Arraf v Jonvana Enterprises Pty Ltd

[2006] NSWSC 1432

CITATION:	Arraf v Jonvana Enterprises Pty Ltd [2006] NSWSC 1432
HEARING DATE(S):	15 December 2006
JUDGMENT DATE :	15 December 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	12/15/2006
DECISION:	Application for injunction dismissed.
CATCHWORDS:	INJUNCTION – Urgent application to restrain exercise of mortgagee’s power of sale – mortgagor has no defence in law or equity – alleged non-receipt of s.57(2)(b) Notice no proof that Notice not served under s.170 Conveyancing Act – unreasonable delay in bringing application
LEGISLATION CITED:	Conveyancing Act 1919 – s.170(1)(b) Real Property Act 1900 (NSW) – s.57(2)(b)
PARTIES:	Essam Arraf – Plaintiff Jonvana Enterprises Pty Ltd – Defendant
FILE NUMBER(S):	SC 6336/06
COUNSEL:	D.M. Roberts – Plaintiff G.P. George – Defendant
SOLICITORS:	M.R. Barber & Associates – Plaintiff Pateman Legal – Defendant

6336/06 Arraf v Jonvana Enterprises Pty Ltd

JUDGMENT – Ex tempore
15 December, 2006

1    This is an application by the Plaintiff for an order restraining the Defendant from proceeding with an auction of certain land owned by the Plaintiff pursuant to the Defendant’s power of sale under a mortgage. The application has been made orally, i.e. without a Notice of Motion, at 4.45pm, the auction being scheduled for tomorrow.

2    It is difficult to understand the basis on which the Plaintiff opposes the auction tomorrow, because the Plaintiff’s legal advisers have been extremely hampered by the paucity and lateness of instructions from their client. No affidavit evidence was tendered by the Plaintiff in support of the application, due, it was said, to lack of time, and the Plaintiff’s solicitor gave evidence orally on information and belief.

3    As far as I could gather, the Plaintiff says that he is not in default under the mortgage because there were arrangements made between himself and other persons for the payment to the mortgagee of the instalments due under the mortgage. However, the Plaintiff’s solicitor quite frankly said that she did not know, and therefore could not say, that the mortgagee was party to these alleged arrangements for payment of the mortgage instalments.

4    Clearly, if the Plaintiff has made arrangements with persons other than the mortgagee for payments of amounts due under the mortgage, those obligations undertaken by third parties and the failure of those third parties to honour their obligations, provide no defence in law or in equity to a claim by the mortgagee under the mortgage.

5    The first difficulty that the Plaintiff faces, therefore, is that, as far as the evidence presently reveals, there is no defence, either at law or in equity, to the Plaintiff’s claim under the mortgage.

6    The lack of instructions provided to the Plaintiff’s solicitor goes so far as to bring about a frankly conceded ignorance on her part – for which I do not for one moment criticise her – as to whether or not the Plaintiff says that the mortgage is paid up to date or is in default. However, correspondence between the Defendant’s solicitors and the Plaintiff since about 2004, which has been put in evidence by the Defendant, makes it quite plain that the mortgage has been in default, and that the Defendant has communicated on several occasions, by email and by correspondence with the Plaintiff, to require the Plaintiff to make the payments due under the mortgage.

7    It seems to me that there is not even an arguable case, let alone a serious question to be tried on the evidence which has been adduced so far, that the Plaintiff has any defence in law or equity to the claim under the mortgage.

8 The second question that has arisen is whether or not a notice under s.57(2)(b) of the Real Property Act 1900 (NSW) has been served upon the Plaintiff by the Defendant. If that notice has not been served, the power of sale which would otherwise be exercisable under the mortgage is not exercisable at all, notwithstanding that the Plaintiff may be in default under the mortgage. Through his solicitor, the Plaintiff says that he has not received any such notice. However, the evidence tendered by the Defendant shows that the Defendant’s solicitors sent what appears to be a perfectly valid s.57(2)(b) notice by post to the Plaintiff at the property the subject of the mortgage.

9 The Plaintiff, through his solicitor, said in evidence that the subject property was the principal place of residence of the Plaintiff, although he lived there only on occasion and in a caravan, because the house on the property had burned down some time ago. Nevertheless, the evidence of the Plaintiff’s solicitor was that, so far as the Plaintiff has any principal place of residence in this country, it is the address to which the Defendant’s s.57(2)(b) notice was posted.

10 In those circumstances, I am not persuaded that there is any basis for a finding, or even for an argument, that the notice under s.57(2)(b) was not served upon the Plaintiff as required by s.170(1)(b) of the Conveyancing Act 1919 (NSW). Accordingly, it does not seem to me that there is any seriously arguable question that the power of sale is not presently exercisable.

11    The third problem which the Plaintiff faces is that of delay. The Plaintiff’s solicitor says she was first instructed to oppose the exercise of the Defendant’s power of sale in late November this year. However, the Defendant’s evidence shows that the Defendant’s solicitors have been in communication with the Plaintiff for some years, at least since 2004, in regard to the Plaintiff’s alleged default under the mortgage. There is also e-mail correspondence with the Plaintiff at the beginning of November this year, and it appears that the Plaintiff was notified, at least in September this year, by email, that the Defendant intended to auction the property.

12    The Plaintiff’s solicitor says that the Plaintiff is now living overseas. However, I do not regard this as a sufficient explanation or justification for the delay on the Plaintiff’s part in taking any action to restrain the auction tomorrow in circumstances where it must reasonably be concluded that he was aware of the intended auction some six weeks or so ago. It is simply not satisfactory for the Plaintiff to have waited for such a time in the knowledge of the impending auction, and to make his application for injunction at the very last moment, on the last day of the law term.

13    For those reasons, I decline to grant the relief sought by the Plaintiff. The application is dismissed.

14    I think the cost of today’s application should follow the event. The Plaintiff will pay the Defendant’s costs of the application for interlocutory relief.

15    I will stand the proceedings into the Registrar’s list for directions on 1 February 2007.

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