Barclay Finance Pty Ltd v Manning

Supreme Court of NSW|2017-07-26|Before: Lonergan J

Judgment

On the afternoon of 26 July 2017, the first defendant requested an urgent hearing of a notice of motion seeking a stay of writ of possession. In support of the application, he relied upon his affidavit sworn 26 July 2017, a letter from his solicitors to a real estate agent, Robert Todarello at Northside Realtors dated 26 July 2017, and a proposed contract for sale of the a property in Naremburn ("the Property"), which is the subject of the writ of possession.
The Property is the home of the defendants and their son who, relevant to this application, is in year 12 and was about to start his trial exams on 31 July 2017.
The background to this application is that a notice to vacate the property had been served on 19 June 2017 pursuant to the processes of this court, and that was to be enforced at 10:30 am on 27 July 2017; that is the morning following this application being brought before me as Duty Judge.
Ms Young of counsel was able to appear at short notice on behalf of the plaintiff and assisted with the background to the application and made helpful oral submissions.
I formed the view, given the material in the affidavit and the apparent arrangements made for the sale of the property together with discussion and cooperation between counsel for the parties, that the writ should be stayed on certain conditions. I made various orders which were entered with written reasons to follow given the obvious urgency of the application.

Legal principles

The principles relevant to determining whether a stay of the execution of a writ of possession are summarised by Johnson J, the former Possessions List Judge in GE Personal Finance Ltd v Smith [2006] NSWSC 889. As observed by McCallum J in Westpac Banking Corporation v Diagne [2014] NSWSC 1623 at [3], the Smith decision has been applied on many occasions since and the principles are now set out, in effect, in the Practice Note applicable to Possessions List matters. The three bases that need to be advanced in support of a stay application are: 1. That there is a defence available; or 2. That there is a proposal for refinance; or 3. Where the defendant has indicated that the subject property is to be sold.
As observed by his Johnson J in Smith at [20], …It might be thought that the orderly preparation and presentation of the property for sale, with the Plaintiff and Defendant co-operating in this regard, would maximise the prospect of a favourable sale price. This would serve the interests of the Plaintiff and the Defendant. A Defendant may encounter difficulties on a stay application if the decision to sell the property, and to make necessary arrangements for this to be done, is left until the last minute when the Writ of Possession is about to be executed.
In Smith, Johnson J also made reference to a potential further ground, namely hardship: [21] 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.

Determination

It is apparent from the first defendant's affidavit that he had not faced the reality of his situation until 25 July 2017. He delayed evaluating his options until the very last minute. It is evident that from at least mid-April 2017, he was fully aware of the Plaintiff's proceedings and the orders sought. Service of the Notice from the Sheriff in mid-June 2017 had provided at least four weeks to see the harsh realities, but it is clear that he did not confront them until three days before the Sheriff was to arrive.
The question of orderly sale is an important one in this case because the current debt to the Plaintiff combined with the debt owed to the National Australia Bank is close to $1.6 million, which is approaching the estimated likely selling price of $1.8 million identified in the Agency Agreement. The agent's commission is estimated at an additional $37,800 to $41,580. There will also be advertising costs of over $4,600.
It was observed by counsel for the plaintiff that the conditions of the mortgage entail interest accruing at a rate of approximately $17,600 per week.
The need to maximise the sale price is critical if the mortgage debts and sale expenses are to be repaid.
I do not have any evidence as to the current earnings of the Defendants.
There is evidence of a very recent arrangement to sell the property which appears to be the only option for the Defendants. A contract for sale has been prepared and the first defendant has deposed to an intention to put the property on the market if a stay of the writ is granted.
There are hardship grounds, in particular, the disruption that would be caused to the defendants' 17-year-old son who is living in the house about to commence his HSC trial exams.
For these reasons, I granted a stay of the Writ of Possession up to and including 5:00 pm on 11 August 2017 upon strict conditions, with the matter to be listed before me on 10 August 2017 to review the progress of the various steps taken towards the sale of the property.
The orders made and taken out on 26 July 2017 were as follows: 1. On condition that the First defendant pays on or before 5:00 pm on 31 July 2017 the sum of $10,000 in clear funds to the plaintiff's solicitor, I order: 1. the writ of possession of the Property be stayed up to and including 5:00 pm on 11 August 2017; 2. I order under s 135(2)(b) of the Civil Procedure Act 2005 that the Sheriff take no further action to enforce the writ up to and including 5:00 pm on 11 August 2017; 1. The first defendant is to take all steps as could reasonably be taken for the orderly sale of the Property including: 1. Paying the advertising amount referred to on page 3 of the exclusive agency agreement dated 25 July 2017 or any other amount agreed between the agent and the owners. 2. Listing the property for sale on appropriate advertising portals. 3. Ensuring the property is properly prepared for inspections including arranging for and/or taking the appropriate photographs as part of the preparation for sale 1. The first defendant is to keep the plaintiff updated via information provided to the plaintiff's solicitor of these steps. 2. A verified defence, if any, is to be served upon the plaintiff's solicitor by 5:00 pm 8 August 2017. 3. The matter is to be listed on 10 August 2017 at 10:00 am before me. 4. By 9:00 am on 10 August 2017, the first defendant is to provide an affidavit setting out compliance with the orders and the steps taken toward sale of the subject property. A copy of that affidavit is to be served upon the plaintiff's solicitor and provided to my associate by email. 5. Liberty to restore the matter on 48 hours' notice. 6. The Supreme Court Registry is to notify the Sheriff's Office by email of the orders made this afternoon. 7. Orders to be entered forthwith.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 August 2017

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