Perpetual Trustee Company Ltd v Saunders - [2013] SASC 89

Supreme Court of South Australia
(Civil: Application)
PERPETUAL TRUSTEE COMPANY LTD v SAUNDERS
[2013] SASC 89
Judgment of The Honourable Justice White (ex tempore)
31 May 2013
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - EXTENSION
On 11 October 2012 this Court made an order granting the plaintiff (as mortgagee) possession of the defendant's property - the plaintiff exercised the power of sale and settlement was to take place on 3 June - the defendant lodged a caveat on the title, claiming that defects in the plaintiff's default notice meant that it could not exercise the power of sale and gave him a caveatable interest.
The defendant applied for an extension of the time at which the Registrar-General is to remove a caveat.
Held (refusing the application):
(1) the appropriate time for the defendant to raise the present issues was at the hearing relating to the grant of the possession order;
(2) the applicant did not establish that there is a serious question to be tried concerning the validity of the respondent's power of sale;
(3) the balance of convenience does not favour the extension of time sought.
Real Property Act 1886 (SA), s 191; Law of Property Act 1936 (SA), s 55A, referred to.
Whallin v Bailbart Investments Pty Ltd (1987) 47 SASR 198; Stone v Leonardis [2011] SASC 153; (2011) 110 SASR 503; Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423; Accordent Pty Ltd v Breismark Nominees Pty Ltd [2008] SASC 196; (2008) 101 SASR 286; Bank of Western Australia Ltd v Wong [2012] SASC 124; Inglis v Commonwealth Trading Bank of Australia (1971) 126 CLR 161, considered.

PERPETUAL TRUSTEE COMPANY LTD v SAUNDERS
[2013] SASC 89
Application to a Single Judge

WHITE J. This is an application under s 191(g) of the Real Property Act 1886 (SA) (RPA) for an extension of the time fixed by s 191(f) of that Act at which the Registrar‑General is to remove a caveat.
The defendant (Mr Saunders) owns land at Hewitt Avenue, Rose Park. That land is mortgaged to the plaintiff (Perpetual) as a result of an assignment to it from the original mortgagee, Permanent Custodians Limited (Permanent Custodians). Following defaults by Mr Saunders in payment of the instalments due under the mortgage, on 11 October 2012 this Court made an order for possession of the property in favour of Perpetual. That order was made in proceedings commenced by Perpetual for such an order (the Perpetual Action). Provision was made in the order for re-delivery of the property in the event of payment by Mr Saunders of the full value of the mortgage.
The affidavit of Perpetual’s solicitor indicates that, since 21 June 2012, Mr Saunders has made only one monthly instalment, being a payment of $1,738. I was told that this was paid in early May this year. A warrant for possession of the property was issued on 3 December 2012 and Perpetual obtained possession pursuant to that warrant on 10 January 2013.
Perpetual exercised the mortgagee’s power of sale and sold the property by public auction on 5 April 2013. Settlement was originally scheduled for 20 May 2013, but has been deferred until Monday, 3 June. That deferral was caused by Mr Saunders’ lodgement of a caveat on the title to the property on 4 April 2013. The interest asserted by Mr Saunders in the caveat is as follows:
The caveator claiming an estate and interest as registered proprietor and mortgagor pursuant to Mortgage 11322751 wherein defects exist in at least one notice of default and therefore the caveatee is improperly exercising their power of sale in the above land.
As can be seen from that statement of interest, Mr Saunders is, in effect, asserting that Perpetual is not entitled to exercise the power of sale arising under the terms of the mortgage and under the terms of the RPA.
On 19 April 2013, Perpetual lodged with the Registrar‑General an application under s 191(e) of the RPA seeking removal of the caveat. Subsequently, on 10 May 2013, the Registrar‑General gave notice to Mr Saunders under s 191(e) warning him that he, the Registrar‑General, would, on the expiration of 21 days, remove the caveat unless previously served with an order of a court extending the time for its removal.
On 28 May 2013, Mr Saunders filed an interlocutory application in the Perpetual Action. He seeks an order that the caveat “remain in effect until further order of the Court”. That is the application for determination today.
There is a very real question as to whether it is now open to Mr Saunders to seek interlocutory relief, at least of the present kind, in the Perpetual Action. The relief which he seeks does not appear, at least on its face, to be adjectival or incidental to the matters agitated in the Perpetual Action. There is no existing substantive claim to which the interlocutory relief sought by Mr Saunders may relate. This is not a case, in other words, of the usual type in which a party commences proceedings seeking a form of substantive relief and then a form of interlocutory relief to preserve the position until the entitlement to the substantive relief is determined.
At the very least it is arguable, and I think probable, that Mr Saunders should have commenced fresh proceedings rather than seeking to bring his interlocutory application in the Perpetual Action. However, Perpetual takes no point about that and it is not necessary or appropriate in that circumstance for the Court to consider whether the application is incompetent.
The approach of this Court in relation to applications of the present kind was discussed by Cox J in Whallin v Bailbart Investments Pty Ltd.[1] I referred to Whallin in Stone v Leonardis[2] when determining an application brought under s 191(d) of the RPA.
[1] (1987) 47 SASR 198.
[2] [2011] SASC 153 at [20]; (2011) 110 SASR 503 at 507.
In Whallin, Cox J recommended the following procedure or approach for what he described as “the general run” of cases of the present kind:
A caveator litigant who wishes to have the caveat maintained until judgment may, when the caveat is warned, apply for the usual limited extension of time under [s 191(g)]. For this he will probably only need to show that he was justified in lodging the caveat. Before that extended time expires, he may seek a further extension, this time until further order. For this he will need to offer the usual undertaking as to damages and to satisfy the test appropriate to the grant of an interlocutory injunction. If he succeeds in this application he will not ordinarily need to obtain the actual injunction as well. If he fails, that will probably be the end of the matter.[3]
Cox J then went on to discuss the possibility of the caveatee seeking a review.
[3] (1987) 47 SASR 198 at 203-4.
It can be seen that Cox J contemplated a two-stage process rather than a single-stage process. However, in the present case Mr Saunders seeks to have his caveat extended until further order; he has brought his application only very shortly before the scheduled date of settlement which he wishes to have deferred; and he raises a matter going to Perpetual’s entitlement to exercise its power of sale, despite the previous orders of this Court.
In those circumstances I consider it appropriate to proceed on this basis. Mr Saunders has to satisfy the Court that it is appropriate for an extension of time for the removal of the caveat to be granted. This means that he must establish that there is a serious question to be tried concerning the existence of the asserted caveatable interest and that the balance of convenience favours the extension. As part of that consideration it will be necessary for Mr Saunders to proffer an undertaking as to damages, being an undertaking of some value.
I mention that Mr Saunders has represented himself today. Earlier, he sought an adjournment of today's hearing in order to allow him to pursue obtaining legal representation. I refused that application for the brief reasons which I gave at the time. Essentially, they were that I was not satisfied of the utility of the adjournment and, further, was not satisfied, on discretionary grounds, that it was appropriate. In relation to the discretionary grounds, I was particularly concerned that Mr Saunders has known, on his own admission, since about the beginning of April of the matters which he now wishes to agitate, and, in fact, lodged the caveat because of those matters, and yet has waited for just on two months before taking active steps to obtain legal assistance. Despite Mr Saunders’ submission, those steps cannot reasonably be described as “extensive”.
I am satisfied that the application for the extension of time for the removal of the caveat should be refused. Consideration of the substantive issues which Mr Saunders wishes to agitate and the balance of convenience both point in that direction.
Mr Saunders says, first, that there is a defect in the notice of default delivered to him in April 2012 under s 55A of the Law of Property Act 1936 (SA) (LPA) because he had not previously been given notice of the assignment of the mortgage from Permanent Custodians to Perpetual. There is a factual dispute about whether or not Mr Saunders was given such notice because the affidavit of Perpetual's solicitor exhibits a document containing a form of notice of the assignment which was posted to Mr Saunders on or about 30 June 2011. It is not possible for me to resolve that factual dispute at the present hearing, nor is it necessary for me to do so. I am satisfied, for the reasons advanced in the submissions of counsel for Perpetual, that even if Mr Saunders had not received the 30 June 2011 notice, there was sufficient notice in the default notice issued under s 55A of the LPA (which Mr Saunders acknowledged receiving) to satisfy the notice requirement of s 15 of the LPA. The s 55A notice was capable of constituting “a direct and definite statement ... [allowing the debtor to] know with certainty in whom the legal right to sue him is vested”.[4]
[4] Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423 at 438-9 (references omitted). See also Accordent Pty Ltd v Bresimark Nominees Pty Ltd [2008] SASC 196 at [50]-[52]; (2008) 101 SASR 286 at 295-6.
The second matter on which Mr Saunders relies is an error in the default notice issued under s 55A of the LPA. The error to which he points is a mistake in the account number used by Perpetual in relation to his loan.
It is difficult to see any basis upon which the misstatement of the account number in the default notice could have affected the validity of the default notice or its efficacy as a notice under s 55A of the LPA. An accurate statement of the internal account number used by the mortgagee in relation to a loan or mortgage is not a formal requirement for a valid notice.
There may, I suppose, be some circumstances in which a misstatement of an account number may give rise to some confusion or may mislead a mortgagor. Judge Burley adverted to this possibility in Bank of Western Australia Ltd v Wong.[5] However, there is no indication of confusion or that Mr Saunders has been misled in the present case. The affidavit from Perpetual’s solicitor indicates that Mr Saunders had one loan only with Perpetual, so that he could not have been uncertain as to the indebtedness to which the notice referred. It could not be said reasonably that the mistake in the account number created some uncertainty as to whether the default to which the notice referred was that of the defendant or of some other borrower from Perpetual. I note that the submissions and affidavit material of Mr Saunders in relation to Perpetual’s application for the possession order in 2012 indicate that both he and his legal representatives were under no doubt as to the particular loan and mortgage to which Perpetual's application for an order for possession related.
[5] [2012] SASC 124 at [7]-[8].
Mr Saunders has not identified any material confusion on his part.
If, as Mr Saunders told me today, he became aware of the error in the account number only earlier this year, it is difficult to see how the error was productive of confusion on his part at the time of the hearing of Perpetual’s application for a possession order.
Mr Saunders submitted that the error in the account number may indicate that there are other, as yet unidentified, errors in the default notice. Theoretic possibilities of this kind do not give rise to a serious issued to be tried.
The appropriate time for the points on which Mr Saunders now relies to be raised was at the hearing in this Court in relation to the making of the order for possession. That is because the alleged defects, if they are defects, went to Perpetual’s entitlement to the order which it then sought. At that hearing, Mr Saunders was represented by solicitors and counsel. One cannot help but be sympathetic to the personal circumstances which Mr Saunders faced at that time arising from the ill health, and then death, of his mother, but the fact of the matter is that he had retained a solicitor and counsel to defend Perpetual’s application for an order of possession. If the matters now raised by Mr Saunders were to be agitated, they should have been raised at that time.
No appeal has been brought against the order for possession. It is inappropriate on an interlocutory application of the present kind for the Court to be asked to review the appropriateness of its previous order, or to make an order which would undermine its effect. That is especially so given that Perpetual has acted on the order in the interim.
The two matters which Mr Saunders now wishes to agitate should be regarded as foreclosed by the previous orders made by this Court. I am referring here to the order for possession and the later warrant for possession, but it is the former which is the more pertinent. This makes it unnecessary to consider whether these two matters could, even if established, give rise to a caveatable interest.
So, for those brief reasons, I am not satisfied that there has been established a serious issue to be tried.
I am also satisfied that the balance of convenience does not favour Mr Saunders. Essentially this is for the reasons outlined by counsel for Perpetual.
The evidence indicates that Mr Saunders’ indebtedness to Perpetual already exceeds the amount which Perpetual is likely to realise from the sale. The longer the settlement is deferred, the greater will be Mr Saunders’ indebtedness. Mr Saunders is already in arrears to Perpetual (before any account is taken of the acceleration of his liability) for more than $144,000. It is not as though Mr Saunders is making regular instalments due under the mortgage, as he has paid only one instalment since June 2012. There is no suggestion that Mr Saunders is any way able to offer a valuable undertaking as to damages. By a valuable undertaking, I mean an undertaking which, if it had to be enforced, would enable Perpetual to recover any losses it might incur if the settlement is deferred further.
There is the potential for Perpetual to suffer further detriment if the settlement on the sale of the property is deferred. For the reasons already mentioned, Perpetual is not secured in relation to Mr Saunders’ continuing indebtedness.
I take into account too that Mr Saunders is not offering security of the kind discussed by the High Court in Inglis v Commonwealth Trading Bank of Australia[6] to which I referred in Stone v Leonardis.[7]
[6] (1971) 126 CLR 161 at 164-5.
[7] (2011) SASC 153 [73]-[74]; (2011) 110 SASR 503 at 517-8.
Finally, I take into account that Mr Saunders filed the present application only on 28 May, despite the fact that he has been aware since at least early April 2013 of the matters which he contends invalidate Perpetual’s exercise of its power of sale.
For these reasons the order which I make on the interlocutory application, [FDN 17] filed on 28 May 2013, is that the application is dismissed.