Investec Bank (Australia) Ltd v Colley

Judgment 1HER HONOUR: Before me for hearing on 19 June 2012 were two separate applications: (i) an application by Notice of Motion filed on 9 December 2011 by the defendant (Mr Colley), seeking leave pursuant to s 64 of the Civil Procedure Act 2005 (NSW) and rule 19.5 of the Uniform Civil Procedure Rules 2005 (NSW) to file an Amended Defence and Amended Cross-Claim; and (ii) an application by Amended Notice of Motion filed on 2 February 2012 by the plaintiff (Investec Bank (Australia) Ltd), seeking an order pursuant to Rule 13.1 of the Uniform Civil Procedure Rules for summary judgment against Mr Colley on part of the claims made in the Statement of Claim and an order pursuant to Rule 14.28 that the Cross-Claim filed on 16 August 2011 by Mr Colley be struck out (the latter arising only if leave to amend the cross-claim is not granted). Investec did not press for the relief sought in paragraphs 3 and 4 of the Amended Notice of Motion (for dismissal of the proceedings on the Cross-Claim and its costs of those proceedings). 2By the time of the hearing of these applications, Mr Colley was self represented (the lawyers formerly acting for him in these proceedings having filed a Notice of Intention to File Notice of Ceasing to Act on 3 May 2012 and subsequently a Notice of Ceasing to Act on around 11 May 2012). On the hearing of the present applications (stood over from 21 May 2012), Mr Colley largely relied on the submissions that had been prepared by the lawyers previously acting for him in this matter. Background facts 3The substantive proceedings brought by Investec are for the recovery of monies alleged to be due to Investec by Mr Colley under various finance agreements entered into by him in connection with his investment in a number of managed investment schemes. Rewards Projects Limited (a company now in administration) (RPL) was the responsible entity for each of the schemes (and a party to the first two of the finance agreements). Mr Colley admits that he held an interest as a member in each of the managed investment schemes in question (although in his defence he does not admit entry into the primary agreements with RPL). He admits entry into the respective loan agreements. 4There are five investments in respect of which loans were made to Mr Colley (to which I will refer, consistently with the definitions used in the Statement of Claim, as the Tropical Fruits Project 2004; the Sandalwood Project 5 Releases 1 and 3; the Teak Project 2006 Release 2 and the Sandalwood Project 2007 Release 1). Those investments related to the acquisition by Mr Colley of: (i) 13 tropical fruit groves (in the Tropical Fruit Project 2004) in 2004, in connection with which, on or about 30 June 2004, Mr Colley entered into a terms payment agreement with RPL for a loan in an amount of $77,350; (ii) a number of woodlots of sandalwood (in the Sandalwood Project 5 Release 1) in 2005, for the purpose of which Mr Colley entered into a terms payment agreement with RPL for an amount of $150,150 on or about 30 June 2005; (iii) a further 20 woodlots of sandalwood (in the Sandalwood Project 5 Release 3) in connection with which, on or about 1 July 2006, Mr Colley entered into a finance agreement with Arrow Funding Pty Ltd (now known as Experien Nominees Pty Ltd) for an amount of $90,000; (iv) a number of woodlots of teak in the Teak Project 2006 Release 2, in connection with which, or about 30 June 2007, Mr Colley entered into a finance agreement with Investec for the amount of $59,400; and (v) a number of woodlots of sandalwood in the Sandalwood Project 2007 Release 1 project in 2007 in connection with which Mr Colley entered into another finance agreement with Investec on or about 30 June 2007 for the sum of $99,000. 5As can be seen from the above, only the last two of the five finance agreements were entered into directly with Investec as the financier. The other three were entered into with other parties (RPL, itself, for the first two and Arrow for the third), the rights under which were later the subject of assignment to Investec in the circumstances I outline in due course. 6By reference to an ASIC names search in evidence before me, it is clear that the company now known as Experien Nominees Pty Ltd was formerly known as Target Funding Pty Ltd and before that was known as Arrow Funding Pty Ltd. References throughout these reasons to Experien, Target and Arrow are to the same entity (in whatever iteration the company was at the relevant time). 7There is no challenge made by Mr Colley (in either his filed Defence and Cross-Claim or the amended versions of those pleadings which he now seeks leave to file) to the validity of the first three finance agreements. Instead, the allegations made in Mr Colley's existing Cross-Claim (and sought to be made in the proposed Amended Cross-Claim), by reason of which it is said that loan agreements are unenforceable, are confined to his investments in the Teak Project 2006 Release 2 and the Sandalwood Project 2007 Release 1. 8The application by Investec for summary judgment is now pressed only in relation to its claim for the amounts outstanding on the first three loan agreements. Mr Colley does not admit liability for those amounts (thus Investec is required to establish its claim to those monies on its summary judgment application). Further, he seeks to set-off any amounts for which he may be liable under the first three agreements against his claims against Investec in respect of the others. 9Investec contends, but Mr Colley does not admit, that the beneficial interest of RPL in the first and second of the terms payment agreements was assigned on about 10 November 2005 to Experien (the entity from whom finance for the 2006 Sandalwood Project 5 Release 3 was directly obtained). It is alleged that Experien subsequently assigned to Investec both its beneficial interest in the two RPL terms payment agreements and its right title and interest in the July 2006 (Sandalwood 5 Release 3) finance agreement. Notice of the assignment of the third (Arrow) loan agreement was given to Mr Colley on 14 March 2011. In relation to the first and second (RPL) terms payment agreements, it is alleged that RPL assigned to Investec on about 24 August 2010 its legal right title and interest therein and that notice of that assignment was sent to Mr Colley's nominated address for service by letter dated 25 August 2010. (The delay in notification is presumably due to the perfection of title clauses in the agreement pursuant to which the equitable interest in the loan facilities was initially assigned.) 10Investec maintains that it is entitled to enforce the three earlier terms agreements, the benefit of and rights under which have been assigned to it. I consider in due course the evidence as to how those assignments were effected. 11It is alleged that Mr Colley defaulted under each of the terms agreements at around the end of February 2011 by failing to pay the monthly interest then due. Failure to pay instalments when due amounted to an event of default under the terms of the relevant agreements. Notices of Demand were issued in relation to the initial defaults under the agreements (claiming the amounts necessary to bring the accounts back into order). When the defaults were not remedied within 14 days, Investec claimed the entire balance of the loans as immediately due under the default provisions of the relevant agreements. 12These proceedings were commenced on 9 May 2011 for the whole of the outstanding balances plus interest at the rate payable under the loan agreements (10.95%). (Investec does not press a claim for interest at the default rate specified in the agreements.) 13In his Defence, Mr Colley denies the various allegations of default (other than to admit receipt of the Notice of Default dated 14 March 2011 by which Investec notified Mr Colley of the overdue monthly repayments and demanded payment within 17 days, failing which it was said that the entire balance outstanding would become due and payable). Mr Colley also denies that he failed to remedy the defaults (although, as I understand it, it is not suggested by Mr Colley that he in fact paid to Investec the amounts so demanded and, indeed, the evidence for Investec on this application is that no amounts have been paid on any of the loans since early 2011). Evidence 14Before I turn to the particular applications before me, I note that during the course of argument on the summary judgment application I raised an issue as to the admissibility of the various documents under which the rights under the first three loan agreements were assigned to Investec. This was because there was no indication on the face of those documents that any stamp duty (assuming that any of the instruments was dutiable) had been paid thereon. 15Section 304 of the Duties Act 1997 (NSW) prohibits the presentation in evidence of an instrument that effects a dutiable transaction or is chargeable with duty under the Act, unless stamped: (1) An instrument that effects a dutiable transaction or is chargeable with duty under this Act is not available for use in law or equity for any purpose and may not be presented in evidence in a court or tribunal exercising civil jurisdiction unless: (a) it is duly stamped, or (b) it is stamped by the Chief Commissioner or in a manner approved by the Chief Commissioner. (2) A court or tribunal may admit in evidence an instrument that effects a dutiable transaction, or is chargeable with duty in accordance with the provisions of this Act, and that does not comply with subsection (1): (a) if the instrument is after its admission transmitted to the Chief Commissioner in accordance with arrangements approved by the court or tribunal, or (b) if (where the person who produces the instrument is not the person liable to pay the duty) the name and address of the person so liable is forwarded, together with the instrument, to the Chief Commissioner in accordance with arrangements approved by the court or tribunal. (3) A court or tribunal may admit in evidence an unexecuted copy of an instrument that effects a dutiable transaction, or is chargeable with duty in accordance with the provisions of this Act, if the court or tribunal is satisfied that: (a) the instrument of which it is a copy is duly stamped, or is stamped in a manner approved by the Chief Commissioner, or (b) the copy is duly stamped under section 299. 16Counsel for Investec (Mr White) sought leave to adduce further evidence and to make further submissions (once he had had an opportunity to obtain instructions in relation to that issue). Therefore, I simply marked those documents for identification and gave leave for further submissions to be made by Investec once it had ascertained the stamp duty position in relation to those documents. Those submissions have since been received, together with an application to tender in evidence a further copy of the first of those instruments (on which stamp duty imprints are apparent) and for the documents previously marked for identification now to be admitted into evidence on the application. The documents in question are:

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