Bendigo and Adelaide Bank Limited v Stolyar

Legislation Cited: Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited: Perpetual Corporate Trust Ltd v Ip [2024] NSWSC 728

Category: Principal judgment

Parties: Bendigo and Adelaide Bank Limited (Plaintiff)
Faina Stolyar (Defendant)

Representation: Counsel:
M Collins (Plaintiff)
Solicitors:
Dentons Solicitors (Plaintiff)
F Stolyar (Self-Represented)

File Number(s): 2023/00321951

Publication restriction: Nil

REVISED EX-TEMPORE JUDGMENT

1. These proceedings were commenced by statement of claim on 11 October 2023. In that statement of claim, the Bank sought possession of land at [REDACTED] Ocean Street North, Bondi and [REDACTED] Francis Street, Bondi and leave to issue a writ of possession in respect of each property. The statement of claim also sought charges and expenses in accordance with the loan agreement and the mortgage agreement that were both entered into in May 2015.

2. The defendant named in the statement of claim, Faina Stolyar, was the borrower under the loan agreement dated May 2015. She provided a mortgage over both properties. It is clear the mortgage secured the amount advanced by the plaintiff under the loan agreement. I know that because on 28 May 2024 evidence of that was tendered when I heard an application for possession of the Ocean Street property. At that time I examined the evidence of the agreements appended to the affidavit of Tegan Valente affirmed 22 May 2024 that was in support of that application.

3. A default notice had been issued in respect of the properties requiring remediation on 14 June 2023 and there was no compliance with that notice, hence the proceedings were commenced.

4. A defence was filed by the defendant on 6 March 2024 in which various key admissions were made. In particular, admissions were made that the loan sum had been advanced, that she had agreed to repay the sum, and that she had been issued with the default notice.

5. I should note that at no stage during the proceedings before me was the defendant legally represented. That appears to have been a conscious choice. On occasion Mr Stolyar, the defendant's son, sought to appear for his mother but I found in my exchanges with the defendant, Mrs Stolyar, she was perfectly able to understand the proceedings, (with the assistance of a hearing loop) and understood why they were brought, their nature and her role in them.

6. The bank proceeded pragmatically to confine itself to judgment for possession in respect of only one of the two properties the subject of the statement of claim, that is the Ocean Street North property, but reserved its position in respect of the Francis Street property.

7. I should note that on 28 May 2024 I gave leave to the trustee in bankruptcy of the estate of the defendant's son, Ian Stolyar (and his ex-wife) to file and serve any notice of motion, if it sought to be joined to the proceedings. According to the court file that never occurred.

8. On 24 February 2025 an email was forwarded to my Chambers and the defendant from the solicitor for the Bank, enclosing an affidavit of Mr Mustafa, a solicitor for the bank, updating the Court regarding the developments in respect of the properties, as well as short written submissions in support of an oral application for the Bank to have leave to discontinue the proceedings on certain terms. The accompanying email made it clear that an oral application would be made the following day, that is 25 February 2025, when the matter was listed for directions before me.

9. I note that this is a proper course to take, given that the Possession List Practice Note does not allow for notices of motion to be filed without leave, and generally directions and applications regarding possession matters are dealt with using as little formality as is reasonable without incurring unnecessary legal costs and expenses.

10. Because the material had been provided to the defendant and the Court only the night before, I took the view on 25 February 2025 that it was appropriate to explain to Mrs Stolyar that I would adjourn the date so that she could consider her position, understand the orders being sought and appear on a later occasion at which point I would hear argument as to whether and on what terms the discontinuance should be permitted.

11. Initially the date agreed on was 11 March 2025, but that date had to be adjourned due to the Court's other commitments, and a further agreed date was fixed (today 2 April 2025).

12. At the close of the directions hearing on 25 February 2025 I made it clear that on that next date I will deal with the application foreshadowed in the Bank's solicitor's email, and gave the listing a half hour estimate.

13. At 5:35pm yesterday, an email arrived in chambers copying in the solicitors for the Bank advising that the defendant had had “some disappointing news that has made me feel unwell” and stating that she did not feel that she would be fit and well to appear in court tomorrow. The email also asserted: “I would like some time to get some legal advice of what I can do in the situation that I am in”.

14. In terms of an indication in respect of the Bank's application to discontinue, the following is stated:

“I would consent to the discontinuation of the proceeding, if the bank agrees to credit back the legal costs that they charged to my mortgage as I do not believe it was necessary to start legal action in court. I have tried to come to an arrangement with the bank's solicitors, however, they have refused my compromised position. I respectfully ask if her Honour would be mindful to adjourn the proceedings by a couple of weeks.”

15. I requested my Associate to send an email to the parties in which it was explained that the proceedings were adjourned on the last occasion to allow time for the defendant’s preparation of and a response to the application foreshadowed by the plaintiff and that no affidavit material has been filed on the defendant's behalf. The email also noted any application for adjournment must be made in person at 9:30am today with appropriately verified evidence to support the alleged reason for requesting an adjournment. The email also said that there should be no assumption made that an adjournment will be granted, and that it was suggested that the parties should appear and be ready to run any outstanding argument in the proceedings or respond to any such argument.

16. This morning at 8:29am a further email was provided to Chambers, copying in the solicitors and counsel for the Bank. The following relevant matters were stated:

“Please let her [Honour] know that the defendant consents to the discontinuation of the proceedings as long as the legal costs associated with this proceedings are charged back to the loan account. The defendant believes that the [REDACTED] Ocean Street property could have been sold with the consent of the defendant without incurring unnecessary legal and court costs. The defendant apologises for not being able to attend the court today.”

17. The hearing was listed for 9:30am. At 9:40am the matter was called outside the courtroom. There was no appearance for the defendant.

18. The affidavit of Mr Mustafa read today on the application for discontinuance on particular terms outlined the progress of matters since the matter was last before me. Pursuant to the orders I made on 28 May 2024, the Ocean Street property had been handed over to the New South Wales Sheriff. Contracts were exchanged for the sale of that property on 16 December 2024 and the sale was to be completed in February 2025.

19. On 20 February 2025 correspondence was forwarded by the Bank’s solicitor to the defendant proposing the discontinuance. A response from Mr Stolyar of the same date complained about various aspects of the sale of the Ocean Street property and various other matters associated with the activities of the trustee in bankruptcy, threatening to file other legal proceedings, including injuncting any sale of the Francis Street property and asking that the trustee be removed.

20. Of course this Court is concerned with the issues that are properly before it which comprise a successful application for possession of one of the two properties referred to in the statement of claim in circumstances where the Defence filed admitted the elements relevant failure to pay the mortgage and so potentially a basis for a writ of possession for both properties if the debt and accrued interest could not be satisfied by the sale of only one.

21. The Bank took the pragmatic approach of seeking possession of only one property to satisfy the judgment debt. This was an appropriate approach to take, and one that is reflective of compliance with the requirements of the Civil Procedure Act 2005 (NSW).

22. As outlined in the succinct written submissions provided by counsel for the Bank, given that the Francis Street property has now been placed in the hands of the receiver and those processes have taken their own course, it is no longer necessary for the Bank to pursue the remaining relief sought in the proceedings, being possession of the Francis Street unit. In order to avoid unnecessary costs being incurred, the Bank appropriately seeks to discontinue the proceedings.

23. The Uniform Civil Procedure Rules 2005 (NSW) r 42.19 applies to the consideration of costs in proceedings that are discontinued by a plaintiff. Sub rule (2) provides that:

“Unless the Court orders otherwise, the plaintiff must pay such of the defendant's costs as at the date on which the notice of discontinuance was filed, have been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued.”

24. This provision makes it clear I have a discretion to “otherwise order”.

25. Counsel for the Bank argued that it is appropriate in this case that the Court order that there be no order as to costs, with the intention that the defendant is not entitled to recover costs and that the plaintiff is entitled to recover its costs pursuant to the terms of its mortgage.

26. I accept the principles governing such an application as summarised by Davies J in Perpetual Corporate Trust Ltd v Ip [2024] NSWSC 728 at [13]. In that case Davies J, who was for many years the Possession List Judge, granted leave to discontinue with no order as to costs in circumstances where the subject property has been sold.

27. Counsel for the plaintiff submits that it is appropriate to depart from the usual position in circumstances here where, first, the plaintiff was successful in obtaining judgment for possession of the Ocean Street property, second, the sale of the Francis Street property by the receiver is a supervening event which rendered the remaining claim for possession of the Francis Street property futile; third, in order for the Court to form the view that the plaintiff should somehow be penalised as to costs I would need to be satisfied that the plaintiff's conduct was so unreasonable as to warrant the costs order when seeking to discontinue (and I interpolate that I am not so satisfied in this case). Fourthly, the defendant appeared self-represented and has not incurred any of her own legal costs.

28. Nothing at all has been placed before me by the defendant that would provide any basis to consider a different costs order, or to even understand the basis upon which the defendant asserts that she would have given possession of the property at Ocean Street North without the commencement of legal proceedings.

29. I find that each of the four arguments made by counsel for the Bank persuasive and accordingly, am prepared to make orders in the form sought by the plaintiff Bank.

30. I note that the proceedings were conducted by the solicitor and counsel for the Bank with as little fuss and formality as was possible, on my observation, and with appropriate comity and pragmatism.

31. In all those circumstances it is appropriate to make the following orders:

32. Pursuant to r 12.1(1) of the Uniform Civil Procedure Rules 2005 (NSW) the plaintiff is granted leave to discontinue the whole of the proceedings.

33. Pursuant to r 42.19(2) of the Uniform Civil Procedure Rules 2005 (NSW) the proceedings are discontinued with no order as to costs.

34. The Court notes that the plaintiff relies on the terms of the loan agreement and mortgage the subject of the proceedings to recover its costs in connection with the proceedings.

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