Davidson v Suncorp-Metway Limited

Jurisdiction 9 I have described above one of the claims which gave rise to the preliminary discovery application, which involves potential breaches of s 18 of the Australian Consumer Law (ACL), concerning misleading or deceptive conduct, and one or more of s 20 and s 21, concerning unconscionable conduct (ACL Claims). This court has jurisdiction in relation to the ACL Claims by reason of s 39B(1A)(c) of the Judiciary Act 1903 (Cth): Hooper v Kirella Pty Ltd [1999] FCA 1584; (1999) 96 FCR 1 at [74]-[75]. That section provides (subject to an irrelevant exception) that the original jurisdiction of this court includes jurisdiction in any matter arising under any laws made by the Commonwealth Parliament. Pursuant to s 131(1) of the Competition and Consumer Act 2010 (Cth) (CCA), the ACL applies as a law of the Commonwealth to the conduct of corporations, such as the bank. So the ACL Claims involve a matter or matters arising under laws made by the Commonwealth Parliament. Jurisdiction to determine such claims is also conferred by s 138 of the CCA, but it is a requirement of that section that a civil proceeding has been instituted under Part XI of the CCA or the ACL. That has not occurred here, but as explained in Hooper (at [69]-[70], in relation to a predecessor of CCA s 138), s 39B of the Judiciary Act can also confer jurisdiction, including when a preliminary discovery application has been made. 10 The concept of a 'matter' is crucial to the jurisdiction conferred by s 39B(1A)(c): see Rana v Google Inc [2017] FCAFC 156; (2017) 254 FCR 1 at [16] (Allsop CJ, Besanko and White JJ). A 'matter' is a justiciable controversy, identifiable independently of the proceedings which are brought for its determination and encompassing all claims made within the scope of the controversy: Fencott v Muller (1983) 152 CLR 570 at 603. 'Matters' and 'proceedings' are not necessarily co-extensive and proceedings may involve more than one matter: Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 509 (Mason J). 11 In Hooper, the Full Court found that the justiciable controversy constituting a 'matter' in each of two preliminary discovery applications was the respondent's underlying claim to be entitled to relief provided by the Trade Practices Act 1974 (Cth), rather than the dispute about preliminary discovery: see Hooper at [57], [60]-[61]. Hooper has been regularly followed and applied in preliminary discovery applications in this court: see Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2010] FCA 367 at [49]. 12 Therefore the ACL Claims, raised in this proceeding in the context of preliminary discovery, comprise a 'matter' which attracts the jurisdiction of this court, or are part of such a matter. I will proceed on the basis that the Mortgage Claim, in contrast, would not attract the court's jurisdiction if it were to stand alone, as it would not be a federal claim. But where federal and non-federal claims comprise the same justiciable controversy, a court exercising federal jurisdiction will have jurisdiction to resolve the entire matter in the exercise of its federal jurisdiction: Rana at [17]. So the question becomes, is the Mortgage Claim part of the same matter as the ACL Claims? 13 Identification of the justiciable controversy between the parties is the central task in determining what falls within the scope of a matter: Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 198 CLR 511 at [139]-[140]. There is no specific test for identifying the justiciable controversy in a particular case. It is a question of substance and not of form and the facts alleged by either or any of the parties and their consequences will in the last resort be the determinant of what is relevantly the matter: Philip Morris Inc at 473-474 (Barwick CJ). In Fencott at 608, Mason, Murphy, Brennan and Deane JJ said: The scope of a controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter. 14 There are obvious connections between the Mortgage Claim and the multitude of other disputes with the bank which Mr Davidson wishes to agitate, including the ACL Claims. The parties to the disputes are the same and all the claims arise out of a common narrative involving the bank lending money on security and disputes arising out of that transaction and things said to have been done by officers of the bank afterwards. But I doubt that is sufficient to make the Mortgage Claim and the ACL Claims part of the same 'matter'. It is not enough that they can be encompassed in a single story involving the same antagonists. The claims must be part of the same controversy. At first blush, the Mortgage Claim arises out of the way in which the mortgage was granted. The ACL Claims arise out of allegedly fraudulent things that bank officers are said to have done after the refinancing in which the mortgage was granted. The fact that it is possible to describe a series of events that encompasses them both does not necessarily make them part of the same matter. 15 Nevertheless, as the bank has submitted, there is a more specific connection between the Mortgage Claim and the ACL Claims which becomes apparent when one considers the scope of the controversy as revealed in the preliminary discovery proceedings. The scope of the controversy may be illuminated by the conduct of the proceedings: Fencott at 608. Mr Davidson wishes to advance the ACL Claims. One of the key defences which the bank would raise to those claims is that they have been released by the Settlement Deed. One of Mr Davidson's replies to this is that the court should 'give no countenance' to the Settlement Deed, because 'it was improperly grounded in that it assumes Suncorp has legal and equitable title to the properties, based on registration of its mortgages'. Mr Davidson asserts that the bank has not described the liability secured by the mortgage or the land 'adequately or at all' and that it 'has though [sic] its own faulty drafting … removed its interests under the mortgage' so that 'Suncorp had nothing to promise in the Deed'. 16 As best one can tell, this seems to be advanced in support of an argument that the Settlement Deed has no effect because Mr Davidson received no valuable consideration in return for the releases he provided in the deed: see Davidson No 3 at [55]-[56]. In my view this means that the ACL Claims are within the scope of the same controversy and therefore part of the same matter. The controversy is whether the bank is liable to Mr Davidson for the alleged fraud of its officers. A determination that the Settlement Deed is of no effect, because it was founded on consideration that was illusory, because the consideration was based on a mortgage which was also of no effect, would make it necessary to determine the ACL Claims on their merits. 17 It is true that in Davidson No 3 I determined that, quite apart from the merits of the Mortgage Claim, Mr Davidson's attempt to overturn the Settlement Deed in this way had no reasonable prospect of success, not least because he had already unsuccessfully tried to overturn it on different grounds in the Supreme Court of Queensland. But the prospects of the non-federal claim are not relevant to the question of whether this court has jurisdiction to determine it. What matters is that the ACL Claim and the Mortgage Claim are so closely connected as to be part of the same controversy and therefore aspects of the same matter. In my view this court has jurisdiction to determine the Mortgage Claims.

Determination of the Mortgage Claim 18 As I have said, Mr Davidson relies on s 73(1)(c) of the Land Title Act. In so far as they are relevant, s 72, s 73 and s 74 are as follows: 72 Mortgaging lot etc. by registration (1) A lot or an interest in a lot may be mortgaged by registering an instrument of mortgage for the lot or interest. … 73 Requirements of instrument of mortgage (1) An instrument of mortgage must - (a) be validly executed; and (b) include a description sufficient to identify the lot to be mortgaged; and (c) include a description of the debt or liability secured by the mortgage; and (d) include a description sufficient to identify the interest to be mortgaged. … 74 Effect of registration of a mortgage A registered mortgage of a lot or an interest in a lot operates only as a charge on the lot or interest for the debt or liability secured by the mortgage. 19 I have set out the description of the secured liability given in the Mortgage. Mr Davidson made the following arguments about it: because of the generalised description of the debt or liability secured, and the absence of any specification of the amount owing, the Mortgage instrument is void for uncertainty, meaning there was no agreement when he signed it; this also means that the Mortgage did not comply with s 73(1)(c); as a result, s 74 does not operate in respect of the liabilities of Mr Davidson to the bank because there is no 'debt or liability secured by the mortgage'; the appearance of the words 'not applicable' in the General Request form that was used to lodge the bank's common mortgage provisions also makes the Mortgage void for uncertainty. 20 There are four reasons why these arguments cannot succeed. 21 The first reason is that issue estoppel prevents Mr Davidson from relying on them. I laid out the principles and how they applied in this case in Davidson No 3 at [62]-[67]. For reasons I gave there, I held that the judgment of Ryan J in Suncorp-Metway Ltd v Nagatsuma [2019] QSC 16 necessarily entails the conclusion that the Mortgage is enforceable, so that Mr Davidson is estopped from contending otherwise. 22 The second reason Mr Davidson's arguments fail is that the Mortgage is not void for uncertainty. It incorporates, by reference, standard terms which, as I have said, provide for it to be an 'all moneys' mortgage. So it is clear that any liability of Mr Davidson to the bank is secured by the mortgage. That liability arose under a guarantee of the liabilities of FNQ, which Mr Davidson signed. FNQ's liabilities are ascertainable by reference to a facility agreement, which makes provision for the advance of principal amounts and how interest is to be calculated. There is no uncertainty about what the parties have agreed by executing the Mortgage. 23 The third reason Mr Davidson's arguments fail is that the Mortgage did comply with s 73(1)(c). That is a question of the proper construction of the provision and its application to the instrument lodged. Section 73(1)(c) seems to be unique to Queensland. It appears that the only decided case on it is a recent decision of Bowskill J in the Supreme Court of Queensland dismissing an application by Mr Davidson for a stay of execution of a warrant for possession of a property he occupied. I will return to that decision below, but I consider it appropriate first to address the issue on the basis of principle. 24 The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute as a whole. The process must always begin by examining the context of the provision that is being construed: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense: SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 at [14]. 25 The context of s 73 is that it is part of Torrens system legislation which has the aim of promoting consistency and certainty in the creation and ascertainment of interests in land: see generally Deguisa v Lynn [2020] HCA 39; (2020) 384 ALR 209 at [2]-[4]. It is a system of title by registration, not a system of registration of title: see Breskvar v Wall (1971) 126 CLR 376 at 384, 399-400. The particular objects of the Land Title Act include to define the rights of persons with an interest in registered freehold land: s 3(a). 26 Section 73 appears in Part 6, which concerns dealings directly affecting lots. That Part contains separate Divisions about different kinds of dealings, including transfers, leases and mortgages. Division 3, concerning mortgages, provides that the mortgage interest may be created by lodging a relevant instrument: s 72. It makes provision for what the instrument must contain: see e.g. s 73. It makes provision for the effect of the registration of the mortgage: s 74. 27 The object of these provisions, considered in the context of the statute and its purpose as a whole, is clear enough. They are intended to make provision for the creation of mortgage interests in land, the nature and scope of which can be ascertained with certainty by the parties and anyone searching the register. 28 Considered in that light, differences in wording between each of s 73(1)(b) to s 73(1)(d) are significant. Section 73(1)(b) and S 73(1)(d) require an instrument of mortgage to include a description sufficient to identify, respectively, the lot to be mortgaged and the interest to be mortgaged. Section 73(1)(c), in contrast, requires only a description of the debt or liability secured by the mortgage. The breadth of the word 'description' is not modified by any requirement of sufficiency for any particular purpose, or by anything at all. The reason for the difference is obvious. If an interest in land is to be created by the registration, it is imperative that the instrument registered permits identification of the land in question and of the interest. That is essential for the basic function of the registration as the creation of an identifiable and certain interest in land. The requirement that the debt or liability be described in the instrument is not necessary for that function. The debt or liability do not create or affect any interest in the land. Nor will the notation of the debt or liability on the titles register affect in any way the existence or nature of that debt or liability, as a personal chose in action. 29 It follows that there is no call to read s 73(1)(c) to require that the debt or liability be described with particularity, such as setting out the particular guarantees or loan agreements to which the mortgage relates. Nor is there any need to go further than that so as to specify the amount of the debts or liabilities. Those things will often change over time; in the case of the amount of the debts, it is likely to change very frequently. To require them to be specified would be cumbersome and impracticable and would serve no apparent purpose as the information would be out of date soon after it was entered on the register. 30 That being so, in construing s 73(1)(c), there is no need to depart from the breadth of 'description' in its ordinary and natural meaning. To say, as the Mortgage here does in effect, that the liabilities secured are all liabilities of the mortgagor, howsoever arising, is to describe the liabilities. No more specific description is necessary. 31 That is confirmed by the Explanatory Notes to the Land Title Amendment Bill 1994 (Qld). When the Land Title Act was introduced, s 73(1)(c) required an 'acknowledgment of the debt or liability secured by the mortgage', not a description. The Explanatory Notes explained that by inserting the word 'description' in place of the word 'acknowledgment', the amending bill 'more accurately reflects the true position of the mortgage debt or liability, eg. the mortgage may be given to secure unspecified future debts or contingent liabilities.' It is permissible to have regard to extrinsic materials such as the Explanatory Note to confirm the interpretation conveyed by the ordinary meaning of the provision in question: Acts Interpretation Act 1954 (Qld) s 14B(1)(c) and s 14B(3)(e). 32 I therefore agree with Bowskill J in Davidson v Suncorp-Metway Ltd [2020] QSC 315 at [26] that there was no need to give a dollar figure for the liability in the box provided for 'Description of debt or liability secured' in the Mortgage. Insofar as Mr Davidson relies on the inclusion of the words 'not applicable' in the General Request form used to lodge the standard mortgage terms with the Queensland Land Registry, it only necessary to say that this argument is misconceived for the reasons Bowskill J gave at [27]. 33 The fourth reason why Mr Davidson's arguments must fail is that, even if the Mortgage had not complied with s 73(1)(c), that would not have the consequence that the Mortgage is invalid and unenforceable. Under Torrens system legislation it is clearly established that, personal equities aside, registration of a mortgage gives to the mortgagee an indefeasible title: Small v Tomassetti [2001] NSWSC 1112; (2001) 12 BPR 22,253 at [8] (Campbell J, as he then was) and the authorities referred to there. That is a reflection of the principle of indefeasibility confirmed by the High Court in Breskvar v Wall, that a registration which results from a void instrument is effective according to the terms of the registration, regardless of the reason why the instrument is void: Breskvar v Wall at 386 (Barwick CJ, other members of the court agreeing). That principle continues to apply under the Land Title Act in Queensland: Elroa Nominees Pty Ltd v Registrar of Titles [2003] QCA 165 at [40]-[41]. 34 Mr Davidson, who was unrepresented at the hearing of this application, urges the court to accept that in s 73 '"must" means "must"', so that the requirement is obligatory. The court accepts that, but what the argument fails to acknowledge is that there is a further issue: what is the consequence if the obligation is breached? For the reasons I have given, the consequence is not that the Mortgage is unenforceable. 35 In Small at [9] Campbell J went on to say, 'Notwithstanding that registration confers indefeasibility on a mortgagee, there is still a question "indefeasibility for what?"'. Mr Davidson relies on this and on three cases to submit that the uncertainty as to what liabilities are secured by the Mortgage means that it is not indefeasible and therefore not enforceable in relation to his liabilities to the bank. The three cases are: Perpetual Trustees Victoria Ltd v Tsai [2004] NSWSC 745; (2004) 12 BPR 22,281 at [13], [21]; Yazgi v Permanent Custodians Ltd [2007] NSWCA 240; (2007) 13 BPR 24,567 at [33]; and Printy v Provident Capital Ltd [2007] NSWSC 287; (2007) 13 BPR 24,603 at [40]. But these are all cases where there were no effective liabilities secured by the registered mortgages, so the indefeasibility of the mortgage as an interest in land did not permit it to be enforced in respect of any extant liability. As I have explained above in connection with the second reason why Mr Davidson's arguments fail, that is not the situation here. Mr Davidson does have a liability to the bank and the Mortgage is enforceable as security for that liability.

Conclusion 36 Paragraph 4 of the interlocutory application of 11 June 2020 must be dismissed and Mr Davidson must pay the bank's costs. There is an outstanding issue in the proceeding as a whole as to whether the costs should be awarded on an indemnity basis, so the appropriate order at this point is costs reserved. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackson.