Suncorp-Metway Limited v Gonfanon Pty Limited
[2014] NSWSC 1054
•25 July 2014
Supreme Court
New South Wales
Medium Neutral Citation: Suncorp-Metway Limited v Gonfanon Pty Limited [2014] NSWSC 1054 Hearing dates: 25 July 2014 Decision date: 25 July 2014 Jurisdiction: Common Law Before: Hamill J (as Duty Judge) Decision: (1) The writ of possession of property known as 232 Cornwallis Rd Cornwallis being Lot A in Deposited Plan 85773 be stayed up to and including until 5pm on Friday August 22nd;
(2) The validity of the writ in regard of the premises at 232 Cornwallis Rd Cornwallis be extended until 5pm on Friday 12 September 2014;
(3) The applicant Andrew Brown pay the costs of the plaintiff of and incidental to this notice of motion;
(4) Mr Brown file within fifteen days an affidavit as to (a) the current status of the offer of finance by the St George Bank (b) the readiness of the St George Bank to complete that loan arrangement. There is to be annexed to the affidavit documents proving the current status of and details of the deposit said to have been paid to Rural Securities Holdings.
(5) I note the undertaking of the liquidator Mr Wiley that he will provide a report into the transactions between Mr Brown and the corporation in liquidation Rural Securities Holdings Pty Ltd to both parties, which is to say the plaintiff and Mr Brown, within fifteen days;
(6) That any future application for stay of execution of a writ of possession not be entertained unless the plaintiff or its legal representatives have been notified within forty-eight hours of that application being made.
(7) I grant liberty to the parties to apply to the duty judge on forty-eight hours' notice.
Catchwords: CIVIL LAW - MORTGAGES - claim by mortgagee for possession of land - application for stay of execution of writ of possession - multiple applications for stay - application by current tenant - change of circumstances -hardship - limited role of hardship - grounds for relief Cases Cited: Aon Risk Services Australia Ltd v ANU (2009) 239 CLR 175
GE Personal Finance v Smith (2006) NSWSC 889Category: Procedural and other rulings Parties: Suncorp-Metway Limited (Plaintiff)
Gonfanon Pty Limited (Defendant)Representation: Counsel:
A Brown (In pers.)(Tennant)
G.A.F Connolly (Plaintiff)
Solicitors:
A Brown (In pers.)(Tennant)
M Reynolds (Plaintiff)
File Number(s): 2011/334420 Publication restriction: Nil
EX TEMPORE Judgment
HAMILL J: Before the court is an application by Andrew Brown to stay the execution of a writ of possession in respect of a property known as 232 Cornwallis Rd Cornwallis being Lot A in Deposited Plan 85773. The notice of motion seeks the stay to continue until 29 August 2014, which is to say a little over one month. The plaintiff Suncorp-Metway Ltd opposes the granting of the stay.
The circumstances in which the application is made are not the typical kind which come before the duty judge in this Court regularly. That is because Mr Brown is not the registered proprietor of the property in financial difficulty but rather is a potential purchaser of the property, the person from whom he seeks to purchase it having gone into liquidation.
The problem for Mr Brown and his application today is manifest in an affidavit of Michael Reynolds sworn 24 July 2014 in which he sets out with commendable detail and balance the history of this case. The matter has a history of writs of possession and scheduled evictions going back to December of 2011. An eviction was scheduled on 29 May 2012, 6 September 2012 and 22 November 2012 but on each of those occasions, for reasons which are not particularly relevant (other than to establish what I consider to be the unquestioned goodwill of Suncorp-Metway), the eviction was cancelled. They were cancelled at the request of Suncorp-Metway itself.
A second writ of possession was made on 24 December 2013. There were evictions scheduled for 12 March 2013. That was stayed on the application of Mr Brown as I understand it. There was a fifth scheduled eviction in on 23 May 2013. As I understand it Suncorp-Metway again cancelled that eviction. A sixth eviction was scheduled for 26 July 2013.
I could go on and on in recounting the history of the matter. What I can say in summary is that by the time the matter comes before me there have been thirteen scheduled evictions and seven stays of execution of those evictions.
This Court is confronted in many cases with repeated applications for stay and they are almost universally attended with factual circumstances which engender great sympathy in the judges who are called upon to exercise the discretion as to whether or not to stay the execution. This is a similar case in the sense that Mr Brown can and does point to circumstances of hardship which engender legitimate sympathy. However, my understanding of the law in this area is that whilst matters of hardship might be taken into account in the balancing exercise they are not in and of themselves matters which justify the grant of a stay of the execution of a judgment.
As Mr Connolly who appears for the plaintiff points out corporations are entitled to just as much fairness in the exercise of discretion such as this as an ordinary person. He refers me to Aon Risk Services Australia Ltd v ANU (2009) 239 CLR 175. In making that submission he is entirely correct.
As I have already said Mr Connolly's client has conducted itself, and this is acknowledged by Mr Brown, with a good deal of patience and compassion for his circumstances. What I really need to consider is whether the matter fits into any of the recognised categories of case where the court is generally convinced that it should exercise its discretion in favour of an applicant for relief of this kind.
An oft quoted case in this area is GE Personal Finance v Smith (2006) NSWSC 889 in which Johnson J set out at paragraphs 15 through 20 three categories of case in which relief is sometimes granted. The first is the category where a debtor subject to potential eviction seeks to litigate the substance of the debt, in other words seeks to have the original judgment set aside thereby undermining the very judgment which is sought to be enforced. That is not this case. The second category is where a defendant, generally a mortgagor, seeks to refinance so as to discharge the debt. Whilst that is not precisely this case, this case really does in a general sense fall into that category. The third category is where a mortgagor usually seeks to sell the property and the sale of the property will liquidate the debt. That is not this case.
As I have said, the case is somewhat unusual. In view of the history of the matter and the multiple previous applications for stay it would be very unusual for me to accept the plaintiff's somewhat belated application to stay the execution of the writ. I have come to the conclusion in spite of that history that I will give Mr Brown what I consider is almost inevitably the last opportunity to enter into a finance arrangement in order to satisfy Suncorp-Metway's debt, and the reasons that I have come to that conclusion in spite of the history very cogently articulated both in the affidavit of Mr Reynolds and the submissions by Mr Connolly are these.
The amount of the debt is $1,415,423.20. There is in evidence which was not subject to cross-examination an opinion by Mr Brown, who it might be thought is in a reasonable position to hold it, that the value of the property exceeds two million dollars. After I made an inquiry as to why there was no evidence as to the value of the property and during the short adjournment taken in the course of the hearing a valuation of sorts was provided to me and became Exhibit A from Brett Davis, a senior valuer, and that relates to a valuation that he had done in 9 April 2013 where the value was said to be $1.85 million. The value of the property would seem to be sufficient that putting off the day of reckoning, if that is all I am doing, will not ultimately be to the prejudice of the plaintiff.
If it is the case that any potential settlement of the debt with the plaintiff falls through; and I am almost persuaded by Mr Connolly's submission that the fact that it has fallen through so often in the past would lead to an inference that it is likely to; if it does, the sale of the property if it reaches the kind of figures in the valuation and estimate of Mr Brown will cover the amount that the plaintiff is currently owed.
The evidence is not very satisfactory in respect of the current status of any loan agreement which Mr Brown has with any financial institution, however the Westpac Banking Corporation has provided what appears to be an unconditional letter of offer whereby it will lend him about the sum that is currently indebted to the plaintiff, in fact a little bit more than that, $1,440,000. That is an old offer but Mr Brown says, and there is nothing really to contest it, that Westpac remains in a position to offer him such a loan.
I have to say if that was all there was I would be disinclined to grant the stay. However there has been a circumstance which has changed which leads me to the conclusion that I should exercise my discretion favourably to the applicant. That circumstance is that it would appear, and certainly Mr Brown asserts, that each and every time his attempts to purchase the property have fallen through it was a result of conduct of Rural Security Holdings from whom he was seeking to purchase the property. The position in relation to that company has now changed. It is now in liquidation and appearing today to assist the court is a Mr Bowles who appears on behalf of the liquidator. He says quite candidly that he is not in a position at this moment to tell us the position with respect to any moneys owed to andby Rural Security Holdings, its financial position and the status of this transaction in respect of that corporation in liquidation. However he tells me, and I accept it, that the liquidator (Mr Wiley, chartered accountant) will be in a position within two weeks to provide a report which will make matters clearer and should put both the Court and the plaintiff in the position of knowing whether or not there is any realistic likelihood that Mr Brown will be in a position to complete a transaction which will satisfy the debt owed to the plaintiff. That is a change of circumstances which really has to be taken into account in assessing what is otherwise an extraordinary chronology and would ordinarily lead a judge to refuse to grant the stay.
It is a circumstance that has persuaded me along with the uncontested valuation of the property, the amount of the debt and what appears to be an extant offer of finance from Westpac to make an order staying the execution of the writ and I make that order.
The orders I make are:
(1) The writ of possession of property known as 232 Cornwallis Rd Cornwallis being Lot A in Deposited Plan 85773 be stayed up to and including until 5pm on Friday August 22nd;
(2) The validity of the writ in regard of the premises at 232 Cornwallis Rd Cornwallis be extended until 5pm on Friday 12 September 2014;
(3) The applicant Andrew Brown pay the costs of the plaintiff of and incidental to this notice of motion;
(4) Mr Brown file within fifteen days an affidavit as to (a) the current status of the offer of finance by the St George Bank (b) the readiness of the St George Bank to complete that loan arrangement. There is to be annexed to the affidavit documents proving the current status of and details of the deposit said to have been paid to Rural Securities Holdings.
(5) I note the undertaking of the liquidator Mr Wiley that he will provide a report into the transactions between Mr Brown and the corporation in liquidation Rural Securities Holdings Pty Ltd to both parties, which is to say the plaintiff and Mr Brown, within fifteen days;
(6) That any future application for stay of execution of a writ of possession not be entertained unless the plaintiff or its legal representatives have been notified within forty-eight hours of that application being made.
(7) I grant liberty to the parties to apply to the duty judge on forty-eight hours' notice.
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Decision last updated: 05 August 2014
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