The Trustee of the Property of Paul Jason Uhrhane, A Bankrupt v Gunn
[2012] QCA 75
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- Unreported Judgment
- Appeal Determined (QCA)
- The Trustee of the Property of Paul Jason Uhrhane, A Bankrupt v Gunn[2012] QCA 75
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The Trustee of the Property of Paul Jason Uhrhane, A Bankrupt v Gunn[2012] QCA 75
The Trustee of the Property of Paul Jason Uhrhane, A Bankrupt v Gunn[2012] QCA 75
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Court of Appeal | |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | |
DELIVERED ON: | 30 March 2012 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 22 March 2012 |
JUDGES: | Muir, Fraser and White JJA Separate reasons for judgment of each member of the Court, each concurring as to the order made |
ORDER: | Appeal dismissed with costs. |
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PLEADING – DEFENCE AND COUNTERCLAIM – where the appellants made an admission in their original defence that a registered mortgage was granted in favour of the respondents – where the appellants subsequently filed an amended defence that challenged the validity of that mortgage – where the primary judge struck-out the amended defence for inconsistency with the admission in the original defence – whether the appellants’ original defence contained an admission that was inconsistent with their amended defence – whether the primary judge was correct in striking-out the amended defence Uniform Civil Procedure Rules 1999 (Qld), r 188 Wainohu v New South Wales (2011) 243 CLR 181; [2011] HCA 24, cited |
COUNSEL: | C D Coulsen for the appellants I Sweeney for the respondents |
SOLICITORS: | Patane Lawyers for the appellants Carswell & Company for the respondents |
[1] MUIR JA: I agree that the appeal should be dismissed with costs for the reasons given by Fraser JA.
[2] FRASER JA: A judge of the trial division ordered on the respondents’ application that the appellants’ amended defence filed on 11 July 2011 be struck-out unless within 14 days the appellants filed and served an application for leave to make the amendments.
[3] The main issue in the appellants’ appeal is whether the appellants’ original defence contained an admission that was inconsistent with their amended defence, so that they required leave to withdraw the admission under r 188 of UCPR.
The pleadings
[4] The respondents’ fourth further amended statement of claim alleged that: the Uhrhanes were the registered joint owners of certain real property (“the Property”); the respondents made various agreements to advance, and did advance, money to the Uhrhanes; and the Uhrhanes made some payments, after which they owed the respondents $176,154.98. For present purposes, the relevant allegations in the statement of claim are as follows:
“15.On 18 September 2008 the Debtors [meaning the Uhrhanes] provided a mortgage (“the Mortgage”) over the Property in favour of the Respondents [the respondents to this appeal] in consideration of the respondents continuing to provide financial accommodation pursuant to the Agreement.
16.The Mortgage provided inter alia:
By item 5
Description of debt or liability secured
All monies now or hereafter advanced to the Mortgagor by the Mortgagee on any account whatsoever and includes the total liability for monies advanced to third parties at the request of the Mortgagor and guaranteed by the Mortgagor.
17.The mortgage was registered on the Property on 20 November 2008 and given registered number 712059563.
18.In the premises the Mortgage secures an amount of … $176,154.98 in favour of the Respondents.”
[5] Other paragraphs pleaded that: the first appellant became Mr Uhrhane’s Trustee in Bankruptcy and Mr Uhrhane’s interest in the Property was transmitted to the first appellant; the second appellant became trustee of an insolvency agreement of Ms Uhrhane and entitled to the transfer of her interest in the Property; the Property was sold for an amount which left a surplus after payment of the first mortgagee’s costs and sale costs; and the surplus was paid into court pursuant to earlier orders. The respondents sought declarations that $176,154.98 was secured by a registered mortgage granted by Mr Uhrhane and Ms Uhrhane and other relief, including an order that the secured amount be paid from the monies paid into court.
[6] The appellants’ defence filed on 12 February 2010 admitted that the Uhrhanes were the joint registered owners of the Property. Paragraphs 2 to 10 of the defence: denied that there was any agreement between the respondents and the Uhrhanes for the respondents to lend money to the Uhrhanes; alleged that any agreement for the respondents to advance monies was made with a named company; denied that the Uhrhanes were indebted to the respondents; and denied or put in issue each of the allegations in the statement of claim pleaded in support of the claimed debt.
[7] The primary judge accepted the respondents’ submission that admissions were made in subsequent paragraphs of the defence which were inconsistent with the amended defence filed on 11 July 2011. The amendments are underlined in the following paragraphs of the amended defence:
“12.As to paragraph 15 of the Statement of Claim, the Applicants:
(a)admit that a mortgage dated 18 September 2008 was lodged over the Uhrhanes Property in favour of the Respondents (“the mortgage”); and
(b)otherwise deny that the mortgage was [sic] provided by the Uhrhanes was in consideration of the Respondents continuing to provide financial accommodation to the Uhrhanes as it is untrue and repeat and rely upon paragraphs 2 to 10 contained herein; and
(c) further say that the mortgage:
(i) does not meet the requirements of an instrument of mortgage, because it was not validly executed;
(ii) is not a mortgage;
(iii) is not an equitable mortgage.
Particulars
(A) The mortgage was not signed by the Uhrhanes or the First Respondent:
(1) in the presence of anyone that was not party to the instrument; or
(2) in the presence of the Witnessing Officer;
(B) The mortgage was not signed by the Second Respondent:
(1) On or about 18 September 2008, at a meeting between the Uhrhanes and the First Respondent at the Property, the First Respondent signed the Second Respondent's name on the mortgage.
13.The Applicants admit paragraphs 16 and 17 of the Statement of Claim.
14.The Applicants deny paragraph 18 of the Statement of Claim as alleged or at all, as it is untrue and repeat and rely upon paragraphs 2 to 10 12 contained herein.”
[8] As the appellants’ counsel acknowledged in argument in the appeal, the first “was” in paragraph 12(b) is a typographical error and should be disregarded. That is consistent with counsel’s submissions in the trial division that it was not in dispute that the appellants “provided or granted a mortgage” and that the only admission in paragraphs 15, 16 and 17 was “that the respondents provided a mortgage, the mortgage had that term, and that a mortgage was registered.”
Issues in the trial division
[9] The appellants’ counsel explained to the primary judge that the purpose of the amendments was to make a case that the “…mortgage wasn’t given because it wasn’t validly executed”[1], and that “…the mortgage is not effective because it wasn’t validly executed”,[2] that the Land Title Act 1994 “…has the effect that the mortgage is not validly executed”,[3] with the result that “…the mortgage can’t be effective at law, it can’t get the benefits of indefeasibility, because it can’t get the benefits of registration.”[4] In short, the object of the amendments was to invoke the fraud exception to indefeasibility of title in s 184(3)(b) of the Land Title Act 1994.
[10] Thus, paragraph 12(c)(i), read with reference to the particulars, was apparently intended to invoke the provisions of the Land Title Act 1994 concerning requirements for the registration of instruments under that Act. Section 153 provides that the Registrar may register an instrument only if it complies with that Act and appears on its face to be capable of registration. In that respect, particular (A)(1) was apparently intended to allege a breach of the requirement in s 162(c) that a person who witnesses an instrument executed by an individual must not be a party to the instrument. Particular (A)(2) was intended to allege a breach of the requirement in s 162(b) that a person who witnesses an instrument executed by an individual must have the individual execute the instrument in the presence of the person. Particular (B)(1) is in a different category. It is an allegation of forgery. (Perhaps it was intended to support the curious allegation in paragraph 12(c)(ii) that “the mortgage … is … not a mortgage”.)
[11] The respondents submitted to the primary judge that the amendments which attacked the mortgage on the grounds of forgery and fraud were inconsistent with the admission in paragraph 12 of the defence of the allegation in paragraph 15 of the statement of claim, that on 18 September 2008 the Uhrhanes “provided a mortgage … over the Property in favour of the Respondents…”, and the admission in paragraph 13 of the defence of the allegation in paragraph 17 of the statement of claim, that the mortgage was registered on 20 November 2008. The respondents also argued that the appellants made admissions in affidavits filed on behalf of the appellants in interlocutory applications. None of the various affidavits raised any question about the due execution or validity of the mortgage. An affidavit by Ms Uhrhane exhibited a copy of the mortgage and included the statement that after “…signing the mortgage, I never received an advance of funds under it.” Ms Uhrhane made other statements which were consistent with the original defence that the respondents had not advanced money to the Uhrhanes but had advanced funds to a different company.
[12] The appellants argued in the trial division that the original defence had not made any clear admission that the mortgage was properly executed and witnessed, and valid and enforceable. They argued that no such admission should be implied in the defence or in the affidavits filed on behalf of the appellants, so that leave was not required to make the amendments.
The primary judge’s reasons
[13] In an ex tempore judgment, the primary judge summarised the relevant pleadings and relevant affidavit evidence, and said:
“It seems to me that if it be the case that there was not strictly an admission on the pleadings, the way in which the proceedings have been conducted is such that the amendments should be disallowed.
I consider that the statement of claim did, in effect, assert that the mortgage was given, and it was implicit in the pleading of its registration that it was validly executed and, accordingly, complied with the requirements for execution contained in section 161 of the Land Title Act.
…
I consider that the conduct of the proceedings in that interlocutory phase does involve, for all intents and purposes, an admission that the mortgage was validly executed and validly registered.
…
I uphold the substance of the complaint raised by the applicants on today’s application. Had I not accepted that I would have been inclined to strike out the amendments because they seem to me to not be in a form which will enable the material fact, which is alleged in them concerning the circumstances in which the mortgage was signed to be properly pleaded to.”
[14] The primary judge dealt with other matters, and observed that if the appellants wished to pursue the allegations concerning execution of the mortgage then they should apply for leave to make the amendments, where they could explain why those amendments were not made sooner.
Consideration
[15] The appellants repeated the argument they had advanced in the trial division that their original defence had not admitted the due execution and validity of the mortgage. They argued that the only admission was that a mortgage had been lodged and registered in favour of the respondents and that the validity of the mortgage was always in issue.
[16] The appellants’ arguments are without substance. The original defence admitted the registered mortgage, subject only to the allegations in paragraphs 2 to 10 of that defence. Those paragraphs did not raise any issue about the execution of the mortgage, its formal validity, or the validity of its registration. No other paragraph of the defence raised any such issue. It is perfectly plain that the allegations in the amended paragraphs 12(c)(i) and (ii), that the mortgage was “not validly executed” and was “not a mortgage”, cannot stand with the admissions in paragraphs 12 and 13 of the original defence that the mortgage was provided by the Uhrhanes and registered over the Property in favour of the respondents.
[17] The appellants’ affidavits were consistent with the admission of the mortgage in their defence. In view of the clear admissions in the original defence, it is not necessary to discuss the appellants’ argument that the affidavits did not themselves require the appellants to seek leave to amend.
[18] There is no substance in the appellants’ argument that the primary judge failed to give sufficient reasons. The content of the duty of a judge to give reasons “…will vary according to the nature of the jurisdiction which the court is exercising and the particular matter the subject of the decision”.[5] In an interlocutory application concerning practice and procedure, and where the issues were clearly defined in the parties’ arguments, the primary judge’s reasons were plainly sufficient.
[19] Finally, the appellants complained that the primary judge erred in holding that the appellants were obliged to explain why they had not pleaded the substance of the amendment earlier. The primary judge’s remarks on that topic were unexceptional. Furthermore, they did not bear upon his Honour’s conclusion that the appellants required leave to amend.
Proposed order