JP Morgan Trust Australia Limited v Lees - [2009] SASC 339

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
JP MORGAN TRUST AUSTRALIA LIMITED v LEES
[2009] SASC 339
Reasons of Judge Lunn a Master of the Supreme Court
4 November 2009
PROCEDURE
Possession order made for land under Part 17 of the Real Property Act - request by occupier under 6R 204A(6) that warrant of possession not issue - held anyone physically present on the land was an occupier for the purpose of 6RR 204 and 204A, but the status of occupier was not to be granted where interests were properly protected by another occupier - held no good and sufficient reason shown on circumstances since the making of the possession order to refuse the issue of the warrant.

JP MORGAN TRUST AUSTRALIA LIMITED v LEES
[2009] SASC 339
Reasons on whether a warrant for possession should issue.

JUDGE LUNN: The first defendant, Damien Lees, is the registered proprietor of the land in Certificate of Title, Register Book, Vol 5911 Folio 420, known as 14 North Street, Frewville (“the property”). He holds this land as the trustee of the KLV Family Trust, but the terms of that trust are not in evidence.
Kirsty Lee Viney (“Ms Viney”) at some point in the past has been a domestic partner of the first defendant within the meaning of the Domestic Partners Property Act 1996 and its predecessor. Ms Viney and the first defendant have had seven children, the youngest of whom is still quite young. The present status of the relationship between Ms Viney and the first defendant will be dealt with later. Ms Viney and the seven children continue to reside in the property. By virtue of 6R 204(5)(b) Ms Viney has become the second defendant in this action.
By a loan agreement entered into on 15 October 2006 the first defendant as the trustee for the KLV Family Trust borrowed $477,000 from the plaintiff for business or investment purposes. On that date he gave a first mortgage over the property to the plaintiff to secure the repayment of that loan. The terms of the loan included that interest was payable at the plaintiff’s variable rate plus a margin of 3.95% pa and an additional 4% pa if there was default. The first defendant was obligated to pay monthly instalments to the plaintiff which were initially $4,695 per month, but which varied subsequently depending upon adjustments to the variable interest rate.
On 26 September 2007 the plaintiff instituted this action under Part 17 of the Real Property Act, seeking an order for the possession of the property on the grounds that the defendant had defaulted in his monthly repayments. The summons first came on for hearing on 31 October 2007 before his Honour Judge Withers in the presence of a solicitor for the plaintiff and Ms Viney. The hearing was adjourned until 30 April 2008 with Judge Withers noting:
The premises are occupied by (the defendant’s) former partner and proposals are in place to have the premises transferred to her and for her father to pay outstanding arrears and costs. The plaintiff consents to the matter being adjourned for six months with liberty to apply to enable these proposals to be implemented.
The hearing on 30 April 2008 was attended by the solicitors for the plaintiff and the father of Ms Viney (who is referred to in various places as either Mr Rowse or Mr Ralph). An order was made for possession to be given within 28 days of service of the order on the defendant. His Honour Judge Withers noted:
I note that the plaintiff presses for an order for possession. The partner of the defendant presently resides in the property with a number of children. I also note that this matter has already been adjourned for six months from when it was first before the Court. I will allow a longer than usual period for the order for possession to enable the resident to take such action as she may be advised.
The sealed Order for possession was served on the defendant in Victoria on 19 May 2008. Ms Viney made no application to the Court within the 28 day period.
There were many communications between the plaintiff and its various agents on the one hand and Ms Viney on the other hand. On 29 July 2008 the defendant granted a second mortgage over the property to Ms Viney’s mother, Marie Lindsay. The papers for this transaction are not in evidence. As a result of it, $153,000 was paid to the plaintiff on account of the mortgage debt which was applied by it to discharge the arrears of $105,120 and to put the defendant into credit for $47,879 for his future monthly instalments. Ms Viney alleged this $153,000 was lent to her and not to the first defendant, but there is no evidence to prove it.
By June 2009 the plaintiff considered that the repayment of the loan was again in arrears. In about early July 2009 it served notices under 6R 204A(3) on each of the defendant and Ms Viney. On 6 July 2009 each of the defendant and Ms Viney lodged separate requests under 6R 204A(4) for hearings to oppose the issue of a warrant for possession for the property. Ms Viney also purported to include in her request the names of her children and her father.
I am now conducting a hearing under 6R 204A(6) on the request of Ms Viney who claims to be an occupier of the property. Although the first defendant attended on the first hearing on 21 July 2009, he has not attended since and has not pursued his request under 6R 204A(4) and (6).
The Law.
6RR 203 and 204 provide:
203 Types of action for possession of land
For the purposes of this Part, a distinction is made between two types of action for possession of land –
(a)an action in which the plaintiff seeks an order enforceable against a named defendant (but against no-one else);
(b)an action in which the plaintiff seeks an order enforceable against anyone who may happen to be in possession of, or physically present on, the land.
204Actions for possession of land
(1)This rule applies to an action for possession of land in which the plaintiff seeks an order enforceable against anyone who may happen to be in possession of, or physically present on, the land.
(2)The originating process for an action to which this rule applies is to be accompanied by an affidavit stating the grounds on which the plaintiff claims to be entitled to possession.
(3)The Court will not give judgment for possession of land in an action to which this rule applies unless satisfied that appropriate notice of the action has been given to those presently in occupation of the land.
(4)However, notice need not be given to an occupier if the Court is satisfied that the occupier is a trespasser who entered the land without any actual or apparent right to do so and an order for possession should be made as a matter of urgency.
(5)Any person to whom notice is given, or who is entitled to notice, under this rule –
(a)may file a notice of address for service; and
(b)on doing so, becomes a defendant to the action.
6R 204A provides:
204AWarrants of possession to be executed more than six months after the possession order.
(1)This rule applies to any warrant of possession which is to be executed more than six months after the making of the order for possession on which it is based.
(2)The plaintiff must not cause a warrant to which this rule applies to be executed unless:
(a)it was issued by permission of the Court under this rule; or
(b)it was issued under subrule (8).
(3)At least 20 days before applying for the issue of a warrant to which this rule applies, a plaintiff is to send, by ordinary prepaid post, a notice in an approved form to:
(a)each defendant at their last known address; and
(b)the occupiers of the premises which are to be the subject of the warrant.
(4)A defendant or occupier who wishes to oppose the issue of the warrant, must, within 10 days of the date of the notice sent to them, file in the Court a request, in an approved form, for a hearing together with any affidavits deposing to facts on which they seek to rely.
(5)If a request under subrule (4) is filed the Registrar will, before issuing a warrant of possession, convene an urgent hearing by the Court and will send a notice of it to all plaintiffs and defendants and to all persons identified in the application for the issue of the warrant or in the request for a hearing as an occupier of the premises.
(6)Upon a hearing under subrule (5) the Court will consider whether, having regard to the circumstances which have occurred since the making of the order for possession, there is any good and sufficient reason why permission for the warrant to issue should not then be granted and, unless satisfied that such reason exists, will order the issue of the warrant.
(7)The plaintiff may prove compliance with subrule (3) by filing a certificate in the approved form.
(8)When a certificate has been filed under subrule (7), and no request has been received under subrule (4), the Registrar may issue the warrant of possession.
6R 204A only came into operation on 1 April 2009. This is the first time the Court has considered its operation and scope.
Ms Viney as an occupier.
The plaintiff took a preliminary objection that Ms Viney had not shown herself to be an occupier of the property and so had no locus standi to make a request under 6R 204A(4). It accepts that “occupier” has the same meaning in 6R 204A as it does in 6R 204.
Counsel for the plaintiff relied on a number of authorities on similar, but not identical, legislation and Rules in New South Wales where it had been held that the members of the immediate family of the mortgagor were not occupiers: National Commercial Banking Corporation of Australia v MRM Holdings Pty Ltd (1983) BPR 9339; Kerr v Sheriff of New South Wales (1996) 9 BPR 16, 215; Secure Funding Pty Ltd v Coughlin, Schmidt AJ, 15 May 2009, [2009] NSWSC 384. He contended that only occupier of the property was the defendant.
The term “occupier” is ambiguous: Paterson v Gas Light & Coke Co [1896] 2 Ch 476 at 482-3 per Lindley LJ. There are voluminous authorities on its meaning in many statutory contexts, but it is impossible to derive any general definition from them. They merely show that it turns on the precise definition of the term in the context of the legislation or rule in which it appears.
I consider that the New South Wales authorities relied on by the plaintiff’s counsel, and all of the other authorities which I have seen, are distinguishable in this matter because of the references in 6R 203(b) and 6R 204(1) to “anyone ….. physically present on, the land”. This does not appear in any of the other sections or rules considered in the authorities. In my view, the definition of “occupier” in 6R 204A has to be consistent with 6RR 203(b) and 204(1) and to encompass anyone present on the land. “Occupier” in 6RR 204 and 204A needs to be construed in the context of 6R 203 and to be given a meaning which enables the purpose of 6RR203-204A to be implemented: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381. This action, which is under Part 17 of the Real Property Act, comes within 6R 203(b) in that the order for possession requires the Sheriff to evict anyone who he finds to be present on the land when he executes the warrant of possession based on the possession order. As a matter of fairness and justice people who are present on the land are entitled to be heard on the making of the possession order, or under 6R 204A on the issue of the warrant, on the exercise of the Court’s discretion about when they are to be required to vacate the land. It has been the practice of this Court for many years in proceedings under Part 17 to hear persons who have their homes or businesses on the land, even though they may have no legal relationship with either the plaintiff or the defendant, about how and when they should vacate the land. Contrary to some of the authorities mentioned in the New South Wales cases above, the practice in this State under Part 17 has not been to confine the category of occupiers to those who have some interest in the land as tenants, licensees or the like. There are precedents for requests by such persons for extended times to vacate the land being granted because of particular hardship and prejudice which they are likely to suffer through the enforcement of the possession order. Part of the rationale in allowing occupiers to make requests under 6R 204A is that they may only have first been physically present on the land since the order for possession was made.
The practice under 6R 204 has been only to grant locus standi as an occupier to the head or representative of a group of persons who all are similarly affected by any order for possession. Thus it has been my experience over many years that where a family is in occupation of land the Court usually only hears from one member of the family, usually being the one who has prime the responsibility for providing accommodation to the other members of the family. Thus it is usual to have allowed either a father or mother, but not both, and not the children, to have the status of occupiers under 6R 204 and its predecessors.
If the defendant and Ms Viney had continued to live together as domestic partners, it is unlikely Ms Viney would be allowed the status of an occupier for these proceedings. The evidence of their relationship since the issue of the summons is fragmented and unsatisfactory. (I ignore statements which have been made on the topic by Ms Viney from the Bar table unless they have been acquiesced in by the plaintiff). On the affidavit evidence, such as it is, I am satisfied that since the institution of this action they have not been domestic partners. Thus their respective interests in the making and enforcement of a possession order on the property are not necessarily the same, and it is therefore proper that Ms Viney should be allowed the status of an occupier under 6R 204A.
No proper basis has been made out to grant the status of occupier to any of Ms Viney’s seven children or to her father. The interests of the seven children are adequately represented by Ms Viney as their mother and the person apparently primarily responsible for providing accommodation for them. There was no evidence about her father being present on the property.
Scope of 6R 204A(6).
It is clear from subr (6) that the circumstances referred to it must have occurred since the making of the possession order on 30 April 2008. There is no application under 6R 242 to vary the terms of that order or for an extension of time to appeal against it. Any order under subr (6) cannot have the effect of undermining the possession order.
Ms Viney relied upon a number of matters arising out of the dealings between herself and various agents of the plaintiff since 30 April 2008. Such dealings between the mortgagee and the occupier can be circumstances on which subr (6) can operate. I do not accept the plaintiff’s submission that she should be confined to her dealings with the plaintiff in her capacity as an occupier in order to obtain the benefit of subr (6). If any dealings in the relevant period gave rise to a contractual bar, an estoppel or statutory right for Ms Viney to oppose the issue of the warrant of possession, she is entitled to raise them under subr (6). It is not necessary here to go into the question of whether an occupier in proceedings under subr (6) can raise issues as between the plaintiff and the defendant as a reason why the warrant should not issue. For the reasons given below, insofar as Ms Viney sought to raise such issues they are clearly untenable.
The plaintiff’s counsel submitted that under subr (6) the onus of proof of establishing the relevant circumstances was on the occupier. That is probably correct, but it is not necessary to decide it here as my conclusions would be the same no matter which party bore the onus of proof.
It is not necessary here to go into what might constitute “good and sufficient reason” to exercise the discretion under subr (6) in favour of a defendant or occupier. For the reasons below, the occupier has not shown that there are even any reasonably arguable relevant circumstances. Thus it is not necessary to consider what degree of circumstances would induce the Court to exercise its discretion to refuse the issue of the warrant.
The evidence.
The hearing under subr (6) was conducted on affidavit evidence with the right to cross-examine deponents. Ms Viney cross-examined the three deponents of the affidavits relied upon by the plaintiff. I accept the evidence in their affidavits. Nothing in their cross-examinations adversely affected their credit. The plaintiff’s counsel elected not to cross-examine Ms Viney on her affidavits.
Ms Viney appeared unrepresented. She has no legal training but had obviously done a good deal of internet research on the law. For an unrepresented person she presented her case well, but she was mostly dealing with legal principles and concepts which she did not really understand. Much of her affidavits were strictly inadmissible as being argument and not evidence of facts, but the plaintiff did not object to them being used. Her written and oral submissions were a mish-mash of many points, most of which were not fleshed out sufficiently to make cogent arguments. I have done my best to deal below with the points which she was trying to make as best I could understand them.
From May 2008 until recently there have been a series of convoluted negotiations between Ms Viney and various agents of the plaintiff. The evidence about many of them was incomplete and unsatisfactory. There is no utility in my attempting to construct from the evidence a narrative of what occurred. Many of the negotiations either did not result in any concluded agreement or were superseded by subsequent negotiations. There were some ad hoc short term arrangements for the plaintiff to defer action on the possession order pending other arrangements being finalised, which did not occur.
Ms Viney deposed to a number of agreements which she says were made in this period with the plaintiff by deposing that there was an agreement in certain terms. Where such agreements were disputed by the plaintiff, as was the case with a number of them, the allegations of Ms Viney about them are merely assertions and not evidence of the facts. In order to establish a proper basis for a contract in law it is necessary to put forward admissible evidence in the form of documents or of what was allegedly said or done, so that from that evidence of facts the Court can reach a legal conclusion that a legally binding agreement had been reached or not reached. On the evidence in this matter, it is impossible to conclude that any agreement was reached where it is disputed by the other party. The basic building blocks on which to construct any findings of contracts are not there.
Ms Viney alleged agreements with the plaintiff that it would remove “the possession order” and/or that the interest payable under the mortgage would be reduced substantially to the original variable rate of 7.75% pa. If she could show a basis for legally binding agreements in such terms either one or both would be powerful arguments under subr (6) to stop the issue of the warrant of possession. (If the interest rate had been lowered to 7.75% pa the payments in advance on 29 July 2008 would not yet be exhausted). There is nothing contained in any of the documents exhibited to the affidavits to support that there were ever any agreements in such terms. There is no evidence of oral statements by Ms Viney or any agent of the plaintiff which, if accepted, could be the basis for finding there were agreements in such terms. Ms Viney did not point to any particular discussion or occasion on which she contended these agreements were made. Even assuming it is accepted that she raised these topics in various negotiations, there is no evidence that any agent of the plaintiff responded to them in a way which would constitute the making of a binding agreement in those terms. On the other evidence it is implausible that the plaintiff’s agents would have made agreements in those terms. The word “remove” is an expression which it is unlikely that the plaintiff’s lawyers would have used. They are experienced lawyers in Part 17 proceedings and “remove” is not usual terminology in them. The plaintiff’s then mortgage manager, Mr Ratz, did not have authority to agree to reduce the interest rate, and that makes it unlikely that he would have done so. The plaintiff’s argument seem to be that it would not have been in her best interests to agree to anything unless it included the “removal” of the possession order and the reduction of the interest rate, but this is confusing what she would like to have agreed with what, if anything, may have actually been agreed. The reality of commerce is that many people are forced into agreeing to terms which are always not in their best interests. Ms Viney gave no evidence showing that there was any valuable consideration given for any agreements in these terms. I find that the evidence does not disclose even a reasonably arguable case for any agreements in these terms.

Assuming that Ms Viney’s children are the beneficiaries under the KLV Family Trust, which was not proved, this does not impede the right of the plaintiff to enforce its mortgage. Any beneficial interest of the children in the property is not noted on the title, and, even if it was, the plaintiff’s first registered mortgage would take priority over it.
Ms Viney alleged that the first defendant had not understood the mortgage and had been intoxicated when he signed it. This was not established on the evidence. In any event, it is a circumstance which pre-dated the possession order. Even if it was a ground raised by the first defendant, he could only obtain legal redress from it if he repaid the principal sum under the mortgage. He is apparently not in a position to do so.
Ms Viney raised s 110 of the Real Property Act which provides:
110Lapse or writ, decree, warrant, or order.
Every decree, order writ or warrant of execution shall cease to bind, charge, or affect any land, unless a transfer upon a sale under such writ, warrant, decr4e, or order shall be presented for registration within six months from the day on which the copy was served, or within such extended time as the Court shall order.
The “order” referred to in that section is an order of execution such as an order under ss 7 and 8 of the Enforcements of Judgment Act 1991. An order for possession under Part 17 of the Real Property Act is not an order within s 110. Thus s 110 has not operated to invalidate this possession order.
Ms Viney raised a number of arguments based on alleged unconscionable or unfair conduct of the plaintiff and its agents in their negotiations with her. The simple answer to these points are that even if they were made out they would not give her a remedy in law of being able to remain in occupation of the property after this point in time. I do not accept her contention that the plaintiff had wrongfully treated her as being legally obligated to make the payments due under the mortgage. The plaintiff took the pragmatic position that provided someone paid the continuing monthly payments under the mortgage it would not exercise its rights to obtain possession of the property. She instigated a number of proposals for her, or others on her behalf, to either buy the property or refinance the mortgage, but they never eventuated.
As at 16 October 2009 the plaintiff claimed that $511,078 was due to it under the mortgage. While there may be some dispute about this precise figure there is no argument that the major part of it is owing. Over the past few months nothing like the monthly instalments required under the mortgage have been paid, although Ms Viney and her children have had the benefit of continuing occupation of the property. (A number of other purported payments in this period have been dishonoured).
The plaintiff has a present legal right to obtain repayment of the money which is owing to it by exercising its powers under the mortgage to sell the property. Incidental to the exercise of those powers is a right to proceed under the Order of 30 April 2008 to obtain vacant possession of the property. While there must be some sympathy for Ms Viney in her efforts to care for her seven children, the time has come for the law to be enforced. She and the first defendant have had more than enough opportunity to re-finance or to sell the property. Nothing has been established which would amount to a good and sufficient reason why the plaintiff should not now be able to issue its warrant based on the order for possession. Likewise nothing has been shown why the defendants could be entitled to relief against forfeiture.
There will be a further hearing on Monday 16 November 2009 at 9.30 am. At that hearing I expect to make the following orders:
1The requests by each defendant under 6R 204A are refused.
2A warrant for possession is to issue under the order for possession of 30 April 2008.
3The defendants are to pay to the plaintiff their costs of the proceedings under 6R 204A(5) and (6) as agreed or taxed.
7Hearing on 20 October 2009 certified for counsel.