Bolitho v Permanent Custodians Ltd

[2009] NSWSC 580

CITATION:	Bolitho v Permanent Custodians Ltd [2009] NSWSC 580
HEARING DATE(S):	19 June 2009
JUDGMENT OF:	Gzell J
EX TEMPORE JUDGMENT DATE:	19 June 2009
DECISION:	Application dismissed
CATCHWORDS:	PROCEDURE - Injunctions - mortgagee sale of land by auction - bona fide purchaser for value without notice - contract of sale due to settle one business day later - application for injunction restraining registration of transfer of title and declaration that sale void and order to set it aside - no offer to pay into court amount secured on property - serious allegations of fraudulent conduct in selling at a significant undervalue - whether damages an adequate remedy - whether balance of convenience favoured allowing settlement to take place
CASES CITED:	Parist Holdings Pty Ltd v Perpetual Nominees Ltd [2006] NSWSC 599; (2006) NSW ConvR 56-161
PARTIES:	Kim Bolitho (Plaintiff) Permanent Custodians Ltd (First Defendant) Bluestone Mortgages (Second Defendant) Mark Griffin of Professionals Real Estate, Avalon (Third Defendant) The Professionals Real Estate's auctioneer (Fourth Defendant) Properties on Line (Fifth Defendant) Bluestone's valuer (Sixth Defendant)
FILE NUMBER(S):	SC 1634/09
COUNSEL:	A C Casselden (First Defendant)
SOLICITORS:	In Person (Plaintiff) Gadens Lawyers (First Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

FRIDAY 19 JUNE 2009

1634/09 KIM MAREE BOLITHO v PERMANENT CUSTODIANS LTD & ANOR

EX TEMPORE JUDGMENT

1 The current proceedings before the Court were commenced by a summons which sought an urgent temporary injunction against the first and second defendants restraining them from proceeding with the auction of the plaintiff’s property at 57 Hilltop Road, Avalon.

2 Under that summons a notice of motion was filed in Court today by leave seeking: “an urgent injunction to be granted to the Department of Land and Titles office to stop the transfer of the title.” The relief sought in the notice of motion is not within the bounds of the summons but the plaintiff is self-represented and I propose to overlook this and allow the notice of motion to be heard on the merits.

3 The summons was before the then Chief Judge in Equity, Young J, on 20 February 2009. On the evidence then before him, his Honour granted an injunction. He said:

“So, whilst the matter is very unsatisfactory the way it is presented, I think that on balance I will have to do what the plaintiff wants and so, upon the plaintiff giving the usual undertaking as to damages, restrain Permanent Custodians Limited by itself, its servants or agents from proceeding with the auction of the property at 57 Hilltop Road, Avalon, New South Wales until further order."

4 The matter came before Bergin J on 12 March 2009 when her Honour altered the injunction, extended it to 9 April 2009 and relisted the matter before herself on that date. The purpose was to allow the plaintiff time to seek refinance. That has not resulted.

5 The injunction was discharged on 9 April 2009 when the matter was referred for mediation. The mediation proceedings were unsuccessful.

6 The property was advertised for auction and an auction was conducted on 16 May 2009. The property was sold at auction for $740,000.

7 The agreement for sale and purchase is due to settle at 11.00 am on this coming Monday, 22 June 2009. The plaintiff, whose only asset of value is the house, is concerned at losing the property.

8 In addition to the injunction restraining the Department of Land Titles office from registering a transfer of title, the plaintiff claims a declaration that the sale was invalid and void and an order to set aside the sale.

9 The plaintiff alleges that the advertising did not fairly represent the property and that the defendants deliberately failed to seek the best possible price for the property. She says that special features of the house were not properly advertised and statements in the advertising material were untrue. She alleges that the defendants colluded to damage the house such that it could be sold at an undervalue. The plaintiff says that the price of $740,000 is only one third of its true value.

10 The plaintiff and her partner raised $700,000 and her partner intended to bid at the auction. She alleges that he was prevented from doing so by being asked first, to produce a passport, being asked next to produce an Australian passport, being asked next to produce a rates notice by which time, however, it was too late to register to bid at the auction.

11 There is no evidence that any of these matters was within the knowledge of the successful bidder at auction.

12 The application is made today but one working day before settlement is due.

13 A mortgagee is just as entitled to consideration as is a mortgagor when a sale by a mortgagee in possession is to take place.

14 The usual situation is that an interlocutory injunction will not be granted restraining a mortgagee in possession's sale unless the mortgagor pays into court the amount that is secured on the property. The plaintiff now owes approximately $1.2 million. There is no offer to pay $1.2 million into court.

15 The authorities were analysed by Hamilton J in Parist Holdings Pty Ltd v Perpetual Nominees Ltd [2006] NSWSC 599; (2006) NSW ConvR 56-161. There are exceptions where the amount sworn to was obviously wrong or the mortgagee is the solicitor acting for the mortgagor. Those exceptions do not apply in this case and I see no reason why the same principles should not apply to the instant circumstances where an application is made to declare void an auction and to restrain the registration of a transfer of the title to the property.

16 The plaintiff is entitled to commence new proceedings against the defendants seeking damages for what she alleges to be a fraudulent sale at an undervalue.

17 In my view, damages are an adequate remedy and as a matter of discretion the balance of convenience favours allowing the settlement of the sale to take place on Monday, there being nothing to suggest that the successful bidder or bidders at the auction were other than bona fide purchasers for value without notice of any of the matters claimed by the plaintiff to be fraudulent.

18 I therefore dismiss the notice of motion and I dismiss the summons.

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