Kousal v Suncorp-Metway Ltd
[2011] VSC 312
•30 June 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2011 02255
| RONALD GEOFFREY KOUSAL | Plaintiff |
| -and- | |
| SUNCORP-METWAY LIMITED | Defendant |
JUDGE: | Mukhtar, AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 29 June 2011 | |
DATE OF JUDGMENT: | Orders pronounced on 30 June 2011. These reasons subsequently published on 6 July 2011 | |
CASE MAY BE CITED AS: | Kousal v Suncorp-Metway Ltd | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 312 | |
EXECUTION ― Judgment debt for sum of money ― Warrant of seizure and sale ― Unsuccessful attempt by Sheriff to sell judgment debtor’s land by auction ― Subsequent Court order permitting sale without reserve ― Sheriff’s obligations to judgment debtor ― Substantial value in debtor’s equity in land ― Meagre sale price ― No return to judgment creditor ― Impeachability of sale by judgment debtor
EXECUTION ― Warrant of seizure and sale ― Unsuccessful attempt of sale of judgment debtor’s land by auction ― Application by judgment creditor for sale without reserve price ― Court’s power ― Applicable considerations
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D Harrison on 29 June 2011. The plaintiff in person on 30 June 2011. | Hutchinson Legal (given leave to cease acting on 30 June 2011) |
| For the Defendant | Mr G. Moffatt | Mills Oakley |
HIS HONOUR:
On 30 June 2011 I granted the plaintiff, on certain conditions, his application under section 116A (3) (a) of the Transfer of Land Act to compel the defendant, as mortgagee, to produce the duplicate certificate of title to residential land he bought from the Sheriff at an auction.[1] The plaintiff needs the title to lodge his transfer from the Sheriff. The Court now publishes its reasons for that decision.
[1]The Court was constituted by an Associate Justice on a referral of powers under rule 77.05.
The case has some troubling features. Although the facts here are peculiar, this case demonstrates the great caution that must be taken before a Court permits the Sheriff to sell land under a warrant of seizure and sale without a reserve price. Such an order is not uncommonly sought and granted at the instance of the execution creditor if the Sheriff’s first attempted sale by auction fails for an absence of bids.
This judgment is a sequel to my decision in the closely associated proceeding of Guan Feng Wu v Li Ma and Zhiping Zhou[2] which is pending. For convenience and to give the full picture here, I shall rehearse facts from that earlier judgment even if repetitive.
[2][2011] VSC 208.
On 10 November 2008, Guan Feng Wu sued Li Ma and Zhiping Zhou in the Magistrates’ Court at Sunshine. The nature of the claim was described in the Complaint as being a breach of a loan agreement and a Letter of Undertaking. An amended statement of claim alleges the following. In about November 2006, the plaintiff lent the first defendant Ma the sum of Renminbi 440 000 (Chinese Yuan) which is equivalent to AU$96 660, as evidenced by document in the Chinese language entitled “IOU”. It was a one year loan at 10 per cent interest. The loan was not repaid. In December 2007 the defendants signed a Letter of Undertaking which said the loan would be repaid by 30 June 2008, the plaintiff could live at the first defendant’s home rent free until repayment, and the second defendant guaranteed the first defendant’s obligation to repay.
An order was made on the claim in the Magistrates’ Court on 12 March 2009 for $96 660 together with interest of $5487 and costs of $2008. It is not clear whether this order was obtained in default of an appearance or a defence, or if it was an undefended trial.
Under s 112 of the Magistrates’ Court Act 1989, if an order is made by the Magistrates’ Court in a civil proceeding for the payment of money, a registrar of that Court must give the judgment creditor a certificate of the order and the amount remaining unpaid under the order. The certificate may then be filed in this Court. Under s 112(2), on the filing of that certificate, the judgment is deemed to have been entered in this Court. Section 112(3) says that after the issue of the certificate:
…no further proceedings (other than proceedings under the Judgment Debt Recovery Act 1984) must be taken in a Magistrates’ Court but on the filing of the certificate in the Supreme Court, the judgment deemed to have been entered may be enforced by the same means as any other judgment entered in the Supreme Court…
Such a certificate was obtained on 7 October 2009. On the strength of that certificate, Wu obtained on 9 November 2009 a warrant of seizure and sale in this Court to be levied by the Sheriff against the property of Zhou. The warrant is valid for 12 months under the rules. The warrant may be extended but not after expiry.[3] The warrant recites the amount of the judgment debt together with costs and interest. It is the fact that Zhou has failed to make payment of the judgment debt. The judgment creditor has not pursued execution as against the property, if any, of Zhou’s co-defendant, Ma.
[3]See rule 68.05(1) and (3).
Zhou is the registered proprietor of a home at 2 Wirraway Avenue in Braybrook. It is not disputed that he lives there with a wife and children. He barely speaks English. The home is mortgaged to Suncorp Metway registered in June 2008. The Court does not know the precise figures but has been told the moneys secured under the mortgage are about $440 000 and the owner’s equity is about $210 000 probably more.
On 15 July 2010 the home was put up for auction by the Sheriff. In my experience with cases at this Court, such action is preceded by contact between the Sheriff and the debtor at the premises, and the service of notices. The Sheriff’s initial involvement is the first occasion on which a debtor realises the seriousness of the situation. Where there is some dispute over the judgment the debtor may be moved to seek a stay of the warrant or the setting aside of the judgment or some other stifling action. No such thing happened here. It may be explicable in part because Zhou does not speak English and as I shall expose later, he does not seem to understand what has happened, and I do not know what he makes of legal documentation sent to him. But it matters not because the auction occurred on 15 July 2010, unhindered as far as I can tell. For the Sheriff’s purposes, the Valuer General valued the home at $630 000 as the Sheriff’s reserve price. But the property was passed in by the Sheriff due to a lack of bids.
After that, there is some slight evidence that the judgment creditor’s solicitor corresponded with Zhou, described as seeking his advice about reconsidering his approach to selling the property. I take that to mean asking him whether he had a proposal to meet the judgment debt by some other means or, I surmise, seeing if Zhou was better off selling the property himself to obtain the debt funds. It is said Zhou did not reply to that correspondence.
In those circumstances, on 1 October 2010, the judgment creditor sought from me an order to permit the sheriff to conduct another sale by auction but “…without a reserve for the best price obtainable, on the day, by public auction”.[4] For the reasons stated in my previous judgment, I was not willing to make such an order if it meant the Sheriff could sell at whatever price he could get. Instead I gave conditional leave to sell without reserve; conditional upon prior notice to the judgment debtor with a right to set aside the order, and a second condition in effect preserving the sheriff’s duty at law to the owner of land when exercising a power of sale. The preamble in the order (called “Other Matters”) states “But what prevails is the Sheriff’s duty when exercising a power of sale, which may well be satisfied even if a sale occurs without a reserve price”. The orders said:
(1)Subject to paragraph 3 there be leave to the sheriff to conduct a sale of the property known as 2 Wirraway Avenue, Braybrook (in exercise of powers under a Warrant of Seizure and Sale filed 9 November 2009) without a reserve price provided that such leave does not thereby derogate from, or relieve the sheriff of a duty at law to the owner of the land when exercising a power of sale.
(2)A copy of this order as authenticated be served personally on the execution debtor.
(3)There be leave to the owner of the property to notify the Plaintiff of an intention to discharge the order in paragraph 1 and to apply to this Court for a discharge of that order. Unless such an application is filed and served within 10 days of the date of service of this order, the order will take full force and effect upon the Plaintiff’s solicitor giving to the sheriff evidence of the service of this order and the absence of any application to discharge it.
(4)The Warrant of Execution be extended to 9 May 2011.
[4]See Notice to Produce filed 10 September 2010
Zhou did not come to court to apply for a discharge of the order. Thus, the execution creditor was entitled to proceed with the sheriff’s sale under paragraph 1 by selling without a reserve price, although I would emphasise the significance of the proviso that liberty to do so did not say, and did not mean, that he could sell for whatever he could get.
This brings into play the plaintiff in this proceeding, Ronald Kousal. On 16 December 2010, Kousal attended the auction of the home. What is offered for sale by the Sheriff is of course the judgment debtor’s interest in the property. The object of the exercise is to obtain satisfaction of the judgment debt for the judgment creditor. The warrant tells the Sheriff the amount of the judgment debt.
The auction was not conducted on site. It took place at the Sheriff’s office in Carlton. Kousal has previously bought land from the Sheriff. On this occasion there were two people in attendance. Kousal bid $100. The other person bid $200. Kousal then bid $1000. There were no more bids. The Sheriff “knocked down” the property to him. Kousal paid the $1000 and a transfer was signed by the Sheriff. At that price the execution process for a debt of about $104 000 was utterly useless, certainly for the judgment creditor who took out the warrant and therefore instigated the whole process. Mr Zhou’s home will go once Kousel is registered under the Transfer of Land Act. The only person to gain is Kousel. For $1000 he has bought an interest in land worth at least $210 000 unless there are unregistered dealings (which has not been suggested here). As the estate agents say, that is good buying. But more seriously the facts raise the question ― and I say no more than that ― whether the Sheriff has observed his duty to the judgment debtor and whether the meagre price shows that this sale was not a real sale, or was illusory and liable to be set aside.
Kousal says when he bid at the auction there was, in the front of his mind, a previous experience where he had bought land at a sheriff’s sale and experienced problems and expense in having to wrestle the duplicate certificate of title and possession of the land from the registered proprietors. The assertion, as I detect it, is that he may have only paid $1000 for this property but in bidding he had to factor in substantial expenses he may incur in having to take action to overcome the resistance of registered proprietors. Whether or not that lacks conviction is not for me to decide.
On 21 December 2010 Kousal asked Suncorp Metway to produce the duplicate certificate of title to enable him to lodge his transfer with the Titles Office. There was reluctance in the circumstances. Kousal then tried to lodge the transfer anyway on 24 January 2011 but the Titles office would not do so without production of the duplicate certificate of title.[5] Kousel pressed Suncorp Metway to produce the title under threat of legal action. Suncorp Metway still had its apprehensions and in the end would not do so without a compelling Court order.
[5]See s 27E of the Transfer of Land Act.
Now is the place to say a little about s 52 of the Transfer of Land Act. That concerns sales by the sheriff. In essence, if a registrar is served with a copy of a warrant of execution together with some other supporting material, the registrar makes a recording of such service: see s 52(2). Until a recording of the service of the warrant is made by the registrar, no sale can be made by the sheriff under the warrant: see s 52(4). In this case, the evidence shows that the warrant was served on the registrar at the time of the first attempted sale on 15 July 2010, and was served again on the registrar on 29 October 2010 to enable the eventual sale on 16 December 2010. Under s 52(3), after any land is sold under the warrant “…the Registrar shall, on lodgement of a transfer thereof…register such transfer if lodged within the period of three months from the day on which the copy of such…process was served on the Registrar…”. If a transfer is not lodged within the period of three months, then the execution “shall cease to bind or affect the land”: see s 52(5).
Between January and April 2011, there was correspondence between Kousal’s solicitors and the mortgagee’s solicitors, and some inactivity. Suncorp-Metway were still resisting handing over the duplicate certificate of title if for no other reason than, so the correspondence says, Zhou was in default under the mortgage. Suncorp Metway was concerned that a transfer of ownership to Kousel would complicate its abilities to enforce its rights under the mortgage. There was also some suggestion of Kousal paying out the mortgage, and that led to Suncorp-Metway abstaining, for the time being, from taking steps to seek possession of the mortgage property for itself. I think what intensified natural apprehension by Suncorp-Metway was the next event.
In April 2011 (I cannot be sure of the exact date), Zhou filed an application in the Magistrates’ Court to set aside judgment, and obtain a rehearing on the merits. But he was not allowed to progress with that application. On 20 April 2011, the Civil Registrar of the Magistrates’ Court told Zhou that the Magistrates’ Court did not have any jurisdiction to hear his application for rehearing because, by reason of the registration of the judgment in the Supreme Court, the Magistrates’ Court judgment was now transformed into a Supreme Court judgment. On the registrar’s interpretation of s 112 of the Magistrates’ Court Act, no further proceedings could be taken in the Magistrates’ Court. He was being told, in effect, to apply for a setting aside in the Supreme Court. And that is what he did.
On 28 April 2011, Zhou filed a summons in the warrant proceedings to set aside the Magistrates’ Court judgment. Before then, on 21 April 2011, Kousal re-served the warrant on the Registrar under s 52 so as to restart the three-month time limit for the lodging of a transfer by Kousal. The three-month rule would mean an expiry of the time limitation on 20 July 2011, hence the urgency in this proceeding. To add to the complications, the warrant which I extended by orders made on 1 October 2010, expired on 9 May 2011. That means that after 20 July, it would not be possible for a notice of the warrant to be given to the registrar so as to restart the three-month time limit. There is a question whether the Court’s powers under s 103 of the Act could be invoked to ensure a transfer was registered even after the three month time limit.
Before the setting aside application could be heard, Kousel filed this application on 11 May 2011 and they were arranged to be considered in effect concurrently. When the Zhou matter came before me on 13 May 2011 for directions, I canvassed all the possibilities with Zhou’s interpreter concerning the application to set aside the judgment as well as the case concerning the Sheriff’s sale. I urged him to get legal advice and to speak to the mortgagee to at least understand the facts better. Zhou then instructed solicitors, Opie & Co. That firm went on the record on 31 May 2011.
A directions hearing for both matters then occurred before me on 9 June 2011. But Zhou’s solicitors then went off the record the day before. An affidavit of Alan Donald Opie sworn on 15 June 2011, states that he was also instructed by Zhou to act for him in respect of the Sheriff’s sale. Counsel was engaged, but on 8 June 2011 Mr Zhou withdrew his instructions because he was not able to afford the legal costs.
On 9 June 2011, Mr Dickinson of counsel having been previously engaged by Opie & Co appeared as amicus curiae. On that date, there was much discussion, including the question whether I should first hear and determine the application to set aside the judgment, or defer it, and the legal significance of either course on the merits of Kousal’s pending application for delivery of the certificate of title. On that occasion some debate took place concerning the construction of s 112 of the Magistrates’ Court and whether it was truly the position that only the Supreme Court had jurisdiction to set aside the Magistrates’ Court order. To add even more complications in this case, it seems there is a conflict of authorities in this Court on that question. Gillard J in Michael J Doyle & Associates v Orinico Pty Ltd[6], determined that on a proper construction of the section, the Supreme Court did not have jurisdiction to set aside the orders made in the Magistrates’ Court which are the basis of the deemed judgment in this Court. In doing so, His Honour regarded the contrary decision of Cummins J in Rushton v Braun [7] as wrong as was the decision of Byrne J in Melville v Dartmouth Projects [8] although in that latter case, Byrne J questioned the correctness of the Rushton but proceeded to apply it on the basis that both parties accepted it.
[6][2000] VSC 423
[7]Unreported, No 4239 of 1997, 18 February 1997.
[8]Unreported, No 1251 and 1252 of 1997, 5 December 1997.
I was inclined to the view that it is not for this Court to enquire into the merits or the regularity of the proceedings in the Court below, and it was only proper that the Court in which judgment was given was the same court that considered whether judgment ought to be set aside. It seemed to me that the better view was that espoused by Gillard J in Doyle. That is, when s 112 removes the Magistrates Court judgment to this Court it is only for the purposes of enforcement. I am inclined to think that when s 112 says no further proceedings shall be taken in the Magistrates’ Court that ought be construed to mean no more proceedings by way of enforcement.
In the end no decision was made on Zhou’s application and it was adjourned pending the hearing of this application. As I saw it, seeking to set aside the judgment would not collaterally then defeat or annul the sale as between the sheriff and Kousal. That is because, at the time the warrant was issued, there was a valid and undisturbed deemed judgment of the Supreme Court. The more pertinent question was whether the sale could be set aside on the grounds of a manifest undervalue. That, to my mind, was the real question and it involves an issue about the sheriff’s duties on a sale and the significance of paragraph 1 of the Court’s order on 1 October 2010. It remained for Zhou to decide whether to intervene in this proceeding or to bring a new proceeding to restrain the dealing with the land by Kousel to which the Registrar would be a party. I urged Mr Zhou to obtain legal advice and tried to convey to him the difficulties of the case and the great problems he would face if he did nothing. So much so, that I asked for the matter to be re-mentioned on 17 June 2011 to inform me whether he had obtained legal advice. Yet, on that day, Mr Zhou did not appear.
Despite all that, when this matter came on for hearing on 29 June 2011, there had been no application by Zhou to be part of these proceedings or to bring separate proceedings to set aside the sale. Therein lies what I perceive to be the real test of discretion in this case. For, whatever questions I may have agitated about the possible impeachability of the sale, Zhou is not here to propound such a case at all. The most I can do is expose the legal discourse that occurred before me lest it be of any utility to whatever may happen in this case hereafter.
The application under s 116A (3)(a) of the Transfer of Land Act
Under s 116A, an “interested person” may apply to the Court for an order directing another person to produce a certificate of title or document. There is no doubt that Kousal is an “interested person” within the meaning of that subsection. As things stand, he has purchased the land, has obtained a transfer and has an equitable interest in the property. The justification for compelling the defendant to produce this certificate of title is the requirement by the registrar and under the Act to submit any relevant certificate of title to the land concerned. [9]
[9]See s.27E of the Transfer of Land Act.
In Mitrovic v Koren,[10] it was held that where a person has acquired the equitable interest in land and is entitled to be registered as proprietor, he ought be regarded as having a prima facie right to the production of the duplicate certificate of title. That case also involved a purchase from a sheriff of unencumbered land. Gowans J held that a purchaser from a sheriff was entitled to such a right. He held that:
A person who has the duplicate certificate in his custody, by reason only of being the person whose name is on the certificate as registered proprietor, without any beneficial interest in the land, and who withholds it from such a purchaser in the face of a demand for it to be delivered up, infringes the rights of the purchaser and detracts from his beneficial interest in the property. An injunction should go to restrain him from dealing inconsistently with the property rights of the purchaser.
[10][1971] VR 479 at 481-2.
Although that case involved a withholding by the registered proprietors, I see no difference in principle where the duplicate certificate of title is held by a mortgagee. Assuming the sale is unimpeachable and there are no in personaam rights as against the transferee the discretion would ordinarily go in favour of permitting a regular dealing. The mortgagee’s position is unaffected at law. Its security remains in place as do the personal covenants under the mortgage. Of course once there is default, the defendant here could obtain possession and exercise its power of sale. That is why someone in Kousal’s position might be expected to pay out the mortgage.
In this case, there are two conceivable barriers to the Court exercising its discretion in favour of Kousal. The first is that Kousal’s right to be registered may depend on whether Zhou’s application to set aside the Magistrates’ Court judgment fails or succeeds. The second barrier is whether the sale by the sheriff to the plaintiff is impeachable and liable to be set aside.
As for the first possible barrier, I accept Kousel’s submission that even if Zhou were to set aside the judgment, that would not retroactively invalidate the warrant of seizure and sale and therefore collaterally annul the sale by the sheriff to Kousal. That is because, as was submitted:
(a)at all material times there has been a valid and operative order of the Supreme Court by which the judgment debtor owed the judgment creditor money;
(b)the judgment creditor issued a Warrant of Seizure and Sale against the judgment debtor on the proper legal basis of the judgment;
(c)the judgment creditor obtained an order from this Court on 15 October 2010 allowing the property to be sold without reserve (but as I will emphasise later, with the proper protection of the judgment debtor’s right) and that order has been valid and operative at all times; and
(d)by operation of s 25 of the Sheriff Act 2009, the plaintiff acquired good title to the property or, to be more precise, acquired the judgment debtor’s interest in the property.
As for the second possible barrier, things are not so clear. The commencement point is s 3(5) of the Supreme Court Act 1986 which says that “A judgment in any proceeding must be enforced in accordance with Chapter 1 of the Rules of the Supreme Court and not otherwise.” Under r 66.02, a judgment for the payment of money may be enforced by, amongst other things, a warrant of seizure and sale. Rule 69.02 abolished the previously used writ of fieri facias. The rules say nothing expressly about any other form of writ permitting the Sheriff to sell for the best price obtainable or some such wording. But the previous (pre-1987) rules did by means of order 43 rule 2 which provided for a writ of venditioni exponas. The rule said:
Where it appears, upon the return of any writ of fieri facias, that the Sheriff or other officer has by virtue of such writ seized, but not sold, any goods of the person directed to pay a sum of money or costs, the person to whom such sum of money or costs is payable shall, immediately after such writ with such return, shall have been filed as of record, be at liberty to sue out a writ of venditioni exponas. [11]
[11]According to the commentary under the “old” Williams, Practice of the Supreme Court of Victoria, the real estate as well as the goods of the judgment debtor were seizable under a writ of fi fa by operation of s 208 of the Property Law Act.
Order 43 rule 3 said that the writ of venditioni exponas “…and all other writs in aid of a writ of fieri facias, may be issued and executed in the same cases and in the same manner as heretofore.”
According to the Full Court of this Court in Finnegan (Timber) Pty Ltd v Beechey[12] the writ of venditioni exponas was a common law writ which was in aid of execution and was viewed as supplementary to, or a branch of a writ of fi fa rather than a primary or distinct writ giving the sheriff a new authority. It was a writ in aid of execution designed to give the sheriff “alacrity”. Commentary in Archbold’s Practice of the Queen’s Bench Division[13] suggests that the execution creditor under the fi fa may take out the writ venditioni exponas to compel a sale of the goods or land perhaps, I would add, where the Sheriff was being inactive and had failed to sell within a reasonable time. Under the writ, so Archbold’s Practice says the sheriff is bound to sell the goods “…and is not bound by the value set upon the goods in his return to the fi. fa.”[14] Thus it could be described as a command to sell for what price he could get. This is made plain in the form prescribed for a writ of venditioni exponas under the previous rules which said (with my emphasis): [15]
…Therefore we, being desirous that the said AB should be satisfied his money and interest aforesaid, command you that you expose to sale, and sell or cause to be sold, the real and personal estate of the said CD by you in form aforesaid taken, and every part thereof, for the best price that can be gotten for the same, and have the money arising from such sale before us in our said court immediately after the execution hereof, to be paid to the said AB; and have there then this writ.
[12](1983) 2 VR 215 at 216(F.C.).
[13]14 th ed (1885). Vol I at 865-6
[14]Ibid at 866.
[15]See Appendix H, form number 4.
Therefore, as appears to me, a sale by the sheriff under such a writ would be unimpeachable, as would the sheriff’s conduct unless it could be shown the sale at the “best price” was in truth not; that is, it was the product of collusion. For otherwise, under a writ of fi fa, at common law the sheriff’s duty was to take all reasonable and proper steps to ensure that the best possible price is obtained: see Owen v Daly.[16] In that case, Dean J said:
It is, I think, clearly established that at common law a sheriff selling the chattels, including chattels real, of a judgment debtor is bound to act reasonably in the interests of the judgment creditor and of the judgment debtor in order to obtain a fair price, not necessarily the market value, for it is well recognised that compulsory sales under legal process rarely bring in full value of the property sold (citations omitted). The duty of the sheriff to act reasonably with due regard to the interests of both sides and his liability in damages if he fails to exercise care has been frequently stated.
[16][1955] VLR at 446.
In Owen v Daly the Court went further and set aside the sale. Dean J acted on evidence that the value of the land as at October 1954 was 5,050l. The owner’s interest in the land was 1,500l. The judgment creditor made a bid of 10l which was the only bid made and the price was knocked down to him. The figure of 10l coincided with the sheriff’s expenses. The Court was willing to set aside the sale on the basis that a manifestly low price was really no price at all and the sale was not real. The sale was set aside not only because of the grossly low price but also because in many other respects the sale was not properly conducted. Moreover, there was evidence that the judgment creditor was very closely involved in what had been done. In the end, Dean J applied the view that there was no hardship in setting aside the sale but saying, “It might have been difficult to do so if the purchaser had been a stranger, unaware of the facts relating to the conduct of the sale.”[17]
[17]At 449.
The question of the sheriff’s duties under a fi fa arose in the High Court in Anderson v Liddell[18] a case in which on the facts the Court refused to set aside the sale on the grounds of an undervalue. The successful bid in that case was more than was owed under the judgment and the mortgage but was considerably less than the “market value”. The judgment debtor sought to set aside the sale, but failed. In dismissing an appeal, Barwick CJ affirmed that the sheriff was not required to emulate a real estate agent and make use of the trappings of an auction. The sheriff was entitled to accept any bid which is genuinely made and which bears a fair relationship to what is being sold. “[H]e must accept any bid which is not illusory or unfair in the sense of bearing no real relation to the evident worth of the land or interest offered.”[19] Kitto J cast doubt on whether the purchaser could be denied a right to have a transfer registered unless the jurisdiction of a court of equity to act in personaam was attracted by some proof of collusion. His Honour explained it this way with an incidental reference to the writ venditioni exponas:
If it was apparent to the sheriff that in fact and in all probability the bid was so far below the value that he would be acting unreasonably by accepting it, his proper course was to make a return that the property remained unsold for want of a buyer, and to refrain from selling at such a price unless commanded by a venditioni exponas to sell for what he could get (citation omitted). For selling in that situation without waiting for a venditioni exponas he would be liable for damages at the suit of the appellant, but whether the sale could be set aside in the absence of collusion between the sheriff and the purchaser is by no means clear …[20]
[18](1967) 117 CLR 36.
[19](1967) 117 CLR 36 at 46.
[20](1967) 117 CLR 36 at 49.
Mr Harrison as counsel for Kousel submitted that the Court’s order of 1 October 2010 was relevantly identical to a writ of venditioni exponas in that it entitled the sheriff to sell at the best price he could get. He says that is what has happened, and the sale is unimpeachable. Although the order relieved the sheriff of any obligation to set a reserve price, it certainly did not permit the sheriff to sell at whatever price he could get. The order permitted the sheriff to sell without a reserve price, “provided that such leave does not thereby derogate from, or relieve the sheriff of a duty at law to the owner of the land when exercising a power of sale.” That proviso, on its own terms, distinguishes the order from the warrant of venditioni exponas. It warned the sheriff that he was not being relieved of his duty to the judgment debtor. He could sell without reserve consistent with his duty.
In this case, the sheriff was still acting under the warrant of seizure and sale which, as far as it equates to writ of fi fa, means there is a question whether a sale at a gross undervalue, if that be what truly occurred, can be set aside. But I must emphasize: I am not to be taken as saying Zhou has a case to set aside the sale from the Sheriff to Kousal, or saying anything about its prospects. It may be others Zhou has consulted take a certain view about the impeachability of the case. It is entirely a matter for him. But it is no good complaining about the $1000 price, not bringing a legal proceeding, and expecting the Court to do something about it.
Mr Harrison says, correctly, that Zhou has been given ample opportunity by the Court to consider bringing a claim but has not done so. He submits that until such time as Zhou brings a claim to set aside the sale or to seek equitable relief in personaam against Mr Kousal, it would be a miscarriage of this Court’s discretion under s 116A to refuse the application just because the court apprehends that question. I accept that submission. But I still think Zhou should be given one last opportunity to obtain legal advice on his predicament. In modern litigation, the Court must have regard to the disadvantage of the litigant in person. Zhou is a mature Chinese man who barely speaks English. I do not know his personal circumstances. I have on courtroom occasions tried in vain to speak to him. I cannot be sure that he understands the significance of this case and the events leading up to it. He emotionally asserts that the person who obtained a default judgment against him is a liar who was not even in Australia. He tells me he has been to the Public Interest Law Clearing House and that Legal Aid cannot help him. He says lawyers are too expensive and Legal Aid are going to try to find a cheaper lawyer. He does not understand how someone has bought his home for $1000. Through his poor English, Zhou tells me that the house next door which is smaller than his recently sold for $700 000. On 30 June his wife appeared in Court for the first time. Her English was a little better but she too does not seem to understand the state of affairs.
Accordingly, this application was granted on 30 June 2011 but on certain conditions designed to give Zhou more time to comprehend the predicament he is in and obtain legal advice. I think the just course (seeing as the three month time limit expires on 20 July 2011) is to order Suncorp Metway to produce the duplicate certificate of title to the Registrar on 18 July 2011 next and Kousal abstain from lodging the transfer until noon on 19 July 2011 being one day before the expiration of the three-month time limit. That gives Mr Zhou approximately two weeks to consider his position and, if necessary, move the Court for any orders or extensions of time as he may be advised. The Court can do no more.
Finally I wish to say something about applications to the Court by the execution creditor to sell without reserve price, as raised in my judgment in Guan Feng Wu v Li Ma and Zhiping Zhou[21]. I have not had the benefit of submissions from a contradictor but I think sufficient has occurred in this case for me to say the following.
[21][2011] VSC 208.
First, the rules of this Court do not provide for the making of an order akin to the pre 1987 writ of venditioni exponas. Secondly, if that writ was the product of the common law and a branch of the writ of fi fa then I can see a basis for contending that the Court has power ancillary to the power to issue the warrant of sezure and sale to allow the sheriff to sell without reserve. Thirdly, under the “old” rules the application was made by the execution creditor, who after all took out the writ of fi fa in the first place. Under the current rule 66.15 it is the sheriff that is permitted to bring an application “…in aid of the enforcement of a warrant of execution…”. But the sheriff might not be motivated or regard himself as bound to do so, leaving it to the execution creditor to seek the Court’s order. Fourthly, for my part, I do not think these applications ought be made ex parte any longer which I believe has been the practice. They should be on notice to the debtor and quite possibly to the registered mortgagee. It may move the debtor to do something and avoid the problems that have occurred here. Fifthly, such an order if granted may attract other conditions such as requiring the auction to take place on site or with additional advertising. Sixthly, the Court may have to fix a “not below” price for itself on the evidence to ensure the execution process has utility. That may require proper evidence of the debtor’s equity in the land. Seventhly, as was remarked in 1982 by the Chief Justice in General Credits v Beattie[22] it may be time to revisit Rules of Court about this subject which may be ill-adapted to modern conditions.
[22][1982] VR 551 at 552.
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