Williams v Contovasilis

[2007] NSWSC 646

CITATION:	Williams v Contovasilis [2007] NSWSC 646
HEARING DATE(S):	23/05/07 and 14/06/07
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
EX TEMPORE JUDGMENT DATE:	14 June 2007
DECISION:	Vendor's lien declared in favour of plaintiffs. Orders made for the enforcement of the lien.
CATCHWORDS:	CONVEYANCING [114]- Vendor's lien- Balance of purchase price unpaid at completion- Interest payable at 10% on purchase price if unpaid- Vendor's lien exists not only for unpaid purchase price but also to interest on it- Judicial sale appropriate means of enforcing lien- Procedure for judicial sale orders considered.
LEGISLATION CITED:	Civil Procedure Act 2005, s 100 Property, Stock and Business Agents Act 2002, s 66
CASES CITED:	Commonwealth Bank of Australia v Horvath [1996] ANZ ConvR 501
PARTIES:	Julianne May Williams (P1) Leanne Thomas (P2) William Graham Contovasilis (D1) Focoze Pty Ltd (D2)
FILE NUMBER(S):	SC 2021/07
COUNSEL:	A R R Vincent (P)
SOLICITORS:	Stacks/Taree (P)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Thursday 14 June 2007

2021/07 – WILLIAMS v CONTOVASILIS

JUDGMENT

1 HIS HONOUR: These proceedings involve an application to enforce the vendor’s lien in respect of property at Swan Bay in the Woodburn area of New South Wales. The transaction from which it arises is a tad unusual. The property was held by a sister and brother as to half interest each, but the sister’s interest was held in trust for her by her mother. The mother is the first plaintiff in these proceedings, the daughter the second plaintiff. The first defendant is the second plaintiff’s brother. The second defendant is the first registered mortgagee over the property.

2 The contract was in the 2005 edition of the standard form. The purchase price for the plaintiffs' half interest was $110,000. Special condition 38, whilst not defining the expression “completion date”, specifies that completion will be effected on or before three months from the date hereof, that is, completion was to be effected by 6 July 2006.

3 In fact what happened was on 13 April 2006, the old mortgagee was paid out, and a new mortgagee to whom only the first defendant was responsible, was substituted. The first defendant became the registered proprietor of the land and the second defendant, the registered mortgagee, without the plaintiffs being paid the balance of purchase money. The balance of purchase money, the evidence quite clearly establishes, is $81,846.61.

4 Special condition 33 provides that if the purchaser shall not complete this purchase by the completion date then interest would run at 10 per cent on the balance of purchase money from the day immediately after the completion date to the day on which the sale shall be completed. In the rather peculiar facts it is hard to see how this clause applies. Mr Vincent, who appears for the plaintiffs, says that the only possible meaning of the clause is that “complete” means pay the purchase money and that is possible, but I am not 100 per cent sure that is the proper construction of clause 33. It is of little moment because clause 33 does indicate that the parties have agreed on a default interest rate and under s 100 of the Civil Procedure Act 2005 the court can fix that rate as the proper rate of interest. The relevant cases are referred to at s 100.80 in Ritchie’s Uniform Civil Procedure. It is also of little moment because, as appears from the evidence, there is not enough equity even to pay the $81,846, let alone any interest.

5 The vendor’s lien exists where a vendor is unpaid and there has been a conveyance and the lien extends not only to the unpaid purchase price but also to interest on it: see the Second Australian Edition of Fisher & Lightwood on Mortgages paras 2.23 and 2.26. Once the lien has been established by the court, it is enforceable by judicial sale: op cit para 2.26 and Commonwealth Bank of Australia v Horvath [1996] ANZ ConvR 501.

6 I am satisfied that the purchase price and the interest has not been paid and, accordingly, declare that there is a lien in respect of $81,846.61 plus 10 per cent interest from 7 July 2006 to 14 June 2007 which is approximately $7,668.91, so that, in total, the lien is in respect of $89,515.52.

7 Having made that declaration, I can now deal with the enforcement. The matters that the court should consider when directing a sale are usefully set out in vol 34 of Atkin’s Court Forms, 2nd ed 2002 issue at p 206 [253]. The learned authors give a list which is not exhaustive but is the usual list that the court looks at when ordering judicial sale. Evidence will be required of most, if not all, of these matters. The last is directions for:

1. Appointing a party or other person to conduct the sale.

2. Obtaining evidence of the value of the land.

3. Settling the manner of sale.

4. Settling of particulars and conditions of the sale.

5. Fixing the minimum or a reserve price.

6. Setting the fees and expenses to be allowed to an auctioneer or estate agent.

7. Providing for the distribution of the purchase monies.

8. Certifying the result of sale.

9. Appointing conveyancing counsel to report on title.

No 9 does not apply in Australia, and No 8 is optional because there is little sense in having a formal notification to the court of the result of the sale unless the parties particularly want it.

8 The first mortgagee has obtained a valuation and I will give leave for that valuation to be used in these proceedings despite the fact that it is "expert evidence". That valuation having been obtained, there is no need to obtain any other and from that valuation I can fix a reserve.

9 I will not mention the amount in these reasons but I have adjusted the valuation downwards to fix a reserve because, as the figures pan out, the only persons affected by such adjustment are the plaintiffs themselves and if I fix too high a reserve, further legal costs will be incurred by coming back to the court to adjust.

10 As to the other matters, there is evidence as to a proper auctioneer, proper people to appoint to conduct the sale on behalf of the plaintiffs and the fees and expenses of the persons involved.

11 The first defendant has never appeared, though served, although I am satisfied he was duly served. The second defendant, the first mortgagee, has consented to the orders and has indicated it is content to stand by and have the property sold rather than sell it itself and has provided a payout figure.

12 Taking that payout figure, and the evidence as to the cost and expenses of the sale into account, there will probably be only about $33,000 left for the plaintiffs. That means that any falling short of the valuation will only affect the plaintiffs, and that is why I can reduce the reserve.

13 Mr Vincent provided short minutes of order and I will make those orders including liberty to apply on three days' notice if the reserve is not reached.

14 One other matter which can be dealt with if need be under the liberty to apply, is whether leave should be given to the second plaintiff to bid at the sale. Under s 66 of the Property, Stock and Business Agents Act 2002, where there is a sale at auction of rural land, which this is, the "seller" must not make a bid. The only exception appears to be in subs 5 and 6 which do not apply in the instant case.

15 The second plaintiff may wish to purchase. The question is whether she is a "seller" within the meaning of s 66. The seller does not appear to be defined in the statute and the persons having control of the sale are the chartered accountants appointed by me to conduct the sale under para 4 of the short minutes of order.

16 However, there must be some doubt as to whether the beneficial owner of a vendor’s lien which is being enforced by court order sale is a "seller" within the meaning of s 66. The point only came up late in the proceedings and there has been insufficient time to argue it. It is best left to an application under the liberty to apply after counsel has had full time to research the point.

17 So, I make orders 1 to 12 in accordance with the short minutes which I will initial, date and place with the papers.

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