National Australia Bank Limited v Amed

The matter of National Australia Bank Limited versus Amed was heard in the Federal Circuit Court of Australia. The bank sought to enforce guarantees given by Amed in respect of a loan facility. The loan was secured by property which the bank had entered into possession of but had not sold. The bank sought to enforce the guarantees against Amed while in possession of the property. Amed applied to set aside a default judgment entered against them. They argued that there was an adequate explanation for their failure to defend, and that a bona fide ground of defence was disclosed.

The primary legal issues before the court were whether Amed had provided an adequate explanation for their failure to defend, and whether a bona fide ground of defence had been disclosed. Additionally, the court needed to determine whether the bank was bound by an agreement not to pursue the guarantees before selling the property, and if the guarantees were unjust.

The court found that Amed had provided an adequate explanation for their failure to defend, as they had been unaware of the proceedings due to a breakdown in communication with their former legal representatives. The court also found that a bona fide ground of defence was disclosed, as Amed argued that the guarantees were unjust due to the bank's possession of the property without selling it. The court held that the bank was bound by the agreement not to pursue the guarantees before selling the property, and that the guarantees were unjust as they were entered into in the context of the bank's possession of the property. The application to set aside the default judgment was therefore allowed.

The court ordered that the default judgment entered against Amed be set aside, and that the matter be listed for further directions. The court also ordered that the bank take no further action to enforce the guarantees against Amed until the property had been sold.