Capital Securitisation Limited v Jammal - [2007] NSWSC 1073

CITATION: Capital Securitisation Limited v Jammal [2007] NSWSC 1073

HEARING DATE(S): 7, 8, 9 August 2007

JUDGMENT DATE :
27 September 2007

JURISDICTION: Equity Division
Expedition List

JUDGMENT OF: Bergin J

DECISION: Plaintiff entitled to entry of judgment and appointment of trustees for sale of properties.

CATCHWORDS: [CONTRACT/GUARANTEES] - Whether loan agreement dated 18 June 2005 entered into in February 2006 - Whether mortgages provided in respect of that loan agreement - Whether guarantors to earlier loan agreement between different parties discharged - Whether clause in earlier loan agreement in relation to interest rate for late payment a penalty

LEGISLATION CITED: Conveyancing Act 1919
Corporations Act 2001 (Cth)
Real Property Act 1900

CASES CITED: Beil v Pacific View (Qld) Pty Limited [2006] QSC 199
Burnes v Trade Credits Limited (1981) 34 ALR 459
Commissioner of Stamp Duties (NSW) v Carlenka Pty Limited (1995) 41 NSWLR 329
HCK China Investments Limited v Solar Honest Limited (1999) 165 ALR 680
O'Dea v Allstates Leasing System (WA) Pty Limited (1983) 152 CLR 359
Ringrow Pty Limited v BP Australia Pty Limited (2005) 224 CLR 655
Winstone Limited v Bourne [1978] 1 NZLR 94
Wood Hall Limited v Pipeline Authority (1979) 141 CLR 443

PARTIES: Capital Securitisation Limited - plaintiff
Joseph Jammal - first defendant
Violet Therese Jammal - second defendant
Tony Jammal - fourth defendant
Nadia Jammal - fifth defendant
Daymill Pty Limited - sixth defendant
Lukibar Investments Pty Limited - seventh defendant

FILE NUMBER(S): SC 1559/2007

COUNSEL: MW Young - plaintiff
M Rosenblatt - first, second, fourth, fifth, sixth and seventh defendants

SOLICITORS: Bransgroves Lawyers - plaintiff
Somerset Ryckmans - first, second, fourth, fifth, sixth and seventh defendants

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BERGIN J

27 SEPTEMBER 2007

1559/07 CAPITAL SECURITISATION LIMITED v JOSEPH JAMMAL & ORS

JUDGMENT

1 By Amended Statement of Claim (ASC) filed in Court on 7 August 2007, the plaintiff, Capital Securitisation Limited, seeks a declaration that a mortgage dated 18 June 2006 between the plaintiff, as mortgagee, and Joseph Jammal, the first defendant, as mortgagor, in respect of a property at Oatlands (the Oatlands Mortgage) incorporates an Annexure. The plaintiff also seeks a declaration that the mortgage dated 18 June 2006 between the plaintiff, as mortgagee, and Tony Jammal, the fourth defendant, as mortgagor, in respect of a property at Chatswood (the Chatswood Mortgage) also incorporates an Annexure. The plaintiff makes an alternative claim for an order that the Oatlands mortgage and the Chatswood mortgage be rectified so as to include the Annexure. The plaintiff also seeks the appointment of trustees for sale of the Chatswood and Oatlands properties.

2 Additionally the plaintiff seeks orders that: a mortgage dated 18 June 2006 between it, as mortgagee, and One Spencer Street Pty Ltd (OSS) as mortgagor in respect of a property at Hunters Hill (the Hunters Hill Mortgage) be rectified to include a guarantee by Daymill Pty Limited (Daymill), the sixth defendant, of the obligations of OSS under a Loan…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] NSWSC 1073
Decision Date: 27 September 2007

CaseChat Overview and Summary

The case between Capital Securitisation Limited and Jammal was brought before the court, focusing on the validity and enforceability of certain loan agreements and the discharge of guarantors. Capital Securitisation Limited sought to enforce a loan agreement dated 18 June 2005, which was executed in February 2006. The court was required to determine whether the mortgage provided in respect of this loan agreement was valid and whether the guarantors to an earlier loan agreement between different parties had been discharged.

The court needed to decide if the loan agreement dated 18 June 2005 was indeed executed in February 2006, and if so, whether the mortgages provided in relation to this agreement were valid. Additionally, the court had to assess whether the guarantors to an earlier loan agreement, executed between different parties, had been discharged from their obligations. The court also examined whether a clause in the earlier loan agreement, which set an interest rate for late payments, constituted a penalty.

The court found that the loan agreement dated 18 June 2005 was executed in February 2006, and therefore, the mortgages provided in relation to that agreement were valid. The court ruled that the guarantors to the earlier loan agreement had not been discharged from their obligations. Furthermore, the court held that the interest rate clause in the earlier loan agreement did not constitute a penalty. Consequently, the court granted the relief sought by Capital Securitisation Limited in relation to the loan agreement dated 18 June 2005 and the mortgages provided in respect of that agreement.

Orders