Villafuerte v Ahmed

[2010] VCC 874

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE
CIVIL DIVISION

COMMERCIAL – GENERAL DIVISION

Case No. CI-10-02063

MERRYL Y VILLAFUERTE	Plaintiff
v
AWAAD SAYED MOHAMED AHMED	First Defendant
and
MANDEEP SINGH JOHAL	Second Defendant

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JUDGE:	HIS HONOUR JUDGE GINNANE
WHERE HELD:	Melbourne
DATE OF HEARING:	15 July 2010
DATE OF JUDGMENT:	16 July 2010 Revised 27 July 2010
CASE MAY BE CITED AS:	Villafuerte v Ahmed & Anor
MEDIUM NEUTRAL CITATION:	[2010] VCC 0874

REASONS FOR JUDGMENT

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Catchwords: Freezing Order – Count Court Civil Procedure Rules 2008; Rule 37A – Good arguable case not established – application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Applicant	Mr P Bradley	Porto Grace & Drew Lawyers
For the First Defendant/	Mr S E Marantelli	Agricola, Wunderlich &
Respondent	Associates
HIS HONOUR:

1          The plaintiff/applicant, by a Summons dated 14 May 2010, sought a freezing order under Rule 37A which came before the Court in May, and thereafter in June 2010. The application was served on the respondent and was ultimately argued on 15 July 2010 and I reserved my judgment.

2          The proceeding concerns the sale of a property in Greenvale which did not proceed to settlement. The applicant pleads the payment of a $46,000 deposit to the agent. The Contract of Sale was subject to the applicant obtaining approval for a loan of $750,000 from any financial lending institution with which to purchase the property by 27 October 2009.

3          The applicant’s case, as pleaded in the Statement of Claim, is put this way: that the applicant used her best endeavours to obtain a loan and that she requested an extension of time from the respondent to obtain the loan and he extended the approval date to 10 November 2009. Thereafter, pursuant to General Condition 14.2 of the Contract, the applicant notified the respondent that she had been unable to obtain a loan to fund the purchase of the property and therefore validly ended the Contract and is entitled to a refund of the deposit. Condition 14 provided:

“14.1 If the particulars of sale specify that the contract is subject to a loan being approved, this contract is subject to the lender approving the loan on the security of the property by the approval date or any later date allowed by the vendor.

14.2 The purchaser may end the contract if the loan is not approved by

the approval date, but only if the purchaser:

(a) immediately applied for the loan; and

(b)	did everything reasonably required to obtain approval of the loan; and
(c)	serves written notice ending the contract on the vendor within 2 clear business days after the approval date or any later date allowed by the vendor; and
(d)	is not in default under any other condition of this contract when the notice is given.

14.3 All money must be immediately refunded to the purchaser if the

contract is ended.”

4          The first defendant/respondent notified the plaintiff/ applicant that he refused to accept the applicant ending the agreement and would not return the deposit. On 19 January 2010, the respondent served a default notice on the applicant under the Contract but the applicant contends that the notice was invalid and the respondent has no right to retain the deposit.

5          The application is made under Rule 37A. Under Rule 37A.05, the Rule applies if an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in the Court. If that is established then under sub-rule (5)(4), the Court may make an order, if it is satisfied that there is a danger that the prospective judgment will be wholly or partly unsatisfied because of circumstances which include, the absconding of the prospective judgment debtor or perhaps more relevantly here, the prospect that the assets of the prospective judgment debtor or of another person may be removed from Australia, or from a place inside or outside Australia or to be disposed of, or dealt with or diminished in value.

6          The applicant bears the onus of making out a case for a freezing order. The observations I make hereafter are made on the basis of the affidavits and are not intended to reflect on the manner in which the case may be decided at trial if further evidence is presented.

7           Four affidavits were filed in connection with the application, one by the applicant, one by her solicitor, Mr Bradley, exhibiting relevant correspondence and giving background material and two on behalf of the respondent.

8          The applicant swore an affidavit in support of the application, stating why she said that the loan approval had been extended. She also stated that the property had been resold to another buyer and that she feared that without a freezing order the proceeds will immediately leave the country and that it will be beyond her ability to recover the deposit. The applicant’s affidavit states that her conveyancer sent a request for an extension of time for settlement until 10 November 2009 and that she was never told that there was a problem with the finance clause being extended. However, there is no evidence before the Court establishing that that extension was agreed by the respondent.

9          The affidavit of Mr El-Kharibi of 13 July 2010 filed on behalf of the respondent discloses that the respondent is hospitalised or obtaining rehabilitation in Dubai as a result of an accident. Mr El- Kharibi holds his enduring power of attorney. It also discloses that the selling agent’s commission and advertising expenses have been paid from the $46,000 deposit and a sum of $28,260 was disbursed to the respondent. The property has been re-sold and settlement is to occur in October.

10        There is also an affidavit sworn by Mr Celtek, a licensed conveyancer, who acted on behalf of the respondent in connection with the sale of the Greenvale property. He exhibits correspondence with the applicant’s conveyancer, including a letter of 9 November 2009 stating that the Contract had become unconditional as of 30 October 2009. The effect of his affidavit is that no extension of time to obtain finance was granted. He also states that he attended at settlement on the date fixed for settlement, 15 January 2010, but that the applicant did not attend.

11        The question that I have to be satisfied about in the first instance is whether there is a good arguable case. I am not satisfied that the applicant has made out such a case on the affidavit material before me. I am not satisfied that the allegation contained in paragraph 8 of the Statement of Claim, namely that the time in which the applicant might obtain finance was extended to 10 November 2009, is supported by any material before the Court.

12        I also do not consider that, on the material before me, it can be said that the applicant did everything reasonably required to obtain approval of the loan. In addition to the correspondence from the applicant’s conveyancer, I refer, in particular, to the relevant documents which are exhibited to the applicant’s affidavit, including a response on 4 November 2009 from the Bank of Western Australia to a request for $1 million, which was obviously substantially in excess of the sum of $750,000 that was required under the Contract. Seeking a larger sum than the loan required to complete the Contract does not appear to be doing everything reasonably required to obtain approval of the loan within the requirements of Condition 14.2(b).

13        I do not consider that the requirement of a danger of removal of or disposal of funds in a way that would defeat a potential judgment has been established. Mr El-Kharibi’s affidavit discloses that the respondent is his cousin and conducts a spare parts export/import business in Australia and his son is engaged to marry Mr El-Kharibi’s daughter in October. A substantial part of the deposit paid by the applicant has already been disbursed. The property has been resold, with settlement in October. The respondent is overseas because of his accident. Whilst there is some risk of a disbursal of funds to defeat a judgment, the reality is that a substantial part of the deposit has already been disbursed and the respondent conducts a business in Australia.

14        However, the major consideration is that a good arguable case has not been established. I therefore refuse the freezing order and dismiss the Summons of 14 May 2010.

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