MORTGAGES – MORTGAGES AND CHARGES GENERALLY – REMEDIES OF THE
MORTGAGEE – ENTRY INTO POSSESSION – where the
applicant mortgagee
sought vacant possession of the property upon the default of the respondent
Source
Original judgment source is linked above.
Catchwords
MORTGAGES – MORTGAGES AND CHARGES GENERALLY – REMEDIES OF THEMORTGAGEE – ENTRY INTO POSSESSION – where theapplicant mortgageesought vacant possession of the property upon the default of the respondentmortgagor – where the respondentresisted the order, arguing that themortgage did not comply with the Consumer Credit Code – whether therespondent had anyreal prospects of success in resisting the application forvacant possessionCONSUMER CREDIT – CREDIT PROTECTION – MISCELLANEOUS STATUTORYAND OTHER MATTERS – where the respondent signed adeclaration under s 11of the Consumer Credit Code, attesting that the credit was provided wholly orpredominantly for business orinvestment purposes – where the respondentargued that the declaration was ineffective as the applicant credit providerknewor had reason to believe that the credit was in fact to be applied whollyor predominantly for personal, domestic or household purposes
– whether
the presumption arising from
s 11 of the Consumer Credit Code was rebutted
– whether the protections afforded by ss 80 and 100 of the Consumer Credit
Code
applied to the respondent
Consumer Credit Code (Qld), s 11, s 80, s 100
Consumer
Credit (Queensland) Act 1994 (Qld)
Consumer Credit Regulation 1995 (Qld),
s 10
Land Title Act 1994 (Qld), s 78
Judgment (19 paragraphs)
[1]
[1] MACKENZIE J: This is an application for recovery of vacant possession of land at 104 Admiralty Drive, Paradise Waters. The applicant is registered mortgagee of the land. As at 30 July 2008 the respondent was in default under the mortgage and on that date a notice of exercise of power of sale was forwarded to her according to the method provided for in the contract. On 8 August 2008 a notice requiring delivery of the land was forwarded to the respondent by registered mail. The respondent appeared in person because of her precarious financial situation, to resist the application. Notwithstanding this disadvantage, she presented her case in a logical and relevant way not often seen in cases of self representation.
[2]
[2] The evidence establishes the default was not remedied within 30 days of service of exercise of power of sale. The respondent has not delivered possession of the property to the applicant.
[3]
[3] Paragraph 7.1(c) of the mortgage permits the mortgagee to take possession of the land upon default. Also s 78 of the Land Title Act 1994 (Qld) ("LTA") provides that on default of a mortgagor the mortgagee may by a proceeding in a court of competent jurisdiction obtain possession of the mortgaged land, subject to the terms of the mortgage.
[4]
[4] The respondent was permitted to place before me some documentary material notwithstanding its informality in the sense that it was not exhibited to the affidavit. Amongst the material is information to the effect that when she moved to the
[5]
Gold Coast about fifteen years ago to make a new start, she set up a company trust and developed seven houses on the Gold Coast which allowed her to be financially independent and self employed for 10 years. In 2004 she closed down the operation and decided to build her own private home on land she owned at 104 Admiralty Drive. As she recounts it in the information:
[6]
"I lived in it with my kids, mother, and when an appropriate offer to purchase came up...I would sell the property, repay the loan. I did not expect the house to sell immediately. All the agents said these residences take several years to find the right buyer of luxury home. I had to be vigilant and patient. I was happy to live there with my family. But I immediately started to advertise with the locale (sic) and international prestige agents to let them know I was in the market if the right buyer came though their office."
[7]
[5] The project was initially financed by Suncorp Metway but when the building was finished or approaching completion she was told that Suncorp Metway could not fund it any further. In the result, she obtained the loan from the applicant which was secured by the mortgage which the applicant wishes to enforce. The loan was initially for a period of six months and of an amount of $5.2 million. From time to time the loan was extended and currently, when interest and other sundry items are taken into account, the amount owed is about $6.5 million.
[8]
[6] The principal matter upon which the respondent relies is a submission that the credit contract and mortgage were subject to the Consumer Credit Code (an appendix to the Consumer Credit (Queensland) Act 1994) and that the loan and mortgage documentation did not comply with the key requirements of s 100 of the Consumer Credit Code. It was also asserted that the lender had failed to serve the statutory default notices under s 80 of the Code and that the enforcement action was in contravention of that provision. There was also an issue raised about the adequacy of a valuation obtained by the mortgagee and the obligation to take reasonable steps to obtain market value when purporting to exercise power of sale of mortgaged property. That letter was written by solicitors on an ex gratia basis on behalf of the respondent.
[9]
[7] The respondent says that she was acting at all times as a private consumer when she requested the loan. One of the difficulties she faces in this regard is that, although the land is registered in her personal name and she says that she acted as an
[10]
owner-builder, in each instance when the loan was entered into or extended, she executed a Consumer Credit Code declaration under s 11 of the Code and s 10 of the regulation which declared that "the credit to be provided to me/us by the credit provider is to be provided wholly or predominantly for business or investment purposes (or both)." There is a warning on the document to the effect that the declaration should not be signed unless the loan is wholly or predominantly for business or investment purposes and that, by signing the declaration, the person doing so may lose protection under the Consumer Credit Code. The statutory declaration is signed by the respondent and witnessed by a solicitor in each case. She acknowledges that she freely signed the declaration as part of the process of obtaining the money.
[11]
[8] The Finance Director of the applicant, Ms Sly, deposes that she processed the application by the respondent for the loan. At the time, the respondent informed her that the loan was required to refinance an existing loan facility she had with the business banking sector of Suncorp Metway. She says that at the time the application for the loan was made, the respondent told her that the property being offered as security was intended to be sold as a brand new home. She was informed by the respondent that the property was for sale and that a short-term loan was required pending the sale of the property at which time the loan would be repaid. She also says that the respondent told her she did not intend to reside at the property as, in her opinion, a brand new home that had never been lived in was more attractive to overseas purchasers to whom she was marketing the property. While the detail of that account is obviously different from the respondent's affidavit and other material upon which she relies, the notion that there was an underlying commercial purpose comes through both.
[12]
[9] The applicant relied on that part of s 11 of the Consumer Credit Code which provides that credit is presumed conclusively, for the purposes of the Code, not to be provided wholly or predominantly for personal domestic or household purposes if the debtor declares, before entering into the contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes). However, the respondent's arguments raise the issue that such a declaration is ineffective for the purposes of s 11 if the credit provider (or any other relevant person who obtained the declaration from the debtor) knew or had reason to believe, at the time the declaration was made, that the credit was in fact to be applied wholly or predominantly for personal domestic or household purposes.
[13]
[10] The effect of the respondent's affidavit is that she had no contact with anyone associated with the applicant except Ms Sly. Ms Sly would be a "relevant person" for the purpose of s11. She said the Ms Sly was aware the she was "acting as a private consumer". She draws a distinction between the previous loans she had, which were effected through a company for the purpose of building homes, sold as new homes, by using employed or contracted builders. She places significance on purchasing the land in her own name, classifying it for stamp duty purposes as her principal place of residence and building the house as an owner builder. She also says that Ms Sly was aware that she was "now acting as a private consumer when (she) requested the loan".
[14]
[11] She said that when she was asking for the loan, she relied on Ms Sly's good judgment to tick the right box and that she would get her loan. However she was always aware of the truth of the respondent's situation. She understood that brokers were aware of the requirements for lenders to present, and she followed the instructions. Interpreting what she appears to be saying subsequently, it seems to be that Ms Sly knew "the truth of (her) situation" but manipulated the documentation to enable her to get the finance even though it was for purposes which would have entitled her to protection under the Consumer Credit Code.
[15]
[12] I am not persuaded that there is a serious question to be tried as to whether the presumption arising from s 11 of the Consumer Code has been rebutted. The principal reason is that it is difficult to regard the loans as being other than for a predominantly commercial purpose let alone predominantly for personal, domestic or household purposes, having regard to the respondent's evidence alone. The tenor of her evidence is that her intention was to build the house and sell it once a suitable buyer was found. As she says, it is a legitimate means of accumulating wealth to operate in this way, but it is difficult to escape the conclusion that living in the house while a buyer is found is somewhat incidental to the underlying strategy. Her explanation (quoted in paragraph [4] above), including the fact that she immediately let agents know that the house was available for sale if the right buyer came though their doors is consistent with that view of the matter. Further, signing the declarations in the presence of a solicitor of her choice suggests that nothing was said to the solicitor that caused alarm bells to ring about the appropriateness of making the declarations.
[16]
[13] It is inevitable, having regard to the conclusions expressed, that the respondent has no real prospects of success in resisting the application for recovery of vacant possession of the land.
[17]
1. The applicant recover vacant possession of the land known as
[18]
104 Admiralty Drive, Paradise Waters in the State of Queensland described as Lot 47 on RP 140961, County of Ward, Parish of Gilston, Title Reference 15601131 pursuant to s 78(2)(c) Land Title Act 1994 (Qld);
[19]
2. The respondent pay the applicant's costs of the application to be assessed.