Paton v Hynes
[2011] WADC 109
•6 JULY 2011
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: PATON -v- HYNES [2011] WADC 109
CORAM: PRINCIPAL REGISTRAR GETHING
HEARD: 6 JULY 2011
DELIVERED : 6 JULY 2011
FILE NO/S: CIV 735 of 2011
BETWEEN: MICHAEL PATON
Plaintiff
AND
PETER GERALD HYNES
Defendant
Catchwords:
Practice and procedure - Summary judgment
Legislation:
Nil
Result:
Judgment awarded in part
Representation:
Counsel:
Plaintiff: Mr G J Mettam
Defendant: In person
Solicitors:
Plaintiff: Butcher Paull & Calder
Defendant: Not applicable
Case(s) referred to in judgment(s):
Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Morgan v Pallister [2004] WASC 188
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Paton v Hynes [2011] WASC 106
The Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Webster v Lampard (1993) 177 CLR 598
Westwind Air Charter Pty Ltd v Hawker De Havilland Ltd (1990) 3 WAR 71
PRINCIPAL REGISTRAR GETHING: [This judgment was delivered extemporaneously on 6 July 2011 and has been edited from the transcript.]
By application dated 26 May 2011 the plaintiff sought summary judgment against the defendant. The plaintiff's claim is for $94,620, said to be the balance of money owing by the defendant to the plaintiff pursuant to a loan agreement dated 20 April 2010.
The plaintiff filed an affidavit in support of the application dated 26 May 2011.
The defendant has filed two documents in opposition to the application; the first is an affidavit sworn 21 June 2011, the second is a defence filed 23 March 2011.
The defendant's appearance for this action was filed on 16 March 2011. The plaintiff is out of time to make an application for summary judgment pursuant to the Rules of the Supreme Court 1971 (WA) O 14 r 1(1). Accordingly, the plaintiff needs leave to bring the application. The defendant opposed the grant of leave on the basis that, in his view, the application was not necessary and is without foundation.
I am minded to grant leave on the basis that no significant work has occurred in the action between the time when the summary judgment application ought to have been filed and the date of the present application.
Relevant law
It is well-established that the power to order summary judgments should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99. Great care must be exercised to ensure that under the guise of achieving expeditious finality a party is not improperly deprived of its opportunity for the trial of the case in the appointed manner by the court: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 129, 130.
The burden of persuasion in this judgment application was considered by Pullin J in Morgan v Pallister [2004] WASC 188 [4] in the following terms:
The plaintiff carries the burden of persuading the court that the claim is a good one, that there is no defence to it, that leave to defend should not be granted, and that judgment should be given for the plaintiff. The party showing cause against the application assumes an evidentiary burden but the overall legal burden of persuasion remains on the applicant. The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried. It is clear however, that the procedure is not confined to cases which are immediately plain and obvious and the fact that a transaction is intricate does not disentitle the plaintiff to relief in a clear case. It was never intended that when the facts are in dispute, an action should be disposed of summarily. If a defendant's affidavit reveals inconsistencies which might in a trial persuade a court not to believe the defendant's evidence, this will not necessarily lead to judgment for the plaintiff. It is not necessary to cite authority for these propositions.
Where there are disputed facts, and in the absence of cross‑examination, the application is to be determined on the basis that the defendant's version of the facts, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action: Webster v Lampard (1993) 177 CLR 598, 608. In the same case, members of the High Court had previously commented that: 'The issue before the learned Master on the application for summary judgment was whether the material before the Master demonstrated that the action should not be permitted to go to trial in the ordinary way because it was apparent that it must fail (602)'.
If, after argument, there remains real uncertainties to the plaintiff's right to judgment without further investigation of the facts, summary judgment must be refused: Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184 [28]; The Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332, 335.
Plaintiff's claim
Turning to the evidence filed by the plaintiff, from Mr Paton's affidavit the following seven facts are established:
(a)that a loan agreement was entered into between the plaintiff and the defendant dated 20 April 2010;
(b)the term of the loan was three months, commencing 23 April 2010;
(c)the principal of the loan was $57,000;
(d)interest under the loan was to be 6% per cent per month capitalised;
(e)that in default the interest rate would increase to 8% per month;
(f)that a demand for a payment was made; and
(g) that the demand remained unsatisfied as at the date of the judgment.
Mr Paton further deposed at par 22 of his affidavit, that, in his belief, there is no defence to the claim.
In my view, on the evidence before me the plaintiff has satisfied the requirements of O 14. Where a plaintiff has done so, it has the prima facie right to an order in terms asked and the burden shifts to the defendant to satisfy the court why a judgment should not be given against him: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110; Westwind Air Charter Pty Ltd v Hawker De Havilland Ltd (1990) 3 WAR 71, 74.
Position of the defendant
To avoid judgment being entered, the defendant must satisfy the court 'with respect to the claim …, that there is an issue or question in dispute which ought to be tried, or that there ought, for some other reason, to be a trial of the claim': Rules of the Supreme Court O 14 r 3(1). As noted from the passage previously quoted from Pullin J in Morgan v Pallister, this is an evidentiary burden, the overall legal burden of persuasion remaining on the plaintiff as the applicant.
From the material filed by the defendant before me, the essence of the defendant's defence is twofold. Firstly, from the defence there is an assertion that he was misled into entering into a bridging finance loan at the rate of 6% per month. In relation to this claim, if judgment is ordered against the defendant on the present claim, there is nothing precluding the defendant from taking separate action in relation to a misleading conduct claim against the plaintiff, and/or his representatives.
The second argument is the fact that the plaintiff, and his finance broker through whom the loan was arranged, were not appropriately licensed pursuant to the relevant consumer credit legislation, and did not comply with the requirements of the relevant consumer credit legislation when entering into loans.
The position of the defendant in relation to compliance with the relevant consumer credit legislation was dealt with by Commissioner Sleight in a related proceedings in the Supreme Court reported as Paton v Hynes [2011] WASC 106. That application concerned the extension of a caveat lodged by Mr Paton over land owned by Mr Hynes securing the obligations of Mr Hynes under the loan agreement before me.
Ultimately, his Honour decided that it was appropriate that the caveat continue. In relation to the question of legality, his Honour made the following comments:
In this matter Mr Hynes is unrepresented. He concedes that under the terms of the loan agreement he owes money to the plaintiff. However, he claims that the loan agreement is unenforceable on the basis that neither the broker who organised the loan nor Mr Paton is a licensed credit provider. Mr Hynes says he relies upon legislative provisions that recently came operative. Although he was unable to provide any particulars it would appear that his reference to the provisions that recently came into operation is a reference to the National Consumer Credit Protection Act 2009 (Cth) (the NCCP Act) which has been adopted by each of the States of Australia. This legislation generally came into operation on 1 July 2010.
At the time the loan agreement came into existence the Consumer Credit (Western Australia )Act 1996 was in operation which put into force in Western Australia a National Consumer Credit Code. This was repealed as from 1 July 2010.
I have not had the benefit of any assistance from Mr Hynes as to the operation of the provisions of the NCCP Act or the repealed Consumer Credit (Western Australia) Act 1996. On the face of it there appears to be difficulties faced by Mr Hynes in relying upon consumer credit legislation. Both s 170 of the Consumer Credit Code under the Consumer Credit (Western Australia) Act 1996 and s 193 of the National Credit Code under the NCCP Act have a provision that in the absence of an express provision in the Code, an agreement is not automatically void and unenforceable due to a breach of the Code. Mr Hynes has been unable to direct me to any provision which makes the loan agreement automatically void or unenforceable. The civil remedies available under the Codes are discretionary albeit they include a power to grant an injunction, compensation or an order from the court declaring that the credit contract is void [5] – [7].
A further issue with the application of the relevant consumer credit legislation was raised by the plaintiff in the hearing before me. This is that the relevant consumer credit legislation does not apply where the loan is for business purposes. The plaintiff asserts that it is apparent from the material before me that the defendant required the funds for business purposes. Reference is made to a letter from Liberty Financial to WA Financial Group dated 9 February 2011 which granted the defendant conditional approval for a loan in the amount of $900,000. That loan was subject to approval which included confirmation that the loan was for business purposes.
Determination
In my view, the appropriate way to determine this application is to grant to the plaintiff judgment in relation to part of his claim. It seems to me that the defendant has only satisfied the court that there is an issue or question that ought to be tried in relation to the level of interest payable. As I mentioned, the interest payable is 6% per month for the three months of the loan, then 8% per month thereafter.
The defendant has not satisfied me that the loan agreement is automatically void or unenforceable. To the extent that there may well be some discretionary power in the relevant consumer credit legislation that may become operative, I am only persuaded that it would be operative in relation to the extent of the interest payable pursuant to the loan. It seems to me that the appropriate order disposing of the matter is an order granting the plaintiff judgment in relation to the principal, and in relation to interest from the date of the loan at the rate payable for pre‑judgment interest pursuant to s 32 of the Supreme Court Act 1935 (WA). In relation to the balance of the claim, the defendant ought to have unconditional leave to defend it.
There is then the question of enforcement proceedings. The defendant, in submissions before me, raised the fact on a number of occasions that he did not have the means to pay this loan. It seems to me that there ought to be some orderly determination of the enforcement of this obligation. To that end, it is appropriate that I also make an order pursuant to the Civil Judgments Enforcement Act 2004 (WA), suspending execution or enforcement of the judgment until 5 August 2011.
This then gives the defendant an opportunity to bring an application to the court seeking a further order suspending enforcement. It also gives the plaintiff the opportunity to bring on an application pursuant to the Civil Judgments Enforcement Act for a means inquiry. At that inquiry the defendant can be examined as to his means to pay.
In summary terms then, it seems to me that, balancing the relevant risks of injustice, the appropriate orders to be made are as follows:
(1)that the plaintiff be entitled to judgment on the principal amount of $57,000, together with interest from the date of commencement of the loan, at the prevailing rates under the Supreme Court Act;
(2)that the defendant have unconditional leave to defend in relation to the balance of the claim; and
(3)that enforcement of the judgment be suspended until 5 August 2011.
I will hear from the parties in relation to costs.
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