Barry v National Australia Bank Ltd [2000] QCA 12

1 [2000] QCA 12 COURT OF APPEAL PINCUS JA No 257 of 2000 DUCHESNE ROSE PHILLIPINE BARRY Appellant (Defendant) and NATIONAL AUSTRALIA BANK ACN 004 044 937 Respondent (Plaintiff) BRISBANE ..DATE 04/02/2000 JUDGMENT -- 1 of 9 -- 04022000 T22/FLC4 M/T COA8/2000 2 JUDGMENT PINCUS JA: This application, which I heard this morning, sought relief in respect of two matters: one, leave to file a notice of appeal against an order made on 7 December 1999, and secondly a stay pending determination of the appeal. Because Mr Sheahan, counsel for the respondent, says that he is not ready to argue the application for leave to file notice of appeal, I propose to deal with the stay only. The order, made on 7 December 1999, which is sought to be stayed was one that unless the applicant Mrs Barry paid a sum of $37,034.35 into Court within 28 days, the respondent bank should be at liberty to enter judgment to recover possession of certain land. The money was not paid into Court and so, subject to any order which may be made for a stay pending appeal, the bank is entitled to recover possession. The order which Atkinson J made was made on an application for judgment by the bank on the basis of a deed of settlement which I will mention later. The land the subject of the order was one on which there are three mortgages registered. First, one in favour of the bank; second, one in favour of a company called Equityloan Securities Proprietary Limited, and there is a third mortgage. There has also been registered an instrument giving the Equityloan mortgage priority over the bank's mortgage. There is an affidavit providing evidence that Mrs Barry is in default under both of the other mortgages, that is the mortgages other than the bank's, and the bank also says she is in default under its mortgage. The material discloses that the amount due under the third mortgage is -- 2 of 9 -- 04022000 T22/FLC4 M/T COA8/2000 3 JUDGMENT a matter of dispute. With respect to the Equityloan mortgage it is said the arrears are about $17,000 and the total of the debt is over $385,000. One of the principal matters upon which reliance was placed on behalf of Mrs Barry is an affidavit which she made providing evidence that, if the land in question on which her family home is situated has to be vacated, that will cause considerable hardship to those comprising her family and in particular a disabled daughter. It is unnecessary to go into the details of that or of those relating to another child who will be inconvenienced by moving. It seems clear however that the order cannot be stayed merely on that ground; there must be some reason to think that the order made by Atkinson J. was in error. For the purpose of determining that, it is not necessary of course to go into the facts in every case; it may be clear on the face of the matter, that there is a substantial appeal. Here, however, the matters sworn to are not extensive. It appears from the material that before the primary Judge Mrs Barry relied upon allegations against the bank in a letter which was signed by her and directed to the bank and dated 16 June 1998. In an affidavit filed in the present application she says in effect that she did not understand the letter; but in an affidavit used below Mrs Barry gives a contrary impression, describing the letter as "raising concerns I had over the way the plaintiff had dealt with me following the dissolution of my husband's legal practice and his bankruptcy". -- 3 of 9 -- 04022000 T22/FLC4 M/T COA8/2000 4 JUDGMENT There is also, in the material before the primary Judge, a letter dated 14 December 1998 signed by Mrs Barry and addressed to the bank asking that the bank agree to give the Equityloan mortgage which I have mentioned priority over the bank's mortgage. I understood it was argued for Mrs Barry that the material showed that the content of this letter was dictated by the bank but that does not appear to be so. All the material shows is the bank asked that a letter along these lines be sent. The letter argued, in order to induce the bank to agree to the proposal, that the bank's debts would obtain better security if the proposal were agreed to. A deed was executed which dealt with the allegations made by Mrs Barry in a letter, the date of which was given as 19 June 1998; that seems plainly intended to be a reference to the letter of 16 June 1998 which I have mentioned. The deed recites that the parties wish to resolve their dispute; it contains a promise that Mrs Barry will pay the total balance due on 15 March 1999 and says that if she fails to do so she will give up possession of the land; it contains a release of any liability on the part of the bank to Mrs Barry. With reference to this deed, Mrs Barry says that it is unenforceable "given the circumstances of its execution". I have already referred to the affidavit used below on behalf of Mrs Barry. There is no suggestion there about the letter of 16 June being one which she did not understand. She says in the affidavit -- 4 of 9 -- 04022000 T23/LZG14 M/T COA 8/2000 6 JUDGMENT that during the course of 1998 she was becoming increasingly desperate to obtain a response from the bank. In her affidavit filed in this proceeding, Mrs Barry says that when she was asked by the bank's Cleveland manager to execute documents he advised her that these were the steps that had to be taken, "that my interests were not being disadvantaged. I relied upon his advice, as he well knew." It is not perfectly clear whether these statements were intended to refer to the settlement deed, but if they were, then it is not easy to reconcile this with the burden of the affidavit used before Atkinson J. That does not seem to suggest that Mrs Barry did not fully understand the effect of the deed. The parties made an agreement, by the deed I have mentioned, in December 1998, which Mrs Barry has now attempted to repudiate. One of the factors which, in the time since the hearing this morning, I have noticed is the way in which the claims relied upon by Mrs Barry to resist the bank have been pursued. There were, according to the letter of 16 June 1998, two matters complained of. One is a requirement made in 1994 by the bank that certain companies reduce a debt due by a Mr and Mrs Bateman by about $40,000, as a precondition of the granting of a loan to the companies. It is quite unclear to me what are the circumstances relied on to attack the legality of this transaction, now more than five years old. The second matter complained of is a requirement made in early 1997 that Mrs Barry discharge an account in a sum of $18,000. As to these matters the letter says that, -- 5 of 9 -- 04022000 T23/LZG14 M/T COA 8/2000 7 JUDGMENT "We acquiesced with a number of happenings which were endured in the context of our perception of the value of an ongoing relationship with the bank." What this seems to mean is although what the bank asked was not thought to be fair, Mr and Mrs Barry or one of them agreed, in the interests of a commercial relationship with the bank, to what was asked by the bank. This interpretation is underlined by a statement on page 3 of the letter as follows: "My objections to these occurrences would not, of course, have been raised in the context of the relationship that had always been apparently contemplated by our mutual dealings." Although there are only two objections listed in the letter, there is in fact a third one mentioned under the second heading, and that is that it was a condition of the bank's ongoing support that Mrs Barry incur direct liability for the sum of $18,000 which I have mentioned. It was said that agreement to this was a condition of further support from the bank. Again, it is by no means clear in what way any misrepresentation, undue influence or unfair conduct was involved in that. The bald assertion that it was unlawful in various respects is made without any detailed facts setting out what it was that the bank did which was wrong. I am trying to trace through the way in which these transactions were pursued, and I have mentioned that the matters giving rise to them occurred in 1994 and 1997. They were alluded to in the letter of 14 December 1998, which was the letter which preceded the making of the settlement deed, and that reference did not contain any indication that it was intended to pursue them by -- 6 of 9 -- 04022000 T23/LZG14 M/T COA 8/2000 8 JUDGMENT action. Action was brought by the bank, resulting in the judgment which is in question, last year, and a defence was filed in August 1999 saying there was to be a counter-claim, and that was conditional upon obtaining a copy of the deed of settlement. It is unclear when that deed was obtained, but there is no doubt that it was in possession well before the matter came before Atkinson J. in December 1999. There was then no counter-claim presented, nor has any draft ever been prepared, so far as the material shows. The basis of the assertion that some five years ago and some two years ago the bank was guilty of illegal conduct in its relations with its customer remains vague and obscure or, as the learned primary Judge put the matter, "somewhat elusive". An argument was advanced before the primary Judge that the settlement should not be enforced because unlawful duress was applied. The deal proposed was clear enough and easily understandable, and that is that if Mrs Barry wished to pursue these matters the bank would not make the concession for which Mrs Barry asked. This, it appears to me, cannot come close to anything in the nature of unlawful duress. Although the suggestion has been made that the bank's security is in some way superseded, I see no reason either in the terms of the deed of settlement or in the general law to draw that conclusion. It appears to me that the bank still has its rights under the mortgage and that it is not necessarily good policy on the part of -- 7 of 9 -- 04022000 T23/LZG14 M/T COA 8/2000 9 JUDGMENT the Court to make commercial agreements supported by security ineffective, or to delay recourse to them, unless there is some real justification for doing so. The present case is a sad one and no one can regard the outcome with any degree of satisfaction. As is unfortunately often the case and particularly is so here, the exercise of security rights is likely to cause personal hardship to the debtor and to the debtor's family. These are matters which I have considered, but I have reached the conclusion that the allegations raised against the bank before the primary Judge have not been strengthened but, rather, weakened by the evidence filed in this application; and despite the admirably able argument advanced by counsel for the applicant, Mr Laurie, who has done all he possibly could for Mrs Barry, I have to refuse the application for a stay. The application for a stay will be dismissed with costs. Anything further? MR LAURIE: Your Honour, I am instructed to apply for an order extending the time for compliance with the original order of Justice Atkinson's, namely, that the order be stayed for a period of 28 days originally to allow Mrs Barry to attempt to raise the sum of $37,000 across Christmas. PINCUS JA: Yes. MR LAURIE: As Your Honour will recall, she made some attempts but found herself unable to do so without the second mortgage being released and the bank required other conditions to be fulfilled for that to happen. She instructs me that she may well be in a position in the next few days to comply with Justice Atkinson's order if the time was extended, and given that Your Honour has the same powers as Justice Atkinson below I would seek an order only extending it for a further seven days from today's date, such that there be a stay on condition that the $37,000-odd is paid into -- 8 of 9 -- 04022000 T23/LZG14 M/T COA 8/2000 10 JUDGMENT Court and paid out to the bank pending - well, that as a condition of the stay, and then she can proceed to try and get those moneys back by independent action if she is so instructed. PINCUS JA: Yes. I regret that I do not think I can do that. The bank, no doubt properly advised by its solicitors and, if necessary, Mr Sheehan, will no doubt take into account the circumstances to which I have alluded which make this a special case, but I do not see any justification for ordering any further stay. ----- -- 9 of 9 --