Magarditch v Australia & New Zealand Banking Group Ltd

The Proceedings in the Supreme Court 10 Although it is not necessary for the purposes of the present application to canvas the detailed history of the proceedings in the Supreme Court of New South Wales, some matters should be noted. 11 On 28 April 1994, Windeyer J made orders in proceedings in which the applicant and his wife sought orders removing a caveat lodged by the Bank on the Property. The Bank's cross-claim sought an order for possession of the Property, based on what was said to be a default by the applicant and his wife under a guarantee given by them to support the indebtedness of Magic to the Bank. 12 Windeyer J generally found in favour of the Bank, but referred to the Master a question as to whether the Bank was entitled to apply, as it did, the proceeds of sale of a property at Gladesville, which had been mortgaged by Mr Sourian to the Bank, in first reducing Mr Sourian's indebtedness as registered mortgagor. Master McLaughlin subsequently found (contrary to the Bank's submissions) that the proceeds should first have been applied to reduce the indebtedness of Magic. 13 An appeal was brought by the Bank against this finding. Santow J, in a judgment of thirty-four pages, determined the appeal in favour of the Bank: Australia and New Zealand Banking Group Ltd v Gerier Magardith and Sonia Magardith, unreported, Santow J, 17 April 1997. His Honour made an order, inter alia, for possession of the Property in favour of the Bank. 14 On 23 September 1998, the New South Wales Court of Appeal dismissed an application by the applicant and his wife for leave to appeal from the judgment of Santow J. The Court of Appeal, in a judgment of fifty-one pages, considered the issues carefully and expressed their agreement with Santow J's decision: Magarditch & Anor v Australia and New Zealand Banking Group Ltd, unreported, NSWCA, 23 September 1998. Their Honours added this comment (at 50-51): "The criticisms made of the other judgments or of the liquidator or the Bank or its officers are not shown in the material presented to have any substance. They are irrelevant to the present application. Mr and Mrs Magarditch and Mr Sourian have had every opportunity to challenge in the appropriate way anything done by the Bank or the liquidator. With the exception of the decision of Master McLaughlin, which Santow J overruled, in our opinion correctly, these challenges have failed. There is nothing to suggest that they deserved any other fate. We have looked carefully to see whether on acceptable evidence any injustice has been done by the Bank or the liquidator to Mr and Mrs Magarditch or to Mr Sourian or to Magic and have found none." 15 The applicant and his wife filed an application for special leave to the High Court from the decision of the Court of Appeal. This application has not yet been determined. 16 On 30 March 1999, the applicant and his wife applied to the Supreme Court for a stay of the order for possession granted by Santow J. The application was provoked by the service of a notice to vacate from the Sheriff's Office, pursuant to a writ of possession issued by the Bank on 27 October 1998. In his determination of the application, Handley JA considered that it was not reasonable to have given the applicant and his wife, who have apparently lived in the house for thirty-five years, a mere forty-eight hours notice of the intention to evict them: Magardith v Australia and New Zealand Banking Group Ltd, unreported, Handley JA, 31 March 1999. However, his Honour refused an extended stay, saying this (at 9): "The position fundamentally is that the Bank has been legally entitled to possession since 1994 and the last barrier to the enforcement of its rights was removed by the judgment of this Court in September 1998." His Honour continued: "The position of the claimants has to be accommodated because of the failure of the Sheriff to give fair and decent notice of his intention to execute the writ but, in my judgment, that is the extent of their rights to be protected against the enforcement of the writ. I therefore order that execution of writ of possession dated 27 October 1998 be stayed until Friday 16 April 1999. I refuse any other or further stay of execution." 17 I have been informed that a further application to the High Court by the applicant and his wife for a stay was dismissed on 16 April 1999 by Gaudron J. 18 The most recent event in this prolonged litigation was the issue of a writ of possession by the Supreme Court on 20 April 1999.

Reasoning 19 In my view, this is not an appropriate case for the stay sought by the applicant, for four reasons. 20 First, although there was apparently a wide-ranging debate before Einfeld J, the only effect of a successful appeal from his Honour's decision would be to allow the applicants before Einfeld J to file a further amended statement of claim in those proceedings and to give leave to Magic to bring all or some of the claims set out in the amended statement of claim. So far as appears from the material before me, the pleadings sought to be relied on by the applicants do not plead that the judgments supporting the order for possession were procured by fraud and should be set aside. Thus, even if the appeal were to have reasonable prospects of success (a matter it is unnecessary to consider), the proceedings currently on foot in this Court do not include a claim that the orders made in the Supreme Court by Windeyer J and Santow J (and affirmed by the Court of Appeal) should be set aside. 21 If it is relevant, the same position appears to apply in relation to the proposed amended statement of claim the applicants have sought leave to file in this Court. No relief sought in the proposed pleading impugns the judgments which provide the foundation for the order for possession of the Property. 22 Secondly, Mr Sourian's argument, that the improper conduct of the liquidator has deprived Magic of funds that would have enabled it to pay out the mortgage, has been rejected by the Court of Appeal and by Einfeld J. In any event, even if true, the contentions put forward on behalf of Magic and the applicant would not, of themselves provide a basis for setting aside the relevant orders granting the Bank possession of the Property. 23 Thirdly, there is nothing in the evidence before me, voluminous as it is, that suggests that the applicant (whether alone or with his wife) has an arguable case for setting aside the judgments making the orders granting the Bank possession of the Property. The unsupported allegations of corruption by a judicial officer do not take the matter further. Thus, even if such a case were to be pleaded, it is not presently supported by evidence sufficient to establish an arguable case. 24 Fourthly, the allegations made on behalf of the applicant have been agitated in other proceedings and have been found to lack any foundation. As Mr Harrowell, who appeared for the liquidator, pointed out, the applicant and his wife (and Mr Sourian) have had extensive opportunities to put their contentions of fact and law to the courts. While one can have sympathy with people who are about to lose their home because of failure to pay moneys due under a guarantee, that does not mean that courts should provide repeated opportunities to air allegations regardless of the rejection of those allegations in earlier proceedings, or should accept delays in the enforcement of rights found to be established after prolonged litigation. 25 The application for a stay must be dismissed. The first applicant should pay the respondents' costs. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.

Appearing for the First Applicant: Mr J Sourian (by leave)

Solicitor for the First Respondent: Norton Smith & Co Solicitor for the Second Respondent: Hunt & Hunt Solicitors Date of Hearing: 22 April 1999

Date of Judgment: 22 April 1999