Corby v Bendigo and Adelaide Bank Limited
[2019] ACTSC 3
•11 January 2019
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Corby v Bendigo and Adelaide Bank Limited |
Citation: | [2019] ACTSC 3 |
Hearing Dates: | 8, 11 January 2019 |
DecisionDate: | 11 January 2019 |
ReasonsDate: | 7 February 2019 |
Before: | McWilliam AsJ |
Decision: | See [57] |
Catchwords: | PRACTICE & PROCEDURE – applications – application seeking stay of enforcement proceedings – where applicant has established prospect of forthcoming payment and hardship but evidence is insufficient to consider extended stay or instalment order – interim stay ordered |
Legislation Cited: | Court Procedures Rules 2006 (ACT), rr 2013, 2051 |
Cases Cited: | Foong v Commonwealth Bank of Australia [2014] NSWCA 246 GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889 Taouk v El Khoury (No 2) [2016] ACTSC 113 |
Parties: | Ms D Corby (Applicant) Bendigo and Adelaide Bank Limited (Respondent) |
Representation: | Counsel Self-represented (Applicant) Mr A Nicolaidis (Respondent) |
| Solicitors Self-represented (Applicant) Baker Deane & Nutt as agent for Collection Law Partners (Respondent) | |
File Number: | SC 481 of 2016 |
McWilliam AsJ
On 11 January 2019, I granted an interim stay (until 29 March 2019), of an enforcement order for the possession of land against Ms Corby, the applicant on the present application and one of two enforcement debtors in the substantive proceedings.
The respondent is Bendigo and Adelaide Bank Limited (bank), the mortgagee in respect of a residential property in Wanniassa, which is the subject of the enforcement order and where Ms Corby resides with her three children. Ms Corby and her ex-partner, the other enforcement debtor, who is an undischarged bankrupt, currently owe the bank in excess of $40,000 in arrears for mortgage repayments, in addition to the principal amount. The statement of claim initially filed by the bank in October 2016 claimed that the total debt owed at the time the proceedings were commenced was $350,202.64. Interest has been accruing since that time.
Absent the order made, Ms Corby and her three children were to be evicted on 17 January 2019. Due to the urgency of the matter before me as duty judge and that the application concluded on 11 January 2019, I delivered the substance of my reasons ex-tempore but indicated to the parties that full written reasons would follow. These are the full written reasons.
Nature of the application
The primary relief sought by the applicant, who was self-represented, was an order setting aside the enforcement order that had been issued on 15 November 2018.
The applicant further requested the respondent to provide a letter regarding hardship to her superannuation fund in order to enable her to access part of her superannuation, so as to pay a lump sum of the debt as soon as possible. Another aspect of the relief sought was for ‘the medically authorised time to return to work fulltime and provide 3 months minimum of hardship arrangements’.
At the hearing, and with the assistance of Mr Nicolaidis who appeared on behalf of the bank, the relief was clarified as seeking an order staying the enforcement order pursuant to r 2013 of the Court Procedures Rules 2006 (ACT) (Rules) with a view to ultimately setting aside the enforcement order pursuant to r 2051 of the Rules.
The Court’s power to grant a stay
Rules 2013 and 2051 are relevantly in the following terms:
2013 Enforcement—stay
(1) On application by the enforcement debtor or other person liable to comply with an enforceable money order or non-money order of the court or by someone else affected by the order, the court may—
(a) by order, stay the enforcement of all or part of the order, including because of facts arising or discovered after the order was made; and
(b) make the orders it considers appropriate, including, for a money order, an instalment order.
…
(2) The application may be made whether or not an enforcement order has already been made for the enforceable money order or non-money order.
(3) The application must be accompanied by an affidavit in support of the application.
(4) Unless the court otherwise orders, the filing of the application does not stay the operation of the order.
…
2051 Enforcement orders—application to set aside
(1) This rule applies if an enforcement order is made for an enforceable money order or non-money order (the original order) of the court.
(2) On application by the enforcement debtor …, the court may—
(a) set the enforcement order aside; and
(b) make the orders it considers appropriate, including, for an enforceable money order, an instalment order.
…
(3) Unless the court otherwise orders, the filing of the application does not stay the operation of the enforcement order.
The Court may also grant a stay in the exercise of its inherent jurisdiction: Taouk v El Khoury (No 2) [2016] ACTSC 113 (Taouk) at [22] per Murrell CJ.
Applicable principles
It can be seen from the words of r 2013 of the Rules that the Court is afforded a general, broad and non-prescriptive discretion: Permanent Custodians Ltd v Bunn [2008] ACTSC 21 at [4].
10. The starting point, however, is that a judgment creditor is entitled to have a judgment enforced without delay: State Bank of Victoria v Parry [1989] WAR 240 at 244, cited in Taouk at [22].
11. The Court must look at all the circumstances of the case: Joskovitz v Bonnick [1964] VR 654 at 659. Although the relevant considerations may change depending on the facts of each case, some assistance is to be derived from GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889 (GE Personal Finance). In that decision, Johnson J (at [12]-[13]) set out factors relevant to a stay of a writ of possession in NSW, which are comparable to an order for possession and delivery of land in this jurisdiction.
12. They include any delay in taking action to prevent the execution of the enforcement order, the explanation for any delay, and the existence of a proper basis for the stay.
13. Examples where a proper basis for the stay might exist include (but are not limited to) where the loan giving rise to the enforcement order is to be refinanced or otherwise paid; where the subject property is to be sold; or where the proceedings are to be defended. It is relevant to consider the nature of any facts arising or discovered after the order was made.
14. Circumstances of hardship may weigh in favour of granting a stay where the applicant indicates their intention to refinance the loan and demonstrates by evidence steps undertaken to refinance the loan: Foong v Commonwealth Bank of Australia [2014] NSWCA 246 at [13]. However, in circumstances where the vacation of the premises is inevitable (such as where there is no reasonable prospect for the loan to be repaid or refinanced), hardship alone is unlikely to suffice to grant an extended stay: GE Personal Finance at [23].
Evidence before the Court
15. Ms Corby made extensive submissions from the bar table intermingled with her evidence. Given that she was self-represented, the application was urgent, and Ms Corby had been able to obtain some corroborative documentary evidence, the bank properly did not take issue with the form in which the material was presented to the Court.
16. The Court was aided by the bundle of documents prepared by Mr Nikolaidis on behalf of the bank for the purposes of the application. Mr Nikolaidis also gave considerable assistance to the Court in terms of relevant legal principles and discretionary factors. His professionalism throughout the urgent hearing in dealing with documents and evidence in a manner that enabled the Court to deal with the issues genuinely in dispute should be noted.
The circumstances of this case
Delay
17. Ms Corby and her ex-partner are the registered proprietors of the subject property as joint tenants. They have been in default of their mortgage repayments since 2016. The bank commenced proceedings in October 2016 and, following the failure to file any defence or notice of intention to respond, obtained default judgment against each of Mr and Ms Corby in June 2017.
18. The bank applied for an enforcement order on 20 April 2018 and those proceedings were previously stayed by the Registrar of this Court until 31 August 2018.
19. In the months that followed, Ms Corby attempted to negotiate with the bank by offering to enter into payment plans, none of which were satisfactory to the bank and ultimately on 19 October 2018, it applied for an order for the delivery of possession of land. The enforcement order the subject of the present application was made on 15 November 2018, and served on Ms Corby on 20 November 2018.
20. On 21 December 2018, Ms Corby made the present application. For reasons not entirely clear to the Court, and perhaps because the applicant was self-represented and did not know to request an urgent approach to the duty judge, the matter was treated as a standard application and was not listed for hearing until 8 January 2019. An adjournment until 11 January 2019 was then required to enable the applicant to address the issues raised by the Court by filing further evidence.
21. The above background illustrates that there has been substantial delay in the bank being able to enforce a judgment which it has lawfully obtained. Ms Corby has also had the benefit of a previous stay, which must be taken into account in the bank’s favour.
22. However, this is not a case where Ms Corby sat on her hands until faced with an eviction notice. Ms Corby was unaware of any default in the mortgage and the court proceeding because Mr Corby hid all legal and financial correspondences from her, conduct which she says was related to the issues of family violence. The Court record discloses that the default judgment was obtained on the basis of affidavits of service where the documents were simply left at the address of the subject property, rather than personally served on Ms Corby.
23. Nevertheless, she has now appeared on a number of occasions since the default judgment was obtained and does not appear to have sought to set aside the default judgment. Apart from the failure to file a defence, which led to the default judgment being obtained, Ms Corby has been actively communicating with the bank and engaging with the Court processes in attempting to resolve the outstanding debt.
24. Part of the explanation for the latest delay in having the application come before the Court appears to be due to the Christmas shutdown period of the Court, rather than any slow conduct of the applicant.
25. In any event, the present application relies upon new material since the enforcement order was issued and the previous delays must be seen in the light of these developments, discussed below.
Nature of the applicant’s present financial circumstances
26. The total balance of the judgment debt is substantial. As at 6 September 2018, the amount owing on the mortgage was $396,469.17.
27. While it is unclear on the evidence what the balance owing is as at the date of hearing, Mr Nicolaidis estimated that it is likely to be in excess of $400,000.00, particularly having regard to legal costs of the proceedings that may be claimed against Ms Corby.
28. Between 1 January 2018 and 6 September 2018, Ms Corby has paid only $2,750.00 towards the mortgage, whereas the required repayment over the same period was $14,028.20. Ms Corby’s currently monthly repayment obligation is $2,271.00. She has only been paying the bank approximately $1,100 per month. That means the applicant is going backwards financially with every month that passes.
29. There was no current valuation evidence in relation to the subject property. The last valuation in 2016 was $450,000. Although the value of the property may have significantly increased since that time, it is easy to understand why the bank cannot defer enforcement any longer if it is to protect its position and prospects of recovery.
30. Ms Corby was frank about other personal debts she may have with other financial institutions. They are considerably smaller in size but have been taken into account. There is a potential fine in excess of $4,000.00 in NSW arising out of a traffic infringements incurred by Ms Corby’s ex-partner prior to separating that have been visited upon her due to her ownership of the car. She believes that with the help of a financial counsellor, she has concluded successful negotiations in relation to that sum, but had not yet received any paperwork to confirm the position.
31. There were other debts arising out of a car accident and a debt to Citibank. Ms Corby submitted that neither of those creditors appear to have been actively pursuing the alleged debts and having teased out with Ms Corby the circumstances in which the debts are said to have arisen, I am not yet satisfied that they are current liabilities that should be taken into account.
The applicant’s personal circumstances and hardship
32. Ms Corby has lived in the subject property for almost 40 years. She has three school aged children under her care, with one suffering from disability.
33. It was not disputed that Ms Corby is a victim of family violence and that this and the actions of her ex-partner are the primary if not sole reasons why Ms Corby now finds herself in the position of losing possession of her home. In December 2016, Ms Corby obtained an Interim Domestic Violence Order against Mr Corby. An application to amend a family violence order or registered order dated 18 January 2017 was also in evidence. In that application, Ms Corby claimed ‘recent sexual assault – breach of current DVO’ by Mr Corby. She has since separated from Mr Corby.
34. Ms Corby is being assisted by the Women’s Legal Centre ACT (WLC) in preparing a claim for Victims of Crime Financial Assistance as the primary victim of the sexual assault by Mr Corby.
35. Ms Corby suffers from various health issues. A letter from Dr Somasundaram dated 14 May 2018 states that Ms Corby was hospitalised in February 2017 due to a burst appendix, and again in April due to a head injury, both resulted in lengthy absence from work. Family violence has also caused deep emotional stress on Ms Corby and it was the opinion of Dr Somasundaram that the prospect of losing her family home would be detrimental to the health of Ms Corby and her three children.
36. Added to this is the fact that Ms Corby believed she had successfully negotiated with Mr Corby to buy out his interest on the subject property and take full responsibility for the loan repayments, only to discover for the first time during the hearing on 8 January 2019 that Mr Corby had in fact been an undischarged bankrupt since 2017, and that she was required to deal with Mr Corby’s trustees in bankruptcy. Since 12 December 2017, the trustees in bankruptcy have held a registered caveat against Mr Corby’s 50 per cent interest in the subject property.
37. An email from the trustees stated that Mr Corby has yet to submit a completed Statement of Affairs, which renders it difficult for the trustees to make informed decisions. The interest in the subject property may be the only realisable asset in Mr Corby’s bankrupt estate. The trustees have withheld recovery actions in light of the bank’s actions. However, it is clear that an agreement must be reached between Ms Corby and the trustees for Mr Corby’s interest in the subject property to be transferred to Ms Corby.
38. There is no alternative residence for Ms Corby and her three children to go to if she was to be evicted on 17 January 2019. The execution of the enforcement order would no doubt place her in a very unhappy predicament, which I accept would be prejudicial towards the wellbeing of herself and her three dependent children. I am satisfied that both Ms Corby and her three young children will suffer significant hardship if a stay is not granted, and in particular, that her disabled son may be severely impacted by the relatively sudden upheaval in his place of residence.
The applicant’s future financial circumstances
39. Ms Corby presented to the Court evidence of a number of substantial steps that she has taken to improve her financial position with a view to repaying the bank. The ultimate position arrived at is that Ms Corby expects her financial position to significantly improve so as to be able to repay the mortgage arrears within a reasonable period of time and to then continue to service the loan without further default.
40. Ms Corby had not considered the prospect of refinancing, but given the present state of these proceedings, that may well be a difficult course to pursue. She has, however, embarked on a number of avenues of funds, demonstrating that she is genuinely trying to turn her life around, rather than frivolously frustrating the legal proceedings against her.
41. First, Ms Corby is attempting to access a portion of her superannuation entitlement for the purpose of paying a lump sum of $10,000 to the bank in part reduction of the arrears. Before the applicant’s employment was deleteriously affected by the domestic violence and health issues, the applicant had worked full time in the public service for a majority of her working life, and thereby accumulated a substantial balance in superannuation. She had obtained the necessary letter from the bank allowing early release of her superannuation to satisfy her mortgage on two previous occasions. Another early release may allow the partially repay the arrears incurred to date.
42. It is understood that the bank has so far been reluctant to issue a further letter, given the stage of the proceedings, citing futility and its concern over serviceability as reasons. In GE Personal Finance, Johnson J observed at [19] that when a judgment debtor is making genuine efforts to refinance a loan, ‘it might be expected that a reasonable Plaintiff would facilitate such a process’. The same sentiment would appear to apply to a debtor attempting to source money to pay down arrears.
43. In any event, while it is not for this Court to delve into the commercial considerations of the bank as to why it would refuse to facilitate Ms Corby paying it some money, in light of the totality of the evidence it will be clear from the reasons given in this judgment that I have formed a contrary view as to the utility of Ms Corby’s present efforts.
44. She is currently working three days a week and is endeavouring to return to work full time as soon as possible. This is likely to occur towards the end of February 2019. Once she has returned to work full time, she will be earning over $2,700.00 per fortnight and there was material from her employer, her treating doctor and the applicant herself to support both the timing of return to full time employment and the amounts likely to be earned.
45. She says that she will also continue to receive a carers’ payment and Family Tax Benefit from Centrelink. Accordingly, in the very near future, Ms Corby may have the wherewithal to sustain the present monthly mortgage repayments.
46. An additional source of funds is Ms Corby’s claim for victim’s compensation, which she was pursuing and is hoping to claim up to $50,000 given the nature of the violence and the effect it had on her ability to earn an income. The application was to be lodged with the assistance of the WLC, with whom the applicant had an appointment the following week.
47. Although I am therefore satisfied that there is a genuine prospect of Ms Corby being able to fund the mortgage and repay the arrears, albeit potentially through instalments, the evidence is far from certain. The estimates made by Ms Corby were each on a ‘best possible’ scenario and the reality may be very different.
48. In this regard, Ms Corby was commendably realistic. She has indicated to the Court that if in the coming weeks, she was unable to get herself in a position to realistically support the mortgage on an ongoing basis and gain access to funds that would allow her to pay down the arrears in a timely fashion, then she fully intended to sell the property and presumably use whatever money she was able to salvage to move into rental accommodation, again in an orderly manner rather than within the space of a week.
49. Perhaps most critically to Ms Corby’s primary desired outcome is the attitude of the trustees in bankruptcy, who may refuse to assign its 50 per cent interest in the subject property, or be simply unable to agree without the financial statement of Mr Corby which they have been seeking for over a year. Such matters are outside Ms Corby’s control.
Prejudice to the bank
50. The bank is concerned about the significant legal costs that have been incurred to date, the fact that the debt is increasing daily, and the prospect of full recovery if the enforcement is further delayed.
51. I accept these are real concerns. Indeed, it would hardly be in Ms Corby’s interest to delay the enforcement of the default judgment if such delay then resulted in the debt exceeding the value of the subject property so that she remained indebted to the bank after the property was sold.
52. The task is really to balance the potential prejudice to the bank’s interest against the undeniable hardship that will be suffered by Ms Corby and her children if they were to be evicted in a week.
Conclusion
53. I am satisfied that Ms Corby has provided sufficient material, recently obtained and therefore not before the Registrar when the enforcement order was made, to establish a proper basis for a temporary stay. However, I am not satisfied that the evidence yet warrants the present enforcement order being set aside, nor that the present evidence is of such a degree of certainty as to enable consideration of an instalment order.
54. If a stay is granted, the period of the stay must be no more than is reasonable in the circumstances of the case: Sheffield Corporation v Luxford [1929] 2 KB 180 at 185. The bank submitted that if a stay was to be granted, it should be no longer than a few weeks. However, what is reasonable in the circumstances is affected by Ms Corby’s success or failure depending largely on the actions of others, whose timing she cannot control.
55. At the very least, Ms Corby’s ultimate success on the application will depend upon the following evidence:
(a)Her return to full-time employment at the end of February 2019, and payslips indicating her income is as she anticipated at the hearing;
(b)The level of social welfare benefits she is receiving after returning to full time work;
(c)The progress of her victim’s compensation claim;
(d)Whether she was able to secure early access of superannuation;
(e)The status of her other debts;
(f)Any negotiation and agreement made with the trustees of Mr Corby;
(g)Any other evidence that can demonstrate her ability to fully service the mortgage in future and rectify any existing arrears.
56. The applicant is also self-represented and not to be prejudiced procedurally by that fact. At the hearing, I indicated that I considered a temporary stay until 29 March 2019 would provide a reasonable amount of time to satisfy the Court of these matters. I also considered it prudent to list the matter for directions a week earlier, in order to deal with any procedural or evidentiary issues that may have arisen.
57. Accordingly, the orders of the Court were as follows:
(1) The order for delivery of possession of land issued on 15 November 2018 is stayed until 29 March 2019.
(2) The proceedings are listed for directions on 22 March 2019.
| I certify that the preceding fifty-seven [57] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam. Associate: Date: |
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