Hargraves Secured Investments Limited v Sharpe

EX TEMPORE Judgment 1By motion filed on the 5 July 2013 the defendant, Mr Sharpe, sought various relief against the plaintiff. On the hearing of the motion today Mr Sharpe appeared unrepresented and pressed for orders 4 to 11 in the motion, which are in the following terms: "4 A Declaration that the Notice to Vacate dated 27 May 2013 generated against the Writ for Possession of Land issued 25 October 2012 is Void. 5 An order pursuant to s. 135(2)(b) Civil Procedure Act 2005 and pending further order of the Court that the Sheriff be prohibited from taking any action in relation to the to execution of the Notice to Vacate dated 27 May 2013 Sheriff Notice ref; 814/2013/R0000497 issued by way of the 'set aside' Writ for Possession of Land dated 25 October 2012 over the Lands described in Certificate of Title Folio Identifier x/xxxxxx and x/xxxxxx known as xxx xxxxxxxx Road, Kentucky in the State of New South Wales in relation to the Judgment entered 3 July 2012 in New South Wales Supreme Court proceedings number 2012 / 00041764. 6 An Order Setting aside the execution of, and, the Writ for Possession of Land issued 7 June 2013 over the Lands described in Certificate of Title Folio Identifier x/xxxxxx and x/xxxxxx known as xxx xxxxxxxx Road, Kentucky in the State of New South Wales in relation to the Judgment entered 3 July 2012 in New South Wales Supreme Court proceedings number 2012 / 00041764. or, in the alternative a stay of the execution of the Writ for Possession of Land issued 7 June 2013 over the Lands described in Certificate of Title Folio Identifier x/xxxxxx and x/xxxxxx known as xxx xxxxxxxx Road, Kentucky in the State of New South Wales in relation to the Judgment entered 3 July 2012 in New South Wales Supreme Court proceedings number 2012 / 00041764 which took place on 4 July 2013. 7 An order pursuant to s. 135(2)(b) Civil Procedure Act 2005 and pending further order of the Court that the Sheriff be prohibited from taking any action to execute the writ for Levy of Property dated 29 May 2013 (Sheriff case No: 302/2013/L0011895) in relation to the Judgment entered 3 July 2012 in New South Wales Supreme Court proceedings number 2012/00041764. 8 An order pursuant to s.135(2)(c) Civil Procedure Act 2005 pending further order of the Court that the judgment creditor (the respondent) his servants and/or agents be prohibited from taking any action to Sell, Reassign, Alienate, Lease or otherwise dispose of the judgment debtor (the applicant) 's Land at Dorrigo NSW or Kentucky NSW in satisfaction of the judgment entered 3 July 2012 in New South Wales Supreme Court proceedings number 2012 / 00041764 until 31 days have elapsed after the Applicant is served by the Plaintiff a Notice pursuant to s57(2)(b) of the Real Property Act 1900, until further order. 9 An Order that the Plaintiff by itself, his servants and agents be restrained from removing, selling, reassigning, or alienating any chattel items located on or stored at the Applicants Land at Kentucky NSW or Dorrigo NSW, until further order. 10 Leave to file an incomplete affidavit, further evidence, and affidavit in reply. 11 Costs in this Motion to be costs in the cause." 2The relief originally sought in the proceedings, in which the plaintiff alleged mortgage default against Mr Sharpe, was possession of two properties which secured the mortgage, one of them located at Kentucky (also referred to at other times as Campbells Hill). That claim was resolved by way of a consent judgment entered in 2012. 3The proceedings since then have had a considerable history, but relevant for present purposes is a judgment given by Harrison J in December 2012 (see Hargraves Secured Investments Limited v Sharpe [2012] NSWSC 1519). There his Honour concluded at [51]: "51 Having regard to the scheme of the Deed of Settlement, I consider that Hargraves was not entitled to apply for the issue of a writ of possession in respect of Campbells Hill. No act of default has occurred, or at least not one of which there is evidence before me on this application. The stay period in clause 1.2 has not expired and Hargraves cannot enforce order 3(a) in the Consent Judgment as things presently stand "until 16 May 2014". In the event that Mr Sharpe commits "an act of default pursuant to the terms of [the] Deed", then that position may change." 4In the result his Honour concluded at [52]: "I will hear the parties on the form of the orders in due course if required. As presently minded, however, I consider that they should be as follows: 1. Set aside the writ of possession issued at Sydney on 25 October 2012 in respect of the whole of the land described in Certificate of Title Folio Identifier x/xxxxxx and x/xxxxxx known as xxx xxxxxxxx Road, Kentucky in the State of New South Wales. 2. Make no order as to costs." 5Subsequently the plaintiff sought and on 7 June 2013 obtained, a further writ of possession in respect of the Kentucky property. That followed a notice to vacate issued by the Sheriff on 27 May, to which Mr Sharpe objected, it resting, seemingly, on the writ dealt with by Harrison J in December 2012. 6There was at that time a dispute between Mr Sharpe and the plaintiff as to whether or not he was then in breach of the terms of the deed by which the parties were bound. That dispute concerned the amount of a payment, it was common ground, he had been obliged to make under the deed. 7Mr Sharpe thus disputed the plaintiff's right to possession of the Kentucky property, because he claimed he was not in breach of the obligations imposed on him by that deed. 8There is also a dispute between the parties as to whether Mr Sharpe was in occupation of the property when the plaintiff obtained possession of it. There was no dispute that at the time that possession was taken by the plaintiff on 5 July, that Mr Sharp was not present; that the plaintiff is now in possession of the property; and that it is pursuing active steps to exercise its rights to sell the property under the mortgage. 9In part, Mr Sharpe's complaints rest on his view that the plaintiff did not take necessary steps to ensure that he received the notice he was entitled to, of the writ of possession which had been issued in June, before that possession was taken. 10Mr Sharpe did not take the steps necessary to have the writ of possession set aside, before the plaintiff obtained possession. Nor has he sought an injunction to restrain the plaintiff from exercising its power of sale. 11Instead he pressed the relief sought in the motion. 12At today's hearing the plaintiff acknowledged some difficulty with the timing of the steps which had been taken to obtain possession. It relied, nevertheless on the writ of possession which it had obtained in June and asserted that it was entitled to take possession as it had, in accordance with that writ, on the basis of its right of self-help and peaceable re-entry (see MacIntosh v Lobel (1993) 30 NSWLR 441 and Gippsreal Ltd v Estcourt [2007] VSC 448). Mr Sharpe disputes that it was entitled so to take such possession, claiming that he was then in occupation of the property. That is in dispute. 13The dispute which underpins the matters which brought the parties to court today was explained to be a disagreement over whether Mr Sharpe made a payment due in the terms agreed when the parties entered the deed which binds their settlement. Clauses 5 and 7 of that deed relevantly provide: "5. Payment of Judgment Debt 5.1 Interest (a) During the Stay Period Sharpe will pay interest to [Hargraves] quarterly. (b) If, prior to the sale of the Old Farm Dorrigo, Sharpe defaults as to the payment of interest that amount of interest will be added to the amount of the Judgment Debt. (c) Any payment made by Sharpe to [Hargraves] of any amount in excess of the obligation to pay interest is to be immediately applied to reduce the amount of the Judgment Debt. ... 5.2 All proceeds from the sale of the Old Farm Dorrigo are to be paid directly to [Hargraves] in payment of the Judgment Debt and any interest accrued thereon. 5.3 If any amount of the Judgment Debt remains outstanding to [Hargraves] after the date of the sale of "The Old Farm" Dorrigo or 15 December 2012, whichever is the earlier, Sharpe is to commence the repayment of the Judgment Debt (and any accrued interest) on the following basis: (a) 6 (six) repayments. (b) The first repayment amount will be calculated on the day after the date of the sale of "The Old Farm" Dorrigo or 15 December 2012, whichever is the earlier... ... (c) The date of the first repayment shall be three (3) months after: (i) the date of the sale of "The Old Farm" Dorrigo; or (ii) 15 December 2012; (iii) whichever is the earlier. ... 7 Default 7.1 In the event that Sharpe fails to make a payment pursuant to clause 5 of this Deed, [Hargraves] will be entitled to immediate possession of property "Cambell Hills"...and Sharpe by his signature hereto irrevocably consents to [Hargraves] taking possession." 14It was common ground that clause 5.3 had crystallised, Old Farm not having been sold before 15 December. Mr Sharpe's position, as I understand it, was that the value of the property had to be taken into account in calculating the payments due under clause 5. That was disputed by the plaintiff. 15It should be observed that the deed does not appear readily to lend itself to the construction Mr Sharpe urges. Also to be considered is that on the evidence of Mr Gorman, a director of the plaintiff, the properties which secured the mortgage have a combined value of only some $1.8 million, and that the amounts owing to the plaintiff now stand in excess of $2 million. That value, again, is not conceded by Mr Sharpe. 16Having considered all that the parties have argued over the course of today, it seems to me that the relief for which Mr Sharpe presses cannot be granted. What he really appears to seek is an order which will return possession of the property to him, pending determination of the parties' underlying dispute as to what payment he was obliged to make under the deed. 17It seems to me that such an order cannot be made in these proceedings on the basis of the motion pressed. The position is not as it was when Harrison J considered the matter in December, the plaintiff now being in possession of the property. 18As discussed by Johnson J in Perpetual Limited v Kelso [2008] NSWSC 906 at [25] -[26]: "25 A power of sale under s.58 Real Property Act 1900 is to be exercised for the purpose of the plaintiff recovering moneys which are due and owing to it as a mortgagee (see s.58(3)). Even where a plaintiff takes possession of the property for the purpose of exercising its power of sale, a defendant may obtain an injunction restraining a mortgagee from exercising the power of sale if the amount of the mortgage debt (if this is not in dispute) is paid, or (if the amount is disputed) the amount claimed by the mortgagee is paid into Court: Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 at 164-167, 168-169; GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889 at [17]. "26 If the Defendants wish to challenge the propriety of any conduct of the Plaintiff in respect of the enforcement of its security, it remains open to them to do so in other proceedings: see Carr v Finance Corporation of Australia Ltd (1982) 150 CLR 139 at 152; Adelaide Bank Limited v BMG Poseidon Corp Pty Ltd [2008] NSWSC 68 at [25]." 19Mr Sharpe has advanced a number of complaints today. They include complaints that notice required under s 57(2)(b) of the Real Property Act 1900, on which the plaintiff relied to obtain the writ of possession issued in its favour, was not served upon him. He also disputes that he was given notice required in accordance with s 7A of the Sheriff Act 2005, which obliges the Sheriff to give 30 days notice to deliver up possession, before entering into land. Whether the Sheriff actually entered into the property is in dispute. 20These are all matters which, it seems to me, Mr Sharpe would be entitled to rely on, if he sought to pursue relief of the kind which Johnson J discussed. If Mr Sharpe wishes to pursue such relief, however, he will have to take other steps than those which he has taken in these proceedings, by way of the notice of motion which he filed. 21For those reasons, I decline to make the orders pressed today.