COMMONWEALTH BANK OF AUSTRALIA v CONLEY [1999] NSWSC 744

New South Wales Supreme Court CITATION : COMMONWEALTH BANK OF AUSTRALIA v CONLEY [1999] NSWSC 744 CURRENT JURISDICTION : COMMON LAW FILE NUMBER(S) : 12804/1996 HEARING DATE(S) : 30 June 1999 JUDGMENT DATE : 27 July 1999

COMMONWEALTH BANK OF AUSTRALIA PARTIES : v STEPHEN ROGER CONLEY JUDGMENT OF : Master Malpass

COUNSEL : PLAINTIFF: MR G K BURTON DEFENDANT: N/A SOLICITORS : PLAINTIFF: L E TAYLOR DEFENDANT: IN PERSON - UNREPRESENTED CATCHWORDS : Default under mortgage; claim for relief under the Act; no question of principle. ACTS CITED : Contracts Review Act 1980, s 7. CASES CITED : Nguyen v Taylor (1992) 27 NSWLR 48. Younan & Anor v Beneficial Finance Corporation Limited (Court of Appeal, 21 November 1994). DECISION : SEE PARAGRAPH 23

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

MASTER MALPASS

TUESDAY 27 JULY 1999

12804/1996 COMMONWEALTH BANK OF AUSTRALIA v STEPHEN ROGER CONLEY JUDGMENT 1 The proceedings were commenced in 1996. The case as propounded by the plaintiff is pleaded in the Amended Statement of Claim filed on 29 October 1996. The defendant's case is as pleaded in the Amended Defence filed on 5 June 1997. 2 The hearing took place on 30 June 1999. The plaintiff was represented by Mr Burton of counsel. The defendant appeared in person. 3 The plaintiff's evidence in chief was largely formal. It relied on certain admissions and tendered Exhibits A and B. The defendant has relied on two affidavits. Both were sworn by himself and annex documentation. The plaintiff has identified many objections to part of that material. The course was taken of reading the affidavits subject to the objections. In reply, the plaintiff relied on four affidavits. The defendant was briefly cross-examined. 4 The defendant had been a customer of the plaintiff for many years. There have been a number of lending transactions. He made the applications. The applications were assessed on information provided by him. The advances were paid to him. I shall briefly refer to certain of these transactions (being those that have relevance for present purposes). 5 In March 1989, the defendant obtained a personal loan of $20,000.00. The advance was used to purchase a motor vehicle. 6 In December 1990, the defendant obtained a further personal loan in the sum of $20,000.00. The advance was used to build a road on a property at Mudgee and to connect power and the telephone. 7 In March 1991, he obtained a further loan of $84,000.00. The advance was used to pay out the two personal loans and to build a house on the Mudgee property. The loan was secured by a second mortgage over the property known as 52 Carefree Road North Narrabeen (the property). 8 In June 1992, a further advance was approved. This saw the existing loan being increased by $35,000.00. The increased loan was secured by the existing second mortgage. 9 It appears that until about late 1995/early 1996 the defendant was able to service the lending arrangements had with the plaintiff. There is material which suggests that prior to that time he was regarded as a good and valued customer. The material is not particularly helpful as to how it came to be that the defendant began to have problems in meeting his lending commitments. 10 He fell into default in late 1995/early 1996 and he has remained in default under the mortgage. Exhibit A (a certificate given pursuant to the mortgage) reveals a present indebtedness in the sum of $165,558.00.73. 11 The plaintiff's claim is founded on that default. It seeks both possession of the property and judgment in a monetary sum. 12 The defendant has prepared his own pleading. Whilst there is no Cross-claim as such, the Amended Defence contains material which might be read as a claim for relief in respect of the lending arrangements. 13 Broadly speaking, in submissions, the defendant has identified three areas upon which he seeks to defend the plaintiff's claim. Firstly, he relies on the provisions of the Contracts Review Act 1980 (the Act). Secondly, he says that there was active encouragement by the plaintiff to him to take out further loans without regard to his current level of financial commitment. Thirdly, he said that the plaintiff was in breach of its lending guidelines. 14 The second and third matters do not of themselves constitute individual defences to the plaintiff's claim for relief. To the extent that they are relevant, they are to be seen in the context of the claim for relief under the Act. 15 The material does reveal correspondence from the plaintiff to the defendant which may be seen as encouraging him to use the lending facilities provided by the Bank. Despite this encouragement, I am not satisfied that he was led to a position where he entered into financial commitments which he was not able to service. I am not satisfied that there was any breach of relevant guidelines. 16 The picture revealed by the material is one of a customer well able to service the relevant financial commitments over a period of many years. His difficulties did not arise until some years after the entry into of the last of the relevant transactions. 17 The Amended Defence does recite many of the matters which may be found in the provisions of the Act. The mere recitation of some of these matters (together with proof thereof) does not thereby lead to an entitlement to relief under the Act. In this case, there was a lack of proof of matters. 18 It does appear that the defendant did not have the benefit of any expert advice. The plaintiff did not have any duty to give him advice. It seems that the transactions were made between the parties themselves. In his oral evidence, the defendant conceded that he had entered into each of the transactions as a matter of his own choice. It is not said that he lacked understanding of the relevant transactions. The material does not reveal any need for independent or expert advice. He appears to have capably handled his affairs over many years. 19 The mortgage is in standard form. No particular provision thereof has been identified as the subject of any complaint. 20 Section 7 of the Act confers a discretion on the Court to grant any one or more of the heads of relief identified therein where it finds that certain threshold requirements have been satisfied (inter alia, where it finds a contract to have been unjust in the circumstances relating to it at the time it was made). See Nguyen v Taylor (1992) 27 NSWLR 48 at 55-57 and 71-72 and Younan & Anor v Beneficial Finance Corporation Limited (Court of Appeal, 21 November 1994). It may grant relief if it considers it just to do so and for the purpose of avoiding as far as practicable an unjust consequence or result. 21 I have read the material relied on by the defendant. I have had reference to that which is relevant. In my view, the defendant falls well short of satisfying the relevant threshold requirements and/or demonstrating an entitlement to relief. 22 This was a case in which the plaintiff's prima facie entitlement to relief was not in dispute. The relevant questions concern the matter of whether or not the defendant could make out his defence. In my view, he has failed to do so. 23 I direct the entry of judgment for possession of the land described in paragraph 2 of the Amended Statement of Claim filed on 29 October 1996. It may be that such judgment will suffice for present purposes. The plaintiff is to have liberty to apply for judgment in a monetary sum and for leave to issue a Writ of Possession. The defendant is to pay the plaintiff's costs to date. The exhibits may be returned. **********

Last Modified: 07/27/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.