LTDC Pty Limited v Ridbrook Pty Ltd

[2020] NSWSC 132

Supreme Court

New South Wales

Medium Neutral Citation:

LTDC Pty Limited v Ridbrook Pty Ltd [2020] NSWSC 132

Hearing dates:

20 February 2020

Date of orders:

20 February 2020

Decision date:

20 February 2020

Jurisdiction:

Common Law

Before:

Beech-Jones J

Decision:

(1)   Order 2 of the notice of motion filed in court on 20 February 2020 seeking the stay, be dismissed.

 

(2)   Order that the balance of the notice of motion be dismissed.

 

(3)   Order Mr Young to pay the costs of the plaintiff.

 (4)   Grant the solicitors for Mr Young access to the Court file in accordance with the usual conditions that accompany it.

Catchwords:

Stay of Writ of Possession – no question of principle

Legislation Cited:

Corporations Act 2001 (Cth), s 471B, s 471C

Category:

Principal judgment

Parties:

Ridbrook Pty Limited (Applicant/Defendant)
LTDC Pty Limited (Respondent/Plaintiff)

Representation:

Counsel:
J Rose (Applicant/Defendant)
G Stapleton (Respondent/Plaintiff)

  Solicitors:
KMD Law & Advisory (Applicant/Defendant)
Nelson McKinnon Lawyers (Respondent/Plaintiff)

File Number(s):

2019/229196

EX TEMPORE Judgment

1. Before me is a notice of motion filed in court today on behalf of Mr Bruce Richard Young seeking various forms of order including a stay of a writ of possession over a property in Robertson consisting of a substantial farm (the “property”).

2. In the circumstances in which I will explain, the motion has been brought on the very day that the writ is due to be executed. In fact by the time the application came to the Court, the writ had already been executed by the sheriff so that the form of relief sought involved the sheriff having to vacate the property and return Mr Young to occupation.

3. During 2018, the plaintiff lent a sum to a company Landscape Direct Pty Ltd. The first defendant, Ridbrook Pty Ltd (“Ridbrook”), in effect guaranteed the repayment of that loan. Mr Young was at all material times the director, secretary and moving mind behind Ridbrook. Apparently Ridbrook is the trustee of a discretionary trust. Ridbrook is also the registered proprietor of the property.

4. The period of the loan was said to be three months but it was extended. Eventually, some time in 2018, it went into default. On or about 24 July 2019, the plaintiff filed a statement of claim in this Court naming Ridbrook as the first defendant, and another guarantor company as the second defendant. The relief sought was possession of the property and another property that need not be mentioned, as well as costs. The statement of claim did not seek a money judgment.

5. In August 2019, a defence was filed. It was verified by Mr Young and it appears that, at least at that stage, solicitors were being instructed. Shortly thereafter, a liquidator was appointed to Ridbrook. In October 2019, the liquidator wrote to the plaintiff's solicitors asserting that the proceedings were stayed by operation of the Corporations Act2001 (Cth) as a result of his appointment. The liquidator also stated that “should you make an application for this stay to be lifted, then my position would be to neither consent nor object to any such application”. In fact, given that the only action in these proceedings is the enforcement of the rights of a secured creditor, it seems that the stay imposed by s 471B of the Corporations Act was not engaged (s 471C).

6. By notice of motion filed 18 October 2019, the plaintiff sought to strike out the defence and obtain judgment for possession and costs. Ultimately that notice of motion was listed for hearing before Bellew J on 17 December 2019. Mr Young attended before his Honour on that day.

7. At present there is available the associate's record of proceedings and the transcript of proceedings on 17 December 2019. The Associate’s record and the transcript records that his Honour delivered two ex tempore judgments. The first determined that Mr Young is not a party to the proceedings and could not participate as though he were a party or on behalf of a party. The second judgment determined that judgment for possession should be granted. No doubt it was that that led to the issue of the writ of possession. Thus, this matter is being reagitated today some two months later on the very day that the writ was due to be executed. It seems that very recently Mr Young instructed solicitors, and nothing that follows is intended to be a criticism of their conduct.

8. The notice of motion before me includes not only the stay to which I have referred but further orders including an order under s 198G(3)(b) of the Corporations Act enabling Mr Young to exercise the functions of a director for the purpose of applying to set the writ aside, and as I understand it, apply to set judgment aside and file a defence.

9. A lengthy affidavit from Mr Young was read in support of the motion. Mr Young describes the size of the farming undertaken on the property. This evidence is capable of demonstrating that the loss of possession by him, as the person effectively managing the farm, could cause significant prejudice to the farming operations. He also explains the difficulties faced in managing the property and attending to his affairs, and including this litigation, by reason of the recent bush fires and flooding. Mr Young indicates that his wife is the owner of a substantial property in Mosman which is due to be sold. That was included to provide some assurance that the plaintiff's debt can be met.

10. Aspects of his affidavit address the quantification of the plaintiff's debt which is now said to be over $1 million. His affidavit raises various issues concerning the interest rate that led to that debt allegedly being owed as well as costs, a matter I will return to.

11. In paragraph 64 of his affidavit Mr Young states that he does “not dispute that Ridbrook is indebted to the plaintiff, but however, I dispute the quantification of interests and costs”. That statement is significant. It means that regardless of any dispute over the quantification of the amount of the debt, there is no dispute that there was a default under the relevant security, and that a right to possession arose in the plaintiff.

12. Under the heading "Reasons For The Delay", Mr Young states:

"I'm bringing this application late since judgment was entered in late December 2019. I was aware that most law firms were closed until early to mid January 2020."

13. He then recites events since that time. At first blush it is somewhat remarkable that the affidavit does not include reference to the events from August to December 2019 when Mr Young was actively involved in the proceedings. However, two matters should be noted. First, as I have said, the legal representatives for Mr Young have only recently come into the matter, and they were apparently not aware of how those events transpired. This is especially so in circumstances where they could not access the file because their client was not officially a party.

14. Secondly, it may be that Mr Young understood that the events prior to December 2019 would be documented on the court file, and therefore, it was not necessary for him to address them. Nevertheless, it still means that the position the Court is faced with is this: Mr Young has been on notice of what has been sought since July 2019; he has been aware since December 2019 that there was judgment entered for possession of the land following a hearing before a judge of this Court; and nothing happened to avoid that outcome until just recently when this application was made after the execution of the writ of possession.

15. There is no doubt that the Court can grant a stay for the writ of a possession if, on the showing of proper cause, there is at least some arguable basis to attack the plaintiff's right to obtain possession of the land.

16. I am in no position whatsoever to address any aspect of the merits of some of the complaints about the quantification of the plaintiff's debt. If, as I apprehend it, the plaintiff intends to proceed with a mortgagee sale of the property, then either before or after that sale, all the issues concerning quantification can be raised by Mr Young especially given his status as a guarantor. Nothing that has occurred in the case to date operates as any form of estoppel binding anyone including Mr Young as to matters of quantum. As I said, the relief that was sought in the statement of claim was purely possession of the land.

17. However, what remains is that, even if Mr Young is granted some right to appear on behalf of Ridbrook, it would be an exercise in futility because there is no doubt that a right to possession arose from its default and continues to subsist. In those circumstances, no basis for staying the writ of possession by reference to an attack upon the plaintiff's claim has been shown.

18. Otherwise, it is the case that from time to time stays of writs of possession are allowed to enable parties to order their affairs including to make arrangements to pay the relevant judgment debt. It is also sometimes the case that stays are granted to allow a party, including an occupier of premises, to make orderly arrangements to vacate the premises and remove their property. In some circumstances, a stay to enable farming operations to be either orderly wound down including arrangements for animals and produce can be made.

19. However, in this case, I am not satisfied that any basis for staying the writ of possession has been shown either by reason of the possibility that the debt will be paid out or because of the necessity to make orderly arrangements to hand over the property. In that regard, I return to the fact that Mr Young has been on notice of the position since July of last year, and that this application is now being made at a time after the writ has been executed.

20. Further, I note that an affidavit was read on behalf of the plaintiff in these proceedings which included a statement saying that should the writ be executed, it would be willing to allow Mr Young, his wife or a person nominated by him on reasonable notice, access to the property between the hours of 9am and 5pm within the first seven days following execution of the writ for the limited purpose of making arrangements for the relocation of any limited livestock and personal property, and on conditions where the representative of the plaintiff is also in attendance. To an extent, that ameliorates the concerns that have been raised. I expect the plaintiff to provide such reasonable extension of the period of that indulgence as may be necessary.

21. At this stage, the only order that I will make is that order 2 of the notice of motion filed in court today seeking the stay, be dismissed.

[Counsel addressed]

22. I order that the balance of the notice of motion be dismissed. I order Mr Young to pay the costs of the plaintiff. I grant the solicitors for Mr Young access to the Court file in accordance with the usual conditions that accompany it.

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Decision last updated: 26 February 2020