Shannon v Australian and New Zealand Banking Group Ltd (No 3)

[1994] QCA 228

IN THE COURT OF APPEAL	[1994] QCA 228
SUPREME COURT OF QUEENSLAND

Appeal No. 228 of 1993

Before Fitzgerald P. McPherson JA. Shepherdson J.

[Shannon v. ANZ]

BETWEEN:

GARRY SHANNON and WENDY IRENE SHANNON

Appellant

AND:

AUSTRALIAN AND NEW ZEALAND BANKING GROUP

LIMITED

First Respondent

AND:

PHILLIP RICHARD WINSTONE

Second Respondent

AND:

IVAN DEBELAK

Third Respondent

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 24/06/94

This is an appeal from orders made in the Trial Division on 21 October 1993 that this action, Supreme Court action No.1090 of 1993, be entered on the list of commercial causes and tried without a jury. The appellants are the plaintiffs in the action and the respondents are the defendants, on whose application the orders under appeal were made.

The appellants' primary submission is that their action is not a commercial cause and that there was therefore no power to enter it on the list of commercial causes. The respondents dispute both these propositions and argue that, in any event, there is no appeal from an order entering an action on the list of commercial causes.
The relationships between the parties emerge from the introductory paragraphs of the appellants' Statement of Claim. Paragraphs 1-8 allege as follows:

"1. At all material times Club Superstores Australia Pty. Ltd. (in liquidation) ("Club"), formerly W.G. Shannon Land Corporation Pty. Ltd. and prior to that Stewarts Warehouses Holdings Pty. Ltd. was an incorporated company.

2. At all material times the first and secondnamed

plaintiffs were:-

(a) directors of Club;

(b)  controlled the holders of all of Club's issued capital;

(c) controlled Club;

(d)  each acted in the matters alleged for himself or herself, and on behalf of the other.

3.    The first defendant at all material times was:-

(a)	a corporation incorporated within the limits of Australia;
(b)	a financial corporation as defined in s.4(1) of the Trade Practices Act (Cth) 1974;
(c)	a trading corporation as defined in s.4(1) of the Trade Practices Act (Cth) 1974.

4.    The second defendant at all material times:

(a)	was an employee of the first defendant acting within the scope of his authority;
(b)	a servant or agent of the first defendant within the meaning of s..84(2) of the Trade Practices Act (Cth.) 1974;
(c)	the manager of Business Banking in Queensland for the first defendant and the first defendant's most senior officer in Queensland responsible for commercial banking accounts.

5.    The third defendant at all material times was:-

(a)	an employee of the first defendant acting within the scope of his authority;
(b)	a servant or agent of the first defendant within the meaning of s.84(2) of the Trade Practices Act;
(c)	the most senior employee of the first defendant with direct responsibility for accounts held by the plaintiffs in either their own name or by companies with which they were associated.

6.   The firstnamed plaintiff has:-

(a)	been a customer of the first defendant since 1970, during which time accounts have been held by companies which he controlled;
(b)	during the period 1970 to the present conducted his and his companies' major banking transactions with the first defendant;
(c)	during the period 1970 to the present, and in particular during the period 1987 to 1992 received advice f rom officers of the first defendant in relation to investments that the firstnamed plaintiff and entities in which was interested should or should not engage in, including investments that required the borrowing of money by the firstnamed plaintiff or entities in which he was interested from the first defendant.
(d)	relied on the investment advice given by officers of the first defendant.

7.   The secondnamed plaintiff:-

(a)	first became a customer of the first defendant in or about 1975;
(b)	after her marriage to the firstnamed plaintiff in 1981 combined her business affairs with the firstnamed plaintiff's and thereafter used the first defendant for all banking transactions.

8.

The following companies controlled by the
plaintiffs were at all material times customers of
the first defendant:-
(a) Club;
(b) Stewart Shannon Pty. Ltd.;

(c) W.G. Shannon Nominees Pty. Ltd. (formerly Errol Stewarts N.Q. Pty. Ltd.);

(d) Shannon Holdings Pty. Ltd.;
(e) Stewart Piesse Pty. Ltd.;
(f) Stewarts Kedron Pty. Ltd.;
(g) Stewarts Southport Pty. Ltd.;
(h) Mr. Stork Baby Goods Pty. Ltd."

For present purposes, it is unnecessary to set out more of the Statement of Claim, which is a lengthy pleading containing 128 paragraphs and almost 40 pages of particulars, than the prayer for relief, which is as follows:

"AND THE PLAINTIFFS' CLAIM IS:-
1. Against the first defendant damages for breach of
contract between the plaintiffs as customers and the
first defendant as banker, including an indemnity
against the plaintiffs' liabilities, if any, in respect
of or in consequence of any indebtedness of the company
Club Superstores Australia Pty. Ltd. (in liquidation)
and in particular in relation to certain guarantees
alleged to have been given by the plaintiffs to the

following:

(a) CBFC Leasing Pty. Limited ACN 008 520 965;

(b)  Esanda Finance Corporation Limited ACN 004 347 043;

(c)  Fisher and Paykel Australia Pty. Limited ACN 000 042 080;

(d)  IBM Australia Leasing Pty. Limited ACN 008 582 205;

(e) Vulcan Australia Limited ACN 004 253 605;
(f) NEC Australia Limited ACN 004 803 490;

(g)  Philips Industries Holdings Limited ACN 008 445 743;

(h)  Robert Bosch (Australia) Pty. Ltd. ACN 004 315 528;

(i) Sanyo Australia Pty. Ltd. ACN 004 981 873.

2. Against all defendants damages, including damages

as aforesaid, for negligent mis-statement and advice.

3. Against all defendants damages, including damages

as aforesaid, for deceit.

4. Against the first defendant compensation for

breach of fiduciary duty.

5. Against the first defendant equitable damages for
breach of fiduciary duty.

6. Against all defendants damages, including damages as aforesaid, for contravention of the Trade Practices Act (Cth) 1974 and/or the Fair Trading Act (Qld) 1989.

7. Interest.
8. Costs."

It should also be noted that, by their Statement of Claim, the appellants required trial by jury.

The definition of "Commercial causes" in section 2 of the Commercial Causes Act 1910 as amended is as follows:

"2. Interpretation. In this Act, unless the context otherwise indicates, the following terms have the meanings respectively assigned to them, that is to say,-

`Commercial causes' include causes arising out of the ordinary transactions of merchants and traders; amongst others those relating to the construction of mercantile documents, export or import of merchandise, carriage of goods, sale of goods, building contracts, engineering contracts, insurance, banking, money lending, mercantile agency and mercantile usages; "

The appellants argued that only "ordinary transactions of merchants and traders" are "Commercial causes", and that causes "relating to", for example, "banking" are not "Commercial causes" unless "arising out of the ordinary transactions of merchants and traders". Reliance was placed upon Sea Insurance Company Ltd. v. Carr (1901) 1 QB 7, 10 and O'Donnell (FTS) and Co. Ltd. v. Celebrity Circuit Ltd. (1958) 74 WN (NSW) 490, 491.

It is unnecessary to consider these cases in detail. Neither supports the appellants' argument in what was actually decided, and the former provides no assistance concerning the interpretation of the Act. The statements most favourable to the appellants are those of Kinsella J. in the latter case. His Honour said that the transaction sued on must have a "commercial context" and that a "mere business context" is not sufficient. Earlier, he said that "the words 'arising out of the ordinary transactions of merchants and traders' are very important in [the] construction [of the definition of `Commercial causes'], for they are intended to give a broad indication of the nature of the actions which may properly be regarded as commercial causes. The remainder of the section is designed, not to define, but to illustrate the types of matters which normally arise out of the commercial transactions as contemplated by the Act."

On one reading, what was said by Kinsella J. may indicate that unless a cause arises out of the "ordinary transaction of merchants and traders" it cannot be a commercial cause. More recent NSW cases concern themselves with whether the issues in a proceeding arise out of an "ordinary commercial transaction": see, e.g., Malleys Ltd. v. Horton Investments Ltd. (1961) 78 WN (NSW) 1128, 1132; Scotts Provisions (Catering) Pty. Ltd. v. Ku-ring-gai Chase Trust (1961) 79 WN (NSW) 593, 596; NRMA Insurance Ltd. v. Flanagan (1982) 1 NSWLR 585, 591-2. However, whatever may now be the position in NSW, where the concept of a commercial cause has been narrowed by legislative amendment, if what Kinsella J. said in the passage quoted was intended to bear the meaning sought to be attributed to it by the appellants it does not represent the position in Queensland, where the concept of a commercial cause was considerably broadened by legislation passed in 1972.

The statutory definition of "Commercial causes" is inclusive not exhaustive: Railway Commissioners of NSW v. G. & G. Hoskins Ltd. (1918) SR (NSW) 424, 432; Farmer & Co. Ltd. v. Moss (1952) 69 WN (NSW)324, 325. The "ordinary transactions of merchants and traders" are expressly included, without any indication that there may not be other "Commercial causes". In any event, the definition of "Commercial causes" has its own partial dictionary; specified causes are "ordinary transactions of merchants and traders" for material purposes, or at least those causes specified, whether or not "ordinary transactions of merchants and traders", are "Commercial causes" as defined; "amongst others", causes "relating to ... banking [and] moneylending ..." fit that description for the purposes of the statute.

The appellants' action, which arose out of lending transactions for business purposes between the respondent bank and its customers, the appellants and their companies, is plainly within both the letter and the intent of the statutory definition of "Commercial causes."
This conclusion makes it unnecessary to consider the respondents' contentions that (i) under subsection 4(1) of the Commercial Causes Act any Supreme Court action, whether or not a commercial cause, can be entered on the list of commercial causes and (ii) even if the primary judge had erroneously concluded that the appellants' action is a commercial cause, subsection 4(2) of the Commercial Causes Act excludes any right of appeal.
The appellants' next submission was that, although subsection 4(2) of the Commercial Causes Act excludes an appeal from the exercise of a discretion to enter a commercial cause on the list of commercial causes, the judge below "did not exercise a discretion, but treated his conclusion that the action was a commercial cause as requiring that it be entered on the list."

Even if the latter assertion were correct, the language of subsection 4(2)leaves no doubt but that there is no appeal on the basis of such an error. If the appellants are correct, a judge who is asked to enter an action on the list of commercial causes must first decide whether the action is a commercial cause and, if it is, must exercise a discretion as to whether it should be entered on the list. Assuming that to be so, there is no reason to read down the embargo on appeal in section 4(2) of the Act to exclude the first of these issues and to restrict it to the second issue. If, as counsel for the appellants submitted, clear language is needed to take away the right of appeal conferred by section 10 of the Judicature Act 1876, which was described as a substantive and not merely procedural right, then the Act uses language which could not be clearer. It says that "there shall be no appeal" from an order that an action be entered on the list of commercial causes. On any ordinary reading of these words, they exclude appeal on any matter which was decided as the basis for such an order and are not subject to any implied limitation confining them to some, or one, point only.

The appellants' other complaints related to the order that the action be tried without a jury.

It was argued that there is "no jurisdiction to dispense with a jury if the matter is not a commercial cause even though it may have been placed on the commercial causes list." This point does not arise, since it has been decided that the appellants' action is a commercial cause.

The other matters raised by the appellants concerned the exercise of the primary Judge's discretion to order a trial without a jury. It was submitted that the primary Judge erred in concluding that there was a likelihood of matters of financial complexity being involved in the trial, and it was said that evidence to that effect should have been excluded as inadmissible, that there was insufficient evidence of financial complexity or alternatively that his Honour placed too much weight on the likelihood of complexity. Further, reference was made to the suitability of the issues in the action to trial by jury, particularly disputes as to oral communications, and it was submitted that no sufficient cause had been shown to deprive the appellants of a trial by jury. It was also said that legal questions, which will be determined by the Judge at the trial, are not so inextricably bound up with the questions of fact as to prevent clear issues of fact being put to the jury, and the likely length of a trial is irrelevant to the question as to whether or not there should be a jury trial. Mention was also made of the motive of the respondents in seeking to have the action entered on the list of commercial causes, which was not to gain expedition or savings but to circumvent the appellants' request for a jury in their Statement of Claim.

Logically, the last point raises a possible objection to the entry of an action on the list of commercial causes rather than a direction dispensing with a jury, but nonetheless should be referred to briefly.

The appellants relied upon a dicta in NRMA Insurance Ltd. v. Flanagan. At p.594E, Hunt J. said:

"... the plaintiff conceded (correctly in my view) that it would not be a correct exercise of my discretion to enter proceedings in the commercial list simply to avoid a hearing with a jury: see Smith v. Saab-Scania (Aust) Pty. Ltd. (Hunt J., 3rd September 1979, unreported). Whether or not the hearing of an action for defamation in the Commercial List should be with or without a jury must in my view be determined largely in accordance with s.89 of the Supreme Court Act, 1970 (NSW)]. If a party does not succeed in avoiding a hearing with a jury because prolonged examination of documents or scientific or local investigation is required which cannot conveniently be made with a jury, then I would not be prepared to enter the proceedings in the Commercial List in order to enable that party to achieve a hearing in that list without a jury which it could not achieve in the general list."

Section 89 of the Supreme Court Act, 1970 (NSW) seems to be broadly equivalent to R.S.C.O. 39r.7.

His Honour's observations are to be read in the context of the case before him, a defamation case. He was apparently of the view that such a case would ordinarily be suitable for trial by jury and, that being so, should not be placed on the commercial list simply to avoid a trial by jury. Insofar as there is involved in his Honour's reasoning an opinion that an action is suitable for trial by jury unless "prolonged examination of documents or scientific or local investigation is required", then his statements should be taken as restricted to defamation actions. There are many reasons why an action which is within the definition of "Commercial causes" may be unsuitable for trial by a jury (see e.g. General Credits Ltd. v. Castelwellan Pty. Ltd. (1984) 1 Qd. R. 562), and it is perfectly proper for a party to such an action to seek to have it listed as a commercial cause to avoid trial by jury when that would be unsuitable.

It is unnecessary to deal in detail with the other matters raised by the appellants. None is of particular substance. The primary Judge's experience and common sense would have amply demonstrated to him, without any evidence to that effect, that this action was likely to be long and complex and that, while there would be issues of credibility, the interwoven factual and legal issues would have made the management of the trial and the ascertainment of the jury's verdict difficult and prone to error. It was well within his discretion to conclude that a trial by judge alone, without a jury, would be more "expedient for the speedy and inexpensive determination of the questions in the action really at issue between the parties.": Commercial Causes Act subsection 4(4).

None of the appellants' grounds is established, and the appeal should be dismissed with costs to be taxed.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 228 of 1993

Brisbane
[Shannon v. ANZ]

BETWEEN:

GARRY SHANNON and WENDY IRENE SHANNON

Appellant

AND:

AUSTRALIAN AND NEW ZEALAND BANKING GROUP

LIMITED

First Respondent

AND:

PHILLIP RICHARD WINSTONE

Second Respondent

AND:

IVAN DEBELAK

Third Respondent

Fitzgerald P. McPherson JA. Shepherdson J.

Judgment delivered 24/06/94

Judgment of the Court

APPEAL DISMISSED WITH COSTS TO BE TAXED.

CATCHWORDS: PRACTICE AND PROCEDURE - commercial cause - "ordinary transactions of merchants and traders" - appellants disputed listing of a matter on the list of commercial causes - appellants contended that the transaction concerned merely related to banking and did not arise out of an ordinary transaction - agreement with a bank for certain guarantees - whether such lending agreements come within the statutory definition of commercial causes - s 2 Commercial Causes Act 1910

Counsel:	Mr. L. Harrison Q.C., with him Mr. P. Dunning for the appellant Mr. P. Keane Q.C., with him Mr. T.D. North for the respondent
Solicitors:	Tobin and Co. for the appellant Minter Ellison Morris Fletcher for the respondent

Hearing Date: 26/05/94