National Australia Bank Ltd v McCann

CATCHWORDS : PROCEDURE - judgment and orders - setting aside - Defendant filing Defence and Amended Defence - both Defences struck out - Defendant given leave to file further Defence - no Defence filed - default judgment - application to set aside judgment - failure to comply with directions to file evidence in support - application dismissed - further application to set aside judgment - absence of evidence of Defence on the merits - inconsistent pleading in further proposed Defence - evidence of Plaintiff in support of claim unanswered by Defendant - gross delay - no explanation of delay - application to set aside judgment refused.

Contracts Review Act 1980 LEGISLATION CITED : Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules

Akari v Sole [2008] NSWSC 59 Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 83 ALJR 951 Cohen v McWilliam (1995) 38 NSWLR 476 Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Evans v Bartlam [1937] AC 473 Home Ideas Centre Sydney Pty Ltd v Alem Pty Ltd [2010] NSWSC 695 CASES CITED : Jones v Dunkel (1959) 101 CLR 298 Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331 Manly Council v Byrne [2004] NSWCA 123 Perpetual Trustees v Kaplan (unreported - Latham J - 22 February 2007) Saunders v Hammond [1965] QWN 39 Vacuum Oil Pty Co Limited v Stockdale (1942) 42 SR (NSW) 239 Watkins v Combes (1922) 30 CLR 180

TEXTS CITED : Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 2002, 4th edition, Butterworths, Sydney

PARTIES : National Australia Bank Ltd (Plaintiff) Veronica McCann (Defendant)

COUNSEL : D C Price (Plaintiff) A J McQuillen (Defendant)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JUDGMENT 1 The Bank commenced proceedings on 15 January 2009 against Ms McCann seeking possession of the property known as "San Michael", 65 Silverwood Avenue, Luddenham. The right to possession was said to arise from a mortgage that secured 4 separate loan agreements made between the Bank and Ms McCann. 2 At various times Ms McCann has filed 2 Defences to the claim, both of which Defences have been struck out. On the second occasion when her Defence was struck out she was given to leave to file a further Defence but did not do so. 3 That resulted in a judgment being obtained by the Bank, a judgment which Ms McCann now seeks to set aside. The Bank resists her application saying that no adequate explanation has been provided for the delay and pointing to the fact that she does not lead evidence in support of the Defences she alleges.

The loans 4 The Bank alleged that there were 4 loan agreements. For reasons not made clear it identified them as the First to the Fourth Facilities but in reverse chronological order. Given that the pleadings have identified the loans in that way I shall refer to them in the same way but, to understand the course of events, I will deal with them in chronological order. 5 The first loan in time (the Third Facility) was alleged to be a loan agreement made 4 May 2000 for $120,000. This loan agreement was not signed by Ms McCann and in her proposed Defence she effectively denies that there was such a loan agreement. 6 The next loan agreement (the Fourth Facility) was dated 5 May 2000 and was for $560,000. This facility agreement was unsigned by Ms McCann. In her proposed Defence she denies entering into this agreement.

7 The Bank then alleges Ms McCann signed a mortgage with the Bank dated 26 May 2000 and that that mortgage secured the monies lent under the 4 and 5 May 2000 loan agreements. 8 Ms McCann does not deny, in her proposed Defence, signing that mortgage but she does deny that it secured the monies referred to in the various loan agreements. The mortgage itself is in a fairly standard form and all its terms are contained in a Memorandum filed in the Land Titles Office (as it was then referred to). The Memorandum in its form means that the mortgage is an all monies mortgage. 9 The next loan agreement (the Second Facility) was dated 14 March 2006. It was a facility for $250,000 and was unsigned by Ms McCann. In her proposed Defence she denies entering into this agreement. 10 The last facility in time (the First Facility) was a loan agreement dated 8 December 2006 for $500,000. This facility was signed by Ms McCann. In her proposed Defence she admits to signing it but she says she did so under the influence of the Bank. She also says, in effect, that she thought it was something different when she signed it, and that it is an unjust contract. I shall return to those matters presently. 11 The Bank alleges that the mortgage secured all of the monies loaned under the 4 Facilities. The Bank further alleges that default occurred under what has been described as the First Facility on 30 November 2007, and defaults in relation to the other 3 facilities occurred on 30 and 31 January 2008. That led to the Bank cancelling the First, Second and Third Facilities in April and May 2008. 12 A s 57 notice was served in relation to each of the Facilities on 5 September 2008. When that notice was not complied with the proceedings were commenced in January 2009.

Procedural history 13 On 27 March 2009 an order for substituted service was made which authorised service by leaving a copy of the Statement of Claim and a covering letter at "San Michael", 65 Silverwood Avenue, Luddenham, by affixing the Statement of Claim to a conspicuous part of the land at 65 Silverwood Avenue, and by sending a copy of it with a covering letter to an email address believed to be that of Ms McCann. 14 All of that appears to have been done and it resulted in a Defence being filed by Ms McCann on 14 May 2009. This Defence admitted the agreement for the advances of $120,000 and $560,000 (the Third and Fourth Facilities), admitted the advances were secured by the mortgage, but otherwise denied the allegations.

15 The proceedings came before Johnson J on 21 July 2009 under the new procedures adopted in the Possession List at that time. Ms McCann did not appear although Johnson J noted in his reasons for judgment that she was aware of the hearing. 16 His Honour struck out the Defence because it did not disclose a Defence but he granted Ms McCann leave to file and serve an Amended Defence by 28 July 2009. 17 A Further Defence was filed on 28 July 2009 by Ms McCann still acting for herself. 18 This Defence was a little more expansive in some areas. In relation to the First Facility Ms McCann said that the advance of $500,000 was to Ravit Pty Ltd to assist with legal costs relating to the acquisition of an investment property at 5 Junction Road, Auburn. She denied that the advance was secured by the mortgage. 19 Somewhat inconsistently she went on to say: The Defendant's mortgage was up to date as of August 2008, the Plaintiff became aware that the Defendant was engaged in litigation to seek specific performance of a contract for the purchase of 5 Junction Road, Auburn. The Plaintiff was at all times made aware of that litigation and that those funds were for that purpose. 20 Similarly, Ms McCann said the advance of $250,000 was an advance to Ravit "for the acquisition and legal costs for the investment property 5 Junction Road, Auburn". She said that at no time was she aware that the advance was secured by the mortgage. 21 In answering allegations in the Statement of Claim concerning the mortgage Ms McCann pleaded that she had been provided with 2 bank guarantees by the Bank secured by 2 cash sums of $52,250 and $50,000, but she was not aware that the second bank guarantee was secured by the mortgage. She said when the first bank guarantee was called upon, and after an amount of $16,250 was debited for legal fees, the balance (presumably of the cash security) was credited to "the facility" (she did not specify which facility). 22 This Defence also admitted the allegations concerning the Third and Fourth Facilities although not the allegation that the advance of $560,000 under the Fourth Facility was secured by the mortgage (cf. the admission in the earlier Defence). 23 Apart from saying generally that the Bank had engaged in unconscionable conduct the remainder of that Defence simply denied receiving the demands that the Statement of Claim alleged to have been made. 24 At some stage Ms McCann engaged a solicitor, Dickram Yakenian of Juris Lawyers, to act for her. He filed an Appearance dated 14 August 2009 on 4 September 2009. 25 On 4 September 2009 the proceedings came before the Registrar and orders were made in accordance with Short Minutes of Order that had been agreed and signed by the solicitors for the Plaintiff and Ms McCann. Paragraph 1 of the Short Minutes provided that the Amended Defence filed on 28 July 2009 was to be struck out, but paragraph 2 gave to Ms McCann until 18 September 2009 the opportunity to file and serve a Further Amended Defence. No such Defence was filed and on 24 November 2009 the Bank obtained a default judgment. 26 On 23 December 2009 Ms McCann filed a Notice of Motion which sought orders that she have "time to recover her legal file from Juris Lawyers" (although no Notice of Change of Solicitor or Notice of Ceasing to Act had been filed), to allow her time to instruct a new solicitor, to allow her 21 days to file an Amended Defence and to set aside the judgment. 27 This Notice of Motion first came before the Registrar on 25 January 2010. Mr Yakenian appeared for her (despite the orders sought), and Consent Orders were made which included Ms McCann filing and serving a draft Further Amended Defence and evidence on which she relied by 1 February 2010. She failed to comply with those orders. 28 On 8 February 2010 Ms McCann wrote to the Bank's solicitors giving as her address PO Box 9, Luddenham, New South Wales. She advised the solicitors that as of that date Juris Lawyers were no longer acting for her. She asked to be provided with copies of all loan application documents that the Bank was relying on and asked for them to be sent to her at PO Box 9, Luddenham, New South Wales. 29 It seems that she also served a proposed Further Amended Defence on that or the following day. However, she did not serve any affidavit evidence as she had been directed. 30 When the matter came back before the Registrar on 22 February 2010 further Directions were made that any evidence on which Ms McCann relied was to be served by 26 February 2010. She failed to comply with that order. 31 When the matter came back before the Registrar on 12 March 2010 2 affidavits were filed in Court, one from Ms McCann which simply complained about the failure of the Bank to provide her with loan application documents and one from Mr Yakenian who said that in September 2009 he agreed to draft an Amended Defence when he had been given better particulars of the Statement of Claim. 32 The Registrar made Directions whereby the Plaintiff was to provide copies of all loan applications completed by Ms McCann, and Ms McCann was to file and serve further affidavit evidence and a copy of any completed draft Defence by 6 April 2010. She failed to comply with those orders. 33 On 9 April 2010 the matter came back before the Registrar. By that stage the Bank had only provided her the previous day with a single loan application made by her. The Registrar gave leave to the Defendant to file and serve any Notice of Motion by 23 April 2010 and suggested that she should see either the Duty Solicitor or a Deputy Registrar. It seems likely that this Motion was one for the production of documents although that is not made clear. 34 On 30 April 2010 the matter was again before the Registrar and on this occasion Mr McQuillen of counsel appeared for Ms McCann. It seems that after some argument the Defendant's Notice of Motion filed 23 December 2009 was dismissed. 35 Thereafter Ms McCann filed a further Notice of Motion to set aside the judgment and it was that Notice of Motion that came before me for hearing. The Notice of Motion also asked that the Bank should provide full and complete affidavit evidence upon which it relies and provide full and complete answers to the Defendant's request for further and better particulars dated 13 May 2009, 4 August 2009, 25 January 2010, 8 and 9 February 2010, 12 March 2010, 6 April 2010 and 30 April 2010. 36 At the outset of the hearing Mr McQuillen sought leave to file an Amended Notice of Motion. This added a new prayer asking that the Statement of Claim be struck out pursuant to UCPR 14.28. Although I granted leave to file this Amended Notice of Motion I did so on the basis that that new prayer would not be pursued at this stage because no notice had been given to the Bank. 37 All of the affidavit evidence filed and served by Ms McCann, apart from annexing a proposed draft Defence and Cross-Claim, dealt only with what had happened during the course of the proceedings. None of the evidence provided any factual background or material concerning the Defendant's involvement or otherwise with the facility agreements although reasonably detailed evidence about those matters had been filed and served by the Bank. 38 The draft Defence annexed to one of the affidavits of Ms McCann was partly verified because the Defence has attached to it an affidavit which reads "I believe that the allegations of fact contained in the Defence are true". Of course, this is something less than the Rules require in relation to a Defence, and particularly one that contains non-admissions and denials.

Legal principles 39 In Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331 Hodgson JA (with whom MW Campbell AJA agreed) said: [48] In my opinion, the following passage from the judgment of Jordan CJ in Vacuum Oil Pty Co Limited v Stockdale (1942) 42 SR(NSW) 239 at 243 sets out the principles applicable to this case: The present is not a case in which judgment was signed by default through some procedural omission on the part of the defendant or his legal advisers. The action followed the ordinary course, except that its coming on for trial was delayed through dilatoriness on the part of the defendant. It is one in which, the action coming on for trial in its ordinary place in the list, no one was present in Court to conduct it for the defendant, and it therefore proceeded in his absence. In such a case, when the plaintiff is in no respect in default, a new trial will not be granted save in very special circumstances: Chitty's Archbold, 10th ed., 1457; 12th ed., 1526. In every such case the Court has an inherent and unfettered, though judicial, discretion, in the exercise of which it will, however, necessarily consider (a) whether any useful purpose would be served by setting aside the judgment, and (b) how it came about that the applicant found himself bound by a judgment regularly obtained: Evans v. Bartlam [1937] AC 473 at 482 . As a general rule (although not necessarily in every case, if some reason exists for departing from it: Collins' Book Depot Pty Ltd. v. Bretherton [1938] VLR 49; Austn. Digest (1934-1939) 1859), the Court requires an affidavit showing prima facie that the defendant has a good defence on the merits: Evans v. Bartlam [1937] AC 473 at 480, 488-9, and also an explanation of his absence which shows that justice requires that in the circumstances it should be excused. And if there has been gross negligence on the defendant's part, the Court will be the more disposed to require at least a reasonably clear case of merits to be shown, to incline it to interfere: Nash v. Swinburne 3 M&G 630 at 632; Weitzel v. Friedenreich 14 WN 7; Austn. Digest 376 . …

[52] In my opinion, an applicant seeking to set aside a judgment obtained after an undefended hearing does not have to show that a different result is likely should the judgment be set aside and a new trial ordered. However, the circumstances may be such, as Jordan CJ says, as to require "a reasonably clear case of merits to be shown"; that is, that it appear reasonably clearly that there is a defence capable of producing a different result. If that defence depends on facts, then there should be some evidence of those facts; and the circumstances may be relevant to the quality of the evidence that is required to show a defence on the merits in particular cases. Among such circumstances could be the degree of the applicant's default, and hardship to the respondent.

[53] In the present case, in my opinion there was no evidence from Youma going to its defence on the merits, except to the extent that evidence supporting its defence appeared in documentary material relied on by Magnate.

[54] Although Youma's verified Defence and Cross-claim were part of the record of the Court, and did not need to be tendered on the question of what issues they raised, in my opinion they could not function as evidence on any issues unless appropriately put into evidence, for example, by the reading of the affidavit verifying them. If Youma had sought to read that affidavit, its evidentiary value could have been ruled on in response to objections taken; and then it would have been clear to what extent, if at all, that affidavit stood as evidentiary support for the defence and/or the cross-claim. As I have said, nothing like that happened.

[55] Assertions in the affidavit of Mr. Nassif that was read, to the effect that he believed that the defence and cross-claim "have merit" or that the cross-claim is "valid", do not in my opinion appropriately support any assertions of fact so as to amount to evidence supporting a defence on the merits or a cross-claim. (emphasis added) 40 Mr McQuillen submitted that what was said in Magnate Projects was not directly applicable to the position in the present case because in Magnate Projects there had been a hearing where the Defendant did not appear. By contrast, in the present case, he said that a default judgment had been obtained and in such circumstances it was sufficient to put forward a proposed Defence together with an affidavit asserting that the facts in the Defence were true. 41 What is said in Magnate Projects and in Vacuum Oil Pty Co Limited v Stockdale (1942) 42 SR (NSW) 239 (on which decision Magnate chiefly relies) provides no support for Mr McQuillen's submission. In Vacuum Oil Jordan CJ himself relied on what had been said by the House of Lords in Evans v Bartlam [1937] AC 473 at 480, 482 and 488-489. Evans v Bartlam was a case concerned with setting aside a default judgment. Although both Vacuum Oil and Magnate Projects concerned proceedings where there had been an undefended hearing, it is apparent from the reliance on what was said in Evans v Bartlam that similar principles operate whether it is a default judgment that is being sought to be set aside or a judgment obtained after an undefended hearing. 42 That was clearly also the view of Hall J in Akari v Sole [2008] NSWSC 59 at [28]-[29] where he expressly relied on the passage in Magnate Projects at [52] before applying that to the application before him which concerned an appeal from a Magistrate's decision not to set aside a default judgment. It was also the view of Latham J in Perpetual Trustees v Kaplan (unreported - Latham J - 22 February 2007) at [19]. 43 In my opinion, it is quite insufficient for Ms McCann in the present case simply to swear that she believes the facts in the Defence are true to show, in the circumstances of this case, that there is a Defence on the merits to the claim. An affidavit verifying a Defence where the deponent swears to a belief that the allegations of fact in the Defence are true is not sufficient: Magnate Projects at [55] and Saunders v Hammond [1965] 2 WN 39 at 48. 44 The problem is magnified for Ms McCann in the present case because of the way the proposed Defence has been worded particularly in the light of the evidence on which the Bank relies. I will deal with each of the facilities in turn giving them the appellation accorded them by the Bank in its pleadings.

(a) The First Facility 45 The substantive Defence to the claim in respect of the First Facility is to be found in paragraphs 3 and 4 of the proposed Defence as follows: [3] In further answer to paragraph 3 of the said Statement of Claim the Defendant: (a) admits that she executed the alleged Facility Agreement dated 8 December 2006; (b) says, and it is the fact, that she was induced to execute the alleged Agreement whilst acting under the influence of the Plaintiff; (c) in the premises the Agreements (sic) are void and of no effect.

The document was signed at a meeting at the premises of the business Smithfield Auctions Pty Limited at Smithfield. Present were two Bank Officers from the Plaintiff one of whom was Karyn Wright, the former husband of the Defendant Bob Kulakowski and his solicitor Mr. Bruce Hocking. AND

[4] In further answer to paragraph 3 of the said Statement of Claim the Defendant: (a) admits she executed an alleged Agreement; (b) says, and it is the fact, that prior to the execution by her of the said Agreement the Plaintiff, by or on behalf of its officer Karyn Wright, orally represented to the Defendant that the document that the Plaintiff required the Defendant to execute was an application by Rivat Pty Limited to the Plaintiff Bank for funds to meet the legal costs of Rivat Pty Limited in then current legal proceedings brought by it in the Supreme Court of New South Wales, ("the Representation"); (c) Acting in reliance upon the Representation and induced thereby the Defendant without negligence on her behalf executed the document in the belief that it was an application by Rivat Pty Limited to the Plaintiff for funds to meet that company's legal costs of its then current legal proceedings; (d) The Defendant never intended to execute the document as an agreement; (e) In the premises the Defendant never became liable pursuant to the terms of the Agreements to the Plaintiff; (f) The Defendant otherwise denies the allegations therein contained. 46 Precisely what is being alleged in paragraph 4 of the proposed Defence is not made clear. The pleading seems to suggest a non est factum defence but there also appears to be the skeleton of a negligent misrepresentation claim. The proposed Cross-Claim only pleads relief under the Contracts Review Act 1980 based on paragraphs 6, 7 and 8 of the proposed Defence. It does not include a negligent misrepresentation claim or any claim under s 52 Trade Practices Act 1974 or its counterparts. 47 I enquired of Mr McQuillen if the Defendant intended to cross-claim against her former husband or other parties but he simply informed me that he had been considering a cross-claim "against another party but that would have to await this hearing". 48 The proposed Defence further answers the claim in relation to the First Facility in this way: [6] Further in answer to paragraphs 3 to 10 of the said Statement of Claim the Defendant admits she entered into the alleged Facility Agreement with the Plaintiff but says and it is the fact, that: (a) she was ignorant of the contents of the Facility Agreement dated 8 December 2006 at the time of execution. (b) she had not seen the form of the Facility Agreements (sic) dated 8 December 2006 prior to its production by the Plaintiff to her for execution by her on 8 December 2006. (c) she was not afforded any opportunity to negotiate any alteration to the terms of the Facility Agreements (sic) or to obtain any independent advice thereon; (d) the Plaintiff at or about the time of execution of the Facility Agreement allegedly dated 8 December 2006 by the Defendant knew or ought to have known that the Defendant was acting under the mistaken belief that the Land referred to in paragraph 2 of the said Statement of Claim was not being taken by the Plaintiff as security for funds to be advanced to Rivat Pty Limited and instead refrained from alerting the Defendant to the existence of the mistake. 49 Paragraph 7 then says that by reason of those matters the First Facility was unjust. Paragraph 8 says that by reason of those matters the Defendant was in a position of special disadvantage and that it was unfair and unconscientious for the Bank to rely on the First Facility.

(b) The Second Facility 50 The Plaintiff simply denies that she entered into this facility. It is true that her signature does not appear anywhere on the Second Facility document. However, the Bank, in an affidavit sworn 12 March 2010 and served about that time annexes account statements in the name of Ms McCann with the address PO Box 9, Luddenham showing that the facility was drawn down and that there were various credits and debits in relation to the account. 51 The facility document also said this: The facility will be available 7 days from the date of offer below or any earlier date agreed by you and the Bank. Your first use of your account after the relevant date will be taken as your acceptance of the offer contained in this Agreement.

(c) The Third and Fourth Facilities 52 These facilities were also unsigned but the Third Facility contained the same clause about drawing down the loan that I have set out in para [51] above. The Bank exhibits account statements which are said to be in respect of the Third Facility account and in respect of the Fourth Facility account both in the name of Ms McCann at San Michael, 69 Silverwood Avenue, Luddenham. 53 In the first Defence she filed on 14 May 2009 Ms McCann admitted the agreements for the advances of $120,000 and $560,000. In relation to the Fourth Facility that involved an admission that the advance of $560,000 was subject to the facility agreement of 5 May 2000 and that that advance was secured by the mortgage. In relation to the advance of $120,000 she admitted that that advance was also secured by the mortgage. 54 In the Amended Defence she admitted that the Third Facility was also secured by the mortgage but in relation to the Fourth Facility did not admit that allegation, despite what she had admitted in that regard in her first Defence. 55 In her affidavit of 19 May 2010 Ms McCann annexed a copy of the draft Defence that she served on the Bank's solicitors on 8 or 9 February 2010. In denying that the advance under the First Facility was secured by the mortgage Ms McCann said this in that Defence: The mortgage was a mortgage transferred to the Plaintiff when the Defendant refinanced her loan with the Commonwealth Bank dated 28 May 2000. She was not informed by the Plaintiff that all those loans were being secured by her mortgage. In fact at all times during these transactions ( with the exception of the refinancing of the first two mortgage facilities for $560,000 and $120,000 ) nobody from the Plaintiff explained to the Defendant what exactly was taking place with her loans. (emphasis added) 56 The proposed Defence in relation to the Third and Fourth Facilities says this: [21] In further answer to paragraphs 19 and 27 of the said Statement of Claim the Defendant says, and it is the fact that: (a) On or about 4 May 2000 the Defendant offered, in consideration of an advance of $560,000.00 by the Plaintiff to her, to grant a mortgage to the Plaintiff over her home. ("the Offer") Particulars The Defendant's home is situated at 69 Silverwood Avenue, Luddenham in the State of New South Wales and more particularly described in Certificate of Title Folio Identifier 8/248069, the Defendant as sole registered proprietor. (b) On or about 4 May 2000 the Plaintiff purported to accept the Offer subject to an additional term, namely, the Defendant's home be provided as security for a debt in the amount of $120,000.00 of a third party, namely, Buyer Seller Pty Limited trading as Moorebank Auctions, to the Plaintiff ("the Counter Offer"). (c) The Counter Offer was not accepted by the Defendant. 57 The inference from the draft Defence served in February was that the Defendant knew that the loans of $560,000 and $120,000 were secured by the mortgage (cumulatively consistent with her Defence of 14 May 2009 and her Amended Defence of 28 July 2009) and that one or both of them were used to refinance a loan which she previously had with the Commonwealth Bank. 58 On the other hand, the inference from paragraph 21 of the currently proposed Defence was that there was never any agreement with the Bank which was secured by in the mortgage, although the Defendant concedes that she signed the mortgage. It is to be recalled that the mortgage was dated 26 May 2000.

(d) Notices 59 At various points in the proposed Defence Ms McCann says that she does not admit that letters of cancellation, default notices or letters of demand were sent to her as the Statement of Claim alleges. The significance of this is said by Mr McQuillen to be based on provisions in the Memorandum incorporated into the mortgage that require a default notice before the Bank can take enforcement proceedings (clauses 19, 20 and 22 of the Memorandum). 60 The non-receipt of the notices is said by Ms McCann to be because they were not properly addressed to the property at "San Michael", 69 Silverwood Avenue, Luddenham" but were sent to 65 Silverwood Avenue, (which Mr McQuillen told me was a vacant block of land) and to PO Box 9, Luddenham (which Mr McQuillen told me was not his client's Post Office Box).

(e) Other matters 61 The final 2 paragraphs of the proposed Defence appear to be an answer to the whole of the Statement of Claim. They say: [28] In further answer to the Plaintiff's Statement of Claim on or about 26 May 2008, the Defendant paid to the Plaintiff by Bank Cheque the sum of $33,627.76 and thereby satisfied and discharged any claim of the Plaintiff.

Particulars The Defendant attended the Plaintiff Bank on the corner Liverpool & Pitt Streets, Sydney Branch. The Defendant was provided with a Bank Cheque drawn on the Plaintiff Bank for the sum of $33,627.76 made payable to the Defendant. The Defendant deposited the said sum of $33,627.76 to the credit of her account. No. 102882243 (Home Loan account) with the Plaintiff.

[29] In further answer to the Plaintiff's Statement of Claim, on or about 18 July 2007 the Defendant paid to the Plaintiff a Bank Cheque drawn on the NSW Office Of Stamp Duties for the sum of $92,744.00 and thereby satisfied and discharged any claim of the Plaintiff. Particulars The Defendant attended the Wetherill Park Branch of the Plaintiff and deposited the Bank Cheque for the sum of $92,744.00 to the credit of her account No. 102882243 (Home Loan account) with the Plaintiff. 62 Mr McQuillen informed me that those paragraphs show that Ms McCann has tendered payment of what was required. Given, however, that she denied entering into the Second, Third and Fourth Facilities and said that the First Facility agreement was not what she in fact agreed to, it is difficult to see what liability she was satisfying in making the 2 payments referred in paragraphs 28 and 29. She does not relate them in the proposed Defence in any way to any of the facilities. 63 Further, in the draft Defence provided in February 2010 she made reference to the 2 Bank guarantees, one of which was for $33,000. That was related in the earlier form of the Defence to a denial that she had been in default under the mortgage. 64 I do not think it can be inferred from anything said in the current proposed Defence that the Defendant has pleaded that by paying the 2 sums in paragraphs 28 and 29 she has satisfied an unspecified (by her) liability to the Bank. The Plaintiff's evidence 65 There were other matters in the evidence served in the Plaintiff's affidavits that demanded explanation from the Defendant over and above the material contained in the proposed Defence and Cross-Claim, and which point to there being no real defence to the claim. 66 First, the affidavit of Rachel Tyson of 3 July 2009 contained a Business Purpose Declaration apparently signed by the Defendant on 16 March 2006 in respect of the loan amount of $250,000. That document, particularly coupled with a letter of 14 March 2006 addressed to the Defendant at PO Box 9, Luddenham offering her the facility, and coupled also with the account statements in the Defendant's name showing the draw down facility demanded much more than a mere denial that the Defendant had entered into the Second Facility agreement. 67 Secondly, in an affidavit of Alex Coombes sworn 7 April 2010 there was annexed an unsigned letter, said to be from the Defendant to the Bank dated 6 June 2006 attaching a Statement of Assets and Liabilities where the Defendant was: seeking loan funds in the sum of $200,000 to provide me with adequate funds for my legal costs etc and further I wish to proceed with the purchase of the Bankstown property.

Attached to this letter was an application for a loan from the Bank dated 6 June 2006 apparently signed by the Defendant. The application had a Statement of Assets and Liabilities which showed as liabilities the 4 facilities in respect of which the Bank now claims. 68 When I asked Mr McQuillen about this letter and the attached documents, having taken instructions, he informed me that the Defendant denied signing the document. There was no evidence from the Defendant that she had not signed it, nor was any allegation made that her signature had been forged on any document. Since Mr Coombes affidavit had been served the Defendant had sworn three affidavits but said nothing about those documents. 69 Thirdly, the Bank served an affidavit of Paris George of 2 July 2010 which annexed a redraw authority dated 26 May 2000 in relation to the facility for $560,000 apparently signed by the Plaintiff. This was objected to by Mr McQuillen on the basis that it had only been served by facsimile the previous Saturday (3 July 2010). Mr McQuillen said his client wanted to answer that document by affidavit but had not done so prior to the hearing. I gave him leave to call the Defendant to answer it in the witness box but no advantage was taken of that leave. The redraw authority apparently signed by the Defendant was left unanswered. 70 Fourthly, the Bank statements contained in the exhibit to Mr George's affidavit of 12 March 2010 show, prima facie, that each of the facilities was drawn down. Those Bank statements are all in the name of Mrs V McCann of either 65 or 69 Silverwood Avenue, Luddenham or PO Box 9, Luddenham. There is no evidence from Ms McCann explaining what the monies drawn down were used for. Alternatively, there was no evidence that somebody else was able to use the accounts in a way that gave the impression they were Ms McCann's accounts when the true position was otherwise.

Defence on the merits 71 My task on this application is not to attempt to divine the truth of the Bank's allegations when set alongside the Defendant's responses. What I am obliged to do is to see whether any useful purpose is to be served by setting aside the judgment: Vacuum Oil at 243. In that regard I have to see if it appears reasonably clearly that there is a Defence capable of producing a different result if the judgment is set aside: Magnate Projects at [52]. 72 In considering the absence of evidence from the Defendant I do not think it is illegitimate to have regard to the fact that she repeatedly failed to file and serve evidence, although directed by the Court to do so, in support of her earlier Motion to set aside the judgment and also in support of the present Motion. Particularly, where documents are put into evidence by the Bank that on their face show the signature of Ms McCann, one could reasonably expect that, if those signatures were said not to be hers, there would be some evidence to that effect. In the circumstances, I see no reason why a Jones v Dunkel inference should not be drawn as a result of the failure of Ms McCann to provide some answer to the affidavit evidence put forward by the Bank. 73 I accept that the principle in Jones v Dunkel originated from the situation of a trial where a jury could draw an inference about the absence of a witness (see the discussion in Manly Council v Byrne [2004] NSWCA 123 at [44]-[74]). The principle has been applied to the failure of a party to ask questions of a witness in chief: Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418. In circumstances where a judgment debtor has been directed on multiple occasions to serve all evidence on which she relies to support applications to set aside a judgment, I consider that a Jones v Dunkel inference is available where there has been a failure by the Defendant to respond to matters which are germane to the Defence that she alleges. The inference is, strictly, that any evidence the Defendant could have served would not assist her case. 74 In my opinion the inference goes beyond that in the present circumstances. A party presented with evidence suggesting that she has signed particular documents could reasonably be expected, if she denied those documents were signed by her, to swear an affidavit to that effect. In the absence of such evidence I can more readily infer that the signatures on the documents are the Defendant's signatures. 75 Similarly, where there are bank statements in the name of Ms McCann which appear to show that the facilities were drawn down by her, a failure on her part to lead any evidence that she did not draw down the facilities or that some other person or persons operated her accounts or had the ability to do so, I can infer that the facilities were drawn down by her. 76 The other matter, about which much was made, was the proper address of the property and the addresses to which notices had been sent. 77 In paragraph 1 of the proposed Defence the Defendant asserted that the correct address had not been pleaded by the Bank when it asserted that she was the registered proprietor of the property known as "San Michael" 65 Silverwood Avenue, Luddenham. At a later point in the Defence she says that her home is situated at 69 Silverwood Avenue, Luddenham. 78 The exhibit to the affidavit of Mr George of 12 March 2010 contains cancellation notices addressed to Mrs McCann at both 69 Silverwood Avenue and PO Box 9, Luddenham. It contains s 57 notices and demands addressed to Mrs McCann at "San Michael" 65 Silverwood Avenue. It contains bank statements for accounts of Mrs McCann at PO Box 9, Luddenham, "San Michael" 65 Silverwood Avenue and "San Michael" 69 Silverwood Avenue. 79 Under the terms of clause 22.3 of the Memorandum the Bank is entitled to leave or send notices by post to the address of the place of residence of the borrower last known to the Bank. There is no dispute that 69 Silverwood Avenue was an appropriate address for notices. As to 65 Silverwood Avenue and PO Box 9 I note that the first Defence prepared by Ms McCann had as her address for service "65 Silverwood Avenue, Luddenham, NSW, 2745, PO Box 9 Luddenham, NSW 2745". The affidavit verifying that Defence had the address 65 Silverwood Avenue as did the section headed "Further details about filing party". 80 I note that the Amended Defence of Ms McCann, which was verified by her affidavit, contained PO Box 9 Luddenham, NSW 2745 as the address on the coversheet of the Amended Defence as well as in the section headed "Further details about filing party". 81 I have already made reference (in para [28] above) to Ms McCann asking the Bank to send her documents to PO Box 9 Luddenham. I note further that the Order for Substituted Service directed service at 65 Silverwood Avenue. 82 In all of these circumstances, I do not consider that the Defendant shows that there is any issue in relation to the service of notices or demands. The mere fact that she may not have received them (and she does not positively assert that she did not) does not mean that she was not appropriately served in accordance with the terms of the Memorandum: Home Ideas Centre Sydney Pty Ltd v Alem Pty Ltd [2010] NSWSC 695 at [17]. 83 As set out in paras [45] and [48] above, the most substantive pleading concerning any of the facilities deals with the First Facility. However, even if I accepted that it was sufficient to rely only on the affidavit verifying the Defence that the Defendant has sworn (and I do not accept that) it is the matters that the Defendant fails to detail that causes me to consider that the Defendant fails to show a Defence in relation to the First Facility. She refers to executing the agreement "under the influence of the Plaintiff" but does not provide any particulars of the circumstances of the Bank exercising influence over her. There is no presumption of influence in relation to a bank over a customer (Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 2002, 4th edition, Butterworths, Sydney at [15-055].) Moreover, the influence must be "undue" influence, a matter which is not alleged by the Defendant: Watkins v Combes (1922) 30 CLR 180 at 193-4. 84 Further, there are no particulars of how the Defendant relied on the Representation alleged when it is not asserted that she is unable to read and understand English, and the facility agreement signed by her makes no mention of Rivat Pty Ltd. That is also relevant to what appears to be one particular of the unjustness of the contract, namely, that she was ignorant of its contents at the time of execution. 85 If this matter had come to a judge for judicial directions pursuant to the recently promulgated Possession List Practice Note there can be no doubt that paragraphs 3, 4, 6 and 7 of the proposed Defence would not have been considered sufficient without further affidavit evidence to show that there really was a defence to the claim made on that facility. Bearing in mind that the onus is on the Defendant on an application to set aside the judgment I consider that there is no sufficient evidence to show that the Defendant has a defence to the claim made on the First Facility. 86 In relation to the claim made in respect of the Second Facility I consider that the Defendant does not show that she has a defence to this claim. Her failure to respond to the evidence of the signing of the Business Purpose Declaration on 16 March 2006 and her failure to provide any explanation about the prima facie evidence of a draw down of the facility means that she does not show she has a defence to the claim on this facility. 87 In relation to the Third Facility there is a similar failure to respond to the evidence tending to show a draw down of the facility. More significantly, what appears in her first two Defences and in the draft Defence served on 8 or 9 February 2010 (set out in para [55] above) constitutes an admission in relation to the Third and Fourth Facilities. Moreover, paragraph 21 of the proposed Defence (set out in para [56] above) is inconsistent with the earlier forms of the Defences and there is no explanation about that inconsistency. 88 I am not satisfied that the Defendant shows that she has a Defence to the claims made.

Delay 89 The Defendant appears to offer 3 explanations for the delay. The first concerns a failure of the Bank to answer requests for particulars of the claims made. The second relates to a motor vehicle accident the Defendant said that she had on 3 September 2009. The third concerns problems she had with her former solicitor.

(a) Requests for particulars 90 It was clear from Mr McQuillen's submissions both written and oral, that this was the principal matter put forward to explain the delay. The history is as follows. After the Statement of Claim was served by substituted service in about May 2009 Ms McCann sent a handwritten letter headed "Request for further particulars". The letter said that she required all loan applications which the Bank said she completed for the alleged loans, all supporting documents for those applications and any Bank valuation reports. The Defendant was certainly not entitled to ask for Bank valuation reports. Allowing for the fact, however, that she was acting for herself at that stage it was appropriate that she sought copies of the loan applications and, possibly, supporting documents. 91 Whilst there was apparently not an answer to her letter, the Bank filed an affidavit of Rachel Tyson of 3 July 2009 which exhibited a number of documents including the 4 facility agreements and also 2 letters of offer from the Bank to Ms McCann. 92 When Johnson J struck out the first Defence Ms McCann had available the material in Ms Tyson's affidavit to enable the preparation of a further Defence. It was apparent from a perusal of that Amended Defence that the Defendant could not have had much doubt about the facilities, the subject of the Bank's claims. 93 On 14 August 2009 Mr Yakenian sent a request for further and better particulars, in what might be described as fairly usual form, asking in relation to each agreement, if it was express or partly express, if it was oral or in writing, if oral, asking for the details, if in writing asking for a copy, and if implied asking for the basis of the implication. Given the material which had been exhibited to Ms Tyson's affidavit most of this request appears fairly otiose. It is difficult to understand, if that was the information that Ms McCann needed, why she was not able to prepare a proper Defence based on the material that had already been supplied. 94 When the Amended Defence was struck out by consent on 4 September 2009 there was nothing in the Short Minutes of Order that provided for particulars either before the Amended Defence was to be filed on 18 September or at any time. 95 In my opinion, the delay in filing the Further Amended Defence permitted by the orders of 4 September 2009 has not been explained by any failure on the part of the Bank to provide the particulars requested to that time. That information was available to Ms McCann in the affidavit evidence filed and in the detailed nature of the pleading of the Statement of Claim. 96 Some emphasis was placed on a request for particulars forwarded by Ms McCann to the Bank's solicitors on 30 April 2010. This was some 6 months after judgment was signed and long after directions were made for the filing of evidence by Ms McCann in support of her first Notice of Motion to set aside the judgment. 97 Self-evidently it does not explain the delay between 4 September 2009 and 18 September 2009 to file a Further Amended Defence, nor does it explain the delay until 23 December 2009 when the first Notice of Motion to set aside the judgment was filed. It cannot also explain the delay in filing evidence in support of that Notice of Motion up until the time that Notice of Motion was dismissed.

(b) The car accident 98 The first mention of a car accident is to be found in Ms McCann's affidavit of 19 May 2010 where she says this: [8] On 3 September 2009 I met with a serious head on motor vehicle accident as a result of which I was not able to attend to my affairs for some time. I did however have Mr Yakenian still acting for me although I was not able to provide worthwhile instructions whilst recovering from the effects of the motor vehicle accident. 99 Ms McCann's affidavit sworn 23 December 2009 in support of her first Notice of Motion makes no mention at all of the motor vehicle accident. What it does record in paragraphs 11, 12, 13, 14 and 15 are various contacts that she had with Mr Yakenian and a Mr Platcher, who was assisting her to deal with the Bank's claim, in September and October 2009. It seems, despite what she says in her affidavit of 19 May 2010 that she was at least able to attend to her affairs and provide the instructions set out in that earlier affidavit. 100 Mr Yakenian has filed an affidavit and he makes no mention of the motor vehicle accident or any problems he had in obtaining instructions from Ms McCann. 101 No medical evidence is tendered to support what Ms McCann says in her affidavit of 19 May 2010. 102 I do not accept that the motor vehicle accident is an explanation for the delay.

(c) The former solicitor 103 There is some evidence in the Defendant's affidavits sworn 23 December 2009 and 19 May 2010 that there were some difficulties contacting Mr Yakenian in December 2009. This provides no explanation for delay up to that time, nor of the delays occasioned after the filing of the first Notice of Motion to set aside the judgment. 104 In my opinion, there has been no adequate explanation about the delay in complying with the Consent Order of 4 September 2009 to file a further Amended Defence. There has been no adequate explanation of delay from September to 23 December 2009 when the first Notice of Motion to set aside judgment was filed. There has been no explanation of the delays in prosecuting the first Notice of Motion and, in particular, complying with directions of the Court for the service of evidence in support of that Notice of Motion. The fact that that Notice of Motion was dismissed after a failure to comply with a number of directions is significant. 105 In Cohen v McWilliam (1995) 38 NSWLR 476 Priestley JA discussed the relationship between an explanation of delay and the question of a defence on the merits in the context of a difference of opinion with Cole JA who emphasised court efficiency. Although it might be thought that the sands of time have shifted towards the view of Cole JA (see Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 83 ALJR 951) the discussion of Priestley JA with whom Sheller JA agreed is relevant for present purposes. 106 Priestley JA makes the point that there is no authoritative decision which says that court efficiency is more important than, or takes priority over, deciding cases on their merits. At 478 he drew attention particularly to what Jordan CJ said in Vacuum Oil (at 243): And if there has been gross negligence on the defendant's part, the Court will be the more disposed to require at least a reasonably clear case of merits to be shown, to incline it to interfere.

In commenting on that passage, and what had been said in Evans v Bartlam , Priestley JA said (at 479): What it does do is make the court examine more closely the question whether there really is a triable issue going to the merits. 107 I consider that the delay in the present matter can be regarded as gross, not only because the Plaintiff has had 2 Defences struck out but has also been given leave to file 2 more, and also because of her constant failures to comply with Court directions to enable it to be seen if she has any defence to the claim. That means that she is in the position of someone who may justifiably have a further proposed Defence scrutinised extremely carefully and have appropriate inferences drawn where there has been a failure to support allegations in that Defence in the light of evidence that has been filed by the Plaintiff. 108 The present Defendant is not in the position of someone who has had a default judgment signed against them through one oversight. She has been given the opportunity again and again during a 12 month period to get her house into order, and she has failed to do so. This is despite having 2 different lawyers acting for her during that period. 109 In my view, the Defendant has not shown that she has a Defence on the merits or that, if she was permitted to defend the claim, the result would be different from the present judgment the Plaintiff has obtained.

(1) The Defendant's Amended Notice of Motion filed 9 July 2010 is dismissed.

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.