Lawteal Seconds Pty Limited v Warrimoo Property Pty Ltd & Ors
[2007] NSWSC 1124
•12 October 2007
CITATION: Lawteal Seconds Pty Limited v Warrimoo Property Pty Ltd & Ors [2007] NSWSC 1124 HEARING DATE(S): 08/10/2007
JUDGMENT DATE :
12 October 2007JUDGMENT OF: Associate Justice Malpass DECISION: The plaintiff is to have judgment for possession of the land described in paragraph 1 of the Statement of Claim. Warrimoo Pty Ltd is to pay the costs of the proceedings. The exhibits may be returned. CATCHWORDS: Claim for possession - summary judgment - joinder of defendants - alleged estoppel LEGISLATION CITED: Uniform Civil Procedure Rules 2005 (NSW) PARTIES: Lawteal Seconds Pty Limited (Pl)
Warrimoo Property Pty Ltd (1st Def)
ICA Group Pty Ltd (2nd Def)
Vanessa Huxley (nee Watson) (3rd Def)
Gregory John Huxley (4th Def)
Robert Gregory Huxley (5th Def)
Pace Buckley BHNF Vanessa Huxley (6th Def)
Zara Huxley BHNF Vanessa Huxley (7th def)
Edward Huxley BHNF Vanessa Huxley (8th Def)
Ava Huxley Huxley BHNF Vanessa Huxley (9th Def)
FILE NUMBER(S): SC 10785/07 COUNSEL: Mr A. Rogers (Pl)
Mr M Foley (Sol) (Def's)SOLICITORS: RL Kremnizer & Co Solicitors (Pl)
Foleys Solicitors (Def's)
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ASSOCIATE JUSTICE MALPASS
12 OCTOBER 2007
JUDGMENT10785/07 Lawteal Seconds Pty Limited v Warrimoo Property Pty Limited & Ors
1 HIS HONOUR: These proceedings were commenced by Statement of Claim on 12 February 2007. On 7 August 2007, a special fixture was allocated for the hearing of certain matters. The hearing date was fixed for 8 October 2007. One of the matters was an application by the plaintiff for summary judgment in the proceedings (the application had also been before the Court on 17 September 2007 and there was then no mention by the defendant of the need to rely on further material). The hearing date was about the third occasion on which the application had been referred or fixed for hearing (there had been two abortive referrals to Harrison As J).
2 The relationship of mortgagee and mortgagor exists between the plaintiff and the party which has now become the first defendant. For purposes of convenience, I shall refer to it as the defendant. The plaintiff is a second mortgagee. It holds security over property owned by the defendant in respect of an advance in the sum of $400,000. There has been default under the mortgage. The plaintiff has brought the proceedings for, inter alia, possession of the property.
3 When the matter was called at 10.00am on 8 October 2007, Mr Rogers of Counsel appeared for the plaintiff. There was no appearance at that time on behalf of the defendant. A solicitor (Mr Foley) made an appearance at about 10.15am (as seems to be his custom), after the hearing had commenced. He arrived with an Amended Defence, an Amended Notice of Motion and additional affidavit evidence (despite directions having been given on 16 July 2007 to file material by 30 July 2007). The Court could be excused for concluding that this was yet another manoeuvre to force a further adjournment.
4 A short adjournment was granted to enable settlement negotiations to take place. The short adjournment was not productive and the hearing continued thereafter. A decision was made to deal with the Notice of Motion for summary judgment of the possession claim only.
5 The evidence relied on by the plaintiff was of a formal nature. It demonstrated default and a prima facie entitlement to relief. One of the deponents was the subject of lengthy cross-examination (which largely concerned the content of documentation which was either in or came to be in evidence).
6 The defendant relied on a number of affidavits. There was no cross-examination. This material was directed, inter alia, to showing that the defendants had a defence by way of estoppel.
7 The alleged estoppel is the subject of allegations made in an Amended Defence. This Amended Defence was filed in Court on the day of hearing, following a reluctant concession from the plaintiff (who was desperate to proceed on the hearing day because of its concern of insufficient equity to recover even the unpaid principal).
8 The alleged estoppel is said to rise in circumstances where the defendant was seeking a refinancing so that a payment out of the plaintiff’s mortgage could take place.
9 The relevant documentation is an indicative loan offer. It was made by Trendsetter Mortgages Pty Ltd (Trendsetter). It was accepted by the defendant. It contained, inter alia, the following provisions:-
- “ 18. Refinance of existing loan
- Where this loan is a renewal of an existing mortgage with a client of RL Kremnizer & Co, that is in default, enforcement will be suspended for 14 days following the date of the valuation. It will be your responsibility to ensure that the new loan is settled within that period.
- 19. Internal Refinance
- This clause applies where this application is a refinance (or proposed refinance) of a current mortgage held by a client of RL Kremnizer & Co. In the event that this application does not proceed, Trendsetter Mortgages Pty Ltd and RL Kremnizer & Co are authorised to deduct all amounts payable from the current mortgage.
- 27. Deposit
- Upon the signing of this letter of offer the Borrower shall pay a non-refundable deposit on the Valuation fee, Establishment fee and legal expenses of $9,240.00. Should any matters provided for in this latter not prove satisfactory to either the Lender or the Solicitor for the Lender this amount will be forfeited.”
10 For the purposes of clause 18, a valuation was obtained. It was dated 29 June 2007. Trendsetter did not proceed with the loan. The plaintiff filed the Notice of Motion for Summary Judgment on 4 July 2007 (it was returnable on 17 July 2007).
11 The Amended Defence is a lengthy document. It joins eight other defendants. These parties are described in paragraph 13(a)(iii) of the Amended Defence. One of them is the solicitor for the plaintiff (Mr Kremnizer). Another of them is Trendsetter.
12 On 7 August 2007, an application was made to join these additional parties. It was heard by Registrar Bradford and rejected.
13 A review has been sought of that decision. Whilst it has not been undertaken, certain observations concerning it may be appropriate. The joinder is founded on misconception and is devoid of utility. The purpose of the joinder remains unclear. There is no cross-claim. The defendant does not seek any relief against the additional parties. The plaintiff regards them as an irrelevance and also does not propose to seek any relief against them. In these circumstances, the discretionary power conferred by Part 6 Rule 6.24 of the Uniform Civil Procedure Rules 2005 (NSW) would not be exercisable because the threshold requirements of that provision could not be made out.
14 By reason of the filing of the Amended Defence, the review may now be otiose. However, a problem may have been created concerning the costs of the additional defendants.
15 I mention these matters because part of the estoppel presentation involves each of these eight parties. During oral submissions it was said that each was a close associate of the plaintiff.
16 The nature of the estoppel alleged by the defendant also seemed to be somewhat unclear (the Amended Defence is not bereft of pleading problems). It is pleaded in the Amended Defence in the following terms:-
- “13. Further and in the alternative and in answer to whole of the Plaintiff’s Statement of Claim, the First Defendant says that the plaintiff is estopped from proceeding to claim any entitlement to possession of the property or from seeking to recover possession of the said property under the said Mortgage as against the First to Ninth Defendants or any of them for all the reasons detailed below:-”
17 During submissions there were different presentations and the prospect of further amendment seemed to be in contemplation. The confusion involving the additional defendants is made obvious by paragraph 13.
18 The Amended Defence also pleads that the defendant has now been successful in finding alternative finance, but that it involves the payment of a very large brokerage fee.
19 The fundamental and insurmountable hurdle for the defendant is that the indicative loan offer does not give rise to a relationship between the plaintiff and the defendant. Accordingly, the plaintiff cannot be in breach of its provisions.
20 I should add that the Amended Defence does not allege that any of the eight additional defendants have acted as agent of the plaintiff.
21 Also, it seems likely that the defendant would not succeed in demonstrating that the loan offer was a “renewal of an existing mortgage with a client of RL Kremnizer & Co”. However, because this is a summary judgment application the Court is asked to put that consideration aside.
22 Further, it should also be observed that how such a wide ranging estoppel could arise was never explained. Why an allegation is made in paragraph 13 of estoppel “as against the First to Ninth Defendants” remains a mystery. Apart from the absence of any claim against the additional defendants, an estoppel in the terms pleaded would seem to be contrary to the oral presentation of the case.
23 Clause 8 merely provides for a suspension of enforcement for fourteen days following the date of the valuation. The clause also imposes a responsibility on the borrower to ensure that the new loan is settled within the fourteen day period.
24 The fourteen day period has long passed. The Notice of Motion was not returnable during that period and it did not come on for hearing until well outside it. The defendant has now obtained finance.
25 In the circumstances, even if the plaintiff had been a party bound by the clause and it gave rise to an estoppel, the basis for any continuing estoppel has disappeared.
26 The Amended Defence does make reference to other matters (such as discretionary estoppel and inequitable matters). It foreshadows a cross-claim. These matters were not argued and there is nothing to suggest that there is any substance to them.
27 There is another matter that perhaps should be mentioned. Whilst it was not ventilated by the defendant, it was referred to by the plaintiff. This was the matter of the other persons occupation of the property. Their entitlement to occupy arose by instrument subsequent to the mortgage and its registration. Accordingly, the registered mortgage takes priority.
28 A party seeking summary relief bears the onus. Hitherto, it has been said that the onus can only be discharged by the demonstration of a clear case to the relief sought. Whether or not there has come to pass a softening in that approach, I am satisfied that the plaintiff has demonstrated a clear case for summary judgment on its possession claim.
29 The plaintiff is to have judgment for possession of the land described in paragraph 1 of the Statement of Claim. Warrimoo Pty Ltd is to pay the costs of the proceedings. The exhibits may be returned.
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