- Unreported Judgment
COURT OF APPEAL
Appeal No 2766 of 2011
SC No 3666 of 2008
LAURENCE JOHN QUARESMINIAppellant
PERPETUAL TRUSTEE COMPANY LIMITEDFirst Respondent
CHALLENGER MANAGED INVESTMENTS LIMITEDSecond Respondent
EX TEMPORE JUDGMENT
WHITE JA: This is an application by the defendants for a stay of the judgment made in the Trial Division on 29 March 2011. The respondents, who were the plaintiffs in the original proceedings, lent funds to the first and second defendants in 2004 in the vicinity of $800,000. That loan was renewed in 2005 for a period of five years and was to mature on 1 July 2010.
The arrangement between the parties was that the loan was secured by mortgages against a number of parcels of land in Boyland Avenue, Coopers Plains, from which the defendants - and I refer now to the second defendant, particularly, operated diverse businesses which seems to have included a great deal of heavy machinery and the stockpiling of various materials. There may be other allied businesses associated with that land as well.
The mortgages which secured the loan are dated 23 July 2004 and, if I say they are in the usual form, that is not to minimise the particular aspects of those mortgages to which I will return in a moment.
The loan was an interest only loan. From time to time the defendants were in default under the loan agreement and from time to time the arrears would be caught up – or, almost caught up, and it appears that there was regular communication between the defendants or one of them and the lenders about the arrears.
On 12 July 2007 the respondents issued default notices pursuant to s 84 of the Property Law Act, notifying their intention to exercise the power of sale because the interest repayments were not made. The default was not remedied within the 30 days of the notice.
On 22 April 2008 the respondents commenced proceedings seeking recovery of possession of the land at Boyland Avenue, Coopers Plains.
Paragraph 8 of the statement of claim identified that the default, as at 17 July, was a failure to pay an outstanding amount of interest in the sum of $41,987.93 and paragraph 10 pleads that the first and second defendants, notwithstanding the notices, “have not paid the amounts demanded and remain in default under the loan mortgage and remain in possession of the land.”
Thereafter, the material reveals, payments were again made, sometimes in quite substantial sums, to catch up; sometimes cheques were dishonoured and, again, payments caught up. The material reveals a continuing representation by the second defendant that he was seeking to refinance the loan and the respondents seemed content enough to allow him to attempt to do so. There is no material before the Court to suggest that he had any reason for optimism in making those representations and there is certainly nothing in the material to suggest that he was likely to be successful.
After some earlier indication that it would hold off proceeding to judgment, on 21 September 2009 the respondents obtained default judgment in the Supreme Court for the possession of the subject land. The defendants had not filed any defence. There was no application to set aside that default judgment. Mr Thompson, who appears on behalf of the applicant today has submitted, perhaps correctly, that there was no basis for seeking to set aside the regularly entered judgment because, at the time judgment was entered, the defendants were, indeed, in default in the manner indicated.
Subsequently, the outstanding amounts due were paid by the defendants to satisfy the quantum of the default judgment. The respondents had indicated to the defendants that a warrant of execution would be sought as a consequence of the judgment. It seems to be uncontentious that it occurred after the acceptance of the payments then due under the mortgage. The respondents' solicitors indicated to the defendants by letter that the acceptance of those payments was not to be regarded as a waiver of the defendants' default under the mortgage and did not constitute any waiver of their rights to recover possession of the secured properties.
An enforcement warrant was issued out of the Supreme Court on 30 October 2009. Again, communication occurred over the ensuing year between the respondents and the defendants and the second defendant remained substantially in possession of the properties, presumably carrying on his business from them.
On 29 October 2010 the warrant was renewed because, by virtue of s 92 of the Supreme Court of Queensland Act 1991, an enforcement warrant only has life of 12 months.
The warrant was executed on 10 January 2010 and the respondents obtained possession of three of the lots in Boyland Avenue with the assistance of the usual Court officers and police. The fact of possession is deposed to by relevant affidavits before the Court.
The defendants then sought orders in the Supreme Court that the enforcement warrant be set aside, either as a originally issued in October 2009 and, or, when renewed on the 29 October 2010.
The matter came on before the Chief Justice on the 29 March 2011. At the same time the respondents brought an application seeking a declaration that second defendant was not entitled to enter upon the subject land of which they were in possession and an injunction to restrain him or his employees or anyone acting through him from entering or occupying the land.
The Chief Justice made orders that the second defendant's application to set aside the enforcement warrant be dismissed. He further made orders that restrained the second defendant from entering or occupying or using the subject land and made an order consistent with the application made by the respondents to remove all his personal chattels from those lands and an order for costs.
It is from those orders that the defendants appeal and, today, I have heard an application to stay the orders made.
Now, there is some difficulty with what is actually sought in so far as the staying of the dismissal of an application to set aside an enforcement warrant does not seem, on its face, to take the matter very far at all. It might appear that this is also an appeal from the further order of his Honour about the keeping off the land. I will put to one side these difficulties.
The grounds of appeal in the notice of appeal are that the Chief Justice erred in not finding that the respondents were not entitled to obtain an enforcement warrant or its renewal or not finding that the second defendant was entitled to an order setting aside the enforcement warrant. They challenge the orders for costs.
At the heart of the application dealing with the merits of the appeal is this contention that it is - I hesitate to say, contrary to law because that seems rather broad, but that is the basis upon which Mr Thompson has couched his arguments - that it is contrary to law for the respondents to have obtained a warrant of execution on the basis of a default judgment, since the underlying debt in respect of which it was granted had been satisfied.
That is the short point to be argued on appeal. The Chief Justice expressed difficulty with an argument that would seek to set aside an enforcement warrant which had been entirely spent. That was the case on 10 January 2011 when the respondents went into possession of the properties. I, too, have some difficulty with the nature of the relief that is sought. The Chief Justice held that the warrant was validly issued upon a regularly entered judgment in default and it has not been set aside. While the judgment stood the enforcement warrant could be issued. There was no application to set it aside with the result that it stood until it was executed.
Mr Hay for the respondents contends that they were entitled to be in possession of the land by virtue of the terms of the mortgage because there was an event of default. There has been an event of default in so far as the principal due has not been paid since 1 July 2010, the maturity date for the loan. Under the mortgage the respondents may exercise their powers in those circumstances, they have the same powers as a receiver and can take possession of the mortgaged land.
It is a nice point as to whether they might stay in possession if it were found that in some way they were not entitled to use the Court's processes by way of an enforcement warrant rather than through the ordinary processes that would involve a receiver being appointed.
That brings me to the second point, that is, the utility of a stay. There is no dispute between Mr Hay and Mr Thompson that the principles to be applied on application for a stay pending appeal. Mr Thompson prefers the articulation in Alexander and Others v Cambridge Credit Corporation Limited (Receivers Appointed) and Another (1985) 2 NSWLR 685, particularly at 695. Mr Hay has drawn attention to the judgment in this Court in Cook’s Construction Pty Ltd Proprietary Limited v Stork Food Systems Australasia Pty Ltd  2 Qd R 453 at paragraph 12, per Keane JA, as his Honour then was.
Because it is more concise in Cook I will refer to it but Justice Keane refers to Alexander v Cambridge Credit and there is no difference between the fundamental principles.
His Honour said, "It is not necessary for an applicant for a stay pending appeal to show 'special exceptional circumstances' which warrant the grant of the stay. Nevertheless, it will not be appropriate to grant a stay unless a sufficient basis is shown to outweigh the considerations that judgments of the Trial Division should not be treated as merely provisional, and that a successful party in litigation is entitled to the fruits of its judgment. Generally speaking, courts should not be disposed to delay the enforcement of court orders. The fundamental justification for staying judicial orders pending an appeal is to ensure that the orders which might ultimately be made by the courts are fully effective: the power to grant a stay should not be exercised merely because immediate compliance with orders of the court is inconvenient for the party which has been unsuccessful in the litigation."
Mr Quaresmini has sworn a number of affidavits in support of the application for the stay in which he contends that his business and those that he employs will be severely impeded should he not be permitted to re-enter his property and continue to carry on his business. He has been out of possession since 10 January although I understand that it is possible that, in fact, contrary to the order, he may well have been accessing the land. He speaks of the difficulty of relocating all his equipment and the stockpile of, for example, shale which he has on the land and moving his semi-trailers. He deposes to difficulty in finding alternative places to store his property.
Through his counsel he has, belatedly, offered an undertaking as to damages. On his own affidavit he seems to be a person of considerable means. He does not offer to make any payments which are outstanding under the loan but Mr Thompson contends that that is not the point at issue here.
The fact that the respondents are entitled to be in possession of the land, albeit on a different basis, and the fact that the dealings between these parties in relation to the matters in contest between them have extended now over several years inclines me to the view that there would be little utility, if any, in granting the stay now sought by the second defendant.
The matter could come on for hearing soon and I understand from Mr Thompson that his client is anxious to have the appeal and, indeed, undertakes to be ready for an appeal as early as the Court can offer dates. The Registrar of Appeals has indicated that there is time available on 20 April.
If that date is not taken up then it might be some little time before an appeal could be heard because the dates are all allocated now for a couple of months. That would require an index for the appeal record to be filed by Friday of this week and the appeal books to be prepared, perhaps by Wednesday or Friday of next week.
WHITE JA: The application for a stay is dismissed.
WHITE JA: I think in the circumstances, I am prepared to reserve the costs of the application of the stay to the Court hearing the appeal. And I will direct that the parties settle an index to the appeal record by Friday 8 April, and obtain the direction from the Registrar of Appeals as to the date for lodging the appeal book and the outlines of argument.
- Published Case Name:
Quaresmini v Perpetual Trustee Co Ltd & Anor
- Shortened Case Name:
Quaresmini v Perpetual Trustee Co Ltd
 QCA 61
05 Apr 2011
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|QCA Interlocutory Judgment|| QCA 61||05 Apr 2011||-|