Supreme Court New South Wales Medium Neutral Citation: Combe v Bank of Queensland [2011] NSWSC 1347 Hearing dates: 26 October 2011 Decision date: 11 November 2011 Before: Schmidt J Decision: 1. The Summons filed on 10 November 2010 be struck out. 2. Leave to proceed on the proposed amended summons dated 30 August 2011 (marked MFI 1) be refused. 3. Leave to amend the summons in accordance with this judgment be granted. 4. Unless the parties approach within 7 days to be heard on costs, Ms Combe is to bear the Banks costs of the motions, as agreed or assessed. Catchwords: PROCEDURE - notices of motion - motion seeking to dismiss summons - summons not in proper form - summons struck out and leave to amend proposed amended summons refused - leave to amend summons on a limited basis - costs Legislation Cited: Civil Procedure Act 2005 Real Property Act 1900 Uniform Procedure Rules 2005 Cases Cited: Alliance Acceptance Co Ltd v Ellison (1986) 5 NSWLR 102 Jensen v Bank of Queensland [2011] NSWCA 71 Jensen v Bank of Queensland [2011] NSWCA 132 Jensen v Bank of Queensland Ltd [2011] HCASL 92 Gunns Limited v Marr [2005] VSC 251 Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1992) 174 CLR 407 Magar v Arab Bank Australia Ltd; Bournelis v Aldi Petroleum Pty Ltd [2010] NSWSC 553 Paula Jensen v Bank of Queensland Limited [2011] NSWCA 36 Paula Jensen v Bank of Queensland Limited [2011] NSWCA 37 Category: Procedural and other rulings Parties: Faye Diane Combe (Plaintiff) Bank of Queensland (Defendant) Representation: Counsel: Mr DJ Barnett Solicitors: In person (Plaintiff) DibbsBarker Lawyers (Defendant) File Number(s): 2010/373940 Judgment 1Ms Combe commenced these proceedings by summons filed in November 2010. In May 2011, the Bank filed a motion seeking orders dismissing the summons. In August 2011, Ms Combe filed a motion seeking leave to amend the summons, in terms then filed. The Bank opposed the leave sought in respect of that document, but finally did not dispute that Ms Combe should be given an opportunity to put the summons into proper form in relation to two matters. 2The proceedings have their genesis in events which led to possession proceedings being brought by the defendant Bank in this Court in 2009, in relation to a property located at Castle Hill. Ms Combe was not a party to those proceedings. Ms Combe, who claims to be a citizen of the Principality of Snake Hill, held two commercial leases over parts of that property, which she claims forms a part of the territory of the Principality. In each case the lease provided for a rent of $30 per year. It is not in issue that the Bank obtained possession of the property from the registered proprietors some time ago. It has since been sold. This judgment deals with the two motions which the parties have brought. 3Ms Combe is an unrepresented litigant. Her case is that one of the unregistered commercial leases which she held had a term of five years, and the other a term of three. In oral submissions she explained that she entered both leases in May 2009, in anticipation of the Principality of Snake Hill being granted country status by the UN. In written submissions she claimed that the Principality had come into existence in 2003. Ms Combe also claimed that she had earlier held other leases over the property. Ms Combe has no copy of such leases. She claims that those lease documents were at the Castle Hill property, amongst other of her property which the Bank did not return to her, after it took possession. 4Amongst other things, Ms Combe seeks to establish the existence of the Principality; to challenge the validity of the Bank's mortgage over the property; and to establish that it obtained possession of the property, contrary to her interests. She also wishes to advance arguments in relation to what she claims were irregularities in the conduct of the 2009 proceedings, to which she was not a party. She also seeks to challenge certain orders made in the possession proceedings. 5In those proceedings the Bank established that it held a registered mortgage over the property, which came into existence in 2005; that the loan secured by the mortgage had fallen into arrears; and that in the circumstances, it was entitled to take possession. Money orders, as well as orders of possession, were made in its favour, despite the case advanced against it by the registered proprietors, that the land in question formed a part of the Principality of Snake Hill, which had seceded from Australia. 6In July 2009, Hoeben J struck out the defence in the possession proceedings and in May 2010 Davies J gave a judgment which rejected an application that default judgment be set aside. Those orders were unsuccessfully appealed ( see Paula Jensen v Bank of Queensland Limited [2011] NSWCA 36 given on 24 February 2011 and Jensen v Bank of Queensland [2011] NSWCA 132 given on 6 May 2011). An application brought to the High Court for special leave to appeal from the Court of Appeal's judgments was dismissed (see Jensen v Bank of Queensland Ltd [2011] HCASL 92). 7The Bank also succeeded in obtaining further relief in relation to various caveats which had been lodged in respect of the property, including one lodged by Ms Combe. Orders in the Bank's favour were made by Gzell J in February 2011. This judgment was also appealed, ultimately with no relevant success (see Paula Jensen v Bank of Queensland Limited [2011] NSWCA 37 given on 24 February 2011 and Jensen v Bank of Queensland [2011] NSWCA 71 given on 25 March 2011 ). By orders then made, further caveats were precluded from being placed on the title, pending settlement of the Bank's sale of the property. The sale was later completed. 8The plaintiffs in these appeal proceedings were legally represented. From the matters to which Ms Combe deposed in her affidavit, while not a party to those proceedings, she was present and actively involved in the presentation of the plaintiffs' case. She had also earlier sought, but been refused leave to appear for the plaintiffs in the possession proceedings, before Davies J. Nevertheless, in these proceedings Ms Combe complains that she was not made a party to the proceedings and that orders were made to her detriment, without being given an opportunity to be heard. 9By way of the original summons filed in these proceedings, Ms Combe sought orders extending her caveat over the property; she sought that her rights under her 'current' commercial leases 'be accorded'; and that her goods be returned. 10At the hearing Ms Combe advised that she did not wish to press the first order sought in the original summons, but she did wish to pursue the other two. They, however, were not orders which appeared in the amended summons in respect of which she sought leave to proceed. In that proposed pleading Ms Combe sought orders in tort; in conversion; compensation for the loss of her personal goods; loss of legal rights in relation to the commercial leases; and compensation for negligence causing nervous shock. 11There is no question that leave to proceed on the proposed amended summons must be refused. It is not in proper form and does not comply with applicable requirements of the Court's Rules. The Bank accepted that Ms Combe should have an opportunity to put her pleadings in proper form, but not in the terms which she proposed. 12In the circumstances, I am satisfied that it is appropriate to order that the existing summons be struck out and leave to amend in terms of the proposed amended summons be refused. If Ms Combe wishes to pursue claims against the Bank, the pleadings must be put in proper form. Neither the existing summons, nor the proposed amended summons is in such a form. I am satisfied, nevertheless, that Ms Combe must be given an opportunity to put on amended pleadings, but on a limited basis. 13Ms Combe must have leave to amend her summons in respect of the claims which she wishes to advance in relation to her personal property, which she claims that the Bank took, retained and eventually disposed of. She must also have leave to amend in relation to a claim of negligence causing personal injury. On the material it seems that she could conceivably have a cause of action in relation to these claims. I have also concluded however, that she may not have leave to pursue the claims which she seeks to press against the Bank in respect of her former unregistered commercial leases. The reason for this conclusion is as follows. 14Ms Combe does not claim that the leases on which she seeks to rely were ever registered, or that the Bank had any notice of them, at least before it sought possession of the property. In the judgment given by Gzell J, his Honour referred to the caveat lodged by Ms Combe over the property in September 2010, in reliance on her commercial leases, amongst various other caveats which others had lodged over the property. His Honour noted that on 10 November 2010, White J refused an ex-parte application made by Ms Combe in these proceedings for orders extending her caveat. 15In his judgment, White J found that the May 2009 commercial lease documents were not in registrable form. He refused to grant an extension of Ms Combe's caveat, concluding that she had no caveatable interest entitling her to priority over the Bank. Ms Combe did not appeal that judgment. 16Gzell J made orders preventing the Registrar General from accepting for lodgement any further caveats affecting the Bank's interest, pending the sale of the property. The Court of Appeal observed that the caveats which Gzell J had dealt with, had been lodged in respect of the property without specifying the estate or interest which was claimed to have been derived from the Bank, as the applicable Regulations required (see [24] - [26]). Even now there is no suggestion that Ms Combe ever had such an interest. 17The Court of Appeal took the view that the Court had power to make orders of the kind which Gzell J had made, but that the power should be exercised sparingly in cases where it limited a non-party's rights. That was an issue which arose to be considered, because Ms Combe and others who had repeatedly lodged caveats over the property, were not parties to the proceedings. 18While not being a party to these proceedings, Ms Combe was plainly on notice of what was there in issue. Not only had Ms Combe sought to appear for the plaintiffs in the possession proceedings when they were before Davies J and was present at the hearing of the appeal, in November 2010 White J directed that these proceedings should go before the Registrar at the same time as the possession proceedings and that they should be listed together for directions. Despite her claimed interest, Ms Combe took no steps to become a party to the possession proceedings, or to any of the appeal proceedings. 19The appeal from Gzell J was upheld in a very narrow respect, with the result that the Registrar General was precluded from accepting for registration any further caveats which would have prevented the settlement of the Bank's sale of the property. In these proceedings Ms Combe finally did not seek to press orders in relation to the filing of any further caveats, given that the property has been sold. 20The Bank's case that the claims Ms Combe now wishes to pursue in relation to the unregistered leases on which she wishes to rely disclose no cause of action, must be accepted. Section 53 of the Real Property Act 1900 provides: 53 Land under the provisions of this Act-how leased (1) When any land under the provisions of this Act is intended to be leased or demised for a life or lives or for any term of years exceeding three years, the proprietor shall execute a lease in the approved form. (2) (Repealed) (3) A right for or covenant by the lessee to purchase the land therein described may be stipulated in such instrument, and in case the lessee shall pay the purchase money stipulated and otherwise observe the lessee's covenants expressed and implied in such instrument, the lessor shall be bound to execute a transfer of the said land to such lessee. (4) A lease of land which is subject to a mortgage, charge or covenant charge is not valid or binding on the mortgagee, chargee or covenant chargee unless the mortgagee, chargee or covenant chargee has consented to the lease before it is registered. (5) Subsection (1) does not apply in relation to land the subject of a social housing tenancy agreement within the meaning of the Residential Tenancies Act 2010. 21Ms Combe attempted, but failed to establish before White J that she had a caveatable interest in the land. The Bank's sale of the property completed after the Court of Appeal's judgments. The High Court has since refused an application for special leave. Even if leases which post date a mortgage are registered, they are only binding on a mortgagee like the Bank if it consented to them before registration. Ms Combe does not suggest that any of the unregistered commercial leases granted to her by the former registered proprietors of the company were ones consented to by the Bank, or of which it was given any notice. An unregistered lease to which no consent is given cannot prevent a mortgagee from evicting a lessee in order to exercise its power of sale (see Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1992) 174 CLR 407 at 418; Alliance Acceptance Co Ltd v Ellison (1986) 5 NSWLR 102 at 107-108 and Magar v Arab Bank Australia Ltd; Bournelis v Aldi Petroleum Pty Ltd [2010] NSWSC 553). In the circumstances leave to amend in reliance on the commercial leases must be refused. 22In advancing claims in relation to the two matters in respect of which Ms Combe has been given leave, like any other litigant, Ms Combe must ensure that her amended pleadings adhere to the requirements of the Uniform Civil Procedure Rules 2005. For example, while pleadings ought to be brief (r 14.8.), they must disclose that Ms Combe has a reasonable cause or causes of action; they must include the material facts on which reliance is placed (r 14.7), as well as providing all necessary particulars of the claims which are pursued (r 15.1). Any claim in negligence must comply with the requirements of r 15.5. The pleadings must be sufficient to enable the Bank to put on a defence to each claim. Unintelligible, imprecise, ambiguous pleadings, which do not give proper notice of the substance of any claim, may not be permitted. As discussed by Bongiorno J in Gunns Limited v Marr [2005] VSC 251 at [57]: "It is not the function of the Court to draw or settle a party's pleading. The Court is confined to the function of ensuring that pleadings are within the rules and fulfil the functions for which they exist. In particular, it must ensure that one party is not placed at a disadvantage by the failure of another to provide a proper, coherent, and intelligible statement of its case. In this case, it would be unfair to the defendants to require them to plead to this amended statement of claim. It is embarrassing within the meaning of RSC r 23.02. Not only must the pleading inform the defendants of the case they must meet now, but it must clearly set out the facts which the plaintiffs must assert to make good their claim with sufficient particularity to enable any eventual trial to be conducted fairly to all parties. Vague allegations on very significant matters may conceal claims which are merely speculative. If this be not the case, the plaintiffs must put their allegations clearly. Finally, the trial judge must, in due course, have some firm basis for making rulings on relevance. This is a very substantial set of claims and any trial will be a very complex one. The Court must ensure that the only claims which go to trial are those which the plaintiffs are able to set out in a coherent and detailed form." 23It will be important for Ms Combe to adhere to these requirements, if she is not to face a further strike out application. Having in mind the requirements of the Civil Procedure Act 2005, particularly the obligation imposed on the Court by s 56, to give effect to the overriding purpose of the Act, namely to 'facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings', it ought to be observed that parties, even unrepresented litigants like Ms Combe, may not be given repeated opportunities to put their pleadings into proper order. Costs 24The usual order as to costs is that they should follow the event. Ms Combe's summons has been struck out and leave to amend in the terms she proposed has been refused. Ms Combe has been given a further limited opportunity to put on an amended summons in respect of two of her claims. In those circumstances the usual order would be one in favour of the Bank. Unless the parties wish to be heard on that question, in which event they should approach within 7 days, I will make such a costs order in respect of the competing motions. ORDERS 25For the reasons given, I order that: 1. The Summons filed on 10 November 2010 be struck out. 2. Leave to proceed on the proposed amended summons dated 30 August 2011 (marked MFI 1) be refused. 3. Leave to amend the summons in accordance with this judgment be granted. 4. Unless the parties approach within 7 days to be heard on costs, Ms Combe is to bear the Banks costs of the motions, as agreed or assessed. ********** 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: 11 November 2011