McCarthy v National Australia Bank - [2020] NSWSC 1355 - NSWSC 2020 case summary — Zoe

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McCarthy v National Australia Bank

[2020] NSWSC 1355

Supreme Court of NSW|2020-09-08

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Court

Supreme Court of NSW

Decision date

2020-09-08

Source

Original judgment source is linked above.

Judgment (27 paragraphs)

[1]

Judgment

HER HONOUR: By notice of motion filed 28 July 2020, the defendant seeks: 1. an order pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") that the whole or parts of the plaintiff's statement of claim filed 26 June 2020 be struck out on the basis that it: 1. discloses no reasonable cause of action; 2. has a tendency to cause prejudice, embarrassment or delay in the proceedings; or 3. is otherwise an abuse of the process of the Court; or in the alternative, 1. an order pursuant to UCPR 13.4 that these proceedings be dismissed as against the defendant on the basis that they are frivolous or vexatious; or in the alternative, 2. an order that the plaintiff be required to file and serve an amended statement of claim which complies with UCPR 15.3.
The plaintiff is Warren Brian McCarthy. The defendant is the National Australia Bank ("NAB"). The plaintiff relied upon his affidavit dated 3 August 2020. The defendant relied upon the affidavits of its solicitors, Danielle Catherine Lysenko dated 28 July 2020 and Emma Jane Hodgman dated 31 August 2020. Both parties relied on their written submissions. For convenience, I will refer to the parties by name.
At the hearing, the plaintiff appeared by telephone link, as was his preference. He was not legally represented, nor did he have his McKenzie friend, Elder John, present as he is unwell. Counsel for the defendant appeared via video link.
There has been prior protracted history of litigation between the parties. I shall refer to some of it later in this judgment.

[2]

[8]

First application to set aside the default judgment

In November 2014, Mr McCarthy sought to set aside the NAB default judgment. Some of the submissions advanced by Mr McCarthy on that application before Hall J (at [51]) were: "... the financial records relied upon by [NAB] in relation to the loan transaction were incorrect. It was argued that these records incorrectly stated [Mr McCarthy's] income (as being higher than it was) and were used by [NAB] to satisfy itself as to [Mr McCarthy's] ability to service the loan."
That is to say, Mr McCarthy made a similar allegation that NAB's approval of its offer of finance to him had been procured by fraud.
During the hearing before Hall J, Mr Peter Weingarth, the Business Banking Manager of NAB's Business Banking Centre in Coffs Harbour, provided an affidavit dated 11 July 2014. His evidence was set out by Hall J at [36]-[42] as follows: "[36] Mr Weingarth was the Business Banking Manager of the plaintiff's Business Banking Centre in Coffs Harbour from June 2006 to March 2009. He recalled the defendant being a customer and detailed the agreements entered into between the plaintiff and the defendant prior to the execution of the 2008 loan agreement. [37] In respect of the 2008 loan agreement, Mr Weingarth stated that: 'At no stage did I advise Mr McCarthy that he did not need to make any repayments during the term of the Home Loan Agreement.' (at [9]) He further said that: 'In response to paragraph 11 of the Proposed Defence, at no stage did Mr McCarthy do or say anything to me to indicate that he did not understand the Home Loan Agreement. Based on my dealings with Mr McCarthy and our discussions I believed that he understood his commitments and the issues we discussed, such as debt reduction and serviceability.' (at [16]) [39] Mr Weingarth stated that he did not provide any legal or financial advice to the defendant and that it was not his practice to do so with any customer: at [17]. [40] In addition, he stated that he did not make any representations to the defendant to the effect that the defendant did not need to make repayments under the loan agreement, that the defendant could afford to borrow money, or that the loan structure had little risk: at [18]. He proceeded to state that he did not make any representations or say anything to the defendant to induce him into executing the agreement: at [19]. [41] Mr Weingarth additionally stated that he did not alter the defendant's financial documents as alleged, nor was he aware of any National Australia Bank employee doing so: at [20]. [42] Finally, he stated that at the time the documents were executed he was not aware, or did not suspect, that the defendant was under any mistaken belief as to the loan terms or that he was in a position of special disadvantage, as alleged in the proposed Defence: at [21]-[22]."
Ms Bains, an associate of NAB's Business Banking Centre, who was assisting Mr Weingarth, attended the meeting with Mr McCarthy and Mr Weingarth when Mr McCarthy signed the loan documents. She recalled Mr Weingarth pointing out certain aspects of the loan agreement, as set out in the NAB default judgment at [44]-[47].
Having set out this evidence, Hall J stated at [80]: "[80] It is unfortunate that the defendant, now self-represented, may have been disadvantaged by his solicitor's delay in drafting the proposed Defence. However, the delay is not a critical issue to the outcome of the present application to set aside the default judgment. The critical issue has been discussed above and involves an absence of evidence in support of the proposed Defence. Notwithstanding, I am not satisfied that the asserted defence has any evidentiary foundation. Further, I am not satisfied that the relevant loan agreement was affected by any fraud, illegality, or anything of that nature."
In respect of this aspect of Mr McCarthy's claim, Hall J stated that allegations of fraud require the party alleging fraud to adduce evidence by which the cogency of the allegation may be determined. There was no evidence adduced on Mr McCarthy's application in relation to the fraud allegations ([81]).
Having found that there was no evidence to support Mr McCarthy's proposed defence, Hall J dismissed his application to set aside default judgment ([83]).

[12]

Third application to set aside the default judgment

On 23 July 2015, Adamson J heard Mr McCarthy's third application to set aside the default judgment in National Australia Bank Limited v McCarthy [2015] NSWSC 1040.
On the third application, Mr McCarthy adduced evidence as to his income in 2005, relying on his tax return for 2005 which showed a loss of $712 together with a forensic report prepared by an accounting firm. Mr McCarthy also relied on business records which showed that another financier had rejected his application for finance in 2005 due to serviceability issues ([10]-[12]).
Adamson J stated at [28], [31]-[34]: "[28] I do not consider that the evidence adduced supported these allegations so as to give rise to an arguable defence on the merits. Indeed the evidence is largely to the contrary… … [31] Although there appeared to be an inconsistency between the defendant's tax return for 2005 and the documents provided to the NAB, it does not appear that the former was provided to the NAB in 2005, or that the NAB had any reason to doubt the veracity of the information the defendant provided as to his financial position. I do not propose to address specifically the other authorities relied on by the defendant referred to above. They are factually distinguishable and do not assist the defendant. [32] The documents tendered do not indicate the various agreements that were reached between the NAB and the defendant between August 2005 (when the St George Bank debt was refinanced by the NAB) and 2008 (when the NAB restructured the debt) as set out above. It appears that further monies must have been advanced by the NAB, since assets were sold to reduce the debt. There is no indication that this amounted to accommodation which might absolve the defendant from the responsibility of repaying the monies borrowed. [33] Submission (4) amounts to an allegation of fraud. The only basis put forward to substantiate the allegation is that the figure recorded for the defendant's income from Coffs Forklifts was said to be higher than the figures set out in the two cash flow statements in evidence. Although the defendant conceded that the signature apparently verifying the customer particulars appeared to be his signature, he alleged that a bank officer had copied the signature and constructed it from other documents. [34] I reject the allegation. It was not appropriate that it be made. Although allowance must be given for litigants in person, this Court ought not be used as a forum for scurrilous and unsubstantiated allegations. The defendant's accountant prepared one of the cash flow statements in evidence. It is reasonable to infer that the other was prepared by the defendant himself. There is a substantial variance between the one prepared by the defendant's accountant and the other cash flow. It appears that the cash flow statement that formed the basis of the figures in the NAB's records was derived from a cash flow statement prepared by the defendant and that he was prepared to sign the particulars as accurate at the time on the basis of that cash flow statement. I reject the suggestion, which I regard as mischievous, that a bank officer scanned documents after copying the defendant's signature in order to make it look as if the defendant's income was higher than it was."
Her Honour considered NAB's submission in relation to abuse of process at [40]-[42]: "[40] I entertained the defendant's application since it was not clear that all of the matters he had raised before me were raised by him before Hamill J. However, I accept that he essentially sought the same relief before me as he did before Hall and Hamill JJ and has provided no satisfactory explanation as to how this application differed from that brought before Hamill J (although he did explain that it was different from that brought before Hall J). In these circumstances it may be that the present motion amounted to an abuse of process. [41] However, rather than dismiss it on that basis, and because the NAB was prepared to contest the motion on the merits (although it also contended that the motion was an abuse of process), I dealt with it as a substantive application. I was influenced in part by the circumstance that Mr John was permitted to appear as the defendant's McKenzie friend on prior occasions. As referred to above, I did not permit Mr John to speak on the defendant's behalf at the hearing of the notice of motion before me. [42] Nonetheless, it would appear that there is a possibility that the defendant has had a greater opportunity, than that to which he was entitled, to establish an arguable defence on the merits. He has failed to do so."
Consequently, Adamson J held that Mr McCarthy had not established an arguable defence on the merits and there was no proper basis to set aside the NAB default judgment. The application to set aside the NAB default judgment was refused.

[13]

Leave to appeal from the decision of Adamson J

On 27 November 2015, the Court of Appeal (per Meagher JA and Bergin CJ in Eq), dismissed an application by Mr McCarthy for leave to appeal from the judgment of Adamson J in McCarthy v National Australia Bank Limited [2015] NSWCA 370.
The Court of Appeal stated at [19] and [23]: "[19] The applicant submitted that he was denied procedural fairness in that he was denied a 'fundamental right to full disclosure'. This is said to arise from NAB's alleged failure to comply with the subpoena served on it by the applicant on 27 February 2015 concerning documents evidencing 'income verification' in relation to the applicant's 2005 loan application. The applicant claimed that he is in no position to provide evidence or file appropriate submissions in defence of NAB's claim without proper compliance with that subpoena. The applicant contended that in making that loan NAB had failed to comply with the ASIC Regulatory Guide 209 concerning credit licensees and responsible lending conduct. … [23] In respect of the second and fourth matters: These complaints are related to the alleged failure of disclosure by NAB described in the third matter above. The applicant's written and oral submissions do not specify any particular respect in which there was relevant evidence before the primary judge which she did not take into account. Her Honour's reasons indicate that she considered the applicant's submissions concerning tax returns and other financial documents provided to NAB in support of his loan application. Assuming that 'Income Verification' refers to NAB's receipt and assessment of those documents, the primary judge referred to the material tendered before her (especially at [28]-[34]) and rejected the applicant's submission that details of his income had been knowingly falsified by the bank. None of these matters suggest error on the part of the primary judge."
The Court of Appeal dismissed Mr McCarthy's application on the basis that the proposed appeal had no apparent prospects of success, including in respect of his contention that the Court had erred in its consideration of his arguments concerning his 2005 tax returns and serviceability, and the question of whether NAB had failed to comply with Mr McCarthy's subpoena at [23]-[25].

[15]

Strike out and dismissal application before this Court

Mr McCarthy's case should be taken at its highest. Counsel for the defendant did not object to the dealing of the strike out and dismissal application on the basis of the PASC.
The PASC pleads at [1]-[16]: "1. In August 2005, the National Australia Bank Coffs Harbour Business centre, the defendant, entered a loan contract with the plaintiff of the following Account numbers and there amounts below. Variable Rate Home Loan 58 - 840 - 4187 $250,000.00 Fixed Rate Interest Only Loan 58 - 889 - 7604 $400,000.00 Business Mortgage Combination 58 - 883 - 7302 $100,000.00 Business Mortgage Overdraft 58 - 908 - 7021 $50,000.00 Upon discovery of the banks Home loan application for their assessments (CPR) found the Coffs Harbour NAB Branch had created an income that the plaintiff did not have, to obtain a loan approval. 2. NAB contractually adopted the 'Code of Banking Practice' guaranteeing a diligent and prudent banker to assess repayments for the Loan. The actions of NAB above, has now placed NAB in breach of the code. 3. This contract was a full doc loan requiring the plaintiffs full financial position under law. 4. Email dated 5th June 2019 from business banking manager Mr Brian Singh of NAB confirmed that the banks assessment of the stated income in the plaintiff's home loan application derived from financial statements and tax returns provided to the bank. 5. Plaintiffs original 2005 tax return shows no such income net per month. 6. On the defendant's advice the plaintiff requested a copy of the plaintiffs 2005 tax returns from the Australia Taxation Department which confirmed the original as being correct again showing no support of the stated income NAB Home Loan Application. 7. Copies of the 2 tax returns were forwarded to the plaintiffs Accountant, asking confirmation the Australia Taxation Office copy supported the plaintiff's originals. The plaintiffs Accountant affirmed the income in the NAB Home Loan Application was not that stated in the ATO or plaintiffs tax return. 8. On the 27th February 2015, the plaintiff was granted leave from Basten J Supreme Court of Appeal, to file and serve a 'Subpoena to Produce with Subpoena notice and declaration' to the defendant. 9. That Subpoena requested the discovery and production of Tax returns from the defendant Page 3 under (Original documents only) which was not achieved by the defendant. 10. 13th April 2015 directions in front of Registrar Riznyczok the court was put on notice that the defendant had not complied to the Subpoena. Council [Counsel] for the defendant on that day affirmed they had complied to the subpoena. 11. Mrs Danielle Kuti then Dibbs Barker now Dentons representative in these proceedings was then put on notice that the defendant had not complied to the subpoena. 12. Point 6,7 States the income NAB have used was derived from financial statements and tax returns ' PROVIDED TO THE BANK ' affirming NAB had the tax returns in there possession when the subpoena was served, which has exposed the defendant intentionally withholding evidence under a court ordered subpoena from Basten J. 13. The Defendant (NAB) have failed to furnish all documents 'Required Under Law' & that this claim is directed at a criminal intent and refusal for disclosure by Bank employees and the NAB. 14. To re-pay the debt back to NAB the plaintiff was forced to sell all assets, then through the courts his home he lived in was taken as well. 15. The defendant was deceitful and fraudulent of their contractual obligation under law and The Code of Banking Practice guarantee. The Plaintiff claims for damages (Rothman J orders 12th February 2016) in these proceedings as stated below. 16. The application to be made I would need to be satisfied that if there is a claim for fraud, as is alleged and I make no comment as to whether evidence would be provided that damages would not be an adequate remedy given that Mr McCarthy and his family are no longer in the premises, the proper remedy for any fraud that may have been perpetrated and gave rise to the orders of the court and the application of the National Australia Bank is damages." (Mr McCarthy's emphasis)

[16]

Mr McCarthy's submissions

In oral submissions, Mr McCarthy emphasised the importance of an email he received from Mr Singh of NAB on 5 June 2015, well after the events complained of occurred. In the email, Mr Singh responded to questions Mr McCarthy had sent. Mr Singh's responses are in red. It reads as follows: "Dear Mr Singh Thank you for your reply and the attached documents sent 10th April 2019. I regret to inform you that the documents in question that being the Customer Particular Reports of the amounts 250,000/400,000 do not make any sense and ask you please answer the following concern's I have. I'd also like to point out that I completely understand that it was obviously not yourself that did the approval process back in 2005 but I would like the answers individually attended to by yourself please in your reply. 1. The CPR documents show the Nab logo heading each individual page, this cannot be as the Nab logo was changed in late 2006 from the National logo. This is a system generated document. When re-printing the document it has updated to our current format. 2. Employment Details: This employment as stated All Area's Demolition is wrong I did not start work with this company until 2011 not 2005 as stated. Similar to above, this is a system generated document. And it is pulling through your current information that we have on hand in regards to personal and employment details. 3. Other Personal Details: Your document shows the wrong phone number 1 had in 2005 the wrong license. Please refer to response in 2. 4. Current Employment Details: shows me in full time employment this is false and I don't know how to interpret. Please refer to response in 2. (Date Commenced) showing a date of 1/06/2010. 5. Income Totals: This is quite disturbing as the total self employed income shows me earning $5,818.33 as a net monthly income is totally false, where did the Nab obtain this figure. This was derived from financial statements and tax returns provided to the bank."
From Mr Singh's reply in 2019, some five years after the loans were approved, his response was made on the basis of the updated computer records. It is clear that he did not cite the original records.
Mr McCarthy also forwarded submissions after judgment had been reserved. I have read them but they do not add anything to his arguments.

[18]

(1) Abuse of process

I have taken Mr McCarthy's earlier submissions and pleadings into account.
An abuse of process can arise if a litigant is permitted, by changing the form of their proceeding, to set up the same case again: see Reichel v Magrath (1889) 14 App Cas 665 at 668 per Lord Halsbury LC; Walton v Gardiner (1993) 177 CLR 378; (1993) 112 ALR 289 at 298 per Mason CJ, Deane and Dawson JJ.
Whether litigation is an abuse of process, frivolous or vexatious must turn on the facts of a particular case. However, the guiding considerations are oppression and unfairness to the other party to the litigation, and concern for the integrity of the system of administration of justice. The Court may have regard to the following matters: 1. the importance of the issue in the earlier proceedings, including whether it is an evidentiary issue or ultimate issue; 2. the opportunity available and taken to fully litigate the issue; 3. the terms and finality of the finding as to the issue; 4. the identity between the relevant issues in the two proceedings; 5. any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; 6. the extent of the oppression and unfairness to the other party if the issue was re-litigated, and the impact of the re-litigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and 7. an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.
In support of these principals, NAB relied upon State Bank of New South Wales Ltd v Alexander Stenhouse Ltd (1997) Aust Tort Rep 81-423 at 64,809 ("Stenhouse"), cited with approval in Habib v Radio 2UE Sydney Pty Limited [2009] NSWCA 231 at [91]. Adopting the considerations identified in Stenhouse, NAB submitted that: 1. the issues now sought to be raised by Mr McCarthy are the same as were identified in, and were made central to, the earlier proceedings; 2. multiple opportunities have been made available and taken to fully litigate the issue; 3. the terms and finality of the finding as to the issues raised by Mr McCarthy concerning the NAB's assessment of the serviceability of the finance advanced to Mr McCarthy are apparent from the Court's determination, on three occasions, that Mr McCarthy's position was unarguable, and the Court of Appeal found that there was no prospect of successfully arguing that the last of these decisions involved error; 4. the issues raised in this proceeding are all but identical to issues previously considered by this Court and the Court of Appeal; 5. no fresh evidence is advanced by Mr McCarthy in support of his claim; 6. the oppression and unfairness to NAB if these issues were to be re-litigated would be significant, as NAB would be tasked with defending its assessment of a loan it approved some 15 years ago, with the result that it is unlikely to have access to witnesses who dealt with the matter and in any event, memories are likely to have faded; 7. re-litigation would be contrary to the principle of finality, given the absence of any new issue being raised; and 8. the balance of justice favours this proceeding being struck out having regard to the number of opportunities Mr McCarthy has had to ventilate his claim.

[19]

Resolution

The focus of Mr McCarthy's allegations has always been that NAB fabricated his income on the loan documentation.
NAB officers who were present when Mr McCarthy signed the loan agreements swore affidavits as to what occurred. In short, the bank officers' evidence was that they followed responsible banking practices, and they denied that they fabricated Mr McCarthy's income on the loan documentation. This evidence was considered by Hall J, as set out earlier in this judgment.
Mr McCarthy says that these records incorrectly stated his income as being higher than it was, and that these figures were used by NAB to satisfy itself of his ability to service the loan. In the first application to set aside the default judgment, Hall J said that he was not satisfied that the asserted defence had any evidentiary foundation, as his Honour was not satisfied that the relevant loan agreement was affected by any fraud or illegality.
In Mr McCarthy's leave to appeal application, set out earlier, Basten JA granted an adjournment in order to give Mr McCarthy a chance to issue a subpoena to NAB. The documents sought in the schedule of the subpoena sought a variety of documents outlined earlier in this judgment, including all loan applications, documents relevant to those loan applications, loan offers, and documents regarding the discharge of any loan between NAB and Mr McCarthy.
On 13 April 2015, NAB produced documents to the Court. Mr McCarthy does not give any evidence as to whether or not he inspected them.
On 27 May 2015, set out earlier, Hamill J heard Mr McCarthy's second application to set aside default judgment. Mr McCarthy sought to set aside the judgment on the basis that NAB had not complied with the Court of Appeal's orders for a subpoena, and that NAB had deliberately refused to produce those documents in order to "conceal fatal evidence exposing NAB to maladministration, fraud and unconscionable conduct". As before, he alleged that NAB adopted the Code of Banking Practice and that NAB failed to assess serviceability and a contravention of the Code.
Hamill J determined that the material advanced by Mr McCarthy did not disclose an arguable defence, as Mr McCarthy had provided no particulars nor evidence to support his assertions.
On 23 July 2015, Adamson J heard Mr McCarthy's third application to set aside the default judgment. Mr McCarthy adduced evidence as to his income in 2005, relying on his tax showing a loss of $712, together with a forensic report prepared by an accounting firm. Her Honour made findings that the only basis put forward to substantiate the allegation of fraud was that the figure recorded for NAB's income from Coffs Forklifts was said to be higher than the figures set out in the two cash flow statements in evidence. Although Mr McCarthy conceded that the signature apparently verifying the customer particulars appeared to be his signature, he alleged that a bank officer had copied the signature and constructed it from other documents.
Adamson J stated that it appeared that the cash flow statement that formed the basis of the figures in the NAB's records was derived from a cash flow statement which Mr McCarthy had prepared, and that he signed off on those particulars as being accurate at the time. Adamson J did not consider that Mr McCarthy's evidence gave rise to an arguable defence on the merits. She stated that the evidence was largely to the contrary.
In Mr McCarthy's second application for leave to appeal, the Court of Appeal stated that Adamson J has considered Mr McCarthy's submissions concerning his tax returns and other documents provided to NAB in support of his loan application. Assuming that "Income Verification" referred to NAB's receipt and assessment of those documents, Adamson J had referred to the material tendered before her and rejected Mr McCarthy's submission that details of his income had been knowingly falsified by the bank. The Court of Appeal found that none of these matters suggested error on her Honour's part.
I agree with the statement of Adamson J, where she accepted that Mr McCarthy essentially sought the same relief before her as he did before Hall and Hamill JJ. He was unable to provide a satisfactory explanation as to how the application before her Honour differed from that brought before Hamill J. Her Honour stated that under the circumstances, the motion might amount to an abuse of process.
Mr McCarthy, in these proceedings, again seeks to agitate the same issues before me as he has raised before Hamill and Adamson JJ (and to an extent before Hall J), namely that the loan was unjust; that income was deceitfully and fraudulently inflated, fabricated, and falsified to obtain a loan approval; and that NAB contravened responsible lending obligations and the Code of Banking Practice. Mr McCarthy also alleges that NAB failed to comply with a subpoena and "failed to prove" its verification of his income referred to in a NAB Customer Particulars Report. The only additional document relied upon in these proceedings was a reply from Mr Singh of NAB dated 5 June 2019, some years after the loan documents were signed, where Mr Singh explained that his responses were based upon documents generated by the NAB computer system. Mr McCarthy made submissions that Mr Singh had in fact referred to the original financial statements and tax returns provided to NAB. It is clear that Mr Singh did not do so.
In my view, Mr McCarthy has litigated the same issues as set out above on at least three occasions in this Court. He has had many opportunities to fully litigate the issues, and on each occasion the Court has found that he has not established an arguable defence. Further, while he alleges fraud, the Court in earlier decisions has stated that fraud needs to be specifically pleaded in accordance with UCPR 15.3. He still failed to plead his case on such terms.
Mr McCarthy now makes the same allegations as before in his statement of claim and PASC. The only difference is that in the proceedings before me, he is the plaintiff and NAB is the defendant. It has reached the stage where making the same allegations has caused oppression and unfairness to NAB. Mr McCarthy's attempts to relitigate these proceedings have impacted upon the principle of finality of judicial determination and public confidence in the administration of justice. They also offend s 56 of the Civil Procedure Act.
It is my view that these current proceedings are an abuse of process and should be struck out.

[20]

(2) Whether these proceedings should be struck out on account of prejudice, embarrassment and delay

NAB referred to Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; (1990) 92 ALR 53 ("Akhil"). In Akhil, the High Court stated at 58 that when considering whether a pleading ought to be struck out, it is relevant to consider the purpose of the pleading: "The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 per Isaacs and Rich JJ at 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision…."
In Iacullo v Iacullo [2013] NSWSC 1517, Black J summarised a number of authorities concerning the requirements of pleading, noting (at [55]): "In Downer Connect Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2008] VSC 77 at [2]-[4], Harper J (as he then was) observed that 'one of the primary purposes [of pleadings] is to reveal to the opposite party how the party pleading puts its case', and then dealt with a common response to criticism of a pleading: 'A complaint that the pleadings do not achieve this end is often met with the response that the opposite party knows very well, from documents and perhaps other sources, what the case against it is. This is no answer at all, at least unless the relevant documents are properly incorporated into the pleading. It is, as a general proposition, true to say that each pleading should be sufficient in itself. And although an element in an adversarial process, pleadings are themselves intended to be the opposite of adversarial, at least to the extent that they must, if they are to perform one of their proper functions, inform the opposite party of the case that party will have to meet at trial.' …"
Reasons that a pleading may be considered embarrassing include that the pleading is susceptible to various meanings, contains irrelevant allegations that tend to increase expense, or is unintelligible, ambiguous, vague or too general: see Iacullo at [57] to [58]. In these proceedings, the "embarrassment" refers to a pleading that is susceptible to various meanings, where alternatives may have been intermixed or irrelevant allegations made, or where material facts are couched in expressions which obscure what is being referred to: see Richard Churchill v The University of Sydney [2020] NSWSC 1343 per Wilson J at [34].

[21]

NAB's submissions

Some of these submissions are the same as set out under abuse of process.
NAB submitted that Mr McCarthy's proceeding should be struck out as an abuse of process, vexatious and frivolous.
NAB submitted that to the extent that any recognisable claim is advanced in the PASC, it is clear that Mr McCarthy seeks to agitate the question of whether the NAB failed adequately to assess the serviceability of financial accommodation it advanced to him in 2005 (with certain further advances provided in the ensuing years). To the extent Mr McCarthy seeks, once again, to put NAB's assessment of serviceability in issue, Mr McCarthy has not identified the ways in which he asserts that NAB failed to exercise the care and skill of a diligent and prudent banker in selecting and applying its credit assessment methods, and in forming its opinion about his ability to repay his loans. Mr McCarthy has also failed to properly identify any alleged breach of such a duty.
Mr McCarthy has sought to ventilate this issue before this Court on three applications to set aside the NAB default judgment, as well as before the Court of Appeal. Mr McCarthy's allegations have failed on each occasion.
NAB submitted that although the claim is now advanced in litigation in a different form by way of a fresh application, the substance of his claim is unchanged. The allegations are exhausted. To pursue this proceeding is an abuse of process because it is an attempt by Mr McCarthy to set up once more the same case that he has run (and lost) repeatedly.
The statement of claim and PASC fail to identify with any precision the elements of a recognisable cause of action against NAB. No identifiable relief is sought. NAB says that Mr McCarthy's pleading of fraud again lacks any of the particulars required under the UCPR, including, for example, identification of the person said to have perpetrated the fraud alleged to have occurred. NAB should not be left to guess at the ways in which these gaps in the pleading are to be filled.
NAB further submitted that Mr McCarthy had not identified any basis for his delay in bringing this proceeding 8 years after the FOS determination, six years after judgment was obtained against him and 5 years after the Court of Appeal refused him leave to appeal from the third application to set aside the NAB default judgment. He does not identify any reason why the resources of the Court should be devoted, once more, to claims already determined. As such, to bring this proceeding in this form is contrary to the parties' duty to the Court to resolve of the issues in dispute in a manner that is just, quick and cheap: see ss 56, 57 and 58 of the Civil Procedure Act 2005 (NSW).

McCarthy v National Australia Bank

At a glance

Court

Decision date

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Judgment (27 paragraphs)

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Legislation Cited (2)

Cases Cited (16)