Supreme Court
New South Wales

Medium Neutral Citation:

Perpetual Limited (formerly known as Perpetual Trustees Australia Limited) v Marwa Dilati [2011] NSWSC 891

Hearing dates:

3 August 2011

Decision date:

18 August 2011

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

(1) Mr Khalid is to be joined as second defendant to these proceedings.

(2) The default judgment for possession of the land contained in folio identifier X/XXXXXX situated and known as XX XXXXX XXXX XXXXXX in the State of New South Wales be set aside.

(3) Mr Khalid is to file and serve a defence within 14 days.

(4) Costs are reserved.

Catchwords:

PROCEDURE - civil - application for joinder as defendant - application for default judgment for possession to be set aside - whether applicant has an arguable defence

Legislation Cited:

Uniform Civil Procedure Rules 2005
Supreme Court Act 1970

Cases Cited:

Adams v Kennick Trading (International) Ltd & Ors (1986) 4 NSWLR 503.
Cohen v McWilliam (1995) 38 NSWLR 476
Cuttle v Brandt (1947) 64 WN (NSW) 96
Davies v Pagett (1986) 10 FCR 226
Evans v Bartlam [1937] 2 All ER 646
Perpetual Limited v Dilati [2011] NSWSC 548
Secure Funding Pty Ltd v Coughlin [2009] NSWSC 384
Vacuum Oil Pty Ltd v Stockdale (1942) 42 SR (NSW) 239

Category:

Procedural and other rulings

Parties:

Khalid Ali Khalid - Applicant
Perpetual Limited (formerly known as Perpetual Trustees Australia Limited) -Respondent

Representation:

MW Young - Applicant
N Bearup - Respondent
Pope & Spinks - Applicant
Gadens Lawyers - Respondent

File Number(s):

2009/296958

Judgment

1HER HONOUR : By notice of motion filed 15 July 2011, the applicant seeks, firstly, an order that he be joined as the second defendant to these proceedings; and secondly, an order pursuant to 36.16(2) of Uniform Civil Procedure Rules 2005 ('UCPR') that the default judgment for possession of the land contained in folio identifier X/XXXXXX situated and known as XX XXXXX XXXX XXXXXX in the State of New South Wales be set aside.

2The plaintiff is Perpetual Limited (formerly known as Perpetual Trustees Australia Limited) ("Perpetual"). The defendant is Marwa Dilati ("Mr Dilati"). The applicant on the motion is Khalid Ali Khalid ("Mr Khalid"). Perpetual Limited relied on the affidavit of Ian Ross Hammond sworn 27 July 2011 and two affidavits of Kris Sabatino both sworn on 25 January 2010. Mr Khalid relied on his affidavits sworn 5 May 2011, 22 May 2011, 15 July 2011 and 26 June 2011. Both Mr Khalid and Ms Sabatino were cross examined only on the issue of whether the notice to occupier was served.

3It is common ground that if Mr Khalid does not have an arguable defence he should not be joined as an occupier.

Joinder of a party

4Mr Khalid relies on Rules 6.24, 6.27 of the UCPR and s 65 of the Supreme Court Act 1970 to be joined as a party to these proceedings.

5UCPR 6.24 and 6.27 provide:

"6.24 Court may join party if joinder proper or necessary

(1) If the court considers that a person ought to have been joined as a party, or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party.

(2) Without limiting subrule (1), in proceedings for the possession of land, the court may order that a person (not being a party to the proceedings) who is in possession of the whole or any part of the land (whether in person or by a tenant) be added as a defendant."

6.27 Joinder on application of third party

A person who is not a party may apply to the court to be joined as a party, either as a plaintiff or defendant."

6Mr Khalid is an occupier of these premises. Since mid 2009, he has lived there with his family. His family comprises of his wife Domenica and their six children Mouminah aged 21, Maryam aged 19, Muslima and Sulayman both aged 16, Humzah aged 11 and Harith aged 6.

7On 3 March 2011, default judgment was entered that Ms Dilati give possession of the property to Perpetual Limited and that she pay Perpetual the sum of $570,958.60. Previously, Mrs Dilati had consented to having judgment for possession being entered against her. Mr Khalid does not seek to set aside the judgment for the monetary sum entered against Mrs Dilati.

Background

8For present purposes, I have accepted Mr Khalid's evidence, except on the topic of service of the notice to occupier. I shall refer to this later in the judgment.

9During 2004, discussions took place between Mr Khalid, Mr Mohammed Dilati and Ahmed Dilati (son of Mr and Mrs Dilati). These negotiations occurred in this fashion, as it is an Arab custom for a man not to have direct dealings with a woman who is not a member of his family.

10In 2004, Mr Khalid had a conversation with Mr Mohammed Dilati in words to the following effect:

Mohammed: We are going to sell out house in Greenacre.

Mr Khalid: I'm interested in buying it.

Ahmed: Our real estate agent says he had found a purchaser for $840,000.

Mr Khalid: I can buy it for that but I would have to pay the money off over time.

Mohammed: I agree. When you have paid the price then we will transfer the property to you, but you can live in the house in the meantime.

11Mr Khalid deposed that there were several other conversations at the time between himself and either Mohammed or Ahmed Dilati in similar terms.

12Mr Khalid is a strong believer in the Islamic faith. In 2004, he believed that Islam prohibited him from borrowing money at interest, and hence He could not consistently with his faith apply for a loan to purchase the Greenacre property. He thought it would be necessary for him to pay the house off instalments over time. Recently, however, he has been told by his Imam that his understanding was wrong, and that he could have obtained a home loan without offending against Islamic law.

13Mr Khalid's wife informed him and that after he had the conversation with Mohammed Dilati and Ahmed Dilati, she had a conversation with Marwa Dilati in words to the following effect:

Domenica: My husband is going to buy your house, have you heard?

Marwa: I am pleased that you'll be buying the house and that you'll be living there.

14Mr Khalid was told by Mohammed Dilati that, "When you have paid the price then we will transfer the property to you but you can live in the house in the meantime."

Written document dated 20 May 2005

15On 28 April 2005, Mr Khalid made a payment of $280,000 to Ahmed Dilati as part payment for the property. On about 20 May 2005, their agreement was reduced to writing by notes prepared by Ahmed Dilati. It reads as follows:

"1) Wich Amount where Going to regestier

The Sale For (check with Accountant)

2) $840,000.00 $340,000

3) Received $430,000.00

4) Balance $415,000.00

5) 1 Year - To 3 Year

6) The/when The house has been paid off in full (That means there should be no money owing on the House) (The (CAVE) MUST be Paid Off by Ahmed in four month) Then We would Transfer the house under Rhalad's name.

7) Every Thing has to be paid by both parties According to the LAW.

8) Moving Discussion with Both Parties

9) Ahmed will fix Kitchen His way

10) If ANY CONFLICT WE JUDGE OUR SELF TO ISLAMIC RULES.

* Moving in Four Mounth

[signed]

20-5-05"

[sic]

16Towards the end of 2005, Mohammed Dilati and Marwa Dilati moved out of the property and Mr Khalid was given the keys to the house. He did not move in immediately, but allowed Ahmed Dilati and his wife to live there.

17On 31 July 2008, there was a fire in the house which made it unliveable until renovations could be carried out. The property was uninsured. The renovations were carried out by Mr Khalid and took about a one year to complete. During this time the property was vacant.

18In the middle of 2009, Mr Khalid's wife moved into the property with his daughter. Mr Khalid joined them in the property later. Mr Khalid deposed that no later than August 2009, his family has been in continuous occupation of the property.

19Mr Khalid believed that successful attempts were made to settle a dispute between Mr Khalid and Mrs Dilati according to Islamic rules. The dispute centred around the fact that the defendant encumbered the property with a mortgage.

20From 28 April 2005 to 10 June 2010, Mr Khalid had paid about $760,000 to the Dilatis and to Perpetual. The moneys were paid to Perpetual on 21 June 2008, the sum of $7,279.24, on 25 May 2010 the sum of $6,355.71 and finally, on 10 June 2010, the sum of $2,054.05.

Setting aside default judgment

21The power to set aside judgment is contained in UCPR 36.16. It relevantly reads:

"36.16 Further power to set aside or vary judgment or order

(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.

(2) The court may set aside or vary a judgment or order after it has been entered if:

(a) it is a default judgment (other than a default judgment given in open court) or

...

(c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order.

..."

22The authorities on setting aside default judgment are Evans v Bartlam [1937] 2 All ER 646; Vacuum Oil Pty Ltd v Stockdale (1942) 42 SR (NSW) 239; Cuttle v Brandt (1947) 64 WN (NSW) 96; and Adams v Kennick Trading (International) Ltd & Ors (1986) 4 NSWLR 503. Hillsan's counsel referred to Adams v Kennick Trading (International) Ltd , where Hope JA (with whom Glass and Mahoney JJA agreed) held that in determining whether "sufficient cause" has been shown to set aside a default judgment, the court must look to the whole of the relevant circumstances which include inter alia the existence of a bona fide grounds of defence on the merits, an adequate explanation for the failure to defend and any delay; and in determining whether there are bona fide grounds of defence the court must not try the issues to be determined at the trial: what is required is that the court determine that the facts sworn to as providing a defence, if established at the trial, would afford a defence and that the defence is set up bona fide.

23One of the considerations to be taken into account when determining whether default judgment should be set aside was expressed by Priestley JA in Cohen v McWilliam (1995) 38 NSWLR 476 at 481 quoting from the Federal Court in Davies v Pagett (1986) 10 FCR 226:

"It is, however, another question whether concern about the extent of delays, either in a particular case or generally, should, in the absence of prejudice in the particular case, be taken into account in exercising a discretion to set aside a default judgment. The fundamental duty of the court is to do justice between the parties. It is, in turn, fundamental to that duty that the parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. Any limitation upon that opportunity will generally be justified only by the necessity to avoid prejudice to the interests of some other party, occasioned by misconduct , in the case, of the party upon whom the limitation is sought to be imposed. The temptation to impose a limitation through motives of professional discipline or general deterrence is readily understandable; but, in our opinion it is an erroneous exercise of the relevant discretion to yield to that temptation. ..."

24This court should look to the whole of the relevant circumstances including an adequate explanation for delay and the existence of a bona fide defence on its merits. Delay is not in issue here. Mr Khalid acted expeditiously when he became aware that judgment for possession had been entered. Overall the fundamental duty of this court is to do justice between the parties.

25Perpetual submitted that Mr Khalid does not have an arguable defence because Mr Khalid has no standing to challenge its contractual relationship with Mrs Dilati because of privity of contract and he is seeking to put into issue disputes that have not been raised by Mrs Dilati.

The proposed defence

26The proposed defence raises four main issues. They are, firstly, past performance of a contract of sale between himself and Mrs Dilati; two redraws were not authorised by Mrs Dilati, service of notice as to occupier; and the validity of the s 57(2)(b) notice.

27Mr Khalid claims that his right to possession of the property is superior to Perpetual's. Perpetual also submitted that as Mr Khalid occupies the property under licence he has no interest in the land. The relevant paragraphs of the defence plead:

"11 With respect to paragraph 14, the Second Defendant admits that the Mortgage confers a right on the Plaintiff to take possession that is contingent upon default by the First Defendant, but says that default is not the only contingency that must be satisfied to exercise that right, as the right is also contingent upon the issuing and expiry of a valid default notice. The Second Defendant otherwise does not admit that paragraph.

12 With respect to paragraph 15, the Second Defendant denies the Plaintiff currently has a right of possession to the Land; does not admit that the First Defendant has failed to pay monies to the plaintiff; denies that the balance due on 4 November 2009 was $551,529.33; and denies that the sum has been calculated in accordance with the terms of the agreement.

13 With respect to paragraph 16, the Second Defendant does not admit the First Defendant received the said notice, and says further that the notice was not a proper notice as there was no default as described in the said notice.

...

25 In 2004 the Second Defendant and the First Defendant (by her agent Mohammed Dilati) made an agreed ("the Sale Agreement"), whereby the Second Defendant would purchase from the First Defendant the Land for the sum of $840,000 to be paid gradually over time, with the Second Defendant entitled to occupation of the Land pending completion of the Sale Agreement.

26. A written memorandum of the Sale Agreement was prepared in May 2005 and signed by the Second Defendant and by the First Defendant's agent Mohammed Dilati.

27. The Sale Agreement has been part performed by:

a. The first defendant permitting me to take possession of the Land;

b. By the Second defendant taking possession of the Land in or about August 2009; and

c. The Second Defendant has paid the sum of $775,689.40 under the Sale Agreement to the First Defendant towards the purchase price of the Land.

28 The Second Defendant is, and has been at all material times since August 2009, in physical occupation of the Land as against the First Defendant.

29 The Second Defendant is, and has been at all times during these proceedings, the occupier of the Land, and in possession of the Land.

30 In the circumstances that the Plaintiff has no present right to possession of the Land, the Second Defendant's rights to possession of the land, as occupier and current possessor of the Land pursuant to the Sale Agreement, are superior to the Plaintiff's rights to possession of the Land."

28As previously stated, Mr Khalid disputes two redraws between Perpetual and Mrs Dilati, one occurring on 12 June 2007 for the sum of $130,000 and the other for the sum of $200,000 on 23 January 2009. He alleged that these redraws were not made at the request of Mrs Dilati nor made with her authority, as they are made by her son Ahmed Dilati for his benefit.

29There is evidence to support Mr Khalid's claims that he entered into a written contract with Mr Dilati in May 2005 and that there has been part performance of that contract and by Mrs Dilati entering into the contract with Mr Khalid she has breached her obligations under clauses 3.6(2) and 222 of her agreement with Perpetual.

30Perpetual also holds a registered first mortgage over the property and in the absence of fraud, with that comes indefeasibility of title. Perpetual argued that it has a superior legal right to possession, whereas at best Mr Khalid has an equitable interest in the land since Perpetual possibly had constructive notice of Mr Khalid's possession of the property. There can be competing interests in the land and it may be that Perpetual is entitled to legal possession but so not as to disturb the occupation of Mr Khalid.

31Mr Khalid also argued that the s 57(2) notice issued by Perpetual is invalid and it is not entitled to possession. It is not necessary on this application for this court to determine these issues other than to find that they are arguable.

32It is my view that Mr Khalid has an arguable defence that he may be entitled to remain in possession of the property. He should be given the opportunity to argue this matter at trial.

Service on occupier

33Rule 6.8 of the UCPR provides:

"6.8 Originating process for recovery of land to be served on occupier

(1) If, when proceedings for possession of land are commenced, a person (the occupier ) not joined as a defendant is in occupation of the whole or any part of the land, the plaintiff:

(a) must state in the originating process that the plaintiff does not seek to disturb the occupier's occupation of the land, or

(b) must serve the originating process on the occupier together with a notice to the effect that:

(i) the occupier may apply to the court for an order that the occupier be added as a defendant, and

(ii) if the occupier does not so apply within 10 days after service, the occupier may be evicted under a judgment entered in the occupier's absence.

(2) For the purposes of subrule (1), documents may be served on the occupier personally or by leaving the documents on the land concerned addressed to the occupier by name or addressed simply "to the occupier".

(3) If originating process is amended by the addition of a claim for possession of land, the time at which proceedings for possession of that land are commenced is taken, for the purposes of subrule (1), to be the time at which the amendment is made."

Service of the notice to occupier

34On 25 January 2010, Ms Kris Sabatino deposed that on 16 November 2009 she served the occupiers of the premises with a notice to occupier and a statement of claim with Supreme Court language notice by delivering to and leaving them under the door at the premises. At the time of service she observed the premises as being renovated and apparently unoccupied.

35In cross examination, Ms Sabatino stated that she put the notice to occupier in a clear folder and slid it under the front door of the premises. She took some photographs as shown in Ex 1. She observed by looking through the glass windows that that room to the right looked unoccupied. There was only paint and a white plastic table in there, which to her, looked like the painters were using it as a workroom. On 17 November 2009, Ms Sabatino emailed Perpetual's solicitor (Ex 2) as follows:

"Place is a mess. Looked in the front window and it does not seem to be occupied

Neighbour said that no one lives there that they are just fixing it up.

..."

36Mr Khalid deposed that his family were in occupation of the premises at the time when Ms Sabatino attended the property. He says that they have lived at the property continuously since before 16 November 2009 and that any important looking correspondence delivered to the premises was shown to him by all member of his family. However, in cross-examination, Mr Khalid conceded that he could not be sure whether he was residing at the premises but he maintained that he had not seen the notice to occupier. Counsel for Mr Khalid submitted that I should prefer Mr Khalid's evidence as Ms Sabatino's affidavit was sworn two months after service took place and in her email (Ex 2), she does not state that she served the notice of occupier.

37On this topic, I prefer the evidence of Ms Sabatino. She had contemporaneous notes and photographs and a good independent recollection of events. Mr Khalid was vague as to the actual date he moved back into the premises. It is my view that the notice as to occupier was served. That being said, that ground of the defence should not be permitted to be raised in his defence.

38The default judgment for possession of the land contained in folio identifier X/XXXXXX situated and known as XX XXXXX XXXX XXXXXX in the State of New South Wales be set aside.

39Mr Khalid is to file and serve a defence within 14 days.

Is Mr Khalid an occupier of the property?

40Mr Khalid relied on UCPR 7.8 and s 65 of the Supreme Court Act . UCPR 7.8 provides that the court may give the conduct of the whole or any part of any proceedings to such person as it thinks fit. Section 65 reads:

"65 Order to fulfil duty

(1) The Court may order any person to fulfil any duty in the fulfilment of which the person seeking the order is personally interested.

(2) The Court may, on terms, make an interlocutory order under subsection (1) in any case where it appears to the Court just or convenient so to do.

(3) The powers of the Court under this section are in addition to any other powers of the Court."

41In Secure Funding Pty Ltd v Coughlin [2009] NSWSC 384, Schmidt AJ (as she then was) stated at [10] to [12]:

"[10] The term "occupier" is not defined in the Rules. Various authorities have however, considered the position of family members of tenants and other occupiers. In National Commercial Banking Corp of Australia Ltd v MRM Holdings Ltd 3 BPR 9339, it was observed at 9341-9342:

...

Mr Jacobson of counsel, who appeared for the bank, submitted that "occupier" in this context means a person with some contractual right to possession. At the same time he fairly conceded that it was not easy to give an exhaustive definition of the word "occupier".

Reference was made to R v Assessment Committee of St Pancras (1877) 2 QBD 581 at 588, where Lush J said, in relation to a rating statute: "It is not easy to give an accurate and exhaustive definition of the word 'occupier'. Occupation includes possession as its primary element, but it also includes something more. Legal possession does not of itself constitute an occupation. The owner of a vacant house is in possession, and may maintain trespass against anyone who invades it, but as long as he leaves it vacant he is not rateable for it as an occupier. If, however, he furnishes it, and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, though he may well reside in it one day in a year."

It was submitted by Mr Jacobson that Mr Munnoch Jnr had a bare licence from the owner or from Mr Munnoch Snr to reside in the premises and was not an occupier.

Miss Merkel, who appeared for the owner, submitted that the precise meaning of the word "occupier" must depend on the purpose for which, and the context in which, it was used. Sometimes occupation denotes legal possession in the technical sense, sometimes mere physical presence: Pro-Campo Ltd v Cmr of Land Tax (NSW) (1981) 81 ATC 4270 at 4276. Reference was also made to Stroud's Judicial Dictionary , 4th ed Vol 3 p 1812 et seq (and second supplement p 131), as illustrative of the various meanings of which may be attributed to the term "occupier", depending upon the context.

She submitted that occupation may be shared with others and relied upon Strand Securities Ltd v Caswell [1965] 1 Ch 959 at 980, and the various cases there cited. She sought to distinguish the judgment in Hodgson v Marks [1970] 3 All ER 513, in particular a passage in the judgment of Ungoed-Thomas J at 523, where his Honour said in relation to the Land Registration Act 1925: "Actual occupation requires physical presence. It was suggested at one stage of the argument that the occupation had to be exclusive. But it has been established that "actual occupation may be shared with others or had on behalf of others" (see Strand Securities Ltd v Caswell ). If occupation can be shared, then in the present case there was no advantage in maintaining that it nevertheless had to be exclusive; and this was not pressed. But it requires more than physical presence - a guest to dinner in not an occupier of the house or room in which he dines. Indeed the defendant submitted that mere personal residence does not constitute occupation; and I agree. The observations in the Strand Securities case, which were referred to, clearly do not in my view establish the contrary."

It was further submitted that the purpose of Pt 7 r 8 is that the persons in occupation of land should have opportunity of being joined as defendants in proceedings of possession of land. The question whether the occupants have a defensible right against the person seeking possession is irrelevant.

If the benefit of the rule were limited to persons who must in any case be joined as defendants, it would be superfluous.

An effect of requiring that notice be given is to allow the opportunity for exercise by the occupants of legal or contractual rights against some third party, of which the person seeking possession may to have notice.

...

[11] In Kerr v Sheriff (NSW) (1996) 9 BPR 16,215, it was observed at 16,216:

The purpose of the "notification to occupier" is to make sure that it is received by the persons who have the right to defend their possession of the property, so that person can intervene in the proceedings. It is not intended that every person whose fate must depend on the fate of the tenant must receive a notice.

[12] In Bankstown Airport Ltd v Noor Al Houda Islamic College Pty Ltd [2002] NSWSC 193, Young CJ in Eq said at [64]-[69]:

[64] There is little discussion in the authorities as to who is an occupier under the Rule. The most extensive discussion is in the judgment of Carruthers J in National Commercial Banking Corp of Australia Ltd v MRM Holdings Pty Ltd (1983) 3 BPR 9339 at 9341-3. See also my decision in Kerr v Sheriff (NSW) (1996) 9 BPR 16,215.

[65] The general rule is that "wives, children, servants, friends and visitors of tenants or under tenants" (see Cole on Ejectment, (H Sweet, London, 1857) at p 84) are not considered occupiers. In particular, the occupation rights of employees are considered the occupation of the employer; see eg Mayhew v Suttle (1854) 4 E & B 347; 119 ER 133.

[66] It must be remembered that the present action for possession under s 79 of the Supreme Court Act 1970 replaced the action for ejectment under the Common Law Procedure Act 1899. Although that action replaced the fictitious Doe v Roe action (see Oxford Meat Co Pty Ltd v McDonald (1963) 63 SR (NSW) 423 at 426), it still carried with it some of the attributes of the still earlier action. Under the former procedure, the person named as defendant might not be the person principally interested in defending possession against the plaintiff. Indeed, the action might be a wholly collusive one between the named plaintiff and the named defendant.

[67] The procedure was thus devised for a judge to grant the real defendant leave to defend which was taken up into the NSW Common Law Procedure Act 1899, s 214. The section gave a right to any person who "was in possession of the land by himself or his tenant." A person was in possession if he or she claimed de facto possession against the plaintiff: Oxford Meat Co Pty Ltd v McDonald (1963) 63 SR (NSW) 423 at 428.

[68] The authorities on the section and the corresponding English provision showed that the section was liberally construed. As long as an affidavit was filed that showed the applicant claimed possession, the leave was given. However, a person claiming under the defendant was not a person claiming possession. Thus, wives, licensees etc were excluded. However, sub-tenants, people in adverse possession and beneficiaries under a trust in actual possession were entitled to defend. As to this last category see Longbourne v Fisher (1878) 47 LJ Ch 379.

[69] In my view, the term "occupier" in Pt 7 r 8 carries the same connotation. An occupier is a person who claims to be in possession and who would have been the sort of person to receive leave to defend under the old practice. This conclusion fits in well with the conclusion reached in National Commercial Banking Corp of Australia Ltd v MRM Holdings Pty Ltd (above)."

42On 24 May 2011, in these proceedings, McCallum J in her judgment Perpetual Limited v Dilati [2011] NSWSC 548 stated at [27] and [28]:

"[27] The jurisprudence as to the reason an occupier is entitled to be made aware of the proceedings and to be joined as a defendant if he so wishes does not reveal a clear statement of principle to inform that issue. In ANZ Banking Group v Wright (unreported) 3 July 1997 Giles CJ Comm D (as his Honour then was) said:

The provisions of the Rules to which I have referred are referred (sic) are protective of the occupier of land of which a plaintiff claims possession from a defendant. The occupier may have rights good against the plaintiff which the defendant is not concerned to uphold, and if the plaintiff seeks to disturb his occupation is given the opportunity to assert his rights. A case such as Minet v Johnson (1890) 63 LT (NS) 507 illustrates the mischief addressed: although the note to Pt 7 r 8 in Ritchies' Supreme Court Procedure states that the purpose of the rule is "to prevent collusive ejectment actions", the occupier is protected even in the absence of collusion between the plaintiff and the defendant.

[28] As his Honour there noted, the decision in Minet v Johnson (1890) 63 LT (NS) 507 stands as authority for the proposition that even in the absence of collusion between the plaintiff and the defendant, the occupier "is protected". A close examination of the judgment in Minet v Johnson , however, discloses that there is a limit to the extent of the protection. In that decision Lord Esher MR expressed the view that even where an occupier was let in to defend his entitlement to possession after the entry of default judgment, the judgment "must not be set aside as between the plaintiff and [the mortgagor]; it can only be set aside so far as it concerns [the occupier]" (at 508)."

43Towards the end of 2005, Mr Khalid's wife was given the keys to the house. He did not move in immediately but his wife commenced living in the premises. At that time he had paid to Mr Dilati the sum of $415,000. It was agreed between Mrs Dilati and Kr Khalid that when the house was paid off in full then the ownership would be transferred to Mr Khalid. From June 2008 to mid 2009 the house was uninhabitable due to a fire in the house. After that Mr Khalid and his family moved back into occupation of the premises. It is my view that Mr Khalid falls within the definition of occupier.

44I order that Mr Khalid is to be joined as second defendant to these proceedings. The default judgment for possession of the land contained in folio identifier X/XXXXXX situated and known as XX XXXXX XXXX XXXXXX in the State of New South Wales be set aside. Mr Khalid is to file and serve a defence within 14 days.

45Costs are reserved.

The Court orders:

(1) That Mr Khalid is to be joined as second defendant to these proceedings.