Commonwealth Bank of Australia v Saint Louie Constructions Pty Ltd & Ors

1. [1]

   This judgment concerns two notices of motion.

2. [2]

   The first notice of motion was filed by the plaintiff, the Commonwealth Bank of Australia ABN 48 123 123 124 (CBA) on 16 May 2024 (CBA Motion). In this motion, CBA seeks summary judgment against each of the first to fourth defendants, Saint Louie Constructions Pty Ltd ACN 098 793 054 (SLC), Australian Metropolitic Developments Pty Ltd ACN 003 598 687 (AMD) and the third and fourth defendants in their capacities as joint and several trustees of the bankrupt estate of Tony Saaib (the trustees) pursuant to r 13.1 Uniform Civil Procedure Rules 2005 (NSW).

3. [3]

   The second concerns an amended notice of motion filed by the fifth defendant (and cross claimant), Ms Ivonne Slaimen, through which she seeks transfer by way of cross vesting of whole of the proceedings to the Federal Circuit and Family Court of Australia (FCFCA) (Division 1) for the purposes of consolidation with pending property proceedings under the provisions of the Family Law Act 1975 (Cth) before that Court.

Factual Background

1. [4]

   On 28 September 2023, the proceedings were commenced by CBA against the first, second, third and fourth defendants. On 12 February 2024, Ms Slaimen was granted leave to be joined as the fifth defendant by consent. She also filed a cross claim for equitable relief claiming an interest in the property referred to below (at [5]) against CBA and the trustees. This claim mirrors Ms Slaimen’s claim in FCFCA.

2. [5]

   Ms Slaimen was formerly married to Mr Tony Saaib. Mr Saaib was once the sole director of SLC and AMD, through which entities he conducted business in the construction industry. Mr Saaib was also the sole registered proprietor of the whole of the land from which these businesses were operated, described in Folio Identifier X/XXXXX as XXX-XXX XXXXXX Road, Mulgoa NSW 2745 (the property).

3. [6]

   Prior to the couple’s separation, Ms Slaimen was responsible for maintaining the marital home and operating a business trading as the Mulgoa Nursery through a third company (which is not a party to the proceedings), from the property. Ms Slaimen says she was not monetarily compensated for her work with Mulgoa Nursery by way of a wage, salary or other work allowance.

4. [7]

   In or around December 2020, the relationship between Mr Saaib and Ms Slaimen broke down and they separated while continuing to reside at the property.

5. [8]

   Central to these proceedings are Mr Saaib’s financial dealings with CBA, of which he had been a customer over many years. Relevantly, on or about 3 February 2021, CBA entered into a loan agreement with SLC as the borrower pursuant to a “BetterBusiness Loan” (the loan agreement). Under the loan agreement, SLC was provided with a loan facility subject to a limit of $2,350,000.

6. [9]

   The security that was provided to the bank by SLC in respect of the loan agreement was:

   1. (1)

      A “Commercial Deed of Guarantee – Limited” between Mr Saaib and CBA dated 28 July 2016 (the Saaib Guarantee). This was supported by a registered mortgage with the relevant dealing number ‘AK832239’ dated 26 July 2016 granted in favour of CBA by Mr Saaib over the property (the mortgage). It is common ground that by letter dated 7 October 2017, the limit of Mr Saaib’s liability under his guarantee was fixed at $1,150,000, compounding interest and enforcement costs; and

   2. (2)

      A “Commercial Deed of Guarantee by Corporation – Unlimited” between CBA and AMD dated 21 March 2019.

7. [10]

   On 26 February 2021, the sum of $2,350,000 was advanced by the bank by single drawdown by SLC pursuant to the loan agreement.

8. [11]

   Pursuant to the terms of the Loan Agreement, SLC was required to ensure that it was not in “default” which would be the case if, amongst other specified “defaults”,:

   1. (1)

      SLC did not pay CBA an amount by the due date (cl A7.2(a) of the Terms and Conditions (T&Cs); or

   2. (2)

      SLC or a “Guarantor” was “Insolvent”, went into bankruptcy, voluntary administration, other insolvency process or arrangement… (clause A7.2(c)).

9. [12]

   As SLC was not a “Large Business Customer” (cl A1.4 of the T&Cs), CBA could only act on a specific act of non-monetary default if the event by its nature was material, or if CBA reasonably considered the event had, or was likely to have a material impact on:

   1. (1)

      SLC or a “Guarantor’s” ability to meet financial obligations to CBA; or

   2. (2)

      CBA’s credit or security risk (or CBA’s ability to assess those).

10. [13]

    By reason of terms of the Saaib Guarantee, until Mr Saaib had paid CBA the “maximum amount”, Mr Saaib would be required to pay CBA any amount due under the loan agreement. In this way, Mr Saaib indemnified CBA against, and was required to pay CBA when CBA had asked, any loss suffered due to SLC’s non-payment of amounts due and owing to CBA under the loan agreement (cl 3.1). Mr Saaib was also required to pay interest to CBA, and CBA’s reasonable expenses of enforcing the Saaib Guarantee (cll 6.1 and 6.2).

11. [14]

    By reason of terms of the AMD Guarantee, AMD guaranteed that SLC will pay CBA all “amounts owing” under the loan agreement (cl 2.1). AMD indemnified CBA against and was required to pay CBA any loss suffered due to SLC’s non-payment of amounts owing to CBA under the loan agreement (cl 3.1).

12. [15]

    On or about 12 October 2022, Mr Saaib lodged a Debtors Petition to the Australian Financial Security Authority. On 10 May 2023, the third and fourth defendants were appointed as joint and several trustees of the bankrupt estate of Mr Saaib to replace others in whom creditors had lost confidence. Mr Saaib remains an undischarged bankrupt.

13. [16]

    Prior to Mr Slaimen’s filing the Debtors Petition, Ms Slaimen became registered as the sole director of both the first defendant borrower, SLC and of the second defendant guarantor, AMD in place of Mr Saaib, the breakdown of their marriage notwithstanding.

14. [17]

    In accordance with the bank’s rights under the relevant T&Cs of the loan agreement, CBA issued a request for financial information to the first defendant borrower, the second defendant guarantor and Mr Saaib in December 2022. CBA did not receive any response to its questions.

15. [18]

    On 3 March 2023, CBA, through an authorised officer, formed the view that Mr Saaib’s bankruptcy (and the failure to provide financial information) constituted an act of non-monetary default. CBA’s reasoning for this view was contained in the “Hampton file note” prepared by Mr Eric Hampton on (Court Book p 255). Mr Hampton appreciated that by the Banking Code of Practice (BCOP), CBA’s ability to act on the default was subject to additional conditions reflected in the terms summarised above (at [12]; BCOP, cll 80-83).

16. [19]

    In his file note, Mr Hampton expressed the opinion that the bankruptcy default was material and had, or at least was likely to have, a material impact on: SLC’s ability to meet its financial obligations to CBA; Mr Saaib’s ability to meet his financial obligations to CBA as guarantor or CBA’s ability to assess those matters; CBA’s security risk or CBA’s ability to assess that risk. He also formed the opinion that the bankruptcy default was incapable of being remedied. As such, SLC was found to be in default of the loan agreement entitling CBA to take immediate action to recover the total amount of the outstanding balance of the loan and, if unpaid, commence an action to enforce the guarantees.

17. [20]

    Thereafter, CBA proceeded to take enforcement action to remedy the default by issuing notices of default and demand. On 6 March 2023, CBA issued a notice of default and demand by way of letter of its solicitors (CB p 264ff), demanding that the then outstanding balance (which then amounted to $2,250,086.51) under the loan agreement be paid within 30 days.

18. [21]

    On 18 April 2023, CBA served a demand for payment on AMD demanding payment of the amount payable under the AMD Guarantee (totalling $2,253,633.09) within 30 days. CBA also served a demand for payment on Mr Saaib demanding payment of the amount payable under the Saaib Guarantee (being $1,150,000.00) within 30 days.

19. [22]

    SLC, AMD and Mr Saaib all failed to comply within the time required, or at all, with respect to the loan agreement, AMD Guarantee and Saaib Guarantee respectively.

20. [23]

    On 31 May 2023, CBA also issued a default notice under s 57(2)(b) Real Property Act 1900 (NSW) on Ms Slaimen in her capacity as the occupier of the property (also serving the notice on the third and fourth defendants) in respect of the mortgage, demanding payment of the $1,150,000 payable under the Saaib Guarantee and the mortgage within 31 days. Mr Saaib and the third and fourth defendants failed to comply with this notice.

21. [24]

    On 10 July 2024, after being joined on her own motion as fifth defendant, Ms Slaimen filed her defence to the plaintiff’s statement of claim and her first cross claim against the third and fourth defendants and CBA, as I have said.

22. [25]

    In the cross claim, Ms Slaimen seeks a declaration that she has an equitable interest in the property and that the trustees hold 70% subject to either a resulting or constructive trust in her favour. Alternatively, Ms Slaimen seeks a declaration that the Trustees hold 50% subject to a resulting trust and a further 20% or as determined subject to a constructive trust.

23. [26]

    Ms Slaimen also seeks a declaration that the amount owing by Mr Saaib under the Saaib Guarantee is limited to $1,150,000 plus interest and costs owing on that amount. As I say, this is not in issue. Ms Slaimen also seeks orders affecting a transfer or assignment of the mortgage to her upon payment to CBA of the $1,150,000 plus such other amount that the Court determines payable.

24. [27]

    The plaintiff, in its defence to the cross claim, asserted that Ms Slaimen’s property claims are not relevant to, nor do they impinge on, CBA’s interest as first ranking secured mortgagee.

25. [28]

    The plaintiff denies that there is any real issue with respect to the amount owed to CBA and secured by the mortgage. On 7 October 2017, CBA reduced the “maximum amount”, and hence accepts its limited entitlement to the lesser amount of $1,150,000 plus interest and enforcement expenses. CBA argues that it has not made any contrary representation with respect to this since confirming the Saaib Guarantee remained limited to the amount of $1,150,000 in correspondence sent as long ago as February 2019.

26. [29]

    Since the inception of the proceedings, there have been various unsuccessful attempts to resolve the proceedings so far as CBA’s claims under the Saaib Guarantee and the mortgage are concerned, by way of open offers to which the parties have made reference. Agreement in principle has frequently been reached, but completion has eluded the parties for various reasons about which Ms Slaimen is aggrieved.

27. [30]

    On 9 September 2024, CBA offered to discharge the mortgage in exchange for payment by Ms Slaimen of the sum of $1,350,000; a sum which reflected a reduction of the interest and costs owed under the Saaib Guarantee, and is hence less than the amount secured by the mortgage. This was accepted by Ms Slaimen on 13 September 2024.

28. [31]

    Over the subsequent months, the parties corresponded regarding difficulties Ms Slaimen was facing in completing the discharge transaction (the proposed transaction) by the due date and extensions were granted by CBA on 20 September 2024 and 11 October 2024 respectively to facilitate Ms Slaimen’s completion of the proposed transaction.

29. [32]

    On 11 November 2024, CBA made an open but conditional offer to Ms Slaimen and the Trustees to grant a further extension of time for parties to resolve negotiations and complete the proposed transaction. However, there remain extant issues delaying completion, and the CBA’s offer of 9 September 2024 has since lapsed.

30. [33]

    On 24 November 2024, Ms Slaimen offered to pay CBA $1,150,000 in exchange for: a duly executed assignment of Mr Saaib’s debt to Ms Slaimen; an assignment of the mortgage over the property to her, and a discontinuance or dismissal of the proceedings insofar as they concern the possession of the property.

31. [34]

    There followed a substantial course of correspondence over a period of months whereby CBA sought clarification as to the legal basis upon which Ms Slaimen could compel an assignment of the mortgage and any of Mr Saaib’s debt obligations. It appears this clarification has not been provided by Ms Slaimen.

32. [35]

    From the fourth affidavit of Robert Charles Ralston dated 11 February 2025, as at that date, SLC are calculated to be in arrears in the amount of $69,380.28 under the loan agreement. The total payout amount that is owing under the loan agreement as at that date is $2,467,240.58 together with interest at the rates applicable. It should be said that until late 2024, Ms Slaimen had been able to pay what would have been the instalment due on the loan but for default through the good offices of a friend of the family.

Issues in Dispute

1. [36]

   Notwithstanding Ms Slaimen’s appointments as director of each of SLC and AMD in the shadow of the lodgement of Mr Saaib’s Debtors Petition, there is no real dispute about the amount of the indebtedness of SLC under the loan agreement or AMD under its unlimited guarantee. What is in issue is whether the act of non-monetary default entitled CBA to call in the debt. It should be pointed out that the shares in each of SLC and AMD were solely owned by Mr Saaib and by dint of s 58 of Bankruptcy Act 1966 (Cth) are vested in the trustees. They, who were represented at the hearing by Mr D. Farrar, solicitor, took no real active part in the proceedings and have no objection, for what it may be worth, to summary judgment in respect of each of those debts. Nor did I understand Ms Keynes of counsel, who appeared for Ms Slaiman, to focus the relief sought against those companies. That is not to say summary judgment against them was not opposed. But Ms Keynes real interest was in opposing summary judgment on the Saaib Guarantee and the enforcement of CBA’s mortgage over the property by way of summary judgment for possession. It is obvious that Ms Slaimen wishes to remain in occupation of the property until the FCFCA proceedings are resolved, although there is no dispute that the respective interests of Ms Slaimen and the trustees in the property are subject to CBA’s right, title and interest as mortgagees.

2. [37]

   To resist summary judgment, Ms Keynes argues that there is a triable issue in relation to the non-monetary act of default relied upon by CBA, constituted by Mr Saaib’s bankruptcy by way of his own Debtors Petition. This is because, as the argument runs, CBA did not comply with cll 80-83 BCOP. In particular, Ms Keynes argued there is a real issue to be tried about whether Mr Saaib’s bankruptcy was “material”, and if CBA had given “reasonable notice”, it could have been “remedied”.

3. [38]

   In respect of the former argument about the materiality of the bankruptcy, Ms Keynes points to the ability of Ms Slaimen to continue to pay amounts that would have been due under the loan agreement had there been no default, at least up until late 2024. I observe that these arguments obviously extend to the bank’s claim for summary judgment against SLC and AMD. Although, that is not their primary object.

4. [39]

   Ms Slaimen has not been able to raise the money required to discharge the Mortgage on terms acceptable to her, CBA and the trustees, notwithstanding how close the parties came to settlement.

5. [40]

   Ms Slaimen seeks the transfer of proceedings to the FCFCA under the provisions of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) (Cross-Vesting Act (NSW)). Ms Keynes relies upon s 5(1) and in the alternative 6(1) of the Cross-Vesting Act. The ground of transfer under s 5(1) is the “interest of justice” ground.

6. [41]

   The alternative ground put forward under s 6 of the Cross-Vesting Act is that the proceedings are a ‘special federal matter’ as defined in s 3(a)-(e) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth). The federal definition is incorporated in the Cross-Vesting Act (NSW) by force of s 6(2)(a). The paragraph of the incorporated definition advanced by Ms Keynes is paragraph (e) which refers to “a matter that is within the original jurisdiction of the Federal Court [of Australia] by virtue of s 39B of the Judiciary Act 1903”. Section 39B confers original jurisdiction on the Federal Court in “any matter arising under any laws made by the parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter”.

7. [42]

   It is said that the proceedings in this Court are a special federal matter because the dispute between Ms Slaimen and the trustees arises under the Bankruptcy Act.

8. [43]

   Mr Koch of counsel, who appears for CBA, disputes that it is in the interest of justice to transfer the proceedings given their age and the number of appearances required of the parties during case management. He argues that, whatever the situation as between Ms Slaimen and the trustees is, in any event, it was not in the interests of justice that CBA’s claims for summary judgment including the judgment for possession should be transferred.

9. [44]

   Mr Koch also argues that its claim for possession is not a special federal matter as it does not arise under the Bankruptcy Act. Rather, the Bankruptcy Act preserves CBA’s general law entitlement to enforce its security: s 58(5) Bankruptcy Act. Mr Koch relies upon s 6(1A) Cross-Vesting Act (NSW) to argue that, if the Court were otherwise persuaded in relation to Ms Slaiman’s cross claim, the Court must make an order under s 6(1A) to not transfer the debt and possession matters as they are not within the jurisdiction of the Federal Court.

10. [45]

    Alternatively, s 6(3) authorises the Court to order that the proceedings be determined before this Court if there are special reasons for doing so in the particular circumstances of the proceedings other than reasons relevant to the convenience of the parties, and Mr Koch argued this power had been engaged.

11. [46]

    Reference was made in passing to s 27 of the Bankruptcy Act which confers concurrent jurisdiction in bankruptcy on the Federal Court and FCFCA.

Determination – Cross-vesting application

1. [47]

   It seems logical to deal with Ms Slaimen’s cross-vesting application first. I am not satisfied that it is in the interests of justice for me to transfer CBA’s enforcement proceedings on the loan transaction, the AMD guarantee, the Saaib guarantee and the related judgment for possession to the FCFCA. There are a number of reasons for this.

2. [48]

   First, those claims arise under the general law and of themselves do not give rise to any federal question and have no federal component except that the trustees are necessarily parties. To the extent that any question of federal jurisdiction may be involved by that latter consideration, this Court has ample authority to fully resolve those matters. The claims in debt against SLC and AMD are entirely peripheral to the real controversy among the parties to the extent to which it legitimately involves Ms Slaimen. She wishes to fully realise what she regards as her true entitlements but accepts that those entitlements must be subject to the bank’s mortgage. Her entitlement is restricted to the equity in the property after discharge of the mortgage including interest and enforcement costs.

3. [49]

   Secondly, given the FCFCA proceedings were pending before Ms Slaimen sought to intervene in the proceedings in this Court by way of her motion for joinder as a fifth defendant, there is a flavour of vexatiousness about her cross-claim given it seems to be a second set of proceedings seeking to achieve the same purpose as the proceedings before the FCFCA. I appreciate no claims against CBA were taken in that court, but the substance of her claim is the vindication of her asserted property entitlement. This matter has not been raised by CBA other than to the extent to which Mr Koch argues that Ms Slaimen has been able to intervene in the proceedings in this Court and, after settlement proved elusive, was determined to seek a cross-vesting order for her own convenience to preserve her position until the finalisation of the FCFCA proceedings.

4. [50]

   I also accept CBA’s argument that the respective interests of the trustees and Ms Slaimen in the equity in the property can be preserved by judgment for possession, if CBA is otherwise entitled, with an order that the net proceeds of sale, if any, be paid into court pending the resolution of their dispute.

5. [51]

   For these reasons, I would refuse an order under s 5 Cross-Vesting Act (NSW) at least so far as CBA’s claims are concerned. It may be otherwise in relation to Ms Slaiman’s cross claim, to which I will return.

6. [52]

   I turn then to the question of making a cross-vesting order under s 6, in the alternative. I am satisfied that there is ample authority to support the contention that the dispute between Ms Slaimen and the trustees over their respective entitlements to the equity in the property is a special federal matter in as much as it arises under the Bankruptcy Act: see Turner (as Trustee of the Bankrupt Estate of Gorkowski v Gorkowski (2014) 46 VR 608 at [32]; Truthful Endeavour Pty Ltd v Condon (as Trustee of the Bankrupt Estate of Rayhill) [2015] FCAFC 70 (Truthful Endeavour) at [55]; and Montgomery v Porter [2019] NSWSC 1524 at [19] – [23] (per Ward CJ in Eq (as her Honour then was)).

7. [53]

   However, it does not follow from this that CBA’s claim for debt recovery from the companies and for possession of the property is likewise a special federal matter. I of course accept, as it was put by Allsop CJ, Katzmann and Gleeson JJ in Truthful Endeavour (at [55]), “the width of the word ‘matter’” extending to “the whole justiciable controversy” which arises under a law made by the Parliament of the Commonwealth. However, section 58(5) carves out a secured creditor’s rights to realise or otherwise deal with the security from the property which is forms part of a bankrupt estate vested by law in the trustee upon the making of a Bankruptcy order. CBA is in this position at least so far as its claims under the mortgage over the Property are concerned.

8. [54]

   Although Ms Keynes relied upon her argument in relation to whether there was a dispute about default on behalf of SLC and AMD, it is very difficult to see how the debt recovery proceedings against each of those companies is any part of a controversy arising under federal law. They are entirely separate from the controversy over the equity in the Property. The trustees in whom the shares are vested has no opposition to summary judgment in respect of them.

9. [55]

   On this approach, having regard to s 6(1A) Cross-Vesting Act (NSW), only the matters raised in Ms Slaimen’s cross-claim, are, in my opinion, within the jurisdiction, including the accrued jurisdiction, of the Federal Court. The general debt recovery and possession matters are not. I accept Mr Koch’s argument in this regard.

10. [56]

    Were I wrong about this, I would be of the view that there are special reasons for refusing to transfer those aspects of the case in the particular circumstances of these proceedings, other than reasons relevant to the convenience of the parties. So far as the claim for possession is concerned, as a secured creditor, CBA is entitled to realise its security. Transfer would defeat that purpose because its right would be put on hold until the dispute about net equity was finalised. I am of the view there is no good reason for this.

11. [57]

    In any event, I am of the view that CBA is entitled to summary judgment in respect of these matters for reasons I will explain and that too is a special reason for ordering that the proceedings remain in this Court, other than Ms Slaiman’s cross-claim which raises the special federal matter to the extent it affects the property interest vested in the trustees only.

12. [58]

    I appreciate there could be inconvenience in transferring the cross-claim as CBA remains a party to it, as I will order summary judgment as I am about to explain. CBA’s involvement in the proceedings in the FCFCA would be minimal, and it remaining a party to the cross-claim would ensure that it was bound by the decision of the FCFCA apportioning the respective interests of Ms Slaimen and the trustees. The one exception may be prayer 8(a) of the cross claim seeking an order compelling an assignment of its interests upon payment of the amount properly due under the Saaib guarantee.I will leave my final decision about transfer of the cross claim until I deal with summary judgment.

Summary judgment

1. [59]

   The principles of restraint governing the Court’s power to order summary judgment are well known and need not be elaborated by me in these reasons for judgment. They are well summarised in Ms Keynes written submissions of 10 February 2025 by reference to familiar authorities.

2. [60]

   I accept that a matter should not be decided in a summary fashion, except in the clearest of cases. I accept this requirement is “demanding” and that the test requires “certain demonstration of the outcome of the litigation, not an assessment of the prospect of its success”: Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57]; and Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 at [54].

3. [61]

   At the practical level, the question often comes down to whether there is identified in the evidence before the Court “a triable issue” for determination. It is not for the Court to attempt some summary assessment of the merits in advance of a trial after the usual interlocutory steps appropriate to preparation, having regard to the nature of the case had been taken. In this matter, the “triable issue” is said to be whether Mr Saaib’s bankruptcy following his lodgement of a Debtors Petition given his relationship with CBA as guarantor was a non-monetary act of default, having regard to the requirements of cll 81-83 BCOP.

4. [62]

   It is not without relevance that the trustees do not dispute the bank’s entitlement to summary judgment – only Ms Slaimen disputes this. Having made that observation, I fully accept that as the Director of SLC and AMD and as an occupant of the property, she has a sufficient interest in the outcome of the proceedings to do so.

5. [63]

   It is clear from the evidence in the case, which has not been controverted, that at the time Mr Hampton made the decision on behalf of the Bank, the then trustee’s initial report to creditors demonstrated that the total amount of Mr Saaib’s indebtedness was $9,214,965. This did not include the amount due under the terms of the Saaib guarantee. Unsecured creditors were owed $6,008,113 and the value of the property, which was listed as the only substantial asset in the estate, was said to be $4,500,000.

6. [64]

   SLC, the borrower, and AMD, the corporate guarantor, were corporations in which Mr Saaib owned all the shares and of which he was the sole director until he vacated the latter offices and was replaced by Mrs Slaimen. There is no evidence that SLC as borrower, AMD as a guarantor or Mr Saaib himself was in a position to pay out his creditors as a precursor to an application for the annulment of the bankruptcy, and certainly no evidence before me that that could be done within a “reasonable time”. As Mr Hampton pointed out in his file note, were Mr Saaib in a position to enter into a composition with his creditors that, of itself, would also constitute a non-monetary act of default.

7. [65]

   It is the borrower which is entitled to the benefit of the provisions of the BCOP. Mr Saaib was in no position to remedy the non-monetary default constituted by his bankruptcy on his own application. I am satisfied that there is no evidence available to be led at the trial that SLC could achieve that purpose. I am not of the view that the consideration, as I have said, that the good offices of a family friend who has enabled Ms Slaimen, up to a point, to pay the loan instalments otherwise due is evidence that the act of default was capable of being remedied. In any event, I note that at the time of the hearing before me, those instalments were in arrears to the tune of $69,000.

8. [66]

   It cannot be argued, in my judgment, that Mr Saaib’s bankruptcy was not “material”. Clearly, neither he, as the governing mind and hand of SLC nor Ms Slaimen, in her assumption of that role, had been able to, through their own efforts, put SLC in a financial position where it could meet its obligations to CBA as and when they fell due from its own financial resources. There is no evidence that SLC continues to trade in any meaningful way, likewise AMD. The simple fact is that Mr Saaib’s high level of indebtedness at the time of his bankruptcy establishes beyond argument that the non-monetary act of default constituted by his bankruptcy was indeed “material” for the purposes of the terms of the loan agreement and the BOCP.

9. [67]

   I am satisfied that were the matter permitted to go to trial the outcome is clear and the posited defence is untenable. I propose to make orders for summary judgment against SLC, AMD and Mr Saaib, including for possession.

Writ of possession

1. [68]

   I turn then to the question of the issue of a writ of possession. From the evidence before me, the property is a large one containing the residence of Ms Slaimen (and Mr Saaib), a rental property and the premises of Mulgoa Nursery. On the evidence, Mulgoa Nursery is a long-established business and doubtless would require time to relocate. I am mindful of the so-called sheriff’s moratorium about to commence which will provide some respite to Ms Slaimen in respect of the business. However, I am not of the view that that is a sufficient time for her to relocate. My view is that there should be no execution of any writ of possession before Monday 2 February 2026.

2. [69]

   Given the effluxion of time since I reserved my decision, I think it appropriate to require the parties to bring short minutes of order giving effect to my decision.

3. [70]

   Those orders should provide for summary judgment in favour of CBA against SLC, AMD and Mr Saaib including judgment for possession of the property. The orders should provide for no execution of the writ prior to 2 February 2026. Moreover, other than prayer 8(a), I am of the view that Ms Slaimen’s cross claim should be transferred to the FCFCA. I will be content to make an order under s 5 of the Cross-Vesting Act (NSW) to that effect. Otherwise, under s 6, the orders should acknowledge that her cross claim, so far as it relates to the apportionment of the equity between her and the trustees is a special federal matter. In that event, it will need to be transferred to the Federal Court, and it will be a matter for that Court to consider whether, in the exercise of its powers, it would cross-vest the matter in the FCFCA. As I have said, to the extent necessary, I would make an order that the CBA’s claims should not be transferred for the special reasons I have indicated, including the circumstance that I propose to order summary judgment on those claims.

4. [71]

   If there is a dispute about who should pay the costs and on what basis the short minutes should provide for the exchange of short written submissions for the resolution of those questions in chambers. Prima facie, given the summary judgments, CBA would seem to be entitled to its costs of the proceedings.

5. [72]

   I wish to add something concerning prayer 8 of the cross claim. It seems to me that that prayer should be struck out as disclosing no reasonable cause of action. Even assuming that previous difficulties can be overcome and Ms Slaimen can pay out the Saaib guarantee to secure a discharge of the mortgage, she is not a mortgagor under s 94 of the Conveyancing Act 1919 (NSW) (Conveyancing Act), and by the time that the cross-claim is determined, the mortgagee will have been in possession under the orders I propose to make: cf Challenge Bank Limited v Hodgekiss (1995) 7 BPR 14,399 (per Young J). Nor does Ms Slaimen’s claim to be entitled to an equitable interest in the equity in the property render her an incumbrancee under s 95 of the Conveyancing Act. ‘Incumbrancee’ is a defined term in s 3 of the Conveyancing Act which relates basically to secured interests in land. There seems to be no other basis in law on which she could call for an assignment of CBA’s interest in the mortgage to her. Payment out would not entitle her to be subrogated to the position of Mr Saaib against CBA. On the contrary, she would be subrogated to Mr Saaib’s rights as surety against the debtor, SLC. These arguments were not fully developed before me, I acknowledge, but there seems little point in permitting prayer 8(a) to proceed to hearing in the circumstances.

6. [73]

   I make the following orders:

   1. (1)

      Direct the parties to confer and agree upon judgments and orders giving effect to my reasons; and

   2. (2)

      List the matter for mention before me on Monday, 8 December 2025 at 9 30 am for the entry of orders in accordance with the short minutes.