Commonwealth Bank of Australia v Haughton (No 3) - [2020] SASC 199

Supreme Court of South Australia
(Civil)
COMMONWEALTH BANK OF AUSTRALIA v HAUGHTON (No 3)
[2020] SASC 199
Judgment of The Honourable Justice Livesey (ex tempore)
29 September 2020
MORTGAGES - MORTGAGEE'S REMEDIES - POSSESSION
The applicant Bank sought judgment for a debt and an order for possession in respect of the respondent’s investment property. The respondent had entered into a loan facility secured by a mortgage over the investment property.
The applicant had given the respondent a notice of demand and a notice under s 55A of the Law of Property Act 1936 (SA), which provided that the respondent had breached a covenant of the mortgage and a term of the facility by failing to pay the amount owing to the applicant. The respondent failed to comply with the notices.
Held:
1. The applicant is entitled to judgment for the debt due in an amount of $483,542.82
2. The applicant has complied with s 55A of the Law of Property Act 1936 (SA) and the National Credit Code and is entitled to an order for possession.
3. The applicant is entitled to costs of and incidental to these proceedings on a solicitor and client basis pursuant to the terms of the mortgage.
Law of Property Act 1936 (SA), s 55A; National Consumer Credit Protection Act 2009 (Cth), Sch 1; Uniform Civil Rules 2020 (SA), r 242.2, referred to.
Bayford v St George (No 2) [2003] SASC 242, applied.

COMMONWEALTH BANK OF AUSTRALIA v HAUGHTON (No 3)
[2020] SASC 199
Civil

LIVESEY J: The trial in this matter has proceeded today in the absence of Mr Haughton. Yesterday, Mr Haughton said that he may not attend today and I warned him that his absence would not interrupt the hearing of this matter. Mr Haughton said that he understood and expected that the trial would proceed in his absence.
Yesterday, after I ruled on Mr Haughton’s bias application, the applicant Bank opened its case and tendered a number of documents. On a few occasions I overruled objections made b y Mr Haughton. Sometimes these objections were based on the fact that the Bank had not answered his affidavit which was admitted for the purposes of the bias application yesterday. On other occasions the admission of documents was opposed by Mr Haughton because he claimed that there were matters that had not been addressed.
The first of these matters is that Mr Haughton says that the Bank has not produced a properly certified “cause of action” or “true bill”. So as to understand his objections I will quote from Mr Haughton’s affidavit admitted yesterday:
I, a man, Peter Scott Haughton, currently domiciled near [address], and currently do solemnly and sincerely swear and declare with good faith, without prejudice under the penalty of perjury in the state of South Australia, and:
Fact [1]I was born on the nineteenth of October nineteen sixty seven and am age of consent, am of sound mind and reason and do sincerely and honestly affirm the present instrument to be my own words, written by me, given freely without duress and expressing accurately to the best of my ability, the facts herein of which I have witnessed first-hand; and
Fact [2]I am here to settle and close the matter; and
Fact [3]I require a properly certified verifiable originating cause of action or a true bill; and
Fact [4]I require the full and immediate restoration of my property; and
Fact [5]This affidavit must be rebutted point by point with specificity under the penalty of perjury in the state of South Australia within 3 days or it stands as fact; and
Fact [6]All facts and circumstances deposed herein are with my own knowledge and expertise except such as deposed herein which is from information as appear within this present affidavit.
I explained to Mr Haughton that, despite his assertions that the affidavit “spoke for itself”, a number of the matters raised by him were difficult to understand.
For example, insofar as asserted fact [2] suggests that Mr Haughton comes before the court to “settle and close the matter” I enquired whether he required any time to speak with the solicitors acting for the Bank and to negotiate with them. Initially, Mr Haughton said that he did. I gave him time to speak with the solicitors for the Bank. However, following the break, I was advised that the parties were deadlocked and there was no prospect of the matter being settled.
Insofar as Mr Haughton referred to a “properly certified verifiable cause of action” I asked Mr Haughton to explain what he meant. Mr Haughton declined to do so, telling me again that the affidavit “spoke for itself”. I endeavoured to explain to Mr Haughton that this matter was proceeding on pleadings (albeit that his defence was embodied in an affidavit that he filed earlier in these proceedings). Mr Haughton did not seem to understand what I was trying to explain to him. Mr Haughton suggested that the Bank had not demonstrated what it was owed.
When I asked Mr Haughton what he meant by a “true bill” he seemed to come back to the issue of the extent of the Bank’s claimed indebtedness. I explained to Mr Haughton that the Bank was proposing to verify the amount of its alleged debt by affidavit. Mr Haughton seemed to think that the trial should stop unless and until that had been addressed. I endeavoured to explain to Mr Haughton that it is usual in a trial for counsel to outline what counsel expects to prove even though not all of those matters may be immediately to hand. At all events, earlier today, I have received an affidavit that, on the face of it, verifies the amount of the Bank’s debt and I refer to exhibit A7.
Mr Haughton’s final objection seemed to be that the documents referred to a debt amount that incorporates what he described as a sum in the order of $35,000 which he says was for “a fee”. Mr Haughton explained yesterday that that was a very large sum and he suggested that it was not owed. I explained to Mr Haughton that he would need to be in a position to lead evidence or put legal argument, if he so wished, about that issue. The documents tendered by the Bank were admitted on the basis that it would be a matter for Mr Haughton to tender evidence or put arguments as to why that fee amount is not, in fact, owed. However, as I say, Mr Haughton has not attended today so the documents have been admitted without the benefit of whatever argument or evidence that Mr Haughton had in mind.
At the conclusion to the Bank’s case I was informed by Ms Clark, who appears as counsel for the Bank, that there is an amount of around $24,000 referred to in the documents which was expended in respect of various amounts which are ordinarily incurred in connection with transactions of the kind in evidence in this case. She has referred to such imposts as stamp duty (the lion’s share of the amount), conveyance fees, Lands Titles Office fees, registration fees, searches and the like. In the circumstances, I do not regard Mr Haughton’s proposed issue about the fee to which he referred as impeding the Bank proceeding.
Based on the evidence which has been tendered before the Court yesterday and today I am prepared to make the following findings on the balance of probabilities.[1]
[1]    In making these findings I, again, refer to the reasons delivered on 17 July earlier this year in Commonwealth Bank of Australia v Haughton [2020] SASC 135 which set out, in general terms, the background to this matter and the effect of the pleadings. There is no need for me to repeat what was there set out.
1The parties entered into a Viridian low document line of credit on 29 October 2007 (exhibit A4).
2That loan was secured by a registered mortgage over the property in favour of the applicant Bank, dated 18 May 2007 (exhibit A3).
3Mr Haughton drew down on the line of credit secured by the mortgage and, by 16 July 2018, the debit balance owing had become $361,811.36 (exhibit A1).
4The Bank issued a notice of demand pursuant to the line of credit on 18 July 2018, in the amount of $362,893.48, which notice was posted to Mr Haughton on 18 July 2018 to Mr Haughton’s address (exhibits A1, A6 and A14).
5There was no compliance with the notice of demand, and it was followed by a notice issued pursuant to s 55A of the Law of Property Act 1936 (SA) (the s 55A notice). That notice was dated 26 September 2018, and was delivered to Mr Haughton’s address on 28 September 2018. The section 55A notice was in the amount of $363,129.23 (exhibits A9, A11 and A15).
6The s 55A notice was required by reason of the National Credit Code, which is Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth), as to which the Bank submitted:
The Code applies to a credit contract entered into between a natural person and the Credit Provider, for purposes including the purchase of a residential property for investment (s 5).
A Credit Provider cannot enforce a credit contract or a mortgage unless:
1     the debtor is in default;
2     the Credit Provider has served a default notice, allowing the debtor 30 days from the date of the notice to remedy the default; and
3     the debtor has not complied with the notice contemplated by the Code (s 85).
The Bank’s service of the s 55A notice meets the requirements on it under the National Credit Code.
7As at 28 September 2020, the total amount due and owing to the Bank by Mr Haughton, under the line of credit and secured by the mortgage, was $483,542.83 (exhibit A7).
8Pursuant to rule 241.2(1) of the Uniform Civil Rules 2020 (SA), a Notice to Occupier was served upon the occupiers on 9 September 2020, by affixation of the notice to the door of the premises (exhibit A10).
In these circumstances, the Bank moves for judgment for the debt owing to it. In addition, the Bank says, having complied with the requirements of s 55A, and the provisions of the Law of Property Act 1936 (SA) and the Code, it is entitled to an order for possession of the mortgaged property.
The Bank seeks an order for its costs. The Bank seeks an order for indemnity costs or solicitor and client costs, and in so doing relies upon the terms of its mortgage. In particular, the Bank relies upon clause B9, which is to be found between pages 23 and 24 of Exhibit A3.
Clause B9, insofar as is relevant, provides as follows:
Costs, cover charges and expenses
By signing this mortgage, without your having to sign any other document, you authorise us from time to time to debit and charge any account of yours with all costs, charges and expenses, legal or otherwise (including premiums for insurance costs, (solicitor and client, as well as party and party), duties, taxes and other moneys paid or payable by us or any agent of ours) which we shall pay, incur, sustain or be put to in connection with:
...
(f)the exercise or attempted exercise of any right, power, authority, discretion or remedy conferred on us or on any attorney of ours under or by virtue of this mortgage or by law.
The Bank relies upon the reasons of Besanko J in Bayford v St George (No 2),[2] submitting that the order for costs in its favour should be on a solicitor and client basis.
[2] Bayford v St George (No 2) [2003] SASC 242.
In the circumstances, I will order that the respondent pay the Bank’s costs of and incidental to these proceedings on a solicitor and client basis.
I should formally record that, at various points during the interlocutory hearings of this matter, Mr Haughton foreshadowed a number of arguments which he wished to put in opposition to the Bank. One of those arguments concerned what he has described as a “promissory note”. I left open the question of a final ruling on that issue in my reasons delivered in July. In response to an inquiry from the Court, counsel for the Bank took instructions and advised the Court that the Bank did not wish to put on any evidence by way of rebuttal in circumstances where Mr Haughton had not pressed any defence to the Bank’s claims.
In all of these circumstances, I am prepared to make orders in terms of the draft judgment which has been provided to me and which was served on Mr Haughton. As I understand it, Mr Haughton was given a copy of that draft judgment at the beginning of the trial yesterday.
Accordingly, the orders of the Court are as follows:
1Judgment is entered in favour of the applicant against the respondent for the sum of $483,542.82.
2The respondent is to give the applicant possession, within 30 days of the service of a copy of this order on him, of the land, subject to memorandum of mortgage registered number 10711846, being:
2.1 Description of land – [the address] in the State of South Australia;
2.2 Title Reference - Volume 5406, Folio 413.
3I will order that the respondent pay the applicant’s costs of and incidental to these proceedings on a solicitor and client basis.
4If the respondent pays to the applicant all money secured by the above memorandum of mortgage, the applicant (subject and without prejudice to the due exercise of any power of sale under that security) is to redeliver possession of the property to the respondent and discharge the memorandum of mortgage.