Carbone v Beringa Investments Pty Ltd
[2002] VSC 165
•9 May 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT
No. 8090 of 2001
| DOMENICA CARBONE | Appellant |
| v | |
| BERINGA INVESTMENTS PTY LTD (ACN 004 772 454) | Respondent |
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JUDGE: | Byrne J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 6 May 2002 | |
DATE OF JUDGMENT: | 9 May 2002 | |
CASE MAY BE CITED AS: | Carbone v Beringa Investments Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 165 | |
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Mortgages - summary judgment for possession – effect of judgment for possession obtained by mortgagee’s predecessor – whether Amadio defence – whether Garcia defence
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr M Rinaldi | Zolis Lawyers and Consultants |
| For the Respondent | Mr AA Nolan | Robert M Phelan & Co Pty |
HIS HONOUR:
By writ filed on 25 October 2001 the plaintiff, Beringa Investments Pty Ltd (“Beringa”), seeks an order for possession of the land situate at and known as 5 Lorne Street, Moonee Ponds and being the land more particularly described in Certificate of Title Volume 5577 Folio 355. It makes this claim under three mortgages over the property:
¨ As assignee of mortgage T99676M granted on 8 December 1995 to Peter Godfrey Allaway and Colin John Daniels. The assignment W402770H to Beringa from the mortgagees is dated 18 June 1997.
¨ As mortgagee under mortgage U198325X granted to it on 17 April 1996.
¨ As mortgagee under mortgage W402771E granted to it on 11 October 1999.
By summons filed on 14 December 2001 Beringa sought summary judgment and on 11 April 2002 the Master ordered that there be judgment for possession of the land with costs on a solicitor client basis. From this order Mrs Carbone appeals by notice filed on 18 April 2002. Having heard the argument I formed a clear view that the appeal should be dismissed and I made an order to this effect. The business in the Practice Court was such that I was unable then to provide reasons for this decision and, at the request of the parties, I said that I would do so shortly. These are my reasons.
The proofs of Beringa were not challenged. Counsel for Mrs Carbone raised three matters which he said warranted further investigation at trial and leave to defend.
The first point was that the mortgagees of the 1995 mortgage, Messrs Allaway and Daniels, had, on 27 May 1997, recovered judgment for possession of the land in proceeding No. 5248 of 1997. This judgment was obtained in default of appearance. It appears from the evidence that these mortgagees did not execute upon this judgment and that Mrs Carbone was permitted to remain in possession and she continued in possession when and after the mortgage was assigned to Beringa a few weeks later. As to this submission two things may be said. First, it does not bear upon the 1996 mortgage or the 1999 mortgage. By permitting the mortgagor to remain in possession, perhaps making further payments under the mortgage, it may be that the original mortgagees have waived their rights. In any event, the fact that they might execute upon their judgment creates no bar to Beringa, whose entitlement to possession arises on a different basis for different defaults.
Second, Mrs Carbone placed reliance upon the equitable defences expounded by the High Court in Commercial Bank of Australia Ltd v Amadio[1] and Garcia v National Australia Bank Ltd[2]. I note in passing that neither of these defences, nor indeed any positive defence, was raised in her defence filed on 7 December 2001. Affidavits were filed on her behalf in which she asserted that she derived no benefit from the 1995 loans, that the funds were advanced to her son-in-law, Alfio Picone, for the purpose of carrying on his business as a builder. This is now accepted as being incorrect. The funds provided under the 1995 mortgage were, in part at least, applied by Mrs Carbone in the purchase of the mortgaged home property. The $47,000 advanced on the security of the 1996 mortgage was applied by her to renovate the home.
[1](1983) 151 CLR 447.
[2](1998) 194 CLR 395.
The 1999 mortgage is a little more complicated. It is expressed to have been given to secure an advance of $200,000 for three months only. At the time of this mortgage, Mr Picone was indebted to Beringa in the sum of approximately $156,000. It may be also that Beringa was pressing him for payment because, on 11 October 1999, Mrs Carbone executed a deed of guarantee which recites his debt and her request that Beringa forbear from suing him for the money owing. Under this deed Beringa agreed to withhold action against Mr Picone and to permit Mrs Carbone to reside in the Lorne Street property on the basis that she was to put the property up for sale within three months. Under the deed Mrs Carbone also agreed to guarantee Mr Picone’s liability to Beringa, present and in the future. The 1999 mortgage was given in further security for this accommodation. In this sense it may be said that it is arguable that she derived no personal benefit from this transaction.
Mrs Carbone swore, too, that she cannot read English at all or speak it properly and that her understanding of the English language is very limited. She says that she has “never had any independent legal advice in relation to any of the matters raised by the plaintiff in this proceeding”. As to this latter assertion, the evidence shows that in the 1995 mortgage transaction she had acting for her a solicitor, Christian Leslie Augustinus of Cannon & Augustinus. There is in evidence a certificate by him in a standard form to the effect that Mrs Carbone understood the transaction. I accept that there is a triable issue as to her understanding of this transaction.
The position with respect to the 1996 and the 1999 mortgages is rather different. On each occasion Mrs Carbone had acting for her an Italian speaking solicitor, Con Anthony Italia. Mr Italia certified in each case that he had explained the nature and effect of the security documents to her. Mrs Carbone herself certified in each case that she had read the documents and had had independent legal advice as to their meaning. It was submitted that her certificate could not be correct because she could not have read the documents herself. Nevertheless she nowhere says that she did not have the documents explained to her in the Italian language. I enquired of her counsel whether he wished to supplement the affidavit material on her behalf. Having taken instructions, I was told by him that Mrs Carbone would say that she did not herself read the security documents and that, although Mr Italia explained them to her in the Italian language, she did not understand what he said. Counsel for Beringa said that he was content to proceed with the appeal on the basis that Mrs Carbone had or would swear up to that statement and I, too, act on that basis.
I return to the two equitable defences, bearing in mind that summary judgment is a power to be exercised sparingly and not at all, unless it is clear that there is no real question to be tried[3]. This will ordinarily mean that I should not attempt to resolve a conflict of fact or to refuse a defendant the right to a trial of an available defence.
[3]Fancourt v Mercantile Credit Ltd (1983) 154 CLR 87 at 99
This is not an Amadio case. I accept that Mrs Carbone’s lack of facility with English and her minimal education might render her a person with a special disability. There is no suggestion, however, that she entered into any of these transactions in reliance upon any misrepresentation, express or implied or upon the withholding of any relevant information on the part of Beringa or, in the case of the 1995 mortgage, the mortgagees. Nor is this a case in which she makes any complaint about any such conduct on the part of Mr Picone. There is no evidence that her disability put her at any operative disadvantage in her dealings with any of the mortgagees. No unconscientious conduct is attributed to them.
Nor is the Garcia principle applicable. Let it be assumed that the relationship between Mrs Carbone and her son-in-law was one in which the mortgagees should be fixed with knowledge of a potential imbalance of power. Except for the 1999 mortgage it cannot be said that she derived no personal benefit from the transactions. There is no evidence of undue influence on Mr Picone’s part or of any failure on his part to explain to his mother-in-law the nature of the transaction. The evidence does not show that Beringa or the earlier mortgagees did not reasonably believe that the effect of the transaction had not been explained to her by a competent, independent and disinterested stranger.
A third submission depended upon an estoppel. This was said to arise from statements attributed to John Joseph Berger, a director of Beringa, that he would look after Mrs Carbone and that she would not have to sell her house. As best I understand the position, this is said to have taken place on a number of occasions in 2001 when Mrs Carbone was assisting or being assisted by Beringa in her defence of a claim for possession of the land brought by Michele Barbaro and Maria Barbaro in Proceeding No. 7847 of 2000. It does not appear that she acted to her detriment in reliance upon these statements nor that, in some other way, they give rise to the conclusion that Beringa is not now entitled to possession. There can be no substance in this contention.
Finally, I should mention that it was put against the orders sought that there was on foot a claim by the Barbaros that they held security over the property under a mortgage dated 15 July 1996. This is no answer to the present claim. If indeed they have a security as alleged in their caveat, it ranks after the 1995 mortgage and the 1996 mortgage. Their rights can be dealt with if there is any surplus.
I concluded, therefore, that Beringa was entitled to possession as, indeed, the Master had concluded. I ordered, therefore, that the appeal be dismissed with costs.
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