Peterson v O'Shea - [2006] SADC 50

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application for Stay of Proceedings)
PETERSON v O'SHEA AND ORS
[2006] SADC 50
Judgment of His Honour Judge David Smith
11 May 2006
PROCEDURE
Plaintiff in this action claims in Detinue and Conversion in respect of chattels which were on land which was the subject of a mortgagee sale – defendants purchased the land and later the chattels from the mortgagee – same mortgagee instituted action in Supreme Court against plaintiff – at issue in the said action is the validity of the exercise of a power of sale under the mortgage – likely to be a duplication of issues before both courts - discussion of principles applicable to an application for stay to ensure the orderly determination of issues in controversy – held District Court action stayed pursuant to Rule 3.01 on conditions on the basis that to permit action herein to proceed at the same time as the Supreme Court action would constitute an abuse of process and would not be conducive to an orderly determination of the issues in controversy.
In District Court action defendant sought summary dismissal of plaintiff’s claim – discussion of principles applicable to an application for summary judgment – held application refused.
Peterson v O'Shea Unreported, DCSA, Smith DCJ, 7/03/06; Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corporation (1973) 6 SASR 240; General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125; Bellas v Kipouros (1974) 8 SASR 418; Wicklow Enterprises Pty Ltd v Doysal Pty Ltd (1985) 124 LSJS 225; Settlement Wine Co Pty Ltd v National and General Insurance Co Ltd (1988) 146 LSJS 150; Allianz Australia Insurance Ltd v National Jet Systems [2004] SASC 438; Addstead Pty Ltd (In Liq) v Liddan Pty Ltd (1997) 70 SASR 21; Thomas v Thomas [2000] SASC 408, considered.

PETERSON v O'SHEA AND ORS
[2006] SADC 50
Introduction

In this matter on the 4^th May 2006 I heard argument on the defendants’ application for summary judgment. I made the following orders:
·Application for summary judgment dismissed; and
·Pursuant to Rule 3.01 of the District Court Rules action stayed in the interest of justice.
I intended that the stay be conditional and indicated that I would fashion some consequential orders spelling out those conditions. Further, I gave no detailed reasons for my orders. So I now attend to both matters.
The Claims
The plaintiff’s pleaded claim against the defendants, which was instituted on the 13^th February 2006, is:
·Summons in Detinue for return of my goods and damages for conversion as a result of Supreme Court Action 1329 of 2005;
·Injunction to restrain defendants from removal or destruction of my property.
By a Notice for Specific Directions dated the 13^th February 2006, supported by a brief affidavit, the plaintiff sought an interlocutory injunction.
I pause here to set out some background circumstances which emerge from the material put in evidence.
Background circumstances
The plaintiff was the owner of the property the subject of these proceedings at 31 East Terrace, Ceduna. She lives in Ceduna on another property, namely 76 Poynton Street. There were chattels on the East Terrace property. The plaintiff’s bankers took possession of the East Terrace property pursuant to the terms of a mortgage and on the 9^th December 2005 following an auction sold the property to the defendants who are also residents in the township of Ceduna. It is alleged that, notwithstanding being given due notice by the mortgagee to remove the chattels from the property, the plaintiff failed to do so. So again purporting to act pursuant to the terms of the mortgage on the 15^th February 2006 the mortgagee bank sold the chattels to the defendants.
Needless to say the plaintiff did not agree with and opposed these sales. She contends that they were unjustified and illegal. Notably the mortgagee bank is not a party to this action.
The plaintiff has represented herself throughout these proceedings. There were considerable difficulties with the plaintiff’s affidavit evidence in support of her application for an interlocutory injunction. The application was opposed by the defendants. They have contended at all times that they received good title to the chattels and their affidavit evidence supported that contention.
As I understand it the plaintiff’s bankers are currently prosecuting a Supreme Court action against the plaintiff (see Permanent Mortgages Pty Ltd v Jenethea Adeline Peterson – Action No. 1329 of 2005). This action is referred to in the plaintiff’s statement of claim. One of the defendants, Darcy John O’Shea, explained the nature of those proceedings in paragraph 4 of his affidavit sworn on the 6^th March 2006 in the following terms:
The plaintiff had three properties that had all been mortgaged to the same mortgagee, who then proceeded to sell them. The plaintiff is the defendant in respect to possession proceedings over her home at 76 Poynton Street Ceduna. Those proceedings are in the Supreme Court of South Australia. The plaintiff is Permanent Mortgages Pty Ltd (referred to as La Trobe in the document filed on 3 March 2006.) That matter remains in the Supreme Court trial list. During the course of those proceedings the plaintiff sought and was granted an injunction for seven days to prevent settlement of 41 East Terrace. The basis of that application was that there was an incorrect title reference (which has now been corrected) to the Poynton Street property and the matters referred to in the affidavit of Brian Hennig filed in those proceedings. After hearing argument from both parties Judge Withers discharged the injunction preventing settlement of the property and settlement was effected on 8 February 2006.
In that action which is proceeding by way of pleadings as an ordinary civil trial in the Supreme Court the plaintiff has been given leave to file and serve a defence and counterclaim (see order of Master made 13.02.06). Further, in this action in support of her application for an interlocutory injunction the plaintiff filed and served a copy of an affidavit which she swore in the Supreme Court Action. In paragraph 20 of that affidavit the plaintiff deposed as follows:
As to the “sale” of 31 East Terrace, Ceduna, SA which was seized without valid legal documentation the Defendant asks this Honourable Court to restore ownership to the Defendant together with all costs involved in the proceedings, Extra interest, pain and suffering, public humiliation, attempted suicide, and other losses to be quantified.
On the 7^th March 2006 after hearing argument I refused the plaintiff’s application for an interlocutory injunction (see Peterson v O’Shea, Unreported, DCSA, Smith DCJ, 7/03/06).
By Notice for Specific Directions dated 13^th April 2006 the defendants sought Summary Judgment pursuant to Rule 25.04 of the District Court Rules. The defendants relied upon the affidavit evidence adduced by them in answer to the injunction application. The hearing of this application took place on the 4^thMay 2006 After hearing argument as previously indicated, I made the order refusing Summary Judgment and I also ordered a stay of the prosecution of this action.
I now turn to my reasons for those orders and I set out the consequential orders or the conditions of the stay.
I start with the Summary Judgment application.
Summary Judgment
This of course is not an interlocutory application, but is an application for final relief. The following are the parameters:
·The Court has a general discretion as to whether it will allow the summary disposal of an action (see Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corporation[1]).
·This discretion should be exercised with caution (see General Steel Industries Inc v Commissioner for Railways[2]; see also Bellas v Kipouros[3]).
·Summary determination of issues in dispute should only be determined in the clearest of cases. The object of r 25.02 is to facilitate the expeditious disposal of cases in respect of which there is not substantial dispute or in which the nature of the dispute is such that can be resolved readily and speedily in chambers. It should not be used where there are complex issues of law and fact (see Wicklow Enterprises Pty Ltd v Doysal Pty Ltd[4]).
·What needs to be clear is that there is no serious question to be tried so that the matter is amenable to speedy resolution without the need for a trial (see Settlement Wine Co Pty Ltd v National and General Insurance Co Ltd[5]).
·There must be sufficient evidence on all essential matters to enable a full and final determination of the claims (see Allianz Australia Insurance Ltd v National Jet Systems[6]). Generally speaking, the issues must be capable of resolution on affidavit evidence without the necessity of cross-examination of the deponents (see Wicklow[7]).
·Urgency is not an essential pre-requisite. Applications may well be justified even where there is “no apparent urgency” (see Addstead Pty Ltd (In Liq) v Liddan Pty Ltd[8]).
[1] (1973) 6 SASR 240
[2] (1964) 112 CLR 125
[3] (1974) 8 SASR 418 per J Bright at 419
[4] (1985) 124 LSJS 225
[5] (1988) 146 LSJS 150 at 153
[6] [2004] SASC 438
[7] (supra) per King CJ at 226
[8] (1997) 70 SASR 21 per Perry J at 52, 53
With those principles in mind I turn to this case. What emerges from the morass of handwritten documents and submissions put before me by the plaintiff is a plea that her property and chattels at 31 East Terrace were the subject of invalid mortgagee sales and, in the alternative, even if the mortgagee sale of the land was a valid exercise of rights under the mortgage then the sale of the chattels was not, because she was not given adequate notice or opportunity to remove the chattels from the land. Of course the plaintiff’s bankers are not parties to this action and it may be that in any event the defendants received good title to the chattels. So it might follow that any remedy in respect of the sale of them may be against the mortgagee banker.
Notwithstanding that the plaintiff’s documentation is in disarray and there is a lack of any adequately focussed pleading, having regard to the above principles, it would be premature to summarily dispose of the plaintiff’s action at this early stage. There is clearly a substantial dispute. It could not be said of it that at this early time it could be “resolved readily and speedily in chambers”. The facts surrounding it are anything but clear and at this stage there is insufficient evidence on all the essential matters to enable a final determination of the issues.
Accordingly, for the above reasons on the 4^th May 2006, I refused the plaintiff’s application for Summary Judgment. It does not follow from my decision refusing the interlocutory injunction that an application for Summary Judgment must succeed. Different considerations apply.
The Stay
Rule 3.01 of the District Court Rules provides:
The Court may at any time dismiss proceedings which disclose no cause of action known to the law or can not by amendment be made to disclose such a cause of action, or which are frivolous, vexatious or an abuse of the process of the Court and may at any time grant a stay of proceedings where the justice of the case so requires.
(The underlining is mine)
The primary basis upon which I exercised my discretion to stay the prosecution of this action is the fact that it is clear that one if not more of the issues in controversy in this action may be adjudicated upon in the Supreme Court action. It is clear from the authorities that the prospect of that occurring is a proper basis upon which an order for a stay can be made. In the case of Thomas v Thomas[9] Lander J ordered the stay of proceedings in the Supreme Court on the basis that there were proceedings in the Family Court over similar subject matter. At page 8 His Honour said:
It is important, in my opinion, that this matter proceed in an orderly fashion. The parties should not be entitled to use the different jurisdictions for the purpose of tactical advantages and to the disadvantage of the other parties substantive rights.
I was directed to a decision of the Family Court; In the Marriage of Prince (1984) FLC 91-501.
At 79,086 Foggarty J said:
“The purpose of the stay is not to give any preference but to provide for an orderly determination of the issues in controversy. It seems to me that an orderly determination requires the proceedings in the Supreme Court to be heard and determined first. There was a discretionary power in a Court to stay or adjourn a proceeding in that Court to await some future event, such as an adjudication in another Court (see generally The Atlantic Star (1974) AC 438 at p.468; Castantho v Brown & Root (UK) Ltd (1980) 3 All ER 72 (at pp.91-92).”
With respect I agree with his Honour’s observations. In my opinion, this case requires the orderly determination of the various issues raised in the separate jurisdictions.
[9] [2000] SASC 408
Further, it can amount to an abuse of process to prosecute in this Court, an issue, namely the validity of a mortgagee sale, which is apparently headed for adjudication in a superior court, namely the Supreme Court.
The plaintiff in submissions before me on the 4^th May confirmed, what was indicated in her affidavit in the Supreme Court action, namely, that she would be seeking to make the validity of the mortgagee sale of 31 East Terrace, the subject of her counterclaim. It is notable that in the Supreme Court action the plaintiff sought and was granted an injunction which had the effect of delaying the settlement of the sale of 31 East Terrace. It is clear that potentially at least the validity of the mortgagee sale of 31 East Terrace will be an issue in this trial even though the mortgagee bank may not be joined in this action. There appears to be no debate that Permanent Mortgages Pty Ltd, the plaintiff in the Supreme Court action, is the mortgagee banker in respect of not only the East Terrace property but also the Poynton Street property. Further, it is clear that there is a single mortgage agreement in respect of those two properties and another. So as the matter stands, in the Supreme Court action, a determination as to the rights of the mortgagee in respect of Poynton Street has the capacity to impact on whether the mortgagee sale of the East Terrace property was valid. The rights of the mortgagee to dispose of the chattels on the property at 31 East Terrace would be contingent upon the mortgagee banker establishing the right to enter into possession and sell the land.
Though the parties in the two actions are not the same, one of the material issues is, and to allow this action to proceed on its way effectively in tandem with the Supreme Court action, would not be “an orderly determination of the issues in controversy”. Further, to put the defendants to the expense of defending the action in this Court when it seems that one of the central issues is headed for determination in the Supreme Court, is an abuse of the processes of the Court.
So on the above basis I ordered the stay of this action.
Pleadings
The highly unsatisfactory current state of the plaintiff’s pleadings would not by itself justify a stay, after all the action is in its infancy. In any event, such matters would be addressed in the ordinary course as the Masters of this Court, at an appropriate time will subject the action to a supervised battery of orders relating to the filing and service of proper pleadings.
Conclusion
The plaintiff needs to obtain competent legal advice about both the actions in which she is embroiled. There are problems, which she needs to consider, such as whether the parties to this action should include the mortgagee bank. Further, as the actions currently stand there is a prospect that a decision about the validity of the mortgagees action may create an issue estoppel in respect of this District Court action.
It is for the plaintiff to make decisions hopefully on the basis of legal advice as to the conduct of both these actions.
However, in the meantime, in my discretion in the interests of justice, I considered that this action should be stayed. I consider now that it should be stayed until the outcome of the Supreme Court action, or until the difficulties I have foreshadowed are addressed.
For the above reasons, I made the following orders on the 4^th May 2006:
·that the application for Summary Judgment be dismissed; and
·that the action be stayed.
For the above reasons, I now make the following additional or supplementary orders:
·that the stay of the prosecution of this action ordered on the 4^th May 2006 be for:
·a period of six months; or
·to a date not earlier than 14 days after the final determination of the trial of Supreme Court Action 1329 of 2005;
whichever is earlier;
·that upon the expiration of the above order of stay the plaintiff be at liberty to apply to the District Court upon due notice to the defendants for directions as to the further prosecution of this matter and in particular as to pleadings and pre-trial matters generally;
·that costs be reserved; and
·that there be liberty to the parties to apply to speak to the terms of the above orders within 14 days and thereafter that the parties be at liberty to apply generally.