Pioneer Investment (Aust) Pty Ltd v Saez
[2010] QDC 539
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Pioneer Investment (Aust) Pty Ltd v Saez[2010] QDC 539
Pioneer Investment (Aust) Pty Ltd v Saez[2010] QDC 539
[2010] QDC 539
DISTRICT COURT
CIVIL JURISDICTION
JUDGE ROBIN QC
No 2805 of 2007
PIONEER INVESTMENT (AUST) PTY LTD | Plaintiff |
and | |
ALEXANDER SAEZ | Defendant |
BRISBANE
DATE 19/08/2010
ORDER
CATCHWORDS District Court of Queensland Act 1967 s 68, s 69 Compromise of money claim by plaintiff mortgagee includes dismissal of counterclaim seeking removal of a caveat - plaintiff's registered mortgage had been released to permit refinancing - whether court should declare plaintiff had an equitable charge over the subject property, which defendant asserted achieved nothing - loan agreements purported to give security over "any land" - declaration made. |
HIS HONOUR: The parties are to be congratulated on resolving this dispute, although the resolution comes rather late in the day, the claim having been commenced in 2007.
Interest at a high rate has been accruing on the plaintiff's claim. It appears that the compromise the parties have reached involves an accommodation regarding the amount of interest which the plaintiff should receive.
The order the Court was invited to make by consent provides for judgment for the plaintiff in a round sum, inclusive of costs and interest, which falls short of the amount mentionedin the claim. It is the product of an amount of $42,504.82, which represented the shortfall from what was owing under a loan agreement supported by the security of a registered mortgage over land when arrangements were made for the defendant to "refinance", bringing in a new lender. There's been an assignment of the original lender's entitlements to the plaintiff company.
The mortgage security was a second mortgage over the defendant's land which was the subject of a first mortgage to family members. The plaintiff's contention is that the release of the mortgage to facilitate the refinancing did not release the debt. It has the support of clause 38 of the loan agreement in that regard. However, the defendant contended in his pleading that a broker who arranged the refinancing had provided an assurance, with which the original lender to him was associated, that the debt was regarded as discharged.
The only contentious matter for the Court today is whether a declaration ought be made over and above the judgment for a money sum that's entered and the dismissal of the counterclaim which sought removal of the caveat to the effect that," Pursuant to the terms of the loan agreement dated 15 February2006 between the plaintiff and the defendant, the plaintiff has an equitable charge over the property described as Lot 3on RP829086 County of Stanley, Parish of Bulimba."
...
HIS HONOUR: The defendant, represented by Mr Anderson, makes no submissions against the Court making the declaration beyond advancing the view that it achieves nothing given the dismissal of the counterclaim which seeks removal of the caveat, that the plaintiff has lodged against the title to the property. The suggestion is that the Court ought not exercise its discretion to make a declaration which doesn't achieve anything.
The property referred to in the declaration, which the Court has seen fit to make, is the same one which was subject to the mortgage released some years ago. The basis for that security interest being asserted is clause 5 of the loan agreement, a copy of which was made Exhibit 1 today; it provides that:
"The borrower, by execution of this agreement, hereby charges all freehold and leasehold interest in any land(s) (or any part thereof) which a borrower may now have or, during the currency of the loan term, may receive a benefit or acquire a loan or with others, jointly or separately, and the borrower further agrees that the lender may require execution by the borrower of such form of additional security, including consent and non-lapsing caveat or other caveat, floating charge, bill of sale or freehold mortgage containing same terms and conditions as in this agreement so far as they maybe applicable.
The lender shall now have the right to lodge a non-lapsing caveat by consent (hereby irrevocably given) over any real and/or personal property of the borrower whensoever and howsoever held, alone or with others, and the borrower hereby agrees and acknowledges that this agreement creates in favour of the lender a caveatable interest in respect of any real property of the borrower, howsoever held and wheresoever located in Queensland or any other Australian state.
The lender shall further have the irrevocable right to register a fixed and/or floating company charge over any and all assets of the borrower (corporation) howsoever held, and the costs of preparing, stamping, registering or perfecting title or registration are payable on demand or, if not paid shall form part of the moneys hereby secured. The borrower authorises irrevocably the lender, or its solicitors, to initial, amend, vary, alter any caveat, mortgage, deed of priority, privacy act form, bill of sale or charge to enable its proper presentation for stamping and registration in any government registration office in Australia or elsewhere."
I, and I think others, have over the years felt some unease atthe notion of charges given in that way over unspecified realty which may not even come under the ownership of thechargor until some future time.
I have been persuaded on previous occasions that such a charge is good in equity. Mr Taylor has confirmed that approach this morning by reference to Oversea-Chinese Banking Corporation Limited v. Becker [2003] QSC 301, in particular at paragraphs 5 and 6, the former of which sets out the relevant provision of the parties' agreement, the latter of which cites authority for the proposition that a charge given in such terms, if supported by consideration or given by deed, is valid and effects a general equitable charge over all of the chargor's property existing at the time of the charge.
That is as far as the plaintiff needs to go since the relevant property was the defendant's at the time the charge was created. The plaintiff faces no complication from Chesterman J's having gone on to state that "the charge does not apply to after acquired property".
It is a curiosity that the property is the one over which a legal mortgage was created that became the subject of a release, presumably to permit registration of a replacement legal mortgage in the circumstances mentioned. I don't think that affects the situation.
I am not persuaded that the Court is making a declaration without any effect. In the present circumstances, I think there is some value in the plaintiff having the positive declaration which it has been seeking all along in this proceeding rather than having to rely on an estoppel arising out of the dismissal of the counterclaim.
Mr Anderson raises no point about the Court's jurisdiction to make the declaration. I am comfortably satisfied that there is jurisdiction, either on the basis that section 69 of the District Court of Queensland Act authorises it, the money claim falling within section 68, or on the basis that the caveat and related issues have been raised without causing any difficulty or objection in the counterclaim.
As it happens, the Court's not asked to make any specific order or declaration about the caveat, although certain things may be inherent in the dismissal of the counterclaim.
The plaintiff's justified in seeking the declaration, in my opinion, and it’s being made.
Order as per initialled draft.