Sam v Wu & Ors (Ruling)
[2023] VCC 582
•18 April 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-22-00393
| Ty Sam | Plaintiff/defendant by counterclaim |
| v | |
| Qiujin Wu | First defendant/first plaintiff by counterclaim |
| and | |
| Eltham Oaks Pty Ltd (ACN 609 204 882) as trustee of Eltham Oaks Trust | Second defendant/second plaintiff by counterclaim |
| and | |
| Stamford Lawyers Pty Ltd (ACN 147 552 716) | Third party |
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JUDGE: | HER HONOUR JUDGE BRIMER | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 November 2022 | |
DATE OF RULING: | 18 April 2023 | |
CASE MAY BE CITED AS: | Sam v Wu & Ors (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 582 | |
RULING
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Subject:PRACTICE AND PROCEDURE
Catchwords: LOAN AGREEMENT – plaintiff entered into written loan agreement with first defendant – plaintiff advanced money to first defendant – GUARANTEE – whether term that second defendant would guarantee first defendant’s performance and observance of obligations under loan agreement – MORTGAGE – equitable second mortgage – first defendant failed to repay loan – defendants plead mortgage is void, alternatively, second defendant entitled to immediate discharge of mortgage – defendants allege mortgage secures amounts owing by second defendant as borrower, however no such amounts owing – THIRD PARTY – plaintiff filed third party notice against solicitor retained to prepare and execute loan agreement, guarantee and mortgage – breach of retainer – negligence – third party filed defence and issued subpoenas – THIRD PARTY SUMMONS – seeking orders to file amended defence to third party notice and notice of contribution – seeking orders for discovery – DEFENDANTS’ SUMMONS – seeking order that plaintiff’s claim against third party be stayed until plaintiff has obtained judgment and taken all reasonable steps to enforce judgment – seeking order that third party’s subpoenas be set aside – LOSS – whether plaintiff has yet suffered actual loss – question raised on pleadings and ought be determined at trial
Legislation Cited: County Court Civil Procedure Rules 2018 (Vic); Wrongs Act 1958 (Vic)
Cases Cited:Burton v Thom [2009] 1 NZLR 437; Hawkins v Clayton (1988) 164 CLR 539; Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd & Ors (2013) 247 CLR 613; Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627; Orwin v Rickards [2020] VSCA 225; Todd Hadley Pty Ltd v Lake Maintenance (NSW) Pty Ltd (No 2) [2020] NSWCA 81; Wardley Australia Limited v Western Australia (1992) 175 CLR 514
Ruling: Orders sought in the third party’s summons filed 8 November 2022 granted, defendants’ summons filed 9 November 2022 is dismissed
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T Messer | C Tang & Associates |
| For the Defendants For the Third Party | Ms N Hassan Mr P Cawthorn KC | Zouki Lawyers K & L Gates |
HER HONOUR:
Introduction
1This ruling is the determination of:
(a) a summons filed 8 November 2022 by the third party (Stamford); and
(b) a summons filed 9 November 2022 by the first defendant (Ms Wu) and the second defendant (Eltham Oaks) (the defendants).
Background
2Eltham Oaks is the registered proprietor of a property in Eltham (Property). At all material times, Ms Wu was the sole director and shareholder of Eltham Oaks.
3On 13 May 2019, Mr Sam entered into a written agreement with Ms Wu (Loan Agreement), in which he agreed to loan to Ms Wu the sum of $1,500,000 (Principal Sum). Further amounts were advanced at later times pursuant to the Loan Agreement. Relevantly, the Loan Agreement is alleged to include terms that:
(a) Ms Wu would procure the Property as security for repayment of the loan (Recital E); and
(b) Eltham Oaks consented and agreed to the Property being provided as security.
4Mr Sam alleges that on its proper construction, the Loan Agreement was a contract by which Eltham Oaks guaranteed the due and punctual performance and observance by Ms Wu of her obligations under the Loan Agreement (Guarantee).
5By equitable mortgage dated 13 May 2019 (Mortgage), it is alleged that Eltham Oaks mortgaged all its estate and interest in the Property in favour of Mr Sam to secure repayment of the loan in accordance with the terms of the Loan Agreement.
6In breach of the Loan Agreement, Ms Wu failed to repay the Principal Sum in full on the due date, fixed interest and the further advances (the sum). Mr Sam alleges that by reason of the Guarantee, Eltham Oaks is liable to pay the sum to Mr Sam, and that by reason of the Mortgage, the Property stands charged in favour of Mr Sam with payment of the sum.
7In response, the defendants admit the Loan Agreement, Principal Sum and further advances but plead that the interest provisions in the Loan Agreement constitute a penalty and are unenforceable. The defendants admit that Recital E of the Loan Agreement states that Ms Wu will procure the Property as security for the Principal Sum but plead that Recital E does not form part of the operative provisions of the Loan Agreement and is not an enforceable contractual term. They admit Ms Wu failed to pay the Principal Sum by the due date but made instalment repayments totalling $600,000. They deny the Loan Agreement contained a Guarantee, and plead that Eltham Oaks has no obligation to pay any amount to Mr Sam.
8The defendants admit that on around 13 May 2019, Eltham Oaks executed a Mortgage, but say that the Mortgage secures payment to Mr Sam of all amounts owing at the time of execution of the Mortgage or at any time in the future by Eltham Oaks as borrower in respect of the Loan Agreement. There is not, nor has there ever been, an amount owing by Eltham Oaks to Mr Sam in the capacity of a borrower under the Loan Agreement. The defendants also plead that the Mortgage is void, alternatively, that Eltham Oaks is entitled to obtain an immediate discharge of the Mortgage. By counterclaim, the defendants seek a declaration that the Mortgage is void.
9In light of the defendants’ Defence that the Mortgage is void and Counterclaim seeking a declaration the Mortgage is void, Mr Sam filed and served a Third Party Notice against Stamford, the solicitors retained by Mr Sam to act on his behalf in relation to the preparation and execution of the Loan Agreement, the Guarantee and the Mortgage. Mr Sam pleads that it was a duty of the retainer that Stamford would exercise reasonable care and skill. If the defendants’ allegations are true, then Stamford acted in breach of the retainer and negligently. At paragraph 8, Stamford pleads that by reason of those matters, Mr Sam has suffered, or may suffer, loss and damage, and claims damages for the loss of the benefit of the Loan Agreement, the Guarantee and the Mortgage.
10In its Defence to Third Party Notice, Stamford pleads that the Loan Agreement and Mortgage were prepared in accordance with Mr Sam’s instructions and approved by him prior to their execution. Mr Sam did not seek any amendments to the Loan Agreement, despite being advised to carefully review the terms of the Loan Agreement to ensure it accorded with his wishes prior to its execution.
11In response to Mr Sam’s pleading at paragraph 8 that by reason of Stamford’s negligence or breach of retainer, Mr Sam has suffered or may suffer loss and damage, Stamford responds that it did not cause the loss or damage claimed by the defendants and otherwise denies that Mr Sam has suffered loss and damage as alleged or at all. However, if it is found to have caused Mr Sam to suffer loss and damage on the basis pleaded in the Third Party Notice, such loss and damage was suffered in part as a result of Mr Sam’s failure to take reasonable care, and any damages recoverable from Stamford should be reduced having regard to Mr Sam’s responsibility for his loss and damage.
12On 8 November 2022, Stamford filed a Summons seeking leave to file an Amended Defence to Third Party Claim,[1] a Notice of Contribution,[2] and seeking orders for discovery of documents by the defendants/plaintiffs by counterclaim.
[1] The proposed Amended Defence to Third Party Notice is Attachment 1.
[2] The proposed Notice of Contribution is Attachment 2.
13The proposed amendments to paragraph 8(b) of Stamford’s Defence to the Third Party Notice are as follows:
(vi) Mr Sam has not established any loss and damage unless and until he may establish that the putative Guarantee from Eltham Oaks and the Mortgage over the Eltham Property would have had any identifiable benefit to Mr Sam in seeking recovery under the Loan Agreement against either of the defendants;
(vii) Stamford does not know and therefore cannot presently admit that, by virtue of the financial position of Ms Wu and/or Eltham Oaks, such a benefit can be established:
Particulars
Particulars of Ms Wu and Eltham Oaks’ financial position may be provided following further discovery from the defendants.
(viii) further and alternatively, Mr Sam has an obligation to mitigate his loss;
(ix)in so far as Mr Sam first fails to take all reasonable steps to recover under the Loan Agreement as against Ms Wu as the Borrower, any loss and damage (which is denied) should be reduced accordingly;…
14The proposed new paragraph 11 is as follows:
Further and alternatively, if:
(a)Stamford Lawyers is liable to Mr Sam for any loss and damage on the basis pleaded in the Statement of Third Party Claim (which is denied); and
(b)Ms Wu is liable to Mr Sam on the basis alleged in the Statement of Claim,
Stamford Lawyers is entitled to contribution from the first defendant pursuant to s23B of the Wrongs Act, alternatively contribution in equity.
15By Summons filed the following day, 9 November 2022, Ms Wu and Eltham Oaks seek a stay of Mr Sam’s claim against Stamford, alternatively, a stay of the assessment of damages until after Mr Sam has obtained judgment against Ms Wu and taken all reasonable steps to enforce it. The defendants also oppose Stamford filing an Amended Defence to Third Party Notice and Contribution Notice, oppose Stamford’s application for discovery, and seek to have subpoenas issued by Stamford set aside.
Orders sought and conclusion
16Stamford seeks the following orders against the defendants:
1. That within 7 days of the making of these orders, the third party have leave to file and serve an amended defence to the third party notice, and a notice of contribution, substantially in the form contained on pages 52-60 in exhibit “CWC-1” to the affidavit of Christien William Corns made on 7 November 2022.
2. That within 7 days of the making of these orders, the defendants make discovery pursuant to order 7 of the Court’s orders made on 24 March 2022, alternatively pursuant to r29.07 of the County Court Civil Procedure Rules 2018, of the following documents which are in their possession, custody or power:
(a) statements from the Australian and New Zealand Banking Group Limited for the period 13 May 2019 to present in respect of any loan or mortgage for which the first defendant is or was liable;
(b) statements from the Westpac Banking Corporation and/Perpetual Corporate Trust Limited for the period 13 May 2019 to present in respect of any loan or mortgage for which the second defendant is or was liable;
(c) all documents evidencing the first defendant’s assets and liabilities for the period 1 May 2019 to present;
(d) financial statements and tax returns for the second defendant for the financial years ending 30 June 2019; 30 June 2020; 30 June 2021 and 30 June 2022; and
(e) all documents evidencing the financial position of the second defendant from 1 July 2022 to present including balance sheets, profit and loss statements and cash flow statements.
3. Costs.
17The defendants seek the following orders:
1. The plaintiff’s claim against the third party be stayed until such time as the plaintiff has obtained judgment against the first and/or second defendant and has taken all reasonable steps to enforce that judgment.
2. Alternatively, the assessment of damages between the plaintiffs and the third party, and any related claim for contribution, be stayed until such time as the plaintiff has obtained judgment against the first and/or second defendant and has taken all reasonable steps to enforce that judgment.
3. The subpoenas issued by the third party on 8 November 2022 to the following addresses be set aside:
(a) Westpac Banking Corporation
(b) Australia and New Zealand Banking Group Ltd
(c) Perpetual Corporate Trustee Ltd
4. Costs.
18The subpoenas seek production of documents showing the amount of any loan and/or Mortgage debt in relation to Ms Wu and/or Eltham Oaks and comprising or evidencing a valuation of the Property. There was no issue between the parties that the application to set aside the subpoenas concerns the same issue of relevance as that raised in respect of the discovery argument. Ms Hassan submitted the subpoenas have no legitimate forensic purpose because the documents sought are irrelevant for exactly the same reasons as the documents sought on discovery. Should I decide the documents sought on discovery are relevant, it follows the subpoenas should not be set aside.
19For the reasons that follow, I will make the orders sought by Stamford and dismiss the defendants’ summons.
Stamford’s submissions
20Mr Cawthorn submitted that leave to file the proposed Amended Defence to Third Party Notice ought to be given. Mr Sam does not object to the proposed amendments being made. The defendants have no standing to object to the proposed amendments because the Third Party Defence is not addressed to them.
21The Court should order discovery of the documents sought because they are relevant to whether Mr Sam has suffered loss in connection with Mr Sam’s claim against Stamford. The ability of the borrowers to repay, the quality of the security, what was secured at various points in time and the indebtedness of the defendants to others are relevant to the question whether loss has been suffered. If, for example, there was no equity in the Property because the state of indebtedness to prior lenders was in excess of the value of the Property, then Stamford will have caused no loss. As such, the documents may adversely affect another party’s case or support another party’s case and ought to be discovered.[3]
[3] Rule 29.01.1(3) and the paragraph 7 of the orders of Judicial Register Bennett dated 25 March 2022.
22The question whether Mr Sam has suffered loss is to be determined at trial. If, on the defendants’ pleaded case, the Mortgage is found to be void, then Mr Sam arguably suffered loss at the time the void Mortgage was created.[4]
[4] For the purpose of discovery, one must assume that that argument might be made out and that loss
has been suffered or may have been suffered.
23Referring to Orwin v Rickards (Orwin)[5] and Todd Hadley Pty Ltd v Lake Maintenance (NSW) Pty Ltd (No 2) (Todd Hadley),[6] Mr Cawthorn submitted that it is not necessary for Mr Sam to wait until recovery is had against the defendants before it could be said loss is suffered. The defendants’ position that no loss has been suffered yet because it is unclear whether or not the defendants can or will pay, or whether the property is worth anything, and that the loss is “contingent” is wrong and misconceived.
[5][2020] VSCA 225.
[6][2020] NSWCA 81.
24Orwin concerned a binding financial agreement entered into by a couple. When the couple separated, the agreement was found to be defective; the financial agreement could never have satisfied the relevant statutory provisions upon which Ms Orwin sought to rely as a bar to the proceedings later brought. The party brought a claim in negligence against the solicitor that prepared the defective agreement. The issue in that case was when the loss had accrued against the solicitor. The Victorian Court of Appeal held that the loss had accrued, and time began to run, from the time the agreement was prepared, not when the parties separated. Maxwell P, Tate and Beach JJA said:
We deal first with the argument that Ms Orwin sustained no actual damage until the fulfilment of the two contingencies — the breakdown of the de facto relationship and the commencement of a proceeding by Mr Sarah. The authorities show that where — as here — the defendant’s negligence results in the plaintiff being provided with a defective contract, the issue of what damage is suffered, and when, will often turn on how the damage is characterised. If the defective contract is characterised as an asset, and the defendant as having delivered ‘damaged goods’, the loss is treated as having been suffered immediately. If, however, the question is approached by reference to the character of the contract, and the consequences for the plaintiff of its particular provisions (or lack of provisions), a quite different result may follow.[7]
[7]Orwin [53].
25In Todd Hadley, the New South Wales Court of Appeal considered the point in time at which a lender’s cause of action in negligence accrued against a valuer of property for mortgage valuation purposes. Bell P (as he then was) referred to the following passage from Wardley Australia Limited v Western Australia (Wardley):[8]
… the suffering of any loss cannot be said to occur before it is reasonably ascertainable (not before it is ascertained) that the burdens which the plaintiff has borne are greater than the value of the benefits that the plaintiff has acquired or will acquire. In other words, no loss is suffered until it is reasonably ascertainable that, by bearing the burdens, the plaintiff is ‘worse off than if he had not entered into the transaction’.[9]
[8](1992) 175 CLR 514.
[9]Todd Hadley [49]; citing Wardley 537.
26Mr Cawthorn submitted that those words suggest that as long as it is reasonably ascertainable that you have a defective mortgage, if that is the case here, the lender will have suffered loss.
27Bell P also referred to the case of Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No 2) (Nykredit),[10] a decision of the House of Lords. That case involved a claim against a valuer who had provided a valuation for mortgage security purposes. The House of Lords treated the sale of the mortgaged property as crystallising the lender’s loss, meaning that the cause of action against the valuer in that case must necessarily have arisen by that time. Mr Cawthorn referred to the following passage in Nykredit:
Ascribing a value to the borrower's covenant should not be unduly troublesome. A comparable exercise regarding lessees' covenants is a routine matter when valuing property. Sometimes the comparison will reveal a loss from the inception of the loan transaction. The borrower may be a company with no other assets, its sole business may comprise redeveloping and reselling the property, and for repayment the lender may be looking solely to his security. In such a case, if the property is worth less than the amount of the loan, relevant and measurable loss will be sustained at once. In other cases the borrower's covenant may have value, and until there is default the lender may presently sustain no loss even though the security is worth less than the amount of the loan. Conversely, in some cases there may be no loss even when the borrower defaults. A borrower may default after a while but when he does so, despite the overvaluation, the security may still be adequate.
It should be acknowledged at once that, to greater or lesser extent, quantification of the lender's loss is bound to be less certain, and therefore less satisfactory, if the quantification exercise is carried out before, rather than after, the security is ultimately sold. This consideration weighed heavily with the High Court of Australia in Wardley Australia Ltd. v. State of Western Australia (1992) 175 C.L.R. 514. But the difficulties of assessment at the earlier stage do not seem to me to lead to the conclusion that at the earlier stage the lender has suffered no measurable loss and has no cause of action, and that it is only when the assessment becomes more straightforward or final that loss first arises and with it the cause of action.
Indeed, for the cause of action to arise only when the lender realises his security would be a highly unattractive proposition. It would mean that, however obvious it may be that the lender will not recover his money, he cannot start proceedings. He must wait until he manages to sell the property, a process which may be protracted. This would be a surprising stance for the law to take.[11]
[10][1997] 1 WLR 1627.
[11]Todd Hadley [62]; citing Nykredit 1631-32.
28Bell P stated that:
The key to the present case lies, in my opinion, in focusing upon the nature of the interest infringed...
The nature of the interest infringed was, relevantly, the ability to “recoup” from the proceeds of sale the moneys advanced by way of loan…
Lake Maintenance [the lender] could no longer look to the property to recover its debt. Any subsequent recovery from the borrower would have to be brought to account, but the prospect or possibility of such recovery did not stand in the way of an action being brought against the Valuer then and there. The cause of action had accrued.
If it were the case that the borrower was still solvent but Lake Maintenance had not sued it, it may have been open to the Valuer to contend that there had been a failure to mitigate the loss sued upon, or possibly to raise a proportionate liability defence consistent with the decision in Hunt & Hunt. But neither of these potential defences would mean that the cause of action had not accrued. They would be germane only to matters of quantum.[12]
[12]Todd Hadley [68]-[70].
29If Ms Hassan’s contention that Mr Sam’s claim against Stamford cannot crystallise until recoupment of the debt from Ms Wu becomes impossible, then discovery should also be given so that Stamford can ascertain whether it could be said with some certainty that recoupment is impossible, and Mr Sam has suffered loss.
30Loss turns on reference to factual matters such as the amount of the defendants’ pre-existing indebtedness and financial position. The documents sought are relevant to the defendants’ indebtedness and financial position. Mr Cawthorn submitted that “those are things we don’t know. And those are things we are seeking to have documents produced on discovery.”
31For the reasons discovery ought to be given, the subpoenas are directly relevant to issues in the proceeding and should not be set aside.
32In relation to the notice of contribution, Mr Cawthorn submitted that if, as the defendants contend, the Mortgage is void, then the third party would be liable for the debt and so would the defendant and that is the same damage. If the Mortgage does not secure anything, the damage that Stamford caused is the loss of the loan to Mr Sam whilst the loss that the borrower caused is not paying back the loan. The contribution notice will not take up any extra time and is simply a legal argument depending on the facts that fall out in the course of the trial.
33Mr Cawthorn submitted that all the issues raised by Ms Hassan can be argued at trial. They should all be determined at the same time to avoid a risk of inconsistent decisions.
34The Court should not order a stay at this time. Until it gets discovery, Stamford cannot make an informed decision about whether or not it would support an application for a stay.
Defendants’ submissions
35Ms Hassan submitted that in the case of a negligently drafted mortgage where the economic interest infringed is the interest in recouping monies, loss accrues at the point when recoupment can be said, with some certainty, to be impossible. At this point in time, it is impossible to say with any certainty that Mr Sam will not be able to recover from Ms Wu. That cannot occur until after Mr Sam has obtained judgment against Ms Wu and taken all reasonable steps to enforce it.
36To support her position, Ms Hassan referred to Wardley, in which a majority of the High Court stated that:
Economic loss may take a variety of forms and, as Gaudron J noted in Hawkins v Clayton,[13] the answer to the question when a cause of action for negligence causing economic loss accrues may require consideration of the precise interest infringed by the negligent act or omission. That kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough. (some citations omitted)[14]
[13] (1988) 164 CLR 539.
[14]Wardley 527.
37The majority later opined that:
The conclusion which we have reached with respect to the time when the plaintiff first suffers loss in respect of contingent loss or liability accords with the comment of Gaudron J in Hawkins v Clayton:
“[I]f the interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual of the cause of action when recoupment becomes impossible rather than at the time when the antecedent right to recoup should have come into existence, for the actual loss is sustained only when recoupment becomes impossible.”[15]
[15]Ibid 533-4; citing Hawkins v Clayton 601.
38The High Court later applied this principle in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd & Ors (Hunt & Hunt).[16] In that case, a lender claimed against a solicitor for negligently drawing a mortgage. The mortgage secured nothing from the day it was executed. A majority of the High Court considered Wardley and the need to identify the precise nature of the economic interest that is infringed when assessing what the damage is. The majority stated that:
The nature of Mitchell Morgan’s [the lender’s] economic interest is much the same. The harm it suffered is that it is unable to recover the sums advanced… Mitchell Morgan’s plea that it continues to suffer loss and damage is explicable on the basis that it continues to be unable to recover those sums.[17]
[16](2013) 247 CLR 613.
[17]Ibid 630.
39The majority went on to state that:
In Wardley Australia Ltd v Western Australia, a distinction, in principle, was drawn between the legal concept of loss and damage, and the detriment which a plaintiff may be said, in a general sense, to have suffered upon being induced by a misrepresentation to enter an agreement which proves to be disadvantageous. Entry into a loan agreement in these circumstances does not necessarily mean that a plaintiff has suffered damage, because it will not immediately be self-evident that the value of the chose in action acquired, the right to repayment of the moneys advanced, is worth less than the amount paid.
A mortgage negligently drawn is also not necessarily productive of loss, except perhaps in the case of a mortgagor whose equity of redemption is affected immediately on its execution. Recourse to a mortgage will not be necessary in every case. In general terms, in a case involving a loan of moneys, damage will be sustained and the cause of action will accrue only when recovery can be said, with some certainty, to be impossible. There are good reasons for a principled analysis of actual damage. One reason is that it would be unjust to compel a plaintiff to commence proceedings before the existence of his or her loss is ascertainable.
At a later point in his reasons, Giles JA identified Mitchell Morgan’s loss as the moneys paid and said that the loss occurred immediately the moneys were paid. His Honour may have assumed that loss has occurred because the loan agreement was unenforceable and the mortgage ineffective. Nonetheless, that is not a complete analysis of loss and damage. At the time the moneys were paid there was a serious risk that loss would accrue. But when the agreement and the mortgage were entered into and the payment made, it could not be said that Mitchell Morgan’s rights of recovery against the fraudsters, one of whom was a solicitor, were valueless. (emphasis added, citations omitted)[18]
[18]Ibid 631.
40The authorities relied upon by the plaintiff to support his contention that he has suffered loss do not say anything about how loss from a negligently drafted mortgage is to be characterised. Orwin is authority only for the proposition that where the loss is a negligently drafted binding financial agreement, it is to be characterised as a damaged asset because that is the state of the authorities in relation to that kind of document. Todd Hadley does not assist either because it was not about a negligently drawn mortgage, but rather a negligent valuation.
41In the present circumstances, it cannot be said with any certainty that recoupment is impossible because the current case does not involve only one asset, but rather an asset pool and an active business that is being operated. There are several independent factors that cause the value of those assets to fluctuate over time and cause the cash flow to fluctuate over time. The values need to crystallise by sale before it can be said with certainty that it is impossible that what is left is going to cover the debt.
42Ms Hassan accepted that there are two causes of action against Stamford, one in negligence and one arising out of a breach of contract, and that a breach of contract is actionable per se. However, the contract claim cannot be brought until all of the elements of the cause of action have been satisfied. If one of the elements of the cause of action is damages for loss, then the loss must actually have occurred. In the circumstances of this case, actual loss arises when recoupment is with certainty impossible, which cannot happen until after judgment in the primary proceeding. Until then, Mr Sam cannot get discovery or bring subpoenas or bring a contribution claim.
43In relation to discovery, Ms Hassan submitted that Stamford is seeking documents to enable it to ascertain both Ms Wu’s and Eltham Oaks’ asset position at every point in time since May 2019 when the loan was made. The defendants’ asset position only matters when the loss crystallises, which cannot happen before judgment. The loss will be the difference between the sum Mr Sam in fact recoups from Ms Wu and the total sum he would have recouped from Ms Wu and Eltham Oaks had the Loan Agreement, Guarantee and Mortgage been properly drafted.
44The defendants’ asset position at every point since May 2019 is entirely irrelevant. The defendants’ financial positions may well change between now and when the time for payment of the judgment comes. As previously submitted, the values need to crystallise before it could be said with certainty that it is impossible that what is left is going to cover the debt. Ms Wu is entitled not to have the other parties rifle through her entire financial position from 2019 until now until it actual becomes relevant to something.[19]
[19] As set out in the Defendants’ Written Submissions dated 11 November 2022, [17]-[20].
45For the same reasons the subpoenas lack a legitimate forensic purpose and ought to be set aside.
46In relation to the contribution claim, Ms Hassan noted that it appears in two documents:
(a) the proposed amended Defence to Third Party Defence; and
(b) the contribution notice, which the third party need leave to file and serve because it is served out of time.
47The proposed amendments to the Defence to Third Party Notice indicate that the basis of the contribution claim is s23B of the Wrongs Act1958 (Vic) (Wrongs Act) and in equity. Ms Hassan submitted that the contribution claim should not be in the Defence to Third Party Notice because it does not concern Mr Sam, but is rather a claim between Stamford and Ms Wu.
48The contribution claim is opposed for three reasons:
(a) first, the contribution claim has not yet accrued. Section 23B states that a person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage. Since Mr Sam has not suffered any damage, Stamford cannot be liable for it.
(b) second, because Ms Wu and Stamford are not liable in respect of the same damage. Mr Sam’s claim against Ms Wu is not a claim in damages, but a claim in debt. Mr Sam does not claim damages from Ms Wu, but rather repayment of the debt plus interest. It is a different type of cause of action. The liability that Ms Wu has to Mr Sam is not liability for damage in the sense that phrase is used in s23B.
(c) third, there cannot be a contribution claim in equity because the liabilities of Ms Wu and Stamford are not co-ordinate liabilities. Ms Wu cannot claim contribution from Stamford for her lack of payment of the debt.
49On the issue of a stay, Ms Hassan submitted that, at the very least, assessment of damages needs to be stayed until the loss crystallises. Since actual loss cannot be incurred before the judgment in the primary proceeding, then the assessment of damages has to wait if Mr Sam wants to pursue that loss. The alternative would require the Court to estimate damages on the basis of likelihood or probability instead of by reference to established events, which would create the risk of overcompensation or undercompensation.
50Ms Hassan accepted that the third party procedure exists to promote efficiency, that it is exercised every day, and that it does have a very important purpose in the administration of justice, but only in circumstances where the third party claim which is to be heard at the same time already exists. The procedure cannot dictate the existence or non-existence of the claim. In response to the concern that a stay would give rise to inconsistent decisions, Ms Hassan submitted that that is not the consequence of the defendants’ application because it will be a continuation of the same proceeding, which has already commenced.
Mr Sam’s submissions
51Mr Sam opposed the defendants’ application for a stay. Counsel for Mr Sam, Mr Messer, submitted that Mr Sam’s cause of action has crystallised because he has sustained damage.
52The defendants’ submissions that Mr Sam’s claim in negligence has not yet accrued, and that his damages claim against Stamford cannot crystallise until recoupment of the debt from Ms Wu becomes impossible, ought be rejected. The interest of Mr Sam infringed is not a mere interest in recouping money, but also an interest in ensuring that repayment of a very significant loan advance was secured rather than unsecured. Further, he has incurred significant legal costs pursuing the defendants in this proceeding. It is a matter for the court to assess his damages, which are separate and distinct from the question of damage. His cause of action crystallises upon him sustaining damage, and Mr Sam has sustained damage.
53Mr Messer submitted that Ms Hassan’s reliance on Hunt & Hunt is misplaced because that case was only a consideration of contingent loss. It was not necessary for the High Court to consider the damaged goods versus contingent loss dichotomy because the case was about proportionate liability.
54The question arose squarely in Todd Hadley and Orwin, both of which were handed down after Hunt & Hunt. At paragraph 54 of Todd Hadley, Bell P referred to the following extract from Hunt & Hunt:
In the identification of the damage or loss that is the subject of the claim, it is necessary to bear in mind that damage is not to be equated with what is ultimately awarded by the court, which is to say the ‘damages’ which are claimed by way of compensation and which are assessed and awarded for each aspect of the damage suffered by a plaintiff. Damage, properly understood, is the injury and other foreseeable consequences suffered by a plaintiff. In the context of economic loss, loss or damage may be understood as the harm suffered to a plaintiff's economic interests. It has already been observed that the Civil Liability Act equates ‘harm’ with damage to property and economic loss which results from a failure to exercise reasonable care and skill. Mitchell Morgan's pleading does not expressly state the loss and damage it claims to have suffered. However, it claims that the loss and damage is continuing and that it has lost the sum advanced, together with interest and other expenses. Taken together this might suggest that Mitchell Morgan claims to be unable to recover those monies.
In Hawkins v Clayton, Gaudron J pointed out that in an action for negligence causing economic loss it will almost always be necessary to identify, with some precision, the interest infringed by the negligent act. In that case, it was necessary to identify the interest in order to answer the question as to when the cause of action accrued. Its identification is also necessary for a proper understanding of the harm suffered and for the determination of what acts or omissions may be said to have caused that damage. As her Honour observed, economic loss may take many forms. In Wardley Australia Ltd v Western Australia, it was said that the kind of economic loss which is sustained, as well as the time when it is sustained, depends upon the nature of the interest infringed and in some cases, perhaps, upon the nature of the interference to which it is subjected.
An interest which is the subject of economic loss need not be derived from proprietary rights or obligations governed by the general law. The interest infringed may be in the value of property or its physical condition. Thus in The Commonwealth v Cornwell, the respondent's interest was an entitlement conferred by federal statute to participate in a Commonwealth superannuation fund. An economic interest must be something the loss or invasion of which is compensable by a sum of money. One such interest identified in the cases is a lender's interest in the recovery of moneys advanced.” (footnotes omitted, emphasis added)[20]
[20]Todd Hadley [54]; citing Hunt & Hunt 628-630.
55The Court of Appeal in Orwin referred to the following passage from the New Zealand Supreme Court decision of Burton v Thom (Burton):[21]
This is therefore a damaged asset case, not one of exposure to a contingent liability. The asset in question is the prenuptial agreement under which the plaintiff was supposed to obtain full protection against claims by his future wife for a share in the matrimonial home. The asset which the plaintiff acquired was, as a result of the combined negligence of his solicitors and himself, defective in that it did not give him the protection which it was his purpose to obtain. The product which he instructed his solicitors to procure for him was created with an inherent flaw. That flaw represented actual damage or harm which was suffered by the plaintiff from the moment the defective prenuptial agreement came into existence. The damage was quantifiable at that stage, either on the straightforward basis of what it would have cost the plaintiff to obtain or attempt to obtain a valid agreement or on the more difficult basis of the difference in value between a defective agreement and one which was not defective.[22]
[21][2009] 1 NZLR 437.
[22]Ibid 459 [59]; Orwin [58].
56Mr Messer submitted that there is no reason in principle why this passage does not apply to the facts of this case. If one were to simply substitute the word “pre-nup” for “mortgage”, then exactly the same point is made. If the defendants are correct in stating that the Mortgage secured nothing from the outset, then damage was suffered from the outset, which makes this a damaged goods case, not a case involving contingent liability. If the Mortgage is void, then Mr Sam suffered an immediate loss. Hence, the cause of action has accrued and the court should not stay or make any orders under the third party claim.
57Further, the claim in contract has accrued, because claims in contract are actionable per se. The fact that there has been no proof of damages is not to the point. The contract claim should not be stayed and, if that is not stayed, then the claim in tort should not be stayed.
58Mr Messer submitted that whether the claim has accrued is, in any event, beside the point. He submitted that staying Mr Sam’s claim against Stamford is contrary to the objects of the third party procedure. The third party procedure is set out in O 11 of the County Court Civil Procedure Rules2018 (Vic) (Rules). Rule 11.01 sets out the rules for a claim by third party notice:
11.01 Claim by third party notice
Where a defendant claims as against a person not already a party to the proceeding (in this Order called the third party)—
(a) any contribution or indemnity;
(b) any relief or remedy relating to or connected with the original subject matter of the proceeding and substantially the same as some relief or remedy claimed by the plaintiff; or
(c) that any question relating to or connected with the original subject matter of the proceeding should be determined not only as between the plaintiff and the defendant but also as between either or both of them and the third party—
the defendant may join the third party as a party to the proceeding and make the claim against that third party by filing and serving a third party notice.
59Mr Messer also referred to r1.14(a) of the Rules, which states that:
1.14 Exercise of power
(1) In exercising any power under these Rules the Court—
(a) shall endeavour to ensure that all questions in the proceeding are effectively, completely, promptly and economically determined;
(b) may give any direction or impose any term or condition it thinks fit.
(2) The Court may exercise any power under these Rules of its own motion or on the application of a party or of any person who has a sufficient interest.
60The third party procedure has a number of objects, which are set out in the commentary on r11.01 in Civil Procedure Victoria (CPV):[23]
One is to get the third party bound by the decision of the court on any question between the plaintiff and the defendant on which the liability of the third party to the defendant depends. It thus prevents the same question being tried twice, once between the plaintiff and defendant and later between the defendant and third party, and the possibility of the question being differently found by the two different tribunals which try it. Such a result “…not only defeats justice, but also is calculated to bring the administration of justice into disrepute”. The third party can participate in the trial between the plaintiff and defendant and, where appropriate, contest the liability of the defendant to the plaintiff on any ground not raised by the defendant. A second object of the third party procedure is to prevent a multiplicity of proceedings, as it enables the court to determine the dispute between the defendant and third party at the same time as that between the plaintiff and defendant. Next, third party joinder is directed to saving the extra expense which would be involved by two independent proceedings.
[23] David Bailey, John Arthur, Daniel Nguyen and Nicolas Dour, Civil Procedure Victoria (LexisNexis,
online version, accessed 13 April 2023).
61The object of the third party procedure is also explained in the case of Edwards v Edwards,[24] where Hodges J stated:
If one looks at the reason for the legislation and the rules on this subject, it will be found that the object of the legislation and the rules is twofold. In the first place, it is to prevent the multiplication or multiplicity of legal proceedings. But there is a much more important matter – a much more important mischief – which the legislation is aimed at; which is this – to prevent the same issue being tried twice (once between the plaintiff and the defendant, and at another time between the defendant and the third party), and the possibility of such issue being differently found by the two different tribunals which try it: that not only defeats justice, but is also calculated to bring the administration of justice into disrepute.[25]
[24][1913] VLR 30.
[25]Ibid 32.
62The third party claim should be both advanced now and heard at the same time as a primary trial. If this gets pushed off and is heard by another judge, then that judge is not bound by the decision in the first proceeding. If one judge concludes that the Mortgage and the loan documentation were ineffective from the outset, and then a second judge in the professional negligence action reaches a different conclusion, then Mr Sam “falls between two stools”. That is precisely the vice that O 11 is designed to avoid, and it is precisely for this reason that these claims must be heard and determined at the same time before the same judge.
63If the defendants have their way, and Mr Sam is stood over while events play out, then Mr Sam runs the risk of a claim brought against Stamford being statute-barred.
64Mr Messer submitted that the purpose of the defendants’ application is to defeat Stamford’s application for further and better discovery. That is not a proper basis for staying the third party proceeding. The defendants’ summons ought to be dismissed.
Consideration
Loss
65It is convenient first to deal with Ms Hassan’s submission that Mr Sam has not yet suffered actual loss by reason of Stamford’s negligence and his claim for damages against Stamford cannot crystallise until recoupment of the debt from Ms Wu becomes impossible. The issue of when the loss crystallises “really underpins the defendant’s position on all of the applications.”[26]
[26] As submitted by Ms Hassan.
66In my view, it cannot be said at this interlocutory stage, that Mr Sam has not suffered actual loss by reason of Stamford’s alleged negligence and therefore the claim for damages has not yet accrued. Ms Hassan’s submission that Mr Sam’s “… claim for damages against Stamford cannot crystallise until recoupment of the debt from Ms Wu becomes impossible” ought to be rejected.
67The question whether Mr Sam has suffered loss and damage as against Stamford is a question raised on the pleadings and ought to be determined at trial. It is a question relating to or connected with the original subject matter of the proceeding as contemplated by r11.01 of the Rules and is properly the subject of the third party notice and claim. The claim[27] ought not be stayed until such time as the plaintiff has obtained judgment against the first defendant and/or second defendant and has taken all reasonable steps to enforce that judgment. The orders sought by Stamford ought to be made to ensure that all questions in the proceeding are effectively, completely, promptly and economically determined in accordance with r1.14 of the Rules.
[27] Alternatively, the assessment of damages at this stage. Ms Hassan accepted that Mr Sam’s claim in contract is actionable per se.
68The pleadings underpin Mr Sam’s contention that he has suffered loss:
(a) at [11(3)] of the Defence, Ms Lu and Eltham Oakes plead that “the mortgage is void.”
(b) at [5(d)] of his Statement of Claim on Third Party Notice, Mr Sam pleads that, by their Defence and Counterclaim, the defendants allege against Mr Sam that the Mortgage secures nothing and is void, alternatively should be discharged.
(c) by reason of that matter (and others) at [8] of his Statement of Claim on Third Party Notice, Mr Sam pleads he “has suffered, or may suffer,” loss and damage. The loss is particularised as the “loss of the benefit of the Loan Agreement, the Guarantee and the Mortgage.”
69If the Mortgage is void, as pleaded by the defendants and in respect of which a declaration is sought, then arguably, as Mr Sam contends, he has suffered loss because a defective parcel of rights was created at that time. The Mortgage was created with an inherent flaw. In those circumstances, it is arguable that the interest in the loan being secured was valueless. If the Mortgage was void, there was no potential for recovery at that time. There was never any chance of recoupment.[28] That flaw represented actual damage or harm which was suffered by the plaintiff from the moment the defective Mortgage came into existence.[29]
[28] Todd Handley [46].
[29] As was the prenuptial agreement in Burton as cited in Todd Handley at [58].
70In Orwin, the financial agreement was not capable of being a binding financial agreement under the Family Law Act constituting a bar in the proceedings. The Court of Appeal rejected the challenge to the trial judge’s characterisation of the loss as ‘damaged goods’ and concluded that either characterisation[30] might properly have been adopted. The Court observed that:
As this review of the authorities makes clear, the classification of loss in the present case was a question of real difficulty… It is almost 30 years since Wardley was decided by the High Court. This degree of uncertainty in an important area of the law is regrettable.[31]
[30] Damaged asset or contingent loss.
[31] At [61].
71It is not, in my view, to the point that the document in Orwin was a financial agreement and the present case involves a mortgage. The relevant analysis is in respect of the nature of the interest that is said to be infringed[32] and whether it could be said loss has been suffered.
[32] Bell J observed at [68] in Todd Handley that: “The key to the present case lies, in my opinion, in focusing
upon the nature of the interest infringed…”.
72The authorities relied upon by Ms Hassan to support her contention that the cause of action against Stamford has not yet arisen because the cause of action will accrue only when recovery can be said with some certainty to be impossible are limited in their application to the present circumstances. Both Wardley and Hunt v Hunt proceeded on the basis that the loss suffered was a contingent loss:
(a) Wardley was a misrepresentation case inducing entry into a deed of indemnity. In Wardley, there was no issue that the indemnity was valid. The plaintiff was misled into giving the indemnity. In that context, the Court referred to the comment of Gaudron J in Hawkins v Clayton that:
[I]f the interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual of the cause of action when recoupment becomes impossible rather than at the time when the antecedent right to recoup should have come into existence, for the actual loss is sustained only when recoupment becomes impossible. (emphasis added)[33]
(b) In Hunt v Hunt, the mortgage was negligently drawn because it was prepared as an “all money” mortgage that secured the loan solely by reference to a separate loan agreement which was void by reason of forgery. The mortgage gained the benefit of indefeasibility by registration but it secured nothing because the underlying loan was unenforceable. The issue was the solicitor’s negligence in drafting the mortgage that way rather than by securing a fixed sum, not that the mortgage itself was void. In that context, the majority stated:
A mortgage negligently drawn is also not necessarily productive of loss… Recourse to a mortgage will not be necessary in every case. In general terms, in a case involving a loan of moneys, damage will be sustained and the cause of action will accrue only when recovery can be said, with some certainty, to be impossible. (emphasis added)[34]
[33] Wardley 533; citing Hawkins v Clayton 601.
[34] Hunt v Hunt 631.
73As set out above, it is the defendant’s case on its own pleading that the mortgage was void and that recoupment of money from Eltham Oaks is impossible. If that is the case, then it is arguably “… reasonably ascertainable that, by bearing the burdens, the plaintiff is worse off than if he had not entered into the transaction…”[35] and loss has been suffered.
[35] Todd Handley [49], citing Wardley 537.
74Ms Hassan’s submission that “The amount of Mr Sam’s loss due to Stamford’s negligence will be the difference between what he is in fact able to recoup from Ms Wu, and what he would have recouped had the Loan Agreement, Guarantee and Mortgage been drawn as he alleges they should have been drawn…”[36] is properly a submission directed to quantification of the loss and ought not be conflated with the question whether loss has been suffered. As was observed by French CJ, Hayne and Kiefel JJ in Hunt v Hunt:
In the identification of the damage or loss that is the subject of the claim, it is necessary to bear in mind that damage is not to be equated with what is ultimately awarded by the court, which is to say the ‘damages’ which are claimed by way of compensation and which are assessed and awarded for each aspect of the damage suffered by the plaintiff. Damage, properly understood, is the injury and other foreseeable consequences suffered by a plaintiff. In the context of economic loss, loss or damage may be understood as the harm suffered to the plaintiff’s economic interests…[37]
[36] Defendants Written Submissions dated 11 November 2022, [6]. Emphasis added.
[37] At [24].
75A claim for damages quantified by reference to the sum the plaintiff is unable to recoup does not make the loss suffered a contingent or prospective loss. Whilst it may not be possible to know precisely what the shortfall, if any will be, that does not mean that loss and damage has not been suffered and the cause of action accrued. This is consistent with the observations of Bell P in Todd Handley that “… the posited subsequent recovery against the borrower did not mean that the lender’s cause of action against the negligent Valuer… had not accrued at an earlier point in time.”[38]
[38] At [77].
76Whilst it may be less satisfactory if the quantification exercise is carried out before, rather than after reasonable efforts are made to recover from Ms Wu, this does not mean the cause of action has not accrued. Any subsequent recovery from Ms Wu would have to be brought to account. In Nykredit, in which the relevant interest infringed was the ability to “recoup” moneys advanced by way of loan, Lord Nicholls stated:
… the difficulties of assessment at the earlier stage do not seem to me to lead to the conclusion that at the earlier stage the lender has suffered no measurable loss and has no cause of action and that it is only when the assessment becomes more straightforward or final that loss first arises and with it the cause of action.[39]
[39] At 1631-32.
77For the reasons set out above, it is inappropriate at this interlocutory stage of the proceeding to find that no cause of action has yet accrued because no loss and damage has yet been suffered and therefore to stay the third party claim alternatively the assessment of damages. This is consistent with the observation of the High Court in Wardley that:
… we regard it is as undesirable that limitation questions of the kind under consideration[40] should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient [sic] is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.[41]
[40] Involving the question of when loss and damage had been suffered and the cause of action accrued.
[41]At 533.
Proposed amendments to the defence to the third party claim
78The proposed amendments to Stamford’s defence to the third party claim ought be allowed. Mr Sam does not oppose the proposed amendments. For the reasons set out above, whether Mr Sam has suffered loss and questions of causation are questions for trial.
Discovery
79In my view, discovery ought to be given as sought by Stamford.[42] The documents sought are relevant to whether Mr Sam has suffered loss by reason of Stamford’s alleged negligence:
(a) Whether the Guarantee and Mortgage would have had any identifiable benefit to Mr Sam as pleaded at [8(vi)] to [8(ix)] of the proposed Amended Defence to the Third Party Notice. That is, if the equity in the property was inadequate to meet the alleged secured indebtedness, whether loss will have been caused, as contended for by Stamford.
(b) If any loss suffered by Mr Sam is properly to be characterised as a contingent loss that does not crystallise until it could be said with some certainty that recoupment is impossible as contended for by Ms Hassan, the documents are relevant to the question “whether it can be said with some certainty that recoupment is impossible”. Ms Hassan relied on the affidavit of Mr Lababidi[43] deposing on information and belief, to Ms Wu’s asset pool and active business to support her contention that it cannot be said with any certainty that recoupment is impossible. No financial information was provided in support of those assertions. Ms Hassan’s reliance on the affidavit is, in my view, recognition that the defendants’ indebtedness and financial positions are relevant to whether it can be said with some certainty that recoupment is impossible.[44] At the very least, the documents sought are relevant to an evaluation or assessment of the defendants’ position.
[42] On both bases sought, that is pursuant to paragraph 7 of the orders of Judicial Register Bennett dated
25 March 2022, alternatively pursuant to r29.07 of the Rules.
[43] Second Affidavit of Ahmad Lababidi dated 11 November 2022.
[44] The documents sought go to the defendants’ indebtedness and financial position.
80Further, production of the documents would likely assist to ameliorate the situation where the court is required to estimate damages on the basis of likelihood or probability instead of by reference to established events, which would create the risk of overcompensation or under compensation, as submitted by Ms Hassan.
81Given my finding that the documents sought are relevant to the pleaded case and should be discovered, for the same reasons, I consider the documents the subject of the subpoenas are relevant.[45] Further, for the reasons set out above, I consider it is “on the cards”, or that there is a “reasonable possibility”, that the documents sought under the subpoena “will materially assist” the applicant.”[46] The subpoenas have a legitimate forensic purpose and ought not be set aside.[47]
[45] Newnham v Davis (2010) VSC 13, [7]-[9] (Kaye J).
[46] Matthews v SPI Electricity (ACN 064 651 118) & Ors [2013] VSC 415 (Forrest J) referring to
Commissioner of the Australian Federal Police v Magistrates’ Court of Victoria [2011] VSC 3 and Shaw v Yarranova Pty Ltd [2011] VSCAA 55, [26].
[47] See paragraph 18 above.
Contribution claim
82Leave should be granted to file the Notice of Contribution. I have determined that the question whether Mr Sam has suffered loss and damage (involving a consideration of the nature of the interest infringed and the identification of the damage suffered (if any)) is a question for trial.[48] In my view, the question whether, if Mr Sam has suffered loss and damage by way of Stamford’s negligence, Stamford and Ms Wu are liable in respect of the same damage under s23B of the Wrongs Act is also a question for trial.
[48] As was observed by the majority in Hunt v Hunt at [32]: “There are good reasons for a principled analysis
of actual damage.”
Conclusion and orders
83Subject to any matters raised by the parties by 4.00pm on 19 April 2023, I will make the following orders:
1. By 25 April 2023 at 4.00pm, the third party have leave to file and serve an amended defence to third party notice and notice of contribution, substantially in the form contained on pages 52-60 in exhibit “CWC-1” to the affidavit of Christien William Corns dated 7 November 2022.
2. By 2 May 2023 at 4.00pm, the defendants make discovery pursuant to paragraph 7 of the orders of Judicial Registrar Bennett dated 24 March 2022, alternatively pursuant to r29.07 of the County Court Civil Procedure Rules 2018, of the following documents which are in their possession, custody or power:
(a)statements from the Australian and New Zealand Banking Group Limited for the period 13 May 2019 to present in respect of any loan or mortgage for which the first defendant is or was liable;
(b)statements from the Westpac Banking Corporation and/Perpetual Corporate Trust Limited for the period 13 May 2019 to present in respect of any loan or mortgage for which the second defendant is or was liable;
(c)all documents evidencing the first defendant’s assets and liabilities for the period 1 May 2019 to present;
(d)financial statements and tax returns for the second defendant for the financial years ending 30 June 2019, 30 June 2020, 30 June 2021 and 30 June 2022; and
(e)all documents evidencing the financial position of the second defendant from 1 July 2022 to present including balance sheets, profit and loss statements and cash flow statements.
3. The defendants’ summons filed 9 November 2022 is dismissed.
4. The defendants pay the third party and plaintiff’s costs of the summonses filed 8 November 2022 and 9 November 2022 on the standard basis, to be taxed in default of agreement.
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Certificate
I certify that these 83 paragraphs are a true copy of the ruling of Her Honour Judge Brimer delivered on 18 April 2023.
Dated: 18 April 2023
Taylah Stretton
Associate to Her Honour Judge Brimer
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