Australia and New Zealand Banking Group Limited v Vongsaykham

[2022] NSWSC 453

Supreme Court

New South Wales

Medium Neutral Citation:

Australia and New Zealand Banking Group Limited v Vongsaykham [2022] NSWSC 453

Hearing dates:

8 April 2022

Decision date:

13 April 2022

Jurisdiction:

Equity - Applications List

Before:

Peden J

Decision:

(1) The amount of $160,139.26, which is deposited into the Supreme Court of NSW pursuant to Part 4 of the Trustee Act (NSW) 1925, be paid out to the second defendant in full.

(2)   No order as to costs

Catchwords:

PROCEDURE — miscellaneous procedural matters — funds paid into Court under Trustee Act Part 4 —Application for payment out of court — held: Order for payment made out

Legislation Cited:

Trustee Act 1925 (NSW) Part 4

Uniform Civil Procedure Rules 2005 (NSW) r 55.11

Cases Cited:

Commonwealth Bank of Australia v The Estate of the Late Mahmoud Slieman [2010] NSWSC 661

Category:

Procedural rulings

Parties:

Australia and New Zealand Banking Group Limited (Plaintiff)
Fred Gabrielian (Second Defendant)

Representation:

Counsel:
AG Martin (Second Defendant)

Solicitors:
Hunts Law (Second Defendant)

File Number(s):

2021/320458-1

Publication restriction:

Nil

Judgment

1. By notice of motion the second defendant, Mr Fred Gabrielian, seeks the following order:

That the amount of $160,139.26 which is deposited into the Supreme Court of NSW pursuant to Part 4 of the Trustee Act (NSW) 1925, being the surplus funds from the sale of the property contained in folio identified 1/20798, situated in Padstow in the State of NSW be paid to the Second Defendant, Fred Gabrielian in full.

2. The plaintiff, Australian and New Zealand Banking Group Limited, loaned money to Kingmaly Vongsaykham with a mortgage over the property identified at Padstow, having been provided to the plaintiff as security.

3. The mortgagor Mr Kingmaly Vongsaykham defaulted on the loan and on 1 September 2017 the plaintiff obtained judgment for the debt owing and an order for possession of the property. On 6 November 2020 the sale by the plaintiff to a third party was completed.

4. Funds surplus to the entitlement of the plaintiff, totalling $160,139.26, were paid into Court on 30 November 2021 pursuant to Part 4 of the Trustee Act 1925 (NSW).

5. The second defendant claims those surplus funds by reason of a judgment obtained against Mr Kingmaly Vongsayykham in the sum of $466,229 on 19 October 2018.

6. That money was found owing by reason of an unpaid loan that was secured by way of an unregistered mortgage over the property dated 17 February 2016 and a caveat lodged in March 2016 with dealing number AK298275P. That caveat was rejected, and it was relodged on 3 June 2016 as dealing number AK479127X.

7. On 3 June 2019 Mr Kingmaly Vongsaykham was declared bankrupt.

8. In Commonwealth Bank of Australia v The Estate of the Late Mahmoud Slieman [2010] NSWSC 661 at [8]-[11], Slattery J identified three matters that must be established before an order can be made for payment of money out of court under the Uniform Civil Procedure Rules 2005 (NSW).

9. First, it is necessary to identify the relevant person who is entitled to the funds and the basis of that entitlement.

10. Second, the claimant must show they are not merely an unsecured creditor but is a person who has a beneficial interest in the very fund paid into court.

11. The second defendant has satisfied me that he is entitled to the funds by virtue of his unregistered mortgage and caveat.

12. Third, the claimant must identify the other claimants to the fund in court and prove those persons were notified of its claim. In November 2020, at the time of settlement of the sale of the property, the second defendant’s lawyers had identified five potential claimants to the surplus funds, including the second defendant himself.

13. Of those potential claimants, three have confirmed clearly in writing to the second defendant’s solicitors that they will not be pursuing any claim against the surplus funds.

1. The Official Trustee in Bankruptcy for Mr Kingmaly Vongsaykham has indicated, in an email dated 1 September 2021 from Mr Mark Morris of the Australian Financial Security Authority, that the “Official Trustee will not be pursuing a claim against the surplus funds”.

2. Bayestate Pty Ltd, a caveator pursuant to dealing number AP217759, has indicated, in an email dated 26 May 2021 from Mr Domenico Mosca of Marsdens Lawyers, that it “will not be pursuing a claim on the surplus funds”.

3. Ms Penarpa Sanpote and Mr Tanakorn Lerthmahasub, caveators pursuant to dealing number AQ465927, have indicated through their solicitor Mr Korr Osakit at ILC Law, that they “will not be making a claim on the surplus proceeds”.

14. The final potential claimant, Mr Keophaythoun Vongsaykham, was a caveator pursuant to caveat number AK550475, which was lodged on 28 June 2018 against the property.

15. Mr Keophaythoun Vongsaykham is currently in custody at the Geoffrey Pearce Correctional Centre in Berkshire Park, NSW and the term of his sentence will expire on 12 September 2022: R v Vongsaytham [2019] NSWDC 65.

16. The second defendant claims priority over Mr Keophaythoun Vongsaykham’s potential claim to the surplus money. The judgment debt owed to the second defendant by Mr Kingmaly Vongsaykham is obviously greater than the sum held in Court.

17. The second defendant read affidavits of a process server, which satisfy me that Mr Keophaythoun Vongsaykham has been served with the motion and supporting affidavits, and has been notified of the listing and the second defendant’s intention to have the matter heard.

18. The second defendant’s solicitor Mr John Hunt also deposes in an affidavit dated 7 April 2022 that he received a facsimile from a phone number connected to the Francis Greenway Correctional Complex, of which the Geoffrey Pearce Correctional Centre forms a part. Annexure A of that affidavit contains the following handwriting:

“I do not wish to claim this matters. This is Mr Gabriel money. Thank you.”

19. Beneath this handwriting is a signature and the printed words “Keophaythoun Vongsaykham AKA Victor Knight” along with the date 6 April 2022. There is no reason to doubt that this facsimile was sent by Mr Keophaythoun Vongsaykham.

20. Mr Keophaythoun Vongsaykham did not appear to oppose the order being sought by the second defendant.

21. There is therefore no evidence before the Court of any competing claim to the surplus money.

22. In these circumstances, I find that the second defendant is entitled to the surplus money held in Court.

23. Pursuant to rule 55.11(1) of the Uniform Civil Procedure Rules 2005 (NSW), I make the following orders in accordance with the notice of motion:

1. The amount of $160,139.26, which is deposited into the Supreme Court of NSW pursuant to Part 4 of the Trustee Act (NSW) 1925, be paid out to the second defendant in full.

2. No order as to costs.

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Decision last updated: 13 April 2022