ING Bank (Australia) Ltd v Lee

[2015] NSWSC 1274

Supreme Court

New South Wales

Medium Neutral Citation:	ING Bank (Australia) Ltd v Lee [2015] NSWSC 1274
Hearing dates:	2 September 2015
Date of orders:	02 September 2015
Decision date:	02 September 2015
Jurisdiction:	Common Law
Before:	Davies J
Decision:	1. I grant leave to the Cross-Claimants to rely on the valuation report of Mr Kent Ward served on the Plaintiff on 10 August 2015. 2. I give leave to the Cross-Claimants to rely upon an expert report from a property marketing expert provided that that report is served by 2 October 2015.
Catchwords:	PROCEDURE – case-management – failure to comply with directions for filing evidence – inadequate explanation for delay – evidence crucial to case on cross-claim – where prejudice to Plaintiff could be met – leave given to rely on evidence
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Category:	Procedural and other rulings
Parties:	ING Bank (Australia) Ltd (Plaintiff) Grace Suk-Woon Lee (Defendant)
Representation:	Counsel: H Van Ravels (Plaintiff) E Chrysostomou (Defendant)   Solicitors: Gadens Lawyers (Plaintiff) Tomaras Lawyers (Defendant)
File Number(s):	2013/233620

Judgment

1. These proceedings commenced on 31 July 2013 seeking possession of a property in Hawthorn Avenue, Chatswood West. The right to possession of the property was said to arise from a default under a loan agreement of 23 October 2010 as varied on 13 July 2011. The loan agreement was secured by the mortgage. A default took place on 31 October 2011 and was not thereafter rectified.

2. Two of the Defendants were borrowers and two were guarantors. Each of them has filed a cross-claim which raises issues about the marketing and sale of another property over which the bank had security in Gubbuteh Road Little Bay.

3. The Amended First Cross-Claim by the First and Second Defendants was filed on 11 November 2014 making that claim, and the cross-claim by the other Defendants was filed on 1 December 2014 making an identical claim.

4. On 1 December 2014 the matter came before me for directions. I made orders that the Cross-Claimants were to serve any evidence-in-chief on their cross-claims and defences by 13 February 2015. That did not occur. On 13 March I made consent orders which provided that the Cross-Claimants were to serve their evidence-in-chief on the cross-claims by 7 April 2015. That did not occur.

5. On 24 April 2015 when the matter came back before me for directions I made orders that the Cross-Claimants were to serve their lay and expert evidence-in-chief by 4 June and any evidence not served by 4 June was not to be relied upon without my leave or the leave of the trial judge.   Again, that order was not complied with.

6. The matter came back before me on 31 July 2015 and when leave was sought orally by the solicitor for the Defendants Cross-Claimants I directed that a Notice of Motion was to be filed and an affidavit containing an explanation for the failures to abide my previous orders.

7. It is significant to note also that at the directions hearings on 13 March and 24 April I was informed by Mr Tzavaras, solicitor, who appeared for the Defendants that he intended to brief two experts, a valuer and a residential property marketing expert. That was not surprising because both experts were crucial to the cross-claims that the Defendants seek to make against the Plaintiffs.

8. A Notice of Motion was filed together with an affidavit from John Tomaras who is the solicitor on the record for the defendant Cross-Claimants. That affidavit was singularly deficient in providing any explanation for the delays in retaining the experts. It disclosed that for the first time a valuer was retained on 22 May 2015. As it happens, that valuation report was served on the Plaintiff's solicitors on 10 August 2015.

9. Mr Tomaras' affidavit says in paragraph 15:

On 30 July 2015 I was served by the Plaintiff's lawyers with an affidavit sworn by Kylie Hodgson on that day. In light of the contents of that affidavit, I received instructions to retain a residential property marketing and sale expert to prepare a report to be relied as evidence for the Defendants Cross-Claimants in relation to marketing and sale aspects of the subject property.

10. That explanation seems to be entirely unsatisfactory if the impression to be gained is that it was only by reason of the service of Kylie Hodgson's affidavit that led to the need for the Defendants Cross-Claimants to obtain an expert report from a property marketing person. It is quite contrary to what I was told by Mr Tzaravas in March and April of this year. It is also quite contrary to the case that it is self-evident the Defendants needed to make on the cross-claims that they had filed.

11. Despite this inadequate explanation for the delays, the Defendants Cross-Claimants seek leave to be entitled to rely on the valuation report served and on a property marketing expert report when that is available. The proposal is that it would be served by 2 October 2015.

12. I can accept that if this evidence is not entitled to be led by the Defendants Cross-Claimants they will be at a significant disadvantage in putting forward their cross-claims. It is only in the circumstances that no hearing date has been fixed for this matter at the present time that I am prepared to indulge the Defendants by permitting the reliance on both of these reports. I have some doubts that such an indulgence is a proper consideration of s 56 and 58 of the Civil Procedure Act 2005 (NSW) and also of the High Court's decision in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 particularly given the inadequate explanation for the delay – see Aon at [103]. I am conscious of the fact, however, that the property marketing report is crucial to the cross-claims being brought.

13. I consider that any prejudice to the Plaintiff can be met by permitting the parties to obtain a date for hearing forthwith. The delays in listing are such that any hearing date is unlikely to prevent the completion of evidence by both parties in accordance with the timetable proposed.

14. Accordingly, I grant leave to the Cross-Claimants to rely on the valuation report of Mr Kent Ward served on the Plaintiff on 10 August 2015 and I give leave to the Cross-Claimants to rely upon an expert report from a property marketing expert provided that that report is served by 2 October 2015. If it is not served by that date, there will be no leave to rely upon it.

15. The Plaintiff does not press for costs of the wasted directions hearings but seeks costs of the Notice of Motion. The Defendants have been granted a considerable indulgence. In the circumstances they should pay the Plaintiff's costs of the Notice of Motion.

16. The further directions I make are that any service of a property marketing expert report is to be by 2 October 2015. The Plaintiff is to complete service of all evidence by 30 October 2015. Any evidence in response is to be served by 13 November 2015. The parties are given leave to approach the List Manager for a hearing date on the basis of a four day hearing, such hearing not to be before the commencement of the new term in 2016.

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Decision last updated: 03 September 2015