These proceedings, commenced on 11 October 2023, seek possession of land at [REDACTED] Ocean Street North, Bondi ("Ocean Street") and [REDACTED] Francis Street, Bondi ("Francis Street"), leave to issue a writ of possession in respect of each property, as well as charges and expenses in accordance with the loan agreement and mortgage arrangement entered into in May 2015. The defendant named in the statement of claim, Faina Stolyar ("Faina"), was the borrower under the loan agreement dated 8 May 2015, and provided a mortgage over both properties. That mortgage secured the amount advanced by the plaintiff ("the Bank") under the loan agreement.
The statement of claim alleged that as at 9 June 2023, repayments due under the agreement but not made totalled over $58,000.00 and a default notice requiring the default to be remedied was issued on 14 June 2023. Faina did not comply with the notice.
On 6 September 2022, Markovic J had made orders affecting the Ocean Street property, declaring that the transfer of the legal title in the Ocean Street property to Faina by her son Ian Stolyar, a bankrupt, effected on or about 20 March 2013, was void as against the trustee in bankruptcy. Her Honour also made a declaration that Faina held the legal title to Ocean Street on trust for the trustee in bankruptcy.
There were facilitative orders made by Markovic J requiring Faina take all necessary steps to enable the transfer of Ocean Street to the trustee but as I understand it, that did not occur. (Faina is the elderly mother of Ian Stolyar. He purported to "speak for her" at the directions hearing on 13 May 2024 when the matter first came before me for directions).
A defence affirmed by Faina, citing her occupation as "Director", was filed on 6 March 2024 in which she admitted that the Bank provided credit pursuant to the loan agreement in the sum of $1,480,000.00, that she agreed to repay the amount under the agreement with interest, charges and expenses over the term of the agreement, that she would make repayments under the agreement, and that she was issued with a default notice requiring the default to be remedied. She also admitted that she was the registered proprietor of Francis Street, but asserted that she was not in possession of Ocean Street at the time of the default notice, (9 June 2023), because the trustee in bankruptcy was in possession by virtue of orders made in the Federal Court on 6 September 2022.
The defence further alleged that the Ocean Street property "fully extinguishes any liability under the mortgage," that the Ocean Street property is the "responsibility" of the trustee in bankruptcy and that the Federal Court orders "prevented" Faina from paying any money to the plaintiff as required under the agreement.
None of these assertions have the legal effect contended for in the defence.
The matter was listed for directions before the Common Law Registrar on 17 April 2024. Faina appeared in person "assisted" by Ian Stolyar. A solicitor, Mr Mustafa, appeared for the plaintiff. I do not have a transcript of that appearance, but I understand that the only orders made were that the matter be listed before me on 13 May 2024 and that any proposed draft amended defence was to be served by 6 May 2024.
No leave was given for an amended defence to be filed.
Despite the fact that no leave was given, Faina prepared, or more likely it seems, her son Ian Stolyar prepared, a document titled: "Amended Defence Pursuant to Orders Made on 17 April 2024". That title appears to have misled counter staff into accepting the document for filing. The "Amended Defence" is defective in form as no leave was given to file it. It was also not duly verified but instead attached the affidavit that was attached to the March 2024 defence.
On 6 May 2024, a solicitor for the trustee in bankruptcy filed an "Appearance".
On 13 May 2024, Mr Mustafa appeared for the Bank and Faina appeared in person, but her son Ian Stolyar purported to speak for her. At the commencement of the directions hearing, I had no information regarding the history of the matter and the issues regarding Ian Stolyar's bankruptcy and its relevance to at least one of the properties the subject of the proceeding. None of this was evident on the limited material on the file. A Mr Reardon appeared in the interests of the trustee in bankruptcy of the estate of Ian Stolyar and his wife Beth Nguyen.
Mr Mustafa sought an order that the "defence" be struck out as it does not disclose a defence. In answer to questioning from the Court, Mr Mustafa clarified that he was referring to the amended defence purportedly filed on 7 May 2024.
Mr Reardon provided a copy of the orders made by Markovic J in September 2022 for context. Mr Reardon indicated that the trustee had no objection to orders being made granting the Bank possession over both the properties referred to in the statement of claim.
In answer to questions from the Court, Ian Stolyar confirmed that there had been no payments made to the Bank since June 2023, and that the trustee was receiving rent from the Ocean Street property, and Faina was receiving rent from the Francis Street property. I observed Faina to appear to be very elderly and that she seemed to have difficulty following the proceedings, judging by her confused facial expressions. (I was only told at the very end of the directions hearing that Faina has a hearing impairment and so arrangements were made for a hearing loop to be provided for the next directions hearing and, on that occasion, I observed Faina to understand the nature of the proceedings and her role in them.)
When asked why the Bank ought not be able to take possession of both properties, Ian Stolyar asserted that the bank has failed to provide the "lending file" despite request, and that Faina could not make a repayment because of the orders made by Markovic J which "took away the rent".
The "Amended Defence" of 6 May 2024 made assertions of breaches of the National Consumer Credit Protection Act 2009 (Cth) ("the Act"), but as correctly asserted by Mr Mustafa, the Act would, at most, provide for a civil penalty; it would not make the loan agreement or mortgage void.
I made orders that the amended defence was "unfiled" and had the status only of a proposed amended defence, and that the Bank was to advise Faina as to whether it consented to the filing of the amended defence. I ordered that the Bank file an affidavit annexing the relevant loan documents and evidence in support of the orders it sought and that Faina was to file and serve an affidavit setting out the reasons why she claims not to be liable to pay the money due under the mortgage.
On 20 May 2024, helpful written submissions were provided by counsel for the Bank. It was submitted, correctly, that the extant defence, filed on 6 March 2024 conceded entitlement to possession and effectively conceded that the Ocean Street property should be sold to repay Faina's liability under the mortgage.
On this basis, at the directions hearing on 28 May 2024, the Bank sought judgment for possession of the Ocean Street property pursuant to r 17.7(1) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR").
Rule 17.7 provides:
17.7 Judgment on admissions …
(1) If admissions are made by a party, whether by his or her pleadings or otherwise, the court may, on the application of any other party, give any judgment or make any order to which the other party is entitled on the admissions.
(2) The court may exercise its powers under this rule even if the other questions in the proceedings have not been determined.
Faina provided an affidavit affirmed 27 May 2024. She cited her occupation as "Retired." Amongst other assertions, Faina asserted that the Ocean Street property would be enough to clear the debt due to the Bank, and that if the Bank also took possession of the Francis Street property, it would leave her "homeless".
At the directions hearing on 28 May 2024, Mr Collins of counsel appeared for the plaintiff and a Mr Edney appeared in the interests of the trustee. Faina appeared with Ian Stolyar who purported to again speak for his mother. Given what I by then understood regarding the background to the matter, I advised Ian Stolyar that he would not be permitted to speak for his mother and that with the assistance of a hearing loop, I would be asking her questions on oath to clarify that she understood the proceedings and her role in them.
I ascertained that she lived at an address in Point Piper which she owned and that her son, daughter-in-law and granddaughter also lived there. Faina confirmed that she was able to hear with a combination of the hearing loop and lip reading. She is 83 years old. She said that her son prepared her affidavit of 27 May, but that she had told him what to say in the affidavit, and she had read it and signed it. She had an understanding that the proceedings concerned the Ocean Street and Francis Street properties and that she really wanted to keep Francis Street. She had said in her affidavit that the trustee was trying to make her "homeless" because she was under the impression that there were steps afoot regarding the Point Piper unit in which she lived and that the trustee was trying to sell that property. She said that she did understand that the current proceedings in the possession list did not involve the Point Piper unit but explained that effectively, Francis Street was the only place she owned that was her "own place, Mr Scott [the trustee] does not claim" and so if that was also taken in these proceedings, she would have nowhere to live.
The Bank through its counsel Mr Collins indicated that it had modified its position to currently confine the orders it sought to the Ocean Street property only, but reserving its position in respect of Francis Street, and the balance of the proceedings to a later date.
An affidavit of Ms Tegan Valente affirmed 22 May 2024 annexed the necessary confirmatory documents evidencing the loan agreement and its terms. Based on that affidavit, the statement of claim and the admissions made in the defence verified by Faina in March 2024, as well as the matters deposed to in her affidavit, I decided that the order sought by the Bank for possession of Ocean Street pursuant to r 17.7 UCPR (as opposed to judgment by default), should be made.
Mr Edney sought facilitative orders regarding potential steps the trustee may wish to take to protect any interest it holds in respect of the properties, hence order 1 below.
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Orders
I made the following orders:
1. The Trustee in Bankruptcy of the Estate of Ian Stolyar and Beth Nguyen has leave to file and serve a notice of motion seeking to be joined by way of party to the proceedings to the extent relevant and for any associated order in the nature of a Harman order on or before Tuesday 18 June 2024, with a copy of that motion to be filed and served upon any potentially interested party or person and a copy to be provided by email to the chambers of Lonergan J.
2. I list the matter for directions on Tuesday 15 October 2024 at 9:30am.
3. Pursuant to r 17.7(1) of the Uniform Civil Procedure Rules 2005 (NSW), judgment in favour of the plaintiff for possession of the whole of the land in folio identifier [REDACTED] situated at and known as [REDACTED] Ocean Street North, Bondi in the state of New South Wales.
4. Liberty to apply on 3 days' notice by email to the Associate to Lonergan J.
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Decision last updated: 12 June 2024