Brackenridge v Bendigo and Adelaide Bank Limited (No 2) - [2021] SASCA 137

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Civil)
BRACKENRIDGE v BENDIGO AND ADELAIDE BANK LIMITED (No 2)
[2021] SASCA 137
Judgment of the Honourable Justice Bleby (ex tempore)
5 November 2021
HIGH COURT AND FEDERAL COURT - HIGH COURT OF AUSTRALIA - APPELLATE JURISDICTION - PROCEDURE - STAY OF PROCEEDINGS - PENDING SPECIAL LEAVE APPLICATION
Application for a stay pending an application for special leave to appeal to the High Court of Australia.
On 4 November 2021, the Court of Appeal dismissed an appeal by the appellant from a judgment of a primary judge, who granted the respondent possession of a property, of which the appellant is the registered proprietor.
The appellant now applies for a stay pending an application of special leave to appeal against the decision of the Court of Appeal to the High Court.
Held, refusing application for a stay:
1. While the application for a stay is properly made, none of the grounds that the appellant has pursued is of sufficiently arguable merit that the interests of the administration of justice would likely warrant a grant of special leave. A stay would cause loss to the respondent. The balance of convenience falls squarely in the respondent’s favour.
Judiciary Act 1903 (Cth) s 35A; Australian Securities and Investments Commission Act 2001 (Cth) s 12DMA; Real Property Act 1886 (SA) Part XVII, referred to.
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No.1] (1986) 161 CLR 681, applied.
Brackenridge v Bendigo and Adelaide Bank Limited [2021] SASCA 129; Bendigo and Adelaide Bank Limited v Brackenridge [2020] SASC 114, considered.

BRACKENRIDGE v BENDIGO AND ADELAIDE BANK LIMITED (No 2)
[2021] SASCA 137
Court of Appeal – Civil

BLEBY JA (ex tempore): On 4 November 2021, the Court of Appeal dismissed an appeal by Mr Brackenridge from a judgment of Doyle J delivered on 24 June 2020.[1] The judgment of Doyle J granted Bendigo and Adelaide Bank possession of a property at Waterfall Gully Road, Beaumont, of which Mr Brackenridge is the registered proprietor.[2]
[1] Brackenridge v Bendigo and Adelaide Bank Limited [2021] SASCA 129.
[2] Bendigo and Adelaide Bank Limited v Brackenridge [2020] SASC 114.
The matter has a lengthy history. The procedural history of the bank obtaining an order for possession, the setting aside of that order for possession, and the granting of successive stays is set out in the judgment of the Court of Appeal as follows:[3]
[3]     Brackenridge v Bendigo and Adelaide Bank Limited [2021] SASCA 129 at [10]-[14].
The bank commenced proceedings in June 2018, initially relying upon the summary procedure available under Part XVII of the Real Property Act 1886 (SA). The bank obtained an order for possession on 26 September 2018, after the appellant failed to file evidence in opposition and did not attend the hearing at which the order was made.
Only after the bank obtained and served a warrant for possession did the appellant file an application to set aside the order for possession. That application was not filed until 23 January 2019, the date fixed for execution of the warrant. On 14 March 2019, a Master of this Court set aside the order for possession on the basis that one of the potential defences raised by the appellant was arguable. The appellant’s delays continued. The appellant opposed the bank taking possession a second time on 27 October 2020, again on the day a second warrant for possession was to be executed. The appellant made a third application the day before possession was scheduled to be taken on 1 December 2020.
When the matter came before the Master on 27 October 2020 an interim stay was granted because the appellant told the Court that he would file a notice of appeal later that day. When the matter was called back on the following day, the Master was told by the appellant that he wished to amend his notice. The Master did not know that the notice of appeal had not then been filed.
On 4 November 2020, the appellant told the Master that his notice of appeal had not been filed because he had discovered that he could not do so without either paying a filing fee (which he could not afford) or obtaining a waiver (which he had not obtained). The Master had by then obtained from the Chief Justice a provisional listing of the appeal for 11 December 2020. Without any notice of appeal, there was no longer any basis upon which to stay execution of the order for possession made by Doyle J, and so the stay was dismissed, and the December appeal date lost.
When the matter came before Livesey J, the appellant had only just filed his notice of appeal on 30 November 2020, well over four months out of time. The appellant did not explain his delay between the time judgment was delivered on 24 June 2020 and the filing of the notice of appeal on 30 November 2020. After hearings on 1 and 2 December 2020 a “partial stay” was granted in the following terms:
Applicant undertaking to diligently and expeditiously prosecute his appeal to a hearing before [the Court of Appeal] on Tuesday, 2 February 2021 at 10.15 am; and
On the bank’s undertaking that, subsequent to taking possession of the property at Beaumont, in the State of South Australia as a mortgagee … you will not sell the property as mortgagee unless or until the applicant’s application for an extension of time within which to bring the appeal is dismissed, or the appeal is otherwise determined; it is ordered that:
1.      The application by the applicant for a stay of the warrant of possession is dismissed.
2.      The bank is to prepare the appeal books.
3.      The matter is listed for a hearing before [the Court of Appeal] on Tuesday, 2 February 2021 at 10.15 am.
4.      The parties have liberty to apply.
5.      The bank is to have the costs of and incidental to this application.
On 4 November 2021, at the delivery of the judgment dismissing Mr Brackenridge’s appeal, the Court of Appeal discharged the ‘partial stay’ and made an order releasing the bank from its undertaking. Mr Brackenridge indicated at that time that he intended to seek special leave to appeal to the High Court and foreshadowed a further application for a stay.
The Court indicated that it was prepared to give Mr Brackenridge an opportunity to make an application for a stay and indicated that it would be referred to me for hearing and determination the following day at 2:15pm. The appeal having been dismissed and the ‘partial stay’ set aside, the application is properly to stay the order for possession made by Doyle J on 24 June 2020, as well as orders of Blue J on 24 December 2020, giving leave to issue a warrant of possession.
The principles applicable to an application for a stay pending an application for special leave to appeal to the High Court are well understood. In Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No.1], Brennan J said:[4]
In each case when the Court is satisfied a stay is required to preserve the subject-matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.
[4] Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No.1] (1986) 161 CLR 681 at 685.
The subject matter of the appeal is the right to possession of a ‘luxury home’ at Waterfall Gully Road, Beaumont, which Mr Brackenridge constructed. The construction was facilitated by funds advanced by the bank to Apex Property Solutions Pty Ltd (‘Apex’) under a loan facility. Mr Brackenridge granted two mortgages over the property, which secured a guarantee executed by him in favour of the bank. The primary issue at trial, decided in the bank’s favour and in respect of which the appeal was dismissed, was whether the guarantee executed by Mr Brackenridge covered the indebtedness of Apex under the loan facility.
In the event that a stay is not granted, the bank will proceed to exercise its rights of possession and sell the property. I am satisfied that a stay would be required to preserve the subject matter of the litigation, insofar as it concerns possession of a unique piece of real property.
On that basis, I proceed to the criteria that Brennan J enumerated in Burgundy Royale Investments. The second criterion can be put to one side: this application is properly before me.
The first criterion is whether there is a substantial prospect that special leave to appeal will be granted. In this regard, it is useful to have regard to s 35A of the Judiciary Act 1903 (Cth):
35A Criteria for granting special leave to appeal
In considering whether to grant an application for special leave to appeal to the High Court under this Act or under any other Act, the High Court may have regard to any matters that it considers relevant but shall have regard to:
(a) whether the proceedings in which the judgment to which the application relates was pronounced involve a question of law:
(i)that is of public importance, whether because of its general application or otherwise; or
(ii)in respect of which a decision of the High Court, as the final appellate court, is required to resolve differences of opinion between different courts, or within the one court, as to the state of the law; and
(b) whether the interests of the administration of justice, either generally or in the particular case, require consideration by the High Court of the judgment to which the application relates.
In the circumstances of this application being heard one day after the delivery of judgment by the Court of Appeal in respect of numerous grounds of appeal, it would be unfair on Mr Brackenridge, who is unrepresented, to expect him to articulate precisely the special leave questions he intends to pursue. For that reason, I am prepared to consider the issues raised by the grounds of appeal that were before this Court, and the extent to which they raise questions of a kind contemplated by s 35A. These grounds are set out in the judgment of the Court of Appeal.[5]
[5] Brackenridge v Bendigo and Adelaide Bank Limited [2021] SASCA 129 at [16].
In addition, however, Mr Brackenridge has articulated a complaint which he proposes to make on an application for special leave, regarding issues of procedural fairness afforded to him, or not afforded to him, in his preparation for the appeal hearing, and which he says had an effect on his ability to prepare for the appeal.
The issue of natural justice relates to the time frame for the hearing of the appeal that was afforded to him on account of the disposition of the stay application that was made in November of 2020 before Livesey J. It is that in consequence of the nature and manner of disposition of that matter, and what then followed, he was given insufficient opportunity to prepare for the appeal.
I am not persuaded that these complaints, which relate to this Court’s organisation of its processes, and which would potentially require findings of fact, could sustain an application for special leave.
I turn to the grounds that this Court considered. Ground 1 complained that the bank impermissibly departed from its pleaded case. The Court of Appeal rejected this. The ground raises no question of importance and I do not consider that it has any further prospect of success.
Ground 2 raised whether the guarantee was covered by the Mortgage. The Court of Appeal found that while there was some uncertainty about the Mortgage entered into in 2010, the Mortgage entered into in 2007 operated according to its strict terms. This ground does not raise any question of general importance.
Ground 3, which was the primary argument addressed on the appeal, engages the proper interpretation of the Code of Banking Practice, and whether temporary placement of the Apex overdraft into credit was sufficient to extinguish the guarantee. This ground was determined adversely to Mr Brackenridge by reference to the terms of the Code, but also on the basis of the contemporaneous records of the dealings of the parties, the ordinary commercial context in which the instruments operated and Mr Brackenridge’s subsequent, continued acknowledgment of his liability as guarantor. It does not raise any issue of general importance.
Ground 4 complained that the guarantee was in any event unenforceable for want of the appellant being given a copy of the relevant contract documents in his capacity as guarantor. The appellant did receive the documents. This was held to be an unmeritorious attempt to bifurcate his roles. The ground was without merit and raises no question of importance.
Ground 5 complained that the 2016 facility was an unsolicited financial service and invoked s 12DMA of the Australian Securities and Investments Commission Act 2001 (Cth). However, this ground was held to be of no merit, as the financial services were only supplied after the appellant accepted the offers and signed the documents. That constituted the appellant soliciting the financial services that followed.
While this ground does raise a general question, its resolution was factual and temporal. I do not consider it has sufficient merit that would likely warrant a grant of special leave.
Appeal Grounds 6, 7 and 8 raised questions about the meaning of the word, ‘debtor’ under the National Credit Code, and whether the Apex 2016 Agreement and the Apex 2017 Variation Agreement were subject to the National Credit Code. While these grounds do potentially raise a general issue of construction, Mr Brackenridge did not challenge on appeal the finding of Doyle J that even if the Code applied, it had been complied with.
Grounds 9 and 10 challenged the validity of the Apex 2016 Agreement. The Court of Appeal found that these grounds were without merit. They do not raise any issue of general importance.
Grounds 11 through to 14 inclusive raised arguments of estoppel by convention and promissory estoppel. Whether an estoppel was established was a matter of evidence in the case, and the claims of estoppel were rejected by the primary judge. There was no arguable basis on which those findings could have been overturned.
I am required to consider whether there is a substantial prospect that special leave to appeal will be granted. In my view, none of the grounds that Mr Brackenridge has pursued raises a question of law the importance of which could be said to resonate beyond the immediate transactions, or which otherwise answers the criteria in s 35A. Neither do I think that the grounds are of sufficiently arguable merit that the interests of the administration of justice would likely warrant a grant of special leave.
While it is not for me to determine that special leave would not be granted, I conclude that there is not a substantial prospect that it would be. Indeed, I consider the prospect to be remote.
As to the third criterion, I accept that a stay would cause loss to the respondent. The bank relies on an affidavit of Antonio Bellizia, the Head of the Asset Management Unit of the bank. Mr Bellizia’s evidence is to the following effect:
First, the market value of the Property as at May 2021 was of the order of $2.2 million. Mr Brackenridge said that that should be given little weight given the considerably higher amount the Bank was prepared to lend against the property. In circumstances where that valuation is now six months old, but having regard to the other general evidence of the increase in the market, I give that consideration some weight. It is likely that the market value will be somewhere above $2.2 million.
Next, Mr Bellizia gave evidence in his affidavit that a stay pending an application for special leave would cause any potential sale of the property to be delayed until well into 2022. The consequence of this is that the Property would likely be sold at a price materially lower than could be achieved if it was put on the market before Christmas this year.
Mr Brackenridge submits that I should put little weight on the prospect of the bank going to market before Christmas, in the circumstances of what may be required to be done with the property, the bank’s previous conduct and the position where we are, in early November. I do not put a great deal of weight on the prospect of it being sold before Christmas. I do not regard it as impossible, but in any event, I do conclude that a stay pending an application for special leave would considerably delay the bank’s prospect of sending the Property to market, whether that occurred before Christmas or as early as conceivably possible in the new year.
Next, Mr Bellizia says that the Australian Prudential Regulatory Authority has required an increase in the interest buffer to loan assessment from 2.5% to 3%, which is likely to have an adverse impact on house prices. Mr Brackenridge says in response that little weight should be given to this in circumstances where the bank has not otherwise given heed to potential limits in lending. I am unable to resolve the dispute occasioned by that submission.
Mr Bellizia then says that there is presently market uncertainty as to the possibility of increased interest rates in Australia. That and the statement with respect to the previous matter all tend towards evidence of a general nature from Mr Bellizia to the effect that the best time to sell the property is as soon as possible. For a number of reasons, there is uncertainty as to the potential state of the market once any application for special leave were to be heard and determined.
Mr Bellizia then says that the debt owing to the bank by Mr Brackenridge is continuing to increase monthly by approximately $18,000, excluding rates and other statutory charges. He says that the Bank is continuing to maintain the property, and a stay would increase the costs of doing so.
Finally, if a stay is refused, the bank will exercise its rights of possession and sell the property. If Mr Brackenridge was ultimately successful on an appeal to the High Court, he would have lost possession of the property that includes the house that he constructed.
I do not overlook the importance of that. This loss extends to the loss of Mr Brackenridge’s own home; this carries hardship and distress. I am unable to make more precise findings, but I do make findings in those general terms. Neither do I overlook the significance of the fact that the bank has no other prospect of recovery of the considerable sum it has lent on the security of the property. Further, in the event of success in the High Court, Mr Brackenridge would not be without a financial remedy against the bank by way of an accounting.
This matter has had a long and unfortunate history. In my view, the balance of convenience falls squarely in the bank’s favour.
I have taken each of these matters into account. I refuse the application for a stay of the order for possession and the consequential orders.