Poulos v Australia and New Zealand Banking Group Ltd

Supreme Court of NSW|2021-12-02|Before: Darke J

Introduction

On 11 June 2021 the defendant filed a Notice of Motion seeking orders for the dismissal of the proceedings or the striking out of the Amended Statement of Claim. On 2 August 2021 the Court delivered a judgment, and ordered that the Amended Statement of Claim be struck out (see Poulos v Australia and New Zealand Banking Group Ltd [2021] NSWSC 971 - "the earlier judgment"). The order was made on the basis that the pleading failed to disclose a reasonable cause of action against the defendant, and had a tendency to cause prejudice, embarrassment and delay in the proceedings (see at [23]). The Court declined to order that the proceedings be dismissed, considering that the plaintiff ought be given a further opportunity to produce an acceptable pleading (see at [26]). An order was made that the plaintiff serve any proposed Further Amended Statement of Claim by 1 October 2021.
The proposed Further Amended Statement of Claim was duly served on 1 October 2021. On 7 October 2021 directions were made for the filing and service of written submissions, with a view to having the Notice of Motion finally determined on the papers. In accordance with those directions, the defendant provided written submissions on 15 October 2021, and the plaintiff provided written submissions in response on 22 October 2021.
In short, the defendant opposes the grant of leave to file the proposed further Amended Statement of Claim and presses for the proceedings to be dismissed. The plaintiff seeks leave to file the proposed pleading.
The plaintiff requested an oral hearing, contending that this was necessary in the interests of justice. The matter was thus listed on 2 December 2021 to hear oral submissions in addition to those made in writing. Shortly prior to the further hearing the plaintiff provided a further written submission.
For the following reasons, which ought be read in conjunction with the earlier judgment, I have concluded that as the proposed Further Amended Statement of Claim fails to disclose a reasonable cause of action against the defendant, and would have a tendency to cause prejudice, embarrassment and delay, it is appropriate to refuse leave for its filing. I have also concluded that it would be appropriate to make an order dismissing the proceedings.

The proposed pleading

The final relief claimed in the proposed pleading is essentially confined to damages and interest.
The body of the proposed pleading, headed "Pleadings and Particulars", consists of some unnumbered paragraphs followed by numbered paragraphs 1 to 25.
The unnumbered paragraphs commence with references to two statutory provisions and five cases or "authorities". There follows material of an introductory nature, including statements about the plaintiff formerly being a director of Hacide Pty Ltd, a registered proprietor of "the Miranda property", and a defendant in "the litigation caused by the conduct of the Defendant". The defendant is then referred to in terms which include "its divisions and subsidiaries". Reference is then made to two properties, in Cronulla and Miranda, that were the focus of the Amended Statement of Claim (see the earlier judgment at [6]-[7]). The last of the unnumbered paragraphs states that the proceedings are brought on "fresh discovery of evidence intentionally concealed by the Defendant from the Plaintiff which had it been discovered and adduced would have resulted in opposite outcomes".
The first of the numbered paragraphs also refers to the "fresh" discovery of evidence. It is alleged that the defendant colluded with others, including the Commonwealth Bank of Australia ("CBA"), "to defraud the Plaintiff of assets and income causing the Plaintiff loss and damage". I note at this point that the proposed pleading does not go on to identify the nature or subject matter of the alleged collusion or the circumstances in which the alleged collusion is claimed to have occurred.
It is then alleged in paragraphs 2-3 that the defendant intentionally or deceitfully concealed things from the plaintiff, including: 1. that Finance Corporation of Australia Ltd ("FCA") was a subsidiary of the defendant; and 2. that FCA had issued an undated discharge of mortgage to Hacide Pty Ltd, and that this concealment caused the plaintiff loss and damage. It is alleged in paragraphs 4 and 5 that the concealment of the discharge of mortgage (presumably in respect of the Cronulla property owned by Hacide Pty Ltd) caused or led to the concealment (of, it seems, the discharge of mortgage) by others in proceedings involving the plaintiff. Those others are described as "Elliott/Elders" and CBA. The proceedings referred to seem to include those that are referred to in the earlier judgment at [6]-[7]. In respect of the proceedings that were heard by Sully J, it is alleged that the concealment resulted in an adverse judgment. That occurred in 1989.
It is alleged in paragraph 6 that the defendant's concealment of the discharge of mortgage caused the plaintiff to pay interest to FCA "for a debt which did not exist". The particulars to the paragraph state that the defendant "has provided no accounting for those monies fraudulently procured". This appears inconsistent with the allegation that the money was paid to FCA as opposed to the defendant. Further, there is no explanation for why the plaintiff would make such payments in respect of a mortgage of the Cronulla property that was owned by Hacide Pty Ltd (as trustee of the Poulos Family Trust).
Paragraph 7 contains an allegation that the defendant, without the knowledge or consent of the plaintiff, discharged the first mortgage over the Cronulla property and obtained the certificate of title. It is then alleged in paragraph 8 that the defendant's concealment of its procurement of the certificate of title caused the plaintiff loss and damage. It seems to be alleged that the concealment caused the plaintiff to pay interest to the first mortgagee to which it was not entitled. Again, there is no explanation for why the plaintiff would make such payments in respect of a mortgage of a property owned by Hacide Pty Ltd.
It is alleged in paragraph 9 that the defendant made false, misleading and deceptive statements about its intentions to provide a Swiss Franc loan to fund the acquisition of another property (the Miranda property). The statements are not clearly identified. The particulars to the paragraph state that the Swiss Franc loan was never provided so the plaintiff was required to pay higher interest rates.
Further allegations of false, misleading and deceptive statements are made in paragraphs 10 to 12, which seem to relate to the Cronulla property. Paragraph 10 concerns statements about the existence of an FCA debt and mortgage. Paragraph 11 concerns statements made to the Stamp Duties Office. The statements are not identified, although the particulars suggest that the defendant concealed the fact that no monies had been or were to be advanced to Hacide Pty Ltd. Paragraph 12 concerns statements made to the Land Titles Office at the time the defendant lodged its mortgage to Hacide Pty Ltd for registration. The statements are not identified, although paragraph 13 suggests that the defendant concealed information about possession of the certificate of title. The proposed pleading does not contain any allegations that the statements the subject of paragraphs 10 to 12 (or the concealing of information the subject of paragraph 13) caused the plaintiff to suffer loss.
Paragraphs 14 and 15 contain allegations to the effect that despite the discharge of the FCA mortgage, FCA remained registered as a mortgagee until, it seems, CBA became registered in May 1985.
It is alleged in paragraph 16 that the defendant has provided "no accounting for monies obtained in exchange for the properties of the Plaintiff and the Trust". The properties referred to might be taken to be the Miranda property (formerly owned by the plaintiff and her husband) and the Cronulla property (formerly owned by Hacide Pty Ltd) respectively, although the particulars to the paragraph include a reference to "eleven properties" which are not further described. The allegation is obscure, but the particulars suggest that it might be intended to relate to money obtained by the defendant upon the discharge of mortgages it held.
Paragraphs 17 to 19 contain allegations to the effect that the defendant executed discharges of mortgages given by Hacide Pty Ltd, or the plaintiff and her husband, and intentionally concealed the fact from the plaintiff. There does not seem to be any allegation that this particular conduct caused the plaintiff to suffer loss. However, it is alleged in paragraphs 20 and 22 that the defendant "disposed of the Cronulla property to Elliott/Elders which it intentionally concealed", and that this led to the CBA taking possession of the property. Paragraph 21 contains an allegation that the defendant "disposed of the Miranda property to Elliott/Elders". The particulars to these paragraphs suggest that the "disposal" of the properties occurred through the delivery of documents including discharges of mortgages and certificates of title.
Paragraph 23 contains an allegation that none of the defendant, a firm of solicitors, Elliott/Elders or CBA disclosed their dealings with the Cronulla and Miranda properties to the plaintiff.
Paragraph 24 contains an allegation that the defendant, having "disposed" of the properties to Elliott/Elders, fraudulently issued Letters of Demand dated 12 March 1985 "for debts which did not exist secured by properties it no longer held". Lastly, paragraph 25 contains an allegation that there were no funds "designated or delivered to the Defendant in satisfaction of the Letters of Demand at any settlement nor discovered in the litigation brought by Elders and CBA".

Submissions

The defendant provided written submissions on 15 October 2021 as to why leave to file the proposed pleading should be refused, and as to why the proceedings ought be dismissed. The plaintiff provided written submissions in response on 22 October 2021 and a further written submission shortly prior to the hearing on 2 December 2021. It is not necessary to summarise the submissions in detail.
In brief, the defendant submitted that the proposed pleading discloses no reasonable cause of action against it for damages, being the only substantive relief claimed. The defendant submitted that as this is the plaintiff's third failed attempt to articulate a claim against it, and as the plaintiff has had ample time to obtain legal assistance to prepare the claim that apparently concerns events that occurred more than 30 years ago, the Court should exercise its discretion to dismiss the proceedings. It was noted that it was made clear on the last occasion that the further opportunity given to the plaintiff to prepare her claim was meant to be a final one. The defendant submitted that the Court can have no real confidence that the situation would be improved if the plaintiff was given more time to "try again".
The plaintiff submitted that leave should be given to file the Further Amended Statement of Claim even though it did not fully reflect the evidence available. In that regard, the plaintiff appears to suggest that the case is concerned with 11 properties "fraudulently procured" by the defendant in 1983 and "fraudulently disposed of" by the defendant in 1984, and in respect of which it demanded the payment of interest "on debts which did not exist". The plaintiff further submitted that the defendant colluded with Elders and CBA to ensure "silence of its involvement in their claims". The plaintiff also refers to the fabrication of bank records. As I read the plaintiff's submissions there is no clear description or identification of the cause or causes of action sought to be pursued, such as might answer the criticism that the proposed pleading fails to disclose a reasonable cause of action. However, the plaintiff dismisses criticism of the form of pleadings as "a weak argument against the misconduct of the Defendant". The plaintiff submitted that the defendant is taking a technical or pedantic approach to the pleading. The plaintiff suggested that a lawyer reading the proposed pleading should have no difficulty in ascertaining the issues raised and the case that has to be met. The plaintiff noted that the relevant facts are peculiarly within the defendant's knowledge. The plaintiff further submitted, however, that if the claim is not adequately expressed then leave to further amend should be granted.

Determination

The plaintiff, by her proposed Further Amended Statement of Claim, seeks to advance a claim or claims for damages against the defendant. It can be seen, at a general level, that the plaintiff's complaints are largely directed towards the defendant's conduct in the 1980s in connection with mortgages of the Cronulla and Miranda properties. It is said that the defendant dealt in various ways with mortgages given to FCA and itself, and with the certificates of titles to the properties, and concealed those dealings from the plaintiff. At least some of the conduct is claimed to have caused the plaintiff to suffer loss and damage (see paragraphs 3, 5, 6 and 8 of the proposed pleading). The plaintiff also complains that the defendant made various false, misleading and deceptive statements in connection with the mortgages. The plaintiff further makes a broad allegation that the defendant colluded with others to defraud her. The outlines of possible causes of action can thus be discerned.
However, the proposed pleading fails in my view to include a statement of material facts sufficient to identify the cause or causes of action sought to be prosecuted (see Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135; [2002] NSWCA 44 at [20]-[21] per Hodgson JA (with whom Mason P and Handley JA agreed). No facts are pleaded as to the existence of a contract containing certain terms such as might found an action in contract. No facts are pleaded as to the existence of a duty of care such as might found an action in tort for negligence. Insofar as the plaintiff seeks to advance a case in tort for deceit (see, for example, paragraph 1) there is an absence of necessary detail about the nature and subject matter of the alleged collusion, and the circumstances in which it is said to have occurred. Whilst the allegations of false, misleading and deceptive statements are suggestive of a claim under the Trade Practices Act 1974 (Cth), even where the statements are identified the proposed pleading fails to plead facts that, if proved, would establish contraventions of the statute and the suffering by the plaintiff of loss or damage as a result. Finally, whilst there is a suggestion that the defendant may have acted wrongfully in relation to its possession of certificates of title, the pleading is unclear as to the basis or nature of the wrongdoing alleged.
There are many other deficiencies in the proposed pleading. These include: 1. it is not made clear how the plaintiff, who was not an owner of the Cronulla property, suffered loss in respect of the defendant's dealings with that property; 2. a number of the allegedly false, misleading and deceptive statements made by the defendant are not identified at all or adequately; 3. in respect of a number of those allegations there is no pleading that the statements caused the plaintiff to suffer loss. I note in this context that at least some of the statements are alleged to have been made to persons other than the plaintiff; 4. there are numerous references to the defendant having "disposed of" the Cronulla and Miranda properties to "Elliott/Elders", but it is not clear what meaning is intended by that expression in circumstances where the defendant was not the owner of the fee simple in those properties. It may be that the defendant's delivery of discharges of mortgages and/or certificates of title are intended to constitute the dispositions referred to, but this is far from clear; and 5. there is no clear statement of the nature of the losses said to have been sustained by the plaintiff for which damages are sought, or of how such losses were sustained.
In my opinion, the deficiencies in the proposed pleading are serious, and particularly acute in circumstances where the plaintiff seeks to make allegations of fraudulent conduct against the defendant. The deficiencies in the proposed pleading cause it to fail to meet the essential function of stating with sufficient clarity the case that must be met by the defendant (see McGuirk v University of New South Wales [2009] NSWSC 1424 at [21]). As I have said, whilst the outlines of possible causes of action can be discerned, no causes of action are sufficiently identified. That is to say, no reasonable cause of action is disclosed. The proposed pleading would moreover have a tendency to cause prejudice, embarrassment and delay. A fair reading of it as a whole does not provide an intelligible picture of what case is alleged against the defendant. It is not appropriate that a defendant be placed in that situation. A number of the individual paragraphs of the proposed pleadings are themselves embarrassing due to their ambiguous and/or conclusionary natures (including, for example, paragraphs 1, 4, 5, 16, 20 and 21). I therefore do not accept the plaintiff's submissions to the effect that the defendant is taking an overly technical or pedantic approach.
It would not be appropriate to grant leave for the filing of the proposed Further Amended Statement of Claim as it would be immediately susceptible to being struck out pursuant to Uniform Civil Procedure Rules 2005 ("UCPR") r 14.28(1). In my view, to grant leave would be inconsistent with the overriding purpose referred to in s 56 of the Civil Procedure Act 2005 (NSW), and contrary to the dictates of justice as referred to in s 58 of that Act.
In these circumstances, the question arises as to whether the Court should dismiss the proceedings under UCPR r 13.4(1)(b) on the basis that no reasonable cause of action is disclosed, or leave the proceedings on foot so as to give the plaintiff yet another chance to formulate a pleading which is in an acceptable form.
On the last occasion, the Court declined to take the step of dismissing the proceedings (see the earlier judgment at [24]-[28]). Instead, a further period of 2 months was given to the plaintiff to serve a proposed pleading. It was observed in the earlier judgment that the opportunity given to formulate an acceptable pleading that discloses a reasonable cause of action against the defendant "should realistically be considered to be a final chance". The plaintiff was urged to seek the assistance of a solicitor, without delay. The plaintiff had told the Court on 2 August 2021 that she would try to obtain legal assistance from a lawyer if she was given a further opportunity to formulate a proper pleading.
Despite the further time given, the plaintiff remains self-represented in the proceedings and has failed to formulate a proper pleading. That was the plaintiff's third attempt, although it should be said in fairness that the Amended Statement of Claim, which was struck out on the last occasion, bears a reasonably close resemblance to the original Statement of Claim.
The plaintiff says that she has continued to make efforts to obtain the services of a solicitor. She states that two firms of solicitors have indicated to her that they would be prepared to assist if these proceedings are not dismissed. She says that she has gone as far as to sign a costs agreement with one of those firms.
However, I consider that in all the circumstances, and taking into account the overriding purpose and the dictates of justice as referred to in the Civil Procedure Act, dismissing the proceedings is on balance preferable to giving the plaintiff yet another chance to properly formulate her claim. The proceedings have been on foot since 17 April 2021. The defendant has already been put to considerable expense in the proceedings. A reasonable cause of action is yet to be disclosed, and it seems to me unlikely that a properly formulated claim will emerge if further time is given. Despite the statements made to the Court about obtaining legal representation, I have little confidence that this will eventuate, bearing in mind the statements made by the plaintiff on the earlier occasion and the fact that the Court urged the plaintiff to obtain legal assistance without delay.
I have taken into account the fact that a dismissal of the proceedings pursuant to UCPR r 13.4(1)(b) would not be a dismissal following a determination on the merits for the purposes of s 91(2) of the Civil Procedure Act. Accordingly, s 91(1) would operate so that the dismissal would not prevent the plaintiff from bringing fresh proceedings unless the dismissal was made subject to a term preventing that course. No such term was sought by the defendant and in any event I would not have been inclined to impose such a term. I also take into account that as the events the subject of the plaintiff's claim occurred in the 1980s (i.e. more than 30 years ago) it seems unlikely that any applicable limitation period that had not expired before the commencement of these proceedings on 17 April 2021 will soon expire, before any fresh proceedings are able to be commenced. I note in this regard that the plaintiff contends that the facts relevant to her claim against the defendant did not become known to her until 2019 or even 2021.
Of course, if fresh proceedings were to be commenced, the plaintiff might need to pay the defendant's costs of these proceedings in order to avoid having the fresh proceedings stayed (see UCPR r 12.10). I do not think that this would likely cause any injustice to the plaintiff. The defendant's costs of these proceedings can be fairly described as wasted.
The Court will therefore make the following orders: 1. that the proceedings be dismissed pursuant to UCPR r 13.4(1)(b); and 2. that the plaintiff pay the defendant's costs of the proceedings (including its costs the subject of Order 4 made on 2 August 2021).

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 December 2021

Trade Practices Act 1974(Cth)

At a glance

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Judgment (5 paragraphs)

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