National Australia Bank Limited v Morgan [2009] NSWSC 1012

New South Wales Supreme Court

CITATION : National Australia Bank Limited v Morgan [2009] NSWSC 1012

HEARING DATE(S) : 24 September 2009

JUDGMENT DATE : 25 September 2009

JUDGMENT OF : Schmidt J

CATCHWORDS : PROCEDURE - Supreme Court procedure - New South Wales - notices of motions - further amended defence to be struck out for want of prosecution - refused - self executing order made - transfer of proceedings sought to District Court - transfer declined

Australian Securities and Investments Commission Act 2001 (Cth) LEGISLATION CITED : Civil Procedure Act 2005 Uniform Civil Procedure Rules

CATEGORY : Procedural and other rulings

CASES CITED : National Australia Bank Limited v Morgan [2009] NSWSC 647

PARTIES : Plaintiff - National Australia Bank Limited Defendant - Jane Morgan

FILE NUMBER(S) : SC 11345/08

COUNSEL : Mr J White (Plaintiff) Mr M Gallego (Defendant)

SOLICITORS : DibbsBarker (Plaintiff) Morgan Lawyers (Defendant)

- 4 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

SCHMIDT J

Friday, 25 September 2009

11345/2008 NATIONAL AUSTRALIA BANK LIMITED v JANE MORGAN

JUDGMENT 1 HER HONOUR: By notice of motion filed on 14 September 2009, the plaintiff sought orders pursuant to Part 12 Rule 12.7 of the Uniform Civil Procedure Rules 2005, that the further amended defence be struck out for want of prosecution and that judgment be entered in its favour 2 By notice of motion filed on 18 September 2009, the defendant sought orders that the amended statement of claim be dismissed, or that the matter be transferred to the District Court. At the hearing, only the application for referral to the District Court was pressed. 3 Having heard the parties, I concluded that the just course was to refuse the defendant's motion, but to give her one final opportunity to pursue her defence, failing which the orders pressed by the plaintiff would be made. The parties agreed on the terms of the orders to be made to give effect to that conclusion, which were marked MFI 1 in the proceedings. These are the reasons for the conclusions reached. 4 The matter was listed for hearing on 21 September, when the defendant was not ready to proceed and the hearing was adjourned until 24 September. The defendant's motion was supported by an affidavit sworn by the defendant, a solicitor, noting that the plaintiff's motion to strike out the amended defence had been refused by Price J on 26 June 2009 (see National Australia Bank Limited v Morgan [2009] NSWSC 647 and that she had then been given leave to file a further amended defence, within 14 days. That defence was not filed until 31 July. The plaintiff's complaint went to the failure to prosecute that defence, since its filing. 5 Ms Morgan deposed that the property, the subject of the proceedings, had since been sold, in accordance with an agreement reached between the parties and that all proceeds of the sale had been submitted to the plaintiff, with the result that the mortgage had been discharged and the remainder of the proceeds applied to the defendant's overdraft facility and the plaintiff's legal costs. That sale had been made under an agreement by the plaintiff that it was 'without prejudice' to its 'rights to seek judgment in respect of that shortfall'. Annexed to the affidavit was advice later given by the plaintiff that as at 19 August, the sum which remained outstanding was $85,637.61, plus legal costs. 6 It was common ground between the parties that this sum, together with interest and further costs incurred in the meantime, was what remained the subject of the proceedings. The plaintiff led evidence in its case, as to the updated figures, which amounted to $86,544.92 as at 18 September. 7 The amended statement of claim filed in February 2009 had sought judgment in the sum of $791,932.45 in total, reflecting the amount of the claim, filing fees and legal costs. Interest was also claimed. The claim concerned moneys advanced to the defendant under a home loan agreement, a mortgage and an overdraft facility of $100,000. Defaults and demands were particularised. 8 By the further amended defence, the defendant had claimed that the plaintiff was not entitled to the relief sought, raising equitable set off, as well as alleging misleading and deceptive representations, unconscionable conduct, within the meaning of the Australian Securities and Investments Commission Act 2001 (Cth) and breach of the plaintiff's Banking Code of Conduct. 9 The history of how the two competing applications came to be made was relevant to their resolution. After the judgment given by Price J in June, there were various defaults by the defendant, who was first ordered to put on her evidence by 14 August and then 28 August. On 4 September, the strike out motion and transfer motion were foreshadowed. The parties were ordered to file their motions by 16 September. On 4 September, the plaintiff warned that any failure to file the outstanding evidence and the foreshowed motion, would be relied on to support the application to have the defence struck out. Still, the defendant did not comply with the Court's orders. 10 When the matter came on for hearing on 24 September, the defendant had still not served any evidence. There was no explanation given for that failure. Ms Morgan's affidavit did not deal with this matter and what was advanced, by way of explanation, did not reveal anything other than that Ms Morgan had been engaged in organising a sale of the property, which had settled in August; that the plaintiff had only advised of the amount outstanding on 19 August; that the defence raised was a complex one and that Ms Morgan was busy attending to her legal practice. 11 It was not in contest that given the money amount which remained in issue between the parties, the claim now fell within the District Court's jurisdiction. Transfer was opposed however, the plaintiff arguing that such an order would not be made as a matter of discretion, given the defendant's continuing failure to adhere to the Court's orders. Even for the defendant it was submitted that whether the defendant would wish to pursue a defence before the District Court, given what now remained in issue, was not certain. 12 I was firmly of the view that an application to transfer the matter to the District Court could not shelter the defendant from the consequences of her repeated and ongoing failure to prosecute her defence. It would be entirely inconsistent with the requirements of the Civil Procedure Act 2005, whose overriding purpose is to ensure the 'the just, quick and cheap resolution of the real issues in the proceedings' (s 57) and would not pay proper attention to the defendant's failures, nor would it help to eliminate delay, or to achieve justice between these parties. 13 There was no proper explanation for the course which the defendant had pursued and not even a certainty that the defendant still wished to pursue her claimed defence. Still, I also took the view that the Court would not lightly deprive the defendant of the opportunity to advance her defence, given the nature of that defence and the conclusions reached by Price J in June, as to the nature of the contest between the parties. Accordingly, I came to the conclusion that the parties' position should be balanced by a self executing order, giving the defendant one final opportunity to pursue her defence. The terms of the order was settled by the parties and I ordered accordingly.