Psevdos v Commonwealth Bank of Australia

[2018] SASC 9

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

PSEVDOS v COMMONWEALTH BANK OF AUSTRALIA

[2018] SASC 9

Judgment of The Honourable Justice Stanley

9 February 2018

APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - REOPENING APPEAL

Application pursuant to rules 194(8) and 296(2) of the Supreme Court Civil Rules 2006 (SA) (SCR) for the reinstatement of an appeal.

The applicant instituted an appeal on 21 May 2015 against the orders of Parker J made on 30 April 2015. A judge of this court subsequently ordered the applicant provide security for the costs of the appeal and stayed the appeal pending payment of security. The applicant failed to pay the security. On 21 November 2015 the appeal lapsed pursuant to SCR 296. On 16 October 2017 the applicant filed this application to reinstate the appeal.

Held: Application dismissed.

1. The appeal is stayed by operation of s 60 of the Bankruptcy Act 1966 (Cth) and as such any order by this Court pursuant to SCR 296(2) or 194(8) would be futile (at [43]). Further, the appeal is stayed pending payment of security for costs (at [33]).

2.  In any event, the appeal stands dismissed on two bases: first, pursuant to SCR 296(2) by reason of the failure to set it down for hearing within six months of the appeal being instituted; and second, pursuant to SCR 194(6) as the action has been stayed for more than six months and is therefore automatically dismissed for want of prosecution (at 44]).

3.  Special reasons have not been established for the Court to reinstate the appeal pursuant to SCR 194 or SCR 296 (at [49]).

Supreme Court Civil Rules 2006 (SA) r 194(6), r 194(8), r 296(2); Bankruptcy Act 1966 (Cth) s 58(1), s 60(2), s 60(3), referred to.
Moore v Macks [2007] FCA 10; Boensch v Pascoe [2007] FCA 1977; Psevdos v Commonwealth Bank of Australia (2016) 248 FCR 430; Duckworth v Water Corporation (2012) 261 FLR 185; Cox v Journeaux (No 2) (1935) 52 CLR 713, applied.

PSEVDOS v COMMONWEALTH BANK OF AUSTRALIA
[2018] SASC 9

Civil

STANLEY J.

Introduction

1. This is an application pursuant to rules 194(8) and 296(2) of the Supreme Court Civil Rules 2006 (SA) (SCR) for the reinstatement of an appeal.  In order to understand the basis of the application, it is necessary to set out in some detail the lengthy background. 

2. Mr Psevdos brought an appeal against a judgment of Parker J who made orders granting a declaration to the Commonwealth Bank of Australia (CBA) that its equitable interest in real property had priority over any equitable interest held by Mr Psevdos, acting as trustee of the Orio Investment Trust, in the same property.  The Court ordered Mr Psevdos to pay the CBA’s costs of the trial on an indemnity basis.  Parker J gave reasons for judgment in this matter on 30 April 2015. 

3. Before judgment was delivered Mr Psevdos filed an interlocutory application on 29 April 2015 seeking to call further evidence and/or to undertake further cross‑examination of a Mr Peter Marshall.  Parker J dismissed the application for taking of further evidence at the same time as he delivered judgment.

4. On 12 May 2015 Mr Psevdos filed an interlocutory application in this Court seeking to stay the judgment including the costs order.  That application was dismissed by Parker J on 13 May 2015.

5. On 21 May 2015 Mr Psevdos filed a notice of appeal from the judgment.

6. On 26 June 2015 Bampton J ordered that Mr Psevdos provide security for the costs of the appeal in the amount of $15,000 and stayed the appeal until security was paid. 

7. Mr Psevdos failed to pay the security and the appeal did not proceed.  Subsequently, Mr Psevdos has never paid the security ordered by Bampton J for the costs of the appeal. 

8. The CBA sought the quantification of its costs pursuant to the costs order through adjudication.  On 18 September 2015 Mr Psevdos, by his counsel, consented to the issue of an interim allocutur standing as a judgment of the Court quantifying that portion of the CBA’s costs pursuant to the costs order in the amount of $120,068.98 on the basis that execution was stayed until 30 October 2015.  By consent an interim allocatur was subsequently issued on that basis.  Mr Psevdos failed to pay the allocatur within the period of the stay. 

9. On 2 November 2015 the CBA issued a bankruptcy notice to Mr Psevdos in the amount of $121,121.64.  The notice was founded upon the allocatur inclusive of interest.  The notice was served on Mr Psevdos on 2 November 2015.

10. On 20 November 2015 Mr Psevdos applied to stay the allocatur.  That application was dismissed on 24 November 2015. 

11. On 21 November 2015 the appeal from Parker J’s judgment of 30 April 2015 lapsed pursuant to SCR 296 and no application was made by Mr Psevdos to reinstate it.

12. Mr Psevdos then commenced proceedings in the Federal Circuit Court to set aside the bankruptcy notice.  That application was dismissed on 14 December 2015. 

13. In January 2016 Mr Psevdos sought a review of the dismissal of the set aside application.

14. On 28 April 2016 that application for review was dismissed by a Judge of the Federal Circuit Court.

15. On 19 May 2016 Mr Psevdos brought an appeal from that decision.

16. In the meantime the CBA had filed a creditor’s petition in December 2015.

17. On 6 June 2016 a Judge of the Federal Circuit Court gave judgment in respect of the creditor’s petition making a sequestration order against the estate of Mr Psevdos.

18. On 27 June 2016 Mr Psevdos appealed that judgment.

19. On 25 January 2017 a Judge of the Federal Court dismissed the appeal against the sequestration order.  An application for special leave to appeal that judgment to the High Court was dismissed on 9 August 2017.

20. This application was filed on 16 October 2017 and heard on 20 October 2017.

21. The application is opposed by the CBA.

22. It is convenient at this stage to refer to the relevant provisions of the SCR and the Bankruptcy Act 1966 (Cth) (Bankruptcy Act).

    Relevant provisions of the SCR

23. SCR 296 provides:

    296—Setting down appellate proceedings for hearing

    (1)If the party having the carriage of an appellate proceeding fails to set the proceeding down for hearing within the time fixed by Supplementary Rules, another party may apply to the Court for permission to set the proceeding down for hearing or for an order dismissing the proceeding.

    (2)Unless an appellate proceeding is set down for hearing within 6 months after the proceeding is commenced or a longer time allowed by the Court, the proceeding is taken to have been discontinued and lapses.  Despite the dismissal of an appellate proceeding under this rule, the Court may, for special reasons, reinstate the appellate proceeding.

    (3)If a proceeding lapses under subrule (2), all parties are to bear their own costs.

    (4)The power to allow a longer time under subrule (2) may be exercised before or after the period of 6 months has elapsed.

24. SCR 194 provides:

    194—Security for costs

    (1)The Court may order a plaintiff to provide security for costs if—

    (a)     the action is brought in a representative capacity and the plaintiff is insolvent or would have insufficient resources to meet an order for costs    if the action were to prove to be unsuccessful; or

    (b)     the plaintiff is ordinarily resident outside Australia; or

    (c)     there are reasonable grounds to suspect that the action may have been brought for an ulterior purpose; or

    (d)     the order is authorised by statute; or

    (e)     the order is necessary in the interests of justice.

    …

    (2)Security for costs is to be given in the form and manner directed by the Court.

    (3)If the Court orders security for costs, the action may be stayed until the security is given.

    (4)The Court may, at any time, vary or revoke an order for security for costs and make consequential directions.

    (5)An amount paid into the Court by way of security for costs may be paid out by consent of the interested parties.

    (6)If the action has been stayed for 6 months, the action is automatically dismissed for want of prosecution.

    (7)A dismissal effected by subrule (6) takes effect at 4.30 pm on the last day of the period.

    (8)Despite the dismissal of an action under this rule, the Court may, for special reasons, reinstate the action.

    Relevant provisions of the Bankruptcy Act

25. Section 58(1)(a) of the Bankruptcy Act provides:

    58Vesting of property upon bankruptcy—general rule

    (1)Subject to this Act, where a debtor becomes a bankrupt:

    (a)     the property of the bankrupt, not being after‑acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and

26. Section 60 of the Bankruptcy Act provides:

    60Stay of legal proceedings

    (1)The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit:

    (a)     discharge an order made, whether before or after the commencement of this subsection, against the person or property of the debtor under any law relating to the imprisonment of fraudulent debtors and, in a case where the debtor is imprisoned or otherwise held in custody under such a law, discharge the debtor out of custody; or

    (b)     stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor:

    (i)in respect of the non‑payment of a provable debt or of a pecuniary penalty payable in consequence of the non‑payment of a provable debt; or

    (ii)in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt;

    and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non‑payment of a provable debt or of a pecuniary penalty referred to in subparagraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in subparagraph (ii), discharge the debtor out of custody.

    (2)An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.

    (3)If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.

    (4)Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of:

    (a)     any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or

    (b)     the death of his or her spouse or de facto partner or of a member of his or her family.

    Note: See also subsection 5(6).

    (4A)Notwithstanding paragraph (1)(b), this section does not empower the Court to stay any proceedings under a proceeds of crime law.

    (5)In this section, action means any civil proceeding, whether at law or in equity.

    The submissions of the respondent

27. It is convenient for the purposes of deciding this application to commence with the submissions of the CBA. Mr Roberts SC, for the CBA, submits that the application should be dismissed as it is futile. Even if Mr Psevdos could establish special reasons for the purposes of SCR 296(2) and 194(8), which he submits Mr Psevdos cannot, the appeal is stayed pursuant to s 60(2) and s 60(3) of the Bankruptcy Act. In any event, the appeal is without merit and doomed to fail.

    The applicant’s submissions

28. On the hearing of this application, Mr Psevdos relied on two affidavits of himself. He submits that the judgment of Parker J was procured by a fraudulent misrepresentation by the CBA that a witness in the action, Mr Peter Marshall, who was alleged to have authorised the making of the loan for which the real property stood as security, was its employee. He submits this fact was only discovered after the close of proceedings before Parker J. He submits that special reasons exist to reinstate the appeal as he misconceived the rules and was unaware of SCR 194(6). As a result of the judgment and his subsequent bankruptcy, he submits that his standing as a financial dealer and registered money lender has been damaged. He submits that this is a personal wrong that he has suffered and that by reason of s 60(4) of the Bankruptcy Act he is entitled to pursue the appeal in his personal capacity. Somewhat inconsistently he submits that he appears on the application as trustee of the Orio Investment Trust and not in his personal capacity.

    Submissions of Mr Psevdos’ Trustee in Bankruptcy

29. Mr Ryder, counsel for the trustee, adopts the submissions of the CBA and submits that Mr Psevdos lacks standing to maintain the appeal, even in circumstances where the appeal has either been dismissed, pursuant to the rules, or for want of prosecution, and s 60(4) has no application as the appeal does not concern any personal injury or wrong done to Mr Psevdos. Rather, it is concerned with his property rights.

    Disposition of the application

30. I would dismiss the application.  The application is futile and without merit.

31. The appeal from the orders made by Parker J is stayed on two separate bases.  In addition, the appeal stands dismissed by operation of SCR 296(2) and 194(6).

32. The first basis upon which the appeal is stayed is the order of Bampton J on 26 June 2015 staying the appeal pending payment of security in the amount of $15,000. The second basis is by operation of law pursuant to s 60 of the Bankruptcy Act.

33. The sum of $15,000 ordered to be paid by way of security for the costs of the appeal still has not been paid. Furthermore, the appeal pursuant to SCR 194 was automatically dismissed after the appeal had been stayed for six months. That occurred on 26 December 2015. While SCR 194(8) nonetheless permits the appeal to be reinstated, for reasons I will come to, I consider special reasons have not been established for the Court to do so. In addition, even if the appeal was reinstated it would still be stayed by reason of the failure to pay the security ordered. I suppose it is conceivable that if the Court was to order that the appeal be reinstated, Mr Psevdos could discharge the stay by paying the security, however, that would not avail him as the appeal would remain stayed by operation of law pursuant to s 60 of the Bankruptcy Act.

34. Pursuant to s 60(2) of the Bankruptcy Act an action commenced by a person who subsequently becomes bankrupt is stayed until the trustee makes an election in writing to prosecute or discontinue the action. Pursuant to s 60(5), “action” means any civil proceeding. Pursuant to s 60(3), if the trustee does not make such an election within 28 days of service of a notice of the action, the trustee shall be deemed to have abandoned the action. In this case, the trustee has not been served with a notice.

35. The operation of s 60(2) and (3) extends to an appeal,[1] including one brought by a bankrupt in their capacity as trustee.[2]

    [1]    Moore v Macks [2007] FCA 10 at [12]; Boensch v Pascoe [2007] FCA 1977 at [23]; Psevdos v Commonwealth Bank of Australia [2016] FCA 844 at [19] (2016) 248 FCR 430 at 436.

    [2]    Duckworth v Water Corporation [2012] WASC 30 at [82], (2012) 261 FLR 185 at 199; Psevdos v Commonwealth Bank of Australia [2016] FCA 844 at [15]-]17], (2016) 248 FCR 430 at 434-435.

36. In this case, as no election has been made by the trustee to prosecute the appeal, it is stayed. 

37. Section 60(4) creates a limited exception to the scheme enshrined in s 60. Relevantly, it permits a bankrupt to continue an action commenced by him or her before they became bankrupt in respect of “any personal injury or wrong done to the bankrupt”.

38. Mr Psevdos seeks to avoid the consequence of the operation of s 60(2) by submitting that the appeal which he seeks to have reinstated will vindicate a personal wrong that has been done to his reputation or character and, accordingly, falls within the exception created by s 60(4) as it is an action concerning personal wrong done to him.

39. That submission cannot be accepted.

40. In Cox v Journeaux (No 2),[3] Dixon J identified the test under the equivalent provision to s 60(4)(a) in the following terms:[4]

    The plaintiff says that he himself is entitled to prosecute it under the proviso as an action for personal injury or wrong done to himself.  The test appears to be whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property (Wilson v United Counties Bank Ltd). 

    [3] [1935] HCA 48, (1935) 52 CLR 713.

    [4] [1935] HCA 48, (1935) 52 CLR 713 at 721.

41. In Boensch v Pascoe,[5] Buchanan J said:

    Section 60(4) has been held to apply only where the relief sought is to be assessed ‘by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property’ (see Cox v Journeaux (No 2) (1935) 52 CLR 713 at 721; Faulkner v Bluett (1981) 52 FLR 115 at 119; and Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 at [44] – [45]).

    At the heart of Mr Boensch’s challenge to the bankruptcy notice was an issue concerning his property.  His property was directly affected both by the judgment Mr Costin obtained and by the various costs orders made against him.  Those matters did not involve personal interests severable from his property (see Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 at 55 – 56). Section 60(4) did not apply in my view.

    [5] [2007] FCA 1977 at [24]-[25].

42. The proceedings before Parker J and, it follows, the appeal, were and are fundamentally concerned with property rights. It follows that the appeal is not an action commenced by Mr Psevdos in respect of a personal wrong done to himself. Accordingly, the appeal is not an action to which s 60(4) applies.

43. The appeal is a civil proceeding, and consequently an “action”, in accordance with s 60(5). Accordingly, it has been stayed by the operation of s 60(2) and s 60(3). As that stay exists by operation of law, any order by this Court pursuant to SCR 296(2) or 194(8) would be futile. Further, in the circumstances, the trustee’s submission that Mr Psevdos lacks standing to prosecute the appeal must be accepted.[6] 

    [6]    Cummings v Claremont Petroleum [1996] HCA 19, (1996) 185 CLR 124.

44. In any event, the appeal stands dismissed on two bases, as I have mentioned.  First, pursuant to SCR 296(2) by reason of the failure of Mr Psevdos to set it down for hearing within six months of the appeal being instituted.  Second, pursuant to SCR 194(6) as the action has been stayed for more than six months and, therefore, has been automatically dismissed for want of prosecution.

45. Nonetheless, the Court may reinstate the appeal pursuant to SCR 296(2) or 194(8).  However, the exercise of the Court’s power to do so is conditioned upon the existence of “special reasons”. 

46. Accordingly, the appeal can only be reinstated if Mr Psevdos can show special reasons for doing so. 

47. What constitutes “special reasons” for the purposes of SCR 296 and 194 has not been authoritatively decided, but the expression is used in other legislation where it has been held that it is constituted by reasons that are extraordinary, unusual or atypical or beyond the contemplation of Parliament.[7]   

    [7]    Baskerville v Martin [1967] SASR 156 at 160-161; Barwick v Crichton (1983) 36 SASR 142 at 144; Acre Development Pty Ltd v National Companies & Securities Commission (1987) 46 SASR 238 at 243-244;  R v Barnett (2009) 198 A Crim R 251.

1. The requirement for “special reasons” as a condition precedent to the exercise of a discretion to permit a party to reinstate an action lies in public policy considerations surrounding the need for finality in litigation.  Given the importance of the principle of finality, the rules erect a significant obstacle to the exercise of the Court’s discretion to reinstate an action.  Once an action or appeal stands dismissed, parties are entitled to arrange and conduct their affairs accordingly.  Courts should not change this situation unless special reasons to do so are found to exist. 

2. In my view, nothing put by Mr Psevdos could remotely be characterised as falling within the meaning of “special reasons”. 

3. Mr Psevdos relies upon having misconceived the rules, his ignorance of SCR 194(6) and the merits of the appeal.  In my view, none of these matters constitute “special reasons”.    Neither misconceiving the rules nor ignorance of them constitute “special reasons” within the meaning of SCR 296 and 194.  Neither matter constitutes a sufficient basis to reinstate the appeal, given the underlying rationale for establishing “special reasons” for reinstating an appeal referred to above.  In any event, I am not persuaded that Mr Psevdos was ignorant of the rules.  On 24 November 2015, the parties were before Judge Dart.  It is necessary to set out the transcript of what occurred.

   HIS HONOUR:    Mr Psevdos, this is your application.

   MR PSEVDOS:    Yes, it is and thank you for the indulgence and thank you for making time to hear it today.  I must say and I perhaps should have contacted the court yesterday, it’s largely been dealt with in another way, that being an application before the Federal Circuit Court to set aside the bankruptcy notice.  I wasn’t contacted yesterday by the registrar regarding the hearing time of this particular application but nevertheless it would be improper not to speak to at least today.

   HIS HONOUR:    So are you no longer pressing the application?

   MR PSEVDOS:    Well, I’m not pressing it in this particular form.  But what the application does ultimately rely upon is a notice of appeal.  Today unbeknown to me I have a different understanding when that appeal date in fact – or the six months when the appeal date actually lapses.  I instead it’s elapsed depending on how you read the judgment of Bampton J.  It’s either the fifth – bear with me – 24 or at best 11 March 2016.  The application or the appeal was started.

   HIS HONOUR:    The appeal was instituted on 21 May wasn’t it?

   MR PSEVDOS:    Yes.

   HIS HONOUR:    So my understanding of the rules it’s probably already lapsed.

   MR PSEVDOS:    Well, it was stayed on –

   HIS HONOUR:    It was stayed on –

   MR PSEVDOS:    - 24 June.

   HIS HONOUR:    June, but that doesn’t stop time running.  My view is the appeal has lapsed on last Saturday probably.

   MR PSEVDOS:    The order that was made by Bampton J says special circumstances and I do have a copy here if you wish to look at it.

   HIS HONOUR:    No, I know what the orders are.  So one was pay security for the appeal in the amount of 15,000.

   MR PSEVDOS:    Yes.

   HIS HONOUR:    And stayed pending payment.

   MR PSEVDOS:    Yes.

   HIS HONOUR:    And then rule 296(2) ways if an appeal is not set down within six months it’s deemed to be discontinued.

   MR PSEVDOS:    But from what date?  My understanding was from –

   HIS HONOUR:    From the date of institution of the appeal.  You don’t extend or elasticise the six months by just getting a stay.

   MR PSEVDOS:    That wasn’t clear to me at the time.

   HIS HONOUR:    All right, that’s fine.

   MR PSEVDOS:    And on that basis it has lapsed.  It actually lapsed on the 21st of this month which was Saturday.

   HIS HONOUR:    It probably lapsed Monday really, yesterday I suspect.  It probably lapses on a business day I expect.

   MR PSEVDOS:    Well, what I would be seeking is an extension of two weeks in order to file the prerequisites or the pre-petitions necessary to effect the appeal.  It is an error on my part.

   HIS HONOUR:    Are you going to pay the $15,000?

   MR PSEVDOS:    Yes, I am.

   HIS HONOUR:    All right.  You can apply to reinstate an appeal.  That’s what you need to do under the rule.

   MR PSEVDOS:    Yes.

   HIS HONOUR:    But the court would obviously probably not reinstate the appeal unless you’ve paid the security into court.

   MR PSEVDOS:    What I was intending to do is file the pre-petitions necessary and pay the money on the same day and then bring it on as quickly as possible in the new year.

   HIS HONOUR:    All right.

   MR PSEVDOS:    I can do that within a week.

   HIS HONOUR:    All right.

   MR PSEVDOS:    So I seek an extension of time.

   HIS HONOUR:    It’s not so much an extension.  The court can reinstate an appeal and presumably they can do so nunc pro tunc which means after the event.  But until you’ve paid the money into court the security there’s no way the court will entertain it.  So what you’ve got to do is make an application to reinstate the appeal.

   MR PSEVDOS:    And pay the money concurrently?

   HIS HONOUR:    And pay the money concurrently.

   MR PSEVDOS:    I’m happy to do that.

   …

4. Finally, I am not persuaded that the claimed merits of the appeal could establish “special reasons”.

5. In her reasons for ordering security for costs on the appeal, Bampton J had occasion to consider the merits of the appeal.  She made the following observations:[8]

   [8]    Commonwealth Bank of Australia v Psevdos [2015] SASC 139 at [3]-[10].

   The trial of this matter concerned competing equitable interests in real property known as Trenance, Bonython Road, Bugle Ranges (the Schutara property).  The CBA sought a declaration that its equitable interest has priority over any equitable interest held by the appellant, Mr Psevdos, acting as trustee of the Orio Investment Trust. 

   The CBA entered into a loan agreement in the sum of $2,550,200 with the registered proprietor of the Schutara property, Schutara Pty Ltd (Schutara) on 5 June 2009.  Schutara gave a mortgage over the Schutara property to the CBA as security.  Subsequently, on 29 June 2009, Schutara entered into a written loan agreement with Mr Psevdos, as trustee for Orio Investment Trust, in the amount of $378,000.  Schutara granted Mr Psevdos a mortgage in registrable form as the agreed security.  Mr Psevdos then lodged a caveat claiming an equitable interest as mortgagee over the Schutara property.  The CBA became aware of the caveat and the CBA mortgage was amended to be expressly made subject to Mr Psevdos’ caveat so as to enable registration.  The CBA mortgage was then registered subject to the caveat. 

   On 30 April 2015, Parker J found in favour of the CBA, holding that the lodgement of Mr Psevdos’ caveat and the registration of the CBA mortgage subject to the caveat did not bear upon the priorities as between the parties’ competing equities. 

   Justice Parker was satisfied that the CBA mortgage had priority over Mr Psevdos’ mortgage.  His Honour said that:

   ·       the CBA mortgage was first in time and Mr Psevdos was unable to establish any act or neglect on the part of CBA such as to make it inequitable for it to retain its priority;

   ·       the failure by the CBA to lodge a caveat did not of itself constitute postponing conduct;

   ·       the CBA’s position was strengthened by the fact that Mr Psevdos had notice of the CBA’s prior equitable interest when he entered into the loan agreement and executed the mortgage; and

   ·       he was satisfied that the better equity lay with the CBA.

   The trial of the matter commenced on the basis that a number of central factual issues concerning the making of the Psevdos loan and mortgage and lodgement of the caveat were in dispute.  Justice Parker stated that the trial was protracted by about four days hearing evidence in relation to those matters.

   The circumstances of the abandonment of the defence

   On the fifth day of the trial before Parker J, a document was produced on subpoena from Mr Psevdos’ conveyancer, Ms Graetz, in relation to the transactions that are the subject of the underlying dispute.  During the course of the morning on 27 February, the CBA uplifted and inspected the subpoenaed file. 

   During Mr Psevdos’ cross-examination, counsel for the CBA placed before him an email dated 29 June 2009 (the Graetz email) that had come from Ms Graetz’s conveyancing file produced under subpoena.  In the Graetz email addressed to Mr Psevdos, Ms Graetz wrote “I also confirm your instructions that I am not to caveat the properties known as Tenance – Bonython Rd Bugle Ranges via Mt Barker Road until the CBA refinance has gone through. I check searched these titles today and note that the mortgage to Provident is still registered and there are no unregistered documents showing up therefore CBA’s mortgage has not been lodged to date”.  Mr Psevdos was cross-examined about the Graetz email in the context of his evidence that he knew nothing of the CBA mortgage.  Mr Psevdos gave evidence that he had no recollection of the email.  It was put to him that he responded to the Graetz email saying “And the Cba needs to register first on the balance of five lots Bonython Road”.  In other words, the CBA submitted that Mr Psevdos was not merely being told by his conveyancer of the proposed CBA mortgage coming in as a first registered mortgage but that he responded in a confirmatory way to his conveyancer.  It was put to Mr Psevdos that he had collected the original Graetz file and delivered it to his solicitors for the purposes of discovery being made in the proceedings and yet the file, as discovered, had removed from it, or did not include within it, documents such as the Graetz email regarding the registration of the mortgage.  Following this cross-examination, counsel for Mr Psevdos informed the Court that he had instructions that the equitable argument would not be pursued.

   Thereafter, Mr Psevdos abandoned more than half of his defence and sought not to challenge the evidence of the CBA that its equitable interest as mortgagee was superior to his, relying instead on the registration argument.

6. Bampton J went on to observe that the notice of appeal challenges findings of fact made by Parker J that were abandoned at trial.  Accordingly, Bampton J considered many of the grounds were without merit and arguably an abuse of process. 

7. Nothing has been put to me by Mr Psevdos that would persuade me that the appeal has any reasonable prospects of success if reinstated. 

8. Finally, in that regard, Mr Psevdos’ submission that, if the appeal was reinstated, the appeal court should go behind Parker J’s decision on the basis of fresh evidence of the CBA’s alleged fraudulent misrepresentation of Mr Marshall’s status, is misconceived.  As I have noted, on 29 April 2015 Mr Psevdos brought an interlocutory application before Parker J which sought to raise this matter.  Parker J dismissed the application to re-open the case on this ground and, subsequently, gave judgment in the matter.

   Conclusion

9. I would dismiss the application.  I will hear the parties as to costs.