Capel v Marac Finance Australia Ltd [1995] QSC 271

.:x:-?J5-~ Z;z; .J+6sState Reporting Burea1 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.) SUPREME COURT OF QUEENSLAND CHAMBERS ( THOMAS J No 589 of 1991 ELWYN JOHN CAPEL and MARAC FINANCE AUSTRALIA LIMITED BRISBANE .. DATE 25/09/95 JUDGMENT 1 l REVISED CCP!ES iSSUED l State Repcrting Bureau IDate (;l- I lo I 1S:., Plaintiff Defendant .Jth Floor, The Law Courts, GL•orge Street, Brisbane. Q. .J{)(J(J Tdephone: (07) 227 .11.M1 r....... • .. / -- 1 of 12 -- 250995 D.1 T3/TES M/T 5215/95 (Thomas J) HIS HONOUR: The present proceedings are concerned with the viability of the plaintiff's statement of claim of which there are three versions:- (i) a 19 page document dated 6 October 1994; (ii) an 89 page document dated 11 July 1995; (iii) a 94 page document dated 18 September 1995. The second and third statements of claim are to be taken as requests for amendment of the first. It is the last document that the plaintiff now wishes to deliver. The first two documents were before Mr Justice Williams on 24 August 1995 on the defendant's application to strike them out, but His Honour adjourned the proceedings because the third edition was foreshadowed and it was recognised that it might raise additional issues that might overcome the defendant's objections to the first two versions on the basis of res judicata. I shall, for convenience, refer to the plaintiff as Mr Capel and to the defendant as the finance company. In substance, Mr Capel is refusing to accept as final a determination of the Court made in 1985 with respect to a $40,000 loan made by the finance company to him. After contested proceedings for summary judgment, judgment was given against him on 29 November 1985 and this judgment was upheld on appeal on 22 May 1987. A great deal of the present statement of claim is an attempt to relitigate his obligation to repay the loan. It seems to 2 JUDGMENT 10 1' ·. ) \ " 20 - 30 40() 50 60 -- 2 of 12 -- ( 250995 D.1 T3/TES M/T 5215/95 (Thomas J) me that his obligation to pay that loan and the validity of that loan was decided agairist him and those issues and certain other related issues cannot now be reopened in view of the judgment for the company for $42,135.47, given on 29 November 1985. 10 The appeal proceedings, including the notice of appeal, show that Mr Capel expressly raised numerous issues by attempting to present them as issues in the summary judgment proceedings. These included alleged breaches of the loan agreement by the company, alleged invalidity or unenforcability of the mortgage, suspension of rights by oral agreements between the parties, alleged damages suffered by Mr Capel through breaches of the agreements and alleged fraudulent conversion by the company of a display kitchen and appliances. The last- mentioned issue was alleged to be an equitable set off in the notice of appeal, paragraph 24. The reasons of Mr Justice de Jersey for the Judgment also indicate attempts on Mr Capel's behalf to raise defences of promissory estoppel and alleged fraudulent misrepresentation, including the specific allegation that the finance company had represented that it would provide "long term finance". The present statement of claim inter alia, attempts a reformulation of allegations of fraud and there are alternative formulations of deceptive conduct, but they are in my view, variations on a theme. 3 JUDGMENT 20 30 40 50 60 -- 3 of 12 -- 250995 D.1 T3/TES M/T 5215/95 (Thomas J) It is to be noted that the proceedings before Mr Justice de Jersey were contested proceedings. This is to be distinguished from default judgments which are recognised as having only limited capacity as a bar to further litigation (see Spencer Bower and Turner, res judicata, second edition pages 157 to 160). In Access Finance Corporation Pty Ltd v. Golubobic & Anor. 1991 ASC paragraph 56089 at 56934, Gobbo J considered the effect of res judicata and issue estoppel arising from a judgment or determination upon an application to set aside a default judgment, where the defendant had to show some merits justifying a right to a defendant hearing. Some similarities may be seen between that type of proceeding 10 n \ / 20 ,_ 1_-\1 and an application for summary judgment. It seems to me that ~. where parties appear and contest proceedings, and judgment is eventually given, the question whether the judgment proceeds after pleadings or in some summary way, such as under order 57 or order 18 or otherwise, is not eventually to the point. The existence of pleadings may of course have some bearing upon the capacity of the Court to examine the issues which were the subject of the litigation in question, but the issues may also be identified in other ways. The identification of the issues which the parties litigated, or are taken to have litigated, and in some cases which they ought reasonably to have brought forward, involves an examination from case to case. In a summary judgment application, when a defendant expressly seeks to raise particular issues, even though in the event it is found that he has not succeeded in doing so to the requisite degree of particularity, it is to be taken that such matters were in issue between the parties on the occasion of 4 JUDGMENT 30 () 40 /) l 50 60 -- 4 of 12 -- 250995 D.1 T3/TES M/T 5215/95 (Thomas J) that litigation. To raise an issue weakly is still to raise it. I turn to the principles of Anshem (1981) 147 CLR 589, 598, where reference is made to the extended principle expressed by Sir James Wigram in Henderson v. Henderson. The principle was accepted for the purposes of applying res judicata, although some reserve was expressed in the judgment of the majority as to the extent to which it can comfortably be applied when r \ issue estoppel is the·relevant plea. l; In the present case, it seems to me that the matters that cannot be raised again are the points that were in issue or which were attempted to be raised or which reasonably might have been raised, that could have rendered the loan contract void or voidable. This, in my view, includes all points that might raise cross- claims that could amount to equitable set-offs capable of being pleaded in defence to the claim for repayment of the loan. Hill Corcoran v. Navarro, Court of Appeal unreported, suggests to me that claims of the present kind which are closely connected with the making of the loan, could have been so pleaded. Any pleas depending upon alleged amendment of the agreement would be pleas that ought reasonably to have been embraced within the basic litigation concerning the validity of the agreement. Pleas depending upon voidance or invalidity of the agreement by reason of misrepresentation would fall within the 5 JUDGMENT 10 20 30 40 50 60 -- 5 of 12 -- 250995 D.1 T3/TES M/T 5215/95 (Thomas J) same principle. That is so, whether the misrepresentations are said to be fraudulent or innocent. I note that the statement of claim now includes, among other plea$, a claim of duress. It is a little difficult to discern the extent to which this is intended to articulate a separate claim for damages and the extent to which it is raised as a reason for invalidity of the transaction. In either event it seems to me to fall within the defences which ought reasonably to have been regarded as being in issue within the Henderson principle. I do not think that a litigant can raise a few particulars of fraud as Mr Capel did here, fail in the attempt, and then in subsequent litigation produce some other particulars of fraud and expect to be able to litigate them. Even if the point taken by the finance company in this respect is regarded as a form of issue estoppel, I do not think that Mr Capel can be allowed to litigate such matters in a piecemeal way, dealing with the same issue a little at a time on separate occasions. His attempts to raise fraud in different ways includes an allegation of additional fraud to the effect that subsequent misrepresentations were made that misled a Court. Apart from the embarrassing nature of such allegations in a pleading, I do not think that they raise a separate cause of action or that they should be able to be raised in this way. I note that the central allegation of fraud that Mr Capel now wishes to raise depends upon the allegation that the finance 6 JUDGMENT 10 n 20~·· (/.-') __ j 30 CJ i 50 60 -- 6 of 12 -- \ 250995 D.1 T3/TES M/T 5215/95 (Thomas J) company represented that it would be able to continue to lend as a finance company. Its falsity, he claims, was only realised by him after the original litigation was over. However, it seems to me to be very closely related to the issue which he actually raised in the original litigation, namely that the company would provide long term finance. The 10 fact that he may have discovered further facts after that litigation, which strengthened the allegation, or which might have added to it by showing that something it had said was contrary to its then plans, does not, I think, aid him in the present argument. In my view, the claims and cross-claims to the extent that they would have been capable of raising defences, have passed into judgment. However, I do not consider that any independent cross claims which were not capable of raising defences have passed into judgment, or that the judgment stands in the way of their being litigated. I consider that any independent cross claim that was incapable of amounting to or creating an equitable set off has not been the subject of any judgment. Two such matters were argued by Mr Capel and I shall now turn to these. The first concerns an agreement allegedly made in March 1985 under which he agreed to purchase display kitchens for a price, and the finance company was to provide him with a loan. This matter I emphasise is unrelated to the subsequent loan upon which the finance company sued. Mr Capel further alleges that on 28 March 1985 a company called Regency Kitchens assigned to him certain debenture rights which are capable of carrying with them the legal ownership of the 7 JUDGMENT 20 30 40 50 60 -- 7 of 12 -- 250995 T5/DL M/T 5215/95 (Thomas J) kitchens. Other dealings occurred with other parties including a company named Cedarmount. Mr Bain on behalf of the finance company submitted that Mr Capel fails to show sufficient locus standi which I take to be a submission that he fails to show a sufficient basis to ever being able to establish that he acquired the legal ownership of the kitchens. However, I do not think the matter sufficiently clear to preclude the bringing of a claim if otherwise there is a cause of action to be brought. Mr Capel goes onto allege that on 5 April 1985 the finance company removed the kitchens from the showroom where they were supposed to be kept. He alleges that that removal was both in breach of contract and also a conversion of property to which he had title. Without expressing any view other than upon the possible maintenance of a cause of action if those facts were established, it seems to me that that is a potential cause of action and that it is not such a matter as would amount to a set off with respect to the loan upon which the finance company later obtained judgment. I would therefore uphold his right to litigate that particular issue. The other issue which is said to be discrete and separate is to the effect that the finance company conspired to serve process in certain bankruptcy, proceedings affecting him so that the documents would not come to his notice. This relates to litigation in the Federal Court. An application in which the validity of the service, and his alleged ignorance of it were raised, came on before Mr Justice Pincus on the 10 20 30 50 application of Mr Capel to annul a sequestration order. 60 8 JUDGMENT r> 0 -- 8 of 12 -- 250995 T5/DL M/T 5215/95 (Thomas J) I have perused the reasons for judgment of Mr Justice Pincus and consider that the validity of the service was a central point. The precise point of a conspiracy to act in this way was not articulated, but it seems to me that the attack on the service has been litigated between the parties and that a decision has been made upon it. It therefore seems to me to be inappropriate to allow further litigation to open up that selfsame issue or an issue of fact which was reasonably within the compass of the dispute between the parties. There are other reasons (mentioned later) why this stale allegation ought not now be permitted to be added to a statement of claim by way of amendment. I therefore have provisionally reached a view against the maintenance of this particular cause of action. I may say that were it to be litigated it seems to be a matter that would be better determined in the Federal Court and that a cross-vesting order might be appropriate. It is however unnecessary for me to proceed to consider that matter further. I should mention some additional submissions which were made by Mr Capel. He submitted that his solicitors had failed to put enough detail into the affidavits at the time. That may be so and if it is so then there may be a legal remedy. It, however, does not assist to establish any right to re-litigate the issues that were plainly enough attempted to be raised at that time. Mr Capel has brought a summons seeking judgment on the basis 10 20 30 40 50 of an alleged consent by the finance company solicitors which 60 9 JUDGMENT -- 9 of 12 -- 250995 T5/DL M/T 5215/95 (Thomas J) would permit delivery of a second statement of claim. He submits that the statement of claim was delivered and as no defence has been delivered to it he is entitled to judgment. I do not uphold that submission. Indeed I intend to strike out the first and second statements of claim as invalid both on the ground that he is precluded from re-litigating the issues contained therein, and in the case of the second statement of claim on the further ground that it is vexatious and embarrassing. Similarly with respect to the third statement of claim I have indicated my reasons for considering that Mr Capel cannot now re-litigate the vast bulk of the issues there raised. I should also mention Mr Bain's submission with respect to the inclusion of causes of action in the statement of claim which were not included in the writ of summons. He relied upon all relevant Statutes of Limitation. It is to be noted that the vast majority of causes of the action accrued - if they accrued at all - within the first half of 1985. The writ in the present action was issued just within six years of the last possible date. The additional claims which Mr Bain submits should not be permitted to be added by amendment to the statement of claim are the claim based on duress (assuming that it is a claim for damages), claims depending upon alleged variation of an agreement made in May 1985, the alleged conspiracy to defraud, the alleged conspiracy to pervert the course of justice and the allegation of actually perverting the course of justice. 1 0 JUDGMENT l _____ _ 10 20 30 C) 40 50 60 -- 10 of 12 -- 250995 T5/DL M/T 5215/95 (Thomas J) rt was submitted that under the principles of Lynch v. Keddell (No 2) [1991] QdR 10, there is a discretion to refuse leave to amend a statement of claim which would raise such matters long after the limitation period for such matters has expired. Were it necessary to do so I would exercise my discretion in the manner requested by the defendant. Finally, I note that the third statement of claim is in any event embarrasing and that a fair trial could not be had if that statement of claim were permitted to go forward as the foundation of the litigation. As it is a third version I would exercise my discretion against granting any further leave to replead in this action except for the one cause of action which I have held is not estopped. I think it would be wrong to deprive the plaintiff of the right of litigating that cause of action, which would be the result were I to dismiss the statement of claim and decline to grant any leave to replead at all. That would force him, in effect, to issue a new writ which would be out of time. Accordingly, I propose to strike out all statements of claim and to grant leave to replead limited to a claim for damages for breach of the alleged agreement for the sale and purchase of kitchens and an alternative claim for conversion of the kitchens by the finance company on or about 5 April 1985. The order on the defendant's summons is - the three statements of claim are struck out;. leave to replead limited to the claims just stated; the plaintiff is to pay the defendant's costs of the summons including any costs reserved on 24 August and any costs thrown away by reason of the amended pleadings. 1 1 JUDGMENT 10 20 30 40 50 60 -- 11 of 12 -- 250995 T5/DL M/T 5215/95 (Thomas J) With respect to the plaintiff's summons, that summons is dismissed with costs. 1 2 JUDGMENT -- - ---------- --- 10 20 30 c:: 40 50 60 -- 12 of 12 --