Supreme Court New South Wales Medium Neutral Citation: Arambasic v Veza [2014] NSWSC 258 Hearing dates: 17 March 2014 Decision date: 17 March 2014 Jurisdiction: Common Law Before: Davies J Decision: (1) Any affidavit by the Defendants is to be filed and served by 24 March. (2) Any affidavit in reply by the Plaintiff is to be filed and served by 4 April. (3) The matter is stood into the Duty Judge's List on 7 April 2014 for hearing subject to the duty judge having the time to hear the matter on that day. (4) The Defendants are to pay the Plaintiff's costs of today. Catchwords: REAL PROPERTY - indefeasibility - allegation of fraud in the registration of the plaintiff as registered proprietor - defendants claim prior interest pursuant to contract of sale - no evidence of fraud - adjournment for additional evidence Legislation Cited: Real Property Act 1900 Category: Interlocutory applications Parties: Steve Slobodan Arambasic (Plaintiff) Kaye Monique Veza (First Defendant) Gary James Griffith (Second Defendant) Representation: Counsel: In person (Plaintiff) A Moutasallem (Defendants) Solicitors: In person (Plaintiff) Stuart Percy & Associates (Defendant) File Number(s): 2013/312662 Judgment 1The Plaintiff filed a statement of claim on 16 October 2013 seeking possession of property at 10 Potch Street, Lightning Ridge. The Plaintiff is the registered proprietor of that land and claims to have bought the property from the previous registered proprietor Jasmin White. The evidence would seem to support this. The Defendants are in occupation of the property. 2It appears that an arrangement was entered into during the time that Dr White was the registered proprietor of the property whereby the Defendants would purchase the property by an instalment arrangement. A contract was apparently entered into in or about September 2005 for a purchase price of $99,650. The Defendants claim to have paid a deposit of $10,000 on 10 September. The contract provided for 1308 instalments of principal and interest of $150 per week. The property was not to be transferred to the Defendants until they had completed the purchase of the property. 3It appears to be agreed by both sides that the instalments were paid for a period of time but then ceased to be paid. There is a difference of assertion about why that was so. The Defendants say that Dr White moved away from Lightning Ridge and they were unable to make the payments to her. She, in an affidavit, denies that that is so and asserts that the Defendants simply breached the contractual arrangements. 4At some point, Dr White fell on hard times and it became necessary for her either to receive the balance of the purchase price from the Defendants or to sell the property. The property was put on the market but did not manage to sell. At some later time, the Plaintiff claims to have purchased the property for the sum of $70,000 on what was described as an "as is" condition with the Defendants in the property. The Plaintiff, in his affidavit, described them at the time as squatters and continues to do so. 5The one puzzling aspect of the arrangement is that the transfer discloses a purchase price of $1. On the evidence before me, the reason for that has not been adequately explained. 6In any event, the Defendants filed a defence on 26 November 2013. The defence does not at all comply with the rules and procedures of Court for a defence. It simply consists of a lengthy letter written by the first named defendant setting out the Defendants' side of the arrangement which asserts that they have an entitlement to the property as a result of the contract entered into with Dr White. 7Subsequently, the Plaintiff, by Notice of Motion dated 19 December 2013, has sought to strikeout the defence filed by the Defendants and to obtain judgment for possession of the land. The Notice of Motion might be thought to be a claim for summary judgment, although if the defence was struck out and no further defence was permitted to be filed or in fact filed the Plaintiff would be entitled to default judgment. 8The Defendants have resisted the claim for possession of the land and for any summary judgment against them. They seek to file an amended defence which, in substance, asserts that there was fraud between Dr White and the Plaintiff whereby he would become the registered proprietor of the land whilst he had full notice of their rights and entitlements to the land. It is asserted in this proposed defence that it is unconscionable for the Plaintiff to assert that he holds the property free of any beneficial interest of the Defendants, that there was fraud for the purposes of s 42 Real Property Act 1900 and the Plaintiff has a defeasible interest in the land. 9The only evidence, in an affidavit filed by the first defendant, that is said to support the assertion of fraud is that it is alleged that the Plaintiff and Dr White are, and have been since 2008, in a de facto relationship and that fact, together with the transfer for a consideration of $1, is said to mean that the Plaintiff was not a bona fide purchaser for value of the land. In that way, there was fraud under s 42 with the result that the register should be altered and the Defendants' interest take precedence over the Plaintiff's. 10The allegation of a de facto relationship is nothing more than that. Both the Plaintiff and Dr White have sworn affidavits denying that they are, or ever have been, in a de facto relationship. Whilst the consideration of $1 on the transfer is unusual and unexplained, it falls a long way short of constituting evidence of fraud under s 42. For fraud under that section to be established, it is necessary for the fraud to be brought home to the registered proprietor of the land - that is, the Plaintiff. Whatever rights the Defendants might have on the basis of the evidence I have seen against Dr White, there is no evidence at all to suggest that the Plaintiff is involved in any fraud that they allege. 11As I understand the position, the Defendants have recently retained solicitors and counsel in the matter. They had an opportunity to test the issues in the case when a lapsing notice was served on them in respect of a caveat that they had lodged to support their interest in the land. They failed to act in that regard. Nevertheless, because of the serious nature of the allegations I am prepared to give the Defendants one last opportunity to file and serve evidence which points to the Plaintiff's involvement in the fraud that is alleged. This evidence was supposed to have been filed by 28 February. 12The result of the failure to file and serve the evidence means that the Plaintiff has been brought here unnecessarily today and will be required to come back on the date to which I am prepared to adjourn these proceedings. In those circumstances, the Defendants should pay the costs thrown away by their failure to file all necessary evidence and by reason of the need for the adjournment from today until 7 April to which date the motion by the Plaintiff will be adjourned. 13Accordingly, I make these orders: (1)Any affidavit by the Defendants is to be filed and served by 24 March. (2)Any affidavit in reply by the Plaintiff is to be filed and served by 4 April. (3)The matter is stood into the Duty Judge's List on 7 April 2014 for hearing subject to the duty judge having the time to hear the matter on that day. (4)The Defendants are to pay the Plaintiff's costs of today. ********** 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: 18 March 2014