James v Commonwealth Bank of Australia [2015] NSWDC 68

James v Commonwealth Bank of Australia [2015] NSWDC 68

The applicant's pleaded defence was a set-off, which was contractually excluded by the guarantee's cl 11(a) 'pay now, litigate later' clause; therefore, the applicant failed to demonstrate a defence on the merits, and the application to set aside judgment was refused.

Parties
Applicant: David Anthony James; Respondent: Commonwealth Bank of Australia
Jurisdiction
Australia
Judgment Date
06 March 2015
Procedural Posture
Civil / Application to Set Aside Judgment After Summary Judgment Entered for Failure to File Defence/appear
Outcome
Notice of Motion dismissed. Stay of judgment entered 31 October 2014 granted until 20 March 2015. Applicant to pay respondent's costs on an indemnity basis.
Legal Topics
Setting Aside Default Judgment, Guarantees—'pay Now, Litigate Later' Clauses, Mortgagee's Duty of Care, Set Off, Indemnity Costs
Civil Law Banking and Finance Contract Law Setting Aside Default Judgment Guarantees—'pay Now, Litigate Later' Clauses Mortgagee's Duty of Care Set Off Indemnity Costs

Case Brief

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Parties

David Anthony James

Applicant

Commonwealth Bank of Australia

Respondent

Procedural Posture

Civil / Application to Set Aside Judgment After Summary Judgment Entered for Failure to File Defence/appear

Legal Issues

  1. 1 Whether the applicant demonstrated a reasonable explanation for not filing a defence or appearing when judgment was entered
  2. 2 Whether the applicant has a defence on the merits defeating the guarantee claim—specifically, whether statutory and common law duties regarding sale of mortgaged property afford a set-off/defence to the guarantor
  3. 3 Whether the 'pay now, litigate later' clause in the guarantee bars the pleaded defence/set-off

Ratio Decidendi

The applicant's pleaded defence was a set-off, which was contractually excluded by the guarantee's cl 11(a) 'pay now, litigate later' clause; therefore, the applicant failed to demonstrate a defence on the merits, and the application to set aside judgment was refused.

Court Disposition

Notice of Motion dismissed. Stay of judgment entered 31 October 2014 granted until 20 March 2015. Applicant to pay respondent's costs on an indemnity basis.

Orders

  • Notice of motion dismissed
  • Stay of judgment entered 31 October 2014 up to and including Friday 20 March 2015 granted