Bank of Western Australia Limited v Lowe & Ors

[2006] NSWSC 1166

CITATION:	Bank of Western Australia Limited v Lowe & Ors [2006] NSWSC 1166
HEARING DATE(S):	13 October 2006
JUDGMENT DATE :	13 October 2006
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	10/13/2006
DECISION:	Summary judgment for Plaintiff.
CATCHWORDS:	GUARANTEE – Whether summary judgment should be entered for Plaintiff – no arguable defence shown.
PARTIES:	Bank of Western Australia Limited – Plaintiff Dennis Richard Lowe – First Defendant Nicholas Halatsis – Second Defendant Blueprint Consolidated Pty Ltd – Third Defendant Putang Pty Ltd – Fourth Defendant
FILE NUMBER(S):	SC 50116/06
COUNSEL:	P. Dowdy – Plaintiff F. Donohoe – First Defendant N. Halatsis (in person) – Second Defendant A. Karam – Third & Fourth Defendants
SOLICITORS:	Henry Davis York – Plaintiff Lelehan & Co – First Defendant In person – Second Defendant In person – Third & Fourth Defendants

50116/06 Bank of Western Australia Limited v Lowe & Ors

JUDGMENT – Ex tempore
13 October, 2006

1    This is a Notice of Motion by the Plaintiff for summary judgment against the Defendants in these proceedings. There is also a Notice of Motion by the First Defendant to which I will come shortly. 2    The Plaintiff (“the Bank”), sues the First to Fourth Defendants on their joint and several guarantees and indemnity guarantee pursuant to a document dated 31 January 2005 where under the First to Fourth Defendants guaranteed the loan facilities granted by the Bank to a company called Blue Print Property Development Pty Ltd. The amount of the loan was some $2.6m. 3    The terms of the loan facility provided that the debtor was to repay the Bank by 8 June 2006. The debtor has defaulted in its obligations to repay. There is no dispute by the Defendants that the debt is in default. The Bank has called upon the guarantors to discharge their obligations under the guarantee. There is no dispute by the Defendants that the Bank is entitled to make that demand. 4    The Bank is secured for the debt by a mortgage over a certain property. The Bank has not endeavoured to sell the secured property to discharge the debt. The Defendants do not dispute that the Bank is entitled to take that position and that it is entitled to call upon their guarantee rather than exercising its powers of sale under the mortgage. 5    The First Defendant has been advised that the solution, as far as he is concerned at least, is to pay out the Bank's debt and to take an assignment of the Bank's security, that is, the mortgage. He wishes then to sell the mortgaged property to recover the amount that he has had to pay the Bank in discharge of the principal obligation. 6    The First Defendant has on several occasions endeavoured to seek the Bank's co-operation in a simultaneous settlement of transactions whereby the First Defendant repays to the Bank the whole of the guaranteed debt, the Bank assigns the subject mortgage to the First Defendant, the First Defendant sells the secured property to a purchaser or purchasers which the First Defendant has already found, so that the money required by the First Defendant to discharge the debt to the Bank comes from the purchase price of the property and the First Defendant is not out of pocket between the time that he has to repay the Bank and the time he receives the proceeds of sale of the mortgaged property. 7    Unfortunately such a convenient solution to the First Defendant’s difficulty has not been found. The First Defendant has encountered some complexity in the sale transaction because the mortgaged property is subject to a number of encumbrances and the First Defendant has to be assured that if he sells as mortgagee to the purchasers whom he has found, there will not then be complaint by subsequent encumbrances that the property has been sold for undervalue. Accordingly, the First Defendant has been obliged to procure a current valuation of the property. This has taken some time and, so I am informed, the valuation has not yet been obtained. 8    In short, the First Defendant has not been in a position to stipulate to the Bank a date upon which the First Defendant has been, or would have been, ready, willing and able to discharge the debt to the Bank in full. 9    The First Defendant, however, resists the entry of summary judgment on the basis that there should be an adjournment of the application until such time as the First Defendant is able to obtain the valuation, arrange a settlement whereby he can pay to the Bank the Bank's debt, and obtain the purchase price for the property simultaneously. The First Defendant says that he wishes to insist upon a Cross Claim seeking specific performance of the Bank's obligations to assign to him the subject mortgage upon payment by him of the principal debt in full. 10    It is unfortunate that the complexities of the conveyancing transaction have resulted in difficulty in arranging a simultaneous settlement of all of the transactions which would be necessary to enable the Bank to be paid in full and the First Defendant to receive the proceeds of sale of the subject property in order to pay the Bank. 11    However, the Bank has never denied that it is obliged in law to assign the mortgage to the First Defendant upon payment of its debt in full by the First Defendant. Its position has been that it is for the First Defendant to arrange the means and timing of payment and, when the First Defendant is able to tender the full amount in discharge of the debt to the Bank, the Bank is then perfectly prepared to assign the mortgage. 12    It seems to me that the Bank is entitled to take this position. I do not see that there is any defence, even remotely arguable by the First Defendant, that the Bank is not entitled to judgment on the debt, as it now seeks. It will then be for the First Defendant to arrange for discharge of the judgment debt. One would hope that there would be some sensible co-operation between the solicitors for the parties to avoid needless expense, trouble and delay in discharging the Bank's debt and assigning the Bank's mortgage to the First Defendant, but I do not think that the matter is yet in the position that the First Defendant could be entitled to an order for specific performance against the Bank of the Bank's obligation to transfer or assign the mortgage to the First Defendant. The Bank's position is, strictly speaking, perfectly in accordance with its legal obligations, that is, if and when tender of the debt in full is made to it, it will then assign the mortgage to the First Defendant or otherwise at the direction of the First Defendant. There is therefore no issue properly determinable yet on the First Defendant's Cross Summons. 13    The position of the First Defendant in these proceedings is mirrored in the position of each of the other Defendants, none of whom has wished to add anything to the submissions made by Mr Donohoe on behalf of the First Defendant. It seems to me therefore that, although in the Commercial List it is comparatively rare for the Court to entertain an application for summary judgment, this is a clear case in which no defence has been made out by the Defendants to the Plaintiff's claims so that judgment should be entered as sought. 14    In accordance with the reasons for judgment which I have just given, I will make orders on the Plaintiff's Notice of Motion for summary judgment in accordance with the Short Minutes of Order initialled by me, dated today and placed with the papers. 15    On the Notice of Motion filed by the First Defendant, I make orders in terms of paragraphs 1 and 2 of that motion.
– oOo –