The plaintiff seeks possession of land at 36 Uralla Road, Armidale to give effect to a contract of sale of the land resulting from unpaid rates and charges. The first defendant is the registered proprietor of the land. The third defendant is a daughter of the first defendant and an occupier of the land. When the proceedings commenced on 13 December 2018 they named another daughter of the first defendant as the second defendant. That defendant has since died.
At the hearing of this matter this morning there was no appearance by either of the first or third defendants. Nor is there any defence by those defendants as a result of matters which I will explain in due course. In those circumstances the defendants are in default pursuant to r 16.2(1)(c) Uniform Civil Procedure Rules 2005 (NSW) and the plaintiff is entitled to judgment for possession. However, because the first defendant has previously appeared in the proceedings by virtue of filing defences, I will briefly provide reasons for the orders that will be made.
The first defendant became the registered proprietor of the land on 20 February 1986. The Council alleges that rates and charges for water services have been unpaid from July 2012 to July 2018. That gives the Council the right pursuant to s 713(2)(a) of the Local Government Act 1993 (NSW) to sell the land, because any rate or charge has remained unpaid for more than five years.
On 26 April 2018 the plaintiff resolved pursuant to s 713 of the Act to sell the land. On 15 February 2018 the chief executive officer of the Council certified the matters required under s 713(3) of the Act.
Thereafter, the requirements of s 715 of the Act were followed by the Council and the property was put up for sale by public auction pursuant to s 716 of the Act. That auction took place on 14 September 2018 but the reserve price was not met. Thereafter the land was offered for sale by private treaty.
On 6 November 2018 the Council entered into a contract for sale to a purchaser for $108,000. The land was sold with vacant possession, and special condition 8 set out the rights of the parties in relation to that vacant possession.
On 12 November 2018 the defendants were personally served with a Notice to Vacate the property by 10 December 2018. On their failure to vacate, the present proceedings were commenced by the filing of a statement of claim on 13 December 2018. That statement of claim sought possession of the land. Because the sale price exceeded the amount outstanding for rates and charges a further order was sought as follows:
An order that any remaining difference between the amount of unpaid rates for the Land and the purchase price for the Land received from the Purchaser by the Plaintiff on settlement be able to be used by the Plaintiff to defray its costs of these proceedings, and may be paid by the Plaintiff towards satisfaction of any costs liability of the Defendants arising out of these proceedings.
Leave to issue a writ of possession was also sought.
The first and second defendants each filed a defence on 23 January 2019. After the death of the second defendant the plaintiff filed an amended statement of claim removing the references to the second defendant. Thereafter, the first defendant filed an amended defence dated 29 March 2019. The third defendant has never filed a defence.
By a notice of motion dated 9 April 2019 the Council sought orders that the defences be struck out. On 6 September 2019 Ierace J struck out the defences: Armidale Regional Council v Vorhauer [2019] NSWSC 1153. It is not clear why default judgment was not entered at that time because leave was not given for the defendants to file any further defence. No doubt leave was not given because Ierace J concluded at [43]:
that it is not possible to discern what the defendants' actual defence is.
On 22 November 2019 the Council filed and served a notice of motion seeking that the matter be listed for final hearing and seeking leave to file and serve a further amended statement of claim. The motion was listed before the Registrar on 28 November 2019. There were no appearances for the defendants. The Registrar gave leave to the Council to file and serve a further amended statement of claim and fixed the matter for final hearing on 11 February 2020.
Subsequently on 29 November 2019 the first defendant filed two documents with the Court. One of them was entitled "Ex parte written submission for hearing being held on 28/11/19" ("the 29 November document"). The submissions are difficult to understand but the first defendant appears to rely on certain matters to submit that the land cannot be sold. As best I can discern the reasons for that are that there is a caveat that the first defendant has lodged on the land, and the first defendant says that the land cannot be sold until the caveat is removed. Secondly, there is no order of the Court establishing that a debt is owing. Thirdly, the contract of sale was not produced to the Court to prove that a sale exists, and no purchaser had made application for possession.
The other document was a letter to the Registrar of the Court which said (inter alia):
I will be submitting a DEFENSE (sic) (again) within 28 days of the 22 November 2019, as required by the Notice of Motion dated 22 November 2019.
No further defence has been filed.
I am satisfied from the affidavit of service of Andrew Francis Arthur Brown affirmed 13 December 2019 and of Geordie Marchant affirmed 5 February 2020 that the defendants were provided with notice of today's hearing date and copies of all of the affidavits relied upon by the plaintiff. The defendants were served under cover of a letter dated 2 December 2019 forwarded to them, by leaving a copy of the Court Book attached to the front gate of the property in Uralla Road on 3 February 2020, and by posting the Court Book to the defendants on 3 February. The letter of 2 December 2019 also informed the defendants that if they wished to file a defence to the further amended statement of claim they would need to file a notice of motion and supporting affidavit promptly, seeking the Court's leave to do so.
I am satisfied from the affidavit of Kim Lesley Bryan affirmed 5 November 2019 that Council resolved on 26 April 2018 to sell the land by public auction.
I am satisfied from the affidavit of Robyn June Shanahan affirmed 1 November 2019 that the total amount owing by the first defendant to the Council as at 6 November 2018 was $70,645.11 and that the amount outstanding for a period greater than five years at that date was $50,033.01. I am also satisfied that the outstanding rates and charges have been properly certified by the chief executive officer pursuant to s 713(3) of the Act.
I am further satisfied that the notices required to be given were properly given pursuant to s 715 of the Act.
I am satisfied from the affidavit of Peter Graff Cooke affirmed 14 November 2019 that the Council has entered into a contract of sale on 6 November 2018, and that on settlement of the contract vacant possession of the land must be given by the Council.
Although, in the absence of any defence, the defendants are not entitled to make any submissions at the hearing, I have, nevertheless, considered the 29 November document. The document appears to raise the same matters as were contained in a similar document dated 16 April 2019 which was before Ierace J. His Honour considered that the matters in that document did not disclose a proper basis for preventing the defences being struck out. I similarly consider that there is nothing in the 29 November document which provides any defence to the claim.
The Council has now satisfactorily proved the amount outstanding in rates and charges, and that the contract of sale has been entered into. It is not a defence to the claim that there is a caveat on the land. The caveat does not prevent the land being sold by contract, although obviously the caveat needs to be removed before completion can take place. The caveat does not prevent possession being ordered. It is also irrelevant that the purchaser has not made an application for possession. Indeed, it is doubtful that the purchaser would have any right to do so before completion of the contract.
The Council is entitled to possession of the land: Hardern Shire Council v Richardson [2012] NSWSC 622 at [182].
No reason has been advanced why a writ of execution should not issue and be executed immediately. Section 7A(3) of the Sheriff Act 2005 (NSW) requires a 30 day notice to be given to enforce a writ of execution. Accordingly, leave to issue a writ of execution immediately is likely, in a practical sense, to provide a minimum period of approximately six weeks from the entry of today's orders for the defendants to vacate. In circumstances where the Notice to Vacate was given on 12 November 2018, and where the defendants have not pleaded any defence to the claim since 6 September 2019, I consider that it is not reasonable to delay the execution of the writ. The defendants must be taken to have known since 6 September 2019 that they had no defence to the claim and they would be required to vacate.
I have mentioned that the Council seeks a further order that it be permitted to use moneys received from the sale in excess of the outstanding rates and charges to defray its costs of these proceedings. In that regard, ss 718 and 720 of the Local Government Act are relevant.
They provide:
718 Application of purchase money
The council must apply any purchase money received by it on the sale of land for unpaid rates and charges in or towards payment of the following purposes and in the following order -
(a) firstly, the expenses of the council incurred in connection with the sale,
(b) secondly, any rate or charge in respect of the land due to the council, or any other rating authority, and any debt in respect of the land (being a debt of which the council has notice) due to the Crown as a consequence of the sale on an equal footing.
…
720 What if the purchase money is more than the amounts owing?
(1) Any balance of the purchase money must be paid into the council's trust fund and held by the council in trust for the persons having estates or interests in the land immediately before the sale according to their respective estates and interests.
(2) The council may pay the balance of the purchase money or any part of the balance to or among the persons who are, in its opinion, clearly entitled to it, and the receipt of the person to whom any payment is so made is an effectual discharge to the council for it.
(3) (Repealed)
It is clear from s 718 that expenses incurred in connection with the sale may be retained by the council. Such expenses would include legal costs associated with that sale.
One of the conditions of the Contract of Sale is that vacant possession be given of the land. The defendants failed to vacate the land. The Council is unable to complete the sale of the land if the defendants remain in occupation of the land. The land needed to be sold with vacant possession for Council to be able to recover the best available price. That is chiefly for the benefit of the registered proprietor of the land. Giving vacant possession is an incident of the sale. Expenses of the Council in obtaining vacant possession, being the legal costs of proceedings to obtain possession, are expenses incurred in connection with the sale.
In that way, the balance of the purchase money referred to in s 720 is not ascertainable until the amount of the costs have been determined either by agreement, assessment or by a lump sum cost order. In any event, although the balance is required to be held in trust for those having an estate or interest in the land immediately before the sale under subs (1), Council is not required to pay such balance within any stipulated time, and may pay any part of it under subs (2).
Accordingly, I make the following declaration and orders:
1. Judgment for the plaintiff for possession of the land situated at 36 Uralla Road, Armidale, New South Wales being Lot 16 in DP 242531.
2. Leave to issue a writ of possession forthwith.
3. The defendants are to pay the plaintiff's costs of the proceedings.
4. I declare that the amount of the plaintiff's costs form part of the expenses of the plaintiff incurred in connection with the sale of the land.
5. The parties have liberty to apply on 2 days' notice.
[2]
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Decision last updated: 11 February 2020