Miguel v Bank of Queensland Ltd

[2012] QSC 216

[2012] QSC 216

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

ATKINSON J

No 6238 of 2012

JOSELITO MIGUEL

First Applicant

and

JOCELYN MIGUEL

and

Second Applicant

BANK OF QUEENSLAND LIMITED
(ABN 32 009 656 740)

Respondent

BRISBANE

..DATE 26/07/2012

..DAY 1

ORDER

HER HONOUR:  The first and second applicants, Mr and Mrs Miguel, sought an order from the Court by originating application:

“1.That the respondent [Bank of Queensland Limited] immediately provide written consent to the applicants FOR the sale of their property situated at 34 Darra Station Road, Darra, in the State of Queensland (“Darra property”), and to accordingly release the Darra Property mortgage subject only to conditions that:

(a)the balance owing on the mortgage be fully discharged by the applicants at settlement, and

(b)any outstanding loan arrears on the Darra Property mortgage be fully discharged by the applicants at settlement.

1. That the respondent pay for any costs and expenses incurred by the applicants as a result of having to delay the settlement of the Darra property.

1. That the respondent pay for the applicants’ costs of, and incidental to, the application.”

The application was supported by an affidavit of Jocelyn Miguel, the second applicant, which sets out in some detail her dealings with the respondent and her understanding of what the legal relations between them would be, a complaint which she and her husband have made to the Financial Ombudsman Service, and the difficulties that the solicitor acting in the conveyance of the Darra property had in ascertaining the amount owing to the bank secured by the mortgage over the Darra property.

There is a dispute between the parties as to whether or not the original mortgages given by the applicants over the Darra property and some other properties should have been cross-collateralised, with more than one property being provided as security for the others.  That is not a dispute which I can determine on the material before me.

However, what does not seem to be capable of dispute is that, whatever the position was at the commencement of the term, the Darra property was offered and given as security for two further loans: the first over a property which was purchased at Ash Avenue, Springfield Lakes; and the second over a business loan.  The applicants' signatures appear on those documents, and indeed, on the second mortgage which was given in March 2007 over the Darra property.

Accordingly, it is therefore apparent that the Darra property secures not just the moneys loaned in respect of the purchase of the Darra property, but also moneys loaned with respect to the purchase of the property in Ash Avenue and the business loan, both of which have moneys outstanding, both in arrears and, of course, principal owing.

In those circumstances it would appear that the bank would be entitled to payment of at least the moneys outstanding on the business loan, and on the Ash Avenue loan, as well as the moneys outstanding on the loan in respect of the Darra property on the sale of the Darra property.  That apparently would be more than the proceeds of the sale of the Darra property.

The bank, however, has made an offer, which after taking instructions it has not withdrawn and which has been reduced to writing, that:

“The money arising from the settlement of the contract of sale dated 7 June 2012 in respect of lots 180 and 181 on RP 29734, county of Stanley, parish of Oxley and located at 34 Darra Station Road, Darra in the State of Queensland, shall be applied as follows:

a.firstly, in payment of all reasonable costs, charges and expenses properly incurred by the vendors as an incident of the sale;

b.secondly, in discharge of loan account no. 20213152 with Bank of Queensland Limited;

c.thirdly, in payment of all arrears accrued on any loan account held by the Applicants or Miguel Pty Ltd with the Respondent; and

d.fourthly, the balance to be paid into Minter Ellison’s trust account to be invested on term deposit, and to be held until further order of the Court.”

That offer is a generous one, but seems to be to be appropriate given that the matter is still before the Financial Ombudsman Service, and so the legislation provides for a moratorium on various actions by the bank in respect of amounts that are in dispute. 

In the circumstances I propose to make that order, and I will also order that:

1. The matter proceed in accordance with the Uniform Civil Procedure Rules 1999 (Qld) as if it had been commenced by Claim.

1. The respondent list the matter for further directions once the Financial Ombudsman finalises the dispute before it by making either a Recommendation which is accepted by the parties within 30 days, or a Determination, if that Recommendation or Determination does not resolve all the issues in dispute in the proceedings before the court.

1. Costs be reserved.

...

-----