National Australia Bank v Sayed (No. 3)

On 17 April 2015 judgment was given in these proceedings by Harrison AsJ after a hearing. The terms of the judgment were relevantly these:

The judgment also provided that there was to be no stay on the enforcement of the judgment. The cross-claim filed by the First Defendant was listed for directions on 28 May.

The Defendants failed to pay the amount of $670,000 by 16 August 2015 or at all. As a result, a writ of possession issued pursuant to the orders. That writ is due for execution tomorrow, 8 October 2015.

By Notice of Motion filed 4 September 2015, the First Defendant, Mr Sayed, seeks a stay of the orders of 16 April 2015 until his cross-claim is heard. The cross-claim concerns a sale at what is said to be an under value of other land at Corrimal. That land was sold by the bank on 19 February 2010 for $545,545.45.

Mr Sayed has had various lawyers acting for him, including until very recently Paul Bard Lawyers who instructed Mr Jim Thomson of counsel. It was while these lawyers were acting for him that the final form of the amended cross-claim was settled, filed on 18 August 2015 and served.

Mr Sayed appeared for himself on the present application. He informed me that he did not have lawyers acting for him because he could now not afford to do so.

The stay appeared to be put on three bases. First, it was asserted that remarks I made in an interlocutory judgment, that is National Australia Bank v Sayed (No.2) [2012] NSWSC 20, suggested that what was sought in the cross-claim amounted to a set-off. Secondly, if Mr Sayed was successful on the cross-claim, the debt on Woonona would be paid out, and even if he was not successful, there was enough equity in Woonona to pay the bank out if Woonona had to be sold down the track.

Thirdly, he could not afford to pay the $670,000 in accordance with the judgment and this was because his Credit Reference Association information with VEDA recorded a default listing with Credit Corp Services in respect of a debt of $7,699 that subsequently led to a service of a bankruptcy notice. This VEDA notification was said to be in breach of the In Principle Agreement that formed the basis for the judgment.

In that regard Mr Sayed relied on exhibit A. Exhibit A was an email from the solicitor for the Bank to Andrew Luong who was, I was informed, Mrs Sayed's solicitor at the date of the email, 23 August 2012. That email first provided for the settlement amount of $670,000 to be paid that was ultimately included in the In Principle Agreement. Paragraph 2 of the email went on to say this:

As far as the first basis put forward for a stay is concerned, that is, remarks I made in my judgment, what I said is in fact contrary to what is asserted by Mr Sayed. In that judgment I said this:

Moreover, the form of the Amended Cross-Claim has expressly severed any connection between what happened in relation to the sale of Corrimal and any effect that that has on the Woonona property. I refer in that regard particularly to prayers 2, 4 and 7 and to paragraphs 5 to 10, 15 and 47 to 51 of the pleading.

In Murphy v Zamonex Pty Ltd (1993) 31 NSWLR 439 Giles J said at 465:

In Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 Walsh J said:

As the learned authors of Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th Edition 2015 Lexis Nexis) make clear, for the claim to amount to an equitable set-off the claim must impeach the Plaintiff’s claim or, in the case of a mortgage, impeach the Plaintiff’s title to the mortgage. They say at [39-060(g)]:

In Lord v Direct Acceptance Corporation Ltd (Receiver And Manager Appointed) (In Liq) (1993) 32 NSWLR 362 Sheller JA with whom Kirby P and Meagher JA agreed said at 367:

A complaint about the sale of a property at an under value is not one that impeaches the title of the Plaintiff to the land in question.

As far as the second basis for the stay is concerned, that is, that if Mr Sayed is successful on the cross-claim, the Woonona debt would be paid out on the basis of the pleading in the Amended Cross-Claim, the best result for Mr Sayed would be a finding that the Corrimal property was worth $1,050,000. So much appears in paragraph 38. All other things being equal, Mr Sayed would have $505,000 to pay out a debt on Woonona of $670,000. He was unable to say where the balance would be sourced. There was no evidence put on to demonstrate that he had other funds or availability to other funds to make up the difference.

However, all other things are not equal. First, on the assumption of a determination of the Cross-Claim by 1 September 2016, the evidence tends to suggest that interest alone to the date of the sale of Woonona in about January 2017 would amount to about $100,000 and the marketing and legal costs might be in the vicinity of about $60,000. The shortfall would be thereby increased.

Secondly, Mr Sayed's own evidence discloses that his former business partner, Mr Richard Taylor, had a 50 per cent interest in the Corrimal property. The evidence for this is to be found in paragraph 3 of Mr Sayed's affidavit of 22 April 2013 and tab 1 of exhibit 1 to that affidavit, paragraphs 9, 11, 12 and 15 of an affidavit of Mr Sayed of 22 August 2011 (which is tab 2 of the exhibit to Mr Sayed's April 2013 affidavit) and also the material behind tab 12 to that exhibit which includes the caveat lodged by Mr Taylor.

Mr Sayed said in submissions that Mr Taylor had been paid. The only evidence to support that submission was said to be paragraph 17 of Mr Sayed's affidavit of 22 April 2013, but that paragraph evidences only discussions between Mr Sayed and Mr Taylor in March 2009 of what might happen if certain offers were accepted in relation to the Corrimal development.

As far as the third basis for the stay is concerned, that is the breach asserted by the Bank of the In Principle Agreement and that part of it contained in exhibit A (the email of the 23 August 2012), tab 7 of Mr Sayed's exhibit to his affidavit of 4 September 2015 discloses that on 13 February 2009 NAB assigned a debt owed to it of $6,366.70 to Credit Corp Services Pty Ltd with a notice under s 12 of the Conveyancing Act 1919 (NSW) being given to Mr Sayed on the 4 March 2009. The VEDA document shows that its knowledge of that debt was derived from Credit Corp Services who obtained a judgment in the Local Court Downing Centre on 19 October 2010 for a claim made in 2009. On its face, this debt has nothing to do with the Corrimal or Woonona loans.

Moreover, there is no evidence that the debt had anything to do with the Corrimal or Woonona loans. Mr Sayed asserted that it did and pointed to paragraph 7 of the In Principle Agreement which provided: "Settlement amount of judgment debt includes amount owing on ‘Classic Account’ (approximately $26,000)." However, that could not be the same debt because the debt Credit Corp Services has obtained had been assigned in 2009.

Mr Sayed said the bank had failed to prove that it was not the same debt. However, he is seeking the stay on the ground inter alia that the Bank breached the In Principle Agreement. The onus is on him in the first instance to prove it was the same debt. The evidence is clearly to the contrary as I have shown.

The authorities that I mentioned earlier in relation to set-off concerned a claim in respect of land when the Mortgagee was at the stage of seeking a judgment for possession of that land. In the present case, by contrast, two things substantially strengthen the Bank's position.

First, it has a judgment which the Defendant was given time to satisfy but has not done so.

Secondly, the land, the subject of the dispute, is not the same land, and any award of damages in the Defendants’ favour will not go to diminish what is owing under the judgment; rather it will merely provide a source of funds to reduce but not satisfy the judgment.

One further thing should be mentioned. Mrs Sayed was a party to the proceedings which resulted in the judgment. She was not made a party to this motion when she should have been. Her interests are not necessarily coextensive with Mr Sayed's. It is entirely possible that, especially in the light of the evidence from Alexandra Kirby, the Bank's lawyer, that Mrs Sayed would not have supported the present motion.

Mr Sayed fails to demonstrate any basis upon which the stay should be granted.

The Notice of Motion of 4 September 2015 is dismissed with costs.