Thera Agri Capital No 2 Pty Ltd v Wake

[2023] SASC 96

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

THERA AGRI CAPITAL NO 2 PTY LTD v WAKE & ANOR

[2023] SASC 96

Judgment of Judge Dart a Master of the Supreme Court  

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT

Respondents gave a guarantee to the applicant in relation to loans to a company - they also gave security to the applicant - the security includes real property - the company defaulted - receivers were appointed and have sold real property - the applicant requires the respondents to sign transfer documents - there is a contractual term to that effect - orders sought directing the respondents to sign the relevant documents.

Held:

1. Applicant entitled to an order that the respondents execute the relevant documents to permit transfer of the subject land to the purchaser.

Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296; Masters v Garcia (No 2) [2006] NSWCA 15, considered.

THERA AGRI CAPITAL NO 2 PTY LTD v WAKE & ANOR
[2023] SASC 96

1. This is an application for summary judgment. The claim is limited in scope.

2. The respondents were in a partnership and are the registered proprietors of particular farming land. They guaranteed a loan given by the applicant to a company called Romley Pty Ltd which is now in liquidation. The farming property was provided as security for the loan and the respective obligations of the guarantors.

3. The company defaulted on its loan obligations and the requisite notices were served. The respondents did not comply with the notices. As a result, the applicant appointed receivers who offered the farming properties for sale. A contract for sale has been entered into by the receivers and was due to settle on 17 June 2023.

4. The registered proprietors are natural persons and the receivers are required to act under a power of attorney to execute the transfer documents to be lodged at the Lands Titles Office. The principal loan documentation is contained in a document called a General Security Deed (GSD). That deed contains the grant of a power of attorney. Such a grant is commonly contained in security documents.

5. The Registrar-General requires the production of the original of the GSD before she will accept the transfer documents executed by the receivers under the power of attorney.

6. The applicant has executed copies of the GSD but has been unable to locate an original executed copy of the deed. There is no dispute that the GSD was executed by the respondents.

7. At the second hearing, the respondents pointed out that the GSD may not have ever been executed by the applicant. That led to an adjournment of that hearing. The applicant filed further affidavits and additional submissions.

8. The applicant says that because the GSD is a deed, it operates unconditionally from delivery. It does not matter that the applicant may not have signed it. The respondents returned the deed executed by them by email on 17 February 2021.

9. In Mirzikinian v Tom & Bill Waterhouse Pty Ltd[1] the New South Wales Court of Appeal held that a delivered deed was binding. Ipp JA said as follows:[2]

   [1] [2009] NSWCA 296.

   [2] [2009] NSWCA 296 at [33]-[34].

   In Monarch Petroleum v Citco Petroleum [1986] WAR 310 Kennedy J (a judge who had a deep knowledge of the law relating to deeds) said at 355:

   “Delivery means some conduct indicating that the person who has executed the deed intends to be bound by it. Anything which shows that he treats the instrument as his deed will suffice … It ‘depends upon intention manifested by some words or by some act, either expressly proved or inferred from circumstances’ – In re Carile [1920] VLR 427 at 433.”

   And at 356:

   “No particular form of words or act is necessary to constitute delivery – any words or acts that sufficiently show that it was intended to be finally executed will do … it is not necessary that the deed be delivered into the possession or custody of the person intended to take the benefit of the deed or to someone on his behalf … it will frequently be inferred from execution.”

   His Honour’s reasoning was followed in Scook v Premier Building Solutions Pty Ltd and others (2003) 28 WAR 124 where Steytler J (with whom McKechnie and Hasluck JJ agreed) said at [25]:

   “It is enough to meet the requirement of delivery that there by acts or words sufficient to show that the document is intended by the party to be executed as his or her deed presently binding on him or her: Tupper v Foulkes (1861) 142 ER 314 at 319; Xenos v Wickham (1867) LR 2 HL 296 at 312, per Blackburn J; Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] Ch 88 at 98, per Cross J; and Vincent v Premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609 at 619, per Lord Denning MR. There is no need for any physical handing over of the deed: Doe d Garnons v Knight (1826) 108 ER 250 at 257; and Xenos v Wickham (HL) (at 323). Whether there has, or has not, been delivery is a question of fact: Xenos v Wickham (HL) (at 309, 311, 319); Ansett Transport Industries (Operations) Pty Ltd v Comptroller of Stamps (Vic) [1985] VR 70 at 78. Intention to deliver may be expressly proved or inferred from circumstances: Re Carile; Dakin v Trustees, Executors & Agency Co Ltd [1920] VLR 427 at 433. While intention is to be ascertained from circumstances prior to or contemporaneous with delivery, it is permissible to look at later events in order to ascertain what was the intention of the person concerned at the critical time: Poole v Neely [1976] 1 NZLR 529 at 541 and Monarch Petroleum (at 356)” (at [25]).

10. The applicant further points to evidence that the respondents twice confirmed, in amending deeds executed by all parties, that the transactional documents including the GSD remained in full force and effect. The parties entered into a further written agreement on 25 March 2022 which had the effect of again confirming that the GSD was valid and enforceable against them. There appears to be no arguable issue in relation to the enforceability of the GSD. It was delivered and is binding on the respondents.

11. What is sought in this action are various orders to allow the contract for the sale of the land to settle. The first order is one requiring the respondents to execute the documents necessary to permit the transfer of the land to the purchaser. The right to that order is said to arise from clause 10.05(b) of the GSD:

    10.05 Further assurance

    Whenever the Secured Party requests the Grantor to do anything:

    …

    (b)for aiding in the execution or exercise of any right, power, remedy or authority conferred by this Deed or any Collateral Security,

    the Grantor shall do it immediately at its own costs. Compliance with this clause may include the execution or registering of any other document, agreement or financing statement, the delivery of documents or evidence of title to the Secured Property, the execution and delivery of transfers and obtaining any consents from third parties.

12. The order is a type of specific performance of a deed. It is, however, in the form of a mandatory injunction. The distinction between the two was explained in Masters v Garcia (No 2).[3] The Court said:[4]

    It is convenient to note that, although there was talk of a remedy by way of ‘specific performance’, in the case of an executed contract of which the obligation of one party to perform a particular obligation is outstanding, the relief may better be described as injunctive relief: see Burns Philp Trust Co Pty Ltd v Kwikasair Freightlines Ltd (1963) 63 SR(NSW) 492, 496-497 (Sugerman, Hardie and Collins JJ). Further, the Court will grant, where appropriate, an injunction in affirmative or mandatory form where the obligation is properly regarded as an affirmative obligation and not only to enforce a negative stipulation: ibid at 499.

    [3] [2006] NSWCA 15.

    [4] [2006] NSWCA 15 at [30].

13. The order sought requires the respondents to perform an outstanding obligation contained in the GSD. It is in the nature of final relief.

14. At the hearing the respondents sought time to seek legal advice and file further submissions. They have since filed further submissions. The effect of the submissions is that the property sold by the receivers is not subject to the security given by them to the applicant. If that were the case, then clearly the applicant would not be entitled to the orders sought.

15. As mentioned above, it is the GSD which primarily regulates relations between the parties. The respondents are defined to be grantors in Schedule 2 of the GSD. By Clause 3.1 of that document the respondents granted a security interest in the secured property. The latter term is defined in the document to mean all of the grantor’s present and after acquired property including without limitation land and other property. There is a further definition that land and other property refers to all property and rights of any kind including real property assets of any nature. I am satisfied in the circumstances that the respondents, as the registered proprietors of the subject property, granted a security interest to the applicant in respect of the subject property.

16. The applicant is contractually entitled to the order. The order obliges the respondents to comply with their contractual obligations. There is no basis put by the respondent that would require the Court to decline to make the order.

17. There will be an order in the form sought.