JUDGMENT - EX TEMPORE
1 HARRISON J: On 16 September 2004 the defendant entered into a home loan contract with the plaintiff for the finance of a property at 37A Abbott Street, Cammeray, in Sydney. By 29 March 2005 the defendant had defaulted under the home loan contract when she failed to pay an instalment in the sum of $3,673.34. It is unnecessary for present purposes to repeat the history between that date and 15 June 2006 when the plaintiff commenced the present proceedings seeking recovery of the debt and, in aid of that claim, an order for possession of the property.
2 The defendant was served with the present proceedings on 7 July 2006. This matter has had an indifferent history since that time. On 6 November 2006 the plaintiff filed an application for the entry of judgment by default. This court granted judgment in favour of the plaintiff by default on 28 November 2006. As soon thereafter as 15 December 2006 the defendant was given notice by the sheriff of his intention to take possession of the property on 15 January 2007. Three days before, on 12 January 2007, the defendant made an ex parte application for a stay.
3 The matter came before Hall J. His Honour made an order staying the writ of possession until 9 February 2007 and made ancillary orders in relation to the filing and serving of the notice of motion and supporting affidavits.
4 The matter was relisted before the Registrar on 9 February 2007. On that day the matter was referred to Patten AJ. Orders were made by him staying the writ of possession until 16 February 2007. Much in the way that the matter was dealt with by Hall J, his Honour ordered the filing and service of the motion and supporting affidavits.
5 The matter was listed before the Registrar on 16 February 2007. On 5 March 2007, no motion or affidavit in support having before then been filed by the defendant, the sheriff served a second notice to vacate upon the defendant indicating that he proposed to take possession of the premises on 15 March 2007. Two days before that, on 13 March 2007, the defendant served the plaintiff with a further notice of motion and supporting affidavits seeking a stay of execution of the writ until 15 April 2007.
6 The matter came before Hidden J on 14 March 2007. His Honour made orders on that day staying execution of the writ until 15 April 2007. That date passed without anything having occurred. On 24 April 2007 the sheriff served a notice upon the defendant of an intention to take possession of the property on 3 May 2007. One day before that, on 2 May 2007, the defendant filed a notice of motion and affidavit in support seeking a further stay of execution of the writ until 30 May 2007. The matter came before Hulme J who made an order staying the writ until 30 May 2007.
7 On 19 June 2007 the sheriff served a notice to vacate the premises upon the defendant indicating a proposal to take possession of the property on 25 June 2007. Three days before that, on 22 June 2007, the defendant served the plaintiff with a notice of motion and affidavit in support seeking a further stay until 31 July 2007.
8 The matter came before Adams J on 22 June 2007. In due course his Honour made orders staying execution of the writ of possession until 23 July 2007. That stay passed without further order of this court or other application for a stay. On 30 August 2007 the sheriff served a further notice upon the defendant indicating a proposal to take possession of the property on behalf of the plaintiff on 11 September 2007.
9 Yesterday, at approximately 4.00pm, the defendant filed a notice of motion and supporting affidavits in aid of an application for yet a further stay. Much of the relief sought in the notice of motion can be ignored because Ms Pike, on behalf of the plaintiff, appeared in opposition to the defendant's application. This latest notice of motion seeks a stay of execution of the writ of possession until midnight on 15 October 2007.
10 I have read the affidavits of the defendant and of David Sweeney each sworn 10 September 2007. I have also had regard to the terms of an affidavit sworn by the defendant on 13 March 2007 that was relied upon in an earlier application. That affidavit reveals that the defendant had been subject to unfortunate personal circumstances to all of the details of which it is presently unnecessary to refer.
11 They include, however, the fact that the defendant's business, from the net proceeds of which she had been making monthly payments in reduction of principal and interest to the plaintiff, suffered a downturn following an assault upon her that prevented her from attending to the business in the way that she would have preferred. It should not pass without notice, however, that the defendant's first default occurred at a time before the alleged assault, although after some other matters of significance to her had occurred.
12 Writing extra curially, Bryson J, as he then was, drew attention to the status of applications of the sort made by the present defendant in an article in 11 Aust Bar Rev at page 1 entitled, "Restraining Sales by Mortgagees and a Curial Myth". At page 17 his Honour said this:
"Applications are often made at a remarkably late stage, when auctions have been advertised, expense has been incurred, and it is likely that people interested in making bids have given time and attention to what they are to do. Litigation and withdrawals from sale have a depressing effect on renewed attempts to sell property. Mortgagees often put forward the difficulty that the value of the security is about to be exhausted or already has been exhausted, and the circumstances in which this difficulty is put forward can vary greatly. A mortgagee who lent the whole value of the property, or kept a narrow margin between the value and the amount lent which was soon used up by a high rate of interest, has less claim for consideration of this difficulty than a mortgagee who lent with a prudent security margin which has been exhausted in the course of patient attempts to obtain payment. The parties often seem to feel some emotional involvement, the borrower to his home or his farm or his development project, the lender to his money and its prompt return, and these feelings are usually underlain by real needs. Are the needs of dependants for housing or a wish to carry through a project on which much effort has been expended relevant at all, or is the court's attention rightly limited to achieving justice by seeing to repayment as contracted?"
13 I raised some of these matters yesterday with counsel for the defendant and drew attention to the principle referred to in Inglis & Anor v The Commonwealth Trading Bank of Australia (1972) 126 CLR 161. That case has long stood for the proposition that as a general rule an injunction will not be granted restraining a mortgagee from exercising powers conferred by a mortgage and in particular a power of sale unless the amount of the mortgage debt, if this is not in dispute, is paid or unless, if the amount is disputed, the amount claimed by the mortgagee is paid into Court.
14 No such offer is made by the defendant in the present case. As Walsh J said in that case at page 169:
"The case falls fairly, in my opinion, within the general rule applicable when it is sought to restrain the exercise by a mortgagee of his rights under the mortgage instrument. Failing payment into court of the amount sworn by the mortgagee as due and owing under the mortgage, no restraint should be placed by order upon the exercise of the respondent mortgagee's rights under the mortgage."
15 It goes without saying that in the present case the defendant has no claim by way of set off or similar against the plaintiff. She seeks in her favour the exercise of a discretion based upon slim evidence to suggest that she proposes, and has an ability, to refinance in a way that will discharge the present mortgage and satisfy her proprietary and contractual obligations to the plaintiff.
16 Briefly, the evidence in support of the present application is that the defendant made an attempt to refinance with a proposed mortgagee but ran into trouble when a credit reference inquiry about her revealed the existence of debts to others in the sum of approximately $30,000. The incoming mortgagee was unprepared to lend money to the defendant on the security of the property in excess of 80 per cent of that mortgagee's valuation of it.
17 The defendant's intention had been to pay off the outstanding debts to third parties, reduce the current mortgage and refinance at a time when less than 80 per cent of the valuation of the property would be required. The long and the short of the present application is that the defendant will not be in a position to discharge the debts to third parties and discharge the current mortgage with a new loan not in excess of 80 per cent of the proposed mortgagee's valuation of the property until (nominally) 15 October 2007, which is the date to which she seeks a stay.
18 It should not pass without notice that the present application is unsupported by evidence from the proposed mortgagee. Instead there is evidence of a hearsay nature about conversations with a mortgage broker about the likelihood that finance of the sort upon which the defendant proposes to rely will be produced or will be available by the date in question.
19 No acceptable evidence of the defendant's financial position has been produced anywhere which would permit me to form a view about the reasonableness of the proposal and the plaintiff is placed in the position at the eleventh hour of having to respond to the defendant's application without any proper opportunity to test it or otherwise deal with it. Moreover, I was referred to no authority that assisted me to form a view about the merits of the defendant's position. This is so even notwithstanding that Bryson J's article is awash with suggestions about how the discretion may be exercised in a way that would ameliorate the harshness of the rule in Inglis and the cases that followed it.
20 Timely attention to the present application would, no doubt, also have revealed the decision of Hamilton J in this court in Parist Holdings Pty Limited v Perpetual Nominees Limited [2006] NSWSC 599. In that case, in a most instructive way, his Honour dealt with the principles that might inform applications such as the present as to how best to accommodate an otherwise strict application of the rule in Inglis and similar cases including significantly Harvey v McWatters (1948) 49 SR (NSW) 173. At paragraphs 16 and 17 of that case his Honour made the following comments.
"[16] Over the last 15 years, there have been various expressions of judicial opinion which are to the effect that the requirement in Inglis should be widened. For this to be done, it will need to be found either that there should be an additional exception to the general rule or that the time has come when the general rule should itself be revised and restated.