Bank of Queensland Limited v Leese

[2017] QDC 260

DISTRICT COURT OF QUEENSLAND

CITATION:

Bank of Queensland Limited -v- Leese [2017] QDC 260

PARTIES:

BANK OF QUEENSLAND LIMITED

(respondent/plaintiff)

v

SIMON JOHN LEESE

(applicant/defendant)

FILE NO/S:

662 of 2016

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

Brisbane

DELIVERED ON:

3 October 2017

DELIVERED AT:

Brisbane

HEARING DATE:

3 October 2017

JUDGE:

Rackemann DCJ

ORDER:

The application is refused. The monies paid into court are to be paid out to the solicitors for the applicant/defendant. There are no orders as to costs.

CATCHWORDS:

MORTGAGES – MORTGAGEE’S REMEDIES – SALE UNDER POWER – where mortgagor defaulted on mortgage - where default judgment entered for recovery of land and enforcement warrant issued – where application for relief under s 95 of Property Law Act 1974 previously dismissed – where mortgagee granted liberty to proceed with eviction without notice if outstanding debt not discharged – whether relief ought be granted on an urgent basis under s 95 of Property Law Act 1974 or rr 895 or 907 of Uniform Civil Procedure Rules 1999.  

COUNSEL:

Solicitor for the respondent-plaintiff

K A Gothard for the applicant-defendant

SOLICITORS:

Dibbs Barker for the respondent-plaintiff

K A Gothard for the applicant-defenant

1. This is an application for relief under section 95 of the Property Law Act. It is brought by the owner of a dwelling at the Glasshouse Mountains. That dwelling is the subject of a mortgage in favour of the Bank of Queensland to secure the indebtedness of the applicant/defendant under two loan agreements entered into in 2011. The applicant/defendant fell into arears in respect of those loan agreements with the consequence that accelerated payment provisions were triggered, requiring the entirety of the loan is to be discharged.

1. Proceedings were commenced in this court in 2016 for recovery of the land and for the amounts owing under the agreements.  On 10 January 2017, default judgment was entered for recovery of the land and for the defendant to pay the plaintiff the amount $280,308.76, including $13,613.83 interest to the day of that judgment and $2546.30 costs.  Thereafter, an enforcement warrant issued for possession of the land. 

1. In response to the enforcement warrant, the applicant/defendant brought an application for relief under section 95. That was dismissed by consent on the 7th of September 2017 with no order to cross and with further orders that the plaintiff be at liberty to reschedule an eviction for not before the 27th of September 2017 and be at liberty to proceed with an eviction without further notice in the event that the defendant had not discharged all debt by that date. The defendant, as it happens, did not discharge the debt by that date and the plaintiff has made arrangements to proceed with an eviction tomorrow. In the circumstances, the applicant/defendant has made a further urgent application for relief, pursuant to section 95 of the Property Law Act. Relief was sought in alternative, pursuant to rule 895 or 907 of the UCPR, but the application focused upon section 95.

1. Section 95 of the Property Law Act provides relevantly as follows:

(1) Where default has taken place—

(a) in payment of any instalment due of principal or interest under a mortgage; or

(b) in the observance of any covenant or obligation in a mortgage;

and under the terms of the mortgage an accelerated sum may or has, because of such default or of the exercise upon such default of any option or election conferred by the mortgage, become due and payable, the mortgagor shall be entitled to relief under this section.

(3)  The mortgagor, in any proceedings brought to enforce the rights of the    mortgagee or brought by the mortgagor, may—

(a) upon undertaking to the court to perform any such covenant or obligation; and

(b) upon tender or payment into court of such instalment;

apply to the court for relief from the consequences of such default, and the court may grant or refuse relief (whether by staying proceedings brought by the mortgagee or otherwise) as the court, having regard to the conduct of the parties and to all other circumstances, thinks fit, and in the case of relief may grant it on such terms (if any) as to payment of any reasonable expenses of the mortgagee and as to the costs or otherwise as the court in the circumstances thinks fit.

1. The applicant/defendant has paid into court the sum of $21,660.61, being the amount, as best as it can be calculated, of the instalments due under the loan agreement;  that is, the arrears, and is prepared to undertake to the court future performance of his obligations under the agreement.  Accordingly, the court’s power to make an order granting the relief is enlivened.  The remaining question is whether the court should grant the relief as a matter of discretion.  That was the focus of the submissions. 

1. In seeking to persuade the court to grant the relief, it was urged on behalf of the applicant/defendant that he has owned and resided at the property for a lengthy period of time, since 1994; that he has done his best to remedy the situation by paying the arrears into Court, that he has made payments to reduce his indebtedness in the past – as was evident from the fact that the total amount of indebtedness was reduced from the time when the action was commenced to the time when the default judgment was obtained, and that he, in his affidavit in support of his application, has explained the circumstances in which he fell into arrears, and has explained that he is now in a position to perform his undertaking to the Court to perform his obligations in the future. Further, it was pointed out that the property is one in respect of which there is some equity and that the bank is protected by the fact, that if an order is made, then the stay can easily be removed, pursuant to section 95(4) of the Act in the event that there is any future default.

1. The applicant/defendant’s position is not, however, without some difficulty, as was pointed out on behalf of the plaintiff/respondent.  The affidavit of the applicant/respondent refers to some difficulties which he says he has had in 2016 and 2017; however, the material shows that his default history in respect of the loans dates back to 2013.  His history since then includes a history of default and of hardship applications showing continuing problems over that period.

1. That is not to say that he has been uncaring about his obligations.  It was pointed out, by his counsel, that he has made arrangements to have some moneys paid into his accounts from his superannuation, for example.  But it does show an ongoing difficulty with being able to meet the obligations of his loan agreement.  His undertaking to perform covenants in the future is more a statement of hope than something which is based upon any real evidence.  All that is really offered is a statement that he proposes to return to work at a particular employer at a particular wage.  The wage is not one which is particularly high.  And, indeed, when one looks at the letter from the employer, it is the same wage his employer says he was on in the past, in a period during which he was having difficulties in making his payments. 

1. The only other information provided was that he presently has some tenants in his house to help supplement his income.  What the details or future of those arrangements are, apart from the current weekly amount, is unknown.  Certainly the affidavit does not go into a detailed financial assessment of his ability to meet his obligations into the future. 

1. It seems to me that when one views Mr Leese’s intentions in the context of the reality of his performance over a substantial period of time, the court could have little confidence in his prospects of performing in the future the covenant or his obligations under the loan agreement, notwithstanding that he offers an undertaking to do so.  In the circumstances, I consider that the stance taken by the bank, which is to evict unless the sum can be paid out in full by way of a refinance, rather than to continue is not unreasonable, and in the circumstances, it seems to me, as a matter of discretion, the appropriate order is to decline the relief which has been sought. 

1. I will order that the moneys paid into court be paid out to the solicitors for the applicant/defendant, and that there be no order as to costs.