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- Unreported Judgment
Commonwealth Bank of Australia v Martin QDC 272
DISTRICT COURT OF QUEENSLAND
Commonwealth Bank of Australia v Martin & Another  QDC 272
COMMONWEALTH BANK OF AUSTRALIA
LEKEETA LEAH MARTIN
21 December 2018
6 November 2018
The application is dismissed. The defendants are ordered to pay the plaintiffs costs of and incidental to this application to be assessed unless otherwise agreed.
SUMMARY DISMISSAL, SETTLEMENT AND DISCONTINUANCE - SUMMARY DISPOSAL OF LITIGATION – SUMMARY JUDGMENT – where summary judgment was entered against the defendants – where the defendants obtained loans from the plaintiff – where the defendants failed to repay the loans – where the defendants failed to appear and summary judgment was entered – where the defendants claim they were not notified - whether the summary judgment should be set aside.
S Lee appearing for the respondent/plaintiff
The defendant/applicants appeared for themselves
HWL Ebsworth Lawyers for the respondent/plaintiff
- On 17 November 2016 the plaintiffs lodged a claim for recovery of possession of land known as 1 Hemes Close, Pacific Pines together with payment of debt in the amount of $161,329.30. The defendants filed notices of intention to defend with blanket denials of the claims (other than admissions of formal matters). Their email addresses were listed in those defences.
- The plaintiff wrote to the defendants pursuant to r 444 of the Uniform Civil Procedure Rules 1999 requesting that the defences be amended ahead of an application to either strike out the defence or apply for summary judgment. The correspondence was sent firstly by express post to 1 Hemes Close, Pacific Pines and secondly by email to the defendant’s email in response to a request for an extension of time in which to file the defence. On 2 August 2017 copies of the application for summary judgment were sent to the first and second defendants at 1 Hemes Close, Pacific Pines and to the two email addresses stated in the defendants filed defences. At least some of this correspondence must have been received because on 14 August 2017, the first defendant sent an email in response to a letter enclosing an affidavit of Katie Chae asking for patience as the defendants were waiting on legal advice.
- On 18 August 2017 summary judgment was entered ordering that the plaintiff recover possession of the land known as 1 Hemes Close, Pacific Pines, that the first and second defendants pay to the plaintiff the sum of $165,729.75 and that the first and second defendants pay the plaintiffs costs of and incidental to the proceeding on an indemnity basis.
- On 30 August 2017 letters were forwarded to the first and second defendants at their email addresses and at their residential address enclosing a copy of the summary judgment. On 5 March 2018 the Registrar issued an enforcement warrant for possession of the land.
- On 23 May 2018 the respondents applied for stay of that enforcement warrant. They both filed affidavits asking for more time because they had new evidence to adduce. The defendants then filed a complaint with the Financial Ombudsman Service and as a result the bank agreed to a stay of the execution until that matter was determined. The application filed on 23 May 2018 was adjourned to the registry to a date to be fixed. On 22 June 2018 the Financial Ombudsman Service determined the complaint and closed the file. The plaintiff then gave notice to the defendants by email that they intended to proceed with the enforcement action. The eviction was affected on 17 September 2018. There was a second complaint lodged to the Financial Ombudsman Service on 25 September 2018 and that further delayed enforcement of the warrant until the complaint was closed on 16 October 2018. There was then an agreement to stay further enforcement action until 25 October 2018.
- The application before the court is to stay the enforcement warrant, however, the plaintiff has conceded and it is clear from the documents filed by the defendants that they are really seeking to have the summary judgement set aside. The plaintiff has no objection to this matter proceeding as an application to set aside the summary judgement and I intend to proceed on that basis. If the defendants are successful in this application then it will follow that the enforcement warrant will also be set aside.
Release of mortgage
- The defendants claim that they never had a mortgage on the Hemes Close property alone but that the mortgage was over two properties: one situated at 1 Hemes Close, Pacific Pines and the other at 14 Yaldara Street, Pacific Pines and that any loan that was made was in relation to the mortgage over both properties. They claim that the mortgage on Yaldara Street was released without their knowledge or consent and that this put them into financial hardship such that they were unable to pay the mortgage over Hemes Close.
- Bank records show that this is not so. The defendants applied for and obtained a loan of $470,140 for the purchase of the property at 14 Yaldara Street, Pacific Pines (account number 819 829 802). That loan was secured by a mortgage over both Yaldara Street and Hemes Close as they borrowed 100 per cent of the purchase price of Yaldara Street. The loan was fully paid out on 8 January 2009.
- Anita Ewert, the second defendant’s mother, claimed that she had a beneficial interest in the Yaldara St property due to an agreement between herself and the defendants whereby she paid out the mortgage on the property. The plaintiff had issued a release of mortgage on 8 January 2009 when the property was paid out but it had not been acted upon. Ms Ewert filed a claim in relation to the matter and on 9 April 2018 Koppenol DCJ ordered that the title be transferred to her and the mortgage be discharged. That transfer took place pursuant to the court orders and that mortgage remains on Hemes Close although no money is owing on it.
- The loan that secured the $150,000 line of credit is mortgage number 711413739 and is not the same mortgage as the previous one that was secured over both properties. In those circumstances the previous mortgage has no relevance to the judgment that was entered on 18 August 2017.
- The original loan applied for and given to the defendants was for $150,000 and was taken out on 19 June 2013. That loan was paid down to $86,942 when the defendants applied for a top up for that loan to $63,000 to build a replica Disney castle in their backyard. The defendants went into the branch to apply for this loan. The agreement resulted in a redraw facility up to $150,000. The $63,000 was drawn over time between 12 December 2014 and 10 June 2015. Although the defendants have pointed to some clerical errors in the loan application, there does not seem to be any anomaly in the loan applications such as would render them void.
- In any event the defendants tendered a copy of that agreement for their own records bearing their signatures. There is record of an attendance in person of both the defendants at the Helensvale branch at the bank where they were interviewed face to face and there were complaints to the bank made on 10 occasions by the second defendant in relation to the home loan account. There cannot in my view be any doubt that the defendants were aware of and responsible for this loan. The first defendant has accepted that he was initially paying $1000 per month off the loan and then payments dropped to $450 a month. He agreed that he had made no payments to the home loan after 24 September 2015. He agreed that they had been advanced $150,000 by the plaintiff.
- There were internal complaints about details on the home loan, an email address being incorrectly recorded and a bank account being opened that was not authorised. Although all of these complaints may be correct, they do not appear to have any bearing on the non-payment of the home loan and as such are not grounds for setting aside the judgment.
- The applicant’s claim that the bank engaged in irresponsible lending in relation to both the original home loan and the top up agreement. This is on the basis that the first defendant had credit cards that weren’t disclosed and that his income was not able to service the loan. The bank relied on information supplied by the defendants and on that information there was sufficient margin for the loan to be approved. There was good equity in the house and the funds were for renovations and improvements. The fact that the money was not used for those purposes was not within the knowledge of the bank at the time. The fact that the first defendant may have been irresponsible in his use of his credit facility and that the second defendant spoke to the bank about this does not amount to a ground to set aside the judgement.
- There are three factors to be considered when setting aside a default judgment regularly entered namely:
- (a)Whether the judgment debtor has given a satisfactory explanation of its failure to appear.
- (b)Any delay in making the application.
- (c)Whether the defendant has a prima facie defence on the merits.
- The defendants maintain that they did not know that the plaintiff was applying for summary judgement. This seems unlikely given that documents were sent both to their email addresses and to the home in which they lived. The email sent by the first defendant requesting more time to seek legal advice shortly before the application was due to be heard also tends to suggest that there was an awareness of the impending application. Their failure to appear in my opinion has not been satisfactorily explained.
- There has been significant delay in bringing this application to court. The defendants claim they did not know that summary judgment had been entered however the affidavit of Matthew Broderick filed 2 November 2018 exhibits emails were sent to the registry of the court in September 2017 asking for an extension of time within which to appeal.These emails included the deponent and the plaintiff granted an extension to have the judgement set aside until 10 November 2017. The only inference that can be drawn from those emails is that the defendants were aware that summary judgment had been entered and wished to do something to try to overturn that judgment. The fact that it took over 12 months for any action to be taken tells heavily against the setting aside of the judgment.
- In any event, there is no prima facie defence to this judgement and therefore no basis to set aside the earlier order of the court.
- The application is dismissed. The first and second defendants are ordered to pay the plaintiffs costs of and incidental to this application to be assessed unless otherwise agreed.
- Published Case Name:
Commonwealth Bank of Australia v Martin & Another
- Shortened Case Name:
Commonwealth Bank of Australia v Martin
 QDC 272
21 Dec 2018