Southern Cross Credit Union Ltd v Teale [2014] NSWSC 606

Supreme Court New South Wales

Medium Neutral Citation: Southern Cross Credit Union Ltd v Teale [2014] NSWSC 606 Hearing dates: 16 May 2014 Decision date: 16 May 2014 Jurisdiction: Common Law Before: Davies J Decision: 1. Defence of the First Defendant filed 23 April 2014 is struck out. 2. The Plaintiff is given leave to obtain default judgment against both Defendants. Catchwords: REAL PROPERTY - possession of land - guarantor/mortgagor self-represented - consideration of defences pleaded - defence struck out Legislation Cited: Trade Practices Act (1974) (Cth) Cases Cited: Hong Kong Fir Shipping v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 Category: Principal judgment Parties: Southern Cross Credit Union Ltd (Plaintiff) Kelvin Lindsay Teale (First Defendant) Mary Anne Louise Teale (Second Defendant) Representation: Counsel: T J Hancock (Plaintiff) In person (First Defendant) No appearance (Second Defendant) Solicitors: Collection Law Partners (Plaintiff) In person (First Defendant) No appearance (Second Defendant) File Number(s): 14/109313

Judgment 1These proceedings commenced by Statement of Claim filed 10 April 2014. The Plaintiff seeks possession of land at 18 Gordon Street, Mullumbimby, which was provided by the Defendants as security for a loan granted by the Plaintiff to Steven James Teale and Cheryl Ann Celatke. The Defendants also provided a guarantee for the repayment of the loan dated 23 December 2005. 2The Statement of Claim alleges that the borrowers have failed to make payments as required under the credit contract and those failures have not been rectified. Default first occurred on 12 December 2013 and have continued since that time. The First Defendant, who appears for himself, admits that he and the Second Defendant guaranteed the loan for his son and the son's then wife, and that the borrowers have failed to pay the loan. 3The First Defendant has filed a Defence dated 23 April 2014. There is no appearance by the Second Defendant and no defence has been filed by her. 4The Defence contains some 15 paragraphs. A number of paragraphs relate to the First Defendant's desire to settle the proceedings with the Plaintiff. Those paragraphs do not disclose any defence. Rather, they involve an implied admission which supports what the First Defendant acknowledged, that there has been default by the Defendants in paying pursuant to demands made under the Guarantee. 5Paragraph 6 says this: Statutory declaration complied by Southern Cross Credit Union for me to sign was done without my consent, it is a breach of the Oaths Act 1900. 6Mr Teale has explained to me that he understands that a statutory declaration must be in the deponent's own words, whereas the statutory declaration he is referring to, sworn 23 December 2005, is a printed document prepared by the Plaintiff. That statutory declaration is a fairly standard conveyancing document whereby the deponent mortgagor acknowledges matters concerned with rates and taxes and charges on a property that is offered for security, that land tax is not payable, that the deponent is not bankrupt, that improvements erected on the property have been constructed in accordance with approved plans, and acknowledges being unaware of certain specified matters. That statutory declaration was signed by the Defendants apparently on 23 December 2005. 7Paragraph 7 of the Defence says this: Declaration of Purpose document is a fraudulent misrepresentation as you cannot lose rights by signing a document. 8The Declaration of Purpose document is a standard one under the New South Wales Consumer Credit Code. Section 11 of that Code permits a creditor to have such a declaration signed which results in a conclusive presumption, except for the matters that are referred to in Section 11(3) of the Code, that take the matter outside the provisions of the Code. Such a declaration was signed by the borrowers on 12 March. 9There is a complaint in paragraph 9 about intimidation by a collection company which is said to be contrary to the Trade Practices Act (1974) (Cth), but that is not a matter which can be a Defence to the claim. 10Paragraph 11, which is headed "Innominate Term" makes reference to a judgment of Lord Diplock in Hong Kong Fir Shipping v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 and goes on to say, "Breach of contract legal benefit has been removed from an innocent party." The relevance of the decision was not made clear but I have assumed it relates to what appears at p 66 of the report of that judgment. I think that the First Defendant has misunderstood what is being spoken about by Diplock LJ. This parargraph does not provide any Defence to the claim. 11Paragraph 13 refers to an assertion that the Plaintiff had a fiduciary duty to ensure that the parties to the loan have the capacity to repay the loan, and that the female borrower was not in a position to pay her share of the loan. The guarantee signed by the Defendants in clause 11.1 provides: You represent and warrant to us that you have fully investigated the borrower's financial position and the borrower's ability to repay the loan. 12Clause 11.2 then says: You acknowledge that we accept this guarantee from you and make the loan to the borrower in reliance on your representations and warranties in clause 11.1. 13That paragraph of the Defence is not a Defence to the claim. 14Paragraph 14 says this: Breach of contract, change in terms of contract without notification from a fixed rate to a variable rate. 15The First Defendant says that it is his understanding that if a party is to change a term of a contract, here, to change from a fixed to a variable rate, it is necessary to have negotiations to do so. 16The loan contract signed on 12 March 2007 has a box on the front page headed "Annual Percentage Rate". Annexed to that the following appears: 8.39% for the period to 12/03/2009 and then at our standard variable interest rate for this loan type applicable at that time. The standard variable interest rate for this loan type is currently 8.89% per annum. 17In this case the contract specifically provided that the Plaintiff would change from the fixed rate to the standard variable interest rate at the time specified. The defendant signed the guarantee on the basis of that loan agreement. That paragraph does not provide a Defence to the claim. 18The First Defendant also has indicated that he wants to raise certain federal issues which he says should be decided in the Federal Court. Indeed, paragraph 15 of his Defence says that he would like to have the matter "transferred to the Federal Court on the Trade Practices Act". He made that submission in the mistaken belief that this court did not have jurisdiction to determine matters arising under the Trade Practices Act. 19The only matter particularly identified is, as I have noted, the allegation that the collection company engaged in intimidation which is said to be contrary to the Trade Practices Act. I sought to understand what other provisions of the TPA were sought to be relied upon, but the First Defendant only referred to the matters in the Defence to which I have already referred. 20On the last page of the Guarantee, just above where the Defendants signed, there is a box headed IMPORTANT. It then says: BEFORE YOU SIGN ... * You should obtain independent legal advice. * You should also consider obtaining independent financial advice. * You should make your own enquiries about the credit worthiness, financial position and honesty of the debtor. 21The First Defendant agreed that he did not obtain any such advice although he did read the Guarantee briefly before signing it. 22I have endeavoured to obtain from the First Defendant any other Defence that he might have to this claim, but he has not identified any such Defence. 23In the circumstances, the Defence filed by him on 23 April 2014 is struck out. 24The Plaintiff is given leave to obtain default judgment against both Defendants.