National Australia Bank Ltd v Troiani
[2001] QSC 77
•22/03/2001
SUPREME COURT OF QUEENSLAND
CITATION: NAB Ltd v Troiani & Ors [2001] QSC 077
PARTIES: NATIONAL AUSTRALIA BANK LIMITED
ABN 12 004 044 937
(plaintiff/applicant)
v
SANTE TROIANI
(first defendant/first respondent)
RITA CESARINA TROIANI
(second defendant/second respondent)
LUIGI TROIANI
(third defendant/third respondent)
EMILIA TROIANI
(fourth defendant/fourth respondent)
ENIO TROIANI
(fifth defendant/fifth respondent) FILE NO/S: SC No 7759 of 2000
DIVISION: Trial Division
DELIVERED ON: 22 March 2001
DELIVERED AT: Brisbane
HEARING DATE: 19 March 2001
JUDGE: Chief Justice
ORDER:Adjourn proceedings for the parties to present minutes of the appropriate orders.
CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT
– SUMMARY JUDGMENT – applicant seeks summary judgment or striking out of certain paragraphs of respondents’ amended defence – whether applicant entitled to relief claimed, there being no defence
Corporations Law (Cth), s 420A
Property Law Act 1974 (Qld), s 85
Trade Practices Act 1974 (Cth), s 52
Uniform Civil Procedure Rules 1999 (Qld), Part 2 Chapter 9, r 171, r 292
Commonwealth Bank of Australia v Muirhead [1997] 1 QdR
567, followed
State Rail Authority of New South Wales v Codelfa
Constructions (1981-2) 149 CLR 337, referred to
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COUNSEL: IR Perkins for the applicant
AJH Morris QC for the respondents
SOLICITORS: Mallesons Stephen Jaques for the applicant
Suthers Lawyers for the respondents
[1] de JERSEY CJ: The applicant plaintiff seeks summary judgment against the respondents, the first and second defendants, under rule 292 of the Uniform Civil Procedure Rules, or alternatively an order that certain paragraphs of their amended defence be struck out, under rule 171 – paras 2,7-12, 13, 14 and 15-20.
[2] The applicant sues the respondents as guarantors of their company Wide Bay Brickworks Pty Ltd (“the company”). The applicant provided financial facilities to the company in November 1993. On 5 May 1998, in breach of the applicant’s first registered mortgage debenture (clause 4.3(c)), the company granted a bill of sale in favour of Queensland Rail. The applicant appointed receivers and managers to the company under the mortgage debenture on 6 August 1999, after the company had failed to meet demands for payment of moneys said to be owing. On 3 September
1999 Byrne J held those appointments valid, on the basis of the company’s default in giving the bill of sale.
[3] The affidavit of Mr Waters, a manager of the applicant, sworn 19 March 2001 and filed by leave before me, prima facie established (para 3), as at the hearing date (19
March 2001), that the company, and accordingly the respondents as guarantors, owed the applicant $5,329,703.90. The respondents’apparent obligation to pay that amount to the applicant may be gathered from clause 6 of the guarantee.
[4] I turn to the matters upon which the respondents seek to rely by way of defence.
1. Paragraphs 15-20 amended defence
The respondents contend that the applicant breached a duty under s 85 Property Law Act and s 420A Corporations Law to take reasonable care to sell the secured property at market value. Had that duty been fulfilled, they contend, no amount would have been due.
[5] The relevant sales were effected by the receivers and managers. By clause 17.8 of the debenture, the receivers and managers were, as is usual, deemed the agents of the company, with the company “solely responsible” for their acts, and any defaults. The applicant therefore bears no consequent liability (Commonwealth Bank of Australia v Muirhead [1997] 1 Qd R 567).
[6] Mr Morris QC, who appeared for the respondents, submitted that the receivers and managers might nevertheless, upon a full investigation of the matter, be seen to have been acting as agents for the applicant as well. For any factual foundation for this possibility, Mr Morris pointed to page 3 of the respondents’ solicitors’ letter dated 22 February 2001 to the applicant’s solicitors, particularly the circumstance that the same firm of solicitors acted for the applicant and for the receivers and
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managers. That again is not an unusual circumstance, and provides no basis for thinking it likely that there was the sort of dual or concurrent agency for which the respondents contend. Their case is on this material insufficiently arguable to justify its going forward.
[7] 2. Paragraphs 13, 7-12 amended defence
The respondents allege that it was a condition precedent to their liability as guarantors, that the applicant would “perform its promise to provide certain finances” to the company. More particularly, the respondents allege an implied term of the relevant bill facility “that maturing bills would be redrawn and accepted as replacement bills of equal face value”; or that that was a matter of further agreement established by “conduct” between the parties. The respondents allege that the applicant breached that arrangement by redirecting maturing bills to a new account, and refusing the company access to the full bill facility. This is said to have discharged the guarantee, by operation of equity, or to have released the respondents contractually from their obligation - through non-fulfillment of the condition precedent.
[8] It must first and fundamentally be noted that it is not possible to find any sufficient factual foundation for these contentions by reference to the affidavit material filed in the case. That aside, there is another fundamental problem facing the respondents.
[9] That rests in clause 13.2(f) of the guarantee, which provides that the respondents’ obligations are “not affected” by any “stopping … or refusal of any credit, banking facility or other arrangement … given to the (company) … whether with or without
(the respondents’) consent or knowledge”. The case sought to be raised by the respondents would involve a refusal, or at least a constructive refusal, of credit to the company.
[10] To the extent that the respondents seek to raise a condition precedent to their liability under the guarantee, their case would be untenable as inconsistent with clause 13.2(f) (cf State Rail Authority of New South Wales v Codelfa Constructions
(1981-2) 149 CLR 337, 347).
[11] Clause 13.2(f) would also defeat the claim to an equitable discharge of their obligation as sureties.
[12] Mr Morris sought to exclude the operation of clause 13.2(f) on the basis that any refusal of credit was said to amount to a breach of the financing arrangements. The clause is however cast sufficiently widely for that not to matter: even if it be factually correct. It is that clause which relevantly defines, and with sufficient clarity, the extent of the guarantor’s separate liability in that situation to the applicant.
[13] 3. Paragraph 2
In para 2 of the amended defence the respondents deny the applicant’s allegation, in paragraph 5 of the amended statement of claim, that as at 1 April 1999 the company was in default in making payments under its lease facility. (Notice of demand was allegedly served on the company on 6 April.)
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[14] This is immaterial. It was not necessary for the company to have been in default. See clause 6.3 of the guarantee. In any event the company clearly was in default: as found by Byrne J (in proceedings in which Mr Troiani was a party), the company defaulted by executing the bill of sale.
[15] 4. Paragraph 14
The respondents allege in this paragraph that the applicant engaged in misleading and deceptive conduct, contrary to s 52 of the Trades Practices Act, by misrepresenting to the company “the debt and interest in arrears were required to be repaid”: that is, following the applicant’s alleged breach in failing to “perform” its financial commitments to the company.
[16] Since the grant of the bill of sale to Queensland Rail constituted a default by the company, demanding payment from the company of moneys due could not itself have involved a misrepresentation. The facility could be recalled upon default.
[17] As to amount, the crux of the complaint concerns the reduction in the overdraft (see Mr Troiani’s affidavit filed by leave, paras 15 and 17). The overdraft was however available “at all times .. at the discretion of the bank” (page A4 exhibit to affidavit
of D Waters filed 2 March 2001), and properly regarded as repayable on demand
(as at the time this demand was in fact made).
[18] 5. Paragraphs 21, 23
The respondents allege here that the applicant failed to give credit for the proceeds of certain sales. The allegations were not established, however, by evidence from the respondents, while on the other hand they were contradicted by material from the applicant.
[19] 6. Sale at undervalue
In para 29 of his affidavit, Mr Troiani asserts that the applicant sold some of the property at an under-value. In ascribing particular values, he again engages in no more than assertion, however, because Mr Troiani is not shown to have any expertise in valuation. This sort of approach cannot avail the respondents in opposing a grant of summary judgment.
[20] 7. Delay
The respondents relied finally on alleged delay on the part of the applicant, based around its having delivered two amended statements of claim and having requested particulars. In view especially of the inclusion in rule 292 of the words “at any time”, this ground of opposition cannot be sustained.
[21] I am satisfied that the applicant has complied with Part 2 of Chapter 9 of the Uniform Civil Procedure Rules, that the applicant is entitled to the relief claimed, there being no defence, and that there is no need for a trial. The applicant is entitled to judgment against the respondents, in the amount as at 19 March 2001 of
$5,329,703.90. It was agreed that I should in these circumstances adjourn the proceedings with an invitation to the parties to present minutes of the appropriate orders.
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