Magarditch v Australia & New Zealand Banking Group Ltd

[1999] FCA 502

FEDERAL COURT OF AUSTRALIA

Magarditch v Australia & New Zealand Banking Group Ltd [1999] FCA 502

MAGARDITCH & ORS v AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED & ANOR

NG 1065 of 1997

JUDGE:         SACKVILLE J
PLACE:         SYDNEY
DATE:           22 APRIL 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1065 OF 1997

BETWEEN:

GERIER AGOP MAGARDITCH
First Applicant

JAKE SOURIAN
Second Applicant

MAGIC AUSTRALIA PTY LTD
Third Applicant

AND:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
First Respondent

IAN LAWRENCE STRUTHERS (THE APPOINTED LIQUIDATOR FOR MAGIC AUSTRALIA PTY LIMITED)
Second Respondent

JUDGE:

SACKVILLE J

DATE OF ORDER:

22 APRIL 1999

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The motions filed on 19 April 1999 and 21 April 1999 be dismissed.

2.The first applicant pay the respondents’ costs of the motions.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1065 OF 1997

BETWEEN:

GERIER AGOP MAGARDITCH
First Applicant

JAKE SOURIAN
Second Applicant

MAGIC AUSTRALIA PTY LTD
Third Applicant

AND:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
First Respondent

IAN LAWRENCE STRUTHERS (THE APPOINTED LIQUIDATOR FOR MAGIC AUSTRALIA PTY LIMITED)
Second Respondent

JUDGE:

SACKVILLE J

DATE:

22 APRIL 1999

PLACE:

SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

The Application

1. This is an application brought on behalf of the first applicant (“the applicant”) in proceedings determined on 29 January 1999 by a Judge of this Court, Einfeld J: Magarditch v Australia and New Zealand Banking Group Ltd [1999] FCA 35. The applicant moves on two notices of motion, filed respectively on 19 April 1999 and 21 April 1999. The principal relief he seeks is the following:

   ·   an order restraining the first respondent (“the Bank”) from seeking possession of a property at 2A First Avenue, Willoughby, (“the Property”), pending the determination by the Full Court of an appeal from the judgment of Einfeld J; and

   ·   an order restraining the Bank from ordering the New South Wales Sheriff to remove the applicant or his wife from the Property pursuant to a writ of possession issued by the Supreme Court of New South Wales, pending the determination of the appeal by the Full Court.

   It appears that the registered proprietors of the Property are the applicant and his wife.

2. The applicant is not legally represented.  However, I gave leave to his son (“Mr Sourian”), the second applicant in the proceedings before Einfeld J, to represent the applicant.  I also gave the applicant an opportunity to address the Court on the current application.

   The Proceedings in the Federal Court

3. I have referred to the first and second applicants in the proceedings before Einfeld J.  The third applicant was Magic Australia Pty Ltd (“Magic”), now in liquidation.  Magic was a company controlled by the applicant and his wife, but of which Mr Sourian may have acted as a director.  The respondents to the proceedings were the Bank and the liquidator of Magic.

4. The proceedings ultimately determined by Einfeld J were commenced by the applicants in the Equity Division of the Supreme Court of New South Wales.  However, they were cross-vested to this Court by an order of Young J on 5 December 1997, because of what were described as allegations of corruption against Judges of the Supreme Court.  It should be said that Mr Sourian has persisted today in making allegations of this nature without having the slightest evidence to substantiate them.

5. The proceedings before Einfeld J are but one episode in litigation between the Bank, the liquidator and the applicant (and his wife and son) over many years.  Einfeld J’s judgment, which was delivered after a hearing of five days and is fifty-three pages in length, sets out some of the background.  The history is also addressed at length in the judgment of the New South Wales Court of Appeal in Margaditch v Australia and New Zealand Banking Group Ltd, unreported, 23 September 1998.  I do not repeat the history here.

6. The applicants, in the proceedings determined by Einfeld J, sought leave to file an amended statement of claim which alleged that the Bank and the liquidator had each breached various duties owed to the applicants.  I was informed that the argument on the leave application before Einfeld J ranged widely and that the applicants made allegations of fraud against the Bank, the liquidator and others going beyond the pleaded case.

7. His Honour stated his conclusions as follows (at pars 155-158):

   “The two preliminary questions to be determined are, first, whether Mr Sourian and Mr Magarditch should be given leave to bring on behalf of Magic all or some of the claims set out in the further amended statement of claim; and second, whether the projected amendment to the further amended statement of claim should be allowed on the basis that there are grounds for an inquiry into the conduct of the liquidator?  After considering whether these questions should perhaps be deferred to the end of the hearing, I have determined that it is appropriate to deal with them summarily.  My reason is because I have decided that the claims clearly do not raise arguable issues.

   Although I earlier entertained some doubts in the matter, I have, after exhaustive consideration of the material, eventually come to the inevitable conclusion that there is no basis upon which the claims made could succeed.  With regard to the allegations against the bank, all the matters have previously been litigated except the allegations of conspiracy, fraud, and the improper exercise of the power of sale of 138 Victoria Rd.  Matters already decided cannot be re-agitated unless the results were procured by fraud.  For the reasons I have given, no case of fraud or conspiracy could possibly succeed, and the sale of 138 Victoria Rd carried the imprimatur of a Judge’s direction.

   The claim for negligence against the liquidator and the projected application for an inquiry into his conduct are inexorably intertwined.  Although there are individual actions or inactions which if they had occurred in another case and in other circumstances might well have warranted a second look, I have found nothing which in the circumstances of this case could call into question the impugned activities of the liquidator here.

   There is therefore no point in granting leave to Mr Magarditch and Mr Sourian to represent Magic in the proceedings as I do not believe that any case according with legal principle has been made out for that leave to be granted.”

8. The applicants have filed a notice of appeal against His Honour’s orders and the appeal is set down for hearing by a Full Court on 24 and 25 May 1999.

9. I should add that the applicants in the proceedings in this Court have sought leave to file a further amended statement of claim, which makes further allegations of impropriety on the part of the Bank and the liquidator.  The application for leave to amend has been stood over, pending the determination of the appeal from the judgment of Einfeld J.

   The Proceedings in the Supreme Court

10. Although it is not necessary for the purposes of the present application to canvas the detailed history of the proceedings in the Supreme Court of New South Wales, some matters should be noted.

11. On 28 April 1994, Windeyer J made orders in proceedings in which the applicant and his wife sought orders removing a caveat lodged by the Bank on the Property.  The Bank’s cross-claim sought an order for possession of the Property, based on what was said to be a default by the applicant and his wife under a guarantee given by them to support the indebtedness of Magic to the Bank.

12. Windeyer J generally found in favour of the Bank, but referred to the Master a question as to whether the Bank was entitled to apply, as it did, the proceeds of sale of a property at Gladesville, which had been mortgaged by Mr Sourian to the Bank, in first reducing Mr Sourian’s indebtedness as registered mortgagor.  Master McLaughlin subsequently found (contrary to the Bank’s submissions) that the proceeds should first have been applied to reduce the indebtedness of Magic.

13. An appeal was brought by the Bank against this finding.  Santow J, in a judgment of thirty-four pages, determined the appeal in favour of the Bank: Australia and New Zealand Banking Group Ltd v Gerier Magardith and Sonia Magardith, unreported, Santow J, 17 April 1997.  His Honour made an order, inter alia, for possession of the Property in favour of the Bank.

14. On 23 September 1998, the New South Wales Court of Appeal dismissed an application by the applicant and his wife for leave to appeal from the judgment of Santow J.  The Court of Appeal, in a judgment of fifty-one pages, considered the issues carefully and expressed their agreement with Santow J’s decision: Magarditch & Anor v Australia and New Zealand Banking Group Ltd, unreported, NSWCA, 23 September 1998.  Their Honours added this comment (at 50-51):

    “The criticisms made of the other judgments or of the liquidator or the Bank or its officers are not shown in the material presented to have any substance.  They are irrelevant to the present application.  Mr and Mrs Magarditch and Mr Sourian have had every opportunity to challenge in the appropriate way anything done by the Bank or the liquidator.  With the exception of the decision of Master McLaughlin, which Santow J overruled, in our opinion correctly, these challenges have failed.  There is nothing to suggest that they deserved any other fate.  We have looked carefully to see whether on acceptable evidence any injustice has been done by the Bank or the liquidator to Mr and Mrs Magarditch or to Mr Sourian or to Magic and have found none.”

15. The applicant and his wife filed an application for special leave to the High Court from the decision of the Court of Appeal.  This application has not yet been determined.

16. On 30 March 1999, the applicant and his wife applied to the Supreme Court for a stay of the order for possession granted by Santow J.  The application was provoked by the service of a notice to vacate from the Sheriff’s Office, pursuant to a writ of possession issued by the Bank on 27 October 1998.  In his determination of the application, Handley JA considered that it was not reasonable to have given the applicant and his wife, who have apparently lived in the house for thirty-five years, a mere forty-eight hours notice of the intention to evict them: Magardith v Australia and New Zealand Banking Group Ltd, unreported, Handley JA, 31 March 1999.  However, his Honour refused an extended stay, saying this (at 9):

    “The position fundamentally is that the Bank has been legally entitled to possession since 1994 and the last barrier to the enforcement of its rights was removed by the judgment of this Court in September 1998.”

    His Honour continued:

    “The position of the claimants has to be accommodated because of the failure of the Sheriff to give fair and decent notice of his intention to execute the writ but, in my judgment, that is the extent of their rights to be protected against the enforcement of the writ.  I therefore order that execution of writ of possession dated 27 October 1998 be stayed until Friday 16 April 1999.  I refuse any other or further stay of execution.”

17. I have been informed that a further application to the High Court by the applicant and his wife for a stay was dismissed on 16 April 1999 by Gaudron J.

18. The most recent event in this prolonged litigation was the issue of a writ of possession by the Supreme Court on 20 April 1999.

    Reasoning

19. In my view, this is not an appropriate case for the stay sought by the applicant, for four reasons.

20. First, although there was apparently a wide-ranging debate before Einfeld J, the only effect of a successful appeal from his Honour’s decision would be to allow the applicants before Einfeld J to file a further amended statement of claim in those proceedings and to give leave to Magic to bring all or some of the claims set out in the amended statement of claim.  So far as appears from the material before me, the pleadings sought to be relied on by the applicants do not plead that the judgments supporting the order for possession were procured by fraud and should be set aside.  Thus, even if the appeal were to have reasonable prospects of success (a matter it is unnecessary to consider), the proceedings currently on foot in this Court do not include a claim that the orders made in the Supreme Court by Windeyer J and Santow J (and affirmed by the Court of Appeal) should be set aside.

21. If it is relevant, the same position appears to apply in relation to the proposed amended statement of claim the applicants have sought leave to file in this Court.  No relief sought in the proposed pleading impugns the judgments which provide the foundation for the order for possession of the Property.

22. Secondly, Mr Sourian’s argument, that the improper conduct of the liquidator has deprived Magic of funds that would have enabled it to pay out the mortgage, has been rejected by the Court of Appeal and by Einfeld J.  In any event, even if true, the contentions put forward on behalf of Magic and the applicant would not, of themselves provide a basis for setting aside the relevant orders granting the Bank possession of the Property.

23. Thirdly, there is nothing in the evidence before me, voluminous as it is, that suggests that the applicant (whether alone or with his wife) has an arguable case for setting aside the judgments making the orders granting the Bank possession of the Property.  The unsupported allegations of corruption by a judicial officer do not take the matter further.  Thus, even if such a case were to be pleaded, it is not presently supported by evidence sufficient to establish an arguable case.

24. Fourthly, the allegations made on behalf of the applicant have been agitated in other proceedings and have been found to lack any foundation.  As Mr Harrowell, who appeared for the liquidator, pointed out, the applicant and his wife (and Mr Sourian) have had extensive opportunities to put their contentions of fact and law to the courts.  While one can  have sympathy with people who are about to lose their home because of failure to pay moneys due under a guarantee, that does not mean that courts should provide repeated opportunities to air allegations regardless of the rejection of those allegations in earlier proceedings, or should accept delays in the enforcement of rights found to be established after prolonged litigation.

25. The application for a stay must be dismissed.  The first applicant should pay the respondents’ costs.

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.

Associate:

Dated:             22 April 1999

Appearing for the First Applicant:	Mr J Sourian (by leave)
Solicitor for the First Respondent:	Norton Smith & Co
Solicitor for the Second Respondent:	Hunt & Hunt Solicitors
Date of Hearing:	22 April 1999
Date of Judgment:	22 April 1999