Lilleyman v Russell

[2012] VCC 264

Revised from a tape recording of the proceeding
IN THE COUNTY COURT OF VICTORIA	Not Restricted

AT MELBOURNE

CIVIL DIVISION

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-11-02326

GARY RANDELL LILLEYMAN	Plaintiff
v
RAMON MARCEL RUSSELL AND OTHERS	Defendants

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JUDGE:	HER HONOUR JUDGE KENNEDY
WHERE HELD:	Melbourne
DATE OF HEARING:	8 March 2012
DATE OF JUDGMENT:	8 March 2012
CASE MAY BE CITED AS:	Lilleyman v Russell
MEDIUM NEUTRAL CITATION:	[2012] VCC 264

REASONS FOR JUDGMENT

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Catchwords: Practice and Procedure: Application for sheriff to offer property for sale without a reserve price – Mortgagee sale already proposed for 24 March 2012 – Application refused

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. McGhie (leave to appear)
For the Defendants	Mr M. R. Russell (leave to appear)
On behalf of registered mortgagee	Mr E. Makowski	Hall & Wilcox

HER HONOUR:

Background

1       By Summons filed 24 February 2012, the plaintiff seeks the Court’s permission for the Sheriff to be permitted to offer a property at 6 Bowes Street, Frankston South Victoria 3199 (the property) for sale without a reserve price.

2       The plaintiff did not appear in support of his application.

3       However, I gave leave to Mr McGhie to appear on his behalf.  There were some difficulties with this course[1], particularly given that Mr McGhie was only able to provide limited assistance to the court given his problems with hearing. He was, however, permitted to address the Court, and also sought further instructions from Mr Lilleyman as the matter transpired.

[1]Such difficulties being highlighted in the decision in Apostolou v Commissioner of State Revenue [2008] VSC 128

4       Mr Makowski of Counsel appeared for the registered mortgagee, being an entity called RHG Mortgage Corporation Limited (RHG).  He opposed the making of the orders sought.

5       Mr Russell, one of the defendants,  also briefly appeared, for both himself and his wife (the latter being the registered proprietor of the property), but was subsequently excused after conveying his position that he supported Mr Makowski’s opposition.

6       There was little material provided in support of this application.

7       It appears that the plaintiff has obtained a default judgment against the defendants in an amount of $250,000 from the District Court of Western Australia on 17 May 2011.  That judgment has subsequently been registered in this court with a warrant of seizure and sale issued and dated 7 June 2011.

8       The plaintiff’s affidavit of 14 February 2012 simply annexes  a notice from the senior Sheriff’s officer dated 14 February 2012, which states that a public auction was conducted on 9 February 2012 and that “the interest in the property” at 6 Bowes Street, Frankston South, was passed in due to lack of bids.  It appears that “the interest” is a reference to any remaining value in the property after taking account of the interest of the registered mortgagee, RHG.

9        Mr Makowski endeavoured to assist the Court in relation to the background of the matter, given the absence of a legally represented plaintiff.  He also relied on an affidavit of Belinda Jan Abramovic of 7 March 2012.

10      That affidavit establishes that RHG, the registered mortgagee, had entered a default judgment in the Supreme Court for the recovery of the property.  On 24 May 2011, it had also issued a warrant of possession, and had subsequently taken possession of the property in September 2011.   

11      Importantly, RHG has engaged estate agents and scheduled a public auction for the sale of the property on 24 March 2012. 

Disposition of application

12      The application has presented many difficulties before me, not the least of which is the lack of legal representation on the plaintiff’s part. 

13      Mr Makowski provided the Court with decisions of Wu v Ma & Anor [2011] VSC 208 and Kousal v Suncorp-Metway Ltd [2011] VSC 312, both decisions of Associate Justice Mukhtar.

14      The decisions raise an issue as to whether the Court has power to make an order of the kind sought, although His Honour refers to Orders 66.15 and/or 69.04(4) as well as the inherent jurisdiction of the Court.

15      However, without finally deciding the matter, I am not satisfied on the material before me today that it is appropriate to make the order sought, even presuming there would be power to do so.

16      Firstly, I accept Mr Makowski’s submission that on the evidence before me, there is unlikely to be any equity in the property to sell.  Thus, the valuation report annexed to Ms Abramovic’s affidavit returned a market range of between $600,000 to $650,000 (BJA6).  This is to be compared with the amount owed to RHG of  some $615,000 which does not include further costs (see paras 25 and 26).

17      In such circumstances there appears to be no utility in the making of an order for another sale of “the equity”.  

18      It was also suggested by RHG that the making of such an order could create difficulties for the proposed auction on 24 March 2012.  Although one cannot necessarily be sure that that is the case, it certainly raises a concern.  The potential creation of a caveatable interest by any purchaser would also present some obstacle.

19      Finally, I also note the concerns expressed by Associate Justice Muktar that there are difficult questions as to the duty of a Sheriff in undertaking the sale proposed (see Wu at [14]). Those matters fortify me in my conclusion that the order sought should not be granted.

20      Mr McGhie  suggested that the bank had undervalued the property and raised concern as to the plaintiff’s entitlement to any residual equity after the proposed auction.

21      However, as best as I can determine, the plaintiff would be entitled to any residual proceeds after the auction without an order for a separate sale of the [as yet unspecified] “equity” as proposed. 

22      In any event, although I will dismiss the summons before me today, I will reserve the rights of the plaintiff to make a further application after 24 March 2012 on fresh material, in the event that any issue remains after the public auction.

23      Accordingly, the order of the Court will be that the plaintiff’s summons dated 17 February 2012 is dismissed, save that I reserve liberty to the plaintiff to make a further application for the order sought on fresh material after the date of the public auction, being after 24 March 2012.