Citigroup Pty Ltd v The Commonwealth of Australia

[2012] WASC 160

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   CITIGROUP PTY LTD -v- THE COMMONWEALTH OF AUSTRALIA [2012] WASC 160

CORAM:   MASTER SANDERSON

HEARD:   10 MAY 2012

DELIVERED          :   17 MAY 2012

FILE NO/S:   CIV 1776 of 2011

BETWEEN:   CITIGROUP PTY LTD

Plaintiff

AND

THE COMMONWEALTH OF AUSTRALIA
First Defendant

MICHAEL JOHN STONEHOUSE
Second Defendant

Catchwords:

Summary judgment application on mortgage - Turns on own facts

Legislation:

Nil

Result:

Judgment entered for plaintiff against second defendant

Category:    B

Representation:

Counsel:

Plaintiff:     Mr B C Smith

First Defendant             :     No appearance

Second Defendant         :     In person

Solicitors:

Plaintiff:     Gadens Lawyers

First Defendant             :     No appearance

Second Defendant         :     In person

Case(s) referred to in judgment(s):

Nil

1. MASTER SANDERSON:  This is the plaintiff's application for summary judgment against the second defendant.  The second defendant works in China and only returns to Western Australia occasionally, and then for a short period.  Responding to this application from China has proved difficult.  However, the second defendant has had the opportunity to file affidavit material in opposition to the application and he had the opportunity to make oral submissions. 

2. In September of 2002, the plaintiff lent to Edinboro Pty Ltd and to the second defendant certain moneys which were secured over a property in the name of Edinboro.  Edinboro has now been deregistered and pursuant to the Corporations Act 2001 (Cth) its assets have passed into the hands of the first defendant. The plaintiff has obtained possession of the property from the first defendant. It is now seeking judgment under the loan agreement from the second defendant.

3. As I understand the second defendant's written and oral submissions, he says the loan was made to Edinboro and not to him personally.  He is a beneficiary of the Stonehouse Family Trust and Edinboro was trustee of that trust as at the date the loan was made.  He says it is incumbent upon the plaintiff to recover what it is owed either from Edinboro or from some other party.  He maintains he is not liable. 

4. A cursory reading of the security documents shows that not to be the case.  In support of the application, the plaintiff relied on an affidavit of Raymond Hammond, sworn 8 March 2012.  Appearing as annexure RH 3 to that affidavit, is a document titled 'Citibank Home Loan Facility Agreement - Details'.  The 'customers' are said to be Edinboro and the second defendant.  The terms of the agreement make it plain the second defendant is primarily liable for the loan.  It is not a question of his being liable under a guarantee or a situation where he is only liable if payment is not made by Edinboro.  He is liable to the plaintiff in exactly the same way as Edinboro is liable. 

5. This effectively deals with the submissions and the affidavit evidence put by the second defendant.  However, I should deal with a number of other matters raised by the second defendant.  In early October 2011, the second defendant made a complaint to the Financial Ombudsman Service Ltd.  As the second defendant notes, this complaint was made in the name of the second defendant, not in the name of the first defendant.  As is required, a broad outline of the grounds of the dispute between the plaintiff and the second defendant was provided to the ombudsman's office.  The lodgement of the notice of dispute had the effect of prohibiting the plaintiff from pursuing legal proceedings or enforcement action while the dispute was being investigated. 

6. On 23 December 2011, the ombudsman sent a letter to the second defendant advising the file had been closed.  Judgment had been obtained against the first defendant.  The second defendant, in his written submissions, makes certain allegations against the plaintiff.  There is no evidentiary foundation for these allegations.  I am unable to see any grounds for suggesting the plaintiff has not complied with proper practice so far as the complaint to the ombudsman is concerned.

7. The second defendant objects to costs incurred by the plaintiff in enforcing the mortgage being debited to his account when, from time to time, the court order has been costs reserved.  However, under cl 13.1(e) of the Home Loan Facility Agreement, the second defendant is liable for any enforcement expenses incurred by the plaintiff.  This is a standard provision in most mortgages and forms part of the contractual relationship between the plaintiff and the second defendant.  The second defendant has done nothing he is not entitled to do. 

8. In his affidavit of 9 May 2012, the second defendant examines in some detail the affidavit material lodged in support of this application.  This detailed analysis raises nothing by way of defence which would stand in the way of judgment being entered for the plaintiff.  I am satisfied in all respects the plaintiff has complied with the requirements of summary judgment.  Accordingly, I will make orders in terms of the minute of proposed orders tendered by the plaintiff at the hearing.