Radin, Judith v Commonwealth Bank of Australia

[1997] FCA 335

NOT FOR GENERAL DISTRIBUTION
NO QUESTION OF PRINCIPLE

IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION                 )

No NG 985 of 1995

BETWEEN:

JUDITH RADIN
  Applicant

AND:

COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124
  Respondent

CORAM:Lindgren J

PLACE:Sydney

DATE:8 May 1997

REASONS FOR JUDGMENT

(Ex tempore)

HIS HONOUR:   There is before the Court a motion brought by notice of motion filed on 16 April 1997, by the cross-claimant ("the Bank") against the cross-respondent ("Mrs Radin").  The notice of motion seeks, relevantly, judgment against Mrs Radin for money amounts representing what have been referred to as a "home loan debt" and a "home improvement loan debt", judgment for possession of a residential property at 11 Appian Way, Burwood (“the Property”), and leave to issue a writ of possession to enforce the judgment for possession.  As well, the notice of motion seeks an order for costs.

The present proceeding is related to two others. They are NG 984 of 1995 between Mrs Radin’s mother-in-law, Mrs Vladimirka Radin, and the Bank, and NG 437 of 1996 between Mrs Radin’s former husband, Michael (or Milosh) Radin, and the Bank. All three proceedings arise out of financial accommodation provided by the Bank to Mr Radin alone or to Mr and Mrs Radin, secured by mortgages given by them and by Mrs Vladimirka Radin, to the Bank. The three proceedings are, together, part heard before me. The hearing is due to resume on 18 August 1997.

In the three proceedings, the Radins seek to have mortgages given by them to the Bank over various properties set aside, and to recover damages from the Bank. But an important distinction must be made: neither Mr nor Mrs Radin challenges the validity of the mortgage over the Property. That is to say, they have, through their legal representatives, accepted that the Bank is entitled to the benefit of that security.

The Property is a dwelling house registered in the names of Mr and Mrs Radin. It is the former matrimonial home. After Mr and Mrs Radin separated, Mrs Radin continued to live there with the two children of the marriage, now aged 13 years and 8 years.

Many of the allegations in the Bank’s second cross-claim filed on 28 November 1996 are admitted in Mrs Radin’s defence. The facts which are admitted or which I find to be proved are recounted in the following paragraphs.

Mr and Mrs Radin successfully applied on 13 November 1987 to the Commonwealth Savings Bank of Australia (“the CSB”) for a home loan of $280,000. The Bank is the successor in title to the CSB. Mr and Mrs Radin (“the Mortgagors”) gave a mortgage dated 5 January 1988 registered number X381289 (“the Mortgage”) over the Property to the CSB as security for the home loan. The Mortgage contained a provision that Mr and Mrs Radin would observe the provisions set forth in a registered Memorandum number R327784.

By covenant 2 of the Mortgage, the Mortgagors agreed to pay interest on the home loan at the rate of 14 per cent or such rate as was varied as provided for in the Memorandum. Clause A1 of the Memorandum empowered the Bank, at any time and from time to time, to vary the interest rate on the home loan. By covenant 3 of the Mortgage, the Mortgagors agreed to pay the home loan and interest by monthly instalments of principal and interest of $5250. By clause A6 of the Memorandum it was a term of the Mortgage that the Mortgagors would pay compound interest on any instalment of principal or interest on the home loan or on any other money payable under the Mortgage which remained unpaid after the date on which payment was due. By clause A7 of the Memorandum, the Mortgagors undertook to pay to the Bank on demand all further moneys, if any, which the Bank might advance to the Mortgagors or which might become owing by the Mortgagors to the Bank on any other account.

By clause B4 of the Memorandum, the Mortgagors undertook to pay to the Bank the amount of the premium on insurance effected in relation to the Property.  By clause E3 of the Memorandum, it was a term of the Mortgage that upon the power of sale becoming exercisable, the whole of the moneys secured which were unpaid should, at the option of the Bank, become immediately due and payable.  Finally, by clause 38 of the Memorandum, it was a term of the Mortgage that the Mortgagors were jointly and severally liable to the Bank under the Mortgage.

Although the Mortgagors paid the instalments for a time, default occurred. In particular, there was a default on 5 January 1991 in payment of a monthly instalment. Since that time there has been continued default in the sense that no further payments have been made. Thus, breach is clearly established. Pursuant to s 60 of the Real Property Act 1900 (NSW), upon the default on 5 January 1991, and, for that matter, on the subsequent defaults, the Bank became entitled to recover possession of the Property. There is evidence of the service of various notices under s 57 (2) (b) of the Real Property Act 1900 (NSW). There is also evidence of the increase in the amount due, including interest, in respect of the home loan.

I turn now to "the home improvement loan". By an application signed by the Mortgagors on 14 October 1988, they successfully applied to the Bank for a further loan of $100,000. It was a term of the home improvement loan that it would also be secured by the Mortgage. Again, although the Mortgagors paid instalments for a time they defaulted on 14 January 1991 in paying an instalment and they have made no payments since that time. What I have said earlier in relation to the right to possession and the giving of notices under s 57 (2) (b) of the Real Property Act 1900 (NSW) also applies in respect of the home improvement loan.

There has been no dispute this morning that the Bank is entitled to judgment against Mrs Radin for the current balance of both loans ($711,011.06) and to recover possession of the Property and to sell it. Mr Licardy, solicitor, who appears for Mrs Radin, submits, however, that as a matter of discretion, I should grant a stay until the hearing and final determination of the currently pending proceedings. In fact, Mr Licardy seeks a stay until 31 December 1997. 

It is common ground that I am entitled to take into account, in relation to the discretion to order a stay, Mrs Radin's pending claim for damages against the Bank. But there has been no attempt to suggest a particular order of magnitude of the damages.

Mr Licardy’s chief submission is that I should take into account the possibility that a settlement may be arrived at between Mr and Mrs Radin which would permit the other properties mortgaged to the Bank to be sold. But there is not enough information, let alone evidence, to permit me to see how a sale of the Property could be avoided on the basis of any settlement that may be arrived at. The amount of money which the Bank claims to recover from the Radins by the Bank’s cross-claim against them in the proceeding brought by Mr Radin (NG 437 of 1996) is of the order of five million dollars. On any reckoning, even after all the properties mortgaged to the Bank are taken into account, there would be a substantial shortfall. Indeed, as I noted earlier, Mr Licardy accepts that the Property will have to be sold at some time in the future.

Nonetheless, it may be that there will be developments which should lead to the making of an order, the effect of which would be to keep Mrs Radin and the two children in the Property for a longer period of time than I propose. On the evidence before me today, however, I cannot fairly do that. 

I think that the proper approach today is to make an order based on what might be called the “general” consideration that Mrs Radin should be allowed a period of time sufficient to enable her and the children to obtain alternative accommodation, while reserving liberty to her to apply, by notice of motion supported by affidavit, if an extension of time is to be sought. Of course, this is not to invite the making of such an application or to indicate that an extension of time would or would not be likely to be granted. There may, however, be developments between now and 30 June which would justify some extension.

The orders which I make are as follows:

(1)I grant judgment to the cross-claimant against the cross-respondent on the second cross-claim for $711,011.06.

(2)I give to the cross-claimant judgment for possession of the whole of the land known as 11 Appian Way, Burwood, being the whole of the land described in folio identifier 1/304076.

(3)I grant to the cross-claimant liberty to issue a writ of possession.

(4)I direct that any writ of possession issued pursuant to order (3) lie in the Court office and not be executed prior to 30 June 1997.

(5)I reserve liberty to the cross-respondent to apply on notice of motion supported by affidavit for an extension of the period referred to in order (4).

(6)I order the cross-respondent to pay the cross-claimant’s costs of the motion brought by notice of motion filed on 16 April 1997.

I certify that this and the preceding 7 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated:8 May 1997

Heard:       30 April 1997

Place:       Sydney

Decision:     30 April 1997

Appearances:  Mr J E Marshall of counsel instructed by Abbott Tout appeared for the cross-claimant (applicant on the motion).

Mr R A Licardy, solicitor, of Richard A Licardy & Co appeared for the cross-respondent (respondent to the motion).