Watts v RHG Mortgage Corporation Ltd
[2015] WASCA 139
•10 JULY 2015
WATTS -v- RHG MORTGAGE CORPORATION LTD [2015] WASCA 139
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASCA 139 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:111/2014 | 17 JUNE 2015 | |
| Coram: | McLURE P NEWNES JA | 10/07/15 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Enforcement of judgment suspended until further order | ||
| B | |||
| PDF Version |
| Parties: | KERRYANN PATRICIA WATTS NATHAN JOHN WATTS RHG MORTGAGE CORPORATION LTD |
Catchwords: | Practice and procedure Application for order suspending enforcement of judgment Civil Judgments Enforcement Act 2004 (WA), s 15 Turns on own facts |
Legislation: | Civil Judgments Enforcement Act 2004 (WA), s 15 |
Case References: | Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308 Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : WATTS -v- RHG MORTGAGE CORPORATION LTD [2015] WASCA 139 CORAM : McLURE P
- NEWNES JA
- First Appellant
NATHAN JOHN WATTS
Second Appellant
AND
RHG MORTGAGE CORPORATION LTD
Respondent
Catchwords:
Practice and procedure - Application for order suspending enforcement of judgment - Civil Judgments Enforcement Act 2004 (WA), s 15 - Turns on own facts
Legislation:
Civil Judgments Enforcement Act 2004 (WA), s 15
Result:
Enforcement of judgment suspended until further order
Category: B
Representation:
Counsel:
First Appellant : In person
Second Appellant : In person
Respondent : Mr J Lin
Solicitors:
First Appellant : In person
Second Appellant : In person
Respondent : Jackson McDonald
Case(s) referred to in judgment(s):
Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203
1 JUDGMENT OF THE COURT: On 22 July 2014, on the respondent's application for summary judgment, Master Sanderson ordered that the appellants deliver to the respondent vacant possession of two properties mortgaged to the respondent to secure certain loans and credit facilities, and pay to the respondent the sum of $634,337.59 plus interest. The appellants have appealed from the judgment and have sought an order suspending its enforcement until the determination of the appeal.
2 On 17 June 2015, we made an order suspending enforcement of the judgment until further order. We said we would provide reasons for our decision. These are the reasons.
The background
3 The respondent commenced proceedings against the appellants claiming money owing under four loan agreements made between the respondent and the appellant. In its statement of claim, the respondent pleaded that the first-named appellant (Mrs Watts) was the registered proprietor of two properties, one in Dudley Park and the other in Barragup. The Dudley Park property is the appellants' home. It appears the Barragup property is vacant land of some five hectares and was acquired by Mrs Watts with the intention that, when the appellants were in a position to do so, they and certain other members of their family would build and move into homes on that property.
4 In the action, it was alleged that the appellants had entered into the following written agreements with the respondent:
1. An agreement dated 15 January 2004 by which the respondent agreed to provide to the appellants a credit facility with a limit of $120,000, to be secured by a mortgage over the Dudley Park property;
2. An agreement dated 15 January 2004 by which the respondent agreed to provide to the appellants a credit facility with a limit of $40,000, to be secured by a mortgage over the Dudley Park property;
3. An agreement dated 26 March 2004 by which the respondent agreed to provide to the appellants a loan of $105,000, secured by a mortgage over the Barragup property, and the appellants agreed to make fortnightly repayments of the loan over a period of 30 years; and
4. An agreement dated about August 2006 by which the respondent agreed to provide to the appellants a credit facility with a limit of $350,000, to be secured by a mortgage over the Dudley Park and the Barragup properties.
5 It was alleged that the appellants failed to pay amounts owing under each of the agreements and, despite service of a default notice, failed to remedy those defaults. Accordingly, it was alleged, the respondent had become entitled to repayment of the total amount owing under each agreement and to possession of the properties.
6 The appellants each filed a memorandum of appearance. They did not have legal representation. The respondent then applied for summary judgment. It appears from an affidavit, dated 12 March 2014 and filed by the respondent in support of the application, that the full amount of the credit facilities and the loans - a total of $615,000 - had been advanced to the appellants, a total of $336,401.23 had been repaid by the appellants, and as at the date of the affidavit the sum of $611,756.88 remained owing.
7 The application for summary judgment was first listed for hearing before the Master on 17 April 2014. However, a complaint the appellants had made about the loans to the Credit Ombudsman Service Limited (COSL) had not then been resolved and on that day counsel for the respondent sought and obtained an order that the application be adjourned sine die. It seems the adjournment had been agreed between the parties, and the appellants did not appear at the hearing. No directions were made then or at any other time for the filing of any affidavit by the appellants or written submissions by either side.
8 Subsequently COSL 'closed' the complaint and the application for summary judgment was relisted for hearing on 22 July 2014. On that date, the respondent was represented by counsel but only the second-named appellant (Mr Watts) appeared on the appellants' side. No affidavit had been filed by the appellants. The master told Mr Watts that the respondent wanted possession of the two properties and it was '[his] chance to have [his] say.' Mr Watts told the master that Mrs Watts felt her complaint had not been answered by COSL. He said Mrs Watts had not appeared at the hearing before the master because she was trying to get a new job and Mr Watts had told her it was in her interests to sort that out rather than go to court. Mr Watts then described how the appellants had come to be in default under the agreements, a description that was, with respect, something less than coherent. He went on to say that he wanted to sell one of the properties in an endeavour to pay the debt but Mrs Watts was opposed to it being sold. The master said that, regardless of the appellants' personal circumstances, the respondent was entitled to take possession of both properties and sell them, and that it was entitled to judgment for the total amount owing under the agreements.
9 The master ordered that the appellants give possession of the properties to the respondent within 56 days and pay the respondent the sum of $634,337.59 plus interest at a daily rate of $133.52.
The appeal
10 On 12 September 2014, the appellants filed an appeal notice. The appellants' case was filed on 1 May 2015. There are eight grounds of appeal. They are not in conventional form and some are not readily comprehensible. It is sufficient for present purposes to refer to two substantive complaints which emerge from the grounds of appeal. One is that summary judgment was entered in the absence of Mrs Watts, who was the sole registered proprietor and mortgagor of the two properties. The other is an allegation that, unbeknown to the appellants, in order to meet the respondent's lending criteria an agent of the respondent had inserted on the loan application forms information about Mr Watts' income and work history which was false. The appellants contended that in that way, among others, the respondent had breached the National Credit Code.
The relevant principles on the appellants' application
11 An order suspending the enforcement of a judgment may be made under s 15 of the Civil Judgments Enforcement Act 2004 (WA) (the Act) if there are 'special circumstances' that justify doing so or, alternatively, the court has power under its rules to grant an interim order in the form of a stay of execution pending the hearing of the appeal.
12 There are nohard and fast rules applicable to an application under s 15 of the Act but the relevant general principles are those described in Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308: see Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203 [3]. The general principles relevant to an application for a stay under the rules are not materially different. For present purposes, they can be sufficiently stated as follows:
• Ordinarily a successful litigant is entitled to enforce a judgment pending the determination of any appeal. It is for the applicant to persuade the court that there are special circumstances that justify the suspension of enforcement of the judgment.
• Generally that will require the applicant to establish that the suspension of enforcement is necessary to prevent the right of appeal being rendered nugatory or to avoid practical difficulties in respect of the relief which may be granted on appeal.
• Even if that is made out, the suspension of enforcement will generally be refused unless the court is satisfied that the appeal has reasonable prospects of success.
• And it may still be refused where it appears that the balance of convenience does not lie in favour of the applicant; where, for example, the suspension of enforcement will occasion hardship to the respondent which may not be alleviated by the terms upon which the stay may be granted.
Disposition of the application
13 Turning first to the question whether the grounds of appeal have reasonable prospect of success, the first of the appellants' complaints raises a question of procedural fairness.
14 The hearing of the summary judgment application on 22 July 2014 was effectively the first return date. No orders had been made for the appellants to file any affidavit in opposition to the application and no affidavit had been filed. The appellants were unrepresented and it was not apparent that they had any knowledge or experience of the legal process. As we have said, only Mr Watts appeared. The master was aware that the appellants had previously made a complaint to COSL about the transactions and was told that Mrs Watts was dissatisfied with COSL's handling of the complaint. The master did not, however, inquire of Mr Watts whether Mrs Watts considered she had a defence to the respondent's claim and, if she did, whether she knew how to go about advancing it. Mr Watts was simply told that it was his opportunity to 'have [his] say.'
15 While it is the case that Mrs Watts was aware the application was listed for hearing that day, the master was told that Mr Watts had dissuaded her from attending because he believed her time was better spent pursuing a job opportunity. In his submissions, Mr Watts did not appear to purport to speak on behalf of Mrs Watts but to express his own view of the matter. Mrs Watts, however, was the sole registered proprietor of the properties that were in jeopardy on the application and it was evident that she was anxious not to lose them. There appears to have been no reason why the summary judgment application could not have been adjourned to enable Mrs Watts to be heard.
16 In the circumstances, in our view, it is reasonably arguable that there was a failure to accord Mrs Watts procedural fairness.
17 That, however, would not be sufficient unless there were reasonable prospects of establishing an arguable defence to the respondent's claim. In that respect, the appellants have filed a number of affidavits in support of the application. It is unnecessary to canvass the appellants' affidavits in detail. Regrettably, none of the affidavits provide a comprehensive or clear picture of the circumstances in which the various transactions with the respondent came about or the purposes for which the funds were advanced by the respondent.
18 However, some of the allegations made by the appellants, if made out, may arguably entitle them to relief under the National Credit Code, including the setting aside of the mortgages. Thus, for example, in relation to the credit facility of $350,000, the appellants say that they signed the application form, dated 13 July 2006, in blank on the basis of a representation by the respondent's agent that he would complete it from the information provided by the appellants. They say, however, that when the agent completed it he stated in it that Mr Watts' income was $100,000 per annum whereas Mr Watts had told him it was $60,000, and wrongly stated that Mr Watts had been self-employed for 10 years. (The appellants point out that in the application form dated 18 February 2004 for the loan of $105,000, which they say was completed by the same agent in the same circumstances, Mr Watts was said to have been 'in [his] current role' for 3 years and 4 months.) The appellants also say that the respondent's agent omitted one of the liabilities of which they had informed him and had understated another. The effect, the appellants say, was that on the basis of the financial information on the application form they met the respondent's lending criteria, whereas an accurate statement of the appellants' financial position would have revealed that they did not.
19 Among other complaints, the appellants say that the respondent made no proper enquiries as to their capacity to repay the loans in circumstances where such inquiry would have disclosed that they did not have the capacity to do so.
20 It is impossible at this stage to assess the substantive merits of the various matters upon which the appellants rely for their contention that they are entitled to relief under the National Credit Code. The appellants also face the difficulty that the material on which they seek to rely was material that was available to them at the time of the hearing of the summary judgment application and they have not explained why it was not advanced in opposition to that application.
21 However, whether or not that material might be admitted as additional evidence on the appeal is not a matter that can be determined now. We note in passing that to date no application has been made to adduce additional evidence on the appeal and that will need to be done if these grounds are to be relied upon. But on the basis of the affidavit material, if admitted on the appeal, the appellants would appear to have reasonable prospects of persuading the court that there are arguable grounds of defence that should go to a trial.
22 The balance of convenience favours the appellants. The respondent has provided recent valuations of the two properties in which the Barragup property was valued at $320,000 to $370,000 and the Dudley Park property at $370,000 to $420,000. The amount currently owing under the judgment is some $670,922. For the time being at least, the security would appear to be sufficient to protect the respondent's interests. On the other hand, the appellants stand to lose their home and another property which was acquired for their future home if enforcement of the judgment is not suspended.
23 In our view, there are special circumstances which justify a suspension of the enforcement of the judgment and accordingly we ordered that enforcement be suspended until further order.
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