Friend v Reavill Farm Pty Ltd

[2018] NSWSC 1321

Supreme Court

New South Wales

Medium Neutral Citation:	Friend v Reavill Farm Pty Ltd [2018] NSWSC 1321
Hearing dates:	27 August 2018
Date of orders:	29 August 2018
Decision date:	29 August 2018
Jurisdiction:	Common Law
Before:	Harrison J
Decision:	(1)   I give judgment for the plaintiffs for possession of the land described in the statement of claim. (2)   I grant leave to the plaintiffs forthwith to apply for a writ of possession. (3)   I stay the execution of the writ of possession up to and including 5.00pm on Friday 7 September 2018. (4)   I give judgment for the plaintiffs against the defendants for $879,556.24 together with interest from today upon that sum at the rate for which the plaintiffs’ mortgage provides. (5)   I order the defendants to pay the plaintiffs’ costs. (6)   I grant liberty to the parties to apply on 24 hours’ notice.
Catchwords:	LAND LAW – mortgages – possession of land – default – where defendants are seeking to refinance the loan – where defendants have sat on their hands when the need for action was staring them in the face   CIVIL PROCEDURE – summary disposal – judgment for plaintiff – where defendants concede that the plaintiffs are entitled to relief
Legislation Cited:	Farm Debt Mediation Act 1994 (NSW) Real Property Act 1900 (NSW)
Category:	Principal judgment
Parties:	Jeffrey Friend (First Plaintiff) Patricia Anne Holt (Second Plaintiff) Reavill Farm Pty Ltd (First Defendant) Tucki Hills Pty Ltd (Second Defendant)
Representation:	Counsel: M Gunning (Plaintiffs)   Solicitors: Parker & Kissane (Plaintiffs)
File Number(s):	2018/174190
Publication restriction:	Nil

Judgment

1. HIS HONOUR: By statement of claim filed on 4 June 2018, the plaintiffs seek judgment for possession of two properties. The first defendant is the registered proprietor of Lot 1, and the first and second defendants are the registered proprietors of Lot 2, in DP 1191905 being land situated in Hazelmount Lane, Tuckarimba, New South Wales. The plaintiffs entered into a loan agreement with the defendants on 27 July 2016 pursuant to which they lent the defendants $785,000 for a term of one year. The defendants granted registered mortgages over the properties to secure their indebtedness. The defendants have defaulted under the terms of the loan agreement. Although a defence has been filed, it is now accepted that the plaintiffs are entitled to the relief that they seek. Subject to what follows, that includes relief sought by notice of motion filed on 18 July 2018, including summary judgment for possession of the properties and a money judgment for the amount that is currently owing.

2. The defendants are presently attempting to refinance the loan. They oppose the relief claimed only to the extent that it does not foreclose their attempts to do so. However, the availability or appropriateness of any such concession has to be evaluated having regard to the history of this matter.

3. That history is to some extent set forth in the affidavit of Kelly Maree Waring affirmed on 27 August 2018. Ms Waring is the solicitor for the plaintiffs. She indicates that as long ago as 28 June 2017 she wrote to the defendants putting them on notice of the amount due to be paid on the anniversary of the loan. No payment was made.

4. That letter was followed by further correspondence on 26 July 2017 requiring that the defendants pay the final outstanding balance due by 26 August 2017. A letter dated 24 August 2017 was also sent when no payment had been received. Ms Waring caused a notice to the mortgagors pursuant to s 57(2)(b) of the Real Property Act 1900 to be sent to each of the defendants on 13 September 2017. The defendants did not remedy the default particularised in those notices. Ms Waring then commenced proceedings in this Court against the guarantors of the loan on 14 September 2017 claiming the sum of $821,161.16. Judgment was entered against the guarantors on 13 November 2017. The guarantors proceeded to attempt to refinance the loan with the assistance of an accountant in the hope of discharging the debt by the end of February 2018. That did not occur.

5. On 10 January 2018, Ms Waring sent a letter to the defendants and guarantors serving a notice pursuant to s 8 of the Farm Debt Mediation Act 1994. She received no response to that letter and neither the defendants nor the guarantors made any submissions to the NSW Rural Assistance Authority. Ms Waring subsequently sent a letter to the Authority on 3 April 2018 enclosing an application for a s 11 certificate. The defendants and the guarantors were given until 7 May 2018 to make submissions to the Authority with respect to the issue of such a certificate but did not do so. The Authority issued a s 11 certificate on 11 May 2018.

6. Ms Waring sent s 57(2)(b) notices to the defendants on 30 May 2018. The defendants did not remedy the default particularised in the notices. These proceedings were then commenced on 4 June 2018. The defendants have not paid the monies outstanding to the plaintiffs and have not made any payment at all since 13 June 2017.

7. The plaintiffs’ notice of motion came before Wilson J on 8 August 2018. The defendants at that time sought an adjournment in order to refinance the loan. Her Honour said the following:

“Noting that I have advised Ms Nott of the urgency with which the endeavours to refinance must be pursued, and the likelihood that if refinancing does not occur within the period of a fortnight or so, it is likely the Court will make the orders sought against the defendants, I propose to grant the application for an adjournment.”

8. The matter then returned before me on 27 August 2018. I was advised at that time that the defendants had still not been able to refinance the loan and required some further time in order to do so.

9. In my opinion the defendants have had more than sufficient time to arrange for the discharge of their mortgage to the plaintiffs. Their attempts to do so should have begun even before the time set for repayment of the monies due at the expiration of the original term. The defendants contend that they need a further couple of weeks to arrange an alternative lender. If that is currently a reasonable estimate of the time required within which to locate and instruct a prospective alternative source of finance, it was presumably also a reasonable estimate at some time long before now. In other words, it is apparent that the defendants have sat on their hands when the need for action was staring them in the face.

10. It is difficult in such circumstances to conclude that the defendants are entitled to, or should be given, any further leeway. The time has now passed beyond which all or any attempts to substitute their lender should have been concluded. The orders that I propose to make are not intended to derogate from that simple fact, but are intended to provide for an orderly surrender of possession to the plaintiffs in the circumstances so clearly described by Wilson J.

11. The plaintiffs also seek a judgment for the amount outstanding pursuant to the loan agreement. In accordance with an affidavit affirmed by Patricia Anne Holt on 18 July 2018, and further calculations provided to me in court by the plaintiffs, the amount outstanding as at today, together with interest, is $879,556.24. The accuracy of that sum is not in issue.

12. The plaintiffs also seek costs. There is also no dispute that the plaintiffs are entitled to costs both in accordance with the terms of their security but in any event having regard to the outcome of these proceedings. I am informed by counsel for the plaintiffs that their costs are currently calculated to be something in the order of $82,500.00. There is no material before me that reliably supports that calculation. In the circumstances, I propose to do no more than make an order for costs in the usual way.

13. The plaintiffs have sought costs on an indemnity basis. I did not hear argument upon that. It is in my view unnecessary to deal with that issue having regard both to that fact and to the specific terms of the plaintiffs’ security.

14. I make the following orders:

1. I give judgment for the plaintiffs for possession of the land described in the statement of claim.

2. I grant leave to the plaintiffs forthwith to apply for a writ of possession.

3. I stay the execution of the writ of possession up to and including 5.00pm on Friday 7 September 2018.

4. I give judgment for the plaintiffs against the defendants for $879,556.24 together with interest from today upon that sum at the rate for which the plaintiffs’ mortgage provides.

5. I order the defendants to pay the plaintiffs’ costs.

6. I grant liberty to the parties to apply on 24 hours’ notice.

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Decision last updated: 29 August 2018