National Australia Bank v Dixon
[2003] TASSC 57
•3 July 2003
[2003] TASSC 57
CITATION: National Australia Bank v Dixon [2003] TASSC 57
PARTIES: NATIONAL AUSTRALIA BANK (ACN 004 044 937)
v
DIXON, Peter
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 897/1999
DELIVERED ON: 3 July 2003
DELIVERED AT: Hobart
HEARING DATES: 25 June 2003
JUDGMENT OF: Slicer J
CATCHWORDS:
Procedure - Supreme Court procedure - Tasmania - Practice under Rules of Court - Summary judgment - Actions for repayment of loan – Arguable defence – Delay in seeking judgment.
Webster and Anor v Lampard (1993) 177 CLR 598; (Cloverdale Lumber Co Pty Ltd v Abbott (1924) 34 CLR 122, applied.
Stephens v Huett and Eastley 36/1983; Silverton Ltd v Harvey [1975] 1 NSWLR 65; Deputy Commissioner of Taxation v Hobart Tug Company Pty Ltd A21/1986, followed.
Deegan v Remington (1894) Aus Law Times; Chrysler Marine Australia Pty Ltd v Mahoney [1976] Qd R 184, not followed.
Supreme Court Rules 2000 (Tas), rr356 and 367.
Aust Dig Procedure 270
REPRESENTATION:
Counsel: M E O'Farrell
Defendant: P W Tree
Solicitors:
Plaintiff: Finlay Watchorn
Defendant: H S Murray
Judgment Number: [2003] TASSC 57
Number of Paragraphs: 20
Serial No 57/2003
File No 897/1999
NATIONAL AUSTRALIA BANK (ACN 004 044 937)
v PETER ALLISTON DIXON
REASONS FOR JUDGMENT SLICER J
3 July 2003
The plaintiff seeks summary judgment in the action, pursuant to the Supreme Court Rules 2000, r356.
The parties entered into a loan agreement for an amount of $83,000 with a maturity date of ten years, commencing from the "draw down" date of 6 February 1995. The terms of the loan provided for a "nominal fixed interest rate" of 13.719 per cent which was to be converted to a variable rate after a five year period and a default rate of 4.5 per cent. Repayments were to be paid monthly in the amount, based on the "nominal fixed interest rate" of $1,274.73. Regular repayments were made until February 1996. Thereafter, payments of $3,500 were made in the period December 1996 and January 1997, and $6,770 between 6 October 1998 and 1 April 1999.
Bank rates proved on the hearing and calculations based thereon, showed that as of 30 May 2003, the amount outstanding was $191,466.38 with, in the terms of the application, a daily accrued amount of $73.20 as and from 1 June.
Following default and service of notice of demand dated 18 October 1999, these proceedings were commenced by writ dated 10 November 1999. A statement of claim dated 12 January 2000 was delivered and a defence dated 22 May 2000 entered. Relevant to this application is that in the intervening period, the plaintiff did not seek to obtain a default judgment.
A consent order permitting amendment to the statement of claim was made on 25 March 2002 to which no defence has been served. Notice of intention to proceed was filed on 17 April the following year and this application made on 26 May 2003.
The power to order summary judgment must be exercised with exceptional caution (Webster and Anor v Lampard (1993) 177 CLR 598). It is for the applicant to show that on the materials provided to the Court it is clear that the defendant has no defence whatever, not for the defendant to show that he has a maintainable answer to the action (Cloverdale Lumber Co Pty Ltd v Abbott (1924) 34 CLR 122). Cogent proof must be provided (Stephens v Huett and Eastley 36/1983).
This is an action for debt and to succeed, the plaintiff must show:
(1)an agreement exclusively governing the rights of the parties;
(2)default under the terms of the agreement;
(3)demand and failure to satisfy the demand.
In this case, the defence consists of formal admissions:
"1The defendant admits paragraph 1 of the Statement of Claim.
2The defendant admits paragraph 2 of the Statement of Claim.
3The defendant admits paragraph 2A of the Statement of Claim.
4The defendant admits paragraph 2B of the Statement of Claim.
5The defendant does not admit paragraph 2C of the Statement of Claim.
6The defendant admits paragraph 2D of the Statement of Claim.
7Save that the defendant admits payment of the loan was to be monthly each and every allegation contained in paragraph 2E of the Statement of Claim (illegible).
8The defendant denies each and every allegation contained in paragraph 2F of the Statement of Claim.
9The defendant does not admit paragraph 2G of the Statement of Claim.
10The defendant denies each and every allegation contained in paragraph 2H of the Statement of Claim.
11The defendant admits paragraph 3 of the Statement of Claim.
12The defendant denies each and every allegation contained in paragraph 4 of the Statement of Claim.
13The defendant does not admit paragraph 5 of the Statement of Claim.
14The defendant does not admit paragraph 6 of the Statement of Claim.
15The defendant does not admit paragraph 7 of the Statement of Claim."
denials or pleas of "does not admit". The only expanded plea is to par8 of the original statement of claim, claiming:
"Since the 18th day of October 1999 the defendant has neglected or failed to repay the plaintiff the full Balance Owing demanded as aforesaid."
and states:
"The defendant admits paragraph 8 of the Statement of Claim but says that the full balance owing to the plaintiff has never become payable as alleged by the plaintiff."
The pleadings do not comply with r243(5)(a) and (b), which states:
"(5) In an action for a debt or liquidated demand ¾
(a)a mere denial of the debt is not permitted; and
(b)a defence in denial must deny the matters of fact from which liability for the debt or liquidated demand is alleged to arise."
No defence has been entered in relation to the amended statement of claim which is simply a more comprehensive version of the original. The defendant contends that irrespective of the defective pleading, the plaintiff must establish that there is, on the evidence, no arguable case against the claim. Irrespective of whether the onus remains with the plaintiff or rests with the defendant to show that there is an arguable case arising from a fact put in issue, as distinct from a question of law (r359(4)) Silverton Ltd v Harvey [1975] 1 NSWLR 659), the outcome, in this case is identical.
A purpose of rules of court is that:
"… of preventing a defendant, who knows perfectly well that he owes the sum claimed, from postponing the time of payment, and putting the plaintiff to further expense in a litigation which ought never to have taken place." (Symon & Co v Palmers Stores (1903) Limited [1912] 1 KB 259 at 264.)
The contention of the defendant is that negotiations between the parties and agreement reached following default, vitiated any event giving rise to a right to require repayment of capital before the maturity date of 28 February 2005.
The loan agreement, cl 6, required the loan to be repaid by instalments and any default which included a failure to pay any instalment on the due date (cl 10(b)) provided a right of acceleration (cl 11) which afforded the "right to serve demand upon the Borrower, whereupon the Balance Owing shall become immediately due and payable".
Following default, there were discussions between the parties, culminating in a letter dated 9 September 1996, which stated:
"Loan account number 64.038.8410 is seven repayments in arrears totalling $8,923-11. Total outstanding is $85,816-36 plus interest accured, [sic] with next repayment of $1,274-73 due on the 6th of October 1996. As per our discussion I confirm our agreement for arrears of loan to be cleared by 30th of September 1996. Loan repayment book is attached which is now to be used for repayments.
The Bank has been patient in its dealings with arrears on this loan which were to clear by 31st of August 1996, but if our agreement for clearance of arrears by 30th of September is not honoured legal action for debt recovery will commence. Please ensure clearance of arrears is actioned as you have advised."
The defendant did not comply with the terms of the agreement varying the conditions of the original. There followed correspondence from the plaintiff and its solicitors to the defendant and replies from him which are of little consequence, except to show threat of legal action and excuses and requests for extension by the defendant. By letter dated 12 August 1998, the plaintiff again wrote to the defendant advising:
"Further to our meeting of 7th August we advise that the Bank is prepared to accept your proposal for debt reduction. This approval is conditional upon you meeting monthly interest, at a minimum, until a formal principle and interest arrangement is put in place. This arrangement is to be in place within 3 months of the date of this letter.
As per our discussions we enclose periodical payment authority to enable residual monies due … to be transferred from your newly established Office Account to reduction of your debt."
Subsequent correspondence only evidences method and time of payment requirement by the plaintiff and prevarication by the defendant. It is during this period (12 August 1998 and 29 September 1999) that the total of $6,770 already referred to was paid. No subsequent payments have been made.
The defendant did not comply but claims that the effect of this "agreement" was to vary the terms of the original agreement so as to preclude a right to the repayment of remaining capital until the "maturity date". The contention is rejected. The letter evidences no more than a forbearance to sue if certain conditions were honoured. They were not, and the plaintiff is entitled to do so. There was no variance or the creation of a new agreement governing the terms of the original loan. The defendant remained in default and formal notice of demand, dated 18 October 1999, was given and these proceedings commenced in the following month.
Reasonable time
Rule 356 provides:
"356 ¾ (1) If a statement of claim has been served on a defendant in an action and the defendant has appeared in the action, the plaintiff may apply to a judge for judgment against the defendant on the ground that the defendant ¾
(a)does not have a defence to a claim included in the writ or to a particular part of that claim; or
(b)does not have a defence to that claim or part, other than as to the amount of any damages claimed.
(2) This rule applies to any action begun by writ other than an action that includes a claim ¾
(a)for defamation, malicious prosecution or false imprisonment; or
(b)based on an allegation of fraud."
Unlike the time prescribed for a defendant to seek summary judgment (r367), the rule neither requires a specified time nor makes reference to "reasonableness". The defendant relies on the case of Deegan v Remington (1894) Aus Law Times as authority for the proposition that a plaintiff must act promptly or show good reason for delay. That approach was adopted in Chrysler Marine Australia Pty Ltd v Mahoney [1976] Qd R 184, a case not followed by this Court in Deputy Commissioner of Taxation v Hobart Tug Company Pty Ltd A21/1986 when Cox J (as he then was), stated at 4:
"There is no express condition precedent that the application be made at any given time or even within a reasonable time, nor is there, as a matter of construction, any such implied requirement which would go to jurisdiction. I am not saying that as a matter of practice a judge or master might not, in the exercise of his discretion, decline to grant the relief sought where there is a lengthy and unexplained delay between the entry of appearance and the making of the application, but I can see no basis for holding that the delay in this case, even were it not satisfactorily explained, is such that I am deprived of jurisdiction to grant summary judgment when there is no arguable defence and when Mr Chopping expressly disclaims that the delay has in any way prejudiced his client."
Nothing stated in the subsequent case of Deputy Commissioner of Taxation (Qld) v Mugica (1987) 19 ATR 250 dissuades me from following the Tasmanian case. The time elapsed in Silverton (supra) was significant since the application followed the grant of leave for the filing of an amended defence. Rule 356 permits an application to be made following the service of a statement of claim and entry of appearance. Absent entry of appearance, the plaintiff is entitled to enter a default judgment. The plaintiff had not sought to obtain default judgment in 2000 in the period before delivery of the defence which indicates, at least, that it was prepared to allow the defendant time to properly meet the action. The rule does not preclude an application after the delivery of a defence: indeed it would be difficult to justify such an application before delivery except by way of default. Delay might warrant a discretionary exer but it is not a "mandatory" bar. The plaintiff might have been dilatory but nothing which the defendant has done or omitted to do warrants a discretionary exercise adverse to the plaintiff's claim.
The application for summary judgment is granted. The plaintiff is at liberty to enter final judgment against the defendant in the sum of $193, 881.98.