New South Wales

Supreme Court

CITATION : Biseja Pty Ltd v NSI Group Pty Ltd [2007] NSWSC

283

HEARING DATE(S) : 30 January 2007

JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

EX TEMPORE JUDGMENT

DATE :

30 January 2007

DECISION : Order that recordings of writ be removed.

CATCHWORDS : PROCEDURE – stay of execution – where writs

recorded on land under Real Property Act – whether

recording should be removed – REAL PROPERTY –

Torrens Title – effect of recording a writ on title.

LEGISLATION CITED : (NSW) Building and Construction Industry Security of

Payment Act 1999

(NSW) Civil Procedure Act 2005 s 135(2)(b)

(NSW) Real Property Act 1900 s 105A(6)

PARTIES : Biseja Pty Ltd (plaintiff)

NSI Group Pty Ltd (defendant)

FILE NUMBER(S) : SC 2969/06

COUNSEL : Mr M S Willmott SC w Mr M W Sneddon (plaintiff)

Mr G A Moore w Mr F P Hicks (defendant)

SOLICITORS : L Capolupo & Co (plaintiff)

William Cotsis & Associates (defendant)

IN THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

BRERETON J

Tuesday 30 January 2007

2969/06 Biseja Pty Limited v NSI Group Pty Limited

JUDGMENT (ex tempore)

1 HIS HONOUR : On 7 December 2006, I ordered, by consent, in proceedings which

are currently part heard before me, that upon the first cross defendant Biseja and the

second cross defendant Mr Downie giving the usual undertaking as to damages, and

Biseja that day lodging certificates of title to two properties (being Folio Identifiers

101/SP76449 and 103/SP76449) with the Registrar, execution of a judgment entered

on 1 August 2006 in favour of the cross claimant NSI against Biseja in the sum of

$1,774,494, in accordance with an adjudication under the (NSW) Building and

Construction Industry Security of Payment Act 1999, be stayed until further order,

and I reserved liberty to apply to any party on three days notice. There were already

in court three other certificates of title to properties in the same development.

2 On the day that that consent order was made, but prior to it being made, NSI signed

applications for the recording on all remaining unencumbered titles in Strata Plan

76449 and Strata Plan 70843 – as well as on three further titles which had been

subject of a new mortgage – of a writ for levy of property which had issued in

execution of the judgment on 8 September 2006, and which it had already caused to

be registered, on 5 October 2006, on three lots - 79, 80 and 81 - in Strata Plan 76449.

When the consent order was made, Biseja was unaware at least of the registration or

intended registration of the writ on the additional titles on which it was registered on

7 December 2006.

3 Prior to 7 December 2006, Biseja had exchanged contracts for the sale of Lot 104 in

Strata Plan 76449 for a price of $275,000, albeit subject to a rebate for prompt

settlement. That sale settled on 24 November 2006. However, when the incoming

mortgagee, the ANZ Bank, came to lodge the transfer and mortgage for registration, it

discovered that the writ had been registered, which prevented registration of the

transfer and mortgage.

4 The effect of registration of a writ for levy of property on a title under the (NSW)

Real Property Act 1900 is two fold. First, it permits the Sheriff to sell the land under

This document has been supplied by the Adjudication Society (www.adjudication.org)

the writ and to give an effective transfer pursuant to the sale. Secondly, it has the

effect of preventing dealings with the land while the writ remains registered for a

period of three months from the date on which the writ is recorded on the title.

However, it ceases to have that effect after three months [ Real Property Act , s

105A(6)].

5 Biseja applies for an order, pursuant to (NSW) Civil Procedure Act 2005, s

135(2)(b), in aid of the stay granted on 7 December, requiring the Registrar-General

to cancel the recording of the writs. The fundamental basis of its application is that

the consent order of 7 December reflected an agreement of the parties that the two

titles referred to in the consent order, in respect of which the certificates of title were

lodged in the court that day, together with the three titles already lodged, would

secure the judgment debt in return for a stay of the proceedings. NSI disputes that the

agreement should be so construed, and submits that its proper construction is that the

five titles were accepted as security, in addition to what NSI had already done by way

of having the writs recorded on the titles.

6 I reject NSI’s submission in that respect for two reasons. First, if it were accepted,

in the context that the writ had been recorded in respect of the properties the titles for

which had been or were to be deposited in court, then the exercise of depositing titles

was a futility, since the recording of the writ prevented dealings with them in the

interim in any event. Secondly, it is clear on the evidence before me that Biseja was

quite unaware on 7 December that all its remaining unencumbered properties were

about to become the subject of recordings of the writ. It defies commonsense that

Biseja would agree to lodge two additional titles in return for a stay in circumstances

where it was imminently to be deprived of its ability to deal with its remaining

unencumbered titles. Accordingly, I accept Biseja’s construction of the agreement

encompassed in the consent orders of 7 December, namely that its effect was that NSI

accepted the five titles – three previously lodged and two lodged that day – as

security for the judgment, and in return for that security consented to a stay.

7 An additional reason for removing the recordings is that the purpose of recording a

writ is to permit execution to be levied, and not to obtain a de facto Mareva order

over all a judgment debtor’s real property. As execution has been stayed, the

recording of the writ is not serving a proper purpose. This view is much fortified by

the circumstance that as a result of Real Property Act , s 105A(6), there is no longer

any prohibition on the registration of dealings on the three titles in respect of which

the writ was recorded on 5 October 2006 – since three months from that date has

elapsed – and as from 7 March 2007 there will no longer be any prohibition on the

registration of dealings in respect of the other titles, since on that date three months

from the date of recording, 7 December 2006, will have elapsed; yet the stay of

execution will continue, at least until the further hearing of these proceedings, which

is not to resume until April 2007. In those circumstances, there is no utility in the writ

remaining recorded on title, and to give full effect to the stay the recordings should be

removed.

8 If, despite the five titles already deposited, there are legitimate fears about Biseja

entering into adverse dealings to the prejudice of its ability to satisfy the judgment

based on the adjudication certificate, then NSI’s remedy is to apply, if so advised, for

an asset preservation order.

9 I order, pursuant to Civil Procedure Act , s 135(2)(b), that the Registrar-General

cancel all recordings of writ number 14191/06 issued by this Court in proceedings

14191/2006 on 8 September 2006, including, without limiting the generality of the

foregoing, the recordings made pursuant to dealings: AC613948 in respect of Folio

Identifier 79/SP76449; AC613949 in respect of Folio Identifier 80/SP76449;

AC613950 in respect of Folio Identifier 81/SP76449 and AC794743 in respect of

Folio Identifier 104/SP76449.

10 I grant liberty to the parties to apply in the event of any difficulty arising in the

implementation of these orders.

11 I direct that these orders be entered forthwith.

12 I order that the cross claimant pay the cross defendant’s costs of the application.

13 I direct that the Exhibits AX16 and 17 be returned.