ANZ Banking Group Ltd v Hubner & Hubner

[1998] QSC 203

IN THE SUPREME COURT
OF QUEENSLAND  O.S. 31 of 1991
CAIRNS
[ANZ Banking Group Ltd v Hubner & Hubner]

BETWEEN:                ANZ BANKING GROUP LTD.
  Applicant
AND:  COLIN RICHARD HUBNER

YVONNE HUBNER

Respondent

REASONS FOR JUDGMENT
  BEFORE THE HONOURABLE JUSTICE JONES
  DELIVERED 28 SEPTEMBER, 1998

This is an application by the ANZ Banking Group Ltd for orders that a caveat, lodged by Col Richard Hubner and Yvonne Hubner (“the respondents”) over certain land, be removed and further that the respondents be restrained from lodging any further caveat over that land.

The relevant history behind the events which brings these parties to court is set out in the extensive and detailed joint affidavit of the respondents sworn on 30 August, 1998 relied upon to resist these applications.  That affidavit sets out a number of issues which the respondents would wish to litigate with the applicant and with the liquidators of  the company, The Cairns Glass Company Pty.  Ltd (in liquidation), which was formerly controlled by Mr. Hubner.  There is ongoing litigation between the respondents and the applicants concerning the former business and in particular the debiting of the company’s accounts in respect of cheques which were not properly authorised.  I should not comment upon the merits of these matters which are the subject of this litigation.

Relevant to my determination of this issue is the fact that on 19 June 1997 the applicant obtained judgment in default of delivery of defence for the recovery of possession of the land over which the subject caveat has been lodged.  This property is described as Lot 1 on registered plan number 701366, County of Nares, Parish of Cairns situated at 333 Draper Street, Cairns in the State of Queensland.

The respondents sought to have the default judgment set aside on the grounds that they had a defence on the merits.  In so doing the respondents pointed to a number of aspects of their dealings with the applicant as their banker and adviser.  These matters were considered by Justice Byrne, who,  having properly weighed the prospects of success of the respondents’ claims, came to the view that the inevitable outcome of the trial was that “some liability upon the guarantees will be sheeted home to the (respondents) and, in that event, the bank will be shown to have been entitled to realise on its security (the Draper Street property)”.  (See Reasons dated 15 September, 1997)  The respondents’ joint and several liability under the guarantee and the mortgage was calculated to be in the sum of $444,700 plus interest from 16 December 1996.  In so doing, Justice Byrne acted in the respondents’ best interests by precluding their embarking upon expensive, time consuming and, ultimately, futile litigation.  Unfortunately the respondents have not been prepared to accept his assessment nor my concurrence in that assessment.

In  May 1998 the respondents sought to set aside the judgment on the grounds that it had been irregularly obtained.  The basis of that application was that the court had been misled by an alleged false certification and false affidavit by solicitors acting on behalf of the applicant bank.

In determining that application I rejected those allegations.  Despite my having done so the respondents continue to make the same assertions before me.  This, it seems to me, stems from the respondents’ inability to understand the differing impacts of  O6r.7 and O.6r.11B of the rules of the Supreme Court and the scope of the O31r.7 pursuant to which the default judgment was entered.  Further, there appears to be an unwillingness on behalf of the respondents to accept my decision of 28 May, 1998 and that of the Court of Appeal dismissing their appeal against my decision.

Whatever the reason for this resistance on the part of the respondents, the judgment remains in force and the  applicant bank is entitled to vacant possession of the subject land.

At various times during the course of different proceedings between these parties, orders for costs have been made against the respondents.  The applicant has issued bankruptcy notices in respect of the non payment of those costs.  The material refers to three bankruptcy notices having been served but only one is exhibited before me.  This notice was issued on 4 June, 1998 but it is not clear when it was served.  The  respondents applied to the Federal Court in Bankruptcy on 30 June, 1998 to have the three notices set aside.

The respondents rely upon this fact to assert that this court has no jurisdiction to make the order sought by the applicant.

Clearly this court has the jurisdiction to hear the application. s.127 of the Land Title Act provides:-

“S.127

(1)A caveatee may at any time apply to the Supreme Court for an order that a caveat be removed.

(2)The Supreme court may make the order whether or not the caveator has been served with the application, and may make the order on the terms it considers appropriate.”

Equally clearly the Federal Court in Bankruptcy would not make orders in respect of the judgment of this court concerning the possession of the subject land in the context of an application to set aside a bankruptcy notice.

The respondents’ application to set aside the bankruptcy notice is exhibited to their affidavit and it appears to be made pursuant to s.41(7) of the Bankruptcy Act 1966. This requires that the application be made within the expiration of time for compliance with the requirements of the bankruptcy notice (here 21 days) and that the court be satisfied that the debtors (respondents) have such a counterclaim, set off, or cross demand equal to or exceeding the amount of the judgment debt of the kind referred to in s.40(1)(g)).

But the Federal Court in Bankruptcy is not going to decide the issues and thereby alter the status quo which exists between the parties at this moment.  In determining the respondents’ application the Federal Court in Bankruptcy has to be satisfied that the respondents have made out a prima facie case of the existence of a counterclaim settled for cross demand (Ebert -v- Union Trustee Care of Australia Ltd. (1960) 104 CLR 346/350). The existence of these proceedings in the Federal Court in Bankruptcy does not in any way impact upon the jurisdiction of this court to hear the application.

The respondents identified their caveatable interest in the subject land as the “registered proprietor claiming the estate under federal law”.  The grounds upon which the caveat is claimed is expressed as follows:-

“The ANZ Banking Group obtained possession in contempt of s.78 Land Title Act. Federal Court action yet to be decided. The ANZ Banking Group and Ivor Worrell and Raj Khatri conspired to defraud the guarantors of The Cairns Glass Company while the company was in voluntary administration”.

The allegation in the first sentence is manifestly incorrect since it is the case that possession was obtained pursuant to a judgment of this court, which judgment has now been reviewed on two occasions.

The respondents’ claim against the applicant bank and the liquidators of the Cairns Glass Company Pty Ltd is scandalous and without any evidentiary basis for its assertion.  It is superfluous to say it does not found any claim for an interest in the land upon which the respondents could caveat.  In stating these grounds, and in the material relied upon, the respondents are essentially revisiting matters which were raised before me in November 1997 when I ordered the removal of the original caveat.

I refer to the reasons which I gave on that occasion and I find now that no reason has been shown why the caveat should not be removed. In the circumstances, section 129 of the Land Title Act is applicable and the caveat should have been lodged only with the leave of the court.

It is in the following terms:-

“Further Caveat

129If a caveat lapses or is withdrawn, cancelled or removed for a lot, the person who was the caveator may lodge another caveat for the lot on the same, or substantially the same, grounds only with the leave of a court of competent jurisdiction.”

As the second part of the relief sought, the applicant seeks an injunction to restrain the respondents from lodging a further caveat over the subject land.

There is no direct evidence of any threat that the respondents are likely to lodge any further caveat.  Although, given the respondents’ past resistance, one can understand the concern.

The lodging of this caveat seems to me to be part of the continuum of attempts by the respondents to overcome the effects of the default judgment about which they continue to feel aggrieved, notwithstanding the fact that the judgment has been twice reviewed.  One can only hope that with the benefit of competent legal advice, they will come to accept the position in which the parties now find themselves according to law which allows the applicant to sell the subject property for the same reasons that the respondents consented to the sale of other properties when the bank first made its demand in 1996.

Given the circumstance where the respondents cannot lodge a further caveat except with the leave of the court I am not prepared to grant the injunction sought by the applicant.  I will, however, direct the Registrar of the court to deliver a copy of this order and these reasons to the Registrar of Titles and the relevant Land Registry.

I order that the caveat lodged by Colin Richard Hubner and Yvonne Hubner on 22 July, 1998 (No.  702802901) over land described as Lot 1 on Registered Plan 701366, County of Nares, Parish of Cairns being the whole of the land contained in Certificate of Title 20502198 be removed.

I dismiss the application that the respondents be restrained from lodging further caveats over the said land.

I order that the respondents pay the applicant’s costs of and incidental to the application to be taxed.