Commonwealth of Australia v Davis Samuel Pty Ltd (No 13)
[2021] ACTSC 56
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Commonwealth of Australia v Davis Samuel Pty Ltd & Ors (No 13) |
Citation: | [2021] ACTSC 56 |
Hearing Date: | 8 April 2021 |
DecisionDate: | 8 April 2021 |
Before: | Elkaim J |
Decision: | See [42] |
Catchwords: | PRACTICE AND PROCEDURE – Judgment and Orders – Stay of orders on compassionate grounds – finality |
Cases Cited: | Davis Samuel Pty Ltd v Commonwealth of Australia [2016] ACTCA 22 |
Parties: | Commonwealth of Australia (Plaintiff) Davis Samuel Pty Ltd & Ors (Defendant) |
Representation: | Counsel J Hogan-Doran SC (Plaintiff) P Dunning QC with J Leung (Defendant) |
| Solicitors Australian Government Solicitor (Plaintiff) Cornwalls (Defendant) | |
File Number | SC 75 of 1999 |
ELKAIM J:
Ms Joy Beverley Endresz was the 20th defendant in proceedings that commenced in 1999 and have worked their way through many of the judges in this Court and also to the High Court, most recently last month when a special leave application was refused (Endresz v The Commonwealth of Australia & Ors [2021] HCASL 49).
In the current application, filed on 6 April 2021, the applicant (Ms Endresz) seeks a stay of orders made by Refshauge J on 21 November 2014 (but then amended on 27 May 2015 and 11 May 2016).
The application is supported by the affidavits of Ms Bianca Quan, sworn on 1 April 2021, 7 April 2021 and 8 April 2021 respectively. Ms Quan is a solicitor acting on behalf of the applicant.
The respondent relies on affidavits of Ms Zita Rowling, sworn on 21 April 2020 and 7 April 2021 respectively. Ms Rowling is a solicitor employed by the Australian Government Solicitor.
Pursuant to the orders, the plaintiff (the Commonwealth of Australia) has a charge over the applicant’s family home in Albury, New South Wales, known as Haven Hill. The applicant and her husband, Mr Allan Paul Endresz, were the registered proprietors of this property.
On 27 August 2020, Gleeson J (then in the Federal Court of Australia) made sequestration orders in respect of the estate of Mr Endresz as a result of which the Official Trustee in Bankruptcy (the trustee) became the trustee of his estate. It then followed that Haven Hill became beneficially owned by the applicant and the trustee as tenants in common in equal shares.
On 13 November 2020, pending the above special leave application being decided, the applicant and the Commonwealth agreed to interim orders being made by the New South Wales Supreme Court. They are summarised in the affidavit of Ms Quan as follows:
a. Haven Hill be sold;
b. Peter Damien McCluskey, be appointed as trustee for sale;
c.Haven Hill will vest in the trustee on the day after the expiry of the twenty eight day period after the determination of the Special Leave Application (Relevant Date);
d. Mrs Endresz deliver vacant possession of Haven Hill to the trustee on or before 28 days after the Relevant Date.
The special leave application was dismissed on 11 March 2021. Therefore 9 April 2021 is the date Haven Hill will vest in the trustee and 7 May 2021 is the date by which vacant possession must be given.
The intent of the orders sought in the current application is that her interest not vest on 9 April 2021 and that she not be obliged to give vacant possession on 7 May 2021.
The reason behind the application is that the applicant lives at the property and has a terminal illness, namely cancer.
It is asserted that the applicant is likely to die within the foreseeable future. Although the applicant’s life expectancy is said to be 6 to 18 months, derived from a report of Dr Kerrie Clarke dated 11 August 2020, this prognosis is based on a misreading of the report. On a proper reading of the report the prognosis of 6 to 18 months is the time period before the applicant will enter the “terminal phase” of her illness. The report does not state the likely length of the terminal phase. I accept it is unlikely to be very long.
Dr Clarke has provided a more up-to-date report, on 16 March 2021. This report poses various possibilities as to the progression of the disease but ends in this way:
She has certainly deteriorated since her last report back in November but currently remains on the same treatment regime in terms of chemotherapy, that she was receiving back in November until repeat scans which are due late April or early May depending on how many delays she has had with her treatment cycles.
Ms Quan’s affidavit refers to an affidavit of the applicant sworn in the New South Wales proceedings. According to the latter affidavit the applicant faces a daily struggle in dealing with her treatment, she has members of her family living with her and supporting her, she is able to derive comfort from the assorted animals that reside in the large grounds of Haven Hill and she is concerned about contracting COVID-19 should she have to vacate the premises.
I do not know if the applicant has been vaccinated against COVID-19.
Ultimately the applicant wishes “to live the rest of her life in her family home”.
The applicant’s solicitors have corresponded with the Commonwealth in an endeavour to reach some agreement. Despite some progress the parties have not been able to reach a compromise acceptable to both of them.
The affidavit of Ms Rowling sets out the long history of proceedings that have surrounded this matter, although not always referable to this particular applicant. Nevertheless the applicant has been involved in a good deal of the proceedings and incurred a number of costs orders in favour of the respondent. Ultimately the respondent’s opposition is summed up in [34] of Ms Rowling’s affidavit:
I am concerned that the continuing delay brought about by applications by Mrs Endresz is causing irretrievable financial loss to the Commonwealth.
Thus the contest in this application seemed to be between the Commonwealth’s desire to obtain monies owing to it and the applicant’s wish to live out her remaining days in her own home.
The contest however took a different focus when the matter was explained to me this morning. The applicant is now pressing for a stay which will enable an offer made by her son, Mr Matthew Endresz, to proceed.
The offer is contained in a letter dated 6 April 2021 from the applicant’s solicitors to Australian Government Solicitor. In essence Mr Matthew Endresz is offering to pay the value of the charge (almost $1.8 million) in exchange for an assignment of the charge to him.
In order to make the payment Mr Matthew Endresz has said that he needs about three months to realise some assets, including, I was informed today, crypto-currency and shares.
The respondent has rejected the offer and expressed a good deal of scepticism about its validity. Senior counsel made this observation in written submissions:
The assertion in Ms Quan’s 2nd affidavit at para. 4 on information and belief from Matthew Endresz that he is “willing and able” to pay the amount can be given no weight. None of the family members is apparently prepared to go on affidavit.
A valuation in August 2020 of Haven Hill placed it in the range of $1.5 million up to $2 million. As the applicant’s share will only be half of the sum realised, the offer made by Mr Matthew Endresz is potentially of greater benefit to the respondent. This of course is subject to the validity of the offer.
Because of the respondent’s scepticism I invited the applicant to contact Mr Matthew Endresz and see if any greater particularity could be provided in order to moderate the respondent’s concerns.
The invitation was accepted but was not productive of any agreement between the parties. It is of course beyond my powers to direct that they reach agreement.
I mentioned during discussion that I thought there were four options open to me:
(i)Refuse the application.
(ii)Stay the orders (both for vesting of the property and vacant possession) for a period of three months to enable Mr Matthew Endresz to ‘make good’ his offer.
(iii)Stay the orders until 90 days after the death of the applicant (as sought in the application).
(iv)Stay only the date for the delivery of vacant possession for a period which will provide Mr Matthew Endresz sufficient time to raise the necessary funds.
The applicant effectively abandoned option (iii).
I do not think the application should be refused. Notwithstanding the tortuous history of this (including the related) litigation I do not see it appropriate to evict a dying woman from her home in order to assist the recovery of money. The respondent said I needed to take a “principled” approach in the manner set out by Johnson J in GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889; NSW ConvR 56-164 at [22] and [23]:
22 Ordinarily, if a Defendant is not in a position to demonstrate a reasonable foundation for a stay in one of the three circumstances referred to in paragraph 13 above, then there could be no reasonable expectation of an extended stay on hardship grounds only. If it is inevitable that the Plaintiff will obtain possession of the property for the purpose of exercising the power of sale, then it will be necessary for the Defendant to vacate the property.
23 Of course, particular factors may exist in an individual case which bear upon this class of stay application and which may ground the exercise of discretion by way of a stay for a longer period. However, in circumstances where vacation of the premises by the Defendant is inevitable, there ought be no reasonable expectation of an extended stay being granted on hardship grounds.
While I am firmly of the view that my approach is, in any event, principled, I note the opening word, “Ordinarily”, to the above passages quoted from GE Personal Finance, allows for scope within the discretion to meet the facts of each particular case.
I do not agree with the submission of the respondent that “the evidence of hardship is insufficient and unsatisfactory”. I have already mentioned that the medical evidence on prognosis is open to interpretation. Nevertheless, I think there is enough for me to conclude that the applicant has a terminal illness which will have a fatal result, probably within the next 12 months.
I agree with the respondent that it is entitled to the benefit of the final orders in its favour and to enforce those orders. My intent is not to deny that entitlement nor to curtail enforcement. It is only to delay enforcement against a background of an already existing delay in enforcement, some of which may be attributed to the respondent.
The respondent submitted that the applicant has known that the charging orders were valid since 30 June 2016 (Davis Samuel Pty Ltd v Commonwealth of Australia [2016] ACTCA 22), therefore she should not now complain that she is being finally asked to leave the property.
The respondent has also submitted that the applicant “is not deserving of any special consideration” because she has known for more than 20 years “that her home has been improved with stolen money”. Considering that the primary ‘culprit’ in the history of this matter was her husband, I regard the submission as somewhat overstated.
I also note that the Chief Justice, although rejecting the application before her, made this comment about the applicant remaining at Haven Hill (Endresz v Commonwealth of Australia [2020] ACTCA 48 at [77]):
While I am sympathetic to Mrs Endresz’s situation, I consider it to be of little relevance to the exercise of my discretion. It is more relevant to the enforcement proceedings.
My discomfort with the second option is that if Mr Matthew Endresz is not able to raise the necessary funds, the applicant’s predicament will remain the same and she may be forced to return to court to plead her position from a significantly weakened base.
The affidavit of Ms Quan handed up in court today, and based on conversations with Mr Matthew Endresz, did not do a great deal to comfort me about the likelihood of him being able to meet the charge.
My preference is for the fourth option because it will enable the property to vest in the trustee, consistent with the orders previously made, but will keep the applicant living in the property with a greater time period for her son to raise the funds to redeem the charge.
My choice of this option is predicated on the assurances given by the respondent as to the actions to be taken in the event of the monies being paid to it.
The applicant argued against this option because she said that following the vesting of the land in the trustee, the trustee would then be obliged to carry out the orders made in the Supreme Court of New South Wales and in particular to proceed with the sale of the property.
I do not think this course would follow. The trustee could not proceed with the sale in accordance with the orders absent vacant possession. Lest he be confused on this point he will no doubt be given a copy of these reasons and the parties, in accordance with the assurances given by the respondent, could approach the New South Wales Supreme Court for clarification or amendment (assuming consent) of the orders.
The orders that I will make were drafted by the parties at my request, in order to ensure that, subject to these reasons, the orders reflected their individual concerns. I stress however that the orders are not those advocated for by the parties but are a product of my decision.
Orders:
I make the following orders:
(i)The period of time before which the Twentieth Defendant shall give vacant possession and provide to the Trustee a set of keys to all buildings on the land pursuant to order 6 of the orders of the Supreme Court of New South Wales made on 13 November 2020 in proceedings 2020/84534 be extended to 5 months after the Relevant Date or 14 days after the death of the Twentieth Defendant, whichever happens earlier.
(ii)The Court notes the agreement of the Plaintiff that if before the date for vacant possession in order 1 above, Matthew Endresz pays to the Plaintiff the amount then charged against the property known as Haven Hill (including both principal and interest) in favour of the Plaintiff pursuant to Order D.3 of this Court in these proceedings made on 21 November 2014 as amended on 27 May 2015, the Plaintiff shall assign to Matthew Endresz (or his nominee) the benefit of its charges over Haven Hill and will take all such steps as are reasonably necessary to obtain a discharge of orders 1 to 9 of the orders of Kunc J made on 13 November 2020. Such agreement is without prejudice to any question of the costs of NSW Supreme Court proceedings no. 2020/84534 including any costs of the trustee for sale.
(iii)The Twentieth Defendant is to pay the Plaintiff’s costs on a party/party basis of and incidental to the Twentieth Defendant’s application filed on 1 April 2021.
(iv)The Plaintiff is to notify the trustee for sale appointed under order 2 of the orders of Kunc J made on 13 November 2020 in proceedings no. 2020/48534 of these orders.
(v)Liberty to both parties to apply.
| I certify that the preceding forty-two [42] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Elkaim. Associate: Date: 21 April 2021 |
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Amendments
12 April 2021 Delete paragraph [9].
Paragraph [10] Replace “The intent of the orders sought in the current application is that the applicant not be obliged to give vacant possession on 9 April 2021 and that her interest also not vest in the trustee on this date” with “The intent of the orders sought in the current application is that her interest not vest on 9 April 2021 and that she not be obliged to give vacant possession on 7 May 2021.”
21 April 2021
Paragraph [42](i): Delete both references to the word “Capital”
Paragraph [42](iii): Replace “1 April 2020” with “1 April 2021.”
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