Commonwealth Bank of Australia v Roskott

History of Proceedings 6In 2013, the Bank commenced proceedings in this Court by a Statement of Claim. Although I have not seen the document, it is accepted by the parties before me that a Defence was filed by the applicants, the effect of which was to put the Bank to proof of all matters upon which it relied to ground its claim. 7As at 10 March 2014, the state of the loan was that the arrears had increased to $227,835.56 and the balance of the whole of the debt owed by the plaintiffs to the Bank was $1,102,121.70. 8On 14 March 2014, the proceedings came before Davies J. On that day, his Honour made orders striking out the Defence and giving the Bank leave to apply for a default judgment. His Honour published his reasons: Commonwealth Bank of Australia v Roskott [2014] NSWSC 246. 9As it appears from his Honour's judgment, the argument that was presented to him was, that on 30 January 2014, the applicants had issued to the Bank a Bill of Exchange, which the applicants contended before his Honour constituted a full and complete discharge of all of the monies which they owed to the Bank. His Honour said this of the Bill of Exchange: "In my view, the so-called bill of exchange is not a valid instrument except possibly for the amount of $1. Significantly, in Rural Bank Ltd v Lloyd [2013] NSWSC 1214 Adams J had to consider the validity of a bill of exchange drawn in almost identical terms to the present one by a Defendant seeking to defend a claim for possession under a mortgage. Adams J said this: '[6] No discussion is required about the 'Bill of Exchange'. It is plainly worthless. At all events it only proffers the amount of one dollar. Not surprisingly, no-one from the Plaintiff attended the proposed or a later meeting stipulated by the Defendant.' "He went on to say that neither payment nor tender was made by the issue and service of that bill of exchange. His Honour's views in that case accord entirely with my own in the present case." 10Davies J went on to say this: "I endeavoured to obtain from Mr Roskott an identification of what, if any, other defence he had to the claim. He has not been able to identify any such defence, claiming that the bank is estopped by its refusal to accept the bill of exchange that was offered. In my opinion, there is no estoppel against the bank at all." 11His Honour then went on to say that he was of the view that the orders which he had made allowed Mr Roskott and Ms Dirckz, if they had any other defence which had not yet been articulated, to advance such a defence. He said: "If it is the case that there is any other defence which Mr Roskott has not yet articulated, I consider that the appropriate course is that the Defendants should apply to set aside any judgment that the Plaintiff obtains. The onus will then be on the Defendants to show that they have an arguable defence in those circumstances." 12After Davies J delivered judgment, the Bank sought, and was granted, default judgment on 19 March 2014. 13An application was made by Notice of Motion filed on 20 May 2014 by the applicants for orders: "1. That principal judgment entered in favour of the plaintiff, Commonwealth Bank of Australia, on 14 March 2014 be set aside 2. That the court grant a stay of the leave given to apply for default judgment until the application to set aside principal judgment is decided 3. That the application for a stay of the leave given to apply for default judgment be dealt with on an urgent ex parte basis, in chambers 4. That costs of the motion be costs in the cause" 14That Motion was heard by Adams J sitting as the Duty Judge on 4 June 2014. I do not have a copy of the transcript of the proceedings before his Honour on that day, but I am informed by both parties that his Honour dismissed the Notice of Motion on the basis that if there was any complaint to be made by way of an error of law with respect to the judgment delivered by Davies J, then the proper course would be to seek leave to appeal to the Court of Appeal with respect to that judgment, rather than to apply to another Judge of the Common Law Division to set aside the judgment of Davies J. 15No application has been made by motion or otherwise to set aside the default judgment that was entered in favour of the Bank on 19 March 2014. No application has been made for leave to file any further defence with respect to the principal proceedings.

The Present Proceedings 16The application that is before me today is advanced upon the basis that, since the applicants have appealed to the Court of Appeal, it is in the interests of justice that a stay be granted so as to preserve their ownership and possession of their home pending the hearing and determination of their appeal. 17An appeal was initially filed on 26 June 2014. That appeal sought to challenge the correctness of the judgment of Davies J. The Registry informed the applicants that there was a need for the applicants to file a summons for leave to appeal. Clearly, this is so for at least two reasons. First, the judgment of Davies J was an interlocutory one and therefore leave to appeal is necessary, and secondly, because, so it appears to me on the limited information that I have, the time within which a notice of appeal could be lodged had expired. 18I am informed that a summons seeking leave to appeal will be filed today, 29 July 2014. A copy of the proposed summons has been tendered to the court. I am content to proceed upon the basis that the summons will be filed today. 19The summons seeks leave to appeal from the whole of the decision of Davies J. Confusingly it includes as one of the dates for the hearing 4 June 2014, but clearly Davies J did not hear any matter on that day. No doubt this is an unintentional error. 20With the summons for leave to appeal I have been provided with a draft notice of appeal. The draft notice of appeal challenges the decision of Davies J that the Bill of Exchange to which I have earlier referred was invalid. It further challenges, on a number of bases, the conduct of the hearing by Davies J. It asserts that his Honour was biased; ignored the affidavit of the applicants; "practised law from the bench in claiming no agreement was reached prior to the hearing"; that he bullied the applicant/defendants by using derogatory terms; and "allowed for defect of law by claiming one of the documents tendered to plaintiff to be not valid and has agreed on record to certify this". 21The draft notice of appeal seeks orders from the Court of Appeal that the principal judgment entered in favour of the Bank be set aside. In support of the summons seeking leave to appeal, and the draft notice of appeal there is a document entitled "Affidavit and Also Summary of Argument". A perusal of this document suggests that the principal attack upon the judgment of Davies J is that he ought to have held that, by the device of the Bill of Exchange, which was sent by the applicants to the Bank on 30 January 2014, the applicants had discharged the entirety of their debt to the Bank. 22The argument advanced notes that the Bill of Exchange was sent by registered mail, was delivered to the Bank, there has been no return of the Bill by the Bank and, accordingly, his Honour was in error by failing to find that the Bill of Exchange had discharged the debt which existed. 23The summary of argument can be encapsulated in the following paragraphs which are contained within the Affidavit: "18. The reasons we seek Judge Davies' judgement to be set aside are listed below: 19. We have proof to have delivered a payment instrument which lawfully discharges the liability. 20. We have an acknowledgment from the plaintiff that this has been accepted, by virtue of delivery. 21. Plaintiff has never returned the payment instrument and has held on to it more than 72 hours (more than three months now). 22. Plaintiff is now forcing defendant to pay for the second time and is threatening to repossess the property. 23. Plaintiff's claim is vexatious and hopeless." (sic) 24There is a further argument advanced: "26. As the matter was settled in the private through estoppel and acquiescence. there was and there is no contest of the matter. The judge initiated controversy by interrupting defendant when he explained the private settlement. Judge stated this matter was not settled. Under principles of equity law this matter was settled and closed." (sic) 25The parties have informed me, and I accept, that an appointment has been fixed by the Sheriff to execute a Writ of Possession to take possession of the Mullumbimby property on 31 July 2014.

Legal Principles 26The principles upon which the Court would grant a stay pending the hearing and determination of an appeal, or in this case an application for leave to appeal, are well known. In short, however those principles are described, the Court needs to be satisfied that it is in the interests of justice that the stay is granted.

Submissions 27In this case the applicants argue that it is in the interests of justice that a stay be granted because: first, the applicants submit that Davies J's judgment rejecting the validity of the Bill of Exchange is plainly wrong; and secondly, that they have good prospects of persuading the Court of Appeal to grant leave to appeal and to uphold the appeal upon the basis that the Bill of Exchange has discharged their liability to the Bank, and accordingly the Bank is not entitled to possession of their property. 28In addition, Mr Roskott, who has appeared for both applicants today, submits that the consequences of not granting a stay are significant: namely, that the Bank will have possession of their home, and that he and Ms Dirckx will no longer be able to reside in their home where they have lived for, at least, the last eight years. 29Mr Lewin, who appears for the Bank, has submitted that the interests of justice do not favour the grant of any stay. First, he submits that, the Bank is acting on the basis of a judgment which could be the subject of an application to set it aside, providing of course that the applicants could show a proper arguable defence, and that there has been no such application. 30Secondly, he submits that the basis for the appeal, namely that Davies J erred in ruling on the validity of the Bill of Exchange, is without any reasonable foundation at all. Mr Lewin points to the fact that Davies J followed an earlier decision of Adams J in Rural Bank Limited v Lloyd (2013) NSWSC 1214, and that both of the judges had formed the opinion that the Bill of Exchange, which was in largely identical form in each case, was without any validity. 31Thirdly, Mr Lewin points to the prejudice that his client would suffer if a stay were granted. Putting it simply, Mr Lewin points to the fact that the debt continues to accrue, no payments have been made by or on behalf of the applicants to the Bank since default occurred in October 2012, and as a consequence the amount outstanding to the bank is by now approaching what he submits is the likely value of the property. 32It needs to be said that there is no satisfactory evidence before this Court of any valuation of the property. Mr Lewin says that on his instructions the property is worth between $1 M and $1.2 M. Mr Roskott says that on the basis of what he has been told by a real estate agent, the property is worth $1.7 M. I am simply unable to determine what the value is. I do note however that at the time the loan was drawn down in 2006, and according to the bank records, a copy of which has been put in evidence before this Court, the property was then valued at $1.25 M.

Discernment 33I have to assess and make a judgment about the competing arguments and the facts with which I am presented. On the one hand, the Bank has a valid judgment for a monetary sum, in excess of $1.1 M. The Bank submits, and I am satisfied on the basis of the evidence before me, that there is no immediate prospect of that sum being repaid unless the property is sold. The Bank submits that if there was any defence to these proceedings, leaving aside the Bill of Exchange defence, then one would have expected the applicants, as Davies J indicated they were entitled to do, to apply to set aside the judgment and persuade the Court that they had a viable defence. The Bank submits that the Bill of Exchange defence is simply untenable. 34On the other hand, Mr Roskott submits that they have a good defence because they have paid the money by delivery of the Bill of Exchange, that the Court of Appeal is likely to uphold that argument, and in those circumstances they would be entitled to continue in possession of their home. 35In considering what the interests of justice require in this case, I need first to consider and make an assessment of whether the applicants have any reasonable prospect of success on their appeal. This is necessarily an impressionistic assessment. I have come to the view that having regard to the summons and draft notice of appeal which is intended to be filed, the way in which the arguments are advanced, the content of the Bill of Exchange to the extent that it is set out in the judgment of Davies J, and the underlying proposition as to, upon whom it is submitted the Bill of Exchange is drawn, that the prospects of the applicants being granted leave to appeal are remote, and the prospect of success on appeal with this argument is only minimal. I will take that factor into account in considering the exercise of my discretion of whether to grant a stay. 36I turn then to consider the balance of convenience. In my assessment, on the one hand, the Bank is owed a considerable sum and the debt is increasing as time passes. No defence of substance in my assessment has been advanced by the applicants. The attention by the applicants to dealing with the default judgment obtained by the Bank on 19 March 2014, and dealing with the consequences of the interlocutory judgment of Davies J of 14 March 2014, has been less than swift. It has been positively tardy. 37The applicants do not put forward any proposal for the repayment of the loan in the event that the arguments about the Bill of Exchange are unsuccessful, as an alternative to the sale of the property. On the other hand, as Mr Roskott rightly submits, the granting of an order for possession would undoubtedly cause some general hardship. 38I accept that that is so, but there is no evidence at all before this Court that addresses the existence of any particular hardship in the case of the applicants. I am not told anything of the personal circumstances of either of the applicants. I am not told whether they have any, and if so what, alternative property arrangements which can be made to enable them to be accommodated. It is not suggested that either of the applicants is unwell, there is no evidence that the applicants are indigent and that the consequences of the execution of the Writ of Possession would occasion any identified particular hardship in the circumstances of this case, over and above that generally occasioned by the execution of a Writ of Possession. I, of course, weigh in the balance the fact that the execution of all writs of possession involve a degree of hardship to those who are evicted. 39The exercise I am required to undertake is a balancing exercise. I am required to assess the arguments on each side of the ledger and come to a view about what the interests of justice require. I have, to the extent that it is possible in the course of a Duty List, set out as thoroughly as I can all of those matters. 40Undertaking that balancing exercise, I am simply unpersuaded that the interests of justice require a stay of the Writ of Possession. Accordingly, (1)I dismiss the Notice of Motion filed on 23 July 2014; (2)I refuse to grant a stay of the Writ of Possession; (3)I order the applicants/defendants to pay the plaintiff/respondent's costs of the Notice of Motion.

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: 14 August 2014