Chao Joi Foong v Commonwealth Bank of Australia

Judgment 1McCOLL JA: The applicants, Chao Joi Foong and Yena Suzen Foong move by notice of motion filed on 13 May 2014 for a stay of execution of a judgment the respondent, the Commonwealth Bank of Australia (the "CBA") has in respect of a property at XX Ridge Street, North Sydney. The application for a stay is made pending the hearing of the applicant's application for leave to appeal from a judgment of BeechJones J given on 4 April 2014 in which his Honour dismissed an application to extend a stay granted by Rothman J on 24 March 2014: Commonwealth Bank of Australia v Foong (Supreme Court (NSW), Beech-Jones J, 4 April 2014, unrep)). 2The history of the proceedings is set out in paras 2 and 3 of Beech-Jones J's reasons. The CBA granted a facility of some $238,000 to the first applicant Mr Foong. Consequent upon his default in respect of the payments due under the mortgage by which the facility was secured, the CBA obtained a default judgment for the amount outstanding under the mortgage. A writ of possession in respect of the property was issued on 18 December 2013. In the meantime Mr Foong was made bankrupt in November 2013. A notice to vacate was issued in February 2014 with evictions scheduled for 24 March 2014. The applicant for the stay before Beech-Jones J was the second applicant, Mr Foong's mother, Ms Yena Foong, who has appeared today, both in her own right and, in reliance upon an affidavit sworn by her son Mr Foong, authorising her to do so, also on his behalf. 3Before Beech-Jones J Ms Foong sought on the basis of hardship an extension of a stay Rothman J had granted. It appears from his Honour's reasons (at [5]), that while the property in North Sydney was registered in Mr Foong's name, she had assumed responsibility for paying the mortgage. However she was injured in two motor vehicle accidents in 2011 which affected her ability to work, and, I infer, her ability to continue servicing the mortgage. Before Beech-Jones J, Ms Foong appears to have submitted that she would be hopeful of, in some way, repaying the bank debt out of the proceeds of litigation in respect of the motor vehicle accidents. 4One matter which influenced BeechJones J, unsurprisingly, in declining the stay application was that although it was submitted before his Honour that if a stay was not continued Ms Foong and her son might be rendered homeless, the evidence indicated that Mr Foong was also the registered proprietor of another apartment in which he was in fact living as at 4 April 2014 (the date of his Honour's judgment) albeit that Ms Foong said they wished to rent that apartment out. It was in those circumstances that BeechJones J declined the application to extend the stay granted by Rothman J. 5Following Beech-Jones J's decision a notice to vacate was issued on 28 April 2014, pursuant to which the occupants of the North Sydney property are required to vacate by 9am next Tuesday 3 June 2014. 6Ms Foong has tendered documents from solicitors Messrs Gerard Malouf and Partners, being a letter from that firm to herself of 22 April 2014. They demonstrate that after Beech-Jones J's judgment was delivered that firm of solicitors filed a statement of claim in the District Court on 16 April 2014 on her behalf seeking to recover damages in respect of an accident which took place on or about 26 September 2011 when Ms Foong was a passenger in a bus which apparently collided with a motor vehicle. The motor vehicle owner is the defendant in the District Court proceedings. Those proceedings are, as Ms Van Ravels, who appears today for the Commonwealth Bank submitted, clearly in their very early stages, and there is no indication as to what damages might be awarded should liability be established in relation to them or when any such damages might be paid. 7The basis upon which Ms Foong seeks to persuade the Court today that this Court should grant a stay pending a hearing of the application for leave to appeal again largely turns on the issue of hardship. 8The facility the CBA offered to Mr Foong in relation to the property was described as a "Better Business Loan". Ms Foong said in her document headed "Summary of Argument" dated 12 May 2014 that the property was bought by her for use as an office to work. She reiterated that she was financing the repayments of the mortgage until the motor vehicle accidents to which I have earlier referred. She stressed in her submissions the importance of her being able to remain in the North Sydney property to continue to maintain her contacts with clients in the North Sydney area. 9It is not precisely clear what business is being conducted from the office. Ms Foong at one stage did have, it appears, a real estate licence but was disqualified from holding that licence consequent upon her conviction of fraud under the Crimes Act 1900 (NSW) in relation to a matter concerning the conduct of a real estate agency, B Gold Realty Pty Limited. According to documents kept in the custody of the Government Licensing Service, that disqualification will not expire until 3 October 2018. 10As I have said, the original advance under the facility was $238,000. According to the evidence before Beech-Jones J and in this Court as at 26 March 2014 Australia Pacific Valuers valued the property at $225,000. At the time the proceedings were before Beech-Jones J the payout figure as at 24 March 2014 in respect of the original facility was $315,880.61, an amount which had increased according to Mr Chemuel's affidavit of 23 May 2014 to $359,705.13 as that date. 11Ms Foong disputed both those amounts without providing any contradictory evidence which might suggest their calculation was incorrect. Even if one was to take the payout figure as at 24 March 2014, the amount outstanding is substantially larger than the current value of the property. 12Ms Van Ravels submits in those circumstances that it is apparent that if the CBA is not permitted to continue with the enforcement of its mortgage as soon as possible the shortfall it has already suffered will only be exacerbated. 13There is of course no automatic right to a stay on an application for leave to appeal. Further, the right of a person in Ms Foong's position (that is to say, not the defaulting mortgagor and therefore the person prima facie subject to the CBA's judgment), to make an application to stay the execution of the writ of possession is not apparent. Beech-Jones J was prepared to consider the matter (primary judgment at [8]) even though in his view there was no legal basis for resisting the CBA's claim to possession and it was highly debatable that the Court had a discretion to stay a writ of possession to ameliorate hardship and possibly facilitate repayment on the material before his Honour. 14As I have said the possibility of repayment is remote. Insofar as Mr Foong is concerned he is a bankrupt and as such can have no interest in the current proceedings: Farrow Mortgage Services Pty Limited v Winfield [1992] 2 Qd R 282 at 285. 15The overriding principle to apply when determining an application for a stay is to ask what the interests of justice require. That includes having regard to the interests of justice for both parties and in particular to have regard to the balance of convenience. The Court will also have some regard to the prospects of success on the substantive application. 16Having considered the materials before the Court and the application for leave to appeal from Beech-Jones J's refusal to the extension for a stay, I consider the prospect of there being a grant of leave to appeal as remote. That clearly is a factor relevant to the exercise of my discretion to grant a stay pending the application for leave to appeal. 17In my view the applicant has not demonstrated any proper basis for a stay. It may be the case that there are now motor vehicle accident proceedings on foot, but as I have said, when, if ever, they might result in any substantial amount which might be applied to the mortgage is not apparent. In the meantime the CBA's position under the mortgage is constantly being eroded by the effluxion of time. In such circumstances, in my view, it is not appropriate to grant the stay sought. I dismiss the notice of motion with costs.