Commonwealth Bank of Australia v Fenwick

[2018] NSWSC 615

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Commonwealth Bank of Australia v Fenwick [2018] NSWSC 615

Hearing dates:

07 May 2018

Decision date:

07 May 2018

Jurisdiction:

Equity

Before:

Leeming JA

Decision:

1. The stay made on 19 March 2012 on these proceedings is lifted.

 

2. The defence dated 23 August 2011 (originally filed in the Local Court of NSW) is struck out.

 

3. Judgment for the plaintiff against the defendant in the amount of $199,270.10.

 4. The defendant to pay the plaintiff’s costs of the proceedings including its costs of the interlocutory process filed on 22 March 2018.

Catchwords:

PRACTICE – default judgment – defence struck out – judgment entered in favour of plaintiff

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW), rr 16.2, 42.34

Cases Cited:

Kelly v Willmott Forests Ltd (in Liq) (No 5) [2017] FCA 689

Category:

Principal judgment

Parties:

Commonwealth Bank of Australia (Plaintiff)
Aaron James Fenwick (Defendant)

Representation:

Counsel:
F Reynolds (Solicitor) (Plaintiff)

  Solicitors:
TurksLegal (Plaintiff)

File Number(s):

2011/60950

Publication restriction:

Nil

ex tempore Judgment

1. HIS HONOUR: In these proceedings, the plaintiff Bank moves by interlocutory process filed 22 March 2018 for orders removing a stay placed on proceedings on 19 March 2012, striking out the defence, and entry of judgment in its favour against the defendant, Mr Aaron James Fenwick. Originally an order for costs on an indemnity basis was sought but a brief adjournment having been allowed, the Bank is now content with the default position as to costs in the event that the other orders are made.

2. The proceedings have a relatively complex history. It is accepted on the pleadings that the parties entered into two loan agreements, both in connection with separate managed investment schemes. At least one of those schemes was the subject of pending representative proceedings commenced in 2011 in the Federal Court of Australia.

3. The Bank’s statement of claim is straightforward. It pleads the facilities, the defendant’s indebtedness and defaults, and its entitlement to be repaid principal, interest and costs. The defence admits entry into the facilities and failure to repay. Its substance is a reference in some detail to a relatively elaborate statement of cross-claim, which it may be inferred, is directed to the matters raised in the representative proceedings. The representative proceedings in the Federal Court were compromised and that compromise has been approved: Kelly v Willmott Forests Ltd (in Liq) (No 5) [2017] FCA 689. It is not necessary to summarise that settlement. Consistently with the settlement of the Federal Court proceedings, by orders made on 6 October 2017 by consent, the defendant’s cross-claim has been dismissed.

4. More recently, the Bank has sought to proceed on its statement of claim. The defendant’s former solicitors filed a notice of ceasing to act on 7 February 2018. Pursuant to directions made by Black J earlier this year, on 27 March 2018 personal service was effected by a process server of the interlocutory process and supporting affidavits of Ms Reynolds and Mr Kneebone. I have the affidavit of service of the process server. Save for Mr Fenwick’s acknowledgment to the process server that he was the person referred to in these documents, there have been no responses to emails, telephone calls or physical correspondence to him in connection with these proceedings.

5. I turn to the orders sought in the interlocutory process. The first is the lifting of the stay. The terms of the stay were limited until the final resolution of the representative proceedings in the Federal Court, or any appeal from those proceedings. The proceedings having been compromised and the compromise approved, final orders have been made, and it is difficult to see how there could be any appeal. I am satisfied that the conditions subject to which the stay was granted are now satisfied and that it is appropriate that it be lifted to entitle the parties to resolve the pending litigation.

6. The second order sought by the Bank is that the defence be struck out. Speaking only slightly generally, the only substantive allegations in the defence are those referring to and incorporating the cross-claim which turned upon the now resolved representative proceedings in the Federal Court and which itself has now been dismissed by consent. It is in my view quite plain that the defence in its current form, while adequate when the Federal Court proceedings were extant and the cross-claim was extant, is now embarrassing and is apt to be struck out, and I will make such an order in due course.

7. The third order sought by the Bank is an order for default judgment including interest. The indebtedness, the default and failure to repay are entirely uncontroversial, and indeed were established on the pleadings (prior to the striking out of the defence). The amount of the indebtedness is established by the affidavit of Mr Kneebone, a Risk Manager employed by the Bank. The Bank is content with a judgment as quantified by that affidavit. That affidavit establishes that as at mid-February 2018, the defendant’s indebtedness on the two facilities was $167,815.98 and $31,454.12 respectively. (Ms Reynolds has informed me that the reason for the latter being so much smaller than the former is that until relatively recently, there were ongoing repayments being made to that latter facility.) The sum of those two amounts is $199,270.10.

8. The Bank has established to my satisfaction each of the elements of its cause of action. There has been no appearance today, just as there has been no appearance on all previous occasions in this Court by Mr Fenwick, and I am satisfied that he has been personally served with notice of the application that is made today and the evidence on which it is based. The defendant will be in default upon his defence being struck out: UCPR r 16.2(1)(c). I see no reason why the Bank’s application for default judgment should not be acceded to today.

9. In those circumstances, I am satisfied that it is appropriate to make the following orders:

1. The stay made on 19 March 2012 on these proceedings is lifted.

2. The defence dated 23 August 2011 (originally filed in the Local Court of NSW) is struck out.

3. Judgment for the plaintiff against the defendant in the amount of $199,270.10.

4. The defendant to pay the plaintiff’s costs of the proceedings including its costs of the interlocutory process filed on 22 March 2018.

ADDENDUM 8 May 2018

10. On the question of costs, no submissions were directed to UCPR r 42.34, which applies (since the judgment is less than $500,000) with the result that an order for costs would not ordinarily be made unless the commencement and continuation of the proceedings in the Supreme Court was warranted. However, the Bank commenced in the Local Court, and, in light of the issues raised by the defendant and other borrowers who were class members in the Federal Court proceedings, it was appropriate for the proceedings to be transferred to and continued in this Court. Hence r 42.34 does not stand in the way of the costs order in favour of the Bank.

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Amendments

08 May 2018 - UCPR r 42.34 added to cover sheet.

[10] addendum added.