Rams Mortgage Corporation Ltd v Skipworth

[2007] WASC 24

RAMS MORTGAGE CORPORATION LTD -v- SKIPWORTH & ANOR [2007] WASC 24

Link to Appeal :

[2008] WASCA 148

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2007] WASC 24
Case No:	CIV:1509/2006	Heard:	17 & 25 JANUARY 2007
Coram:	EM HEENAN J	Delivered:	7/02/07
No of pages:	39	Judgment Part:	1 of 1
Result:	Stay of execution of Property Seizure Order and the judgment for possession for eight weeks or until further order Liberty to apply Mortgagee's counsel to provide revised undertaking to comply with s 27(3)(b) of Stamp Act Mortgagee's solicitors to remove from Court record all copies of affidavits filed in Family Law Act proceedings without leave being granted for their use on this application Further submissions to be made within 14 days on effect if any of s 133(9) of Bankruptcy Act
Category:	A
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Parties:	RAMS MORTGAGE CORPORATION LTD JEFFREY DONALD SKIPWORTH JANET-JANE TURNBULL SKIPWORTH
Catchwords:	Stay of execution Judgment for possession of land Property Seizure Order Mortgagee's action Claim for time to redeem mortgage Effect of subsequent encumbrances Proceedings under the Family Law Act Whether res judicata or issue estoppel Effect of order under Family Law Act where mortgagee not joined as party Whether payment into court of balance due under mortgage a condition of relief Difference between relief to restrain power of sale and a stay of an order for possession Inadequate stamping of security document Dispute over costs added to mortgage debt Joint tenancy Other joint owner of mortgaged premises fraudulently granting subsequent charges over jointly owned property by forging the applicant's signature Caveators relying upon forged charges to claim subsequent interests in the land Other joint tenant bankrupt Disclaimer of bankrupt's interest by trustee in bankruptcy Effect of disclaimer Need for vesting order under s 133(9) of Bankruptcy Act
Legislation:	Bankruptcy Act 1966 (Cth) Civil Judgments Enforcement Act 2004 (WA) Family Law Act 1975 (Cth) Family Law Regulations 1984 (Cth) Family Law Rules 2004 (Cth) Legal Practice Act 2003 (WA) Oaths Affidavits and Statutory Declarations Act 2005 (WA) Property Law Act 1969 (WA) Stamp Act 1921 (WA) Supreme Court Act 1935 (WA) Trade Practices Act 1974 (Cth) Transfer of Land Act 1893 (WA)
Case References:	330 and Acclaim Holdings Pty Ltd v Vlado Pty Ltd (1989) 1 WAR 128 Adams v Bank of New South Wales [1984] 1 NSWLR 285 Ainsworth v Hanrahan (1991) 25 NSWLR 155 Albion Insurance Co Ltd v GIO (NSW) (1969) 121 CLR 342 Assets Co Ltd v Mere Roihi [1905] AC 176 Australian & New Zealand Banking Group Ltd v Comer (1993) 5 BPR 11,748 Blair v Curran (1939) 62 CLR 464 Bonnard v Perryman [1891] 2 Ch 269 Boscawen v Bajwa [1996] 1 WLR 328 Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282 Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853 Cochrane v Cochrane (1985) 3 NSWLR 403 Commercial Bank of Australia Ltd v Schierholter [1981] VR 292 Commonwealth Bank of Australia v Bouwman [2003] WASC 205 Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311 Commonwealth v New South Wales [2006] FCA 1330 Daniell v Paradiso (1991) 55 SASR 359 Deputy Commissioner of Taxation v Ahern (No 2) [1988] 2 Qd R 158 Elders Trustee & Executor Co Ltd v E G Reeves Pty Ltd (1988) 20 FCR 164 Eltran Pty Ltd v Westpac Banking Corporation (1988) 32 FCR 195 First National Securities v Hegerty [1985] QB 850 Fletcher v Ould Pty Ltd [2003] WASC 226 Frazer v Walker [1967] 1 AC 569 Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245 Ghana Commercial Bank v Chandiram [1960] AC 732 Grose v St George Commercial Credit Corporation Ltd [1991] NSW Conv R 55-586 Gunnion v Ardex Acceptance Pty Ltd [1968] VR 547 Hall v Heward (1886) 32 Ch D 430 Harris v Western Australian Exim Corporation (1994) 56 FCR 1 Hartl v Cowen [1993] 2 Qd R 633 Harvey v McWatters (1948) 49 SR (NSW) 173 Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 Kennedy v General Credits Ltd (1982) 2 BPR 9456 Kia Ora Gold Corporation NL v Washer [1982] WAR 306 Kuligowski v Metrobus (2004) 220 CLR 363 Lewenberg v Direct Acceptance Corporation Ltd [1981] VR 344 Lyons v Lyons [1967] VR 169 Maher v Network Finance Ltd (1986) 4 NSWLR 694 Maher v Network Finance Ltd [1982] 2 NSWLR 503 Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293 Mead Corporation v Carbonless Papers (Australia) Pty Ltd [2002] WASC 237 Mercantile Credits Ltd v The Shell Co of Australia Ltd (1976) 136 CLR 326 Minister for Education v Bailey (2000) 23 WAR 149 Murphy v Abi-Saab (1995) 37 NSWLR 280 National Bank of Australasia v United Hand-In-Hand & Band of Hope Co & Lakeland (1879) 4 App Cas 391 North Kalgurli Mines Pty Ltd v GRD Minproc Ltd [2002] WASC 275 Pearce v Morris (1869) LR 5 Ch App 227 Ramsay v Pigram (1968) 118 CLR 271 Re Bunbury Foods Pty Ltd; Robertson v Nissho Iwai Australia Ltd [1985] WAR 126 Re Francis (1988) 82 ALR 335 Re Holland (1985) 5 FCR 165 Re Juson Pty Ltd (1992) 8 WAR 13 Re Leighton's Conveyance [1937] Ch 149 Re Mercer & Moore (1880) 14 Ch D 287 Re Middle Harbour Investments Ltd [1977] 2 NSWLR 652 Re Tulloch Ltd (1978) 3 ACLR 808 Registrar of Titles v Franzon (1975) 132 CLR 611 Rogers v Resi-Statewide Corporation Ltd (1991) 32 FCR 344 Rogers v The Queen (1994) 181 CLR 251 Rossfreight Holdings Pty Ltd v Unipep Australia Pty Ltd [2002] NSWSC 1074 Sandgate Corporation Pty Ltd v Ionnou Nominees Pty Ltd (2000) 22 WAR 172 Sangora Holdings Pty Ltd v Dunstan (1996) 16 WAR 552 Shevill v Builders Licensing Board (1982) 149 CLR 620 Somodaj v Australian Iron & Steel Ltd (1963) 109 CLR 285 Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 Sullivan v Energy Services International Pty Ltd (2002) 171 FLR 106 Sutherland v Brien (1999) 149 FLR 321 Tasker v Small (1837) 3 My & Cr 63; 40 ER 848 Thompson v Smith (1976) 135 CLR 102 Tropical Traders Ltd v Goonan [1964] WAR 234 Uniflex (Australia) Pty Ltd v Hanneybel [2001] WASC 138 Van Kempen v Finance & Investments Pty Ltd (1984) 6 NSWLR 293 Western Australian Real Estate Custodian Pty Ltd v Chesson [2005] WASC 33 Westfield Holdings Ltd v Australian Capital Television Pty Ltd (1992) 32 NSWLR 194 Westpoint Finance Pty Ltd v Chocolate Factory Apartments Ltd [2002] NSWCA 287;(2002) 12 BPR 22,969 Westpoint Management Pty Ltd v Goakes [2002] WASCA 317 Nil

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : RAMS MORTGAGE CORPORATION LTD -v- SKIPWORTH & ANOR [2007] WASC 24 CORAM : EM HEENAN J HEARD : 17 & 25 JANUARY 2007 DELIVERED : 8 FEBRUARY 2007 FILE NO/S : CIV 1509 of 2006 BETWEEN : RAMS MORTGAGE CORPORATION LTD

Plaintiff

AND

JEFFREY DONALD SKIPWORTH
JANET-JANE TURNBULL SKIPWORTH
Defendants

Catchwords:

Stay of execution - Judgment for possession of land - Property Seizure Order - Mortgagee's action - Claim for time to redeem mortgage - Effect of subsequent encumbrances - Proceedings under the Family Law Act - Whether res judicata or issue estoppel - Effect of order under Family Law Act where mortgagee not joined as party - - Whether payment into court of balance due under mortgage a condition of relief - Difference between relief to restrain power of sale and a stay of an order for possession - Inadequate stamping of security document - Dispute over costs added to mortgage debt - Joint tenancy - Other joint owner of mortgaged premises fraudulently granting subsequent charges over jointly owned property by forging the applicant's signature - Caveators relying upon forged charges to claim subsequent interests in the land - Other joint tenant bankrupt - Disclaimer of bankrupt's interest by trustee in bankruptcy - Effect of disclaimer - Need for vesting order under s 133(9) of Bankruptcy Act

(Page 2)

Legislation:

Bankruptcy Act 1966 (Cth)

Civil Judgments Enforcement Act 2004 (WA)
Family Law Act 1975 (Cth)
Family Law Regulations 1984 (Cth)
Family Law Rules 2004 (Cth)
Legal Practice Act 2003 (WA)
Oaths Affidavits and Statutory Declarations Act 2005 (WA)
Property Law Act 1969 (WA)
Stamp Act 1921 (WA)
Supreme Court Act 1935 (WA)
Trade Practices Act 1974 (Cth)
Transfer of Land Act 1893 (WA)

Result:

Stay of execution of Property Seizure Order and the judgment for possession for eight weeks or until further order

Liberty to apply

Mortgagee's counsel to provide revised undertaking to comply with s 27(3)(b) of Stamp Act

Mortgagee's solicitors to remove from Court record all copies of affidavits filed in Family Law Act proceedings without leave being granted for their use on this application

Further submissions to be made within 14 days on effect, if any, of s 133(9) of Bankruptcy Act

Category: A

(Page 3)

Representation:

Counsel:

Plaintiff : Mr D H Solomon
First-named defendant : No appearance
Second-named defendant : In person

Solicitors:

Plaintiff : Solomon Brothers
First-named defendant : No appearance
Second-named defendant : In person

Case(s) referred to in judgment(s):

Acclaim Holdings Pty Ltd v Vlado Pty Ltd (1989) 1 WAR 128
Adams v Bank of New South Wales [1984] 1 NSWLR 285
Ainsworth v Hanrahan (1991) 25 NSWLR 155
Albion Insurance Co Ltd v GIO (NSW) (1969) 121 CLR 342
Assets Co Ltd v Mere Roihi [1905] AC 176
Australian & New Zealand Banking Group Ltd v Comer (1993) 5 BPR 11,748
Blair v Curran (1939) 62 CLR 464
Bonnard v Perryman [1891] 2 Ch 269
Boscawen v Bajwa [1996] 1 WLR 328
Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282
Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853
Cochrane v Cochrane (1985) 3 NSWLR 403
Commercial Bank of Australia Ltd v Schierholter [1981] VR 292
Commonwealth Bank of Australia v Bouwman [2003] WASC 205
Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311
Commonwealth v New South Wales [2006] FCA 1330
Daniell v Paradiso (1991) 55 SASR 359
Deputy Commissioner of Taxation v Ahern (No 2) [1988] 2 Qd R 158
Elders Trustee & Executor Co Ltd v E G Reeves Pty Ltd (1988) 20 FCR 164
Eltran Pty Ltd v Westpac Banking Corporation (1988) 32 FCR 195
First National Securities v Hegerty [1985] QB 850
Fletcher v Ould Pty Ltd [2003] WASC 226
Frazer v Walker [1967] 1 AC 569
Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245

(Page 4)

Ghana Commercial Bank v Chandiram [1960] AC 732
Grose v St George Commercial Credit Corporation Ltd [1991] NSW Conv R 55-586
Gunnion v Ardex Acceptance Pty Ltd [1968] VR 547
Hall v Heward (1886) 32 Ch D 430
Harris v Western Australian Exim Corporation (1994) 56 FCR 1
Hartl v Cowen [1993] 2 Qd R 633
Harvey v McWatters (1948) 49 SR (NSW) 173
Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
Kennedy v General Credits Ltd (1982) 2 BPR 9456
Kia Ora Gold Corporation NL v Washer [1982] WAR 306
Kuligowski v Metrobus (2004) 220 CLR 363
Lewenberg v Direct Acceptance Corporation Ltd [1981] VR 344
Lyons v Lyons [1967] VR 169
Maher v Network Finance Ltd (1986) 4 NSWLR 694
Maher v Network Finance Ltd [1982] 2 NSWLR 503
Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293
Mead Corporation v Carbonless Papers (Australia) Pty Ltd [2002] WASC 237
Mercantile Credits Ltd v The Shell Co of Australia Ltd (1976) 136 CLR 326
Minister for Education v Bailey (2000) 23 WAR 149
Murphy v Abi-Saab (1995) 37 NSWLR 280
National Bank of Australasia v United Hand-In-Hand & Band of Hope Co & Lakeland (1879) 4 App Cas 391
North Kalgurli Mines Pty Ltd v GRD Minproc Ltd [2002] WASC 275
Pearce v Morris (1869) LR 5 Ch App 227
Ramsay v Pigram (1968) 118 CLR 271
Re Bunbury Foods Pty Ltd; Robertson v Nissho Iwai Australia Ltd [1985] WAR 126
Re Francis (1988) 82 ALR 335
Re Holland (1985) 5 FCR 165
Re Juson Pty Ltd (1992) 8 WAR 13
Re Leighton's Conveyance [1937] Ch 149
Re Mercer & Moore (1880) 14 Ch D 287
Re Middle Harbour Investments Ltd [1977] 2 NSWLR 652
Re Tulloch Ltd (1978) 3 ACLR 808
Re Woo; National Australia Bank v Leroy [2003] FCA 862
Registrar of Titles v Franzon (1975) 132 CLR 611
Rogers v Resi-Statewide Corporation Ltd (1991) 32 FCR 344
Rogers v The Queen (1994) 181 CLR 251
Rossfreight Holdings Pty Ltd v Unipep Australia Pty Ltd [2002] NSWSC 1074
Sandgate Corporation Pty Ltd v Ionnou Nominees Pty Ltd (2000) 22 WAR 172
Sangora Holdings Pty Ltd v Dunstan (1996) 16 WAR 552

(Page 5)

Shevill v Builders Licensing Board (1982) 149 CLR 620
Somodaj v Australian Iron & Steel Ltd (1963) 109 CLR 285
Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217
Sullivan v Energy Services International Pty Ltd (2002) 171 FLR 106
Sutherland v Brien (1999) 149 FLR 321
Tasker v Small (1837) 3 My & Cr 63; 40 ER 848
Thompson v Smith (1976) 135 CLR 102
Tropical Traders Ltd v Goonan [1964] WAR 234
Uniflex (Australia) Pty Ltd v Hanneybel [2001] WASC 138
Van Kempen v Finance & Investments Pty Ltd (1984) 6 NSWLR 293
Western Australian Real Estate Custodian Pty Ltd v Chesson [2005] WASC 33
Westfield Holdings Ltd v Australian Capital Television Pty Ltd (1992) 32 NSWLR 194
Westpoint Finance Pty Ltd v Chocolate Factory Apartments Ltd [2002] NSWCA 287; (2002) 12 BPR 22,969
Westpoint Management Pty Ltd v Goakes [2002] WASCA 317


(Page 6)

1 EM HEENAN J: By an application filed on the afternoon of 17 January 2007, and heard later that same afternoon as an urgent matter in the duty Judge list, the second-named defendant, Mrs Skipworth, sought a stay of execution and other relief in respect of a judgment entered against her and her husband, Jeffrey Donald Skipworth, in this action on 19 September 2006. That judgment ordered the applicant and her husband to deliver up vacant possession of property situated at 15 Park Lane, Kardinya, in the State of Western Australia being Lot 130 on Plan 15954 and being the whole of the land comprised in Certificate of Title Volume 1774, Folio 420. Mr and Mrs Skipworth are registered as the proprietors of an estate in fee simple in this land and the mortgage of the property to the plaintiff is a first registered mortgage by them both as joint tenants.

2 That judgment was entered in favour of the plaintiff, RAMS Mortgage Corporation Ltd ("RAMS"), in default of appearance. The action had been commenced by a specially endorsed writ issued 19 May 2006. RAMS sought only an order for possession of the land as a result of alleged defaults by the applicant and her husband in the due payments of instalments under their mortgage. Significantly, as will be explained later, the plaintiff mortgagee did not seek and did not obtain, by the judgment, any order for the payment of money due under the mortgage or at all.

3 This means that the obligation to pay moneys and interest under the terms of the mortgage continues without having merged in the judgment - and the mortgagor/mortgagee relationship also continues - cfShevill v Builders Licensing Board (1982) 149 CLR 620. Because the action sought an order for possession of land by a mortgagee, the provisions of RSC O 62A applied and it was necessary for the plaintiff mortgagee to seek and obtain leave to enter judgment in default and such leave was granted by the order of a Registrar on 19 September 2006.

4 For similar reasons it was necessary for the plaintiff to seek and obtain leave to issue an order for possession (now under the Civil Judgments Enforcement Act 2004 (Cth) known as a Property Seizure Order) of the subject land before the judgment could be executed and that was also done, leave being granted by order of the Principal Registrar on 30 November 2006 to issue to the Sheriff an order for the recovery of possession of the subject land. The property seizure order was due to be executed by the Sheriff on 18 January 2007, that is the day following the urgent application for relief to stay that order for possession. To preserve the subject matter of the litigation, and to allow the plaintiff mortgagee to put on evidence in support of the oral submissions made by its counsel in

(Page 7)

opposition to the relief sought, I granted an order in the nature of an injunction staying enforcement of the property seizure order pending the further hearing and determination of this application. That hearing occurred on 25 January 2007 and I then reserved my decision but extended the order staying execution pending my decision.

5 Due, no doubt, to the applicant's lack of legal qualifications and her inability to obtain professional legal advice or representation, the documents which she has filed on the present applications are, in their form and title, irregular. But no point has been taken that these irregularities affect the nature of proceedings or prevent the very real issues which have arisen from being identified and addressed. The applicant, Mrs Skipworth, has described herself in these applications as "plaintiff" and has named RAMS as "defendant" although, in the action it is RAMS who is the plaintiff and it is Mrs Skipworth, together with her husband who are both defendants. Mrs Skipworth's husband has not been named as a party to this present application and has taken no part in it. From the evidence, however, it is apparent that he was declared bankrupt on 12 April 2006 and that later on 11 October 2006 his trustee in bankruptcy formally disclaimed any interest which the bankrupt had in the subject land at Kardinya - pursuant to s 133(1) of the Bankruptcy Act 1966 (Cth).

6 Accordingly, I consider I should return to the proper formulation of the proceedings which casts RAMS as plaintiff and both proprietors of the land as defendants but, at the same time, record that Mrs Skipworth did not purport to bring the application on behalf of her husband and that no person appeared, or was represented for his former interest.

7 Although the judgment of 19 September 2006 for possession of the subject land was entered in default of appearance, the record of proceedings before the learned Registrar shows that Mr and Mrs Skipworth were present at the initial hearing of that application on 12 September 2006, that the Registrar then adjourned the proceedings to allow them to seek legal advice or representation, and that at the adjourned hearing on 19 September 2006 when judgment was eventually entered, Mr Skipworth was present in person, although not legally represented and not having entered or sought to enter any appearance or defence to the proceedings or to file any affidavit or other evidence in opposition to the plaintiff's claims.

8 The property at 15 Park Lane, Kardinya comprises a suburban lot upon which is constructed a brick and tile home with three bedrooms,

(Page 8)

other rooms and bathroom and surrounding garden, all of which are said to be in a good standard of condition and repair. The market value of the land estimated by advisors to the plaintiff mortgagee in mid-2006 was thought to be in the region of $450,000, although Mrs Skipworth estimated that, with recent appreciation in the value of land in the metropolitan area and on the basis of other sales in the area, it was more likely to be worth something in the region of $530,000 on the current market. The amount of principal due under the mortgage was $170,000 and the plaintiff has sworn that arrears of interest and costs which it is entitled to debit to the mortgage debt bring the current balance outstanding to approximately $200,000. The figure includes arrears due to 19 January 2007 of $38,443.89 of which $20,525.78 comprises legal fees which RAMS has charged to the mortgage debt. On either view of the current market value of the land there is more than sufficient value to satisfy the mortgage debt in the event of a compulsory sale and the plaintiff does not suggest that there is any imminent peril that it may not be able to recover fully the money due to it in the event that it enforces its security by sale.

9 By her application of 17 January 2007 Mrs Skipworth has formulated, in her own way, the orders which she is seeking on this application. In summary she seeks orders that:

1. An injunction be granted against the plaintiff restraining it from exercising its purported rights as mortgagee to proceed with any seizure or sale of the subject land on the basis that the property is the subject of a matrimonial cause which is held by the "registered proprietor" on a constructive trust.

2. That the plaintiff mortgagee be restrained from entering, dealing or seizing the above named property of the applicant and her family.

3. That the Sheriff be restrained from entering, dealing with or seizing the property.

4. That she and her husband be allowed to exercise the right of redemption for the mortgage conferred by s 56 of the Property Law Act 1969 (WA).

5. That she be granted the right to repay the amount due on the last statement from the plaintiff (essentially the arrears of principal and interest and other moneys the

(Page 9)

non-payment of which resulted in the default), but not including the whole of the principal outstanding which became due upon default under the acceleration clause in the mortgage.

6. Alternatively, she be granted the right to repay the total amount owing in arrears into a nominated trust account to be held by this Court.

7. In certain alternatives that the proceedings on the judgment be stayed until the further investigation, prosecution or determination of charges for offences alleging fraud by her husband Jeffrey Donald Skipworth, be determined.

8. That the matter be referred to the Magistrates Court of Western Australia under the Family Law Act 1975 (Cth) because of alleged contempt orders made by that Court on 30 August 2006.

9. That this court exercise its equitable jurisdiction to set aside the judgment of possession.

10. Other incidental relief.

10 In substance, therefore, the claim for relief by Mrs Skipworth alleges that the property is the subject of proceedings in the Family Court and is the subject of a constructive trust in the favour of herself and her children. Further, she claims a stay of execution to enable her to repay some, or all, of the arrears or, failing that, to repay the whole of the principal due and, therefore, she is in effect seeking to redeem the mortgage in full. Were she in a position to do so immediately that would be a special reason to stay execution of the judgment and of the order for possession but, for reasons which will appear, it seems that the most that Mrs Skipworth can offer is to redeem the whole of the mortgage within three weeks or so by refinancing the loan through another independent mortgagee who, she claims, is ready, willing and able to provide a loan of $225,000 on the security of a first mortgage by her over the property.

11 It is because of perceived potential difficulties with the implementation of this offer that the plaintiff refuses to grant time and is pressing for immediate execution of the order for possession. Because of the undoubted existence of a right by the mortgagors to redeem at any time up until final sale or foreclosure it is necessary to consider the

(Page 10)

feasibility and imminence of the proposed offer for redemption. Any such consideration, according to the plaintiff, however should only occur if the applicant were to pay into court the whole of the amount owing because, so the plaintiff submits, without such a payment no relief of any kind can or should be entertained - Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161.

12 It is therefore necessary to give more detailed attention to the circumstances which led to the default under this mortgage insofar as they have a bearing on the capacity of the applicant, Mrs Skipworth, to make good her offer of imminent redemption of the whole of the mortgage debt.

13 For some years Mr Jeffrey Donald Skipworth had been in business. The exact details of his business arrangements are not clear, but the appearances are that he conducted business operations on his own behalf and through one or more incorporated companies of which he was a director. To raise money for the business Mr Skipworth mortgaged this and at least one other property. Regrettably, the business failed and, even more regrettably, he ran up very considerable other borrowings in an unsuccessful attempt to save it. These efforts included the purchase of stock or materials from suppliers under contracts which purported to create charges over this land to secure borrowings, advances or his liability for the supply to him of goods and services. According to Mrs Skipworth, as deposed in her affidavits, Mr Skipworth did this without her authority, and, furthermore, he forged her signature on the contracts or documents of loan purporting to create charges over the land to secure the moneys owing. As a result of the collapse of Mr Skipworth's business operations, and the discovery of the many alleged debts which he incurred and his alleged forgeries, Mr and Mrs Skipworth have separated, divorce proceedings have been instituted, Mr Skipworth himself has gone bankrupt and he has, recently, been arrested and charged with having committed a number of alleged offences involving fraud or forgery in relation to these other loans. The evidence of Mrs Skipworth in this regard is that he was due to appear before the Magistrates Court in Perth on 30 January 2007 to face four such charges of fraud, two charges of forgery and two charges of uttering. According to her information and belief, he intended to plead guilty to each of them.

14 Mr Skipworth's efforts to raise finance for his failing business operations had earlier involved him in mortgaging, along with his wife, their family home. As a consequence of that collapse, that other mortgagee, not the present plaintiff, exercised its powers under that mortgage and sold the family home to recover its debt. Any surplus

(Page 11)

moneys available after that sale were consumed to meet the claims of other creditors.

15 The land which is the subject of the present RAMS' mortgage is over a second property owned by the Skipworths. This was, and at present still is, occupied by Mrs Skipworth's elderly parents who are both in frail health - her mother having been recently hospitalised and only discharged home shortly before 17 January 2007. Her concern for her mother's and father's health and welfare during these difficult times provides one of the reasons why Mrs Skipworth left it so late to seek the intervention of the court by her present application; the other principal reasons being her lack of knowledge or experience of legal doctrine and procedure, and the inability to obtain legal representation or advice which has been forced upon her by the family's greatly reduced financial circumstances. It appears that her present initiative in making this application to the court has largely been prompted by advice and assistance offered to her by the sympathetic police officer who had investigated and pursued the claims of fraud against her husband.

16 For present purposes the most significant aspect of this history is that numerous persons who claim to be creditors of Mr Skipworth and of Mrs Skipworth under arrangements which they assert entitle them to secure their debts by charges over property under forged securities granted by Mr Skipworth, have lodged caveats against the title to the Kardinya land to protect unregistered mortgages or charges. There are some 11 such caveators claiming unregistered mortgages or charges over the land ranking subsequent to the RAMS' mortgage which remain against the title. However, some are said to have relinquished their claims. Most, but not all, of those remaining are said by Mrs Skipworth to rely upon charges which she never authorised or ratified and in respect of which her husband forged her signature. Her simple submission is that these are invalid and ineffective and should readily be cleared off the title by the issue of notices to remove the caveats which she has caused to be issued under s 138B of the Transfer of Land Act 1893 (WA). Implicit in this submission, although perhaps not fully appreciated by Mrs Skipworth, is a subsidiary contention that the unauthorised charges granted by Mr Skipworth and upon which he forged her signature, are not even effective to charge his undivided joint interest in the land, so that the caveats could not be sustained in respect of Mr Skipworth's undivided joint interest in the property.

17 Although the evidence is sparse it appears that Mrs Skipworth has had some success in her resort to the s 138B procedure for the removal of

(Page 12)

these caveats and that several of the caveats have recently lapsed as a result of that procedure. She has not been entirely successful, however, because it transpires that in respect of four of the caveats, those caveators applied to this Court ex parte during the Christmas recess period seeking orders for their extension and that during the summer vacation these applications came on for hearing before the duty Judge on an ex parte basis who, as is only to be expected, faced with evidence of a purported charge being granted by both registered proprietors made orders extending those caveats.

18 Mrs Skipworth claims that she had no notice of those applications and that had she known of them she would have sought to oppose the extension of the caveats by evidence that the apparent securities or charges relied upon by the creditors had been forged by her husband in the manner described. She submitted before me that she intends to appeal against those orders but, because they were made ex parte, it is unlikely that any appeal will be necessary because she would be entitled to apply for the matter to be re-listed on notice and to advance her submissions that the securities were forged and, because of that, her further submission that they do not create any caveatable interest in the land.

19 It is important to emphasise that this is no more than a summary of the history or recent events and an identification of the substance of Mrs Skipworth's submissions. It certainly is not any kind of finding that the security or charge documents relied upon by the caveators were actually forged as she alleges or, for that matter, that even if they were, that there would be no caveatable interest arising. Decisions of that kind could only be reached after investigating the facts more fully and after affording the caveators an opportunity to be heard.

20 Nevertheless, this background is enough to reveal that Mrs Skipworth has a good arguable case that any such forged securities are invalid and ineffective to create any interest in the subject land, even an interest in the undivided share in the property held by the alleged forger, Mr Skipworth. There is Australian authority that where a document purports to be mortgage over the entirety of registered land held by joint tenants, and is the result of a forgery of the signature of one of the joint tenants, "it is null and void for all purposes": Rogers v Resi-Statewide Corporation Ltd (1991) 32 FCR 344 per Von Doussa J at 350 - see also Daniell v Paradiso (1991) 55 SASR 359 - where the parties held the land as tenants in common. This is in contrast to the position in England or in relation to general law land which appears to be that a forged charge is a sufficient act of alienation of the forger's interest to

(Page 13)

sever the joint tenancy. Where that occurs a valid equitable charge upon the forger's interest is created: First National Securities v Hegerty [1985] QB 850 per Sir Denys Buckley at 862. The reason for the difference in approach in Australia is that under the Torrens System a joint tenant may mortgage his or her interest in land without thereby severing the joint tenancy. This is because such a mortgage does not convey any estate in the mortgaged land to the mortgagee (as is otherwise the case for general law land), so that the unity of title remains intact: Lyons v Lyons [1967] VR 169 per McInerney AJ at 173 - 181.

21 Nevertheless, there are some caveats lodged against the title to the Kardinya land in respect of unregistered charges or mortgages which Mrs Skipworth accepts derive from loans or advances which she did authorise and in respect of which she acknowledges that she did sign the instrument or document creating the charge. She explains this by saying that, at an earlier stage of their relationship, and in an endeavour to help her husband raise finance to recover from financial troubles which surrounded him, she did agree to certain debts or advances being incurred on the security of the Kardinya property and that certain identified caveators are within this class. However, Mrs Skipworth submits that the aggregate of the amounts owing to these "valid creditors" is something in the order of $20,000 and that, with the financial support of her father, she will be able to repay those creditors in full, in the event that she can refinance the RAMS' mortgage as she proposes in the immediate future.

22 To all this the plaintiff, in substance, responds by submitting that this is none of its concern and that unless immediate tender is made of the whole of the present mortgage debt it should be entitled to proceed unobstructed to exercise all or any of its powers under the mortgage and, in particular, that it should be entitled to enforce a regularly obtained judgment for possession of the subject land in circumstances where there is no challenge to the validity of its mortgage, the finality of the judgment for possession, or the existence of a continuing default under the mortgage.

23 The plaintiff also submits that it is not concerned with the fate or the validity of the claims of the various caveators because any interests which they may have are subsequent to its own registered mortgage and that it, as a first mortgagee, is in a position to exercise all of its powers under the mortgage, including the power of sale, despite the existence of, or disputes regarding, claims of subsequent alleged encumbrancers.

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24 Subject to those major preliminary submissions, the plaintiff also submits that any resolution of the almost inevitable disputes which can be expected to arise from assertions that the caveators' claims are not enforceable will take time to resolve, at least in respect of those caveats which were the subject of the ex parte orders extending their operation made recently. Even if Mrs Skipworth may be correct in claiming that she is entitled to have most of those caveats cleared off the title, and that she is in a position to pay out those creditors whom she admits do have valid charges against the land, the plaintiff, as a mortgagee exercising its powers, submits that it should not be restrained from proceeding immediately to exercise its remedies under the mortgage including taking possession and, as the next foreshadowed step, proceeding to a sale of the property in the exercise of the statutory power of sale under s 108 of the Transfer of Land Act.

25 In further development of this latter submission, the plaintiff contends that no relief of any kind can, or should, be granted to the present applicant unless she pays into court or otherwise secures to the plaintiff's satisfaction the whole of the $200,000 or so which the plaintiff has sworn is presently due and owing under the mortgage in circumstances where neither the validity of the mortgage, nor the propriety of the mode of exercise of the mortgagee's powers is or could be questioned and, further, where there is no allegation of any countervailing claim under s 52 of the Trade Practices Act 1974 (Cth) of a nature going to the root of the mortgagee's claims. In short, the plaintiff's position is that the inescapable price of any injunction to protect the applicant's interest in the Kardinya land, or to stay execution under the judgment for possession, is payment into court of the whole of the mortgage debt.

26 The question then turns to the amount of the debt claimed to be due under the mortgage. As already noted, the principal outstanding is agreed to be approximately $170,000. In addition, arrears of interest totalling approximately $15,000 are claimed to be due and are also admitted by Mrs Skipworth. However, she disputes the plaintiff's claim that a further sum of approximately $20,525.78 for legal costs can, or should, be added to the mortgage debt or, for that matter, is chargeable against the mortgagors. No itemised particulars of this additional component of $20,525.76 have yet been provided by the plaintiff but it is said to comprise legal costs which have been incurred by the plaintiff in protecting its interest as mortgagee in legal proceedings in the Family Law jurisdiction between the Skipworths into which it has been drawn. Consistently with this submission the plaintiff also submits that the costs of this present application and, indeed, all the costs arising from this

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action for possession and attempts at enforcement, may also be added to the mortgage debt and must be paid in full, either on redemption, or as the price for the interim relief being sought by Mrs Skipworth.

27 The plaintiff submits that the mortgagee is entitled, as an incident of the relationship between mortgagor and mortgagee, to add costs and expenses to the mortgaged debt in certain circumstances: Elders Trustee & Executor Co Ltd v E G Reeves Pty Ltd (1988) 20 FCR 164 at 169. The breadth of this entitlement is explained in Re Leighton's Conveyance [1937] Ch 149 at 152 by Lord Wright MR in the Court of Appeal, and cited in Elders (supra) at 171. It is said that the mortgagee's right is:

"[T]he ordinary right of a mortgagee to add to his security all costs, charges and expenses reasonably and properly incurred in ascertaining or defending his rights, [when] recovering the mortgage debt. It is not really a matter which arises in connection with the awarding of costs."

28 In cl 20 of the mortgage by the Skipworths to RAMS there is provision that the mortgagors must pay for RAMS' reasonable expenses incurred in enforcing the mortgage. In Maher v Network Finance Ltd [1982] 2 NSWLR 503 at 506 - 507 it was held that the costs which are recoverable by a mortgagee are payable as a right under the contract and this was upheld on the appeal in Maher v Network Finance Ltd (1986) 4 NSWLR 694 at 697 - 698. The plaintiff submits that this additional element, giving rise to increased indebtedness, is part of the mortgage relationship which is protected by the indefeasibility arising from registration of a mortgage - Mercantile Credits Ltd v The Shell Co of Australia Ltd (1976) 136 CLR 326 per Barwick CJ at 340; per Gibbs J at 344 - 345 and per Stephen J at 352.

29 That consequence, if the plaintiff's submissions are correct, is important because it is a mechanism to provide for the increase in the plaintiff's security to the potential prejudice of subsequent encumbrancers whether registered or unregistered and, as it is said to be effective, must be distinguished from unsuccessful attempts to claim security for other forms of asserted additions to the mortgage debt by an impermissible technique of "tacking". See Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293 and Sykes and Walker: "The Law of Securities", 5th ed, Law Book Co (1993) at 394 - 395.

30 Two further derivative questions arise in relation to the claim for the increase in the mortgage debt due to the addition of these claims for costs.

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First, no notice of the details of these costs have been provided to Mrs Skipworth nor to the co-mortgagor and there is, therefore, at least a potential for a question to arise as to whether or not these are, or all are "reasonable expenses incurred in enforcing the mortgage". Determining whether or not such costs are properly chargeable would require disclosure of them and their components to the mortgagors who, if they questioned the reasonableness of such charges, would be able to require the costs to be itemised and then taxed under the provisions of s 228(2), s 231 and s 232 of the Legal Practice Act 2003 (WA). This may not be a fruitless exercise because, from what has been put before me, a large component of the evidence prepared by RAMS for use in the Family Law proceedings appears to be inadmissible in either form or content. The production in other legal proceedings of a caveat, or even of a statutory declaration lodged to support it, is not proof of: the existence or validity of the interest asserted; the amount claimed to be owing; or the authenticity of a disputed signature in the instrument relied upon for the claim – it is no more than notice of a claim which may or may not be justified.

31 At present, where no bill of costs for legal services has been served upon mortgagors, as parties to be charged, the solicitors who rendered the bill could not sue for the recovery of the fees. But the Skipworths are not clients of the solicitors and the costs have, presumably, been paid by RAMS as the client mortgagee so no question of the ability of the solicitors who issued the bills being entitled to sue for recovery arises. The obligations of the Skipworths to pay the costs derives from the terms of the mortgage and is a contractual obligation and, for that reason, s 230 of the Legal Practice Act is not an impediment to the mortgagee recovering these costs pursuant to the contract. Nevertheless, the option of requiring delivery of an itemised bill and taxation of the costs by the ultimate party to be charged remains.

32 In such circumstances where there is a dispute as to part of the moneys owing under the security of the mortgage, including the propriety of particular items of expenditure being debited to the mortgagors, the appropriate remedy for the mortgagors is to seek an account of the balance claimed and, unless this is agreed between the parties, for the court to conduct such an account to settle the balance owing which may, depending upon the outcome, require a refund of overpayments by the mortgagee to the mortgagors. However, pending the taking of any such account and settling the balance due, the mortgagee is entitled to require payment into court of the whole of the balance sworn to be due, subject to the completion of the account and any associated enquiries which may

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need to be conducted. This right to account endures even for a mortgagor in default - Van Kempen v Finance & Investments Pty Ltd (1984) 6 NSWLR 293 but, generally, a mortgagor in default will be required to offer to discharge the mortgage as a condition of obtaining an order for the taking of accounts - Adams v Bank of New South Wales [1984] 1 NSWLR 285 and Kennedy v General Credits Ltd (1982) 2 BPR 9456.

33 It is established that a mortgagor is only entitled to an order for an account as an ancillary to an action for redemption and the offer to redeem is usually an essential prerequisite to any such claim of relief - Tasker v Small (1837) 3 My & Cr 63; 40 ER 848 and National Bank of Australasia v United Hand-In-Hand & Band of Hope Co & Lakeland (1879) 4 App Cas 391.

34 A dispute as to the quantum of the mortgage debt where there is no dispute about the existence of a prior default does not entitle a mortgagor to an injunction - Westpoint Finance Pty Ltd v Chocolate Factory Apartments Ltd [2002] NSWCA 287; (2002) 12 BPR 22,969; Fletcher v Ould Pty Ltd [2003] WASC 226 and Boscawen v Bajwa [1996] 1 WLR 328; - see generally Fisher and Lightwood's "Law of Mortgage", 2nd Australian ed, Butterworths at [33.7] and [39.2]. Accordingly, the position is that a mortgagor who has been required to pay more than the amount acknowledged to be due under the mortgage in order to secure redemption or interlocutory relief may sue the mortgagee for recovery of an identifiable alleged excess as money had and received - Hartl v Cowen [1993] 2 Qd R 633 per G N Williams AJ - noted in Halsbury's Laws of Australia, vol 19 at [295-6745].

35 The overall effect of this for Mrs Skipworth is that if she offers to discharge the mortgage in full she will be required to pay the whole of the amount sworn by the mortgagee to be owing, or to pay that money into court together with an amount sufficient to cover the costs of taking any accounts which she may then seek. Alternatively, she may pay the whole of the amount claimed and obtain a discharge of the mortgage and then seek to recover any excess payment by an action for money had and received. In the present situation such an action would lie if the amount of the alleged over payment were precisely ascertained as might, for example, emerge from the exercise of the rights conferred on Mrs Skipworth by the Legal Practice Act including the taxation of costs.

Fraud

36 It is vital to note that Mrs Skipworth does not make any allegation of fraud, or of the forging of security documents for the subject mortgage,

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against the plaintiff RAMS. Her allegations in this regard are clearly confined to certain conduct of her husband, Mr Jeffrey Donald Skipworth, in creating and executing security documents purporting to give other creditors charges over the land and in respect of which some of the caveats mentioned have been lodged. No fraud is alleged against the registered proprietor of the mortgage, namely RAMS, and consequently there is no inroad which could be made on that basis against the indefeasibility of the plaintiff's position as mortgagee: Assets Co Ltd v Mere Roihi [1905] AC 176 at 210; Frazer v Walker [1967] 1 AC 569 and Registrar of Titles v Franzon (1975) 132 CLR 611.

Family Law Act proceedings

37 Following the final break down of the marriage Mrs Skipworth commenced proceedings in the Family Court of Australia against her husband seeking a dissolution of marriage and financial provision for herself and her family. In an attempt to protect what she claimed were "family assets" she applied to the Magistrates Court under the Family Law Act pursuant to s 114(4) for relief which would protect and preserve, among other assets, the property at 15 Park Lane, Kardinya, pending the determination of her claim for financial provision in those proceedings. By an order made in the Magistrates Court under the Family Law Act on 30 August 2006, that Court granted an injunction restraining the trustee in bankruptcy of the estate of Jeffrey Donald Skipworth from declaring or distributing dividends amongst the bankrupt's creditors from the settlement of the sale of the other family property at 15 Bartley Crescent, Bateman.

38 An injunction was granted by that same order restraining the trustee in bankruptcy from distributing or otherwise dealing with any of the interest of the bankrupt in the property at 15 Park Lane, Kardinya. Later in the Family Law Act proceedings Mrs Skipworth sought an order restraining RAMS from proceeding to sell the land at 15 Park Lane, Kardinya, pursuant to this mortgage. This application must have been served on RAMS because it appeared in the proceedings to oppose the relief sought and was heard by counsel.

39 In the result, the learned Magistrate refused to grant any order or other relief restraining RAMS from proceeding to exercise its powers, including its power of sale under the mortgage, but by order made on 8 November 2006 directed instead that in the event of such a sale the surplus from the proceeds of sale, after meeting the mortgagee's debt and expenses, should be paid into the Supreme Court of Western Australia to

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allow interpleader proceedings to be taken between the Skipworths and/or any of the caveators who claim to be entitled to any part of those proceeds pursuant to the charges alleged to exist by the respective caveats.

40 For this reason counsel for RAMS has submitted that the very question in issue in the present application brought by Mrs Skipworth, namely relief against enforcement of the judgment for possession, or other relief restraining or affecting the exercise of the mortgagee's power of sale, has already been determined adversely to Mrs Skipworth by that order of the Magistrates Court of 8 November 2006 and that consequently RAMS can rely upon that order as a res judicata or, at least, as an issue estoppel which must prevent Mrs Skipworth from pursuing her present application.

41 Apart from the two orders of the Magistrate in the Family Court already mentioned, namely that of 30 August 2006 and that of 8 November 2006, there is no evidence of the actual record of proceedings in the Magistrates Court which have been tendered in evidence on this application. Had it been necessary to do so this absence of evidence might have presented some difficulties in determining whether or not the outcome of the proceedings in the Magistrates Court did amount to a res judicata or an issue estoppel because of the need to determine whether or not the issues resolved by those proceedings were identical with the issues arising on the present application. No submission has been made that the jurisdiction of the Family Court in relation to this matter has become exclusive because of the pendency of a matrimonial cause in the federal jurisdiction and it is therefore inappropriate for me to consider any such potentiality.

42 More significantly, and at a prosaic level, the records of the proceedings in the Magistrates Court under the Family Law Act disclose that RAMS is not a party to those proceedings, never having been joined. On this point being expressly raised by me, counsel for the plaintiff sought instructions and confirmed that there has never been any formal joinder of RAMS in the Family Law Act proceedings. How, in such circumstances, those proceedings should have advanced as far as an order being made requiring RAMS to pay into court the surplus, after satisfaction of its mortgage debt and expenses, of the proceeds of any sale of the Kardinya property remains entirely unexplained. Whether that is simply due to some omission or because none of the parties thought it necessary cannot presently be known but the resulting situation does not satisfy the requirements for an issue of estoppel which, in Carl Zeiss

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Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853 at 935 were identified as being:

"(1) that the same question has been decided;

(2) that the judicial decision which is said to create the estoppel is final; and

(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies."


and which was recently approved and applied in Kuligowski v Metrobus (2004) 220 CLR 363 at 373.

43 The same requirement that the determination be between the same parties or their privies is essential to the doctrine of res judicata - Rogers v The Queen (1994) 181 CLR 251 at 261; Blair v Curran (1939) 62 CLR 464 at 532 and Ramsay v Pigram (1968) 118 CLR 271 at 279 and, further, res judicata also requires that the anterior judgment relied upon should be final and not interlocutory - Somodaj v Australian Iron & Steel Ltd (1963) 109 CLR 285 at 297 - 298.

44 In the present circumstances, the refusal of the Magistrate in the Family Law Act proceedings to grant an injunction preventing the exercise by RAMS of its power of sale in order to preserve the "family asset" does not appear to be a final judgment although no evidence or submissions were directed to that point. It seems to have all the hallmarks of an interlocutory judgment and, if circumstances were to change, such as they have with Mrs Skipworth's proposal to refinance the mortgage and so exercise a right to redeem, there would appear to be no reason why another similar application could not be reviewed here or in the Family Law jurisdiction.

45 Counsel for RAMS was unable to direct my attention to any provision of the Family Law Act, Family Law Rules 2004 (Cth) or the Family Law Regulations 1984 (Cth) which might conceivably modify the rule that identity of parties is an essential requirement for the application of the doctrine of issue estoppel or res judicata, nor have I been able to identify any such provision in the short time available leading to the preparation of these reasons. The power to make orders affecting third parties under s 90(2) of the Act does not change the requirements for issue estoppel or res judicata. Accordingly, I have concluded that neither of the purported orders made by the Magistrate under the Family Law Act affects

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this application or prevents it being examined and determined upon the merits.

Insufficiently stamped security

46 In an affidavit filed by RAMS in opposition to Mrs Skipworth's application there has been annexed a copy of the mortgage relied upon. It is, of course, unnecessary for RAMS to establish its right to an order for possession under this mortgage because it already has a judgment to that effect, together with a property seizure order. However, RAMS does seek to rely upon the mortgage document to support its entitlement to its claim for the $200,000 alleged to be due including, as that does, the disputed component of $20,525.78 or thereabouts for costs and, so, consequentially, to support its submission that interim relief should be declined unless the whole of the alleged debt is paid into court or adequately secured.

47 In the course of examining this document it became apparent that it was stamped as a collateral security and that the principal security had been stamped to secure advances of $170,000. There was no evidence of the principal security, or of the mortgage or any other security document being up-stamped on the ad valorem scale to cover advances of the $200,000 claimed or for any larger amount. Section 29(1) of the Stamp Act 1921 (WA) requires a Judge to take notice of the insufficiency or omission to stamp any instrument chargeable with stamp duty which might be pleaded or given in evidence or admitted to be good, useful or available in law or equity and s 29(2) provides the means for the insufficiently stamped instrument to be legally stamped upon production and upon payment of the unpaid duty it may be received in evidence.

48 Upon this becoming apparent counsel for RAMS offered his personal undertaking to have the document stamped and so invoked the practice referred to by Kennedy J in Kia Ora Gold Corporation NL v Washer [1982] WAR 306 at 308. This practice in permitting an unstamped document to be tendered in evidence upon the personal undertaking of the counsel or solicitors for the party seeking to tender the document was discussed and approved by Rowland J in Sangora Holdings Pty Ltd v Dunstan (1996) 16 WAR 552 at 555 - 556. The history of s 27 of the Stamp Act, prior to its amendment in 1995, was also fully canvassed by Kennedy J in Acclaim Holdings Pty Ltd v Vlado Pty Ltd (1989) 1 WAR 128. In the former case Rowland J concluded that the 1995 amendment to the Stamp Act resulted in a situation which is distinguishable from that discussed in Acclaim. The present position is covered by s 27(3)(b) of the

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amended Stamp Act which allows such an instrument or document to be tendered if the court is satisfied that the person tendering or relying upon the document: (1) has informed, or will, in accordance with arrangements approved by the court, inform the Commissioner of the name of the person liable to pay the duty in respect of the instrument; and (2) has lodged, or will, in accordance with arrangements approved by the court, lodge the instrument or a copy of the instrument as the case requires with the Commissioner.

49 In these circumstances I consider that if the undertaking offered by counsel for RAMS were to be modified to include an undertaking that RAMS will inform the Commissioner of the name of the person liable to pay duty on the instrument and will lodge a copy of the mortgage with the Commissioner, I should allow a copy of the mortgage to be relied upon and admitted in these proceedings and, for the present, I will assume such an undertaking will be given. Of course, if it is not given then no reliance of any kind can be placed by RAMS on the terms of the mortgage for its present opposition to Mrs Skipworth's claim for relief.

The evidence relied upon by RAMS in opposition to the application

50 In opposition to the application RAMS filed, admittedly under the considerable pressure caused by the very short and inadequate notice of the application which had been given, affidavits purporting to relate the background of the events leading to the default under the mortgage, the giving of notices, proceedings in the Family Law jurisdiction and the amounts owing under the mortgage. Insofar as these affidavits related to the background of events in the Family Law jurisdiction the method of purported proof was that the solicitor for RAMS filed an affidavit annexing a series of other affidavits which had been filed and used in the Family Law proceedings.

51 When queried as to the admissibility of evidence in that form, counsel for RAMS submitted that, in accordance with RSC O 37 r 6(2) the plaintiff was entitled, on this interlocutory application, to adduce evidence relying upon information and belief and that the solicitor could so inform himself and adduce evidence by reason of the sworn evidence which had been filed in the Family Law proceedings. It quickly became apparent, however, that the solicitor was in no position to vouch for the accuracy, or even the probability of the accuracy, of the contents of the affidavits in the Family Law proceedings. He was no more than a reader and observer of the content of those affidavits which he assumed to be true. His annexing of those affidavits could not, and I am satisfied does not, add any element

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of personal assurance to the veracity or accuracy of the contents of those affidavits. The question, therefore, is whether or not use of this material is permissible.

52 As to the necessity for affidavits containing hearsay evidence to be used on interlocutory hearings to give the source of the information and grounds of the information relied on - see Bonnard v Perryman [1891] 2 Ch 269 and Deputy Commissioner of Taxation v Ahern (No 2) [1988] 2 Qd R 158 at 163 and Re Juson Pty Ltd (1992) 8 WAR 13 at 14 which establish that matters of information or belief which are sworn to without a statement of the source and grounds are not admissible - see also Westpoint Management Pty Ltd v Goakes [2002] WASCA 317 at [14] and [15].

53 The rules of this Court require that any affidavit for use in the proceedings should be entitled in the cause or matter in which it is sworn - RSC O 37 r 1. If an affidavit is filed in other proceedings it is customary to seek leave to read the affidavit in the particular proceedings. No such application was made nor was leave given in these proceedings, as counsel for RAMS at all times assumed and maintained that the affidavits in the Family Court proceedings could be used as a right. With all respect, I consider that that is a mistaken view.

54 The more conventional course would be for the affidavits filed in other proceedings to be read in the present cause, conditional upon leave being sought and granted on that behalf. Furthermore, because of the confidentiality provisions of the Family Law Act - see s 121 – care must be taken to ensure that evidence of details of proceedings in that jurisdiction only be disclosed or published in any other court, where that is truly necessary or justified. This position is not otherwise affected by the Oaths, Affidavits and Statutory Declarations Act 2005 (WA).

55 Because an affidavit is a document, and contains information, which has been prepared and used for a specific purpose, namely as evidence in the particular proceedings for which it was prepared, its use is restricted to those proceedings and it may not be used for any purpose other than the conduct of those particular proceedings. Hence, its contents may not be read in other proceedings without the leave of the court - see the Hon Justice A R Emmett in "Practical Litigation in the Federal Court of Australia: Affidavits" (2000) 20 Aust Bar Rev 28 at 38. Such an affidavit, and indeed other documents such as witness statements prepared for use in particular proceedings, may not be used in other proceedings without leave of the court - Springfield Nominees Pty Ltd v Bridgelands

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Securities Ltd (1992) 38 FCR 217. Such an affidavit, and indeed other cognate documents, are subject to the implied undertaking that they may not be used for any collateral purpose, that is, otherwise than for the purpose of the litigation in which they are given, unless the consent or leave of the court is obtained. Springfield Nominees Pty Ltd (which dealt with witness statements but the principle of which applies equally to discovered documents, affidavits and other similar materials) has been applied in this Court in North Kalgurli Mines Pty Ltd v GRD Minproc Ltd [2002] WASC 275; Mead Corporation v Carbonless Papers (Australia) Pty Ltd [2002] WASC 237 and by the Full Court in Minister for Education v Bailey (2000) 23 WAR 149 to cite only a few examples.

56 Springfield Nominees Pty Ltd (supra) is an example where leave was granted to make use of the materials in other proceedings because of the degree of commonality between the proceedings in the Supreme Court, in which the witness statements had been filed, and in the Federal Court of Australia in which the second cause was then pending. Wilcox J adverted to the circumstances to which the court may have regard when considering whether special circumstances exist for the grant of such leave. That decision and other authorities dealing with the application of the implied undertaking have been usefully examined in an article by Mr M Groves: "The Implied Undertaking Restricting the Use of Material Obtained During Legal Proceedings" (2003) 23 Aust Bar Rev 314, in particular at 320. These principles apply to the present circumstances. Particularly where the details of evidence and proceedings in the Family Law jurisdiction are protected by obligations of confidentiality - Family Law Act, s 121, there is even more reason to insist upon the observance of this principle. It also follows, that the reading or use of such affidavits or other evidence filed in the proceedings in the Family Law jurisdiction will not result in the information entering the public domain, such as might otherwise occur by the documents being read or produced in open court - although, in Australia, there is yet to be a definitive ruling on whether such use of materials in open court dissolves the undertaking: Ainsworth v Hanrahan (1991) 25 NSWLR 155 at 168; Uniflex (Australia) Pty Ltd v Hanneybel [2001] WASC 138 at [145] and, generally, Groves (op cit) at 322.

57 The result for the present circumstances, however, is that I am satisfied that I should not permit any use to be made by the plaintiff in the course of the current application of the affidavit materials filed in the Family Court proceedings as leave to use those materials was neither sought nor granted.

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Power to stay execution

58 Mrs Skipworth identified RSC O 47 r 13 as the source of power of the court to grant an order staying execution of the judgment for possession of the Kardinya land and sought to establish special circumstances by reason of which it is inexpedient to enforce the judgment and asking that execution be stayed for such a period and on such terms as the court thinks fit. There is also another power under RSC O 46 r 6 to grant a stay of execution on the ground of matters which have occurred since the date of the judgment, again enabling the court to grant such relief and on such terms as thought just. This puts beyond doubt the capacity of the court to take into account the offer for redemption of the mortgage on the terms proposed by Mrs Skipworth. The current statutory source of those powers, apart from the inherent power of the court to control or modify its own orders, is now to be found in the Civil Judgments Enforcement Act which enables a person against whom a judgment is given to apply for an order suspending the enforcement of all or part of the judgment, but which empowers the court only to make such an order if there are special circumstances that justify doing so. It is necessary, therefore, to turn to the significance of Mrs Skipworth's proposal to redeem the mortgage in the terms upon which that proposal is advanced.

59 There is evidence from Mrs Skipworth in the form of annexure to her affidavit of 24 January 2007 that she has been granted approval by Ranges Home Loans for first mortgage finance to enable her to refinance the borrowings on 15 Park Lane, Kardinya, and to discharge the existing RAMS mortgage by a loan in the amount of $225,000. The terms of the loan agreement and mortgage documentation are yet to be provided by the proposed lender but its written communication suggests that it "will attend to settlement on your behalf and this can occur within the next few weeks, but is subject to the requirements and time frames of the discharging lender". From this I consider that I can and should infer that a reputable lender is prepared to advance to Mrs Skipworth on the security of a first mortgage over the property the amount of $225,000 which is expected to be sufficient to discharge the RAMS mortgage debt.

60 To the extent to which it may be significant, I have already observed that Mrs Skipworth has proposed that, with the assistance of her father, she will also be able to satisfy those debts in respect of which there are valid charges against the land by some of the caveators.

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61 Obviously enough, however, two potential practical problems loom as foreseeable obstacles to the implementation of this proposal. First, there remain the caveats by those persons claiming charges over the land which Mrs Skipworth contends are invalid and unenforceable because of forgery and fraud. It may take some time to clear away those claims, if indeed they can be cleared away, and until the new proposed mortgagee can be offered an unencumbered title it seems improbable that the promised source of refinance will be accessible. Secondly, the proposed loan is on the security of a first mortgage over land which remains registered in the joint names of herself and Mr Skipworth who at present remains an undischarged bankrupt whose interest has been disclaimed by his trustee. This current state of the register book does not now correctly reveal either the legal or the beneficial ownership of the property.

62 It is possible that, if the RAMS mortgage can be discharged and the other caveats removed, that Mr Skipworth's former interest in the Kardinya land may be vested in Mrs Skipworth, as considered later in these reasons. It is not impossible that such a vesting may occur, but that step has not been addressed by Mrs Skipworth and there is no evidence to show that the outcome which she would presumably desire could be accomplished within a relatively short period.

63 This gives rise to a variation of the question, previously identified, whether or not the possibility of this eventuating would provide a special circumstance, within the meaning of s 15(3) of the Civil Judgments Enforcement Act to make an order suspending or staying execution of the judgment for possession.

The claim for redemption

64 In the body of her application Mrs Skipworth seeks an order, in the form of a declaration, that she and her husband be allowed the right of redemption of this mortgage under s 56 of the Property Law Act. This must surely be a mistake arising from her inexperience of legal matters because s 56 of the Property Law Act deals only with restrictions upon the consolidation of mortgages. Nevertheless, Pt VI of the Property Law Act proceeds on the assumption of the existence, up to the point of foreclosure, of a right to redeem which for a mortgage such as this under the provisions of the Transfer of Land Act, is specifically recognised for land under the Torrens System. What is colloquially referred to as a "right of redemption" exists both as a contractual right under the mortgage and in equity as a right of a mortgagor to a discharge of the mortgage at any point payment is offered before foreclosure - see per Steytler J in

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Sandgate Corporation Pty Ltd v Ionnou Nominees Pty Ltd (2000) 22 WAR 172 at 182. Steytler J there points out that s 111 of the Transfer of Land Act provides for an entitlement on the part of the mortgagee to foreclose the right of the mortgagor to redeem the mortgaged land. However, that case was about the court exercising the power to order the sale of mortgaged property pursuant to s 55 of the Property Law Act, a question which has not been raised and would not appear to arise in the present case where, if matters otherwise take their course, it is to be expected that RAMS will exercise its own statutory power of sale pursuant to s 108 of the Transfer of Land Act without recourse to the court and without invoking any of the powers available under s 55 of the Property Law Act.

65 This right to have the mortgage discharged on payment made, even after breach has occurred and the mortgagee is moving towards a sale, is a right of the mortgagor or his or her successors: Pearce v Morris (1869) LR 5 Ch App 227 and Re Bunbury Foods Pty Ltd; Robertson v Nissho Iwai Australia Ltd [1985] WAR 126. It may be exercised by one of several co-owners - Hall v Heward (1886) 32 Ch D 430 - and, in that case, the redeeming co-owner may, in certain exceptional circumstances, be entitled to demand delivery to her or him of the mortgagee's security documents which she could then hold and exercise, pursuant to a right of subrogation of the benefit of the security, against any other co-owner to recover a contribution, to the amount she paid to secure the discharge, or at least the delivery of the mortgage securities - see Meagher Gummow and Lehane: "Equity Doctrines and Remedies" 4th ed, [9.060] - [9.075] and Albion Insurance Co Ltd v GIO (NSW) (1969) 121 CLR 342 and Burkev LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282.

66 While it is the case that if a third party pays off a mortgage, he is presumed, unless the contrary appears, to intend that the mortgage will be kept alive for his own benefit: Ghana Commercial Bank v Chandiram [1960] AC 732 at 745 and Cochrane v Cochrane (1985) 3 NSWLR 403, this does not mean that a co-mortgagor who pays off the entirety of the outstanding debt is ordinarily entitled to be subrogated to the mortgagee's rights and to enforce them against the other co-mortgagor who has not made the payment. As Kearney J observed in Cochrane v Cochrane (supra) at 405:

" ... I am unable to accept that the doctrine of subrogation applies to the case of repayment of a mortgage debt by a co-mortgagor in the absence of a very clear reservation expressly or impliedly of such right. Each co-mortgagor being

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primarily liable for the whole debt, adequate justice is done between them if one has to pay the whole debt, by his entitlement to contribution. This is reinforced when the non-paying co-mortgagor is insolvent, and to give the paying co-mortgagor the added right of subrogation could have the effect of constituting him a secured creditor to the detriment of other creditors in the insolvency."

This passage acknowledges the right of the paying co-mortgagor to make an express reservation of the right to subrogation but where the non-paying co-mortgagor is bankrupt the efficacy of this may depend upon a decision of the bankrupt trustee - unless, as here, the trustee has disclaimed the subject land. Cochrane v Cochrane was followed and applied by Campbell J in Rossfreight Holdings Pty Ltd v Unipep Australia Pty Ltd [2002] NSWSC 1074 where a co-owner sought to be subrogated to a mortgagee upon payment out of the mortgage debt, so as to enforce the mortgage against the non-contributing co-owner. At [26], Campbell J followed Cochrane v Cochrane and concluded that the law had already provided, by the principles concerning exoneration, and the availability, sometimes of a quia timet injunction, to require the early payment out of a mortgage debt secured over the property of a surety, for an appropriate adjustment of the rights of the parties. However, that a right of subrogation might be expressly reserved, by the co-owner paying out mortgage debt, and for that matter, agreed by the non-paying co-owner, means that in a particular circumstance a right of subrogation would arise, at least to the extent of protecting the claim for contribution or exoneration.

67 At this point it seems inadvisable to venture further on issues which have not been directly raised and where the existence of an insolvency may well, as Kearney J postulated in Cochrane v Cochrane (supra), give rise to other considerations. Yet the possibility remains that, if she were to pay out the whole of the mortgage debt, Mrs Skipworth would have, at least, a right of contribution from the new co-owner who has succeeded to Mr Skipworth's interest and, that the trustee in bankruptcy having disclaimed any interest in the property, the remaining interest may be more readily vested in her, leaving her in the position where she may become the sole registered proprietor and able to mortgage the property to the new lender.

68 It may be expecting a lot to think that a resolution of problems involving such complexities can be reached rapidly but as these issues have not been addressed, and as the parties concerned may well be

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co-operative, no conclusion should be reached at present that such a solution cannot be quite readily accomplished.

Other grounds raised by the applicant

69 As mentioned, Mrs Skipworth seeks an order restraining RAMS from exercising its purported rights as mortgagee because the subject property is part of a matrimonial cause; that the interest in the land is the subject of a constructive trust in her favour; that all proceedings should be stayed pending the completion of the investigation by the police of fraud charges laid against Mr Jeffrey Donald Skipworth and, further, that the matter should be referred to the Magistrates Court under the Family Law Act because of alleged contempt of orders made on 30 August 2006 by that Court. All these claims can be dealt with shortly.

70 First, the fact that there are proceedings amounting to a matrimonial cause pending between Mrs Skipworth and her husband is no reason to prevent RAMS, as mortgagee, from exercising its rights under its registered first mortgage. In certain circumstances, a court exercising jurisdiction under s 114(4) of the Family Law Act might make a particular order seeking the preservation of a "family property" pending the outcome of proceedings for financial provision in that jurisdiction, but that has already been attempted by Mrs Skipworth and has failed (see Order of 8 November 2006). In the absence of such an order made by a court exercising jurisdiction under the Family Law Act, there is no impediment, due to the pendency of such a matrimonial cause, to prevent the mortgagee from exercising all or any of its powers under the registered mortgage. The Order of 30 August 2006 granting an injunction related to the other property and not 15 Park Lane, Kardinya.

71 Second, there is no reason to prevent or delay the enforcement of rights and remedies available to RAMS under this mortgage by reason of the pendency or the further investigation of charges for fraud against Mr Skipworth. Earlier I have explained how none of the allegations of fraud or forgery against Mr Skipworth affect, in any way, the validity or enforceability of the RAMS' mortgage and that is the end of any such contention.

72 Thirdly, and finally, there is no basis for any finding that Mrs Skipworth has a beneficial interest in the whole of the property by virtue of a constructive trust. She is, in fact, the legal owner of an interest in the property. There has been no transfer to her of her husband's former undivided joint interest in the property, nor has she, at least yet, made any payment to RAMS or to any other party which would give rise to any

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argument that she has acquired a constructive trust over some or all of his former interest in the property. This contention is simply misconceived and is, no doubt, a product of her lack of understanding of the legal principles involved.

The Order for Possession

73 The impetus for this present application, undoubtedly, was the imminent execution by the Sheriff of the property seizure order relating to the subject land. As the most obvious means available to support a stay of execution of the judgment and that order is an offer of satisfaction to RAMS by payment of the mortgage debt, attention inevitably turned to the measure of the obligation upon a defaulting mortgagor to discharge the mortgage to prevent an exercise of the power of sale and, in the process, to the question of whether or not payment into court of the whole of the mortgage debt was an essential condition for the grant of any such relief as is sought. That question remains an important and significant issue in the proceedings because of the amplitude of one of the orders sought by Mrs Skipworth, namely an injunction to restrain RAMS from exercising its powers under the mortgage. However, Mrs Skipworth has also, as a subsidiary contention, sought a stay of execution of the judgment for possession and, in my view, this involves different and less onerous considerations.

74 By virtue of s 116 of the Transfer of Land Act, a mortgagee in Western Australia has the same rights and remedies at law and in equity as he would have been entitled to if the legal estate in the land had been actually vested in him, but with a right in the mortgagor of quiet enjoyment until default in payment of the principal sum or interest or in observance of some covenant express or implied. This means that, before a default, the mortgagor is entitled to quiet enjoyment and possession of the mortgaged premises but, upon default in payment of the mortgage moneys, the mortgagee may re-enter and take possession pursuant to s 111 and s 116 without being obliged to bring an action in ejectment - see Sykes: "Law of Securities", 5th ed, Law Book Company (1993) at 250; Gunnion v Ardex Acceptance Pty Ltd [1968] VR 547; and Tropical Traders Ltd v Goonan [1964] WAR 234.

75 The enforcement by a mortgagee of its right to possession in the event of default may be prompted by one or more of several considerations including, a desire to obtain vacant possession so as to be able, more effectively and advantageously, later to exercise the power of sale of the mortgaged property; to gain access to the rents and profits of

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the property in order to replace, pro tanto, the repayments of principal and interest in respect of which the mortgagor is in default; or to take steps to prevent a wasting condition of the property which, if allowed to continue, might eventually diminish the value of the security, or for other reasons. Importantly, however, the exercise of the right by the mortgagee to possession of the premises leaves the mortgagor's ownership of the secured property intact (and subject to the equity of redemption or, in this case of Torrens land, what is more correctly described as the mortgagor's right to redeem). Significantly, it does not involve the mortgagee recovering the principal due under the loan, although the rent and profits might, in certain circumstances, lead to such a recovery over an extended period. In short, the exercise of the right to possession does not lead to the imminent recovery of the whole of the loan moneys outstanding, in contrast to the exercise of the power of sale or a foreclosure which would, if the value of the secured property is sufficient, produce that effect.

76 This difference is important when considering the prejudice which might be caused to a mortgagee if its exercise of its right to possession were to be delayed as, for example, by an order staying execution of the judgment for possession such as is sought in the present case. A consideration of the scale of the potential prejudice to the mortgagee has an important bearing on whether or not a stay or relief by way of injunction should be granted to an applicant mortgagor and, if so, the terms upon which any such relief may be granted. This is because the delay caused to the mortgagee, by reason of the intervention of the court, may prevent the mortgagee from obtaining immediate access to the rents and profits of the mortgaged property but it would not delay, of itself, access to the recovery of the principal. This is so for two reasons. First, because unfettered exercise of the right to possession claimed would not of itself achieve that result and, second, because any stay of an order for possession would not, in law, affect or restrain the mortgagee from exercising the statutory power of sale or seeking an order for foreclosure. In other words, denial or deferment of the right to possession of a mortgagee will not prevent the immediate receipt of the payment of the principal and other moneys owing under the mortgage.

77 In the present case, however, RAMS submits, and there is no reason to doubt the submission, that the desired exercise of the right to obtain possession is to facilitate and enhance the prospects of a successful exercise of the power of sale of the property with vacant possession.

78 That may be so, but the present judgment is only for possession in respect of the common law action for ejectment in which possession is the

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only remedy which has been sought and the only remedy granted. A delay, by the grant of a stay, of an order for possession does not, therefore, directly, represent a denial of the mortgagee's access to the recovery of its mortgage debt in full.

Disclaimer by trustee in bankruptcy

79 The disclaimer under s 133 of the Bankruptcy Act by the trustee in bankruptcy of Mr Jeffrey Donald Skipworth's interest in the mortgaged property has several important implications for the course proposed by Mrs Skipworth to refinance the RAMS mortgage. As stated, Mr Skipworth became bankrupt on 12 August 2006. Thereupon, subject to the rights of RAMS as a secured creditor, and other secured creditors, the property of the bankrupt available for the benefit of creditors all vested in the trustee - Bankruptcy Act, s 58 - but this vesting did not affect the right of the secured creditor to realise or otherwise deal with its security - s 58(5). By notice dated 11 October 2006 the trustee in bankruptcy disclaimed any interest of the bankrupt in the land at 15 Park Lane, Kardinya, and, as required, a copy of that notice of disclaimer was lodged with the Registrar of Titles and noted on the title soon afterwards. It will be seen, therefore, that the bankruptcy of Mr Skipworth preceded the judgment for possession of this action, and therefore also the property seizure order of 30 November 2006, but that the notice of disclaimer of the bankrupt's interest in the property was given after the judgment for possession but before the property seizure order.

80 Because Mr Skipworth's bankruptcy vested his estate in this land (subject to the priority of the secured mortgagee's interest) in the trustee in bankruptcy this was a disposition of his estate in the land and, consequently, that severed the joint tenancy - Re Holland (1985) 5 FCR 165 and Re Francis (1988) 82 ALR 335. From then, until the disclaimer, the land was held in law as a tenancy in common in equal shares, with the bankrupt's undivided equal share, subject to the mortgage, being held by the trustee and the other undivided half share being held by Mrs Skipworth as tenants in common in equal shares - Thompson v Smith (1976) 135 CLR 102.

81 This is the case notwithstanding that those interests were not registered and that the register book still shows the Skipworths being registered proprietors as joint tenants. From then on and, at present, Mrs Skipworth's interest in the land is that of a tenant in common of one undivided half share, again subject to the RAMS mortgage.

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82 Upon the notice of disclaimer being given by the trustee of Mr Skipworth's interest in the land all his right, title and interest in the land terminated (without affecting the mortgagee's interest). Mrs Skipworth remains as the owner of a one undivided half share as tenant in common but, in the absence of a vesting order made under s 133(9) of the Bankruptcy Act, Mr Skipworth's interest will revert or escheat to the Crown: Re Mercer & Moore (1880) 14 Ch D 287 and Re Tulloch Ltd (1978) 3 ACLR 808 per Needham J SCNSW. No submissions were made about such a reversion or escheat. The authorities suggest that such a reversion or escheat would be to the Crown in the right of the State rather than the Commonwealth and this would appear to be consistent with the original sovereignty of the State over all land within its boundaries not specifically acquired by the Commonwealth: see Commonwealth v New South Wales [2006] FCA 1330 and Re Woo; National Australia Bank v Leroy [2003] FCA 862 at [5].

83 In Halsbury's Laws of Australia, vol 3(1), [50-1075], the learned authors write that, in the event of a disclaimer of a bankrupt's interest in freehold land which is subject to mortgage, the rights of the mortgagee under the mortgage which accrued prior to the disclaimer survive the disclaimer but it is unclear whether the mortgage itself will survive - this uncertainty about the rights of a mortgagee after disclaimer derives from observations made, respectively, by Bowen CJ in Eq in Re Middle Harbour Investments Ltd [1977] 2 NSWLR 652 and by Needham J in Re Tulloch Ltd (supra). As the issue has not been addressed by the parties on the present application and I have not had the benefit of submissions from counsel, I shall not express any view about that controversy but, in the present case, as the defaults under the mortgage and the judgment for possession both occurred before the trustee's disclaimer, the question does not appear to arise on this occasion.

84 While RAMS as mortgagee can exercise its remedies under the mortgage to sell an estate in fee simple of the whole of the land to any purchaser, because it stands outside the bankruptcy, Mrs Skipworth is not in a position to offer any estate in fee simple herself, nor would she be if she paid out the RAMS mortgage and obtained a discharge. For her to be in a position to offer a new mortgagee the security of an estate in fee simple in the entire land she would need to have her husband's former interest in the land vested in her.

85 As a person interested in an estate in the subject land Mrs Skipworth has the standing to apply to the Federal Court for an order under s 133(9) of the Bankruptcy Act to vest the former estate of her husband, later

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vested in his trustee but then disclaimed, in her. If such a vesting order were obtained then, subject to such conditions as may be imposed, she could become the sole proprietor of an estate in fee simple of the subject land and, therefore, upon registration of the vesting order, be in a position to grant a first registered mortgage over the property to a new lender. However, whether or not she would be successful in obtaining a vesting order, and if so, upon what conditions may depend upon the position adopted by the State (which would otherwise benefit from the escheat) and other claimants who may have, or allege that they have, an interest in, or a charge over, the subject property, such as some of the caveators - Sullivan v Energy Services International Pty Ltd (2002) 171 FLR 106 at 112.

86 However, a vesting order which vested the former estate of Mr Skipworth in the present applicant, subject to the claims of the caveators, could well be the outcome of any such application (which, however, would be entirely a matter for decision by the court entertaining the application under s 133(9) - namely the Federal Court of Australia or the Federal Magistrates Court). If Mrs Skipworth is able to clear off or otherwise satisfy the claims of the caveators she would then be in a position to offer, as the sole registered proprietor, an unencumbered title to the new proposed lender.

87 Whether in such circumstances, it would be "just and equitable" for the property to be vested in Mrs Skipworth would be for the court dealing with the vesting application to decide, but if Mrs Skipworth is offering to pay out the whole of the liability under the mortgage to RAMS, in circumstances in which she would be entitled to claim a contribution from the co-owner, by way of exoneration, for that payment that may, perhaps, satisfy the just and equitable test, especially, if the State did not oppose the application.

88 For this to eventuate, Mrs Skipworth would need to make an application for a vesting order under s 133(9) of the Bankruptcy Act and this would need to be made in the Federal Court or in the Federal Magistrates Court - see s 27 of the Bankruptcy Act - the jurisdiction not being a matter which could be exercised incidentally in these or other proceedings in a State court as was the case in Sutherland v Brien (1999) 149 FLR 321 per Austin J at 323 or discussed in Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245 at 253. Obviously, Mrs Skipworth would need to move urgently to institute an application for such a vesting order, give notice to the State, and attempt to have the matter dealt with on an urgent basis.

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Requirement for payment into court as a condition of relief

89 Counsel for RAMS invokes the so-called Ordinary Rule, upheld and applied in Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 that:

"As a general rule an injunction will not be granted restraining a mortgagee from exercising powers conferred by a mortgage and, in particular, a power of sale unless the amount of the mortgage debt, if this is not in dispute, is paid or unless, if the amount is disputed, the amount claimed by the mortgagee is paid into court; and this rule will not be departed from merely because the mortgagor claims to be entitled to set off the amount of damages claimed against the mortgagee."

The long history of this ordinary rule and the details of its frequent application can be found in all the leading texts: Fisher & Lightwood, 10th ed, at 393; Croft: "Mortgagee's Power of Sale", [196] - [198]; "Cousins on Mortgages" at 242; Butt: "Land Law", 4th ed at 554 [18121]; Sykes and Walker: "The Law of Securities", 5th ed at 122; Halsbury's Laws of Australia, vol 19, [295-7475]. The rule has also been the subject of considerable extra judicial writing by experienced Judges: "A Mortgagor's Right to Approach the Court" by Justice P W Young (1993) 1 APLJ 61 and "Restraining Sales by Mortgagees and a Curial Myth" by the Hon Justice Bryson (1993) 11 Aust Bar Rev.

90 Recently in this Court Pullin J held in Commonwealth Bank of Australia v Bouwman [2003] WASC 205 at [15] that the ordinary rule is a general rule only and cannot be applied rigidly, although, on the facts of that case, his Honour dismissed an application for a stay of execution on a judgment ordering the delivery of vacant possession of mortgaged property. In doing so, his Honour referred to a decision of the Full Court in Commonwealth Development Bank of Australia Ltd v Nertec Pty Ltd [1999] WASCA 311 where a court comprising Ipp, Murray and Owen JJ observed that the principle in Inglis' case (supra) applied to an application for relief against the enforcement of a judgment for possession of mortgaged land, although two of the Judges, Owen and Ipp JJ, were of the view that the error which required the appeal to be allowed and the order granting a stay reversed, was that the decision at first instance did not properly have regard to the rule in Inglis' case, rather than holding that its application was inflexible in any comparable situation.

91 In Fisher and Lightwood's "Law of Mortgage", 2nd Australian ed (2005), at [19.22], there is a passage:

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"An action for possession of land is a common law proceeding and as such there is no room for any rule of equity or statutory injunction that a person who disputes the amount of the debt to the mortgagee has to pay into court the admitted balance before the court will listen to the mortgagor's defence; or that the court has a discretion whether it will require payment into court before hearing the defendant mortgagor: Australian and New Zealand Banking Group Ltd v Comer (1995) 5 BPR 11, 748; as to the extent of the 'pay into court' rule in equity, see the review of the authorities at 11, 749-54; and Young, 'A Mortgagor's Right to Approach the Court' (1993) 1 APLJ 61 ... Nevertheless a court may grant an order for possession with a stay of execution in order to allow the mortgagor to sell the mortgaged property to pay the mortgage; see, for example, Croney v Nand [1999] Qd R 342; Commonwealth Bank of Australia v Bouwman [2003] WASC 205; and ANZ Banking Group Ltd v Pearce [2003] VSC 49."

Similarly, in Butt (op cit) at 560 the learned author writes:

"The payment-in rule strictly applies only to actions to restrain a sale or proposed sale. It does not apply, for example, where the mortgagor is seeking to defend a mortgagee's claim for possession, Australian and New Zealand Banking Group Ltd v Comer (1993) 5 BPR 11, 748 (seemingly approved by NSWCA in Murphy v Abi-Saab, 20 July 1995, page 15) or where the mortgagor is seeking to set aside a default judgment for possession (at least where the value of the land is adequate to protect the amount outstanding under the mortgage) ... [footnotes omitted]."

92 In the present case counsel for RAMS submits that Australian & New Zealand Banking Group Ltd v Comer (1993) 5 BPR 11,748 is contrary to principle and inconsistent with binding authority in Inglis' case, yet, as can be seen, it has been accepted at the level of Court of Appeal in New South Wales. As the passage previously cited makes clear, the ordinary rule was said by the High Court to apply as a general rule, thus acknowledging the possibility of exceptions. Hill J later said of the rule:

" ... is not inflexible and that, depending upon the circumstances, the court can mould an order so as to do justice between the parties" - Harris v Western Australian EximCorporation (1994) 56 FCR 1 at 14.

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93 Other examples of instances where the rule was not applied with full rigour are Grose v St George Commercial Credit Corporation Ltd [1991] NSW Conv R 55-586 and Harvey v McWatters (1948) 49 SR (NSW) 173 and, in Fisher and Lightwood's "Law of Mortgage", 2nd Aust ed (op cit) at 20-38 there is the passage: "As in all cases of an interim injunction, the purpose is to maintain the status quo" (see Westfield Holdings Ltd v Australian Capital Television Pty Ltd (1992) 32 NSWLR 194), and, in deciding whether or not to grant the injunction, the court will consider the balance of convenience between the parties: see Eltran Pty Ltd v Westpac Banking Corporation (1988) 32 FCR 195. Where the mortgagor's lack of credit makes it impossible for him to give the usual undertaking in damages, so long as there is evidence that the mortgaged property is and is likely to remain adequate security for the mortgage, an injunction may be granted without such an undertaking: see Eltran Pty Ltd (supra).

94 Undoubtedly, the ordinary rule exemplifies a vital principle which must be considered and respected in every such case for, standing behind it, lies the commercial importance of maintaining a mortgage as a good and valued security for the provision of loan finance at all levels of the commercial community, which may effectively and expeditiously be enforced, a principle which, if jeopardised, will undoubtedly have large and widespread adverse consequences. In Murphy v Abi-Saab (1995) 37 NSWLR 280, Gleeson CJ referred to the general rule in Inglis (supra) at 289 before referring to Comer's case (supra) of which the learned Chief Justice said:

"However, the concluding remarks of Powell J in the passage from his reasons quoted above, indicate that, at least in relation to the mortgagors' notice of motion, he would have required a payment into court if he had otherwise been minded to grant relief."

which I take to be an allusion to the related rule that a mortgagor who seeks to bring the mortgagee before the court for relief (except for a kind which is not sought in this case) must offer to redeem the mortgage in full. All these are factors which, undoubtedly, must receive deliberate weighty attention when the court is asked to grant or to withhold the discretionary remedy of a stay or an interlocutory injunction.

95 At this point it is necessary to turn to the consequences of what might be involved if any form of relief were to be granted to Mrs Skipworth. In practical effect, although not by legal necessity, RAMS may be delayed in arranging to exercise its power of sale of the
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mortgaged property under s 108 of the Transfer of Land Act but, as earlier observed, that is not an inevitable result. If relief were withheld and vacant possession gained then, presumably, the property would be sold within a period which may be as short as a month or so and then the purchaser would be required to pay the purchase price to the vendor/mortgagee. Upon the current state of the title that would leave standing the caveats of those claiming to be secured creditors relying on challenged charges and those creditors who Mrs Skipworth acknowledges to have valid charges. None of those caveators would appear to be entitled to maintain his caveat to prevent or delay the exercise of the first registered mortgagee's power of sale and applications to remove such caveats, if brought under s 138B by the mortgagee, either before or after the exercise of the power of sale would appear to have high prospects of success - see Lewenberg v Direct Acceptance Corporation Ltd [1981] VR 344 and Commercial Bank of Australia Ltd v Schierholter [1981] VR 292 as applied in this Court by Siopis C in Western Australian Real Estate Custodian Pty Ltd v Chesson [2005] WASC 33 at [43] - [45]. Nevertheless, there is at least the potential for such efforts to take time before a clear title can be provided by the mortgagee to any purchaser at a statutory sale. Counsel for RAMS acknowledges that this may be so but points out, not unnaturally, that the sooner that the task is begun the sooner the end result will be achieved and submits that there should be no delays put in front of RAMS which might result in that period being extended.

96 Mrs Skipworth's position, essentially, is that she has a reliable source of adequate finance to discharge the mortgage, that there are probably (but not certainly) means readily available which would allow her to become the sole registered proprietor of the mortgaged land and thus be in a position to give a title which the new mortgagee would accept (assuming that she can obtain a vesting order in her favour of her husband's former interest) and that she is also in the position to clear away all the caveats except for those who have valid claims which she would be in a position to satisfy.

97 Having regard to all these circumstances and, particularly, the fact that the mortgaged property is clearly worth far more than is needed to satisfy this mortgage debt and is in good condition and well maintained, a short stay of execution appears to me to be justified. In addition, there is the possibility that such relief may accelerate the prospects of the mortgagee being paid out in full if Mrs Skipworth can put into effect the proposals which have been identified. I consider, therefore, that I should grant a stay of execution of the judgment and order for possession for a

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period of eight weeks but with liberty to apply by either party before then if it becomes apparent that the applicant's proposals to refinance the mortgage fail. In my view this stay should be upon the usual undertaking as to damages by the applicant although, in many respects, this is likely to be no more than an added protection having regard to the adequacy of the security. However, I will hear the parties as to the precise form of any orders which should be made and, in particular, whether the applicant should be required to file an affidavit before the expiration of the eight week period or any further extension deposing to the progress in her efforts to redeem the mortgage.

98 In addition, I will require:

(a) that counsel for the plaintiff, RAMS, confirm his undertaking, in relation to the up-stamping of the mortgage documents, in appropriate terms to comply with the obligations under s 27(3)(b) of the Stamp Act; and

(b) the solicitors for RAMS forthwith uplift and remove from the record of the proceedings all affidavits or other evidence comprising part of the record of the proceedings before the Magistrate in the Magistrates Court under the Family Law Act which were filed and proffered without leave of the court to read such affidavits in this cause being sought or granted.

(c) further submission to be made within 14 days as to the effect, if any, which Mr Skipworth's trustee's disclaimer of the mortgaged property has on the plaintiff's ability to proceed with this action or effect any sale of the mortgaged property without a vesting order being made under s 133(9) of the Bankruptcy Act of the bankrupt's former interest in that land.