Perpetual Trustee Company Limited v Azzi [2008] NSWSC 1008

New South Wales Supreme Court

CITATION : Perpetual Trustee Company Limited v Azzi [2008] NSWSC 1008

HEARING DATE(S) : 23 September 2008

JUDGMENT DATE : 25 September 2008

JURISDICTION : Common Law

JUDGMENT OF : Harrison AsJ

(1) The plaintiff's notice of motion filed 25 June 2008 is dismissed. DECISION : (2) The defendant is to file and serve a cross claim within 14 days. (3) The plaintiff is to pay the defendant's costs as agreed or assessed.

CATCHWORDS : SUMMARY JUDGMENT - Constracts Review Act defence

Contracts Review Act 1980 LEGISLATION CITED : Consumer Credit (New South Wales) Code Uniform Civil Procedure Rules

CATEGORY : Procedural and other rulings

CASES CITED : Commercial Banking Co of Sydney Ltd v Pollard (1983) 1 NSWLR 74 Commonwealth of Australia v Griffiths & Anor [2007] NSWCA 370

PARTIES : Perpetual Trustee Company Limited (Plaintiff) Carole Azzi (Defendant)

FILE NUMBER(S) : SC 11501/2007

COUNSEL : A Casselden (Plaintiff) J Merkel (Defendant)

SOLICITORS : Gadens Lawyers (Plaintiff) Margiotta (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION POSSESSION LIST

ASSOCIATE JUSTICE HARRISON

THURSDAY, 25 SEPTEMBER 2008

11501/2007 - PERPETUAL TRUSTEE COMPANY LIMITED v CAROLE AZZI

JUDGMENT (Summary judgment – Contracts Review Act defence) 1 HER HONOUR: By notice of motion filed 25 June 2008, the plaintiff seeks an order that there be judgment for the plaintiff against the defendant for possession of the land comprised in folio identifier 238/213510. The plaintiff is not pressing paragraphs 1 and 2 of the notice of motion. At this stage it is not seeking judgment for moneys owed. 2 The plaintiff is Perpetual Trustee Company Limited (Perpetual Trustee). The defendant is Carole Azzi (Mrs Azzi). Perpetual Trustee relied on the affidavits of Carey Wingate dated 7 December 2007 and 30 June 2008. Mrs Azzi relied on her affidavits sworn 14 August 2007, 20 August 2007 and 4 March 2008. 3 On 28 June 2007, default judgment was entered. On 6 March 2008, the default judgment was set aside. 4 By statement of claim filed 22 March 2007, Perpetual Trustee seeks possession of the property at Lurnea. The defendant is the registered proprietor of the property. Perpetual Trustee seeks possession of the land contained in registered mortgage number AA249671 (the mortgage). The mortgage imposed an obligation on the defendant to pay money to Perpetual Trustee as required under the terms of the agreement, a breach of which obligation has occurred. The mortgage confers a right to possession of the land on Perpetual Trustee that is contingent on there being default under the mortgage by the defendant. The defendant has defaulted under the mortgage. Perpetual Trustee pleads that it's right to possession of the land arises from the defendant's failure to pay money to it. The defendant's failure to pay money to Perpetual Trustee began on 29 December 2006. The amount of money currently unpaid is $578,518.08 as at 19 March 2007, which has been calculated in accordance with the terms of the agreement. 5 The defendant admits that there is a mortgage between Perpetual Trustee and herself, she was obliged to make payments and under the mortgage Perpetual Trustee is entitled to possession. She admits that payments are in arrears although she disputes the amount. However, by defence at [16] to [19] she pleads: "16. Further and in the alternative, in answer to the whole of the allegations in the Statement of Claim, the Mortgage secured the obligations of the defendant under the Agreement over the property at xx xxxx xxxxxx, Lurnea, and the property was the home of the defendant. 17. At the time the Agreement and the Mortgage were entered into: (a) the defendant owned and resided in the home; (b) the home was the only substantial asset of the defendant; (c) the first defendant had no income or source of income; (e) the value of the home exceeded the amount sought to be borrowed by the first and second defendants; (h) the plaintiff made no inquiry of the defendant as to her income; (i) the plaintiff did not know and did not inquire as to the purpose for which the amount of $300,000.00 to be advanced under the Agreement was to be applied; (j) the plaintiff was indifferent to the ability of the defendant to repay the amount advanced, and was content to lend on the basis of the security value of the home alone. 18. Further and in the alternative, at the time of execution of the Agreement and the Mortgage, the defendant: (a) did not know; (b) had not read; (c) did not understand; and (d) had received no legal or other advice, independent or otherwise, in relation to the terms or the legal and practical effect; of the Agreement and the Mortgage; (e) did not know or understand the amount that could or was to be advanced under the Agreement; (f) did not know that an amount was to be advanced to her husband under the transaction of which the Agreement formed a part; 19. The plaintiff either knew or ought reasonably to have known that the defendant: (a) not read, and did not understand the terms of the Agreement; and (b) did not know the purpose for which moneys advanced under the Agreement were to be applied." 6 Mrs Azzi contends that it would be unconscionable to permit Perpetual Trustee to assert such legal rights as it may have under the agreement and the mortgage, and to obtain possession and sell the property in order to recover any such moneys. Mrs Azzi claims that the agreement and mortgage are unjust and she seeks relief under the Contracts Review Act 1980 and s 70 of the Consumer Credit (New South Wales) Code. 7 The plaintiff's counsel referred to various documents. I accept that they establish the plaintiff's legal entitlement to possession of the property. The documents of interest show that Mrs Azzi was a director of FAD Glass Pty Ltd. Her tax returns disclose that for the year ended 30 June 2002 her nett income was $134,986 and for the year ending 30 June 2003 her nett income was $139,850. Mrs Azzi is also the registered proprietor of an investment property at Miller [tab 5]. 8 Mrs Azzi deposes that she was born in Lebanon in 1977. In 1984 she came to Australia with her parents. Although she had attended primary school in Lebanon, when she came to Australia she commenced Year 1 because she could not speak English. She attended school until Year 11. After completing Year 11, her husband Khaled Azzi, did not wish her to finish Year 12, because he wished to look after her. She left school and she and her husband were married in 1995. They have three children. Since leaving school, she has looked after the children and been a full-time housewife. She is attending TAFE and is currently doing the 3rd year of a floristry course. She has never had a job, profession or occupation apart from housewife and mother. The only paid employment she has ever undertaken is when she worked at Target for approximately six months when she was at school. She says she did some practical experience with a florist in 2006, consisting of approximately 10 hour per week for four or five months as this was a compulsory part of the TAFE course. 9 Mrs Azzi further deposes that her husband has conducted a glass business since approximately 1998. She had never had anything to do with the financial affairs of her husband, or of the household. Since they were married, she had given all bills or papers, which are received in the mail to her husband. 10 Mrs Azzi says that over the years her husband has asked her to sign papers from time to time. She has signed various papers, which he gave her. Each time he has given her papers to sign, he had indicated on the piece of paper where she was to sign and she did so. Her husband did not give the papers to her to read, nor did he give her an opportunity to read them. She did not read them nor did she know what the papers were. 11 Some time in 2003, Mrs Azzi's husband said to her words to the effect, "I am going to transfer all the assets into your name. You will have to sign some papers." She replied, "Is that necessary?" He said, "I have never heard of a wife who complained about having everything transferred into her name." This was the only discussion they had about transferring assets into Mrs Azzi's name. 12 Some time in the second half of 2003, Mr Azzi asked Mrs Azzi to go to a solicitor's office to sign some papers. They went to the offices of a solicitor in Parramatta, who to the best of Mrs Azzi's recollection was named Sid Hawach. The meeting lasted approximately 10 to 15 minutes. During that time Mrs Azzi says that Mr Hawach was talking to her husband and Mr Hawach put some papers in front of her to sign and she signed where he indicated. Mrs Azzi recalls that Mr Hawach told her that some of the documents were in relation to a separation agreement. He did not say anything about any transfer of title, mortgage or loan agreement. She says that neither Mr Hawach nor anybody else has ever informed her that she was signing a mortgage or loan agreement. Nobody ever explained to her that she was undertaking any liability to make repayment to a bank. 13 Mrs Azzi says that at no time was she informed that she was entering into a loan agreement or mortgage, or borrowing money. She says that she did not know, nor was she told that she was signing a document, which had the effect of borrowing money and giving it to her husband. She was not asked to read the document, nor was it given to her to read. She says that as far as she is aware she has never signed any loan agreement or mortgage. 14 The plaintiff referred to a copy of family law terms of settlement undated and not signed by Mrs Azzi. Paragraphs 5 to 8 read: "5. That the Husband transfer to the Wife all his right title and interest in the former matrimonial home situated at and known as xx xxxxx xxxxx Lurnea, in the State of New South Wales. 6. That the Wife shall indemnify the Husband in relation to all outgoings in respect of the said matrimonial home including all payments in respect of the mortgage, rates, taxes, charges, insurance and expenses in relation to repairs and improvements and any other sums due or accruing in respect of the said property. 7. That the Wife continue to pay, as they fall due, all regular instalments in respect of the mortgage, council rates, water rates, household insurance in respect of the matrimonial home situated and known as xx xxxxx xxxxx Lurnea, in the State of New South Wales and the Wife pay forthwith any arrears in respect of any of the said instalments. 8. That parties do all acts and things and sign all documents necessary for the ownership of the company known as FAD Glass Pty Limited to be transferred to the Husband's sole name." 15 On 10 November 2003, Mr Howach solicitor, directed the solicitors acting for Perpetual Trustee to pay on settlement as follows: 1 Sid Hawach & Associates (P16) $2,577.50 2 Sid Hawach & Associates (A147) $990.00 3 Smith Monti Legal $2,707.70 4 National Australia Limited $311,500.00 5 K. Azzi $254,811.80 6 Bank cheque fees $16.00