St George Bank Limited v Rankin & Ors [1999] NSWSC 974

New South Wales Supreme Court CITATION : St George Bank Limited v Rankin & Ors [1999] NSWSC 974 CURRENT JURISDICTION : Common Law FILE NUMBER(S) : 10617/97 HEARING DATE(S) : 21 September 1999 JUDGMENT DATE : 24 September 1999

St George Bank Limited (Plaintiff)

PARTIES : Dorothy Lillian Rankin (First Defendant)

Denise Margaret Shields (Second Defendant) JUDGMENT OF : Master Harrison

Mr S T White (Plaintiff) COUNSEL : Mr NA Confos (Second Defendant) David Landa Stewart (Plaintiff) SOLICITORS : Mr S Naris Steven Naris & Co (Second Defendant) CATCHWORDS : Summary judgment ACTS CITED : Real Property Act 1900 (NSW) Air Services Australia v Zarb (unreported 26 August 1998) Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62 CASES CITED : General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 Webster & Anor v Lampard (1993) 177 CLR 598 NRMA v A W Edwards Pty Limited (NSWCA unreported 11 November 1994) DECISION : See para 25

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THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

MASTER HARRISON

FRIDAY, 24 SEPTEMBER 1999

10617/97 - ST GEORGE BANK LIMITED v DOROTHY LILLIAN RANKIN & ORS

JUDGMENT (Summary judgment)

1 MASTER: The plaintiff by notice of motion filed 13 November 1997 seeks an order for summary judgment pursuant to Part 13 r 2 of the Supreme Court Rules against the second defendant. The plaintiff relied on the affidavits of Joseph Cutcliffe Weston sworn 12 November 1997, Alan Laubhan sworn 21 September 1999 and Peter William Cornelius of 6 August 1999. The defendant relied on two affidavits of Denise Margaret Shields sworn 27 November 1997 and 10 August 1999. 2 By statement of claim filed 28 February 1997 the plaintiff alleges that on 22 January 1990 Gary Clarke, the second defendant and the first defendant became the registered proprietors of a property situated at 3/100 Park Beach Road Coffs Harbour (the property). On 28 April 1992 Gary Clarke and the first and second defendants (the mortgagors) granted a mortgage to the plaintiff in respect of the property to secure a loan from the plaintiff to Gary Clarke and the second defendant in the sum of $80,000. On 28 April 1992 the plaintiff advanced to Gary Clarke and the second defendant the sum of $80,000. On 10 August 1993 the second defendant transferred her interest in the property to Gary Clarke. Gary Clarke died on 24 May 1995. 3 On 21 November 1995 the mortgagors were in arrears of monthly payments in respect of the mortgage. On or about 22 November 1995 the plaintiff served notices pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) on the executor of Gary Clarke's estate and on the first defendant. The plaintiff alleges that the mortgagors are in default of the mortgage and the plaintiff is thereby entitled to recover. The plaintiff is not seeking an order for possession against the second defendant but alleges that it is entitled to payment of a monetary sum 4 By amended defence filed 23 August 1999 the second defendant alleges firstly, that the plaintiff is estopped from claiming the mortgage debt from her because following the transfer of her interest to Gary Clarke the plaintiff did not forward to her any loan statements, correspondence, notices or demands and because without her consent the plaintiff varied the loan by fixing the interest rate at 11% for the first 5 years and then reverting to the current variable rate. The second defendant also pleads that the mortgage debt due to the plaintiff should be paid firstly from the proceedings of the sale of the property; secondly from the first defendant and thirdly from the second defendant and that it was a term mortgage and it would be perfect as against all co-borrowers, which terms had been breached by the plaintiff and the plaintiff owed to the second defendant a duty to ensure that the security was perfect as against all co-borrowers and this duty was breached by the plaintiff. 5 On 22 January 1990 Gary Clarke, Denise Clarke and Dorothy Rankin (the mortgagors) became registered proprietors of the property. At that time Gary Clarke and the second defendant were husband and wife. Mrs Rankin is Mr Clarke's mother. On about 6 February 1992 Gary Clarke and the second defendant made application to the plaintiff for a loan in the sum of $80,000. From the evidence, it is unclear which loan approval schedule was approved. There were two, namely one dated 20 February 1992 and the other dated 28 February 1992. Both applications for finance between the plaintiff and Gary Clarke and the second defendant set out certain common terms and conditions. They were that the amount approved was in the sum of $80,000, security was to be by way of a registered third party mortgage and the interest rate could be varied at any time at the plaintiff's discretion. In the loan approval schedule dated 20 February 1992, the monthly repayments were stipulated to be of $1,049 principal and interest at a variable interest rate, interest rate at 13.5% reducing to 12.5% for prompt payment. In the loan approval schedule dated 28 February the monthly repayments were stipulated to be $1,137 principal and interest rate at a variable interest rate of 15.25% reducing to 14.25% for prompt payment. 6 On about 28 April 1992 the mortgagors executed a mortgage in favour of the plaintiff in respect of the property. The mortgage provided that the provisions of memorandum X647856 were deemed incorporated in the mortgage and that the mortgagors would observe such provisions (the memorandum). The memorandum provided relevantly that the mortgagors would on demand pay to the plaintiff all moneys which Gary Clarke and the second defendant were liable to pay to the plaintiff. The mortgagors would on demand by the plaintiff pay all costs (including legal costs as between solicitor and client) expenses and other amounts incurred or paid by the plaintiff in respect of the mortgage. The mortgagors shall at the option of the plaintiff be immediately in default if there was default in the performance of any term covenant, agreement or condition contained in or implied by the mortgage or any collateral security. The advance of $80,000 was made by the plaintiff to Gary Clarke and the second defendant on 27 April 1992. On about 10 August 1993 the second defendant transferred her interest in the property to Gary Clarke pursuant to an order of the Family Court of Australia. The plaintiff was provided with a copy of the terms of settlement (Ex 1). It is alleged that there has been default in that payments due under the mortgage have not been made since November 1995. 7 On about 21 November 1995 notice pursuant to s 57(2)(b) of the Real Property Act (NSW) as forwarded to the executor of the estate of Gary Clarke and the first defendant. No statements or notices were forwarded to the second defendant by the plaintiff. 8 The relevant parts of Part 13 r 2 says: "2(1) Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff - (a) there is evidence of the facts on which the claim or part is based; and (b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed,