NAB v Priestley [2012] NSWSC 387

In his original defence, the borrower made various unsupported allegations that the bank had acted unconscionably to ensure they had no equity in the secured property. This defence was struck out. The borrower then sought leave to file an amended defence which the bank opposed as also liable to be struck out. The amended defence alleged that certain oral terms were implied into the agreement as a result of the bank’s oral representations, that the borrower suffered a special disadvantage and the bank breached its fiduciary duty to the borrower.

The Uniform Civil Procedure Rules 2005 require that pleadings contain only material facts, not evidence (Rule 14.7). When documents or spoken words are referred to in pleadings, the effect of the document or spoken words must, so far as material, be stated (Rule 14.9). The defence must specifically plead any matter which, if not pleaded, would take the opposite party by surprise (Rule 14.14). It is well settled that a court will not allow an amendment if it is so obviously futile, that it would be liable to be struck out if it had appeared in the original pleading.

The court found the amended defence deficient. The precise manner in which the borrower claimed the implied terms came into existence, and how they were breached was not pleaded. No particulars were provided of the borrower’s alleged special disadvantage of which the bank was aware. Nor were there particulars provided of the basis upon which it was claimed that the Bank had a fiduciary duty, or how such a duty had been breached.

Given the inadequacies of the proposed amended defence, the court refused leave to file the amended defence. Nevertheless, the court considered that justice required that the borrower must have a final opportunity to properly plead their defence within a further 2 week timeframe.

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