63 Buckley Street Pty Ltd v Keeron Nominees Pty Ltd
[2011] VSCA 289
•15 September 2011
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2011 0140
| 63 BUCKLEY STREET PTY LTD | |
| Appellant | |
| v | |
| KEERON NOMINEES PTY LTD | First Respondent |
| LIAD NOMINEES PTY LTD | Second Respondent |
| LOWEHAR NOMINEES PTY LTD | Third Respondent |
| HERMODS NOMINEES PTY LTD | Fourth Respondent |
| REGISTRAR OF TITLES FOR THE STATE OF VICTORIA | Fifth Respondent |
---
JUDGES: | MAXWELL P and ROBSON AJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 15 September 2011 | |
DATE OF JUDGMENT: | 15 September 2011 | |
MEDIUM NEUTRAL CITATION: | [2011] VSCA 289 | |
JUDGMENT APPEALED FROM: | Keeron Nominees Pty Ltd v 63 Buckley Street Pty Ltd (Unreported, Supreme Court of Victoria, Almond J, 14 September 2011) | |
---
PRACTICE AND PROCEDURE – Appeal – Stay pending appeal – Application for stay of orders that caveats be removed – Respondent mortgagees’ sale of land scheduled to settle – Whether success on appeal rendered nugatory – Whether arguable grounds of appeal – Whether special circumstances – Application refused.
---
| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr M A Strang | Melbourne Legal Partners Pty Ltd |
| For the First to Fourth Respondents | Mr M G R Gronow | Aaron Zaitman & Associates |
| For the Fifth Respondent | No appearance |
MAXWELL P:
This is an application for a stay of orders made by Almond J on 14 September 2011. His Honour ordered that caveats lodged by the first defendant in the proceeding, 63 Buckley Street Pty Ltd, with respect to certain certificates of title, be removed. His Honour gave reasons ex tempore for those orders[1] and those reasons in unrevised form have been made available to the Court and, in the course of argument, to the parties.
[1]Keeron Nominees Pty Ltd v 63 Buckley Street Pty Ltd (Unreported, Supreme Court of Victoria, Almond J, 14 September 2011).
The stay application is made by the first defendant in the proceeding below, it having lodged a notice of appeal dated today against his Honour's decision.
The background to the application is set out in his Honour’s reasons, as follows:
On 4 September 2009, 23 Developments Pty Ltd became the registered proprietor of property at 59 to 67 Buckley Street, Seddon. The property comprises seven individual titles but I will refer to it as the property.
On 4 September 2009 (the same day) the company granted a first registered mortgage to the plaintiff companies as security for a loan advance of $800,000.
Approximately five months later on 25 February 2010, the first defendant, 63 Buckley Street Pty Ltd, lodged two caveats on title.
On 9 February 2011 the loan advance secured by the first mortgage fell due for repayment to the plaintiffs but the mortgagor failed to pay it.
On 22 March 2011 the plaintiff served notice to pay on the mortgagor but the company failed to make payment.
On 24 May 2011 the plaintiffs appointed DBR Property Services Pty Ltd as agents to conduct a mortgagee sale of the property.
On 15 June 2011 the plaintiff mortgagees entered into a contract of sale with Asana Investments Pty Ltd for a sale price of $1.35 million with settlement due on 15 September 2011.
On 5 August 2011 the plaintiffs’ solicitor by letter requested removal of the caveats lodged by 63 Buckley Street Pty Ltd.
The first defendant declined to remove the caveats. As a consequence, this proceeding was commenced against 63 Buckley Street and the Registrar of Titles pursuant to s 90(3) of the Transfer of Land Act 1958 (‘the Act’).[2]
[2]Keeron Nominees Pty Ltd v 63 Buckley Street Pty Ltd (Unreported, Supreme Court of Victoria, Almond J, 14 September 2011) [1]–[9].
It is well established that this Court has power to stay a judgment of a trial court pending the hearing and determination of an appeal, but that power is to be exercised only in exceptional circumstances, since ordinarily the successful party should enjoy the fruits of its success.
In this case, the plaintiffs are the first mortgagees of the property in question and have priority over any other secured creditor (and over the beneficial owner) in relation to the proceeds of sale of the mortgaged property. They entered into a contract of sale with an arm’s length purchaser and the sale, we are told, is scheduled for imminent completion.
The first defendant lodged caveats to give notice of what its counsel says is an interest in the land. That interest has been characterised in various ways: first, on the basis that the company is an equitable chargee; secondly, that it has a fee simple interest as joint venturer with the named mortgagor; and, thirdly, that the company has a vendor’s lien which gives it an interest in the property. (This last argument was raised for the first time on this application.)
The first defendant has made submissions directed at aspects of the conduct of the mortgagees which, it says, throw into question the whole mortgagee sale process. First, it is said, a notice required by s 76(1) of the Transfer of Land Act 1958 (Vic) was not given to the company, such that the power of sale has not yet been triggered. Alternatively, it is said, the sale price, of which the applicant became aware not later than 24 August 2011, shows that the mortgagees are improperly selling the property at a substantial undervalue.
It is common ground that, if the applicant company has a caveatable interest as it asserts it has, it would have standing to commence proceedings and seek an injunction to prevent a sale going ahead which would prejudice that interest. It would, of course, need to establish that there was an arguable impropriety – or illegality in the s 76 sense – in the proposed sale, and it would be obliged to give appropriate undertakings and make a payment into Court.
Conspicuously, the applicant company has not sought to do any of those things. Instead, it has elected to wait, having had notice of the sale and of the sale price, for what was an inevitable application by the mortgagee to remove the company’s caveats. That application having succeeded, the applicant company now seeks, in effect, to prevent the sale going ahead by appealing against the order for removal of the caveats.
It seems to me that this is an example of what DoddsStreeton JA referred to in Maher v Commonwealth Bank of Australia.[3] Here, as there, the applicant has not instituted a proceeding in which it seek orders enjoining the sale of the land. Here, as there, ‘such relief should not be sought obliquely in the context of an appeal against an order for the removal of the caveats.’[4] That, it seems to me, counts heavily against any exercise of discretion to stay the judgment.
[3][2008] VSCA 122.
[4]Ibid [66].
Secondly, I am not persuaded that there is any reason to doubt the correctness of his Honour’s decision on the application to remove the caveats. It is common ground that his Honour applied the orthodox approach on such an application, as set out in the authorities and in particular in the judgment of Warren CJ in Piroshenko v Grojsman.[5]
[5][2010] VSC 240, [7]–[9].
The applicant is concerned that it will suffer loss if the sale goes ahead in accordance with the contract already entered into. That is a claim which will sound in damages. His Honour correctly concluded that damages would be an adequate remedy.
Mr Strang has properly conceded that, on its own case, the applicant has now, as it has always had, a basis for the institution of proceedings, first for injunction and, if that failed, for damages in respect of the sale. That seems to me to remove the critical element which an application of this kind requires, that is, the ability to show that the refusal of the stay would render the appeal nugatory.
Finally, the undoubted priority which the plaintiffs have reinforces the conclusion which his Honour arrived at, that is to say, that the caveats were properly removed and that the sale should go ahead. There is no basis in anything that has been said to suggest that the mortgagees’ right to realise their security and recoup the moneys lent should be impeached or prejudiced.
For those reasons I would refuse the application for a stay.
ROBSON AJA:
I agree. I seek to briefly add, if I may, that in my view Almond J’s decision and reasons, which I have had the benefit of reading, were correct.
Mr Strang conceded that the interests claimed by his client did not take priority over the registered mortgage. Mr Gronow, in his submissions, elaborated on that issue and fleshed out the reasons why Mr Strang’s client’s claim did not have priority.
Mr Strang’s basis for resisting an order for the removal of the caveats was that the mortgagee was not entitled to use its power of sale because it had not given the appropriate notice under s 76(1) of the Transfer of Land Act 1958 (Vic). His Honour accepted that may be an arguable ground. Nothing I say should be taken as giving any concluded view about the construction of that section.
The learned trial judge next dealt with the issue of the balance of convenience. In essence he found that the balance of convenience favoured removing the caveats. He addressed the collusion allegations made by Mr Strang’s client. He went through them very carefully and found there was no basis to them.
The reason why I mention these matters is that I would not like the parties to form the view that the Court is taking a technical point that a writ has not been issued and that if a writ had been issued the Court may have done something different to that which it now does.
I agree with the President that the proper course may have been, if Mr Strang’s client believed it did have a cause of action, to commence proceedings. On the facts that are before us, however, and as found by Almond J, there was no basis for Almond J to restrain the removal of the caveats.
I agree with the President, that the application for leave to appeal should be dismissed.
MAXWELL P:
The order of the Court is: application refused with costs.
‑ ‑ ‑
3
2
0