Poole v Hargraves Secured Investments Ltd

[2013] NSWCA 69

Court of Appeal

New South Wales

Case Title:

Poole v Hargraves Secured Investments Ltd

Medium Neutral Citation:

[2013] NSWCA 69

Hearing Date(s):

25 March 2013

Decision Date:

25 March 2013

Before:

Ward JA

Decision:

Application for stay dismissed.

[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:

EQUITY - application seeking stay of auction by mortgagee

Cases Cited:

Adeels Palace Pty Ltd v Moubarak [2009] NSWCA 130
Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685
Harvey v McWalters (1949) 49 SR (NSW) 173
Inglis and another v Commonwealth Trading Bank of Australia (1971-1971) 126 CLR 161

Category:

Interlocutory applications

Parties:

Barbara Jean Poole (First Applicant)
Peter Henry Poole (Second Applicant)
Hargraves Secured Investments Ltd (Respondent)

Representation

- Solicitors:

Solicitors:
Hargraves Solicitors (Respondent)

First Applicant in person (also representing Second Applicant)

File Number(s):

13/086656

Decision Under Appeal

- Before:

Garling J

- Date of Decision: 

21 December 2012

- Citation:

Hargraves Secured Investments Ltd v Poole [2012] NSWSC 1612

- Court File Number(s):

11/359831

JUDGMENT (EX TEMPORE)

1. HER HONOUR: This is an application that has been brought by a notice of motion filed on 21 March 2013 by Mr and Mrs Poole seeking relief against Hargraves Secured Investments Limited in the nature of a stay of certain auctions of property that have been scheduled to occur in the near future, pending the hearing of an appeal that Mr and Mrs Poole seek to bring from a judgment of Justice Garling in December last year.

2. That decision was to dismiss a notice of motion seeking a stay of a writ of possession and consent judgment in relation to the properties the subject of the now proposed auction sales. It is necessary for Mr and Mrs Poole to obtain leave to appeal from his Honour's decision. A summons seeking leave to appeal, albeit unsigned, appears in the white folder that has been filed that is headed "White Folder Supporting Summons Seeking Leave to Appeal."

3. The matter came before his Honour in December last year and was of some urgency at that stage. His Honour's judgment sets out the factual background and history of the proceedings and notes that the application for the stay was related to various allegations made by Mr and Mrs Poole in relation to the non-compliance or otherwise by the respondent with a Deed of Settlement and Release that had been entered into in relation to the properties in question.

4. His Honour was not prepared to grant a stay for the reasons therein set out. In so coming to that decision, his Honour referred to evidence as to certain wind farm proposals in relation to one of the properties. In his Honour's assessment, those were:

   "Nothing more than prospects and that there was little definite or certain about them and no material which suggested that by an identified date there would be a sufficient re-arrangement of their legal affairs that would give prospect of a payment out to Hargraves of the debt owing."

5. The application that has been made before me for a stay is on the basis put by Mr and Mrs Poole that there is no argument by them as to the right of Hargraves to sell the properties but they have a dispute as to the manner in which Hargraves has advertised and/or marketed at least one of the properties (called "The Rangers") and as to the manner in which and timing in which the sale of that property is to be conducted.

6. There are two properties scheduled for auction this Thursday, 28 March. Those properties are in or close to Coonabarabran. The particular property that is the subject of the wind farm prospects is not scheduled for auction until 4 April.

7. Mrs Poole has deposed to a concern as to the "recklessness" of the way in which the sale of the property scheduled for auction on 4 April has been conducted. There are allegations of there being a criminal offence in relation to the sale/marketing of the property. Reference is made in Mrs Poole's affidavit to the experience of the solicitor for the respondent in the energy industry or wind farm industry (as something said to be relevant to the conduct of Hargraves in relation to the sale(s)).

8. Allegations of criminal conduct are serious allegations to be made and would need to be properly particularised. Similarly, if the allegations extend to the conduct of the legal practitioners in relation to the sale, then again they would be very serious allegations and would need to be properly particularised.

9. Mrs Poole submitted that there was no argument that Hargraves had the right to sell the properties in accordance with the consent judgment or in exercise of its right of possession as mortgagee. There appears to be no doubt that there are amounts outstanding. The complaint is a complaint as to the manner of exercise of the rights in that regard.

10. There was some evidence, by affidavit sworn 24 March 2012, of Mr Mulquiney (the solicitor for Hargraves) as to the opinion of the real estate agents involved in the sale. I place little weight on that material in circumstances where the basis on which the agent's opinions have been formed is not clearly stated in the correspondence relied upon. That is not a criticism of the respondent in relation to the preparation of material in a short time frame for this application but simply to note that I have concerns as to what weight if any could be placed on those opinions.

11. Nevertheless, Mrs Poole herself puts to me by way of submission that the property market is a market in which the sale price for land other than land with wind farm prospects is diminishing (and that the property for land with wind farm prospects is not diminishing or is increasing).

12. The complaint made in that regard is that Hargraves is proposing to sell the land at Coonabarabran (in a diminishing market) first rather than the land that Mrs Poole believes would be more likely (if marketed properly) to be sold for a sum that would enable the payment out of moneys owing to Hargraves.

13. I have considered whether the appropriate manner in which to deal with the notice of motion was to stand it over to be heard at the same time as an expedited application for leave to appeal from his Honour's decision, but the timing of the first of the scheduled options has made that impracticable.

14. In order to obtain a stay of the orders that were made by his Honour it would be necessary for the appellants to establish that if leave to appeal were to be given there was a reasonably arguable basis for the appeal, and that the appeal would be rendered nugatory if the relief were not granted. I refer to the judgments in Adeels Palace Pty Ltd v Moubarak [2009] NSWCA 130 and Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 in which the test to be applied when seeking a stay of a judgment in those circumstances was set out (in summary, whether there is a reasonable basis or arguable grounds for the appeal; whether there is a significant risk that otherwise the appeal will be reduced nugatory; and whether a proper basis has been demonstrated for a stay that will be fair to all parties).

15. I am not satisfied that the outcome of an appeal, if leave is to be granted, would be rendered nugatory by a stay of the orders made by his Honour in circumstances where the complaint that is made is a complaint that goes, not to the sale of the properties as such, but to the manner in which the properties have been advertised. If the mortgagee is behaving in the fashion adverted to or alleged by the Pooles, that would give rise to a potential claim for damages against the mortgagee once the loss was identified. In circumstances where it is conceded that the real estate market is diminishing, there must be balanced the position of the mortgagee. Its security would be likely to be eroded by ongoing delay in the sale of the properties. I have had regard also to the history of the matter, as far as I can glean that, from his Honour's reasons.

16. I also note the authorities (Inglis and another v Commonwealth Trading Bank of Australia (1971-1971) 126 CLR 161; Harvey v McWalters (1949) 49 SR (NSW) 173) that deal with the circumstances in which a mortgagor seeking to restrain the exercise of a mortgagee in right of its exercise of the power of sale may be required to pay or provide security for the debt.

17. I have concluded that the stay should not be granted and I therefore dismiss the application brought by notice of motion filed on 21 March 2013.

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