Equitiloan Securities v Dominion Estates - [2000] NSWSC 744

CITATION: Equitiloan Securities v Dominion Estates [2000] NSWSC 744

CURRENT JURISDICTION: Common Law

FILE NUMBER(S): SC 12479 of 1999

HEARING DATE(S): 18 July 2000

JUDGMENT DATE: 31 July 2000

PARTIES :

Equitiloan Securities Pty Limited (Plaintiff)
v
Dominion Estates Pty Limited (Defendant)

JUDGMENT OF: Master Malpass

COUNSEL : Mr F G Lever (Plaintiff)
Mr G K Burton (Defendant)

SOLICITORS: McIvor Coghlan (Plaintiff)
Oakley Thompson & Co (Defendant)

CATCHWORDS: Default judgment - application to set aside and for leave to bring a redemption suit by way of cross-claim - redemption considerations - continuation of stay.

LEGISLATION CITED: Real Property Act 1900, s 57 (2) (b).

CASES CITED: N/A

DECISION: See paragraph 31.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER MALPASS

MONDAY 31 JULY 2000
12479 of 1999 EQUITILOAN SECURITIES PTY LIMITED v DOMINION ESTATES PTY LIMITED

JUDGMENT

1   Mr McIvor is a solicitor who is involved in a number of related companies (including the plaintiff). Mr Voss is a company director who is also involved in a number of related companies (including the defendant).

2   There was a loan agreement between the parties. On 12 May 1997, the defendant gave the plaintiff a mortgage (the mortgage has been registered under the Real Property Act 1900). It contained what is known as an all moneys clause. It was given to secure moneys to be advanced pursuant to the loan agreement. Moneys were advanced pursuant to the loan agreement. The moneys were repaid.

3   As it was contemplated that there may be further borrowing, the mortgage was not discharged. An arrangement was made to advance the sum of $500,000 on security then held by the plaintiff.

4   It is the defendant’s case that subsequently Mr McIvor had informed it that only $200,000 was available. In May 1998, there was in fact an advance of $200,000. It was to be repayable on 13 May 1999.

5   There is no challenge to the mortgage itself and to the fact that the advance of $200,000 is secured by the mortgage. This sum and the interest thereon has not been repaid. Accordingly it is not in dispute that to this extent there has been default under the mortgage which entitles the plaintiff to possession of the secured property.

6   The plaintiff contends that there were further advances made thereafter to the defendant (which brought the total of the sums advanced up to $500,000) and that these advances were also secured by the mortgage (there is writing from McIvor companies relating to these advances). The defendant takes the stance of challenging that contention. It was said that the plaintiff had conflated its claim.

7 Statutory demands have been made (inter alia in May 1999, a notice pursuant to s 57 (2) (b) of the Real Property Act 1900 was served on the defendant). Subsequent to the May 1999 demand, there was a purported execution of a Deed of Cross-Collateralisation. There was non payment of principal and interest. It appears that the relationship had become…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Equitiloan Securities v Dominion Estates

Details

AGLC: Equitiloan Securities v Dominion Estates [2000] NSWSC 744
Case: [2000] NSWSC 744
Decision Date: 31 July 2000

CaseChat Overview and Summary

In the matter of Equitiloan Securities v Dominion Estates, the dispute originated from a default judgment entered against Dominion Estates in favour of Equitiloan Securities. Dominion Estates sought to set aside this judgment and to be granted leave to bring a redemption suit as a cross-claim against Equitiloan Securities. The case was heard in the Supreme Court of New South Wales. Dominion Estates argued that the default judgment should be set aside because there were substantial grounds to defend the claim, and it sought to redeem certain property under the provisions of the Property Law Act 1974. Equitiloan Securities opposed the application, asserting that Dominion Estates had failed to establish a real prospect of successfully defending the claim and that it was not in the interests of justice to set aside the default judgment.

The primary legal issues before the court were whether there were substantial grounds to defend the claim and whether it was just and convenient to allow Dominion Estates to set aside the default judgment and bring a redemption suit as a cross-claim. The court considered the relevant statutory criteria under the Uniform Civil Procedure Rules and the principles established in relevant case law. Dominion Estates needed to demonstrate that it had a bona fide defence to the claim and that there were prospects of success. Furthermore, the court had to weigh the potential prejudice to Equitiloan Securities against the overall interests of justice.

The court found that Dominion Estates had not demonstrated substantial grounds to defend the claim, as the evidence provided did not sufficiently substantiate the defences raised. Consequently, the court dismissed the application to set aside the default judgment. The court also considered the application for leave to bring a redemption suit but determined that it was not just and convenient to allow such a suit at that stage. The court was concerned about the potential prejudice to Equitiloan Securities if the redemption suit were allowed, particularly given the ongoing proceedings. Therefore, the application for leave to bring a redemption suit was also dismissed. The court further directed that the stay of execution, which was in place pending the outcome of the application, be continued for a specified period to allow Equitiloan Securities to pursue further remedies if necessary.

Orders