Commonwealth Bank of Australia v James [1992] QSC 423

State Reporting Bureau ltJ TRANSCRIPT OF PROCEEDINGSI (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.) REVISED COPIES ISSUED · . State Report!r.g Bureau ' ·" ;'' ··;,___ -~. ,C .r~· l:. , .• ~ ~i SUPREME ,;COUR~ ~b; •QUE~NStANJ? . CIVIL JURISDICTION -. ··:-·'·'. :!.\:-'- ' ..••.• -.-·-~-.-·,..,,;._:- __ ,,._.-~ .•.• ·• .. •~··. '-- •. ..: .. ~.:.!·- .. · _;·· ·:- ~ RYAN J OS No 1313 of 1992 - - ' ! ' . ..;: ~- : :- ·. ~ . . . : . . ·. ; :.· ; '· ~ p ,_ ..._ ; •• ·~COM-MONWEALTH BANK. OF -AUSTRALIA ·-- ... ~- r;.-·. -:::_,. ~-:i ···, t- -~-;·::;_;J:; ~~ - .. ~(} and .. : '·· ... . . . COLIN RAYMOND JAMES BRISBANE .. DATE 1 5/1 2 I 9 2 . . JUDGMENT-. . ~ ' 1 ....... .: ,P,laintiff Defendant ·-.·· -: :·' _ .. · ·'-: .. . - -~. --:' ·:.... .. :. ;;: ,:-,_- .. ··,· ... -- 1 of 9 -- ~---.---- 151292 HIS HONOUR: I order that leave to defend shall be conditional on the payment into Court by the defendant within 21 days of the amount which he admits has been advanced to him, namely $51,000. 10 I reserve the costs of this application. I give liberty to apply on two days notice and I publish my reasons. 20 L I make the amendment in paragraph 1 as contained in the draft I arid· I~ will initial that. The r~mainder of the draft will not be approved in view of the decision. 30 40 50 60 JUDGMENT 2 -- 2 of 9 -- '' s C- '?c;J./ (k,l\ \\ IN THE SUPREME COURT OF QUEENSLAND O.S. No. 1313 of 1992 Brisbane Before The Hon. Mr. Justice K.W. Ryan [Re: Colin Raymond James] BETWEEN: COMMONWEALTH BANK OF AUSTRALIA Plaintiff c: AND: c COLIN RAYMOND JAMES Defendant REASONS FOR JUDGMENT - RYAN J. Judgment delivered on 15/12/1992 Counsel: Solicitors: Hearing Date: Ms. D.A. Mullins for Applicant Mr. A.M. Daubney for Respondent David J. Frank, Solicitor, Brisbane forApplicant Graham Davies & Associates T/A for Bells, Solicitors, Benowa 8/12/1992 -- 3 of 9 -- IN THE SUPREME COURT OF QUEENSLAND o.s. No. 1313 of 1992 Brisbane Before The Hon. Mr. Justice K.W. Ryan [Re: Colin Raymond James] BETWEEN: COMMONWEALTH BANK OF AUSTRALIA Plaintiff AND: COLIN RAYMOND JAMES Defendant REASONS FOR JUDGMENT- RYAN J. Judgment delivered on 15/12/1992 Application has been made on behalf of the plaintiff that pursuant to 0. 18 r. 1 judgment be entered for the plaintiff to recover possession of certain land. By specially endorsed writ issued on 7 September 1992, the plaintiff claims recovery of land as mortgagee from the defendant pursuant to the terms and conditions of a registered bill of mortgage on the ground of default by the defendant and demand of possession. The bill of mortgage was granted by the defendant on 14 May 1986 over the land in consideration of certain advances and accommodation granted or to be granted to the defendant. It is alleged that on 23 June 1992 the sum of $138,680.46 was due and owing pursuant to the terms of the bill of mortgage, that on that date the plaintiff made demand for payment of that sum, and the defendant having failed to satisfy the demand the plaintiff served on the defendant a notice of exercise of power of sale. -- 4 of 9 -- 2 It is alleged that the defendant has not remedied the default referred.to in the notice and remains in default under the bill of mortgage:and -remains in possession of the land. An appearance was entered for the defendant on 19 October 1992 . . The allegations in· the endorsed statement of claim are supported by an affidavit of a bank officer . . The· defendant has filed an affidavit to which he has exhibited a defence and· counterclaim, and deposes that the (~ matters.·detailed ·in it are true and correct. He denies that on 23 June·1992 the -sum of .$138,686.46 was due and owing by him to the plaintiff under the_ terms of the bill of mortgage. He admits that -demand for payment~was made, but denies that he was liable to·pay the ·sum:demanded. He denies that the-plaintiff is or was entitled to take or recover possession of the land from the defendant. The defendant_ resists the application · on three grounds. ;\ \__) First, he claims that· pursuant to s. 87 of_ the Trade· Practices Act'an order should be made that the Court refuse to enforce any or-all of the provisions of the bill of mortgage~ Secondly, he claims that the plaintiff· is estopped from asserting that he failed to make the repayments required under-the loan to him and from.relying on·thedefault provisions of the bill of mortgage. Thirdly, he· says that he has suffered .loss and damage and that he is entitled to damages under s. _82 of. the Trade Practices Act and/ or. for negligent misstatements and/ or for breach of fiduciary duty. () I -- 5 of 9 -- 3 The defendant stated · that in May 1986 he . entered into negotiations with the ·plaintiff for the purpose of securing financial accommodation for the purpose of building a house. He told the plaintiff's officer that in partnership with his son and one David Warner, he proposed to build a "spec" home on the land for sale, and in order to build it he required an advance. of between $50,000 and $60,000. The plaintiff's officer told him that it would advance the funds requested by a number of "small business loans", to be secured by a mortgage of the land, and that such loans would be "interest only" loans for a term of five ! r-· years. The defendant· accepted this financial accommodation,- -and \ '---. he commenced construction of the "spec" home on the land. He. drew down the sum of $20,000 from the plaintiff by way of a small business loan on 14 May 1986,· and a further amount:of·$10,000 on. 23 July 1986 by way of an increase to the small business loan. He states that the advance of $20,000 was represented by the plaintiff to require repayments of $360 per month· over ten years and that "the said increase of $1 0, 000 on about 23rd.· July 1986 to the small business loan by the facil"i ty ·was taken to a total of $30,000, was expressed and represented by the plaintiff to require monthly requirements of $5,312 over a ten year term". I have written out this a·llegation as 'it is expressed in the defence, though it may contain an error. In September·1986,.the defendant • s son, who was his ·.partner in the partnership, committed suicide. The defendant advised the plaintiff of this fact, and the plaintiff thereupon represented to the defendant. that the plaintiff would assist the defendant by providing him with such finances as would be required to complete the -- 6 of 9 -- 4 construction and sale of the "spec" ~home,. and that given· the extent of .the equity which the defendant retained in the project, he should not worry about. the financial accommodation being provided bythe plaintiff. On 10 November 1986, acting on these representations, the defendant drew down a further amount of $6,000 from the plaintiff by.way· of. an increase to the small business loan. In March 1987, the defendant paid .the sum of $28,166.77 to the. plaintiff pursuant to an. agreement between the parties and/ or it having been represented by the plaintiff to the defendant that sueh moneys_would be .retained by the. plaintiff and applied from month-to month thereafter in satisfaction of the monthly interest payable by. the defendant under .the small business. loan. Restrictions of the defendant's rights to deal with the land and of the level of borrowings the defendant was allowed to take from.the plaintiff occurred.as a consequence of orders made by the ··Family Court of Australia in matrimonial proceedings between the. defendant and his then wife. Thereupon the plaintiff represented to the defendant that as soon as settlement of the Family Court proceedings had been achieved, the plaintiff would advance to the defendant the balance of funds necessary for the defendant to.complete. construction of the "spec" home. However, when the proceedings had been completed, the plaintiff refused to advance further funds to the defendant . . Eventually inNovember 1990, the further $1s,qoo required to complete the "spec" home was made available to the defendant as, a result o£ which the building work on the "spec" home was completed in December 1990. c !\' ( ' ··-.. .... / -- 7 of 9 -- ' ' ' . ., .. 5 . It is claimed that in making.the. representations mentioned, in failing to observe the terms of the ten year small business· loan as represented by the plaintiff, · in failing to make available the funds to complete construction of the "spec" home, and in failing to account properly or at all for the $28,166.77 paid by the defendant to the plaintiff, the plaintiff has engaged in conduct which .was misleading and deceptive or likely to mislead or deceive. Further or in the alternative it is claimed that the representations were intended by the plaintiff to be acted on by the defendant, that the defendant acted in reliance _ thereon and was induced by the plaintiff to make the payment of i ,...--. './ $28,168.77 to the plaintiff on the basis that such. moneys would be retained by the plaintiff and applied month to month thereafter in satisfaction of the monthly. inherest . payment. Hence it is claimed that the plaintiff is estopped from asserting that the defendant failed after the time of.-such payment to make I ~ the repayments required under the small. business loan and from· · relying on the default provisions of the bill of mortgage. It -- is also claimed that the defendant.has the right to set off his counterclaim for damages. I can see no basis for concluding that the defendant has shown that there is a triable issue by reason of the operation of the doctrine of estoppel. The contention is that in March 1987 he made a payment of $28,166.77 which the plaintiff undertook to apply month by month in satisfaction of the monthly interests payments payable by.him. The bank's record show that. on 13 March 1987 he was credited withthe sum of $22,616.75. and a further sum of $360. Thereafter interest payments were charged -- 8 of 9 -- •• ., l 6 to him which exceeded that amount, or indeed the amount of $28,166.77. There is nothing in the material he has presented which indicates that if the plaintiff made the representation alleged, it was not carried out or that the defendant has suffered any loss by reason of it. The question then is whether the defendant has shown that there is a triable issue by reason of the claim under s. 87 of the Trade Practices Act or by reason of a set-off. I consider that the material filed on behalf of the applicant does not give ~uch particularity as indicates that there is an arguable case for a set-off which would deprive the plaintiff of its right to recover possession of the land. It is not however clear that there is no real question to be tried in relation to the claim under s. 87 of the Trade Practices Act and accordingly I refuse to order summary judgment, but I order that leave to defend shall be conditional on the payment into court by the defendant within 21 days of the amount which he admits has been advanced to him, namely $51,000. I reserve the costs of this application. I give liberty to apply on two days' notice. -- 9 of 9 --