Permanent Custodians Ltd v Daneshyar Enterprise Pty Ltd - [2024] NSWSC 1338

Supreme Court

New South Wales

Medium Neutral Citation: Permanent Custodians Ltd v Daneshyar Enterprise Pty Ltd [2024] NSWSC 1338
Hearing dates: 20 August 2024
Date of orders: 24 October 2024
Decision date: 24 October 2024
Jurisdiction: Common Law
Before: Walton J
Decision:
(1) The Notice of Motion filed by the defendant on 28 June 2024 is dismissed.
(2) The defendant shall pay the plaintiff’s costs of the Notice of Motion.

Catchwords:
NOTICE OF MOTION – Default Judgment – Application to set aside – Order for payment of debt – Mortgage – Loan agreement – Loan in arrears – Acceleration clause – NSW crimes commission – Restraining orders – Restrained property – Third party authority – Forfeiture – Unconscionable conduct – Delay – Whether arguable defence – Mortgagee’s consent – Eviction – Writ of possession – Debt – Money owed – Prejudice

Legislation Cited:
Crimes Act 1900 (NSW)
Property Land Act 1974 (Qld)

Cases Cited:
Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
J & M McNamee Holdings Pty Ltd v Mungerie Vale Pty Ltd [2019] NSWCA 283
Kostopoulos v GE Commercial Finance Australia Pty Ltd [2005] QCA 311
National Australia Bank Ltd v C & O Voukidis Pty Ltd [2014] NSWSC 384
National Australis Bank v Priestley (No 3) [2012) NSWSC 1171
RHGMortgage Securities Pty Ltd v BNY Trust Company of Australia Ltd [2009] NSWSC 1432
Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315
Westpac Banking Corporation v Parker [2012] NSWSC 514

Category: Principal judgment
Parties: Permanent Custodians Ltd (Plaintiff)
Daneshyar Enterprise Pty Ltd (Defendant)
Representation:
Counsel:
M Collins (Plaintiff)
S Young (Defendant)
Solicitors:
Dentons Australia Pty Ltd (Plaintiff)
Abbas Jacobs Lawyers (Defendant)

File Number(s): 2024/021433

JUDGMENT

By a Notice of Motion filed on 28 June 2024 (“the Motion”), the defendant, Daneshyar Enterprise Pty Ltd, sought, inter alia, an order setting aside the default judgment obtained by the plaintiff, Permanent Custodians Limited, on 5 March 2024 (“the Default Judgment”). The default Judgment was in the form of a “Judgment Order” (produced in exhibit 4 in these proceedings). That order was executed by the Principal Registrar on 6 March 2024, but, it was entered on 5 March 2024.
By the Default Judgment, there was an order for the payment of debt outstanding under the plaintiff’s registered mortgage, AS479379 (“the Mortgage”) pursuant to a loan agreement (“the Loan”) and possession of the whole of the land in folio Identifier 9/14/111234 situated at and known as 851 Punchbowl Road, Punchbowl in the State of New South Wales (“the Property”).

Background

The defendant purchased, at the dates specified, the following properties:

837 Punchbowl Rd, Punchbowl for $910,000 on 22 November 2019,

154 Picnic Point Rd, Picnic Point for $930,000 on 30 March 2020,

406 Marion St, Condell Park for $590,000 on 22 October 2020, and

The Property, for $1,025,000 on 30 April 2022.

The first three named properties were mortgaged to the National Australia Bank (“the NAB Mortgages”), whereas the Property was mortgaged to the plaintiff.
The defendant…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] NSWSC 1338
Decision Date: 24 October 2024

CaseChat Overview and Summary

Permanent Custodians Ltd, the plaintiff, sought to enforce a debt against Daneshyar Enterprise Pty Ltd, the defendant, in the Supreme Court of New South Wales. The plaintiff, a financial institution, claimed the defendant had failed to repay a loan that had been secured by a mortgage over certain property. The loan was in arrears, and the plaintiff had triggered the acceleration clause in the loan agreement, demanding immediate repayment. The defendant did not respond to the proceedings, leading the plaintiff to obtain a default judgment for the debt owed, including interest and costs. The defendant subsequently applied to set aside the default judgment, arguing several grounds, including that there was an arguable defence, and that the plaintiff's conduct was unconscionable due to delay and lack of consent to certain actions, such as eviction and forfeiture.

The court was required to determine whether the defendant had established grounds to set aside the default judgment. Key issues included whether the defendant had an arguable defence to the claim, whether the delay in obtaining the default judgment constituted unconscionable conduct, and whether the plaintiff had acted improperly in obtaining the writ of possession without the defendant's consent. Additionally, the court had to consider whether the defendant's claim of prejudice due to the restraining orders and the actions taken by the NSW Crimes Commission affected the fairness of setting aside the judgment.

The court found that the defendant had not demonstrated an arguable defence to the claim, as the evidence showed the loan was indeed in arrears and the acceleration clause was properly invoked. However, the court acknowledged the defendant's concerns regarding the delay and the plaintiff's actions in obtaining the writ of possession without the defendant's consent. The court held that while these factors were relevant, they did not outweigh the defendant's failure to respond to the proceedings. The court emphasised that the defendant had not shown sufficient prejudice to warrant setting aside the default judgment. The court also noted that the restraining orders and actions by the NSW Crimes Commission did not constitute unconscionable conduct on the part of the plaintiff. Consequently, the application to set aside the default judgment was dismissed.

The court ordered that the default judgment remain in place, and the defendant was required to pay the debt owed to the plaintiff, including interest and costs. The court emphasised that the defendant's delay in responding to the proceedings and the plaintiff's actions, while regrettable, did not provide sufficient grounds to set aside the judgment. The defendant was also ordered to pay the plaintiff's costs of the application.

Orders