Commonwealth Bank of Australia v Microtest Services Pty Ltd

[2024] NSWSC 911

Supreme Court

New South Wales

Medium Neutral Citation:

Commonwealth Bank of Australia v Microtest Services Pty Ltd [2024] NSWSC 911

Hearing dates:

26 July 2024

Date of orders:

26 July 2024

Decision date:

26 July 2024

Jurisdiction:

Common Law

Before:

Davies J

Decision:

1. The defence filed by the defendant on 4 March 2024 is struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW).

2. Plaintiff is given leave to seek default judgment such application not to be made until 4pm on 27 September 2024.

3. Stood over for directions before Davies J at 9:30am on 27 September 2024.

4. Liberty to apply on 2 days’ notice.

Catchwords:

LAND LAW – possession of land – default under mortgage – no defence to the claim – where defendant has entered into a conditional contract of sale of the land - defence struck out – leave to plaintiff to seek default judgment the day after contract is due to become unconditional

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Nil

Texts Cited:

Nil

Category:

Procedural rulings

Parties:

Commonwealth Bank of Australia (Plaintiff)
Microtest Services Pty Ltd (Defendant)

Representation:

Counsel:
Z Hu (Plaintiff)
M Ashraf (By leave)

Solicitors:
Dentons Australia Ltd (Plaintiff)
Self-represented (Defendant)

File Number(s):

2024/45313

Publication restriction:

Nil

Judgment

1. These proceedings commenced on 5 February 2024 seeking possession of land at Wentworth Avenue in Toongabbie. The basis of the claim was default under a mortgage given to the plaintiff on 24 September 2021. That mortgage secured a loan agreement entered into on 3 June 2021, whereby the plaintiff lent to the defendant an amount of $1,360,000.

2. The loan was due for repayment on 30 November 2022 but was not repaid. Demands were made during the course of 2023 and a s 57 notice issued on 7 November 2023 was not complied with, leading ultimately to the commencement of the proceedings.

3. The defendant, by its director, has filed a defence which admits the entry into the agreement, but simply denies the assertions in the statement of claim that there is default under the loan.

4. The director has appeared on behalf of the defendant this morning by leave and has informed me that a contract for the sale of the property was entered into on 26 June 2024. That contract is conditional on the obtaining of a construction certificate on or prior to 26 September 2024.

5. The director has frankly agreed that the defendant is required to repay the bank what has been borrowed together with interest and in that way, there is no defence to the bank's claim. Rather, what the defendant seeks is time to enable the contract to become unconditional so that the bank can be repaid.

6. The bank seeks that it have the right to enter default judgment but to stay execution of the writ in aid of that judgment. I am informed by the solicitor acting for the bank there is no present fear about the value of the land compared to what is owing to the bank.

7. Despite the failure of the defendant to comply with court orders to file and serve evidence, and despite the delays in the defendant actually entering into a contract to sell the land in order to repay the debt, I consider that the appropriate course is to strike out the defence on the basis that it does not disclose the defence to the claim, but to stay the bank from entering default judgment until immediately after the expiry of the period of time in the contract for the obtaining of a construction certificate.

8. The practical effect of the course I have adopted will be much the same as the bank has proposed but will, I hope, avoid any problems which might arise by reason of the defendant having a judgment against it when it is subject to a contract of sale.

9. Accordingly, I make these orders:

1. The defence filed by the defendant on 4 March 2024 is struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW).

2. Plaintiff is given leave to seek default judgment such application not to be made until 4pm on 27 September 2024.

3. Stood over for directions before Davies J at 9:30am on 27 September 2024.

4. Liberty to apply on 2 days’ notice.

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Decision last updated: 29 July 2024