Defined Properties Investment ATF the Define Property Trust No. 1 v National Commercial Finance Pty Limited

[2018] NSWSC 1294

Supreme Court

New South Wales

Medium Neutral Citation:	Defined Properties Investment ATF the Define Property Trust No. 1 v National Commercial Finance Pty Limited [2018] NSWSC 1294
Hearing dates:	9 August 2018
Date of orders:	09 August 2018
Decision date:	09 August 2018
Jurisdiction:	Common Law
Before:	Campbell J
Decision:	Dismiss the summons filed in Court today and order the plaintiffs to pay the defendant’s costs of the application
Catchwords:	CIVIL PROCEDURE – Interlocutory application – urgent summons seeking interlocutory injunction – property listed for auction – whether the pleadings demonstrate an arguable case – Uniform Civil Procedure Rules 2005 (NSW) – embarrassing and scandalous – undertaking as to damages – balance of convenience – no evidence to support   COSTS – General rule that costs follow the event
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Nil
Texts Cited:	Nil
Category:	Procedural and other rulings
Parties:	National Commercial Finance Pty Limited (Defendant/applicant) Defined Properties Investment AIF the Define Property Trust No. 1 (Plaintiff/respondent)
Representation:	Counsel: N Chase-Berry (solicitor) (Defendant/applicant) M Foley (solicitor) (Plaintiff/respondent)   Solicitors: ERA Legal (Defendant/applicant) Foleys (Plaintiff/respondent)
File Number(s):	2017/317826

Ex tempore Judgment - Revised

1. I am sitting as Duty judge and the Registrar referred to me a notice of motion filed by the defendant in these proceedings, National Commercial Finance Pty Limited, which has the benefit of a judgment for possession, seeking the dismissal of the balance of proceedings for want of due despatch.

2. When the matter was called on for hearing before me a little before 11:00 am, Mr Foley, solicitor, announced his appearance for the plaintiffs, Defined Properties Investment Limited and George Dimitriou, and sought leave to file in court an urgent summons seeking an interlocutory injunction restraining the defendant from proceeding with the auction of the property the subject of the judgment today.

3. Mr Foley tells me (and Mr Chase Berry, solicitor who appears for the defendant, confirms) that the first time Mr Dimitriou received actual notice that the property was listed for auction today was in a telephone conversation with the defendant’s solicitor yesterday afternoon. In those circumstances the summons has been brought on urgently and at the first available opportunity today.

4. As things stand, I am unaware of the status of the auction. I am unaware whether the matter has yet been reached in what is apparently a list of matters for auction and if so whether the hammer has fallen on the sale of it.

5. The background to this is that proceedings number 2017/317826 were commenced by way of a summons nearly twelve months ago by which the plaintiffs sought to restrain National Commercial Finance Pty Limited from exercising its powers under a mortgage that had been taken out to enable a previous mortgage to be discharged. The finance was intended to be short‑term and is subject to a high interest rate.

6. After some to-ing and fro-ing in this Court, there was a mediation, which was unsuccessful in December 2017. But shortly after the mediation the parties resolved their differences in a Deed of forbearance (“the Deed”) which provided for the payment of a sum in discharge of the mortgage by 15 January 2018. Time was of the essence and lest the plaintiffs default in compliance with the terms of the Deed consent orders giving judgment for possession to the defendant and allowing it to issue a writ of possession forthwith had been delivered in escrow. Default duly occurred and Lonergan J, as the vacation judge, made those orders on 16 January 2018.

7. Since then the plaintiffs have sought by various means to impugn the consent judgment. As I read the file, they have not previously had the benefit of Mr Foley’s services except on one occasion last October when, as it happened, he appeared before me when I was Duty Judge in relation to the matter. At one stage in January a Mr Bully of counsel appeared before Robb J and then later before Button J.

8. Orders have been made granting the plaintiffs the liberty to plead, by way of statement of claim, a case seeking to set aside the previous judgment of the Court. As far as I am aware, notwithstanding several amended summonses claiming very elaborate relief in relation to the matter, it was not until the production of an affidavit prepared on 26 July but only sworn yesterday, 8 August 2018, that anything purporting to be a statement of claim containing averments of material fact has emerged.

9. I have only had the opportunity to read that statement of claim quickly in the course of this urgent application. I did permit myself the observation in arguendo that the proposed statement of claim does not seem to comply with the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). It does not confine itself to a succinct statement of the material facts relied upon to demonstrate an entitlement to the extensive relief sought, which includes setting aside of the judgment of 16 January 2018. Indeed, I would observe that at first blush the pleading contains a number of matters that might be regarded as embarrassing or scandalous in the technical pleading sense.

10. I have looked at the document for the purpose of considering whether or not it gives rise to what appears to be an arguable case for impugning the judgment as the first step in considering whether an interlocutory injunction is warranted and I must say the bar, in this regard, is context sensitive. Given that: there was a settlement apparently freely entered into; a default in the payment out of the mortgage; and consent orders entered in the court which are in the process of execution, I am not satisfied that at first blush this particular pleading, supported as it is by Mr Dimitriou’s affidavit, demonstrates an arguable case.

11. Secondly, although Mr Foley has proffered on behalf of his client the usual undertaking as to damages, there is no evidence before me that the plaintiffs can make good on that undertaking if called upon to do so. There is simply no evidence of that, although Mr Foley tells me that Mr Dimitriou is a man of substance and the corporate plaintiff is the registered proprietor of the land, the value of which probably still exceeds the amount required to discharge the mortgage. It also has an interest in the outcome of other litigation in the Equity Division before Brereton J and Sackar J. Mr Foley tells me if successful the litigation is likely to deliver a large sum of damages to the company.

12. That matter of course is wholly contingent on the favourable decision of the court, a matter I am incapable of assessing on the information disclosed to me so far. It is not obvious to me on the material that the undertaking can be made good, although I note that it is proffered.

13. The final question of course is the balance of convenience. I do not know whether there is any outcome at the auction. It may be that the rights of third parties have intervened already. However, leaving that to one side given that there is no evidence about it one way or the other, I am not satisfied that the balance of convenience favours the plaintiffs in this case.

14. True it is that if the auction goes ahead successfully, the property will be sold and therefore lost to the plaintiffs. On the other hand, there are two significant factors which need to be borne in mind. The first is that the mortgagee is acting in accordance with orders of this Court.

15. Secondly, the plaintiffs, as I have said before, Mr Foley’s involvement has had very many opportunities afforded to him by a number of judges of this Court to bring forward, given other proceedings, a statement of claim that would demonstrate an arguable case for the relief he now seeks. That opportunity, I must say, goes back as early as 23 January 2018 when Robb J made orders for the filing of affidavits in support of his claim for relief by 25 January 2018. Justice Button made further orders on 30 January 2018. And Rothman J made yet further orders on 27 February 2018.

16. On 13 March 2018, the Registrar gave the plaintiffs the opportunity to seek an extension of time of the orders previously made. Justice Garling on 27 March 2018 extended the time for complying with the orders. Adamson J on 17 May 2018 further extended the time for complying with the previous orders.

17. Apart from an ineffective attempt to comply with the orders late at night, online on 19 July 2018, which was rejected by the Court for non-compliance with the UCPR, the plaintiffs have made no effort to do so until coming before me today. Therefore, given that the mortgage remains unpaid and that there is no offer to pay even the amount that Mr Dimitriou says is properly owed into court, I am of the view that were I otherwise satisfied about the arguability of the case, the balance of convenience does not favour making an interlocutory injunction restraining the auction. I dismiss the summons filed in Court today and I order the plaintiffs to pay the defendant’s costs of the application.

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Decision last updated: 21 August 2018