Hargraves Secured Investments Limited v Slaven

On application for stay of writ of possession 1This is an urgent application for the stay of a writ of possession which is due to be executed tomorrow, 10 September 2013. 2The property in question is owned by the second defendant, Ms Roslyn Edwina Waller, and is known as the Merrionga and located at Hargraves near Mudgee. The claim for the possession has a long history. 3In 2006, Ms Waller entered into one or more loan agreements secured by a mortgage over the property with the plaintiff, Hargraves Secured Investments Limited ("Hargraves"). 4It seems to be common ground that some time thereafter she went into default. I am informed from the Bar Table that an amount in excess of one million dollars is now owing on the property, and there are strong reasons to doubt that the sale of property would satisfy the subject debt. 5At some point, Hargraves commenced proceedings seeking possession. Those proceedings embarked upon a long journey, that resulted in the decision of the High Court in Waller v Hargraves Secured Investments Ltd [2012] HCA 4; 245 CLR 311. The end result was that Ms Waller was successful in arguing that the Farm Debt Mediation Act 1994 (the "Act") applied to her loan agreement and that the enforcement action taken against her was not possible in the absence of a further certificate under that Act. The need for a further certificate was said to have arisen because a certificate had only been issued in respect of one of the loan agreements which she had entered into. 6I have been informed by the solicitor for Hargraves that, following that decision, there was an attempt to pursue mediation under the Act. It is not entirely clear what the outcome of that process was, except that it was considered to be futile, because on 16 July 2012 a sequestration order was made against Ms Waller at the behest of another finance company. In that case the debt was said to concern a loan agreement she had taken out in respect of a quad bike. 7Ms Waller appealed the judgment making the sequestration order. On 27 August 2012, Perram J dismissed her appeal (Waller v Yamaha Motor Finance Australia Pty Ltd [2012] FCA 934). His Honour held that a quad bike did not fall within the definition of "farm machinery" in s 4 of the Act. As a result that there was nothing precluding the finance company in that case pursuing its debt. In hearing the appeal Perram J was exercising the appellate jurisdiction of the Federal Court of Australia. Ms Waller has since filed an application for special leave to appeal to the High Court against his Honour's decision. 8In the meantime, Hargraves commenced fresh proceedings in this Court seeking a judgment debt and possession of the property. Initially they were commenced against the trustee in bankruptcy of Ms Waller but she was eventually joined as a party. The claim for monetary judgment was not pursued. Ultimately, on 30 May 2013, Hall J determined that Ms Waller did not have an arguable defence to those proceedings and in fact she had no standing in the proceedings at all (Hargraves Secured Investments Ltd v Slaven (as Trustee of Bankrupt Estate of Roslyn Edwina Waller) [2013] NSWSC 673). One aspect of his Honour's decision was that s 5(2) of the Act provides that the Act does not apply in respect of a farmer whose property is subject to control and Div 2, Pt 10 of the Bankruptcy Act 1966 (Cth), or a farmer whose property is the subject of a bankruptcy petition presented by any person. Thus one part of his Honour's reasoning was that, by virtue of Ms Waller's status as the person the subject of a sequestration order, the Act had no application. 9Subsequently, Hargraves sought summary judgment for possession. On 13 June 2013, Slattery J entered judgment for possession in favour of Hargraves and ordered that it have leave to issue a writ of possession (Hargraves Secured Investments Ltd v Michael Slaven as the Trustee of the Bankrupt Estate of Roslyn Edwina Waller [2013] NSWSC 828). His Honour further ordered that the writ remain in the Court and not be executed before 19 July 2013. 10Prior to the decision by Hall J there was an exchange of emails between the solicitors for Hargraves and the solicitor for Ms Waller. There is a suggestion that there was another undertaking given on the part of Ms Waller not to seek a stay except in the event that she appealed. I do not think that it is necessary to resolve whether that is the effect of the correspondence. 11The next step, at least so far as Hargraves was aware, was that at some time today an approach was made to the Duty Registrar to seek a stay of the writ of possession. This was referred to me as Duty Judge at around 2:00pm today. I inquired of counsel for Ms Waller as to whether the solicitor for Hargraves had not been notified of the application. I was told he had not. I stood the matter down and I directed that that occur. The matter resumed before me this afternoon. Hargraves' solicitor appeared via the telephone. 12The stay of the writ is said to be sought in aid of a notice of motion which seeks two orders. The first is that the orders made by Slattery J on 13 June 2013 be set aside as "having been made irregularly and without regard to s 27 of the Bankruptcy Act 1966". 13The jurisdiction to set aside a judgment on the basis of an irregularity is to be found in r 36.15 of Uniform Civil Procedure Rules 2005 ("UCPR"). Section 27 of the Bankruptcy Act confers on the Federal Court and the Federal Circuit Court concurrent jurisdiction in bankruptcy, and provides that jurisdiction is exclusive of the jurisdiction of all courts other than the jurisdiction of the High Court and the Family Court in certain circumstances. 14The second order sought was that the execution of the writ of possession be stayed until the determination of the Ms Waller's application for special leave to appeal from the judgment of Perram J. 15Before addressing these two matters, the following aspects should be noted. Needless to say the proceedings now have a long history. The debt owed by Ms Waller has grown considerably. 16The application is being made at the very latest hour. It can be reasonably inferred that Hargraves will incur considerable extra costs if the execution of the writ of possession on a remote rural property has to be deferred again. Further, the practicalities of the execution of such a writ are that if it is deferred it will be some considerable time before another execution date can be arranged. 17In addition, Ms Waller has had more than sufficient time since the judgment of Slattery J to take whatever course she has considered appropriate. It is to be recalled that his Honour had stayed the writ for some five weeks. This was in circumstances where Ms Waller had been engaged in litigation for years and the very real prospect of having to leave the property must have been apparent to her for a considerable time. 18Further, the affidavit from Ms Waller's solicitor read on her behalf reveals that, while some considerable effort had been made on her part since the judgment of Slattery J to take some form of further action, nothing had been done to notify Hargraves that anything was being prepared. 19In particular, the affidavit reveals that on 17 July 2013 advice was provided by counsel. The solicitor records that on the basis of that advice his client and he had been preparing simultaneous appeals from the decision of Perram J in relation to the bankruptcy and the decision of Slattery J granting possession. It further recounts that preparations had only just been completed and a decision was made to proceed in the first instance by motion in this Court to set aside the judgment as having been given irregularly. Of course the temporary stay ordered by Slattery J expired on 19 July 2013. Despite that, no attempt whatsoever was made to notify Hargraves that there was any potential challenge to the writ until they were directed to do so by the Court this afternoon. 20In relation to the matters put concerning the strengths of the two orders sought in the motion, as I have stated, the first matter concerns s 27 of the Bankruptcy Act. Although the existence of authority from an intermediate appellate court supporting this ground was adverted to in argument, I was not referred to any decision which would suggest that in any respect whatsoever the judgment of Slattery J somehow involved the exercise by this Court of a jurisdiction that was denied to it by s 27 of the Bankruptcy Act. Nothing that has been said has persuaded me that there is any real basis for that ground. 21The second matter upon which the stay has been sought is the existence of an application for special leave to appeal to the High Court from the judgment of Perram J. 22For present purposes I will proceed upon the generous assumption in favour of Ms Waller that, if special leave was granted and the appeal was successful and the sequestration order was set aside, that would have the result that the orders of Slattery J would automatically be set aside as well. 23For understandable reasons, lower courts have from time to time expressed reluctance to express views about the prospects of a party obtaining special leave to appeal to the High Court and being successful in any such appeal (Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84; 161 CLR 681 at 684 to 685). Nevertheless, as Brennan J pointed out in Burgundy Royale at 686, in some circumstances it is necessary to make some form of prediction to that effect. Usually this is done when an application is made to an intermediate court of appeal for a stay pending an application for special leave to appeal. 24I have perused the material including the summary of arguments and the judgment of Perram J. Nothing in that material suggests to me that there is any significant likelihood of the High Court granting special leave to appeal from his Honour's decision. The application appears to raise a question of statutory construction, involving the application of established principles to known facts. It does not appear to raise any matter of public importance so far as I can ascertain. The relative weakness of that application, as well as the lack of strength in the first ground, coupled with the extreme lateness of this application and the troubling lack of notice given to Hargraves, lead me to conclude that the application for the stay must be refused. 25It is simply too late and the arguments in support are too weak to inflict further loss on Hargraves by ordering a stay at this point in time. The application for a stay of the writ is dismissed. [Submissions re costs.] 26I order the second defendant to pay the plaintiff's costs.