On 10 June 2014, His Honour, Justice Bellew, handed down a decision in the Supreme Court of New South Wales in proceedings Australia and New Zealand Banking Group Limited v Huybers & Anor [2014] NSWSC 720.
The case provides guidance on two issues which concern mortgagees, namely:
- where there has been delay on the part of a person bringing an application for a stay on an eviction; and
- where an allegation of fraud is made against a mortgagee.
Kemp Strang acted for ANZ in the case.
Background
The proceedings were commenced by ANZ in April 2013 against Ms Huybers, a company known as Pineview Property Holdings Pty Ltd (Pineview) and a further company of which Ms Huybers was the sole director. The proceedings sought possession of two adjoining properties in Galston (Galston Properties) as well as judgment for certain debts.
ANZ served a Notice to Occupier on the occupier of the Galston Properties, Biagina Rubino, on 14 April 2013.
Shortly thereafter, ANZ obtained default judgment and writs of possession were issued in July 2013. Evictions were scheduled to be carried out at the properties on 30 August 2013.
On the eve of the evictions, Ms Rubino filed an application seeking a stay on the execution of the writs of possession. A temporary stay was granted until Ms Rubino's application could be heard.
During the course of Ms Rubino's application, 11 affidavits were served on her behalf. In addition, on 8 October 2013, Ms Rubino commenced proceedings in the Equity Division of the Supreme Court of New South Wales against ANZ and others.
The affidavits and the statement of claim filed in the Equity Proceedings made allegations that ANZ had participated in or had knowledge of a fraud perpetrated against Ms Rubino.
As a result of the alleged fraud, Ms Rubino claimed that the execution of the writs of possession should be stayed until such time as the Equity Proceedings were finally determined.
ANZ rejected any allegation that it had taken part in any alleged fraud perpetrated against Ms Rubino. ANZ also pointed to the delay in Ms Rubino bringing her application in circumstances where:
- she had become aware in September 2012 that the Galston Properties had been transferred to Pineview; and
- ANZ had served a notice to occupier in February 2013; and
- notwithstanding the above, Ms Rubino did not file her application until 29 August 2013.
Allegations of Fraud
In support of her allegation, Ms Rubino submitted that provided that the statement of claim in the Equity Proceedings was properly pleaded, on that basis alone, the Court should conclude that Ms Rubino had an arguable case against ANZ that it had knowingly assisted in the fraud allegedly committed against Ms Rubino by Pineview.
This submission was rejected by His Honour who stated that allegations contained in a statement of claim are nothing more than that. They say nothing about the strength of a case.
Ms Rubino then made submissions that the alleged circumstances surrounding the transfer of the Galston Properties to Pineview (in which ANZ played no part) and ANZ's "unusual" conduct in advancing monies to Pineview (which amounted to nothing more than some minor administrative oversights on the part of ANZ) amounted to ANZ participating in, or knowingly assisting, a fraud perpetrated by Pineview against Ms Rubino.
The Court found that even if it was accepted that some aspects of the transactions with ANZ were unusual, they were no more than that. The matters raised by Ms Rubino failed to establish that ANZ had participated in or had knowledge of any alleged fraud committed by Pineview against Ms Rubino.
Delay
The Court found that the delay in bringing the application, in the absence of any evidence which would explain the delay, was a further factor against the making of the orders sought in Ms Rubino's application.
Lessons for Mortgagees
The case is advantageous for mortgagees as it highlights that:
- a mere allegation of fraud against a mortgagee is not sufficient for an applicant to obtain a stay on the execution of the writ of possession. The person making the allegation must also have evidence of the actual knowledge of the fraud or participation in a fraud by the mortgagee; and
- delay by the person bringing the application for a stay on the execution of a writ of possession may cause that application to be dismissed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
