Keystart Loans Ltd v Winfield
[2004] WADC 136
•30 JUNE 2004
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: KEYSTART LOANS LTD -v- WINFIELD [2004] WADC 136
CORAM: MAZZA DCJ
HEARD: 4 JUNE 2004
DELIVERED : 30 JUNE 2004
FILE NO/S: CIV 2721 of 2003
BETWEEN: KEYSTART LOANS LTD
Plaintiff
AND
ROSINA LUISA WINFIELD
Defendant
Catchwords:
District Court - Jurisdiction to order possession of mortgaged property to mortgagee - District Court of Western Australia Act 1969 (WA), s 50(1)(d) - Meaning of "value of the land by the year"
Evidence - Judicial notice - Can court take judicial notice of rental value of property
Legislation:
District Court of Western Australia Act 1969 (WA), s 50(1)(d), s 61
Rules of the Supreme Court 1971, O 62A, r 2, r 3, r 4
Transfer of Land Act 1893, s 111, s 116, s 199
Result:
Court has jurisdiction, subject to the provision of further evidence
Representation:
Counsel:
Plaintiff: Mr D H Solomon
Defendant: No appearance
Solicitors:
Plaintiff: Solomon Brothers
Defendant: Not applicable
Case(s) referred to in judgment(s):
City Mutual Life Assurance Society Pty Ltd v Lance Creek Meat Works Pty Ltd [1976] VR 1
Connolly v Ryan (1922) 30 CLR 498
Farrington v Smith [1894] 20 VLR 90
Fazari v Brady [1971] 1 SR (WA) 188
Holland v Jones (1917) 23 CLR 149
Murcia & Associates (a firm) v Grey (2001) 25 WAR 209
Case(s) also cited:
Commonwealth Shipping Representative v Peninsula and Oriental Branch Service [1923] AC 191
R v Blakely & Ors; Ex parte The Association of Architects Engineers Surveyors and Draughtsmen of Australia (1950) 82 CLR 54
MAZZA DCJ: Before me is an uncontested application for leave of the Court to enter judgment in default of appearance in a mortgage action pursuant to O 62A, r 4 of the Rules of the Supreme Court 1971 ("RSC"). The plaintiff seeks, inter alia, in its statement of claim an order for possession of a property situated at 7 White Street, Brookton ("the property").
The history of the matter
The plaintiff is the mortgagee and the defendant is the registered proprietor and mortgagor of the property. By a written loan offer dated 16 December 2002 the defendant offered to borrow from the plaintiff $49,000, which offer the plaintiff accepted. The plaintiff advanced the sum of $49,000 to the defendant on or about 3 January 2003. The loan is secured by a mortgage dated 18 December 2002 which was duly registered at the Department of Land Information pursuant to the Transfer of Land Act 1893 ("TLA").
The terms of the loan and mortgage provide, inter alia, that:
(a)The defendant would pay the balance of the loan together with interest on the outstanding balance by consecutive calendar monthly instalments on the same date in each successive calendar month.
(b)If the defendant defaulted in her obligations the plaintiff may serve on her a notice of default requiring her to remedy the default complained of within 31 days.
(c)If a defendant failed to remedy the default complained of within 31 days the loan, interest and other moneys secured by the mortgage become immediately due for payment and the plaintiff may take possession of the land.
The defendant failed to duly and punctually pay some monthly instalments up to July 2003.
The plaintiff served on the defendant by ordinary and registered post a default notice dated 16 July 2003 alleging that the defendant had failed to pay monthly instalments totalling $789.72. The notice required the defendant to remedy the breach within 31 days by paying to the plaintiff $789.72. The notice went on to specify that if the breach was not remedied the plaintiff would have the right to require the defendant to pay the entire amount owing under the loan and may take possession of and sell the property.
The 31 day period expired on 18 August 2003 by which time the defendant had failed to remedy the default. Accordingly, the amount of the loan, interest and other moneys secured by the mortgage became immediately due for payment and the defendant became entitled to possession of the property.
The plaintiff's statement of claim sought orders for possession of the property and for the payment of principal and interest which was quantified as at 10 December 2003 at $50,504.44. In addition the plaintiff sought interest on this sum and costs.
In its chamber summons dated 25 May 2004 the plaintiff sought orders that:
(a)Within 28 days of service of any judgment on her the defendant give to the plaintiff possession of the property; and
(b)Judgment be entered for the plaintiff against the defendant in the sum of $50,504.44 plus interest at the rate of $9.32 per day from 11 December 2003; and
(c)The defendant pay the plaintiff's costs of the application under the action to be taxed.
The plaintiff's application for leave to enter judgment in default of appearance came before me in a general chambers list on 8 June 2004. The defendant, having been served with the application, was called but did not appear.
Up until now, at least, writs for possession of property in mortgage actions are uncommon in this Court. I was told from the bar table that some actions have been commenced in this Court in the past and that applications for leave to enter judgment in default of appearance have been heard by Registrars. I was also told that, more recently, and on at least one prior occasion, an application for possession had been heard by another judge at which time the question of jurisdiction was not raised or determined. Because an order for possession would turn the defendant out of her home, and because I have a duty to satisfy myself as to jurisdiction: Murcia & Associates (a firm) v Grey (2001) 25 WAR 209 at 213, I raised the question of jurisdiction with the plaintiff's counsel. After considering the matter briefly, counsel for the plaintiff relied upon s 50(1)(d) of the District Court of Western Australia Act 1969 ("DCA") to sound jurisdiction. Mr Solomon on behalf of the plaintiff made brief oral submissions to me on 8 June 2004 and then helpfully provided me with written submissions at a later date.
The matter of jurisdiction may be of some importance in the future. Mr Solomon advised me that this Court could expect more mortgage actions and consequently more applications for leave to enter judgment in default of appearance. Accordingly, it seemed to me useful for the question of jurisdiction to be examined and a decision made for the benefit of others in the future.
The facts of the case
The facts to support the plaintiff's application are set out in the affidavit of Leo John McManus sworn 18 May 2004. The contents of that affidavit, in my opinion, comply with the requirements set out in O 62A, r 3 of the SCR. I am satisfied that the facts set out earlier in this judgment have been proved. Further, I am satisfied that the requirements of O 62A, r 2 have been complied with.
The affidavit provides that as at 18 May 2004 the defendant had defaulted in payment of instalments of principal and interest in the sum of $837.23 and that $51,018.38 remained owing by the defendant to the plaintiff and that interest was accruing at the rate of $9.77 per day.
Section 50 of the DCA
The civil jurisdiction of the District Court is derived entirely from the DCA. It follows that the plaintiff must point to some provision in the DCA to found jurisdiction.
Section 50 of the DCA provides insofar as it is relevant to this case:
"50(1)… the Court has the same jurisdiction to hear and determine and may exercise all the powers and authorities that the Supreme Court has and may exercise from time to time, in relation to —
(d)an action of ejectment to recover possession of any land, where the value of the land does not exceed $125,000 by the year or where the rent exclusive of ground rent, if any, payable in respect of the land does not exceed the sum of $125,000 by the year."
According to Butterworths Legal Dictionary at p 407 ejectment is a claim "for the recovery of possession of land". Ejectment has a long and interesting history (see Wharton's Law Lexicon, 10th ed pp 278 and 9) and is now taken as a reference to modern actions for recovery of land: Sykes & Waller "The Law of Securities" 5th ed Law Book Company 1999 at p 252. It is a prerequisite for the proper maintenance of such a claim that the plaintiff has a right to possession of the subject land: Connolly v Ryan (1922) 30 CLR 498 at 506. Does the plaintiff in this case have a right to possession of the property and thereby bring an action for ejectment?
The short answer to this question is "yes". Apart from the plain provisions of the mortgage, the mortgagee is assisted by the TLA. Section 111 of the TLA provides, insofar as is relevant:
"… the mortgagee…or his transferees upon default in payment of the principal sum or interest … or any part thereof respectively in the time mentioned in the mortgage or charge may enter into possession of the mortgaged or charged land by receiving the rents and profits thereof and may distrain upon the occupier or a tenant of the land under the power to distrain hereinafter contained or may bring an action of ejectment to recover the land either before or after entering into the receipt of the rents and profits thereof or making any distress and either before or after any sale of such land shall be effected under the power of sale aforesaid…" (emphasis added).
Section 116 of the TLA insofar as is relevant provides:
"In addition to and concurrently with the rights and powers conferred on a mortgagee and on a transferee of a mortgage by this Act every present and future mortgagee for the time being of land under this Act and every transferee of a mortgage for the time being upon any such land shall until a discharge from the whole of the money secured or until a transfer upon a sale or an order for foreclosure (as the case may be) shall have been registered have the same rights and remedies at law and in equity (including proceedings before Justices of the Peace) as he would have had or been entitled to if a legal estate in the land or term mortgaged had been actually vested in him with a right in the mortgagor of quiet enjoyment of the mortgaged land until default in payment of the principal and interest money secured or some part thereof respectively or until a breach in the performance or observance of some covenant expressed in the mortgage or to be implied therein by the provisions of this Act…" (emphasis added).
Section 199 of the TLA protects the registered proprietor from an action of ejectment or other action for the recovery of land except if the registered proprietor as mortgagor is in default.
It seems to me that the combined effect of these provisions is to create a tenancy relationship between the mortgagee and mortgagor that allows a mortgagor quiet enjoyment of land provided that the mortgagor is not in default. Once the mortgagor is in default the tenancy ceases and the mortgagee is entitled to possession and can bring an action for ejectment; Farrington v Smith [1894] 20 VLR 90 at 92 ‑ 93 and City Mutual Life Assurance Society Pty Ltd v Lance Creek Meat Works Pty Ltd [1976] VR 1 at 9 ‑ 10.
Of course the terms of s 50(1)(d) of the DCA only allow the District Court to deal with actions for ejectment to recover possession of land:
"where the value of the land does not exceed $125,000 by the year or where the rent exclusive of ground rent, if any, payable in respect of the land does not exceed the sum of $125,000 by the year."
I noted, in oral argument before me, that the plaintiff had not pleaded in its statement of claim the value of the land by the year and queried whether it was necessary to do so. I have since considered the provisions of s 61 of the DCA which provide:
"61.It is not necessary in any case that the facts necessary to give jurisdiction should appear by recital, averment or otherwise upon any proceeding in or issuing out of the Court."
As a result, I conclude that the value of the land by the year does not have to be pleaded.
However, in order to be satisfied that I have jurisdiction to give the plaintiff possession, I must be satisfied that the value of the land in the sense referred to in s 50(1)(d) of the DCA does not exceed $125,000 by the year. The meaning of the words "the value of the land by the year" and "ground rent" was analysed by Jones DCJ in Fazari v Brady [1971] 1 SR (WA) 188 at 190 ‑ 191. Jones DCJ ultimately came to the view that the best criterion for calculating the value of the land by the year was to arrive at "the annual sum for which in fact the land is let: if it is not let, then the annual sum for which it can reasonably be expected to be let" less actual yearly outgoings.
Obviously, the property is not the subject of a tenancy in which the defendant is paying rent to the plaintiff. I need to be satisfied in order to conclude that I have jurisdiction to deal with the plaintiff's application, that the annual sum for which the property can reasonably be expected to be let is less than $125,000 less outgoings.
Evidence as to annual rental value
There is no evidence before me in Mr McManus' affidavit or from any other admissible source as to the annual rental value of the property. Mr Solomon has submitted that the property is a dwelling in the country town of Brookton and that I can take judicial notice of the fact that such a property would not have an annual rental value exceeding $125,000.
In Holland v Jones (1917) 23 CLR 149 at 153 Isaacs J said:
"The only guiding principle – apart from Statute – as to judicial notice which emerges from the various recorded cases, appears to be that wherever a fact is so generally known that every ordinary person may be reasonably presumed to be aware of it, the Court 'notices' it, either simpliciter if it is at once satisfied of the fact without more, or after such information or investigation as it considers reliable and necessary in order to eliminate any reasonable doubt.
The basic essential is that the fact is to be of a class that is so generally known as to give rise to the presumption that all persons are aware of it. This excludes from the operation of judicial notice what are not 'general' but 'particular' facts. … To import knowledge of a particular fact in issue would be to import evidence in the strict sense regarding a matter as to which the Court is supposed to have no knowledge whatever of its own."
I do not think that the rental value of properties in the country town of Brookton is of such general knowledge as to give rise to the presumption that all persons are aware of it. In truth, the rental value of a property is a matter which requires knowledge of the Brookton area and a knowledge of the specific property itself. On the evidence before me I do not believe that I can take judicial notice that the annual rental value of the property is less than $125,000.
Conclusion
Provided that I am satisfied that the annual rental value of the property does not exceed $125,000 I am satisfied that this Court has the jurisdiction to deal with the plaintiff's application. Furthermore, again subject to the issue of the annual rental value of the property, I am satisfied that the plaintiff has made good its application for judgment in default of appearance. In the circumstances, I intend to give the plaintiff the opportunity of presenting evidence as to the annual rental value of the property. I propose to give the plaintiff leave to file a further affidavit as to the annual rental value of the property. I will adjourn the plaintiff's application to consider the contents of the affidavit.
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