Malik v National Australia Bank

These proceedings were commenced by the plaintiffs (Mr Malik and Ms Afzal) against the defendant, National Australia Bank Limited (NAB), in the General List of the Equity Division. The matter has not proceeded beyond what might be referred to, loosely, as the pleadings.

By notice of motion filed 4 July 2024, NAB seeks to have the proceedings transferred to the Common Law Division and entered in the Possession List. The plaintiffs oppose that course.

For the reasons which follow, the Court will grant that relief. In summary, this is because the Court accepts NAB’s submission that the overriding purpose under the Civil Procedure Act 2005 (NSW) in relation to these proceedings will be best served by judicial case management. That occurs as of course in the Possession List of the Common Law Division. Judicial case management is not the norm in the General list of the Equity Division.

The parties agreed that NAB’s motion should be determined on the papers. NAB’s submissions were prepared by Mr M Collins of Counsel. The plaintiffs’ submissions were prepared by Mr Malik.

I gratefully adopt Mr Collins’ summary of the history of the proceedings substantially reproduced in [6] to [9] which follow.

The plaintiffs filed a “statement of claim” on 27 October 2023 which was a document of some 188 pages containing affidavits, a form of statement of claim, and various other documents.

In accordance with orders made by consent, on 16 April 2024 the plaintiffs filed a 33-page “amended statement of claim” which included a form of pleading and a form of submission. The amended statement of claim has various significant deficiencies (which are apparent on its face) but, in the interests of progressing the matter and in the hope that the plaintiffs’ evidence would assist NAB to understand the claim in due course, NAB submits that it consented to orders that it file a defence. The following orders (among others) were made by the Equity Registrar on 18 April 2024:

On 24 May 2024 NAB filed and served a defence (doing, according to it, the best it could to respond to the amended statement of claim) and a cross-claim.

On 13 June 2024 the plaintiffs served:

On 4 July 2024, NAB filed its notice of motion in the Applications List seeking this relief:

The matter came before me in the Applications List on 19 July 2024. In accordance with the usual practice, Mr Collins’ written submissions were provided to the Court and the plaintiffs in advance of the directions hearing. Mr Malik provided a document in the form an affidavit dated 17 July 2024 opposing NAB’s application, but also stating that the plaintiffs had not had sufficient time to respond to Mr Collin’s submissions. On that occasion, the Court made these directions

In accordance with those directions, the plaintiffs filed further submissions in the form of an affidavit of Mr Malik attaching 20 pages of submissions.

By email on 6 August 2024, NAB informed my associate that it did not propose to file any submissions in reply to those of the plaintiffs and relied on its submissions in chief.

The plaintiffs’ claim apparently seeks relief in relation to certain loan agreements and mortgages between the plaintiffs and NAB. NAB’s cross-claim against the plaintiffs seeks possession of the mortgaged properties and judgment for the debt owing under various loan agreements. I accept Mr Collins’ submission that if NAB had moved first, its claim for possession would have had to have been filed in the possession list, by virtue of Uniform Civil Procedure Rules 2005 (NSW) r 45.4(1) which provides “proceedings in the Common Law Division of the Supreme Court in which a claim for possession is made are to be entered in the Possession List”.

The Court also accepts NAB’s submission that, with the greatest respect to the plaintiffs as litigants in person, the material served by them on 13 June 2024 (see [9] above) is incomprehensible. What exactly the plaintiffs complain about and the relief they seek in relation to their arrangements with NAB is, at least for lawyers trained to look for material facts and identifiable causes of action, very difficult to discern.

The overriding purpose requires the Court to engage its procedures to facilitate “the just, quick and cheap resolution of the real issues in the proceedings” (s 56(1) Civil Procedure Act). As matters presently stand and putting the matter neutrally, it is not apparent what the real issues are in the proceedings. Cases such as the present, involving litigants in person doing the best they can, are familiar to the Court. In many such cases, of which this is one by reason of the state of the “pleadings”, it is the experience of the Court that the overriding purpose can only be met by close judicial case management in the interests of both the unrepresented and represented parties.

The heart of NAB’s argument is that matters in the General List of the Equity Division are managed by a Registrar, who is subject to various delegations. To draw that to attention is not criticise or diminish the essential role Registrars play in the management of proceedings. Nevertheless, it is also the Court’s experience that cases that require intense case management, including where lengthy directions hearings may be required, can be very difficult to manage in a Registrar’s list and will necessarily take up a great deal of time, often to the inconvenience of other parties in the list with more straightforward matters. Such matters may also require bespoke and sometimes novel directions, including as to enforcing compliance with directions, which may be subject to doubt about whether they fall within a Registrar’s delegation.

Mr Collins’ submissions rightly, in my respectful view, draw to attention that the Possession List is a specialist list in which judicial case management is the norm. Given that fact, and the present state of the proceedings, it is very clear that the overriding purpose will be best achieved by the transfer of these proceedings to the Common Law Division and entry into the Possession List.

The submissions for the plaintiffs opposing the application for transfer identified what were set out as 52 reasons. With no disrespect intended, I note that there was a high degree of commonality between a number of the reasons. As I understand those reasons and the other material provided by the plaintiffs, the reasons advanced may, in my respectful view, be distilled into five propositions. I will next set these propositions out, together with why the Court rejects them.

Before doing so, a more general comment may be made. A number of the matters relied upon by the plaintiffs appear to be misunderstandings or misreadings of the Court’s practices. The plaintiffs’ submissions open with an example of this by drawing attention to practice note SC EQ 12 concerning the Real Property List, whereas these proceedings are in the General List. Having referred to the practice note, the plaintiffs, presumably in aid of their argument that matters should not be transferred from the Equity Division to the Possession List, assert that the practice note “specifies that proceedings in the Real Property List should not be transferred to the Possession List”. That, with respect, is not what it says. It appears that the plaintiffs have misread paragraph 4 of the practice note which provides that “Real Property Matters do not include proceedings in, or to be commenced in the Possession List in the Common Law Division”.

The first, and most pervasive contention throughout the plaintiffs’ submissions is that their case is a complex one which involves the application of advanced equitable principles. They submit by reference to what are said to be academic and legal precedents, that “proceedings started in the Equity Division are typically retained due to the specialised nature of equitable principles and remedies required to resolve such disputes justly and effectively “. They refer (reason 22) to “the specialised nature of the Equity Division with its dedicated List of Judges for various areas of law, ensures that the case is being handled by judges with the relevant expertise. This specialised knowledge is particularly beneficial given the complex financial and equitable matters at stake in this case”. Elsewhere (reason 29) and to like effect they submit that “ the Equity Division has specialised expertise in handling complex financial and equitable matters. The expertise is crucial for the just resolution of the real issues in dispute”.

In relation to those submissions, there is no doubt that these proceedings could be managed and heard in the General List of the Equity Division. However, the essential question is whether the Possession List of the Common Law Division is a more appropriate place for that to occur to achieve the overriding purpose. Judges in the Common Law Division hearing possession matters are well familiar with equitable claims being asserted by those resisting possession of their property.

Second, the plaintiffs assert in various parts of their submissions that “the proceedings are at an advanced stage”. While, for good reason, nine months have been taken up to get the proceedings to the stage they are at, that stage is not “advanced” relative to the ordinary conduct of litigation. In terms of the management of the matter, the proceedings are still in the pleadings stage, and it is the state of the “pleadings” that has made it apparent that judicial case management is required.

Third, the plaintiffs variously contend that transfer of the proceedings “at this stage” would cause them unfair prejudice as litigants in person. They submit that they have made efforts to come to understand the practice and procedures of the General List of the Equity Division. Thus, for example they submit (reasons 43 and 44):

The Court has no doubt that the familiarity which the plaintiffs have achieved with the Court’s procedures and their “substantial knowledge of UCPR regulations” will be just as useful to them if the matter is managed in the Possession List. Essential procedures and applicable rules are the same or substantially similar across the General Equity and Possession Lists, with such variations about which the Court is confident the plaintiffs will be able to familiarise themselves without difficulty. To the extent the Court can facilitate that, the Court will do so as part of its undoubted responsibility to ensure that the proceedings are conducted fairly to both parties and that each has an adequate opportunity to present its case. I therefore reject the submission that transferring the proceedings to the Common Law Division will put the plaintiffs at any additional disadvantage over and above that which is an inevitable incident of them being self represented litigants.

Fourth, they submit that the Possession List is designed for straightforward and uncomplicated matters, whereas theirs is complex. That, with respect, is to misunderstand the operation of the Possession List. It is intended to provide some procedural simplifications in straightforward matters, but practice note SC CL 6 for the Possession List expressly recognises that not every matter in that list will be straightforward. So much is apparent from paragraph 8 of the practice note (emphasis added):

Furthermore, judges hearing Possession List matters are very familiar with what may be a straightforward possession matter from a mortgagee’s point of view being met with complex equitable claims and defences being advanced by the party resisting possession.

Fifth, the plaintiffs submit the present application is a delaying tactic on the part of NAB, which they say clearly understands their claims. For example, in their concluding submissions, the plaintiffs say:

While the plaintiffs may take a different view about the clarity of their pleadings, having reviewed these and other materials filed by the plaintiffs, I accept NAB’s submission that it is very difficult, and in some places impossible, to discern what cause of action the plaintiffs are advancing and in aid of what relief.

The Court is well satisfied by reference to the state of the “pleadings” that, given NAB’s cross-claim for possession of the relevant properties, the overriding purpose and fairness to both parties would be better achieved by the proceedings having the advantage of the judicial case management which is a feature of the Possession List, but which is not the practice in the General List of the Equity Division. None of the reasons advanced by the plaintiffs are sufficient to displace that conclusion.

NAB’s motion seeks an order that the costs of its application be costs in the cause. The Court accepts that is the appropriate order in all the circumstances.

Accordingly, the orders of the Court are: