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Payment Arrangements and Deeds in Debt Collection

Monday, March 01, 2010 - Posted by Philip Harvey

An interesting Supreme Court case where a Creditor was able to successfully use a deed to enforce a debt.

Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296 (8 October 2009). The full case can be read here.

Background Information to the Case

Mr Waterhouse as a licensed bookmaker accepted a number of bets from Mirzikinian on Credit. These bets run up to $250,000 over a one and a half month period.

At the conclusion of this betting period, negotiations took place between the parties to settle the debt. During this negotiating period, Mirzikinian did not dispute that he owed the money. Mirzikinian was seeking an extension of time to pay the debts back.

5 - 6 months later on 27th March 2007 the debt was still outstanding with no payments being made. At this time discussions took place;

Louise said: "As you know I have discussed your situation with Bill and he said he wouldn't consider any proposal for repayment until he has something in writing, so we have prepared a document for you to sign so we can show him".

Mirzikinian: "Ok that sounds fair enough".

Robert said: "He likes doing things the proper way.”

At the conclusion of this - an Unsigned Deed was handed to Mirzikinian - which was signed by Mirzikinian and handed back to Robert & Louise. The deed allowed for full payment by 1st of September 2007 and applied for interest penalties that were backdated after this date if payment was not made & charges for all his property in favour of Bill & Tom Waterhouse Pty Ltd.

The deed that was signed by Mirzikinian was not immediately witnessed or signed by other party (Robert or Louise). Rather Louise advised - “We will show this to Bill and let you know if it is acceptable to him and we will get back to you"

On 20th August 2007 (5 months after receiving the signed deed) Louise and Mirzikinian had a further conversation where Mirzikinian advised he had not heard back about the proposal (Deed). Louise response was; "Sorry I thought it was obvious that’s why we have left you alone for so long".

The debt remained unpaid as at the 1st of September 2007 (the date contained in the Deed) and Tom & Bill Waterhouse Pty Ltd  then lodged a Statement of Claim for the $250,000.

Mirzikinian and his lawyers attempted to argue that the Deed was not valid on the basis of Louise's comments about showing Bill & getting back to him. They argued that the Deed was not effective as Mirzikinian had not been informed that Bill had signed it. 

Key Decisions:
  • The Deed was legally binding on Mirzikinian as soon as he signed it
  • The $250,000 paid by the appellant into Court as security for the judgment debt be paid to the respondent
  • Entitlement to interest on $250,000 to be decided in the District Court

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