GI 277 Pty Ltd v The Grill Haus Pty Ltd

[2023] NSWSC 391

Supreme Court

New South Wales

Medium Neutral Citation:

GI 277 Pty Ltd & Anor v The Grill Haus Pty Ltd [2023] NSWSC 391

Hearing dates:

18 April 2023

Date of orders:

18 April 2023

Decision date:

18 April 2023

Jurisdiction:

Common Law

Before:

Chen J

Decision:

(1) Order, pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005, that the defence filed 2 March 2023 be struck out.

(2)   Order that the balance of the plaintiffs' notice of motion filed 9 March 2023 be stood over for further directions before the Common Law Registrar on 3 May 2023.

(3)   All questions of costs on the notice of motion are reserved.

Catchwords:

LAND LAW – possession of land – default under mortgage – where default admitted – where defence discloses no defence to the claim for possession

CIVIL PROCEDURE – pleadings – striking out – where no reasonable defence disclosed – no issue of principle

Legislation Cited:

Conveyancing Act 1919 (NSW)

Real Property Act 1900 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Category:

Procedural rulings

Parties:

GI 227 Pty Ltd (first plaintiff)
GI 278 Pty Ltd (second plaintiff)
The Grill Haus Pty Ltd (defendant)

Representation:

Counsel:
Mr D Farrar (plaintiffs)

Solicitors:
Farrar Lawyers (plaintiffs)

File Number(s):

2023/32425

Publication restriction:

Nil

Judgment ex tempore

Introduction

1. By statement of claim filed 31 January 2023, GI 277 Pty Ltd (‘the first plaintiff’) and GI 278 Pty Ltd (‘the second plaintiff’) claim possession of land described as Ground Floor, Shop 1, 8 Water Street, Sans Souci NSW (folio identifier 1/SP 76523 – ‘the property’). The Grill Haus Pty Ltd is the registered proprietor of that property, and the defendant to the claim.

2. On 2 March 2023 the defendant filed a defence to the statement of claim.

3. The plaintiffs, by notice of motion filed 9 March 2023, seek an order striking out that defence, that judgment be entered in their favour for possession of the property, and for leave to issue a writ of possession. In line with Practice Note SC CL 6, par 21, the plaintiffs were granted leave by Davies J, on 9 March 2023, to file that notice of motion.

4. The plaintiffs’ notice of motion was case managed by the Common Law Registrar. On 22 March 2023 an order was made by the Registrar that the defendant was to file and serve any evidence in connection with the plaintiffs’ notice of motion by 5 April 2023. No evidence was filed, nor served.

5. The defendant has not appeared today, although Mr Farrar indicated, in line with the orders made by the Registrar, that he advised the defendant of the orders made on that day, and he received a response from the director of the defendant.

Background facts

6. The background facts are confined, and are drawn from the statement of claim (‘SOC’).

7. On 20 August 2021 the first plaintiff entered into an agreement with the defendant, wherein the first plaintiff agreed to loan the defendant money, and the defendant agreed to repay that amount, with interest and charges, by 21 November 2021 (‘the first loan agreement’): SOC, pars 3 and 5.

8. The terms of this loan agreement included that: (a) a mortgage was to be given over the property as security for the agreement; (b) it constituted an event of default under the agreement if monies payable were not paid by the due date for payment (being 21 November 2021); and, (c) upon the happening of an event of default, the first plaintiff could exercise various rights including taking possession of the property: SOC, par 5.

9. Mohamed Hammoud, a director of the defendant, guaranteed the first loan agreement: SOC, par 3.

10. On 20 August 2021 the second plaintiff entered into an agreement with the defendant, wherein the second plaintiff agreed to loan the defendant money, and the defendant agreed to repay that amount, with interest and charges, by 21 November 2021 (‘the second loan agreement’): SOC, par 6.

11. The terms of this loan agreement included that: (a) a mortgage was to be given over the property as security for the agreement; (b) it constituted an event of default under the agreement if monies payable were not paid by the due date for payment (being 21 November 2021); and, (c) upon the happening of an event of default, the second plaintiff could exercise various rights including taking possession of the property: SOC, par 7.

12. Mohamed Hammoud also guaranteed the second loan agreement: SOC, par 6.

13. The plaintiffs advanced the money under the first and second loan agreements: SOC, par 9.

14. Following entry into the agreements, the defendant executed mortgages over the property in favour of the plaintiffs, and the plaintiffs caused those mortgages to be registered: SOC, pars 10-12.

15. The defendant, and Mr Hammoud, failed to pay all monies pursuant to the terms of the first and second loan agreements: SOC, par 13. Following this default, the plaintiffs entered into a forbearance agreement with the defendant and Mr Hammoud. The key term of that agreement is that it extended the due dates under the agreements to 19 February 2022: SOC, par 15.

16. The defendant did not pay the monies payable under the agreements, as varied by the forbearance agreement, by the extended due date: SOC, par 16.

17. On 8 December 2022 the plaintiffs served the defendant, and Mr Hammoud, with notices pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) and s 111 of the Conveyancing Act 1919 (NSW) in relation to the first and second mortgages, without response: SOC, pars 18-19.

The defence filed

18. The defence, which was signed by Mr Hammoud, is in the following terms:

1. The defendant has not been served with any default notice prior to statement of claim served upon the defendant on 31/01/2023.

2. The defendant disputes the default rates of interest and fees applied during the loan expiry period as per original loan agreements stop

3. Statement of claim does not make mention of monies claimed by the plaintiff.

4. The defendant made several calls and emails to the plaintiff and their solicitors for the purposes of seeking to reach an amicable agreement towards the discharge of the plaintiff’s (sic) loan by way of refinance. However, plaintiff and their solicitors have not responded at all communications by the defendant.

5. The defendant’s sole director and company secretary intended to lodge the defence prior to this date. However, due to ill health and recent hospital admission, lodgement of that offence has been delayed until today, 2 March 2023. Please see two (2) medical documents attached.

19. That defence does not plead any matter which, if proved, would provide a defence to a claim for possession; and it is, more generally, non-compliant with rr 14.6-14.7 and 14.15(3) of the Uniform Civil Procedure Rules 2005 (NSW) (‘the UCPR’).

20. The defence will, pursuant to r 14.28 of the UCPR, be struck out.

Summary judgment and the application for a writ of possession

21. The plaintiffs seek judgment for possession of the property, and leave to issue a writ of possession. The material in support of the application for judgment is extremely confined and, in connection with the application for a writ, there is no affidavit of the kind required by r 39.3 of the UCPR.

22. In those circumstances I am not presently prepared to accede to the plaintiffs’ application for those orders, and Mr Farrar indicated that the next step will be for the plaintiffs to apply for default judgment.

Orders

23. For the above reasons, I make the following orders:

1. Order, pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005, that the defence filed 2 March 2023 be struck out.

2. Order that the balance of the plaintiffs' notice of motion filed 9 March 2023 be stood over for further directions before the Common Law Registrar on 3 May 2023.

3. All questions of costs on the notice of motion are reserved.

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Decision last updated: 18 April 2023