ABL Custodian Services Pty Ltd v Bendigo and Adelaide Bank Limited

ABL Custodian Services Pty Ltd and Bendigo and Adelaide Bank Limited appealed against a decision of the Magistrates Court of Queensland, which dismissed their application for default judgment. The dispute arose from a loan agreement, the settlement of which was documented in a deed of settlement. The respondents failed to make the agreed repayments, leading to a breach of the deed. The appellants applied for a default judgment in the Magistrates Court, but the claim was dismissed on the basis that it was time-barred. The court considered the deed was governed by Western Australian legislation, which provided a 12-year limitation period, and further, the claim was for recovery of a speciality, which typically has a six-year limitation period.

The primary issue before the court was whether the Magistrates Court correctly held that the appellants' claim was time-barred. The court had to determine if the decision made on the papers without the opportunity for submissions adhered to the principles of natural justice. The appellants argued that the limitation period should not apply because the respondents had acknowledged the debt and made partial payments, which constituted an acknowledgment sufficient to restart the limitation period. The court also needed to consider whether the Magistrates Court's decision-making process was fair and whether the appellants were given an opportunity to be heard.

The appeal court found that the Magistrates Court did not afford natural justice to the appellants by making the decision without an opportunity for submissions. The court held that the appellants' claim was not time-barred as the respondents had acknowledged the debt through partial payments. Consequently, the appeal court set aside the Magistrates Court's decision and ordered default judgment in favour of the appellants. The judgment included the sum of $65,641.95 inclusive of interest for ABL Custodian Services Pty Ltd and $50,180.30 for Bendigo and Adelaide Bank Limited. Additionally, the court ordered the respondents to pay the appellants' costs of the action and the appeal on an indemnity basis.