Westpac Banking Corporation v Bullock [1997] FJHC 115; Hbc0181d.96s (22 August 1997)

Fiji Islands - Westpac Banking Corporation v Bullock - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

CIVIL JURISDICTION

CIVIL ACTION NO. 181 OF 1996

BETWEEN:

WESTPAC BANKING CORPORAbr> Plaintiff

AND:

JOHN BULLOCK
Defendant

Mr. M. Young for the Plaintiff
Mr. R. Naidu for the Defendant

DECISION

By summons dated 12 November 1995 the Plaintiff is seeking Orders as follows:

(i) that summary jnt be entered in favour of the Plaintiff against the defendefendant; or

(ii) that the Statemf Defence be struck out on the grounds that it is frivolousolous and vexatious or that it discloses no reasonable defence and that the Plaintiff be at liberty to enter judgment against the defendant as sought in the Statement of Claim; and

(iii) that the Defendant pay the Plaintiff's costs of this application at $1000.00.

Background

The Writ of Summon issued on 22 April 1996 claiming the sum of $19,599.76 together with interest under a guar guarantee.

The Statement of Defence was fin 30 August 1996 and an order on Summons for Directions was made on 9 October 1996.

Plaintiff's contention

The Plaintiff/Applicays that the defendant has no defence to the claim. In his affidavit filed on 8 April 1997, 997, PRADEEP LAL who holds the position of Manager Legal with the Plaintiff Bank sets out the practice and procedure before documents are executed. He says that he is "satisfied that the nature and effect of the Guarantee and of signing the Guarantee was explained to the Defendant to his satisfaction before he signed the document".

Defendant's contention

The defendant has pleaded non est factum. He s that he is indebted to the Plaintiff in the sum claimed omed or in any sum at all. He states that he "believed that I was being asked to sign these documents as a Director of the said Company and not in my personal capacity". He says that "at no time was I explained the legal nature and effect of the said documents". The defendant maintains that there are triable issues and complains that "some 4 months after the filing of Acknowledgment of Service" and "some 2 months after the Statement of Defence had been filed and served" that this Summons was filed by the Plaintiff's solicitors.

The Defendant is asking the Court to dismiss the Summons.

Consideration of the issue

I have considered the subons made by counsel.

1"> There is no doubt that the facts are in dispute. In item 3 of his affidavit the defendant stated:

That as to the signing of the guarantee dated 24 October 1991, I was told by a Bank offi officer with Westpac Banking Corporation, Nadi that the loan to Roaring Thunder Co Ltd had been approved and he told me to sign the loan documents. That I was a director of the said Company and believed that I was being asked to sign these documents as a Director of the said Company and not in my personal capacity.

He further stated that he misunderstood the nature of the document which he was "asked" to sign by a Bank Officer with the Plaintiff.

Order XIV

The defendant's plea of non est factum does raise a number of triable s. The Plaintiff is asking king for summary judgment under Order 14 which provides (in so far as it is relevant):

"1. - (1) Where in an action to which this rule applies a statement of claim has bees been served on a defendant and that defendant has given notice of intention to defend the action, the plaintiff may, on the ground that that defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part except as to the amount of any damages claimed, apply to the Court for judgment against that defendant."

It is my view that summargment cannot be entered on the facts of this case because there are triable issues. The fole following passages from the judgment in POWSZECHNY BANK ZWIAZKOWY W POLSCE v PAROS (1932) 2 K.B. 353 are worth noting in this regard:

At p.359 GREER L.J s/span>

"It has long been the rule that in proceedings under Order XIV, what the Court, whether this Court or the King's Bench Division, has to ascertain is whether there is a triable issue. If there is, no matter how strongly the Court may anticipate that it will be decided in the plaintiff's favour, it must order a trial."

He goes on to say that:

"All the defendant need say is that he requires the plaintiff to prove hive his case, and the law puts upon the plaintiff the onus of proving it. When the defendant says he does not admit the claim he need not carry the case any further than to say: 'There is a triable issue and I want to have it tried'."

Great care should be exercised in granting summary jnt and should not be exercised unless there is no real ques question to be tried (FANCOURT v MERCANTILE CREDITS (1983) HCA 25; (1983) 154 CLR 87 at 99; THESEUS EXPLORATION N Z v FOYSTER (1972) 125 CLR 507).

On the purpose of Or 14, the following passage from the ent of PARKER L.J. in HOME and OVERSEAS INSURANCERANCE CO. LTD v MENTOR INSURANCE CO (UK) LTD (in liq) (1989) 3 All E.R. 74 at 77 is pertinent:

"The purpose of Ord 14 is to enable a plaintiff to obtain a quick judgment where there is plainly no defence to the claim. If the defendant's only suggested defence is a point of law and the court can see at once that the point is misconceived the plaintiff is entitled to judgment. If at first sight the point appears to be arguable but with a relatively short argument can be shown to be plainly unsustainable the plaintiff is also entitled to judgment. But Ord 14 proceedings should not in my view be allowed to become a means for obtaining, in effect, an immediate trial of an action, which will be the case if the court lends itself to determining on Ord 14 applications points of law which may take hours or even days and the citation of many authorities before the court is in a position to arrive at a final decision".

Also on the affidavit evidence before me I am satisfied that judgment shnot be entered against the the defendant after bearing in mind the principles as to the burden of proof as stated by THOMAS J in HIBISCUS SHOPPING TOWN PTY LTD v WOOLWORTHS (Q'LAND) LTD [1993] NTSC 21; (1993) 113 FLR 106 at 109. He said:

"The legal burf proof is borne by the plaintiff throughout the application, however when he has establishblished a prima facie right to an order, a "persuasive" or "evidential" burden shifts to the defendant to satisfy the court that judgment should not be given against him:" see Australian & New Zealand Banking Group v David [1991] NTSC 74; (1991) 105 FLR 403; 1 NTLR 93.

Plea of non est factum

1"> As stated above, the defendant has raised tha of non est factum. As to whom this plea is available has has been stated in HALSBURY Vol 12 4th Ed. para 1365 thus:

"The plea of non est factum, or nient son fait, is that by which a man sought tght to be charged in some action or proceedings upon a writing alleged to have been sealed and delivered by him avers that it is not his deed. This plea is only available where the party sued can show either that there never has been, or that there is not existing at the time of the plea, any valid execution of the deed on his part. If a man, taking reasonable care has nevertheless been induced by the machinations of some other person (whether a party or a stranger to the deed) to execute a deed under a substantial mistake (not merely as to tgal effect ofct of known contents of the deed) such that he believed it to be fundamentally different in substance or in kind frat it was, so that when he executed it his mind did not accompany his outward act, he may pmay plead that for this reason the deed is not his deed, and if this plea is established by the evidence, the deed will be altogether void from the beginning. A deed so procured is no more the deed of the person who was thus induced to execute it than is a forged deed."

The Defendant hated his allegations in the form of an affidavit. It is a serious allegation that the documdocuments he signed were not what he understood them to be. He is a pilot; he said that he "never had occasion to sign or give a guarantee before and did not understand the nature of the liability under a guarantee and its legal effect." He is not an illiterate person. He could have read the documents himself and taken necessary precautions before executing them. As stated in HALSBURY Vol. 12 (ibid) para. 1366:

"A person raising a plea must have taken such precautions as he reasonably could, and must prove that he took reasonable care as well as proving all the other circumstances necessary to found the relief. Normally, a blind or illiterate person must have had the deed read over or fully explained to him before execution, and a person of full capacity can only establish the plea in very exceptional circumstances." (underlining mine for emphasis).

p class=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> However, without a trial of the issue raised by the defendant it would be cult to say what the true prue position was in regard to the defendant's complaint although it would appear that he cannot avoid liability on a plea of non est factum. In the footnote No. - '10' to HALS. (ibid) para 1366 it is stated that "a person who looks through an agreement and signs it, although he says he does not understand it, cannot avoid liability on a plea of non est factum because it does not carry out a prior verbal agreement: BLAY v POLLARD AND MORRIS (1930) 1 K.B. 628 C.A."

The dent says that he was "not explained the legal nature and effect" of the saie said document by which evidently he means that it was not read over to him. On the aspect of "reading over" it is pertinent to note the following passage from HALS (ibid) para. 1330:

"Before a party executes a deed, it should be read by him, or cory read over or fully and acnd accurately explained to him, and he cannot be required to execute it until this has been done. If he is content to execute it without so informing himself of its contents, it will in general be binding on him, even though its contents are materially different from what he supposed, and even though he is himself illiterate or blind. However, if the party executing the deed acts with reasonable care and yet is mistaken or misled (in particular, if he is illiterate or blind and it is falsely read over or falsely explained to him), and in consequence there is radical or fundamental distinction between what it is and what he believed it to be, not attributable to a mistake of law as to its effect, the plea of non est factum will be available and the deed will be void. Even though all the requirements for avoiding the deed on this ground may not be fulfilled, a misled executing party may be able to treat the deed as voidable under the law relating to misrepresentation, or it may be void as executed under a mutual mistake of fact."

p class=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> Conclusion

The powers of court on the hearing of an application under Or e set out in Or 14 r.3 which provides, inter alia:

ass=MsoNormal stal style="margin-left: 36.0pt; margin-top: 1; margin-bottom: 1"> "3. - (1) Unless on the hearing of an applicatnder rule 1., either the Cohe Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed."

To sum up, bearing in mind the affidavit evidence before me, considering the Rules and the authorities I find that the essential facts remain in dispute and there is also a question of law involved as a result of the plea of non est factum. There is an arguable defence. Whilst I say this I still think that the defendant will have an uphill battle trying to satisfy the Court in regard to his mistaken belief as to the documents which he executed and matters pertaining thereto.

In the circumstances of this case, I wo what BYRNE J did in WESTPAC BANKING CORPORATIONATION and RICHARD CARDO SLATTER & RICHARD MARK SLATTER (Action No. 451/95) where a similar situation arose as in this case raising a similar issue in which incidentally the same defendant was a guarantor. This is what his Lordship said and ordered:

p class=MsoNormal stal style="margin-left: 36.0pt; margin-top: 1; margin-bottom: 1"> "Obviously the credibility of the Defendanin issue here as of course urse may also be that of the Plaintiff. For these reasons and despite the reservations I have expressed I consider that it would be unfair to strike out the Defendant's Defence at this stage but I also consider that the Defendant must provide some tangible evidence of his sincerity in wishing to defend this action. I therefore order that within 14 days of the delivery of this judgment the Defendant pay into Court as security for the further prosecution of this action the sum of $15,000.00. If that is not done then the Plaintiff doubtless will have recourse to further action."

I find that the issue is case should not be finally resolved by me at this point but should proceed to trial. I tu I turn now to consider the appropriate form of the Order that I should make in this matter. In the circumstances of this case I will not make an order for summary judgment as proposed by the Plaintiff but will allow the defendant to defend conditional upon him paying into Court about half the amount claimed, namely, $10,000.00 (ten thousand dollars) as security for further prosecution of this action within 28 days of this Decision. Failure to do so will entitle the Plaintiff to take whatever appropriate action is available to it. The costs are to be costs in the cause.

p class=MsoNormal alal align=center style="text-align: center; margin-top: 1; margin-bottom: 1"> D. Pathik
JUDGE

At Suva
22 August 1997

Hbc0181d.96s