Australia & New Zealand Banking Group Ltd v Hubner & Hubner [1998] QSC 120

IN THE SUPREME COURT OF QUEENSLAND CAIRNS Writ No. 331 of 1997 BETWEEN: AND: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522) COLIN RICHARD HUBNER and YVONNE HUBNER REASQNS FOR JUDGMENT BEFORE THE HONOURABLE JUSTICE JONES DELIVERED THE J~~DAYOF M~ 1998 Plaintiff Defendant By this application the defendants seek for the second time to have set aside the default judgment for the recovery of land entered against them by Australia and New Zealand Banking Group Limited ("ANZ") on 19 June, 1997. On 15 September, 1997 Byrne J. dismissed the defendants' first application to set aside the judgment on the basis that they had shown no defence on the merits. The basis of this application is that the judgment was irregularly entered and should now, ex debito justitiae, be set aside. Mr. Hack, who appeared on behalf of ANZ, conceded that if I did find such an irregularity then I should set the judgment aside. He argued however that there was no such irregularity. -- 1 of 7 -- 2 The defendants were not legally represented. Mr. Hubner appeared in person on behalf of himself and his wife. The judgment was entered by the Registrar in Townsville pursuant to 0.31 r.7 of the Rules of the Supreme Court. The application was supported by an affidavit sworn by Julie Anita Bligh to the effect that the defendants had entered an appearance on 30 May, 1997; that no defence had been delivered to the plaintiffs solicitors or to their town agents; and that no extension of time for the delivery of the defence had been ordered or agreed. A certificate by Paul Stirling was also filed to the effect that the action was not one to which 0.6 r.llB applied. This certification is a pre-requisite to the entry of final jUdgment pursuant to 0.31 r.7. For convenience I set out the terms of this rule:- "7. In an action for the recovery of land, if any defendant does not, within the time allowed for that purpose, deliver a defence, the plaintiff may enter final jUdgment that the person whose title is asserted in the writ of summons shall as against the defe1J.dant recover possession of the land, with the plaintiffs costs of the action, upon the production of a certificate by the solicitor for the plaintiff or, in the case of a plaintiff in person, of an affidavit that the action is not one to which 0.6, r.llB applies." The substance of the defendants' application to have the judgment set aside is that the certificate of the solicitor, Paul Stirling, was false, that the contents of the affidavit of Julie Anita Bligh were incorrect and further that the Registrar was not competent to enter final judgment. I set out the terms of the relevant paragraphs of Mr. Hubner's affidavit filed in support of this application in full:- "5. The ANZ Banking Group swore falsely that they were not a mortgagee seeking possession under 0.6 r.llB of the Supreme Court Rules and s.7 of The Property Law Act 1974 but were an owner seeking recovery of possession under 0.6 r.7 under s.8 of the Property Law Act 1974 in a certificate by Paul Stirling forged and uttered to the Supreme Court of Queensland to obtain a default judgment from the Registrar in Townsville. The ANZ Bank denied the right of a registered proprietor -- 2 of 7 -- 3 under the Land Title Act 1994 (s.78) to peaceful possession and the bailiff on their behalf did trespass upon a false and forged default judgment and is denied all protection under the Property Law Act 1974 s.152. 6. This procedure is not available to a mortgagee seeking possession once an entry of appearance is entered under 0.15 r.8 and Julie Anita Bligh has sworn that an appearance was entered and the record shows that a defence denying the bank's claim was lodged with the court in an affidavit. A registrar is not a court of competent jurisdiction once an entry of appearance is entered to a writ by a mortgagee seeking possession. The writ must be endorsed under 0.6 r.llB and any false pretence to the contrary is a fraud." To understand the substance of the allegations and to test their accuracy it is necessary to consider the history of this proceeding. The writ was issued at Townsville on 9 April, 1997. It was specially endorsed with the statement of claim and sought the following relief:- "The plaintiffs claim is for the recovery of possession of land as mortgagee pur~uant to the s.78 of the Land Title Act 1974 and pursuant to the terms and conditions of a registered Bill of Mortgage No. 601556115(T7039) dated the 29th Day of July, 1981 ("the mortgage") made between the plaintiff and the defendants in respect of all that piece of land described as Lot 1, on Registered Plan No. 701366 in the County of Nares, Parish of Cairns, being the whole of the land referred to in Certificate of Title Reference 20502198 and situated at 333 Draper Street, Cairns in the State of Queensland ("the land"), the defendants having defaulted in the payment of principal and interest under the terms ofthe mortgage and possession having been demanded". On 30 April the defendants entered a conditional appearance. Then followed the issue of a judgment summons returnable on 26 May, 1997 at Cairns. The summons was adjourned to 30 May, 1997 by which date the defendants had themselves issued a summons seeking the following relief:- " 1. The dismissal of the judgment summons 2. An account to be taken of the mortgage transactions. 3. Leave to amend their defence. -- 3 of 7 -- 4 4. Leave to issue a third party notice." On the 30 May, 1997 at Cairns, the matter came on before Byrne J. who dismissed the judgment summons and set aside the defendants' conditional appearance. It seems no order was made in respect of any of the matters raised in the defendants' summons. This is not surprising since, in respect of the first of the two items referred to in the summons, no orders were appropriate and the latter two would only make sense if a defence had, in fact, been delivered. The respective affidavits of Mr. and Mrs. Hubner in support of that summons make no reference to pleadings and, in particular, no reference to any defence. Following this hearing, the defendants on the same day filed an unconditional entry of appearance at the Cairns registry. The next significant date is 19 June, 1997 on which date the defendant filed the certificate of Paul Stirling and two identical affidavits of Julie Anita Bligh at the Townsville registry. The Registrar on an ex parte application thereupon entered the judgment in default of the pleading pursuant to 0.31 r. 7. It is apparent that no notice was given to the defendants that this step was to be taken notwithstanding ANZ's knowledge that the defendants had every intention of defending the action. In paragraph 6 of his affidavit relied on in this application, Mr. Hubner states "the record shows that a defence denying the bank's claim was lodged with the court in an affidavit". Since there is no evidence of any formal defence having been delivered, I take those words as a reference to the allegations set out in the affidavit filed in support of the summons heard on 30 May, 1997. The defendants not being legally represented may not have been aware of what -- 4 of 7 -- 5 constituted a pleading and how a pleading is to be delivered. The ANZ however was aware from earlier correspondence and documents of the nature of the claim the defendants wished to raise. In those circumstances the process of entering final judgment in default of pleading without any notice to the defendants might be seen as working harshly against them. But that does not mean the judgment entered in accordance with the rules was irregular. The Rules do not require notice to be given. As was pointed out in Ezi-Frame Pty.Ltd. -y- AI-Cote (Australia) Pty.Ltd.., 1982 Qd.R 602 @ p.611 "There is in the profession a matter of courtesy, to put it at its lowest, by which a solicitor, when he knows there is a solicitor representing the defendant, does not enter judgment in default without acquainting that solicitor of his intention." That professional courtesy does not impose any obligation on a party and its non-observance by an opponent does no more than offer an explanation why a pleading was not delivered. The defendants have not pointed to any conduct on the part of ANZ following the entry of their unconditional appearance which might have caused them to be misled or which otherwise may have caused a failure of natural justice. In fact, my perusal of the transcript of the proceedings before Byrne 1. showed that he was at pains to warn the defendants of the dangers of non-compliance with the rules. The defendants' lack of awareness of the process of entering judgment in default of pleading explains how the judgment came to be entered but, without more, does not provide a basis for alleging it was irregular. See Mars~Y~_Marsh 1945 A.C. 271 and Australian MusicaLDistributors_Pty.Ltd. -v~ Whebell 1969 QWN 40. The second alleged irregularity relates to the certificate of Paul Stirling. The -- 5 of 7 -- 6 defendants allege that this document was false insofar as it certified "that this action is not one to which 0.6 r.llB applies". The allegations stem, it seems, from the defendants' misunderstanding of the Rules and of the fact that ANZ sought its relief under 0.6 r.7 claiming "recovery of possession of land" and not under 0.6 r.11 claiming "as mortgagee for the delivery of the possession ofland". The distinction between the two forms of relief and in particular, a mortgagee's right to seek "recovery of possession of land" has been discussed in a number of cases which were cited to me by Mr. Hack on behalf of the ANZ Bank - B.anIufNew South Wales -y- Crow 1979 Qd.R 222, Metropolitan Permanent Buildin~~ 1983 Qd.R 160 and Suncorp Building Society -y- Chen (1987) 2 Qd.R 113. It is now settled that a mortgagee may seek recovery of land by specially endorsed writ pursuant to 0.6 r.7 and thereafter obtain default judgment without reference to 0.6 r.l1B other than the certification that the latter rule does not apply. See per McPherson J. (as he then was) in Metropolitan Permanent Buildingj'ociety -y- McClymont (supra) at p.167 as follows:- "Logically, however, there may now be no escape from the conclusion that in any case in which the mortgagee choses, in reliance on s.60 of the Real Property Act, to endorse his writ with a claim for recovery (not delivery) of land, he will be entitled to judgment in default without reference to 0.6, r.l1B. In these circumstances it is perhaps not likely that delivery of possession will continue to be claimed unless some question of taking accounts or a foreclosure is likely to arise; or perhaps where possession is claimed for reasons other than those referred to in s.60; or again perhaps where the premises are occupied by some person who does not claim to derive title through the mortgagor in the sense of having an equity of redemption, in which event the order for delivery can pursuant to 0.6, r.11 and 0.19, r.4 be made against that person." The latter decision of SuncorpBuilding Society:-y~_Chen (supra) confirmed that in its present formulation 0.6 r.7 simply provides that a writ of summons may be specially -- 6 of 7 -- 7 endorsed in an action in which a mortgagee seeks to recover possession of land. That is the situation here when ANZ instituted its proceedings, it chose the remedy provided by 0.6 r.7 rather than the remedy provided by 0.6 r.ll. The defendants' arguments to set aside the judgments on the basis that there was an irregularity are based on the defendants' misconception as to the relief sought by the ANZ in those proceedings. In the end result I find that no defence was ever delivered and as a consequence the defendants' allegation that Julie Anita Bligh swore a false affidavit is plainly incorrect. The certificate of Paul Stirling was indeed accurate and it watnecessary document for the purpose of entering judgment in compliance with 0.31 r.7. No irregularity in terms of non- compliance with the rules has been demonstrated upon which the judgment can be set aside. Nor has there been any failure of natural justice for the reason mentioned above, noting also the fact that the merits of the defence which the defendants wish to raise were fully considered by Byrne J. in his determination of the defendants' application to set the judgment aside. No appeal was lodged against that decision. A d· 1 h d': d ' l' . . d' . d . h h thor h ccor mg y, t e elen ants app IcatlOn IS IsmIsse WIt t e consequence r. t e judgment remains as do all orders and proceedings based upon it. I order that the defendants pay the respondent's costs of and incidental to this application to be taxed. ,aG.~ONES, J~ -- 7 of 7 --