Spiliotopoulos v National Australia Bank Ltd

[2017] NSWSC 971

Supreme Court

New South Wales

Medium Neutral Citation:	Spiliotopoulos v National Australia Bank Limited [2017] NSWSC 971
Hearing dates:	18 July 2017
Date of orders:	21 July 2017
Decision date:	21 July 2017
Jurisdiction:	Common Law
Before:	Harrison J
Decision:	(1)    Dismiss the proceedings against the first defendant and the third defendant with costs. (2)    Dismiss the plaintiff’s application to replead.
Catchwords:	SUMMARY DISPOSAL – UCPR 13.4 – where plaintiff alleges signature on mortgage procured by fraud of wife – where monies advanced by Bank on security of mortgage paid into joint account of plaintiff and wife – whether Bank and attesting witness to plaintiff’s signature on mortgage implicated in the alleged fraud of wife – whether claims pleaded in fraud disclose a reasonable cause of action against either the Bank or the attesting witness – whether Bank’s mortgage registered with notice of fraud – whether fraud can be brought home to the Bank – whether claims in fraud otherwise properly pleaded or particularised – whether attesting witness negligent in signing mortgage in absence of plaintiff – where plaintiff’s claim in negligence against attesting witness not clearly articulated – whether claim in negligence against attesting witness barred by operation of Limitation Act – whether plaintiff suffered loss having regard to his receipt and enjoyment of the monies advanced by the Bank
Legislation Cited:	Australian Securities and Investment Commission Act 2001 Civil Procedure Act 2005 Limitation Act 1969 Real Property Act 1900 Uniform Civil Procedure Rules 2005
Cases Cited:	Arthur Yates & Co Pty Ltd v The Vegetable Seeds Committee (1945) 72 CLR 37; [1945] HCA 55 Artistic Builders Pty Ltd & Anor v Nash & Ors [2010] NSWSC 1442 Assets Co Ltd v Mere Roihi [1905] AC 176 Banque Commerciale SA, en liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250 Breskvar v Wall (1971) 126 CLR 376; [1971] HCA 70 Cox v Journeaux (No 2) (1935) 52 CLR 713; [1935] HCA 48 Davy v Garrett (1878) 7 Ch D 473 Frazer v Walker [1967] 1 AC 569 General Steel Industries v Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69 Grgic v ANZ Banking Group Ltd (1994) 33 NSWLR 202 Hillebrand v Penrith Council [2000] NSWSC 1058 Issitch v Worrell (2000) 172 ALR 586 Kingsley Corporation Ltd v ANZ Banking Group (No 2) (NSWSC, 15 October 1997, unreported) McDonald v Grech [2012] NSWSC 717 MacLeod v The Queen (2003) 214 CLR 230; [2003] HCA 25 Magman International Ltd v Westpac Banking Corporation Ltd (1991) 32 FCR 1 NIML Ltd v MAN Financial Australia Ltd (No 2) [2004] VSC 510 Scarcella v Lettice [2000] NSWCA 289 Seymour v Seymour (1996) 40 NSWLR 358 Spencer v The Commonwealth (2010) 241 CLR 118; [2010] HCA 28 Stuart v Kingston (1923) 32 CLR 309; [1923] HCA 17 Thelma Langford v Deva and Dianne Reddy & Ors [2012] NSWSC 289. Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 Wallingford v Mutual Society (1880) 5 App Cas 685 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55 Webster v Lampard (1993) 177 CLR 598; [1993] HCA 57 White v Grogan [1972] 2 NSWLR 347
Category:	Procedural and other rulings
Parties:	Arthur Spiliotopoulos (Plaintiff) National Australia Bank Limited (First Defendant) Lorraine Jackson (Third Defendant) Sofia Spiliotopoulos (Fourth Defendant)
Representation:	Counsel: A Norrie (Plaintiff) V Brigden (First Defendant) H Altan (Third Defendant) Mr D Nagle (Fourth Defendant)   Solicitors: HAL Lawyers (Plaintiff) Dentons (First Defendant) Willis & Bowring (Third Defendant) WG McNally Jones Staff Lawyers (Fourth Defendant)
File Number(s):	2015/00082205
Publication restriction:	Nil

Judgment

1. HIS HONOUR: By his further amended statement of claim filed on 16 March 2016, Arthur Spiliotopoulos sued four defendants arising out of the circumstances that led to the registration of a mortgage over his property at 52 Russell Street, Greenacre. The first defendant is the National Australia Bank, the registered mortgagee. The second defendant is the Registrar General, against whom the proceedings have since been discontinued. The third defendant, Lorraine Jackson, is the person who as a witness is said to have attested the plaintiff’s signature upon the mortgage. The fourth defendant, Sofia Spiliotopoulos, is the plaintiff’s wife. The plaintiff and his wife are separated and are currently engaged in proceedings between them in the Family Court of Australia.

2. By her notice of motion filed on 28 September 2016, the third defendant seeks an order that the proceedings brought against her be summarily dismissed pursuant to UCPR 13.4. She relies upon the affidavit of Lisa Marie Boler sworn on 28 September 2016. By its notice of motion filed on 6 October 2016, the Bank also seeks orders that the proceedings against it be dismissed pursuant to UCPR 13.4 or that paragraphs 11A to 11G of the further amended statement of claim be struck out pursuant to UCPR 14.28. The Bank relies upon the affidavits of Louise Massey affirmed on 6 October 2016 and 6 June 2017.

Summary dismissal

3. The principles governing summary dismissal are well established and may be summarised as follows.

4. The power to dismiss proceedings without a substantive hearing should only be exercised in “plain and obvious” cases, where the plaintiff’s case is “so clearly untenable that it cannot possibly succeed”: General Steel Industries v Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69 at 129-130 per Barwick CJ.

5. The power to terminate an action summarily should not be exercised in cases where “the ultimate outcome of the case depends upon the resolution of some disputed issue or issues of fact”: Webster v Lampard (1993) 177 CLR 598; [1993] HCA 57 at 603 per Mason CJ. Accordingly, if any consideration of factual evidence is required in assessing whether a plaintiff has a claim, summary dismissal will not be appropriate.

6. The exercise of the power is always to be “attended with caution” and “great care” and is one that should only be exercised where it is clear that “there is no real question to be tried”: Spencer v The Commonwealth (2010) 241 CLR 118; [2010] HCA 28 at 131 [24] per French CJ and Gummow J.

7. However, notwithstanding the high bar that a defendant must meet, the power summarily to dismiss a claim is an important power in facilitating the efficient administration of justice by removing unmeritorious proceedings from the Court system, and it will be appropriate to make the order (in the proper case) even if extensive legal argument is necessary in order to demonstrate the hopelessness of a claim.

Background

8. The plaintiff is the registered proprietor of 52 Russell Street, Greenacre. He is also, together with his wife, the registered proprietor of 47 Russell Street, Greenacre.

9. On 24 January 2005, Ms Jackson, at the fourth defendant’s request, attested what she then thought was the fourth defendant’s signature on a document. That document turned out to be a mortgage in favour of the Bank secured over 52 Russell Street, Greenacre. Ms Jackson says that she did not know the nature of the document in question at that time. It was initially Ms Jackson’s contention that she attested the fourth defendant’s signature on the document. There is evidence now to suggest that the signature upon the document is in fact that of the plaintiff, even though he was not present when she attested the signature. This is referred to below.

10. On 2 February 2005, the Bank lent $240,000 by way of a line of credit into the joint bank account in the name of the plaintiff and the fourth defendant. On 18 February 2005, the mortgage in favour of the Bank was registered as security for that loan. On 8 March 2005, an application was made by either the plaintiff or the fourth defendant or both of them to increase the line of credit by $170,000 to a total of $420,000. That total sum was ultimately paid by the Bank in two tranches into a joint account in the name of the plaintiff and his wife. Ms Jackson did not witness the execution of any document relating to that increase. Between 3 March 2005 and 20 December 2005, the sum of $407,469.78 was paid from the loan funds to Champion Homes for the construction of two duplexes on 47 Russell Street, Greenacre.

11. In July 2011, one of the duplexes was sold for $600,000. The plaintiff and the fourth defendant remain the owners of the remaining duplex.

12. The plaintiff commenced these proceedings against Ms Jackson in March 2015. He then discontinued the proceedings against her, but later re-joined her as a defendant in October 2015.

The case pleaded against Ms Jackson

13. The further amended statement of claim is badly pleaded. It is frankly difficult to discern precisely what allegations are made by the plaintiff against Ms Jackson. She somewhat generously understands that the plaintiff sues her in negligence and on a count alleging fraud.

14. Paragraphs 8 to 10 inclusive of the further amended statement of claim are as follows:

“8.    The fourth defendant obtained the signature of the third defendant as the attesting witness to the mortgage, she having provided it to the fourth defendant who witnessed it purportedly on behalf of the plaintiff as the person that [sic, who] had signed it.

9.    The fourth defendant caused the third defendant to sign the mortgage on the basis that the fourth defendant intended to and did proceed to mortgage the property with NAB.

10.    The third and fourth defendants acted fraudulently in respect of the mortgage, and procuring the mortgage.”

15. Paragraph 11 of the further amended statement of claim purports to particularise the fraud alleged. The so-called particulars are discursive and prolix. Doing the best I can, it seems that the only relevant portions of the particulars provided are to be found at 11A to 11C inclusive, in these terms:

“11A   The mortgage states that the third defendant was satisfied that the plaintiff, as mortgagee, had signed the mortgage in her presence, and that she was personally acquainted with the plaintiff, or that she was otherwise satisfied as to his identity.

11B    The third defendant at the time that she signed the mortgage was not so satisfied, and well knew that she was not so satisfied, because the mortgage had not been signed by the plaintiff in front of her.

11C    For these reasons, the conduct of the third defendant was fraudulent, in that she signed the mortgage as an attesting witness, when she was not an attesting witness and she know [sic, knew] that she was not an attesting witness.”

16. The evidence on these applications otherwise reveals that on 21 June 2016, the plaintiff discarded his claim alleging fraud against Ms Jackson by the terms of his solicitor’s letter of that date saying, “we will not press the allegations of fraud against your client”. Ms Jackson did not in those circumstances plead to the fraud allegation in her defence filed on 29 June 2016. However, on 3 July 2016, the plaintiff served an unsealed copy of his reply in which he appears to have been re-formulating some type of a claim based upon “equitable fraud”. The plaintiff now asserts that in referring to his claim as one alleging equitable fraud he is relieved of the obligation specifically to plead Ms Jackson’s state of mind at the relevant time, such as that she witnessed the fourth defendant signing the mortgage well knowing that the fourth defendant was forging her husband’s signature.

17. Ms Jackson also anticipates that the further amended statement of claim pleads a case against her in negligence. I remain to be convinced of that fact, having regard to the form of the pleading in question. The plaintiff claims aggravated and exemplary damages from Ms Jackson, of which one particular contends that Ms Jackson “had at all times a duty to disclose her conduct and behaviour to the plaintiff”. Apart from that somewhat enigmatic reference to a duty, the further amended statement of claim does not plead the terms of any alleged duty of care, and certainly does not allege or particularise what is said to have been the breach of any such duty, in a way that could conceivably be characterised as a claim against Ms Jackson in negligence.

The case pleaded against the Bank

18. The plaintiff’s case against the Bank is pleaded in paragraphs 11A to 11K inclusive of the further amended statement of claim. With the exception of those paragraphs already cited, the remaining paragraphs are as follows:

“11D   In respect of the Mortgage, the NAB was required in the course of banking practice to have had its officer Dilia Clemente meet with the plaintiff and explain to the plaintiff the effect of the Mortgage, because the plaintiff was the principal security provider;

11E    The NAB did not do so, and Dilia Clemente did not meet with or discuss the Mortgage with the plaintiff;

11F    The NAB accepted the putative Mortgage, and proceeded to lodge it for registration with the New South Wales Department of Lands, Dilia Clemente on behalf of the NAB well knowing that she had signed a ‘customer interview record’, certifying that she had met with the plaintiff when she had not done so;

11G    By reason of the fact that the NAB did not meet with or discuss the Mortgage with the plaintiff, the NAB:

(i)    did not obtain its Mortgage in the normal course of banking practice;

(ii)    did not obtain its Mortgage without notice of the fraud, or alternatively without any wrong doing on its part;

(iii)    obtained its Mortgage by reason of a fraud committed both upon itself and upon the plaintiff, by reason of the fact that the Bank’s own internal procedures and policies were not complied with, although Ms Dilia Clemente on behalf of the Bank certified that they had been complied with;

11H The Mortgage is, for the reasons outlined in the preceding paragraphs 11A to 11G inclusive, and for the purposes of Section 42(1) of the Real Property Act, defeasible, such that the plaintiff is entitled to compel the first defendant to have it removed from the title particulars concerning the plaintiff’s property.

11I Alternatively to paragraph 11H, the NAB is for the purposes of the ASIC Act 2001 (Cth), a provider of a financial service, carrying on a business of banking that includes the obtaining of Real Property Act mortgages as security for loans by it.

11J Pursuant to and in accordance with Section 12ED of the ASIC Act, the provision of the service of lending was and is required to be carried on by the NAB with a requisite degree of skill, of care and of diligence;

11K    The NAB in proceeding to obtain and to lodge the mortgage for registration failed or neglected in its obligations to provide a financial service with the requisite degree of skill, of care and of diligence as required by its duty and that is set out in the previous paragraphs, 11A to 11J above.”

19. Paragraphs 11G (ii) and (iii) contain the only references in the further amended statement of claim to allegations of fraud against the Bank.

Ms Jackson’s submissions

20. Ms Jackson submitted that the plaintiff’s allegations of fraud are an attempt to overcome the inescapable reality that he is unable to point to any particular knowledge on her part to substantiate them. Moreover, it is plainly wrong as a matter of law. As noted in Seymour v Seymour (1996) 40 NSWLR 358,

“[e]quitable fraud is a doctrine which depends, for this purpose, too much on nice distinctions which have been drawn in other times… In my opinion, there must be in what is involved a consciousness that what is being done is wrong or that to take advantage of the situation involves wrongdoing” [emphasis added].

21. Fraud has a special status in civil litigation. It is an allegation which should not lightly be made, and when it is, rules have been developed to ensure that it is made properly with a full statement of the basis for doing so.

22. The obligations concerning the pleading of fraud or dishonesty arise both as a general rule of practice and under the rules of court.

23. The rule of practice under the general law is beyond doubt. It has been confirmed repeatedly by the High Court, including in Banque Commerciale SA, en liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 at 285, 295. The High Court has said on many occasions that allegations of fraud must be pleaded “clearly and distinctly”, “with particularity”, “clearly and without ambiguity”, and various other formulations to the same effect.

24. A classic statement of the rule appears in Wallingford v Mutual Society (1880) 5 App Cas 685 at page 701, as follows:

“Now I take it to be as settled as anything well can be by repeated decisions, that the mere averment of fraud, in general terms, is not sufficient for any practical purpose in [a pleading]. Fraud may be alleged in the largest and most sweeping terms imaginable. What you have to do is, if it be matter of account, to point out a specific error, and bring evidence of that error, and establish it by that evidence. Nobody can be expected to meet a case, and still less to dispose of a case, summarily upon mere allegations of fraud without any definite character being given to those charges by stating the facts upon which they rest.”

25. Dishonesty in the ordinary sense involves a particular state of mind, in essence, a wrongful intent or consciousness. Ms Jackson submitted that in a legal context, it can only be defined generally by saying that it involves such knowledge, belief or intent which, according to standards of ordinary decent people, would be considered dishonest: MacLeod v The Queen (2003) 214 CLR 230; [2003] HCA 25 at [37]. She submitted that the plaintiff seeks to escape the strict obligations attaching to an allegation of dishonesty by erroneously attempting to label his claim as “equitable fraud”.

26. Ms Jackson submitted that there were several problems with this. The term “fraud” encompasses many different notions in law and in equity. “Fraud” is certainly not limited to “common law fraud”, “red-blooded fraud” or deceit. Because of this characteristic, it has been held that the pleading rule applies to all types of fraud, not because all types of fraud are of analogous obliquity, but in order to differentiate clearly the nature of the “fraud” being alleged, and so that the defendant understands the specific case he has to meet. In Banque Commerciale SA, en liquidation v Akhil Holdings Ltd , Mason CJ and Gaudron J said this at 285:

“It has long been recognised that fraud may take a variety of forms and is, on that account, incapable of precise definition. See, for example, Draper v Dean (1679) Finch 439; 23 ER 239; Reddaway v Banham [1896] AC 199 at 221; Allcard v Skinner (1887) 36 Ch D 145 at 183. ... That variety effectively deprives a party who may or may not have acted fraudulently from ascertaining precisely what must be negatived. Indeed, it is this feature of fraud which underlies the rule of practice … that fraud must be pleaded specifically and with particularity.”

27. These words require a party to plead the material facts relevant to the cause of action with clarity and to provide necessary particularity so that the defendant understands the nature of the case he or she has to meet. However, the rule relating to fraud is emphatic about these requirements: compliance is required to a high degree, and in a way that may not be necessary in an ordinary pleading.

28. In NIML Ltd v MAN Financial Australia Ltd (No 2) [2004] VSC 510 at [6], Harper J said:

“Allegations of fraud should only be made on the basis of evidence, worthy of serious consideration, which points to dishonesty in the subject of the allegation. Loose allegations of fraud are a blot on the adversarial system, and may — where, for example, they are made in terrorem — amount to an abuse of process.”

29. In Arthur Yates & Co Pty Ltd v The Vegetable Seeds Committee (1945) 72 CLR 37; [1945] HCA 55 at 63, Latham CJ said:

“An allegation of fraud is quite different from an allegation of a mistaken conception of right or duty or power. Allegations of fraud must be made clearly and without ambiguity. It is true that the plaintiff claims a declaration that the orders were made ‘mala fide and capriciously in relation to any relevant power given to the Committee by and under the said regulations.’ But there is nowhere in the statement of claim any allegation of dishonesty on the part of the committee.”

30. A similar point was made by Buckley LJ in Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250, at 268, in which it was said that the requirement for clarity and particularity:

“does not import that the word ‘fraud’ or the word ‘dishonesty’ must necessarily be used … The facts alleged may sufficiently demonstrate that dishonesty is allegedly involved, but where the facts are complicated this may not be so clear, and in such a case it is incumbent upon the pleader to make clear when dishonesty is alleged. If he uses language which is equivocal, rendering it doubtful whether he is fact relying on the alleged dishonesty of the transaction, this will be fatal”.

31. It is certainly one requirement of the rule that a defendant be put on notice if an allegation of fraud is being made. However, if the nature of the allegation is not clear, specific, comprehensible and fully and properly particularised, the pleading will be demurrable, notwithstanding that it might be clearly labelled as an allegation of “fraud”. The judgment of the Court of Appeal in Davy v Garrett (1878) 7 Ch D 473, particularly at 489, contains what is perhaps the clearest statement of this:

“A further objection to the form of the statement of claim is furnished by the argument on behalf of the Plaintiffs. They say that they allege first that the Defendants are trustees, and therefore bound to account; secondly, that the Defendants, if not trustees for the Plaintiffs, are liable to them on the ground of fraud, and (which comes to much the same thing) of collusion. Now, in any properly constituted system of pleading, if alternative cases are alleged, the facts ought not to be mixed up, leaving the Defendant to pick out the facts applicable to each case; but the facts ought to be distinctly stated, so as to show on what facts each alternative of the relief sought is founded.

…

The Plaintiffs say that fraud is intended to be alleged, yet it contains no charge of fraud. In the Common Law Courts no rule was more clearly settled than that fraud must be distinctly alleged and as distinctly proved, and that it was not allowable to leave fraud to be inferred from the facts. It is said that a different rule prevailed in the Court of Chancery. I think that this cannot be correct. It may not be necessary in all cases to use the word “fraud” — indeed in one of the most ordinary cases it is not necessary. An allegation that the Defendant made to the Plaintiff representations on which he intended the Plaintiff to act, which representations were untrue, and known to the Defendant to be untrue, is sufficient. The word ‘fraud’ is not used, but two expressions are used pointing to the state of mind of the Defendant - that he intended the representations to be acted upon, and that he knew them to be untrue. It appears to me that a Plaintiff is bound to shew distinctly that he means to allege fraud. In the present case facts are alleged from which fraud might be inferred, but they are consistent with innocence. They were innocent acts in themselves, and it is not to be presumed that they were done with a fraudulent intention.”

32. The essential point is that if one seeks to make out a case of fraud, this must be made very clear from the pleading and the facts upon which the allegation of fraud is based must be distinctly pleaded. It is impermissible simply to plead a whole series of facts and, at some stage in the proceedings, assert that some or all of those facts would support a finding of fraud.

33. Particulars of the fraud must also be given. Lord Millet in Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 said at [186]:

“The second principle, which is quite distinct, is that an allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.”

34. UCPR 6.3 requires that proceedings “on a claim based upon an allegation of fraud” must be commenced by statement of claim. What is meant by “fraud” in this context has not been the subject of specific authority but it seems apparent that a court should apply the same approach and require a pleading wherever a plaintiff seeks to allege fraud, dishonesty or similar. In White v Grogan [1972] 2 NSWLR 347 at 351, the Court of Appeal appears to suggest that the rule applied to cases of, at least, “legal or equitable fraud”.

35. UCPR 14.14 provides:

“14.14 (1) In a statement of claim, the plaintiff must plead specifically any matter that, if not pleaded specifically, may take the defendant by surprise.

(2)   In a defence or subsequent pleading, a party must plead specifically any matter:

(a) that, if not pleaded specifically, may take the opposite party by surprise, or

(b) that the party alleges makes any claim, defence or other case of the opposite party not maintainable, or

(c) that raises matters of fact not arising out of the preceding pleading.

(3)    Matters which must be pleaded pursuant to subrule (2) include (but are not limited to) fraud…”

36. The requirement to plead fraud specifically mirrors the requirement of the general rule of practice. This rule has a relatively broad reach (ie any matter that, if not pleaded specifically, may take the other party by surprise). It clearly has an even wider scope than the rule of practice, which is really aimed at dealing with allegations of a serious and reprehensible nature.

37. UCPR 15.3 provides as follows”

“15.3    A pleading must give particulars of any fraud, misrepresentation, breach of trust, wilful default or undue influence on which the party relies.”

38. Summary dismissal may be appropriate where unsustainable allegations of conspiracy and fraud are being alleged: Cox v Journeaux (No 2) (1935) 52 CLR 713; [1935] HCA 48 at [20].

39. Ms Jackson contended that it was “plain” that no cause of action in fraud is disclosed. The plaintiff cannot, and never has, put his case against Ms Jackson any higher than that she incorrectly witnessed the signing of a document without satisfying herself of the nature of the document and ensuring that the person whose signature she was witnessing was the person named in the document. At its highest, those facts are sufficient to disclose a cause of action in negligence but not fraud.

40. Ms Jackson also contended that the plaintiff’s claim against her in negligence is statute barred.

41. Generally, limitation issues should not be determined on an application for summary dismissal: Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55 at 532; Magman International Ltd v Westpac Banking Corporation Ltd (1991) 32 FCR 1; Kingsley Corporation Ltd v ANZ Banking Group (No 2) (NSWSC, 15 October 1997, unreported); McDonald v Grech [2012] NSWSC 717 at [36]. However, where there is no uncertainty as to the timing of the alleged loss, and where a defendant relies on a limitation defence that clearly applies and has expired, the court may conclude that a statement of claim does not disclose a reasonable cause of action and should be summarily dismissed: Hillebrand v Penrith Council [2000] NSWSC 1058 at [27].

42. A cause of action in negligence accrues when damage is first suffered: Artistic Builders Pty Ltd & Anor v Nash & Ors [2010] NSWSC 1442 at [649]; Thelma Langford v Deva and Dianne Reddy & Ors [2012] NSWSC 289. Time continues to run from that point irrespective of when the plaintiff becomes aware that damage has accrued: Scarcella v Lettice [2000] NSWCA 289; Hillebrand v Penrith Council at [42].

43. In this case Ms Jackson submitted that there could be no doubt that the plaintiff’s alleged loss was first suffered (and, therefore, his cause of action in negligence accrued) when the mortgage was registered by the Bank on 18 February 2005. This is when the property became encumbered. This is precisely the loss claimed by the plaintiff in paragraph 14 of the further amended statement of claim.

44. The limitation period for an action in tort is 6 years: s 14(1) (b) Limitation Act 1969. Accordingly, the time for the plaintiff to have commenced proceedings against Ms Jackson expired on 18 February 2011, over 4 years before he did so.

45. Finally, Ms Jackson contended that the plaintiff has in any event suffered no loss. At the direction of the Court, a notice to admit facts and authenticity of documents was issued to the plaintiff. He responded by admitting that between 3 March 2005 and 20 December 2005, a total sum of $407,469.78 was paid from the loan funds to Champion Homes for the building of two duplexes on 47 Russell Street, Greenacre, and that in July 2011, one of the duplexes was sold for $600,000.

46. Ms Jackson submitted in those circumstances the plaintiff has benefitted from the loan advance made under the mortgage and has therefore suffered no loss. It is also significant that only $230,000 was advanced at the time Ms Jackson witnessed the fourth defendant’s signature on the mortgage on 24 January 2005. Ms Jackson did not witness any signatures for the further advance of $170,000 which was made on 8 March 2005.

47. Ms Jackson emphasised that these issues have been drawn to the plaintiff’s attention, and it has been asserted by his solicitor in response, as well as in an affidavit served by the plaintiff, that:

1. the fourth defendant dealt with monies held in their joint account prior to January 2005 fraudulently and/or in a manner that was not authorised by him;

2. the plaintiff knew that monies were being paid to Champion Homes for the construction of the duplexes on 47 Russell Street, Greenacre;

3. he believed at the time that the property was unencumbered;

4. he was not aware that a loan was obtained to construct the duplexes;

5. had the fourth defendant (allegedly) not fraudulently dealt with monies prior to January 2005, the couple would have had sufficient savings to construct the duplexes without the need to obtain a loan.

The Bank’s submissions

48. The plaintiff contends that the mortgage is defeasible for the purposes of s 42(1) of the Real Property Act 1900 “such that [he] is entitled to compel the first defendant to have it removed from the title particulars concerning [his] property”.

49. At paragraphs 11D to 11G of the further amended statement of claim, the plaintiff alleges that the Bank was required in the course of banking practice to have its officer meet with the plaintiff and explain the effect of the mortgage, and that the Bank did not do so but proceeded to lodge the mortgage for registration. It is then pleaded that by reason of the fact that the Bank did not meet with the plaintiff or discuss the mortgage with him, the Bank did not obtain its mortgage in the normal course of banking practice, did not do so without notice of the fraud, or alternatively without any wrongdoing on its part, and obtained its mortgage by reason of a fraud committed both upon itself and the plaintiff, by reason of the fact that the Bank’s own internal procedures and policies were not complied with, even though Ms Dilia Clemente on behalf of the Bank certified that they had been.

50. In order for the mortgage to be set aside on the basis pleaded, the plaintiff must establish that he was defrauded out of his interest as registered proprietor and that the fraud was the Bank’s own, in the sense that it can be brought home to the Bank: Frazer v Walker [1967] 1 AC 569; Breskvar v Wall (1971) 126 CLR 376; [1971] HCA 70 at 384-386. If the plaintiff cannot establish that a consciously dishonest act can be brought home to the Bank, as the registered proprietor of the interest, its title will be indefeasible: Stuart v Kingston (1923) 32 CLR 309; [1923] HCA 17 at 359. The Bank submitted that even if the underlying facts pleaded against it at paragraphs 11D to 11G are made out, it does not establish the requisite knowledge on behalf of the Bank to amount to fraud.

51. The fraud pleaded is that of Ms Jackson, in signing the mortgage as an attesting witness when she knew she was not. It is not alleged that the Bank participated in the fraud, but instead that it obtained the mortgage “not without notice of” the fraud and “by reason of a fraud committed both upon itself and upon the plaintiff”.

52. The basis of this allegation is that the Bank did not meet with or discuss the mortgage with the plaintiff, which the plaintiff alleges it was required to do “in the course of banking practice”. The claim does not identify the legal basis for this alleged requirement. The response given in a request for further and better particulars in respect of an earlier version of the pleading to identify the source of that obligation does not indicate any basis to suggest that this would give rise to a reasonably arguable claim.

53. Even if the plaintiff establishes that Ms Jackson’s conduct was fraudulent, or that the Bank was required to meet him and explain the effect of the mortgage, and that Ms Clemente’s signing the customer interview record had the effect of certifying that she had met with him, the plaintiff will still fall far short of establishing that the Bank had notice of Ms Jackson’s alleged fraudulent conduct.

54. It is not alleged that Ms Clemente or any other officer of the Bank was a party to the alleged fraud of Ms Jackson. The possibility Ms Clemente might have discovered the fraud if she had met with the plaintiff will not operate to cloak Ms Clemente with notice of the fraud so as to defeat the Bank’s registered title. As Lord Lindley said in Assets Co Ltd v Mere Roihi [1905] AC 176 at 210:

“The mere fact that he might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not of itself prove fraud on his part. But if it can be shewn that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth, the case is very different, and fraud may properly be ascribed to him. A person who presents for registration a document which is forged or has been fraudulently or improperly obtained is not guilty of fraud if he honestly believes it to be a genuine document which can be properly acted upon.”

55. In Grgic v ANZ Banking Group Ltd (1994) 33 NSWLR 202, which concerned a forged attestation of a signature by an imposter, witnessed by bank officers, the Court of Appeal held that the attestation and certification by the bank officers did not amount to fraud for the purposes of s 42 of the Real Property Act. Powell JA held at 222 that the attestation could not constitute fraud unless it could be shown either that the bank officer knew that the imposter was not the true owner, or that, in signing the attestation, he was acting recklessly without caring whether or not the imposter was the true owner. His Honour said:

“In the circumstances, it being well-established that a person who presents for registration a document which is forged or has been fraudulently or improperly obtained, is not guilty of ‘fraud’ if he honestly believes it to be a genuine document which can be properly acted upon (Assets Co Ltd v Mere Roihi (at 210); Mayer v Coe) and that a less than meticulous practice as to the identification of persons purporting to deal with land registered under the provisions of the Act does not constitute a course of conduct so reckless as to be tantamount to fraud (Ratcliffe v Watters (1969) 89 WN (Pt 1) (NSW) 496 at 500; [1969] 2 NSWR 146 at 149) this first ground of attack upon the ANZ’s title as mortgagee of the subject property must fail.”

56. In any event, the customer interview record signed by Ms Clemente was dated 17 August 2005, while the mortgage was purportedly entered into on 24 January 2005. The later completion of the customer interview record cannot be relevant to the earlier registration of the mortgage.

57. The plaintiff does not allege that Ms Clemente or any other officer of the Bank did not believe that the mortgage was not a genuine document that could be properly acted upon, or that her suspicions were aroused, or that she abstained from making further enquiries lest she discovered that the plaintiff had not signed it. It is not alleged that the Bank engaged in a level of recklessness amounting to fraud.

58. Furthermore, the contrary is alleged, namely that the Bank obtained the mortgage by reason of a fraud committed both upon itself and the plaintiff. This allegation apparently recognises that the Bank was innocent of any fraud. The alleged vice in the Bank’s conduct, according to the plaintiff, was in failing to comply with its own internal policies and procedures. No internal policies or procedures have been identified with which it is said the bank failed to comply. Even if this were so, failure to comply with internal policies and procedures would not elevate the Bank’s conduct to a participation in Ms Jackson’s alleged fraud.

59. Regardless of whether or not the plaintiff succeeds on the facts alleged to establish fraud, the conduct of the Bank was not fraudulent. For this reason, the Bank submitted that the plaintiff’s claim to set aside the mortgage is hopeless and should be dismissed.

60. The Bank also contended that the plaintiff’s claim for damages and equitable compensation must fail on the basis that he has suffered no loss in connection with the entry into the mortgage. It is not understood to be in issue that the mortgage was used by the bank as security for $240,000 advanced in February 2005 in the form of a line of credit and additional monies advanced in August 2005 to a total of $420,000. The plaintiff has admitted that on or about 4 February 2005, a cheque for $230,000 was drawn on a joint account with the Bank in the names of the plaintiff and his wife and deposited into a Qantas staff credit union account in the names of S Spiliotopoulos and A Spiliotopoulos. The plaintiff has also admitted that on or about 31 August 2005, a cheque for $170,000.00 was drawn on the joint account with the Bank and deposited into the joint Qantas account.

61. It is also admitted that between 3 March 2005 and 20 December 2005, various payments totalling $407,469.78 were made from the joint Qantas account to Champion Homes. The plaintiff has admitted that those payments were for the construction of duplexes on 47 and 47A Russell Street, Greenacre. The property at 47A Russell Street, Greenacre has since been sold by the plaintiff and his wife for $600,000.

62. The Bank emphasises that the loan funds were used to fund the construction of properties of which the plaintiff was a joint owner. The plaintiff accepts that Mrs Spiliotopoulos has made all mortgage repayments since they separated. The plaintiff cannot, therefore, have suffered any loss, even if he establishes a cause of action which would give rise to a claim in damages or equitable compensation.

56. The Bank also submitted that the plaintiff’s claim under the ASIC Act must fail. To the extent that the plaintiff’s claim for “damages” or “equitable compensation” is brought under s12GF of the ASIC Act, it is manifestly hopeless. Compensation under s12GF of the ASIC Act is available where a person has suffered loss or damage by conduct of another person that contravenes a provision of Subdivision C (sections 12CA to 12CC) or Subdivision D (sections 12DA to 12DN). No contravention of any of those provisions is alleged in the further amended statement of claim.

57. The Bank emphasised that in considering the power summarily to dismiss proceedings, the Court must seek to give effect to the overriding purpose of the Civil Procedure Act 2005 which is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. According to the Bank, this consideration requires a practical judgment about the plaintiff’s prospects of success.

The plaintiff’s submissions

65. The plaintiff’s written submissions on these applications dated 13 July 2017 were, with respect, somewhat difficult to understand. They make it clear that the plaintiff opposes summary judgment in each case, but the submissions do little more than reassert what emerges hesitatingly from the further amended statement of claim. The written submissions do not in terms address any of the significant points raised in the written submissions filed by either the Bank or Ms Jackson. This is regrettable.

66. Mr Norrie of counsel, who is not the author of the written submissions, was in my view understandably unable to assist me with the question of why the defendants’ contentions that the plaintiff had suffered no loss were without considerable force. Mr Norrie also somewhat reluctantly adopted the written submissions but was also unable to demonstrate or articulate any convincing reason why the defendants’ submissions should not be accepted. That was not his fault.

Consideration

The claim against Ms Jackson

67. By letter dated 16 June 2016, the solicitors for Ms Jackson wrote to the plaintiff’s solicitor referencing the further amended statement of claim. Part of that letter is as follows:

“However, before our client can file a defence, we note that at paragraphs 10, 11C and 15…bare assertions are made that our client acted fraudulently and as to her knowledge.

Part 15.3 requires that particulars must be given of any allegation of fraud and part 15.10(2) specifically provides that the Court may order a party to file particulars of any facts relied upon for any allegation of knowledge.

Although fraud and knowledge are pleaded …it seems to us, based on recent correspondence in which you have repeatedly made statements to the effect that our client witnessed the fourth defendant sign the mortgage document, that your client’s claim as against our client is really one based on negligence rather than fraud. There are no particulars in the [pleadings] to support the fact that our client acted dishonestly, or with conscious impropriety….In our view, [the cases referred to] found that the attesting witnesses was [sic, were] found to have been negligent, rather than fraudulent.

Would you please confirm, first whether your claim against our client is based on fraud, or whether it is one in negligence.”

68. As already noted, the plaintiff’s solicitor replied to that letter the following day. The full terms of the relevant paragraph of that letter are as follows:

“Not that it makes any difference, we will not press the allegations of fraud against your client, although we do not suggest that it is inadequately particularised. Graham v Hall is sufficient for our purposes to ensure that liability against your client [in negligence] is established.”

69. What purports to be a resurrection of the claim in fraud appears in the plaintiff’s reply filed on 11 July 2016. In my opinion, having regard to the plaintiff’s specific disavowal of the claim of fraud against Ms Jackson in what is the current pleading, the reply in the terms filed is embarrassing and is liable to be struck out. Having regard to the view I have formed about the ultimate disposition of the present applications, that matter can be put to one side.

70. Be all that as it may, I am unable to discern the slightest basis to support the plaintiff’s claim alleging somehow that Ms Jackson fraudulently attested to a signature upon the mortgage. It has to be recognised that Ms Jackson’s understanding of what occurred, and what role she played, when she was approached by the fourth defendant to witness a signature, has changed over time. Ms Jackson has given versions of what her understanding was, ranging from her perception that she was witnessing the fourth defendant’s signature on the mortgage, to what amounts to a realisation that she had been deceived by the fourth defendant into believing she was signing the document, to a probable recognition now that the plaintiff had signed the document in advance and that the fourth defendant did not sign it at all. The last position would appear to derive from the opinion of an expert document examiner who opines that the mortgage contains the genuine signature of the plaintiff. (This matter is referred to below).

71. The upshot is that Ms Jackson’s position appears to be wholly consistent with either a lack of interest or a total misunderstanding, but is not in my view capable of amounting to fraud. Even if the allegations of fraud pleaded in the further amended statement of claim survived the later disavowal, I am satisfied, for the reasons dealt with by Ms Jackson in her submissions, that the claim alleging fraud is hopeless.

72. In my view, this is somewhat ironically supported by a conversation between the plaintiff and Ms Jackson to which the plaintiff deposes at paragraphs 31 to 33 of his affidavit sworn on 21 July 2015. They are as follows:

“31    After 2002 or 2003, the next time I spoke to Lorraine was on the evening of 18 March 2015 after I tried to serve a copy of the statement of claim filed in these proceedings upon her at her house…

32    Approximately 10 minutes later when I was heading back to Greenacre I received a telephone call back from Lorraine. In fact, I received 2 telephone calls in short succession. Lorraine said: ‘I’m Lorraine. I got your documents.’

33    I said: ‘You witnessed my signature without me being there? Was I there Lorraine?

Lorraine said: ‘No, you weren’t there, I was told by Sofia that it was her document and she was signing her signature. I had no idea that she was signing your signature.’

I said: ‘Okay.’”

73. The plaintiff says at paragraph 35 of the same affidavit that when he confronted his wife about what had happened, she told him that;

“I always sign your signature. Lorraine witnessed it because I told her it was your signature.”

74. It is neither possible nor necessary to assess the truth or otherwise of the conversation with Ms Jackson or the words spoken by his wife to which the plaintiff deposes. It is significant, however, in my opinion that the plaintiff’s sworn version of his conversation with Ms Jackson rather suggests that she was duped by the fourth defendant and that she did not knowingly act to the plaintiff’s detriment. If that inference is available, as I consider that it is, it is inimical to the plaintiff’s contention that Ms Jackson somehow is guilty of the fraud he alleges.

75. The plaintiff’s claim against Ms Jackson, said to have been framed in negligence, has clearly been commenced out of time. I put to one side the fact that this so-called claim is inelegantly pleaded, if it is pleaded at all. I accept, however, in accordance with the authorities dealing with the duty of an attesting witness, that a viable claim in negligence could be mounted. This has not so far been done.

76. The plaintiff did not in these applications give any hint as to the way in which he might seek in due course to overcome the effect of the Limitation Act pleaded against him. I accept that on one view the present circumstances are not the place to determine that issue. That notwithstanding, I presently have no evidence or submissions from the plaintiff that informs the prospect that the Limitation Act difficulty might be overcome. I also have no understanding or appreciation of why, inconsistently with his present allegations, the plaintiff clearly cooperated over many years with his wife in the use of the loan monies, apparently to their joint advantage, but decided ten years later to challenge what she did. However, having regard to the view I have formed about the plaintiff’s ability to demonstrate loss, there is no merit in postponing or prolonging proceedings that appear doomed to fail for want of commencement within time, against the slim prospect that there may be an explanation for the delay.

77. I have referred below to the fact that the plaintiff would not appear to have suffered any loss. So far as his claim in negligence is concerned, damage is the gist of the action. Even accepting that Ms Jackson negligently breached some as yet unarticulated duty to the plaintiff when attesting a signature upon a mortgage over his property, I cannot identify any loss that flowed as a result.

78. In my view the plaintiff’s proceedings cannot succeed against Ms Jackson. It appears to me in relation to the proceedings against Ms Jackson alleging fraud that this is so because the facts do not support the claim and the plaintiff has suffered no loss and that no reasonable cause of action is disclosed in the proceedings against her pleading negligence as the claim is either statute barred or because the plaintiff has suffered no loss. The proceedings against Ms Jackson should be dismissed.

The claim against the Bank

79. In a letter dated 16 November 2015, the solicitor for the Bank sought particulars from the plaintiff’s solicitor concerning various paragraphs of the amended statement of claim. The questions and answers remain relevant notwithstanding the filing of the further amended statement of claim. The following question and answer should be noted:

“5.    With respect to paragraph 11G (ii) please:

a.    confirm whether your client alleges that NAB had notice of the fraud.

b.    if it is alleged that NAB did have notice of the fraud, please identify how NAB was put on notice of the fraud, whether such notice is said to be actual or constructive, and the facts, matters and circumstances surrounding NAB’s alleged notice of the fraud.

c.    identify the alleged wrongdoing on NAB’s part.”

80. The plaintiff’s solicitor replied by email dated 4 March 2016 in the following terms:

“5.    The plaintiff relies on the pleading in the further amended statement of claim. The effect of the allegations is that the NAB did not take the usual prudent and proper steps that it would take in seeking mortgage security. The plaintiff otherwise relies on the pleading.”

81. Neither in his pleadings nor particulars, nor in his written or oral submissions on these applications has the plaintiff been able to identify any legitimate basis for the claim he makes concerning the fraudulent conduct of the Bank. Ms Jackson was not the Bank’s agent. Even if she had committed a fraud upon the plaintiff, he has not demonstrated any arguable case that would fix the Bank with the consequences of that fraud. The Bank’s internal procedures or “best practice” approach to dealing with its customers is not germane to the present dispute. It is in that context important to note that the plaintiff does not seek to impugn the mortgage upon the basis that it was not explained to him, that he was mistaken about its terms or that he entered into it as the result of some inequality in bargaining power. Far from that, the plaintiff says that he did not sign the mortgage at all and was unaware that it had been executed or registered. Even if that is accepted, the circumstances that would support his claim to set aside the Bank’s otherwise indefeasible title acquired upon registration of the mortgage would have to include facts that showed that the Bank proceeded to registration having committed a fraud upon the plaintiff or that it had knowledge that someone else had done so. As far as I can determine, the plaintiff has not done this and cannot do so.

82. More fundamentally, however, is the fact that the plaintiff has not suffered any loss as the result of the registration of the mortgage upon his title. This is not a case where the plaintiff’s wife, for example, secured the grant of a mortgage and the advance of funds into an account in her name alone, or to the benefit of a third party. Circumstances such as those would clearly support a claim of loss. In the present case, however, the two advances for which the Bank’s mortgage is a registered security were paid to the plaintiff, or what is the same thing, into an account in which he had a joint interest.

83. It is instructive to recall the plaintiff’s evidence concerning the destination of the loan monies from the Bank. On 3 August 2016, the plaintiff swore an affidavit, filed in these proceedings on 26 August 2016. It was originally filed notably in relation to the plaintiff’s wife’s application to have the issue of damages determined in advance of the issue of liability. It was also relied upon by him in response to the present applications. Relevantly for present purposes, the plaintiff says that if the Bank advanced the subject loan monies in the amounts in question into an account that he held jointly with his wife, he did not know of it. For example, in paragraph 14 the plaintiff says:

“14.    For reasons I come to and set out in this affidavit, I never knew of the account xxxx xx xxx 7376. I deny ever having opened such an account or signing an application that it be opened.”

84. The plaintiff makes other statements about this account in similar terms elsewhere in this affidavit. For example, paragraph 33 is as follows:

“33.    From page A1 which refers to the payout of $420,000 under the loan account number xx xxx 6797, other than the payment of $1,320 for fees and charges, the whole of the loan was paid into the account xxxx xx xxx 7376 which was a flexi loan account, up to the date of the making of the payment. From the date of the payment into this account, the account then went into credit. $170,000 was then taken from it, and the balance was reduced to zero. I deny I received any benefit from this account. I did not know of it.”

85. It is also instructive to observe that the plaintiff makes no claim in these proceedings to the effect that this account, or indeed any accounts, was opened improperly or without his knowledge or agreement, or in some other way that gives rise to a remedy against the Bank. It follows that even if the plaintiff did not authorise the opening of the account, he became the beneficiary of the funds paid into it, including the use of the funds when paid out to other another account in which he had a joint interest.

86. The plaintiff seeks relief in these proceedings against his wife. On one view, she has been the orchestrator of all of the events of which he complains. If the plaintiff has suffered any loss at all, it is arguable that it was caused by her. Resolution of that question will have to await the finalisation of the plaintiff’s claims against her, or possibly the sooner determination of the current property dispute between them in the Family Court.

87. The plaintiff’s claim against the Bank is in my view liable to be dismissed on the ground that no reasonable cause of action is disclosed. The plaintiff cannot demonstrate either that the Bank committed or conspired in the fraud allegedly committed by the plaintiff’s wife and Ms Jackson or that he has sustained any loss as a result.

General

88. At my suggestion, an expert opinion was commissioned from a forensic document examiner. All parties, presumably with differing expectations, embraced that approach. That was undoubtedly because it is a live issue in the proceedings whether or not the plaintiff signed the mortgage in question. Clearly enough, if the signature were found to be his, the claims against the Bank and probably also against Ms Jackson would disappear. The claim against the fourth defendant would remain.

89. In the events that occurred, my hopeful expectation that the expert’s opinion might assist the parties to resolve the case came to nothing. Chris Anderson & Co Pty Ltd prepared a report dated 12 April 2017 in which, in general terms, it concluded that it was more probable than not that the signature on the mortgage was genuine. It goes without saying that the defendants embraced that conclusion. The plaintiff did not. Having regard to the fact that Mr Anderson has never been cross-examined on his report, and that these applications are in any event an inappropriate vehicle for making findings that lie properly in the realm of a final hearing, Mr Anderson’s views cannot be taken into account for present purposes. I have not done so.

The plaintiff’s further applications

90. The plaintiff has sought by notice of motion filed on 6 September 2016 further to amend his further amended statement of claim and to have the proceedings expedited. He relies upon his own affidavit sworn on 6 September 2016 and the affidavit of his solicitor Robert Haralovic sworn 25 May 2017. These orders are opposed.

91. The plaintiff proposes a yet further version of the statement of claim. It is in the form of the document annexed to the affidavit of Mr Haralovic.

92. The proposed amended claim still includes the allegation that the mortgage be set aside, and seeks an order for damages or equitable compensation, including under s 12GF of the ASIC Act, and in that respect suffers from the same vices as the current pleading. It further includes a proposed order for an indemnity, but the legal and factual basis for such a claim is not specified. There is no contractual indemnity pleaded.

93. Despite the (as yet untested) findings of Mr Anderson that the plaintiff signed the mortgage, he proposes to allege that the mortgage was forged by the fourth defendant. In the alternative, he proposes to allege that “by a trick” the fourth defendant caused him to sign it. Whether or not the plaintiff signed the mortgage is a matter within his knowledge. Allegations of fact cannot be made in the alternative when one of those sets of facts must be known to the party pleading it to be false. Such a pleading is embarrassing and liable to be struck out: Issitch v Worrell (2000) 172 ALR 586 at [32].

94. The claim as to the alleged requirement for the Bank to have had Ms Clemente meet with the plaintiff is proposed to be amended to suggest that the Bank was required in the course of “normal and competent course of banking practice to ensure it properly identified the plaintiff as the relevant security provider”. As with the current pleading, the source of this obligation has not been identified, and the legal consequences, even if made out, are entirely unclear.

95. Furthermore, the proposed pleading purports to allege that by reason of the fact that the Bank did not meet with the plaintiff or discuss the mortgage or “Loan Agreement”, the Bank did not enter into a loan agreement with the plaintiff. This does not follow. That paragraph goes on to allege that the Bank did not enter into a loan agreement with the plaintiff because he never signed one, or if it is found that he did, that it was pursuant to a “trick” of the fourth defendant. This allegation is embarrassing, for the reasons already discussed.

96. Contrary to the plaintiff’s submission, the proposed pleading does not make only minor changes to the existing claim. It is a fundamental departure from the claim that has been filed, in that it alleges that the mortgage must be set aside for securing nothing on the basis that the “underlying loan agreement” was forged. There were two loan agreements for which the mortgage was used as security, one dated 24 January 2005 for the advance of $240,000 and one dated 18 August 2005 for the advance of $420,000. The proposed pleading does not identify which of the two loan agreements is alleged to have been forged. The current pleading does not refer to the underlying loan agreements, let alone suggest that either of them was forged.

90. In the alternative to the claim included in the further amended statement of claim at paragraph 11H that the mortgage is defeasible, the plaintiff proposes to allege that it is susceptible to being set aside and as being of no legal consequence, force or effect, securing no indebtedness on the part of the plaintiff, because the “Loan Agreement” that supports it is not the plaintiff’s document. The plaintiff then proposes to allege that because of this, and because the mortgage is also not his document, it is ineffective in creating a security over his property because it purports to create a secured borrowing in favour of the bank concerning a loan that is not his.

91. The Bank contends that this part of the pleading is liable to be struck out for several reasons. First, the plaintiff does not identify which of the two relevant loan agreements is alleged to have been forged. (On Mr Anderson’s findings, the original loan agreement for $240,000 was signed by the plaintiff. If the plaintiff accepts this, or it is otherwise established, the mortgage would secure those monies, and any argument as to the enforceability of mortgages where the underlying loan agreements have been forged falls away.) Secondly, it follows that if the plaintiff signed the mortgage, he must have understood that it secured the advance of some monies. Thirdly, and fundamentally, the plaintiff nevertheless received and benefitted from the funds advanced under both loan agreements.

92. Mr Norrie intimated that the proposed pleading may in fact itself require some amendment or revision. He did not elaborate upon the reason for this or what the next version of the statement of claim might look like.

93. In my opinion, the plaintiff has not established any good reason why he should be given another chance to formulate a reasonable cause of action known to the law. His current pleading does not do so. His proposed pleading is similarly doomed.

94. Having regard to my conclusions, it is unnecessary to consider the plaintiff’s application for expedition.

Conclusions and orders

102. It follows that the Bank and Ms Jackson are entitled to the relief that they seek. Accordingly, I make the following orders:

1. Dismiss the proceedings against the first defendant and the third defendant with costs.

2. Dismiss the plaintiff’s application to replead.

**********

Decision last updated: 21 July 2017