Before me on Monday 20 May 2024 as duty judge at very short notice was a notice of motion filed last Friday afternoon seeking orders to set aside a judgment entered in July 2023, and to stay the execution of a writ of possession over three properties that had been issued in July 2023. This is the third application for a stay of the execution of the writ. The first was made in September 2023 and was granted, as was the second in January 2024.
I made orders dismissing the motion with costs. These are my reasons for making those orders.
The proceedings commenced on 7 June 2023. The plaintiff sought possession of specifically identified properties at Wattle Grove, Edmondson Park and Casula over which a mortgage had been secured and guaranteed on 30 September 2022.
Perpetual Corporate Trust Limited v Colevski Pty Limited [2024] NSWSC 607 | Case summary | Zoe
The statement of claim pleads that the first defendant company obtained the loan from the plaintiff and the second to eighth defendants personally guaranteed the loan and gave a continuing and irrevocable indemnity to the plaintiff in respect of all costs and losses arising from the entry into the agreement.
The sixth, seventh and eighth defendants owned the property at Wattle Grove, the fourth and fifth defendants, Edmondson Park and the second and third defendants, Casula. The three mortgages and their respective dealing numbers are cited in the statement of claim.
The first defendant defaulted, and a letter of demand was issued on 20 January 2023. On 9 February 2023 a Notice of Default under s 88 of the National Consumer Credit Protection Act 2009 (Cth), Schedule 1 (National Credit Code) was issued.
The full amount of the loan became due, which was referred to in the statement of claim as a sum in excess of $3.4 million as at 5 June 2023, plus continuing interest and fees.
Affidavits of service were filed by the plaintiff on 17 July 2023, sworn by Alexander Taylor, a process server. Those affidavits confirm that the defendants were personally served with the statement of claim at their respective addresses on 14 June 2023. Valentina Colevski (the deponent of the affidavit in support of today's application) was served at the Wattle Grove property at 7:55pm, at 7:43pm the occupants at Casula were served, with the third defendant, Keti Talevski, accepting service, and at 7:27pm service was effected at Edmondson Park upon David Trifunovski, the fourth defendant, who confirmed that he lived there with his wife, the fifth defendant.
I have no reason at all to doubt the truth of these affidavit of service, all sworn on 20 June 2023 and filed on 17 July 2023.
No defence has ever been filed by any of the defendants.
On 17 July 2023 a notice of motion was filed by the plaintiff seeking default judgment and a writ of possession.
Judgment was entered and the writ was issued on 21 July 2023 over the three properties.
On 14 September 2023, orders were made by the Registrar staying the writ until 5:00pm on 21 September 2023. The matter was listed for directions on 21 September 2023, and orders were made requiring any application to extend the operation of the stay to be made by notice of motion and supporting affidavit to be filed and served by 5:00pm on 18 September 2023. A notice of motion and affidavit in support was filed by Mathews Folbigg Solicitors by Christopher Cole, solicitor.
On 18 September 2023, Mr Cole filed a notice of appearance for all of the defendants.
On 20 September 2023, Registrar Hedge made orders in Chambers vacating the directions on 21 September 2023, providing time for the defendants to serve further affidavits by 9 October 2023, and requiring any notice of motion to be filed and served by that date, and that the plaintiff has leave to apply for eviction dates after 9 October 2023, should the auctions (referred to in the defendants' affidavit material) not be successful.
On 12 October 2023, the proceedings were by consent adjourned for further directions to 7 December 2023. The proceedings (including the notice of motion filed by the defendants) were then adjourned to 1 February 2024.
On 12 January 2024, Campbell J was approached as duty judge to deal with a notice of motion filed that day, returnable instanter and to be heard forthwith, that writs of execution issued in respect of each property be stayed until further order of the Court. His Honour made that order and granted the plaintiff liberty to apply forthwith for dissolution of the stay and for issue of an eviction notice forthwith, in the event that the settlements of the Wattle Grove and Casula properties did not take place on Monday 15 January 2024.
On 1 February 2024, orders were made by consent by Registrar Jones that the stay order made by Campbell J was dissolved and the matter listed for further directions on 25 March 2024. There are no signed consent orders on the file for this date, but the Registrar's record of proceedings indicates that Ms Ji appeared for the plaintiff and mentioned the defendants' appearances.
On 25 March 2024, Ms Ji appeared before the Registrar and mentioned the appearance of the defendants and sought no order. No order was made, and no future listing date was given.
An affidavit of the solicitor for the plaintiff, Nurit Ji, which I gave leave to be filed today, attached an email from Christoper Cole, solicitor dated 25 March 2024, indicating that he had moved from Matthews Folbigg and had "started up at Oakbridge Lawyers", and stating that "despite the change, I still have carriage of the subject matter".
No notice of change of solicitor was filed until 16 May 2024 at 7:35pm. The solicitor identified was Rochelle Hallasso of Oakbridge Lawyers, not Mr Cole.
The next event on the court file was the electronic filing of the notice of motion and affidavit of Valentina Colevski on Friday 17 May 2024 at 2:13pm. It appears that no attempt was made to request the duty judge on Friday 17 May 2024 to deal with the matter. As the motion was electronically filed without any indication of urgency, a return date of 1 July 2024 was provided by the Registry.
[2]
The notice of motion
The first I knew of the matter was an email at 11:52am on Monday 20 May 2024. My Associate requested copies of the affidavit in support of the notice of motion be provided to Chambers as the electronic copy was unable to be opened, as well as confirmation that the plaintiff's solicitor had been served and told that the motion was to be heard today, and information as to the time at which both parties could be ready to proceed in Court with the application.
The solicitor for the defendants had not advised the solicitor for the plaintiff that she was seeking to have the matter heard by the duty judge today. That notice was first given to the plaintiff's solicitor at 12:21pm at my instruction conveyed via my Associate.
The matter was heard at 2:00pm. The plaintiff opposed the application.
At 1:46pm the solicitor for the plaintiff forwarded an email advising that the Sheriff had confirmed that the eviction scheduled for 9:00am that morning at Casula had already been effected, and that the eviction scheduled for 10:00am at Wattle Grove had not been effected and that the Sheriffs' officers currently at the property "cannot wait at the property to execute the writ, due to other commitments".
The Court did not ask for the process of eviction at Wattle Grove to be interrupted and does not know why the Sheriffs' officers were asked to "wait", or why they did not complete the scheduled eviction.
The orders sought in the notice of motion were as follows:
1. An immediate order pursuant to section 67 of the Civil Procedure Act 2005 (NSW), that default judgment entered on 21 July 2023 against the defendants be either permanently stayed or pending the outcome of this motion.
2. An immediate order pursuant to sections 135(1), 135(2)(b) and 135(2)(c) of the Civil Procedure Act 2005 (NSW) that the plaintiff be prohibited from taking any further action to enforce the default judgment, either permanently or pending the outcome of this motion, noting the evictions are schedule to take place today.
3. An immediate order pursuant to Rule 36.16(2)(a), (b) or (c) of the Uniform Civil Procedure Rules 2005 (NSW) that default judgment entered on 21 July 2023 against the defendants be set aside on the basis that leave is granted by the Court to the defendants to file and serve its Defence within 14 days of the determination of this motion or within any period ordered by the Court.
4. Directions.
5. Costs.
6. Such further or other orders as the Court sees fit.
An affidavit of Valentina Colevski sworn 16 May 2024 was read in support of the notice of motion. There was no affidavit of any solicitor with conduct of the matter. There was no draft defence. No valid ground of defence was identified in the affidavit. Although there is reference to a potential "cross-claim", no valid basis for any such cross-claim was articulated. No explanation was given as to why no application to stay the execution and activities of the Sheriff scheduled for Monday 20 May 2024 at 9:00am and 10:00am was filed before the afternoon of Friday 17 May 2024. No explanation was provided as to why the urgency of the matter was not brought to the Court's attention until this morning at a time after the time fixed for evictions at Casula and Wattle Grove.
The solicitor who appeared for the defendants told the Court in answer to direct questions from the Court that she did not personally have conduct of the proceedings. She was a young solicitor of recent admission. It was evident that she had been provided with very little by way of instructions.
Neither the solicitor on the record, nor Mr Cole, the person who had conduct of the matter at least up to late March 2024, and before whom the affidavit of Ms Colevski had been sworn on Friday 17 May 2024, were in attendance. The deponent of the affidavit, Ms Colevski, did not attend.
This meant that the Court was not able to be assisted with what the grounds of defence may be, given that none had been filed even in draft form or in outline. The affidavit of Ms Colevski did not contain any recognisable grounds of defence.
The affidavit of Ms Colevski on its face consisted of irrelevant observations, invalid purported explanations and, unfortunately, untruthful statements.
Ms Colevski claimed that she had never received the default notice and that the "defendants did not receive the SOC and were not aware that legal proceedings had been commenced against them". She referred to an arrangement where the defendant invested funds in a development and that the defendants intended to "bring a cross-claim against the developer" but the grounds of any such cross-claim were not specified.
The affidavit made reference to asserted health problems and dysfunction on the part of their "previous" solicitor Mr Cole for a period in 2023, - being the "previous" solicitor, but still acting, albeit at a different firm - and then deposed to attempts to sell the Wattle Grove and Casula properties for a sum of $4 million which was to have taken place on 15 January 2024 but did not.
The following two paragraphs are difficult to decipher, but appear to be an attempt to explain that there is dispute over sums of money that the defendants were hoping would come to them, but have not:
"[27] Following termination, the Defendants believed the deposits paid on those contracts in the sum of $400,000.00 were to be forfeited to the Defendants, however, the purchasers have raised issue with the forfeiture of the same and are in the midst of negotiating the amount that is to forfeited. The Defendants conveyed this information to the Plaintiff's solicitors.
[28] For the avoidance of doubt, it was the Defendants intention to direct the forfeited deposits to the Plaintiff to be pay down the alleged debt owed. However, to date, the Defendants have been unable to do the same due to the issue raised by the purchasers and their request for the deposits to be returned on the basis of unconscionable conduct."
There is reference to negotiations regarding a property in which the first defendant has "a legal interest in as constructive trustee"(sic), and that the registered proprietor of the property has "agreed to sell same to assist the defendants", but there is no evidence of the existence of the (unspecified) property, the value of the first defendant's interest in that property, nor when those funds, whatever they may be, will be available.
[3]
Determination
When I made the orders dismissing the defendant's application, I indicated in broad terms my reasons for doing so. Those reasons were the inadequate explanation for the delay in making the application, the absence of any identified defence, and the inadequacy of the affidavit material.
I also expressed concerns regarding the suggestion that the solicitor with conduct of the matter in 2023 gave "poor advice", yet it seems that solicitor still has conduct of the matter at a different firm of solicitors, raising a potential conflict of interest, although that was not a reason why I refused the application.
I agree with and adopt the statement of relevant principles set out by Davies J in National Australia Bank Ltd v Hunwick [2017] NSWSC 798:
"[26] In Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 the joint judgment said:
[103] The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.
[27] Rule 21 of the Court Procedure Rules (ACT) 2006 is the equivalent of s 56 of the Civil Procedure Act 2005 (NSW).
[28] The joint judgment also said at [95] that the notion that considerations of delay and costs could never be as important as the raising of an arguable case was incorrect. The joint judgment also stressed that the significant matter was that a party had a sufficient opportunity to plead their case - see at [94], [102] and [112].
[29] Finally, the High Court stressed at [55] and [58] that the starting point for a particular application must be the rules governing such applications. In this Court that includes ss 56 and 58 of the Civil Procedure Act. Section 58(1)(a)(ii) provides that in deciding whether to make any order (inter alia) for a stay of the proceedings the Court must seek to act in accordance with the dictates of justice. Sub-section (2) says that in determining what are the dictates of justice in a particular case the Court must have regard to ss 56 and 57 and to the matters set out in sub-s (2)(b). Three of those matters are these:
(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,
…
(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),
(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings."
The delay of the defendants in making the application is explained only by the assertion by Ms Colevski that the advice given in 2023 was inadequate. It does not however provide any information as to what the "new advice" is, or how that could underpin a defence or cross-claim.
There is no detail as to when the "new advice" was given, or by whom, or what steps have been taken to draft relevant process or obtain counsel's advice about it.
There is nothing that explains why the notice of motion was filed so very late when notice of the Sheriff's attendance scheduled for 9:00am and 10:00am on 20 May 2024 must have been given some weeks ago.
A consideration of the matters set out in s 58 of the Civil Procedure Act all tell against the defendants. They have done nothing until the very last minute. The affidavit relied upon is unsatisfactory and contains untruths and obfuscations about what the defendants were served with and when, and what they must have known.
This is the third application for a stay, and nothing in the affidavit provides anything that indicates when the money due to the plaintiff may be available and the debt satisfied, or alternatively, provides a basis as to why the judgment entered in July 2023 should be set aside.
To permit the defendants to now, almost one year later, set aside the default judgment validly entered and still without any articulated ground of defence, and to stay the writ of possession, would be clearly inconsistent with ss 56 and 58 of the Civil Procedure Act.
These evictions have been on the cards since July 2023. Two applications to stay them - September 2023 and January 2024 - have been successfully made. The defendants have been provided with ample opportunity to file a defence if they truly had one, and instead have left their application to the last second and not argued it with adequate evidentiary material.
Accordingly, the notice of motion filed 17 May 2024 was dismissed with costs.
[4]
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Decision last updated: 22 May 2024