Kench v Forsyth - [2002] TASSC 1

[2002] TASSC 1

CITATION: Kench & Anor v Forsyth & Anor [2002] TASSC 1

PARTIES: KENCH, Grant Edward

FOSTER, Michael Graeme
v
FORSYTH, Brian John
FORSYTH, Margaret Edith

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  M300/2001
DELIVERED ON:  14 January 2002
DELIVERED AT:  Hobart
HEARING DATE:  26 October, 15 November, 12 December 2001
JUDGMENT OF:  Master Holt

CATCHWORDS:

Interpretation - General rules for the construction of instruments - Where inconsistencies - Later clause contradicting earlier clause creating obligation - Earlier clause prevails.

Forbes v Git & Ors [1922] 1 AC 256, applied.
Aust Dig Interpretation [7]

REPRESENTATION:

Counsel:
           Applicants:  C M Schokman
           Respondents:  M F Daly
Solicitors:
           Applicants:  Piggott Wood & Baker
           Respondents:  Rae & Partners

Judgment Number: [2002] TASSC 1
Number of paragraphs: 9

Serial No 1/2002
File No M300/2001

GRANT EDWARD KENCH & MICHAEL GRAEME FOSTER
v BRIAN JOHN FORSYTH & MARGARET EDITH FORSYTH

REASONS FOR JUDGMENT MASTER HOLT

14 January 2002

By their originating application, the applicant mortgagees have applied for an order that within 28 days the respondent mortgagors give possession to the mortgagees of premises at Coles Bay, known as the Coles Bay Caravan Park, pursuant to the Land Titles Act 1980, s146, unless in the meantime loans totalling $621,500 are repaid.

The following is common ground:

·The respondents are the registered proprietors of the Coles Bay land, being the land described in folio of the register, volume 108305, folio 1.
·The land is subject to four mortgages and the applicants are the registered proprietors of those mortgages, being:
(i)       Mortgage No B649633 by which the principal sum of $500,000 was advanced;
(ii)      Mortgage No B708117 by which the principal sum of $50,000 was advanced;
(iii)     Mortgage No B755179 by which the principal sum of $50,000 was advanced;
(iv)     Mortgage No B867956 by which the principal sum of $21,500 was advanced.

·   The principal sum of $621,500 was drawn down between 7 April 1993 and 19 September 1995.
·   The mortgages did not fix a date for repayment of the principal, but did require the respondents to make quarterly interest payments.
·   The respondents have not been in default in the payment of interest.
·   By notice issued in August 2001, the applicants demanded repayment of the principal sums within seven days.
·   The demand has not been complied with.
·   There are no collateral agreements and the whole of the terms and conditions pertaining to the loans are to be found in the written memoranda of mortgages.
·   The memoranda of mortgages each contain on the first page the words:

"How and when the principal sum is to be repaid:

On demand"

The final clause in each mortgage is as follows:
"THIRDLY it is hereby agreed that during the term of this mortgage the principal monies together with any interest and any other monies secured and payable hereunder shall be payable on demand if the Mortgagor should:-
(a)Commit any act of bankruptcy, convene any meeting of the creditors of…

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: [2002] TASSC 1
Decision Date: 14 January 2002

CaseChat Overview and Summary

This case, Kench v Forsyth, involved the Supreme Court of Tasmania, where the mortgagees, Grant Edward Kench and Michael Graeme Foster, sought an order for possession of the Coles Bay Caravan Park premises from the mortgagors, Brian John Forsyth and Margaret Edith Forsyth, due to non-payment of the principal sums of four mortgages amounting to $621,500. The mortgagors argued that a clause in the mortgages, which required repayment only under certain conditions, meant that the mortgagees' demand for repayment was ineffective, and thus no default had occurred.

The legal issue before the court was whether the clause that required repayment only under certain conditions should qualify the earlier clause that repayment could be demanded at any time, or whether the earlier clause should prevail as the dominant clause. The court found that the clauses were inconsistent and applied the principle that where an earlier clause is followed by a later clause that destroys the obligation created by the earlier clause, the later clause is to be rejected as repugnant and the earlier clause prevails. The court found that the later clause effectively destroyed the earlier stipulation that the loans continue only at the will of the mortgagees, and thus the earlier clause prevailed.

The court ordered that possession of the premises be given to the mortgagees unless all money due under the memoranda of mortgages is paid within four weeks from the day of the hearing. The court will hear counsel as to the specific date to be specified.

Orders