Commonwealth Bank of Australia v Al-Hamoudi
[2024] WASC 102
•28 MARCH 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: COMMONWEALTH BANK OF AUSTRALIA -v- AL-HAMOUDI [2024] WASC 102
CORAM: MASTER RUSSELL
HEARD: 27 MARCH 2024
DELIVERED : 27 MARCH 2024
PUBLISHED : 28 MARCH 2024
FILE NO/S: CIV 1515 of 2023
BETWEEN: COMMONWEALTH BANK OF AUSTRALIA
Plaintiff
AND
HAMID ZAKIR AL-HAMOUDI
First Defendant
SHAIMA MOHAMMED AL-KHAFAJI
Second Defendant
Catchwords:
Practice and procedure - Summary judgment - Mortgage action - Application for monetary judgment and possession of property - Turns on own facts
Legislation:
Financial Sector (Transfer and Restructure) Act 1999 (Cth) s 22(1)
Rules of the Supreme Court 1971 (WA) O 13 r 6, O 14 r 1, O 14 r 2(1), O 14 r 3
Result:
Application granted
Summary judgment entered for the plaintiff
Category: B
Representation:
Counsel:
| Plaintiff | : | BC Smith |
| First Defendant | : | In Person |
| Second Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Dentons Australia |
| First Defendant | : | In Person |
| Second Defendant | : | No appearance |
Case(s) referred to in decision(s):
Bank of Western Australia Ltd v Kwa [2003] WASC 110
Kwa v Bank of Western Australia [2003] WASCA 163
Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14
Westpac Banking Corporation v Anderson [2017] WASC 106
MASTER RUSSELL:
(This judgment was delivered extemporaneously on 27 March 2024 and has been edited from the transcript to correct matters of grammar and to include complete references.)
Introduction
The plaintiff, the Commonwealth Bank of Australia, commenced these proceedings in May 2023 against the first and second defendants, Hamid Zakir Al‑Hamoudi and Shaima Mohammed Al‑Khafaji, to recover an amount owing pursuant to a loan agreement and mortgage originally entered into between The Bank of Western Australia Ltd (Bankwest) and the first defendant, and guaranteed by the second defendant. The plaintiff also seeks possession of the mortgaged property.
The business of Bankwest was transferred to the plaintiff under the Financial Sector (Transfer and Restructure) Act 1999 (Cth), pursuant to which:
(a)the plaintiff became the successor in law of Bankwest;
(b)all the assets and liabilities of Bankwest became the assets and liabilities of the plaintiff; and
(c)any instruments to which Bankwest was a party or under which money is, or may become, payable to Bankwest continues to have effect as if a reference in the instrument to Bankwest were a reference to the plaintiff.[1]
[1] Financial Sector (Transfer and Restructure) Act 1999 (Cth), s 22(1).
What that means, in simple terms, is that though the loan, mortgage and guarantee were entered into between Bankwest and the defendants, any money payable under their terms is payable to the plaintiff, and the plaintiff is entitled to bring this proceeding.
No appearance was filed by the second defendant and, on 30 October 2023, judgment was entered against her in default of appearance pursuant to O 13 r 6 of the Rules of the Supreme Court 1971 (WA) (RSC) in the following terms:
1.No appearance having been entered by the second defendant herein leave is granted to the plaintiff to enter judgment in the terms set out hereunder.
2.The second defendant within 28 days after service of this judgment give the plaintiff vacant possession of the property at 32 Lancaster Place, Maddington in the State of Western Australia being Lot 21 on Plan 23414 and being the whole of the land comprised in Certificate of Title Volume 2169 Folio 873.
3.The second defendant pay to the plaintiff the sum of $156,785.19 being the amount owing pursuant to the guarantee and the mortgage as at 18 October 2023.
4.The second defendant pay the plaintiff's costs of the action to be taxed, if not agreed.
The first defendant entered an appearance on 13 June 2023. No defence was filed.
By chamber summons filed on 31 October 2023, the plaintiff applies for summary judgment against the first defendant pursuant to RSC O 14 r 3 (Application). The plaintiff also seeks leave to bring the Application, as it was not made within the 21‑day limit to bring an application for summary judgment under RSC O 14 r 1, which expired on 4 July 2023.
Application to adjourn
At the commencement of the hearing, the first defendant made an oral application to adjourn the hearing.
He handed up a document which the plaintiff accepted was an extract from an email sent to the plaintiff's solicitors on 26 March 2024 which I marked for identification as 'MFI‑A'. The email is from the second defendant (the first defendant's former wife) Ms Khafaji's lawyers. It refers to Ms Khafaji, with the assistance of their daughter, raising funds to pay the amount claimed by the plaintiff.
In essence, the first defendant seeks further time for his daughter to secure finance or for the property to be sold.
The application to adjourn was opposed by the plaintiff.
I refused the application to adjourn and proceeded to hear the application.
Submissions and evidence relied on by the parties
In support of the Application, the plaintiff relies on written submissions filed on 22 March 2024.
The plaintiff also relies upon affidavits of:
(a)Vrushali Satish More, an officer of the plaintiff, sworn on 11 October 2023; and
(b)Antony Jorge Scott Botello, a lawyer employed by the plaintiff's lawyers, sworn on 18 and 31 October 2023 and 26 March 2024.
The first defendant relies upon his affidavit sworn and filed on 14 December 2023, filed in place of an earlier unsworn affidavit filed on 6 March 2024.
Evidence of the plaintiff
The following facts are derived from unchallenged evidence in the affidavits filed by the plaintiff.
The first and second defendants are the registered proprietors of the land situated at 32 Lancaster Place, Maddington in the State of Western Australia, being the land described as Lot 21 on Plan 23414 and being the whole of the land comprised in Certificate of Title Volume 2169 Folio 873 (Property).
On or about 14 September 2007, the first defendant and Bankwest entered into a written loan agreement (Loan Agreement), pursuant to which Bankwest provided the first defendant with a credit facility, a line of credit, in the sum of $160,000 (Loan Amount).
The first defendant agreed to repay the Loan Amount to Bankwest in accordance with the terms and conditions of the Loan Agreement.
By a deed of guarantee dated 14 September 2007 (Guarantee), the second defendant guaranteed performance of the first defendant's obligations under the Loan Agreement.
Repayment of all money payable under the Loan Agreement and performance of the defendants' respective obligations under the Loan Agreement and Guarantee was secured by a first registered mortgage over the Property in favour of Bankwest registered on the title to the Property on 3 October 2007 bearing number K363654 (Mortgage).
Bankwest advanced the Loan Amount to the first defendant on or about 3 October 2007.
By letter from the plaintiff to the first defendant dated 28 April 2021, the plaintiff notified the first defendant that it intended to conduct a review of the loan account and that if he did not contact the bank by 29 August 2021 the credit limit would expire.
On or about 29 August 2021, the plaintiff cancelled the credit limit under the Loan Agreement.
As at 10 January 2022, the first defendant had failed to pay an amount of $132,738.69 to the plaintiff when it was due and payable. As a result, he was in default under the terms of the Loan Agreement and Mortgage and the second defendant became liable to pay the amount owing pursuant to the Guarantee.
No payment was made by the defendants. The plaintiff issued a notice of default to the defendants dated 13 January 2022 (Default Notice). The Default Notice stated that the first defendant was in default and, if the default was not rectified by 21 February 2022, the plaintiff would require payment of the whole of the amount owing pursuant to the Loan Agreement, the Guarantee and the Mortgage and commence enforcement proceedings.
The first defendant did not rectify the default within the time specified in the Default Notice.
By letter dated 20 September 2022, the plaintiff demanded the total amount owing under the Loan Agreement and Mortgage and gave notice to the first defendant that, if he failed to comply with the demand, the plaintiff would commence enforcement proceedings (Letter of Demand).
The first defendant did not comply with the Letter of Demand. No payments have been made to the plaintiff by the defendants.
I am satisfied all notices and demands were properly given to the first defendant.
The first defendant complains that the writ and other documents were not properly served on him. However, he accepts that he received them and they were given to him personally. He takes issue with the manner in which they were served and that the person serving the documents banged on his door and windows and thrust them at him.
I am satisfied that service of the writ was properly effected on the first defendant. In any event, he entered an appearance and has participated in the proceeding.
In his affidavit sworn and filed on 26 March 2024, Mr Botello on behalf of the plaintiff deposes that the total amount owing under the Loan Agreement as at 26 March 2024 is $167,462.37 with interest accruing at the rate provided in the Loan Agreement, presently 8.98%, at a daily rate of $42.22.
Evidence of the first defendant
The first defendant opposes the Application. He does not dispute that he borrowed the money from the bank and that he owes the money claimed. He says he has been doing his best to resolve the issue by refinancing or selling the property to pay the debt.
He deposes in his affidavit filed on 14 December 2023 that:
(a)there is a genuine dispute, though does he not elaborate as to what the dispute is;
(b)he is experiencing personal hardship, having put considerable effort and hard work to obtain and maintain the Property;
(c)he has incurred a severe medical condition resulting in a back injury, further exacerbating his current situation;
(d)the Property is the family home to him and his six children, and losing it would have a devastating impact and render his family homeless;
(e)there is a 'substantial amount of equity' in the Property. He refers to an appraisal by Heritage Realty which indicates the property is valued between $580,000 and $600,000, and attaches a Comparative Market Analysis prepared on 11 December 2023 in support of this; and
(f)he has consulted a real estate agent who has confirmed that interested buyers are available. This is supported in the appraisal, which says 'we have some buyers chasing this kind of property'.
The first defendant says that he needs more time and to have a trial, so that he can have a lawyer represent him to find a defence. He also says that he wanted to respond to the plaintiff's affidavits. However, they were served in October 2023, before his affidavit sworn and filed on 14 December 2023. He has not sought to file any further evidence in the three months that have elapsed since then.
Application for extension of time
I will deal firstly with the plaintiff's application for leave to bring the application for summary judgment.
The rules require an application for summary judgment to be made within 21 days after an appearance has been filed, or any later time with leave of the Court.[2]
[2] RSC O 14 r 1(1).
The 21-day limit to bring an application for summary judgment reflects the view that such applications should be brought at an early stage of the proceedings. Where there is a delay, it must be explained and the onus is on the applicant to demonstrate that the delay is justifiable in all of the circumstances.[3]
[3] See Westpac Banking Corporation v Anderson [2017] WASC 106 [38] (Pritchard J) and the authorities referred to.
In his affidavit sworn on 31 October 2023, Mr Botello deposes to the reasons for the delay in bringing the Application.
Mr Botello deposes that on or about 12 June 2023, the first defendant raised a complaint in relation to the enforcement steps being taken with Mr Botello during a telephone conversation. Mr Botello relayed this complaint to the plaintiff.
On 13 June 2023, the plaintiff instructed its solicitors that the matter be placed on hold while the complaint was investigated.
On 29 June 2023, the plaintiff instructed its solicitors that the complaint had been closed.
Orders were made on 31 August 2023 adjourning the case management conference sine die.
On 31 August 2023, during conferral between the parties, the first defendant advised that he intended to refinance but had not yet obtained unconditional finance approval. The solicitor for the plaintiff advised the first defendant that in the absence of such unconditional approval, the plaintiff may instruct its solicitors to make an application for summary judgment.
On or about 5 September 2023, the plaintiff instructed its solicitors to prepare an application for summary judgment. On 14 September 2023, the solicitor for the plaintiff sent a letter to the first defendant informing him they were instructed to prepare an application for summary judgment. Steps were then taken to do so and for Ms More to swear her affidavit in support, which was sworn on 11 October 2023 and the application for summary judgment was filed on 31 October 2023
I am satisfied on the evidence before me that, though there was a delay in bringing the Application, it is not an undue delay and was justifiable in the circumstances. There was a period where no action was taken while the first defendant's complaint was investigated and subsequent steps taken, as outlined. The Application is still brought at an early stage of the proceedings and before a defence was filed. There is no evidence of any prejudice to the defendant caused by the relatively short delay in bringing the Application.
I am satisfied it is appropriate that the plaintiff have leave to bring the Application.
Principles relating to summary judgment
An application pursuant to RSC O 14 must be supported by an affidavit verifying the facts upon which the claim is based and stating that, in the deponent's belief, there is no defence to the claim.[4]
[4] RSC O 14 r 2(1).
The legal principles relating to applications for summary judgment are well established. The power to grant summary judgment should be exercised with great care, and summary judgment should only be granted in the clearest of cases, where there is no real issue to be tried.
As the Court of Appeal said in Sutton Investments Pty Ltd v Realistic Investments Pty Ltd:[5]
Summary judgment will be granted only when there is no real question to be tried. The power to order summary judgment is one that should be exercised with great care: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99. It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57]; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46]; Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24], [53] ‑ [55].
[5] Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24].
The plaintiff bears the burden of persuading the court that the claim is a good one and there is no defence. If the plaintiff's affidavit in support of the Application makes out a prima facie case on these two matters, the evidentiary burden passes to the defendant to show there is an arguable defence or another reason there ought to be a trial.
Disposition
The plaintiff has complied with the procedural requirements. Ms More deposes in her affidavit to the facts verifying the claim and to her belief on behalf of the plaintiff that there is no defence to the claim.
The plaintiff's claim, is in my view, clearly established on the evidence. The first defendant has taken no issue with the claim that he entered into the Loan Agreement and the Mortgage, that he borrowed $160,000 under the terms of the Loan Agreement and has not repaid the amount due and owing.
The first defendant does not contend that the Loan Agreement and Mortgage are unenforceable for any reason. He simply contends that it should not be enforced and that he should be given further time for him or his daughter to raise funds or to sell the property, so that the debt can be repaid. He states there is a genuine dispute but he does not elaborate or provide any evidence to support that submission.
Whilst I have sympathy for the first defendant's situation, it does not give rise to a defence. The matters referred to in the first defendant's affidavit and in his submissions, do not disclose an arguable defence or persuade me there is any other good reason why there ought to be a trial of this action.
As observed in the plaintiff's submissions, the effect of the enforcement of the plaintiff's rights is undoubtedly unfortunate. However, hardship and inconvenience are not a defence or reasons to refuse summary judgment. Also, as stated in Kwa v Bank of Western Australia,[6] 'it can be no answer to the Bank's pursuit of its remedies under its security that it might recover the funds advanced and the interest owing by another means which might provide a more favourable outcome' to the first defendant. It will often be the case that the value of a property exceeds the secured debt. However, that is not a relevant consideration and does not deprive a plaintiff from enforcing its rights.[7]
[6] Kwa v Bank of Western Australia [2003] WASCA 163 [2] (Murray ACJ & Steytler J).
[7] See Bank of Western Australia Ltd v Kwa [2003] WASC 110 [23] ‑ [25] (Newnes M).
Conclusion and orders
I recognise that summary judgment should only be awarded in the clearest of cases. I am satisfied on the evidence before me, exercising the proper degree of care, that this is such a case, and it is appropriate to grant summary judgment. Accordingly, I will make the following orders:
1.The plaintiff has leave pursuant to Order 14 rule 1(1) of the Rules of the Supreme Court 1971 (WA) to bring its application.
2.Pursuant to Order 14 rule 3 of the Rules of the Supreme Court 1971 (WA), judgment is entered for the plaintiff against the first defendant.
3.The first defendant pay to the plaintiff the sum of $167,462.37 plus interest at the rate and in the manner specified in the Loan Agreement and Mortgage (as defined in the statement of claim) from the date of judgment until payment.
4.Within 28 days of the date of judgment the first defendant give possession to the plaintiff of all that piece of land situated at 32 Lancaster Place, Maddington in the State of Western Australia more particularly described as:
Lot 21 on Plan 23414 and being the whole of the land comprised in Certificate of Title Volume 2169 Folio 873
5.The first defendant pay the plaintiff's costs of the action, including the costs of the application for summary judgment and the costs reserved on 16 November 2023 and 8 December 2023, to be taxed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AP
Associate to Master Russell
28 MARCH 2024
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