Commonwealth Bank of Australia v Jillian Marshall and Commonwealth Bank of Australia v Richard Cooper & Anor Nos. SCGRG 95/240, SCGRG 95/242 Judgment No. 6028 Number of Pages 3 Procedure Supreme Court Procedure

[1997] SASC 6028

IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA

DOYLE CJ, BOLLEN J AND DUGGAN J

Procedure - Supreme Court procedure - South Australia - practice under Rules of Court - summary judgment - appeal against summary judgment - action by bank to recover monies advanced - defendants unrepresented - bank tendered certificate stating amount owing - defendants raised certain matters in defence but did not present any evidence - defendant had letter from bank indicating amount outstanding - amount differed from that in certificate - Master did not see letter and granted summary judgment - letter had potential to show there was an arguable defence - appeal allowed. Trade Practices Act 1974s52, referred to. Lawrence v Griffiths (1987) 47 SASR 455, applied.

ADELAIDE, 10 February 1997 (hearing), 28 February 1997 (decision)

#DATE 28:2:1997

Appellants' counsel: Mr K McCarthy QC with Mr P Kerin

Solicitors: Peter Kerin & Associates

Respondent's counsel: Mr J Lunn

Solicitors: Andrew A Burdett

Appeal allowed.

DOYLE CJ

1. The Court has before it appeals in two actions. The appeals were heard together. Each appeal is against a summary judgment entered by a Master of the Court in favour of the plaintiff Commonwealth Bank of Australia ("CBA"), the present respondent.

2. The judgments were entered in each of two actions brought by CBA to recover from the defendants as guarantors certain money advanced by CBA to the trustee of a family trust. The one advance was the subject of the claim made in each action. Certain of the defendants also granted mortgages to CBA to secure repayment, and relief was claimed under those mortgages as well. However, for reasons which are not presently material, the judgment entered was simply for the sum of money then claimed by CBA to be outstanding. The claims for the enforcement of the mortgages and for interest under the terms of the security documents were adjourned.

3. The defendants had entered a defence in each action. They were not represented by solicitors. They raised certain matters by way of defence, including claims that the guarantees were void or voidable, that the relevant notice of demand was not properly made and a claim that that guarantees were unenforceable by virtue of s52 of the Trade Practices Act. They also claimed that the moneys had been repaid.

4. When the application for summary judgment came on before a Master, the defendants appeared in person.

5. On appeal, only one point was pursued. The point the subject of argument on appeal arose in the following manner.

6. At the hearing before the Master CBA tendered a certificate to the effect that the amount owing as at 23 February 1996 was $1,266,990.47. Under certain provisions to be found in each guarantee and in the mortgages, that certificate was (using the terms of the guarantee) "prima facie evidence that such amount is so due or owing or secured and of all other matters therein set forth...."

7. Although the defendants had, as already mentioned, pleaded repayment in full, their defence gave no particulars of the alleged repayment, and in that respect was a defective pleading. Nor was anything put before the Master to support the claim of repayment or to counter the prima facie effect of the certificate that money was still owed to CBA in respect of the advances which it had made to the family trustee. When asked about the alleged repayment, the family member who appears to have spoken for all defendants, said that he did not have "any evidence here before you today for that." It is relevant to mention that the record of the hearing before the Master indicates that the submissions made by the family member were brief and ineffectual by way of opposition to the application.

8. After those brief submissions the Master sought to clarify with counsel for CBA the amount for which judgment was sought. While that was being done the relevant defendant then said that he had "a piece of paper from the Commonwealth Bank, Kadina." He said:"This may help clarify the debt was all over the place."It is common ground that he then showed to counsel for CBA a letter from a branch of the Commonwealth Bank at Kadina, which letter can be read as indicating that as at late November 1995 the amount outstanding to CBA was $901,467.35. Counsel for CBA said that he did not object to the Master looking at the letter, but the Master did not. Counsel for CBA made the point that the letter appeared to provide the amount outstanding as at a date which differed from the date of the certificate, and apparently at that time showed to the relevant family member documents purporting to show how CBA arrived at the amount shown in the certificate.

9. The Master then proceeded, without any further debate, to enter judgment for CBA.

10. In my opinion the appeal should be allowed and the judgment should be set aside.

11. At the hearing it was incumbent upon CBA to show that the defendants did not have an arguable defence which ought fairly to be tried: Lawrence v Griffiths (1987) 47 SASR 455 at 457. The certificate tendered by the bank provided only prima facie evidence that the amount stated was owing. The letter which was produced at the hearing, although not tendered, had the potential to prevent the Master being satisfied that there was no arguable defence to be tried, because it raised a doubt about the accuracy of the certificate. In my opinion, the defendants being unrepresented, the Master should have offered to them the opportunity of a short adjournment (about a week or perhaps less) to enable them to put before him in proper form the letter and any other material relevant to the point. In my opinion the Master erred in proceeding to enter judgment as he did then and there, relying upon the certificate which was only prima facie evidence, in view of the fact that the defendants had in their possession a letter which could give rise to a doubt about the amount for which the judgment should be entered.

12. The Court must be careful not to be unduly indulgent to unrepresented litigants. Banks and other lenders, like other litigants, are entitled to have their rights respected by the Courts and are entitled to insist that wholly unmeritorious defences be dispatched at an early stage. It may well be that there was no substance in the point sought to be made by the defendants upon the letter, and it is not difficult to think of reasons why the amount shown in the letter might have differed from the amount shown in the certificate. But the amount involved was substantial, and it was clear that the defendants did not understand what was required. In my opinion a short adjournment to give them an opportunity to put the matter properly before the Court was therefore required, and until the Court was satisfied that they had had that opportunity and had not made use of it, or were satisfied that there was nothing in the point based on the letter, the Master should not have been satisfied that there was no arguable defence to be tried.

13. It is a matter of concern that the defendants have been slow in prosecuting this appeal, but that does not alter the force of their complaint. It was also argued by counsel for CBA that, if the Court was against CBA on the first point, the judgment should stand for the amount shown in the letter. However, as was pointed out by counsel for the appellants, they do not admit that that amount is owing. Their point is that the letter gave rise to a doubt that, without some explanation, could not be dismissed and in the face of which it was not appropriate to enter a summary judgment. Complaint was also made that the appellants had not filed an affidavit showing the nature of the defence which they wished to raise, should the judgment be set aside. In my opinion it was not necessary for them to do so in a case like this, however desirable that might have been in a broader sense. The appellants' point is that the Court erred in entering the judgment on the material then before it and without offering the defendants an opportunity to put their point properly.

14. Accordingly, I would allow the appeal, set aside the judgment and remit the matter to the same Master for further hearing.

15. I make it plain that in my opinion the end result may well be the same. The question is whether the Court can be satisfied to the requisite degree, after the appellants have been given the opportunity to make their answer to the effect of the certificate given under the relevant clause of the guarantees and mortgages. There is no reason why the appellants should not be expected to do that promptly, and it should then be possible for the Court to bring the application for summary judgment to a conclusion.

BOLLEN J

16. I agree with the reasoning of the Chief Justice. I agree with the order which he proposes.

DUGGAN J

17. I agree that this appeal should be allowed for the reasons given by the Chief Justice. I also agree with the orders proposed by the Chief Justice.