Lords Holdings Pty Ltd v Reliance Financial Service Pty Ltd

[2009] NSWSC 1307

CITATION:	Lords Holdings Pty Ltd & Ors v Reliance Financial Service Pty Ltd & Ors [2009] NSWSC 1307
HEARING DATE(S):	23 November 2009
JUDGMENT DATE :	23 November 2009
JURISDICTION:	Equity
JUDGMENT OF:	Slattery J at 1
EX TEMPORE JUDGMENT DATE:	23 November 2009
DECISION:	Adjourned to 30 November 2009 at 10am for further hearing allowing the plaintiff to engage a solicitor.
CATCHWORDS:	EQUITY - equitable remedies - self-represented plaintiff - proceedings resolved - fund for security for costs in Court - one of three plaintiffs seeks payment out of Court - inadequate evidence before the Court for payment out of court to be ordered
CATEGORY:	Principal judgment
PARTIES:	First Plaintiff: Lords Holdings Pty Ltd ACN 079 789 745 Second Plaintiff: Stefan Martin Allan Third Plaintiff: Dennise Gloria Allan First Defendant: Reliance Financial Service Pty Ltd ACN 003 478 966 Second Defendant: Cosygaz Pty Ltd ACN 104 106 541 Third Defendant: Sam Cassaniti Fourth Defendant: Travis Rourke
FILE NUMBER(S):	SC 1809/04
COUNSEL:	Plaintiffs: Mr Stefan Allan (Self Represented) Defendants: No appearance
SOLICITORS:	Plaintiffs: Mr Stefan Allan (Self Represented) Defendants: No appearance

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST

SLATTERY J

MONDAY 23 NOVEMBER 2009

1809/04 LORDS HOLDINGS PTY LTD ACN 079 789 745; STEFAN MARTIN ALLAN AND DENNISE GLORIA ALLAN v RELIANCE FINANCIAL SERVICE PTY LTD ACN 003 478 966; COSYGAZ PTY LTD ACN 104 106 541; SAM CASSANITI AND TRAVIS ROURKE

JUDGMENT [EX TEMPORE]

1 HIS HONOUR: Lords Holdings Pty Limited has conducted business as a property developer and a lender for many years. It has borrowed money for the last decade from Reliance Financial Services Pty Limited. Mr Stefan Allan is the sole director, secretary and shareholder of Lords.

2 Some years ago Mr Allan borrowed the certificate of title for a house owned by his grandmother, Josephine Mizzi, to secure an obligation of $125,000 which Lords owed to Reliance. He gave the certificate of title for Ms Mizzi’s house to Reliance. In 2002 Mr Allan wanted the certificate of title returned from Reliance. He was under strong family pressure to do this.

3 Mr Allan opened negotiations with Reliance for the return of the certificate of title. He signed an agreement with Reliance committing himself and Lords to repayment of the sum of $125,000 that was outstanding to Reliance. As security for this obligation Reliance took a mortgage over two properties. One was a property owned by Mr Allan’s wife, Dennise Gloria Allan, at Castle Hill. The other was an investment property owned by Lords at The Esplanade, in Cairns.

4 Disagreements arose between Lords and Reliance about the repayment of this $125,000. There were disagreements about the interest rate, about whether or not Reliance was entitled to appoint a director to the board of Lords in place of Mr Allan and about a demand by Reliance that Mr Allan transfer another security property to a company Cosygaz Pty Limited. These differences could not be resolved. As a result Lords and Mr and Mrs Allan commenced these proceedings in March 2004 against Reliance, Cosygaz and other parties.

5 The proceedings sought relief to avoid the agreement made between Ms Mizzi and Reliance, to set aside a transfer which Reliance had apparently effected of the other security property to Cosygaz. Reliance had appointed Mr Travis Rourke as a director of Lords. The proceedings also sought his removal from Lord’s board.

6 Mr Allan, who appears today on behalf of Lords Holdings with the Court’s leave, says that Lords’ remaining obligation to Reliance was paid out in 2007. The sale of a property owned by Dennise Allan is said to have sourced the funds used to discharge Lords’ debt to Reliance.

7 The file has been largely inactive since mid 2006. It only became active again late in 2008 when Lords filed a motion seeking the return of a sum of $15,000 which had been paid into Court by Lords as security for the defendants ‘ costs of the proceedings.

8 The issue before the Court today is whether or not that $15,000 should be returned to Lords. For the reasons which are set out below the evidence does not yet support the making of such an order. Resolution of the matter is complicated by events that have occurred in the years since the proceedings commenced. The matter is sufficiently complex that, as I have pointed out to Mr Allan, it is highly desirable that he obtain some legal representation for the purpose of making this application for the return of the money. It may well be possible for that to be returned quickly and for this file to be finally closed. There are a number of hurdles to be passed before that can occur. I will list these so the Court can be better assisted in having this matter finally disposed of and so that the file can be closed.

9 First, it is not clear from the Court file at whose request the security for costs was paid into Court. The request may have been made by any one of the defendants. It may be that all the defendants have an interest in opposing repayment of the security to Lords. It is necessary for adequate notice to be given to all of the defendants. Notice of this application should be given to all the defendants at an address at which it can be realistically inferred that it will come to their attention.

10 Second, Mr Allan’s affidavit of 23 November 2009 does depose to service on the first defendant, Reliance at Suite 1/106 Moore Street, Liverpool. That affidavit assumes but does not actually establish that that address is Reliance’s current address. There is a connection between Reliance and that address within the Court file but it is an old link. A letter was received by the Court from the then solicitor for Reliance giving notice of ceasing to act. The address the solicitor gave in that notice as the last known address for Reliance was Suite 1/106 Moore Street, Liverpool. It is probable this was the address at some stage. However, adequate proof of service on Reliance at a current address of the company is needed.

11 Third, Mr Allan seeks to appear here in person. Today I have given him leave to explain the case he wants to present. However he does so in circumstances where there also appears to be on the Court file one solicitor for the first plaintiff, Lords and a different solicitor for the second and third plaintiffs, Mr and Mrs Allan. This compounds the problems that Mr Allan now encounters. He says that he has not spoken to either of these solicitors in recent times about this matter but to another solicitor who he has not identified. I am reluctant to allow any of these plaintiffs to continue with the application without resolving the question of their proper representation. All the plaintiffs need to decide if they have one solicitor acting for them and to appoint that solicitor and then for that solicitor to make the application to the Court. If that cannot be done then an explanation needs to be given to the Court of why the representation needs to become more complicated.

12 Fourth, a problem related to the last issue is that there is no evidence explaining the respective entitlements of the individual plaintiffs to the sum proposed to be paid out of Court. If moneys are to be paid out the Court needs such evidence in order to ensure that by giving the monies to one plaintiff the Court does not inadvertently disadvantage another and create an unnecessary dispute amongst the plaintiffs. The Court does not know anything about the current relationship between the plaintiffs. Nothing can be assumed. This needs to be proved so that the Court is not creating one problem when attempting to solve another.

13 Fifth, the matter is further complicated by the Court file’s a reference in July 2004 to there being a liquidator of the first plaintiff, Lords. The liquidator is said to have been one Ivor Worrall. This reference may be a mistake. But it may be accurate. Before these monies can be paid out, whether or not Mr Worrall was Lord’s liquidator would need to be explained so that any priorities that Mr Worrall might have for payment of monies into Court can also be resolved. If Lords went into liquidation at some point after the commencement of these proceedings and remains in liquidation the liquidator is the appropriate applicant on behalf of the company, not Mr Allan. If Mr Allan continues to make this application he will need to explain that Lords is no longer in liquidation.

14 Also I know nothing about the status of any liquidation. In an amended statement of claim filed in 2005 Lords was stated to be in liquidation. I would expect another person who must be given notice of this application is Mr Worrall, or the current liquidator, before payment out of the Court can be ordered.

15 Finally, Mr Allan says to me that he now wishes to engage a solicitor to present this application. I propose to adjourn the proceedings for one week to allow that to occur. In one week’s time matters may have been resolved in such a way that orders can be made to pay the security for costs to some combination of the plaintiffs or the liquidator. On the present evidence before me an order for payment out cannot be made. For those reasons I will adjourn the matter until 10am on Monday 30 November 2009 for hearing.

16 If the matter is not ready to proceed on that day and appropriate notices to other parties have not been given, it is possible that I will direct the giving of notice to all parties so that they can choose to come before the Court on this application. If that is required I will have to stand over these proceedings again so that the matter can be resolved. It is undesirable that inactive files remain within the Court system when they can be resolved and closed. Now that the second plaintiff, Mr Allan has come before the Court it should be possible to resolve the matter in the way I have foreshadowed.

17 This matter is adjourned to 30 November 2009 at 10am for further hearing.

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