Hargraves Secured Investments Limited v Michael Slaven at the trustee of the bankrupt of Roslyn Edwina Waller and Anor

extempore Judgment 1The second defendant, Mrs Roslyn Edwina Waller, lives at "Merryangledre" at Hargraves near Mudgee in mid-western New South Wales. She is the registered proprietor of "Merryangledre". Today the plaintiff in these proceedings, Hargraves Secured Investments Limited ("HSI"), seeks by motion to have judgment for possession of "Merryangledre" property and seeks leave to issue a writ for possession. 2HSI joined two defendants on its Amended Statement of Claim: Michael Slaven, the trustee of the bankrupt estate of Roslyn Edwina Waller, and later Roslyn Edwina Waller herself. 3The proceedings, and HSI's motion, originally also sought judgment against the defendants for $1,027,436.23 as at 5 October 2012. But it has been recognised that was impossible, because Mrs Waller was made bankrupt in July of last year: cf Bankruptcy Act 1966 (Cth) s 58(3). HSI can instead if it wishes lodge a proof of debt in her bankrupt estate. 4The plaintiff's right to possession is said to arise under a loan agreement and a mortgage. The loan agreement dated 29 August 2006 is supported by a mortgage over "Merryangledre". The August 2006 loan agreement now sued on is, in fact, the third of three loan agreements made between HSI and Mrs Waller. For reasons that I will shortly explain, I am satisfied: that Mrs Waller was in default under the August 2006 loan agreement; that HSI's right to possession of "Merryangledre" has arisen; and, that HSI is entitled to judgment. The earlier proceedings 5What looks like a reasonably straightforward claim for possession of "Merryangledre" has a complicated procedural history. I do not have to go into all of that history today other than at a fairly summary level. The matter comes to Court today as a result of the journey of earlier proceedings in this Court before Harrison J, to the New South Wales Court of Appeal, and then to the High Court of Australia: Waller v Hargraves Secured Investments [2012] HCA 4, (2012) 245 CLR 311. This was followed by the commencement of these proceedings in which Hall J gave a judgment in May of this year. 6The first, second and third loan agreements between HSI and Mrs Waller resulted in all this litigation. The essential point in that litigation was the same at each level: before Harrison J, in this Court, before the Court of Appeal and before the High Court. The point at issue was whether a certificate under the Farm Debt Mediation Act 1994 (NSW) ("Farm Debt Mediation Act") in respect of the first loan agreement allowed HSI to take enforcement action under the third, or August 2006 loan agreement, or whether the mortgage in this case securing the August 2006 loan agreement was a fresh a farm mortgage within the Farm Debt Mediation Act, requiring another certificate. 7Mrs Waller was ultimately successful in arguing in the High Court that the Farm Debt Mediation Act did apply to the August 2006 loan agreement and that enforcement action was not possible in the absence of a further certificate under that Act: Waller v Hargraves Secured Investments [2012] HCA 4, (2012) 245 CLR 311. These proceedings 8But after the High Court's decision in February 2012, Mrs Waller was made bankrupt, in July 2012. That resulted in HSI proceeding against Mrs Waller in a different way. In November 2012 HSI brought these proceedings against Mrs Waller's trustee in bankruptcy, Mr Michael Slaven (the trustee) for possession of "Merryangledre". 9After these proceedings were commenced, the trustee and HSI agreed to resolve a claim for costs arising out of the High Court proceedings. The terms of that agreement are immaterial, other than to observe that the agreement resulted in the discontinuance of HSI's proceedings against the trustee. But HSI joined Mrs Waller and the proceedings remained on foot against her, the registered proprietor and occupant of the land. 10HSI filed the current motion for judgment for possession and for a writ for possession in January of this year. The parties argued on 10 May before Hall J whether or not the defence filed by the second defendant should be struck out. 11The trustee took no active part in the proceedings before Hall J. Drawing upon the Civil Procedure Act 2005 s 91, Mrs Waller argued in her defence before Hall J, that the High Court proceedings had determined and dismissed HSI's claim after a hearing on the merits, and that cause of action estoppel prevent HSI from proceeding further in this action. Hall J dismissed that argument and struck out the defence for the reasons, which appear from his Honour's judgment: Hargraves Secured Investments Limited v Michael Slaven as Trustee of Bankrupt Estate of Roslyn Edwina Waller [2013] NSWSC 673. 12Hall J determined that Mrs Waller did not have an arguable defence to the plaintiff's proceedings and that by reason of her bankruptcy she had no standing in the present proceedings. He did not determine precisely what consequential orders would be sought. But he referred the claim for consequential relief to the Common Law Duty Judge, the capacity in which I sit today. 13With this short history the present application can be addressed. The present application for possession 14HSI seeks judgment for possession and the issue of a writ in circumstances where there is no filed defence. Although Hall J found that Mrs Waller had no standing in the present proceedings, the Court has today heard from Mr Suchowersky, a solicitor acting on a pro bono basis as amicus for her. The Court is grateful for the assistance he has provided in the matter, given as it is on a pro bono basis. 15But despite Mr Suchowersky's arguments, in my view HSI has made out a case for possession of the Hargraves property by virtue of the following established facts. 16The August 2006 loan agreement provided for the advance of $640,000 to Mrs Waller and the payment of monthly interest on that principal at the rate of 13.25 per cent per annum. But this rate of interest was reducible to 9.25 per cent per annum, if paid on time, and if all the other covenants in the agreement were performed. 17Mrs Waller agreed to provide collateral for the August 2006 loan agreement in the form of a mortgage over "Merryangledre" (clause 5). She also agreed to repay to the lender the whole of the principal sum by 5 November 2010 (clause 5.1). The August 2006 loan agreement also provided that the principal sum and interest should become payable at the option of the lender, if the borrower defaulted in the payment of any principal sum or interest (clause 6.1), or if the borrower became bankrupt (clause 6.2). 18I am satisfied that on the evidence that defaults under the 2006 loan agreement and the mortgage have occurred. Indeed, two defaults have occurred. No interest has been paid since 22 June 2007. And Mrs Waller was made bankrupt in July 2012. These are both established defaults. 19HSI's entitlement to possession depends on the terms of the mortgage over "Merryangledre". It has established to my satisfaction that a mortgage exists over the property, being dealing number 99409851D, which incorporates a Memorandum of Common Provisions 672317Q. 20Those common provisions provide that upon default HSI must: give a notice to Mrs Waller as mortgagor, providing at least 31 days grace after stating that the mortgagor is in default; and must otherwise comply with applicable statutory provisions in relation to default and the recovery of possession. If default is not rectified within the 31 days of grace, then HSI is entitled under (clause 19.3(b)) to take possession of the property. 21I am satisfied that HSI has served a notice under s 57(2)(b) of the Real Property Act 1900 and s 111(2)(b) of the Conveyancing Act 1919 (NSW), giving notice of the default and otherwise complying with the period of grace provisions within the common provisions of the mortgage as stated. 22I am also satisfied that the defaults have not been rectified. It is clear that no further interest and principal has been paid and that Mrs Waller is still a bankrupt. 23For those reasons, in my view and subject to one matter HSI is entitled to judgment for possession. Before judgment for possession could be granted, where the defendant is not present, it is necessary for a plaintiff to establish who the occupants of the land are: Uniform Civil Procedure Rules 2005 r 36.8. But I am satisfied in this case that for the purposes of that rule Mrs Waller is either, present or, I can dispense with the rule because Mr Suchowersky is here today with instructions from her. I can be satisfied that if anything needed to be said in relation to the question of the occupation of the land, that Mr Suchowersky would advance it on her behalf. (1)I will enter judgment in accordance with paragraph 1 of the plaintiff's notice of motion dated 17 January 2013. (2)An order that the plaintiff have leave to issue a Writ of Possession, in accordance with order 2 of the motion. (3)I dismiss order 3 of the motion. (4)I dismiss order 4 of the motion (5)Further to order 2, the writ will remain in Court and may not be executed before 19 July 2013. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 June 2013