The Trust Company (PTAL) Limited v Penna [2019] NSWSC 1809

Supreme Court New South Wales

Medium Neutral Citation: The Trust Company (PTAL) Limited v Penna [2019] NSWSC 1809 Hearing dates: 11 and 13 December 2019 Date of orders: 13 December 2019 Decision date: 13 December 2019 Jurisdiction: Common Law Before: Lonergan J Decision: (1) The orders sought by the first defendant articulated in paragraph 7 of this judgment are refused.

(2) Unless the notice of motion signed by the solicitor for the first defendant is provided to my chambers by email by 5:00pm on Tuesday, 17 December 2019, the first defendant is to file a notice of motion in the registry seeking the orders she had sought orally in Court to regularize the Court file, by midday Friday, 20 December 2019. Catchwords: REAL PROPERTY – possession of land – application for stay of eviction – application not granted Category: Principal judgment Parties: The Trust Company (PTAL) Limited (Plaintiff) Giulia Penna (Defendant) Representation: Counsel: M W Young SC (Plaintiff)

Solicitors: Summer Lawyers (Plaintiff) Nicholas Vasta (Defendant) File Number(s): 2019/100619 Publication restriction: Nil

Ex tempore Judgment 1. On 11 December 2019 at 4.30pm I was approached as Duty Judge to consider an application by the first defendant for a stay of an eviction that was due to take place at 9am the following morning at 13 Cove Street, Haberfield. 2. No notice of motion had been filed and the first defendant arrived in my Court without a solicitor, although she had it seems from the affidavit material had one acting on her behalf in both these proceedings and ongoing negotiations with the plaintiff up to as recently as a week or two ago. It was evident that the plaintiff's solicitor had not been notified of the intention to approach the Court at 4.30pm that day until it seems about an hour beforehand. 3. The affidavit of the first defendant dated 11 December 2019 annexed a number of documents and provided a history of enforcement proceedings that had led to default judgment being entered earlier this year. 4. I formed the impression from the documents that I was not being provided with a complete picture of the circumstances as they currently were between the defendants and the plaintiff. I formed the impression that the material provided was selective in its account. 5. This has since proven to be a correct impression. 6. Given the lateness in the day and the lack of clarity and the need in my view for the plaintiff to be represented on the application, I granted a very short stay of the eviction ordered until midday Monday 16 December 2019. In addition I made orders regarding service of material and I listed the matter to return before me today Friday 13 December 2019. 7. Today a Mr Vasta appears for the first defendant, despite the first defendant having informed me on 11 December 2019 that Mr Vasta and indeed any solicitor from the firm at which Mr Vasta works, were unavailable this week. Mr Vasta orally made application, without any notice of motion being filed, for the following two orders: 1. That the settlement that was due to take place on 26 November 2019 be allowed to take place and that the financial company who rejected the settlement and stopped it from proceeding minutes before settlement are not allowed to do that and that we are allowed to continue with the agreement that was made and that should have taken place on 26 November 2019. 2. A stay of eviction from 13 Cove Street, Haberfield for a period of three weeks. 1. In support of these orders, two affidavits of the first defendant were relied upon. The first was the lengthy affidavit I had granted leave to file in Court on 11 December 2019. The second was a further affidavit of the first defendant sworn 12 December 2019. 2. Senior counsel appearing for the plaintiff, Mr Young SC tendered two affidavits. I granted leave for those to be filed in Court given the very short timeframe within which the plaintiff was required to respond. Those affidavits are by two solicitors, Stephanie Jin sworn 12 December 2019 and Samantha Parsons sworn 12 December 2019. 3. It appears from her affidavit that Ms Jin had the conduct of negotiations and proceedings on behalf of the plaintiff. She is a solicitor employed by Summer Lawyers. 4. Ms Parsons is also a solicitor in the employ of Summer Lawyers. In her affidavit she has made it clear that her involvement is limited to having been retained in respect of a loan advance to be made by TNAL036 Pty Ltd and TC Security 001 Pty Ltd and that her retainer was limited to acting on behalf of those companies in relation to a proposed loan to NapSic Pty Ltd. The relevance of that loan will become clear shortly. 5. The background to the application is that in 2017, a loan of $3,000,000 was secured on two properties in Haberfield, 11 Yasmar Street and 13 Cove Street. I have been informed by Mr Vasta in submissions to the Court today that the nature of that loan was a "Low Doc" loan, which he explained to be a loan that, whilst it required repayments, was centred around an accountant certification about the capability of repayment of the persons or companies having taken out the loan. It had a high interest rate of 9.95%. 6. In January this year, it is common ground that there were problems making repayments on the loan and the repayments ceased. 7. I have been informed from the bar table and do not have complete clarity as to the date but accept that there was a request by the plaintiff for payment followed by advice that the property would be sold if payment was not made. 8. On 1 April 2019 a statement of claim was filed in this Court, seeking judgment for the plaintiff for possession of both properties as well leave to issue a writ of possession. 9. No defence was filed, and a notice of motion for default judgment on the claim for possession of land was filed in May 2019. 10. The writ of possession was executed on 23 August. On 4 October this Court ordered a stay of the writ of possession for a short period to 11 October. 11. There was a subsequent notice of motion filed for a stay of the writ of possession which was granted. 12. There was then a period of what seemed to be genuine negotiation attempts between the parties and the creation of a forbearance deed termed Deed of Release ("the Deed") dated 4 November 2019. 13. The Deed, amongst other provisions, specifies in the schedule a number of relevant matters. One is that the borrower was a company, CCC666 Pty Ltd, in liquidation, and the guarantors were Carmelo Dox, Giulia Penna, and Assuntina Laura Sabbarese. The schedule refers to two registered mortgages, a memorandum of mortgage, a loan agreement, a deed of guarantee, and miscellaneous borrower and guarantor documents in connection with those documents as "the security documents". The properties secured or identified as 11 Yasmar Street and 13 Cove Street, Haberfield, and the secured moneys are identified as $3,221,609.50 as at 30 September 2019, excluding enforcement, legal settlement and other costs. 14. There is then reference to a "settlement amount" as follows: 1. All net sale proceeds from the sale of the Yasmar land; and 2. All net proceeds from the refinance by TNAL036 Pty Ltd of the Cove land. 1. It common ground that at that point there had been negotiation with the company mentioned to refinance the Cove Street property, and there was pursuit of arrangements for settlement. In this context an email dated 20 November 2019 from Paul Reese at Summer Lawyers to Mr Vasta set out what Mr Vasta says was an agreement, although on my interpretation it was an offer of settlement, stating that Mr Reese was instructed that his client would accept: 1. All net proceeds from the sale of 11 Yasmar Street; 2. All net proceeds understood to be an amount of $1,292,000 from the refinance by TNAL036, in full satisfaction of all amounts owing to the mortgagee and conditional upon all parties executing a mutual deed of release and conditional upon settlement taking place by not later than Friday, 22 November 2019. 1. That email also mentions that "Your clients will also be required to immediately hand over withdrawals of the Yasmar land immediately. Of course, the caveat over the Cove land will need to be provided to the incoming mortgagee in order to facilitate the refinance. This is our client's counter offer and is their final offer." 2. I understand that paragraph to be a reference to withdrawals of caveat that had been lodged on behalf of one or some of the defendants as perceived necessary to protect the position of the defendants in respect of those properties. 3. It seems that a short extension was agreed between the parties as to settlement taking place. Although the sale of the Yasmar Street property went through and the proceeds were provided to the plaintiff back in October 2019, the Cove Street refinancing did not go through. 4. Mr Vasta submitted that it is his client's perception that there was some interference on the part of the plaintiff in the finance company identified going through with the refinance of the Cove Street property as discussed. 5. Affidavit material served on behalf of the plaintiff however indicates that what in fact occurred was that, in the process of due diligence being conducted on behalf of the finance companies, TNAL036 Pty Ltd and TC Security, the solicitor with the carriage of that advance file, found out that one of the guarantors, the first defendant, and the applicant seeking the orders before me today, had been permanently banned from ASIC from engaging in credit activities and also from providing financial services, and that this ban took place following an investigation by ASIC into her conduct as an agent of an Australian credit licensee. 6. The ASIC notification also recorded that ASIC had found that Ms Penna knowingly submitted false documents for a number of clients who were seeking motor vehicle finance, and had a history of conviction for fraud, and this was also the basis of her banning. 7. The ASIC notification recorded that Ms Penna has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision. I had no evidence before me about any such appeal having been lodged or pursued. 8. The ASIC notification is attached to Ms Parsons' affidavit. In addition to the matters I have just referred to, it also referred to the following matters as "background": "…Ms Penna was convicted on 2 July 2010 in the Local Court of New South Wales at Burwood on various fraud offences related to making false statements to obtain money. Between June 2012 and September 2012, Ms Penna, trading as CFG Financial Services, provided assistance to consumers to obtain motor vehicle finance and financial services relating to vehicle and equipment warranties". 1. Negotiations continued between the plaintiff's and the defendants' solicitors, including an allowance for a further period up to 11 December for the defendants to obtain refinance from an alternative company, given that the other refinance had fallen through. 2. The correspondence indicates that the plaintiff, as is their right and given that the deed or forbearance deed of settlement had not been complied with by the necessary time frame, nor within the short extension that was provided, reverted to the requirement that the full sum due, as well as costs and disbursements incurred, needed to be paid. 3. This has not happened to date.