St George Bank v Udowenko and Ors

Civil Procedure Act 2005 Common Law Procedure Act 1899 LEGISLATION CITED : Interpretation Act 1987 Supreme Court Act 1970 Supreme Court Procedure Act 1900 Uniform Civil Procedure Rules 2005

CASES CITED : Attorney General of NSW v Wilson [2010] NSWSC 1008 Perpetual Ltd v Kelso and Anor [2008] NSWSC 906

Plaintiff - St George Bank Limited PARTIES : First Defendant - Michael Udowenko Second Defendant - Helen Udowenko Third Defendant - Valentyn Udowenko

COUNSEL : COUNSEL: Plaintiff - Mr P Newton

SOLICITORS: SOLICITORS : Plaintiff - Kemp Strang Defendants - Volodymyr Udovenko, unrepresented

• 11 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION SCHMIDT J

2003/89248 ST GEORGE BANK LIMITED v UDOWENKO AND ORS

JUDGMENT 1 HER HONOUR: These proceedings were commenced by the plaintiff in 2003. Orders were sought in respect of land situated at Vacy in New South Wales, the subject of a mortgage. A default judgment for possession was given in favour of the plaintiff in March 2004 and a writ of possession was then issued. 2 Before the Court now are two motions. The motions were supported by various affidavits sworn by officers employed by the plaintiff. The first motion was filed in January 2010, in which leave to issue a writ of restitution was sought, in order to restore to the plaintiff possession of the land. The second motion filed in June 2000 sought orders that a sealed copy of the judgment of 15 March 2004 be issued, with the following endorsement:

"To Michael Udowenko, Helen Udowenko, Valentyn Udowenko and Volodymyr Udovenko, you are served with a copy of this Judgment and you are liable to imprisonment or to sequestration if you do not give possession of the land contained in Certificate of Title Folio Identifier 3/37244 known as 956 Gresford Road, Vacy New South Wales 2421, to the plaintiff, or if you remain upon that property, or if you re-enter that property after possession has been delivered to the plaintiff." 3 The orders sought were opposed.

The background 4 The background to the motions was not contested. The defendants obtained various stays in respect of the writ of possession over the years after March 2004. On 24 October 2008, the defendants' application to set aside the default judgment granting the plaintiff possession was dismissed. Neither the March 2004 nor the 24 October 2008 judgments were appealed by the defendants. The plaintiff was put in possession of the land in November 2008, after the defendants and Mr Volodymyr Udovenko, the son of two of the defendants and the brother of the third, were forcibly evicted. 5 It was not in issue that some time later the defendants and Mr Volodymyr Udovenko re-occupied the property. At the hearing, Mr Volodymyr Udovenko appeared for the defendants. He explained that he lived with them at the property when they were all evicted and that he is now residing there with them again. He explained that the re-occupation had occurred some weeks after they had been evicted, when they became concerned about the state of stock which remained on landlocked land and which was suffering from not being watered. Mr Udovenko said that the RSPCA had been approached to deal with the stock, but when it failed to take steps, the defendants had reoccupied the property, where they still remained. Why the stock remaining on the land needed to be watered, necessitated the defendants and Mr Volodymyr Udovenko re-occupying the property was not apparent. They have refused requests to leave the property. On the evidence, the NSW Police Force has refused to provide further assistance to the plaintiff in removing the occupiers of the property, in the absence of a further Court order.

The writ of restitution 6 The defendants resisted the issuing of the writ, arguing that they were entitled to a trial by jury, both in relation to the plaintiff's original application for possession and on this motion. Mr Udovenko had twice sworn an extensive affidavit, in relatively identical terms, in which the basis for this claim was explained. The defendants also challenged the Court's jurisdiction in the proceedings, those submissions being developed in writing. In summary, the defendants assert a right to a jury trial relying on various things, including the common law; Magna Carta; the Constitution; the Royal Coat of Arms; the Confirmation of the Charters 1297; the Petition of Right 1627; the Supreme Court Procedure Act 1900; the Common Law Procedure Act 1899; the Interpretation Act 1987; and common law principles such as the principle of natural justice. 7 The plaintiff relied on the approach of Johnson J in Perpetual Ltd v Kelso and Anor [2008] NSWSC 906, where his Honour described the writ of restitution procedure at [19] - [26]:

"19 It is appropriate that I refer briefly to certain legal issues. The writ of restitution is a recognised procedure where, after entry by the Sheriff under a writ of possession, a defendant forcibly resumes possession of the subject land and the plaintiff seeks to have possession restored. It is a writ in aid of another writ of execution: r.39.1(1)(g), Forms 61, 62, Uniform Civil Procedure Rules : Ritchie's Uniform Civil Procedure NSW, LexisNexis at [39.1.35]; Pitcher v Roe (1841) 9 Dowl 971; Alliance Building Society v Austen [1951] 2 All ER 1068.

20 The use of a writ of restitution has been acknowledged in later cases. In Abram v National Australia Bank Ltd (Court of Appeal, 1 May 1997, BC9701553) Powell JA, at pages 54-55, observed that re-entry by a defendant, after the execution of a writ of possession by the Sheriff, constitutes a trespass with the plaintiffs' remedy being an application for an order in the nature of a writ of restitution. Powell JA cited, in this respect, Pitcher v Roe and Alliance Building Society v Austen .

21 In Maher v Commonwealth Bank of Australia (No 2) (2004) 211 ALR 656 at 658 [6], Finkelstein J observed that there are cases where a defendant has retaken possession within a short period after possession has been taken where the Court would, upon application, issue a writ of restitution. His Honour cited Pitcher v Roe , Alliance Building Society v Austen and R v Elliott [1955] VLR 126.

22 There is a clear foundation for the course of action taken by the Plaintiff in this case, namely to seek a writ of restitution.

23 I should observe that, if this was a case where the writ of possession had not already been executed, and the Defendants were seeking to set aside a default judgment, a number of hurdles would lie in their path. As Simpson J observed in Balanced Securities Limited v Oberlechner [2007] NSWSC 80 at [19], there are three components which an applicant needs to establish in an application to set aside default judgment. Firstly, an explanation for the failure to defend at the appropriate time. Secondly, a good (arguable) defence on the merits, and thirdly, that it is in the interests of justice to allow the proposed defence to be litigated. Her Honour continued at [20] to observe that, although it is not necessary that a defendant establish that the proposed defence will or must succeed, it is necessary to determine the question having in mind the competing interests of the parties - on the one hand the plaintiff who has properly, legitimately and regularly obtained judgment, and on the other hand, a defendant who has been deprived of an opportunity to advance what might be a legitimate defence.

24 On the material which has been advanced in support of the present application, in my view the Defendants would have grave difficulty on an application to set aside default judgment before a writ of possession had been executed. In circumstances where the writ has already been executed, their position is hopeless.

25 A power of sale under s.58 Real Property Act 1900 is to be exercised for the purpose of the plaintiff recovering moneys which are due and owing to it as a mortgagee (see s.58(3)). Even where a plaintiff takes possession of the property for the purpose of exercising its power of sale, a defendant may obtain an injunction restraining a mortgagee from exercising the power of sale if the amount of the mortgage debt (if this is not in dispute) is paid, or (if the amount is disputed) the amount claimed by the mortgagee is paid into Court: Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 at 164-167, 168-169; GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889 at [17].

26 If the Defendants wish to challenge the propriety of any conduct of the Plaintiff in respect of the enforcement of its security, it remains open to them to do so in other proceedings: see Carr v Finance Corporation of Australia Ltd (1982) 150 CLR 139 at 152; Adelaide Bank Limited v BMG Poseidon Corp Pty Ltd [2008] NSWSC 68 at [25]." 8 I respectfully adopt his Honour's observations. On the evidence in this case, there is no question that as a result of the orders made by the Court in the March 2004 judgment, the plaintiff is entitled to possession of the property. The re-occupation of that property after the defendants and Mr Udovenko were evicted, has not been demonstrated to rest on any right to its possession or occupation. The circumstances are such that justice cannot permit the refusal of the relief sought by the plaintiff. 9 The approach which the defendants have adopted is not an available way by which the Court's judgments may be challenged in the proceedings, or the Court's discretion to grant the further relief sought, notwithstanding the views which the defendants hold in relation to their rights to a jury trial. 10 Jury trials in this Court are governed by s 85 of the Supreme Court Act 1970. It provides: " 85 Trial without jury unless jury required in interests of justice

(1) Proceedings in any Division are to be tried without a jury, unless the Court orders otherwise. (2) The Court may make an order under subsection (1) that proceedings are to be tried with a jury if: (a) any party to the proceedings: (i) files a requisition for trial with a jury, and (ii) pays the fee prescribed by the regulations made under section 18 of the Civil Procedure Act 2005, and (b) the Court is satisfied that the interests of justice require a trial by jury in the proceedings. (3) The rules may prescribe the time within which a requisition must be filed for the purposes of subsection (2) (a). (4) A fee paid under this section is to be treated as costs in the proceedings, unless the Court orders otherwise. (5) In any proceedings in which the Court has ordered a trial by jury, the following questions of fact must be tried without the jury: (a) questions of fact on a defence arising under section 63 (5) or 64 (1) (c) of the Workers' Compensation Act 1926 or section 151Z (1) (e) of the Workers Compensation Act 1987 , (b) any other question of fact ordered by the Court. (6) This section does not apply to proceedings in any Division for defamation. Note. Section 21 of the Defamation Act 2005 makes provision for jury trials in defamation proceedings. " 11 The defendants have never made an application for a jury trial in accordance with that provision. Were it to have been made, it is likely to have failed. As Johnson J discussed in Kelso at [14], there are obvious difficulties with such a course:

"14 A further and related argument which was put was that, in the absence of the consent of the Defendants to the entry of judgment, the Defendants were entitled to trial by jury of the Plaintiff's claim. In this respect, the affidavit relied upon by the Defendants, and their oral submissions, have touched upon Magna Carta and what are said to be other statutory foundations for such an entitlement. This argument is misconceived. Section 85 Supreme Court Act 1970 makes clear that proceedings in any Division of this Court are to be tried without a jury unless the Court otherwise orders. There are in s.85(2) certain prerequisites to the making of an order for trial by jury. As Mason P observed in Maroubra Rugby League Football Club v Malo (2007) 69 NSWLR 496 at 499 [16], the power to order trial by jury is only engaged if s.85(2) is complied with. I mention this essentially to explain why trial by jury is entirely inapplicable to proceedings of this type, and certainly no steps were taken here which could in any way activate the section. The submission based upon a suggested right to trial by jury is fatally flawed."

12 There have been other litigants who have unsuccessfully pursued similar arguments to that advanced in these proceedings by the defendants, in this and other Courts. In Attorney General of NSW v Wilson [2010] NSWSC 1008, for example, Davies J outlined Mr Wilson's repeated unsuccessful pursuit of a jury trial, including in proceedings for possession of land. 13 Undoubtedly it may have been convenient for the defendants and Mr Volodymyr Udovenko to re-occupy the property, in order that the stock could be watered. That it was necessary for them to do so, or that they had any right to do so, was not shown. There was certainly no evidence that the plaintiff had been approached or had consented to the re-occupation. The plaintiff had been given the right to possession of the property by the Court's March 2004 orders and had in fact taken possession under those orders. That the defendants and Mr Udovenko had no right to take the actions which Mr Udovenko described in his submissions, cannot be doubted on the evidence before the Court. 14 For these reasons it follows that justice demands that the writ of restitution sought be granted.

The certified copy of the judgment 15 The plaintiff sought these orders pursuant to Rule 36.12 of the Uniform Civil Procedure Rules 2005, which provide for the Registrar to issue a certified copy of a judgment which has been entered, on payment of the prescribed fee. Endorsement on the judgement in the terms of the endorsement sought, is dealt with in Rule 40.7 which provides: " 40.7 Service of copy of judgment before committal or sequestration (cf SCR Part 42, rule 8) (1) A judgment is not enforceable by committal or sequestration unless: (a) a sealed copy of the judgment is served personally on the person bound by the judgment, and (b) if the judgment requires the person to do an act within a specified time, the sealed copy is so served within that time or, if that time is extended or abridged, within that time as extended or abridged. (2) If the person is a corporation, the judgment is not enforceable by committal of an officer of the corporation or by sequestration of the property of an officer of the corporation unless, in addition to service under subrule (1): (a) a sealed copy of the judgment is served personally on the officer, and (b) if the judgment requires the corporation to do an act within a specified time, the sealed copy is so served before that time expires. (3) The sealed copy of the judgment must bear a notice (naming the persons concerned) that the person served is liable to imprisonment or to sequestration of property: (a) where the judgment requires the person to do an act within a specified time, if the person fails to do the act within that time, or (b) where the judgment requires the person to do an act forthwith or forthwith on a specified event, if the person fails to do the act as so required, or (c) where the judgment requires the person to abstain from doing an act, if the person disobeys the judgment. (4) If a person liable to committal or sequestration by way of enforcement of a judgment has notice of the judgment: (a) by being present when the judgment is directed to be entered, or (b) by being notified of the terms of the judgment, whether by telephone, telegram or otherwise, the judgment may be enforced against that person by committal or sequestration without service having been effected in accordance with this rule. (5) The court may dispense with service under this rule. (6) This rule does not apply to a committal or sequestration arising from a failure to comply with the requirements of a subpoena." 16 The defendants opposed the making of the orders sought, Mr Udovenko explaining that they were elderly and in ill health and that his mother had been seriously assaulted during the 2008 eviction, which has resulted in proceedings being brought in this Court, against those involved. He also explained that the defendants opposed being put at risk of imprisonment in circumstances where they had been denied their Constitutional rights as citizens, to a trial by jury. 17 As I have explained, the defendants do not have the rights asserted. While there is a right to seek a jury trial, that is a right which has never been exercised and even if it had been, is likely to have failed. 18 The purpose of the service of a judgment containing the endorsement which the plaintiff seeks, is to provide a clear warning of the consequences of a deliberate or contumacious failure to comply with the Court's March 2004 judgment and orders. Unless they are set aside, the defendants are obliged to comply with them, as are all other litigants who come before this Court and against whom orders are made. The obvious way in which the defendants will avoid what they are concerned about, is to comply with the Court's orders. That is a matter that rests in their hands. If the Court's orders are ignored, the plaintiff will be free to pursue further relief. 19 The endorsement should be directed to the defendants. I can see no basis on which it should refer to Mr Volodymyr Udovenko. He is not a party to the proceedings. While he has himself asserted no right to occupy the property, the endorsement contemplated by Rule 40 is one directed to persons bound by the judgment, which requires the person to do an act or refrain from doing an act. The judgment in respect of which the endorsement is sought is not directed to Mr Volodymyr Udovenko. 20 The exercise of the Court's discretions in these proceedings is governed by the provisions of s 56 of the Civil Procedure Act 2005, which provides: 56 Overriding purpose (cf SCR Part 1, rule 3) (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (4) A solicitor or barrister must not, by his or her conduct, cause his or her client to be put in breach of the duty identified in subsection (3). (5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs." 21 I am satisfied that in this case consistently with those obligations, which fall both on the Court and the parties to the proceedings, and having in mind the evidence to which I have referred, the orders which the plaintiff otherwise seeks must be granted on the basis I have outlined, if justice is to be done between these parties.

Costs 22 The usual order is that costs should follow the event. In the circumstances here before the Court, I can see no basis on which there can justly be any departure from the usual rule.

Orders 23 For the reasons given, I make the following orders

1. The plaintiff is given leave to issue a writ of restitution to restore to the plaintiff possession of land comprised in certificate of title folio identifier 3/37244 situated and known as 956 Gresford Road, Vacy New South Wales, 2421.

2. A sealed copy of the Court's judgment in these proceedings of 15 March 2004 be issued with the following endorsement: "To Michael Udowenko, Helen Udowenko and Valentyn Udowenko, you are served with a copy of this Judgment and you are liable to imprisonment or to sequestration if you do not give possession of the land contained in Certificate of Title Folio Identifier 3/37244 known as 956 Gresford Road, Vacy New South Wales 2421, to the plaintiff, or if you remain upon that property, or if you re-enter that property after possession has been delivered to the plaintiff." **********

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