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Tasmanian Bluefin Pty Ltd v Bald[2013] QDC 297

Tasmanian Bluefin Pty Ltd v Bald[2013] QDC 297

DISTRICT COURT OF QUEENSLAND

CITATION:

Tasmanian Bluefin Pty Ltd v Bald & Anor [2013] QDC 297

PARTIES:

TASMANIAN BLUEFIN PTY LTD
(ACN 07524753)

(plaintiff/applicant)

v

GRAHAM NORMAN BALD

(first defendant)

and

JO-ANNE MONTGOMERY

(second defendant)

FILE NO/S:

D136/2013

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

Maroochydore District Court

DELIVERED ON:

29 November 2013 (Reasons & Further Orders)

DELIVERED AT:

Maroochydore

HEARING DATE:

8 & 15 November 2013

JUDGE:

Long SC DCJ

ORDERS:

15/11/13

  1. That the plaintiff have judgment against the defendants for the amount of $80,950.67 including $10,135.17 interest and $3,315.50 costs.
  1. It is declared that the plaintiff holds an equitable charge over the vessel “Annandale”, Australian Ship Registration Official No. 855441.
  1. Otherwise the application for further orders is adjourned until the publication of formal reasons.

29/11/13

  1. The Vessel “Annandale”, Australian Ship Registration Official No. 855441 be sold.
  1. The Plaintiff be appointed to conduct the sale of the said Vessel and be appointed pursuant to s 99(7) of the Property Law Act 1974 to convey the Vessel upon the sale of the Vessel in accordance with these orders.
  1. In regard to the conduct of the said sale the Court directs as follows:-
  1. (a)
    Before selling the Vessel the Plaintiff give notice to the Defendants containing the information prescribed in Section 130(2) of the Personal Property Securities Act 2009 (Cth) (“the Act”) and attach to such notice a copy of the Orders made by this Court in respect of the Application filed on 1 November, 2013, which notice shall be deemed to be given to the Defendants by sending the notice to the Defendants by ordinary pre-paid post to the addresses at which they were served with the Claim in these proceedings.
  1. (b)
    The Plaintiff must act in the manner prescribed by Section 131 of the Act and as required of a secured party in respect of the sale of the Vessel.
  1. (c)
    The proceeds of sale of the Vessel must be applied in the order of application prescribed by Section 140(2) of the Act with the exception, but subject to any other or further direction of the Court, that the balance of the proceeds of sale after application of the amounts under Section 140(2)(a)-(e) shall be paid into Court for the Defendants.
  1. The plaintiff have liberty to apply.

CATCHWORDS:

PROCEDURE – DEFAULT OF PLEADINGS – Where applicant sought default judgment under UCPR 288 upon failure of defendant to file defence – whether any evidence required in support of the judgment claimed

EQUITY – EQUITABLE CHARGES AND LIENS –

The applicant claims against the defendants for unpaid instalment payments of the purchase price of a Vessel – whether the unpaid balance was secured by an equitable lien over the Vessel – whether declaratory relief appropriate

JUDGMENT – ENFORCEMENT – whether the judgment in respect of a debt should be enforced by the appointment of a receiver and/or sale of the Vessel under s 99(2) of the Property Law Act 1974, consequent upon declaration of an equitable interest in the Vessel – consideration of the conditions to be imposed, pursuant to s 99(2) of the Property Law Act 1974, as to the conduct of any such sale

Civil Proceedings Act 2011 (Qld), s 58

District Court of Queensland Act 1967, s 68(1)(a), s 69

Property Law Act 1974 (Qld), s 77A(1)(c), s 99(2)

Uniform Civil Procedure Rules 1999 (Qld), r 278, r 283, r 284, r 285, r 286, r 287, r 288

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at [581]-[582]

Crane Distribution Ltd v Brown [2011] QSC 90 at [11]

Hewitt v Court (1983) 149 CLR 639

Ibenewaka v Egbuna (1964) 1 WLR 219 at [224]-[225]

Watson Specialised Tooling Pty Ltd v Stevens [1991] 1 Qd R 85 at [93] – [94]

Worrell v Issitch [2001] 1 Qd R 570

COUNSEL:

M Frangos for the applicant

SOLICITORS:

Frangos Lawyers for the applicant

Introduction

  1. [2]
    In this matter and on 15 November 2013 the following orders were made:
  1. That the plaintiff have judgment against the defendants for the amount of $80,950.67 including $10,135.17 interest and $3,315.50 costs.
  1. It is declared that the plaintiff holds an equitable charge over the vessel “Annandale”, Australian Ship Registration Official No. 855441.
  1. Otherwise the application for further orders is adjourned until the publication of formal reasons.
  1. [3]
    The plaintiff (“applicant”) was given leave to make further written submissions by providing a proposed draft for an order for sale under s 99(2) of the Property Law Act 1974 (Qld), including as to the terms and conditions for such sale and any necessary further submission in justification of that draft. What follows are the reasons for both the orders made then and the further orders to be made on the publication of these reasons.
  1. [4]
    The applicant had applied for judgment in default of the filing of a notice of an intention to defend and defence, by the defendants. The application was expressly made under UCPR 288. This is because by claim filed on 3 September 2014, the plaintiff claimed against the defendants:

“

  1. The amount of $67,500 for monies due and payable pursuant to an agreement for sale of a vessel dated 14 April 2010;
  2. Interest at the rate of 12.5% per annum upon $67,500 from 28 April 2011 to 31 August 2013 in the amount of $19,741.44 and at the same rate on such monies from 1 September 2013 until judgment or earlier payment;
  3. A declaration that the plaintiff holds an equitable interest as chargee in the vessel ‘Annandale’ created by defendants in favour of the plaintiff by virtue of the said agreement for sale of a vessel;
  4. An order for sale of the said vessel by the plaintiff pursuant to Section 99(2) Property Law Act 1974; and
  5. The plaintiff’s costs of and incidental to this claim on an indemnity basis.”
  1. [5]
    UCPR 288 is contained in Division 2 of Part 1 of Chapter 9 of the UCPR and pursuant to UCPR 281, the premise of that division is that “a defendant in a proceeding started by claim has not filed a notice of intention to defend” within the time allowed for that under the rules. Pursuant to UCPR 282 a plaintiff applying for such judgment must prove service of the claim on the defendant in default.
  1. [6]
    In this case the defendant Graham Norman Bald was served on 18 September 2014 in South Australia and the defendant Joanne Montgomery was served on 10 September 2013 in New South Wales.[1]
  1. [7]
    As put by the applicant, in simple terms the substantive orders sought in the application are for:
  1. (a)
    A liquidated debt in the amount of $67,500 plus interest; and
  1. (b)
    A declaration that the plaintiff holds an equitable charge in respect of the vessel “Annandale” (Australian Ship Registration Official number 855411 – “the vessel”); and
  1. (c)
    An order for sale of the vessel pursuant to s 99(2) of the Property Law Act 1974 (“PLA”).

In addition, further orders are sought in order to facilitate the sale of that vessel and I will return to those further orders that are sought, later in these reasons.

Jurisdiction

  1. [8]
    The applicant’s primary claim is for debt and is within the jurisdiction of this court pursuant to s 68(1)(a) of the District Court of Queensland Act 1967 (“DCQA”). For that matter the same conclusion would apply to the stated claim for interest, which is a claim made pursuant to an agreement, rather than in reliance upon s 58 of the Civil Proceedings Act 2011 (“CPA”).[2]
  1. [9]
    Otherwise the claims made for the declaration and the order for sale of the vessel are properly to be seen as claims for relief for the purpose of execution of any judgment for the claim for the debt and interest and within the power of this court pursuant to s 69 of the DCQA. This is particularly because those orders are sought in circumstances where the court otherwise has jurisdiction in respect of the claimed debt and the orders are sought for the purposes of exercising that jurisdiction and, as noted, for the facilitation of the enforcement of that jurisdiction.
  1. [10]
    In particular it can be noted that s 69(2)(a) of the DCQA expressly allows for a declaration of the rights of the parties “in any proceedings in which jurisdiction is conferred” on the court. Further, and upon the premise that the court otherwise has jurisdiction in relation to the claimed debt, s 69(1)(a) allows for the granting of any relief or remedy within the powers and authorities conferred on the Supreme Court by an Act, for the purposes of exercising that jurisdiction.
  1. [11]
    More particularly in this case, it can otherwise be noted that s 99(2) of the PLA read with the definition of “Court’ in the schedule to that Act, empowers the Supreme Court to order a sale of property which is subject to an equitable charge,[3] upon the basis that s 77A(1)(c) of the PLA provides that  Part 7 of that Act (which includes s 99):
  1. “(c)
    Subject to any other Act, applies to any other mortgage whether of land or any other property.”;

and the dictionary in schedule 6 of the Act provides:

“‘Mortgage’ includes a charge on any property for securing money or money’s worth.”

  1. [12]
    Accordingly, this court has jurisdiction to make the orders that are sought.[4]  However the application, as would ordinarily be the case, is made on an ex parte basis and a question which arose is as to whether there is any necessity to go beyond the proof of service of the claim and the statement of claim and the contents of the pleadings so served.
  1. [13]
    In this regard the applicant referred to the observation of Fryberg J in Crane Distribution Ltd v Brown[5]:

“… Rule 288 requires judgment on the pleadings. Indeed I question whether it is appropriate in an application under that rule to file affidavits which address anything other than service of the claim [r 282], whether the defendant is in default [r 288(1)] and any other procedural matter relevant to the applicability of the rule. I am aware that this is sometimes done, but I have not found a case which considers the point. I refrain from deciding it in the absence of argument.”

Further and as noted in Watson Specialised Tooling Pty Ltd v Stevens,[6] by not entering a notice of intention to defend and defence, the defendants are taken to have admitted the claims made against them and here there is no need to assess any damages.

  1. [14]
    As has been noted above[7] the claim specifically sought specific sums in respect of the debt or liquidated demand and for an interest component associated to that claim. Relevantly to those aspects, the statement of claim pleaded:

“2. The plaintiff as vendor and the defendants as purchasers entered into a written sale agreement dated 14 April 2010 for the sale of the vessel known as ‘Annandale’ Australian Ship Registration Official No. 855441 and certain equipment (‘the vessel’) described in the said sale agreement whereby the plaintiff sold to the defendants the vessel for a purchase price of $525,000 plus an amount of GST of $52,500 totalling $577,500 (‘sale agreement’).

  1. The terms of the sale agreement were, inter alia:
  1. (a)
    The purchase price plus GST in the amount of $577,500 was payable by the defendants to the plaintiff as follows:-
  1. (i)
    $502,500 on or before 30 April 2010;
  1. (ii)
    $15,000 payable on 31 August 2010;
  1. (iii)
    $15,000 payable on 1 February 2011;
  1. (iv)
    $15,000 payable on 31 August 2011;
  1. (v)
    $15,000 payable on 28 February 2012; and
  1. (vi)
    $15,000 payable on 31 August 2012.

…

  1. (c)
    The property in possession and title to the vessel shall pass to the defendants upon payment of the sum of $502,500 subject to the payment of the remaining balance of $75,000.

…

  1. (e)
    Time shall be the essence of the sale agreement in all respects.
  1. (f)
    If the defendants default in payment of any monies due pursuant to the sale agreement or commit any breach of the sale agreement then:-
  1. (i)
    The whole of the balance purchase price and any other monies due under the sale agreement are immediately due and payable at the option of the plaintiff.
  1. (ii)
    Interest at the rate of 2% higher than the rate fixed under Section 2 of the Penalty Interest Rates Act 1983 (Victoria) upon monies due and payable by the defendants to the plaintiff shall be paid by the defendants on demand.
  1. (iii)
    The defendants shall pay all reasonable expenses incurred by the defendants as a result of any breach.
  1. (g)
    The sale agreement shall be construed and is to take effect in accordance with the laws of the State of Queensland and the parties submit to the jurisdiction of the courts of Queensland.
  1. (h)
    No variation or waiver of the sale agreement shall be effective unless in writing signed by each of the parties.
  1. (i)
    The defendants agree to grant a lien to the plaintiff over the vessel until payment is made in full.
  1. Pursuant to the sale agreement the plaintiff handed to the defendants all documentation required to register the vessel in the Maritime Safety Queensland Office and the Australian Shipping Registration Office on or about 25 May 2010 in exchange for the payment by the defendants to the plaintiff of $502,500 and the plaintiff gave possession of the vessel to the defendants at Mooloolaba Harbour.
  1. The amounts that had been paid by the defendants to the plaintiff under the sale agreement are as follows:-
  1. (a)
    on or about 25 May 2010 the amount of $502,500;
  1. (b)
    on or about 1 February 2011 the amount of $5,000; and
  1. (c)
    on or about 27 April 2011 the amount of $2,500.
  1. The defendants had defaulted under the sale agreement in the following respect:-
  1. (a)
    the amount of $67,500 being the balance of the total of the instalments, namely, $75,000 referred to in paragraph 3(a) of this statement of claim had not been paid to the plaintiff and remained due and payable.
  1. On or about 20 August 2013 the plaintiff by its solicitors’ letter demanded $67,500 and interest payable under the sale agreement but despite demand for payment the defendants have failed or refused to pay the amount of $67,500.
  1. The plaintiff claims the amount of $67,500 against the defendants.
  1. The plaintiff claims from the defendants interest on the amount of $67,500 at the rate in paragraph 3(a)(ii) of the statement of claim which is currently 10.5% under Section 2 of the Penalty Interest Rates Act 1993 (Victoria) plus 2% per annum, namely, 12.5% per annum in an amount of $19,741.44 as calculated below from 28 April 2011 to 31 August 2013 (854 days) and interest in the same rate from 1 September 2013 on the monies until judgment or earlier payment:

$67,500 x 12.5% x 854 days / 365 days = $19,741.44”

  1. [15]
    If those were the only claims of the applicant, the matter would fall under UCPR 283 and have been amenable to the power of the Registrar under that rule.[8]  UCPR 288 only applies if a plaintiff is not entitled to apply for judgment under UCPR 283, 284, 285 or 286. Leaving aside UCPR 288, each of those rules invest power in the Registrar to give default judgment, in respect of the separately specified types of claim and UCPR 287 has effect to extend those powers to any instance where there is only a combination of any of those types of claim, which is sought.
  1. [16]
    It can be noted that UCPR 283(10) provides that:

“If the court as constituted by a registrar is considering whether to give judgment, the registrar is not required to consider the merits of the plaintiff's claim against the defendant.”[9]

  1. [17]
    It can also be noted that although UCPR 283 is premised upon the filing of:

“a request for judgment for an amount not more than the amount claimed together with … if interest is claimed – interest calculated, to the date of judgment, at the rate specified in the claim or in a practice direction for the Civil Proceedings Act 2011 section 58 …”[10];

the rule proceeds to require some assessment of the interest component. This is because UCPR 283(4) provides:-

“For this rule, a debt or liquidated demand includes interest if the rate of interest is—

  1. (a)
    limited to the rate specified in, and calculated in accordance with, an agreement; or
  1. (b)
    not higher than the rate specified in a practice direction for the Civil Proceedings Act 2011, section 58.”

In addition and leaving aside those sub-rules that only apply if interest is claimed under s 58 of the Civil Proceedings Act 2011, because in this matter the claim is in respect of interest calculated in accordance with an agreement, it is only further necessary to note UCPR 283(9) which provides:-

“If the period for which interest is to be awarded is not specified in the statement of claim, interest is recoverable only from the date of the issue of the claim.” 

Declaratory Relief?

  1. [18]
    In addition to what has already been set out, the statement of claim further proceeds as follows:

“10. By virtue of the allegations in paragraph 3(c) and 3(i) of this statement of claim the plaintiff holds an equitable charge over the vessel for the amount of monies owing the plaintiff by the defendants under the sale agreement.

  1. The plaintiff seeks an order for sale of the vessel under s 99(2) of the Property Law Act 1974 (Qld).”
  1. [19]
    It is these further claims which necessitate the attention of a judicial officer of the court, pursuant to UCPR 288. As has been noted and in contrast to UCPR 283(1) and 286(5), there is in UCPR 288, no expressed dispensation with any need to consider the merits of the claim. Further the power to be exercised under UCPR 288(3) is discretionary and this is of particular importance in considering the claim for a declaration of an equitable interest in the vessel. This is because it is well recognised that relief in the nature of a declaration of a party’s rights, is an entirely discretionary matter and therefore not to be lightly granted, even if there be no opposition or even consent, before the court. In the judgment of the Privy Council in Ibeneweka v Egbuna[11] the Privy Council said:

“The general theme of judicial observations has been to the effect that declarations are not likely to be granted… nevertheless, anxious warnings of this character appear to their Lordships to be not so much annunciations of legal principle as administrative cautions issued by imminent and prudent judges to their, possibly more reckless, successors. After all, it is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making. Beyond that there is no legal restriction on the award of a declaration.”[12]

Further in Ainsworth v Criminal Justice Commission[13] the High Court observed:

“It is not accepted that superior courts have inherent power to give declaratory relief. It is a discretionary power which ‘[i]t is neither possible nor desirable to fetter… by laying down rules as to the manner of its exercise.’  However, it is confined by the considerations which mark out the boundaries of judicial power. Hence declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have a ‘real interest’ and relief will not be granted if the question ‘is purely hypothetical’, if relief is ‘claimed in relation to circumstances that [have] not occurred and might never happen’ or if ‘the court’s declaration will produce no foreseeable consequences for the parties’.”

  1. [20]
    Whilst it is apparent that the purpose of the declaration which is sought, is to ground relief for the applicant by way of realising its interest in the vessel, by way of sale of that asset, it is nevertheless necessary that the claim for declaratory relief be supported by sufficient evidence of the entitlement that calls for the making of the order sought.
  1. [21]
    In this case the applicant did seek to provide that by way of reading the affidavit of Gary Walter Heilman.[14]  Apart from providing some evidence relied upon for the purpose of further consequential relief sought in the application and to which I will return, a copy of the agreement relied upon in respect of the sale of the vessel was exhibited and for the reasons to follow, that served to support the claim for the declaration of equitable charge over the vessel.[15] 
  1. [22]
    As is set out in the statement of claim, the agreement in evidence contains:
  1. (a)
    Clauses setting out a specified instalment regime for payment of the balance of the purchase price of the vessel, in the total amount of $75,000, after the initial payment of $502,500[16];
  1. (b)
    A clause providing that:

“Property in possession and title to the vessel and equipment shall pass to the purchaser upon payment of the initial $502,500 and is subject to the payment of the remaining balance, as detailed in the contract addendum.”[17]; and

  1. (c)
    A clause expressly granting:

“The vendor a lien over the vessel until payment is made in full”.[18]

  1. [23]
    This is sufficient to establish an equitable charge over the vessel. As explained by Deane J in Hewitt v Court[19]:

“9. An equitable lien is a right against property which arises automatically by implication of equity to secure the discharge of an actual or potential indebtedness…. Though called a lien, it is, in truth, a form of equitable charge over the subject property ….in that it does not depend upon possession and may, in general, be enforced in the same way as any other equitable charge, namely, by sale in pursuance of court order or, where the lien is over a fund, by an order for payment thereout…. Equitable lien differs from traditional mortgage in that it does not transfer any title to the property and therefore cannot be enforced by foreclosure. While it arises by implication of some equitable doctrine applicable to the circumstances, its implication can be precluded or qualified by express or implied agreement to the parties…. It can exist over land or personalty or both.

  1. Generally speaking, the established examples of equitable lien are between parties in a contractual or quasi-contractual relationship. The best known are the liens which equity recognises as arising to secure the actual or potential rights of a vendor and purchaser under a contract for the sale of real estate to payment or the balance of purchase price (vendor’s lien) or to repayment of instalments of purchase price (purchaser’s lien)…. If, under such a contract, the property has passed and the whole or part of the purchase price remains unpaid, the vendor will, in the absence of express or implied agreement to the contrary, enjoy the benefit of an equitable lien over the land sold to secure the payment to him of the unpaid purchase price. If the property has not passed to the purchaser and the purchaser has paid the whole or part of the purchase price, the purchaser will, in the absence of express or implied agreement to the contrary, enjoy the benefit of an equitable lien over the subject land to secure the repayment to him of any part of the purchase price which may become repayable to him upon default by the vendor in the performance of the contract….
  1. …The word “lien” is used somewhat imprecisely in the phrase “equitable lien” to describe not a negative right of retention of some legal or equitable interest but what is essentially a positive right to obtain, in certain circumstances, an order for the sale of the subject property or for actual payment from the subject fund…
  1. …The basis of equitable lien between parties to a contract lies in an equitable doctrine that the circumstances are such that the subject property is bound by the contract so that a sale may be ordered not in performance of the contract but to secure the payment or repayment of money…
  1. …I identify what I consider to be the circumstances which are sufficient for the implication, independently of agreement, of an equitable lien between parties in a contractual relationship. Those circumstances have, to some extent, been indicated in what been said above. They are: (i) that there be an actual or potential indebtedness on the part of the party who is the owner of the property to the other party arising from a payment or promise of payment either of consideration in relation to the acquisition of the property or an expense incurred in relation to it….; (ii) that that property (or arguably property including that property: see Pollock, loc.cit.) be specifically identified and appropriated to the performance of the contract…; and (iii) that the relationship between the actual or potential indebtedness and the identified and appropriated property be such that the owner would be acting unconscientiously or unfairly if he were to dispose of the property (or, if it be appropriate, more than a particular portion thereof) to a stranger without the consent of the other party or without the actual or potential liability having been discharged. It may be that the above circumstances or tests, particularly (i), would be unduly restrictive if propounded as a statement of exclusion. As has been said however, they are formulated as a statement of what is sufficient rather than what is essential. Whether or not they exist or are satisfied in a particular case should, like most questions involved in the application of equitable doctrines, be determined by reference to the substance of the transaction rather than its form…”[20] (citations omitted)
  1. [24]
    Accordingly the applicant should have the declaration which is sought, in order to declare its interest in the vessel, for the purpose of facilitating the enforcement of its judgment for the debt including an appropriate award of interest.

Debt and Interest

  1. [25]
    Before considering the additional claims made in the application as to enforcement, it is necessary to return to the claim for the debt and interest.
  1. [26]
    An effect of UCPR 288(3) is to confirm that it remains a matter for the court as to what judgment may be given upon application under this rule, irrespective of what is claimed on the pleadings, on the proviso that the judgment is justified on the pleadings. In circumstances such as occur here and where part of the application, if it were not otherwise combined with other claims, could have been dealt with under UCPR 283, it is appropriate for the court to be cognisant of the provisions of UCPR 283.
  1. [27]
    Accordingly and in the application of that rule by a registrar and notwithstanding that sub rule (10) makes it clear that the registrar is not required to consider the merits of the plaintiff’s claim, the approach under sub rule (4) is to allow for interest to be included in the debt or liquidated demand, for which judgment may be given, on the basis set out. In the case of a request for the allowance of interest on the basis of an agreement (as is the case here), there is limitation to “the rate specified in and calculated in accordance with” the agreement relied upon. This would appear to necessarily require that there be evidence of the agreement and assessment that the calculation is in accordance with it. That would appear to follow notwithstanding sub rule (9), which only has effect to further limit the period for which interest may be awarded, to that commencing with the issue of the claim, in the event that no other period is specified in the statement of claim.
  1. [28]
    Whether that is necessary or not, on this application, the problem that arises for the applicant is that the agreement relied upon for the claim of interest is otherwise in evidence before the court and it is apparent that there are at least difficulties in reconciling the amount claimed, with the provisions of the agreement giving rise to the entitlement. This is because:
  1. (a)
    Whilst the rate which is sought to be applied is fixed by reference to the rate which appropriately applied under s 2 of the Penalty Interest Rates Act 1983 (Vic), at relevant times; and
  1. (b)
    The calculation is made upon the whole of the outstanding balance of $67,500 from 28 April 2011, which is the day after the last part payment of $2,500 was made; 

The applicant proceeds upon the asserted basis that:

“Interest under the sale agreement accrues automatically from the time of default without any notice, although the plaintiff is only claiming interest from 28 April 2011”.[21]

  1. [29]
    However, that position is at least not clear, from what are conceded to be poorly drafted clauses, which are expected to be read in conjunction. They are:

“6. Time shall be of the essence

6.1 Time shall be of the essence of this agreement in all respects.

7. Fault

7.1 If the Purchaser defaults in the payment of any moneys due pursuant to this Agreement or commits any breach of any provision of this Agreement, notwithstanding anything herein contained without prejudice to any other rights of the Vendor pursuant to this Agreement or at common law; 

  1. (a)
    The whole of the balance of the purchase price and any other moneys due to hereunder shall at the option of the Vendor become immediately due and payable;
  1. (b)
    Interest at the rate of 2% higher than the rate for the time being fixed under Section of the Penalty Interest Rates Act 1983 shall be paid by the Purchaser on demand to the Vendor together with all reasonable expenses incurred by the Vendor as a result of the breach.

….

Special conditions

  1. Notwithstanding clause 6 time shall be the essence of this Agreement provided that if either party defaults under this Agreement the other party shall not be entitled to exercise any of its rights arising out of the default including its right to sue for money then owing until it has served the party in default with a written notice specifying the default and its intention to exercise its rights under the default is remedied and the reasonable costs including solicitor own client legal costs occasioned by the default and any interest payable under the contract are all paid within 7 days of service of the notice and the party in default fails to comply with the notice.

…

  1. Notwithstanding the foregoing, nothing in this clause shall effect the vendor’s entitlement contained in sub-paragraph (b) of clause 7 which entitlement shall accrue automatically from the time of default without the necessity of giving notice.”
  1. [30]
    The payments under the contract were due and payable according to the schedule in the addendum.[22]  Clearly there were three payments of $15,000, each which were not payable until dates respectively after 28 April 2011, with the last being due on 31 August 2012. Whilst it is contended that there had earlier been default in respect of prior due payments, pursuant to clause 7(a) the Vendor was required to exercise an option as to the whole balance becoming immediately due and payable and there is no contention that this is what occurred. On the contrary, the contention is that demand for the balance and interest was made on or about 20 August 2013 and therefore well after the due date for the last payment.
  1. [31]
    It may be that the effect of the contractual clauses was to preserve an entitlement calculated by reference to the periodically outstanding account, as unsatisfied payments fell due, but that is not the basis upon which the request for judgment of this court is made.
  1. [32]
    On the basis of the pleading and in accordance with the Agreement, it would be appropriate to allow interest at the stipulated rate, for a period from the point at which the entire balance was due. That is from 1 September 2012 to the date of judgment on 15 November 2013, in an amount of $10,135.17.
  1. [33]
    Otherwise there is no difficulty with judgment being entered for the debt represented by the outstanding balance of $67,500 and costs should be allowed on the District Court scale in the sum of $3,315.50.

Enforcement

  1. [34]
    In these circumstances, where the applicant has established an entitlement to judgment for a debt and interest, which is secured by an equitable interest in the vessel, the power of the court to order the sale of the vessel pursuant to s 99(2) of the PLA, is engaged.[23] 
  1. [35]
    The exercise of that power is discretionary and may occur “on such terms… as [the court] thinks fit”. Originally, the applicant proposed that any such sale be facilitated by the appointment of a receiver. However, it does not appear that this would be necessary in order to create any authority to deal with the respondent’s interest in the property to be sold, as that can be created by the orders of the court, including as to the terms upon which the sale is to occur. Moreover, the involvement of a receiver is likely to be an expensive intervention and an otherwise unnecessary one, where what is postulated is the sale of a single chattel.[24] 
  1. [36]
    Otherwise, there is evidence before the court that the vessel remains berthed and secured at the Mooloolaba Harbour, by De Brett Seafood Pty Ltd, an entity which is related to the applicant and which has also, on 23 October 2013, obtained a judgment against the respondents, for an amount of $22,862.05, including interest and costs, in the Magistrates Court at Maroochydore and in respect of the costs of berthing and supplying fuel, bait, tackle and ice for the vessel. As it is understood, the vessel has remained there, unused, for some time.
  1. [37]
    Further and in addition to the inaction of the defendants in defending this claim, there is evidence from the process server, who served the claim on the defendant Jo-Anne Montgomery, that she asserted that the defendant, Bald, had “shot through to Plympton South Australia” and had left her with obligations, including a mortgage, in respect of a property in NSW and that whilst they were aware of the debt the subject of the claim “Graham Norman Bald would not do anything about it.” The defendant, Graham Norman Bald was subsequently served with the claim in Plympton Park in South Australia.[25]
  1. [38]
    In these circumstances, it is appropriate that the enforcement of the judgment of this court, including the recognition of the security interest by way of equitable charge over this vessel, be facilitated by the order for sale that has been ultimately sought. Sale by the holder of a security interest in property is within the parameters of s 99(2) of the PLA and specifically contemplated by UCPR 278(1)(b), subject to any directions as to the conduct of the sale. Moreover and as noted above,[26] a common law power to order sale is recognised in respect of equitable charges.
  1. [39]
    Sufficient authority to effect the sale may be achieved by the type of order made pursuant to s 99(7) of the PLA in Phillips v Hogg[27] and otherwise, an appropriate mechanism to ensure that all relevant interests are properly protected and for the distribution of the proceeds including as to the costs of sale, is by specifically adopting a methodology and some duties recognized by the Personal Property Securities Act 2009 (Cth) (“PPSA”), notwithstanding that this Act may not apply, by legislative force, to the type of security interest which has been the subject of the declaration in this case.[28]
  1. [40]
    That may be conveniently done by adopting the requirements of ss 130(2), 131 and 140(2) of the PPSA, with the exception of s 140(2)(f). The adoption of these provisions is desirable, not only to provide protection as to the obtaining of fair value on the sale of the chattel but to also cater for the prospect of any, presently unknown, other secured interests in the property and any issues of priority of interest, particularly as this court, pursuant to s 99(4) of the PLA, is not required, in directing the sale, to determine any such issue.
  1. [41]
    The exception by way of exclusion of s 140(2)(f) and inclusion of a direction that the balance of the proceeds of the sale be paid into court, for the respondents but subject to the further direction of the court, is to recognise that, on the evidence before the court, those proceeds may be subject to other enforcement proceedings, as available to the associated entity.

Further Orders

  1. [42]
    Accordingly, the further orders to those made on 15 November 2013, are:
  1. The Vessel “Annandale”, Australian Ship Registration Official No. 855441 be sold.
  1. The Plaintiff be appointed to conduct the sale of the said Vessel and be appointed pursuant to s 99(7) of the Property Law Act 1974 to convey the Vessel upon the sale of the Vessel in accordance with these orders.
  1. In regards to the conduct of the said sale the Court directs as follows:-
  1. (a)
    Before selling the Vessel the Plaintiff give notice to the Defendants containing the information prescribed in Section 130(2) of the Personal Property Securities Act 2009 (“the Act”) and attach to such notice a copy of the Orders made by this Court in respect of the Application filed on 1 November, 2013, which notice shall be deemed to be given to the Defendants by sending the notice to the Defendants by ordinary pre-paid post to the addresses at which they were served with the Claim in these proceedings.
  1. (b)
    The Plaintiff must act in the manner prescribed by Section 131 of the Act required of a secured party in respect of the sale of the Vessel.
  1. (c)
    The proceeds of sale of the Vessel must be applied in the order of application prescribed by Section 140(2) of the Act with the exception, but subject to any other or further direction of the Court, that the balance of the proceeds of sale after application of the amounts under Section 140(2)(a)-(e) shall be paid into Court for the Defendants.
  1. The plaintiff have liberty to apply.

Footnotes

[1]  See respectively, affidavits of R A Wilson and J McKeown, each filed on 1 November 2013.

[2]  Although that prospect is adverted to as an alternative in the application.

[3]  See Worrell v Issitch [2001] 1 Qd R 570; Phillips v Hogg [2011] QSC 390 at [13].

[4]  As will become apparent, other ties to this particular jurisdiction are to be found in the location of the vessel in Queensland and the agreement for the laws of Queensland to apply.

[5]  [2011] QSC 90 at [11].

[6]  [1991] 1 Qd R 85 at [93]-[94]; see also GMW Group Pty Ltd (receivers and managers appointed) (in liq) v Saadie [2012] QSC 140 at [25].

[7]  See [1] above.

[8]  UCPR 283(3).

[9]  As does UCPR 286(5), which is the other instance where the power of the Registrar to give such judgment will have final effect, as opposed to being followed by any assessment by the court.

[10]  See UCPR 283(2).

[11]  (1964) 1 WLR 219 at 224-5.

[12]  See also Ainsworth v CJC (1992) 175 CLR 564 at 581-2 and Macquarie Capital Advisors Ltd and Anor v BrisConnections Management Company Ltd [2009] QCA 272 at [25].

[13]  CJC (1992) 175 CLR 564 at 581-2.

[14]  Document 6: Filed 6 November 2013, on this application.

[15]  Exhibit GWH2. No difficulty arises under s 487 of the Duties Act 2001. This is because although this instrument relates to what may be regarded as a transfer of dutiable property and therefore a dutiable transaction, having regard to ss 8, 9 and 10 of that Act, the effect of ss 29 and 30 of the Duties Act 2001 is, on the evidence before the court, to exclude this transaction from being a dutiable transaction, accessible to transfer duty.

[16]  Exhibit GWH2; Cl 2.2 and 2.3 and addendum to contract.

[17]  Exhibit GWH2; Cl 3.2.

[18]  Exhibit GWH2; Special condition 2.

[19]  (1983) 149 CLR 639.

[20]  Ibid at [9]-[15].

[21]  Applicant’s Outline of Submissions at [20]

[22]  As set out in para 3 of the statement of claim; see para 11 above.

[23]  See Worrell v Issitch [2001] 1 Qd R 570 & Hanson Construction Materials Pty Ltd v Davey [2010] QCA 246 at [56]-[58].

[24]  See Consent to appointment to act as receivers filed by leave on 8 November 2013 and Ex 1, letter from Worrells. In the annotations to s 99 of the PLA in Property law and Practice Qld, Showerama Products Pty Ltd v Amtek Pty Ltd (unreported QSC, Shepherdson J, 23/5/96) is cited as authority for the need of the court in undefended applications, to “keep the interest of the mortgagor in sight” and particularly as to the effectiveness and expense of the proposed methodology of sale.

[25]  See affidavits of J McKeown & R A Wilson both filed 1/11/13.

[26]  See paragraph [22] above.

[27]  [2011] QSC 390.

[28]  see s 8(1)(b) and (c) of the PPSA.

Close

Editorial Notes

  • Published Case Name:

    Tasmanian Bluefin Pty Ltd v Graham Norman Bald and Jo-Anne Montgomery

  • Shortened Case Name:

    Tasmanian Bluefin Pty Ltd v Bald

  • MNC:

    [2013] QDC 297

  • Court:

    QDC

  • Judge(s):

    Long DCJ

  • Date:

    29 Nov 2013

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
3 citations
Jump To
Cite 1 - (1992) 175 CLR 564
Cite 2 - (1992) 175 CLR 564
Cite 3 - (1992) 175 CLR 564
Ashton v Dorante [2011] QSC 390
2 citations
Jump To
Cite 1 - [2011] QSC 390
Cite 2 - [2011] QSC 390
Crane Distribution Ltd v Brown [2011] QSC 90
2 citations
Jump To
Cite 1 - [2011] QSC 90
Cite 2 - [2011] QSC 90
GMW Group Pty Ltd (Receivers and Managers Appointed) (in liquidation) v Michael Saadie [2012] QSC 140
1 citation
Jump To
Cite 1 - [2012] QSC 140
Hanson Construction Materials Pty Ltd v Davey [2010] QCA 246
1 citation
Jump To
Cite 1 - [2010] QCA 246
Hewett v Court (1983) 149 CLR 639
3 citations
Jump To
Cite 1 - (1983) 149 CLR 639
Cite 2 - (1983) 149 CLR 639
Cite 3 - (1983) 149 CLR 639
Ibeneweka v Egbuna (1964) 1 WLR 219
2 citations
Jump To
Cite 1 - (1964) 1 WLR 219
Cite 2 - (1964) 1 WLR 219
Macquarie Capital Advisers Ltd v BrisConnections Management Company Ltd [2009] QCA 272
1 citation
Jump To
Cite 1 - [2009] QCA 272
Watson Specialised Tooling Pty Ltd v Stevens[1991] 1 Qd R 85; [1990] QSC 102
2 citations
Jump To
Cite 1 - [1991] 1 Qd R 85
Cite 2 - [1991] 1 Qd R 85
Worrell v Issitch[2001] 1 Qd R 570; [2000] QSC 146
3 citations
Jump To
Cite 1 - [2001] 1 Qd R 570
Cite 2 - [2001] 1 Qd R 570
Cite 3 - [2001] 1 Qd R 570

Cases Citing

Case NameFull CitationFrequency
Oxanda Child Care Pty Ltd v Preschool Services Australia Pty Ltd [2015] QDC 1263 citations
1

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