[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[2]
Judgment (ex tempore)
HIS HONOUR: The applicant Mr John Hester is the registered proprietor of real property at Hamlyn Terrace in the State of New South Wales from which he was ejected on 7 December 2022 under a default judgment obtained in the Common Law Division on 19 December 2019. By notice of motion filed in this Court on 21 March 2023, he seeks to be reinstated in possession of the property pending the hearing of his application for leave to appeal from the default judgment. The proceedings in the Common Law Division were instituted by the respondent Commonwealth Bank of Australia on 28 March 2019 by statement of claim. Mr Hester filed a defence on 22 July 2019, which was struck out by order of Lonergan J on 18 November 2019. Thereafter, although documents entitled "affidavit of defence" were filed, they did not plead a defence in the appropriate form, nor did they disclose viable defences, and no further defence as such was filed.
On 19 December 2019, Lonergan J, after a hearing at which Mr Hester appeared, granted leave to the bank to apply for default judgment and gave judgment in default of a defence, which was entered on 6 March 2020. Meanwhile, on 20 January 2020, Mr Hester filed a notice of intention to appeal, but no notice of appeal nor summons for leave to appeal was thereafter filed until 2023, to which I shall come. Nor was any application made in the Common Law Division to set aside the default judgment. In the intervening period, between the end of 2019 and the end of 2022 when the writ of possession was executed, Mr Hester made various complaints to regulatory authorities in the banking and financial sector.
On 12 October 2022, the bank filed a notice of motion for leave to issue a writ of possession and for such a writ to issue. In conformity with the rules (see UCPR r 39.2) the notice of motion was not served. An order issuing the writ was made on 17 October 2022. Although no formal order granting leave for its issue appears to have been recorded, such a grant of leave must be implicit in the issue of the writ following a motion which expressly sought leave and the affidavit supporting which set out the matters required to be set out in support of an application for leave.
As I have foreshadowed, the writ was executed on 7 December 2022. Ultimately, on 13 February 2023, Mr Hester filed a summons for leave to appeal. A white folder has now been provided and the application for leave to appeal could in all probability be heard in May. Mr Hester's notice of motion filed on 21 March 2023 seeks, in terms, a stay of the judgment for possession. However, as the judgment has been executed and implemented, it is no longer possible to stay it.
I have therefore treated the application as one for a writ for restitution pending the hearing of the application for leave to appeal, and for an injunction to restrain exercise by the bank of its power of sale in the interim. On such an application, the relevant considerations must be the prospects of success of any application for leave to appeal (and appeal if leave be granted), and the balance of convenience.
In this case, significant considerations include, first, that in order to obtain leave to appeal, an extension of time of some three years would be required. That Mr Hester was aware that time limits applied to appeals is clear enough from the fact that he filed his notice of intention to appeal in a more or less timely manner, one month after the judgment was given. No satisfactory explanation has been proffered for why it has taken three years since then for a summons for leave to appeal to be prepared and filed. That is a very substantial period of delay, which requires a good explanation, and none such has been proffered.
Secondly, and perhaps even more telling, is the availability of an alternative remedy. The judgment of the Common Law Division is a default judgment. The usual, conventional and proper way of having a default judgment reviewed is to apply in the Common Law Division in the original proceedings to have that judgment set aside. It seems to me that the availability of that alternative remedy is, in itself, a complete answer to the application for leave to appeal and would be fatal to it.
Thirdly, although as I shall later mention many issues were raised by Mr Hester in support of his application, both in the written documentation and orally, no genuine question of principle such as might attract a grant of leave to appeal is apparent. Fourthly, it is not apparent that there was any error of law or of discretion involved in the entry of default judgment. Default judgment followed from the fact that there was a statement of claim and a defence that had been struck out and, thus, no defence, entitling the plaintiff to judgment by default. It is not apparent how her Honour could have erred in directing entry of default judgment in that respect.
Those reasons would suffice to conclude that an application for leave to appeal has no prospects of success and, accordingly, that an application for what is in the nature of a writ of restitution ought to be refused. But in deference to Mr Hester's request that I "set aside the rules in order to do justice", I have further considered the matter as if it were an application to set aside a default judgment. On an application to set aside a default judgment, it is necessary for an applicant to explain his or her failure to file a defence, to explain any further delay that has taken place since the entry of judgment in applying to have it set aside, and to show that there is an arguable defence on the merits.
As to the first, Mr Hester says, as I understand his case, that he cannot file a defence because he has not been provided with the requisite original documents in order to ascertain whether or not he has a defence. That misconceives the role of pleadings. The plaintiff has filed a statement of claim making assertions of the various material facts which it says entitles it to relief. A defendant is required in those circumstances to file a defence admitting, denying or - where the matter is not within the defendant's means of knowledge - not admitting, the alleged facts. The fact that there are matters not within the knowledge of the defendant, or which he wishes to but has not yet investigated - is not a reason for not filing a defence. Adherence to the misconceived view that he is unable to file a defence until original documents are provided to him is not a reasonable or satisfactory explanation for not filing a defence.
As to the second matter, the passage of three years since judgment was entered has not been adequately explained, as has already been observed.
Turning to the third matter - which is the question of a defence on the merits - I fully appreciate and bear in mind that on an application to set aside a default judgment, it is not necessary for a defendant to show that it has a defence that will succeed, or to prove that defence. All that is required is that it show that it has an arguable defence, and it need not necessarily show that by evidence that would be admissible at the final hearing of the proceedings.
Here, Mr Hester does not appear to dispute that his signature appears on the loan documents, being the mortgage document and the loan contract. Nor does he appear to dispute that he sought to borrow funds from the Commonwealth Bank of Australia to refinance a home loan and some additional borrowings. He has not traversed or challenged the evidence adduced on behalf of the bank of the current amount of indebtedness, or that there was a default in respect of repayment, or that no payments have been made since 2018. His defence is otherwise.
First, he says that the statement of claim does not contain the requisite original documents but mere assertion as to their existence and contents and that the originals have not been provided. Again, this misconceives the function of a statement of claim, which is specifically required not to set out the evidence relied on, but to be a statement of the material facts in summary form.
Next, and fundamentally, he submits that there is a "reasonable doubt" about the existence or enforceability of the loan on which the bank relies and on the bank's interest as mortgagee which it seeks to enforce. As I sought to point out in the course of submissions, references to the existence of a "reasonable doubt" are inapt in the context of civil proceedings as these are; it is a notion which applies in criminal prosecutions. But putting that to one side, I have considered carefully the various supposed inconsistencies and doubts to which my attention has been drawn by Mr Hester.
The fact that the statement of claim refers to a mortgage number and does not include the alphabetical suffix which appears on a copy of the registered mortgage itself, as obtained from the Land Titles Office, does not to my mind raise any doubt or suspicion whatsoever. It is quite customary for the alphabetical suffix not to be referred to when reference is made to the registered mortgage number.
Next, the fact that on the filed memorandum referred to in the mortgage what appears to be a witness's initials appears on the first page but not on the second does not to my mind create any doubt as to the authenticity of the document, especially when the signature of the certifying officer, Mr Chen, appears on both pages. Nor does the fact that the pagination on the second page is at the bottom left hand corner, rather than at the bottom centre as stipulated by the direction appearing on the first page that the pagination should be at the bottom centre, to my mind, raise any suspicion; it appears to be a copy of a standard printed form. These are on their face quite ordinary and unexceptional discrepancies, if they be discrepancies at all. Nor is there anything suspicious in the fact that the filed memorandum bears a date anterior to the date of the mortgage. To the contrary, it would be irregular if the filed memorandum bore a date later than that of the mortgage. That is because the filed memorandum is a document lodged by the bank, to apply to a large class of mortgages which refer to it, which mortgages themselves will be brought into existence after the filed memorandum which they incorporate has been prepared and filed.
Nor is there anything suspicious in the absence of the "receipt" box on the loan contract having been completed by the bank. The loan contract was evidently signed on behalf of the bank, and also by Mr Hester. The completion of the "receipt" box evidencing when the bank received the documents is not essential to its validity and its incompleteness does not cast doubt on its validity.
Other than the case based on discrepancies in the documents said to give rise to a doubt as to the existence of the loan, Mr Hester also relies on the assertion that the loan may have been "securitised" and, as I understand the argument, no longer enforceable by the bank or against him. The first response is that there is no evidence that the loan has been securitised at all. Mr Hester referred to an affidavit obtained from an American source which refers to a Medallion Trust and contains a bare assertion that the deponent on the basis of information provided to him thinks that the loan is included in that trust, but a close examination of the so called "Medallion Trust" document contains nothing to support that view. It was also submitted in this respect that the bank had not produced and was unable to produce the "note". This apparently is a reference to a supposed promissory note, which Mr Hester subsequently explained, as I understand it, was the document by which the Crown granted a right in the land to an owner. To my understanding, the certificate of title would correspond with such a document. In evidence is a title search which shows what appears on the certificate of title, and shows that Mr Hester is the registered proprietor subject to a mortgage to the Commonwealth Bank of Australia.
In any event, even if the loan were securitised and even if the benefit of the mortgage had been transferred to a third party, in circumstances where no notice of any such assignment has been given to Mr Hester and the bank remains the registered mortgagee, then the fact that as between the bank and someone else there may have been a transfer - a matter which I stress is not supported by any evidence - then that would not affect the rights of the bank as against Mr Hester in respect of the mortgage: see Westpac Banking Corporation v Mason [2011] NSWSC 1241 at [27]-[30] per McCallum J as her Honour, the Chief Justice of the Australian Capital Territory, then was.
More fantastic arguments advanced on behalf of Mr Hester, the relevance of which to his case and to the bank's entitlement to possession of his property is not self-evident, were that the Corporations Act was not in force, apparently based on an observation in a judgment delivered in 1998 to the effect that the third reading of the Corporations Bill had not yet occurred - which, if correct, is unsurprising, since the Corporations Act did not commence until 2001; and that amendments to legislation in Western Australia - including, in particular, the Bail Act of that State - effected by the (WA) Acts Amendment and Repeal (Courts and Legal Practice) Act 2003 replacing references to the "Crown" with references to the "State" were unconstitutional and treasonous.
None of the matters which Mr Hester has advanced disclose in my view an arguable defence on the merits. For those additional reasons, the bank being in possession under the judgment of the Common Law Division, there is no basis shown for orders which would restore Mr Hester to possession of the property, or to restrain the bank from exercising its powers as mortgagee.
I am afraid, therefore, that the notice of motion must be dismissed with costs.
[3]
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: 17 April 2023