Bank of Queensland v Balasingam [2015] VSC 536

2 The defendant's loan account has been in arrears from time to time since 2 September 2009. On 16 May 2011, the plaintiff obtained default judgment for possession of the property. Warrants for possession were issued in favour of the plaintiff on 14 June 2011 and 7 June 2013. Execution of these warrants was postponed, often on more than one occasion, on the basis of arrangements entered into between the parties for refinancing or otherwise dealing with the defendant's default but each of these arrangements was ultimately breached.

3 Most recently on 9 July 2015, another warrant for possession was issued. On 1 September 2015 the Sheriff's Office served on the defendant a notice to vacate the property before 25 September 2015. The defendant responded by applying to the court for a stay of execution of the judgment. That is the application before the court and the stay is sought pursuant to Rule 66.16.

4 It is well established that the court has a wide discretion when invited to stay the execution of a judgment. It is required to take into account all of the circumstances of the case, not being bound by other decisions on different factual circumstances. It is selfevident that the starting point is that the party who has obtained a judgment is entitled to have it enforced without further delay. The court should focus on special circumstances that go to the question of the enforcement of the judgment, rather than the judgment's validity, in determining whether to grant a stay.

5 In essence the critical question on the application is whether the defendant has established that there are special or exceptional circumstances that would justify the exercise of a discretion in his favour. Before turning to that question I should note some further matters.

6 First, a warrant of seizure and sale was lodged against the title to the property by Thayananthan Balasingam in March 2015. The defendant is in breach of an instalment order that had stayed the execution of that particular warrant. As at 24 September 2015, the Sheriff proposed, acting under that warrant, to list the property for auction on 22 October 2015.

7 Second, a collections agent, acting on behalf of the municipal council that obtained judgment against the defendant for outstanding rates, advises that the municipal council may exercise its rights under s.181 of the Local Government Act 1989 to sell the property. The amount due to the municipal council is $7,535.59.

8 Third, the title to the property is subject to a second registered encumbrance, a mortgage in favour of Mango Media Pty Ltd. During the hearing, I was informed by counsel that the loan agreement secured by that mortgage has been paid out or settled with the mortgagee and that the defendant is entitled to a discharge of that mortgage.

9 The amount that was sought under the earlier warrant of seizure and sale was approximately $45,000. Following some repayment the current outstanding balance due is approximately $25,000. Accordingly it appears that the defendant has other debts beyond what is owed to the plaintiff in the vicinity of $32,500 to $33,000.

10 An estate agent, in a recent appraisal of the property, assessed its value to be in the range of $430,000 to $470,000.

11 I am prepared, in the circumstances, to infer that a lender may well obtain a valuation, sufficient for its purposes, of $420,000 and that a loan to the defendant by way of refinancing may be available in the vicinity of $320,000, perhaps a little more, although due allowance needs to be made for fees and commission which would no doubt be deducted from any advance.

12 The defendant explained that the difficulties that he has experienced in servicing his debt to the plaintiff were associated with a number of misfortunes that have befallen him. His marriage has broken down. He has suffered from depression and has also suffered a spinal injury in his lower back that reduced his capacity for employment. He also has an aged parent who lives next door to him. He has obligations specifically to care for his father who suffered a stroke in 2014 and is also a longtime sufferer of diabetes with kidney function issues. As a result, his parents are dependent upon him for support for transport, translation and dealing with daytoday health problems.

13 A certificate from the James Street Medical Centre confirms the defendant's issues in relation to his back and that he has struggled with marriage breakdown and financial difficulties. Further, the certificate confirms that the defendant is caring for his aged parents. Mr Satkurunathan, a director of Dushan Homes Pty Ltd, certifies that the defendant has been working for his company as a supervisor since 1 March 2015.

14 The plaintiff is currently owed the sum of $6,322.32 by way of arrears as at 22 September 2015. The next monthly payment of $1,551.31 is due today and I am instructed by counsel for the defendant that that monthly payment is being made today. Further, the defendant states that he is in a position to pay the outstanding arrears by 30 September 2015, which is only a few days hence.

15 On 23 September 2015 the defendant lodged an application for finance with Better Mortgage Management Pty Ltd, a copy of which is in evidence. By this application the defendant states that he has a gross annual salary of $60,000 and that his current monthly financial position is an after tax income is $4,000, with his expenses being his loan repayments $1,900, and his living expenses $700, creating a surplus of $1,400. He does not have an indication at this stage from Better Mortgage Management Pty Ltd that an unconditional loan can be made available to him, but his counsel urged me to regard the information provided in the application as sufficient to warrant the inference that the mortgage brokers will be able to obtain finance to enable him to refinance the plaintiff's debt.

16 The defendant also offered, as indicative of his motivation to commit to this particular repayment plan, that he would undertake to the court to repay the arrears outstanding by 30 September 2015, that he would make his monthly repayments due to the bank between now and settlement of the mortgage refinance, and that he would use his best endeavours to refinance the loan as expeditiously as he can.

17 On the one hand, it is likely that the plaintiff will not find great comfort in further assurances from the defendant that are coupled with an added obligation to the court. The bank is not likely to be motivated to press for punishment for contempt of the undertakings if that were to occur. The plaintiff indicated it is best protected through its judgment, its warrant for possession and generally its security. It is hardly surprising that the plaintiff has this attitude.

18 Nevertheless, it can be observed that there is a long history between these parties of the plaintiff not enforcing the default judgment for possession that it obtained more than four years ago. This is the third warrant for possession that has been issued in favour of the plaintiff.

19 The plaintiff is concerned that a stay of execution for two months may interfere with its Christmas moratorium on enforcement activity which would cause further delay. The plaintiff is also concerned that there have been several indulgences given to the defendant over a period of nearly six years. Its third principal area of concern is the existence of the other debts owed by the defendant to other persons, and the prospect of an auction by the Sheriff.

20 In all of the circumstances, I would be satisfied that there are exceptional circumstances that warrant granting the defendant a stay if the defendant had produced an unconditional letter of offer for refinance. The defendant falls short of that position by having effectively, at the 11th hour, applied to a broker for refinance, but on examination of that application, it seems me that it would be appropriate, in the circumstances, to grant a limited stay of execution to enable the defendant's refinancing application to be processed. That is because if the defendant does obtain, within a very short period of time, an unconditional letter of offer and otherwise behaves as he would if he gave the undertakings that he is prepared to give to the court, then the plaintiff will obtain the satisfaction of its debt in the most expeditious way. The prejudice to the plaintiff will flow from delay if this be no more than another expression of hope by the defendant that he can regularise the position.

21 Bearing in mind in particular the personal circumstances of the defendant particularly the fact that the defendant now has a job and is servicing the loan, I consider that a stay for a short period, namely 14 days, in order for the defendant to obtain an unconditional offer of finance, is an appropriate balancing of the relevant considerations that have been raised by the parties.

22 In respect of the auction it is not at all clear that the Sheriff has secured the opportunity for vacant possession to enable that auction to go ahead, particularly if there is a stay granted on the plaintiff's warrant of possession. In any event, under the orders that I propose to make, the position will be clear well before 22 October 2015.

23 For these reasons, the defendant by his counsel having undertaken:

(a) to use his best endeavours to refinance the loan ("the loan") outstanding to the plaintiff and secured on his property at 11 Suzanne Street, Dandenong Vic 3175 as soon as practicable;

(b) to repay to the plaintiff the loan repayment arrears of $6,322.32 by 30 September 2015; and

(c) to continue to make to the plaintiff on time the ongoing monthly loan payments in the sum of $1,551.31 per month until the refinancing of the loan;

I will order that the execution of the plaintiff's warrant number SP150031688 is stayed until 9 October 2015 or further order and subject to the defendant filing and serving an unconditional letter of offer for a loan in the amount of at least $320,000 by 9 October 2015, the stay is extended until 8 November 2015.