New South Wales Supreme Court CITATION : Commonwealth Development Bank of Australia v Tyler [1999] NSWSC 1213 CURRENT JURISDICTION : Common Law FILE NUMBER(S) : 11137/1999 HEARING DATE(S) : 3 December 1999 JUDGMENT DATE : 14 December 1999 Commonwealth Development Bank of Australia PARTIES : Limited (Plaintiff) v Douglas Keith Tyler (Defendant) JUDGMENT OF : Master Malpass COUNSEL : Mr G K Burton (Plaintiff) Mr W L Marler (Defendant) SOLICITORS : Cowley Hearne (Plaintiff) Weatherly & Bartram (Defendant) CATCHWORDS : Summary Judgment; no question of principle. ACTS CITED : Contracts Review Act 1980, Pt 2. Farm Debt Mediation Act 1994, s 11. CASES CITED : Webster v Lampard (1993) 177 CLR 598. DECISION : See Paragraph 25. THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER MALPASS TUESDAY 14 DECEMBER 1999 11137/1999 COMMONWEALTH DEVELOPMENT BANK OF AUSTRALIA LIMITED v DOUGLAS KEITH TYLER JUDGMENT 1 The defendant is the owner of a farm property (the property). On or about 28 February 1996 he gave a mortgage over the property to the plaintiff. He received an advance in the sum of $535,000. Largely, the transaction was of a re-financing nature. The sum of $525,000 was used to repay an existing indebtedness. A sum of about $8,000 was used to discharge other liabilities (council rates). The balance of about $2,000 was used for working capital. 2 There was default under the mortgage. In December 1998 there was a farm mediation. It led to an agreement between the parties. There has been default by the defendant under that agreement. 3 These proceedings were commenced by Statement of Claim filed on 13 May 1999. The plaintiff seeks inter alia a judgment for possession and a judgment in a monetary sum. The claim for relief is founded on default under the mortgage. A Defence was filed on 10 August 1999. 4 On 8 October 1999, the plaintiff brought a Notice of Motion seeking summary judgment. The application for summary judgment was heard on 3 December 1999. 5 The plaintiff relies on three affidavits and tendered documentation. Save as to affidavits sworn to verify pleadings, the defendant has not placed any affidavit or oral evidence before the court. 6 The defendant no longer relies on the filed Defence. He seeks to rely on a proposed Amended Defence (Exhibit 1). 7 The approach to be taken in summary judgment applications was not in issue. The authorities establish that this discretionary remedy should be granted only in what may be described as clear cases ( Webster v Lampard (1993) 177 CLR 598). The onus rests with the plaintiff. 8 The filed Defence had denied on oath questions of indebtedness, demand and non-payment. The proposed Amended Defence makes admissions concerning questions of indebtedness, demand and non-payment. There is dispute as to the quantum of indebtedness. It is conceded that there is principal repayable but there is no agreement as to the quantum thereof. Save as to the new material raised in the proposed Amended Defence, the plaintiff's claim for possession is not in dispute. These new matters go to interest and not principal payable under the mortgage. 9 The proposed Amended Defence is a document of some length. It comprises 24 paragraphs. Paragraphs 1 to 9 contain admissions. The new material may be found in paragraphs 10 to 24. 10 I shall now refer to some of the material contained in the proposed Amended Defence. As a pleading, it has its shortcomings. I shall merely refer to some of the problems. It pleads material that does not throw up any defence to the plaintiff's claim. There is a lack of causal connection in related allegations. There is a lack of particularity. There is a lack of precise formulation in relation to relief sought by the defendant. 11 Broadly speaking, it was said to raise defences under the Farm Debt Mediation Act 1994 (the Act), the Contracts Review Act 1980 and by way of estoppel. 12 Paragraph 10 alleges that the plaintiff held itself out as an expert in advising upon the suitability of the terms and conditions of rural loans and the types of farming and grazing activities which should be undertaken in the light of the terms and conditions of rural loans. It alleges that the plaintiff did advise the defendant as to the suitability of the terms and conditions of the loan and that the defendant should arrange to let out a substantial section of the property for the sowing of potato crops. There is the allegation that the plaintiff knew that the defendant would rely on the plaintiff's advice and did so rely. There are allegations as to the personal circumstances of the defendant and that these circumstances were known to the plaintiff (one of the matters was a claim for damages against Custom Credit Corporation (CCC) and that the defendant had no apparent means of paying in full his indebtedness to the plaintiff without moneys from CCC). 13 Paragraph 11 alleges that the defendant acted on the advice and entered into the loan and mortgage transaction and sought to arrange for the sowing of potatoes on the property. 14 Paragraph 12 alleges that the advice was unsound, negligent and/or reckless as it exposed the defendant to substantial risk and a high degree of vulnerability. 15 Paragraph 13 alleges certain events said to have happened since the entering into the loan and mortgage. One of the events was the non recovery of any moneys from CCC. Another was that other persons had caused road closures making potato farming impracticable. 16 Paragraph 14 alleges an implied term of the loan transaction that the plaintiff would not demand payment of the loan until after the defendant had received moneys from CCC. 17 Paragraph 15 is expressed to be an alternative. It makes an allegation of unconscionability. Paragraph 16 is expressed to be an alternative to paragraphs 14 and 15. It alleges an implied term that any demand must be reasonable. Paragraph 17 is expressed to be in the alternative to paragraph 16. It makes an allegation of unconscionability. 18 Paragraph 18 alleges that the purported mediation was not a mediation of the type contemplated by the Act and claims a declaration that a certificate purportedly given under s 11 is a nullity. 19 Paragraph 19 alleges that the defendant was prevented from earning income from the cropping of potatoes by virtue of the conduct of others and the plaintiff's refusal of a request (to assist in the endeavour to cause the road to be opened) made to it by the defendant. Paragraph 20 is a further allegation of unconscionable conduct. 20 Paragraph 21 specifically raises the Contracts Review Act 1980 and expresses a general claim for relief under Part 2 thereof. 21 Paragraph 22 alleges an implied representation that the plaintiff would not rely on the legal rights created by the loan contract whilst the defendant had not received any moneys from CCC. 22 The position of the defendant is beset by a number of difficulties. Certain are insurmountable. There is an evidentiary problem. Despite having the opportunity to do so, he has not placed before the court either affidavit or oral evidence deposing to the factual material upon which the alleged defences are founded. There is authority for the proposition that the verifying affidavit does not perform this function. It affords a very limited evidentiary role. The defendant's evidentiary problems are compounded by the plaintiff having adduced evidence which stands in conflict with allegations made in the proposed pleading (including correspondence written by the then solicitor for the defendant containing admissions, promises to pay and a request to lease part of the property for potato production). At the very least, there is no precise offer or undertaking from the defendant to repay principal moneys (by way of condition to the granting of relief). It is not suggested that the defendant has resources other than the secured property itself from which repayment can be made (indeed, it appears that he does not have such resources). It is merely suggested, in the most general terms by counsel, that the court should fashion relief which is restricted to the interest component of the claim and as to time and terms for repayment of the principal. This is put forward by way of submission in the context that it is not disputed that he has had the benefit of principal and a liability to repay. 23 It is not necessary to engage in the exercise of dealing individually with each and every of the many allegations made in the proposed pleading in the light of the relevant law. On the material before the court (or the lack of it in the case of the defendant) the proposed new matters of defence are doomed to failure. 24 In my view, the plaintiff has demonstrated that the proposed defences to the claim for possession are hopeless. I am satisfied that this is one of the clear cases in which summary relief may be granted. 25 There will be judgment for the plaintiff for possession of the property described in paragraph 1 of the Statement of Claim. The defendant is to pay the costs of the Notice of Motion to date. If it be necessary, I will hear submissions on questions of quantification of the indebtedness and the issue of a Writ for Possession. ********** Last Modified: 12/20/1999 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.