Foong v Commonwealth Bank of Australia

Judgment 1GLEESON JA: The applicants, Chao Joi Foong and Yena Suzen Foong, seek leave to appeal from a judgment of Beech-Jones J given on 4 April 2014 in which his Honour dismissed an application to extend the 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). The stay granted by Rothman J was in respect of a writ of possession issued by the respondent, the Commonwealth Bank of Australia (CBA), in respect of a property at Ridge Street, North Sydney (the property). 2In their draft notice of appeal the applicants rely upon two grounds: hardship and medical condition. It is contended that Beech-Jones J erred in two respects. First, in finding that, even if the basis existed for staying a writ of possession on the ground of hardship, it was not made out in the present case. Secondly, in finding that the period of time between the issue of a writ of possession, the issue of a notice to vacate, and its enforcement was more than sufficient for the applicants to vacate the property. 3The relief sought in the draft notice of appeal is for a "Further stay waiting for the motor accidents compensation to come through to buy the said property on the market price". The reference to "motor accidents compensation" is a reference to claims by Ms Foong in relation to two motor vehicle accidents in which she was involved, which she said have subsequently affected her ability to work and to repay the mortgage over the property. It appears from Beech-Jones J's reasons (at [5]) that, whilst the property was registered in Mr Foong's name, Ms Foong had assumed responsibility for paying the mortgage. 4It is sufficient to record the following background in relation to the judgment obtained by the CBA against the applicants. It seems that the CBA made a business loan to Mr Foong of $238,000 for the purpose of purchasing the property which is a non-residential property. In the usual way security was given over the property in favour of the CBA in the form of a registered mortgage. Following default by Mr Foong in making payments under the loan, CBA obtained default judgment for possession. A writ of possession in respect of the property was issued on 18 December 2013. A notice to vacate was issued in February 2014 with eviction scheduled for 24 March 2014. On that day Rothman J granted Ms Foong a stay of the writ of possession up to 5 April 2014. The basis for that short stay was apparently to enable Ms Foong to put forward material which was said to demonstrate that the mortgage debt would be satisfied. 5On 4 April 2014 Ms Foong sought an extension of the stay before Beech-Jones J on the basis of hardship. Beech-Jones J took this submission to refer to avoiding homelessness for Ms Foong, and perhaps her son. However the evidence on this application suggests that the property was used by Ms Foong, or more strictly, by companies in which she had an interest or association or which she owned, as an office, rather than as her living accommodation. (A commercial lease dated 1 June 2011 between Mr Foong, as landlord, and B-Gold Realty Pty Ltd, B-Gold Pty Ltd, and B-Gold Consultant Pty Ltd, as tenants, provided that the property should only be used as an "office". Ms Foong told the Court on this application that each of those companies has since been deregistered by the Australian Securities and Investments Commission.) 6Ms Foong also submitted before Beech-Jones J that she was hopeful of, in some way, repaying the CBA out of the proceeds of her claim in respect of the motor vehicle accidents. His Honour observed (at [6]) that although Ms Foong was undoubtedly optimistic about this claim the insurer was denying fault and liability on the part of the driver. 7Ms Foong conceded in submissions before Beech-Jones J that her son was the registered owner of another apartment which was available for habitation and he was in fact living at that apartment, albeit Ms Foong said that they wished to rent that apartment out. It was in those circumstances that Beech-Jones J declined the application to extend the stay granted by Rothman J. 8On 26 May 2014 the applicants unsuccessfully applied in this Court for a stay of execution of the judgment below. That application was refused by McColl JA: Chao Joi Foong v Commonwealth Bank of Australia [2014] NSWCA 183. McColl JA's reasons record (at [5]) that, following Beech-Jones J's decision, a notice to vacate was issued on 28 April 2014 requiring the occupants of the property to vacate by 9.00am Tuesday 3 June 2014. The CBA took possession of the property on 3 June 2014 and is currently taking steps towards exercising its power of sale as mortgagee. 9The matters which are relevant when considering an application for leave to appeal to the Court are summarised by Basten JA (Tobias AJA agreeing) in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[37]. An applicant for leave must establish something more than that the primary judge was arguably wrong in the conclusion he arrived at. Ordinarily leave will only be granted in matters which involve issues of principle, questions of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. 10Here there is clearly no issue of principle or question of general public importance. The decision of Beech-Jones J refusing an extension of the stay of execution of the writ of possession involved the exercise of a discretion. To successfully challenge that decision the applicants must establish an error on his Honour's part of the kind described in House v The King [1936] HCA 40; 55 CLR 499 at 505. His Honour did not err in refusing to extend the stay. 11First, Mr Foong, the mortgagor, was a bankrupt and had no relevant interest in the property or the proceedings: see s 58 of the Bankruptcy Act 1966 (Cth) and Farrow Mortgage Services Pty Ltd v Winfield [1992] 2 Qd R 282 at 285. Secondly, his mother, Ms Foong, by her corporate interests, was an occupant of the premises which were used for commercial purposes as office accommodation. Even if, as Beech-Jones J assumed, Ms Foong used the property for habitation, his Honour was correct in stating that there was no legal basis for resisting the CBA's claim to possession of the property. 12Insofar as Ms Foong asserted that the Court had some discretion to stay the writ of possession to ameliorate hardship, there was no error in his Honour's finding that she had not made out hardship on the material before his Honour. Nor was there any error in not affording Ms Foong further time to vacate the property in circumstances where she had been on notice to vacate since February 2014. 13Here vacation of the premises by Ms Foong was inevitable and there could be no reasonable expectation of an extended stay being granted on hardship grounds. This is not, for example, a case where a stay is sought (on hardship grounds) in circumstances where the applicant indicates that the loan is to be refinanced and demonstrates by evidence the steps undertaken to refinance the loan: GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889 at [21]-[23] (Johnson J). 14If, as is asserted in the draft notice of appeal, Ms Foong (who is not the mortgagor) wishes to purchase the property, then she can make an offer directly to the CBA. There is no legal basis however upon which Ms Foong can delay any sale by the CBA as mortgagee until a time when she hopes to be able to obtain moneys from elsewhere (in this case, litigation against third parties in unrelated matters) to facilitate repayment of the mortgage debt. The proposed appeal is entirely devoid of merit. 15There is one evidentiary matter which needs to be dealt with. On the hearing of the application Ms Foong sought to rely upon an affidavit which she had sworn on 19 June 2004, being a three page affidavit in which she requested "the [CBA] to put on an affidavit that any of my sons did not go to the [CBA] at Brookvale branch to withdraw $80,000 on 8 April 2010". Objection was taken to this affidavit by the respondent on the ground of relevance. That objection should be upheld; no relevance was demonstrated on the hearing of this application. 16As the application for leave to appeal was filed on 12 May 2014, an extension of time is required to seek leave to appeal: Uniform Civil Procedure Rules 2005 (NSW), r 51.10. However, as there are no arguable grounds of the appeal and leave to appeal should not be granted, it would be futile to extend time to do so. An extension of time to file the summons for leave to appeal should be refused. The application for leave to appeal is therefore incompetent and should be dismissed with costs. 17BASTEN JA: I agree with Gleeson JA. Accordingly the orders of the Court are: (1)Refuse the application for an extension of time within which to file the summons filed on 12 May 2014 seeking leave to appeal from a judgment of Beech-Jones J in the Common Law Division. (2)Dismiss the summons seeking leave to appeal. (3)The applicants to pay the respondent's costs of the motion.