Lenders are often frustrated by the cost and length of time
taken to resolve possession proceedings where a defence has been
filed by the borrower.
In NSW, courts are required to implement rules in a way that
promotes the "just, quick and cheap" resolution of the
"real issues" in dispute in proceedings. To promote this
aim, the Supreme Court of NSW has recently put in place a new
regime for dealing with possession matters in which borrowers have
filed a defence.
The new procedures are designed to reduce the often significant
delays involved in the court process, particularly where a borrower
is self represented.
The most significant aspect of the new regime is that, once a
defence is filed, the matter will be listed before a judge for an
initial directions hearing.
What difference will this make?
The judge will examine each matter with a view to identifying
the best way to facilitate the just, quick and cheap resolution of
the real issues in the proceedings, including:
reviewing, sooner rather than later, the matters raised by the
parties, having particular regard to the borrower's defence and
if no reasonable defence is disclosed by the borrower, the
judge may strike out the defence on the spot, without the need for
a formal application to be filed
where a borrower indicates they wish to file a cross-claim, the
borrower will have to provide the court with a clear explanation as
to what steps have been taken in relation to the potential
cross-claim and how long it will take for the cross-claim to be
considering whether the matter is suitable for mediation. In
appropriate cases, the judge may refer the matter to court ordered
mediation straight away, before significant court costs and
interest are incurred.
How does this help lenders?
These changes ensure that any defended possession claim is
subjected to a comprehensive early "health check" by a
judge of the court.
The changes are unlikely to be a cure-all. However, they should
assist in weeding out spurious or misconceived defences or
cross-claims, which have often been filed only as a delay tactic at
an early stage.
We have already had a number of matters successfully resolved
under the new regime, by having spurious defences struck out,
without the need to incur the costs of preparing a formal
The new procedure will also facilitate prompt referral of
genuinely defended matters to a meditation forum, with the prospect
for an early negotiated resolution to matters. This is particularly
important in circumstances where mortgagees are facing a likely
significant shortfall following the sale of the security
t (02) 9931 4991
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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