HIS HONOUR: On Friday 17 December 2020, I made orders refusing an application by Giulia Penna, the first defendant to the proceedings ("the defendant"), seeking a stay of a writ of possession by way of a notice of motion dated 14 January 2020, which was set to occur at 9.30am on Monday 20 January 2020. I now publish my reasons.
The history of this matter is set out in two judgments concerning earlier applications by the defendant for a stay of execution of the writ of possession: see The Trust Company (PTAL) Limited v Penna [2019] NSWSC 1809 (Lonergan J) and The Trust Company (PTAL) Limited v Penna [2019] NSWSC 1883 (Beech-Jones J). That being so, it is unnecessary to provide a history, other than the milestones, of the matter.
In 2017, a loan of $3,000,000 was secured on two properties in Haberfield, on Yasmar Street and Cove Street, the latter being the property in question ("the Cove Street property"). Repayments ceased in January 2019. On 1 April 2019, The Trust Company (PTAL) Limited ("the plaintiff") filed a statement of claim, seeking judgment for the plaintiff for possession of both properties and leave to issue a writ of possession. No defence was filed, and a notice of motion for default judgment on the claim for possession of land was filed in May 2019. On 1 August 2019, judgment for possession was given in favour of the plaintiff in respect of the property. The writ of possession was to be executed on 23 August 2019. On 4 October 2019, the Court ordered a stay of the writ of possession until 11 October 2019. The defendant filed a notice of motion for a stay of the writ of possession, which was granted. This was followed by a period of negotiations, culminating in a Deed of Release entered on 4 November 2019 ("the deed"). The deed stated that, as of 30 September 2019, the amount owing was $3,221,609.50. The deed anticipated that the Yasmar Street property would be sold and the Cove Street property would be refinanced by two finance companies.
The Trust Company (PTAL) Limited v Penna [2020] NSWSC 11 | Case summary | Zoe
Subsequently, a short extension was agreed between the parties for settlement to take place. The Yasmar Street property was sold and the net proceeds applied to the outstanding debt, but the Cove Street property refinancing did not proceed because the finance companies were not satisfied with the result of the due diligence process. The defendant was allowed a further period to seek refinance from an alternative company, whereby the date of the execution of the writ was agreed to be 11 December 2019. A fresh settlement was anticipated to occur on 26 November 2019.
Settlement did not occur and on 11 December 2019, the defendant sought a stay. Although there was a solicitor on the record for the defendant, the defendant approached the Court initially unrepresented and without notifying the plaintiff. Ultimately the defendant's solicitor attended and sought a further stay of three weeks, to enable the sale to be completed. The plaintiff noted that this was the third application by the defendant to delay possession proceeding. Her Honour concluded:
"53 There is nothing in the affidavit material relied upon by [the defendant] that is of a nature that suggests anything other than obvious inconvenience that flows from persons being evicted from premises. I allowed a short stay of the eviction orders so that I could deal with this application on its merits despite it being sought at the last minute and despite the previous stay given back in August.
54 I have now considered the application carefully. I accept the submission made by [Senior Counsel for the plaintiff] that there is nothing in the material relied upon by the first defendant that indicates that there is any prospect of a loan being approved for the necessary amount, let alone at a loan being approved in three weeks. This Court is not permitted to make stays of execution based on circumstances that may never occur. This Court has to ensure that it does not make orders that are pointless. It seems to me, having examined the history of the proceedings, the defendants have been given multiple opportunities to arrange their affairs and avoid eviction.
55 I am not satisfied on the material before me that there is any proper basis upon which to grant a further stay. I will not lift the stay currently in place and that means that the defendants have until midday on Monday to vacate the premises."
Consequently, eviction was stayed until 16 December 2019. On that date, the defendant made a further application for a stay, ex parte, before Beech-Jones J, who was then the Duty Judge. In his judgment, his Honour noted, at [14], that the application included "some attempt to relitigate the matters determined adversely to [the defendant] by Lonergan J". His Honour declined the application.
On 19 December 2019, the defendant made a further application for a stay before the Duty Judge, Walton J, again ex parte. His Honour declined to hear the matter in the absence of notice to the plaintiff. It was re-listed before Beech-Jones J on 20 December 2019, who dismissed the motion: [2019] NSWSC 1883. His Honour stated:
"35 The only real prejudice to [the defendant] that I can ascertain from a refusal of the stay is, of course, the dislocation that will come in the following weeks between now and when it is proposed to complete the sale to Mr Dutina. That potential prejudice was not put with much force and, in any event, it has to be considered in the circumstance where the occupants of the premises have been living at the premises for a period of in excess of six to eight months while they were in default of their mortgage. The potential for them to have to leave must have been apparent for a long time and would have been extremely acute in the last few weeks.
36 On the other hand, if a stay was to be granted it would, to my mind, have the real potential to prejudice the plaintiff. I have already referred to my misgivings about whether the contract for sale is a genuine contract. I have also referred to my misgiving about the enforceability of the contract. If either of those misgivings reflect the true position, then the grant of the stay would, it seems to me, create a significant risk to the plaintiff that it would not be able to enforce its rights for a considerable period because, as the contract for one reason or another unravelled, it is likely that there would be further applications of this kind. The Sheriff's process of arranging execution of its writs would be put back in the usual way.
37 I am firmly of the view that the best means to ensure a sale in the short term of the premises at Cove Street, Haberfield, is to refuse a stay of the writ of execution. This will then allow the plaintiff control over possession of the property and control over the sale process. If, events transpire that the contract for sale with Mr Dutina and his mother is genuine and enforceable and at a price that the owners wish to adhere to, then I cannot see any genuine commercial reason why the plaintiff would not pursue it. If, however, that is not the case then the onus will then be on the plaintiff to effect the sale at a fair price in the appropriate way.
38 On the other hand, if the writ of execution was to be stayed for a further period there is, in my view, a reasonable likelihood that the orderly sale of the property and the satisfaction of the mortgage debt will be significantly disrupted."
The matter then came before me sitting as the Duty Judge, on the morning of Tuesday 14 January 2020. A notice of motion was filed in Court by the defendant, seeking a stay of her eviction from her residence, by way of the execution of a notice of eviction pursuant to a writ of possession. The Sheriff had advised the defendant by letter that the eviction would occur at 11.30am that morning. I stayed the execution of the writ, initially until later that day, while I heard argument. The defendant was represented, although her solicitor, Mr Cremer, had not come into the matter until 4pm the afternoon before, as the solicitor who had regular carriage of the matter was on holiday interstate.
Mr Cremer sought to have read an affidavit in support of the notice of motion that had been prepared personally by the defendant, and which I found to be so poorly drafted as to be in a substantial part unintelligible. Accordingly, I rejected it. The defendant's solicitor submitted that what the defendant sought was "a short stay of the writ of possession". Mr Cremer advised that the defendant had "sold" the property, although on further inquiry he stated that contracts had been exchanged and completion was "subject to finance". A stay of ten days was sought to enable completion, at which point the defendant would pay the outstanding debt. I was informed that the prospective purchaser was content for the defendant and the other occupants of the property to stay on as tenants. Mr Cremer further submitted that if the sale did not go ahead, the defendant would still comply with an extension of the stay for "two weeks maximum".
The application was opposed. Ms Castle of Counsel, who appeared for the plaintiff, submitted that there had been a history of last minute applications by the defendant and that, on this occasion, the plaintiff's solicitors had received no communication from an incoming mortgagee or other evidence of a pending sale of the property.
Mr Cremer conveyed his client's instructions that the notice of eviction, although dated 8 November 2019, was posted and not received by the defendant until the day before, being 13 January 2020. He submitted the defendant had expected the notice, but had been advised that she would be given five days' notice. Mr Cremer said: "[The defendant] has told me she could move out if she is given five days' notice". That being so, I indicated that I intended to make an order staying the execution of the execution of the writ of possession until Monday 20 January 2020, being five days hence. Ms Castle submitted that, given the history of the matter, she was concerned that the defendant would make a fresh application for a stay prior to that date. I indicated that I would be the Duty Judge until then, so that if the defendant did, the matter would come back before me, being the judge who ordered the stay.
Mr Cremer then stated that the purchaser had come to Court and was in a position to give evidence confirming that the sale of the property is pending. Ms Castle, on behalf of the plaintiff, indicated that if the sale did proceed so that the plaintiff was paid the amount owing, it would relinquish possession. On that basis, I made an order as foreshadowed, staying execution of the writ of possession until Monday 20 January 2020.
On Friday 17 January, the defendant directly emailed my chambers, not copying the plaintiff or its solicitors, seeking a further extension based on grounds of hardship, and setting out those grounds. The defendant stated that she no longer had legal representation. I note that the defendant had not copied in the plaintiff, who had to be contacted by my chambers. I arranged for the matter to be listed before me at 5pm on Friday, being a time that was convenient at short notice to the plaintiff.
The defendant appeared before me unrepresented. Ms Castle again appeared for the plaintiff. The defendant relied upon the grounds she had set out in her email, which were as follows:
"1. I have contacted the Department of Housing NSW to assist me for rental bond, in which I have lodged an application (Application number [identified]). The Department has advised me that I need to look for a rental property and once the rental property has been approved then Housing will pay the rental bond and two weeks in advance rent.
2. The 2nd deft in these proceedings which is my daughter (named) is currently in the process of an early release for superannuation to be able to assist with living necessities and to be able to relocate our family.
3. I am currently to date looking at a rental property to be able to sort out and work alongside the Department of Housing NSW, which will take some time to do so on an emergency basis.
I would like your honour to take into consideration with the above listed, that I have two small children under the age of 16 and an elderly lady of whom I care for and given my position currently, I have no money to be able to pick up my small children and the rest of my family to be able to seek accommodation overnight. There is no accommodation to accommodate 8 people.
I seek your honour's indulgence to be able to grant me the extra time to relocate and move my family as I have on foot an application currently pending with Department of Housing NSW and be able to look at property rentals urgently.
I do sincerely apologise for the inconvenience this may have caused, however I don't have any more money to be able to pay for legal fees and given the position of this matter I am now finding myself in a battle to be able to relocate my whole family and children.
I want to be able to avoid the embarrassment of eviction on Monday 20/1/2020 at 9.30 am so my children don't have to see what is going on in the process of the sheriffs attending the property."
The application for a stay was opposed by the plaintiff. The defendant indicated that she had approached the Department of Housing for the first time in relation to her accommodation needs on 14 January 2020, after the hearing.
The defendant has been on notice for an extended period that she and the other occupants of the property are to vacate it, on pain of orders of this Court that she would be evicted if she did not. If indeed the defendant is unable to afford alternative accommodation on her own resources, it is concerning that she has chosen to not seek assistance until Tuesday of last week, having instructed her solicitor that she was in a position to vacate the premises by Sunday 18 January 2020.
I concluded that the defendant is not sincere in what she submits, as to her intentions. I have no confidence that, if the Court granted a further stay, the defendant would comply with it, any more than she has complied with prior orders to relinquish possession of the property. The fact that she left her approach to the Department of Housing until the last minute is indicative of this lack of good faith. In light of the history of the matter, there are no grounds on which I should grant the stay of execution of the writ of possession as sought. As noted by Lonergan J at [54], "[t]his Court has to ensure that it does not make orders that are pointless". It is regrettable that the first defendant would place her children in this position.
Accordingly, I declined the application.
[3]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 20 January 2020