Commonwealth Bank of Australia v Jorgensen

[2010] QDC 437

[2010] QDC 437

DISTRICT COURT

CIVIL JURISDICTION

JUDGE JONES

No 3552 of 2009

COMMONWEALTH BANK OF AUSTRALIA	Applicant
and
ALAN BRADLEY JORGENSEN	Respondent

BRISBANE

..DATE 22/10/2010

JUDGMENT

HIS HONOUR:  This is an application to set aside a default
judgment entered on 3 September 2010 pursuant to rule 290 of
the Uniform Civil Procedure Rules. There is a further order
sought, namely that in the event that the judgment be set
aside that the proceedings be transferred to the New South
Wales District Court.

It was acknowledged by Mr Jorgensen that I do not have that
jurisdiction and so an alternate argument was advanced, namely
that the proceedings be referred to the Registry of the
District Court in Cairns.

On 8 December 2009 the respondent to this application, the
Commonwealth Bank of Australia, commenced proceedings by
filing a claim and Statement of Claim.  The relief sought was
that the applicant pay to the bank the sum of $69,960 paid by the plaintiff into the defendant's home loan account 60659880 under a mistake of fact.  A further amount of $24,245 was also sought to be recovered under that same home loan.

Leading up to the commencement of these proceedings, on 2 March 2006 the defendant borrowed the sum of $625,675 from
the respondent and as security, a mortgage, was executed.  On
27 May 2008 the respondent bank commenced proceedings in the
Supreme Court against the applicant and the applicant's wife. On 6 August 2008 default judgment was obtained against the
applicant in the Supreme Court.  That judgment being, at least
in part, for possession of the property the subject of the
mortgage.
An application was filed to set aside that judgment, apparently it was not served.  But, in any event, on
6 February 2009 summary judgment was entered.  As I understand
the situation, the default judgment obtained on 6 August 2008 was against the applicant in these proceedings.  Then on
6 February 2009 summary judgment was granted, again in the
Supreme Court.  The relief again being, at least in part, for
the possession of the property the subject of the mortgage. But in this instance the judgment included both the applicant
and his wife.

On 12 November 2009 the respondent under an error, the cause of which is still to be determined apparently, mistakenly paid the amount of $69,960 into the account of the applicant.  At the time that payment was made that account was, in fact, in deficit to the amount of $24,254.  As I have already indicated, it is these monies that are the subject of the Statement of Claim to which I have referred.

The applicant, via 10 separate transfers via a netbank facility withdrew the amount paid by mistake. On 20 November 2009 a letter of demand was issued by the respondent bank to the applicant demanding the repayment of the $69,690 paid by mistake and also the deficit amount of $24,245.

In that correspondence it was made clear that if the monies
were not repaid then instructions were held to commence Court
proceedings against the applicant.

On 26 December 2009 the applicant, by way of email addressed
to a Ms Hastedt, advised the bank that he was no longer using
the email address which he had previously used and went
further to advise:

"Accordingly, I formally advise the CBA that no further
correspondence is to be entered into with me by email and
certainly if ever there was an implied agreement or an
agreement to accept service via email then this is formally
terminated.  It therefore seems that the next time we talk
will be via solicitors."

On not being able to personally serve the applicant, the
respondent on 6 July 2010 obtained an order for substituted
service by Her Honour Judge Ryrie.  Consistent with that order
service was affected in accordance with the order of Her
Honour.  It has not been argued that there was any error in
either mistake of fact or law underlying that order for
substituted service.

DEFENDANT:  Can I interrupt there, your Honour?  Just on that,
I - as far as I am concerned I objected to that totally.

HIS HONOUR:  Objection was taken to the order but on the
material before me there seems to be no basis, either in fact
or law, to challenge that order for substituted service.

On 31 August 2010 a request for default judgment was filed.
On 3 September 2010 default judgment was entered against the
defendant in the amount of $85,745.  In support of the
application, the applicant filed an affidavit on 8 October 2010.  Nowhere in that material does he expressly deny either that the amount which was paid into his account was paid by mistake, nor is it denied that at all relevant times that account was in deficit.

I should also indicate here that no draft defence has been
included in any of the material relied on by the applicant nor
is it deposed to that he is retaining lawyers for the purposes
of drafting any such document.

However-----

DEFENDANT:  Sorry, your Honour, again I said that I would have
them prepare - counsel settle defence if-----

HIS HONOUR:  However, the applicant from the Bar table made
assertions that he would retain the services of solicitors and
counsel if the application were to be successful.

In the affidavit in paragraph 8 it is said in part:

"To the effect that the bank seeks to be taking advantage of

an unprepared lay person to obtain a quick judgment debt."  It
is then said, "This conduct is totally consistent with the
CBA's unrelenting desire to sell up our home during the global
financial crisis despite the CBA's management's initial
agreement for us (i.e. my wife at the time) to simply pay out
the loan repayment arrears and then just continue with the
home loan."

That paragraph, at least on its face, would suggest a defence
based on some agreement between the applicant, his wife and
the bank.  No further particulars of that agreement are sworn
to and there is no evidence of any such agreement.

In paragraph 9 a further defence appears to be articulated in
the form of a representation made by the bank, as I understand
it, to the effect that if certain monies were repaid then the
bank would not proceed with or defer the requirement that the
applicant repay the balance funds.

In an email attached to the affidavit dated 30 August 2010
from the applicant to the Registry of this Court, the
applicant says in part:

"So, in short I believe we have a very good defence in that
the CBA's senior manager located in Sydney, Russell Burns,
changed the terms of our loan agreement when he agreed to us
in writing just paying the monthly arrears without the need to
comply with the CBA's previously issued letter of demand for
the full loan to be repaid."
No copy of any documents evidencing the agreement in writing
is attached to the material provided by the applicant.  I
understood the applicant when asked about this, to say because of the volume of material and various computers being used it might have been difficult, if not very difficult, if not impossible, for him to have been able to make or provide copies of that document in time for this application.  I do not find that explanation particularly convincing.

For completeness, I should also indicate that on 29 August the
applicant sent an email to Ms Hastedt of the bank saying in part:

"I intend filing a defence largely based on the fact that your
senior manager overrode the CBA's claim for repayment of their
loan in full by stating in several emails and verbally I could
disregard that letter of demand if I paid up the arrears which
were about $10,000.  I paid about $15,000 and prepared to
simply continue with the monthly repayments."

Again, no copies of those emails have been provided and
insofar as there is reference to verbal agreements or
representations they have not been articulated in any
meaningful way in the material relied on by the applicant.

This Court does have a wide discretion to set aside default

judgments even in circumstances where they have been regularly
entered.  However, as Mr Hay pointed out, notwithstanding the
fact that the discretion is a wide one, as is the case with any discretion exercised by the Court, it has to be exercised
judicially.  Relevant matters to take into account include
whether or not the defendant has given a satisfactory
explanation for its failure to appear, whether or not there
has been any delay in making the application and whether or
not the defendant has a prima facie defence on the merits of
the claim.

For the purposes of this application, I have some real
reservations about whether a satisfactory explanation has been
provided which might provide sufficient reason to doubt either
the appropriateness of the order for substituted service or
the making of the order now sought to be reviewed.  Even if
the applicant had convinced me in respect of the first two of
those matters to which I have referred, it is perhaps in
respect of the third and arguably the most important matter, that I am not convinced on the material before me that a prima facie defence has been established.

I have been referred to a number of decisions but I intend to
refer to only one.  That being a decision of Her Honour
Atkinson J in Yankee Doodle Doodles Pty Ltd and Blemvale Pty
Ltd.  In paragraph 13 of the judgment of Her Honour she said in part:

"An affidavit in support of an application to set aside
judgment entered into in default of appearance to a writ of
summons must set out all the defences on which the defendant
intends to rely and briefly set out the facts by which the
defendant seeks to establish such defences.  A mere statement
by the defendant that he or she has a good defence is not
sufficient to justify a review of the exercise of judicial
discretion.  The defendant must demonstrate 'a very compelling
reason' for the failure to appear and that it has a plausible
defence, either in law or in fact.  Before allowing a
defendant to come in and defend, the Court should have before
it material which enables it to say how it came about that the
defendant found itself bound by a judgment regularly entered;
that the defendant generally desires to be allowed to come in
and present its case and that issues are raised in such a form
as to require serious consideration of the defence put
forward."

In paragraph 14 Her Honour went on to say in part:

"The allegations must be supported by some reference to evidence to suggest that the defence is plausible and not just raised for the purpose of having default judgment set aside."

In paragraph 16 Her Honour said:

"Significantly the defendant did not exhibit or tender any
proposed defence to the action and in its material said that
it did not want to regain possession of the land.  It does not
appear to have a plausible defence such as would cause the
Court to exercise its discretion to set aside the default
judgment."

In my view the applicant has failed to establish either by way of a draft defence or in his affidavit, sufficient facts, circumstances or matters of law to show that he has a plausible defence.  The references to which I have already referred to above are vague, uncertain and in circumstances where it is alleged that agreements have been made in writing, as I have said, that writing has not been included in the evidence provided by the applicant and, in my view, no sufficient explanation has been provided as to why that has not occurred.

The fact that the bank has not disclosed material is not a
complete answer.  It seems sufficiently clear to me that the
material to which the applicant refers is material that would
be in his possession.

For those reasons the application is dismissed.  Accordingly,
it is not necessary for me to consider the second order
sought.

I have given this decision extempore, perhaps more for the
benefit of the applicant, to give my the decision as
soon as practicable, but I will reserve my rights to tidy up
these reasons when I receive a draft in case the matter goes
elsewhere.

...

HIS HONOUR:  I am not prepared to grant the stay in the
circumstances that the application has been made.

In respect to the question of costs, there has to be some good
reason for the Court to depart from the usual procedure that
costs follow the event.  As I have said, whilst I have some
sympathy for your position, Mr Jorgensen, that is not
sufficient reason for departing from the usual rules.

Therefore I further order that the applicant pay the
respondent's costs of and incidental to this application and
the costs be paid on the standard basis.

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