Central Victorian Investments Limited v Filipi Nominees Pty Ltd

[2013] VSC 517

Do Not Send for Reporting
IN THE SUPREME COURT OF VICTORIA		Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2012 06866

CENTRAL VICTORIAN INVESTMENTS LIMITED (ACN 005 028 795)	Plaintiff
- and -
FILIPI NOMINEES PTY LTD and OTHERS (according to schedule attached)	First Defendant

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JUDGE:	DERHAM AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	16 August 2013
DATE OF JUDGMENT:	16 August 2013
CASE MAY BE CITED AS:	Central Victorian Investments Limited v Filipi Nominees Pty Ltd & Ors
MEDIUM NETURAL CITATION:	[2013] VSC 517

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PRACTICE AND PROCEDURE – Application to stay execution of a warrant of possession – applicable considerations – lender securing loan by guarantee and mortgage – default judgment entered for possession of mortgaged land and for sum due under guarantee – sister-in-law of the third defendants living in and claiming and equitable interest in mortgaged property – plaintiff choosing to recover judgment for the debt by seeking and obtaining a warrant of seizure and sale of a property owned by third defendant rather than taking possession of mortgaged property – no defence on the merits to the plaintiffs claims revealed by the third defendant – stay refused – Rule 66.16 of the Supreme Court (General Civil Procedure) Rules 2005 - the inherent jurisdiction of the Court.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A.P. Dickenson	Nevett Wilkinson Frawley
For the Defendant	Mr M. Black	Phillips & Wilkins

HIS HONOUR:

Introduction

1. The defendants apply by summons dated 25 July 2013 for an order, amongst others, that pursuant to either rule 66.16 of the Supreme Court (General Civil Procedure) Rules 2005 (the Rules) or pursuant to the inherent jurisdiction of the Court, that the execution of warrant of seizure and sale be stayed.

1. The warrant was obtained by the plaintiff on 22 April 2013 against the third defendant, in respect of the property situate at 26 Coreen Avenue Beaumaris, in the State of Victoria, being the land more particularly described in Certificate of Title Volume 5536 Folio 183 (the “Beaumaris Property”).

Background

1. The facts are well set out in the affidavits of the third defendant, Zdenka Filipi, sworn 23 July 2013, and the affidavit of the plaintiff sworn by Brendan Gillett and filed on 12 August 2013.  

1. The plaintiff obtained default judgment against all the defendants: against the third defendant in default of defence, and against the first and second defendants for default of appearance on 13 March 2013.

1. As part of its default judgment, the plaintiff obtained an order for possession of property at 26 Boxshall Street, Brighton, in the State of Victoria, being the land described in Certificate of Title Volume 5911 Folio 047 (the “Brighton Property”). The registered proprietor of this property is the first defendant.  It was mortgaged to the plaintiff to secure a loan to the first defendant, and the second and third defendants were guarantors of that loan.  The Plaintiff has not taken possession of the Brighton Property, but has sought to exercise its rights under the judgments for the debt by the issue of a warrant of seizure and sale, against the third defendant, of the Beaumaris Property.

1. The defendants are seeking a stay of the warrant on the following basis:

(a)   the Plaintiff has an order for possession of the Brighton Property, which it has not pursued;

(b)   there is a claim by the sister-in-law of the second defendant (Gloria Tocigl) that she is entitled to an equitable interest in the Beaumaris Property under an implied, resulting or constructive trust.

1. The defendants submit that a stay of the warrant is appropriate for a number of reasons:

(a)   it is impossible to obtain its own order for possession for the Beaumaris Property whilst the Plaintiff’s warrant for possession is extant;

(b)   the plaintiff came to the Court seeking an order for possession and obtained it, but it now effectively seeks to ignore that order, and, to the detriment of the second and third defendants, who live at the Beaumaris Property, does not wish to exercise its rights over the Brighton Property, but instead in preference seeks to enforce orders for the judgment for the sum due under the guarantee by way of the warrant for seizure and sale of the Beaumaris Property.

1. The defendants submit that there is little prejudice to the plaintiff as the security in the Brighton Property is more than enough to repay the loan.  The defendants submit that the Brighton Property is valued at $1.4m, and the loan was $600,000.  They further submit that there is great prejudice to the second and third defendants, as the property the subject of the warrant (the Beaumaris Property) is the family home, they are of ill health, and have little money.  

1. The Court has an inherent jurisdiction to stay execution.  It is required to take into account all the circumstances of the case and is not bound by decisions on other sets of facts.[1] 

   [1]Joskovitz v Bonnick [1964] VR 654, 656 (Herring CJ); Sami v Roads Corp [2009] VSCA 44 AJA Williams at [24].

10.  The starting point in relation to the Court's discretion is that a party who obtains a judgment is entitled to have it enforced without delay.[2]  The circumstances justifying a stay are those which go to the enforcement of the judgment and not to its validity or correctness.[3] 

[2]State Bank of Victoria v Parry [1989] WAR 240, 244 (Malcolm CJ); Re Middle Harbour Investments Ltd (In Liq) (Unreported, Supreme Court of New South Wales, Court of Appeal, Mahoney JA, 15 December 1976, 2); Sami v Roads Corp [2009] VSCA 44 AJA Williams at [25].

[3]TC Trustees Ltd v JS Darwen(Successors) Ltd [1969] 2 QB 295; State Bank of Victoria v Parry [1989] WAR 240, 244 (Malcolm CJ); Sami v Roads Corp [2009] VSCA 44 AJA Williams at [25].

11.  Stays under r 66.16 of the Rules, and equivalent provisions, have been granted in situations such as those in which determinations of related[4] or third party proceedings[5] were pending.[6] 

[4]Reading Entertainment Australia Pty Ltd v Burstone Victoria Pty Ltd (No. 2) [2005] VSC 137.

[5]See State Bank of Victoria v Parry [1989] WAR 240.  

[6]Sami v Roads Corp [2009] VSCA 44 AJA Williams at [26].

12.  In my view, it is not appropriate to order a stay in the circumstances of this case.  To do so would defeat the Plaintiff’s right to enforce its judgment and to do so without delay.  

13.  Even a short stay would, in effect, cast upon the plaintiff the obligation to either to treat with the defendants, or take its action to enforce its order for possession of the Brighton Property against Gloria Tocigl.  That is likely (according to correspondence exhibited to the affidavit of Gillett), to lead to the result that either the plaintiff would have to bring proceedings against Gloria Tocigl, or proceedings would be brought by Gloria Tocigl to enforce her equitable rights, which, although they are likely to be defeated by the legal title of plaintiff’s registered mortgage, will nevertheless delay the recovery of the debt due and embroil it in further litigation.   Neither of these litigious courses need to be undertaken if the plaintiff exercises rights under the warrant of seizure and sale.

14.  In my view, there is nothing disclosed in the affidavit of the third defendant that persuades me that I should make an order that stops the plaintiff from choosing either method of enforcing the judgment against the second and third defendants.  Mr Dickenson, who appeared for the plaintiff, submitted that the effect of a stay would be tantamount to setting aside the judgment.  

15.  There are at present no grounds disclosed upon which it would be appropriate to set aside the judgment.  There is no affidavit disclosing a meritorious defence to the claim made by the plaintiff under the guarantee.  To grant a stay would, as a practical matter, render the judgment for money sum against the second and third defendants nugatory.

16.  For these reasons, in my view it is inappropriate to grant a stay.  Accordingly, the defendants’ Summons dated 25 July 2013 should be dismissed and the defendants ordered to pay the plaintiff’s costs of the Summons.

17.  I will make orders in accordance with these reasons.

SCHEDULE OF PARTIES

CENTRAL VICTORIAN INVESTMENTS LIMITED (ACN 005 028 795)	Plaintiff
- and -
FILIPI NOMINEES PTY LTD (ACN 005 028 795)	First Defendant
KATERINA FILIPI	Second Defendant
SZENKA FILIPI	Third Defendant

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