Supreme Court of WA|2000-12-18|Before: Parker J

Edward James Bride and Wendy Margaret Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd & Ors [2000] WASC 310 (18 December 2000)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : EDWARD JAMES BRIDE AND WENDY MARGARET BRIDE as Trustees of the PINWERNYING FAMILY TRUST -v- THE AUSTRALIAN BANK LTD & ORS [2000] WASC 310

HEARD : 31 AUGUST, 1 SEPTEMBER & 17 OCTOBER 2000

BETWEEN : EDWARD JAMES BRIDE AND WENDY MARGARET BRIDE as Trustees of the PINWERNYING FAMILY TRUST

Practice and procedure - Striking out statement of claim - Leave to further amend - Limitation period - Concealed fraud

Amended statement of claim struck out with no leave to replead

Bride v Anglo-Australian Foods & Ors [2000] WASCA 124

Bride v Anglo-Australian Foods & Ors, unreported; SCt of WA; Library No 960621; 29 October 1996

Milne Feeds Pty Ltd v Bride & Anor (1993) 10 WAR 542

Milne Feeds Pty Ltd v Bride & Anor, unreported; FCt SCt of WA; Library No 950622; 21 November 1995

Milne Feeds Pty Ltd v Bride & Anor, unreported; FCt SCt of WA; Library No 9720060; 21 February 1997

Milne Feeds Pty Ltd v Bride & Anor, unreported; SCt of WA; Library No 960247; 7 May 1996

Mosman Park Town Council v Walker (1991) 73 LGRA 30

Seymour v Seymour (1996) 40 NSWLR 358

Southern Rolled Oats v Bride & Anor, unreported; SCt of WA; Library No 7552; 9 March 1989

1 The first, second and second-named third defendant ("the defendants") by way of chamber summons filed on 18 February 2000 seek to strike out the plaintiffs' amended statement of claim and that judgment be entered with costs.

Defendants' Complaints with the Amended Statement of Claim.

2 The defendants have filed and served a document entitled Outline of Faults in Plaintiffs' Amended Statement of Claim dated 27 May 2000 ("the outline"). As an aide-memoire this is a most helpful document.

3 I have carefully examined the outline and the sources to which it refers. I am in general agreement with the faults identified in the outline and the reasons it is said the amended statement of claim is defective. Rather than repeating what it set out in the outline it is, for convenience, included with these reasons as annexure "A".

4 On the basis of the faults identified in the outline I would strike out the respective paragraphs for the reasons therein stated. Having reached that conclusion, it is appropriate to strike out the amended statement of claim in its entirety.

5 During the course of argument additional issues were raised with various paragraphs of the amended statement of claim and I will deal with each in turn.

6 The way the pleading is presently couched, it pleads that the land was registered in the names of the plaintiffs in their personal capacity and as trustees of the Pinwernying Family Trust ("the Trust"). Apart from being inconsistent on its face, the plea is contrary to the decision of Parker J in Bride & Anor v Australian Bank Ltd & Ors [2000] WASC 116, Parker J, delivered 12 May 2000, ("the bank proceedings").

7 Further, it is unclear from the pleading as a whole which land is the subject of these proceedings. Mr Bride indicated that it was limited to the winery land but that is far from clear.

8 It is not clear from the pleading what the term "Personal Guarantees" means and in what capacity the guarantees were given.

9 The defendants argue that this plea goes nowhere. It is said there is agreement that the two companies did not own anything. It is further said it is not clear what land and what business is being referred to. With this I would agree.

10 The defendants argue that the validity of the bill of sale granted on 23 March 1984 is specifically dealt with in the Deed of Compromise and Release dated 19 August 1986 ("the deed of compromise") and thus it is no longer a live issue. I agree.

11 During the course of argument Mr Bride announced the plaintiffs no longer wished to rely upon these paragraphs.

12 The defendants argue that the mortgagee does not remain in possession notwithstanding the fact that in a letter written by Mr Fear on 3 November 1988 he states:

"The Australian Bank Limited has now taken possession of the property as mortgagee in possession and is progressing to the appointment of selling agents."

13 The defendants contended that the assertion of that right has gone stale as nothing has been done since to establish that assertion. In this case, the Brides have remained in physical possession of the property since November 1988, they have received rate notices for the property and the bank has not pursued the appointment of selling agents in relation to the property in question.

14 The defendants argue that the mere assertion by an agent of the bank 12 years ago in the circumstances of this case would not draw one to the conclusion that the bank remains a mortgagee in possession, if it ever fell within that category.

15 With this, I would agree, particularly when one takes into account the stringent approach usually taken as is illustrated in an article titled "The Conveyancer" 1994 68 ALJR 812, the author, Peter Butt, at 814 had this to say:

"Indeed, so stringent is the accountability, that courts are said to be very slow to decide that mortgagees have taken possession: Gaskell v Gosling [1896] 1 QB 669 at 691 per Rigby LJ."

16 The defendants argue that the plea is a claim in negligence but there are no common law duties of negligence which relate to a mortgagee in possession, apart perhaps from a duty to act in good faith. I agree.

17 In addition, the amended statement of claim is, on its face, defective. The parties described in the heading are not consistent with the writ which issued on 27 January 2000. The writ describes the plaintiffs as Edward James Bride and Wendy Margaret Bride as trustees of the Trust, whereas the amended statement of claim describes the plaintiffs as Edward James Bride and Wendy Margaret Bride and as Trustees of the Trust.

18 I take it by the inclusion of the word "and" in the description the plaintiffs seek to include Edward James Bride and Wendy Margaret Bride as plaintiffs in their own right in addition to their capacity as trustees of the Trust. If this is what the plaintiffs seek to achieve, leave should have been sought to amend the writ of summons in the proper way.

19 Further, the description of the first and second defendants is inconsistent. The first defendant is described in the amended statement of claim as The Australian Bank Ltd The Commonwealth Bank of Australia, whereas in the writ of summons the first defendant is described as The Australian Bank Ltd. The first defendants described in the amended statement of claim appear to be two separate entities, although par 2 of the amended statement of claim describes the first defendant in the singular. The Australian Bank Ltd is referred to in par 7 of the amended statement of claim and is described as "the Bank". It would appear that the Australian Bank Ltd is the relevant party.

20 The writ describes the second defendant as Peat Marwick Mitchell whereas the amended statement of claim describes the second defendant as Peat Marwick Mitchell, KPMG Hungerfords.

21 Given the inconsistencies referred to, the case sought to be pleaded in the amended statement of claim seems to exceed that which is contained in the writ of summons and thus the amended statement of claim should be struck out on that basis alone.

22 For the reasons given I consider the amended statement of claim is defective and should be struck out.

Leave to Further Amend the Statement of Claim

23 Having reached the conclusion that the amended statement of claim should be struck out I now turn to consider whether or not the plaintiffs should be granted leave to further amend the statement of claim or whether the defendants should be granted the judgment they seek.

24 A number of the complaints which the defendants have with the amended statement of claim could be said to be technical and easily remedied if the plaintiffs so chose. The plaintiffs have been put on notice of the nature of the complaints since 11 July 2000, but no document addressing the complaints has been forthcoming.

25 No formal application has been made to amend the writ or the amended statement of claim to correct the defects although Mr Bride, during the course of argument, indicated and that he would wish to do so.

26 Mr Bride was somewhat critical of the defendants for being too technical. I do not agree with that observation. The pleading issues which the defendants have raised are, in my view, valid and have been correctly and justifiably raised.

27 Many of the complaints the defendants raise are of more substance and go to the very heart of the issue as to whether or not the plaintiffs should be granted leave to further amend the statement of claim. I now turn to deal with the issues raised by the defendants.

28 At par 11 of the bank proceedings Parker J conveniently summarises the events from which this dispute arose, as follows:

"Mr and Mrs Bride, in which capacity is in dispute, first approached the Bank in late 1981 to borrow some $1.8m to finance the business. The Bank agreed to provide $1.7m early in 1982. The Bank took securities which, by August 1984, included two real estate mortgages over several parcels of land and two Bills of Sale by way of Security whereby, in essence, the goodwill and other assets of the business were charged in favour of the Bank. The extent of the Bank's lending had increased progressively so much so that by August 1984 with interest and charges it had come to exceed $3.5m. On 9 August 1984, the Bank acted to appoint two partners of Peat Marwick Mitchell as receivers and managers pursuant to a number of the securities. On 22 August 1984 the Bank appointed the two partners as receivers and managers pursuant to the two real estate mortgages. Later the business and a number of the mortgaged parcels of land were sold and the proceeds used in part satisfaction of the Bank's lending."

29 Arising out of those events the plaintiffs have commenced some 60 actions in this Court and approximately six in the Federal Court. Seven unsuccessful applications for special leave to the High Court have also been made.

30 The following is a summary of the actions which have some relevance to this action:

(1) In 1987 Edward James Bride and Wendy Margaret Bride ("the Brides") commenced action in the Federal Court raising a number of issues, some of which are identical to the issues sought to be pursued in this action. Those proceedings were struck out on the basis that the Brides had no standing to commence the proceedings. The basis upon which the Brides were held not to have standing to bring the action was that on 10 August 1984 they appointed Mr B Putnin as their trustee under Pt X of the Bankruptcy Act 1966 and it was held that any right of action vested in their trustee, see Bride v Australia Bank Ltd & Anor, unreported; FCA; No WAG 62 of 1987; 26 July 1988.

(2) The Brides commenced proceedings in this Court and again the claim was struck out on the basis that the cause of action vested in the trustee in Bankruptcy (see Bride & Anor v Peat Marwick Mitchell [1989] WAR 383). The Brides then commenced an action in this Court in their capacities as trustee of the Trust. It was alleged by the Brides that the business was owned by the Trust, however the court held that the business was owned and operated by the Brides personally and not as trustees. This view was supported by the Full Court of this Court, see Bride v KMG Hungerfords (1991) 109 FLR 256 and Bride v KMG Hungerfords, unreported; FCt SCt of WA; Library No 940151; 8 March 1994.

(3) The Brides brought further proceedings in this Court in their capacity as trustees of the Trust and that action was dismissed on the basis that the business was owned by the partnership rather than the Trust. That decision was supported by the Full Court of the Supreme Court and special leave to the High Court was dismissed. See Bride v Hammond Fitzgerald & King, unreported; SCt of WA; Library No 930303; 6 May 1993 per Scott J and Bride v Hammond Fitzgerald & King, unreported; FCt SCt of WA; Library No 960965; 26 March 1996.

(4) The Brides brought two other actions in this Court as trustees of the Trust. All claims against the bank were dismissed with the plaintiff recovering $500 damages for trespass against the receivers. See Bride & Anor v Australia Bank Ltd & Ors (supra). An appeal to the Full Court against this decision has been lodged.

31 In each of the decisions referred to above the question of the standing of the Brides, either personally or as trustees of the Trust, was raised and on each occasion the court held that they did not have the required standing. It is true that various assets were referred to in the respective decisions.

32 In the bank proceedings at par 16, Parker J sets out in detail various parcels of land and describes them as follows:

"Relevant to the action are several parcels of land in and around Katanning. The descriptions of some of these have varied over the last 20 years but they can be described as :-

• The 'Oatmill land': the land now being portion of Kojonup Location 255 and being lot 30 on Diagram 62969, and being the whole of the land in Certificate of Title Volume 1322 Folio 460, but at the time of the securities being portion of Kojonup Location 255 and being Lot 2 the subject of diagram 11099 the whole of the land in Certificate of Title Volume 1322 Folio 460. By agreement in writing this was purchased by Mr and Mrs Bride in their capacities as trustees of the Trust in 1978 from a Mr and Mrs Nesci. However, Mr and Mrs Bride became the registered proprietors as joint tenants It was one of the parcels of land secured by Mortgage C337514 dated 26 March 1982 granted by Mr and Mrs Bride to the Bank. It was on this land that the oatmill division of the business was conducted.

• The 'Stockfeed land': the land being portion of Kojonup Location 337 and being Lot 8 on Plan 14220 and being the whole of the land formerly in Certificate of Title Volume 1654 Folio 429 , which Mr and Mrs Bride purchased under contract of sale from Mr and Mrs James in 1982. There is dispute as to the capacity in which this land was purchased by Mr and Mrs Bride, but it was registered in their names in 1983. This property was the subject of Mortgage C646218 dated 27 June 1983 granted by Mr and Mrs Bride in favour of the Bank. It was on this land that the principal activities of the stockfeed division of the business came to be established.

• The 'Winery land': the land being portion of Kojonup 255 and being Lot 1 on Diagram 9860, being the whole of the land in Certificate of Title 1322 Folio 461. It was purchased pursuant to an agreement in writing by Mr and Mrs Bride in their capacities as trustees of the Trust from Mr and Mrs Nesci in 1978 but the transfer was simply to Mr and Mrs Bride. This land adjoins the Oatmill land. At all material times it was used essentially for the purposes of a winery. This land was one of the parcels secured by Mortgage C337514 to the Bank.

• The 'Vineyard land': comprising Pinwernying Lots 21, 22, 23, 37, 54 & 55 and Pinwernying Lot 20 and being the whole of the land in Certificate of Title Volume 538 Folio 6A, which was purchased from Mr and Mrs Nesci by Mr and Mrs Bride in their capacities as trustees of the Trust pursuant to the same written agreement. Mr and Mrs Bride, as joint tenants, became the registered proprietors on 20 July 1978. This land was one of the parcels secured by Mortgage C337514 to the Bank.

• The 'House land': being a portion of each of Katanning Agricultural Area Lots 51 and 70 and being Lot 3 on Diagram 41856, and being the whole of the land comprised in Certificate of Title Volume 529 Folio 74A, which was at all material times registered in the name of Mr Bride. This was and is still the residence of Mr and Mrs Bride. No claim is raised in these actions in respect of this land. This land was one of the parcels secured by Mortgage C337514 to the Bank.

• The '104 acres': comprising portion of Katanning Agricultural Area Lot 70 and being the whole of the land in Certificate of Title Volume 1333 Folio 281. At all material times Mrs Bride was the registered proprietor. It was used for agricultural purposes. No claim is made in relation to this land. This land was one of the parcels secured by Mortgage C337514 to the Bank.

• There was also the 'Bakery land' which I will not describe in detail as it was sold before August 1984, although it does appear in earlier securities."

33 Throughout these reasons I will adopt the description ascribed to the land by Parker J. At par 5 of the amended statement of claim the plaintiffs have described the land in a similar, but not identical way. It will be seen that his Honour found the oatmill, winery and vineyard lands were purchased by the Brides in their capacity as trustees of the Trust.

34 The amended statement of claim refers to a business operated by the plaintiffs. Although it is not clearly defined, it would appear it is to include the business of oatmillers, stockfeed manufacturers, vignerons and farming. At par 124 of the bank proceedings Parker J held the business there considered encompassed both the oatmilling and stockfeed components which were owned and conducted in partnership by the Brides and not in their capacity as trustees of the Trust. As the writ only includes the plaintiffs in their capacity as trustees of the Trust, the plaintiffs have no standing to bring an action in relation to that part of the business.

35 Even if the plaintiffs were permitted leave to amend the writ and the amended statement of claim to include a plea in their personal capacities, the defendants nonetheless argue that the plaintiffs do not have standing as any right of action would vest in the trustee in bankruptcy. This has consistently been held to be the case. For example, see Bride v Australia Bank Ltd & Anor (supra) par 19 - 25.

36 Mr Bride argues that the position has now changed as the trustee has assigned the causes of action to the Brides pursuant to a deed of assignment dated 12 January 1995 ("the deed of assignment"). The deed is between Bernard Putnin and the Brides. The deed of assignment recites that the Brides became bankrupt on 6 September 1984 and were unconditionally discharged on 14 February 1986.

37 At recital L to the deed of compromise it is stated that on 16 October 1985 Mr Campbell-Smith was appointed the joint and several trustee with Mr Putnin and yet Mr Campbell-Smith is not a party to the deed of assignment. Mr Bride announced from the Bar table that the reason for this was the fact that Mr Campbell-Smith has retired from the partnership of Putnin Campbell-Smith. Even if that is so, what is Mr Putnin's authority to enter into the deed of assignment without the involvement of Mr Campbell-Smith?

38 To enable the plaintiffs to properly address this question, leave was granted to them to file and serve affidavit evidence as to the retirement of Mr Campbell-Smith from the trusteeship supported by independent documentation and written submissions.

39 The plaintiffs filed an affidavit of Mr Bride sworn 24 October 2000 together with written submissions of that date. The defendants filed written submissions on 25 October 2000.

40 Regrettably, the affidavit filed by the plaintiffs falls far short of what was required. On what is before me, I am not persuaded that the necessary order of the court as required by s 180 and s 183 of the Bankruptcy Act 1996 has been made. It would have been an easy matter for the plaintiffs to obtain a copy of such an order and annex it to an affidavit.

41 On the evidence before me I am not persuaded that Mr Putnin could effectively assign the rights he purports to do by way of the deed of assignment without the support of Mr Campbell-Smith.

42 Further, the defendants argue that in light of the deed of compromise there can be no further dispute about the conduct of the receivership, the appointment of the receivers or any of the matters which are covered by the deed of compromise.

43 At cl 3(6) of the deed of compromise it was agreed:

"(6) that the Trustees will, and hereby do, irrevocably withdraw all allegations, of whatever nature, against the Bank and the Receivers and Managers and their respective employees, agents and advisers, concerning:-

(a) the validity of the Security Instruments;

(b) the validity of the appointment by the Bank of the Receivers and Managers;

(c) the conduct of the Bank in connection with the advances made by the Bank, the granting of the Security Instruments and realisation thereof;

(d) the conduct of the Receivers and Managers in the performance of their duties as such Receivers and Managers; and

(e) any other matter or thing in any wise relating thereto."

44 It is said the trustees can only assign that which they have and in view of the provisions of the deed of compromise they had nothing to assign, which is relevant to this action.

45 With this I agree. I am therefore of the view that for at least most, if not all, of the causes of action the plaintiffs seek to pursue in this action, they have no standing to do so.

46 A party cannot raise in proceedings an issue which was already finally determined in prior proceedings. A judicial determination on a question of law or fact disposes of the issue. It is not necessary for the cause of action in the initial proceedings to have merged into judgment for the issue estoppel to arise in relation to any finally determined matter.

47 This applies to judicial determinations of issues regardless of whether they are law or fact and regardless of whether they were integral to the judgment.

48 The defendants argue that most of the issues which the plaintiffs wish to agitate in these proceedings have been determined in previous proceedings, either directly or indirectly and thus it is not now open to raise them again. I agree.

49 A party cannot litigate a cause of action where the same cause of action has already been tried in another proceedings that have merged into judgment. See Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589. Any party to litigation is entitled to prevent any other party from asserting that the decision was incorrect or questioning it in any way in subsequent litigation. The court may look at its own records with affidavit evidence to determine the nature of the previous action (see Craven v Smith (1869) LR 4 Ex 146 at 149.

50 This applies where a cause of action has merged into judgment and re-litigation of the cause of action is no longer available. The defendants submit that this principle applies to many of the issues the plaintiffs now wish to pursue. I am in agreement with the defendants' submission.

51 The defendants contend that a party cannot raise in subsequent proceedings matters which ought properly have been raised in the prior proceedings. In Port of Melbourne Authority v Anshun, Gibbs CJ and Mason and Aitkin JJ said at 603 - 604:

"By 'conflicting' judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction."

"In this instance, the issue now sought to be raised was plainly open to be agitated in the previous litigation. The judgment in that case is inconsistent with the judgment now sought by the plaintiff. To preserve the orderly administration of justice the earlier judgment should be treated as conclusive on the question of indemnity. There is no discretion to allow the raising of that issue against the unwilling defendant; the attempt to do so is properly characterized as an abuse of process. The appeal should be dismissed."

53 In determining whether the principle applies the court will consider

(a) whether it was unreasonable for the party purporting to raise the issue to refrain from raising it in the first action. See Port of Melbourne Authority v Anshun Pty Ltd and Macquarie Bank Ltd v Westgarth Middletons (1995) 8 ANZ Ins Cases 75,911; and

(b) whether conflicting judgments or increased costs would result from the subsequent litigation. See Port of Melbourne Authority v Anshun Pty Ltd.

54 It is argued by the defendants that many of the claims now made by the plaintiffs may be couched in slightly different terms to the way they were pleaded in previous proceedings but are essentially the same. It is said that if this case were allowed to run, a decision contrary to that previously made is possible which may bring the administration of justice into disrepute. With this I would agree.

55 By now many years have elapsed since the circumstances which form the basis of this claim took place. As has been set out previously, the plaintiffs have brought numerous actions in this and other courts and have pursued applications for special leave to the High Court. I think the point has now been reached that it is simply unreasonable to allow the plaintiffs to raise issues which should have been raised previously.

56 No doubt the plaintiffs would argue, particularly in relation to the question of fraud, they have not previously had an opportunity to do so. I do not agree. If the plaintiffs had exercised reasonable diligence they should have been alerted to the facts upon which they now seek to base their plea in fraud as early as 16 March 1990.

57 The plaintiffs have been given more than a reasonable opportunity to properly bring their case over an extended period of time. To the extent that they have failed to raise any issue in previous proceedings, and these would be few, I consider it would be both unreasonable and unjust to allow them to raise them now.

58 This is a further reason why the plaintiffs should not now be permitted to replead their case.

59 Counsel for the defendants argue that there is an inherent power in the court to prevent misuse of its procedures on the basis that not to do so would bring the administration of justice into disrepute. Counsel acknowledged that the courts ought to be open to litigants, but argued that the right to proceed is not unfettered.

60 It was submitted that for the past 16 years the plaintiffs have exhaustively litigated issues relating to the circumstances which the plaintiffs plead as being the basis of this litigation at every possible level of the judicial system of this country.

61 The court has inherent power to prevent misuse of its procedure which would bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are varied and there are no fixed categories of the kinds of circumstances in which the court has a duty to exercise a power to dismiss proceedings for abuse of process. See Hunter v Chief Constable of West Midlands Police [1981] UKHL 13; [1982] AC 529 at 536 and Reichel v Magrath (1889) 14 App Cas 665.

62 A litigant only has a right to have his or her claim litigated provided it is not frivolous, vexatious or an abuse of the process. See Ashmore v British Coal Corporation [1990] 2 QB 338 at 348. It is an abuse of process to mount a collateral attack upon a final decision against a plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the plaintiff has had a full opportunity to contest a decision in the court by which it was made. It is not necessary to show that the plaintiff has any ulterior motive in bringing proceedings.

63 To permit the plaintiffs a further opportunity to raise the issues they now seek to would, in my view, amount to an abuse of the process.

64 The general limitation for claims in tort is six years from the date of the tort (see s 38(1)(c) of the Limitation Act 1935). In general the behaviour complained of by the plaintiffs in relation to fraud took place between August 1984 and February 1987. As the writ in this matter issued on 27 January 2000 it is apparent the six years has long since passed.

65 The plaintiffs argue and attempt to plead that the circumstances of this case are such that a concealed fraud has occurred and thus the limitation period does not start to run until the fraud was first known or with reasonable diligence might have been found known or discovered (see s 27 of the Limitations Act 1935).

66 There is a proviso to that section which limits rights in relation to land or rents against a bona fide purchaser for valuable consideration who has not assisted in the commission of such fraud and did not know or had no reason to believe a fraud had been committed. It is argued by the defendants that all of the land, with the exception of the winery land, has been purchased by a bona fide purchaser for valuable consideration and there is no suggestion that the purchasers knew or assisted in the fraud.

67 During the course of argument Mr Bride continually referred to the notice of appointment of receivers and managers as being false and there was some disagreement between him and counsel for the defendants as to the precise words used in evidence in the bank proceedings. Even if the term "false" was used, that would not necessarily bring the circumstances of this case within the ambit of fraud.

68 For fraud to exist there must be proof of some form of dishonesty or moral turpitude. (See Hamilton v Kaljo (1989) 17 NSWLR 381 at 386 - 387.) There must be a consciousness that what is being done is wrong so that to take advantage of the relevant situation involved wrongdoing (see Honey v McLennan, unreported; SCt of WA; Library No 970574; 30 October 1997). Further, fraud must be specifically pleaded.

69 As I understand the plaintiffs' pleaded case, fraud is alleged on two grounds: Firstly, the first defendant, together with the second and third defendants, purported to do acts as bankers, receivers and managers of Bride Foods Pty Ltd and Swans Stock Foods Pty Ltd, not as receivers and managers of the plaintiffs and/or trust assets. Secondly, the first-named third defendant and one Anderson in collusion with the first defendant acted as receivers and managers and took possession of the plaintiffs' land by way of a false and fraudulent notice of appointment.

70 For the reasons set out in the outline, I consider these pleas are inadequately pleaded. Further, many of the allegations pleaded are contrary to the findings of Parker J in the bank proceedings. I accept that fraud was not specifically pleaded in the bank proceedings. However, all of the relevant witnesses were called and gave evidence. On the basis of that evidence Parker J made specific findings. It is not now open to the plaintiffs to seek to plead material facts which are contrary to those findings.

71 Relevantly, Parker J at par 156, par 157 and par 164 held that the conduct of the receivers was an error or oversight. That finding is contrary to the material facts pleaded in par 21 of the amended statement of claim. Insofar as the defendants were found to be in error, Parker J dealt with that in the bank proceedings by way of trespass.

72 Given the findings of Parker J in the bank proceedings, I do not consider it is open to the plaintiffs to plead fraud on the basis of the facts they rely upon.

73 The defendants further argue that if a plea of fraud could be maintained an extension of time pursuant to s 27 of the Limitations Act could only extend to the date on which the plaintiffs with due diligence could have discovered the fraud. That date, according to the defendants, would be 16 March 1990, which is the date upon which the defences were filed in the bank proceedings as those pleadings should have alerted the plaintiffs exercising reasonable diligence.

74 I agree with this submission and for the reasons given do not consider it is now open to the plaintiffs to plead fraud based on the material facts relied upon by the plaintiffs.

75 It is further argued that any claim in the plaintiff's personal capacity would be statute-barred and the plaintiffs should not be permitted to amend the pleading to include them in their personal capacity for that reason.

76 The circumstances of this case are not dissimilar to that which faced Master Bredmeyer in Bride & Anor v ABL & Ors, unreported; SCt of WA; Library No 950326; 23 June 1995. At 6 the learned Master said:

"I have no application before me by Mr and Mrs Bride to be joined as second plaintiff; but, even if I had, they face a considerable hurdle in this matter because the court cannot add a plaintiff if the cause of action which he seeks to pursue is time barred. O 18 r 6 contrasts in this with O 21 r 5.

Seaman, at 18.6.8, says this:

'Joinder and Limitation Unlike O 21 r 5(1) relating to amendment, this order gives no express power to order that a party be joined after the expiry of a relevant period of limitation. An identified party who has been mistakenly named may be added as a party by amendment under O 21: see [21.5.9]. Otherwise this order is the only source of power to join a party and joinder does not deprive him of an accrued limitation defence: Fernance v Nominal Defendant (1989) 17 NSWLR 710 at 721, 731.' "

77 I agree. Not only do I consider this case relevant from the point of view of the law but this case should have put the plaintiffs on notice as to the correct procedure to be followed in such circumstances. Thus, although the plaintiffs are not represented by a legal practitioner, this concept should not have come as a surprise to them.

78 The plaintiffs argue that the claim is not statute-barred. For the reasons given, I consider the claim is statute-barred and leave to amend should not be granted.

79 The defendants deny that they are mortgagees in possession of the winery land. Nonetheless they argue that even if they were found to be mortgagees in possession there is still a mortgage over the winery land, the first defendant is the mortgagee of that mortgage and it would be premature to grant the plaintiffs the relief they seek.

80 The defendants argue the appropriate time at which the account is to be taken between the mortgagor and the mortgagee is when the mortgagee is in possession and they seek to sell the land or exercise their rights to obtain an order for foreclosure.

81 A mortgagee who goes into possession of a mortgaged property is bound to account to the mortgagor in redemption or foreclosure proceedings. The account directed against the mortgagee in possession is of what has been received or without lawful default, might have been received. The rule applies whether the possession be of land or of business. See Williams v Price [1824] 1 SAM NST 581, Chaplin v Young [1864] 33 BEAB 330 and Bompas v King (1886) 33 Ch D 279. There is no allegation in the pleadings, nor is it a fact, that the mortgagee is attempting to sell the land at this stage. Nor has there been an offer to redeem or are orders for redemption sought.

82 In the circumstances of this case, I consider that the claim against the defendants as mortgagee in possession is premature and the plaintiffs should therefore not be permitted to replead their case.

83 For the reasons given, I consider the amended statement of claim should be struck out.

84 Having reached that conclusion I have carefully considered whether or not the plaintiffs should be granted leave to replead their case. I am conscious of the fact the plaintiffs are not legally represented. Nonetheless, for the reasons I have given there are a number of compelling reasons why leave should not be granted. I consider it would be unjust to do so. That being the case, I am of the view the defendants are entitled to the judgment they seek.

EDWARD JAMES BRIDE AND WENDY MARGARET BRIDE as Trustees of the Pinwernying Family Trust

OUTLINE OF FAULTS IN PLAINTIFFS' AMENDED STATEMENT OF CLAIM DATED 27 MAY 2000

140 St Georges Terrace Reference No: JCV:CHT:9859380

Firstly; Edward James Bride and Wendy Margaret Bride, personally, and

Secondly; Edward James Bride and Wendy Margaret Bride as trustees for The Pinwernying Family Trust (hereinafter referred to as "the Plaintiffs ")

The first defendant was, and was at all material times, a duly incorporated Company carrying on business as a

First Defendant is two separate entities. Only one is relevant to

bank from 190 St Georges Terrace, Perth, Western Australia (hereinafter referred to as "the Bank")

The second defendant was at all material times a partnership carrying on business as accountants in the State of Western Australia

Second defendant is two partnerships. Only one can be relevant to these proceedings.

The third defendants were at all material times partners of the second defendant and from about 1987 acted as agents for the first defendant, as Mortgagee in Possession of the Trusts Land, Business and assets, located at Lot 29 Creek Street, Katanning, Western Australia

Fails to properly particularise which individuals were members of which partnership at which time.

At all material times David James Young, John Dures Anderson and Charles Candlin Fear were partners of the second defendant, and at all material times all of the partners in the second defendant firm were jointly and severally liable for the acts and omissions of the said DAVID JAMES YOUNG, JOHN DURES ANDERSON and CHARLES CANDLIN FEAR done in the ordinary course of the second defendant firm's business

Fails to properly particularise which individuals were members of which partnership at which time.

At all material times until July 1985 and about January 1986 the plaintiffs in their personal capacity and as Trustees of the Trust were the registered proprietors of the Land being more particularly described as:

All land other than the Residence and the 104 Acres were the subject of the Bank Proceedings: Bank Proceedings at paragraph 16

Pinwernying Lots 21, 22, 23, 37, 54, and 55 and Pinwernying Suburban Lot 20 the whole of the land in Certificate of Title Volume 538 Folio 6A (The Vineyard)

Owned by the Pinwernying Family Trust: Bank Proceedings paragraph 16.

Portion of Kojonup Location 255 and being part of Lot 2 on diagram 11099 the whole of the land in Certificate of Title Volume 1322 Folio 460 (the Oat Mill)

Owned by the Pinwernying Family Trust: Bank Proceedings paragraph 16.

Portion of Kojonup Location 255 and being Lot 1 on diagram 9860 being the whole of the land in Certificate of Title Volume 1322 Folio 461 (the Winery)

Owned by the Pinwernying Family Trust: Bank Proceedings paragraph 16.

Portion of each of Katanning Agriculture Area Lots 51 and 70 and being Lot 3 on Diagram 41856 the whole of the land in Certificate of Title Volume 529 Folio 74A (the Residence)

Owned by Mr Bride personally: Bank Proceedings paragraph 16.

Portion of Kojonup Location 337 and being Lot 8 on Plan 14220 and being the whole of the land formerly in Certificate of Title Volume 1654 Folio 429 and now in Certificate of Title Volume 1700 Folio 759 (hereinafter referred to as the Stock Feed Mill)

Owned by Mr and Mrs Bride in partnership: Bank Proceedings paragraph 16.

Port of Katanning Agriculture Area Lot 70 the whole of the land in Certificate of Title Volume 1333 Folio 281 (the 104 Acres)

Owned by Mrs Bride personally: Bank Proceedings paragraph 16.

At all material times until August 1984 the plaintiffs were in lawful possession of the above referred to lands, resided upon the lands and or alternately carried on business in Katanning, Western Australia and in particular carried on, in their personal capacity and as Trustees of the Trust, the business of oatmillers, stockfeed manufacturers, vignerons, farmers under the business names of:

Fails to identify the capacity in which the plaintiffs were in possession.

The partnership owned the business: Bank Proceedings paragraphs 59, 123 and 124.

In or about October 1981 the plaintiff Edward James Bride (hereinafter referred to as "Bride") applied personally and or on behalf of the Trust to the Australian Bank Ltd (hereinafter referred to as "the Bank") for a loan of one million seven hundred thousand dollars ($1,700,000) for the purpose of repaying existing debts, to purchase stock and to pay for the construction of a stock feed plant on The Land (hereinafter referred to as "the Loan")

The loan was to the partnership: Bank Proceedings paragraph 41.

By a letter addressed to "E Bride, Oat Milling Co of

Katanning Pty Ltd" dated the 5th March 1982, the Bank agreed to make the Loan subject to the execution of various documents to secure repayment of the Loan namely:

Registered Mortgage over the farming property at Katanning owned personally by the Plaintiffs.

Registered mortgage over the Land and buildings on which the businesses operated, and or owned by the plaintiffs personally and or as Trustees of the Trust.

Registered Mortgage Debenture over the assets, undertakings of the Oat Milling of Katanning.

Key man insurance on the life of the Plaintiff Edward James Bride be assigned to the Bank.

On the 5th March 1982 upon delivery of the letter referred to in paragraph 8 and prior to the preparation of or execution of any security documents the Bank advanced the Loan to the Plaintiffs personally and or to the Trust

"Prior to the preparation of or execution of any security documents" is an improper plea as it attempts to set up a plea that there was no consideration for the loan which is unsustainable: Bank Proceedings paragraphs 32 and 144.

The Loan was provided to the partnership: Bank Proceedings paragraph 41.

On or about the 26th March 1982 the following security documents were executed namely:

Mortgage granted to the Bank by the plaintiff Edward James Bride personally as to the land comprised in Certificates of Title Volume 1278 Folio 138 and Volume 529 Folio 74A; by the plaintiff Wendy Margaret Bride personally as to the land comprised in Certificate of Title Volume 1333 Folio 281; Certificate of Title Volume 529 Folio 74A and by the Plaintiffs in

Repetition of "Certificate of Title Volume 529 Folio 74A".

their capacity as Trustees of the Trust as to the land comprised in Certificates of Title Volume 1322 Folios 460 and 461 and Volume 538 Folio 6A

Deed of Guarantee and Indemnity given by the Plaintiffs personally to the Bank

Guarantee given by Mr & Mrs Bride personally and as trustees: Bank Proceedings paragraph 32.

In or about December 1982 at the request of the Bank to the Plaintiffs the following additional security documents were executed:

Debenture Mortgage granted to the Bank over all of the assets of the company Bride Foods Pty Ltd dated 21st December 1982

Debenture mortgage granted to the Bank over all of the assets of the company Swan Stock Foods Pty Ltd dated 21st December 1982

Deed of Guarantee and Indemnity dated 21st December 1982 given by Bride Foods Pty Ltd and Swan Stock Foods Pty Ltd to the Bank in respect to the Loan to the Trust

The Loan was made to the Partnership: Bank Proceedings paragraph 41.

In or about June 1993 at the request of the Bank to the Plaintiffs the following additional security documents were executed:

Mortgage dated 27th June 1983 granted to the Bank over all that land more particularly described as: portion of Kojonup Location 337 being Lot 8 on Plan 14220 being the whole of the land in Certificate of Title Volume 1654 Folio 429 being land registered in the name of the Plaintiffs

This land is owned by the plaintiffs as partners: Bank Proceedings paragraph 16.

In or about August 1983 at the request of the Bank to the Plaintiffs the following additional security documents were executed:

Bill of Sale granted by the Plaintiffs personally as mortgagors to the Bank as mortgagee dated the 24th August 1983

Capacity in which this was granted: Bank Proceedings paragraph 80.

In or about March 1984 at the request of the Bank to the plaintiffs the following additional security documents were executed:

Bill of Sale, granted by the plaintiffs both personally and in their capacity as Trustees for the Trust as mortgagors, to the Bank as mortgagee, dated 23rd March 1984

Capacity in which this was granted: Bank Proceedings paragraph 89.

All of the security documents described in paragraphs 10, 11, 12, 13, and 14 of the Statement of Claim (hereinafter referred to as "the Securities") are not enforceable by the Bank as they were executed for no consideration or alternatively for consideration which was past

Consideration for the loan and securities: Bank Proceedings paragraphs 32, 144 and 179.

At no time has Brides Foods Pty Ltd or Swan Stock Foods Pty Ltd had any title to or claim upon either the Land, the Business or any part thereof

At no material time on or prior to the 9th August 1984 were the Plaintiffs in default of any term of the Loan or of the Securities

Default not necessary: Bank Proceedings paragraph 144.

At no material time on or prior to the 9th August 1984 had any valid notice of default or demand been served upon the Plaintiffs

Validity of demand: Bank Proceedings paragraphs 139, 145-151.

At the time of the Bank on the 9th August 1984 appointing John Dures Anderson and David James Young of the Second Defendant as receivers and managers of the Business and Land and the taking possession the Plaintiffs were not in breach of any term of the Securities and no valid notice of default had been served on the Plaintiffs, either in their personal capacity or as Trustees of the Trust, pursuant to any of the Securities listed and referred to above.

Appointments over the business on 9 August 1984: Bank Proceedings paragraph 146.

Appointments over the land on 22 August 1984: Bank Proceedings paragraph 159.

On the 9th August 1984 the Bank purported to appoint John Dures Anderson and David James Young of Peat Marwick Mitchell and Co as receivers and managers of the Business and the Land (hereinafter referred to as the

Appointment over the business only on 9 August 1984; Bank Proceedings paragraph 146.

Entry onto the land was lawful: Bank Proceedings paragraph 148 and 157.

At all material times thereafter the Bank and the receivers and managers colluded to and falsely and fraudulently purported to do all acts as bankers and receivers and managers of Brides Foods Pty Ltd and Swan Stock Foods Pty Ltd not as receivers and managers of the Plaintiffs and or Trust's assets

Capacity in which the receivers acted: Bank Proceedings paragraph 144.

Falsely by way of letters to the Australian Taxation Office (ATO) knowingly attempted to deceive ATO into believing that the Plaintiffs had represented to the Bank that the business of Oat Milling of Katanning was owned, operated and controlled by Bride Foods Pty Ltd and or Swan Stock Foods Pty Ltd.

The particulars are scandalous, frivolous and vexatious and an abuse of process as failing to properly plead fraud and pleading fraud without any proper foundation.

Falsely, fraudulently and with intend pretended to the Trustees of the Plaintiffs Bankrupt Estate that the owners of the businesses were Bride Foods Pty Ltd and Swan Stock Foods Pty Ltd.

Falsely, fraudulently and with intent to withhold the books, records and papers of Oat Milling of Katanning from the Plaintiffs and the above Trustees, on the basis of those books, papers and records were the property of Bride Foods Pty Ltd and or Swan Stock Foods Pty Ltd, not the Plaintiffs.

The Unsecured Creditors of the Plaintiffs estate were denied the assets secured by the March 1984 Bill of Sale that were lawfully due to and rightfully the property of the Unsecured Creditors. The said Bill of Sale being void upon the Bankruptcy of the Plaintiffs.

Edward James Bride and Wendy Margaret Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd & Ors [2000] WASC 310

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (354 paragraphs)

Edward James Bride and Wendy Margaret Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd & Ors [2000] WASC 310 (18 December 2000)

Parties

Legislation Cited (1)

Cases Cited (6)