Shire of Katanning v Bride [No 4] - [2014] WASC 343

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: SHIRE OF KATANNING -v- BRIDE [No 4] [2014] WASC 343

CORAM: CHANEY J

HEARD: 4 JUNE 2014

DELIVERED : 26 SEPTEMBER 2014

FILE NO/S: CIV 2994 of 2009

BETWEEN: SHIRE OF KATANNING
Plaintiff
AND
EDWARD JAMES BRIDE
Defendant

Catchwords:

Practice and procedure - Counterclaim - Plaintiff's claim completed by judgment - Whether counterclaim should be struck out - Failure to disclose cause of action - Counterclaim embarrassing - Whether leave to amend defence and counterclaim should be granted - Joinder of parties to counterclaim - Turns on own facts

Legislation:

Local Government Act 1995 (WA)
Magistrates Court Act 2004 (WA)
Vexatious Proceedings Restriction Act 2002 (WA)

Result:

Defendant's application to amend defence and counterclaim dismissed
Defendant's application to join third parties dismissed
Defendant's counterclaim dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr P L Wittkuhn
Defendant: In person

Solicitors:

Plaintiff: McLeods Barristers & Solicitors
Defendant: In person

Cases referred to in judgment:

Bride v Shire of Katanning [2007] WADC 116
Bride v Shire of Katanning [2008] WASC 131

CHANEY J: These proceedings have their origins in a dispute between the Shire of Katanning (Shire), the plaintiff, and the defendant, Mr Edward James Bride, going back more than 20 years. Before me for determination are two applications. One is brought by the Shire, seeking orders striking out Mr Bride's counterclaim and dismissing that counterclaim, or alternatively summary judgment in favour of the Shire on the counterclaim. The other application is brought by Mr Bride and seeks leave to amend his defence and counterclaim in terms of a minute dated 19 May 2014, and leave to join the Commonwealth Bank of Australia (Commonwealth Bank) and Herbert Smith Freehills (Freehills) as third parties in the action.
Before dealing with those applications, it is necessary to set out the background to the litigation thus far.

History of the litigation

The Shire's claim in these proceedings, which has now been finally resolved following trial and appeal, concerned rates in respect of Lot 29 Creek Street Katanning (Lot 29) for the period between 1984 and 2004.
Proceedings were originally commenced by the Shire in 1994 in the Local Court (the predecessor to the Magistrates Court up until the Magistrates Court Act 2004 (WA) came into operation in May 2005) in Katanning against Mr Bride and Mrs Bride for unpaid rates in relation to Lot 29. Those proceedings were subsequently discontinued by the Shire, although a counterclaim by Mr Bride was pursued until it was struck out in the Local Court in December 1995.
In September 1996, an appeal by Mr and Mrs Bride against the striking out of their counterclaim was dismissed by the District Court.
In November 2004, the Shire commenced Local Court action 19525/2004, against Mr Bride for unpaid rates in relation to Lot 29. In November 2005, Mr Bride's defence in those proceedings was struck out, and on 8 December 2005, judgment was entered for the Shire for an amount of $12,858.28.
Mr Bride appealed against that judgment, and on 6 July 2007, O'Brien DCJ in the District Court dismissed that appeal.[1] Her Honour identified the essential issue for determination in the appeal as being whether it had been decided in previous proceedings that Australian Bank Ltd (of which the Commonwealth Bank is now the successor in law) was a mortgagee in possession at the time that the liability for rates arose. That question was relevant to who was the 'owner' of the land for the purposes of the Local Government Act 1995 (WA) (LG Act) rating provisions, the owner being the person liable for rates. Her Honour concluded that that question had been previously decided in earlier litigation, and that it was not open to Mr Bride to re‑litigate that issue.
[1] Bride v Shire of Katanning [2007] WADC 116.
Mr Bride then sought leave to appeal against O'Brien DCJ's decision, and on 4 July 2008, Martin CJ granted leave to appeal.[2] Following that grant of leave, consent orders were made allowing the appeal, setting aside O'Brien DCJ's orders in favour of the Shire, setting aside the Magistrate's decision the subject of the appeal, and remitting the matter back to the Magistrates Court for hearing.
[2] Bride v Shire of Katanning [2008] WASC 131.
On 23 December 2008, Mr Bride filed a defence and counterclaim in the Magistrates Court. The counterclaim claimed special damages to be assessed at a later date, general damages of $2,400,000, and aggravated and exemplary damages to be assessed by the Court.
On 9 January 2009, the Shire lodged a notice of objection to jurisdiction in the Magistrates Court to try the counterclaim. On or about 15 June 2009, the Shire's solicitors applied to the Magistrates Court to strike out Mr Bride's counterclaim. However, on 26 June 2009, Mr Bride applied to the Supreme Court (in action CIV 2170/2009) for an order transferring the action from the Magistrates Court to the Supreme Court. That application was successful, and on 23 July 2009, the Master ordered that the Magistrates Court matter 19525/2004 be transferred from the Magistrates Court to the Supreme Court for hearing. Mr Bride was also given leave to file and serve a minute of amended counterclaim within 21 days.
On 14 August 2009, Mr Bride filed a document in CIV 2170/2009 entitled 'The Defendant's Counterclaim Pursuant to the Orders of Master Sanderson Made 25 July 2009'.
On 3 September 2009, Mr Bride was given further leave to file and serve a minute of proposed amended counterclaim by 24 September 2009. A minute was filed on 30 September 2009 pursuant to that order. In November 2009, CIV 2170/2009 was entered into Martin CJ's commercial and managed cases list and was listed for directions on 2 December 2009. At that directions hearing, Martin CJ determined that the Shire's claim for rates should be programmed to trial and that the parties should exchange minutes of proposed directions to that end. Those orders were made following an exchange between Martin CJ and Mr Bride in which it was acknowledged by Mr Bride that, should the Shire succeed in its claim for the rates, his counterclaim would fall away. Martin CJ said:
Then it just seems to me that the most sensible thing is to try the claim for the rates and leave the counterclaim over, because if the Shire succeeds then the counterclaim is history. If the Shire does not succeed, then we can worry about the counterclaim.
Following Martin CJ's directions, the parties exchanged minutes of proposed orders, which ultimately led to directions to bring the claim to trial, and a specific order that determination of the defendant's counterclaim be deferred until determination of the Shire's claim against the defendant.
In the course of the exchange leading to those directions, it was observed that there had been some confusion in references to the correct matter number. The matter was clarified by an email from Martin CJ's associate to the parties on 28 December 2009 which explained that matter CIV 2170/2009 was the application for transfer which by then were completed proceedings. The Court had allocated file number CIV 2994/2009 to the transferred matter, being the Local Court proceedings 19525/2004, and thus all documents subsequent to the Master's orders transferring the matter were to be taken as having been filed in CIV 2994/2009.
On 18 November 2010, the Shire commenced action CIV 2853/2010, also claiming the outstanding rates on Lot 29. Presumably, that action was commenced in order to enable the Shire to include in its claim rates which had been imposed after the commencement of the Magistrates Court claim. The amount claimed in CIV 2853/2010 was $20,513.67.
On 25 November 2010, Mr Bride filed a defence and counterclaim in CIV 2853/2010. The defence and counterclaim asserted that the proceedings were an abuse of process, and sought exemplary and special damages of $50,000 and the payment of certain costs.
In 25 November 2010, Mr Bride brought an application in CIV 2853/2010 for summary judgment on his counterclaim, and on 6 December 2010, the Shire issued a chambers summons seeking to strike out the defence in CIV 2853/2010.
On 18 January 2011, Mr Bride filed an amended defence and counterclaim. That document more closely reflected the defence and counterclaim contained in the various minutes of defence and counterclaim filed by Mr Bride in this action (CIV 2994/2009).
The competing summonses in CIV 2853/2010 came before Martin CJ on 2 February 2011. He dismissed both parties' applications for summary judgment but struck out three paragraphs of the amended counterclaim filed on 18 January 2011 without leave to re‑plead, but without prejudice to Mr Bride's ability to maintain the same issues in his defence to the claim of CIV 2994/2009.
The Shire's claims in this matter and in CIV 2853/2010 proceeded to trial together before Allanson J on 1 ‑ 3 June 2011. His Honour delivered his reasons for decision on 20 September 2011.[3] Allanson J found that Mr Bride was liable for the rates claimed, and gave judgment in the sum of $21,381.56 plus interest and costs. Because the claim in CIV 2994/2009 was effectively incorporated in the claim for the total outstanding rates in CIV 2853/2010, the judgment for the money sum was pronounced in CIV 2853/2010, although judgment was also entered for the plaintiff in CIV 2994/2009.
[3] Shire of Katanning v Bride [No 2] [2011] WASC 248.
The critical issue in the proceedings before Allanson J was the question of who was the owner of the land for the purposes of the rating provisions of the LG Act, which involved a question of the proper construction of the definition of 'owner' in s 1.4 of the LG Act. After noting Martin CJ's description of that definition as 'almost unfathomable',[4] his Honour considered the construction of the definition and then the relevant facts. He considered it convenient to consider the facts by reference to three periods. The first was from about August 1984, when the Australian Bank began proceedings following default on its mortgage over Lot 29 and appointed receiver managers of the business and properties of Mr and Mrs Bride, until February 1987. The second period was from February 1987, when the Australian Bank appointed Mr Charles Fear and Mr David Young as its agents to collect amounts owing to it in Western Australia, up until about October 2005. The third period was from October 2005 up until the time of trial.
[4] The Shire of Katanning v Bride [2011] WASC 89 [5].
As of the third period, Allanson J concluded that Mr Bride had been in possession of the land and was entitled to possession and was the owner for relevant purposes. For the periods between about 1985 to 2005, Allanson J concluded that neither the Commonwealth Bank nor the Australian Bank had entered into possession, and that Mr Bride had abandoned possession, so that there was no person in actual possession of the land during that period. He concluded, however, that Mr Bride was liable for rates as the owner pursuant to that part of the definition which provided that, where no person is in actual possession of the land, the person entitled to possession is the owner of the land. Mr Bride's entitlement to possession arose from his being the registered proprietor of an estate in fee simple of Lot 29.
Mr Bride then appealed against that decision. The Court of Appeal differed from Allanson J, finding that, on the facts, the Australian Bank's actions, through Mr Fear, did amount to it being in possession of Lot 29 as mortgagee from, at the latest, September 1989. The Court also concluded that, by 2005 at the latest, the Australian Bank was no longer in possession for the purposes of the LG Act, and that Mr Bride 'from at least 2005' had re‑entered into possession. In light of that finding, Mr Bride remained liable for the unpaid rates and service charges, having become the owner of the land, in the relevant sense, from at least 2005 onwards. The appeal was, therefore, dismissed.[5]
[5] Bride v The Shire of Katanning [2013] WASCA 154.
It is against that background that the present application is now before me for determination.

The current pleading

There is some uncertainty as to precisely which pleading of the counterclaim currently stands as the pleading. That is because directions made by the Court in relation to amendments to the counterclaim had been couched in terms of leave to file a minute, rather than a document to stand as the pleading. The substance of the various documents that have been filed, up until the most recent amended defence and counterclaim filed on 20 May 2014 (20 May minute), which is the subject of Mr Bride's application before me, were substantially similar. In particular, the documents filed on 14 August 2009 and 30 September 2009 have no substantial differences. The case which Mr Bride now seeks to pursue is that set out in the 20 May minute being the document in respect of which Mr Bride seeks leave to amend and which pleads cases against the Commonwealth Bank and Freehills, each of which Mr Bride seeks to join as a 'third party', although presumably what he intends is that they be joined as defendants to his counterclaim. It is appropriate, therefore, to deal with Mr Bride's application first. The Shire's application for summary judgment, or to strike out the counterclaim, can then be dealt with in the light of the relevant pleading.

Leave to amend defence

Mr Bride seeks to amend his defence. The Shire's action for rates (to which the defence relates) has been finally determined. There is no basis to reopen that claim on the basis of an amended defence. The application to amend the defence is misconceived and must be dismissed.

Leave to amend the counterclaim

The 20 May minute focuses heavily on the proposed claims against Freehills and the Commonwealth Bank. The first seven paragraphs identify the parties and proposed parties, Mr and Mrs Bride's ownership of Lot 29 and the mortgage to Australian Bank. Paragraphs 10 to 27 then set out pleadings as to the appointment of the receivers; Mr and Mrs Bride's bankruptcy; various dealings between the Brides, the bank, the receivers, Freehills and the Brides' trustees in bankruptcy during 1987; some actions (said to be fraudulent) by a trustee in bankruptcy appointed to the Brides' estate in 2003; and matters surrounding production of a 'notice of appointment' of Mr Young and Mr Fear as agents of the bank in 1998.
The pleading is then divided into claims against the Shire, the Commonwealth Bank and Freehills, respectively. The claim against the Shire is essentially that, through its solicitors, it misled Courts at different times as to whether the bank was in possession of the land and thereby falsely pursued Mr Bride for rates, and obstructed or perverted the course of justice by failing to deliver the 'deed of appointment' of the receivers for production in various Courts. This is said to give rise to a claim for general damages of $2,400,000. The pleading recites the findings of the Court of Appeal to the effect that the bank had in fact been in possession of Lot 29 from 1989 up until some point no later than 2005.
The pleading then proceeds with the proposed claim against the Commonwealth Bank. It pleads that the Commonwealth Bank, as mortgagee in possession of Lot 29, was legally liable to pay the Shire rates, but that it 'falsely and fraudulently with intent to mislead the Shire and the Courts falsely and fraudulently pretended that they were never mortgagee in possession of Lot 29'. A number of references are then made to communications and documents filed in the 1994 Magistrates Court proceedings as particulars. The various assertions by the Commonwealth Bank that it was not in possession, and had not been in possession, of Lot 29 are said to have led to loss and damage on Mr Bride's part.
The claim against Freehills is to the effect that two lawyers within that firm acting for the bank asserted, in documents filed in the Magistrates Court action in 1994, that the Commonwealth Bank had not been in possession of the land. Again, reliance is placed on the conclusion by the Court of Appeal that the Commonwealth Bank had in fact been in possession by, at the latest, 1989. Unquantified damages are claimed against the solicitors.

The claim against the Shire

Paragraphs 3 to 27 of 20 May minute do not appear to relate to any claim against the Shire. The pleading against the Shire commences at paragraph 28. It is pleaded that, from about 19 December 1994, the Shire was in possession of information demonstrating that the proposition that the Commonwealth Bank was not acting as mortgagee in possession of Lot 29 was untenable.[6] It is then said that 'the Shire, their solicitors, McLeods, the bank and their solicitors, Freehills, have with intent to cause the plaintiff to suffer loss and damage conspired and by knowingly, dishonestly and fraudulently pretending that the bank were not mortgagees in possession of Lot 29 from 1987 up to October 2005'. Reference is made to the findings of the Court of Appeal.
[6] 20 May minute [28] ‑ [29].
It should be noted at this point that the Court of Appeal did not find that the Australian Bank or Commonwealth Bank was in possession of Lot 29 at all times up until October 2005. What the Court found was that, by 2005 at the latest, the Australian Bank was no longer in possession of Lot 29 for the purposes of the LG Act.[7]
[7] Bride v Shire of Katanning [2013] WASCA 154 [139] (Edelman J) and [23] (Murphy JA).
Edelman J considered that that conclusion was amply demonstrated by the trial Judge's findings of fact being:
1.that there was no evidence of any activity by the Australian Bank in relation to the land after 1989;
2.that in the 1994 proceedings between the Shire and Mr Bride, the Commonwealth Bank and Australian Bank had both denied that they had taken possession; and
3.that in the years since 1994, the Australian Bank and the Commonwealth Bank had maintained the position that they were not and had not been in possession.
It was not necessary for the Court of Appeal to determine precisely when the Australian Bank or Commonwealth Bank ceased to be in possession because Mr Bride was liable for rates because he was certainly the owner by 2005, so that he became liable for unpaid rates as at that date, regardless of who had been the owner of Lot 29 up until that date.
Mr Bride's contentions in his 20 May minute seem to rest heavily on the proposition that the Court of Appeal found the Australian Bank or Commonwealth Bank to have been in possession up until October 2005, so that any contention by the Shire prior to that time that Mr Bride was the owner for the purposes of the LG Act was 'untenable'. That proposition does not follow from the Court of Appeal's decision.
Paragraph 32 of the 20 May minute pleads what is said to be 'perjury' by reason of the solicitor for the banks having possession of a document but refusing to produce the document on the basis of privilege. That plea is misconceived and in any event does not relate to any claim against the Shire. Paragraph 33 pleads that the advice given to an officer of the Shire as to possession of Lot 29 was false. Paragraph 34 complains that the Shire and the banks through their solicitors conspired to dismiss the plaintiff's application in a District Court appeal from the Katanning Local Court Magistrate's decision in relation to witnesses' subpoenas. Paragraph 35 is to the same effect. Paragraphs 36 through to 41 plead that a failure to produce the notice of appointment of Mr Fear and Mr Young as agents of the Australian Bank led to various Courts being misled. Paragraph 43 complains of a trespass by an officer of the Shire on 26 September 2007 in relation to Lot 29 to recover the unpaid rates. Paragraphs 44 to 47 plead facts related to attempts to recover the unpaid rates.

The proposed claim against the Shire appears to involve, broadly, a single proposition. That is that the Shire pursued Mr Bride for unpaid rates in the period between December 1994 and October 2005 when it knew, or should have known, that the Australian Bank, or its successor (the Commonwealth Bank), was in possession of the land and was liable for rates on it. Precisely what cause of action is said to arise from that allegation is unclear. Presumably Mr Bride is intending to assert an abuse of process which has cause him loss.
Mr Bride expressly accepted in both paragraph 28 of the 20 May minute, and in his oral submissions, that up until 19 December 1994, there was a basis for the Shire to believe that the bank was not acting as mortgagee in possession. Implicit in that concession is that Mr Bride accepts that the Shire had a reasonable basis for commencing proceedings against him for unpaid rates in 1994. The Shire discontinued that action on 26 September 1994 following Mr Bride's attempts to join the Commonwealth Bank as a third party and the institution of his counterclaim against the Shire. Although the counterclaim instituted by Mr Bride in the Local Court action then continued, that was not a consequence of the Shire pursuing Mr Bride for rates.
The next action involving the Shire appears to be Mr and Mrs Bride's action against the Shire, the Commonwealth Bank and Marwick Mitchell KPMG which was instituted some time in 2002. In relation to the Shire, Mr and Mrs Bride's claim was that it had been negligent in allowing the Commonwealth Bank not to pay the Shire rates and not to maintain the property.[8] The statement of claim in that action was struck out by Registrar Kingsley in April 2003.[9] It was struck out on the basis that the case as pleaded turned upon the proposition that the Commonwealth Bank, as successor to the Australia Bank, was mortgagee in possession, a proposition which had been rejected in previous proceedings in the Supreme Court. Those proceedings had not involved the Shire, but were the subject of a decision by Parker J in Bride v Australian Bank Ltd.[10] Registrar Kingsley struck out the pleading on the basis that it was embarrassing and likely to delay a fair trial. His decision to refuse leave to re‑plead was, however, based upon the central reliance of the claim on the proposition that the bank was a mortgagee in possession.[11] That action was struck out in the application of the second and the third defendants, and not on the application of the Shire.[12]
[8] Edward James Bride and Wendy Margaret Bride As Trustees for the Pinwernying Family Trust v the Shire of Katanning [2003] WADC 92 [3].
[9] Edward James Bride and Wendy Margaret Bride As Trustees for the Pinwernying Family Trust v the Shire of Katanning [2003] WADC 92.
[10] Bride v Australian Bank Ltd [2000] WASC 116.
[11] Edward James Bride and Wendy Margaret Bride As Trustees for the Pinwernying Family Trust v the Shire of Katanning [2003] WADC 92 [11].
[12] Edward James Bride and Wendy Margaret Bride As Trustees for the Pinwernying Family Trust v the Shire of Katanning [2003] WADC 92 [1].
It can thus be seen that, up until the Shire commenced Local Court action 19525/2004 in November 2004, the only litigation involving Mr and Mrs Bride and the Shire was the action in the District Court commenced by Mr and Mrs Bride.
No facts are pleaded in the 20 May minute which amount to the pursuit of Mr Bride by the Shire for unpaid rates up until November 2004. The action commenced by the Shire in November 2004 was ultimately successful. It cannot be said that that action was commenced without a proper foundation or was in any way an abuse of process. No arguable cause of action is disclosed against the Shire. Furthermore, the pleading against the Shire in the 20 May minute involves numerous allegations against various persons and organisations much of which does not appear material to any claim against the Shire. It is very difficult to follow and is embarrassing in the sense that it does not clearly identify the case the Shire is required to meet. Mr Bride's application for leave to amend the defence and counterclaim in terms of the 20 May minute should be refused.
That conclusion requires consideration of whether or not the existing counterclaim should be struck out, as sought by the Shire. For the purpose of considering that matter, I will take the minute of the proposed counterclaim filed on 30 September 2009 as the current pleaded counterclaim. As I have already mentioned, it is substantially the same as the earlier document filed on 14 August 2009. In essence, the counterclaim pleads 'that the Shire pursued Mr Bride when he was never indebted to the Shire in the sum claimed against him or at all'.
Mr Bride accepts that he took possession of Lot 29 in 2005. His only basis of complaint could be that Local Court action 19525/2004 was commenced in November 2004, before he retook actual possession, and that prior to his taking possession, the Shire had no reasonable basis to commence proceedings against him. That argument is untenable in light of the history of the matter. Edelman J's conclusion that the Commonwealth Bank was no longer in possession by 2005 was at least in part based upon the position asserted by the bank since 1994, and the fact that there was no evidence of any activity by the bank after 1989. A number of decisions had been made in various courts in the years leading up to 2004 to the effect that the bank was not in possession of Lot 29. The Shire cannot be said to have had no basis to assert that Mr Bride, who remained at all times the registered proprietor of Lot 29, was not liable for rates in 2004.
The claim is unsustainable given the judgment entered against Mr Bride on the claim for rates, and the Court of Appeal's dismissal of the appeal against that judgment. It was precisely because the maintenance of the counterclaim was dependent upon a successful defence to the claim for rates that Martin CJ deferred consideration of the counterclaim until after trial of the primary claim. The counterclaim should, therefore, be dismissed.

Joinder of other parties

The dismissal of the counterclaim brings these proceedings to an end. It would be wholly inappropriate to join other parties to a counterclaim when the proceedings as between the Shire and Mr Bride have been concluded. Even if that were not the case, I would not have given leave to join additional parties to the action on the basis of 20 May minute because of the confused way in which the pleading is presented. Furthermore, there may well be limitation questions which would need to be considered, if the claims were to be allowed, given that the conduct on the part of the solicitors mostly is said to have occurred some 20 years ago, and the conduct by the banks is said to have occurred from the late 1980s through to around 2002. There is a further difficulty which confronts Mr Bride in relation to bringing claims against the Commonwealth Bank and its legal advisers, being that an order was made and published in the Government Gazette on 18 January 2005 under the Vexatious Proceedings Restriction Act 2002 (WA). That order prohibits Mr and Mrs Bride either personally or in their capacity as trustees of the Pinwernying Family Trust from instituting any proceedings against the Commonwealth Bank, the Australian Bank, Peat Marwick Mitchell, KMG Hungerford's, KPMG and their successors in title, and the legal advisers of any of those parties, in relation to the securities which underlay the events the subject of Mr Bride's proposed counterclaim. Leave under that Act would be required before the Commonwealth Bank or Freehills could be joined. The proposed joinder is thus not presently permissible in any event.

Conclusion

For those reasons, the application by Mr Bride to amend the defence and counterclaim and join third parties to the action should be dismissed. Mr Bride's counterclaim should also be dismissed.