Metro Finance Pty Limited v Harrison [2022] NSWDC 303

District Court New South Wales

Medium Neutral Citation: Metro Finance Pty Limited v Harrison [2022] NSWDC 303 Hearing dates: 13 July 2022 Date of orders: 1 August 2022 Decision date: 01 August 2022 Jurisdiction: Civil Before: Abadee DCJ Decision: See paragraph 71 Catchwords: GUARANTEE AND INDEMNITY – applications for summary dismissal or strike out of defence of guarantor – whether arguable defence of set-off based on allegedly wrongful possession of borrower's equipment – whether arguable defence based on creditor's agent's alleged promise not to sue Legislation Cited: Civil Procedure Act 2005 (NSW) ss, 56(3), 61(3) Uniform Civil Procedure Rules 2005 (NSW) rr 12.7, 13.1, 13.4, 14.28, 14.3 Cases Cited: Bank of Western Australia v Hoy [2012] NSWSC 518 Chalak v G & G Mikhael Pty Ltd [2022] NSWCA 116 Hobbs v ASIC [2013] NSWCA 432 Smith v Skinner [2018] NSWDC 197 State Bank of NSW v Chia [2000] NSWSC 552 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Category: Principal judgment Parties: Metro Finance Pty Limited (plaintiff) Ms J Harrison (second defendant) Representation: Counsel: Mr Collins for the plaintiff Mr Green for the second defendant

Solicitors: Hilton Bradley for the plaintiff JML Rose for the second defendant File Number(s): 2020/00277503 Publication restriction: Nil

Judgment

Background 1. This proceeding commenced on 24 August 2020. It started as a straightforward action by the plaintiff against two guarantors (the first and second defendants) for default in the obligations to be performed by the corporate borrower under a secured loan agreement which the plaintiff alleged was entered into on 25 October 2018. After various iterations of the pleading, on 16 August 2021, the corporate borrower was joined to the proceeding as a third defendant. Before then, the plaintiff obtained a default judgment against the second defendant on 17 November 2020, only for that to be set aside (by consent) on 27 May 2021. 2. On 6 September 2021, all three defendants filed a Defence. Partly piggy-backing on the facts contained within the Defences, on the same day, one of the guarantors (the first defendant) and the borrower (the third defendant) cross-claimed against the lender seeking damages for breach of contract. 3. On 8 November 2021, the plaintiff amended its pleading again (the Third Further Amended Statement of Claim (the 'TFASC')) after it had exercised a power to sell goods as security. On 7 December 2021, the defendants were directed to file amended defences by 15 December 2021. That order was not complied with. 4. On 8 February 2022, the plaintiff served its evidence. 5. A show cause hearing, for why the defendants' Defences and cross-claim should not be struck out, occurred on 8 March 2022 and the defendants were directed to serve any amended cross-claim and evidence by 1 April 2022. The defendants did not comply with that direction. 6. On 29 April 2022, the plaintiff filed a motion applying for summary judgment for the sum of $73,577.12 and the striking out or dismissal of the defences. By that date, the defendants had still not served any defences, and amended cross-claim or evidence supportive of the cross-claim. 7. That motion was somewhat overtaken by events. On 10 May 2022, the cross-claimants purported to assign to Mr Ross Harrison, who is the son of the first and second defendants, the cross-claim. This occurred on the same day that the third defendant was wound up by court order and a day before a sequestration order was made against the first defendant. 8. The first defendant is now bankrupt and the third defendant is now in liquidation. Amongst other things, the plaintiff now moves on its motion of 29 April 2022 but, in addition, it sought leave to discontinue its claims against the furst and third defendants in its most recently amended pleading. It also sought the dismissal of the cross-claim. 9. On 13 July 2022, when sitting as List Judge, after giving short reasons in respect to both applications, I acceded to the plaintiff/cross-defendant's applications to discontinue the claims against the first and third defendants and the dismissal of the cross-claim. 10. This left the plaintiff's applications against the second defendant, being for summary judgment, or alternatively, for the striking out of the second defendant's defence. The parties' legal representatives agreed I should consider the summary judgment application first; although, at least in terms of any discretionary considerations, there is some overlap between the two.