Reported Decision : (2006) NSW ConvR 56-156 New South Wales Supreme Court CITATION : Barbara Anne Graham v Aluma-Lite Products Pty Ltd & 2 ors [2006] NSWSC 476 HEARING DATE(S) : 02.12.05, 20.12.05, 22.12.05, 08.02.06, 09.03.06, 16.03.06 JUDGMENT DATE : 24 May 2006 JUDGMENT OF : Nicholas J DECISION : Para 75 CATCHWORDS : CONVEYANCING – Default under mortgage – Mortgagee's claim for possession – Whether mortgagee entitled to exercise rights under the mortgage – Estoppel – Anshun estoppel – Whether notices under s 7(1) Credit (Home Finance Contracts) Act 1984 and s 57(2)(b) Real Property Act 1900 sufficient – Whether caveat should be extended or removed Conveyancing Act 1919 s 12 , s 92 LEGISLATION CITED : Credit (Home Finance Contracts) Act 1984 s 4, s 5, s 7, s 17 Limitation Act 1969 s 42(1)(b) Real Property Act 1900 s 12(1)(a), s 57(2), s 57(3), s 74J, s 74MA, s 124 Carr v Finance Corporation of Australia Ltd (No. 2) (1982) 150 CLR 139 Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 Dallal v Bank Mellat [1986] QB 441 CASES CITED : Graham v Aluma-Lite Pty Ltd (1996) 39 NSWLR 58 McIntosh v Shashoua (1931) 46 CLR 494 Port of Melbourne Authority v Anshun Pty Ltd (1991) 147 CLR 589 Wongala Holdings Pty Ltd v Mulinglebar Pty Ltd (Unreported, NSWCA, 16 August 1994) Barbara Anne Graham - plaintiff PARTIES : Aluma-Lite Products Pty Ltd - first defendant Registrar General of Lands Department (NSW) - second defendant Elmo Services Pty Ltd - third defendant FILE NUMBER(S) : SC 2377/04 Ms B A Graham - plaintiff in person COUNSEL : Mr G A Sirtes - first defendant submitting appearance - second defendant Mr G A Sirtes - third defendant Ms B A Graham - plaintiff in person SOLICITORS : Ledlin Partners - first defendant submitting appearance - second defendant Ledlin Partners - third defendant IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Nicholas J 24 May 2006 2377/04 Barbara Anne Graham v Aluma-Lite Products Pty Ltd & 2 ors JUDGMENT 1 His Honour: By her amended summons filed 16 August 2004, the plaintiff seeks an order that the operation of caveat no. 2821084 be extended until further order. She also seeks an order to restrain the Registrar-General of New South Wales, the second defendant, from registering any dealing in respect of the land comprised in folio identifier 1/105320 known as no. 47 May Street, St Peters (the property) of which she is the registered proprietor, including a transfer by a mortgagee exercising its power of sale. 2 The amended summons also seeks to restrain Aluma-Lite Products Pty Ltd, the first defendant, and Elmo Services Pty Ltd, the third defendant, from registering any mortgage over the property until the first defendant has (a) paid to the plaintiff costs claimed to be owing to her incurred in the proceedings in Graham v Aluma-Lite Pty Ltd (1996) 39 NSWLR 58; (b) has obtained a determination that it is the mortgagee; and (c) obtained judgment in ejectment. An order that the first defendant forthwith pay to the plaintiff the costs in those proceedings is also sought. 3 On 1 September 2004 the first defendant as cross-claimant filed a notice of cross-claim against the plaintiff as cross-defendant. It alleges, inter alia, that in breach of the terms of the mortgage from the plaintiff over the property she has failed to pay the principal sum of about $90,000.00 on the due date of 22 January 1994 and interest pursuant to the terms of the mortgage. It also seeks orders that the summons be dismissed, that the caveat be removed, that it be granted possession of the property, and costs. 4 The proceedings were heard on 2 December 2005, 20 December 2005, 22 December 2005, 8 February 2006, 9 March 2006 and 16 March 2006. The first defendant relied on written submissions dated 30 March 2006. The plaintiff's written submissions in reply were received on 28 April 2006. These remain with the court file. Background and earlier proceedings 5 The relevant history for the better understanding of the present proceedings is as follows. 6 On 7 January 1993 the plaintiff granted a mortgage over the property to Aluma-Lite Pty Ltd to secure an advance of the sum of $90,000.00 for the term of 12 months to be repaid on or before 22 January 1994, and which provided for the payment of interest by monthly instalments of $1,275.00 each, commencing 22 January 1993. The mortgage is registered as dealing no. I131876 (the mortgage). On 12 occasions between 22 January and 9 December 1993 the plaintiff made interest and other payments under the mortgage, and it is common ground that since then no payments of any kind have been made. 7 On 8 November 1994 in proceedings no. CLD 11419/94 the first defendant (then named Aluma-Lite Pty Ltd) obtained default judgment for possession of the property. The plaintiff's application to set aside the default judgment was heard and dismissed by Hulme, J for reasons given on 10 March and 12 April 1995. The plaintiff's appeal was argued on 9 and 13 February 1996 and on 20 March 1996 the Court of Appeal allowed the appeal, ordered the default judgment be set aside, and ordered the first defendant to pay the plaintiff's costs of the application before Hulme, J and the appeal (Graham v Aluma-Lite Pty Ltd (1996) 39 NSWLR 58). The plaintiff successfully persuaded the Court of Appeal that she had a defence to the first defendant's claim on the ground that it had failed to give notice in compliance with the procedure under s 7 Credit (Home Finance Contracts) Act 1984 (the Act). On 25 March 1997 the Court of Appeal ordered there be judgment for the plaintiff in no. CLD 11419/94. 8 In the present proceedings the plaintiff attempted to raise issues which had been canvassed in the earlier proceedings. It is therefore necessary to refer to some details of the earlier proceedings. 9 The judgment of Hulme, J of 10 March 1995 discloses that there was no denial that the plaintiff was in default under the mortgage, and that no offer had been made to bring interest payments up to date or to continue them, and that there was no evidence that the first defendant would not suffer loss if its rights consequent on default were further delayed. Before him the plaintiff contended that she had a number of grounds of defence to the claim for possession including grounds under ss 57(2)(b) and 124, Real Property Act 1900, under the Contracts Review Act 1980, and under the Credit Act 1984, none of which he found to be arguable. She also relied upon the Act to argue that the contract under which the monies were provided to her was a home finance contract as defined, with the consequence that by s 7 thereof the first defendant was precluded from instituting proceedings, or exercising a right under the contract or a mortgage that related to the contract as it had not served a prescribed notice on her as the debtor. 10 In his reasons of 12 April 1995 His Honour concluded by saying: "It follows that the ground of defence Mrs Graham raised in reliance on sub-section 7(1) would not entitle her to succeed. Any order setting aside the judgment entered would accordingly be futile, and her application in this regard is refused". 11 The plaintiff instituted the appeal (CA 40272/95) by summons in which, under the heading "Errors of fact", she raised numerous issues including whether there was a mortgage in favour of the first defendant, whether there was a loan to her from the first defendant, and whether there was a contract between the parties. 12 In his judgment in the Court of Appeal (Graham p 60ff) Clarke, JA noted (p 60) that no reliance was placed in the appeal on some defences found by Hulme, J to be without substance, and also that the plaintiff had made an unsuccessful application at the commencement of the hearing of the appeal for leave to amend the notice of appeal to include a ground which raised issues not litigated at first instance. 13 He described the circumstances which gave rise to the first defendant's claim thus (pp 60-61): "The appellant entered into a contract to purchase a property, 47 May Street, St Peters, on 12 May 1986. She obtained a loan of $55,300 from the State Building Society in June 1986 and on the 24th of that month she completed the purchase. It is apparent from the evidence that she purchased the property as a home for herself and her children and that she lived in that home from the date of purchase until 16 May 1990. In the period when she was living there the State Building Society merged with the St George Building Society which, on 20 February 1989, served a notice under s 7 of the Act on the appellant. I would infer that the appellant resolved her differences with the St George Building Society for no proceedings seem to have been taken at that time against her. When she left Sydney the appellant leased her home for a period of twelve months. She said in evidence that she went to Queensland to attend a funeral and also to undertake some studies. In fact she commenced studies at Logan TAFE in August 1990 and in February 1991 she commenced a three year course, studying for a Bachelor of Informatics at Griffith University. She was a full-time student. She remained in Queensland until July 1993, initially in two apartments and in the latter months in a house at Camp Hill. While in Queensland the appellant sought to obtain a loan by way of refinance secured over her home in St Peters. She approached a broker and eventually secured a loan on 7 January 1993 for $90,000 from the respondent. She made some payments under that loan until April 1993 when she wrote to an officer of the respondent seeking some relief. She said that she then learnt that there was a possibility that the mortgage was invalid and she decided to make no further payments. I mentioned that she sought the loan by way of refinance. In fact part of it was used to discharge her liability to St George Building Society and another, and smaller, amount was used to pay out the Housing Corporation which had apparently also made a loan to her. It is not disputed that before any proceedings were commenced she was in breach under the mortgage for the loan from the respondent was for a period of twelve months, at the end of which she failed to repay the principal or pay interest. The respondent thereupon issued proceedings claiming possession of the premises and it is common ground that it had a great deal of difficulty in serving process upon the appellant. Eventually, it obtained an order for substituted service following which it purported to effect such service and, in the absence of an appearance, filed a default judgment". 14 The substantial ground of appeal was the effect of the first defendant's failure to give the notice required under s 7 of the Act. The plaintiff advanced her case on the basis that there existed between the parties a contract which was a home finance contract as defined, under which the first defendant was a credit provider as defined, being the person who provided the financial accommodation to her. In those circumstances she contended that s 7(1) of the Act expressly applied to prohibit the first defendant as a credit provider under a home finance contract instituting proceedings or exercising rights under the contract or the related mortgage in the absence of the service of a notice. His Honour, with whom Priestly and Cole, JJA agreed, upheld the appeal on this ground. 15 His Honour then said (pp 67-68): "The appellant also contended that she had an arguable case for relief under the Contracts Review Act 1980. The reasons given by his Honour persuade me that that submission is wrong. Finally, she contended that it was arguable that the wrong party had commenced the proceedings. I do not think it necessary to go into the detail of the submission. The appellant relied upon her mortgage broker to negotiate with a solicitor who acted for both the respondent and another company called M C Mortgage Services. It was the name of the latter company which was included as the mortgagee on the draft mortgage when it was signed by the appellant. However, the appellant signed a form of authority at the same time authorising the solicitors to change the name of the mortgagee. This is what eventually occurred when the respondent was substituted as the mortgagee. Not only did she sign the authority but she was notified of the change by a notice sent shortly after the execution of the mortgage, to which was annexed an epitome which made it quite clear that the respondent was the mortgagee. In addition, she made payments under the mortgage to the respondent. I regard this suggested defence as totally without substance or merit. The result is that the judgment should be set aside. This is not an entirely satisfactory resolution of the appeal for it means that much cost will have been wasted and, if the respondent serves a notice, there will eventually be no defence to its proceedings …". 16 His Honour reserved liberty to apply for an order for judgment in the action in favour of the plaintiff, which order was made on 25 March 1997. 17 On 30 August 1995 Sydney Water Corporation Limited lodged caveat no. 0493356 under which it claimed a charge over the property in respect of unpaid charges. 18 On 26 August 1996 Mr Patrick Lim, then the solicitor for Aluma-Lite Pty Ltd, personally served the plaintiff with a notice under s 57(2)(b) Real Property Act 1900 dated 22 May 1996, and with a notice in the form prescribed under s 7 of the Act, also dated 22 May 1996. In each notice the amount of principal and interest outstanding was stated to be $135,001.36. 19 On 7 February 1997 caveat no. 2821084 was registered on folio 1/105320 by the plaintiff. The interest claimed was described as "Proprietorship. Equity as Registered Proprietor". In Schedule 2 the action prohibited included the following: "1 The recording in the register of any dealing included a transfer by a Mortgagee exercising power of sale, Transfer of any Mortgage, and a Mortgage of a Mortgage, other than a plan affecting the estate or interest claimed by the caveator and set out in Schedule 1". 20 On 23 October 2003 change of name application AA73400 was registered on folio 1/105320 regarding the change of name of the registered mortgagee from Aluma-Lite Pty Ltd ACN 009 843 832 to Aluma-Lite Products Pty Ltd ACN 009 843 832, the first defendant. 21 On 23 October 2003 application for a replacement certificate of title AA73401 lodged by the first defendant was registered whereupon edition two of the certificate of title for folio 1/105320 was issued. 22 On or about 22 November 2003 the first defendant served the plaintiff with a notice in the form prescribed under s 7 of the Act dated 13 November 2003. The first defendant was described as the credit provider. The amount then owing was stated to be $242,156.11. The notice was served by pre-paid post pursuant to s 17 of the Act. 23 On 23 February 2004 in accordance with the first defendant's application the second defendant caused a lapsing notice pursuant to s 74J Real Property Act 1900 to be issued to the plaintiff. 24 By her letter of 26 March 2004 to the second defendant the plaintiff acknowledged that she had received the lapsing notice on 13 March 2004. In her letter she challenged the validity of the notice, and requested the second defendant to compel production of the certificate of title pursuant to s 12(1)(a) Real Property Act 1900 and to pay her expenses in answering the notice. It appears that the ground of the challenge was that Aluma-Lite Products Pty Ltd was not the true mortgagee, and therefore not entitled to apply for the lapsing notice. 25 By his letter of 2 April 2004 to the plaintiff, the second defendant stated his disagreement with the plaintiff's claims and his refusal to comply with her demands. He advised that should she wish to defend the caveat she should lodge, on or before 8 April 2004, an order of the Court extending its operation. 26 On 8 April 2004 the plaintiff filed the summons in these proceedings in which she claimed, inter alia, an order for extension of the operation of the caveat. On 28 April 2004 the Court ordered, by consent, that the caveat be extended until further order, and directions were given as to the further conduct of the matter. 27 On 8 September 2004 Marrickville Council lodged caveat no. AB14293, under which it claimed a charge over the property pursuant to s 550(1) Local Government Act 1993 in respect of outstanding rates in the amount of $14,171.72 as at 16 August 2004. 28 The plaintiff accepts that on or about 4 November 2005 she was served with a s 57(2)(b) notice (T p 15; 20/12/05). The notice is dated 14 September 2005, in which the total amount owing under the mortgage was stated to be $270,198.41. The first defendant was described as the credit provider to which the amount was owing. The attack on the mortgage 29 In these proceedings the plaintiff challenged the existence and validity of the mortgage. She raised issues as to the identity of the mortgagee, and as to the identity of the credit provider under the contract by which the money was lent, and whether the documentation failed to comply with the requirements of the Real Property Act Regulations 1970 (repealed 27 August 1993) with the consequence that terms and conditions as to repayment of principal and payment of interest were not incorporated in the mortgage, in support of her denial of default to the first defendant. She contended that the first defendant was not entitled to claim possession, and for that purpose to serve any required notice which identified her default. She apparently adhered to the position that she has only been liable to M C Mortgage Services Pty Ltd. 30 The first defendant submitted that, in the circumstances, the doctrines of res judicata and issue estoppel and the principle of estoppel as explained in Port of Melbourne Authority v Anshun Pty Ltd (1991) 147 CLR 589 operate to prevent the plaintiff from pursuing these issues in these proceedings. 31 In the earlier proceedings Hulme, J considered numerous grounds of defence in support of the application to set aside the default judgment. He decided that the plaintiff had no defence and, in his view, no useful purpose would be served by setting the judgment aside. He declined to do so. Before the Court of Appeal the plaintiff argued the availability of various defences some of which were similar to those raised in these proceedings. That court held, in effect, that but for the defence under s 7(1) of the Act there would be no defence to the claim for possession. 32 In my opinion the estoppels relied upon by the first defendant prevent the plaintiff from pursuing challenges to the validity of the mortgage and/or to her liability to make payments to the first defendant under it. The foundation of the decision to uphold her appeal was the finding that there existed a contract between the parties under which the first defendant had advanced to the plaintiff the monies secured by the mortgage. It is simply not conscionable to permit the plaintiff to pursue matters against the first defendant which contradict the basis upon which she succeeded in defending its earlier claim for possession. In any event, if it be said that there is some difference in substance between the defences argued in these proceedings and those canvassed in the earlier proceedings, in my opinion it was unreasonable for the plaintiff to have refrained from raising them in the earlier proceedings in which she had ample opportunity to do so. 33 In Anshun (p 602) it was said: "Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding". 34 It is also apt to refer to the remarks of Hobhouse, J in Dallal v Bank Mellat [1986] QB 441, p 451 cited in Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, pp 510-511: "There must be an end to litigation. A defendant must be protected against the repeated bringing of actions by the same person in respect of substantially the same subject matter. Therefore, where this procedural abuse is identified, the courts provide the defendant with the procedural remedy of striking out". 35 Accordingly, the defences to the existence of a valid mortgage are rejected. 36 Exhibits F, G, H and P were documents which evidenced the circumstances in which the mortgage was given and the loan was made. They were admitted subject to relevance. I find they were relevant to the case the plaintiff sought to make. The s 7(1) notice 37 On about 22 November 2003 the plaintiff was served with a notice under s 7(1) of the Act. The relevant provisions of the Act are set out in Graham and it is unnecessary to recite them. In short, under s 7(1) the first defendant was prohibited from instituting proceedings or exercising its rights to recover possession until after the expiration of one month after service of a notice in the prescribed form that specified the proceedings or right. The prescribed form is in schedule 1 to the regulations under the Act. 38 The plaintiff contended that she had a defence to the claim on grounds that the notice lacked specificity and thus was not in accordance with the prescribed form, and erroneously stated that the first defendant, and not M C Mortgage Services Pty Ltd, was the credit provider. Alternatively, she claimed that at the time of the notice the first defendant was no longer the credit provider, having assigned its rights to Elmo Services Pty Ltd, the third defendant, on 24 September 2003. 39 A copy of the notice is annexure A to the affidavit of Jason Spencer sworn 1 December 2005. It identified the first defendant as the credit provider. Relevantly, it included the following: "After one month from the time this Notice is received Aluma-lite Products Pty Ltd ACN 009 843 832 (the credit provider) intends to take legal action or exercise a right under a home finance contract against Barbara Anne Graham. The credit provider's reasons are given at the end of this Notice, together with: (a) the amount the credit provider claims to be owed under the contract; and (b) details of the contract. This Notice is given to the debtor under a home finance contract and any guarantor of that contract. You should discuss this matter with the credit provider as soon as possible. … If you disagree with anything in this Notice, including what it says is owed, contact Consumer Affairs or seek legal advice immediately. There are other people, such as financial counsellors who may be able to help. REASONS FOR, AND NATURE OF, INTENDED LEGAL ACTION OR EXERCISE. (a) Arrears Balance of Loan Principal Outstanding $ 89,975.00 Interest accrued $152,181.11 TOTAL $242,156.11 *See attached printout for calculation of amount outstanding". Attached to the notice was a printout containing information for calculation of the amount outstanding. The notice specified the number of payments in arrears, and the period to which the arrears related. It also included: "(c) Nature of intended legal action or exercise of right: Exercise of the credit provider's power of sale of the property at 47 May Street, St Peters, NSW including actions for recovery of possession of that property and or recovery of the monies owing to the credit provider". Under the heading "Details of Home Finance Contract" reference was made to the details of the loan, the registered mortgage number, and particulars of the property. 40 As explained in Graham (pp 65, 73) the purpose of the notice is to afford a debtor upon whom it was served the opportunity to remedy default or to seek relief under s 5. 41 In my opinion any reasonable recipient of the notice of 13 November 2003 would be left in no doubt as to the nature of the claim and the basis for it. In plain terms the recipient is advised to contact Consumer Affairs or seek legal advice immediately if he or she disagrees with anything in the notice. In terms the proceedings or right are specified. I find that, both in substance and in form, the notice is in accordance with the prescribed form. The plaintiff's challenge is entirely without merit and is rejected as a defence. 42 The plaintiff also contended that the notice was invalid on the ground that the first defendant was not the credit provider for the purposes of s 7(1). She submitted that at all material times the credit provider within the meaning of the Act was M C Mortgage Services Pty Ltd, which was the name of the mortgagee in the draft mortgage when it was signed by her. As I understood it, she argued that as M C Mortgage Services Pty Ltd had not served a notice, there had been no compliance with s 7(1), and hence the first defendant was prohibited from exercising its rights under the mortgage. Her argument was that although the first defendant is the mortgagee it was never the credit provider. 43 In my opinion the effect of the findings and decision of the Court of Appeal estops the plaintiff from pursuing these issues in these proceedings (Graham, pp 67G-68B). Furthermore, it was essential to her success to contend, and to have found in her favour, that the first defendant was the credit provider under the contract between the parties and the party subject to the requirements of s 7(1). She defeated its claim by demonstrating that the contract between them was a home finance contract which gave rise to the unfulfilled requirement to give the statutory notice before exercising its rights. 44 In these proceedings it would not be reasonable to permit the plaintiff to argue that the notice would be invalid if issued by the first defendant when she had earlier successfully claimed that it was the credit provider under the contract and therefore required by statute to issue the notice. The defence on this ground has no merit and is rejected. 45 Another challenge to the notice was on the ground that at the time of its service on or about 22 November 2003, the third defendant was the credit provider by reason of an assignment to it of the first defendant's rights under the contract, and that as the first defendant was not then the credit provider it could not rely on the notice. 46 The term "credit provider" is defined in s 4 of the Act as follows: " credit provider means, in relation to a home finance contract: (a) the person who provided the credit under the contract, and (b) any person to whom the rights under the contract of the person referred to in paragraph (a) pass, whether by operation of law or otherwise". 47 No assignment agreement was in evidence. The plaintiff asserted (T p 113) that she had been given no notice of an assignment until shortly before 8 April 2004 which I took to be a reference to the letter of 2 April 2004 from the second defendant, which included the following: "I confirm that in addition to Application for Preparation of Lapsing Notice AA439749, Transfer of Mortgage AA475171 has also been lodged. That dealing seeks to transfer Mortgage I 131876 from Aluma-Lite Products Pty Ltd to Elma Services Pty Ltd. Your Caveat 2821084 currently prevents registration of that Transfer of Mortgage. However, should your Caveat lapse, then the Transfer of Mortgage would be registered". 48 Consistent with her statement, there was no evidence that a notice of assignment under s 12 Conveyancing Act 1919 had been given to her. 49 In evidence was a form of transfer of the mortgage dated 24 September 2003 in which the first defendant is the transferor and the third defendant is the transferee. The document was lodged for registration and given the number AA475171R on 5 March 2004. Registration was prevented by the plaintiff's caveat and the document was withdrawn and returned to the first defendant. 50 In his affidavit of 2 December 2005 Mr D B Williams stated that the first defendant had assigned its interest in the mortgage to the third defendant which assignment had been frustrated by the caveat and thereafter was rescinded. Annexed to his affidavit was a document entitled "Deed of Rescission" signed on behalf of the first defendant and the third defendant, apparently on 13 September 2005. Relevantly, recital C stated: "C. On 24 September 2003 Aluma-lite subsequently assigned its rights and interests pursuant to the loan agreement and the associated security to Elmo (the 'Assignment')". The document included the following clauses: 1. Rescission The parties hereby agree to rescind and rescind the Assignment ab initio. Aluma-lite hereby revokes any power of sale as contained in the Deed of Assignment. 2. Parties to Provide assistance Aluma-lite agrees to execute immediately upon the execution of this deed a deed in the form attached herewith and marked "A" to signify the re-assignment of the debt and arrears to Aluma-lite". The document referred to was in the form of a notice to the plaintiff under the heading "Notice of Assignment". It gave notice that the assignment of the first defendant's rights and interests in the loan of $90,000.00 secured by the mortgage to the third defendant had been rescinded and "re-assigned back" (sic) to the first defendant. It directed payment of arrears of interest and the debt to the first defendant. It was dated 13 September 2005. 51 In my opinion the evidence does not support a finding that at the time the notice was given the third defendant was a person to which the first defendant's rights under the contract had passed. 52 The terms, conditions, extent, and effect of any assignment remain matters of speculation absent the documentation. The form of transfer takes the matter no further. The evidence is that at all relevant times the first defendant was, and is, the registered mortgagee with all its rights under the mortgage, and no transfer of them has ever been effected. 53 Of greater significance, irrespective of the terms and conditions of an assignment, is the fact that no notice under s 12 Conveyancing Act 1919 had been given to the plaintiff. Absent giving such notice the third defendant obtained no legal right to the debt to the first defendant. In McIntosh v Shashoua (1931) 46 CLR 494, pp 514-515 Evatt, J said: "If express notice in writing of an absolute assignment of a debt is given to the debtor, then, but not till then, the assignee obtains the legal right and the legal remedy to the debt". 54 In the circumstances it seems highly likely that had the third defendant asserted it was the credit provider and gave the plaintiff a s 7(1) notice, she would have contested its validity, and denied that the third defendant was a credit provider as defined. In my opinion this ground of defence fails. The s 57(2)(b) notice 55 The first defendant relies on the notices under s 57(2)(b) Real Property Act 1900 dated 22 May 1996, 30 September 2003, and 14 September 2005. It relies, principally, on the last mentioned notice which the plaintiff accepts was served on or about 4 November 2005. The plaintiff also said that on 3 October 2003 she received in the post the notice dated 30 September 2003. It is unnecessary to consider the notice of 22 May 1996. 56 The notices of 30 September 2003 and 14 September 2005 are in identical terms except for the amount claimed to be owing at the date of each. The amount owing as at 30 September 2003 was stated to be $240,881.46, and as at 14 September 2005 was $270,198.41. 57 The plaintiff submitted that as the cross-claim was filed on 1 September 2004 the notice of 14 September 2005 failed to comply with the requirement of s 57(3)(d) which was to give one month's notice of a proposal to exercise the power of sale unless the default was remedied, and was thus ineffective for the purpose of these proceedings. She also challenged the notices on grounds, as I understand them, that they did not sufficiently specify the defaults alleged, alternatively, specified non-existent defaults. 58 In my opinion these submissions should be rejected as unsupported by the evidence. Each notice unambiguously specified the default to be the failure to pay the amount. Each stated that the plaintiff, as mortgagor, was required to pay the amount owing. Each included the following statement: "3. Unless the mortgagor complies with the requirements of this notice within 31 days after service of this notice, it is proposed to exercise a power of sale in respect of the Mortgaged Property". 59 These statements correctly identify the default for the plaintiff to remedy and hence comply with s 57(3)(b)(ii). The plaintiff has always accepted that she has been in default. I am satisfied that each notice fulfils the requirement of the statute, is not defective in form, and did not mislead the plaintiff. Each notice meets the requirements considered, for example, in Wongala Holdings Pty Ltd v Mulinglebar Pty Ltd (Unreported, NSWCA, 16 August 1994). 60 It is also relevant that the giving of the notice is a condition precedent to the exercise by the mortgagee of rights both to sell and to demand payment of the whole of the monies payable under the mortgage (Carr v Finance Corporation of Australia Ltd (No. 2) (1982) 150 CLR 139, pp 149, 151). The exercise of the power of sale is a right which may be enforced without regard to litigation (Carr, per Brennan, J, p 157). In my opinion, upon the proper construction of s 57(2) and (3), failure to comply with the notice requirement does not prevent the institution of legal proceedings. In this respect the terms of subs (2) and (3) may be contrasted with those of s 7(1) of the Act which expressly prohibits the institution of proceedings or the exercise of a right. 61 In my opinion the fact that the latest notice was given after the institution of the claim under the cross-claim for an order for possession does not preclude the first defendant from relying upon it for the purpose of the exercise of the power of sale. 62 In addition, the plaintiff submitted that, in the circumstances, the first defendant was required by s 92 Conveyancing Act 1919 to give her three months within which to remedy her default rather than one month under s 57(2)(b) and (3)(d) Real Property Act 1900. Relevantly, s 92, which applies to mortgages under the Real Property Act 1900, provides: "(1) Where the mortgagor has made default in payment of the principal sum at the expiry of the term of the mortgage, … and the mortgagee has accepted interest on the said sum for any period (not being less than three months) after default has been so made, then, , so long as the mortgagor performs and observes all covenants expressed or implied in the mortgage, other than the covenant for payment of the principal sum, the mortgagee shall not be entitled to take proceedings to compel payment of the said sum, or for foreclosure, or to enter into possession, or to exercise any power of sale, without giving to the mortgagor three months' notice of his or her intention so to do". 63 To the extent that I understood her submission, the plaintiff argued that the circumstances which attracted the application of s 92(1) were as follows. 64 By her letter to the first defendant of 11 November 1999 she claimed costs payable to her incurred in the appeal. In particular, she claimed filing fees in the sum of $1,550.00 to be due and payable, and required that payment be made direct to court. She also enclosed an invoice of amounts claimed to have been incurred, and advised that further details of costs and disbursements payable by the first defendant would be forwarded when identified. 65 By letter of 21 December 1999 the first defendant replied: "Please offset this cost against the debt you owe Aluma-Lite Products Pty Ltd, pursuant to the mortgage". 66 The plaintiff stated that there had been no assessment of the costs payable to her as ordered by the Court of Appeal. 67 These letters were contained in exhibit K which was admitted subject to relevance. After further elucidation that condition was fulfilled. 68 The plaintiff submitted (T p 124) that the first defendant's letter is evidence that it "… accepted interest or … has accepted principal". 69 In my opinion this correspondence provides no support for her submission. The undisputed evidence is that no payment of interest has been made since 9 December 1993 and that the term of the mortgage expired on 22 January 1994, when payment of the principal sum was due. Neither letter makes reference to interest or to any period and, in my opinion, the first defendant's letter provides no basis for the conclusion that it accepted interest on the principal sum for any period, or at all. Accordingly, I find that s 92 Conveyancing Act 1919 has no application on the facts in this case. Defences under the Limitation Act 1969 70 In paras 8, 9, 10, 11 and 12 of her notice of defence to notice of cross-claim the plaintiff pleaded that the first defendant was barred by the Limitation Act 1969 from claims for the recovery of principal and interest, possession of the property, and for the exercise of its powers under the mortgage. She made no oral submissions on these issues but referred to them in paras 64 and 65 of her written submissions delivered 28 April 2006. 71 By its notice of cross-claim filed 1 September 2004 the first defendant claims recovery of possession. No claim is made to recover the principal secured by the mortgage. The relevant limitation period, which is under s 42(1)(b) Limitation Act 1969, is 12 years and that period commenced on 23 January 1994 being the day after the due date for repayment of the principal. Accordingly, I hold that the plaintiff has no defence under this Act. Other matters 72 The plaintiff admits that she has not paid water or council rates since about October or November 1992 (T p 162). Sydney Water Corporation Limited and Marrickville Council have each lodged caveats in which a charge is claimed in respect of unpaid rates. The evidence establishes, and I find, that the plaintiff's failure to pay such rates constituted a breach of cl 5(c) of the mortgage. Conclusion 73 For the above reasons I find that the plaintiff has no defence to the first defendant's claims for possession, and for an order pursuant to s 74MA Real Property Act 1900 that her caveat be removed. It follows that her amended summons must be dismissed. 74 During the hearing on 8 February 2006 the first defendant specified the terms of the orders which it sought. These orders are set out in a document headed "Orders" which, for identification, I have initialled and dated 8 February 2006. On that day the plaintiff was given a copy of the document and its terms were read to her (T pp 36, 37). I propose to make orders as sought except (consistent with proposed order 6) to order a stay of the order for possession until 22 June 2006. 75 The court orders that: (1) The amended summons be dismissed. (2) The plaintiff remove caveat no. 2821084 from certificate of title folio identifier 1/105320 pursuant to s 74MA Real Property Act 1900 within seven days. (3) The first defendant/cross-claimant be granted possession of the land comprised in certificate of title folio identifier 1/105320 being the property known as 47 May Street, St Peters. (4) The plaintiff pay the first defendant's and third defendant's costs of the proceedings, including the cross-claim. (5) These orders be entered forthwith. (6) Order (3) be stayed until 22 June 2006. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.