National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority - [2018] NSWSC 157

Supreme Court

New South Wales

Medium Neutral Citation: National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority [2018] NSWSC 157
Hearing dates: 24 November 2017
Date of orders: 21 February 2018
Decision date: 21 February 2018
Jurisdiction: Common Law
Before: Walton J
Decision:
The Court makes the following orders:

(1) The notice of motion brought by Ms Charlton, filed 27 September 2017, is dismissed; and
(2) Costs are reserved.
Catchwords: PRACTICE AND PROCEDURE – farm debt – debt and possession – judicial review – course of proceedings – summary dismissal application – application to separate proceedings – pleadings – relevant principles – notice of agreement to mediate after s 9 notice – validity of s 11 certificate – whether satisfactory mediation – participation in mediation – default notices prior to s 8 notice and mediation – whether clear case – whether untenable or arguable – whether certainty of outcome – summary dismissal refused – separation of proceedings refused – notice of motion dismissed.
Legislation Cited: Civil Procedure Act 2005 (NSW)
Farm Debt Mediation Act 1994 (NSW)
Real Property Act 1900 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Cherryop Pty Ltd v Commonwealth Bank of Australia [1996] NSWSC 194
Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] ALR 333
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69
Gooley v NSW Rural Assistance Authority (No 2) [2017] NSWSC 1336
Langley v AMP Capital Investors Ltd [2007] NSWSC 937
McDonald v Grech [2012] NSWSC 717
Neumann Contractors Pty Ltd v Wyong Shire Council [2011] NSWSC 481
Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19
Roxo v Normandie Farm (Dairy) Pty Ltd [2012] NSWSC 765
Shaw v New South Wales (2012) 219 IR 87; [2012] NSWCA 102
Simmons v Protective Commissioner of NSW also known as NSW Trustee and Guardian [2012] NSWSC 455
Spellson v George (1992) 26 NSWLR 666
Waller v Hargraves Secured Investments Ltd (2012) 245 CLR 311
Texts Cited: Ritchie’s Uniform Civil Procedure (NSW)
Category: Procedural and other rulings
Parties:
2015/27483
National Australia Bank Ltd (Plaintiff / Cross-Defendant)
Josephine Joan Charlton in her own capacity and as trustee for the Phoenix Trust (Defendant / First Cross-Claimant)
Kevin Michael O’Brien (Second Cross-claimant)
2016/122304
Josephine Joan Charlton (First Plaintiff)
Kevin Michael O’Brien as trustee of the Phoenix Trust (Second Plaintiff)
The General Manager, NSW Rural Assistance Authority (First Defendant)
National Australia Bank Ltd (Second Defendant)
Representation:
Counsel:
2015/27483
C Colquhoun (Plaintiff / Cross-Defendant)

2016/122304
C Colquhoun (Second Defendant)

Solicitors:
2015/27483
DibbsBarker Lawyers (Plaintiff / Cross-Defendant)
2016/122304
DibbsBarker Lawyers (Second Defendant)

File Number(s): 2015/27843; 2016/122304

Judgment

HIS HONOUR: By a statement of claim brought on 16 January 2015, the National Australia Bank Ltd (“NAB”) brought debt and possession proceedings against Josephine Joan Charlton in her own capacity and as Trustee for the Phoenix Trust (“Ms Charlton”) (case number 2015/27843). NAB claimed a debt owed by Ms Charlton which was made up of an overdraft, a First Business Options Loan and a Second Business Options Loan. NAB sought an order for possession under a mortgage. An amended statement of claim and amended defence were filed respectively on 4 and 20 May 2016 (“the debt and possession proceedings”).
By a statement of cross-claim brought on 9 July 2015 (and later amended on 2 August 2015) Ms Charlton, then as the first cross-claimant, and Kevin Michael O’Brien, as a second cross-claimant, brought a cross-claim in the debt and possession proceedings (“the cross-claim proceedings”). (An amended defence to the first statement of cross-claim was filed on 4 May 2016).
Proceedings were commenced by summons by Ms Charlton in her own capacity and Mr O’Brien as “Trustee of Phoenix Trust” on 21 April 2016 against the General Manger of the NSW Rural Assistance Authority (“the RAA”) and NAB. These were judicial review proceedings and bore the case number 2016/122304 (“the judicial review proceedings”).
On 2 June 2016, Schmidt J made orders that the debt and possession and judicial review proceedings would be heard together whereby the evidence in the one matter would be evidence in the other. (Collectively the debt and possession, cross-claim and judicial review proceedings shall be referred to as “the proceedings”).
The proceedings have involved a significant degree of case management and interlocutory issues emerged. The course of the proceedings will be discussed below.
At the conclusion of that case management procedure, and after the matter had been provisionally listed for hearing in February 2018, on a two to three day estimate, subject to a notice of motion seeking to separate the debt and possession and judicial review proceedings (to hear the judicial proceedings first in time), Ms Charlton filed a notice of motion dated 5 September 2017 (“the notice of motion”) seeking summary dismissal of the debt and possession proceedings, or alternatively that the judicial review proceedings be heard separately (and before) the debt and possession proceedings (the notice of motion was formally filed on 27 September 2017).
The proceedings are fixed for hearing on 14-16 March 2018 upon an estimate of three days, subject to the determination of the notice of motion by this judgment.

The Relief Sought

The orders sought in the notice of motion also incorporated grounds or contentions in support of the same. I will set out the orders sought, as expressed, in full (save as to costs):

1. The applicant seeks a Summary Dismissal of the Plaintiffs ([sic] claim 2015/27843 pursuant to UCPR r 13.4(1), on the basis that the farmer Ms Charlton has never had farm debt mediation “exclusive” of “enforcement action” as defined under s 4(1) FDM Act 1994. The provisions of s 9A(1) Creditor may agree or decline mediation. “A creditor who has received a request from farmer to mediate, may, but notice in writing given to the farm, agree or decline to mediate in respect of the farm debt involved. This did not occur. The RAA manipulated the time frames stipulated in the act in favour of the creditor affecting the application of the provisions in s 9B(1) in circumstances where s 9B(2)(d)(ii) & s 9B(2)(d)(iii) prevailed issuing a mediation kit inside 21 days before the creditor hat met its obligations under s 9B(2)(d)(ii) at which point the RAA had not way of satisfying itself that the creditor would meet the “time frame” obligations the RAA then applied the provisions of s 10 avoiding s 9B in respect of the farmers rights [sic]. As a result of the contravention of the FDM Act by the Plaintiff and maladministration of the process by the NSW Rural Assistance Authority under the Farm Debt Mediation Act 1994 an ultra-vires s 11 Certificate was issued 29 August 2014. The proceedings have been instituted based on an ultra-vires s 11 Certificate serving a wrongful purpose, this is an abuse of process a claim which cannot be justly determined in the circumstances because the bar to enforcement action should not have lifted for the Plaintiff/farm creditor, to commence “enforcement” as it had already occurred before s 11 “satisfactory mediation” had occurred.
2. Should the court reject the above, then I seek matter 2016/122304 Charlton & O’Brien v General manager of the NSW Rural Assistance Authority be heard separately from matter 2015/27843 NAB v Charlton to determine the validity of the s 11 Certificate issued under the provision of s 11(1)(c)(i) as “satisfactory mediation” been had, which issued 29 August 2014 as a matter of priority given the maladministration clearly evident in respect of lack of due process, material not provided to the farmer for response until August 2017 following the Certificates [sic] expiration on the 17 July 2017 by NSW Rural Assistance Authority.

Rule 13.4(1) of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) is in the following terms:

13.4 Frivolous and vexatious proceedings
(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:
(a) the proceedings are frivolous or vexatious, or
(b) no reasonable cause of action is disclosed, or
(c) the proceedings are an abuse of the process of the court,

the court may order that the proceedings be dismissed generally or in relation to that claim.

As to the second prayer for relief, reference may be made to r 28.5 of the UCPR which is in the following terms:

28.5 Consolidation etc of proceedings
If several proceedings are pending in the court and it appears to the court:
(a) that they involve a common question, or
(b) that the rights to relief claimed in them are in respect of, or arise out of, the same transaction or series of transactions, or
(c) that for some other reason it is desirable to make an order under this rule,

the court may order those proceedings to be consolidated, or to be tried at the same time or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.
Note. See also Division 5 of Part 6 with respect to joinder of causes of action and joinder of parties.

Evidence on the Motion

In support of the notice of motion, Ms Charlton relied upon two affidavits sworn by her on 6 September and 16 October 2017, respectively.
The affidavits constituted an admixture of fact, opinion and submissions together with documents which were annexed. The affidavits were admitted without objection on an information and belief basis. (It may be noted that the transcript of these proceedings records that the admission of the affidavits into evidence was accepted under s 136 of the Evidence Act 1995 (NSW). Reference should be also made to s 172 of that Act). No such limitation was applied to the annexures to the affidavits which were admitted without objection.
NAB relied upon a bundle of documents including an index to the Court Book, filed on 21 December 2016, and a transcript of the proceedings before Schmidt J on 2 June 2016 (Ex 3).
It may be noted that a substantial number of affidavits were filed in the proceedings proper in accordance with directions issued by the Court. Those affidavits appear in the index to the Court Book tendered by NAB and consist of the following:

Six affidavits by Ms Charlton;

Five affidavits by Mr O’Brien; and

Four affidavits filed for NAB (namely, two by Ashley Gardiner and two by Clive Thomas).

None of those affidavits were read on the notice of motion.

Pleadings

The following represents a summary of relevant pleadings in the proceedings. The summary is derived from the amended statement of claim, the amended defence by Ms Charlton (the original defence was filed on 12 March 2015), a reply to the original defence by NAB dated 4 May 2016 and Ms Charlton’s reply to that reply dated 5 May 2016.
Where documentary evidence from the annexures to Ms Charlton’s evidence and Ex 3 corresponds with the pleadings, I have noted the same against the applicable pleading below. Some evidence led on the notice of motion did not correspond with the summary of the pleadings (particularly Annexures 1 and 2 to Ms Charlton’s affidavit of 16 October 2017) but has been referred to in the course of the judgment. A number of contentions were advanced in support of the notice of motion had no evidentiary foundation upon the evidence lead on the notice of motion.

The Debt and Possession Proceedings

The following represents a summary of the pleading by NAB and defences in the debt and possession proceedings (with applicable references to the evidence on the notice of motion):

The following pleadings were admitted by Ms Charlton as defendant to the debt and possession proceedings:

Ms Charlton is the registered proprietor of the land referred to in the Certificate of Title with Folio Identifier 22/724651, also known as “Oriel”, Shannonvale Road, Five Ways NSW (“the property”). In the amended defence to the statement of claim, Ms Charlton pleaded that she, in her capacity as one of the two trustees of a trust known as the Phoenix Trust (“the Trust”), borrowed money from the NAB. Mr O’Brien was the other trustee. It was pleaded that Ms Charlton did not have the ability to indemnify NAB against loss. It was also pleaded that she held the property as trustee (with occupancy and possession) but that she later resigned as trustee.

There was a mortgage executed by Ms Charlton which was dated 31 October 2007 and registered with dealing number AD551517 (“the mortgage”).

On or about 30 August 2005, NAB issued a business letter of offer to Ms Charlton (“the First Business Letter of Offer”). Pursuant to the First Business Letter of Offer, NAB agreed to provide an overdraft facility to Ms Charlton (“the overdraft”). The First Business Letter of Offer contained specific and general conditions in respect of the overdraft (“the overdraft conditions”).

On or about 20 November 2006, NAB issued a notice of agreed changes to Ms Charlton (“the First Notice of Agreed Changes”). Pursuant to this First Notice of Agreed Changes, NAB agreed to increase the limit of the overdraft. In August 2008, the overdraft was increased to $200,000 after the issuing of a business letter of advice to Ms Charlton.

On or about 31 August 2007, NAB issued a further business letter of offer to Ms Charlton (“the Second Business Letter of Offer”). Pursuant to the Second Business Letter of Offer, NAB agreed to provide two further facilities to Ms Charlton:

a business options interest only loan (interest in arrears) in the amount of $110,000 (“the First Business Options Loan”); and

a business options interest only loan (interest in arrears) in the amount of $340,000 (“the Second Business Options Loan”).

The First Business Options Loan, the Second Business Options Loan and the overdraft were each secured by the mortgage.

Ms Charlton pleaded that the mortgage was a farm mortgage within the meaning of the Farm Debt Mediation Act 1994 (NSW) (“the Act”). This was admitted by NAB. It was also accepted that the debts arising from the loan facilities were incurred by Ms Charlton on behalf of the Trust as a farmer for the purposes of conducting farming operations by the Trust upon the property.

Ms Charlton admitted there was a default on the obligations under the overdraft on or about May 2011 and that that default remained (at least at the date of the filing of the amended defence).

NAB pleaded that it served on the defendant a cancellation notice with respect to the overdraft on or about 26 October 2011 demanding monies in the sum of $228,860.49 (“the first cancellation notice”). There seems to be no dispute about this fact, save that the defendant pleaded the notice was issued on 25 October 2011 (see Annexure 4 of the affidavit of Ms Charlton of 16 October 2017) and Ms Charlton referred to an “enforcement action” taken by NAB from 20 October 2011, relying on a letter dated 20 October 2011 from the “Senior Legal Counsel Recoveries” of NAB to Ms Charlton (which states that “enforcement action will be immediately commenced to recover amounts owed to [NAB]” – see Annexure 1 to the affidavit of Ms Charlton of 6 September 2017).

On 16 November 2011, NAB issued a “default/demand” notice to Ms Charlton demanding payment of $691,301.33 being the total amount owing under the overdraft, the First Business Options Loan and the Second Business Options Loan plus enforcement expenses at that time (see Annexure 1 of affidavit of Ms Charlton of 10 September 2017). This default notice stated that the notice was issued pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) (“the RPA”). (There was apparently a further “default/demand” notice issued on 24 January 2012, but no notice was given under s 57(2)(b) of the RPA).

NAB pleaded that on 31 August 2012, the First Business Options Loan expired and that Ms Charlton failed to pay the amount owing under that loan. (There does not seem to be a specific defence pleaded in this respect). NAB pleaded (at para 12 of the amended statement of claim) that it served upon Ms Charlton, on 17 October 2014, a further cancellation notice demanding a sum of $422,717.41 being monies due under the overdraft. This was described as the “second cancellation notice” (see Ex 3). It was pleaded that Ms Charlton failed to pay the whole of the amount in the second cancellation notice (and failed to make any payment toward the Second Business Options Loan).

Under the heading “Default and Demands under the Overdraft, First Business Options Loan and Second Business Options Loan”, NAB pleaded (at para 14 of the amended statement of claim) that on 27 October 2014 NAB served on the Ms Charlton a default/demand notice dated 27 October 2014 demanding the sum of $1,023,719.70 being said to be the total monies plus enforcement costs owed under the overdraft, the First Business Options Loan and the Second Business Options Loan. By that demand, a notice was issued under s 57(2)(b) of the RPA (see Ex 3: Ms Charlton annexed that document and an earlier demand dated 9 September 2011 in her affidavit of 16 October 2017 at Annexure 8). Ms Charlton denied these allegations and pleaded she was not served this demand. It was, however, admitted that Ms Charlton failed to pay the amount demanded (but further stated Ms Charlton was not served the notice).

Paragraphs 16 and 17A fell under the heading “Money secured by the Mortgage and indebtedness of the defendant” in the amended statement of claim (that heading and those paragraphs immediately followed the heading and paragraphs referred to in [17(7)] above). Those paragraphs of the amended statement of claim were as follows:

16. The money secured by the Mortgage includes the liability of the defendant pursuant to:
(a) Overdraft;
(b) First Business Options Loan; and
(c) Second Business Options Loan…

17A. The defendant is in default under the terms of the Overdraft Facility, the First Business Options Loan and the Second Business Options Loan and the plaintiff is entitled to judgment for the amounts owing by the defendant under the Overdraft, the First Business Options Loan and the Second Business Options Loan.

Ms Charlton contended that she had retired as one of the trustees of the Trust on 20 August 2011 and had notified NAB of that fact. This was denied by NAB.

The following elements of the amended defence concern pleadings as to a mediation, which occurred on 17 July 2014 (“the mediation”):

20. On or about 22 January 2014, the Plaintiff issued the Defendant a notice dated 21 January 2014, under Section 8(1) of the Farm Debt Mediation Act 1994, of its intention to take enforcement action in respect of the Farm Mortgage and of the availability of Mediation under the Farm Debt Mediation Act 1994 in respect of each of the Debts.
21. On or about 13 February 2014, the Defendant notified the Plaintiff in writing that she requested a Mediation concerning the Debts, under the Farm Debt Mediation Act 1994.
22. The Plaintiff did not notify the Defendant in writing whether it agreed or disagreed to mediate in respect of the Debts pursuant to Section 9A of the Farm Debt Mediation Act 1994 but, rather, the Rural Assistance Authority ("the RAA") sent the Defendant a Mediation Kit.
23. On or about 16 May 2014, a Mediator was appointed by the parties to mediate in respect of the Debts.
24. On 19 May 2014, the Defendant advised the Mediator that she was no longer the trustee of the Trust and raised with him the fact that she may not have the requisite authority to mediate on behalf of the Trust.
25. On 27 May 2014, the Defendant reminded the Plaintiff that she was no longer the trustee of the trust.

26. The Mediation took place on 17 July 2014 without the input of Kevin.
27. The Mediator did not approve Kevin representing the Trust at the Mediation even though Kevin was present.
28. As the Defendant did not have authority to bind the Trust in any negotiations at the Mediation and the trustee of the Trust was not allowed to participate in the Mediation, no satisfactory Mediation took place.
29. Despite the fact that no satisfactory Mediation took place and in circumstances where the provisions of Section 11(1)(c)(ii) and (iii) of the Farm Debt Mediation Act 1994 were not satisfied, the Plaintiff applied to the RAA for it to issue a certificate that the Act did not apply to the Farm Mortgage.

In a reply to the original defence by Ms Charlton, NAB stated that it issued a notice to the Ms Charlton under s 8 of the Act on or about 22 January 2014 (see Annexure 6 to the affidavit of Ms Charlton of 16 October 2017). The notice indicated that NAB “intends to take enforcement action against property over which it holds a farm mortgage under which you are in default” (referring to the overdraft, the First Business Options Loan and the Second Business Options Loan).

Ms Charlton issued a notice to NAB under s 9 of the Act on 13 February 2014 (see Annexure 4 to the affidavit of Ms Charlton of 6 September 2017).

NAB was issued an mediation kit by the RAA on 20 February 2014 (Ex 3). In her affidavit of 6 September 2017, Ms Charlton contended that she did not receive a response from NAB in writing pursuant to s 9B(2)(d)(ii) of the Act and that the mediation kit should not have been issued beforehand. There is a contention that Ms Charlton executed an agreement to mediate on 17 July 2014.

In answer to para 22 of the amended defence, NAB stated that it issued a notice to the RAA that mediation was required but otherwise denied the defence. NAB admitted for the purposes of para 23 of the amended defence that a mediator was appointed to mediate with the respect to the overdraft facility and the First Business Options Loan and Second Business Options Loan. Otherwise, paras 22 to 25 were not admitted.

NAB pleaded that evidence of anything said or admitted during the mediation session was not admissible in any proceedings in a court. As to para 28 of the amended defence, NAB pleaded in reply, inter alia, the following (at para 21):

(b) … pursuant to s 10(1) of the FDMA, once the defendant had given NAB a notification in accordance with s 9 requesting mediation, NAB was precluded from taking enforcement action in respect of the Mortgage unless a certificate was in force under s 11 in respect of the Mortgage;
(c) … pursuant to s 11(1) of the FDMA, the RAA was required to issue a certificate that the FDMA did not apply to the Mortgage on the basis that:
(i) Ms Charlton was in default under the Mortgage;
(ii) No exemption certificate was in force in relation to the Mortgage; and
(ii) Either:
(A) A satisfactory mediation had occurred in that the Mediation had proceeded as far as it reasonably could in an attempt to achieve a resolution of the dispute in respect of the Overdraft, the First Business Options Loan and the Second Business Options Loan but had nevertheless failed to resolve the dispute; or
(B) Three months had elapsed after a notice was given by NAB under s 8 and NAB had throughout that period attempted to mediate in good faith (whether or not a mediation session or satisfactory mediation took place during that period);

(d) … that even if (which is denied):
(i) The defendant was not the trustee of the Trust at the time of the Mediation; or
(ii) Kevin O'Brien (as the only trustee of the Trust at the time of the Mediation) did not participate in the Mediation,

it was not necessary for:
(iii) The defendant to be the trustee of the Trust at the time of the Mediation; or
(iv) Kevin O'Brien (as the only trustee of the Trust at the time of the Mediation) to participate in the Mediation,

in order for a satisfactory mediation to take place for the purposes of s 4(1A) of the FDMA; and
(e) Otherwise denies paragraph 28 of the defence.

Following the mediation on 17 July 2014, a s 11 certificate was issued by the RAA on 29 August 2014 (“the s 11 certificate”) (Annexure 7 of the affidavit of Ms Charlton of 16 October 2017). In her affidavit of 6 September 2017, Ms Charlton contended she was denied natural justice because she was not provided “relevant material” to enable a response prior to the s 11 certificate issuance. She pointed, in particular, to the “newly acquired” material in the form of correspondence from NAB to the RAA of 29 August 2014 (and a letter from Mr D D P O’Keefe of Macquarie Law to the RAA of the same date).

In the amended defence, the following pleadings were introduced:

29. Despite the fact that no satisfactory Mediation took place and in circumstances where the provisions of Section 11(1)(c)(ii) and (iii) of the Farm Debt Mediation Act 1994 were not satisfied, the Plaintiff applied to the RAA for it to issue a certificate that the Act did not apply to the Farm Mortgage.
29A. The Plaintiff described the default circumstances inaccurately to the RAA, knowing they had acted in contravention to the Act from 2011 onwards, the description of default described as after the expiry of facilities at 31 August 2012, the expiry of the facility described had resulted due to the delay by the Plaintiff in dealing with the farm debt dispute, conduct which induced representations made by them in respect of future matters concerning the financial affairs of the Trust in particular from 22 August 2011 onwards.
30. Despite the fact that the Defendant advised the RAA that no satisfactory Mediation had taken place and in circumstances where the provisions of Section 11(1)(c)(ii) and (iii) of FDMA were not satisfied, the RAA without further reference to the Plaintiff or the Defendant, Issued a certificate pursuant to Section 11 of the Act that the Act did not apply to the Farm Mortgage.
31. In the premises set out above, the certificate issued by the RAA pursuant to Section 11 of the Act was invalid.
31A. Following the issuance of the Section 11 certificate on the 29 August 2014, the Plaintiff issued a notice to the Defendant dated 9 September 2014 pursuant to [s] 57(2)(b) of the NSW Real Property Act 1900 which made reference to an Overdraft cancellation, the previous Overdraft cancellation notice being dated 25 October 2011 a notice which was issued and enacted before any farm debt mediation was held, constituting enforcement action in contravention to the Act.
31B. The Plaintiff attempted to withdraw the notice dated 9 September 2014, which was issued pursuant to Section 57(2)(b) of the NSW Real Property Act 1900, as a result the Plaintiff reissued a 17 October 2014 Overdraft cancellation notice.

(Paragraphs 29A, 31A and 31B were fresh pleadings).

It was also contended that the RAA “acted with “cronyism” and that there had been maladministration by the RAA. (Ms Charlton wrote to the RAA on 14 August 2014 contending that a satisfactory mediation had not occurred effectively raising what will later be described as the “mediation issue”).
No reply was filed to the fresh pleadings in the amended defence and, hence, the Court does not presently have the pleadings in reply in respect to paras 29A, 31A and 31B of the amended defence. It is unclear whether the 9 September 2014 demand was withdrawn by the demand of 27 October 2014.
However, the reference in para 31B to a cancellation notice issued on 17 October 2014 is a reference to the second cancellation notice referred to in NAB’s pleadings.

The Cross-claim and the Judicial Review Proceedings

Ms Charlton and Mr O’Brien sought the following relief in the amended cross-claim:

A declaration that NAB is entitled to recover the sum of $691,301.53 and not $1,055,083.48 as originally claimed, in the event of compliance with all other relevant applicable law and specifically to the Act.

A declaration that NAB made representations about future matters which were misleading and deceptive resulting in loss and damage to the defendants.

A declaration that NAB engaged in unconscionable conduct in regard to its dealings with the defendants resulting in loss and damage to either or both the defendants.

A declaration that NAB prematurely terminated the Trust Loan facilities against Ms Charlton.

Some of the pleadings in the cross-claim may be noted as follows:

Prior to 2011, Ms Charlton borrowed monies from NAB for or on behalf of the Trust. The debt was secured by mortgage over the property.

In October 2011, NAB cancelled the Trust’s finance facilities and advised it would immediately commence enforcement action (relying on letters dated 20 and 25 October 2011).

Cancellation of the facilities constituted an enforcement action according to the Act. The action was unconscionable, unfair and oppressive.

On 16 November 2011, default notices and demands were issued pursuant to s 57(2)(b) of the RPA.

Representations were made to Ms Charlton and Mr O’Brien. There was also reference to a failure to give notice.

It was pleaded that NAB represented to Ms Charlton and Mr O’Brien that it would continue both of the Trust’s finance facilities beyond the date of expiration on 31 August 2011. NAB did not inform the cross-claimants of the reason for its refusal to continue the Trust’s finance facilities beyond 20 October 2011 in circumstances where neither loan was due to expire on 20 October 2011.

It was further pleaded that NAB’s conduct was deceptive and misleading.

In an amended defence to the cross-claim dated 4 May 2016, NAB admitted that it served a notice of cancellation on or about 26 October 2011 and that, on or around 16 November 2011, it served on Ms Charlton a notice of default/demand demanding payment of the facilities and at the same time issued a notice demanding payment of the facilities pursuant to s 57(2)(b) of the RPA.

The Judicial Review Proceedings

By the judicial review proceedings the following relief was sought:

a judgment to set aside the s 11 certificate;

a declaration that the certificate was issued ultra vires;

a declaration that Ms Charlton lacked the requisite authority to mediate in respect of the farm debt concerned pursuant to s 17(3A) of the Act and therefore “satisfactory mediation” was not held;

a declaration that elements required for satisfying s 11(1)(c)(i) of the Act were not satisfied when the “Authority” issued the s 11 certificate on 29 August 2014;

a declaration that RAA erred by failing to take into account relevant material and investigating an objection before issuing a s 11 certificate on 29 August 2014 which resulted in jurisdictional error;

request for leave to seek to set aside any subsequent s 11 certificate should one be issued in respect of the same matter as a result of the second “purported mediation” held 28 January 2016 (ordered by Schmidt J) on the grounds that satisfactory mediation could not have occurred under the circumstances which prevailed;

a declaration that the mediation ordered by Schmidt J that occurred on 28 January 2016 cannot serve to validate the s 11 certificate issued on 29 August 2014, given that the additional parties added to the second mediation were not a party to the first; and

a declaration that any mediation under the Act to be complete must involve a determination by the RAA as to whether “satisfactory mediation” has occurred or not and any objection investigated before any s 11 certificate can issue, which did not occur in this case.

(NAB contended the judicial review proceedings were out of time).

Case Management of the Proceedings

Earlier Case Management

The following is a summary of the directions made in the proceedings prior to the pre-trial hearing of 16 December 2016 was as follows:

On 26 March 2015, the possession and debt proceedings were listed for directions before Registrar Kenna, with no appearance by the defendants. The possession proceedings were stood over for directions before Schmidt J. The plaintiff was directed to notify the defendant of this listing (the matter was adjourned by consent on various occasions until 9 July 2015).

On 9 July 2015, consent orders were made by Schmidt J with respect to the filing of evidence in the debt and possession proceedings and the filing of a cross-claim.

On 28 July 2015, the matter returned before Schmidt J. The program, with respect to the cross-claim (as set on 9 July 2015) was vacated. A new timetable was fixed and consolidated with the former timetable set in relation to the debt and possession proceedings.

On 19 October 2015, Schmidt J made the following orders and directions:

Parties to take the necessary steps to arrange a mediation which satisfies the requirements of the Act and that mediation is to occur on or before 30 October 2015.

In the event that the mediation is unsuccessful, the parties have liberty to approach the Listings Manager for a hearing date with an estimate of 1 day.

On 29 January 2016, Registrar Bradford made orders that the matter be listed for further directions on 19 February 2016. This was following email correspondence received from NAB on 25 January 2016. A representative for NAB sent an email to Registrar Bradford advising the Court that “[w]hilst a mediation was not able to be arranged by [30 October 2015], [they] are currently scheduled to attend a mediation in Orange, NSW on Thursday 28 January 2016” and seeking that the directions hearing listed for 29 January 2016 be vacated and/or re-listed.

On 19 February 2016, following further email correspondence between the parties and Registrar Bradford, the directions date for 19 February 2016 was also vacated and the proceedings were listed for directions before Schmidt J on 3 March 2016.

On 3 March 2016, the following directions were made by her Honour concerning the filing of further evidence, an amended statement of claim, a reply and amended defence to the cross-claim, as well as any defence to the amended statement of claim (and orders in the event of any dispute).

On 5 May 2016, orders were made with respect to the debt and possession and judicial review proceedings:

Ms Charlton was directed that any amended defence be filed by 20 May 2016. The debt and possession proceedings were adjourned to 2 June 2016 for mention; and

The judicial review proceedings were adjourned to 2 June 2016 for mention.

On 2 June 2016, both the debt and possession and judicial review proceedings were listed for mention before Schmidt J. The following orders and directions were made:

The two sets of proceedings are to be heard together where evidence in one matter be evidence in the other.

Ms Charlton to file any outstanding evidence by 16 June 2016;

NAB to file its evidence by 30 June 2016;

NAB to file written outline of submission by 28 July 2016;

Parties have leave to approach the Listing Manger to obtain a hearing date with an estimate of 2 days;

Liberty to approach;

Ms Charlton’s application for pro bono referral denied.

RAA granted leave to withdraw its appearance, file a submitting appearance by 3 June 2016 and otherwise be excused from further attendance.

On 9 September 2016, the matter returned to the Common Law Registrar’s List. The proceedings were listed for hearing on 31 January 2017, with an estimate of 2 days.

On 15 November 2016, the matter further returned to the Common Law Registrar’s List for pre-trial directions. Directions were made, inter alia, for the filing of submissions by the plaintiff; the filing of a defence to the defendant’s cross-claim by the plaintiff and a defence in the judicial review proceedings by 13 December 2016; the filing of objections to evidence; the filing of Court Book by 16 December 2016; and the debt and possession and judicial review proceedings to be listed for pre-trial hearing before trial judge on 16 December 2016, with trial dates of 31 January and 1 February 2017 confirmed.

In consequence, Ms Charlton and Mr O’Brien filed 3 sets of submissions concerning the defence to the debt and possession proceedings, the cross-claim and the judicial review proceedings. The third of those submissions was filed on 16 December 2016. NAB had earlier filed a submission on 29 November 2016 concerning the debt and possession proceedings and subsequently filed a submission (dated 19 December 2016) concerning Ms Charlton and Mr O’Brien’s defence, cross-claim and the declarations sought in the judicial review proceedings. The Court Book was filed on 21 December 2016.

Pre-Trial Hearing

On 16 December 2016, the matter came before the Court as presently constituted for pre-trial hearing. On this occasion, the Court amended the case management orders of 15 November 2016 but retained the hearing date fixed in the proceedings.
During the course of the pre-trial hearing, the Court requested the parties identify the key issues for trial. Mr C Colquhoun, counsel for NAB, provided that assistance. He placed as the main contention for the defendant that there was an unsatisfactory mediation for the purposes of s 11(1)(c) of the Act because the mediation took place between Ms Charlton and NAB after she had resigned as trustee of the Trust, leaving Mr O’Brien (her father) as the sole trustee. (Counsel for NAB submitted that Ms Charlton held and owned the property in her capacity as trustee of the Trust). The contention was that Mr O’Brien had attended the mediation but did not participate as such. Ms Charlton participated in the mediation (as noted previously noted, the issue is now described as “the mediation issue”).
Counsel for NAB also referred to a contention that NAB took premature enforcement action in 2011 which infected the proceedings (described as “the 2011 enforcement issue” below). Counsel for NAB was at pains to indicate that a “huge number of issues” were raised by the three submissions filed by Ms Charlton.
Ms Charlton was given an opportunity to elaborate upon the summary of issues. She raised a number of issues, in that respect, which included the following:

The loans were advanced to her as trustee of the Trust and that “even prior to the actual draw down in 2005 the terms and conditions of the contract itself and then the loans immediately put [her] in default and the plaintiff was aware of legal information which would have affected the execution of those contracts in the first place”.

The commencement of enforcement actions by NAB in October 2011 was contrary to the provisions of s 8 of the Act. The subsequent enforcement actions were also contrary to the terms of the Act.

The issue of an authority to mediate was also raised.

Ms Charlton, in essence, agreed with counsel for NAB as to the number and complexity of the issues stating “there is quite a lengthy amount of issues in there”.
In the result, an arrangement was made for counsel for the NAB to prepare a document identifying the issues in dispute in the proceedings to which Ms Charlton may respond, if appropriate, at the commencement of the hearing on 31 January 2017. No application was made by Ms Charlton or Mr O’Brien at that stage for the separation of the hearing of the debt and possession and judicial review proceedings.
In the result, NAB filed a document entitled “List of issues in dispute” on 19 December 2016. That document consisted of nine identified issues which were the subject of submissions filed on the same day by NAB entitled “NAB’s submissions on defence and cross-claim in debt and in possession proceedings and claim in judicial review proceedings”. Ms Charlton and Mr O’Brien later filed a document entitled “List of issues” on 19 April 2017.
It is sufficient for present purposes to extract below the list of issues identified by NAB as follows:

1. Whether the certificate issued by the Rural Assistance Authority under s 11 of the Farm Debt Mediation Act 1994 (NSW) (FDM Act) should be set aside because there was not a "satisfactory mediation" for the purposes of the FDM Act, such that the proceedings are void by reason of s 6 of that Act (Section 11 Certificate Issue);

2. Whether action taken by National Australia Bank Ltd (NAB) in 2011 constituted "enforcement action" for the purposes of the FDM Act, such that the proceedings are void by reason of s 6 of that Act (2011 Action Issue);
3. Whether NAB made any representations to Ms Charlton and Mr O'Brien concerning the refinance of the loans to Ms Charlton which constituted misleading or deceptive or unconscionable conduct, such as to entitle Ms Charlton and Mr O'Brien to relief (Misrepresentation Issue);
4. Whether internal legal advice obtained by NAB concerning the trust deed for the Phoenix Trust means that Ms Charlton is not liable to repay the loans obtained by her, and is not liable to deliver up possession of the Property pursuant to the Mortgage (Right of Indemnity Issue);
5. Whether the default notice issued by NAB on 27 October 2014 failed to comply with s 57(2)(b) of the Real Property Act 1900 (NSW) because it did not comply with s 170(1) of the Conveyancing Act 1919 (NSW) (Default Notice Issue);
6. Whether the exclusion of s 38 of the Trustee Act 1925 (NSW) by the trust deed for the Phoenix Trust means that Ms Charlton was unable to acquire and mortgage the property (Section 38 Trustee Act Issue);
7. Whether the fact that Mr O'Brien was the joint trustee of the Phoenix Trust means that Ms Charlton is not liable to repay the loans obtained by her, and is not liable to deliver up possession of the property pursuant to the mortgage (Joint Trustee Issue);
8. Whether the conduct of a further mediation in January 2016 affects NAB's ability to enforce the loan agreements and mortgage (Further Mediation Issue);
9. Whether the provision of a draft deed of release by NAB's solicitors to Ms Charlton's then solicitors in the context of this litigation affects NAB's ability to enforce the loans agreements and mortgage (Deed of Release Issue).

As previously stated, I shall refer to the first issue as “the mediation issue” and the second issue as the “2011 enforcement issue”.

Settlement Discussions

On 16 January 2017, approximately two weeks prior to the trial hearing, the Court received email correspondence from the solicitors for NAB, with the consent of Ms Charlton and Mr O’Brien, seeking that the hearing dates be vacated in the following terms:

NAB, Ms Charlton and Mr O’Brien, as the active parties in the above proceedings, have recently been engaged in settlement discussions and there seems to be a possibility that the matter may resolve.
Accordingly, those parties, by consent, would like to apply to vacate the hearing dates in order to attempt to resolve the matter.

On 19 January 2017, signed consent orders were emailed to the Court seeking the following:

The hearing dates be vacated; and

The proceedings be listed for directions on 7 April 2017.

On 19 January 2017, the proposed orders were made, thereby vacating the hearing dates. The proceedings were made returnable before the Court for a status review on 26 April 2017.
On 24 March 2017, the Court received further communication from the plaintiff’s solicitor, with the consent of the defendants, explaining that:

[settlement] discussions are ongoing and the parties have agreed that the proceedings should be adjourned for a further period of five (5) weeks to allow those discussions to continue and to achieve a possible resolution. On 6 August 2015 an amended cross-claim was filed by the defendants.
At the directions hearing on Wednesday 26 April 2017, the parties intend to ask for orders for the matter to be adjourned to Wednesday 31 May 2017 to allow settlement negotiations to continue. However, if it is more convenient for the court to make those orders in chambers that would also be suitable to the parties.

On 24 April 2017, the Court dealt with the adjournment application administratively in Chambers. The proceedings were fixed for directions on 31 May 2017, to allow settlement negotiations to continue.
Immediately prior to the directions hearing, the plaintiff and the defendants confirmed that settlement had not been reached. On 30 May 2017, NAB provided draft orders proposing a referral to mediation. That same day, the defendants confirmed their opposition the draft orders and provided alternative draft orders seeking the proceedings progress to trial. At the directions hearing on 31 May 2017 the parties were granted leave to file written submissions with respect to the mediation orders sought by NAB.
Neither Ms Charlton nor Mr O’Brien sought a separation of the debt and possession and judicial review proceedings at this time.

Further Court Ordered Mediation

On 21 July 2017, in light of the submissions received by the parties, the following orders were made:

The parties be referred to mediation, such mediation to occur:

Before a private mediator to be agreed between the parties (the costs of the private mediator are to be borne entirely by the plaintiff);

In default of agreement as to a private mediator, before a Registrar of the Court (in which event, the parties have liberty to approach the Registry for the purposes of obtaining a mediation date);

Before 31 August 2017.

The matter be listed for hearing on Tuesday, 3 October 2017 on an estimate of 2 to 3 days (in the event the mediation failed).

The matter be listed for pre-trial directions hearing at 9.30 am on Thursday, 14 September 2017.

Liberty to restore the proceedings on 2 days’ notice.

It was intended reasons for the orders would be delivered shortly.
In response to the orders of the Court, the following occurred:

On 31 July 2017, Ms Charlton emailed Chambers to advise of an intention to appeal the orders handed down in Court on 21 June 2017;

On 6 August 2017, at the request of the parties, the matter was fixed for directions on 17 August 2017; and

On 17 August 2017, the matter was listed for directions, the Court then ordered that the matter be adjourned for further direction on 24 August 2017.

Further Pre-Trial Directions

On 24 August 2017, the matter returned before the Court for directions. NAB indicated that it consented to the vacation of the mediation order given the substantial delay that may be occasioned by any appeal. NAB also recognised that the mediation may not have been efficient or effective if Ms Charlton was not interested in participating in it. The parties agreed to the vacation of the hearing on 3 October 2017 and the orders for mediation.
NAB sought a listing early in 2018 because of the lack of availability of counsel after 3 October 2017. It proposed orders provisionally listing the proceedings for trial on 12-14 February 2018 upon a 2-3 day estimate, subject to a filing of a notice of motion by Ms Charlton to have the debt and possession and judicial review proceedings heard separately. No such motion had been filed at that time.
Ms Charlton opposed the matter being set down in February 2018. She sought a hearing date in early November 2017 but only with respect to the judicial review proceedings and, in that respect, her contentions as to “the validity of the s 11 certificate”. NAB sought that, if the separation of proceedings application was to be pursued, then an application needed to be made and the issue “fully argued” (NAB opposed the separation of the proceedings). The Court indicated difficulties with November hearing dates.
After further submissions by the parties, arrangements were made, by consent, by which the matter would be provisionally listed for hearing on 12-14 February 2018, subject to a filing of any motion as to the separation of the debt and possession and judicial review proceedings (the issue had not been previously raised in the proceedings and did not concern an application for summary dismissal).
NAB was directed to email short minutes of order reflecting the directions of the Court to be dealt with administratively in Chambers. The orders made by the Court on 24 August 2017 in consequence of that step being taken were as follows:

1. Order 1 of the orders made on 21 July 2017 in relation to the mediation of the proceeding be vacated.
2. Orders 2 and 3 of the orders made on 21 July 2017 in relation to the listing of the proceeding for hearing on 3 October 2017 and for a pre-trial directions hearing on 14 September 2017 be vacated.
3. The matter be provisionally listed for hearing on 12, 13 and 14 February 2018 on an estimate of 2 to 3 days, subject to filing a notice of motion to have proceedings no. 2015/27843 and proceedings no. 2016/122304 heard separately.
4. Any notice of motion, and affidavit in support, seeking to have proceedings no. 2015/27843 and proceedings no. 2016/122304 heard separately must be filed and served by 7 September 2017.
5. The matter be listed for a pre-trial directions hearing at 9.30am on 4 December 2017.
6. Liberty to restore the proceedings on 2 days’ notice.

On 6 September 2017, Ms Charlton emailed the notice of motion dated 5 September 2017 to the Court. The first prayer for relief extended beyond the scope of the leave afforded under order 4 in that Ms Charlton sought summary judgment of the debt and possession proceedings.
On 7 September 2017, NAB sought that the matter be listed for directions in respect of the notice of motion. The proceedings were listed for directions on 29 September 2017. Directions were made for the hearing of the notice of motion on that occasion but the Court emphasised that it had not vacated the hearing date fixed.
As earlier mentioned, the motion was listed for hearing on 24 November 2017.
Following the hearing of the motion, the matter was listed again for pre-trial directions to determine the course of the proceedings, subject to the determination of the notice of motion. In that hearing, as earlier mentioned, the provisional dates for hearing in February 2018 were vacated, by consent, in favour of hearing dates in early March 2018. The directions on that occasion were as follows:

The hearing dates provisionally listed on 12-14 February 2018 be vacated.

The matter be listed for hearing on 14 March 2018 on an estimate of three days.

By 9 February 2018, the plaintiff in proceeding 2015/27483 file and serve a chronology by reference to the documents contained in the currently filed Court book.

By 20 February 2018, the plaintiff in proceeding 2015/27483 provide the defendant with a draft index to a supplementary Court book.

By 22 February 2018, the defendant in proceeding 2015/27483 provide the plaintiff with any amendments to the draft index to the supplementary Court Book.

By 28 February 2018, the plaintiff in proceeding 2015/27483 file and serve the agreed supplementary Court book, together with an updated index to the Court book.

Liberty to restore the proceedings on 2 days’ notice.

The proceedings remain fixed for hearing commencing on 14 March 2018. It may be noted that, at the time of delivery of this judgment, the Court received a chronology provided by NAB. Having regard to a communication from Ms Charlton, the chronology is contentious.

Relevant Principles

It was common ground that the first prayer for relief in the notice of motion was an application for summary dismissal and that, given the claim deprived NAB of the opportunity to establish its case with the benefit of full hearing of the merits, it should only be granted in the clearest of cases: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 at 129-130; Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 (“Agar”) at [57]; Spencer v The Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 (“Spencer”) at [55].
NAB also placed reliance upon the judgment of Barrett JA (with whom Beazley, McColl and Macfarlan JJA and McClellan CJ at CL agreed) in Shaw v New South Wales (2012) 219 IR 87; [2012] NSWCA 102 (“Shaw”) at [32] which stated the relevant test was as follows:

The question is therefore whether the claims in question are so obviously untenable or groundless that there is “a high degree of certainty” that they will fail if allowed to go to trial; and whether this is one of the “clearest of cases” in which the court may accordingly intervene to prevent the claims being litigated.

(His Honour was concerned with whether the claim was “doomed” or “hopeless”).

It should be observed that although Shaw concerned an application to strike out certain paragraphs of an amended statement of claim under r 14.28 of the UCPR, the statements of principle are broadly applicable in the present context.
The following observations in Agar may also be noted (at [57]):

Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way. [Footnotes omitted.]

Reference should be made to the recent judgment of Leeming JA (with whom Macfarlan and Simpson JJA agreed) in Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19 (“Perera”) at [30] as follows:

I would reject the first aspect of Mr Perera’s complaint, based on the alleged failure expressly to identify the cautious approach to summary dismissal. There are of course a variety of formulations of the applicable test where a defendant applies for the summary intervention of the court to prevent a plaintiff’s case being determined in the usual way at trial. Barwick CJ collected some in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129: “so obviously untenable that it cannot possibly succeed”; “manifestly groundless”; “so manifestly faulty that it does not admit of argument”; “discloses a case which the Court is satisfied cannot succeed”; “under no possibility can there be a good cause of action” and “be manifest that to allow [the pleadings] to stand would involve useless expense”. In part that variety stems from whether the application is made in the court’s inherent jurisdiction or under the rules (see Dixon J’s analysis in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91–92), which may in turn affect the material available to the court. In part it turns on differences in the rules of different courts, and in particular on the relaxation of the test which has occurred in some courts: see Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 at [56]. But for present purposes, two matters are clear. One is that common to all the various formulations is the need for “exceptional caution”, as was explained in Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] and Spencer at [53]–[55]. The other is that the inquiry is as to the demonstrated certainty of the outcome of the litigation, as opposed to its prospects of success.

I note Leeming JA’s reference to Spencer incorporated the following passage (at [55]):

As Barwick CJ also pointed out in General Steel Industries, the test to be applied was expressed in many different ways, but in the end amounted to different ways of saying “that the case of the plaintiff is so clearly untenable that it cannot possibly succeed” (emphasis added). As that formulation shows, the test to be applied was one of demonstrated certainty of outcome. [Footnotes omitted.]

No reference was made by the parties to the statutory duty imposed by s 56(1) and (2) of the Civil Procedure Act 2005 (NSW). By reference to the judgment of Hammerschlag J in Simmons v Protective Commissioner of NSW also known as NSW Trustee and Guardian [2012] NSWSC 455 at [57]-[64] and the consideration of that judgment by Ward J in McDonald v Grech [2012] NSWSC 717 at [32]-[34], the learned authors in Ritchie’s Uniform Civil Procedure (NSW) suggested that the dismissal power conferred by r 13.4(1)(b) may not be confined to proceedings that are so demonstrative as to be certain to fail. Having regard to the conclusions reached in this matter, it is unnecessary to reach any view as to that opinion, although the proposition is prima facie attractive, provided it is recognised the relevant inquiry is that stated in Perera, namely, the demonstrated certainty of the outcome of the litigation.
The aforementioned principles are plainly applicable to the second limb of conditions of r 13.4(1)(b). However, Ms Charlton made various submissions based upon the other two limbs, namely, r 13.4(1)(a) and (c).
Those contentions seem to fall into two categories:

Those which represent the alter ego of the second limb, namely, the proceedings are frivolous or an abuse of process because they have no reasonable prospects of success.

The proceedings were claimed to be vexatious or an abuse of process because they, inter alia, were brought for an improper purpose such that NAB knows or should have known that it does not have a case; “interferes with and misleads the Court in respect of material facts and details from the operation of the law”; and “aims at causing harm, delay and deterrent to Ms Charlton and her family” (it may be noted that various contentious submissions were made by Ms Charlton to which I have not referred in this context).

The first of those contentions may be conveniently dealt with as a counterpart to issues raised by the second limb or condition of the rule, namely, r 13.4(1)(b), in accordance with the aforementioned principles. Reference may be made, in that respect, to the judgment of Hayne, Crennan, Kiefel and Bell JJ in Spencer wherein a defendant moved for summary dismissal on the grounds that the action was frivolous, vexatious or an abuse of process. In referring to Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] ALR 333, their Honours observed as follows (at [54]):

[54] In Dey, the defendants moved for summary judgment on the grounds that the action was frivolous, vexatious and an abuse of process. In a passage often later cited, Dixon J said that “[a] case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury”. What Dixon J meant by “very clear” was identified by his observation that “once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process” (emphasis added). And there would be a “real question” unless the defendant could “show that it was so certain that [the question] must be answered in the [defendant’s] favour that it would amount to an abuse of the process of the court to allow the action to go forward for determination according to the appointed modes of procedure” (emphasis added). The test identified by Dixon J in Dey can thus be seen to be a test requiring certain demonstration of the outcome of the litigation, not an assessment of the prospect of its success. [Footnotes omitted.]

The second category may, to some extent, raise similar issues as the first, but to the extent that it traverses the wider issues summarised in [58(2)] above, it would inevitably raise disputed facts which, given the case for NAB, would be seriously contested and potentially involve issues of credit. There is no evidence of the truth of such matters in the notice of motion proceedings – the propositions at this stage derive from submissions and statements on information and belief. Summary dismissal in this context will normally be inappropriate in these circumstances: Spellson v George (1992) 26 NSWLR 666 at 678 (per Young AJA, with whom Handley JA and Hope AJA agreed) and, in my view, is inappropriate in the present matter having regard to the contentious character of the disputed questions of fact and the likelihood they will attract a serious factual contest.

Consideration

The notice of motion seeks two forms of relief:

the summary dismissal of the debt and possession proceedings pursuant to r 13.4 of the UCPR; and

the separate determination of the judicial review proceedings.

Mr O’Brien made written submissions on the application but made no application (whether in relation to the cross-claim or otherwise).
The application to separate the debt and possession and judicial review proceedings (and to hear the judicial review proceedings first in time) in September 2017 (as foreshadowed in late August 2017) was the first occasion that such an application was made in the proceedings and in the context of consent orders made on 2 June 2016 that those proceedings would be heard together. At that time, the evidence in the proceedings was in and hearing dates fixed in early February 2018, albeit with a residual issue as to the separation of proceedings (as mentioned, hearing dates are currently fixed for mid-March 2018). Having regard to the Court’s calendar, the application was, therefore, made relatively close to the date fixed for the trial of the proceedings.
The summary dismissal application arises broadly in the same context except that no application of that kind was foreshadowed (even shortly) prior to the filing of the notice of motion. The orders made by the Court on 24 August 2017 were made for the purpose of permitting a notice of motion to be filed regarding the separation of the debt and possession and judicial review proceedings.
It is clear that all of the issues sought to be ventilated on the notice of motion were the subject of submissions advanced in support of the respective cases of the parties for the trial of the proceedings (which were filed prior to the notice of motion). It is also reasonably clear that the issues raised on the notice of motion represented a significant proportion of those which are due to be ventilated at the trial of the matter.

Application for Summary Dismissal

The argument given prominence within the first prayer for relief in the notice of motion was that the s 11 certificate should be set aside because NAB failed to give Ms Charlton notice that it had agreed to a mediation pursuant to s 9A(1) of the Act. When read with the later written submissions filed by Ms Charlton, her submissions, in that respect, extended to a contention that the RAA had “manipulated the time frames stipulated in the Act in favour of [NAB by] issuing a kit inside the 21 day timeframe for the creditor’s response to the farmer’s s 9 notice request for mediation”. This affected, it was contended, Ms Charlton’s rights under s 9B(1) having regard to the provisions of s 9B(2)(ii) and (iii). The issuing of the mediation kit on 20 February 2014 was, it was submitted, maladministration and a demonstration that the RAA was not impartial.
However, during the course of oral submissions, Ms Charlton indicated that this contention was not, in fact, her primary argument and that there were “more crucial” matters arising in her contentions.
In any event, on the material and submissions presently before the Court, NAB does have an arguable case in this respect. Putting aside the issue raised by NAB that no formal requirements for notice existed under s 9A(1) and that constructive notice was given to Ms Charlton (which contentions would attract factual issues), and the issue of construction raised by NAB as to whether provisions of s 9A(1) were intended to deal with a request for mediation under section s 9A(1) of the Act as opposed to s 9(1A), a failure to give notice under s 9A(1) only has legal consequences if the RAA is satisfied as to the existence of one of the conditions in s 9B(2)(d)(i) and (ii). NAB has an arguable case that the RAA may not be satisfied as to either of those conditions having regard to NAB’s response to Ms Charlton’s request for mediation under s 9(1) of the Act on 14 February 2014.
NAB contended that the scope for the Court’s consideration of the application for summary dismissal ended upon the adverse resolution of that contention by Ms Charlton because other contentions as to the validity of the s 11 certificate raised in argument by Ms Charlton (in written and oral submissions) fell outside the scope of prayers 1 for relief in of the notice of motion. I do not accept that submission.
Whilst the first prayer for relief in the notice of motion may give the impression of such a confinement, when read in its totality and in the light of the written and oral submissions advanced in support of the application for summary dismissal, it is tolerably clear that Ms Charlton sought summary termination upon the basis of two other contentions by which Ms Charlton sought to challenge the validity of the s 11 certificate: the mediation and the 2011 enforcement issues as reflected in the list of issues identified by NAB (at [29] above). In the opening sentence of the first prayer for relief, Ms Charlton refers to the absence of a “farm debt mediation” exclusive of an “enforcement action”, and later, that the proceedings had been instituted on “an ultra vires s 11 certificate serving a wrongful purpose” and a bar to the enforcement actions should not have been lifted until a satisfactory mediation “had occurred”.
It might be noted that in her written submissions, Ms Charlton referred to breaches of “sections 3, 8, 9 and 10” of the Act and also contended, in this respect, that there was a failure to conduct a satisfactory mediation for the purposes of s 11(1)(c)(i) of the Act. Ultimately, this approach was encapsulated in issue 11 of the 31 issues identified by Ms Charlton and Mr O’Brien in their list of issues filed 19 April 2017. Issue 11 was as follows: “whether [NAB] is entitled to proceed to Judgement [sic] and possession without a valid Section 11 Certificate under [the Act]”.
This is not to suggest that issues other than those discussed above in [69] and [71] were not raised in the submissions advanced by Ms Charlton and, in one respect, Mr O’Brien. For example, the “right of indemnity issue” was raised together with contentions as to the impartiality of the RAA, contraventions of s 10 of the Act, collusion between RAA and NAB, a denial of procedural fairness by the RAA and an absence of good faith in the mediation. I do not consider these issues are available in relation to the summary dismissal application because they are not raised by the notice of motion and each of them attract serious issues of fact (there is also little evidence on these matters on the notice of motion).
Having given Ms Charlton some latitude as a self-represented litigant in the consideration of the first prayer for relief, there remains, nonetheless, by its formulation, a significant difficulty with Ms Charlton’s application for summary dismissal based upon the nature of the relief sought in that prayer. Whilst the aforementioned mediation issue and the 2011 enforcement issue (and the related or derivative issue that there was no ‘satisfactory mediation for the purposes of s 11(1)(c)(i) of the Act) appear to have been raised in the pleading by Ms Charlton in the amended defence, those pleadings have as their sole purpose the laying of a foundation for Ms Charlton’s case that the s 11 certificate was invalid (see, for example, para 31 of the amended defence and note that reliance was also placed upon breaches of ss 8 and 10 to establish the invalidity of the s 11 certificate).
In the absence of the challenge that monies sought to be recovered by the debt and possession proceedings were borrowed (save for contentions as to the amount owed) and that there was a default, at least in part, upon the loans (noting that Ms Charlton raised an issue about the opportunity to pay and the timing of the recovery action), the primary argument in Ms Charlton’s defence of the debt and possession proceedings underpinning the application for summary dismissal was that these proceedings were void pursuant to s 6 of the Act or otherwise invalid because the s 11 certificate was “bad” or “ultra vires” to the Act and should be set aside. However on that basis, unless and until the s 11 certificate is set aside in the judicial review proceedings, there can be no basis to summarily dismiss NAB’s claim in the debt and possession proceedings: see ss 8(3) and 10(1) of the Act.
The summary dismissal application is, of course, directed to the debt and possession proceedings and does not and cannot agitate, by its nature and terms, the issues raised in the judicial review proceedings (in which the question of validity of the s 11 certificate ultimately arises). On the issues raised upon the application for summary dismissal that conclusion significantly undermines (or perhaps disposes of) the application.
Nonetheless, attention should be directed to the two particular issues which have been found to arise, in a broad sense, out of the first prayer of relief (and the strenuously advanced contentions by Ms Charlton in support of the same), namely, the mediation issue and the 2011 enforcement issue. I will deal with each of those matters in turn.
By way of expansion, the mediation issue may be described in the following description of Ms Charlton’s case. Ms Charlton resigned as trustee of the Trust on 20 August 2011 leaving Mr O’Brien as the sole trustee of the Trust. As trustee of the Trust, Mr O’Brien was required to participate in the mediation. He did not. Ms Charlton did “participate” but she did not have authority to represent Mr O’Brien under s 17(3A) of the Act. The Trust was not a legal entity and could not be a party to a mediation for the purposes of s 17(3A) of the Act. This was confirmed, it was contended, by the “fresh evidence” referred to by Ms Charlton where it was said Mr O’Keefe initially indicated there was an authority to mediate or settle but later expressed an uncertainty as to the authority.
I do not consider that issue may sustain the summary dismissal application because it is either unsuitable (or inappropriate) for that purpose as it is a seriously contestable issue (where the evidence as to the same is not before the Court in the notice of motion proceedings) or there is not a clear case for the grant of summary judgment, in the circumstances, as the case for NAB is “triable” and not untenable – it is, in fact, arguable. I shall elaborate.
NAB contested that Ms Charlton validly resigned as trustee of the Trust. This raises questions of fact in the context of the operation of cl 15 of the Trust Deed for the Trust and a legal issue arising under s 44 of the Trustee Act 1958 (Vic). Even if that issue is resolved in favour of Ms Charlton, there remains from NAB’s stand point, arguable points of law.
First, insofar as it was contended that the RAA could not be satisfied that a satisfactory mediation had taken place on the basis of the facts underpinning Ms Charlton’s contentions as to this issue, NAB has an arguable case that, upon the proper construction of the Act, a mediation may or should occur between a “farmer” and the “creditor” (see ss 11(1A), 11AA(1) and 17(4) of the Act). On Ms Charlton’s case she was and is a “farmer” for the purposes of that Act who owed the farm debt as defined in s 4(1) of the Act (in the capacity of Trustee before resignation). It is a matter for evidence and it is arguable that no farm debt was owed by Mr O’Brien and that he was not a “farmer” for the purposes of the Act. It is also not beyond argument that there is nothing in the definition of a “satisfactory mediation” that would require the mediation to involve every person potentially affected by the outcome of the mediation including a replacement trustee.
Secondly, whether Ms Charlton lacked authority under s 17(3A) of the Act is a matter for evidence.
Thirdly, and in any event, the case advanced for NAB that the mediation may not be impugned as a matter of law having regard to the provisions of s 17(6) of the Act and that, even if a satisfactory mediation is one that required the participation of Mr O’Brien, s 11(1)(c)(iii) provided that the RAA can issue a s 11 certificate if 3 months had elapsed after the notice was given by a creditor under s 8 and the creditor had, throughout that period, attempted to mediate in good faith (another issue attracting the need for evidence). This is arguable.
I put aside consideration as to whether, on the case advanced by NAB, evidence may be admitted as to the mediation beyond the summary of mediation provided by the mediator on 18 July 2014 having regard to the provisions of s 15(1) of the Act. I note for completeness, but do not deal with, the contentions that were advanced by Ms Charlton that the Trust was not a legal entity. Again, it is an arguable proposition.
Having regard to the aforementioned principles regarding summary dismissal, I do not consider that ‘the mediation issue’ and the contentions in support thereof represent a proper basis for summary dismissal. Rather I have found that issue to be affected by relevant and significant unresolved factual issues and that, in terms of propositions of law, the case for NAB is arguable. There is not a demonstrated certainty of outcome of the litigation vis-à-vis the debt and possession proceedings coming out of the contentions developed in support of that issue.
The remaining question concerns the 2011 enforcement issue.
In substance, the contention by Ms Charlton as to the 2011 enforcement issue was that NAB took enforcement actions in 2011 (and 2012) in contravention of an entitlement of a farmer to a farm debt to have a mediation under the Act prior to such actions. It was submitted that the mediation occurred after the “cancellation of facilities as well as other actions to enforce the mortgage such as, the issuance of a s 57(2)(b) notice under [the RPA]”. The issuance of a s 57(2)(b) notice in November 2011 constituted a statutory enforcement notice. In the result, NAB failed to comply with the provisions of s 8(1) of the Act because NAB’s actions in 2011 (and 2012) constituted an enforcement action when no s 11 certificate was in force. A related submission was that the RAA had committed a “jurisdictional error of law” in issuing the s 11 certificate.
Further, the later process adopted by NAB, whereby notices were issued pursuant to ss 8 and 9 of the Act and a mediation undertaken, could not cure the earlier breach of s 8 by the 2011 enforcement action, and an unsatisfactory mediation. Hence, the s 11 certificate issued was invalid and the current proceedings based on that certificate were void.
It was contended, the re-issuing of a facility demand on 9 September 2014 and a corresponding s 57(2)(b) notice or the exercising of a right on 17 October 2014, with respect of the mortgage, remained contrary to the Act because they represented a continuation of the enforcement action engaged in 2011 (and were based on an invalid s 11 certificate). It was further contended that the issuing of a s 57(2)(b) notice in 2011 could not be withdrawn and it must be relevant to the mediation because the Act refers to the wording “giving of any statutory enforcement notice” (see s 4(1)).
The notices relied upon by NAB on 17 and 27 October 2014 were “simply an attempt to validate already invalid actions” and NAB “continued to use the unlawful basis on which they obtained the s 11 certificate knowing it was ultra vires”. Reliance was placed upon Roxo v Normandie Farm (Dairy) Pty Ltd [2012] NSWSC 765 (“Roxo”) and Waller v Hargraves Secured Investments Ltd (2012) 245 CLR 311; [2012] HCA 4 (“Waller”).
NAB met these contentions upon the following bases:

It was accepted that a s 57(2)(b) notice is enforcement action for the purposes of s 4(1) of the Act. NAB pleaded its case for debt and possession upon a default notice under s 57(2)(b) issued on 27 October 2014. It did not rely upon the default notices issued in 2011 or 2012 and had “withdrawn” any reliance upon a default notice issued under s 57(2)(b) prior to the issuing of the s 8 notice and/or the mediation resulting therefrom on 17 July 2014. It was contended the default notice of 27 October 2014 was issued after the requisite notices under the Act and subsequent to the mediation and the s 11 certificate being issued by the RAA.

The cancellation of facilities prior to the date of the mediation, namely, the first cancellation notice did not constitute an enforcement action for the purposes of the Act. Rather this was an action taken under the First Business Letter of Offer and did not depend upon the terms of the mortgage. In any event, NAB relied upon the second cancellation notice which was issued after the mediation and the issuance of the s 11 certificate.

There was a factual context in which the first s 57(2)(b) notice was issued, namely, the involvement of the Financial Ombudsman which resulted in NAB treating Ms Charlton as a farmer and issuing the s 8 notice in early 2014.

Whilst Ms Charlton’s complaint is that she underwent a mediation in the context of an enforcement action, there is nothing in the Act which prohibits NAB from taking the course it did. There was no prohibition under the Act in issuing a s 8 notice which concerned the same debt as had been relied upon with respect to the earlier default notice in 2011 (or 2012). Reliance, in that respect, was placed upon the provisions of ss 10(2) and 22 of the Act.

There is, therefore, a real factual and legal issue as to the 2011 enforcement issue.
I do not consider, based upon the pleadings by NAB in the proceedings and the answer to the contentions advanced by Ms Charlton by NAB, that these proceedings may be described as representing a “clear case” for summary dismissal or that NAB’s case was untenable or groundless. Rather I consider NAB’s case to be arguable.
In my view, the pleadings within the amended statement of claim are consistent with NAB’s contention that:

NAB pleaded its claim for debt and possession upon the default notice of 27 October 2014 and the mortgage security the farm debts referred to in that notice.

No reliance was placed, in that respect, upon the default notices issued 16 November 2011 and 24 January 2012.

The first of those contentions may be sustained upon the basis of para 17A of the amended statement of claim when read in the light of the immediately preceding paras 14, 15 and 16 (and the heading accompanying those paragraphs). Further, no pleadings were made with respect to the 2011 and 2012 default notices. The pleaded default notice was issued after a farm mediation took place on 17 July 2014 and the s 11 certificate was issued by the RAA on 29 August 2014.
NAB did, however, plead reliance upon the first cancelation notice although, in the alternative, it also relied upon the second cancellation notice of 17 October 2014.
When seen in the light of NAB’s pleadings, the amended defence and Ms Charlton’s contentions, the 2011 enforcement issue may thus be further distilled as follows:

Notwithstanding the reliance placed by NAB upon a default notice issued under s 57(2)(b) after and in reliance upon the s 11 certificate, are the proceedings void or available to set aside or dismissed in consequence of two default notices issued prior to the s 8 notice of 22 January 2014 (and the consequent mediation and s 11 certificate) in relation to (as contended by Ms Charlton) the same or a similar farm debt to that referred to in the s 8 notice? The subsidiary question is whether the 2011 (or 2012) default notices should result in the s 11 certificate being declared invalid or otherwise being productive of such an outcome.

Does the pleading in the amended statement of claim based upon the first cancellation notice constitute “enforcement action” for the purposes of the Act?

The first issue raises questions of fact and law.
As to the questions of fact, many of the factual foundations necessary to resolve the issue have been laid in the proceeding concerning the notice of motion such as the respective default notices. NAB raises, however, two factual issues, which have received little attention in the evidence or by way of a joinder of submissions.

NAB submitted that it “had withdrawn any reliance upon any default notices prior to [the mediation]”. NAB also submitted it had not treated the debts represented by the facilities it had issued as farm debt for the purposes of the Act until the intervention of the Financial Ombudsman. After that intervention, NAB had treated the debt as a farm debt under the Act and issued a s 8 notice (it is not clear how NAB placed reliance upon this issue except perhaps as to the exercise of any discretion in the judicial review proceedings).
The counterpoint, both factually and as to the legal questions raised with respect to this issue was Ms Charlton’s contention that NAB had not withdrawn the “cancellation of its facilities” issued prior to the s 8 notice.
None of these issues were the subject of evidence in the matter presently before the Court.
Upon the submissions of Ms Charlton, there are a number of variants as to why the proceedings are bad in law or void by virtue of the 2011 and 2012 default notices (being enforcement actions under the Act) predating the issuing of a s 8 notice, and, after the s 9 notice issued by Mr Charlton, the subsequent mediation and s 11 certificate issued by the RAA. Reliance was placed upon the provisions of ss 3, 6, 8(1) and 10(1) of the Act, albeit without precise crystallisation of the issues arising under those provisions. At the centre of the argument was the proposition that the enforcement actions in 2011 and 2012 were barred by ss 8(1) and 10(1) and rendered any of the enforcement actions as to the farm debt void, notwithstanding subsequent steps purportedly taken in compliance with the Act (such as the issuing of a s 8 notice, a mediation or ultimately the issuance of s 11 certificate).
Putting aside the issues of fact raised by NAB, that brief recitation of Ms Charlton’s case demonstrates some of the complexities of the issues raised as well as, when seen in the light of NAB’s contentions in reply, why there is no clear case for summary dismissal. This may be demonstrated by the recitation of the following issues or questions arising out of the pleadings and the particular submissions by NAB as to this issue.
The first question which arises is just how the present proceedings may be said to be void under s 6 of the Act by reason of default notices which are not relied upon in those proceedings. This again brings attention to the focus of the notice of motion upon the debt and possession proceedings.
The second question, which turns upon the aforementioned question of fact, is whether the s 11 certificate may be declared invalid in consequence of the prior default notices (of 2011 and 2012) if those notices were withdrawn prior to the mediation (and perhaps the s 8 notice). The related question is whether, in any event, s 8(1), and consequently s 6, acted upon anything other than an act by a creditor in pursuit of a farm debt vis-à-vis a particular act of enforcement, namely, the issuing of a particular default notice or, alternatively, as Ms Charlton put it, the Act should be construed as preventing or making unsatisfactory any s 8 notice or consequent mediation where there has been prior enforcement, irrespective of whether the creditor eschews reliance in the debt and possession proceedings upon such an act of enforcement (this contention involved a purposive construction based upon the objects of the Act (s 3) and the nature and purpose of mediation under the Act). A related consideration was Ms Charlton’s contention that NAB did not withdraw the cancellation of the facilities.
The third question concerns Ms Charlton’s reliance upon the debts in the s 8 notice being the same source as those referred to in the 2011 default notice (although NAB contended the amounts were significantly different). NAB contended that the submission was defeated by the operation of ss 10(2) and 22 of the Act. Again, that contention is arguable.
Ms Charlton relied upon the judgment of Adamson J in Roxo. Reference was particularly made to [31], [34] and [36] of that judgment. NAB did not address those contentions as such. Nonetheless, questions arise as to the application of Roxo in the present context because of the differing facts and circumstances applying in Roxo and the consequential application of principle.
In Roxo, the defendant had granted a mortgage to the plaintiff. Some 6 years later, the plaintiff served a s 57(2)(b) notice on the defendant. The defendant thereafter served a notice pursuant to s 9(1A) of the Act.
A mediation was undertaken but, as the RAA later found, not one that was conducted in accordance with the Act. After that mediation, the plaintiff lodged an application for a s 11 certificate and commenced proceedings filed by statement of claim seeking, inter alia, possession. Thereafter, the RAA advised the parties that it would not grant a s 11 certificate because of the deficiency in the mediation. Nonetheless, the plaintiff, after that advice, obtained a default judgment and shortly thereafter a writ of possession was issued.
The defendant sought a stay of the possession proceedings. The plaintiff then sought an adjournment of that application on two bases, one of which was that another s 11 certificate was sought and, if granted, any defects in the proceedings occasioned by non-compliance with the Act would be cured because the s 11 certificate operated retrospectively (the judgment referred to the defendant making the submission whereas it would be appropriate to be a reference to the plaintiff).
It is true that in [31] of the judgment Adamson J is of the opinion that, having made findings that the defendant was a “farmer” for the purposes of the Act, the Act applied to the enforcement action by the plaintiff in the proceeding and that the plaintiff was prohibited from giving a s 57(2)(b) notice to the defendant unless and until it had obtained a s 11 certificate. However, in contrast to the present proceedings, as noted from the prior recitation of the circumstances of the matter, no s 11 certificate had been issued by the RAA whatsoever. The default notice which was prohibited was a default notice given prior to the application for a s 11 certificate (or any determination as to the same).
Thus, at [32], Adamson J found that she did not accept that a s 11 certificate (if issued) could retrospectively validate proceedings that were otherwise a nullity under s 6, namely, the default notice issued earlier in time. Thus, it was said that the clear words would be required in the Act to resuscitate a s 57(2)(b) notice which was void because it was issued in breach of the Act. The counterpart of that notice in the present case are the 2011 and 2012 notices upon which NAB places no reliance. The discussion by Adamson J at [34], as to the operation of s 11(4), does not seem to take the discussion any further.
As noted, Ms Charlton also placed reliance upon the judgment of Cole JA in Cherryop Pty Ltd v Commonwealth Bank of Australia [1996] NSWSC 194 at [6] (which was also referred to in Roxo at [36]). The observations of Cole JA, in that extract, begged the very questions which remain to be answered in Ms Charlton’s case but, again, do not establish a basis for summary dismissal.
I will discuss Waller and its relationship to the fact issue under the discussion of the second issue.
NAB did rely upon the first cancellation notice but contended it did not concern an enforcement action for the purposes of the Act.
Here NAB has an arguable case that the issuance of the first cancellation notice did not constitute an action to enforce a farm mortgage for the purposes of the definition of an “enforcement action” under the Act, given that, upon NAB’s contention, the cancellation concerned the failure to maintain an overdraft within its limits, and was predicated upon the First Business Letter of Offer and not the terms of the mortgage. Further, NAB submitted, in the alternative, that it would rely on the Second Cancellation Notice. An amendment to the proceeding may be available in that respect.
Ms Charlton relied on the observations of Hayne J (at [25]) and Heydon J (at [29], [37], [66] and [70]) in Waller in support of her application. The submission in this respect seemed to be, first, that the creditor cannot accumulate an increasing farm debt until a s 11 certificate is obtained. In other words, the farm debt remains “at the status quo” level at the point it was issued until the s 11 certificate was issued. The second proposition seems to be that the RAA was required to satisfy itself that an earlier enforcement action, namely, the 2011 and 2012 enforcement actions, had not occurred before issuing a s 11 certificate.
Some preliminary observations may be made about the judgment of Heydon J in Waller by reliance upon the following extracts from the judgment in Gooley v NSW Rural Assistance Authority (No 2) [2017] NSWSC 1336 at [58]-[60]:

[58] … Those observations are as follows:
(1) The fundamental question which arose in Waller was how far the scheme of the Act worked if a certificate was issued with respect to one farm debt but the creditor later wished to take enforcement action in relation to another ([at [29]).
(2) Ms Waller purchased a farm which was initially financed with a loan or mortgage. There was then a refinancing which resulted in the original mortgage being discharged. The resultant loan was described in the proceedings as the First Loan Agreement which was secured by a mortgage in favour of the respondents in the proceedings which was described as a Registered First Mortgage. There was no dispute that the Registered First Mortgage read with the First Loan Agreement was a farm mortgage for the purposes of s 4(1) of the Act.
(3) Upon the failure to make the necessary payments, the respondent took enforcement action. In the result, a mediation took place as contemplated under the Act which resulted in Ms Waller and the respondent entering into a deed of settlement by which the respondent agreed to increase the advance. The further loan agreement was described as a Second Loan Agreement (at [35]). As a result of further difficulties, the parties executed a further loan agreement known as the Third Loan Agreement (at [36]).
(4) As a result of the default under the Third Loan Agreement the respondent brought proceedings in this Court for possession of the farm and judgment for outstanding borrowings.
(5) Ms Waller claimed in defence, in those proceedings, that the provisions of the Act had not been complied with because the certificate issued under the mediation related only to the farm debt created by the First Loan Agreement while the proceedings constituted an enforcement action in relation to the Third Loan Agreement with respect to which no mediation had taken place (at [40]).
(6) The respondent who had sought to file a notice of contention which was rejected by the Court. By that contention the respondent had wished to argue that the judgment below had been wrong to treat the Second Loan Agreement as discharging the obligations of the First Loan Agreement and the Third Loan Agreement as discharging the obligations under the second (at [43]).
(7) Mediation under Pt 2 of the Act can only take place in relation to a “farm debt”. The operative provisions of that Part do not apply to mortgages but creditors, namely, a person to whom the farm debt is for a time being owed by a farmer. The definition of a farm debt under s 5(1) of the Act refers to creditors secured under a farm mortgage. A farm mortgage is defined as including any interest in or power over any farm property including obligations of the farmer whether as a debtor or guarantor (at [48]).
(8) There is, therefore, a close connection between a farm mortgage in relation to which a creditor desires to takes an enforcement action and any farm debt which it secures.
(9) The certificate under s 11 concerns a farm mortgage under which money is owed by a farmer to a creditor, that is, a particular farm debt in respect which a creditor intends to take enforcement action against a farmer (at [51]). A s 11 certificate is “in respect of the farm mortgage concerned” but only because “farm mortgage concerned secures a particular farm debt” (at [51]). There is, therefore, a distinction between the interest in or powers over farm land secured by the farm debt in the mediation and the interests in powers over farm land which the respondent wished to enforce in relation to proceedings.
(10) Each of the First, Second and Third Loan Agreements when read with the Registered First Mortgage successively created a distinct interest in and powers over the farm property by Ms Waller securing her obligations as a debtor. Each previous debt had been discharged by the successive loan agreement (at [56]).
(11) The respondent argued that, even if the respondent’s claim to possession was barred, he had a right to claim a money judgment. This was rejected (at [64]-[68] of the judgment).
(12) The enforcement action as defined in s 4(1) of the Act, means not only taking possession of the property but any other action to enforce the mortgage (at [66]). The amended statement of claim brought by the respondent pleaded that it was a term of the First Registered Mortgage that the interest be paid monthly in accordance with, inter alia, the Third Loan Agreement.
(13) The same claim pleaded that Ms Waller was obliged under the Registered First Mortgage to pay the principal sum with interest owing. The respondent contended that the claim for a debt was not an enforcement action because it does not involve an enforcement of security over farm property. However, Hayden J found that the better view was that the definition of the enforcement action was wide enough to extend beyond enforcement of the security by taking possession to include reliance on any of the rights in the farm mortgage. His Honour opined that “since the claim to the order for the possession was solely based on the breach of the money obligations arising under the Registered First Mortgage and the Third Loan Agreement, it was inextricably interlinked with the claim for a money judgment” (at [66]).
(14) His Honour held that it followed that an action to obtain a money judgment after the commencement of the Act is an “enforcement action to ensure the mortgage”. His Honour continued the “structure of the Amended Statement of Claim, and the manner in which the proceedings were conducted, justified the characterisation of the respondent’s conduct as action to enforce a mortgage, and hence as enforcement action” (at [66]).

[59] It may be gleaned from these extracts that the Act only has reach to creditors secured under a farm mortgage, namely, a person to whom a farm debt is for the time being owed by a farmer. A certificate under s 11 only has operation in relation to the particular farm debt, which the creditor intends to take enforcement action against the farmer.
[60] The actual claim pursued by the respondent in Waller was said to constitute an “enforcement action” for the purposes of s 4(1) of the Act because the claim for possession was solely based upon a breach of the money obligations arising under the Registered First Mortgage and the Third Loan Agreement. That is, the Amended Statement of Claim pleaded that it was a term of the Registered First Mortgage the interest was to be paid under the loan agreement. The “inextricable” link referred to by his Honour was between the claim for the order for possession based on the Registered First Mortgage and the claim for the money order.

A number of further observations may be made from that summary in terms of the summary dismissal application:

The question which arose in the appeal in Waller, as described by Heydon J, was how far the scheme under the Act worked if a certificate was issued with respect to one farm debt but the creditor later wished to take enforcement action in relation to another (at [29]).

In substance, it was found, a certificate issued after a mediation in relation to the first loan agreement could not sustain an enforcement action in relation to the later third loan agreement. A contention that the successive loans represented a continuance of the loan (earlier loans rather than a discharge) was not allowed.

A s 11 certificate concerns a particular farm debt with respect to which the creditor intends to take an enforcement action against the farm. In Waller, the successive loan agreements created a distinct interest and power over the farm property such that each successive debt discharged the earlier loan agreement. The contentions advanced in the matter presently before the Court raised questions as to the operation of the Act upon what would appear to be a different factual substratum in which the s 11 certificate was issued in relation to a farm debt which is sought to be enforced by default notices issued both prior to and after the s 11 certificate and in circumstances where NAB only relied upon the default notices issued after the issuing of the certificate.

The judgment in Waller may well offer instruction as to the resolution of the 2011 enforcement issue but the authority would, subject to further argument, need to be applied in light of the different substratum of facts.

In any event, the judgment in Waller does not result in the conclusion that there is a clear case for the summary dismissal of the debt and possession proceedings.

As to the issue of the first cancellation notice, and having regard to Waller at [66] (per Heydon J), I consider the position of NAB as again arguable given the observations in that paragraph of the judgment that the definition of an enforcement action is “wide enough to extend beyond enforcement of the security by taking possession and include reliance on any of the rights in the farm mortgage”. NAB argued that, as a matter of fact and law, the first cancellation notice was not predicated upon the terms of the mortgage.

I do not consider the contentions advanced in support of the 2011 enforcement issue may be said to be productive of a certain outcome, vis-à-vis summary dismissal, in the debt and possession proceeding or that NAB’s case in this respect is untenable – it is arguable.

Conclusion of Summary Dismissal

In all the circumstances, I do not consider that Ms Charlton has established that the debt and possession proceedings brought by NAB should be summarily dismissed.

Application for Separate Determinations

There are a number of substantial reasons why the application by Ms Charlton for the judicial review proceedings to be heard separately and in advance of the debt and possession proceedings should be refused.
First, NAB is correct to submit that the debt and possession proceedings and judicial review proceedings are both listed for hearing in early March 2018 and that, even at the end of November 2017 (when the notice of motion was heard), it was far too late to seek that one proceeding be heard and determined before the other. All of the matters agitated by Ms Charlton in the context of the notice of motion will be dealt with in the trial with the benefit of evidence and written and oral submissions. As it has been observed in this judgment, the issues raised in support of summary dismissal attract, in various parts, factual controversies.
Secondly, on 2 June 2016 Schmidt J ordered that the debt and possession proceedings and the judicial review proceedings be heard together where evidence in one matter should be evidence in the other. In order to set aside this order, it is incumbent upon Ms Charlton to establish that there has been a material change of circumstances: Neumann Contractors Pty Ltd v Wyong Shire Council [2011] NSWSC 481 at [26].
I do not consider that Ms Charlton has demonstrated such a change in circumstances. She principally relied, in that respect, upon the “fresh evidence” led through her affidavit of 16 October 2017. The submission that Ms Charlton wished to advance arising from that evidence was, in substance, that the RAA had acted in bad faith and had “manipulated” the chronology of events which led to the issuance of the s 11 certificate in non-compliance with the Act and had done so in conjunction with the NAB. Leaving aside the significant factual controversy that would come with such submissions (and the burden falling upon Ms Charlton to make them out), the contentions do not materially impact upon those contentions advanced on the notice of motion, namely, the mediation issue, the 2011 enforcement issue and the failure to give notice of under ss 9A(1) and 9B.

Thirdly, and no doubt reflected in the orders made by Schmidt J, it is evident that the debt and possession proceedings and judicial review proceedings are closely linked in that Ms Charlton’s defence of the debt and possession proceedings is largely that the s 11 certificate ought to be set aside. As a matter of time, cost and efficiency the proceedings should be heard together, particularly as the same witnesses are likely to be called in both proceedings. (A related issue is that the Court will be required to make separate factual findings in the judicial review proceedings thus most likely requiring a different judge to decide the debt and possession proceedings: Langley v AMP Capital Investors Ltd [2007] NSWSC 937 at [32]).
Fourthly, it is unlikely there would be saving of time or cost if the judicial review proceedings were heard and determined before the debt and possession proceedings. If Ms Charlton’s application to set aside the s 11 certificate via the judicial review proceedings was successful such as to render NAB’s action in the debt and possession proceedings void, her cross-claim in those proceedings would remain to be determined. If, on the other hand, Ms Charlton failed in the judicial review proceedings, litigation between the parties would be prolonged, because she could then seek to agitate her arguments upon the hearing of the debt and possession proceedings. Such an approach sits ill with the requirements of the Civil Procedure Act (to make procedural orders in accordance with the dictates of justice, having regard to ss 56 and 57 of that Act.

Conclusion

In all the circumstances, I consider that Ms Charlton has failed to establish that the debt and possession proceedings should be summarily dismissed or that the debt and possession and judicial review proceedings should be separated with the judicial review proceedings being heard first in time.

Orders

The Court makes the following orders:

The notice of motion brought by Ms Charlton, filed 27 September 2017, is dismissed; and

Costs are reserved.

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Decision last updated: 21 February 2018

Medium Neutral Citation:	National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority [2018] NSWSC 157
Hearing dates:	24 November 2017
Date of orders:	21 February 2018
Decision date:	21 February 2018
Jurisdiction:	Common Law
Before:	Walton J
Decision:	The Court makes the following orders: (1) The notice of motion brought by Ms Charlton, filed 27 September 2017, is dismissed; and (2) Costs are reserved.
Catchwords:	PRACTICE AND PROCEDURE – farm debt – debt and possession – judicial review – course of proceedings – summary dismissal application – application to separate proceedings – pleadings – relevant principles – notice of agreement to mediate after s 9 notice – validity of s 11 certificate – whether satisfactory mediation – participation in mediation – default notices prior to s 8 notice and mediation – whether clear case – whether untenable or arguable – whether certainty of outcome – summary dismissal refused – separation of proceedings refused – notice of motion dismissed.
Legislation Cited:	Civil Procedure Act 2005 (NSW) Farm Debt Mediation Act 1994 (NSW) Real Property Act 1900 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Cherryop Pty Ltd v Commonwealth Bank of Australia [1996] NSWSC 194 Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] ALR 333 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 Gooley v NSW Rural Assistance Authority (No 2) [2017] NSWSC 1336 Langley v AMP Capital Investors Ltd [2007] NSWSC 937 McDonald v Grech [2012] NSWSC 717 Neumann Contractors Pty Ltd v Wyong Shire Council [2011] NSWSC 481 Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19 Roxo v Normandie Farm (Dairy) Pty Ltd [2012] NSWSC 765 Shaw v New South Wales (2012) 219 IR 87; [2012] NSWCA 102 Simmons v Protective Commissioner of NSW also known as NSW Trustee and Guardian [2012] NSWSC 455 Spellson v George (1992) 26 NSWLR 666 Waller v Hargraves Secured Investments Ltd (2012) 245 CLR 311
Texts Cited:	Ritchie’s Uniform Civil Procedure (NSW)
Category:	Procedural and other rulings
Parties:	2015/27483 National Australia Bank Ltd (Plaintiff / Cross-Defendant) Josephine Joan Charlton in her own capacity and as trustee for the Phoenix Trust (Defendant / First Cross-Claimant) Kevin Michael O’Brien (Second Cross-claimant) 2016/122304 Josephine Joan Charlton (First Plaintiff) Kevin Michael O’Brien as trustee of the Phoenix Trust (Second Plaintiff) The General Manager, NSW Rural Assistance Authority (First Defendant) National Australia Bank Ltd (Second Defendant)
Representation:	Counsel: 2015/27483 C Colquhoun (Plaintiff / Cross-Defendant) 2016/122304 C Colquhoun (Second Defendant) Solicitors: 2015/27483 DibbsBarker Lawyers (Plaintiff / Cross-Defendant) 2016/122304 DibbsBarker Lawyers (Second Defendant)
File Number(s):	2015/27843; 2016/122304