Kellas-Sharpe v PSAL Limited - [2012] QCA 94

[2012] QCA 94

COURT OF APPEAL

FRASER JA

Appeal No 2828 of 2012
SC No 3700 of 2011

WENDY KELLAS-SHARPE First Applicant

and

GOLDIWAY PTY LTD
ACN 075 755 074 Second Applicant

and

OPM HOLDINGS QLD PTY LTD
ACN 118 505 641 Third Applicant

and

PSAL LIMITED
ACN 118 825 120 Respondent

BRISBANE

DATE 16/04/2012

JUDGMENT

FRASER JA: The appellants apply for a stay of orders that the respondent may enter into possession of and recover land mortgaged to it if, as has occurred, the appellants failed to pay the respondent $1,366,330.95 on or before 4 pm 28 March 2012.

The appellants cite Drew v Makita (Australia) Pty Ltd [2008] QCA 312 for their proposition that a stay should be granted because they have an appeal with arguable prospects, success in which will be rendered nugatory without a stay.

The respondents submit that the Court should refuse a stay, taking into account the principles summarised by Jerrard JA in Elphick v MMI General Insurance & Anor [2002] QCA 347 at [8], that a stay should be granted only where it is established that there is:

(a) a good arguable case on appeal; and
(b) the applicant for a stay will be disadvantaged if a stay is not ordered; and
(c) competing disadvantage to the respondent should the stay be granted that does not outweigh the disadvantage suffered by the applicant if the stay not be granted.

The first question to be addressed concerns the viability of the appeal. The issue concerns the validity of the interest provision in the loan agreement made between the first and second appellants as borrowers and the third appellant as guarantor, and the respondent in December 2009 for a loan of $1,139,368 for a period of two months.

The interest provision provides that the interest rate is, "the standard rate of 7.50 per cent per month, but whilst the borrower is not in default under the facility the lender will accept interest at the concessional rate of 4.00 per cent per month".

The appellants defended the respondents' claim for possession and for payment of arrears of principal and interest on grounds which included the contention that this provision was void as a penalty. They also counter-claimed that certain provisions of the loan agreement were unconscionable and contravened statutory provisions.

The trial judge found for the appellants on their counter-claim and declared that the loan agreement and any collateral bills of mortgage be read and construed as if any reference to payment of interest on unpaid interest or capitalisation of interest were deleted from each of those documents, and that the loan agreement and any collateral bills of mortgage be read and construed as if the definition of "interest rate" provided a standard rate of five per cent per month, but while the borrower was not in default under the facility the lender would accept interest at a concessional rate of four per cent per month. Under the loan agreement and mortgages as so reformed, the…

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.

Keep reading for free

Create a free CaseChat account to read Kellas-Sharpe v PSAL Limited and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2012] QCA 94
Decision Date: 16/04/2012

CaseChat Overview and Summary

Kellas-Sharpe v PSAL Limited involved an appeal by the applicants against a decision to deny a stay of execution in a mortgage foreclosure case. The applicants sought a stay of orders that allowed the respondent to enter into possession of and recover land mortgaged to it, following the applicants' failure to pay a sum of $1,366,330.95 by the specified date. The applicants argued that the interest provision in the loan agreement was void as a penalty and that certain provisions of the loan agreement were unconscionable and contravened statutory provisions. The trial judge found for the applicants on their counter-claim and ordered that the loan agreement and any collateral bills of mortgage be read and construed as if certain provisions were deleted. The trial judge also rejected the applicants’ defence that the interest rate provision of the loan agreement was void as a penalty.

The court was required to decide whether the appeal had arguable prospects of success, whether the applicants would suffer significant disadvantage if a stay was not granted, and whether the respondent would suffer significant disadvantage if a stay was granted. The court found that the appellants' case in respect of the penalty jurisdiction was arguable, but not practicable to form a conclusion on its prospects. The court also found that even if the appeal succeeded, there was a risk that granting a stay would result in a reduction in the amount recoverable by the respondent under the orders that would be made, and so much seemed inevitable if the appeal failed. The court refused the application for a stay.

The court ordered that the costs of this application be reserved to the Court of Appeal.

Orders