Australia & New Zealand Banking Group Pty Ltd v Hubner & Hubner [1997] QSC 205

...- - .... - ,LII.3/U1-fr!,//fpV SUP /(/3JIJE e~ Reporting Bur{~tf o TRANSCRIPT OF PROCEEDINGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. REV!S:;:!) CCF!ES ISSUED State Repcrting Bureau SUPREME COURT OF QUEENSLAND , Date / £, / q / 9 -; . CHAMBERS C) BYRNE J Writ No ~31 of 1997 \ AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED Plaintiff and COLIN RICHARD HUBNER and YVONNE HUBNER Defendants () CAIRNS () .. DATE 15/09/97 .. DAY 1 JUDGMENT This judgment is to be copied for th only. It is not to be resold or used ~ e purpobs~ a! re~earch and private study o~ r~pu IIcatlon In any other way wit out permission. . 1 ·111t FlClClr', The Lriv,Collrls, Cl'or~c Sln·ct. Brbh:IIIl'. Q. .t()()() Tcll~phol\(': (07) JZ-t7 ·tll.!) /-':1\: 1117) JZ·17 5.".1!' '! " J -- 1 of 5 -- o 150997 D.1 T8/LVT MIT CNS532/97 (Byrne J) HIS HONOUR: This is an application to set aside a judgment entered on 19 June 1997 in default of delivery of a defence. The judgment permitted the plaintiff, which is a bank, to recover possession of land the subject of a mortgage granted by the applicants. The mortgage, which is many years old, secures any sum due to the bank. One of the sources of the liability to the bank which is said to be secured by the mortgage is a guarantee. Both the applicants have executed the guarantee and although, in the case of Mrs Hubner at least, there is some suggestion that she {~ did not appreciate precisely what she was doing, I cannot see \._/ a basis for concluding that there is some reasonable prospect that either of the guarantees would be set aside at a trial. \ The question then is whether the material discloses a basis for setting aside the default judgment on the footing that the (J applicants have a defence on the merits to the bank's claim. Many points have been agitated. However, there is no prospect of the applicants' succeeding in establishing a claim to extinguish their indebtedness to the bank unless there is substantial value in one particular claim. It relates to a contention that an officer of the bank, Mr Poulson, gave erroneous advice concerning the substance of JML Constructions Pty Ltd with which a company controlled by the applicants, Cairns Glass, entered into a contractual arrangement. On an affidavit of Mr Hubner, there are circumstances which might prove an appreciation by Mr Poulson that Mr Hubner was relying upon him to give accurate advice concerning JML Constructions 2 JUDGMENT -- 2 of 5 -- ---------~--------------'---------- - ---_._--,-'-<--------- o (J () 150997 D.1 T8/LVT M/T CNS532/97 (Byrne J) Pty Ltd before Cairns Glass entered into a contract with it._. -.--.-.---.--------.--~------~-~-.---------.--.-------._--------- Mr Hubner claims-that Cairns Glass has valuable claims against JML. This matters because the applicants have guaranteed the liability of Cairns Glass to the bank. It is a question whether there is evidence that Cairns Glass or the applicants sufJ_~_I'e(t __ ~lly loss as a consequeIl8_~()_~ .. __ ~~_e_ advice in question. An equally important issue is whether there is an arguable case that the advice was wrong. According to Mr Hubner's affidavit, Mr Poulson said before the contract was entered into that he, Mr Poulson, did not have a problem with JML, or that JML was a company of high corporate morals. The applicants' case is that, with such a ~ commendation, the contract was entered into, and that it proved to be unprofitable. In Mr Hubner's affidavit, his conclusory assertion contends: "My own research now tells me that the principals of JML have a long history of liquidations, non-performance and non-payments to sUbcontractors." A similar contention was made in a letter sent to officers of the bank in July this year when Mr Hubner wrote saying that he relied on Mr Poulson's ability to "check out" JML. His letter records Mr Poulson's subsequent reply as "no worries". 3 JUDGMENT -- 3 of 5 -- -- -- ---------':::----.'\._:....... ------------------ ---- 150997 D.1 T9/JRG M/T CNS532/97 (Byrne J) lost by Cairns Glass as a result of the contract with JML. But there seems no evidence to support the contention that Poulson's advice was wrong. Exhibit 3 contains statements to the effect that companies with which one of the directors of JML was associated have been de-registered; another is shown to have been under external administration. But nothing tends to prove that the () principals of JML have been involved in liquidations, let alone had a long history of them. Nor is there any material (\ showing that there has been a history of non-performance or \.,~) non-payments to sub-contractors by JML or its principals. In short, there is now no basis for supposing that, at a trial, the applicants might succeed in demonstrating that the contract with JML which is said to have been the source of so () much loss resulted from advice Mr Poulson gave which was inaccurate. Many other grievances are aired in the material. It is not necessary to examine them. As I have said, in the absence of some prospect of success on the claim against the bank based on Mr Poulson's advice concerning JML, the inevitable outcome of a trial is that some liability upon the guarantees will be sheeted home to the applicants and, in that event, the bank will be shown to have been entitled to realise on its security in the way now adjudged by the default judgment. 4 JUDGMENT -- 4 of 5 -- ____·.i______________________________~,--~~-------- 150997 D.1 T9/JRG M/T CNS532/97 (Byrne J) There is material to suggest that the predicament of Cairns Glass resulted fDDm causes other than conduct for which the bank might be responsible. An affidavit of Mr Drury, an accountant, expresses the view that the company's predicament was due to "poor management". But this is really by the way. Upon the evidence as it n()w stands, there does not seem to be a defence upon the merits. () The application will therefore be refused. HIS HONOUR: The application is dismissed, with costs, including reserved costs, if any, to be taxed. 5 JUDGMENT \ -- 5 of 5 --