Starcevich v Swart & Associates Pty Ltd

[2006] NSWSC 1387

CITATION:	Starcevich v Swart & Associates Pty Ltd [2006] NSWSC 1387
HEARING DATE(S):	5/12/06
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
EX TEMPORE JUDGMENT DATE:	12/05/2006
DECISION:	Dismiss plaintiffs' notice of motion to discharge undertaking. Accordingly enforce order previously made as undertaking grounding stay not fulfilled. Plaintiffs to pay costs of both notices of motion. Injunction is dissolved.
CATCHWORDS:	PROCEDURE [81]- Undertakings- Voluntary undertaking by plaintiffs to court to pay sum of money into court- Plaintiffs unable to secure loan for sum of money without discharging mortgage subject to current proceeding- Default- Insufficient evidence to show reason for discharge of undertaking.
CASES CITED:	Cutler v Wandsworth Stadium Ltd [1945] 1 All ER 103
PARTIES:	Teresa Starcevich (P1) Andrew Charles Roth (P2) Swart & Associates Pty Ltd (D)
FILE NUMBER(S):	SC 3961/06
COUNSEL:	R Macaulay (S) (P) Janet Swart (Director of defendant) in person
SOLICITORS:	Pryor Tzannes & Wallis (P)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Tuesday 5 December 2006

3961/06 – STARCEVICH v SWART & ASSOCIATES PTY LTD

JUDGMENT

1 HIS HONOUR: These are two motions to either set aside a condition of an order made by Justice White on 8 September this year or, alternatively, to discharge the injunction because the condition has not been fulfilled.

2 There is no doubt at all that Justice White came to the view there was a serious question to be tried as to whether the plaintiffs were entitled to equitable relief against the mortgagee from enforcing a mortgage because there was an unconscionable interest rate and unconscionable conduct. His Honour considered whether he should require payment into Court of the whole sum demanded by the mortgagee's condition of relief but he did not consider that was appropriate.

3 However, the plaintiffs proffered and his Honour accepted an undertaking that the plaintiffs would pay into Court within 14 days $45,000 plus interest at 9 percent per annum from 27 January 2005 to the date of payment to abide further order of the Court. It would seem that his Honour did that because there was no doubt at all that the $45,000 had been borrowed and that the plaintiffs were in default under the mortgage and that they had not made payments even of principal, let alone interest. Indeed, I am told by the director of the defendant from the bar table they only ever made one payment and that for $2,700 back in January 2005.

4 Where an undertaking is given to the Court, the Court usually is even less willing to give relief against the undertaking than in the case where the Court has made an injunction. This is because the undertaking, although it may have been given under some pressure, was given voluntarily; see Cutler v Wandsworth Stadium Ltd [1945] 1 All ER 103.

5 In the instant case the undertaking was given. At that stage both the plaintiffs were appearing in person and also the defendant by a director of the defendant company. The second plaintiff gave an undertaking to the Court on their behalf. He says, however, he has been unable to comply with it because at the time of making the undertaking, they, the plaintiffs, had secured an unconditional loan approval but they were not aware they would be unable to finalise the loan without discharging the second mortgage which is the subject of these proceedings and, in the absence of the discharge of the mortgage neither he nor the other plaintiff were able to raise the funding for the undertaking.

6 Unfortunately that is not sufficient for discharging an undertaking.

7 The final hearing is fixed before Justice Hamilton in February. Mr Macaulay, the solicitor appearing for the plaintiffs today, says if the injunction goes then the whole proceedings might become otiose because the property may be sold. However, it is rather doubtful whether, even if proceedings were commenced today to sell the property, it would be sold by February. However, the problem is theoretically present.

8 Mrs Swart, a director of the mortgagee who represented it today, endeavoured to put before the Court material that she said established that even if the Court exercised its equitable powers to reduce the mortgage interest rate, there still would not be enough equity at the level to satisfy the second mortgagee.

9 I was thinking at that stage it would be appropriate to stand the matter over until 14 December so that the defendant's defence could be put on and one could see the actual issues. However, Mr Macaulay objected to me considering that evidence and I think because of that very just objection I cannot do anything more than merely look at the case as to whether the Court should exercise its discretion and absolve the plaintiffs from giving the undertaking.

10 There is not sufficient material there to do that and not being able to consider any of the other matters, I accordingly have to dismiss the plaintiffs' notice of motion of 16 November 2006.

11 I make orders in accordance with the defendant's notice of motion and order the plaintiffs to pay the costs of both notices of motion. The injunction is now dissolved.

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