Ozkan Ozden and Nuray Ozden v Commonwealth Bank of Australia (ABN 48 123 123 124)
[2014] VSCA 234
•12 September 2014
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2013 0064
| OZKAN OZDEN and NURAY OZDEN | Applicants |
| v | |
| COMMONWEALTH BANK OF AUSTRALIA (ABN 48 123 123 124) | Respondent |
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| JUDGES: | SANTAMARIA JA and GARDE AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 12 September 2014 |
| DATE OF JUDGMENT: | 12 September 2014 |
| MEDIUM NEUTRAL CITATION: | [2014] VSCA 234 |
| JUDGMENT APPEALED FROM: | Ozden and Ozden v Commonwealth Bank of Australia [2014] VSCA 127 |
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STAY – Pending application for special leave to appeal to High Court of Australia – Applicable principles – Insufficient prospect of grant of special leave – Failure to establish special circumstances – Failure to show balance of convenience – Application dismissed with costs.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr M Gronow | Christopher Bunnett |
| For the Respondent | Mr S Hay | Gadens Lawyers |
SANTAMARIA JA:
I will ask Garde AJA to deliver his reasons.
GARDE AJA:
By a summons dated 2 September 2014, the applicants seek an order restraining the Sheriff from executing any warrant of possession over their property at 74 Osborne Street, Williamstown or in the alternative, a stay on the execution of the orders of 24 June 2014 until the determination of an application for special leave to appeal to the High Court of Australia and if that application is successful, the hearing and determination of the subsequent appeal. This Court is assisted by affidavits sworn by or on behalf of the parties to which it is unnecessary to refer at any length.
There is no doubt that the Court has the power to order a stay pursuant to rr 64.25 and 66.16 of the Supreme Court (General Civil Procedure) Rules 2005 and the Court’s inherent jurisdiction.
The principles that relate to an application for a stay pending the hearing and determination of an application for special leave to the High Court were recently re‑stated by this Court in Phillips v Southage Pty Ltd[1] and in Sgargetta v National Australia Bank Ltd.[2] The Court has a wide discretion that is not circumscribed by rigid rules.
[1][2014] VSCA 17 (Whelan JA, with whom Santamaria JA agreed).
[2][2014] VSCA 189 (Osborn and Beach JJA).
The principles are, first, that the applicants must have an arguable ground of appeal in their application for special leave; secondly, that there are special circumstances which support the grant of a stay and; thirdly, that the balance of convenience favours the grant of a stay.
The principal issue raised by Mr Gronow on behalf of the applicants relates to
what is said to be the wrongful retention by the respondent (‘the bank’) of the marina berth certificate of title. Mr Gronow said that this impeached the bank’s claim for payment of money and that the trial judge[3] and the Court of Appeal[4] had erred in their reasons for decision.
[3]Commonwealth Bank of Australia v Ozden [2013] VCC 94 (Judge Ginnane).
[4]Ozden and Ozden v Commonwealth Bank of Australia [2014] VSCA 127 (Tate and Beach JJA and Sifris AJA).
The trial judge assessed damages in the sum of $5,000 for the wrongful retention of the certificate of title relating to the marina berth. The berth was included as security in an application for a third loan but finance was not provided by the bank against the marine berth.[5]
[5][2013] VCC 94 [71].
The trial judge held that the applicants had lost the chance to obtain funds by selling the marina berth so reducing the amount of finance owing on their loan to the bank or the chance of refinancing that loan.[6] The marina berth was found to have a value of about $200,000 although the Court of Appeal evidence as to a likely sale was incomplete and unconvincing.[7]
[6]Ibid [207].
[7][2014] VSCA 127 [44].
The Court of Appeal held that the loss of a chance assessment by the trial judge was correct and that there was no executed or concluded or draft contract for the sale of the berth on foot.[8] The evidence in support of the loss of a chance claim was described as thin and not supporting a reasonable likelihood or prospect of sale. The evidence did not engender any confidence that the sale would in fact have taken place.[9]
[8]Ibid [37].
[9]Ibid [39].
The Court of Appeal was of the view that the assessment of damages of $5,000 based on the likelihood of sale was an assessment that was entirely open for the trial
judge on the evidence.[10] The Court described the evidence that the applicants could have raised funds on the security of the marine berth as entirely lacking.[11]
[10]Ibid [45].
[11]Ibid [48].
The applicants’ claim for damages for an amount in excess of $950,000 indirectly arising from the bank’s failure to return the title to the berth was rejected by the trial judge and also by the Court of Appeal.[12]
[12]Ibid [29], [30].
The Court of Appeal reviewed authorities such as British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd[13] and the decision of Tadgell J in Eagle Star Nominees Ltd v Merril[14] at some length. I take the law as stated in the authorities to be settled law. I am not of the view that there is any serious doubt as to the correctness of the law applied by the Court of Appeal.
[13][1980] QB 137.
[14][1982] VR 557.
In substance, the Court considered the claim for unliquidated damages to be unrelated to the bank’s claim on the debt owed to it. The claim for wrongful retention of the marine berth certificate of title did not ultimately impeach the bank’s claim. The Court said that any claim for damages was precisely that, namely a claim or cross claim properly made. Even if the final result diminished the bank’s claim by way of set off at common law, it did not affect the validity of the demand by the bank or the bank’s right to make demand.[15]
[15][2014] VSCA 127 [85], [86].
I have reviewed each of the proposed grounds of appeal in the draft notice of appeal to the High Court of Australia.
First, in my view, it is unlikely, indeed very unlikely, that any of the grounds set out in the draft notice of appeal will attract the grant of special leave by the High Court. Given the limited facts proven at the trial and the unconvincing evidentiary basis for an appeal, this is just not a case where the High Court is likely to grant special leave.
Secondly, in my opinion, even in the unlikely event that special leave is granted as to one of the grounds, the prospects of success of the appeal are low, not least because of the evidentiary weakness and for the reasons already comprehensively stated by this Court and by the trial judge.
A third significant consideration is that even if the point raised by the applicants were successful, the applicants would still owe the bank a very large sum of money. Moneys have been outstanding to the bank since 2009 when the applicants first fell into arrears on their borrowing from the bank. Interest has been accruing on these arrears and is continuing to accrue on the judgment debt which exceeds $1 million despite every effort by the applicants to make repayments.
Despite the submissions of Mr Gronow, who said everything that counsel can say in favour of the applicants’ case, the applicants do not have sufficient prospects of success to justify the grant of a stay on the warrant of possession over the property at 74 Osborne Street, Williamstown or a stay of execution on the orders of the Court on 4 June 2014. They do not have an arguable case as would support the grant of a stay.
I am also of the view that the applicants have not shown special circumstances or that the balance of convenience favours the grant of a stay. While the applicants have unsuccessfully claimed set offs and defences and have made repayments as best they can, the basic fact is that they owe a very substantial sum of money to the bank. Since the first default, the arrears have increased as repayments have not been made, and interest has accrued under the loan. In my view, it would be unfair and unjust to the bank if it were denied or postponed in the realisation of the security which it holds over the Williamstown property.
Despite the loss by the applicants of their family home and acknowledging the significant impact of this on the Ozden family, I am not satisfied that there are
any special circumstances which favour the grant of a stay.
I am satisfied that the balance of convenience is in favour of the bank having access to its security especially having regard to the magnitude of the applicants’ indebtedness and despite the undertaking proffered by the applicants to repay $5,000 per calendar month. It is not suggested that the applicants have the financial capacity to fully repay the outstanding bank loans. It is acknowledged that the sale of the Williamstown property will reduce but not repay their indebtedness. Even with repayments of $5,000 per month as offered by Mr Gronow on their behalf, the debt will continue to increase.
In conclusion, the applicants have not shown that they have an arguable case for their application for special leave. They have not shown that there are special circumstances which justify the grant of a stay or that the balance of convenience is in their favour.
I would dismiss the applicants’ summons dated 2 September 2014 and, subject to anything that counsel may say, with costs.
SANTAMARIA JA:
I agree.
The order is that the summons dated 2 September 2014 is dismissed and that the applicants pay the costs of the respondent on the standard basis.
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