Westpac Banking Corporation v Tesoro - [2012] VSC 182

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2011 2394

WESTPAC BANKING CORPORATION	Plaintiff
v
JOHN BENJAMIN SANTOS TESORO	Defendant

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JUDGE:	LANSDOWNE AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	15 February, 13 March and 27 April 2012
DATE OF JUDGMENT:	8 May 2012
CASE MAY BE CITED AS:	Westpac Banking Corporation v Tesoro
MEDIUM NEUTRAL CITATION:	[2012] VSC 182

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ENFORCEMENT OF MORTGAGE-application for summary judgment for debt and possession-whether default notice complies with s.88(3) of the National Credit Code-test for substantial compliance under s.208(1) of the National Credit Code-whether failure to comply with s.88(3) an irregularity-whether an Associate Judge can regularise under s.88(5)-consequences of failure to comply with s. 72(3) of the National Credit Code-evidence required for application for change to a credit contract under s.74(1) of the National Credit Code -ss 63 and 64 of the Civil Procedure Act 2010 and ss.72, 74, 88 and 208 of the National Credit Code.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S.D. Hay	Gadens Lawyers
For the Defendant	Appeared in person

HER HONOUR:

Application

This is an application for summary judgment made by the plaintiff on summons filed on 22 July 2011. The plaintiff seeks summary judgment for debt and possession of the defendant’s real property pursuant to the Civil Procedure Act 2010. The summons was first returnable on 18 August 2011. Two days prior to that date the defendant made complaint of the conduct of the plaintiff to the Financial Ombudsman Service. This complaint led to adjournment of the summons until 15 February 2012. On that date the plaintiff relied on an affidavit sworn by Kate Mattsson on 14 February 2012 to the effect that the complaint made by the defendant was closed by the Financial Ombudsman Service on 10 January 2012. This was not disputed by the defendant.

At the time the defendant filed his defence and made complaint to the Financial Ombudsman Service he was legally represented. Those solicitors ceased to act for him on 31 January 2012 and thereafter he has been self-represented.

At the commencement of the hearing on 15 February 2012 the defendant applied for an adjournment for 21 days i.e. to 7 March 2012 on the basis that he anticipated that he would be in receipt of funds from his business venture in the Philippines by 1 March 2012 which would enable him to make a payment to the plaintiff and demonstrate that he was now in a position to service the loan. The application was opposed. I refused it. As it transpired, the hearing did not commence until late in the afternoon of 15 February and so was not completed on that day. The hearing was adjourned part heard to 13 March 2012. I allowed the defendant by directions made on 15 February to file further material by 7 March 2012, specifying that this order applied in particular to any affidavit in support of an application to change the terms of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] VSC 182
Decision Date: 8 May 2012

CaseChat Overview and Summary

In the case of Westpac Banking Corporation v Tesoro, the court was called upon to decide whether the lender had correctly followed the procedures set out in the National Credit Code when enforcing a mortgage. The dispute involved the bank seeking summary judgment for the outstanding debt and possession of the property. The key issue before the court was whether the bank's default notice complied with the requirements of section 88(3) of the National Credit Code. This required the court to determine the test for substantial compliance under section 208(1) of the Code and whether the bank's failure to comply with section 88(3) constituted an irregularity that an Associate Judge could regularise under section 88(5). Additionally, the court had to consider the consequences of the bank's failure to comply with section 72(3) of the Code and the type of evidence required for an application to alter a credit contract under section 74(1) of the Code.

The court examined the statutory provisions of the National Credit Code and relevant sections of the Civil Procedure Act 2010. It found that the bank's default notice did not strictly comply with section 88(3) of the Code, but it did substantially comply with the requirements. The court held that the failure to comply with section 88(3) was not an irregularity that could be regularised by an Associate Judge under section 88(5). However, the court concluded that the consequences of the failure to comply with section 72(3) did not deprive the court of jurisdiction to hear the application. Finally, the court found that the evidence provided by the bank was sufficient to support an application to modify the credit contract under section 74(1) of the Code.

The court ultimately determined that the bank's application for summary judgment should be granted. However, the court did not order possession of the property at that time, pending the outcome of any appeal by the borrower. The court also directed that the borrower could apply for a modification of the credit contract under section 74(1) of the Code, provided they submitted the necessary evidence within a specified timeframe.

Orders