Liberty Funding Pty Ltd v estate of Joseph Schipper, dec'd

[2002] VSC 586

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 7737 of 2002

LIBERTY FUNDING PTY LTD (ACN 081 982 872)	Plaintiff
v
THE ESTATE OF JOSEPH SCHIPPER DECEASED	Defendant

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JUDGE:	BEACH J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	12 DECEMBER 2002
DATE OF JUDGMENT:	13 DECEMBER 2002
CASE MAY BE CITED AS:	LIBERTY FUNDING PTY LTD v THE ESTATE OF JOSEPH SCHIPPER DECEASED
MEDIUM NEUTRAL CITATION:	[2002] VSC 586

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P. Cawthorn	Jerrard & Stuk
For the Defendant	Mr M. Worsnop	Kahns

HIS HONOUR:

1. Joseph Schipper was born on 27 December 1908.  He recently died.  The executor of his estate is his son, Leif Schipper.  On 29 April 2002 Leif Schipper was declared bankrupt and Dennis Anthony Turner was appointed his trustee.

1. On 2 November 2001 the deceased had applied for a loan from the plaintiff Liberty Funding Pty Ltd.  At that time the deceased was aged almost 92.  On 17 November 2001 a loan of $200,000 was made to the deceased by the plaintiff, although it would appear the money was not actually handed to the deceased, but was handed to two other persons named A. and M.J. Erinborn.  The loan to the deceased was secured by a mortgage to the plaintiff over the deceased's home at 12 Hartley Avenue, Caulfield (the property).

1. On 14 October 2002 the plaintiff filed a writ in the Court whereby it alleges that the deceased's estate failed to pay an instalment of $1,334, which was due on 14 July 2002, and by which it seeks possession of the property and payment of the sum of $226,137.64.  The property has now been sold and settlement is due on Monday next, 16 December.

1. Leif Schipper's trustee in bankruptcy argues that he has reason to believe that the sum of $200,000 was in fact borrowed by Leif Schipper in circumstances whereby the plaintiff acted unconscionably in making the loan and taking its mortgage over the property.  Leif Schipper's trustee now seeks orders that he be granted leave to intervene as a party in the proceeding and that the proceeding taken by the plaintiff be stayed pending the examination of offices of the plaintiff pursuant to s.81 of the Commonwealth Bankruptcy Act 1966, and that the plaintiff be compelled to provide to the trustee a discharge of mortgage with dealing numberX923959B on or before 16 December 2002.

1. In support of that latter application, the trustee is prepared to give an undertaking to the Court not to withdraw the proceeds of the sale of the property from his proposed joint trust account in the names of himself and Faye Kohn, who is the co-beneficiary of the deceased's estate, without the written consent of the plaintiff.  

1. The plaintiff does not oppose the trustee's application to be joined as a co-defendant to the proceeding.  However, it opposes the making of the other orders on the following grounds:

(a)That the trustee is merely fishing for a defence to the proceeding instituted by the plaintiff when in fact there is no defence to it.

(b)That the trustee knew of the sale of the property certainly by 30 October 2002, but did not file his summons until 27 November 2002.  His delay in doing so should now prevent him adopting the course he proposes.

(c)The plaintiff is a company of substance.  Counsel has given an undertaking to the Court on the company's behalf that it will retain sufficient liquid funds so that the sum of $200,000, interest and costs could be paid to the trustee if the trustee should ultimately succeed in any counterclaim he may bring against the plaintiff.

1. In my opinion, it would be quite wrong for me to conclude, upon the hearing of an interlocutory application, that the plaintiff should give up its registered security in respect of a loan it undoubtedly made.  I consider that the undertaking given to the Court on behalf of the plaintiff is sufficient to protect the trustee and, accordingly, I refuse that aspect of the application.

1. I order that Dennis Anthony Turner be joined as a co-defendant to the proceeding.

1. I order that otherwise, the trustee's summons filed 27 November 2002 be dismissed.

1. I order that the trustee pay the plaintiff's costs of the application.

1. I do not propose to grant any stay in respect of the proceeding.

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