Child v Commonwealth Development Bank of Australia Ltd

[2000] NSWCA 367

NEW SOUTH WALES COURT OF APPEAL

CITATION:         Child v Commonwealth Development Bank of Australia Ltd [2000]  NSWCA 367

FILE NUMBER(S):
40371/99

HEARING DATE(S):          27/11/00, 4/12/00, 11/12/00

JUDGMENT DATE:           15/12/2000

PARTIES:
James David Child   v   Commonwealth Development Bank of Australia Limited

JUDGMENT OF: Priestley JA     

LOWER COURT JURISDICTION:    Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S):               CLD 1347/96

LOWER COURT JUDICIAL OFFICER:          Adams J

COUNSEL:
Claimant - S. Webster
Opponent - J. Bartrop

SOLICITORS:
Claimant - Webster O'Halloran & Associates
Opponent - Abbott Tout

CATCHWORDS:

LEGISLATION CITED:

DECISION:
Application allowed - see par 14 of judgment.

JUDGMENT:

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA         40371/99

PRIESTLEY JA

Friday, 15 December 2000

CHILD   v   COMMONWEALTH

DEVELOPMENT BANK OF AUSTRALIA LIMITED

1. PRIESTLEY JA:  This application for a stay of execution of judgment, has come about in the following circumstances.

2. Mr Child, who seeks the stay, mortgaged two grazing properties to the Commonwealth Development Bank of Australia Limited (the Bank) in 1985. These properties were known as “Bennetts” and “Sneaths”. They are in the Grafton area. Mr Child fell into default under the mortgages and the Bank took proceedings to obtain possession of them before exercising its power of sale. Mr Child resisted the proceedings, filing a defence and a cross-claim in which central allegations were that he had intended and believed that he was mortgaging not “Bennetts” and “Sneaths” but “Bennetts” and another property called “Ewandon”. His defence and cross-claim failed before both Adams J at first instance and in the Court of Appeal.

3. The Court of Appeal judgment was delivered on 29 September 2000. On 26 October 2000 an application for special leave to appeal to the High Court was filed and served by Mr Child’s solicitor, whose office is in Sydney. Mr Child is a grazier who is sometimes difficult to communicate with. He had been served with a bankruptcy notice on 24 October 2000. On 27 October 2000 he was served with notices to vacate “Bennetts” and “Sneaths”. Requests from his solicitor to the solicitors for the Bank for the Bank to hold its hand pending the hearing of the special leave application in the High Court were refused. On 7 November 2000 a notice of motion for a stay was filed on behalf of Mr Child, which came on for hearing before me on 27 November 2000. I requested further information before making a decision on the application. Further information has been supplied.

4. The position as it now stands is that the Sheriff has taken possession of “Bennetts” and “Sneaths” and the Bank has instructed estate agents at Grafton to act as the Bank’s agent to sell the two properties. There will be a minimum four weeks advertising period before the sale which would be by auction in “early to mid February 2001”.

5. The Bank has filed a petition for the sequestration of Mr Child’s estate in the Federal Court, which is listed for hearing on 5 February 2001. Enquiry made by the Bank’s solicitors of the Deputy Registrar of the High Court by letter dated 27 November 2000 produced the information that the earliest date the application for special leave to appeal would be listed for hearing would be in June 2001. Following receipt of that information a summons was filed in the High Court on Mr Child’s behalf applying for expedition of the hearing of his application for special leave to appeal. That summons is listed for hearing on 16 February 2001.

6. It is apparent from the proceedings in this matter so far that “Sneaths” has special value for Mr Child. The evidence also shows that it is probable that the totality of Mr Child’s assets will enable him to pay the Bank’s debt in full.

7. The application for the stay was opposed. It was submitted that there was little prospect of Mr Child succeeding in getting special leave to appeal. It was also submitted that the fact that execution of the writs of possession had been completed was a strong discretionary factor against granting a stay.

8. I acknowledge the force of both of these submissions. However, if the sale of the properties is completed before the application for special leave is determined the essential subject matter of the proceedings, from Mr Child’s point of view, will be destroyed. Further, if the auction sales were to take place while the proceedings in the High Court were pending, the prices the properties would fetch could very well be adversely affected.

9. Although Mr Child’s prospects of success in the High Court proceedings may not be strong, I do not think that his application for special leave can be described as vexatious. In the circumstances, the balance of convenience between the parties seems to me strongly to support the granting of a stay, at least until 16 February 2001. What should happen from that date onwards will be affected by what happens on that day. The High Court should then be in a better position than this court to decide whether the stay should continue or not.

10. The orders currently in force are those made by Adams J on 4 May 1999 and entered 17 February 2000.

11. By leave granted on 27 November 2000 an amended notice of motion seeking various stay orders was filed on behalf of Mr Child in substitution for the original notice of motion. The orders sought in the amended notice of motion were as follows:

    1.A stay of execution of the judgment of his Honour Justice Adams entered 17 February 2000, until further order.

    2.A stay of execution of all proceedings under the judgment of his Honour Justice Adams entered 17 February 2000, until further order.

    3.The plaintiff be restrained from exercising its power of sale as mortgagee in respect of the mortgages and properties referred to in the schedule hereto, until further order.

    4.The plaintiff be restrained from taking further steps and incurring expense preparatory to the exercise of its power of sale referred to in order 3, until further order.

    5.The plaintiff return to the defendant possession of the properties referred to in the schedule hereto, until further order.

    6.            Liberty to apply on seven days’ notice.

    7.            Further or other orders.

12. Subject to variations necessary because some steps in furtherance of execution have already been taken under Adams J’s judgment I am prepared to grant the first three orders sought. I do not think I should make order 4. If the Bank wishes to incur expense in preparing for sale by auction, in the expectation of eventual success in the High Court, I think it should be left free to do so at its own risk.

13. I do not think I should make order 5. In view of the evidence about the state of the properties, I think that if Mr Child wishes to do any work on them between now and 16 February 2001, that should be left to be done by arrangement between him and the Bank. In case any real problem arises in this respect I reserve liberty to apply on seven days’ notice, as sought in order 6.

14. I therefore make the following orders:

    1.Stay of any further execution of the judgment of Adams J entered 17 February 2000 until 16 February 2001.

    2.The stay of any further execution of all proceedings under the judgment of  Adams J entered 17 February 2000 until 16 February 2001.

    3.The plaintiff be restrained from exercising its power of sale as mortgagee in respect of “Bennetts” and “Sneaths” as described in the schedule to the amended notice of motion, until 16 February 2001.

    4.Liberty to apply on seven days’  notice.

    5.Costs of this application are to be borne:

    (a)in the event that Mr Child’s application for special leave is refused, by Mr Child, as part of the Bank’s costs of the appeal to this court;

    (b)in the event that Mr Child’s application for special leave is granted, in accordance with the costs orders made by the High Court upon its disposition of the appeal to that court.

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LAST UPDATED:              18/12/2000