Capital Securities No 1 Pty Ltd v Saliba (No 2); Saliba v Mitry

[2014] NSWSC 1941

Supreme Court

New South Wales

Medium Neutral Citation:	Capital Securities No 1 Pty Ltd v Saliba (No 2); Saliba v Mitry [2014] NSWSC 1941
Hearing dates:	10 December 2014
Date of orders:	10 December 2014
Decision date:	10 December 2014
Jurisdiction:	Common Law
Before:	McCallum J
Decision:	Orders entered in accordance with short minutes
Catchwords:	INJUNCTIONS – order made by duty judge to restrain proceeds of sale of property – dispute as to quantum to be restrained – no question of principle
Legislation Cited:	Contracts Review Act 1980 (NSW)
Category:	Procedural and other rulings
Parties:	Proceedings 2014/130581: Capital Securities No 1 Pty Ltd (Plaintiff) Roger Saliba (Defendant) Proceedings 2014/355318 Roger Saliba (First Plaintiff) Roger Saliba Pty Ltd (Second Plaintiff) Tony Mitry (First Defendant) Linda Mitry (Second Defendant)
Representation:	Counsel: M Wirth (Plaintiff) A Rogers (Defendant) M Stevens (Cross Defendants) Solicitors: Kemp Strang (Plaintiff) Mitry Lawyers (Defendant) Self-represented (Cross Defendants)
File Number(s):	2014/1305812014/355318
Publication restriction:	None

Judgment

1. HER HONOUR: Before the Court are two sets of proceedings. The first are proceedings brought by Capital Securities No.1 Pty Ltd against Mr Saliba. The amount claimed by Capital Securities against him arose out of an amount he borrowed in order to assist his cousins, Mr Tony and Mrs Linda Mitry. The loan was intended to be a short term loan and incurred a high interest rate even without falling into the default interest rate. Mr Saliba, in order to stem the increasing liability he was incurring under that loan, has paid Capital Securities.

2. In those proceedings, Mr Saliba has filed two cross-claims, one against Capital Securities seeking in effect to claw back part of his payment to Capital Securities as a penalty and claiming variation of the contract under the Contracts Review Act 1980 (NSW). The second cross-claim brought by Mr Saliba is against Mr and Mrs Mitry, on whose account, he says, he incurred all of that liability.

3. The second set of proceedings is Mr Saliba's claim against the Mitrys to recover the amount he has paid to Capital Securities.

4. The proceedings between Saliba and Mitry came before the Court in the Duty List before a different judge in early December, at which point an injunction was granted to Mr Saliba to restrain the Mitrys from selling their home. The basis for the injunction was the apprehension that they were attempting to dispose of assets to defeat a creditor, Mr Saliba, in circumstances where they had, shortly before their house was listed for auction, been served with the second cross-claim to which I have referred.

5. The proceedings came before me as Duty Judge on Monday to hear an application as to the terms of that injunction. Owing to a degree of cooperation between the parties, the position as it was presented to the Court in order to save Court time was that Mr Saliba indicated that he no longer opposed the sale, so long as the proceeds of sale were protected, while Mr Stevens, who appears for the Mitrys, indicated that he would not oppose some order to protect the proceeds of sale, there being principally a dispute as to the amount that should be protected. Mr Saliba's claim was that the whole of the amount he paid to Capital Securities, which was the sum of $367,261.52 (being the principal of $175,000 plus interest and other costs) together with a further amount of $65,510 which the Mitrys already owed to Mr Saliba unrelated to the loan from Capital Securities, giving a total of $432,771.52.

6. Mr Stevens, on behalf of the Mitrys, submitted that the amount over which some security (to use the term loosely) should be given by the Court should be a smaller amount reflecting the fact that the correspondence between the parties revealed an amount of only $150,000 had been paid to the Mitrys from the sum borrowed by Mr Saliba from Capital Securities. Mr Stevens relied on a letter dated 21 July 2014 (Exhibit 1) which revealed that, as at that date, Mr Saliba was claiming a total outstanding amount of $215,510. He submitted that that should be the maximum amount the subject of any order of the Court or, at worst, an amount reflecting interest payable on that amount.

7. After hearing the parties' submissions, I determined that it was appropriate to restrain the whole of the amount claimed by Mr Rogers. The parties returned today after endeavouring to agree on a form of orders and also for the purpose of bringing the proceedings back on the same date that had previously been scheduled for Capital Securities to appear in the ordinary course. It was anticipated that each of Capital Securities and the Mitrys would have filed a defence to Mr Saliba's cross-claims by today. That has not been possible, for practical reasons, but in any event it is clear enough, first, that each of the defendants to the cross-claims defends the cross-claim but secondly, there is a measure of goodwill between all three parties or groups of parties to the end that they propose to hold an informal mediation on Friday.

8. In the circumstances I have recited, plainly a resolution of the proceedings three ways would be desirable and should be achievable.

9. I have heard the parties as to the formal orders to be made this morning. On that basis I propose to make orders in the form handed up by Mr Rogers, subject to the changes I have made. The principal contest as to the form of orders was that Mr Rogers sought an order restraining double the sum he addressed in submissions on Monday, noting a concern as to the fact that that fund, if held jointly on account of each of Mr Mitry and Mrs Mitry, may in effect be halved if Mr Saliba is successful against only one of those parties. Some protection against that risk has been achieved by Mr Stevens offering the further information that he has instructions from each of his clients that each will indemnify the other against any liability to either of the plaintiffs in the Saliba proceedings. On that basis I do not think it would be fair to restrain double the sum claimed and have determined that issue accordingly.

10. I make orders 1, 2, 3, 4, 5 and 6 in the orders handed up by Mr Rogers, as amended by me. I grant the liberty noted in paragraph 7. I note the agreement recorded in paragraph 8. I note further that Mr Stevens has informed the Court that he holds verbal instructions from each of his clients that each agrees to indemnify the other as to any liability against either of the plaintiffs in proceedings 355318 of 2014. I note further that Mr Stevens has agreed to confirm those instructions in writing to the solicitor for Mr Saliba today.

**********

Decision last updated: 10 March 2015