Australia and New Zealand Banking Group Ltd v Glass [2006] QDC 371

DISTRICT COURT OF QUEENSLAND CITATION: Australia and New Zealand Banking Group Ltd v Amanda Marie Glass (aka Amanda Marie Cranley) [2006] QDC 371 PARTIES: AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD Plaintiff v AMANDA MARIE GLASS (aka AMANDA MARIE CRANLEY) Defendant FILE NO/S: BD3040 of 2005 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Brisbane DELIVERED ON: 20 October 2006 DELIVERED AT: Brisbane HEARING DATES: 21 September 2006 JUDGE: McLauchlan QC DCJ ORDER: 1. Leave to withdraw admissions made in Defence 2. Leave to file amended Defence 3. Application for summary judgment refused CATCHWORDS: Application for summary judgment based in part on admissions in Defence; Cross-application for leave to withdraw admissions COUNSEL: Mr Forde for the Plaintiff Mr Telford for the Defendant SOLICITORS: Deacons for the Plaintiff WHD Lawyers for the Defendant -- 1 of 10 -- 2 [1] The plaintiff was the mortgagee in possession of a farm property owned by the defendant’s husband. That property was sold by the plaintiff by auction on 2 April 2005. The defendant bid at the auction and subsequently signed a contract as purchaser. That contract was not completed, and the plaintiff purported to terminate it for breach. Subsequently the property was resold by the plaintiff by a contract of sale dated 2 June 2005, the contract being completed on 30 June 2005. The plaintiff then commenced proceedings against the defendant, on 15 August 2005, to recover the deficiency in price on resale of the property, plus expenses. The amount claimed is $115,000. [2] A defence was filed on 14 October 2005 which raised a question of construction of the contract, pertinent to the plaintiff’s ability to terminate it, and alleged a failure to take reasonable care to ensure that the property was resold at market value. [3] In July 2006 the plaintiff applied for summary judgment pursuant to r 292 UCPR. The application was apparently adjourned on agreed terms, and on 14 September 2006 the defendant applied for leave pursuant to r 188 UCPR to withdraw admissions made in the defence, and also sought leave to file an amended defence in the form of a draft pleading exhibited to an affidavit in the proceedings. [4] The defendant, in an affidavit filed on 18 September 2006, deposed that she married one Rod Glass in October 2000 and that the farm property had been purchased by him, or by a corporate entity controlled by him, about 12 months before the marriage. Her husband was then, and had for many years been, represented by Messrs Cleary & Lee, solicitors of Toowoomba. [5] At about Christmas of 2004 the defendant and her husband had moved back into her house in Toowoomba, as the bank had taken steps to take possession of the farm -- 2 of 10 -- 3 and to auction the property. Mr Glass subsequently went overseas endeavouring to raise funds to pay out the bank. A day or so before the auction the defendant received a number of overseas phone calls from her husband, requesting the defendant to bid “for him” at the auction. He told her to bid up to $750,000 and said that finance had been secured through an organisation called Credit Net Finance, and that a deposit would be paid by a company called Heifer Creek Holdings Pty Ltd, a company used as a vehicle by Mr Glass who was a shareholder and director together with the defendant. The defendant said that her husband was involved in numerous companies and trusts and that she had had no dealings in relation to any of them. Her husband also indicated to her that a fax would arrive for her prior to the auction sale, confirming that finance was available for the purchase. The defendant did come into possession of a fax shortly prior to the auction but no longer has the document, she and her husband having become estranged in July of this year, and he having taken all documents in relation to his various interests with him when he left. Her recollection is that it was a document from Credit Net Finance confirming the provision of funds to Heifer Creek Holdings Pty Ltd to complete the purchase of the property. [6] On Saturday, 2 April 2005 the defendant attended the auction with the fax. She says that she spoke to the estate agent, Wondah Lollback, who she knew had been trying to sell the property on her husband’s behalf for some time, and was now effecting the sale on behalf of the ANZ Bank. She said that she stated that she wished to register to bid on behalf of her husband and was told that she would have to speak to Phil Ashe, a manager in the employ of the plaintiff who was to be present at the auction. She also states that she showed Wondah Lollback the fax, or alternatively she showed it to another agent, one Kerry Kelly. She cannot recollect -- 3 of 10 -- 4 whether she mentioned to either of them that she would be bidding on behalf of Heifer Creek Holdings Pty Ltd. [7] She said she spoke to Philip Ashe prior to the commencement of the auction. Again she has no clear recollection of mentioning to him that she would be bidding on behalf of Heifer Creek Holdings Pty Ltd but she did show him the fax which specifically referred to finance being provided to Heifer Creek Holdings Pty Ltd. She says that she sought his permission to bid on behalf of her husband and that his reply was that he “could not stop me”. [8] Prior to the auction she registered as a bidder by completing the appropriate form. She registered in her own name because a driver’s licence number was required although she considered that she had made it clear to the agents and Philip Ashe that she was bidding on behalf of her husband, or more specifically Heifer Creek Holdings Pty Ltd. [9] Following the auction she was called over by Wondah Lollback to sign the contract and she sought to sign it in the name of Heifer Creek Holdings Pty Ltd, but was told by Wondah Lollback that she had to sign the name stated on the bidding card. She then took the matter up with Philip Ashe pointing out that she was not buying the farm for herself but for her husband, and indicated to him that she had been told by the agents that he could approve the sale being to Heifer Creek Holdings Pty Ltd and to her signing the contract on that basis. She says that he made it plain that her only course of action was to sign the contract in her name. She did this and drew a cheque for the deposit of $51,000 on the Heifer Creek Holdings Pty Ltd account. [10] She recalled later in the day, when her husband rang her about the auction, telling him that she had not signed the contract in the name of Heifer Creek Holdings Pty -- 4 of 10 -- 5 Ltd, and his indicating to her that that would not matter because it could be changed when everything was finalised. [11] Subsequent to that she did not recall having any involvement with the matter. In the following week her husband returned from overseas and took over control of the matter including all documents, in particular the fax referred to above. She acknowledged having been given a copy of the contract after signing it at the auction, and that that must somehow have been conveyed to Messrs Cleary & Lee but she has no recollection of doing that. From her point of view the farm was her husband’s, and it was being bought back for him. She can recall some talk of extending the contract to enable the payment of the balance monies of approximately $450,000 to be paid. [12] She recalled only one discussion at the offices of Cleary & Lee solicitors which involved attendances by Bill Nunan, Roderick Glass and the counsel who she understood was appearing in some federal court proceedings against her husband, or advising in respect of those proceedings. However her recollection is that the only discussions which took place on that day, in which she had no real significant participation, substantially focused upon the Federal Court proceedings. She said that she certainly did not provide detailed instructions of any nature in relation to the District Court proceedings either to any representative of Cleary & Lee or to the counsel who apparently drafted or settled the defence in those proceedings. [13] The defendant also deposed that she had never previously attended an auction, except at sale yards, for livestock, when she was a child. She knew from television programmes that there was something called a bidding card and there was some procedure to register to bid at an auction. Her understanding was that she could bid -- 5 of 10 -- 6 on behalf of any person or entity she was representing as long as she registered in that fashion. [14] An affidavit has been filed by John Damien Andrews, a solicitor in the employ of WHD Lawyers, who are now the solicitors for the defendant. The solicitors received instructions in the matter shortly before the original return date of the application for summary judgment, 18 August 2006. He deposes that Messrs Cleary & Lee maintain that they have a lien over the defendant’s file and claim outstanding legal fees of approximately $28,000 of which particulars have not yet been provided. Messrs Cleary & Lee have indicated that the file will not be released until outstanding fees have been paid. Mr Andrews deposes to concerns that: (a) full and proper disclosure has not been made by any party in the present proceedings, specifically by the plaintiff bank; (b) based upon the affidavit sworn by the defendant and her instructions to him her interests may not have been fully protected in relation to the defence which has been filed and served on her behalf and the admissions made in that document regarding the contract of sale entered into on 2 April 2005; (c) the proper investigation of the matters raised in the defendant’s affidavit will require disclosure from third parties including Roderick Glass and associates of his, Messrs Cleary & Lee and Heifer Creek Holdings Pty Ltd; (d) the rights and entitlements of the defendant in these proceedings will be compromised if all of those matters are not dealt with by way of a trial in the present proceedings. -- 6 of 10 -- 7 [15] An amended defence and counter-claim has been drawn and is exhibited to his affidavit. The amended defence involves a withdrawal of admissions in the original defence, essentially to the effect that the defendant was the purchaser under the original contract and is personally bound by its terms. Effectively, the proposed amended defence replaces almost the entire earlier pleading. [16] Mr Ashe has filed an affidavit in which he says: “3. The defendant did not, at any time prior to the auction, say to me that she was bidding on behalf of Roderick Glass, or on behalf of Heifer Creek Holdings Pty Ltd. 4. The defendant purchased the property for $510,000, having made the highest bid for the property. 5. After the auction Wondah Lollback of Clifton Real Estate arranged for the defendant to sign the contract of sale. 6. I recall that at that time Mrs Lollback and the defendant had a conversation in my presence in which the defendant stated that she wished to sign the contract in the name of a company, to which Mrs Lollback responded that the defendant was required to sign the contract as Amanda Glass as she had registered to bid in her own name. 7. I had a further conversation with the defendant after the auction in words to the effect of the following – “Mrs Glass, ANZ will consider allowing the contract to be amended to note a company as a purchaser, however if you wish to make that amendment, ANZ will require personal guarantees from the directors of the company”. 8. The defendant then signed the contract in her individual right. 9. The defendant did not contact me at any time subsequent to the auction to amend the name of the purchaser under the contract of sale” [17] In cross-examination upon his affidavit the witness reiterated that the defendant did not say that she would be bidding on behalf of her husband. He acknowledged that she did show him a fax about finance being approved with respect to the purchase. -- 7 of 10 -- 8 He confirmed that the defendant indicated that she wanted to sign the written contract on behalf of Heifer Creek Holdings Pty Ltd but was told by Wondah Lollback to sign in accordance with the bidding card. He denied telling the defendant that she could not sign on behalf of the company. He acknowledged that a deposit cheque was drawn by Heifer Creek Holdings Pty Ltd. [18] An affidavit as to Wondah Lollback’s recollection is sworn to on information and belief by Michael Lenicka a solicitor acting for the plaintiff. Paragraphs 2 and 3 of his affidavit read as follows: “I am today informed by Wondah Lollback, and I believe it to be true, that: (a) Wondah Lollback was aware, at the time of the auction held on 2 April 2005, that: (i) the defendant was the wife of Roderick John Glass; (ii) Roderick Glass was the registered proprietor of the property; and (iii) ANZ was selling the property as mortgagee exercising power of sale. (b) the defendant completed and signed the registration card in her own name; (c) the defendant did not advise Wondah Lollback that she wished to purchase the property on behalf of a party other than herself until after she had successfully bid for the purchase of the property; and (d) after the auction Wondah Lollback asked the defendant to sign the contract of sale for the property. 3. I am further informed by Wondah Lollback, and I believe it to be true, that when asked by the defendant to note Heifer Creek Holdings Pty Ltd as the purchaser under the contract Ms Lollback advised the defendant that the defendant was obliged to sign the contract in the name of the registered bidder rather than any other party.” -- 8 of 10 -- 9 [19] I considered the defendant to be essentially a truthful witness who had been placed in a difficult position by her husband viz a viz the Bank. It is not clear from her evidence, and it is denied by other witnesses, that she made any unqualified assertion that she was bidding at the auction on behalf of her husband or alternatively on behalf of Heifer Creek Holdings Pty Ltd. I think, however, that it is likely that remarks of that general nature were made by her either to Ms Lollback or to Mr Ashe, and I also think it is likely that the facsimile which in substance identified the purchaser as Heifer Creek Holdings Pty Ltd was shown either to Ms Lollback or the other agent, and it is conceded that it was shown to Mr Ashe. I think there was a sufficient indication given by the defendant that she was not there to purchase the property in her own right, and that the estate agents and representative of the bank would have expected that to be the case, knowing, as they did, that the property was owned by her husband and that the bank was exercising a power of sale in relation to it. [20] The defendant cannot establish that she disclosed the name of a particular principal on behalf of whom or which she was acting, but I think it is likely that she sufficiently conveyed to the agents and the bank that she was not acting on her own behalf. As stated in The Law of Contract by Treitel 11th edition at page 734, the agent is both entitled and liable where the principal is undisclosed, but this rule does not apply where the agent uses words of representation and the principal is only unnamed, e.g. Universal Steam Navigation Co. v James McKelvy & Co. (1923) AC 492; Benton v Campbell, Parker & Co. Ltd (1925) 2KB 410. Where an agent does not name his principal, it may be easy to infer that he intended to contract personally; but there is no general rule to that effect: N and J Vlassopulos v Ney Shipping Ltd (1977) 2 Lloyd’s rep. 478. -- 9 of 10 -- 10 [21] It is also pointed out in Cheshire and Fifoot’s Law of Contract 14 th edition at page 536 that the contract is construed according to its natural meaning and, if it clearly shows that the agent must have been understood to have contracted merely as an agent, then, despite the fact that the principal for whom he acted has not been named, effect is given to the natural meaning of the words, and he drops out of the transaction. The position is illustrated in Southwell v Bowditch (1876) 1 CPD 374 (written contract) and N and J Vlassopulos v Ney Shipping Ltd (supra) (oral contract). [22] The contract was made when the defendant bid for the property and her bid was accepted. With respect to that contract, as I have indicated, I think it likely that the defendant had conveyed to the agents and the bank that she was not bidding in her own interest, but as an agent. The subsequent written document was signed by her in her own name over her objections and her desire to sign it on behalf of Heifer Creek Holdings Pty Ltd. There is, at least, sufficient doubt concerning these matters to warrant a trial of the issue, aided by disclosure and other pre-trial procedures. In my opinion delay in making the application is not an issue, and although the plaintiff will suffer some prejudice in being deprived of the right to have its application for summary judgment heard, that prejudice is of a procedural nature, not going to the merits of the dispute. [23] In this situation it is proper to allow the admissions made in the defence to be withdrawn. I give leave accordingly, and leave to file the amended defence in the form of the draft pleading exhibited to the affidavit of John Damien Andrews sworn on 14 September 2006. [24] In the circumstances the application for summary judgment is refused. I will hear submissions on costs. -- 10 of 10 --