Gerardis v Gerges

[2008] NSWSC 134

CITATION:	Gerardis v Gerges [2008] NSWSC 134
HEARING DATE(S):	25/02/08
JUDGMENT DATE :	25 February 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
EX TEMPORE JUDGMENT DATE:	25 February 2008
DECISION:	Order for specific performance
CATCHWORDS:	CONTRACTS - specific performance - contract to grant mortgage of land - not evidenced by writing - but promisee shows acts of part performance in reliance on the promise - specific performance granted
LEGISLATION CITED:	Conveyancing Act 1919, ss 23C(1)(a), 23E, 54A
CATEGORY:	Principal judgment
CASES CITED:	Khoury v Khouri (2006) 66 NSWLR 241
PARTIES:	Giuseppe Antonia Gerardis - First Plaintiff Rita Maria Columbus Gerardis - Second Plaintiff Fahed Youssef Gerges - First Defendant Noble Potts Point Pty Limited - Second Defendant
FILE NUMBER(S):	SC 4777/07
COUNSEL:	Mr R W Tregenza - Plaintiffs
SOLICITORS:	Carbone Lawyers - Plaintiffs

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

MONDAY 25 FEBRUARY 2008

4777/07 GIUSEPPE ANTONIA GERARDIS & ANOR v FAHED YOUSSEF GERGES & ANOR

JUDGMENT

1 The plaintiffs seek relief against the first defendant, Mr Gerges, by way of specific performance of an alleged oral agreement made on an unspecified date shortly before 24 November 2006.

2 The alleged oral agreement is said to have arisen from conversations between Mr Gerges and the plaintiffs’ solicitor, Mr Carbone. The conversations took place in the context of certain conveyancing transactions then in progress and about to be settled. I am satisfied that Mr Carbone, as their solicitor, spoke with the authority of the plaintiffs when he had the conversations with Mr Gerges.

3 The conversations are said to have given rise to an oral agreement in the terms pleaded at para 10 of the statement of claim. Mr Carbone’s evidence at paras 8 to 11 of his affidavit of 20 February 2008 enables the court to conclude that the oral agreement as pleaded was made. I find accordingly.

4 It is pertinent to note that the part of the dialogue recorded at para 10 of the affidavit refers explicitly to Mr Gerges’ undertaking to sign documentation Mr Carbone had prepared which, on the evidence, is a form of the deed which is the exhibit DMC 7 to Mr Carbone’s affidavit of 25 February 2008, which form of deed had annexed to it a form of mortgage under the Real Property Act 1900.

5 In substance, the oral agreement was one under which Mr Gerges agreed to grant to the plaintiffs a mortgage of his property at Kemp's Creek to secure a promise made by him to pay money to the plaintiffs in consideration of the plaintiffs not insisting upon full payment of the balance of purchase moneys upon completion of a sale by the plaintiffs of a property at Kings Cross to a company associated with Mr Gerges. The plaintiffs, for their part, agreed to settle the sale of the King’s Cross property upon payment of part only of the balance of purchase moneys. They did this in return for Mr Gerges’ promise to grant them the mortgage.

6 Having regard to the evidence of Mr Carbone, I am satisfied that the terms of the oral agreement are those reflected in the draft deed and mortgage, with one point of difference or clarification. The draft deed makes it clear, as does the evidence about the conversations, that the sum concerned was $530,000, whereas the form of mortgage annexed to the deed refers to a sum secured of $485,000. On the whole of the evidence, it must be accepted that the mortgage was intended to refer to and to secure a sum of $530,000 and that the agreement to grant a mortgage concerned a mortgage to secure $530,000 rather than $485,000.

7 The oral agreement relied on by the plaintiffs is an agreement by Mr Gerges to grant a mortgage of his property at Kemp’s Creek. It is therefore an agreement for the sale or disposition of land or an interest in land to which s 54A of the Conveyancing Act 1919 applies:

“(1) No action or proceedings may be brought upon any contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged.

(2) This section applies to contracts whether made before or after the commencement of the Conveyancing (Amendment) Act 1930 and does not affect the law relating to part performance, or sales by the court.

(3) This section applies and shall be deemed to have applied from the commencement of the Conveyancing (Amendment) Act 1930 to land under the provisions of the Real Property Act 1900 .”

8 The plaintiffs accept that the requirement for writing arising from s 54A(1) is not satisfied but contend that the barrier to enforceability that would otherwise arise from that section is forestalled by the doctrine of part performance preserved by s 54A(2).

9 It is submitted on behalf of the plaintiffs that sufficient acts of part performance were taken by them in this case. Such acts must, of course, be acts unequivocally referable to the oral agreement – in other words, acts the doing of which are explicable by reliance on the oral agreement: see Khoury v Khouri (2006) 66 NSWLR 241.

10 The acts on which the plaintiffs rely are those by which they proceeded to complete the sale of the Kings Cross property to the company associated with Mr Gerges without payment on completion of the whole of the balance of purchase moneys, in other words, the acts of conveying the property upon payment of less than the full balance payable under the contract on completion and on the faith of the promise by Mr Gerges to secure that sum by the mortgage of Kemp’s Creek he had agreed to give them. It is clear that the plaintiffs, as vendors of the Kings Cross property, would not have acted as they did except in reliance on and by reference to Mr Gerges' promise to grant the mortgage of the Kemp’s Creek property.

11 There was accordingly part performance satisfying s 54A(2). The result is the same if the requirement for writing is sourced in s 23C(1)(a) of the Conveyancing Act and the exempting effect of part performance is that coming from s 23E.

12 I am satisfied that the plaintiffs have made good their case to enlist the support of equity to compel performance by Mr Gerges of his promise to grant the mortgage of the Kemp’s Creek property. An order will be made accordingly.

13 I should, however, refer to the fact that Mr Gerges has not appeared and has taken no part in the hearing. I have before me clear evidence of service. The plaintiffs’ solicitor, Mr Carbone, deposes to having effected personal service on Mr Gerges at the Holiday Inn, Potts Point, at 12 noon on 10 October 2007. That was good and adequate service in accordance with the rules.

14 Mr Gerges has not filed any appearance or any defence. The statement of claim, in the usual way, drew attention to the actions that he, as defendant, could take in response to it. In particular, the statement of claim contained the standard form of notification:

“You will be in default, if you do not file a defence within 28 days of being served with this statement of claim. The Court may enter judgment against you without any further notice to you. The judgment may be for the relief sought in the statement of claim and for the plaintiffs' costs for bringing these proceedings."

15 There was also stamped on the front of the statement of claim as served a message:

“This matter has been listed before the court on 3/12/07 at 9.30 am.”

16 The court file shows that the matter was indeed before the Registrar on that date and that there was no attendance or appearance for the defendants; nor was there any appearance when the matter came back before the Registrar on 12 February 2008.

17 Mr Gerges has been served and had notice of what he must do if he wished to defend the claim. He had notice of when the matter would be before the court. He did nothing to defend himself and there is no reason why the court should not proceed to make the order warranted by the evidence presented on behalf of the plaintiffs.

18 I shall make an order requiring Mr Gerges to grant a mortgage as promised, an order that the Registrar may sign for him if Mr Gerges does not comply with the order within a short time after it is served on him and an order that Mr Gerges pay the plaintiffs’ costs. I would appreciate counsel making available an appropriate minute of the orders.

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