BETWEEN : EDWARD JAMES BRIDE and WENDY MARGARET BRIDE as Trustees for the PINWERNYING FAMILY TRUST

Practice - Application to strike plaintiffs' statement of claim - Turns on own facts

Bride & Anor v Australian Bank Ltd & Ors [2000] WASC 116

Hoysted & Ors v Federal Commissioner of Taxation [1921] HCA 56; (1921) 29 CLR 537

Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1981] 3 All ER 727

Mako Investment Pty Ltd & Ors v Quindo Pty Ltd & Ors, unreported; SCt of WA; Library No 6838; 28 July 1987

Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 579

State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499; (1999) ATPR 41-691

Stergiou & Ors v CitiBank Savings Ltd (1998) 148 FLR 244

Bride & Anor v Peat Marwick Mitchell [1989] WAR 383

Rondel v Worsley [1967] 1 QB 443

Transcript of High Court of Australia, Gibson v Commonwealth of Australia & Anor [2000] 82; 25 October 2001

Velcrete Pty Ltd & Anor v Melsom & Anor, unreported; SCt of WA; Library No 960275; 22 May 1996

1 REGISTRAR KINGSLEY: The first defendant in an application dated 2 October 2002 and the second and third defendants in an application dated 11 September 2000 have brought applications pursuant to O 20 r 19 seeking orders that the plaintiffs' statement of claim be struck out. Both applications seek to strike out the pleading on the ground that it discloses no reasonable cause of action, it is scandalous, frivolous or vexatious, it will prejudice and embarrass and delay the fair trial of the action or is otherwise an abuse of process of the courts. Only the second and third defendants' application was argued. Counsel for the second and third defendants further argues that if the plaintiffs' statement of claim is struck out, then no leave ought be given to re-plead the statement of claim as it constitutes an abuse of process on the basis of the following legal propositions:

2 The plaintiffs' amended statement of claim dated 8 November 2002 pleads that the plaintiffs as trustees of the Pinwernying Family Trust were the rightful owners of Kojonup Location 255, being Lot 29 on Diagram 62969, Certificate of Title Volume 1682 Folio 357. The plaintiffs define this property as "the Winery". The first defendant is The Shire of Katanning; the second defendant is pleaded as The Commonwealth Bank of Australia. The plaintiffs plead the Commonwealth Bank purchased, merged with and took over the Australian Bank Limited ("the Bank"). The third defendant is pleaded as Peat Marwick Mitchell KPMG who is pleaded to have purchased, merged with or taken over the firm Peat Marwick Mitchell ("Peats").

3 The plaintiffs plead that The Shire of Katanning, from 14 December 1994, had documented evidence that the Bank was the mortgagee in possession of Lot 29 Creek Street. Lot 29 Creek Street has not been defined. The plaintiffs go on to plead that the first defendant knew and were aware of and understood that the Bank, as mortgagee in possession, was responsible for the rates and the upkeep of the property. The plaintiffs claim that the first defendant has been negligent in allowing the second defendant not to pay the shire rates and not to maintain the property.

4 At par 5 of the statement of claim the plaintiffs plead that the Bank were responsible for the actions and the conduct of:

5 The plaintiffs go on to plead that in June 1984 the plaintiffs were indebted to the bank and the indebtedness was secured by registered Mortgage C337514 executed on 26 March 1982 ("the Mortgage").

6 In par 6 of the statement of claim the plaintiffs plead that on 18 June 1984 the Bank unlawfully appointed Stewart to take possession of the Winery land and business. This is the first mention of any business.

7 The plaintiffs go on to plead in par 7 that the appointment of Stewart was unlawful. Four grounds are set, particularising that unlawfulness. One of the particulars of the unlawfulness is that the Bank securities did not cover the Winery land, business, equipment, plant and stock.

8 The plaintiffs plead that on 9 August 1984, in purported exercise of the Bank's rights pursuant to the Mortgage, the Bank appointed Young and Anderson of the third defendant as receivers and managers of the Winery land, business plant, equipment and stocks of wine. The plaintiffs plead that the appointment and conduct of Young and Anderson was unlawful. The plaintiffs give particulars of the unlawfulness. One of the particulars is that the Bank did not have lawful security over the business assets, plant and equipment and all stock of the Winery. The plaintiffs go on to provide particulars of unlawful conduct. One of the particulars state that on 10 August 1984, T A Adams, acting under the instructions of both Young and/or Anderson, served a notice of appointment of Young and Anderson as receivers and managers pursuant to the Mortgage.

9 The plaintiffs plead that the discovery of the unlawful conduct arose in the course of discovery and inspection of the second and third defendants' books, papers and records on 20 October 1994. The writ in this matter was filed in the principal registry of the District Court, Perth on 19 August 2002.

10 With some confusion the plaintiffs go on to plead that when Young and Anderson retired as receivers and managers, and Young and Fear, both of Peats, were appointed as mortgagees in possession, these persons remained in trespass of the Winery property from 27 January 1987 to a date unknown to the plaintiffs. The plaintiffs then go on to plead that Young and Anderson pretended to have lawful authority to dispose of plant, equipment, and stock of the Winery.

11 The essence of the plaintiffs' cause of action against the Bank and Peats is that, as against the Bank, the Bank was a mortgagee in possession. As mortgagee in possession the Bank failed in its duty to pay local government rates and acted negligently. The cause against Peats is also in negligence and the same particulars of negligence as that alleged against the Bank are also alleged against Peats.

12 In State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499; (1999) ATPR 41-691 the Court commented that the object of a statement of claim is to:

(a) Define with clarity and precision the issues, which the plaintiff says, are in dispute between the parties.

(b) Give fair and proper notice of the case, which must be met so that the defendant can prepare its case.

(c) Inform the court as to the precise nature of the matters of issue, which the court may determine.

13 Whilst more than one cause of action may arise from the same set of facts, facts which give rise to separate causes of action should be separately and distinctly pleaded to avoid embarrassment (Mako Investment Pty Ltd & Ors v Quindo Pty Ltd & Ors, unreported; SCt of WA; Library No 6838; 28 July 1987).

14 The second and third defendants have filed a document entitled "Analysis of Faults in the Plaintiffs' Amended Statement of Claim". The analysis recites each paragraph of the statement of claim and what, in the second and third defendants' opinion, is the fault with the particular paragraph. Some of the faults stated by the second and third defendants are not, in my opinion, proper faults. For example, par 3 and par 4 of the plaintiffs' statement of claim are said to have no evidence to support the allegations. This is not a proper issue to raise on a pleading. However there are paragraphs within the statement of claim where no proper basis for the pleading is raised. For example, at par 4(c) and par 4(d) there is no proper basis for a plea of negligence.

15 The plaintiffs' statement of claim is embarrassing and is likely to delay a fair trial. There is a confusion of issues within the pleading and the facts have not been pleaded sufficiently to support the causes of action. For example there is no factual content to the plea that the first defendant and the second and third defendants have been negligent. At par 7 of the statement of claim there is a heading "Particulars of Conduct". However there is no material allegation to support the particulars.

16 Under the heading "And the Plaintiff Further Claims" the statement of claim pleads allegations against Young and Anderson as receivers and managers. However in par 2 under that heading there is a plea referring to Peats as receivers and managers.

17 Noting that the plaintiffs act in person in the normal course some latitude would be given to the plaintiffs to bring in a statement of claim that fairly puts the issues before the Court and informs the defendants of the case they have to meet (Stergiou & Ors v CitiBank Savings Ltd (1998) 148 FLR 244 at 247). The question then is whether the plaintiffs ought to be granted leave to re-plead their case. There is a substantial pre-history to this statement of claim that warrants examination to determine whether leave ought to be given for the plaintiffs to bring in a further minute of proposed amended statement of claim.

18 The plaintiffs, Edward James Bride and Wendy Margaret Bride as trustees of The Pinwernying Family Trust, commenced action against the Australian Bank Limited and Southern Rolled Oats Pty Ltd and Southern Foods (1986) Pty Ltd and Milne Feeds Pty Ltd (CIV 1570 of 1989) and against Peat Marwick Mitchell (CIV 1804 of 1989). These actions were heard before Parker J in 1999 and he delivered his reasons on 12 May 2000 (Bride & Anor v Australian Bank Ltd & Ors [2000] WASC 116).

19 The claims raised in the first Supreme Court proceedings were for damages and other relief in respect of events that befell the business encompassing Oat Milling and Stockfeed, and various parcels of land. It was the Brides' case that as trustees of the Trust, they owned and conducted the businesses and owned some of the land. The Brides alleged they had suffered loss and damages. The Brides plead that in both actions the Australian Bank had security documents over the Winery land. Explicitly in CIV 1570 of 1989 and implicitly in CIV 1804 of 1989 the Brides plead that the Bank took possession of the Winery land. The Brides plead that the possession was unlawful.

20 The defendants in the first Supreme Court proceedings asserted that the business was owned and conducted by the Brides in their personal capacity as partners and that material parcels of land were owned in partnership and not as trustees of the Trust.

21 Relevant to Parker J's decision was a consideration of several parcels of land in and around Katanning. One of those parcels of land was described as the Winery land which was portion of Kojonup 255 being Lot 1 of Diagram 9860 and being the whole of the land in Certificate of Title Volume 1322 Folio 461. At all material times the land was used for the purposes of a winery and was secured by Mortgage C3375142 to the Australian Bank Limited.

22 In an affidavit sworn by John Christopher Vaughan on 14 January 2003, Vaughan deposes that the Winery land described as being the whole of land in Certificate of Title Volume 1322 Folio 461 is the same land as that described in the plaintiffs' amended statement of claim being the whole of the land in Certificate of Title Volume 1682 Folio 357. An analysis of the evidence deposed to by Vaughan clearly indicates that the Winery land described as the whole of the land in Certificate of Title Volume 1322 Folio 461 is the same land as described in the plaintiffs' statement of claim as being the whole of land in Certificate of Title Volume 1682 Folio 357.

23 Parker J then commences a detailed analysis of the business and financial affairs of the Brides both in their capacity as partners and as trustees. Parker J seeks to unravel the various business associations and the ownership of property by those businesses or by the Brides, both as partners and as trustees.

24 By par 124 of Parker J's decision, and being very conscious of inconsistencies and contradiction and giving weight to his impression of the reliability of the recollection and credit of witnesses whose evidence touched on the issues, Parker J was not persuaded that the Oat Milling and Stockfeed business was owned or conducted by the Brides in their capacity as trustees of a Trust and found that the Brides owned and conducted the business in partnership. Parker J then proceeded to consider the claims in respect of land owned by the Brides in their capacity as trustees of the Trust, namely the Oat Mill land, the Winery land and Vineyard land.

25 At par 128 Parker J then narrates the events of and following 8 August 1984. During the course of 1983 the Bank had taken bills of sales for moneys advanced to the Brides trading in partnership as oat millers and stockfeed producers. By cl 35 of the bill of sale there was an express link with Mortgage C337514 with default under the bill of sale being deemed to be a default under that mortgage.

26 In March 1984 the Bank took a further bill of sale to secure moneys owning to the Brides as trustees of the Trust.

27 On 9 August 1984 Young and Anderson of Peats were appointed as receivers and managers pursuant to the securities held by the Bank, save for the two real estate mortgages (par 140). Parker J finds that in respect of the two real estate mortgages a different course was followed, out of regard, no doubt, to specific provisions of the mortgages and the provisions of the Transfer of Land Act 1983. Written notices demanding payment were sent on 9 August 1984 and on 22 August 1984 Young and Anderson were appointed receivers and managers pursuant to the two real estate mortgages. One of those real estate mortgages was Mortgage C337514 which secured the Winery land.

28 Parker J finds there is confusion surrounding the notices of appointment of the receivers and managers. At par 141 Parker J comments that it is possible that Peat and Marwick acted to enter into possession of several assets on 9 August 1984 including the land other than the Oat Mill land and the Stockfeed land. But the evidence of this was lacking in detail and Parker J was unable to come to a finding that possession was taken on that day of any land other than the Oat Mill land and the Stockfeed land.

29 Thus on 8 August 1984 the Bank had served notices of demand on the Brides and on 9 August 1984 had appointed receivers and managers under the bills of sale. On 22 August, the Bank appointed receivers and managers pursuant to the mortgages - though no notice of this appointment was ever given to the Brides. The receivers and manager so appointed are agents of the mortgagors, not of the Bank. Whilst the Brides' argued that there were sinister motives in the Bank's failure to give notice, Parker J concluded there was merely error on the part of the Bank's officers.

30 Parker J finds, at par 157, that receivers and managers were appointed under the mortgages on 22 August 1984. That finding, by its very nature, must include a finding that the Bank has not taken possession of the land the subject of the mortgages, including the Winery land.

31 Subsequent to the decision of Parker J being handed down the Brides lodged further proceeding in the Supreme Court. These proceedings were by the Brides as trustees of the Pinwernying Family Trust and were against the Australian Bank and Commonwealth Bank, Peat Marwick Mitchell KPMG, and Young and Fears.

32 The matter was heard before Acting Master Chapman and at par 7 of his reasons it is clear that the land the subject of the proceedings is the Winery land.

33 Acting Master Chapman undertakes an analysis of the statement of claim and at par 21 considers that, given the inconsistencies he has referred to, the case sought to be pleaded by the plaintiffs seems to exceed that in the writ of summons. Acting Master Chapman considers that the amended statement of claim should be struck out on that basis alone. Acting Master Chapman then goes on to consider whether there should be leave to further amend the statement of claim and gives consideration to the proceedings before Parker J.

34 In the statement of claim before him Acting Master Chapman was considering a plea at par 5 that the Brides in their personal capacity and as trustees of the Trust were registered proprietors of parcels of land, one of which was the Winery land. The plaintiffs in the second Supreme Court proceedings plead they were in lawful possession of those lands and the lands were encumbered by mortgages. The Brides do not plead but it is common ground that one of the mortgages is Mortgage C337514.

35 At par 19 of the statement of claim the plaintiffs plead that Anderson and Young were appointed receivers and managers of the business on 9 August 1984 and at par 21 on that date Anderson and Young falsely and fraudulently and in collusion with the Bank acted as receivers and mangers and took possession of the lands pursuant to Mortgage C337514.

36 At par 22 the plaintiffs then go onto plead that on 22 August 1984 pursuant to the powers contained in Mortgages C337514 and C646218 the Bank appointed Anderson and Young as receivers and managers of the property secured as mortgages defined above.

37 Acting Master Chapman referred to the "Outline of Faults" in the plaintiffs' amended statement of claim and was in general agreement with the content (par 3 of Acting Master Chapman's judgment). On the basis of the faults identified Acting Master Chapman considered it appropriate to strike the entire statement of claim (par 4 of Acting Master Chapman's judgment) without giving leave to re-plead the statement of claim.

38 It is clear from a careful reading of the statement of claim in the present proceedings and the first and second Supreme Court proceedings that there is a considerable overlap of issues. Particularly the plea of possession pursuant to Mortgage C337514 is a common thread through this action and the Supreme Court proceedings. The second and third defendants have raised a number of arguments as to why leave ought not be granted to allow the plaintiffs to further amend the statement of claim.

39 The Court has inherent power to prevent an abuse of its procedure. The circumstances in which an abuse of process can arise are varied and there are no fixed categories of the kinds of circumstance in which a Court has a duty to exercise its power (Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1981] 3 All ER 727). It is an abuse of process to amount a collateral attack upon a final decision against a plaintiff, which has been made by another Court of competent jurisdiction in proceedings in which the plaintiffs have had a full opportunity of contesting the decision (Hunter's case).

40 In my opinion in seeking to agitate the issues in relation to the lawfulness of possession pursuant to Mortgage C337514 is an abuse of process. The issues have been squarely put forward before each judicial officer in the first and second Supreme Court proceedings. Therefore, to seek to re-litigate the issue in this Court, in my opinion, is a collateral attack upon the decisions of Parker J and Acting Master Chapman. I am informed from the Bar table that there has been an appeal lodged in respect of the decisions of Parker J and Acting Master Chapman. Whether or not an appeal has been launched, in my opinion the pleading in this Court clearly amounts to a collateral attack and amount to an abuse of process.

41 In the course of submissions the first and second defendants' counsel submitted that the plaintiffs' case is fatally flawed because of the issues of res judicata, anshun estoppel and issue estoppel.

Res judicata, anshun estoppel, issue estoppel

42 Res judicata is also known as cause of action estoppel. The cause of action is extinguished by the judgment, and no defendant may be sued on that cause which has been adjudged. Anshun estoppel is where a party in subsequent proceedings cannot raise a cause of action, which ought to have probably been raised in the initial proceedings (Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 579). In determining whether the principle applies the Court will consider whether it was unreasonable for the party now seeking to raise the issue to have not raised it in the first action, and whether there will be increased costs or conflicting judgments resulting from subsequent litigation. Finally issue estoppel is where a party cannot raise in proceedings an issue that was finally determined in prior proceedings (Hoysted & Ors v Federal Commissioner of Taxation [1921] HCA 56; (1921) 29 CLR 537). A judicial determination of a question of law or fact disposes of the issue. Issue estoppel extends the bounds of res judicata to prevent a defendant being vexed twice over substantially the same dispute by the plaintiff re-casting their statement of claim in a different legal language.

43 As for the plea that the second and third defendants appointed agents as mortgagees in possession, I am of the opinion that these pleas are the subject of res judicata, issue estoppel and anshun estoppel. The issues were clearly before Parker J and Acting Master Chapman and a ruling has been made by Parker J on this issue.

44 I am of the opinion that the pleas raised by the plaintiffs in this Court are pleas which would constitute an abuse of process no matter how they are pleaded. That being the case I am of the opinion that it would be unjust for the plaintiffs to be allowed to re-plead their case.

45 I would therefore enter judgment for the second and third defendants on their application.