HomeSec Finance Express Pty Ltd v Richardson [2012] NSWSC 101

Supreme Court New South Wales

Medium Neutral Citation: HomeSec Finance Express Pty Ltd v Richardson [2012] NSWSC 101 Hearing dates: 17 February 2012 Decision date: 22 February 2012 Jurisdiction: Common Law Before: Schmidt J Decision: 1. Homesec's motion is dismissed with an order for the costs of the motion in its favour, as agreed or assessed. 2. Ms Richardson is to file any motion in relation to the proposed amended defence by 29 February 2012. 3. The matter will come into the list at 9.45 am on 2 March 2012 for directions. Catchwords: PROCEDURE - notice of motion - order for summary judgment - motion dismissed - costs Legislation Cited: Civil Procedure Act 2005 Contracts Review Act 1980 Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005 Cases Cited: General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 Category: Procedural and other rulings Parties: HomeSec Finance Express Pty Ltd (ACN 079 939 610) (First Plaintiff) Hedley Murdoch (Second Plaintiff) Luc Jean Pierre Minerve (Third Plaintiff) Jill Richardson (Defendant) Representation: Counsel: Mr MJ Cohen (Plaintiffs) Mr C Alexander (Defendant) Solicitors: Galilee Solicitors (Plaintiffs) Spinks Eagle Lawyers (Defendant) File Number(s): 2011/195194

Judgment 1By statement of claim filed in June 2011 the three plaintiffs seek judgment for possession of certain land located at Summer Hill and Lewisham, arising out of default under a mortgage which secured a loan to Ms Richardson, the defendant. The loan was descibed for the plaintiff to be a 'Club' loan in standard terms. Ms Richardson filed a defence in July 2011 and a cross-claim in September, to which a defence was filed in October. She there advances various claims against the plaintiffs, including under the Contracts Review Act 1980 and the Trade Practices Act 1974 (Cth). 2By the cross-claim, Ms Richardson alleges, amongst other things, that Mr Goodwin, a broker, was the plaintiffs' agent, acting within the scope of his authority and that he made various untrue and misleading representations on which she relied to her detriment, with the result that they are liable to her in damages. The cross-claim is defended, amongst other things, on the basis that Mr Goodwin was a broker who never had any authority to act as the plaintiffs' agent and never did so. 3This judgment deals with a notice of motion filed by the first plaintiff, Homesec Finance Express Pty Ltd ('Homesec') , on 22 December 2011, in which orders for summary judgment are sought under Rule 13.1 of the Uniform Civil Procedure Rules 2005, as well as an order that the cross-claim be dismissed. I am satisfied that the relief sought may not be granted. 4The motion was pressed in circumstances where the plaintiffs are on notice that Ms Richardson wishes to amend her defence, although no motion seeking leave to amend has yet been pursued. Just prior to the hearing, a proposed amended defence was, however, served. The failure to put on any motion for leave to rely on that defence was explained to be representative error. It was conceded that the circumstances were such that the price of the relief sought by the plaintiffs being refused, in order that Ms Richardson might be given the opportunity to amend her defence, might be that a costs order would be made against her. 5The parties relied on affidavits sworn by Mr Paul Stone, a director of Homesec, by the plaintiff's solicitor Ms Niki Belogiannis; and by Ms Richardson. Certain documents were also in evidence. 6Rule 13.1 provides: "13.1 Summary judgment (cf SCR Part 13, rule 2; DCR Part 11A, rule 2; LCR Part 10A, rule 2) (1) If, on application by the plaintiff in relation to the plaintiff's claim for relief or any part of the plaintiff's claim for relief: (a) there is evidence of the facts on which the claim or part of the claim 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 of the claim, or no defence except as to the amount of any damages claimed, the court may give such judgment for the plaintiff, or make such order on the claim or that part of the claim, as the case requires. (2) Without limiting subrule (1), the court may give judgment for the plaintiff for damages to be assessed. (3) In this rule, a reference to damages includes a reference to the value of goods." 7Ms Belogiannis has deposed to the relevant belief. The circumstances disclosed on Ms Richardson's affidavit were that she resides in the Lewisham property, which she acquired in 1987 for the sum of $184,000, with the assistance of a loan of unspecified amount from the St George Bank. She acquired the Summer Hill property in 2000 with a loan from Citibank, in the amount of $845,000. 8Ms Richardson is a kindergarten teacher, who ceased full-time work in 2001 and who now operates an antiques business part-time. The Summer Hill property has three tenants and she has plans to subdivide the Lewisham property, where she lives. In March 2010, Ms Richardson understood that the two properties were respectively valued at $2 million and $2.1 million. She then had a loan from Bankwest of some $1,850,00, which had fallen into arrears of some $40,000, as the result of a tenancy dispute in which she was then involved. 9Mrs Richardson needed to refinance. Her accountant introduced her to a Mr Justin Goodwin, who she understood was the lending manager for Homesec. Her accountant provided Mr Goodwin with her financial details and later, short term refinancing of some $137,000 was arranged for a period of 4 months from another lender, S. C. Hall & Co Pty Ltd, secured by an unregistered mortgage. As to this loan Ms Richardson deposed: "16. I knew that I would need to refinance in order to pay back the 1 st Loan Agreement. Originally, the offer was for 8 weeks however I opted for a 4 month term, to ensure that there would be sufficient time for me to refinance with a long-term loan agreement before 1 st Loan Agreement fell due. 17. Ultimately, I entered into the 1 st Loan Agreement to pay out Bankwest, pay water and council rates on both properties and to finance the sub-division of the Lewisham property, and in turn pay down my personal debt. At the time, I had two offers for the proposed subsidised land, which I considered to be favourable." 10There were later difficulties encountered with arranging long term finance, which Mr Goodwin was trying to arrange. Shortly before the term of the first loan was due to expire in October 2010, Mr Goodwin arranged for a second short term loan for Ms Richardson from the three plaintiffs of some $440,000, for a period of four months. 11Ms Richardson then endeavoured unsuccessfully to sell the Lewisham property. She has now accepted an offer, which is subject to Council approval. In the meantime, the second loan was not repaid when it fell due in February 2011, with the result that interest is accruing at the default rate of 12% per month (rather than 5%). On Mr Stone's evidence, more than $984,000 is now outstanding. 12The current defence is admittedly inadequate and Mrs Richardson seeks an opportunity to amend it. It denies the debt and claims that the interest rate is usurious, unfair and inequitable. The proposed defence claims that aspects of the loan agreement are void and/or voidable, or are otherwise unenforceable and also advances claims under various provisions of the Contracts Review Act and the Trade Practices Act to defend the plaintiff's claim. Claims of unconscionability and misrepresentations are also sought to be advanced. 13It is settled that summary disposal is not appropriate where there is any serious conflict between the parties as to any matter of fact. Clearly this is such a case. The plaintiff sought to demonstrate on Ms Richardson's own affidavit that she had no basis for any defence under the Contracts Review Act . It certainly seems, given the provisions of s 6(2), that at least a part of the loan in issue was for purposes which do not fall within the ambit of the Act. That, however, is not apparent in relation to the entirety of the loan. It also seems that even if Ms Richardson was successful, some account would have to be taken of the benefit which she received by the payment out of the prior mortgagee, but precisely the extent of that benefit can only be determined after relevant factual matters have either been agreed, or heard and determined. 14On the parties' submissions, it is apparent there are serious conflicts as to Mr Goodwin's role, as well as in relation to his alleged conduct. While the current defence is admittedly deficient, Mrs Richardson seeks to amend her pleading. The proposed amended defence certainly appears to raise a number of triable issues. 15While steps clearly ought to have been taken to amend the defence prior to the hearing of Homesec's motion, in my assessment the circumstances are not such that, consistently with the obligations imposed by s 56 of the Civil Procedure Act 2005, Ms Richardson may justly be deprived of an opportunity to advance her case. The test is that discussed in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129. The onus falling on Homesec to demonstrate that Ms Richardson has no defence at all to the plaintiffs' claim, has not been met. 16In the circumstances, Homesec's motion must be dismissed, but with an order for costs in its favour. That is the price Ms Richardson must bear, for failing to take the necessary steps to amend her pleadings in a timely way, consistently with the obligations imposed on the parties by the Civil Procedure Act 2005 . That would have avoided the unnecessary costs incurred by the pursuit of the motion. The parties should confer. In the event that there is any issue remaining between them as to the terms of the proposed amended defence, Ms Richardson must file the necessary motion.