Tycho Pty Ltd v Trustworthy Nominees Pty Ltd

Case [2021] QSC 95

SUPREME COURT OF QUEENSLAND

CITATION:

Tycho Pty Ltd & Anor v Trustworthy Nominees Pty Ltd & Ors [2021] QSC 95

PARTIES:

TYCHO PTY LTD ACN 010 154 944

(first plaintiff)
RAYMOND LESLIE VINCENT
(second plaintiff)

v
TRUSTWORTHY NOMINEES PTY LTD
ACN 005 092 624
(first defendant)
REGISTRAR OF TITLES
(second defendant)
STATE OF QUEENSLAND
(third defendant)
TYCHO PTY LTD ACN 010 154 944
(first defendant by counterclaim)
COLLECT 2 PTY LTD ACN 609 158 607
(second defendant by counterclaim)
MARK MADAFFERI
(third defendant by counterclaim)
MICHAEL AJZENSZTAT and MYER JERUZALSKI (trading as AJZENSZTAT JERUZALSKI & CO)
(first third party)
FRASER LAWYERS PTY LTD ACN 165 251 543

(second third party)

FILE NO/S:

BS No 1546 of 2018

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

7 May 2021

DELIVERED AT:

Brisbane

HEARING DATE:

19 April 2021

JUDGE:

Davis J

ORDERS:

1.   Declarations are made against the first defendant that:

(a)    each of the documents pleaded in paragraphs 21(a) to (g) and (i) to (m) of the amended statement of claim filed on 3 April 2018 are void and of no force or effect;

(b)    the signature on the mortgage having dealing number 718071834 purporting to be that of the second plaintiff (for the first plaintiff);

(i)     is not the signature of the second plaintiff; and

(ii)    was not signed by a person with the authority of either the first plaintiff or the second plaintiff to do so;

(c)    the first plaintiff did not execute the mortgage.

2.    The second defendant cancel the mortgage having dealing number 718071834 registered on the title to each of the following lots:

(a)    lot 3 on Registered Plan 170920, Title Reference 16137223; and

(b)    lots 1 to 22 on Group Titles Plan 2987, Title Reference 18327029 to 18327050 respectively.

3.   The claim against the third defendant is dismissed.

4.    Neither the third defendant by counterclaim nor the first third party are bound by the judgment given in favour of the plaintiffs against the first and second defendants.

5.    The first defendant pay the plaintiffs’ costs, including any reserved costs, of the proceeding including the application.

6.   Otherwise, there be no orders as to costs.

CATCHWORDS:

REAL PROPERTY - TORRENS TITLE - INDEFEASIBILITY OF TITLE - EXCEPTIONS TO INDEFEASIBILITY - FRAUD OR FORGERY - AGAINST REGISTERED PROPRIETOR - where the first plaintiff, Tycho Pty Ltd (Tycho), and the second plaintiff, Raymond Leslie Vincent (Mr Vincent), seek summary judgment against the first defendant, Trustworthy Nominees Pty Ltd (Trustworthy), and the second defendant, the Registrar of Titles - where Mr Vincent is the sole director of Tycho - where Tycho is the registered proprietor of 23 lots of land at Maryvale near Warrick - where, in May 2017, Tycho entered into contracts with Irongrown Corporation Pty Ltd (Irongrown) to sell the land in Maryvale - where there exists a document purporting to be a mortgage by Tycho encumbering 21 of the 23 lots to Trusthworthy - where Mr Vincent denies signing…

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Details
AGLC
Tycho Pty Ltd v Trustworthy Nominees Pty Ltd [2021] QSC 95
Case
[2021] QSC 95
Decision Date

CaseChat Overview and Summary

Tycho Pty Ltd and Raymond Leslie Vincent, the sole director of Tycho, seek summary judgment against Trustworthy Nominees Pty Ltd and the Registrar of Titles over the registration of a mortgage over 21 of the 23 lots of land Tycho owns at Maryvale near Warwick. The mortgage, which Trustworthy claims is valid and enforceable, was executed on or around 10 May 2017. It purports to be signed by Mr Vincent, but he denies signing it and expert evidence supports his denial. The signature appears to be witnessed by a person purporting to be a Commissioner for taking affidavits in the Supreme Court of South Australia. The plaintiffs and defendants agree that the mortgage is a forgery. The plaintiffs seek orders for the Registrar to remove the mortgage from the register. In the alternative, they seek compensation from the State of Queensland. Two parties by counterclaim and two third parties seek orders that they not be bound by the judgment. The court must decide whether the purported mortgage is a forgery and, if so, whether Trustworthy breached s 11A(2) of the Land Title Act 1994.

The court found that the first defendant has no real prospect of successfully defending the claim that the mortgage is a forgery. The plaintiffs provided a solid body of evidence that the mortgage is a forgery, including the witness's statutory declaration, Mr Vincent's evidence that he did not sign the mortgage, and the expert handwriting opinion. The court also found that there is no need for a trial of the issue of whether the mortgage is a forgery. The plaintiffs and defendants have agreed that the mortgage is a forgery. The court also found that the plaintiffs and defendants have made tactical decisions that the witness's statutory declaration comes into evidence as between them. The court rejected the objections to the admission of the statutory declaration on the basis that the plaintiffs and defendants have made tactical decisions that the statement comes into evidence as between them. The court noted that the second and third defendants by counterclaim and the two third parties object to being bound by any determination as to the validity of the mortgage between Tycho and Trustworthy. The court found that neither the second and third defendants by counterclaim nor the two third parties are bound by the judgment given in favour of the plaintiffs against the first and second defendants.

The court made declarations that the documents pleaded in paragraphs 21(a) to (g) and (i) to (m) of the amended statement of claim filed on 3 April 2018 are void and of no force or effect. The court also declared that the signature on the mortgage having dealing number 718071834 purporting to be that of Mr Vincent is not his and was not signed by a person with the authority of Tycho or Mr Vincent to do so. The court ordered the Registrar to cancel the mortgage having dealing number 718071834 registered on the title to each of the following lots: lot 3 on Registered Plan 170920, Title Reference 16137223; and lots 1 to 22 on Group Titles Plan 2987, Title Reference 18327029 to 18327050 respectively. The court dismissed the claim against the third defendant. The court also ordered that neither the second and third defendants by counterclaim nor the two third parties are bound by the judgment given in favour of the plaintiffs against the first and second defendants. The court ordered the first defendant to pay the plaintiffs' costs, including any reserved costs, of the proceeding including the application. The court otherwise made no orders as to costs.

Orders

Orders of the court

1. Declarations are made against the first defendant that:

(a) each of the documents pleaded in paragraphs 21(a) to (g) and (i) to (m) of the amended statement of claim filed on 3 April 2018 are void and of no force or effect;

(b) the signature on the mortgage having dealing number 718071834 purporting to be that of the second plaintiff (for the first plaintiff);

(i) is not the signature of the second plaintiff; and

(ii) was not signed by a person with the authority of either the first plaintiff or the second plaintiff to do so;

(c) the first plaintiff did not execute the mortgage.

2. The second defendant cancel the mortgage having dealing number 718071834 registered on the title to each of the following lots:

(a) lot 3 on Registered Plan 170920, Title Reference 16137223; and

(b) lots 1 to 22 on Group Titles Plan 2987, Title Reference 18327029 to 18327050 respectively.

3. The claim against the third defendant is dismissed.

4. Neither the third defendant by counterclaim nor the first third party are bound by the judgment given in favour of the plaintiffs against the first and second defendants.

5. The first defendant pay the plaintiffs’ costs, including any reserved costs, of the proceeding including the application.

6. Otherwise, there be no orders as to costs.

Background

Background to the litigation

The plaintiffs apply for summary judgment against the first and second defendants in proceedings that also now involve three defendants by counterclaim and two third parties.Background Tycho Pty Ltd (Tycho), the first plaintiff, is a company whose sole director is Raymond Leslie Vincent, the second plaintiff. Tycho is the registered proprietor of 23 lots of land at Maryvale near Warwick. A tourist business operates from the land. The land was legitimately encumbered by way of mortgage to the Commonwealth Bank. In May 2017, Tycho entered into contracts with Irongrow Corporation Pty Ltd (Irongrow) to sell the land. By terms of the contract, a deposit of $256,500 was released to Tycho and was paid to the Commonwealth Bank to clear the mortgage. A document exists purporting to be a mortgage by Tycho of 21 of the 23 lots which purports to encumber the land to Trustworthy Nominees Pty Ltd (Trustworthy), the first defendant. That document came into existence on about 10 May 2017. The purported mortgage bears a signature above the typed words “Mortgagor’s signature”. There is no name written below or near that signature which might identify who wrote it. That signature, though, purports to be witnessed by Mark Adam Freer described as “Commissioner for taking affidavits in the Supreme Court of South Australia”. Mr Freer is a retired solicitor. Mr Freer swore a statutory declaration in which he explained that the signature of the witness is in fact his signature. He explains in his statutory declaration that there was suspicious activity by persons known to him as Buckby, Oxlade, Warmings and some others. The circumstances under which the mortgage was signed and witnessed by him are described in the statutory declaration as follows:“18.On the 10th May 2017, and 17th May 2017, a man I know and ‘ANDY’ who is OXLADES administrative assistant contacted me and said the documents were ready. I met ANDY and signed the documents given to me. These documents were the VINCENT loan agreement and other associated documents.19.I have never met VINCENT, nor have I spoken to him and he was not in my presence at any stage with the documents.20.Once the loan documents were signed, ANDY took them from me and flew to Melbourne where he hand delivered them to the lawyers for the lender. OXLADE paid for this flight.” Mr Madafferi, the third defendant by counterclaim, takes objection to the admission into evidence before me of Mr Freer’s statement. I will return to that issue shortly. Mr Vincent who, as previously observed, is the sole director of Tycho, denies signing the purported mortgage. Expert handwriting evidence suggests the signature is not his and therefore corroborates his denial. On the strength of the purported mortgage, Trustworthy advanced money to Irongrow, Collect 2 Pty Ltd (the second defendant by counterclaim) and Mark Madafferi (the third defendant by counterclaim). As against the Registrar of Titles (the second defendant), Tycho seeks orders correcting the register and removing the mortgage. As against the State of Queensland (the third defendant), Tycho seeks compensation if the mortgage is not removed from the register.[1][1]Land Title Act 1994, Part 9, Division 2, subdivision C.

Evidence

Evidence Before The Court

Rule 295 is:“295 Evidence(1)In a proceeding under this part, evidence must be given by affidavit unless the court gives leave.(2)An affidavit may contain statements of information and belief if the person making the affidavit states the sources of the information and the reasons for the belief.(3)A party to an application under this part who intends to rely on a document must—(a) exhibit the document to an affidavit; or(b) identify in an affidavit the provisions relied on to the extent the party is able to identify them.(4)A person who makes an affidavit to be read in an application under this part may not be cross-examined without the leave of the court.” Rule 430, which is not contained in Chapter 9, provides:“430 Contents of affidavit(1)Except if these rules provide otherwise, an affidavit must be confined to the evidence the person making it could give if giving evidence orally.(2)However, an affidavit for use in an application because of default or otherwise for relief, other than final relief, may contain statements based on information and belief if the person making it states the sources of the information and the grounds for the belief.Note—For an application because of default, see chapter 9 (Ending proceedings early), part 1 (Default).(3)On assessment, all or part of the costs of an affidavit not complying with these rules or unnecessarily including copies of or extracts from documents may be disallowed.” In order for a hearsay affidavit to be admissible as to the proof of what is sworn on hearsay, the fact of the belief by the deponent must be sworn as must the sources upon which the belief is founded. The source material itself must be admissible.[2] Mr Vincent’s affidavit clearly does not render Mr Freer’s statutory declaration admissible. There is no evidence from Mr Vincent proving that Mr Freer made the statutory declaration. He does nothing more than summarise the contents of the document. [2]Deputy Commissioner of Taxation v Ahern (No 2) [1998] 2 Qd R 158 at 163. Mr Moore’s affidavit does swear to material from which it perhaps could be deduced that Mr Freer did make the statutory declaration. However, much of the declaration itself is in inadmissible form. Some of it, for instance, is clearly made on hearsay. Even if it were proved that the document is a statement of Mr Freer, s 92 would not admit hearsay statements by Mr Freer. Even if Mr Freer’s statutory declaration was admissible under s 92 of the Evidence Act, Ms Ahern did not waive the conditions of s 92(1)(a) and the plaintiffs have not sought to prove any of the matters prescribed by s 92(2). Ms Ahern has made out the objection. As against Mr Madafferi, Mr Freer’s statement is not admissible. However, the plaintiffs and defendants have made tactical decisions that the statement comes into evidence as between them. Mr Freer’s statement, together with Mr Vincent’s evidence that he did not sign the purported mortgage, and the evidence of the expert handwriting opinion, forms a solid body of evidence upon which it could be concluded that the first defendant has “no real prospect”[3] of avoiding a finding that the purported mortgage is a forgery. It is also easy to conclude that there “is no need for a trial” of that issue.[4] Ms Ahern’s and Mr Lumb’s concern is that, if in the proceeding of which their clients are a party (the current application), a finding is made that the purported mortgage is a forgery, an issue estoppel arises preventing them from contesting that fact in the proceedings between Trustworthy and the various defendants by counterclaim and third parties.[5] [3]Rule 292.[4]Rule 292.[5]Blair v Curran (1939) 62 CLR 464 at 531, Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 597, Kuligowski v Metrobus (2004) 220 CLR 363 at 373 and particularly Financial Wisdom Ltd v Newman (2005) 12 VR 72 at [30] and Sandtara Pty Ltd v Abigroup Ltd (1997) 42 NSWLR 5 at 8-9.

Decision

Reasons for decision

The application for summary judgment is brought under Part 2 of Chapter 9 of the Uniform Civil Procedure Rules 1999 (UCPR). Rule 292 provides as follows:“292 Summary judgment for plaintiff(1)A plaintiff may, at any time after a defendant files a notice of intention to defend, apply to the court under this part for judgment against the defendant.(2)If the court is satisfied that—(a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and(b) there is no need for a trial of the claim or the part of the claim;the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.” Rule 295 is:“295 Evidence(1)In a proceeding under this part, evidence must be given by affidavit unless the court gives leave.(2)An affidavit may contain statements of information and belief if the person making the affidavit states the sources of the information and the reasons for the belief.(3)A party to an application under this part who intends to rely on a document must—(a) exhibit the document to an affidavit; or(b) identify in an affidavit the provisions relied on to the extent the party is able to identify them.(4)A person who makes an affidavit to be read in an application under this part may not be cross-examined without the leave of the court.” Rule 430, which is not contained in Chapter 9, provides:“430 Contents of affidavit(1)Except if these rules provide otherwise, an affidavit must be confined to the evidence the person making it could give if giving evidence orally.(2)However, an affidavit for use in an application because of default or otherwise for relief, other than final relief, may contain statements based on information and belief if the person making it states the sources of the information and the grounds for the belief.Note—For an application because of default, see chapter 9 (Ending proceedings early), part 1 (Default).(3)On assessment, all or part of the costs of an affidavit not complying with these rules or unnecessarily including copies of or extracts from documents may be disallowed.” In order for a hearsay affidavit to be admissible as to the proof of what is sworn on hearsay, the fact of the belief by the deponent must be sworn as must the sources upon which the belief is founded. The source material itself must be admissible.[2] Mr Vincent’s affidavit clearly does not render Mr Freer’s statutory declaration admissible. There is no evidence from Mr Vincent proving that Mr Freer made the statutory declaration. He does nothing more than summarise the contents of the document. [2]Deputy Commissioner of Taxation v Ahern (No 2) [1998] 2 Qd R 158 at 163. Mr Moore’s affidavit does swear to material from which it perhaps could be deduced that Mr Freer did make the statutory declaration. However, much of the declaration itself is in inadmissible form. Some of it, for instance, is clearly made on hearsay. Even if it were proved that the document is a statement of Mr Freer, s 92 would not admit hearsay statements by Mr Freer.

Ratio Decidendi

Legal Principle Established

In relation to Mr Freer’s statement, Mr Moore swears this:“10.I have searched the Litigation File for any records recording communications Stokes Moore had with Mr Freer. I have located the following documents:(a)an email received by Mr Stokes on 18 July 2017 from Mr Freer;(b)a copy of the Statutory Declaration referred to in paragraph 39 of Mr Vincent’s Affidavit (Statutory Declaration); and(c)an email sent by Mr Stokes to Ms Natasha Ness Wilson (whom I am told by Mr Vincent, and I verily believe, is Mr Vincent’s sister-in-law) on 22 July 2017 at 10.10pm.11.On the basis of the fact that those documents were contained on the Original File as having been received and sent by Stokes Moore, I verily believe the contents of those documents to be true.” The application for summary judgment is brought under Part 2 of Chapter 9 of the Uniform Civil Procedure Rules 1999 (UCPR). Rule 292 provides as follows:“292 Summary judgment for plaintiff(1)A plaintiff may, at any time after a defendant files a notice of intention to defend, apply to the court under this part for judgment against the defendant.(2)If the court is satisfied that—(a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and(b) there is no need for a trial of the claim or the part of the claim;the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.” Rule 295 is:“295 Evidence(1)In a proceeding under this part, evidence must be given by affidavit unless the court gives leave.(2)An affidavit may contain statements of information and belief if the person making the affidavit states the sources of the information and the reasons for the belief.(3)A party to an application under this part who intends to rely on a document must—(a) exhibit the document to an affidavit; or(b) identify in an affidavit the provisions relied on to the extent the party is able to identify them.(4)A person who makes an affidavit to be read in an application under this part may not be cross-examined without the leave of the court.” Rule 430, which is not contained in Chapter 9, provides:“430 Contents of affidavit(1)Except if these rules provide otherwise, an affidavit must be confined to the evidence the person making it could give if giving evidence orally.(2)However, an affidavit for use in an application because of default or otherwise for relief, other than final relief, may contain statements based on information and belief if the person making it states the sources of the information and the grounds for the belief.Note—For an application because of default, see chapter 9 (Ending proceedings early), part 1 (Default).(3)On assessment, all or part of the costs of an affidavit not complying with these rules or unnecessarily including copies of or extracts from documents may be disallowed.” In order for a hearsay affidavit to be admissible as to the proof of what is sworn on hearsay, the fact of the belief by the deponent must be sworn as must the sources upon which the belief is founded. The source material itself must be admissible.[2] Mr Vincent’s affidavit clearly does not render Mr Freer’s statutory declaration admissible. There is no evidence from Mr Vincent proving that Mr Freer made the statutory declaration. He does nothing more than summarise the contents of the document. [2]Deputy Commissioner of Taxation v Ahern (No 2) [1998] 2 Qd R 158 at 163.