Westpac Banking Corporation v Chamaty

[2019] NSWSC 1365

Supreme Court

New South Wales

Medium Neutral Citation:	Westpac Banking Corporation v Chamaty [2019] NSWSC 1365
Hearing dates:	8 October 2019
Date of orders:	08 October 2019
Decision date:	08 October 2019
Jurisdiction:	Common Law
Before:	Ierace J
Decision:	1. Order pursuant to r 7.18 of the Uniform Civil Procedure Rules 2005 (NSW) that Lilianne Abdallah be removed as tutor of Domenic Jack Chamaty and that Steven Chamaty be appointed in her place. 2. Order pursuant to s 76 of the Civil Procedure Act 2005 (NSW) approving nunc pro tunc the entry of the Variation Deed between the plaintiff and the defendant in the form which appears at Annexure F of the Affidavit of Giuseppe Russo sworn 16 August 2019.
Catchwords:	CIVIL PROCEDURE – approval of settlement – by consent – whether the Court is satisfied that the settlement is beneficial to the person under legal incapacity – settlement approved
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 76 Uniform Civil Procedure Rules 2005, r 7.18
Cases Cited:	Permanent Trustee Company Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336 P Y v R J S [1982] 2 NSWLR 700
Category:	Procedural and other rulings
Parties:	Westpac Banking Corporation (Plaintiff) Domenic Chamaty bht Lilianne Abdallah (Defendant)
Representation:	Counsel: D Elliott (Plaintiff) S Chehade (Solicitor) (Defendant)   Solicitors: Minter Ellison (Plaintiff) Causidicus Legal (Defendant)
File Number(s):	2008/16295

Judgment

1. HIS HONOUR: By notice of motion filed on 19 September 2019, the plaintiff, Westpac Banking Corporation, seeks two orders, the first relating to a change of tutor of the defendant, Domenic Chamaty, and the second for the Variation Deed between the parties to be approved.

2. The application for approval of the variation is made pursuant to s 76 of the Civil Procedure Act 2005 (NSW) which provides that in the case of proceedings commenced on behalf of a person under legal incapacity, if an agreement for a compromise or settlement is made, the person under the legal incapacity is not bound by it unless it is approved by the court.

3. The defendant is a 26 year old man who has an intellectual disability. In 2009, he was assessed by Professor Susan Hayes, a clinical psychologist, who at the time was a Professor of Behavioural Sciences at the University of Sydney, and found to have a mild to moderate degree of intellectual disability. She concluded that Mr Chamaty satisfied the test of being incapable of managing his own affairs pursuant to the criteria set out by Powell J in P Y v R J S [1982] 2 NSWLR 700 at 702.

4. The background to this matter is that in 2008, the defendant was the registered proprietor of a residential property in Guildford, where he and his family had resided by then for some 21 years. His father had died in 2002 and at that time he lived in the property with his mother, Vera Chamaty, and his younger brother, Steven Chamaty.

5. In 2008, the plaintiff brought proceedings against the defendant by way of a statement of claim seeking the sum of $413,303.43 plus interest, in respect of the alleged failure of the defendant to comply with the terms of a mortgage over the property and loan contract entered into in 2007. When a solicitor retained by the defendant was unable to take instructions from him, proceedings were commenced for a tutor to be appointed. Lilianne Abdallah was appointed by Registrar Bradford of this Court on 21 August 2009 to be the defendant's tutor. The defendant, through his tutor, filed a cross-claim seeking that the mortgage and loan contract be set aside as unfair, unjust and unconscionable, relying upon provisions of the Contracts Review Act 1980 (NSW), the National Consumer Credit Protection Act 2009 (Cth) and remedies in equity.

6. On 30 May 2011, Hidden J of this Court approved a deed of settlement by the parties. The court's function in such a hearing as this is protective. In Permanent Trustee Company Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336, Hammerschlag J, referring to the legislative scheme in the Compensation to Relatives Act 1987 (NSW), observed at [29]:

“The principle is that for the court to grant approval for a compromise to be entered into by the disabled person it must form the view that it is beneficial to his or her interests. The compromise should be assented to by the tutor and there should be opinions from his or her legal advisors that they consider it to be so; re Birchall. The court will consider for itself whether the compromise will be beneficial to the disabled person; Somerset v Ley [1964] 1 WLR 640; sub nom Re Leys Trusts [1964] 2 All ER 326.”

7. Tendered in support of the orders sought by counsel for the plaintiff are submissions which rely upon and refer to an affidavit of Giuseppe Russo sworn on 16 August 2019 in support of the notice of motion. The affidavit has attached to it a copy of the deed that was approved by Hidden J in 2011 and the variation sought.

8. The original deed of settlement provided that the defendant remain liable to the plaintiff for a sum equivalent to approximately one quarter of the value of the property. The deed of settlement provided that the amount owing would not be realised until one or more of certain circumstances occurred, which included the sale of the property or the death of the defendant.

9. The effect of the variation is to relieve the defendant of any liability in any circumstances as a result of the mortgage and loan agreement. A new clause will be inserted replacing an existing clause, the new clause reading as follows:

“The bank releases and discharges [the defendant] from any and all claims which the [the plaintiff] has or may have had against [the defendant] by reason of or arising out of or related directly or indirectly to in whole or in part out of all matters and facts and circumstances giving rise to this deed and/or the proceeding.”

10. It is obvious that such a provision is in the interests of the defendant. Accordingly, in relation to the second order sought, I am satisfied that the variation of the settlement deed is in the best interests of the defendant.

11. In relation to the first order that is sought, attached to the affidavit of Mr Russo is a letter from the defendant’s previous tutor, Lilianne Abdallah, dated 23 August 2018 and addressed to Sandy Chehade, in which she states that she relinquishes her appointment as tutor in order to allow Steven Chamaty to be appointed as his tutor.

12. In all the circumstances, I am satisfied that the change of tutor is appropriate. I am told that Ms Abdallah is a trusted friend of the Chamaty family and the proposed change in no way reflects upon the way in which she has carried out her duties over approximately the 10 years of her holding that position.

13. Steven Chamaty is the younger brother of the defendant and, on the material before me, appears to be very capable of taking on that role. Accordingly, I make orders as sought in the terms of orders 1 and 2 on the notice of motion that was filed on 19 September 2019. I return to the plaintiff the copy of the affidavit of Giuseppe Russo sworn on 16 August 2019 which was read this morning.

**********

Decision last updated: 10 October 2019