Dunwoodie v Teachers Mutual Bank Ltd

In *Dunwoodie v Teachers Mutual Bank Ltd*, the appellant, a member of the respondent bank, sought to set aside a default judgment obtained against him by the bank. The dispute arose after the appellant, allegedly under duress from a bikie gang, withdrew funds from his account using a worthless cheque, which subsequently dishonoured and overdrawn his account. The bank then filed a statement of claim seeking recovery of the overdrawn amount, and upon the appellant's failure to respond, obtained a default judgment. The primary judge refused to set aside this judgment, leading to the appeal.

The issues before the Court of Appeal were whether the primary judge erred in exercising their discretion by refusing to set aside the default judgment, and whether the appellant possessed an arguable defence to the bank's claim. This involved considering the nature of an account stated and whether it could found a cause of action when the underlying transaction was void. Furthermore, the court had to determine if duress or fraud by a third party could be relied upon to avoid a contract against a party with no knowledge of the duress or fraud, and whether the bank's policy of cashing cheques without clearance could constitute an "unjust contract" under the *Contracts Review Act 1980* (NSW).

The Court of Appeal found that the appellant had an arguable defence, particularly in relation to the *Contracts Review Act*. The court reasoned that the bank's policy, which permitted cheques to be cashed without clearance or enquiry, could arguably be considered unjust, especially given the circumstances of the appellant's alleged coercion. The court also noted that the appellant's delay in seeking to set aside the judgment, while significant, did not preclude him from having an arguable case for relief.

Consequently, the Court of Appeal granted leave to appeal, set aside the District Court orders, and remitted the matter to the District Court to hear and determine the application to set aside the summary judgment. The court ordered that the respondent pay the applicant's costs in the Court of Appeal.