ANZ v Elias

[2017] VSC 663

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI  2016 02390

BETWEEN:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED	Plaintiff
v
SANDRA ELIAS	Defendant

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JUDGE:	Mukhtar AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	27 October 2017
DATE OF JUDGMENT:	27 October 2017
CASE MAY BE CITED AS:	ANZ v Elias
MEDIUM NEUTRAL CITATION:	[2017] VSC 663  First revision 9 November 2017

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EXECUTION –  Mortgagee’s judgment for possession of land – Enforcement by warrant of possession – Warrant executed – Subsequent re-entry and hindrance by mortgagor – Rules silent on procedure to file and execute new warrant – Court’s power to allow filing of fresh warrant – Court’s ancillary power in aid of enforcement to restrain mortgagor from attempting another re-entry – Court’s coextensive inherent jurisdiction – Supreme Court (General Civil Procedure) Rules 2015 r 66.15.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S Rogers, solicitor	Gadens
For the Defendant	No appearance

HIS HONOUR:

1. I have seen it fit to prepare these reasons as this application is a convenient opportunity for the Court to state its views, aided by the submissions received on behalf of the plaintiff today, on a problem which appears to be occurring with greater frequency in ordinary mortgagee possession cases.  That is, cases where a mortgagee obtains a judgment for possession of mortgaged land; a warrant of possession is issued; the Sheriff executes the warrant and gains actual possession by changing the locks on the premises and possibly chaining entrance gates; and the mortgagor then re-enters the premises, re-changes the locks and re-chains the gates.  This is precisely what occurred in this case. 

1. In Perpetual Limited v Field,[1] I considered the question of the procedural step to be taken in this Court in the situation where a warrant of possession is executed; the judgment creditor is given actual possession (and therefore the warrant is spent); and later, the judgment debtor returns into possession by one means or another including a re‑changing of locks or a prevention of re-entry.   

   [1][2010] VSC 445.

1. In Field, I put to one side the possible availability of proceedings for contempt of court, or of a civil or criminal proceeding in trespass and looked to whether the Court could give leave to the judgment creditor to issue a fresh warrant under the authority of which the Sheriff could re‑take possession of the land.  The problem is there is no provision in the Rules to deal with this situation.  Rule 66.15 empowers the Court to ‘make such order as it thinks fit in aid of the enforcement of a warrant of execution’.  But my view remains that, properly construed, that rule does not apply where the warrant has already been exercised or spent.  After looking at some methods used in past cases, my judgment in Field concludes with the view that as the judgment for possession is valid and still subsists, there was no reason in principle why the judgment should not continue to form a legal basis for the issuing of another warrant of possession.  Departing from the view taken in an earlier case, I viewed it as undesirable to create a new species of warrant (such as ‘warrant of restitution’ or ‘warrant of restoration’).  The solution in my view was to give leave to file a new warrant of possession. 

1. Giving such leave ought be sufficient to enable the plaintiff here to arrange for the Sheriff to recover possession of the mortgaged land.  The difficulty lies with the ancillary orders sought by the plaintiff ‘in aid of execution of the warrant’ to restrain the defendant and her husband Mr Phillip Elias from re-entering and remaining on the property after the warrant is enforced for the second time.  On the facts, there is a manifestly reasonable basis for that apprehension. 

1. The orders I have made enable the plaintiff to regain possession and in addition, by way of deterrent, make a restraining order against the defendant and Phillip Elias  prohibiting them from making another re‑entry and interfering with the future exercise of the power of sale.   By these reasons, I shall expose the legal basis on which the restraining order has been made. 

1. The facts are not elaborate.  On 12 August 2016 the plaintiff, as mortgagee, obtained judgment against the defendant for possession of mortgaged land at 64 Railway Parade in Dandenong.  The judgment also included an obligation to pay the plaintiff money secured of $345,875.33 and $2,563.45 for interest and $3,600 for costs.  It was a default judgment in default of appearance.  The cause of action was based on a loan agreement dated 21 October 2014 for a loan of $336,000 the security for which was a registered mortgage dated 21 October 2014.  Default occurred (avoiding precise dates for present purposes) in May 2016 followed by demands from the bank.  The default was not remedied, leading to a writ being filed on 21 June 2016.  Shortly thereafter the judgment was entered. 

1. A warrant of possession was issued on 10 April 2017.  On 25 July 2017, the Sheriff executed the warrant and the bank took vacant possession of the property.  The bank’s agents arranged for the changing of all locks and the securing of all windows, gates and a garage door. 

1. The events which occurred subsequently are stated in a comprehensive affidavit sworn by Sarah Jane Rogers on behalf of the bank on 6 October 2017.  I need not rehearse its precise contents.  It is sufficient to say that in August 2017, that is shortly after the bank took possession, the bank offered to come to an arrangement with the defendant to hand back possession of the mortgaged property if arrears were paid with costs outstanding by 10 November 2017 and a repayment of the account in full by the same date.  The borrower seemed not to be interested in such an arrangement.  Come mid‑August 2017, the bank discovered that a new padlock and chain had been fitted to the front gate.  Later, a much bigger chain and padlock was fitted which prevented the bank’s contractor from being able to cut through them and gain access to the property.  In September 2017, the bank’s agents attended the property to remove the chain and padlock and re-secure possession.  A male person arrived at the property stating he was the owner and blocked the gate entrance.  On about 12 September 2017, the bank by its solicitors wrote to the defendant asserting the bank’s right to vacant possession of the property, and requested the defendant to vacate the property and surrender the keys by 19 September 2017 failing which the bank would apply for another warrant of possession as well as restraining orders prohibiting the defendant from re‑entering the property.  The defendant and her husband have not surrendered the keys and have not made any further contact with the bank. 

1. By a summons filed on 9 October 2017, the bank seeks an order permitting the issue of another warrant commanding the Sheriff to enter the land and restore the plaintiff into possession, and for an order to restrain the defendant and Mr Philip Elias (who is known to the defendant in previous dealings on the mortgage accounts) from making any attempt to re-enter and remain on the property, or to restrain them from preventing, hindering or interfering with the plaintiff in retaking possession and in the exercise of its power of sale.  On 17 October 2017, Judd J referred the hearing of the summons to an Associate Judge under r 77.05.  In the outcome, I have made the restraining order in exercise of original jurisdiction under the rules.  The exercise of inherent jurisdiction is also within the authority of an Associate Judge.

1. The summons seeks the restraining orders under r 66.15, or, r 1.15, or, the inherent jurisdiction of the Court. I think that the power to make a restraining order is available under r 66.15 or the inherent jurisdiction of the Court. I do not think the power comes from r 1.15 which is purely procedural. I think, as a matter of completeness of the analysis, the source of power under r 66.15 or the inherent jurisdiction coheres with the likely availability of a quia timet injunction in the Court’s auxiliary jurisdiction to restrain a trespass.  But, as I think the restraint can be obtained under the Court’s rules, resort to an injunction is unnecessary.

1. Rule 1.15 deals with the situation where the manner and form of the procedure by which the power of the Court is exercisable is not prescribed by the rules, or there is some doubt about the manner and form of the procedure. In that situation, the Court can determine the procedure to be adopted. But that rule is not the source of power. It is purely procedural. More pertinent is r 66.15. That rule is designed patently to be in aid of the enforcement of a warrant of execution. Rule 66.15 states:

(1)The Court may make such order as it thinks fit in aid of the enforcement of a warrant of execution and for that purpose may make an order that any person, whether or not a party –

(a)       attend before the Court to be examined;

(b)       do or abstain from doing any act.

(2)An application for an order under paragraph (1) may be made by the sheriff or other person to whom a warrant of execution is directed.

1. The expression in sub-rule (1) ‘do or abstain from doing any act’ is in the language of a prohibitive injunction, and the language in sub-rule (1) that the order can be made against ‘any person, whether or not a party’ means that an order doing an act or abstaining from doing an act can be made against someone other than the defendant.

1. At first I was inclined to the view that an order under r 66.15(1) was available only on the application of the Sheriff or other person to whom a warrant of execution is directed.  That is, it did not appear to be available to the judgment creditor.  But I think the better construction is that sub-rule (2) is purely permissive, not exclusive.  It is not saying that only the Sheriff can seek the order.  I think it is enabling the Sheriff, who is not a party to the proceeding but is performing the operative function of execution, to make the application.  So understood the rule does not deprive the judgment creditor from applying. 

1. The facts as I have recited them justify the making of a restraining order under r 66.15. The judgment for possession stands, not having been set aside. The defendant and Mr Philip Elias and possibly those acting on their instructions are acting in defiance of the Court’s processes of enforcement. The evidence I think clearly gives rise to a reasonable apprehension that a re-entry by the Sheriff will result in them, again, re-entering themselves. The same facts I think would justify a quia timet injunction.[2]  The restraining order as sought ought operate as a deterrent. 

   [2]As to which see Balkin and Davis, Law of Torts (4^th ed) [5.20-5.22] and Meagher Gummow and Lehane’s Equity Doctrines and Remedies (5^th ed) [21-110]. 

1. My construction of r 66.15 is consistent with my view that such a restraining order would also be available in exercise of the Court’s inherent jurisdiction. That jurisdiction can be invoked whenever necessary for the administration of justice including insuring that there is efficacy to judicial proceedings and no hindrance to the due administration of court process. It has been explained this way:[3]

It is not surprising that those peculiarly concerned with the due administration of justice should arrogate to themselves power designed to punish or impede persons who seek to circumvent the due process of law, whether litigants or not.  Much of the law of contempt involves the punishment of persons whose actions are calculated to interfere in this way with the administration of justice.  Stating the matter in positive terms, courts have wide inherent powers to ensure that justice is not denied to those who litigate before them.

[3]Keith Mason, ‘The Inherent Jurisdiction of the Court’ (1983) 57 ALJ 449, 452.

1. It is enough to say that what has occurred here is frustrating and defying the Court’s processes of enforcement of judgments lawfully obtained. If there should be any doubt about the availability of r 66.15 to deal with that wrongdoing then I would hold the very same orders as sought could be made in exercise of the Court’s inherent jurisdiction. In either case the order can be made not only as against the judgment debtor but ‘any other person’. Therefore, the orders made in this case can extend to Mr Philip Elias.

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