Westpac Banking Corporation v Angela Barrett
[2011] VSC 326
•7 March 2011
| IN THE SUPREME COURT OF VICTORIA |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
LIST A
No. 4176 of 2010
| WESTPAC BANKING CORPORATION | Plaintiff |
| v | |
| ANGELA BARRETT and others (according to the schedule attached) | Defendants |
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JUDGE: | Pagone J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 March 2011 | |
DATE OF JUDGMENT: | 7 March 2011 | |
CASE MAY BE CITED AS: | Westpac Banking Corporation v Angela Barrett & Ors | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 326 | |
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GUARANTEE – Default – Liability of guarantor.
PRACTICE & PROCEDURE – Solicitor ceasing to act – Failure to file notice – Rule 20.03(3) of Supreme Court (General Civil Procedure) Rules 2005 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C Moller | DLA Phillips Fox |
| No appearance was made for the Defendants |
HIS HONOUR:
In this proceeding Westpac Banking Corporation sues Angela Barrett as guarantor on seven finance facility agreements under which the bank provided financial accommodation to Tiedown Transport Pty Ltd as borrower.
The borrower entered into seven finance agreements with the bank in December 2008. Each of the finance agreements was secured by a separate asset and Mrs Angela Barrett and Mr Darren Barrett were guarantors under each. The borrower has defaulted under the finance agreements and the bank in this proceeding seeks to recover losses against Angela Barrett on the guarantees. The amount now claimed against Mrs Barrett on the guarantees is $550,148.49.
On 31 July 2009 Mr Glenn Aventurado demanded payment from the borrower of amounts due on five of the seven facility agreements. On 25 August 2009 he demanded from the borrower the amounts outstanding on the sixth of the facility agreements. Mr Aventurado is a collections officer with the bank whose responsibility includes coordinating the bank's activities to recover the moneys borrowed by customers and to recover under securities.
On 10 June 2010 Mr Scott Harris sent a letter of demand to Mrs Barrett for payment of the amounts from the guarantors pursuant to the guarantees she had given. That demand included a demand under the seventh facility agreement. Mr Harris is a solicitor with DLA Phillips Fox which is the firm acting for the bank in these proceedings.
Each of the seven finance agreements is in the same standard form to which have been added particulars of amounts, assets, dates and signatures relevant specifically to each. Common to all is the Memorandum of Common Provisions setting out the terms and conditions for such matters as repayment and defaults. Clause 10.2 of the Memorandum of Common Provisions provides that a guarantor must pay immediately an amount guaranteed which the borrower has not paid and that it must be paid for on demand.
The demand upon the guarantees was made upon Mrs Barrett in the letters from Mr Aventurado and Mr Harris. Clause 13.14 deals with giving notices and making demands, and relevantly provides that a demand is taken to have been made when delivered, received or left at the address of the recipient shown in a document or any other address which may have been notified to the sender.
The notice from Mr Aventurado and Mr Harris was sent to Mrs Barrett at her address as shown in each of the seven loan facility agreements in which she was identified as one of the guarantors.
The terms of clause 13.14 operates to deem receipt having occurred. She has filed a defence in these proceedings but has not admitted the allegations of service upon her of the demands under the guarantees. Proof of actual receipt by her is unnecessary in light of the terms of clause 13.14 but, in any case, it is clear that she did receive the letter of demand sent by Mr Harris and Mr Aventurado. That is established, if it was necessary to have done so, through the conversation Mr Harris had with a Mr Phillip Allwood on 16 June 2010, just six days after the letter of demand from Mr Harris was sent to her. Mr Allwood had acted for Mrs Barrett and it was he who phoned Mr Harris on 16 June 2010 saying that he was ringing on her behalf, she having received the letter of demand from Mr Harris.
The quantum now claimed by the bank totals $550,148.49. The bank relies upon clause 13.6 of the Memorandum of Common Provisions and on certificates by a manager of the bank given under that clause to prove the quantum due. Clause 13.6 of the Memorandum of Common Provisions provides that “any determination by the Lender or certificate by a Manager of the Lender will be sufficient evidence of the matter stated in it", unless the contrary is proved.
In this proceeding the bank tenders seven certificates, each relating to one of the seven facilities. It records the quantum of the loan due as at 28 July 2010 and the interest accruing thereon from that date to 7 March 2011 and in the case of two of them it identifies some part of the amount that had been repaid. In the circumstances, the bank has established its case and it is entitled to judgment as at today against Mrs Barrett in the amount of $550,148.49.
Before turning to any consequential orders to be made, I should remark upon an additional matter that arose for my consideration during the course of the hearing today. The case came on for hearing this morning at 10.00am. The solicitors on record for Mrs Barrett is the firm of McGindle Dalgleish. The person responsible for the file in that firm was Mr Andrew McGindle. This morning the proceeding commenced with no appearance made by Mrs Barrett. Her solicitor did not appear either.
A practitioner may be removed as the solicitor on record pursuant to rule 20.03 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic). Neither the firm nor any member of the firm had applied to be removed as solicitor on record until 2.15pm this afternoon. An application by a solicitor to be removed only occurred as a response to the firm being notified that I required an explanation for their non-appearance this morning. The case had been set down for trial when the firm was still acting as solicitors for Mrs Barrett and no application had been made to me or to any other judge of this Court pursuant to rule 20.03 until this afternoon.
That legal practitioners are officers of the court is not an empty statement. The court relies fundamentally upon its officers, namely legal practitioners, to perform its work. It is unacceptable for a solicitor who acted for a party to continue to appear as solicitor on record for that party and not attend court on a day set down for trial. The proper procedure is for the solicitor who no longer wishes to represent a client who is a party to a proceeding to apply for leave to be removed as solicitor acting for the party pursuant to rule 20.03(3). On 3 March 2011, two days before this trial was due to commence, Mr McGindle sent my associates a letter in which he explained that Mrs Barrett was entering into voluntary bankruptcy and that he no longer had instructions to act. He asked my associates, “In view of the above would you please advise as to any formal requirements.” It is not proper procedure for a solicitor to seek the advice of an associate of a judge about what to do.
Legal practitioners are expected to be familiar with the rules and practice of the court in which they are admitted to practice and in which they hold themselves out, usually for a fee, to do so.
The requirement in rule 20.03(3) of seeking leave is a requirement imposed upon legal practitioners in and for the administration of justice. It enables a court's work to be performed more efficiently and with confidence of the assistance of practitioners. It provides a protection to former clients and it may serve to protect the position of adversaries. This is a case where that kind of protection can be seen because the former solicitor had information to the effect that the former client may have been seeking to apply for voluntary bankruptcy. That was notified to the solicitors for the plaintiff by letter of 3 March 2011.
The letter of 3 March 2011 went on to express the author's understanding that the filing of bankruptcy would, as a result of the provisions of the Bankruptcy Act, mean that there would be a stay of these proceedings. Whatever the position may or may not have been as at the commencement of the proceeding the fact is that today the person best placed to assist this court to know whether its processes were being invoked inappropriately was the former solicitor, an officer of the court, who was recorded on the court file as the solicitor acting for the person whose voluntary bankruptcy may have been about to begin. That same person could have assisted the plaintiff to avoid incurring costs if the bankruptcy had been in fact commenced.
That is not to say that practitioners have a requirement or an obligation to undertake additional enquiries that are beyond their retainer or beyond the duty that they have to the administration of justice. It is to say no more for present purposes than that as officers of the court their primary duty is to assist the court and the requirement of seeking leave under rule 20.03(3) is a requirement in aid of that process.
It is not an onerous requirement that leave be sought. The court has a discretion to make the order, “but unless there are special circumstances which render it expedient to retain the solicitor on the record the order will generally be made as a matter of course upon proof that the solicitor has in fact ceased to act for the party and that no steps have been taken to take the solicitor's name off the record.”[1] The requirement to seek leave is a requirement that must be followed. It must be followed in the interests of the work of the court and in the administration of justice.
[1]Plenty v Gladwin (1986) 67 ALR 26, 27 (Wilson, Brennan, Deane and Dawson JJ).
In the end, the solicitor appeared before me and provided an explanation for the failure to appear this morning. The explanation was not overwhelmingly persuasive but in the circumstances of this case I shall accept it. I have given him leave to file a notice that he and his firm have ceased to act for the defendant and I shall not otherwise take steps in relation to his failure to appear this morning.
SCHEDULE OF PARTIES
| No. 4176 of 2010 | |
| BETWEEN: | |
| WESTPAC BANKING CORPORATION | Plaintiff |
| - and - | |
| ANGELA BARRETT | Firstnamed Defendant |
| PR TRUCK SALES PTY LTD | Secondnamed Defendant |
| PETER RUTZOU (ALSO KNOWN AS PETER FAULKNER RUTZOU) | Thirdnamed Defendant |
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