Spencer v Bamber - [2011] NSWSC 141

Supreme Court

New South Wales

Medium Neutral Citation: Spencer v Bamber [2011] NSWSC 141
Decision date: 01 March 2011
Before: White J
Decision:
Refer to paras 39-43 of judgment

Catchwords: REAL PROPERTY - application to extend caveat - where mortgagee obtained foreclosure order and become registered proprietor - serious question to be tried as to whether foreclosure order validly made - pre-conditions for making of foreclosure order may not have been satisfied - whether balance of convenience favours extension of caveat - if foreclosure order set aside equity of redemption revived and defendants position as mortgagees restored - mortgagees entitled to exercise power of sale - balance of convenience does not favour extension of caveat - where defendants undertake to preserve ability of plaintiff to restore equity of redemption if succeed at final hearing
Legislation Cited: Real Property Act 1900
Conveyancing Act 1919
Cases Cited: Lew v Bluescope Distribution Pty Limited [2010] NSWSC 794
Cameron v Cole (1944) 68 CLR 571
Solid Holdings v IMFML Finance [2008] NSWSC 573
Maytom v Perpetual Trustees Victoria Ltd [2010] NSWSC 765
Category: Interlocutory applications
Parties: Peter James Spencer (Plaintiff)
Wayne Dennis Bamber (1st Defendant)
Deneva Jean Bamber (2nd Defendant)
Registrar-General of New South Wales (3rd Defendant)
Peter Graham Luton (4th Defendant)
File Number(s):

Judgment

HIS HONOUR : This is an application for the extension of a caveat until 25 March 2011 or further order. The plaintiff was formerly the registered proprietor of real property known as "Saarahnlee", being rural property used as a farm. The property is near Shannons Flat in New South Wales.

On or about 16 October 2003 the plaintiff entered into an agreement with the first and second defendants, who are respectively the plaintiff's brother-in-law and sister, under which they agreed to lend the plaintiff the sum of $1,000,000 on security of a number of blocks of land that comprised the substantial part of the "Saarahnlee" property. The agreement provided that the loan was to be paid in full by 31 March 2007. To secure the loan, the first and second defendants took a registered mortgage over specified lots. The loan was not repaid.

In December 2007 the first and second defendants brought proceedings in the Common Law Division of the court for possession. On 20 July 2009 orders were made by consent giving judgment for the first and second defendants against the plaintiff in the sum of $1,510,943. A writ for possession was obtained in November 2009. The first and second defendants obtained possession of the property in about February 2010.

The first and second defendants, in exercise of their powers as mortgagee, listed the mortgaged property for sale by auction. The auction was held on 23 April 2010. There was only one bid, being a bid for $1,000,000. The property was passed in.

The first and second defendants then took steps to obtain from the Registrar General an order for foreclosure pursuant to s 61 of the Real Property Act 1900 on the ground that there had been…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Spencer v Bamber

Details

AGLC: Spencer v Bamber [2011] NSWSC 141
Case: [2011] NSWSC 141
Decision Date: 01 March 2011

CaseChat Overview and Summary

In the matter of Spencer v Bamber, the dispute concerned the validity of a foreclosure order that had been made in relation to a property mortgaged by the plaintiffs, Spencer. The defendants, Bamber, were the mortgagees who had obtained the foreclosure order and subsequently became the registered proprietors of the property. The plaintiffs sought an extension of their caveat over the property, arguing that there was a serious question to be tried regarding the validity of the foreclosure order. They contended that the pre-conditions for making the foreclosure order may not have been satisfied, and that the balance of convenience favoured extending their caveat.

The legal issues before the court were whether the pre-conditions for making the foreclosure order had indeed been satisfied, and whether the balance of convenience favoured extending the plaintiffs' caveat. The court needed to determine if the defendants, as mortgagees, were entitled to exercise their power of sale and if the balance of convenience did not favour extending the caveat. The court also considered the defendants' undertaking to preserve the ability of the plaintiffs to restore their equity of redemption if they were successful at the final hearing.

The court found that the pre-conditions for making the foreclosure order may not have been satisfied, and there was a serious question to be tried regarding the validity of the order. However, the court held that if the foreclosure order were set aside, the plaintiffs' equity of redemption would be revived, and the defendants' position as mortgagees would be restored. Consequently, the defendants would be entitled to exercise their power of sale. The court concluded that the balance of convenience did not favour extending the caveat, particularly given the defendants' undertaking to preserve the plaintiffs' ability to restore their equity of redemption if they were successful at the final hearing. Therefore, the court dismissed the plaintiffs' application for an extension of their caveat.

Orders