Ward v Westpac Banking Corporation Limited

Consideration

The starting point is to consider the effect of the dismissal of the ASC. This arises in the context of the submission made at various points by Ms Cox and Westpac that to permit the defence would be to permit an abuse of process by frustrating the order for payment of security and the consequential dismissal for want of payment of that security.
The plaintiffs rejected this argument on the basis that an analysis of s 91 of the Civil Procedure Act, 2005 (NSW) (CPA) demonstrates that they were not precluded from bringing further proceedings despite the dismissal of the ASC: 91 Effect of dismissal of proceedings (1) Dismissal of - (a) any proceedings, either generally or in relation to any cause of action, or (b) the whole or any part of a claim for relief in any proceedings, does not, subject to the terms on which any order for dismissal was made, prevent the plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings. (2) Despite subsection (1), if, following a determination on the merits in any proceedings, the court dismisses the proceedings, or any claim for relief in the proceedings, the plaintiff is not entitled to claim any relief in respect of the same cause of action in any subsequent proceedings commenced in that or any other court.
It was contended that dismissal of a claim under r 42.21(3) Uniform Civil Procedure Rules 2005 (NSW) (UCPR) does not involve a determination on the merits of the proceedings in accordance with s 91(2) of the CPA. I accept the same is true where (as here) the dismissal was in the inherent jurisdiction. The Court's order on 18 August 2023 also did not contain any express restraints on the plaintiffs from commencing new proceedings on a claim pleaded in identical or similar terms to the dismissed ASC. Therefore, the plaintiffs submitted, one possible course of action available to them was to commence new proceedings for the same relief as in the ASC.
The consequence of this conclusion was said to be that to the extent Ms Cox and Westpac submitted that allowing elements of the ASC to be used as a defence would frustrate the effect of the dismissal and therefore undermine the function of r 42.21(3) UCPR to enforce payment of security, no such issue of principle arises. A dismissal for failure to provide security, without any further order, does not preclude the pleaded claims being relitigated in fresh proceedings.
In my opinion, even if the plaintiffs are correct about being able to commence fresh proceedings - in which they would necessarily be bringing an affirmative case with consequential declarations and orders - that does not say anything about what they can do in these proceedings, in circumstances where it is their ASC in these proceedings that has been dismissed.
Furthermore, the plaintiffs' reliance on this argument leads to both circularity and a further independent difficulty. The circularity is that any fresh proceedings would presumably be met with another application for security for costs. Even before that occurred, the independent difficulty was identified by Westpac in its supplementary submissions: UCPR r 12.10 would hinder the plaintiffs from being able to prosecute fresh proceedings. This rule provides: 12.10 Stay of further proceedings to secure costs of proceedings dismissed If - (a) as a consequence of the dismissal of proceedings, a party is liable to pay the costs of another party in relation to those proceedings, and (b) before payment of the costs, the party commences further proceedings against that other party on the same or substantially the same cause of action, or for the same or substantially the same relief, as that on or for which the former proceedings were commenced, the court may stay the further proceedings until those costs are paid and make such consequential orders as it thinks fit.
Given the history of these proceedings, it is difficult to see why the Court would not stay any fresh proceedings pending satisfaction of the costs order made on 18 August 2023. In any event, even just the prospect of further security for costs applications or a stay pending payment of existing costs orders demonstrates that the theoretical prospect of fresh proceedings is of no assistance (whether as a matter of principle or discretion) in determining what the plaintiffs are entitled to do in answer to the CC in these proceedings.
Alternatively, objection was raised to the inclusion of elements of the ASC in the defence and draft defence which are actually a claim which should properly be pleaded in a statement of claim or, perhaps more relevantly for present purposes, a cross-claim brought in conjunction with a defence. This issue turns on the distinction between what is properly considered a defence as opposed to a claim.
Rule 6.3 of the UCPR specifies when a statement of claim is required: 6.3 Where statement of claim required (cf SCR Part 4, rule 2) Proceedings of the following kinds must be commenced by statement of claim - (a) proceedings on a claim for relief in relation to a debt or other liquidated claim, (b) proceedings on a claim for relief in relation to a tort, (c) proceedings on a claim based on an allegation of fraud, (d) proceedings on a claim for damages for breach of duty (however arising) and the damages claimed consist of or include - (i) damages in respect of the death of any person, or (ii) damages in respect of personal injuries to any person, or (iii) damages in respect of damage to any property, (e) proceedings on a claim for relief in relation to a trust, other than an express trust wholly in writing, (f) proceedings on a claim for possession of land, (g) proceedings on a claim for relief under the Property (Relationships) Act 1984, (h) proceedings on a claim for relief in relation to the publication of defamatory matter, (i) proceedings for an order under section 106 of the Industrial Relations Act 1996 that a contract is unfair, (j) proceedings on a claim for a civil penalty under section 357 of the Industrial Relations Act 1996, (k) proceedings on a claim for remuneration or other amounts under Part 2 of Chapter 7 of the Industrial Relations Act 1996.
In accordance with r 1.2 UCPR, the definition for 'claim for relief' as defined in s 3 CPA must be read into UCPR r 6.3. 3 Definitions (1) In this Act - …. claim for relief includes - (a) a claim for possession of land, and (b) a claim for delivery of goods, and (c) a claim for the recovery of damages or other money, and (d) a claim for a declaration of right, and (e) a claim for the determination of any question or matter that may be determined by the court, and (f) any other claim (whether legal, equitable or otherwise) that is justiciable in the court.
UCPR r 6.12(1) requires a statement of claim or summons specifically to state the relief claimed by the plaintiff. The dictionary of the UCPR notes that 'relief' includes remedy. It is clear that the rules intend that any pleading which requires a remedy in relation to the matters listed in r 6.3 should be outlined in a statement of claim and not a defence.
In my respectful opinion, whether something is a claim required to be in a statement of claim or is solely a matter for a defence is to be assessed as a matter of substance and not just form. This case is an example of why this must be so. Read as a whole the draft defence involves claims of debt, fraud, trust and possession of land (engaging r 6.3(a), (c), (e) and (f)) and would require relief including for possession and declarations of right (s 3(1)(a) and (d) CPA), but which are presented in the pleading as nothing more than assertions.
The vice in the plaintiffs' position may be demonstrated by a simple thought experiment. If what they assert in the draft defence is correct, then they are entitled to possession of the properties (among other things). It would be inconceivable as a matter of law and practice for that conclusion to be reached without relief to give effect to that conclusion being sought and granted. Otherwise the true ownership of the properties would be left unresolved and, importantly, the register left in a state where it did not reflect the correct position as determined by the Court after a contested hearing. How, for example, could the plaintiffs then deal with the properties of which they had demonstrated they were the true owners? As it presently stands the draft defence could be aptly described by Alexander Pope's phrase of being "willing to wound and yet afraid to strike" because to strike would demonstrate the true character of the defence as requiring positive relief to the effect of that sought in the ASC.
The clearest example of the phenomenon referred to in the preceding paragraphs is this part of the draft defence (I have included the deletions made by the plaintiffs - see [22] above): 68. In further defence against the whole of the FXC, each Cross-Defendant herein pleads as follows. 69. He denies that Westpac was entitled to possession of the Lovedale Property as against Mahommed or Ward by reason of the matters referred to in Table "A" hereto. 70. He denies that Westpac was entitled to possession of the Maitland Property as against Mahommed or Ward by reason of the matters referred to in Table "B" hereto. 71 Ward claims in the ASoC and for the purposes of this Defence that he is entitled to possession of the Lovedale Property respectively as against Westpac, Mahommed and Cox as Administratrix of the Dixon Deceased Estate by reason of or under: (a) the Loan Facility Agreement and Mortgage Security held by Ward from Mahommed, Dixon and Loire dated 31 July 20017, as varied on 08 January 2018; (b) the matters referred to in Table "C" below: (c) The failure of Dixon to repay the moneys secured or cure events of default under the Ward LFA and Mortgage, as varied pursuant to the said Notice dated 12 January 2018 served contemporaneously and personally by Ward upon Dixon at the Lovedale Property; (d) the occurrence of other events of default, including non payment of any secured moneys upon maturity of the Loan Term under the Ward LFA; (e) under the Default Notice issued by Ward to Dixon IPC under the Ward Loan Security and ss. 109-111 of the Conveyancing Act 1919 on or about 12 January 2018; (f) the failures of Dixon IPC to comply with that said Default Notice: (g) under s. 60 of the Real Property Act 1900 and 109 and 111 of the Conveyancing Act 1919, respectively; (h) because any alleged interest of Westpac was postponed to the said security interest of Ward by reason of the statutory contraventions, unconscionable, conspiratorial and fraudulent conduct of Westpac referred to in Table "A" hereto (i) because Westpac has no interest in the Lovedale Property by reason of the matters referred to in paragraphs 02-38 herein and in Table "A" hereto and as pleaded in the ASoC; (j) any cause of action of Cox in her said capacity is extinct or barred under s. 14: (k) issuance to him of Notices to Occupiers (UCPR Form 5) by Westpac in respect of the Lovedale Property on 24 March 2021 and 02 May 2021. 72. Mahommed claims in the ASoC and for the purposes of this Defence that he is entitled to possession of the Lovedale Property respectively as against Westpac and Cox as Administratrix of the Dixon Deceased Estate by reason of or under: (a) the fact that Mahommed is ATF the LRUT; (b) pursuant to the Application for Transfer to new Proprietor executed by Dixon lPC in favour of Loire ATF the LRUT on 3 July 2017; (c) because Westpac has no interest in the Lovedale Property by reason of the matters pleaded in paragraphs 02-38 herein and in Table "A" hereto; (d) because Westpac has no interest in the Lovedale Property by reason of the matters pleaded in paragraphs 19-93, 104-106, 110-172 and 190, 208 of the ASOC (e) because any interest of Westpac was postponed to the interest of Mahommed by reason of its said statutory contraventions, unconscionable, conspiratorial and fraudulent conduct of Westpac referred to in Table "8'' hereto; (f) as against Cox in her said capacity by reason of the matters pleaded in paragraphs 82 89 of the ASoC; (g) any cause of action of Cox in her said capacity is extinct or barred under s. 14; (h) issuance to him of Notices to Occupiers (UCPR Form 5) by Westpac in respect of the Lovedale Property on 24 March 2021 and 02 May 2021. 73. Mahommed claims in the ASoC and for the purposes of this Defence that he is entitled to possession of the Maitland Property respectively as against Westpac and Cox as Administratrix of the Dixon Deceased Estate by reason of: (a) as he is the sole beneficiary under the GFT; (b) pursuant to the Application for Transfer to new Proprietor executed by Dixon IPC in favour of Rane on 11 September 2015; (c) because Westpac has no interest in the Maitland Property by reason of the matters pleaded in paragraphs 39-67 herein and in Table "B" hereto; (a) (c)(1) because Westpac has no interest in the Lovedale Property by reason of the matters pleaded in paragraphs 94 106, 110 172 and 190 208 / the ASoC; (d) because any interest of Westpac was postponed to the interest of Mahommed by reason of its said unlawful, unconscionable, conspiratorial and fraudulent conduct of Westpac referred to in Table "8" hereto; (e) any cause of action of Cox in her said capacity is extinct or barred under s. 14; (f) issuance to him of Notices to Occupiers UCPR Form 5) by Westpac in respect of the Maitland Property on 24 March 2021 and 02 May 2021.
The use of the expression in paragraphs 71, 72 and 73 of "for the purposes of this defence" cannot disguise the fundamentally positive claim being made of entitlement. Such a claim of right to property cannot just be made for a defence without some positive legal consequence. This may be contrasted with, for example, a defendant to a claim in trespass pleading a defence of licence from the owner. This may invite, but does not necessarily require, a cross-claim by the defendant seeking a declaration in relation to the licence.
Furthermore, the deletion, for example, in paragraph 72(d) of the references to the ASC demonstrates the ineffectiveness of such an approach which gives primacy to form over substance. What is left is a pleading liable to being struck out as a conclusion which is asserted without the material facts upon which it is based.
If the analysis in paragraphs [36] to [44] is correct, it forms part of the basis for the Court's fundamental conclusion in the exercise of its inherent jurisdiction that to permit the defence or the draft defence to stand would be an abuse of process. However, that conclusion, to which I now turn, does not depend on the correctness of that analysis.
For the reasons which follow, the Court has concluded that for the plaintiffs to maintain their defence to the CC or to propound the draft defence would be an abuse of process insofar as it involves an assertion of an in rem claim to the properties superior to that of Westpac, including a claim to possession (including, presumably if it came to it, to the proceeds of sale of the properties), or otherwise seeks to defeat Westpac's indefeasible position as registered mortgagee of the properties with a right to a money judgment and the proceeds of sale. The abuse is that to permit those claims would be to circumvent the Court's process as given effect by both the making of the order for security for costs in respect of the ASC and its subsequent dismissal for failure to provide the security.
It is trite law that the categories of abuse of process are not closed. A party's assertion of a claim may be an abuse of process even if that party has a prima facie case or must be assumed (or in this case has been assumed) to have a prima facie case: Williams v Spautz (1992) 174 CLR 509 at 522, 532; [1992] HCA 34. I respectfully adopt the approach set out by Gageler J (as the Chief Justice then was, and there considering the bringing of successive proceedings) derived from dicta of Lord Bingham that whether something is an abuse of process is ultimately a normative judgment in each case which requires a merits-based judgment which takes account of the public and private interests involved and also takes into account all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the Court: UBS AG v Tyne (2018) 265 CLR 77 at [67] to [72].
In this case, the making of the security for costs order (based on an assessment that the ASC was oppressive) and the subsequent striking out of the ASC represent a determination by the Court that Westpac and Ms Cox should not be vexed by the plaintiffs' allegations without the protection of security for costs. The private interest engaged is that to permit those allegations to be advanced through the defence would be to permit the oppression which the security for costs order sought to ameliorate. The public interest that would be defeated if the allegations are advanced through the defence or draft defence is that the timely and efficient administration of justice would be defeated by permitting the ventilation of allegations foreclosed to the plaintiffs by the dismissal of the ASC for failure to provide security: UBS at [72].
Even assuming (contrary to the conclusion expressed in [40] and [41] above) that the plaintiffs' central allegations of entitlement to the properties against Westpac's otherwise indefeasible rights could properly be brought in the defence or draft defence, to do so would for the reasons I have given be to misuse or abuse the right to maintain a defence in this case because it would circumvent the Court's orders for security in respect, and dismissal, of the ASC. It would be to permit by the back door what has been forbidden through the front door.
I have already noted that the ASC is prolix and difficult to understand. The defence and draft defence are similarly not always easy to follow. I accept that some of the pleas and averments in the defence and draft defence are properly matters for a defence. However, in my view it is not practicable, or consistent with the Court's conclusions or the overriding purpose under the CPA, to attempt to pick through the defence or draft defence to see what might survive as purely and properly defensive. The overall burden of the defence and draft defence is to seek to make out an in rem claim to the properties superior to that of Westpac, including a claim to possession (including, presumably if it came to it, to the proceeds of sale of the properties), or otherwise to defeat Westpac's indefeasible position as registered mortgagee of the properties with a right to a money judgment and the proceeds of sale.
In the exercise of its inherent jurisdiction, the Court can be flexible in fashioning relief that does justice between the parties. For the reason identified in the previous paragraph, the only practical course is to strike out the entire defence and, insofar as it may be necessary, confirm that I would not grant leave to replead by filing the draft defence, or allow any further opportunity in that regard. However, I have been deliberate in how I have described what constitutes the abuse: to assert an in rem claim to the properties superior to that of Westpac, including a claim to possession (including, presumably if it came to it, to the proceeds of sale of the properties), or otherwise to defeat Westpac's indefeasible position as registered mortgagee of the properties with a right to a money judgment and the proceeds of sale.
It may be that some of the claims in the ASC and the draft defence fall outside the abuse. The Court accepts that any such claims could, subject to the possibilities identified in [34] above, be the subject of fresh proceedings against the estate or Westpac. Whether the plaintiffs contend that there are such claims and wish to commence fresh proceedings in relation to them is a matter for the plaintiffs. For present purposes it is sufficient that the Court acknowledges the possibility, but it is not part of its present task to identify what they might be.

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