Westpac v Webb
[2019] VSC 180
•18 March 2019
| IN THE SUPREME COURT OF VICTORIA AT MELBOURNE COMMERCIAL COURT | Not Restricted |
S CI 2017 2770
| WESTPAC BANKING CORPORATION (ACN 007 457 141) | Plaintiff |
| v | |
| GRAEME LEE WEBB | Defendant |
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JUDGE: | Digby J | ||
WHERE HELD: | Melbourne | ||
DATE OF HEARING: | 18 March 2019 | ||
DATE OF JUDGMENT: | 18 March 2019 | ||
CASE MAY BE CITED AS: | Westpac v Webb | ||
MEDIUM NEUTRAL CITATION: | [2019] VSC 180 | ||
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APPEAL – Appeal from an Associate Judge dismissing an application to set aside judgment in default of defence and stay of execution of warrant - Promissory notes – Validity of Commonwealth and State Acts – Whether Supreme Court of Victoria is an unlawful Court – Whether Constitution Act 1975 (Vic) validly enacted - Royal Assent - Supreme Court (Civil Procedure) Rules 2015, r 77.06.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms N Papaleo | Thomson Geer |
| The Defendant | Appeared in Person |
HIS HONOUR:
In the appeal the defendant, Mr Graeme Webb (Webb) issued a Notice of Appeal dated 13 March 2019, seeking an order that the Judgment of Associate Justice Ierodiaconou dated 28 February 2019,[1] be ‘revoked’, in summary, on the basis that the Associate Justice lacked jurisdiction to deal with the Summons which Webb had filed on 28 February 2019, seeking to have a default judgment obtained by the plaintiff, the Westpac Banking Corporation, (Westpac) set aside and to have a related warrant of possession permanently stayed.
[1]Westpac Banking Corporation v Webb [2019] VSC 121.
Background
The relief sought by Webb in the proceeding before the Associate Justice on 28 February 2019 was that Westpac had, on 1 December 2017, entered judgment in default of Defence against Webb for possession of the property situated at 4 Hillston Court, Narre Warren South in the State of Victoria.
By Summons dated 28 February 2019, Webb had sought to set aside the 1 December 2017 default judgment, and Webb also sought to stay what was described by Webb as ‘the execution to evict’ him from the said property of which he was the registered proprietor and occupant.
The Judgment of the Associate Justice
On 28 February 2019, her Honour the Associate Judge rejected Webb’s application, in essence on the basis that the default judgment of 1 December 2017 was regularly entered and that Webb was unable to establish that he had any defence on the merits to Westpac’s entitlement to possession founded on a loan agreement Webb had entered into with Westpac and related mortgage defaults.
As the Associate Justice outlined in her Reasons for Judgment, Webb had contended that:
(a) he had provided Westpac with a Promissory Note (which he had issued) which he contended satisfied the debt in issue;
(b) by reason of the Commonwealth Constitution, his Promissory Note stood as legal tender in Australia;
(c) the Associate Justice did not have jurisdiction, or power to determine a constitutional point, under or in respect of s 51 of the Commonwealth Constitution.
Her Honour’s reasons reflect:
(a) there was no evidence (and I infer no persuasive submission) that the Promissory Note issued by Webb discharged his debt to Westpac and, in this regard, her Honour noted that Westpac had not accepted Webb’s Promissory Note;
(b) the subject loan (and arrears) remained outstanding by Webb to Westpac;
(c) that Webb’s submission that the Court, and her Honour in particular, did not have jurisdiction in the proceeding was unfounded;
(d) that Webb had not brought his application to set aside the subject default judgment promptly, and in substance her Honour also concluded that (if, as on 18 March 2019 Webb contended, it was the case that Webb was a Bankrupt and did not have standing at the time of the hearing before the Associate Justice on 28 February 2019, that fact being unclear on the evidence before her Honour) it would be unlikely that Webb would be able to meet any cost orders in favour of Westpac, which may prejudice Westpac.
(e) her Honour also made less central findings and recorded other conclusions which do not appear to form part of her Honour’s dispositive reasoning.
Considerations
I am unpersuaded that her Honour has erred in any respect in this matter.
The appeal before me is one which is required to be brought and prosecuted pursuant to r 77.06 of the Supreme Court (Civil Procedure) Rules 2015.
In essence, and insofar as is particularly relevant, an appellant in Webb’s position must establish to the satisfaction of the Court, considering an appeal on a rehearing of the matter before the Court below, that an error (or errors) of law have been made in the decision of the matter by the Associate Judge.
Here, I am satisfied that her Honour proceeded to address the correct principles and correctly applied those principles to the facts of relevance in relation to Webb’s late application to set aside a properly entered default judgment.
In that regard I note in passing that, before her Honour it appears that no criticism was pressed by Webb in relation to the process undertaken by Westpac in obtaining the default judgment ex parte on 1 December 2017, and further, as her Honour records, Webb admitted that he owed Westpac money under the relevant loan and the mortgage.[2]
[2]Notice of Appeal dated 13 March 2019.
Grounds of Appeal
Webb’s specific Grounds of Appeal are:
1Abuse of process.
2.Associate Justice Ierodiaconou has no jurisdiction when a constitutional point is presented.
3.No associate can handle or touch a constitutional point.[3]
4.I have the right to appeal the associate justice on just one point, the associate justice has no constitutional jurisdiction.
5.The constitutional point is that I issued a promissory note from section 51 of the Commonwealth constitution.
6.No judge or associate judge has the right to rule in a chapter 3 court with ‘Her most excellent majesty Queen Elizabeth II’ removed from the constitution without a referendum by we the people.
[3]Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd and Others [1999] FCA 1151.
The Relief Sought in Webb’s Appeal
Webb seeks that the orders of Associate Justice Ieradiaconou made 28 February 2019 be revoked on the above grounds.
The first above ground of appeal relating to ‘abuse of process’ was, as I understood Webb’s arguments, not explained or pursued in this appeal.
Similarly Webb, did not, other than a wholly undeveloped reference in his supporting affidavit material,[4] refer to or develop any ground in the nature of a want of fairness or lack of natural justice in relation to the hearing before her Honour on 28 February 2019, or at any earlier point in the court processes.
[4]Affidavit of Graeme Webb (received by email 17 March 2019 at 2.10pm).
Webb’s Grounds of Appeal [2] to [6] all spring from, and are apparently founded upon Webb’s contention that the Court does not have the jurisdiction and/or power to enter default judgment or address the issues decided by the Associate Judge in relation to Webb’s application on 28 February 2019 to set aside the default judgment of 1 December 2017 because to do so would traverse extra-jurisdictional constitutional matters.
The constitutional point which is asserted by Webb to be central is that he is entitled to rely upon a Promissory Note issued under, or pursuant to, s 51 of the Constitution Act 1975 (Vic) and that on Webb’s contention no Judge or Associate Judge of the Supreme Court of Victoria can deal with issues or relief arising in relation thereto. I wholly reject Webb’s contention referred to in this and the preceding paragraph.
Promissory Note
In Permanent Custodians Limited v Sanders,[5] Judicial Registrar Matthews stated -
The reliance on the Promissory Note for the allegation that the defendant has discharged his indebtedness to PCL is misconceived. As submitted by Counsel for PCL, the situation in Hou v Westpac Banking Corporation[6] was relevantly similar in that the appellants in that case relied on a purported ‘bill of exchange’ to say they had discharged their debt to the bank. In that case, the Court of Appeal observed of that bill of exchange that ‘[i]t is hard to believe [the appellant] could have honestly believed such a transparent device could have any legal effect’.[7] The same can be said here.
In ANZ v Evans,[8] Justice Garling of the NSW Supreme Court described a relevantly similar promissory note as one created by the defendant, not drawn on any reputable or substantial financial institution, which was not a recognised form of payment under the loan documentation, and which was proffered entirely voluntarily in circumstances where the plaintiff had to attend at a remote rural village at a specific time to collect payment. Garling J held that to contend that such a promissory note excused the defendant from repaying his substantial liability was ‘a nonsense’.[9]
[5][2017] VSC 516, [65]-[66].
[6][2015] VSCA 57.
[7]Ibid [68].
[8][2016] NSWSC 1742.
[9]Ibid [50].
I consider that, for the same reasons, the Promissory Note (produced by Webb on his promise alone) is not effective to discharge Webb’s indebtedness to Westpac and therefore Webb cannot rely on his Promissory Note in discharge of his relevant debt to Westpac.
Further, during the course of the hearing of this appeal it was established that Webb is at present an undischarged bankrupt. Accordingly, the property of a bankrupt vests in his trustee and Webb, as a bankrupt, no longer has standing in legal proceedings, including in respect of that property.[10]
[10]Cirillo & Anor v City Corp Australia Limited & Ors (2004) 2 ABC(NS) 525 at 545.
In Rogers v Asset Loan Co Pty Ltd & Ors[11] the Court was dealing with an application by a bankrupt for an interlocutory injunction to prevent a secured creditor exercising a power of sale in respect of real property. In the decision in that matter, Greenwood J stated:
Mr Rogers attacks the exercise of the power of sale by the secured creditor[s] on the basis of a failure to comply with the requirements of s 84 of the Property Law Act 1974 (Qld). The interest of Mr Rogers in agitating that question is his interest as owner of the property the subject of the security. That interest has become vested in the trustee. It includes the rights, powers and capacities of the bankrupt in relation to that interest which, in turn, includes the right to agitate the question of whether the secured creditor has complied with the Property Law Act 1974 (Qld). I accept the submission that only the trustee can agitate that question and the trustee chooses not to do so.[12]
[11](2006) 4 ABC(NS) 293.
[12]Ibid, 305.
Section 269(1)(i) of the Bankruptcy Act 1966 (Cth) also prohibits an undischarged bankrupt from giving a Promissory Note, either alone or jointly, under which the sum payable is $3,000.00 or more, without informing the beneficiary of that note that he or she is an undischarged bankrupt. No such notice was established in this case.
Further, and in any event, I am not satisfied that the issue of the Promissory Note by Webb gives rise to any even arguable ‘Constitutional’ issue, nor any real and legitimate issue which is beyond the jurisdiction or power of the Associate Judge or this Court or which arises for determination.
Webb’s other tangential and undeveloped points, including that Westpac has acted unconscionably, in particular in relation to ‘its securitisation’ of the underlying loan, which were touched upon by Webb were described by Webb as amongst potential additional arguments he would have made if he had been able to adjourn this appeal and rely on additional and/or other material. However, these arguments which Webb mentioned generally as the arguments which he intended to make in the future, were not only not pressed at this hearing, I add that such contentions are in my view well outside the grounds referred to in his Notice of Appeal dated 13 March 2019.
Finally, in relation to Webb’s position as an undischarged bankrupt,[13] established only during the course of this hearing, I also conclude that Webb, in any event, lacks standing to prosecute this appeal.[14]
[13]National Personal Insolvency Index, (Extracted 18 March 2019 at 8:47am).
[14]Bendigo & Adelaide Bank Ltd v Capotondi & Anor [2016] SASC 11.
Webb is however at this point unable to avail himself of his bankruptcy to establish error in the decision under appeal because this issue was not established, indeed not raised in this way before the Associate Judge on 28 February 2019, and further, the effect of Webb not having standing to make an application to set aside the default judgment of 1 December 2017, would likely be, if established before the Associate Judge, that the default judgment remained undisturbed and that no further orders would be made on Webb’s application.
Moreover, it cannot lie in the mouth of Webb, who prosecuted his application on 28 February 2019, and who has prosecuted this appeal, that he is somehow assisted on this appeal or in relation to her Honour’s decision of 28 February 2019, by his bankruptcy.
For the above reasons I reject the defendant’s appeal in this matter.
Orders
Accordingly, I order that:
1.The defendant’s Notice of Appeal dated 13 March 2019 and Summons filed 14 March 2019 are dismissed.
2.The defendant pay the plaintiff’s costs of and incidental with the appeal on a standard basis.
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