Permanent Mortgages Pty Limited v Tran
[2012] WASC 372
•8 OCTOBER 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: PERMANENT MORTGAGES PTY LIMITED -v- TRAN [2012] WASC 372
CORAM: CORBOY J
HEARD: 6 SEPTEMBER 2012
DELIVERED : 8 OCTOBER 2012
FILE NO/S: CIV 1370 of 2010
BETWEEN: PERMANENT MORTGAGES PTY LIMITED
Plaintiff
AND
THI BACH LOAN TRAN
First DefendantLIAM DAI TRAN
Second Defendant
Catchwords:
Mortgages - Compromise of application for summary judgment by consent judgment subject to conditions - Breach of compromise agreement - Whether mortgagee waived its rights on default - Turns on its own facts
Legislation:
Nil
Result:
Judgment to be entered for plaintiff
Category: B
Representation:
Counsel:
Plaintiff: Mr D H Solomon
First Defendant : In person
Second Defendant : No appearance
Solicitors:
Plaintiff: Solomon Brothers
First Defendant : In person
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570
CORBOY J:
The application and the result
The plaintiff (Permanent) alleged that it had advanced $810,000 to the first defendant (Mrs Tran) pursuant to a loan agreement made on 30 December 2007 (the Loan Agreement). It further alleged that:
(a)the loan had been secured by a mortgage granted by Mrs Tran over two properties located at North Plantations, Carnarvon (the Mortgaged Properties) and by a guarantee and indemnity granted by the second defendant;
(b)Mrs Tran had breached the terms of the Loan Agreement and the mortgage by failing to pay an instalment of interest and fees in an amount of $8,974.59 due by 18 January 2010;
(c)it had served a notice of default on Mrs Tran and the second defendant but the default had not been remedied within the period specified in the notices;
(d)the full amount of the loan, together with accrued interest had become payable as a consequence of the default and failure to remedy the default;
(e)notices of demand had been served on Mrs Tran and the second defendant but those demands had not been satisfied.
Permanent commenced proceedings seeking orders for payment of an amount claimed as owing under the Loan Agreement, together with interest, and for possession of the Mortgaged Properties. It subsequently applied for judgment in default of an appearance by summons dated 27 July 2010. An appearance was filed on 6 August 2010 by solicitors engaged by Mrs Tran. Permanent responded by applying for summary judgment by summons dated 10 September 2010. Subsequently, the solicitor who appeared for Mrs Tran successfully applied to be removed from the record. Mrs Tran has been unrepresented in the proceedings since that time.
The application for summary judgment was not heard but rather, the matter was referred to mediation by orders made 29 November 2010.
A notice of intention to proceed was given under O 3 r 7 of the Rules of the Supreme Court 1971 by Permanent on 28 May 2012 and orders were made removing the action from the inactive cases list.
The circumstances in which the action was reactivated were explained in an affidavit made by Colleen Dawn Worthington on 4 July 2012 (Ms Worthington's fifth affidavit). Ms Worthington is the legal action manager for La Trobe Capital & Mortgage Corporation Limited (La Trobe) (affidavit of Colleen Dawn Worthington sworn 23 July 2010 (Ms Worthington's first affidavit), par 1). In brief, Ms Worthington stated in her fifth affidavit that a settlement agreement had been made between Permanent and Mrs Tran at a mediation conference held on 2 December 2010. The terms of that settlement are further summarised below but it was alleged that Permanent was entitled to apply for judgment pursuant to the agreement in the event that Mrs Tran breached its terms and that a breach had occurred in May 2012. Permanent applied for judgment to be entered against Mrs Tran for payment of an amount alleged to be owing under the Loan Agreement and the settlement agreement and for possession of the Mortgaged Properties.
I have concluded that Permanent is entitled to judgment in the terms sought.
The Loan Agreement
Ms Worthington stated in her first affidavit that La Trobe managed the loan made to Mrs Tran on behalf of Permanent (par 2). She attached to her affidavit a copy of an agreement made between Permanent and Mrs Tran (attachment 'CDW‑4'). The agreement comprised an offer dated 3 December 2007 to provide mortgage finance made by La Trobe as Permanent's representative to Mrs Tran. Mrs Tran had accepted the offer by signing the document.
Ms Worthington also attached a copy of the mortgage granted by Mrs Tran over the Mortgaged Properties. The mortgage was registered against the titles to the Mortgaged Properties on 12 February 2008 (attachments 'CDW‑1' ‑ 'CDW‑3').
The settlement agreement
The making and the terms of the settlement agreement reached at the mediation conference were not in issue. The settlement agreement (which was handwritten) provided as follows:
Mrs Thi Bach Laon Tran agrees to enter into the following arrangementwith La Trobe Financial Services Pty Ltd:
1.Fortnightly payments of $4,500 ($AUD4,500) with the first fortnightly repayment to be made on 14 December 2010.
2.The two fortnightly payments are to be made on 14th and 28th day of every month until the full amount of the arrears is cleared.
3.As at today's date Mrs Tran agrees that the amount of arrears is $67,487.28.
4.Cover all additional legal costs incurred by the plaintiff in enforcing the default of the loan, capped at $3,500.
5.Consent to judgment being entered against her by way of a minute of consent orders in the terms stated in the application for summary judgment dated 10 September 2010 which Mrs Tran signs on 2 December 2010 and which Solomon Brothers will hold in escrow until default in … (indecipherable).
6.If any payment of $4,500 is not made within 7 (seven) days of the date the payment is due, the plaintiff may proceed to file the minute of consent orders for judgment against Mrs Tran and subsequently enforce judgment against Mrs Tran.
7.Whilst this payment arrangement is complied with, Mrs Tran will not be charged late payment fees pursuant to the terms of the loan agreement.
Attached to the agreement was a document headed:
Minute of consent orders
CIV 1370 of 2010
Permanent Mortgages Pty
(ACN 097 176 362)
and
Thi Bach Loan Tran and Liam Dai Tran
The document continued:
1.Judgment be entered for the plaintiff against the first‑named defendant in the amount owing pursuant to the loan agreement to be verified by way of an affidavit together with interest at the rate under the loan agreement to be charged to the date that the judgment sum is paid in full.
2.Within 28 days after service of the judgment on the first‑named defendant, the first‑named defendant give to the plaintiff possession of:
2.1779 North River Road, North Plantations in Western Australia, being more particularly described as lot 101 on deposited plan 202367 being the whole of the land comprised in certificate of title volume 1245, folio 618; and
2.283 North River Road, North Plantations in Westerns Australia, being more particularly described as lot 32 on diagram 19791 being the whole of the land comprised in certificate of title volume 1311, folio 907.
Mrs Tran had signed the minute.
The default
Ms Worthington stated in her fifth affidavit that:
(a)Mrs Tran had defaulted in payment of instalments due on 14 and 28 October 2011 under the settlement agreement but subsequently, the outstanding payments were made in November 2011. Permanent elected not to take any action (par 11).
(b)Permanent had received on a cheque on 21 May 2012 from Mrs Tran in an amount of $1,100. The cheque was in part payment of an instalment owed on 14 May 2012. Subsequently, the cheque was dishonoured (par 12).
(c)The instalment due on 14 May 2012 had not been paid in full by 23 May 2012 (par 13).
(d)Mrs Tran paid the sum of $1,100 to Permanent on 20 June 2012 and made further payments of the instalments due in June (par 14).
Mrs Tran provided the court with two letters, dated 14 July and 17 August 2012. Counsel for Permanent was content for the court to receive the letters as evidence of the matters that Mrs Tran wished to raise in answer to Permanent's claim without further proof of the matters stated.
In summary, Mrs Tran:
(a)Explained that she had made good the defaults that had occurred in October 2011.
(b)Further explained how it was that the cheque that had been provided to Permanent had been dishonoured. It would appear that there had been some delay in arrangements that she had made for depositing the required funds into the relevant account.
(c)Indicated that she did not fully understand how the instalments that she had paid had been applied to reducing the default under the Loan Agreement as at December 2010 and the payment of interest.
(d)Set out details of a number of payments that she had made under the Loan Agreement. It was clear that Mrs Tran had paid a substantial amount under the agreement since the advance had been made.
(e)Stated that she had visited the offices of La Trobe on about 16 or 17 June 2012 after learning that it had 'issued some "paperwork" to take me to the Court' (letter dated 14 July 2012). She spoke to an officer of La Trobe and to Ms Worthington. She was told, in effect, that La Trobe had reactivated the proceedings because a cheque that she written and sent to La Trobe had been dishonoured. She was advised to obtain legal advice. She also spoke to a lawyer employed by Permanent's solicitors who explained that action was being taken by La Trobe because of the dishonoured cheque.
Conclusion and reasons
Mrs Tran did not dispute that her cheque provided to Permanent in May 2012 had been dishonoured and, in effect, that there had been a default under the settlement agreement. The matters that she had stated in her letters were by way of an explanation and in support of a plea that the court should exercise some power or discretion to excuse the default.
As Mrs Tran was unrepresented, I raised with counsel for Permanent whether it could be argued that Permanent had waived its rights on breach of the settlement agreement by not taking any steps following the defaults in October 2011 and/or by accepting further instalments in June 2012. He referred the court to what was said by Gummow, Hayne and Kiefel JJ in Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570 that a waiver was 'an intentional act, done with knowledge, whereby a person abandons a right by acting in a manner inconsistent with that right' [56].
That statement was made by the plurality when discussing the uncertainty attaching to the meaning of the term 'waiver'. They recognised that the same principle had been applied in many cases involving an election between inconsistent rights. Equity will not permit a person to both take a benefit and deny a burden. At common law, a party must elect between alternative rights and remedies.
The respondent borrower in Agricultural and Rural Finance had not punctually paid periodic repayments of loans made by the appellant borrower. The late payments were accepted by the appellant and it did not exercise a right to accelerate payment on default. The respondent subsequently contended that the appellant had waived its rights to enforce the loan agreements in three possible senses ‑ election, forbearance and abandonment (he did not rely on estoppel despite its close affinity with forbearance). The plurality concluded that there had not been a waiver by the appellant in any of those senses.
There was no evidence that Permanent made any representation or statement to Mrs Tran to the effect that it would not exercise any right if the defaults under the loan and settlement agreements were remedied. Rather, the evidence was that Mrs Tran made good the defaults of her own volition. Further, she was aware that La Trobe had sought to reactivate the proceedings and had been informed about the reason why it had taken that step when she went to La Trobe's offices in mid-June 2012. La Trobe had given notice of its intention to proceed with the action by that time. Mrs Tran was aware that La Trobe was seeking to 'take her to court'. She was advised to obtain legal advice.
In my view, the reasoning of the plurality Agricultural and Rural Finance, when applied to the circumstances of this matter, establishes that:
(a)Permanent did not elect between inconsistent rights when it accepted the late payments made by Mrs Tran and the further instalments paid in June 2012 nor did it seek to take only the benefit of the loan and settlement agreements while denying the burden of those agreements. It merely accepted payments that Mrs Tran was obliged to make.
(b)There was no variation to the loan and settlement agreements and nothing passed between Permanent and Mrs Tran that would estop Permanent from exercising its rights under the settlement agreement. The exchange between Mrs Tran and La Trobe in mid-June 2012 was to the contrary effect.
(c)Permanent did not forbear to rely on, or abandon or renounce, any right that it had under the loan and settlement agreements.
(d)Permanent did not waive any right that it possessed to enforce the settlement agreement.
It follows that Permanent is entitled to judgment in the terms sought. Ms Worthington made a further affidavit on 9 August 2012 attaching a schedule of loan balance calculations (attachment 'CDW‑8') and stating the daily rate at which interest accrued. A certificate signed by Permanent's solicitors and filed in the proceedings certified that the amount owing as at 5 September 2012. Judgment will be entered for that sum and an order made that Mrs Tran deliver up possession of the Mortgaged Properties within 28 days of service of the judgment.
0
1
1