Permanent Custodians Limited v Sanders
[2017] VSC 516
•1 September 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2016 04291
BETWEEN
| PERMANENT CUSTODIANS LIMITED (ACN 001 426 384) | Plaintiff |
| - and - | |
| WARREN BRUCE SANDERS | Defendant |
| AND BETWEEN | |
| WARREN BRUCE SANDERS | Plaintiff by counterclaim |
| - and - | |
| PERMANENT CUSTODIANS LIMITED (ACN 001 426 384) AND ORS (according to the attached schedule) | Defendants by counterclaim |
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JUDGE: | Matthews JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 22, 28 June 2017 |
DATE OF JUDGMENT: | 1 September 2017 |
CASE MAY BE CITED AS: | Permanent Custodians Limited v Sanders |
MEDIUM NEUTRAL CITATION: | [2017] VSC 516 |
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PRACTICE AND PROCEDURE – Summary judgment – Whether defence and counterclaim disclose a reasonable defence and cause of action and the defect cannot be cured by amendment – Defendant has no real prospect of success – Civil Procedure Act 2010 ss 61, 62 and 63 – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27 – Effect of promissory note proffered by defendant – Australian and New Zealand Banking Group Limited v Evans, Evans v Esanda Finance Corporation Limited [2016] NSWSC 1742 – Application for summary judgment allowed – Court’s approach where defendant is unrepresented – Trkulja v Markovic [2015] VSCA 298.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S D Hay | Gadens Lawyers |
| For the Defendant | In person |
JUDICIAL REGISTRAR MATTHEWS:
Introduction
This is an application made by summons filed on 18 May 2017 by the plaintiff (‘PCL’) and defendants by counterclaim (collectively, ‘the Applicants’) for summary judgment in respect of PCL’s statement of claim filed with the writ on 24 October 2016 and in respect of the defendant’s notice of defence and counterclaim dated 22 February 2017 (‘the Application’). The Application is made pursuant to ss 61, 62 and 63 of the Civil Procedure Act 2010 (Vic) (‘the CPA’).
For the reasons set out below, the Application for summary judgment will be granted.
I shall refer to this proceeding as the PCL Proceeding.
The Applicants rely on the following materials:
(a) The affidavit of Mark Lee Laurence sworn 15 May 2017 (‘Principal Affidavit’);
(b) The affidavit of Richard Conti sworn 2 May 2017 (‘First Conti Affidavit’);
(c) The affidavit of Trayce Grippo sworn 18 May 2017;
(d) The affidavit of Steven Edward Dover sworn 22 May 2017;
(e) The affidavit of Sonia Apikian sworn 23 May 2017;
(f) The affidavit of Richard Conti sworn 25 May 2017; and
(g) The affidavit of Mark Laurence Lee sworn 27 June 2017.
A written outline of submissions in support of the Application from Counsel for the Applicants was filed on 20 June 2017.
The defendant and plaintiff by counterclaim (hereafter referred to as the defendant) opposes the application.
I am satisfied, from the affidavit of Richard Conti sworn 25 May 2017, that the defendant was served with the summons and affidavits and exhibits relied upon by the Applicants referred to in paragraphs 4(a) to (e) above prior to the hearing. The defendant confirmed that he had received these materials.
On 26 May 2017 I made directions in this proceeding in respect of the Application. I made directions that the defendant was to file and serve any affidavit upon which he wished to rely by 4.00pm on 15 June 2017 and that the parties were to file and serve any written outline of submissions by 4.00pm on 20 June 2017.
Just before the hearing commenced on the first day, the defendant filed with the Court Registry an affidavit affirmed by him on 20 June 2017, with voluminous exhibits (‘Sanders Affidavit’). This had not been served on PCL. The defendant confirmed that he had received a copy of the orders I had made on 26 May 2017.
The defendant represented himself at the hearing. When this proceeding was before me on 7 April 2017 for first directions, at which time the Applicants indicated that they intended to file an application for summary judgment, I informed the defendant of the availability of the Self-Represented Litigants Coordinator at the Court Registry and encouraged him to seek assistance from that Coordinator. I reminded him of this at the commencement of the hearing.
At the commencement of the hearing, I asked the defendant a series of questions so as to be satisfied that he understood the nature of the Application and the consequences for him if the application was successful. I was satisfied that this was understood by the defendant.
I then stood the matter down for half an hour to give the Applicants’ representatives an opportunity to read the defendant’s affidavit and form a view as to whether they wished to proceed that day or seek an adjournment. Upon resuming, counsel for the Applicants indicated that he was ready to proceed and the defendant confirmed that he did not seek an adjournment himself. The Applicants’ representatives were permitted to uplift the exhibits for copying over the lunch adjournment.
At the commencement of the hearing, I had another proceeding called at the same time, being proceeding number S CI 2016 03762 (‘Perpetual Proceeding’). In that proceeding, Perpetual Trustees Victoria Limited (‘Perpetual’) is the plaintiff and Mr Sanders is the defendant. Mr Sanders brought a counterclaim in that proceeding as well, against Perpetual and six others. Both proceedings concern separate loans and mortgages: the PCL Proceeding concerns a loan and a mortgage over the property located at 143 Gibsons Road, Sale, Victoria; and the Perpetual Proceeding concerns a loan and a mortgage over the property located at 173 Macarthur Street, Sale, Victoria. Perpetual and some of the defendants by counterclaim in the Perpetual Proceeding have also made an application for summary judgment, which was also listed for hearing before me on 23 June 2017.
I had both proceedings called at the same time so as to canvass with the parties the most appropriate way to conduct the hearings. I was aware that the defendant was likely to be self-represented (since he had not had legal representatives for any of the directions hearings before me in both proceedings) and that he had some distance to travel (from Sale) to attend Court. For this reason, I had arranged for both proceedings to be listed on the same day, as a convenience to the defendant.[1] The defendant filed a similarly lengthy affidavit that morning in the Perpetual Proceeding which had not been served on Perpetual.
[1]When the summonses were issued, they were issued for consecutive days, on an estimate of around 2 hours each.
After hearing from the parties and considering the volume of the material now before the Court in both proceedings, it was apparent that both applications could not be heard on 23 June 2017. I made further timetabling orders in the Perpetual Proceeding and then adjourned that hearing to a later date. The PCL Proceeding then commenced and when not concluded on that day was adjourned to 28 June 2017.
At this point, I will refer to two other ‘housekeeping’ matters.
At the commencement of the second day of hearing, the defendant sought to file two further affidavits, which was outside the previously ordered timetable. One affidavit simply exhibited a certificate he had drawn up to update the amount he sought by way of counterclaim. The second affidavit (‘Second Sanders Affidavit’) exhibited some material in relation to the case I had drawn to the defendant’s attention on the first day of hearing, being the case of Australia and New Zealand Banking Group Limited v Evans, Evans v Esanda Finance Corporation Limited.[2] PCL stated that it had no objection to these affidavits being filed, and the defendant was permitted to file them.
[2][2016] NSWSC 1742 (‘ANZ v Evans’).
On the second day of hearing, after making various submissions, the defendant turned to the Principal Affidavit and began making detailed submissions about it. It soon became apparent that these submissions went well beyond what was in evidence via any of the defendant’s affidavits (or the affidavits relied on by PCL, for that matter) and that the defendant was effectively giving evidence from the Bar table. I explained the difference between submissions and evidence to the defendant, who then made a submission to the effect that such differences were not clear to him and he wanted to be able to respond, and that if needed he would enter the witness box and give additional evidence orally. PCL objected to the defendant being able to give evidence late and in this way. I stood the matter down briefly and then gave a ruling. In light of the difficulties facing the defendant as a self-represented party and in the interests of him being able to put all relevant material before the Court, I ruled that he would be permitted to make his submissions in the way that he proposed and that, at the end of his submissions, he would be sworn and asked to confirm that the factual matters he referred to in his submissions were true. At the end of that process, PCL was given leave to briefly cross-examine the defendant on the loan application and the operation of the loan in its early life.
I have considered all of the material relied upon by the parties and all oral and written submissions. I have read all of the affidavits and exhibits. Although I have not specifically referred to every aspect of the affidavits, exhibits and submissions in these reasons, they have been taken into account in arriving at this decision.
I note here that the Sanders Affidavit contains some material, both in the body of the affidavit and in some exhibits, which appear to go to the Court’s jurisdiction. The defendant raised this at the commencement of the hearing. I am satisfied that the Court as constituted has jurisdiction in respect of this proceeding and the application for summary judgment. Amongst other things, the Court has subject matter jurisdiction, including as a result of the real property in respect of which possession is sought by PCL is located in Victoria. Further, sections 113F, 113C and 17AA of the Supreme Court Act1986 (Vic) permit the appointment of judicial registrars to this Court and set out the powers and duties of judicial registrars, including matters referred to them by judges or associate judges of this Court. By order made on 19 June 2017 on the Court’s own motion, pursuant to r 84.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), the Application has been referred to me for hearing and determination.
Applicable law
Section 61 of the CPA permits a plaintiff to make an application for summary judgment on the ground that the defendant’s defence or part of that defence has no real prospect of success. Section 62 of the CPA permits a defendant to make an application for summary judgment on the ground that the plaintiff’s claim or part of that claim has no real prospect of success. Section 63 of the CPA provides that the Court may give summary judgment in a civil proceeding if it is satisfied that a claim, defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has ‘no real prospect of success’.
The Court of Appeal has set out the test to be applied in this context in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd.[3] Upon the present state of authority:
(a)The test for summary judgment under s 63 of the [CPA] is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
(b)The test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
(c)It should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)At the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
[3](2013) 42 VR 27, 40 [35].
Section 7(1) of the CPA sets out the overarching purpose, being to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Section 9 of the CPA requires the Court to have regard to these purposes in making any order or giving any direction in a civil proceeding.
As the defendant is self-represented, it is appropriate to set out the applicable principles in respect of the Court’s approach when one of the parties is not represented by a lawyer. First, it is to be noted that a judge has a duty to represented and unrepresented litigants alike to ensure that the hearing is conducted fairly and in accordance with law.[4] What a judge must do to assist a self-represented litigant depends on the litigant, the nature of the case, and the litigant’s intelligence and understanding of the case.[5] The assistance must be proportionate in the circumstances: it must ensure a fair trial and not afford an advantage to the self-represented litigant.[6]
[4]MacPherson v The Queen (1981) 147 CLR 512, 523; Dietrich v R (1992) 177 CLR 292; Werden v Legal Services Board (2012) 36 VR 637, [53].
[5]Abram v Bank of New Zealand (1996) ATPR 42340, 42347; Minogue v Human Rights & Equal Opportunity Commission (1999) 84 FCR 438, [27]-[29] and [33]; Platcher v Joseph [2004] FCAFC 68, [104]; Tomasevic v Travaglini (2007) 17 VR 100, 130.
[6]Tomasevic v Travaglini (2007) 17 VR 100, 130.
In Rajski v Scitec Corporation Pty Ltd Justice of Appeal Samuels said:
In my view, the advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which he or she will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and untutored. But the court should be astute to see that it does not extend its auxiliary role so as to confer upon a litigant in person a positive advantage over the represented opponent … At all events, the absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement … An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent. [7]
[7]Unreported, Court of Appeal, NSW, Full Court, No CA 146 of 1986, (16 June 1986), 14.
The Court of Appeal, in Trkulja v Markovic,[8] has identified the proper scope of assistance to be offered to self-represented litigants in the following terms:
In determining the proper scope of assistance to be offered to a self-represented litigant, the touchstones are fairness and balance. The assistance may extend to issues concerning substantive legal rights as well as to issues concerning the procedure that will be followed. In some cases, it may be necessary for the judge to identify the issues and the state of the evidence in relation to them so as to enable the self-represented litigant to consider whether he or she wishes to adduce evidence. It is elementary that a judge ought to ensure that the self-represented litigant understands his or her rights so that he or she is not unfairly disadvantaged by being in ignorance of those rights. Notwithstanding this, the judge should refrain from advising a litigant as to how or when he or she should exercise those rights.
The High Court has stated that a frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy. Similarly, this Court has endorsed the proposition that ‘[c]oncealed in the lay rhetoric and inefficient presentation may be a just case’.
It is clear that a judge cannot become the advocate of the self-represented litigant. This is because the role of a judge is fundamentally different to that of an advocate. Further, a judge must maintain the reality and appearance of judicial neutrality at all times and to all parties. Accordingly, the restraints upon judicial intervention stemming from the adversary tradition are not relevantly qualified merely because one litigant is self-represented.[9]
[8][2015] VSCA 298.
[9]Trkulja v Markovic [2015] VSCA 298, per Kyrou and Kaye JJA and Ginnane AJA at [39] to [41] (citations omitted).
In determining the Application, I have considered all issues raised by the defendant, whether in the Defence, the Counterclaim, his affidavits or his submissions, to consider whether his defence or counterclaim have any real prospects of success. I have not confined myself to what is pleaded or whether if pleaded it is expressed as part of the Counterclaim when it may apply as a defence (or vice versa). Rather, I have sought to discern whether, amongst the morass of material relied on by the defendant, there is a defence or counterclaim which is capable of being properly pleaded and run. I have not approached this by reference solely to the pleadings which are before me. I have taken this broad approach, without an emphasis on proper form, as the defendant is self-represented. My goal was to ascertain what the defendant’s defences and claims were and determine if they had a real prospect of success, even if there needed to be some re-formulation of them or re-pleading. In my view, this approach is justified given the defendant’s unrepresented status and is consistent with the approach to unrepresented litigants that is summarised at paragraphs 24 to 26 above.
It is also consistent with the approach to be taken to applications for summary judgment under the CPA. As described by the Court of Appeal in Manderson M & F Consulting (a firm) v Incitec Pivot Ltd,[10] in the context of contrasting an application for summary judgment with an application to strike out a pleading or allow an amendment of the pleading:
an inquiry as to whether a case has ‘no real prospects of success’ involves considerations extending beyond an analysis of the sufficiency [of the pleading]. The new power under s 63 is not one to be exercised by reference only to the sufficiency of the pleading.
[10](2011) 35 VR 98, [32].
It is clear that summary judgment will not be granted merely because of inadequacies in the pleading.[11] It is possible that, as an alternative to granting summary judgment, a pleading may be struck out with leave to re-plead, provided that the Court is satisfied that the circumstances show that an arguable case might be pleaded.
[11]Feiglin v Ainsworth (No 2) [2014] VSC 376, [45].
Consideration - Summary judgment on PCL’s statement of claim
PCL’s claim
PCL brings an action against the defendant for payment of monies alleged to be owing pursuant to a loan agreement dated 26 October 2007 (‘Loan Agreement’). In the statement of claim, the amount claimed is $383,543.92. As at 28 June 2017, the principal amount outstanding under the Loan Agreement is, according to the Third Lee Affidavit, said to be $428,870.23 (‘Outstanding Amount’). PCL also brings an action against the defendant for possession of the land described in Certificate of Title Volume 10187 Folio 421 known as 143 Gibsons Road, Sale (‘the Property’) pursuant to a mortgage dated 14 November 2007 over the Property (‘the Mortgage’).
PCL alleges that it advanced the sum of $360,000 to the defendant in November 2007 (‘the Loan’) and that the defendant has defaulted on the Loan Agreement by not making certain payments that were due. PCL alleges that it sent a default notice dated 17 August 2016 (‘the Default Notice’), which was not remedied, and that it was then entitled to payment of the full amount owing on the balance of the Loan and to possession of the Property.
Mr Sanders’ Defence
In his Defence, the defendant:
(a) Does not admit his entry into the Loan Agreement, the giving of the Mortgage or the advancement of the Loan;
(b) Denies that as at 17 August 2016 he was in default under the Loan Agreement and the Mortgage by failing to pay moneys due. The particulars given for this denial are that
(i) ‘until a bona fide completed loan application’ is produced to him by PCL, its claim that ‘there is an agreement and that such agreement is in default is unsubstantiated, frivolous, vexatious and misleads the court’; and
(ii) Even if that agreement and default were established, by delivering a promissory note to Ms Grippo on 27 June 2016 he had ‘ensured there was no default’ under the agreement
(together, the ‘Paragraph 6 Particulars’);
(c) Denies receipt of the Default Notice. This denial is particularised by reference to the Paragraph 6 Particulars;
(d) Denies not remedying the Default Notice, that he owes PCL the sum of $383,543.92 (the amount pleaded in paragraph 10 of the statement of claim), and that PCL is entitled to possession of the Property. These denials are all particularised by reference to the Paragraph 6 Particulars;
(e) Alleges that he discharged any indebtedness to PCL by tendering a promissory note (‘Promissory Note’);[12]
(f) Alleges that PCL has acted unconscionably by commencing this proceeding rather than seeking private mediation and that this conduct means PCL has ‘breached provisions of the National Credit Act and the banking legislation’. Those provisions are not identified or particularised;
(g) Alleges that PCL is listed on certain documents as the ‘Trustee of the Mortgage Trust’ and that it has breached this trust.
[12]See ex ‘MLL-10’ to the Principal Affidavit; ex ‘WBS12’ to the Sanders Affidavit.
Discussion
In order to succeed on its application, PCL must prove the necessary elements of its cause of action against the defendant and establish that the defendant has no real prospect of success in defending PCL’s claim.
The Loan Agreement
Exhibit ‘MLL-3’ is a copy of the Loan Agreement, and exhibit ‘MLL-4’ is a copy of the general terms applying to the Loan Agreement. This is deposed to by Mr Laurence in the Principal Affidavit.[13]
[13]Principal Affidavit [15]-[18].
The Defence in respect of the existence of the Loan Agreement is a non-admission. In the Sanders Affidavit, the defendant appears to be saying that PCL has not proven the Loan Agreement because PCL has not produced the ‘bona fide wet ink signature loan applications’ or the ‘original completed bona fide wet ink signature loan applications’. During the hearing I asked the defendant what a ‘wet ink signature’ was, and he stated that it was a signature applied by hand in pen, not by a computer or a digital image. The defendant has not produced any evidence, let alone credible evidence, to suggest that the copy of the Loan Agreement exhibited at ‘MLL-3’ was not a valid copy or that he did not sign the Loan Agreement. Nor has he produced any evidence to say that the general terms as exhibited at ‘MLL-4’ were not part of the Loan Agreement. During the course of his submission, the defendant stated that he had signed the Loan Agreement.[14]
[14]This was at the hearing on 28 June 2017, and was treated as evidence, as set out in paragraph 18 above.
I am satisfied that PCL has established both that the Loan Agreement was entered into and its relevant terms, including as to the defendant’s obligations to make monthly payments, the giving of security, and PCL’s ability to charge interest.
The Mortgage
Exhibit ‘MLL-5’ is a register search statement certified by the Registrar of Titles pursuant to s 27D of the Transfer of Land Act 1958 (Vic) of the record of information recorded on the folio of the Register in respect of the Property. It shows that the defendant is the registered proprietor of the Property and that the Property is subject to the Mortgage to PCL.
Exhibit ‘MLL-6’ is a reproduction of the Mortgage and of the memorandum of common provisions number AA683 (‘MCP’) referred to in the Mortgage, both certified by the Registrar of Titles pursuant to s 156 of the Evidence Act 2008.
The defendant does not admit giving the Mortgage. This non-admission is particularised as:
By virtue the Defendant cannot verify a loan or advance was made by the Plaintiff, he cannot ascertain whether a mortgage agreement was therefore validly entered. The evidence to support the claim a loan or advance was made by the Plaintiff and a valid mortgage agreement entered will be required trial of these proceedings. Failure to disclose such evidence at trial is otherwise confirmation of the Plaintiff’s fraudulent claim.
The defendant has not submitted that exhibit ‘MLL-6’ is not a valid copy of the Mortgage and the MCP or that he did not sign the Mortgage and he has given no evidence in this respect. During his submissions, I asked the defendant whether he had anything to say about the Mortgage having been signed and witnessed, and he said that he did not.
I am satisfied that PCL has established that the Mortgage was given over the Property by the defendant, that it has established the relevant terms of the Mortgage, and that the Mortgage secures the defendant’s obligations under the Loan Agreement.
The Advance
At paragraphs 22 to 25 of the Principal Affidavit, Mr Lee deposes to PCL having advanced the Loan of $360,000 to the defendant on 14 November 2007 (‘the Advance’) on account number 24720840 (‘Loan Account’). Exhibit ‘MLL-7’ is a copy of the statements in respect of the Loan which record transactions on the Loan Account for the period 23 October 2007 to 10 March 2017, and it records the Advance.
The defendant does not admit the Advance. This non-admission is particularised as:
Until the original completed loan agreement and the Plaintiff’s books of account are produced to the court or the Prothonotary it cannot be adduced by the Defendant or any other party that an agreement was entered or that a loan or advance was made by the Plaintiff.
The defendant now has (through being served with the Principal Affidavit and exhibits) a copy of the Loan Agreement and a copy of the relevant records for the Loan Account. As noted above, he has not given any evidence to suggest that the copy of the Loan Agreement is not a genuine copy.
From his submissions and the Sanders Affidavit, the defendant submitted that the Advance was not made as he was not given money: he was not given gold or silver coins, but instead was given credit. Credit, he submitted, was just ‘zeros on a computer’. In relation to ‘MLL-7’, he did not attack the substance of it but stated in the Sanders Affidavit that:
[a]ny information can be entered into a computer system especially with many terminals as to the correctness, truth and reliability of that information that’s another question, just like how credit or debt is created is it just key strokes on a computer keyboard with nothing of substance backing it up from a particular party (like conjure money out of thin air).[15]
Such unsubstantiated aspersions on PCL’s records are not capable of founding a defence that has real prospects of success.
[15]Sanders Affidavit [20].
During the course of his submissions, the defendant argued that he had funded the Loan himself because he had put his ‘wet ink signature’ on the loan application form. In effect, he regarded this as another reason why there had not been an advance by PCL. Again, this is fanciful. It is also nonsensical.
In cross-examination, the defendant gave oral evidence that the loan he had with National Australia Bank prior to entering into the Loan Agreement had been re-financed via the Loan and that he had received credit by way of an offset account as part of the Loan which he drew down on, including to make loan repayments to PCL.
I am satisfied that PCL has established that the Advance was given and the defendant has no real prospects of succeeding in his defence in this regard.
The default
The defaults relied upon by PCL for the purpose of issuing the Default Notice are the failures to make the minimum monthly interest only repayments due on 1 March 2016, 1 April 2016, 1 May 2016, 1 June 2016, and 1 August 2016 (‘the Defaults’).
The essence of the Defence in this regard (Paragraph 6 of the Defence and the Paragraph 6 Particulars) is to put PCL to its proof and then, if that is established, rely on the alleged discharge via the Promissory Note to contend that there is no operative default. For the reasons already stated, the Loan Agreement and the Advance have been established to the satisfaction of the Court. Based on paragraph 27 of the Principal Affidavit and exhibit ‘MLL-7’, PCL has established that the Defaults occurred. That being the case, there is no real prospect of success in denying that the Defaults occurred. For the reasons set out below, the reliance on the Promissory Note is fanciful.
Service of the Default Notice
PCL submits that the affidavit material relied upon by PCL demonstrates that the Default Notice was served on the defendant at his last address known to PCL, which was also the address for the Property.[16] It was served under cover of a letter dated 17 August 2016 from PCL’s solicitors, Gadens Lawyers, addressed to the defendant. Clause 6.11 of the MCP provides that notices can be given to the defendant by personal delivery or prepaid ordinary post to the address shown on the Mortgage, to the Property, or to his last address known to PCL. That clause also states that ‘[t]he notice will be deemed to be validly served even if not received by You’.[17]
[16]See the Principal Affidavit [28]-[32]; Ms Apikian’s affidavit [4]; First Conti Affidavit.
[17]MCP, Clause 6.11.
PCL submits that in the absence of credible evidence from the defendant that he did not receive the Default Notice, service by post of the Default Notice is to be taken as having been established. That may well be. However, it is not necessary in this case for PCL to rely on deemed service under the Mortgage, for the reasons set out below.
The defendant denies that he was served with the Default Notice and relies on the Paragraph 6 Particulars to particularise that denial. Such particulars do not support the denial of the receipt of the Default Notice.
The Sanders Affidavit does not directly address this element, but it is referred to in paragraph 19 of that affidavit. All that is said there is a barely comprehensible statement about the way various parties are referred to, which is said to be a legal fiction and a criminal fraud.
The evidence establishes that the defendant had been corresponding with PCL and its representatives in the period leading up to the Default Notice being sent, and the address given by him in all of that correspondence was the address to which the Default Notice was sent.[18] Further, the third page of exhibit ‘WBS12’ is a copy of an arrears notice dated 14 June 2016 from Australian First Mortgage Pty Ltd (‘AFM’) (the manager of the Loan on behalf of PCL) to the defendant at 143 Gibsons Road Sale (ie the address of the Property), which is stamped ‘copy’ and has a ‘received’ stamp on it, filled in as having been received on 21/6/2016 by ‘W B Sanders’. This illustrates that correspondence sent to the defendant at that address was received by him in the period up to August 2016.
[18]See exhibits ‘WBS12’, ‘WBS13’, ‘WBS14’.
There is no evidence, let alone credible evidence, that the Default Notice was not received by the defendant. In fact, the defendant’s own evidence demonstrates that he did receive the Default Notice. Exhibit ‘WBS15’ is a letter from the defendant addressed to Ms Apikian and to Gadens Lawyers dated 22 August 2016. In that letter, the defendant says ‘[t]hank you for your letter dated 17 August 2016 and the attached notice alleging default, received 19 August 2016’. He then goes on to refer to the Promissory Note and it having discharged his indebtedness, amongst other things. When I drew his attention to exhibit ‘WBS15’ as evidence that he had received the Default Notice, the defendant said that the notice was not valid, as it did not reflect the Promissory Note. In truth, the defendant denies the validity and effect of the Default Notice, but does not really deny receipt of it. He agreed with this proposition when I put it to him.
Failure to remedy the Defaults
Paragraphs 33 and 38 of the Principal Affidavit and exhibit ‘MLL-7’ establish that the defendant has not remedied the Defaults.[19]
[19]See also Ms Apikian’s affidavit [5].
The defendant also denies not remedying the Defaults, again by reliance on the Paragraph 6 Particulars. Apart from the Promissory Note, he does not claim to have made any payments to remedy the Defaults.
The Promissory Note
The Promissory Note was prepared by Mr Sanders and bears a date of 22 June 2016. It was given the number ‘PNWBS220620161000’. The maker of the Promissory Note was described as ‘SANDERS, Warren Bruce Reg No 196421653’, and Mr Sanders signed the Promissory Note. The document was headed:
PROMISSORY NOTE PROMISSORY NOTE PROMISSORY NOTE
DESTRUCTION, MUTILATION OR SURRENDER TO MAKER DISCHARGES LIABILITY HEREIN
It promised to pay ‘Australian First Mortgage ABN 61 079 790 364’ (ie AFM) the sum of $500,000. It was expressed to be ‘Redeemable on DEMAND at 192 Raymond Street, Sale, Victoria, 3850 At 10:00 hours without; let, delay, hindrance or ado, on The First day of July, AD 2016’. At the bottom of the Promissory Note was the following: ‘Memo: Issued pursuant to P.L. 73-10 (See H.J.R. 192 dated June 5, 1933) and/or its Australian equivalent, The Financial Emergencies Acts’.
From the description in the judgment, the promissory notes in ANZ v Evans were relevantly identical to this Promissory Note, including as to the ‘Memo’ note just described. Garling J noted the following in this respect:
So far as can be ascertained, this is a reference to a piece of US legislation being a 1933 act entitled “Public Law 73-10”, and to a House Joint Resolution of the US Congress passed in 1933, being that numbered 192. There has been no “Financial Emergencies Act” in Australia. That seems to be a reference to a piece of US legislation.[20]
[20]ANZ v Evans [2016] NSWSC 1742, [35].
Mr Sanders deposes that he caused the original Promissory Note to be sent by registered post on 24 June 2016 to Tracye Grippo of AFM. He further deposes that it was sent with the original not negotiable contract and a letter addressed to Ms Grippo, Steven Dover, and to AFM.[21] A copy of these and other documents included in that mailing was exhibited as WBS12.
[21]Sanders Affidavit, [10].
The letter dated 23 June 2016 accompanying the Promissory Note was headed ‘TIME SENSITIVE DOCUMENT ESTOPPEL CONDITIONS APPLY FOR PUBLIC FILING’ and was entitled ‘NOTICE OF TENDER OF PAYMENT’. The subject line was ‘Re: Delivery of payment instrument promissory note “PNWBS220620161000” for discharge of ING DIRECT LoDoc Platinum Option Loan Account Number 24720840 on behalf of W B SANDERS’. The letter is signed by ‘W B Sanders’, described as ‘Administrator and Executor for estate “Warren-Bruce: Sanders”. All rights reserved, none waived ever’. I note that the loan account number referred to is the number of the Loan Account. In part, the letter stated:
Greetings,
Find enclosed your undated former inchoate instrument, duly accepted by and completed by the maker. Attached to the completed contract I deliver in ‘good faith’ payment of Promissory Note – Numbered ‘PNWBS220620161000’ in satisfaction against the outstanding balance of the Loan Account listed above. The Promissory Note is tendered in good faith pursuant to the tenants (sic) of the Australian Bills of Exchange Act 1909 (Cth).
I take this opportunity to humbly apologize for all previous dishonours, such as any previous late payment installments (sic). The current poor Australian economic conditions have caused severe financial stress and hardship upon me. I endeavour to not permit such dishonours to occur again. Please forgive me for all previous delinquencies and dishonours.
…
If it is claimed my delivered Promissory Note is insufficient-deficient to discharge or satisfy the liability to the lender please return the Promissory Note to the maker within three (3) days of the date the payee received it with your/complainant’s accompanying Notice of Dishonour, signed under penalty of perjury. It is my understanding a Promissory Note is as good as cash and must be treated as such.
Alternatively if the Promissory Note (‘the note’), is not returned to maker at the time, date and place stipulated on the Promissory Note it shall be deemed by all parties in this matter that the lender has accepted the note as sufficient consideration to satisfy or discharge all liabilities to Australian First Mortgage.
Should Australian First Mortgage, via its employees or agents, not return or present the note to maker for payment as stated above yet make any unsubstantiated claim as to its deficiency or defectiveness, or pursue collections against me or my estate subsequent to taking delivery of the Promissory Note, it shall be deemed by all parties to the NOT NEGOTIABLE contract that Australian First Mortgage is in commercial default of the contract.
…
I instruct all proceeds of the securitization of my delivered Promissory Note to be applied in the discharge of all the above listed liability to Australian First Mortgage and any remaining proceeds surplus to discharging the aforesaid liabilities thereafter may be disbursed in favour of Australian First Mortgage at its sole discretion.
Finally, thereafter release and forward to me the original Mortgage release forms, as well as the appropriate statement of account showing the current account balance as ‘zero’ and the account ‘closed’.
Part of the ‘not negotiable contract’ included with the Promissory Note was a copy of an arrears notice from AFM dated 14 June 2016 for an arrears amount of $1,729.77. Mr Sanders appears to have annotated and indorsed parts of this notice and incorporated it into his self-styled contract. It is reasonable to infer that receipt of this arrears notice[22] prompted Mr Sanders to draw up the Promissory Note, the letter, and the not negotiable contract.
[22]See paragraph 54 above.
It is common ground that PCL or its agents did not attend at the place specified in the Promissory Note at the specified date and time to redeem it or collect payment, or attempt to redeem it at any other date, time or place. PCL’s solicitors wrote to the defendant in September and October 2016, which included statements that the Promissory Note was not accepted by PCL.[23]
[23]Principal Affidavit [42]; letter dated 1 September 2016 (contained in exhibit ‘MLL-10’); letter dated 11 October 2016 (contained in exhibit ‘MLL-12’).
The defendant says that PCL’s failure to present the Promissory Note for payment or to return it to him within 3 days was a deemed acceptance by PCL of the Promissory Note such that he was released from any liability to PCL, if such liability existed.
The reliance on the Promissory Note for the allegation that the defendant has discharged his indebtedness to PCL is misconceived. As submitted by Counsel for PCL, the situation in Hou v Westpac Banking Corporation was relevantly similar in that the appellants in that case relied on a purported ‘bill of exchange’ to say they had discharged their debt to the bank.[24] In that case, the Court of Appeal observed of that bill of exchange that ‘[i]t is hard to believe [the appellant] could have honestly believed such a transparent device could have any legal effect’.[25] The same can be said here.
[24][2015] VSCA 57.
[25]Ibid [68].
In ANZ v Evans,[26] Justice Garling of the NSW Supreme Court described a relevantly similar promissory note as one created by the defendant, not drawn on any reputable or substantial financial institution, which was not a recognised form of payment under the loan documentation, and which was proffered entirely voluntarily in circumstances where the plaintiff had to attend at a remote rural village at a specific time to collect payment. Garling J held that to contend that such a promissory note excused the defendant from repaying his substantial liability was ‘a nonsense’.[27]
[26][2016] NSWSC 1742.
[27]Ibid [50].
In that case, the defendant had relied on the statement by Lord Denning MR in Fielding and Platt Ltd v Najjar that:
We have repeatedly said in this court that a bill of exchange or a promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary. [28]
Fielding and Platt Ltd v Najjar concerned a contract which called for promissory notes and stipulated that they constituted payment.[29] Garling J in ANZ v Evans viewed it as ‘illogical and incorrect as a matter of legal principle’ to take that statement out of context and then seek to apply it in the way the defendant did in that case.[30]
[28][1969] 2 All ER 150, 152.
[29][1969] 2 All ER 150.
[30]ANZ v Evans [2016] NSWSC 1742, [50].
Here, Mr Sanders also relied on this same statement from Lord Denning.[31] In my view, the defendant’s reliance on this statement is equally illogical and incorrect as a matter of legal principle and his defence that the proffering of the Promissory Note discharged his indebtedness to PCL is equally a nonsense. I agree with Justice Garling that this argument ‘is plainly absurd … there is no principle of law which would permit a person to deliver a promissory note of the kind delivered by the Defendant in discharge of his liabilities.’[32]
[31]Exhibit ‘WBS35’.
[32]ANZ v Evans [2016] NSWSC 1742, [102].
In his submissions, the defendant took me to a number of exhibits to the Sanders Affidavit and the Second Sanders Affidavit.[33] These were said to evidence the proposition that a promissory note was an instrument known to the law. That is not controversial. However, there was nothing in the material relied upon by the defendant to support his allegation that his indebtedness had been discharged by the Promissory Note.
[33]Exhibits ‘WBS33’ to ‘WBS36’, ‘WBS49’ to ‘WBS59’.
For the reasons set out above, the defendant’s reliance on the Promissory Note is fanciful and has no prospects of success. PCL has established that Mr Sanders did not remedy the Defaults.
Entitlement to payment of the Outstanding Amount and to possession of the Property
Having established the Defaults, the service of the Default Notice, and the failure to remedy the Defaults, PCL relies on the relevant provisions of the Loan Agreement and the Mortgage to establish:
(a) Its entitlement to payment of the full amount outstanding, including interest;
(b) The defendant’s obligation to pay PCL’s expenses, including legal and administrative expenses, reasonably incurred in enforcing the Loan Agreement or the Mortgage after default. The relevant terms permit PCL to debit these expenses to the Loan Account when they become payable;
(c) Its entitlement to exercise its rights under any security after default; and
(d) Its entitlement to take possession of the Property in the event of a default.
I am satisfied that PCL has established all of this. I am also satisfied that the relevant provisions of the Transfer of Land Act 1958 (Vic) have been complied with. I am therefore satisfied that PCL is entitled to possession of the Property and to be paid the Outstanding Amount.
PCL relies on the Third Lee Affidavit and exhibit ‘MLL-15’ to establish the Outstanding Amount. Mr Lee deposes to exhibit ‘MLL-15’ being a computer statement recording the debt owed to PCL on the Loan as at the date of that statement. Exhibit ‘MLL-15’ shows the Outstanding Amount (ie the balance due on the Loan as at 28 June 2017) as $428,870.23.
The defendant denies that PCL is entitled to payment of the Outstanding Amount. The basis for this denial is his non-admission of the Loan Agreement, Mortgage and Advance, his denial of the Defaults and the Default Notice, his denial that he has failed to remedy the Defaults, and his allegation that the Promissory Note discharged any indebtedness to PCL. The defendant also submits that he cannot owe more than he borrowed. For the reasons previously set out, the defendant has no real prospect of successfully defending this.
The defendant also denies that PCL is entitled to possession of the Property, for the same reasons as set out in the preceding paragraph. Further, he states in the particulars to paragraph 15 that there was ‘no court order directing possession’.
PCL relies on clause 4.02(c)(i) of the MCP to establish that it had a lawful entitlement to possession of the Property once the Defaults had occurred, the Default Notice had been served, and the Defaults had not been remedied.[34] That clause permits PCL to eject the defendant or any other occupants from the Property and take possession of the Property if there is a default. PCL submits, and I accept, that it was entitled to possession of the Property at that time and it was not required to first obtain a court order for possession.
[34]Exhibit ‘MLL-6’.
Other aspects of the defendant’s Defence and/or submissions
Unconscionability
Mr Sanders’ defence based on unconscionability is summarised in paragraph 32(f) above.
There are two threshold requirements that the defendant must meet before these transactions (or any of them) can be set aside on the grounds of unconscionability. First, there must be a special disability or disadvantage affecting the defendant’s ability to make a judgment as to his best interests. Secondly, that special disability or disadvantage must have been known or sufficiently evident to PCL.[35] Here, there is no evidence to suggest that the defendant has or had such a special disability or disadvantage. Turning to what is sometimes described as ‘situational’ disadvantage – where, in all the circumstances, there is a lack of assistance or explanation where such is necessary,[36] there is no evidence or submission before me that suggests PCL had such a duty to the defendant.
[35]Mackintosh v Johnson (2013) 37 VR 301, 304 [11].
[36]Blomley v Ryan (1956) 99 CLR 362, 405.
In relation to the allegations concerning unconscionability, the defendant relies on a letter dated 27 October 2015 that he sent to the CEO of PCL.[37] During the course of submissions, the defendant read virtually this entire letter, which is quite lengthy, to the Court. It contains various demands of PCL, many of which are barely comprehensible and are nonsensical, including matters such as requiring proof of how PCL creates credit or provides financial accommodation and the letter also makes allegations that PCL has stolen from him. It then states that if PCL does not give the defendant the proof he seeks, then PCL will be taken to have given ‘tacit agreement’ to the following: the debt not existing in the first place, no lawful contract had ever existed, and if there was any alleged lawful amount it has been paid in full. It is then stated that if PCL takes ‘this matter’ to any court then it will have to pay all costs.
[37]Exhibit ‘WBS3’.
It is hardly unconscionable to refuse to accede to such a requirement, unilaterally imposed as it was. Nor can it be said to be a breach of the ‘National Credit Act’ or the banking legislation, whatever that is a reference to. During the course of his submissions, the defendant mentioned the Banking Code, but this was not developed or addressed.
It is also said in the particulars to paragraph 11 of the Defence that in refusing to mediate privately but instead resorting to litigation, that this disclosed ‘unconscionable intent to take immediate possession of the Defendant’s property and evict him into the street, potentially a Commonwealth crime of “genocide” and “intent to bring about conditions of life calculated to bring about physical destruction”’. Again, this is fanciful. A similarly pleaded defence in ANZ v Evans was found to be a defence unknown to the law, embarrassing, and an abuse of process.[38] The same can be said of Mr Sanders’ defence in this regard.
[38][2016] NSWSC 1742 at [113] – [114].
Breach of trust
Paragraphs 12 and 13 of the Defence (summarised in paragraph 32(g) above) are fanciful and have no real prospects of success. The pleading seems to assume that the alleged Mortgage Trust is a trust in respect of the defendant’s mortgage and it is alleged that PCL has breached this trust as he is the beneficiary. Such an allegation is misconceived: the Principal Affidavit explains the arrangement.[39] ING Bank (Australia) Limited (‘ING’) is a funder of loans and mortgages which are held by PCL on trust for ING.[40] AFM is the manager/servicer of the trust.[41] The defendant’s allegations in this regard have no real prospect of succeeding in defence of PCL’s claim.
[39]Principal Affidavit, [1].
[40]ING is the third defendant by counterclaim.
[41]AFM is the second defendant by counterclaim.
Sections of the Sanders Affidavit and several exhibits to it appear to be directed to this aspect of the Defence. As best as I can decipher it from the confused and confusing content on this topic, Mr Sanders claims this means that the true owner of the Loan and Mortgage is not identified, that PCL cannot make a claim against him, that the Loan has been securitized, and that there is some sort of fraud (which is not defined or explained).
The arrangements between PCL, ING and AFM are essentially irrelevant to this case. PCL is the lender of record and the party to the Loan Agreement, and is the mortgagee under the Mortgage. It is the entity entitled to sue on them and is the plaintiff to this proceeding.
Conclusion
In his own words, the defendant’s position comes down to this: he conceded that the Loan was serviced and went on ‘without a hiccup’ for many years, after which he said he found out about ‘how loans are made’ and credit is created. He said his work then dried up and so he created the Promissory Note, which he said was a promise to pay, and which he described as the only remedy left to him. The defendant described his position as all coming down to the Promissory Note. However, this is not a defence, let alone one that has real prospects of success.
I am satisfied, based on all of the material, that PCL has proved the defendant’s liability for monies due under the Loan Agreement in the sum of $428,870.23 plus interest from 28 June 2017 to the date of payment. I am also satisfied that PCL has proved its entitlements under the Mortgage, including as to possession of the Property. I am further satisfied that the defendant’s Defence has no real prospect of success. The problems with the Defence cannot be cured by re-pleading: this is not a case where it is more appropriate to strike out the defence or elements of it and allow the defendant to re-plead. For the reasons set out below, there is nothing in the Counterclaim that is capable of being employed as a defence and that has a real prospect of success. Accordingly, summary judgment should be given for PCL’s claims in the statement of claim.
Consideration - summary judgment application on Mr Sanders’ counterclaim
In his counterclaim, the defendant alleges that the Applicants trespassed on the Property on 3 January 2017 or conspired to convert the Property, the Applicants are liable to pay him $2 million for breach of contract,[42] the Applicants were aware at the time of making the application for the Loan that he could not service the Loan, and he is under hardship.
[42]The defendant updated this to $2,180,821.91 as at 28 June 2017, with the amount of $180,821.91 said to be interest from the period of default from 2 September 2016. See exhibit ‘WBS47’ to the defendant’s affidavit affirmed 27 June 2017.
Trespass, conversion
The allegation in paragraph 15 of the Counterclaim is that the defendants by counterclaim engaged in a conspiracy to evict Mr Sanders from the Property. The particulars given for this allegation are the entry of PCL’s agent on to the Property on 3 January 2017 to take possession, including by changing all of the locks to the buildings on the Property. This is said to constitute a trespass as the agents ‘had passed two “Private Property, Premises are a Diplomatic Mission, for Private Use, No Trespass” notices affixed to the front gate’ and there was ‘no court order directing possession’. This is alleged to be ‘a clear case of attempted “conversion”, trespass and other offences against the Commonwealth of Australia’ and Mr Sanders.
These allegations have no real prospects of success. For the reasons set out above, the evidence establishes that PCL had validly called up the Loan pursuant to the Mortgage on the basis of the Default Notice, which was unremedied, and as at the date of the alleged trespass, it had a lawful entitlement to possession of the Property.[43] PCL submits, and I accept, that it was entitled to possession of the Property at that time and it was not required to first obtain a court order for possession.
[43]See paragraph 76 above.
In submissions, the defendant referred to Exhibit WBS38 which was said to be an extract from Morgan v Fry and others, Lord Denning, 1968. A quote is extracted in that exhibit, as follows: ‘Any creditor CANNOT use a property to satisfy a debt, CANNOT SEIZE your property in lieu of a debt or obligation, including a court order.’ Relying on this, Mr Sanders submitted that PCL was not entitled to possession of the Property without his consent or a court order. A full copy of this case was not provided by the defendant. The Court was not able to locate a case of this name containing this quote. However, nothing turns on it. This submission ignores the provisions of the MCP, as referred to above, which entitle PCL to take possession if there is an unremedied default. Further, it is not supported by any principle of law. A similar argument, and reliance on the same material, was rejected by Garling J in ANZ v Evans.[44]
[44][2016] NSWSC 1742 at [126].
Exhibit ‘MLL-11’ contains reports from the agent engaged on behalf of PCL to take possession of the Property. There is nothing in the Sanders Affidavit contesting this version of events on around 3 and 12 January 2017. The defendant gave oral evidence on this issue, where he contested many of the matters stated in those reports. However, nothing turns on this: whichever version of events is accepted is immaterial as the only relevant point is that PCL was entitled to possession of the Property and was not required to first obtain a court order in that respect.
PCL is entitled to possession of the Property.
Breach of contract/damages
The breach of contract claim is alleged to arise from PCL’s failure to accept the Promissory Note. When the Promissory Note was delivered, it was accompanied by a document styled as a non-negotiable binding contract which provided for damages in the amount of $2 million to be paid to the defendant if the Promissory Note was not accepted or returned within 3 days.[45] It is clear that PCL neither accepted nor returned the Promissory Note. Garling J considered a similar ‘contract’ which was said to have arisen in a similar way in ANZ v Evans. His Honour states that ‘[s]ilence or inaction on the part of a party cannot, where no consideration passes, transform a unilateral demand into a contract. Even less can it constitute a breach of some self-invented contract.’[46] Garling J concluded that:
[t]his process of imposing a contract, in the absence of consideration, let alone any conduct on the part of the recipient parties indicating acceptance, is not founded on any principle of law. It is not open to a person in the position of [the defendant] to impose a contract, and contractual terms, on other parties in the way he asserts. The document itself is meaningless.[47]
[45]Exhibit ‘WBS12’. Further correspondence from the defendant which built on this ‘contract’, such as invoices for $2m, default notices and ‘default judgments’ drawn up by the defendant are equally as incapable of giving rise to the claims made in the Counterclaim. See Exhibits ‘WBS13’, ‘WBS14’ and ‘WBS16’.
[46][2016] NSWSC 1742, [53].
[47]Ibid [155].
Mr Sanders’ allegations based on his own self-invented and unilaterally imposed ‘contract’ are clearly fanciful and have no real prospect of success. No reasonable cause of action is disclosed and the claims in respect of this document are an abuse of process.
Entry into the Loan Agreement
The allegations regarding the defendant’s capacity to repay the Loan are dealt with in the Principal Affidavit and are confirmed in Ms Grippo’s affidavit.[48] I am satisfied that a proper assessment of the application for the Loan was carried out and that the defendant serviced the Loan for many years. His oral evidence was that he signed the loan application but parts of the form were filled out by someone else. The defendant did not make anything of this. His claims in this regard have no real prospect of success.
[48]Principal Affidavit [14] and [43] and exhibit ‘MLL-2’; Ms Grippo’s affidavit at [5].
Hardship
PCL’s counsel explained that when PCL received the Defence and Counterclaim, it treated paragraph 41 of the Counterclaim as a hardship application. Paragraph 41 reads as follows:
In the alternative that the Counter-plaintiff’s pleadings that the liability to the First, Second and Third Counter-defendants was satisfied and discharged by the delivered, taken and accepted promissory note is dismissed, the Counter-plaintiff has given and/or hereby does give notice of hardship under the National Credit Code and says that the Court should set aside or make good the unconscionable provisions of the (alleged) mortgage and (alleged) loan arrangement.
Particulars of Hardship and Unconscionable Conduct
a.Failure to have regard to the capacity to meet repayments and loan serviceability
b. Engaging in asset lending in relation to the loan agreement
The Principal Affidavit refers to this as a ‘hardship notice’ and deposes that letters were sent to the defendant on 16 March 2017 and 8 April 2017 seeking further information so that consideration could be given to the request for hardship assistance. Mr Lee also deposes that the defendant did not respond to these requests for further information and that the hardship request was declined.[49] I also note that the letters to the defendant dated 1 September 2016 and 11 October 2016 provided information to the defendant about how to make a hardship application and provided a form to fill out so that any hardship request could be considered.[50]
[49]Principal Affidavit [44] and exhibit ‘MLL-13’.
[50]See exhibits ‘MLL-10’ and ‘MLL-12’.
The defendant has not led any evidence in respect of his allegation of hardship, other than giving oral evidence that he was not able to provide the Centrelink information referred to in the relevant form, so he had not taken any steps to provide PCL with any information as to hardship. Consequently, his allegations as to hardship must also be regarded as having no real prospect of success.
The Counterclaim also seeks, if it is found that the defendant is liable to PCL, for the Court to set aside the Mortgage or set it aside on terms that will permit him to restructure or refinance the loan with ‘a more reasonable and favourable lender’, pursuant to the Contracts Review Act and/or Australian Securities and Investment Commission Act 2001 and/or National Consumer Credit Protection Act 2009 and the National Credit Code. The Counterclaim does not set out any grounds upon which such relief could be based. The defendant has not led any evidence in this regard which could go to satisfying such grounds or justifying such relief. Accordingly, this has no real prospect of success.
Breach of fiduciary duty
After PCL’s counsel had concluded his submission in reply, the defendant stated that he wanted to raise another point. He referred to his correspondence when sending the Promissory Note and non-negotiable contract and said that by his letter dated 23 June 2016 he had made Steven Dover, a general manager of AFM and the fourth defendant by counterclaim, his fiduciary.[51] This appointment was described in the document as a ‘temporary appointment as fiduciary for Warren Bruce Sanders, for the specific purpose of effecting account settlements’. The content of this document is gibberish and nonsensical. Having referred to this appointment of Mr Dover as a fiduciary in his submission, the defendant queried whether he had a claim against Mr Dover for breach of fiduciary duty. I pointed out to the defendant that he had not pleaded this in his counterclaim. In my view, even though this claim was not pleaded, that is irrelevant, since the claim is fanciful and is incapable of succeeding against Mr Dover. Therefore, there is no utility in allowing the counterclaim to be amended so as to make such a claim.
[51]See exhibit ‘WBS12’.
Claims against the second to seventh defendants by counterclaim
The Applicants submit that the defendant’s counterclaim in respect of the second to seventh defendants by counterclaim must fail.
The second defendant by counterclaim is AFM, the manager/servicer of the trust. The third defendant by counterclaim is ING, the funder and the beneficiary of the trust. The fourth defendant by counterclaim, Steven Dover, is a general manager of AFM. The fifth defendant by counterclaim, Tracye Grippo, is the Director of Mortgages and Distribution with AFM. The sixth defendant by counterclaim, Sonia Apikian, is a partner at the firm of solicitors acting for PCL. The seventh defendant by counterclaim is Gadens Lawyers, the solicitors acting for PCL.
I accept the Applicants’ submission in regard to the second to seventh defendants by counterclaim. The defendant has no cause of action against any of those defendants to counterclaim, they should never have been joined to the proceeding, and the claims against them should never have been brought.
Conclusion
I am satisfied that Mr Sanders’ defences and claims, as best as I have been able to ascertain them from the pleadings and his affidavits, evidence and submissions, have no real prospects of success.
The Applicants’ application for summary judgment, in respect of both the statement of claim and the counterclaim, will be granted.
SCHEDULE OF PARTIES
(by original proceeding)
BETWEEN
PERMANENT CUSTODIANS LIMITED (ACN 001 426 384) Plaintiff - and - WARREN BRUCE SANDERS Defendant (by counterclaim) AND BETWEEN WARREN BRUCE SANDERS Plaintiff by counterclaim - and - PERMANENT CUSTODIANS LIMITED (ACN 001 426 384) First Defendant by counterclaim AUSTRALIAN FIRST MORTGAGE PTY LTD (ACN 079 790 364) Second Defendant by counterclaim ING BANK (AUSTRALIA) LIMITED (ACN 000 893 292) Third Defendant by counterclaim STEVEN DOVER Fourth Defendant by counterclaim TRACEY GRIPPO Fifth Defendant by counterclaim SONIA APIKIAN Sixth Defendant by counterclaim GADENS LAWYERS (ABN 29 991 935 627) Seventh Defendant by counterclaim
7
12
0