Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

National Australia Bank Limited v Dobbie

 

[2015] QSC 243

 

SUPREME COURT OF QUEENSLAND

  

CITATION:

National Australia Bank Limited  v Dobbie & Others [2015] QSC 243

PARTIES:

NATIONAL AUSTRALIA BANK LIMITED ABN 12 004 044 937

(applicant)

v

IAN WILLIAM DOBBIE

(first respondent)

and

JENNIFER KAYE DOBBIE

(second respondent)

and

NSI ACCOMMODATION GROUP PTY LTD ACN 600 764 958 AS TRUSTEE FOR THE NSI ACCOMMODATION GROUP TRUST

(third respondent)

and

ROBERT WILLIAM HUTSON AND RICHARD WILLIAM BUCKBY AS RECEIVERS AND MANAGERS OF THE MORTGAGED PROPERTY KNOWN AS 33 BALLOW STREET, AMITY IN THE STATE OF QUEENSLAND

(fourth respondent)

FILE NO:

5245 of 2015

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

14 July 2015 (ex tempore)

DELIVERED AT:

Brisbane

HEARING DATE:

14 July 2015

JUDGE:

Daubney J

ORDERS:

  1. The Applicant recover possession of the land contained in Title Reference 50070262, being Lot 516 on Crown Plan A33912, County of Stanley, Parish of Stradbroke and located at 2 Millers Lane, Amity in the State of Queensland (2 Millers Lane).
  2. The First and Second Respondents deliver up possession of 2 Millers Lane to the Applicant by no later than 4:00pm on 21 July 2015.
  3. The Applicant recover possession of the land contained in Title Reference 50152648, being Lot 51 on Registered Plan 905457, County of Stanley, Parish of Stradbroke and located at 33 Ballow Street, Amity in the State of Queensland (33 Ballow Street).
  4. The First and Second and Third Respondents deliver up possession of 33 Ballow Street to the Applicant by no later than 14 October 2015.
  5. The First and Second Respondents pay the Applicant’s costs of the application for substituted service heard before Boddice J on 24 June 2015.
  6. Subject to Order 5:
    1. The First and Second Respondents otherwise pay one half of the Applicant’s costs of the proceeding; and
    2. The Third Respondent pay on half of the Applicant’s costs of the proceeding.

CATCHWORDS:

MORTGAGES – MORTGAGEE’S REMEDIES – POSSESSION – GENERALLY – where the applicant is the Mortgagee of two properties –where the first respondent and second respondent are the registered proprietors of the first property – where the third respondent company is the lessee of the first property – where the fourth respondents were the appointed receivers and managers of the first property – where the first respondent is the registered proprietor of the second property – where the applicant served a Default Notice on the first respondent and second respondent in respect of a Loan Agreement secured by mortgages of the first property and second property – where the applicant was not notified of the lease being registered on the first property – whether the applicant can recover possession of the first property from the first and/or second and/or third respondents – whether the applicant can recover possession of the second property from the first respondent

Land Titles Act 1994, s 66

Osaka Enterprises Pty Ltd v Globe International Ltd [2011] QSC 171

Commonwealth Bank of Australia v Baranyay [1993] 1 VR 589

COUNSEL:

G Coveney for the applicant

No appearance for the first respondent

The second respondent appeared in person

E Kepper appearing on behalf of third respondent as Sole Director

No appearance for the Fourth Respondent

SOLICITORS:

DibbsBarker for the Applicant

  1. This is an application for orders for possession by the applicant mortgagee of properties situated at 33 Ballow Street and 2 Millers Lane, Stradbroke Island.  The first respondent, Ian William Dobbie, is the registered proprietor of the Millers Lane property.  The first and second respondents, Ian William Dobbie and Jennifer Kaye Dobbie, are the registered proprietors of the Ballow Street property.  The second respondent has appeared in person.  The first respondent has not appeared despite, I am satisfied, having been given notice of today’s application.  I was informed by the second respondent, who is the wife of the first respondent, that the first respondent is aware of the fact that today’s application is proceeding. 
  2. The third respondent is a company which was represented today by its sole director.  The third respondent company is the lessee of the Ballow Street property.  I will describe the circumstances of that lease shortly. 
  3. The fourth respondents are the receivers and managers of the Ballow Street property, they having been appointed in that capacity by the applicant bank under the terms of the mortgage.  The fourth respondents have not appeared on today’s application. 
  4. The applicant bank holds mortgages over each of the properties.  Those mortgages were registered on the 22nd of July 2008, and secure advances that were made by the bank under a facility agreement entered into in May 2008, and then subsequently, moneys advanced under a loan agreement entered into between the first and second respondents and the bank on 9 May 2013.  The first and second respondents fell into arrears in respect of the moneys they owed the applicant bank.  Notices of default were served on the first and second respondents.  The defaults have not been remedied.
  5. As I have already noted, the fourth respondents were appointed as receivers and managers of the Ballow Street property.  That occurred on about the 9th of February 2015.  The material indicates that there has been some “to and fro” with respect to the bank’s efforts to take possession of the properties.  It is unnecessary for present purposes to go into the details of those transactions.  It is sufficient to note that the bank today wishes to obtain orders for possession in respect of each of the two properties. 
  6. So far as the Millers Lane property is concerned, no material has been put on either by the first respondent as registered proprietor personally or on his behalf by the second respondent to indicate that there is any reason why the bank ought not have the order for possession of that property to which it is clearly entitled.  Indeed, the second respondent informed me that there is no opposition to an order for possession being made in respect of the Millers Lane property. 
  7. The real argument for today’s purposes concerned the Ballow Street property.  As I have mentioned, that property is also the subject of a lease granted by the first and second respondents to the third respondent, NSI Accommodation Group Pty Ltd.  That lease is dated the 7th of October 2014, and is for an initial term of three years, commencing on the 8th of October 2014, with two three year options for renewal.  The lease was registered on the 16th of October 2014.
  8. Mr Kepper, the director of the third respondent, opposes an order for possession being made, relying on the fact that he was granted a lease of the property by the first and second respondents and that this lease was then registered.  The difficulty for the third respondent, however, is that whilst the lease may be perfectly enforceable as between the third respondent and the first and second respondents respectively, it is simply not valid as against the applicant bank. 
  9. It was not in issue before me that the bank’s consent to the grant of the lease was not obtained before the lease was registered. 
  10. Section 66 of the Land Titles Act relevantly provides:

“A lease…executed after registration of a mortgage of a lot is valid against the mortgagee only if the mortgagee consents to the lease…before its registration.”

  1. The impact of section 66 of the Land Titles Act was described by Professor Duncan in “Commercial Leases in Australia” (Fifth edition) at paragraph 15.10 as follows:

“The failure to gain consent does not directly affect the validity of the lease as between lessor and lessee and other parties apart from the mortgagee.  It merely means that the lease is not binding as against the mortgagee.”

  1. See also to similar effect the observations made by Martin J in the context of a variation to a lease in Osaka Enterprises Pty Ltd v Globe International Ltd [2011] QSC 171 at [22]. 
  2. What this means, as I have said, is that whilst the lease may have been a binding legal document as between the third respondent and the first and second respondents respectively, the lease is not valid as against the applicant bank.  And the effect of section 66 is that the existence of this lease cannot be relied on to prevent the bank from exercising its rights to possession of the property under its registered mortgage.
  3. A further argument was advanced by Mr Kepper, particularly in reliance on a letter dated 10 March 2015 from the solicitors for the receivers of the Ballow Street property.  As I have noted, these receivers were appointed by the bank under the terms of the mortgage in February this year.  It is trite to note that the receivers are the agents for the mortgagors and not the mortgagee.  Be that as it may, it is quite clear on the face of the letter that it was written on behalf of the receivers and included, amongst other things, a demand for payment of rent said to be owing under the lease.
  4. Whilst not put in these technical terms, the gist of the argument advanced on behalf of the third respondent was to the effect that the bank ought be estopped from pursuing its right to possession of the Ballow Street property, particularly as a consequence of the explicit acknowledgement by the receivers of the existence of the lease.  If not cast as an estoppel, then the argument may be seen as an assertion that the bank had, in effect, acquiesced to the lease and the terms of the lease granted by the first and second respondents to the third respondent.
  5. A not dissimilar argument was considered by Hayne J in Commonwealth Bank of Australia v Baranyay [1993] 1 VR 589.  In that case, the party against which possession was sought contended that, on the facts of the transactions and dealings between the parties then before his Honour, the bank in that case was estopped from contending that it had not consented to the lease.  Indeed, in that case, the lessee had paid rent to the receiver and manager in question, and the amount of the rent had been renegotiated.  It was further argued in that case that the fact that the receiver and manager reported on his activities to the bank from time to time should lead to an inference that the bank knew of the receipt of the rent and of the increase in its amount.  Even accepting all of that, Hayne J held at 600 that he considered that: 

“…it is clear that the bare fact of receipt by a receiver of rent (which in the end is all that is shown in the present case) does not create any tenancy by estoppel as against the mortgagee.” 

  1. His Honour went on to find that there had been no other conduct of the bank that estopped it from contending that it had not given consent to the lease.  He held, for example, that there was no conduct on the part of the bank which would constitute any representation to the lessee or any encouragement to the lessee to form any belief that the bank had consented to the tenancy.  His Honour continued:

“Even accepting that the bank knew that the premises were occupied by a tenant and knew the terms upon which the tenant purported to occupy the premises, I consider that the bank has done nothing which would lead to the conclusion that the bank should be estopped from maintaining the submission which it now does.”

  1. The same considerations, it seems to me, apply in the present case.  At the highest what has happened here is that receivers and managers, who are the agents for the first and second respondents, have demanded rent.  None of that, in my view, gives rise to any sort of estoppel against the bank, nor is there any other basis for concluding that the bank consented to the lease at any time before or after the registration of the lease.  In those circumstances, section 66 prevails and the consequence is that the bank is not prevented from obtaining an order for possession in respect of the Ballow Street property. 
  2. I will hear the parties as to the appropriate forms of order.

 

Close

Editorial Notes

  • Published Case Name:

    National Australia Bank Limited v Dobbie & Ors

  • Shortened Case Name:

    National Australia Bank Limited v Dobbie

  • MNC:

    [2015] QSC 243

  • Court:

    QSC

  • Judge(s):

    Daubney J

  • Date:

    14 Jul 2015

Litigation History

No Litigation History

Appeal Status

No Status