Dabboussi v Ilend Capital Pty Ltd

Principles and determination

1. Under r 16.10 UCPR, the Court may enter default judgment in proceedings, commenced by statement of claim, where the relief sought is other than that specified in rr 16.4-16.8 UCPR. Where default judgment is sought under r 16.10 UCPR, the Court retains a discretion as to whether or not to enter judgment: Dandaloo Pty Ltd v Iali [2017] NSWSC 1738 at [38], citing Termijtelen v Van Arkel [1974] 1 NSWLR 525 at 529-531 and 534-535.
2. Part 16 UCPR, including r 16.10, does not strictly apply to these proceedings, since they were commenced by summons, not statement of claim: r 16.1 UCPR. However, I accept that "Part 16 of the UCPR may be applied by analogy to proceedings commenced by summons … through orders made under s 61(3) of the Civil Procedure Act": In the matter of Bleecker Property Group Pty Ltd (In Liquidation) [2023] NSWSC 1071 at [12] (Williams J), citing Property Investors Alliance Pty Ltd v C88 Project Pty Ltd [2021] NSWSC 1175 at [14] (Hammerschlag J, as his Honour then was).
3. Here, the defendant has failed to comply with the Court's orders of 3 April 2024, requiring it to file evidence in response by 12 April 2024. In so failing, and by analogy with r 16.2 UCPR, I consider the defendant is "in default" for the purposes of entering default judgment under s 61(3) Civil Procedure Act. By analogy with r 16.10 UCPR, however, I do not consider it follows as a matter of course that default judgment should be entered. The Court retains a discretion and must be satisfied the plaintiffs appear entitled to the relief they seek.
4. I am satisfied on the evidence before the Court that default judgment should be entered in respect of the plaintiffs' claim for the removal of the defendant's caveat under s 74MA Real Property Act. The relevant questions for the Court in determining whether a caveat should be removed under s 74MA were stated by Ball J at [8] in Abraham v Abraham [2012] NSWSC 254: [T]he question is whether an interlocutory injunction would be granted to protect the interest claimed in the caveat. That, in turn, raises two questions. The first is whether there is a serious question to be tried concerning the interest claimed in the property that is sought to be protected. The second is whether the balance of convenience is in favour of maintaining the caveat …
5. Here, it is of primary significance that AFCA has made a determination, which the plaintiffs have accepted, requiring the defendant to remove the caveat over the Bass Hill Property. In Australia Capital Financial Management Pty Ltd v Australian Financial Complaints Authority Ltd [2022] NSWCA 204 at [7], Bell CJ and Meagher JA explained the effect of AFCA determinations as follows: Once a complaint is made to AFCA, its Rules form a contract between the complainant, AFCA and the Financial Firm. AFCA's determination of the complaint is "final", and binding on both parties if accepted by the complainant within 30 days of receipt (r A.15.3).
6. It is clear that AFCA's determination is binding on the defendant. In circumstances where the defendant is therefore already obliged to remove the caveat, I am satisfied that there is no serious question to be tried concerning the interest claimed in the property that is sought to be protected by the caveat. As such, the caveat should be removed.
7. However, I am not satisfied that default judgment should be entered in respect of the plaintiffs' claim for the removal security interests registered by the defendant under the PPSA. No power of the Court has been identified by the plaintiffs pursuant to which this relief is sought. The relevant power would appear to be located in s 182 Personal Property Securities Act 2009 (Cth), the relevant parts of which read as follows: (4) On an application under this section, a court may make the following orders: (a) if the court considers the amendment demanded to be authorised under section 178 - an order requiring the Registrar to register a financing change statement amending the registration (including an amendment to remove the registration); … (c) any other order that the court thinks fit.
8. The power of the Court identified in s 182 is clearly premised on an "amendment demand" having been issued: s 178 Personal Property Securities Act. In circumstances where there is no evidence that an amendment demand has been issued, I am not satisfied the plaintiffs are entitled to relief under s 182. Default judgment will therefore not be entered in respect of this prayer for relief.
9. I also do not consider that it is appropriate to make the declaration sought by the plaintiffs, that they are "not liable to the defendant on the mandate, brokerage agreement dated 15 June 2022".
10. Courts are reticent to grant declaratory relief on applications for default or summary judgment: QBE Insurance (Aust) Ltd v Thornton [2012] NSWSC 217 at [16] (Ball J), citing GPI Leisure Corporation Ltd (in liq) v Yuill [1997] NSWSC 292. Additionally, as the High Court explained in Ainsworth v Criminal Justice Commission (1992) 175 CLR 562 at 582, courts should not grant declarations where they would "produce no foreseeable consequences for the parties" (Mason CJ, Dawson, Toohey and Gaudron JJ): see also CIMIC Group Limited v AIG Group Limited [2022] NSWSC 999 at [624]-[634] (Peden J).
11. Here, the plaintiffs already have a binding AFCA determination, which finds that "there are no monies owing to" the defendant under the brokerage agreement and requires the defendant to "waive the outstanding invoices for the costs it claims [the plaintiffs] are liable to pay under" that agreement. In these circumstances, I do not consider that there is any utility in making the declaration sought.

Conclusion and orders

1. In light of the above, it is not necessary to consider the alternative claim for summary judgment under r 13.1 UCPR, save to note that, for the reasons given in respect of default judgment, I do not consider that summary judgment should be entered in respect of the prayers for PPSR and declaratory relief.
2. The appropriate orders are: 1. Judgment for the plaintiffs pursuant to s 61(3) Civil Procedure Act 2005 (NSW). 2. Order that pursuant to s 74MA of the Real Property Act 1900 (NSW), the caveat dealing AS596060 in relation to Lot 12 in DP 872771 with folio identifier 12/872771 be withdrawn by 5pm on 28 August 2024. 3. Amended summons and amended notice of motion otherwise dismissed. 4. Defendant to pay the plaintiffs' costs as agreed or assessed.

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: 21 August 2024