Perpetual Trustee Company Ltd v Nomak Holdings Pty Ltd

Judgment 1On 16 June 2009, Perpetual Trustee Company Ltd ("Perpetual") commenced proceedings claiming possession of land at Darlinghurst owned by the first defendant, a company, Nomak Holdings Pty Ltd ("Nomak"). As well, Perpetual claimed monetary judgments against Nomak and the second defendant, Ms Donna Batiste. 2Perpetual's claim is set out in an Amended Statement of Claim which was filed on 6 July 2009. Ms Batiste was at all material times the sole director and shareholder of Nomak. 3On 16 July 2009, Ms Batiste filed a Defence on behalf of herself and Nomak, in which she asserted that the loan made by Perpetual amounted to "asset lending" and that at all relevant times Perpetual knew that the only way the loan could be repaid was by sale of the property which was Ms Batiste's residence. Ms Batiste (and Nomak) denied that any monies were due and owing as claimed. 4Ms Batiste also filed with the Defence her own affidavit sworn on 16 July 2009. It included evidence to the effect that she had been incapacitated after being hit by a motor vehicle whilst she was crossing the road. No other details were provided about her accident, her injuries or the nature and extent of her incapacity. 5On 9 September 2009, Perpetual filed a Notice of Motion seeking summary judgment or, alternatively, that the Defence be struck out and default judgment entered in the absence of a defence. 6The Motion was adjourned on a number of occasions until it came before the Court on 1 February 2010. On that day, the Court made orders by consent which disposed of the proceedings. A consent judgment was entered against Nomak, in favour of Perpetual, for possession of the Darlinghurst property. A Writ of Possession was subsequently issued. 7The consent judgment of 1 February 2010 included an order that each of Nomak and Ms Batiste pay Perpetual the sum of $628,478.26 as at 3 June 2009, plus interest, charges and costs to the date of payment. 8On 27 June 2013, Perpetual caused a Bankruptcy Notice to be served on Ms Batiste. It claimed a total outstanding debt of $121,506.97, which was the balance outstanding after a credit of $543,882.18 was allowed against the original judgment sum. It appears that this credit represented the net proceeds of sale of the Darlinghurst property. 9On 16 July 2013, which was over three years after the monetary judgment was entered by consent in favour of Perpetual, Ms Batiste filed a Notice of Motion in this Court seeking an order setting aside that judgment: "... due to the mortgagors breach of their duty of care &good faith &irregular conduct in the sale of the property" (sic) 10This Motion was accompanied by an affidavit sworn on 11 July 2013. From the contents of that affidavit, Ms Batiste set out the following facts: (a)She was the guarantor of a loan made to Nomak by Perpetual; (b)During the period of the loan, neither Nomak nor she could make the loan repayments in accordance with the loan requirements; (c)Prior to February 2010, she made arrangements to sell the property, before it was repossessed, so that she could pay out the loan from the proceeds of sale; (d)The sale which she arranged could not be completed within a time period which was satisfactory to Perpetual; (e)Perpetual brought proceedings to enforce its rights and obtain possession of the property; (f)Due to her illness, unemployment, injuries and disabilities she has not made any repayments on the loan; (g)She felt "coerced" to enter into the consent judgment; (h)She believes that the sale of her apartment was accompanied by irregular conduct of an unspecified kind which resulted in the sale of the property at an undervalue; and (i)She was an aged pensioner, who had no assets or capacity to pay the judgment. 11On 19 September 2013, pursuant to an order of the Court that she file any further evidence upon which she relied, Ms Batiste filed a further affidavit. The affidavit commences with the stated intention that Ms Batiste wanted the judgment overturned or set aside: "... so that I am given a fair and reasonable opportunity to challenge the alleged debt so that I will not be bankrupted and to be able to call and cross examine witnesses in my defense, and to provide further material evidence to the Court." (sic) 12Ms Batiste's affidavit concentrated on the events and circumstances surrounding her attempt to sell the property through the real estate agent whom she had appointed, the events and circumstances surrounding the ultimate marketing of the property by the real estate agent appointed by Perpetual to sell the property, and the sale of the property. 13In short, Ms Batiste contends that she would have been able to successfully sell the property for $650,000 had Perpetual, through its appointed agent, cooperated with her in respect of that sale. She adduces evidence that ultimately the property was sold for $620,000 by Perpetual which, she asserts, was an inappropriate sale at less than the property market price. 14She also contends that at the time she agreed to the consent judgment, Perpetual - or an agent on its behalf - had induced her to agree to the judgment (in February 2010) on the basis that Perpetual would allow her a "fair and reasonable time to sell the property". 15The affidavit annexes various documents which establish the following: (a)that the property was offered for sale by public auction on 15 July 2010 - that is five and a half months after the consent judgment, having been marketed by Perpetual's agent for a four week period; (b)that possession of the property was not in fact taken by Perpetual until sometime after 17 May 2010 and probably in the first week of June 2010, that is, about four months after the consent judgment was entered; (c)that the only offer upon which Ms Batiste was relying to sell the property for $650,000 was not a firm, nor an unconditional, one. In an email of 17 May 2010, from Ms Batiste to Perpetual's then agent, Pepper Home Loans, the terms of the buyer's offer was sent to Pepper Home Loans. It was in these terms: "I remain very keen. So would be grateful if you could please: ● email my lawyer (Grant) the draft agreement and strata report to review; ● see if we can get another week for me to get my finance into place; ● advise if the seller would accept $650K running the numbers with lower rent (from its current state) does not support $675K." This seems to me to be a negotiating stance rather than a firm offer. Even if it was to be regarded as an offer, it was highly conditional, there was no certainty or even probability that agreement would have been reached. No other purchaser was ever identified. (d)that the sale of property was completed by a settlement which took place on 19 August 2010. Ms Batiste was informed shortly after that settlement that the shortfall was $203,842.42. By email of 4 February 2011, she told Perpetual's agent that she was not sure that this was the correct amount, and that she thought that: "When the property was repossessed the figure was around $100,000" (e)that on 23 February 2011, Kemp Strang, the lawyers for Perpetual, notified Ms Batiste that Perpetual accepted her proposal to resolve the outstanding debt by payment of $75,000 in three equal sums over the following 12 months - with the payments of $25,000 due in June 2011, September 2011 and January 2012. Ms Batiste acknowledged her agreement in writing on 7 March 2011 to this arrangement. No such payments were ever made. 16The Notice of Motion filed on 16 July 2013 came before the Court for directions on a number of occasions and was ultimately listed for final hearing before the Registrar on 29 November 2013. 17On 26 November 2013, by email, Ms Batiste sought an adjournment of one week due to an unspecified "medical problem". She was informed by return email that such an adjournment would not be granted and that if she wished to persist in the application a medical certificate would be required. Perpetual informed Ms Batiste that it would not consent to an adjournment of the hearing of the Motion. 18By a further email on 28 November 2013, Ms Batiste renewed her application for an adjournment and submitted further proposed orders. No medical certificate was provided. Her request was declined by the Registrar, who informed her that the matter remained listed for hearing on the following day. 19On 29 November 2013, when the matter was called, Ms Batiste did not appear and the Registrar made orders dismissing the Motion filed on 16 July 2013 and ordered Ms Batiste to pay Perpetual's costs. 20On 5 December 2013, Ms Batiste filed a Notice of Motion seeking a review of the orders made by the Registrar on 29 November 2013. She filed an affidavit in support of the Motion on that day. 21On 25 June 2014, Price J made orders, by consent, setting aside the orders of the Registrar of 29 November 2013. He also ordered, in effect, that Ms Batiste's original Notice of Motion of 16 July 2013 be heard afresh and determined. 22Accordingly, this judgment deals with Ms Batiste's Motion of 16 July 2013 to set aside the consent judgment entered on 1 February 2010. 23In addition to the evidence previously described, Ms Batiste also relies upon an affidavit sworn on 28 November 2014. The substance of that affidavit relates to the content of a Notice to Produce dated 21 October 2013, which was apparently served in October 2013, requiring production of documents by 1 November 2013. 24As well, when the hearing of the Motion commenced, Ms Batiste sought to call upon a Notice of Motion in identical terms to the one which had previously been served, requiring production of a range of documents on Friday 28 November 2014. 25Counsel for Perpetual produced one document in answer to paragraph 7 of the Notice to Produce, and otherwise submitted that the Notice should be set aside for failure to comply with r 34.1(1) of the Uniform Civil Procedure Rules 2005 ("UCPR"). That rule permits a party to serve a Notice to Produce upon any other party requiring production to the Court of "... any specified document or thing". 26Perpetual submitted that the form of the Notice to Produce did not comply with this requirement because the terms of it required production of broad classes or groups of documents and did not adequately refer to a specified document. 27I ruled that the Notice failed to comply with r 34.1, and accordingly, by order, set aside the Notice. The reason for that order was the manifest non-compliance with the obligation upon the party serving the Notice to address it in terms which specify a particular document. Description of a class of documents or a range of documents does not fall within a Notice permitted by the rule. 28In addition to the affidavits upon which Ms Batiste relied, in the course of submissions made from the bar table, including in answer to questions from the Bench, Ms Batiste volunteered some further information. Having confirmed her submission that the original consent judgment was entered into as a result of the agreement of the solicitors for Perpetual to allow her a fair and reasonable time to sell the property, Ms Batiste gave a further factual account of that agreement. She said that the agreement, upon the basis of which she entered into the consent judgment, was one in which she was given a fixed period (to the best of her recollection of between six and eight weeks) to arrange for the sale of the property; that she had not done so during that period; she had sought and been granted an extension of that period; and that when she communicated, by the email of 17 May 2010 to which I have earlier drawn attention, the offer of the then proposed purchaser, she was seeking a further extension of time to enable the sale to go ahead; and that both the further request for an extension of time and the offer had been rejected by Perpetual. 29Ms Batiste also acknowledged that her entry into the agreement in March 2011 to repay Perpetual the sum of $75,000, reflected a sum of money that she had negotiated which, on her view, represented the sum which she thought was outstanding under the loan less an adjustment in the sale price of the property to reflect the $30,000 price difference between the offer that she wished to accept and the price obtained at public auction. She accepted that this was the sum that she contended was properly due. 30When asked whether there was any evidence that explained the delay between the entry of consent judgment and filing of the Motion in July 2013, in addition to the period occupied up until August 2010 when the sale of the property was completed, Ms Batiste pointed to negotiations which had taken place resulting in the agreement of March 2011, and that in 2012 she had made a complaint against Perpetual to the Financial Ombudsman Service, which had in turn been referred by them to the Credit Ombudsman Service. She also said that shortly after the Credit Ombudsman Service had finalised her complaint, without any relief for her, Perpetual, by its solicitors, had served her with a Bankruptcy Notice, and that she had brought the Notice of Motion to set aside the judgment in order to avoid the consequences of the Bankruptcy Notice. 31In the course of her submissions, Ms Batiste characterised the purchaser whose offer I have referred to earlier, as being a genuine purchaser who was apparently an investor who worked for a bank in either South Australia or Western Australia (she referred to both States), and who, had Perpetual's agent agreed to an extension of time and to accept the price, would have gone ahead with the purchase. 32Perpetual opposed the relief sought in the Notice of Motion.