Supreme Court New South Wales Medium Neutral Citation: CEG Securities Pty Ltd v Pajtas Pty Ltd [2024] NSWSC 1031 Hearing dates: 16 August 2024 Date of orders: 16 August 2024 Decision date: 16 August 2024 Jurisdiction: Common Law Before: Davies J Decision: 1. Judgment for the Plaintiff for possession of the land described in folio identifier 15/29099 and known as XX Cronin Street Penrith NSW 2750 ("the Property"). 2. Leave is granted to the Plaintiff to issue a writ of possession in respect of the Property such writ not to be executed before 30 September 2024. 3. The Second and Third Defendants are to pay the costs of the Plaintiff in accordance with the terms of registered mortgage AS735976. 4. The balance of the proceedings stood over for Directions before the Registrar at 9:00am on 29 November 2024. Catchwords: LAND LAW – possession of land – default under loan agreement and mortgage – where principal not repaid at expiry of the loan agreement – summary judgment sought against guarantors – where defendants failed to serve evidence in response to plaintiff's claim – defendants' defence unarguable – summary judgment ordered Legislation Cited: Contracts Review Act 1980 (NSW) Real Property Act 1900 (NSW) Cases Cited: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Texts Cited: Nil Category: Procedural rulings Parties: CEG Securities Pty Ltd (Plaintiff) Pajtas Pty Ltd (First Defendant) Peter Neil Jones (Second Defendant) Catherine O'Toole (Third Defendant) Representation: Counsel: A Rogers (Plaintiff) No appearance (Deregistered) (First Defendant) Mr P Jones (In person) (Second Defendant) No appearance (Third Defendant) Solicitors: Ronayne Owens Lawyers (Plaintiff) Unrepresented (Deregistered) (First Defendant) Self-represented (Second Defendant) Self-represented (Third Defendant) File Number(s): 2024/152620 Publication restriction: Nil Judgment 1. These proceedings commenced on 24 April 2024. They seek possession of a property at XX Cronin Street, Penrith, and judgment for an amount said to be outstanding to the plaintiff. The claim is based on default under a loan agreement and a mortgage entered into as security for that loan agreement. 2. The loan agreement was dated 19 June 2022 and involved an amount of $260,000 which was loaned to the first defendant. The loan was for a 12-month period expiring on 19 December 2023. 3. The second and third defendants are guarantors of the loan and, in that capacity, they gave a mortgage over the Penrith property on 19 December 2022. The mortgage is a second registered mortgage on the land, the first registered mortgagee being Pepper Finance Corporation Limited. 4. The loan was not repaid on 19 December 2023 or at all and a default thereby was occasioned. 5. The defendants, each acting for themselves, filed defences which were effectively identical. I was informed by the second and third defendants at a directions hearing that the defendants had received some legal assistance in the drafting of the defences, but they have never had a solicitor acting for them. 6. The defences admitted the loan agreement and the mortgage but, in a number of places, said allegations in the statement of claim were not admitted because the defendants had not completed their investigations to determine whether the allegations were true or false. The defences went on to say that the defendants would plead further once their investigations were complete. The defences were all filed on 22 May 2024, but no subsequent amended defence has been filed by any of the defendants. 7. The defences pleaded further that the defendants did not receive proper legal advice, or did not receive proper independent legal advice, and that they were in a vulnerable position and unable to protect their interests. This was the only defence of substance raised. 8. By a notice of motion filed 12 July 2024, the plaintiff seeks summary judgment for possession of the land but not at this stage for the amount said to be outstanding pursuant to the loan agreement. 9. The first defendant has been de-registered, but the notice of motion does not in any event concern the first defendant. 10. The second defendant, Mr Jones, has appeared in person today. 11. No evidence has been filed on behalf of the defendants in opposition to the notice of motion despite directions having been made on two occasions for such evidence to be filed. In that regard, it should be noted that at the directions hearing on 2 August 2024 I was informed by the second and third defendants that the 12-month loan had been extended for a period of 3 months. No such extension was raised in any of the defences filed, nor has there been evidence provided by the defendants of such an extension. However, even if such extension was agreed, that scarcely matters because it would have meant that the loan was repayable on 19 March 2024, and it was not repaid by that time. 12. A notice under s 57 of the Real Property Act 1900 (NSW), although not necessary for the purpose of obtaining a judgment for possession, was served on 19 March 2024 requiring payment of the whole of the debt, and that notice was not complied with, ultimately leading to the filing of the statement of claim. 13. The evidence discloses that the amount of the loan was advanced on 19 December 2022, less certain amounts for fees, professional costs and rates. The evidence discloses that the loan has not been repaid. 14. The mortgage makes clear that it was given to secure the advance of $260,000 and provides that an event of default under the mortgage is a default in the performance of any term or agreement in the mortgage or any collateral documents, which includes the loan agreement. 15. The evidence demonstrates that the second and third defendants signed the guarantee and the mortgage. The evidence also discloses that, at the time of the execution of the various documents, legal advice was provided to each of the defendants by a solicitor. Each of the defendants has signed a certificate saying that they obtained legal advice in relation to their liability and obligations under the guarantees, and that they understood the effect of the loan agreement, the mortgage and the guarantees. There are further certificates by the solicitor who acted for them saying that he provided legal advice about the documents. 16. The second defendant, in his submissions today, and in an email sent to my associate yesterday, provided information that he and the third defendant had found a purchaser for the property and it was expected the contracts would be exchanged, possibly, on Tuesday of next week. The sale price was $900,000. 17. The property is not only subject to a first registered mortgage to Pepper Finance but there is also a caveat lodged on the property. Mr Jones informed me that he has the agreement of the caveator to the sale of the property, but he does not have the consent of Pepper Finance to sell the property. He informed me that the amount outstanding to Pepper Finance is approximately $400,000, that the amount due to the caveator is about $72,000, and that the amount due to CEG is around $300,000. That would mean that both mortgagees and the caveator will be paid out on settlement. Mr Jones has sought in that regard that a determination on the present motion should be delayed to enable the contract to be entered into. 18. I do not consider that the determination of the motion should be delayed for the following reasons. 19. The defendants have not complied with directions made on a number of occasions to progress this matter. Orders were made by the registrar on 11 June 2024 for the second and third defendants to respond to a request for further and better particulars of the defences which had been filed. No such particulars have been provided. 20. When the matter came before me on 10 July 2024, the defendants did not appear. They had sent an email the previous afternoon to my associate seeking a three week adjournment to enable them to obtain advice and representation. I made orders for the filing of a notice of motion by the plaintiff for summary judgment and directed the defendants to file and serve any material in response the plaintiff's motion by 26 July 2024. The plaintiff's notice of motion was returnable for hearing on 2 August 2024. No material was filed or served by the defendants. 21. On 2 August 2024 the second and third defendants appeared and sought an adjournment for a week "to put things before the Court in a proper form". They said they wanted to seek relief under the Contracts Review Act 1980 (NSW). Notwithstanding the opposition of the plaintiff to the adjournment, I adjourned the proceedings to 16 August 2024, and directed that any amended defences and affidavits in response to the plaintiff's motion be filed and served by 9 August 2024. No such defences or affidavits were filed. 22. I am entirely dependent on what Mr Jones has told me from the bar table about the prospects of entering into a contract for sale. There is no consent to the sale by Pepper Finance. 23. The plaintiff seeks to proceed with its motion in the circumstances, and I consider that the plaintiff should be permitted to do so in all the circumstances. 24. The defences filed do not disclose a defence to the plaintiff's claim. The only matter of substance raised in the defences is that the defendants did not receive proper independent legal advice. On the face of the documents, the defendants were provided with independent legal advice as they certified in documents provided to the plaintiff, and as the solicitor also certified. No evidence has been provided contrary to what is contained in those certificates. As noted, the defendants were provided with an opportunity to provide evidence in response to the plaintiff's claim but they have not done so. In the circumstances, the matters raised in the defences are unarguable on the part of the defendants. The test is set out in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. 25. Accordingly, the plaintiff establishes that it is entitled to summary judgment for possession of the land. 26. The plaintiff seeks also that it be granted leave to issue a writ of possession to enforce the judgment of the Court. The property is the home of the second and third defendants and they must be given a reasonable time to vacate the property if a writ is to be executed. 27. In all of those circumstances, I make the following orders: 1. Judgment for the Plaintiff for possession of the land described in folio identifier 15/29099 and known as XX Cronin Street Penrith NSW 2750 ("the Property"). 2. Leave is granted to the Plaintiff to issue a writ of possession in respect of the Property such writ not to be executed before 30 September 2024. 3. The Second and Third Defendants are to pay the costs of the Plaintiff in accordance with the terms of registered mortgage AS735976. 4. The balance of the proceedings stood over for Directions before the Registrar at 9:00am on 29 November 2024. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 August 2024