Champion Homes Sales Pty Ltd v JKAM Investments Pty Ltd; Hotray Pty Ltd v JKAM Investments Pty Ltd (JKAM Investments Pty Ltd v Karl Damien- First Cross Claim; Karl Damien v JKAM Investments Pty Ltd- Second Cross Claim) [2015] NSWSC 272

Supreme Court New South Wales

Medium Neutral Citation: Champion Homes Sales Pty Ltd v JKAM Investments Pty Ltd; Hotray Pty Ltd v JKAM Investments Pty Ltd (JKAM Investments Pty Ltd v Karl Damien- First Cross Claim; Karl Damien v JKAM Investments Pty Ltd- Second Cross Claim) [2015] NSWSC 272 Hearing dates: 11 and 12 March 2015 Date of orders: 20 March 2015 Decision date: 20 March 2015 Jurisdiction: Equity Division Before: Rein J Decision: See [36] Catchwords: Construction of Deed between cross claimant and cross defendant dealing with obligations in connection with a Contract for Sale and Head Lease - what amounts due - assigned debt - whether assignor of debt was established to be the creditor Legislation Cited: N/A Cases Cited: N/A Texts Cited: N/A Category: Principal judgment Parties: JKAM Investments Pty Ltd (cross claimant on first cross claim and defendant on second cross claim) Karl Damien (defendant on first cross claim and cross claimant on second cross claim) Representation: Counsel: G. McDonald (cross claimant on first cross claim and defendant on second cross claim) J. Cohen (defendant on first cross claim and cross claimant on second cross claim

Solicitors: JK Solicitors (cross claimant on first cross claim and defendant on second cross claim) Cambridge Lawyers (defendant on first cross claim and cross claimant on second cross claim) File Number(s): 2014/21077 and 2014/22761 Publication restriction: nil

Judgment

Background 1. These proceedings concern a property at Ironbark Avenue, Camden ("the Property") owned by Mr Karl Damien ("Damien"). A number of different parties claimed interests in the Property and the disputes between those different entities as to which had priority over the other was heard and determined by Darke J (see [2014] NSWSC 952). His Honour split off for separate determination a cross claim brought by one of the caveators JKAM Pty Ltd ("JKAM") and a cross claim brought by Damien against JKAM. 2. The other caveators were Champion Homes Sales Pty Ltd ("Champion") and Hotray Pty Ltd ("Hotray") and Darke J held that Champion had first priority Hotray the second priority and JKAM the third priority. 3. There was at all relevant times registered on the Property a mortgage to secure a debt given by Damien to the National Australian Bank ("NAB"). The NAB was not joined to these proceedings. There have been separate proceedings on foot brought by NAB against Damien and JKAM (as caveator) and in August last year NAB obtained, in separate judgment against Damien in the amount of $1.8 million approximately and obtained an order for possession of the Property and leave to issue a writ of possession. NAB's claims against JKAM in respect of the caveat were stood over until 13 March 2015. JKAM's caveat presents an obstacle to NAB proceeding to sell the property which it wishes to do, it being owed approximately $2.32 million and holding concerns about the true worth of the property. 4. Mr G. McDonald of counsel appears for JKAM and Mr J. Cohen of counsel for Damien. 5. On 11 March 2015 when the matter was called on Mr Bedrossian of counsel advised the Court of the fact that his client NAB has never been joined in the proceedings and had written to the solicitors for Damien and JKAM enquiring whether consideration had been given to NAB being joined. 6. When NAB's matter was listed on Friday 13 March there was agreement as between NAB and JKAM resolving the dispute between JKAM and NAB. 7. There are, it was agreed, three key documents recording the arrangements between JKAM and Damien: 1. A Contract for Sale of Land dated 21 December 2012 with Damien as vendor and JKAM as purchaser ("the Contract for Sale") 2. A Deed of 10 December 2012 between JKAM and Damien ("the Deed") 3. A Lease (described as a "Head Lease") of the Property dated September 2012 with JKAM as lesee and Damien as lessor ("the Head Lease") There was also a mortgage dated 21 December 2012 which was not in evidence and on the terms of which neither JKAM nor Damien relied.