Bendigo & Adelaide Bank Limited v Nye [2018] QDC 256

DISTRICT COURT OF QUEENSLAND CITATION: Bendigo & Adelaide Bank Limited v Nye [2018] QDC 256 PARTIES: BENDIGO AND ADELAIDE BANK LIMITED (ACN 068 049 178) (Plaintiff/Applicant) V DAVID NYE (Defendant/Respondent) FILE NO/S: 4907/17 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 11 December 2018 DELIVERED AT: Brisbane HEARING DATE: 12 August 2018 JUDGE: Porter QC DCJ ORDER: 1. Summary judgment be entered for the plaintiff pursuant to Rule 292 in a sum to be determined; 2. The plaintiff provide submissions on the calculation of the judgment sum addressing the matter in paragraphs [134] to [136] of these reasons; 3. The defendant pay the plaintiff’s costs of the proceedings on an indemnity basis. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – where the plaintiff applies for summary judgment – where the defendant led no evidence – whether the plaintiff can establish that the defendant executed a pro forma loan application containing a power of attorney or only certain pages – whether the plaintiff can rely on incorporation by reference of the power of attorney – whether the plaintiff can establish that the defendant is bound by a settlement deed – whether that deed has the effect of precluding him from challenging the binding nature of the loan deed – whether the defendant has no real prospect of successfully defining all or part of the plaintiff’s claim – whether there is a need for trial of the claim. -- 1 of 29 -- 2 Legislation Limitation Act 2005 (WA) s 18 Limitation of Actions Act 1936 (SA) ss 34, 38 Limitations of Action Act 1974 (Qld) s 10 Supreme Court Act 1986 (Vic) ss 33E, 33J Uniform Civil Procedure Rules 1999 (Qld) rr 149, 166, 292, 374 Cases Abigroup Limited v Sandtara Pty Limited [2002] NSWCA 45 ABL Custodian Services Pty Ltd & Anor v Taylor [2017] QDC 212 Bendigo and Adelaide Bank Limited v Gaedtke [2017] QDC 202 Bendigo and Adelaide Bank Ltd v Pekell Delaire Holdings Pty Ltd (2017) 118 ACSR 592 Clarke & Ors v Great Southern Finance Pty Ltd (Receivers & Managers Appointed) (In Liquidation) & Ors [2014] VSC 516 Deputy Commission of Taxation v Salcedo [2005] 2 Qd R 232 Dubois v Ong & Anor [2004] QCA 185 Equititrust Limited v Gamp Developments Pty Ltd [2009] QSC 115 Giliberto v Kenny (1983) 48 ALR 620 Gullco International Pty Ltd v Brisbane Parcel Deliveries Pty Ltd [2003] QDC 341 Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87 Lee v Australia and New Zealand Banking Group Ltd [2013] QCA 284 Manufactures’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Insurance Cases 60-853 Queensland Pork Pty Ltd v Lott [2003] QCA 271 Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Walker v Citigroup Global Markets Australia Pty Limited (2006) 233 ALR 687 Other N C Seddon et al, Cheshire & Fifoots Law of Contract (Lexis Nexis, 2002, 8th Aust. Edn) at [10.27] -- 2 of 29 -- 3 K Lewison & D Hughes The Interpretation of Contracts in Australia (Thomas Reuters, 2011) at [3.09] COUNSEL: P D Tucker for the Plaintiff/Applicant SOLICITORS: Results Legal for the Plaintiff/Applicant SUMMARY [1] The plaintiff seeks summary judgment, relevantly, under Rule 292 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).1 [2] The plaintiff contends that Mr Nye is indebted to it in respect of funds advanced to him to permit him to invest in a tax effective managed investment scheme for cultivation of timber of which Great Southern Managers Australia Limited (GSMAL) was responsible entity. Certain disputes about that scheme and others offered by GSMAL were litigated in the Supreme Court of Victoria (Group Proceedings) and settled by a plenary deed of settlement which was approved by the Supreme Court by order on 11 December 2014 (the Settlement Deed).2 [3] The defendant did not appear on the hearing of the summary judgment application and filed no evidence relied upon in support of his defence. However, Mr Nye’s defence puts in issue one central matter: that the loan deed relied upon by the plaintiff as the source of its rights against the defendant was not binding on the defendant. He denies that matter on the basis that he did not execute a loan application in the “standard form” contended for by the plaintiff (which contained a Power of Attorney authorizing entry into the relevant loan deed), but rather that he executed one which omitted key pages and attachments, including the Power of Attorney relied upon by the plaintiff. [4] Mr Nye pleads three main consequences of the loan deed not being binding on him: (a) That he is not a group member bound by the Settlement Deed; (b) That he is not indebted to the plaintiff on the basis alleged in the Statement of Claim; and (c) That a claim on the loan agreement is statute barred. [5] The defence puts other matters into issue, but as will be seen, it is the form of the finance application that is the key issue. [6] In response the plaintiff contends that it is entitled to judgment because: (a) It establishes on the material that Mr Nye executed the standard form loan application; and/or (b) He is a group member in the Group Proceedings and is bound by the Settlement Deed, which precludes him from disputing that the loan deed is valid and binding on him. 1 eCourt Doc 18. 2 Clarke & Ors v Great Southern Finance Pty Ltd (Receivers & Managers Appointed) (In Liquidation) & Ors [2014] VSC 516. -- 3 of 29 -- 4 [7] For the reasons that follow I am satisfied that summary judgment ought to be given in this case. SUMMARY JUDGMENT PRINCIPLES [8] Rule 292(2) of the UCPR provides: If the court is satisfied that – (a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and (b) there is no need for a trial of the claim or the part of the claim; the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate. [9] The task for the court on an application under rule 292 is to determine whether there is a ‘realistic’, as opposed to ‘fanciful’, prospect of the defendant successfully defending all or part of the plaintiff’s claim.3 [10] The applicant bears the onus of proving the claim and persuading the court that there is no real prospect of the defendant succeeding. However, once a prima facie case has been made out, the evidentiary onus shifts to the defendant.4 In discharging that onus, ‘a defendant must ‘condescend upon particulars’ in order to demonstrate the arguability of the defence advanced.’5 In that regard, it is necessary for the defendant’s material to ‘…show prospects of success by sworn evidence, as distinct from allegations in pleadings.’6 [11] These considerations loom large in the determination of this application. Mr Nye did not appear on the application, nor did he communicate that he relied on any sworn evidence. Accordingly, the only document answering the plaintiff’s claim is Mr Nye’s amended defence. That document is effective to make admissions and to put factual assertions of the plaintiff into dispute. It also directs attention to those matters of law which the plaintiff might need to address. However, it is not evidence of any fact. Accordingly, if the plaintiff is able to make out its case as pleaded based on its evidence and admissions in the amended defence, it is open to the Court to grant summary judgment. [12] However, this is not a default judgment application. The plaintiff must establish its case on a summary basis bearing in mind that, as was said in Salcedo, nothing in the UCPR detracts from the well-established principle that issues raised in proceedings will be determined summarily only in the clearest of cases. [13] As to the second limb of the test, summary judgment might be refused notwithstanding that it appears on the material before that Court that there is no real prospect of defending the claim, if the circumstances are such that there is a need for a trial of the claim. It is not possible or appropriate to identify all the circumstances which might 3 Deputy Commission of Taxation v Salcedo [2005] 2 Qd R 232, 234-7. 4 Queensland Pork Pty Ltd v Lott [2003] QCA 271 at [41]. 5 Dubois v Ong & Anor [2004] QCA 185 at [45] per Williams JA. 6 Gullco International Pty Ltd v Brisbane Parcel Deliveries Pty Ltd [2003] QDC 341 at [18] per O’Sullivan DCJ. -- 4 of 29 -- 5 meet this statutory test. The circumstances which might do so include situations such as where the Court is satisfied that the claim ought to be investigated by the defendant notwithstanding that no particular issue can be identified which ought to be tried and where the defendant at the time of the application is ignorant of the circumstances giving rise to the claim and is therefore unable to know if a defence might be formulated. FACTUAL CONTEXT The Scheme Documents [14] The factual context for matters are relied upon by the plaintiff to make good its claim. They are either not disputed on the pleadings or established to the necessary standard on the plaintiff’s evidence. I refer to substantial areas of dispute arising out of Mr Nye’s amended defence as I go. [15] Great Southern Managers Australia Limited (GSMAL) was the responsible entity of a managed investment scheme known as the Great Southern 2008 High Value Timber Project, specifically GS2008HVTP (the Scheme). 7 [16] In about 2007, GSMAL published a Product Disclosure Statement (PDS) for the Scheme. The PDS disclosed that the Scheme involved investment in an agricultural project for the growing and harvesting of timber. Investments in the Scheme were called “woodlots”. Investors could buy one or more woodlots. The Scheme was carried out by GSMAL on the behalf of Scheme investors under a Land and Management Agreement executed on behalf of the investor by GSMAL. [17] The PDA included: (a) A Scheme Application Form; and (b) A standard Finance Application Form and Direct Debit Form for the purposes of applying for finance for investment in the Scheme. [18] The standard Finance Application form was a document of some 43 pages. It comprised: (a) A title sheet; (b) A one page checklist for applicants; (c) A nine page application from comprising some seven items plus an acknowledgment and signing page. Those items included relevantly, Item 7 on page 10 of the application form which set out the terms of a Power of Attorney in favour of the lender (Great Southern Finance Pty Ltd (GSF) where it was the lender and ABL Nominees Pty Ltd (ABL) where it was the lender). The Power of Attorney authorised GSF or ABL (depending on who was the lender) to enter into the Loan Deed on behalf of the applicant for finance; and 7 Amended Statement of Claim filed 21.12.17 (eCourt Doc 6) at para 1A; Amended Defence filed 22.06.18 (eCourt Doc 14) at para 1. -- 5 of 29 -- 6 (d) A 10 page draft Term of Loan Deed (the Loan Deed). [19] The effect of the standard Finance Application was that: (a) An investor could apply for finance for acquisition of units in the Scheme; (b) If an investor did so, that application for finance could be to GSF or ABL as determined in GSF’s discretion; and (c) The entity which lent the money was authorised under the Power of Attorney in the standard Finance Application form to execute the Loan Deed on the applicant’s behalf. Mr Nye’s Scheme documents [20] On or about 25 June 2008, Mr Nye completed and signed a Scheme Application Form, an application for finance and a Direct Debit Form. [21] By the Scheme Application Form, Mr Nye applied for two woodlots in the Scheme at a price of $13,750 per woodlot, a total of $27,500. He also completed section 5 headed “FINANCE (IF APPLICABLE)”. That section relevantly provided:8 I/we hereby apply to Great Southern Finance Pty Ltd, or to a preferred financier of GSMAL, to borrow the amount of 27 500 (insert amount which may not exceed the number of Woodlots applied for x $12,500 per Woodlot, under the terms of the finance option selected below (please tick relevant box): 12 month interest free loan or [crossed box] Principal and Interest Loan (minimum $12,500) For Principal and Interest loans please insert: Term of loan (insert number of years) 10 years Term of interest only period (insert number of years) 3 years [22] It is common ground that Mr Nye also completed an application for finance (the Nye finance application). The form of that application, however, is in dispute. The plaintiff alleges that Mr Nye executed a standard Finance Application. Mr Nye pleads that he did not execute a standard Finance Application. Rather he pleads that the version he signed omitted, relevantly, the Item 7 Power of Attorney. The resolution of this matter is central to the resolution of this application. It is dealt with further below. [23] On or about 25 June 2008, the defendant submitted, or caused to be submitted, the three forms to GSMAL. [24] The plaintiff then alleges that on or about 30 June 2008: (a) ABL Nominees accepted the application for finance and advanced $27,500 to the defendant; (b) GSMAL accepted the defendant’s application for woodlots and issued two woodlots to the defendant (numbers 2640 and 2641); 8 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-1 at p 1. -- 6 of 29 -- 7 (c) The defendant was allocated grower number G45853; and (d) The defendant, by his attorney, entered into a Land and Management Agreement (LMA) with GSMAL for the woodlots. [25] While, Mr Nye does not distinctly admit the first three allegations, he admits the advance was made and that he was allocated the grower number. He does not otherwise dispute the allegations in [24](a) to [24](c) above. The form of the amended defence is such as to give rise to deemed admissions of those allegations, to the extent they are not admitted by the amended defence.9 As to entry into the LMA, Mr Nye disputes the entry into that agreement on the basis in paragraph [22] above (i.e.) that the power of attorney was not included in his finance application as executed. As will be seen presently, that contention is misconceived. [26] On or about 4 July 2008, GSF sent a letter to Mr Nye by which it informed him that his loan application had been approved and set out the details of the loan including the interest rate and repayments and identifying the account from which loan repayments would be debited as being an account of Kadamitch Pty Ltd (the entity nominated in Mr Nye’s Direct Debit form). Mr Nye admits receiving correspondence on or about that date, though from the plaintiff not GSF. Mr Flamer-Smith exhibits a copy of such a letter from GSF’s records.10 I am satisfied that such a letter was received by Mr Nye. [27] The next step was the execution of the Loan Deed. The plaintiff alleges that on 26 April 2009, GSF by its director and secretary, relying on the Power of Attorney in the Nye finance application, executed a Loan Deed in the form of the draft Loan Deed. ABL also signed that document and accordingly a Loan Deed between Mr Nye and ABL came into existence. These matters are sufficiently shown on the material filed by the plaintiff. Mr Nye’ disputes he is bound by the Loan Deed again on the basis in paragraph [22] above. [28] The Loan Deed is exhibited to Mr Flamer-Smith’s affidavit.11 It relevantly provided: (a) (by clause 2(a)) ABL would lend the sum of $27,500.00 (i.e. the Principal sum) to the defendant; (b) (by clause 1) the moneys payable under the Loan Deed comprised: (i) the Principal Sum; (ii) interest payable under clause 5 of the Loan Deed; (iii) any further moneys advanced by ABL to the defendant; and (iv) any other moneys payable to or recoverable by ABL under the terms of the Loan Deed, including any costs and expenses (including the Costs as defined in subparagraph (f) below), 9 Rule 166(5) UCPR. 10 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-1 at pp 32 to 33. 11 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-1 at pp 34 to 43; ASOC at para 3. -- 7 of 29 -- 8 (jointly the Moneys Payable) (c) (by clause 4.1) the defendant would make 36 monthly interest only repayments of $240.63 each, commencing on 31 July 2008; (d) (by clause 4.1) the defendant would make 84 monthly principal and interest repayments of $463.67 each, commencing on 21 July 2011; (e) (by clause 5.1) the defendant would pay interest on the Moneys Payable (as defined in the Loan Deed) that was due and payable, but unpaid, at the rate of 13.5% per annum, calculated daily and charged monthly (Interest); (f) (by clause 7.1) the defendant would pay all costs and expenses incurred in relation to enforcement of the Loan Deed on a full indemnity basis (Costs); (g) (by clause 13(a)) an acceleration event would occur under the Loan Deed if the defendant failed to pay any Moneys Payable on the due date for payment (Acceleration Event); and (h) if the Acceleration Event occurred under the Loan Deed, then ABL could demand immediate payment of the Moneys Payable; (i) (by item 7 of the Schedule) the final repayment date was 30 June 2018. [29] Mr Nye denies those terms. However, the executed Loan Deed is in evidence and contains those terms. The real question is not the terms of the Loan Deed but whether GSF had authority to enter into it on his behalf. Mr Nye’s default [30] The plaintiff pleads that Mr Nye made repayments in accordance with the terms of the Loan Deed from 31 July 2008 to 31 May 2009 and ceased repayments thereafter. Mr Nye admits the repayments were made but “does not admit the validity of the liability to pay”. He denies the alleged cessation of repayments for the reasons in paragraphs “1, 3, 5 and 6” of his amended defence. Both pleas are ambiguous and objectionable. Doing the best I can, it appears Mr Nye seeks to raise again that he was not liable on the Loan Deed because of the Power of Attorney did not bind him. He also appears to invoke his non-admission of the alleged assignment of his loan by ABL to the plaintiff (dealt with next). That allegation is a non sequitur to the allegation of the plaintiff responded to. In any event, the repayments alleged and the cessation of repayments alleged is supported by evidence in Mr Flamer-Smith’s affidavit.12 I find those matters to be proved. The assignment [31] The plaintiff alleges that with effect from 1 October 2009, or alternatively 15 September 2017, all of ABL’s rights under the Loan Deed were assigned to the plaintiff. The 1 October 2009 assignment is particularised as arising from book entries on that date in the accounts of ABL and the plaintiff. The 15 September 2017 12 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-1 at pp 86 to 91 (Loan Account Statement), pp 102 to 103 (Letter of Demand). -- 8 of 29 -- 9 assignment is alleged to have occurred by deed. Notice is alleged to have been given on 30 April 2009 or 19 September 2017. [32] Apart from admitting receiving a letter dated 30 April 2009, Mr Nye does not admit the facts nor the legal conclusion that there was a valid assignment. [33] The 1 October 2009 assignment is not established by evidence in Mr Flamer-Smith’s affidavit.13 However, the Deed of Assignment dated 15 September 2017 is in evidence14 and I accept it was effective to assign the benefit of the Loan Deed from ABL to the plaintiff. Notice of this assignment is in evidence and I accept it was provided to Mr Nye through his then solicitors.15 The group proceedings [34] Disputes arose as to matters in the PDS for the Scheme and for other schemes involving other agricultural investments promoted by GSMAL. That led to the commencement by certain plaintiffs of representative proceedings in the Supreme Court of Victoria in 2011 claiming relief against various defendants. The Group Proceeding was one such proceeding. [35] The plaintiff alleges that Mr Nye was a group member of the Group Proceeding and did not did not opt out. [36] Mr Nye denies he was a group member on the basis that he did not elect to remain in the Group Proceeding. He pleads that is was irrelevant that he did not opt out of the Group Proceeding because it was sufficient to terminate his retainer with the solicitors for the plaintiffs in that proceeding (Macpherson & Kelly). He also denies he was a group member because he was not “properly notified” of the opt out option. He led no evidence to make good either proposition. I deal with the plaintiff’s evidence and submissions on these issues below. Settlement of the Group Proceedings [37] In about May 2014, the Group Proceedings were settled, along with the other representative proceedings involving other schemes, by a single Settlement Deed, subject to Court approval. The Settlement Deed was executed by the plaintiffs in the Group Proceedings and, in August 2014, the trial Judge directed notice of the Settlement Deed be given to all group members in each proceeding. [38] The plaintiff alleges that this notice was given to Mr Nye and that he did not object to the settlement. This allegation is not responded to in the amended defence and is deemed admitted. Further, there is evidence from which service of that notice on Mr Nye can be inferred.16 13 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at paras 35 to 38. 14 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at para 39, EXH SFS-1 at p 45 to 49. 15 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at para 55, EXH SFS-1 at p 82 to 85. 16 See Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-3 at pp 619 to 635 (Affidavit of S G Walter dated 16 September 2014). -- 9 of 29 -- 10 [39] On 11 December 2014, his Honour Justice Croft made orders approving settlement of the Group Proceeding and the other representative proceedings relating to other schemes. His Honour also ordered that: The plaintiffs in the Group Proceedings have the authority of the “Group Members” (as that term is defined in each of the Group Proceedings), nunc pro tunc, to enter into and give effect to the deed of settlement…on behalf of the Group Members. [40] The plaintiff contends that Mr Nye is bound by the Settlement Deed because: (a) He was a group member; and (b) The Loan Deed fell within the scope of the definition of loan deed in the Settlement Deed. [41] Mr Nye disputes those two matters on the basis that he was “not a party to the Settlement Deed”. It is clear that the basis of that denial is his allegation that, in broad terms, he opted out of the Group Proceedings. [42] The Settlement Deed contained the following relevant definitions:17 (a) ‘Approval Date’ means the date the Supreme Court of Victoria approves the Settlement Deed; (b) ‘BEN Parties’ means the Bendigo and Adelaide Bank Limited ACN 068 049 178 of The Bendigo Centre, Bendigo VIC 3550 and the other companies listed in schedule 2; (c) ‘Group Members’ means each person or entity falling within the definition of a group member in any one or more of the Group Proceedings and who has not opted out of the Group Proceeding; (d) ‘Interest Relating to Overdue Amounts’ means the interest that is charged on the Moneys Payable under the Loan Deeds, which is due and payable but unpaid, and which is: (A) additional to interest charged at the standard interest rate under each Loan Deed; and (B) charged at a rate calculated by the difference between the standard interest rate and the overdue interest rate set out in the schedule to the Loan Deed; (e) ‘Lead Plaintiffs’ means Clarke, Murray, Drummond, Hogan, Williams, Prasad, Micallef, Fisher and Ford; (f) ‘Moneys Payable’ means the Moneys Payable to one of the BEN Parties under a Loan Deed less any Interest Relating to Overdue Amounts waived under clause 4.1.1; (g) ‘Loan Deeds’ means the Loan Agreements the subject of the Group Proceedings and the M+K Counterclaim Proceedings entered into between; 17 ASOC at para 11; Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-4 at pp 678 to 683. -- 10 of 29 -- 11 (A) The Lead Plaintiffs, Group Members or M+K Counterclaim Claimants and GSF, which were subsequently assigned by GSF to one of more of the BEN Parties or Javelin; or (B) The Lead Plaintiffs, Group Members or M+K Counterclaim Claimants and ABL Nominees to one or more of the BEN Parties. (h) ‘M+K Clients’ means the persons referred to in Schedule 4, which included the defendant. [43] The BEN Parties in Schedule 2 included ABL. [44] It also included the following terms, relevantly:18 (a) By clause 4.1.1: The BEN Parties agree to waive Interest Relating to Overdue Amounts accrued and unpaid as at the Approval Date, in respect of the Loan Deed of: 4.1.1.1 the Lead Plaintiffs; 4.1.1.2 Group Members; and 4.1.1.3 M+K Counterclaim Claimants. insofar as those loans are between those persons and the BEN Parties. (b) By clause 4.1.4: The Lead Plaintiffs for and on behalf of themselves and all Group Members acknowledge and admit the validity and enforceability of the Lead Plaintiffs’ Loan Deeds and the Group Members’ Loan Deeds. (c) By clause 6.1.1.1(a): 6.1.1 Insurers of GSMAL will pay: 6.1.1.1. $20,250,000 to the M+K Trust Account to be disbursed by M+K as follows: (a) $20 million to the M+K Clients with each M+K Client receiving the sum calculated pro rata to the amount paid by each M+K Client to M+K Events following the settlement [45] The plaintiff alleges that Mr Nye received benefits under the Settlement Deed in the form of: (a) Interest relief in accordance with clause 4.1.1 of the Settlement Deed conferred by crediting of his loan account with $6,077.04; and (b) Receipt of a share of the funds paid for the benefit of the M&K Lawyers under clause 6.1.1.1(a). [46] Mr Nye denies both allegations and alleges that $6,077.04 was deposited to an account of Kadamitch. There is no evidence of that positive allegation, nor of the denials pleaded. 18 ASOC at para 11; Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-4 at pp 685 to 686, 692. -- 11 of 29 -- 12 [47] The plaintiff’s evidence shows crediting of the sum of $6,077.04 to the account kept for Mr Nye’s loan. I accept that that occurred. There is also evidence of the receipt of a share of fund paid under clause 6.1.1.1(a) by Mr Nye. As I explain in below, I accept that such a payment occurred. [48] The plaintiff relies on the default in repayment as an acceleration event under the Loan Deed and relies on its Notice of Demand issued on 27 July 2016. That demand was for the sum of $61,650.21 alleged to be the amount of the Moneys Payable as at 1 June 2016. The plaintiff then alleges that as at 1 November 2016 it was entitled to $65,256.19 comprising: (a) The Principal Sum; (b) Interest to 1 November 2016 (less the waived amount); and (c) Costs, including legal costs on an indemnity basis. [49] It claims in total $66,089.35. [50] Mr Nye denies these allegations by repeating the matters previously raised in his defence: i.e. he is not bound by the Loan Agreement and not bound by the Settlement Deed. He raises two additional matters: (a) He denies receiving the demand issued on 27 July 2016; and (b) He alleges that the plaintiff is statute barred because it has brought its action more than 6 years after the cause of action on the loan arose. [51] The plaintiff seeks to prove the sum claimed by the loan account statement exhibited to Mr Flamer-Smith’s affidavit filed 14 August 2018.19 That statement appears to be calculated on the basis of overdue interest being charged on the principal sum from February 2010. Whether that is a correct approach given the facts pleaded is debatable. Given the provisions of clauses 4.1, 5.1, 13(a) and 14.1 of the Loan Deed, it is my view that the principal sum is not “due and payable” during the period of the loan unless there is an acceleration event and a demand is made. [52] I am satisfied, however, on the evidence before the Court that the Notice of Demand was given in accordance with the Loan Deed as alleged by the plaintiff.20 THE ISSUES IN DISPUTE [53] The following issues arise. [54] First, is Mr Nye is bound by the Loan Deed and in particular: (a) Is he bound by the Power of Attorney contained in the standard Finance Application? (b) If he is not, has he ratified the entry into the Loan Deed by GSF on his behalf? 19 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-1 at pages 86 to 91 (Loan Account Statement). 20 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at paras 86 to 88. See also Clause 28 and Schedule 1 to the Loan Deed (EXH SFS-1 at pp 34 to 43). -- 12 of 29 -- 13 [55] Second, if he is not bound by the Loan Deed, is he is precluded from disputing that matter by the Settlement Deed and in particular: (a) Is he a Group Member as defined in the Group Proceedings; and (b) If so, did he effectively opt out of the Group Proceedings? [56] Third, is the plaintiff’s claim statute barred? [57] Fourth, has the plaintiff otherwise established its entitlement to judgment in the sum claimed? Is Mr Nye bound by the Loan Deed? Did Mr Nye execute a standard Finance Application? [58] The Loan Deed was purportedly executed on behalf of Mr Nye by his “duly appointed” attorney. The plaintiff pleads and seeks to prove that Mr Nye is bound by the Loan Deed on the basis that he executed a standard Finance Application form which included in Item 7 a Power of Attorney authorising execution of the draft Loan Deed attached to the Finance Application. [59] Mr Nye’s primary defence to that allegation is articulated as follows (and is repeated on a number of occasions throughout the amended defence) at para 1: The Defendant denies the allegation in paragraph 1H sub-paragraphs (a) to (e) and states: (a) The Application for Term Finance purportedly signed by the Defendant or about June 2008: (i) was not signed and witnessed as represented in that document; (ii) did not disclose all of the provisions of the complete document and, in particular, Part 7 of that document in respect of which the Plaintiff relies; (iii) did not provide authority or Power of Attorney to any third party to enter into the Deed on his behalf upon which the plaintiff wholly relies. (b) The Defendant did not sign the Loan Deed; (c) Great Southern Finance Pty Ltd, by its director, Cameron Arthur Rhodes, and its secretary, Neil Hackett, purported to execute the Loan Deed on behalf of the Defendant pursuant to a power of attorney by which Great Southern Finance Pty Ltd was said to have been “duly appointed”; (d) The Defendant did not authorise Great Southern Finance Pty Ltd or any other person or entity to exercise such power of attorney; (e) The Loan Deed has therefore not been validly executed on behalf of the Defendant and the Defendant is not bound by the terms of the Loan Deed. [60] The central factual allegation of that pleading is that Mr Nye says the version of the finance application he signed was did not disclose all of the provisions of the complete document and in particular Item 7 which contained the power of attorney. Subparagraph (a) might be suggesting something more than that, but if so, it is unclear what. Further, there is no evidence from Mr Nye to support his plea. [61] Accordingly, if I could be satisfied on the plaintiff’s evidence that Mr Nye had signed a standard Finance Application, I would accept that proposition in the absence of any evidence to the contrary from Mr Nye. -- 13 of 29 -- 14 [62] One might imagine that the plaintiff would have little difficulty establishing that Mr Nye had signed a standard Finance Application: all that would be required would be to tender the application by Mr Nye in that form held in the financier’s file. [63] The difficulty for the plaintiff is that it does not have an application by Mr Nye in that form. Paragraph 1L of the ASOC states the plaintiff’s position: 1L. The Executed Finance Application Form, as submitted by the defendant to GSMA: (a) compromised pages 1 to 6, and page 11, of the Finance Application Form, including all sections which were required to be completed by the defendant; (b) did not include: (i) pages 7 to 10 of the Finance Application Form; (ii) the pages of the Standard Loan Deed or the Schedule thereto; (c) contained a patent omission, being the omission of the said pages and the Schedule. [64] The plaintiff’s evidence is consistent with that plea. The finance application exhibited to Mr Flamer-Smith’s affidavit is in the form described in paragraph 1L. How then can I be satisfied that Mr Nye’s finance application was in the standard form? [65] The high point of the evidence of the plaintiff is paragraph 30 of Mr Flamer-Smith’s affidavit filed 14 August 2018. After exhibiting a copy of the standard Finance Application (which includes the Power of Attorney and the draft Loan Deed) he affirms: I verily believe, having regard to my Experience, that it was GSMAL and GSF’s usual practice to provide that complete version of the application for finance to borrowers to ensure: (a) borrowers were provided with all terms relevant to their application for finance; and (b) it complied with the requirements of the Loan Sale and Servicing Deed, which required loans which GSF or GSMAL may seek to offer to ABL Nominees (whether originated or purchased) to be substantially in one of the forms contained in Schedule 6 of that document. [66] He earlier describes his Experience, arising from his employment with the plaintiff as Manager, Legal and Resolutions Great Southern Collections, as follows (at paragraphs 14 to 16): 14. I have been involved in the management and recovery of loan made for the purposes of investments in schemes offered by [GSMAL] or its related entities for over nine years as a result of my employment with the Plaintiff. 15. As part of my Experience I have reviewed the books and records (including electronic records) of the Plaintiff on my occasions, and also the records of ABL Nominees and GSMAL and [GSF] 16. From my Experience, I am familiar with: (a) the documentation produced, and practices which were adopted, in relation to loans made to customers of the Plaintiff (including customers whose loans were assigned to the Plaintiff by ABL Nominees) for the purposes of investments made in schemes offered by GSMAL or its related entities; and (b) the mode and nature of business records created and retained by ABL Nominees, GSMAL and the Plaintiff in relation to such loans and associated investments, including the Defendant’s Loan. -- 14 of 29 -- 15 [67] I do not find this evidence alone to be sufficient to satisfy me for the purposes of this application that Mr Nye signed a standard Finance Application. [68] Even assuming it is admissible evidence of GSF’s usual practice from Mr Flamer- Smith, it does not explain why GSF’s usual practice is relevant to the manner in which Mr Nye executed the Nye Finance Application. The version of the Nye Finance Application before the Court appears to have been witnessed by a Mr Aaron Currie. It is neither alleged nor proved that he was an officer of GSF21 or otherwise someone who might comply with its practices. Similarly, the Nye Finance Application appears to have been introduced by an “Adviser” identified as Mr David Myers. It is neither alleged nor proved that he was an officer of GSF. [69] Further, if the usual practice was as described, the evidence does not explain how it came about that the plaintiff holds only an incomplete version of the standard Finance Application in this case. [70] It seems to me that there are three inferences open on the evidence: (a) First, that Mr Nye completed and executed a standard Finance Application, and he or his advisers submitted a complete form, but GSF or ABL discarded the pages that omitted handwritten entries; (b) Second, that Mr Nye completed and executed a standard Finance Application but he or his advisers only submitted the pages with handwritten entries; (c) Third, that Mr Nye completed and executed only the pages which were submitted. [71] There is very little to assist the Court in drawing one of the inferences favorable to the plaintiff. The usual practice affirmed to by Mr Flamer-Smith makes the first inference appear improbable. As to the other two inferences: (a) There is no evidence as to the method in which the Nye Finance Application was submitted which would assist the Court in preferring one inference or the other. For example, if posted or sent as an electronic document one might expect the whole of the document signed by Mr Nye to have been submitted. If faxed perhaps one might be more likely to infer that just the key pages were sent; and (b) There is no evidence from Mr Myers or Mr Currie as to their practices at the time. [72] In my view, it would not be unusual for an adviser who is assisting a client to invest in a tax effective scheme in the shadow of the end of the financial year to simply complete and put before the client the particular pages of an application form which required handwritten entries. This is not intended to be a criticism of the particular individuals in this case. We have not heard from them. However, the evidence before the Court is insufficient to persuade me that I should infer that Mr Nye executed a standard Finance Application. 21 Mr Tucker (who appeared for the plaintiff) confirmed he was not: see TS 1-14.45. -- 15 of 29 -- 16 Plaintiff’s contentions on the Finance Application [73] Mr Nye’s amended defence contends that as he did not execute a finance application which contained the Power of Attorney, he is not bound by the Loan Deed because that deed was entered into on his behalf by officers of ABL exercising the Power of Attorney under the standard Loan Application. [74] The amended statement of claim adopts the contrary position. It proceeds on the basis that Mr Nye completed and executed a standard Finance Application including the Item 7 Power of Attorney and the draft Loan Deed. [75] Paragraph 1I(c) of the amended statement of claim pleads that the Nye Finance Application “contained a patent omission” being the omission of the pages in the standard Finance Application not included in the Nye Finance Application. I do not understand the relevance of this allegation. The next paragraph of the pleading does not much assist in elucidating that matter. Paragraph 1J alleges that on the true construction of the Nye Finance Application: (a) Mr Nye granted the Power of Attorney; and (b) The terms of the loan sought were the terms contained in the draft Loan Deed. [76] The plaintiff’s reply does not take things any further. In paragraph 2 of its Reply, the Plaintiff denies that the Defendant is not bound by the Loan Deed because: (a) … (i) by the Application for Term Finance, the Defendant expressly conferred a power of attorney to Great Southern Finance Pty Ltd to execute the Loan Deed on his behalf; (ii) the Defendant need not personally sign the Loan Deed at law in order to be bound; and (iii) the Loan Deed was validly executed on the Defendant’s behalf pursuant to that power of attorney; and (b) even if (which is denied) there were any deficiencies in the validity, or execution, of the Application for Term Finance and/or Loan Deed (which is denied) then as a result of the Settlement Deed in the Group Proceedings the Defendant has ratified the execution of the Loan Deed on his behalf and is estopped from denying the validity and enforceability of the Loan Deed by reason of the matters pleaded in paragraphs 8 to 13F of the Amended Statement of Claim. [77] Subject to the matters raised in paragraph 2(b) of the Reply (which are addressed below) it is not clear to me how these allegations assist the plaintiff if one assumes, contrary to the plaintiff’s position, that Mr Nye executed the finance application in the form in evidence. [78] The plaintiff’s written submissions do not grapple directly with the question of proof of the form of the finance application at all. Nor do they advance arguments as to how, assuming the finance application was not in the standard form, Mr Nye is nonetheless bound by the Power of Attorney and the draft Loan Deed. [79] However, Mr Tucker, for the plaintiff, sought to rely on incorporation by reference in his oral submissions. He developed the argument as follows. [80] He referred to the acknowledgments in the execution page of the Nye Finance Application which provided: -- 16 of 29 -- 17 I/We:  hereby apply for term finance as detailed in this finance application or agree to guarantee the loan as detailed in this finance application;  apply for term finance from either Great Southern Finance Pty Limited (GSF) or ABL Nominees Pty Ltd (ABL), with the lender to be determined in GSF’s discretion;  authorise GSF to advance the term finance as a principal and interest loan without an interest only period where a principal and interest loan with an interest only period is not eligible to be advanced by ABL;  unless we have requested multiple loans not to be consolidated, authorise the lender to consolidate new loans in its discretion. We acknowledge that loans can only be consolidated if from the same lender and if the loan term and interest rate are the same and that forestry and horticulture loans can not be combined;  confirm that all information provided in this finance application, including the declaration of financial position, is true and correct and not misleading;  grant the power of attorney as set out in part 7;  confirm the consents and acknowledgements given in this finance application;  declare that I/we have read and understood this finance application, including the “Risk Disclosure Statement & Declaration” and the “Loan Deed” (the Loan Deed being the Forestry Loan Deed as attached in relation to forestry products);  confirm that I/we have read and understood the matters set out in part 6 (Personal Information and Consent) and agree to the consent and terms of that part;  declare that I/we have had the opportunity to obtain independent legal, financial and taxation advice;  declaration that I/we have considered the risks and costs involved in participating in an agricultural based activity and I/we am/are prepared to accept the risks involved and hereby accept liability for this loan as the borrower or guarantor (as the case may be) should this finance application be accepted; and  declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominately for business or investment purposes (or for both purposes).22 [underlining added] [81] He submitted that one could identify objectively the documents described in the execution page as those shown in the examples of the standard Finance Application in the material. These do show the form of the Item 7 Power of Attorney and the draft Loan Deed which existed at the time Mr Nye executed the Nye Finance Application. [82] Mr Tucker the referred to Walker v Citigroup Global Markets Australia Pty Limited (2006) 233 ALR 687 at [76] in support of the incorporation by reference argument. The relevant portion of this paragraph provides: It was found that the contract was in the form of the third letter of offer which did not attach the Conditions but which referred to those Conditions as being attached. As the Conditions had been provided previously, it is clear enough that those Conditions are taken to be incorporated in the Contract. Hence, the problem of construction. [83] It is trite that a document can be incorporated by reference into a written agreement. Whether a written agreement does or does not incorporate another document is a matter of the proper construction of the agreement, construed objectively.23 22 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-1 at p 21. 23 Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; N C Seddon et al, Cheshire & Fifoots Law of Contract (Lexis Nexis, 2002, 8th Aust. Edn) at [10.27]; Giliberto v Kenny (1983) 48 ALR 620 at 623; K Lewison & D Hughes The Interpretation of Contracts in Australia (Thomas Reuters, 2011) at [3.09] -- 17 of 29 -- 18 Incorporated terms may have to give way to expressly agreed terms, though it will be a matter of construction in each case.24 [84] In incorporation by reference cases it is necessary to construe the express term which incorporates another term or document and then to prove by extrinsic evidence the documents or terms referred to. If that is done, it is not necessary to prove that the terms incorporated were in fact known to the other party. If one party to a contract is content to rely upon a description of the subject-matter of the contract proffered by the other party, and extrinsic evidence is available to identify the subject-matter which is not identified with certainty by the written words, that evidence is admissible for that purpose. 25 [85] In my view, the evidence relied upon by the plaintiff supports the conclusion that the terms of the Power of Attorney in Item 7 and the draft Loan Deed were incorporated by reference into the Nye Finance Application. The question is whether that has been properly pleaded and if not, the implications for the application for summary judgment. [86] The fact that a plaintiff is able to prove its claim to the requisite standard but on a basis not pleaded is not necessarily fatal to an application for summary judgment. In Equititrust Limited v Gamp Developments Pty Ltd [2009] QSC 115, McMurdo J said at paragraph [12]: The power to give summary judgment to a plaintiff is according to the terms of r 292. The rule requires attention to a plaintiff's claim. It does not expressly refer to a plaintiff's pleading. A plaintiff's claim must be that within the document by which the proceedings were commenced or as that has been amended with the leave of the court or a registrar. A plaintiff cannot seek summary judgment for relief which is not within its claim as filed or as duly amended. There is no express requirement within r 292 for the plaintiff's case for that relief to be entirely according to its pleading. But ordinarily that would be required because a defendant is entitled to be fairly informed of the case against it. And because summary judgment may be sought only after a Defence is filed, an application for judgment upon an unpleaded case might be considered premature. Nevertheless they are discretionary considerations. In my view, the rule does not limit the power to give summary judgment to instances where the plaintiff's argument precisely accords with its pleading. In the present case, there could be no disadvantage to the first defendant in not having an amended statement of claim which pleads the September 2008 agreement and the default under that agreement. To the extent that the plaintiff's argument goes further than its pleading, this provides no basis for not giving judgment of the plaintiff establishes that there is no real prospect of defending all or part of its claim and there is no need for a trial of the claim or part of the claim. [underlining added] [87] I respectfully adopt his Honour’s approach. There are two questions to be resolved therefore: (a) Has the construction based on incorporation by reference been sufficiently pleaded; and 24 Giliberto v Kenny 48 ALR 620 at 623; Lewison & Hughes ibid. 25 Maunufactures’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Insurance Cases 60-853 at 75,340-342 per Hope JA, McHugh and Mahoney JJA agreeing; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [42] to [57] esp. at [42] to [46] read with [48] and [50]. -- 18 of 29 -- 19 (b) If not, would it be unfair to the defendant to grant summary judgment despite the lack of a sufficient pleading? [88] As to the former matter, the necessary material facts to sustain the legal conclusion of incorporation by reference of the Power of Attorney and draft Loan Deed into the Nye Finance Application can arguably be identified in the amended statement of claim: (a) Paragraph 1A(d) pleads the standard Finance Application and the draft Loan Deed; (b) Paragraph 1G pleads the parts of the Nye Finance Application which refer to the Power of Attorney in part 7 and the draft Loan Deed; (c) Paragraph 1H expressly pleads the Power of Attorney in Part 7 including its key terms; (d) Paragraph 1J might (see paragraph [75] above) might be seen to be broad enough to cover incorporation by reference. [89] Even if this were sufficient, however, the difficulty is that the express premise of the pleading is that Mr Nye executed a standard Finance Application. No alternative case is expressly pleaded which accepts that the application as executed by Mr Nye comprised just the eight pages in the plaintiff’s possession but that the Power of Attorney and draft Loan Deed are incorporated by reference. Accordingly, even if the necessary facts can be identified in the pleading as it stands, the pleading fails properly to state specifically a matter which may take the other party by surprise.26 In my view, a reasonable reader of the plaintiff’s pleading would be surprised to know that an incorporation by reference contention was to be made. A fortiori where the defendant is a litigant in person and not present at the hearing. [90] While it might be doubted that the defendant would be able to plead and prove a case which defeated the incorporation by reference argument, the possibility could not be excluded. Accordingly, I will not permit the plaintiff to rely on its incorporation by reference argument on this application for summary judgment. [91] It is necessary also to deal with paragraph 2(b) of the reply set out in paragraph [76] above. The ratification and estoppel referred to in that paragraph assumes that Mr Nye is bound by the Settlement Deed. That argument therefore depends on whether he is so bound. I deal with that issue next. [92] The plaintiff also pleads that Mr Nye has ratified the Loan Deed. That allegation is in response to Mr Nye’s allegations that the Loan Deed was not validly executed by its company officers and that he did not authorise GSF to sign the Loan Deed. In my view, however, these parts of Mr Nye’s pleading are based on his central contention that he did not execute a standard Loan Application which included the Power of Attorney. The matters relied upon as sustaining the ratification comprise: (a) Making loan repayments; and 26 Rule 149(c) UCPR. -- 19 of 29 -- 20 (b) Being a Group Member and being bound by the Settlement Deed. [93] The former point is insufficient to sustain the conclusion that Mr Nye ratified a Loan Deed which the plaintiff does not allege he ever saw. Given my conclusions on the latter point below, it is unnecessary to further consider ratification. [94] One final matter must be mentioned on this subject. I am conscious that Mr Nye does not dispute, or is deemed to admit, that he obtained a loan from ABL to fund his woodlots. It therefore would be open to the plaintiff to plead that Mr Nye entered into an informal loan agreement with ABL on the terms identified in the Nye Finance Application. However, no such case is pleaded, and if it were, issues of limitation might arise. [95] The ultimate conclusion therefore is that I am not satisfied that Mr Nye has no real prospect of establishing that he has not executed a standard Loan Application. [96] The premise of the plaintiff’s case is that Mr Nye is bound by the Loan Deed. It relies upon the Loan Deed as identifying the content of Mr Nye’s obligations upon which it sues. Unless the plaintiff can establish that Mr Nye is bound by the Settlement Deed and that deed has the effect of precluding him from challenging the binding nature of the Loan Deed, the application must fail. It is to that matter that I now turn. Is Mr Nye bound by the Settlement Deed? Mr Nye is a group member [97] The plaintiff contends that Mr Nye is bound by the Settlement Deed because he is a group member who did not opt out of the proceedings. The first question is whether the plaintiff has established that Mr Nye was within the group represented by the plaintiffs in the Group proceedings. In my view, the plaintiff has done so. [98] Paragraph 8A pleads Mr Nye was a group member. It provides: The defendant was a member of the Group Proceeding (group member) by operation of law as the defendant met the relevant criteria in paragraph 2 of the amended statement of claim filed in the Group Proceeding, namely: (a) the defendant: (i) between 1 July 2007 and 30 June 2008 inclusive acquired an interest as a member in the GS2008HVT; or (ii) alternatively held an interest in the GS2008 HVT; (b) the defendant entered into a loan with ABL to fund payment of application fees in respect of the GS2008HVT. [99] Mr Nye disputes this allegation only on the basis that he opted out of the group.27 He therefore would be deemed to have admitted the allegations in paragraph 8A. I see no good reason why I should not fairly act on those deemed admissions in this application. [100] It might be argued that despite that deemed admission, I should not act on the basis that he is a group member because paragraph 8A fails properly to plead the criteria in 27 Amended Defence at para 9. -- 20 of 29 -- 21 paragraph 2 of the amended statement of claim filed in the Group Proceedings. That paragraph provided:28 This proceeding is commenced by the Plaintiffs on their behalf and on behalf of all persons who: (a) at any time during the period between: (i) 16 February 2007 and 30 June 2007 inclusive acquired and/or held an interest as a member in the 2007 HVT Scheme; and/or (ii) 1 July 2007 and 30 June 2008 inclusive acquired and/or held an interest as a member in the 2008 HVT Scheme; (b) entered into a lease and management agreement with GSMAL for woodlots in the 2007 HVT Scheme and/or the 2008 HVT Scheme; (c) entered into a loan with ABL Nominees to fund payment of the application fees in respect of the 2007 HVT Scheme and/or the 2008 HVT Scheme; (d) suffered loss or damage by reason of the conduct of the defendants alleged herein; and (e) are not: (i) a defendant in this proceeding; (ii) parents, siblings, spouses or children of a defendant in this proceeding; (iii) a body corporate of which a defendant was an officer or majority shareholder at any time during the relevant period; or (iv) a beneficiary of any trust, the trustee of which is or at any time during the relevant period was an officer or majority shareholder of a defendant. [101] It can be seen that there are more criteria than those identified in the pleading. Further those unpleaded criteria might be thought to give rise to real issues in this proceeding. [102] One issue can be dismissed straight away. Mr Nye expressly denies in his amended defence that he entered into a lease and management agreement with GSMAL (the LMA). The basis of that denial, however, is the same as his denial in relation to the Loan Deed: the failure of the Nye Loan Application to include the Power of Attorney. This is misconceived. The Power of Attorney pleaded and proved in relation to the LMA is that authorised by execution of the Scheme Application Form. I am satisfied that Mr Nye’s point in this respect has no real prospect of succeeding. [103] However, the difficulty which might be thought to arise is that the statement of claim fails to allege specifically that Mr Nye met all the criteria identified in paragraph 2 and that those criteria which were not pleaded might be properly the subject of dispute by Mr Nye. [104] However, on balance I do not think that the failure expressly to allege all the criteria is material. In my view, paragraph 8A alleges Mr Nye’s status as a group member generally and then proceeds to identify two of the criteria specifically. Mr Nye joins issue with that allegation only by alleging that he had opted out. He does not dispute the general allegation of group membership, and would be deemed to have admitted that allegation. Thus the issues between the parties on group membership are defined in the pleadings. I do not see any good reason why the Court should embark on any further investigation of issues relating to group member status in that circumstance. [105] Mr Nye’s group membership will therefore stand or fall on the question of whether he opted out of the Group Proceedings. 28 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) EXH SFS-3 at pp 543 to 544. -- 21 of 29 -- 22 Mr Nye did not opt out [106] By his amended defence, Mr Nye alleges: (a) He was not a member of the Group Proceeding as: (i) The representative proceeding was only filed on behalf of those investors who elected to remain in the presentative proceedings by paying all instalments requested of them to remain in the Group Proceeding as at the date of the filing of the proceedings in 2011; 29 (ii) The defendant did not elect to remain in the Group Proceeding;30 (b) There has been no specific admission of liability by the defendant as a consequence of being a member of the Group Proceeding; 31 (c) The defendant removed himself from the agreement with M&K and had refused to participate in ongoing representation after 30 September 2010;32 (d) In the event that the Court finds the defendant did not opt-out of the Group Proceeding, he was not properly notified by post in accordance with the order of Judge Croft on 2 March 2012.33 [107] The plaintiff responds to these matters at paragraph 3 of its Reply as follows: 3. The Plaintiff denies the allegation that the Defendant was not a group member in the Group Proceeding (including at paragraphs 8, 9, 12, 13, 15, 18, 22 of the Defence) because: (a) the Group Proceeding was filed, and brought, on behalf of those group members identified within paragraph 2 of the Further Amended Statement of Claim dated 3 December 2012 filed in the Group Proceeding, as summarized in paragraph 8A of the Amended Statement of Claim in this proceeding; (b) no monies were requested, or required, of group members to become, or remain, group members of the Group Proceeding; (c) whether the Defendant had an agreement with Macpherson + Kelly Lawyers is irrelevant to whether the Defendant was a group member of the Group Proceeding; (d) the determination of group membership in the Group Proceeding therefore does not involve any consideration of payment of any instalments as alleged; (e) the only valid process for a group member to opt-out of the Group Proceeding was as pleaded in paragraphs 8D of the Amended Statement of Claim; (f) if (which is denied) there was any deficiency in the way that the Defendant was notified of the opportunity to opt-out of the Group Proceeding then the Defendant is nonetheless still bound as a group member in the Group Proceeding because: (i) section 33Y(7) Supreme Court 1986 (Vic) provides that a failure to receive the opt out notice does not affect the steps taken in the Group Proceeding, including the orders of 11 December 2014 ordering the approval of the Settlement Deed; and 29 Amended Defence at para 8. 30 Amended Defence at paras 8, 9, 12, 13, 15, 18, 22. 31 Amended Defence at para 22. 32 Amended Defence at para 9. 33 Amended Defence at para 9, 22. -- 22 of 29 -- 23 (ii) the appropriate remedy for an aggrieved group member is to apply in the Group Proceeding pursuant to sections 33KA or 33J Supreme Court Act 1986 (Vic); (iii) the Defendant has not sought, nor obtained, any such order; (g) the Defendant did not opt-out of the Group Proceeding; (h) the Defendant was listed within Schedule 4 of the Settlement Deed as an “M+K Client” and (i) the Defendant signed and gave to M+K Lawyers a Request for Distribution dated 1 June 2015 by which he sought, and obtained, a distribution only available to “M+K Clients” under the Settlement Deed in the Group Proceeding. [108] It appears from his defence that Mr Nye’s primary contention as to why he is not a group member is that he did not elect to remain a Group Member and that his election not to remain arose from his acts of terminating his retainer with M&K and ceasing to pay “instalments”. [109] There are two problems with these argument. [110] The first problem is that there is evidence that Mr Nye remained an M&K client at the time of execution of the Settlement Deed and that he sought and received benefits arising from that status under that Deed.34 (a) Mr Nye is listed at page 45 of the Deed of Settlement (being the Schedule) as an M+K Client;35 (b) On 19 July 2018 M&K responded to a Notice of Non-Party Disclosure filed 6 July 2018 by the plaintiff. Those documents produced included a request for distribution in the Great Southern Class Action from M + K Lawyers.36 In that application the Defendant identified himself by grower ID G45853. Further by the request for distribution, the Defendant warranted: “that I paid fees to participate as a client of Macpherson + Kelly Lawyers Pty Ltd (M + K) in the Great Southern class action. As part of the Great Southern settlement approved by the Court on 11 December 2014 by the Supreme Court of Victoria, I understand that I am entitled to receive a portion of the settlement proceeds paid to and held by M + K based pro rata on the amounts paid by each M + K client to M + K in relation to the class action.” (c) The Request was included in a Notice Admit Facts and was not disputed by Mr Nye;37 (d) M&K’s response also included records of Trust Account entries which show amounts credited to Mr Nye and then debited by reference to costs incurred by M&K.38 This is consistent with Mr Nye remaining a client of M&K up to completion of the settlement terms. 34 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at paras 74 and 80; Afd of K E Kipps sworn 23.07.18 (filed 23.07.18) (eCourt Doc 16) at para 26, pp 22-23 KEK-1. 35 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at paras 73, 74, EXH SFS-4 at 718. 36 Afd of K E Kipps sworn 23.07.18 (filed 23.07.18) (eCourt Doc 16) at para 26, KEK-1 at page 20. 37 Afd of K E Kipps sworn 13.08.18 (filed 13.08.18) (eCourt Doc 26) EXH KEK-2 at the Notice to Admit. 38 Afd of K E Kipps sworn 23.07.18 (filed 23.07.18) (eCourt Doc 16) at para 26, pp 22 to 23 KEK-1. -- 23 of 29 -- 24 [111] There is no evidence to contradict the inferences which arise from this material. I am satisfied that Mr Nye remained a client of M&K up to completion of the settlement. [112] The second problem is that Mr Nye’s contention that he was not a client of M&K or not is irrelevant to whether he was a group member. The Part 4A of the Supreme Court Act 1986 (Vic) (the SCA (Vic)) regulated the Group Proceeding. The scheme created by Part 4A is an “opt out” scheme. That is, consent is not required from a person who falls within the scope of the group identified in group proceeding: s. 33E SCA (Vic). Rather, a person who is within the scope of the group must opt out of the group proceeding by notice in writing given before the opt out date specified by the Court: s. 33J SCA (Vic). [113] Unless Mr Nye can establish that he opted out in accordance with the statute, he will have remained a group member. There is no evidence from Mr Nye that he opted out. Given that I am satisfied he was within the scope of the defined group, it would be open properly to conclude on this application that he did not opt out. This is a situation where an evidential onus lay on him to make good the alleged opting out. In any event, there is evidence that he did not opt out in the form of a statement by an officer of the Supreme Court of Victoria that no opt-out notice was filed in the Group Proceedings by Mr Nye.39 [114] I am satisfied that Mr Nye did not opt out of the Group Proceedings and remained a group member until completion of the settlement. Alleged failure to notify of opt out option [115] The defendant pleads that he was not properly notified by post of his option to opt out (see ss. 33J and 33X SCA (Vic)) in accordance with the order of Judge Croft on 2 March 2012.40 [116] This allegation does not assist the defendant in defence of the claim: (a) First, the evidence before the Court is that notices were sent to group members,41 and were advertised in major newspapers in each state.42 There is evidence from which I can infer notice was given to him. Mr Nye gives no evidence to answer that inference; (b) Second, s. 33Y(7) SCA (Vic) provides, in effect, that a failure to receive the opt out notice does not affect “a step taken, an order made or a judgment given” in the Group Proceeding. That section would apply, relevantly, to the orders of 11 December 2014 the approving the Settlement Deed. Accordingly, even if it could be proven that the defendant did not receive the opt out notice, this is ultimately of no consequence as absent evidence the defendant filed an opt out notice, the defendant remained a group member. His remedy, if he had not received the opt out notice and wished not to be bound by the 33V orders and 39 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at EXH SFS-1, p 101. 40 Amended Defence at para 9, 22. 41 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at [63], pp 92 to 95 of SFS-1. 42 Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at [64], pp 96 to 98 of SFS-1. -- 24 of 29 -- 25 the Settlement Deed authorised thereunder, would appear to arise under 33KA of the SCA (Vic). There is no evidence of any such application. Conclusion [117] For the above reasons, I am satisfied on the material before the Court that Mr Nye has no real prospect of establishing that he was not a group member at all relevant times, including at the time of the orders approving the settlement set out in the Settlement Deed. The plaintiff contends that the consequence is that Mr Nye is bound by the Settlement Deed. 43 In my view, that conclusion is plainly correct in the light of the terms of the relevant order approving the settlement and the Settlement Deed. [118] His Honour’s orders approving the settlement in paragraph [39] expressly authorise the lead plaintiffs to enter into the Deed of Settlement on behalf of the group members. That order has been held to be effective to bind Mr Nye as a group member.44 The fourth issue: effect of Settlement Deed [119] It has been contended (unsuccessfully) in a number of cases following the Settlement Deed that the deed does not bind group members according to its terms, at least in respect of claims other than those litigated in the Group Proceedings. These contentions have not met with success. [120] Bendigo and Adelaide Bank Limited v Gaedtke [2017] QDC 202 (Gaedtke) concerned determination of the separate question as to whether the defendant by the Settlement Deed is estopped from denying the executed loan deed is valid and enforceable against the defendant. Judge Dorney QC found that the defendant was a group member and held that the defendant was estopped from denying the loan deed was valid and enforceable.45 [121] In coming to this conclusion, His Honour considered the precedential effect of Bendigo and Adelaide Bank Ltd v. Pekell Delaire Holdings Pty Ltd (2017) 118 ACSR 592 (Pekell) a case where the Court of Appeal of the Supreme Court of Victoria considered “exactly the same legislation involving the same Deed of Settlement being approved by the same Justice”.46 [122] In Pekell, Justices Santamaria, Ferguson and McLeish observed [footnotes omitted]: [57] It would be highly surprising if pt 4A precluded parties to a group proceeding from resolving the common claims between them on terms which also bring finality to other issues outstanding between those parties or, in the case of a plaintiff, the group members that plaintiff represents. Full releases of all outstanding claims, whether at issue in the relevant proceedings or not, are not uncommon. The respondent’s submission, if correct, would impose a remarkable constraint on those negotiating settlements of group proceedings. [58] The respondent submitted that s 33ZF of the Supreme Court Act 1986, which empowers the Court to make any order it thinks ‘appropriate or necessary to ensure that justice is done in the proceeding’, is to be confined by its reference to justice being done ‘in the proceeding’. 43 Reply filed 13.08.18 (eCourt Doc 25) at para 4. 44 Bendigo and Adelaide Bank Ltd v Pekell Delaire Holding Pty Ltd (2007) 118 ACSR 592. 45 Bendigo and Adelaide Bank Limited v Gaedtke [2017] QDC 202 at [52]. 46 Bendigo and Adelaide Bank Limited v Gaedtke [2017] QDC 202 at [43]. -- 25 of 29 -- 26 However, that argument advances no further than repeating the assertion that the proceeding could not be settled so as to bind group members except in respect of the common claims. For the reasons given, there is no basis for that assertion. Instead, as explained in Byrne, s 33ZF enables a Court approving a proposed settlement of a group proceeding to make orders binding a plaintiff, group members and other parties to the settlement or authorising a plaintiff to enter into and give effect to the settlement on behalf of group members. Such an order supplies the privity which, as the High Court observed in Timbercorp, is otherwise absent in respect of the individual claims of group members. This then enables the group proceeding to be settled on whatever terms the parties have agreed and the Court has approved. Because the privity which is absent in respect of a judgment is able to be provided by virtue of the Court’s orders when approving a settlement, Timbercorp and Byrne are addressed to different situations. The respondent’s submission that the decisions are inconsistent must therefore be rejected. [59] For each of the above reasons, the deed of settlement applies in accordance with its terms. To the extent it applies to the respondent, the deed is effective to preclude it from advancing the disputes and claims upon which it relies. [123] In this proceeding, the plaintiff relies on clause 4.1.4 of the Settlement Deed. As I have noted, it has been held in a number of cases that this clause is effective according to its terms and binds plaintiffs and group members alike. The plaintiff relies on the clause in this case as a complete answer to the challenges by Mr Nye to the validity and enforceability of the Loan Deed. Given my conclusion in paragraph [95] above, it is essential to the success of the plaintiff’s application that clause 4.1.4 is effective to answer that challenge to the enforceability of the Loan Deed. [124] In my view, it is. As the above authorities make clear, clause 4.1.4 ought to be construed according to its ordinary meaning and is not confined to issues raised in the Group Proceedings. In my view, Mr Nye is estopped by deed from disputing the “validity or enforceability” the Loan Deed on any basis, including that he is not bound by it because he did not authorise GSF to enter into the Loan Deed on his behalf. The last issue: proceedings not statute barred [125] The defendant asserts that the Plaintiff is statute barred from proceeding with its claim. The defendant relies on section 10 of the Limitations of Action Act 1974 (Qld) and section 38 of the Limitation of Actions Act 1936 (SA). These provisions provide: 10 Actions of contract and tort and certain other actions (1) The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action arose— (a) subject to section 10AA, an action founded on simple contract or quasi-contract or on tort where the damages claimed by the plaintiff do not consist of or include damages in respect of personal injury to any person; (b) an action to enforce a recognisance; (c) an action to enforce an award, where the agreement to arbitrate is not by an instrument under seal; (d) an action to recover a sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of a penalty or forfeiture. (2) An action for an account shall not be brought in respect of a matter that arose more than 6 years before the commencement of the action. (3) An action upon a specialty shall not be brought after the expiration of 12 years from the date on which the cause of action accrued. 38—Limitation on actions for recovery of money -- 26 of 29 -- 27 (1) Subject to subsection (2), an action for the recovery of money paid under a mistake (either of law or of fact) or otherwise based on restitutionary grounds must be commenced— (a) if the cause of action arose on or after the commencement of this section—within 6 years after the cause of action arose; or (b) if the cause of action arose before the commencement of this section—within the limitation period that would have been applicable if this section had not been enacted or 6 years after the commencement of this section (whichever expires first). [126] Further, the defendant asserts that as he was not a party to the Settlement Deed referred to in the Amended Statement of Claim, the provisions of Section 10(3) of the Limitations of Action Act 1974 (Qld) and section 34 of the Limitation of Actions Act 1936 (SA) do not apply. 10 Actions of contract and tort and certain other actions (3) An action upon a specialty shall not be brought after the expiration of 12 years from the date on which the cause of action accrued. 34—Limitation of action on specialty All actions for rent reserved by any lease by deed and all actions of covenant or debt upon any bond or other specialty or upon any judgment or recognisance shall be commenced and sued within fifteen years next after the cause of action accrued or the recovery of the judgment and not after: Provided that if any acknowledgment has been made either by writing signed by the party liable by virtue of the deed bond specialty judgment or recognisance or his agent or by part payment or part satisfaction of any principal or interest being then due thereon, any person entitled to any such action may bring an action for the money remaining unpaid and so acknowledged to be due within fifteen years after that acknowledgment by writing or part payment or part satisfaction. [127] The plaintiff contends in its Reply that its claim is not statute barred. In summary, the plaintiff contends that: (a) The plaintiff’s cause of action arose when the Defendant fell into default under the Loan Deed by failing to pay the monthly instalments due on and from 30 June 2009. (b) Clause 25 of each loan deed provided that the deed was to be governed by the laws of Western Australia. Section 18 of the Limitation Act 2005 (WA) relevantly provides: “Deeds – 12 years An action on a cause of action founded on a deed cannot be commenced if 12 years have elapsed since the cause of action accrued.” (c) These proceedings commenced on 29 November 2016, within 12 years of the cause of action arising. (d) Therefore, the plaintiff’s claim is not statue barred.47 [128] The plaintiff relies on the decision of ABL Custodian Services Pty Ltd & Anor v Taylor [2017] QDC 212 (Taylor). The case concerned an appeal from a Magistrate’s refusal of the appellant’s application for default judgment on the basis that the claim was time-barred. His Honour Judge Reid set aside the Magistrate’s decision. Having 47 Plaintiff’s Submissions at para 61 to 66. -- 27 of 29 -- 28 regard to section 18 of the Limitation Act 2005 (WA) and Clause 25 of the Deed of Compromise, His Honour found at paragraph 18 that “the applicable limitation period appears clearly to have been one of 12 years and not six years as the primary court.” [129] Ultimately, the question is whether or not the limitation period has in fact expired as the defendant contends. [130] I find that the plaintiff’s claim is not statute-barred for the following reasons: (a) Clause 25 of the Loan Deed dictates that the deed was to be governed by the law of Western Australia; (b) Section 18 of the Limitation Act 2005 (WA) provides the claim must be brought within 12 years; (c) The cause of action arose on 30 June 2009 and the claim was brought on 29 November 2016, well within the relevant limitation period. [131] Even if the Queensland equivalent provisions were applied, as the defendant contends, the proceeding would arguably have still been brought within time. His Honour Judge Reid observed that even applying the Queensland equivalent of the WA provision, it appears strongly arguable that the limitation period had not expired because the claim was one for a “speciality”. At paragraph [17], His Honour states: While “speciality” is not defined in the body of the Limitation of Actions Act, it is a term usually used to donate a contract under a seal and a speciality debt is an obligation under seal securing a debt (see State Government Insurance Commission v Teal (1990) 2 WAR 105 at 114 and Attwell v Roberts (No 3) [2009] WASC 96 at para 151). [132] His Honour’s observations are applicable to the case at hand. The claim is for moneys payable under a deed of loan, arguably a “specialty” within the meaning of Section 10(3) of the Limitations of Action Act 1974 (Qld). Entitlement to the sum claimed [133] The result of the above analysis is that the plaintiff is entitled to summary judgment for amounts claimed to be due in accordance with the Loan Deed, subject to the interest relief agreed to in the Settlement Deed. For completeness I observe that I am also satisfied that there is no need for a trial of the claim. [134] I refer to paragraphs [48] to [52] above. As noted there, it is my view of the terms of the Loan Deed that the principal sum is not “due and payable” during the period of the loan unless there is an acceleration event and a demand is made. While it can be accepted there was an acceleration event on failure to pay interest instalment due in June 2009, the only demand pleaded or proved is that which was given on 27 June 2016. The obligation to pay that part of the Moneys Payable under the Loan Deed represented by the principal sum had not become “due and payable” until the failure to comply with the demand given on 27 June 2016. The result is that the default interest rate was not applicable to the principal sum under clause 5.1(b) of the Loan Deed until that date. [135] The loan account in evidence does not appear to be calculated on that basis. As I read that document, default interest has been added calculated on the whole of the principal sum from February 2010. The plaintiff is not entitled to summary judgment on that -- 28 of 29 -- 29 part of its claim. As the default interest appears to have been capitalised with further default interest being charged on those sums, I am unwilling to try to calculate the correct sum due. [136] I direct the plaintiff to file a revised calculation of the amount claimed which takes into account the matter raised in this section of my reasons. Other matters [137] I see no reason to make the declarations sought in the claim. They reflect issues determined in the course of determining the claim for relief. No good purpose seems to be served by them. [138] I also note the alternative application for judgment arising from Mr Nye’s failure to comply with obligations under the UCPR, including disclosure. That application was not strongly pressed and is otiose in any event given my intention to order summary judgment. [139] Finally there is the question of costs. The plaintiff seeks costs of the proceedings on an indemnity basis. Despite the pleading in paragraph 21 of the amended statement of claim of a claim to costs under the covenant to pay legal costs contained in the Loan Deed, it appears from the claim that the plaintiff seeks costs pursuant to an order of the Court.48 [140] That inference is confirmed by consideration of the statement of Mr Nye’s loan account, which shows that the judgment sum claimed excludes all but one de minimis sum for legal costs.49 [141] Assuming that the claim to indemnity costs is based on the Court’s power to award costs rather than the covenant in the Loan Deed, the approach the Court ought to take is as follows. The Court is not bound by the agreement and costs remain in its discretion, though the discretion will ordinarily be exercised in accordance with the term or covenant agreed to by the parties. [142] In this case, the Loan Deed by clause 7(c) included in Moneys Payable the following costs and expenses: All costs and expenses incurred by the Lender in relation to the enforcement, protection or wavier of any rights under this Document including...legal costs and expenses ...on a full indemnity basis. [143] The legal costs and expenses incurred in this proceeding would fall within the scope of that clause and I can see not good reason why the Court’s discretion should not be exercised in accordance with it. Accordingly, I order costs of the proceedings be paid on an indemnity basis by the defendant. 48 Abigroup Limited v Sandtara Pty Limited [2002] NSWCA 45, Stein JA (with whom Giles JA and Young CJ in Equity agreed at [7]; Lee v Australia and New Zealand Banking Group Ltd [2013] QCA 284 at [9]; Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87. 49 The sum claimed in the pleading is $65,256.19 as at 1 November 2016 which is shown in the statement of account at Afd of S Flamer-Smith affirmed 27.07.18 (filed 14.08.18) (eCourt Docs 27-30) at EXH SFS-1 at 90. -- 29 of 29 --