National Australia Bank v Freeman

[2000] QSC 295

THE SUPREME COURT

OF QUEENSLAND  No. 4013 of 1998

BETWEEN:

NATIONAL AUSTRALIA BANK LIMITED ACN 004 044 937

Plaintiff

AND:

LYNTON CHARLES FREEMAN

Defendant

REASONS FOR JUDGMENT

B.W. Ambrose J.

Delivered the Eleventh day of October 2000

Appearances:  R Hanson QC with I Perkins for the plaintiff

L Bowden for the defendant

Solicitors:Mallesons Stephen Jaques for the plaintiff

Creswicks Lawyers for the defendant

Hearing date:  25, 26, 27 and 28 September 2000

1. The plaintiff sues on a Bill Facility with a limit of $1,020,000.00 provided to the defendant on 19 December 1997.

1. The facility commenced on 19 December 1997 and ended on 6 April 1998.  Under clause 19 it was agreed that a number of mortgages over the defendant’s rural property “Glasford Vale” together with registered stock mortgages should remain in full force and effect.  In essence therefore the bill facility was secured by the mortgage documents itemised in item 13 of the Schedule.

1. On the material it is clear that the defendant defaulted in meeting his obligations under the bill facility.

1. On 1 May 1998, the plaintiff instituted proceedings for recovery of possession of the land and stock the subject of the securities given by the defendant over the years to which reference was made in clause 19 of the bill facility.  The plaintiff sought to recover $1,029,255.05 plus interest to the date of issue of proceedings with a further claim for interest falling due subsequent to the issue of proceedings.

1. The defendant admits default under the bill facility and seeks relief based upon events alleged to have occurred, representations and promises made, etc during the course of his dealings with the plaintiff from 1992 until the occasion of his executing a Deed of Mediation with the plaintiff subsequent to a Mediation conducted in December 1997.

1. The bill facility upon which the plaintiff sues was arranged as a consequence of the Deed of Mediation executed by the plaintiff and the defendant on 4 December 1997.

1. Recital E to that Deed reads:-

“E.As a result of the mediation Freeman has agreed to an offer from the bank to forebear from enforcing the mortgage immediately to allow him to repay the facility indebtedness on the terms and conditions contained in this deed.”

1. Clause 4.1 provides:-

“4.1Freeman must use his best endeavours to refinance the debt or to sell the property and to exchange contracts of sale no later than 4 March 1998.  Settlement of any sale or refinance must be effected no later than 6 April 1998.

4.2In the event the refinance is not approved or contracts are not exchanged under clause 4.1 by 4 March 1998, Freeman agrees to deliver to the bank by 6 April 1998 vacant possession of the property to enable the bank to sell the property as mortgagee exercising power of sale.”

1. Under clause 3.1 it is provided:-

“Freeman acknowledges that the bank is entitled at any time on and from 5 March 1998 to issue to Freeman any demands, notices of exercise…