National Australia Bank v Priestley (No 2) [2012] NSWSC 508

Supreme Court New South Wales

Medium Neutral Citation: National Australia Bank v Priestley (No 2) [2012] NSWSC 508 Hearing dates: 10 May 2012 Decision date: 17 May 2012 Jurisdiction: Common Law Before: Schmidt J Decision: Leave sought is refused. Catchwords: PROCEDURE - pleadings - leave sought to file further amended defence - leave refused - reasons for decision - deficiencies of the earlier amended defence not addressed - proposed pleadings - proposed amended defence embarrassing Legislation Cited: Farm Debt Mediation Act 1994 Uniform Civil Procedure Rules 2005 Cases Cited: Gunns Limited v Marr [2005] VSC 251 McGuirk v The University of New South Wales [2009] NSWSC 1424 Mummery v Irvings Pty Ltd [1956] HCA 45; (1956) 96 CLR 99 National Australia Bank v Priestley [2012] NSWSC 387 Northam v Favelle Favco Holdings Pty Limited (Supreme Court of New South Wales, Bryson J, 7 March 1995, unreported) Category: Procedural and other rulings Parties: National Australia Bank Limited ABN 12 004 044 937 (Plaintiff) Christopher William Priestley (First Defendant) Claire Priestley (Second Defendant) Representation: Counsel: Mr D Sulan (Plaintiff) Solicitors: DibbsBarker Lawyers (Plaintiff) Pryor Tzannes & Wallis Solicitors (Defendants) File Number(s): 2011/292621 Publication restriction: None

Judgment 1On 12 April 2012 the defendants were refused leave to file an amended defence (see National Australia Bank v Priestley [2012] NSWSC 387). By a further motion filed on 8 May 2012 they sought leave to file an amended defence in different terms. The leave sought was opposed by the plaintiff, whose position was that the amended pleading did not address the deficiencies in the earlier proposed pleading dealt with in the 12 April judgment. I accepted that submission and refused the further leave sought. 2These are the reasons for that refusal. 3As I discussed in the 12 April judgment, leave will not be given to a party to rely on pleadings which are embarrassing because they don't comply with the requirements of the Uniform Civil Procedure Rules 2005 as to the pleading of material facts sufficient to constitute a cause of action; or because facts are couched in such a way that they leave difficulties or doubts about recognising or piecing together what is being referred to; or because allegations are made at such a level of generality that the plaintiff is not put on notice of the case which will have to be met. The pleadings have to be in such a form that the issues lying between the parties can be identified, that being crucial to the later admission of evidence at the hearing. Only evidence relevant to what is in issue in the proceedings is admissible. In the case of a defence, what is pleaded must show that there is a defence to the claim advanced in the proceedings. 4The redrafted defence sought to address the deficiencies of the earlier amended defence, but still did not satisfy these requirements. It is sufficient to give several illustrations of the ongoing difficulty. 5The redrafted defence alleged that the loan document and memorandum of mortgage comprised only the written part of the complete agreement between the parties, with some terms being partly oral and partly implied. Particulars of the additional terms were provided in paragraphs 4A to J and particulars of breach of these terms were given in paragraph 35. 6The term pleaded in paragraph 4B was: "B. That the plaintiff would actively assist the defendants in achieving the earning of income from the subject land sufficient to satisfy the servicing of the loan" 7The particulars by which the claimed term was supported were: "Oral representations made at the meeting between Chris Cullen, Lisa Stockpool, Claire Priestley and Chris Priestley and Greg Shaw of Taylor Byurne Valuers at Salt Glen on or about 03 August 2004. At this meeting, Chris Cullen said words to the following effect: "We have the necessary expertise to provide you the advice which you will require to meet the income budget. We have a number of experts who will assist you with budgeting, planning" Greg and Lisa took the budgets and said "we will let you know how we can help." 8A statement by someone, presumably a bank employee, that the plaintiff had necessary expertise to provide the defendants advice which they would require 'to meet income budget' and that the plaintiff had experts available to assist with budgeting and planning, cannot provide the foundation for the implication of a term that the plaintiff would 'actively assist the defendants in achieving the earning of income from the subject land sufficient to satisfy the servicing of the loan'. There is no suggestion that such assistance with the servicing of the loan was even discussed. 9The Rules require that the effect of spoken words relied on must be stated. What is stated in this particular and attributed to the plaintiff, does not concern the plaintiff taking any steps to assist the defendants achieve income sufficient to service the loan. Nor does the statement that two other people, identified to be from Taylor Byurne Valuers, whose connection, if any with the plaintiff, is not specified, are claimed to have taken budgets and said 'we will let you know how we can help'. What is relied on provides no basis for the implication of the alleged term. 10The breach alleged of this term was: "(ii) Addition Term B: the plaintiff has breached the term by: a. Refusing to allow the defendants to enter into forward sales agreements for the sale of wheat: b. Refusing to assist to finance the 2010 wheat and cotton crops. c. Claiming $1millon off the 2010 wheat crop that they refused to finance and unworkable farm debt mediation obligations on this crop such as harvest agreement. d. Refusing to assit(sic) in the 2011 and wheat and cotton crops." 11The defence makes no claim, however, that the defendants required the plaintiff's consent to enter into forward sales agreements; that such agreements were reached and if they were, with whom and when; or that such consent was sought, and if so when; or when it was refused. This particular, like many others, is couched in such a way that it cannot be considered to have satisfied the requirements of the Rules. As Bongiorno J observed in Gunns Limited v Marr [2005] VSC 251, at [57]: "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." 12In paragraph H the term claimed is: "H. That the plaintiff would act essentially as an "equity partner" in relation to the farming enterprise, with all of the fiduciary obligations which arise from such a relationship." 13The particulars provided are: "Oral Representations made at the meeting between Chris Cullen, Lisa Stockpool, Claire Priestley and Chris Priestley on or about 03 August 2004. At this meeting, Chris Cullen said words to the following effect: "I can see the development potential here with another cotton field and possible water storage. We could look(sic) funding all of the improvements that you have to be carried out. We will advice(sic) you on the best things that you can do to advance your business." 14The breach alleged was: "(viii) Additional Term H: the plaintiff has breached the term by: a. Refusing to return the interest rates to the normal rate at the Farm Debt Mediation;" 15The effect of the words alleged to have been spoken can not conceivably prove a basis for a finding that an agreement was reached that the plaintiff would act as an equity partner in the defendants' business, owing them fiduciary obligations. The breach alleged refers to the stance taken by the plaintiff in mediation proceedings under the Farm Debt Mediation Act 1994. It is difficult to see that a refusal in such a mediation to renegotiate the terms of the loan and mortgage which the parties had agreed, could conceivably involve a breach of an agreement that the plaintiff would act as an equity partner in the business, even if the words relied on could provide a foundation for the additional term claimed. 16This aspect of the defence, like many others, is ambiguous and couched in vague and general terms. It does not provide relevant particulars as required by Rule 15.1. As Johnson J discussed in McGuirk v The University of New South Wales [2009] NSWSC 1424 at [149] by reference to what Bryson J said in Northam v Favelle Favco Holdings Pty Limited (Supreme Court of New South Wales, Bryson J, 7 March 1995, unreported) at 5-6: "what is referred to must be clearly stated showing, as appropriate, when and where an event happened, who participated, what was said, what was the relevant effect of any document and so forth". 17The purpose of particulars is to confine the scope of the litigation (see Mummery v Irvings Pty Ltd [1956] HCA 45; (1956) 96 CLR 99). It is evidence in relation to the claim, as particularised, which may be led at the hearing. The proposed amended defence was embarrassing. It did not disclose the matters which the Rules require be pleaded. In the circumstances, the further leave sought also had to be refused.