Sayed v National Australia Bank

[2020] NSWCA 88

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Sayed v National Australia Bank [2020] NSWCA 88
Hearing dates:	1 May 2020
Date of orders:	01 May 2020
Decision date:	01 May 2020
Before:	Emmett AJA
Decision:	Orders reproduced at end of judgment
Catchwords:	CIVIL PROCEDURE — Court of Appeal — Procedure — Notice to produce — Application to restrain further notices to produce   CIVIL PROCEDURE — Court of Appeal — Procedure — Application to remove a party from proceedings
Legislation Cited:	Nil
Cases Cited:	Nil
Texts Cited:	Nil
Category:	Procedural and other rulings
Parties:	Bill Sayed (Applicant) National Australia Bank Limited (First Respondent) Nicole Susan McArthur (Second Respondent)
Representation:	Counsel: Bill Sayed (Applicant in person) G Lucarelli (First Respondent)   Solicitors: Dentons Australia Pty Ltd (First Respondent) Robertson Saxton Osborne (Second Respondent)
File Number(s):	2019/204489; 2019/253854

EX TEMPORE Judgment

1. HIS HONOUR: I have before me three notices of motion in relation to two sets of proceedings, namely, proceedings No 253854 of 2019 (the Leave Proceedings) and proceedings No 204489 of 2019 (the Appeal Proceedings). Mr Bill Sayed is the applicant for leave in the Leave Proceedings and is the appellant in the Appeal proceedings.

2. The first motion concerns the participation by Ms Nicole McArthur in the two sets of proceedings. By amended notice of motion filed on 7 April 2020, Mr Sayed seeks a declaration that Ms McArthur has no interest in either of the proceedings and an order removing her as a party to the proceedings.

3. Ms McArthur is not a party to the Leave Proceedings. However, she has been joined as a party to the Leave Proceedings, which is an application for leave to appeal from orders made by Harrison AsJ on 16 April 2015. In those proceedings, Harrison AsJ ordered that the defendants, Mr Sayed and Ms McArthur, specifically perform an “in-principle agreement” dated 23 August 2012 made by them with National Australia Bank Limited (the Bank). Although the orders were made on 16 April 2015, the summons seeking leave to appeal was not filed until 15 August 2019. By the summons, Mr Sayed seeks an order extending the time for the filing of an appeal.

4. The parties to the in-principle agreement were the Bank, Mr Sayed, and Ms McArthur. Clearly, Ms McArthur is a necessary party to any proceedings involved in the question of whether or not that agreement should be the subject of an order for specific performance. That is why, although she was not named as a respondent in the summons, she was subsequently added as a respondent.

5. There was some doubt as to whether the appearance that she subsequently filed was a submitting appearance. It appears that it was not and I propose to give leave to her to file within seven days, if she is so advised, a submitting appearance submitting to any order that the Court sees fit to make other than an order as to costs. Whether or not she participates and opposes the orders that are sought by Mr Sayed, it is clear that she needs to be a party to the proceedings so that she is bound by any determination in relation to the in-principle agreement.

6. The second and third notices of motion are concerned with notices to produce filed and served by Mr Sayed on the Bank. By its notice of motion dated 19 September 2019 and amended notice of motion dated 1 November 2019, which appears to have been filed on 4 November 2019, the Bank seeks an order that certain notices to produce served by Mr Sayed be set aside and an order that Mr Sayed be restrained from issuing any further notices to produce in the Appeal Proceedings or the Leave Proceedings, without the prior leave of the Court.

7. Mr Sayed has now confirmed that he does not press an answer to any of the notices to produce that he has served other than an amended notice to produce that bears the date 1 May 2020.

8. I have indicated my concern that I do not understand the basis upon which Mr Sayed seeks the documents that are the subject of his notices to produce. The documents that he seeks are documents evidencing arrangements between the Bank and Mattisam Pty Ltd, which carried on business as “Mortgage and Estate Realisation Company” (MERC).

9. In Mr Sayed’s cross-claim that was the subject of a judgment of McCallum J on 25 June 2019, [1] from which Mr Sayed appeals in the Appeal Proceedings, Mr Sayed sought a declaration that the Bank engaged in conduct that was in breach of its duty to act in good faith to him in its capacity as mortgagee exercising power of sale in respect of a property at Corrimal consisting of lots 41 and 42 (the Corrimal Property). The Corrimal Property was the subject of a mortgage by Mr Sayed to the Bank to secure advances made by the Bank to Mr Sayed.

10. In the cross-claim, Mr Sayed alleged, relevantly, that on 1 June 2009 the Bank, by its agent MERC, obtained recommendations for marketing of the Corrimal Property based on criteria specified by MERC for Mr Greg Ellul trading as MMJ North Corrimal. The cross-claim subsequently alleged that, on 20 October 2009, the Bank, by its agent MERC, appointed MMJ North Corrimal as its agent to market the Corrimal Property. It is also alleged that on 30 July 2009 the Bank rejected without explanation a proposal under which the Corrimal Property would be sold and that the Bank failed to follow up or seek further information about interested purchasers.

11. Paragraph 30 of the cross-claim then alleged that, after rejecting tender offers and taking further steps to “reassign” the Corrimal Property to an alternative agent, the Bank sold the Corrimal Property on 19 February 2010 for a sum of $545,545.45 to Realta Enterprises Pty Ltd, a third party unrelated to Mr Sayed. Paragraph 31 alleged that the Bank wilfully and recklessly sacrificed Mr Sayed’s interests as mortgagor in that sale and in the circumstances surrounding the sale, in that it failed to take reasonable precautions to obtain a proper price for the Corrimal property. Some 14 particulars of the Bank’s breach and failure are then set out.

12. In paragraph 29 of her reasons of 25 June 2019, McCallum J referred to the appointment by the Bank of MERC on 26 May 2009 to arrange the sale of the Corrimal Property on behalf of the Bank as mortgagee in possession. Her Honour referred to an electronic journal tendered by Mr Sayed that had been maintained by MERC and that provided a running record of the steps taken by MERC and others with access to the journal during the process of selling the Corrimal Property.

13. In paragraph 30 of her reasons, McCallum J said that the first step taken by MERC was to instruct Mr Greg Ellul of MMJ North Corrimal to take possession of the Corrimal Property and that, at that time, the journal recorded that Mr Ellul believed access to Lot 42 could only be gained through Lot 41 but that he would confirm. After Mr Ellul had confirmed that the Bank was in possession, MERC reported to the Bank that there were two parcels of land bisected by a creek and that Lot 42 was landlocked and could only be accessed via Lot 41 and over the creek, which had a temporary access way. That is one of the matters of alleged breach by the Bank in exercising its power of sale. In paragraph 36, her Honour referred to the fact that, over the following months, MERC received conflicting information as to the market value of the Corrimal Property.

14. Against that background, the disputed notice to produce calls for documents evidencing the extension, varying the terms or relating to determination of a contract between the Bank and MERC, and any document relating to the ceasing of services between the Bank and MERC, between NAB on the one part or its solicitors and staff and MERC or its solicitors on the other part.

15. The Bank has already made available to Mr Sayed, as I understand it in answer to an earlier notice to produce, a copy of a letter dated 25 May 2009 from the Bank to MERC instructing MERC to provide property management services in relation to the Corrimal Property in accordance with the terms and conditions of “our agreement number A01014”. That is a reference to an agreement bearing that number between the Bank and MERC for the provision of property management services (the Services Agreement). The Services Agreement was signed on 22 October 2001 on behalf of MERC and on 31 October 2001 on behalf of the Bank. Clause 3 of the Services Agreement provided that it was to commence on 22 October 2001 and, unless otherwise extended or terminated in accordance with its terms, was to continue in full force and effect for a period of 12 months. Clause 3.2 provided that the Bank may, at its sole discretion, elect to extend the Services Agreement by further periods of up to 12 months by giving MERC at least 30 days’ notice in writing prior to the commencement of each period or periods. Clause 3.3 provided that, notwithstanding clause 3.2, if the Bank extended the term beyond the initial period of 12 months the Bank would be entitled to terminate the Services Agreement at any time by giving at least 90 days’ notice to MERC.

16. By the Services Agreement, the Bank engaged MERC to provide to the Bank the Services (as defined) and MERC agreed to provide to the Bank the Services (as defined). The term “Services” was defined in Schedule B1 to the Services Agreement, which contained a detailed description of Service, under the headings, relevantly, “Statement of Business Purpose”, “Scope of Services” and “Provision of Services”. Relevantly the schedule specified that MERC intended to provide property management services to the Bank in a timely and efficient manner, manage all associated requirements relating to property inspection, maintenance, marketing and sale in the most cost effective manner and ensure consistent and expedient realisation and examination of asset value in instances of mortgages default or potential asset risk for specific residential properties managed by the Bank throughout Australia.

17. Under “Scope of Services”, the Services to be provided were described in full detail in a further attachment to the agreement. It is unnecessary to refer to the detail of that attachment. Under the heading “Provision of Services” MERC was to provide property management services for the Bank through all States and Territories of Australia as outlined in the attachment and expressed in full detail throughout the remainder of the schedules. MERC was only to provide the Services to the Bank using the agreed templates, reports and communications media and MERC was not to provide the Services unless full prior authorisation had been obtained from the Bank.

18. In those circumstances it is clear that the Bank authorised MERC to act as its agent in connection with the exercise of its power of sale under the mortgage of the Corrimal Property. Further, counsel for the Bank has confirmed in open Court today that the question of the authority of MERC to act on behalf of the Bank in relation to the matters that were the subject of the cross-claim before McCallum J is not in issue. That is to say, the Bank accepts that it is responsible for the conduct of MERC in relation to its actions in connection with the exercise by the Bank of its power of sale under the mortgage of the Corrimal Property, all of which actions were the subject of the hearing before McCallum J and the subject of her Honour’s judgment.

19. Nevertheless, by the disputed notice to produce, Mr Sayed seeks access to documents that he wishes to tender to establish that the Services Agreement was not extended. That seems to me to be a misconceived notion. The letter of 25 May 2009 to which I have referred is clear authority from the Bank to MERC to act in relation to the sale of the Corrimal Property in terms of the Services Agreement. That is clear from the reference to the agreement number.

20. Against that background I am, I have to say, at a loss to understand what Mr Sayed’s concern is about the relationship between the Bank and MERC. He says that the Bank was negligent in allowing MERC to act in relation to the sale notwithstanding that the Services Agreement had expired. I do not understand how it could possibly advantage Mr Sayed to establish that, in some way, the Bank negligently allowed MERC to act as its agent as Mr Sayed now contends. As I have said, counsel for the Bank conceded in open court that there is no question that the actions of MERC in relation to the exercise of the power of sale of the Corrimal Property were carried out with the authority of the Bank. That is the allegation made by Mr Sayed in his cross-claim in at least two paragraphs.

21. I can see no utility for Mr Sayed in requiring production of the documents that are the subject of the disputed notice to produce in order to establish a fact that is contrary to the allegations in his cross-claim that appear to have been accepted by McCallum J. Accordingly, it is appropriate to order that the notice to produce be set aside and to indicate that there is no requirement to make any further answer to it. As I have just indicated, it appears that the Bank has already produced documents that evidence the relationship between the Bank and MERC at the time of the exercise of the power of sale.

22. That brings me to the Bank’s notice of motion. Having regard to the history of notices to produce given by Mr Sayed, and having regard to the Rules that require that a litigant in person must have the leave of the Court to issue a subpoena, I consider that it is appropriate to make an order, in terms of prayer 2 of the Bank’s amended notice of motion, that Mr Sayed be restrained from issuing any further notices to produce to any person in any of the Appeal Proceedings or the Leave Proceedings without prior leave of the Court.

23. Mr Sayed has been unsuccessful in relation to both motions. He opposed the making of the order in favour of the Bank as well as seeking to maintain his notice to produce. In the circumstances, it is appropriate that Mr Sayed be ordered to pay the costs of all three notices of motion.

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ORDERS Re Appeal Proceedings: 2019/204489

The Court Orders that:

1.   The Amended Notice of Motion filed on 7 April 2020 by the appellant in these proceedings seeking (inter alia) the removal of the second respondent as a party to proceedings 2019/253854 (“Removal Application”) be treated as also having been filed in proceedings 2019/253854.

2.   The Removal Application be dismissed.

3.   Appellant to pay the respondent’s costs and Nicole Susan McArthur’s costs of the Removal Application.

4.   The Further Amended Notice of Motion filed on 7 April 2020 by the appellant concerning a Notice to Produce to the respondent (“Notice to Produce Application”) be dismissed.

5.   The appellant pay the respondent’s costs of the Notice to Produce Application.

6.   The Amended Notice to Produce for Inspection dated 1 May 2020 prepared by the appellant and addressed to the respondent be set aside.

7.   Subject to any further order, the appellant be restrained from issuing any further Notices to Produce in these proceedings without prior leave of this Court.

8.   The respondent’s Amended Notice of Motion dated 1 November 2019 be otherwise dismissed.

9.   The appellant to pay the respondent’s costs of respondent’s Amended Notice of Motion dated 1 November 2019.

10.   Subject to any further or other direction concerning the listing of these proceedings before a Justice of Appeal for case management, direct these proceedings be listed before the Registrar at 2.15pm on Monday 11 May 2020.

AND the Court notes:

11.   That as a result of the orders and concessions made today in these proceedings and in proceedings 2019/253854, there are no Notices to Produce currently on foot against or otherwise requiring production by the respondent.

ORDERS Re Leave to Appeal Proceedings: 2019/253854

The Court Orders that:

1.   The second respondent Nicole Susan McArthur have leave to file and serve, no later than 8 May 2020 a submitting appearance, should she be so advised.

2.   The Amended Notice of Motion filed on 7 April 2020 by the applicant in proceedings 2019/2044489 seeking (inter alia) the removal of the second respondent as a party to these proceedings (“Removal Application”) be treated as also having been filed in these proceedings.

3.   The Removal Application be dismissed.

4.   The Applicant pay the first and second respondent’s costs of the Removal Application.

5.   Subject to any further order, the Appellant be restrained from issuing any further Notices to Produce in these proceedings without prior leave of this Court.

6.   Subject to any further or other direction concerning the listing of these proceedings before a Justice of Appeal for case management, direct these proceedings be listed before the learned Registrar at 2:15pm on Monday 11 May 2020.

AND the Court notes:

7.   That as a result of the orders and concessions made today in these proceedings and in proceedings 2019/204489, there are no Notices to Produce currently on foot against or otherwise requiring production by the first respondent.

Decision last updated: 07 May 2020