DURKAN v COMMONWEALTH BANK OF AUSTRALIA LTD SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL MAHONEY ACJ and PRIESTLEY AP 26 August 1996 [1996] NSWCA 161 Mahoney ACJ. This is an application for leave to appeal against a judgment of Mr Justice Abadee given on 1 July 1996 in matter number 11563/96 and, it may be, for an extension of time within which to bring that application. The court is of the opinion that the application should not be granted and that it should be dismissed. It would follow that it should be dismissed with costs. Ordinarily the court does not give reasons for the grant or refusal of leave to appeal applications. In general the reasons appear adequately in the dialogue which the court forces upon counsel who make applications of this kind. However, there are one or two matters in the present case which make it expedient that the court add some comments. The property in question is, it would appear, the subject of two mortgages; one described as the business mortgage given in August 1986 and apparently registered number W533859 under the Real Property Act and the second described as the house mortgage given apparently in January 1991 and registered number Y828874. The bank is proceeding in the instant proceeding in respect of the house mortgage. As the judge has said in his judgment it seeks no more than possession under the house mortgage. It is conceded that there has been default in respect of both of the mortgages. The defence which has been sought to be set up by Mr Colyer is — and I do not purport to cover all of the variations of the submissions that have been made by him — essentially a defence by way of equitable set-off. It is claimed that, in the circumstances set forth on p 4 of the judge's judgment or some variation of what is there said, there has arisen a right in Mrs Durkan to have from Mr Kelly the receiver — and, if Mr Kelly was relevantly acting as agent for the bank from the bank — damages or compensation of some kind which she would hope she could set off against her liabilities to the bank. It has been claimed that summary judgment should not be given in respect of possession of the property under the house mortgage because of the claim that there is the right to damages or compensation in respect of what has been done under the business mortgage. It is unnecessary for the court to examine in detail the circumstances in which a claim for damages for compensation under one transaction can be set off by way ofequitable defence in respect of another transaction. Mr Colyer referred the court to a discussion of this matter. However, in the present case, the court has pressed Mr Colyer from time to time to indicate precisely what is the relationship between the two transactions such that a right of equitable set-off should be available in respect of the house mortgage. It is sufficient to indicate that the court is not satisfied that there is the relevant connection. For that, and for other reasons to which it is not necessary to refer, the court has come to the conclusion that leave to appeal should not be granted. 2 UNREPORTED JUDGMENTS However, as evidenced by what has been said during the proceedings and is recorded in the transcript, the court has acted upon the basis that the claim by Mrs Durkan to recover damages or compensation or otherwise to have relief in respect of the transaction referred to on p 4 of the judge's judgment, remains enforceable, if it is enforceable, by her against the bank. The matter has proceeded upon the basis that nothing which is done, and nothing which arises from, the dismissal of the present application would in any way prejudice such claim as she may have in respect of those matters. In the circumstances the order is, in my opinion, that the application for leave to appeal should be dismissed with costs. Priestley AP. I agree. Orders accordingly.