Connam Pty Limited as Trustee for Christodoulou Family Trust v George Lazarou and Ors

1. [1]

   JOHNSON J: By Notice of Motion dated 9 April 2020, the Plaintiff, Connam Pty Limited as Trustee for the Christodoulou Family Trust, seeks the issue of a writ of restitution with respect to property at 2 William Street (also known as 2A William Street), Strathfield South (“the Strathfield South property”). The Defendants in the proceedings are George Lazarou, Andreas Lazarou and Sofia Lazarou.

2. [2]

   In circumstances to be outlined shortly, the Court is determining the Plaintiff’s Notice of Motion on the papers.

3. [3]

   Read for the Plaintiff in support of the Notice of Motion is the affidavit of Con Christodoulou dated 9 April 2020 and a further affidavit of Mr Christodoulou which contains a chronology of relevant events.

Chronology of Events Until 3 March 2020

1. [4]

   On 15 February 2019, the Plaintiff filed a Statement of Claim which sought possession of the Strathfield South property. The Defendants were guarantors of a loan made to George Lazarou in July 2017 which was secured by mortgage over the Strathfield South property. Andreas Lazarou and Sofia Lazarou are the parents of George Lazarou. The Plaintiff alleged that default under the loan agreement and mortgage had occurred thereby entitling the Plaintiff to take possession of the property.

2. [5]

   On 28 March 2019, a Defence was filed on behalf of George Lazarou. An Amended Defence was filed for George Lazarou on 18 April 2019.

3. [6]

   On 1 May 2019, Schmidt J entered default judgment against Andreas Lazarou and Sofia Lazarou in the sum of $2,069,148.52.

4. [7]

   On 26 June 2019, Walton J gave summary judgment against George Lazarou. The Plaintiff was granted leave to issue a writ of possession which was stayed until 24 July 2019.

5. [8]

   On 24 July 2019, a Notice of Motion was filed on behalf of Andreas Lazarou and Sofia Lazarou seeking to set aside the default judgment entered on 1 May 2019 and seeking a stay of execution of the writ of possession.

6. [9]

   On 18 September 2019, the hearing of the Notice of Motion proceeded before Lonergan J. Her Honour refused an application for adjournment made by the Defendants: Connam Pty Limited as trustee for Christodoulou Family Trust v Lazarou [2019] NSWSC 1268.

7. [10]

   On 19 December 2019, her Honour dismissed the Notice of Motion with costs: Connam Pty Limited as trustee for Christodoulou Family Trust v Lazarou (No. 2) [2019] NSWSC 1863.

8. [11]

   On 24 October 2019, George Lazarou was declared bankrupt.

9. [12]

   On 23 January 2020, a writ of possession for the Strathfield South property was once again issued.

Events on 3 March 2020

1. [13]

   The writ of possession was scheduled for execution by the Sheriff on 3 March 2020.

2. [14]

   On the morning of 3 March 2020, George Lazarou approached the Duty Registrar and the matter was referred to me as Common Law Duty Judge, on the basis that there was an urgent application for stay of execution of a writ of possession. The Court file was in archives and was not available. All that was available to the Court at that time were the judgments of Lonergan J delivered on 18 September 2019 and 19 December 2019 which were located on Caselaw.

3. [15]

   George Lazarou appeared in Court, without legal representation. He did not inform the Court that he was bankrupt. A Notice of Motion brought in the name of Andreas Lazarou sought a stay of execution of the writ of possession. He relied upon an affidavit of Andreas Lazarou sworn 3 March 2020. The affidavit of Andreas Lazarou stated that he was 81 years old and that he had lived at the Strathfield South property with his wife for some 42 years. The affidavit stated that the Defendants had been informed by a broker that they would have unconditional loan approval to pay out the loan by 13 March 2020 and that “settlement can take place within 14 working days”.

4. [16]

   Efforts were made, unsuccessfully, to contact Ms Chambers, the solicitor for the Plaintiff, so that she could appear on the urgent application. Those attempts included a call made by my Tipstaff to Ms Chambers’ office phone number which was unanswered.

5. [17]

   I determined to grant a stay of execution of the writ of possession until 17 March 2020 and stood the proceedings over for further mention before me on 24 March 2020. In a short judgment delivered that day, I said (at [5]-[10]):

Events After 3 March 2020

1. [18]

   On the afternoon of 16 March 2020, George Lazarou contacted my Associate by telephone. In circumstances where there seemed to be a desire to make some further application to the Court, I directed that the matter be listed before me at 9.30 am on 17 March 2020 and my Associate emailed Ms Chambers, the solicitor for the Plaintiff, informing her of this listing.

2. [19]

   What followed when the matter came before the Court on 17 March 2020 is explained at [7]-[11] of the judgment which I delivered that day:

3. [20]

   The Court was informed that the Plaintiff was prepared to allow the Defendants an opportunity to obtain funds in the amount of $2,150,000.00 to permit the discharge of the mortgage and the paying out of the Plaintiff by 9 April 2020.

4. [21]

   Mr Vasta, solicitor, appeared for the Defendants and made application for a stay. With respect to the status of the Strathfield South property between 17 March and 9 April 2020, my judgment of 17 March 2020 records the Court’s position (at [14]-[17]):

5. [22]

   The Court made clear that this was a final opportunity for the Defendants to resolve the matter. I noted the undertaking on behalf of the Defendants that they would vacate the Strathfield South property by 9 April 2020. However, for more abundant caution, I directed that the proceedings be listed before me at 9.30 am on 15 April 2020 to allow the Plaintiff to bring an application for issue of a writ of restitution if that course was necessary.

Application is Made for Issue of Writ of Restitution

1. [23]

   On 9 April 2020, Ms Chambers furnished to my Associate, and served on the solicitor for the Defendants, the present Notice of Motion which seeks the issue of a writ of restitution.

2. [24]

   On 14 April 2020, the solicitor for the Defendants informed the Court that the relief sought in the Notice of Motion was not opposed. Mr Vasta noted that the Court was to deal with the matter on the papers and in Chambers, without the need for a court hearing or appearance of the parties.

3. [25]

   Against this background, it is appropriate for the Court to deal with this application on the papers given the present restrictions upon Court operations by reason of the COVID-19 pandemic.

4. [26]

   I am well satisfied that a proper foundation has been demonstrated for the issue of a writ of restitution in this case. In Perpetual Limited v Kelso and Anor [2008] NSWSC 906 at [19]-[22], I said with respect to the remedy of a writ of restitution:

5. [27]

   This judgment has been applied in a number of other decisions of the Court: Australia and New Zealand Banking Group Ltd v Rafferty [2018] NSWSC 960 at [5]-[6].

6. [28]

   The Sheriff had taken possession of the Strathfield South property, by execution of a writ of possession, on the morning of 3 March 2020. By the time the Court granted a stay of execution of the writ of possession later that day, the writ had already been executed. That state of affairs had come about because of the delay of the Defendants in approaching the Court for a stay. Further, George Lazarou did not inform the Court that the Sheriff had already taken possession of the property earlier that morning.

7. [29]

   The stay of execution granted by the Court on 3 March 2020 did not constitute any authority for the Defendants to re-take possession and re-enter the Strathfield South property.

8. [30]

   Mr Christodoulou’s affidavit of 9 April 2020 established that the Defendants re-entered the Strathfield South property on or about 11 March 2020 with possession of the property being retained by the Defendants thereafter. Andreas Lazarou informed Mr Christodoulou on 15 March 2020 that the Defendants had re-entered the property by changing the locks on 11 March 2020.

9. [31]

   Despite the further indulgence which the Plaintiff has allowed since 17 March 2020, whereby the Defendants had until 9 April 2020 to pay out the Plaintiff, the Defendants have not done so.

10. [32]

    The Plaintiff has an existing right, as a result of orders made by the Court, to recover possession of the Strathfield South property and such an order should be made without further delay.

11. [33]

    If the Defendants have a realistic prospect of obtaining finance so as to discharge their indebtedness to the Plaintiff, it remains open to them to pay out the Plaintiff before the Plaintiff exercises its power of sale of the Strathfield South property: Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161; [1972] HCA 74; GE Personal Finance Pty Limited v Smith (2006) NSW ConvR 56-164; [2006] NSWSC 889 at [17]-[18]; Perpetual Limited v Kelso and Anor at [25].

12. [34]

    Given the failure of the Defendants to achieve this result in recent months, it may be that such an outcome is doubtful. However, it remains open to the Defendants to obtain finance and discharge their indebtedness to the Plaintiff in full, prior to sale by the Plaintiff of the Strathfield South property, if they wish to recover possession of that property.

13. [35]

    I make the following orders: