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King Investment Solutions v Hussain

King Investment Solutions v Hussain

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Case Copied 27 October 2005 83 min read

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Reported Decision:
64 NSWLR 441
1BFRA 577
[2007] ALMD 2639
[2007] ALMD 2663
[2007] ALMD 2638
[2007] ALMD 2350
[2007] ALMD 2637

New South Wales

Supreme Court

CITATION:
King Investment Solutions v Hussain [2005] NSWSC 1076

HEARING DATE(S): 20 September 2005

JUDGMENT DATE :

27 October 2005

JURISDICTION:
Equity

JUDGMENT OF:
Campbell J

DECISION:
Further evidence not admitted. Orders below for possession of land and sale set aside. Provision not a penalty.

CATCHWORDS:
MORTGAGES - remedies of the mortgagee - unregistered second mortgagee of Real Property Act 1900 land - availability of power of sale out of court - whether section 103 Conveyancing Act 1919 permits Court to make order for sale - whether Court has equitable jurisdiction to make order for sale - whether service of notice under section 57(2)(b) Real Property Act or section 111(2)(b) Conveyancing Act a precondition for exercise of Court's power of sale - whether Court can make order for sale in absence of first mortgagee - whether Court can make order for sale of entire interest in land, rather than of the land subject to the interest of the first mortgagee - need for evidence of value of property - need for evidence of amount owing to first mortgagee - matters to be provided for in order for sale - whether unregistered second mortgagee of Real Property Act land entitled to order for possession and writ of possession - whether such a mortgagee entitled to specific performance of covenant to deliver possession upon default - APPEAL AND NEW TRIAL - admission of further evidence - whether order for summary judgment is a final order - whether special circumstances required before further evidence admitted on an appeal from summary judgment - PENALTY - clause in mortgage agreeing to accept lower rate of interest if interest promptly paid - whether a penalty - PROCEDURE - Supreme Court procedure - power to make orders in Chambers - power to make orders on basis that reasons will be delivered later

LEGISLATION CITED:
Chancery Procedure Act 1852 (Imp)
Civil Procedure Act 2005
Conveyancing Act 1919
Conveyancing and Law of Property Act 1881 (Eng)
Conveyancing (Covenants) Amendment Act 1986
Equity Act 1901
Real Property Act 1900
Supreme Court Act 1970
Supreme Court Rules 1970
Uniform Civil Procedure Rules 2005

CASES CITED:
Akins v National Australia Bank (1994) 34 NSWLR 155
ANZ Banking Group Ltd v Comer (1993) 5 BPR 11,748
Asian Investments Corporation Limited v Symons (Supreme Court of NSW, 10 April 1996, unreported)
Au Pui-Kuen v Attorney-General (Hong Kong) [1980] AC 351
Australia and New Zealand Bank Ltd v Hathaway [1957] QWN 49
Breskvar v Wall (1971) 126 CLR 376
Brewer v Square [1892] 2 Ch 111
Burmester v Moxon (1866) 35 Beav 310; 55 ER 915
Calvert, A Treatise upon the Law respecting Parties to Suits in Equity (2nd ed, London, 1847)
Christy v Van Tromp (1886) WN (Eng) 111
CJ Belmore Pty Ltd v AGC (General Finance) Ltd [1976] 1 NSWLR 507
Commissioner of Taxation (Cth) v…

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: [2005] NSWSC 1076
Decision Date: 27 October 2005

CaseChat Overview and Summary

In King Investment Solutions v Hussain, the respondent, as the first mortgagee, had an interest in a property which was subject to a second mortgage held by the appellant. The dispute centred around the rights and remedies available to the appellant as the second mortgagee. The matter was heard in the Supreme Court of New South Wales. The appellant sought an order for the sale of the property, claiming that they were an unregistered second mortgagee under the Real Property Act 1900. The legal issues the court had to decide included the applicability of section 103 of the Conveyancing Act 1919, the court's equitable jurisdiction to order a sale, and whether the service of notice under sections 57(2)(b) of the Real Property Act or 111(2)(b) of the Conveyancing Act was a necessary precondition for the court's power of sale. Furthermore, the court had to consider whether it could make an order for the sale in the absence of the first mortgagee and if it could order the sale of the entire interest in the land, rather than just the land subject to the first mortgagee's interest.

The court held that an unregistered second mortgagee of Real Property Act land is not entitled to an order for possession and a writ of possession, nor are they entitled to specific performance of a covenant to deliver possession upon default. Regarding the power of sale, the court concluded that while section 103 of the Conveyancing Act 1919 did not apply to unregistered second mortgagees, the court did have equitable jurisdiction to make an order for sale. The court determined that the service of notice under sections 57(2)(b) or 111(2)(b) was not a precondition for exercising the court's power of sale. However, the court held that it could not make an order for sale in the absence of the first mortgagee and could only order the sale of the land subject to the first mortgagee's interest. The court also emphasised the need for evidence of the property's value and the amount owed to the first mortgagee. Finally, the court addressed the penalty clause in the mortgage agreement, finding it was not a penalty.

The court further considered the procedural aspects of the case, including the admission of further evidence, the finality of an order for summary judgment, and the circumstances under which special circumstances would allow for the admission of further evidence on an appeal from a summary judgment. The court also examined the power of the Supreme Court to make orders in chambers and on the basis that reasons would be delivered later. The court made orders for the admission of further evidence and allowed the appeal against the summary judgment, directing a new trial. The court also made orders regarding the procedure for the new trial, including the matters to be provided for in the order for sale.

Orders