Singh v Ginelle Pty Ltd

See also Singh v Secretary, Department of Family & Community Services [2001] FCA 1281 (Full Federal Court, 21 September 2001) at [10]. 36 I do not agree that the court has a free ranging discretion to set aside a judgment entered by consent if it is in the interests of justice so to do. Rather, Harvey v Phillips identifies a specific set of principles by reference to which that power is exercised, namely "a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it". 37 By contrast, the Singhs submit that Uniform Civil Procedure Rule 36.16(2) confers on the court power to set aside a judgment that has been given or made in the absence of a party. That rule provides: "(2) the court may set aside or vary a judgment or order after it has been entered if: … (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order …" 38 The Singhs submit that it is well established that that jurisdiction is exercised if an explanation is provided for the absence of the party, and it is established that that party has a bona fide defence on the merits (eg Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503). They submit it is the latter principle, rather than the former, which should be applied in the present case. 39 I do not agree. Even though the judgment of 1 December 2009 was given in the absence of the Singhs, it was also given in accordance with their consent. Even if UCPR 36.16(2) provides a procedural means by which an application to set aside the judgment might be made, proper application of principle requires that, when a judgment is both entered by consent and in the absence of a party, such an application be decided in accordance with the standards appropriate to setting aside of consent judgments. There is no sensible reason why the principles ought be any different if a party who has consented to a judgment is present when the court pronounces judgment in accordance with that consent, by comparison with the situation if a party who has consented to judgment is not present when the court pronounces judgment in accordance with that consent. 40 The Singhs submit that the judgment could be set aside or varied if section 11 of the Consumer Credit Code applied, quite apart from the circumstances in which the general law provided a basis for setting aside the contract contained in the settlement agreement. This submission (which was contained in the written submissions, and because of the absence of counsel from the hearing could not be elucidated in the oral hearing) was not very clear about whether it was directed to the Credit Code applying to the original loan agreement, or applying to the settlement agreement entered on 9 June 2009. However, this lack of clarity does not matter, as there was no evidence before Latham J that enabled the Singhs to make an affirmative case that the Consumer Credit Code Declaration was incorrect, or (to invoke the test in section 11(3) of the Consumer Credit Code) that there was a basis for the Respondent knowing or having reason to believe that the credit was in fact to be applied wholly or predominantly for personal domestic or household purposes. 41 The submissions of the Singhs about the principles in accordance with which a consent judgment can be set aside do not engage with the facts of the present case. That is because the reasoning of Latham J, that I have set out above, does not invoke any particular principles for the setting aside of judgments - it simply says that there was no evidence to justify it. Her Honour was right in saying so. 42 The Singhs submit that they had raised defences that this was purely asset-based lending, of the type referred to in Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41, and that it was not a loan for business purposes, and that in the interests of justice they ought to have been given the opportunity to run those defences. 43 The filed Defence did not make any allegation about asset based lending. Mr Taylor, in oral submissions on 9 March 2010, said to the judge that, as an alternative submission to the Consumer Credit Code applying, "… we would argue the loan is unconscionable having regard to the nature of the loan, and the interest rate. My clients are keen, and have instructed me, to seek discovery in relation to the Ginelle loan, particularly correspondence between Ginelle and University Securities. The interest rate related to this loan does seem to be very high. I would suggest to your Honour it is incumbent upon lenders to have at least some regard to the ability of interested parties to repay the loan being extended and the question would be whether Ginelle made adequate inquiries, as they are bound to do, in relation to the Singhs' ability to repay the loan. If that was not done that raises a question as to whether or not the loan was unconscionable even if the Consumer Credit Code is not held to apply." 44 That submission is not a clear allegation of asset based lending. Rather, it is a submission that further enquiries should be made concerning topics that were relevant to whether there had been asset based lending. The Singhs submit that it was in the interests of justice that they be given the opportunity to run those "defences". Insofar as that submission is based on supposing a freestanding power to set aside a consent judgment when it is in the interests of justice so to do, that supposition is not the law. 45 Before Latham J on 9 March 2010, it was the Singhs who were the moving party. They were urging the court to make the orders identified in the Notice of Motion filed 1 March 2010. There was a judgment of the court in existence. That judgment itself created rights and liabilities that, while the judgment was on foot, existed independently of any rights or liabilities that might have given rise to the judgment. Any party who sought to overturn the judgment had an onus of establishing that there was sufficient reason for it to be overturned. I do not accept the submission of the Singhs to the effect that it is the Respondent who bore the onus of rebutting claims of irregularity that the Singhs made in their defence in the Possession Proceedings, or in contentions from the bar table. Matters that might have been a basis on which the Singhs could oppose judgment being given against them in the Possession Proceedings, or obtain a reduction in the amount of their debt by cross-claim brought in the Possession Proceedings, had changed their character once the court judgment was entered. From that time, if that judgment was to be set aside, it was the task of the Singhs to prove the facts that warranted its being set aside. 46 There was no statement of assets and liabilities of the Singhs put in evidence before Latham J, or any evidence about their income and outgoings, from which her Honour could have concluded that there was a real case to be made that the Respondent was looking primarily to sale of the security, rather than to the ability of the Singhs to service the loan from sources other than the security itself. To the contrary, there was evidence of the Singhs making statements to the Respondent that they could afford to service the loan, and of their long-term accountant supporting that statement. The Singhs submitted to this Court (though not to Latham J) that their loan could not have been for business purposes, because it was to replace a loan that was itself a loan that had refinanced a housing loan. However, there was no evidence before Latham J that gave reason to believe that that was known to the Respondent, or that the Respondent ought to have been put on enquiry about it. To the contrary, there was evidence that the Singhs had signed documentation asserting that the loan was for business purposes, and had done so before a solicitor, who had given them advice about the loan. 47 A particular submission that the Singhs' counsel made to Latham J was that he was instructed that the Consumer Code Declaration had the words "refinancing business loan" written in a hand other than that of one of the mortgagors. Neither the Singhs nor the Respondent put evidence before Latham J about who had actually written those words. Before us, the Singhs submit that the onus was on the Respondent to do so, and that Latham J erred in basing her judgment simply on a lack of evidence. That submission has an air of high unreality when Mr and Mrs Singh executed the Consumer Credit Code Declaration before their own solicitor. Further, if it was essential to whether the Credit Code applied that the Consumer Credit Code Declaration had been completed in the mortgagor's own handwriting (a matter about which no submissions were made to us, and that I refrain from expressing any view about), by returning the Declaration executed, the Singhs made a representation that the handwriting was that of the mortgagor, as the form itself stated. As well, though, for the reasons I have given, in principle the onus of showing an irregularity concerning the entering of the loan agreement, or the agreement of 9 June 2009 lay on the Singhs, and before Latham J there was no actual evidence adduced by them (who were the people in a position to know) about whose handwriting was on the form. 48 Another submission is that the agreement of 9 June 2009 was made without the Singhs understanding the document, or under the influence of a mistake. The affidavit of Mr Singh that was before Latham J did not assert lack of understanding of the agreement, or any mistake concerning it, nor was any argument to that effect put to Latham J. 49 The Singhs submit that the judge failed to take into account a relevant consideration, namely Mr Singh's affidavit of 1 March 2010. That submission is mistaken. Para [9] of her Honour's judgment gave a précis of that affidavit, that seems to me to be a fair summary. 50 The Singhs submit that the judge should have considered whether the Credit Code applied to the transactions. If the Singhs wanted to succeed in an argument that, in some fashion, the agreement of 9 June 2009 was vitiated because either it, or the underlying mortgage transaction, did not comply with the Credit Code, it would be necessary for them to put forward evidence leading to that conclusion. This they did not do. 51 The Singhs contend that the judge erred in failing to allow them further time to gather evidence. At no time was the Singhs' application cast as an application for an interlocutory injunction or stay pending a later final hearing on the question of whether the agreement dated 9 June 2009 should be set aside, and the judgment set aside. The case was only ever put to the judge as one in which all the orders in the Notice of Motion were sought. It was for the Singhs to elect whether they wished to proceed with the Notice of Motion, or only part of it, and to argue for any other orders they wished to obtain at some later stage, when they were better prepared. 52 In these circumstances, all the attacks on the judgment of Latham J fail. As the reasons why the attacks fail involves some considerations of matters of law, it is in my view appropriate to grant leave to appeal against the decision of Latham J, but to dismiss the appeal, with costs.

The Application Concerning the Decision of Palmer J 53 On 16 March 2010 the Singhs applied to Sackville AJA to have the Writ of Possession stayed pending an appeal from Latham J's decision. That application was refused, on the ground that the appeal had no reasonable prospects of success: Balbir Singh v Ginelle Pty Ltd, NSWCA, 16 March 2010, unreported, and no medium neutral citation. 54 On 5 May 2010 Mr Singh approached Palmer J, who was then the Duty Judge in the Equity Division. By that time the Singhs had left the mortgaged property, and an auction sale of the mortgaged property was imminent. Mr Singh sought to file in court, and have argued forthwith, a Summons. The draft Summons that he brought with him to court sought the following orders: "1 An order to stay the sale of land at 20 Spencer Road, Londonderry, NSW 2 An order that the agreement dated 9 June 2009 in annexure 'B' in these proceedings is unconscionable and deceptive. 3 An order for a joinder with the first defendant, Mr James Barton Carter and Mr Marcus Young to claim relief and damages." 55 Mr Carter had been given some notice of the intended hearing, and was present in court. 56 Mr Singh had made a much more detailed affidavit than the one that was before Latham J. It was not legally well focused, but raised certain topics of complaint that had not been raised before Latham J. In describing them, I will ignore the fact that many of the paragraphs by which Mr Singh sought to raise these topics of complaint would have been inadmissible if objected to, and to some extent I will recast in more precise terminology matters that the affidavit raises in an incomplete or diffuse way. 57 The new topics of complaint seemed to be:

(1) Latham J had denied the Singhs natural justice by failing to call witnesses and to investigate the matters of complaint that were outlined to her.

(2) The broker through whom the loan from the Respondent had been arranged had, on Mr Carter's instructions, declined to make available to Mr Singh the loan application form and the valuation report.

(3) The valuation that was obtained before the loan was granted had treated the whole of the property as residential, whereas a significant part of it had existing use rights enabling it to be used for business purposes. Mr Carter and the broker had done this deliberately, so as to compel the Singhs to obtain a second mortgage, so that the broker and Mr Carter could make more money out of it.

(4) When the matter had been before Adams J on 12 May 2009, Adams J had directed Mr Young to contact the Law Society concerning the Singhs application for pro bono legal assistance, but Mr Young had not done so.

(5) Before the agreement was entered on 9 June 2009, Mr Carter had made a representation that he would never sell the Singhs' house, but he had refused to include that in the written agreement because the Singhs should trust him and take his word for it.

(6) The Law Society's letter refusing pro bono assistance on the ground that there was no reasonable prospects of success was itself misleading, because in truth there were prospects of success.

(7) The purpose of Mr Carter and Mr Young in proposing the agreement on 9 June 2009 was to cheat the Singhs out of the protection that they would otherwise have had under the Consumer Credit Code.

(8) The agreement of 9 June 2009 was entered under duress, because Mr Carter and Mr Young told him that if the Singhs did not agree to it they (Mr Carter and Mr Young) would go into court and ask the judge to make the order for possession. 58 The hearing before Palmer J proceeded without the draft summons being filed. After the judge had read Mr Singh's affidavit, and heard submissions from Mr Singh, the judge expressed the view that the application should be dismissed. The judge gave Mr Singh the opportunity of not filing the summons, and thus avoiding paying a filing fee. The judge also said (correctly) that if Mr Singh wished to appeal to the Court of Appeal against his decision, it would be necessary for the summons to be filed. The judge then delivered his reasons for concluding that the application should be dismissed: Singh & Anor v Ginelle Pty Ltd [2010] NSWSC 442. Having heard those reasons, Mr Singh stated that he wished to appeal. The judge fixed a time (later extended) by which the summons was to be filed. 59 In fact the summons filed differed somewhat from the summons that had been the subject of the discussion in court on 5 May 2010. The orders it sought were, in substance: "1. An order to stay the sale of land at 20 Spencer Road, Londonderry NSW 2753. 2. An order that agreement dated 9 June 2009 in ANNEXURE 'B' in these proceedings is unjust, as per S7 of Contract Reviews Act 1980 . 3. An order for a joinder with the First Respondent, Mr James Barton Carter and Mr Marcus Young to claim relief and damages as for S9 of Contracts Review Act and section 52 of Trade Practices Act 1974 ." 60 The judge's reasons included: "12 The submissions made today before me by Mr Singh simply repeat the essence of the complaints which were agitated before Latham J, and before Sackville AJA in the Court of Appeal. 13 I have read an affidavit of Mr Singh in which he complains about the conduct of the mortgagee's solicitor, Mr Carter, and its Counsel, Mr Young. That conduct seems to be concerned with, firstly, failure to support an application for pro bono assistance from the Law Society's pro bono scheme and, secondly, some form of coercion or intimidation inducing the signing of the compromise agreement which gave rise to the entry of judgment. 14 Having read the affidavit, I can see nothing whatsoever in it to justify the complaint of any form of misconduct of deceptive behaviour either on the part of Mr Carter or Mr Young. I think that Mr Singh, with respect, has misunderstood what Adams J said in advising the solicitors for the mortgagee to write to the Law Society about the pro bono application of Mr and Mrs Singh. All that his Honour suggested was that they write in order to inform the Law Society that if a pro bono assistance were given then the Law Society should inform the mortgagee plaintiff of that position as soon as possible so that everybody concerned in the proceeding would know what necessary steps needed to be taken to bring the matter forward for trial." 61 At an interlocutory hearing relating to those applications that Giles JA heard on 21 October 2010, Mr Kumar, who was then counsel for the Singhs, informed the court that the application to join Mr Young and Mr Carter as parties was not pressed. At the hearing before us, Mr Singh adhered to that position. It is therefore not necessary to give any further attention to prayer 3 of the draft Summons or the Summons as filed. 62 I do not agree that the submissions that Mr Singh made to Palmer J repeated the essence of the complaints that were agitated before Latham J and before Sackville AJA. If one ignores the failures to comply with the law of evidence in Mr Singh's affidavit (which were quite substantial), and was not too particular about requiring proof of all elements of the causes of action that the affidavit was groping to articulate, there were some new matters of complaint. However, even though there were some differences in expression, the relief sought before Palmer J was within the ambit of the relief that had been sought before Latham J. 63 The proceedings before Latham J had taken the form of a Notice of Motion filed in the Possession Proceedings. To the extent that the orders sought to stay execution of the Writ of Possession that had issued in those proceedings, that procedural frame was appropriate. When the application to set aside the judgment of 1 December 2009 was based on a challenge to the agreement of 9 June 2009, both the application to set aside the agreement of 9 June 2009, and to set aside the judgment of 1 December 2009, should more appropriately have been brought by independent proceedings: Re Jay-O-Bees Pty Ltd (in Liq); Rosseau Pty Ltd (in Liq) v Jay-O-Bees Pty Ltd (in Liq) [2004] NSWSC 818; (2004) 50 ACSR 565 at [64]-[72]; Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 697 per Handley JA. However, as Handley JA said in Spies at 697, "an objection to the court's jurisdiction being invoked by notice of motion must be taken at once or will have been waived." 64 When Latham J has heard, and rejected, an application for what is in substance final relief setting aside the agreement of 9 June 2009, it is an abuse of process for the Singhs to approach the court at first instance again, seeking in substance the same relief on the basis of what they perceive to be improved evidence or more powerful causes of action. When the application for a stay was parasitic upon the application to set aside the agreement of 9 June 2009, failure to set aside the agreement of 9 June 2009 would inevitably bring failure of the application for a stay. That is a sufficient reason why the application made to Palmer J was doomed to fail. More detailed reasons could be given why certain of the additional matters that Mr Singh sought to raise before Palmer J would not succeed, but in light of the view I have just expressed there is no point in going into them. 65 In my view leave to appeal against the decision of Palmer J should be refused, with costs.

(1) Grant leave to appeal from the decision of Latham J on 9 March 2010 in proceedings 292530 of 2009 in the Common Law Division of the Supreme Court of NSW but dismiss the appeal with costs.

(2) Application for leave to appeal from the decision of Palmer J given on 5 May 2010 in proceedings 113436 of 2010 in the Equity Division of the Supreme Court of NSW dismissed with costs. 67 HANDLEY AJA: I agree with Campbell JA.

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