First Mortgage Managed Investments Ltd v Oberlechner - [2006] NSWSC 1397

CITATION: First Mortgage Managed Investments Ltd v Oberlechner [2006] NSWSC 1397
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 30/6/2006

JUDGMENT DATE :
19 December 2006

JURISDICTION: Supreme Court

JUDGMENT OF: Rothman J

DECISION: i. the notice of motion filed by the defendant on 21 February 2006 be dismissed; ii. any and every stay of the orders of the Court issued on 21 September 2005 is set aside on and from 8 January 2007; iii. the defendant pay the plaintiff's costs of the proceedings, as agreed or assessed; iv. the proceedings are otherwise dismissed.

CATCHWORDS: CIVIL LAW - possession of property - enforcing consent orders - enforcing a judgment - cannot vary or avoid contract upon which judgment has been based - refinancing of mortgages over investment properties to discharge bankruptcy is not credit provided predominantly for personal, domestic or household purposes where mortgagor is otherwise solvent - consent judgment not set aside.

LEGISLATION CITED: Consumer Credit (New South Wales) Act 1995 (NSW)
Contracts Review Act 1980 (NSW)
Industrial Relations Act 1996 (NSW)
Real Property Act 1900 (NSW)
Uniform Civil Procedure Rules

CASES CITED: Chamberlain v DCT (1988) 164 CLR 502
Hall Chadwick v Doyle [2006] NSWSC 1195
Jonsson v Arkway Pty Ltd (2003) 58 NSWLR 451
Linkenholt Pty Ltd v Quirk [2000] VSC 166
Logwon Pty Ltd v Council of the Shire of Warringah (1993) 33 NSWLR 13
Metropolitan Water Baord v London, Brighton & South Coast Railway Co [1910] 1 KB 804
Perpetual Trustee Compnay Limited v Albert and Rose Khoshaba [2006] NSWCA 41
Project Blue Sky v ABA (1998) 194 CLR 355
Somander v Minister for Immigration and Multicultural Affairs (2000) 178 ALR 677
Tszyu v Fightvision Pty Ltd (2001) 104 IR 225

PARTIES: P: First Mortgage Managed Investments Ltd
D: Alfred Oberlechner

FILE NUMBER(S): SC 11898/2005

COUNSEL: P: M J Cohen
D: A Rogers

SOLICITORS: P: Boyce Lawyers / Gadens Lawyers
D: -

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
POSSESSION LIST

ROTHMAN J.

19 December 2006

11898 of 2005

FIRST MORTGAGE MANAGED INVESTMENTS LTD v ALFRED OBERLECHNER

JUDGMENT

1 HIS HONOUR: These proceedings concern the plaintiff's claim for possession of property arising from the default of the defendant in the repayment of money owing on loans provided by the plaintiff.

2 The fundamental factual position is not in dispute. The defendant originally possessed a number of investment properties, which were the subject of mortgage. For some significant period of time the defendant was able to service the debt from substantial earnings as an employee of the Commonwealth Bank of Australia. His employment was transferred to being a contractor to the Commonwealth Bank, from which employment he was dismissed due to redundancy. Thereafter the defendant was unable to service the debts arising from the mortgages and was made bankrupt. Prior to the trustee in bankruptcy executing a sale of the assets of the defendant, the defendant…

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: [2006] NSWSC 1397
Decision Date: 19 December 2006

CaseChat Overview and Summary

First Mortgage Managed Investments Ltd sought to enforce a judgment against Oberlechner, who had previously entered into consent orders for the sale of investment properties to repay a debt. The dispute centred around the enforceability of the consent orders and the nature of the mortgages over the properties in question. The case was heard in the Supreme Court of Victoria.

The legal issues before the court were whether the consent orders could be enforced and if the mortgages over the investment properties constituted credit provided predominantly for personal, domestic or household purposes. The court had to determine whether the refinancing of the mortgages to discharge bankruptcy constituted such credit, given that the mortgagor was solvent and the primary purpose of the mortgages was for investment.

The court held that the consent orders could be enforced as they were binding and could not be varied or avoided. It found that the refinancing of the mortgages to discharge bankruptcy did not amount to credit provided predominantly for personal, domestic or household purposes. The court emphasised that the primary purpose of the mortgages was for investment, and the solvency of the mortgagor further supported this conclusion. Consequently, the consent judgment was not set aside, and Oberlechner was required to comply with the terms of the orders.

The court ordered Oberlechner to proceed with the sale of the investment properties to satisfy the debt as per the consent orders. The court emphasised that the primary purpose of the mortgages was for investment and not for personal, domestic or household purposes, and the solvency of the mortgagor further supported this conclusion.

Orders