Australia and New Zealand Banking Group Limited v SW & Anor [2014] QDC 73

DISTRICT COURT OF QUEENSLAND CITATION: Australia and New Zealand Banking Group Limited v SW & Anor [2014] QDC 73 PARTIES: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ACN 005357522 (plaintiff/applicant) v SW (first defendant/respondent) and TS (second defendant) FILE NO/S: 1505/12 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 4 April 2014 DELIVERED AT: Brisbane HEARING DATE: 27 March 2014 JUDGE: Horneman-Wren SC DCJ ORDER: 1. The Plaintiff’s application for summary judgment filed 11 March 2014 is dismissed. 2. No order be made as to costs. CATCHWORDS: PROCEDURE – INFERIOR COURTS – QUEENSLAND – DISTRICT COURTS - CIVIL JURISDICTION – TRIAL AND JUDGMENT – where the applicant applies for summary judgment – where the respondent is in default of mortgage – where the applicant released a further mortgage over a different property to which the respondent was a mortgagee – where it is contested that the respondent’s authority was required to release this mortgage – whether the respondent has no real prospect of successfully defending the applicant’s claim Uniform Civil Procedure Rules 1999 (Qld), r 292 Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R -- 1 of 11 -- 2 232 S v W [2004] QSC 212 Swain v Hillman [2001] 1 All ER 91 COUNSEL: Ms PA Ahern for the Applicant SW self-represented SOLICITORS: Gadens Lawyers for the Applicant [1] The plaintiff has applied for summary judgment pursuant to r 292 of the Uniform Civil Procedure Rules 1999 (Qld) against the first defendant in a proceeding commenced by claim on 19 April 2012. The plaintiff claims for recovery of possession of property located at 18 O’Hanlon Crescent, Mount Julian and a sum, now in excess of $87,000, said to be owing pursuant to the terms of a loan agreement and mortgage. [2] Judgment in default of an appearance was entered against the second defendant on 13 September 2012. [3] SW, who appeared for herself on the application, and who represents herself in the substantive proceeding, filed a defence to the claim on 16 May 2012. [4] SW’s defence is not, with respect, well pleaded. At paragraph 2 of the defence, SW pleads that she is unable to admit certain allegations in the statement of claim “because received false information by ANZ bank manager denying release of mortgage. released illegally (sic)”. [5] At paragraph 4 she pleads: “ANZ Bank release joint mortgage without permission, signature or payment”. Then, at paragraph 5, she pleads: “Consideration of contract made weekly mortgage repayments solely for 25 years without any contribution from second defendant. TS received 48% of my legally obtained family home through perjury and extortion and received 52% by contravening Supreme Court -- 2 of 11 -- 3 order. Perverting the course of justice and having ANZ Bank release mortgage without payment.” [6] The plaintiff denies each of those allegations in its reply. Particularly, it pleads, at paragraph 4(a)(i) and (ii) of its reply, that by orders of the Supreme Court made on 23 July 2004 and 15 February 2005 the plaintiff was not required to obtain the authority of SW or TS to release the mortgage over another property formerly owned by the first and second defendants property at Mooloolah. [7] SW has purported to provide further and better particulars of the defence. They consist of an allegation that there had been a contravention of an order of the Supreme Court, involving perjury and a perverting of the course of justice. The particulars then refer to several documents as being evidence to “back up” SW’s claims. Three days after she filed those further and better particulars, she also filed an affidavit to which was exhibited a number of documents, many of which appear to be those to which she had referred in the particulars. [8] SW’s allegations concern the circumstances in which the mortgage over another property, the Mooloolah property, was released at the time of the sale of that property without the loan being paid out. A little history needs to be recounted in order to understand the parties’ competing positions. [9] SW and the second defendant, TS, were formerly in a de facto relationship. In the course of that relationship, three properties were acquired: some land at Blackbutt; the Mooloolah property; and the property the subject of the present proceedings at Mount Julian. -- 3 of 11 -- 4 [10] The circumstances of the acquisitions of the various properties are recorded in the reasons of White J in the de facto property proceedings brought in the Supreme Court in which the respective interests of each of the defendants in those properties was declared.1 The purchase price of the Mooloolah property was $45,000. To fund the purchase SW and TS obtained a home loan from the plaintiff for $38,000. The balance of the purchase price was funded by a first home owner’s grant. [11] The Mount Julian property was acquired during a period when SW and TS were separated. The property was purchased to provide stable accommodation for SW and the children of the relationship. Her Honour’s reasons record that the plaintiff bank required the loan to purchase this house to be in joint names, with TS to pay out the approximately $8,700 which remained on the Mooloolah property. The loan was secured against the Mount Julian property itself, with the Blackbutt land and the Mooloolah properties also taken as collateral security, under the mortgage. [12] The $8,700 balance of the loan on the Mooloolah property was paid by TS, although there was a dispute before her Honour as to where he may have sourced those funds from. [13] After the acquisition of the Mount Julian property, TS made no payments towards the mortgage. [14] In the proceedings before the Supreme Court, TS had proposed that he was entitled to a 50% share in the Blackbutt land and the Mooloolah property. To give effect to those interests TS had submitted that he should be entitled to retain the Mooloolah property and account to SW for 50% of its value; and that SW retain the Mount 1 S v W [2004] QSC 212. -- 4 of 11 -- 5 Julian property and account to TS for 50% of its value. To give practical effect to that division of the assets TS would pay out the then balance of the mortgage of about $84,000. There was also proposed a small cash payment to SW who would retain the Blackbutt property and assume liability for outstanding rates which then stood at about $8,000. [15] White J rejected this global approach to dividing the assets. Rather, her Honour approached the matter on an asset-by-asset basis. Her Honour found that based on the respective contributions of the parties to the three assets, it would be unconscionable for TS to assert a beneficial half-interest in the properties, especially the Blackbutt land and the Mount Julian house. In respect of the Mount Julian property, her Honour said: “The arrangement with the Mt Julian property gave joint legal title to the parties. The payment of $8,700 to discharge the indebtedness over the [Mooloolah] property is not, in my view, a contribution to the acquisition of the Mt Julian property. It has been accounted for in the plaintiff’s interest in the [Mooloolah] property. It suited the plaintiff that his four children should be housed securely. All of the mortgage repayments have been made by the defendant. The minor improvement by the addition of some fencing does not give the plaintiff any beneficial entitlement to that property. The defendant should be entitled to the whole of the beneficial interest in that property.”2 [16] In the event, White J declared that TS had a 20% interest in the Blackbutt property; a 48.8% interest in the Mooloolah property; and no interest at all in the Mount Julian property. [17] Because both TS and SW had expressed interest in acquiring the Mooloolah property, her Honour concluded that it should be offered for public sale. Each of the parties was to be at liberty to bid for it with an entitlement to offset his or her 2 Ibid at [41]. -- 5 of 11 -- 6 interest in the property against the purchase price. To facilitate that, her Honour ordered that the Mooloolah property be vested in a statutory trustee to hold it on trust for public sale and to hold the proceeds of the sale on trust for the parties in their respective proportions. [18] The Public Trustee of Queensland was appointed as trustee of the Mooloolah property by further order of the court made on 15 February 2005. It seems that sales to third parties were almost affected on a couple of occasions, but in the end fell through. Eventually, the property was sold to TS for $210,000. A cheque for $102,162.47 representing SW’s share of the proceeds of sale, less expenses, was paid into an account in her name held with the plaintiff on 20 July 2007. [19] SW has taken issue with the Public Trustee over a number of issues concerning the sale of the property to TS, including concerning the price and whether it was required to be sold at auction. Those are matters irrelevant to the present proceeding. [20] What is relevant on the pleadings is what occurred with the mortgage over the various properties at the time of the sale of the Mooloolah property to TS. [21] The reasons and orders of White J do not deal expressly with what was to happen to the debt which was secured by the mortgage. The orders of February 2005 appointed the Public Trustee, trustee of the land and vested the land in the Public Trustee “subject to encumbrances affecting the entirety but free from encumbrances affecting any undivided shares to be held upon trust to sell the same and stand possessed of the net proceeds of sale after payment of costs and expenses … for TS and SW in the shares …” determined in the earlier order of July 2004. -- 6 of 11 -- 7 [22] It is implicit in the orders that in order for the Mooloolah property to be sold, at least to a third party, it would require the release of the mortgage over that property. It appears to be SW’s case that this release was only to occur upon discharge of the mortgage debt. This does not expressly arise from the reasons and orders of White J. [23] As already noted, the plaintiff pleads that it was not required to obtain the authority of either SW or TS to release the mortgage over the Mooloolah property. The evidence before me does not necessarily support the contention in that pleading. [24] The material exhibited to SW’s affidavit includes a letter from the ANZ Bank dated 4 October 2005 which reads, relevantly for this proceeding: “We refer to your recent advices regarding the release of the above property, which is currently held as security for your lending with ANZ Bank (“the bank”). Release documentation has been prepared, and the bank is in a position to settle on the property. However, we are unable to proceed until we have your signed Settlement Authority, consenting to the variations referred to in the attached document. Please return this document in the reply paid envelope or by fax prior to release date.” [emphasis added] [25] Attached to the letter was a document entitled “Mortgage Servicing Settlement Authority” addressed jointly to SW and TS. It stated: “We have received your recent request to arrange a security release. ANZ requires a single copy of this authority to be completed, signed by all account holders and returned to ANZ to proceed to settlement. In order for ANZ to proceed to settlement on your behalf, the completed authority must be received by ANZ at least three days prior to your date of settlement.” [emphasis added] [26] It also said that “as per your request ANZ will action the following changes to your security on the day of the release.” The identified actions were the release of the security over the Mooloolah property, and the retention of the security over the -- 7 of 11 -- 8 Mount Julian property. I do not have before me any evidence of the request referred to and whether it was actually made by both TS and SW. [27] The settlement authority document also stated that “ANZ will action the following changes to your loans as required to vary security”. The identified action was the clearance of the arrears on loan account no. 4435-67073. That is the loan account secured by the mortgage which is the subject of this proceeding. [28] The document contained an authority in these terms: “I/we authorise a representative of ANZ to attend settlement on my/our behalf.” [29] The document then made provision for signature by both TS and SW, whose names both appeared typed into the document. The document in evidence was signed by TS on 2 October 2005, but was not signed by SW. [30] Also exhibited to SW’s affidavit is a letter from the Official Solicitor of the Public Trustee dated 9 January 2006 addressed to SW. That letter reads: “Dear Sherrie (sic), I have been advised by the solicitor for TS that before:-  The property at Mooloolah can be sold to TS;  The ANZ mortgages removed from both properties (at Mooloolah and O’Hanlon Road); and  TS’s name removed from the O’Hanlon property, you will need to sign release documents from the ANZ Bank. If nothing is done, both properties will remain in joint names. I suggest you should consult with your solicitor if you want to have the Mooloolah property sold to TS and the O’Hanlon Road property placed solely in your name. Your solicitor can then consult with Schultz Toomey O’Brien Lawyers.” [emphasis added] -- 8 of 11 -- 9 [31] The O’Hanlon Road property referred to is the Mount Julian property. [32] Importantly, for the purpose of this proceeding, that letter contemplated the removal of the ANZ mortgage from both the Mooloolah and Mount Julian properties. This is consistent with what seems to be SW’s position. [33] There is no evidence before me of SW ever having signed the authority evidencing her consent to the security arrangements which was said by the ANZ in its letter of 4 October 2004 to be necessary to proceed to release the mortgage on the Mooloolah property. Nor is there any evidence before me of SW ever having signed the release documents which were said by the Official Solicitor, as advised by TS’s solicitor, to be necessary to effect the removal of the mortgage from the Mooloolah property. It appears to have been intended that the removal of the mortgages from the Mooloolah property was to occur in the context of the removal of the mortgage from the Mount Julian property also; and the transfer of the respective properties to TS and SW in their sole names. From the title searches in evidence it is apparent that the Mooloolah property was transferred into TS’s sole name in February 2007, whereas the Mount Julian property remained in joint names notwithstanding the declaration of SW’s 100% interest in it. [34] In a further letter to SW dated 24 February 2012, in addressing the circumstances of the release of the mortgage over the Mooloolah property, the Official Solicitor to the Public Trustee said: “It is noted that there was an ANZ mortgage registered on the [Mooloolah] title and that settlement was delayed because of (among other things) your reluctance to sign ANZ’s forms in relation to the discharge of the mortgage or the transfer of the mortgage. -- 9 of 11 -- 10 Because of the difficulties experienced in achieving settlement, I note that the file indicates some dialogue was entered into in relation to the relisting of the property. However, the Public Trustee ultimately concluded settlement with TS on the basis of TS’s offer having previously been accepted. Prior to settlement, ANZ orally informed the Public Trustee that loan monies were not required to be paid for the purposes of releasing the mortgage so far as it related to [the Mooloolah property]. Accordingly, ANZ provided for settlement a release of the mortgage so far as it related to [the Mooloolah property]. The mortgage was released from the title for [the Mooloolah property]. I note that you have requested a copy of the release of mortgage. The file does not contain a copy of the release, but you may be able to obtain a copy from ANZ or the Titles Office if you wish to peruse a copy.” [emphasis added] [35] It is in light of these matters that the issues pleaded in SW’s defence and the plaintiff’s reply must be considered in the context of this summary judgment application. Whether SW will be successful in making out her defence at trial is not the issue for determination on this application. The issue is whether SW has no real prospect of successfully defending the plaintiff’s claim, in the sense of a realistic rather than fanciful prospect of success. Even if the court considers success is improbable, its discretion to grant summary judgment will not arise.3 Summary determination of issues will only be given in the clearest of cases.4 [36] In my view, this is not the clearest of cases. It is not merely a case of unremedied default under a loan agreement and mortgage. The plaintiff has joined issue with the first defendant on the legality and authority of the release of the mortgage over the Mooloolah property. 3 Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 per Williams JA at [11]-[13] applying Swain v Hillman [2001] 1 All ER 91. 4 Salcedo at [3] per McMurdo P. -- 10 of 11 -- 11 [37] On all of the evidence before me, I am not satisfied that SW has no real prospect of successfully defending the claim. Nor am I satisfied that, on the issues joined on the pleadings and on the evidence, there is no need for a trial. [38] I dismiss the application. -- 11 of 11 --