National Australia Bank Ltd v Swed

Judgment 1In about late March or early April 2013, the Plaintiff served a Notice to Admit Facts and Authenticity of Documents on the Defendant. The Notice was not responded to with the result that under the Rules there are deemed admissions in relation to the facts stated in that Notice and the authenticity of the documents. 2The Defendant moves by Motion filed 6 June 2014 for leave pursuant to r 17.3 Uniform Civil Procedure Rules 2005 (NSW) to withdraw admissions deemed to have been made in respect of paragraphs 6 to 12 of that Notice to Admit Facts. 3The Plaintiff opposes the withdrawal of the admissions. 4The evidence explaining why the Notice to Admit was not responded to is thin in the extreme. The Defendant principally relies upon an affidavit sworn by his solicitor on 22 May 2014, which was an affidavit that I directed the solicitor to swear and file because he had failed over a period of time to respond to correspondence served by the Plaintiff's solicitors concerning the conduct of the case. 5That affidavit refers in general terms to a fraud perpetrated by the Defendant's wife on the Defendant, the details of which are given in greater detail in affidavits that had earlier been sworn in the proceedings by the Defendant. The solicitor's affidavit goes on to deal with the difficulties that he has had in obtaining instructions from the Defendant and the difficulties he has had in getting them to focus their attention on matters about which he needed to obtain instructions. The solicitor pointed out difficulties in relation to obtaining his and counsel's fees in their acting in the litigation because of the limited means of the Defendant. 6The affidavit, relevantly, concludes by saying this: Due to the difficulty, if not the impossibility, of obtaining instructions from the Defendant, I myself became stressed at the sight of the Plaintiff's solicitor's correspondence. It is only recently upon being able to re-brief counsel and being able to properly turn my mind to the issues in the matter...that I am able to progress the matter. 7There is no evidence about what the solicitor did on receipt of the Notice to Admit Facts, nor is there any evidence from the Defendant about whether the solicitor spoke to him about the facts that the Notice asked him to admit. 8I have had regard to the principles that have been set out in a number of earlier cases including Drabsch v Switzerland General Insurance Co Ltd (Supreme Court (NSW), Santow J, 16 October 1996, unrep) and Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738. 9I also not what was said by Campbell J in Candy v GIO General Ltd [2013] NSWSC 810 at [53] to [64] about the change in approach which has taken place since the Civil Procedure Act 2005 (NSW) came into force, by reason of ss 56 to 58, coupled with the High Court's decision in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. Campbell J points out that some of the earlier statements, particularly by Santow J in Drabsch, minimising the weight that is to be given to court efficiency and case management may no longer be good law. I have also had regard to what was said by Ward J in Le Meilleur Pty Ltd v Jin Heung Mutual Savings bank Co Ltd [2011] NSWSC 1115 at [307] - [315] and to my own summary of the principles in Commonwealth Bank of Australia v Dimitrovski [2013] NSWSC 812 at [54]. 10The application is put principally on the basis that the facts now deemed to be admitted are contrary to the evidence in the case. The facts deemed to be admitted fall into three groups. The first group consists of paragraph 6 of the Notice which says: That from on or about 25 June 2004 you knew that your wife had access to your PIN in relation to the key card account, account number 57-169-37374. 11The Defendant had previously sworn affidavits concerning this issue. The first, sworn on 31 July 2012, in a fairly summary way said that when he had discovered what the balance was owing in the account, which differed so markedly from what he expected, he discovered from examining the account that other amounts had been withdrawn from the mortgage account and transferred to his key card account. Because he believed a bank employee had wrongly done this, he notified the police. He was subsequently advised by the investigating officer that it was the Defendant's wife who had drawn the money from the mortgage account into the key card account. 12Paragraph 10 of that affidavit went on to say: I was not aware that my wife had used my bank accounts in this way, or that she had the ability to transfer money between my accounts, or have access to cash through my key card account. 13In an affidavit sworn on 20 December 2012 greater detail was given by the Defendant about what he discovered. It included acknowledgements given by his wife about how she had accessed both of his accounts and transferred the money from the mortgage account to the key card account and subsequently out of the key card account. It appears the money may have been used for gambling. 14It is apparent, therefore, that for some time before the Notice to Admit Facts was served, the Defendant had clearly identified the evidence that he would be relying on to defend the claim that was being made by the bank. That defence is also contained in the Cross-Claim that he has filed. It asserts that the money was wrongly debited by the Bank to the mortgage account as a result of the wife's fraudulent use of the account. 15In circumstances where that is the principal issue in the defence of the claim, it does not seem appropriate that the Defendant should be left in the position where a deemed admission has been made about his knowledge that his wife had accessed the key card account, and was able to do so before and during the time that she was actually accessing the account. That is what paragraph 6 of the Notice to Admit Facts purports to ask. This is not a situation where the person deemed to have made the admission leads evidence for the first time contrary to the deemed admission. 16The Bank argues that there is no clear inconsistency between the admission made by not answering paragraph 6 and what is contained in the affidavit material. It is quite rightly pointed out that the evidence given in the Defendant's affidavit is hearsay evidence from his wife. I am informed today, and have previously been informed, by those acting for the Defendant that it is intended that the wife will be subpoenaed to give evidence and, if necessary, a certificate under s 128 of the Evidence Act 1995 (NSW) will be requested in respect of the evidence she gives consistent with what is contained in the affidavit of 20 December 2012. 17For those reasons, I consider, despite the unsatisfactory nature of the evidence explaining why the admission was allowed to be made, that the deemed admission from paragraph 6 of the Notice to Admit Facts should be allowed to be withdrawn. 18The second group consists of paragraphs 7 to 11 of the Notice. These paragraphs assert that the Defendant received loan account statements and some letters from the Plaintiff between the period February 2008 to February 2012, as well as the letters identified in paragraph 11. The purpose, obviously, of asking for admissions in relation to those is that if the Defendant had received loan account statements during that period he would have been able to see that the withdrawals were taking place. 19In the Defendant's affidavit of 20 December 2012 he says in paragraph 15: I subsequently obtained copies of statements for the accounts from the Plaintiff and was alerted to a large number of transfers from the home loan account to the key card account and vice versa. I had not previously received any hard copy statements for these accounts. 20That evidence at least makes clear in a general way that at a time earlier than the Notice to Admit Facts was served the Defendant was asserting that he had not received statements on the account. There is always, of course, the difficulty of proving a negative. Often all that can be done is to make a general statement as the Defendant has made in paragraph 15. I note again that it was a statement made prior to the Notice to Admit Facts. 21The bank points to the unlikelihood of the statement in paragraph 15 being correct. This is because the Defendant does not seek to withdraw the admissions contained in paragraphs 1 to 4 of the Notice to Admit Facts. Those paragraphs assert receipt by the Defendant of various bank documents associated with the loan facility in the period 1 February 2008 to 24 May 2008. The bank says that if the Defendant admits to receiving those documents it makes it very unlikely that he did not receive the documents contained in paragraphs 7 to 11 of the Notice at least to the extent that those documents were forwarded during the same relevant period. 22But the bank, in any event, suggests that the matter goes beyond that period because in each case the documents in paragraphs 6 to 11 were forwarded to the Defendant at the address 94A Heckenberg Avenue, Heckenberg where he lives and admits to having received the other documents. 23There is obviously an issue of fact and an issue of credit arising from the statement by the Defendant in paragraph 15 of his affidavit of 20 December 2012. I do not consider that it would be just to refuse the Defendant the right to withdraw the deemed admissions in the face of the evidence in paragraph 15 of his affidavit acknowledging, as I do, that that evidence will be tested at the hearing of the matter. What is admitted by these paragraphs goes, again, to the central issue in the defence concerning the Defendant's knowledge of what was going on with his accounts. It is not appropriate to draw any inferences regarding credit on this application. 24The third document is the letter of 1 November 2011 that is referred to in paragraph 12 of the Notice. The Defendant asks for leave to withdraw the deemed admission of receipt of that letter, but paragraph 8 of his Defence itself admits that he received it. It would not be appropriate to allow him to withdraw that admission. 25For the reasons that I have given, the Defendant is permitted to withdraw the admissions contained in paragraphs 6 to 11 of the Notice to Admit Facts dated 27 March 2013. 26The Defendant has sought an indulgence of the Court by the Motion. He brought about the situation where the Motion was necessary. The Defendant should pay the Plaintiff's costs of the Motion.