Benz v P D Mortgage Services Pty Ltd [1999] QSC 19

IN THE SUPREME COURT OF QUEENSLAND Brisbane [Elizabeth Mina Benz v P D Mortgage Services Pty Ltd] BETWEEN: AND: ELIZABETH MINA BENZ PD MORT GAGE SERVICES PTY LTD (ACN 065 740 847) REASONS FOR JUDGMENT - WHITE J Judgment delivered 10 February 1999 No. 61 of 1999 Applicant First Respondent CATCHWORDS: Application to dismiss statutory order for review - s.48 Judicial Review Act - whether entry of judgment by Deputy Registrar "a decision to which this Act applies" - whether an abuse of process - whether vexatious/frivolous - whether other review available. Counsel: Mr RR Douglas Q.C. and Mr R Lilley, for the applicant to dismiss. Mr J Howard as agent for the respondent. Solicitors: Deacon Graham & James for applicant to dismiss. Ms Benz for herself. HearingDate: 2 February 1999. [1999] QSC 19 -- 1 of 14 -- ( 2 IN THE SUPREME COURT OF QUEENSLAND Brisbane Before White J [Elizabeth Mina Benz v P D Mortgage Services Pty Ltd] BETWEEN: AND: ELIZABETH MINA BENZ P D MORTGAGE SERVICES PTY LTD (ACN 065740847) REASONS FOR JUDGMENT - WHITE J Judgment delivered 10 February 1999 No. 61 of 1999 Applicant First Respondent The applicant ("Ms Benz") seeks a statutory order of review by application filed 5 January 1999 of the entry of judgment by Deputy Registrar N Greig on 23 December 1998 for the respondent pursuant to an order of Thomas J made 22 October 1996. The Deputy Regi~trar was not a l'espondent to the application. The material was served on P D Mortgage Services Pty Ltd ("PDMS") the plaintiff in action no.7788 of 1996 in which action the Deputy Registrar had entered judgment. PDMS has filed a notice of motion that the application for review be dismissed on grounds set out in s.48 of the Judicial Review Act 1991. On 2 February 1999, the return date of the notice of motion, the Deputy Registrar being a necessary party to the application for review, was joined. The Deputy Registrar then appeared in person and indicated that he would abide the order of the court. -- 2 of 14 -- 2 3 Ms Benz did not appear and was represented by Mr John Howard as her agent. He was the defendant in a similar action against him by PDMS in which judgment has been entered against him and he has been declared bankrupt. He has also been a party with Ms Benz in Federal Court proceedings concerning the same transactions. I was satisfied that he had familiarity with the history of these matters. Ms Benz had been required for cross examination in respect of her affidavit supporting her application for review. Her doctor advised (exhibit 1) that she was suffering from stress and was unfit to attend court. I requested Mr Howard to contact Ms Benz to ascertain that she understood that the nature of the relief sought by PDMS was such that there was a risk that her application for review would be dismissed. After a break Mr Howard reported othat he had contacted Ms Benz and although she would like an adjournment, as I understood him, was content enough for Mr Howard to make submissions on her behalf. There is a large body of material although submissions for PDMS are essentially of a technical kind. I did not conclude that an adjournment would be of benefit to Ms Benz, particularly as there was no suggestion that she would seek legal representation in the interim. C) 4 The litigation between Ms Benz (and Mr Howard) and PDMS has a detailed history. Mr R R Douglas QC who appeared with Mr Lilley for PDMS provided a chronology (exhibit 2) which sets out the various steps in this court and the Federal Court. Before turning to the notice of llio1ion it is neceSSQry to Si:;·t out·something of thaL history. This Will pece3sa..:i.ly involve mentioning Mr Howard's actions in order to put the chronology in perspective. 5 In 1994 Ms Benz owned shopping centre land and Mr Howard was in the process of sub- dividing his land north of Brisbane. Both parcels were subject to mortgages with different mortgagees. A relatively modest amount of loan monies was required to bring to fruition their respective plans for those lands. As a consequence of negotiations loan monies were advanced to each of Ms Benz and Mr Howard by PDMS in 1994. PDMS is said by Mr David Purvis, -- 3 of 14 -- 6 '7, ( ') 8 3 solicitor, to be a nominee mortgagee company incorporated by the partners of Purvis Duncan, a firm of solicitors, to hold registered first mortgage securities as trustee for private investor clients of Purvis Duncan who deposited money into Purvis Duncan's trust account to be advanced to borrowers. On or about 22 September 1994 PDMS advanced $205,000 to Ms Benz secured against her land and a greater sum to Mr Howard. As I understand Mr Howard, it is alleged that whilst sums to cover fees, service charges and a not inconsiderable first payment of interest were advanced the lenders failed to provide working capital as promised and the projects foundered. Ms Benz and Mr Howard filed an application in the Federal Court seeking relief under the Trade Practices Act (Cth) for breach of fiduciary duty and contract against PDMS and others in respect of these transactions on 13 September 1996. On 18 September 1996 PDMS issued a writ and statement of claim for recovery of possession of land against Ms Benz and separately against Mr Howard for failure to make payments as required under the mortgages. Defences were filed shortly afterwards and PDMS brought summonses seeking immediate possession of the security properties. On 22 October 1996 Thomas J made the following orders in respect of Ms Benz: "Grant the defendant leave to defend this action conditional upon: ", (a) the cieiendant paying the sum of $2,562.50 by way of interest to the solicitors for the plaintiff no later than 4 p.m. on 22nd day of each calendar month (such payment being without prejudice to any rights of the plaintiff to further interest under its mortgage); and (b) the defendant paying the proceeds of sale (nett of the costs of such sale) of any land the subject of mortgage 700246439 dated 22 September 1994 to the solicitors for the plaintiff in partial satisfaction of the principal advanced by the plaintiff to the defendant; and, -- 4 of 14 -- 9 10 11 4 (c) the defendant using her best endeavours to sell the 9 allotments referred to in the first sentence of paragraph 22 of the affidavit of the defendant and John Campbell Howard (filed by leave on 22 October 1996) as quickly as possible; and 2. In the event of the failure of the defendant to meet the aforesaid conditions or any of them, the plaintiff shall be at liberty to enter jUdgment for recovery of possession of the land the subject of the said mortgage together with its costs of and incidental to the action to be taxed and the affidavit of the solicitor for the plaintiff that such failure has occurred shall be sufficient proof of that failure. 3. Adjourn the summons to a date to be fixed. 4. Liberty to apply. 5. " Mr Howard was similarly ordered to pay monthly interest with a similar default provision. Mr Howard made one payment of interest only in accordance with the order of Thomas J and on 6 December 1996 judgment was entered against him in action no.7787 of 1996 in accordance with the provisions of his Honour's order. Ms Benz and Mr Howard brought a notice of motion in the Federal Court seeking injunctive relief restraining PDMS from acting on the judgment it had obtained against Mr Howard in the Supreme Court on 6 December 1996 and, in effect, relieving Ms Benz of the consequences of any future failure to comply with the conditions imposed by Thomas J by seeking iIijunctive relief precluding PDMS Il'om obtamingrecovery ·ofpossession of the land the subject of the registered mortgages. Cooper J dismissed the notice of motion on the 17 December 1996 in respect of each of Ms Benz and Mr Howard. I note, because it has some impact upon the submissions made on behalf ofPDMS in this application, that his Honour observed in his reasons for judgment at p.3 "the orders made by Thomas J have not been stayed, varied or appealed". His Honour noted that Ms Benz had not then defaulted in terms of the conditions imposed upon her by Thomas J but that she had deposed in an affidavit filed on 16 December 1996 in the Federal o C) C) ( ) ~j -- 5 of 14 -- \/ 12 14 5 Court that she was unable to make the payment due on 22 December 1996. She deposed that on that date she would default "and in terms of the order of Thomas J the first respondent as mortgagee will be entitled to enter judgment for recovery of possession of the land the subject of registered mortgage 700246439". His Honour concluded at p.5 of his reasons: "What the second applicant [Ms Benz] seeks in these proceedings is to avoid the consequences of his Honour's order in other than the forum where the order was made ... If the second applicant wishes the order of Thomas J to be varied or seeks from him or a judge of the Supreme Court some other interlocutory protective relief in lieu of it, she must apply to that Court. Otherwise, if she defaults on 22 December 1996 in the payment of interest, the first respondent as mortgagee will be at liberty to enter judgment for possession of the land subject to registered mortgage 700246439." There followed a number of interlocutory hearings in the Federal Court in respect of the actions and on 23 April 1997 Drummond J ordered that Ms Benz and Mr Howard file and serve particulars and have leave to file and serve an amended statement of claim by 22 May 1997. In default their action was to be dismissed with costs. Ms Benz and Mr Howard did file further particulars and an amended statement of claim within the time ordered by the court but that compliance was incomplete and deficient and on 23 May 1997 the action was dismissed. On 1 December 1997 Ms Benz filed a summons in this court returnable on 17 December sr;:eldr : !':fer alia a sti:~Y of the ronditicn imposed by Thomas J to pay interest, in tbe a>·'.'lativc that the amount be varied by a reduction to $1,452.08 or, in the further alternatively by varying the terms of the order because ofthe discovery of facts made after the making of the order. On 5 June 1998 before Thomas J, Ms Benz obtained an adjournment of her application to a date to be fixed. On 23 June 1998 Ms Benz and Mr Howard filed a notice of motion, and subsequently an amended notice of motion in the Federal Court seeking declarations that they had complied with -- 6 of 14 -- 15 16 6 the orders in respect of pleadings made by Drummond J on 23 April 1997, alternatively an extension of time for compliance with those orders and leave to amend the statement of claim, and that the action be transferred to Supreme Court action no.7788 of 1996. Directions were given and on 12 October 1998 Drummond J ordered in respect of Mr Howard since his trustee in bankruptcy did not wish to pursue the action that it be dismissed. His Honour said ofMs Benz's application to reinstate the action which had been dismissed in May 1997 at p.10 of his reasons: "The proposed new pleading, while abandoning certain allegations in respect of which the applicants were ordered to give particulars on 23 April 1997 and raising new allegations, is a wholly confused document. It is not, in my opinion, possible to identify with any precision just what is the case the second applicant wishes to . make against any of the respondents. The framing of a proposed pleading which does not seek to identify, with any attempt at clarity, the basis of any claim she may herself have against any respondent but which instead links claims to be made by both applicants reinforces this conclusion. The case is not one in which respondents seek to terminate an action for want of particularity of the applicants' allegations or because the pleading containing them is embarrassing or vexatious. The action is at an end and has been at an end since 23 May 1997. The second applicant comes to court in an attempt to resurrect that action. She seeks to avoid the difficulties she has had in providing proper particulars of the allegations of serious misconduct levelled against the respondents by saying that, if she is permitted to resurrect her action, she wishes to run it on a different basis, which makes unnecessary the provisions of certain of the particulars she has failed to provide. In addition, there is no satisfactory explanation from the second applicant for the delay, from May 1997 to June 1998, in allowing the termination of the action to remain undisturbed." Ms Benz has been represented by senior counsel on at least one hearing and experienced junior counsel on other occasions in the past. Ms Benz filed a notice of motion to the Full Federal Court on 20 November 1998 seeking an extension of time in which to file and serve a notice of appeal from the orders of Drummond J ordering particulars and amendment to the statement of claim and his decision on 12 October 1998 dismissing the applications for an extension of time. Directions were given by Spender J on (J C) -- 7 of 14 -- 17 18 ( 7 2 December 1998 which it seems to have not been complied with. Up until December 1998 Ms Benz had continued to make payments of interest in accordance with the conditions imposed by Thomas J but on 22 December 1998 she failed to pay interest as she was obliged to do by those orders. I understand from Mr Howard that at about that time she came to the conclusion that she was not obliged to pay any interest and ceased to do so. It seems from a perusal of the material that towards the end of 1998 Mr Donald Cameron became involved in this matter. He was declared a vexatious litigant by the Court of Appeal on 5 March 1996. He claimed in a letter to PDMS' s solicitors dated 30 November 1998 that on or ) about 7 September 1994 Ms Benz's land, the subject of the mortgage to PDMS, and Mr Howard's land, also the subject of a mortgage to PDMS, became the subject of a unit trust and that he was in a partnership with Ms Benz and Mr Howard which gave him a legal interest in the land to the extent of 80% and that no enquiry was made by any mortgagee to include him as mortgagor in any security documents. Under cover of a letter dated 6 December 1998 he sent "a copy of the partnership agreement dated 31 August 1994 and a copy letter to Purvis Duncan dated 12 September 1994". The partnership agreement purports to be dated 31 August 1994 and states that Mr Howard was to contribute his land and buildings to the joint venture partnership, Ms Benz her land and buildings and that Donald Cameron would contribute "his management skills to the said joint venture partnership and all legal matters associated with the joint venture partnership and it is hereby agreed that the said Donald Cameron has the power to act for and represent both the said John Campbell Howard and the said Elizabeth Mina Benz". The letter which was allegedly sent to Purvis Duncan dated 12 September 1994 was addressed to them as "Solicitors" at "Level 8 160 Edward Street Brisbane Q 4000". The letter indicated that Mr Howard and Ms Benz were handicapped and substantially disabled and that he, Mr Cameron, had -- 8 of 14 -- 19 20 21 8 a power of attorney and was to approve 'and endorse all contracts associated with the partnership relating to the subdivision and the convenience store. The letter stated that any contract not executed by "this writer [Don Cameron] have no binding or lawful effect upon the Partnership". It is unnecessary to say very much about the advent of Mr Cameron in this matter save that he was required for cross examination in respect of his affidavit filed in Ms Benz's application ::md was not produc'ed b~wause as Mr H0ward wrote: ' " ... Mr Cameron has returned to Tamworth and New South Wales to complete his obligations as an Australian Bush Poet and is not expected to return to . (1 Queensland until the end of March 1999. Only a message can be passed on, as he is out of contact." (Exhibit 1). Mr Purvis has filed an affidavit exhibiting documents which clearly demonstrate that the firm C) Purvis Duncan did not move to premises at 160 Edward Street, Brisbane, until 18 February 1995 and prior thereto had occupied premises located at 307 Queen Street, Brisbane, and could not have (and, he deposes, did not) receive any correspondence addressed to the firm at 160 Edward Street in September 1994. Since reserving this matter the court has received facsimile communications from, it would appear, Mr Cameron maintaining that PDMS's solicitors are acting outside their instructions in pursuing this application. Written submissions have been received from Mr Douglas QC and Mr C--,) R Lilley that they have their client's instructions to make the application to dismiss the application for statutory review by Ms Benz and I am content to proceed on that information. The judgment of Fryberg J delivered 29 August 1997 in P D Mortgage Services Pty Ltd v Marquart OS No 929/97 seems to have activated Ms Benz to challenge PDMS anew. In that case the borrower lodged a caveat forbidding the registration of any instrument affecting the land of which PDMS was the mortgagee in possession. The borrower alleged inter alia fraudulent, misleading, deceptive or unconscionable conduct against PDMS as agent for another company -- 9 of 14 -- 22 23 24 ) / I ) 9 called Private Mortgage Lending Limited. His Honour was satisfied that there was a serious question to be tried and directed some criticism at the evidence given by one of the Purvis Duncan solicitors. Turning to the application to dismiss the statutory order of review, PDMS submits that it ought be set aside on several bases: • th~~ "'decisiolJ" nf tbe Deputy Reg1strar to enter jud~p""!nt W:J"\ ;'''It a decision to which the Judicial Review Act applies; • the application is an abuse of process and/or frivolous and vexatious, s.48(1)( c) and (d); • provision is otherwise made to review the decision of Thomas J and the judgment entered by the Deputy Registrar and it is in the interests of justice that the application be dismissed, ss.l2 and 13. Was it a "decision" to which the Judicial Review Act applies? By s.20 of the Judicial Review Act a person who is aggrieved by "a decision to which this Act applies" may apply to the court for a statutory order of review in relation to a decision. Section 4(a) defines such a decision to mean: "a decision of an administrative character made ... under an enactment (whether or not in the exercise of a discretion)." The Deputy Registrar entered judgment in conformity with the order of Thomas J when presented with an affidavit of the kind described in the order. In the most technical sense he made a decision to do so but in reality he was the means whereby the court gave practical effect to a decision that had been taken to enter jUdgment against Ms Benz if the conditions as imposed were not complied with. -- 10 of 14 -- 25 10 The order did not require the Deputy Registrar consider if the conditions had been met, only that he, on behalf of the court, receive an affidavit of the solicitor for the plaintiff swearing to that effect. The only basis for challenging the judgment entered by the Deputy Registrar which is referable to him adverted to by Ms Benz is a failure to accord her natural justice, that is, to allow her a hearing, but the order excludes any such entitlement. 26 I need no~ decide the application finally on this ground and in the absence of inf,:)mled 27 opposition on apoint not without some difficulty I would conclude that the act of the Deputy Registrar in entering judgment was simply that - an act giving effect to an order of a judge of this court and not a decision of the kind encompassed by the Act, see generally the discussion ofthe expression in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Mason CJ at 336 et seq. Abuse of ProcessN exatious and Frivolous PDMS contends that the application is an abuse of process because: • the applicant has instituted and pursues numerous proceedings seeking the same results; • the proceedings have been commenced for a collateral purpose and not for the purpose of reviewing any decision which might have been made by the , Deputy Registrar; • the proceedings will in effect allow a declared vexatious litigant to litigate a claim without the leave of the court first obtained. The relief sought by Ms Benz in her application is the vacation of the order of Thomas J. There is ample evidence to support the contention that this application duplicates other proceedings which either are still on foot or which have been disposed of by orders of other courts. Ms Benz's summons dated 1 December 1997 for a stay of the order of Thomas J was L/' -- 11 of 14 -- 28 11 adjourned at the request ofMs Benz to a date to be fixed. It has never been determined. In the Federal Court Ms Benz sought orders injuncting PDMS from proceeding to act on its securities over her land. Those proceedings came to an end by order of that court and have not been revived despite application to do so although those orders and others in that action are subject to an appeal to the Full Federal Court. 29 It seems plain that the purpose of the application for review is not to review the Deputy 30 31 32 ':"Registrar's order but to set aside the order of Thomas J. There has been no appeal against his Honour's order nor has any application to stay or vary the order proceeded to a hearing and determination. Ms Benz was, in effect, put on some notice of appropriate procedures in the reasons for judgment of Cooper J which she must be taken to have perused in December 1996 and to which reference has been made. The injunctive relief which Ms Benz had sought in the Federal Court was with the express purpose of avoiding the effect of Thomas 1's order. PDMS contends that the application for review introduces material which would assist a declared vexatious litigant in respect of an action without him first obtaining the requisite leave. I accept that that is so. Grounds for Review The only grounds specified in s.20 which might give rise to review and mentioned by Ms 9.:::! in tler applicatk,.l w, hpporting mateIialis clll allegation of denial _,[ ;ia' .,.",iljllstice, that is, that Ms Benz was not heard when the Deputy Registrar entered judgment. The order of the court did not entitle her to be heard in the circumstances in which judgment was entered. She was in no doubt about the consequences should she default in the payment of the interest as her affidavit before the Federal Court referred to by Cooper J demonstrates. Breach of fiduciary duty and contract is a ground for seeking review. It has no bearing on the Drputy Registrar's decision. That is a matter for the counter-claim in the action which in -- 12 of 14 -- 12 this court is not at an end. As I have said, the decision of Fryberg J in Marquart appears to have revived the expectations ofMs Benz and his Honour's critical observations of some persons associated with PDMS has apparently encouraged a belief that a case might be mounted successfully against PDMS. Ms Benz is not precluded from pursuing relevant allegations against PDMS. This application to dismiss is about the inappropriate process of judicial review which she has chosen to pursue. He complied with an order of this court. ( 33 '. No error of any kind is revealed on the part of the Deputy Registrar in entering judgment. Other Review Available 34 Sections 12 and 13 of the Judicial Review Act respectively permit or require a court to dismiss an application for review if adequate provision is made by a law under which an applicant is entitled to seek a review of the matter inter alia by this court or another court. By s.3 "review" includes inter alia a review by way of reconsideration, rehearing or appeal. Thomas J's order was subject to a right of appeal provided for in the rules of the Supreme Court. Ms Benz could have and could still seek a stay of the entry of judgment by the Deputy Registrar or the order of Thomas J or a variation of his order by virtue of the provision ofO. 45 of the Rules. That she C:was aware of this avenue of application for relief is clear from her summons for that relief which was never pursued. fhe interests of justice require that the true matters in issue be litigated between these parties, but seeking a review of the Deputy Registrar's entry of judgment will not do so. Further, if! might make an observation, the· recent introduction ofMr Cameron into the proceedings is likely only to obscure any genuine grievance against PDMS which Ms Benz may have. 35 For the reasons given above the application for a statutory order of review ought to be dismisse,d. -- 13 of 14 -- 36 37 13 The formal orders are that the application for a statutory order of review of the decision made by Deputy Registrar Greig on 23 December 1998 be dismissed. I will hear submissions as to costs. -- 14 of 14 --