PEE Loo Tan v Westpac Banking Corporation

[2000] QCA 514

[2000] QCA 514

COURT OF APPEAL

DAVIES JA

Appeal No 8689 of 2000

PEE LOO TAN  Applicant (Defendant)

v.

WESTPAC BANKING CORPORATION
(ARBN 007 457 141)                 Respondent (Plaintiff)

BRISBANE

..DATE 14/12/2000

JUDGMENT

HIS HONOUR:  The applicant has appealed against a summary judgment order against her for possession of property which is a residential property at Helensvale Road, Helensvale used apparently partly as a residence by her and partly as a business.  That property was in fact given as security for two loans to the respondent Westpac.  One was a loan to her for $562,000 and the other was a loan to a company called Innocom Marketing Pty Ltd ACN 060 618 242 (Innocom) for $200,000.

As a condition of the loan to Innocom the applicant was required to insure the property at Southport which was also security for the Innocom loan with an insurer approved by the respondent which as it turned out was CIC Insurance.  After the loan documents were executed and the moneys advanced the Southport property burnt down and the applicant sought to recover.  The insurer however has terminated the policy for material non-disclosure and that question and the applicant's right to recover under that policy are the subject of proceedings I am told in the Supreme Court.

There does not seem to be any dispute that the applicant is in default under her loan, that Innocom is in default under its loan and that consequently the securities all of which are cross-collateralised may be enforced against all of the properties mortgaged in support of either loan.  However the applicant contended before the Judge who made the orders the subject of the appeal to this Court that there was an implied term in the, it is not entirely clear to me whether it was in the mortgage in respect of the residential property or in the loan document under which the applicant acquired its loan.  An implied term that the respondent would in effect not enforce the mortgage including by possession of the residential property to which I have referred unless and until in the event of loss of the Southport premises the money properly recoverable under the policy was recovered.

The basis for that implied term as it was put to her Honour appears to have been twofold.  One is that it seems to have been said that the respondent knew when the moneys were advanced that the applicant was dependent on the returns from the business premises at Southport in order to repay the loans.  The other to which Mr Piper for the applicant referred me this morning is a clause which was a common clause in each of the mortgage documents that in the event of loss or damage to the mortgaged premises that the bank alone shall have full power to enforce, settle and compromise all claims.  It has indicated to the applicant, so I am told, that it does not propose to seek to enforce the claim under the policy leaving it to the applicant to argue the question of material non-disclosure and any other basis upon which the insurer may have sought to avoid liability under the policy.

I cannot see any strong argument in either of those submissions for the implication of the term which it is necessary to imply in order to succeed in this appeal.  In order to grant the stay which has been sought the applicant must in my opinion show that there is a substantial prospect of success on appeal and I cannot be satisfied on the material which I have seen that there is a substantial prospect of success.  Accordingly I would refuse the application for a stay.

MR WILSON:  I ask for costs.

HIS HONOUR:  You can't oppose that Mr Piper, can you?

MR PIPER:  I'm sorry, your Honour.

HIS HONOUR:  I said you can't oppose an order for costs, can you, in the circumstances?

MR PIPER:  No.

HIS HONOUR:  With costs.

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