St George Bank - a Division of Westpac Banking Corporation v Doueihi

[2015] NSWSC 709

Supreme Court

New South Wales

Medium Neutral Citation:	St George Bank – A Division of Westpac Banking Corporation v Doueihi [2015] NSWSC 709
Hearing dates:	4 June 2015
Date of orders:	04 June 2015
Decision date:	04 June 2015
Jurisdiction:	Common Law
Before:	Davies J
Decision:	The Defendant’s application to stay the auction is dismissed
Catchwords:	MORTGAGES – rights of the mortgagee – sale of security property – application to postpone auction by mortgagor – conditional offer of finance to person said to be purchasing on mortgagor’s behalf – conditions unfulfilled – no other offer to redeem mortgage – application refused
Cases Cited:	Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
Category:	Procedural and other rulings
Parties:	St George Bank – A Division of Westpac Banking Corporation (Plaintiff) Peter Doueihi (Defendant)
Representation:	Counsel: K Fraser (Plaintiff) In person (Defendant) Solicitors: Kemp Strang (Plaintiff) Unrepresented (Defendant)
File Number(s):	2013/281267

Judgment

1. The Defendant applies effectively to stay the holding of an auction by the Plaintiff of a property at 1/24A Batty Street, Rozelle. Proceedings were commenced by the Bank on 17 September 2013 and default judgment was entered against the Defendant on 23 April 2014.

2. The history of the matter since that date is summarised in a judgment of Hall J of 9 January 2015 when the Defendant had applied to stay execution of a writ of possession for the third or fourth time. The writ was first due to be executed on 18 September 2014. Subsequent to Hall J's judgment where he refused to stay the execution of the writ the Defendant made a further application to Fullerton J on 9 January 2015, but that application was also refused.

3. The eviction went ahead and the Bank is now proposing to auction the premises on Saturday 6 June 2015. The Defendant seeks to have the auction put off because a close friend of his, one Mr Corrado Fedeli, is said to have obtained finance to purchase the property effectively for the benefit of the Defendant and his family. The only material I have in relation to this is first, a letter from Sydney Wyde Mortgage Management of 22 May 2015 to Mr Fedeli, care of South Western Financial Services and an email from South Western Financial Services to the Plaintiff's solicitors dated 27 May 2015. South Western Financial Services appears to be a broker.

4. The letter from Sydney Wyde Mortgage Management is expressed not to be a formal offer by the lender to enter into the loan agreement. It appears to be at least, a preliminary or a conditional offer to Mr Fedeli to lend him $1.5 million to assist with the purchase of an investment property which is said to be costing $1.25 million. The special conditions in the letter are that there be satisfactory valuations of the property to be purchased at $1.25 million and another property at $900,000 which is not specified.

5. However, the email from South Western Financial Services says that Mr Fedeli owns a property at 6/30-32 Melrose Parade, Clovelly valued at $1 million, and which is said to be unencumbered. It may be that the reference to a valuation for $900,000 is a reference to that property. There is no evidence that valuations have been obtained, as are required by Sydney Wyde Mortgage Management.

6. Another condition of the loan is what is described as an MFAA assessment which is to be confirmed by the borrower prior to settlement confirming that the loan has been assessed on what is said to be “her” personal circumstances, so that the loan is not unsuitable for her circumstances. I will assume in the Defendant's favour that the reference to "her" is simply an error. There is nothing to show that this loan has, in fact, been approved. However, even if it were approved, it would not provide any basis for postponing the auction. If the loan has been approved or has been conditionally approved, Mr Fedeli is perfectly free to bid for the property at the auction on Saturday.

7. The email from the broker says that Mr Fedeli has half a million dollars in cash savings. If that is correct, he would be in a position to bid at the auction and provide a 10% deposit for the purchase of the property. When I suggested to Mr Doueihi that Mr Fedeli was in a position to do that without postponing the auction, he expressed concern that the property would go for too high a price, and he said he just wanted his house back, and for an end to all of these proceedings.

8. Ordinarily, if it is suggested that an auction should be postponed, it would be necessary for the party seeking such a postponement to pay the extent of the mortgage or provide some form of security for it: Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161. All that is being suggested in the present case is that there has been a loan approved to Mr Fedeli who is able to purchase the property. The evidence does not go that far. I also have concerns that Mr Fedeli appears to have informed the lenders that the price to purchase the property is $1.25 million. There is no evidence from Mr Fedeli that he is prepared to purchase the property for whatever price to which it is knocked down at auction.

9. When this matter was before Hall J in January, the amount outstanding was said to be in excess of $1.53 million. The Defendant has tendered a statement from the Bank for the statement period 1 to 31 March 2015. As at 31 March, the balance was now said to be $1,414,518.45. However, on that statement, the statement has under the words "amount payable immediately" an amount of $1,527,238.88. That latter figure is more consistent with the amount that was said to be owing on the earlier occasion, although Mr Doueihi informed me that he has paid about $30,000 before he was evicted from the property. Whether that pre-dated the application to Hall J or not is not clear.

10. It does not seem to me that the Defendant demonstrates any basis upon which the auction should be postponed. He or Mr Fedeli, by the arrangement the Defendant has with Mr Fedeli, has the option of bidding at the auction to purchase the property if that is what he desires to do. Although no Notice of Motion has been filed in this matter, the application to stay the auction is dismissed.

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Decision last updated: 16 June 2015