Rainima v G E Mortgage Solutions Ltd

[2011] NSWCA 355

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Rainima v G E Mortgage Solutions Ltd [2011] NSWCA 355

Hearing dates:

14 November 2011

Decision date:

14 November 2011

Before:

Handley AJA

Decision:

(1) The time for filing the summons for leave to appeal is extended to 5 October 2011.

(2) Order that para 4 of the notice of motion be dismissed.

(3) The applicant is to pay the costs of the respondent of the hearing today.

[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:

PRACTICE & PROCEDURE - interlocutory injunction pending hearing of appeal - mortgagee's sale - no question of principle.

Legislation Cited:

Bills of Exchange Act, s 89

Cases Cited:

Deane v The City Bank (1904) 2 CLR 198

Category:

Principal judgment

Parties:

A - Losalini Rainima
R - GE Mortgage Solutions Ltd

Representation:

A - Ms B Hancock as McKenzie friend
R - Ms Bearup
R - Gadens Lawyers

File Number(s):

2010/23373

 Decision under appeal 

Date of Decision:

2011-11-14 00:00:00

Before:

Fullerton J

File Number(s):

2010/23373

Judgment

1. HIS HONOUR: On 1 July this year Fullerton J entered judgments for possession of the subject property and for the mortgage debt of $491,607.80 against the first and second defendants.

1. A notice of intention to appeal was filed on 27 July and a summons for leave to appeal on 5 October. The latter challenged the decision below for ostensible bias and on the merits. A notice of motion for a stay of execution on the judgment for possession had been dismissed by Hoeben J on 13 September 2011. Before me today is a further notice of motion filed on 10 November in which the applicant seeks inter alia an extension of time for filing of the summons for leave to appeal. This was stamped on 5 October 2011 but effectively was filed on 4 October. This involved a delay of one day at the most. There was no suggestion of prejudice and I will cure any procedural default in due course.

1. The applicant has sought leave to appeal presumably on the basis that the orders below were interlocutory. They appear to be final in form and I will treat the case as if the applicant has an appeal as of right from the decision of Fullerton J. I will make that assumption in the applicant's favour.

1. The notice of motion also sought other relief. It appears from the affidavit of the applicant, sworn 10 November, that the subject property is to be auctioned next Wednesday, 16 November. In those circumstances order 3 in the notice of motion seeks a stay of the orders below and order 4 in the alternative, seeks an order that the sale of the property be stayed. There is no point in staying the orders. The order for possession has been executed and the plaintiff is not attempting to execute the judgment for the mortgage debt.

1. Order 4 effectively seeks an injunction, pending the hearing of the application for leave to appeal, restraining the sale of the property. I will therefore treat the notice of motion, insofar as it seeks to stop the auction sale, as an application for an interlocutory injunction pending the hearing of the application for leave to appeal.

1. The underlying defence of the applicant and her husband was that in February 2010 she tendered to the mortgagee a document described as a promissory note which was accepted by the mortgagee and discharged the mortgage debt. The document, which is annexed to the submissions of the mortgagee is for a sum of $440,000 and was signed by the applicant. Her signature was witnessed by a Justice of the Peace. It has had a postage stamp attached to it and may have been stamped in a post office. On its face it is not an unconditional promise to pay and it is probably not a promissory note within the definition in s 89 of the Bills of Exchange Act . However even if it were it amounts to no more than a promise by one or two existing debtors to pay the existing debt. It is not legal tender for the debt and there is no evidence that it was ever accepted by anyone with authority as an accord and satisfaction in conditional or unconditional payment of the debt.

1. Fullerton J refused to allow the filing of a defence and counter-claim out of time. Although other matters are referred to in the defence in substance it was based upon the tender and acceptance of the so called promissory note.

1. An applicant who seeks an interlocutory injunction pending the hearing of the proceedings, in this case the appeal or summons for leave to appeal, must establish a number of matters: (1) That there is a serious question to be tried. (2) That the applicant will suffer irreparable damage if an injunction is not granted. (3) That the balance of convenience favours the injunction and (4) that the applicant is in a position to and does offer the Court and the respondent an undertaking as to damages.

1. Ms Bearup, counsel for the respondent, with commendable frankness informed the Court that the mortgage debt does not appear to be at risk and there is sufficient equity to cover it at the present time. The applicant will finally lose her home if the property is sold to a genuine purchaser and to that extent she will suffer irreparable damage. A major problem facing the applicant is that no undertaking as to damages is offered and even if it were, on the face of things, it would appear to be worthless and no security for the undertaking is offered.

1. There may be some basis for an appeal on the ground of ostensible bias. The fundamental difficulty is that a successful challenge ordinarily results in a new trial. However the Court will not order a new trial if that would be a futility and the result a foregone conclusion. This was established by the decision in Deane v The City Bank (1904) 2 CLR 198.

1. The defence turns essentially, directly or indirectly, on the effect of the tender of the so called promissory note. An argument that its acceptance by a subordinate employee discharged the mortgage debt and left the plaintiff without rights against Mr Rainima and without security has only to be stated to see how flimsy it is. There are references in the document to underlying securities for the note said to be held by the Treasury of the United States in Washington and the Treasury of the Commonwealth in Canberra. These references do not encourage any confidence in the existence or value of such securities and the figures that have been put on them at various times are literally incredible.

1. The existence of assets of that nature in the possession or power of the mortgagors would have enabled them to pay off this mortgage years ago and avoid all this litigation. There has been no subsequent tender by bank cheque or legal tender and the Court is entitled to be extremely sceptical about the existence or value of the so called security. Although the mortgagee retained the so called promissory note, there is no reason to suppose that this has caused any loss to the applicant.

1. A number of payments were made under the mortgage but they have long since ceased. The so called promissory note acknowledged the mortgage debt as did the earlier payments. In these circumstances there is every reason for concluding that a new trial would be a futility and the inevitable result another judgment for possession and the mortgage debt. In these circumstances, whatever the merits of the complaints about the hearing below, the applicant has not established a prima facie case for a new trial.

1. For that reason and because there is no offer of an undertaking as to damages, the application to restrain the auction sale on 16 November should be refused.

My orders are:

(1) The time for filing the summons for leave to appeal is extended to 5 October 2011.

(2) Order that para 4 of the notice of motion be dismissed.

(3) The applicant is to pay the costs of the respondent of the hearing today.

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Decision last updated: 21 November 2011