Anderson v Liddell

[1968] HCA 12

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan and Kitto JJ.

ANDERSON v. LIDDELL

(1968) 117 CLR 36

15 March 1968

Execution

Execution—Writ of fieri facias—Sale of land—Sale by public auction—Duties powers and liabilities of sheriff—Fair price—Writ of venditioni exponas—Setting aside of sale—The Common Law Process Acts, 1867 to 1960 (Q.), ss. 57* 59**—The Real Property Act of 1877 (Q.), s. 35.

Decisions

March 15.
The following written judgments were delivered:-
BARWICK C.J. The questions for decision in this matter arise out of the exercise by the Sheriff of Queensland of a power to sell land under a writ of fieri facias for the purpose of raising the amount of a judgment debt. (at p39)

2. The appellant was the judgment debtor and the registered proprietor of the land in question, being a block of some two acres upon which is erected a modern home constructed out of fibro and wood with some brick. The land is located in a lightly settled suburban area in Kirkdale Road, Chapel Hill, Brisbane. There was a registered mortgage over the land to Darling Downs Building Society which at the date of the sheriff's sale secured the sum of $7,958.41 plus daily interest of $1.89 from 31st May 1966. (at p39)

3. The judgment creditor, Brian Flynn Pty. Ltd., issued the writ of fieri facias on 13th May 1966, founding it on a judgment for the amount of $3,080.34 and $48.50 for costs. The amount of the levy under the writ was the sum of $3,080.34 and interest thereon at five per cent per annum from 9th May 1966, $48.50 and interest thereon at the same rate from the same date and $6.30 for costs of execution. On the day following the issue of the writ, a bailiff in whose name the warrant consequent upon the writ had been issued went to the property and there spoke to a woman but was unable thus or in any other fashion to establish the whereabouts of the judgment debtor. The judgment debtor was in fact at the time in the Territory of Papua-New Guinea with the apparent aim of avoiding his creditors. He was still there at the time of the subsequent sale of the land by the sheriff. (at p40)

4. Upon the instructions of the sheriff, the bailiff fixed a sign to a tree on the property announcing that the property was to be sold by public auction "at the Supreme Court Wednesday, July 6th 1966, 12 noon". Advertisements to the like effect were placed in the Queensland Government Gazette and in the Telegraph newspaper circulating in Brisbane. The learned trial judge found, and counsel for the appellant conceded before us the propriety of his finding, that the advertisements complied with the statutory requirements for advertising of a sale by the sheriff under a writ of fieri facias; indeed, the publicity given to the sale went further for there was no statutory requirement to post a notice of sale on the property. It had been argued at first instance that the address given, namely, "The Supreme Court", was not adequate to enable intending bidders to attend the sale, but the trial judge held as a matter of fact in relation to this submission that "any genuine bidder would have had no difficulty in presenting himself at the sale". (at p40)

5. Some time before the events in question, the male respondent Liddell had sold his house and had approached an agent asking him to advise him of any suitable homes available for purchase of which he might hear. On 16th June, some seven days after the notice of sale had been placed upon the property, that respondent received a telephone call from the agent advising him that "a home had been listed with him which he thought was suitable". This proved to be the property in question. Both respondents Liddell went with the agent to inspect the property, and the male respondent went himself on two further occasions. He then instructed the agent to make an offer of $24,500. This offer was subject to a number of conditions described in the evidence as follows: "One, that subject to the normal finance clause which would be normal in sales of that nature; two, that the vendor was in a position to sign the contract and the memorandum of transfer, and give possession; and three, subject to a reply being received within seven days - a written reply within seven days." The absence of the appellant from continental Australia meant that this offer could not be accepted. (at p40)

6. The respondents who during inspection of the property had observed the notice of sale exhibited on the land, were determined to attend at the appointed time and to bid at the auction for the property. For that purpose an attempt to secure sufficient finance was made, the respondents realizing no doubt that they must provide the sheriff with the purchase price in cash should they be the successful bidder. On the morning of the auction they had at their disposal only a little more than $16,500 in cash. (at p41)

7. There was a great deal of evidence before the primary judge as to what took place at the auction, with some disputes as to part of it, particularly as to whether the door to the room where the auction was held was open or not. However, on appeal to this Court, the trial judge's findings were accepted by both counsel. So the position can be briefly stated. (at p41)

8. Shortly before twelve noon the sheriff came to the door of his office and inquired if those outside were waiting for the auction. On receiving their affirmative reply he invited them inside. The door of that office remained open throughout. Those present were the sheriff, the bailiff, who was to be the auctioneer, the male respondent, the respondents' solicitor, the real estate agent, the appellant's wife, her solicitor and her sister-in-law. The sheriff then announced the sale and, having done so, left the room to ascertain whether there were any other persons waiting to attend the auction. On finding there were none, he returned. The sheriff specified the various amounts which would have to be paid out of the moneys received and announced that their total was $13,293.75. Included in this figure was the amount necessary to discharge the mortgage. The statement of this amount apparently prompted the respondents' solicitor to ask whether the sale was to be on the basis that the mortgage would be paid out or whether the property was being bought subject to the mortgage. After some discussion, the sheriff informed that solicitor that he was selling on the former basis. The sheriff then announced that the "reserve" would be $14,000. When the auction commenced there was only one bid, that of the respondents for $16,500. The property was duly knocked down to them at that price. The whole of the purchase money was paid that day, but on 8th July a caveat was lodged under The Real Property Act (Q.) on behalf of the appellant. Though the necessary documents have been executed by the sheriff, because of the caveat, the property has not yet been transferred into the name of the respondents. The mortgage to the Darling Downs Building Society has been paid out but the balance of the purchase price remains in the hands of the sheriff. It does not appear whether a discharge of the mortgage has been registered. (at p41)

9. The appellant by statement of claim asked that the sale be set aside or, alternatively, for damages substantially on the ground of manifest irregularities on the part of the sheriff in the execution of the writ of fieri facias. (at p42)

10. Before this Court the appellant relied on the following points as vitiating the sale or, if not, as supporting the claim for damages:

1. The sale by the sheriff did not follow the ordinary concept of a public auction: the sale was not by public auction. It was argued by counsel for the appellant that, in the absence of a statutory definition of "public auction", it was necessary that the sale to be a sale by public auction as required by The Common Law Process Acts, 1867 to 1960 (Q.) should be conducted according to the current standards of public auctions of real estate by auctioneers specializing in that activity. Evidence called by the appellant indicated that, on this basis, the sheriff's sale was significantly deficient. 2. The sheriff, unlawfully as it was claimed, disclosed a price which he called the "reserve price", below which he would not sell the property. 3. The sheriff sold the property at a price which was not a fair price in all the circumstances. In this respect it was argued that the sheriff should have had the land valued and should not have sold under that value. 4. The sheriff was wrong in selling the entire property. In the first place, it was suggested that the writ of fieri facias was inappropriate to authorize the sale of land, except in the event that the land brought a price less than or equal to the amount of the levy to be made under the writ. It was said, and rightly said, that the writ of fieri facias had never applied to land in the United Kingdom and only did so in Australia as a result in the first instance of the New South Wales (Debts) Act, 1813. This Act, however, so it was argued, introduced with the writ of fieri facias the concomitant writ of venditioni exponas. It was said that under a writ of fieri facias only so much of what was seized could be sold as satisfied the writ and that if the sheriff found that if he sold an item of property he would realize more than the amount endorsed on the writ he should make a return to the writ to the effect that he had seized that item, e.g., in the present instance, the land, but that it remained in his hands unsold. If the creditor then wished to pursue the matter he must issue a writ of venditioni exponas. 5. The sheriff could not sell the debtor's interest free from encumbrance, that is to say, that he could not seek a price large enough to provide an amount sufficient to discharge any existing mortgage as well as to provide the amount of the levy under the writ. 6. It was the duty of the sheriff to embark upon a detailed examination of the plaintiff's property in an attempt to find property whose realizable value would be no more than enough to satisfy the levy. 7. The sheriff was bound to make inquiries as to the market value of the land. (at p43)

11. It will be convenient if I deal with these submissions seriatim. (at p43)

12. This case is one in which, as matters now stand upon the findings of the learned trial judge, the sheriff in performance of the obligations laid upon him by the receipt by him of the writ of fieri facias has observed all the statutory requirements unless it be that he failed to sell the land by public auction. The office of the sheriff is statutory: and where the statute specifies what he shall do, there is no warrant, in my opinion, for holding that he should in those respects do more. It may well be that the greater complexity of modern life demands that more should be required of a sheriff executing a writ of fieri facias than what is presently provided by statute. Whilst, with due respect, I would find myself unable to agree with the opinion of Dean J. as to the publicity which the sheriff was bound to give to a sale to be made under such a writ, I would certainly share his views as to the need for statutory revision of the requisites of a sheriff's sale: see Owen v. Daly (1955) VLR 442 . (at p43)

13. The sale in this case, upon the primary judge's findings, was, in my opinion, clearly effected in public by auction publicly advertised in the manner stipulated by statute. The sheriff was not required, in my opinion, to emulate the real estate auctioneer who at his client's direction and no doubt to some extent at least at his client's expense finds a number of trappings of an auction sale of seeming advantage in obtaining a higher price than might otherwise have been forthcoming. The evidence tendered in this case of the usages of real estate auctioneers was not, in my opinion, of any relevance to the question at issue, namely, whether the sheriff had fulfilled his statutory duty of selling by public auction. In my opinion, the sheriff was not in breach of that duty. (at p43)

14. The disclosure by the sheriff of the lowest sum for which he would sell the land was, in my opinion, perhaps unwise and not a course to be commended. But it was not irregular so as to warrant either the setting aside of the sale or the award of damages. On the facts of the case, no greater bid would in any event have been forthcoming: the only buyer had an upward limit of cash which determined the amount of his best bid. He would not have given more for the equity of redemption than $16,500 less the amount necessary to redeem the mortgage. The sheriff's announcement therefore had no effect upon the result. (at p44)

15. The nomination of the minimum bid which the sheriff would accept stemmed to some extent from the fact that he had decided to sell the land as unencumbered, thus requiring the price to be large enough to enable him to pay out the mortgagee. In truth, the sheriff should have been selling the right title and interest, if any, of the judgment debtor in the land. But apparently the mortgagee of the land had indicated to the sheriff that, being in a position to do so, he required his mortgage to be discharged, to which request or demand the sheriff acceded. However, the course followed by the sheriff would not justify in the circumstances of this case the setting aside of the sale. Clearly it gave rise to no damage to the judgment debtor. (at p44)

16. The next attack on the sale is that the sheriff, being under an obligation to get a fair price, failed to do so. In my opinion, there is no substance in this submission. There was no evidence in this case upon which it could be concluded that the price obtained was other than a fair price for what was sold in the circumstances in which it was sold. The price at which the respondents earlier offered to treat did not itself indicate, in my opinion, that the price obtained at the sheriff's sale was unfair. It was said that the sheriff ought to have obtained a valuation by an expert as to the value - presumably the market value - of the land. No doubt the sheriff should know what he is selling to the point that he can decide whether or not a bid at the auction is illusory or unfair: but, in my opinion, he is not required to obtain a valuation of the market value of the land. Clearly he is not required to refuse to accept a bid which is less than the market value of the land. Provided the sale conforms to the statutory requirements, generally speaking the amount bid by members or a member of the public will indicate what the property will bring in the circumstances of such a sale. It seems to me that the sheriff is entitled to accept at the auction any bid which is genuinely made and which bears a fair relationship to what is being sold. It is in this connexion that the sheriff must know what he is selling for it is rightly said, in my opinion, that he must obtain a reasonable price for what he sells: see Keightley v. Birch (1914) 3 Camp 521 (170 ER 1467) . It is to be reasonable having regard to what is offered, namely, a debtor's right title and interest, if any, and the circumstances of the sale. If there is no such bid, the sheriff is justified in returning, and he should return, a want of buyers. But in this case I can see no reason connected with the amount of the respondents' bid in relation to the property offered for sale which would have warranted the sheriff in refusing to accept it. (at p45)

17. The appellant then made what appears to me to be his main submission. He said that the writ of fieri facias does not authorize the sheriff to sell land which has a value - by which I take it the appellant means is likely to realize in the sheriff's public auction a sum - greater than the amount of the levy to be raised under the writ. So soon as the sheriff appreciates that the land is of such a value, it is said that he should return to the writ the fact that the land has been taken but that there are no buyers, thus giving the judgment creditor the opportunity to obtain the further writ of venditioni exponas. This submission, in my opinion, is misconceived. Land is "liable to be taken" under a writ of fieri facias in Queensland and, in my opinion, may be sold under the writ as any other item of property may be sold thereunder. In the case of chattels, the sheriff must not sell any further items of property once he has realized the levy under the writ. But, not having reached that sum, the sheriff may properly sell a further chattel though the amount which might reasonably be expected to be realized from that sale is greater than the unrealized balance of the levy: see Wooddye v. Coles Baily of Southw. (1595) Noy 59 (74 ER 1027) ; Stead v. Gascoigne (1818) 8 Taunt 527 (129 ER 488) . It seems to me the same principles apply in relation to the sale of land by the sheriff. The sheriff is entitled to sell a parcel of land no matter what sum its sale might reasonably be expected to bring. His duty to the judgment creditor requires so much. The judgment debtor may nominate the order of the sale of his assets and thus require chattels first to be sold; or other land of lesser value first to be sold. But, in default of such action on the judgment debtor's part, the sheriff is entitled, indeed, in my opinion, bound to sell the debtor's interest in the land, whatever sum it may bring so long as at the time of the sale he has not raised by other means the full amount of the levy. He is not required, in my opinion, to sell parcels of land in any order. (at p45)

18. Also the submission indicates a misunderstanding of the use of the writ of venditioni exponas. It may be conceded that with the extension of the writ of fieri facias to include land and interests therein, the writ of venditioni exponas also became available for use in connexion with execution of a judgment against land. But its issue depended upon a return by the sheriff to the writ of fieri facias to the effect that he had taken property of the judgment debtor for which he had received no bid: i.e., that for that property he had no buyer. Such a return was open to the sheriff where, although he nominally had received a bid, the amount bid bore so little relation to the evident worth of the property offered that in reality it did not constitute a bid at all. Acceptance of such a bid, at least where the buyer could be involved in knowledge of its nature, would not result in a sale and any transfer of the property consequent thereon would be set aside: see Edge v. Kavanagh (1888) 24 LRIr 1 and Owen v. Daly (1955) VLR 442 . Placed on this ground I am able to agree with the result in this last-mentioned case. Such a return would also be open to the sheriff where the bid though not illusory was unfair or unreasonable in the sense that it bore no fair or reasonable relation to that which was offered for sale. (at p46)

19. But if the sheriff has taken land or any interest in land owned by the judgment debtor, he must in duty to his judgment creditor offer it for sale though thereby he will recover more than the amount of the levy and, he must accept any bid which is not illusory or unfair, in the sense of bearing no real relation to the evident worth of the land or interest offered. As I have said, the sheriff must know what he is offering but, in my opinion, is not required to have or to have obtained expert knowledge as to its market value. Having land to sell, though it be of an evident worth beyond the amount of the levy under the writ, the sheriff could not make such a return as would warrant the issue of a writ of venditioni exponas if he had received a bid which was neither illusory nor unfair. The bid in this case was such that, in my opinion, there was no occasion for resort to the writ of venditioni exponas. In my opinion, this submission of the appellant should be rejected. (at p46)

20. What I have said disposes I think of the other submissions of the appellant. (at p46)

21. I have dealt with the appellant's various submissions in support of his claim to set aside the sale: but in reality there was in any event no ground for such a course. The respondents were not, in my opinion, in any respect involved in any of the matters said by the appellant to be significant irregularities on the part of the sheriff. Consequently, in any case the sale should not be set aside. Nor was there any evidence, in my opinion, upon which it could be found that any of the suggested irregularities caused the appellant any damage. (at p47)

22. In my opinion, the appeal should be dismissed. (at p47)

McTIERNAN J. I agree in the judgment and reasons of the Chief Justice. (at p47)

KITTO J. On 20th May 1966 the appellant was, and he still is, the registered proprietor of an estate in fee simple in certain land under the provisions of The Real Property Act of 1861 (Q.), subject to the charge created by a registered bill of mortgage. (at p47)

2. On that day a creditor of his, having obtained a judgment against him in the Supreme Court of Queensland for a sum of money with interest and costs, procured the issue of a writ of fieri facias commanding the Sheriff of Queensland that of the lands, tenements, goods, chattels, choses in action and other property of the appellant he should cause to be made the amount of the judgment debt with further interest and costs of execution, and that he should have that money and interest in the Court immediately after the execution of the writ to be paid to the creditor in pursuance of the judgment. (at p47)

3. The creditor caused a memorial of the writ to be entered in the register book in respect of the plaintiff's land pursuant to s. 91 of the Act, with the result, by force of s. 35 of The Real Property Act of 1877 (Q.), that if the land or the appellant's estate or interest in it should be sold under the writ the sheriff would be bound to execute a transfer thereof to the purchaser subject to (inter alia) all encumbrances notified by memorandum entered on the register, and the Registrar-General would be bound to make an entry thereof in the register book, whereupon the purchaser would "subject as aforesaid" be deemed the transferee of the land, estate or interest. (at p47)

4. The sheriff caused the proper notices to be published under s. 59 of The Common Law Process Act of 1867 (Q.), the notices describing the intended sale as a sale by public auction and nominating 6th July 1966 as the day and the Supreme Court as the place for the sale. On that day at that place he read to the persons present certain terms of sale which described the subject matter of the sale as all the right, title and interest if any of the appellant in the relevant land, and stated that the land was subject to the bill of mortgage. He stated orally that bids would cover both the appellant's "equity" and the mortgage debt, and that the reserve was $14,000. Bids being invited, the respondents other than the sheriff (I shall refer to them as the respondents) made a bid of $16,500, and there being no other bid the property was knocked down to them. They paid the amount of the bid to the sheriff, but the entry of a caveat by the appellant has prevented the registration of any transfer to them. (at p48)

5. The appellant sued in the Supreme Court to vindicate the rights which his caveat was lodged to protect, contending that the sale should be set aside for a variety of reasons. The action was dismissed by Lucas J., and it is against the dismissal that this appeal is brought. (at p48)

6. None of the grounds relied upon in support of the appeal seems to me to have substance. One was that the sheriff should have taken all the steps which at the present time in Queensland are ordinarily taken by auctioneers conducting public auctions of land. Like Lucas J., I am not prepared to hold, without further consideration, that the sale had to be by auction. The mode of sale under a fieri facias is in the discretion of the sheriff except in so far as it is controlled by special provisions made by or under a statute: Edwards, Law of Execution (1888), p. 124, see Phillips v. Canterbury (Viscount) (1843) 11 M &W 619 (152 ER 953) . In England a public auction is required in certain cases by a provision which was enacted in s. 74 of the Bankruptcy Act of 1861 and, though not repeated in the Act of 1869, was restored in s. 145 of the Act of 1883 and appears to be still in force. No similar provision exists in Queensland except in s. 61 of The Common Law Process Act of 1867 which applies only to sales of equities of redemption and other equitable interests. The appellant's interest was a legal interest subject to a charge and therefore was not, in a strict sense, an equity of redemption or any other form of equitable interest: see Greig v. Watson (1881) 7 VLR (E) 79 ; Perry v. Rolfe (1948) VLR 297 ; Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. (In Liquidation) (1965) 113 CLR 265, at p 275 . It may be, however, that that is not the sense in which the expression is used in The Common Law Process Act: see Coleman v. De Lissa (1885) 6 LR (NSW) Eq 104, at p 112 , and cf. Re Forrest Trust (1953) VLR 246, at p 268 . Lucas J. suggested that public auction may be impliedly prescribed by O. 48, r. 6, of the Rules of Court; but that rule seems to be directed to the making of an order that a sale under an execution "shall" be made otherwise than by public auction, and even if "shall" had been "may" I venture to doubt whether a positive requirement that sales shall be by auction unless otherwise ordered is implied rather than erroneously assumed to exist by force of some other rule or enactment. Even if the sale in the present case was required to be by public auction, however, I see no ground for imputing a requirement that any particular procedure shall be followed. The sale was in public; the persons present were given reasonable opportunity to bid; and none of them was subjected to any unfairness. The disclosure of the reserve was a departure from the course which is usually considered to be best calculated to extract the highest possible bids, but I see no ground for saying that the sale ceased to be a public auction sale when the sheriff announced that he would not accept bids below the stated amount. In any case, as Lucas J. pointed out, the disclosure did no harm in the present case, for the respondents' bid exceeded the announced reserve, and in fact was the highest they were financially able to make. (at p49)

7. Another complaint on the part of the appellant was that the price accepted by the sheriff was grossly below the value of the land, and that the sheriff before accepting the bid should have satisfied himself, by obtaining a competent valuation, what the true value was. If it was apparent to the sheriff that in fact or in all probability the bid was so far below the value that he would be acting unreasonably by accepting it, his proper course was to make a return that the property remained unsold for want of a buyer, and to refrain from selling at such a price unless commanded by a venditioni exponas to sell for what he could get: Keightley v. Birch (1814) 3 Camp 521, at p 524 (170 ER 1467, at p 1469) . For selling in that situation without waiting for a venditioni exponas he would be liable to an action for damages at the suit of the appellant, but whether the sale could be set aside in the absence of collusion between the sheriff and the purchaser is by no means clear. In the case of chattels I am not aware of any jurisdiction that the Court possesses, on the ground of a breach by the sheriff of any duty he may be under in relation to the sale, to set aside the sale and restore to the debtor the ownership which the sheriff has passed to the purchaser by virtue of the special property vested in him by his seizure under the writ. The jurisdiction seems to have been assumed in Ireland in respect of chattel interests in land, in the case of Edge v. Kavanagh (1888) 24 LR Ir 1 ; but in the case of land to which s. 35 of The Real Property Act of 1877 (Q.) applies I do not see, as at present advised, any ground upon which a purchaser from the sheriff can be denied his right to have a transfer registered in accordance with that section unless the jurisdiction of a court of equity to act in personam be attracted by proof of collusion between him and the sheriff: cf. Perkins v. Willcock (1871) 2 VR (E) 222 , and Palmer v. Bourke (1902) 28 VLR 275 . No collusion was suggested in the present case. It was not proved that the sheriff had any reason to think that a bid of $16,500 was so far below the value of the land that he could properly make a return to the effect that in reality he had no buyer, or even that in fairness to the appellant he ought to obtain the advice of a valuer. In my opinion Lucas J. was right in rejecting this ground of attack on the sale. (at p50)

8. In the argument a good deal was made of the fact that the sheriff, though announcing in the terms of sale that he was selling only the appellant's right, title and interest in the land, accepted the respondents' bid as for the unencumbered fee simple, saying that he would have to pay off the mortgage out of the purchase money. In the circumstances of the case, however, the difference was only a matter of words. The sheriff disclosed the amount of the mortgage debt, and the effect of his announcement was simply that the purchaser would have to pay to the sheriff not only the price of the appellant's interest in the land but also the amount necessary to enable the sheriff to clear the title of the mortgage, instead of having to pay the one to the sheriff and the other to the mortgagee. The sheriff was not purporting to sell the mortgagee's interest. The meaning of his announcement was only that he was selling the appellant's interest, but was intimating that the payment of the mortgage moneys would be made through him instead of directly to the mortgagee. He made what I think was an unfortunate mistake, for if he had adhered precisely to his terms of sale he would not have given the appellant a foothold for the present argument; but what he did amounted in truth to a performance of his duty under the fieri facias. (at p50)

9. Finally it was said that the sheriff was not justified in selling the appellant's interest in the land at all, because it was of a value much in excess of the total amount which the fieri facias required him to levy. That amount was in the vicinity of $3,150 whereas the land, if not worth $24,500 or more as the appellant suggests, was at least valuable enough to bring $16,500 even at the sale that is complained of. It is true that if a sheriff seizes under a fieri facias several items of property and sells some only for sufficient to cover the amount of the levy he is not justified in going on to sell more. Whether the sale of the additional items may be set aside as against the purchasers is another matter; but I put it aside, for the case is not one of selling more items of property than he needed to sell. It is a case of selling one single item; and to sell that, whatever the disproportion between its value and the amount which the writ required the sheriff to raise, was within the authority which the writ conferred. (at p51)

10. I am unable to see any ground for disagreeing with the judgment of Lucas J., and I would therefore dismiss the appeal. (at p51)

Orders

Appeal dismissed with costs.