National Australia Bank Limited v Munro
[1991] TASSC 44
•28 March 1991
Serial No 16/1991
List "A"
COURT: SUPREME COURT OF TASMANIA
CITATION: National Australia Bank Limited v Munro [1991] TASSC 44; A16/1991
PARTIES: NATIONAL AUSTRALIA BANK LIMITED
v
MUNRO, Craig Stephen
FILE NO/S: MA 5/1991
DELIVERED ON: 28 March 1991
JUDGMENT OF: Crawford J
Judgment Number: A16/1991
Number of paragraphs: 22
Serial No 16/1991
List "A"
File No MA 5/1991
NATIONAL AUSTRALIA BANK LIMITED
V CRAIG STEPHEN MUNRO
REASONS FOR JUDGMENT CRAWFORD J
28 March 1991
Having had its application for summary judgment dismissed by the Master, the plaintiff has appealed. On the hearing of the appeal the plaintiff's counsel sought to read the contents of three affidavits into evidence. They were two affidavits of Dean Barry John Martin sworn on 28 August 1990 and 19 November 1990 respectively and an affidavit of the plaintiff's solicitor, Mr Sugden, sworn on 4 October 1990. The defendant's counsel objected to the admissibility of parts of the earlier affidavit of Mr Martin and of the affidavit of Mr Sugden. The objections primarily cause a consideration of O15, r2(1) and (2).
The alleged basis of the plaintiff's claim is contained in an amended statement of claim dated 12 September 1990. I will set forth its contents with some comments, including mention of some possible deficiencies in it, but it is emphasised that the hearing has not reached the stage where they have been the subject of argument.
"1At all material times the Plaintiff was a Company registered in Tasmania engaged in the business of banking and whose registered office was situate at 76 Liverpool Street, Hobart in Tasmania.
2On the 21st of May, 1987, the Plaintiff lent to the Defendant the sum of EIGHT THOUSAND TWO HUNDRED DOLLARS ($8,200.00).
3The loan was made pursuant to an oral agreement ('the oral agreement') made between the Plaintiff and the Defendant on or about the 19th day of May, 1987."
The plaintiff's claim is based on that oral agreement.
"4On or about the 24th day of June, 1987, the Defendant signed a Loan Agreement embodying the terms and conditions applicable to the aforesaid oral agreement."
On the face of it this paragraph is only pleading evidence. The Loan Agreement is not the basis of the claim. The earlier oral agreement is.
"5It was a term of the Loan Agreement that the defendant repay the said amount in one hundred and eighty (180) monthly instalments by the 31st day of May, 1992."
I will assume what is intended is an allegation that the oral agreement contained this term and that the Loan Agreement embodied it. However I comment that it is impossible to understand how 180 monthly instalments could be crammed into a space of about 60 months.
"6The monthly instalments were payments of both principal and interest and could be varied."
No term of the oral agreement purports to be pleaded. In what way they could be varied and who had the right to vary them, are not stated.
"7It was a term of the Loan Agreement that the Defendant pay interest as part of the monthly instalments on the amount of the principal of the loan that remained unpaid from time to time."
I will make the same assumption made in relation to para5.
"8The rate of interest was initially 19% but was subject to variation by the Plaintiff without notice.
9The defendant made payments in respect of his commitments for repaying capital and paying interest.
PARTICULARS OF PAYMENTS
Date of Payment Amount Paid
1/6/87 $139.00
22/7/87 $139.00
16/10/87 $139.00
10In the process of making the said repayments the Defendant reduced the principal owed to the sum of $8,103.68.
11No payments were made within the time stipulated for the instalments to be made."
This on its face seems incorrect. A payment was made on 1 June 1987 which was within a month of the loan and the date of the oral agreement.
"12The defendant defaulted under the loan agreement on the 31st of May 1987 and was continuously in default thereafter."
No particulars of the default are pleaded.
"13In accordance with Clause 11 of the Loan Agreement, the Plaintiff served the Notice of Demand on the Defendant on the 5th day of June, 1990, which remains unanswered."
I will assume what is intended is an allegation that the oral agreement contained a term which was embodied in the Loan Agreement as its clause 11. What that term is has not been pleaded. The "Notice of Demand" is a mystery to the reader as is the reference to it being "unanswered".
"14By virtue of the service of the said Notice of Demand, the full amount of principal remaining unpaid at the date of service and all unpaid interest and bank fees became due and owing by the Defendant to the Plaintiff.
PARTICULARS OF PRINCIPAL AND UNPAID INTEREST AND BANK FEES AS AT 5690
Principal $8,103.68
Unpaid Interest and bank fees $5,432.75"
No basis for this allegation appears. No apparently relevant term of the oral agreement has been pleaded. No particulars of how the sums claimed have been calculated appear.
"AND THE PLAINTIFF CLAIMS:
(i)the sum of $13,536.43
(ii)Interest on the sum of $13,536.43 from the 5th day of June, 1990, until payment at the Plaintiff's rates of interest applicable from time to time."
Before proceeding to deal with paragraphs of the affidavits to which objection has been taken some statements of principle are desirable. The application is for summary judgment on the ground that the defendant has no defence to the claim. The proceeding is a peculiar one, "intended only to apply to cases where there can be no reasonable doubt that the plaintiff is entitled to judgment ...". Jones v Stone [1894] AC 122 at p124, and see Clarke & Anor v Union Bank of Australia Limited (1917) 23 CLR 5 at p8. "That is a stringent power to give, and therefore the courts have said that its exercise must be strictly watched, in order to see that the plaintiff has brought himself within the scope of the provisions of the order." Roberts v Plant [1895] 1 QB 597 at p603. See also Stephens v Huett [1983] Tas SR 227 (NC), 36/1983.
If there were no special rules to the contrary, a deponent would have to confine himself to facts within his own knowledge (O41, r3(1)), and the rules of evidence would apply to these applications, in particular the rules which make inadmissible hearsay, secondary evidence of documents and opinion. But O15, r2 does provide special rules and it also requires particular evidence. In subr(1), after requiring that the application be "supported by an affidavit verifying the facts on which the claim, or the part of the claim, to which the application relates is based" it requires that the affidavit shall state "that, in the deponent's belief, there is no defence to that claim or part thereof, as the case may be ...". There are two parts to the sub–rule. The first requires that there be an affidavit which verifies the facts on which the claim is based, that is to say the facts asserted in the statement of claim as the basis for the claim. The second requires that the deponent must state that, in his belief, there is no defence to that claim. The second requirement is commonly and simply met by the deponent stating to that effect, and I see no problem arising from that practice.
The requirement that the deponent verify the facts is made easier by subr(2). It provides that unless the "judge otherwise requires, an affidavit for the purposes of subr(1) of this rule may contain statements of information or belief with the sources and grounds thereof". Its effect is that hearsay and secondary evidence of documents may be admitted, and even the deponent's opinion provided that that opinion is also his belief. (See the comments as to opinion and belief by Cosgrove J in Stephens v Huett (supra)).
Sub–rule (2) is to be contrasted with O41, r3(1) which applies only to interlocutory applications and allows admission into evidence of the contents of affidavits which consist of "statements as to the belief of the deponent, giving the sources of his information and the grounds of his belief". That rule admits the belief of the deponent provided he also gives the source of his information and the grounds of his belief. But O15, r2(2) admits the deponents information or his belief, provided he also gives "the sources and grounds thereof". It follows that to conform with the sub–rule particular contents may be based only on information, provided that "the sources and grounds thereof" are stated, whether they be hearsay, documents or something else, or the contents may be based only on belief, provided that the sources and grounds thereof are stated. All of what I have said is of course subject to the requirement in subr(1) that the deponent state that in his belief there is no defence to the claim. Paragraph 18 of the affidavit of Mr Martin sworn on 28 August 1990 complies with this requirement by stating that he believes that the defendant has no defence to the claim. I turn to the other parts of that affidavit.
In para1 Mr Martin asserts that he is the plaintiff's regional lending analyst for Tasmania with authority to swear the affidavit. There is no objection to this. Paragraph 2 states:
"I have no direct knowledge of the matters to which I am about to depose but I have made enquiries with all of the people who have been involved in the matter and have consulted all of the Plaintiffs files and records, and as a result of the information so obtained, I am able to swear as to my belief based thereon."
There was no objection to this.
Paragraph 3 states:
"The facts alleged in the Amended Statement of Claim dated the 8th day of August, 1990 are true."
Objection was made to this on the ground that it referred to a document never delivered. The plaintiff's counsel did not demur to this assertion but there is an affidavit of the defendant's solicitor, Mr Sugden, dated 4 October 1990, which indicates that the document referred to is identical to the amended statement of claim before me. If there was no other basis for inadmissibility I would be prepared to consider an application to introduce further evidence from Mr Martin to clarify the matter, for it is a technical objection. But the paragraph is inadmissible for other reasons. The deponent has no direct or first hand knowledge that the facts in the pleading are true. He may attest to his information or belief, provided he states his sources and grounds. The paragraph does not state whether the assertion comes from information or whether he believes it, and in any event he has failed to state his sources or grounds.
Paragraph 4 of Mr Martin's affidavit states:
"On the 21st day of August, 1990 I had a telephone conversation with Mr Scott Albertson who was an officer of the Plaintiff employed at the Plaintiffs Hobart Branch during May 1987. Mr Albertson informed me and I verily believe that on the 19th of May 1987 he had a conversation with the Defendant at the Plaintiffs Hobart Branch during which conversation he informed the Defendant that the loan that the Defendant had requested for the purchase of a car had been approved."
Objection to this has been made firstly on the grounds that it is hearsay. This objection fails because subr(2) permits statements of information. Secondly it was submitted that no ground for the deponent's belief is stated. I reject this. The ground can be inferred. It is that a fellow bank officer gave him the information. That is a sufficient statement of the grounds to make the belief admissible. The information is admissible as information in any event. Thirdly, as I understand it, an objection was made that the information is irrelevant. I think it is sufficiently relevant. The amended statement of claim asserts that an oral loan agreement was made between the plaintiff and the defendant on or about 19 May 1987. The facts in para4 of the affidavit relate to an oral statement made to the defendant that day that a loan he had requested had been approved.
Paragraph 5 states:
"I have examined the Plaintiffs records in relation to that transaction and also the account records for Account Number 95–706–2697 and Account Number 42–641–6556 and as a result of the examination of those records and statements I am informed and verily believe that on the 21st day of May 1987 the sum of eight thousand two hundred dollars ($8,200.00) that was agreed to be loaned to the Defendant was debited to Account No. 95–706–2697 and the amount of seven thousand nine hundred and ninety dollars ($7,990.00) was credited to Savings Account Number 42–641–6556, two hundred and ten dollars ($210.00) having been retained by the Plaintiff as establishment fees."
Objection has been made to this firstly on the ground that it contains secondary evidence of documents. But as I have said, subr(2) permits statements of information provided that the sources of the information are also stated.
I agree with Thomas J in Commissioner of Taxation v Ahern (1986) 87 FLR 112 at pp115 and 116 that admissibility and weight are separate considerations. What concerns me at this stage of the proceedings is the question of admissibility. Counsel for the defendant further submitted that the statement in para5 of the sources is insufficient relying on the authority of Commissioner of Taxation v Ahern (supra). But I consider that the sources are sufficiently stated. They are identified specifically. I do not consider that each piece of paper in the specified records need be produced or explained in greater detail. I add that the grounds for the asserted belief may be inferred and are sufficiently stated. For the same reasons I overrule the objection to para6.
Paragraph 9 of Mr Martin's affidavit states:
"My perusal of the Plaintiffs records of Account Number 95–706–2697 reveals and I verily believe that the Defendant did not make the payment required on the 31st of May, 1987 and was in default under the Loan Agreement continuously thereafter."
I rule that all of the words to the date are admissible. They appear to be relevant to para12 of the amended statement of claim. Paragraph 7 of the affidavit purports to annexe a copy of the Loan Agreement and para8 points out that the Agreement requires the defendant to pay $139 on the last day of each month commencing on 31 May 1987. No objection was made to paras7 and 8. The sources and grounds of the information and belief of the deponent appear sufficiently. However I rule that the closing words "and was in default under the Loan Agreement continuously thereafter" are inadmissible. The basis for this assertion does not appear. The sources and grounds for it are inadequately stated. Taking into account that it appears from para10 that the instalment due on 31 May 1987 was paid on the next day, it is impossible to understand what the continuous default was.
Paragraph 10 states:
"My examination of the account records for Account Number 95–706–2697 further revealed and I verily believe that the Defendant made payments towards Account Number 95–706–2697 as follows:
(i) $139.00 on the 1st of June, 1987,
(ii) $139.00 on the 22nd of July, 1987, and
(iii) $139.00 on the 16th of October, 1987."
I rule that the sources and grounds of what is clearly information and also belief are sufficiently stated. I admit the paragraph and, on the same basis, paragraph 11.
Paragraph 12 states:
"As a result of the payment that the Defendant made on the 1st of June, 1987 the principal amount owed was reduced from $8,200.00 to $8,103.68. Owing to the lateness of the Defendant's later payment and the accrual of interest in the mean time there was no further reduction in the principal owed."
I will admit this paragraph on the basis that it is only an arithmetical calculation and conclusion relying on facts already stated.
Paragraph 13 states:
"My further perusal of the Bank's files and records in this matter reveal to me and I verily believe that a number of efforts were made to secure repayment or assurance of repayment of the monies owing to the Plaintiff under the Agreement and finally it was decided to serve a letter of demand on the Defendant."
How this assists to verify the facts upon which the claim is based is not apparent. Accordingly it does not appear to be relevant. In any event, on the authority of the Commissioner of Taxation v Ahern (supra), I rule that the sources of the information relied on are insufficiently stated. The reference to "the Bank's files and records" does not comply with the requirements of O15, r2(1) in the light of that case.
Paragraph 14 states:
"On the 21st of August, 1990 I had a telephone conversation with Mrs Debbie Helm who informed me and I verily believe that on the 5th day of June, 1990 at 11.10 a.m. at Rosco's in Huonville she personally served the Defendant with the letter of demand, a copy of which is annexed hereto and marked 'B'."
Objection was made to this on the basis that the grounds for believing Mrs Helm are not stated. There may be merit in this submission but I will admit the evidence on the basis that it is asserted as information. How it verifies the facts on which the claim is based is not clear to me, but no objection on that ground, that is irrelevance, was made.
Paragraph 15 states:
"I have consulted the Plaintiffs records and the relevant account records and spoken with the Plaintiff's staff members Miss S L Brooke and Mr K J Kroon and as a result of those enquiries and informed and verily believe that the amount stated in the letter of demand annexed hereto and marked 'B' as being due and owing from the Defendant to the Plaintiff was the correct amount."
On the authority of Commissioner of Taxation v Ahern (supra) I rule that all of this paragraph is inadmissible. What "the Plaintiffs records" and "the relevant account records" are is not explained in any way. What the named staff members may have contributed does not appear. The sources and grounds are too imprecise and vague to qualify for admission of the asserted facts.
Paragraph 16 is meaningless without para15 and must fall with it. In any event it does not contain a sufficient statement of sources and grounds for the information and belief, adopting as I do Commissioner of Taxation v Ahern (supra).
Paragraph 17 states:
"When no payment was made following service of the letter of demand this action was commenced to recover the monies due from the Defendant to the Plaintiff."
I rule that this paragraph is inadmissible. It could only be based on information or belief. The sources and grounds are not stated. Further it could only relate to the state of mind of some officer of the bank and it is therefore irrelevant.
I add that para2 of the affidavit does not assist to render admissible what I have ruled inadmissible, for reasons I have derived from Commissioner of Taxation v Ahern (supra).
Accordingly I rule that paras3, 13, 15, 16 and 17 are inadmissible as are the words "and was in default under the Loan Agreement continuously thereafter" in para9. The balance of the affidavit will be admitted into evidence.
Objection was also made to paras3 and 4 of Mr Sugden's affidavit sworn on 4 October 1990. That affidavit was furnished in an attempt to overcome the objection to para3 of Mr Martin's affidavit. I have ruled that paragraph inadmissible. Mr Sugden's affidavit therefore has no relevance and the paragraphs are not admissible.
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