National Australia Bank Ltd v Priestley

Litigation History 14About four months after this important date, namely, on 12 September 2011, the NAB filed a Statement of Claim in this Court seeking orders for possession of the four properties which were the subject of the securities to the NAB. 15The Statement of Claim relied upon a failure of the Priestleys to repay the loan facilities in accordance with the demand made on 19 May 2011. 16The proceedings did not seek a monetary judgment against either Mr Priestley and Ms Priestley 17A defence was filed by the Priestleys on 13 December 2011. 18On 20 February 2012, because the Priestleys, who were then being represented by a lawyer, wished to file an amended defence, the matter was returned by the Registrar to the duty judge, Schmidt J. 19After a number of appearances before Schmidt J and the proffering of a number of different forms of proposed amended defences, after a hearing on 24 April 2012, Schmidt J refused leave to file an amended defence and made other orders, including that any further amended defence ought be filed within 14 days: see National Australia Bank Limited v Priestley [2012] NSWSC 387. 20The Priestleys sought leave by a motion dated 8 May 2012 to file an amended defence in different terms to their earlier pleadings. After a further hearing, leave was refused by Schmidt J: see National Australia Bank v Priestley (No 2) [2012] NSWSC 508. 21On 24 May 2012, the Priestleys, through their lawyer, indicated to the Registrar they proposed to seek leave to file a further amended defence. Whilst that intention was being given effect to, and apparently coincidentally, on 28 May 2012 the NAB secured the entry of default judgment. 22A further application to file an amended defence which necessarily involved the setting aside of the default judgment was heard by Schmidt J on 8 August 2012. Each party led evidence on the hearing of the motion, each party was represented and made extensive submissions. Her Honour reserved her decision. 23On 28 September 2012, for the reasons which she then published Schmidt J dismissed the application of the Priestleys to set aside the default judgment and for leave to file an amended defence: see National Australia Bank Limited v Priestley (No 3) [2012] NSWSC 1171. 24Among other things, Schmidt J noted that she was dealing with a sixth version of a defence which she found was still not adequately pleaded. At [32] she concluded: "The defendants were given every reasonable opportunity to put on a defence before default judgment was entered. Even now they have not brought forward a proposed defence which complies with the requirements of the rules or establishes an apparent basis for a successful defence nor have they led evidence which establishes that the case which they seek to advance has any real prospect of success". 25On 10 October 2012, the NAB filed a motion seeking the issue of writs of possession over each of the Priestleys' properties. 26On 19 October 2012, the Priestleys filed a Notice of Intention to Appeal from the judgment of Schmidt J delivered on 28 September 2012, to which I referred in [23] above. 27On 19 November 2012, the Priestleys filed their Notice of Motion seeking a stay on the execution of the writs of possession. They then appeared, without legal representation, before Davies J on 23 November 2012. 28Before Davies J, the Priestleys unsuccessfully sought a stay of the execution of the writs on two bases. The first was that no execution of the writs should occur until their appeal had been heard and determined. The second was that they were endeavouring to negotiate a sale of part, or all, of the properties to the Ngaba Elders Council at Brewarrina. 29Davies J declined on 23 November 2012, to stay the proceedings saying: "There is really no evidence upon which I could determine the stay application this morning. It would be necessary at least to look at a draft notice of appeal to make a general assessment of the likelihood of success on appeal". 30However, since the Priestleys were unrepresented, rather than dismiss the application, Davies J stood the matter over to the Duty Judge on 5 December 2012 to: "enable them to prepare a draft notice of appeal and to put on any further evidence in support of the appeal to justify the stay they now seek".

Proceedings on 5 December 2012 31On 5 December 2012, the Priestleys again appeared for themselves. They pressed for the orders sought in their Notice of Motion. 32In addition to the evidence previously relied upon before Davies J, they also relied upon the affidavit of Ms Priestley sworn 5 December 2012. 33That affidavit (paragraph 6) made it clear, as did their oral submissions, that the stay of the Court's orders was being sought not because of their desire to prosecute an appeal from the decision of Schmidt J of 28 September 2012, but rather because: "Upon further research and investigation we believe a new defence needs to take into account what previous defences did not deal with in detail, and were not brought to Justice Schmidt's attention". 34As their affidavit and submissions made clear, it was the Priestleys' contention that the NAB had failed to follow the Code of Banking Practice in dealing with them and their default on this loan in early to mid-2010. As I understand what they wish to raise by their new defence, it is that the Code formed a part of the terms and conditions of the loan facilities and that, unless the NAB adhered to the Code and all of the terms of it, including the dispute resolution provisions in clauses 35 and 36, then the NAB could not act upon the Priestleys' default, and seek to enforce the loans by way of orders for possession. 35The central complaint of the Priestleys' which underlies the allegation of non-compliance with the Code, is that in 2010 the Agri-Business Managers of the NAB, failed to act towards the Priestleys, fairly and reasonably, and in a consistent and ethical manner. It is claimed that the NAB failed to support and assist them to recover from the adverse economic effects of the prolonged drought which all farmers had been experiencing up to January or February 2010. 36The Priestleys expected that the Bank would advance further moneys to them to enable them to sow a wheat crop and further develop their other farming and grazing operations to take advantage of the good climatic seasons of 2010 and 2011, after the many years of drought. 37These were matters which had previously been raised by one or more of the defences which the Priestleys sought to file. 38Before me, whilst this was apparent and accepted by the Priestleys, what was said to be new was that when the Priestleys complained to the officers of the NAB about the NAB's failure to act appropriately towards them, the NAB did not deal with those complaints as it was obliged by the Code of Banking Practice to do. In particular, the Priestleys complained that they were forced to follow the "Farm Debt Mediation" path, the outcome of which they regard as most unfavourable, rather than to have their complaints fully dealt with both internally and externally by the NAB as the Code required. 39As well, the Priestleys argued that the terms of the Constitution by which the Code Compliance Monitoring Committee Association operated, meant that contrary to the Code, a copy of which the Priestleys were given by the NAB during 2010, the NAB did not have to investigate all complaints and hence had failed properly to investigate their complaints and submit their complaints to the monitoring regime of the Code Compliance Committee. 40Whilst the evidence provided set out these concerns and allegations, the Priestleys did not provide to the Court any further draft defence or crossclaim. They did not make it apparent how a failure of the NAB, assuming one was established, to comply with these contractual provisions, could amount to a defence of the NAB's claim for possession of the land. 41It seems that the highest which could be said in the Priestleys' favour is to be found in the following statements from Ms Priestley's affidavit of 5 December 2012, namely: "22. [If] the NAB Agri-Business Managers had dealt with our complaints as we requested, and if Mr Clyne [the CEO of NAB] had ensured that our complaints were investigated when we brought to his attention that they had not been, a deal could have been done that would not only have addressed the debt but would have seen us make a profit within about three years of these complaints" and further: "The outcome would have been very different. The NAB assisted Cubbie Station to grow cotton in 2010 when it owed as much as it was worth. With proper discussions we are sure that we could have renegotiated with the NAB to assist us again and move forward to return to profitable times".

Conclusion 42I have given careful thought to the Priestleys' evidence and submissions. It is hard to not have sympathy for them in the position in which they find themselves. 43What they have put before the Court on this application is certainly deserving of close attention by the senior management of the NAB, because if the Priestleys are correct, and their complaints have not been listened to and dealt with appropriately, then the NAB may well be exposed to both, damage to its reputation and as well, suggestions that its publicity campaign which describes itself as "the leading Agri-Business bank" may not have any substance. 44Nevertheless, the matters which the Priestleys now seek to raise do not, in the form in which they are advanced, constitute an arguable defence against the NAB's legal claim for, and its entitlement to, orders for possession of the farming properties. At their highest, it is possible that they may form a basis for a claim for damages, although the evidence presently before the Court does not suggest that any such claim is likely to be successful. 45It follows that I am not persuaded that the Priestleys have an arguable defence to the NAB's claim. In light of the fact that this is their seventh attempt to formulate a defence, even making all proper allowance for the fact that they are not legally represented, I am not satisfied that it is in the interests of justice to make the orders sought by them.

Orders 46I make the following orders: (1)I order that the Notice of Motion filed 19 November 2012 be dismissed. (2)I order the defendants to pay the plaintiff's costs.

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: 11 February 2013