Commonwealth of Australia v Kevin Robert Wise and Moya Deidre Wise [1986] ACTSC 85 (15 September 1986)

SUPREME COURT OF THE ACT

COMMONWEALTH OF AUSTRALIA v. KEVIN ROBERT WISE and MOYA DEIDRE WISE
S.C. No. 1943 of 1982
Reasons - Mortgage

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles C.J.(1)

CATCHWORDS

Reasons for ex tempore judgment.

Mortgage - failure to pay due instalments - claim set off based on contract to grant housing loan dismissed.

HEARING

CANBERRA
15:9:1986

ORDER

The orders be in terms of the draft minutes of order.

Each party bear the respective costs of what occurred on 12 May 1986.

DECISION

I think it desirable that I give judgment in this matter forthwith as I have come to a firm conclusion in the matter. It is a claim made by the Commonwealth of Australia for possession of premises being block 4, section 45 Holt in the Australian Capital Territory and the whole of the land comprised in Crown Lease and Certificate of Title registered Volume 859 Folio 82.

2. From what I understand from the evidence there is erected a dwelling house at those premises and the two defendants reside there. The plaintiff claims as mortgagee of the estate in leasehold held by the defendants from the plaintiff. That estate of leasehold is established by what is commonly known, I believe, as a Crown Lease entered into between the parties on 23 March 1982.

3. The mortgage in question was entered into on 12 August 1982. It secured the loan of the sum of $38,475 being lent from the mortgagee to the mortgagor for the purchase of the leasehold interest to which I have made reference. The provisions of the lease needed to be supplemented by evidence in order for me to understand the financial implications over the period of time that has elapsed since the mortgage was entered into and I have heard that evidence.

4. It is unchallenged. It establishes that, by the time the loan instalments were due amounting to $436.82 as at 1 May 1982 and from then on until 1 October 1982, $467.01, falling due on the first of each month, the only amounts paid between 1 May and the end of September 1982 amounted to $667.77 and as at 1 July 1982 the arrears owing were $1403.33.

5. I am satisfied that there was effective service of a notice under section 93 of the Real Property Ordinance on each of the defendants, that is to say on 5 July 1982 on the first defendant and on 29 July 1982 on the second defendant. I am satisfied that despite the payments to which I have referred, there was continuing default until the issue of the writ on 7 December 1982, so that by the time of the issue of the writ there was a failure by the defendants to comply with the provisions of the mortgage and with the notice served under section 93 of the Real Property Ordinance. I am further told and I accept on the evidence that no further payments have been made at all and as at 1 September 1986 the total arrears were $22,496.88. In the defence filed a number of matters are raised which it is claimed go to establish a claim for damages on the part of the defendants which, as I understand it, and so it might be argued, would enable them to establish some sort of a set off and thereby avoid the consequences of a failure to comply with the provisions of the mortgage.

6. The first defendant has given evidence, lengthy in nature, to which I have paid attention as best I was able to do. It seems that the claim is based upon a breach, so it is alleged, of a contract entered into between the defendants and the plaintiff in or about May 1972 when a housing officer of the Department of Territories, or whatever the proper name of the department was at that stage, told the first defendant that he would be unwise to proceed with the proposed purchase of a house privately from his then landlord, and ought to wait a few months so that he could obtain what has been called a government allocation, or something of that nature.

7. In any event it is alleged that this housing officer told the first defendant that he should be able to purchase a house for no more than $15,000 within a couple of months and that repayments under the government housing scheme would be some $73 per month, a sum which the defendant could afford. Upon the good faith of that assurance, so it is said by the first defendant, he did not proceed to try to accept an offer for the sale of the house in which he was then living, but unfortunately whilst he was waiting in accordance with what he considered to be the undertaking or at the very least, the advice of the housing officer, the rules changed, to use his term, and on 7 July 1982 the government ceased the financing of the sale of leasehold interests.

8. A scheme for such government finance was not resumed until February 1973 and by then the terms were so changed that the defendants were unable to meet them and accordingly they were not able to press their long held desire for a house purchase within the ACT to be financed by a government scheme. I should add that the defendant has given a good deal of evidence about how he had hopes for many years to achieve some sort of government assistance in financing the purchase of a home, how he was bitterly disappointed that despite his service in the Navy he did not become eligible for a War Service Homes Loan, and that he joined the then Australian Capital Territory Police Force, as he understood it, upon the very basis that it would be a term of his contract of employment that he would live in a government allocated home. He went on to say at the end of his evidence today that it was only in recent months, as I understand it, that he has been notified, only too late, that it is now considered that he and his wife are eligible for a loan which now goes under the name of, as I believe, a Defence Forces Service Home Loan.

9. However, in my view, none of those matters which were put so forcefully by the first defendant go to establish a defence, nor do they establish a cross-action which resounds in damages or a set off of any sort, and in the circumstances, there is no alternative but to grant the principle relief which the plaintiff seeks, namely an order for possession of the premises. In a moment I will pronounce the formal order of the court, but before doing that, I turn to the question of costs. Normally, of course, costs follow the event and generally speaking I do not see why they should not follow the event in this case.

10. However, there was an aborted hearing before Mr. Justice Kelly on 12 May 1986, during the course of which it came to his Honour's attention that he had had some previous knowledge of the first defendant when the first defendant was a member of the Australian Capital Territory Police Force. That led Mr. Justice Kelly to ask the first defendant whether his Honour should disqualify himself from the hearing. The first defendant replied to that in the affirmative. However, in all the circumstances, it does not seem to me that the first defendant was responsible for the hearing before Mr. Justice Kelly being aborted.

11. I think that in the circumstances, whatever the attitude of the first defendant might have been, it was likely that Mr. Justice Kelly would have disqualified himself in any event. In those circumstances I think it appropriate that each party bear the respective costs of what occurred on 12 May 1986. There is a further formal order that I intend to make, namely that substituted service of this order be effected on the second defendant by sending the same to her by pre-paid post addressed to the second defendant at 65 Beaurepaire Crescent, Holt in the Australian Capital Territory.

12. The formal orders which I intend to make are along the lines that I have indicated and set out in the draft minutes of order which I initial now and place with the papers.