Lenders beware: inactive proceedings may now be dismissed with lack of notice

Pursuant to r12.8 Uniform Civil Procedure Rules 2005, the NSW Supreme Court has had power to dismiss proceedings following service of a notice on the parties, if they have been inactive for five months. 

The Court found that the number of inactive matters in the Possession List is quite extensive, as, for example, borrowers discharge the mortgage or rectify arrears. In an effort to clear out these proceedings, the Uniform Rules Committee has created an additional ground for the dismissal of proceedings in relation to Possession List matters.

The new rule, r12.8(7) UCPR, gives the Supreme Court the power to make an order to dismiss proceedings that have been in active for over nine months in the Possession List without requiring the parties to be notified. This means that in any proceedings in which there has been no action for nine months, they may be dismissed without the parties knowing.

Lenders are therefore no longer afforded the opportunity to appear before the Court and provide reasons as to why the proceedings are on foot. Lenders should take care that if they allow the borrowers a period of grace, or do not press the proceedings for a time whilst negotiations are taking place, they ensure this does not exceed nine months. The Court must see that steps have been taken in the proceedings so as to ensure they are not dismissed without notice to the parties. 

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