Westpac v Corry [2011] NSWSC 1014

The bank sought possession of property mortgaged to the bank by the borrowers and summary judgement. The borrower’s defence was struck out and in their cross-claim, claimed misleading and deceptive conduct and unconscionable conduct under section 52 and 51AC of the Trade Practices Act 1974 (Cth) respectively. Their claim alleges that the bank manager represented to them not to sell their properties and that finance would be forthcoming, whereas had they sold and finance been given, they would not be in their current position. The borrowers sought leave to file an amended defence of parallel claims to those in the cross-claim. The bank sought to have the cross-claim struck out.

The Law
A very clear case is required before summary judgment under Rule 13.1 UCPR is granted and the power should be used sparingly. The court found there was no arguable defence to the claim for possession because a problem with their proposed defence is that they seek to attach a mortgage entered into in 2003 in reliance upon representations made in and after 2006, not at the time of entry into the mortgage. Further a cross-claim or set off is not a defence to a claim for possession.

The stringent test for summary judgment extends to an application for summary dismissal under Rule 13.4 UCPR. The court found that the cross-claim was not so flawed as to warrant summary dismissal or strike out under Rule 14.28 UCPR and it was up to the borrowers whether they wished to press a damages claim.

The court granted summary judgement but stayed the execution of the writ of possession of the house for a period yet to be determined to enable the other vacant properties, not the house, to be sold first to see if that was sufficient to discharge the indebtedness. The bank’s figures indicated that there would be a shortfall even if all properties were sold.

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