Andrew Garrett Wine Resorts Pty Ltd v National Australia Bank Ltd and Other Actions

[2006] SASC 38

SUPREME COURT OF SOUTH AUSTRALIA

(Appeal from a Master: Civil)

ANDREW GARRETT WINE RESORTS PTY LTD & ANOR v NATIONAL AUSTRALIA BANK LTD AND OTHER ACTIONS

Judgment of The Honourable Justice Vanstone

8 February 2006

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PRACTICE UNDER RULES OF COURT - JUDGMENTS AND ORDERS

Appeals from decisions of Masters - notices of appeal not filed by party to actions - proposed appellant found not to have standing - appeals dismissed.

Supreme Court Act 1935, s 50(2); Real Property Act 1886, s 192, s 96, s 54; Bankruptcy Act 1966, s 58(3); Corporations Act 2001, s 468, s 471B; Supreme Court Rules, r 106.05, r 97, r 97.11, r 83.01(a), r 33.01 , referred to.
Andrew Garrett Wine Resorts Pty Ltd & Ors v National Australia Bank (2004) 236 LSJS 342; Chakravarti v Advertiser Newspapers Ltd (1998) 72 SASR 361; Collex Waste Management Sevices Pty Ltd v The Corporation of the City of Enfield [2000] SASC 140; Sunburst Properties Pty Ltd (In Liq) v Agwater Pty Ltd & Ors [2005] SASC 335, considered.

ANDREW GARRETT WINE RESORTS PTY LTD & ANOR v NATIONAL AUSTRALIA BANK LTD AND OTHER ACTIONS
[2006] SASC 38

Appeal from Decisions of Masters

VANSTONE J:

Introduction

1. Mr Andrew Garrett purports to appeal against a number of judgments and orders made by Masters of this Court in three actions.  He also seeks an extension of time in which to appeal against decisions of Gray J.  It has been convenient to deal with these notices of appeal in a single hearing. 

2. Mr Garrett is not a plaintiff in any of these actions.  The effect of the decisions complained of has been to deny him standing to assert any property rights in the actions.  I was prepared to hear Mr Garrett’s submissions as to standing.  For the reasons which follow I consider that each decision was correct.  The appeals must therefore be dismissed.

   The Decisions Under Appeal and the Application

3. The matters before me are as follows:

   1.an appeal in Action no. 127 of 2004 from Judge Lunn’s order dated 7 November 2005 striking out two Notices to Admit (FDN 223);

   2.an appeal in Action no. 127 of 2004 from Judge Lunn’s order dated 28 October 2005 refusing to permit Evajade Pty Ltd to be joined as an intervenor, and refusing Mr Garrett leave to substitute himself as a plaintiff (FDN 224);

   3.Mr Garrett’s application of 13 December 2005 in Action no. 127 of 2004 seeking an extension of time in which to lodge appeals against decisions of Gray J;  the first made on 23 March 2005 (“the Stamp Duty decision”), two others made on 12 May 2005 (the first seeking leave to re-open the Full court’s decision of 4 November 2004:  Andrew Garrett Wine Resorts Pty Ltd & Ors v National Australia Bank (2004) 236 LSJS 342 and the second seeking leave to appeal against the Stamp Duty decision); and finally, one made on 3 August 2005 (“the Rothschild Mortgage decision”) (FDN 226);

   4.an appeal in Action no. 127 of 2004 from Judge Lunn’s orders of 13 January 2006 dismissing a number of applications filed by Mr Garrett on the grounds that Mr Garrett had no locus standi to bring the applications, and also ordering that Mr Garrett not be permitted to file any further applications until the sum of $5,000 is paid into Court (FDN 240);

   5.an appeal in Action no. 422 of 2005 from Judge Withers’ order of 25 November 2005 dismissing the proceedings as disclosing no tenable cause of action and as an abuse of process;

   6.an appeal in Action no. 423 of 2005 from Judge Withers’ order of 25 November 2005 dismissing the proceedings as disclosing no tenable cause of action.

4. The appeals come to a single judge of this Court by s 50(2) Supreme Court Act 1935 and r 106.05.  My powers on appeal are set out in r 97.  I am to conduct a rehearing and I am entitled to receive further evidence in my discretion.

   Action 127 of 2004:  Andrew Garrett Wine Resorts Pty Ltd & Anor v National Australia Bank Limited & Anor

5. This action arose from a dispute concerning the two registered mortgages held by the defendant Bank over a property known as “Springwood Park”, the former home of the appellant. The registered proprietors of the property (and plaintiffs in this action) were Andrew Garrett Wine Resorts Pty Ltd (“Resorts”) as trustee for the Springwood Park Unit Trust (“SPUT”) and Ms Averil Garrett, wife of Mr Andrew Garrett. The original proceedings in this court were an action by the Bank for possession under Part 17 of the Real Property Act 1886, on account of default by the mortgagors.  Later, and on 4 February 2004, the plaintiffs filed fresh proceedings seeking permanent injunctions restraining the Bank from taking any further steps to enforce its rights under the mortgages, and associated declarations. 

6. Much water has flowed under the bridge since then.  The Bank counterclaimed for damages and joined Mr Garrett as a defendant to the counterclaim.  The Bank again sought and obtained an order for possession.  Mr Garrett was declared bankrupt in September 2004.  Ms Garrett became bankrupt in December 2004.  Her trustee did not elect to prosecute these proceedings and her cause of action is deemed to have been abandoned.  On 17 May 2005 the first plaintiff, Resorts, was wound up in insolvency and subsequently, in September, through its liquidators, it discontinued its part in the action.  Thus the registered proprietors implicitly acknowledged the Bank’s right to possession and right to exercise the power of sale.

7. Mr Garrett asserts that on 26 May 2005 Evajade Pty Ltd was appointed as the new trustee of Resorts.  At that time the sole director of Evajade was Mr Andrew Sandow.  Mr Garrett puts that Evajade has not replaced Resorts as joint registered proprietor of Springwood Park, only because the Bank has refused to produce to the Registrar-General the Duplicate Certificate of Title, to allow registration to take place.  It appears that on 27 September 2005 Mr Garrett attended at the Lands Titles Office and lodged a Memorandum of Transfer in respect of Resorts’ share in the ownership of Springwood Park.  Mr Garrett purported to sign the transfer on behalf of Resorts, pursuant to a power of attorney.  It appears to me that the Registrar-General properly refused to register the transfer Mr Garrett presented, as it was not executed by the registered proprietor, namely the liquidator of Resorts, and the Duplicate Certificate was not presented.  It is not necessary here to enumerate other consequences of that purported transaction.

8. Insofar as the Bank sought damages against the mortgagors and Mr Garrett, those proceedings have been stayed by operation of s 58(3) of the Bankruptcy Act 1966 (as regard Mr and Ms Garrett) and s 471B of the Corporations Act 2001 (as regards Andrew Garrett Wine Resorts Pty Ltd).

9. A more comprehensive history of the action is contained within the reasons of Judge Lunn of 13 January 2006. 

10. On 19 January 2006, Springwood Park was sold.  Settlement has taken place, but the transfer was not yet registered, as at 24 January, when I heard argument. 

11. There are two issues.  The first is whether Mr Garrett has any standing to pursue any issue in this action.  The second is whether the interest he wishes to pursue is a live one.  I deal with the matter of standing first.

12. Mr Garrett claimed, in the first instance, that his standing was grounded in his being defendant to the Bank’s counterclaim.  However, as mentioned, that counterclaim has been stayed.  Whilst that position obtains, I cannot see that being defendant to the counterclaim would give Mr Garrett status to serve notices to admit, or to play any other part in this action.

13. Then, Mr Garrett submitted that he was entitled to standing based on his interest in SPUT.  His argument proceeded on the basis that Evajade had indeed become the new trustee of SPUT and had thereby assumed an interest in Springwood Park.  I am not convinced that this assertion is correct.  Any disposition of the assets of Resorts, once in liquidation, might have been void by operation of s 468 Corporations Law 2001.  However, since the Judge dealt with Mr Garrett’s arguments on the assumption that Evajade acquired an interest, I propose to do so, as well. 

14. Mr Garrett suggested that his entitlement to be heard arose in three ways.  First he claimed that as beneficiary of SPUT he was able to stand in the place of Evajade, in circumstances where he contended Evajade had failed to act in the interests of the beneficiaries.  In relation to Mr Garrett’s wish to speak as a beneficiary of SPUT, as the Judge observed, exceptional circumstances would be required before the beneficiaries of a trust would be entitled to stand in the place of the trustee to sue.  There is no evidence before the Court that the trustee is unable or unwilling to duly administer the trust.  Nor is there any evidence to prove assertions made by Mr Garrett to the effect that Evajade has refused to sue. 

15. Next Mr Garrett claimed that there had been an assignment of Evajade’s interest in the property as trustee, to him, in his capacity as trustee for the Andrew Garrett Family Trust No. 3.  In support of this claim, Mr Garrett referred to two Deeds of Assignment dated 13 and 23 November 2005 respectively.  The deeds were between Evajade, as assignor, and Andrew Garrett, in his capacity as trustee of the Andrew Garrett Family Trust No. 3.  The deeds purported to assign certain causes of action, including that pursued in Action 127 of 2004.

16. This argument was rejected by the Judge on the basis that the Deeds of Assignment referred to did not purport to assign any right or interest in SPUT.  The Deeds each refer to assignments by Evajade specifically in its capacity as trustee for the Andrew Garret Family Trust (“AGFT”) and the Andrew Garrett Family Trust No. 2, but not as trustee for SPUT. 

17. Mr Garrett submitted that Judge Lunn had erred in failing to refer to a Deed of Settlement indicating that AGFT was a unit holder of SPUT.  I do not agree.  That Deed establishes only that AGFT was a beneficiary of SPUT, and does not change the fact that Evajade’s assignments were in its capacity as trustee for AGFT, not SPUT.  Mr Garrett claims that this was a mere oversight.  He appeals to equity to rectify it.  Contrary to Mr Garrett’s submissions, however, no principle of equity would operate in such circumstances to vary the plain terms of the Deeds.  Consequently, no cause of action accruing to SPUT has been assigned to Mr Garrett. 

18. Thirdly, he claimed that he had been appointed, on 19 January 2006, as joint trustee of SPUT, along with Evajade.  This was asserted in a document provided by Mr Garrett to the court at the hearing of 24 January 2006.  The document was set out as an affidavit, but was neither sworn, nor filed two clear days before the hearing in accordance with r 83.01(1)(a).  It did not comply with the requirements as to content of an affidavit, in that it contained submissions and legal argument, along with statements of fact.  I refused to accept it, other than as written submissions to supplement Mr Garrett’s oral arguments.

19. There is nothing else before the court which supports the factual assertions set out in the document.  Consequently there is no proper evidence to support Mr Garrett’s claim to now be a trustee of SPUT.  On this basis alone his submission must fail.

20. Moreover, even were it established by evidence that Mr Garrett had been appointed a trustee of SPUT, this would not indicate any error in the reasons of the Judge delivered on 13 January 2006, six days prior to the appointment.  Under r 97.18(b), a single judge may, as a matter of discretion, receive further evidence of any question of fact.  This extends to evidence of factual matters that have occurred after the judgment appealed against:  Chakravarti v Advertiser Newspapers Ltd (1998) 72 SASR 361. In exercising that discretion the court should have regard to the public interest in the finality of litigation, and “should not allow a party to patch up its case as it wends its way through the judicial system”: Collex Waste Management Services Pty Ltd v The Corporation of the City of Enfield [2000] SASC 140 per Bleby J at [27]. I consider that this is what Mr Garrett has attempted to do.

21. The date of appointment would have been immediately after, and perhaps in response to, the Judge’s decision on 13 January that Mr Garrett lacked a sufficient interest in the Springwood Park property to accord him standing.  In light of the extensive trail of applications and appeals that has led to this point, the public interest in finality of litigation is especially compelling.  If only for these reasons, I would have been minded to reject new evidence of Mr Garrett’s appointments of 19 January 2006, even had it been provided within time and in an appropriate form.  However, I do not consider that the new material would have advanced Mr Garrett’s argument.

22. In his reasons, Judge Lunn dealt with Mr Garrett’s claims to be heard, in some depth.  In my view no error has been demonstrated in his reasoning.  No new material has been placed before me in compliance with the Rules which would have the effect of undermining his conclusions.

23. All of Mr Garrett’s claims to locus standi in this matter must be rejected.

24. I turn now to the interest in Springwood Park which Mr Garrett sought, by his applications, to assert.  He described this as “the equitable right of redemption of the Garrett interests and the ability to discharge the Mortgages pursuant to the Real Property Act.”  In support of the existence of this right Mr Garrett pointed to Judge Lunn’s reasons of 13 January 2006.  There the Judge observed that, with one possible exception, there were no substantive issues left to be determined in this action.  The Judge said that the possible exception related to one of the orders made by Besanko J on 26 July 2004 at the time when he discharged interlocutory injunctions restraining the Bank from enforcing its mortgages and ordered the plaintiffs to surrender possession of Springwood Park.  The order in question was in these terms:

    3.Upon the plaintiffs paying to the defendant the moneys remaining due the defendant upon the security of Memoranda of Mortgage Registered Numbers 9374752 and 9617285, the defendant will (subject and without prejudice to the due exercise of any power of sale for the time being vested in the defendant) re-deliver to the plaintiffs possession of the property and release to the plaintiffs the security constituted by the mortgages.

25. Mr Garrett argues, as I understand him, that this order acknowledged the existence of an equitable interest vesting in the registered proprietors of the property, in the nature of a right to re-delivery.  Recognition of such a right might well be seen to impermissibly undermine the decision of this Court in which the Bank’s right and title as mortgagee in possession was upheld.  But quite apart from that, any such right is now extinguished by the course of events.  The action was essentially one for possession.  That was granted and the property has been sold.  Whatever right of re-delivery existed before the sale is now extinguished.  The proceedings are exhausted.  In my view there is now no capacity in Resorts (In Liquidation),  Evajade, or anyone else acting on behalf of SPUT, to assert such a right.  Consequently I find that not only does Mr Garrett have no standing to press for a right of re-delivery of the property, but there now exists no such right.  My conclusion is that the appeal against Judge Lunn’s orders of 13 January 2006 must be dismissed as incompetent, pursuant to r 97.11.

26. It follows, as well, that Mr Garrett had no standing such as to allow him to issue the Notices to Admit.  And anyway, there is no ongoing issue to which they could relate.  They were properly struck out.  That appeal must be dismissed pursuant to r 97.11.

27. The same conclusion dictates that the appeal against the Judge’s decision refusing to permit Evajade to be joined in the action as an intervenor must be dismissed pursuant to r 97.11.

28. I turn to the application for an extension of time within which to appeal against four decisions of Gray J.  The absence of standing is plainly fatal to these applications.  In addition there is no explanation provided for the lengthy delay and no grounds of appeal are proposed.  The application must be dismissed, pursuant to r 95.08.

    Action 422 of 2005:  Evajade Pty Ltd & Ors v The Registrar-General of South Australia & Ors

29. The plaintiffs issued a summons on 19 April 2005 under Part XVII Real Property Act seeking various orders, including an order that possession of Springwood Park be granted to Evajade.  The plaintiffs include Evajade (as trustee for Holy Grail Property Trust No. 2 and for the Andrew Garrett Family Trust and for the Andrew Garrett Family Trust No. 2) and Resorts, as trustee for SPUT, and various members of Mr Garrett’s family, but do not include Mr Garrett.

30. Subsequently the Registrar-General, being the first defendant, sought the dismissal of the proceedings as against him, on grounds that no cause of action was disclosed and that they were an abuse of process.  The second and third defendants (the Bank and Sims Partners, being the Bank’s agents in respect of the possession of Springwood Park) sought a similar order.

31. Mr Garrett sought leave to intervene, pursuant to r 33.01, in his capacity as trustee for the Andrew Garrett Superannuation Fund (a unit holder of SPUT) and as a shareholder in Evajade.

32. Judge Withers refused Mr Garrett leave to intervene. He went on to deal with the applications for dismissal of the proceedings. He interpreted the plaintiffs’ summons as invoking s 192 Real Property Act.  Section 192 authorises a person, known as a “claimant”, to summons a person in possession of land to appear and to show cause why the person “should not give up possession to the claimant”.  The section does not authorise a person who is not a claimant to seek an order for possession.  A “claimant” may be a registered proprietor of a freehold estate in possession, a registered mortgagee or an encumbrancee, or a lessor.  None of Evajade, the first plaintiff, or any of the other plaintiffs answers that description.  The Judge dismissed the action as failing to disclose a cause of action, pursuant to r 3.01.

33. On appeal Mr Garrett sought to argue that since Evajade had replaced Resorts (In Liquidation) as the trustee of SPUT, it was entitled to be the registered proprietor. He argued that the only impediment to registration was the Bank’s refusal to produce the Duplicate Certificate. However, a transfer may not be registered unless the transfer instrument complies with the Act and is executed by the registered proprietor: s 54(1) and s 96 Real Property Act.  In addition, the attempt by Mr Garrett to register that transfer is arguably in conflict with this Court’s order of 26 July 2004 delivering possession of the property to the Bank. 

34. For the reasons given in respect of Action 127 of 2004, I consider the Judge was correct to refuse leave for Mr Garrett to appear.  Even if Evajade were the validly appointed trustee of SPUT, there is no demonstrated reason to allow Mr Garrett to stand in place of Evajade to pursue this action.  Therefore he has no standing to bring this appeal.  I would not be prepared to admit the new evidence proffered by Mr Garrett in an attempt to bolster his status.  I rely on the reasons given earlier.

35. Furthermore, I agree with the Judge that on the plain terms of s 192 Real Property Act the action was doomed.  It was clear that none of the plaintiffs could utilise the section.  Even further, as already outlined, the property has been sold. 

1. Accordingly, there is no need to descend to the various defects in the Notice of Appeal. 

2. For these reasons the appeal must be struck out, pursuant to r 97.11. 

   Action 423 of 2005:  Phoenix Rising Vineyards Pty Ltd as Trustee for the Phoenix Rising Property Trust & Ors v Registrar-General of South Australia & Ors

3. This summons for possession, lodged on the same day as that in Action No. 422 of 2005, again invoked Part XVII Real Property Act.  Some of the plaintiffs are common to Action No. 422.  The plaintiffs include Phoenix Rising Vineyards Pty Ltd, as trustee for Phoenix Rising Vineyards Property Trust, but do not include Mr Garrett. 

4. The defendants, the Registrar-General, the Bank and McGrath Nicol, again sought to have the action dismissed as disclosing no cause of action.

5. The action concerns a vineyard known as “Bulka Station”.  The registered proprietor is Sunburst Properties Pty Ltd (In Liquidation).  The Bank held security over the property.  That security has also been the subject of extensive litigation.  The right and title of the Bank’s receivers to negotiate a sale of the property was upheld in this Court:  Sunburst Properties Pty Ltd (In Liq) v Agwater Pty Ltd & Ors [2005] SASC 335 (“the Agwater case”).

6. Before Judge Withers, Mr Garrett sought leave to intervene.  Leave was refused.  The argument followed similar lines as previously outlined.  As I understand him, Mr Garrett claimed that his status was grounded in being the beneficiary of trusts holding an interest in the property, where the relevant trustees had chosen not to pursue rights they had.

7. Before me Mr Garrett also claimed that since the Judge’s decision he had been appointed a trustee of Sunburst Properties Unit Trust.

8. None of the plaintiffs qualify as claimants as provided by s 192 Real Property Act.  Before me Mr Garrett sought to argue that the fifth plaintiff, J & W Holdings Pty Ltd, as trustee for the Sunburst Properties Unit Trust, had the right to become the registered proprietor of the property, being appointed, as he claimed, as trustee of Sunburst Properties Unit Trust after Sunburst Properties Pty Ltd went into liquidation.  Again he argued that but for the Bank’s refusal to produce the Duplicate Certificate, a Memorandum of Transfer giving effect to that change of ownership would have been registered.  It appears that Mr Garrett lodged that Transfer at the Lands Titles Office.  The submission overlooks the winding up of Sunburst Properties Pty Ltd prior to the time when the transfer was said to be effected, the form of the transfer instrument and the injunction issued in this court by Gray J, during the hearing of the Agwater case, restraining Mr Garrett from dealing in any way with that property. 

9. In any event it is unnecessary to descend further into the facts underlying those assertions.  Again, I consider the Judge was correct to dismiss the summons.  None of the plaintiffs are in fact claimants, as defined by the section.  Therefore no cause of action is disclosed.  The appeal should be struck out pursuant to r 97.11. 

   Orders

10. I shall deal with the matters before me in the same order as they appear in the third paragraph of these reasons.

    1.     The appeal in Action No. 127 of 2004 (FDN 223) is dismissed.

    2.     The appeal in Action No. 127 of 2004 (FDN 224) is dismissed.

    3.The application for an extension of time in which to lodge appeals in Action no. 127 against decisions of Gray J (FDN 226) is dismissed.

    4.     The appeal in Action no. 127 of 2004 (FDN 240) is dismissed.

    5.     The appeal in Action no. 422 of 2005 is dismissed.

    6.     The appeal in Action no 423 of 2005 is dismissed.