HSBC Bank Australia Ltd v Russo

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

HSBC BANK AUSTRALIA LTD  v  RUSSO

[2012] SASC 9

Reasons of Judge Lunn a Master of the Supreme Court

27 January 2012

PROCEDURE

Interlocutory application by defendant under 6R 204(6) in action under Part 17 of Real Property Act 1886 for possession of property seeking relief against acceleration clause under s 55A(3)of Law of Property Act 1936 - possession order already made and warrant executed giving possession to the plaintiff - held application incompetent as not being interlocutory because not ancillary or adjectival to any principal relief remaining in the action.

REAL PROPERTY

Application under s 55A(3) of Law of Property Act 1936 for relief against operation of acceleration clause in mortgage - defendant held land as trustee - no disclosure of ultimate beneficial owners of the property - not shown defendant or ultimate beneficiaries would suffer hardship if mortgagee exercised its power of sale or that beneficiaries not in a position to pay out the mortgage immediately - application dismissed.

HSBC BANK AUSTRALIA LTD  v  RUSSO
[2012] SASC 9

JUDGE LUNN:

Reasons on defendant’s application for relief under s 55A(3) of the Law of Property Act 1936

Background

1. At all material times, the defendant has been the sole trustee of the Aldinga Beach Unit Trust (“the Trust”) which was created by a Deed dated 13 August 1995. Under that Deed the assets of the Trust are held by the trustee for the benefit of the unit holders in the Trust. The defendant acquired the subject property at 189 Esplanade, Aldinga Beach, (“the property”) in his capacity as the trustee of the Trust. On 31 October 1996 in his capacity as trustee he borrowed $115,000 from the plaintiff and granted to the plaintiff a first mortgage over the property (“the Mortgage”) to secure the debt. The letter of offer of 23 September 1996, which apparently constituted the terms of the loan which was secured by the Mortgage, by its preamble made the loan repayable on demand. Although the “Repayment” paragraph referred to a “Maturity Date”, no such date was contained in the document. That clause specified that instalments of $390.51, or such increased amount as the plaintiff required, should be paid on account of principal and interest each fortnight. Clause 2.1 of the terms of the Mortgage also made the amount secured repayable on demand unless there was a written agreement to the contrary. Both the provisions of s 55A of the South Australia Law of Property Act 1936 (“the LPA”) and, more recently, the Commonwealth National Credit Code, applied to the loan and the Mortgage.

2. The defendant subsequently granted a second registered mortgage over the property to Eric and Elizabeth Buck.  There has been considerable litigation in this Court concerning that mortgage.  I have substantial knowledge of it, but I have ignored it for the purpose of the present application.

3. On about 2 June 2006 the plaintiff instituted Action SCCIV-06-721 in this Court against the defendant seeking an order for possession…