Weston (Trustee) v Sanna

1. The seventh respondent's interlocutory application filed on 24 May 2021 is dismissed.
2. The seventh respondent pay the applicant's and the first, tenth and eleventh respondents' costs of the application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

MARKOVIC J: 1 This is an application brought by Lepa Sanna, on an urgent basis, in effect seeking a stay of the sale of a property situated at 33 Circulo Drive, Copacabana, New South Wales (Copacabana ‍Property) which is scheduled to be offered for sale by auction tomorrow 26 ‍May 2021. Ms Sanna moves on an interlocutory application filed on 24 May 2021 (Application). The Application comprises 17 paragraphs. It is discursive in nature. By that description I mean no disrespect to Ms Sanna who acts for herself and has done the best that she can. However, in part it comprises submissions. Relevantly, at paragraphs 1 and 2 of the Application, Ms Sanna says (as written): (1) Based on new evidence that has only recently been received in relation to the previous Writ of Possession and subsequent sale of the property at 33 ‍Circulo ‍Drive, ("Copacabana") in 2012 that a urgent stay be granted for the current auction taking place of Copacabana on 26th May 2021 until this application is heard and determined; (2) A further Order that the sale of the Copacabana property be deferred until the determination of the hearing of Family Court PAC2399/2018 matter in relation to the setting aside of the Binding Financial Agreement to which the Transfers relied on by the Trustee as void under Section 120 and 121 of the Act would become invalid, which is next set down for 7 July 2021; Ms Sanna also relies on an affidavit sworn by her on 20 May 2021. Annexed to that affidavit are a series of documents which I understand she has obtained from Dentons Australia, formerly known as Gadens. Dentons Australia currently act for Paul Gerard Weston (Trustee), who is the trustee of Ms Sanna's bankrupt estate, and formerly acted for Australian Executor Trustees Limited (AETL) which was the mortgagee of the Copacabana Property. In summary, Ms ‍Sanna contends that AETL obtained a writ of possession in relation to the Copacabana ‍Property and that there was subsequently a sale of that property to a company called Arcadia Property Holdings Pty Ltd (Arcadia), with the knowledge of and permitted by AETL. She says that because of that sale the Trustee is not now permitted to sell the Copacabana Property. 2 This proceeding has had a long history. It was listed for hearing in 2018 and orders were first made and reasons for making those orders published on 24 January 2019: see Weston (Trustee) v Sanna [2019] FCA 32 (Sanna (No 1)). 3 The proceeding concerned two properties, being the Copacabana Property and a second property located at Green Valley. Ms Sanna's Application is limited to the Copacabana Property. In Sanna (No 1) the Trustee sought declarations pursuant to s ‍120 or, in the alternative, s 121 of the Bankruptcy Act 1966 (Cth) that a transfer of the Copacabana ‍Property by Ms Sanna was void against him and certain relief consequent upon the making of that declaration. 4 Relevantly, insofar as the Copacabana Property was concerned, Mr Sanna claimed that the Copacabana Property was transferred in equity to Arcadia pursuant to a contract for sale of that property entered into by Ms Sanna with Arcadia and with the consent of AETL for a sale price of $995,946: see Sanna (No 1) at [14]. 5 There was extensive evidence including by way of documentary evidence relied on by the parties in Sanna (No 1). Much of that material is now relied on by Ms Sanna in support of her Application. It is not new material. It was before me at the hearing and was addressed in Sanna (No 1). 6 In particular, at [74] and following of Sanna (No 1), I made findings based on the evidence before me relied on by the parties as to whether or not there had been a sale of the Copacabana ‍Property to Arcadia. At [74] and [75] in particular I made the following findings: 74 In my opinion, the inference to be drawn from the evidence is that on 2 August 2012 there was a partial refinance of the AETL Loan, not a sale of the Copacabana Property to Arcadia. The following facts support that conclusion: (1) first, AETL obtained judgment for possession and took out the Copacabana Writ which, I infer, caused Mrs Sanna to take a number of steps including putting the Copacabana Property on the market for sale; (2) secondly, the execution of the Copacabana Writ was scheduled to take place on 13 June 2012. On 14 May 2012 Gadens informed Mr ‍Dimitriou that if they received an unconditional contract for sale of the Copacabana Property they would seek their client's instructions. On the morning of 13 June 2012, a hastily drawn contract for sale of the Copacabana Property naming Arcadia as purchaser was provided to Gadens. The execution of the Copacabana Writ was accordingly stayed to 21 July 2012; (3) thirdly, settlement did not take place on 20 July 2012 as contemplated. An issue arose about the proposed deductions from the proceeds of sale and the amount that Mrs Sanna proposed to pay to AETL. Upon AETL making its requirements clear as to the amount it expected to receive in exchange for a discharge of mortgage and the provision of the certificate of title, Mrs Sanna was required to raise further funds; (4) fourthly, as set out at [63]-[64] above, that Mr Dimitriou first told Gadens that settlement would take place on 24 July 2012 and then said 25 July 2012, does not make Mr Sanna's position any stronger. Settlement did not occur on either of those dates. The involvement of DPI, a company in the control of Mr Dimitriou, from 24 July 2012 and the documents which were executed on 26 July 2012 involving DPI (as set out at [65] above) would suggest that settlement could not occur on those dates; (5) fifthly, on 24 July 2012 DPI retained Foleys to draft the suite of loan documents referred to at [65] above on an urgent basis. While some of those documents named four companies, including Arcadia, as borrowers, Mr and Mrs Sanna were guarantors and Mrs Sanna provided the Copacabana DPI Mortgage and Mr and Mrs Sanna provided a mortgage over the Green Valley Property as security for the monies advanced under the DPI Deed of Loan. In particular, under the Copacabana DPI Mortgage, Mrs Sanna was liable for repayment of the monies advanced by DPI and the 26 July 2012 Letter relevantly directed DPI to pay a portion of the loan monies to AETL in order to obtain a discharge of the AETL Mortgage and the balance of those monies to discharge other obligations of Mr and Mrs Sanna and companies associated with them. In other words, I would infer that, despite the inclusion of Arcadia as a borrower, the monies owed were advanced by DPI for the benefit of Mrs Sanna and parties associated with her to provide them with funding to meet a number of their obligations; and (6) sixthly, a search of the Copacabana Property dated 3 August 2012 shows that, as at that date, Mrs Sanna remained the registered proprietor, the mortgage to AETL was no longer registered and a mortgage to DPI had been registered on the title of the property. There was simply no evidence that Mrs Sanna held the Copacabana Property as bare trustee or otherwise for Arcadia. 75 Mr Sanna submitted that it was not necessary to have a transfer to effect a sale of property and that a transfer is only required to effect a registration of a transfer of title. He said that the only explanation for Arcadia not becoming registered on title was so that it did not have to pay stamp duty which was a prerequisite to registration. That may well be a reason, albeit illegitimate, why a purchaser would not register a transfer of property following a sale but, given that I am not satisfied that the contract with Arcadia was carried into effect and that the property was sold to it, it is not necessary for me to consider that submission. In any event, there was no evidence of that intention on the part of Arcadia and it is difficult to accept that a third party purchaser for valuable consideration would be prepared to proceed without a transfer and registration in its name of the asset purportedly acquired. That is particularly so in circumstances where Mr Sanna submitted that it was highly likely that Mrs ‍Sanna would become a bankrupt. 7 Those findings are contrary to the contentions now put by Ms Sanna. As submitted by the Trustee, in order for Ms Sanna to succeed on her application she would need to establish to a high likelihood that the judgment was procured by fraud. 8 To do so, Ms Sanna would need to obtain an understanding of the documents that were relied on by the parties when the matter was before the Court for hearing and what documents, if any, that she now seeks to rely on were not before the Court. She would also need to show that, if there were any documents of which she has now obtained copies and which were not before the Court, those documents could have made a difference had they been before the Court at the time of the hearing. Ms Sanna has not established that to be the case. As I have already said, it is evident that a great deal of the material she relies on was before the Court at the time of the hearing and indeed is expressly referred to in the reasons for judgment. 9 I do not intend to set out the particular documents and the paragraphs of Sanna (No 1) where the documents are referred to, but it is clear from a review of the material and from the reasons that that material was in evidence. That being so, as Ms Sanna has not discharged that onus, she has not satisfied me that I should order a stay. Ms Sanna, who was a party (albeit an inactive party) to the proceeding is bound by my findings and there has been no appeal from those findings by any party. 10 As an additional matter, as the Trustee also points out, Ms Sanna has not offered the Court an undertaking as to damages. This would have been necessary should I have been minded to make the orders sought by Ms Sanna. 11 Ms Sanna has also noted that she has a proceeding on foot in the Federal Circuit Court of Australia (Federal Circuit Court) in relation to a deed which she entered into with Mr Sanna which is said to be a financial agreement under s 90C of the Family Law Act 1975 (Cth) (FCC‍ Proceeding). It seems that that proceeding is next before the Federal Circuit Court on 7 ‍July 2021. For completeness, I note that the deed in issue in the FCC Proceeding was before the Court in this proceeding and is referred to in Sanna (No 1) at [36]-[39]. In any event, given that Ms Sanna has not met the threshold to obtain the stay, there is no basis upon which I can otherwise order a stay of the sale of the Copacabana Property until such time as the FCC ‍Proceeding is next before the Federal Circuit Court in relation to that deed. 12 The final matter raised in opposition to the making of the orders sought by Ms Sanna was the time it has taken her to bring this application. It is evident, based on the material before me that Ms Sanna was provided with at least some of the documents on which she now relies in October 2020 and it is correct that the matter has been before the Court on a number of occasions since that date. However, I accept that Ms Sanna was unaware that the auction of the Copacabana Property was imminent and that she did her best to bring the matter before the Court when she became aware of that fact, noting that she is self-represented. 13 For those reasons, Ms Sanna's interlocutory application filed on 24 May 2021 should be dismissed. 14 Each of the respondents to the application, other than Mr Sanna who supported the application and was self-represented, seeks their costs of the application. As Ms Sanna has been unsuccessful, an order should be made that she pay the costs of the Trustee, the applicant to the proceeding, and each of Defined Properties Investments Pty Ltd and Wyse & Young International Pty Ltd (in liq), the tenth and eleventh respondents respectively. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic.