Permanent Trustee Co Ltd v Frazis - [1999] NSWSC 319

CITATION: Permanent Trustee Company Limited v Frazis [1999] NSWSC 319

CURRENT JURISDICTION: Common Law Division

FILE NUMBER(S): 12857/98

HEARING DATE(S): 22-23 February 1999

JUDGMENT DATE:
9 April 1999

PARTIES :

Permanent Trustee Company Limited (Plaintiff)
Gorgios Frazis (First Defendant/Applicant)
Athoula Frazis (Second Defendant/Applicant)
Mike Frazis (Third Defendant)

JUDGMENT OF: Dunford J

COUNSEL : Mr Simpkins (Plaintiff)
Mr Grinter (First & Second Defendants/Applicants)

SOLICITORS: Gadens Lawyers (Plaintiff)
Christine Manolakos & Co. (First and Second Defendants/Applicants)

CATCHWORDS: PROCEDURE - Application to set aside default judgment; Defence on the merits; REAL PROPERTY - Torrens Title; Indefeasibility; Mortgage; Forged Instrument; CONTRACTS - Contracts Review Act 1980; Forged instruments; Whether relief available under Act

ACTS CITED: Real Property Act 1900
Contracts Review Act 1980

CASES CITED: Grgic v Australian and New Zealand Banking Group Limited (1994) 33 NSWLR 202
Vassos v State Bank of South Australia [1993] 2 VR 316
PT Limited v Maradona Pty Limited (1992) 25 NSWLR 643
Daniels v Davidson (1809) 16 Ves 249, 33 ER 978
Hunt v Luck [1901] 1 Ch 45
AGC (Advances) Limited v West (1986) 5 NSWLR 590 at 620;
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447

DECISION: Application dismissed; Execution of writ of possession stayed.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DUNFORD J
9 APRIL 1999
12857/98 - Permanent Trustee Company Limited v Gorgios FRAZIS & Ors
JUDGMENT

1 HIS HONOUR: By Notice of Motion filed on 28 January 1999 the first and second defendants (the applicants) apply to set aside a judgment entered in default of appearance for possession of premises known as 131 The Grand Parade, Brighton-Le-Sands. The application for judgment was filed on 16 December 1998, the Statement of Claim having been served on 28 November 1998 and the judgment took effect on 5 January 1999. A stay of execution on the judgment is presently in force until further order.
2 By its Statement of Claim filed 23 November 1998 the plaintiff alleged a Loan Agreement dated 26 May 1998 under which the plaintiff advanced $331,500 to the three defendants secured by a registered mortgage under the Real Property Act 1900, registered no. 5051250 dated 2 May 1998 by the first and second defendants as registered proprietors of the subject premises. The Statement of Claim further alleged default by way of arrears under the Loan Agreement and the Mortgage.
3 The explanation proffered for the failure to file a Notice of Appearance in time is essentially that the first and second defendants changed their solicitors, their fresh solicitor took holidays over the Christmas period and when her office re-opened in mid January the judgment had been entered and the writ of possession issued. The explanation is not entirely satisfactory but it is not such as would prevent the judgement being set aside if the first and second defendants were able to show a bona fide defence on the merits. The defence sought to be raised by the first and second defendants, who are husband and…

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: [1999] NSWSC 319
Decision Date: 9 April 1999

CaseChat Overview and Summary

The matter before the court was an application by the defendant, Frazis, to set aside a default judgment entered against him in a proceeding brought by the plaintiff, Permanent Trustee Co Ltd, for recovery of possession of certain property and for payment of arrears of mortgage. The dispute centred around the indefeasibility of title under the Torrens system, the validity of a mortgage, and the potential relief available under the Contracts Review Act 1980 in the context of a forged instrument. The case was heard in the Supreme Court of New South Wales.

The legal issues the court had to address were whether the defendant could successfully challenge the default judgment by presenting a defence on the merits and, if so, whether the Contracts Review Act 1980 provided any relief in respect of the forged instrument. The court needed to determine whether the forged instrument could be considered in setting aside the default judgment, and if so, whether the defendant had established a sufficient case to warrant relief.

The court found that the defendant had not only failed to present a defence on the merits but had also not demonstrated a case for relief under the Contracts Review Act 1980. The court emphasised that the Act does not allow for relief in cases where a party has been negligent in failing to discover a forged instrument prior to entering into a contract. Furthermore, the court noted that the defendant had not presented any evidence that the mortgage was obtained through fraud or misrepresentation. The court held that the default judgment should stand, as the defendant had not satisfied the criteria for setting it aside.

The court dismissed the application to set aside the default judgment and ordered the defendant to pay the plaintiff's costs of the application.

Orders