Bank of Sydney Ltd v Gallagher [2018] NSWSC 596

Supreme Court New South Wales

Medium Neutral Citation: Bank of Sydney Ltd v Gallagher [2018] NSWSC 596 Hearing dates: 4 May 2018 Date of orders: 04 May 2018 Decision date: 04 May 2018 Jurisdiction: Common Law Before: Davies J Decision: (1) The defence filed by the defendants on 25 January 2018 is struck out. (2) The plaintiff is given leave to obtain default judgment but not prior to 5 July 2018. (3) The Defendants are not permitted to file amended defences. (4) Liberty to apply. Catchwords: LAND LAW – mortgages – possession of land – default under loan agreement and mortgage - where no defence pleaded to claim – sale of property by mortgagor – 14 week completion – plaintiff entitled to judgment but entry of judgment stayed until after expected completion date of contract for sale Category: Procedural and other rulings Parties: Bank of Sydney Ltd (Plaintiff) Lincoln Keith Gallagher (First Defendant) Rachael Elanor Gallagher (Second Defendant) Representation: Counsel: S Farrugia (Plaintiff) M Juhasz (Defendants)

Solicitors: Colin Biggers & Paisley Pty Ltd (Plaintiff) Case Legal Pty Ltd (Defendants) File Number(s): 2017/34513 Publication restriction: Nil

Judgment 1. These proceedings arise out of a loan agreement on 11 January 2017 which was supported by a mortgage of 27 January 2017. Default occurred by 30 May and thereafter default continued so that by 17 July there was an amount outstanding of almost $12,000 in instalments due. A section 80 notice was served on 21 July 2017 that was not complied with. The amount outstanding in November 2017 taking into account the failure to comply with the section 80 notice was in the vicinity of $1.4 million. 2. The statement of claim was issued on 15 November 2017 and a defence was filed on 25 January 2018. That defence was only verified by the first defendant who is the sole owner of the land that secures the loan. 3. Directions were made for the second defendant to swear the defence and after a number of defaults an affidavit verifying the defence was filed on 27 April, although I note that the affidavit is said to have been sworn on 25 January 2018. Directions were also made by the Registrar that all of the defendants' evidence was to be filed and served by 4 April. This has not yet happened. 4. The matter came before me for early judicial directions on 27 April 2018. I raised, on that occasion, with the solicitor for the defendants matters concerning the defence that had been filed. The defence purports to deny and not admit a large number of the pleaded paragraphs of the statement of claim. Many of those paragraphs could not properly be not admitted or denied as the defendants have done, if the defendants were true to the affidavits in support of the defence that they have filed. It is not necessary to detail that matter except to note that it concerns such things as the making of the loan agreement and the entry in the mortgage which is clearly demonstrated. 5. The defence otherwise purports to defend the matter on the basis that a person described as "the plaintiffs' representative", who appears to have been some sort of a broker, is said not to have complied with the provisions of the National Credit Code or prudential regulations, and that the first and second defendants were not advised to obtain independent legal or financial advice in relation to the matter. 6. In the reply filed by the plaintiffs a denial has been pleaded of those allegations, with particulars being provided of the independent advice that was obtained by one of the parties, and the advice to obtain that advice to the other party who declined to do so. In any event those matters do not provide any defence to the claim. The defence goes on to say that the defendants have arranged finance with another financier. In my opinion the defences filed discloses no defence to the claim. 7. Since proceedings were last before the Court the defendants have provided evidence of entry into a contract for sale of the property of $1.7 million on 12 April 2018. Rather unusually the date for completion is said to be 14 weeks after the contract date. That would make the date of completion 5 July 2018. 8. The plaintiff seeks to obtain judgment on the basis that the defence does not disclose any defence to the claim. In the circumstances that the defendants have proved satisfactory entry into a contract to sell the property at a price which will enable the plaintiff's debt to be paid in full, I do not consider that it is appropriate to enter judgment this morning. Rather, the defence that has been filed will be struck out. The plaintiff will thereafter be permitted to obtain default judgment but there will be a stay on the plaintiff's right to do so until 6 July 2018. 9. The practical result of that is that if the contract does not complete as anticipated the plaintiff will immediately be able to obtain judgment in the matter. If at that stage the defendants claim to have some further defence it will be up to them to file a notice of motion to set aside the default judgment. In the meantime the defendants are not permitted to file any amended defence to the claim. 10. The orders I make therefore are: 1. The defence filed by the defendants on 25 January 2018 is struck out. 2. The plaintiff is given leave to obtain default judgment but not prior to 5 July 2018. 3. The Defendants are not permitted to file amended defences. 4. Liberty to apply.