Provident Capital v Norton [2012] NSWSC 17

The loan went into default. The lender agreed to give the borrowers more time in return for the borrowers signing a consent judgement, which was to be held by the lender, pending any further default.

The loan again defaulted and, because the consent judgement was faulty, the lender sent a freshly drafted consent judgement to the borrowers to sign–via process server who was serving the statement of claim. The borrowers signed the freshly drafted consent judgement and it was entered and a writ issued.

The borrowers sought to set aside the judgement on the grounds that it was made “irregularly, illegally or against good faith” under UCPR 36.15(1).

They claimed the process server had told them they had 28 days to serve their defence and asked them to sign a receipt for the statement of claim. They had signed the consent judgement believing it to be a receipt.

The judge found that there had been no misrepresentation of the nature of the “Consent Judgment” by the process server and further commented:

I do not consider that lack of good faith or irregularity is established if, the process server did not inform the defendants that the document which was headed “Consent Judgment” was indeed a consent judgment. The document is a two-page document, its import is tolerably clear to anyone with a reasonable grasp of English. If the defendants chose not to read every word of the document before signing it, it was not because they were not given the opportunity to read it.

Further I do not consider that, there was anything untoward in the plaintiff using a process server to obtain the borrower’s signatures on a Consent Judgment document which was in almost identical form to one they had signed earlier, which was still held in escrow.

The judge found that he did not have to decide whether the conduct of the process server could be attributed to the plaintiff for the purposes because he had found that the process server did not act in any way that could be characterized as amounting to an illegality, irregularity or lack of good faith.

For the record the judge noted:

In arguing that the court should exercise its discretion under rule 36.16(2)(b) to set such orders aside, an applicant must contend with the proposition that great value attaches to certainty in the outcome of litigation.

Such power must be exercised with great caution, after weighing what might otherwise be irremediable injustice against the public interest in maintaining the finality of litigation.

The present is not a case in which an order was made by mistake or as a result of fraud, or a case in which by some accident an order has been made against a party who was not heard.

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