Radin, Michael v Commonwealth Bank of Australia

[1997] FCA 930

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 437 of 1996

BETWEEN:	MICHAEL RADIN APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) RESPONDENT

JUDGE:	LINDGREN J
DATE:	3 SEPTEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(ex tempore)
(application for leave to amend)

INTRODUCTION

There are before the Court three proceedings which are being heard together (I will refer to the applicants’ given names for convenience and without discourtesy). The Commonwealth Bank of Australia (“the Bank”) is the respondent in each. It is the successor to the Commonwealth Savings Bank of Australia (“the Savings Bank”) and the Commonwealth Trading Bank of Australia (“the Trading Bank”). In NG 437 of 1996 Mr Michael Radin (“Michael”) is the applicant. In NG 984 of 1995, Michael’s mother, Mrs Vladimirka Radin (“Vladimirka”), is the applicant. In NG 985 of 1995, Mrs Judith Radin (“Judith”), Michael’s former wife, is the applicant.

In the proceedings, the respective applicants seek to challenge various securities given by them to the Bank.  The present Reasons for Judgment relates to an application by Michael to amend his existing amended statement of claim which was filed on 19 February 1997 by amending the description of the mortgage referred to in subpar 6(e) of the claims for relief.  That subparagraph relates to a residential property at 11 Appian Way, Burwood, which is the former matrimonial home of Michael and Judith.  Following the break-up of the marriage, Michael ceased to reside there. Judith and the two children of the marriage continue to reside there.

The present application is not made by notice of motion and is not supported by any affidavit. The subpar 6(e) to which I referred reads as follows:

“The plaintiff claims:

...

6.An injunction to restrain the Defendant from taking possession of land or taking any further action pursuant to:

...

e.Mortgage Registered No W.254833 made between the Plaintiff and Judith Anne Radin as Mortgagors and the Defendant as Mortgagee (Security: 11 Appian Way, Burwood - Folio Identifier 1/304076).”

The reference to "plaintiff" is explained by the fact that proceeding NG 437 of 1996 commenced life as proceeding number 12233 of 1993 in the Common Law Division of the Supreme Court of New South Wales, which was later transferred to this Court.  Plainly, Michael launched his proceeding in 1993 and Vladimirka and Judith commenced their proceedings in 1995.

REASONING

The only evidence relied on by Michael in support of his application to amend is a copy of a Torrens Title computer folio search in relation to Folio Identifier 1/304076.  That search shows the following notifications:

“2. X381289MORTGAGE TO COMMONWEALTH BANK OF AUSTRALIA.

3. Y75562MORTGAGE TO COMMONWEALTH BANK OF AUSTRALIA.”

There is clearly an error in subpar 6(e) of the claims for relief in the amended statement of claim.  The amendment sought to be made is to have subpar 6(e) of the claims refer to both mortgages particularised in the search.  I pointed out in the course of argument, as did the Bank in its written submissions, that there  would need to be a consequential identical amendment  to subpar 17(e) of the body of the pleading and counsel for Michael agreed. The Bank consents to the amendment in so far as it would introduce a reference to Mortgage Y75562, but not in so far as it would introduce a reference to Mortgage X381289.

Paragraph 6 of the claims for relief seeks an injunction to restrain the Bank from taking possession of land or taking any further action pursuant to the respective securities referred to in the various subpars of par 6.  Relevantly, the amendment would have the effect that Michael would be seeking an injunction to restrain the Bank from taking possession of 11 Appian Way or otherwise enforcing either Mortgage X381289 or Mortgage Y75562 (or both of them).

Mortgage X381289 is a mortgage dated 5 January 1988 which was granted to the Savings Bank. All the mortgages presently referred to in the pleading are Trading Bank mortgages, as is Mortgage Y75562. However, Mortgage X381289 was given as security for a “home loan” and “home improvement loan”. The home loan was made by the Savings Bank early in 1988 to enable Michael and Judith to purchase 11 Appian Way. The home improvement loan was made to them by the Savings Bank at the end of 1988 to enable them to improve that property.

In circumstances which I will have occasion to describe later, the Bank has obtained judgment for possession of 11 Appian Way against Judith by virtue of Mortgage X381289 to the Savings Bank. The effect of the amendment then would be that Michael would claim to restrain it from enforcing that judgment and otherwise from enforcing Mortgage X381289 to the Savings Bank, although it has obviously already enforced it to some extent by obtaining the judgment.

The first matter to note is the evidentiary position.  As I indicated, there is no affidavit evidence dealing with the obvious error in subpar 6(e) of the claims for relief (or subpar 17(e) of the body of the pleading).  Perhaps it should be inferred that the entirety of the subparagraph was included in error.  Perhaps the proper inference to draw is that the intention was to identify only the mortgage to the Savings Bank.  Perhaps the proper inference to draw is that the intention was to identify only the Trading Bank mortgage.  Perhaps it should be inferred that the intention was to specify both mortgages. The mere demonstration, by the tender of the title search, that there is an error in the subparagraph does not lead me to draw this last inference.

If one refers to other documents one might well prefer the inference that the intention was to nominate only the Trading Bank mortgage (Mortgage Y75562).  First, in the Bank's cross-claim against Michael filed on 29 November 1993, it is only the Trading Bank mortgage, on which the Bank proceeds, and it might be reasonable to think that Michael had always intended to challenge the same mortgage.  Secondly, the Bank’s second cross-claim in Judith’s proceeding, filed as long ago as 28 November 1996, was founded on Mortgage X381289 to the Savings Bank and Michael, being aware of this, has not sought to amend until now. Thirdly, as noted earlier, Michael’s amended statement of claim attacks numerous Trading Bank mortgages which were given to secure financial accommodation provided to him by the Trading Bank in connection with his former practice as a solicitor, or to him and Judith in connection with investment in real estate, or both. In this respect, Mortgage X381289, although an “all monies” mortgage, is different.

However, it is not necessary for me to decide what inference should be drawn. It suffices to say that little can be safely inferred from only the tender of a search, other than that the reference in the pleading to “Mortgage Registered No W.254833” is erroneous.  Certainly I do not infer that the Bank knew or should have known that Michael’s intention always was to attack the Savings Bank Mortgage X381289.  Indeed, there are reasons, which appear below, why the Bank should not have had that understanding.

Counsel for Michael submits that I should allow the amendment simply because (a) his client wishes to make it, and (b) the amendment would cause no prejudice to the Bank.  Because of the course of events to which I shall refer, I am not satisfied that there is no prejudice to the Bank and in fact I am of the view that there is some.  The Bank has proceeded to judgment against Michael’s co-mortgagor, Judith, and may well have taken a different course if Michael had sought the leave to amend earlier, or otherwise had made it clear to the Bank that he wished to restrain it from enforcing the Savings Bank mortgage.

It is necessary now to go to the history of the matter.  On 28 November 1996 the Bank filed in Judith’s proceedings its second cross-claim in which it pleaded a case against Judith based fairly and squarely on Mortgage X381289 to the Savings Bank over 11 Appian Way.  The Bank claimed judgment for possession of 11 Appian Way and a monetary judgment for the amount of the home loan and the home improvement loan, together with contractual interest.

On 16 April 1997, in the course of the hearing of the three substantive proceedings, the Bank filed a notice of motion seeking a money judgment against Judith based on the home loan and the home improvement loan, judgment for possession and liberty to issue a writ of possession. It was said that the notice of motion was being filed because it had become clear to the Bank that the hearing would not be completed during the period set aside for it, and that the three proceedings would need to be adjourned part-heard, for a considerable period.

Two days later, on 18 April 1997, Michael filed a notice of motion in Judith’s proceeding seeking to be added as a party to the Bank's motion.  I fixed for hearing on 30 April at 10.15 am, both Michael’s motion to be added as a respondent to the Bank’s motion in Judith’s proceeding, and the Bank’s motion itself, on the basis that Michael’s motion would have to be resolved first.

The next thing that occurred was that on 24 April 1997 the Bank forwarded to Michael’s solicitors a copy of the Bank's outline of submissions in respect of its motion and a copy of its second cross-claim against Judith. Submissions of Michael and Judith which were prepared for the hearing on 30 April and served were, in substance, identical.  Judith’s solicitor apparently copied Michael’s submissions, omitting parts which were irrelevant to Judith. 

Next it is important to note what occurred at the hearing on 30 April.  Mr Naiman, a legal practitioner employed by Michael’s solicitor, Ms Milicevic, appeared and stated that Michael wished to “withdraw” the motion to be added as a respondent. By consent, I dismissed Michael’s motion and proceeded to hear the Bank's motion. Mr Naiman remained in Court throughout the hearing and throughout the delivery of my Reasons for Judgment (ex tempore) on the Bank’s motion. My written Reasons for Judgment were dated 8 May 1997 and included the following:

“In the three proceedings, the Radins seek to have mortgages given by them to the Bank over various properties set aside, and to recover damages from the Bank.  But an important distinction must be made: neither [Michael nor Judith] challenges the validity of the mortgage over the Property [11 Appian Way].  That is to say, they have, through their legal representatives, accepted that the Bank is entitled to the benefit of that security.” (at 2)

“There has been no dispute this morning that the Bank is entitled to judgment against [Judith] for the current balance of both loans ($711,011.06) and to recover possession of the Property and to sell it.  Mr Licardy, solicitor, who appears for [Judith], submits, however, that as a result of discretion, I should grant a stay until the hearing and final determination of the currently pending proceedings.  In fact, Mr Licardy seeks a stay until 31 December 1997.” (at 5)

“The amount of money which the Bank claims to recover from the Radins by the Bank's cross-claim against them in the proceeding brought by [Michael] (NG437 of 1996) is of the order of five million dollars.  On any reckoning, even after all the properties mortgaged to the Bank are taken into account, there would be a substantial shortfall.  Indeed, as I noted earlier, Mr Licardy accepts that the Property will have to be sold at some time in the future.” (at 6)

I granted judgment to the Bank against Judith on the Bank's second cross-claim for $711,011.06, judgment for possession of 11 Appian Way, and liberty to issue a writ of possession. I ordered that any writ of possession issued should lie in the Court office and not be executed prior to 30 June 1997, reserving liberty to Judith to apply on notice of motion supported by affidavit, for an extension of that period.  I also ordered Judith (as cross-respondent) to pay the Bank's costs (as cross-claimant) on the motion.

Later, Judith applied for a further extension of time which I granted.  The relevant written Reasons for Judgment are dated 1 August 1997.  I noted in them that counsel who appeared for Judith on the application for extension of time had raised the question of a mistaken concession by Judith’s solicitor in relation to the Savings Bank mortgage over 11 Appian Way.  There was no evidence in relation to any such mistake and in the Reasons for Judgment, which I will take as having been read, I made it clear that if Judith wished to pursue the point, this should be done in the appropriate manner. The matter has not been pursued by Judith.  It is only now, by way of Michael’s oral application to amend his own pleading, that the issue has raised its head again. 

In view of the deliberate course which was taken on legal advice by Michael in relation to the hearing on 30 April, I would not grant leave to amend.  It is plain that Michael, on legal advice, took the position, which one may well consider to be not unreasonable, that the mortgage to the Savings Bank was in quite a different category from the numerous Trading Bank mortgages.  In any event, whatever his reasoning may have been, being fully aware of the position, Michael decided to allow the judgment sought by the Bank to be obtained against Judith for possession of 11 Appian Way.  I think that as an exercise of discretion it would be unjust to the Bank for me to allow the point to be re-agitated.

There is a further matter to which I will refer.  It is not by any means clear to me on what basis relief would be sought on the existing pleading in relation to the Savings Bank mortgage as distinct from the various Trading Bank mortgages.  It is not in dispute that Michael and Judith did mortgage 11 Appian Way to the Savings Bank for a home loan and a home improvement loan, both of which were advanced. The Bank has not sought to enforce that mortgage otherwise than in respect of the home loan and the home improvement loan.

I say no more on the matter because it has not been debated on the hearing of the application for leave to amend.

CONCLUSION

I grant the applicant leave to amend subpar 6(e) of the claims for relief and subpar 17(e) of the amended statement of claim filed on 19 February 1997 by substituting for "W.254833", the number "Y75562".  Otherwise, I refuse the application for leave to amend.  I reserve the costs of that application.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren

Associate:

Dated:            11 September 1997

Counsel for the Applicant:	Mr G J McVay
Solicitor for the Applicant:	Milicevic Solicitors
Counsel for the Respondent:	Mr J R Sackar QC with Mr R S Hollo
Solicitors for the Respondent:	Abbott Tout
Date of Hearing:	26 August 1997
Date of Judgment:	3 September 1997