Rossetti v ANZ Banking Group
[1999] VSC 457
•11 November 1999
SUPREME COURT OF VICTORIA
PRACTICE COURT
Not Restricted
Sale No. 1002 of 1999
PATRICIA CAROL ROSSETTI Plaintiff v. ANZ BANKING GROUP LTD. AND ANOTHER Defendants
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JUDGE: BEACH, J. WHERE HELD: MELBOURNE DATE OF HEARING: 11 NOVEMBER 1999 DATE OF JUDGMENT: 11 NOVEMBER 1999 CASE MAY BE CITED AS: ROSSETTI v. ANZ BANK MEDIA NEUTRAL CITATION:
[1999] VSC 457
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CATCHWORDS:
Practice and Procedure – Application for interlocutory mandatory injunction – No confidence plaintiff succeed at trial – Damages adequate compensation – Application dismissed.
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APPEARANCES: Counsel Solicitors For the Plaintiff Mr. K. Mueller Warren Graham & Murphy For the Defendants Mr. M. Sifris Freehill Hollingdale & Page
HIS HONOUR:
The plaintiff, Patricia Carol Rossetti, and her late husband, Geoffrey Rossetti, were the registered proprietors of the property at 1 Araluen Drive, Sale, being the land described in Certificate of Title Vol. 9691 Folio 256.
Mr Rossetti died on 27 March 1996 and by virtue of her right of survivorship the plaintiff is now the sole registered proprietor of the property.
From time to time the Australia and New Zealand Banking Group Ltd had provided banking facilities and other financial accommodation to a company called Lecora Pty Ltd which was the trustee for the Rossetti family trust. In consideration of the facilities provided by the ANZ Banking Group to Lecora, on 5 April 1989 both the plaintiff and her late husband executed a guarantee in favour of the bank in respect of the facilities, and on or about 25 October 1991 gave to the bank a mortgage over the property at Araluen Drive to further secure the facilities. The plaintiff is and was at that time a director of Lecora although she did not become a shareholder in the company until following the death of her husband.
On 27 July 1998 the ANZ Banking Group served a notice of termination of the facility on the plaintiff and a number of other companies and individuals with which she and her late husband had been associated. At that time the amount said to be owed to the bank by the plaintiff and her associated interests totalled some $300,000.
In December 1998, and because she was unable to obtain employment in the Sale area, the plaintiff moved to Melbourne, initially only on a part-time basis, but certainly since August of this year she has been resident full-time in Melbourne and is employed here. The plaintiff is presently 63 years of age.
On 31 May 1999 the ANZ Banking Group served a further notice of termination on the plaintiff and Lecora and other persons associated with the plaintiff. At that stage the amount said to be owing to the bank was well in excess of $1,000,000. It would appear that since the earlier notice of termination being served a fixed fully drawn advance of a little over $1,000,000 had become due and repayable to the bank.
On 2 July 1999, that is a little over a month after the second notice of termination was served on the plaintiff, a manager in the employ of the ANZ Banking Group spoke to the plaintiff's solicitor at Sale. During the course of that telephone conversation the plaintiff's solicitor told the bank officer that the plaintiff was in the process of leaving the property in Araluen Drive and that it was her intention to give the bank vacant possession of the property. It would appear that after that conversation occurred and on 13 August 1999 the plaintiff arranged for all her household possessions to be taken from the property and they were disposed of at auction that day.
On 2 September the plaintiff was served with a notice pursuant to s.76 of the Transfer of Land Act. On 3 September an officer of the bank instructed a real estate agent at Sale to take possession of the property if it was in fact vacant and to change the locks on the property. The material before me is to the effect that the property was in fact vacant and that on 6 September the agent did take possession of it and change the locks on it. Thereafter the agent has taken steps to conduct an auction of the property and the auction is scheduled to be held on Saturday next.
On 8 November the plaintiff caused a writ to be filed in the court in which she seeks various categories of relief. The relief includes an injunction restraining the bank from selling the property, a declaration that the mortgage over the property is invalid and unenforceable, and a declaration that the guarantee given by the plaintiff is invalid and unenforceable. At the same time the plaintiff filed a summons in the court in which she seeks an interlocutory injunction restraining the bank from dealing with the property pending the hearing and determination of the proceeding.
The plaintiff's defence to the claim by the bank pursuant to the guarantee given in 1989 and the mortgage given in 1991 is what I might describe as a typical Amadio defence. A reference to certain paragraphs in the plaintiff's affidavit sworn 9 November 1999 will illustrate what I mean in that regard:
"9.
About ten years ago the deceased asked if I would like to be a director of Lecora. He said I could then call myself a director rather than be merely a housewife. I agreed and was subsequently made a director in about 1978.
10. I did not become a shareholder in Lecora until after the deceased died on 27 March 1996.
11. At no time did I ever attend a company meeting of Lecora or indeed attend any other meeting during which business decisions were made relating to Lecora or any other business in which the deceased was involved."
I should interpolate it is clear the deceased was involved in a number of business activities in the Sale area other than his activities involving the funeral parlour conducted by him.
"12. From time to time the deceased would bring home documents, sometimes in large numbers, some of which required my signature. He would simply ask me to sign those documents where indicated. 13. The deceased and I had a close and trusting relationship and he made it clear throughout our relationship that it was his role to run the businesses and to be responsible for financial matters within the household.
14. I have no past experience of running or being involved in businesses. By reason of training, experience or background I do not have any ability or acumen in the conduct of business or financial matters."
The plaintiff has also sworn in her affidavit that all documents signed by her were signed by her at home, that she never had any dealings with the local manager of the ANZ Bank, one Gary Eckel. In her affidavit she swore in relation to Eckel that:-
"He never telephoned or otherwise spoke to me about the mortgage or
guarantee or about any other business matter."It would seem to me that the plaintiff may have a little difficulty in sustaining such a claim. I say that for these reasons: Exhibited to the affidavit of Glynn Robert Sadler, a bank officer in the employ of the ANZ Banking Group sworn 10 November 1999, is a diary note dated 5 April 1989 and the diary note reads:
"Carol Rossetti called to execute an unlimited guarantee in favour of Lecora Pty Ltd. She was handed the guarantee to read and given the opportunity to seek legal advice. This she declined to do. The guarantee was explained to her in general terms and after stating that she understood the guarantee she freely signed it in the presence of Ray Garcia and Gary Shingles, Retail Banking Officers".
If the content of that diary note is correct, it flies right in the face of the plaintiff's statement that she never went to the bank, had any dealings with the bank, never had anything explained to her by the bank, and that she simply signed what documentation her husband brought home without understanding the content of it.
However, as I said, there is more than one difficulty facing the plaintiff so far as her Amadio type defence is concerned.
On 17 February 1997 her then solicitor, who I hasten to add is not the solicitor presently acting for her, wrote to the bank asking the bank to send to her any personal guarantees given by the deceased or Mrs Rossetti and copies of any documents acknowledging the extension of the guaranteed facility, for example, the bank bill of approximately $1,500,000. The letter stated that the information was required to properly ascertain the contingent liabilities of the estate.
On 24 February 1997, exactly one week later, the bank wrote to the plaintiff's then solicitor setting out details of all the facilities including the fully drawn advance of $1,000,000 and set out all the details of the security given by the plaintiff, the deceased and the companies with which he was associated. There is a clear statement in that letter concerning the mortgage over the Araluen Drive property, and I quote: "Registered Guarantee Mortgage over 21 Araluen Drive, Sale", and there is clear reference to the guarantees given to the bank by the plaintiff and her late husband and I quote: "Unlimited Guarantees in favour of Lecora Pty Ltd as trustee for the Rossetti Family Trust from:- Geoffrey Rossetti, Carol Rossetti."
There was never any suggestion at that time that the plaintiff did not understand that she, together with her husband, had executed a mortgage over the property or that she had given a personal guarantee in respect of the debts of Lecora. Indeed, it was not until a matter of days before the writ was filed in the court on 8 November that the first intimation was ever given to the bank to the effect that at the time the plaintiff signed the guarantee and then the mortgage she was unaware of the significance of the documentation she was executing. I refer in that connection to a letter dated 5 November 1999 from the plaintiff's present solicitors to the ANZ Bank's solicitors.
I have considered the material placed before me by the parties in this matter and I am not satisfied it is appropriate to grant the mandatory injunctive relief sought by the plaintiff.
There is, of course, the matter of delay in making the application. Possession of the property was taken on behalf of the bank on 6 September, the auction is to take place on 13 November. Although counsel for the plaintiff was unable to tell me when the plaintiff first became aware of the fact that the property was to be auctioned on 13 November, he freely conceded that the plaintiff had known of that fact well before the letter of 5 November was written by her solicitor's to the bank's solicitors.
Perhaps of more significance is that although I concede that the plaintiff may have an arguable case based on the principles laid down by the High Court in Amadio, I do not have that degree of confidence that she will succeed at the trial of the proceeding such that I would grant a mandatory injunction in the matter.
In the final analysis, if the plaintiff is ultimately successful in her proceeding in my opinion she would be adequately compensated by an appropriate award of damages. In that regard it is to be noted again that the plaintiff left the house at Sale, or ceased living in the house at Sale on a full-time basis in December 1998, sold up the contents of the house on 13 August 1999 and since that time the house has been vacant.
Accordingly, the application is dismissed with costs to be taxed including reserved costs and paid by the plaintiff.
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