United States of America v DIPPIE
[2000] WADC 180
•18 JULY 2000
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: UNITED STATES OF AMERICA -v- DIPPIE [2000] WADC 180
CORAM: MACKNAY DCJ
HEARD: 22 OCTOBER 1999, 27 APRIL, 10 MAY, 22 JUNE 2000
DELIVERED : 18 JULY 2000
FILE NO/S: CIV 241 of 1997
BETWEEN: UNITED STATES OF AMERICA
Plaintiff
AND
JOHN M DIPPIE
Defendant
Catchwords:
Practice - Western Australia - Appeal from refusal of Registrar to order summary judgment against defendant in respect of sums advanced under promisory notes - Rules of Supreme Court O 14 r 3 - Plaintiff entitled to summary judgment
Legislation:
Nil
Result:
Appeal allowed
Representation:
Counsel:
Plaintiff: Mr M J McPhee
Defendant: Mr A A Jenshel on 22.10.99
Solicitors:
Plaintiff: Michell Sillar McPhee
Defendant: Nil
Case(s) referred to in judgment(s):
Miliangos v George Frank (Textiles) Ltd (1976) AC 443
Rahim v Crawther (1996) 17 WAR 559
Case(s) also cited:
Australian Can Company Pty Ltd v Levin & Co Pty Ltd (1947) VLR 332
Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591
British Linen Co v Drummond (1830) 10 B & C 903
Central Electricity Board v Halifax Corporation (1962) 3 All ER 915
Coburn v Colledge [1897] 1 QB 702
Cordinup Resource Pty Ltd v Terana Holdings Pty Ltd, unreported; FCt SCt of WA; Library No 970739; 23 December 1997
Do Carmo v Ford Excavations Pty Ltd (1984) 58 ALJR 287
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Fergusson v Fyffe (1841) 8 Cl & Fin 121
Huber v Steiner (1835) 2 Bing NC 202
Jacka Nominees Pty Ltd (In Liquidation) & Anor v Edwards Karwacki Smith & Co Pty Ltd & Ors, unreported; SCt of WA; Library No 920512; 12 October 1992
Leroux v Brown (1852) 12 CB 801
Letang v Cooper (1965) 1 QB 232
McKain v R W Miller & Co (SA) Pty Ltd (1991) 174 CLR 1
Pedersen v Young (1954) 110 CLR 162
Phillips v Eyre (1870) LR 6 QB 1
Reeves v Butcher (1891) 2 QB 509
Ronex Properties Ltd v John Laing Corporation Ltd [1982] 3 All ER 961
Stevens v Head (199) 176 CLR 433
MACKNAY DCJ:
Introduction
This action, which has to date made a desultory progress through the Court, concerns a claim by the plaintiff against the defendant originally pleaded as being for:
"(a)the amount of US$41,605.81 being the principal and capitalised interest as at 30 June 1995;
(b)interest pursuant to clause 2 of the loan agreement from 30 June 1995 to the date of judgment; or alternatively
(c)interest on the principal pursuant to s 32 of the Supreme Court Act 1932 (WA) as amended;
(d)cost."
As to the basis of the claim it was alleged that the defendant was a student at Palmer College of Chiropractic in Davenport, Iowa, in the United States of America, from 1986 to 1989, and that to finance his studies the defendant applied for and was given four education assistance loans, those being made available through the plaintiff.
It is common ground that on each occasion the defendant completed and signed an application for the loan which specified "Bank One" of Merrillville Indiana as lending institution, and also a promissory note, after which a cheque was drawn payable to his order and that of his college.
It is also common ground that the loans have never been repaid.
The plaintiff alleges that each of the promissory notes was subsequently assigned by Bank One to an entity known as the Student Loan Marketing Association and that demand was made by that body on 22 February 1991 on the defendant. It is alleged that each of the notes was later assigned to the plaintiff.
The plaintiff then brought this action.
On 12 July 1998 an application for summary judgment was made, and on 3 June 1999 a registrar refused the same.
This appeal was then instituted, and after a hearing on 22 October 1999 was adjourned to give the plaintiff an opportunity to adduce further evidence in support of the application.
The matter then came on again on 27 April 2000, but the defendant failed to appear, so that it was adjourned to 11 May 2000, when an application for a further adjournment was made on behalf of the defendant, the defendant's then solicitors having only just been instructed.
The matter was further adjourned to 22 June 2000. In the meantime the defendant's solicitors applied to a registrar for, and a declaration was made that they had ceased to act. Prior to the hearing the defendant then returned by facsimile to the Court a copy of the notice of the hearing date with an endorsement which relevantly reads:
"I will not be represented on 22 June. I am no longer a resident of Western Australia. I have left Australia permanently. If you require any further info you may fax (number supplied)."
On 22 June 2000 the matter then proceeded in the absence of the defendant.
Application
The plaintiff's claim was verified by an affidavit filed on 12 August 1998, to which were annexed copies of each loan application and each promissory note.
Relevant provisions of each promissory note included the following:
"Interest
1.Beginning on the day the loan is disbursed and ending when the repayment period commences, interest shall accrue. Payment of the interest accruing before the beginning of the repayment period may be postponed until the date upon which repayment of principal is required to begin or to resume. Interest which has accrued and is not paid may be added to the principal sum of this Note not more frequently than every six (6) months. Beginning when the repayment period commences, interest shall accrue and be paid as set forth in the Repayment Schedule which the lender shall establish and provide to me.
2.Interest shall accrue and be payable at an INTEREST RATE which is equal to a variable rate which is calculated by the Secretary of the Department of Health and Human Services for each calendar quarter and computed by determining the average of the bond equivalent rates for the ninety-one day US Treasury Bills auctioned during the preceding quarter, plus 3 per cent rounding this figure up to the nearest 1/8th of 1 per cent.
3.Any change in the INTEREST RATE will affect the payment amounts, the number of payments, or the amount due at maturity.
…
General
The terms of this Note shall be construed according to the Law (42 USC 294 et seq.) and the Federal regulation (42CFR Part 60) governing the administration of the Health Education Assistance Loan (HEAL) Programme, copies of which are on file with the holder of this Note.
…
Default
In the event of my default on this loan, the entire unpaid loan including interest due and accrued shall, at the option of the holder of this Note, become immediately due and payable."
In an affidavit filed on 19 April 1999 Ms Brenda Jane Frank, a senior attorney in the plaintiff's Department of Health and Human Services at Rockville Maryland, set out what was said to be the relevant part of the statute applicable to each promissory note:
"Notwithstanding any other provision of Federal or State law, there shall be no limitation on the period within which suit may be filed, a judgment may be enforced, or an offset garnishment, or other action may be initiated or taken by the Secretary, the Attorney General, or any other administrative head of another Federal agency, as the case may be, for the repayment of the amount due from a borrower on a loan made under this subpart [Subpart I - Insured Health Education Assistance Loans to Graduate Students] that has been assigned to the Secretary under subsection (b) [subrogation to the United States following payment to a lender on a HEAL default claim.] 42 U.S.C. § 292f(i)."
Ms Frank said that the "effect of the Statute is that neither Federal nor State statutes of limitations apply to actions brought under the HEAL program. Further this Federal law will supersede any State statute of limitations which may otherwise have been applicable".
It was further said that the "Supreme Court of the United States has held that provisions regarding limitations in a statute creating a new legal liability are conditions directly attached to the right to sue, and to be treated as part of that right". A number of authorities were then cited and annexed in support of that proposition.
The defendant swore an affidavit in opposition to the plaintiff's application on 8 October 1998, and admitted each loan together with the application and promissory note signed in relation to each, but said he was not aware of an assignment to the Student Loan Marketing Association and said he could not recall receiving the repayment schedule subsequent demands for payment, or notice of an assignment to the plaintiff.
The defendant then said that "I deny that I have no defence to this action and state that the claim of the plaintiff is time barred as limitations commenced from 25 April 1990 when it is alleged that the first payment was due and not made. The plaintiff filed his (sic) summons on 28 January 1997, well beyond the six year limitation period".
Appeal
The plaintiff submitted that the proper law which governs each loan agreement is the law of the United States and not that of Western Australia.
Given the nature of each agreement and the circumstances relevant to each I think that is correct: see Chitty 26 ed par 2167, 2168.
The defendant through Mr Jenshel accepted it. It was the submission of the defendant, however, that the limitation issue is one of procedure, and hence the local rule or law of the forum, the lex fori, is always applicable, and is therefore applicable here.
As this was a claim in contract, and as the plaintiff alleged the payments fell due more than six years before the issue of the writ, and given s 31(1)(c) of the Limitation Act 1935 (WA), the claim was time barred, the defendant said.
As to those submissions, it is the case that the law of the forum will apply to procedural matters, and where a limitation statute merely bars a claim, as opposed to extinguishing it, that provision will ordinarily be regarded as procedural: see Rahim v Crawther (1996) 17 WAR 559, 567 per Malcolm CJ (with whom Steytler and Parker JJ agreed).
It was at that point of the argument that the application was adjourned to allow the plaintiff a further opportunity to adduce evidence as to the relevant United States law.
That the plaintiff did by further affidavit of Ms Frank, filed on 3 March 2000. In that affidavit Ms Frank said inter alia "that it is well established in the law of Indiana that 'a party may, "by express agreement or through his conduct, place himself in a position where he cannot later assert the expiration of a statute of limitation as a defense." ' Paramo v Edwards, 541 N.E. 2d 979, 980 (Ind Ct App 1989) (citing Martin v Levinson, 409 N.E. 1239, 1242 (Ind Ct App 1980) Tab C. See also, First v Byrne et al, 28 N.W. 2d 509, 513-514 (Iowa Supreme Ct 1947) ('[T]he right to interpose the statute [of limitations] as a defense is a personal privilege of the debtor which he may waive … ".
There is nothing before me to suggest that the relevant United States law is not as stated by Ms Frank in her affidavits and I accept those statements.
The position is that there is a term of each contract that the defendant could not avail himself of any limitation period, and that in any event a right of that kind might be waived, either by express agreement or by conduct. Further, an estoppel could arise where there was such an agreement.
It would thus appear that it was open to the plaintiff to plead that the defendant was unable to rely on any limitation period, and that has now been done.
In the circumstances I consider the defendant cannot rely on the expiration of any limitation period to defeat the plaintiff's claim.
In relation to the other matters raised in the defendant's affidavit, which were not made the subject of any formal submissions, I consider that a claimed absence of recollection of receipt of relevant documents does not raise any triable issue.
I therefore consider the plaintiff is entitled to summary judgment against the defendant.
Form of judgment
As stated, the plaintiff's claim was made for an amount denominated in US dollars, whilst interest was sought pursuant to the agreement itself.
As to the first, judgment can be entered for an amount denominated in foreign currency: Miliangos v George Frank (Textiles) Ltd (1976) AC 443.
It was not suggested by the defendant that an order of that kind should not be made here, and no reason is apparent to me.
The usual form of such an order is said to be for the amount expressed in foreign currency or its dollar equivalent at the time of payment, that time being regarded as the date enforcement proceedings are taken or are authorised in terms of local currency: The Supreme Court Practice 1999 par 42/1/5.
In relation to interest the Supreme Court Act 1935 (WA) s 32, which permits claims for interest to be made pursuant to it, provides in subsection (3) that the section does not apply to any debt upon which interest is payable as of right, whether by virtue of an agreement or otherwise.
No issue as to capitalisation would therefore appear to arise, and none has been raised on behalf of the defendant.
There would appear to be no reason therefore why the plaintiff ought not have judgment in the amount claimed.
That, according to the further affidavit of Mr Blum of 10 May 2000, was as at 3 May 2000 the sum of US$63,295.63, with interest further accruing in an amount of $14.64 per day, the relevant interest rate being 8.75 per cent per annum.
Conclusion
The plaintiff is entitled to summary judgment against the defendant in a sum to be calculated in the above manner.
I will hear from counsel as to the appropriate amount.
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