Campbell v Illawarra Golf Club Pty Limited (In Liquidation) (No 3)
[2014] NSWSC 341
•01 April 2014
Supreme Court
New South Wales
Medium Neutral Citation: Campbell v Illawarra Golf Club Pty Limited (In Liquidation) (No 3) [2014] NSWSC 341 Hearing dates: 2 and 10 December 2013 Decision date: 01 April 2014 Before: Bellew J Decision: (i) The requirements of r. 6.8 of the Uniform Civil Procedure Rules are dispensed with pursuant to the provisions of s. 14 of the Civil Procedure Act 2005.
(ii) The order made on 10 December 2013 granting a temporary stay of the execution of the writ of possession in relation to the land situated at and known as 87 Princes Highway, Maddens Plains, New South Wales, is vacated.
(iii) The notice of motion is dismissed.
(iv) The applicant is to pay the respondents' costs of the notice of motion, as agreed or assessed.
Catchwords: PROCEDURE - application for stay of execution of writ of possession - where orders made for possession in proceedings to which applicant was not a party - where applicant knew of those proceedings and did not assert a right to possession - where evidence did not support a finding that the applicant was living at the property the subject of the order for possession - where unexplained delay in bringing proceedings
PROCEDURE - where rules make provision for service of notice on occupier when proceedings for possession are commenced - underlying purpose of the rule to allow an occupier the opportunity to assert rights - operation of rule superfluous where occupier had knowledge of the proceedings in any event - appropriate case in which to exercise the power to dispense with the requirement of the ruleLegislation Cited: Real Property Act 1900
Uniform Civil Procedure Act 2005Cases Cited: Campbell v Illawarra Golf Club Pty Limited (In Liquidation) [2012] NSWSC 1252
Campbell v Illawarra Golf Club Pty Limited (In Liquidation) (NSWSC unreported, Garling J, 15 February 2013)
Campbell v Illawarra Golf Club Pty Limited (In Liquidation) (No 2) [2013] NSWSC 1387
GE Personal Finance Pty Limited v Smith [2006] NSWSC 889
National Australia Bank Limited v Damelian [2013] NSWSC 792
In re Foster; Ex parte Basan (1885) 2 Morr 29
Re Verma; Ex parte Deputy Commissioner of Taxation (1985) 4 FCR 181
Uniform Civil Procedure Rules
In Yeshiva Properties No. 1 Pty Limited and ors v Lubavitch Mazal Pty Limited and anor (No. 2) [2003] NSWSC 752Category: Principal judgment Parties: Christopher Brian Birch - Applicant
Christopher Robert Campbell - First Respondent
Vaughan Neil Strawbridge - Second RespondentRepresentation: Counsel:
Mr A McQuillan - Applicant
Mr A Spencer - Respondents
Solicitors:
Minter Ellison - Respondents
File Number(s): 2011/382861 Publication restriction: Nil
Judgment
By a notice of motion filed on 2 December 2013 Christopher Brian Birch ("the applicant") has sought (inter alia) the following orders:
(i) an order that the writ of possession issued on 30 September 2013 in relation to the property known as Illawarra Golf Club, located at RMB 87, Princes Highway, Darkes Forest New South Wales 2508, be set aside in so far as it relates to the registered owners Christopher Brian Birch and Sandra Lee Tarrant;
(ii) in the alternative, an order that the writ of possession issued on 30 September 2013 in relation to the property known as Illawarra Golf Club located at RMB 87 Princes Highway Darkes Forest New South Wales 2508 be stayed pending determination of proceedings 2013/282086;
(iii) an order that the first and second respondents not interfere with the lawful occupation of the property known as Illawarra Gold Club located at RMB 87 Princes Highway Darkes Forest New South Wales 2508.
The motion was supported by an affidavit of the applicant sworn on 2 December 2013. The relief sought was opposed by the respondents. The respondents read the affidavit of Alexander Young Karolczak of 5 November 2013, the exhibits to which were marked exhibits 3 and 4 in the proceedings. The respondents also tendered a copy of a statement of claim filed by the applicant commencing proceedings in this court against (inter alia) the respondents (exhibit 1) along with a copy of a notice of motion filed by the respondents in that matter seeking summary judgment (exhibit 2). I have referred to those documents, and those proceedings, in further detail below.
THE HISTORY OF THE PROCEEDINGS
These proceedings have a long and complicated history, aspects of which must be set out so that the present application can be put into its proper context.
The parties
The respondents to the present motion are the plaintiffs in the proceedings. They were appointed as receivers of the property situated at, and known as, 87 Princes Highway, Maddens Plains ("the property") pursuant to the terms of a first registered mortgage held over the property by the National Australia Bank Limited ("the NAB"). The registered proprietors of the property and the applicant and a Ms Tarrant ("Tarrant"), neither of whom were joined as parties to the proceedings. There are two separate dwellings erected on the property.
The first defendant, the Illawarra Golf Club Pty Limited ("the golf club") previously operated the business of a club from the property. It has since been placed in liquidation and was the subject of an order for possession made by Garling J on 8 August 2012.
The second defendant, David Hawkins ("Hawkins"), is Tarrant's husband. At the time of the hearing of the proceedings before Schmidt J in July 2013, both Hawkins and Tarrant were bankrupt.
The third and fourth defendants, Richard Doney and Stephen Doney, were each the subject of orders for possession against them on 29 August 2012.
At the time of the final hearing of the proceedings before Schmidt J, the only active defendant was Hawkins.
The nature of the proceedings
Prior to the final hearing, the proceedings were case managed by Garling J who, in the course of so doing, delivered a number of interlocutory judgments. I gratefully adopt his Honour's summary of the background to, and nature of, the proceedings set out in Campbell v Illawarra Golf Club Pty Limited (In Liquidation) [2012] NSWSC 1252 at [12]-[32]:
"12. The Property, which was located in the local government area for which the Wollongong City Council had responsibility, was zoned for use as a "golf resort" under the Wollongong Local Environmental Plan No.38.
13. The land upon which Illawarra Golf Club operated included freehold land which was owned by the owners and also Crown land, over which the Illawarra Golf Club had a licence for use.
14. Prior to 2004, a proposal was formulated for the development of the Illawarra Golf Club site into a new golf resort. In general terms, what was proposed was that there would be a nine hole golf course, a clubhouse with a golf shop, restaurant, bar and other facilities, short term accommodation consisting of about 100 rooms, 200 homes for permanent residents and 100 retirement dwellings or serviced apartments. It was anticipated that the golf course would occupy 40-45 hectares and the 400 unit residential complex would occupy about 10 hectares.
15. In order to enable this development to occur, the owners entered into a series of agreements in August 2004.
16. The first agreement was entitled "Development Application Agreement". In this agreement the owners were one of the parties, two companies associated with each of the owners, Snad Pty Limited, and C B Birch Pty Limited were also parties, which were described in that agreement as the "promoters", and Links Illawarra Developments Pty Limited, a Victorian company which it was said had "established credentials in seeking and obtaining development approval for mixed use golf course and residential developments".
17. Links Illawarra Developments Pty Ltd was a company which formed part of a corporate group which can conveniently be called the Links Living Group. Other companies within the Links Living Group had separate roles to play in some of the steps being taken in the development project. All companies in the Links Living Group were in the same interest in this project. It is convenient, unless absolutely necessary, to refer to the Links Living Group, by that name, rather than the names of the individual companies.
18. The background to that Development Application Agreement was described in the following terms:
"1.1 The owners are the owners of the property known as Illawarra Golf Club and located at the west side of Princes Highway, Helensburgh, New South Wales (Property).
1.2 Links has establish credentials in seeking and obtaining development approval for mixed use golf course and residential developments.
1.3 The promoters have local contacts that will assist in seeking any development approval for the property.
1.4 An entity related to Links has an option to purchase the property and Links has been engaged to provide services to that entity in relation to the property.
1.5 Links wishes to seek development approval for a mixed use golf course and residential developments at the property (Application).
1.6 The promoters have agreed to permit Links to seek approval of the application generally in accordance with the terms of this agreement."
19. The Agreement went on to set out the terms upon which the development application would be lodged, and development consent would be sought.
20. Some other relevant clauses of the Agreement are as follows:
"2.2 The owners and promoters have agreed to permit and support Links in seeking approval of the application in consideration for Links agreeing to pay a success fee to the promoters if the application is approved.
2.3 The parties agree to work together to obtain approval of the application in accordance with the provisions of this agreement.
2.4 Links will:
2.4.1 Lodge a development application with the relevant statutory body to seek approval to develop the property in a way determined by Links in its discretion following consultation with the promoters ...;
2.4.2 Report regularly to the promoters about the progress of the application and take into account reasonable suggestions made by the promoters in relation to the application; and
2.4.3 Make all final decisions in relation to the application.
...
2.6 The promoters and the owners agree to assist Links in pursuing the application by:
2.6.1 Executing any document that Links believes necessary or desirable in connection with the application;
....
2.6.3 Will not object to the application whether directly or indirectly;
....
2.6.5 Permitting Links to make decisions it deems necessary in relation to the prosecution of the application ...; and
2.6.6 Abiding by any decision made by Links in relation to the application."
21. The parties agreed to share equally in the cost of seeking and/or obtaining the approval for the application. There was a sunset date specified of two years from the commencement date of the agreement. However, Links Living was the only party entitled to elect to terminate the agreement. Clause 6.1 read:
"If the application is not approved to Links' satisfaction within 2 years of the date of this agreement, then Links may elect to terminate this agreement by notice in writing to the owners and the promoters."
22. Clause 8 of the Agreement is of importance. It dealt with the relationship between the contracting parties. It provided that nothing in the Agreement should be read or construed as placing the parties " ... in the relationship of a partnership or of a principal and agent". It was expressly agreed between the contracting parties that each of them were independent contracting parties and that, otherwise than as specifically provided in the agreement,
"8.1.3 ... neither of the parties shall have any authority or power for or on behalf of the other party to enter into any contracts, to pledge any credit, to incur any liabilities, to assume any obligations or to make any warranties or representations."
23. At the same time, another document entitled a "Put and Call Option Deed" was entered into between Links Illawarra Holdings Pty Limited and Ms Tarrant and Mr Birch by which, in short, upon all of the terms and conditions set out in the document, the owners granted Links Living an option to acquire the property.
24. As well, the owners who were called the grantors, were given a put option whereby they might require Links Living to purchase the property.
25. The third agreement entered into in August 2004, was a "Loan Agreement" whereby a company, in the Links Living Group, agreed to make available a financial facility to the owners by making advances to them, up to a limit of $5 million.
26. The final agreement in the suite of agreements in August 2004, was a "Sale of Business Agreement", whereby the owners agreed to sell to Links Living, the business known as the "Illawarra Golf Club", including its goodwill, fixed assets, trading stock, leases, business records and the like.
27. Mr Hawkins is a party to this agreement, but not to any of the others. He is a party to this agreement because, so it appears from the Recitals, he had recommended to the owners who were the vendors
"... that they enter into this agreement in consideration for a fee, and the agreement records that he has agreed to be a party to the agreement ... in order to be bound with the vendor by the warranties and in order to provide certain guarantees and indemnities in favour of the purchaser in relation to the obligations of the vendor under this agreement".
28. The warranties to which reference was made are set out extensively in clause 12. There is no need to identify the terms of them. In clause 13, the guarantees provided by Mr Hawkins are set out.
29. In general, Mr Hawkins guaranteed to Links Illawarra Holdings Pty Limited:
"13.1 ... the due payment of all monies covenanted or agreed to be paid by the vendors under this agreement and the due performance, observance and fulfilment by the vendors of all covenants and obligations contained in this agreement and on the part of the vendors to be performed, observed and fulfilled".
30. Attempting to summarise these four agreements would not be to do each of them justice, but broadly speaking, it would appear that Ms Tarrant and Mr Birch, as the owners of the land, were engaging through these agreements with Links Illawarra Developments Pty Ltd or other companies in the Links Living Group, with a view to obtaining a development consent allowing the development and expansion of the Illawarra Golf Club.
31. Companies associated with the owners were to obtain a benefit in the event of the development consent being granted. In the event that all other relevant conditions were fulfilled, and the Sale of Business Agreement was to proceed to completion, Mr Hawkins, having been paid a fee by the owners, was to guarantee the performance of those obligations. Money for the project was to be provided by the Links Living Group, in the first instance by a loan to the owners, and it was a matter for them and the relevant Links Living Group company to share jointly the costs of obtaining a development consent.
32. The Links Living Group had the running and control of the application for consent; it had the authority to make all decisions, but it was obliged to consult with the owners. The owners appointed Mr Hawkins as their representative to deal with the Links Living Group and it proceeded with obtaining development consent. "
To that summary, the following matters should be added.
In 2004 the NAB provided funding by way of a bill facility to a limit of $5,000,000.00 secured by (inter alia) guarantees from each of the applicant and Tarrant and a mortgage over the property. A total of $5,000,000.00 was drawn down by the applicant and Tarrant. That facility was not repaid by the due date and in 2009 the NAB issued notices of demand.
Subsequently, in or about May 2010, the applicant and Tarrant entered into the "Illawarra standstill and acknowledgement Deed" ("the Deed") in which the NAB agreed to forbear from enforcing the mortgage until no later than 30 June 2010, so as to allow the applicant and Tarrant an opportunity to refinance. Clause 8(b) of the Deed was in the following terms:
"Sandra Tarrant and Christopher Birch acknowledge that:
...
(b) By signing this deed they consent to the Financier having judgment against them for possession of (the property) and agree not to take any steps to defend and will consent to judgment against them in any proceedings commenced by the Financier in any Court of competent jurisdiction seeking amongst any other relief, judgment for possession of (the property)".
The applicant's interlocutory motion before Garling J
In February 2013, Garling J was asked to determine a motion brought by the applicant in the proceedings seeking orders (inter alia) that the appointment of the respondents as receivers by NAB be set aside. Neither the applicant nor the NAB were parties to the proceedings.
In a judgment delivered on 15 February 2013 (see Campbell v Illawarra Golf Club Pty Limited(In Liquidation) (NSWSC unreported, Garling J 15 February 2013) his Honour refused to make the orders sought. His Honour took the view that granting the orders would render the proceedings even more complex because of (inter alia) the necessity to add further parties. In doing so, he observed (at [7]) that it was open to the applicant to commence proceedings against the NAB seeking appropriate relief if he wished to do so.
A transcript of the proceedings on 15 February 2013 before his Honour is in evidence before me (commencing at p 276 of exhibit 3). The applicant appeared before his Honour on that day and although he was not legally represented, his Honour acceded to a request that Hawkins be permitted to, in effect, speak on behalf of the applicant (at T6 L10). When his Honour (commencing at T11 L48) raised the fact that it was open to the applicant to commence proceedings against the NAB, Hawkins said (commencing at T12 L50):
"It is anticipated in view of the extension your Honour has given to the plaintiffs that a sealed copy of the statement of claim or at least a draft of the statement of claim will be available by that date which is the date mentioned. We are advanced in other words." (my emphasis)
The reference by Hawkins to "that date" was 1 March 2013 (see T14 L10). As I have set out below, no statement of claim was filed by the applicant against the NAB and the present respondents until 18 September 2013, some 7 months later.
The hearing before Schmidt J
The proceedings, with Hawkins as the only active defendant, were heard by Schmidt J on 30 and 31 July and 1 August 2013. In a judgment delivered on 20 September 2013 (see Campbell v Illawarra Golf Club Pty Limited (In Liquidation) (No 2) [2013] NSWSC 1387) her Honour made orders (inter alia) entitling the respondents to possession of the land.
In the course of her judgment, her Honour made the following observations (commencing at [9]):
"9. The real nub of the case which Mr Hawkins finally pressed at the hearing was that he, Mr Birch and Ms Tarrant were all the victims of an ongoing conspiracy. In the result, even though in 2004 Mr Birch and Ms Tarrant had given the Bank a mortgage over the property and guaranteed the repayment of $5 million borrowed from the Bank by one of the Links companies, which had not been repaid when it fell due and though they had also agreed with the Bank in 2010, that it was entitled to possession of the property, the order of possession which the plaintiffs sought in these proceedings would not be made.
10. Mr Hawkins also claimed that contrary to the documents which evidenced the various arrangements entered in respect of the redevelopment of the golf course and the $5 million borrowings, what had really been agreed was that if the sale of the golf course to Links did not proceed, Mr Birch and Ms Tarrant would be entitled to retain the $5million which had been advanced to them by Links, while the redevelopment was pursued. Those borrowings were to be repaid by Links, not them. Their obligations to the Bank had come to an end in 2006, notwithstanding the terms of various agreements which they had signed, which were to contrary effect.
11. Had those been the terms agreed, this would have plainly been quite a remarkable deal for Mr Birch and Ms Tarrant. Not only would they be entitled to have the use of $5 million from 2004, interest free, they would have been entitled to retain that entire sum, as well as the property, if the sale did not proceed and the borrowings were not repaid by Links.
12. While Mr Hawkins, Mr Birch and Ms Tarrant all gave evidence that they had such an understanding, I am satisfied that significant aspects of their evidence smacked of recent invention. Neither their prior conduct, nor any documents in evidence, established that such a deal was ever contemplated, let alone made. Nor did they reveal in their evidence how they came to have such an understanding of the deal. Further, that such a deal, even if it had been made, would now entitle Mr Hawkins to the possession of the golf course which he seeks to retain, was not established.
13. It is also relevant to note that on 15 February 2013, Garling J dismissed a motion filed by Mr Birch, in which he sought orders as to the validity of the Bank's mortgage (see Campbell v Illawarra Golf Club Pty Ltd (Supreme Court of NSW, 15 February 2013, unreported)).
14. His Honour considered that the motion required the joinder of Mr Birch, Ms Tarrant and the Bank as parties to the proceedings. He took the view that the most efficient way of dealing with the issues sought to be raised by Mr Birch, if either he or Ms Tarrant wished to attack the mortgage, was for them to bring proceedings against the Bank, observing that:
"The issues, once a defence is filed, would then be apparent and the Court, depending on whether that process is done in a timely manner, would then be in a position to delay with the question of whether there are any common issues of fact or law between the proceedings which would suggest that the current proceedings and the proposed proceedings ought to be heard and determined together."
15. Neither Mr Birch nor Ms Tarrant have brought such proceedings, although when giving his evidence, Mr Birch said that he intended to bring proceedings once these proceedings were concluded. "
Her Honour then said (commencing at [46]):
"46. It is convenient to observe at this point, that I have carefully considered the evidence given by Mr Hawkins, Mr Birch and Ms Tarrant. I am not convinced that they gave their evidence strictly in accordance with their oath. In parts they each gave evidence which was plainly self-serving and contradictory and contradicted, by various documents in evidence. In the result, I take the view that their evidence has to be approached with considerable caution.
47. From Mr Birch's evidence in cross-examination, it emerged that his affidavit was the result of a process involving he and Mr Hawkins combining their recollections of certain events. It follows that particular attention had to be paid to his evidence in cross-examination."
Ultimately her Honour concluded (at [99]):
"As he finally pressed his case, Mr Hawkins' right to possession was said to be established by the fact that he had been there since 2002; that he was the superintendent of the golf course and in possession of it; that he was the agent of the registered proprietors and occupying the golf course with their consent; and even though he was a bankrupt, it was his home and the place where he was employed. These submissions simply establish no basis for his claim to possession. As the registered proprietors' agent, his rights can climb no higher than theirs."
THE EVIDENCE ON THE PRESENT APPLICATION
I have noted (at [2] above) the affidavit and documentary evidence which is before me on the present application. The applicant was cross-examined, in the course of which an issue emerged as to whether or not he presently occupies the property.
On 1 January 2012 the applicant verified Hawkins' defence in the proceedings. In doing so, he gave his address as 210 Woorarra Road Elanora Heights (at p.220 of exhibit 3).
Further the applicant's evidence in the hearing before Schmidt J on 1 August 2013 commenced with the following (at p. 508 of exhibit 4):
"Q: Will you please tell the court your full name.
A: My full name is Christopher Brian Birch and I reside at 210 Woorarra Road, Elanora Heights."
Moreover, in a number of affidavits sworn by the applicant and filed in the proceedings (including an affidavit sworn on 4 February 2013 (at p. 241 of exhibit 3) and an affidavit sworn on 12 July 2012 (at p. 303 of the same exhibit) the applicant similarly stated that his address was 210 Woorarra Road, Elanora Heights.
Against this background, in his affidavit of 2 December 2013 in support of the present motion, the applicant gave his address as "RMB 87 Princes Highway, Darkes Forest in the State of New South Wales 2508", that being the address of the property.
The issue of whether or not the applicant currently lives at the property was canvassed in the course of cross-examination in the hearing before me. He was asked (commencing at T8 L12):
"Q. Now, Mr Birch, you swore an affidavit in these proceedings on 4 February 2013. Do you remember swearing that affidavit?
A. Not off the top of my head.
Q. It is in that same volume at tab 21?
A. Yes.
Q. And in that affidavit you gave your address as 210 Woorarra Road, Elanora?
A. Yes.
Q. Is that the truth at the time?
A. Yes, it is truth at the time, 87 Madison Plain as well.
Q. I am only asking you one question at a time Mr Birch. Another affidavit of 12 June 2013, 12 July, tab 25. An again in that affidavit you gave your address at 210 Woorarra Road, Elanora, do you agree with that?
A. Yes.
Q. That was the truth at the time?
A. That is the address that I give as my place of business, place at home, because I know there will always be a person there to receive the mail, rather than at 87 Princes Highway, Darkes Forest. It is a large property, the mail box is nearly a kilometre away from the road.
Q. During the course of the hearing before Schmidt J, you gave some crossexamination?
A. I recall you asking me some questions.
Q. Page 197 of the transcript, line 28, you were asked what your full name was, you said, "My full name is Christopher Robert Birch, I reside at 1 Woorarra Road, Elanora Heights" remember?
A. I reside at both places.
Q. You didn't say when you were crossexamined you resided at 210 Woorarra Road, Elanora Heights?
HIS HONOUR
Q. Do you agree with the fact that you said that?
A. If it is the record, I must have said it, but it is not what I would have meant so far as being my main address."
In addition, it is relevant that in the course of his evidence, the applicant:
(i) said (commencing at T22 L40) that he had not been served with the statement of claim commencing the proceedings;
(ii) agreed (commencing at T22 L50) that having given evidence in the proceedings, he necessarily knew of them;
(iii) agreed (at T11 L10) that he had not asserted a right to possession of the property in the proceedings; and
(iv) said (commencing at T23 L45) that Hawkins had informed him of the outcome of the proceedings "probably a couple of weeks" after judgment was delivered (which, given that judgment was delivered on 20 September 2013, would mean that the applicant became aware of the outcome in or about late September or early October 2013).
SUBMISSIONS OF THE PARTIES
The submissions of the applicant
Counsel for the applicant firstly pointed to the fact that the applicant was not a party to the proceedings. It was submitted that as a consequence, the applicant had not been in a position to raise the matters that he now seeks to raise in the proceedings he has commenced against NAB and the respondents.
Secondly, counsel for the applicant relied on the provisions of rule 6.8 of the Uniform Civil Procedure Rules. He pointed out that no statement of claim (or other notice) was ever served on the applicant and submitted that this failure was fatal to the respondents' opposition to the orders sought. Equally fatal, counsel submitted, was the failure to serve notices pursuant to s. 57(2)(b) of the Real Property Act 1900 ("RPA")
Thirdly, counsel submitted that the provisions of the Deed contemplated the commencement of proceedings for an order for possession against both the applicant and Tarrant. Given that no such proceedings had ever been brought, he submitted that it was not open for the respondents to rely on those provisions.
The submissions of the respondents
Counsel for the respondents submitted that the Deed regulated the position between the applicant and the respondents. He submitted that the effect of that deed was that the applicant and Tarrant had agreed not to oppose a judgment for possession.
Counsel further submitted that in circumstances where the proceedings brought by the respondents sought an order for possession of the property, there had been no requirement to serve any notice pursuant to s. 57(2)(b) of the RPA. In terms of rule 6.8, counsel submitted that the rule only obliged the respondents to serve notice on the applicant if he was in occupation at the time that the proceedings were commenced. Counsel described the evidence in this regard as "confusing" but, as I understood it, he invited me to conclude that the applicant had not been in occupation of the property for some time, and was not in occupation at the present time. Counsel further submitted that in any event, the purpose of r 6.8 was to ensure that persons who had a right to defend an action for possession were made aware of that action and given an opportunity to intervene in the proceedings. It was submitted that in the present case the applicant was clearly aware of the proceedings and had the opportunity to intervene if he wished to do so.
Counsel for the respondents also relied upon the delay in bringing the present application. He submitted that on the evidence, the applicant must have known as early as January 2012 (when he verified Hawkins' defence) that the respondents were taking proceedings for possession, yet it was not until September 2013 that he commenced any proceedings against them. Counsel also relied on the fact that the applicant did not commence those proceedings until a considerable time after the indication had been given to Garling J that this was what he proposed to do. Counsel further submitted that even on the most cursory examination of the plaintiff's statement of claim, issues arose as to his prospects of success in those proceedings. In this regard, counsel also relied upon the fact that the respondents had brought a motion seeking summary judgment.
Finally, counsel submitted that in circumstances where there was no evidence of an imminent sale of the property, and in circumstances where the evidence did not support a finding that the applicant was presently in occupation, any prejudice which might arise if the orders sought were refused was insignificant.
CONSIDERATION
The court's power to order a stay of a writ of possession is discretionary. Bearing in mind the variety of differing situations in which the court may be called upon to exercise that discretion, there can be no prescription of the circumstances in which it ought do so (see GE Personal Finance Pty Limited v Smith [2006] NSWSC 889 at [9]; National Australia Bank Limited v Damelian [2013] NSWSC 792 at [20]).
There is, in my view, some force in the submission advanced by counsel for the applicant regarding the provisions of the Deed. The various references in clause 8(b) to the financier "having judgment against (the applicant and Tarrant)", the applicant "consenting to" such judgment and the applicant not taking "steps to defend" such judgment all contemplate the commencement of proceedings against the applicant and Tarrant for possession. No such proceedings have been commenced against the applicant. However notwithstanding that, there are a number of other factors which tend against the exercise of the court's discretion in the applicant's favour.
Firstly, I am not satisfied that the applicant presently lives at the property. I found his evidence in relation to this issue highly unsatisfactory. The applicant has repeatedly and unequivocally stated to this court that he resides at an address in Elanora Heights. On the evidence which is before me, the first occasion on which the asserted that he resided at the property was when he swore his affidavit of 2 December 2013 in support of the present motion. In the course of giving evidence before me, and when asked whether he had told Schmidt J in August 2013 that he resided at an address in Elanora Heights, the applicant replied (at T9 L2):
"If it is the record, I must have said it but it is not what I would have meant so far as being my main address."
There is nothing in the evidence before me which suggests that the applicant has previously asserted that he has a "main address". The only address he has ever given in connection with these proceedings has been the address in Elanora Heights. The applicant's answer in [37] above suggested that his "main address" is that of the property. I regard that as an answer of convenience. I am not satisfied that he lives at the property. I am satisfied that when he stated in his affidavit of 2 December 2013 that he does so, he was misleading the court in an attempt to lend weight to the present application.
A further factor tending against the grant of a stay is that of delay. In this regard the evidence establishes the following:
(i) the applicant was aware of the proceedings at least as far back as January 2012 when he verified Hawkins' defence. Indeed given the background to the proceedings, I consider it highly probable that the applicant knew about the proceedings even before that time;
(ii) in February of 2013, the applicant informed Garling J, through Hawkins, that the preparation of a statement of claim against the NAB was "well advanced" and likely to be filed by March 2013;
(iii) it was not until September 2013, some 7 months later, that the statement of claim was filed;
(iv) the applicant knew of the judgment of Schmidt J, in which her Honour made an order for possession, by late September or early October 2013;
(v) the present motion was not filed until 2 December 2013.
A person who seeks orders of the kind sought by the applicant should be in a position to explain to the court his or her inaction prior to the making of the application (see GE Personal Finance (supra) at [12]). The applicant has completely failed to provide any such explanation for the delays to which I have referred.
Further, I do not accept the submissions of counsel for the applicant in relation to the operation of r. 6.8. That rule is in the following terms:
6.8 Originating process for recovery of land to be served on occupier
(1) If, when proceedings for possession of land are commenced, a person (the "occupier") not joined as a defendant is in occupation of the whole or any part of the land, the plaintiff:
(a) must state in the originating process that the plaintiff does not seek to disturb the occupier's occupation of the land, or
(b) must serve the originating process on the occupier together with a notice to the effect that:
(i) the occupier may apply to the court for an order that the occupier be added as a defendant, and
(ii) if the occupier does not so apply within 10 days after service, the occupier may be evicted under a judgment entered in the occupier's absence.
(2) For the purposes of subrule (1), documents may be served on the occupier personally or by leaving the documents on the land concerned addressed to the occupier by name or addressed simply "to the occupier".
(3) If originating process is amended by the addition of a claim for possession of land, the time at which proceedings for possession of that land are commenced is taken, for the purposes of subrule (1), to be the time at which the amendment is made.
In Yeshiva Properties No. 1 Pty Limited and ors v Lubavitch Mazal Pty Limited and anor (No. 2) [2003] NSWSC 752 Gzell J considered the provisions of Pt 7 r 8(1) of the Supreme Court Rules which was the predecessor to r. 6.8 and which, although expressed in different terms, was to a similar effect. His Honour said (at [12]):
"The purpose of the rule is to provide occupiers of land the subject of proceedings for a judgment for possession with the opportunity to assert any rights they may have. In this case, the commonality of directors between the plaintiffs in the proceedings before Young CJ in Eq and the applicants before me meant that the applicants were well aware of the proceedings and, if they had wished to assert rights stemming from their occupancy, they had the opportunity to be joined in those proceedings"
His Honour then said (at [14]):
"In these circumstances the protection afforded to occupiers by the Supreme Court Rules 1970, Pt 7 r 8 was superfluous. The applicants were already aware of the nature of the proceedings and the impact that a successful judgment on the cross claim would have".
His Honour went on to observe (at [15]) that Pt 1 r 12 of the Supreme Court Rules allowed the court to dispense with compliance with any of the requirements of the rules, either before or after the occasion for such compliance arose. He concluded (at [16]) that in circumstances where the applicants in that case were aware of the proceedings but took no steps to assert any rights arising from their occupation of the property in question, it was appropriate to invoke the power conferred by Pt 1 r 12 and dispense with compliance with Pt 7 r 8.
The power previously conferred upon the court by Pt 1 r 12 of the Supreme Court Rules is now contained in s. 14 of the Civil Procedure Act 2005 which is in the following terms:
Court may dispense with rules in particular cases
In relation to particular civil proceedings, the court may, by order, dispense with any requirement of rules of court if satisfied that it is appropriate to do so in the circumstances.
The various observations of Gzell J are apt in the present case. There is no evidence enables me to determine whether the applicant was an occupier of the property within the meaning of r. 6.8 when the proceedings were commenced. However even assuming that he was, an order dispensing with the requirements of r. 6.8 is in my view appropriate. The underlying purpose of the rule, as explained by Gzell J, is to provide an occupier with an opportunity to assert any right(s) he or she may have in possession proceedings. The applicant knew about the proceedings long ago. He also knew of their progress and of the potential impact of a judgment in favour of the present respondents. He agreed in evidence before me that he did not assert any right to possession in the proceedings. In these circumstances, the protection afforded by r. 6.8 is, to adopt the terminology of Gzell J, superfluous.
The fact that the plaintiff has now commenced proceedings against the respondents and the NAB does not persuade me to make the orders sought. Quite apart from his delay in doing so, the statement of claim itself evidences nothing more than the fact that proceedings have been commenced. It says nothing about the strength of the case that he brings (see for example (see In re Foster; Ex parte Basan (1885) 2 Morr 29 at 33 - 34 per Brett MR; Re Verma; Ex parte Deputy Commissioner of Taxation (1985) 4 FCR 181 at 187). The same observations can be made about the notice of motion filed by the present respondents seeking an order for summary judgment in those proceedings. The strength or otherwise of that application will be a matter for the judge who hears and determines it. If it is not successful, the strength or otherwise of the applicant's case will be a matter for the trial judge. I am not in a position to make any determination of those matters.
Further in my view, s. 57(2)(b) of the RPA has no application in the present circumstances. Section 57(2)(b) of the Act is in the following terms:
57 Procedure on default
...
(2) A registered mortgagee, chargee or covenant chargee may, subject to this Act, exercise the powers conferred by section 58 if:
(a) in the case of a mortgage or charge, default has been made in the observance of any covenant, agreement or condition expressed or implied in the mortgage or charge or in the payment, in accordance with the terms of the mortgage or charge, of the principal, interest, annuity, rent-charge or other money the payment of which is secured by the mortgage or charge or of any part of that principal, interest, annuity, rent-charge or other money,
(a1) in the case of a covenant charge, default has been made in:
(i) the payment, in accordance with the terms of the judgment to which the covenant charge relates, of the principal, interest or other money the payment of which is secured by the covenant charge, or
(ii) the payment, in accordance with the terms of that judgment, of any part of that principal, interest or other money,
(b) where:
(i) the default relates to that payment, or
(ii) in the case of a mortgage, the default does not relate to that payment and notice or lapse of time has not been dispensed with under section 58A, a written notice that complies with subsection (3) has been served on the mortgagor, charger or covenant charger in the manner authorised by section 170 of the Conveyancing Act 1919 ,
(b1) where a notice is required to be served under paragraph (b), a copy of that notice has been served (in the manner authorised by section 170 of the Conveyancing Act 1919) on:
(i) each mortgagee, chargee or covenant chargee (if any) of the land mortgaged or charged under a registered mortgage, charge or covenant charge which has less priority than that of the person intending to exercise the power of sale, and
(ii) each caveator (if any) who claims as an unregistered mortgagee or chargee to be entitled to an estate or interest in the land mortgaged or charged, and
..."
Section 58 confers a power of sale upon the mortgagee or chargee, upon compliance with s. 57(2)(b). However, there is no evidence before me that any power of sale is sought to be exercised at the present time. The only relevant order made by Schmidt J was an order for possession of the property.
Finally, in circumstances where there is no evidence that the property is likely to be sold in the near future, I accept the submission of counsel for the respondents that the only prejudice suffered by the applicant is that he would not be entitled to occupation in the intervening period. Given the conclusions I have reached in [38] above, any such prejudice is insignificant.
ORDERS
For these reasons I make the following orders:
(i) The requirements of r. 6.8 of the Uniform Civil Procedure Rules are dispensed with pursuant to the provisions of s. 14 of the Civil Procedure Act 2005.
(ii) The order made on 10 December 2013 granting a temporary stay of the execution of the writ of possession in relation to the land situated at and known as 87 Princes Highway, Maddens Plains, New South Wales, is vacated.
(iii) The notice of motion is dismissed.
(iv) The applicant is to pay the respondents' costs of the notice of motion, as agreed or assessed.
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Decision last updated: 02 April 2014
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