- Unreported Judgment
COURT OF APPEAL
Appeal No 5196 of 2002
ANDREW THOROLD TOLLApplicant (Defendant)
POINCIANA CO‑OPERATIVE HOUSING
SOCIETY LIMITEDRespondent (Plaintiff)
.. DATE 21/06/2002
1.JERRARD JA: This matter has been the hearing of an application by Andrew Thorold Toll for orders pursuant to Rule 761(2) of the Uniform Civil Procedure Rules for a stay of orders made by his Honour Justice Dutney on 13 May 2002, which orders are the subject of an appeal by the present applicant. His Honour Justice Dutney had presided in proceedings in which the present applicant was the defendant to an application by Poinciana Co‑Operative Housing Society Limited for orders that it recover possession of a property at 102‑104 Woongarra Street, West Bundaberg.
2.The evidence before his Honour was to the effect that that property had been purchased by the appellant with funds provided by the now respondent Housing Society, and provided by it pursuant to a loan agreement made 2 July 1997. At the time of that agreement the property was mortgaged by the present appellant to the present respondent.
3.The evidence before his Honour was to the effect that on 21 December 2001 the respondent served the appellant with a notice of default. That notice contended that the appellant was in breach of his obligations pursuant to the loan agreement and mortgage in four specified respects. The notice, of course, was provided pursuant to the provisions of the Property Law Act and also it seems to provisions of the Consumer Credit Code, those being sections 84 and 80 respectively of those two pieces of legislation.
4.The grounds of the alleged default were as follows. It was alleged that the appellant had failed to pay rates in an amount of $4,719.43. It was a term of the loan that he pay rates as and when they fell due. It was also alleged that he had failed to keep the purchased premises insured, alleged that an amount of $6,390.72 paid by the respondent for repair and rates had not been repaid as required by the appellant, and finally it was alleged that the appellant in any event was in arrears in his loan repayments to the amount of $2,947.25.
5.His Honour heard an application brought pursuant to Rule 292(2) of the Uniform Civil Procedure Rules for summary judgment. On that, he was required, as he correctly directed himself, to ask whether the then defendant, now appellant, had any real prospect of defending the claim brought against him in whole or in part. That claim was to recover possession of the property.
6.His Honour had read before him affidavit evidence from both parties and at the end of the day came to the view that the appellant had not demonstrated those described prospects of successfully defending the claim; and made the orders which are the subject of the appeal filed by the appellant on 7 June 2002, and this application for a stay filed on 18 June 2002. What the appellant seeks is a stay of the order made on 13 May 2002 that the then plaintiff recover possession of the property.
7.His Honour dealt with each of the four matters in which default was alleged. In respect off the first, he thought that the applicant had what his Honour described as the “bones of a triable issue" by way of defence, since the present applicant contended that the Council had erroneously asked him to pay rates on the basis that he was obliged to pay rates for two separate residences. I should explain that the property which was purchased has on it two separate residential buildings.
8.My impression is that his Honour was not much impressed with the applicant's likely defence to the notice of default on that matter since the claimed rates remained unpaid, it would seem, as at the date of the hearing before his Honour, and he accordingly foresaw little more than argument as to whether the Council could legitimately demand twice the amount that the present applicant says was payable. However, it appears that since the matter was heard before his Honour, as demonstrated by annexure G to the affidavit filed by the applicant on 18 June 2002, the Council has conceded that it would only "apply single service charges" to his property, for the period from 1 July 1997 to 30 June 2002.
9.That information was communicated to the applicant by letter dated 12 June 2002, so this is a matter which has genuinely arisen since his Honour's judgment, and which shows that the present applicant would succeed in defending the assertion that he was in default on that matter under the loan agreement and mortgage. However, that was only one of four matters. It is true that his Honour was justifiably sceptical about the claim made on the evidence led before him, but that the position is now different as shown by that letter dated 12 June 2002. I repeat that that is, however, only one of the four matters.
10.The next matter was the asserted failure to insure the premises. A good deal of evidence has been led before me, that was not led before his Honour and from both parties, on the hearing of this application. There is no good reason why much of it was not put before his Honour. In essence, what was put before me were letters that supported the applicant's claim that in the second half of calendar year 2001 he had had policies of insurance in respect of both buildings on the subject land, but that one of those had been cancelled by the insurer, who had not complied with the requirement of the Insurance Contracts Act 1984 whereby the insurer, wishing to exercise a right of cancellation, was required to give the insured notice in writing of that proposed cancellation.
11.The material placed before me supports the claim, made before his Honour but not supported by evidence before his Honour, that the respondent had written to the insurer complaining that the applicant had been using one of the two residential buildings to conduct a radio station. The respondent had suggested to the insurer that this might not be a risk covered by the policy of insurance. This correspondence ultimately led to the insurer informing the respondent that it intended to cancel that policy "as from its inception".
12.Whatever that last phrase meant, it does seem that a policy of insurance, probably in existence in September 2001, was as at the date of this hearing before myself described as "not being in existence" as from 4th July 2001.
13.At the end of the day though, the position is really not much better before me than it was before his Honour. His Honour had heard the assertion that it was the respondent's conduct which had led to the cancellation of the policy, and his Honour thought that that provided, when coupled with the failure to give notice to the applicant personally of the cancellation, what his Honour described as "the barest bones" of a defence to the complaint that the premises were not insured. I should explain that the applicant's claim was that, there having been a failure to notify him in person, the provisions of the Insurance Contracts Act 1984 had the effect that the policy continued in force. Accordingly, it was contended as at the date of the notice of default, the policy had continued in force and the applicant was not in default.
14.Much material was put before me, and at the end of the day I think Mr Hackett succeeds in demonstrating that the position is now no better now that I do have material which suggested there was a policy which was cancelled, and about which fact of cancellation the applicant did not receive any notice in writing. This is because, as Mr Hackett reminds us all, the agreements entered into between the applicant and respondent provided that the applicant gave to the respondent a power of attorney, such that notices to it as mortgagor were sufficient notice in any event. I was reminded that the point as to the provisions of the Insurance Contracts Act had been raised only during argument before his Honour, and accordingly perhaps insufficient time had been given to prepare a response to that point.
15.Mr Hackett's argument to me sounds one that will carry the day before this Court on the hearing of an appeal, and I think the position then on that matter is the same as it was before the Judge.
16.The third matter was the complained of failure to pay the amount of $6,390.72, described as a sum paid by the respondent on the applicant's behalf for repairs to the premises and rates, and which is now owing to the respondent. That matter was actually decided in the applicant's favour, as I read his Honour's judgment, in that his Honour described that as being the claim of the applicant with the "most credible support" of his differing defences to the notice of default.
17.In truth, of course, the applicant had had a very good defence as it turned out to the complaint of non‑payment of rates. I also think that in fact, as his Honour found, further examination on appeal, and examination if the matter were defended, would on the material before both his Honour and myself show that the conduct of the respondent demonstrated it had accepted that the applicant's debt owed to it - that is the amount outstanding of the loan - had been increased by that amount of $6,390.72. That was the applicant's case before his Honour, and before myself. That case is that that sum was added by the respondent to the outstanding loan, and had therefore never been one which the applicant was immediately required at any time to repay to the respondent.
18.I am satisfied from what was led before his Honour and before myself that it appears that the respondent, in its own accounting, has done that very thing, namely increased the overall loan outstanding by that sum. Accordingly, I think that just as his Honour found in the applicant's favour, so should I, and I should form the view that he has a good response to the complaint that he had failed to pay that amount to the respondent. It seems to me that before this Court on an appeal, and if defended, the applicant has good prospects of establishing that that sum was not immediately due and owing.
19.There remains the amount claimed for failure to pay arrears. The amount claimed was $2947.25 as at the date of the notice of default. It appears that nothing had been done to improve that position since the date of receipt of the notice of default. Instead, the applicant's response was that the sums claimed were calculated in error, they being the result of erroneously applying to him penalty rates and incorrect assumptions of default, and that he could demonstrate that the real position was that he was in fact ahead by an amount of some $690.63 in the payments he had made to the respondent.
20.The difficulty for the applicant before his Honour was that he did not really show in any material that he put before the Court why that was the case, other than by his own assertion to that general effect an affidavit. He complains before this Court that he had made such calculations in an earlier affidavit he had filed, and that his opponents have read that same affidavit before his Honour. What they had not done was annexed to the affidavit, when read by them, various annexures forming part of the affidavit, and which contained his calculations.
21.Accordingly, the applicant purported before me to annex that entire affidavit, together with those calculations; but consistent with the sorry history of this whole matter, actually failed to do so. I therefore have no calculations put before me by the applicant telling me how it is the case that on a proper calculation carried out by him, it can be demonstrated that he is not, or he was not, in the position of a person who had failed to pay arrears as of 21st December 2001 and in fact was a person who had overpaid the respondent. I am told that on appeal he will succeed in doing so, but of course that assumes that the Court of Appeal hearing this matter would allow him to lead that evidence. He has had a number of opportunities to do so, and has not.
22.In the result he did not demonstrate to his Honour why he should not have been found to have failed to comply with the notice of default alleging he was in arrears of $2947.25, and has not demonstrated that to this Court.
23.He also failed to demonstrate to his Honour that he did comply with the requirement to keep the premises insured, and his Honour was of the view that correspondence written in January of 2002 showed that the applicant was well aware that the premises were in truth not insured, at least as at the date of that letter.
24.The applicant undertook in that letter to insure the premises within the time required in the notice of default, but actually failed to do so. That matter was not challenged before his Honour. The first possibly effective insurance which was obtained took effect no earlier than the 8th of February 2002, outside the period of the notice of default.
25.That seems, once again, to be the position demonstrated by the material and arguments before me. It follows that in two regards, namely the failure to insure and the failure to pay arrears, his Honour found on the material before him that the applicant really had no real prospects of defending the claims based on those asserted defaults, and the position appears to be the same before me. This is despite the extensive further evidence placed before me.
26.In respect of two other matters, the failure to pay rates and the failure to pay the $6,390.72, his Honour found for the applicant on one, as do I, in the sense that I think that if allowed to appeal the matter and explain it all in full, and then to defend, he would have a real prospect of defending that claim; and I am satisfied on the material now placed before me but not before his Honour, that the same applies to the failure to pay rates.
27.I think the requirement to keep the premises insured is a significant one, and the failure to pay the sums promised to be repaid and owing when they fall due is also a significant matter. I was told from the Bar Table that between October 2001 and a date in April 2002 no payments were actually made in reduction of the outstanding loan balance but that instead on the day before the hearing before His Honour a lump sum of $3,000 was paid. The position now, I am told in an affidavit, is that an amount of $5,320.07 is said to be owing by the applicant.
28.It seems to me that the result of all this is that the applicant, on the material he puts before this Court, has really no good grounds of appeal in respect of the failure to pay arrears owing and thus to comply with that notice of default, or failure to insure the premises during the period required by the notice of default.
29.It is not clear to me at all today that the position with arrears is any better, and they seem to have increased by an amount of some $2,372.82 between 21 December of last year and today's date. Likewise, it is not entirely clear to me in the material led before me that the premises are in fact now insured as required. That means that on a successful appeal, followed by a hearing, the appellant would probably fail to defend successfully at least two of the notices of default.
30.That seems to me to be less than the good arguable case that I would have thought was required in respect of all four of the notices of default, or at least those which were significant matters. I repeat that I consider the failure to insure a significant matter, since that is critical to the protection by the respondent of its interest in the security for its loan. And, of course, it has the greatest interest in being repaid, on a regular basis, the moneys owing to it.
31.However, on two grounds there are arguable prospects or good arguable prospects, and I consider now the balance of convenience. Here I see the difficulty for the applicant as follows. He swears that he resides only part‑time in one of the premises and that the other is empty. In the one in which he resides part‑time, he swears, he uses it only for the purpose of a small office in which the clerical and administrative side of a radio station conducted by him is carried out, and that otherwise the property is unused.
32.The respondent makes the point that his Honour's order was merely for possession, and that even granting a stay of the order for vacant possession does not prevent the respondent selling the premises. Since the applicant does not live in the premises and does not significantly conduct his business from there, on his own affidavit evidence, and since the respondent could sell them in any event whether the applicant stayed there or not, I am not persuaded that the balance of convenience lies in favour of granting a stay.
33.I repeat that his Honour's order was an order that the plaintiff recovered possession of the property, and not in terms an order for sale. Accordingly, the application for a stay is dismissed.
MR LAURIE: I ask for costs.
MR HACKETT: I can't say anything, your Honour.
JERRARD JA: Yes. It's some time since I made an order for costs in the State jurisdiction. I gather there's no longer a taxing regime.
MR HACKETT: No, it's normally order costs to be assessed.
JERRARD JA: Yes.
MR HACKETT: I think in fact the rules provide if your Honour doesn't say that they are assessed but I'm happy for those words to be added.
34.JERRARD JA: Very well. I order that the applicant pay the respondent's costs of and incidental to this application, such costs to be assessed on the standard basis.
- Published Case Name:
Toll v Poinciana Co-Operative Housing Society Ltd
- Shortened Case Name:
Toll v Poinciana Co-Operative Housing Society Ltd
 QCA 216
21 Jun 2002
No Litigation History