Hargraves Secured Investments Limited v Sharpe

EX TEMPORE Judgment 1This is an application by Mr David George Sharpe who has been involved in a number of proceedings in this Court concerning his obligations under various mortgages and loan arrangements, including a settlement deed. These have been the subject of decisions of this Court, from which Mr Sharpe has not appealed, the principal of which is that of Harrison J (Hargraves Secured Investments Limited v Sharpe [2013] NSWSC 539) concerning, amongst other things, the possible application of the provisions of the Farm Debt Mediation Act 1994. 2Since his Honour's judgment a number of events have occurred, including defaults giving rise to a purported exercise by the defendant of its power of sale in relation to property into which it entered possession, the lawfulness of which was considered by Harrison J in the judgment to which I have adverted. Mr Sharpe now seeks an injunction against the selling of the properties which is due to occur by auction on Thursday, 8 August 2013. He also seeks ancillary orders, to which reference need not be made. 3There are several bases for the application. A number of them concern the issues determined by Harrison J into which I will not re-enter. The other class of material relied on by Mr Sharpe concerns the alleged failure of the defendant and its agents to properly advertise the attributes of the property, which Mr Sharpe alleges will mean that it will be sold at a considerable discount to its true value. The price at which the property will be ultimately sold is, of course, presently unknown. Consequently an allegation of this kind could only very rarely justify the grant of an injunction to prevent the sale. Indeed, s 111A of the Conveyancing Act 1919 which deals with this subject matter appears to point to the remedy in damages as an appropriate way of dealing with the complaint of undervalue, although it should be noted that s 111A(4) deals only with the prospect of challenging the title of the purchaser and does not in terms deal with the right of the mortgagee to make the sale. 4I should note that, since the sale is by auction, the ultimate price is very likely to reflect the actual market value of the property as at the date of sale, although it is fair in Mr Sharpe's favour to note that it assumes an informed market and it is Mr Sharpe's case that the market has not been informed of the true attributes of the property. Nevertheless this complaint necessarily depends upon the ultimate purchase price, which cannot be known until the auction. In my view in these circumstances it would not be appropriate to injunct the sale. Mr Sharpe must be left to his action for damages, if any. 5The next substantial ground concerns the service of the requisite notice under s 57 of the Real Property Act 1900. The short point is whether service complied with the requirements of s 170 of the Conveyancing Act 1919 as informed by the Interpretation Act 1987. It is clear that service by ordinary mail addressed to the recipient entitled to notice will satisfy the statutory requirements. The question though is whether the notice was sent to Mr Sharpe's "last known residential or business address", see s 170(1)(b). 6The difficulty in this case is that it appears that the premises in which Mr Sharpe was resident had two addresses. The first is xx xxx xxxxx Road, Dorrigo and the other xxx xxxxxxxxx Road, Dorrigo. The property in question, where Mr Sharpe undoubtedly resided, is bounded by both those roads and it appears that a separate number has been applied to each, though they denote the one property. Mr Sharpe points out, persuasively, that all correspondence between him and the defendant has used the address xx xxx xxxxx Road and that this correspondence had been going on for some years before the notice was addressed to him on 5 December 2011 at Tyringham Road. 7As against that it is clear that the local Shire Council applies the Tyringham Road address to the property and, in a valuation of 16 June 2009 provided by Mr Sharpe himself for the purposes of the financing in issue, the property was described as "located at xxx xxxxxxxxx Road, Dorrigo". 8It is evident, therefore, that the property in question has two addresses and the issue is whether using the Tyringham Road address did not comply with the requirements of the Act to which I have adverted. 9It is relevant I think that the notice was not returned undelivered, although Mr Sharpe has referred in his affidavit to conversations "perhaps seven or ten years ago" with the then Dorrigo Postmaster, Mr Bruce Mackie, when he complained about mail being returned which was simply addressed to "The Old Farm Dorrigo" as distinct from specifying any number. He said that Mr Mackie told him that the address used was ineffective and that he should put up the number 30 at his mailbox at the entry gate and have all future mail addressed to "The Old Farm" xx xxx xxxxx Road Dorrigo and not simply "The Old Farm Dorrigo". The reason given was that emergency services needed to know the distance up the Old Coast Road where he resided. Mr Sharpe said that Mr Mackie told him that xx xxx xxxxx Road was the only address to be used from then on and any mail directed to him at some other address would be automatically returned to sender. 10This discussion plainly took place in the context of the use by Mr Sharpe of a description of the property as distinct from specifying any number and road. It did not deal with the possible use of the Tyringham Road number. Since that number has been applied to Tyringham Road as the address of the property, or at least one of them, it seems to me likely that that address is indeed an alternate address for the same property. Mr Sharpe says that there is no mailbox or post box at the gate marked xxx xx xxxxxxxxx Road. 11It is necessary, I think, to appreciate that this is a rural property relatively close to the township of Dorrigo where Mr Sharpe has lived for many years and where mail has been addressed to him for over a decade. It seems to me virtually certain that the mail deliverer would know that mail addressed to xxx xxxxxxxxx Road to Mr Sharpe should be delivered to the residence the driveway of which, as Mr Sharpe points out, runs off Old Coast Road. I am fortified in this conclusion by the fact that the notice, despite the threat of Mr Mackie, was not returned undelivered. 12Where there are two addresses for a property, a notice will comply with the Conveyancing Act if it is addressed to either one. I can understand, however, Mr Sharpe's frustration, given the universal use by the defendant of the Old Coast Road address. The plaintiff's solicitor, Mr Gorman, who was responsible for posting the notice, chose the Tyringham Road address because it was on the valuation and because of information, he said, which was received from the Council. The only information tendered, however, was a document dated 29 January 2013. As at that date, the property details were noted as xxx xxxxxxxxx Road. But I think it is fair to infer that this address reflected the Council's details and, in all the circumstances, probably the details as at December 2011 and probably well before then. 13I note also that in an affidavit sworn 27 February 2013 by Mr Sharpe he says, "I am the registered proprietor of a farming property known as "The Old Farm" at xxx xxxxxxxxx Road Dorrigo NSW 2453." I accept Mr Sharpe's point that this was drafted by his solicitor. Nevertheless, he swore the affidavit, as it seems to me, accepting that the Tyringham Road address was an alternative address for the property. 14Accordingly, I hold that the notice was served in accordance with the Conveyancing Act 1919 and took effect four working days after it was posted pursuant to s 76 the Interpretation Act 1987. 15Even if I were not satisfied of due service on that date, Mr Sharpe notes that the notice came to his attention on 12 July 2013 when it was annexed to an affidavit relied on by the respondent in the proceedings which were then taken before Justice Schmidt seeking a stay. Accordingly, if that be the date of notice, the auction, were it to proceed on 8 August 2013 as planned, would occur some five days before it could otherwise take place. 16Were Mr Sharpe in a position to show that in that period there were any real prospect of his being able to redeem his obligation then there might be (were I wrong about the address question) some basis for granting the injunction, however, he has only mentioned the possibility of obtaining funds from a rich relative, whom he does not identify and whose assets he does not detail except to say he is worth $30 million, and the possibility that he might win Lotto. This information does not provide any basis for supposing he is, likely to be in any position to redeem his equity. 17Furthermore, Mr Sharpe is also not in a position to give an undertaking as to damages having regard to the parlous state of his finances, all of his assets effectively having been seized one way or another by the defendant. Were he to be in a position to redeem, if the sale were to take place upon the basis of service of the s 57 notice on 12 July 2013, he may have a claim for damages. However, it seems to me at this stage, for the reasons I have given, injunctive relief is not appropriate. 18Accordingly, the motion must be dismissed with costs.