HIS HONOUR: This is an application by Steven Murabito (Mr S Murabito), Lila Stojcevski (Ms Stojcevski) and Lupco Stojcevski who are currently the occupants of property in Wymston Parade, Five Dock.
The application is made in the form of an Amended Notice of Motion dated 9 September 2022 in proceedings in which the plaintiff is the mortgagee of the property.
Mr S Murabito and Ms Stojcevski are the first two defendants to those proceedings.
In September 2021, on the application of the plaintiff, Darke J entered what I am informed is a default judgment against the defendants in favour of the plaintiff for possession of the property.
Judgment was also entered for a monetary amount said to be in the order of $74,000.
I have been informed that consequent upon the default judgment an application to set aside the default judgment was made by, perhaps both defendants, but at least Mr S Murabito on 6 October 2021.
Darke J, I am informed, declined to do so in July 2022 and the judgment remains.
Subsequently a writ of possession issued and on 29 July 2022 the Office of the Sheriff sent or delivered a notice to the occupiers of the property to vacate the property.
The notice, which is Annexure A to the affidavit of Ms Stojcevski sworn 7 September 2022, discloses that the Sheriff intended to enter the land and take possession of the land and gave notice to the occupiers that they must vacate the property before 9.00am on 8 September 2022.
It may be observed that from the date of the notice until the time of proposed attendance at the property there is a period of approximately six weeks.
On 7 September 2022 after 4.00pm I was approached ex parte by Mr A Ang, a solicitor on behalf of the defendants, seeking to urgently stay the writ of possession in respect of the property.
Having regard to the lateness of the application, and the fact that I ascertained from the affidavit of Ms Stojcevski that a Notice to Vacate indicated that the Sheriff would attend the following morning at 9.00am, I sought from the applicants an undertaking as to damages and on the basis of Mr S Murabito giving an undertaking as to damages I stayed the writ for a short period of time until 5.00pm today and stood the matter over to 10.00am today to be dealt with.
Australian Mortgage Finance Services Pty Ltd v Murabito [2022] NSWSC 1226 | Case summary | Zoe
At the time that I made that order, in asking Mr S Murabito if he understood what the usual undertaking as to damages is, as set out in r 25.8 of the Uniform Civil Procedure Rules 2005 (NSW), he made it crystal clear to me that he did understand that usual undertaking.
Time for service of the Notice of Motion and the affidavit was abridged.
This morning Mr Palmer, solicitor, appeared before me on behalf of the respondent.
Mr Fermanis, of counsel, appeared on behalf of the applicants.
In the context of dealing with the contested matter, I was only then made aware of the fact that Mr S Murabito and Ms Stojcevski are undischarged bankrupts.
I pause to note that that was a material matter that ought to have been disclosed to me on an ex parte application for orders to stay the writ of possession.
I have been informed that Mr Ang, solicitor, who appeared on that occasion with Mr S Murabito in Court, did not know that the defendants were bankrupt.
I regard the non-disclosure of the fact of the bankruptcy of the defendants, more particularly of Mr S Murabito, the person who solemnly gave the undertaking as to damages, as a very serious matter.
It ought to have been disclosed to me as it was clearly a material consideration as to whether I would stay the writ of possession even for a short period of time.
This morning Mr Fermanis sought leave to file in Court and move on an Amended Notice of Motion which seeks the following orders:
1. This motion be heard and determined urgently.
2. Forthwith stay the Writ of Possession dated 29 September 2021 and Notice to Vacate dated 29 July 2022 issued by the Sheriff in this proceeding until determination of this application.
3. Stay the Writ of Possession dated 29 September 2021 and Notice to Vacate dated 29 July 2022 issued by the Sheriff in this proceeding for 28 days.
4. Alternatively extend time for compliance with the Notice to Vacate dated 29 July 2022 until 28 days after the making of this order.
5. Such other orders as the Court sees fit.
I gave leave for the Notice of Motion to be filed in Court upon the undertaking of Evangelos Patakas, solicitor, to pay the applicable filing fee in respect of the Notice of Motion.
The writ of possession referred to in Orders 2 and 3 of the Amended Notice of Motion dated 29 September 2021 is no longer the relevant writ of possession. It is agreed between the parties that the relevant writ is a writ dated 18 July 2022 which was entered on 21 July 2022.
On the application, Mr Fermanis read in support of the Amended Notice of Motion the affidavit of Ms Stojcevski sworn 7 September 2022, the affidavit of Ms Stojcevski sworn 9 September 2022, the affidavit of Mr S Murabito sworn 7 July 2022 and the affidavit of Mr S Murabito sworn 9 September 2022.
The affidavits were read without objection, although to be fair Mr Palmer did indicate that the affidavits contained material which were not in appropriate evidentiary form.
There is a preliminary question as to the standing of the applicants to make this application.
Mr Fermanis accepted that on the making of the sequestration orders, which were made in respect of Ms Stojcevski on 24 November 2021 and in respect of Mr S Murabito on 7 April 2022, the beneficial interest in the property, of which they are the registered proprietors, by force of the provisions of s 58 of the Bankruptcy Act 1966 (Cth) vests in the trustee of their bankrupt estates.
Mr S Murabito and Ms Stojcevski remain undischarged bankrupts.
The effect of the property being vested in the Trustees in Bankruptcy has a number of consequences.
Neither Mr S Murabito nor Ms Stojcevski have any right to possession of the property, at least not as at the date of this application, which property is vested in the Trustee in Bankruptcy.
There is no evidence before me that the Trustee in Bankruptcy is aware of this application being made.
The effect of the judgment for possession and the vesting order is such that none of the applicants have any right, other than by arrangement with the plaintiff or Trustee in Bankruptcy, to remain in the property.
The applicants might, for example, have some licence perhaps from the Trustee to remain in the property.
There is no evidence before the Court that any such licence has been given to the applicants.
There is, accordingly, no legal basis demonstrated for the applicants to be entitled to occupy or remain in the property.
Further, there is a question as to whether the defendants have any standing to bring this application. Section 60(2) Bankruptcy Act provides:
"An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action."
The word "action" means any civil proceedings whether at law or in equity: s 60(5) of the Bankruptcy Act.
Mr Fermanis sought to distinguish between the standing of the applicants as defendants in the proceedings to bring the motion for a stay and their standing as simply occupants of the property.
The Amended Notice of Motion appears to emphasise the fact that the applicants seek the orders not as defendants in the proceedings nor even as registered proprietors or former registered proprietors of the property, but rather purely in their capacity as occupants of the property.
Mr Fermanis drew to my attention the judgment of Justice Johnson in GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889 as setting out principles relevant to factors to stay the execution of a writ of possession.
In particular, Mr Fermanis referred my attention to [13(b)] of the judgment which indicates that:
"where the Defendant indicates that the loan is to be refinanced, proof of steps undertaken to refinance will be required on the application."
I pause to note that having regard to the bankruptcy of the defendants even if the amount outstanding of the judgment, which according to the affidavit of Mr S Murabito of 9 September 2022 is said as at yesterday to total a sum of $79,421.38, were to be paid, that of itself would not entitle the defendants to possession of the property.
I am informed by Mr Palmer that the amount of the judgment debt is in any event not the amount due under the loan.
In the exigencies of the urgent application before me, Mr Palmer was unable to indicate the precise amount of the amount due under the loan.
Mr Fermanis drew my attention to a further passage in the judgment of Johnson J at [21] indicating that a stay may be sought on hardship grounds.
That passage states as follows:
"A stay may be sought on hardship grounds. The Defendant may contend that there will be hardship to him or her and other family members if the writ is executed and they are removed from the property. It must be kept in mind that the Defendant and other occupiers of the property (Part 6.8 Uniform Civil Procedure Rules) will have been served with originating process so that the consequences which may flow from the proceedings would have been notified to them. Of course, it may be that, in the absence of legal advice, the precise consequences may not be clear to a Defendant and other occupiers. It may also be that the Defendant and his or her family may have not confronted the reality of the situation at an earlier time."
The hardship that is put forward is said to be the health conditions of the defendants, their medical circumstances. The affidavit of Mr S Murabito sworn 9 September 2022 sets out, at [6] to [10], details of what he says are various medical and psychological problems resulting from a brain operation he had of a tumour in about 2007 and injuries he suffered in October 2021 because of an assault.
Part of the evidence he has provided is a medical report of a Dr Shahana Afroze dated 6 September 2022 directed to the Local Magistrate's Court in relation to what Mr S Murabito describes as "my criminal matter".
The report indicates that Mr S Murabito has developed PTSD, anxiety and depression as a result of the assault, insomnia as well, and he is seeing a psychologist and is on Lexapro, Valium and Melatonin.
It further indicates that Mr S Murabito suffered brain seizures in March 2020, secondary to earlier injuries.
The concluding paragraph of the first page of the report states that Mr S Murabito is not able to deal with the Court matter due to his cognitive impairment and effect of pain medication on his cognition and the same with his mood affecting his cognitive ability.
It is entirely unclear to me at the moment whether it is asserted that Mr S Murabito is a person under an incapacity such that he would require a tutor for the purpose of any application in any event.
The matter was advanced to me on 7 September and today on the basis that no tutor was appointed for Mr S Murabito nor proffered.
I do not propose to second-guess that.
I proceed on the basis that Mr S Murabito has sufficient capacity to instruct his solicitors and counsel who appears before me today.
In the affidavit of Ms Stojcevski sworn 9 September 2022 she sets out details of her medical circumstances at [13] to [16].
She states that in February 2022 she was diagnosed with t-cell lymphoma.
On 8 August 2022 her GP, Dr Nilukshi Siribaddana referred her to a specialist to obtain a second opinion about her cancer.
She states that her medical condition has put demands on her by virtue of the need to consult doctors and to implement her treatment plan.
At [17] to [20] of her affidavit she sets out what she states were efforts to find alternative accommodation.
She states that she has been making enquiries for rental accommodation before 4 August 2022 and immediately following her receipt of the Notice to Vacate which although dated 29 July 2022 she indicates was received by her on 4 August 2022.
The affidavit sets out her attempts to secure accommodation.
One of the properties that she has enquired about is a four bedroom home in Canada Bay.
She states that Mr S Murabito and she were told by the agent that they were successful in their application to lease that property from 30 September 2022 at the latest.
Mr Fermanis drew my attention to [22] of the affidavit of Mr S Murabito sworn 9 September 2022 indicating that Mr S Murabito has sought assistance from his brother, John Murabito, who is said to be a Mercedes car sales manager, to provide he and Ms Stojcevski money to repay the judgment sum, interest and costs.
A copy of that letter is Annexure L to the affidavit. The letter is dated 8 September 2022.
The letter is in the following terms:
"OFFER TO FINANCE
I confirm that I am prepared to make the following sums available to you and Lilly to facilitate the payment of your and Lilly's judgment debts to Australian Mortgage Finance Services Pty Ltd:
1. The sum of $80,000 to be made available in 10 days from today; and
2. A sum up to $100,000 for the costs payable under the judgment subject to increase if necessary when you find out what the sum is required, to be made available in twenty days from today.
[signed]
John Phillip Murabito"
The absence of any evidence from the different Trustees in Bankruptcy for each of the defendants is a relevant consideration.
Affidavits of some substance have been read on the application which clearly must have taken some time to prepare.
Nonetheless, the proffer of finance from Mr John Murabito has only been provided in the form of a letter annexed to the affidavit of Mr S Murabito.
It is an assertion of some availability of funds for the applicants. However, the fact it was an annexure rather than in affidavit form deprived Mr Palmer of any ability to question Mr John Murabito regarding his ability to provide such finance.
There is also a serious question as to whether the application can properly be heard in any event without notice to the separate Trustees in Bankruptcy.
On 7 September 2022 I stayed the writ on the basis of the undertaking of Mr S Murabito as to damages.
I have already commented that there was a material non-disclosure to me of the fact of his bankruptcy.
No attempt has been made to indicate the extent of the creditors, secured or otherwise, apart from the plaintiff who have proved in the respective estates of the defendants.
(Parties addressed on the Court's power to extend time for compliance with the notice to vacate.)
I am not persuaded that the applicants, or any of them, have any legal right to remain in possession of the property.
I am not persuaded that even if the amount of the judgment debt was paid that that fact of itself would entitle the applicants to remain in the property.
In the above circumstances, I dismiss the Notice of Motion.
In dismissing the Notice of Motion, in discussion with Mr Palmer and Mr Fermanis, who appears on the application before me, I have been informed by Mr Palmer that if the Notice of Motion is dismissed Ms Karunya Vetcha from his office will contact the Sheriff and ask that no action be taken on the Notice to Vacate this afternoon or over the weekend nor prior to 4.00pm on Monday, 12 September 2022.
In those circumstances the Notice of Motion is dismissed with costs.
[2]
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Decision last updated: 13 September 2022