These proceedings were originally listed for hearing today, 12 September 2022, for the hearing of two motions being:
1. A motion filed by the plaintiff for possession of land and judgment for an amount said to be owed by the defendant to the plaintiff; and
2. A motion filed by the defendant personally (that is not through any legal representatives) on 3 February 2022 seemingly challenging the grounds on which the plaintiff sought possession and default judgment against her.
Mr Collins, of counsel, appears for the plaintiff and Mr Stewart, of counsel, appears for the defendant.
At the commencement of the hearing, Mr Stewart informed me that he had only just come into the matter, having recently been instructed by new solicitors apparently retained by the defendant.
However, the solicitor instructing Mr Stewart was not in Court and had not yet filed an appearance.
I directed that he file an appearance by 4.00pm today.
Mr Stewart further sought an adjournment, relying on a letter from Awesome Lending Solutions dated 11 September 2022, (Sunday) in respect of the possibility of refinance. Mr Stewart sought an adjournment for a period of 28 days on the basis that, having regard to the letter from Awesome Lending Solutions, it is likely that the defendant would have obtained refinance for the whole amount (approximately $2 million) and paid that amount to the plaintiff within that period.
The plaintiff opposed the adjournment of the hearing.
I rejected the defendant's application for an adjournment and indicated that I would give reasons in my judgment
Firstly, the potential for the defendant to obtain alternative finance and repay the money outstanding to the plaintiff is not generally a basis for resisting an application for judgment in default. It may be a relevant factor on an application for stay of execution of a writ of possession (see GE Personal Finance v Smith [2006] NSWSC 889 at [13] per Johnson J) but, even on a stay application, the fact that the defendant may be able to refinance does not mandate any stay of execution.
The fact, if it be fact, that a party in default under a loan agreement is looking at refinance or may be able to refinance does not provide a defence or any answer to a plaintiff claiming that moneys are outstanding and is entitled to judgment in default and possession of the land in accordance with the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW) (the Rules).
The defendant did not point to any part of the loan agreement or make any submission as to how the possibility of refinance could provide any defence to the plaintiff's claim.
In any event, I would treat the letter from Awesome Lending Solutions dated 11 September 2022 with a degree of caution. At its highest, the content suggests that the authorised mortgage broker at Awesome Lending Solutions is currently in the process of obtaining formal approvals on sufficient lending to repay the outstanding debts and obligations. The new loans will apparently be spread across several lenders and are currently at the pre-approval stage only.
As the author of the letter suggests, he is unable to provide any guarantees as to the lending proposals but he has a reasonable expectation that the loans would be approved and settlement of the refinances will occur within 28 days.
The reasonable expectation of a mortgage broker that he will obtain refinance in respect of applications that are seemingly only at the pre-approval stage is hardly a sufficient basis for adjourning an application in respect of proceedings which were commenced on 21 May 2019.
The defendant does not put any other evidence before the Court as to earlier attempts at refinancing or make any other submission as to any other grounds on which the hearing of this matter should be delayed.
For the reasons set out, I rejected the defendant's application for an adjournment.
I then asked Mr Stewart on behalf of the defendant whether he was instructed to proceed with the motion filed by his client or whether the matters raised in the motion were really matters which the defendant sought to rely on in opposition to the plaintiff's application.
Mr Stewart informed me that he was not instructed to proceed with the motion dated 3 February 2022.
Further, Mr Stewart did not seek to rely on any additional evidence (that is, other than the letter from Awesome Lending Solutions dated 11 September 2022) in opposition to the orders sought by the plaintiff.
I then referred Mr Stewart to the plaintiff's written submissions and asked Mr Stewart to identify the issues on the plaintiff's motion so that I may have a better understanding of the basis on which the defendant was opposing the orders sought by the plaintiff.
I stood the matter down for a period of 30 minutes so that Mr Stewart might review the plaintiff's written submissions and the plaintiff's evidence.
On recommencing the matter after that short adjournment Mr Stewart stated that he did not wish to make any submissions and did not wish to rely on any further evidence.
The only motion for determination thus remains the plaintiff's Notice of Motion for default judgment and possession of land filed on 10 December 2021.
[2]
The plaintiff's motion
As set out in the plaintiff's motion, the plaintiff seeks four orders:
1. Judgment for the plaintiff for possession of the land comprised in folio identifier 20/SP62331 & 5/SP61034 being the land situated at and known as Unit 1, 32 Lewis Street, Old Bar in the State of New South Wales.
2. Judgment for the plaintiff for possession of the land comprised in folio identifier 3/SP11245 being the land situated at and known as Unit 3, 5 William Street, Randwick in the State of New South Wales.
3. Judgment for the plaintiff for possession of the land comprised in folio identifier 4/SP11245 being the land situated at and known as Unit 4, 5 William Street, Randwick in the State of New South Wales.
4. Judgment for the plaintiff against the defendant for $2,024,988.79 together with interest up to the date of judgment.
In essence, the plaintiff seeks possession of two home units situated at Randwick and another home unit situated at Old Bar in the state of New South Wales.
The plaintiff relies on four affidavits in support of the motion, being:
1. an affidavit filed at the same time as the motion of Kylie Maree Britton dated 21 December 2021 being the solicitor for the plaintiff;
2. two affidavits of service of Joseph Khoury dated 26 May 2021 in respect of the Randwick units; and
3. an affidavit of service of Peter Charles Iverson dated 17 June 2019 (in respect of the Old Bar property).
As set out in the Statement of Claim filed on 21 May 2019, the plaintiff loaned money to the defendant pursuant to three agreements, being:
1. a written agreement dated 1 June 2005 as varied on 25 September 2006 with a credit amount of $900,000;
2. a written agreement dated 15 April 2003 with a credit amount of $450,000; and
3. a written agreement dated 12 June 2002 with a credit amount of $555,000.
The plaintiff asserts that it advanced credit to the defendant in accordance with each of those three agreements and that the defendant has been in default in respect of each of those three agreements (in the sense that the defendant has not paid the moneys owing under those agreements).
The loans were secured by way of mortgages over each of the three properties to which I have already referred.
The defendant has filed an appearance and filed defences dated 4 June 2021 and 5 July 2021. However, each of those defences was struck out pursuant to orders made by Lonergan J on 23 July 2021. [1]
An amended defence dated 22 November 2021 was also struck out pursuant to orders made by Lonergan J on 2 December 2021.
The defendant has not, since the making of the orders on 2 December 2021, filed or sought to file any further defence such that, at the time of this hearing, there is no defence to the Statement of Claim.
Since the filing of the plaintiff's motion on 10 December 2021, the matter has been before the Court on a number of occasions in particular dealing with applications and orders sought by the defendant.
Having said all that, the position is at this point that there is no defence to the Statement of Claim and the only evidence relied upon by the defendant in seeking to resist the plaintiff's application is the letter from Awesome Lending Solutions dated 11 September 2022.
[3]
Steps necessary to obtain judgment in default and possession
Part 16 of the UCPR deals with default judgment. It is necessary that a party seeking default judgment complies strictly with the requirements of Part 16.
The plaintiff submits that having regard to the four affidavits on which it relies, all of the provisions of the relevant rules have been complied with.
I will deal with each of the requirements and refer to the evidence in that regard.
Firstly, it is obviously necessary that service against the party in default, being the defendant, is established. In this matter there can be no dispute about that as the defendant has filed an appearance and defence, albeit it was struck out.
As set out in r 10.20(5), a defendant who enters an appearance is taken to have been personally served with the relevant originating process on the date on which the appearance was entered.
Rule 16.3 sets out the procedure where a defendant is in default. Rule 16.4 sets out the requirements for obtaining default judgment on a claim for possession of land. Rule 16.6 sets out the requirements for default judgments on death or liquidated claims.
As set out in r 16.8, if the plaintiff's claim against the defendant in default includes each or more of the claims referred to in this Part, judgment may be given for the plaintiff against the defendant on any of those claims as if it were the plaintiff's only claim for relief against the defendant. That is the circumstance in this matter.
Rule 16.2 is in the following terms (relevantly):
16.2 Definition of "in default"
(cf SCR Part 17, rule 2; DCR Part 13, rule 1; LCR Part 11, rule 1)
(1) A defendant is
"in default" for the purposes of this Part--
(a) if the defendant fails to file a defence within the time limited by rule 14.3(1) or within such further time as the court allows, or
(b) if the defendant fails to file any affidavit verifying his or her defence in accordance with any requirement of these rules, or
(c) if, the defendant having duly filed a defence, the court orders the defence to be struck out.
(2) Despite subrule (1), a defendant is not in default if the defendant--
(a) has made a payment towards a liquidated claim under rule 6.17, or
(b) has filed an acknowledgment of claim under rule 20.34, or
(c) has filed a defence after the time limited by these rules or allowed by the court, but before a default judgment is given against the defendant.
The plaintiff relies on r 16.2(1)(c), that is that the defendant, having duly filed a defence, the Court has ordered that the defence be struck out.
Having regard to the earlier orders of Lonergan J and the absence of any further defence filed by the defendant, I am satisfied that the defendant is in default within the meaning of r 16.2(1)(c).
None of the matters referred to in r 16.2(2) arise. As such, in order to obtain judgment in default, it is necessary that the plaintiff establish the matters set out in r 16.3.
As set out in r 16.3(1)(a), the plaintiff may apply for judgment to be given under Part 16 against the defendant in default, although such an application may be dealt with in the absence of the parties and they need not be served.
As set out in r 16.3(2), unless the Court otherwise orders, an application for judgment must be accompanied by:
1. an affidavit of service of the Statement of Claim; and
2. an affidavit in support of the application.
I have already dealt with the service of the proceedings on the defendant.
The plaintiff relies on the affidavit of Ms Britton in support of the application.
In terms of the application for default judgment on a claim for possession of land, r 16.4 applies.
As set out in r 16.4(1), if the plaintiff's claim against the defendant in default is for possession of land only judgment may be given for the plaintiff for possession of land as against the defendant and for costs.
In order to obtain such a judgment, the plaintiff is required to file an affidavit in support in accordance with r 16.4(iii). It is necessary for the plaintiff to comply with r 16.4(iii) which is in the following terms:
(3) The relevant affidavit in support--
(a) must identify any persons (other than parties to the proceedings) who were in occupation of the whole or any part of the land--
(i) as at the time the originating process was filed, or
(ii) if the claim for possession arises from an amendment to the originating process, as at the time the amendment was made,
and, if any such person was in occupation of the land pursuant to a right of occupation under a residential tenancy agreement within the meaning of the Residential Tenancies Act 2010, must contain a statement to that effect, and
(b) in relation to each such person--
(i) must state that the person's occupation of the land is not to be disturbed, or
(ii) must state that the person is no longer in occupation of any part of the land, or
(iii) must state that the person has been served with a notice pursuant to rule 6.8 and that the time allowed for the person to apply to the court to be joined as a defendant has now passed,
as the case requires, and
(c) if the claim for possession of the land arises from a default in the payment of money, must give particulars of the default (including any payments made to date to reduce the amount owing and the current amount owing taking into account any such payments), and
(d) must state the source of the deponent's knowledge of the matters stated in the affidavit concerning the occupation of the land and any default in the payment of money referred to in paragraph (c), and
(e) must state whether costs are claimed and, if so, how much is claimed for costs, indicating--
(i) how much is claimed on account of professional costs (not exceeding the amount fixed by the regulations made for the purposes of section 59 of the Legal Profession Uniform Law Application Act 2014 ), and
(ii) how much is claimed on account of filing fees, and
(iii) how much is claimed on account of the costs of serving the originating process, and
(f) must state when and how the originating process was served on the defendant."
In this regard, the plaintiff relies on the three affidavits of service. The first affidavit of service of Mr Khoury dated 26 May 2021 is in respect of the unit at 3/5 William Street, Randwick. As Mr Khoury identifies, he served the documents by personally placing them in separate sealed addressed envelopes and affixing the envelopes to the front door of that address. He called for the occupants but gained no response.
Service in that matter is permitted by r 6.8(2) of the UCPR. Similarly, in respect of the second unit, Mr Khoury served the Notice to Occupier by personally placing the documents being the two Notices to Occupy, the Possession of Land cover sheet and the Statement of Claim in separate sealed addressed envelopes and affixing them to the front door of the address at 4/5 William Street Randwick.
He knocked on the door and called out to the occupants but gained no response. Again, that is a permitted method of service on the occupier.
In respect of the service on the occupier at the Old Bar property, the plaintiff relies on the affidavit of service of Mr Iverson dated 17 June 2019. Mr Iverson attended at that property and delivered the relevant documents, being the Notice to Occupier, the Possession of Land cover sheet and the Statement of Claim to a person who identified himself as the only person who was living at the premises at the time of service. That person said he only had two weeks left on his lease and was moving out.
I am satisfied that subrules 16.4(3)(a) and (b) have been complied with in respect of each of the three properties.
Further, I am satisfied that r 16.4(3)(c) has been complied with, as in her affidavit of 1 December 2021, Ms Britton gives particulars of the default, that is, being the amount owing, and states the source of her knowledge of the matters stated in the affidavit (being the affidavits of service to which I have referred, as well as her access to the books and records of the plaintiff in relation to the debt and the mortgages).
Further, the plaintiff is not claiming costs in the proceedings. As such, it is not necessary for the plaintiff to set out how much by way of costs the plaintiff is claiming as the plaintiff is claiming nothing.
In the circumstances, I am satisfied that the plaintiff has complied with r 16.4.
Further, I am satisfied that the plaintiff has complied with r 16.6 (Default judgment on debt or liquidated claim).
In her affidavit, Ms Britton:
1. Specifies the amount due to the plaintiff in respect of the cause of action for which the proceedings were commenced as at the time the originating process was filed;
2. Provides particulars of any reduction in the amount (there is none as nothing has been paid);
3. States the source of her knowledge of the matters (again, the plaintiff's books and records);
4. States that the amounts claimed by way of interest; and again
5. States that no costs are claimed.
In the circumstances, r 16.6 has also been complied with.
As Mr Collins points out, it is not necessary that the plaintiff adduce evidence of each loan agreement and mortgage so that the Court might form some independent view about the terms of the agreements and interest.
The Rules specifically provide that if a party is in default within the meaning of r 16.2, then the procedure for applying both in respect of possession of land or a liquidated amount is governed by rules 16.3 to 16.6.
Those Rules direct that the party seeking a judgment in default file certain affidavits and that those affidavits "state" certain things.
Again, the plaintiff has complied with all of those requirements in this matter.
As the defendant is in default within the meaning of 16.2 and the plaintiff has applied for judgment in default as required by r 16.3, and the plaintiff has filed the relevant affidavits and established the matters required by rules 16.4 and 16.6, then the plaintiff is entitled to the orders that it seeks.
I thus make the following orders:
1. The defendant's Notice of Motion filed on 3 February 2022 is dismissed.
2. The new solicitor for the defendant to file a Notice of Appearance by 4pm on 12 September 2022.
3. Judgment for the plaintiff for possession of the land comprised in folio identifier 20/SP62331 & 5/SP61034 being the land situated at and known as Unit 1, 32 Lewis Street, Old Bar in the State of New South Wales.
4. Judgment for the plaintiff for possession of the land comprised in folio identifier 3/SP11245 being the land situated at and known as Unit 3, 5 William Street, Randwick in the State of New South Wales.
5. Judgment for the plaintiff for possession of the land comprised in folio identifier 4/SP11245 being the land situated at and known as Unit 4, 5 William Street, Randwick in the State of New South Wales.
6. Judgment for the plaintiff against the defendant for $2,096,033.59.
[4]
Endnote
National Australia Bank Limited v Qasim [2021] NSWSC 897.
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Decision last updated: 19 September 2022