Rural Bank Ltd v Fels - [2019] WASC 110

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RURAL BANK LTD -v- FELS [2019] WASC 110
CORAM:   MASTER SANDERSON
HEARD:   30 JANUARY 2019
DELIVERED          :   4 APRIL 2019
FILE NO/S:   CIV 1836 of 2017
BETWEEN:   RURAL BANK LTD
Plaintiff

AND

ANTHONY JAMES FELS
Defendant

Catchwords:

Practice and procedure - Plaintiff's application for summary judgment - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Summary judgment entered for the plaintiff

Category: B

Representation:

Counsel:

Plaintiff	:	Ms EL Blewett
Defendant	:	In person

Solicitors:

Plaintiff	:	Corrs Chambers Westgarth
Defendant	:	In person

Case(s) referred to in decision(s):

Walton Stores v Maher (1988) 164 CLR 387

MASTER SANDERSON:

This was the plaintiff's application for summary judgment.
The application has been beset by delays and procedural difficulties. An affidavit of Tegan Margaret Harrington was filed in support of the application. The defendant filed an affidavit dated 22 May 2018. This is the only affidavit he has filed. On 13 November 2018 I made programming orders and listed the matter for special appointment. The plaintiff complied with those orders but the defendant did not. He filed his submissions in opposition to the application on 25 January 2019. On 29 January 2019 the plaintiff lodged a list of objections to the defendant's affidavit. The issues were relatively straightforward.
The plaintiff's case is disclosed by the amended statement of claim filed 15 November 2018. The defendant is the registered proprietor of a property in Kojonup. On or about 29 October 2008 the plaintiff loaned money to the defendant. The loan was secured by a mortgage. The loan was for a fixed term and was repayable on or before 31 October 2013. The loan was not repaid. The defendant has continued to make interest payments and there is no suggestion that he is in any way delinquent. But he has not paid the loan. The plaintiff wants the loan repaid.
The plaintiff has satisfied the requirements of O 14 of the Rules of the Supreme Court 1971 (WA) (the Rules). That is to say the affidavit of Ms Harrington verifies the statement of claim and she swears she believes there is no defence to the claim. As is common in applications of this sort the plaintiff has gone much further than is strictly necessary. The loan documentation and the mortgage are attached to various affidavits as are copies of default notices. There is no doubt the loan was made and was due for repayment in October 2013.
The defendant's affidavit is a lengthy document which includes a raft of irrelevant material. I accept much of that material is background and the defendant has attempted to put in context the circumstances of his borrowing the funds. Further he has attempted to explain why the money has not been repaid. Reduced to its essentials the defendant's position is this. When he entered into the loan he did so on the understanding that when the term of the loan expired it would be rolled over. That is to say he believed he would not actually have to repay the principle if he was not in a position to do so. He says he was led to believe provided he had met the interest payments a new loan, which he conceded might have been on slightly different terms, would be put in place. This arrangement would, it seems, have continued indefinitely.
The defendant's evidence about the circumstances in which he entered into the loan transaction is found in pars 10, 11, 19, 29, 30 and 31 of his affidavit. These paragraphs read as follows:
10.I asked Mike if the Plaintiff made 5 year farming loans with interest fixed for up to 5 years at the borrowers choosing, and which would be rolled over at the end of the term provided the loan was not in default. That had been the approach to lending that Rabobank had when I worked there with Mike where we had a very successful and popular loan product for farmers. Mike said that the loan product of the Plaintiff was essentially the same as that at Rabobank. Mike told me he would contact Richard Gapper, who worked as the State Manager for Western Australia with the Plaintiff, to contact me.
11.Richard Gapper called me shortly thereafter and we discussed my requirements for a long term interest only loan facility to assist with my proposed purchase of 'Brookfield'. He confirmed that Elders Rural Bank was very competitive with Rabobank on interest rate, and the loan product was very similar in that it was initially for a 5 year term but would be rolled over into a new 5 year term at anytime, or to a principal and interest loan over 10 to 15 years if the borrower chose to do so. I told him that I was negotiating the purchase of 'Brookfield' in the Shire of Kojonup and that I would make an offer subject to finance from Elders Rural Bank. We agreed that I would apply for the finance after I was successful in my offer to purchase 'Brookfield'.
…
19.I recall raising with Mike and Richard that I wanted a loan product along the same lines as we used to do at Rabobank when we made loans to farmers for 5 year terms. Mike said that as long as the loan was being serviced properly and was not in default it would be rolled over at the end of the term for a further 5 years. It was important to me that that was the case, because I did not want to be placed in the position where the Bank called up repayment of the entire loan at the end of the 5 year period. I recall Richard said words that were in support of what Mike had said.
…
29.While I was overseas the Loan facility was prepared by Elders Rural Bank State Manager Richard Gapper and I signed this upon my return around 23 March 2007. The settlement took place on 26 March [2007].
30.Initially, I was loaned $300,000 by the Plaintiff in March 2007. That loan was incorrectly made under a 'Trading Facility' which was not what I had expected and not what I applied for. Due to the pressures I was under at the time as a Parliamentarian and being on a delegation with the Commonwealth Parliamentary Association in the UK when that loan was approved, I did not realise the mistake until I returned to Perth some weeks later.
31.I discussed the mistake with Richard Gapper who indicated that the Bank would roll it into a new 5 year fixed term interest facility as we had originally spoken of with Mike.
Each of these paragraphs is objected to by the plaintiff. In my view the evidence is admissible. The defendant explains the circumstances in which he entered into the loan agreement and the discussions he had with various persons. That is hardly objectionable. But even if the paragraphs in question had been objectionable given the late filing of the plaintiff's list of objections and the innocuous content of the paragraphs I would not have been prepared to strike them out. So in dealing with this matter I have had regard to the paragraphs in question. In his written submissions the defendant maintained what he was told by various executives of the plaintiff amounted to a promissory estoppel. The defendant made particular reference to the High Court decision in Walton Stores v Maher (1988) 164 CLR 387 and in particular the judgments of Mason CJ and Wilson J, 406.
The defendant's difficulty in running this argument is settling upon precisely what promise was made by the plaintiff. It cannot be that the plaintiff agreed to roll over the loan in perpetuity. During the course of his argument the defendant mentioned that it was a possibility the plaintiff would decide that any roll over would be on slightly different terms – that is to say the plaintiff might have required repayment of principle and interest on any renewed loan. Put at its highest, it would seem the plaintiff assured the defendant that if he was not in default of the loan when the term of the loan expired, the plaintiff would look favourably on providing another loan on similar terms. It is difficult to see how the obligation undertaken by the plaintiff could extend any further – after all the loan was by its terms for a fixed period and all parties must have been aware that at the end of that period something more would need to be done if the borrowing was to continue.
In support of its application the plaintiff relied upon an affidavit of Brian Norman Patton sworn 15 November 2018. That affidavit attaches a series of letters where the plaintiff attempted to obtain financial information from the defendant with a view to providing a new loan. The requests made for information are not controversial – what is sought are the types of financial statements required by most lenders before credit is extended. The plaintiff even went so far as to extend the date of repayment of the loan pending consideration of any application the defendant might make. But no information was forthcoming. Nowhere in the defendant's affidavit is this failure to supply information explained.
In my view it is clear there is no defence to this action. In reaching that conclusion I have borne in mind the heavy onus which is on a plaintiff – summary judgment is only available in the clearest of cases. It is also not a case of the defendant not clearly articulating his position. As I have indicated I have approached this on the basis the version of events most favourable to the defendant ought be adopted. However, even on that basis I am not satisfied there is any defence to this claim.
There will be judgment for the plaintiff. I will hear the parties as to the precise form of orders and as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DG
Associate to Master Sanderson
4 APRIL 2019