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Indigenous Business Australia v Blair

 

[2018] QSC 145

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Indigenous Business Australia v Blair & Anor [2018] QSC 145

PARTIES:

INDIGENOUS BUSINESS AUSTRALIA

ABN 25 192 932 833

(applicant)

v

ELSTON ROY BLAIR

(first respondent)

AILEEN CATHERINE BLAIR

(second respondent)

FILE NO/S:

SC No 5350 of 2018

DIVISION:

Trial

PROCEEDING:

Originating Application

DELIVERED ON:

19 June 2018 (ex tempore)

DELIVERED AT:

Brisbane

HEARING DATE:

19 June 2018

JUDGE:

Atkinson J

ORDERS:

  1. It is declared that the amount of $257,340.52 is due to the applicant on account of principal and interest under a bill of mortgage registered number 711635870 over land situated at 33 Brianna Court, Maryborough in the State of Queensland (also known as Lot 251 Brianna Court, Maryborough in the State of Queensland and 33 Brianna Court, Oakhurst in the State of Queensland) and more particularly described as Lot 251 on Survey Plan 195065, Title Reference 50646432 (the Property), of which the respondents are the registered proprietors.
  2. Upon the respondents paying:
  1. (a)
    the amount of $257,340.52 so declared to be due to the applicant;
  2. (b)
    interest on that sum at the rate of 4.10 percent from the date of this order until the day that is 3 months after the date of this order; and
  3. (c)
    the amount of the applicant’s costs

to the applicant at the office of the applicant’s solicitors Gadens Lawyers, Level 11, 111 Eagle Street, Brisbane in the State of Queensland, on or before the day that is 3 months after the date of this order, the applicant shall at the cost of the respondents release the Property free and clear of any encumbrances done by the applicant or any person claiming by from or under the applicant.

  1. In default of the respondents paying all of the sums referred to in paragraph 2 above to the applicant in the manner set out above:
  1. (a)
    the respondents shall be foreclosed of and from all rights, title, interest and equity of redemption of, in and to the Property; and
  2. (b)
    all the estate and fee simple interest of the respondents in the Property shall vest in the applicant.
  1. Upon deposit of this order together with such form as is required by the Registrar of Titles, together with an affidavit of an authorised officer of the applicant certifying that the sums referred to in paragraph 2, or any part thereof, remain due and owing, the applicant shall be entitled to become the registered proprietor of the Property in fee simple.
  2. The applicant shall account to the respondents for any sum or sums paid on account of the sums referred to in paragraph 2.
  3. The respondents shall pay the applicant’s costs of and incidental to the Originating Application filed on 18 May 2018 to be agreed or, failing agreement, to be assessed.

CATCHWORDS:

REAL PROPERTY – TORRENS TITLE – MORTGAGES, CHARGES AND ENCUMBRANCES – POWERS AND REMEDIES OF MORTGAGEE – FORECLOSURE UNDER STATUTE – where the applicant is a body corporate established to promote the economic interests of Aboriginal people and Torres Strait Islanders – where the applicant was the mortgagee of a real property – where the respondents were in long term default under the mortgage – where, previously, the applicant has exercised its power as mortgagee in possession to sell the properties it owned, causing economic and social losses to the company and its stakeholders – where, on this application, the applicant applied to foreclose the property with the intention of renting it to Aboriginal people and Torres Strait Islanders to support both its economic and social justice objectives – whether the applicant was entitled to foreclosure of the property

Aboriginal and Torres Strait Islander Act 2005 (Cth), s 146

COUNSEL:

C A Johnstone for the applicant

No appearance for the respondents

SOLICITORS:

Gadens Lawyers for the applicant

No appearance for the respondents

  1. [1]
    The applicant, Indigenous Business Australia, is a body that is established under part 4, division 1 of the Aboriginal and Torres Strait Islander Act 2005 (Cth) (“the Act”).  It is a body corporate which may, under the Act, acquire, hold and dispose of real and personal property.  The purposes of Indigenous Business Australia are set out in s 146 of the Act, which provides that it:

“…is established:

  1. (a)
    to assist and enhance Aboriginal and Torres Strait Islander self-management and economic self-sufficiency;  and
  2. (b)
    to advance the commercial and economic interests of Aboriginal persons and Torres Strait Islanders by accumulating and using a substantial capital asset for the benefit of Aboriginal and Torres Strait Islander peoples.”
  1. [2]
    The affidavit of Caroline Sheedy, whose title is “Manager, Loan Management” of Indigenous Business Australia, sets out that, in order to give effect to those purposes, one of its principal focuses is housing for Indigenous people.  She deposes that Indigenous Business Australia seeks to boost home ownership to Indigenous people through advancing secured loans to them, to enable them to purchase a residence, including under its Indigenous Home Ownership Program.  The applicant, Indigenous Business Australia, also rents accommodation to Indigenous people.  In this way, it has both commercial and social justice objectives.
  2. [3]
    It appears that, in recent years, Indigenous Business Australia has sustained significant losses from conducting mortgagee in possession sales of properties over which it held mortgages when those mortgages were in default, and the sale of security occurred.  During the 2016 financial year, for example, Ms Sheedy swears that the applicant sustained losses of $7,200,000 from mortgagee in possession sales, principally caused by downturns in housing markets in regional Australia, particularly in areas involved in the mining and manufacturing sectors.  This is, of course, an unfortunate outcome, because the losses do not assist the applicant in the objectives set out in section 146 of the Act.
  3. [4]
    An innovative solution to this problem has been proposed by the applicant, and that is where the mortgage is in such default that the only solution to the problem is a mortgagee in possession sale, to recoup what capital it can, leading to the losses mentioned, the applicant will, instead, hold the properties and rent them to Indigenous tenants for an indefinite period.  This has two advantages:  first, it means that the losses suffered by a mortgagee in possession sale are not crystallised; and secondly, it maintains a housing stock available for Indigenous people to rent.  When mortgagee in possession sales happen, there is both the crystallisation of a loss, and also the loss of the housing stock.
  4. [5]
    In this particular case, the mortgage was entered into in April 2008.  There has been substantial long term default under the loan agreement.  The default has not been remedied, despite demand.  The applicant does not seek to enforce the personal liability against the respondent borrowers, but rather, to have the property transferred to the applicant for the purposes set out.  It is apparent that, together with interest, and given the defaults, the moneys now owed pursuant to the mortgage is considerably more than the value of the property.  Accordingly, there was no equity held in the property by the respondents.
  5. [6]
    In those circumstances, it is appropriate that the orders sought by the applicant, which will assist it in performing its functions, and which are likely to further the social and economic benefit of Aboriginal persons and Torres Strait Islanders, should be made.
  6. [7]
      I therefore order that:
    1. It is declared that the amount of $257,340.52 is due to the applicant on account of principal and interest under a bill of mortgage registered number 711635870 over land situated at 33 Brianna Court, Maryborough in the State of Queensland (also known as Lot 251 Brianna Court, Maryborough in the State of Queensland and 33 Brianna Court, Oakhurst in the State of Queensland) and more particularly described as Lot 251 on Survey Plan 195065, Title Reference 50646432 (the Property), of which the respondents are the registered proprietors.
    2. Upon the respondents paying:
      1. (a)
        the amount of $257,340.52 so declared to be due to the applicant;
      2. (b)
        interest on that sum at the rate of 4.10 percent from the date of this order until the day that is 3 months after the date of this order; and
      3. (c)
        the amount of the applicant’s costs

to the applicant at the office of the applicant’s solicitors Gadens Lawyers, Level 11, 111 Eagle Street, Brisbane in the State of Queensland, on or before the day that is 3 months after the date of this order, the applicant shall at the cost of the respondents release the Property free and clear of any encumbrances done by the applicant or any person claiming by from or under the applicant.

  1. In default of the respondents paying all of the sums referred to in paragraph 2 above to the applicant in the manner set out above:
    1. (a)
      the respondents shall be foreclosed of and from all rights, title, interest and equity of redemption of, in and to the Property; and
    2. (b)
      all the estate and fee simple interest of the respondents in the Property shall vest in the applicant.
  2. Upon deposit of this order together with such form as is required by the Registrar of Titles, together with an affidavit of an authorised officer of the applicant certifying that the sums referred to in paragraph 2, or any part thereof, remain due and owing, the applicant shall be entitled to become the registered proprietor of the Property in fee simple.
  3. The applicant shall account to the respondents for any sum or sums paid on account of the sums referred to in paragraph 2.
  4. The respondents shall pay the applicant’s costs of and incidental to the Originating Application filed on 18 May 2018 to be agreed or, failing agreement, to be assessed.
Close

Editorial Notes

  • Published Case Name:

    Indigenous Business Australia v Blair & Anor

  • Shortened Case Name:

    Indigenous Business Australia v Blair

  • MNC:

    [2018] QSC 145

  • Court:

    QSC

  • Judge(s):

    Atkinson J

  • Date:

    19 Jun 2018

  • White Star Case:

    Yes

Litigation History

Event Citation or File Date Notes
Primary Judgment [2018] QSC 145 19 Jun 2018 Application for directions, in effect, that if the respondent pays outstanding funds due on a mortgage they will be entitled to the unencumbered real property and in default the real property will vest in the applicant: Atkinson J.

Appeal Status

No Status