Perpetual Trustee Co Ltd v Jenner

[2012] QDC 235

[2012] QDC 235

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 2059 of 2012

PERPETUAL TRUSTEE COMPANY LIMITED

Plaintiff

and

PETER JAMES JENNER

and

SUSAN MAREE JENNER

Defendant

Defendant

BRISBANE

..DATE 16/08/2012

ORDER

CATCHWORDS

Uniform Civil Procedure Rules 1999 r 290

Defendants' application to set aside default judgement in favour of plaintiff mortgagor - defence proposed to be that defendants may not have been in default under the mortgage as interest rate increases applied exceeded increases in rates set by the Reserve Bank - that defence considered unpromising - within the time for filing Notice of Intention to Defend, defendants posted to this court papers intended to lead to disclosure of information about interest rates - material rejected and returned by the Registry - application and proceeding generally adjourned for a short period, to come on as a summary judgement application by the plaintiff - whether Registry should have advised of need for filing a Notice of Intention to Defend raised.
HIS HONOUR:  This is an application by the defendants, represented by the male defendant, for the setting aside under rule 290 of default judgment entered by the Registrar for recovery of possession of the defendants' residential property and also a money sum of $411,272.23 apparently including interest and costs.  The judgment was entered on the 6th of July 2012.  The plaintiff would've been in a position to seek judgment in default of filing of a  Notice of Intention to Defend from the 26th of June. 

The defendants have, on the 24th of July, filed a defence, a counterclaim for "the return of all interest charges imposed by the applicant that have been claimed that are above the official interest rate charges as set by the Reserve Bank of Australia"  having been struck out.  That language indicates the substance of the defence that is mounted.  It contends that the plaintiff has failed and refused to disclose on what basis interest rate charges imposed on the defendants have been raised.  It's pleaded that the defendants "may have paid in excess of the amount that is agreed on from 2008,"  and indeed that on a true accounting the defendants "may be in credit as opposed to being in debit." 

The defendants kept their loan account (secured by mortgage over the property) in order until the end of January this year.  Since then, six monthly instalments have not been paid, aggregating $18,262.17.  Another $2,985.42 is due on the 31st of this month.  That amount does not include various recovery charges and the like which Ms Secomb tells the court amount to $5,914.12.  Once the March default occurred, notice of default was issued, leading to the plaintiff claiming the total amount of the secured indebtedness.  It's now seeking default interest at a rate a couple of percentage points higher than those that apply under the parties' loan arrangements. 

Some application is required to work out the interest picture.  The "annual percentage rate" which the defendants were obliged to pay was "the variable rate" constituted by aggregating the "core variable rate" and the "margin".  The defendants had a favourable margin entitling them to a 0.30 per cent reduction from the core variable rate which started out at 6.95 per cent per annum.  The core variable rate was subject to variation as reference to the definition shows.  It means, "The rate determined by the program manager in good faith and most recently notified to you as the rate applying to your mortgage pool."  There is a manager distinct from the plaintiff with which the defendants have had dealings. 

The defendants have been advised as interest rates change of the changes being made.  The decisions of the Reserve Bank are being offered as an explanation in many instances.  Reference has been in addition, in others, to global financial market conditions as rendering interest rate increases beyond those set by the Reserve Bank being appropriate. 

For some of the period the defendants have had the advantage of reduced interest rates applying.  They appear to have accepted the rates as notified to them without any kind of challenge, until recently.  If it were for me to determine the defendants' application to set aside the judgment on the merits, it would be my view that the application ought not to succeed.  The defence is one which may well reflect views held in many quarters in the community, that lenders varying rates ought to justify variations prejudicial to the lenders in excess of ones directly supported by Reserve Bank decisions. 

It's the first time in my experience that such an argument's been raised in Court.  The consequences of it would be very much in conflict with common experience and, as indicated, I would not be inclined to accede to it, but one never knows what another Judge or a higher court might determine, I suppose. 

What, in my view, requires the court to show a more favourable attitude to the defendants is that this is not a straightforward case of failure on their part to file a Notice of Intention to Defend.  It's clear from the Registry's letter to Mr Jenner of the 26th of June 2012 that in the preceding week the defendants had attempted to file material in court in response to the plaintiff's claim.  The Registry letter advises as follows: "Please note that in order to file an affidavit with the court the correct court form is required and you must make reference to an existing proceeding number.  Therefore your documents have been returned to you.  Additionally, if you are seeking an order to subpoena documents, there are specific forms for this process.  You can find the relevant forms on the Court's website, under the link 'Forms' on the homepage.  They are listed under the heading 'Uniform Civil Procedure Rules'.  We would strongly encourage you to seek legal advice in relation to this matter to ensure that the correct procedures are followed in accordance with the legislation.  Alternatively you can contact the Queensland Public Interest Law Clearing House.  Please do not hesitate to contact the Registry if you require any additional information." 

The documents sought to be subpoenaed by the affidavit supplied were "All documents from RESIMAC Limited in relation to matters before the court."  That company has been identified as the manager.  The court's been told and accepts that there have been some contests occurring between the defendants and that company in relation to this interest rate issue. 

It is my view that in circumstances such as the present it might be salutary if the Registry felt in a position to offer some rudimentary legal advice going beyond what was offered here to obtain qualified assistance.  It would seem to me salutary if the Registry could advise where default judgment, as it is here, was plainly something that potentially might affect the defendants in a way to let them know that what they needed to do, above all else, was get a Notice of Intention to Defend filed.  Needless to say, the plaintiff's claim did advise the defendants to that effect and of what might happen if they didn't do what was required.  But these are not defendants who have done nothing.

In those circumstances it seems to me, notwithstanding my view that the defence they have in mind must fail, the defendants ought to have some further time to determine what they want to do.  The plaintiff ought not to be further delayed, and my view is that the matter ought to come back on quickly as a summary judgment application without the plaintiff having to go to the trouble of preparing and serving such an application. 

I toyed with the notion of allowing the defendants a longer, rather than shorter, adjournment period if they were able to get their arrangements under the loan in order.  I took Ms Secomb to be communicating to the court that that was likely to be her client's main concern.  There may have been some point in formulating an order that might've required the defendants, if they wanted a longer adjournment, to pay identified sums of money, corresponding with those indicated above, by the end of the month.  But the reality of matters appears from the last exchange with Mr Jenner, to be that he and his partner might find it very difficult to do that.  So there shouldn't be any such requirement in the court order.  That doesn't affect what's been the court's strong recommendation to him that he try to re-establish the good record of paying instalments that existed before this year. 

The court adjourns the defendants' application and the proceeding generally to the 29th of August of 2012, when it is to be dealt with without any necessity to file further material as an application by the plaintiff for summary judgment.  I order the defendants to pay the plaintiff's costs thrown away by the adjournment to be assessed if not agreed.  That cover everything?

MS SECOMB:  There's just one small matter, if I may?  The affidavit that Mr Jenner handed up this morning, there was a without prejudice correspondence in there, and I didn't get the opportunity to tell you I took objection.

HIS HONOUR:  I didn't even notice that.  I haven't seen it. 

DEFENDANT:  One wasn't handed to you, your Honour, I'm sorry.

HIS HONOUR:  I don't think I got it. 

MS SECOMB:  Oh, it hasn't been handed up?

HIS HONOUR:  No, no, that's right.

MS SECOMB:  Sorry.

HIS HONOUR:  I didn't‑‑‑‑‑

MS SECOMB:  Apologies.

HIS HONOUR:  ‑‑‑‑‑I didn't get it.

MS SECOMB:  I wasn't sure whether or not you had it. 

HIS HONOUR:  No, no.  I‑‑‑‑‑

MS SECOMB:  Sorry about that.

HIS HONOUR:  ‑‑‑‑‑I attempted‑‑‑‑‑

MS SECOMB:  Yes.

HIS HONOUR:  ‑‑‑‑‑to follow what I thought was a careful procedure by suggesting he give it to you first.

MS SECOMB:  Sorry, I thought he'd handed it up.  My apologies.

DEFENDANT:  No, I'm sorry.

HIS HONOUR:  All right.  Adjourn the Court till 10 o'clock tomorrow, thanks.

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