Possession List in the Supreme Court

Acknowledgement: the following material has been prepared by the Honourable Justice D Davies of the Supreme Court of New South Wales.

The author gratefully acknowledges the assistance of the Honourable Justice Johnson, Registrar Christopher Bradford, Stephen Dodd and Jack Clifford.

[5-5000] Introduction

Prior to the enactment of the Supreme Court Act in 1970, a person not in actual possession of the land but who had an immediate right to obtain possession of the land, brought an action in ejectment. Supreme Court Act 1970, s 79 replaced the action of ejectment by providing that any person who might have brought such an action could commence proceedings and claim judgment for possession of land and claim such other relief as the matter of the case required. Civil Procedure Act 2005 s 20 is now the governing provision and it provides that a claim for judgment for possession of land takes the place of a claim in an action for ejectment that could have been brought under the practice of the Supreme Court as it was immediately before 1 July 1972, the date of commencement of the Supreme Court Act 1970.

There is a specialist list in the Common Law Division called the Possession List (UCPR r 45.1(1)) and proceedings in which a claim for possession of land is made are to be entered in the Possession List: r 45.4(1). However, that requirement does not apply to proceedings involving a professional negligence claim, being proceedings which have been entered in the Professional Negligence List: r 45.4(2).

Although the vast majority of claims for possession of land arise from mortgage transactions and defaults thereunder, other types of claim for possession of land regularly appear in the Possession List. These include claims by executors or administrators for possession of property forming part of the estate of a deceased and which is occupied by some other person, claims by trustees in bankruptcy in respect of property forming part of the estate of a bankrupt, claims by trustees for sale appointed under Conveyancing Act 1919, s 66G against one or both of the owners of the land (eg Rambaldi v Woodward [2012] NSWSC 434 at [45]: cf Van Oosterum v Van Oosterum [2011] NSWSC 663), and claims by councils for possession of land in the context of the exercise of a power of sale for unpaid rates: Harden Shire Council v Richardson [2012] NSWSC 622.

Because the vast majority of claims result from defaults under mortgages the practices and procedures of the court have been directed to these claims.

The Possession List was the largest specialist list in the court in 2017,[8] during which time 1,218 claims were filed. In 2018, 1,235 claims were filed. All Possession List cases are assumed to be uncontested at the time of filing, and the majority of claims were disposed either by default judgment for the plaintiff or by administrative dismissal when the plaintiff did not take further steps to progress its claim. Only 115 cases (approximately 10% of filings) were contested.

There is one significant group of claims in which possession is sought that may not be brought in the Supreme Court or indeed in the District Court or Local Court. Those are proceedings to recover possession of residential premises subject to a Residential Tenancy Agreement: Residential Tenancies Act 2010, s 119. It has been held that the similarly, but not identically, worded predecessor to this section (Residential Tenancies Act 1987, s 71) did not deny jurisdiction to the Supreme Court but merely provided tenants or former tenants a defence to such proceedings when commenced in the court: Whiteford v Commonwealth of Australia (1995) 38 NSWLR 100; Rossi v Alameddine [2010] NSWSC 967 at [42]–[44]. For example, by agreement of the parties, the Supreme Court has made declarations as to the continuance or termination of a Residential Tenancy Agreement where it was procedurally expedient to consider the issue in conjunction with the issue of unconscionable conduct under the Australian Consumer Law, with a view to parties entering consent orders in the Civil and Administrative Tribunal consistent with those declarations: see Aboriginal Housing Company Limited v Kaye-Engel (No 3) [2014] NSWSC 718; Aboriginal Housing Company Ltd v Kaye-Engel (No 7) [2015] NSWSC 1554 at [60]. However, s 81 of the Residential Tenancies Act 2010 has the result that no order terminating a residential tenancy, and thereby giving possession of the land, can be made by the Supreme Court.

The practice of the Possession List is regulated by Practice Note SC CL 6.

[5-5010] Commencement of proceedings

Proceedings claiming possession of land must be commenced by Statement of Claim: UCPR r 6.3(f). They are to be entered in the Possession List: r 45.4. The proceedings may be commenced either by filing a hard copy of the Statement of Claim at the registry or by e-filing.

The Practice Note enables a short form of Statement of Claim to be used where the claim for possession arises out of a loan. The short form of the Statement of Claim is Annexure 1 to the Practice Note and enables the material facts concerning the loan, the mortgage, the default and the consequent entitlement to possession to be pleaded in brief terms including the provision of particulars of default.

The originating process that is to be entered in the Possession List is to have a cover sheet in the approved form: r 6.8A. That cover sheet is Form 93 of the UCPR forms. It contains what is described as an “Important Notice” issued by the court in 17 different languages including English. The notice informs the recipient that he or she has 28 days from receipt of the originating process to file a defence and it provides information concerning where full legal advice may be obtained to assist the person.

If there is a person in occupation of the whole or any part of the land when proceedings are commenced, and that person is not joined as a defendant, the plaintiff must either state in the originating process that the plaintiff does not seek to disturb the occupier’s occupation of the land or must serve the originating process on the occupier together with a notice to the effect that the occupier may apply to the court to be added as a defendant. If the occupier does not do so within 10 days after service, the occupier may be evicted under a judgment entered in the occupier’s absence: r 6.8. The customary practice is for such a notice to be served whether or not it is known that anybody other than the defendant is in occupation of the land. For a discussion of this rule, see National Australia Bank Ltd v Nikolaidis [2011] NSWSC 506. It is also common for process servers serving the originating process to enquire when the defendant is served who else is in occupation of the land.

Regulation 36 of the National Consumer Credit Protection Regulations 2010 (Cth) requires possession proceedings to be brought in the jurisdiction where the mortgagor lives regardless of where the land is situated. The regulation permits application to be made to transfer the proceedings to a court of another State or Territory, presumably where the land is situated. If the proceedings remain in a court outside NSW, problems may arise at the time of enforcing any judgment which is registered in NSW, because of the need to serve occupiers of the land. Rule 36.8A (LW 5.4.2019) deals with this situation.

If no defence is filed within 28 days the plaintiff may move for default judgment by the filing of a Notice of Motion. Rules 16.3, 16.4 and 36.8 govern this procedure. In particular what must be included in the affidavit in support of the motion is set out in rr 16.4 and 36.8. Ordinarily default judgment is entered within three weeks of the filing of such Notice of Motion.

Applications to set aside a default judgment are usually dealt with by the Common Law Case Management (“CLCM”) Registrar. The CLCM Registrar has delegated power with respect to applications under r 36.16 but not under r 36.15. Although a defendant usually needs to point to an arguable defence in addition to providing an explanation for not acting to file a defence (Vacuum Oil Pty Ltd v Stockdale (1942) 42 SR (NSW) 239 at 244; Balanced Securities Ltd v Oberlechner [2007] NSWSC 80 at [19]) there may be circumstances, particularly involving irregularity or absence of good faith, where this will not be necessary: Commonwealth Bank of Australia v Wales [2012] NSWSC 407.

As Annexure 2 to the Practice Note makes clear, all matters in the Possession List are automatically entered into the Online Court and will be managed there in the absence of an order to the contrary. Matters concerning the Online Court appear in Annexure 2 to the Practice Note and also in Practice Note SC Gen 12.

[5-5020] Defended proceedings

Where a matter is defended, the procedures set out in the Practice Note will be followed. A directions hearing will be appointed before the CLCM Registrar. At that directions hearing the proceedings will ordinarily be referred to one of the judges who deal with case management of Possession List matters. This directions hearing before the judge is known as a Judicial Directions Hearing.

Paragraphs 18–20 of the Practice Note deal with the usual practice at a Judicial Directions Hearing. The principal purpose is for the judge to examine any defence and/or cross-claim which has been filed to ascertain if it discloses either a reasonable defence or a reasonable claim against the plaintiff or some other person. The judge has the power to strike out a pleading, whether or not a Notice of Motion has been filed by the plaintiff, but will ordinarily only do so in the absence of a motion in a clear case. In other cases it will be necessary for the plaintiff to file a motion to strike out and/or for summary judgment.

An example of a clear case is where the defendant is bankrupt. In such a case, any interest in the property is held by that person for the benefit of the official trustee, and the defendant has no standing in proceedings brought against them claiming possession of the property: NAB Ltd v Strik [2009] NSWSC 184; Scott v Wondal [2015] NSWSC 1577. The bankruptcy does not prevent the mortgagee obtaining an order for possession of the land including signing default judgment, but it does prevent obtaining a judgment for the debt owed: Hanshaw v NAB Ltd [2012] NSWCA 100; see also r 6.30.

Where a document purporting to be a defence is sought to be filed, but contains a fatal and obvious deficiency such as a complete absence of any pleaded or particularised defence, the appropriate course is for the officer in the registry to refuse to accept the document for filing. If it is accepted for filing the court may nonetheless subsequently refuse to accept it under r 4.10(4) with the effect that the document will not have been filed: Bendigo and Adelaide Bank Ltd v Chowdhury [2012] NSWSC 592 at [12]–[16].

If the judge determines that no defence to the claim is shown, the defendant is likely to be given one further opportunity to file a defence that properly discloses a defence to the claim, particularly if unrepresented. If such a defence is filed, the judge who conducted the Judicial Directions Hearing may continue to case manage the proceedings or may refer the proceedings back to the registrar to be managed.

At an appropriate time, the judge who is case managing the proceedings will give the parties leave to approach the listing manager to obtain a hearing date. If the proceedings are being managed by the registrar, the registrar will allocate a hearing date. The Practice Note provides that upon a hearing date being allocated, the usual order for hearing is deemed to be made unless the court otherwise orders. The usual order involves the filing of a court book containing the pleadings, evidence, objections to evidence, joint statement of issues and outline submissions.

The most commonly filed defences include reliance upon the following statutory provisions:

  • the Contracts Review Act 1980

  • the Australian Consumer Law s 18, Sch 2 to the Competition and Consumer Act 2010 (Cth) (formerly Trade Practices Act s 52 and Fair Trading Act s 42), for matters of misleading or deceptive conduct

  • the Australian Securities and Investments Commission Act 2001 (Cth) Pt 2 Div 2 for matters of unconscionable conduct in relation to financial services

  • the National Credit Code, Sch 1 to the National Consumer Credit Protection Act 2009 (formerly Uniform Consumer Credit Code, Sch 1 to the Consumer Credit (New South Wales) Act 1995)

  • the Farm Debt Mediation Act 1994, and

  • the Code of Banking Practice (2013).

In addition, general common law and equitable doctrines including unconscionability in equity, and principles derived from Commercial Bank of Australia v Amadio (1983) 151 CLR 447 and Yerkey v Jones (1939) 63 CLR 649 are often raised.

Significant recent cases discussing the Contracts Review Act 1980 include First Mortgage Managed Investments Pty Limited v Pittman [2014] NSWCA 110; Provident Capital Ltd v Papa [2013] NSWCA 36; and Knezevic v Perpetual Trustees Victoria Ltd & Anor [2013] NSWCA 199. Earlier decisions of note include: St George Bank Ltd v Trimarchi [2004] NSWCA 120; Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; Mizzi v Reliance Financial Services Pty Ltd [2007] NSWSC 37.

Reliance on the National Credit Code generally involves an assertion that a loan is subject to the provisions of that Code despite the borrower having signed a “business purpose declaration” (in the form prescribed by the National Consumer Credit Protection Regulations 2010, r 68): s 13(2). Such cases frequently involve an enquiry into the reasonableness of the lender’s knowledge or belief about the purpose of the loan in order to determine whether the declaration is ineffective: s 13(3). For a discussion about the issues that arise in such claims, see ANZ Banking Group Limited v Fink [2015] NSWSC 506. The National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth) means that decisions under the repealed Uniform Consumer Credit Code are likely to be relevant for some time notwithstanding the commencement of the new Commonwealth legislation: Perpetual Trustees Victoria Ltd v Monas [2010] NSWSC 1156.

The Farm Debt Mediation Act 1994 provides for mediation where a creditor seeks possession of a property under a farm mortgage and where there is a dispute, for instance, as to whether the farmer is in default, or whether the lender is entitled to rely on such default: Waller v Hargraves Secured Investments Ltd (2012) 245 CLR 311. For issues associated with the Farm Debt Mediation Act, see also Ciavarella v Hargraves Secured Investments Ltd [2016] NSWCA 304; Sharpe v Hargraves Secured Investments Ltd [2013] NSWCA 288; McMahon v Permanent Custodians Ltd [2013] NSWCA 275; and Roxo v Normandie Farm (Dairy) Pty Ltd [2012] NSWSC 765.

Because many lenders engage in what is called securitisation of loans made to borrowers, some defendants put forward a defence based on such securitisation to argue that the plaintiff is not the correct party to make the claim. However, where the plaintiff is the registered mortgagee and where no notice has been served under the Conveyancing Act 1919, s 12 such defence is liable to be struck out: Summerland Credit Union Ltd v Lamberton; Summerland Credit Union Ltd v Jonathan [2014] NSWSC 547 at [15]; Perpetual Trustees Victoria Ltd v Cox [2014] NSWCA 328 at [24]; Westpac Banking Corporation Ltd v Mason [2011] NSWSC 1241 at [27]–[30]; RHG Mortgage Corporation Ltd v Astolfi [2011] NSWSC 1526 at [13]–[18]; Hou v Westpac Banking Corporation Ltd [2015] VSCA 57 at [61]–[66]; Puglia v RHG Mortgage Corporation Ltd [2013] WASCA 143 at [9].

It is common for other parties to be added to defended proceedings. Where a mortgage broker has been involved in the obtaining of the loan, such broker will frequently be joined by the defendant as a cross-defendant in the proceedings. It is not uncommon for plaintiffs thereafter to amend their claim to name the mortgage broker as a defendant, or to bring a cross-claim themselves against the mortgage broker, claiming damages against them on the basis that the allegations made by the original defendant are made out.

Although a mortgage broker is ordinarily the agent of the borrower (Morlend Finance Corporation (Vic) Pty Ltd v Westendorp [1993] 2 VR 284 at 308; Fitzgerald v Watson [2011] NSWSC 736 at [25]), ANZ Banking Group Ltd v Bragg (No 3) [2017] NSWSC 208 at [47]–[51]; Perpetual Trustee Company Limited v Bowie [2015] NSWSC 328 at [38]) an issue often arises about whether the broker should instead be characterised as the agent of the lender: see, for example, Permanent Trustee Co Ltd v O’Donnell [2009] NSWSC 902. In Michalopoulos v Perpetual Trustees Victoria Ltd [2010] NSWSC 1450 (which was followed in Tran v Perpetual Trustees Victoria Ltd [2012] NSWSC 1560 at [43]–[44]), the court found (at [75]–[53]) that the broker was an agent of the lender due, in part, to their agreement under which the broker was required to provide all relevant information, including adverse information, about the borrower.

However, it was noted in Citigroup Pty Limited v Middling (No 4) [2015] NSWSC 221 at [70]–[79] that Michalopoulos may not be consistent with the more recent decision in Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389. In Tonto, it was held that a similar agreement between broker and lender did not give rise to an agency relationship, but that the fact of agency was not determinative as to the attribution of knowledge and responsibility under the CRA (at [255]–[267]). Ultimately, the language of any instrument executed by the parties is not determinative, and the true character of their relationship emerges from an examination of all the surrounding circumstances in each case: Tonto Home Loans Australia Pty Ltd v Tavares; FirstMac Ltd v Di Benedetto; FirstMac Ltd v O'Donnell [2011] NSWCA 389, especially at [182] and [194]; NAB Limited v Smith [2014] NSWSC 1605 at [253].

A mortgage broker who communicates to a lender or mortgage manager that it has a client who wants to borrow money and who has signed a loan application and associated documents will reasonably be understood to be representing the truth of those matters, and may have a liability for any misleading or deceptive conduct: Perpetual Trustee Co Ltd v Milanex Pty Ltd (in liq) [2011] NSWCA 367; Latol Pty Limited v Gersbeck [2015] NSWSC 1631 at [39]–[42].

In other cases the solicitor who acted for the borrower is joined. Although such a claim involves a professional negligence claim, the proceedings ordinarily remain in the Possession List to be case-managed in accordance with the Possession List Practice Note. For the limits on the duty of a solicitor to advise on the transaction, particularly in respect of the duty to advise borrowers to seek independent financial advice, see Citicorp Australia Ltd v O’Brien (1996) 40 NSWLR 398 at [418] and Dominic v Riz [2009] NSWCA 216; cf Provident Capital Ltd v Papa [2013] NSWCA 36 at [75]–[82], [120]–[122].

Where the loan in default was obtained by way of refinancing of an earlier loan, it is generally not appropriate that the earlier mortgagee be joined to the proceedings even if allegations are made against that mortgagee involving the unjustness of the earlier contract or unconscionability in the procuring of it: Bank of Western Australia v Tannous [2010] NSWSC 1319. However in respect of claims of subrogation, or restitution, made by an incoming mortgagee against an earlier one, courts have been prepared to join earlier mortgagees at an interlocutory stage pending a full determination of the issues at a final hearing, particularly in circumstances where such claims were novel in the context of possession proceedings: ANZ Banking Group Limited v Londish [2013] NSWSC 1423 at [102]; Trust Co Fiduciary Services Ltd v Hassarati (No 2) [2011] NSWSC 1396.

Where it is not alleged that the earlier loan was unjust it will ordinarily be the case that the defendant will be required to give credit for that part of the impugned loan which was used to pay out the earlier loan: Collier v Morlend Finance Corporation (1989) 6 BPR 92,462; [1989] ANZ ConvR 515. The application of this principle may have the result of depriving the defendant of any defence in circumstances where the principal sum advanced by the plaintiff was used to discharge a prior mortgage: Nibar Investments Pty Ltd v Manikad Pty Ltd [2014] NSWSC 920 at [12]-[16]; ANZ Banking Group Ltd v Fink [2013] NSWSC 1781. However, this is neither an unyielding rule nor an inevitable result: see National Australia Bank Ltd v Sayed [2011] NSWSC 1414 at [24]–[25]; First Mortgage Managed Investments Pty Limited v Pittman [2014] NSWCA 110 at [172]–[174]; St George Bank Ltd v Trimarchi [2004] NSWCA 120 at [24]–[25].

[5-5030] Writs of execution

Where judgment has been entered for possession of land, whether by default or otherwise, the plaintiff may apply for a writ to enforce the judgment of the court: CPA s 104. Such application must be made by Notice of Motion; see UCPR Form 59. Rules 39.1–39.3 deal with the procedure. In particular r 39.3(2) sets out what must be included in the affidavit in support. Notice must be given to tenants under the Residential Tenancies Act, s 122 and the Sheriff Act 2005, s 7A. Particularly because of the need to serve the notice to tenants, a writ will not ordinarily be executed by the sheriff in a time period of less than six weeks after it is received by the sheriff.

[5-5040] Stay applications

The court has power to stay any proceedings, including by prohibiting the sheriff from taking any further action on a writ of possession: CPA ss 67, 135(2)(b).

The Practice Note deals with such applications at paras 29 to 37. The registrar has a delegated power by virtue of CPA s 13 to grant a stay under s 135(2)(b). Ordinarily, the registrar will deal with stay applications based on a default judgment except where a stay has been previously granted or refused by a judge. In such cases, the application will be heard by the duty judge.

The most common circumstances in which a stay is sought by a defendant include:

  • where the defendant is attempting to refinance and to discharge the mortgage

  • where the defendant is attempting to sell the property

  • where the defendant asserts that an arguable defence to the proceedings exists and wishes to be let in to defend the proceedings

  • where a delay in the execution of the writ is sought on hardship grounds.

The Practice Note provides that in non-urgent applications to stay the execution of a writ of possession (where no time has been fixed for the sheriff to take possession of the property or such time has been fixed and that time is more than four working days from the time when the application is brought to stay the execution of the writ) the application should be brought by Notice of Motion and affidavit in support, and these should be served on the opposing party. Annexed to the affidavit should be any documents to be relied upon by the applicant such as:

  • where the loan is to be re-financed — proof of steps undertaken to refinance

  • where the subject property is to be sold — copies of agent sale agreements, contract for sale of property, advertisements, etc

  • where the proceedings are to be defended — a draft defence; and

  • where hardship is claimed — the facts and circumstances relied upon in this regard.

For a discussion of the relevant principles see in particular GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889 at [9]–[40]. A defendant applying for a stay ought to be in a position to explain his or her inaction prior to making the application: Smith at [12]. An important consideration will be whether the defendant has paid any monies to the plaintiff since default: Smith at [24]. A defendant can have no expectation of an extended stay on hardship grounds alone if it is inevitable that the plaintiff is otherwise entitled to obtain possession of the property: Smith at [22].

Where the application is a contested one it may be important for the mortgagee to lead evidence of the value of the property so that the equity margin and any likely shortfall on a sale can be ascertained if a stay is granted.

[5-5050] Assistance for debtors

The Financial Rights Legal Centre (formerly the Consumer Credit Legal Centre (NSW)) offers information and various services to consumers in financial stress (see https://financialrights.org.au) including relevant fact sheets, sample letters to lenders and a national debt helpline.

The Mortgage Stress Handbook is a helpful publication, the 3rd edition of which was published in 2014 by Legal Aid NSW and the Financial Rights Legal Centre. It provides practical assistance to defendants in Possession List matters on a range of issues, including available defences and the manner in which such defences may be pleaded and particularised.

Another source of assistance (referred to in the Important Notice contained in the Statement of Claim) is LawAccess NSW which is a Government telephone service providing legal information and, in some cases, referrals and advice.

Mortgage lenders known as Authorised Deposit-taking Institutions (ADIs) and institutions including banks, building societies and credit unions, are required as part of the Australian Financial Services Licensing System to be a member of an ASIC approved External Dispute Resolution Scheme. This is a scheme under the auspices of the Australian Financial Complaints Authority. It has taken over complaints formerly lodged with the Financial Ombudsman Service and the Credit & Investments Ombudsman Service.

A defendant may make application to this Authority provided that judgment has not been given against them. As part of the arrangement between the services and the Authority, the lender is not able to take any further step in the prosecution of the proceedings until there has been a resolution by the service of the debtor’s application. The practical effect of an application being made to the Authority is that proceedings will need to be adjourned for between three and six months so that a resolution of the application by the service can be made.

Legislation

  • Australian Securities and Investments Commission Act 2001 Pt 2 Div 2

  • Civil Procedure Act 2005 ss 13, 20, 67, 104, 135(2)(b)

  • Competition and Consumer Act 2010 (Cth) Sch 2

  • Contracts Review Act 1980

  • Conveyancing Act ss 12, 66G

  • Farm Debt Mediation Act 1994 (Cth)

  • National Consumer Credit Protection Act 2009 (Cth) and National Credit Code

  • National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth)

  • Residential Tenancies Act 2010 s 119, 122

  • Sheriff Act 2005 s 7A

  • UCPR rr 6.3(f), 6.8, 6.8A, 6.30, 16.3, 16.4, 36.8, 36.16, 39.1–39.3, 45.1(1), 45.4, Form 93

Practice Notes

  • Practice Note SC CL 6

Further references

  • Ritchie’s Uniform Civil Procedure, LexisNexis Butterworths, Australia, 2006

  • K Lane, The Mortgage Stress Handbook, Legal Aid NSW and the Financial Rights Legal Centre, 4th ed, Sydney, 2019



[8] Excluding the Equity General List and the Bails List.