ING Bank Australia Ltd v Bucknell (No. 2)

The Plaintiff claims summary judgment for possession of land and for debt.

On 28 March 2014 the Defendants entered into a loan agreement with the Plaintiff to borrow the sum of $841,600 and as security for the loan they gave a mortgage over their land at 57 Jackey Drive, Camden Park. Under the loan agreement the sum borrowed was to be split into two loans. The first was a loan of $470,000 debited to account number 2681 8336. The balance of $371,600 was debited to account number 2681 8347.

The Defendants were to repay the amount of $470,000 by monthly instalments of $2,474.46 and were to repay the amount of $371,600 by monthly repayments of $1,956.40. The purpose of the loan was to assist the Defendants to purchase the property at 57 Jackey Drive, Camden Park. The loan appears to have settled on 23 May 2014.

In respect of account number 2681 8336 there do not appear to have been any repayments made after November 2014 until August 2015. In respect of account number 2681 8347 the Defendants first defaulted on 30 January 2015 when direct debits were returned, presumably because the funds were not available. Repayments were also returned in February and March 2015.

At some time during the first months of 2015 the Defendants lodged a dispute with the Financial Ombudsman Service. A written agreement was entered into on 12 May 2015. In substance, the agreement provided that the Defendants were to make monthly repayments of $1,000 for loan account number 2681 8336 on 14 August, 11 September and 9 October 2015. In respect of loan account number 2681 8347 they were to make minimum repayments of $875.74 on 13 stipulated dates between 22 May and 6 November 2015. The agreement provided that if they missed or only partially repaid any of those amounts the Bank would allow them seven days to repay the full amount. If they did not do that there would be a breach of the agreement and the Bank would continue with enforcement action. Further, the Bank would allow two instances of delayed or partial repayments due to extenuating circumstances but if there were more than two such occasions the Bank would cancel the arrangement and continue enforcement action. The Defendants agreed to repay all the arrears before 13 November 2015. If they did not do so the Bank would cancel the arrangement and resume enforcement action.

On 19 November 2015 the Bank sent a letter to the Defendants referring to the agreement of 12 May 2015. The letter went on to say that a condition of the agreement had been breached and the amount of $36,258.19 was due on 13 November 2015. That amount was required to be paid by 7 December 2015 and normal fortnightly repayments had to be maintained on both accounts. The amount was not paid and by 6 January 2016 repayments on both accounts were in arrears by $41,429.03.

On 7 January 2016 the Plaintiff served a notice under s 88 of the National Credit Code and s 57(2)(b) of the Real Property Act 1900 (NSW) together with a covering letter.

The Statement of Claim was filed on 6 April 2016. A Defence was filed on 16 June 2016 which admitted the loan and the mortgage but denied that the Defendants had defaulted under the mortgage. The Defence went on to plead that the Defendants had made attempts to invoke the financial hardship policies of the Plaintiff, that despite having knowledge about those hardships the Plaintiff commenced the proceedings and, accordingly, the Plaintiff was estopped from relying upon the written terms of the agreement and the mortgage.

In a judgment given on 29 July 2016 (ING Bank Australia Ltd v Bucknell [2016] NSWSC 1049) I struck out that Defence as not disclosing a defence to the claim. I noted that there was no proper pleading of an estoppel. The Defendants were given leave to file a further defence.

The Amended Defence continues to deny that the Defendants have defaulted under the mortgage. The Amended Defence then went on to plead as follows:

It can be seen that the Amended Defence purports to rely on an estoppel said to have arisen as a result of representations made first by the Bank in October 2014 and subsequently in May 2015. Although the Defendants did not abandon reliance on the first of those estoppels it appeared to be accepted that the matter had passed into history by virtue of what happened during 2015. Certainly no submissions were addressed to the events of 2014.

The Defendants relied on an affidavit of Ms Bucknell sworn 10 August 2016, the Second Defendant. Ms Bucknell said this in relation to the estoppel in 2015:

The Plaintiff submits that the Amended Defence does not disclose a defence to the claim because no estoppel is shown. The Plaintiff submits that the Defendants have no defence to the claim because the bank statements demonstrate other defaults unrelated to the capitalisation of arrears.

The Defendants submit that the authorities show that the case for summary judgment must be a very clear one. They submit that I would infer from Ms Bucknell’s statement that “There was no correspondence from the bank foreshadowing” the letter of demand from Gadens, that they did not receive the letter of 19 November 2015. They submit that they had acted to their detriment when Laura made the representation in May 2015. They were entitled to think that the change of mind spoken of by Jacob was not legally able to be done, and if there was any failure on their part it was a failure not to appreciate the urgency of the situation.

The principles concerning summary judgment are well known. The principal authority is General Steel Industries Inc v Commissioner for Railways (NSW) 1964 112 CLR 125 at 129. The criterion for satisfaction has been variously expressed as one where the defence is described as:

There is nothing in the evidence suggesting that what was allegedly said in October 2014 was not true nor that the Bank did not abide by that in any event. When the Defendant made a complaint to the Financial Ombudsman the bank came to an agreement with the Defendants set out in the letter of 12 May 2015. There is, in any event, no pleading that the Bank said other than that, if they were in arrears, they could seek to vary the strict terms of the mortgage. The pleading does not suggest that the Bank promised to do anything or represented that anything in particular would happen.

As far as the representation by Laura is concerned, the detriment pleaded is that the Defendants “did not take an opportunity to call on family and friends to help accumulate a stockpile of firewood in January 2016 so as to raise money to pay the arrears”. The detriment is, therefore, the failure to act in January 2016.

However, the Defendants’ evidence is that Jacob said in a telephone call, the date of which is not identified except that it must have been before Christmas (see paragraph 23) that the Defendants would be required to pay the arrears. Accordingly, before the time of any detriment the Defendants were on notice that the arrangement represented by Laura was changed. Further, the phone call with Jacob takes no account of the fact that the letter of 19 November 2015 had made clear that the arrears were to be paid, that is, they were not being capitalised. In the absence of a clear statement from the Defendants that they did not receive this letter (it was correctly addressed) I would not infer from the statement in paragraph 23, that there was no correspondence from the bank foreshadowing that demand, that they did not receive the letter of 19 November. That statement was made in the context of receipt of the letter of demand from Gadens in January 2016.

Even if the letter of November 2015 is ignored the Bank’s withdrawal from Laura’s representation occurred before the Defendants did anything which amounted to a detriment. In fact, the evidence shows that, notwithstanding they knew of the Bank’s change of mind and the fact that they could apply to the Financial Ombudsman to re-open the case, they did not do anything about organising their friends in the manner described.

No estoppel as pleaded arose.

There is a further matter. Clause 5 of the letter of 12 May 2015 says:

Despite the denial of any default, the Plaintiff’s evidence clearly establishes that there has been default. The Defence pleading an estoppel clearly indicates an acceptance of a default, as does the material contained in the affidavit of the Second Defendant sworn 28 July 2016 where she says that the Defendants are willing to pay the arrears owing to the Plaintiff but need a short time to do so. That is to be achieved by the sale of another property and the obtaining of the First Defendant’s superannuation.

I am satisfied that no defence is disclosed to the claim. The Plaintiff is entitled to judgment for possession of the land and for the amount claimed.

I make the following orders: