Permanent Mortgages Pty Ltd v Vandenbergh
[2009] WASCA 156
•14 AUGUST 2009
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: PERMANENT MORTGAGES PTY LTD -v- VANDENBERGH [2009] WASCA 156
CORAM: McLURE JA
NEWNES JA
HEARD: 14 AUGUST 2009
DELIVERED : 14 AUGUST 2009
PUBLISHED : 25 AUGUST 2009
FILE NO/S: CACV 95 of 2009
BETWEEN: PERMANENT MORTGAGES PTY LTD
Appellant
AND
JULES JOSEPH VANDENBERGH
MARIA HUBERTINA VANDENBERGH
Respondents
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :MURPHY J
File No :CIV 1074 of 2007
Catchwords:
Practice and procedure - Application by second-named respondent to amend her defence five days before trial - Amendments allowed - Whether primary judge erred in refusing appellant's application for adjournment of the trial - Turns on own facts
Legislation:
Nil
Result:
Leave to appeal refused
Category: B
Representation:
Counsel:
Appellant: Mr D H Solomon
First-named Respondent : No appearance
Second-named Respondent : Mr A J Camp
Solicitors:
Appellant: Solomon Brothers
First-named Respondent : No appearance
Second-named Respondent : Butcher Paull & Calder
Case(s) referred to in judgment(s):
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27
Bank of New South Wales v Rogers (1941) 65 CLR 42
The State of Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40
Wilson v Metaxas [1989] WAR 285
JUDGMENT OF THE COURT: This is an application for leave to appeal against a decision of Murphy J of 13 August 2009 granting leave to the second‑named respondent (Mrs Vandenbergh) to make certain amendments to her defence and refusing an application by the appellant (Permanent Mortgages) for an adjournment of the trial of the action as a consequence of those amendments.
The application for leave to appeal and the appeal was heard on an urgent basis as the trial was due to commence on 18 August 2009. After the conclusion of the submissions on behalf of Permanent Mortgages, we dismissed the application for leave to appeal and the appeal, and said we would publish our reasons later. These are our reasons.
The background
In the action, Permanent Mortgages pleads that, pursuant to a loan agreement made on 20 December 2003, it advanced to the respondents the sum of $192,000. The loan was secured by a mortgage over a property in Mount Claremont which was registered in the name of the respondents. Permanent Mortgages claims that the respondents subsequently failed to make payment of instalments due under the loan agreement. It seeks possession of the property under the mortgage and the sum of the $223,509.68 which it says is owing pursuant to the loan agreement.
The first‑named respondent (Mr Vandenbergh) is the son of Mrs Vandenbergh. Mr Vandenbergh is bankrupt and, apart from denying that Permanent Mortgages is entitled to the relief claimed, has not pleaded to the claim.
Mrs Vandenbergh pleads in her defence that she is 85 years of age and lives in the property, which is situated in an aged person's village. She alleges that she was and is the sole beneficial owner of the property, Mr Vandenbergh's interest being held on a resulting trust for her.
Mrs Vandenbergh says that Mr Vandenbergh borrowed the money from Permanent Mortgages for the purposes of his business and that she obtained no benefit from the transaction. She alleges that she is inexperienced in business and legal matters and reposed complete trust and confidence in her son in such matters. Mrs Vandenbergh pleads, in effect, that, to the knowledge of both Mr Vandenbergh and Permanent Mortgages, she did not receive any independent advice prior to signing the loan agreement and mortgage. Mrs Vandenbergh says she did not know or understand the purpose of the documents and she was not told that signing the documents presented a risk of her home being sold. Mrs Vandenbergh pleads that had she received independent advice she would not have entered into the loan agreement or the mortgage.
It is Mrs Vandenbergh's case that, in the circumstances, the conduct of Permanent Mortgages in entering into and relying on the terms of the loan agreement and the mortgage was unconscionable, and that the loan agreement and mortgage is void or unenforceable.
The action has been set down for trial for three days commencing 18 August 2009. By a chamber summons dated 5 August 2009, Mrs Vandenbergh sought leave to amend her defence and counterclaim. The proposed amendments were set out in a minute dated 3 August 2009. Some of the amendments were not opposed by Permanent Mortgages. In respect of the amendments which were opposed, the application was heard by the primary judge on 7 August 2009. In an ex tempore judgment delivered that day, his Honour declined to allow the amendments, essentially on the ground that they were not properly or sufficiently pleaded. His Honour also said it was unsatisfactory that there was no explanation on oath on behalf of Mrs Vandenbergh as to why the amendments were being sought for the first time so shortly before the trial.
The primary judge directed that if Mrs Vandenbergh intended to apply again to amend her defence and counterclaim, that application should be made by 10 August 2009 and be accompanied by a fresh minute of the proposed amendments, an affidavit explaining the delay, and submissions in support of the application. His Honour also directed that if such an application were made, Permanent Mortgages was to file and serve any submissions or affidavit in response by 12 August 2009. His Honour said that if Permanent Mortgages considered the new minute raised the prospect of an adjournment of the trial, its affidavit should address what further evidence it considered necessary, from whom, and the period required to obtain that evidence. The matter was adjourned to 13 August 2009 at 9.15 am to deal with any further application to amend Mrs Vandenbergh's defence and counterclaim.
A further application was made on behalf of Mrs Vandenbergh by way of a minute of proposed amended defence and counterclaim dated 10 August 2009. At the same time, submissions in support of the application and an affidavit of Mr Butcher, a partner in the firm of solicitors acting for Mrs Vandenbergh, were filed and served. Permanent Mortgages filed submissions in opposition to the application, but did not file any affidavit in relation to a possible adjournment of the trial.
The proposed amendments were (relevantly) to pars 12, 13 and 16 of Mrs Vandenbergh's defence and counterclaim. The amendments to par 12 were to add a plea, in effect, that Permanent Mortgages had actual or constructive knowledge that Mrs Vandenbergh would place trust and confidence in Mr Vandenbergh and would sign the documents without understanding them or under his undue influence, and that Mrs Vandenbergh would receive no benefit from the transaction. The matters relied upon for those allegations were particularised and included, in addition to a presumption to be drawn from Mrs Vandenbergh's age and her relationship to Mr Vandenbergh, a number of matters set out in the respondents' witness statements which had been filed in the action and in documents in the trial bundle.
The proposed amendments to par 13 were largely to a similar effect but relied for the substantive allegations upon the loan application and accompanying documents, all of which we understand from his Honour's reasons are contained in the trial bundle.
The proposed amendments to par 16 were, in substance, to add a plea that the conduct of Permanent Mortgages pleaded in the defence was, in addition to being unconscionable in equity, unconscionable within the meaning of s 51AC of the Trade Practices Act 1974 (Cth).
Permanent Mortgages took a number of objections to the amendments, including as to the form of the various pleas and whether they disclosed an arguable defence. It also argued that some of the proposed amendments would require it to obtain further evidence and contended that the affidavit as to the reason for the late application to amend, if it was admissible at all, was entirely inadequate.
The primary judge heard the application for amendment on 13 August 2009. His Honour considered that none of the amendments was objectionable and, to the extent there was an issue as to whether the proposed pleas disclosed an arguable ground of defence or cause of action by way of counterclaim, that could be resolved at trial. His Honour concluded that the amendments did not in any material way expand the factual ambit of the action. In respect of the contention that Permanent Mortgages would have to obtain further evidence to answer the new pleas, his Honour noted that Permanent Mortgages had not filed an affidavit as to any further evidence it considered it would need and concluded that, given the nature of the amendments, an adjournment of the trial was not warranted.
The grounds of appeal
The grounds of appeal are, in substance, that the primary judge:
(a)erred in finding that the amendments to par 16 of the minute disclosed a reasonable defence when he should have held that it did not plead the elements necessary to make out a cause of action under s 51AC of the Trade Practices Act;
(b)failed properly to apply the principles set out in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 and accepted an irregular and deficient explanation for the late application to amend;
(c)erred in failing to hold that the amendments raised substantial new matters which required an adjournment of the trial if those amendments were to be allowed;
(d)erred in holding that Permanent Mortgages needed to file an affidavit deposing to the basis upon which an adjournment was required when he should have held that an affidavit was only required if some special factual matter was to be relied upon, in circumstances where the need for an adjournment if the amendments were allowed was obvious and adequately raised in the submissions of Permanent Mortgages in opposition to the application.
The disposition of the appeal
As the appeal is from an interlocutory order, the appellant requires leave to appeal. The grant of leave involves the exercise of a discretion. In general, it must be shown that the decision in respect of which leave is sought was wrong, or at least attended with sufficient doubt to justify the grant of leave, and that substantial injustice would be done if the decision is not reversed: Wilson v Metaxas [1989] WAR 285, 294. But those are not rigid or exhaustive criteria, and leave may be granted if, in all the circumstances, it is in the interests of justice to do so: The State of Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40, 56 ‑ 57.
Turning to the first ground of appeal, we are not persuaded that the primary judge was in error in concluding that the proposed amendment to par 16 was adequately pleaded. In any event, whether the proposed amendment was sufficient to make out a case under s 51AC of the Trade Practices Act was a matter which, in the circumstances, could properly be left to trial and no substantial injustice would be done if that course were taken. We would not grant leave to appeal on this ground.
The other grounds of appeal turn substantially on whether an injustice would be caused if the amendments were permitted at such a late stage without an adjournment of the trial. Permanent Mortgages says that the explanation for the delay in seeking to make the amendments was inadequate and, given the significance of the amendments, the primary judge erred in allowing them, or at least in allowing them without adjourning the trial.
It is unnecessary on this application to consider in any detail the principles discussed by the High Court in Aon.
The primary judge found that the proposed amendments did not extend in any material way the factual ambit of the action. His Honour noted that they depended upon material already pleaded, or contained in witness statements previously served or documents already included in the trial bundle. His Honour also found that the proposed amendments were sufficiently pleaded and that any problems of the kind alleged by Permanent Mortgages could properly be left to be dealt with at the trial. We are not persuaded that his Honour erred in making those findings.
The primary judge specifically addressed the adequacy of the affidavit of Mr Butcher in support of the application to amend. His Honour considered that although the affidavit was not ideal, it was adequate. It sufficiently showed that the late amendments came about because the partner with the conduct of the litigation on behalf of Mrs Vandenbergh had not properly understood the significance of the decision in Bank of New South Wales vRogers (1941) 65 CLR 42 until opening submissions came to be drafted for the trial, and the amendments were considered to be necessary in light of the decision in that case. In assessing the adequacy of the explanation provided in the affidavit, his Honour plainly took into account, as in our view he was entitled to do, the significance of the amendments for the conduct of the trial: see Aon [103]. His Honour found that the amendments were not of such a nature that, if allowed, the plaintiff would be prejudiced in the conduct of the trial.
In that connection it was significant, as his Honour pointed out, that there was no affidavit on behalf of Permanent Mortgages deposing to any further evidence Permanent Mortgages considered it would need to adduce in light of the amendments.
Counsel for Permanent Mortgages contended on this appeal that it was not for Permanent Mortgages to establish that it would be prejudiced by the late amendments but for Mrs Vandenbergh to establish that the amendments would not cause prejudice. It is, however, clear that what his Honour had in mind was an affidavit of Permanent Mortgages which would enable an assessment to be made as to the extent of any particular prejudice it would suffer if the amendments were allowed. The information his Honour required could come only from Permanent Mortgages.
We do not consider there is anything in the contention by Permanent Mortgages on the appeal that the time available did not permit an affidavit to be filed. If such an affidavit was warranted, there is no reason to believe that it could not reasonably have been prepared by the time of the hearing on 13 August 2009. The fact that the relevant officers of Permanent Mortgages were (so we were informed on the appeal) resident in Melbourne is of relatively little weight in an age of telephone, facsimile, and the scanning and transmission of documents by electronic means. In the circumstances, it was always open to the solicitors for Permanent Mortgages, if necessary, to seek to rely upon a copy of a duly executed affidavit pending the receipt of the original, if the affidavit was not capable of being sworn by someone in Western Australia either of their own knowledge or on the basis of information and belief.
In light of the nature of the proposed amendments, in our opinion the primary judge was entitled to conclude that Permanent Mortgages would not suffer any prejudice of such a nature as to warrant an adjournment of the trial if the amendments were allowed. We are not persuaded that his Honour's decision to allow the amendments, and to refuse an adjournment of the trial, was in error or attended with sufficient doubt to justify the grant of leave to appeal.
It was for those reasons that we considered leave to appeal should be refused and the appeal dismissed.
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