Westpac Banking Corporation v Michaelides

[2012] QDC 57

[2012] QDC 57

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 351 of 2011

WESTPAC BANKING CORPORATION	Plaintiff
and
JOHN MICHAELIDES	Defendant

SOUTHPORT

..DATE 2/04/2012

ORDER

CATCHWORDS

Property Law Act 1974 s 84
Uniform Civil Procedure Rules r 292

"Summary judgement for possession of mortgaged property - no money claim - defendant fails to appear- his filed defence contended that both mortgage debt and mortgaged property belonged to a family trust (contrary to the documents), disputed the amount of mortgage arrears and contended that statutory notices of default had not been received - plaintiff entitled to rely on mortgage provisions for corresponding notices and for service of any notice or court document expressly effective "even if it never arrives"
HIS HONOUR:  The court has made an order pursuant to Rule 292
that the plaintiff mortgagor recover, as against the defendant, possession of the land described as Lot 50 on Group Titles Plan of Resubdivision No. 106283 in the County of Ward, Parish of Mudgeeraba, being all of the land contained in title reference 50187036 and situated at 47/20 Tallebudgera Creek Road, Burleigh Heads (also known as 18 Tallebudgera Creek Road, Burleigh Heads) in the State of Queensland.

The court also orders that the defendant pay the plaintiff's
costs of and incidental to the proceeding (including this
application) to be assessed on the indemnity basis.
There has been initialled a draft order amended to read as
aforesaid.

The defendant did not appear today when called about 10.45
a.m.  He has filed a notice of intention to defend on the 17th
of October 2011 and with it a defence, the heading of which,
unlike that of the notice of intention, has not been amended to
identify the District Court as the venue rather than the
Magistrates Court.

The plaintiff's claim is for possession of the mortgaged
premises which are registered as the defendant's property
without any indication whatever of a trust.  The defence
asserts that the relevant loan, "was made to a trust account,
namely, Marjo Family Trust."  Also that "the plaintiff did
not obtain a true valuation of the property, therefore, the
plaintiff erred regarding the amount of the loan dispersed
(sic) to the defendant."  (I fail to see how lending the wrong amount would affect the cliaim in the circumstances.  The next contention in the defence is
that "The loan dispersed (sic) was secured by property owned
by the Marjo Family Trust, therefore, the plaintiff has no
legal right to sue the defendant personally."

Mr Goodwin, representing the plaintiff, tells the court he
accepts that it should proceed on the basis that there is such
a thing as the Marjo Family Trust.  It's not shown in the
evidence that the Marjo Family Trust had anything to do with
relevant matters.  The loan agreement in evidence is with the
defendant by name, without any qualification, likewise, he has
mortgaged the subject property in his own name.  There's
nothing whatever to suggest the bank was on notice of any
trust.  If the contentions in the defence set out above are
true and both the loan and the property involve the trust
rather than defendant personally, it would seem that in a moral
sense, disregarding the legalities for the moment, neither the
trust nor the named individual defendant could complain if, in
the circumstances, the bank were to get possession of the
property.

There is an entitlement in the plaintiff to "take possession
of the property" in clause C 2 of the mortgage conditions
which provides the bank's powers on default.  Default is
established.  The loan arrangement is one of a kind I
haven't struck before which requires the borrower to ensure
that indebtedness is kept within a set limit.  By agreement of the parties the limit originally was $310,000 in the early part of 2007.  It has been increased.  At the outset the available funds that could be redrawn by the defendant were $1,650.20.  A limit in the amount of $355,417 was established on the 4th of June 2010, the previous limit having been $344,000.

The bank statements exhibited to Mr Cannalonga's affidavit
show the arrears as at the last of them in November 2010 as
$44,488.93 cents.  The court is told that's increased to about
$65,000; the precise amount doesn't matter today since no
money judgment is sought, simply possession of the premises.

According to Mr Cannalonga the last payment was on the 19th of January 2010.  I would beg to differ in the sense that the credit shown on that date is simply reversing a debit entitled "payment by authority” of the previous day.

The last amount involving a deposit of funds by the defendant
appears to me to have been on the 24th of November 2009 when
$500 was deposited at Broadbeach.

If it matters, reversals of earlier debits rather similar to
the 19th of January 2010 also appear on the 1st of June
2010.  The point of this analysis is to demonstrate what
appears to be incontrovertible, that the defendant must be
taken to be aware, from the bank statements, which I'm
satisfied were posted to the post office box which he gives as
his address for service, that gross default (in the failure to
liquidate arrears) had occurred.

His defence goes on, "The defendant is disputing the amount of
arrears as shown in paragraphs 7 and 8 of the plaintiff's
claim.  The defendant did not receive and was not served a
notice pursuant to section 84 of the Property Law Act as
stated by the plaintiff in paragraph 8.  The defendant did not
receive a notice demanding possession of the land as stated in
paragraph 10 by the plaintiff."

In circumstances where the plaintiff's claim has never been
for more than possession and costs any quibbles the defendant
might have as to the precise amount of arrears seems to me
beside the point; that there are substantial arrears is clear.

The more difficult aspects of the matter for the Court are
concerning the issue raised regarding service of a notice
pursuant to section 84 of the Property Law Act. The
circumstances, it seems to me, are ones in which the plaintiff
is not really relying on its statutory rights as
mortgagee.  The mortgage provisions create an alternative code
which includes provisions to cover difficulties in getting
documents to the mortgagee. 

Clause E 1 provides inter alia that, "A notice or
demand under this mortgage will be served on you if:

it is served
personally or;

• it is left at the property or your last address as known to

the lender or;

• it is sent by mail to the property or your last address

known to the lender;

if so, it is to be regarded as having been delivered in the
ordinary course of post even if it never arrives ... unless
consumer credit law applies and requires otherwise the lender
may serve court documents in the same way."

The plaintiff adopted an approach of sending documents out by
both ordinary and registered post.  So far as the documents
sent by registered post are concerned those have not reached
the defendant.  He's not been home when the postman came; he has
not responded to cards left by the postman indicating that
registered items are available for collection at the post
office.  After the customary waiting period the post office
has returned them.  None of the documents sent by ordinary
post have been returned.

This approach of using post has been adopted both for the
purposes of the section 84 notice and corresponding notices,
(which, of course, may be the same document) under the mortgage provisions and also, once the defendant's documents filed in the court advised an address for service, by post of applications in the proceeding as permitted by the rules.

There's reason to think, from the defendant's refusal to take telephone calls and the like, that he is making himself scarce, so to speak, and that he has a fairly clear idea of what the plaintiff bank is about.

Mr Goodwin has assisted the court with provision of written
submissions and authorities; the main one which is of
assistance in respect of posting important documents is Bowman
v Durham Holdings Pty Ltd (1973) 131 CLR at 8.

On the question of involvement of a trust, which seems to me
to create no particular difficulties here, Mr Goodwin referred
Farah Constructions Pty Limited v Say-Dee Pty Limited 2007
230 CLR at 81.

Although it can be seen there are complexities that are
troubling the court today, in the end it's a clear case for summary judgment.  Nothing in the plaintiff's material and
nothing emanating from the defendant suggests that there is
any issue which requires to be tried or that the defendant
would have any prospects whatever of defeating a claim for
possession.

It remains to be seen whether he will be able to come up with
anything that does concern the court if there should be further proceedings arising out of the anticipated enforcement warrant.

I haven't yet said anything about the indemnity costs sought which are ordered consistently with the provision
numbered B 1 (b) in the mortgage document which expressly
refers to "legal fees on a full indemnity basis" as an
example of "reasonable amounts" which “the Lender
reasonably spends or incurs in relation to enforcement of this
mortgage or in preserving or maintaining the property after a
breach occurs”.

Order as per initialled draft in the end.

Perhaps I also ought to make it clear that so far
as address for service is concerned, the defendant has
provided both a post office box address and an address of
31/ 18 Tallebudgera Creek Road West Burleigh, which is
slightly misleading on the notice of intention to defend given
that the 31 appears in place of 47 which has been struck out;
47 apparently is the number for the street address of the
property which constitutes the bank's security.

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