NAB v Darroch [2010] NSWSC 1202

The lender sought to strike out a defence and cross-claim filed by a bankrupt borrower and obtain default judgement for possession of the security. The judge ruled:

The borrower has become divested by reason of her bankruptcy of both her interest in the property and the liability for her provable debts. As a bankrupt she has no right to bring or to prosecute proceedings to protect, enhance or add to the value of the property of which she has been divested.

The judge noted that the borrower’s claims that annulment of the bankruptcy was imminent was unlikely given the amount owing under the mortgage (on the personal promises to repay) was a provable debt.  Accordingly, the defence was struck out and judgment entered.

Click here to read the full judgment

Scroll to Top