Westpac Banking Corporation v Davey - [2016] WASC 316

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: WESTPAC BANKING CORPORATION -v- DAVEY [2016] WASC 316

CORAM: ACTING MASTER STRK

HEARD: 19 SEPTEMBER 2016

DELIVERED : 4 OCTOBER 2016

FILE NO/S: CIV 1027 of 2016

BETWEEN: WESTPAC BANKING CORPORATION
Plaintiff
AND
JOHN WALTER DAVEY
Defendant

Catchwords:

Summary judgment - Application for possession of four properties mortgaged by the defendant to the plaintiff - Turns on own facts

Legislation:

Nil

Result:

Order for possession made

Category: B

Representation:

Counsel:

Plaintiff: Mr B C Smith
Defendant: In person

Solicitors:

Plaintiff: Gadens Lawyers
Defendant: In person

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

Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] Vic Law Rep 47; [1947] VLR 332
Eng Mee Yong v Letchumanan [1980] AC 331
Esanda Finance Corporation Ltd v Spence Financial Group Pty Ltd [2006] WASC 177
ING Bank (Australia) Ltd v Wilson [2013] SASC 6
Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki SMI (Unreported, WASC, Library No 920512, 12 October 1992)
Maksacheff v Commonwealth Bank of Australia (No 2) [2016] NSWSC 1109
National Australia Bank v Norman [2012] VSC 14
NMFM Property Pty Ltd v Citibank Ltd (No 10) [2000] FCA 1558
St George Bank v Hammer (No 2) [2015] NSWSC 953
Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598
Westpac Banking Corporation v Mason [2011] NSWSC 1241
Westpac Banking Corporation v McLean [2012] WASC 182
White v Johnston (1886) 8 ALT 53

ACTING MASTER STRK: By chamber summons filed 24 May 2016 the plaintiff (the Bank) seeks summary judgment.
The Bank's claim relates to three loan agreements entered into in June and July 2009 between the Bank and the defendant (Mr Davey). The Bank claims as follows.

The first loan agreement

On or about 12 June 2009, the Bank and Mr Davey entered into a written loan agreement (the first loan agreement), pursuant to which:
(a)Mr Davey borrowed $384,000 from the Bank;
(b)Mr Davey's obligations under the first loan agreement were secured by a first registered mortgage granted in favour of the Bank over a property described as 8 Rainsworth Gardens, Heathridge (the first property), which mortgage was registered on 30 July 2009; and
(c)the Bank advanced $384,000 to Mr Davey on or about 29 July 2009.

The second loan agreement

On or about 12 June 2009, the Bank and Mr Davey entered into a further written loan agreement (the second loan agreement), pursuant to which:
(a)Mr Davey borrowed $90,000 from the Bank;
(b)Mr Davey's obligations under the second loan agreement were secured by a first registered mortgage granted in favour of the Bank over a property described as Lot 22 Great Southern Highway, Broomehill (the second property), which mortgage was registered on 30 July 2009, together with a first registered mortgage granted in favour of the Bank over a property described as Lot 23 Great Southern Highway, Broomehill (the third property), which mortgage was also registered on 30 July 2009; and
(c)the Bank advanced $90,000 to Mr Davey…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] WASC 316
Decision Date: 4 OCTOBER 2016

CaseChat Overview and Summary

In the case of Westpac Banking Corporation v Davey, the plaintiff, Westpac Banking Corporation, sought summary judgment against the defendant, Mr. Davey, for possession of four properties mortgaged by Mr. Davey to the Bank. The dispute turned on the facts of the case, with Mr. Davey raising various defences in opposition to the Bank's claim. The court had to determine whether Mr. Davey's defences had any merit, and if not, whether summary judgment was appropriate.

The primary legal issue was whether Mr. Davey's defences, including the 'securitisation defence' and a claim that he had discharged his indebtedness through promissory notes, had any prospect of success. The court also had to consider whether the Bank's agent, Ms. Yvette Fernandez, had misled Mr. Davey and the Bank, potentially giving rise to a complete defence. The court found that Mr. Davey's defences were unlikely to succeed. The securitisation defence was deemed doomed to fail, following the precedent in Westpac Banking Corporation v McLean. Furthermore, the delivery of promissory notes to the Bank did not discharge Mr. Davey's liability under the mortgage and loan agreement. The court also rejected Mr. Davey's claim that the Bank's agent had misled him, finding that the evidence did not support this allegation.

The court concluded that Mr. Davey's defences were unlikely to succeed and granted summary judgment in favour of Westpac Banking Corporation. The court ordered that the Bank be entitled to possession of the four properties, and that Mr. Davey pay the Bank's costs associated with the application. This decision highlights the importance of ensuring that all contractual obligations are met and the potential consequences of failing to do so.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Discovery for such purpose is futile as the 'securitisation defence' raised by Mr Davey is doomed to fail. Securitisation would not provide Mr Davey with a viable defence to the Bank's claim for the reasons set out in Westpac Banking Corporation v McLean.[10] In the affidavit of Mr Davey sworn on 21 March 2016, Mr Davey puts forward an alternative defence in the following terms:A Declaration that Defendant herein did discharge all indebtedness to the Plaintiff by means of four discrete Promissory Notes duly issued to and acknowledged by the Plaintiff corporation as received, without more.[11][11] Affidavit of John Walter Davey sworn on 21 March 2016 [13]. Mr Davey says that he delivered four promissory notes to the Bank. The affidavit evidence filed on behalf of the Bank does not deal with the issue. In any event, the delivery of a promissory note to a bank cannot of itself discharge any liability that a borrower has to the bank under a mortgage and a loan agreement, including in circumstances where the promissory note is not returned nor expressly rejected by the bank.[12] This defence is also doomed to fail. Mr Davey alleges that the Bank's agent materially misled the Bank and him on 'several issues germane to the formation of any Contract before execution of same'[13] and falsified a 'crucial fact in a forged document' regarding Mr Davey's earnings.[14] Mr Davey says that the conduct of the Bank's agent gives rise to a complete defence to the Bank's claim against him. It is useful to briefly explain the circumstances by which Mr Davey became a customer of the Bank. The agent referred to by Mr Davey is Ms Yvette Fernandez of Loancom Aust Pty Ltd (the Broker), who submitted Mr Davey's loan applications to the Bank. Mr Cannalonga deposes to the Bank and the Broker having engaged in communications from 4 May 2009 in relation to loans sought by Mr Davey.[15][15] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [9] ‑ [14]. From the documents annexed to the affidavit of Mr Cannalonga sworn on 15 August 2016, it appears that two five page documents titled 'Westpac Introducer Online Application Pack' were completed, signed by Mr Davey and submitted by the Broker to the Bank on 4 May 2009, together with supporting documents including a supporting document checklist completed by the Broker.[16][16] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [9], and annexure 'DC6'. One of the supporting documents submitted to the Bank was a letter from TeleSecure Ltd dated 21 April 2009. TeleSecure Ltd was Mr Davey's employer, and the letter relevantly stated that Mr Davey earned in excess of net £80,000 per year.[17][17] Affidavit of Domenico Cannalonga sworn on 15 August 2016, and annexure 'DC6' at page 852. Mr Cannalonga deposes to the Bank having received the applications and then having engaged in correspondence with the Broker in May and early June 2009.[18] Additional information was provided to the Bank, which included a second letter from TeleSecure Ltd dated 25 May 2009. The second letter was faxed by the Broker to the Bank on 25 May 2009. The second letter differed from the first letter from TeleSecure Ltd in that it also referred to Mr Davey's annual gross income. The second letter stated that Mr Davey's annual gross income was £126,000 and his net annual income was £80,000.[19][18] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [10] ‑ [13], and annexures 'DC7' ‑ 'DC9'.[19] Affidavit of Domenico Cannalonga sworn on 15 August 2016, annexure 'DC9'.