Xu v Henry Davis York & Ors

Dey v Victorian Railways Commissioners [1949] HCA 1; 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (N.S.W) and Others [1964] HCA 69; 112 CLR 125 CASES CITED : Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 Westpac Banking Corporation v Li Na Xu (NSWSC, Kirby J, 25 June 2010) Westpac Banking Corporation v Li Na Xu (NSWSC, Fullerton J, 10 August 2010) Xu v South Eastern Sydney and Illawarra Area Health Services (NSWCA, Giles JA, 21 June 2010)

Li Na XU (Plaintiff) PARTIES : Henry Davis York Lawyers (First defendant) Westpac Banking Corporation (Second defendant) Andrew Jones (Third defendant)

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

JUDGMENT 1 HIS HONOUR: By notice of motion filed 20 September 2010 the defendants' seek to strike out the plaintiff's statement of claim filed on 23 August 2010. The motion seeks the following orders: · The proceedings be dismissed generally pursuant to rule to 13.4 (1)(b) of the Uniform Civil Procedure Rules 2005.

· In the alternative, the statement of claim be struck out pursuant to rule 14.28(1)(a) and (b) of the Uniform Civil Procedure Rules 2005.

· The plaintiff pay the defendants' costs on an indemnity basis.

2 The motion was initially listed for hearing on 29 September 2010. On that date, the plaintiff failed to appear and the matter was adjourned for hearing on 8 October 2010 whereon the plaintiff again did not appear. Mr Ran Tao, a solicitor in the employ of the first defendant, in an affidavit affirmed on 7 October 2010 has set out attempts made to procure the attendance of the plaintiff at the hearing of the motion. In a facsimile addressed to both the defendants' counsel and solicitor, the plaintiff advised that due to her impecuniosity she was unable to attend the hearing of 29 September 2010 but would be attending on the Supreme Court on 8 October 2010 for a different matter. Presumably pursuant to such notice Registrar Bradford adjourned the matter on 29 September 2010. The first defendant communicated such orders to the plaintiff in a letter dated 30 September 2010.

3 Having regard to the notice given to the plaintiff, the plaintiff's own suggestion that she would be at the Supreme Court on 8 October 2010 and her unexplained absence, I was satisfied that the plaintiff was aware of the motion being listed for hearing and determined that the matter should proceed in her absence. As Allsop ACJ said in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 (at [36]): The Civil Procedure Act, ss 56 to 61 brings about a new statutory balance among various factors in litigation including court and party efficiency and the delivery of individual justice. Delay and case backlog are not merely factors affecting the public cost of delivering justice, they corrode the ability of the courts to provide individual justice.

4 That remark is, in my view, apposite in determining to proceed with the present motion in the plaintiff's absence. In doing so, I was conscious of the nature of a summary dismissal application, especially it being an extreme measure and the strict threshold that must be satisfied prior to the exercising of this power.

5 Before dealing with each paragraph of the statement of claim, I shall briefly summarise the history to this matter as it assists with understanding the allegations made by the plaintiff.

6 The plaintiff was the registered proprietor of a property known as 38 Malin Road, Oaks Flats NSW 2529 (the property). The plaintiff mortgaged the property to the second defendant, Westpac Banking Corporation, and in return the second defendant advanced monies to the plaintiff pursuant to a loan contract. The plaintiff defaulted on the loan contract and the second defendant retained the first defendant, Henry Davis York Lawyers, to act on its behalf in the recovery proceedings. A statement of claim was filed and the third defendant, Mr Andrew Jones, was engaged as a licensed process server for the purpose of serving the originating process. A defence was not filed and steps were taken for default judgment to be entered on 10 February 2010 in which the plaintiff was ordered to pay the sum of $320,778.71, as well as surrender possession of the property.

7 The second defendant filed a notice of motion seeking the issue of a writ of possession. The plaintiff was expected to deliver vacant possession of the property by 8 April 2010. On 7 April 2010, the plaintiff was granted a stay of the writ of possession until 15 April 2010. On 12 April 2010, the plaintiff filed a notice of motion in which she sought an order that she be permitted to stay on the property for a further year, and an order that execution of the writ of possession be stayed until further order.

8 On 15 April 2010, a senior deputy registrar dismissed the plaintiff's motion. On the same day, the plaintiff filed a further motion seeking to set aside both the default judgment and the judgment of the senior deputy registrar. The plaintiff's notice of motion came before the Court on 11 June 2010. There was no appearance by or for the plaintiff. The registrar made an order adjourning the matter until 25 June 2010 whereupon Kirby J dealt with the plaintiff's motion. His Honour granted an adjournment to enable the plaintiff to assemble evidence, including, in particular, material evidencing the progress of separate litigation she had instituted against the South Eastern Sydney and Illawarra Health Service and the Department of Community Services for damages she claimed to have suffered, as well as her own appraisal of the value of the mortgaged property, and to provide evidence of the alternatives she may have available to repay or refinance the debt to the bank. His Honour also noted the plaintiff's undertaking to pay $200 per week to the second defendant during the period of adjournment: Westpac Banking Corporation v Li Na Xu (NSWSC, Kirby J, 25 June 2010).

9 The matter came before Fullerton J on 10 August 2010 whereupon the notice of motion of 15 April 2010 was dismissed: Westpac Banking Corporation v Li Na Xu (NSWSC, Fullerton J, 10 August 2010).

10 A final notice to vacate was served on the plaintiff with the date of eviction nominated as 23 August 2010. The plaintiff's final attempt for a stay of the writ of possession was refused by Studdert J in chambers on 20 August 2010.

11 In the present proceedings, Mr Koch, who appeared for the defendants, canvassed each of the allegations discernable from the statement of claim to demonstrate that this was a matter clearly contemplated by the power to dismiss proceedings pursuant to the Uniform Civil Procedural Rules, r 13.4 (1)(b). Alternatively, the defendants' relied on r 14.28(1)(a), although I indicated to Mr Koch that it was not necessary for submissions to be made pursuant to that rule.

12 There is some force in the defendants' position and I shall briefly deal with my own assessment of the allegations contained within the statement of claim.

13 Paragraphs one to three are seemingly complaints against the process by which the statement of claim of 31 August 2009 seeking judgment and possession of the property was served on the plaintiff. Such matters were agitated in some of the earlier proceedings to which I have referred and there is no cause to revisit them here. Suffice to say, the plaintiff has not pleaded any proper basis from which it could be concluded that the defendants' had breached rules relating to service.

14 Paragraphs four, five, nine, ten, eleven, eighteen and nineteen contain complaints about the consequences of forfeiting possession of the property. However, the plaintiff had acknowledged before both Kirby and Fullerton JJ that she did not contest the fact that she borrowed money from the bank secured by a mortgage and that she defaulted on the loan contract. There is no merit to the allegations contained within these paragraphs. It is an unfortunate, but legitimate, incident of loan agreements that a failure to satisfy the repayments results in a forfeiting of possession and sale of the mortgaged security.

15 Paragraphs six and seven are unintelligible although Mr Koch attempted to assist the Court by suggesting that the complaints may relate to cost orders made in respect of the mortgage default proceedings. If that is the case, then clearly this is an inappropriate forum for a review of those orders.

17 Paragraphs 13 and 14 are unintelligible although Mr Koch suggested that the complaints may relate to the plaintiff's previous attempt to have the possession proceedings joined with other unrelated proceedings against South Eastern Sydney and Illawarra Area Health Service and the Director General of the Department of Community Services. Giles JA dismissed this application and, again, there is no basis on which this Court should revisit that decision: see Xu v South Eastern Sydney and Illawarra Area Health Services (NSWCA, Giles JA, 21 June 2010).

18 I had great difficulty distilling the complaints contained within paragraphs 15 and 17. Mr Koch suggested that they relate to the plaintiff's alleged need to retain possession of the property as evidence for the purpose of prosecuting claims against the State Government and the Area Health Service. If so, Fullerton J dealt with that complaint: see Westpac Banking Corporation v Li Na Xi (NSWSC, Fullerton J, 10 August 2010), at [17]. Otherwise, paragraphs 15 and 17 are unintelligible.

19 Paragraph 16 seemingly refers to the orders contained within the judgment of Kirby J to the extent his Honour acknowledged the plaintiff's undertaking to pay $200 per week to the second defendant during the short adjournment period. While the paragraph is ambiguous, the plaintiff purportedly alleges the order was to remain in effect until such time that her other litigation resolved upon which she would have enough money to discharge the loan amount owing to the second defendant. The plaintiff's allegation is founded upon a misconceived construction of the orders made by Kirby J, which were intended to operate until the resolution of the motion, ultimately decided by Fullerton J on 10 August 2010.

20 The defendants' motion seeks an order that the proceedings be dismissed generally pursuant to rule 13.4(1)(b) of the UCPR. That rule provides: "(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) ….

(b) no reasonable cause of action is disclosed… … the court may order that the proceedings be dismissed generally or in relation to that claim".

21 The rule gives the court discretion to dismiss a claim where no reasonable cause of action is disclosed by the pleadings. This power should only be exercised in cases where it is very clear that there is no real question to be determined by the court: Dey v Victorian Railways Commissioners [1949] HCA 1; 78 CLR 62, per Dixon J at 91. Various expressions have been used to describe the test to be satisfied prior to the summary dismissal of proceedings such as, "so obviously untenable that it cannot possibly succeed" and "manifestly groundless": General Steel Industries Inc v Commissioner for Railways (N.S.W) and Others [1964] HCA 69; 112 CLR 125, per Barkwick CJ at 129.

22 It is tolerably clear from the pleadings that the plaintiff wishes to express her grievances against the process by which she forfeited possession of her property as well as the consequences of forfeiting possession. The former complaints were agitated before the senior deputy registrar on 15 April 2010 and re-agitated before Fullerton J on 10 August 2010. The statement of claim represents an abuse of process to the extent it seeks to re-agitate those issues previously determined. In respect of the latter, the plaintiff has previously conceded that she defaulted on the loan contract that ultimately gave the second defendant the right to take possession of the property. While one can sympathise with the plaintiff's circumstances, she has defaulted on a loan contract and the second defendant has lawfully exercised its rights pursuant to that contract. Indeed, the second defendant's right to possession of the property was delayed by various stay applications. The defendants should not be subjected to further litigation and unnecessary costs. The plaintiff's statement of claim does not disclose any cause of action, quite apart from a reasonable one. In my view, this is a very clear case in which there is no real question of fact or law to be determined. Moreover, I cannot imagine anything of substance that the plaintiff could have contended in oral submissions, if she had appeared, that would have persuaded me to a different conclusion. Nor can I envisage any amendments to the pleadings that would bring to light a reasonable cause of action.

23 Finally, the defendants seek an order that this court depart from the usual order as to costs and grant costs on an indemnity basis. In view of the complete failure to plead a cause of action, or facts upon which a cause of action could be founded, and the plaintiff's unexplained absence, there is some force in the defendants' position. It is of course important that parties are responsible for proceedings that they initiate and, in particular, the management of those proceedings during the interlocutory phase, including being available at the hearing of motions. Notwithstanding these observations, the plaintiff has no doubt endured a difficult period during the possession proceedings, English is clearly her second language and, being without legal assistance, presumably unaware of the shortcomings in her pleadings. For these reasons, I will make the usual order as to costs.

24 I make the following orders: 1. Proceedings 2010/279675 are dismissed pursuant to Uniform Civil Procedure Rules 2005, r 13.4(1)(b);

2. The plaintiff to pay the defendants' costs on the ordinary basis. **********

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