McCourt v National Australia Bank Ltd - [2010] WASCA 154

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: McCOURT -v- NATIONAL AUSTRALIA BANK LTD [2010] WASCA 154

CORAM: PULLIN JA

HEARD: 23 JUNE 2010

DELIVERED : 23 JUNE 2010

FILE NO/S: CACV 61 of 2010

BETWEEN: DANIEL PATRICK REDDEN McCOURT
Appellant
AND
NATIONAL AUSTRALIA BANK LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MURPHY J
Citation  :McCOURT -v- NATIONAL AUSTRALIA BANK LTD [No 2] [2010] WASC 151
File No  :CIV 1738 of 2010

Catchwords:

Appeal - Application for a stay or suspension of orders pending appeal - Mortgagor seeking to stay order that caveat be removed - Application of the Inglis general rule - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category: B

Representation:

Counsel:

Appellant: Mr E J Forrester
Respondent: Mr C S Gough

Solicitors:

Appellant: Ranger Legal
Respondent: No appearance

Case(s) referred to in judgment(s):

Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311
Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
McCourt v National Australia Bank [2010] WASC 121
McCourt v National Australia Bank [No 2] [2010] WASC 151
The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd [2007] WASCA 257; (2007) 35 WAR 412

PULLIN JA: This is an application for a stay of orders to remove caveats made by Murphy J on 22 June 2010. The background is that the appellant is the owner of land on Leon Road, Dalkeith. The appellant is indebted to the bank in a sum, which the bank says exceeds $5.4 million, and is secured under mortgage to the bank.
The bank alleges that there was a default, that it has exercised its power of sale, sold the property and wishes to settle with third parties. The appellant lodged caveats over the land which prevented settlement taking place. The appellant claims that the bank should be estopped from completing the sale for reasons which are set out Murphy J's reasons for decision in this matter and in another matter and alleges that the sale was in bad faith. See McCourt v National Australia Bank [2010] WASC 121 and McCourt v National Australia Bank [No 2] [2010] WASC 151.
The bank applied under s 138B of the Transfer of Land Act 1893 (WA) for the registrar to issue a notice or serve a notice on the caveator. Notice was given under s 138B(1) of the Transfer of Land Act. The appellant applied to extend the caveats under s 138B. The respondent in those proceedings commenced by the appellant filing a chamber summons seeking an order for removal under s 138 of the Transfer of Land Act. Murphy J dismissed the appellant's application to extend the caveats and upheld the respondent's application for an order for removal, see his Honour's reasons in McCourt v National Australia Bank.
The court was informed that the caveats lapsed and the appellant appealed in CACV 56 of 2010 against Murphy J's decision. The appellant sought a stay of Murphy J's orders but I dismissed the application for a stay in that appeal because it was futile, the caveats having lapsed and the application for stay having been made after that had occurred. The appellant then lodged fresh caveats, apparently contrary - on an initial reading - to s 138D of the Transfer of Land Act. Pursuant to s 138 the bank then applied by chamber summons in CIV 1738 of 2010 for orders for removal and an order for removal was made by Murphy J: see McCourt v National Australia Bank [No 2].
The appellant has appealed against that order and seeks a stay and it is that stay application which is now before the court in this appeal. The principles which govern a stay application or application for a suspension order are well known: see Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308.
The appellant argues that the proceedings in CIV 1738 of 2010, that is the appellant's own proceedings, were a nullity because of a construction that it places on certain words in s 138B of the Transfer of Land Act. The argument is set out in the reasons of Murphy J in McCourt v National Australia Bank [No 2]. In short, the appellant says that the bank, on the construction that is put forward by the appellant, did not have the right to ask the registrar to serve notice under s 138B(1).
I need not repeat the argument because it is set out in Murphy J's reasons. I will assume for the purposes of argument today that the argument has some merit. However, the point of construction does not assist the appellant when it comes to the court ordering removal under s 138 of the Transfer of Land Act. The only argument that the appellant then has, is that when s 138 says that the bank may summons the caveator to show cause why the caveats should not be removed, the summons should be an originating summons and not a chamber summons in other proceedings and not in proceedings which the appellant contends are a nullity. I reject that argument. If there is an irregularity by bringing proceedings by way of chamber summons rather than originating summons as to which I express no opinion at all, then such irregularity is so because the proceedings have been instituted contrary to the rules. However, irregularities which are caused by noncompliance with the rules will not create a fatal irregularity in proceedings: see O 2 Rules of the Supreme Court 1971 (WA) and The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd [2007] WASCA 257; (2007) 35 WAR 412.
The appellant's counsel conceded that the bank could have obtained the order for removal of the second caveats, the caveats under consideration here, by bringing the appellant to court on originating summons. This is not a convincing basis for the appellant moving the court to exercise its discretion to grant a stay and for that reason I would dismiss the application.
Furthermore, the purchaser of the land, that is the purchaser from the bank, has not been given notice of this application for a stay. A stay order would adversely affect the purchaser's interests. Murphy J indicated in his reasons that the purchasers should have been notified and the appellant informed me today that this had not happened. That is another reason for refusing to exercise the discretion to grant a stay or make a suspension order.
Finally, if I am wrong in those conclusions and it was appropriate to grant a stay it would have been only on condition that the appellant pay the amount of the debt that the bank says is due into court within 48 hours. I gave the appellant's counsel the opportunity to take instructions about whether that was possible and I was informed that while the appellant might be able to provide other security, no representation was made to me by counsel for the appellant that the appellant would have been able to pay that money into court.
It would be futile to make an order for a stay if in fact it was not possible for the appellant to pay the money into court. An appellant seeking a stay in these circumstances should be ordered to pay the full amount of the debt into court. In Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311, Owen J (Ipp & Murray JJ agreeing) said at [5]:
[T]he application for a stay had all the hallmarks of an injunction to prevent a secured creditor from exercising its remedies under the security instrument and in particular under a judgment obtained in relation to the debt the subject of the security. In that respect in Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 the High Court per Barwick CJ, said:
The case falls fairly, in my opinion, within the general rule applicable when it is sought to restrain the exercise by a mortgagee of his rights under the mortgage instrument. Failing payment into court of the amount sworn by the mortgagee as due and owing under the mortgage, no restraint should be placed by order upon the exercise of the respondent mortgagee's rights under the mortgage (169).
The application for a stay is dismissed.