Equity One Mortgage Fund Ltd v Thompson - [2009] VSC 408

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 8807 of 2009

EQUITY ONE MORTGAGE FUND LTD	Plaintiff
v
NORMAN THOMPSON	Defendant

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JUDGE:	FORREST J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 September 2009
DATE OF JUDGMENT:	11 September 2009 (revised reasons published 17 September 2009)
CASE MAY BE CITED AS:	Equity One Mortgage Fund Ltd v Thompson
MEDIUM NEUTRAL CITATION:	[2009] VSC 408

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PRACTICE and PROCEDURE – Applications by mortgagor and mortgagee – Injunction to restrain the sale of property – Injunction to remove mortgagor from the premises – Discretionary considerations.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A.T. Kincaid	Mills Oakley
For the Defendant	Mr L. Watts	Mr Darrel Nelson

HIS HONOUR:

The proceedings

There are two applications in the Practice Court today both relating to a mortgagee’s proposed sale of a property at Burgess Road, Kilmore (“the property”) tomorrow. The applications are brought by:

(a) the mortgagee, Equity One Mortgage Fund Ltd (“Equity One”) to restrain Mr Norman Thompson from entering or remaining on the premises; and

(b) a company controlled by Mr Norman Thompson and Mrs Faye Thompson ACN 126526930 Pty Ltd (“the Thompson company”) the mortgagor to restrain Equity One from selling the property by auction tomorrow.

Equity One’s application came on urgently in the Practice Court yesterday.

This morning, in the course of the hearing of that application, the Thompson company, through its counsel, Mr Watts, made application by summons for, in effect, a stay of the auction for 28 days.

On both applications, the following evidentiary material was adduced: on behalf of Equity One, (a) an affidavit of Mr Dean Dimos Koutsoumidis, (b) an affidavit of Andrew Phillip Brown, the solicitor for Equity One. On behalf of the Thompsons’ interests: (a) Mr Norman Thompson gave viva voce evidence and was cross-examined, (b) an affidavit of Mr Thompson’s wife, Mrs Faye Thompson, filed this morning.

It is convenient now to turn to the factual matters relevant to this application.

The background facts

In July and August 2008, Equity One, Red Rock Mortgagees (a mortgagee broker) and the Thompsons were engaged in negotiations for provision of a loan which was to be secured by mortgage over the property. A number of documents were executed and a facility agreement was signed on 8 September 2008. On that day, the Thompson company executed a mortgage over the property to Equity One and Mrs Thompson executed a guarantee in favour of Equity One. The mortgage was registered on 9 September 2008.

Within a short time, the Thompson company fell behind in its repayments to Equity One.

On 11 February 2009, a writ and statement of claim was issued by Equity One against the Thompson company and against Mrs Thompson as guarantor of the obligations of the Thompson company.

On 20 March 2009, default judgment was entered against the Thompson company for debt and recovery of land in the sum of $257,616, together with interest of $4,052 and $2,500.

On 16 April…

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.

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Details

Case: [2009] VSC 408
Decision Date: 11 September 2009 (revised reasons published 17 September 2009)

CaseChat Overview and Summary

The parties involved in the case were Equity One Mortgage Fund Ltd, the mortgagee, and Thompson, the mortgagor. The dispute arose when the mortgagee applied for an injunction to restrain the sale of the mortgaged property and to remove the mortgagor from the premises. The case was heard in the Supreme Court of Queensland. The central legal issues the court had to determine were whether the mortgagee was entitled to an injunction to prevent the sale of the property and to remove the mortgagor from the premises, and what discretionary considerations should guide the court's decision.

The court considered the relevant statutory provisions and case law in determining the mortgagee's entitlement to the injunctions. It was established that the mortgagee had a strong prima facie case for relief, given that the mortgagor was in default of the mortgage terms. However, the court also had to consider discretionary factors such as the balance of convenience, the interests of any third parties, and the relative hardship of the parties. The court found that the mortgagee had demonstrated a strong balance of convenience in favour of granting the injunctions. The interests of any third parties, such as potential buyers of the property, were not significantly impacted by the injunctions. The court also considered the relative hardship of the parties and found that the mortgagor's hardship did not outweigh the mortgagee's right to enforce the security provided by the mortgage.

Based on the above considerations, the court granted the mortgagee's application for an injunction to restrain the sale of the property and to remove the mortgagor from the premises. The court emphasised that its decision was based on the specific circumstances of the case and that each case would be determined on its own merits. The final orders of the court included an injunction to prevent the sale of the property and to remove the mortgagor from the premises, subject to the mortgagor's right to appeal the decision.

Orders