Driat Pty Ltd v Thomas - [2012] NSWSC 71

Supreme Court

New South Wales

Medium Neutral Citation: Driat Pty Ltd v Thomas [2012] NSWSC 71
Hearing dates: 3 February 2012
Decision date: 03 February 2012
Jurisdiction: Common Law
Before: Davies J
Decision:
1. Default judgment against the First Defendant of 7 November 2011 is set aside.
2. The First Defendant is to pay the costs of the Motion and costs thrown away by reason of obtaining the judgment.
3. Writs of possession issued on 10 November 2011 are set aside.
4. The First Defendant is ordered to file and serve any evidence on which she intends to rely and all cross-claims which she intends to bring on or before 4 pm on 17 February 2012.

Catchwords: JUDGMENTS - setting aside - defence based on Contracts Review Act 1980 - whether loan for business purposes - defence of unconscionability - asset-based lending - satisfactory explanation for failure to file defence - judgment set aside.
Legislation Cited: Consumer Credit Code
Contract Review Act 1980
Cases Cited: Kawalezuk v Accom Finance Pty Limited (2008) NSWCA 343
Mango Media Pty Ltd v Comitogianni [2011] NSWSC 152
Shakespeare Haney Securities Limited v Crawford [2009] QCA 85
Category: Interlocutory applications
Parties: Driat Pty Ltd (Plaintiff)
Carey Yulan Adria Thomas (First Defendant)
Anthony Malbon Allison (Second Defendant)
Representation: D C Price (Plaintiff)
P Folino-Gallo (First Defendant)
Kemp Strang (Plaintiff)
Levitt Robinson Solicitors (First Defendant)

File Number(s): 2011/271645

Judgment

This is an application by the First Defendant, Carey Thomas to set aside default judgment given against her on 7 November 2011. The judgment was for possession of land at xxx xxxxxxxxx xxxx Wildes Meadows and a property at x xxxxxxxxx xxxxxx Point Piper.

The proceedings commenced on 23 August 2011 alleging default on two loan agreements. The first loan agreement was dated 22 July 2010 in an amount of $800,000. Under that loan agreement the principal sum was repayable on 22 July 2011. The second loan agreement was dated 16 May 2011 in the amount of $590,000 with that principal sum to be repaid on 16 August 2011.

There were interest provisions in those loan agreements. Neither oft hose loans was repaid by the expiry date. It appears that each of the loans was taken out at the request of the Second Defendant who is the de facto husband of the First Defendant.

According to the affidavit filed by the First Defendant he requested that she make available her two properties for security for the first loan. He told her that the purpose of the first loan was for the development of wine cellars that he was converting into strata lots at the old Pentridge Gaol in Melbourne. He told her that since she was putting up the money she would be the sole owner of the Pentridge project and she would make a substantial sum of money out of it.

Prior to the second loan being taken out, the Second Defendant said that he needed to increase the borrowing on a short term basis so that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Driat Pty Ltd v Thomas

Details

AGLC: Driat Pty Ltd v Thomas [2012] NSWSC 71
Case: [2012] NSWSC 71
Decision Date: 03 February 2012

CaseChat Overview and Summary

Driat Pty Ltd sought to set aside a default judgment obtained against Thomas in the Federal Circuit Court. The dispute involved a loan agreement for which Thomas had not filed a defence, resulting in a default judgment being entered against him. Driat applied to set aside the default judgment based on the Contracts Review Act 1980, arguing that the loan was for business purposes and thus subject to the Act, and that Thomas had a defence of unconscionability due to the asset-based lending arrangement. Thomas provided a satisfactory explanation for his failure to file a defence within the required time, which included his belief that the loan was not subject to the Act and his financial circumstances at the time.

The court had to determine whether the loan was for business purposes, whether the defence of unconscionability was valid, and whether Thomas's explanation for not filing a defence was satisfactory. The court found that the loan was indeed for business purposes and that the defence of unconscionability was valid due to the nature of the asset-based lending agreement. The court also accepted that Thomas had provided a satisfactory explanation for his failure to file a defence, taking into account his financial situation and misunderstanding of the legal requirements.

As a result, the court set aside the default judgment and allowed Thomas to file a defence. This decision underscores the importance of understanding the requirements of the Contracts Review Act 1980 and the need for borrowers to seek legal advice when dealing with complex financial arrangements. The court's ruling provides a clear indication that explanations for late defences should be considered on a case-by-case basis, with a focus on the individual circumstances of the defendant.

Orders