Today, I am presenting a talk to a Retail Leasing Seminar about "Special Conditions".
The paper will be available from www.legalwiseseminars.com.au in due course.
W G Stark
Hayden Starke Chambers
Wednesday, 25 March 2015
Tuesday, 3 March 2015
When is electronic conveyancing going to happen in Victoria?
Electronic (or e)-conveyancing is the process for settling,
stamping and lodging property transactions electronically.
In effect, the parties are no longer required to attend a settlement physically; they will just attend electronically! They no longer have to hand over cheques, and receive Certificates of Title. Payment is made electronically, and the electronic title is transferred with the press of a button.
There are now national e-conveyancing laws and "model participation rules".
The rules set out protocols for:
As mentioned in previous blogs (25 Aug 2014; 1 Oct 2014; 6 Nov 2014; and 17 Dec 2014), new verification of identity requirements are being introduced progressively in each state. These requirements include production of appropriate forms of identification of potential borrowers, as a means of avoiding fraud.
As a concession to Luddites, it should be noted that the paper conveyancing system will continue to be available for the time being. It will continue to be used where the representative of one or other party is not a PEXA subscriber.
In other words, PEXA is not (yet) compulsory.
However, as the various banks are now pushing forward with it, this may change!
In effect, the parties are no longer required to attend a settlement physically; they will just attend electronically! They no longer have to hand over cheques, and receive Certificates of Title. Payment is made electronically, and the electronic title is transferred with the press of a button.
The Property Exchange Australia (PEXA) e-conveyancing system commenced in February 2015 in Victoria.
PEXA is owned by government agencies and a number of financial institutions.
It will eventually enable its subscribers (lawyers, licenced conveyancers, regulated financiers and government authorities) to lodge data with the Titles Offices in each Australian state and territory electronically, replacing paper documents. Participants will need to sign a Participation Agreement to participate.
The four parties usually involved in a conveyancing transaction (the vendor, the vendor's financier, the purchaser and the purchaser's lender) will need to participate and be authorised to use the system before a transaction can be completed electronically.There are now national e-conveyancing laws and "model participation rules".
The rules set out protocols for:
- creating electronic documents
- settling transactions in real time and for value
- arranging payment of the stamp duty
- lodging and registering documents at the Titles Office
- notification to various authorities, including the municipal council, water authority and state land tax
Within the PEXA system there are three ways of providing source funding to effect an e-conveyancing transaction (inclusive of financial settlement):
subscriber financial institutions;
a solicitor’s trust account; or
a PEXA source account.
The Legal Services Commissioner has recently notified practitioners that:
It is important to note that the PEXA Source Account is not a trust account within the meaning of the Legal Profession Act 2004, and therefore the protection offered by the Fidelity Fund may not exist if a default occurs in the PEXA Source Account. It is also important to understand that the interest earned on PEXA Source Accounts funds will accrue to PEXA, and not the Public Purpose Fund.
As mentioned in previous blogs (25 Aug 2014; 1 Oct 2014; 6 Nov 2014; and 17 Dec 2014), new verification of identity requirements are being introduced progressively in each state. These requirements include production of appropriate forms of identification of potential borrowers, as a means of avoiding fraud.
As a concession to Luddites, it should be noted that the paper conveyancing system will continue to be available for the time being. It will continue to be used where the representative of one or other party is not a PEXA subscriber.
In other words, PEXA is not (yet) compulsory.
However, as the various banks are now pushing forward with it, this may change!
W G Stark
Hayden Starke Chambers
Thursday, 18 December 2014
Are there any recent cases about whether a builder is liable to an owner's corporation for defective building works?
In October 2014, the High Court handed down a decision about the duty of care owed by builders to third parties (purchasers, including
owners corporations) (see Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36).
The OC incurred costs rectifying those defects, and commenced legal proceedings in the Supreme Court of NSW in 2008 against the builder to recover the costs.
The High Court of Australia unanimously allowed (in 4 separate judgments) the appeal by the builder. The court concluded that the builder had no duty to avoid causing the OC economic loss, resulting from latent defects in the common property which had remained undiscovered for nearly nine years.
In Bryan v Maloney [1995] HCA 17 (1995) 182 CLR 609, the High Court had previously held that builders have a potential duty of care to subsequent purchasers for latent defects which may arise in a dwelling house. This decision has caused a lot of uncertainty about the extent of a builder's duty and potential liability.
The OC commenced its existence when the strata plan was registered. At the same time, it became the registered proprietor of the common property. It had no contractual relationship with Brookfield or the developer. The OC did, however, hold the common property as agent for the developer and was effectively subject to the developer's control.
The design and construct contract contained detailed provisions with respect to the quality of the work to be performed by Brookfield and required Brookfield to remedy defects or omissions in the work within a defined defects liability period. The standard form contract of sale to purchasers of the serviced apartments, annexed to the design and construct contract, conferred on each purchaser specific contractual rights in relation to defects in the property, including the common property.
On appeal, the NSW Court of Appeal unanimously held that Brookfield did owe the OC a duty of care. However, the actual duty found to be owed was a narrower duty to avoid causing loss resulting from latent defects which were structural or dangerous or which made the serviced apartments uninhabitable.
The Court of Appeal also decided:
The High Court unanimously held that Brookfield did not owe a duty of care to the OC to avoid causing it economic loss resulting from latent defects in the common property.
Chief Justice French held that:
The High Court also stated that:
W G Stark
Hayden Starke Chambers
Background
The owners corporation of serviced apartments (OC) found some latent defects (which could not have reasonably been discovered before the purchase of the property) in the common property of the serviced apartment complex.The OC incurred costs rectifying those defects, and commenced legal proceedings in the Supreme Court of NSW in 2008 against the builder to recover the costs.
The High Court of Australia unanimously allowed (in 4 separate judgments) the appeal by the builder. The court concluded that the builder had no duty to avoid causing the OC economic loss, resulting from latent defects in the common property which had remained undiscovered for nearly nine years.
In Bryan v Maloney [1995] HCA 17 (1995) 182 CLR 609, the High Court had previously held that builders have a potential duty of care to subsequent purchasers for latent defects which may arise in a dwelling house. This decision has caused a lot of uncertainty about the extent of a builder's duty and potential liability.
Brookfield was engaged by a developer under a design and construct contract to build strata-titled apartments in Chatswood in suburban Sydney. The developer was the registered proprietor of the land.
The OC commenced its existence when the strata plan was registered. At the same time, it became the registered proprietor of the common property. It had no contractual relationship with Brookfield or the developer. The OC did, however, hold the common property as agent for the developer and was effectively subject to the developer's control.
The design and construct contract contained detailed provisions with respect to the quality of the work to be performed by Brookfield and required Brookfield to remedy defects or omissions in the work within a defined defects liability period. The standard form contract of sale to purchasers of the serviced apartments, annexed to the design and construct contract, conferred on each purchaser specific contractual rights in relation to defects in the property, including the common property.
The decisions
The Supreme Court of New South Wales (McDougall J) held that Brookfield did not owe the duty suggested by the OC. That duty was to take reasonable care to avoid a reasonably foreseeable economic loss to the OC in having to make good the consequences of latent defects caused by the building's defective design and/or construction. McDougall J held that the duty alleged was novel and that it was not appropriate for a Judge at first instance to identify and impose a novel duty.On appeal, the NSW Court of Appeal unanimously held that Brookfield did owe the OC a duty of care. However, the actual duty found to be owed was a narrower duty to avoid causing loss resulting from latent defects which were structural or dangerous or which made the serviced apartments uninhabitable.
The Court of Appeal also decided:
- there will generally be concurrent liability for defects in both contract and tort, and
- the requirement of "vulnerability" for pure economic loss was present for the developer, the OC and, probably, subsequent purchasers.
The High Court unanimously held that Brookfield did not owe a duty of care to the OC to avoid causing it economic loss resulting from latent defects in the common property.
Chief Justice French held that:
- the nature and content of the contractual arrangements, including detailed provisions for dealing with and limiting defects liability
- the sophistication of the parties, and
- the relationship of the developer to the OC,
The High Court also stated that:
"To impose upon a defendant
builder a greater liability to a disappointed purchaser than to the
party for whom the building was made and by whom the defendant was
paid for its work would reduce the common law to
incoherence..."
Conclusion
The High Court recognised the importance of the terms of the bargain struck between the parties and recognised that the contract here meant that a concurrent duty of care did not arise.W G Stark
Hayden Starke Chambers
Wednesday, 17 December 2014
Will NSW also adopt the Verification of identity requirements by mortgagees?
Following on from Victoria and other states, in New South Wales, new
requirements for verification of the identity of mortgagors will apply from 1
January 2015.
The NSW amendments (like the Victorian provisions) require a mortgagee of land to take reasonable steps to ensure that the person who executed the mortgage, or on whose behalf the mortgage was executed, as mortgagor, is the same person who is, or is to become, the registered proprietor of the land that is security for the payment of the debt to which the mortgage relates.
The NSW amendments (like the Victorian provisions) require a mortgagee of land to take reasonable steps to ensure that the person who executed the mortgage, or on whose behalf the mortgage was executed, as mortgagor, is the same person who is, or is to become, the registered proprietor of the land that is security for the payment of the debt to which the mortgage relates.
These provisions are being enacted in anticipation of electronic conveyancing commencing nationally in the near future.
Once all states have the appropriate legislative regime in place, there will be no further impediments to the commencement of electronic conveyancing.
The major banks have now decided to accept electronic conveyancing as inevitable and have taken the necessary steps for it to become the standard form of a conveyancing transaction.
Those of us who like paper titles and mortgages will soon no longer be able to conduct conveyancing business in the 'old-fashioned' way! I don't believe I am the only person who is nervous about this process! However, we all have to move with the times.
W G Stark
Hayden Starke Chambers
Hayden Starke Chambers
Wednesday, 1 October 2014
Victorian lenders required to take 'reasonable steps' to verify the identity of borrowers from September 2014
Further to my post of 25 August 2014, the Transfer of Land Amendment Act 2014 (Vic) came into effect
on 24 September 2014.
As previously noted, the amendments require lenders to take 'reasonable steps' to verify the identity of borrowers before executing a mortgage or variation of mortgage.
The amendments are a part of the legislative package brought in to allow for the full introduction of e-conveyancing.
W G Stark
Hayden Starke Chambers
As previously noted, the amendments require lenders to take 'reasonable steps' to verify the identity of borrowers before executing a mortgage or variation of mortgage.
The amendments are a part of the legislative package brought in to allow for the full introduction of e-conveyancing.
W G Stark
Hayden Starke Chambers
Monday, 1 September 2014
Can I obtain leave to defend an application for summary judgment for possession (part 2)?
Further to my post about summary judgment for possession, the Honourable
Justice Ginnane (of the Supreme Court of Victoria) in ANZ Banking Group Ltd v Loftus [2014] VSC 342 was called upon to decide an appeal from an order for summary judgment granted by an Associate
Justice in a claim by a mortgagee for possession of a security property.
ANZ sued Mr Loftus ("the defendant") among other things for possession of a property given as security for the loans.
The defendant denied signing the
mortgage in his defence.
On 2 April 2014, an Associate Justice granted summary
judgment in favour of ANZ. A solicitor appeared for the defendant at the hearing of the summary judgment application.
However, no affidavit in opposition was filed on his behalf.
Ginnane J notes (at paragraph 13) that in her
reasons, the learned Associate Justice observed:
In the course of the hearing I directly asked Mr Loftus’ solicitor why an affidavit had not been filed on behalf of Mr Loftus. The Court was informed that Mr Loftus’ solicitor had some concerns about Mr Loftus in that she thought he may have an acquired brain injury and that this presented difficulties in terms of Mr Loftus being able to attend to give instructions and to prepare such an affidavit. This is an extremely serious matter that was put before the Court. Mr Loftus is legally represented and yet no material has been put before the Court. There was no application for an adjournment for more time so that an affidavit could be filed by Mr Loftus.
At paragraph 17, Justice Ginnane also notes:
The Associate Justice in reaching her decision stated:
Having considered the evidence and heard submissions, I do not consider Mr Loftus has any real prospect of success. It was open to Mr Loftus to put some material before the Court and he failed to do so. In circumstances where he makes an allegation of fraud, it is incumbent on Mr Loftus to put some evidence to substantiate the allegation or that demonstrates there is at least a question to be tried.
The defendant terminated the solicitor's retainer and appealed to a Judge of the Trial Division against the order granting ANZ summary judgment.
At the hearing of the appeal, the defendant was represented by duty counsel under the Victorian Bar scheme. He sought to rely upon an affidavit prepared and sworn by him which was not before the Associate Justice.
In the course of the hearing I directly asked Mr Loftus’ solicitor why an affidavit had not been filed on behalf of Mr Loftus. The Court was informed that Mr Loftus’ solicitor had some concerns about Mr Loftus in that she thought he may have an acquired brain injury and that this presented difficulties in terms of Mr Loftus being able to attend to give instructions and to prepare such an affidavit. This is an extremely serious matter that was put before the Court. Mr Loftus is legally represented and yet no material has been put before the Court. There was no application for an adjournment for more time so that an affidavit could be filed by Mr Loftus.
At paragraph 17, Justice Ginnane also notes:
The Associate Justice in reaching her decision stated:
Having considered the evidence and heard submissions, I do not consider Mr Loftus has any real prospect of success. It was open to Mr Loftus to put some material before the Court and he failed to do so. In circumstances where he makes an allegation of fraud, it is incumbent on Mr Loftus to put some evidence to substantiate the allegation or that demonstrates there is at least a question to be tried.
The defendant terminated the solicitor's retainer and appealed to a Judge of the Trial Division against the order granting ANZ summary judgment.
At the hearing of the appeal, the defendant was represented by duty counsel under the Victorian Bar scheme. He sought to rely upon an affidavit prepared and sworn by him which was not before the Associate Justice.
In his
affidavit, the defendant:
One of the grounds of appeal from the decision of the Associate Justice was that the amended defence and particulars disclosed a triable issue and should be taken to have been filed and served on a “proper basis”, having regard to s 18 of the Civil Procedure Act 2010 and the obligations that it imposed on persons to whom the overarching obligations applied in responding to allegations that were made in a proceeding.
Justice Ginnane rejected those submissions. At paragraph 28, he went on to find:
- explained why there was no affidavit before the Associate Justice. He alleged that he met with his solicitor to give instructions for an affidavit and it was agreed that the solicitor would send a draft to him. However, he swore that he did not receive a draft affidavit from his solicitor and he did not do anything further because he thought his solicitor had everything under control;
- swore that he did not have a brain injury; and
- set out his version of events concerning the ANZ loans and denied ever signing a mortgage.
One of the grounds of appeal from the decision of the Associate Justice was that the amended defence and particulars disclosed a triable issue and should be taken to have been filed and served on a “proper basis”, having regard to s 18 of the Civil Procedure Act 2010 and the obligations that it imposed on persons to whom the overarching obligations applied in responding to allegations that were made in a proceeding.
Justice Ginnane rejected those submissions. At paragraph 28, he went on to find:
Mr Loftus was in essence making an allegation of fraud against the ANZ. Whatever may be the position in respect of other defences,[1] in my opinion, a defence of fraud must usually be supported by an affidavit setting out details of the defence.[2] This is a case in which that was required.
The question of whether to allow the new evidence In considering whether to allow the new affidavit, Ginnane J referred
to rule 77.06.9(3) which gives the court power to receive further
evidence on appeal on questions of fact by affidavit. Justice Ginnane also referred to Clark v Stingel [2007] VSCA 292 in which the Court
of Appeal set out the principles upon which the Court will grant leave
to introduce fresh evidence upon an appeal. In that case, it was held
that leave should be given only if:
Justice Ginnane decided that where there are disputed questions of fact, those disputes are best resolved at trial after hearing oral evidence of witnesses.
When applying s 63 of the Civil Procedure Act 2010, the Honourable Ginnane J was of the view that the defendant had real prospects of defending ANZ’s claim because his version of events may be accepted.
Justice Ginnane concluded that it was reasonably clear that if Mr Loftus’ evidence had been before the Associate Justice, summary judgment would not have been granted.
Justice Ginnane also relied on the fact that the judgment was not obtained after a full hearing at trial; it was obtained on a summary judgment application which is made on affidavit.
The case was therefore distinguished from Clark v Stingel where further evidence was sought to be introduced at an appeal after a full trial. The principle of finality of litigation was stronger after the completion of a trial than at an application for summary judgment.
The interests of justice were also viewed by the Honourable Ginnane J as an important factor when considering the admission of new evidence on appeal. Relying on the defendant's account of his dealings with his solicitor and the solicitor's failure to file an affidavit or seek an adjournment to enable an affidavit to be filed, Ginnane J allowed the defendant to use his affidavit.
In the result, the appeal was allowed on the basis of the new evidence filed, because the defendant had established that he had real prospects of defending ANZ’s claim; it was therefore a proceeding that should go to trial.
The case is a good example of the circumstances where leave to defend will be granted to a defendant where a mortgagee is seeking possession of a security property.
- by the exercise of reasonable diligence such evidence could not have been discovered in time to be used in the original trial;
- it is reasonably clear that if the evidence had been available at the trial, and had been adduced, an opposite result would have been produced; and
- the evidence proposed to be adduced is reasonably credible.
Justice Ginnane decided that where there are disputed questions of fact, those disputes are best resolved at trial after hearing oral evidence of witnesses.
When applying s 63 of the Civil Procedure Act 2010, the Honourable Ginnane J was of the view that the defendant had real prospects of defending ANZ’s claim because his version of events may be accepted.
Justice Ginnane concluded that it was reasonably clear that if Mr Loftus’ evidence had been before the Associate Justice, summary judgment would not have been granted.
Justice Ginnane also relied on the fact that the judgment was not obtained after a full hearing at trial; it was obtained on a summary judgment application which is made on affidavit.
The case was therefore distinguished from Clark v Stingel where further evidence was sought to be introduced at an appeal after a full trial. The principle of finality of litigation was stronger after the completion of a trial than at an application for summary judgment.
The interests of justice were also viewed by the Honourable Ginnane J as an important factor when considering the admission of new evidence on appeal. Relying on the defendant's account of his dealings with his solicitor and the solicitor's failure to file an affidavit or seek an adjournment to enable an affidavit to be filed, Ginnane J allowed the defendant to use his affidavit.
In the result, the appeal was allowed on the basis of the new evidence filed, because the defendant had established that he had real prospects of defending ANZ’s claim; it was therefore a proceeding that should go to trial.
The case is a good example of the circumstances where leave to defend will be granted to a defendant where a mortgagee is seeking possession of a security property.
There were credible allegations of fraud: the defendant swore that he had not signed the mortgage in question, the mortgage was witnessed by an employee of the bank and the defendant's lawyer had asked the bank to produce the original mortgage for examination. The bank only provided a copy.
Counsel and solicitors in Victoria will be aware that the making of a false allegation of fraud amounts to professional misconduct. Therefore, making such an allegation will be rare and will only be made by lawyers on proper instructions. As a result, if such an allegation is made by a lawyer, the court will take it seriously. In this case, the allegation was made by the defendant himself after he terminated the services of his lawyer.
W G Stark
Hayden Starke Chambers
Hayden Starke Chambers
Friday, 29 August 2014
Can I obtain leave to defend an application for summary judgment for possession (part 1)?
In an proceeding for possession of a security property by a mortgagee, it can be very difficult to mount an arguable defence.
In the vast majority of claims for possession by mortgagees, either no appearance or no defence is filed, and the mortgagee obtains an order for possession in default.
The second-most common outcome is for a 'holding defence' to be filed, with the borrower really only seeking more time to pay out the mortgagee.
There are some cases where a real defence is filed, where the borrower does not seek more time to pay out the loan. In those cases, mortgagees will often seek summary judgment on the basis that the borrower has no defence to the claim for possession.
There are some recent cases which shed light on the circumstances in which a defendant borrower will be granted leave to defend an application for summary judgment.
Pagone J in Portbury Development Co Pty Ltd v Ottedin Investments Pty Ltd and ors [2012] VSC 490 had to decide whether a defendant had done enough to be granted leave to defend the claim on the hearing of an application for summary judgment.
In paragraph 9, Pagone J noted:
The result of the Portbury decisions (by Pagone J and Dixon J) is that the principles governing applications for summary dismissal are now less stringent, and the court will grant a mortgagee summary judgment where there is no real prospect of any defence succeeding.
In a claim for possession by a morgagee of land registered under the Transfer of Land Act, 1958, the proof of the claim are relatively simple.
The usual pleading includes:
(a) ownership of the land by the borrower,
(b) the loan of money by the lender to the borrower,
(c) registration of the lender's mortgage on title,
(d) an obligation to pay interest, or repay principal by the borrower,
(e) breach of that obligation,
(f) notice to remedy that breach,
(g) a failure to remedy the breach despite notice, and
(h) continued possession of the land by the borrower.
Proof of those elements would ordinarily result in an order for possession of the property in favour of the mortgagee.
The cases confirm that the court is unlikely to refuse an application for summary judgment by a mortgagee without good cause.
However, in the particular circumstances of the case, Pagone J decided at paragraph 36:
W G Stark
Hayden Starke Chambers
In the vast majority of claims for possession by mortgagees, either no appearance or no defence is filed, and the mortgagee obtains an order for possession in default.
The second-most common outcome is for a 'holding defence' to be filed, with the borrower really only seeking more time to pay out the mortgagee.
There are some cases where a real defence is filed, where the borrower does not seek more time to pay out the loan. In those cases, mortgagees will often seek summary judgment on the basis that the borrower has no defence to the claim for possession.
There are some recent cases which shed light on the circumstances in which a defendant borrower will be granted leave to defend an application for summary judgment.
Pagone J in Portbury Development Co Pty Ltd v Ottedin Investments Pty Ltd and ors [2012] VSC 490 had to decide whether a defendant had done enough to be granted leave to defend the claim on the hearing of an application for summary judgment.
In paragraph 9, Pagone J noted:
The defendants rely upon the facts in the particulars to para 44 in resisting the application for summary judgment. They maintained before Gardiner AsJ, and before me, that on an application for summary judgment it was not necessary for a defendant to verify by non hearsay evidence the facts alleged in a pleading. The defendants submitted that it was sufficient in response to a plaintiff’s application for summary judgment for a solicitor, ... to make an affidavit which referred to the particulars in para 44 of the defendants’ Amended Defence and Counterclaim and depose that he was “informed by [the client] and believe[d] that the facts pleaded [in para 44] are true and correct”. Portbury contended before Gardiner AsJ, and before me, that this was insufficient to satisfy a defendant’s obligation to show cause under r 22.04 of the Rules or the Civil Procedure Act 2010 (Vic), but did not otherwise controvert the facts in the particulars. It did, however, through the evidence it filed, give evidence ... from which it maintained an entitlement to summary judgment.Pagone J then summarised the relevant principles as follows (paragraph 24):
The plaintiff has the burden of satisfying a court that it is appropriate to give summary judgment whether that is sought under s 63 of the Civil Procedure Act 2010 (Vic) or under Order 22 of the Rules. The relevant principles were considered by Dixon J in Ottedin Investments Pty Ltd v Portbury Development Co Pty Ltd[6] in which his Honour said:
[6] [2011] VSC 222; see also JBS Southern Aust Pty Ltd v Westcity Group Holdings Pty Ltd [2011] VSC 476, [36]-[50] (Croft J).
Summary Dismissal
7 In moving for summary dismissal, a party may rely on r 23.01 of the Rules, s 63 of the Civil Procedure Act 2010, and/or the court's inherent jurisdiction.8 By civil procedure reform introduced by the Act, the operative effect of the principles governing applications for summary dismissal is now less stringent...9 The new test is evident in the plain language of Part 4.4 of the Civil Procedure Act 2010. Section 62 permits a defendant in a civil proceeding to apply to the court for summary judgment on the ground that a plaintiff's claim or part of that claim has no real prospect of success. Section 63 provides:63 Summary judgment if no real prospect of success
(1) Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.(2) A court may give summary judgment in any civil proceeding under subsection (1)—(a) on the application of a plaintiff in a civil proceeding;(b) on the application of a defendant in a civil proceeding;(c) on the court's own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.It will be recalled that in explaining the test used prior to the Act, a variety of expressions describing that test could be found in the cases. The expression now identified by Parliament is in plain language: "no real prospect of success".
10 ... The critical qualifying word "real" directs the court to "the need to see whether there is a realistic, as opposed to a fanciful, prospect of success".11 In two other respects, the provisions of the Act ought be borne in mind when exercising the discretion to summarily dismiss. First, the court must seek to give effect to the overarching purpose of the Act and the Rules in exercising, or interpreting, the statutory power to summarily dismiss. This overarching purpose is "to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute". The court is directed to further the overarching purpose by having regard to the objects and matters articulated in s 9 of the Act. The manner in which the court will consider these objects and matters will depend on the nature and circumstances of the application before it. On this application, I bear in mind the following objects (s 9(1)):(a) the just determination of the civil proceeding;
(c) the efficient conduct of the business of the court;
(d) the efficient use of judicial and administrative resources;(f) the timely determination of the civil proceeding; and
(g) dealing with a civil proceeding in a manner proportionate to—(i) the complexity or importance of the issues in dispute; and(ii) the amount in dispute:and I have regard to the following matters (s 9(2)):
(f) any prejudice that may be suffered by a party as a consequence of any order proposed to be made or direction proposed to be given by the court;(g) the public importance of the issues in dispute, and the desirability of a judicial determination of those issues; and(h) the extent to which the parties have had the benefit of legal advice and representation.12 Second, the discretionary nature of the power to summarily dismiss is exercisable having regard to s 64 of the Act. That section provides:64 Court may allow a matter to proceed to trial
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a) it is not in the interests of justice to do so; or
(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.His Honour went on to note the observations of French CJ and Gummow J in Spencer v Commonwealth of Australia[8] that the exercise of powers to terminate proceedings summarily must always be attended with caution.[9] In Karam v Palmone Shoes Pty Ltd[10], decided since the coming into force of s 63 of the Civil Procedure Act 2010 (Vic), it was observed that “the power to order summary judgment is [still] to be exercised sparingly and not ‘unless it is clear that there is no real question to be tried’ ”.[11]The section affirms the court's broad discretion, exercised judicially, whether to summarily dismiss a proceeding or a claim, which was the basis upon which the previous test was applied. The circumstances in which the court might consider the dispute to be of such a nature that only a full hearing on the merits is appropriate is equally wide in its compass and plainly to be considered in the circumstances of each case.[7]
[9] Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd [2011] VSC 222, [15] (Dixon J).[10] [2012] VSCA 97; see also Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99 (Mason, Murphy, Wilson, Deane and Dawson JJ).[11] Karam v Palmone Shoes Pty Ltd [2012] VSCA 97, [28] (Nettle and Osborn JJA); see also Ticco Pty Ltd v Complete Family Healthcare Services Pty Ltd [2005] VSCA 221, [20]–[21] (Hollingworth AJA), [36]–[37] (Charles JA).
The result of the Portbury decisions (by Pagone J and Dixon J) is that the principles governing applications for summary dismissal are now less stringent, and the court will grant a mortgagee summary judgment where there is no real prospect of any defence succeeding.
In a claim for possession by a morgagee of land registered under the Transfer of Land Act, 1958, the proof of the claim are relatively simple.
The usual pleading includes:
(a) ownership of the land by the borrower,
(b) the loan of money by the lender to the borrower,
(c) registration of the lender's mortgage on title,
(d) an obligation to pay interest, or repay principal by the borrower,
(e) breach of that obligation,
(f) notice to remedy that breach,
(g) a failure to remedy the breach despite notice, and
(h) continued possession of the land by the borrower.
Proof of those elements would ordinarily result in an order for possession of the property in favour of the mortgagee.
The cases confirm that the court is unlikely to refuse an application for summary judgment by a mortgagee without good cause.
However, in the particular circumstances of the case, Pagone J decided at paragraph 36:
In my view the defendants have shown cause against the application for summary judgment, and the plaintiff has not discharged the onus upon them under either r 22.02 of the Rules or s 63 of the Civil Procedure Act 2010.
W G Stark
Hayden Starke Chambers
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