn by Mirfin on 20 January 2003 in which Mirfin denied that there was any such agreement and said:
"7.To be acted upon, a complaint must be made in writing and I indicated this to Mr Meyer. Following receipt of the complaint I undertook an assessment of the file to determine if there was sufficient evidence to support the complaint and cause a criminal investigation to be instituted. That criteria [sic] was satisfied and I lodged the complaint …
8.At no time did Mr Meyer or anyone else from the Bank direct or attempt to direct me as to how the complaint ought to be investigated, what evidence ought to be offered or whether charges ought to be laid."
The Master then considered particular 18.6, to the effect that the bank had sent the police to interview the appellant on about 8 February 1999 for the purposes of collecting "an alleged debt". He referred, in that respect, to an affidavit which had been sworn on 3 February 2003 by another detective, Detective Senior Constable Boxshall. Boxshall was the police officer who had conducted the investigation which led to the charges being laid against the appellant. In par 4 of his affidavit, he says:
"I categorically deny that I was sent by the … [bank] to interview the … [appellant] as alleged in paragraph 18.6 of the … statement of claim. I did interview the … [appellant] on 8 February 1999 but it was in the usual course of my investigations. I was not directed to interview … [the appellant] by the … [bank] or any person or officer on behalf of the … [bank]."
As to particular 18.7, relating to the alleged conduct of Boxshall in executing a search warrant "on behalf of the … [bank] and for the advancement of the … [bank's] allegations of fraud against … [the appellant]", the Master again referred to Boxshall's affidavit and, in particular, to pars 5 and 6 thereof, which read as follows:
"5.As to paragraph 18.7 I did conduct a search of the … [appellant's] premises at Lot 30 Phoebe Street, Southern River in company with Detective Senior Constable David Michael Hawley on 28 May 1999. I d [sic] not conduct a search of the … [appellant's] premises at the request of or on behalf of the … [bank]. I admit removing certain documents. I did not, as alleged by the … [appellant], reject 28 items of exculpatory evidence offered by the … [appellant] subsequent to the execution of the search warrant.
6.I have been shown a letter purporting to be from the … [appellant] to the … [bank] and dated 27 July 1994, a true copy of which is annexed … . I cannot recall ever seeing that letter before. At no time during the course of the investigation, including the execution of the search warrant and the video taped record of interview on 28 May 1999, did the … [appellant] produce a copy of that letter to me or refer to any letter containing those instructions. However, during the course of the video taped record of interview the … [appellant] stated to me that he had no overdraft facility with the … [bank]."
The Master went on to say:
"There is no evidence, nor, in my view, any basis for any inference to be drawn that the … [bank] contributed to or became involved in the police inquiry or in the decision to charge the … [appellant] in the way the … [appellant] alleges or in any other way beyond that of a conventional complainant. There is no evidence to suggest that the police officers conducted the inquiry other than in the way they chose to conduct it and independently of the … [bank], and the decision to charge the … [appellant] was made on the basis of the inquiries that they made in that manner. There is no evidence to support the allegation that there was any agreement between the police officers concerned and any officer of the … [bank] in the manner alleged by the … [appellant]."
The Master then returned to particular 18.4, in which (as will be apparent) the appellant had alleged that the bank failed to disclose to the police the terms of the banking contract or (which, relevantly, comes to the same thing) the written instructions which he had given to the bank in his letter dated 27 July 1994. The Master said, in that regard, that it appeared more clearly during the course of the hearing that, at the heart of the appellant's case, lay a contention that he was charged and convicted because the bank made its complaint to the police without disclosing to the police vital evidence, in particular the letter dated 27 July 1994. He went on to say:
"One of the difficulties with that contention is the … [appellant] says that at the time he had a copy of the letter and the other evidence which he says proved that he had not committed fraud and that during the course of the police inquiry he endeavoured to produce it to Detective Boxshall who refused to accept it. I mention again that Detective Boxshall denies that and he denies that the … [appellant] ever referred to the letter.
Be that as it may, at least absent some sort of conspiracy between the … [bank] and the police, the failure of the … [bank] to refer to such material at the time of the complaint could not be said to have caused the … [appellant] to be charged. For the reasons I have given, there is simply no evidence of any conspiracy or agreement in relation to the investigation by the police into the matter."

The Master observed that, on the appellant's version of events (denied by the police officers), what led to the bringing of the charges was the failure of the police officers to have proper regard to the letter and to the other allegedly exculpatory evidence. He said:
"The … [appellant's] position with regard to his ultimate conviction is more difficult still. As I have said, the … [appellant] had and had always had in his possession the material which he says proved his innocence but it was never put before the jury. He said in the course of this hearing that he produced it to his lawyer before the trial but his lawyer told him that it was unnecessary to rely upon it. Accordingly, even if the … [appellant] were able to establish that in making the complaint to the police the … [bank] had not brought forward that evidence or parts of it, the effect of that had long passed. On the … [appellant's] version of events he was convicted not because that material had not been produced at the time the complaint was made, but because his lawyer incorrectly told him that the material was unnecessary for the criminal trial."
Next, the Master reiterated that, in his opinion, it was clear that there was no evidence to support the existence of an agreement or arrangement between the bank and the police of the kind alleged and that allegations to that effect were unfounded. He said that, even if it was the case that the bank failed to direct the attention of the police to the letter, and any other material, at the time the complaint was made, that had no connection with the fact that the appellant was ultimately convicted, that material having always been in the appellant's possession and able to be used by him, if he saw fit.
For all of these reasons, the Master said, the appellant's claims could not succeed. He consequently dismissed them.
The appellant raises two grounds of appeal. Both are supported by lengthy particulars. Ground 1 contends that the Master erred in finding that the appellant has no cause of action for breach of contract and that the loss he claims was not caused by the breach. So far as they are material, the particulars to that ground contend that, although some heads of loss and damage may have vested in the appellant's trustee in bankruptcy, the claim in respect of loss of earnings and personal income did not so vest and should have been found to have been a reasonably foreseeable consequence of the breaches of contract, the bank having accused the appellant of fraud and having laid a complaint with the police.
In ground 2 the appellant alleges that the Master erred in finding that the appellant could not make out an essential element of his cause of action for malicious prosecution, namely that the bank had acted maliciously in setting the criminal process in train. The particulars of that ground contend (in particular 2.1) that the malice consisted of the fact that the bank "was motivated by the desire of its officers to cover‑up the breach of the banking arrangements between the Appellant … and the Bank". The appellant also contends, by particular 2.1, in effect that it was material to the issue of malice that the bank's complaint was made speedily, that there was no investigation before the complaint of fraud was made by the bank, that a written complaint was made by the bank after the appellant had spoken to Mr Meyer and "alerted him to the terms of the banking arrangements between … [the appellant] and the Bank" and that the bank failed "to provide all the material to the Police which would have pointed to the Appellant's … innocence".
In particulars 2.2, 2.3 and 2.4, the appellant contends that the Master misdirected himself when he took into account what is said to have been the irrelevant consideration that the exculpatory material referred to by the appellant was always in his possession. He refers, in this respect, to the Master's finding that there was no connection between the failure of the bank to supply that material to the police and the conviction. He also asserts that the Master "went behind the fact of the quashing of the conviction by the Court of Criminal Appeal" and that it had not been "seriously contended by the … [bank] that the Bank was the effective prosecutor". He contends that the "proper inquiry" was one in respect of the bank's motive.
Lastly, by particular 2.5, the appellant contends that:
"There were serious questions of fact in issue in the consideration of motive, and even if the conspiracy theory may not have been made out on the affidavit material as pleaded, it was still open to proof by the Appellant …, and ought not to have been decided on affidavit material, but left to the decision of the trial judge."
Before dealing with these grounds I should mention that the appellant sought to place before us an additional affidavit. This was sworn by him on 7 January 2004, many months after the Master made his decision. The affidavit, which was objected to in its entirety by counsel for the respondent, makes a number of allegations to the effect that false evidence was given at the appellant's trial and also on behalf of the respondent in these proceedings. The appellant also there alleges that relevant and exculpatory evidence has been suppressed by the bank.
As I understood the appellant's contentions in these respects, they amount essentially to three propositions, as follows:
1.Evidence has previously been given (whether at or since the appellant's trial) to the effect that the appellant had no authority to overdraw the Mathews Drilling Services account when he did, in fact, have that authority.
2.Evidence which disclosed the existence of that authority was suppressed by the bank, the most important item of evidence in that respect being a bank file note which was exhibited to an affidavit filed in the summary judgment proceedings and sworn by Mr Stephen Groves, a bank officer. This file note was prepared by another bank officer, Mr D Pickard, and was dated 31 December 1998.
3.The bank was embarrassed by its knowledge that it had authorised the appellant to overdraw the Mathews Drilling Services account in circumstances, amounting to a breach of its agreement with the appellant, in which the appellant did not know of that authority or that the account was in overdraft. It consequently sought to conceal what it had done by suppressing evidence of the existence of the authority and by having the appellant falsely charged with fraud.
As to the first of those propositions, it is true that evidence has previously been given by bank officers, both at the appellant's trial and since, that the appellant had no authority to overdraw the Mathews Drilling Services account. However, it is common cause that the appellant was never expressly authorised to overdraw that account with the bank and, indeed, Mr Mathews' case is, as I have said, that he had told the bank, in his letter dated 27 July 1994 (of which the bank had no record), that he did not want an overdraft. Consequently, in asserting that he was authorised to overdraw the account, the appellant relies only upon the fact that the bank allowed the account to become overdrawn and upon Mr Pickard's note. That note reads as follows:
"A/C 6466 617998157 IS IN PROCESS OF BEING TREATED AS SUSPECT FRAUD.
WE REC'D ADVISE [sic] LUNCH TIME TODAY OF LARGE INWARD DHNR [presumably 'dishonour'] OF $30K BANKED TO A/C 29/12. ON INVESTIGATION, BALANCE SOME $65K CR WITH $130K U/FUNDS. IMMEDIATLEY PLACED HOLD ON $30K AND INPUT X. DURING THIS TIME NATASHA AT 6466 RANG AND ASKED IF WE WANTED IMMEDIATE SPECIAL ANSWER ON $100K CHQ THAT HAD BEEN BANKED BY CUSTOMER THAT DAY. ANSWER CAME BACK REFER TO DRAWER. BOTH CHQS DRAWN ON DART BASS [sic] METAL EXPLORATION, BANKWEST MADDINGTON, AND APPEAR TO HAVE BEEN SIGNED BY OUR CUSTOMER, DOUGLAS MATTHEWS [sic].
THEN IMMEDIATELY STOPPED A/C TO ALL OPERATIONS, INPUT W.
REFERRED TO CREDIT MGR GLENN, WHO CONFIRMED THE ABOVE ACTIONS. WE HAVE ATTEMPTED RETURN OF 2 CHQS DD 30/12/98, TOTALLING $15K, HOPEFULLY NOT CASHED. TODAY $44K HAS BEEN WITHDRAWN, PRESUMABLY CASHED AS ALREADY PROCESSED. I HAVE AUTHORISED $200, NO NOTES HELD FOR REMAINING ITEMS. EVEN THOUGH AT TIME THERE WAS NO X OR W, WDL ALLOWANCE OF $10K HAD BEEN EXCEEDED BY THE 2ND AND SUBSEQUENT CHQS AND AUTHORISATION SHOULD BE OBTAINED. NARRATIVE PLACED ON 3200 SUSPECT FRAUD.
GLENN ASKED WHY I HADNT [sic] INPUT W WHEN RETURNED LAST ITEM. I DONT [sic] REMEMBER CONSIDERING IT, POSSIBLY BECAUSE CUSTOMER EST 18/1/94, T/OVER FOR LAST QUARTERS STARTING WITH 9/98 $34K $27K $56K AND $32K WITH NO ADVERSE NOTES OTHER THAN THE 1 RECENT DHNR. EXCESS REFERRED TO BRANCH OF $1696 11/98 WAS FIXED IN CASH THAT DAY. I RETURNED ANOTHER CHQ 9/12 THEN 29/12. BOTH TIMES THIS BOUGHT [sic] A/C BACK TO CREDIT AND HAD CONSIDERABLE USAGE OF DEBITS AND CREDITS.
HAVE RUNG AND LEFT MESSAGE ON BH. MO IS DISCONNECTED.
MATTER MAY BE REFERRED TO FRAUD SQUAD.
NATASHA ONFORWARDING [sic] FILE.
D PICKARD 31/12/98".
While there was no evidence before the Master as to the meaning of the phrases "input X" and "input W", other evidence (the admissibility of which is challenged by the bank) now relied upon by the appellant is to the effect that an "X" or a "W" is a warning to any bank officer in respect of the operations of the account. An "X" indicates that cheques have been deposited which have yet to be cleared. A "W" indicates that the account is "weak" and that it should consequently not be allowed to become overdrawn and that funds should not be drawn against uncleared cheques. Both of these warning symbols are said to be internal indicators, in the sense that they are for bank use only, so as to assist bank officers in the exercise of their discretion whether or not to permit uncleared cheques to be drawn against.
In my opinion, none of this evidence, even if it is regarded as admissible, lends any assistance to the appellant. The fact is that he was never authorised by the bank to overdraw the Mathews Drilling Services account. Rather, what happened was that, on the days in question, the bank, in the exercise of an internal discretion, permitted him, without saying anything to him in that respect, to draw against uncleared cheques in the hope or expectation that those cheques would be met. That is a rather different thing from expressly authorising the appellant to overdraw funds and, as I read their evidence, it was only in this last sense that the bank officers had said that the appellant was not so authorised.
As to the second proposition, there is no evidence of any deliberate suppression of evidence by the bank (or, indeed, of any suppression at all by it of evidence material to the appellant's prosecution) and the appellant's assertions in this respect are only that and can be given no weight. The evidence principally relied upon by the appellant in that respect, the Pickard file note, was, as I have said, produced by the bank in the summary judgment proceedings. On the face of it, that production is inconsistent with any deliberate prior suppression of that note which, as I have said, lends no assistance to the appellant in any event.
As to the third proposition, I have said that, while the appellant was never authorised by the bank to overdraw the Mathews Drilling Services account, the bank had, in the exercise of its discretion, allowed funds to be drawn by him against uncleared cheques. While it may be so that this had been done contrary to the appellant's instruction, given in his letter dated 27 July 1994, that "special answer clearances" should be provided on any cheques deposited into the account, there is nothing in the evidence to suggest that the bank was, at any material time, embarrassed by that fact (or even aware of it) or that it suppressed evidence in the form of the letter relied on by the appellant. I have mentioned that the bank has said that it had no record of that letter. In his affidavit, referred to above, Mr Groves (who had charge of the appellant's file since mid 1999, having then taken it over from Mr Meyer) said that he had been unable to locate the letter on the bank's file and that there was no other document, note or memo on the file which might suggest that the bank had received such an instruction. He said that he had not previously removed anything from the file and was not previously aware of the existence of the letter or of any document of similar effect. There is nothing to suggest that his evidence in any of these respects should be doubted.
Nor is there anything in Mr Pickard's note which supports the appellant's third proposition. Rather, that note appears, on the face of it, to be a frank statement of what had occurred and a genuine expression of suspicion that a fraud had been committed. There is nothing to suggest otherwise.
It is consequently unnecessary for me further to consider the affidavit dated 7 January 2004, or the three propositions to which I have referred.
That brings me back to ground 1 of the grounds of appeal, being that which challenges the Master's dismissal of the cause of action for breach of contract.
In my opinion, the Master was right to dismiss that claim, essentially for the reasons that he gave.
If it be assumed that there was a contract in the terms pleaded, and that it was breached in the respects pleaded, it is difficult to see how any of the pleaded loss and damage could be recovered by the appellant. His claim that the bank caused him to suffer loss in the sum of $83,000, being the indebtedness created on the overdrawn account, is not sustainable, given that the appellant drew out and had the benefit of that sum of $83,000, belonging to the bank. Also, there is no substance to the contention that the pleaded breaches (the failure to obtain a special answer and allowing the account to go into overdraft) led (as a matter of legal causation) to the appellant's subsequent conviction and imprisonment on fraud charges, causing him to suffer a loss of earnings. It is enough to say, in that respect, that any such conclusion offends common sense, as to which see Fitzgerald v Penn (1954) 91 CLR 268 at 277 ‑ 278; March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 at 515, 522 ‑ 523 and Chappel v Hart (1998) 195 CLR 232 at 269. The factors which led to the charging of the appellant and to his subsequent conviction and imprisonment were intervening factors associated with the belief which the prosecuting authorities formed as regards the proposition that the appellant knew, at the time of cashing the various cheques drawn on the Mathews Drilling Services account, that that account would not be able to fund those drawings because the cheques drawn on the Dart Base Metal Exploration account would not be met. That was the basis upon which the prosecution case was opened, and run, at the trial.
Also, as the Master mentioned, the appellant was an undischarged bankrupt at the time of the summary judgment proceedings. He had, on 21 July 2000, filed his own petition in bankruptcy and he was only discharged from his bankruptcy some time after the summary judgment was entered against him. Consequently, his right of action against the bank in respect of the alleged breaches of contract vested in his trustee pursuant to the provisions of s 116(1) of the Bankruptcy Act 1966 (Cth), the claims being ones which formed part of his ordinary estate and not being claims for breach of a contract personal to the appellant, unaccompanied by an injury to his personal estate: see McDonald, Henry and Meek: Australian Bankruptcy Law and Practice, 5th ed, pars 116.1.60 and 116.1.260; Beckham v Drake (1849) 2 HL Cas 579 at 604; and Wilson v United Counties Bank Ltd [1920] AC 102 at 111.
That brings me to ground 2 of the grounds of appeal. Once again, it seems to me that the Master was right in the conclusion at which he arrived, essentially for the reasons which he gave. No evidentiary basis has been shown for the allegation of malice which has been made against the bank.
As to the alleged agreement between Meyer and Detective Sergeant Murfin, this is, as I have said, expressly denied by Murfin in his affidavit to which I have earlier referred, in which he also said that he required a written complaint from the bank and that, having received that complaint, he undertook his own assessment in order to see whether there was, or was not, sufficient evidence to support it. There is nothing to contradict his evidence in that regard. While it is true that Mr Meyer did not, himself, swear an affidavit, that has been explained in an affidavit sworn by Maxine Wallis, an employee of the bank's solicitors, who has said that Mr Meyer is unwell, so much so that he is unable even to assist with the preparation of an affidavit.
That leaves, of the other relevant particulars of malice, the allegations that the bank failed to disclose to the police the terms of the banking contract or (which, as I have said, amounts to the same thing) the written instructions from the appellant to the bank dated 27 July 1994; that the police were sent to interview the appellant, not for the purpose of the investigation of an alleged crime, but for that of collecting an alleged

debt; and that Detective Boxshall executed a search warrant on behalf of the bank and for the advancement of its claim against the appellant.

So far as the alleged failure to disclose is concerned, there is, as I have said, no evidence to support the proposition that the bank deliberately failed to disclose any relevant item of evidence and no reason to doubt the evidence of Mr Groves as regards the absence of any bank record of receipt of the letter dated 27 July 1994 or of any similar document or instruction.
As to the allegation that the Western Australian Police acted effectively at the bidding of the bank in the respects identified, these are put to rest by the evidence of Sergeant Murfin and Detective Boxshall. I have previously mentioned that it was Boxshall who conducted the investigation which led to the bringing of criminal charges against the appellant and that he denies that he was sent by the bank to interview the appellant and that he conducted a search of the appellant's premises at the request of or on behalf of the bank. There is nothing to contradict that evidence. I have also mentioned that Detective Boxshall denies rejecting any items of exculpatory evidence offered by the appellant subsequent to the execution of the search warrant. While that is disputed by the appellant, there is no evidence at all to suggest that conduct of that kind, if it occurred, was engaged in at the behest of the bank.
The other matters particularised by the appellant in his statement of claim do nothing to advance his case against the bank.
It follows that nothing was shown by the appellant which might support his claim that the bank acted for an improper purpose or was otherwise malicious. That, of itself, had the consequence that there was no basis upon which the appellant could resist the application for summary judgment in respect of his claim for malicious prosecution (see, for example, Brown v Hawkes [1891] 2 QB 718 at 723). The mere hope that something further might turn up at or prior to the trial could not provide an answer to the respondent's application. Consequently, this claim, too, was rightly dismissed by the Master.
I would accordingly dismiss the appeal.
TEMPLEMAN J: I have had the advantage of reading in draft the reasons published by Steytler J. I agree, for the reasons given by his Honour that the appeal should be dismissed. I wish to make the following observation in relation to the appellant's claim that he was the subject of a malicious prosecution by the National Australia Bank Ltd ("the bank").

In the course of the appellant's submissions to the Court, it appeared to me that, in essence, his claim relating to malicious prosecution really arose from a suspicion that the bank had procured the prosecution for the purpose of concealing internal mistakes or errors of judgment made by one or more of the bank's officers.

The appellant had alleged in the particulars of malice that there was an agreement between Mr Glen Meyer and Detective Sergeant Mirfin that only evidence pointing to the appellant's guilt would be produced by Mr Meyer. However, as Steytler J has pointed out, there is no evidence at all of any such agreement and Detective Sergeant Mirfin has expressly denied it.
If the appellant's account of his dealings with the bank is true, the bank officers concerned would have had a motive for attempting to shift the blame for the bank's losses onto the appellant. That would not necessarily have required the co‑operation of police officers: the result could have been achieved by withholding from the police, the documents which demonstrated that the appellant had not been dishonest in his dealings with the bank.
There are, however, two obstacles to this approach. First, that is not the way the appellant put his case in his statement of claim. There is no allegation of a cover‑up of the kind which I discussed with the appellant at page 12 of the transcript.
The appellant said he had probably omitted a claim of that nature due to his lack of understanding of the statement of claim (at page 13 of the transcript). However, even if the appellant was given leave to amend so as to include such a claim, he would immediately fall at the second obstacle. That is the fact that there is no direct evidence of a cover-up: nor any evidence from which that could reasonably be inferred.
There is, of course, a conflict between the appellant, and Detective Senior Constable Boxshall about the latter's alleged refusal to accept exculpatory material proffered to him by the appellant in the course of the execution of a search warrant. However, even accepting the truth of the appellant's account (as is necessary when an allegation is pleaded) I do not think it provides a proper basis for alleging a malicious prosecution by the bank.
ROBERTS-SMITH J: I have had the benefit of reading in draft the reasons for judgment of Steytler J. I agree entirely with his Honour's

analysis of the facts, his application of the legal principles and his conclusions. There is nothing I could usefully add.