Schafer v RHG Mortgage Corporation Limited
[2015] WASCA 11
•21 JANUARY 2015
SCHAFER -v- RHG MORTGAGE CORPORATION LIMITED [2015] WASCA 11
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASCA 11 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:110/2014 | 10 NOVEMBER 2014 | |
| Coram: | NEWNES JA MURPHY JA | 21/01/15 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Appellants' application for a stay adjourned, and the application otherwise dismissed Respondent's application adjourned | ||
| B | |||
| PDF Version |
| Parties: | BARBARA MAGDALENA SCHAFER UWE SCHAFER RHG MORTGAGE CORPORATION LIMITED |
Catchwords: | Practice and procedure Whether grounds of appeal have reasonable prospects of success Supreme Court (Court of Appeal) Rules 2005 (WA) r 43(2)(g)(i) Appeal from summary judgment Adjourned until appellants' case filed Practice and procedure Application for stay of enforcement proceedings Adjourned until appellants' case filed Practice and procedure Whether primary decision can be set aside on an interlocutory application Whether Court of Appeal can order specific performance on an interlocutory application No basis to do so |
Legislation: | Consumer Credit Legislation Amendment (Enhancements) Act 2012 (Cth) National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth), sch 5, pt 2 National Consumer Credit Protection Act 2009 (Cth), sch 1 s 72, sch 1 s 73, sch 1 s 74, sch 1 s 89A, sch 1 s 193, sch 1 s 204 Supreme Court (Court of Appeal) Rules 2005 (WA), pt 5 r 43(2)(g)(i) |
Case References: | RHG Mortgage Corporation Ltd v Schafer [2014] WASC 297 Tradesman Technologies Pty Ltd v Ameduri [2012] WASCA 168 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : SCHAFER -v- RHG MORTGAGE CORPORATION LIMITED [2015] WASCA 11 CORAM : NEWNES JA
- MURPHY JA
- First-named Appellant
UWE SCHAFER
Second-named Appellant
AND
RHG MORTGAGE CORPORATION LIMITED
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : CHANEY J
Citation : RHG MORTGAGE CORPORATION LTD -v- SCHAFER [2014] WASC 297
File No : CIV 1479 of 2013
Catchwords:
Practice and procedure - Whether grounds of appeal have reasonable prospects of success - Supreme Court (Court of Appeal) Rules 2005 (WA) r 43(2)(g)(i) - Appeal from summary judgment - Adjourned until appellants' case filed
Practice and procedure - Application for stay of enforcement proceedings - Adjourned until appellants' case filed
Practice and procedure - Whether primary decision can be set aside on an interlocutory application - Whether Court of Appeal can order specific performance on an interlocutory application - No basis to do so
Legislation:
Consumer Credit Legislation Amendment (Enhancements) Act 2012 (Cth)
National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth), sch 5, pt 2
National Consumer Credit Protection Act 2009 (Cth), sch 1 s 72, sch 1 s 73, sch 1 s 74, sch 1 s 89A, sch 1 s 193, sch 1 s 204
Supreme Court (Court of Appeal) Rules 2005 (WA), pt 5 r 43(2)(g)(i)
Result:
Appellants' application for a stay adjourned, and the application otherwise dismissed
Respondent's application adjourned
Category: B
Representation:
Counsel:
First-named Appellant : No appearance
Second-named Appellant : In person
Respondent : Mr J Lin
Solicitors:
First-named Appellant : No appearance
Second-named Appellant : In person
Respondent : Jackson McDonald
Case(s) referred to in judgment(s):
RHG Mortgage Corporation Ltd v Schafer [2014] WASC 297
Tradesman Technologies Pty Ltd v Ameduri [2012] WASCA 168
- REASONS OF THE COURT:
Introduction
1 This matter was listed for hearing on 10 November 2014. The court considered two interlocutory applications:
(a) the appellants' application dated 24 September 2014; and
(b) the respondent's application dated 1 October 2014.
2 The appeal in this matter arises out of a decision by Chaney J on 21 August 2014.
3 The dispute between the parties in the primary court involved a claim by the respondent for money said to be owing to it under a loan agreement, and for possession of the property the subject of the mortgage granted by the first appellant securing the monies advanced under the loan agreement. The respondent applied for summary judgment, which was granted by his Honour. The appeal is against that decision by his Honour.
Procedural history
4 On 25 March 2013, the respondent filed a writ of summons indorsed with a statement of claim against the first appellant only. On 23 April 2013, Master Sanderson made an order for substituted service on the first appellant.
5 On 2 April 2014, the respondent filed an application for summary judgment. On 16 April 2014, the second appellant filed an affidavit as an 'interested non-party' which requested that he be added as a party. On 17 April 2014, Master Sanderson ordered that the second appellant be added as a second defendant to the action. The respondent amended its statement of claim and application for summary judgment, and claimed:
(a) against both appellants, the balance outstanding of the loan agreement as varied;
(b) as against the first appellant, possession of the property; and
(c) as against the first appellant, the amount owing under the mortgage.
6 The application for summary judgment was heard by Chaney J on 12 August 2014. As noted earlier, on 21 August 2014, Chaney J delivered judgment.
The primary judge's reasons
7 The primary judge's reasons are recorded in RHG Mortgage Corporation Ltd v Schafer [2014] WASC 297. (All references to paragraph numbers below are references to paragraph numbers in his Honour's reasons unless otherwise indicated.)
8 At the outset, Chaney J granted an extension of time within which the respondent could file its application for summary judgment. His Honour allowed the extension on the basis that the delay was 'largely attributable to indulgences granted to the [appellants] … in the face of … acknowledgment of liability' [9].
9 Chaney J found that the following facts were not in issue:
• The respondent entered into a loan agreement with the appellants on 6 June 2007, with variations on 20 April 2010, 18 November 2011 and 6 April 2012 (Agreement) [10(ii)].
• The first appellant executed a mortgage over her property in Innaloo to secure the amount of the loan the subject of the Agreement [10(iii)].
• The mortgage was registered at Landgate [10(iv)].
• The respondent advanced a loan of $471,750 and the appellants received the amount of the loan [10(v)].
• The appellants defaulted in payment under the terms of the Agreement [10(vi)].
• The balance outstanding under the Agreement, as at 12 June 2014, was $613,773.25 plus accruing interest and costs [10(viii)].
10 The second appellant swore an affidavit explaining that because there was no valid evidence before the court and the respondent's claim had 'no substance ab initio', he found it impossible to attempt to defend the action [13]. Chaney J said that it was not easy to discern the precise bases upon which the appellants resisted the claim but, on the materials available to him, his Honour identified three issues for consideration [13], [16] - [26], [27] - [43], [44] - [50].
11 First, Chaney J noted that the appellants stated in oral submissions that they did not dispute their liability to repay the loan amount if, in fact, the respondent was the true lender of the funds. The appellants contended that the respondent was a mere 'go-between' as between the borrower and the true lender, and was thus 'masquerading as a lender' [16] and consequently did not provide valuable consideration [17] and had made a fraudulent misrepresentation [20]; that since it was not the respondent advancing its own funds, it could not recover from the appellants the money advanced to them; further, that since the true identity of the lender is unknown, the appellants had no contract with the 'true lender' [21]. Chaney J found the appellants' contentions to be untenable. His Honour found that the money advanced to the appellants was raised through a form of investment, and that the source of funds is not a matter which is required to be disclosed to a borrower. His Honour found that the simple position was that the respondent was bound to advance funds pursuant to the Agreement, which the respondent did, and the appellants became liable to repay the funds to the respondent in accordance with the Agreement and the mortgage [22] - [26].
12 Secondly, there was a question concerning a variation to the Agreement [29] - [30], [37] - [41] (in the applications to this court the parties referred to this as the 'fourth variation'). It was common ground that the appellants were in arrears by October 2012. The respondent offered to capitalise the arrears. The respondent sent a loan variation agreement to the appellants on 3 October 2012, which the appellants signed and returned to the respondent by mail. This document was never received by the respondent. The respondent then sent another copy of the same variation to the appellants on about 2 November 2012 [29]. On 6 November 2012, the appellants added to the document an additional clause and signed and returned the document to the respondent. The additional clause stated, in effect, that the respondent would provide information regarding the Agreement to the appellants upon written request [30]. The appellants alleged that this additional clause had contractual effect, and that the respondent was in breach of it. In particular, the appellants alleged that in December 2012 they wrote to the respondent demanding certain documents (although the demands were not adduced in evidence), and that the respondent had not complied with the demand. On 24 December 2012, the appellants sent the respondent a 'Notice of Breach of Agreement' [34]. The appellants alleged that the respondent was not entitled to commence proceedings against them until it had complied with the requests for the provision of documents [34] - [35].
13 Chaney J found that even if the additional provision were an operative provision of the Agreement, its breach would not result in all of the other contractual obligations of the parties being suspended or terminated [42]. His Honour said:
If the plaintiff was in breach of an obligation to provide documents of the character described in the additional provision, that breach would not result in the consequences asserted in the Notice of Breach, or any of them. It is not a breach the nature of which would give rise to an entitlement to terminate the loan agreement. At best, the breach may give rise to an entitlement to seek an order for specific performance, or, for damages if some damage could be demonstrated (which it has not). Even if the additional provision was an operative provision of the loan agreement, its breach would not result in all of the other contractual obligations of the parties being somehow suspended or terminated [42].
14 Thirdly, the appellants alleged, in effect, that they sent, by way of a letter dated 31 January 2014, a 'Notice of Financial Hardship' to the respondent within the meaning of s 72 of the National Credit Code (the Code) [44] - [47]. The Code appears as schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) (National Credit Act).
15 The letter dated 31 January 2014 stated:
NOTICE OF FINANCIAL HARDSHIP
Dear Glenn,
Further to the correspondence we provided on 06 Jan 2014, and as we haven't heard back yet, please take note of the following.
Due to Barbara's fathers ailing health throughout 2013, she was required to travel to Germany numerous times. Her father passed in later December. This has disallowed her from properly establishing herself in a new career since completing her studies in psychology/counselling earlier in the year.
I, Uwe Schafer, was left looking after the kids and keeping the family financially afloat. A major downturn in my web design business has all but wiped out earlier cashflow in place to the point where the family is now under EXTREME financial hardship.
We fully intend to bring the account back into order as soon as possible once the situation has stabilised.
Additionally, we advise that despite near two years of demanding further and better particulars, the question of RHG's proper standing to bring a claim in the matter has not yet been answered. All requests for certain documentation were openly rejected by RHG despite lawful requirements to assist, in particular, providing us an opportunity to examine the original bona fide wet ink signature loan agreement so as to establish that RHG Mortgage Corporation Limited is the genuine creditor to the loan. We hereby afford RHG this final opportunity to provide us within seven days of the date of this notice an examination of the original bona fide wet ink signature loan agreement. If it is not forthcoming, it shall be taken as an equitable estoppel whereby RGH accepts and agrees it is not the creditor to the loan; has no legal status to pursue the loan and waives all rights to pursue the loan any further.
Even engagement of FOS did not assist with any provision. All remedy in that respect was denied.
Notwithstanding the above lack of proof of creditor status, we are prepared to make a good faith offer of $500 per month until further notice to maintain 'CLEAN HANDS IN EQUITY', enabling us to recover the family finances whilst sorting out all matters with the immediate family in Germany since the father's passing.
Even $500 is currently beyond our means; however, we assure you that we will do whatever it takes to honour this arrangement. A personal cheque of $500 is attached as the first payment.
We look forward to your kind consideration in the matter.
16 A cheque for $500 was enclosed, and debited against the appellants' indebtedness [46].
17 Chaney J said:
Section 74 of the National Consumer Credit Code permits a debtor to apply to a court where no change to the credit contract is made following a hardship notice, seeking an order to change the credit contract. The court is not able to reduce the amount ultimately payable by the debtor to the credit provider under the contract even if it changes the contract. The court may also stay enforcement proceedings [48].
18 Chaney J found that there was no evidence of any attempt by the appellants to seek any change in the credit contract as a result of the failure of the credit provider to respond to the hardship notice. Further, his Honour said that the court is not able to reduce the amount ultimately payable by the debtor, and that therefore, there was nothing in the Code to prevent the respondent from continuing proceedings [44] - [50].
19 The appellants also raised issues regarding affidavits sworn by Mr W Handel on behalf of the respondent. However, his Honour found that there was no substantial dispute as to the contents of the affidavits and there was no reason why they should not have been accepted and relied upon [53] - [56].
20 Chaney J concluded that the appellants failed to demonstrate any arguable defence, that there was no real question to be tried, and granted summary judgment in favour of the respondent.
The orders of Chaney J on 21 August 2014
21 His Honour ordered:
1. The plaintiff [respondent] have leave to bring this application.
2. Pursuant to O 14 r 1 of the Rules of the Supreme Court there by judgment for the plaintiff [respondent].
3. The first defendant [first appellant] within 28 days of service of this judgment on the first defendant [first appellant] deliver up to the plaintiff [respondent] vacant possession of the [Innaloo] property …
4. The defendants [appellants] pay to the plaintiff [respondent] the sum of $626,520.96 being the amount due as of today's date under the Loan Agreement between the plaintiff [respondent] and the defendants [appellants], together with interest in the sum of $130.97 per day from 22 August 2014 until payment.
Appeal
22 The appeal notice was filed on 10 September 2014.
23 In their submissions filed 17 October 2014, the appellants identified their proposed grounds of appeal (an appellants' case has not yet been filed). In effect, the proposed grounds of appeal contend that his Honour erred as follows:
1. There was no evidence to support the respondent's allegation that it had performed its promise to advance funds to the appellants under the loan agreement, in that the money 'bypassed' the respondent. This matter is said to raise related questions as to whether the respondent was a 'pretender lender'; whether there was a lack of consideration; whether the respondent provided an unsolicited financial product to the appellants; whether the respondent misled the appellants as to who would advance the monies; and whether the respondent 'never purchased the Power of Attorney and fraudulently registered its title interest at Landgate'.
2. The respondent was in breach of the fourth variation of the loan agreement by failing to provide certain documents to the appellants.
3. The respondent breached s 72 of the Code and consequently any enforcement action is in contravention of s 89A of the Code.
The interlocutory applications
24 On 24 September 2014, the appellants applied for orders that:
• the primary court's decision be set aside;
• a stay of enforcement proceedings; and
• an order for specific performance pursuant to the respondent's breach of agreement.
25 On 26 September 2014, counsel for the respondent undertook to the court that the respondent would not take any steps to enforce the judgment until the application for a stay was determined (respondent's submissions 10 October 2014 par 12).
26 On 1 October 2014, the respondent applied for an order that the appeal be dismissed on the basis that none of the grounds of appeal has a reasonable prospect of success. The respondent appeared to rely upon pt 5 r 43(2)(g)(i) of the Supreme Court (Court of Appeal) Rules 2005 (WA) (Court of Appeal Rules).
27 The appellants filed three affidavits in support of their application, two sworn by the second appellant on 24 September 2014, and one sworn by the first appellant on 7 October 2014. The respondent filed two affidavits on 1 October 2014, one in opposition to the appellants' application for a stay and one in support of its own application.
28 The appellants' first affidavit, filed 24 September 2014, essentially contended that there was a breach of the Agreement and that, accordingly, the respondent was not able to issue a default notice; that Chaney J disregarded the Code and misconstrued their claims; and that upon the proper construction of the Code the respondent could not enforce proceedings against the appellants. The appellants also referred to the claim for 'specific performance' of the Agreement, that is, a claim for the respondent to provide the appellants with the information requested. The appellants also alleged that Chaney J erred in granting summary judgment as there were 'numerous triable issues of which the court was aware', namely the alleged breach of the Code and the alleged breach of Agreement by the respondent. The appellants also made reference to the fact that the effect of the summary judgment would be that the appellants will lose their family home (page 15). The affidavit concluded by making miscellaneous scurrilous accusations about Chaney J and the judiciary in general.
29 The appellants' second affidavit, also filed 24 September 2014, alleged that Chaney J misconstrued their claims. In essence, the appellants deposed that they were not concerned with where the money for the loan originally came from, but rather who 'provided' the funds on the day of settlement to the appellants.
30 The appellants' third affidavit was filed on 7 October 2014. The appellants deposed that they terminated the Agreement on 6 October 2014 as a result of the alleged breaches by the respondent, ie, the alleged failures to provide credit and to provide documents. The appellants also made various criticisms of Chaney J's handling of the matter and asserted, in effect, that he was guilty of apprehended bias. It should be said at the outset that having considered the materials referred to by the appellants, those claims are totally unfounded.
31 The respondent's affidavit, filed 1 October 2014, was to the effect that the property in question had an indicative value in the sum of $580,000 - $620,000.
32 At the hearing on 10 November 2014, the appellants indicated that they wished an application they had filed on 5 November 2014 to be dealt with that day. They said that they had been informed by the Court of Appeal office (including by an amended registrar's notice) that that matter had also been listed for hearing on 10 November 2014.
33 The appellants' application filed 5 November 2014 sought orders in the following terms:
• Reopening of transaction.
• Compensation orders.
34 The court on 10 November 2014 declined to deal with the merits of the appellants' application filed 5 November 2014 ahead of dealing with the appellants' application dated 24 September 2014 and the respondent's application dated 1 October 2014, on the basis of the short notice of the application. The court also observed that there was a question as to whether this court had jurisdiction to make orders of the kind sought.
35 At the hearing on 10 November 2014, the appellants placed particular reliance on s 89A of the Code. Mr Schafer, the second appellant, submitted on behalf of the appellants that s 89A applied on the basis that he was joined to the proceedings at a time after the notice of hardship was given.
36 Counsel for the respondent accepted in effect that the respondent had not responded to the appellants' letter of 31 January 2014, and accepted, for the purposes of argument, that it was a notice under s 72 of the Code.
37 The respondent nevertheless submitted, first, that the proceedings had already commenced; secondly, that it was only on the second appellant's own application, which the respondent had opposed, that the second appellant became a defendant; and thirdly, if there were any merit, it would only go to the defence of the second appellant, because proceedings were commenced against the first appellant before any hardship notice was given.
38 Thus, both parties at the hearing on 10 November 2014 proceeded on the basis that s 89A of the Code applied to the particular circumstances of this case, although the basis for that was not articulated.
39 A number of the relevant provisions of the Code, and other statutory provisions, are set out below.
The Code and statutory provisions
The Code
Division 3 - Changes on grounds of hardship and unjust transactions
72 Changes on grounds of hardship
Hardship notice
(1) If a debtor considers that he or she is or will be unable to meet his or her obligations under a credit contract, the debtor may give the credit provider notice (a hardship notice), orally or in writing, of the debtor's inability to meet the obligations.
Note: If the debtor gives the credit provider a hardship notice, there may be requirements (beyond those in section 88) that the credit provider must comply with before beginning enforcement proceedings - see section 89A.
Further information
(2) Within 21 days after the day of receiving the debtor's hardship notice, the credit provider may give the debtor notice, orally or in writing, requiring the debtor to give the credit provider specified information within 21 days of the date of the notice stated in the notice. The information specified must be relevant to deciding:
(a) whether the debtor is or will be unable to meet the debtor's obligations under the contract; or
(b) how to change the contract if the debtor is or will be unable to meet those obligations.
(3) The debtor must comply with the requirement.
Note: The credit provider need not agree to change the credit contract, especially if the credit provider:
(a) does not believe there is a reasonable cause (such as illness or unemployment) for the debtor's inability to meet his or her obligations; or
(b) reasonably believes the debtor would not be able to meet his or her obligations under the contract even if it were changed.
Notice of decision on changing credit contract
(4) The credit provider must, before the end of the period identified under subsection (5), give the debtor a notice:
(a) that is in the form (if any) prescribed by the regulations and records the fact that the credit provider and the debtor have agreed to change the credit contract; or
(b) that is in the form (if any) prescribed by the regulations and states:
(i) the credit provider and the debtor have not agreed to change the credit contract; and
(ii) the reasons why they have not agreed; and
(iii) the name and contact details of the approved external dispute resolution scheme of which the credit provider is a member; and
(iv) the debtor's rights under that scheme.
Civil penalty: 2,000 penalty units.
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Regulations may prescribe shorter periods for credit contracts
(6) The regulations may provide for subsections (2), (3), (4) and (5) to have effect in relation to credit contracts prescribed by the regulations as if a particular reference in subsection (2) or (5) to a number of days were a reference to a lesser number of days prescribed by the regulations.
73 Notice of change
(1) A credit provider that enters into an agreement with the debtor to change the credit contract as a result of a hardship notice by the debtor must, not later than 30 days after the date of the agreement, give to the debtor, and any guarantor under a guarantee related to the contract, a written notice setting out:
(a) particulars of the change in the terms of the credit contract; and
(b) any information required by the regulations.
Criminal penalty: 50 penalty units.
(2) The credit provider may, under subsection (1), give a person particulars only of a matter as changed instead of particulars of the change, but only if the credit provider:
(a) makes it clear to the person that the matter has changed; or
(b) issues to the person a new set of terms and conditions relating to the credit contract.
(3) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
74 Changes by court
- (1) If the credit provider does not change the credit contract as a result of a hardship notice by the debtor, the debtor may apply to the court to change the terms of the credit contract.
(2) The court may, after allowing the applicant, the credit provider and any guarantor a reasonable opportunity to be heard:
(a) by order change the credit contract (but not so as to reduce the amount ultimately payable by the debtor to the credit provider under the contract), and make such other orders as it thinks fit; or
(b) refuse to change the credit contract.
(3) The court may, if it thinks it appropriate in the circumstances, stay any enforcement proceedings under the credit contract, and make such other orders as it thinks fit, until the application has been determined.
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89A Effect of hardship notices on enforcement
(1) This section applies if:
(a) a credit provider is required to give a default notice under section 88 before beginning enforcement proceedings; and
(b) before or after the credit provider gives the default notice, the debtor gives the credit provider a hardship notice (the current hardship notice) under section 72; and
(c) either:
(i) in the 4 months before the day the current hardship notice is given, the debtor had not given the credit provider another hardship notice; or
(ii) in that 4-month period, the debtor had given the credit provider one or more other hardship notices, but the credit provider reasonably believes that the basis on which the current hardship notice was given is materially different from the bases on which the other hardship notices were given.
(a) the credit provider has given the debtor a notice under paragraph 72(4)(b), in response to the current hardship notice, stating that the credit provider and debtor have not agreed to change the credit contract; and
(b) the period of 14 days, starting on the day the credit provider gives the notice under paragraph 72(4)(b), has expired.
Criminal penalty: 50 penalty units.
Note: The credit provider must allow the debtor at least 30 days from the date of the default notice to remedy the default—see section 88. The 14-day period in subsection (2) may end before, at the same time as, or after the end of the period for remedying the default specified in the default notice.
(3) However, the credit provider may take possession of mortgaged goods if the credit provider reasonably believes that:
(a) the debtor or mortgagor has removed or disposed of the mortgaged goods, or intends to remove or dispose of them, without the credit provider's permission; or
(b) urgent action is necessary to protect the goods.
(4) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
40 Section 193 of the Code provides:
193 Effect of non-compliance
(1) A credit contract, mortgage or guarantee or any other contract is not illegal, void or unenforceable because of a contravention of this Code unless this Code contains an express provision to that effect.
(2) Except as provided by this section, this Code does not derogate from rights and remedies that exist apart from this Code.
42 Also, by s 204 of the Code, the term 'enforcement proceedings' means:
(a) for a credit contract, consumer lease or guarantee -
proceedings in a court to recover a payment due under the contract, lease or guarantee; or
(b) for a consumer lease or mortgage - taking possession of property under the lease or mortgage; or
(c) for a mortgage - taking any other action to enforce the mortgage.
43 Section 89A was introduced by the Consumer Credit Legislation Amendment (Enhancements) Act 2012 (Cth). Schedule 5 to the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth) makes provision for the application of the provisions of the Consumer Credit Legislation Amendment (Enhancements) Act. Part 2 of sch 5 deals with s 89A.
Application for stay - relevant principles
44 In relation to a stay of enforcement, Pullin JA in Tradesman Technologies Pty Ltd v Ameduri [2012] WASCA 168 said (relevantly) [21] - [22]:
The application for a suspension order is made under s 15 of the Civil Judgments Enforcement Act 2004 (WA). Alternatively, the court has power under its rules to grant an interim order in the form of a stay of execution pending the hearing of the appeal …
Both under s 15 and in an application for a stay, the principles are as follows:
(a) The successful litigant is ordinarily entitled to enforce a judgment pending the determination of any appeal.
(b) It is for the applicant for a stay to move the court to a favourable exercise of its discretion. Under s 15(3) this court may only make a suspension order if there are “special circumstances” that justify doing so and in an application for a stay under the rules this is also a usual requirement.
(c) The central issue will be whether the grant of a stay is perceived to be necessary to preserve the subject matter or the integrity of the litigation or whether a refusal of a stay could create practical difficulties in respect of the relief which may be granted on appeal. This may shortly be described as requiring the court to consider whether the right of appeal will be rendered nugatory if a stay is not granted.
(d) If it can be demonstrated that the right of appeal will be rendered nugatory if a stay is not granted, the stay will generally still be refused unless it can be established that the appeal has ultimately reasonable prospects of success.
(e) Finally, the stay may still be refused where it appears that the balance of convenience does not lie in favour of the applicant where, for example, the grant of a stay will occasion hardship to the respondent which may not be alleviated by the terms upon which the stay may be granted: Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308.
Disposition
The respondent's application dated 1 October 2014
45 It is convenient to refer first to the respondent's application, given that it deals with the question of whether any of the grounds of appeal have a reasonable prospect of succeeding, and that that matter is also relevant to the question of a stay.
46 It is necessary to recall, when considering this question, that the appellants have not yet filed an appellants' case. Also, an important aspect of the appellants' arguments involve the contention that the respondent could not, in effect, proceed with the summary judgment application against either or both appellants by reason of the operation of s 72 and s 89A of the Code.
47 As the appellants contended in their submissions, the primary judge made no reference to s 89A of the Code, although on the materials presently available to this court, it is difficult to see that his Honour's attention was drawn to that provision during the hearing of the summary judgment application.
48 Whilst the parties did not address it at the hearing on 10 November 2014, there may be a threshold question as to whether s 89A applied to the subject matter of the action. In particular, there might be a question as to whether s 89A applies only to credit contracts and mortgages entered into after the commencement of sch 1 to the Consumer Credit Legislation Amendment (Enhancements) Act, which would appear to be 1 March 2013.
49 In the circumstances, it is not appropriate at this point to reach any final conclusion as to whether proposed ground 3 has any reasonable prospect of success. The appropriate course is to permit the appellants to file an appellants' case dealing, amongst other things, with the threshold issue of whether s 89A had any application to the particular circumstances of the case. The respondent's application to strike out may be the subject of further consideration after the appellants' case has been filed. As it is inappropriate to deal with the grounds in a piecemeal fashion, the whole of the respondent's application to strike out, including in relation to proposed grounds 1 and 2, should be adjourned until further order.
The appellants' application dated 24 September 2014
50 The primary judge's decision cannot be 'set aside' on an interlocutory application such as this. That would only occur if the appeal were not struck out and the appeal was ultimately successful. Also, there is no proper basis upon which this court could make an interlocutory order for specific performance in favour of the appellants in respect of the alleged breach of the alleged fourth variation. Those two aspects of the appellants' application dated 24 September 2014 should be dismissed.
51 Given that the appellants' prospects of success are relevant to their application for a stay, that application should also be adjourned until further order. If appropriate, both the application for a stay and the respondent's application to strike out could be heard together on a further date to be fixed after the appellants have filed the appellants' case.
Conclusion
52 For the foregoing reasons, in relation to the appellants' application dated 24 September 2014:
(a) the appellants' application for a stay should be adjourned until further order;
(b) the application should otherwise be dismissed.
53 The respondent's application dated 1 October 2014 should be adjourned until further order.
54 The appellants should file and serve an appellants' case by a date to be fixed, which should be as soon as reasonably practicable.
Other matters
55 On 24 November 2014, the court received (although it was not filed) an affidavit by the second-named appellant which contended, in effect, that the respondent's affidavit evidence before Chaney J was unreliable and lacked cogency. The appellants did not apply for leave to rely on it.
56 Also, on 21 November 2014, the appellants sent to the court an affidavit by the second appellant. It was to the effect that the Court of Appeal office had directed that the appellants' application dated 5 November 2014 would be dealt with at the hearing on 10 November 2014. As noted earlier, at the hearing on 10 November 2014, the court indicated that it would not then hear the merits of that matter. The appellants did not seek leave to rely on this additional affidavit but even if they had, it would not alter the disposition of the two earlier applications in the manner referred to above.
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