Tyger Lilly Pty Ltd v Garbas

[2010] SADC 15

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil: Application)

TYGER LILLY PTY LTD v GARBAS

[2010] SADC 15

Reasons for Decision of His Honour Judge Brebner

5 February 2010

REAL PROPERTY - GENERAL PRINCIPLES - EJECTMENT

Action for possession of land in default of loan and mortgage agreement.  Unregistered mortgage.  Whether court has jurisdiction to order possession of land in default of unregistered mortgage.

Held: The Court has general jurisdiction to make an order for possession of land in default of an unregistered mortgage.

Andrew Garrett Wines Resorts & Anor v National Australia Bank [2006] SASC 38 at [32]-[35].; Tyndall Funds Management Australia Ltd & Ors v CAN 078545605 & Ors [2002] SASC 177 at [23]; Ceneavenue Pty Ltd & Ors v Martin & Ors [2008] SASC 158 at [74]-[82], applied.

TYGER LILLY PTY LTD v GARBAS
[2010] SADC 15

Application for an order for possession of land.

1. The defendant is the registered proprietor of land (the land).  The Certificate of Title to the land was issued to her in 1999.  A trustee company holds a registered mortgage over the land and the plaintiff holds an unregistered mortgage over the land as security for an amount of $225,000 advanced by the plaintiff to the defendant pursuant to the terms of a loan agreement and an associated mortgage agreement.  The plaintiff claims that the defendant is in default of the loan agreement.  To lay the foundation for an application for an order for possession of the land under Part XVII of the Real Property Act 1886 (RPA), the plaintiff served notices of default and sale in compliance with s 55A of the Law of Property Act 1936. The plaintiff claims that the defendant continued in default and by summons and interlocutory application the plaintiff sought an order for possession of the land pursuant to s192 of the RPA.

2. The summons and the application were supported by an affidavit sworn by an employee of the plaintiff setting out the history of the matter and exhibiting copies of the loan agreement, the mortgage agreement and the mortgage thus evidencing the terms of the agreement and the nature and extent of the default in order to establish the plaintiff’s right to possession of the land. 

3. As the mortgage was not registered, s192 of the RPA was not available to the plaintiff.[1]

   [1] Andrew Garrett Wines Resorts & Anor v National Australia Bank [2006] SASC 38 at [32]-[35].

4. The plaintiff sought to keep his claim alive by filing an amended summons and an amended application abandoning s192 of the RPA as a basis for relief and instead seeking an order for possession of the land, judgment for a monetary amount and summary judgment of its claim to possession pursuant to Rules 131, 204 and 232 of The District Court Rules 2006 (the Rules).  In so far as it might have been necessary to do so, I granted leave to amend in the terms of the amended summons and application.

5. A threshold question arises as to whether the Court has jurisdiction to make an order for possession of land based on a default in the terms of an unregistered mortgage.

6. The mortgage agreement confers a power sale on the plaintiff if a default occurs in certain specified circumstances.  In reliance on this term of the agreement,  counsel for the plaintiff submitted that on proof of the requisite default the plaintiff was empowered to sell the land, that it cannot enforce this right unless it obtains possession of the land and that the only way it can obtain possession of the land is if the court makes an order for possession in its favour.  In essence, he thus submits that the action is brought to enforce contractual obligations, that the contracts concerned are the loan agreement and the mortgage agreement and that the Rules which he calls in aid provide the machinery by which those rights can be enforced.

7. It seems to be clear that if the pleadings disclose a cause of action in the general jurisdiction of the Court, then an order for possession of land can be made under the Rules on which the plaintiff relies notwithstanding that the party seeking the order cannot bring himself within the ambit of s192 RPA.[2]    It is beyond question that the Court has jurisdiction to determine claims in contract.  The submission should be accepted accordingly and I am thus satisfied that the plaintiff has brought himself within the general jurisdiction of the court.

   [2] Tyndall Funds Management Australia Ltd & Ors v CAN 078545605 & Ors [2002] SASC 177 at [23]. The Rules referred to in that decision are to the same effect as the Rules on which the plaintiff relies.

8. As far as the application for summary judgement is concerned, Rule 232(2)(a) of The District Court Rules 2006 provides that summary judgment may only given in favour of a plaintiff if the Court is satisfied that “…there is no reasonable basis for defending the applicant’s claim…”.  The onus is on the plaintiff to demonstrate that there is no reasonable basis to defend the claim, the court must consider the cogency of any bona fide defence identified by the defendant, it must proceed with care and caution and summary judgment can only be entered in the clearest of cases.[3]

   [3] Ceneavenue Pty Ltd & Ors v Martin & Ors [2008] SASC 158 at [74]-[82].

9. On the face of the affidavit filed in support of the applications, there does not appear to be any answer to the applications.  However, the defendant has not filed any affidavits in response and she did not appear on the hearing of the summons.  On being satisfied that she is in ill health and unable to attend I, in effect, gave leave to her husband to appear on her behalf.  However, he has not yet had the opportunity to say anything in answer to the applications and I simply do not know whether the defendant wishes to file answering affidavits or adduce evidence.

10. Given the care and caution with which I must proceed, given that a reasonable basis on which the applications might be restricted might yet be identified, and given that the circumstances may have changed since the applications were last before me, I cannot be satisfied that the case for a summary judgment is sufficiently clear to warrant its entry.  Accordingly, I make no order on the application at this stage and will adjourn further consideration of it to enable the parties to consider their positions.

11. I will hear the parties as to the future of the applications and as to what, if any, directions I should give.