New South Wales Supreme Court CITATION : MCDONALD v MCDONALD [1999] NSWSC 756 CURRENT JURISDICTION : COMMON LAW FILE NUMBER(S) : 11963/1998 HEARING DATE(S) : 12 July 1999 JUDGMENT DATE : 28 July 1999 BARBARA JOY MCDONALD PARTIES : v FRANCIS NEIL MCDONALD & ANOR. JUDGMENT OF : Master Malpass PLAINTIFF: MR A LO SURDO COUNSEL : FIRST DEFENDANT: MR D R PRITCHARD SECOND DEFENDANT: MR J WILSON PLAINTIFF: HEIDTMAN & CO SOLICITORS : FIRST DEFENDANT: P W TURK & ASSOC SECOND DEFENDANT: STONE & PARTNERS CATCHWORDS : Summary judgment; striking out of defence; no question of principle. ACTS CITED : Farm Debt Mediation Act 1994, s 8. CASES CITED : Webster v Lampard (1992-1993) 177 CLR 598. DECISION : SEE PARAGRAPHS 22-23. THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER MALPASS WEDNESDAY 28 JULY 1999 11963/1998 BARBARA JOY MCDONALD v FRANCIS NEIL MCDONALD & ANOR. JUDGMENT 1 The proceedings were commenced by a Statement of Claim filed on 28 August 1998. The process named one defendant only (the present first defendant). The second defendant was added as a party on 12 December 1998 (on an application made by him). 2 The late Graeme Charles McDonald (the deceased) was killed in a light plane crash in July 1975. The plaintiff is the widow of the deceased. They had separated prior to his death. The first defendant is a brother of the deceased. The second defendant is the son of the deceased and the plaintiff. He has a sister who is not a party to these proceedings. 3 The first defendant is the executor and trustee of the will of the deceased. The beneficiaries are the plaintiff, the second defendant and his sister. 4 For some time after 1976, the first defendant conducted a family farming business (including on the property known as South Studleigh). In his capacity as trustee, the first defendant remains the registered proprietor of the property. In October 1990, he gave a mortgage over the property to Elders Rural Finance Limited (Elders). There was default under this mortgage. 5 Until 1 July 1992, the first defendant resided at 208 River Road Deniliquin. Between mid 1992 and 6 January 1994, both the plaintiff and the second defendant resided at the property. The second defendant went into occupation after tenants vacated the property. He continues to reside at the property and operates a farming business thereon. He does repair and maintenance work and pays for running expenses. In March 1993, the first defendant commenced to reside at 147 Mulgrave Road, Cairns. 6 The second defendant claims certain arrangements have been made with the plaintiff. He claims inter alia to be entitled to remain in possession of the property. There is also a claim in respect of title to the property itself. The Court has been informed that the claim to possession is supported by his sister. 7 The property was under the threat of sale by Elders. Thereafter, action was taken which has led to disputation and confusion. In October 1992, the plaintiff raised about $93,000.00 and the second defendant raised $73,000.00. These moneys were used to buy out the Elders mortgage (the property itself could not be used as security because it stood in the name of the first defendant). On 9 November 1992, the mortgage was transferred from Elders to the plaintiff. 8 At this stage, it may be convenient to digress from the narrative to make a few observations. The resulting situation would seem to throw up real doubt as to whether or not the first defendant was thereafter in a position of being regarded as liable to pay moneys under the mortgage. A purpose of the transferred mortgage appears to have been to secure the moneys raised to pay out Elders (the allegation of constructive trust has been made). If this was the case, it is unclear as to what arrangements were made (if any) for repayment. No moneys have since been paid under the mortgage. 9 It appears that the plaintiff and the first defendant have been on bad terms for many years. In recent years, the relationship between the plaintiff and the second defendant has deteriorated and is now hostile. Disputes between them led to proceedings being commenced in the Equity Division (in 1994). In those proceedings, inter alia, the second defendant's claims to possession and the property are propounded. The plaintiffs are the second defendant and his sister. The defendant is the plaintiff. The first defendant is not a party. The Statement of Claim appears to be in need of surgery. The proceedings appear to have stagnated. The Court has been told that this has been due to the impecuniosity of the second defendant. 10 These proceedings might be seen as an attempt to engender some activity to resolve what appears to be a very messy and stagnant situation. It is a situation which so far has not been capable of resolution by compromise. It is unfortunate that other avenues were not pursued to deal with this problem. 11 These proceedings are founded on alleged default under the mortgage by the now first defendant. The alleged default is in respect of failure to pay both principal and interest. (A Default Notice claims $327,946.94 as at 30 April 1998). The demand was first made in 1998. The plaintiff seeks possession of the property. No Amended Statement of Claim has been filed since the adding of the second defendant. As the pleadings presently stand, no claim is pleaded against him (although he is the only defendant in occupation). Both defendants have filed a Defence. 12 The proceedings presently come before the Court pursuant to an application brought by the plaintiff (an Amended Notice of Motion was filed in Court on 12 July 1999). She seeks either summary judgment or a striking out of Defences. 13 The plaintiff has sworn three affidavits. Her solicitor (Mr Kent) has sworn two affidavits. He has been cross-examined. Each of the defendants has sworn an affidavit. 14 It is well settled that summary judgment is a discretionary remedy which should only be granted in what might be described as a clear case (see inter alia Webster v Lampard (1992-1993) 177 CLR 598). The applicant bears the onus of satisfying the Court that relief should be granted. 15 It is not said that the plaintiff is entitled to summary judgment as against the second defendant. It is conceded that there is one Defence (that of estoppel) which needs to proceed to trial for determination. The plaintiff merely asks that all other Defences be struck out. This relief is sought on the basis that none of these Defences raises a defence at law to the plaintiff's claim for possession. 16 In the case of the first defendant, the plaintiff seeks the striking out of all Defences and the entry of judgment. 17 The position of the first defendant is somewhat unusual. Whilst the real dispute is now between the plaintiff and the second defendant he is taking a most active role in defending the proceedings. This may be due, at least in part, to the way in which the claim has been formulated. He sees himself as representing the interests of the beneficiaries (yet the protagonists to the real dispute are the disputing beneficiaries). 18 The real matter in issue between the parties is that which is raised in the equity proceedings. This is a matter which needs to be determined at trial. Despite the vagaries of the pleadings, it is in substance the matter sought to be agitated as a Defence by the second defendant (and it involves the position of the first defendant under the mortgage). The determination of that matter could be expected to effect a resolution of these proceedings. In the equity proceedings, it could be expected that the question concerning the bringing of the mortgage to an end would also be determined (this would require the addition of the first defendant as a party to those proceedings). 19 I now turn to the Defence filed by the first defendant. On one view, he is an unnecessary party to these proceedings. However, the plaintiff has chosen to join him as a defendant and proceed against him on the basis of his default under the mortgage. The allegations of default have been put in issue. If these allegations are really material to the claim for possession, they should be determined by the resolution of the equity proceedings. Paragraph 4 contains material which alleges that the plaintiff is not entitled to take any action to enforce the mortgage without the consent of the second defendant and that the second defendant has not given such a consent (see inter alia (c) and (d)). It is common ground that these allegations do not raise a Defence to the plaintiff's claim. Accordingly, they are liable to be struck out. Paragraph 5 alleges a Defence under the Farm Debt Mediation Act 1994 (the Act). Section 8 prohibits enforcement action until at least 21 days have elapsed after the giving of notice required by the section. It was not said by the plaintiff that the section did not have application in the case of the first defendant. There is material which throws up questions of fact as to whether or not such notice has been given in accordance with the section. 20 This is an issue which is thrown up because the plaintiff has chosen to take enforcement action against the first defendant under the mortgage to recover possession of the property. It has no bearing on the real matter in dispute in the equity proceedings which could be expected to be determinative of the problems had by the parties. It perhaps does no harm to stress that the first defendant is not in occupation and that, although no case is pleaded against him, the second defendant's claim to remain in occupation does not arise from the mortgage. 21 I now turn to the Defence filed by the second defendant. It may be observed that it is not the product of elegant draughtsmanship. Whilst it is not pleaded in the same form, there are paragraphs in the Defence which seek to raise the substance of what is asserted in the equity proceedings as the basis for relief. It involves inter alia the matter of the estoppel. Whilst these paragraphs could be enhanced by amendment, I am not satisfied that the Court should strike them out. Paragraph 13 makes the unsustainable allegation that the proceedings are not maintainable without the consent of the second defendant. This paragraph is liable to be struck out. Paragraph 18 seeks to raise a Defence that the plaintiff has failed to comply with the requirements of the Act. The second defendant has not sought to persist with the stance that he falls within the ambit of the Act. Accordingly, this paragraph is liable to be struck out. 22 I am not satisfied that the plaintiff is entitled to relief by way of summary judgment. The application for summary judgment is refused. Paragraph 4 of the Defence of the first defendant is struck out. Paragraphs 13 and 18 of the Defence of the second defendant are struck out. 23 There has been argument as to costs of the application. Largely, the defendants have been successful on the issues agitated between the parties. The plaintiff has had some success. The issues on which she had success occupied little time during the hearing. The general rule is that costs follow the event. In the circumstances of this case, I am not satisfied that there should be a departure from that rule. I order the plaintiff to pay the costs of the application. 24 It may be that the parties will now be seeking other orders and directions. If that is the case, arrangements can be made for the listing of the proceedings to deal with these matters. ********** Last Modified: 07/28/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.