Abram, Joseph v Bank of New Zealand

[1995] FCA 862

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No. NG 622 of 1995
  )
GENERAL DIVISION                 )

BETWEEN:JOSEPH ABRAM

First Appellant

JANETTE DAWN ABRAM

Second Appellant

AND:BANK OF NEW ZEALAND and ANOTHER

First Respondent

MICHAEL J FITZPATRICK

Second Respondent

JUDGE MAKING ORDERS:    FOSTER J

DATE:     26 SEPTEMBER, 1995

PLACE:    SYDNEY

MINUTE OF ORDERS

THE COURT ORDERS THAT:

1.The Notice of Motion be dismissed.

THE COURT DIRECTS THAT:

2.The Writ of Possession not be enforced until 17 October 1995.

THE COURT FURTHER ORDERS THAT:

3.The Appellants pay the First Respondent's costs of the Notice of Motion.

Note:  Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No. NG 622 of 1995
  )
GENERAL DIVISION                 )

BETWEEN:JOSEPH ABRAM

First Appellant

JANETTE DAWN ABRAM

Second Appellant

AND:BANK OF NEW ZEALAND and ANOTHER

First Respondent

MICHAEL J FITZPATRICK

Second Respondent

CORAM:    FOSTER J

DATE:     26 SEPTEMBER, 1995

PLACE:    SYDNEY

REASONS FOR JUDGMENT
  (Extempore)

HIS HONOUR:   By this notice of motion, filed on 5 September 1995, the appellants, Joseph Abram and Janette Dawn Abram, seek to stay until the determination of their appeal, orders made by Moore J on 11 August 1995.  By those orders, his Honour granted to the first respondent possession of the premises situated at 10 Lexington Avenue, St Clair.  These premises are the appellants' family home in which they and their four children reside.  It is subject to a mortgage in
favour of the first respondent which wishes to exercise its power of sale under that mortgage. 

His Honour's orders were made after a lengthy hearing in which the appellants sought to impugn the mortgage on a number of grounds. It was alleged that in the obtaining of the mortgage the first respondent, mainly through its agent, the second respondent, had committed breaches of ss 51AB, 52, 53, 55A and 60 of the Trade Practices Act 1974 (Cth). Damages and other relief were sought under ss 82 and 87 of that Act, in respect of the alleged breaches. Damages were also sought in respect of claims for negligence, breach of contract, breach of fiduciary duty and breach of s 57 of the Real Property Act 1900 (NSW). Other relief was sought under the Contracts Review Act 1980 (NSW). All these claims were disputed.

The first respondent cross-claimed (inter alia) for an order for possession of the premises pursuant to the mortgage and ss 57, 58 and 60 of the Real Property Act 1900 (NSW). The appellants failed in their action and the first respondent succeeded on the cross-claim.

In their appeal, the appellants seek to argue numerous matters which, they assert, should result in the reversal of his Honour's findings.  The appellants have taken steps in relation to the appeal, the nature of which are not entirely clear from the evidence.  However, I am prepared to accept that they wish to prosecute the appeal and are currently involved in the settlement of the index to the appeal book.  They have been, and still are, unrepresented litigants. 

The stay sought by the appellants is opposed by the first respondent.  The second respondent offers no opposition.  The first respondent submits that the stay should not be granted because:

(a) the appeal has no reasonable prospect of success;

(b) the amount secured by the mortgage, including the costs of this litigation and other litigation which have been added to the principal sum, now substantially exceeds what might reasonably be realised on the sale of the property;

(c) no payments have been made in respect of the appellant's indebtedness since June 1992; and

(d) the property is at significant risk because it is uninsured.

In relation to (a), I have read what I would respectfully describe as the careful and comprehensive reasons for judgment of Moore J.  It is to be noted that, in certain respects, adverse findings are made as to the credibility of the appellants, a factor which will necessarily present difficulties for them in the appeal.  However, his Honour made certain findings favourable to them in respect of the explanation to them of the mortgage and of the obligations incurred under it.  This is not, of course, the occasion to enter upon a definitive consideration of the merits of the appeal.  I am not prepared to find that it has no prospects of success, but I would, nevertheless, rate these prospects as fairly slight.

In relation to (b) and (c), it is clear that if the first respondent is successful on the appeal, the amount of the debt owed to it will far exceed the value of the property.  Even if the appellants obtain relief in respect of the mortgage, they will necessarily remain indebted to the first respondent in respect of the amount borrowed.  The first appellant says that this amount, after appropriate deductions, should reduce to $95,000, an amount that could be repaid by "re-financing" the house.  Nothing has been put before me to indicate how this figure has been computed or what the real prospects of such re-financing are.  It would appear that, irrespective of whether the bank retains security over the house, it will be able to register a substantial judgment debt against it and have it sold under ordinary court processes.

In relation to (d), the first respondent has placed before me evidence of efforts to obtain insurance, all of which have been unsuccessful because the insurers who have been approached are unwilling to accept the risk in the present circumstances.  I am satisfied that the first respondent will not be able to effect insurance unless it obtains possession.  The first appellant claims that he assumed that the first respondent had effected insurance and consequently took no steps to do so himself.  When apprised of the situation that the house was uninsured, the first appellant contacted the Government Insurance Office by telephone on 13 September 1995.  In his affidavit in support of this application, filed on 21 September 1995, he says:

"In the afternoon of September 13, 1995, I telephoned the GIO and spoke to a consultant whose name I do not recall, I explained that the BNZ had an order for possession on appeal and that I wished to insure the premises, I was given a quote on the phone of $444 to insure the building (not the contents) for $430,000, I was told the quote was higher than normal because of the higher risk associated with possession, and I was informed that a proposal form would be sent to me in the mail and that I should complete this and return it to the GIO and they would then consider issuing a policy."

He further says that on 19 September he received a letter from the GIO together with two booklets and a single page brochure.  Copies of the letter, the colour pages of the booklets and the brochure are annexed to the affidavit.  The letter refers to his previous inquiry.  The brochure and booklets appear to be in standard form.  He says that on 20 September he completed the proposal and on 21 September he mailed it back to the GIO.  There has been no response from the GIO in relation to the proposal.  There is nothing before me to indicate precisely what insurance cover he sought in the proposal and, in particular, whether the proposal referred to the risk factor discussed on the telephone.  Nor is there anything to indicate whether the appellants are willing or able to pay an increased premium for the insurance.  Whatever the situation, it is clear that the building is currently
uninsured and is likely to remain so for some indefinite period unless it is in possession of the first respondent.

Furthermore, if the appellants ultimately achieve success in whole or in part in their appeal, the Court will have power to grant relief to them by way of an appropriate award of damages.  Taking all these matters into consideration, I have reached the conclusion that the overall justice of this case requires that I dismiss this motion.  I so order.

I consider, however, that I should direct that the writ of possession previously ordered by Moore J be not enforced until 17 October 1995.  I further order the appellants to pay the first respondent's costs of this motion.

I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment herein of the Honourable Justice M. L. Foster.

Associate:

Date:   26 SEPTEMBER 1995

A P P E A R A N C E S

THE APPELLANTS APPEARED IN PERSON

COUNSEL FOR THE FIRST RESPONDENT: D. COWLING

INSTRUCTED BY:                   CLAYTON UTZ

DATE OF HEARING:   26 SEPTEMBER 1995

DATE OF JUDGMENT:  26 SEPTEMBER 1995