Secure Funding Pty Ltd v Lock - [2022] WASC 276

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   SECURE FUNDING PTY LTD -v- LOCK [2022] WASC 276
CORAM:   DERRICK J
HEARD:   15 AUGUST 2022
DELIVERED          :   15 AUGUST 2022
PUBLISHED           :   25 AUGUST 2022
FILE NO/S:   CIV 2190 of 2018
BETWEEN:   SECURE FUNDING PTY LTD
Plaintiff
AND
PATRICK MICHAEL LOCK
Defendant

Catchwords:

Application under section 15(1) of the Civil Judgments Enforcement Act 2004 (WA) to suspend the enforcement of a judgment - Whether special circumstances justifying the making of a suspension order exist - Turns on own facts

Legislation:

Civil Judgments Enforcement Act 2004 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Not applicable
Defendant	:	In person

Solicitors:

Plaintiff	:	Norton Rose Fulbright Australia
Defendant	:	Not applicable

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

Commonwealth Bank of Australia v PBT (WA) Pty Ltd [2019] WASC 365
Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
Sims v Suda Ltd [2014] WASCA 113
Sims v Suda Ltd [No 2] [2015] WASC 180

DERRICK J:

(This judgment was delivered extemporaneously on 15 August 2022 and has been edited from the transcript).

Introduction

The defendant, Mr Patrick Michael Lock, who is self-represented, has made an urgent application under s 15(1) of the Civil Judgments Enforcement Act 2004 (WA) (CJEA) for an order suspending the enforcement of a judgment (application). The application is supported by an affidavit sworn by the defendant dated 15 August 2022.
The application and supporting affidavit were only accepted for filing by the court late today, outside of business hours. At the time of notifying the defendant by email that the application and affidavit had been accepted for filing the Associate to the Principal Registrar of the court advised the defendant that if he believed that the application was of such urgency that it needed to be dealt with tonight he could contact the court's duty judge.
Earlier this evening, at about 8.00 pm, the defendant requested the urgent listing of the application before me as the duty judge. In response to the defendant's request I arranged for the application to come before me on an urgent basis.
Given the lateness of the hour it has not been possible for my associate to make contact with the plaintiff's solicitors to advise them of the application. However, due to the urgency of the application I have heard the application on an ex parte basis as is provided for by s 15(2) of the CJEA.

Background to the application

The relevant background to the application briefly stated is as follows.
On 2 April 2014 the defendant entered into a loan agreement with the plaintiff pursuant to which the plaintiff advanced to the defendant the principal sum of $440,640. The loan was secured by a mortgage over a property situated at 20 Concorde Drive in High Wycombe (property). The defendant is, and was at all material times, the registered proprietor of the property.
The defendant defaulted under the loan agreement.
On 10 July 2018 the plaintiff commenced by writ of summons and in accordance with O 4AA of the Rules of the Supreme Court 1971 (RSC), a mortgage action claiming possession of the property pursuant to the terms of the loan agreement and the mortgage. The amount outstanding under the loan agreement as at 10 July 2018, according to the plaintiff's statement of claim indorsed on the writ, was in excess of $478,000.
On 15 July 2018 the writ was served personally on the defendant. As required a Form 4 notice was attached to the front of the writ.[1]
[1] RSC, O 4AA r 3; Affidavit of Barbara Anne Finlay, sworn 26 July 2018.
The defendant failed to enter an appearance to the writ.
On 19 November 2018 the plaintiff requested the court to enter default judgment against the defendant on the ground that he had failed to enter an appearance to the writ filed on 10 July 2018 and served on 15 July 2018. The request was made pursuant to O 13 r 6(1) and r 6(2) of the RSC. By the request the plaintiff sought, within 28 days of service of any default judgment, the delivery of vacant possession of the property to the plaintiff.
On 22 November 2018 a registrar of the court entered default judgment in favour of the plaintiff against the defendant. The orders made by the court were, so far as is relevant, as follows:
1.No appearance having been entered by the defendant herein leave is granted to the plaintiff to enter judgment in the terms set out hereunder.
2.The defendant within 28 days of service of this judgment, …deliver up vacant possession of the property at 20 Concorde Drive, High Wycombe Western Australia being Lot 788 on Deposit Plan 55349 and being the whole of the land comprised in Certificate of Title Volume 2681 Folio 792.
3.…
On 15 July 2022, so approximately 3½ years after default judgment had been entered against the defendant, the plaintiff made an application to the court for a Property (Seizure and Delivery) Order to be made against the defendant pursuant to s 95(1) of the CJEA. The application sought an order permitting the seizure and delivery of the property. The grounds for the application were specified to be that the defendant had failed to deliver the property as ordered by the default judgment.
On 15 July 2022 the court, pursuant to s 95(2) of the CJEA, issued a Property (Seizure and Delivery) Order in respect of the property (Seizure Order). By the Seizure Order the court authorised and commanded the sheriff to enter the property, with force if necessary, to evict persons not entitled to be on the property, to take possession of the property and to deliver the property into the plaintiff's possession.
Subsequent to the making of the Seizure Order the deputy sheriff issued to the defendant an undated 'Sheriff Notice Property (Seizure and Delivery) Order' informing the defendant that she was required by the Seizure Order to enter and take possession of the property and to deliver it to the plaintiff, and that she would be attending the property at 9.00 am on 16 August 2022 to formally take possession. Accordingly, the deputy sheriff is due to attend the property tomorrow morning for the purpose of evicting the defendant and any other occupants of the property and taking possession of the property for the benefit of the plaintiff.

Analysis and decision

As I have said, the application is made under s 15(1) of the CJEA.
Section 15(3) of the CJEA provides that on an application made under s 15(1) the Court may 'only make such an order if there are special circumstances that justify doing so'.
Section 15(4) of the CJEA provides that a suspension order may be made for any period and may be made on terms as to costs or otherwise.
In my view the general principles to be applied in determining if there are special circumstances that justify the suspension of the enforcement of the default judgment entered against the defendant by the seizure and delivery of the property pursuant to the Seizure Order can, in the circumstances of the present case, be stated as follows:[2]
1.A successful litigant will ordinarily be entitled to enforce a judgment;
2.It is for the applicant for a suspension order to move the court to a favourable exercise of the discretion, that is, to establish that there are special circumstances that justify the departure from the ordinary rule;
3.In the case of a default judgment, the central issue will be whether the grant of a suspension order is perceived to be necessary to preserve the subject matter or the integrity of the litigation or whether a refusal to make a suspension order could create practical difficulties in respect of any relief which may be granted following any successful application to vary or set aside the judgment; and
4.Even if the matters in point 3 above can be demonstrated, the suspension order will generally still be refused unless it can be established that any application to vary or set aside the default judgment has ultimately reasonable prospects of success.
[2] Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308; Sims v Suda Ltd [2014] WASCA 113 [5]; Sims v Suda Ltd [No 2] [2015] WASC 180 [30]; Commonwealth Bank of Australia v PBT (WA) Pty Ltd [2019] WASC 365 [22].
In his affidavit filed in support of the application the defendant, in essence, puts forward three grounds for requesting the suspension order.
The first ground advanced by the defendant is that he intends to apply to 'vary or set aside' the default judgment. In this context the defendant deposes that he 'did not attend the hearing because [he] did not receive notification of the proceedings'.[3] I take the defendant's reference to 'the proceedings' to be a reference to the application for default judgment.
[3] Defendant's affidavit, par 6.
The second ground advanced by the defendant relates to the results of an Australian Financial Complaints Authority (AFCA) investigation.[4] The defendant deposes that after the default judgment was entered against him he made a complaint to AFCA in regards to his default under the loan agreement. He deposes that in July 2018 AFCA, in response to his complaint, commenced an investigation into his default under the loan agreement. He deposes that as a result of the AFCA investigation a determination issued on 29 March 2022. He deposes that the determination by AFCA states as follows (grammatical errors corrected):
[The plaintiff] was in fact in breach of the loan agreement on 7 counts by failing to acknowledge my hardship when they were aware I was unemployed at the time. As a result of these breaches they were ordered to reverse all default interest charged between May 2017 to 29 March 2022, reverse all default administration fees and default management fees charged between May 2017 to the 29 March 2022, credit my loan account for the amount of $5000 for non-financial loss.
[4] Defendant's affidavit, par 7 - 8.
The third ground advanced by the defendant is, in essence, that he will suffer significant hardship if a suspension order is not granted.[5] The defendant deposes that he has thus far been unable to secure alternative accommodation given the current rental market. He deposes that the current rental market has made it impossible for him to find alternative accommodation. He deposes that if he, his partner and 12-week-old daughter are evicted from the property they will have nowhere to go, that they do not have family or friends that can support them and that they would be made homeless and forced to live on the streets.
[5] Defendant's affidavit, par 5 and 9 - 10.
I will deal with each of the grounds for the application put forward by the defendant in turn.
As to the first of the grounds, there was, of course, no hearing because default judgment was entered. The entry of default judgment did not require a hearing.
In relation to the defendant's assertion that he did not receive notification of the proceedings, that is, of the plaintiff's intention to apply for default judgment, I have had reference to an affidavit on the court file affirmed by Ms Indianna Somerville on 19 October 2018. Ms Somerville's affidavit is one of the affidavits that was filed by the plaintiff in support of its application for leave to enter default judgment against the defendant.
In her affidavit Ms Somerville deposes to the fact that she is a graduate employed by the plaintiff's solicitor.[6] She deposes that on 12 October 2018 she placed a number of documents addressed to the defendant at the property inside a windowed envelope with a $1 stamp affixed to the envelope and that she sealed the envelope.[7] She identifies the documents that were placed in the envelope as a letter from the plaintiff's solicitors dated 12 October 2018, a Form 36A notice to the defendant of an intention to request the court to make orders for possession, foreclosure or sale of the property, and a Form 4 notice to the defendant in an action for possession, foreclosure or sale of a mortgaged property that was attached to the writ of summons and the statement of the claim filed in the action.[8] Copies of these documents are annexed to Ms Somerville's affidavit.[9]
[6] Affidavit of Ms Somerville sworn 19 October 2018, par 1.
[7] Affidavit of Ms Somerville sworn 19 October 2018, par 3.
[8] Affidavit of Ms Somerville sworn 19 October 2018, par 3. The Form 36A, writ and Form 4 were required to be served on the defendant under RSC, O 13 r 6(2)(a).
[9] Affidavit of Ms Somerville sworn 19 October 2018, par 4.
In her affidavit Ms Somerville deposes that on Friday 12 October 2018 at around 3.38 pm she placed the sealed envelope in an Australia Post red post box located at the Australia Post outlet at 66 St Georges Terrace in Perth.[10] Ms Somerville further deposes that based on her review of the 'Delivery timeframes for letters delivered to the regular timetable' on the 'Regular letters' webpage of the Australia Post website, she believes that the letter she posted on 12 October 2018 would have been received by the respondent by no later than 22 October 2018.[11]
[10] Affidavit of Ms Somerville sworn 19 October 2018, par 5.
[11] Affidavit of Ms Somerville sworn 19 October 2018, par 6.
In light of the contents of Ms Somerville's affidavit, I am satisfied that the defendant was properly served with notification of the plaintiff's intention to apply for default judgment and for possession of the property and was therefore properly informed of the application.[12] In any event, the defendant has had ample time to make an application to set aside the default judgment that was entered against him in November 2018 but has not done so.[13] In all these circumstances I am not satisfied that the defendant has any reasonable prospect of varying or setting aside the default judgment on the ground that he did not 'receive notification of the proceedings'. It follows that I am also not satisfied that the first of the defendant's grounds for seeking the suspension order provides a basis for concluding that there are special circumstances justifying the making of such an order.
[12] RSC, O 13 r 6(2), O 74 r 1(1), O 74 r 5.
[13] The default judgment was served on the defendant on or about 28 February 2019 by way of substituted service (ordinary pre-paid post) pursuant to an order of the court made on 28 February 2019 under RSC, O 74 r 4: Affidavit of Indianna Lee Somerville affirmed on 1 March 2019. The statement in par 5 of Ms Somerville's affidavit that she effected substituted service of the default judgment on 26 October 2018 is, when read in light of par 3, 4 and 6 of the affidavit and the annexures to the affidavit, an obvious typographical error.
As to the second ground, accepting what the defendant states about the AFCA inquiry and the results of the inquiry, the charges and fees that the plaintiff is required to reverse and the amount that the plaintiff is required to credit to the defendant's account clearly do not amount to anything like the outstanding amount under the loan agreement.[14] In these circumstances I am not satisfied that AFCA's determination provides a basis for concluding that any application to vary or set aside the default judgment would have reasonable prospects of success. I am therefore also not satisfied that the second of the grounds put forward by the respondent in support of the application provides a basis for concluding that there are special circumstances justifying the suspension of the enforcement of the judgment.
[14] According to par 29 of an affidavit affirmed by Matthew Grahame Menzies on 13 November 2018 in support of the plaintiff's request for the court to enter default judgment against the defendant, the amount owing by the defendant to the plaintiff under the loan agreement and the mortgage as at 13 November 2018 was $494, 922.82. In his affidavit Mr Menzies deposes that he is an Asset Realisation Officer acting on behalf of the plaintiff.
As to the third ground, I accept, in light of the defendant's statements in his affidavit, that the adverse consequences for him and those close to him that will inevitably flow from not making a suspension order will be very significant. However, the fact that the defendant and those close to him will suffer these adverse consequences does not, in my view, provide a basis for concluding that the requisite special circumstances exist.
For the reasons I have stated I am not satisfied that there are special circumstances within the meaning of s 15(3) of the CJEA that justify the making of the requested suspension order. The application is therefore dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CP
Associate to the Honourable Justice Derrick
25 AUGUST 2022