Forsyth v Kench - [2002] TASSC 21

[2002] TASSC 21

CITATION: Forsyth v Kench [2002] TASSC 21

PARTIES: FORSYTH, Brian John

FORSYTH, Margaret Edith
v
KENCH, Grant Edward
FOSTER, Michael Graeme

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  M300/2001
DELIVERED ON:  2 May 2002
DELIVERED AT:  Hobart
HEARING DATES:  29 April 2002
JUDGMENT OF:  Crawford J

CATCHWORDS:

Interpretation - General rules of construction of instruments - Where inconsistencies - In general - Inconsistency between different portions of mortgage - Whether later clause contradicted earlier clause creating obligation - Whether earlier clause prevails.

Forbes v Git [1922] 1 AC 256, referred to.
Aust Dig Interpretation [7]

Interpretation - Admissibility of extrinsic evidence in relation to instruments - When evidence admissible - To prove intention of parties - Latent ambiguity - Mortgage - Evidence of conversations prior to execution - Evidence of understanding of parties - Whether admissible and relevant to question of interpretation of mortgage.

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981 - 1982) 149 CLR 337, applied.
Aust Dig Interpretation [24]

REPRESENTATION:

Counsel:
             Appellants:  P W Tree
             Respondents:   C M Schokman
Solicitors:
             Appellants:  Rae & Partners
             Respondents:  Piggott Wood & Baker

Judgment Number: [2002] TASSC 21
Number of Paragraphs: 17

Serial No 21/2002
File No M300/2001

BRIAN JOHN FORSYTH and MARGARET EDITH FORSYTH
v GRANT EDWARD KENCH and MICHAEL GRAEME FOSTER

REASONS FOR JUDGMENT CRAWFORD J

2 May 2002

On 14 January 2002, the Master ordered that on or before 15 February 2002, the appellants give possession to the respondents of premises described in the folio of the Register, Vol 108305, Folio 1, unless by that date all money due under Memoranda of Mortgage B649633, B708117, B755179 and B867956 was paid. From that order an appeal has been brought and these are my reasons for determining it. I note that on 21 February the Master extended the date for possession to 22 March. It has not since been extended, which means that if I dismiss the appeal, the time for giving up possession has expired.

Proceedings were commenced when, by an originating application, the respondents applied for an order pursuant to the Land Titles Act 1980, s146(1), for possession, relying on an alleged default in the payment of money secured by the mortgages. The respondents maintain that loans totalling $621,500 were made to the appellants, the loans were secured by the four mortgages, it was a term of each mortgage that the principal would be repaid by the appellants upon a demand being made by the respondents, a demand for repayment of the principal was made and the appellants have not repaid it. The only issue between the parties is whether in fact the respondents were entitled to demand repayment of the principal. I refer to the reasons for judgment of the Master in Kench v Forsyth [2002] TASSC 1 for more information concerning the facts.

The form of the mortgages was prescribed by the Land Titles Regulations 1981, reg33, to be in accordance…

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: [2002] TASSC 21
Decision Date: 2 May 2002

CaseChat Overview and Summary

The Supreme Court of Tasmania heard an appeal by Brian John Forsyth and Margaret Edith Forsyth against the respondents, Grant Edward Kench and Michael Graeme Foster. The dispute involved an alleged default in the payment of money secured by four mortgages over properties owned by the appellants. The respondents sought an order for possession of the properties, claiming that the appellants had failed to repay the principal sum upon demand. The court was tasked with determining whether the respondents were entitled to demand repayment of the principal sum and, consequently, whether an order for possession could be made.

The primary legal issue was whether the clause in the mortgage agreements that specified repayment of the principal "on demand" could be qualified or limited by another clause that listed specific events under which the principal could be demanded. The appellants argued that the latter clause limited their obligation to repay the principal only when one of the specified events occurred. The respondents contended that the first clause stood independently and allowed for the repayment of the principal upon any demand.

The court examined the language of the mortgage agreements and found that the clause specifying repayment "on demand" was clear and unambiguous. The court rejected the appellants' argument that the later clause qualified the earlier one, as there was no indication in the document that the right to demand repayment was limited in such a manner. The court held that the plain meaning of the earlier clause should prevail unless there was an inconsistency that required the application of a rule of interpretation. The court concluded that the clauses did not contain an apparent and unresolvable inconsistency and thus did not require the application of a rule of interpretation to reconcile them.

Furthermore, the court ruled that the appellants could not rely on affidavits to establish their understanding or belief about the terms of the mortgage prior to execution, as such evidence is excluded by the parol evidence rule unless in an action for rectification. The appeal was dismissed, and the order for possession remained in effect.

Orders