Commonwealth Bank of Australia v Roskott

[2014] NSWSC 246

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Commonwealth Bank of Australia v Roskott [2014] NSWSC 246

Hearing dates:

14 March 2014

Decision date:

14 March 2014

Jurisdiction:

Common Law

Before:

Davies J

Decision:

1. Defence filed 11 June 2013 struck out.

2. Plaintiff is given leave to apply for default judgment forthwith

Catchwords:

REAL PROPERTY - mortgages - default - entitlement to possession - defendants purport to draw bill of exchange for the sum of one dollar in favour of the mortgagee - claim debt has been satisfied - no other defence to claim - defence struck out

Legislation Cited:

Bills of Exchange Act 1909

Cases Cited:

Rural Bank Ltd v Lloyd [2013] NSWSC 1214

Category:

Interlocutory applications

Parties:

Commonwealth Bank of Australia (Plaintiff)
Jan Eduard Roskott (First Defendant)
Adriana Maria Antonia Dirckx (Second Defendant)

Representation:

Counsel:
R Pillay (Plaintiff)
Jan Eduard Roskott (in person) (Defendants)
Solicitors:
Gadens Lawyers (Plaintiff)
In person (Defendants)

File Number(s):

2013/148708

Judgment

1. These proceedings commenced on 11 May 2013 seeking possession of a property known as 121 Frasers Road, Mullumbimby Creek, also known as 7 Frasers Road, Mullumbimby, and claiming a judgment against the Defendants for a sum a little in excess of $1 million.

1. The Plaintiff claims a right to possession of the land and the right to judgment based on a default under a loan agreement which was entered into on 15 May 2006. Default under this agreement took place at least by 22 October 2012 and there was no satisfaction of a s 57 notice issued on 24 October 2012.

1. A defence was filed by the Defendants, acting for themselves, on 11 June 2013. The defence, as best I can discern what is said in it, required the Plaintiff to prove the agreement, including the mortgage, and claimed that a new agreement had been entered into with the Plaintiff's chief executive officer.

1. After the proceedings were instituted, the Defendants made application to the Financial Ombudsman Service on 8 June 2013. On 6 September 2013 the Plaintiff and the Defendants reached a resolution of the agreement through FOS, which required the following of the Defendants:

On or before 31 December 2013, provide the bank with an unconditional contract of sale for the property sufficient to pay the home loan; or provide the bank with unconditional refinance approval letter to repay the home loan; or clear all outstanding arrears on the home loan agreement and maintain ongoing minimum required payments as they fall due in accordance with the terms of the credit contract.

1. The Defendants did none of those things by 31 December 2013. On 17 January 2014 the bank wrote to the Defendants, pointing out that they were in breach of the agreement entered into through FOS. The letter went on to say:

If the breach is not rectified on or before 24 January 2014, the bank may proceed with further recovery action.

1. None of the options given to the Defendants was complied with by 24 January 2014.

1. On 30 January 2014 the Defendants issued to the Plaintiff what they call a Bill of Exchange. That document relevantly says this:

THE PUBLIC-CHARITABLE-CESTUI-QUE-TRUST OF: Jan Eduard Roskott both in its own right and as Trustee for the JAN EDUARD ROSKOTT trust (account number 806980001) and Adriana Maria Antonia Dirckx both in its own right and as Trustee for the ADRIANA MARIA ANTONIA DIRCKX trust (account number 806980001)

PAY ON DEMAND TO THE ORDER OF: The Commonwealth Bank of Australia...

THE SUM CERTAIN OF: ONE AUSTRALIAN DOLLAR EXACTLY, BEINGSUFFICIENT VALUABLE CONSIDERATION ON ANY BILL OF EXCHANGE TENDERED IN ORDER TO CONSTITUTE AND SUPPORT A SIMPLE CONTRACT BETWEEN THE PARTIES

1. The Defendants, including the references to the trusts and the Commonwealth Bank, were then named. In the centre of this document the figure of $1,083,754.89 appears in a box by itself and apparently unrelated to anything else on the document. The document then went on to say:

PAYMENT ATTACHED INDORSEMENTS

INCHOATE ACCOUNTING INSTRUMENT ACCEPTED FOR VALUE MISSING PARTICULARS COMPLETED, ISSUED AND RETURNED COMPLETE.

Pay the sum certain of: ONE AUSTRALIAN DOLLAR EXACTLY ONLY ACCEPTERD AND PAYABLE AT AND NOT ELSEWHERE:

Poinciana Cafe, 55 Station Street Mullumbimby

OR BY MUTUAL ARRABGEMENT AT ANAOTHER AGREED ALTERNATE (sic) ADDRESS at 11.00 hrs AM without further: let, delay, hindrance or ado on Tuesday, the fourth day of February, AD 2014.

1. The Defendants claim that by that document they have discharged the debt owing to the Plaintiffs. They say that this discharge means that the defence filed on 11 June 2013 is no longer relevant. The basis for the assertion that the debt has been discharged is that Mr Roskott claims that under the Bills of Exchange Act 1909 the giving of the bill of exchange, so-called, to the bank operates as a promissory note to the bank.

1. When I enquired of Mr Roskott on whom the bill of exchange was drawn, he said it was on the Defendants, but he appears to accept that the Defendants do not have, nor did they have at the time this document was issued to the bank, the sum of $1,083,754.89 or anything like it.

1. In my view, the sd-called bill of exchange is not a valid instrument except possibly for the amount of $1. Significantly, in Rural Bank Ltd v Lloyd [2013] NSWSC 1214, Adams J had to consider the validity of a bill of exchange drawn in almost identical terms to the present one by a Defendant seeking to defend a claim for possession under a mortgage. Adams J said this:

[6] No discussion is required about the 'Bill of Exchange'. It is plainly worthless. At all events it only proffers the amount of one dollar. Not surprisingly, no-one from the Plaintiff attended the proposed or a later meeting stipulated by the Defendant.

1. He went on to say that neither payment nor tender was made by the issue and service of that bill of exchange. His Honour's views in that case accord entirely with my own in the present case.

1. I endeavoured to obtain from Mr Roskott an identification of what, if any, other defence he had to the claim. He has not been able to identify any such defence, claiming that the bank is estopped by its refusal to accept the bill of exchange that was offered. In my opinion, there is no estoppel against the bank at all.

1. I was at first minded to give Mr Roskott and Ms Dirckx a further opportunity to file a defence that did demonstrate a defence to the claim. However, I am entirely satisfied from my discussions with Mr Roskott that they do not have any defence to this claim, and that the charade that has been gone through in relation to the bill of exchange is simply an attempt to put off the day on which payment needs to be made to the bank in satisfaction of an agreed default and a failure to pay.

1. If it is the case that there is any other defence which Mr Roskott has not yet articulated, I consider that the appropriate course is that the Defendants should apply to set aside any judgment that the Plaintiff obtains. The onus will then be on the Defendants to show that they have an arguable defence in those circumstances.

1. For the reasons I have given, the Defence filed 11 June 2013 is struck out, and the Plaintiff is given leave to apply for default judgment forthwith.

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Amendments

21 March 2014 - corrected paragraph numbering

Amended paragraphs: 10-16

Decision last updated: 21 March 2014