Jetobee Pty Limited (in liq) v Smith and Young Pty Limited

[2016] NSWSC 5

Supreme Court

New South Wales

Medium Neutral Citation:	Jetobee Pty Limited (in liq) v Smith & Young Pty Limited [2016] NSWSC 5
Hearing dates:	18, 19 January 2016
Date of orders:	19 January 2016
Decision date:	19 January 2016
Jurisdiction:	Common Law
Before:	Lindsay J
Decision:	Defendant’s notice of motion dismissed with costs.
Catchwords:	WRIT OF POSSESSION – application for stay of execution of writ – where defendant has entered into contract for sale of land – where completion of sale would satisfy plaintiff’s mortgage debt – where plaintiff doubts whether contract will be completed in timely fashion or at all – where defendant has not initiated appeal against judgment granting possession – where no reasonable or articulated ground for appeal – where plaintiff has not consented to sale on terms negotiated by defendant – where defendant has offered undertakings as to sale – where plaintiff has maintained objection to stay – held, continuation of stay refused.
Legislation Cited:	-
Cases Cited:	GE Personal Finance Pty Limited v Smith [2006] NSWSC 889 Jetobee Pty Ltd (in liquidation) v Smith & Young Pty Ltd (No 3) [2015] NSWSC 1526
Texts Cited:	-
Category:	Principal judgment
Parties:	Jetobee Pty Ltd (in liquidation) ACN 002 714 776 (plaintiff/respondent) Smith & Young Pty Ltd ACN 112 202 758 (defendant/applicant)
Representation:	Counsel: J Foley (solicitor) (plaintiff/respondent) D Allen (defendant/applicant)   Solicitors: Gadens Lawyers (plaintiff/respondent) Church & Grace Lawyers (defendant/applicant)
File Number(s):	2015/00067958

Judgment – EX TEMPORE

1. By a notice of motion filed on 15 January 2016, the defendant applies for a stay beyond today of a writ of possession relating to land (parcels comprising a development site) at Wiley Park.

2. The plaintiff (a company in liquidation) obtained orders for possession, in aid of enforcement of a mortgage, on 29 October 2015. Those orders were made by Beech-Jones J to give effect to reasons for judgment published by his Honour, on 19 October 2015, as [2015] NSWSC 1526.

3. The defendant has filed a notice of intention to appeal, but no notice of appeal. The time for the filing of any notice of appeal expires on 29 January 2016.

4. On 11 January 2016, Black J granted a stay of execution of the writ of possession, limited to expire at 5pm yesterday, 18 January 2016. Yesterday, I extended the stay for 24 hours to facilitate argument on the defendant's motion, and to allow the parties additional time to reach a negotiated outcome.

5. Despite an expectation of Black J to the contrary, the defendant has not yet filed a notice of appeal, and there is a realistic possibility that it will decide not to do so.

6. Counsel for the defendant accepts that its motion must be determined upon an assumption that it cannot point to any reasonably arguable grounds for appellate intervention with the orders for possession.

7. The defendant's application for a stay is based upon its entry into a contract (on 27 November 2015) for the sale of the land. If that contract were to be completed forthwith, the moneys secured by the plaintiff's mortgage could be paid out in full.

8. The plaintiff does not contend that the contract is otherwise than a bona fide transaction, but it does doubt the bona fides of the defendant, and it seeks, by enforcement of its judgment, to take control of the land and any sale.

9. It points to the terms of the contract as a source of doubt about whether the contract will be completed in a timely way, or at all.

10. The contract provides for a completion date of 27 April 2016, but contemplates that completion may not take place (if at all) until 27 October 2016.

11. The contract, in terms, is predicated upon express acknowledgements by the purchaser that:

1. the plaintiff has already entered into possession of the land as mortgagee in possession;

2. the plaintiff has been placed in liquidation; and

3. the parties will not be able to complete the contract unless the defendant is able procure the consent of the plaintiff and its liquidator to the sale.

12. In (unreported) reasons for judgment published to the parties in support of the stay of execution granted on 11 January 2016, Black J contemplated the possibility of an application by the defendant for an order that the plaintiff consent to the sale. No such application has yet been made.

13. The solicitor appearing for the plaintiff contends that any application, if made, would be misconceived or, in any event, would have to be determined by reference to the rights ordinarily allowed to a mortgagee.

14. There remains the possibility that the plaintiff will, in fact, consent to the sale. The liquidator has no alternative purchaser in hand. The price for which the contract provides is in excess of the defendant's mortgage debt.

15. The plaintiff opposes an extension of the current stay of the writ of possession, essentially, on the basis that it is entitled to the fruits of its judgment. Acknowledging principles enunciated in GE Personal Finance Pty Limited v Smith [2006] NSWSC 889, it contends that there are no cogent discretionary grounds for granting an on-going stay.

16. It points particularly to the following factors:

1. The defendant has not initiated an appeal from the orders made by Beech-Jones J;

2. The defendant has declined an opportunity to articulate ground of appeal;

3. The assessment of the plaintiff's liquidator is that there are no reasonable grounds for an appeal by the defendant in any event;

4. The plaintiff has not consented to a sale of the land on the terms negotiated by the defendant;

5. The plaintiff's entry into possession of the land would not, of itself, preclude it from consenting to a sale to the current purchaser or, with the consent of the plaintiff, the contract being completed according to its terms; and

6. The terms of the contract provide no assurance that it will be completed in a timely way, if at all.

17. In an endeavour to meet the plaintiff's objections to its stay application, the defendant has offered, in return for a continuing stay, to submit to terms that would require:

1. an undertaking by the defendant to the Court that it will pay out the plaintiff's mortgage or deliver vacant possession of the land to the plaintiff on or before 27 April 2016, the projected date of completion under the existing Contract for Sale;

2. the defendant expressly to abandon any prospective appeal from the orders made by Beech-Jones J; and

3. an undertaking by the defendant and a principal of the defendant that, upon completion of a sale of particular land, they will cause $350,000 to be paid into court to abide the orders of the Court.

18. The liquidator of the plaintiff and those advising him have had opportunities, during the course of argument on the defendant's stay motion, to consider the commercial merits of the defendant's offer.

19. The plaintiff remains steadfast in its opposition to a stay, pointing out, that as a mortgagee it has an obligation, as does the liquidator as an officer of the Court, to endeavour to obtain a proper price upon realisation of the plaintiff's security over the land.

20. In my opinion, the plaintiff's grounds of opposition to the continuation of a stay tell decisively against the defendant's motion.

21. Accordingly, I order that the defendant's motion be dismissed with costs.

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Decision last updated: 22 January 2016