Stergiou, S. v Citibank Savings Ltd

[1993] FCA 460

JUDGMENT No. ...... ........ ... ......,,,,,, 4-60 I 19q3

IN THE FEDERAL COURT OF AUSTRALIA	)
1
AUSTRALIAN CAPITAL TERRITORY	) No ACT G 21 of 1993
DISTRICT REGISTRY	)
GENERAL DIVISION

BETWEEN :	STANLEY STERGIOU and EKATERINE STERGIOU
Applicants

m:  CITIBANK SAVINGS LIMITED
Respondent

CORAM	:	HILL, HIGGINS & COOPER JJ
PLACE	:	CANBERRA
DATED	:	30 JUNE 1993

EX TEMPORE REASONS FOR JUDGMENT

THE COURT

The appellants, Mr and Mrs Sterglou,

appeal from the orders of Gallop J refusing the appellants' appeal against the grant by the Master of leave to the respondent Cltibank Savings Limited ("the Bank"), to enter judgment against them and the entry of judgment accordingly.

The Bank commenced proceedings against Mr and Mrs

-

accompanying it, seeking possession of land known as block 6, section 46, divislon of Hackett ("the land"). The statement of claim alleges that Mr and Mrs Stergiou were, as at the date of the statement of 23 March 1992, in default in payment of principal and interest owing under a mortgage to the Bank and thus wrongfully remained in possession of the land. No particulars are given of the default alleged but c1.6 of the

statement of claim provided:

Stergiou by way of summons with a statement of claim

"The p l a l n t l f f served n o t i c e s i n w r i t l n g

pursuant t o S e c t i o n 93 o f t h e Real

Proper t y A c t 1925 t h a t t h e Mortgagors had

made d e f a u l t i n the observance o r

performance o f t h e i r covenants under t h e

Mortgage s t a t l n g t h e d a t e and n a t u r e o f

t h e s a i d	d e f a u l t	and	t h e amount	owing	b y
t h e	Mortgagors	f o r	p r i n c i p a l	and	i n t e r e s t

t h e r e o f [ s i c ] . "

The c l e a r i n t e n t o f t h e p lead ings a s f i l e d appears

t o be	t h a t the d e f a u l t s r e l i e d	upon	were	t h o s e particularised
i n the Notice under s.93	o f t h e Real	Proper ty Act	1925	( A C T )
( " t h e A c t " ) .	Tha t	No t i c e	provided	r e l e v a n t l y :

" 1 . Pursuant t o S e c t l o n 93 o f t h e Real

Proper t y A c t 1925 you a re i n d e f a u l t

under t h e above Mortgage a s f o l l o w s : -

2 . You a re i n d e f a u l t under t h e terms o f

t h e Mortgage dated t h e 24 th day o f

September 1990 between C l t l b a n k

Sav ings L imi ted a s Mortgagee and

y o u r s e l f a s Mortgagor i n r e s p e c t o f

t h e p roper t y con ta ined i n Crown Lease

Volume 1076 F o l i o 3 i n r e s p e c t o f

Block 6 S e c t l o n 4 6 D i v i s i o n o f

Hackett i n t h a t you have f a i l e d t o

make payments pursuant t o t h e s a i d

Mortgage a s f o l l o w s : -

3 . The f u l l amount o f t h e p r i n c i p a l sum

under t h e Mortgage h a s b y reason o f

your d e f a u l t now become due and

payable	and	i n t e r e s t	c o n t i n u e s	t o
run . "

U l t i m a t e l y , c1.6 o f the s t a t emen t o f c l a i m was

s t r u c k o u t , presumably on the a p p l i c a t i o n o f the Bank. Tha t

left no particulars at all being provided to Mr and Mrs
Stergiou by the Bank of the alleged breaches of the mortgage.

In due course application was made to the Master for leave to enter summary judgment. Mr and Mrs Stergiou were unrepresented on this occasion, indeed have been unrepresented at all times thereafter. Evidence was adduced in the form of an affidavit by Mr Linnane which alleged defaults in payment of the principal and interest and annexed statements said to be statements of two accounts showing debits and credits to those accounts continuing up to 21 April 1992. No attempt appears to have been to identify which defaults were relied upon. Ultimately the Master gave leave to enter -judgment for possession and judgment was entered accordingly. An application for a stay of execution of the writ of possession was made by Mr and Mrs Stergiou to Higgins J and a stay of execution of that writ was granted pending appeal.

Mr and Mrs Stergiou then appealed from the Master's

grant of leave to enter judgment. No leave was sought so to do, which would have been necessary if the appeal from the Master were interlocutory. We note in passing that if the matter were at that stage final and not interlocutory, an appeal would properly have been heard by a full court of the Supreme Court of the Australian Capital Territory.

Much of the time in the appeal was taken up by an application by Mr Stergiou to the judge hearing the appeal to disqualify himself on the grounds of bias and unsubstantiated allegations of a conspiracy against Mr and Mrs Stergiou, to which conspiracy it was alleged the Bank was a party. His Honour was of the view that Mr Stergiou had not shown any defence to the Bank's claim for possession and accordingly

dismissed the appeal. Mr and Mrs Stergiou then appealed, or

sought leave to appeal, to this Court.

When the appeal came on for hearing, Mr Stergiou, who with leave of the Court represented his wife as well, sought an adjournment on the basis that the Bank had in the meantime gone into possession of the land and in so doing had taken possession of Mr Stergiou's personal possessions including files relating to the matter without which Mr Stergiou was unable to prepare the appeal. Upon deliberation the Court decided to call upon counsel for the Bank to put

one for the grant of summary judgment, it being made clear	submissions to the Court as to whether the case was a proper
that unless the Court after hearing such submissions was of the view that it was unnecessary to hear from Mr Stergiou because the appeal should clearly be allowed, he would grant the adjournment to allow Mr Stergiou to prepare his case with, if requested, appropriate orders to deal with the situation in the meantime.

In the resu l t one matter o f concern has been

i d e n t i f i e d . The Bank has pleaded i t s case not by reference t o

i t s r igh t t o a wr i t o f ejectment arising under s.96 o f t he Act but by reference t o a r ight t o issue such a wr i t ar is ing contractually under a clause o f t h e mortgage, namely c1.13.1.

That clause provides as follows:

" ( a ) The powers o f sale leaslng entry and

possession d l s t r e s s e jec tment foreclosure and a l l other powers and remedles for the time being conferred upon Mortgagees by the Real Property Ordinance 1925, or by that Ordinance a s varled extended or qual i f i ed by these provlsions or by any present or future amendment o f the s a i d Ordinance or by any other future l a w o f the s a i d Terri tory may be f u l l y exercised i n respect o f the property

hereby mortgaged or any p a r t thereof	upon de faul t being made i n payment o f
the principal sum or any p a r t o f it or o f the in t e res t or other moneys hereby secured or any p a r t thereof respect ively or i n the performance or observance o f any o f the covenants conditions or agreements herein contained or implied by v i r tue o f the
s a l d Ordinance or by any present or
other future l a w o f the s a i d future amendment thereof or by any
Terri tory and notwithstanding any omission neglect or waiver o f the right t o exerclse a l l or any o f such powers on any former occasion
PROVIDED ALWAYS that the respective
periods o f time thereby l imited for the continuance o f de fau l t under Sections 93 and 94 o f the Real Property Ordinance 1925 shall i n each case be seven days and any provlsions i n the said Ordinance t o the contrary are modified accordingly; ".

There was a clearly arguable issue before the Master whether cl. 13.1 gave rise, as the Bank submitted, to a right to possession independently of s.96 in that, as submitted by counsel for the Bank, c1.13.1 incorporated by reference the terms of s.96, or whether c1.13.1 was merely inserted to draw the mortgagor's attention to the provisions, inter alia, of s.96 and to modify the times referred to in ss.93 and 94 of the Act on the other hand.

The Master could either have refused leave to enter ludgment until the matter had been argued, or he could have decided that question on the spot. As it was, the question was not raised at all. In our view, it is desirable on this appeal to resolve this issue of law to avold the matter coming back to us on another occasion. In our view, the language of c1.13.1 is quite inapt to confer upon the Bank a right to ejectment independently of the right conferred in s.96. What it does is no more than confirm that the mortgagee may

exercise the statutory right in the event of default.

It follows from that, that the Bank's sole right to a writ of ejectment arises under s.96 rather than under the mortgage itself. Indeed, if this were not so and if c1.13.1 were construed so as to repeat the terms of s.96, there might be difficulties in the mortgagee bringing a proceeding in ejectment under the clause because a Real Propertv Act mortgage does not make the mortgagee the legal owner of the land, as does an old system mortgage.

Section 96 itself creates the necessary statutory fiction. The right of a mortgagee outside the terms of s.96 might necessarily have then to rest upon the attornment clause in the mortgage, but that is not the case pleaded by the Bank here. This being so, the Bank's statement of claim disclosed no cause of action and this is because, as conceded by counsel for the Bank, no claim under s.96 has been pleaded by it thus establishing its deemed title in the action for ejectment.

Accordingly, the Master should not have granted leave to the Bank to enter a judgment for possession, but rather the statement of claim should have been struck out with liberty in the Bank to replead. Any new pleading should particularise the breach or breaches relied upon to permit Mr and Mrs Stergiou, should they desire or if they can, to

dispute the breaches alleged to have been committed by them or to remedy them.

In these circumstances, the orders of the Court will

be as follows:

(1) Grant the appellants leave to appeal from the

declsion of Gallop J.

(2) Order that:

(a)	the leave granted by the Master on 29 January 1993 to enter judgment for possession (including order for costs) be set aside.
(b)	the ludgment for possession of the land dated 15 February 1993, including order for costs, be set aside.
(c)	the Bank statement of claim be struck out wlth liberty in the Bank to replead.
(d)	the Bank pay the appellants' costs, if any, to date, including the costs incurred in the Supreme Court of the Australian Capital Territory and the costs of the present appeal.

(3) The matter should be remitted to the Supreme Court of the Australian Capital Territory for the making of such directions for the further disposition of the proceedings as may be necessary or desirable with liberty to either party to apply to the listing clerk with a view to having the matter listed for directions.

(4) The Court further orders that the Bank deliver up

possession of the property, referred to in c1.2 of

the statement of claim, to the appellants.

I certify that this and the

preceding seven (7) pages
are a true copy of the Reasons

for Judgment herein of his Honour

Mr Justice Hill.

Date:  9 [qC13

Mr Stergiou appeared for himself and his wife.

Counsel and Solicitors	Mr R. Arthur instructed by
for Respondent:	Phelps Reid
Date of Hearing:	30 June 1993