National Australia Bank v Octagon Financial Services
[2013] NSWSC 1567
•18 October 2013
Supreme Court
New South Wales
Medium Neutral Citation: National Australia Bank v Octagon Financial Services [2013] NSWSC 1567 Hearing dates: 17/10/13; 18/10/13 Decision date: 18 October 2013 Jurisdiction: Common Law Before: Campbell J Decision: (1) The execution of the writ of possession in favour of the plaintiff on 18 October 2013 at 10.30am be stayed;
(2) The writ of possession in favour of the plaintiff is to be executed on 25 October 2013 at 9am;
(3) The requirement to provide the occupiers with notice of the further execution of the writ of possession is dispensed with in accordance with section 7A(4) of the Sheriff Act 2005 (NSW);
(4) These orders are made on the basis of Ms Bethanie Tobin's undertaking to the Court, on her own behalf and on behalf of her husband, that she will provide vacant possession of the premises located at XXXXX XXX to the plaintiff by 10am on Tuesday 22 October 2013.
Catchwords: PRACTICE AND PROCEDURE - application for a stay of a writ of possession - no question of principle Legislation Cited: Civil Procedure Act 2005 (NSW)
Real Property Act 1900 (NSW)
Sheriff Act 2005 (NSW)Category: Procedural and other rulings Parties: National Australia Bank Limited (plaintiff)
Octagon Financial Services Pty Ltd (first defendant)
Nicholas Martin Hunter (second defendant)Representation: Counsel:
EG Saad, solicitor (17/10/13); RJ Lewin, solicitor (18/10/13) (plaintiff)
C Bavin, solicitor (17/10/13); In person (18/10/13) (first and second defendants)
Solicitors:
Gadens Lawyers (plaintiff)
Aston Legal (first and second defendants)
File Number(s): 2012/87976
ex tempore Judgment
JUDGMENT 1 (17/10/13)
I have before me an urgent application for the stay of a writ of possession that was first issued on 4th July 2013.
The short relevant history of the matter is that on 29th May 2013 Schmidt J entered consent judgments in favour of the plaintiff bank for a debt of $1,280,565.60, being an amount due under a mortgage agreement. On the same day judgment for possession was given in favour of the bank, together with leave to issue a writ of possession. It is not clear to me why the writ of possession did not issue until 4th July, but it may be something to do with the fact that since the second defendant fell into difficulty back in March 2012 there have been repeated unsuccessful attempts to secure refinance. In any event, after the writ was issued in July 2013, the second defendant applied for a stay and Rothman J made orders for a conditional stay on 23rd August 2013. The conditions were complied with but the stay expired at the close of business on 13th September 2013.
Pursuant to Rothman J's orders, the plaintiff was permitted to approach the sheriff before the expiration of the stay for the fixing of another appointment for eviction to take place. That happened and on 5th September 2013 the sheriff issued a notice to vacate the premises prior to 10.30am tomorrow, 18th October 2013. The notice says:
... action will proceed to evict you without further warning. There are no further extensions to this time frame unless initiated by the plaintiff.
That of course is a reference to the plaintiff bank.
I note that throughout his financial difficulties, the second defendant has had a number of solicitors and has made a number of different attempts to refinance his debt, all of which so far have come to naught. The only payment made on the judgment debt since it was incurred is the payment ordered to be made by Rothman J in the sum of $7,800. As I say, no further payments have been made and, doubtless, quite apart from any question about interest under s 101 of the Civil Procedure Act2005 (NSW), interest is running at a high rate under the mortgage agreement. As at August the total amount due was a sum over $1.3 million. Mr Saad, solicitor for the plaintiff, is unable to tell me what the present debt is because he received notice of this current application only late this afternoon.
There are two things that can be said in favour of granting a further stay. The first is that although it is of considerable concern that nothing has been done to try to reduce the debt since May, apart from the one payment the Court ordered, the value of the property seems to comfortably cover the debt due to the bank so far as I can tell anyway. The other thing that can be said in favour of it is that doubtless some hardship will be caused to the second defendant's family if a stay is not granted. Mr Bavin, solicitor appearing for the second defendant, in his affidavit, which has been read, tells me that the second defendant's wife and two small children are living at the house. The second defendant is apparently currently overseas and, from the evidence attached to Mr Bavin's affidavit, it seems that he is frequently absent overseas in the Republic of Indonesia attending to business matters. Unfortunately, there is just no explanation given as to why this application is made at the very last minute. Clearly, the second defendant has had legal advice. Clearly, he has previously applied for stays. He can be taken to know that they are not readily come by.
The simple fact of the matter is that a stay of a writ of possession is an exceptional exercise of the Court's discretion. Effectively it puts the orders of the Court, whereby judgment has been given for a large sum of money, about which there is no dispute, and for possession of a property subject to the statutory charge of a mortgage under the Real Property Act1900 (NSW), on hold. Those orders ought to be carried into effect unless some very good reason for delay is shown. It puts the idea of secured indebtedness on a very shaky foundation if the Court does not carry its own orders into effect when judgment has been given for possession. The whole advantage to creditors of obtaining security is that they have some assurance that in the event of default, the indebtedness of the mortgagor will be liquidated in relatively short order.
Quite apart from the hardship in relation to the second defendant's family, yet another proposal for refinance is put up in annexure B to Mr Bavin's affidavit. The proposal seems to be for a loan of $1.4 million, which probably would cover the indebtedness at this time, that is, the indebtedness to the bank. But as Mr Saad points out, although the second defendant and, it would seem, his wife, have signed yesterday a conditional approval of that loan, the conditions are such to make it questionable whether the lender will proceed, as an additional requirement prior to settlement is a satisfactory explanation as to the intended means of repayment of the loan and statements of existing mortgages, and business trading statements for the last six months. The Court might be entitled to know that in the circumstances in which the second defendant has found himself since March 2012, it may well be that the current proposed lender will not be prepared to complete the agreement because it might form the view that its additional requirements cannot be satisfied.
I am not speculating, but the onus is very particularly on the second defendant to persuade me that there is some real prospect of this particular proposal for refinance being realised in the short term. Unfortunately, I do not have the necessary confidence that that is so.
I am just completely unaware of whether any arrangements have been made for the family to vacate tomorrow because, unfortunately, Mr Bavin, having just received instructions today, does not have sufficiently fulsome instructions to provide me with information of that type. Whereas I am obviously concerned for the second defendant's family, looking at the history of the matter and looking at what seems to be only a weak proposal for refinancing, I am not satisfied that legal process ought to be further stayed. In taking this into account, I have borne in mind that although only a short stay of three weeks is proposed, and that nothing might change over three weeks, the simple fact is the Court may be taken to know, and as the circumstances of the current appointment for eviction shows, it takes the sheriff some weeks to be in a position to execute a writ of possession.
For all of these reasons, I am simply not satisfied that a proper case has been made out for staying the writ of possession any further. My order is the application for a stay is dismissed.
JUDGMENT 2 (18/10/13)
This is a matter of the National Australia Bank Limited and Octagon Financial Services Pty Ltd.
At about 5.15pm yesterday I dismissed the first defendant's application for a further stay of execution of the writ of possession issued pursuant to orders of this court on 4th July 2013. I will not repeat the reasons I gave at that time for making that order.
This morning the matter has been restored to the list and Ms Bethanie Tobin, who occupies the premises with her husband and two children, has renewed the application for a stay and has provided additional material which was not available to me yesterday afternoon. In particular Miss Tobin has indicated to me in court today that she accepts the decision made yesterday afternoon but given her hope that the order would have been otherwise, she has not made the necessary arrangements for herself and her children to vacate the premises today.
Her husband, who is the person who controlled the business of Octagon Financial Services, is currently overseas but is returning over the weekend and understandably she requires his assistance to vacate the premises with their children.
The material matter however is that Ms Tobin has offered her personal undertaking to the court on her own behalf and on behalf of her husband, that the family will vacate the premises by 10am on Tuesday 22nd October 2013 and surrender possession of the premises to the plaintiff by that time.
It may be that they will have been unable to remove their furniture by that time. However, Mr Lewin, who appears on behalf of the plaintiff today, has very fairly said that if I make an order adverse to his client's position, and that is the situation on Tuesday, provided the undertaking is complied with, the bank would facilitate a supervised removal of the furniture at a convenient time arranged between the parties.
I should record that the bank maintains its opposition to any further stay. I acknowledge the bank's entitlement under the judgment made in this Court by Schmidt J to possession of the premises. However, given what I regard as a material change in circumstances, I am prepared to stay the execution of the writ for a short period of time.
Mr Lewin has informed me, in discharge of his obligation of candour to the Court for which I commend him, that he has spoken to the Sheriff and the Sheriff is able to arrange for execution of the writ next Friday, should Ms Tobin breach her undertaking.
Having seen and heard Ms Tobin in court today, I am confident that she will not do so, but I think it appropriate to make the following orders:
(1) The execution of the writ of possession in favour of the plaintiff on 18 October 2013 at 10.30am be stayed;
(2) The writ of possession in favour of the plaintiff is to be executed on 25 October 2013 at 9am;
(3) The requirement to provide the occupiers with notice of the further execution of the writ of possession is dispensed with in accordance with section 7A(4) of the Sheriff Act 2005 (NSW);
(4) These orders are made on the basis of Ms Bethanie Tobin's undertaking to the Court, on her own behalf and on behalf of her husband, that she will provide vacant possession of the premises located at XXXXX XXX to the plaintiff by 10am on Tuesday 22 October 2013.
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Decision last updated: 29 October 2013
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