Before me is a notice of motion in possession proceedings. The first prayer of relief in the notice of motion seeks to strike out of an amended defence filed on 15 August 2014. The second prayer seeks summary judgment in the alternative.
Before considering these particular claims it is necessary to outline some brief background to the proceedings as well as aspects of its procedural history.
[2]
Background
On the application there was read an affidavit of Slav Stamef sworn 20 November 2014. Mr Stamef occupies the position of a "complex and specialised portfolio officer" and is employed by the plaintiff bank. In his affidavit Mr Stamef explains that from March 2007 to October 2008 the defendant took out five loan facilities with the plaintiff. The defendant is the registered proprietor of the property the subject of the claim for possession which appears to be a residential premises in Jindabyne.
The first of the loan facilities was entered into in March 2007. It was for the principal sum of $661,987 and its stated purpose was to discharge a prior mortgage over the defendant's property and to provide funds to finance the construction of a duplex residence on the property.
The next two loan agreements involved advances to repay the earlier loan agreements together with additional funds intended to be used to finance that construction.
The fourth loan agreement was entered into on 24 September 2007 and involved an advance of $839,528. Some $73,723.62 of those funds was to be paid into a cash management account in the joint name of the defendant and her husband, with the balance to be used to pay some small amount of fees and to repay the previous loans.
The fifth and final loan was entered into on 13 October 2008 and involved an advance of $929,023. The stated purpose of the advance was to repay some $845,153.76 which was necessary to repay the fourth loan, to pay some relatively modest fees and for the advance of a further amount of $82,826.24 into a joint account in the name of the defendant and her husband.
In broad terms the stated purpose of these funds can be divided into three categories. One category was to repay an earlier mortgage with a different lender. The second category of payments was for the use of funds to construct and fit-out a duplex residence on the defendant's property. The third was the distribution of approximately $155,000 into a joint account in the name of the defendant and her husband.
The defendant went into default under the fifth loan and the mortgage that secured it in late 2013. She received a default notice on 9 January 2014. The form of the mortgage and loan agreement is such that, as one would expect, the occasioning of default entitled the plaintiff bank to possession and to repayment of the full amount owing subject to the raising of any positive defence.
[3]
The Proceedings
The proceedings were commenced on or around 27 March 2014. In June and July 2014 there was an exchange of particulars about the plaintiff's statement of claim. As part of that exchange the plaintiff's solicitors provided the defendant's solicitors with copies of the loan agreement that was being sued upon, i.e. the fifth loan agreement, together with the relevant terms and conditions.
At some point an amended defence was filed by solicitors acting on behalf of the defendant. The amended defence broadly raised two claims, one being a general unconscionability claim and the other being a pleading that sought to invoke the Contracts Review Act 1980 (NSW). To the extent that the amended defence contained any particulars of these claims, they alleged that the relevant documentation was executed without any explanation being provided to the defendant, and that her signatures were procured from her by her husband.
One particular to the defence alleges that the "documentation with respect to the said subsequent provision was executed with respect to monies to be provided for her husband's business interests". This assertion was not elaborated upon. Otherwise there is nothing in the amended defence that suggests that the monies that were advanced under the relevant loan agreements were not utilised for the purposes that I have already identified.
On 18 August 2014 an application was made in the possession list to strike out the amended defence. The application was refused by Button J (Commonwealth Bank of Australia v Susan Amelia Quinn, unreported, 18 August 2014). His Honour concluded that, although the amended defence was sparse, it raised two reasonably open defences, namely, reliance upon the Contracts Review Act and unconscionability.
It seems that around this time the parties entered into discussions about the settlement. However, the defendant's solicitor advised the Court on a number of occasions that he was having difficulty obtaining instructions because it seems the defendant and her husband were involved in proceedings in the Family Court. The matter came on in the possession list before Davies J on 21 November 2014. On that date the plaintiff indicated, in effect, that enough was enough and that it would file a motion seeking to strike out the defence and obtain summary judgment. The Court advised the parties that a special fixture would be required which led to the matter being fixed for today. The defendant's solicitors attended Court on 21 November 2014 and there was no doubt that they were on notice that the application would be made.
When the matter was listed today there was no appearance on behalf of the defendant. Her name was called three times outside the Court. The Court allowed a short adjournment for the plaintiff's solicitor to contact the defendant's solicitor. He was able to do so. On oath, the plaintiff's solicitor advised the court of the matters that he had discussed. The relevant aspects of that discussion were as follows. First, the defendant's solicitor confirmed that he was aware that the motion was listed today. He also acknowledged that he had received copies of the notice of motion and the principal affidavit in support and had supplied them to his client. Second, the solicitor indicated that he had not been able to get proper instructions from his client, notwithstanding that he had pointed out to her the need for instructions. Thirdly, the defendant's solicitor indicated that he would not be appearing and would be filing a notice of ceasing to act shortly. Fourthly, the defendant's solicitor stated that it was his understanding that the defendant would not be appearing.
In circumstances where the defendant has been on notice for over two and a half months that this application would be brought and has been provided with all the substantive material to be relied on in support of it, I do not think that there is any reason to delay hearing the notice of motion. Further, I do not consider that there is any reason not to determine the notice of motion on the basis that the defendant, having had the opportunity to put whatever material she wished in opposition to the plaintiff's motion, none was forthcoming.
[4]
Disposition
As previously noted, the first prayer for relief seeks the striking out of the amended defence. The principal difficulty with that application is that a similar application was heard and rejected by Button J. The plaintiff's solicitor sought to overcome that by pointing to two related matters. First, he noted that the application made before Button J was made orally which he said was in accordance with the relevant practice note applicable in the possession list and was not supported by affidavit. Second, the solicitor pointed out that over a month prior to the filing of the amended defence the defendant had been supplied with the form of loan agreement being sued upon. Nevertheless she included in her defence a statement of non-admission of various parts of the statement of claim and an assertion that she "does not have a complete copy of the agreement and cannot recall its terms". In combination the plaintiff says that these matters meant that his client was not in a position to put a complaint to Button J that the amended defence was defective in that respect and, indeed, disingenuous, as the defendant did have a complete copy of the loan agreement.
I can see the force of the plaintiff's complaint about the form of the pleading, but nevertheless I do not think that it is a matter that warrants a reconsideration of Button J's judgment. As noted, the conclusion of his Honour was that, although far from precise or properly particularised, the amended defence raised a sufficiently clear claim under the Contracts Review Act and of unconscionability. I do not think that the matter pointed to detracts from that conclusion. Accordingly, I decline to strike out the amended defence.
As noted, prayer 2 seeks summary judgment. It is a rare case that summary judgment will be granted in respect of a defence which raises the Contracts Review Act (see Commercial Banking Company of Sydney v Pollard (1983) 1 NSWLR at 74; Commonwealth Bank of Australia v Tarrant [2011] NSWSC 1087). However, as I have stated, the defendant has failed to put before the court any material capable of supporting any aspect of her amended defence (cf Tarrant at [3]). The type of evidence that could be put on by a defendant to resist a summary judgment where a Contracts Review Act claim is pleaded is often not particularly persuasive, and in some circumstances, can include statements of information and belief or which only identify the matters that it is sought to be demonstrated at a final hearing. However, in this case the defendant is the sole debtor and the only registered proprietor. The uncontradicted evidence is that the defendant received either the entire benefit of the amount that was advanced or certainly the bulk of it, in that as the registered proprietor it was in her interests to refinance the earlier mortgage to build improvements, and the accounts to which the other moneys were paid was a joint one held by her husband. In such circumstances, there must be at least some material from the defendant to resist an otherwise straightforward claim of default in repayment of loans. No such material of any kind has been forthcoming, notwithstanding the defendant having ample opportunity to provide it. Accordingly, the Court will grant summary judgment.
The plaintiff has provided an affidavit quantifying the judgment amount owing as at 9 February 2015. I will shortly make orders for possession and judgment for the amount so calculated. I will also stay the writ of possession until 31 March 2015. From the bar table the plaintiff's solicitor advised the Court that the defendant's property is used for some holiday rentals but the affidavit verifying her defence also indicates that it is a residential property. In those circumstances I think some time should be allowed. The combination of an extension to 31 March 2015 and the time taken thereafter by the Sheriff to put in place arrangements for execution of a writ should, in my view, be adequate.
Accordingly, the court orders:
1. Judgment in favour of the plaintiff for possession of the whole of the land in folio identifier 2/1090909 being the land situated at, and known as, 119A Gippsland Street Jindabyne in the State of New South Wales.
2. That the plaintiff to have leave to issue a writ of possession at any time on or after 31 March 2015.
3. That there be judgment in favour of the plaintiff against the defendant in the sum of $1,032,306.71
4. That the defendant to pay the plaintiff's costs of the proceedings.
5. That the plaintiff's notice of motion filed 21 November 2014 be otherwise dismissed.
[5]
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Decision last updated: 17 February 2015