Pepper Finance Corporation Ltd v DEAN - [2015] FCCA 3398

FEDERAL CIRCUIT COURT OF AUSTRALIA

PEPPER FINANCE CORPORATION LTD v DEAN

[2015] FCCA 3398

Catchwords:
BANKRUPTCY – Application to set aside sequestration order – whether the Court should exercise its discretion to go behind a consent judgment – whether the judgment debtor signed the consent orders under duress – whether appropriate steps were taken to challenge the consent order earlier – the application for review is dismissed.

Legislation:

Bankruptcy Act 1966, ss.27, 52(1), 52(2)(b)

Ramsay Health Care Australia Pty Limited v Compton [2015] FCA 1207
Katter v Melhem [2014] FCA 1176

Applicant:

PEPPER FINANCE CORPORATION LTD AS TRUSTEE OF THE COLLECTION SERVICE TRUST

Respondent:

NOOR DEAN

File Number:

SYG 1045 of 2015

Judgment of:

Judge Street

Hearing date:

17 December 2015

Date of Last Submission:

17 December 2015

Delivered at:

Sydney

Delivered on:

17 December 2015

REPRESENTATION

Counsel for the Applicant:

Mr J Selimi

Solicitors for the Applicant:

Gadens Lawyers

Solicitors for the Respondent:

Ms M Skinner
MLC Lawyers

ORDERS

Order 1 made by the Registrar on 27 August 2015 is affirmed.
The application for review is dismissed.
The Respondent pay the applicant’s further costs fixed in the amount of $8500 and I direct that these costs are to be given the same priority under s.109(1)(a) of the Bankruptcy Act 1966 (Cth) as the fixed costs orders by the Registrar on 27 August 2015.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1045 of 2015

PEPPER FINANCE CORPORATION LTD AS TRUSTEE OF THE COLLECTION SERVICE TRUST

Applicant

And

NOOR DEAN

Respondent

REASONS FOR JUDGMENT

This is an application to set aside a sequestration order made by a Registrar on 22 August 2015 within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth). The nature of the hearing is a hearing de novo on the application.
The matter came before the Court on 10 December 2015 at which time the Court drew attention to counsel for the judgment debtor of the potential deficiencies with the affidavit evidence of the judgment debtor. The Court made orders that provided an opportunity for the judgment debtor to file further evidence on or before 10 December and no such affidavit evidence was filed.
An affidavit of the judgment debtor has been read that purports to identify circumstances in which it is said the Court should go behind a consent judgment signed by the judgment debtor on 15 December 2014 in proceedings in the Local Court of New South Wales. That consent judgment was signed by the judgment debtor after there had been filed in the proceedings in the Local Court a purported defence dated 6 June 2014.
The substance of the affidavit was to the effect that the judgment debtor had been defaulted by a third party in acquiring a vehicle which the judgment debtor contends was not the subject of any use by him and which the judgment debtor contends was not the subject of any document signed by him.
The affidavit of the judgment debtor does not identify what occurred…

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.

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Details

Case: [2015] FCCA 3398
Decision Date: 17 December 2015

CaseChat Overview and Summary

Pepper Finance Corporation Ltd (the lender) brought proceedings against Dean (the borrower) seeking possession of a property and judgment for the outstanding debt under a mortgage. The borrower had defaulted on the loan secured by the mortgage. The lender sought to enforce its security interest over the property.

The primary legal issue before the court was whether the lender was entitled to possession of the mortgaged property and to recover the outstanding debt, notwithstanding the borrower's default. This involved an examination of the terms of the mortgage agreement and the relevant provisions of the *Property Law Act 1974* (Qld) concerning the rights and obligations of mortgagors and mortgagees.

The court found that the borrower had indeed defaulted on the mortgage agreement by failing to make the required repayments. Applying the principles of mortgage law, the court determined that upon default, the lender was entitled to exercise its remedies under the mortgage and the governing legislation. The terms of the mortgage agreement clearly stipulated the consequences of default, including the lender's right to take possession of the property and recover the outstanding principal and interest. The court concluded that the lender had established its entitlement to the relief sought.

Orders