Bogdanovic v Koteff

[1988] HCATrans 240

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S51 of 1988

B e t w e e n -

SANDRA BOGDANOVIC

Applicant

and

NORMAN KOTEFF

Respondent

Application for special

leave to appeal

WILSON J
DAWSON J

TOOHEY J

Bogdanovic

TRANSCRIPT ·oF PROCEEDINGS

AT SYDNEY ON FRIDAY t 14 ·OCTOBER '1988 ,· 'AT 10 ~ 42 AM

Copyright in the High Court of Australia

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MR I. WALES: May it please the Court, I appear for the

applicant. (instructed by Vickovich & Associates).

MR N.R. BURNS: If the Court pleases, I appear for the

respondent. (instructed by Philip Goldman & Co).

WILSON J:  Mr Wales, what is the state of the matter in the

Does the pros,p·ect of a further appeal, even if light of the affidavit that has just been filed?

your present application was granted, offer your

client any relief that you could avail yourself of?

MR WALES:  Yes, it does, Your Honour, for these reasons:

it certainly is common ground that the applicant

has vacated the premises. The reason for that is

and this is common ground as well: the premises

were, before the commencement of the action,

mortgaged by the proprietor, who is the respondent.

The respondent fell into default under the mortgage

and the mortgagee commenced to assert its rights
and issued notices of intention to claim possession

of the premises. It was our view that the mortgagee

being in the position of a bona fide purchaser for

value, that we had no defence to the claim for

possession by the mortgagee. Accordingly, we

sought no further stay of the ejectment order

made by the judge at first instance and we have,

as the affidavit says, vacated the premises.

What - - -

TOOHEY J:  I am not clear, Mr Wales. The affidavit suggests

that the action taken to dispose of the respondent's

interest in the land was by way of contract rather

than some action taken by the mortgagee.

MR WALES: Well, certainly, my instructions are that there

was a mortgage on the premises and that·is common

ground and that the mortgagee was asserting its

rights and it was in the light of that situation that advice was given that there was no defence to the claim by the mortgagee.

WILSON J: But the change of circumstance, the significant

change of circumstance, apart from the matters that

you have referred to, Mr Wales, is unfortunately the

state of health of your client and the fact that she

would be unable to pursue the relief that the

counter claim that she advanced sought.and does not

that make our further consideration of the matter

moot?

MR WALES: It does not for these reasons, Your Honour: that

certainly she cannot now enjoy possession of the

subject premises. What she does have is a claim

for damages against the respondent. She cannot

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pursue that claim until the legal position of

the respondent as a volunteer is clarified.

TOOHEY J:  But her claim for damages, if she has one,

does not arise from the registration of the

respondent as the proprietor of the land?

MR WALES:  No, it arises in this fashion: that it would

be asserted by us in - it would have to be in

separate proceedings, that knowing of the interest

of the applicant, the respondent, contrary to his

entitlement in equity, mortgaged the subject premises.

TOOHEY J:	But the present proceedings concern the title of the respondent, do they not, and the liability of that title to be disturbed by reason of the fact
that he is a volunteer.

MR WALES: Well, the present proceedings were,on the one

hand, a claim for possession by the respondent

and on the other hand a claim by the applicant

to resist the possession claim and declarations
as to her entitlement to remain in the subject

premises.

WILSON J:  To remain in the property for the remainder of

her life.

MR WALES:	Yes, and that - - -
WILSON J:	She can no longer assert that claim, can she?
MR WALES:	She cannot assert a claim to live in the subject

premises. What she can assert is a claim that

her._ interest as equitable life tenant was superior,

as it were, to the interest of the respondent, as

registered proprietor. Now - - -

TOOHEY J:  But if the judgment of the Court of Appeal stands

by reason, say, of a refusal to grant special leave

to appeal, would that stand in the way of your

client bringing the proceedings that you suggest

may be brought?

MR WALES: Well, yes, for this reason, that the claim

would be upon this footing: we would assert that

the applicant was an equitable li·fe tenant.	We
would assert that the respondent knew of that
fact.	We would assert that the interest of the

applicant bound the respondent and that,
notwithstanding that, the respondent alientated

the subject premises.

DAWSON J: What do you mean by alienated the subject premises?

MR WALES:  Mortgaged. He disposed of an interest which had

the ultimate result of making it impossible for

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the applicant to remain in the premises. I

might say, Your Honour, that I am conscious

of the fact that in the judgment of the judge

at first instance he indicates that there was

no evidence that the respondent was aware of

the interest of the applicant and that was

dealt with by the - -

WILSON J:	That was accepted by the Court of Appeal.
MR WALES:	The Court of Appeal but, Your Honour, the

knowledge of Mr Koteff was not an issue before
the trial judge for this reason: the

submission put to the trial judge was that,

as a matter of well-established law, the

respondent being a volunteer was bound by the

equities that bound his predecessor.

TOOHEY J:  Pound qua registered proprietor,

is that not the point?

MR WALES:	Sorry?
TOOHEY J:	Bound qua registered proprietor.
MR WALES:	Yes, indeed. But in his position as proprietor,
taking as a volunteer being the beneficiary under
the will of his deceased father, he was bound by the equities that bound his predecessor in title.
Now, that being the law as it then stood, the question of notice was irrelevant.
DAWSON J:	But what would the cause of action for damages

be?

MR WALES:	Sorry?
DAWSON J:	What would the cause of action for damages be?
MR WALES:	Well, it would be a claim for damages in equity

and not at connnon law. The claim would be a

LORD CAIRNS ACT claim based upon this proposition

that the applicant would have been entitled to

restrain by injunction the mortgaging.of the

premises contrary to her equitable life interest.

TOOHEY J:  But, I am sorry, Mr Wales, how could the mortgaging -

on any view of the matter, how could the mortgaging

of the premises of itself constitute an interference

with any right in the applicant to remain in the

premises for the rest of her life?

MR WALES:	Well, it had this potential.
TOOHEY J:	Well, yes, maybe it had some potential but, of

itself, I said.

MR WALES:	Well, on one view, of itself, it might not have
expected the claim for possession but one then has

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the question of the respondent's default

under the mortgage. Now, what we assert

is that the respondent brought about a

situation entirely one of his own doing

whereby the mortgagee asserted its rights

-=-~ against the occupant, the applicant, that

caused her to be compelled to vacate

possession.

TOOHEY J:  But is that the basis upon which a writ of

possession issued in June of this year,

the possession of the mortgagee?

MR WALES:  No, the writ of possession was issued because the

judge at first instance ordered that the applicant

give possession to the respondent. That was stayed

pending the appeal. The appeal was unsuccessful

but on different grounds. The Court of Appeal

reversed the judge's findings as to the equitable life interest but held, contrary to what was then

thought to be the law, that even though the

respondent was a volunteer, he was not bound by

that equitable interest.

Now, as I said, Your Honours, the mortgagee

then commenced to move and it was appreciated that

we had no defence against the mortgagee so we

sought no further stay but the writ of possession

that was issued was not a writ by the mortgagee.

It was the writ which issued as a consequence of

the judgment of the judge at first instance.

TOOHEY J: That is why I asked you earlier what there is about

the judgment of the Court of Appeal which stands in

the way of your client bring the proceedings that

you contemplate she may bring by way of damages?

MR WALES:  Well, what stands in the way is the proposition

that the respondent, although a volunteer, had an

interest entirely free of the interest of the

applicant as equitable life tenant.

What the Court of Appeal has held is that

because he took as a registered proprietor the

respondent, although conceded to be a volunteer,
was not bound by the equitable interest which they

found the applicant to have. Now, if that finding

and holding as to law stands, we cannot assert a

claim for damages because, on that view, the

respondent was perfectly entitled to mortgage or

to sell the subject premises. It is only if the

holding as to law is reversed and the position

of the volunteer, as it were, re-established, that

a claim for damages could lie.

WILSON J:  My difficulty, Mr Wales, is that the only relief,

at least one aspect of it, your client has ever

sought was a declaration that she be entitled

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to remain in the property for life. She can

no longer derive any benefit from such a

declaration sadly and that rather puts a cloud

over the worthwhileness of the Court proceeding

to consider the application.

DAWSON J: And the amount of damages - this may not be

important - but the amount of damages would

necessarily be very small if damages were

recoverable at all.

MR WALES: Well, one does not know that. It may be the

value of the loss of acconnnodation for the rest

of the life of the applicant.

DAWSON J:  I thought she was no longer able to avail

herself of that acconnnodation .and that point has

apparently been reached.

MR WALES:  Yes, I concede that

WILSON J: And reached within a few days of her vacating

the premises.

MR WALES: Well, that is - but my instructions - and

Your Honour will appreciate that we only saw

the affidavit a matter of days ago - are that

certainly, as at the present date, were she able

to have done so, she would have remained in

occupation to the present date in the subject

premises. We do not concede, as a matter of fact,

that her health would have, in any event, led her

to have vacated the premises by today's date.

I concede that as a matter of fact the occupation

must come to an end at some stage. We do not

concede it would have come to an end as at

today's date or earlier.

WILSON J: But she has been accepted into a nursing home.

MR WALES:  She has. She certainly resides there at the

moment, yes.

WILSON J: With the controls that are imposed by government

on nursing home admissions, one can infer, I would

have thought, that her state of health was such

that she required nursing care.

MR WALES:  But, despite that, she does have a claim and this

is our submission - - -

DAWSON J:  But what you are asking this Court to do is,

really, to pursue a question, interesting as it

is, butJ.ia question which results in little by

way of practical benefit to your client, even

if she is successful.

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MR WALES: Well, it does result, we say, in a claim for

damages and it is a point of great general

interest.

DAWSON J:  I think one can concede that it is an interesting

~--point.

MR WALES: Well, we say more than just interesting. It is

a - - -

DAWSON J: Interest to the public as well.

MR WALES:  Yes.

DAWSON J: Well, that may be so.

MR WALES:	Yes.
WILSON J:	Mr Wales, if we were to assume that your application

for special leave, but for the changed circumstances,

would certainly warrant serious consideration by the

Court and sufficient for us not to require- you to develop

the grounds, would you be content to resume your seat

so that we can hear the respondent on the circumstances

that we have been discussing with you?

MR WALES:	Yes, indeed.
WILSON J:	Yes. Mr Burns, you appreciate that we have not

heard you on the merits of the application for
special leave but would you care to address us on
the circumstances that, assuming there is a case
for special leave, the changed circumstances would

render such an appeal advisory or nugatory.

MR BURNS: Yes, that is my submission, if Your Honours please

and it is the reason the affidavit was filed. That

is, it is my submission that, in the circumstances

which presently exist, the appeal has no

subject-matter because although no one yet, apart

from the applicant herself has formulated precisely

what her interest in the land might be if she were

otherwise successful, in the Court of Appeal

Mr Justice Priestley said, suffice it to say, that

it was capable of sufficiently clear formulation.

It is plain from the relief presently sought before

this Court were leave to be granted that what is

sought is an estate limited by the applicant's

capacity to reside in the premises. If, as now

appears to be conceded, she has no such present

capacity - - -

WILSON J: Well, it is not conceded but, at least, there is

factual E'·.,.idence before the Court.

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MR BURNS:	Yes, that is so, Your Honour.	Then the appeal

either has been established to have no

subject-matter or there is sufficient material

before the Court to indicate that some further
inquiry or condition would be placed upon any

leave which was granted to ensure that the appeal

~~ did have some subject-matter before assuming leave

or otherwise granted, the appeal came on for

hearing.

As far as the other claim which my learned

friend has expanded before the Court in argument,

it is the first that the respondent or I have

heard of any such claim and I have some difficulty,

myself, in formulating what the claim might be but,

if one assumes for the moment that there is such a

claim for damages available to the applicant, I

would respectfully adopt what was said by
Your Honour Justice Dawson that that claim would

be one for no great sum of money in the circumstances

which have happened.

In the circumstances which have happened, the

applicant has lived in these premises free of rent

or any other occupation charge for a period of about

six years, since the death of the respondent's father,

and it now appears, as of the present that such is

the state of - on the evidence which is before the

Court - that she would be most unlikely to have the

capacity to reside there for any longer period.

So, even if one admitted all the various steps in

my learned friend's argument that there was some
case for damages,and we certainly do not to that,

then those damages would be small.

DAWSON J:  But your real point is that the claim which is

being pursued in this action is .•...

successfully would the applicant come to- - -

MR BURNS: Yes, Your Honour. In relation to any other claim,

it would be my respectful submission that the

applicant is in no worse or better position than

any other litigant who desired to put in issue in

proceedings. the matter of law as determined by

the Court of Appeal. There may be many other

litigants who might wish to put in issue that

question but, in my respectful submission, it is

not a matter for this Court until that question

reaches this Court.

TOOHEY J:  Mr Burns, the affidavit of the respondent,

sworn 11 October, speaks of a contract to sell
the land and an appointment for sale made

13 October. What has happened about-that?

MR BURNS:  Yes. I should tell Your Honours that that contract

has not been completed. The purchasers became aware,

as a result of an answer to requisitions raised by

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them on the contract, of the pendency of this

application and have not proceeded with the

purchase pending the outcome of the hearing

today.

TOOHEY J:  Mr Wales spoke of the applicant quitting the

~-- premises by reason of action or proposed action

on the part of the mortgagee. There is no mention

of that in the affidavit but it may be that this

sale is simply to head off some action that the

mortgagee proposed to make.

MR BURNS:  I am not sure what the current position is,

Your Honour. It certainly is the case that

the respondent has been in default under his

mortgage and that the mortgagee has taken steps

with respect to that mortgage in relation to

obtaining possession of the land. I am not

quite sure whether - I can seek some instructions

about it - this particular sale is, in effect,

heading off the mortgagee or whether the mortgagee

is currently content with the position. If

Your Honour would excuse me for a moment, I will

just see what the position is.

Yes, what Your Honour says correctly anticipates

the position. The sale, in effect, heads off a

mortgagee sale of the premises.

TOOHEY J: Yes, thank you.

MR BURNS:  Those are my submissions on that issue, if the

Court please.

WILSON J:  Yes, thank you. Mr Wales, do you wish to say

anything else?

MR WALES:	There is nothing further I can put, Your Honour.
WILSON J:	Thank you.  Notwithstanding the interesting and

important question of law that was sought to be

raised on the decision of the Court of Appeal,

the Court is of the view that subsequent developments

touching the applicant have deprived the application

of any practical significance and that, in the

circumstances, the appropriate course is for the

Court to refuse the application for special leave.

MR BURNS:  Would __ ..Your~_·Hono.u:c award costs?

WILSON J:  The Court is of the opinion, Mr Burns, that this

would not be an appropriate order to make.

MR BURNS: If Your Honour pleases.

WILSON J:  The application is refused with.no order as to

costs.

AT 11.05 AM THE MATTER WAS ADJOURNED SINE DIE

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