Metroll and Anor v Francois Sahyoun and Anor (No.2)

[2013] FCCA 2088

FEDERAL CIRCUIT COURT OF AUSTRALIA

METROLL & ANOR v FRANCOIS SAHYOUN & ANOR (NO.2) [2013] FCCA 2088

Catchwords:
PRACTICE AND PROCEDURE – Application pursuant to s.58 of the Bankruptcy Act 1966 (Cth) for leave to commence and take steps in the Supreme Court of New South Wales – where applicant creditor has caveated interest in property owned by bankrupt’s wife and bankrupt’s trustee – where lapsing notice served and applicant seeks to extend caveat – whether to grant leave.

Legislation:

Bankruptcy Act 1966 (Cth), s.58(3)

Stoker (Trustee) in the matter of Starr (Bankrupt) v Starr [2011] FCA 746
7Steel Building Solutions Pty Limited v Wright [2011] FCA 328
Allanson v Midland Credit Ltd (1977) 16 ALR 43

Applicant: METROLL PTY LTD ACN 001 446 439 TRADING AS BUILDERS WAREHOUSE SYDNEY AND ANOTHER

Respondent: FRANCOIS SAHYOUN AND ANOTHER

File Number: SYG 2863 of 2013

Judgment of: Judge Raphael

Hearing date: 20 November 2013

Date of Last Submission: 20 November 2013

Delivered at: Sydney

Delivered on: 20 November 2013

REPRESENTATION

Counsel for the Applicant: Mr H Woods

Solicitors for the First Applicant: Kanji & Co

Solicitors for the Second Applicant: ERA Legal

ORDERS

1. The Applicant’s application be returnable instanter.

2. Service of this application be dispensed with.

3. To the extent leave is required pursuant to s 58(3) of the Bankruptcy Act 1966 (Cth), leave be granted, nunc pro tunc to the First Applicant to commence and take steps that were taken in the Supreme Court of New South Wales Equity Division proceedings No. 2013/347748 (“Supreme Court Proceedings”) for the operation of caveat number AH305626 lodged in relation to the land situated at 56 Portland St, Croydon Park and contained in certificate of title folio identifier 280/785 (the Land) to be extended.

4. To the extent leave is required pursuant to s 58(3) of the Bankruptcy Act 1966 (Cth), leave be granted to the Second Applicant to take fresh steps and continue with the Supreme Court Proceedings against the Respondents to the extent necessary to enable the Supreme Court to determine the relief sought by the Summons in the Supreme Court Proceedings together with an additional orders to be sought in the Supreme Court proceedings that:

   (i)Should the Court not extend the operation of Caveat number AH305626, that the Applicant (Plaintiff in the Supreme Court proceedings) have leave pursuant to s 740(2) of the Real Property Act 1900 to file a further Caveat in the terms of Caveat number AH305626.

   (ii)The lapsing Notice served on the Applicant on 31 October 2013 in respect of Caveat number AH305626 be set aside.

5. The orders made at 3 and 4 above be conditional on the Applicant informing the Second Respondent of all orders and directions made in the Supreme Court Proceedings.

6. Service of this Application and the affidavit of Michael Gallagher sworn 19 November 2013 and the orders of this Court be effected by:

   (i)In respect of the first respondent, by leaving copies of the orders of the Court in an envelope addressed to the first respondent at his last known address at 56 Portland St, Croydon Park and 201C Belmore Rd, Riverwood;

   (ii)In respect of the second respondent, by sending copies of the orders of the Court by email to his solicitors Gretsas & Associates at email address [email protected].

7. The parties have liberty to apply on three days’ notice.

8. These orders be entered forthwith.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2863 of 2013

METROLL PTY LTD ACN 001 446 439 TRADING AS BUILDERS WAREHOUSE SYDNEY AND ANOTHER

Applicant

And

FRANCOIS SAHYOUN AND ANOTHER

Respondent

REASONS FOR JUDGMENT

1. In this matter an application is made accompanied by an associated interim application pursuant to s.58(3) of the Bankruptcy Act 1966, (Cth)[1] for the Court to grant leave nunc pro tunc to the first applicant to commence and take steps that have already been taken in the Supreme Court of New South Wales Proceedings No.201334563, for the operation of a caveat numbered AH849044 lodged in relation to land situated at 56 Portland Street, Croydon Park, in the State of New South Wales folio identifier 280/785 to be extended. The Court is also asked to grant, to the extent that it is required, leave to the first applicant to take any fresh steps and continue with the Supreme Court proceedings against the respondent to the extent necessary to enable the Supreme Court to determine the relief specified in paragraphs 6 to 14 of the Summons in the Supreme Court proceedings. The application and interim application, also asks the Court to give leave under s.58(3) of the Act in respect to certain Local Court proceedings that were commenced. But that application has now been withdrawn.

   [1] “Act”

2. Shortly put, the facts surrounding this matter is that Mr Sahyoun, a bankrupt, had previously run a business known as JJJC Roofing Pty Ltd.  JJJC Roofing Pty Ltd purchased materials and goods from the applicants and in the way of these things he was required to sign not only a credit account application but also a guarantee and indemnity which purported, in paragraph 7, to charge his interest in any land that he might hold.  When the company failed to pay its obligations to the applicant it determined to protect its interest and lodged a caveat in respect of the land at 56 Portland Street Croydon Park, New South Wales 2133, which it would appear is the matrimonial home of the bankrupt.  It was, at the time, owned by him as a joint tenant with his wife.  Since the bankruptcy that joint tenancy has been severed and the property is now owned, in equity, by the bankrupt’s trustee and the wife as tenants in common. 

3. The present regime under which the Registrar-General for New South Wales acts in respect of caveats is that a caveat remains upon the title until a lapsing notice is served upon the caveator. The caveator is then obliged, within 21 days, to take steps to apply to the Supreme Court of New South Wales for the caveat to be retained.  If those steps are not taken the caveat is removed.  On or about 31 October 2013 the wife of the bankrupt served a lapsing notice upon the applicant and it has commenced proceedings in the Supreme Court in order to have the caveat extended.  This application requests that the Court give leave for those proceedings to have commenced and to be continued.

4. The situation in which the Court finds itself is not a strange one.   A similar situation arose in Stoker (Trustee) in the matter of Starr (Bankrupt) v Starr [2011] FCA 746 per Jacobson J. In that case his Honour considered all the authorities. In particular he discussed the decision of Flick J in 7Steel Building Solutions Pty Limited v Wright [2011] FCA 328 and the leading authority of Allanson v Midland Credit Ltd (1977) 16 ALR 43 at [48] as well as others. His Honour came to the view that it was appropriate for the Court to give leave in a case such as this, particularly in situation where the trustee has indicated he will take no part in the matter. Although it would appear to this Court the trustee has rather more of an interest than he seems to realise.

5. In those circumstances, having read the helpful affidavit of Lydia Isobel O’Keeffe affirmed on 18 November 2011 and 19 November 2011, and having heard Mr Woods for the first applicant and Mr Mitchell for the second applicant, the Court proposes to grant leave and make the orders contained in the Short Minutes of Order initialled by me and placed with the papers.

I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Judge Raphael

Date:  5 December 2013