The Trial Division of the Supreme Court (Justice Quigley) has found that the Sheriff for the State of Victoria and the authorised officer acting on its behalf (together, ‘the Sheriff’), have breached their common law duty to act reasonably in the interests of both the judgment debtor and judgment creditor in order to obtain a fair price in the execution of a warrant of seizure and sale of Ms Hoskin’s property at Ligar St, Kennington.
Ms Hoskin’s property was sold at auction on 23 November 2017 by the Sheriff who was acting on two warrants in relation to a debt owed by her to a creditor, Ask Funding Limited. At auction, the property was sold for $387,000 to the only bidder. This price was approximately $180 more than the debt owed by Ms Hoskin and was an amount equal to the reserve set by the Sheriff.
Prior to the auction, the Sheriff had obtained two ‘kerbside’ valuations from the Valuer-General, which valued the property at $450,000 in October 2015 and $475,000 in November 2017. Based on the second valuation, the reserve was set at $387,000 by the Sheriff according to its usual processes and procedures. The Sheriff was at this time aware that the property was advertised online by a real estate agent for a sale price range of $750,000–$825,000 and a City of Bendigo rates notice which stated that the property had a capital improved value of $576,000. In the lead up to the auction, Ms Hoskin told the Sheriff a number of times that the market value of the property was in excess of $700,000. After the auction, a sworn valuation was obtained by her which valued the Property at $720,000.
In the face of all of the material that was before the Sheriff, the Court found that it was difficult to accept that reliance on the second ‘kerbside’ valuation prepared by the Valuer-General alone was reasonable. The Court said that obtaining a ‘kerbside’ valuation does not automatically ensure that a fair price will be obtained in all the circumstances, that it does not immunise the Sheriff from liability nor automatically satisfy the duties owed. It found that a reasonable person in the shoes of the Sheriff ought to have revisited the assessment of market value by making further enquiries, prior to auctioning the property.
In finding that the Sheriff did breach its duty, the Court found that that the process which led to the Sheriff setting the reserve was flawed, and that this inevitably led to the sale at a significant undervalue and not a ‘fair price’ in all the circumstances.
Ms Hoskin seeks to set aside the sale. Consistent with the request by the parties, the Court was asked to rule only on the liability of the Sheriff’s actions with further submissions to be made by all parties on the question of appropriate orders in the circumstances including whether the sale should be set aside or damages be awarded.
NOTE: This summary is necessarily incomplete. It is not intended as a substitute for the Court’s reasons or to be used in any later consideration of the Court’s reasons. The only authoritative pronouncement of the Court’s reasons and conclusions is that contained in the published reasons for judgment.