McNally v Commonwealth Bank of Australia
[2017] WASC 177
•29 MAY 2017
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MCNALLY -v- COMMONWEALTH BANK OF AUSTRALIA [2017] WASC 177
CORAM: TOTTLE J
HEARD: 29 MAY 2017
DELIVERED : 29 MAY 2017
FILE NO/S: CIV 2023 of 2015
BETWEEN: DALE MCNALLY
Plaintiff
AND
COMMONWEALTH BANK OF AUSTRALIA
Defendant
Catchwords:
Practice and procedure - Pleadings - Strike out application - Where plea has no relevance to any cause of action attempted to be pleaded or do not disclose a reasonable cause of action - Where pleading would embarrass, prejudice or delay the fair trial of the action
Legislation:
Nil
Result:
Application successful in part
Category: B
Representation:
Counsel:
Plaintiff: In person
Defendant: Mr M D Cuerden SC
Solicitors:
Plaintiff: In person
Defendant: Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
TOTTLE J:
(This judgment was delivered extemporaneously on 29 May 2017 and has been edited from the transcript)
Introduction
In this action, the plaintiff seeks damages from the defendant for losses he alleges he suffered as a consequence of the defendant refusing to loan him the funds he required to complete the construction of a house on a residential block in Secret Harbour, the bank having first advanced him the funds required to commence construction.
The plaintiff is representing himself in this action. He filed the writ of summons in the action on 2 July 2015. The indorsement of claim on the writ commences with the following two paragraphs:
The plaintiff's claim is for loss of assets, income and damages caused by the financial abuse and negligence of Commonwealth Bank of Australia (CBA), including employees at their St Georges Terrace Office Perth Western Australia knowingly assisting in a breach of trust.
After being granted a license to build (21st October 2008) by the City of Rockingham on 28 October 2008, the plaintiff made application [sic] with his CBA Better Business Banking rep Andrew Stiles to provide a two part loan for construction of a house on CBA charged land at Secret Harbour WA. The purpose, to sell the property on completion.
The balance of the indorsement of claim comprises the plaintiff's account of his dealings between 29 December 2008 and 8 November 2014, and the defendant's processing of the plaintiff's loan applications in that period and, ultimately, the sale of the plaintiff's assets to meet his obligations to the defendant.
Pleading history
The plaintiff filed and served a statement of claim on 5 October 2015, and further and better particulars of that statement of claim on 12 November 2015.
The plaintiff filed and served an amended statement of claim and on 11 April 2016.
The plaintiff filed and served a substituted statement of claim on 1 June 2016, and further and better particulars of the substituted statement of claim on 12 July 2016.
The defendant filed and served a substituted defence on 17 June 2016.
On 11 November 2016, the plaintiff filed and served an amended substituted statement of claim.
Background to the application
At a strategic conference held on 15 November 2016, the defendant's counsel foreshadowed an application to strike out the amended substituted statement of claim, which suffered from some obvious difficulties. By way of example, pars 41 to 45 attempted to plead a cause of action in negligence. These paragraphs incorporate references to 'Representations' and 'Conduct' as if they were defined terms when they are not defined in the amended substituted statement of claim.
The same problem afflicts subsequent paragraphs of the amended statement of claim in which the plaintiff attempts to plead a cause of action for misleading and deceptive conduct and unconscionable conduct on the part of the defendant.
At the strategic conference, I directed that the plaintiff file and serve a statement of facts, issues and contentions, on the basis that this might overcome the evident difficulties the plaintiff has encountered with complying with the rules of pleading. The plaintiff has filed a statement of facts, issues and contentions, but this has not overcome the difficulties with the amended substituted statement of claim and the defendant has brought an application to strike out the pleading on the grounds that they disclose no reasonable cause of action and that they are frivolous and vexatious and, in a number of respects, scandalous, and that they may prejudice, embarrass or delay the fair trial of the action.
Disposition
Paragraph 13
Paragraph 13 of the amended substituted statement of claim the plaintiff pleads as follows:
On 28 October 2008 Mr McNally met Mr Stiles to arrange the loan for the construction of the house on the Secret Harbour property.
Mr McNally required $350 000 for construction of the house. That did not include a swimming pool. The verbal agreement proposed by Mr Stiles was, one loan of $160 000 to build to lockup, followed by a second loan of $200 000 would be available to finish and up to $300 000 dependent on updated valuations of the property at lockup.
Mr Stiles told Mr McNally the first loan would not require valuations, so would be available sooner. The proposal made perfect sense.
The agreement gave Mr McNally the opportunity to include a swimming pool in the sale of the property. If there was any doubt over the second loan to complete construction, Mr McNally would not have agreed to proceed with the loan.
The defendant contends that the indorsement of claim makes no mention of a claim based on an agreement made on 28 October 2008, and that the alleged agreement does not form part of the facts giving rise to a cause of action disclosed by the indorsement claim. Consequently, the defendant contends that the amended substituted statement of claim exceeds the indorsement of claim and should be struck out. The defendant cites the decision in Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 as authority for that proposition.
In the course of the hearing today, the plaintiff has made it clear that he does not intend to plead, at par 13 of the amended substituted statement of claim, that a binding agreement was concluded at the meeting he held with Mr Stiles on 28 October 2008. In the course of an exchange with me, he described what occurred at the meeting on 28 October 2008 as a precursor to his subsequent application for finance.
On the clear understanding that the plaintiff is not pleading and not intending to plead a binding legal agreement in par 13 of the amended substituted statement of claim, I will not strike out that paragraph. I will allow the paragraph to stand, on the basis that it forms part of the background to the plaintiff's plea.
The defendant advances a separate criticism of the plea in par 13 of the amended substituted statement of claim, namely, that there is a lack of clarity as to precisely what it is the plaintiff says was agreed or, alternatively, what it is the plaintiff says he understood was agreed at the meeting on 28 October 2008.
The defendant says that it is entitled to know the plaintiff's position on the following four matters:
(i)Whether the defendant was allegedly required to loan the plaintiff $200,000 or some amount more than $200,000. (The reason the defendant seeks clarification on this point is that at par 18 of the amended substituted statement of claim, the plaintiff suggests that he applied for a loan of $220,000.)
(ii)Whether the reference to the second loan being dependent on updated valuations of the property at lockup is intended to mean that only an alleged obligation to loan any amount more than $200,000 was dependent on updated valuations, or whether that condition qualifies the defendant's alleged obligation to make the second loan at all.
(iii)Insofar as the defendant's alleged obligation to advance all or any part of the second loan was subject to updated valuations, whether this meant updated valuations with which the defendant was honestly satisfied, or whether it also imposed an objective standard that the defendant had been reasonably satisfied, and if so, what the relevant criteria for reasonable satisfaction were.
(iv)The terms on which the second loan was allegedly required to be made, including but not limited to the critical terms as to interest, time for repayment, and the provision for security.
In my view, the criticisms that the defendant makes of the plea in par 13 are well made and I will order that the plaintiff provide the defendant with a statement identifying its position in relation to each of the four matters I have just outlined.
Paragraphs 16 to 22
Paragraphs 16 to 22 of the amended substituted statement of claim plead events that occurred between May and July, 2009, concerning the plaintiff's application for a loan of funds to complete the construction of the house and the defendant's refusal to grant that loan. These paragraphs may have some relevance to the plaintiff's claim in negligence and I decline to strike them out.
Paragraphs 23 to 29
Paragraph 23 alleges that between 10 June and 5 August, 2009, the plaintiff's CBA Better Business Banking file notes were deleted. This paragraph seems to bear no relation to any cause of action that is pleaded, nor does it, on its own, constitute a cause of action known to the law and I consider it should be struck out.
Paragraph 25 pleads that from 5 August 2009, CBA Collections staff began calling the plaintiff daily, with no knowledge of his banking history regarding loan arears, and demanding money.
This plea is linked to the plea contained in par 46 of the amended substituted statement of claim, in which the plaintiff attempts to plead a claim based upon harassment, contrary to the Competition and Consumer Act 2010 (Cth). The defendant has drawn my attention to s 50 of that Act, which contains a statutory prohibition against undue harassment.
The defendant has acknowledged that it is conceptually possible for the plaintiff to mount a claim on the basis of a contravention of that plea, but makes the following contentions:
(i)In this case, the facts pleaded to sustain the claim for harassment do not come up to the standard of undue harassment.
(ii)The alleged harassment has no causative connection with the loss claimed by the plaintiff, in that the purpose of the telephone calls said to amount to harassment was to seek repayment from the plaintiff of money he undeniably owed to the defendant.
(iii)The plea for harassment is not a plea that was contained in the indorsement of claim and, for that reason, is not a plea that should be allowed to be made in the amended substituted statement of claim.
I think that each of the points made by the defendant is well made and I strike out par 25 of the amended substituted statement of claim.
Paragraph 26 of the statement of claim pleads that the plaintiff received no assistance from CBA Better Business Banking staff from 2009 onwards. That plea seems to have no conceivable relevance to any of the causes of action that the plaintiff attempts to plead and it should be struck out for that reason.
I consider that pars 24, 27, 28 and 29 of the amended substituted statement of claim might conceivably be relevant to damages sustained or damages claimed in the context of a negligence claim and that par 28 might conceivably be relevant to a claim in negligence and I decline to strike those paragraphs out.
Paragraphs 14, 23, 34, 35 and 38
The defendant submits that in pars 14, 23, 34, 35 and 38 of the amended substituted statement of claim, the plaintiff has pleaded allegations of impropriety, dishonesty and fraud, without specifically pleading the matters upon which those allegations are based. The defendant says that generalised allegations of dishonesty or impropriety are made in those paragraphs, without the facts upon which those allegations are based being clearly pleaded, and without relating those allegations back to any justiciable cause of action.
In my view, those points are points of substance and are well made. I turn to each of the paragraphs that are the subject of that criticism.
Paragraph 14 of the amended substituted statement of claim alleges that on dates at the end of December 2008, Mr Stiles, without the knowledge of the plaintiff, created and had approved false information on the internal CBA home loan documentation. As it is pleaded, that appears to allege impropriety and dishonestly on the part of Mr Stiles. It is not clear that that is, in fact, what the plaintiff intended to allege. It is possible that the plaintiff intended to allege that Mr Stiles had created and approved internal CBA home loan documentation that contained incorrect information relating to the purpose of a loan that was being processed and, if that was the case, an allegation framed in those terms would not suffer from the defect identified by the defendant. But in its present form, it does seem to me that par 14 makes an allegation of dishonest and improper conduct against Mr Stiles and I think it should be struck out because it does not clearly relate to any cause of action that is pleaded by the plaintiff, nor does it adequately particularise the impropriety or dishonesty.
Paragraph 23 is attacked on the basis that it contains a generalised allegation of dishonesty or impropriety but I do not need to deal with it as I have held that the paragraph should be struck out for other reasons.
Paragraph 34 relates to par 14 of the amended substituted statement of claim with which I have just dealt, and should be struck out for the same reasons that par 14 should be struck out.
Paragraph 35 contains an allegation against the defendant of unreasonable and deliberate harassment, and should be struck for the same reasons that par 25 should be struck out.
Paragraph 38 alleges that Mr McNally's claim is against the CBA for misleading, deceptive and unconscionable conduct by customer experience investigators and the CBA CEO for deliberately concealing information that proved CBA negligence. That seems to me to be an allegation that contains a generalised allegation of impropriety and dishonesty and does not seem to be connected to any justiciable cause of action and it should be struck out.
Paragraph 40
Paragraph 40 of the amended substituted statement of claim pleads the following:
An act or omission contrary to and not in accordance with a duty or obligation owed at law or pursuant to the terms (expressly or implied) of the contract between the Financial Services Provider and the applicant.
According to a heading that precedes that paragraph, it is intended to make a plea of maladministration. In the context of this action, it does not disclose a reasonable cause of action and it should be struck out.
Paragraphs 41 to 45
I have already touched upon pars 41 to 45 of the amended substituted statement of claim. These paragraphs attempt to plead a cause of action in negligence.
Paragraph 41 pleads, '[a]t all relevant times, CBA owed the plaintiff a duty of care.'
Paragraphs 42 to 45 then plead allegations of a breach of the duty of care and allegations that are intended to plead causation ‑ that the breach caused the plaintiff loss. The difficulty with these paragraphs is that they incorporate a reference to 'Representations' and 'Conduct', and a further reference to a 'First Representation', as if those terms had been defined in the pleading when they have not, and as a result the pleading is unclear. If allowed to stand, the pleading would embarrass, prejudice or delay the fair trial of the action, and for those reasons the plea should be struck out.
Indeed, in their present form, pars 42 to 45 do not disclose a cause of action. Paragraph 41 attempts to establish the first element of a cause of action in negligence, a duty of care, but on its own and without a pleading of breach, causation and loss, it cannot sustain a cause of action in negligence and it too should be struck out.
Paragraph 46
Paragraph 46 is an attempt to plead a cause of action for harassment, and for the reasons I have already given that paragraph falls with pars 23 and 35 of the amended substituted statement of claim and should be struck out.
Second numbered par 40
There is a problem with the paragraph numbering in the amended substituted statement of claim. Numbered pars 40, 41 and 42 are repeated and appear twice in the amended substituted statement of claim. When those numbered paragraphs appear for the second time, they should properly be numbered pars 47, 48 and 49, respectively.
The second numbered par 40 of the amended substituted statement of claim (what should properly be numbered par 47) attempts to plead a claim for misleading and deceptive conduct. The difficulty with this plea is that it is afflicted by the same difficulty as the attempt to plead negligence in pars 41 to 45, namely, it uses the terms 'Representations' and 'Conduct' as if they were defined terms when they are not. For that reason, it should be struck out. It should also be struck out for the reason that it attempts to plead a cause of action that is not contained in the indorsement of claim.
Second numbered pars 41 and 42
The second numbered pars 41 and 42 of the amended substituted statement of claim (what should properly be renumbered pars 48 and 49) attempt to plead unconscionable conduct. These paragraphs, again, suffer from the same difficulties to which I have referred earlier, they attempt incorporate the terms 'representations' and 'conduct' as if they were defined terms when they are not, and as a consequence those pleas are unclear and are likely to embarrass, prejudice or delay the fair trial of the action and in their present form do not plead a justiciable cause of action. For those reasons they should be struck out.
Addendum
After delivering oral reasons for striking out the paragraphs identified above having regard to the extent of the material struck out, I decided that it would be preferable to strike out the pleading in its entirety and to permit the plaintiff to re‑plead his claim from afresh.
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