Talbot-Butt v National Australia Bank

[2001] QSC 249

SUPREME COURT OF QUEENSLAND

CITATION:

Talbot-Butt v. National Australia Bank [2001] QSC 249

PARTIES:

JUDITH MARY TALBOT-BUTT (Respondent/Plaintiff)
v
NATIONAL AUSTRALIA BANK LIMITED
ABN 12 004 044 937 (Applicant/Defendant)

FILE NO/S:

S 802/99

DIVISION:

Supreme Court

PROCEEDING:

Civil Application

ORIGINATING COURT:

Supreme Court Townsville

DELIVERED ON:

14 May 2001

DELIVERED AT:

Townsville

HEARING DATE:

8 May 2001

JUDGES:

Cullinane J

ORDER:

That the Defendant’s counterclaim be excluded from the Plaintiff’s claim pursuant to rule 182 of the Uniform Civil Procedure Rules.
That the Defendant as and from 30 June 2001 recover possession of Lot 1 on RP 701 889 County of Elphinstone, Parish of Coonambelah, title reference 21011067.
That the Respondent/Plaintiff pay the Applicant/Defendant’s costs of and incidental to these proceedings to be assessed.

CATCHWORDS:

SUMMARY JUDGMENT – whether material raises defence of estoppel or relief under s. 52 Trade Practices Act 1974
DISCRETION – whether summary judgment should be denied on grounds of delay

Land Title Act 1994, s. 78(2)
Trade Practice Act 1974, s. 52
Uniform Civil Procedure Rules, r. 182, 292(2)
Commercial Bank of Australia Limited v. Amadio (1982-1983) 151 CLR 447
Garcia v. National Australia Bank Ltd (1998) 194 CLR 295
Tollerman & Co Pty Ltd v. Nathans Merchandise (Victoria) Pty Ltd (1956) 98 CLR 93

COUNSEL:

G. Sheahan for the Applicant/Defendant
D. Turnbull for the Respondent/Plaintiff

SOLICITORS:

Mallesons Stephen Jaques for the Applicant/Defendant
Jeffrey Dillon & Associates for the Respondent/Plaintiff

1. The Applicant/Defendant seeks an order pursuant to rule 182 of the Uniform Civil Procedure Rules that its counterclaim be excluded from the Plaintiff’s claim. The Defendant also applies for summary judgment in the proceedings on the counterclaim seeking an order that it recover possession of certain land as mortgagee pursuant to s.78(2) of the Land Title Act 1994 as amended.

1. Proceedings were instituted by the Plaintiff against the Defendant seeking declaratory and injunctive relief.  The Plaintiff seeks a declaration, the effect of which is that the Defendant does not have the right as mortgagee to exercise power of sale pursuant to two mortgages granted by the Plaintiff over certain land in Townsville.  She also seeks orders restraining the Defendant from exercising any such power of sale. 

1. The basis of the Defendant’s claim against the Plaintiff can be summarised as follows.

1. The Plaintiff granted the first and second mortgages over the property in July 1978 and August 1993 respectively.

1. The Plaintiff is a director and shareholder of a company Far North Quilting Services Pty Ltd to which the Defendant has advanced monies.  The details of the loans appear in the affidavit of Jonathan Glenn Sennitt described as a corporate lawyer employed by the Defendant.

1. The Plaintiff guaranteed pursuant to some 11 contracts of guarantee and indemnity the repayment by the company to the bank of the monies advanced.  The dates of these guarantees also appear in Mr Sennitt’s affidavit.

1. In most but not all instances the guarantees were limited in amount.

1. Mr Sennitt also deposes to the company’s default under the agreements pursuant to which the Defendant advanced monies to the company.  The affidavit also deposes as to the relevant notices having been given.

1. None of the above matters are  in dispute. 

1. The guarantees were given between March 1989 and December 1998.

1. The Plaintiff seeks to impugn the last of these guarantees upon the grounds of unconscionable conduct on the part of the Defendant relying upon the principles to be found in cases such as the Commercial Bank of Australia Limited v Amadio (1982-1983) 151 CLR 447 and Garcia v National Australia Bank Ltd (1998) 194 CLR 295.

1. The conduct which is relied upon can  in summary be stated as being statements made by the relevant officer of the bank concerned, Mr Austin, that unless the guarantee was signed the bank would not approve proposed new finance arrangements and the company would be left without proper capital to continue its business. It is alleged  that Mr Austin was aware at the time that he conveyed this to the Plaintiff that the company was in financial difficulties in part because of the bank’s restrictive attitude to access by the company to finance.  The Plaintiff says that she understood from what she had been told by Mr Austin that the company was in a position where it would be able to continue trading if she provided the guarantee and the funds were advanced whereas in fact  the true position was that the company was already in serious difficulty, partly because of the bank’s actions and that she was not informed of this.  There was no affidavit from Mr Austin.

1. None of the earlier guarantees were impugned. 

1. It is accepted by the Plaintiff that if the Defendant is entitled to enforce any of the guarantees the Defendant will be entitled to exercise its power of sale as mortgagee in view of the defaults made.

1. The mortgages secure payment of monies by the Plaintiff whether as principal or surety.

1. All guarantees except for the first and second contain a provision in the following terms or to the following effect:

“19.1   Despite any rule of law or equity to the contrary:

(a)        this guarantee and indemnity is additional to every other security, guarantee, indemnity, right and remedy we hold now or later;  and

(b)        this guarantee and indemnity and our rights and remedies under it and any other security, guarantee, indemnity, right, remedy or instrument which we have at any time continue to exist separately and do not merge with or affect each other".

1. In a second affidavit of the Plaintiff which was read by leave, she deposes to a conversation that she had with the Defendant’s officer with whom she and the company dealt prior to Mr Austin’s involvement in the matter.  This conversation took place whilst her husband was still alive.  He passed away in May 1997.

1. The Plaintiff deposes to the following:  “My husband would normally deal with Mr Griffin.  I recall that I was present when my late husband asked Mr Griffin why we had to keep signing these documents when we had already signed similar documents on previous occasions.  I recall that Mr Griffin informed my husband that each time loan arrangements were changed or increased new guarantees had to be raised as the figures owing to the bank would be different and that the new guarantee made the previous one null and void.  I recall him saying that the bank would only regard the latest guarantee document as being the valid guarantee.  I am quite clear that these statements were made by Mr Griffin to my husband in my presence".

1. It is contended that this evidence raises an issue as to whether any of the guarantees prior to guarantee number 11 remained in effect and capable of enforcement.

1. The Plaintiff in a reply and answer has pleaded that upon the monies originally secured by the guarantee having been repaid or subsumed in subsequent loan facilities granted by the Defendant to the company such guarantees have been discharged or alternatively that the execution of a further guarantee constituted the discharge of the earlier guarantee or constituted a waiver of the Defendant’s rights under it.

1. There is no allegation in the pleading that the earlier guarantees had been discharged by an oral agreement to do so nor is the conversation to which Mrs Talbot-Butt deposes capable in my view of being regarded as constituting a contract between the parties to this effect. (The contract of guarantee is required to be in writing but the authorities support the termination of a contract required to be in writing by an oral agreement.  See Tollerman & Co Pty Ltd v Nathans Merchandise (Victoria) Pty Ltd (1956) 98 CLR 93.

1. Rather the matter was put upon the basis that such statements would arguably constitute the basis for an estoppel against the Defendant in respect of the earlier guarantees or that such conduct might provide a basis for relief under s.52 of the Trade Practices Act.

1. The Plaintiff does not depose to having been induced by any such statements to do or not to do anything or to have suffered any detriment as a result of acting on them.

1. It is not made clear when the statement was made in relation to the execution of the guarantee.  If it was made after signature it could not have any relevance to any of the possible defences mentioned in argument.

1. Putting aside any question of differing terms or limits in the guarantees executed it would not be a matter of any real significance to a surety whether his or her liability arose under one rather than another guarantee.  In the absence of evidence that statements of the kind deposed to caused the Plaintiff to act or not to act in a particular way, it does not seem to me that the evidence raises any issues of the kind contended for.

1. Further difficulty with the evidence is that it does not identify when in relation to the various guarantees that have been executed the statements are said to have been made.  It was of course prior to the death of Mr Talbot-Butt and could not be relevant to some of the guarantees.  However a number of guarantees had been executed prior to his death. 

1. Whilst arguably such statements if they induced the Plaintiff and her husband to enter into a further guarantee might constitute the basis of an arguable defence in relation to the earlier guarantees, it is difficult to see how this could be so in relation to later guarantees containing the clause set out in paragraph 16 of these reasons or a clause to the same effect.

1. Assuming then that an arguable defence is raised in relation to the last of the guarantees (something about which I do not think it is necessary to reach any firm conclusion) the material does not in my view raise any arguable defence in relation to the earlier guarantees.

1. Some reliance was placed by the Plaintiff upon what is said to be substantial delays by the Defendant in making the application.

1. The proceedings were instituted in October 1999 and a consent order permitting the Plaintiff to continue to reside in the dwelling on the mortgaged land was made on 27^th October 1999.  It was not until 4^th December 2000 that a notice of intention to defend was given and this application was made on 22^nd January this year.

1. There is no evidence before me about these matters but I was informed by counsel for the Defendant that the matter was left in abeyance for some time as a concession to the Plaintiff and so that she would have a home in which to reside.

1. The Plaintiff did not accept this as being correct and as I have said, there is no evidence before me on the subject.

1. An application of this kind can be made at any time and delay does not have the same disqualifying effect that it had under the previous rules.

1. Nonetheless delay may, in some circumstances, constitute an important consideration in the exercise of the discretion which rule 292(2) confers.

1. I do not think however that this consideration should lead to the withholding of judgment in the present case.  The delay has advantaged the Plaintiff in the sense that she has continued to reside in the dwelling on my understanding of things and it is not suggested that any disadvantage flows from the delay.  Assuming as the Court must, that the Plaintiff has no evidence at trial upon which to base a defence apart from that deposed to here, it is plain that the Defendant would be entitled to judgment and that to allow the matter to proceed to trial would involve substantial and pointless expense.

1. I am satisfied that the appropriate course to take is to give judgment for the Defendant on the counterclaim.

1. It was common ground that in the event that the Defendant was entitled to judgment, the Defendant’s right to possession should be postponed until the end of June.  The Plaintiff is currently out of the country and some delays whilst appropriate arrangements would be made would seem to be inevitable and such an allowance was accepted as appropriate.

1. I make the following orders:

(a) That the Defendant’s counterclaim be excluded from the Plaintiff’s claim pursuant to rule 182 of the Uniform Civil Procedure Rules.

(b)        That the Defendant as and from 30 June 2001 recover possession of Lot 1 on RP 701 889 County of Elphinstone, Parish of Coonambelah, title reference  21011067. 

(c)        That the Respondent/Plaintiff pay the Applicant/Defendant’s costs of and incidental to these proceedings to be assessed.