Supreme Court New South Wales

• Medium Neutral Citation: WK Marble & Granite Pty Ltd v Elia [2014] NSWSC 898
• Hearing dates: 3 July 2014
• Decision date: 03 July 2014
• Jurisdiction: Common Law
• Before: Davies J

Decision

1. The Applicant's Notice of Motion filed 17 April 2014 is dismissed.

2. The Applicant is to pay the Plaintiff's costs on an indemnity basis.

• Catchwords: REAL PROPERTY - possession of land - plaintiff entitled to possession against mortgagor/registered proprietor - application by occupier to be joined to proceedings - occupier entered into 20 year unregistered lease with registered proprietor - occupier entered into contract to purchase the land from registered proprietor - contract uncompleted - occupier entered into deed with registered proprietor to crystallise debt owing to occupier for work performed - no stamp duty paid on any agreement - occupier has no legal interest in land - application dismissed
• Legislation Cited: Duties Act 1997 (NSW); Real Property Act 1900 (NSW)
• Category: Interlocutory applications
• Parties: WK Marble & Granite Pty Ltd (Plaintiff); Bahia Elia (First Defendant); John Elia (Second Defendant)
• Representation: Counsel: C Bannan (Plaintiff); No appearance (Defendants); Solicitors: Eakin McCaffery Cox Lawyers (Plaintiff); Self represented (Defendants)
• File Number(s): 2014/85069

Judgment

1 This is the hearing of a Notice of Motion filed 17 April 2014 by John Elia who applies to be joined as a Second Defendant in possession proceedings brought by the Plaintiff against the registered proprietor of the property at 31 Moonbie Street, Summer Hill.

2 The Plaintiff is the registered second mortgagee of the property. The Plaintiff was successful in District Court proceedings brought against the present Defendant (and others). In a judgment of Taylor DCJ of 20 September 2013, the Defendant was ordered to pay the Plaintiff $646,345.59.

3 The Applicant appears to be an occupier of the property but, in any event, the application he makes is based on a number of transactions which he claims to have entered into with the Defendant who is his mother.

4 The Applicant has not appeared this morning to pursue his Notice of Motion. At 5.30 last night (after my Associate had left chambers) an e-mail was received from the Applicant. In short, the e-mail asked for the application to be adjourned because the Applicant would be in hospital this morning. The Applicant attached a statement saying that "for personal medical reasons affecting my well-being" he sought the proceedings be adjourned.

5 He attached a medical certificate from a Dr Rajani Vinalaratnam of 1 July 2014. The medical certificate appears to be in the nature of a referral. It is simply addressed "Dear doctor" with no name specified. It thanks that doctor for seeing the Applicant who, Dr Vinalaratnam says, he saw on 1 July. The medical certificate goes on to say: "Could you kindly review and advise. Thank you for seeing him with a recurrence of pilonidal sinus infection."

6 The Applicant says further in his statement, when attaching that medical certificate, that "it is required for the Applicant to provide to the Royal Prince Alfred Hospital emergency ward on 3 July for immediate operation." There is nothing in the medical certificate to suggest an immediate operation was to take place. There is no explanation for why the Plaintiff and the Court were not notified on 1 July but, rather, after the close of business last night.

7 When the matter was before the Court on 1 May 2014 orders were made that directed the Applicant to provide a draft pleading to the Plaintiff in relation to his claim on or before 15 May and to provide an outline of submissions on the Motion to the Court by 26 June. Neither of those orders was complied with by the Applicant.

8 For that reason, and because I was not satisfied that the Applicant was, in fact, unavoidably required to be in hospital this morning, I directed my Associate to forward an e-mail to him the first thing this morning saying that the proceedings would not be adjourned. Because the Applicant has not appeared, the Motion could have been simply dismissed. However, because the Applicant is no longer legally represented, the Plaintiff took the view (a view with which I concur) that it would be better to determine the Motion on its merits, despite the absence of the Applicant.

9 The Applicant says that he is entitled to be joined to the proceedings and to resist the Plaintiff's claim for possession on a number of bases. First, he says that on 18 August 2009 he and the Defendant entered into a Residential Tenancy Agreement form 18 August 2009 until 14 August 2029.

10 Secondly, he says that on 19 January 2010 he entered into a deed with the Defendant to purchase the property for $1,150,000. Of this sum $780,000, that his mother owed him for work that he has done on the property, would be credited. He then says, pursuant to that deed, a Contract of Sale was entered into on 21 October 2010 for the purchase of the property by him from the Defendant. The contract had a completion date of 21 October 2015.

11 Thirdly, he also resists the making of the orders by the Plaintiff on the basis of a mortgage that was entered into on 21 October 2010 between the Defendant as the mortgagor and the Applicant as the mortgagee. It is not immediately apparent if the mortgage was related to the Contract for Sale. No consideration is shown on the face of the mortgage. However, what appears to be secured are defined as Obligations in cl 1.1 of the mortgage. A fair summary of what is contained there suggests that the mortgage is to secure whatever is said to be owing between the Defendant and the Applicant. On the evidence before me, the only moneys owing to the Applicant by the Defendant are the moneys for the work that he has carried out.

12 The Applicant also relies on four caveats that he lodged over the property. The caveats are said to support the documents to which I have referred, that is, the lease, the contract for sale, the mortgage and an oral agreement for the Applicant to carry out the building works worth $780,000.

13 Lapsing notices were given in respect of each of the caveats when the Plaintiff sought to register its mortgage. Ultimately, the Plaintiff's mortgage was registered.

14 None of the bases upon which the Applicant claims to have an interest in the land can displace the Plaintiff's primary position to obtain possession of the land. The Plaintiff is the second registered mortgagee on the land.

15 Since the lease is for 20 years it would be required to be registered for the tenant to obtain a legal interest in the land: s 42(1)(d)(i). Further, there is no evidence to show that the Plaintiff had notice of the existence of the lease: s 42(1)(d).

16 The Deed does not give a legal interest in the land. It is simply identifies the arrangement that led to the Defendant owing the Applicant the $780,000 and the subsequent arrangement to sell the land to the Applicant. The Contract for sale has not been completed. It gives only an equitable interest in the land.

17 The only document to which the Applicant is a party that is capable of registration is the mortgage of 21 October 2010, but that mortgage has not been registered.

18 There is a further reason for rejecting the Applicant's claim. None of the documents upon which he relies has been stamped pursuant to obligations under the Duties Act 1997 (NSW). Section 304 of that Act provides:

(1) An instrument that effects a dutiable transaction or is charged with duty under this Act is not available for use in law or equity for any purpose and may not be presented in evidence in a court or tribunal exercising civil jurisdiction unless,

(a) it is duly stamped....

19 Had the Applicant been here to further his Notice of Motion he would have been faced with that hurdle before any consideration could have been given to the instruments upon which he relies.

20 There is a dispute on the evidence about whether a copy of the Statement of Claim was served with the Notice to Occupier. There is an affidavit from the process server James Stephen Twigg who deposes on 10 April 2014 to having served both the Notice to Occupier and a copy of the Statement of Claim by the means stipulated in an order of the Court for substituted service. The Applicant swore that he received only the Notice to Occupier. However, he admitted that his solicitor (then acting) received a copy of the Statement of Claim on 16 April, 2014. The Applicant has been on notice, therefore, of the basis for the Plaintiff's claim since before making his present application.

21 The Applicant has demonstrated no basis upon which he ought to be joined to the proceedings. In those circumstances, the Notice of Motion filed 17 April 2014 should be dismissed.

22 On 16 June 2014 the solicitors for the Plaintiff wrote to the Applicant pointing out that he had failed to provide a draft pleading by 15 May, as the Court had ordered. They noted that there had been filed a Notice of Ceasing to Act by his solicitors. They advised him to sign consent orders that dismissed the Notice of Motion and provided that each party should pay its own costs. They notified him that if he failed to do so by the deadline they gave him they would seek indemnity costs at the hearing, if they were successful in resisting the Motion.

23 I am satisfied that it was unreasonable of the Applicant not to have accepted the offer that each party should pay their own costs at that stage of the proceedings. There was nothing in the Applicant's affidavit that could have resulted in his displacing the Plaintiff's interests. The provisions of the Real Property Act 1900 (NSW) are clear. Accordingly, the costs that the Applicant is ordered to pay will be costs on an indemnity basis.

24 I make the following orders:

1. The Applicant's Notice of Motion filed 17 April 2014 is dismissed.

2. The Applicant is to pay the Plaintiff's costs on an indemnity basis.

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Amendments

23 July 2014 - Decision section of coversheet corrected.
Amended paragraphs: Coversheet

Decision last updated: 23 July 2014