Gippsreal Ltd v Gilbertson

[2011] VSC 446

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

PRACTICE COURT

No. 3359 of 2011

GIPPSREAL LTD	Plaintiff
v
CHELSEA GILBERTSON	Defendant

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JUDGE:	OSBORN J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 August 2011
DATE OF JUDGMENT:	25 August 2011
CASE MAY BE CITED AS:	Gippsreal Ltd v Gilbertson
MEDIUM NEUTRAL CITATION:	[2011] VSC 446

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MORTGAGES – Mortgagee seeking possession of mortgaged land on grounds of default – Mortgagor seeking injunctive relief restraining mortgagee from exercising rights under mortgage – Where notice of default confusing as to requirements imposed – Cross-applications both present seriously arguable case – Summary judgment refused – Balance of convenience favours adjournment and payment of agreed sum to mortgagee – Transfer of Land Act 1958, s 76.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Fary	Oakleys Legal
For the Defendant	Mr W Gillies	Gray Friend & Long

HIS HONOUR:

1. In this proceeding the plaintiff has sought and will continue to seek possession of land which is the subject of a mortgage to it, together with orders for the payment of the principal of the mortgage loan, penalty interest and costs that it has incurred in respect of seeking to enforce the security.

1. It comes before the Court on a summons seeking orders for possession and costs. 

1. The defendant makes a cross‑application by summons seeking formal orders that the plaintiff vacate the property of the defendant and deliver possession to the defendant and that the plaintiff be restrained from entering on to the property of the defendant at 492 Copelands Road, Warragul.  She further seeks an injunction restraining the plaintiff from exercising its rights under the mortgage and an order as to costs.

1. It appears from the affidavit material that the reality is that, although the plaintiff seized the property at one stage, the defendant is again in possession of it and I proceed on that basis.  The plaintiff’s counsel accepted this reality.

1. The plaintiff's alleged rights are, in my view, somewhat complicated by the fact that the s 76 notice given pursuant to Transfer of Land Act1958,  and a prior default notice given by way of letter, are somewhat confused and confusing.

1. I will limit my remarks for present purposes to the s 76 notice. It recites default in respect of obligations under the mortgage to make payments of council rates and provide the mortgagee with evidence of payment of council rates, and to provide the mortgagee with evidence of updated insurance particulars for the secured property.

1. The notice then states: 

TAKE NOTICE that Gippsreal Limited the mortgagee named in the mortgage REQUIRES you to pay to it all principal, interest and other moneys owing to it under the mortgage together with the proper legal costs and disbursements occasioned by the service of this Notice being $687.50 (inclusive of GST).

1. It can be seen that the requirement is not directed to the alleged defaults and further, as Mr Gillies points out, it does not state an amount owing.  It seems to me that the ordinary person receiving the notice would not understand what was being required.

1. The nexus between the default alleged and the requirement made and the consequences of that nexus are not stated.

1. It may be that, as Mr Fary submits, taken in the context of prior correspondence, these problems can be overcome, but in my view they are sufficient to mean that the plaintiff should not obtain summary judgment for possession today.  Such an order should be made with great care and only where any defence to the plaintiff’s asserted entitlement to possession has no real prospect of success.[1]  It would not be in the interests of justice, in light of the problems I have identified, to summarily dispose of the proceeding.[2]

   [1] Civil Procedure Act 2010 s 63; Spencer v Commonwealth (2010) 241 CLR 118, 128.

   [2] Civil Procedure Act 2010 s 64.

1. The defendant has stated on affidavit that she will pay to the plaintiff the principal sum advanced under the mortgage on or before 19 September 2011.  Her counsel has explained to the Court that payment of that sum is intended to be funded by members of the defendant's family.

1. The plaintiff wishes to obtain possession of the property and sell it to a buyer for a price of $620,000.  The defendant has an offer for purchase of the property at a higher figure of $700,000.  A previous attempted sale of the property by the defendant has fallen through.

1. The payment of the proposed $315,000 is not dependant upon the proposed sale, but it can be seen that the prices which the parties contend for will readily cover the total amount of the claim which is in issue, which the plaintiff says is currently $353,046.15.

1. In the circumstances, I have formed the view that the balance of convenience favours adjourning this matter for approximately a month, ordering the plaintiff to pay $315,000 to the defendant on or before 19 September 2011, reserving liberty to apply to the parties and reserving the question of costs.  I propose to so order.

1. The premise of that order is that I am satisfied that each party has a seriously arguable case on their cross‑applications and that the proper approach is to seek to facilitate a speedy resolution of the matter but not to resolve it on a summary basis today.