GE Mortgage Solutions Ltd v Whild

2 The defendant seeks the production of documents evidencing the authority of Pepper Australia Pty Ltd ('Pepper Australia') to act on behalf of GEMSL and PCL.

3 For the reasons which follow the plaintiff is entitled to the relief it seeks and orders will be made substituting PCL for GEMSL and entering judgment for possession of the Spotswood Property.

4 The background facts relating to the proceeding are set out in my earlier decision in GE Mortgage Solutions Ltd v Whild [2013] VSC 503. Although it is unnecessary to repeat that background, there are some matters that are important to an understanding of the present application which bear repetition, as follows.

5 The proceeding commenced in 2004, and relates to loans made by GEMSL to Ms Whild secured by properties owned by her. Ms Whild and GEMSL entered into two Loan Agreements in January 2004 ('Loan Agreements'), the terms of which were set out in what is called the Home Loan Contract Terms and Conditions ('Loan Terms').[1]

6 The first of these loans, called 'Loan A', was for the sum of $304,000 and the second loan, called 'Loan B' was for the sum of $204,000. Both Loan A and Loan B were secured by a registered mortgage over two freehold properties, being the Spotswood Property and 71 Huntingfield Drive, Hoppers Crossing ('Hoppers Crossing Property'). The mortgage was registered by the Land Titles Office in dealing number AC651596Q and incorporated Memorandum of Common Provisions No. AA706 ('Mortgage').

7 As a result of various events, both Loan A and Loan B were in arrears and, on this basis, GEMSL sent default notices ('default notices'), for both Loans A and B separately, dated 1 April 2004, to Ms Whild. Ms Whild did not pay the amounts required by the default notices and, as a consequence, GEMSL took possession of the Hoppers Crossing Property on 4 May 2005 and sold it to a third party on 29 September 2005.

8 The proceeding was stayed for a considerable period whilst proceedings in the Victorian Civil and Administrative Tribunal ('VCAT'), and on appeal, were dealt with.[2] The VCAT proceedings were commenced on 23 May 2008,[3] heard before Senior Member C McKenzie between March and September 2010 and resulted in orders made on 31 March 2011. Ms Whild's application in VCAT was dismissed.

9 Ms Whild sought, and was granted, leave to appeal the VCAT orders to this Court. The appeal was heard by Croft J and his judgment was given on 18 May 2012. Orders were subsequently made affirming the order of VCAT and dismissing Ms Whild's appeal.

10 GEMSL then applied by summons filed 18 February 2013 ('First Summons') for summary judgment for possession of the Spotswood Property pursuant to ss 61 and 63 of the Civil Procedure Act 2010 (Vic) ('CPA') and/or pursuant to r 22.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) ('Rules'). The application for summary judgment was supported primarily by the affidavit of Andrew Paterson sworn 15 February 2013.

11 The application came on for hearing on 3 April 2013 in the Associate Judges Practice Court. The plaintiff was represented by Mr SD Hay of Counsel. The defendant was represented by Mr D Turner of Counsel. After argument I reserved judgment.

12 On 18 September 2013 I delivered reasons for concluding that GEMSL had established its entitlement to possession of the Spotswood property. One of the arguments presented for Ms Whild that I rejected was that the authority of Mr Paterson to act for GEMSL, and to swear, as he did, to the matters relevant to establishing GEMSL' S entitlement to possession.

13 Mr Paterson had sworn that he was the Manager, Legal, in the permanent employment of Pepper Homeloans Pty Ltd ('Pepper Homeloans') which had been appointed as servicer of various loans for GEMSL, including the loans the subject of this proceeding. He had said the obligations of Pepper Homeloans as servicer included the collection of outstanding loans and enforcement of mortgages. He said he was authorised to make the affidavit on behalf of GEMSL.

14 At the time I handed down my reasons, Mr Hay of Counsel for GEMSL, informed me that a mistake had been detected and that a corrective affidavit would need to be filed. It had been discovered that Pepper Australia Pty Ltd ('Pepper Australia') and not Pepper Homeloans was Mr Paterson's employer and manager of the loans the subject of the proceeding.[4] In those circumstances, I made directions for the filing and service of any further affidavits on behalf of the plaintiff and adjourned the application to 7 October 2013.

15 By affidavit sworn on 24 September 2013, Mr Paterson deposed that:

(a) he is the Head of Commercial and Legal in the permanent employ of Pepper Australia;

(b) when he swore his earlier affidavit he thought he was employed by Pepper Homeloans. However he now knows that to be incorrect, having been so informed by the Pepper Australia's General Counsel, Mr John Williams. The entity that employs him is Pepper Australia which is related to Pepper Homeloans;

(c) he had checked the books and records of Pepper Australia and confirmed that Pepper Australia was appointed by the plaintiff as manager/servicer of the loans the subject of this proceeding in about October 2011;

(d) wherever he said in his earlier affidavit that an exhibit is one of the business records or a computer statement of Pepper Homeloans it should in fact say it is business records or a computer statement of Pepper Australia.

16 On the adjourned date the solicitor for Ms Whild, Mr Liberogiannis, informed the Court of material that suggested GEMSL had sold the loans the subject of the proceeding, along with the whole of its loan book, and that the evidence given by Mr Paterson in his affidavit of 24 September 2013 demonstrated the desirability of requiring that he produce the documents that were the basis of the authority of Pepper Australia to act for the plaintiff. In consequence of the matters raised by him, and at his request, I made orders allowing the defendant to file and serve an affidavit restricted to material relating to the authority of Mr Andrew Paterson and Pepper Australia Pty Ltd to act on behalf of the plaintiff by 11 October 2013, and that the plaintiff file and serve any affidavit in response by 18 October 2013. The objective was to bring the matter back on 25 October 2013.

17 By affidavit sworn on 11 October, Ms Whild produced:

(a) articles that appeared in the Herald Sun and Australian Newspapers on 26 and 25 May 2011, respectively, which purport to report that GE had sold its home loan business to Pepper Homeloans;

(b) a letter dated 8 September 2011 from Pepper Australia advising that Pepper Australia had entered into 'arrangements' with GE Capital Australia and New Zealand and as a result 'your home loan' is now being managed by Pepper Australia;

(c) a letter from the Credit Ombudsman's Service Ltd dated 7 January 2013 which, amongst other things, asserted that on 1 October 2011 'your loans were acquired by "Pepper"';

(d) a copy email from Renee Rojas, a Customer Resolutions Officer of 'Pepper' referring to the loan being managed by 'Pepper' for the Adelaide Bank;

(e) copies of home loan statements in the name of Pepper Australia sent to her after she complained that she had not received any such statements for some time.

18 In that affidavit Ms Whild complains that because the correspondence to which she refers contains different names and entities, it is confusing, as is the fact that she was never informed of the true arrangements. She also questions the right of the plaintiff to possession having regard to the evidence as to the sale of the home loans business of GE Capital, and seeks an accounting of the sums due by her under the Loan Agreements.

19 Ms Whild swore a further affidavit on 16 October 2013 in which she deposed that the letter of 8 September 2011 (referred to above at paragraph 17(b)) and the loan statements were not received by her until November 2012 because they had been directed to GE Money.

20 The matter came back before the Court on 25 October 2013. At that time the plaintiff, by its solicitor, sought further time to file and serve an affidavit in response to the affidavits of Ms Whild. In support, the plaintiff filed an affidavit of Annette Leigh Gaber sworn 25 October 2013. Essentially, apart from an explanation of communications between the parties regarding the need for further time to file an affidavit in response, the reason for the requested adjournment was that although the solicitor had received both a sale agreement and a service agreement, they referred to other contracts that needed to be examined, which had been requested but were not readily available. In the result the hearing was adjourned to 2 December 2013 with directions for the filing of further affidavits.

21 On that adjourned date, the parties consented to a further extension of time for the plaintiff to file its affidavits and adjourned the hearing to 13 March 2014.

22 Shortly before the further adjourned hearing date, the plaintiff informed the Court, and the solicitor on the record for Ms Whild, that the plaintiff was in the process of effecting a legal assignment of the mortgage to PCL, and proposed to make application to substitute PCL as plaintiff when that process was complete. On 13 March 2014 the earlier directions for the filing of affidavits were vacated and directions for the filing and service of such an application and supporting affidavits and submissions were made, with liberty to Ms Whild to file affidavits in response. The matter was then adjourned to 28 April 2014.

23 On 10 April 2014 GEMSL filed and served a summons ('Second Summons') seeking to substitute PCL as plaintiff, together with ancillary relief, and an order for possession of the Spotswood property.

24 The Second Summons was supported by the following affidavits:

(a) Matthew David Johnson sworn 4 April 2014. He produced a notice of assignment served by the plaintiff's solicitors on Ms Whild dated 5 March 2014. Notably the notice of assignment includes the following statement:

By this notice, we absolutely assign all of our rights, title and interest and our entitlements to legal and other remedies in:

• Your loans and mortgage referred to above;
• The judgments, orders and proceedings referred to below;

To Permanent Custodians Limited ABN 55001426384 (in its capacity as Trustee of the Pepper NC Mortgage Warehouse Trust 2011-1).

Whilst legal ownership of your loans and mortgage has changed, Pepper Australia Pty Ltd ACN 094 317 665 (Pepper), who has been managing your loans since about October 2011, will continue to manage your loans on behalf of PCL. As you already know, your loan account numbered 37143518MG01 was previously renumbered by Pepper to 28865 and loan account numbered 37143518MG02 was changed by Pepper to 28866.

We confirm that the absolute assignment to PCL of our rights, title and interest in your loans and mortgage and the judgments and tribunal and court proceedings referred to below includes (without any limitation) all of our rights, title and interest and our entitlements to legal and other remedies in the following: ...

There are then set out details of the Loan Agreements, mortgage default notices, Supreme Court proceedings and VCAT proceedings and all rights or remedies to obtain possession of the security properties;

(b) Andrew Paterson sworn 8 April 2014. In this affidavit Mr Paterson deposes:

(i) that he is the head of Credit Control and Commercial of Peppers Australia;

(ii) that he sent the Notice of Assignment dated 5 March 2014 to the plaintiff's solicitors to be sent to Ms Whild;

(iii) that Peppers Australia has the management rights including the power to collect Loans A and B on behalf of GESML from October 2011 and PCL after the assignment;

(iv) as to the transfer of the mortgage from GEMSL to PCL and registration of that transfer on 26 March 2014;

(v) by reference to his affidavit of 15 February 2013, and exhibits AP-7 to AP-10, the default by Ms Whild under the Loan Agreements, the failure to remedy the defaults, the large sums outstanding and the fact that no payment had been by Ms Whild in reduction of either Loans was established;

(c) John Christian Meyer sworn 10 April 2014. In this affidavit Mr Meyer deposes:

(ii) he confirms that Pepper Australia has full authority to take enforcement action in respect of the Loan Agreements and mortgage the subject of the proceeding in the name of PCL and that authority includes the authority to seek an order substituting PCL as plaintiff, entering judgment against Ms Whild, instructing the plaintiff's solicitors to pursue the summary judgment application and to swear all necessary affidavits to achieve the above;

(iii) that PCL's right to authorise Pepper Australia to exercise its rights and remedies under the Loan Agreements arises out of clause 13.10 of the Home Loan Contract Terms and Conditions and clause 8.16 of the Memorandum of Common Provisions incorporated in the mortgage;

(iv) that in seeking the entering of judgment in its favour, PCL relies upon all the material that has been filed and served in connection with the proceeding and the previous related court and tribunal decisions;

(v) that PCL has not received any payment from the defendant since it perfected its title;

(vi) before the legal assignment, from October 2011, PCL had equitable rights in the Loan Agreements and the mortgage which had not been legally perfected and during that period Pepper Australia was authorised to act on PCL's behalf in connection with the enforcement of the Loan Agreements and mortgage. The steps that PCL and GEMSL have taken to perfect legal title in favour of PCL have been completed because of the long history of the dispute with Ms Whild and so as to make clear to her that PCL now owns all of the rights under the Loan Agreements and mortgage.

(d) Annette Leigh Gaber sworn 11 April 2014. Ms Gaber produces a true copy of a transfer of mortgage granted by Ms Whild to GEMSL from that company to PCL dated 26 March 2014 and the consequential certificate of title recording the mortgage over the Spotswood Property in favour of PCL. She also gives the following evidence:

(i) She gives an account of the events that occurred on the handing down of my reasons in GE Mortgage Solutions Ltd v Whild [2013] VSC 503 delivered on 18 September 2013 and the subsequent events that I have summarised above;

(ii) That she was instructed by Pepper Australia to seek no order as to costs in respect to the Plaintiff's first Summons for reasons which she sets out in paragraph 18 of her affidavit; and

(iii) She produces a copy of an order made by another Associate Judge in Permanent Custodians Ltd v John Perdikis (S CI 2012 05474) (formerly known as GE Mortgage Solutions Ltd v John Perdikis.

(e) Jared Pereira sworn 15 April 2014. Mr Pereira is the senior corporate counsel employed by GE Capital Finance Australasia Pty Ltd, the parent company of GEMSL. He confirms that evidence given by Mr Paterson in his affidavits sworn on 15 February 2013 and 24 September 2013. He also confirms the matters sworn to by Mr Paterson in his affidavit of 8 April 2014 insofar as it relates to GEMSL's position. He also deposes that:

(i) From October 2011 to 5 March 2014 Pepper Australia had GEMSL's full authority to take enforcement action in respect of the Loan Agreements and mortgage in the name of GEMSL against Ms Whild. That authority included authority to seek the entry of judgment in this proceeding, instruct Gadens Lawyers to bring the summary judgment application in GEMSL's name and to swear all necessary affidavits to obtain that judgment;

(ii) He confirms the assignment by GEMSL to PCL effective on 5 March 2014 and gives GEMSL's consent to PCL being substituted as plaintiff and authorises Pepper Australia to take all necessary steps to effect that substitution;

(iii) He deposes that prior to the legal assignment, PCL had equitable rights under the Loan Agreements and the mortgage which had not been legally perfected but the steps Pepper Australia took up to 5 March 2014 in the name of GEMSL were correctly taken and have been fully authorised.

(f) Annette Leigh Gaber sworn 14 May 2014. Ms Gaber deposes as to enquiries made by Ms Whild's solicitor regarding updated loan statements:

(i) She explains the role that Perpetual Trustees had in storing security packets for Ms Whild's loans;

(ii) She refers to Ms Whild's summons seeking an accounting and she sets out the calculations to demonstrate the minimum amount which Ms Whild owes under the mortgage. She puts forward the figures merely to show the minimum sum which is unarguably due and payable by Ms Whild under her mortgage. That sum is $280,960.49 as at 28 October 2005;

(iii) She produces material to show that the last repayment made by Ms Whild was on 28 October 2005 and even that money was not from Ms Whild's own pocket. It was paid from a third loan Ms Whild obtained from GEMSL. There was a lump sum reduction from the proceeds of the sale of the Hoppers Crossing Property;

(iv) She identifies that the interest rate in force as at 28 October 2005 was 9.30% per annum and that rate was the lowest rate applicable to the accounts. She calculates the amounts due under the Loan Agreements, without including interest accrued before 28 October 2005 and arrives at a figure of $617,491.23. This comprises approximately 8.5 years of compounding interest;

(v) She refers to the costs billed by Gadens in the various proceedings against Ms Whild in VCAT and this Court which amount to approximately $695,000 (excluding unbilled work in progress and disbursements).

25 On 8 May 2014 Ms Whild's solicitors filed and served a notice to produce the following documents:

(a) Any documents evidencing the management and/or service and/or agency agreement between Pepper Homeloans and GEMSL;

(b) Any documents evidencing the management and/or service and/or agency agreement between Pepper Australia and GEMSL;

(c) Any documents evidencing the management and/or service and/or agency agreement between PCL and GEMSL;

(d) Any documents evidencing the sale by GEMSL to PCL of the defendants Loan Agreements;

(e) Any documents evidencing the Loan Originating and Management Agreement and/or agency agreement between Pepper Homeloans and GEMSL;

(f) Any documents evidencing the Loan Originating and Management Agreement and/or agency agreement between Pepper Australia and GEMSL;

(g) Any documents evidencing the Loan Originating and Management Agreement and/or agency agreement between PCL and GEMSL;

(h) Any documents evidencing the Loan Originating and Management Agreement and/or agency agreement between the Bank of New York Mellon Corporation and GEMSL;

(i) Any documents evidencing the Loan Originating and Management Agreement and/or agency agreement between BNY Mellon Australia Pty Ltd and GEMSL;

(j) Any documents evidencing the Loan Originating and Management Agreement and/or agency agreement between Adelaide Bank Limited and GEMSL;

(k) Any documents evidencing the Loan Originating and Management Agreement and/or agency agreement between Adelaide Bank and Pepper Homeloans and/or Pepper Australia and GEMSL;

(l) Any document evidencing the authority of Andrew Paterson to swear an affidavit for PCL;

(m) The Trust Deed of the Pepper MC Mortgage Warehouse Trust 2001-1.

26 Ms Whild filed and served a summons on 12 May 2014 seeking orders that pursuant to r 50.01(a) of the Rules, and/or the inherent jurisdiction of the Court, the plaintiff provide an accounting in respect of loans secured by Mortgage AC651596Q and Loan A and Loan B, and the proceeding be stayed until that accounting has been made. (Although this application was not specifically addressed by Counsel appearing for Ms Whild, I infer that the reference to Rule 50.01 (a) is a mistaken reference to rule 52.01 (1)(a)).

27 In support of her summons and perhaps her the notice to produce, Ms Whild swore an affidavit on 12 May 2014. In that affidavit:

(a) She refers back to her earlier affidavits, in particular where she produces press reports of the sale of GEMSL's loan portfolio to Pepper Homeloans and refers to additional press reports and produces copies of them;

(b) She refers to a conversation she had with a staff member of 'Pepper' called 'Lou' on 1 May 2014 in the course of which Lou confirmed her loan number to be 28866 and that they were not just servicing the loan and that her loans were definitely purchased from GEMSL in 2011;

(c) That on 7 May 2014 she received an email from Yance Sanchez at Perpetual informing her that their system indicated that Pepper Homeloans purchased the GE portfolio. The email also advised her that the Bank of New York is now the Trustee. She produced a copy of that email;

(d) She asserts that the notice of assignment of 5 March 2014 clearly states that PCL has had power of attorney since 2007 (I note there is no reference to a power of attorney in the notice of assignment);

(e) She submits that it is crucial that GEMSL or Pepper produce the management or agency agreement they allege remains in place and that there be an accounting of her two loans particularly having regard to the determination that I made that clause 10.6 of the Loan Terms gives rise to a penalty.

28 On 12 May 2014 the plaintiff filed and served a summons returnable on 14 May (the adjourned date) seeking to set aside the notice to produce.

29 The notice of assignment dated 5 March 2014 contains an assignment by GEMSL of its right, title, and interest in the Mortgage, and all of its legal and other remedies in, amongst other things, the Loan Agreements, to PCL.

30 It is clear in my view that GEMSL was entitled to assign the Loan Agreements under a power included in the Loan Terms (clause 13.1), to assign the Mortgage under a power in the Mortgage (clause 4.1 of the MoCP), and pursuant to the statutory rights provided by ss 45 and 46 of the Transfer of Land Act 1958 (Vic) ('TLA') and s 134 of the Property Law Act 1958 (Vic) ('PLA'). These terms and provisions gave GEMSL an unfettered and unconditional power to assign its contractual and mortgage based rights to PCL at any time.

31 Putting to one side the contractual powers, s 45(1) of the TLA provides that 'a registered proprietor may transfer his estate or interest in land by an instrument in an appropriate approved form'. Further, s 45(2) provides that:[5]

Upon the registration of the transfer the estate or interest of the proprietor as set out in such instrument or which he is entitled or able to transfer or dispose of under any power, with all rights powers and privileges thereto belonging or appertaining, shall pass to the transferee; and such transferee shall thereupon become the registered proprietor thereof. [Emphasis added]

32 Section 46(1) of the TLA provides that:

By virtue of every such transfer the right to sue upon any instrument and to recover any debt sum of money annuity or damages thereunder (notwithstanding that it constitutes a chose in action) and all interest in any such debt sum annuity or damages shall be transferred so as to vest at law as well as in equity in the transferee thereof; but nothing herein shall prevent a court from giving effect to any trusts affecting such debt sum annuity or damages if the transferee as between himself and any other person holds as trustee. [Emphasis added]

33 By the combined operation of ss 45 and 46 of the TLA, GEMSL was entitled, as has occurred,[6] to transfer its mortgage to PCL together with all of the 'rights, powers and privileges' appertaining thereto. Such rights included the rights GEMSL enjoyed under the Loan Agreements, and the right to possession of the security property pursuant to s 78(1)(b) of the TLA.[7]

34 It was also submitted that GEMSL has a power to assign its property pursuant to s 134 of the PLA, which provides in part:

Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, shall be and shall be deemed to have been effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice -

(a) the legal right to such debt or thing in action;

(b) all legal and other remedies for the same; and

... [Emphasis added].

35 This section is not generally applicable to land registered under the TLA, as the Spotswood Property is.[8] But it does apply to an assignment of a chose in action such as the chose in action comprised in each of the Loan Agreements, and it enables the assignee to sue without joining the assignor and to give a good release upon payment. In the context of this case, however, it seems to me to add little to the operations of ss 45 and 46 of the TLA, as the effect of s 46 is to bring with it the rights to sue upon the Loan Agreements as well as the mortgage.

36 Therefore, as Mr Hay submitted, in addition to the TLA provisions, GEMSL was entitled to assign its rights to PCL without the defendant's consent pursuant to its contractual and statutory rights, and PCL now stands in the shoes of GEMSL for the purposes of obtaining judgment for possession of the Spotswood Property. By force of the statutory provisions set out above, GEMSL's assignment to PCL was effective at law and in equity upon:

(a) Written notice of the assignment being given to Ms Whild;[9] and/or

(b) Registration of PCL as the registered proprietor of the Mortgage previously owned by GEMSL.[10]

37 Because PCL is now the owner of GEMSL's rights under the Loan Agreements and Mortgage, it is the proper plaintiff to take recovery action and ought to be substituted as plaintiff.

38 In considering the question of what were the relevant rights being transferred from GEMSL to PCL, Mr Hay referred to the fact that none of GEMSL's rights under the Loan Agreements and Mortgage have merged into a judgment as yet. Thus, what has been assigned to PCL, Mr Hay argued, is the right to seek relief in this proceeding in reliance upon being the assignee of the Loan Agreements and the Mortgage, as well as rights under s 78(1)(b) of the TLA, which spring from those instruments.

39 Once express notice in writing of assignment of a debt is given to the debtor then, but only then, the assignee obtains the legal right and the legal remedy to the debt: McIntosh v Shashoua.[11] Thus the assignee (PCL) obtains the 'legal right and the legal remedy' to the debt. Moreover, as the Court of Appeal of Western Australia observed in APT Finance Pty Ltd v Bajada,[12] once there has been a perfected legal assignment any action must be in the name of the assignee and not in the name of the assignor, as the assignor no longer has any right to sue for the debt. That is this case.

40 Rule 9.09(2) of the Rules take into account a party's capacity to assign rights the subject of a proceeding:

Where at any stage of a proceeding the interest or liability of any party is assigned or transmitted to or devolves upon some other person, the Court may order that the other person be added as a party to the proceeding or made a party in substitution for the original party and that the proceeding be carried on as so constituted. [Emphasis added.]

41 The commentary to Williams' Civil Procedure Victoria is instructive of the operation of r 9.09:

If the plaintiff assigns the cause of action after the date of the writ, the proceeding does not abate, and the court may order that the assignee be added or substituted as plaintiff to carry on the proceeding. See Campbell v Holyland (1877) 7 Ch D 166; Seear v Lawson (1880) 15 Ch D 426; Guy v Churchill (1888) 40 Ch D 481; Robinson v Unicos Property Corp Ltd [1962] 2 All ER 24.

42 Finally, in relation to the claim for possession pursuant to s 78(1)(b) of the TLA, it is important to note the terms of the provision as qualified by s 4(2) of that Act. Section 78(1) provides:

The mortgagee or annuitant upon default in payment of the principal sum or interest or annuity or any part thereof respectively at the due time -

(a) may enter into possession of the mortgaged or charged land by receiving the rents and profits thereof; or

(b) may bring an action of ejectment to recover the land, either before or after entering into the receipt of the rents and profits and either before or after any sale of the land as aforesaid.

In and for the purposes of this Act unless inconsistent with the context or subject-matter any description of or reference to any person as proprietor transferor transferee mortgagor mortgagee annuitant grantor caveator lessor or lessee or as seised of or having or taking any estate or interest in land shall extend to his executors administrators successors transferees and assigns to the intent that every right power authority liability or obligation vested in or imposed on any such person by or under this Act shall devolve upon any such executor administrator successor transferee or assign. [Emphasis added.]

44 Given that PCL is now the registered proprietor of the Mortgage, by reason of the provisions of the TLA set out above, it enjoys all of the rights GEMSL had prior to the assignment. Accordingly, there must be an order substituting PCL for GEMSL.

45 Insofar as concerns the validity of proceedings brought by GEMSL before the assignment of the legal interest as mortgagee, GEMSL as assignor in equity (as appears to be the case because of the equitable interest of PCL prior to the legal assignment) was a necessary party to any enforcement of the interest assigned and entitled to sue, although in equity it must have accounted to the beneficial owner of the mortgage (PCL as trustee).[13]

46 As mentioned above, the only matter that prevented making final orders after the reason were delivered on 18 September 2013 in GE Mortgage Solutions Ltd v Whild [2013] VSC 503 was the question of Pepper Australia's authority to act on GEMSL's behalf. Mr Hay's first submission was to reiterate what was said at paragraph 77 of my reasons, namely, that there was 'no reason the court should not accept the oath of Mr Paterson as prima facie sufficient to establish his authority'.[14]

47 Since that time however further evidence has been filed that confirms that all that has been done to date has been authorised by all interested parties. The first of these is the further affidavit of Andrew Paterson sworn on 8 April 2014, which exhibits the notice of assignment dated 5 March 2014 notifying the defendant of the assignment of the Loans and Mortgage from GEMSL to PCL.[15]

48 The second piece of evidence is the affidavit of John Christian Meyer, a Vice President of PCL, sworn on 10 April 2014. Mr Meyer deposed to Pepper Australia's authority to act on PCL's behalf prior to the legal assignment on 5 March 2014. During the period of October 2011 to 5 March 2014, Pepper Australia was authorised to take enforcement action in respect of the Loan Agreements and the Mortgage, and to seek an order substituting PCL as the plaintiff in this proceeding.

49 The third piece of evidence filed since delivering reasons was the affidavit of Jared Pereira, senior corporate counsel of GE Capital Finance Australasia (the parent company of GEMSL), sworn on 15 April 2014. Mr Pereira deposed to Pepper Australia's authority to act on GEMSL's behalf prior to the legal assignment on 5 March 2014.

50 It is well known that the securitisation of mortgages involves assignments, sometimes at law but often in equity, of the mortgages and the underlying loan transaction or transactions. The evidence in this case points clearly to Pepper Australia having all the authority to act on behalf of whichever company had the legal and equitable rights in respect of the Loan Agreements and the mortgage.

51 The reports in the press of the assignment of the GE loan book are a colloquial report that cannot be relied upon for the purposes of establishing the legal entitlement to the particular Loan Agreements and mortgage. The fact that the notice of assignment purports itself to be an absolute assignment of the rights of GEMSL to PCL itself reveals the likely equitable interest of a Pepper entity. That is because the assignment to PCL is as trustee of the 'Pepper NC Mortgage Warehouse Trust 2011-1'. The evidence establishes that throughout the period since October 2011, PCL as trustee of that trust has held the beneficial interest in the mortgage and the Loan Agreements.

52 The evidence that has now been given of the authority of Mr Paterson comes from all directions. That is, from GEMSL via its holding company and from PCL. The absence of any written service or management agreement seems to me to be beside the point. Having regard to the fact that all of the evidence establishes Pepper Australia's right and entitlement to act on behalf of the legal owner of the mortgage from time to time (whoever that may be), it profits Ms Whild nothing to have a complete account of the equitable and legal rights that may have subsisted over the period from 2004, when these proceedings commenced, and today's date. What matters is that the unimpeachable legal title to the mortgage over the Spotswood Property is now clearly in the name of PCL and before the assignment was clearly in the name of GEMSL, and that Pepper Australia was at all times authorised to act for each of the legal owners.

The Notice to Produce and the Summons to set it aside

53 The plaintiff objects to the notice to produce and seeks to have it set aside on the basis that it serves no legitimate forensic purpose and is fishing. The principles applicable have been set out in numerous decisions including, by way of example, the decision of J Forrest J in Messade v Baires Contracting Pty Ltd[16] and the decision of Maxwell P in Crown Joinery Pty Ltd v Lyleho Pty Ltd.[17]

54 It is clear that the obligations which a notice to produce imposes are similar to those imposed by a subpoena and that the considerations which apply to the setting aside of a subpoena are equally applicable to a notice to produce.[18] Just as a 'fishing' subpoena will be set aside so will a 'fishing' notice to produce.[19] A party is not entitled to use a notice to produce in an endeavour to discover whether he has a defence at all as distinct from obtaining evidence to support a defence. That is the essence of the complaint of fishing.

55 The objection taken to the notice to produce, and the summons to set it aside, requires Ms Whild to demonstrate precisely the legitimate forensic purpose for which access to the documents in the Notice is sought and that it is on the cards, or that there is a reasonable possibility, that the documents will materially assist her defence. Further, the objection that the notice to produce is fishing means that it must be shown by Ms Whild that her notice to produce is not a mere exercise to see whether there is material in the documents sought that might assist that defence.[20]

56 So the question must be asked, what defence is it that might be assisted by the documents referred to in the notice to produce? There is in fact no defence properly so called that is identified by Ms Whild in answer to the claim for possession. The only point to which the Notice could be directed is the question of the authority of Mr Paterson to give evidence and act on behalf of whoever may be the person entitled to the legal rights to the Loan Agreements and Mortgage. Beyond the fact that there are documents evidencing the transactions lying behind the acquisition of the Loan Agreements and Mortgage by PCL (together with other loans and securities), there is no reason to think that Pepper Australia did not have authority to manage and service the Loan Agreements and Mortgage and, in any event, no substantive defence to the relief sought disclosed.

57 Having regard to the history of the proceedings and the undisputed facts revealed in the VCAT proceeding and in the appeal decided by Croft J, to which I have referred in my earlier reasons, there can be no doubt that the legal owner of the Loan Agreements and Mortgage are entitled to possession of the Spotswood Property.

58 The evidence now given on behalf of GEMSL and PCL by Mr Meyer and Mr Pereira, as well as the fact that the legal ownership of the mortgage has been cleared up by the assignment to PCL, there is no merit in any further investigation of the authority of Mr Paterson. Nor is there any merit in pursuing some witch-hunt arising from the misstatement by Mr Paterson that he acted for Pepper Homeloans rather than Pepper Australia. Nor is there be any profit in tracking through who may have been the equitable owner of the Loan Agreements and Mortgage during the very long period in which Ms Whild has been seeking to defend the claims made against her. The title reveals that GEMSL was the legal owner until the transfer to PCL. What may have been the position in equity is now irrelevant because of the assignment and registration of the transfer of the mortgage to PCL.

59 Counsel for Ms Whild submitted that it was unsafe to make an order for possession without the documents proving the authority of Mr Paterson to act on behalf of the plaintiff. He referred, somewhat curiously of the decision of Gillard J in Rowe v B & R Nominees Pty Ltd,[21] a case concerning a forged mortgage and a subsequent mortgage which was held to effect an adoption of the forged mortgage. I can find nothing in that decision which bears upon the issue of the authority of Mr Paterson to give evidence on behalf of whomever may be the registered mortgagee and the person entitled to the benefit of the Loan Agreements. The evidence given is strong and convincing evidence of the authority of Mr Paterson to act on behalf of the legal owner from time to time.

60 In relation to Ms Whild's application for an accounting of the amount due under the mortgage, particularly having regard to the finding I made that clause 10.6 of the mortgage gave rise to a penalty, the evidence of Ms Gaber as to the amounts due under the mortgage, excluding any penalties, clearly indicates that a very substantial sum of over $1.2 Million is undoubtedly due and secured by the mortgage.

61 The claim in the First Summons is a claim simply for possession and, as I found in my reasons delivered on 18 September 2013, the plaintiff (or more properly, upon substitution of PCL, that company) is entitled to possession by reason of the default of Ms Whild under the terms of the mortgage. That default is not, in substance, denied. What Ms Whild continues to complain about is the mistaken failure of GEMSL to draw down on a new automatic debit authority that she provided after her first authority had proved to be ineffectual (that is, the account on which the authority operated had insufficient funds). That issue has been decided in the earlier proceedings.

62 Because of the nature of the relief claimed by the Mortgagee (possession only), there is no reason nor justification to order an account to be taken of the amount due under the mortgage and to order a stay until that accounting is complete.

63 There is a general rule that to obtain an injunction against the exercise of powers arising under a mortgage, including the taking of possession of the property or its sale, a mortgagor must, even where there is a dispute as to the amount due, pay the amount claimed by the mortgagee into Court.[22] To make order for the taking of an account, with a stay of the proceeding, as claimed would defer the remedy to which PCL is undoubtedly entitled and would have the same effect as an injunction.[23]

64 Further, to the extent that the making of an order for an account depends upon the exercise of a discretion by the Court, it is relevant, in my view, that beyond a few payments in 2004, Ms Whild has made no payments in reduction of the amounts due under the Loan Agreements and has taken each and every point available to her to resist any judgment against her.

65 I therefore refuse to order the taking of an account of the sums due and to stay the proceeding until that is done.

66 For these reasons I am persuaded that there is nothing in the complaint by Ms Whild regarding the authority of Mr Paterson to give evidence on behalf of GEMSL or on behalf of PCL. It follows, having regard to my reasons given on 18 September 2013, that there is no real prospect of Ms Whild defending the proceeding. Orders should be made that enable the substitution of PCL for GEMSL as plaintiff and for judgment for possession in its favour against Ms Whild.

(a) Pursuant to r 9.09(2) of the Supreme Court (General Civil Procedure) Rules 2005 ('Rules'), Permanent Custodians Limited (ABN 55001426384) be substituted for GE Mortgage Solutions Limited (ACN 070 797 894) as plaintiff in this proceeding;

(b) Compliance with the requirements of r 9.09(3) of the Rules as to service is dispensed with;

(c) The substitution of the plaintiff has immediate effect and the requirement for amendment of the writ and statement of claim and service thereof on the defendant is dispensed with;

(d) The title of the proceeding now and henceforth shall be known as 'Permanent Custodians Limited (ABN 55001426384) v Susan Irene Whild';

(e) There be judgment for possession of the property situate and known as 12 Strong Street, Spotswood, in the State of Victoria, being the whole of the land more particularly described in Certificate of Title Volume 02073 Folio 414 in favour of Permanent Custodians Limited (ABN 55001426384);

68 I shall hear the parties as to the costs of the proceedings and of the various hearings since my earlier reasons were handed down on 18 September 2013.

[1] Exhibit AP-3 to the affidavit of Andrew Paterson sworn 13 February 2013.

[2] Order of Master Evans made 11 December 2008.

[3] See affidavit of Susan Irene Whild sworn 30 May 2008 at [20] and VCAT proceeding M171/2008.

[4] These matters are well recorded in the affidavit of Ms Gaber sworn 11 April 2014 at paragraph [11].

[5] Transfer of Land Act 1958 s 45(2).

[6] See ALG-1 and ALG-2 to the affidavit of Ms Gaber affirmed on 11 April 2014.

[7] English Scottish & Australian Bank Ltd v Phillips, [1937] HCA 6; (1937) 57 CLR 302 at 322, 324, 325.

[8] Stanley Robinson, Property Law Act Victoria, 1992, at 315.

[9] See affidavit of Matthew David Johnson affirmed on 4 April 2014.

[10] See affidavit of Ms Garber affirmed on 11 April 2014.

[11] (1931) 46 CLR 494, 514; Op Cit APT Finance Pty Ltd v Bajada [2008] WASCA 73 [29].

[12] [2008] WASCA 73 [29].

[13] See Meagher, Gummow and Lehane Equity Doctrines and Remedies (4th ed) [6-520].

[14] GE Mortgage Solutions Ltd v Whild [2013] VSC 503 [77].

[15] Exhibit AP-19 of the further affidavit of Andrew Paterson sworn on 8 April 2014.

[16] [2011] VSC 56; See also Shaw v Yarranova Pty Ltd [2011] VSCA 55 [26]; R v Saleam [1999] NSWCCA 86 [11]; Commissioner of AFP v Magistrates' Court of Victoria & Ors [2011] VSC 0003 [28].

[17] [2007] VSC 214; Oswal v Carson, [2013] VSC 355 [18].

[18] Crown Joinery Pty Ltd v Lyleho Pty Ltd [2007] VSC 214 [31].

[19] Bailey v Beagle Management Pty Ltd [2001] FCA 60; (2001) 105 FCR 136; op cit Crown Joinery Pty Ltd v Lyleho Pty Ltd [2007] VSC 214 [31].

[20] Messade v Baires Contracting Pty Ltd [2011] VSC 56 [6]-[7].

[21] [1964] VicRp 59; [1964] VR 477.

[22] Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161.

[23] If it were an injunction it is beyond my power to grant: Rule 77.02(3)(b) of the Rules.