Perpetual Trustees Victoria Limited v Sanders
[2017] VSC 555
•18 September 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2016 03762
| PERPETUAL TRUSTEES VICTORIA LIMITED (ACN 004 027 258) | Plaintiff |
| - and - | |
| WARREN BRUCE SANDERS | Defendant |
| WARREN BRUCE SANDERS | Plaintiff by Counterclaim |
| - and - | |
| PERPETUAL TRUSTEES VICTORIA LIMITED (ACN 004 027 258) AND OTHERS (according to the attached schedule) | Defendants by Counterclaim |
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JUDGE: | Matthews JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 9 August 2017 |
DATE OF RULING: | 18 September 2017 |
CASE MAY BE CITED AS: | Perpetual Trustees Victoria Limited v Sanders |
MEDIUM NEUTRAL CITATION: | [2017] VSC 555 |
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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 – Application for summary judgment allowed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms S Cipriano | Kemp Strang |
| For the Defendant | In person |
JUDICIAL REGISTRAR:
Introduction
This is an application made by summons filed on 18 May 2017 by the plaintiff and first defendant by counterclaim (‘Perpetual’) and the third, sixth and seventh defendants by counterclaim (collectively with Perpetual, ‘the Applicants’) for summary judgment in respect of Perpetual’s statement of claim filed with the writ on 14 September 2016 and in respect of the defendant’s notice of defence and counterclaim filed 27 March 2017 (‘the Application’). The Application is made pursuant to ss 61, 62 and 63 of the Civil Procedure Act 2010 (Vic) (‘the CPA’). Alternatively, the Applicants seek judgment pursuant to r 23.01 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’). In the further alternative, they seek orders striking out the defence and counterclaim pursuant to r 23.02 of the Rules.
For the reasons set out below, the Application for summary judgment will be granted.
I shall refer to this proceeding as the Perpetual Proceeding.
The Applicants rely on the following materials:
(a) the affidavit of Jay Devendra Shastri affirmed 12 May 2017 (‘First Shastri Affidavit’);
(b) the affidavit of Jeremy Richard Etienne Sutton sworn 12 May 2017 (‘Sutton Affidavit’);
(c) the affidavit of Jay Devendra Shastri affirmed 20 June 2017 (‘Second Shastri Affidavit’); and
(d) the affidavit of Jay Devendra Shastri affirmed 2 August 2017 (‘Third Shastri Affidavit’).
A written outline of submissions in support of the Application from Counsel for the Applicants was filed on 20 June 2017.
The defendant (who is also the plaintiff by counterclaim, hereafter referred to as Mr Sanders) opposes the Application.
On 26 May 2017 I made directions in this proceeding in respect of the Application. I made directions that Mr Sanders 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.
Mr Sanders had not filed any affidavit material prior to the day upon which the Application was first listed for hearing, being 22 June 2017. Just before the hearing commenced on that day, Mr Sanders filed with the Court Registry an affidavit affirmed by him on 20 June 2017, with voluminous exhibits (‘First Sanders Affidavit’). This had not been served on Perpetual. Mr Sanders confirmed that he had received a copy of the orders I had made on 26 May 2017.
Mr Sanders represented himself at the hearing. When this proceeding was before me on 28 April 2017 for first directions, at which time the Applicants indicated that they intended to file an application for summary judgment, I reminded Mr Sanders of the availability of the Self-Represented Litigants Coordinator at the Court Registry and encouraged him to seek assistance from that Coordinator.
At the commencement of the hearing on 22 June 2017, I had another proceeding called at the same time, being proceeding number S CI 2016 04291 (‘PCL Proceeding’). In that proceeding, Permanent Custodians Limited (‘PCL’) is the plaintiff and Mr Sanders is the defendant. Mr Sanders brought a counterclaim in that proceeding as well, against PCL and six others. Both proceedings concern loans and mortgages: the PCL Proceeding concerns a loan and mortgage over the property located at 143 Gibsons Road, Sale, Victoria; while the Perpetual Proceeding concerns a loan and mortgage over the property located at 173 Macarthur Street, Sale, Victoria. PCL and the defendants by counterclaim in the PCL Proceeding had also made an application for summary judgment, which was also listed for hearing before me on that day.
It was then readily apparent that both matters could not proceed on that day, as they were clearly going to take longer than one day. I made timetabling orders regarding the Perpetual Proceeding and adjourned it to 14 July 2017.[1]
[1]Mr Sanders subsequently requested an adjournment due to him suffering from the flu, which was not opposed by the Applicants, and the hearing was adjourned to 9 August 2017.
The PCL Proceeding was heard on 22 and 28 June 2017 and judgment was delivered on 1 September 2017, in which the application for summary judgment was granted.[2]
[2]Permanent Custodians Limited v Sanders [2017] VSC 516 (‘PCL Judgment’).
As well as the First Sanders Affidavit, Mr Sanders relies on two further affidavits affirmed by him, on 30 June 2017 (‘Second Sanders Affidavit’) and 9 August 2017 (‘Third Sanders Affidavit’).
In the course of his submissions, at times Mr Sanders gave evidence from the Bar table, by referring to matters which were not in evidence through any of the affidavits that had been filed. The Applicants’ counsel objected to this, however I indicated that I would allow it (within moderation) given his unrepresented status.
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.
Mr Sanders challenged the Court’s jurisdiction in respect of this proceeding and the Application on a number of grounds. These challenges were referred to in the First and Third Sanders Affidavits and in his submissions.
During the course of his submission, Mr Sanders read extensively from exhibit ‘WSB61’ to the Third Sanders Affidavit. This was said to be extracts from ‘The Annotated Constitution of Australia by Quick & Garran’. Mr Sanders’ submissions on this subject were barely comprehensible. As best as I can make out, he appeared to be submitting that the powers to make laws with respect to bills of exchange and promissory notes and to banking were reposed in the Commonwealth Parliament, and not the States, and that therefore a State court did not have jurisdiction to deal with the matters raised in this proceeding.
I am satisfied that the Court as constituted has jurisdiction in respect of this proceeding and the Application.
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 Perpetual being located in Victoria. The subject matter of this proceeding does not concern the making of laws with respect to bills of exchange and promissory notes or to banking, and there is no need for me to determine Mr Sanders’ submission as to the division of powers between the Commonwealth and the States. In any event, if federal jurisdiction is to be exercised, State Supreme Courts are invested with federal jurisdiction.[3]
[3]Judiciary Act 1903 (Cth), s 39.
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 Rules, 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.[4] 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.
[4](2013) 42 VR 27, 40 [35].
Section 7(1) of the CPA sets out its 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.
Rule 23.01 of the Rules provides:
(1) Where a proceeding generally or any claim in a proceeding—
(a) is scandalous, frivolous or vexatious; or
(b) is an abuse of the process of the Court—
the Court may stay the proceeding generally or in relation to any claim or give judgment in the proceeding generally or in relation to any claim.
(2) Where the defence to any claim in a proceeding is scandalous, frivolous or vexatious, the Court may give judgment in the proceeding generally or in relation to any claim.
(3) In this Rule—
(a) a claim in a proceeding includes a claim by counterclaim and a claim by third party notice; and
(b) a defence includes a defence to a counterclaim and a defence to a claim by third party notice.
Rule 23.02 of the Rules provides:
Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading—
(a) does not disclose a cause of action or defence;
(b) is scandalous, frivolous or vexatious;
(c) may prejudice, embarrass or delay the fair trial of the proceeding; or
(d) is otherwise an abuse of the process of the Court—
the Court may order that the whole or part of the indorsement or pleading be struck out or amended.
At paragraphs 24 to 26 of the PCL Judgment, I summarised the applicable principles in respect of the Court’s approach where one of the parties is not represented by a lawyer. I adopt and follow that summary.
At paragraphs 27 to 29 of the PCL Judgment, I explained the approach I took to the application in that case given that Mr Sanders was unrepresented. I have taken the same approach in respect of the Application in this proceeding.
Consideration - Summary judgment on Perpetual’s statement of claim
Perpetual’s claim
Perpetual brings an action against Mr Sanders for payment of monies alleged to be owing pursuant to a loan agreement dated 10 October 2007 (‘Loan Agreement’).[5] In the statement of claim, the amount claimed is $194,523.22. As at 2 August 2017, the principal amount outstanding under the Loan Agreement is, according to the Third Shastri Affidavit, $245,494.85 and the accrued interest is $2,295.36, a total of $247,790.21 (‘Outstanding Amount’). Perpetual also brings an action against Mr Sanders for possession of the land described in Certificate of Title Volume 11105 Folio 197 located at 173 Macarthur Street, Sale (also known as Lot 1, 173 Macarthur Street, Sale (‘Property’) pursuant to a mortgage dated 22 October 2007 over the Property given by Mr Sanders to Perpetual which was registered on the certificate of title for the Property on 25 October 2007 (‘Mortgage’). [6]
[5]In the Statement of Claim, the date of the Loan Agreement is alleged to be 22 October 2007. However, the First Shastri Affidavit refers to the loan offer dated 10 October 2007 which was executed by Mr Sanders and thus became the Loan Agreement. Exhibit ‘JDS-2’ to the First Shastri Affidavit is a copy of the Loan Agreement: it does not reveal the date upon which it was signed by Mr Sanders. However, nothing turns on whether the Loan Agreement was dated 10 or 22 October 2007.
[6]The Statement of Claim at [3] refers to the Property as being in Certificate of Title volume 11105 folio 197, however the prayer for relief refers to it as Certificate of Title volume 1105 folio 197. I have assumed the latter to be a typographical error, since the First Shastri Affidavit refers to it at [16] as Certificate of Title volume 11105 folio 197, and exhibit ‘JDS-4’ to that affidavit is a copy, certified by the Assistant Registrar of Titles pursuant to s 27D of the Transfer of Land Act 1958, of the record maintained by the Registrar of Titles for that certificate of title. It shows the street address of the property referred to in the Certificate of Title as 173 Macarthur Street, Sale, that Mr Sanders is the registered proprietor, and that the mortgage to Perpetual with dealing number AF429863J was registered on 25 October 2007.
Perpetual alleges that it advanced the sum of $180,000 to Mr Sanders between 22 October 2007 and 31 July 2009 (‘Loan’) and that Mr Sanders has defaulted on the Loan Agreement by failing to make payments due in December 2015 and April 2016. Perpetual alleges that it sent Mr Sanders a default notice dated 16 May 2016 (‘Default Notice’), which was not remedied, and that it is 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 notice of defence (‘Defence’) and counter claim (‘Counterclaim’) filed 27 March 2017, Mr Sanders:
(a) Does not admit his entry into the Loan Agreement, the giving of the Mortgage or the advancement of the Loan;
(b) Does not admit being in default under the Loan Agreement or the Mortgage. The particulars given for this non-admission are that:
(i)‘Until a bona fide original completed loan application’ is produced to him by Perpetual, its claim that ‘there is an agreement and that such agreement is in default is unsubstantiated, frivolous, vexatious and misleads the court’;[7] and
[7]Defence [6].
(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.[8]
[8]Defence [6].
(together, the ‘Paragraph 6 Particulars’);
(c) Denies receipt of the Default Notice. In denying receipt of the Default Notice, Mr Sanders particularises it by reference to the Paragraph 6 Particulars. Such particulars do not support the denial of the receipt of the Default Notice;
(d) Denies not remedying the Default Notice, that he owes Perpetual the sum of $194,523.22 (the amount pleaded in paragraph 9 of the statement of claim), and that Perpetual 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 Perpetual by tendering a promissory note (‘Promissory Note’);[9]
(f) Alleges that Perpetual has acted unconscionably by commencing this proceeding rather than seeking private mediation and that this conduct means Perpetual has ‘breached provisions of the National Credit Act and the banking legislation’. Those provisions are not identified or particularised; and
(g) Alleges that Perpetual is listed on certain documents as the ‘Trustee of the Mortgage Trust’, and that it has breached this trust. This is alleged to have caused Mr Sanders damages as he ‘is harmed by the continuous stress of addressing the litigation’ and ‘[m]eeting the costs of defending these proceedings and finding time to draw up the documentation which deprives the Defendant from his potential business activities and therefore impedes his income’.[10]
[9]A copy of which is contained in exhibit ‘WBS 12’ to the First Sanders Affidavit.
[10]These alleged damages are particularised at paragraph 15 of the Defence.
Mr Sanders’ Defence in this proceeding is in relevantly and closely similar terms to his defence in the PCL Proceeding.
Discussion
To succeed on its application, Perpetual must prove the necessary elements of its cause of action against Mr Sanders and establish that he has no real prospects of success in defending Perpetual’s claim.
The Loan Agreement
Exhibit ‘JDS-2’ is a copy of the Loan Agreement, and exhibit ‘JDS-3’ is a copy of the general terms and conditions applying to (‘T&Cs’), and forming part of, the Loan Agreement. This is deposed to by Mr Shastri in the First Shastri Affidavit.[11]
[11]First Shastri Affidavit [12] and [14].
The Defence in respect of the Loan Agreement is a non-admission. Mr Sanders contends that Perpetual has not proven the Loan Agreement because it has not produced the ‘original completed bona fide wet ink signature loan applications’,[12] by which I understand him to mean a signature applied by him by hand in pen, not by a computer or a digital image. Mr Sanders has not produced any evidence, let alone credible evidence, to suggest that the copy of the Loan Agreement exhibited at ‘JDS-2’ is not a valid copy or that he did not sign the Loan Agreement. Nor has he produced any evidence to say that the T&Cs were not part of the Loan Agreement. In his submissions, Mr Sanders said that he had signed the Loan Agreement.
[12]First Sanders Affidavit [21] (emphasis altered).
I am satisfied that Perpetual has established that the Loan Agreement was entered into by Mr Sanders and that it has established its relevant terms, including as to Mr Sanders’ obligations to make monthly payments, the giving of security, and Perpetual’s ability to charge interest.
The Mortgage
Exhibit ‘JDS-4’ is a register search statement certified by the Assistant 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 (‘Certificate of Title’). It shows that Mr Sanders is the registered proprietor and that the property is subject to the Mortgage to Perpetual.
Exhibit ‘JDS-5’ is a reproduction of the Mortgage and of the memorandum of common provisions number AA840 (‘MCP’) referred to in the Mortgage. This reproduction is certified by the Assistant Registrar of Titles pursuant to s 156 of the Evidence Act 2008 (Vic).
The Mortgage is dated 22 October 2007, and the Certificate of Title establishes that it was registered on the title for the Property on 25 October 2007. The Mortgage as contained in exhibit ‘JDS-5’ is expressed to be over the land described in certificate of title volume 5072 folio 376 and contains an acknowledgment that it was given for the loan of $192,000. The Mortgage was signed by Mr Sanders and witnessed by Debbie Woods. The certificate of title volume and folio details referred to in the Mortgage are different to that contained in the Certificate of Title.
In order to establish the link between the Loan Agreement, the Mortgage and the Certificate of Title for the Property, it is necessary to briefly set out some background information. Counsel for the Applicants provided this explanation, which Mr Sanders confirmed was correct.
The Loan Agreement provides that the amount of credit to be provided to Mr Sanders was $192,000. It sets out the security that is to be provided for the Loan, which is described as security over the property at ‘173 Macarthur Street Sale VIC 3850 Volume: 5072 Folio: 376’. The Certificate of Title describes the land as ‘Lot 1 on Plan of Subdivision 610813F. Parent Title Volume 05072 Folio 376. Created by instrument PS610813F 28/11/2008’. This parent title is the same as the title details referred to in the Loan Agreement and in the Mortgage.
Some time in 2008, Mr Sanders procured a subdivision of the land at 173 Macarthur Street, Sale into two lots. Perpetual’s mortgage was to remain on Lot 1, while Lot 2 (which was to become 81 Lansdowne Street, Sale) would not be subject to any mortgage to Perpetual. As part of this arrangement, Perpetual and Mr Sanders agreed that the credit limit on the Loan would be reduced by $12,000 to $180,000. Exhibit ‘JDS-6’ is a copy of a facsimile from Mr Sanders to Perpetual’s agent summarising this arrangement.
As referred to in paragraph 30(a) above, Mr Sanders does not admit giving the Mortgage. This non-admission is particularised in the Defence as follows:
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 at trial of these proceedings. Failure to disclose such evidence at trial is otherwise confirmation of the Plaintiff’s fraudulent claim.[13]
[13]Defence [4].
Mr Sanders has not submitted that exhibit ‘JDS-5’ 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. It is also noted that this non-admission is inconsistent with Mr Sanders’ confirmation at the hearing of the arrangements referred to in paragraph 41 above.
I am satisfied that Perpetual has established that Mr Sanders gave the Mortgage over the Property, that it secures Mr Sanders’ obligations under the Loan Agreement, and the relevant terms of the Mortgage. The references to different title details in the Loan Agreement and the Mortgage have been adequately explained.
Mr Sanders submitted that the original Loan Agreement and Mortgage had to be kept together and that if they were separated, then they were void. This submission is rejected.
The Advance
At paragraphs 23 and 24 of the First Shastri Affidavit, Mr Shastri deposes to Perpetual having advanced the (revised) Loan of $180,000 to Mr Sanders (‘Advance’) on account number MN360286003102812602 (‘Loan Account’). Exhibit ‘JDS-7’ is a copy of the statements in respect of the Loan which record transactions on the Loan Account for the period 22 October 2007 to 30 April 2017 (‘Statements’). Mr Shastri deposes, and the Statements confirm, that the Advance occurred over several drawdowns between 22 October 2007 and 22 July 2009.
Mr Sanders does not admit the Advance. This non-admission is particularised as follows:
a. Despite the Defendant contacting the Plaintiff by registered mail delivered 29 October 2015 directing the Plaintiff to produce evidence to sustain any claim that it ‘advanced’ or ‘loaned’ the Defendant money, credit or funds, as well as permit an opportunity to examine the original loan application and books of account to see how any alleged loan was treated by the lender, the Plaintiff failed, refused or neglected to comply, accommodate or accede to the directions of the Defendant.
b. By virtue of the Plaintiff’s failure, refusal or neglect in providing the Defendant its evidence to sustain its claims of a loan or advance to the Defendant and evidence it was creditor to an advance or loan, the Defendant is not in possession of information or facts to determine whether the Plaintiff ‘advanced’ the Defendant anything or if it delivered the Defendant consideration for the purchase of the original completed loan application. However the Defendant is inclined to believe and asserts the Plaintiff did not make an advance, nor advance a loan any money or credit [sic][14]
[14]Defence [2] (emphasis altered).
Mr Sanders now has (through being served with the First Shastri Affidavit and exhibits) a copy of the Loan Agreement and the Statements. He has not given any evidence to suggest that the copy of the Loan Agreement is not a genuine copy.
Mr Sanders 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, which he described as ‘just zeros on a computer’. In relation to the Statements, he did not attack the substance of those documents or what they represented, but stated in the First 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 comments are not capable of founding a defence that has real prospects of success.
[15]First Sanders Affidavit [21].
Mr Sanders also submitted that he had funded the Loan himself, through putting his ‘wet ink signature’ on the loan application form. This was postulated as another reason why the Advance had not occurred. This is both nonsensical and fanciful.
I am satisfied that Perpetual has established that the Advance occurred and that Mr Sanders has no real prospect of succeeding in his defence in this regard.
The default
The defaults relied upon by Perpetual for the purpose of issuing the Default Notice are the failures to make the minimum monthly interest only repayments due for the months of December 2015 and April 2016 (‘the Defaults’). Clause 22.1 of the T&Cs state that it is an event of default under the Loan Agreement to fail to pay on time any payment that is due. Clause 7.1 of the MCP specifies that a failure to pay the secured money on time is an event of default. While not without confusion, Mr Sanders said that he entered into some arrangement with Perpetual for the months of January, February and March 2016 due to some hardship he was experiencing at the time.[16] The Statements reflect the Defaults and what appears to be differential treatment for the months of January, February and March 2016 when compared to the other entries. The Statements also reflect that no monthly repayments were made from May 2016 to April 2017 (which is where the Statements end), although those failures to make monthly repayments are not relied on for the purposes of the Default Notice.
[16]This was one of the occasions where I permitted Mr Sanders to give evidence from the Bar table.
The essence of the Defence in this regard (Paragraph 6 of the Defence and the Paragraph 6 Particulars) is to put Perpetual 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.
I am satisfied that the Defaults occurred and that there is no real prospect of success in defending this aspect of Perpetual’s claim. For the reasons set out below, Mr Sanders’ reliance on the Promissory Note is fanciful.
Service of the Default Notice
Exhibit A to the Sutton Affidavit is a copy of the Default Notice.[17] It is addressed to Mr Sanders at 143 Gibsons Road Sale VIC 3850 (‘Gibsons Rd Address’). Mr Sutton, a mail clerk employed by Kemp Strang (Perpetual’s solicitors) deposesthat he served the Default Notice on Mr Sanders by posting it on 16 May 2016 to him at the address stated in the notice.[18]
[17]Mr Shastri also deposes to the Default Notice having been sent and exhibits a copy of it at exhibit ‘JDS‑8’.
[18]Sutton Affidavit [3].
Clause 10 of the MCP deals with notices to Mr Sanders pursuant to the Mortgage. Relevantly, it provides:
10.2 Method of Service
We may give You notice by delivering it to You personally or by leaving it at or by sending it by post, facsimile or similar facility to your residential or business address or the Property. For this purpose We may use the last address recorded for You.
…
10.5Receipt of the notice
… If the notice is sent by post, it will be deemed to have been given on the later of the date it bears or the date it would have been delivered in the ordinary course of post …
10.6Change of name or address
If You change your name or address, You must notify Us in writing immediately specifying details of the change.[19]
[19]MCP clause 10.
Neither Mr Shastri nor Mr Sutton specifically depose to the Gibsons Rd Address being the address recorded in Perpetual’s records for Mr Sanders. It is therefore necessary to consider other evidence filed in respect of the Application to determine whether sending the Default Notice to the Gibsons Rd Address is, on the balance of probabilities, service of that notice on Mr Sanders for the purposes of Perpetual exercising its rights under the Mortgage.
The following documents all record the Gibsons Rd Address as the address to which correspondence was sent by Perpetual (or its agents) or as the address which Mr Sanders gave when corresponding with Perpetual (or its agents). Some of these documents were produced as exhibits by Mr Sanders. While I have not listed all of them, I did not locate any which listed an alternative address for Mr Sanders. The documents listing the Gibsons Rd Address for Mr Sanders include:
(a) the Loan Agreement;
(b) the facsimile dated 20 October 2008 from Mr Sanders to Australia First Mortgage;[20]
[20]Exhibit ‘JDS-6’.
(c) Mr Sanders’ letter to the Chief Executive Officer of Perpetual dated 27 October 2015;[21]
[21]Exhibit ‘WBS 3’.
(d) Mr Sanders’ letter dated 23 June 2016 to Tracey Grippo of Australian First Mortgage and others.[22] Part of the not negotiable contract was a copy of an arrears notice in respect of the Loan Account dated 16 June 2016 addressed to Mr Sanders at the Gibsons Rd Address which is stamped ‘received 21 June 2016’ and signed by Mr Sanders, and which bears his handwritten annotations;
[22]Exhibit ‘JDS-10’ and Exhibit ‘WBS 12’.
(e) letter dated 1 July 2016 from Kemp Strang to Mr Sanders;[23]
[23]Exhibit ‘JDS-11’. The copy of the letter produced in this exhibit is a ‘file copy’ and is not on Kemp Strang’s letterhead.
(f) letter dated 8 July 2016 from Mr Sanders to Kemp Strang and others;[24]
[24]Exhibit ‘JDS-12’; Exhibit ‘WBS13’.
(g) letter dated 20 July 2016 from Kemp Strang to Mr Sanders;[25]
(h) letter dated 5 August 2016 from Mr Sanders to Kemp Strang and others. Amongst other things, Mr Sanders says in the letter ‘Matthew thank you for your letter dated 20 July 2016 (copy attached)’.[26] This is clearly a reference to Matthew Pike, the partner at Kemp Strang whose name is set out on the letter from Kemp Strang. The copy of the Kemp Strang 20 July 2016 letter attached to Mr Sanders’ letter is signed by Mr Pike. Since the copy exhibited to Mr Shastri’s affidavit is not signed, I infer that the copy attached to Mr Sanders’ letter is a copy of the document as he received it, and has not been taken from exhibit ‘JDS-13’;
(i) letter dated 7 September 2016 from Mr Sanders to Kemp Strang and others. In that letter, Mr Sanders says ‘Thank you Matthew for your letter dated 1 July 2016’.[27]
[25]Exhibit ‘JDS-13’. The copy of the letter produced in this exhibit is a ‘file copy’ and has not been signed.
[26]Exhibit ‘JDS-14’; Exhibit ‘WBS 14’.
[27]Exhibit ‘JDS-15’; Exhibit ‘WBS 18’.
It is clear from a perusal of the correspondence in 2015 and 2016 that is in evidence that Perpetual (or its agents) wrote to Mr Sanders at the Gibsons Rd Address and that he gave this as his address, and that on many occasions Mr Sanders responded to the letters he was sent by Perpetual at that address. It is therefore reasonable to infer that the Gibsons Rd Address was the address recorded by Perpetual for sending notices to Mr Sanders. Even if that is not the case, it is reasonable to infer that notices sent to the Gibsons Rd Address came to the attention of Mr Sanders.
Further, in submissions, Mr Sanders stated that he believed he had received the Default Notice.[28]
[28]This was one of the occasions where I permitted Mr Sanders to give evidence from the Bar table.
Mr Sanders denies, in the Defence, that he received the Default Notice, which he particularises by reference to the Paragraph 6 Particulars. Those particulars do not support the denial of the receipt of the Default Notice. The denial is not supported by any credible evidence.
I am satisfied that the Default Notice was served on Mr Sanders and that he has no real prospect of succeeding in defending that element of Perpetual’s claim. During the course of the hearing, it became apparent that Mr Sanders relied on the Promissory Note as the basis for disputing the Defaults and the Default Notice, however that is no basis for denying that he had received the Default Notice.
Failure to remedy the Defaults
Paragraphs 29 to 31 of the First Shastri Affidavit and the Statements establish that Mr Sanders has not remedied the Defaults.
Mr Sanders denies not remedying the Defaults, again by reference to 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
At paragraphs 58, 59, 61 and 62 of the PCL Judgment, I set out in some detail the content of the promissory note relied on by Mr Sanders in that case and the letter accompanying it. The Promissory Note and the letter dated 23 June 2016 in this case are relevantly identical, save that the Promissory Note bears a different number, it is for a different amount ($250,000) and is redeemable at a different time (10:40), and the letter refers to the Loan Account.
Mr Sanders deposes that he caused the original Promissory Note to be sent by registered post to Tracey Grippo and Steven Dover of Australian First Mortgage.[29] He stated in submissions that it was sent on 24 June 2016. He deposes that the Promissory Note was sent with the letter dated 23 June 2016 and the original not negotiable contract.[30] The latter was a document he had drawn up and was in relevantly identical terms to the similar document in the PCL Proceeding.[31]
[29]First Sanders Affidavit [10].
[30]First Sanders Affidavit [10].
[31]Exhibit ‘WBS 12’.
It is common ground that Perpetual did not attend at the place, date and time specified in the Promissory Note to redeem or collect payment, or attempt to redeem it any time later. It is also uncontested that Perpetual did not accept the Promissory Note as a form of payment.[32]
[32]Exhibit ‘JDS-11’ is a copy of a letter dated 1 July 2016 from Kemp Strang to Mr Sanders, responding to his letter dated 23 June 2016 which enclosed the Promissory Note. In the Kemp Strang letter, it was stated that the amount owing to Perpetual as at 1 July 2016 was $189,693.81. Clearly, Perpetual had not applied the Promissory Note against the Loan.
Mr Sanders says that Perpetual’s failure to present the Promissory Note for payment or to return it to him within 3 days was a deemed acceptance by Perpetual of the Promissory Note such that he was released from any liability to Perpetual, if such liability existed.
For the same reasons as set out in paragraphs 65 to 68 of the PCL Judgment, I reject this contention.[33] Mr Sanders’ reliance on the Promissory Note is fanciful and has no prospects of success. It is a defence that is fanciful, absurd and nonsensical, and does not establish that he did not fail to remedy the Defaults.
[33]For completeness, I note that Mr Sanders relied on the same or similar material as he had in the PCL Proceeding to argue that promissory notes were instruments known to the law and were to be taken to be as good as cash. In this proceeding, these were exhibits ‘WBS 29’, ‘WBS 30’, ‘WBS 33’ to ‘WBS 37’, ‘WBS 49’ to ‘WBS 59’ and ‘WBS 61’.
Entitlement to payment of the Outstanding Amount and to possession of the Property
Having established the Defaults, service of the Default Notice, and the failure to remedy the Defaults, Perpetual relies on the relevant provisions of the Loan Agreement and the Mortgage to establish that it is entitled to be paid the balance of the loan then outstanding, interest and enforcement expenses.[34]
[34]T&C’s clauses 22.2 and 22.3; MCP clause 7.1.
I am satisfied that Perpetual has established its entitlement to be paid the Outstanding Amount. Clause 10.1 of the MCP provides that a written statement by Perpetual or by any ‘Authorised Officer’ as to the amount of the Secured Money is sufficient evidence of that fact, unless the mortgagor establishes that the statement is wrong. Mr Shastri is an ‘Authorised Officer’ within the meaning of clause 10.1 of the MCP.[35] In the Third Shastri Affidavit, Mr Shastri deposes to executing a written statement in accordance with clause 10.1 of the MCP and exhibits the written statement dated 2 August 2017 which establishes the Outstanding Amount.[36]
[35]First Shastri Affidavit [32].
[36]Exhibit ‘JDS-18’.
Mr Sanders has not produced any evidence to establish that that written statement is wrong. He relies on the Promissory Note, along with his non-admission of the Loan Agreement, Mortgage and Advance, and his denial of the Defaults (and the failure to remedy them) and service of the Default Notice. I have already rejected all of these as a defence with any real prospect of success.
Mr Sanders denies that Perpetual is entitled to possession of the Property, for the same reasons as set out in paragraph 72 above. Further, there are aspects of the Counterclaim that appear to also go to a defence of Perpetual’s claim for possession of the Property. The applicable sections of the Counterclaim are as follows:[37]
[37]In the Counterclaim, Mr Sanders refers to himself as the ‘Counter-plaintiff’ and to the defendants by counterclaim as the ‘Counter-defendants’.
30.To evict the Counter-plaintiff into the street as a result of an alleged and unsubstantiated default of the alleged mortgage loan repayments is a breach of the (alleged) mortgage contract.
Particulars
(a)The Counter-plaintiff has failed to locate any clauses or terms and conditions within the (alleged) mortgage loan contracts, despite diligent searches, that disclose and confirm the Counter-defendants has [sic] authority and jurisdiction to evict a defaulting borrower or an alleged defaulting borrowing [sic] from their property and into the street when in default or alleged default of the mortgage loan contract, and doesn’t believe it exists.
(b)To evict a defaulting/defaulted or alleged defaulting/defaulted borrower into the street is a breach of the (alleged) mortgage loan contract, thereby creating a tort.
….
31.Even if it were proven that the Counter-plaintiff was in default of the alleged mortgage loan contracts and that is not established, the Counter-defendant cannot legally force the removal of the Counter-plaintiff from his property without prior consent from him.
Particulars
(a)The Counter-plaintiff currently enjoys peaceful possession and occupancy rights over his property, possession being nine tenths of the law, and
(b)An occupant cannot be legally forced from peaceful possession and occupancy of their property,
(c)Eviction by the Counter-defendants of the Counter-plaintiff can only be effected with the consent of the (alleged) defaulter, that consent being denied, and
(d)Eviction by the Counter-defendants of the Counter-plaintiff, without first providing proof of standing to the claim is a tort.
32.Any property belonging to the Counter-plaintiff seized by the Counter-defendants as a result of an outstanding debt or liability, or alleged debt or liability, is illegal and a tort.
Particulars
‘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’ Lord Denning, Morgan v Fry 1968 [38]
[38]Counterclaim [31]-[33] (emphasis altered). Although this quote was also contained in exhibit ‘WBS 38’, a full copy of this case was not provided by Mr Sanders. However, nothing turns on it, as the pleading and the submission ignore the provisions of the MCP which entitle Perpetual to take possession of the Property if there is an unremedied default.
Mr Sanders contends that Perpetual is not entitled to possession of the Property as the Mortgage does not provide for it and he has not given his consent to it.
Perpetual is entitled to rely on clause 8.1 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. Relevantly, that clause permits Perpetual to ‘exercise all powers vested in mortgagees by any applicable law’, including to ‘enter on and take possession of the Property’.[39] A court order for possession is not required.
[39]MCP clause 8.1
For these reasons and for the same reasons as set out in paragraph 90 of the PCL Judgment, Mr Sanders’ contentions are rejected. Those contentions are incapable of giving rise to a defence to Perpetual’s claim.
I am satisfied that Perpetual has established its entitlement to possession of the Property and that the relevant provisions of the Transfer of Land Act 1958 (Vic) have been complied with.
Other aspects of Mr Sanders’ Defence and/or submissions
Mr Sanders submitted that Perpetual had not suffered any loss, as it did not lend him money but only credit, and that at the time of entering into the Loan Agreement mortgage insurance was required, so the insurer would have paid any default. There was no evidence as to the latter. In any event, the submission that Perpetual had suffered no injury and therefore was not entitled to sue him is rejected.
Unconscionability
Mr Sanders’ defence based on unconscionability is summarised in paragraph 30(f) above. It is also virtually identical to his defence on the same basis in the PCL Proceeding. Mr Sanders relies on his letter dated 27 October 2015 to the Chief Executive Officer of Perpetual,[40] which is relevantly identical to the letter described in paragraph 79 of the PCL Judgment.
[40]Exhibit ‘WBS 3’.
Mr Sanders’ defence in this respect, as set out in paragraph 12 of the Defence, is a defence unknown to the law, embarrassing and an abuse of process, for the same reasons as set out in paragraph 78 to 81 of the PCL Judgment. It has no real prospect of success.
Breach of Trust
Paragraphs 13 to 15 of the Defence (summarised in paragraph 30(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 Mr Sanders’ mortgage and it is alleged that Perpetual has breached this trust as he is the beneficiary. Paragraph 9 of the First Sanders Affidavit appears to be an attempt to address this allegation. However, it is incomprehensible, which is made even more so by reference to a number of non-existent exhibits.
Mr Shastri gives some explanation of the trust structure applicable to loans and mortgages, which include the Loan Agreement and the Mortgage.[41] Perpetual is the trustee of the Millenium Trusts and, while not explicitly stated by Mr Shastri, I infer that it holds certain loans and mortgages on trust, which include the Loan Agreement and the Mortgage. Mr Shastri states that Advantedge Financial Services Pty Ltd is a service provider to Perpetual and acts as a delegate of Challenger Securitisation Management Pty Ltd, who is also a servicer and manager of Perpetual as trustee of the Millenium Trusts. Mr Shastri deposes that Advantedge has managed loans and mortgages, including those the subject of this proceeding, since 2 November 2009 and that prior to that date, this work was done by Challenger.[42] While Mr Shastri’s explanation does not fully explain the structure (for example, there is no information about the beneficiary of the Millenium Trusts and no explanation is given as to the role (if any) played by Australian First Mortgage), at the end of the day any such arrangements are irrelevant to this case. Perpetual is the lender of record,[43] and it is the mortgagee.[44] It is the entity entitled to sue on those agreements and is the plaintiff to this proceeding.
[41]First Shastri Affidavit [1].
[42]First Shastri Affidavit [2].
[43]Page 3 of the Loan Agreement lists Perpetual as the credit provider, and is the ‘Lender’ as defined in that agreement; exhibit ‘JDS-2’.
[44]Exhibits ‘JDS-4’, ‘JDS-5’.
Conclusion – summary judgment on the plaintiff’s statement of claim
Mr Sanders submitted that the crux of his argument and the substance of his defence was the Promissory Note. This is consistent with paragraphs 33 to 37 of the Counterclaim, where he pleads that the Promissory Note gives rise to the ‘key fact and point of law before the Court’. In summary, those paragraphs allege that the Promissory Note discharged all of Mr Sanders’ liability to Perpetual and there is no liability or debt remaining to it, such that Perpetual does not have a reasonable cause of action upon which relief can be granted, and the proceeding is therefore vexatious, frivolous and an abuse of process. For the reasons set out above, this is not a defence to Perpetual’s claim, let alone one that has a real prospect of success.
I am satisfied that Perpetual has established its entitlement to payment of the Outstanding Amount and to possession of the Property. I am also satisfied that Mr Sanders’ defence has no real prospects 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 Mr Sanders to re-plead. For the reasons set out below, there is nothing in the Counterclaim that is capable of being employed as a defence which has a real prospect of success.
Accordingly, summary judgment should be given for Perpetual’s claims in the statement of claim, pursuant to sections 61 and 63 of the CPA. As the applications based on Rules 23.01 and 23.02 of the Rules were in the alternative, there is no need for me to determine them.
Consideration – summary judgment application on Mr Sanders’ counterclaim
As set out in paragraph 73 above, Mr Sanders alleges in the Counterclaim that Perpetual’s claim to possession of the Property is a breach of the Mortgage. For the same reasons as set out in paragraphs 74 to 76 above, this claim is fanciful.
During submissions, Mr Sanders referred to his 23 June 2016 correspondence that included a letter addressed to Mr Steven Dover which,[45] amongst other things, purported to appoint Mr Dover as a fiduciary to ‘oversee the settlement and closure of all financial obligations of the entity WARREN BRUCE SANDERS to the lender’.[46] Although not referred to in the Counterclaim or articulated at all in his submissions, if Mr Sanders was attempting by this reference to make a claim of breach of fiduciary duty by Mr Dover, that claim is fanciful for the same reasons as set out in paragraph 100 of the PCL Judgment.
[45]See paragraph 111 below for an explanation of Mr Dover’s role.
[46]Letter dated 23 June 2016 addressed to Mr Dover from Mr Sanders, Exhibit ‘WBS 12’.
Breach of contract/damages
Mr Sanders makes claims for damages arising out of breach of contract. The breach is alleged to arise from Perpetual’s failure to accept the Promissory Note. As noted above, 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 $1 million to be paid to Mr Sanders if the Promissory Note was not redeemed in accordance with its ‘terms’ or returned within 3 days.[47] Mr Sanders stated in submissions that the amount of the damages claimed was due to Perpetual’s false claim in the statement of account, and it was said in the Bible that if there’s a false claim then you have four times the damages. This submission was largely incomprehensible. Mr Sanders updated the amount claimed to $1,121,404.14, the $121,404.14 being said to be interest.[48] All of the defendants by counterclaim are said to be liable by ‘association, collusion and conspiracy to solicit’.[49]
[47]Exhibit ‘WBS 12’. Further correspondence from Mr Sanders which built on this ‘contract’, such as invoices for $1m, default notices and ‘default judgments’ drawn up by Mr Sanders are equally incapable of giving rise to the claims made in the Counterclaim. See exhibits ‘WBS 13’, ‘WBS 14’ and ‘WBS 18’.
[48]Third Sanders Affidavit, exhibit ‘WBS 60’.
[49]Counterclaim [26].
Such claims are fanciful and have no prospects of success, no reasonable cause of action is disclosed and the claims in respect of this document are an abuse of process, as referred to in paragraph 93 of the PCL Judgment.
Unconscionability
Mr Sanders alleges in the Counterclaim that Perpetual’s entry into the Loan Agreement constitutes unconscionable conduct as the amount lent was based only or predominantly on the market value of the Property and Perpetual failed to take account of his capacity to meet the repayment obligations.[50] Mr Sanders gives no basis, let alone evidence, for this allegation.
[50]Counterclaim [43].
Mr Sanders also alleges that the defendants by counterclaim have acted unconscionably in electing to pursue litigation against him rather than complying with his ‘reasonable requests to mediate privately and provide him proof of claim with adequate particulars’.[51] This ignores the fact that it is only the first defendant by counterclaim which has initiated legal proceedings against Mr Sanders. In any event, for the same reasons as set out in paragraphs 79 and 80 above, and paragraphs 78, 79 and 81 of the PCL Judgment, such a claim is fanciful.
[51]Counterclaim [43].
Hardship
At paragraph 44 of the Counterclaim, Mr Sanders alleges that he is suffering hardship under the National Credit Code (‘NCC’),[52] and says that the Court should set aside or ‘make good the unconscionable provisions of the (alleged) mortgage and (alleged) loan arrangement’.[53] The particulars given for this allegation are a failure to have regard to the capacity to meet repayments and loan serviceability and engaging in asset lending in relation to the loan agreement. The application of the NCC is dealt with below, however the claims in respect of unconscionability have no real prospects of success, for the reasons set out above.
[52]The NCC is Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) (‘NCP Act’).
[53]Counterclaim [44].
The evidence is that for several years the Loan was serviced regularly and in accordance with its terms.[54] There is no evidence to support a contention that the loan application was not assessed properly, as set out above. Again, there is no claim here that has a real prospect of success.
[54]A perusal of the Statements reveals this.
For the sake of completeness, I note that towards the end of the hearing, Mr Sanders sought leave to prepare a further affidavit putting on additional material to show what he said had occurred in respect of a hardship application he says he made in around December 2015 or January 2016, which is not in evidence. The Applicants opposed this. I refused Mr Sanders’ application and gave oral reasons at that time.
Claims/defences pursuant to the National Credit Code
There are several references in the Defence and Counterclaim to the NCC, either directly or by implication.
Mr Sanders submitted that the NCC applies to the Loan Agreement because he borrowed as an individual and not as a company. He contends that the hardship provisions of the NCC apply to the Loan Agreement and the Mortgage.
The Applicants contend that the NCC does not apply to the Loan Agreement, as the Loan was stated as being for investment and refinancing purposes.[55] In order to analyse this, it is necessary to set out the relevant history of the NCC, including the transitional provisions from the previous legislation.[56]
[55]See the loan application form, under the ‘loan details’ section: Exhibit ‘JDS-16’ to the Second Shastri Affidavit. The Loan Agreement also states in section 1 that ‘Credit Law’ does not apply to it. ‘Credit Law’ is defined in the T&Cs as ‘any law relating to the provision of consumer credit, including any law that implements, or contains provisions contemplated by, the Uniform Credit Laws Agreement 1993 which applies to the Loan’: Exhibits ‘JDS-2’ at p 3 and ‘JDS-3’ at p 6.
[56]Those transitional arrangements are provided for in the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth) (‘Transitional Provisions Act’).
Previously, the Uniform Credit Laws Agreement 1993 provided for uniform consumer credit laws throughout Australia based on template legislation enacted by the Queensland Parliament in 1994, with the Uniform Consumer Credit Code (‘UCCC’) an appendix to that legislation.[57] All states and territories then passed enabling legislation which adopted the template legislation and applied it in the state or territory as in force from time to time.
[57]This was the Consumer Credit (Queensland) Act 1994 (Qld).
In Commonwealth Bank of Australia v Stephens,[58] Sloss J conveniently sets out the following explanation of the new arrangements:
[58][2017] VSC 385, [441]-[445] (citations omitted).
[441]In 2008, the Council of Australian Governments agreed that the States would transfer responsibility for the regulation of consumer credit, and a related cluster of additional financial services, to the Commonwealth.
[442]On 1 July 2010 the ‘National Credit Code’ set out in Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth) commenced. Transitional provisions provided for the effective transition from the regime embodied in the old Codes of the referring States and Territories to the new regime provided for in the National Credit Code (referred to herein as the ‘new Code’). In Victoria, the Parliament enacted the Credit (Commonwealth Powers Act) 2010 (Vic) (the ‘Referral Act’) and thereby referred its legislative power to the Commonwealth under section 51(xxxvii) of the Constitution, in order that the provisions of the National Consumer Credit Protection Act 2009 (Cth) and the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth) (the ‘Transitional Provisions Act’) would commence to apply in Victoria.
[443]Against that background, on and from 1 July 2010, the new Code and the Transitional Provisions Act commenced operation and applied within Victoria. Pursuant to items 2A and 3(1) of Schedule 1 to the Transitional Provisions Act, the new Code does not apply in relation to contracts made prior to commencement, subject to item 3(2). Relevantly, item 3(2) provides that the new Code applies only to certain types of contracts, called ‘carried over instrument[s]’, made before the new Code came into force.
[444]Pursuant to section 4(1) of the Transitional Provisions Act a ‘carried over instrument’:
… means a contract or other instrument that:
(a) was made before commencement; and
(b) was in force immediately before commencement; and
(c)the old Credit Code of a referring State or a Territory applied to immediately before commencement.
[445] Section 4(1) also relevantly defines ‘old Credit Code’ to mean:
. . .
(b)for Victoria—the Consumer Credit (Victoria) Code, and the Consumer Credit (Victoria) Regulations, within the meaning of the Consumer Credit (Victoria) Act 1995 of Victoria, as in force from time to time before commencement.
This interpretation of the operation of the NCC is consistent with the interpretation given in a number of other cases.[59]
[59]For example, see Westpac Banking Corporation v Chadha [2012] SASC 223, [94]-[100]; Perpetual Trustees Victoria Ltd v Monas [2010] NSWSC 1156, [50]-[52]; Field v Perpetual Limited [2010] FCA 1001, [20]-[21].
The NCC commenced operation on 1 July 2010, which was after the Loan Agreement was entered into. Therefore, for the NCC to apply to the Loan Agreement, under the Transitional Provisions Act it must be a ‘carried over instrument’, that is, it must be a loan to which the UCCC applied. Section 6(1) of the UCCC provided that:
This Code applies to the provision of credit (and to credit contracts and related matters) if when the credit contract is entered into or (in the case of precontractual obligations) is proposed to be entered into –
(a)the debtor is a natural person ordinarily resident in this jurisdiction or a strata corporation formed in this jurisdiction; and
(b)the credit is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes; and
(c) a charge is or may be made for providing the credit; and
(d)the credit provider provides the credit in the course of a business of providing credit or as part of or incidentally to any other business of the credit provider. [60]
Section 6(4) of the UCCC provided:
For the purposes of this section, investment by the debtor is not a personal, domestic or household purpose.[61]
[60]UCCC s 6(1).
[61]UCCC s 6(4).
Accordingly, the loan in this case being for investment purposes, the UCCC did not apply to the Loan Agreement and so it is not a ‘carried over instrument’ for the purposes of the NCC. The NCC does not apply to the Loan Agreement, and therefore any claims or defences based on the NCC have no real prospects of success.
Claims against the third, sixth and seventh defendants by counterclaim
The Applicants submit that the claims against the third, sixth and seventh defendants by counterclaim have no real prospect of success, and that they do not disclose any proper basis for a claim against them. The third defendant by counterclaim is named in the Counterclaim as ‘Challenger Mortgage Management Pty Ltd (ABN 72 087 271 109) Who has become Advantedge Financial Services Pty Ltd (ABN 51 143 937 437) or they have taken over that role for the Plaintiff/First Counter-defendant’.[62] The sixth defendant by counterclaim is Matthew Pike who, from some of the correspondence exhibited to the First Shastri Affidavit, I understand to be the partner at Kemp Strang responsible for this matter. Kemp Strang is the seventh defendant by counterclaim and is the firm of solicitors acting for Perpetual.
[62]Counterclaim, p 6.
No explanation was given by either party as to the role played by the third defendant by counterclaim. It appears to be a different entity to the entity defined as ‘Challenger’ in the First Shastri Affidavit, which was called Challenger Securitisation Management Pty Ltd.[63] The T&Cs define ‘Challenger’ as ‘Challenger Mortgage Management Pty Ltd ACN 087 271 109, the Lender’s servicer of the Loan or any successor or assign’. While Mr Shastri refers to a change in the role of servicer in November 2009 from Challenger Securitisation Management Pty Ltd to Advantedge Financial Services Pty Ltd ACN 130 012 930, this does not appear to shed any light on this situation. It may be the case that Challenger Securitisation Management Pty Ltd is the successor or assign of Challenger Mortgage Management Pty Ltd in relation to the Loan Agreement and the T&Cs, but that can only be speculation given the state of the evidence in this regard.
[63]See paragraph 82 above. Further these two entities with ‘Challenger’ as part of their names have different ACN numbers, with Challenger Securitisation Management Pty Ltd having ACN 100 346 898 (First Shastri Affidavit [2]) and Challenger Mortgage Management Pty Ltd having ACN 087 271 109 (T&Cs, p 6).
Nonetheless, it is incumbent on Mr Sanders to set out the basis for any claim against each of the defendants by counterclaim, and he has not done so. I do not consider that a clearer explanation of the role of the third defendant by counterclaim would assist Mr Sanders.
Mr Sanders has no cause of action against any of those defendants by counterclaim, they should never have been joined to the proceeding, and the claims against them should never have been brought.
Conclusion – summary judgment on the Counterclaim
Accordingly, there should be summary judgment for the first, third, sixth and seventh defendants by Counterclaim, pursuant to sections 62 and 63 of the CPA. Again, there is no need for me to determine the applications on the alternative bases put.
Conclusion
I am satisfied that Mr Sanders’ defences and claims, as best as can be ascertained from his pleadings, affidavits and submissions, have no real prospects of success. I am also satisfied that it is in the interests of justice to summarily dispose of the proceeding.
Accordingly, the Applicants’ application for summary judgment, in respect of both the statement of claim and the counterclaim, will be granted.
This leads to a consideration of what, if anything, should be done in respect of the second, fourth and fifth defendants by counterclaim (‘Non-Participants’).
The second defendant by counterclaim is named in the Counterclaim as ‘Australia First Mortgage (ABN 30 350 087 359)’. It is described in the Counterclaim as ‘a non registered entity and possibly a trade name and purported mortgage manager and is not capable of suing in its own name, and is joined to the proceedings by virtue of the universal maxim of law “notice to agent is notice to principal” expressed within the NOT NEGOTIABLE Contract and subsequent written communications’.[64] The fourth defendant by counterclaim is named in the Counterclaim as Steven Dover, and he is alleged to be the general manager of the second defendant by counterclaim and is said to have been joined to the proceeding on the same basis.[65] The fifth defendant by counterclaim is named in the Counterclaim as Tracey Grippo, and she is alleged to be the mortgage manager of the second defendant by counterclaim and is also said to have been joined to the proceeding on the same basis.[66]
[64]Counterclaim [10].
[65]Counterclaim [12].
[66]Counterclaim [13].
The Non-Participants have not filed notices of appearance and were not parties to the Application. There is no evidence that they have been served with the Counterclaim. Rather, Mr Sanders said, when I asked him at the first directions hearing, that he had not served them, indicating that he assumed the Court did that. At that time, I informed him that this was not the case and that it was up to him to organise service on the defendants by counterclaim in accordance with the Rules. There is nothing subsequent to that to establish that the Non-Participants have been served.
The Applicants’ counsel submitted that the Court should, on its own motion, dismiss the Counterclaim against the Non-Participants.
The Court has power to do this. Section 63(1) of the CPA relevantly provides that the Court may give summary judgment in any civil proceeding if satisfied that a counterclaim, or part of the counterclaim, has no real prospects of success, as noted above. Section 63(1)(c) of the CPA then provides that the Court can give summary judgment in such a civil proceeding on its own motion, ‘if satisfied that it is desirable to summarily dispose of the civil proceeding’.
Given my findings as set out above, I consider this to be the appropriate course. However, before finally determining that issue, I will give Mr Sanders an opportunity to address this, as he did not address this in his submissions at the hearing.
I will hear the parties as to the form of orders and as to costs.
SCHEDULE OF PARTIES
S CI 2016 03762
BETWEEN
PERPETUAL TRUSTEES VICTORIA LIMITED (ACN 004 027 258) Plaintiff - and - WARREN BRUCE SANDERS Defendant AND BETWEEN
WARREN BRUCE SANDERS Plaintiff by Counterclaim - and - PERPETUAL TRUSTEES VICTORIA LIMITED (ACN 004 027 258) First Defendant by Counterclaim AUSTRALIAN FIRST MORTGAGE Second Defendant by Counterclaim CHALLENGER MORTGAGE MANAGEMENT PTY LTD Third Defendant by Counterclaim STEVEN DOVER Fourth Defendant by Counterclaim TRACEY GRIPPO Fifth Defendant by Counterclaim MATTHEW PIKE Sixth Defendant by Counterclaim KEMP STRANG Seventh Defendant by Counterclaim
0
5
0