Vista Capital v Hussain - [2007] NSWSC 344

CITATION: Vista Capital v Hussain & Ors [2007] NSWSC 344

HEARING DATE(S): 15 March 2007

JUDGMENT DATE :
16 April 2007

JURISDICTION: Common Law Division

JUDGMENT OF: Studdert J

DECISION: The sums advanced by the plaintiff to the defendants were secured by registered mortgages AB448901 and AB448902. The question of costs is reserved.

LEGISLATION CITED: Real Property Act

CASES CITED: Manks v Whiteley (1912) 1 Ch 735
Nunn v Wily [2001] NSWSC 317
Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589
Smith v Chadwick (1881-82) 20 ChD 27

PARTIES: Vista Capital Pty Limited (Plaintiff)
Fahmi Hussain (1st Defendant)
Marej Hussain (2nd Defendant)

FILE NUMBER(S): SC 15409/05

COUNSEL: S. Velik (Sol) (Plaintiff)
D. Knaggs (Sol) Defendants

SOLICITORS: Velik Solicitors (Plaintiff)
Cross Law (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

STUDDERT J

Monday 16 April 2007

15409/05 VISTA CAPITAL PTY LIMITED v FAHMI HUSSAIN & ORS
JUDGMENT

1 HIS HONOUR: By statement of claim filed on 21 November 2005 the plaintiff, Vista Capital Pty Limited, claimed possession of premises from the defendants, Fahmi and Marej Hussain, and the plaintiff also sought to recover advances allegedly made to the defendants totalling $310,000. It was contended that these advances were secured by mortgages over the subject premises, namely two units in Cowper Wharf Road, Woolloomooloo. The plaintiff succeeded in obtaining judgment for possession and the writ of possession that issued has been executed.

2 There were in place three registered mortgages over the subject premises, the first mortgage being in favour of the Commonwealth Bank and the second and the third mortgages being in favour of the plaintiff. The properties have been sold and the bank has recovered what was due to it. The balance of the proceeds of sale are retained in an interest bearing bank account pending determination of the proceedings on foot between the plaintiff and the defendants.

3 On 8 February 2007 an order was made for the separate determination of the issue as to whether the sums advanced by the plaintiff to the defendants were secured by way of mortgage. This issue was squarely raised by part of the relief sought by the defendants by way of cross claim. There the defendants seek a declaration in these terms:

“That neither of the loan agreements is secured by registered mortgage AB448902F or B4489901H between the Hussains and Vista.”

4 The point at issue before me is a narrow one. There is no issue but that the plaintiff advanced the money to the defendants by two advances, the first of $260,000 and the second of $50,000. The issue is whether payment of those advances was secured by the registered second and third mortgages.

5 The relevant documentation was exhibited to the affidavit of Dimitri Amargianitakis sworn 17 May 2006:

(i) On 21 September 2004 the defendants signed a loan agreement for an amount of $260,000. That agreement provided for interest at 2.5% per month for the term of the loan 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: [2007] NSWSC 344
Decision Date: 16 April 2007

CaseChat Overview and Summary

Vista Capital Pty Limited, the plaintiff, sued Fahmi and Marej Hussain, the defendants, for possession of premises and recovery of sums advanced, which were allegedly secured by mortgages. The primary issue was whether the advances made by the plaintiff to the defendants were secured by the registered mortgages AB448901 and AB448902. The court was required to determine whether the mortgages effectively secured the advances, despite the absence of specific details in the mortgage documents. The defendants argued that the mortgages were ineffective as they did not specify the principal sum or the repayment terms, whereas the plaintiff contended that the intention of the parties to secure the advances was evident from the documentation and the circumstances surrounding the transactions.

The court considered the various documents executed by the parties, including the loan agreements, mortgages, and annexures, to ascertain the intention of the parties. The court found that the parties indeed intended for the advances to be secured by the mortgages, as evidenced by the loan agreements, acknowledgements, and other supporting documents. The court also noted that while the approved form of mortgage did not require the principal sum and repayment terms to be explicitly stated, it was proper to construe the contemporaneous documents together to determine their effect. The court held that the loans were effectively secured by the registered mortgages, as the intention of the parties and the circumstances of the transaction demonstrated a clear intent to secure the advances.

The court concluded that the sums advanced by the plaintiff to the defendants were indeed secured by the registered mortgages AB448901 and AB448902. The question of costs was reserved for further determination.

Orders