Walter v National Australia Bank Ltd
[2004] VSC 325
•25 August 2004
| IN THE SUPREME COURT OF VICTORIA |
AT MELBOURNE
PRACTICE COURT
No. 7407 of 2002
| FRITZ-JOSEPH WALTER AND INGRID ADELHEID WALTER | Appellants |
| v | |
| NATIONAL AUSTRALIA BANK LTD | Respondent |
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JUDGE: | OSBORN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25 August 2004 | |
DATE OF JUDGMENT: | 25 August 2004 | |
CASE MAY BE CITED AS: | Walter & Anor v National Australia Bank Ltd | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 325 | |
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Stay of warrant for seizure and sale.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Ms C. Walter in person | |
| For the Respondent | Mr N. Mukhtar QC | Russell Kennedy |
HIS HONOUR:
The appellants, Fritz-Joseph Walter and Ingrid Adelheid Rosevelt Walter have tonight made a last minute application to stay the execution of a warrant for seizure of sale of the house property owned by them situated at 13 Sanctuary Boulevard, Wodonga.
The judgment forming the basis of the warrant was given by Dodds-Streeton J on 25 February 2004 for possession of the land in issue.
Dodds-Streeton J had before her two related proceedings which were heard together. In proceeding number 4486 of 2001, Fritz Walter, Ingrid Walter and Carmen Walter, together with an associated company and family trust as plaintiffs, sought orders invalidating certain loan contracts, mortgages, guarantees and debentures executed by them in favour of the National Australia Bank.
In proceeding number 7407 of 2002, the National Australia Bank sought to enforce one of the mortgages which was executed by Fritz Walter and Ingrid Walter over a residential property of which they are registered proprietors. It is the judgement in this latter matter which has resulted in the warrant which is the subject of the application before me.
This application is in effect brought in aid of a summons which has been issued and made returnable before the Court of Appeal on 24 September 2004, seeking orders that the learned trial judge’s order be stayed, pending the determination of an application for special leave to appeal currently before the High Court. That summons, although prepared and dated 12 July 2004 was not issued until 24 August 2004. The circumstances in which this occurred have been explained by the appellants in a manner to which I will return.
The application for special leave to appeal relates to a decision by the Court of Appeal on 26 March 2004 whereby the appellants' application for a stay of the trial division judgement pending determination of an appeal to the Court of Appeal was refused and the appellants were ordered to give security for costs as a condition of such appeal.
In their reasons for decision, Phillips JA and Bongiorno AJA, stated the accepted principle governing the grant of such a stay at paragraph 7, namely, that an applicant must show special or exceptional circumstances. The judgement goes on to analyse the circumstances of the appellants' appeal to the Court of Appeal at paragraphs 8, 9 and 10:
“In this instance, the applicants plead hardship, particularly if possession must be given of the house property at 13 Sanctuary Boulevard, Wodonga which was purchased with a bank loan. As found by the judge, this property was purchased with a bank loan on which, as at 12 June 2003, more than $1 million was owing to the bank. This sum remains unpaid. Again as Mr Mukhtar points out, any natural sympathy for the appellants over the dispossession of their family home is perhaps counterbalanced by three things in this case.
First, at some stage, albeit earlier in the proceeding, the Walters voluntarily took steps to sell the family home to reduce their debts to the respondent. Secondly, with all due respect to those who framed the notice of appeal, there must be real doubt that the appeal has any significant chance of succeeding. With the exception of the somewhat bizarre allegation concerning the corruption of the judiciary by the rites of Freemasonry, the notice of appeal regurgitates contentions put before the trial judge and dealt with very comprehensively by her. Those points include the invalidity of the Constitution Act 1975 (Vic); that a bank loan which is created by book entry only and without the use of any actual money is bad – indeed is tainted with fraud; and that it was illegal for the bank to lend on the security of land. On the two issues that might have mattered, namely unconscionability and estoppel, Mr Mukhtar points out that the trial judge found that the Walters were not labouring under any special disability and that there were no facts to support an estoppel. Her Honour preferred the evidence of the bank officers to what she characterised as 'evasive' evidence of Carmen and Fritz Walter. In the circumstances there might well be no basis for an appellate court intervening. Reference may be made to what the judge said at paragraph 373 of the judgment ([2004] VSC 36). The third point is that if the appeal should succeed, the bank would surely be in a position to restore the appellants to their former position, at least financially, if not to reinstate them in possession of their home.
Having considered the material before us and heard what has been said this morning, we find ourselves unpersuaded there are any special circumstances to justify departing from the general rule that a litigant is entitled to the benefit of a judgment notwithstanding the institution of an appeal.”
In the normal course of events, any further application for a stay of execution pending an application for special leave to appeal to the High Court should have been made either to the Court of Appeal or to the High Court in accordance with the principles stated by Brennan J in Jennings Construction Ltd. and Burgundy Royale Investments Pty. Ltd. No. 1, 1986 161 C.L.R. 681 at 684:
"A stay to preserve the subject matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. If an order for a stay is made, the respondent is kept out of the benefit of the order of the court in which the matter is pending until the hearing of the application for special leave to appeal. That was the situation to which this court adverted in Marconi’s Wireless Telegraph Co Ltd v Commonwealth (No 3) (1913) 16 CLR 384. There the court granted an order staying the operation of one of its own orders pending the hearing of an application to the Privy Council for special leave to appeal. What the court said in that case, at 386, is applicable to this case: ‘The court will not ordinarily grant an application of this kind unless very strong and special grounds are shown. This is a very peculiar case. The conditions are such that, on the one hand, if the stay is granted without more, the whole benefit of the action may be lost to the plaintiffs, while, on the other hand, unless the stay is granted on some fair terms, the defendants’ appeal will be nugatory. It really is a question of the preservation of the rights of the parties without disregard of the balance of convenience.’
A stay order was then made on terms.
When an application for special leave to appeal is made to this court, a jurisdiction to stay may be exercised by the court below and it is to that court — the court in which the matter is pending and which is familiar with the matter —that an application to stay should first be made.”
In the present case, no application for a stay has been made to the Court of Appeal, other than by way of issue of the summons to which I have referred. Likewise, no application has been made for a stay to the High Court. Nevertheless I accept that I have jurisdiction to grant an interim stay pending further application to either the Court of Appeal or the High Court (and the respondent did not contend otherwise).
Ms Carmen Walter, who is the appellants' daughter and appeared for them before me as she did in the prior proceedings without objection on behalf of the respondent, made application to me on the basis of circumstances which are said to constitute new matters since the matter was before the Court of Appeal.
It is my view, however, that the affidavit filed in support of the summons seeking a further stay from the Court of Appeal does not disclose any new matters concerning the underlying circumstances of the case, save one, beyond those which were before Phillips JA and Bongiorno AJA.
Further, it is apparent that although it is asserted by paragraph 17 of that affidavit that the appellants would suffer unreasonable hardship if the summons is rejected, no evidentiary basis is stated for this bald assertion. Moreover, although it is asserted by paragraph 18 that the appellants' rights of appeal would be rendered nugatory if possession of the land were lost, it is apparent that this circumstance was necessarily in contemplation when the Court of Appeal last considered the question of a stay of execution with respect to the judgement of the trial judge.
The one new factual circumstance relating to the context of the appeal is the occurrence of what the appellants contend is an error on the face of the Court's record. It appears that consequent upon the decision of Dodds-Streeton J, a slip occurred in the formal order issued by the Court with respect to the title particulars of the land in issue. That slip has now been rectified by order of the learned trial judge, authenticated on 5 August 2004. The nature of the slip was the addition of a superfluous additional zero in one number comprised in the title description: Certificate of Title Volume 10024 was described as Certificate of Title Volume “100024”.
I should add that a reading of the trial judge's reasons demonstrates that any suggestion she intended to refer to land other than the land which is in issue before me, is ludicrous.
Once this factor is put aside, the only material change in circumstances since the matter was before the Court of Appeal in March is that the appellants have filed an application for special leave to appeal to the High Court. As I have said, such a change does not alter the complexion of the underlying circumstances which were before the Court of Appeal.
It is also, in my view, fair to observe that the application for special leave is directed to a discretionary refusal of interlocutory relief and for this reason alone, must be regarded as highly problematic.
I am prepared to accept for present purposes the submission of Ms Walter that no summons seeking a further stay from the Court of Appeal was issued until yesterday and no further application has been brought on before the Court of Appeal because the appellants did not believe the warrant would be executed until notice of intention to execute such warrant was given by the Sheriff last week.
The basis of the appellants' belief was the understanding they had of the status of the trial judge's order prior to its rectification under the slip rule, and in particular, an understanding derived from discussions with the prothonotary that the warrant would not be executed while the order misdescribed the property in issue.
I am also prepared to accept for present purposes that a refusal of the stay sought may render futile, firstly, any further application to the Court of Appeal for a stay and secondly, any application to the High Court for special leave to appeal with respect to the question of a stay.
Nevertheless, I must, as I have said, be satisfied of special circumstances. It cannot be the law that an unsuccessful party is entitled to a stay simply by reason of the lodging of a further appeal. Moreover in the present case the right of appeal in issue is conditional upon the grant of special leave.
The passage I have quoted from the judgement of Brennan J in Jennings Constructions Ltd. and Burgundy Royale Investments Pty. Ltd. emphasises that a stay to preserve the subject matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before the exercise is warranted. No stay should be granted unless very strong and special grounds are shown.
In the ultimate, I am not satisfied that the appellants have demonstrated such special circumstances in the requisite sense and in particular, I am not satisfied that new circumstances have arisen since the matter was before the Court of Appeal which would justify a different view from that adopted by it. In the event the application for a stay must be dismissed.
COUNSEL: Your Honour, I seek an order for costs.
HIS HONOUR: I will order that the respondent's costs of the application be paid by the appellants.
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