SA Supreme Court rules on unclaimed goods left inside mortgaged property

The parties made several attempts to remove the goods, but failed to reach an agreement

SA Supreme Court rules on unclaimed goods left inside mortgaged property

The Supreme Court of South Australia – Court of Appeal has recently ruled on the issue of goods left unclaimed in a property subject to a mortgage.

In Foundas v Heritage and Peoples Choice Limited [2023] SASCA 87, the applicant and his wife were the registered proprietors of a residential property in Murray Bridge, subject to a mortgage. The applicant granted the mortgage as a security for a loan he and his wife obtained from the respondent, Heritage and People’s Choice Limited.

Heritage commenced proceedings against the applicant, seeking possession of the Murray Bridge property. The court issued an order of possession, and the applicant failed to appeal this possession order.

Heritage requested the court for a possession order, which was granted. The sheriff’s office executed the warrant of possession and ultimately delivered vacant possession of the Murray Bridge to Heritage.

Several goods and personal items were left on the Murray Bridge property. Heritage made several attempts to arrange for the applicant to remove the remaining goods, but the parties failed to reach an agreement. Heritage eventually decided to move the goods into storage and wrote to the applicant, informing him that following the Unclaimed Goods Act, the remaining goods would become “unclaimed goods” if they were not collected within 42 days of the date of the notice. The notice further warned that Heritage, as bailee, was entitled to sell or dispose of the unclaimed goods at the expiry of three months from the date upon which the remaining goods became unclaimed.

The applicant failed to collect the remaining goods within 42 days of the notice, and consequently, they became unclaimed goods. After a further three months expiration, Heritage became entitled to sell or dispose of the remaining goods. Since the value of the goods exceeded $500, the Unclaimed Goods Act requires that Heritage first obtain the court’s authorisation before selling or disposing of the remaining goods.

A magistrate then issued an order authorising Heritage to sell or dispose of any remaining goods. The applicant filed an appeal against the magistrate’s ruling and sought an extension of time within which to appeal. The judge heard the appeal and found that Heritage suffered ongoing prejudice regarding storage and legal costs. The judge ultimately denied the applicant’s request to extend time and dismissed the appeal.

Since the applicant sought to appeal from a judgement of the Magistrates Court, leave to appeal is required. The Supreme Court of South Australia – Court of Appeal noted that in considering whether leave to appeal should be granted, it is appropriate to have regard to whether the impugned orders are attended with sufficient doubt to warrant their consideration of the appeal, whether the proposed appeal raises an issue or principle or general importance, and whether leaving those orders to stand would cause any substantial injustice to the applicant.

The court noted that the applicant’s grounds of appeal and written submissions consist primarily of complaints that he did not abandon the remaining goods and about his treatment by Heritage. The court said that to the extent that they address at all the order made by the magistrate, they do not raise any arguable basis for concluding that the magistrate committed an error. The court further said that the applicant’s arguments do not raise any issue of principle or general importance.

Further, and in any event, the court held that leaving the orders below to stand would not cause the applicant any substantial injustice. According to Heritage, all the remaining goods in its possession have been returned to the applicant. Heritage has also indicated its preparedness to arrange for the delivery or collection of the care and trailer. Accordingly, the court dismissed the application for leave to appeal.

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