Australia and New Zealand Banking Group Limited v Hurburgh, Andrew David

[1998] TASSC 84

84/1998

PARTIES:  AUSTRALIA AND NEW ZEALAND BANKING
  GROUP LIMITED (ACN 005 357 522)

v
HURBURGH, Andrew David

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  M 29/1998
DELIVERED:  13 July 1998
HEARING DATE/S:  17 June 1998
JUDGMENT OF:  The Master

CATCHWORDS:

Mortgage - Summons to show cause for possession - Land Titles Act 1980 - Combining bank accounts - Effect of Consumer Credit (Tasmania) Code 1996 - Applicant failing to establish triable issue.

Fancourt v Mercantile Credits Limited (1983) 154 CLR 87, referred to.
Aust Dig Mortgages [60]

REPRESENTATION:

Counsel:
           Applicant:  R E Hudson
           Respondent:  In person
Solicitors:
           Applicant:  Butler McIntyre & Butler
           Respondent:  In person

Judgment category classification:
Court Computer Code:  
Judgment ID Number:  84/1998
Number of pages:  3

Serial No 84/1998
File No M 29/1998

AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED (ACN 005 357 522)
v
ANDREW DAVID HURBURGH

REASONS FOR JUDGMENT  THE MASTER

13 July 1998

The applicant took out an application followed by a summons to show cause why the respondent should not be ordered to give up possession to the applicant of the property situate at 20 Richardson Avenue, Dynnyrne in Tasmania and more particularly described in Certificate of Title Volume 2740 Folio 8.

The application is made pursuant to the Land Titles Act 1980 ("the Act"), s146.

Three affidavits of Mr Paul Riccardo Santalucia, the Tasmanian manager of the applicant, filed 5 February 1998, 8 May 1998 and 17 June 1998 were read and he was cross-examined upon them.

Two affidavits of the respondent, subject to evidentiary objections, were read and which the respondent submitted were sufficient to show cause why an order for possession should not be made.

The evidence discloses that the respondent, who was formerly a practising solicitor, conducted three accounts at the same branch of the applicant bank.  Since January 1996, the respondent operated a current account, which contained an overdraft facility.  Since 1993, he also operated an access account, which also contained an overdraft facility, and a home loan account.

On 10 October 1997, the applicant issued a notice of demand in respect of the following accounts:

The current account	$48,679.98
The access account	2,318.48
The home loan account	97,071.18
Total	$148,069.64

These amounts, the quantum of which is not in dispute, were secured by a single mortgage from the respondent to the applicant and it is upon this mortgage that these proceedings under the Act, s146 have been instituted.

Mr Santalucia, under cross-examination, said that the home loan was for a period of twenty years, repayable at an agreed instalment rate.  The home loan was subject to a variable interest rate.  The witness conceded that prior to 10 October 1997, the applicant had made some payments in reduction of the home loan and which were in excess of the agreed instalment rate.  The respondent put to the witness that a "spreadsheet" prepared by the respondent indicated that he was in credit as at 10 October 1997, in the sense that he had paid some instalments above the agreed rate and that the balance owing on the home loan was less than it otherwise would have been at that stage.  The respondent put to the witness that the balance owing to the applicant on the home loan was $7,427.55 less than it would have been had instalments been made at the agreed rate.  The witness did not agree with the accuracy of this figure.  The evidence indicates that the balance resulting from the respondent's increased payment was approximately $3,700 less at 10 October 1997 than would have otherwise been the case.  However, in the result which I have reached, this discrepancy is not material.

The respondent submitted that he was entitled to treat the excess of any amount paid off the home loan as a credit against his current and access account and in so doing, he was not in default with the payments due under those accounts at 10 October 1997.  He contended that as a result, the notice of demand was of no effect.

Mr Hudson of counsel for the applicant submitted that the respondent has no right to a set-off against any of the accounts, either at common law or by statute.  It is really a question of the combining of the accounts rather than one of set-off.  In the present instance, the home loan account was not an account in the sense that the current and access accounts were constituted.  The respondent could not draw cheques or otherwise draw upon the home loan account and if payments were made to the account in excess of the agreed rate, the extra amounts paid did not constitute a credit, as with a running account, but merely enabled the loan to be reduced more quickly than as agreed.

In these circumstances, and in the absence of any agreement to the contrary, the law is clear that the respondent could not establish that there was a credit on the home loan account at the date of the notice of demand which could be combined with the current and access accounts so as to eliminate any default in payments overdue by the respondent on those accounts.  Weaver and Craigie on The Law Relating to Banker And Customer in Australia, 2 ed at par7,920 and the authorities cited therein, clearly indicate the principles under which a combination of accounts is allowed.

It is not in dispute that the applicant's mortgage secured all moneys owing to it for or in respect of all loans, advances, credits or banking accommodation given by the applicant to the respondent and that as at the date of the notice of demand on 10 October 1997, the respondent was in default of payments due under the current and access accounts.  As a result, and pursuant to the terms of the mortgage, the applicant was entitled, upon the failure of the respondent to comply with the notice of demand, to proceed under its security. 

The applicant raised a further ground of opposition to the summons.  He submitted that both the current and access accounts were overdraft accounts which constituted "pre-Code continuing credit contracts" for the purposes of the Consumer Credit (Tasmania) Code ("the Code") 1996.  The Code defines a "credit contract" as a contract under which credit is or may be provided, being the provision of credit to which this Code applies (s5).  Section 6(b) provides that the Code applies to credit which is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes; and s68 permits a debtor, if the credit provider does not, upon request, change the terms of the contract, to apply to the Court to do so.  Section 8 also provides that the Code applies (subject to the Regulations) to a mortgage if it secures obligations under a credit contract.  Under an order made under the Code, the Code applied to the applicant as from 1 November 1996.

The applicant ceased to practise in December 1996.  The Code commenced on 1 March 1997.  Mr Santalucia, in his evidence, said that the applicant was aware that the respondent carried on a "junk" business after he ceased practise and that he operated the current account for purposes associated with his business operations.  A bundle of records was tendered by him (A2), comprising copies of the respondent's deposit slips and cheques for April and May 1997.  In his evidence, the witness said that an examination of a number of the deposits and cheques drawn appeared to be predominantly for business purposes and he referred to three specific examples in support of his contention.  No evidence to the contrary was adduced by the respondent.  The respondent has had ample opportunity to apply to the court pursuant to the Code, s68, but has not done so.  On the evidence before me, I am not satisfied that such an application could succeed.

Finally, the affidavit evidence and the oral evidence of Mr Santalucia does not establish any question of estoppel which should prevent the applicant from succeeding on its application.  The respondent may have been granted temporary accommodation from time to time during the operations of his accounts with the applicant, but there is nothing in the applicant's conduct that should estop it from proceeding with the application.

I am mindful that upon a summons to show cause the respondent is only required to adduce evidence to the extent that he has a reasonable possibility of establishing a defence at the trial of the applicant's claim.  A summons to show cause is somewhat akin to a summary judgment application in that it is an extraordinary procedure, which, if successful, will deprive the right of the respondent to a trial of the issues.  However, it is incumbent on the respondent to "condescend upon particulars" and, in my view, his affidavits have not gone so far (see Fancourt v Mercantile Credits Limited (1983) 154 CLR 87 at 98). I am also aware that where questions of law or mixed fact and law arise, it is sometimes appropriate for there to be a trial of the issues (see Theseus Exploration NL v Foyster (1972) 126 CLR 507 and Sunbird Plaza Pty Ltd v Boheto Pty Ltd [1983] 1 Qd R 248).

However, in this instance, the respondent, in my view, has not advanced any matters which show that he could succeed at a trial of the issues and as a result there should be an order for him to give up possession of the premises referred to in the summons.

I shall hear counsel and the respondent as to the terms of the order and as to costs.