Moula Funding Pty Ltd v Comley - [2021] NTSC 57

CITATION:Moula Funding Pty Ltd v Comley & Anor [2021] NTSC 57
PARTIES:MOULA FUNDING PTY LTD
v

COMLEY, Michael Kennith Williams

and
COMLEY, Hayley Maree

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT exercising Territory jurisdiction
FILE NO:2020-03610-SC
DELIVERED:  6 August 2021
HEARING DATE:  6 August 2021
JUDGMENT OF:  Grant CJ
REPRESENTATION:
Counsel:
Plaintiff:L Tattersall
First Defendant:  No Appearance
Second Defendant:  No Appearance
Solicitors:
Plaintiff:Minter Ellison
First Defendant:  No Appearance
Second Defendant:  No Appearance
Judgment category classification:    C
Judgment ID Number:  GRA2111
Number of pages:  6

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Moula Funding Pty Ltd v Comley & Anor [2021] NTSC 57
No. 2020-03610-SC
BETWEEN:

MOULA FUNDING PTY LTD

AND:

MICHAEL KENNITH WILLIAMS COMLEY

AND:
HAYLEY MAREE COMLEY

CORAM: GRANT CJ
REASONS FOR JUDGMENT
(Delivered ex tempore on 6 August 2021)

The plaintiff commenced this proceeding claiming: (a) $82,928.35 due and payable by the first defendant pursuant to a Loan Agreement dated 9 January 2020; (b) interest pursuant to the Loan Agreement; (c) a declaration that by the Loan Agreement the first defendant granted a charge and/or equitable mortgage to the plaintiff in respect of his interest in the Property situated at 32 Cummins Street, Rapid Creek in the Northern Territory of Australia; (d) a declaration that the charge and/or equitable mortgage charges the interest of the first defendant in the Property with payment of monies due and owing under the Loan Agreement; and (e) costs on an indemnity basis. The Statement of Claim also contains a prayer for orders pursuant to various provisions of the Law of Property Act 2000 (NT) which are no longer pursued.
On 7 May 2021, the Court entered judgment in default of appearance ordering the first defendant to pay the plaintiff: (a) $82,928.35 due and payable under the Loan Agreement; (b) interest in the amount of $10,674.38 for the period from 3 November 2020 to 5 February 2021; and (c) $1,852.00 in costs. The plaintiff now seeks the declarations in relation to the charge and/or equitable mortgage over the Property, and an order for costs on an indemnity basis.
Neither defendant has filed a Defence in response to the Statement of Claim, with the consequence that every allegation of fact in the Statement of Claim is taken to have been admitted. Even were that not so, the uncontested evidence establishes the following matters.
The first defendant is, or was, the owner of a business which traded under the name of “Top End Pools and Spas”. On 9 January 2020, the first defendant submitted an electronic application for a loan with the plaintiff. The application was approved. The Loan Agreement was electronically signed by the first defendant. An amount of $75,000 was advanced to the first defendant under the Loan Agreement. The interest rate under the Loan Agreement was 1.75% per fortnight, the fortnightly repayment amount was $2,208.50, and the term of the loan was two years.
Between 29 January 2020 and 19 May 2020, the first defendant made payments to the plaintiff totalling $19,901.50 in accordance with the terms of the Loan Agreement.
On or about 28 May 2020, the first defendant failed to repay a scheduled fortnightly repayment.
On 13 July 2020, the plaintiff issued a notice of default to the first defendant providing five business days from service of the notice to remedy the default. That notice was served by email sent to the first defendant’s email address. The default was not remedied in response to that notice.
On 24 July 2020, the plaintiff issued the first defendant a letter demanding payment of all amounts due under the Loan Agreement by 31 July 2020. That letter of demand was served by email sent to the first defendant’s email address. The first defendant has not made any further payments to the plaintiff since 19 May 2020.
Clause 25 of the General Terms of the Loan Agreement provides:
If an Event of Default occurs, each Guarantor and each Borrower acknowledges and agrees that it will be deemed on the date of that Event of Default to have charged in favour of us, all its legal and beneficial interest in all its present and after acquired real and personal property as security for the performance of its obligations under any Finance Document (including without limitation in relation to the Guarantor, its obligations under the guarantee and indemnity in clause 24), and consents to us at any time after such an Event of Default (whether or not that Event of Default is remedied):
(a) lodging at any time any financing statement on the PPSR; and
(b) lodging, registering and maintaining any caveat against dealing with any interest in land the Guarantor and/or Borrower may have from time to time.
An Event of Default is defined to mean any of the events specified in clauses 20.1, 20.2 and 20.3 of the General Terms. Those events include failing to make a payment of any of the amount owing when due.
The first defendant is the Borrower under the Loan Agreement. There is no Guarantor under the Loan Agreement.
On 6 August 2020, the plaintiff lodged a caveat over the first defendant’s interest in the Property claiming an interest as an equitable chargee. The plaintiff subsequently commenced the within proceedings as the “appropriate proceeding” for the purpose of s 142(6) of the Land Title Act 2000 (NT).
The first defendant owns the Property jointly with the second defendant. The first defendant and the second defendant are married, but the relationship has come to an end. The first defendant’s whereabouts are unknown. Both the first and second defendants were given notice of the hearing of the plaintiff’s claim, but neither appeared.
There is no doubt that cl 25 of the General Terms creates a charge over the first defendant’s interest in the Property and declarations are properly made in those terms. There is no equitable mortgage created under these arrangements, and nor would such an interest under the system of Torrens title afford any benefit to the plaintiff above and beyond the charge created.
So far as the claim for indemnity costs is concerned, cl 27.8 of the General Terms provides:
Legal expenses
Each party must pay its own legal costs and disbursements in connection with the negotiations, preparation, execution and carrying into effect of this Agreement. You must pay our costs and expenses in connection with enforcing the Finance Documents, or exercising, enforcing or protecting any of our rights, powers, discretions or remedies under the Finance Documents or applicable law, or preparing or attempting to do so.
Clause 27.11 of the General Terms provides:
Indemnity
You indemnify and will continue to indemnify us for any Loss we may suffer in relation to the Loan or the Finance Documents, except that you don’t have to pay, reimburse indemnify us to the extent our fraud, negligence or wilful misconduct (four of our officers, employees, contractors, agents or External Administrators we appoint) contributed to the relevant Loss being incurred.
The term “Loss” is defined in the General Terms to mean:
… a loss, claim, action, damage, liability, cost, charge, expense, penalty, compensation, fine or outgoing suffered, paid or incurred.
The plaintiff is entitled to an order for indemnity costs on that basis.
Accordingly, I make the following orders:
(a)A declaration that pursuant to the Loan Agreement dated 9 January 2020 (“Loan Agreement”), the first defendant created a charge to the plaintiff in respect of the first defendant’s interest in the property situated at 22 Cummins Street, Rapid Creek in the Northern Territory of Australia being lot 741 Town of Nightcliff (“Property”).
(b)A declaration that the charge charges the interest of the first defendant in the Property with payment of all moneys due and owing by the first defendant to the plaintiff under the Loan Agreement.
(c)The first defendant is to pay the plaintiff’s costs of and incidental to these proceedings on an indemnity basis.

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