Commonwealth Bank of Australia v Abou-Eid Corporation Pty Ltd

[2012] VCC 758

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
BANKING & FINANCE DIVISION

Case No. CI-11-05994

COMMONWEALTH BANK OF AUSTRALIA	Plaintiff
v.
ABOU-EID CORPORATION PTY LTD & ANOR	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	14 June 2012
DATE OF JUDGMENT:	14 June 2012
CASE MAY BE CITED AS:	Commonwealth Bank of Australia v. Abou-Eid Corporation Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2012] VCC 758

REASONS FOR JUDGMENT

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Catchwords:            Practice and procedure – Application to set aside judgment – No affidavit in support of application – Defendants had appeared at hearing – Application for stay of execution – Purported sale of property – Purchasers not proceeding with purchase – Stay refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A. Sergi	Gadens Lawyers
For the First Defendant	Mr A. Bergin by leave
For the Second Defendant	In person

HIS HONOUR:

1The defendants, by summons filed 12 June 2012, seek an order that the order I made on 27 April 2012 be set aside. The summons was prepared by the second defendant and he has sought leave today to also represent the first defendant. I have granted him that leave on the basis that he is the sole director and one of two shareholders of the first defendant.

2The summons was not supported by affidavit material, although papers in support of the summons were lodged with the Court including a contract of sale of the property at Suite 117, Level 4, 24-26 Albert Road, South Melbourne from the first defendant  to Mr Gilroy Huckstepp. The contract of sale is dated 19 April 2012 and is signed by both Mr Huckstepp and Mr Bergin as a director on behalf of the vendor. The purchaser is described as “Gilroy Huckstepp and/or nominee”. The price is $800,000 with a deposit of $40,000 and settlement due on 19 July 2012 or earlier by mutual agreement. Also provided was a copy trust account receipt from De Marco Lawyers, recording receipt of the sum of $40,000 as deposit monies for “Abou-Eid Corporation Pty Ltd; sale”. The cheque was apparently a personal cheque drawn on the CBA dated 31 May 2012 and received from “Gill Huckstep and Nominees”.

3Judgment was given for the plaintiff against both defendants on 27 April 2012 upon the return of the plaintiff’s summary judgment application. At that time, as was recorded in “other matters”, Mr Bergin appeared and informed the Court that the subject property had been sold. The matter was stood down to allow Mr Bergin to obtain a copy of the contract. Mr Bergin did not return to court and the application for summary judgment proceeded and orders were made including the entering of summary judgment. Subsequently, Mr Bergin communicated with the Court by email and eventually the present summons was issued on 12 June 2012. As the defendants attended the hearing of the plaintiff’s summary judgment application on 27 April 2012, there would appear to be no power to set aside the judgment under Rule 22.15.

4Mr Sergi of counsel who appeared for the plaintiff indicated that the plaintiff may be prepared to consider a stay of execution if it were satisfied that the contract of sale was genuine and the deposit cheque for $40,000 received by the vendor’s solicitors had been cleared. Mr Sergi informed me, and this fact was later confirmed by Mr Bergin, that the purchaser, Mr Huckstepp, is the husband of Mr Bergin’s fellow shareholder in the first defendant. Mr Sergi also informed me that his solicitors had recently written to De Marco Lawyers seeking clarification from them as to whether the deposit cheque had cleared.

5After hearing from the parties, I made orders setting out the background to the matter and requesting De Marco Lawyers to advise the Court whether the deposit cheque had cleared and whether there were any other circumstances known to them which might prevent settlement of the sale taking place on or before 19 July 2012.

6Soon after the making of the order, and it being forwarded to the solicitors, they responded as follows:

“In response to your email of even date we advise as follows:-

·     We received a cheque in the sum of $40,000.00 which was receipted into our Trust Account on 31 May 2012.

·     This cheque was dishonoured.

·     We received a facsimile from Gil Huckstepp indicating the cheque had been stopped as the Purchaser became aware of a pending court action (copy facsimile enclosed).

·     We have received no other information to indicate that the Purchaser would not proceed with the purchase”.

7The attached facsimile is addressed to De Marco Lawyers and reads, “In relation to my deposit cheque 00865 – drawn as a deposit for the purchase of Suite 117, Level 4/24 Albert Road, Vic, 3205. I have not honoured this cheque as I was advised of the pending court action between Abou-Eid and the Commonwealth Bank. I am prepared to forward the deposit and proceed with the purchase if the Court allows Abou-Eid to proceed with the sale. Copies of the communications were provided to the parties and I have heard further submissions from the parties”.

8Mr Bergin submitted that a further opportunity should be given to allow the sale to Mr Huckstepp to proceed. The bank, through Mr Sergi, opposed the application to set aside judgement or to further stay execution on the judgment. Mr Sergi pointed to what appeared to be a difference in the signatures of Mr Huckstepp on the facsimile and the contract of sale. Certainly, the signatures are different but without further evidence, I am not prepared to act on the basis that the signatures might have been attached by different persons.

9I consider, however, that in relation to the application to set aside judgment that relief should not be granted. There is no power to do so under Rule 22.15 and it would appear that the only way in which such an order could be made is by an appeal being lodged to the Court of Appeal.

10In relation to any application inherent in the summons for a further stay of execution of the judgment, I am not prepared to further stay execution. The summons is not supported by affidavit material. The material provided in the form of the contract of sale and receipt of the deposit monies did not disclose the full story and, in the circumstances, it is inappropriate for this Court to intervene upon the request of the defendants to this proceeding or Mr Huckstepp. If they are genuine in their desire to effect a transfer of the property for a consideration of $800,000 (which I was informed by Mr Sergi would be sufficient to cover the indebtedness to the plaintiff) it may be appropriate for the defendants and Mr Huckstepp to negotiate with the bank to achieve that result.

11In the circumstances, the defendants’ summons, filed 12 June 2012, will be dismissed. The defendants must pay the plaintiff’s costs of the summons, to be taxed in default of agreement.

12There was some discussion earlier today concerning what exactly took place at the hearing on 27 April 2012. The proceedings were recorded. In accordance with a Practice Note issued by the Chief Judge, I may permit the recording to be forwarded to a transcription service to prepare a transcript of the earlier proceedings at the cost of the party making the request. Accordingly, I am prepared to direct that upon receipt of a written request by any party to the proceeding, the recording made by the Court of the proceedings on 27 April 2012 and today will be released to an authorised transcription service for preparation of a transcript of the proceedings and return of the recording to the Court.

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Certificate

I certify that these 3 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 14 June 2012 (and revised on 14 June 2012).

Dated: 14 June 2012

Hannah Christensen

Associate to His Honour Judge Anderson