Supreme Court New South Wales Medium Neutral Citation: Southern Cross Credit Union Ltd v Reavill Farm Pty Ltd (No 2) [2018] NSWSC 1614 Hearing dates: 13 December 2017; 18 December 2017 (written submissions); 4 July 2018 (plaintiff's further written submissions) Date of orders: 25 October 2018 Decision date: 25 October 2018 Jurisdiction: Common Law Before: Walton J Decision: The Court makes the following orders: (1) Order that the defence filed on 6 January 2017 be struck out. (2) Order that default judgment be entered for the plaintiff on its claim for possession of the land contained in folio identifier 2/1086613 and known as 141 Hazlemount Lane, TUCKURIMBA NSW. (3) Grant leave to issue a Writ for Possession of Land. (4) Order that the defendant pay the plaintiff's costs of the proceedings on the ordinary basis as agreed or assessed. Catchwords: COSTS – costs should follow the event – ordinary basis as agreed or assessed POSSESSION – defence struck out – default judgment be entered for the plaintiff on its claim for possession of the land – leave to issue a Writ for Possession of Land – final orders Legislation Cited: Farm Debt Mediation Act 1994 (NSW) Cases Cited: Southern Cross Credit Union Ltd v Reavill Farm Pty Ltd [2018] NSWSC 999 Category: Principal judgment Parties: Southern Cross Credit Union Ltd (Plaintiff) Reavill Farm Pty Ltd (First Defendant) Representation: Counsel: J R B Pearson (Plaintiff) Solicitors: Collection Law Partners (Plaintiff) File Number(s): 2016/360541 Judgment 1. HIS HONOUR: By a statement of claim filed on 1 December 2016 Southern Cross Credit Union Ltd ("the plaintiff") commenced possession proceedings against Reavill Farm Pty Ltd ("the defendant"). A defence was filed by the defendant on 6 January 2017, which did not respond to the plaintiff's pleaded case. 2. By a notice of motion brought on 24 October 2017, the plaintiff sought an order that the defence filed by the defendant be struck out and default judgment for the plaintiff for possession of land owned by the defendant at 141 Hazlemount Lane, Tuckurimba NSW 2480, specifically the parcel of land with folio identifier 2/1086613 (formerly identified as the commercial premises at Lot 23 Hazlemount Lane, with folio identifier 23/1021621) ("the property") ("the application"). The plaintiff also sought leave to issue a Writ for Possession of Land. 3. The central issue in the proceedings was whether or not the Farm Debt Mediation Act 1994 (NSW) had application. 4. On 28 June 2018, the Court gave judgment in relation to the application: Southern Cross Credit Union Ltd v Reavill Farm Pty Ltd [2018] NSWSC 999 ("Reavill Farm No 1"). 5. In Reavill Farm No 1, the Court reached the following conclusions at [145]-[150]: [145] The taking of an action for possession of property under a "farm mortgage" is an "enforcement action" under [the Farm Debt Mediation Act 1994 (NSW) ("the Act")]: s 4. Section 8 precludes action for possession against a farmer in respect of a farm mortgage until notice is given by the creditor to the farmer in accordance with that section. [146] Absent consideration of the Act, the pleadings in the proceedings established a proper basis for orders for possession because the defendant admitted that payments had been in arrears and notice had been served by the plaintiff on the defendant pursuant to s 57(2)(b) of the Real Property Act. I also note that the defence filed by the defendant does not constitute a proper defence for the purposes of Pt 14, Div 3 of the Uniform Civil Procedure Rules and may, accordingly, be liable to be struck out. [147] Hence, a grant of relief to the plaintiff effectively came down to a consideration of whether the Act applied. In that respect, the issues were confined to two issues: the first and second issue, respectively (as previously defined). [148] The defendant has failed to discharge the onus falling upon it to demonstrate on the evidence that it is principally engaged in farming operations and is, therefore, not a "farmer" for the purposes of the Act. Further, whilst not finally resolving the question, it would seem the debt was not a "farm debt", namely, incurred by a farmer for the purposes of the conduct of a farming operation that is secured wholly or partly by a farm mortgage. Thus, the action brought by the plaintiff is not precluded by the Act. [149] As stated above, there is a proper basis to strike out the defence. By the statement of claim, the plaintiff sought "default judgment", bringing with it the provisions of r 16.4 of the Uniform Civil Procedure Rules, and the application, by the motion, sought "judgment" (without specifying the basis for such relief per se). This creates some uncertainty as to the appropriate relief to be afforded to the plaintiff, having regard to the conclusions reached by the Court in this judgment. [150] It is, therefore, necessary to clarify the relief sought by the plaintiff and the basis for the particular orders claimed. It is appropriate, therefore, the Court receive further short submissions on that issue in accordance with the directions that follow, which submissions should also traverse the question of costs (noting that costs would, in the circumstances, normally favour the plaintiff as following the event) and attach draft orders reflecting this judgment and the submissions made. The Court will make orders having regard to the material received and any submissions by the defendant as to the form of relief claimed and orders proposed. 1. The Court made the following directions (at [151]): (1) The plaintiff is to file and serve further written submissions together with draft orders reflecting this judgment within 7 days of its publication. (2) The defendant is to file and serve any written submissions in reply as to the relief claimed and orders proposed within 7 days of receipt of the material in (1). (3) Subject to further submissions, the defendant shall pay the costs of the plaintiff of these proceedings as agreed or, in the absence of agreement, as assessed. 1. The plaintiff filed further written submissions on 4 July 2018, together with proposed short minutes of order, in response to those directions. As to the application that the defence be struck out and a default judgment entered, the plaintiff made the following submissions: 1. By its Notice of Motion filed on 24 October 2017, the plaintiff seeks the following orders: (a) an order that the Defence filed on 6 January 2017 be struck out; (b) entry of judgment (being default judgment) for possession of the land comprised in 2/1086613 being the land situated at and known as 141 Hazelmount [sic] Lane, Tuckurimba NSW; and (c) an order that the defendant pay the plaintiff's costs of the proceedings. Short minutes of order 2. Short minutes of order are enclosed with these submissions. Default judgment 3. The Defence does not disclose any reasonable defence to the plaintiff's claim for possession. It is liable to be struck out pursuant to r 14.28 UCPR. 4. The sole question for determination in the proceedings was whether the plaintiff was required to engage in compulsory mediation pursuant to the Farm Debt Mediation Act 1994. On 28 June 2018, Justice Walton determined that question was negative. 5. If the Defence is struck out, the plaintiff submits that it is entitled to default judgment on its claim. It moves on its notice of motion filed on 24 October 2017 in that regard. 6. As the plaintiff's claim is for possession of land only, entry of default judgment is governed by r 16.4 UCPR. 7. The affidavit of Richard Farago affirmed and filed on 24 October 2017 is the 'relevant affidavit' for the purposes of r 16.4(3) UCPR. 1. The plaintiff proposed short minutes of order, reflecting the judgment and those submissions, as follows: 1. Order that the defence filed on 6 January 2017 be struck out. 2. Order that default judgment be entered for the plaintiff on its claim for possession of the land contained in folio identifier 2/1086613 and known [as] 141 Hazelmount [sic] Lane, TUCKURIMBA NSW. 3. Grant leave to issue a Writ for Possession of Land. 1. Having regard to the conclusions reached by the Court in Reavill Farm No 1 and the further submissions of the plaintiff, which I accept, the Court shall make the orders proposed by the defendant. 2. As to the question of costs, the plaintiff made the following submission: Costs 8. The plaintiff, having been substantially (if not wholly) successful in the proceedings, submits that costs should follow the event. The plaintiff is not aware of any matter which might otherwise affect the exercise of the Court's discretion as to costs. 1. The plaintiff sought an order for costs in the following terms: 4. Order that the defendant pay the plaintiff's costs of the proceedings on the ordinary basis as agreed or assessed. 1. The Court noted in Reavill Farm No 1 that costs would, having regard to the conclusions reached by the Court, normally favour the plaintiff as following the event. Direction 3 in [151(3)] of Reavill Farm No 1 reflected that preliminary conclusion. Nonetheless, an opportunity was given to the defendant to make further submissions in relation to the question of costs. The defendant did not avail itself of the opportunity to make those submissions. The following is a short recitation of the events following the publication of Reavill Farm No 1. 2. On 28 June 2018, Ms Belinda Nott, whom appeared on behalf of the defendant (see Reavill Farm No 1 at [21]-[22]), contacted Chambers via email to advise that she was unable to attend court to receive judgment and requested that a copy of the judgment be provided to her "by email" (I interpose to note that Ms Nott's email address was listed as the "contact email" for the defendant in these proceedings). That was attended to that same day. 3. On 27 July 2018, Ms Belinda Nott emailed Chambers, together with the solicitors for the plaintiff, an attachment that could not be accessed by the Court or the plaintiff. The attachment was described by Ms Nott, within the body of the email, as "submission" and, it may be inferred, was a submission as to the question of costs. 4. That same day, shortly after receipt, Ms Nott was contacted by reply-email and notified that the attachment "appear[ed] to be corrupt or otherwise inaccessible". It was requested that she re-send the submission by email with attachment. Following an absence of reply, the Court attempted on several subsequent occasions to contact Ms Nott, with respect to the provision of submissions in reply as to costs, to no success. 5. In the result, on 9 October 2018, Ms Nott was directed to file and serve any submission in reply by Tuesday, 16 October 2018 at 4pm and the following warning was also communicated via the same email: If a submission is received in accordance with the Court's direction, it will be taken into consideration as to costs. In the event no submission is received by that date, the Court will proceed to a decision as to costs in its absence. 1. Ms Nott did not reply to that communication, either by way of responding to it or submitting an application for further time. 2. On the eve of judgment, a communication was received from Ms Nott, for the defendant, seeking a delay of judgment. No mention was made of the above communications. There was no indication that a submission as to costs would be provided, nor additional time sought to do so. 3. In the circumstances, I consider that the defendant has had ample opportunity to make any further submissions that it wished to make in relation to the question of costs and, notwithstanding numerous opportunities to rectify a failed attempt to (it would appear) provide such submissions and a warning that the Court would act in the absence of the submissions of the defendant if submissions were not filed by 16 October 2018, the defendant failed to file such submissions. The Court shall, therefore, in accordance with intimations given in Reavill Farm No 1 that costs would follow the event, make the order proposed by the plaintiff as to costs. 4. In the result, the Court makes the following orders: 1. Order that the defence filed on 6 January 2017 be struck out. 2. Order that default judgment be entered for the plaintiff on its claim for possession of the land contained in folio identifier 2/1086613 and known as 141 Hazlemount Lane, TUCKURIMBA NSW. 3. Grant leave to issue a Writ for Possession of Land. 4. Order that the defendant pay the plaintiff's costs of the proceedings on the ordinary basis as agreed or assessed. 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: 05 November 2018