Bank of China v Guo

[2007] NSWSC 1337

CITATION:	Bank of China v Guo [2007] NSWSC 1337
HEARING DATE(S):	22/11/07
JUDGMENT DATE :	26 November 2007
JUDGMENT OF:	Bell J at 1
DECISION:	1. Strike out the defence filed on 20 August 2007; 2. Judgment for the plaintiff for possession of the properties being units 2608, 2707 and 2805 348-354 Sussex Street, Haymarket, Sydney and being Folio Identifiers 260/SP57702, 266/SP57702, 271/SP57702, 411/SP57702, 414/SP57702, 446/SP57702 and 447/SP57702 (the “properties”); 3. Leave to the plaintiff to issue a writ for possession of the properties; 4. The defendant is to pay the plaintiff’s costs as agreed or assessed
CATCHWORDS:	Application for summary judgment
LEGISLATION CITED:	Conveyancing Act 1919 Criminal Appeal Act 1912 Landlord and Tenant Amendment Act 1948 Real Property Act 1900 Supreme Court Act 1970 Uniform Civil Procedure Rules 2005
CASES CITED:	General Steel Industries Inc v Commissioner for railways (NSW) (1964) 112 CLR 125
PARTIES:	Bank of China (Plaintiff) Yuejin Guo (Defendant)
FILE NUMBER(S):	SC 2007/12101
COUNSEL:	C.R.C. Newlinds SC (Plaintiff) R. W. Killalea (Defendant)
SOLICITORS:	Websters Solicitors (Plaintiff) Yuejin Gou (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
POSSESSION LIST

BELL J

Monday 26 November 2007

2007/12101 Bank of China Limited (ABN 29 002 929 955) v Yuejin Guo

JUDGMENT

1 BELL J: By notice of motion filed on 28 August 2007 the plaintiff claims an order striking out the whole of the defence as disclosing no reasonable defence under Part 14, r 14.28 of the Uniform Civil Procedure Rules 2005 (the UCPR) and judgment for possession of units 2608, 2707 and 2805 348-354 Sussex Street, Haymarket, Sydney and being Folio Identifiers 260/SP57702, 266/SP57702, 271/SP57702, 411/SP57702, 414/SP57702, 446/SP57702 and 447/SP57702 (the “properties”).

2 Mr Newlinds SC, who appeared for the plaintiff, read the affidavits of Godwin Chin, sworn 28 August 2007, Stephen Roy Webster, sworn 22 November 2007 and John Timmins Dorahy. Mr Dorahy’s affidavit concerns the date on which the mortgage was executed, in light of a concession made by Mr Killalea, who appeared for the defendant, it does not require further consideration.

3 The statement of claim was filed on 27 April 2007 and claims judgment for possession of the properties under a mortgage (No. AC812744T “the mortgage”) by which the defendant covenanted to pay to the plaintiff all moneys, all interest and charges pursuant to, or purporting to be pursuant to, a deed of settlement and release between a number of parties including the defendant and the plaintiff dated 29 September 2006 (the deed of settlement). The plaintiff pleads the defendant’s acknowledgment in the deed of settlement of the sums of AUD$3,754,322.54 and USD$1,485,895.51 as owing by him to it as at 18 September 2006 with interest accruing daily.

4 The plaintiff pleads default in the performance of the covenants contained in the mortgage for the repayment of the amounts owing to the plaintiff.

5 Before turning to the defence I will refer to the history of dealings between the plaintiff and the defendant that is not in issue.

6 Proceedings were brought by the plaintiff in the Equity Division of the Court (Proceedings 4958/06) against the defendant and three other parties. These proceedings were settled on the terms set out in the deed of settlement (Ex “A” pp108-120).

7 The deed of settlement contained the following acknowledgment:

2.1 Guo acknowledges that he is indebted to the Bank for the Moneys owed and that the Bank is entitled to be registered as first mortgagee over the Units as security for the moneys owed in addition to any other securities including the Guarantee.
2.2 The defendants agree and acknowledge that the Bank is entitled to and consents to the orders set out in the Short Minutes of Order and the Bank shall file the Executed Short Minutes within seven (7) days of receipt.

The short minutes of order to which cl 2.2 referred provided as follows:

1. An order that the third defendant, Foremost Apartments Pty Limited (ACN 076 579 309 (“Foremost”) deliver the titles to and an executed Transfer in registrable form over the units being lots 260, 266, 267 and 271 and five car spaces being lots 411, 412, 414, 446 and 447 in Strata Plan 57702 (“the Units”) to the first defendant, Yuejin Guo (“Guo”) within 60 days of the date of these orders, time being “of the essence”.
2. An order that Guo deliver to the Bank the titles to the Units and an executed first mortgage in registrable form over the Units to the Bank such that the Bank is able to be registered as first mortgagee over the Units within 60 days of the date of these orders, time being “of the essence”.
3. An order that in default of Orders 1 and/or 2 above the Registrar be empowered to do all such things and sign all documents as necessary to give effect of the said orders.
4. The proceedings otherwise be dismissed with no order as to costs.
THE COURT NOTES THE AGREEMENT BETWEEN THE PARTIES.
5. AS PER DEED annexed and marked “A”.

8 The orders in the terms of the short minute were entered on 20 October 2006.

9 On 11 December 2006 Joanne Ineke Gray, a deputy registrar of the Court, signed the mortgage on the defendant’s behalf (Ex “A” p 26).

10 The defendant filed a defence, which is dated 20 August 2007. By his defence he does not admit the material facts pleaded by the plaintiff and, in answer to the whole of it, asserts that the deputy registrar was not authorised to sign the mortgage.

11 Paragraph 3 of the defence appears to raise an issue concerning the execution of the mortgage on a date prior to 29 November 2006. Mr Killalea, who appeared on the defendant’s behalf, disavowed reliance on such a contention. It was conceded that the mortgage was signed by Ms Gray on 11 December 2006. The sole issue raised by the defence is the due execution of the mortgage since Ms Gray held appointment as a deputy registrar and not as a registrar at the time she purported to execute it on the defendant’s behalf.

12 Mr Newlinds submitted that Ms Gray was empowered to execute the mortgage under the terms of order 3 because the words “the Registrar” included a deputy registrar. In his submission the defendant was bound to fail in any defence to the proceedings however pleaded by reason that (i) in the absence of any assertion of equitable fraud (which was not asserted) the plaintiff had obtained indefeasible title and (ii) there exists an issue estoppel between the parties as to the right of the plaintiff to a mortgage and the authority of the Registrar to execute the mortgage on behalf of the defendant by reason of the entry of the orders and any defence must seek a result inconsistent with the orders.

13 In his written submissions, Mr Newlinds relied on the definition of registrar contained in s 19(1) of the Supreme Court Act 1970 (the SCA) in support of the contention that a deputy registrar is a registrar:

registrar means a person who is for the time being appointed to and holding an office of registrar, as referred to in section 119, and includes:
(a) a person who is for the time being appointed to act temporarily in an office of registrar (as referred to in section 120 (b)), and
(b) a person who is for the time being appointed as a deputy to the holder of an office of registrar (as referred to in section 120 (c)), whether designated as a deputy, assistant or otherwise, but only when the person is exercising a power conferred by or under this Act or the Criminal Appeal Act 1912 on the holder of an office of registrar with the authority of that holder or a person for the time being appointed to act temporarily in the office of that holder, and
(c) a person who is authorised under section 120A to exercise any power conferred by or under this Act or the Criminal Appeal Act 1912 on the holder of an office of registrar, but only when the person is exercising such a power.

14 Section 119 of the SCA provides:

119 Offices of registrars
(1) There are such registrars as may be appointed from time to time, including a Principal Registrar of the Court, a Registrar of the Court of Appeal, and a Registrar of each Division.
(2) The registrar of the Common Law Division shall be called the Prothonotary.
(3) Notwithstanding the provisions of any other Act, a registrar may exercise the powers of any other registrar if and so far as he or she is authorised to do so by the rules, and, when so doing, he or she shall be deemed to be that other registrar.

15 Section 120 of the SCA provides:

120 Appointment

The following persons may be employed under Chapter 2 of the Public Sector Employment and Management Act 2002:
(a) persons to fill the offices mentioned in section 119,
(b) persons to act temporarily in any of those offices,
(c) persons to be deputies of any of those officers (whether designated as deputies, assistants or otherwise),
(d) such other officers as may be necessary for carrying out the provisions of this Act and the rules and any other Act, regulations or rules relating to the Court.

16 It was not in issue that Ms Gray was appointed as a deputy registrar at the material time.

17 In Mr Killalea’s submission, when Ms Gray signed the mortgage she was not exercising a power conferred by or under the Supreme Court Act or the Criminal Appeal Act 1912, nor is there any evidence that she was authorised by a registrar to execute the mortgage. In his submission, the order was in clear terms and reflected the parties’ intention that only those persons holding the office of registrar would be empowered to sign documents on the defendant’s behalf.

18 It was not submitted that the execution of the mortgage and its subsequent registration involved any element of equitable fraud. Mr Killalea met the plaintiff’s submission based upon the indefeasibility of its title by the contention that the Court would withhold summary judgment thereby allowing the defendant the opportunity to apply to the Registrar-General to cancel the mortgage under s 32(6) of the Real Property Act 1900 (NSW). This would regularise matters and the plaintiff would be able to procure the execution of a mortgage in the same terms and over the same properties by a person holding appointment as a registrar.

19 It is necessary to determine what effect is to be given to the words “the Registrar” in order 3. The parties were agreed that it was to be understood as a reference to an officer of this Court although the same is not stated. The parties were also agreed that the power conferred by the order is not confined to a registrar since it would extend to authorising a judge or associate judge to sign the mortgage and to do all such things as are necessary to give effect to the orders. In Mr Killalea’s submission the power does not extend to the holder of any lesser office. The parties’ agreement was to be understood as confining the power to those persons actually holding appointment as a registrar (or judge or associate judge) since this was a significant function involving the execution of security documents in registrable form relating to property of substantial value.

20 The evident purpose of order 3 was to provide a mechanism to give effect to the parties’ agreement in the event of the defendant’s default by authorising an officer of the court to sign the necessary documents. Persons appointed as deputy registrars may be authorised to exercise any of the powers conferred on a registrar under the Supreme Court Act and the Criminal Appeal Act. In practice it is common for deputy registrars to be authorised to carry out the range of functions conferred on registrars. The execution of the mortgage pursuant to the order did not involve the exercise of a power under the SCA and it follows that Ms Gray in signing the document was not a registrar within the meaning of s 19. Order 3 empowers “the Registrar” to do certain things. There is no office of “the Registrar” of the Court. I consider in light of the scheme of the SCA and the practice to which I have referred that it is implicit that order 3 empowered officers of the court holding appointment as registrars and deputy registrars to sign all necessary documents.

21 As I have stated, the defendant does not question the plaintiff’s entitlement to a mortgage over the properties in the same terms as the mortgage nor is the fact of default under the terms of the deed of settlement in issue. The sole question that the defendant raises by way of defence to the plaintiff’s claim is the construction of order 3. The determination of this issue does not involve any disputed matter of fact. I have concluded that the defence is so clearly untenable that it cannot succeed: General Steel Industries Inc v Commissioner for railways (NSW) (1964) 112 CLR 125 per Barwick CJ at 130. I propose to strike out the defence in its entirety.

22 I turn now to the claim for summary judgment.

23 The mortgage secured the repayment to the plaintiff of all loans and advances of money made by it to the defendant at any time pursuant to or purporting to be pursuant to the deed of settlement, together with any further monies advanced by the plaintiff to the defendant and, without prejudice to the generality of the foregoing, the sum of AUD$3,754,322.54 and USD$1,485,895.51 as at 18 September 2006 with interested at the rate of AUD$917.78 per day and USD$331.01 per day plus costs and charges pursuant to the deed of settlement.

24 The mortgage incorporates the provisions of memorandum No. 0871329 filed at the Land Titles Office, Sydney. Clause 12 of that memorandum provides, inter alia, that upon default being made in payment of the secured moneys or any part thereof or of the interest thereon or any part thereof or upon occurrence of any other event of default the Bank shall be at liberty to exercise all or any of the powers of a mortgagee under the Real Property Act 1900 as amended and the Conveyancing Act 1919 as amended.

25 In his affidavit Mr Chin deposes to the defendant having defaulted under the mortgage and to service on him of a notice pursuant to s 57(2)(b) of the Real Property Act and s 111(2)(b) of the Conveyancing Act. A copy of the notice forms part of Ex “A”.

26 In his affidavit Mr Webster deposes on information and belief to the three occupiers of the premises (being occupiers other than parties to the proceedings) having been served with a notice pursuant to r 6.8 of the UCPR and that the time allowed for these persons to apply to the Court to be joined as a defendant having passed: Part 16 r 16.4(3)(a) and (b) of the UCPR

27 Mr Webster states that the commencement and maintenance of the proceedings and the making of the orders that are sought do not contravene s 2A of the Landlord and Tenant Amendment Act 1948.

28 Mr Webster deposes to the defendant’s failure to pay AUD$5,856,828.95 by 18 March 2007 pursuant to the terms of the mortgage and that such default was continuing as at 22 November 2007. No payments have been received from the defendant in respect of the moneys owed under the mortgage.

29 I am satisfied that the plaintiff has proved the elements of its cause of action and is entitled to the relief that it claims in its statement of claim.

30 For these reasons I make the following orders.

ORDERS

1. Strike out the defence filed on 20 August 2007;

2. Judgment for the plaintiff for possession of the properties being units 2608, 2707 and 2805 348-354 Sussex Street, Haymarket, Sydney and being Folio Identifiers 260/SP57702, 266/SP57702, 271/SP57702, 411/SP57702, 414/SP57702, 446/SP57702 and 447/SP57702 (the “properties”);

3. Leave to the plaintiff to issue a writ for possession of the properties;

4. The defendant is to pay the plaintiff’s costs as agreed or assessed.

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