Bradshaw & Anor v Secure Funding Pty Ltd

SUPREME COURT OF QUEENSLAND

CITATION: Bradshaw & Anor v Secure Funding Pty Ltd [2012] QCA 52

PARTIES: JAMES TODD BRADSHAW IRENE BRADSHAW (appellants) v SECURE FUNDING PTY LTD (FORMERLY KNOWN AS LIBERTY FUNDING PTY LTD) ACN 081 982 872 (respondent)

FILE NO/S: Appeal No 6356 of 2011 / SC No 225 of 2010

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED ON: 16 March 2012

DELIVERED AT: Brisbane

HEARING DATE: 10 November 2011

JUDGES: Margaret McMurdo P, Chesterman JA and Margaret Wilson AJA / Separate reasons for judgment of each member of the Court, each concurring as to the order made

ORDER: Appeal dismissed with costs

CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES – SUMMARY JUDGMENT – where the appellant appealed an order granting summary judgment – where the appellant claimed damages for malicious prosecution, trespass, unconscionable conduct and breach of contract – where the appellant claimed punitive damages for maliciously instituting civil process – where the appellant’s payments were incorrectly recorded and the respondent attempted to enforce the loan and the security – where the appellant successfully defended two Supreme Court proceedings brought by the respondent to recover possession of the appellants’ home and the loan – where the respondent rectified errors in the loan account – where the appellant failed to demonstrate any relevant error in the primary judge’s analysis – whether the appellants have any real prospect of success – whether a trial of the appellants’ claims is necessary / Australian Securities and Investments Commission Act 2001 (Cth), s 12DA / Trade Practices Act 1974 (Cth) / Uniform Civil Procedure Rules 1999 (Qld), r 293 / Bradshaw & Anor v Secure Funding Pty Ltd (formerly Liberty Funding Pty Ltd) [2011] QSC 184**,** cited / Halliday v Nevill (1984) 155 CLR 1; [1984] HCA 80, cited / Hanrahan v Ainsworth (1985) 1 NSWLR 370, cited / Metall & Rohstoff v Donaldson Inc [1989] WLR 563; [1990] 1 QB 391; [1989] 3 All ER 14, cited / QIW Retailers Ltd v Felview Pty Ltd [1989] 2 Qd R 245, cited / Plenty v Dillon (1991) 171 CLR 635; [1991] HCA 5, cited / Varawa v Howard Smith Co Ltd (1911) 13 CLR 35; [1911] HCA 46, cited / Williams v Spautz (1992) 174 CLR 509; (1992) 107 ALR 635; [1992] HCA 34, cited

COUNSEL: The appellants appeared on his their own behalf / T Pincus for the respondent

SOLICITORS: The appellants appeared on their own behalf / Norton Rose Australia for the respondent

1. MARGARET McMURDO P: I agree with Margaret Wilson AJA's reasons for refusing this appeal from the primary judge's order of 23 June 2011 giving summary judgment for the respondent against the appellants.

2. The judge adjourned the question of costs to a date to be fixed, having noted in her reasons:¹

“[36]I am mindful, however, that the steps taken by the [respondent] since the commencement of this proceeding to address the errors in the entries to the [appellants'] loan account with the [respondent] have contributed to the [appellants'] lack of success. That is a relevant consideration in relation to the exercise of the discretion to order costs.

[37]I am proposing to publish my reasons and make the orders which follow, and then give the parties an opportunity to consider these reasons before deciding whether to re-list this matter for a costs argument:

1.Judgment for the [respondent] against the [appellants].

2.Liberty to either party to apply on two days' notice in writing to the other.

3.The issue of costs is adjourned to a date to be fixed.”

3. On 22 July 2011, the judge ordered that the appellants pay the respondent's costs and granted the appellants leave under s 253 Supreme Court Act 1995 (Qld) to appeal against the order for costs.

4. The appellants' notice of appeal in this matter was filed before that costs order was made. It did not contain, therefore, a discrete ground of appeal concerning costs. The notice of appeal did, however, seek an order for “Costs”, without specifying whether the appellants sought only costs of the appeal or also the costs of the proceeding before the primary judge. Since being granted leave to appeal from the costs order, the appellants have not filed a separate appeal, although they did include that order in the appeal record book.

5. The appellants, therefore, have not appealed the costs order below, despite being given leave to do so. In case the appellants are taking issue on this appeal with that costs order, I note that they have not demonstrated any reason for this Court to interfere with the primary judge's discretionary decision. That was because, although the appellants were understandably angry and frustrated with the respondent's conduct towards them, their action against the respondent was misconceived and doomed to fail from inception.

6. Ground D of the appellants' notice of appeal claimed the primary judge “erred in failing to rule on an application by the appellant to cross-examine Mr Lenicka whose affidavit had been tendered by the defendant/respondent”.

7. I did not apprehend that the appellants made any submissions in support of this ground but they did not abandon it. It is, perhaps, prudent to deal with it. The transcript of the proceedings before the primary judge shows that the appellants did not actively pursue any application to cross-examine Mr Lenicka.² That is unsurprising. Margaret Wilson AJA has referred to the document exhibited to Mr Lenicka's affidavit which the appellants emphasised in this appeal.³ Mr Lenicka was the respondent's solicitor. His affidavit merely exhibited documents concerning the respondent's business records, pleadings and documents relevant to the pleadings in the actions between the parties. Mr Lenicka could not give evidence of his personal knowledge of the respondent's actions or intentions. The appellants have not demonstrated that cross-examining Mr Lenicka could have assisted their claims. This ground of appeal, if it was pursued, was not made out.

8. I agree with the orders proposed by Margaret Wilson AJA: the appeal should be dismissed with costs.

9. CHESTERMAN JA: I agree with the order proposed by Margaret Wilson AJA for the reasons given by her Honour.

“1.Damages, including punitive damages for misleading or deceptive conduct or in the alternative unconscionable conduct pursuant to the Australian Securities & Investment Commission Act 2001 Sect 12DA and Trade Practices Act

2.Damages including punitive damages for the tort of maliciously instituting civil process.”⁵

12. After the appellants filed an amended statement of claim on 21 October 2010, the respondent applied for summary judgment pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld) or, alternatively, to strike out all or parts of the amended statement of claim. A further amended statement of claim was filed on 2 March 2011. Orders striking out the further amended statement of claim, giving the appellants leave to re-plead, and adjourning the application for summary judgment were made on 4 May 2011.⁶

13. The appellants filed a “Repleaded Statement of Claim” on 24 May 2011.⁷ They claimed damages, including aggravated damages and exemplary damages, for abuse of process, trespass, unconscionable conduct, and breach of contract. They elected trial by jury.

14. The respondent pursued its application for summary judgment. There was an oral hearing on 30 May 2011, followed by a lengthy written submission on behalf of the appellants. Judgment was given on 23 June 2011.

15. The male appellant is a non-practising barrister. He appeared before the primary judge by telephone on behalf of the female appellant (his wife, who is also known as Ms Coronis) as well as on his own behalf.⁸ He appeared before this Court on his own behalf. The female appellant appeared by telephone during the first part of the hearing; she terminated the telephone connection when the Court adjourned for lunch, and chose not to appear when the Court resumed.⁹

Background

16. In April 1999 the appellants borrowed $299,000 from the respondent. Interest, at a variable rate, was payable on the loan, which was to be repaid by monthly repayments over 25 years. The loan was secured over two properties.

17. In the loan agreement the appellants were referred to as “you” and the respondent as “we”.¹⁰ Clauses 8 and 10 provided –

“If you are in default?

_______________________________________________________

When are you in default?

8.1You are in default if:

(a)you do not pay on time all amounts due under this agreement; or

(b)you do something you agree not to do, or don’t do something you agree to do under this agreement;

(c)you give, or another person gives, us incorrect or misleading information in connection with this agreement or a security; or

(d)we reasonably believe that you or another person has acted fraudulently in connection with this agreement or a security; or

(e)you are, or a security provider is, in default under a security or withdraws from it; or

(f)you become, or a security provider becomes, insolvent or steps are taken to make you or the security provider so; or

(g)a power of sale arises under any security interest over any property which is secured by a security; or

(h)if you enter this agreement as a trustee:

●a receiver, or receiver and manager of the trust is appointed; or

●any judgment is enforced against trust property; or

●you suspend payment of the debts of the trust, you admit in writing your inability to pay these debts or you cease, or threaten to cease, to carry on the business of the trust**.**

What can happen then?

8.2If you are in default, we may give you a notice stating that you are in default.

If you do not, or cannot, correct the default within any period given in the notice or required by law (or if you are in default again for a similar reason at the end of that period), then, at the end of that period and without further notice to you, the total amount owing becomes immediately due for payment (to the extent it is not already due for payment).

We may then sue you for that amount, or enforce any security, or do both.

8.3If we are unable to locate you or we believe you have acted dishonestly,, we need not give the notice or wait until the end of any period given in a notice. Instead, if you are in default, the total amount owing becomes immediately due for payment without notice. We may then immediately sue you for that amount, or enforce any security, or do both.

Higher interest charges

Under this agreement a default rate of interest may be charged when payments are in default.

8.5You must pay interest charges at a higher rate – the default rate – on any amount while it is overdue.

8.6These charges are payable daily. On each repayment date (and monthly after the end of the loan term), we add them to the overdue amount. (This is known as “capitalising” or “compounding” the interest.) You are then liable for default interest charges on the new amount overdue.

8.7The default rate at the disclosure date is shown in the schedule. The default rate is always 2% more than the normal annual percentage rate and therefore, if the normal annual percentage rate changes, so does the default rate. This includes if the normal annual percentage rate changes because you change interest rate option.

8.8Your obligation to pay on time is not cancelled by the provisions of this clause.

...

Other costs and charges

_______________________________________________________

Enforcement expenses may become payable under this agreement or any mortgage or other security in the event of a breach.

10.1You must pay us:

(a)all fees and charges in the circumstances indicated in the schedule and all new fees and charges we impose under clause 10.3; and

(b)financial institutions duty, bank accounts debits tax and all additional government stamp and other duties and charges payable on receipts or withdrawals in connection with this agreement or a security; and

(c)when we ask, any reasonable expenses we reasonably incur in enforcing this agreement or a security after you are in default (including in the case of a mortgage, expenses incurred in preserving and maintaining property such as by paying insurance, rates and taxes for the property).

We may keep any fees and charges shown in the schedule that have already been paid.

10.2You authorise us to debit any of these amounts to your loan account. We may do so on or after the date we pay them or the date they become due or payable by you or us (whichever is earlier).

10.3The fees and charges current at the disclosure date are shown in the schedule.

We may change the amount of any fee or charge or change how often they are charged, or impose new fees or charges at any time.

We give you advance notice (in writing or by newspaper advertisement) of any new fee or charge or change to existing fees or charges. But some changes in government fees and charges are publicised by the government and not us.

Information on current interest rates and fees and charges is available on request.”

18. In May 2005 one of the properties was sold. The respondent released its security over that property upon being paid almost $97,000 from the sale proceeds.¹¹ Thereafter the appellants made repayments as follows –

06.07.05$ 700.00

16.08.05$ 700.00

23.09.05$ 2,800.00

24.10.05$ 1,600.00

12.12.05$ 1,600.00

23.12.05$ 1,600.00

17.02.06$ 2,100.00

09.03.06$ 820.00

04.04.06$ 1,230.00

11.04.06$ 170.00

12.07.06$ 550.00

17.08.06$ 2,900.00

08.12.06$ 2,100.00

27.12.06$ 8,700.00

23.03.07$ 1,600.00

28.03.07$ 3,000.00

05.06.07$ 1,500.00

14.08.07$ 565.00.¹²

19. As at 30 July 2009, the appellants’ loan account was in arrears to the extent of $1,471.06. The male appellant was advised that the account was in arrears in a telephone conversation with one of the respondent’s employees on 4 August 2009. According to a record of the conversation kept by the respondent –

“Jim [the male appellant] called advied [sic] him of the arraesr [sic] owing said he will pay in two weeks as will get some super out – aware s 80 will be issued and ongoing fees will acrue [sic] till loan is up to date and notice wil [sic] be acted uponn [sic] if arraers [sic] are not cleared aware of MMP dates.”¹³

20. Three days later (on 7 August 2009), mortgage default notices and notices of exercise of power of sale were issued to the appellants.¹⁴

21. On 13 August 2009 one of the respondent’s employees tried to contact the appellants by telephone, but was unsuccessful.¹⁵

22. On 20 August 2009 the male appellant deposited $18,000 into the respondent’s bank account.¹⁶ The depositor’s name was recorded incorrectly by the respondent’s bank as “J. RINGNSHM” with the notation “unclear”, but with the male appellant’s telephone number correctly recorded. The payment was deposited into the respondent’s general account. It was not identified as from the appellants or recorded against their loan account until 6 October 2009.¹⁷

23. In the mistaken belief that the appellants were still in default,¹⁸ the respondent caused proceeding BS10307/09 to be commenced against the appellants on 17 September 2009. It claimed $270,159.10 as money due and owing under the loan agreement as at 16 September 2009, interest, and recovery of possession of the second property.¹⁹

24. The respondent’s solicitor Michael Carl Lenicka swore –

“17When the payment of $18,000 was credited to the Loan Account on 6 October 2010, it was applied by the Defendant in reduction of arrears owing as at 30 July 2009, 30 August 2009 and 30 September 2009, with the remainder being credited in advance for future payments payable on 30 October 2009 and 30 November 2009.”²⁰

25. Solicitors acting for the appellants filed a notice of intention to defend and defence in proceeding BS 10307/09 on about 26 October 2009. They pleaded the payment of $18,000, and that they had remedied the default and paid in advance to February 2010.

26. On 7 December 2009 the respondent charged professional legal fees of $4,372.54 incurred in proceeding BS 10307/09 to the appellants’ loan account, and then reversed the charge.²¹ The next day it issued further mortgage default notices and notices of exercise of power of sale, based on arrears of $656.33 as at 30 November 2009.²²

27. On 29 December 2009 the appellants deposited $7,800 into the respondent’s bank account.²³ The depositor’s name was recorded incorrectly by the respondent’s bank as “JT ARSOJAN” with the notation “Unclear”, but with the male appellant’s telephone number correctly recorded. The drawer’s name was recorded as “J BAMUSUM” with the notation “Unclear”, and the bank was shown as Westpac. The payment was deposited into the respondent’s general account. It was not identified as from the appellants or recorded against their loan account until 12 May 2010.

28. The respondent caused proceeding BS 1155/10 to be commenced against the appellants on 5 February 2010, on the assumption that the appellants were in default as at 30 November 2009. The respondent claimed $270,868.48 as money due and owing under the loan agreement as at 2 February 2010, interest and recovery of possession.²⁴

29. The appellants made a complaint against the respondent to the Australian Securities and Investments Commission on about 25 March 2010²⁵ and provided a copy to the respondent.

30. Solicitors acting on behalf of the appellants filed a notice of intention to defend and defence in proceeding BS 1155/10 on about 31 March 2010.²⁶ They denied that they were in default, and pleaded payment of $100,000 whereby the obligation to pay did not arise for at least three years from the date of payment, and payment of the $18,000.

31. On 22 April 2010 the male appellant deposited $4,200 into the respondent’s general account.²⁷ The depositor’s name was recorded incorrectly by the bank as “J. BRAYN SHAN” with the notation “unclear”, but with the male appellant’s telephone number correctly recorded. The drawer’s name was similarly recorded, and against each of “Bank” and “Branch”, “unclear” was recorded. The payment was not identified and allocated to the appellants’ loan account until 12 July 2010.

“10.Under the terms of the Loan, interest is capitalised and debited to the Loan on the thirtieth day of each month and otherwise on the last day of each month. The Defendant’s electronic computer records system (SAFE) does not have capacity to allocate standalone credits to an earlier date. As a result, in order for the Statement to correctly reflect the Loan balance after the adjustments, it was necessary for the Defendant to make a manual adjustment to the Loan balance.”³²

36. In July and September 2010 interest adjustments totalling $1,519.56 were credited to the appellants’ loan account in relation to the period from 30 April 2009 to 24 September 2010.³³ The respondent also reversed all charges for default management fees, expired insurance fees, professional legal fees and other account administration charges debited during that period.³⁴

37. On 2 December 2010 the respondent charged professional legal fees of $5,368 to the appellants’ loan account.³⁵ Those fees were reversed on 2 March 2011.³⁶

UCPR rule 293

38. Rule 293 of the UCPR provides –

“293 Summary judgment for defendant

(1)A defendant may, at any time after filing a notice of intention to defend, apply to the court under this part for judgment against a plaintiff.

(2)If the court is satisfied—

(a)the plaintiff has no real prospect of succeeding on all or a part of the plaintiff’s claim; and

(b)there is no need for a trial of the claim or the part of the claim;

the court may give judgment for the defendant against the plaintiff for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”

In applying that test, the primary judge carefully analysed each of the causes of action relied on in the latest version of the statement of claim.

Summary as at commencement of this proceeding

39. What had taken place up until the commencement of this proceeding on 4 May 2010 can be summarised as follows -

(a)The respondent had issued two default notices (the first on 7 August 2009 alleging default to the extent of $1,471.06 and the other on 8 December 2009 alleging default to the extent of $656.33);

(b)Since the issue of the first default notice, the appellants had made three payments ($18,000 paid on 20 August 2009, $7,800 paid on 29 December 2009 and $4,200 paid on 22 April 2010);

(c)The respondent had commenced two proceedings (the first on 17 September 2009 and the second on 5 February 2010) which were still on foot;

(d)The appellants were not in default, and had not been so when either proceeding had been commenced;

(e)The relief sought in both proceedings included payment of all moneys owing under the loan agreement and mortgage and recovery of possession of the appellants’ property;

(f)The appellants had provided the respondent with a copy of their complaint to ASIC, but had not received any response;

(g)The respondent had debited the appellants’ loan account with interest in excess of what was due and with various fees and charges on the erroneous basis of their being in default.

40. Of course the two proceedings commenced by the respondent were subsequently dismissed with costs (on 11 June 2010) and the excess interest and various fees and charges were subsequently reversed retrospectively. The male appellant submitted that the appellants had nevertheless sustained damages being those costs and outlays which they had incurred but been unable to recover from the respondent on the standard basis of costs assessment.³⁷

Abuse of process

41. In their statement of claim the appellants pleaded –

“Abuse of Process

20.The Plaintiffs state that the Defendant has engaged an abusive process by issuing concurrent writs attempting to intimidate, bully and harass the Plaintiffs.

Particulars of Abuse of Process

(a)Issue of Writ 10307/2009;

(b)Issue of Writ 1155/2010.”³⁸

42. The primary judge said –

“[26]The plaintiffs’ submissions confuse a party’s conduct within a proceeding that is described as an abuse of process with the torts that can be based on conduct which is an abuse of process. Within a court proceeding, characterisation of the conduct of a party as an abuse of process may result in sanctions imposed in the course of that proceeding, such as striking out the proceeding, or ordering one party to pay the other party’s costs of wasted steps or applications. That does not necessarily justify the aggrieved party mounting a separate claim for damages, based on the conduct described as an abuse of process, for an action in tort, such as the tort of malicious prosecution or the tort of collateral abuse of process.

[27]For the plaintiffs to maintain a tortious cause of action in this proceeding based on the defendant’s commencement of the first and second proceedings, the plaintiffs’ statement of claim must disclose the elements of the cause of action….”

43. Her Honour dealt with the tort of collateral abuse of process, saying –

“[29]The tort of collateral abuse of process requires proof that a proceeding was brought as a means of carrying out a collateral and unrelated purpose that was not within the scope of the proceeding and was therefore improper: Williams v Spautz.³⁹ Apart from the fact that the tort of collateral abuse of process has not been properly pleaded by the plaintiffs, the evidence precludes the plaintiffs’ having any real prospect of succeeding in such a claim. The purpose of the defendant commencing each of the first and second proceedings was to exercise its rights under the mortgage which it believed had accrued, although it has subsequently been shown that belief was mistaken.”

44. The male appellant submitted that the primary judge erred in her analysis of the relevant law. He submitted that conduct interfering with the integrity of the Court which results in damage to the affected party is actionable as a tort. Further, he submitted, whether the conduct resulted in damage is to be assessed at the commencement of the proceeding in which relief is claimed for the abuse of process.⁴⁰

45. As the primary judge explained, the term “abuse of process” may be used in two different senses.

46. First, in the exercise of its inherent and express powers to control its own processes, the Supreme Court may stay a proceeding which is an abuse of process. A criminal prosecution may be permanently stayed to prevent the accused from being subjected to an unfair trial, and a proceeding (whether criminal or civil) may be stayed because it has been instituted or continued for an improper purpose or because it replicates a claim for which there is already a proceeding on foot.

47. Secondly, there is the tort of collateral abuse of process.

48. In Varawa v Howard Smith Co Ltd ⁴¹ Isaacs J said –

“In the sense requisite to sustain an action, the term ‘abuse of process’ connotes that the process is employed for some purpose other than the attainment of the claim in the action. If the proceedings are merely a stalking-horse to coerce the defendant in some way entirely outside the ambit of the legal claim upon which the Court is asked to adjudicate they are regarded as an abuse of process for this purpose…”

49. In Williams v Spautz ⁴² Brennan J said –

“I would formulate the test in this way: if there be a reasonable relationship between the result intended by the plaintiff and the scope of the remedy available in the proceeding, there is no abuse of process.”

His Honour recognised that there may be mixed purposes, some legitimate and some collateral, and continued –

“The gravamen of the test, I apprehend, is that the plaintiff did not commence or maintain the proceeding for any substantial legitimate purpose. I would state the test in that way. Substantiality is a matter of degree, ascertained by reference to the intention attributed to the plaintiff in all the circumstances of the case. At the end of the day, the court must determine, by reference to the intention attributed to the plaintiff, not merely whether the collateral purpose of the proceeding outweighs any legitimate purpose but whether the plaintiff entertained any substantial intention that the proceeding should achieve a legitimate purpose.

For these reasons, I would hold that an abuse of process occurs when the only substantial intention of a plaintiff is to obtain an advantage or other benefit, to impose a burden or to create a situation that is not reasonably related to a verdict that might be returned or an order that might be made in the proceeding.”

A party’s purpose is to be distinguished from his or her motive.⁴³

50. In Metall Rohstoff v Donaldson Inc⁴⁴ the English Court of Appeal said –

“Relief in tort under the principle of Grainger v Hill⁴⁵ is not, in our judgment, available against a party who, however dishonestly, presents a false case for the purpose of advancing or sustaining his claim or defence in civil proceedings. This may well cause hardship to an injured party who cannot be sufficiently compensated by an appropriate order for costs. However, if there is a gap in the law it rests on sound considerations of public policy, as does the rule of law which gives immunity to witnesses against civil actions based on the falsity of evidence given in judicial proceedings. If the position were otherwise, honest litigants might be deterred from pursuing honest claims or defences and honest witnesses might be deterred from giving evidence: compare generally Business Computers International Ltd v Registrar of Companies⁴⁶ and the cases there cited.”

51. In commencing each proceeding, the respondent’s purpose was to exercise rights which it wrongly thought had accrued under the loan agreement and the mortgage. Although the relief sought in the two proceedings was very similar, the proceedings were based on different alleged defaults. The respondent was not seeking to obtain some collateral advantage outside the ambit of the relief claimed in the proceedings. The appellants had no real prospect of establishing that there was an actionable abuse of process.

52. Further, special damage must be alleged and proved in a claim for the tort of collateral abuse of process. Here the excess interest and various expenses charged were reversed by the respondent, albeit retrospectively. That left the appellants’ claim for the difference between indemnity costs and standard costs. In QIW Retailers Limited v Felview Pty Ltd⁴⁷ Macrossan J (as his Honour then was) held that the difference between party and party costs and solicitor and client costs was not recoverable as damages for abuse of process, but in Hanrahan v Ainsworth⁴⁸ Hunt J left this question open. In the circumstances of this case, it is not necessary to determine whether they would have been recoverable in principle. Nor is it necessary to consider the claims for aggravated and exemplary damages.

53. The primary judge also considered whether the appellants had any real prospect of succeeding in a claim based on another tort, malicious prosecution, even though it had not been pleaded. Her Honour said –

“[27]…The tort of malicious prosecution can be brought in relation to a civil proceeding that has been dismissed where the party who brought and continued the proceedings acted maliciously and without reasonable and probable cause: A v New South Wales⁴⁹ ...”

Her Honour found that the commencement of each proceeding was attributable to errors made by the respondent, but that there was no malice in its conduct, and that although the relief the respondent sought in the two proceedings was in practical terms identical, the constituent facts for each proceeding were relevantly different. She concluded –

“[28]The tort of malicious prosecution has not been properly pleaded by the plaintiffs, but there is little point in giving the plaintiffs a further opportunity to plead the cause of action, when the only conclusion from the material on the summary judgment application is that the plaintiffs have no real prospect of succeeding in such a claim.”

54. The tort of malicious prosecution is committed when a person maliciously and without reasonable and probable cause initiates a proceeding against another which terminates in favour of the other and which results in damage to the other’s reputation, person, freedom or property.⁵⁰ Malice must be specifically pleaded,⁵¹ and where it is raised and disputed, it is a question of fact for determination at trial.

55. In my respectful opinion the primary judge erred in making a finding about it when the tort of malicious prosecution was not pleaded and there was no other allegation of malice. But nothing turns on this error in this appeal.

Trespass

56. The appellants’ claim in trespass focussed on the conduct of the respondent, its solicitors (identified by the appellants as “Deacons/Norton Rose”) and their agents in entering their property to serve proceeding BS 1155/2010. They pleaded –

“Trespass

21.The issue of Writ 1155/2010 when earlier Writ 10307/2009 was on foot was unlawful and an abuse of process.

22.At all material times the Defendant knew that they had unlawfully imposed fees, charges and penalties when they issued Writ 1155/2010 and the Plaintiffs opposed and resisted any unlawful acts by the Defendant relating to the property the subject of their claim in 10307/2009.

23. The Defendant and Deacons/Norton Rose at all material times knew that the issue of Writ 1155/10 was not justified in fact for the reasons pleaded herein, including their knowledge that at least on 6 October 2009 $18,000.00 had been paid and that a default notice on 8 December 2009 could not properly or lawfully be issued.

24.At the time Writ 1155/10 was issued, the Defendant and Deacons/Norton Rose knew from the Plaintiffs’ defence of Writ 10307/09 that the Plaintiffs would fully defend any unlawful claim.

25.At all material times the Defendant knew that Writ 1155/10 was not a lawful process, an abuse of the process and there was no justification in law for a process server to enter the Plaintiffs’ property with that process.

26.The Defendant was never invited onto the Plaintiff’s property and Deacons/Norton Rose knew that the Defendant and their agents were not welcome on the Plaintiffs Property.

27.The Defendant and Deacons/Norton Rose knew from their involvement with the Plaintiffs and their lawyers in relation to Writ 10307/09 that the relationship between the Plaintiffs and the Defendant had broken down completely.

28.Deacons/Norton Rose instructed the process server to enter the Plaintiff’s property to serve Writ l155/2010.”

57. The appellants did not dispute the efficacy of the service: indeed, they entered an unconditional notice of intention to defend that proceeding.⁵² Their contention was that the process server had entered their property without their consent and thereby committed a trespass.

58. The primary judge held that they had no real prospect of succeeding in their claim for damages for trespass. Her Honour said –

“[30]As the trespass claim is based on the allegation in paragraph 21 of the statement of claim that the issue of the second proceeding, while the first proceeding was on foot, was unlawful and an abuse of process (which I have rejected), the plaintiffs have no real prospect of success in respect of the claim for damages of trespass. In addition, the defendant has the benefit of the conditions in the mortgage and the loan agreement which authorised service of any process issued by the defendant on the plaintiffs at their residential address which must apply, even though the defendant made errors in the entries to the plaintiffs’ loan account which gave the plaintiffs a defence to the proceedings.”

59. A consent or licence to enter land will be implied as a matter of law in some circumstances. In Halliday v Nevill⁵³Gibbs CJ, Mason, Wilson and Deane JJ said –

“The most common instance of such an implied licence relates to the means of access, whether path, driveway or both, leading to the entrance of the ordinary suburban dwelling-house. If the path or driveway leading to the entrance of such a dwelling is left unobstructed and with entrance gate unlocked and there is no notice or other indication that entry by visitors generally or particularly designated visitors is forbidden or unauthorized, the law will imply a licence in favour of any member of the public to go upon the path or driveway to the entrance of the dwelling for the purpose of lawful communication with, or delivery to, any person in the house. Such an implied or tacit licence can be precluded or at any time revoked by express or implied refusal or withdrawal of it.”

60. Further, the respondent had the benefit of clause 23.6 of the mortgage which provided –

“23.6We may serve any document in a court action (including a writ of summons, other originating process or third or other party notice) on you by delivering it to the property or by leaving it there. This clause does not prevent any other method of service.”

Consent to enter the property to effect service was necessarily to be inferred from that provision.

61. The appellants’ contention depends upon proceeding BS 1155/2010 being an unlawful process and an abuse of process, and accordingly there being no lawful justification for the entry upon their land. For the reasons I have already given, they had no real prospect of establishing that the proceeding was unlawful or an abuse of process.

62. Further, there was no evidence before the primary judge of revocation of consent to enter the property. The male appellant submitted that revocation of consent was a matter for the jury. In a vain attempt to give evidence from the bar table, he challenged the veracity of an entry in a document exhibited to the affidavit sworn by Mr Lenicka on 28 February 2011.

63. The document was in the form of a log which Mr Lenicka described as “a printout of excerpts of the [respondent’s] record of telephone contact with the [appellants] in relation to the Loan Account”.⁵⁴ Perusal of the log reveals that it contains not only notes of telephone contacts with the appellants, but also notes of internal reviews of the loan account. The challenged entry was in these terms -

“[16Sep2009 11:21:04 AM - slarkin] - Arrears $4,428.80

[Action Codes - Account Review (ACCREV);]

Transfer to AR

Partial discharge 26/05/05 $96,919 put in advance. No pmt since Aug-O7. Says applying for Super”

The male appellant asked rhetorically why he would have said he was “applying for super” when he had already paid $18,000. He said that the implied licence to enter the property was withdrawn in that conversation. However, close attention to the text of the entry shows that it did not purport to be a record of a telephone conversation on 16 September 2009, but rather a record of an internal review. In the context of the respondent’s not having identified the source of the $18,000 or recorded it against the appellants’ loan account, there was no basis for the challenge to its veracity.

64. The decision of the High Court in Plenty v Dillon⁵⁵ which the male appellant referred to in argument did not assist the appellants. The issue in that case was whether two police officers who went to a farm owned by Mr Plenty to serve a summons on his daughter committed a trespass. The Court held that at common law a police officer charged with the duty of serving a summons is not authorised to go upon land to serve a summons except with the consent of the person in possession or entitled to possession of the land or with some implied leave or licence. The appeal was argued on the footing that any implied consent to enter upon the farm to serve the summons or any other document relating to the matter had been expressly withdrawn. In the circumstances the police officers did commit a trespass.

65. The primary judge did not err in her conclusion that the appellants had no real prospect of succeeding in their claim for trespass.

Unconscionable conduct

66. In the first 18 paragraphs of their statement of claim the appellants essentially set out a chronology of what had occurred. Then they alleged –

“19.At all times the Defendant has used the superior financial position to intimidate and harass the Plaintiffs and to justify demands in common default notices which they knew were baseless to exercise their power to foreclose.”

67. In paragraphs 29 – 34 they pleaded –

“Unconscionable Conduct

29.The Plaintiffs repeat and rely on paragraphs 1 to 19.

30.The Plaintiffs rely on the Defendant’s resolution of a $6,000.00 claim in 2002 and the resolution individually of Writs 10307/09 and 1155/10 on a party/party basis.

31.The use of their vast financial superiority to their advantage and unconscionably inflating the Plaintiffs’ financial obligation.

32.The imposition of further legal costs on 2 December 2010 in excess of $5,000.00.

33.The persistent attempts to foreclose after 11 years forcing the Plaintiffs into unnecessary expenses.

34.Their overall conduct including their misuse of the legal process, vastly superior financial position to litigate and the serious consequences inflicted on the Plaintiffs.”

68. The pleading did not disclose a basis for relief against unconscionable conduct.

69. Given the payments in fact made by the appellants, the respondent’s attempts to recover all moneys owing under the loan agreement and the mortgage and to enforce the security were misconceived. Even if its conduct could be described as “unconscionable” in the sense of showing no regard for conscience or being irreconcilable with what was right or reasonable,⁵⁶ it was not actionable per se. Neither mere inequality of bargaining power nor aggressive and ill-conceived attempts at enforcement provide a ground of relief at common law or in equity. While equity has jurisdiction to relieve against unconscionable transactions,⁵⁷ the appellants’ claim relates to the enforcement actions taken by the respondent; it is not a claim based on the loan agreement and mortgage themselves amounting to an unconscionable transaction. Nor is it a claim based on statute.⁵⁸

70. The appellants had no real prospect of succeeding in their claim for unconscionable conduct.

Breach of contract

71. The appellants alleged breach of an implied term of the loan agreement that the respondent would provide a full and proper accounting and an account statement at the end of June and December each year.⁵⁹

72. The primary judge considered that this claim was arguable. Her Honour continued -

“[32]...The issue is whether the plaintiffs can prove any damages as a result of the breach of such an implied obligation.

[33]The plaintiffs were legally represented in relation to the first and second proceedings. Although they received the benefit of an order for costs assessed on the standard basis in respect of the dismissal of those proceedings, they are out of pocket by the difference between those standard costs and the costs they actually incurred. The problem for the plaintiffs is that there is good authority to support the defendant’s submissions that, as the plaintiffs agreed to the dismissal of those proceedings with an order for costs in their favour on a standard basis, they cannot now pursue the defendant for the difference between their standard costs and solicitor/client costs. That is because that claim for the difference in costs as damages was able to be raised when seeking costs in the first and second proceedings. It can be contrasted to claiming the difference in costs as damages for the tort of malicious prosecution or circumstances where the costs of the original proceeding were not able to be pursued in that proceeding: Avenhouse v Hornsby Shire Council;⁶⁰ Queanbeyan Leagues Club Ltd v Poldune Pty Ltd;⁶¹ Hawkins v Permarig Pty Ltd.⁶²

[34]The other types of loss particularised in paragraphs A to H of paragraph 35 of the statement of claim have either been addressed by the defendant or have not been the subject of evidence by the plaintiffs. The plaintiffs’ claim for aggravated and exemplary damages has no application to a claim for damages for breach of contract: Gray v Motor Accident Commission.⁶³ I am satisfied that the defendant has shown that, even if the plaintiffs re-pleaded their claim for damages for breach of contract, the plaintiffs will not prove any damages (other than nominal damages).”

73. Her Honour’s analysis was, with respect, correct.

Conclusion

74. This unfortunate saga resulted from inefficiencies and errors in the respondent’s accounting practices, exacerbated by miscommunication or lack of communication between the parties.⁶⁴ While the appellants’ frustration and sense of outrage at the respondent’s attempts to enforce the loan and the security were perhaps understandable, they have not demonstrated any relevant error in the primary judge’s analysis of their claims or her conclusions. They had no real prospect of succeeding in any of their claims and there was no need for a trial. Her Honour did not err in giving summary judgment for the respondent.

75. I would dismiss the appeal with costs.

Footnotes

1. Bradshaw & Anor v Secure Funding Pty Ltd (formerly Liberty Funding Pty Ltd) [2011] QSC 184. ↩

2. Transcript, 1-8. ↩

3. See Margaret Wilson AJA's reasons at [62]-[63]. ↩

4. The appellants were given leave to appeal against the costs order made by the primary judge, but did not exercise that leave. AR 277, Appeal transcript page 1–26. ↩

5. AR 231 – 232. ↩

6. See [2011] QSC 184 at [3]. ↩

7. AR 233 – 237. ↩

8. See [2011] QSC 184 at [4]. ↩

9. Appeal transcript pages 1–2 and 1–30. ↩

10. AR 121. ↩

11. AR 135 – 137. ↩

12. AR 72 – 73. ↩

13. AR 211. ↩

14. AR 138 – 145. ↩