Charan v Commonwealth Bank of Australia

Supreme Court of NSW|2019-09-13|Before: Pembroke J, McDougall J, Darke J, White J

Introduction

These proceedings represent the fourth occasion in the last five years in which the plaintiffs, or one of them, have brought the same substantive claim in this Court. The core underlying issue raised in each proceeding relates to the alleged 'wrongful possession and sale' of certain properties at Casula and Holsworthy by the first defendant, a mortgagee of the properties. The second and third defendants are trustees or former trustees in bankruptcy of the plaintiffs, or their son.

Procedural History

After obtaining judgment for possession on 14 February 2013, the first defendant sold the properties by the exercise of its power of sale on 16 August and 17 December 2013 respectively. There then followed one failed proceeding in this court after another. Each was predicated on the same substantive facts and circumstances. I adopt the summaries of the relevant contextual and background facts set out in the judgments of McDougall J given on 27 March 2015 and Darke J given on 12 May 2017.
Set out below is a convenient chronological listing of each proceeding in this court and its outcome: 1. On 3 July 2014 Mr Charan, commenced proceedings 2014/196642 (first proceeding). 2. On 8 October 2014 White J gave judgment and detailed reasons dismissing the first proceeding. (See Charan v Commonwealth Bank of Australia & Ors [2014] NSWSC 1473 (first judgment). 3. On 9 December 2014 Mr Charan and the second plaintiff, Usha Wati Charan (Mrs Charan) commenced further proceedings in this court 2014/361879 (second proceeding). 4. On 27 March 2015 McDougall J gave judgment and detailed reasons dismissing the second proceeding (see Charan v Commonwealth Bank of Australia & Ors [2015] NSWSC 411 (second judgment)). 5. On 27 July 2015 Mr Charan and Mrs Charan filed a summons in the Court of Appeal seeking leave to appeal the second judgment, 2015/124191 (first appeal). 6. On 19 November 2015 the Court of Appeal gave judgment dismissing the first appeal (see Charan v Commonwealth Bank of Australia & Ors [2015] NSWSCA 364 (first appeal judgment)). 7. On 17 December 2015 Mr and Mrs Charan filed an application in the High Court of Australia seeking special leave to appeal the first appeal judgment. 8. The special leave application was deemed abandoned by the High Court of Australia on or about 15 January 2016. 9. On 25 October 2016 Mr Charan commenced further proceedings in this court 2016/318834 (third proceeding). 10. On 12 May 2017 Darke J gave judgment and detailed reasons dismissing the third proceeding (see Charan v Commonwealth Bank of Australia & Ors [2017] NSWSC 616 (third judgment)). 11. On 9 June 2017 Mr Charan filed a summons in the Court of Appeal of the Supreme Court of NSW seeking leave to appeal the third judgment 2017/173599 (second appeal). 12. On 16 August 2017 the Court of Appeal gave judgment dismissing the second appeal (see Charan v Commonwealth Bank of Australia & Ors [2017] NSWCA 209 (second appeal judgment)). 13. On 9 April 2019 Mr Charan and Mrs Charan commenced this proceeding.

Facts

The legal and commercial objective of each of the four proceedings has been the same. In the first claim (2014/196642), Mr Charan sought 'reversion' of the Holsworthy land or damages representing its value. In the second claim (2014/361879), Mr and Mrs Charan sought 'compensation for wrongful possession and sale' of the Holsworthy and Casula lands. In the third claim (2016/318834), Mr Charan sought orders to 'set aside the mortgagee power of sale to reconvey the two lands to the plaintiff' or 'compensation for the loss of the lands at the current market value'.
In relation to the first claim, White J (as he then was), held that Mr Charan's pleaded claim revealed no arguable cause of action and summarily dismissed the proceeding. In relation to the second claim, McDougall J held that 'each and every one of the claims pleaded is utterly unsustainable'. In relation to the third claim, Darke J summarily dismissed the proceeding. He held that 'the plaintiff's conduct in bringing these proceedings, which is, in effect, the third time these claims have been advanced in this Court, amounts to an abuse of process'.
All these judgments arise out of the same substratum of facts. Each judgment represents considerable judicial diligence and thoroughness. If it were not for one supposed point of distinction which I address below, I would have no hesitation in promptly dismissing this proceeding on the same grounds on which McDougall J and Darke J relied.
It is appropriate to repeat the following reasons of policy that I explained in Riva NSW Pty Ltd v Official Trustee in Bankruptcy [2019] NSWSC 49 at [4], [9] and [10]: [4] The resources of the courts are not available to indulge endlessly the misconceived whims and unshakeable convictions of disappointed litigants. The public interest in the finality of litigation requires that an end be brought to causes that have already been given a fair opportunity. In this case, I have concluded that it is time to close the book. The most recent iteration of the claim is not a case of fresh evidence, but an attempt to re-agitate earlier claims. At its most generous, it constitutes a marginally new legal perspective on old facts. Nonetheless, it is appropriate to repeat the wisdom of Lord Wilberforce in The Ampthill Peerage [1977] AC 547 at 569 … [9] Courts are wary of attempts to re-litigate issues. And they are mindful of the oppression and vexation caused to defendants by plaintiffs who are unreasonably fixated with the righteousness of their claim or who may be motivated by extraneous considerations. In Aon Risk Services Aust Ltd v ANU [2009] 239 CLR 175 at 193, French CJ said: Abuse of process principles may be invoked to prevent attempts to litigate that which should have been litigated in earlier proceedings as well as attempts to re-litigate that which has already been determined. [10] Similar sentiments were expressed in Walton v Gardiner [1993] 177 CLR 378 at 393 by Mason CJ, Deane and Dawson JJ: Proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings.

Personal Wrong Issue

The point of distinction on which Mr and Mrs Charan rely in this proceeding is that their pleaded claims for relief include 'compensation for personal wrong done resulting in the loss of properties'. This is the basis on which they seek to justify this further attempt to litigate the loss of their properties. I allowed Mrs Charan to be the advocate for herself and her husband. She said the personal wrong issue was the 'core issue which the defendants are relying on'. It is a marginally new perspective on old facts. But it is legally and factually unsustainable.
Adding the language of 'personal wrong' to the claims for relief, is simply a late attempt by the plaintiffs to bring their existing claim within the exceptions set out in Sections 60(4) and 116(2)(g) of the Bankruptcy Act 1966 (Cth) (the Act). This is necessary (if it is available) because such causes of action as the plaintiffs may have in the circumstances, are causes of action that would have vested in the respective trustees in bankruptcy.
Mr Charan was made bankrupt on 20 February 2018 and remains an undischarged bankrupt. Mrs Charan was made bankrupt on 6 June 2012. She was discharged on 10 July 2015. Section 58(1) of the Act provides that the 'property of the bankrupt' vests automatically in the official trustee upon the commencement of the bankruptcy. Property includes causes of action, with the following relevant exceptions: 1. Section 60(4)(a) of the Act provides that a bankrupt may continue in his own name an action commenced before he became a bankrupt in respect of 'any personal injury or wrong done to the bankrupt, his spouse or member of his family'. 2. Section 116(2)(g)(i) of the Act provides that 'any right of the bankrupt to recover damages or compensation for personal injury or wrong done to the bankrupt, the spouse of the bankrupt or a member of the family of the bankrupt' does not constitute property divisible among the creditors of the bankrupt.
Those statutory provisions explain this attempt, in the fourth proceeding commenced by the plaintiffs in this court arising out of the same facts, to formulate and characterise their claim as one for a 'personal wrong'.
It should be noted that, even as pleaded, the plaintiffs' claim is not for a personal wrong in isolation. It is expressed to be a personal wrong 'resulting in loss of properties'. The first paragraph of the plaintiffs' submissions clearly states that this proceeding is the fourth statement of claim filed in this court seeking equitable compensation or damages for wrongful possession and sale of the [properties]. It is clear therefore that the fulcrum on which the supposed 'personal wrong' hinges is the same substantive complaint that formed the basis of the previous three proceedings in this court, namely the 'wrongful possession and sale' of the properties.
Well established authority is against the plaintiffs. The cases establish the following principles: 1. in order to maintain a claim for a personal wrong in these circumstances, the plaintiffs must establish that the damages are to be estimated by immediate reference to pain felt by them in respect of their mind, body or character and 'without immediate reference to [their] rights of property': Cox v Journeaux (No 2) (1935) 52 CLR 713 at 714; 2. where the primary and substantial right of action is direct pecuniary loss to the property or estate of the bankrupt, the right to sue passes to the trustee notwithstanding that it may have caused personal inconvenience to the bankrupt: Faulkner v Bluett (1981) 52 FLR 115 at 119 (Lockhart J); 3. a bankrupt's pain and suffering allegedly arising from having lost his property through a defendant's wrongful action, is a right that would also have vested in the trustee: Samootin v Shea [2010] NSWCA 371 at [81]; 4. claims of mental distress and injury to a person's mental health are, in circumstances such as these, claims that are consequential upon losses to that person's property and financial interests and form part of the bankrupt's property. 5. See also generally Sheehan v Brett-Young (No 3) [2016] VSC 39 and Moss v Eaglestone [2011] NSWCA 404.
In this case, the entirety of the plaintiffs' claims arises from actions that occurred in connection with the bank's enforcement process in respect of its mortgages over the properties. No genuinely excluded cause of action is discernible. None is pleaded.
Insofar as any supposed 'personal wrong' may be identified from the plaintiffs' pleading, it is based on the following propositions, none of which are sufficient: 1. the sale of the properties; 2. Mr Charan having been wrongfully and illegally ejected from his residence; 3. the bank having wilfully and recklessly sacrificed Mr Charan's interest in the properties and his personal right of redemption; and 4. deprivation of Mr Charan's properties and expectant economic losses of investment and earning.
Finally, toward the conclusion of her oral submissions, Mrs Charan raised a further point. She contended that the two properties 'did not vest in the trustees. They were exempt properties'. I have carefully reviewed the prior judgments, especially that of White J (as he then was). In addition to the judgments of White J, McDougall J and Darke J in this court, there have been a number of judgments against the plaintiffs in the Federal Court and the Federal Circuit Court, as the Federal Magistrates Court is now named.
I am satisfied that this additional issue has already been addressed and determined. Facts have been found and conclusions have been reached on this issue that do not justify attempting to re-open it. Each of the preceding judgments in this court, not to mention those in the Federal Court or Federal Circuit Court, has either determined that the trustees were entitled to become the registered proprietors of the respective properties or proceeded on that basis. It would be an abuse of process and not in the interests of justice to allow the plaintiffs to go over this ground.

Costs

The defendants provided evidence of the costs incurred by them in this proceeding. Having regard to that evidence, I assess a reasonable lump sum for the costs of the first defendant as $18,000 and a reasonable lump sum for the costs of the second and third defendants as $17,000.
In the circumstances, and especially given the indemnity costs orders made by Darke J in the third proceeding, it is appropriate to make a lump sum costs order and to restrain the plaintiffs from commencing further proceedings arising from the same subject matter, without the leave of a judge of this court and unless and until the plaintiffs have paid the defendants' costs of this proceeding.
I gratefully adopt the statement of principles and reasons explained by Black J in K Sheridan v Colin Biggers & Paisley [2019] NSWSC 621 at [26]-[31]. They reinforce the appropriateness of the orders I propose to make in this case.

Orders

I order that: 1. the statement of claim be dismissed pursuant to UCPR Rule 13.4 against each of the defendants; 2. the plaintiffs pay the first defendant's costs of this proceeding in the lump of $18,000.00; 3. the plaintiffs pay the second and third defendants' costs of this proceeding in the lump sum of $17,000.00; 4. the plaintiffs be restrained from commencing further proceedings arising out of, or in connection with, the subject matter of this proceeding: (i) without the leave of a judge of this court; and (ii) unless and until the defendants' costs of this proceeding have been paid.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 September 2019

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