National Australia Bank Ltd v Gaudron
[2011] QDC 248
•28 October 2011, orders. 2 November 2011, reasons.
DISTRICT COURT OF QUEENSLAND
CITATION:
National Australia Bank Ltd v Gaudron [2011] QDC 248
PARTIES:
NATIONAL AUSTRALIA BANK LIMITED ACN 12 0 04 044 937
Plaintiff/Respondentv
ANNETTE EILEEN GAUDRON
Defendant/ApplicantFILE NO:
2090/11
DIVISION:
Civil
PROCEEDING:
Application
ORIGINATING COURT:
District Court, Brisbane
DELIVERED ON:
28 October 2011, orders.
2 November 2011, reasons.
DELIVERED AT:
28 October 2011 Brisbane
2 November 2011 Maroochydore
HEARING DATE:
28 October 2011
JUDGE:
Long SC, DCJ
ORDER:
That pursuant to r 895 UCPR the enforcement warrant for possession of land, issued by this Court and dated 31 August 2011, be stayed until 30 November 2011.1.
The costs of and incidental to the application be reserved2. .
CATCHWORDS:
PROCEDURE – JUDGMENTS AND ORDERS –ENFORCEMENT OF JUDGMENTS AND ORDERS –EXECUTION AGAINST PROPERTY – OTHER MATTERS – where respondent plaintiff has obtained default judgment against the applicant defendant – the judgment provided that the respondent plaintiff recover possession of the property – an enforcement warrant issued - where applicant defendant applied for a stay of execution pursuant to r 895 of the Uniform Civil Procedure Rules – whether stay should be granted
COUNSEL:
Mr S.T. Cleary on behalf of the Applicant/Defendant
Ms B.A. Sim, solicitor, on behalf of the Respondent/Plaintiff
SOLICITORS:
Legal Aid Queensland on behalf of the Applicant/Defendant
Gadens Lawyers on behalf of the Respondent/Plaintiff
What follows are the detailed reasons for the orders which were made in this matter on 28 October 2011. Those orders were:
1. That pursuant to r 895 UCPR the enforcement warrant for possession of land, issued by this Court and dated 31 August 2011, be stayed until 30 November 2011.
2. The costs of and incidental to the application be reserved.
The application for those orders was made by the abovenamed defendant (“applicant”) and was filed on 24 October 2011. It was in effect an application brought at the eleventh hour to attempt to avoid the ordinary consequences of proceedings which have been regularly conducted by the plaintiff (“respondent”), in this court.
On 8 August 2011 the respondent obtained judgment in default of a notice of intention to defend, for a judgment debt of $144,306.84 (including interest and costs) and recovery of possession of the land at which the applicant resides.
That judgment was given upon a claim filed on 16 June 2011 which related to the applicant’s default under a loan agreement and mortgage over the subject land, and securing that loan.
In the statement of claim, it was asserted that on 6 April 2005 a loan agreement was made for the principal sum of $140,000. It was further pleaded that the applicant was in default by failure to repay the instalments due under the loan agreement and that, as at 30 March 2011, the arrears were $5,375.68 and that the default had not been remedied upon notice and demand.
Accordingly the claim made was for $142,352.01 calculated as at 14 June 2011, plus interest to the date of payment or judgment.
By letter dated 10 August 2011 the default judgment was served on the applicant and demand was made for payment or vacation of the property within seven days. That did not occur and upon proof of those steps, on 31 August 2011, an enforcement warrant for possession of the land was granted.
On 8 October 2011 steps were taken to enforce the warrant. Because of the level of distress and circumstances that confronted the execution of that warrant, it was not pursued, in the sense that the applicant was given an allowance of further time to vacate the premises. However by a notice dated 10 October 2011 the enforcement officer notified the applicant that she was ordered to vacate the premises, no later than Saturday 29 October 2011 and, if not, she would be compelled to move at her own expense, on Sunday 30 October 2011.
In the application then filed on 24 October 2011 an abridgment of time was also sought for the hearing of the application on 28 October 2011. However, at that hearing the parties agreed that no such order was required.
In support of her application for the stay of the enforcement warrant, the applicant has sworn affidavits which disclose that:
(a) She is a person of modest means and in receipt of government allowances, in addition to her income from employment she has held since 2009. She is also in receipt of child support payments;
(b) She has the full-time responsibility of caring for two dependent children, aged 18 and 14 years (one of whom has been diagnosed with psychological disorders and for whom she is seeking assistance by way of counselling) and her 75 year old mother who is said to suffer from aged related physical disabilities and also depression.
(c) In addition, her 46 year old sister who has an intellectual disability and who primarily resides at Endeavour Foundation accommodation, also lives with her at the subject property on a part-time basis.
(d) The applicant admits to having notice of her default under the loan and mortgage, during a period when the child support payments from her estranged husband were not being paid and that by the time that difficulty was finally resolved she was in arrears in respect of her periodic repayments. As it was explained the effect was that during a period when she was not in receipt of the child support payments the direct debits for the mortgage repayments could not be met.
(e) The applicant’s unsophisticated reaction to this problem was largely one of avoidance and failure, until quite recently, to seek assistance in respect of it and this led inextricably to the default judgment and consequently the enforcement warrant.
(f) The applicant’s belief is that she can now maintain payments under her contractual obligations and she is in a position to seek to have her situation remedied particularly if the contract were to be varied, for instance by an extension of the term. She has provided evidence as to her current level of income and expenditure and has referred to steps that she has taken towards making an application for assistance through the Department of Communities in respect of the loan arrears;
(g) The property for which possession is sought for the satisfaction of the judgment debt has been appraised at a value of $350,000 to $365,000 and the applicant states that if she were required to vacate the residence she has nowhere to relocate herself and her children and mother (except to attempt to locate rented accommodation which is likely to be at a rental rate which would exceed the current weekly mortgage repayments) and which would be likely to be detrimental to the welfare of her dependents and her mother.
In support of her application for the stay of execution of the enforcement warrant, the applicant points to the apparently wide and unfettered nature of the discretion provided in UCPR 895 and that whilst the circumstances which may be considered for the purpose of application of that discretion might include circumstances which have arisen since the enforcement warrant was issued, they need not be so limited.
In Quaresmini v Perpetual Trustee Company Ltd & Anor [2011] QCA 74, Fraser JA (in a judgment with which White JA and Peter Lyons J agreed) made the following observations, in relation to UCPR 895:
“Of course the court possesses the power under r 895 of the UCPR to stay an enforcement warrant. In that respect, it should first be noted that, in relation to the enforcement of money orders under ch 19 of the UCPR, r 830 provides that an enforcement officer must not sell property seized under an enforcement warrant if, at or before the sale, the enforcement debtor pays to the enforcement officer the amount owing under the order including interest, the costs of the enforcement then known to the enforcement officer, and an amount set by the enforcement officer as security for the enforcement creditor’s other costs of enforcement. However this appeal concerns the enforcement of non-money orders under ch 20 of the UCPR which does not contain any provision similar to r 830.
Assuming, without deciding that in a case of this general character the court has an unfettered discretion under r 895 to stay enforcement of a warrant for possession, this was not an appropriate case for the exercise of the discretion. There was unchallenged evidence at the hearing in the trial division that the principal amount of the loan fell due for repayment on 1 July 2010 and remained unpaid. … The appellant did not adduce any evidence to suggest either that he might remedy his then existing default or that he might thereafter keep the account up to date. It is hardly to be expected that the court would stay enforcement of a regularly entered judgment in those circumstances.”
The observations of White J in J Wright Enterprises Pty Ltd (In Liquidation) v Port Ballidu Pty Ltd (No. 2) [2010] QSC 214 at [25] may also be noted:
“[25]No particular approach is identified in r 895 or r 801, which is in the same terms referring to a stay of money orders. In respect of the latter, Holmes J (as her Honour then was) in Willemse Family Co Pty Ltd v Deputy Commissioner of Taxation considered if a stay were ‘appropriate’. In Gel Custodians Pty Ltd v RQ Consultants Pty Ltd & Ors, McMeekin J, considered a stay application pursuant to r 300, discussed the balance of convenience. In J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [No. 2], Derrington J, with whom Campbell CJ and Kelly J agreed, pointed out that a plaintiff having succeeded is entitled to the fruits of its judgment unless good reason is shown to the contrary.” (citations omitted)
The respondent opposes the stay and correctly points to the judgment and execution warrant in its favour and the indulgence already granted, in not persisting with the attempted execution of the warrant on 8 October 2011.
Further and whilst the respondent accepts that there are considerations which arise in this case, which are relevant to the exercise of the discretion pursuant to UCPR 895, the respondent particularly points to its concern as to the viability of the applicant’s proposals and suggested ability to retrieve her situation. In particular, the respondent points to the circumstances:
(a) That the amount of arrears is now some $9,761.77 and that there are, to date, incurred legal and enforcement costs exceeding $5,500;
(b) That it is no longer just the arrears that are due and owing but rather the total amount of the debt, as the respondent has accelerated the debt in accordance with its rights under the terms of the loan agreement and the mortgage;
(c) That on the applicant’s own admission she has struggled to make repayments on time in the past and that she has, in the past, been granted financial hardship assistance (in April 2007 for a period of three months) but otherwise accepted that the applicant had, in the past, “managed to catch up”; and
(d) Otherwise points to the regularly obtained judgment and enforcement warrant, as a consequence of the respondent duly and appropriately exercising its rights under the loan agreement and mortgage, after notice to the applicant and to the applicant’s own admission that she had “ignored everything because she was scared”.
Through her legal representatives the applicant accepts that the problem which now confronts her has been one of her own making, in the sense that she has, through concern for and avoidance of her predicament, failed to address it at an earlier time. However, the evidence she has provided supports the contentions that:
(a) The position is remediable, as a real but yet to be realised prospect. Apart from seeking assistance to complete a household budget, the applicant has now identified an additional source of government allowance applicable to her situation and retains an increasing capacity to take on extra hours of work. She has also identified a relevant scheme and applied for Queensland government assistance towards meeting the current arrears and costs.[1] In respect of her ongoing ability to meet her commitments, she identifies that it was the temporary cessation of the child support payments which had brought her into arrears and that there is a future capacity to meet her existing commitments;
[1]The availability of interest free mortgage relief loans through the Department of Communities, which, if approved, may be secured by mortgage over the property and would not be repayable in the first 12 months.
(b) Execution of the enforcement warrant would cause undoubted stress and hardship to the applicant and her family and the loss of a long standing home and property in which she enjoys a significant proprietal equity;
(c) In respect of the problem of the existence of the default judgment, the applicant has grounds for seeking to set it aside and intends to do so[2], having regard to the provisions of the National Credit Code[3] and particularly s 72 of that Code, which allows for changes to be made in a regulated agreement, in the nature of an extension of the contract period or postponement of repayments or a combination of such changes. The criteria for such an entitlement is set out in s 72(1), as follows:
[2]Presumably and if necessary, pursuant to UCPR 302.
[3]Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) and which regulates this loan agreement and mortgage.
“A debtor who is unable reasonably, because of illness, unemployment or other reasonable cause, to meet the debtor’s obligations under a credit contract and who reasonably expects to be able to discharge the debtor’s obligations if the terms of the credit were changed in a manner set out in subsection (2) may apply to the credit provider for such a change.”
In the absence of the agreement of the credit provider, a debtor may apply to the court for the appropriate change, pursuant to s 74 of the Code which provides as follows:
“74 Changes by Court
(1)If the credit provider does not change the credit contract in accordance with the application, the debtor may apply to the court to change the terms of the credit contract.
(2)The court may, after allowing the applicant, the credit provider and any guarantor a reasonable opportunity to be heard, by order change the credit contract in a manner set out in section 72, and make such other orders as it thinks fit, or refuse to change the credit contract.
(3)The court may, if it thinks it appropriate in the circumstances, stay any enforcement proceedings under the credit contract, and make such other orders as it thinks fit, until the application has been determined.”[4]
[4]By reference to s 87 of the National Consumer Credit Protection Act 2009 (Cth), “the court” may, apart from federal courts, be any state court acting within that court’s jurisdictional limits.
Further, the applicant’s position is that orders pursuant to s 74 of the Code may be raised by way of counterclaim and therefore response to proceedings of the kind brought by the respondent, in this case and refers to Permanent Custodians Limited v Carolyn Joy Upston[5] as authority for this proposition and a result whereby the credit provider’s claim may be dismissed and instead a variation of the contract allowed; and
(d) That leaving aside the obvious delay in respect of the respondent having its entitlements vindicated, there will be no other prejudice to the respondent’s position (which, it may be noted, was a position accepted by the respondent on this application).
[5][2007] NSWSC 223.
The discretion allowed under UCPR 895 is a broad one and resolves to an assessment of the particular circumstances pertaining to this case.[6] From what has been set out above it can be seen that the relevant circumstances are not just those of a kind that raise elements of sympathy for the applicant, but include the identification of some prospect of rectification of her situation, so that the hardship which might result from the enforcement of the warrant might be avoided.[7]
[6]The respondent referred me to Perpetual Trustees Victoria Limited v James [2008] QSC 19, which provides an example of an exercise of discretion against the stay of an enforcement warrant in circumstances where there had been no reference to any proposed recourse to the National Credit Code (as it had not been enacted when that case was decided).
[7]It of course remains to be seen at to whether, even at this late stage, some agreement may be resolved in respect of this matter.
It is an element of weakness in the applicant’s position that this is still at this late stage, only able to be expressed as a prospect but for the reasons, set out above, it is a distinct prospect and at this stage what is sought is an opportunity to bring that prospect to a position of greater certainty and the only prejudice to the respondent is that relatively short delay in realising its appropriate entitlements.
Accordingly and as I indicated when making the orders on 28 October 2011, in these circumstances I am satisfied that it is an appropriate exercise at the court’s discretion to grant the short period of stay sought, so that the applicant might have a final opportunity to retrieve her situation or, failing that, to depart her residence in a more orderly fashion, if that is what must occur.
However it must be recognised that this indulgence to the applicant is occurring very late in the piece and that for obvious reasons, the applicant will need to make full use of the time allowed for her to resolve her position to one of greater certainty and she may not be able to expect that further indulgence will be granted upon any further application that might be made at a point when the execution of the enforcement warrant is again imminent.
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