AT Air Group Pty Ltd v Dieter Siewart; (No 5 )

[2014] NSWSC 1709

Supreme Court

New South Wales

Medium Neutral Citation:	AT Air Group Pty Ltd v Dieter Siewart; (No 5 ) [2014] NSWSC 1709
Hearing dates:	1 December 2014
Date of orders:	01 December 2014
Decision date:	01 December 2014
Jurisdiction:	Equity Division - Corporations List
Before:	Brereton J
Decision:	Proceedings stayed unless plaintiff remedies breach of undertaking. Liberty to apply.
Catchwords:	PROCEDURE – judgment and orders – undertaking to court – default – alleged but not proven due to impecuniosity – proceedings stayed.
Cases Cited:	AT Air Group Pty Limited v Dieter Siewert (No 3) [2014] NSWSC 1129 AT Air Group Pty Limited v Dieter Siewert (No 4) [2014] NSWSC 1186
Category:	Procedural and other rulings
Parties:	AT Air Group Pty Ltd (first plaintiff) Ross Edward Seller (second plaintiff) Aquatic Air Pty Ltd (third plaintiff) Avtex Air Services Pty Ltd (fourth plaintiff) Dieter Siewert (first defendant) Lieselotte Siewert (second defendant) Heron Airlines Travel Pty Ltd (third defendant) Wingaway Air Pty Ltd (in liq) (fourth defendant) AT Air Group Pty Limited (in liq) (fifth defendant)
Representation:	Counsel: D K L Raphael (plaintiff) B DeBuse (defendants) Solicitors: Gibsons Lawyers (third plaintiff) Marsdens Law Group (first and second defendants)
File Number(s):	2012/169096

Judgment (ex tempore)

1. HIS HONOUR: The background to these proceedings is set in two judgments delivered by me on 31 July 2014 [AT Air Group Pty Limited v Dieter Siewert (No 3) [2014] NSWSC 1129, and 27 August 2014 AT Air Group Pty Limited v Dieter Siewert (No 4) [2014] NSWSC 1186]. Since then, an application for the leave to appeal to the Court of Appeal from those judgments, or at least the first of them, has been dismissed. Other developments since then include that the plaintiff's endeavours to sell the Pearl Bay Avenue property have so far proved unsuccessful. The National Australia Bank has obtained judgment by default in the proceedings commenced by it for possession of that property, and a writ of possession has issued and an eviction date appointed for 12 January 2015.

2. The plaintiff remains in default of the undertaking contained in para 4 of the orders made on 25 June 2012, which was in the following terms:

The plaintiffs’ undertake to pay all outgoings and not default on any liability which would cause a breach of any agreement in relation to the property, including but not limited to the National Australia Bank mortgage, payment of council rates, water rates, strata fees, any such payments made being without prejudice to any rights the plaintiff may have against the first and second defendants as an interim measure only.

3. As it transpires, the plaintiffs in about March of this year ceased to pay the mortgage payments in full, reducing them by about fifty per cent from the amount actually payable. This was not disclosed to the Court on the applications made in August this year, at which time the Court was persuaded to treat the breach as an inadvertent one arising from the bank having debited the land tax to the mortgage account. It now transpires that there was seemingly a conscious breach for several months before that and that the full position was not put before the Court on that occasion. For that, the plaintiff must bear responsibility.

4. It is clear enough from Mr Seller's affidavit of 1 December 2014 that he claims that the situation is a result of pressure on his financial position, but he has adduced no evidence of his or his company's financial position, nor has he even deposed in terms that he and the company are unable to meet the payments.

5. As I indicated in the course of argument, if the breach of the undertaking were due to impecuniosity - including the costs of that Mr Seller has no doubt incurred in his defence in other proceedings in which he is presently involved - the Court would not likely preclude him from being heard on the ground that he was in contempt nor stay the hearing of his principal claim. On the other hand, the evidence simply does not make a case of impecuniosity at the moment. While I am most reluctant to require further costs to be incurred on side issues when the final hearing is, as I am reminded by Mr Raphael who appears for the plaintiff, but 71 days away, it seems to me that if the plaintiff wants the benefit of being treated as impecunious so as to be relieved from his apparent contravention of his undertaking to the Court, then it is for him to prove that case. That is a position that is all the more strengthened by his failure to disclose the true position when the matter came before the Court in August, or to seek relief from the undertaking on grounds of impecuniosity at that time.

6. In those circumstances, while I regret that it is going to cause further time and further costs to be incurred it seems to me that that course is practically unavoidable. However, the defendants should consider closely that while ordinarily the plaintiffs would be expected to bear the costs of any application to be relieved from a default, if the evidence is sufficiently comprehensive to establish impecuniosity, I would not look kindly on further costs being incurred by unsuccessfully opposing such an application.

7. The Court orders that:

1. Unless by 15 December 2014 the plaintiffs have remedied their apparent breach of the undertaking contained in para 4 of the orders made on 25 June 2012 by reducing the amount outstanding to the National Australia Bank secured on the mortgage over 13B Pearl Bay Avenue, Mosman to $1.8 million, or have by that date been relieved by order of the Court from that undertaking the proceedings be stayed.

2. The plaintiffs have liberty to apply on forty-eight hours notice by arrangement with my associate to be relieved from the said undertaking.

3. The plaintiffs pay the defendants costs of the motion filed 24 November 2014.

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Decision last updated: 09 February 2015