National Australia Bank Ltd v Artup

These proceedings arise out of a number of loans which were made by the plaintiff to the defendants on 23 July 2003, 25 July 2003, 4 March 2004 and a business cheque facility provided in October 2003. The loans were secured by a mortgage over a property in Evelyn Avenue, Bundanoon. Default took place in relation to these loans in May 2016. There was non-compliance with a section 57 notice and the proceedings were commenced on 24 August 2016. The amounts owing to the plaintiff are in the vicinity of a little under 2 million dollars in total.

The first defendant is a solicitor of this Court. He filed a defence on behalf of both defendants on 13 October 2016 which did not plead to a number of the historical allegations in the statement of claim. In respect of each allegation that they owed a particular amount of money he pleaded "not admitted" and then went on to say that in respect of those paragraphs the defendants have a cross-claim which will exceed the amounts said to be owing in those paragraphs.

On 28 February 2017 the Registrar ordered by consent that any cross-claim to be filed by the defendants was to be filed and served by 7 April 2017. That did not occur. On 18 April 2017 the Registrar ordered by consent that any cross-claim was to be filed and served by 2 May 2017. That did not occur.

Thereafter the proceedings were stood over on a number of occasions by the Registrar until they were referred to me by the Registrar on 27 June for judicial directions. They first came before me on 19 July 2017. I was told that at that time the parties were negotiating and for that reason I stood the proceedings over to 21 August. I was told that a cross-claim would be served. It was not.

On 21 August the proceedings came before me again for directions and I ordered that the defendants were to file and serve any cross-claim and an amended defence, which I was told might be necessary, by 25 August 2017.

This morning I am told that no amended defence will be filed but a draft cross-claim has been sent to the plaintiff. However, the direction I gave, which was the third time the Court has ordered a cross-claim to be filed, has not been complied with.

The plaintiff now asks that the defence be struck out as not disclosing any defence to the claim. That is demonstrably so on the face of the document. I take into account also that the first defendant is, as I have said, a solicitor of this Court so that there can be no question that the defence is in an unsatisfactory state because the defendants do not have legal knowledge or assistance.

When there is no cross-claim put forward by way of a defence, as the defence anticipates, I consider that the defence filed 13 October 2016 should be struck out.

I am not prepared to make any further directions for the filing of a cross-claim. The plaintiff is free to move for default judgment. If the defendants wish still to file a cross-claim, it will be necessary for them to file a notice of motion supported by an affidavit which, amongst other things, will need to explain the extreme delays and the failures to comply on three occasions with the Court orders.