Cemex Australia Pty Ltd v. Rinker Australia Pty Ltd

[2008] QSC 353

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

WILSON J

No 2985 of 2008

CEMEX AUSTRALIA PTY LTD (ACN 099 732 297)	Applicant
and
NIKOLA RADMANOVIC also known as RINKER AUSTRALIA PTY LIMITED	Respondent

BRISBANE

..DATE 21/11/2008

ORDER

HER HONOUR: This is an application for default judgment and sale of property of which the defendant is the registered proprietor.

On 10 February 2006 the plaintiff and the defendant entered into a written credit agreement pursuant to which the plaintiff agreed to supply goods to the defendant on particular terms.

There were payment terms, which included that the cost of any legal or other debt collection costs incurred by the plaintiff should be paid by the defendant to the plaintiff, and also this charging clause:

"Applicant charge
The applicant(s) [defendant] charge in Rinker Australia [plaintiff]'s favour all their estate and interest in any land in which the applicant(s) now have or may later acquire and any other asset or trust assets with payment all monies owed to Rinker Australia by the customer or any of the applicant(s)."

The defendant owes the plaintiff the sum of $14,157.90. The plaintiff obtained a judgment in that amount in the Magistrates Court at Brisbane on 19 March 2008.

On 26 March 2008 the plaintiff lodged a caveat over the property in question in respect of its charge over the defendant's interest in that property. The ground of the caveat was stated as follows:

"An equitable chargee pursuant to the clause entitled 'Applicant charge' of a commercial credit agreement executed on or about 10 February 2006 between CEMEX Australia Pty Ltd (formerly known as Rinker Australia Pty Ltd) ABN 87 099 732 297 and Nikola Radmanovic under which Nikola Radmanovic charged all of his estate and interest in any land that he now has or may later acquire with the payment of all monies owed to CEMEX Australia Pty Ltd (formerly known as Rinker Australia Pty Ltd) ABN 87 099 732 297."

This proceeding was commenced on 3 April 2008. The plaintiff claims the sum of $510.85 being legal costs incurred in lodging the caveat and payable pursuant to the clause of the credit agreement to which I have referred, as well as:

"2.a declaration that the Defendant granted a charge and/or equitable mortgage to the Plaintiff in respect of the defendant's interest in the estate and interest in the property at lot 78 on RP61580 Count of Ward Parish of Nerang Title Reference 12317205 ("the Property");

a declaration that the said charge and/or equitable mortgage charges the interest of the Defendant in the Property with the payment of all moneys due and owing by him to the Plaintiff;

an order for the sale of the Property without prejudice to any encumbrance having priority to the Plaintiff's charge and/or equitable mortgage and free from the encumbrances (if any) of such of the emcumbrancers [sic] as shall consent to the sale and/or do not have priority;

such further or other orders including an order vesting interest in the Property or appointing a person to convey interest in the Property or an order creating or vesting in the plaintiff a legal estate in interest in the Property to enable the plaintiff to carry out the sale.

costs on an indemnity basis."

The claim and statement of claim were served on 1 October 2008. Meanwhile on 2 September 2008 Mr G D McDonald had been appointed as the controlling trustee of the estate of the defendant.

The plaintiff's claim is as a secured creditor and, accordingly, it is not necessary for the plaintiff to obtain leave of the Court in order to proceed with this claim.
I refer to the supplementary submissions prepared by the solicitors for the plaintiff on this point.

No defence has been filed. Accordingly the defendant is deemed to have admitted the plaintiff's claim.

The plaintiff has applied for judgment pursuant to Rule 288 of the Uniform Civil Procedure Rules. In my view it is entitled to that judgment.

Orders for the sale of the property were sought in the claim. The Court has power to direct a sale pursuant to section 99(2) of the Property Law Act (see Phillips v. Hogg [2001] QSC 390) as well as an inherent power to do so (see Bunnings Building Supplies Pty Ltd v. Blue Diamond Homes Pty Ltd [2004] QSC 54).

The plaintiff seeks the appointment of Messrs Sweeney and Cronan as trustees for sale. Both are registered trustees in bankruptcy and they consent to act. In my view it would be a proper exercise of the Court's power to appoint them accordingly.

They are entitled to their reasonable expenses of effecting the sale, those expenses to include professional costs and disbursements.

The only remaining issue is that of the disposition of the sale proceeds.

There is a first registered mortgage in favour of the Commonwealth Bank of Australia. It was registered on 6 December 2007.

Then a caveat was lodged by Provident Capital Limited on 17 December 2007; there is no evidence of any proceeding being commenced to enforce the claim made in that caveat and, accordingly, I assume it has lapsed.

The plaintiff's caveat was lodged on 26 March 2008.

There are two subsequent caveats, one lodged on 7 April 2008 by Langs Building Supplies Pty Ltd and the other lodged on 10 April 2008 by Waco Kwikform Limited. Again there is no evidence of proceedings being taken to enforce the claims made in those caveats.

Finally there is a notation of a writ made on 11 July 2008 by Burlee Holdings Pty Ltd.

The draft order which has been put before the Court provides for Messrs Sweeney and Cronan to be entitled to deduct the costs of sale from the sale proceeds after first paying the registered mortgagee, Commonwealth Bank of Australia. That seems correct in the circumstances. The draft order then goes on to provide that Messrs Sweeney and Cronan may deduct such costs before making payment to any subsequent encumbrancee and finally paying the surplus, if any, to the defendant. Again, that provision seems proper in the circumstances.

As for the payment of costs, the plaintiff seeks costs on the indemnity basis, to be assessed if not agreed. Having regard to the provisions of the credit agreement, such an order is appropriate.

Accordingly I make an order in terms of the draft.

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The Supreme Court of Queensland was presented with an application by Cemex Australia Pty Ltd for default judgment and the sale of property owned by Nikola Radmanovic, also known as Rinker Australia Pty Ltd. The plaintiff sought a declaration confirming the charge and/or equitable mortgage over the defendant's property, an order for the sale of the property, and costs on an indemnity basis. The application arose from a credit agreement dated 10 February 2006, where the defendant agreed to charge all his estate and interest in any land he owned or might acquire with payment of all monies owed to Cemex Australia. The plaintiff claimed $510.85 for legal costs incurred in lodging a caveat over the property, and sought a declaration of the charge and/or equitable mortgage over the defendant's interest in the property. The plaintiff also sought an order for the sale of the property and for the costs to be paid on an indemnity basis.

The court was required to determine whether the plaintiff was entitled to the default judgment and sale of the property, and whether the proposed order for the sale of the property and disposition of the sale proceeds was appropriate. The court considered the provisions of the credit agreement, the absence of any defence from the defendant, and the various caveats and encumbrances on the property. The court noted that the plaintiff had a first registered mortgage in favour of the Commonwealth Bank of Australia, and there were subsequent caveats lodged by Provident Capital Limited, Langs Building Supplies Pty Ltd, and Waco Kwikform Limited, none of which had been enforced. The court also considered the provisions of the Property Law Act and relevant case law.

The court held that the plaintiff was entitled to the default judgment and sale of the property. The court found that the proposed order for the sale of the property and disposition of the sale proceeds was appropriate, with the sale proceeds to be first used to pay the registered mortgagee, Commonwealth Bank of Australia, followed by the costs of sale, and finally any surplus to be paid to the defendant. The court also held that the plaintiff was entitled to costs on an indemnity basis. The court made an order in terms of the draft order submitted by the plaintiff.

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