Prime Capital Securities Pty Ltd v Fitch

[2024] ACTSC 47

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Prime Capital Securities Pty Ltd v Fitch

Citation: 

[2024] ACTSC 47

Hearing Date: 

27 February 2024

Decision Date: 

27 February 2024

Before:

McCallum CJ

Decision: 

(1)    I decline to determine the application ex parte.

(2)    I adjourn the proceedings to 10:00am tomorrow morning before me.

Catchwords: 

CIVIL LAW – JURISDICTION, PRACTICE AND PROCEDURE – application for the extension of a caveat – where application brought late and ex parte – where debt claimed by the lender not proved by sworn evidence – absence of any explanation for the lateness of the application – discussion of the court’s expectations where such an application is brought late and ex parte

Legislation Cited: 

Evidence Act 2011 (ACT), s 160

Land Titles Act1925 (ACT), s 107

Parties: 

Prime Capital Securities Pty Ltd (ABN 64 623 195 871) ( Plaintiff)

Jenna Clare Fitch ( First Defendant)

Julie Theresa Fitch (Second Defendant)

Representation: 

Counsel

T Barrington-Smith (as agent) ( Plaintiff)

Solicitors

QMB Lawyers ( Plaintiff)

File Number:

SC 76 of 2024

McCALLUM CJ:       

1․Prime Capital Securities Pty Ltd is the lender under a deed of loan security and guarantee in which the borrower is a company that is now deregistered and the guarantors are Ms Jenna Fitch and Ms Julie Fitch. 

2․The loan to the company has been enforced by the sale of the primary security property, leaving a shortfall in the order of $89,000.  Prime Capital now seeks to recover the remainder of the debt from the guarantors and, to that end, has lodged a caveat over a separate property, to which I will refer as the guarantor property.  The guarantor property was not specified in the loan documents as a security property.  Prime Capital relies on a clause in the deed which provided that the guarantors charged the amount owed “with all other property” or words to like effect.

3․A caveat was lodged on the title of the guarantor property by Prime Capital on 19 January 2024. The property in question is owned only by the second defendant, Ms Julie Fitch. She lodged a notice to caveator of application by registered proprietor for lapsing notice pursuant to s 107(2)(a) of the Land Titles Act1925 (ACT). That notice is stamped as having been received by the Deputy Registrar General on 9 February 2024.

4․Section 107 of the Act requires that the Registrar General give notice of such a notice to the caveator and provides that, upon the expiration of 14 days from service of the notice on the caveator, the caveat will be removed from the register.

5․By application filed in the registry today, the lender, Prime Capital, seeks an extension of the caveat.  The application was brought ex parte. 

6․On the analysis most favourable to the lender, the period of 14 days from service of the lapsing notice is due to expire either tomorrow or very shortly thereafter.  Mr Barrington-Smith, who appears as agent for the solicitors for the lender, QMB Lawyers, based in Brisbane, was unable to provide any explanation for the lateness of the application other than that there are “different practices in different jurisdictions”.  The application accordingly raises an important issue as to the expectations of the court when such applications are made. 

7․First, if an application is brought ex parte, this Court expects that the basis for the application for interlocutory relief will be proved on affidavit.  The affidavit in support of the present application explained the circumstances leading up to the lodging of the caveat but did not prove the current outstanding indebtedness claimed by the lender, nor did it depose to any defence that, to the lender’s knowledge, might be raised by Ms Fitch.

8․It is axiomatic that, when an application is made ex parte, the moving party is obliged to inform the court of any matter of which the court should be aware that might preclude the granting of interlocutory relief.  The effect of circumstances I have described, particularly including the fact that Mr Barrington-Smith appears only as agent for the firm that ordinarily does the litigation for Prime Capital and the lateness of the application, is that Mr Barrington-Smith is not personally in a position to give the Court that assurance.  In saying so, I make no criticism of him, but rather of the manner in which this application has been brought forward by Prime Capital.

9․Secondly, there is an issue which, again, it was difficult for the Court to resolve as to when notice of the second defendant's notice to have the caveat lapse was served on the lender.  It appears that the applicable clause of the loan deed is clause 12.4, which provides that any notice posted will be deemed served on the earlier of five days after posting or when received in the ordinary course of post.  However, separately, there is a provision as to notices sent by electronic transmission or email, which provides that such notice will be deemed served on conclusion of transmission.

10․In accordance with s 160(2) of the Evidence Act 2011 (ACT), the existence of that clause in the agreement overrides the application of s 160(1) of the Act, which creates an evidentiary presumption as to the timing of receipt of an article sent by prepaid post. The difficulty is that the evidence by which it was sought to prove that the notice was not served any earlier than five days after posting did not adequately prove that matter. The application rested on an email from general counsel at Prime Capital to a lawyer at QBM Law stating, “I am advised that Dentons’ agent collected the notice from the post office on 14 February.”

11․It was asserted on that basis that Prime Capital needed to obtain court orders and notify Canberra Land Titles by Wednesday, 28 February 2024.  The correctness of that assertion cannot be tested.  As I have indicated, each of these difficulties is compounded by the absence of a contradictor on the present application, which is a direct result of the lender’s decision to move ex parte, without notice to the registered owner of the property.

12․In those circumstances, Mr Barrington-Smith has asked that the proceedings be stood over to tomorrow morning so that further evidence can be provided and so that Ms Fitch can be given notice of the making of the application.  I am prepared to allow that opportunity, particularly in circumstances where Mr Barrington-Smith informs me of an apprehension that different practices in different jurisdictions may have informed the approach taken by Prime Capital.

13․I would, nonetheless, wish to make it clear for future reference the approach this Court expects where an ex parte application is brought by a lender to continue to constrain the registered proprietor of real property from dealing with that property as she sees fit.   

14․My concern about the application is further compounded by my consideration of the contents of Exhibit CC7 to the affidavit relied upon in support of the application, which is a loan statement from the date of drawdown to the date when the unpaid balance of around $89,000 was identified.

15․At a glance, it appears from that document that the very first accrual of interest occurred less than two weeks after settlement of the loan, but that interest then accrued at the higher rate for what appears to be a whole month, even though the period for which payment was to be made on that date was less than a month.  If I am mistaken about that, it remains the fact that the balance asserted in that document is not proved on oath.  That in itself is sufficient reason to decline the relief sought today.

Orders

16․For those reasons, I make the following orders:

(1)I decline to determine the application ex parte.

(2)I adjourn the proceedings to 10.00 am tomorrow morning before me.

I certify that the preceding sixteen [16] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice McCallum

Associate:

Date: