Priority Lending Australia Pty Ltd v Martinsville Pty Ltd

[2020] NSWSC 1889

Supreme Court

New South Wales

Medium Neutral Citation:

Priority Lending Australia Pty Ltd v Martinsville Pty Ltd [2020] NSWSC 1889

Hearing dates:

18 December 2020

Date of orders:

18 December 2020

Decision date:

18 December 2020

Jurisdiction:

Common Law

Before:

Hamill J (as Duty Judge)

Decision:

See [12]. Writ of possession stayed.

Ancillary orders made.

Catchwords:

CIVIL LAW - order for possession of land - writ of possession - where defendant seeks to refinance - where one creditor does not oppose stay - not altruistic - whether attempt to refinance futile - not completely uninteresting legal argument - ostensibly bloody-minded approach tempered - where writ previously stayed on ground attempts to refinance continue - evidence suggests on cusp of refinance - relevance of hardship - medical emergency

Cases Cited:

GE Personal Finance v Smith [2006] NSWSC 889

Knauf v Plasterboard West (2017) 254 FCR 559; [2017] FCA 866

Category:

Procedural and other rulings

Parties:

Priority Lending Australia Pty Ltd (First Plaintiff)
Alan Lee Walker and Andre Leon Lakomy (as Receivers of Martinsville Pty Ltd) (Second Plaintiff)
Martinsville Pty Ltd (First Defendant)
Anthony James Murray (Second Defendant)
James Melissa Murray (Third Defendant)
National Australia Bank Limited (Fourth Defendant)

Representation:

Counsel:
J Pokoney (First and Second Plaintiffs)
P Afshar (First, Second and Third Defendants)
R Lewin (Fourth Defendant)

Solicitors:
Deutsch Partners (First and Second Plaintiffs)
Circle Bridge Legal (First, Second and Third Defendants)

File Number(s):

2020/218726

ex tempore Judgment (revised)

1. By amended notice of motion filed in Court this afternoon, the first, second and third defendants seek the following orders:

1. Order that the execution of the writ of possession in relation to the property known as [REDACTED] Martinsville NSW 2265, being the whole of [REDACTED] dated 8 October 2020 be stayed until further order of the Court.

2. Judgment for possession of land made on 1 October 2020 be set aside.

3. Judgment for $1,011,200.42 made on 1 October 2020 be set aside.

4. Any such other and further orders as the Court deems fit.

5. Costs.

2. The matter was referred by the Registrar to me as Duty Judge for resolution of the first of those orders. That is, this is an application to stay a writ of possession in relation to land at a property in Martinsville. That writ was taken out on 8 October 2020.

3. On 8 December 2020, apparently by consent, Wright J made an order staying the execution of the writ until midnight tonight, 18 December 2020. The basis of that decision was that the defendants were attempting to refinance so that they could pay out both the first and second plaintiffs as well as the National Australia Bank (the fourth defendant) who also holds security over the subject property. Wright J also received evidence of potential hardship to various people living on the land.

4. The case is a little more complicated than average because the fourth defendant to the application for possession is the National Australia Bank which, as I have said, also has an interest in the land. Today, the first and second plaintiffs oppose the stay application while the National Australia Bank takes the view that the defendants should be allowed to continue their attempt to refinance. The reason is not altruistic but based on the concern that, if the land is sold at present, there may be a significant shortfall between the debt and the proceeds on that sale.

5. There is evidence that there is a contract for the sale of the land in the sum of $1.2 million. There was some dispute about that document because it was not disclosed in its entirety, in spite of a notice to produce it, until quite late; I think it was this morning. Despite the objection, I accepted that the notice of sale of land was admissible and relevant to the present application.

6. There is also a dispute over the precise amount of the debt as at today between the plaintiffs and the defendants. Judgment was in the sum of $1,011,200.42. However, an affidavit of Alan Lee Walker estimates that debt now to be $1,428,976.46. Asked how that estimate was arrived at and to explain how the debt grew by such a magnificent degree, counsel was unable to do so. I give that figure very little weight. Even so, there remains the debt of a little over $1 million to the National Australia Bank (along with the debt to the current plaintiffs), so even taking a generous view of the value of the subject property, it appears that there would be a massive shortfall if the land was sold now.

7. However, there appears to be no dispute between the parties that the defendant or defendants are also, or is also, the registered proprietor of another parcel or other parcels of land. In attempting to refinance, both properties are being used as security. There is a solid body of evidence that the defendant is making bona fide attempts to refinance. On perhaps an optimistic view, a sum of $2.4 million will be available as soon as later today. One of the bases of Justice Wright's decision to grant the earlier stay was that the defendant must continue to pursue the refinancing option. According to the evidence before me, it has does this.

8. The plaintiffs submitted that the attempt at refinancing was futile because both properties being used to secure the new loan were under the second plaintiff's control as the receivers of the first defendant. It was submitted that, at this stage, the plaintiffs would not consent to the use of those properties as security. Reliance was placed on the decision of Markovic J in Knauf v Plasterboard West (2017) 254 FCR 559; [2017] FCA 866.

9. That ostensibly bloody-minded approach was tempered somewhat when counsel indicated that, while the plaintiffs did not consent to the use of those properties said to be under their control as receivers today, that is not to say consent may not be forthcoming in the future. One would hope that, if the defendants are successful in refinancing in a sum sufficient to pay out each of the relevant creditors, that such consent, if it is needed (a matter about which there was a spirited and not completely uninteresting legal argument) would be forthcoming.

10. It is true that the issue of hardship is a secondary one in matters of this kind. However, in the current health emergency, there is some real force in the second defendant's reliance on the health concerns of his mother-in-law. Those are set out in an affidavit of the second defendant sworn 1 December 2020, and I will not repeat the details here. There is a significant body of evidence concerning one particular family member's potential hardship if evicted at this time, but there are also a number of families living on the property and it would cause considerable hardship and potentially grave health risks if the writ of possession was executed now. Of itself, that would not normally be enough and it does not carry the day in this case either. [1] However, the evidence does establish that the defendant is on the cusp of refinancing and I propose to allow them another month to attempt to find their way out of this financial trouble.

    1. See, for example, GE Personal Finance v Smith [2006] NSWSC 889 at [21] to [23].

11. I would be surprised if another stay was granted if the current deal or one like it falls through. I would encourage the plaintiffs to take a reasonable approach to any issue of consent should the money land in the next week or so.

12. Accordingly, I propose to make an order staying the execution of the writ. I make the following orders:

1. Order that the execution of the writ of possession dated 8 October 2020 in relation to the property known as [REDACTED] Martinsville NSW 2265, being the whole of [REDACTED] be stayed until midnight on 1 February 2021.

2. The amended notice of motion is otherwise returnable before the Common Law Registrar on 1 February 2021 for directions.

3. I reserve all questions of costs.

4. The parties have liberty to restore on two business days' notice.

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Endnote

Decision last updated: 21 December 2020