Sayed & Anor v National Australia Bank Ltd

ex tempore Judgment 1I have before me a notice of motion seeking an extension of a stay of a writ of possession issued at the behest of National Australia Bank (the Bank). The Bank took proceedings against the present applicants, Mr and Mrs Sayed, for recovery of possession of a property situated at Woonona (the Woonona property). The Bank sought possession as mortgagee of the Woonona property under a mortgage to secure advances made to Mr and Mrs Sayed. 2The proceeding for possession came on for hearing before Adams J on 20 August 2012. In the proceeding before Adams J, Mr Sayed was not represented, although Mrs Sayed was represented. On 23 August 2012, following negotiations between the parties, a document was signed that was described as an in principle agreement (the in principle agreement). Specifically, para 1 of the in principle agreement stated that it was "[b]inding but subject to formal deed that will contain further terms not inconsistent" with the in principle agreement. The word "non" before the word "binding" was struck out, and bears the initials of Mr and Mrs Sayed. 3There was then a dispute as to whether or not a binding agreement had been reached between Mr and Mrs Sayed, on the one hand, and the Bank, on the other hand. It appears that Mrs Sayed accepted all the terms of a proposed deed of settlement. Mr Sayed resisted the terms of the proposed deed of settlement that consisted of a mutual release, whereby the Bank and its agents would have been released from any liability to Mr and Mrs Sayed in respect of the matters complained of. One of the matters asserted, by way of answer to the claim for possession, was that the Bank had acted in breach of its duty to Mr and Mrs Sayed in the exercise of a power of sale in respect of another property situated at Corrimal (the Corrimal property). Mr Sayed asserted that the Bank had failed to take reasonable steps to obtain a fair price for the Corrimal property when it exercised its power of sale. The Corrimal property was security for the same indebtedness of Mr and Mrs Sayed to the Bank. 4The Bank then sought a declaration that there was a binding agreement to settle the claim that was part heard before Adams J. On 6 September 2012, Adams J made procedural directions for the hearing of the application by the Bank for a declaration that there was a binding contract and for specific performance of that contract. His Honour directed that affidavits by Mr and Mrs Sayed be filed no later than 10 September 2012. 5The Bank's application for hearing came on before Rein J on 22 October 2012. Neither Mr Sayed nor Mrs Sayed had filed any evidence. However, on the day fixed for the hearing, Mr Sayed sought to rely on two affidavits bearing the date 8 October 2012, one sworn by him and one sworn by Mrs Sayed. Rein J refused to receive the affidavits. In his reasons, Rein J observed that Mr Sayed had that morning sought to tender two affidavits, one by himself and one by Mrs Sayed. While they bore the date 8 October 2012, Mr Sayed asserted that they had only been sworn during the week before the date of the hearing, that is, during the week before the 22 October 2012. They were provided to counsel for the Bank just before the commencement of the hearing. His Honour observed that the affidavits had not been served within the timetable set by the Court, which had provided for any affidavits to be served by 10 September 2012. 6The affidavits raised issues relating to Mr Sayed's claimed medical condition on 23 August 2012, when the in principle agreement was signed, and made allegations of duress and coercion. The Bank objected to reliance on the affidavit material. His Honour refused to receive the affidavits, given that the matter had been fixed for hearing some time previously and Mr and Mrs Sayed had been given ample opportunity to file any evidence and to articulate any matters on which they wished to rely. 7His Honour considered that it was not consistent with the dictates of justice that Mr and Mrs Sayed be permitted to spring such allegations on the Bank at such a late hour. His Honour observed that in none of the correspondence from Mr Sayed after 23 August 2012 did he assert that he had been unwell or had not willingly signed the in principle agreement. His Honour considered that the correspondence prior to the in principle agreement made it clear that the parties envisaged that mutual releases would be given. The correspondence after the in principle agreement saw a number of matters raised by both Mr Sayed and Mrs Sayed, all of which were resolved, in some cases by the Bank agreeing to amend or withdraw terms that were not accepted. 8His Honour noted that Mr Sayed raised several matters in answer to the Bank's contentions that the in principle agreement was binding. First, he claimed that he had not agreed to the in principle agreement being binding, and that it had been drafted by counsel for the Bank and originally said "non-binding". He claimed that he had not understood what "mutual releases" meant. He claimed that the emails sent after the settlement had not been sent to him. He said that he was told there would be a stay of execution of the judgment if he and his wife found a buyer. He said he believed that the buyer had conspired with the Bank to obtain the Corrimal property at a low sum, and he wanted to sue the agent and his former partner in the Corrimal project. Finally, he said there was no agreement on the outstanding matters seen in the correspondence. 9Rein J concluded that those matters should be rejected. His Honour observed that the fact that there was disagreement between the Bank and Mr Sayed on any of the terms of the proposed deed did not produce the result that there was no agreement. If the parties were not able to agree on the outcome, the Court was required to determine objectively whether the words in dispute were consistent with the in principle agreement and, if not inconsistent, which of the competing versions more adequately represented or was consistent with the stated or implicit considerations productive of settlement and, if relevant, in accordance with practice. His Honour concluded that there was no doubt that the parties entered into a binding agreement on 23 August 2012. 10The only outstanding issue was whether the release should include agents of the Bank. His Honour was in no doubt that mutual releases were to be included. That term was sought by Mr and Mrs Sayed and agreed to by the Bank. His Honour accepted that, objectively, it must have been envisaged by the parties that all matters relating to the proceeding were to be brought to finality by the settlement, including release of the Bank itself, and its servant and agents, in connection with the loan and the sale of the Corrimal property. 11Mr Sayed and Mrs Sayed lodged an application for leave to appeal from the orders made by Rein J on 22 October 2012. Because the proceeding for enforcement of the settlement had been commenced by way of notice of motion in the principal proceeding, it appears that Mr and Mrs Sayed erroneously believed that the orders made by Rein J were interlocutory and that they therefore needed leave to appeal. It is the usual practice for a proceeding to enforce a settlement in a current proceeding to be commenced by way of interlocutory application in the proceeding. However, the order that is made in relation to such an application is a final order, since it resolves the principal proceeding. 12The application for leave to appeal came on for hearing before Beazley JA, as she then was, and Barrett JA on 20 February 2013. While the Bank had previously indicated it would consent to any leave, since there was an appeal as of right, the Bank actually opposed leave at the hearing of the application for leave on 20 February 2013. The application for leave to appeal was dismissed. However, in the course of the hearing, the Court made clear to Mr Sayed that he had a right of appeal and could lodge a notice of appeal. There may be some question as to whether that notice of appeal was out of time but, having regard to the prior process to which I have referred, it is unlikely that an extension of time would not have been granted. No notice of appeal has yet been filed. 13The terms of the settlement agreement required a payment of some $700,000 by 23 December 2012. There was no compliance with that term and hence the Bank's entitlement to possession crystallised. However, on 20 February 2013, the Court granted a stay for four weeks of the writ of possession that had been issued at the behest of the Bank. The justification for the stay of four weeks was to enable Mr and Mrs Sayed time to seek legal advice concerning the formulation of a notice of appeal. 14A draft notice of appeal had been prepared in connection with the application for leave. The grounds of appeal are singularly uninformative. They are as follows: 1.His Honour failed to consider an important piece of evidence. 2.His Honour did not allow the defendants' affidavits into evidence. 3.The defendants' affidavits may have led to a different outcome on the motion. 4.The Court should have been adjourned and witnesses called to give evidence, given the content of the defendants' affidavits. 15I am by no means persuaded that there is any real prospect of success in an appeal if those are the only grounds. However, it is no doubt possible that some further ground might be formulated and some further evidence put on to indicate that there was a miscarriage of justice by reason of his Honour's rejection of the affidavits produced on the hearing of the proceeding on 22 October 2012. 16The Court of Appeal considered that four weeks was an appropriate time within which Mr and Mrs Sayed could propound an acceptable notice of appeal with legal assistance. Mr Sayed, who appeared in person this morning, and purportedly on behalf of Mrs Sayed, relied on an affidavit sworn on 14 March 2013. In that affidavit, he refers to the fact that he attended a hearing before the Court of Appeal on 20 February 2013, when a stay of the writ of possession was ordered to enable him to apply for pro bono assistance. He was told that he could apply for an extension if he needed more time. 17He says that, on 21 February 2013, he made some enquiries about pro bono assistance and found that he was required to file a notice of motion. He also had to provide evidence of having been rejected pro bono assistance from Legal Aid, the Law Society, the Bar Association and some legal firms. He completed an application for pro bono assistance to the Bar Association on 21 February 2013. On the following day, he received a communication from the Bar Association confirming receipt of that application. On 25 February 2013, he filled out a Legal Aid application for his wife to sign. He was unable to complete a Legal Aid application for himself because copies of his tax returns were required, and his tax returns for 2012 and 2013 had not been filed. 18On 25 February 2013, he asked his accountant to expedite the preparation of his tax returns so that he could lodge them in connection with his application for Legal Aid. On 26 February 2013, Mr Sayed faxed a copy of his wife's Legal Aid application and, on 27 February 2013, he telephoned the Law Society and spoke to someone there about its pro bono scheme. He was told that he had to be refused legal assistance by Legal Aid in order to qualify for their scheme. 19On 1 March 2013, Mr Sayed received an application form from the Law Society. On 4 March 2013, Mr Sayed completed an online form for legal assistance from Slater & Gordon solicitors. On 7 March 2013 and 11 March 2013, Mr Sayed asked his accountant if they required more information to complete his tax returns. They responded on 11 March 2013. It is not clear whether they have all the information or not. 20On 11 March 2013, Mr Sayed received a telephone call from somebody purporting to work for Slater & Gordon, during which he answered a series of questions about the legal issue. He was informed at the end of the discussion that Slater & Gordon do not provide pro bono legal assistance for commercial litigation. As at the date of Mr Sayed's affidavit, he had received no reply from the Bar Association in relation to his pro bono application, nor had there been a reply from Legal Aid for Mrs Sayed's application. It is against that background that Mr Sayed seeks a further stay, which is opposed by the Bank. 21Counsel for the Bank has indicated that, if the sheriff activated the writ of possession, some preliminary steps would be taken before physical ejection of the occupiers of a property took place. He also informed the Court that it is the practice of the sheriff not to take proceedings over festivals such as Christmas and Easter. I have no way of knowing whether that is the current practice or not, not that I doubt that counsel believes what he has told me. 22The real concern of the Bank is that, according to material filed on behalf of Mr and Mrs Sayed, the value of the Woonona property is no greater than the amount secured on it. The Bank's counsel has also indicated that Mr Sayed had previously informed the Court that he proposed to sell the Woonona property, although Mr Sayed's response is that he wished to do so only in order to realise funds for legal fees. 23In all of the circumstances, it seems that there is little utility in extending the stay. However, I am mindful of the fact that, at least in theory, the sheriff could act over Easter. Whether or not that is likely is a different matter. I am disposed to extend the stay until 2 April 2013, conditional upon there being filed no later than this Wednesday a notice of appeal indicating grounds that have some prospects of success. Such an order is somewhat difficult, because it depends upon the form of the notice of appeal as to whether or not the condition is satisfied. In the circumstances, I think the appropriate course is to order that the stay be extended, conditional upon a notice of appeal being filed no later than Wednesday 20 March 2013, but reserve to the Bank the right to move for the stay to be dissolved if, when a notice of appeal is filed, there is no indication of grounds that have any prospect of success.