BNY Trust Company of Australia Limited v Rainford [2025] VSC 236

1. Pursuant to s 61 of the CPA, the plaintiff may make an application for summary judgment on the ground that the defendant's defence has 'no real prospect of success'. Subject to s 64, the Court may give summary judgment under s 63 of the CPA if it is so satisfied.
2. The test under s 63 of the CPA is whether the defence has a 'real' as opposed to a 'fanciful' chance of success.[2] The authorities urge caution, and that regard be given to the overarching purpose under the CPA, when exercising the power to terminate a proceeding summarily given, in consequence, the party against whom summary judgment is given will be deprived of the chance to pursue their claim or defence.[3] Courts should only exercise the power where it is clear that there is no real question to be tried.[4] Under s 64 of the CPA, even if a claim enjoys no real prospect of success, the Court may decline to order judgment summarily if it is not in the interests of justice to do so or if the dispute is of such a nature that only a full hearing on the merits is appropriate.
3. An application by a plaintiff for summary judgment under s 61 of the CPA must be made by summons supported by an affidavit verifying the facts of the claim and stating that it is the belief of the deponent that the defence to the claim has no real prospect of success.[5] The defendant may 'show cause against the application by affidavit or otherwise to the satisfaction of the Court.'[6]
4. Once the applicant for summary judgment has put before the Court evidence to support the application, it is for the respondent to the application to put forward material that demonstrates an arguable defence to the claim.[7] In Bendigo and Adelaide Bank Limited v Grahame,[8] Sloss J described it thus:

... Once the plaintiff has established the elements of its cause of action, there is 'something akin' to a shifting of the evidential burden to the defendant.[9]

Therefore, an affidavit in opposition to an application for summary judgment must provide sufficient particulars to enable the defence case to be properly understood. The affidavit should, so far as practicable, deal specifically with the plaintiff's claim and the facts set out in the supporting affidavit to establish it. It should state clearly and concisely what the defence is, and identify the facts relied upon in support of that defence.[10]

1. The plaintiff submits that the defence of this proceeding enjoys no real prospect of success because:

(a) Mr Rainford does not have standing to defend the proceeding due to his bankruptcy and his trustee in bankruptcy has declined to defend;

(b) the plaintiff has established the facts necessary to show that it has a good cause of action; and

(c) the defence filed by Mr Rainford prior to his bankruptcy contains admissions to the essential elements of the cause of action pleaded against him and, accordingly, he has no arguable defence.

1. The plaintiff submits Mr Rainford does not have standing in the proceeding due to his status as a bankrupt. Section 58(1)(a) of the Bankruptcy Act states that where a debtor becomes a bankrupt:

the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee...

1. I accept the plaintiff's submission that the consequence of this provision is that the bankrupt no longer has a beneficial interest in the property that has vested in his bankruptcy trustee and so has no interest in a proceeding for the possession of that vested property.[11] In turn, this means the bankrupt has no standing to be heard in a proceeding seeking possession of the vested property.[12] This operation of s 58(1)(a) in the context of a proceeding for possession of property against a bankrupt defendant has been described, in this Court, as 'clear'.[13]
2. The operation of s 58(1)(a) in this particular case is equally clear. Mr Rainford ceased to have an interest in the property when he became a bankrupt as it thereupon vested in his bankruptcy trustee. He also ceased to have an interest in this proceeding to recover possession of that property. Relevantly too, there are no allegations of personal misconduct against Mr Rainford in this proceeding which might otherwise justify the Court, in its discretion and to promote the due administration of justice, permitting him to give evidence in answer to those allegations.[14] Therefore, I am satisfied that he does not have standing in this proceeding, and no other right to be heard.
3. In his affidavit, Mr Rainford deposes to his desire to reach a mediated outcome with the plaintiff, and he relies upon the prospect of such a solution as a ground for opposing this application.[15] He made similar submissions at the hearing. In this regard, Mr Rainford appears not to appreciate the legal consequences of his bankruptcy, specifically those under s 58(1)(a) of the Bankruptcy Act, on the question of his standing and his ability to deal with the property in question, as outlined above. Mr Rainford has failed to comprehend that the plaintiff cannot now conduct a mediation with him, and it can only do so with his trustee in bankruptcy.

(a) Mr Rainford's entry into the loan agreement with the plaintiff on 5 April 2023;[16]

(b) Mr Rainford's execution, on 5 April 2023, of a mortgage and memorandum of common provisions to provide a first ranking mortgage over his property to the plaintiff;[17]

(c) the loan payments falling into arrears in breach of the loan agreement throughout the second half of 2023;[18]

(d) the issuing of a default notice to Mr Rainford on 13 November 2023;[19]

(e) the commencement of this proceeding by the plaintiff on 15 February 2024 seeking possession of the property and judgment for the debt owed;[20]

(f) Mr Rainford filing his defence on 20 March 2024; and

(g) the plaintiff learning about Mr Rainford's bankruptcy in June 2024.[21]

Ms Boyce exhibits copies of the loan agreement, mortgage, memorandum of common provisions, emails in relation to the arrears and the default notice to the Boyce Affidavit. She also deposes to her belief, based on the matters identified in her affidavit and as required by the Rules, that the defendant's defence of the proceeding enjoys no real prospect of success.

1. The plaintiff submits that it is entitled to possession and ejectment upon the default by Mr Rainford under s 78 of the Transfer of Land Act 1958. It submits it has established its entitlement to the relief claimed in the proceeding for the purposes of the Rules. The plaintiff further submits that, putting the issue of standing to one side, Mr Rainford nevertheless has no arguable defence and has not shown cause against the application such that summary judgment should be given under s 63 of the CPA.
2. Given Mr Rainford's interest in the proceeding has devolved upon his trustee in bankruptcy, and given that his trustee has stated positively that he does not wish to defend the proceeding and has taken no steps to be joined under r 9.09 of the Rules, I am satisfied that this proceeding is no longer defended, and that summary judgment should be given for the plaintiff for that reason.
3. However, to the extent consideration must be given to Mr Rainford's defence, and the affidavit material put forward in opposition to this application despite his lack of standing, I am satisfied that:

(a) the defence filed by Mr Rainford prior to his bankruptcy admitted all 23 paragraphs of the plaintiff's statement of claim, thereby admitting the loan, mortgage, default in payment and the plaintiff's entitlement to possession of the property under the mortgage; and

(b) the Rainford Affidavit, by only setting out certain events that occurred after the commencement of this proceeding, does not disclose any further points of defence, or otherwise show cause against the application.

1. For these reasons, I am satisfied that Mr Rainford has not shown cause against the plaintiff's application for summary judgment and the defence has no real prospect of success.
2. I am also satisfied that there are no other circumstances which warrant the exercise of the discretion under s 64 of the CPA to nevertheless allow the proceeding to continue to trial. Therefore, summary judgment should be ordered pursuant to s 63 of the CPA.

1. For the foregoing reasons, I will order summary judgment in favour of the plaintiff and make consequential orders for possession in accordance with the minute of order provided by the plaintiff.
2. I will also order that the defendant pay the plaintiff's costs of and incidental to the summons dated 16 December 2024 and the proceeding generally, pursuant to the mortgage and loan terms.

[1] Affidavit of Emma Therese Boyce affirmed on 16 December 2024, [15] ('Boyce Affidavit').

[2] Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158; (2013) 42 VR 27, 39 [29] (Warren CJ and Nettle JA) ('Lysaght').

[3] Lysaght 40 [35] (Warren CJ and Nettle JA), 42 [40]-[42] (Neave JA).

[4] Lysaght 40 [35] (Warren CJ and Nettle JA).

[5] Supreme Court (General Civil Procedure) Rules 2015, rr 22.03 and 22.04 ('Rules').

[7] Hausman v Abigroup Contractors Pty Ltd [2009] VSCA 288; (2009) 29 VR 213 ('Hausman').

[8] [2020] VSC 86 ('Grahame').

[11] See, eg, Westpac v Webb [2019] VSC 180; Rogers v Asset Loan Co Pty Ltd & Ors [2006] FCA 434.

[12] Westpac v Hines [2020] VSC 715, [13], citing Farrow Mortgage Services Pty Ltd v Winfield [1992] 2 Qd R 282, 285; Bendigo Bank Ltd v Demaria [2001] VSC 218, [18]; National Australia Bank v Strik [2009] NSWSC 184, [9]-[10]; National Australia Bank Limited v Darroch; N_ational Australia Bank Limited v Bhatti_ [2010] NSWSC 1202, [5]-[8]. See also Frigger v Professional Services of Australia Pty Ltd [2022] WASC 158.

[13] Westpac v Hines [2020] VSC 715, [33].

[14] Cf Re-Engine Pty Ltd v Fergusson [2007] VSC 57; (2007) 209 FLR 1.

[15] Affidavit of Philip Septimus Anthony Rainford sworn on 19 February 2025, [13], [16] ('Rainford Affidavit').

[16] Boyce Affidavit, Exhibit EB-1, 1-36.