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[2020] NSWSC 952
plaintiff. Judgment for the plaintiff for possession of 27 Ostend Street, Lidcombe under UCPR r 13.1; leave to issue and execute a writ of possession; indemnity costs; leave for the defendant to approach the...
The Court ordered Mr Chiciak to give up possession of the Lidcombe property because the loan was in default and the plaintiff was the registered mortgagee. The defendant's allegations about unconscionable conduct, fees and possible damages did not, as pleaded in this possession-only case, provide an arguable defence to possession. The Court did not decide whether damages might later be payable, what the final amount owing was, or how any sale proceeds should be accounted for. It also concluded that the National Credit Code did not apply because the borrower was a company, not an individual or strata corporation.
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2,276 words · generated 30/09/2026
Prime Capital Securities Pty Ltd sought summary judgment for possession of a residential property at 27 Ostend Street, Lidcombe. Its application was made under r 13.1 of the Uniform Civil Procedure Rules 2005 (NSW), and it also sought leave to issue a writ of possession and indemnity costs ([1]-[3]).
The original loan was not made by Prime Capital. Capital Securities XVIII Pty Ltd, a related body corporate of Prime Capital, advanced $600,000 to VC Administrator Pty Ltd under a loan agreement dated 19 June 2018 ([4]). Victor Bohdan Chiciak guaranteed VC Administrator's obligations and mortgaged the Lidcombe property as security ([5]-[6]). The Court noted that Mr Chiciak and his solicitor had sworn a statutory declaration confirming that he received independent legal and financial advice ([5]).
The loan was due for repayment by 30 June 2019. Interest or fee defaults occurred on 1 March, 1 April and 1 May 2019, and Mr Chiciak conceded that defaults had occurred ([7], [10]). There were negotiations about a replacement facility in May 2019. The parties initially accepted an offer for $720,000 subject to a valuation of at least $1.2 million. When the valuation came in at $1.1 million, Prime Capital offered a reduced facility of $660,000, which was rejected ([11]-[12]). Mr Chiciak then said he would repay the loan by 19 June 2019, but did not do so ([13]).
The Court recorded that the assignment of the loan and mortgage rights to Prime Capital was registered on the property title by 10 April 2019. It treated registration as supporting the inference that an effective assignment had occurred ([8]-[9]). Prime Capital gave a notice of default on 30 May 2019 and terminated the loan and demanded repayment on 20 June 2019 ([14]).
The defendant raised several points in the Amended Defence: that the National Credit Code applied, that Capital Securities had engaged in unconscionable conduct in inducing him to enter the guarantee and mortgage, and that some loan provisions were penal ([19]). The Court granted possession to Prime Capital, gave leave to issue and execute a writ, and ordered indemnity costs. It also gave the defendant leave to approach the Common Law Duty Judge for a stay of the writ, and directed the parties to negotiate through their legal representatives about the alleged sale and realising the best value for the property. The proceedings were otherwise dismissed.
The decision turned on the nature of the claim. Prime Capital sought possession, not a judgment for the outstanding loan balance or a final accounting of the parties' financial positions. Rothman J emphasised that amounts paid or payable, and consequences arising from possession and a mortgagee sale, were not issues raised by the Statement of Claim then before the Court ([23]).
The summary judgment threshold was demanding. The judge referred to General Steel Industries and Agar v Hyde, explaining that the tests in those authorities required a high degree of certainty about the outcome if the matter went to trial ([25]-[26]). He also set out the approach from Commonwealth of Australia v Griffiths, including that summary disposal deprives a party of a contested hearing and should only occur where there is no real question to be tried ([26] and the authorities quoted there).
Against that standard, the judge found that default was not in dispute ([10], [16]). The question was whether the defence allegations nevertheless provided an arguable answer to possession. The Court considered that the penal-term allegations related to fees and other amounts, not the $600,000 principal repayment obligation, and would not invalidate the loan as a whole ([20]).
The National Credit Code issue was resolved on the identity of the borrower. The Court said the Code applied only where the borrower was a natural person or strata corporation. Since VC Administrator was a company and not a strata corporation, the Code did not apply to the Loan Agreement ([21]). That conclusion concerned the loan agreement with VC Administrator, not a broader determination of every possible issue about the guarantee or mortgage.
The unconscionability allegation was treated differently. Rothman J considered it substantive and capable of argument, particularly given the allegation that Mr Chiciak had mental or psychiatric difficulties ([22]). But the judge distinguished the existence of a possible damages issue from a defence to the possession claim. No cross-claim for damages had been filed, and the proceedings did not ask the Court to decide that claim ([23]-[24]). The judge reasoned that, on the case as framed, the allegation might affect later monetary accounting but did not displace the obligation to repay principal or the registered mortgagee's claim for possession ([24] and the subsequent reasoning, whose paragraph numbering is unclear in the supplied text).
The Court also considered the defendant's distinction from Nibar Investments Pty Ltd v Manikad Pty Ltd. The defendant argued that Nibar concerned a borrower who personally received the loan, whereas Mr Chiciak was a guarantor of money advanced to a company. The judge noted, however, that the defendant did not dispute that he obtained a benefit from the loan. He therefore treated any possible damages claim as a matter to be dealt with when quantum was considered, rather than as a basis to defeat possession in this proceeding.
Finally, the judge relied on the registered status of the mortgage and the assignment. The notice-of-assignment objection was regarded as having little substance because the parties had acted as if the assignment had occurred, and the assignment was registered ([8]-[9], [17]-[18]). The judge described indefeasibility of registered title as fundamental and found that no exceptional circumstance capable of challenging the registered interest was before the Court. The practical result was judgment for possession, but with the possibility of a stay and further issues expressly left unresolved.
The judgment did not purport to change the law. It applied established summary judgment principles, referring to General Steel and Agar v Hyde as authorities requiring a high degree of certainty before a party is deprived of a trial ([25]-[26]). It also relied on Commonwealth of Australia v Griffiths for the caution associated with summary disposal, as quoted in the reasons.
Before this decision, the relevant procedural principle was that summary judgment is not appropriate where a real question remains to be tried. Rothman J applied that demanding approach but considered it satisfied in this particular claim because default was conceded and the defence did not answer the specific possession claim. The judgment is therefore best understood as a case-specific application of existing principles, not as a new general rule that allegations of unconscionability can never defend a mortgage possession claim.
The judge also used Nibar Investments to address the distinction between an obligation to repay principal and arguments that might affect monetary relief. The defendant identified a factual difference because he was a guarantor and the company received the loan. The Court recorded that distinction, then noted that Mr Chiciak accepted that he had obtained a benefit. The judgment does not establish that guarantors and borrowers are interchangeable in all circumstances; its reasoning is tied to the evidence and the possession-only claim before Rothman J.
On the National Credit Code, the judgment applied the borrower criterion in s 5(1)(a), as described by the judge. Because the borrower was a company other than a strata corporation, the Code did not apply to that loan agreement ([21]). The judgment does not address how the Code might apply to a different arrangement or a natural-person borrower.
After the decision, the orders resolved possession and costs, but left practical and monetary matters open. The defendant was permitted to approach the Common Law Duty Judge for a stay of the writ. The parties were directed to negotiate about the alleged sale and how best value might be realised. The judgment did not determine any damages claim, final reconciliation of the loan account, or the eventual distribution of sale proceeds ([23] and the orders).
At [21], the Court said that the National Credit Code applies only where the borrower is a natural person or a strata corporation, and that VC Administrator was neither. In plain English, the Code point did not succeed because the borrower named in the loan agreement was a company.
At [22], the judge described the unconscionability allegation as substantive and capable of argument. That matters because the Court did not dismiss the allegation as inherently baseless. Instead, it separated the potential merits of that allegation from whether it defeated the particular possession claim before it.
At [23], the judge said that questions about the effects of possession and a mortgagee sale, and about amounts paid or payable, were not then before the Court. In plain English, the judgment dealt with possession, not the final financial accounting.
At [24], the judge stated that the unconscionability and National Credit Code issues, and any potential damages award, did not appear to affect the requirement to meet the principal obligation in the possession proceedings. The important qualification is procedural: the Court was dealing with the Statement of Claim and Amended Defence then before it, and there was no cross-claim for unconscionability damages.
In the later reasoning, the judge said that the Amended Defence did not provide an arguable case against possession. The supplied text restarts its paragraph numbering after paragraph 26, so a reliable paragraph number for that passage cannot be given. Its significance is the connection between the conceded default, the registered mortgage and the limited relief sought.
The decision is most relevant where a mortgagee seeks possession by summary judgment, default is conceded, the mortgage is registered, and the pleaded defence principally concerns the amount owing or a potential damages claim rather than the validity of the mortgage or the right to possession. The judgment illustrates the Court separating a possession remedy from later disputes about interest, fees, unconscionability damages and accounting.
Its reasoning may be particularly relevant where a defendant argues that unconscionable conduct should operate as a shield against possession, but has not brought a cross-claim and the claim before the Court is possession-only. The decision does not say that unconscionability can never affect possession. Its conclusion depended on the way the claim and defence were framed, the conceded default, the benefit said to have been obtained by the guarantor, and the registered title.
It is also relevant where an assignment of mortgage rights has been registered and the borrower or guarantor disputes the notice of assignment. Here, the judge treated the registration and the parties' conduct as important, and considered the missing date on the notice to have little or no significance ([8]-[9], [17]-[18]).
The decision is less directly informative where the mortgage's validity is genuinely challenged, where the defendant seeks relief through a properly constituted cross-claim, where the borrower is an individual or strata corporation, or where a court must determine final quantum. The judgment expressly did not decide those broader situations.
The supplied judgment contains no information about how later courts treated Prime Capital Securities Pty Ltd v Chiciak. No later cases or subsequent judicial treatment are identified in the judgment text, and this analysis is confined to that source. It would therefore be unsupported to state that later courts followed, distinguished, applied or questioned the decision.
The judgment itself refers to earlier authorities. Rothman J applied the summary judgment principles in General Steel Industries and Agar v Hyde and cited Commonwealth of Australia v Griffiths for the demanding standard governing summary disposal. He considered Nibar Investments in relation to the possible separation between a principal repayment obligation and arguments that might limit monetary liability. Those are the precedent relationships visible in this judgment; they do not establish how later courts treated Chiciak.
For research purposes, any claim about later treatment would require checking subsequent judgments and current legal sources beyond the material supplied here. That research limitation is particularly important because this was an ex tempore decision focused on the pleadings and evidence in one possession application.
The judgment left several matters unresolved. First, it did not determine whether Capital Securities or Prime Capital engaged in unconscionable conduct. Rothman J considered the allegation capable of argument but did not decide its merits in the possession proceedings ([22]-[24]).
Second, the Court did not determine whether damages were payable or their amount. The judge contemplated that a properly brought damages claim might produce an amount greater than or less than $600,000, and treated that as a matter for later proceedings or consideration alongside quantum.
Third, the decision did not settle the amount ultimately owing under the loan. The parties disputed the amount, and there were allegations about penal fees and other amounts. The Court distinguished those matters from the immediate possession claim rather than conducting a final reconciliation ([17], [20], [23]).
Fourth, the orders did not determine whether a stay of the writ would be granted. The defendant received leave to approach the Common Law Duty Judge with a motion for a stay. The judgment records permission to make that application, not its outcome.
Finally, although the parties were directed to negotiate about the alleged sale and the best way to realise value, the judgment does not state what agreement, sale process or outcome followed. It also does not explain the eventual treatment of sale proceeds or any later claim for damages.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have it checked by a qualified Australian lawyer.
Solicitors: QBM Lawyers (Plaintiff) Lexes Lawyers (Defendant) File Number(s): 2019/273149)
EX TEMPORE Judgment
Endnotes
Prime Capital Securities Pty Ltd
Victor Bohdan Chiciak
(2000) 201 CLR 552
(2007) 70 NSWLR 268
(1964) 112 CLR 125
(1949) 78 CLR 62
(1993) 177 CLR 598
[2000] HCA 41
[1964] HCA 69
Judgment for the plaintiff for possession of 27 Ostend Street, Lidcombe under UCPR r 13.1; leave to issue and execute a writ of possession; indemnity costs; leave for the defendant to approach the Common Law Duty Judge for a stay of the writ; direction that the parties negotiate through legal representatives about the alleged sale and realising the property's best value; proceedings otherwise dismissed.