Bank of Queensland Limited v Stevens
[2013] QSC 169
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- Unreported Judgment
- Appeal Determined - Special Leave Refused (HCA)
- Bank of Queensland Limited v Stevens[2013] QSC 169
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Bank of Queensland Limited v Stevens[2013] QSC 169
Bank of Queensland Limited v Stevens[2013] QSC 169
SUPREME COURT OF QUEENSLAND
CITATION: | Bank of Queensland Limited v Stevens & Ors [2013] QSC 169 |
PARTIES: | BANK OF QUEENSLAND LTD |
FILE NO/S: | SC No 5058 of 2013 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 20 June 2013 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20 June 2013 |
JUDGE: | Atkinson J |
ORDER: |
a)Land described as Lot 28 on Registered Plan 77681, County of Stanley, Parish of Redcliffe, being the land situated at 82 Callaghan Road, Narangba in the State of Queensland; b)Land described as Lot 27 on Registered Plan 77681, County of Stanley, Parish of Redcliffe, being the land situated at 92 Callaghan Road, Narangba in the State of Queensland; and c)Land described as Lot 2 on Registered Plan 851006, County of Stanley, Parish of Redcliffe, being the land situated at 100 Callaghan Road, Narangba in the State of Queensland.
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CATCHWORDS: | MORTGAGES – MORTGAGEE’S REMEDIES – POSSESSION – PROCEEDINGS TO OBTAIN – where the applicant mortgagee sought to recover from the respondents vacant possession of the three properties pursuant to s 78(2)(c) of the Land Title Act 1994 (Qld) – where the properties were subject to a restraining order under the Criminal Proceeds Confiscation Act 2002 (Qld) – where the properties were occupied by a proposed purchaser which had not settled the contract of sale – where the respondents had previously refused or failed to deliver vacant possession of the properties – whether the applicant mortgagee is entitled to vacant possession Land Title Act 1994 (Qld), s 78(2)(c) Criminal Proceeds Confiscation Act 2002 (Qld) National Consumer Credit Protection Act 2009 (Cth) (National Credit Code), s 88 |
COUNSEL: | G Kee (sol) for the applicant P J Goodwin for the first respondent K E Broun (sol) for the second and third respondents |
SOLICITORS: | HWL Ebsworth Lawyers for the applicant A.W. Bale & Son Solicitors for the first respondent Defwom Group Pty Ltd for the second and third respondents |
- This is an application made by the Bank of Queensland Limited (the “bank”) pursuant to s 78(2)(c) of the Land Title Act 1994 (Qld) to recover from the first respondent, Brett Raymond Stevens, vacant possession of the following land:
(1)Land described as Lot 28 on Registered plan 77681, County of Stanley, Parish of Redcliffe, being the land situated at 82 Callaghan Road, Narangba in the State of Queensland;
(2)Land described as Lot 27 on registered plan 77681, County of Stanley, Parish of Redcliffe, being the land situated at 92 Callaghan Road, Narangba in the State of Queensland; and
(3)Land described as Lot 2 on registered plan 851006, County of Stanley, Parish of Redcliffe, being the land situated at 100 Callaghan Road, Narangba in the State of Queensland.
- The land collectively is known by the address 100 Callaghan Road, Narangba, and I shall refer to it as 100 Callaghan Road.
- The applicant bank also seeks an order pursuant to the same section that it recover from the second and third respondents vacant possession of 100 Callaghan Road.
- The second and third respondents are Defwom Group Proprietary Limited and Defwom Property Management Proprietary Limited. I shall refer to those two respondents collectively as Defwom.
- There can be no sensible argument against the bank being granted those orders. That would be so if this were an ordinary matter involving a defaulting mortgagor over land and remain so, notwithstanding the very curious history of this matter, which I should set out.
- The bank was unable to effect service on Mr Stevens, who apparently resides at 100 Callaghan Road, but does not live there while he is working. He apparently works for Defwom somewhere in Roma. His solicitor, Mr Bale, was not given instructions to accept service on behalf of Mr Stevens, and so on 18 June 2013 I ordered substituted service on Mr Stevens. The bank had already served the documents on Mr Stevens’ wife, who resides at the property, and had already given copies of the documents to Mr Bale. The substituted service was by, once again, emailing the documents to Mr Bale, who was ordered by me to email those to Mr Stevens at the email address at which he was regularly in contact with Mr Stevens.
- I was satisfied that if that was done, as it has been, these documents would come to the attention of Mr Stevens and, indeed, Mr Stevens is represented today before me. Defwom is represented before me by Ms Broun, a solicitor, who describes herself as corporate counsel for Defwom. She was formerly an employee of A.W. Bale.
- The circumstances in which the bank obtained an interest as mortgagee in the property occurred on 22 February 2006, when the bank entered into a home loan privileges package investment home loan agreement, by which the bank agreed to lend Mr Stevens the amount of $1,238,000. That is referred to in the affidavit filed on behalf of the bank as the first loan agreement.
- The first loan agreement included terms requiring Mr Stevens, who is the registered owner of the properties at 100 Callaghan Road, to make 359 monthly repayments of principal and interest of $7,922.96 each and a final repayment of $9,822.84. The bank was to take a first registered mortgage over the properties at 100 Callaghan Road as security. The purpose of the loan was for the refinance of existing debt. On 22 February 2006, Mr Stevens declared in writing that the credit to be provided to him by the bank under the first loan agreement was to be applied wholly or predominantly for business and/or investment purposes. A bank account numbered 20259546 in the name of Mr Stevens was established by the bank for the first loan agreement and the funds were advanced to him.
- On the same date, 22 February 2006, the bank as lender and Mr Stevens as borrower entered into another home loan privileges package investment home loan agreement pursuant to which the bank agreed to lend Mr Stevens the amount of $300,000. This is referred to in the affidavit filed on behalf of the bank as the second loan agreement. The terms of the second loan agreement included that Mr Stevens must make 359 monthly repayments of principal and interest in the sum of $1,919.94 each, and one final repayment of $2,382.29. The bank was to take a first registered mortgage over the 100 Callaghan Road properties. The purpose of the loan was to refinance an existing loan.
- Again, Mr Stevens declared in writing that the credit to be provided to him by the bank under the second loan agreement was to be applied wholly or predominantly for business and/or investment purposes. Another bank account, this time numbered 20259549, in the name of Mr Stevens was established by the bank for the second loan agreement and funds were advanced to him pursuant to it.
- A mortgage was granted by Mr Stevens to the bank over the properties described as 100 Callaghan Road. It was registered and allocated the number 709627798. There were two other properties also the subject of the mortgage, but they have, I am told, subsequently to the mortgage being entered into but prior to today, been sold, although the proceeds have not been sufficient to extinguish Mr Stevens’ indebtedness to the bank. It was an all moneys mortgage so that pursuant to it Mr Stevens secured payment to the bank of all money which he owed to the bank, or that he will or might owe the bank in the future.
- As at 15 December 2010, Mr Stevens was in default under the terms of the first loan agreement, the second loan agreement and the mortgage because he failed to make the monthly repayments of principal and interest required under the first loan agreement and the second loan agreement. This is, perhaps, unsurprising, given that a restraining order had been made in this Court under the Criminal Proceeds Confiscation Act 2002 restraining all of Mr Stevens’ property. An ex parte order was made on 30 January 2009, and an order made on notice to Mr Stevens of which the bank also had notice on 18 February 2009. That order restrained all of Mr Stevens’ property and included the five properties subject to the mortgage specifically listed.
- A default notice was issued by the bank’s solicitors to Mr Stevens on 15 December 2010 pursuant to s 88 of the National Credit Code requiring Mr Stevens to pay the arrears plus enforcement expenses within 31 days of service of the default notice upon him. He failed to pay the arrears described in the default notice within the time allowed or at all, and according to the affidavit filed by the bank has failed to make the monthly repayments of principal and interest required under the first loan agreement since 21 December 2010, and failed to make the monthly repayments of principal and interest required under the second loan agreement since 17 December 2010.
- There is no evidence before me on this application as to how he was able to make payments until that date given that all of his property was restrained by order of this Court. The affidavit from the bank shows that as at 3 June 2013, Mr Stevens remained in default of the first loan agreement, the second loan agreement and the mortgage.
- Under the first loan agreement, the amount of $1,396,751.87 is outstanding and under the second loan agreement, the amount of $390,770.65 is owed.
- Matters have been delayed by an application made by Mr Stevens to the financial ombudsman service on 31 December 2010 which required the bank to cease recovery action. An agreement was entered into to settle that dispute before the financial ombudsman service on 11 January 2012. The bank agreed with it, I have been told, notwithstanding its scepticism that Mr Stevens would be able to sell the properties in the way therein set out but the bank needed to conclude the matter before the financial ombudsman.
- The option which Mr Stevens agreed to undertake was to instruct a valuer to perform valuations of the properties at 100 Callaghan Road. If the combined valuation was insufficient to pay the full indebtedness to the bank under various debts Mr Stevens owed to the bank, the properties were to be marketed and sold by the bank as mortgagee in possession and the proceeds used to reduce the indebtedness. If the combined valuation of the properties at 100 Callaghan Road was sufficient – I should add if they were sold for that amount – to repay the full indebtedness plus any legal or other costs, Mr Stevens was to make an application to this Court to vary the restraining order made on 18 February 2009 in proceedings number 1014/09 to permit the properties collectively described as 100 Callaghan Road to be sold by him to Bohica Nominees Pty Ltd (“Bohica Nominees”) for a price not less than the combined valuation of the properties.
- The application was to be filed by no later than 22 December 2011 and the bank was immediately notified of the filing of the application and provided with copies of the documents. Mr Stevens agreed that if the Court had not determined the application by 30 June 2012, vacant possession of the properties was to be surrendered on 14 July 2012, to be sold then by the bank as mortgagee in possession if the loans remained in default. It further provided that if the application to the Supreme Court to vary the restraining order was successful, the bank would allow a period of six weeks from the date of the decision of the Court for settlement of the purchase by Bohica Nominees and if that did not occur, vacant possession must be given and if the application to the Supreme Court to vary the restraining order was unsuccessful, vacant possession was to be given.
- An application was made to the Supreme Court to vary the restraining order.
- The Court ordered, by consent, that Mr Stevens was permitted to sell the 100 Callaghan Road properties to Bohica Nominees for a sale price of not less than $2,230,000. I am unaware of whether the Court’s attention was drawn to the fact that the sole director and shareholder of Bohica Nominees was Mr Stevens’ wife, Katherine Duvall Stevens. An affidavit filed by her, which is in that matter and which has been tendered in this matter, does not inspire confidence that she would be able to settle the purchase and indeed the purchase did not settle as she was unable to obtain finance and I am informed that Bohica Nominees went into liquidation.
- On 14 June 2012, the bank’s lawyers issued a letter to Mr Stevens’ solicitors, A.W. Bale and Son, demanding vacant possession of the properties at 100 Callaghan Road be given by 28 June 2012. Then on 19 June 2012, Mr Stevens entered into a contract for the sale of those properties to Defwom. The sale contract is exhibited to the affidavit filed on behalf of the bank and is curious. The purchase price is said to be $2.2 million, payable in accordance with special condition 1. Special condition 1 provides that the purchase price would be paid 120 days from the contract date to the buyer. There is no provision at all for any deposit to be paid. Ms Kee, who appears as solicitor on behalf of the bank, informed the Court that she had never seen a contract for the sale of land which did not involve the payment of any deposit and it must be considered, therefore, that this is an unusual contract.
- The matter came before me on 30 July 2012 where I ordered, by consent, that Defwom be substituted for Bohica Nominees as the purchaser of the properties at 100 Callaghan Road. I am certain that my attention was not drawn to the unusual nature of the contract with Defwom. The Defwom sale contract did not settle and on 11 January 2013, the bank requested Defwom vacate the property at 100 Callaghan Road by 25 January 2013. One might postulate why Defwom was occupying the property since it was a purchaser which had not paid any deposit and had not settled the contract for the sale. I was informed on this hearing that Defwom has been occupying the property for some length of time without paying any rent to Mr Stevens, the owner of the property but is employing Mr Stevens for wages in its business, as I said, somewhere out near Roma.
- That, of course, raises a real suspicion that any remuneration or compensation that is being paid to Mr Stevens includes remuneration or compensation for Defwom’s occupation of his property, a matter of some concern to the Court given that that would, prima facie, be in breach of the restraining order– a matter, no doubt, which the State of Queensland will investigate further. Not only is Defwom occupying the property, apparently gratuitously, but it has filed an affidavit in which it says it will require 12 or 14 weeks to relocate from the property because of the business it is conducting on this property. In my view, if someone is occupying a property without paying any rent – a property which is subject to restraint of the Court – that person ought to be vacating immediately.
- As I said, on 11 January, Defwom was asked to vacate the premises. It informed the bank that it was still trying to settle the contract and, on 7 February 2013, it was informed by the bank of what would be required by the bank on settlement. Of course, settlement did not take place. Defwom, which had been unable to pay a deposit (or had not offered to pay a deposit) on the contract for the purchase of the land, was unable to raise finance.
- So the situation is that there is a mortgage over the properties at 100 Callaghan Road. The bank is owed a considerable amount of money. Each of the respondents has refused or failed to deliver vacant possession of the properties and continues to occupy them. Clearly, the bank is entitled to vacant possession of the land and I will make that order.
- The bank has also asked for the respondents to pay the applicant’s costs of and incidental to the application on an indemnity basis. The bank has been seeking vacant possession for some period of time in respect of each of the respondents and each of the respondents has no argument against vacant possession being given to the bank, and yet has failed to vacate the premises. In the circumstances, it is appropriate that the respondents pay the applicant’s costs of and incidental to the application on an indemnity basis. So I will make the order as per the draft which I will initial and place with the file.
- I am somewhat concerned from what I have seen today in this matter brought by the bank against Mr Stevens and Defwom, that the judges who are making orders in the originating application under the Criminal Proceeds Confiscation Act are not being properly informed about the nature of what has happened and that should not continue. This matter should be allocated now to the Supervised Case List to manage because it is a civil matter, it is complicated, and there have been many applications in it. It is the kind of matter that would normally go to the Supervised Case List in the civil jurisdiction. I will order in matter 1014/09 that the matter be referred to the Supervised Case List.