National Australia Bank Ltd v Busby

[2012] VCC 16

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
BANKING & FINANCE DIVISION

Case No. CI-10-04315

NATIONAL AUSTRALIA BANK LTD	Plaintiff
v.
GARY GORDON BUSBY AND ANOR	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	6 February 2012
DATE OF JUDGMENT:	6 February 2012 (revised on 7 February 2012)
CASE MAY BE CITED AS:	National Australia Bank Ltd v. Busby
MEDIUM NEUTRAL CITATION:	[2012] VCC 16

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Application to adjourn trial – Defendant wishing to investigate possible claims against another defendant and the plaintiff – Inadequate material supporting the allegations or explaining delays – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C. Salpigtidis	Thompsons Lawyers
For the First Defendant	Mr F. Cameron	Rothwell Lawyers
For the Third Defendant	Mr D. Connell

HIS HONOUR:

1The trial of the proceeding is fixed for today. The third defendant, Mr Walters, has made an application to adjourn the trial. The basis for the application is set out in an affidavit sworn by him on 30 January 2012. Mr Walters says the trial should be adjourned because:

a.The second defendant, Mr Leigh, has wrongfully made decisions on behalf of the fourth and fifth defendants, who are both companies. Mr Leigh is only a 40 per cent shareholder and both Mr Walters and the first defendant, Mr Busby, each hold 30 per cent of the shares;

b.Mr Leigh allowed judgment to be entered in default of appearance against the fourth and fifth defendants on 12 October 2010;

c.Mr Leigh allowed judgment to be entered against himself as the second defendant on 20 October 2010 and has, since that time, paid monies to the plaintiff apparently to discharge his obligations to the National Australia Bank, the plaintiff in the proceeding;

d.The funds paid by Mr Leigh to the bank may have improperly come from companies, including the fourth and fifth defendants, in which he is effectively a minority shareholder;

e.The bank advanced monies to the fourth and fifth defendants in circumstances where they were fradulently aware or were negligent in advancing those funds or where the liabilities against which the funds were advanced were likely to have been concocted;

f.Until recently, Mr Walters has been unable to afford legal representation or to meet the cost of retaining an expert to assist him prove the assertion made by him that bank documents which purport to be signed by him were not, in fact, signed  by him.

2   It is necessary, in order to deal with the application, to record some of the history of the proceeding:

a.The action was commenced by writ on 23 September 2010. The bank sought to recover the sum of $1.3 million from the first, second, third and fourth defendants pursuant to the terms of two guarantees, the first dated 27 May 2004 and the second dated 13 September 2007. The claim against the fifth defendant for approximately $500,000 was limited to the first gurantee.

b.The first and third defendants were represented by solicitors, Rothwell Lawyers. The solicitors discontinued acting for Mr Walters after 18 April 2011. On 26 November 2010, the solicitors had filed, what Mr Walters’ counsel Mr Connell described as, a holding defence.

c.A summary judgment application was dealt with by Her Honour Judge Kennedy on 3 August 2011. At that stage, the only active defendants in the proceeding were Mr Busby and Mr Walters. They were given leave to defend. Mr Busby is an accountant. Mr Walters is a solicitor. Mr Connell informed me that Mr Walters has been a solicitor for about thirty years and, for much of that period, practiced as a personal injuries litigator. He is now apparently employed by St. Vincent’s Hospital as its in-house counsel.

d.On 25 August 2011, Mr Walters filed an amended defence. In relation to the first guarantee, he admitted “entering into a guarantee of a limited amount of $300,000 on or about 27 May 2004”. He then relied upon representations which he alleged had been made “to the first defendant and through him to the third defendant that the first guarantee was limited to the amount of $300,000”. The representation referred to the amended defence of Mr Busby, which had been filed on 22 August 2011. Mr Walters, in his amended defence, repeated the allegation by Mr Busby that the representation had been made by Mr Ian Mitchelhill of “the plaintiff in meetings with the first defendant soon before the signing of the first guarantee”. Mr Walters’ amended defence asserted that, “The guaranteed amount of $300,000 was based on the capital contribution of $100,000 by the third and first defendants along with the second defendant, to Wise Wally Products Pty Ltd”.

e.It was further alleged in relation to the first guarantee that, as a result of certain provisions of the Code of Banking Practice relating to members of the Australian Banking Association, including the plaintiff, that the plaintiff had certain obligations to Mr Walters, including an obligation to “obtain his written acceptance of any extension of the guarantee”.

f.In relation to the second guarantee, which the plaintiff said was entered into by a number of parties on 13 September 2007, Mr Walters said that he did not sign the guarantee agreement and his signature was not affixed “with his knowledge, consent or authorisation”.

g.As a result of these allegations, Mr Walters, without specifically filing a counterclaim, purported to claim orders pursuant to the Trade Practices Act, declaring the first guarantee void and otherwise claimed damages or equitable compensation. The pleading was signed by “Matthew Albert, barrister”.

h.On 3 August 2011, Judge Kennedy set down the dispute between the plaintiff and the first and third defendants for trial commencing 5 December 2011.

i.On 5 December 2011, counsel on behalf of Mr Busby, made application for the adjournment of the trial. Although there were certain “personal matters” put in support of the application, the primary basis for the application was that Mr Busby had been seeking to obtain funds in order to continue to retain his solicitors, Rothwell Lawyers. Her Honour accepted Mr Busby’s application and adjourned the trial until today.

3   In the transcript of the proceedings before Judge Kennedy on 6 December 2011, Her Honour described Mr Connell’s position as “supporting the application for an adjournment”. During the course of the discussion between Judge Kennedy and Mr Connell, Mr Connell referred to a number of matters which are also relied upon by Mr Walters in support of the present application to adjourn the trial date. These include:

a.The payment of monies by Mr Leigh to the bank to meet his obligations pursuant to the default judgment;

b.The possibility that it may be necessary to join Mr Leigh as a third party;

c.The position of the fourth and fifth defendants and the involvement of Mr Leigh, Mr Busby and Mr Walters in those companies.

4   Judge Kennedy made it clear during the course of the discussion that if Mr Walters wished to proceed against Mr Leigh or other parties, he should do so promptly and should not raise the issue at the refixed trial date of 6 February 2012. Mr Connell informed Judge Kennedy that his client was in a position to “run the case”. In response to a question from me today as to why Mr Walters appeared to have done very little since the hearing before Judge Kennedy on 5 December 2011, Mr Connell said that Mr Walters had been unable to do anything before Christmas because he was “working sixteen hours a day” and that before he obtained his new job, Mr Walters had not been able to afford a solicitor or to engage an expert witness but now he could afford both.

5   The first defendant is represented at the hearing today by Mr Cameron of counsel. Mr Busby’s solicitors, Rothwell Lawyers, have made application to file a notice of ceasing to act as Mr Busby’s solicitors. Mr Cameron informed me that if Mr Walter’s application for an adjournment were refused, Rothwell Lawyers would proceed, through Mr Cameron, to make an application to file a notice of ceasing to act, leaving Mr Busby to represent himself. Although Mr Busby has filed an affidavit today, no party has asked me to look at that affidavit in relation to the application on behalf of Mr Walters. It would appear, however, that Mr Busby’s efforts to obtain finance so that he could continue to engage his solicitors (which was the reason for the application for adjournment on 5 December 2011) have been unsuccessful.

6   Mr Walters first foreshadowed that he would be making this application in a letter to the plaintiff’s solicitors on 4 January 2012. The letter does little more than repeat the matters raised by Mr Connell before Judge Kennedy on 5 December 2011. The affidavit sworn by Mr Walters in support of the application on 30 January 2012, whilst it contains some further detail, is deficient in many respects:

a.The affidavit does not explain when Mr Walters became aware of a number of critical matters which he now says require further investigation;

b.There is generally a failure to explain delays by him in taking steps earlier in the proceeding or to have done so at a time which may have meant that the present application would not have been necessary;

c.The application makes complaint about the actions by Mr Leigh in relation to the fourth and fifth defendants. If Mr Walters is a shareholder of those companies and if, as he asserts, Mr Leigh has operated those companies whilst denying him access to information since 2010, Mr Walters and presumably also Mr Busby would have rights pursuant to the Corporations Act to seek to rectify that situation. Those rights cannot, however, be exercised in this Court because of the specific provisions of the legislation;

d.Whilst it is asserted that Mr Leigh may have taken steps which would make him liable to Mr Walters and perhaps to Mr Busby, no attempt has been made to set out how those matters might be a pleaded either in the present proceeding or in other proceedings commenced against Mr Leigh.

e.Mr Walters states in relation to both guarantees, “I do not recall signing the guarantees as alleged”. Later, in the affidavit, he states, “Whilst I do not recall, I concede that I may have been willing to sign a guarantee [the first guaranteee] for the amount of $300,000 on the basis that it would be shared at least three ways and that it was likely that I could raise a share in the amount”. This position is somewhat different to Mr Walters’ unequivocal admission in the defence that he entered into the first guarantee.

7   A Court should only deny a party the opportunity of pursuing claims which may be open to it when there are substantial reasons for doing so. In my view, however, Mr Walters has not demonstrated any reason why the present proceeding should be adjourned to permit him to raise issues which have only been referred to in the most general way in correspondence and his recent affidavit. There is very little in the material to suggest that there is a factual basis to the allegations and little or no explanation has been given for the delay by Mr Walters in raising these matters. It is difficult from the material filed by Mr Walters to conclude otherwise than that he is simply raising matters of which he has been aware, at least in the general way he now presents them, for a considerable period.

8   Mr Connell submitted that no prejudice would be suffered by the bank if the proceeding were adjourned because the bank, if successful, would be entitled to claim interest on monies owing. Mr Walters has referred to his limited financial resources in his affidavit. Further, the plaintiff is, in my view, entitled to expect that the Court will not accede to applications made on the barest of materials and without adequate explanation. This is a case where Mr Walters has had the assistance of counsel on each occasion the matter has come before the Court, upon the hearing of the summary judgment application, at the first trial date on 6 December 2011 and today. In my view, I should conclude that in the circumstances, the matters put by Mr Walters in support of his application for an adjournment have been put at their highest. I have determined that they are insufficient and the trial will proceed.

Certificate

I certify that these 5 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 6 February 2012 and revised on 7 February 2012.

Dated: 7 February 2012

Hannah Christensen    

Associate to His Honour Judge Anderson