JOHNSON J: By Notice of Motion filed in Court on 9 May 2017, Achilles Constantinidis sought various orders with respect to existing proceedings between the Plaintiff, National Australia Bank Limited, and the Defendants Rodney Darryl Hunwick and Trevor Noel Hunwick. For reasons given by me on that day, I stayed the execution of a writ of possession with respect to property at 22 Derriwong Road, Dural ("the Dural property") until 5.00 pm today, 30 May 2017: National Australia Bank Limited v Hunwick & Anor [2017] NSWSC 570. The proceedings were adjourned until today before me in the light of that stay having been granted.
On 25 May 2017, Mr Chrysostomou, counsel for Macpherson Property Holdings Pty Limited ("Macpherson"), contacted my Associate, indicating that he had instructions to make an application with respect to the present proceedings. The Court directed that Macpherson furnish to the Court, and serve on the parties, a submission outlining the nature of the application which was sought to be made and any material upon which reliance was to be placed for that purpose.
On 26 May 2017, in accordance with the order of the Court, Mr Chrysostomou furnished a submission, together with a draft Notice of Motion and affidavit.
This morning, the Court granted leave to Macpherson to file in Court that Notice of Motion, together with the affidavit of Damian Gregory Ward sworn 26 May 2017.
Today, Mr Rose of counsel appears for the Plaintiff. Mr Beazley appears once again for Mr Constantinidis. Mr Chrysostomou appears for Macpherson.
The background to these proceedings is set out in my judgment of 9 May 2017. The Plaintiff filed a Statement of Claim on 26 May 2016 alleging mortgage default and seeking an order for possession of the Dural property. In August 2016, the Plaintiff obtained default judgment against both Defendants. On 24 March 2017, application was made for a writ of possession with respect to the Dural property. At that time, evidence was filed for the Plaintiff indicating that the Defendants' level of indebtedness with respect to the mortgage with the Plaintiff exceeded $5.4 million.
Execution of the writ of possession was scheduled for the morning of 10 May 2017. It is that which I stayed on 9 May 2017.
In addition to the application for a stay, the Notice of Motion filed for Mr Constantinidis on 9 May 2017 sought orders that he be joined as a party to the proceedings and an order that he be entitled to exercise his rights pursuant to a Residential Tenancy Agreement dated 12 December 2014.
The Notice of Motion filed on behalf of Macpherson seeks a stay until 26 June 2017, together with an order that Macpherson be joined as a party to the proceedings and orders that would require further pleadings to be filed.
The primary application today, as advanced on behalf of Macpherson, was that the matter be stood over to allow further consideration to be given to Macpherson's position and that the stay be continued in the meantime.
The evidence indicates that Mr Constantinidis resides at the Dural property. The Court has been informed today that Socrates Kitas, who is said to be the sole director and shareholder of Macpherson, resides as well at the Dural property, at least from time to time, given travel undertaken by him for work purposes.
The Dural property is a very substantial one. There is evidence before the Court, both photographic and written, which discloses that it is a very substantial property on a very large piece of land. It may be fairly described as a luxury property.
It is submitted by Mr Chrysostomou, that Macpherson has a cause of action against the Plaintiff which it would seek to bring and have joined to these Possession List proceedings. It is said that there was a lease entered into on 12 December 2014 between the Defendants as lessors and Acqua Mare Investments Pty Limited as tenant. It is said that in truth, Acqua Mare Investments Pty Limited was the agent for Socrates Kitas and Achilles Constantinidis, and thus the human tenants of the Dural property were Messrs Kitas and Constantinidis.
It is said as well that a contract for sale of land was entered into on 12 December 2014 between the Defendants as vendors and Macpherson and Constantinidis Property Nominee Pty Limited as purchasers. The document before the Court indicates that the purchase price was said to be $2,525,000.00 plus $200,000.00 for each calendar year between that date and the date of settlement.
I pause to note that, despite what one might think, the "Constantinidis" who was involved with Constantinidis Property Nominee Pty Limited, is not in fact Achilles Constantinidis, but a cousin. There is no application before the Court today by Constantinidis Property Nominee Pty Limited, which is said to be one of the two proposed purchasers of this property.
I should observe that the Statement of Claim alleged that the mortgage between the Plaintiff and the Defendants was dated 20 May 2011 and is registered as a dealing, and that on or about 21 November 2014 the Plaintiff served on each of the Defendants a demand for $3.9 million, being the total amount owing. On 5 December 2014 (that is one week before the lease agreement and the suggested contract were entered into), default or demand notices were served on each of the Defendants indicating that the sum owed was just over $4,000,000.00. On or about 13 January 2015 the amount owing was in excess of $4,000,000.00.
As at 23 May 2016, shortly before the proceedings were commenced in this Court, the Plaintiff asserted that the level of indebtedness under the loan arrangements with the Defendants was in the order of $4.9 million.
Neither the lease, nor the document entitled "Contract for Sale" between the Defendants as vendors and the two companies I have mentioned, are registered. I should state, as well, that a title search indicates that, quite apart from the mortgage to the Plaintiff, the Dural property is also subject to registered security by way of second mortgage to Wells Fargo International Finance (with the amount owing to that entity exceeding $300,000.00) with there being as well a caveat placed on the title by BOQ Credit Pty Limited, with the level of indebtedness which that caveat is intended to protect, being in the amount of $500,000.00 by way of an equitable mortgage.
It is said that, after December 2014, Achilles Constantinidis and Macpherson have expended money on the Dural property by way of improvements. It is not entirely clear what, if any, rent was paid by those persons for this luxury property, but there is an assertion that there were improvements made to the Dural property. Those improvements are effectively unparticularised and there is no documentary evidence indicating what was paid for what purpose and to whom.
I should observe that a valuation report of 19 April 2011, which is annexed to the affidavit of Brigitte Challis sworn 26 May 2017 and which contains a large number of photographs, would suggest that the Dural property was certainly, at that stage, in quite good condition. There is nothing in that report that indicates that the Dural property was in need of substantial work.
It has been indicated that something in the order of $800,000.00 was expended on improvements. What that was spent on, and for what purpose, is entirely unclear. The evidence on behalf of Macpherson in support of the current Notice of Motion is an affidavit by Macpherson's solicitor, Mr Ward, who has set out certain matters on information and belief from Mr Kitas. That is the extent of the evidence relied upon.
There is some material in the documents tendered and affidavits relied upon by Achilles Constantinidis which bears on some of these issues as well. However, that is no clearer nor substantial in its indication of the purpose for which these moneys were said to have been spent. There is no satisfactory accounting provided.
The primary application today, on behalf of Macpherson, is effectively for more time, on the basis that such material may be gathered to put before the Court at a later time.
It is noteworthy that Mr Kitas and Achilles Constantinidis have been residing at the Dural property for some time. The Court is told they may be residing in different parts of the Dural property.
As I said in paragraph 11 of my judgment of 9 May 2017, there is evidence before the Court of a letter dated 8 March 2017 from the solicitors for the Plaintiff putting Mr Constantinidis on notice. Affidavits of Ms Challis made on 9 May 2017 and 26 May 2017 contain a documentary record of her communications with Achilles Constantinidis over a period commencing in October 2016 with respect to what the Plaintiff was doing. On the face of it, Ms Challis took significant steps to keep Mr Constantinidis on notice of the steps the Plaintiff was taking and Mr Constantinidis, on the evidence, appears to have been indicating that he had some health problems and he was looking at alternative accommodation and matters of that sort.
There is some dispute, on the affidavits before the Court today, as to whether Mr Constantinidis asserted anything to Ms Challis about a proposal to rely upon the lease and associated matters as in any way assisting him with respect to this property.
In any event, the question which arises is this: The Plaintiff has obtained judgment, together with an order from the Court giving possession of the Dural property to the Plaintiff. The Court has issued a writ of possession on application of the Plaintiff, and that writ remains on foot ready to be executed if the stay is not extended. Macpherson asserts a desire to be joined to these proceedings to press a form of equitable claim, based on proprietary estoppel or a cause of action of a similar type giving rise to the potential for a judicial sale. It is said that the Plaintiff was on notice for a period of the lease and the suggested arrangements where improvements were being made to the Dural property. It is said that the Plaintiff did not take any steps at that time so that Macpherson was expending money for the purpose of purchasing the Dural property and, at the very least, that Macpherson has expended considerable moneys because of what is alleged to have been the Plaintiff's omission.
There are a number of difficulties with this assertion. There is a dearth of evidence to support these propositions. On the evidence before the Court, in particular from Ms Challis, steps were being taken by her on behalf of the Plaintiff where there was not any asserted contrary position, subject to one area of contest, where Mr Constantinidis asserted in what appeared to be something of a throwaway line, a statement which Ms Challis does not agree was said.
Living at the same premises at this time, making all due allowance for his business travels, was Mr Kitas. It is difficult to understand, given the residence of both men at the same place (even if in different parts of the Dural property) that Achilles Constantinidis would not have informed Mr Kitas as to what was happening.
Mr Kitas has told Mr Ward, who has repeated it on information and belief in his affidavit, that he first came to know of the Possession List proceedings and orders made by this Court (which are subject to the subsequent stay) on or about 19 May 2017, that is, 11 days ago. Mr Kitas has not sworn an affidavit himself and he is not here today. It is difficult, on the face of it, to accept that he did not have some notice of what was happening, if indeed he had a genuine interest in this property of a type which is sought to be advanced now. In making that comment, I am not seeking to express any final conclusion or order about this. It is merely to say that what is happening now, as a matter of common sense, does not seem to align with what has not been done by Mr Kitas for a considerable period of time.
Mr Rose, on behalf of the Plaintiff, submits that there is, on the face of it, no equitable cause of action that can be envisaged arising from what is asserted in this case. He submits, in any event, that the Plaintiff has a clear and present legal right. It has a registered mortgage. It has an order for possession from the Court and a writ of possession which it seeks to execute. Even if Macpherson and possibly Achilles Constantinidis (or the other Mr Constantinidis) had some cause of action, that could be pursued by a claim of damages against the Plaintiff. If there was some cause of action, it is not of a type that is appropriate to be added, at this very late stage, to the Plaintiff's claim for possession which is, as a matter of law, unassailable.
I accept the submissions of the Plaintiff on those issues. If there was some viable cause of action which could actually be advanced, with some realistic prospect that it could be brought into play to resist the Plaintiff's existing order for possession, then there might be some basis to further entertain what is put on behalf of Macpherson and to allow more time for that to be explored. But I am simply unpersuaded that there is any cause of action which Macpherson can advance which would be appropriate to have joined to these proceedings, so as to stop (and stop potentially for an extended period of time) the Plaintiff's otherwise clear and unassailable claim for possession of the Dural property.
The suggestion that, if Macpherson is added, there would be some basis for an order for judicial sale is unrealistic.
The Plaintiff is in a position where it ought be entitled to proceed to enforce the order of the Court which it has, based upon its registered mortgage. The arguments advanced for Macpherson, and which are relied upon indirectly by Achilles Constantinidis, do not involve any registered instruments. They involve, in my view, a flimsy foundation and what at this stage is a paucity of evidence. I do not think that allowing more time for Macpherson will improve the position. If Macpherson has a cause of action, it can seek to bring it against the Plaintiff separately.
Accordingly, I decline to grant relief in accordance with the Notice of Motion filed in Court today for Macpherson and I dismiss that Notice of Motion.
There is no basis, in my view, to extend the stay (which will expire at 5.00 pm today) which was obtained on 9 May 2017 by Achilles Constantinidis. I dismiss the Notice of Motion of Achilles Constantinidis filed on 9 May 2017.
[Submissions as to Costs]
The parties have made submissions as to the appropriate costs orders in the light of the orders already made dismissing both Notices of Motion.
The Macpherson Notice of Motion was placed before the Court today. There was no indication from the Court that Macpherson's application was before the Court for directions only or for the purpose of adjourning the matter to some future date. It was apparent from what had happened on 9 May 2017 that a stay was granted which extended to this afternoon and Macpherson sought to join these proceedings. I have made clear in this judgment that I do not accept that there is any merit in Macpherson's application and that it would not be materially advanced if a further adjournment was granted in any event.
Costs should follow the event with respect to the Macpherson Notice of Motion. I order that Macpherson pay the Plaintiff's costs of that Notice of Motion.
With respect to the Notice of Motion of 9 May 2017 brought by Achilles Constantinidis, it is submitted by Mr Beazley that I did in fact grant a stay to Mr Constantinidis on 9 May 2017, so that there ought be no order as to costs of that day. Mr Beazley makes no submission with respect to the costs of today.
It is necessary to bear in mind what happened on 9 May 2017, as explained in my judgment. The application was of course brought on the day before the scheduled execution of the writ. Although I accepted that there was very ample notice given by the Plaintiff to Mr Constantinidis that the day was going to come when a writ was going to be executed, so that there was ample opportunity for him to make alternative arrangements, there was in the end limited actual notice about the scheduled execution of the writ on 10 May 2017. It was on that narrow basis, which I summarised at paragraph 24 of my judgment which focused upon his health issues, that I granted a short-term stay on a hardship basis.
I was not prepared, on 9 May 2017, nor today, to make any of the other orders as sought in the Notice of Motion. The Plaintiff was brought to Court urgently on the last occasion, because of its direct interest in the stay application. In my view, the appropriate costs order in these circumstances is that the Applicant, Achilles Constantinidis, pay the Plaintiff's costs of his Notice of Motion for both 9 May 2017 and today, 30 May 2017 and I so order.
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Decision last updated: 31 May 2017