Birch v NAB [2014] NSWSC 949

The lender sought possession of a golf course. One of the owners filed a defence in the form of a statement of claim. The other owner was bankrupt. The owners had agreed to develop the property and gave guarantees to secure a development loan, limited to the sale of the property. So the bank was precluded from recovering any shortfall against the owners. When development approval was not gained, the bank agreed to a temporary forbearance to enable a refinancing and the owners agreed that the bank was entitled to possession. Refinancing did not occur and the owners alleged that the mortgage, the guarantee and the deed of forbearance were unjust. The bank was granted possession and the owner obtained a temporary stay. No evidence was filed by the owner’s to support his claim and numerous adjournments took place. The temporary stay was dissolved by the court.

The court found no defence to the bank’s claim. The court found the owner’s claim embarrassing, incomprehensible and ordered it to be struck out.

The court noted:

The only reasonably available inference is that the guarantor is prepared to make allegations in filed and draft pleadings irrespective of their truth in circumstances where he is not prepared to adduce any evidence in response to the NAB’s evidence.. NAB’s right to recover the outstanding debt from the [guarantor] is limited to the value of the property. The debt substantially exceeds the value of the property. Any delay is accordingly prejudicial to the NAB and to the guarantor’s advantage… In my view, the guarantor has endeavoured to manipulate the court’s processes to the detriment of NAB, the receivers and the administration of justice. He has engaged legal practitioners and dispensed with their services to his advantage in seeking adjournments and deferrals. He has sought to portray himself as ingenuous, when his conduct of the proceedings has demonstrated that this is manifestly not the case.

The court granted the bank possession and dismissed the guarantor’s claim as vexatious and an abuse of process.

Click here to read the full judgment

Scroll to Top