Gaudry v Rello Finance Pty Ltd - [2023] VSC 630

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

PRACTICE COURT
COMMON LAW DIVISION

S ECI 2023 04697

ANTON GAUDRY	Plaintiff
v
RELLO FINANCE PTY LTD ACN 633 994 859 & ORS (in accordance with the attached schedule of parties)	Defendants

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JUDGE:	GRAY J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 October 2023
DATE OF JUDGMENT:	Previous orders on 13 and 17 October 2023 Written judgment and further orders on 1 November 2023
CASE MAY BE CITED AS:	Gaudry v Rello Finance Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 630

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REAL PROPERTY — Warrant of seizure and sale — Service on Registrar of Titles — Rights and interest of judgment creditor under warrant of seizure and sale issued by County Court of Victoria — Application by registered mortgagee in possession to remove warrant — Whether maintenance and execution of warrant futile — Where title holder’s equity in land is valueless — Where no reasonable prospect that titleholder or associates will satisfy judgment debt from other resources — Impact of maintenance and execution of warrant on mortgagees, creditors and other parties — Charge in favour of judgment creditor — Priority of claims to proceeds of sale by mortgagee — Rule against tacking — Inherent jurisdiction to prevent abuse of process — Supervisory jurisdiction — Effect of undertaking — Temporary injunction to prevent re‑notification of warrant during mortgagee sale process — Transfer of Land Act 1958 ss 52, 77, 103 — Property Law Act 1958 s 94.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W Rimmer	King & Collins
For the First Defendant	Mr M Grady	SLF Lawyers
For the Second Defendant	Ms K Finemore	Blue Rock Law
For the Third Defendant	Ms H Tiplady	Victorian Government Solicitor’s Office
For the Fourth Defendant	No appearance

HIS HONOUR:

Overview

This was an application for orders requiring the Registrar of Titles to remove recordings of a warrant of seizure and sale (Warrant) from the folios of the Register for Units 1 and 2, 16 Horsburgh Grove, Armadale (Units), and to restrain the first defendant from making further applications to the Registrar to record the Warrant on those folios of the Register.

The application was urgent in respect of Unit 1, because of an imminent settlement. The primary issue in respect of both Units was whether there would be any utility in maintenance and execution of the Warrant. As explained by Dodds-Street J in Capital Finance Australia Limited v The O’Bryan Group Pty Ltd[1] (Capital Finance), if the recording of a process such as a warrant serves no useful purpose and would work an injustice, the Court may order the Registrar to remove it. The power to do so arises from the Court’s inherent jurisdiction to prevent abuse of process. There was a secondary issue in relation to Unit 2: did an undertaking given by the plaintiff adequately protect the interests of the first defendant as chargee in relation to Unit 2?
[1][2003]…

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: [2023] VSC 630
Decision Date: 1 November 2023

CaseChat Overview and Summary

The case of Gaudry v Rello Finance Pty Ltd involved a dispute concerning a warrant of seizure and sale issued by the County Court of Victoria. The judgment creditor, who had obtained the warrant, sought to enforce the warrant against the defendant’s property, which was subject to a mortgage held by Rello Finance. The issue was whether the warrant could be maintained and executed given that the equity of the title holder in the property was essentially valueless, and there was no reasonable prospect of the titleholder or associated entities satisfying the judgment debt from other resources. The central legal issues before the court were the rights and interests of the judgment creditor under the warrant, the futility of maintaining and executing the warrant, and the impact on other parties such as mortgagees and creditors.

The court was required to determine whether the maintenance and execution of the warrant was futile in light of the valueless equity in the property and the lack of prospect for the judgment debt to be satisfied from other sources. It also needed to consider the impact of maintaining the warrant on the mortgagee, creditors, and other interested parties. The court needed to assess the priority of claims to the proceeds of any sale, the applicability of the rule against tacking, and the exercise of inherent jurisdiction to prevent abuse of process. Additionally, the court had to consider the effect of any undertakings given and whether there were grounds for issuing a temporary injunction to prevent the re-notification of the warrant during the mortgagee's sale process.

In its decision, the court found that the maintenance and execution of the warrant was indeed futile given the circumstances. The court held that the equity in the property was valueless, and there was no reasonable prospect that the judgment debt would be satisfied from other resources. The court emphasised the detrimental impact on other parties, including the mortgagee, if the warrant were to be executed. It ruled that the judgment creditor's charge was subordinate to the mortgage held by Rello Finance, and the inherent jurisdiction to prevent abuse of process could be exercised. The court granted a temporary injunction to prevent the re-notification of the warrant during the mortgagee's sale process, recognising the need to balance the rights of all parties involved. The court’s decision highlighted the importance of considering the broader implications of enforcing a warrant of seizure and sale when the equity in the property is effectively valueless.

The final orders of the court included a temporary injunction preventing the re-notification of the warrant during the mortgagee's sale process, recognising the futility of maintaining and executing the warrant, and the need to protect the interests of all parties involved. The court also directed that the priority of claims to the proceeds of any sale be determined in accordance with the established legal principles, ensuring that the rights of the mortgagee and other creditors were appropriately safeguarded.

Orders