Fobupu Pty Ltd v Hawatt [2022] NSWSC 1089

Supreme Court New South Wales

Medium Neutral Citation: Fobupu Pty Ltd v Hawatt [2022] NSWSC 1089 Hearing dates: 11 August 2022 Date of orders: 15 August 2022 Decision date: 15 August 2022 Jurisdiction: Common Law Before: Lonergan J Decision: (1) Judgment for the plaintiff for possession of the land comprised in Certificate of Title Identifier [REDACTED] comprising property at [REDACTED]. (2) Leave to issue a writ of possession forthwith. (3) Judgment for the plaintiff in the sum of $2,640,214.72. (4) The defendants pay the plaintiff's costs of the proceedings, including the reasonable legal costs of the plaintiff's solicitor on a solicitor/client basis. Catchwords: LAND LAW – possession of land – default on mortgage – where first defendant is bankrupt – mortgagee entitled to possession – leave granted to issue writ of possession – no point of principle Legislation Cited: Australian Consumer Law (NSW) Real Property Act 1900 (NSW) Category: Principal judgment Parties: Fobupu Pty Ltd (Plaintiff) Majed Hawatt (First Defendant) Rania Hawatt (Second Defendant) Representation: Counsel: P Afshar (Plaintiff) No appearance (First Defendant) In person (Second Defendant)

Solicitors: Mills Oakley (Plaintiff) File Number(s): 2021/00152032 Publication restriction: Nil

Judgment 1. The plaintiff, Fobupu Pty Ltd, seeks judgment against the defendants, Majeed Hawatt and Rania Hawatt, (now Rania Chemaissen), for possession of property at [REDACTED] and payment of a loan with interest. 2. The defendants are the registered proprietors of a property comprised in Certificate of Title Folio Identifier [REDACTED] in New South Wales [REDACTED], ("the Property"), as tenants in common in equal shares. 3. Pursuant to a Loan Agreement executed in August 2017, the plaintiff agreed to and did loan $1.5 million to the defendants. The loan was secured on the property by a registered mortgage. 4. The Loan Agreement required repayment on 1 March 2018 of the $1.5 million advanced, together with interest at 12% per annum over the loan period. It was not repaid. 5. On 25 May 2021 a Notice pursuant to s 57(2) of the Real Property Act 1900 (NSW) ("the Act") was delivered to the defendants which stated that unless the Notice was complied with within 1 month, the mortgagee proposed to exercise its power of sale over the property. In the Notice, the sum due comprising the loan and interest was identified as $2,250,493.14 plus $400 for the costs associated with issuing the Notice. 6. On 27 May 2021 the Statement of Claim was filed seeking judgment for possession and judgment in an amount to be fixed by the Court at final hearing, plus costs. 7. A Defence was filed by the first defendant on 17 August 2021 asserting that the plaintiff knew the defendants' ability to repay the loan depended on "sales from the Mosman building construction project" and that the inability to repay the loan was due to "delays to the project caused by COVID-19 restrictions" and that the Loan Agreement was "frustrated" by COVID-19 and it was "unconscionable" to enforce the loan. The first defendant was represented for a period by a solicitor who raised substantive defences in an Amended Defence filed on 8 December 2021, including that there were representations made by the plaintiff to the first defendant that he did not have to repay the loan until completion of the development, that the plaintiff contravened the Australian Consumer Law and that an estoppel applied. 8. There were many adjourned directions hearings including three in December 2021 to allow time for that solicitor to prepare evidence to pursue those asserted defences. There were delays which on occasion seemed to be "delaying tactics" as opposed to a genuine need for further time to prepare. When attempting to set a date for hearing, the first defendant asserted via his solicitor in February and early March 2022, that he could not take a hearing date until October 2022 due to work commitments. He asserted this on oath in an affidavit filed in March 2022. The Court required that the first defendant attend Court by AVL and explain why, and if that was in fact the case. He readily conceded to the Court after a small number of questions that he could in fact appear in August and so an August hearing date was fixed. 9. In May 2022, shortly before the directions hearing on 24 May 2022, the solicitor for the first defendant informed the Court of his intention to cease to act. He filed a Notice of Ceasing to Act on 19 July 2022. 10. On 8 April 2022, the Official Receiver in Bankruptcy had accepted a Bankruptcy Form and Debtors Petition filed by the first defendant and Liam Bailey was appointed Trustee of the first defendant's estate. It appears this fact was drawn to the Court's attention in or around July 2022. 11. In July 2022 the Trustee informed the Court in writing that he does not oppose the relief sought by the plaintiff in the Statement of Claim and has confirmed by email that he does not press the defences set out in the Amended Defence filed on 8 December 2021.