Bank of Queensland Limited v Banjanin & Anor [2014] QSC 131

SUPREME COURT OF QUEENSLAND CITATION: Bank of Queensland Limited v Banjanin & Anor [2014] QSC 131 PARTIES: BANK OF QUEENSLAND LIMITED (ACN 009 656 740) (applicant) v PETER BANJANIN (first respondent) ATHENA BANJANIN (second respondent) FILE NO/S: BS742/13 DIVISION: Trial PROCEEDING: Application DELIVERED ON: 16 June 2014 DELIVERED AT: Brisbane HEARING DATE: 3 June 2014 JUDGE: Alan Wilson J ORDER: The order of the court is that: 1. Leave be granted to add Favour Investments Pty Ltd as a counterclaimant to the proceeding; and 2. The amended pleading be filed by 4pm on 30 June 2014. CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES – PLEADING – DEFENCE AND COUNTERCLAIM – where the respondent bank is suing the applicants for defaulted loan repayments – where the applicants allege that the respondent owed them a duty of care which it breached by taking financial advantage of them – where the applicants also allege that one of the respondent bank’s managers made misleading representations about the loan and the value of the relevant property – where the applicants counterclaimed for damages – where the applicants seek to add a company as a counterclaimant – where the applicants were guarantors of the respondent’s loan to the proposed counterclaimant company – whether the company should be added as a counterclaimant -- 1 of 3 -- 2 Uniform Civil Procedure Rules 1999 (Qld), r 65, r 69 COUNSEL: J M To, Solicitor, for Bank of Queensland Limited P Banjanin for himself, and Athena Banjanin SOLICITORS: HWL Ebsworth Lawyers Respondents represent themselves [1] Wilson J: The Bank is pursuing Mr and Mrs Banjanin for money it says they borrowed, but have defaulted in repaying. Almost $2m is claimed. They do not have lawyers, and represent themselves. [2] They say that they were lured into the borrowings by one of the Bank’s managers in circumstances that were unjust and inequitable, and that they should be compensated for that. Their defences and counterclaims allege that, in the transactions which led to and involved the borrowings, the Bank owed them a duty of care which it breached by ‘taking financial advantage’ of them by ‘inducing [them] to borrow such a large amount of money against property which did not have sufficient real value or equity to support such a loan and in instances where [they] did not have financial capacity to service the loan…’.1 [3] They go on to allege that the Bank’s manager ‘…made representations about the loan and value of the property and the transaction which were untrue and misleading and inducing, and the [Bank] ought not be permitted to rely on the strict wording of the Loan Agreements in instances where their behaviour has not been forthright and in good faith’.2 [4] They counterclaimed for damages. Now they wish to add as a counterclaimant a company called Favour Investments Pty Ltd. Both sides have filed pleadings and affidavits but I could not find any information about the persons who are office bearers of or shareholders in Favour. [5] Despite that, it may safely be inferred that Mr and Mrs Banjamin have a strong connection with the company. They have prepared a draft counterclaim adding Favour as a counterclaimant which alleges that it ‘... was a company trusted with managing the Banjanin family set of trusts … set up for the provision the first and second defendant and their children…’ [sic].3 The Bank’s own statement of claim alleges it loaned Favour $425,000 as the ‘trustee for the Banjamin Family Trust No. 2’.4 [6] Mr and Mrs Banjanin were guarantors of the Bank’s loan to Favour. The Bank’s proceedings do not name Favour as a defendant, but include allegations of default on its part and claims against them for $476,371.44 as guarantors (and as mortgagors, under various security documents). [7] At the hearing Mr Banjanin produced a draft statement of claim showing what, he said, Favour would claim if it was allowed to join the action as a counter-claimant. 1 Defences of First and Second Defendants filed 28 February 2013, paragraph 3. 2 Ibid. 3 Affidavit of Peter Banjanin filed by leave 3 June 2014, Exhibit H ‘Draft Counterclaim’ paragraph 2(a). 4 Statement of Claim filed 25 January 2013, paragraph 5. -- 2 of 3 -- 3 The draft pleading essentially repeats what the Banjamins had said in their own earlier defences and counterclaims about alleged wrongdoing by the Bank, and claims that Favour was ‘... forced to sell positively geared assets’ and lost potential capital gains. Although the draft pleading is sparse, and simply says that Favour’s loss is ‘… to be calculated’, it is sufficient to see that a claim may exist, and be capable of prosecution. [8] In oral submissions the Bank’s lawyer argued that losses of this kind were already in issue in the Banjamins’ counterclaims as guarantors, or that they could be separately pursued and should not be allowed to bog down this proceeding. The putative claims for capital and other losses from the forced sale of any of Favour’s assets may, however, be above and beyond the claims already brought by Mr and Mrs Banjamin as guarantors. Furthermore, this matter is already on the Supervised Case List, and orders contemplating an application to add another party have been made before. [9] The fact that this application has been flagged earlier does not, of course, affect the discretion the court must exercise in deciding it under UCPR r 69. Mr and Mrs Banjamin must show that adding Favour is necessary to enable the court to adjudicate effectually and completely on all matters in dispute in the proceeding,5 or whose presence as a party is desirable, just and convenient to enable the court to so adjudicate on matters connected with the proceeding.6 [10] Despite the lack of detail in the material the Banjamins have placed before the court about Favour’s involvement, there is sufficient to see that the company may have claims of its own, separate from anything they have counterclaimed as guarantors of its obligations. It is compelling that Favour’s dealings with the Bank are, in the phrase used in the rules, ‘connected’ with the proceedings and obvious that the Banjamins, as counterclaimants, will wish to argue that its alleged losses are part of the suite of damages they seek to pursue. [11] The fact the Bank has not named Favour as a defendant is not a barrier to its addition as a counter-claimant when, as here, the remedy Favour might seek is apparently part of the same series of transactions or events giving rise to the Bank’s action, and the Banjanins’ counter claims: UCPR, r 65. [12] Leave will be granted, then, to add Favour Investments Pty Ltd as a counterclaimant. An order was made by the supervising judge, Peter Lyons J, on 22 April 2014 that any application to that end must be brought on for hearing by 27 May, and any amended pleading filed by 10 June. The Bank’s lawyer did not take the point about the late hearing. It is appropriate to extend the time for deliver of the pleading to a fortnight from today, being 30 June 2014. [13] I will hear from the parties on costs. 5 Rule 69(1)(b)(i). 6 Rule 69(1)(b)(ii). -- 3 of 3 --