Ghannam v BB&B Penrith Pty Ltd - [2022] NSWSC 1588

Supreme Court

New South Wales

Medium Neutral Citation: Ghannam v BB&B Penrith Pty Ltd [2022] NSWSC 1588
Hearing dates: 21 November 2022
Decision date: 21 November 2022
Jurisdiction: Equity - Real Property List
Before: Peden J
Decision:
See paragraph [34]

Catchwords:
EQUITY — Equitable remedies — Orders for judicial sale out of court — Where first defendant accepted that plaintiff had an equitable charge over the property — Where second defendant was first registered mortgagee and excused from appearing — Where first defendant in default of previous court orders regarding agreed sale or refinance — Where sale primarily resisted on the basis of an abuse of process — Where orders for sale made

Legislation Cited:
Civil Procedure Act 2005 (NSW) s 56

Cases Cited:
Australia and New Zealand Banking Group Pty Ltd v Donnelly [2012] NSWSC 1615
Bai v Watson Elite Pty Ltd [2022] NSWSC 318
King Investment Solutions Pty Ltd v Hussain (2005) 64 NSWLR 441
Lion White Lead Ltd v Rogers (1918) 25 CLR 533
Sood v Christianos [2008] NSWSC 1087

Category: Principal judgment
Parties: Jamal Ghannam (Plaintiff)
BB&B Penrith Pty Ltd (First Defendant)
Australia and New Zealand Banking Group Ltd (Second Defendant)
Representation:
Counsel:
S Lipp (Plaintiff)
T Hall, solicitor (First Defendant)
Excused from appearing (Second Defendant)
Solicitors:
SD Commercial Lawyers (Plaintiff)
Hall Partners (First Defendant)
Dentons (Second Defendant)

File Number(s): 2022/155845
Publication restriction: Nil

Judgment

The plaintiff, Jamal Ghannam, paid $440,000, on behalf of himself and his daughter, as the deposit for two off the plan units on a property in Penrith (the Property) owned by the first defendant, BB&B Penrith Pty Ltd (BB&B). The development has not progressed at all and the Property remains a vacant lot.
Mr Ghannam seeks orders for the judicial sale of the Property so that the deposit may be repaid from the proceeds of sale.
BB&B accepted that Mr Ghannam has an entitlement to the refund of the deposit as “a debt due” and that it was secured by way of an equitable charge over the Property: see eg Bai v Watson Elite Pty Ltd [2022] NSWSC 318 at [28] (Darke J).
However, BB&B resisted Mr Ghannam’s relief because it was submitted:

The proceedings were improperly brought as an abuse of process; or

Mr Ghannam is not entitled to relief alone because his daughter was also named as a purchaser, and she ought to have been joined as a party.

The issues to be determined are:

Whether BB&B’s grounds of opposition are made out; and

Whether it is appropriate to make orders for the appointment of a trustee for a judicial sale or a receiver.

The Australia and New Zealand Banking Group Ltd (ANZ) was appropriately joined as the second defendant, being the first registered mortgagee (AK446566) and neither opposed nor consented to the orders sought by Mr Ghannam. At ANZ’s request, I excused it from appearing at the hearing. However, ANZ reserved its position as to its own mortgage. Mr Ghannam does not challenge ANZ’s right to be paid…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NSWSC 1588
Decision Date: 21 November 2022

CaseChat Overview and Summary

The case of Ghannam v BB&B Penrith Pty Ltd involved the plaintiff, Ghannam, and the first defendant, BB&B Penrith Pty Ltd, with the second defendant being the registered mortgagee of the property in dispute. Ghannam claimed an equitable charge over the property, which the first defendant accepted. The second defendant was excused from appearing due to being the first registered mortgagee. The primary dispute was whether judicial sale orders should be made out of court, given the first defendant's default in previous court orders regarding the agreed sale or refinance of the property. The first defendant's primary argument against the sale was based on an alleged abuse of process.

The court was required to decide whether to make orders for the judicial sale of the property, considering the default of the first defendant and the acceptance of the equitable charge by the first defendant. The court also needed to assess the validity of the abuse of process argument raised by the first defendant. Additionally, the court had to consider the implications of the second defendant's status as the first registered mortgagee and its excuse from appearing in the proceedings.

The court found that the first defendant's default in adhering to previous court orders justified the making of out-of-court sale orders. The court rejected the abuse of process argument, finding it to be without merit. Given the first defendant's acceptance of the equitable charge and the need to enforce the agreed sale or refinance, the court ruled in favour of the plaintiff. The court ordered that the property be sold by judicial auction, subject to the rights of the second defendant as the first registered mortgagee.

The final orders of the court were that the property be sold by judicial auction, with the proceeds distributed according to the court's directions, taking into account the rights of the second defendant. The court emphasised the importance of enforcing the terms of the agreement and the equitable charge recognised by the first defendant. The orders ensured that the interests of all parties were protected, with the sale proceeding to resolve the dispute effectively.

Orders