Connam Pty Limited as Trustee for Christodoulou Family Trust v George Lazarou and Ors

Supreme Court of NSW|2020-04-15|Before: Johnson J, Schmidt J, Walton J, Lonergan J

Judgment

JOHNSON J: By Notice of Motion dated 9 April 2020, the Plaintiff, Connam Pty Limited as Trustee for the Christodoulou Family Trust, seeks the issue of a writ of restitution with respect to property at 2 William Street (also known as 2A William Street), Strathfield South ("the Strathfield South property"). The Defendants in the proceedings are George Lazarou, Andreas Lazarou and Sofia Lazarou.
In circumstances to be outlined shortly, the Court is determining the Plaintiff's Notice of Motion on the papers.
Read for the Plaintiff in support of the Notice of Motion is the affidavit of Con Christodoulou dated 9 April 2020 and a further affidavit of Mr Christodoulou which contains a chronology of relevant events.

Chronology of Events Until 3 March 2020

On 15 February 2019, the Plaintiff filed a Statement of Claim which sought possession of the Strathfield South property. The Defendants were guarantors of a loan made to George Lazarou in July 2017 which was secured by mortgage over the Strathfield South property. Andreas Lazarou and Sofia Lazarou are the parents of George Lazarou. The Plaintiff alleged that default under the loan agreement and mortgage had occurred thereby entitling the Plaintiff to take possession of the property.

Events on 3 March 2020

The writ of possession was scheduled for execution by the Sheriff on 3 March 2020.
On the morning of 3 March 2020, George Lazarou approached the Duty Registrar and the matter was referred to me as Common Law Duty Judge, on the basis that there was an urgent application for stay of execution of a writ of possession. The Court file was in archives and was not available. All that was available to the Court at that time were the judgments of Lonergan J delivered on 18 September 2019 and 19 December 2019 which were located on Caselaw.
George Lazarou appeared in Court, without legal representation. He did not inform the Court that he was bankrupt. A Notice of Motion brought in the name of Andreas Lazarou sought a stay of execution of the writ of possession. He relied upon an affidavit of Andreas Lazarou sworn 3 March 2020. The affidavit of Andreas Lazarou stated that he was 81 years old and that he had lived at the Strathfield South property with his wife for some 42 years. The affidavit stated that the Defendants had been informed by a broker that they would have unconditional loan approval to pay out the loan by 13 March 2020 and that "settlement can take place within 14 working days".
Efforts were made, unsuccessfully, to contact Ms Chambers, the solicitor for the Plaintiff, so that she could appear on the urgent application. Those attempts included a call made by my Tipstaff to Ms Chambers' office phone number which was unanswered.
I determined to grant a stay of execution of the writ of possession until 17 March 2020 and stood the proceedings over for further mention before me on 24 March 2020. In a short judgment delivered that day, I said (at [5]-[10]): "5. The timing of the application is less than satisfactory, it being made on the morning when Sheriff's officers are in fact at the premises at Strathfield South for the purpose of executing the writ of possession. Mr Lazarou has informed the Court that the timing of this application is the product of the offer of finance only being available yesterday, a fact confirmed by the date on the letter of offer itself. 6. Mr Lazarou has attempted to contact the solicitor for the Plaintiff, as has my tipstaff, without success. Mr Lazarou has spoken to Mr Con Christodoulou and has told him that the application is being made. Mr Christodoulou's response, I am informed, unsurprisingly was, 'Why didn't you tell me that yesterday?' 7. The position then is that a family home long held by the Lazarou family will be the subject of the execution of a writ of possession unless the Court makes an order now. What is sought is a stay for a period of 14 days from today. 8. I am prepared to grant the stay sought in the circumstances of the matter, despite its late timing. The matter will come back before me in three weeks' time, at which time there will be an assessment of what the position is and with the Plaintiff having been notified of today's orders and appearing before the Court on that occasion, hopefully to indicate that Mr Lazarou's expectations have come to pass. 9. I make the following orders: 1. I stay the execution of the writ of possession referable to premises at 2 and 2A William Street, Strathfield South until 4.00pm on Tuesday 17 March 2020. 2. I stand over the proceedings for further mention before me at 9.30am on 24 March 2020. 3. I direct that Mr Lazarou inform the Plaintiff by email of the fact that this order has been made, with emails to be sent to the solicitor for the Plaintiff, DC Chambers & Associates, and Mr Con Christodoulou. 10. Clearly, the Sheriff's officers will need to be told immediately that the Court has made these orders."

Events After 3 March 2020

On the afternoon of 16 March 2020, George Lazarou contacted my Associate by telephone. In circumstances where there seemed to be a desire to make some further application to the Court, I directed that the matter be listed before me at 9.30 am on 17 March 2020 and my Associate emailed Ms Chambers, the solicitor for the Plaintiff, informing her of this listing.
What followed when the matter came before the Court on 17 March 2020 is explained at [7]-[11] of the judgment which I delivered that day: "7. This morning Ms Chambers appears for the Plaintiff and Mr Vasta appears for the Defendants, including Mr George Lazarou, who is in Court. 8. The Court was informed that, by 9.42am on 3 March 2020, the Sheriff had in fact executed the writ of possession and taken possession of the property. So much is indicated in the communication to the solicitor for the Plaintiff of the receipt for possession issued by the Sheriff. 9. As a result, by the time the Court granted a stay at about 11.20am on 3 March 2020, there was no purpose or legal effect in the grant of the stay. The writ for possession had been executed and was spent. The Plaintiff had taken possession of the property. The Defendants had no entitlement to remain on the property. As a matter of law, they had been excluded and could not retake possession without some lawful authority. 10. It was not until this morning that the Court learned of this state of affairs. Indeed, the position is that, after 3 March 2020, the Defendants have re-entered the property and have apparently changed the locks. They are presently in occupation of the property contrary to law. 11. If George Lazarou had any doubt about the situation which had developed that day and the stay which I had granted (not knowing that the writ had already been executed), he ought to have obtained urgent legal advice or approached the Court. No such step was taken. A process of self-help undertaken in those circumstances was quite inappropriate."
The Court was informed that the Plaintiff was prepared to allow the Defendants an opportunity to obtain funds in the amount of $2,150,000.00 to permit the discharge of the mortgage and the paying out of the Plaintiff by 9 April 2020.
Mr Vasta, solicitor, appeared for the Defendants and made application for a stay. With respect to the status of the Strathfield South property between 17 March and 9 April 2020, my judgment of 17 March 2020 records the Court's position (at [14]-[17]): "14. Mr Vasta submitted initially that the Court should grant a stay to the Defendants until 9 April 2020. There is no purpose in staying the execution of a writ which has already been executed. Mr Vasta accepted that proposition, and what has been offered in the end is an undertaking to the Court that refinancing will be obtained and the debt to the Plaintiff paid out by 9 April and, if that does not happen, that the property will be vacated. 15. I should observe, at this point, that what has happened in this case occurs from time to time in Possession List proceedings. A writ of possession is executed and a Plaintiff takes possession of a property under the order of the Court. If the Defendant purports to retake possession, then the next procedural step for the Plaintiff is to obtain a writ of restitution, which is a recognised procedure where, after entry by the Sheriff under a writ of possession, a Defendant forcibly resumes possession of the subject land and the Plaintiff seeks to have the possession restored. It is a writ in aid of another writ of execution for the purpose of rule 39.1(1)(g) Uniform Civil Procedure Rules 2005. The procedure with respect to the issue of a writ of restitution was considered by me in Perpetual Limited v Kelso and Anor [2008] NSWSC 906 at [19]-[22]. 16. As things presently stand, the Plaintiff would be entitled to make application to the Court for the issue of a writ of restitution. The Defendants would have no foundation to resist it and the Defendants would be required to leave the property which they have unlawfully re-entered. 17. However, Ms Chambers sensibly takes the approach that yet another Court application and additional court fees ought be avoided. The practical effect of the proposed arrangement is that the Defendants will remain in the Strathfield property until 9 April 2020. The fact that this will be the position is because of the agreement between the parties and not because of any order of the Court."
The Court made clear that this was a final opportunity for the Defendants to resolve the matter. I noted the undertaking on behalf of the Defendants that they would vacate the Strathfield South property by 9 April 2020. However, for more abundant caution, I directed that the proceedings be listed before me at 9.30 am on 15 April 2020 to allow the Plaintiff to bring an application for issue of a writ of restitution if that course was necessary.

Application is Made for Issue of Writ of Restitution

On 9 April 2020, Ms Chambers furnished to my Associate, and served on the solicitor for the Defendants, the present Notice of Motion which seeks the issue of a writ of restitution.
On 14 April 2020, the solicitor for the Defendants informed the Court that the relief sought in the Notice of Motion was not opposed. Mr Vasta noted that the Court was to deal with the matter on the papers and in Chambers, without the need for a court hearing or appearance of the parties.
Against this background, it is appropriate for the Court to deal with this application on the papers given the present restrictions upon Court operations by reason of the COVID-19 pandemic.
I am well satisfied that a proper foundation has been demonstrated for the issue of a writ of restitution in this case. In Perpetual Limited v Kelso and Anor [2008] NSWSC 906 at [19]-[22], I said with respect to the remedy of a writ of restitution: "19 It is appropriate that I refer briefly to certain legal issues. The writ of restitution is a recognised procedure where, after entry by the Sheriff under a writ of possession, a defendant forcibly resumes possession of the subject land and the plaintiff seeks to have possession restored. It is a writ in aid of another writ of execution: r.39.1(1)(g), Forms 61, 62, Uniform Civil Procedure Rules: Ritchie's Uniform Civil Procedure NSW, LexisNexis at [39.1.35]; Pitcher v Roe (1841) 9 Dowl 971; Alliance Building Society v Austen [1951] 2 All ER 1068. 20 The use of a writ of restitution has been acknowledged in later cases. In Abram v National Australia Bank Ltd (Court of Appeal, 1 May 1997, BC9701553) Powell JA, at pages 54-55, observed that re-entry by a defendant, after the execution of a writ of possession by the Sheriff, constitutes a trespass with the plaintiffs' remedy being an application for an order in the nature of a writ of restitution. Powell JA cited, in this respect, Pitcher v Roe and Alliance Building Society v Austen. 21 In Maher v Commonwealth Bank of Australia (No 2) (2004) 211 ALR 656 at 658 [6], Finkelstein J observed that there are cases where a defendant has retaken possession within a short period after possession has been taken where the Court would, upon application, issue a writ of restitution. His Honour cited Pitcher v Roe, Alliance Building Society v Austen and R v Elliott [1955] VLR 126. 22 There is a clear foundation for the course of action taken by the Plaintiff in this case, namely to seek a writ of restitution."
This judgment has been applied in a number of other decisions of the Court: Australia and New Zealand Banking Group Ltd v Rafferty [2018] NSWSC 960 at [5]-[6].
The Sheriff had taken possession of the Strathfield South property, by execution of a writ of possession, on the morning of 3 March 2020. By the time the Court granted a stay of execution of the writ of possession later that day, the writ had already been executed. That state of affairs had come about because of the delay of the Defendants in approaching the Court for a stay. Further, George Lazarou did not inform the Court that the Sheriff had already taken possession of the property earlier that morning.
The stay of execution granted by the Court on 3 March 2020 did not constitute any authority for the Defendants to re-take possession and re-enter the Strathfield South property.
Mr Christodoulou's affidavit of 9 April 2020 established that the Defendants re-entered the Strathfield South property on or about 11 March 2020 with possession of the property being retained by the Defendants thereafter. Andreas Lazarou informed Mr Christodoulou on 15 March 2020 that the Defendants had re-entered the property by changing the locks on 11 March 2020.
Despite the further indulgence which the Plaintiff has allowed since 17 March 2020, whereby the Defendants had until 9 April 2020 to pay out the Plaintiff, the Defendants have not done so.
The Plaintiff has an existing right, as a result of orders made by the Court, to recover possession of the Strathfield South property and such an order should be made without further delay.
If the Defendants have a realistic prospect of obtaining finance so as to discharge their indebtedness to the Plaintiff, it remains open to them to pay out the Plaintiff before the Plaintiff exercises its power of sale of the Strathfield South property: Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161; [1972] HCA 74; GE Personal Finance Pty Limited v Smith (2006) NSW ConvR 56-164; [2006] NSWSC 889 at [17]-[18]; Perpetual Limited v Kelso and Anor at [25].
Given the failure of the Defendants to achieve this result in recent months, it may be that such an outcome is doubtful. However, it remains open to the Defendants to obtain finance and discharge their indebtedness to the Plaintiff in full, prior to sale by the Plaintiff of the Strathfield South property, if they wish to recover possession of that property.
I make the following orders: 1. I grant leave to the Plaintiff for the issue of a writ of restitution to restore to the Plaintiff possession of the land comprised in Folio Identifier 38/1701 being the land situated at and known as 2 William Street (also known as 2A William Street), Strathfield South, NSW. 2. The Plaintiff has leave to execute the writ of restitution forthwith. 3. The Defendants are to pay the Plaintiff's costs of the Notice of Motion dated 9 April 2020.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 April 2020

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