McLean v Permanent Custodians Ltd
[2010] WASCA 123
•5 JULY 2010
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: McLEAN -v- PERMANENT CUSTODIANS LTD [2010] WASCA 123
CORAM: PULLIN JA
NEWNES JA
HEARD: 28 MAY 2010
DELIVERED : 5 JULY 2010
FILE NO/S: CACV 7 of 2010
BETWEEN: SHONA DIMITY McLEAN
Appellant
AND
PERMANENT CUSTODIANS LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :KENNETH MARTIN J
File No :CIV 1636 of 2009
Catchwords:
Practice and procedure Application to dismiss appeal Rule 43(2)(g) of the Supreme Court (Court of Appeal) Rules 2005 (WA) Grounds of appeal manifestly defective Failure to prosecute application for leave to adduce new evidence No effective progress in appeal over period of four months Turns on own facts
Legislation:
Civil Judgments Enforcement Act 2004 (WA), s 15
Supreme Court (Court of Appeal) Rules 2005 (WA), r 43(2)(g)
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant: Ms L Horwood
Respondent: Mr P A Sheiner
Solicitors:
Appellant: L Horwood Solicitor
Respondent: Gadens Lawyers
Case(s) referred to in judgment(s):
McLean v Westpac Banking Corporation [2010] WASCA 124
JUDGMENT OF THE COURT: This appeal has been brought on to consider three applications in the appeal. They are:
1.The respondent's application filed on 4 May 2010 seeking, in substance, an order that the appeal be dismissed pursuant to r 43(2)(g)(i) of the Supreme Court (Court of Appeal) Rules 2005 (WA) (the Rules) on the ground that none of the grounds of appeal has any reasonable prospect of succeeding, and, alternatively, that each of the grounds of appeal to be struck out pursuant to r 43(2)(f), on the same basis.
2.The appellant's application dated 16 March 2010 seeking:
(a)leave to adduce evidence that was not before the court below; and
(b)a stay of the orders made by the primary judge pending the determination of the appeal.
Before turning to a consideration of those applications it is necessary to outline the background to them.
Background
The appeal arises out of a loan agreement, dated 8 April 2008, made between the appellant and the respondent. In essence, pursuant to the loan agreement the respondent agreed to lend to the appellant the sum of $337,810, and the appellant agreed to repay that sum and interest on it by consecutive monthly instalments over a period of 30 years. The appellant granted the respondent a mortgage over a property in Ewen Street, Scarborough by way of security for the loan. The loan money was advanced by the respondent but the appellant subsequently failed to make repayments required under the loan agreement. Following the appellant's failure to rectify the default in accordance with a default notice served on her, the respondent commenced proceedings for vacant possession of the mortgaged property pursuant to the mortgage, and for recovery of the balance of the money owing to it.
The appellant, who was then acting in person, filed a memorandum of appearance and the respondent then brought an application for summary judgment. In response to that application, the appellant swore an affidavit in which she stated that she had a good defence to the claim. The appellant went on to say that that was based on her belief 'that the [respondent's] documentation is void and invalid in that it does not conform with Established Banking Practices as defined in "Dictionary of Banking" by William Thompson, January 1911 "Acceptance" '.
Not surprisingly, that defence did not carry the day and, on 14 January 2010, summary judgment was entered for the respondent. Kenneth Martin J ordered that the appellant give possession of the property in Ewen Street, Scarborough to the respondent and pay to the respondent the sum of $393,729.80. The appellant was ordered to pay the costs of the application for summary judgment and of the action.
The notice of appeal was filed, on 3 February 2010, by the appellant in person.
On 10 March 2010, the appellant's current solicitor, Ms Horwood, filed a notice that she was acting on behalf of the appellant. At the same time the appellant's case was filed. It was signed by both the appellant and Ms Horwood. The grounds of appeal contained in the appellant's case were as follows:
1.The appellant was acting in person and a miscarriage of justice has occurred as there is evidence of breaches of the Consumer Credit code and that evidence was not before the court.
2.There has been a miscarriage of justice in that the Respondent/Plaintiff lender knew or should have known of the Appellant's lack of capacity to service the loan at the time that the loan monies were advanced.
The misrepresentation is:
(a)The Respondent's lender had an obligation to ensure that the Appellant had the income or financial capacity to support the application.
(b)The Appellant did not have the income or financial capacity to support the loan repayments.
(c)There have been breaches of the Consumer Credit Code and the original jurisdiction for said breaches is the State Administrative Tribunal.
(d)The Appellant has accordingly issued proceedings in the SAT matter CC86 of 2010, that commenced on the 4th of February 2010 and are ongoing.
3.His Honour relied on the loan agreement, which is subject to being set aside or varied in the SAT proceedings if it determined that there have been breaches of the Consumer Credit Code. Further, the lender/Respondent:
i.Failed to provide documents despite requests (original loan details, loan application).
ii.Failed to reply to correspondence previously forwarded to them by the Appellant requesting documentation.
4.His Honour relied on the loan document which is liable to be set aside or varied if the SAT proceedings result in a finding that the Respondent lender breached the Consumer Credit Code.
5.The Appellant will suffer a miscarriage of justice if the summary judgement is allowed to stand or is enforced.
On 16 March 2010, the appellant filed the application for a stay of the judgment of the primary judge and for leave to adduce further evidence. At the same time an affidavit of the appellant was filed. The affidavit is described as being filed in support of both the application for the stay and the application to adduce further evidence, but there is nothing contained in it which is relevant to the latter. It will be necessary to come back to the affidavit in due course.
On 9 April 2010, the Court of Appeal Registrar made an order that the appellant have leave to file and serve any amended appellant's case by 16 April 2010. That order came about as the result of comments made by Newnes JA in a directions hearing on 12 March 2010 in another appeal involving the same appellant, McLean v Westpac Banking Corporation, CACV 122 of 2009 (the Westpac appeal), where, in respect of grounds of appeal of a similar nature, his Honour told Ms Horwood that the grounds were seriously defective and would have to be completely reworked. At that time Newnes JA specifically drew Ms Horwood's attention to r 32 of the Rules.
When this appeal came on for a directions hearing on 19 April 2010, the amended appellant's case had not been filed. On that occasion an order was made extending the time for filing to 21 April 2010.
The amended appellant's case was not filed until 30 April 2010. In the amended grounds of appeal the appellant repeats the earlier grounds of appeal and inserts before those grounds the following additional grounds:
1.This amended notice of appeal is lodged by the appellant on the discovery of fresh evidence that indicates the lender and/or the lenders agents have altered, changed, amended loan application documents and financial information relating to the loan without the appellant's knowledge consent or authority.
2.It is now apparent to the appellant that 'low doc loans' have extremely different legal connotations and consequences from a traditional 'full doc' loan on the basis that the loan application documents have been altered changed and amended without the appellant's knowledge, consent and authority.
3.The lender, its agents and legal representatives have withheld this evidence which is vital to the Summary Judgment Application from Judge Martin when they had a legal obligation and duty to make His Honour fully aware of all aspects relating to the application for Summary Judgement and the reasons why the supposed default had occurred.
4.The appellant was a self‑represented litigant with no in depth knowledge of the law pertaining to 'low doc loans', and the duties of solicitors to the court. The plaintiff and its solicitors have unjustly and unconscionably taken advantage of the appellant's lack of knowledge and impecuniosity.
It is immediately obvious that, as with the original grounds of appeal, none of the new grounds of appeal comply with r 32(4) of the Rules. They fall a long way short of what is required. Indeed, in that respect they might even be thought to have gone backwards rather than forwards.
The application to dismiss the appeal
On the hearing of the application, Ms Horwood, for the appellant, informed us that the new grounds of appeal had been prepared by the appellant, but that she had reviewed the grounds, 'made some minor changes and signed them' (ts 12). Ms Horwood acknowledged that on 12 March 2010 in the Westpac appeal she had been specifically referred to r 32 of the Rules but admitted that when reviewing the grounds of appeal in this appeal she did not have regard to the Rules (ts 15). That remarkable, albeit obvious, admission was not expanded upon.
As they stand, none of the grounds of appeal is a proper ground of appeal and none of them has any reasonable prospect of succeeding. The only question is whether the appeal should be dismissed at this stage or whether the appellant should be given a further opportunity to put the grounds of appeal in order. In considering that question it is appropriate to turn to the case the appellant apparently seeks to advance on the appeal.
The appellant's case, as in the Westpac appeal, appears to be based on s 70 and s 71 of the Consumer Credit (Western Australia) Code, made under the Consumer Credit (Western Australia) Act 1996 (WA). The effect of the relevant provisions of the Act and Code is described in McLean v Westpac Banking Corporation [2010] WASCA 124 and it is unnecessary to repeat what is said there. The appellant says that the primary judge erred in finding that the respondent was entitled to summary judgment in circumstances where the loan agreement and the mortgage are liable to be set aside by the State Administrative Tribunal (SAT) under s 71 of the Code in proceedings she has instituted in SAT. (We note that, as in the Westpac appeal, the SAT proceedings were commenced after judgment was given in this court).
The only explanation of the factual basis of the appellant's claim in SAT is set out in the affidavit of the appellant which accompanied the application for a stay of the judgment. In the affidavit, the appellant deposes to having lodged an application under the Code in SAT on 18 January 2010, and annexes to the affidavit a copy of the application. The appellant does not depose to the truth of the contents of the application.
In the SAT application, it is asserted that:
[A] contract was created unlawfully, using unjust and improper information on application. That the [respondent] failed to conduct proper due diligence to ascertain the correct facts. The [respondent] created the loan, knowing that the [appellant] did not meet proper lending criteria and that the loan default the [respondent] would be likely to obtain the secured property. Under the Consumer Credit Code Section 70 [sic].
It is to be inferred that the contract referred to is the loan agreement between the appellant and the respondent.
The appellant goes on in the affidavit to say (relevantly) as follows:
7.The application for Execution of Summary Judgement is inappropriate at this time due to my current application with both SAT and the Appeal Court wherein I am seeking to Set Aside Summary Judgement as there is a risk of prejudice to me if judgement is executed without the SAT having the opportunity to ventilate relevant issues in which it has original jurisdiction under the Consumer Credit Act.
…
9.My application to the State Administrative Tribunal is brought under s 70 of the Consumer Credit Code which provides that the SAT may if it finds that a contract is unjust, set it aside, discharge a mortgage or make an order for relief, which is not within the power of the Supreme Court in an original capacity. It would be unjust to allow the Bank to dispose of my property which the Plaintiff has a mortgage over in connection with the loan the subject of this action.
10.I did not hold the property for investment purposes.
11.Advice I received prior to lodging the appeal suggests, and I do believe, that the bank breached the consumer credit code by failing to ascertain whether I had the capacity to pay back the loan repayments under the loan agreement I entered into with the Plaintiff.
12.In fact, at the time the bank advanced the money it should have been obvious that I did not have that capacity and they have breached the code by advancing monies to me and taking a security over the property in those circumstances and these issues have to be considered by the State Administrative Tribunal if justice is to be served.
13.I have not been in full employment for the past 10 years and have been self‑supporting. These and other submissions, and the fact that the majority of the loan monies advanced were applied to domestic purposes and living expenses and not applied for investment purposes.
14.If the bank sells the property I can never be compensated adequately even if I am awarded monetary damages as it is a unique property with a lifetime of memories attached to it.
Putting aside questions of admissibility, it therefore appears, as in the Westpac appeal, that the appellant contends that at the time it was entered into the loan agreement was unjust because the respondent knew, or ought to have known, that the appellant did not have the financial capacity to make the loan repayments; that had the respondent made appropriate inquiries into her ability to service the loan before making it, those inquiries would have revealed that the appellant did not have the financial capacity to do so.
That in turn seems to rest on the proposition that a lender is under a duty to satisfy itself of the capacity of a borrower to repay a loan before making the loan. We were not referred to any provision of the Act or Code (or any other relevant legislative provision) which imposes such a duty. What appears, however, from s 70(2)(l) of the Code is that whether the lender knew or could reasonably have ascertained that the borrower could not pay in accordance with the terms of the loan is a factor that SAT may take into account in determining whether, in all the circumstances, a transaction was unjust.
It is not in issue that the case the appellant seeks to advance on the appeal was not put to the primary judge and depends upon evidence which was not before his Honour. No satisfactory explanation has been offered for the failure to put the case to the primary judge. Nor has any satisfactory explanation been provided for the failure to advance the application to adduce further evidence, although it is obviously essential to the appeal. The appellant has simply allowed it to languish and no endeavour has been made to identify the new evidence which is said to found the appellant's case on the appeal.
Ms Horwood told us that the documentary evidence concerned was obtained by the appellant in early March 2010. It apparently consists of contract documents and associated material in the possession of the respondent which was produced by the respondent in the course of the SAT proceedings. Ms Horwood said that she had not taken any steps to examine the documents to see whether there was anything in them that would be of relevance to an appeal against the decision of the primary judge. As in the Westpac appeal, we were not told whether or to what extent any of that material was already in the possession of the appellant although, again, given the nature of the case the appellant seeks to advance it is difficult to conceive that no relevant evidence was available to her before the respondent produced its documents in the SAT proceedings.
It thus comes about that, nearly four months after the appeal was commenced, no proper grounds of appeal exist and the new evidence upon which the appeal is said to depend has still not been disclosed. Moreover, the grounds of appeal fall so far short of what is required that nothing could be salvaged from them. To draw proper grounds of appeal it would be necessary to start from scratch.
In the circumstances, the interests of justice do not require that the appellant be given another opportunity to put the grounds of appeal in a proper form. To date the appellant has shown a complete inability or unwillingness to do so or to attempt to prosecute the appeal with reasonable diligence. To the extent the appellant has made any endeavours to formulate acceptable grounds of appeal those endeavours have been entirely unsuccessful. There is nothing to indicate that the position will improve. In the meantime the respondent has been left with, in effect, an inert appeal hanging over it. The appellant has had sufficient opportunity to put the grounds of appeal in order and the interests of justice require that the matter be brought to an end. We would dismiss the appeal.
The application for a stay
In light of our conclusion that the appeal should be dismissed, strictly speaking it is unnecessary deal with the application to stay the enforcement of the judgment. However, even if the appeal had not been dismissed we would have refused the application for a stay for the following reasons.
The principles to be applied on an application for a stay have been set out in McLean v Westpac Banking Corporation and it is unnecessary to repeat them. As mentioned there, a stay will generally not be granted unless the appellant establishes that the appeal has reasonable prospects of succeeding.
As in McLean v Westpac Banking Corporation, in the present case it could not be concluded that the appeal had reasonable prospects of succeeding. The prospects of success on the appeal turned on establishing that the new evidence on which the appellant sought to rely should be admitted and on the cogency of that evidence. Due to the appellant's tardiness in pursuing the application for leave, that evidence remained undisclosed. Whether or not (if admitted) it would have assisted the case the appellant seeks to make out could be no more than a matter of speculation at this stage.
The application must therefore have failed.
Conclusion
We would dismiss the appeal.
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