Vista Capital v Hussain & Ors [2007] NSWSC 344

New South Wales Supreme Court

CITATION : Vista Capital v Hussain & Ors [2007] NSWSC 344

HEARING DATE(S) : 15 March 2007

JUDGMENT DATE : 16 April 2007

JURISDICTION : Common Law Division

JUDGMENT OF : Studdert J

DECISION : The sums advanced by the plaintiff to the defendants were secured by registered mortgages AB448901 and AB448902. The question of costs is reserved.

LEGISLATION CITED : Real Property Act

Manks v Whiteley (1912) 1 Ch 735 CASES CITED : Nunn v Wily [2001] NSWSC 317 Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 Smith v Chadwick (1881-82) 20 ChD 27

Vista Capital Pty Limited (Plaintiff) PARTIES : Fahmi Hussain (1st Defendant) Marej Hussain (2nd Defendant)

FILE NUMBER(S) : SC 15409/05

COUNSEL : S. Velik (Sol) (Plaintiff) D. Knaggs (Sol) Defendants

SOLICITORS : Velik Solicitors (Plaintiff) Cross Law (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

STUDDERT J

Monday 16 April 2007

15409/05 VISTA CAPITAL PTY LIMITED v FAHMI HUSSAIN & ORS

JUDGMENT 1 HIS HONOUR: By statement of claim filed on 21 November 2005 the plaintiff, Vista Capital Pty Limited, claimed possession of premises from the defendants, Fahmi and Marej Hussain, and the plaintiff also sought to recover advances allegedly made to the defendants totalling $310,000. It was contended that these advances were secured by mortgages over the subject premises, namely two units in Cowper Wharf Road, Woolloomooloo. The plaintiff succeeded in obtaining judgment for possession and the writ of possession that issued has been executed. 2 There were in place three registered mortgages over the subject premises, the first mortgage being in favour of the Commonwealth Bank and the second and the third mortgages being in favour of the plaintiff. The properties have been sold and the bank has recovered what was due to it. The balance of the proceeds of sale are retained in an interest bearing bank account pending determination of the proceedings on foot between the plaintiff and the defendants. 3 On 8 February 2007 an order was made for the separate determination of the issue as to whether the sums advanced by the plaintiff to the defendants were secured by way of mortgage. This issue was squarely raised by part of the relief sought by the defendants by way of cross claim. There the defendants seek a declaration in these terms: "That neither of the loan agreements is secured by registered mortgage AB448902F or B4489901H between the Hussains and Vista." 4 The point at issue before me is a narrow one. There is no issue but that the plaintiff advanced the money to the defendants by two advances, the first of $260,000 and the second of $50,000. The issue is whether payment of those advances was secured by the registered second and third mortgages. 5 The relevant documentation was exhibited to the affidavit of Dimitri Amargianitakis sworn 17 May 2006: (i) On 21 September 2004 the defendants signed a loan agreement for an amount of $260,000. That agreement provided for interest at 2.5% per month for the term of the loan and there was a default rate of 4%, for which provision was made also. The term of the loan was expressed to be three calendar months from the date of draw down. The agreement contained the following provision as to security: "The following will be security for this contract. A second Mortgage in registerable form secured by a Caveat to be registered on title Folio Identifiers 39/SP61766 and 8/SP61618 and known as 108/4-6 Cowper Wharf Road, Woolloomooloo with a minimum value of $1,200,000.00. Loan to Commonwealth Bank to be capped at $650,000." (ii) The mortgage document is undated but it identifies the defendants as the mortgagors and recites that they mortgage to the mortgagee (it is agreed that Pakair Pty Limited named as the mortgagee was the predecessor of the plaintiff) "all the mortgagor's estate and interest" in the property mortgaged, and it records that the defendants covenant with the mortgagee "that the provisions set out in the annexure and/or memorandum specified below are incorporated in this mortgage: · Annexure A hereto; · Memorandum No. Q860000" The property mortgaged is identified consistently with the description in the loan agreement.