Citibank Ltd v Pilgrim

[2001] WASC 129

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   CITIBANK LTD -v- PILGRIM [2001] WASC 129

CORAM:   MASTER BREDMEYER

HEARD:   23 MAY 2001

DELIVERED          :   24 MAY 2001

FILE NO/S:   CIV 2590 of 2000

BETWEEN:   CITIBANK LTD (ACN 004 325 080)

Plaintiff

AND

DIANE LESLEY PILGRIM
Defendant

Catchwords:

Mortgage action - Summary judgment - Notice calling up loan moneys - Sent by registered mail but not received - Notice nonetheless valid

Legislation:

Transfer of Land Act 1893 (WA), s 106

Result:

Application allowed

Representation:

Counsel:

Plaintiff:     Mr T Masson

Defendant:     Mrs J M Wickham

Solicitors:

Plaintiff:     CBA Legal

Defendant:     Judith Wickham & Associates

Case(s) referred to in judgment(s):

Gunn v Land Mortgage Bank of Victoria (1890) 12 ALT 49

Irving v Commissioner of Titles [1963] WAR 67

Case(s) also cited:

Nil

1. MASTER BREDMEYER:  This is a bank mortgage case.  The bank is seeking possession of the defendant's property at 3 Cromer Place, Lynwood by way of summary judgment.  The bank's application is late.  The Case Management Registrar ordered that the application for summary judgment be filed and served by 23 January 2001.  It was in fact filed on 23 February and served by post on that day, addressed to the defendant.  I propose to grant leave for the lateness.  The defendant took no steps in the action between 23 January and 23 February and is not prejudiced by the lateness of the application.  Summary judgment is a very suitable procedure for a bank mortgage case.  I suspect that the delay was caused by the bank's solicitor and the bank should not be blamed for that.  I say that because the substantial affidavit in support was sworn in Sydney on 8 January 2001, yet the application was not filed until 23 February.

2. The defendant has sworn one substantial affidavit in support of her defence.  It is dated 15 March 2001.  In that she annexes four bank statements which cover the period from 8 March to 7 July 2000.  Each of those statements has a sum for interest.  She has added up those four sums to show that the total interest charged was $2,374.06.  The bank issued a default notice dated 4 August 2000 in which the overdue amount is said to be $3,575.58.  The notice called on the defendant to pay this sum within 31 days from receipt of the notice.  In that notice the bank sets out the moneys due, as follows:

   "  Amount Unpaid          Due Date

   $437.97            22/04/00
     $802.38            22/05/00
     $934.12            22/06/00
     $919.54            22/07/00
   Fees  $209.57
   Overdue Amount  $3,303.58     plus
   Enforcement Expenses  $272.00

   Total Amount Due  $3,575.58"

3. The first four sums stated total $3,094.01.  That is the total of the amount due in the fourth of the bank statements mentioned, attached to the defendant's affidavit, being the sum due on 7 July 2000.  Those four statements include the four interest charges added up by Ms Pilgrim but also other expenses, for example, "enforcement expense $245" and "default fee $100" (charged each month) and minor fees for debit tax and FID.  It is clear from these statements and from the default notice that the bank claims that all those sums were owing, whereas Ms Pilgrim claims that the default notice should only relate to the outstanding interest.  The significance of this dispute is that on 21 August 2000 Ms Pilgrim paid $2,500 to the plaintiff.  She says she paid it to the Post Office off her mortgage account at the same time as a $500 payment off her Visa account.  She says the Post Office got this wrong; they credited $2,500 to her Visa account and only $500 to the mortgage account.  The bank accepted her statement that this was a mistake and re‑credited the money correctly.  So, if the total arrears were then $2374.06, as Ms Pilgrim states, then the payment of $2,500 cleared those arrears within the 31 day period given by the bank's notice.  If, on the other hand, the total arrears were $3,094.01, as at the end of July as the bank claims, then the payment of $2,500 did not clear these arrears and she was still in default, justifying the bank in taking the next step in the enforcement procedure.

4. I consider the bank argument on this dispute is correct.  Under the terms of the mortgage which incorporates the terms of the loan agreement, the bank is entitled to charge enforcement expenses and a monthly default fee of $100, plus the minor bank charges.  I consider the defendant was in default under the mortgage on 4 August 2000 when the default notice was sent.

5. On 7 November 2000 the bank issued its second notice to the defendant - "Notice Calling Up Money Upon Default" which called upon her to pay the principal interest then due of $88,447.79 as at 7 November 2000 within one day, failing which the bank would start proceedings in a court to recover the debt and will exercise its power of sale and sell the property.  This notice was sent to the defendant at her address, 3 Cromer Place, Lynwood, by registered mail.  The letter was picked up at the Post Office on an unknown date, by an unknown person, who signed by his or her initials, which I cannot read except that the first two letters appear to be "B. J.".  Ms Pilgrim has deposed that she did not get the notice.  Her counsel has argued that this notice was defective because it never got to her.

6. The notice was prepared under s 106 of the Transfer of Land Act 1893 (WA). Section 106(1) provides, and I paraphrase, that where a default occurs in the payment of principal, interest etc in a mortgage, the mortgagee "may" serve on the mortgagor notice in writing to pay the money owing. Sub‑section (2) provides that service of that notice is not properly effected unless the notice is delivered personally to the mortgagee, or is sent by registered post to the address entered in the register as the address of the mortgagor or the address known to the mortgagee as the current address of the mortgagor. The section is silent on whether the notice has to be received by the mortgagor or not. There is no deeming provision in the section.

7. I consider that service was effective, despite the fact that Ms Pilgrim said she did not get the notice.  That is because of the case law.  In Irving v Commissioner of Titles [1963] WAR 67 Hale J held, following Gunn v Land Mortgage Bank of Victoria (1890) 12 ALT 49, that where a notice under s 106 is sent by registered post directed to the then proprietor of the land at his address appearing in the register book, strict compliance with the section is necessary. But if there is strict compliance it is irrelevant that the notice does not in fact reach the addressee. That may seem tough but I consider I am bound to follow that authority. I therefore conclude that the bank has correctly complied with its legal requirements and is entitled to its order for possession. I do not consider that the defendant has raised any arguable defence or other fact or matter which would justify this action going to trial.

8. I will make the following orders:

   1.Leave is granted to the plaintiff to bring this application out of time.

   2.The defendant do pay to the plaintiff the sum of $90,786.19 plus interest at the rate specified in the Loan Agreement being a daily rate of $21.00 from 9 January 2001 until payment.

   3.The defendant do give possession to the plaintiff of all that piece of land situate at 3 Cromer Place, Lynwood in the said State more particularly described as:

   Lot 107 on Plan 8563 and being the whole of the land comprised in Certificate of Title Volume 2005 Folio 956

   within 28 days of service of this order upon her.

   4.The defendant do pay the plaintiff's costs of the action including the costs of the application for summary judgment to be taxed.