Mortgage Recovery Actions – now and then

The procedural requirements for mortgage recovery proceedings were substantially amended with the enactment of the Supreme Court Amendment Rules 2016 (WA) (Amendment Rules).

As a result, since 23 November 2016 there is a parallel system in operation, where:

former Order 62A of the Rules of the Supreme Court 1971 (WA) (Rules) continues to apply in relation to some matters (designated as ‘Transitional Proceedings’ under the Amendment Rules) :

  • new Order 4AA applies to other matters; and
  • an amended version of Order 13 (dealing with default judgments) applies to all matters.

We have been involved in a number of recent matters that have assisted in clarifying the interaction of these systems.

What procedural requirements apply?

  • As things now stand, the former Order 62A process continues to apply to writs served before 23 November 2016.
  • New Order 4AA applies to writs of summons that are served on or after 23 November 2016.
  • If there are multiple defendants in a mortgage action and not all were served prior to 23 November 2016, the different default judgment procedures will apply depending on the date of service.[1]
  • Which regime governs the enforcement of judgments was the subject of uncertainty (at least on our assessment) and the subject of two recent (unreported) matters.
  • In the first case, default judgment was sought against only one of the named defendants due to the plaintiff’s inability to serve the writ on the other defendant.
  • In considering whether to make orders as against the first defendant, the Court queried whether the introduction of Order 4AA and amendment of Order 13 had the effect of staying the lender’s enforcement of any default judgment entered against the first defendant until such time as judgment had been entered as against the yet unserved second defendant.
  • The plaintiff, in arguing that it did not, submitted that proper construction and application of the new Order 13 Rule 6(5) must mean that a plaintiff should be free to enforce a judgment obtained under Transitional Proceedings, regardless of the absence of a judgment under Order 4AA.
  • Ultimately the Court upheld the plaintiff’s position such that the absence of a judgment under Order 4AA is no bar to enforcing a judgment obtained under the Transitional Proceedings.
  • However, guidance received from the Court in relation to another recent matter has clarified that the new requirement to personally serve default judgments under Order 13, applies equally to Transitional Proceedings and proceedings under the Amendment Rules.
  • Importantly, it will be open on a case by case basis to apply for leave to waive that requirement of personal service, by way of a substituted service application.

Lavan comment

It is apparent that Transitional Proceedings are subject to some, but not all, of the new requirements introduced by the Amendment Rules.

Mortgagees seeking to take possession of mortgaged properties must familiarise themselves with the new procedural requirements and ensure that mortgage recovery actions, whether Transitional Proceedings or not, are compliant with the Rules.