National Australia Bank Limited v Morgan

[2009] NSWSC 647

CITATION:	National Australia Bank Limited v Morgan [2009] NSWSC 647 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	26 June 2009
JUDGMENT DATE :	26 June 2009
JUDGMENT OF:	Price J at 1
EX TEMPORE JUDGMENT DATE:	26 June 2009
DECISION:	1. Direct the defendant file and serve a further amended defence within 14 days. 2. Costs are to be costs in the cause.
CATCHWORDS:	Civil procedure - pleadings - application for summary judgment - application to strike out
LEGISLATION CITED:	Uniform Civil Procedure Rules Pt 13 r 13.1, Pt 14 r 14.28, Pt 16 r 16.4
CATEGORY:	Procedural and other rulings
CASES CITED:	Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Limited (2003) 214 CLR 51 Commercial Bank of Australia v Amadio (1983) 151 CLR 447 Elkofairi v Permanent Trustee Co Limited (2003) 11 BPR 20,841 General Steel Industries Inc v The Commissioner for Railways (NSW) (1964) 112 CLR 125.
PARTIES:	National Australia Bank Limited Jane Morgan
FILE NUMBER(S):	SC 2008/11345
COUNSEL:	J M White (Plaintiff) J F Merkel (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

PRICE J

26 JUNE 2009

2008/11345 National Australia Bank Limited v Morgan

JUDGMENT

: By a notice of motion filed on 12 June 2009 the plaintiff seeks the following orders:

1. Judgment for the plaintiff on the amended statement of claim pursuant to Pt 13 r 13.1 of the Uniform Civil Procedure Rules (UCPR);
2. In the alternative to order 1:
(a) the defence filed by the defendant on 29 April 2009 be struck out pursuant to Pt 14 r 14.28 of the UCPR, and
(b) judgment given for the plaintiff under Pt 16 r 16.4 of the UCPR.

2 For present purposes it is unnecessary to relate in detail the subject matter of the proceedings save to say that by way of an amended statement of claim the National Australia Bank Limited (NAB) seeks judgment for possession against the defendant of the whole of the land comprised in certificate of title folio identifier 17/SP75377 and known as 117/14 Griffin Place Glebe in the State of New South Wales.

3 Furthermore, an order is sought for leave to issue a writ of possession to enforce the judgment. An order is also sought for a monetary judgment in the amount referred to in paragraph 3 of the amended statement of claim.

4 An amended defence has been filed by the defendant on 29 April 2009. It is this defence that the plaintiff seeks an order, for it to be struck out.

5 Turning firstly to the application for summary judgment, the focus of the plaintiff's argument is there is nothing pleaded nor is there any evidence to the effect that:

the defendant suffered from some ‘special disability’ or of some ‘special situation of disadvantage’ such that she was unable to judge her bargain for herself;
the NAB has taken any surreptitious advantage of the defendant's disability or situational disadvantage; or
any such disability or disadvantage (which is not alleged) was sufficiently evident to the NAB.

6 It is argued that these matters are critical to a substantiation of the pleaded cause of action by the defendant. It is said the defendant intends to invoke the equitable doctrine of unconscionability.

7 In helpful written submissions by Mr White, counsel for the plaintiff, reference is made to Commercial Bank of Australia v Amadio (1983) 151 CLR 447 and Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Limited (2003) 214 CLR 51. In particular what was said by Gummow J and Hayne J at [55] in Australian Competitiion and Consumer Commission v C G Berbatis Holdings Pty Limited was cited:

“It will be apparent that the special disadvantage of which Mason J spoke in this passage was one seriously affecting the ability of the innocent party to make a judgment as to that party's own best interests."

8 What was said in Elkofairi v Permanent Trustee Co Limited (2003) 11 BPR 20,841 Beazley JA (with whom Santow JA and Campbell AJA agreed) was cited. Beazley JA said at [51]:

“In Teachers Health Investments Pty Limited v Wynne (1996) NSW Conv R 55-785, a case which bore a particular similarity to this case, to which I shall refer, I said at 56,029:
‘…two matters need to be established to invoke the court's jurisdiction to set aside an unconscientious transaction. The first is that the party seeking to impugn the transaction was under a relevant disability. In describing this disability, Deane J at 476 referred to the statement of McTiernan J in Blomley v Ryan (1956) 99 CLR at 392 that:
“...as taking surreptitious advantage of the weakness, ignorance or necessity of another. The essence of such weakness is that the party is unable to judge for himself.”’”

9 Ms Merkel, who appears for the defendant, submitted that the defendant by her defence seeks to maintain that she was the recipient of an overdraft loan that was unconscionable because it was or should have been obvious to the bank - but was not to her - that it was improbable that an overdraft of $100,000 could be discharged within 12 months as stipulated by the contract with the bank. The defendant contends it followed that the defendant was likely to lose the security she offered which was subject to a Home Loan to the bank and was cross-securitised by the overdraft which was put in place later in time.

10 Ms Merkel made reference to the gravamen of the defendant's defence being at paragraphs 3 (e) and (f) of the amended defence. In oral submissions counsel for the defendant made reference to ‘special disability’ being raised in paragraphs 3 (a) and 3 (f). Mr White, in response, made reference to those submissions skirting the contentions that he had made, in particular that the defendant had not pleaded nor was there any evidence that she suffered from some special disability.

11 In order to obtain summary judgment, the plaintiff must demonstrate that the defendant's claim is so obviously untenable that it cannot possibly succeed: see General Steel Industries Inc v The Commissioner for Railways (NSW) (1964) 112 CLR 125.

12 It seems to me, whilst there are deficiencies in the defence as pleaded, that the plaintiff has not demonstrated that the defendant's claim is so obviously untenable that it cannot possibly succeed. To my mind the defence raises issues of unconscionability, the question of asset lending so much as may be unconscionable, and issues capable of founding an equitable set-off.

13 I do not propose to grant the order for summary judgment.

14 Turning to the application that the defence be struck out, the defence as drafted is certainly not a document of perfection, it requires amendment. The defence, however, does not fail to disclose a defence. In my opinion the proper order to be made in these proceedings is to grant leave to the defendant to amend its statement of defence within a reasonable period of time. In my view the dictates of justice require that this be the case. I propose to make such an order.

15 I direct that the defendant file and serve a further amended defence within 14 days of today. I do not strike out the current defence.

16 So far as costs are concerned, costs are to be costs in the cause.

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10/07/2009 - amend orders - Paragraph(s) n/a