Commonwealth Bank of Australia v Frean
[2023] WASC 461
•1 DECEMBER 2023
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: COMMONWEALTH BANK OF AUSTRALIA -v- FREAN [2023] WASC 461
CORAM: FORRESTER J
HEARD: 27 NOVEMBER 2023
DELIVERED : 27 NOVEMBER 2023
PUBLISHED : 1 DECEMBER 2023
FILE NO/S: CIV 1440 of 2022
BETWEEN: COMMONWEALTH BANK OF AUSTRALIA
Plaintiff
AND
GEOFFREY NORMAN FREAN
First named First Defendant
JOAN SMITH FREAN
Second named First Defendant
Catchwords:
Practice and procedure - Plaintiff's summary judgment application for orders pursuant to O 14 r 3 Rules of the Supreme Court 1971 (WA)
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Summary judgment entered
Category: B
Representation:
Counsel:
| Plaintiff | : | B C Smith |
| First named First Defendant | : | In Person |
| Second named First Defendant | : | In Person |
Solicitors:
| Plaintiff | : | Dentons Australia |
| First named First Defendant | : | In Person |
| Second named First Defendant | : | In Person |
Cases referred to in decision:
Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87
Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14
Westpac Banking Corporation v Anderson [2017] WASC 106
Zaghloul v Bayly [2021] WASCA 125
FORRESTER J:
(This judgment was delivered extemporaneously on 27 November 2023 and has been edited from the transcript.)
Introduction
On 5 May 2022, the plaintiff, the Commonwealth Bank of Australia (CBA), commenced proceedings against the defendants to recover an amount owing pursuant to a Loan Agreement and Mortgage entered into by the defendants with the plaintiff.
Appearances were lodged on 15 June 2023 by both defendants.
On 19 July 2023, the plaintiff applied for leave to apply for summary judgment. Leave is required because the application is 13 days out of time.[1]
[1] Rules of the Supreme Court 1971 (WA) O 14 r 1.
Evidence relied upon by the parties
The plaintiff relies upon the following affidavits:
(a)affidavit of Charmaine Mary Lester sworn 7 July 2023 (the First Lester Affidavit);
(b)affidavit of Brian Cameron Smith sworn 19 July 2023 (the Smith Affidavit);
(c)affidavit of Emily Ka-Yan Wai sworn 19 July 2023 (the Ka‑Yan Wai Affidavit);
(d)affidavit of Daniel Mark Jones affirmed 31 July 2023 (the First Jones Affidavit);
(e)affidavit of Daniel Mark Jones affirmed 24 October 2023 (the Second Jones Affidavit);
(f)affidavit of Charmaine Lester sworn 7 November 2023 (the Second Lester Affidavit);
(g)affidavit of Antony George Botello sworn 23 November 2023 (the Botello Affidavit); and
(h)affidavit of Daniel Mark Jones affirmed 27 November 2023 (the Third Jones Affidavit).
The defendants rely on the following affidavits:
(a)joint affidavit sworn 31 October 2023 (the First Joint Affidavit);
(b)joint affidavit sworn 14 November 2023 (the Second Joint Affidavit); and
(c)joint affidavit sworn 24 November 2023 (the Third Joint Affidavit).
Evidence of the plaintiff
In the First Lester Affidavit, Ms Lester deposes that the defendants are the registered proprietors of land situated in Safety Bay (the Property). On or about 25 September 2009, the plaintiff and the defendants entered into a written Loan Agreement (the Loan Agreement), pursuant to which the defendants borrowed the sum of $250,000 from the plaintiff and agreed to repay that sum in accordance with the terms and conditions of the Loan Agreement.
Repayment was secured by a first registered Mortgage over the Property in favour of the plaintiff, registered on 17 November 2009 (the Mortgage).
The Loan Agreement and the Mortgage incorporated by reference the terms contained in:
(a)the plaintiff's Usual Terms and Conditions for Consumer Mortgage Lending; and
(b)Memorandum of Common Provisions registered number J584291 (Memorandum of Provisions).
The Memorandum of Provisions states that:
(a)the defendants would be in default if they did not pay on time any amount owing under the Loan Agreement;[2]
(b)if the defendants were in default, the plaintiff may issue the defendants with a notice specifying the default and providing a period of time within which the default may be rectified;[3] and
(c)if a default is not rectified within the time specified in the notice, the plaintiff may decide the whole of the amount due under the Loan Agreement is due and payable immediately and the plaintiff may take possession of the property or do anything else the law permits the plaintiff to do as mortgagee.[4]
[2] Affidavit of Charmaine Mary Lester sworn 7 July 2023, 121 (Attachment C) Provision A21.
[3] Affidavit of Charmaine Mary Lester sworn 7 July 2023, 121 (Attachment C) Provision A22.2.
[4] Affidavit of Charmaine Mary Lester sworn 7 July 2023, 121 (Attachment C) Provision A22.5.
Ms Lester deposes that, as at 6 July 2021, the defendants had failed to pay the sum of $85,785.50 to the plaintiff when it was due and payable, and thus were in default under the Loan Agreement.
The plaintiff issued a Notice of Default dated 8 July 2021 (Notice), giving the defendants notice that they were in default and specifying that if the default was not rectified by 16 August 2021 the whole of the amount owing pursuant to the Loan Agreement would become immediately due and payable and the plaintiff would commence enforcement proceedings.
The defendants failed to rectify the default within the time specified.
In the Smith Affidavit, Mr Smith (who is a solicitor employed by the solicitors for the plaintiff) deposes that the plaintiff's solicitors were instructed to prepare an application for leave to enter summary judgment on or about 21 June 2023. He deposes as to the fact that an affidavit was prepared for Ms Lester to execute and sent to her on or about 26 June 2023, that she swore the affidavit on 7 July 2023 and the original was received by the plaintiff's solicitors on 18 July 2023.
Ms Ka-Yan Wai deposes that on 8 July 2021 she sent the Notice to each of the defendants by registered post. The Notice complied with the requirements of the Memorandum of Provisions, and gave a rectification date of 16 August 2021.[5] Annexed to the Ka‑Yan Wai Affidavit are true copies of the Australia Post Delivery Advice receipts, showing that the second named first defendant signed for both Notices.[6]
[5] Affidavit of Emily Ka-Yan Wai sworn 19 July 2023, 3 - 5 (EKW1).
[6] Affidavit of Emily Ka-Yan Wai sworn 19 July 2023, 7 (EKW3).
In the First Jones Affidavit, Daniel Mark Jones deposes that he sent a letter attaching copies of the application for summary judgment, the First Lester Affidavit and the Smith Affidavit to the email addresses for each of the defendants on 20 July 2023, and by ordinary mail to the defendants at the Property address on 21 July 2023. On 24 July 2023, Mr Jones sent an email to each of the defendants attaching a copy of the Ka‑Yan Wai Affidavit and also sent a copy of that affidavit by ordinary post.
In the Second Jones Affidavit, Mr Jones deposes that the total amount outstanding under the Loan Agreement as at that date was $353,647.38, which was increasing at a daily rate, and that the last payment made by the defendants was on 16 October 2019.
Ms Lester deposed further as to the amounts owing in the Second Lester Affidavit, but those numbers have been superseded by the information in the Third Jones Affidavit, which states that, as at 27 November 2023, the amount of principal and interest in arrears is $137,973.65. The total amount outstanding is $358,543.83 and the amount outstanding increases at a daily rate of $79.56. The last payment made to the account was on 16 October 2019.
Evidence for the defendants
In the First Joint Affidavit, the defendants allege that Ms Lester, on behalf of the plaintiff, contacted real estate agents who the defendants had engaged to sell a property in Daglish Street Narrogin (the Daglish Street Property), and attempted to influence the price 'without Court authority', apparently resulting in a sale of the Daglish Street Property for less than the defendants had hoped.
The defendants also depose as to the unsuccessful attempts they had made to sell the property and attribute various issues to the agents. They claim to own a 50% interest in an unencumbered property in Narrogin valued at $900,000 in January 2008, which they anticipate being able to develop, and hope to be in a position to clear the arrears and balance.
The defendants make a number of what, with respect to them, are irrelevant allegations as to some interference with their residential business and their home having been entered by unknown people. They depose as to their ill health and the stress they are experiencing as a result of their perceptions of the plaintiff's conduct.
In the Second Joint Affidavit, the defendants assert that the plaintiff's 'unnecessary sale of our Narrogin business and income stream is the reason for our defence'. They allege improper interference on the part of Ms Lester prevented the sale of the Property which could have been sold in 2018 or 2019 at a fair market price. They claim to have offers for the purchase of the Property but have not accepted any.
In the Third Joint Affidavit, the defendants allege that unauthorised conduct by their previous solicitors resulted in the plaintiff being able to successfully apply for summary judgment in relation to the enforcement of a debt owed in relation to the Daglish Street Property, which meant they were no longer able to meet their mortgage payments. They also allege that a caveat was improperly lodged against the Property which caused an issue with offers on the Property.
Evidence of the plaintiff in reply
In the Botello Affidavit, Mr Botello deposes as to the proceedings which took place in relation to the Daglish Street Property. In short, he deposes that the defendants entered into a loan agreement and mortgage in respect of the Daglish Street Property with Bankwest. The defendants defaulted and the Commonwealth Bank trading as Bankwest commenced proceedings against the defendants. Summary judgment was entered against the defendants in those proceedings on 11 January 2018. The defendants sought to delay enforcement but that was refused and the property was seized and sold, with settlement being completed on 18 April 2019.
I was told from the bar table that the plaintiff does not accept allegations of improper interference on the part of Ms Lester in the sale of the properties.
Application for extension of time
The application for summary judgment is brought pursuant to O 14 r 1 of the Rules of the Supreme Court 1971 (WA) (RSC). An extension of time is required to bring the application, it being 13 days out of time.
The plaintiff has set out, to some extent, the reasons for the delay in making the application. However, the delay between sending the draft of the First Lester Affidavit to Ms Lester and her signing it is unexplained, as is the delay between the execution of the First Lester Affidavit and its receipt by the plaintiff's lawyers. However, in my view the delay is short, and there is no prejudice to the defendants by reason of that delay. If the application is otherwise meritorious, the plaintiff should not be denied the necessary extension.
Applicable legal principles
An application pursuant to 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.[7] The First Lester Affidavit satisfies this requirement.
[7] RSC O 14 r 2(1).
Order 14 r 3(1) of the RSC provides that on the hearing of a summary judgment application, unless the court dismisses the application, or the defendant satisfies the court with respect to the claim, or the part of the claim to which the application relates, that there is an issue or question in dispute which ought to be tried, or that there ought for some other reason to be a trial of that claim or part, the court may give judgment for the plaintiff against the defendant on that claim or part thereof as may be just, having regard to the nature of the remedy or relief claimed.
The legal principles in relation to an application for summary judgment by a plaintiff are well-established. In Zaghloul v Bayly,[8] the Court of Appeal said (referring to Sutton Investments Pty Ltd v Realistic Investments Pty Ltd[9] and Fancourt v Mercantile Credits Ltd[10]):
The critical issue is whether it is clear that there is no real question to be tried. The issue is framed in this manner as it is only in the clearest of cases, where there is a high degree of certainty about the outcome if the proceedings were allowed to go to trial, that summary judgment ought properly to be granted. The exercise of powers to summarily terminate proceedings must always be attended with caution.
[8] Zaghloul v Bayly [2021] WASCA 125 [116] (citations omitted).
[9] Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24].
[10] Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99.
The burden of persuading the court that the claim is a good one and that there is no defence is borne by the plaintiff. If the plaintiff's affidavit in support of the application makes out a prima facie case on those two matters, an evidentiary burden will pass to the defendant to show there is a defence to the action. However, the overall legal burden remains on the plaintiff to persuade the court that the relief sought should be granted.[11]
[11] Westpac Banking Corporation v Anderson [2017] WASC 106 [103].
Disposition
The plaintiff's claim is, in my view, clearly established on the available evidence. Indeed, the defendants have taken no issue with the claim that they borrowed the sum of $250,000 subject to the Loan Agreement and Mortgage, that they are in default and have been for some time, and that they have not recently repaid any of the borrowed sum. They do not dispute that the plaintiff is entitled to seek immediate repayment of the loan amount, and to take possession of the Property.
The defendants do not contend that the Loan Agreement is unenforceable for any reason. They simply contend that it should not be enforced because they were deprived of the ability to service the loan by reason of the conduct of the plaintiff in relation to the Daglish Street Property, and that they hope to be in a position to pay the outstanding amount in the future without the enforced sale.
The defendants have produced no evidence, and made no submission, which is capable of persuading the court that they have any defence to the plaintiff's action. I do not doubt that their position is most unfortunate, and it is not difficult to have some sympathy for them as a result of the issues which have arisen in recent years.
However, the defendants entered into an agreement with the plaintiff. They failed to meet their obligations under it. A default notice was issued in July 2021 and it was not complied with. It is now November 2023. In the absence of a defence, the plaintiff is entitled to enforce its agreement with the defendants. Even if it were accepted that the defendants could make good their default at some point in the future, the plaintiff is not required to wait.
I am satisfied on the evidence before me that, exercising the proper degree of caution required in making such a decision, this is an appropriate case in which to grant summary judgment and accordingly I grant the relief sought.
Orders
The plaintiff have leave to apply for summary judgment to be entered against the defendants.
Summary judgment be entered for the plaintiff against the defendants.
By 16 January 2024, the defendants deliver up vacant possession of the Property.
The defendants pay to the plaintiff the sum of $358,543.83 as at 27 November 2023, together with interest at a daily rate of $79.56 thereafter until payment in full in accordance with the terms of registered mortgage.
The defendants pay the plaintiff's costs of the application and the action, including reserved costs, to be taxed if not agreed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AT
Associate to the Honourable Justice Forrester
1 DECEMBER 2023
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