Bendigo and Adelaide Bank Limited v Bridgen

[2016] QDC 220

DISTRICT COURT OF QUEENSLAND

CITATION:

Bendigo and Adelaide Bank Limited v Bridgen & another [2016] QDC 220

PARTIES:

BENDIGO AND ADELAIDE BANK LIMITED
ACN 068 049 178
(applicant/plaintiff)

v

NICOLE BRIDGEN
(respondent/first defendant)

AND

KEVIN JANSCH
(respondent/second defendant)

FILE NO/S:

BD 1667/16

DIVISION:

District Court of Queensland

PROCEEDING:

Civil Application

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

7 September 2016

DELIVERED AT:

Brisbane

HEARING DATE:

2 September 2016

JUDGE:

Butler SC, DCJ

ORDER:

The plaintiff recover against the defendants possession of the land described as all the land in title reference 13428050, County of Stanley, Parish of Ward, being lot 46 on RP96237 and known as 127 Sparks Road, Bray Park in the State of Queensland with appurtenances thereto this agreement.

CATCHWORDS:

PROCEDURE – DISTRICT COURT PROCEDURE – QUEENSLAND – APPLICATION FOR DEFAULT JUDGMENT – Where the mortgagor has defaulted under the mortgage – Where the mortgagor is deceased – Where the executor of the mortgagor’s estate consents to the plaintiff mortgagee’s recovery of possession – Where the property is occupied by the first and second defendant tenants – Where the lease has expired – Where the plaintiff mortgagee seeks possession of the property – Whether default judgment should be granted.

Land Title Act 1994 (Qld), s 78

Residential Tenancies and Rooming Accommodation Act 2008 (Qld), ss 317, 384

Uniform Civil Procedure Rules1999 (Qld), r 286

SOLICITORS:

Results Legal for the applicant/plaintiff

No appearance for the respondents/first and second defendants

1. The plaintiff seeks judgement against the defendants in default of their filing a Notice of Intention to Defend under r 286 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”). The action is for recovery of possession of land by the plaintiff mortgagee pursuant to s 78(2)(c)(i) of the Land Title Act 1994 (“Land Title Act”). The plaintiff alleges the mortgagor and registered owner of the land, Robyn Lesley Walker, defaulted under the mortgage.

Is the action properly brought against occupiers?

1. Relevant powers of a mortgagee are to be found in s 78 of the Land Title Act. That section relevantly reads:

“ Powers of mortgagee

(1)A registered mortgagee of a lot has the powers and liabilities of a mortgagee under the Property Law Act 1974, part 7.

(2)Without limiting subsection (1), but subject to the terms of the mortgage, if the mortgagor defaults under a registered mortgage, the mortgagee may –

…

(c)       by a proceeding in a court of competent jurisdiction –

(i)        obtain possession of the mortgaged lot; or

…

(3)The powers in this section are in addition to other powers exercisable by the mortgagee.”

1. Section 78 of the Land Title Act was considered by the Court of Appeal in Hupner v Australian New Zealand Banking Group Limited (unreported), appeal 5245/1998, delivered 7 May 1999. The Court of Appeal was considering an appeal against a default judgment ordering that a registered mortgagee recover possession of land from a defaulting mortgagor. The Court held that when a mortgagor defaults under a registered mortgage, the mortgagee may bring an action which is equivalent to an action of ejectment. It held that s 78 of the Land Title Act recognised the mortgagee’s right to “obtain possession of the mortgaged lot… by a proceeding in a court of competent jurisdiction”.  It further held that an action to “recover possession of any land” under O 6, r 7 of the since repealed Rules of Court constituted a proceeding for the purpose of s 78. I am satisfied that pursuant to power granted by s 78, a mortgagee may bring an action for possession of land by way of a claim under r 22 of the UCPR to recover against a defaulting mortgagor.

1. In this case the mortgagee has brought an action against tenants in occupation of the property rather than against the mortgagor. This more unusual course gave the Registrar pause and he declined to grant default judgment, observing that the mortgagor is not joined as a defendant. Accordingly, it is necessary I give consideration as to whether or not the power granted under s 78 of the Land Title Act permits an action for possession of land to be brought against occupiers in circumstances where no proceedings have been brought against the defaulting mortgagor. 

1. I conclude there is no impediment to such an action being brought. Section 78(2) extends a power to a mortgagee to obtain possession of the “mortgaged lot” by a proceeding in a court of competent jurisdiction. While that entitlement is conditional upon proof that the mortgagor has defaulted under a registered mortgage, the words of the section do not specify against whom possession may be obtained. At common law a person in possession, even if possession was obtained unlawfully, could nevertheless assert a right to possession against all except those who could demonstrate a better right. Possession, of course, is to be distinguished from ownership or other legal rights over a property. The law recognised that legal rights accrued from the mere fact of being in possession.

1. Under s 78(2)(a) a mortgagee, where there has been default, may take possession of the mortgaged lot in any way that does not contravene the criminal law. In circumstances where the mortgagor accepts the mortgagee’s entitlement to take possession there is no purpose to proceedings being commenced against the mortgagor. In my view, that should not prevent action being taken against an occupier who is unable to assert a better entitlement to possession than the mortgagee. The wording of s 78 does not suggest otherwise.

1. I hold that this claim against occupiers is properly brought under the UCPR in accordance with the power granted in s 78 of the Land Title Act, notwithstanding that proceedings have not been commenced against the mortgagor.

The evidence

1. The plaintiff seeks judgment by default pursuant to r 286 of the UCPR which specifically provides relief by way of recovery of possession of land against a defendant. It is necessary to determine whether there is any claim for delivery of possession as such a claim is excluded by sub rule 4 of r 286. No claim for the equitable remedy of delivery of possession is made in this case. This is a claim for recovery of possession of land. It is necessary that I consider the merits of the plaintiff’s claim in order to determine whether judgment should be given.

1. The plaintiff must prove the matters specified in s 78(2) of the Land Title Act.  Proof that Bendigo and Adelaide Bank Limited is a registered mortgagee is provided in the results of a current title search annexed to the affidavit of John Wayne Symons filed 29 July 2016.[1]  Evidence of default is proved through the affidavit of Mr Symons and the affidavit of Christine Kipps filed 2 September 2016.  Copies of the loan agreement and mortgage are annexed to the affidavit of Mr Symons and the statements of account setting out the mortgagor’s arrears history are also exhibited to that affidavit. Ms Kipps swears that the mortgagor remains in default.[2]  I am satisfied that the mortgagor fell into arrears, failed to rectify that and remains in default. 

   [1]See JS-1.

   [2]Paragraph 3(b)(i).

1. That the mortgagor is in default is confirmed by an affidavit of Matthew Walker, the executor of the deceased mortgagor’s estate.  Mr Walker’s affidavit states that the mortgagor died on or about 23 May 2016. Mr Walker swears that in his role as executor he is aware that the deceased entered into the loan agreement and gave a mortgage to the plaintiff and is in default under the loan agreement and mortgage.  The estate does not have capacity to pay the amount owing to the plaintiff to remedy the borrower’s default under the loan agreement. Mr Walker swears as follows:

“In my capacity as executor of the estate of the deceased, and as trustee of the borrower, I confirm that the estate and the borrower:

(a)does not seek to be joined as a party to the proceeding, or to be heard in respect of the proceedings; and

(b)consents to the plaintiff’s application for default judgment in the proceeding to recover possession of a property”.

1. It is submitted by the plaintiff that the property is occupied by the defendants under an expired tenancy agreement. A copy of the tenancy agreement is exhibited to the affidavit of Mr Symons. Mr Symons swears that the plaintiff did not consent to the tenancy agreement with the defendants which is exhibited to his affidavit. On the face of the tenancy agreement it expired on 24 April 2016. The evidence is that the defendants remained in occupation after that date. A Form 19 notice issued under s 317 of the Residential Tenancies and Rooming Accommodation Act 2008 was served by post on the occupiers of the residential address on 26 February 2016, requiring that they vacate the premises on 2 May 2016. Notwithstanding that service, Ms Kipps swears in her affidavit dated 2 September 2016 that the defendants are at present still in occupation.

1. On 17 May 2016 the claim and statement of claim were personally served on the defendants.[3] The defendants did not file a notice of intention to defend pursuant to r 137 of the UCPR and have not done so to date.  On 29 July 2016 the defendants were served with an amended statement of claim filed on 28 July 2016.  No defence to the amended statement of claim has been filed. A notice was served by post on each defendant advising of the hearing of this application.

   [3]Affidavits of service of Vanessa Lee Sanger, filed 22 June 2016.

Determination

1. I am satisfied the plaintiff has proved that the mortgagor defaulted under the registered mortgage and that the plaintiffs are entitled to possession of the land.  The defendants continue to occupy the property and have failed to comply with a notice under the tenancy legislation and have not filed a defence in the proceedings.  They failed to appear to be heard on this application. The plaintiff is entitled to assert possession against the defendants.  Judgment will be ordered in favour of the plaintiffs.

Order

1. The order of the court will be:

The plaintiff recover against the defendants possession of the land described as all the land in title reference 13428050, County of Stanley, Parish of Ward, being lot 46 on RP96237 and known as 127 Sparks Road, Bray Park in the State of Queensland with appurtenances thereto this agreement.