Donnelly v Australia and New Zealand Banking Group Ltd (No 2)
[2014] NSWCA 137
•28 April 2014
Court of Appeal
New South Wales
Case Title: Donnelly v Australia and New Zealand Banking Group Ltd (No 2) Medium Neutral Citation: [2014] NSWCA 137 Hearing Date(s): 28 April 2014 Decision Date: 28 April 2014 Before: Basten JA Decision: 1. The notice of motion filed by the appellant on 4 April 2014 seeking the sale of the property be stayed pending the delivery of judgment is dismissed.
2. The appellant to pay the respondent's costs of the motion.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: PROCEDURE - appeal - interlocutory application - stay of sale of property sought pending reserved judgment - stay refused on prior occasions - no change in circumstances - no application made to court hearing appeal - application refused Cases Cited: Donnelly v Australia and New Zealand Banking Group Limited [2014] NSWCA 20
Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; 126 CLR 161
Webuildem Pty Ltd v Arab Bank Australia Ltd [2012] NSWCA 242Category: Interlocutory applications Parties: Fiona Marie-Therese Donnelly (Applicant)
Australia and New Zealand Banking Group Ltd (Respondent)Representation - Counsel: Counsel:
Mr K Ryan (Applicant
Mr J Foley (Respondent)- Solicitors: Solicitors:
Applicant self-represented
Gadens Lawyers (Respondent)File Number(s): CA 2013/372887 Decision Under Appeal - Court / Tribunal: Supreme Court - Before: Stevenson J - Date of Decision: 29 November 2013 - Citation: [2013] NSWSC 1760 - Court File Number(s): SC 2011/305340
JUDGMENT
BASTEN JA: There is an appeal pending in this Court, challenging orders granting the respondent Bank a writ of possession to allow it to exercise its power of sale of property subject to a mortgage, upon default by the borrowers. The hearing has been held and judgment is reserved. The bank has obtained possession. The appellant now seeks an order that the proposed sale be stayed pending the decision of the Court. The hearing of the appeal took place on 1 April 2014; there is no indication as to when judgment is likely to be delivered.
The proceedings arose out of a challenge to a loan agreement taken out by the appellant and her then husband in Hong Kong dollars from the Australia and New Zealand Banking Group and ANZ Asia Limited. It is not necessary to deal with the nature of the arrangement, but there was thought to be a benefit to the borrowers, insofar as there might be an unusually low interest rate payable because of anticipated changes in the exchange rate between the Australian and Hong Kong dollars. This benefit did not follow and the appellant and her husband fell into default. The lender obtained a default judgment against the appellant's husband.
It is necessary to give a brief account of the history of the proceedings. The challenge to the loan agreement came before Stevenson J in the Common Law Division. The trial judge rejected the challenge to the validity of the agreement and gave judgment in favour of the bank for an amount in excess of $800,000. Leave was granted to issue a writ of possession which was stayed in effect over the holiday period at the end of 2013.
An appeal having been lodged, the appellant made application before me on 10 February 2014, seeking a stay of the execution of the order for a writ of possession. I rejected that application for reasons which I then delivered in Donnelly v Australia and New Zealand Banking Group Ltd [2014] NSWCA 20. The appellant sought to review that decision and a review application was heard by a court constituted by Emmett, Gleeson and Leeming JJA on 5 March 2014. Their Honours rejected the review application.
The appeal was heard on 1 April 2014 and is currently reserved. The Sheriff took possession of the premises shortly before the hearing of the appeal and has taken some steps in the course of the last month to make arrangements for the sale of the property, including the appointment of a selling agent. According to Mr Foley, who filed an affidavit on behalf of the respondent, the steps taken have not yet resulted in the appointment of the selling agent, although that process is currently underway. There will no doubt be steps required once an agent has been appointed to advertise the property for sale. Those steps have not yet been taken but Mr Foley indicated that the bank intends to proceed expeditiously with the enforcement of its rights under the mortgage if this Court does not injunct further steps.
So far as the circumstances of the proceedings are concerned, counsel for the appellant pressed the proposition that the case no longer fell within the statements of principle articulated by the High Court in Inglis vCommonwealth Trading Bank of Australia [1972] HCA 74; 126 CLR 161, because there was now a challenge to the mortgage which secured the bank's debt over the property. There was an amended summons raising further grounds of appeal, which was filed by leave of the Court on the day of the hearing.
New par 3D of the amended document alleged error on the part of the trial judge in stating that the appellant had not challenged the mortgage and that the mortgage stood as security for the debt. The pleading at trial did indicate that the mortgage was invalid and was to be set aside, but on the basis that the agreement was induced by unconscionable conduct. In that sense, the invalidity of the mortgage was an essential part of the proceedings. It was no doubt accepted as involving no change in the nature of the appellant's case to allow the notice of appeal to be amended to make that clear. That does not take the proceedings outside the kind of proceedings considered in Inglis.
The challenge to the mortgage relied upon the setting aside of the facility letter. The appellant contended that if that took place there would then be an equitable obligation (unsecured) to make a payment to the bank in an amount which has not been finally determined but, the appellant accepted, maybe in the low $500,000 range. The appellant also seeks to rely upon the fact that an offer was made to the respondent at an early stage in the dispute to make a payment which would have resulted in a settlement of the dispute, not on the basis of refinancing this property but on a basis of family assistance. I am informed that the offer to pay, which was not accepted, was in the order of $400,000. That has not been repeated and no payment into court has been made of an amount which would be payable if the appeal succeeded, nor has any payment been made to the bank of such an amount, which would reduce the indebtedness of the appellant to the bank under the loan agreement and mortgage as they presently stand.
In these circumstances, I do not treat the matter as being in any different position from that which came before me in February and before a full court on review in March. The only changes that have occurred since then have been, first, that the amount of the indebtedness has inevitably arisen because of the failure to make any payments. Secondly, the Court has heard the argument on the appeal and has reserved its judgment.
The amount of the indebtedness is not a matter of particular concern, although the bank asserts that it is in a position where, according to present expectations based on valuations obtained by the bank, there will be a shortfall on realisation of the security, possibly in the order of $360,000. The bank also states that in accordance with authority in Webuildem Pty Ltd v Arab Bank Australia Ltd [2012] NSWCA 242, even the adequacy of the security is not a sufficient ground to keep the mortgagee out of its rights in seeking possession and exercising a power of sale. But in any event there is no evidence that the current security is adequate.
The fact that there has been a hearing, and judgment reserved, does not affect the position one way or the other. There is of course as time progresses, a shorter time before the matter is resolved in this Court but I have no better knowledge as to how it will be resolved than I had in February.
Accordingly, there being no significant change in circumstances and no application for a further stay having been made to the full court, who heard the appeal and would have been in a position to assess the matter on the basis of the full argument, in my view the application should be refused.
The Court will make the following orders:
(1)The notice of motion filed by the appellant on 4 April 2014, seeking that the sale of the property be stayed, pending the delivery of judgment is dismissed.
(2) The appellant is to pay the respondent's costs of the motion.
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