Bendigo and Adelaide Bank Limited v Ratana

[2018] NSWSC 1382

Supreme Court

New South Wales

Medium Neutral Citation:

Bendigo and Adelaide Bank Limited v Ratana [2018] NSWSC 1382

Hearing dates:

5 September 2018

Date of orders:

05 September 2018

Decision date:

05 September 2018

Jurisdiction:

Common Law

Before:

Campbell J

Decision:

(1) In respect of both causes of action, I enter a single judgment in favour of the plaintiff in the sum of $1,185,230.49 against the defendant;
(2) I order the defendant to pay the plaintiff's costs, on a full indemnity basis, in accordance with the terms of cl 7 of the loan deed of 15 July 2007.

Catchwords:

CIVIL PROCEDURE – two loans – investment – whether solicitor for defendant can withdraw from proceeding without notice – impecuniosity – defendant not present – defendant’s name called outside court – leave granted to withdraw – direction to file a notice of ceasing to act

 

CIVIL PROCEDURE – whether plaintiff is entitled to judgment against the defendant – r 29.7 Uniform Civil Procedure Rules 2005 (NSW) – legal assignment of debt – deed of settlement and deed of loan – debts discretion of court – plaintiff entitled to remedies

  COSTS – full indemnity basis

Legislation Cited:

Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth);
Uniform Civil Procedure Rules 2005 (NSW), r 29.7

Cases Cited:

Clarke (as trustee of the Clarke Family Trust) & Ors v Great Southern Finance Pty Limited (Receivers and Managers Appointed) (in liquidation) & Ors [2014] VSC 516

Texts Cited:

Nil

Category:

Procedural and other rulings

Parties:

Bendigo and Adelaide Bank Limited (Plaintiff)
Karen Ratana (Defendant)

Representation:

Counsel:
B Koch (Plaintiff)

  Solicitors:
B Horne (Defendant – withdrew by leave)
No appearance by defendant in person

File Number(s):

2015/305412

EX TEMPORE Judgment - revised

1. By statement of claim filed on 19 October 2015 the plaintiff, Bendigo and Adelaide Bank Limited ("the Bank") sues the defendant, Karen Ratana, in debt for the amount due under two loans advanced to the defendant to facilitate her participation in two schemes of investment promoted by Great Southern Finance Pty Limited (“Great Southern”). From the affidavit evidence that Mr Koch of counsel, who appears for the Bank, has read, I am satisfied the defendant participated in two separate schemes as propounded by Great Southern described in the evidence.

2. When the matter was called on for hearing before me today, after Mr Koch announced his appearance for the Bank, Mr Horne, solicitor, who is the solicitor on record representing the defendant, without announcing his appearance as such, sought leave to withdraw. He explained he had not given notice of an intention of ceasing to act, nor had he filed a notice of ceasing to act, because it had been his understanding of the instructions he had previously received that the defendant was attempting to secure funds with which counsel could be briefed and Mr Horne could continue to be properly instructed in the matter. He explained from the bar table - and I accept what he said - that the defendant had been unsuccessful in that endeavour, and in the circumstances he had explained to her he would not be able to continue to act. He also explained to me that the defendant was in practice in the Snowy Mountains region and, from his discussions with her, he did not expect she would attend court in person today.

3. Before giving Mr Horne leave to withdraw, in accordance with the Court's invariable practice, I had the defendant's name called outside this courtroom three times, and there was no appearance. I gave Mr Horne the leave he sought to withdraw, on the condition that he file a notice of ceasing to act by close of business today.

4. Mr Koch then moved to proceed in accordance with the procedure established by r 29.7(3) of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). So far as is material, r 29.7 is in the following terms:

(1)   This rule applies when a trial is called on.

(2)   If any party is absent, the court:

1. (a)   may proceed with the trial generally or so far as concerns any claim for relief in the proceedings, or

(b)   may adjourn the trial.

(3)   If, in relation to a liquidated claim, the plaintiff appears, but a defendant does not appear, the court may, without proceeding to trial, give judgment against that defendant on evidence of:

(a)   the amount then due to the plaintiff in respect of the cause of action for which the proceedings were commenced, and

(b)   any payments made or credits accrued since the commencement of the proceedings in reduction of the amount of the plaintiff’s claim.

5. Mr Koch, as I said, moved on subrule (3). Although that sub-rule empowered me to act on the affidavit of debt of Mr Stephen Flamer-Smith affirmed today, 5 September 2018, a consideration of the pleadings led me to rule that it was necessary that evidence be led to establish certain matters which had been put in issue by the defendant in her defence filed on 2 March 2016.

6. Those matters related: first to the assignment of the choses in action on which the bank sues by a company named AVL Nominees Pty Limited to the Bank, the averments in that regard contained in the statement of claim having been traversed by the defendant by way of non-admission; and secondly, the terms of a deed of settlement approved in the Supreme Court of Victoria relating to group proceedings commenced in that court in relation to losses by investors who had participated in the Great Southern schemes. Although the defendant admitted she was a group member, as averred by the Bank, she traversed that averment also by non-admission of the terms of the deed of settlement which preserved the Bank's rights to sue on the debts assigned to it.

7. I am satisfied that the Bank has taken a legal assignment of the debts previously owned by AVL Nominees Pty Limited, and that the terms of the deed of settlement allow it to enforce its rights in respect of the debt in the ordinary way. To establish those matters Mr Koch read parts of the affidavit of Mr Flamer‑Smith of 19 September 2016 and also of 13 July 2018.

8. In relation to the affidavit of 19 September 2016, paras 11, 12 and 13 were read, which refer to a bundle of documents marked Ex SFS-1 which includes, commencing at page 19 of the exhibit, the original deed of loan (“the deed”) made on 15 July 2017 in which AVL Nominees Pty Limited is identified as the lender. At page 30 of the exhibit is a letter to which is attached a form of sale notice dated 12 June 2007, offering the original creditor's rights in the debts to the Adelaide Bank. At page 33 is a letter, bearing the same date, from the Adelaide Bank accepting the offers in respect of the debts which include both loans advanced to the defendant in the present case.

9. To demonstrate that the Bank is entitled to the benefit of that assignment, Mr Koch has referred me to relevant transfers under the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth) at pages 35 and 41 of the exhibit. I am satisfied that the Bank is the legal assignee of the original lender's interest in these debts and is entitled to bring and maintain this action in its own name and style.

10. So far as the second issue I have referred to is concerned, Mr Koch has read, as I have said, Mr Flamer-Smith's affidavit of 13 July 2018, which identifies that the defendant was a member of both schemes propounded by Great Southern, being the Great Southern 2007 Grape Income Project - she participated in that project pursuant to the first loan - and also the Great Southern 2008 Diversified Olives Income Project, which the defendant participated in by virtue of the second loan. Mr Flamer-Smith's affidavit also establishes that group proceedings were commenced in the Supreme Court of Victoria and, as I have said, the plaintiff admits being a group member.

11. Mr Flamer-Smith's affidavit also demonstrates to my satisfaction that the defendant did not opt out at any time of the group proceedings, but remained a member in the proceedings in respect of both schemes. I am also satisfied that the proceedings were settled in 2014 by a deed of settlement, and that the Honourable Justice Croft of the Supreme Court of Victoria approved the deed on 11 December 2014: Clarke (as trustee of the Clarke Family Trust) & Ors v Great Southern Finance Pty Limited (Receivers and Managers Appointed) (in liquidation)& Ors [2014] VSC 516.

12. By reference to the deed, which is exhibited to that affidavit of Mr Flamer‑Smith commencing at page 186, I am satisfied that the Bank is entitled to pursue its remedies at law in respect of the debts. That is established, I think, by reference to cl 4.14, cl 4.1.10 and cl 4.1.12 in combination, found at page 199 of the affidavit. I am satisfied that, those matters having been established, the Bank may rely upon the provisions of UCPR 29.7(3) as Mr Koch submits.

13. It is perhaps important to refer again to the affidavit of 19 September 2016 which, as I have said, exhibits the terms of the deed of 15 July 2007 to bring to mind certain provisions, including cl 13, which is concerned with what is described as an acceleration event. Such an event occurs, inter alia, if a borrower fails to pay any money owing on the due date for payment. By cl 14, if such an event occurs the lender may demand immediate payment of the moneys payable.

14. The moneys payable are defined to include the aggregate of the principal sum, interest due and any other moneys due under the terms of the deed. The terms of the deed require the borrower to pay to the lender all costs and expenses incurred by the lender in relation to the enforcement of its rights in respect of the debt, including any legal costs and expenses. Those costs and expenses are payable on what is described as "a full indemnity basis." I am satisfied that the Bank is entitled to claim such amounts as part of the debt recoverable.

15. I now then turn, in accordance with subrule (3), to the affidavit of Mr Flamer-Smith of 5 September 2018. By reference to it, I am satisfied that he has authority to make the affidavit on behalf of the Bank. I am satisfied, by reference to the loan statements attached to his affidavit and from his calculation that the amount due and payable in respect of the first loan, as at today's date, is $511,456.19 excluding the amount of those costs and charges to which I have referred.

16. The second loan currently has a balance, as at today's date, of $662,616.88 excluding the costs and charges to which I have made reference. The total, as at today's date, is $1,185,230.49 and I am satisfied that that is the amount, excluding costs and charges, which is due and payable to the Bank on the causes of action on which these proceedings were commenced. I am also satisfied from Mr Flamer-Smith's affidavit and the statements of account that no payments made or credits have been made, since the commencement of the proceedings in reduction of the amount of the plaintiff's claim or the cost to which I have referred. The defendant, in accordance with the UCPR 29.1(3), should have judgment accordingly.

17. Before pronouncing judgment, Mr Koch has reminded me that notwithstanding the terms of cl 7 of the deed, the Court has a discretion in relation to what order as to costs should be made. It seems to me that there can be no question that the Bank, having been successful in the litigation, is entitled to its costs. And given the terms of the deed, I am satisfied that I should order those costs are payable by the defendant on the full indemnity basis.

1. In respect of both causes of action, I enter a single judgment in favour of the plaintiff in the sum of $1,185,230.49 against the defendant;

2. I order the defendant to pay the plaintiff's costs, on a full indemnity basis, in accordance with the terms of cl 7 of the deed of loan of 15 July 2007.

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Decision last updated: 06 September 2018