Banksia Mortgages Limited v Croker and Anor

Judgment 1JOHNSON J: Before the Court is an application by the Defendants, Leslie William Croker and Ruth Christine Croker, for the continuation of a stay of a judgment granted by Schmidt J on 13 December 2012, being a monetary judgment against them in favour of the Plaintiff, Banksia Mortgages Limited, for a sum in excess of $5 million. 2On 11 February 2013, these proceedings came before me in the Duty Judge list. In a judgment delivered that day, I outlined the history of the proceedings to that date, at least, in a shorthand form. 3Put shortly, Schmidt J, in December 2010, gave judgment against Mr and Mrs Croker following a contested hearing: Banksia Mortgages Pty Limited v Croker and Ors [2010] NSWSC 1447. An appeal was lodged with respect to that decision, but the appeal was discontinued in mid-2011. 4On 13 December 2012, Schmidt J gave monetary judgment in the sum which I have indicated. Thereafter, her Honour stayed the monetary judgment for a period because Mr and Mrs Croker indicated that they were seeking to take steps to bring proceedings for third-party fraud and to obtain legal assistance. Schmidt J granted a stay until 4 February 2013. 5For reasons explained in my decision of 11 February 2013, Hidden J continued the stay from 4 February 2013 until 8 February 2013, and then 11 February 2013, when the matter came before me. On that occasion, the Court was informed that Mr and Mrs Croker had sought pro bono assistance from the Law Society of New South Wales and were actively pursuing that application. In addition, an affidavit was placed before the Court, sworn on 6 February 2013 by Detective Senior Constable Shawn Schussler, which outlined investigatory action being taken by police with respect to a number of mortgage transactions and surrounding events, including those involving Mr and Mrs Croker. 6On that occasion, I indicated some of the hurdles lying in the path of Mr and Mrs Croker. However, I granted, what I described (at [23]) as, a significant indulgence to them, that is, to extend the stay and adjourn the matter until today to allow them an opportunity to pursue the pro bono application and to seek to commence proceedings, in the manner which the Court was informed they intended to do, to set aside the judgment. The stay was continued until 4.00 pm today, and directions were given for material to be served by Mr and Mrs Croker by 20 March 2013. 7As it happens, the proceedings came before me again when Mr and Mrs Croker made an application concerning certain caveats. Those applications came initially before Nicholas J as Equity Division Duty Judge, and then before me on 20 February 2013, when I refused Mr and Mrs Croker's application with respect to the caveats. 8The material furnished on 20 March 2013, in accordance with the orders of the Court, included two draft affidavits of Mrs Croker, which have been sworn and filed and read in Court today. In addition, there is a further affidavit of Detective Senior Constable Schussler sworn 6 March 2013, which outlines the police investigation. That affidavit, I note, is very similar to the previous affidavit of the police officer, with some additional paragraphs indicating that there are ongoing investigations occurring. 9In addition, there was provided electronically a draft Summons. The draft Summons was not filed. Mrs Croker has informed the Court that persons in the Registry indicated that the issue of a Summons could be raised with the Court today, as indeed it has. 10The draft Summons nominates Mr and Mrs Croker as Plaintiffs and, as Defendants, Ian David Lazar, Commercial Mortgage Trade Pty Limited, Rural Security Holdings Pty Limited, Douglas Grant McCartney and Banksia Securities Limited. 11I note that Ms Coorey has attended Court today in the interests of Mr Lazar, Commercial Mortgage Trade Pty Limited and Rural Security Holdings Pty Limited. 12The draft Summons seeks relief in the nature of certiorari and relief in the nature of mandamus under s.69 Supreme Court Act 1970, quashing the orders made by Schmidt J on 16 August 2010 and 29 November 2012. The draft Summons seeks to identify the basis for the relief sought as being that the making of the orders was caused or procured by fraud, and/or conduct analogous to fraud and/or conduct amounting to bad faith, which conduct was the conduct of the Defendants and/or their agents or privies and/or in which the Defendants were complicit (and the order giving possession would not have been made but for that conduct). 13The particulars of the said conduct are set out, according to the draft Summons, in Annexure A to the Summons. I have not seen an Annexure A in any of the material which has been furnished by Mr and Mrs Croker. In any event, this procedure would be quite an irregular and erroneous way to seek to advance a claim of this type. I will return to that matter shortly. 14The draft Summons further seeks an order that the orders of Schmidt J be quashed as they were premised upon the acceptance by the Court of evidence, statements or undertakings given to the Court by the Defendants which evidence, statements, or undertakings were fraudulently or deliberately misleading and/or obtained by fraud. 15I pause to make two observations. 16Firstly, the Uniform Civil Procedure Rules 2005 ("UCPR") are entirely clear, that any proceedings on a claim based on an allegation of fraud are to be commenced by Statement of Claim: Rule 6.3(c) UCPR. Rule 14.14(3) UCPR provides that matters which must be pleaded specifically in a claim are matters including a claim of fraud. The Courts have emphasised that specificity and particularity are required where a judgment or order is sought to be set aside upon the ground that it was procured by fraud: Wentworth v Rogers (No. 5) (1986) 6 NSWLR 534 at 538-539; Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 700. 17The use of a Summons is misconceived. A Summons is a procedure for commencement of other types of claims, referred to in Rule 6.4 UCPR. 18Secondly, a judgment and orders of a Judge of the Supreme Court of New South Wales, a superior Court of record, is not open to challenge by way of an application for prerogative relief in the nature of certiorari and mandamus under s.69 Supreme Court Act 1970 (Fleet v Royal Society for the Prevention of Cruelty to Animals [2008] NSWCA 227 at [36]; Ritchie's Uniform Civil Procedure NSW, LexisNexis Butterworths, paragraph [SCA s.69.40]). 19Accordingly, it seems to me that the draft Summons is fundamentally misconceived, both as to form and substance. 20I decline leave to Mr and Mrs Croker to file the draft Summons. 21I have had regard to the affidavits of Mrs Croker, which were served in accordance with the order of the Court, concerning events which have occurred since the matter was last before me in February 2013, and what Mrs Croker has advanced with respect to a claim of fraud. I have had regard, as well, to the affidavit of the police officer. 22The Court has been informed that the application for pro bono assistance has been refused by the Law Society of New South Wales. Accordingly, Mr and Mrs Croker are presently unrepresented, although I am informed that they are still seeking legal representation. To that extent, their position has moved backwards since 11 February 2013. 23No proceedings have been brought which seek to set aside the judgment for fraud. The draft Summons is simply incapable of having that effect. What is left then is a series of claims made by Mr and Mrs Croker against a number of persons and entities, which appear to be the subject of an ongoing police investigation. 24What should the Court do when the sole matter that is before the Court is the application to further extend a stay which expires at 4.00 pm today? 25In my view, Schmidt J extended very considerable opportunities to Mr and Mrs Croker to take steps, as had been foreshadowed. Hidden J granted more time, and I have granted even more time. 26The position remains that there is no appeal on foot. There are no other proceedings on foot. There is a statement by Mrs Croker that it is desired to bring proceedings and that, no doubt, the police investigation may shed some light upon matters which may be relevant to possible proceedings. 27The sole question for me, however, is whether the civil proceedings, which are at an end and (as to part at least) have been at an end since 2010, and the orders made in December 2012, ought be further stayed. This decision requires the exercise of judicial discretion. 28The Plaintiff has been represented by counsel on several occasions, whilst Mr and Mrs Croker seek more and more time to take steps which have not yet been taken. In my view, the point has been reached where the Court should not grant any further stay. 29If Mr and Mrs Croker commence proceedings in this Court, then it may be, as Mr Bolster, counsel for the Plaintiff, has said, that a Court could consider what, if any, interlocutory relief may be granted. In saying that, I am neither encouraging the bringing of proceedings by Mr and Mrs Croker, nor am I granting leave for them to do so. However, if proceedings are commenced, there is the prospect of further application being made by them. Nothing that I am saying today stops Mr and Mrs Croker from bringing proceedings. 30However, no proper basis has been demonstrated for the further extension of a stay, which itself was an exceptional order. To further extend the stay would now have to be regarded as a highly exceptional order, requiring the demonstration of a clear foundation for a further extension. I am not convinced that such a foundation has been demonstrated. 31I decline to extend the stay, which will expire at 4.00 pm today. 32I order Mr and Mrs Croker to pay the costs of Banksia Mortgages Limited of today.