(4) The conditions applicable to the advance referred to in the Contract for Sale are materially different to the terms under the alleged Loan Agreement (as to which, see paragraphs [116] and [117].
58 It was submitted that the only conclusion sensibly available in the light of the pleading and the terms of the document is that the agreement reached and recorded in the Contract for Sale is the agreement between the parties and that no monies were advanced or are payable under the terms of the alleged (undated) Loan Agreement.
59 It was further submitted that the special conditions in the Contract for Sale had been the subject of the determination in the Federal Court by Edmonds J. Particular reference was made to the fact that his Honour described the bankrupt's obligation to vacate the property as "including the removal of all stock, cars, tyres etc".
60 In the Outline of Submissions of Defendants, it was submitted:-
"9. There is a factual dispute as to whether that, in fact occurred (referring to the giving of vacant possession). It seems that the plaintiff engaged a scrap metal merchant to remove items from the premises and, apparently, assumed that all of the bankrupt's property had been removed as required by the Contract for Sale. There is clear evidence that the plaintiff was mistaken in that regard. The photographic and other evidence indicate:-
(a) on 9 October 2008, the bankrupt was removing his possessions from the property; and
(b) on 13 November 2008, a substantial quantity of personal property, including metal racks, tyres and various car parks remained on the property."
61 The submission on behalf of the defendants was that Mr Kinsella had not vacated the property and, in particular, had not, as required, removed "all stock, cars, tyres…" in accordance with Special Condition 12.
62 On that basis, it was contended the obligation sued upon had not arisen and that, accordingly, the claim should be dismissed.
63 It was also contended that the mortgage furnished to the defendants was defective. As earlier noted, it did not identify any debt or other obligation the performance of which was secured by it. Whilst the plaintiff had acquired title under the mortgage, it was said that the title under it secured nothing. Reliance, in that respect, was placed upon the decisions in Perpetual Trustees Victoria Limited v Tsai [2004] NSWSC 745; Vella v Permanent Mortgages Pty Limited [2008] NSWSC 505 at [309] ff.
64 Those cases concerned the question as to whether registered mortgages operated to secure monies under loan agreements where the agreement in question had been forged. It was held that no money had been secured by the indefeasible mortgage in each case. The respective mortgagors were not liable despite indefeasibility.
65 Accordingly, in those cases, notwithstanding the conferral of indefeasibility by registration conferred on the mortgagee, the question was, as Campbell J (as his Honour then was) observed in Small v Tomassetti [2001] NSWSC 1112 at [9] "indefeasibility for what?".
66 In the present case, it was incumbent upon the plaintiff to establish that the mortgage which fails to express on its face or by reference to any document the loan secured by it that, as a matter of fact and law, it operated upon the loan given by way of vendor finance. In Small (supra), Campbell J referred to the case of PT Limited v Maradona (1992) 25 NSWLR 643 as an illustration of the way that one needs to look at the terms of the particular mortgage that is the subject of litigation to work out the scope of any estate or interest in the land which is created indefeasibly by the registration of that mortgage (at [12]).
67 The only evidence on the execution of the Mortgage and Loan Agreement was that of Mr Kinsella (affidavit, paragraph 6) to the effect that they were signed at the same time. That evidence was objected to and admitted as evidence that Mr Kinsella signed the documents at the same time. That, however, does not establish that the loan secured was the vendor finance provided by the special conditions in the Contract for Sale. Mr Kinsella's reference to the Loan Agreement was to the undated Loan Agreement (Exhibit C) executed on an unknown date. Accordingly, it is not open to construe the mortgage as in fact securing monies under a different and earlier agreement, namely, the Contract for Sale. Mr Skinner properly acknowledged in submissions the shortcomings in the drafting of the mortgage and undated Loan Agreement.
68 The defendants, accordingly, contended, in my view correctly, that, at best, the plaintiff was only an unsecured creditor and that Order 1 as sought in his notice of motion ought not be granted and the proceedings should be removed from the Possession List.
69 The defendants additionally contended that there was no provision under the Contract for Sale requiring payment of interest in advance of repayment of the principal loan. Accordingly, it was argued, no judgment should be entered if, as the defendants contended, the principal is not yet repayable.
70 In relation to the licence, it was submitted that the Federal Court proceedings did not involve the proposition that the license ceased when the property was destroyed by fire. Indeed, it was contended that that proposition had been advanced on behalf of the plaintiff and had been rejected.
71 Mr Kinsella was cross-examined in some detail upon the photographs identified as TEA 6 and TEA 7 (marked as MFI 1 and MFI 2 and which were exhibited to Mr Aldrich's affidavit). These were said to depict the condition of the premises as at October 2008. On the occasion in question (suggested in cross-examination to have been 9 October 2008), Mr Kinsella attended the premises. Certain photographs in TEA 6 show Mr Kinsella on site. He claimed he attended the site in response to his adjoining neighbours' request to secure roofing material which had become detached in high wind conditions and was alleged to have presented a risk.
72 In summary, Mr Kinsella accepted that many of the photographs depicted car parts, tyres, racks and other equipment on the premises and which he had formerly used in the course of his business. The photographic evidence and Mr Kinsella's cross-examination in relation to them established that, notwithstanding the fact that the property had been largely cleared, as at the last-mentioned date, there remained a number of objects on the property including car parts, rubbish and equipment.
73 Although the obligation on Mr Kinsella as vendor under the Contract for Sale, Special Condition 12, required him to vacate after six months of completion, the evidence, in my opinion, established that, for a lengthy period after the expiration of that six month period, the use of the property by the defendants was impaired due to the stock, car parts and other rubbish and objects on the property.
74 The relevant case law has considered the question as to whether it can be said that vacant possession of a property has been given when the use of the property is impeded by objects remaining on it that obstructs its use. It is only necessary to briefly refer to them.
75 In Cumberland Consolidated Holdings Limited v Ireland [1946] 1 All ER 284, Lord Greene MR, who delivered judgment on behalf of the Court, remarked that the expression "vacant possession" had not been the subject of substantial judicial explication. In that case, he found that the right to vacant possession included the right to actual unimpeded physical enjoyment of the premises and further, that the interference of this right by the existence of a physical impediment on the premises should be treated no differently to that interference caused by the presence of a trespasser: at 287.
76 Lord Greene MR observed that it was not merely the existence of a physical impediment on the premises that could give rise to a breach by the vendor of the obligation to give vacant possession. Rather, "it must be an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property": Cumberland Consolidated (supra) at 287.
77 In that case, the vendor had failed to give vacant possession in not removing from the cellar of the warehouse some 200 drums of cement. These occupied about two-thirds of the height of the cellar: Cumberland Consolidated (supra) at 285-286.
78 Lord Greene noted that, subject to the rule de minimis, the vendor, by leaving property of his or her own on the land, was claiming a right to use the premises as a place of deposit for his goods. Such a claim of right was inconsistent with the purchaser's right to undisturbed enjoyment.
79 The above principles were discussed and applied by Waddell CJ in Eq in Austral Standard Cables Pty Limited v Walker Nominees Pty Limited (1992) NSW Conv R ¶55-619, reversed on appeal, but not relevant only the point concerning vacant possession: (1992) 26 NSWLR 524 and more recently, by the Court of Appeal in Waterhouse v Waugh [2003] NSWCA 139.
80 In Austral Standard Cables Pty Limited (supra), Waddell CJ in Eq looked to the nature of the items left on the site and the proportion of the site occupied by them in order to determine whether the physical items amounted to a breach by the vendor to give vacant possession (at 59-529). His Honour determined that the majority of items left by the vendor were of such size as to require removal by machinery and that the items constituted about 15% of the site. On that basis, his Honour held that the vendor had not given vacant possession of the relevant area.
81 In Waterhouse (supra), Handley JA affirmed the principles expounded in Cumberland Consolidated (supra). Young CJ in Eq whilst agreeing with the judgment of Handley JA observed that "a tenant does not deliver up vacant possession if he or she leaves rubbish on the premises at the end of the lease other than an amount of rubbish which might be termed minimal": at [62].