Romany Investments Pty Ltd v Paxton (WA) Pty Ltd in its own capacity and as trustee for the Wright Family Property Trust - [2020] WASC 180

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   ROMANY INVESTMENTS PTY LTD -v- PAXTON (WA) PTY LTD in its own capacity and as trustee for THE WRIGHT FAMILY PROPERTY TRUST [2020] WASC 180
CORAM:   MASTER SANDERSON
HEARD:   ON THE PAPERS
DELIVERED          :   25 MAY 2020
PUBLISHED           :   25 MAY 2020
FILE NO/S:   CIV 3118 of 2019
BETWEEN:   ROMANY INVESTMENTS PTY LTD
First Plaintiff

PHILIP RALPH GARVEY as trustee of the THE GARVEY SUPERANNUATION FUND
Second Plaintiff

JENNIFER MAREE GARVEY as trustee for THE GARVEY SUPERANNUATION FUND
Third Plaintiff

AND

PAXTON (WA) PTY LTD in its own capacity and as trustee for THE WRIGHT FAMILY PROPERTY TRUST
First Defendant

JASON SPENCER WRIGHT
Second Defendant

TERESA CLARE FAIRCHILD
Third Defendant

TERESA CLARE FAIRCHILD as executor of the estate of GILLIAN WRIGHT
Fourth Defendant

Catchwords:

Mortgage action - Application for summary judgment - Turns on own facts

Legislation:

Civil Judgments Enforcement Act 2004

Result:

Plaintiffs' application for summary judgment granted

Category: B

Representation:

Counsel:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
Third Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

First Plaintiff	:	CX Law
Second Plaintiff	:	CX Law
Third Plaintiff	:	CX Law
First Defendant	:	Kott Gunning
Second Defendant	:	In Person
Third Defendant	:	In Person
Fourth Defendant	:	In Person

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

Nil

MASTER SANDERSON:

This is the plaintiffs' application for summary judgment. It is supported by an affidavit of Michael La Motte sworn 11 February 2020. A statement of claim was endorsed on the writ of summons which was filed 12 December 2019. In his affidavit Mr La Motte verifies the statement of claim and swears to a belief that there is no defence to the action. Accordingly, the evidentiary onus shifts to the defendants. It is for them to show there is a serious question to be tried. In determining whether they have discharged that onus the version of the facts most favourable to the defendants must be assumed.
There is no real dispute as to the facts. What follows is a summary taken from the statement of claim. The first defendant is a company that has acted as trustee of the Wright Family Property Trust (the Trust). The first defendant's position as the trustee of the Trust is in dispute in another action in this court. The second defendant is the sole director of the first defendant. The third defendant is the company secretary of the first defendant and also the fourth defendant in her capacity as executor of the will of Gillian Wright who died on 28 July 2013.
On or around 9 August 2018 Ascent Securities Pty Ltd (Ascent), as the lender, the first defendant, as borrower and the second, third and fourth defendants as guarantors entered into a loan guarantee agreement for an amount of $1,105,000. This is referred to as the 'Bicton Loan Agreement'. There was a further loan and guarantee agreement for $660,000. This is referred to as the 'Yallingup Loan Agreement'. On the same day the first defendant granted to Ascent a mortgage over a property in Bicton and the fourth defendant granted to Ascent a mortgage over a property in Yallingup. Mortgages were registered over both properties.
The funds were duly advanced to Park Legal Solutions, the first defendant's solicitors at the time, in conformity with the Bicton Loan Agreement and the Yallingup Loan Agreement. Both Agreements with related securities were then assigned to the plaintiffs. By 17 September 2019 the first defendant had failed to pay monies due under both Agreements. Notices of default were issued. The defaults were not remedied and the plaintiffs now seeks possession of both properties and a judgment for the amount outstanding.
As I understand the position of all defendants they do not challenge any of the pleaded facts. What they say is that the chamber summons for summary judgment ought stand adjourned until resolution of what is referred to as the 'trustee proceedings'. As an alternative, it is submitted if judgment were to be entered execution of the judgment ought be delayed pending determination of the trustee proceedings. Each of the defendants advances their position in a slightly different way. But taken in the overall that is the position of each of them.
In the trustee proceedings Adam Wright is challenging the validity of the first defendant's appointment as trustee of the Trust. In summary, it is alleged by Adam Wright that the Trust was established by Deed of Trust dated on or around 1 January 1984. Pursuant to the Trust Deed Edward Litchfield Wright was appointor and Gary Edward Wright, Simon John Wright and Adam Wright were trustees. Edward Wright died prior to 2009. It is alleged Gary Wright, Simon Wright and Adam Wright then became joint appointors of the Trust. Gary Wright died on 14 December 2009. By a Deed dated 17 June 2016 Simon Wright and Adam Wright resigned as trustees of the Trust and appointed the second and third defendants who are the son and daughter of Simon Wright as trustees of the Trust. By a further Deed, which is undated but entered into after 17 June 2016, the second and third defendants resigned as trustees of the Trust and purported to appoint the first defendant as trustee of the Trust. Pursuant to the Trust Deed only the appointors have the power to appoint new trustees. By Deed dated 15 November 2018 Simon Wright, as one of the appointors of the Trust, purported to ratify the appointment of the first defendant as trustee. Adam Wright did not agree with or concur in the appointment of the first defendant as the trustee and Simon Wright being only one of two joint appointors did not have the power to ratify the first defendant's appointment. Accordingly, it is alleged the first defendant's appointment as trustee of the Trust in 2016 was not valid.
The written submissions of the plaintiffs make it clear that for the purposes of the summary judgment application they accept the facts as set out above. It is proper and appropriate to do so. The question then is whether, if these facts are established in the trustee proceedings, the plaintiffs would still be entitled to judgment.
As I have indicated above there is no dispute as to the material facts pleaded by the plaintiffs. The only issue raised by the defendants against the plaintiffs is the issue regarding the validity of the appointment of the first defendant as trustee of the Trust. It is to be borne in mind that the first defendant granted a mortgage over the Bicton property of which he is the registered proprietor. The fourth defendant granted a mortgage over the Yallingup property of which she is the registered proprietor. As is submitted by the plaintiffs, the registered interest is paramount and has priority over any unregistered interests such as the interests of the Trust now claimed by Adam Wright. It may well be Adam Wright has a claim against the first defendant. But those claims cannot stand against the registered interests of the plaintiffs. Moreover, the interest of the plaintiffs were obtained for proper consideration. There is no question of fraud. There is no exception to the rule of indefeasibility engaged by the facts of this case and nothing can stand in the way of the plaintiffs' entitlement under the mortgage.
In summary, even assuming the best possible outcome for the defendants in the trustee proceeding, the rights and entitlements of the plaintiffs under the mortgage must prevail. Accordingly, there is no defence to the action and no benefit would be served by delaying the summary judgment application until the outcome of the trustee proceedings is known.
Nor is there any basis for a stay of execution of the orders. For the defendants to make a case for a stay under the provisions of the Civil Judgments Enforcement Act 2004 it would be necessary for them to establish exceptional circumstances. Nothing in the evidence could justify such a finding. Accordingly there is no basis upon which execution can be stayed.
In the plaintiffs' chamber summons seeking summary judgment they seek immediate delivery of both the Bicton property and the Yallingup property. It is the general practice in this court when orders are made for the possession of property for a party to have 28 days to deliver up possession. In the present environment, given practical limitations occasioned by health concerns, delivery of both properties ought be within 60 days of the date of this order.
On 2 April 2020 the plaintiffs filed what they described as 'supplementary submissions'. Those submissions dealt in detail with the amounts owing under the Bicton loan and the Yallingup loan. They did so by reference to particular provisions of the loan agreements. In relation to the Bicton Loan Agreement the amount outstanding as at 31 March 2020 was $1,184,996.66 plus interest at the rate of $695.21 per day. For the Yallingup Loan Agreement the amount of the outstanding balance was calculated to be $773,669.05 plus interest at the rate of $452.05 per day. Legal fees sought on an indemnity basis pursuant to the provisions of the Loan Agreements was put at $24,712.53. The defendants have not directly addressed the issue of quantum and I will provide them with the opportunity to do so. Any submissions in relation to the amounts ought be filed within seven (7) days of the date of publication of these reasons. Any issues raised will be determined on the papers. If I require further submissions from the plaintiffs they will be notified accordingly. The judgment will date from the date on which final orders are made.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to Master Sanderson
25 MAY 2020