Loftus v Australia and New Zealand Banking Group Limited

[2016] VSCA 114

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0038

MICHAEL DAVID LOFTUS

v

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

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JUDGES:	Whelan and Kaye JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	18 May 2016
DATE OF JUDGMENT:	19 May 2016
MEDIUM NEUTRAL CITATION:	[2016] VSCA 114
JUDGMENT APPEALED FROM:	Australia and New Zealand Banking Group Ltd v Loftus [2016] VSC 58 (Cameron J)

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PRACTICE AND PROCEDURE – Appeal – Application for stay of judgment for possession – Whether exceptional circumstances established

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APPEARANCES:	Counsel	Solicitors
The Applicant appeared in person.
For the Respondent	Mr R Moore	HWL Ebsworth

WHELAN JA
KAYE JA:

1. The applicant seeks a stay of execution of the judgment entered against him by Cameron J of this Court[1] pending the hearing and determination of an application for leave to appeal against the judgment.  By that judgment, it was ordered that the respondent have possession of a property in South Morang being the property contained in Certificate of Title Volume 11029 Folio 533 (‘the property’), of which the applicant is the registered proprietor.  The application for leave to appeal, and the application for a stay, are each directed to findings of fact made by the judge.  Accordingly, it is necessary to summarise, briefly, the background facts of the case. 

   [1]Australia and New Zealand Banking Group Limited v Loftus [2016] VSC 58.

1. By a letter of offer dated 6 May 2008 the respondent agreed to loan to the applicant the sum of $90,000. As security for that loan the respondent lodged a mortgage over the property at the Land Titles Office, which was subsequently registered. On 7 October 2008 the respondent issued a new letter of offer for a revised loan of $96,267. The applicant later defaulted in his repayment of the principal and interest due. Accordingly, the respondent served a notice of default under s 76 of the Transfer of Land Act 1958 (Vic). The applicant failed to remedy the default, and consequently the respondent commenced proceedings claiming an order for possession of the property. An Associate Justice gave judgment in favour of the respondent against the applicant in the sum of $132,309.51. There has never been any dispute about the existence of that debt.

1. The principal issues before the judge were, first, whether the applicant’s signature on the mortgage was forged, and, secondly, whether the mortgage secured the judgment debt.  The judge found in favour of the respondent.

1. In respect to the first issue, the judge referred to the evidence of a number of witnesses.  In particular, her Honour referred to the evidence of the applicant and his business partner, Mr Moses Sakr, to the effect that the applicant did not sign the mortgage.  Mr Carlo De Cesaris, a small business specialist employed by the respondent, signed the mortgage as a witness.  Although he could not specifically recall signing the document, he stated that it was his invariable practice to witness a document only when it was signed in his presence.  Mr Neil Holland, a handwriting expert, gave evidence in support of the respondent, that in his opinion the mortgage contained the true signature of the applicant.  Mr Yunous Shair, a manager in the respondent’s Commercial Collection Services Department, produced, from the respondent’s customer file relating to the applicant, a letter from the applicant’s sister acknowledging that the security for the loan provided to the applicant was his home.  It was accepted that the applicant had entrusted his sister with authority to communicate with the respondent in relation to his affairs.  Finally, Mr Desmond Ryan, the applicant’s trustee in an insolvency administration (the details of which are unclear on the material before us), gave evidence that the applicant had acknowledged that the property was encumbered by the mortgage in favour of the respondent. 

1. Having considered the evidence of the witnesses to whom I have referred, the judge accepted and relied on the evidence of Mr Holland, Mr De Cesaris, and Mr Ryan.  Her Honour found that Mr Holland was a careful and considered witness and she found his evidence convincing.  Her Honour also found Mr De Cesaris to be a convincing and credible witness, and that there was no reason to doubt his evidence that he would not have deviated from his normal practice.  The judge also observed that the evidence of Mr Ryan cast doubt over the applicant’s version of events.  On the other hand, her Honour found that the applicant’s account could not withstand scrutiny.  Her Honour concluded that the applicant:

… has failed to persuade me that his signature on the 2008 mortgage was not his or that it was procured by fraud.

1. The judge further held that the mortgage signed by the applicant secured the judgment debt.  The mortgage incorporated the memorandum of common provisions, which provided that the mortgage would secure all of the applicant’s obligations, both present and future. 

Legal principles

1. The application for a stay of execution of the judgment of Cameron J is made under Rule 64.39 and Rule 66.16 of the Supreme Court (General Civil Procedure) Rules 2015.  The principles relating to such an application are well established and not in dispute.  Prima facie, a successful party is entitled to the benefit of the judgment obtained below.  Accordingly, an applicant for a stay is required to demonstrate special or exceptional circumstances to remove the case from the general rule that an appeal, and an application for leave to appeal, do not operate, of themselves, as a stay.  In particular, special circumstances may be found to exist where the applicant is able to demonstrate that there is a real risk that it will not be possible to restore the applicant substantially to his or her former position if the judgment against the applicant is executed before the conclusion of the appeal.[2]

   [2]Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653, 655 (Young CJ); Maher v Commonwealth Bank of Australia [2008] VSCA 122 [19]–[27] (Dodds-Streeton JA); Cross Country Realty Victoria Pty Ltd v Ubertas 350 William Street Pty Ltd [2015] VSCA 347 [79]–[90] (Kyrou and McLeish JJA); Scarborough v Lew’s Junction Stores Pty Ltd [1963] VR 129, 130 (Adam J).

1. In order to justify the grant of a stay, an applicant should also demonstrate that there is at least an arguable ground of appeal.  However, ordinarily, the court does not have before it sufficient materials to consider, in detail, the merits of the grounds of appeal relied on in the application for leave to appeal.  In such a case, unless there is no arguable ground of appeal, or the appeal is not bona fide, the court ordinarily will focus on matters relevant to the enforcement of the judgment, rather than matters that are relevant to its validity or correctness.[3]

   [3]Cross Country Realty Victoria Pty Ltd v Ubertas 350 William Street Pty Ltd [2015] VSCA 347 [90]; Neate & Anor v Thoroughbred International Marketing Pty Ltd (2012) 34 VR 318, 321 [8] (Mandie JA and Cavanough AJA); Bresam Investments Pty Ltd v Shmee Pty Ltd [2008] VSCA 251 (Dodds-Streeton JA).

Grounds of the stay application

1. The applicant has not provided separate written submissions in support of his application for a stay.  In his Form 64B application for a stay, the applicant, in effect, makes the following submissions:

·The transcript relied on by Justice Cameron contained errors and omissions.

·Her Honour denied the applicant the right of cross-examination.

·The respondent failed to comply with two notices to produce and a notice of default in making discovery of documents, and the respondent also failed to serve proper documentation.

·The judge erred in her examination of a 1990 mortgage document tendered by the respondent by accepting that it bore a signature which (according to the applicant) did not appear on the document, and that Mr Holland ‘misrepresented’ that document as bearing that signature.

·The respondent tendered conflicting evidence that contradicted its position.

·The respondent failed to provide original documentation during the discovery processes.

1. The applicant has also filed an affidavit in support of the application which contained a number of contentions as to the basis on which the stay should be granted.  In particular, the applicant has deposed that the matter is in the public interest; the respondent failed to produce all original documents requested; the respondent made false documents; and the judge failed to permit the applicant to present his case in its entirety.

1. In oral submissions, the applicant primarily made two points in support of his application.  First, he stated that some years ago he had sold the property, that he no longer owns it, and that he does not live in it.  Thus, he appeared to submit, the mortgage relied on by the respondent did not attach to the property.  Secondly, the applicant submitted that the mortgage tendered to the court and lodged at the Titles Office was not the original mortgage.  The applicant appeared to submit that fact either affected the validity of the registration of the mortgage over the property, or alternatively that it affected the cogency of the evidence given by Mr Holland as to the signature of the applicant on the document. 

1. In its written submissions in response, the respondent submitted that the materials filed by the applicant in support of the application do not disclose any matter that could be properly considered to be a special or exceptional circumstance justifying the grant of a stay of execution in favour of the applicant.  In particular, it submitted that the matters contained in the applicant’s affidavit, and in his Form 64B, are tendentious in nature, and focus solely on the factual findings made by the judge. 

1. In response to the applicant’s oral submissions, counsel for the respondent pointed out that the identity of the property mortgage was not an issue before the trial judge.  Further, he pointed to the evidence of Mr Dallas and Mr Collopy that the document produced to the court was the original mortgage.  Counsel also referred to the evidence of Mr Holland that the document that he had inspected was the original version of the mortgage. 

Further materials

1. On the day preceding the hearing of this application, the applicant sought to file with the court a further affidavit, that purported to exhibit a number of other documents in support of his application.  At the hearing of oral submissions, we reserved the question as to whether the applicant should have leave to rely on that material.  Having heard the applicant’s oral submissions, and considered the material, we do not grant such leave to the applicant.  The material that is sought to be relied on by the applicant is irrelevant, and indeed most of it is incomprehensible in any event.  It does not, in any material respect, add to the points raised by the applicant in support of his application for a stay. 

Analysis

1. Each of the matters, referred to by the applicant in the materials filed in support of his application and in his oral submissions, are directed to the proceedings before Cameron J, and the findings of fact made by the judge in her reasons for judgment.  The materials do not, otherwise, point to any circumstance that could be characterised as special or exceptional, for the purposes of supporting the application for a stay of execution of the judgment. 

1. It is unnecessary, and not possible, to deal, in detail, with each of the separate grounds raised by the applicant.  That will be a matter for the hearing of the application for leave to appeal against the judgment.  Nevertheless, in light of the matters raised by the applicant, we will, albeit briefly, consider the points relied on by the applicant.  We will first deal with the matters raised in the applicant’s written materials.  In doing so, we will generally adopt the same order as that used by the respondent in its reply submissions. 

1. Ground 1 of the application for leave to appeal , in effect, asserts that the applicant was denied the right to cross-examine witnesses, being the officers of Land Victoria, Mr J Collopy and Mr A Dallas.  A proper review of the transcript reveals that there is little substance in the ground. 

1. At the commencement of the trial, it was noted that the applicant had issued a subpoena to the Registrar of Titles.  Counsel for the respondent drew to the attention of the judge that Mr Collopy of Land Victoria had attended the court in response to that subpoena.  Mr Collopy advised the judge that he was a solicitor with Land Victoria Legal.  He explained that Mr Dallas is the manager of records at Laverton, where Land Victoria records are stored.  Mr Collopy explained that he had brought to Court a number of documents, some of which were original mortgages, and some of which were copies of the two original mortgages.  He said that the folio reports were print outs from the on-line title system, and in that sense the computer record was the original document.  The applicant then stated that he had requested for the original documents to be brought to court.  Counsel for the respondent suggested that Mr Collopy then give evidence.

1. In his evidence, Mr Collopy commenced to explain that two mortgage documents produced were original mortgages, that a third document was a set of extracts from the lodging book, and that a fourth document sought by the applicant fell within the same description.  As the matter was becoming complex, the judge intervened, and required Mr Collopy to provide an affidavit describing the documents that were produced pursuant to the subpoena.  The witness then withdrew.  At that stage, the applicant stated that he wanted to ask a question, namely, that he wished to know what documents were destroyed and why they were destroyed by the Titles Office.  The judge responded that that was not a relevant matter, as it did not relate to any of the issues in the trial. 

1. On the next day, Mr Dallas and Mr Collopy both attended court.  Mr Collopy had filed an affidavit.  Counsel for the respondent called Mr Dallas to give evidence.  In essence, Mr Dallas, on oath, produced documents in answer to a subpoena served by the respondent.  The applicant then cross-examined Mr Dallas.  Without traversing the cross-examination undertaken by the applicant, we note that the judge did, on some occasions, intervene, where her Honour apprehended that the witness was being asked inadmissible questions. 

1. In the circumstances that we have just described, in our view there is little substance to ground 1 of the proposed ground of appeal.  Certainly, the matters raised by that ground do not have sufficient cogency to qualify, in any way, as special or exceptional circumstances for the purposes of the application that is before the court. 

1. Ground 2 alleges that the respondent had acted ‘contrary to law’ in a number of respects.  In particular, it is alleged that the respondent failed to comply with various notices to produce, that evidence ‘provided was not tabled within the Court Book’ or copies provided to the applicant, that the respondent failed to produce original documents during the discovery process, that the respondent failed to provide a correct transcript to the applicant, and that the respondent provided and filed different versions of documents on the applicant.  Even if there is a factual basis to any of those grounds, they do not allege any error of law (or fact) in respect of the reasons for judgment by the judge, or in the conclusion reached by her Honour.

1. Ground 2(f) alleges that the evidence of Mr Holland ‘misrepresented key evidence’.  No details are provided of any such alleged misrepresentation.  Ground 2(d) alleges that the respondent ‘tabled conflicting evidence which is contrary to the respondent’s position’.  Again no details are given of that allegation.  In any event, neither of those two matters point to any serious error of law made by the trial judge. 

1. Ground 3 of the application alleges that the trial judge erred ‘in examination’ of a document, which was a mortgage dated 4 July 1990 (No P 915480S).  It would appear that that document was one of a number of documents used by Mr Holland to demonstrate the signature standards of the applicant, which could then be compared with the mortgage executed in favour of the respondent.  There is no material which suggests how the judge ‘erred’ in her ‘examination’ of the 1990 mortgage.  Even if some error were established, it would not, of itself, be of sufficient moment to constitute the requisite exceptional circumstances which must be established by the applicant in this application. 

1. The fourth ground alleges that the judge erred in allowing the respondent to amend its ‘further amended statement of claim’ by order dated 17 November 2015.  However, the applicant has not appealed, or sought leave to appeal, against that order.  The applicant has not pointed to any significant injustice occasioned to him as a result of the amendment of the respondent’s pleading. 

1. We turn then to the matters raised by the applicant in oral submissions before us.  The point made by the applicant concerning the identity of the property mortgaged is, with respect, without substance.  The applicant is the registered proprietor of the property.  It was that property that was the subject of the mortgage.  Equally, in our view, there is little substance in the matter raised by the applicant as to whether the original mortgage was lodged with the Titles Office.  As counsel for the respondent has pointed out, the evidence of Mr Dallas and Mr Collopy was to the effect that the mortgage produced to the court was the original mortgage.  Significantly, Mr Holland’s evidence was that he examined the original document.  Thus the matters raised by the applicant in his oral submissions take his application no further. 

1. The review that we have just undertaken of the applicant’s grounds of appeal is, of necessity, somewhat cursory.  The views that we have expressed are based on the materials currently before the court, for the purposes of determining the present application.  Taken together, the matters that we have discussed do not, at all, go any distance to establishing the requisite special or exceptional circumstances that would entitle the applicant to a stay of execution.  Indeed, and to the contrary, based on the material that has been put before the court, we are well satisfied that no such exceptional or special circumstances exist in this case.

1. Significantly, the applicant has not pointed to any unfair prejudice that he would sustain if the stay were not granted.  In particular, it is relevant that the applicant does not live in the residence that is located on the property, and, indeed, he appears to disclaim any ownership of the property. 

1. Accordingly, the applicant has failed to establish a basis upon which the discretion to order a stay should be exercised in his favour.  On the other hand, if a stay were granted, the respondent would be precluded from exercising its rights under the judgment until the hearing and determination of the application for leave to appeal.  As at February 2016, the debit balance of the loan, that was the subject of the proceeding, was $291,000.  Interest is accruing on that balance at the rate of 6.87 per cent per annum.  An ANZ residential kerbside valuation of the property as at 2 May 2016 estimates the current market value of the property at $250,000.  If a stay were granted, the respondent would sustain some detriment, consisting of the increasing difference between the value of the property and the size of the debt secured over it.

1. For those reasons, the application for a stay of execution pending the hearing and the determination of the application for leave to appeal should be dismissed.