Kwa v Bank of Western Australia
[2003] WASCA 163
•25 JULY 2003
KWA -v- BANK OF WESTERN AUSTRALIA [2003] WASCA 163
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASCA 163 | |
| THE FULL COURT (WA) | 25/07/2003 | ||
| Case No: | FUL:72/2002 | 21 JULY 2003 | |
| Coram: | MURRAY ACJ STEYTLER J | 21/07/03 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | FRANCIS TAK LAU KWA BANK OF WESTERN AUSTRALIA |
Catchwords: | Practice and procedure Application for stay of execution pending appeal Turns on own facts |
Legislation: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : KWA -v- BANK OF WESTERN AUSTRALIA [2003] WASCA 163 CORAM : MURRAY ACJ
- STEYTLER J
- Appellant
AND
BANK OF WESTERN AUSTRALIA
Respondent
Catchwords:
Practice and procedure - Application for stay of execution pending appeal - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
(Page 2)
Category: B
Representation:
Counsel:
Appellant : In person
Respondent : Mr D P Nolan
Solicitors:
Appellant : In person
Respondent : BankWest Legal
Case(s) referred to in judgment(s):
Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311
Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79
Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
National Australia Bank Ltd v Baker [2003] WASC 6
Case(s) also cited:
Federal Commissioner of Taxation v Myer Emporium Ltd (1986) 160 CLR 220
Croney v Nand [1999] 2 QD R 342
Griffiths v Australian Postal Commission (1987) 87 FLR 139
(Page 3)
1 JUDGMENT OF THE COURT: This was an application by the appellant for a stay of execution of an order made by a Master of the Court on 29 April 2003, pending the determination of an appeal from that order, instituted on 19 May. The matter before the Master was an application for summary judgment by the respondent in respect of a writ claiming possession of certain land in Scarborough. The Bank's claim was as mortgagee. The appellant had given a mortgage over the land in question, of which he was the registered proprietor in part in his own name and in respect of the balance of the land as a trustee. There was no issue that the mortgage was granted, although the point the appellant takes is that he did not, as he had been asked by the respondent to do, mortgage the land as trustee and therefore he says the mortgage has effect only to the extent that it affects land owned by him personally.
2 There appears to be no dispute that the respondent advanced funds in the order of $1.35 million, that the appellant has defaulted in making the repayments required by the loan agreement and that the money remains outstanding, together with accrued interest. The appellant suggests that the Bank acted unfairly in foreclosing the mortgage and taking possession of the properties. He argues that, left in possession, he could continue to run his business carried on on the properties by refinancing the mortgage debt, or, alternatively, he could sell them and repay the loan. In that regard, it can be no answer to the Bank's pursuit of its remedies under its security that it might recover the funds advanced and the interest owing by another means which might provide a more favourable outcome to the appellant.
3 As to the question of refinancing the debt, it appears that the appellant has engaged a consulting project manager, Mr Lindroos, to advise on a sale, or a joint venture to refinance the debt and further develop the properties. Mr Lindroos swore an affidavit on 18 July 2003 in which he refers to his efforts in this regard and says that he is in the process of having discussions with "prospective financiers" on the basis that approximately $1.6 million would be required to totally discharge the indebtedness to the Bank. Mr Lindroos expresses some confidence that he could achieve a favourable outcome, but says in the affidavit that he "could attempt, but not guarantee, to obtain the funds to discharge the debt."
4 Before the Master, the appellant argued that he ought to be given leave to defend on the basis that he did not execute the mortgage as trustee but in his personal capacity. The Master found against him on that question as a matter of fact. The Master examined an asserted defence by
(Page 4)
- way of a claim to set off damages allegedly sustained by the appellant as a result of the alleged wrongful disclosure of the appellant's financial affairs by the Bank to a third party with whom the appellant was negotiating to form a joint venture. It appeared that there would be a factual issue between the parties as to whether the Bank had made the disclosure alleged, but the Master also noted that the matters upon which the appellant placed reliance in this regard were said to have occurred after his default under the mortgage and after the Bank had made its demand for payment. In any event, the Master was unable to discern any merit in the claimed set-off.
5 The appellant claimed that the Bank should not be permitted to enforce its rights under the mortgage because the interest it was charging was unconscionable and it would be unconscionable of the Bank to foreclose because his inability to repay the debt was due to a motor vehicle accident for which the appellant was not responsible, but which had adversely affected his capacity to profitably run his business. The Master concluded that the interest rates charged were those agreed to be paid in default of repayment of the mortgage debt and he concluded that the fact that the appellant's financial difficulties may have been occasioned through no fault of his own could not deprive the Bank of its rights pursuant to its security. For those reasons, the Master concluded that there was no arguable defence advanced and that the Bank was entitled to an order for possession.
6 It is from that judgment that the appeal is now brought, essentially on the ground that the appellant was denied natural justice as there were real questions to be tried in respect of which he ought to have been given leave to defend having regard to the evidence presented to the Master. It has to be said that on the information presented to us there would seem to be negligible prospects of success in that appeal.
7 Events have moved on since the Master's judgment and since the appeal was commenced. There have been two previous applications of the kind brought to us for a stay of execution. Both have been unsuccessful. The first was to the Master on 16 June 2003 and the second was heard by Barker J on 11 July 2003. On 14 July 2003 the respondent obtained possession of the land. It is in the process of pursuing procedures appropriate to the disposition of the properties by sale.
8 The appeal does not operate as a stay of execution or proceedings under the decision of the court below unless, in the exercise of its inherent jurisdiction, the Full Court or a judge so directs: Rules of the Supreme
(Page 5)
- Court (WA), O 63 r 15. By O 47 r 13 it is provided that a stay may be granted if "by reason of special circumstances" it is inexpedient to enforce the judgment or order. It has often been said that the discretionary grounds upon which a stay will be granted pending the disposition of an appeal require the demonstration of special circumstances because there must be a justification for departure from the ordinary rule that the successful litigant is entitled to the fruits of the judgment. The law may be taken to be that stated by the Full Court in Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79, although that case was concerned with an application for a stay pending an application for the grant of special leave to appeal to the High Court: see per Ipp J at 81 and 85 and Anderson J at 89-90.
9 The approach of the court to this exceptional jurisdiction will generally be to consider the grant of a stay where it is necessary to preserve the subject matter or the integrity of the litigation, at least in the sense that it will not be possible for the appellant, if successful, to be restored substantially to his former position if the judgment against him is executed. Sometimes it is put in terms of the question whether the refusal of the stay may render an appeal futile or nugatory. But if that is established, as it would be here, because the Bank will use its mortgagee's powers of sale to dispose of the properties and therefore inevitably to bring to an end the appellant's business carried on upon the properties, that will not automatically lead to the grant of a stay. The Court will go on to consider other matters relevant to the exercise of the discretion, such as whether there is a reasonable prospect of success on the appeal and questions of hardship to the respondent and the balance of convenience.
10 We have commented upon the lack of prospects of success in the appeal. That seems to us of itself to be a powerful consideration against the grant of a stay of execution, but, this being a mortgage action, another consideration arises. What has come to be called the general rule in Inglis's case will apply. Neither an injunction nor a stay of execution will, generally speaking, be granted in a case where the debt leading to the judgment for possession is not of itself sought to be impeached (as in this case), so as to restrain the exercise by a mortgagee of its rights under the mortgage instrument, unless there is paid into court or otherwise secured to the mortgagee the amount of the mortgage debt, including accrued interest: Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161, Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311. That general rule will apply equally where a stay is sought pending an appeal: National Australia Bank Ltd v Baker [2003] WASC 6 per Pullin J at [14].
(Page 6)
11 In the circumstances of this case, apart from the incapacity to demonstrate any likelihood of success on appeal, it seems to us that, there being no dispute about the calculation of the mortgage debt and the judgment of the Master not being impeached in that sense, if, pending the appeal, the Bank was to be impeded in its capacity to exercise its rights under its security it ought to be on the condition that the debt owed to it was otherwise secured by payment into court or in some other manner. The general rule should be applied in this case and, as security has not been given and there has not been an unequivocal undertaking that it can be provided, that is an additional powerful reason why a stay should be refused.
12 There is a further difficulty in this case in that the Bank has executed its judgment for possession and is now in the process of pursuing its power of sale. What is sought therefore is not purely a stay of execution, but, as reflected in a minute of proposed orders tendered by the appellant on arguing his application, he seeks orders that he be placed again into possession of his properties, together with orders that he be compensated for any loss or damage caused to the properties and the business conducted upon those properties. There is no need to consider whether in any circumstances the Court may have an inherent jurisdiction to make all or any of such orders. It is sufficient that there were no grounds advanced upon which the exceptional course of the making of an order staying execution of the judgment should be taken and, for those reasons, we dismissed the application.
10
9
1