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[2025] NSWSC 641
General information, not legal advice.
Supreme Court of NSW
2025-06-19
Lonergan J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Pronto Funds Pty Ltd ACN 669796847 v Zhuang [2025] NSWSC 641
Hearing dates: 16, 17 and 19 June 2025
Date of orders: 19 June 2025
Decision date: 19 June 2025
Jurisdiction: Common Law
Before: Lonergan J
Decision: (1) The defendants’ application for stay of the Writ of Possession is refused.
(2) The defendants are to pay the plaintiff’s costs of the notice of motion.
(3) No action in the nature of locking out the defendants and occupiers from the premises is to be taken by any representative or agent of Summer Lawyers or Pronto Funds and I note the undertaking given to the Court by the solicitor from Summer Lawyers, Ms Adoranti, to that effect.
(4) The usual machinations for vacating the premises via the Sheriff’s office will ensue, noting that that is likely to provide in effect a period of grace of another at least 3 weeks to allow the defendants’ and other occupiers’ orderly departure from the premises.
(5) Given the apparent inability of the defendants to follow the Court’s proceedings without the assistance of a Mandarin interpreter, at the Court’s request, the solicitors for the plaintiff, at their cost, organised a Mandarin interpreter for the defendants. That interpreter attended on Tuesday 17 and Thursday 19 June 2025. The costs associated with that interpreter should be paid by the defendants as part of the costs incurred by the plaintiff on the motion.
Catchwords: MORTGAGES AND SECURITIES – claim by mortgagee for possession of land following default by mortgagors – default judgment entered and writ of possession issued – application for stay of execution of writ of possession – factors relevant to application for stay – stay in terms sought refused
Cases Cited: GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889
Category: Procedural rulings
Parties: Pronto Funds Pty Ltd ACN 669796847 (Plaintiff)
Li Qing Zhuang (First Defendant)
Ding Sen Wang (Second Defendant)
Representation: Counsel:
Solicitors:
Summer Lawyers (Plaintiff)
Self-Represented (First Defendant)
Self-Represented (Second Defendant)
File Number(s): 2024/00478521
Publication restriction: Nil
On 20 December 2024, the plaintiff, Pronto Funds Pty Ltd (“Pronto”), commenced proceedings against Li Qing Zhuang and Ding Sen Wang, seeking an order for possession of a property at [REDACTED], Vaucluse being land described in folio identifier [REDACTED].
The plaintiff alleges default on the part of the borrower, Addaces Investments Pty Ltd, regarding a loan provided to that company on 19 January 2024 in the sum of $550,000.00.
The loan agreement provided that the defendants were guarantors of that loan together with their son Richie Wang. Richie Wang appears to be the sole director of the borrower.
The loan agreement comprised a finance offer and schedule and a memorandum of common provision which were on their face executed on behalf of the borrower by Richie Wang, who also executed as a guarantor together with the first and second defendants. A New South Wales real property mortgage over [REDACTED] was also executed by the defendants on 23 January 2024.
A term of the loan agreement was that the borrower repay the total loan on 14 May 2024. That did not occur. The terms of the agreement provided that in the event of default under the loan agreement the borrower must pay within three days, or the lender plaintiff can take legal action including enforcement proceedings and proceedings for possession. There were other penalty and compound interest provisions.
The loan was not paid and a default notice was issued on 6 August 2024 to the street address at Strathfield and the email address provided as the addresses for service of notices and correspondence for the borrower and the guarantors.
There is evidence available from process servers in sworn affidavits that the statement of claim was personally served on each of the defendants on 29 January 2025.
No defence was ever filed.
The defendants appeared on Monday 16 June 2025 before me without any legal representative and without an interpreter. I understand neither defendant speaks more than limited English and their son Richie Wang purported to speak for them and interpret for them. I was not content to proceed that way given his different interests in relation to the matter, in particular, that he is not a registered proprietor of the property and ran the company that was the defaulting borrower. He is however, I accept, an occupier of the property and so could make submissions as an affected person, but I considered it more appropriate to have an objective Mandarin interpreter available for the defendants. This was organised by the plaintiff’s solicitor. The proceedings were adjourned and the temporary stay extended to the next day.
On Tuesday 17 June 2025 at 10:00am the defendants through the interpreter communicated that they wished to proceed with their motion despite not having legal advice or a lawyer present, as they would not be able to and did not wish to retain a lawyer.
I understand that the defendants, who are aged 78 and 79 respectively, their son Richie, and Richie’s child who is about six years old all reside at the premises.
On 27 February 2025 the plaintiff filed its notice of motion seeking default judgment. On 28 February 2025 the Court entered default judgment. On 28 March 2025 a writ of possession was issued. On 9 April 2025 a Notice to Vacate was issued by the Sheriff’s office.
Evidence before the Court suggests that no payments were ever made on the loan. The amount now owing is over $1 million and interest is accruing at the rate of over $40,000.00 per month.
The property is also affected by a first mortgage registered to CPF Pty Ltd (“CPF”). Evidence before the Court indicates that that mortgage is also in default and is the subject of litigation in other proceedings in this Court. The nature and status of those proceedings was not the subject of any evidence, but the current sum due under the mortgage is stated to be in excess of $19 million. There is also evidence that CPF required $260,000.00 to be paid to it from the Pronto loan in return for a deed of forbearance in respect of the CPF mortgage and a deed of priority, the details of which were not in evidence.
Evidence filed suggests that the property at [REDACTED] is worth something between $19 and $21 million.
On 21 May 2025 an order was made by the Deputy Registrar for the writ of possession to be stayed for one week. I cannot tell from the file the basis on which this order was made however on 27 May 2025 the defendants’ notice of motion was filed seeking an order that the writ of possession issued on 11 April 2025 be stayed until 31 August 2025 “or such further date as the court may determine, including but not limited to the conclusion of the Supreme Court proceedings in relation to the primary dispute with CPF (First Ranking Mortgagee)”.
Filed in support of the notice of motion was an affidavit dated 27 May 2025 purported to be prepared by both defendants. The affidavit has not been properly executed and does not appear to have been translated. There is no certificate of translation by a relevant accredited interpreter. I have significant doubts about the provenance of this affidavit. It appears to have been prepared by Richie Wang on behalf of his parents, betrayed by the occasional use of references such as “my parents” and “my child” which suggest that Richie was the author.
There is an additional affidavit of Li Qing Zhuang dated 11 June 2025, which annexed documents including an agency agreement with a local real estate agent and some correspondence that suggests that the property is on the market and has had some inspections and some offers well under the valuations of $19 to $21 million.
In short, the complaint by the defendants set out in the affidavits and as stated in submissions is that they were not served with the statement of claim and did not know anything about the proceedings until 20 May 2025 when various items were left in their letterbox including the August 2024 notice to vacate.
They claim that is the first time they knew about any proceedings against them in relation to the mortgage, although in a different part of the affidavit they acknowledge that they had some form of notice in “late April” 2025. They claim not to have received any emails at the email address provided in the loan documents (which is also the address for service in these proceedings) and assert that they have searched the inbox and cannot find any emails at all of that kind.
On 28 May 2025 the Common Law Registrar provided a further extension of the stay of writ of possession to 5:00pm on Monday 16 June 2025.
The matter came before me as duty Judge on 16 June 2025 and I extended the stay to 5:00pm Tuesday 17 June 2025 to allow for the arrangement of a Mandarin interpreter to assist the defendants as it was apparent they would have difficulty understanding the argument being made and any observations made by the Court during argument. Solicitors for the plaintiff organised a Mandarin interpreter to attend.
As I have stated, it was at that point that the defendants indicated through the interpreter in response to a question from the Court that they would not be retaining a lawyer, did not wish to obtain a lawyer and wanted the Court to hear and determine their application “today”.
They also submitted orally through the interpreter that it was not true that they were served with any statement of claim, asserting that the deponent of the affidavit of service relied on by the plaintiff in the proceedings, Mr Merhi, was not truthful in his affidavit.
Given that particular allegation I considered it necessary to adjourn the motion to allow for the attendance of Mr Merhi for examination and to give him the opportunity to address allegations that his affidavit was untrue. To facilitate this, the motion was adjourned to Thursday 19 June 2025 at 10:00am.
In the meantime an affidavit was provided from Mr Floridis (a process server who had been supervising Mr Merhi in January 2025) stating that Mr Merhi no longer worked for the service firm, and referring to the attempts to contact him at his last known address in the very limited time between Tuesday afternoon and Thursday morning.
Mr Floridis deposed to being present and observing the service of the documents on 29 January 2025 referred to by Mr Merhi. In answer to questions from the Court on 19 June 2025, Mr Floridis confirmed his usual practice was to take notes at the time of service attempts, which included dates and times and observations. His affidavit referred to having been present at the premises on the evening before 29 January 2025 with Mr Merhi in an attempt to accomplish service, observing the premises and observing Mr Merhi to take a photograph of the premises. (I note that it is clear that the photograph is of the correct premises.)
Mr Floridis stated, and I accept, that he was present in the car when he and Mr Merhi arrived at 8:00am on 29 January 2025 and that he observed Mr Merhi approach the defendants when they emerged at the front of the house at about 10:20am. He confirmed those people appeared to correspond with the identification information and photographs they had been given, and that the male was bald. Mr Floridis confirmed that he could not be sure how old the young child with them was although in his affidavit he said the child looked about three years old. He stated in his evidence that he was not close enough to be sure.
The defendants argued both in their affidavits and orally through the interpreter that they recalled 29 January 2025 because it was Chinese New Year, and insisted that they attended a Buddhist temple that morning and therefore could not have been at home to accept service at 10:20am that day.
I am satisfied that the sworn evidence of Mr Merhi, corroborated by the oral and sworn evidence of Mr Floridis, establishes that personal service was effected on that date.
I am satisfied that the defendants were served with documents on 29 January 2025 which if they read them, would have alerted them to what was alleged against them regarding the unpaid mortgage. I accept that the statement of claim bore a warning in multiple languages including Mandarin, advising that “if you do not respond to the Supreme Court within 28 days with a defence,” “you may be evicted from your property and the lender may sell your property.” It also stated: “You may need legal advice” and provided a number for free legal information or referral for further assistance.
“…
9. The Court has a discretion whether to stay the execution of a Writ of Possession issued in proceedings of this type. It is a power which is sought to be exercised frequently and in a variety of circumstances. There can be no prescription of the circumstances in which this important discretionary power ought be exercised.
10. Nevertheless, there are a number of factors which are clearly relevant to the question whether the discretion ought be exercised in the circumstances of the particular case.
11. Firstly, it should be kept in mind that, by the time a stay application is made, the proceedings have usually advanced through various stages without the Defendant participating in the proceedings. In the usual case (of which the present case is an example), the Defendant has not filed a Defence and Default Judgment has been granted (Part 16.4 and Part 36.8 Uniform Civil Procedure Rules) followed by the issue, with the leave of the Court, of a Writ of Possession (Part 39.1(1)(d) Uniform Civil Procedure Rules). Some time is then required for the Plaintiff to make practical arrangements with the Sheriff for execution of the writ.
12. Having been served with originating process alleging default under the mortgage and identifying the relief which the Plaintiff seeks, the Defendant is on general notice as to the consequences which may flow as a result of the proceedings. If the Defendant takes no action until the execution of the Writ of Possession is imminent, a legitimate question arises as to why the Defendant has not taken earlier action, either by way of negotiations with the Plaintiff or application to the Court. A Defendant seeking a stay ought be in a position to explain to the Court his or her action or inaction prior to the making of the application.
13. Secondly, the basis upon which the stay application is made is significant. As paragraph 20 of the Practice Note makes clear, there are three common circumstances advanced on a stay application:
(a) where the Defendant indicates that the proceedings are to be defended, a draft Notice of Grounds of Defence should be provided and the Defendant ought be in a position to make submissions concerning the merits of the proposed grounds;
(b) where the Defendant indicates that the loan is to be refinanced, proof of steps undertaken to refinance will be required on the application;
(c) where the Defendant indicates that the subject property is to be sold, copies of agent sale agreements, a contract for sale of the property, advertisements and other documentary evidence ought be provided.
14. The three categories referred to in the preceding paragraph of this judgment raise different considerations.
15. With respect to the first category, if a Defendant seeks to be let in to defend the proceedings (and, usually, to set aside a default judgment for that purpose), then a stay may be more readily granted to preserve the subject matter of the litigation pending the determination of the proceedings by the Court.
- As to the second category, where the Defendant seeks to refinance so as to discharge the debt to the Plaintiff under the mortgage, the Defendant is seeking to satisfy the debt payable to the Plaintiff in its entirety so as to render unnecessary the exercise of the power of sale by the Plaintiff.
…
- The third category involves a stay application where the Defendant wishes to sell the property. 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.
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.
22. Ordinarily, if a Defendant is not in a position to demonstrate a reasonable foundation for a stay in one of the three circumstances referred to in paragraph 13 above, then there could be no reasonable expectation of an extended stay on hardship grounds only. If it is inevitable that the Plaintiff will obtain possession of the property for the purpose of exercising the power of sale, then it will be necessary for the Defendant to vacate the property.
…”
The first two categories referred to by Johnson J do not apply to the defendants. They specifically stated through the interpreter that they do not argue that they have a defence and will not be attempting refinance. They argue that on hardship grounds, they should be allowed to stay in the premises given their advanced age and that they have no alternative accommodation. They request time for the orderly sale of the property to provide that time and to maximise potential sale price.
As stated by Johnson J in Smith at [30]:
“… Defendants can have no reasonable expectation that a stay of execution of a Writ of Possession will be granted upon request in every case. The nature of the proceedings, and the stage which the proceedings have reached by the time of such an application, are important factors which the Court must take into account and which a Defendant must overcome on a stay application. A Defendant must satisfy the Court that a sound and proper basis exists for the grant of a stay.”
(a) Two affidavits of service of Adam Merhi affirmed 17 February 2025; (b) Four affidavits of Harley Moxon, Director of Pronto, affirmed 27 February 2025; 27 March 2025; 10 June 2025 and 13 June 2025; and (c) Two affidavits of John Floridis affirmed 3 March 2025 and 18 June 2025.
Those affidavits evidence the loan agreement, the mortgage, the provisions relating to the loan and also refer to the position with CPF and the money owed in respect of that first mortgage over the property. There appears to be some relatively minor difference in opinion about the value of the property, the plaintiff’s valuation suggesting that the property was worth $19,500,000.00 in May 2024, and the defendants’ valuers suggesting the property was worth $22,500,000.00 in December 2023 and $19,750,000.00 in February 2025. The differences may well be accounted for by market forces and the timing of preparation of the valuations.
The Agency Agreement between the defendants and the selling agent suggests that the agent initially on 13 May 2025 gave a sale value estimate of $21,000,000.00 to $23,000,000.00 but revised that downwards on 2 June to $19,500,000.00 to $21,450,000.00.
The question is whether there is a sound and proper basis for granting the stay. Even assuming that the defendants first learnt about the writ for possession in May 2025, which I do not accept, are there hardship grounds that provide sufficient reason for the defendants remaining in the property for a further two to three months? As I have already said, I have great difficulty accepting they did not know they were being sued on the loan agreement until May 2025. They have never filed a defence and do not wish to do so now. There is no plan, and frankly it seems no hope of refinance.
Given the monthly interest being incurred whilst offers are considered, the fact that the plaintiff is the second mortgagee and so priority may be an issue, and that the plaintiff is entitled to vacant possession and may well be able to sell the property more expediently with vacant possession, I need to consider whether it is appropriate that the defendants maintain control over the sale process whilst the loan accrues $40,000.00 per month. There is some evidence that the property is not being improved for sale, and has not been well-maintained.
Whilst I have sympathy for the defendants’ predicament, there is no evidence that things will be better or different in two or three months. The defendants have no income. They are elderly and there is no evidence that there is some accommodation or other option available for them later. They will need to find new accommodation now or then. There really seems to be no purpose at all in allowing a stay, other than a postponement of the inevitable.
I have fashioned orders to allow some weeks for the orderly vacation of the premises by the occupiers, but I decline to grant a stay of the type or length of the stay sought in the notice of motion.
I make the following orders:
The defendants’ application for stay of the Writ of Possession is refused.
The defendants are to pay the plaintiff’s costs of the notice of motion.
No action in the nature of locking out the defendants and occupiers from the premises is to be taken by any representative or agent of Summer Lawyers or Pronto Funds and I note the undertaking given to the Court by the solicitor from Summer Lawyers, Ms Adoranti, to that effect.
The usual machinations for vacating the premises via the Sheriff’s office will ensue, noting that that is likely to provide in effect a period of grace of another at least 3 weeks to allow the defendants’ and other occupiers’ orderly departure from the premises.
Given the apparent inability of the defendants to follow the Court’s proceedings without the assistance of a Mandarin interpreter, at the Court’s request, the solicitors for the plaintiff, at their cost, organised a Mandarin interpreter for the defendants. That interpreter attended on Tuesday 17 and Thursday 19 June 2025. The costs associated with that interpreter should be paid by the defendants as part of the costs incurred by the plaintiff on the motion.
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Coversheet and par 32: Amended case citation.
Pronto Funds Pty Ltd ACN 669796847
Zhuang [2025] NSWSC 641