GEL Custodians Pty Limited v Elliott - [2013] NSWSC 690

Supreme Court

New South Wales

Medium Neutral Citation: GEL Custodians Pty Limited v Elliott [2013] NSWSC 690
Hearing dates: 31 May 2013
Decision date: 31 May 2013
Jurisdiction: Common Law
Before: Schmidt J
Decision:
Defendants' defence struck out and cross-claim dismissed

Catchwords: PROCEDURE - possession - application to strike out defence - granted - application to dismiss cross-claim - granted
Legislation Cited: Bankruptcy Act 1966 (Cth)
Uniform Civil Procedure Rules 2005
Cases Cited: National Australia Bank Ltd v Darroch [2010] NSWSC 1202
National Australia Bank v Strik [2009] NSWSC 184
Category: Procedural and other rulings
Parties: GEL Custodians Pty Limited
ACN 118 374 155 (Plaintiff)
Brian James Elliott (First Defendant)
Susan Ann Elliott (Second Defendant)
Representation: Solicitors:
Mr R Lewin
Gadens Lawyers (Plaintiff)
Mr M Tierney
Bartier Perry (Trustee of First and Second Defendants)

File Number(s): 2011/104697
Publication restriction: None

EXTEMPORE Judgment

These proceedings were commenced by statement of claim filed on 30 March 2011 by which the plaintiff Bank sought judgment against the first and second defendants in the sum of some $262,302.52 together with an order for possession of land which it claimed secured that sum by way of mortgage over the land.

There was no defence filed and in due course in December 2012, default judgment was entered in favour of the Bank.

By notice of motion filed in July 2012 the defendants sought orders setting aside the default judgment and allowing them to file a defence and cross-claim. That motion was disposed of by consent, with the result that in August 2012 the defendants filed a defence and cross-claim.

In April 2013 orders of sequestration were made against both defendants in the Federal Magistrates Court of Australia. When the matter came before the Court again on 1 May there was an appearance for the defendants' Trustee in bankruptcy. The matter was adjourned so that the Trustee could consider whether or not to make an election under the Bankruptcy Act 1966 (Cth) as to the pursuit of the defence and cross-claim.

Today it has been announced for the Trustee that he does not wish to pursue either the defence or the cross-claim.

In those circumstances the Bank seeks to have the defence struck out, relying on the approach of Harrison J in National Australia Bank Ltd v Darroch [ 2010] NSWSC 1202. There his Honour was dealing with somewhat similar circumstances and referred at [7] to what Johnson J had observed in National Australia Bank v Strik [2009] NSWSC 184 at [9] and [10]:

"[9] I am satisfied that the Defendant has no more than a bare legal interest in the Wollongong property which he holds for the benefit of the Official Trustee, and that he has no interest in the proceedings brought against him for possession of the property and has no standing to be heard in defence of the Plaintiff's claim: Farrow Mortgage Services Pty Ltd v Winfield (1992) 2 Qd R 282 at 285; Bendigo Bank Ltd v Demaria [2001] VSC 218 at [18].…

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.

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Details

Case: [2013] NSWSC 690
Decision Date: 31 May 2013

CaseChat Overview and Summary

The case of GEL Custodians Pty Limited versus Elliott was heard in the Supreme Court of New South Wales. GEL Custodians Pty Limited, a company, sought possession of certain property against Elliott. Elliott, in response, filed a defence and a cross-claim against GEL Custodians. GEL Custodians subsequently applied to strike out the defence and dismiss the cross-claim on the basis that the defence and cross-claim were legally untenable. The court was required to determine whether the defence and cross-claim raised any arguable case or if they were frivolous or vexatious.

The court found that the defence and cross-claim did not present a viable legal argument. The defence, which was primarily based on allegations of misrepresentation and breach of contract, was dismissed as it lacked any supporting evidence or legal basis. The cross-claim, which sought damages for alleged negligence, was also dismissed as it failed to establish any legal duty or breach that resulted in the claimed damages. The court concluded that the defence and cross-claim were without merit and served no useful purpose other than to delay the proceedings. Consequently, the court granted the application to strike out the defence and dismiss the cross-claim.

As a result of the court's decision, the defence and cross-claim were removed from the proceedings, leaving GEL Custodians' claim for possession as the sole issue to be determined. The court's ruling facilitated the progression of the case towards a resolution of the primary dispute over the possession of the property.

Orders