Perpetual Trustees Victoria Ltd v English (No 3)
[2011] NSWCA 74
•05 April 2011
Court of Appeal
New South Wales
Case Title: Perpetual Trustees Victoria Ltd v English (No 3) Medium Neutral Citation: [2011] NSWCA 74 Hearing Date(s): On the papers Decision Date: 05 April 2011 Jurisdiction: Before: Allsop P at 1, Campbell JA at 1, Sackville AJA at 1
Decision: A. In the appeal:
1. A declaration that the Mortgage has full force and effect as against the interest of the first respondent in the property known as 36 Brisbane Road, Castle Hill and being the whole of the land comprised in folio identifier 4/13841 (Property) (as now vested in the Official Trustee) in respect of all moneys outstanding under the Loan Agreement and/or under the Mortgage and further interest, charges and costs payable thereunder.
2. An order that, if contracts for the sale of the Property by the second and third respondent are not exchanged by 15 June 2010, on terms that are satisfactory to the Appellant, then effective from 16 June 2010:
(a) Trustees for sale be appointed in respect of the Property under section 66G of the Conveyancing Act 1919 (NSW) and that the Property be vested in such Trustees, to be held by such trustees upon a statutory trust for sale under Division 6 of Part IV of the Conveyancing Act 1919 (NSW);
(b) The appellant and the second and third respondent shall use their best endeavours to agree within 14 days upon the identity of the trustees referred to at 2(a) and failing agreement the proceedings shall be relisted for the appointment of trustees by the Court.
(c) An order that the trustees' fees, expenses and legal costs be paid out of the proceeds of the sale.
(d) An order that the trustees pay the net proceeds of the sale, after payment of the fees, expenses and legal costs referred to in order 2(c) above, to the appellant and the second respondent (Ms English) in equal shares and that the payment to Ms English not be made for a period of 28 days after receipt of the funds and the despatch to Mr English and any lawyer known by the trustees to be acting for him of the trustees' intention to distribute the funds to Ms English.
3. Liberty for the parties or any trustee appointed, to restore the proceedings on 3 days notice to seek further orders.
4. Grant leave nunc pro tunc to the appellant to bring and continue these proceedings against the First Respondent.
B. Pursuant to the amended notice of motion dated 13 December 2010:
1. The Court appoints Dennis Patrick Grogan and Lewis James Webb as trustees for sale of the property under section 66G of the Conveyancing Act 1919 (NSW) ("the trustees").
2. The trustees have possession of the property the subject of the proceedings.
3. The trustees have leave to issue a writ of possession in respect of the property.
4. The costs of this notice of motion be costs in the cause.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]Catchwords: PROCEDURE - Judgments and orders - powers of Judge of Appeal to make any order by consent - orders defective where party had not consented
PROCEDURE - Judgments and orders - leave to appeal granted nunc pro tunc and additional orders made to ensure validity
Legislation Cited: Conveyancing Act 1919 (NSW), s 66G, Pt IV, Div 6
Suitors' Fund Act 1951 (NSW)Cases Cited: Perpetual Trustees Victoria Ltd v English [2010] NSWCA 32
, Perpetual Trustees Victoria Ltd v English [2010] NSWCA 327Texts Cited: Category: Consequential orders Parties: Perpetual Trustees Victoria Ltd (Appellant)
Niel William English (First Respondent)
Kerrie Diane Therese English (Second Respondent)Representation - Counsel: Counsel:
Mr A Leopold SC, D F C Thomas (Appellant)
Mr J Clifton (Second Respondent)- Solicitors: Solicitors:
Kemp Strang (Appellant)
Leverage Australia (First Respondent)
Grogan & Webb (Second Respondent)File number(s): 2009/40258298389 Decision Under Appeal - Court / Tribunal: - Before: Simpson J - Date of Decision: 03 June 2009 - Citation: Perpetual Trustees Victoria Ltd v English & Anor [2009] NSWSC 478 - Court File Number(s) 11418/06 Publication Restriction:
Judgment
THE COURT: On 12 March 2010, the Court made orders in this matter ([2010] NSWCA 32) in the following terms:
"1. Perpetual's appeal against the dismissal of its claim against Ms English be dismissed.
2. Perpetual pay Ms English's costs of the appeal.
3. Perpetual's appeal against the dismissal of its claim against Mr English be allowed.
4. Perpetual be granted leave to further amend its amended statement of claim to claim the relief against Mr English identified in the notice of appeal.
5. The further amended statement of claim be filed within 14 days.
6. Perpetual file within 14 days of these orders short minutes of order giving effect to the judgment to the extent that additional orders are required in consequence of the appeal being allowed.
7. If Ms English disputes the terms of the proposed short minutes of order:
(a) Perpetual should file brief written submissions accompanying the short minutes of order supporting the terms of the orders it proposes; and
(b) Ms English should file within 14 days of these orders alternative short minutes of order accompanied by brief written submissions supporting the terms of the orders she proposes.
8. Mr English pay the costs of Perpetual's appeal against dismissal of its claim against Mr English.
9. Perpetual, if otherwise qualified, have a certificate under the Suitors' Fund Act 1951."
The parties who participated in the appeal were Perpetual Trustees Victoria Ltd ("Perpetual") and Ms English. Neither Mr English nor his trustee in bankruptcy (the Official Trustee) appeared, though Mr English was a party and the Official Trustee was aware of the proceedings but declined to take part.
On 30 November 2010, Allsop P made orders ([2010] NSWCA 327) that were agreed to by Perpetual and Ms English. These orders, as Allsop P's reasons of 30 November 2010 stated, had been submitted to the Court pursuant to Order 6 made on 12 March 2010, but had lain in the Registry. The last sentence of Allsop P's reasons of 30 November was:
"There being consent I have power to make [the orders] under the Supreme Court Act 1970 , s 46(1)(a)."
This was an error. , Mr English and his trustee in bankruptcy had not consented. The orders purported to be made on 30 November 2010 were:
"1. A declaration that the Mortgage has full force and effect as against the interest of the first respondent in the property known as 36 Brisbane Road, Castle Hill and being the whole of the land comprised in folio identifier 4/13841 ( Property ) (as now vested in the Official Trustee) in respect of all moneys outstanding under the Loan Agreement and/or under the Mortgage and further interest, charges and costs payable thereunder.
2. An order that, if contracts for the sale of the Property by the second and third respondent are not exchanged by 15 June 2010, on terms that are satisfactory to the Appellant, then effective from 16 June 2010:
(a) trustees for sale be appointed in respect of the Property under section 66G of the Conveyancing Act 1919 (NSW) and that the Property be vested in such Trustees, to be held by such trustees upon a statutory trust for sale under Division 6 of Part IV of the Conveyancing Act 1919 (NSW);
(b) The appellant and the second and third respondent shall use their best endeavours to agree within 14 days upon the identity of the trustees referred to at 2(a) and failing agreement the proceedings shall be relisted for the appointment of trustees by the Court.
(c) An order that the trustees' fees, expenses and legal costs be paid out of the proceeds of the sale.
(d) An order that the trustees pay the net proceeds of the sale, after payment of the fees, expenses and legal costs referred to in order 2(c) above, to the appellant and the second respondent in equal shares.
3. Liberty for the parties or any trustee appointed, to restore the proceedings on 3 days notice to seek further orders."
Perpetual and Ms English came back before the Court on 31 January 2011 wanting further and final orders, pursuant to an amended notice of motion dated 13 December 2010, completing the appointment of trustees for sale. In discussion on that occasion, Allsop P's error of November became apparent. He told the legal representative that there was some doubt as to the efficacy of the orders of 30 November. He also directed that Mr English and his trustee in bankruptcy be given notice of not only the then current application, but also notice of the orders of 30 November 2010, of the Court's view that they may be defective and that if they wished to put any submission on either matter they should do so within a reasonable time that Allsop P nominated.
The further orders sought by the amended notice of motion were:
"1. Pursuant to Order 2(b) of the Short Minutes of Order filed on 26 March 2010, and with the consent of the Appellant and the Second Respondent, the Court appoint Dennis Patrick Grogan and Lewis James Webb as trustees for sale of the property under section 66G of the Conveyancing Act 1919 ("the trustees").
2. The trustees have possession of the property the subject of the proceedings.
3. The trustees have leave to issue a writ of possession in respect of the property.
4. The costs of this Notice of Motion be costs in the cause."
We have dealt with the matter on the papers substantially on the basis of affidavit evidence filed, given the responses from Mr English and his trustee.
The evidence reveals the following:
(a) The Official Trustee in Bankruptcy through his solicitor clearly indicated in a letter dated 20 January 2011 that he had no interest in the orders proposed to be made. From the text of the letter it is clear that the Official Trustee saw himself as having no interest in orders of the kind made on 30 November and as proposed by the amended notice of motion.
(b) On 2 February 2011, the solicitors for Ms English wrote to Mr English, solicitors for Mr English and the solicitor for the Official Trustee in the following terms:
"...We advise that Mr Clifton of Counsel appeared before His Honour President Allsop on 31 January 2011 for the hearing of the Amended Notice of Motion filed 24 December 2011. There was no appearance for any other party.
At the hearing on 31 January 2011, Mr Clifton moved on Order 1 of the Amended Notice of Motion (but not the remaining orders due to the service of the First Respondent with the Amended Notice of Motion on Thursday 27 January 2011) and read the affidavits of Dennis Patrick Grogan sworn 9 December 2010 and 31 January 2011, which affidavits became Exhibit 1 on the Amended Notice of Motion. The affidavit sworn 31 January 2011 was filed in Court with leave, and a copy is enclosed.
President Allsop declined to make the orders in the Amended Notice of Motion and made the following orders:
1. The Amended Notice of Motion Filed 24 December 2010 is stood over for Judgment in Chambers with liberty to restore on 3 days notice;
2. The solicitors for the Appellant and the Second respondent (ie Grogan & Webb) are to write to the First and the Third Respondents so as to inform those parties of the following:
(i) The Amended Notice of Motion is brought pursuant to Short Minutes of Order filed by the Appellant and the Second Respondent on 26 March 2010, which Short Minutes of Order were formally made by the Court on 30 November 2010 ('the 30 November 2010 Judgment'). A copy of the 30 November 2010 Judgment is enclosed;
(ii) The Court has since identified an oversight in the 30 December November 2010 Judgment, which oversight is that the First and the Third Respondents did not consent to the 30 November 2010 Judgment. Therefore, the 30 November 2010 Judgment which the Amended Notice of Motion is brought pursuant to was irregularly made ('the irregularity');
(iii) The Court, having considered the proceedings as a whole, intends to proceed on the following basis to resolve the irregularity and the Amended Notice of Motion filed 24 December 2010, subject to any submissions received from the First and the Third Respondents by 11 February 2011.
(a) The Court will regard the 30 November 2010 Judgment as having been regularly made;
(b) The Court will make the orders sought in the Amended Notice of Motion in Chambers (subject to evidence of service of the Amended Notice of Motion on the First Respondent, which evidence we will file shortly).
Therefore, if you oppose either the 30 November 2010 Judgment standing as against all parties to the proceedings (including the First and the Third Respondents), or the making of the orders sought in the Amended Notice of Motion filed 24 December 2010 in Chambers without further notice to you, you should file and serve submissions by 11 February 2011."
The letter was inaccurate in one respect (in 2(iii)(a)). Allsop P directed that "unless there are any submissions to the contrary, these orders will be made by the bench that heard the matter together with the orders that are proposed, unless there is any opposition". "
(c) The Official Trustee's response was initially through his solicitor on on 9 February 2011 who said she would seek instructions. After that no further information was provided until, on 23 March 2011, the solicitors for Ms English send to the Court a letter dated 21 March 2011 that they had received from the solicitors for the Official Trustee. That letter said:
"We advise that the Official Trustee in Bankruptcy has considered the Application currently before the New South Wales Court of Appeal. The claim by Perpetual Trustees Victoria Limited is as a secured creditor and falls outside of the general bankruptcy administration which relates to unsecured creditors. If found to be a secured creditor then Section 58(5) of the Bankruptcy Act would entitle the secured creditor to take steps in relation to its security. If Perpetual Trustees Victoria Limited is found not to be a secured creditor then the property of Niel William English, a bankrupt has already vested in the Official Trustee in Bankruptcy and Perpetual Trustees Victoria Limited would be reduced to filing a Proof of Debt in that bankruptcy.
As to whether or not leave to proceed against the property of the bankrupt is required under Section 58(3) of the Bankruptcy Act the Official Trustee makes no comment. If such leave were required the Official Trustee would not wish to be heard in relation to that matter. As a general rule secured creditors do not seek leave to proceed when enforcing their contractual rights pursuant to the terms of their security."
(d) The solicitors for Mr English responded as follows:
"We refer to the above matter and your email dated 9 February 2011.
We confirm your letter dated 2 nd February 2011 was received by our office on 3 February 2011. We further confirm that our client received a copy of this letter on 4 February 2011 when he attended our office.
As requested our instructions in this matter are as follows:
To consent to points 1, 2(a), 2(b), 2(c) and 3 of the short minutes of order, formally made by the court on 30 November;
To oppose order 2(d); and
To request that order 2(d) be varied, directing the equal share of the proceeds referred to in 2(c) to be paid to the second respondent, be placed in trust, pursuant to proposed Family Law action between the first and second Respondents.
Submissions on this basis will be forwarded to the Courts today."
Submissions have been received by the Court which simply state that the funds should be held pending the resolution of the Family Law action.
The evidence is sufficient in relation to the consent of the trustees (the solicitors for Ms English) and for the making of all relevant orders. We refer to the affidavits filed (which have been served) of Mr Dennis Patrick Grogan of 9 December 2010, 31 January 2011 and 11 February 2011 and the affidavit of service of Mr Joshua English (the son of Mr and Ms English) of 9 February 2011. In order that Mr English have an opportunity to approach the Family Court to make an application in relation to Ms English's share of the proceeds of sale, a variation will be made to order 2(d) of the orders that we purported to make on 30 November.
The Official Trustee's letter of 21 March 2011 gives rise to one technicality. The orders made against Mr English on 12 March 2010 were orders 3, 4 and 8. The principal purpose of those orders was to be steps whereby Perpetual could realise its security. To that extent, s 58(5) Bankruptcy Act left Perpetual free to obtain them without any prior leave. However it is possible that, for instance, the order for costs in Order 8 could give rise to a provable debt if Perpetual were to elect not to satisfy it out of the proceeds of sale of the property. As we have said, the trustee in bankruptcy had notice of the proceedings, so the failure to grant leave to proceed will not have caused any difficulty of substance. Nonetheless, to put the validity of the orders beyond argument it is desirable to grant leave nunc pro tunc to bring or continue the proceedings against Mr English. The orders pronounced on 30 November 2010 were all by way of Perpetual enforcing its security, and so did not need any leave under s 58. If as we propose the leave under s 58 is granted nunc pro tunc concerning the entire proceedings, that leave will in any event cover the orders pronounced on 30 November 2010.
The orders that we would make in the appeal are the granting of the leave nunc pro tunc, and the orders purported to be made on 30 November 2010 with one variation to order 2(d):
"2(d) An order that the trustees pay the net proceeds of the sale, after payment of the fees, expenses and legal costs referred to in order 2(c) above, to the appellant and the second respondent (Ms English) in equal shares and that the payment to Ms English not be made for a period of 28 days after receipt of the funds and the despatch to Mr English and any lawyer known by the trustees to be acting for him of the trustees' intention to distribute the funds to Ms English."
Thus the formal orders we propose are:
A. In the appeal:
1. A declaration that the Mortgage has full force and effect as against the interest of the first respondent in the property known as 36 Brisbane Road, Castle Hill and being the whole of the land comprised in folio identifier 4/13841 (Property) (as now vested in the Official Trustee) in respect of all moneys outstanding under the Loan Agreement and/or under the Mortgage and further interest, charges and costs payable thereunder.
2. An order that, if contracts for the sale of the Property by the second and third respondent are not exchanged by 15 June 2010, on terms that are satisfactory to the Appellant, then effective from 16 June 2010:
(a) Trustees for sale be appointed in respect of the Property under section 66G of the Conveyancing Act 1919 (NSW) and that the Property be vested in such Trustees, to be held by such trustees upon a statutory trust for sale under Division 6 of Part IV of the Conveyancing Act 1919 (NSW);
(b) The appellant and the second and third respondent shall use their best endeavours to agree within 14 days upon the identity of the trustees referred to at 2(a) and failing agreement the proceedings shall be relisted for the appointment of trustees by the Court.
(c) An order that the trustees' fees, expenses and legal costs be paid out of the proceeds of the sale.
(d) An order that the trustees pay the net proceeds of the sale, after payment of the fees, expenses and legal costs referred to in order 2(c) above, to the appellant and the second respondent (Ms English) in equal shares and that the payment to Ms English not be made for a period of 28 days after receipt of the funds and the despatch to Mr English and any lawyer known by the trustees to be acting for him of the trustees' intention to distribute the funds to Ms English.
3. Liberty for the parties or any trustee appointed, to restore the proceedings on 3 days notice to seek further orders.
4. Grant leave nunc pro tunc to the appellant to bring and continue these proceedings against the First Respondent.
B. Pursuant to the amended notice of motion dated 13 December 2010:
1. The Court appoints Dennis Patrick Grogan and Lewis James Webb as trustees for sale of the property under section 66G of the Conveyancing Act 1919 (NSW) ("the trustees").
2. The trustees have possession of the property the subject of the proceedings.
3. The trustees have leave to issue a writ of possession in respect of the property.
4. The costs of this n N otice of M motion be costs in the cau u se.
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