Supreme Court New South Wales Medium Neutral Citation: Collins v Campbell [2014] NSWSC 310 Hearing dates: 21 March 2014 Decision date: 21 March 2014 Jurisdiction: Common Law Before: Davies J Decision: (1) Leave to the Plaintiffs to file a Further Amended Statement of Claim in the form annexed to the Plaintiffs' written submissions, such Further Amended Statement of Claim to be filed and served by 28 March 2014; (2) The Defendants are to file defences by 11 April 2014. (3) I make ancillary orders in terms of paragraphs 2 and 3 of the notice of Motion filed 13 February 2014. (4) I order that the costs of this application be the Plaintiff's costs in the cause. (5) I extend the time for evidence in reply to 11 April 2014. (6) I direct that the parties attend a court-annexed mediation. (7) The parties are given leave to approach the listing manager in both matters for a hearing. Such hearing of both matters will be together and the evidence in the one will be evidence in the other. Overall the hearing time will be five days. (8) Pursuant to Rule 7.10 UCPR I appoint Lisa Marie Campbell of 1/40 Stewart St North Entrance New South Wales as administrator ad litem of the estate of Ralph Gordon Barry Campbell formerly the third Defendant and first cross claimant in the proceedings for the purposes of the present proceedings. Catchwords: PROCEDURE - amendment - possession proceedings - application to amend to include subrogation claim by payment out of prior mortgagee - late application - no new disputed facts - question of law - principle in Collier v Morlend Finance - amendment allowed Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 Bank of Western Australia Ltd v Tannous [2010] NSWSC 1319 Collier v Moreland Finance (1989) 6 BPR 13,337; [1989] ANZ Conv R 515 Lapin v Abigail (1929) 44 CLR 166 Category: Interlocutory applications Parties: Gerald Thomas Collins as joint and several trustee of the Bankrupt Estate of Gregory William Campbell and the Bankrupt Estate of Jennifer Ivy Campbell (First Plaintiff) Matthew Leslie Joiner as joint and several trustee of Gregory William Campbell and the Bankrupt Estate of Jennifer Ivy Campbell (Second Plaintiff) Commonwealth Bank of Australia (Third Plaintiff) Gregory William Campbell (First Defendant) Jennifer Ivy Campbell (Second Defendant) Ralph Gordon Barry Campbell (Third Defendant/Cross-Claimant) Pamela Jean Campbell (Fourth Defendant/Cross-Claimant) Representation: Counsel: P Dowdy (Plaintiffs) G Campbell (In person for First and Second Defendants) A Rogers (Third and Fourth Defendants/Cross-Claimants) Solicitors: Gadens Lawyers (Plaintiff) G Campbell (In person for First and Second Defendants) Harrington Maguire & O'Brien (Third and Fourth Defendants/Cross-Claimants) File Number(s): 2012/185361 Judgment 1The Plaintiffs apply by Motion filed 7 March 2014 to file a Further Amended Statement of Claim in the proceedings. The substantive change, which is reflected at various points in the proposed amended document, is a claim for subrogation to the rights of Macquarie Bank Ltd which was a prior mortgagee of the properties now under consideration and claimed by the Plaintiffs. 2At the time of the making of the loans by the present Third Plaintiff, Macquarie Bank had a mortgage on the properties and was paid out by the Third Plaintiff to the tune of a little over $2.3 million. The Plaintiffs say that under old and undisputed authority commencing at least with Lapin v Abigail (1929) 44 CLR 166 at 189 by reason of paying out Macquarie Bank the Third Plaintiff is subrogated to that bank's rights. 3Since the Motion was filed and the proposed Further Amended Statement of Claim was served on the Defendants the Third Plaintiff has added a further claim which is pleaded in paragraph 65 of the proposed Further Amended Statement of Claim. The main claim for subrogation is that the Third Plaintiff succeeds at law to the rights of the paid out mortgagee. The alternative claim is that the Third Plaintiff is entitled as an equitable mortgagee by reason of the payment out of the Macquarie loan at least prior to registration of the Third Plaintiff as the new first mortgagee on the property. That equitable mortgage is said to arise from the debtor/creditor relationship and the deposit of the title deeds from the outgoing mortgagee to the Third Plaintiff. 4Mr Rogers of counsel, who appears for the Third and Fourth Defendants, opposed the application being heard today more particularly because of that proposed amendment in paragraph 65. That proposed amendment was certainly late coming but had been notified before the commencement of the application. In the circumstances I do not consider that there is any prejudice to the Third and Fourth Defendants or, for that matter, to the First and Second Defendants by that further amendment to the document. 5The amendments themselves really amount to a different claim in law only. The only additional facts that would appear to be involved relate to proof of the existence of the former mortgage and its payment out. The evidence for that is provided on the application in the affidavit of Gaetano Giorgio di Gregorio sworn 14 March 2014. It is doubtful if there is any disputed issue of fact in relation to what is contained in Mr Gregorio's affidavit because it consists, for the most part, of contemporaneous documents relating to title and the advances made by the Third Plaintiff paying out the outgoing mortgagee. 6The amendments are opposed because it was pointed out that the third Defendant died in September last year and the Fourth Defendant is now aged seventy-nine years and in a state of poor health generally. Her solicitor's affidavit says that, because of her poor health and the distance between where she resides and where he works, it has been difficult to obtain instructions. He is concerned that he may not be able to obtain instructions at any time to deal with these issues. However, as I have said, the issues themselves are largely different legal ways of putting the Plaintiff's case with few if any disputed facts. 7On one view the amendments are only another way of pleading, as it were as a sword, the principle that is set out in Collier v Moreland Finance (1989) 6 BPR 13,337; [1989] ANZ Conv R 515 that is used as a shield by an incoming mortgagee. That principle is that, in the ordinary course of things, a person alleging an unjustness of the current loan contract and mortgage will need to give credit for any benefit obtained, such benefit ordinarily being the payment out of a prior mortgagee which releases a liability in the person claiming the unjustness. 8A person in the position of the Defendants in the present case was always required to meet that principle. It is not a principle that needed to be pleaded by the Plaintiff in advance. In the event that the outgoing mortgage and loan agreement was challenged as defeasible through unjustness or otherwise that issue would need to be pleaded and determined in the present proceedings without the necessity of joining the prior mortgagee: Bank of Western Australia Ltd v Tannous [2010] NSWSC 1319. 9I do not consider that there is any prejudice to the Defendants if the amendments are allowed. It is unfortunate that the amendments are sought so long after the proceedings commenced and in circumstances where I have been have been case managing them for a lengthy period of time. However, whilst having regard to the principle in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 the position here seems to be a very different one. It is not a matter of forensic decisions having been made nor are the proceedings just about at the point of a hearing taking place. I do not consider that s 56 and s 58 Civil Procedure Act 2005 (NSW) are breached in any serious way that precludes the present amendments being allowed. 10For that reason the Plaintiffs are permitted to file the Further Amended Statement of Claim in the form attached to the submissions of Mr Dowdy of counsel for the Plaintiffs. 11As mentioned earlier, on 13 September last year the Third Defendant died. There has been no representation in his estate since that time and as I understand it probate has not been granted or any form of administration. There is an application by Lisa Marie Campbell who is the granddaughter of the deceased Ralph Gordon Barry Campbell. She applies to be appointed the administrator ad litem of Ralph Gordon Barry Campbell's estate for the purpose of these proceedings. There is no opposition to that course and I am satisfied that Lisa Marie Campbell has no interest that conflicts with the deceased's interest in the proceedings 12Accordingly, I make the following orders: (1)Leave to the Plaintiffs to file a Further Amended Statement of Claim in the form annexed to the Plaintiffs' written submissions, such Further Amended Statement of Claim to be filed and served by 28 March 2014; (2)The Defendants are to file defences by 11 April 2014. (3)I make ancillary orders in terms of paragraphs 2 and 3 of the Notice of Motion filed 13 February 2014. (4)I order that the costs of this application be the Plaintiff's costs in the cause. (5)I extend the time for evidence in reply to 11 April 2014. (6)I direct that the parties attend a court-annexed mediation. (7)The parties are given leave to approach the listing manager in both matters for a hearing. Such hearing of both matters will be together and the evidence in the one will be evidence in the other. Overall the hearing time will be five days. (8)Pursuant to Rule 7.10 UCPR I appoint Lisa Marie Campbell of 1/40 Stewart St North Entrance New South Wales as administrator ad litem of the estate of Ralph Gordon Barry Campbell formerly the third Defendant and first cross claimant in the proceedings for the purposes of the present proceedings. ********** 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. Decision last updated: 11 April 2014