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Stockl v Rigura Pty Ltd

Stockl v Rigura Pty Ltd

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NEW SOUTH WALES COURT OF APPEAL

CITATION: Stockl v Rigura Pty Ltd [2004] NSWCA 73

FILE NUMBER(S):
40695/02

HEARING DATE(S): 4 & 5 February, 2004

JUDGMENT DATE: 19/03/2004

PARTIES:
Peter Maximilian Stockl - Appellant
Rigura Pty Ltd - First Respondent
Thomas George Ridgeway & Ors t/as Parish Patience Solicitors - Second Respondent
Christopher Michael Finn & Ors t/as Parish Patience Solicitors - Third Respondent
John Barry Gray & Ors t/as Parish Patience Solicitors - Fourth Respondent
David Lee Bitel & Ors t/as Parish Patience Solicitors - Fifth Respondent
Phillip John Lederman & Ors t/as Parish Patience Solicitors - Sixth Respondent
Laurence Phillip Graves & Ors t/as Parish Patience Solicitors - Seventh Respondent
Malcolm Phillip Bersten & Ors t/as Parish Patience Solicitors - Eighth Respondent
Rodney Kent & Ors t/as Parish Patience Solicitors - Ninth Respondent
Adolfson Investments Pty Ltd - Tenth Respondent

JUDGMENT OF: Mason P Ipp JA Palmer J

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 3078/98

LOWER COURT JUDICIAL OFFICER: English DCJ

COUNSEL:
J. Thomson and S.W. Davis - Appellant
J.T. Gleeson SC and R.A. O'Keefe - Respondents

SOLICITORS:
L.C. Muriniti & Associates - Appellant
Minter Ellison - Respondents

CATCHWORDS:
REAL PROPERTY - MORTGAGE - POWER OF SALE - Whether mortgagee's power of sale had been exercised in good faith - significance of expert valuation evidence as to market price of property - significance of result of properly conducted advertising campaign - whether unaccepted offer for property may be taken into consideration in determining whether sale at an undervalue - whether it is proper for a mortgagee to advertise a sale as a "mortgagee sale" - whether a mortgagee must obtain an independent valuation of the property before setting a reserve price or accepting an offer to buy - PRACTICE AND PROCEDURE - Whether case should be remitted to trial judge to enable a finding as to disputed fact to be made - whether cause of action should be remitted if doomed to failure in any event.

LEGISLATION CITED:
Contracts Review Act 1980 (NSW)
Real Property Act 1900 (NSW) - s.57(2)

DECISION:
(1) Leave to amend Notice of Appeal refused
(2) appeal dismissed
(3) parties to file written submissions as to costs.

JUDGMENT:

FACTS

The appellant granted a mortgage over his home to the Tenth Respondent (“Adolfson”) to secure a loan made by it to the appellant’s company. The borrower defaulted. Adolfson, in exercise of its power of sale, advertised the property for sale by an auction to be held on 7 March 1991.
The property was damaged in a severe storm in late January 1991. The appellant requested Adolfson to postpone the auction until the storm damage to the property had been repaired. Adolfson refused. The sale was extensively advertised but, at the auction, no bid was received except from a person nominated by a second mortgagee. The property was passed in and later sold by private treaty to the nominee of the second mortgagee at the price bid at the auction.
The appellant…

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.

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Details

Case: [2004] NSWCA 73
Decision Date: 19 March 2004

CaseChat Overview and Summary

The Supreme Court of Queensland considered an appeal by Mr Rigl (the appellant) against Rigura Pty Ltd (the respondent) concerning the exercise of a mortgagee's power of sale. The dispute centred on whether the mortgagee had acted in good faith when selling the mortgaged property.

The primary legal issues before the Court were whether the mortgagee's power of sale had been exercised in good faith, particularly in light of the sale price achieved. This involved determining the significance of expert valuation evidence, the outcome of advertising efforts, and whether an unaccepted offer could be considered in assessing whether the property was sold at an undervalue. The Court also considered whether it was proper to advertise the sale as a "mortgagee sale" and whether an independent valuation was required before setting a reserve price or accepting an offer.

The Court reasoned that the mortgagee's duty of good faith in exercising a power of sale requires the mortgagee to take reasonable steps to obtain a proper price. The Court noted that while an independent valuation is a prudent step, it is not an absolute requirement. The Court found that the advertising campaign conducted was adequate and that the unaccepted offer, while potentially relevant, did not demonstrate that the sale was at an undervalue. The Court also held that advertising a sale as a "mortgagee sale" is not inherently improper.

Ultimately, the Court refused leave to amend the Notice of Appeal and dismissed the appeal. The parties were directed to file written submissions regarding costs.

Orders

Orders of the court

(1) Leave to amend Notice of Appeal refused

(2) appeal dismissed

(3) parties to file written submissions as to costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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