Davidson v Suncorp-Metway Ltd [2020] QSC 315

SUPREME COURT OF QUEENSLAND CITATION: Davidson v Suncorp-Metway Ltd [2020] QSC 315 PARTIES: WILLIAM JAMES ALEXANDER DAVIDSON (Applicant) v SUNCORP-METWAY LTD ABN 66 010 831 722 (Respondent) FILE NO/S: BS 10881 of 2020 DIVISION: Trial Division PROCEEDING: Application DELIVERED ON: 14 October 2020, ex tempore DELIVERED AT: Brisbane HEARING DATE: 13 October 2020 JUDGE: Bowskill J ORDERS: 1. The originating application filed 12 October 2020 is dismissed. 2. The applicant pay the respondent’s costs on the standard basis. CATCHWORDS: MORTGAGES – MORTGAGEE’S REMEDIES – POSSESSION – where the respondent mortgagee obtained an order for recovery of possession of mortgaged property in February 2019, and an enforcement warrant for possession of the property is due to be executed on 16 October 2020 – where the applicant applies for a stay of execution of the enforcement warrant, pending delivery of judgment on an application he has made in the Federal Court of Australia, in which he purports to challenge the validity of the mortgage on the basis that it does not comply with s 78(2)(c) of the Land Title Act 1994 (Qld) because it does not specify a dollar amount as the debt secured, and because the form of the covering page of the standard conditions incorporated by reference into the mortgage includes the words “not applicable” in certain parts of it – where there has been no appeal from the order for recovery of possession, and no basis shown to set aside that order – whether any basis to stay execution of the enforcement warrant, by reference to the application in the Federal Court of Australia, has been established COUNSEL: G D Skelton (sol) for the applicant D J Ananian-Cooper for the respondent SOLICITORS: Allaw Queensland for the applicant Gadens Lawyers for the respondent -- 1 of 6 -- 2 [1] By an originating application filed on 12 October 2020, Mr William Davidson seeks an order that the “Queensland Supreme Court Enforcement Warrant – Possession of Land dated 7 February 2019, arising from proceeding 1772 of 2018, be stayed until one month after Justice Jackson of the Federal Circuit Court delivers his judgment in the matter QUD 18/2020”. [2] The application was given an urgent listing, and was heard by me on 13 October 2020, because the enforcement warrant is due to be executed on 16 October 2020. [3] In his supporting affidavit, Mr Davidson says he is seeking to stay the execution of the warrant “because of my application, currently before the Federal Circuit Court that, if successful, will disturb all previous Supreme Court decisions including the warrant”. Mr Davidson’s other application is before the Federal Court of Australia, not the Federal Circuit Court. [4] Mr Davidson contends that one of the issues that has arisen for consideration in that Federal Court proceeding is “whether anything was owed on the registered mortgage first, due to the liability on the Land Titles Office registered mortgage being described as “not applicable” (referring to exhibit WJAD2 to his affidavit, the “General Request”, form 14, which I will discuss shortly) and also s 73 of the Land Title Act 1994 (Qld) which, among other things, requires that an instrument of mortgage “must” include a description of the debt or liability secured by the mortgage (see s 73(1)(c)). Mr Davidson contends that Jackson J, of the Federal Court, “was seized of the mortgage issue”; and, essentially, that it is open to the court to conclude that the mortgage is not valid or enforceable because of the inclusion of the words “not applicable”. Mr Davidson’s application in the Federal Court was heard by Jackson J on 2 July 2020, and the decision is still reserved. [5] By way of background, in August and September 2013 Suncorp-Metway Ltd (the Bank) advanced to a company called Far North Queensland Cattle Company Pty Ltd (the company) loan and overdraft facilities totalling $8.8 million. The facilities were secured by, among other things, a personal guarantee and indemnity from Mr Davidson, in relation to the obligations of the company to the Bank, and a registered mortgage (number 715361425) over various properties, including Lot 194 on Crown Plan NR401, which is referred to as the Heidke Road property. [6] On the evidence, as at 13 October 2020, the company and Mr Davidson remained indebted to the Bank in the amount of $7,211,741.66. [7] The instrument of mortgage is exhibit RMZ-4 to the affidavit of Ms Zagorskis, appearing at pp 40-41 of the exhibits. At items 2, 3 and 4 of the instrument of mortgage, there are identified the lots to be mortgaged (including Lot 194 on CP NR401), the mortgagor as Mr Davidson and the mortgagee as the Bank. At item 5, description of debt or liability secured, the following appears “The Moneys Secured as defined and specified in Document No. 714418432”. At item 6, the mortgage instrument states that “The Mortgagor covenants with the Mortgagee in terms of standard terms document no. 714418432 and charges the estate or interest in Item 1 with the repayment/payment to the Mortgagee of all sums of money referred to in item 5”. -- 2 of 6 -- 3 [8] The “standard terms document no. 714418432” is exhibit RMZ-5, commencing at p 42 of the exhibits. That document is headed “General Request”, is in form 14, and describes the nature of the request as “Registrar approval and allocation of document reference number for a new version of the copy memorandum of common provisions for a general purpose mortgage document used as an annexure to form 2 mortgage documents lodged with the Qld Titles Office”. This document is not a mortgage instrument. Rather, it is a document which records the standard (or common) provisions which are incorporated by reference into the mortgage, in a manner contemplated by s 170 of the Land Title Act. [9] In these standard conditions, “moneys secured” is defined by reference to section B or section C, as appropriate. Here, section C is appropriate, because the mortgage was not a mortgage to which the Consumer Credit Code applied. As defined in clause 1.1 of section C, “moneys secured” means “all money which has and or may become due, owing or payable by the Mortgagor either alone or with any third party to the Bank now or in the future, either directly or indirectly, contingently or otherwise and including all such money arising from…” various things, including any guarantee and the mortgage itself. This is a common form of words used to describe the debt or liability secured, where the mortgage is an “all moneys” mortgage, which means that the mortgage secures all money the mortgagor owes the particular lender, whether at the time the mortgage is given, or in the future. [10] There has been a fairly tortured history of proceedings as between the Bank and Mr Davidson, which it is not necessary for me to go into in any detail. That history is addressed in the decision of Ryan J of this Court in Suncorp-Metway Ltd v Nagatsuma & Anor [2019] QSC 16 and also summarised in the decision of Derrington J of the Federal Court in Davidson v Suncorp-Metway Ltd [2020] FCA 795. [11] In February 2018, the Bank filed an application in this Court seeking to recover possession of the Heidke Road property under s 78(2)(c) of the Land Title Act. That application was heard by Ryan J of this Court on 28 September 2018. Her Honour determined the application and made orders on 7 February 2019, in the following terms: “1. Pursuant to section 78(2)(c) of the Land Title Act 1994 (Qld) the Applicant recover as against the First and Second Respondents possession of the property described as Lot 194 on Crown Plan NR401, Title Reference 20647021 and known as 178 Heidke Road, Malanda in the State of Queensland (also known as 178 Heidke Road, North Johnstone in the State of Queensland) (the Heidke Road Property) within 14 days. 2. Upon the Applicant by its counsel giving the usual undertaking as to damages, an injunction that the First and Second Respondents, whether by themselves, their agents, employees or otherwise, be restrained until the sale of the Heidke Road Property by the Applicant as mortgagee exercising power of sale under the mortgage bearing dealing number 715361425, without prior leave of the Court from: (a) lodging or procuring the lodgement of any caveat on the title to the Heidke Road Property; -- 3 of 6 -- 4 (b) creating or procuring the creation of any other encumbrance in connection with the Heidke Road Property; or (c) otherwise interfering with the Applicant’s sale of the Heidke Road Property.” [12] Her Honour published detailed reasons for the making of those orders: see Suncorp- Metway Ltd v Nagatsuma & Anor [2019] QSC 16. There has been no appeal from the orders made by Ryan J. [13] In June 2019, the Bank filed an application for the issue of an enforcement warrant for possession of the Heidke Road property. The enforcement warrant was issued on 17 June 2019, and has been amended once and extended once. A copy of the enforcement warrant in its current form is exhibit RMZ-20, at p 221 of the exhibits. [14] In August 2020, the solicitor for the Bank gave instructions to the bailiff of the Supreme Court to proceed with execution of the warrant. A notice has been served on Mr Davidson ordering him to vacate the Heidke Road property by no later than Friday, 16 October 2020. [15] The Federal Court proceedings (QUD 18/2020) were started on 23 January 2020. Mr Davidson is one of two “prospective applicants”, the other being his partner, Ms Nagatsuma. The Bank is named as the prospective respondent. The originating application sought orders, firstly, for (essentially pre-proceeding) discovery of various documents and, secondly, an injunction restraining the Bank from taking possession of certain properties, including the Heidke Road property (Lot 194 on CP NR401). [16] That application came on for hearing before Derrington J in Brisbane on 2 March 2020. His Honour dismissed paragraph 2 of the application on that day (the application for an injunction); made directions for the filing of further material in relation to paragraph 1 (the discovery application), and otherwise adjourned the hearing of that part of the application to 12 June 2020. The reasons appear in Davidson v Suncorp-Metway Ltd [2020] FCA 795. The fact that the rights and obligations of the parties had been substantively determined by Ryan J, on the basis of the loan agreement, mortgage and a later deed of settlement being valid and enforceable, was one of the main reasons for dismissing the application for an injunction. [17] At the hearing before me, I understood the solicitor for Mr Davidson to say that the question of the validity of the mortgage, on the basis of the point Mr Davidson now wishes to agitate, had been raised by Derrington J in the course of the hearing before his Honour. Having read the transcript, that is not correct. Mr Davidson appeared on his own behalf before Derrington J, and appears to have raised the question whether there was a mistake with the mortgage because it does not specify a dollar figure as the amount owing. Derrington J referred Mr Davidson to the definition of “money secured” under the mortgage, and made the observation that “it would be somewhat new law if mortgages had to specify a dollar amount”, also describing that as a most unusual proposition. The dismissal of the application for an injunction is also inconsistent with any suggestion that Derrington J was supportive of Mr Davidson’s current contention. [18] At some stage, an order was made transferring the proceeding from the Brisbane registry to the Perth registry, it seems on the basis that all matters in the Federal Court were being -- 4 of 6 -- 5 dealt with by video conferencing at this time, due to COVID-19 restrictions, and there was availability for a hearing by a judge in Perth. There is otherwise no connection whatsoever between the subject matter of the proceeding and Western Australia. [19] On 11 June 2020 Mr Davidson filed what is described as an “interlocutory application” in the Federal Court proceeding. By paragraphs 1, 2 and 3, this interlocutory application sought to have the matter moved back to Brisbane, that the matter be heard in person, and for leave to put a handwriting expert’s opinion into evidence. Each of those paragraphs of the application were dismissed by Jackson J in June 2020. Paragraph 4 sought the following order: “Determination of the enforceability of Suncorp mortgages over the properties in dispute. That claim is that the mortgages currently and formerly held by Suncorp over the subject properties are not enforceable as they do not comply with the Land Title Act 1994 (Qld) section 73(1)(c) in that there is no amount specified as owing.” [20] Both the discovery application, and paragraph 4 of the interlocutory application, were heard before Jackson J on 2 July 2020, and his Honour’s decision is reserved. [21] Before Jackson J, submissions were made by Mr Davidson about what he called the “mortgage issue”. It seems that two issues were raised: first, that the mortgage instrument does not specify a dollar amount as the debt secured; and, second, that the words “not applicable” on the “General Request” mean that the mortgage does not comply with s 73 of the Land Title Act. The Bank submitted that Mr Davidson’s purported challenge to the enforceability of the mortgage should be dismissed on bases including that the issue of enforceability of the mortgage has been conclusively determined by Ryan J of this Court; further, and in any event, having been registered, the Bank’s mortgage has the benefit of indefeasibility under ss 179 and 184 of the Land Title Act, even if it were the case that the instrument of mortgage did not comply with s 73(1)(c) of the Land Title Act, referring to Breskvar v Wall (1971) 126 CLR 376; and, in any event, s 73(1)(c) of the Land Title Act was complied with, because there is a sufficient description of the debt or liability secured by the mortgage. [22] As I mentioned at the outset, by his application filed in this Court, Mr Davidson seeks to delay execution of the enforcement warrant, until one month after Jackson J delivers his decision in relation to the Federal Court applications. [23] The solicitor for Mr Davidson, in his oral submissions before me, emphasised that the point Mr Davidson wishes to agitate in particular is in relation to the words “not applicable” where they appear on the “General Request” form, contending that demonstrates that there has not been compliance with s 73(1)(c) of the Land Title Act. He submits that is a point that had not been appreciated at the time the matter was before Ryan J. It is on that basis he submits enforcement of the execution warrant should be stayed, because a favourable decision on that point from Jackson J of the Federal Court may call into question the validity of the mortgage. [24] There are a number of fundamental problems with Mr Davidson’s arguments, the result of which is that his application to stay execution of the enforcement warrant will be refused. [25] First, the effect of a decision of Jackson J in the Federal Court proceeding, even if favourable to Mr Davidson on this point, will not be to set aside, or impeach in any way, -- 5 of 6 -- 6 the decision of Ryan J of this Court. There has been no appeal from that decision, the orders in which were made in February 2019. There is nothing in the material now before the court which would support an application to set aside the orders of Ryan J, under one of the grounds under r 667(2) of the UCPR. The order for recovery of possession of the Heidke Road property remains in force, and the Bank is entitled enforce that order. [26] Second, and in any event, there is in my respectful view no merit in the arguments now sought to be raised by Mr Davidson challenging the validity of the mortgage. As to the argument that there is not a dollar figure specified at item 5 of the instrument of mortgage, the short answer is that there does not need to be. What is required is a description of the debt or liability secured. The description which is given, by reference to the definition of “moneys secured” as defined in the standard terms document, which is incorporated by reference, is sufficient. [27] As to the argument about the inclusion of the words “not applicable”, this is entirely misconceived. Those words appear at items 2, 3 and 4 of the “General Request” form 14 – which contains the common (or standard) mortgage provisions. Logically, the reference to a lot description, proprietor or lessee and interest in the lot are “not applicable” on this form – because it is a “general request” to register a document, and allocate a reference number, for standard provisions to be incorporated by reference into particular mortgages. It is not a document concerning a particular lot, proprietor of or interest in a lot. This “General Request” is not an instrument of mortgage of itself. The instrument of mortgage is the form 2, which is headed “mortgage”. The instrument of mortgage does comply with s 73(1) of the Land Title Act. [28] In short, I am not persuaded that any basis to stay execution of the enforcement warrant has been shown by Mr Davidson. [29] The application for a stay is dismissed. [30] The respondent seeks an order that the applicant pay its costs of the application, on the standard basis. That is an appropriate order. [31] The orders of the court therefore are: 1. The originating application filed 12 October 2020 is dismissed. 2. The applicant pay the respondent’s costs on the standard basis. -- 6 of 6 --