Mark Daniel v Donco Iloski
[2019] VCC 1342
•3 September 2019
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
EXPEDITED LIST
Case No. CI-18-04374
| MARK DANIEL | Plaintiff | |
| V | ||
| DONCO ILOSKI | Defendants | |
| (and others according to the attached schedule) | ||
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JUDGE: | HER HONOUR JUDGE A RYAN | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 9 July 2019 | |
DATE OF RULING: | 3 September 2019 | |
CASE MAY BE CITED AS: | Daniel v Iloski & Ors | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 1342 | |
REASONS FOR RULING
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Subject: PRACTICE AND PROCEDURE
Catchwords: Application to set aside summary judgment for possession of land – absence of the defendants at the hearing – applicable tests for setting aside summary judgment considered – application to set aside judgment refused – plaintiff’s application for costs of summary judgment application under the slip rule granted
Legislation Cited: County Court Civil Procedures Rules 2008 and 2018;
Transfer of Land Act 1958 (Vic)
Cases Cited: ANZ v Loftus [2016] VSC 58;
Duck Boo International Co Ltd v Mizzan Pty Ltd [2006] VSCA 241;
Euroasia (Pacific) Pty Ltd v Michael [2008] VSC 153;
Heller Financial Services Pty Ltd v Solczaniuk (1989) 99 FLR 304;
Hoskins v Van Den-Braak (1988) 43 NSWLR 290;
Kostokanellis v Allen [1974] VR 596;
Lubura v Nezirevic [2013] VSCA 215;
Mathieson Nominees Pty Ltd v Aero Developments Pty Ltd [2016] VSC 131;
Pappas v Bowmark Pty Ltd [1998] VSCA 120;
Perpetual Trustees Victoria Ltd v Gheorghui & Anor [2007] VSC 412;
Pyramid Building Society (in liq) v Scorpion Hotels Pty Ltd [1998] 1 VR 188;
R v Cripps; Ex parte Muldoon [1984] QB 686 at 695; [1984] 2 All ER 705;
Shaddock & Associates Pty Ltd v Council of the City of Parramatta (No.2) (1982) 151 CLR 590;
Togher & Anor v Alexander & Ors (No 4) [2019] NSWDC 337;
Tolhurst Druce and Emmerson (a firm) v Maryvell Investments Pty Ltd (in liq) [2007] VSC 271;
TSC Nominees Pty Ltd v Canham Commercial Interiors Pty Ltd [2017] VSC 86;
Xiao Hui Ying v Perpetual Trustees of Victoria Ltd [2012] VSCA 316
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A Scriva | Daniel Lawyers & Associates |
| For the First Defendant | No appearance | |
| For the Second Defendant | No appearance | |
| For the Third Defendant | The Third Defendant appeared in person | |
| For the Fourth Defendant | No appearance |
HER HONOUR:
1 On 17 October 2018, his Honour Judge Cosgrave entered judgment that the plaintiff recover possession of the land described in the originating motion as 67 Arncliffe Boulevard, Greenvale (“the property”). The applications currently before the Court seek to challenge or vary the orders made by his Honour on that date.
2 The plaintiff’s application is by way of summons filed on 2 April 2019. The plaintiff’s solicitor, Mr Sinan Daniel, swore an affidavit in support of that application on 2 April 2019. The relief sought by the plaintiff is:
(i)the defendants pay the plaintiff’s legal costs arising from but not limited to the costs of the proceeding filed against the defendants on 3 October 2018;
(ii)the defendants pay the plaintiff’s costs associated in the enforcement of the order dated 17 October 2018 and following the warrant;
(iii)the defendants pay the plaintiff’s costs of removing a demountable building, removing and disposing all hard rubbish from the property, removing and disposing of the cyclone fence erected by the defendants and refilling and levelling the land to its original condition prior to the defendants’ illegal entry to the land;
(iv)the defendants pay the plaintiff’s costs of the application.
3 On 2 May 2019, counsel for the plaintiff informed the Court that the order sought in paragraph 1 of the plaintiff’s summons filed 2 April 2019 was to be confined to seeking an order that:
“The defendants pay the plaintiff’s costs of the proceeding up to and including 17 October 2018 on a standard basis to be taxed in default of agreement.”[1]
[1]See paragraph 2 of “Other Matters” in the order made 2 May 2019.
4 The first and third defendants filed summonses on 5 July 2019. The third defendant (“Robert Iloski”), swore an affidavit on 5 July 2019 on his own behalf and on behalf of his father, the first defendant (“Donco Iloski”). They seek, as their primary relief, an order setting aside the order for possession made by Judge Cosgrave on 17 October 2018. Additional orders are sought, pursuant to the leave granted to the parties by order of her Honour Judge Marks on 2 May 2019, namely:
(i) the Registrar of Land Titles be joined as a party;
(ii)Liljana Iloska and Sophie Iloski be joined as fifth and sixth defendants; and
(iii)an appropriate order against the plaintiff relating to his non-compliance with the certification obligations required by law.
Background
5 The first and second defendants were registered as proprietors of the property on 15 October 1992.[2] There was a mortgage with the Commonwealth Bank of Australia initially, but this was subsequently discharged. A mortgage with the National Australia Bank (“NAB”) was registered on 27 October 2010. The historical title information reveals the property was subsequently transferred by the NAB as mortgagee to Abdul Nasser Bchinnati, who was registered as proprietor on 19 September 2014. Nearly four years later, the plaintiff in this proceeding, Mr Mark Daniel became the registered proprietor on 6 June 2018.
[2]See exhibit “MD1” to the affidavit of Mark Daniel sworn 5 April 2019 exhibiting historical tile information relating to the property.
6 When visiting the property on 1 October 2018, the plaintiff observed a tent and vehicles on the property together with two men. He spoke to one of the men and told him he was trespassing. The man replied that it was his land. The plaintiff was unable to access the property because of a temporary cyclone fence which had been installed with padlocks. The plaintiff notified the police and also the Hume City Council. He subsequently engaged his solicitor to bring this proceeding.
7 An originating motion was filed on 3 October 2018. It sought an injunction for possession of the property against the first and second defendants, who are the parents of Robert Iloski and the former registered proprietors.
8 The originating motion was served on 8 October 2018 together with an affidavit of the plaintiff sworn 5 October 2018, according to two affidavits of service sworn by Stephen Papst, process server, dated 8 October 2018. The first affidavit of service reveals the documents were placed in the letterbox of the home address of the first and second defendants in Thomastown. This was following an exchange with a female who entered the premises and declined to identify herself when questioned by the process server. The second affidavit of service discloses the documents were delivered by leaving them inside the property after the process server called out to Donco Iloski explaining the contents of the documents and advising they had been served. An affidavit of attempted service was also sworn by Mr Papst, which revealed he had called out to a male who he saw on the property on 8 October 2018 who refused to identify himself. At this stage, Robert Iloski and his wife were not parties.
9 The plaintiff swore an affidavit on 15 October 2018 exhibiting an excerpt from the television program “A Current Affair” he viewed on 8 October 2018. The excerpt depicted four members of the Iloski family in possession of the property behind a large cyclone fence. They had installed security cameras as well as a guard dog to prevent other persons from entering the property. The family were keeping an around-the-clock watch on the site and had placed a tent, demountable building, and other structures on the property. All of this was done without the permission of the plaintiff.
10 The matter came before the Court on 9 October 2018. There was no appearance on behalf of the first and second defendants. On that occasion, leave was granted to the plaintiff to amend the originating motion to make a claim for recovery of land under Order 53 of the County Court Civil Procedure Rules 2008. The orders made included an order granting leave to the plaintiff to join Robert Iloski and his wife, Sophia Iloski, as third and fourth defendants. The matter was then adjourned to 17 October 2018.
11 Four affidavits of service were filed on 16 October 2018 and sworn by the plaintiff’s solicitor, Mr Sinan Daniel. Mr Daniel deposed to leaving the documents inside the high fence at the property on 16 October 2018. He called out to each of the defendants advising them of the contents of the documents and of the hearing listed the next day at 10.00am. Mr Daniel deposes he called out to the defendants as follows:
(i) to Donco Iloski, the first defendant, at 11.39am;
(ii) to Liljan Iloski, the second defendant, at 11.37am;
(iii) to Robert Iloski, the third defendant, at 11.45am; and
(iv) Sophia Iloski, the fourth defendant, at 11.40am.
12 It is clear from the affidavits of service that the documents were not personally served upon each of the defendants but were left at the property.
13 On 17 October 2018, Judge Cosgrave made an order granting the relief sought by the plaintiff. There was no appearance on behalf of the defendants.
14 It is convenient to set out here the relevant parts of Judge Cosgrave’s order, which are as follows: –
“OTHER MATTERS
AThe Court notes that the manner in which each of the four defendants were served with the originating motion, affidavits in support, exhibits and summons for today’s hearing was by leaving the documents inside the front fence at 67 Arncliffe Boulevard, Greenvale, 3059, on 16 October 2018, in circumstances where the plaintiff, who is the registered proprietor, and/or his agents could not enter the property because of locks and a guard dog which were put there by members of the Iloski family.
BThe Court notes that, apart from the most recent affidavit of the plaintiff exhibiting the excerpt from the television program “A Current Affair”, the plaintiff had already served the first and second defendants with the originating motion and supporting affidavit material.
CThe Court is satisfied that at least one or more of the defendants would or should have been aware of the hearing today. The case was called both inside and outside of Court and there was no appearance by any of the defendants.
THE COURT ORDERS THAT:
1.Pursuant to Rule 2.04 of the County Court Civil Procedure Rules 2008, the requirement in Rule 53.05(2) for personal service of the originating motion, affidavits in support and exhibits is dispensed with.
THE JUDGMENT OF THE COURT IS THAT:
2.The plaintiff recover possession of the land described in the originating motion as 67 Arncliffe Boulevard, Greenvale, in the State of Victoria, being the land described in Certificate of Title Volume 9872 Folio 512.”
15 The plaintiff’s solicitors served a copy of the order made on 17 October 2018 upon the defendants on 18 October 2018, according to a letter sent by the plaintiff’s solicitor dated 19 October 2018 to the defendants. The letter was addressed to the property, the parents’ home address at Thomastown, and to Robert Iloski at an email address. The letter enclosed a copy of Judge Cosgrave’s order and informed the defendants that, unless they complied with the order by 22 October 2018, the plaintiff would immediately seek a warrant from the Court seeking the defendants’ immediate removal by the police.[3] Robert Iloski responded to the plaintiff’s solicitor by way of a letter sent by email dated 22 October 2018.[4] The letter from Mr Robert Iloski listed his address as Unit 1/67 Arncliffe Boulevard, Greenvale. He acknowledged the email address listed for him was his own but wrote he had “no authority, permission, consent or instructions to speak for anyone other.” He challenged the plaintiff’s claim on the basis that he had not sold what he described at Lot 1 of the property and Lots 2 and 3 of the property had not been sold by the owners of those lots.
[3]See exhibit “MD3” to the affidavit of Mark Daniel sworn 31 January 2019.
[4]Ibid.
16 The plaintiff subsequently issued a warrant of execution. On 12 December 2018, the Sheriff attended at the property. Both Robert Iloski and his father resisted the enforcement of the recovery process undertaken by the Sheriff. Mr Robert Iloski was arrested and taken into custody at the Broadmeadows Police Station where he remained for three days until he was discharged. The day after the Sherriff attended, the police visited the property and removed what were suspected to be explosive devices.[5]
[5]See paragraph 17 of the plaintiff’s affidavit sworn 31 January 2019.
17 The defendants filed an application on 11 January 2019, seeking injunctive relief restraining the plaintiff from disposing of the defendants’ personal property taken from the property, including the portable building. The matter came on before his Honour Judge Smith on 11 January 2019. Mr Stavris, of counsel, appeared for the defendants. By consent, it was ordered the plaintiff would not dispose of or move the portable building until completion of the proceeding, or until further order of the Court. Orders were also made regarding procedural timetabling and the matter was adjourned to 25 February 2019.
18 Robert Iloski swore an affidavit on 18 January 2019 in support of what he described as the recovery application. He deposed to there being a dispute over the property and having a proceeding on foot at VCAT against the NAB. He disputed the ability of the NAB to transfer the property on 19 September 2014 to Mr Abdul Nasser Bchinnati. He refers to a caveat lodged by the plaintiff dated 19 March 2018 over the property pursuant to a contract. He also complained that the plaintiff had demolished what was said to be a three unit dwelling on the property. Mr Iloski deposed that at no stage had he or his family given up possession of the property and continued to remain in possession.
19 In paragraph 11 of his affidavit, he said the following:
“The Respondent relies on an Order made by Judge Cosgrave on 17 October 2018 in my absence. I was never served with Court documents and if I had been served with Court documents I would have attended Court. I say further that no other defendant as listed on the aforementioned Order was served with Court documents or aware of the Court date ...”
20 The matter was adjourned by consent to 20 March 2019 and came on before Judge Cosgrave. Mr Stavris again appeared on behalf of the defendants. Mr Siro of Counsel, appeared for the plaintiff. The matter was adjourned to 2 May 2019. On that occasion, her Honour Judge Marks made various orders. In Other Matters, it was noted that Mr Robert Iloski advised he wants to bring an application to set aside the judgment made on 17 October 2018. He appeared in person on that occasion. It was also noted in Other Matters that Mr Robert Iloski advised he had issued proceedings in VCAT against the NAB in relation to the property, in which he proposes to seek to join Mr Mark Daniel, the plaintiff, as a party, in order to recover possession of the property. Various procedural orders were made, including adjourning the matter to 9 July 2019. This included order 9 which provided that any application by the third defendant, or any other defendant, to set aside the judgment made on 17 October 2018 be made by 28 June 2019 and that application be returnable on 9 July 2019.
21 On 14 June 2019, the matter was listed for a Judicial Resolution Conference. Orders were made by consent whereby the defendants undertook, by their representative, the third defendant, not to re-enter the property unless and until the judgment made on 17 October 2018 is set aside. It was also ordered that the plaintiff would permit an independent contractor to collect the portable building and its contents from its current location at an agreed date and time upon notice being given.
(1)The application to set aside summary judgment
22 The defendants rely upon the affidavit sworn by Mr Robert Iloski, dated 5 July 2019 in support of the application to set aside the judgment.
23 Robert Iloski deposes that he is authorised to makes his affidavit on behalf of his father, the first defendant, in support of the father’s summons also dated 5 July 2019. He says in paragraph 2 of his affidavit that neither he nor any member of his family were made aware of the proceeding, hence the reason why the proceeding was not defended. In paragraph 31 of his affidavit, Robert Iloski deposes as follows: –
“Neither the first defendant nor I – the third named defendant, were made aware of this proceeding. By electronic communication to this court on 12 June 2019 the plaintiff’s representative confirmed this and said, amongst other relevant things, that despite many attempts of service the defendants did not participate in the proceedings.”
24 Robert Iloski seeks an order that the order dated 17 October be set aside, together with any warrant of possession issued as a result.
25 Mr Iloski’s affidavit is largely argumentative and expresses conclusions, often of a legal nature. For reasons which are not readily comprehensible, Robert Iloski takes issue with the plaintiff’s right to hold the property as registered proprietor. He appears to suggest that there has been some unlawful conduct by the NAB in respect to the property. This is an aspect which he dealt with more fully in his earlier affidavit of 18 January 2019. It is unclear, even if that be the case, how that could have any adverse effect upon the plaintiff’s indefeasible title as a subsequent registered proprietor.
26 Mr Iloski makes mention of the plaintiff referring in his affidavit of 2 April 2019 to a sign placed by the defendants on the fence of the property.[6] The fact that the plaintiff saw the sign before settlement of his purchase is somehow said to constitute notice of the defendants’ alleged claims to ownership of the property. The sign on the fence displayed a reproduction of a certificate of title marked fake and then underneath makes allegations of fraud against the NAB and others, including a firm of solicitors. Whilst the plaintiff did see the sign on the fence before settlement, the sign does not constitute notice in any legal sense of any claims of the defendants to the property which could defeat the plaintiff’s title as registered proprietor. Mr Iloski’s affidavit does not disclose any evidentiary basis to support any legal or equitable claims by the defendants over the property which could impeach the plaintiff’s title.
[6]Exhibit “MD1” to the plaintiff’s affidavit of 2 April 2019.
27 Robert Iloski takes issue that the current names of the second and fourth defendants appeared to have been misspelt. His mother’s name is Liljana Iloska and his wife’s name is Sophie Iloski. This is a matter which could be cured by amending the names of these defendants in the heading of the proceeding rather than joining them as fifth and sixth defendants.
28 In paragraphs 43 and 44 of Robert Iloski’s affidavit, he acknowledges that if the decision is set aside, it would be in the best interests of all the parties that the Court give directions to enable all issues in dispute to be decided. The first of various interlocutory proceedings proposed by him is the joinder of the NAB and other persons who are referred to in paragraph 44 of his affidavit.
29 Robert Iloski refers to the possibility of self-help as being the only option in paragraph 46 of his affidavit, but says “My own personal opinion is that “self-help” is not the correct way to deal with this dispute.”[7] I wholeheartedly agree that self-help is an inappropriate way for the parties to resolve whatever differences may exist.
[7]See paragraph 46 of the affidavit of Robert Iloski sworn 5 July 2019.
Summary judgment for possession of land
30 Order 53 provides a means of summary relief for proprietors to remove persons who are occupying a property without the licence or consent of the owner, or the owner’s predecessor. Order 53 does not apply where the land is occupied by a mortgagor or successor in title and the claim is made by the mortgagee or successor in title: Rule 53.01(2).
31 Rule 53.05 deals with service. It provides:
(1) The originating motion and a copy of the affidavit and of any exhibit referred to there shall be served –
(a) on each defendant, if any; and
(b) on any person occupying the land who is not a defendant.
(2) Service on a defendant shall be personal.
(3) Service on a person occupying land who is not a defendant shall be effected —
(a) by:
(i) affixing a copy of the originating motion and a copy of the affidavit to some conspicuous part of the land; and
(ii) if practicable, leaving in the letterbox or other receptacle for mail on the land a copy of the originating motion and a copy of the affidavit enclosed in a sealed envelope addressed to “The Occupiers”; or
(b) such other manner as the Court directs.
32 A judgment for possession of land given under Order 53 is enforced by warrant of possession. The warrant directs a Sheriff to enter the land and cause the plaintiff to take possession of it. Such a warrant authorises the Sheriff to turn out anyone on the land whether a defendant or not.
33 Ordinarily, Order 53 is generally reserved for clear-cut cases in which the defendant occupier has no arguable defence and there is no reasonable doubt as to the plaintiff’s claim to possession. However, the judge has a discretion and is not required to dismiss the proceedings simply because an arguable defence is raised. The judge can determine the matter as to whether a defence is made out or direct the question be tried at a later time. If the determination can be done readily and fairly, then the Court will determine a disputed factual or legal issue.[8]
[8]Pappas v Bowmark Pty Ltd [1998] VSCA 120; Tolhurst Druce and Emmerson (a firm) v Maryvell Investments Pty Ltd (in liq) [2007] VSC 271.
Setting aside summary judgments – applicable principles
34 As a general proposition a judgment entered is final and can only be disturbed on appeal. There are, however, exceptions to this rule, for example, judgments entered in default of an appearance or defence can be set aside. Another instance is where a summary judgment was not made on notice to the affected party. This is covered by r22.15, which provides as follows:
“The Court may set aside or vary any judgment given against a party who does not attend on the hearing of an application under section 61 of the Civil Procedure Act 2010.”
35 Whilst the rule itself does not contain any discretionary factors to take into account, it is accepted that the usual principles which apply to the setting aside of regular or irregular judgments are to be invoked.[9]
[9]Heller Financial Services Pty Ltd v Solczaniuk (1989) 99 FLR 304 at 310; Euroasia (Pacific) Pty Ltd v Michael [2008] VSC 153 at [100]-[103].
36 The issue of an order being made in the absence of a party affected and without notice, resulting in an application to set aside the order, was considered in Duck Boo International Co Ltd v Mizzan Pty Ltd,[10] wherein the court said as follows:
“…Where an order is made ex parte without notice to a party affected, that party has the right, ex debito justitiae, to approach the court and have the application re-heard. As Gillard, AJA noted in Savcor, where an application is made to set aside an order made without notice, whether the application is pursuant to the rule or the inherent power of the court, the court re-hears the original application.
Ordinarily, therefore, the court re-hearing the application will have the benefit of submissions and any material which the opposing party may wish to place before the court. As Gillard, AJA said:
‘…the party affected by the order [has the right] to appear before the court and put submissions as to why the order should not be made on the materials which were before the judge who made the first order. It is a rehearing and the court may reach a different decision after hearing submissions.’”
(Footnotes omitted.)
[10][2006] VSCA 241 at [13]-[14].
37 Similarly, in Hoskins v Van Den-Braak,[11] the New South Wales Court of Appeal noted that, where the appellant, or anyone acting on his behalf, was not served with a claim on which judgment was given against him, prima facie the proceedings and the judgment are nullity. The appellant was entitled ex debito justitiae to have the judgment set aside unconditionally. This decision was applied in the decision of Togher & Anor v Alexander & Ors (No 4),[12] where Abadee J said at paragraph [88]:
“…
There was no proven service of the originating process … after the order for joinder was made, as required by the UCPR. That, I think, is dispositive of the application, since it amounts either to an irregularity (and therefore suffices to establish ‘sufficient cause’ for the purpose of r 36.15), or at least satisfied one threshold basis for the Court’s jurisdiction to set aside orders, being that the judgment or orders is made in the absence of a party (for the purpose of r 36.16(2)(b) of the UCPR). A failure to serve a defendant with originating process is an example of an irregularity which entitles the defendant to have it set aside unconditionally: Hoskins v Van Den-Braak (1998) 43 NSWLR 290. Judgments entered contrary to a material requirement of court rules are irregular: Arnold v Forsythe [2012] NSWCA 18. The requirement to serve originating process is one such rule.”
[11](1988) 43 NSWLR 290.
[12][2019] NSWDC 337.
38 Where an application to set aside an order is made without notice is successful, the court rehears the original application.[13]
[13]Duck Boo International Co Ltd v Mizzan Pty Ltd [2006] VSCA 241 at [13].
39 The requirement for personal service under r53.05(2) was dispensed with by Judge Cosgrave in order 1 of his order. The Court was satisfied that at least one or more of the defendants would or should have been aware of the hearing. The documents were left at the property where the defendants were undisputedly in occupation, as was confirmed by the affidavits filed in support of the application, including the exhibited excerpt from “A Current Affair”.
40 This case is in stark contrast to cases where it has been shown subsequently the address for service was wrong or the originating process was defective in form, or where a defendant no longer resided at the address where service was effected. In those types of cases, the Courts have found that the means of service was irregular leading to the inevitable result that the order made should be set aside.
41 In my view, the judgment entered on 17 October 2017 was entered regularly in circumstances where:
(i) the Court dispensed with the requirement for personal service upon the defendants;
(ii) the documents were left inside the property by the plaintiff’s solicitor on the morning of the day before the hearing;
(iii) the affidavits filed in support of the application revealed that at least one or more of the defendants were residing on the property at the time of service and were maintaining a constant vigil to prevent anyone from entering onto to the property.
Should the judgment for possession be aside?
42 In the exercise of the Court’s discretion to set aside a judgment which has been regularly entered, various well known guidelines have been developed, namely:
(i) was the application to set aside the judgment made promptly;
(ii) the adequacy of explanation of the failure to attend;
(iii) whether the applicant has an arguable case; and
(iv) whether any prejudice to the plaintiff can be met with an order for costs.[14]
[14]Kostokanellis v Allen [1974] VR 596; Xiao Hui Ying v Perpetual Trustees of Victoria Ltd [2012] VSCA 316; Lubura v Nezirevic [2013] VSCA 215.
(i) Was the application to set aside the judgment made promptly?
43 The summonses to set aside the judgment were filed on 5 July 2019. This is some considerable time after the order for possession was made on 17 October 2018. As can be seen from the background summary above, the plaintiff’s solicitor sent a copy of the orders made to the defendants shortly after the hearing. It is clear that a copy of the plaintiff’s letter dated 19 October 2018, at the very least, was received by Robert Iloski, given his letter in response dated 22 October 2018.
44 Since the order was made and the execution of the warrant in December 2018, the defendants made an application for injunctive relief on 11 January 2019 regarding the demountable building. At that time, the defendants were legally represented. The matter was then adjourned on a number of occasions. The defendants’ intention to issue an application to set aside the judgment was noted in the orders made in May 2019.
45 It is perhaps surprising that the defendants did not seek to set aside the order when they engaged solicitors to act on their behalf rather than just seeking injunctive relief regarding the demountable building. It has not been explained why the application was not made earlier but it is clear from Mr Iloski’s affidavit sworn on 18 January 2019, that he was asserting that neither he nor the other defendants had been served. Accordingly, that matter has been raised as an issue although no application was formally made. It appears the delay between May and July was largely due to administrative matters rather than any neglect on the part of the defendants in pursuing their claim.
46 Whilst I consider there has been some delay in making the application, I am not persuaded that this factor alone would cause me to exercise my discretion to refuse the application, particularly, in circumstances when the defendants no longer have any legal representation.
(ii) The adequacy of the explanation for the failure to attend
47 In Mr Iloski’s affidavit of 5 July 2019, he states that neither he nor members of his family were aware of the application and it had not been served. It was clear from the affidavits of service filed that the documents were placed on the site by the plaintiff’s solicitor, who attended at the premises for approximately half an hour. In circumstances where there was incontrovertible evidence that the defendants were in occupation of the site around the clock, it seems incredible that the defendants would not have become aware of the attendance of the plaintiff’s solicitor at the property. He was there for around a half an hour or so and placed the court documents inside the cyclone fence on the property. The likelihood of the defendants having known of the plaintiff’s solicitor’s attendance is increased given the presence of the guard dog and the security cameras in place. Additionally, it is highly unlikely the defendants would not have observed the documents which were placed inside the property by the plaintiff’s solicitor. Mr Iloski deposed in paragraph 61 of his affidavit sworn 5 July 2019, that he had commenced permanent habitation at the property after what he described as the plaintiff’s vandalism. Likewise in paragraph 63 of that affidavit, he deposed that he and his family had been in possession and occupation of the property from 28 August 1992 until 12 December 2018.
48 Mr Iloski says that he makes the affidavit on his behalf and on behalf of his father. The statements – that other members of his family did not receive the documents – are not said to be on the basis of information and belief. While some leeway must be given to Mr Iloski as a self-represented litigant, the evidence of the non-receipt of the documents from the other defendants is lacking, in my view. It would have been possible for each of the defendants to go on affidavit stating that they had not received the documents and provide some explanation as to why that was the case in circumstances where the documents had been left at the property on 16 October 2018.
49 I am not persuaded that the bare denial by Robert Iloski that neither he nor his family were made aware of the proceeding is sufficient in the absence of any further evidence. It has not, for example, been put that the defendants had left the property and were not in attendance on 16 October 2018. If there was some cogent reason shown for their supposed failure to receive the documents then that might have altered the position. I do not place much weight on the mere assertion by Mr Iloski that neither he nor other members of his family did not receive the documents, without any further explanation or indeed any evidence from the other defendants. Consequently, I consider the adequacy of the explanation for the failure to attend the hearing on 17 October 2018 is unsatisfactory.
(iii) Whether the defendant has demonstrated an arguable defence
50 In his affidavit of 5 July 2019, Mr Robert Iloski disputes the plaintiff’s claim to ownership on various bases, including the fact that he and his other family members remain owners of the property. As can be seen from the facts in the background summary above, his parents were the registered proprietors until 2014, when the NAB transferred the property to Mr Bchinnati, who was registered as the proprietor on 19 September 2014. The first and second defendants were the registered proprietors up until that time. Neither the third nor the fourth defendant have ever been registered on title.
51 The allegations in respect of the dealings by the NAB are inchoate and unconvincing. There appears to be a suggestion that the NAB has engaged in some type of fraud in respect of the circumstances in which the property was sold in 2014. It is not clear as to how that alleged fraud has occurred or why the NAB was not able to transfer the property in the circumstances.
52 Under s42(1) of the Transfer of Land Act, the plaintiff’s title as registered proprietor is paramount except in case of fraud and other specified instances. Fraud means actual dishonesty or moral turpitude. The fraud is limited to fraud by or on behalf of the person obtaining the registration. Fraud by persons from whom the proprietor claims does not affect him unless knowledge of it is brought home to him or his agents.[15] A lack of diligence is not enough to show that the registered proprietor could have discovered the fraud had he or she been more diligent in making inquiries. If a proprietor deliberately fails to make diligent inquiries for fear of learning the truth, known as wilful blindness, then he or she may have acted fraudulently. The person attempting to impeach the registered proprietor’s interest must prove that the suspicions of the registered proprietor or their agents were actually aroused. It is not enough to show a reasonable person in the registered proprietor’s position would have been suspicious; the registered proprietor must actually be suspicious.[16]
[15]Pyramid Building Society (in liq) v Scorpion Hotels Pty Ltd [1998] 1 VR 188 at 191-193.
[16]ANZ v Loftus [2016] VSC 58 at [33].
53 The plaintiff deposed that he engaged solicitors to act for him in respect to the transaction, pursuant to which he became the registered proprietor. There is no evidence whatsoever from the defendants to demonstrate that the plaintiff has engaged in some form of fraud within the meaning of s42(1). Nor is there any evidence to establish that the defendants could rely upon the in personam exception against the plaintiff by reason of any conduct of the plaintiff which could give rise a personal equity in favour of the defendants.[17]
[17]See Vickery J in Mathieson Nominees Pty Ltd v Aero Developments Pty Ltd [2016] VSC 131 at [128] - [130].
54 Apart from the notice on the fence, which is exhibit “MD3” to the plaintiff’s affidavit of 5 October 2019, there is no other evidence relied upon by Mr Iloski to attempt to substantiate their assertion that the plaintiff is or should have been on notice of any claims the defendants had in respect to the property. As s43 of the Transfer of Land Act provides, no person dealing with the registered proprietor shall be affected by notice, actual or constructive, of any trust or unregistered interest and knowledge of any such trust or unregistered interest is in existence shall not, of itself, be imputed as fraud.[18]
[18]Perpetual Trustees Victoria Ltd v Gheorghui & Anor [2007] VSC 412, per Harper J at [8]-[9].
55 Neither the third defendant nor the fourth defendant were ever registered on the title. There is no evidence provided in Mr Iloski’s affidavit to suggest that they ever held any equitable interest in the property. Even if they held any equitable interest, such an interest would obviously be defeated under s43 of the Transfer of Land Act. The main line of the defence put is that the Iloskis dispute the circumstances in which the NAB came to sell the property. If there are any circumstances which may give rise to some finding against the NAB, then this is a matter that the defendants can pursue elsewhere. It does appear that some proceedings were issued against the NAB at VCAT, although the fate of these proceedings is unclear.
56 The defendants contend that the property was to be divided into three lots, pursuant to a preliminary plan of subdivision which is referred to in paragraph 52 of Mr Iloski’s affidavit sworn 5 July 2019. The plan of subdivision has not been exhibited and it is noted that he refers to it as being preliminary. Although it appears to have been the defendants’ intention to subdivide the property into three lots and construct a house for each of the three family groups, including the parents, Mr Iloski and his wife, and his brother and his wife (Sophie), this did not come about in any formal sense. In paragraphs 55 to 58 of his affidavit, Mr Iloski claims there were three homes in the process of construction on the property, which were then demolished the plaintiff in September 2018 without having a permit to do so. Even assuming that this is correct, the destruction or removal of any structures on the land does not affect the plaintiff’s ability to do with the property as he sees fit, being the registered proprietor. It was this alleged vandalism which caused the Iloski family to take up permanent occupation of the property. For his part, the plaintiff deposes in paragraph 6 of his affidavit sworn 31 January 2019 that he did not need a permit from the Council to clean up the property.
57 Reference is made in Mr Iloski’s affidavit to r53.01(2) as providing a basis for arguing the plaintiff’s application was misconceived. Mr Iloski relies on the fact that his parents were mortgagors of the property. This is true up until 2014 when the NAB sold the property as mortgagee. This rule precludes claims for possession being made under Order 53 where the claims for possession is being made by a mortgagee against a mortgagor. This is not the case here. The claim for possession was made by the plaintiff in his capacity as owner against the defendants, who were trespassers. Consequently, the plaintiff was entitled to seek possession under Order 53 and r53.01(2) does not apply.
58 I regard Mr Iloski’s affidavit as being little more than a statement of his personal belief as to the righteousness of his family’s position rather than providing any proof of their claim to ownership. The defendants have not advanced any cogent or credible evidence to support their defence. The burden is on them to do so if the judgment is to be set aside.[19] I am not persuaded by Mr Iloski’s affidavit that the plaintiff’s title was acquired otherwise than in good faith.
[19]TSC Nominees Pty Ltd v Canham Commercial Interiors Pty Ltd [2017] VSC 86 at [129].
59 In my view, Mr Iloski’s affidavit does not disclose an arguable defence to the plaintiff’s right to possession of the property as registered proprietor. Having failed in the application to set aside judgment, it is unnecessary then to determine the remaining relief sought in the defendants’ summonses, being the various procedural orders sought had the matter continued.
(iv)Whether the prejudice to the plaintiff could be met with an order for costs
60 Another factor which the courts will take into account in considering this type of application is whether any prejudice to the plaintiff could be satisfied by an order for costs and often an order for security in respect of those costs. In this case, the warrant has been executed and the plaintiff has recovered possession.
61 In paragraphs 4 and 14-16 of his affidavit sworn 5 October 2018, the plaintiff deposes to the financial loss, and stress and fear which he and his family have suffered in respect to these proceedings. Additionally, he deposes to the steps that he has taken in respect of obtaining planning approval and the fact that this proceeding had delayed and prejudiced the planning process. In the plaintiff’s affidavit of 31 January 2019, he deposes in paragraph 9 that the proceeding has caused and is still causing him great financial loss and distress.
62 In my view, these matters are sufficient grounds for finding that the prejudice to the plaintiff could not be compensated merely with an order for costs and/or security for his costs. Matters such as the stress of the litigation are to be taken into account when considering applications of this sort.[20] It is also significant in my view that having not brought the application to set aside the judgment earlier, the warrant for possession has been executed. Consequently, the status quo cannot be readily returned to the position it was when the application was heard on 17 October 2018.
[20]Per Derham AsJ in TSC Nominees Pty Ltd v Canham Commercial Interiors Pty Ltd [2017] VSC 86 at [136].
63 Taking all these various factors into account, I am not persuaded that the summary judgment entered for possession on 17 October 2018 should be set aside. Justice is best served by refusing the defendants’ applications.
(2) Plaintiff’s application for costs and damages
64 Counsel for the plaintiff did not apply for an order for costs at the hearing on 17 October 2018. An application is now made under the slip rule for an order for those costs pursuant to r36.07 of the County Court Civil Procedure Rules 2018. An order under this rule can be made where an omission occurs as a result of the inadvertence of the party’s legal representative.[21]
[21]R v Cripps; Ex parte Muldoon [1984] QB 686 at 695; [1984] 2 All ER 705 at 710; Shaddock & Associates Pty Ltd v Council of the City of Parramatta (No.2) (1982) 151 CLR 590 at 593-6.
65 I am of the view that had the plaintiff sought an order for costs of the hearing on 17 October 2018, such an order would most likely been made as the plaintiff succeeded in his application for summary judgment and costs ordinarily follow the event.
66 In the alternative to an application under the slip rule, the plaintiff’s written outline of submissions sought an order for costs under r63A.03(1), including not only costs of the summary judgment application but costs incurred since judgment. The plaintiff also sought an amount for damages associated with removing various items from the property. These additional legal costs and damages claim are independent of the claim made in this proceeding which is limited to a summary application for recovery of possession of land. I am, however, satisfied that an order for costs should be made under the slip rule, being the first order sought by the plaintiff.
67 I will make the following orders:
(i)the summonses filed by the first and third defendants dated 5 July 2019 are dismissed;
(ii)the defendants pay the plaintiff’s costs of the proceeding, up to and including the costs of the hearing on 17 October 2018, to be taxed on the standard basis in default of agreement; and
(iii)the plaintiff’s summons dated 2 April 2019 is otherwise dismissed.
68 Subject to any submissions to be made to the contrary, I will also order the first and third defendants pay the plaintiff’s costs of and incidental to the first and third defendants’ summonses dated 5 July 2019, to be taxed on the standard basis in default of agreement. I will not make any order in respect of the plaintiff’s summons filed 2 April 2019 made under the slip rule as the omission to seek an order for costs was not caused by any conduct on the part of the defendants.
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Certificate
I certify that these 21 pages are a true copy of the Reasons for Judgment of Her Honour Judge A Ryan delivered on 3 September 2019.
Dated: 3 September 2019
Associate to Her Honour Judge A Ryan
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