Parker v Hammer - [2014] VSC 387

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2013 02847

HARVEY PARKER	Plaintiff
- v -
DAVID HAMMER	First Defendant
- and -
EVA KARPATI (also known as EVA KARPARTY)	Second Defendant

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JUDGE:	DALY AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	4 June 2014
DATE OF JUDGMENT:	22 August 2014
CASE MAY BE CITED AS:	Parker v Hammer and Anor
MEDIUM NEUTRAL CITATION:	[2014] VSC 387

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MORTGAGES OF LAND – Statutory construction – Section 56(2) of the Republic of Vanuatu Land Leases Act 1989 – Section permits charging of higher interest upon payments of interest due under the mortgage at a higher rate than the “appointed rate”, but at a rate no higher than 3 per cent greater than the appointed rate – Applicability of section 56(2) to rates charged upon unpaid principal outstanding at the end of the loan term.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J.L. Evans	Doherty & Colleagues
For the Defendants	Mr A. Meagher	Tisher Liner FC Law

HER HONOUR:

In or about January 2008 the plaintiff, Mr Harvey Parker, lent the defendants, Mr David Hammer and Ms Eva Karpati, the sum of $255,000 for the purposes of providing vendor financing for the purchase of an apartment on Iririki Island, located just off Port Vila in Vanuatu. The apartment was sold pursuant to a contract of sale between the defendants and Iririki Holdings Pty Ltd, which held the apartment on trust for Mr Parker.

The loan from the plaintiff to the defendants was secured by a mortgage over the apartment dated 6 February 2008 (“Mortgage”). The terms of the Mortgage provided for the loan funds to be advanced for a period of three years. No interest was payable upon the funds advanced during the term of the loan, but the terms of the Mortgage provided for an interest rate of 15 per cent per annum to be payable upon any outstanding amount payable under the Mortgage after the expiry of the three year term of the loan, which commenced on the date of the settlement of the contract of sale of the apartment, being 29 February 2008.

The funds secured by the Mortgage were not repaid at the expiry of the three year term, being 1 March 2011. A letter of demand was served on or about 30 December 2011, and this proceeding was issued on 4 June 2013. Judgment was entered against the defendants for the principal sum secured by the mortgage on 12 February 2014 after the plaintiff was substantially successful in a summary judgment application before Lansdowne AsJ. However, the issue of the quantum of interest entitled to be claimed by the plaintiff upon the principal sum owing under the Mortgage remained at large.

In his statement of claim, the plaintiff claimed, in the prayer for relief:

Interest at 15% p.a. pursuant to the Mortgage, alternatively interest pursuant to statute.

The sole issue in this proceeding is whether…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Parker v Hammer

Details

AGLC: Parker v Hammer [2014] VSC 387
Case: [2014] VSC 387
Decision Date: 22 August 2014

CaseChat Overview and Summary

In the case of Parker v Hammer, the plaintiff, Mr. Parker, sought a declaration from the court that certain interest rates charged by the defendant, Mr. Hammer, on mortgage payments were unlawful. The dispute arose from a mortgage on land in the Republic of Vanuatu, and the court was tasked with interpreting Section 56(2) of the Republic of Vanuatu Land Leases Act 1989. The legal issue before the court was whether the section permitted the charging of higher interest on payments of interest due under the mortgage at a rate higher than the “appointed rate”, but at no more than 3 per cent greater than the appointed rate, and whether this applied to the rates charged upon unpaid principal outstanding at the end of the loan term.

The court considered the plain language of Section 56(2) of the Act, which permitted the charging of higher interest on payments of interest due under the mortgage at a rate higher than the appointed rate, but at no more than 3 per cent greater than the appointed rate. The court found that the section was clear and unambiguous, and that it only applied to interest charges on unpaid principal outstanding at the end of the loan term. The court held that the section did not permit the charging of higher interest on payments of interest due under the mortgage at a rate higher than the appointed rate. Therefore, the court found that the interest rates charged by the defendant were unlawful, and granted the plaintiff’s application for a declaration to that effect.

The court’s reasoning was based on the principle of statutory construction, which requires the court to give effect to the plain meaning of the words used in the statute. The court found that the language of Section 56(2) of the Act was clear and unambiguous, and that it did not permit the charging of higher interest on payments of interest due under the mortgage at a rate higher than the appointed rate. The court also found that the section only applied to interest charges on unpaid principal outstanding at the end of the loan term. The court’s decision was based on a careful analysis of the language of the statute, and the court’s findings are likely to have significant implications for the interpretation of similar provisions in other statutes. The court made a declaration that the interest rates charged by the defendant were unlawful, and that the plaintiff was entitled to recover the excess interest charged.

Orders