De van der Schueren v Perpetual Trustee Company Limited
[2012] VSCA 86
•8 May 2012
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2012 0021
| MARIA DE VAN DER SCHUEREN | |
| Applicant | |
| v | |
| PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007) | Respondent |
---
JUDGES: | BUCHANAN and MANDIE JJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 3 May 2012 | |
DATE OF JUDGMENT: | 8 May 2012 | |
MEDIUM NEUTRAL CITATION: | [2012] VSCA 86 | |
JUDGMENT APPEALED FROM: | Perpetual Trustee Company Ltd v De van der Schueren [2012] VSC 5 (Zammit AsJ) | |
---
PRACTICE AND PROCEDURE – Order dismissing application to set aside judgment and application for an extension of time to do so – Whether leave to appeal required – Whether order final or interlocutory – Whether order attended by sufficient doubt – Leave to appeal refused.
---
| APPEARANCES: | Counsel | Solicitors |
| The Applicant appeared in person | ||
| For the Respondent | Mr G L Meehan | Gadens Lawyers |
BUCHANAN JA:
I agree with Mandie JA.
MANDIE JA:
By summons filed 9 March 2012 the applicant seeks a determination as to whether certain orders of an associate justice made 23 January 2012 are interlocutory and, if so, she seeks leave to appeal from those orders. The applicant also seeks a stay of execution on a judgment in the principal proceeding.
The said judgment in the principal proceeding was in favour of the respondent (Perpetual) for possession of the applicant’s land known as 42 West Street, Daylesford (‘the Property’). That judgment was made and given on 1 July 2011 in the absence of the applicant.[1] It appears from the reasons for judgment of that date that the applicant made a written loan agreement with Perpetual dated 1 August 2005 secured by a registered first mortgage over the property. On 19 August 2005 the applicant received an advance pursuant to the loan agreement in the sum of $560,000. As at 14 June 2011, the amount outstanding (including interest) was $1,287,122.04 and Perpetual also obtained judgment for that sum together with interest from 14 June 2011 on 1 July 2011.
[1]See the reasons for judgment being exhibit ALG2 to the affidavit of Annette Leigh Gaber sworn 24 April 2012.
In the reasons dated 1 July 2011, the associate justice found that by 18 April 2006 the applicant was in arrears of loan repayments by $3,407.85, at which time the loan balance was $563,522.77. The associate justice further found that on 26 April 2006 Perpetual’s solicitors posted to the applicant a default notice requiring payment of the arrears plus legal costs within 31 days of service. Having regard to the provisions of the loan agreement and the evidence before her, the associate justice found that the default notice would have been taken to be given on
28 April 2006.[2] The associate justice found that, accordingly, the 31-day ‘grace period’ allowed by the default notice ended on 29 May 2006.
[2]This is stated in [20] of her reasons, although there is an error in [18] of her reasons where it is stated that the relevant date was Friday 26 April 2006 – however, it would appear that this was intended to be a reference to Friday 28 April 2006.
The associate justice found that it was a term of the loan agreement that, if the applicant did not correct a default within any grace period, or if the applicant was in default again for a similar reason at the end of that period, then the total amount owing became immediately due for payment. The associate justice found that, during the grace period of 31 days, the applicant had made payments to Perpetual totalling $4,100.00 but that, at the end of the grace period, she remained in arrears of loan repayments by the sum of $2,552.43. As a result, the full amount became due and payable. Perpetual’s writ was filed on 28 June 2006.
The associate justice further found that no loan repayment had been made by the applicant since 2 November 2006, that a second default notice requiring the applicant to pay arrears of $155,320.28 plus costs was given in June 2009, that no payment was made in response and that, as at 10 July 2009, the applicant remained in arrears in respect of the second default notice. Perpetual tendered in evidence various certificates pursuant to the loan agreement and the mortgage and the associate justice concluded that Perpetual was entitled to judgment for possession and for payment of the sum of $1,287,122.04. A counterclaim which had not been prosecuted was dismissed.
On 6 July 2011 the applicant purported to appeal from the judgment of 1 July 2011 to the judge in the Practice Court. The judge told the applicant that she should bring an application pursuant to Rule 49.02(2) of the Supreme Court Rules. The applicant then applied to the Court of Appeal for an extension of time to appeal against the judgment but she ultimately agreed that this application should be dismissed (as it was, by consent, on 18 August 2011).
By summons dated 7 October 2011 the applicant then sought that the judgment of 1 July 2011 be set aside pursuant to Rule 49.02 of the Rules and the applicant also sought leave to make that application out of time. The application was heard by the associate justice on 28 November and 15 December 2011 and judgment dismissing the application was handed down on 23 January 2012.[3]
[3]Perpetual Trustee Company Ltd v De van der Schueren [2012] VSC 5.
In my opinion, the application to set aside the judgment given in her absence (and the application for an extension of time to do so) and the order dismissing those applications are interlocutory within the meaning of s 17A(4) of the Supreme Court Act 1996. They are interlocutory because the applicant is not prevented from making a further application for the same orders and it is irrelevant that such a further application would be very unlikely to succeed.[4] The dismissal of the application thus does not finally decide the rights of the parties in a principal cause between them. Accordingly, leave to appeal is required.
[4]See Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246; Licul v Corney (1976) 50 ALJR 439, 444; and see the recent discussion in Ebner & Anor v Clayton Utz [2012] VSCA 56 [12]-[15].
It is necessary to refer to the reasons given by the associate justice for dismissing the application. Her Honour said, by reference to a number of often-cited authorities, that the application for leave to apply to set the judgment aside out of time required the exercise of judicial discretion by reference to the interests of justice. Her Honour referred to relevant considerations in an application under Rule 49.02(2) being whether the applicant has a defence on the merits, the reason for not attending the trial, whether the application to set aside judgment was promptly made, and whether Perpetual would be prejudiced in any way which could not be adequately compensated by a suitable award of costs and giving of security.
Her Honour then referred in detail to the procedural history of the matter and noted that in a ruling handed down on 15 June 2011 she had concluded that the applicant had failed to provide a proper explanation as to why the trial should not proceed and had further concluded that the applicant’s medical condition did not render her incapable of deciding whether or not to attend court. Her Honour summarised the applicant’s evidence in support of the application to set aside the judgment, as such evidence related to her medical condition and mental state.
Her Honour summarised the applicant’s submissions that there had been a denial of natural justice to her.
Her Honour then summarised the applicant’s submission that she had an arguable defence, as follows:
The [applicant] submits that she has an arguable case. The basis for this is that on two occasions she has had judgments set aside by the Court for irregularity. The [applicant] relies on the comments made by Justice Hansen (as he was then known) in his ruling in this proceeding delivered on 11 December 2009. The [applicant] submits that Justice Hansen was of the view that the point concerning the construction effect of the notice of default was an arguable point and that the matter should be tried as soon as possible. In addition, the [applicant] submits that she has an arguable defence pursuant to s 80 of the Consumer Credit (Victoria) Act 1955 (‘the Act’).
The [applicant] also submits that in the first default notice [Perpetual] relied on a loan agreement dated 1 August 2005 and that the loan agreement is an unjust contract in equity and law pursuant to s 70(7) of the Act. This is on the basis that the loan agreement was not executed by [Perpetual] or its representative. It is submitted that the loan agreement is executed only by the [applicant] which execution bestows upon [Perpetual] a right to enforce it against the [applicant] but fails to confer reciprocal rights upon the [applicant] against [Perpetual]. The [applicant] relies on s 126 of the Instruments Act 1958 (Vic).
The defences provided by the Act are not pleaded by the [applicant] in her current defence. The submissions were put on the basis that they are defences which the [applicant], if successful in this application, will seek to amend the current pleadings. There was no proposed amended defence before the Court.
I interpolate that her Honour considered the question whether the applicant was ‘so overwhelmed’ that she was unable to consider the correct procedures or had made deliberate choices which had delayed the making of the application. Her Honour concluded that, on balance, the applicant had chosen to take steps despite being informed that those steps were incorrect.
Returning to what the associate justice referred to as the ‘central issue’, namely the merits of the applicant’s defence, her Honour said:
The central issue in determining whether leave should be granted to the [applicant] to bring this application out of time is whether the [applicant] has an arguable case. I will deal firstly with the [applicant]’s submissions that there is an arguable defence pursuant to the sections of the Act. As noted, at no prior time has the [applicant] raised such defences. The first time these defences were raised was in the course of this application. The [applicant] has not provided the Court with a draft amended defence. There is no evidence before the Court in support of such defences. If the Court were to entertain the possibility of new defences at this stage of the proceeding in circumstances where the writ was originally filed in 2006 it would be manifestly unfair to [Perpetual]. The [applicant] did not make any detailed submissions in relation to her existing defence. The [applicant]’s affidavit, affirmed 20 November 2011, fails to establish a prima facie defence on the merits.
The [applicant] submits that on two occasions judges of this Court allowed the claim to proceed.
The first time was before Justice Cavanough on 12 March 2008. This was the [applicant]’s appeal of an order of Master Daly (as she was known then) made on 21 March 2007 in which Master Daly heard the [applicant]’s application to set aside judgment and dismissed the application. The [applicant] filed a Notice of Appeal and the appeal was heard by Justice Cavanough on 12 March 2008.
The [applicant] appeared in person before Justice Cavanough. Judgment in default of appearance was set aside on grounds of arguable defence in connection with payment of the amount specified in the default notice, taking into account the manner in which [Perpetual]’s claim was pleaded. The question of service of the writ was not determined by Justice Cavanough. [Perpetual] subsequently amended its statement of claim to plead further terms of the contracts relied upon in connection with compliance with the default notice.
The second occasion on which a judge of this Court allowed the claim to proceed was on 11 December 2009 before Justice Hansen (as he was then known). The background was a summary judgment application by [Perpetual] filed on 5 November 2008 on the amended statement of claim and the [applicant]’s counterclaim. [Perpetual]’s summary judgment application was heard by Associate Justice Evans on 1 October 2009. The application for summary judgment was dismissed and interlocutory orders were made. [Perpetual] appealed the decision of Associate Justice Evans and the appeal was heard and determined by Justice Hansen on 11 December 2009. The [applicant] was represented and His Honour dismissed the appeal on the grounds of an arguable defence.
[Perpetual] provided the Court with detailed submissions in the course of the trial heard on 15 and 16 June 2011. In particular, it was noted that Justice Cavanough found that the [applicant] had an arguable defence because [Perpetual] relied on the fact that the [applicant] continued to be in default at the end of ‘the grace period’ provided for in the default notice. Justice Cavanough considered that the statement of claim should have expressly pleaded clause 19.1 of the loan agreement general terms and the precise default. That was done by [Perpetual] in the amended statement of claim and the further amended statement of claim.
I will not repeat the submissions made by [Perpetual] in the course of the trial which are set out in the written submissions. However, in relation to the default provisions in the loan terms and in particular clause 19.1, the [applicant] does not put any evidence before the Court in support of her defence. There is nothing more than a mere assertion that there is an arguable case. The [applicant] is in a position to have considered the submissions put before this Court in the course of the trial on 15 and 16 June and the judgment made on 1 July 2011. There is no evidence before the Court to support the [applicant]’s assertion that there is an arguable defence based on the default notice given on 28 April 2006.
The Court is confronted with a situation where [the applicant][5] is now legally represented and there is still no evidence to establish a prima facie defence on the merits.
Mr Peters pointed to the ruling made by Hansen J, and in particular his Honour’s comments at p 28 of the ruling, where his Honour said:
… I think there is one, and only one, point of which I cannot say that it is not arguable, and that is the point concerning the construction and the effect of the notice of default, which I took up with Mr Meehan.
I am not here expressing a final view, as Mr Meehan appreciated. This is not the time for that. I express no view as to the merits of the issue in question. The issue is whether an arguable ground of defence is raised, and having considered the matter I am of the view that I have expressed, that such an issue is raised.
This Court has now had the opportunity to consider the evidence in relation to the arguable point raised by Justice Hansen. The Court was taken squarely to this issue in the course of the trial on 15 and 16 June 2011. After considering [Perpetual]’s submissions at trial, I found the [applicant] made insufficient payments during the grace period allowed by the Notice of Default to clear the existing default and avoid further default during the default period. Thus, I concluded the [applicant] was in default at the end of the grace period, giving rise to [Perpetual]’s entitlement to take possession of the security property and requiring accelerated repayment of the loan monies.
Detailed submissions were made by [Perpetual] at the trial which are available to the [applicant]. Despite this, the [applicant] has not put any evidence before the Court to establish a prima facie defence on the merits and now attempts to raise fresh defences without even providing a draft of those defences to the Court.
On the evidence before the Court, I do not consider the [applicant] has established a prima facie defence on the merits. Further, I do not consider there is a reasonable explanation for the delay in making this application. Despite having been put on notice twice that she was embarking upon the incorrect procedure, the [applicant] elected to proceed and now finds herself making this application out of time. Accordingly, I do not grant leave to the [applicant] to bring this application out of time.
[5]In this passage, her Honour mistakenly referred to ‘the plaintiff’ when she should have referred to the defendant (ie the present applicant).
Her Honour then said that even if leave were granted to the applicant to bring the application out of time, she was not satisfied that there was an explanation for the applicant’s non-attendance at trial on 15 and 16 June 2011.
Her Honour concluded:
The Court for good reason will rarely in the exercise of discretion under Rule 49.02 set aside a judgment which has been properly entered against an absent party where that party, being aware of the date of the trial, has failed to attend court.[6]
I am not satisfied that there is a reasonable excuse established for the [applicant]’s non‑attendance at trial.
As already noted, I consider that it would be futile to grant leave in the present case on the basis that I do not consider the [applicant] has an arguable defence.
Finally and for completeness, I consider there is prejudice to [Perpetual]. I am satisfied on the evidence before the Court that the value of the security property, of $690,000 in its present condition, is very significantly less than the amount of the judgment. The [applicant] has made no offer to provide security or to pay into Court the amount of the judgment, despite admitting that she owes the loan moneys to [Perpetual]. The [applicant]’s financial position as presently understood precludes any condition on setting aside if it was found to be in the interests of justice to do so. The evidence before the Court is that the [applicant] has not complied with the bankruptcy notice based on the judgment debt.
In summary, I do not consider that leave should be granted to the [applicant] to proceed with this application outside of time for the matters set out above. Further, even if leave were to be granted I do not consider that the judgment should be set aside. The [applicant]’s summons dated 7 October 2011 is dismissed.
[6]Adams v Cronan (Unreported, Supreme Court of Victoria, Court of Appeal, Winneke ACJ, 6 September 1996).
The applicant had not provided to this Court any outline of submissions as required but by way of oral submission she read at length from notes that she had prepared. The applicant made numerous points but, so far as I could ascertain, the significant matters upon which she relied were as follows.
First, the applicant said that the loan agreement had not been signed by or on behalf of Perpetual and that, accordingly, there was no contract or no contract containing the terms set out in the written loan document. However, it is indisputable that the applicant signed the loan document which reads as an offer to accept a loan on the terms therein contained and that, although provision is made for a written acceptance by the lender to be endorsed on the document and none was so endorsed, the money was advanced on the faith of her written offer. It was also not in issue that the applicant had signed a mortgage, which was subsequently registered, and which incorporated a memorandum of common provisions. The memorandum of common provisions, in turn, makes a number of references to a loan to be provided under an agreement covered by the mortgage and it is not suggested that there was any agreement covered by the mortgage other than that which had been signed by the applicant. In my view, there is no merit in the applicant’s submission.
Second, the applicant read at length from reasons for judgment apparently delivered by a registrar of the Federal Court in bankruptcy proceedings that had been brought against her by Perpetual. In those reasons, the registrar apparently explained why he should await a decision by the Supreme Court (I am not sure whether this was a reference to a single judge or to the Court of Appeal) before any further order was made in the Federal Court. There was nothing in this material of relevance to the present application.
Third, the applicant made reference to the provisions of the consumer credit legislation but there is no evidence that that legislation applies to this transaction. A similar point seems to have been dealt with by the associate justice.
Fourth, the applicant made a number of references to the reasons given by other judges and associate justices in the Trial Division of this Court in interlocutory applications. At best, all that these references disclosed was that, on the pleading as it stood from time to time, certain limited arguable defences had been identified. One of the issues in this category involved an argument that there was an inconsistency between the terms of the loan agreement and the terms of the memorandum of common provisions incorporated in the mortgage. Whereas it was a term of the loan agreement that, if the applicant did not correct a default within any grace period, or if the applicant was in default again for a similar reason at the end of that period, then the total amount owing became immediately due and payable, the memorandum of common provisions used different language (in cl 19.3) that ‘during the period of grace … you are allowed to correct any default that can be corrected’ and ‘if you do not correct that default within that period … the amount owing becomes immediately due for payment’. This apparent inconsistency was drawn to the attention of the associate justice by counsel for Perpetual in written submissions at trial. Perpetual submitted that there was no inconsistency because a default under the loan agreement was also a default under the mortgage (referring to relevant provisions). Perpetual submitted, in the alternative, that to the extent of any inconsistency, the terms of the loan agreement prevailed as it was a specific document relating to the loan transaction as distinct from the memorandum of common provisions which applied generally to loans secured by mortgages which incorporated its provisions, citing Perpetual Nominees Ltd v Parist Holdings Pty Ltd.[7] In my opinion, those submissions on behalf of Perpetual were correct.
[7][2005] NSWSC 1345 – see [18].
If (contrary to my view) the applicant has any arguable defence on the merits that the associate justice should have taken into account in deciding whether to set aside the judgment, there is a further consideration which demonstrates that it would have been futile for the judgment to have been set aside and a new trial held. That consideration is that a second default notice was given by Perpetual and the applicant failed to remedy the default. The matter of the second default notice was pleaded by Perpetual, referred to in counsel’s written submissions and dealt with by the associate justice as I have mentioned above. Counsel for Perpetual told this Court that his client had ultimately not relied on the second default notice before the associate justice as it was unnecessary to do so. Notwithstanding that, the associate justice did deal with it, it was pleaded (as I have said) and there is no apparent answer to it. Finally, in the end, it must be recognised that the applicant has had the benefit of the loan monies for very many years and has not made any payment in respect of the loan likewise for very many years.
For the foregoing reasons, I do not think that there is any relevant substance in the matters expressly raised by the applicant on this application.
In order to obtain leave to appeal, the applicant has to demonstrate that the decision below is attended by sufficient doubt as to justify a grant of leave. In the present context, that means that the applicant must at least establish a strongly arguable case that the discretion of the associate justice miscarried. In my opinion, she has failed to do so. It does not appear that her Honour acted upon a wrong principle or took into account any irrelevant matters. Nor does it appear that her Honour failed to take into account any relevant consideration and her decision is not shown to be so unreasonable or plainly unjust that a failure to properly exercise her discretion may be inferred.[8] Finally, I am satisfied that no useful purpose would in any event have been served by setting aside the judgment for the reasons mentioned above.
[8]See House v The King (1936) 55 CLR 499, 505.
I would dismiss the application.
---
8
0