Taheri v Vitek [2014] NSWCA 157

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Taheri v Vitek [2014] NSWCA 157 Hearing dates: 13 May 2014 Decision date: 13 May 2014 Before: Leeming JA Decision: The notice of motion dated 8 May 2014 is dismissed with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: PRACTICE AND PROCEDURE - terms of stay of execution pending appeal - application to vary charge over appellant's property - application dismissed Category: Interlocutory applications Parties: Ms Veeda Taheri (Appellant) Mr Peter Vitek (First Respondent) Mrs Shoshana Vitek (Second Respondent) Representation: Counsel: MW Sneddon (Appellant/Respondent on the motion) D Pritchard SC (Respondent/Applicant on the motion) Solicitors: McLaughlin & Riordan (Appellant) Farrar Lawyers (Respondent) File Number(s): 2013/364156 Decision under appeal Citation: [2013] NSWSC 1764 Date of Decision: 2013-11-22 00:00:00 Before: Rein J File Number(s): 2005/258339

Judgment 1LEEMING JA: Before the court, pursuant to liberty to apply granted by me on 11 December 2013, is the application by Mr and Mrs Vitek, the respondents to an appeal listed for hearing in 15 days time, for, in essence, an order requiring the respondent/appellant, Ms Taheri, to execute a charge in the form annexed and marked A. The substance of the application is for orders placing the Viteks in the position of registered legal chargees in respect of land owned by Ms Taheri. I have been taken to correspondence between the parties commencing shortly after 11 December 2013 where that position has been propounded by the Viteks and resisted by Ms Taheri. 2At first I was disposed to place relatively high regard on a discretionary aspect of this application, namely, that the status quo established by the regime put in place by me on 11 December 2013, for better or worse, has prevailed now for in excess of five months and for all but a fortnight prior to the hearing of the appeal. On reflection, the likelihood is that an interlocutory regime will need to remain in place for a period of time after the hearing of the appeal and it would, in those circumstances, be wrong to place undue weight on the relatively small period of time remaining. In any event, for the reasons to which I am about to come, it is not necessary for me to do so. 3The orders made on 11 December 2013 in substance reflected an acceptance by me of what had been proffered on behalf of Ms Taheri as the price of a continued stay of execution upon the final judgment obtained by the Viteks which was challenged by Ms Taheri's appeal. Orders two and three on that date reflected (verbatim) undertakings proffered by Ms Taheri. Order four is what has given rise to the dispute between the parties and ultimately the motion which I have heard this afternoon. It is in these terms: "4. The applicant charges (subject to existing Incumbrances) the property contained in folio identifier XXXX (being the land known as XXX Crescent, Seaforth) with her liability to the respondents pursuant to the orders made by Bergen CJ in Equity and Rein J, the subject of the appeals." 4Counsel for the Viteks invites me to construe that order as reflecting either an agreement or, alternatively, an undertaking, to bring into existence a legal charge over the land at Seaforth, entitling his clients to the orders now sought. He points out matters to which I had regard in the reasons delivered by me last year; see [2013] NSWCA 438, namely the fact that the judgment was for a large amount and included findings of fraud; see [20]. The same reasons record (which accords with the recollection I disclosed during the hearing of the application) the opposition by counsel then appearing for the Viteks to the charge proffered by Ms Taheri; see [13]-[17]. That passage of my reasoning concludes with this paragraph: "Although the evidence is very slight, and its deficiencies are wholly attributable to Ms Taheri, it seems plausible that Ms Taheri lives in a multi-million dollar home in a harbourside suburb of Sydney which, if sold, could realise more than $2 million (quite possibly, substantially more). To date, there has been an undertaking not to sell, transfer, further encumber or otherwise deal with that property save on 28 days' written notice, and I have not been taken to any material to suggest that the Viteks did not regard that arrangement as an appropriate holding position pending their obtaining final orders. I regard the charge over that property which Ms Taheri proffers as the price of a stay as a substantial improvement in the position of the Viteks, even though I fully accept that it is not clear whether they have thereby become fully secured or merely under-secured creditors." 5It was not within my power on 11 December 2013 to extract from Ms Taheri as the price of the stay a legal charge over her property. Nor was it within my power to extract an undertaking from her. What occurred, which is quite common in applications of this nature both at first instance and on appeal, was the proffering of certain undertakings and/or security as the price of a stay. All of this is in aid of the basic premise that the role of the court in determining a stay pending an appeal is to achieve what is required by the interests of justice; see [4] of my earlier reasons. What was proffered by Ms Taheri last year is precisely what is recorded in paragraph 4 of the orders, which is in the form handed to me by her counsel, namely a charge then and there, necessarily therefore equitable, of specified property in respect of specified liability. There was no offer capable of acceptance, and certainly there was no acceptance by Mr and Mrs Vitek, or the lawyers then appearing for them of any offer; indeed they rejected that as the adequate price of a stay and urged me to decline to extend it. 6The question, as Mr Pritchard, who appears for Mr and Mrs Vitek today (but not on the earlier occasion), candidly acknowledged, is the proper construction of the order. That order does not involve the bringing into existence of a new security interest, distinct from the equitable charge proffered and accepted by the court on 11 December 2013, namely, a legal charge. There is nothing on the face of the order supportive of the charge being a legal charge as opposed to an equitable charge. If it were appropriate to have regard to the reasons accompanying that order, then it would be seen that the express references to the immediate ability of Mr and Mrs Vitek to lodge a caveat and their immediate change of status from unsecured creditors to secured creditors is wholly consistent with that. 7As I read the correspondence between the solicitors, Ms Taheri has consistently maintained that she is not required to do more than already has been done. With that I agree. 8That conclusion does not leave Mr and Mrs Vitek devoid of rights. As has emerged in the submissions exchanged in relation to this motion, it is common ground that they (a) have the right (not presently exercised so it appears) to lodge a caveat, and (b) to apply (in the event of a default) to the court for judicial sale, that being the standard remedy of an equitable chargee. Further, although not mentioned in the submissions made to me, it is possible (although the financial position of Ms Taheri is largely unexplored in the material before me) that the Viteks' status as secured creditors following what was proffered on 11 December 2013 may, in the event of Ms Taheri's bankruptcy, play a very significant part in improving their position. 9However, for the reasons that I have given, there is no basis in the terms of the order or in any "agreement" between the parties made on 11 December 2013, to alter the position that has obtained for the last five months. For those reasons I dismiss the Viteks' motion dated 8 May 2014. [Discussion as to indemnity costs] 10The motion is dismissed with costs.