Chandra v Perpetual Trustee Victoria [2006] NSWSC 1046

The owners of a property at Kingsford are presently seeking to have the full amount of the monies owed to the lender recovered from a solicitor. In April 2005 the solicitor received an email from a fraudster (claiming to be a friend of the property owners) asking for a new CT. The solicitor obtained a new CT and sent it to the fraudster who then took out a loan from the lender for $800k which was secured by a mortgage over the Kingsford property. This loan went into default. The property owners are seeking summary judgement against the solicitor on the basis he has no arguable defence.

The case of Graham v Hall [2006] NSWCA 208 gives the property owners a strong case against the solicitor for breach of duty as his conduct armed the fraudster with the CT which allowed him to register a mortgage against the property. However, Justice Brereton states that although the property owners have a strong case there is no evidence to support the belief that the solicitor has no defence. Therefore a case for summary judgement under regulation 13.1(1)(b) has not been made out.

The other basis for summary judgement is under s.61 of the Civil Procedure Act which allows a discretion by the court to make orders where a party fails to comply with directions. In exercising this discretion the court must act in accordance with the dictates of justice (s.58 CPA). Although reasonable opportunity does not mean multiple opportunities (Cohen v McWilliam (1995) 38 NSWLR 476) it is also the ultimate aim of the court to ensure justice and that aim is not surpassed by a principle of case management or efficiency in the procedures of the court (Qld v J L Holdings Pty Ltd (1997) 189 CLR 146).

Ultimately, Justice Brereton found that the degree of injustice that would be occasioned if the court granted summary judgement and the solicitor was denied a hearing on its merits was too great and even a weak case, particularly at the early stages of the matter, deserved a chance to be heard. Therefore the application for summary judgement was dismissed.

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