McCallum (aka Hain) v National Australia Bank Ltd [2000] NSWCA 218

New South Wales Court of Appeal

CITATION : McCallum (aka Hain) v National Australia Bank Ltd [2000] NSWCA 218 FILE NUMBER(S) : CA 40236/00 HEARING DATE(S) : 14/08/00 JUDGMENT DATE : 17 August 2000

PARTIES : Wendy McCallum (aka Wendy Hain) (Appellant) National Australia Bank Ltd (Respondent) JUDGMENT OF : Sheller JA at 1; Fitzgerald JA at 2; Heydon JA at 3

LOWER COURT JURISDICTION : Supreme Court LOWER COURT 10265/99 FILE NUMBER(S) : LOWER COURT Master Harrison JUDICIAL OFFICER :

COUNSEL : S Kaur-Bains (Appellant) J Stoljar (Respondent) SOLICITORS : Jackson Smith (Appellant) Mallesons Stephen Jaques (Respondent) CATCHWORDS : Stamp duties - loan security - up stamping - statutory construction - Stamp Duties Act 1920 (NSW) s 84(4) - ND LEGISLATION CITED : Stamp Duties Act 1920 (NSW) Interpretation Act 1987 (NSW) In re Dehy Fodders (Australia) Pty Ltd; Winter v The Bank of Adelaide (1973) 4 SASR 538 CASES CITED: Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 Wagga Finance Co v Lever (1929) 30 SR (NSW) 76 DECISION : Appeal dismissed with costs

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40236/00 CL 10265/99

SHELLER JA FITZGERALD JA HEYDON JA

17 August 2000

McCALLUM (aka Hain) v NATIONAL AUSTRALIA BANK LTD JUDGMENT

1 SHELLER JA: I agree with Heydon JA. 2 FITZGERALD JA: I agree with Heydon JA. 3 HEYDON JA: Background

By a mortgage dated 23 February 1982 ("the Mortgage") the appellant mortgaged rural land to a predecessor in title of the respondent as security for a loan. By 1996 the respondent had provided overdraft and other facilities to the appellant and she had fallen into default under those facilities. On 28 April 1997 the respondent lent $684,670.85 to the appellant on the security of the Mortgage. By 7 October 1998, when the monies owing had risen to $685,589.64, the respondent served a document on the appellant pursuant to clause 1 of the Schedule to the Mortgage, which provided that the appellant would "upon demand … pay" to the respondent any part of the Principal Sum which had not been paid. The money demanded was not paid. On 27 October 1998 the respondent served a letter dated 23 October 1998 on the appellant requiring her to deliver possession of the mortgaged land to the respondent. This letter was served with a view to attracting clause 21 of a Memorandum deemed to be incorporated in the Mortgage, which provided as follows: "That immediately upon or at any time after any default as aforesaid it shall be lawful for the Bank at any time and from time to time immediately upon notice to do all or any of the following: (a) To enter upon and take possession of all or any of the mortgaged premises ….". 4 At the time that that notice was given, the Mortgage had only been stamped to the value of $670,000. On 9 August 1999, "up stamping" took place: that is, stamp duty was paid on an additional $14,671 at a cost of $60. 5 On or about 28 January 1999, before the up stamping, the respondent had brought proceedings seeking (inter alia) possession of the mortgaged property. On 5 June 2000 it obtained an order for possession from Master Harrison. 6 The Master rejected a defence advanced by the appellant which was expressed thus in paragraph 13 of the Further Amended Defence: "the Mortgage had not been up stamped in accordance with the Stamp Duties Act 1920 (NSW) and therefore at the relevant time the terms of the Mortgage could not be exercised as the terms were unenforceable by reason of section 84(4) of the Stamp Duties Act." 7 The appellant argued that if judgment for possession was to be obtained, the documents of 7 and 23 October 1998 had to be served; that serving them was part of the process of enforcing the mortgage; that they could not be validly served by reason of s 84(4) until the Mortgage had been stamped; and that the up stamping on 9 August 1999 did not retrospectively validate them. After referring to s 84(4) and to certain authorities, the Master said the appellant's argument was "hopeless". 8 The appellant's argument on appeal raises two issues. The first is whether the up stamping of the Mortgage after the issuing of the documents of 7 and 23 October 1998 operated to validate them retrospectively. The second is whether issuing the documents of 7 and 23 October 1998 was "enforcement".