Application of National Australia Bank

On 6 February 2015 National Australia Bank Limited (“NAB”) paid $428,917.90 into Court. That sum represented the surplus proceeds of sale of a property in Bass Hill following the exercise by NAB of its power of sale as first registered mortgagee of that property (the “Property”).

The registered proprietor of the Property was Ms Latesha Campbell.

The second unregistered mortgagee over the Bass Hill property was Integrated Growth Solutions Pty Limited (“IGS”). IGS sued Ms Campbell in relation to funds said to have been secured by that second unregistered mortgage. Those proceedings were determined by Stevenson J on 29 April 2015 in favour of IGS (Integrated Growth Solutions Pty Limited v Campbell [2015] NSWSC 517). Today I heard an application by Ms Campbell to have Stevenson J's orders set aside on the basis that they were made in her absence. I rejected that application (Integrated Growth Solutions Pty Limited v Campbell (No 2) [2015] NSWSC 765.

As part of the orders which Stevenson J made against Ms Campbell, his Honour made the following declarations:

This judgment concerns the question of who is entitled to the funds that were paid into Court by NAB.

There are two potential claimants. The first is IGS. The second is Mrs Saada Nassif. In accordance with the Rules, each of IGS and Mrs Nassif has filed a notice of motion supported by evidence to make out their respective claims.

IGS's notice of motion was filed on 5 May 2015 and seeks an order that "the funds paid into Court in these proceedings together with interest accrued thereon, be paid out of Court to [IGS]". IGS's motion was supported by an affidavit of Joselyn Priya Kishore sworn 3 June 2013 and a direction from IGS that those funds be paid to IGS’ solicitors.

Mrs Nassif's notice of motion was filed on 9 June 2015 and seeks orders to the effect that Mrs Nassif has an interest in the funds that had been paid into Court and that she be paid $66,000 from those funds. Her motion was supported by an affidavit sworn by her on 1 June 2015.

The only other possibly interested party in relation to the funds paid into Court is Ms Campbell. The evidence demonstrates that she is on notice of today's application. I proceeded to hear these motions after I had delivered my ex tempore judgment in relation to Ms Campbell's application (see paragraph [3] above). Ms Campbell and her husband left the precincts of the Court at the conclusion of my ex tempore judgment, notwithstanding that I had made clear to all parties that if I ruled against Ms Campbell's application, I would then proceed to deal with the motions concerning the funds paid into Court.

In his reasons of 29 April 2015 Stevenson J set out, and I respectfully adopt, the applicable principles in relation to demonstrating an entitlement to funds paid into Court:

Insofar as IGS is concerned the first and second matters required to be demonstrated, as referred to in the preceding extract from Stevenson J's judgment, are satisfied by reference to the declarations made by his Honour (see paragraph [4] above). His Honour entered judgment in favour of IGS against Ms Campbell in the sum of $653,523. In the absence of any other claimant it follows that IGS is entitled to payment the entire sum held in Court. However, it is necessary to consider Mrs Nassif's claim for $66,000.

For Mrs Nassif to succeed in relation to her claim to $66,000 of the funds held in Court it is necessary for her to demonstrate that whatever arrangement she had with Ms Campbell gave her (Mrs Nassif) an interest in the Property and that her interest came into existence before the interest of IGS. Mr Robinson of Counsel, who appeared for IGS, fairly conceded that it was clear from the caveat that had been registered against the Property on behalf of Mrs Nassif asserting her interest (albeit without specifying the amount) that if she had an interest, it was prior to IGS's interest in the Property.

Unfortunately for her, Mrs Nassif has been unable to demonstrate that her arrangement with Ms Campbell gave Mrs Nassif an interest in the Property. Mrs Nassif's evidence, set out in her affidavit of 1 June 2015, included:

Mrs Nassif's affidavit includes copies of a deposit book in relation to Ms Campbell's mortgage to NAB over the Property. Mrs Nassif's affidavit does not strictly demonstrate that she in fact made all the payments evidenced by the stamped deposit book. However, for the purposes of these proceedings, I will assume in her favour that she did in fact make all those payments out of her own funds.

I gave Mrs Nassif, who appeared with the assistance of her daughter, the opportunity to expand upon the evidence in her affidavit as to the circumstances in which she agreed to assist Ms Campbell with the mortgage repayments. Through her daughter Mrs Nassif informed me that the agreement with Ms Campbell was oral and that it was to the effect that Mrs Nassif would make the mortgage repayments in return for a promise by Ms Campbell to repay Mrs Nassif when she (Ms Campbell) (and possibly George) were in funds to do so or when she sold the Property. The evidence went no further.

It is clear that the material which Mrs Nassif has put before the Court today does not demonstrate that she had an interest in the Property. At its highest she has a cause of action against Ms Campbell (which may be statute-barred) for repayment of the mortgage payments that Mrs Nassif made on Ms Campbell's behalf. That is an action in debt. The evidence does not permit a conclusion that the arrangement went any further so as to give Mrs Nassif an interest in the Property.

Mrs Nassif has therefore failed to demonstrate that she has any interest in the funds which have been paid into Court.

The Court's orders are: