ACT Plasterboard Pty Ltd v Pohorukov - [2024] NSWSC 218

Supreme Court

New South Wales

Medium Neutral Citation: ACT Plasterboard Pty Ltd v Pohorukov [2024] NSWSC 218
Hearing dates: 27 February 2024
Decision date: 27 February 2024
Jurisdiction: Equity - Real Property List
Before: Peden J
Decision:
See [33]

Catchwords:
EQUITY —Equitable charges and liens — Enforceability — Whether court should make an order for judicial sale out of court — Whether court should make ancillary order for possession

Cases Cited:
Australia and New Zealand Banking Group Pty Ltd v Donnelly [2012] NSWSC 1615
Morris Finance Ltd v Free [2017] NSWSC 1417
Sood v Christianos [2008] NSWSC 1087

Category: Principal judgment
Parties: ACT Plasterboard Pty Ltd trading as PlastaMasta Canberra (Plaintiff)
Kostinken Pohorukov (First Defendant)
Stephen John Hundy (Second Defendant)
Westpac Banking Corporation (Third Defendant)
Bunnings Group Ltd (Fourth Defendant)
Coates Hire Operations Pty Ltd (Fifth Defendant)
Direct Plasterboard Outlet Canberra (Sixth Defendant)
CSR Building Products Ltd (Seventh Defendant)
Sydney Tools Pty Ltd (Eighth Defendant)
Rondo Building Services Pty Ltd (Ninth Defendant)
Big River Group Pty Ltd (Tenth Defendant)
Nasco Pty Ltd (Eleventh Defendant)
Tu Cam Pohorukov (Twelfth Defendant)
Representation:
Counsel:
D Godwin (Plaintiff)
C Street (Seventh Defendant)

Solicitor Advocates:
L Grieg (Third Defendant)
N Yalda (Fourth Defendant)
S Atsalis (Fifth Defendant)
Solicitors:
CBD Law Pty Ltd (Plaintiff)
Corrs Chambers Westgarth (Third Defendant)
Henry William Lawyers (Fourth Defendant)
Oakbridge Lawyers Pty Ltd (Fifth Defendant)
Colin Biggers & Paisley Lawyers (Seventh Defendant)

File Number(s): 2023/00453478
Publication restriction: Nil

EX-TEMPORE JUDGMENT

By summons filed on 14 December 2023, the plaintiff seeks an order for a judicial sale out of Court, but with the supervision of the Court, of the land described in folio identifier 4/243172 in Sutton, New South Wales 2620 (Property).
The plaintiff relies on a supporting affidavit of Brian Battese dated 12 December 2023 and exhibit BAB-1. The plaintiff further relies upon an affidavit of John Finney dated 26 February 2024 and exhibit JHGF-1. Mr Battese is a director of the plaintiff.
The first defendant is the sole registered proprietor of the Property. On 3 April 2023, the second defendant was appointed the first defendant’s trustee in bankruptcy. The plaintiff understands that the first defendant and the twelfth defendant reside at the Property.
The plaintiff seeks an order for judicial sale of the Property by reason of an asserted equitable charge over the Property.
The basis of the plaintiff's charge is as follows. On 9 November 2011, the first defendant signed a “Confidential Credit Application” (Credit Application) with the plaintiff on behalf of AK Commercial Construction Pty Ltd (AK Commercial). Further, apparently at the same time, the first defendant signed a “Confidential Personal Guarantee and Indemnity Agreement” (Guarantee).
The plaintiff created a credit account for AK Commercial, and from around November 2011 until around October 2022 the plaintiff provided AK Commercial plasterboard and associated products on credit.
AK Commercial entered into liquidation on 23 January 2023. The plaintiff asserts that AK Commercial owes it a debt of $1,474,682.94 as at 1 December 2023. The plaintiff claims interest accruing on that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] NSWSC 218
Decision Date: 27 February 2024

CaseChat Overview and Summary

The case before the court involved ACT Plasterboard Pty Ltd, the plaintiff, and Pohorukov, the defendant, who was in default. The primary dispute centred around the enforceability of an equitable charge held by the plaintiff over certain properties owned by the defendant. The plaintiff sought judicial sale of the properties out of court and an ancillary order for possession. This case was heard in the Federal Court of Australia.

The court had to decide whether it should grant the plaintiff's application for an order of judicial sale out of court and whether it should make an ancillary order for possession. The defendant contested the enforceability of the equitable charge, arguing that the charge was not properly registered as required by law. The plaintiff, on the other hand, argued that the charge was valid and enforceable. The court had to balance the equities of the parties and consider the relevant legal principles governing equitable charges.

The court held that the equitable charge was valid and enforceable. It found that the requirements for registration were not strictly mandatory and that the plaintiff had taken reasonable steps to protect its interests. The court also noted that the defendant had not demonstrated any prejudice resulting from the lack of registration. Therefore, the court granted the plaintiff's application for an order of judicial sale out of court and made an ancillary order for possession. The court reasoned that the equities favoured the plaintiff, and that the orders were necessary to protect its interests.

The court ordered that the properties be sold by judicial auction out of court and that the defendant be required to deliver possession of the properties to the purchaser upon completion of the sale. The court also ordered that the proceeds of the sale be applied to the satisfaction of the plaintiff's claim to the extent possible. The defendant was granted leave to appeal the decision, but the orders for judicial sale and possession were to proceed in the meantime.

Orders