Stanich v Bankwest a Division of Commonwealth Bank of Australia [No 2] - [2020] WASC 152

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   STANICH -v- BANKWEST A DIVISION OF COMMONWEALTH BANK OF AUSTRALIA [No 2] [2020] WASC 152
CORAM:   ALLANSON J
HEARD:   ON THE PAPERS
DELIVERED          :   12 MAY 2020
FILE NO/S:   CIV 3082 of 2018
BETWEEN:   GARY MICHAEL STANICH
Plaintiff

AND

BANKWEST A DIVISION OF COMMONWEALTH BANK OF AUSTRALIA
Defendant

Catchwords:

Practice and procedure - Application to strike out substituted statement of claim - Where plaintiff claims 'reflective losses' - Whether pleading likely to prejudice, embarrass or delay the fair trial of the action - Turns on own facts

Legislation:

Nil

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
Defendant	:	No appearance

Solicitors:

Plaintiff	:	In person
Defendant	:	Corrs Chambers Westgarth

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

DM Drainage & Constructions Pty Ltd as trustee for DM Unit Trust t/as DM Civil v Karara Mining Ltd [2014] WASC 170
Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806
Rajski v Scitec Corporation Pty Ltd (Unreported, NSWCA, 16 June 1986)
Stanich v Bankwest [2019] WASC 357

ALLANSON J:

Background

The plaintiff, Gary Michael Stanich, commenced this action against the defendant, Bankwest, on 3 December 2018. The action has not yet progressed to the filing of a defence.
Mr Stanich's claims arise out of dealings between the Bank and three companies, Cassius Holdings Pty Ltd, Tocoan Pty Ltd, and Prodale Pty Ltd. Mr Stanich was a director and shareholder of Cassius Holdings and Tocoan from 21 December 2007, and a shareholder of Prodale from 14 September 2011. He was an employee of Prodale and Tocoan.
On 8 October 2019, on an application by the Bank, I entered judgment for the defendant on part of the claim, and struck out the balance of the statement of claim.[1]
[1] Stanich v Bankwest [2019] WASC 357.
Three particular issues were identified in the earlier judgment. First, I held that judgment should be entered on those claims that could only be claims of the companies, or claims that were for losses that were reflective of the losses suffered by the companies.[2] Second, I held that there was no arguable basis for the plea that Mr Stanich was owed a fiduciary duty by the Bank. I did not, however, strike out any claim based on breach of fiduciary duty as none was pleaded.[3] Third, the balance of the statement of claim was struck out for reasons which I summarised in this way:
None of the other claims is sufficiently pleaded to enable me to discern to what extent the claim may be a personal claim for personal losses or for relief relating to the guarantee. The pleading either does not disclose a reasonable cause of action, or may prejudice, embarrass or delay the fair trial of the action. It cannot be permitted to stand in its present form.[4]
[2] Stanich v Bankwest [102] - [103].
[3] Stanich v Bankwest [104].
[4] Stanich v Bankwest [105].
In striking out the balance of the statement of claim I commented that if Mr Stanich wished to re-plead, he must confine the plea to personal causes of action against the Bank, and to losses that are separate and distinct from those suffered by the companies and caused by a breach of duty independently owed to him. I further held that the claims currently pleaded for compensation for losses for loans and payments that Mr Stanich made to the companies, loss of asset value, and loss of income, were not losses for which he could recover.[5]
[5] Stanich v Bankwest [107].
On 22 November 2019, Mr Stanich filed a minute of substituted statement of claim in which he purported to claim for injuries caused by the actions of the Bank 'that had a personal effect on his financial position and health and well-being'.[6]
[6] Substituted statement of claim [1].
On 13 December 2019, the Bank applied for summary judgment, alternatively to strike out the substituted statement of claim.
Despite the reasons given on the Bank's first application, the three issues which I identified in the earlier statement of claim persist in the substituted pleading.
First, Mr Stanich continues to claim damages for loans he made to Prodale and Cassius Holdings, and for the payments he made for shares in Cassius Holdings and Tocoan.[7] I will not repeat what was said in the earlier judgment. Those claims cannot be maintained.
[7] Substituted statement of claim [66].
Second, Mr Stanich also persists in pleading that his guarantee to the Bank for the loans to Prodale created a fiduciary relationship owed to him by the Bank, and that the Bank, as lender, was obliged to not obtain any personal benefit at his expense as guarantor.[8] The plea is inconsistent with the relationship between lender and guarantor. Mr Stanich pleads no other facts from which, as a matter of law, a fiduciary relationship could be found. The plea based on the claim of fiduciary duty cannot stand.
[8] Substituted statement of claim [12], [18] - [19].
Third, the substituted statement of claim fails to state an intelligible plea, or to set out Mr Stanich's case with any clarity.
Mr Stanich's claim is that his damage arises from a loan given by the Bank to Prodale in relation to a property in Geraldton, and the guarantee he gave for that loan. He pleads a series of claims relating to the giving of the guarantee: a claim for breach of fiduciary duty;[9] a claim for failure to deliver services with due care and skill;[10] a claim of unconscionable conduct by 'asset lending';[11] and a contractual claim for breach of the Code of Banking Practice.[12]
[9] Substituted statement of claim [18] ‑ [19].
[10] Substituted statement of claim [15].
[11] Substituted statement of claim [24].
[12] Substituted statement of claim [27].
Mr Stanich alleges that, had the Bank not approved the loan, he would not have been asked to give a guarantee.[13] And had he not given the guarantee, the Bank may not have proceeded with the loan.[14] He further alleges that by providing the loan to Prodale, the Bank 'put the plaintiff in harm's way and caused substantial personal losses and personal trauma that lead to pain and suffering'.[15] As I understand Mr Stanich's claims, he alleges that he suffered injury as a result of Prodale's default on the loan, leading to the Bank appointing receivers to Prodale and Cassius Holdings (another guarantor). Following the appointment of the receivers, Mr Stanich suffered damage including pain and anguish, sickness, loss of esteem and prestige, and loss of ability to work leading to loss of income.[16]
[13] Substituted statement of claim [41].
[14] Substituted statement of claim [42].
[15] Substituted statement of claim [16].
[16] Substituted statement of claim [58] ‑ [59].
Mr Stanich also received a demand from the ATO for payments not made by Cassius Holdings.[17] He entered bankruptcy.[18]
[17] Substituted statement of claim [54]. I assume Mr Stanich received the notice as a director of Cassius Holdings.
[18] Substituted statement of Claim [57].
Mr Stanich also pleads a series of general allegations:
Bankwest's failure to adhere to [the Code of Banking Practice] lead to the financial demise of the plaintiff.[19]
…
The actions of Bankwest in its dealings with the Plaintiff caused the trauma and financial hardship that effectively lead to a mental breakdown and inability to function for an extended period.[20]
The effect of that trauma caused by the actions of Bankwest was that the plaintiff's social skills were diminished and destroyed.[21]
[19] Substituted statement of claim [37].
[20] Substituted statement of claim [59].
[21] Substituted statement of claim [60].
By reason of the various causes of action alleged, Mr Stanich pleads that he should be returned to the position he was in 'as if the loan contract or the guarantee had not existed'.[22]
[22] Substituted statement of claim [64].
The Bank contends that the substituted statement of claim should be struck out on the ground that it may prejudice, embarrass or delay the fair trial of the matter. That ground of challenge has been described as encompassing various failings. In DM Drainage & Constructions Pty Ltd as trustee for DM Unit Trust t/as DM Civil v Karara Mining Ltd [2014] WASC 170 at [34], Beech J said, comprehensively, that pleadings may be struck out, 'because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general'.
The substituted statement of claim suffers from all of those failing. The action could not proceed to trial (or to interlocutory steps such as discovery) on a pleading in the current terms.
As in the first summary judgment application, the inadequacy of the plea makes it difficult to properly address the claims of the Bank that specific causes of action are subject to statutory limitation periods or, in the case of the claims under the Code of Banking Practice, the limitation period for a claim in contract.
The substituted statement of claim should be struck out in its entirety. In doing so, I repeat what I said at [28] in the earlier judgment:
The plaintiff is not represented in these proceedings. I have tried to make proper allowance for the disadvantage that he suffers. But his claim is complex and he seeks a substantial award of damages. There are limits to the allowance that the court can or should make.[23]
[23] See Rajski v Scitec Corporation Pty Ltd (Unreported, NSWCA, 16 June 1986) [27]; Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806 [47].
This is only the second time that Mr Stanich has attempted to plead his claim, but he has been unable to articulate an intelligible basis on which he could obtain the relief he seeks. I will hear the parties on consequential orders, including costs, and whether (if judgment is not entered for the Bank) any application to re-plead should, in the first instance, be by ex parte application for leave.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CG
Associate to the Honourable Justice Allanson
12 MAY 2020