Supreme Court New South Wales Medium Neutral Citation: Westpac Banking Corporation v Reddy [2011] NSWSC 1165 Hearing dates: 05/09/2011 Decision date: 05 September 2011 Jurisdiction: Common Law Before: Garling J Decision: Notice of Motion dismissed Catchwords: PRACTICE AND PROCEDURE - Application for stay of writ of possession - Default for considerable period of time - Adjournment of many previous notices to vacate - No real attempts to address indebtedness - No steps to offer property for sale - No diligent attempts to refinance loan - Notice of motion dismissed Legislation Cited: Real Property Act 1900 Category: Interlocutory applications Parties: Westpac Banking Corporation (P) Edward Devandra Reddy (D1) Susan Mary Carmen Reddy (D2) Representation: Counsel: Mr Bensen (P) Ms Reddy (D2) File Number(s): 2010/71860 Publication restriction: Nil Judgment (EX TEMPORE) 1By a notice of motion dated 5 September 2011, Mrs Susan Mary Carmen Reddy, seeks a stay on the writ of possession for land at Casula in New South Wales for a period of 14 days. 2Mrs Reddy is the second defendant in proceedings brought by Westpac Banking Corporation. Her husband, Edward Reddy, is the first defendant. 3According to an affidavit filed by Mrs Reddy on 5 September 2011, she has received a Notice to Vacate from the Sheriff of New South Wales. The notice is dated 26 July 2011 and it requires the occupiers of the house at Casula, which is the subject of the proceedings, to vacate the premises prior to 10.45am on Tuesday, 6 September 2011, which is tomorrow. 4It is necessary in order to understand whether or not to grant the order which Mrs Reddy seeks to recount some history of this matter. 5Mr and Mrs Reddy are the registered proprietors of the property at Casula. I am informed that it is a house that was built in about 2001 which consists of five bedrooms with the living areas spread over two floors. As well, there is a third floor which consists of a garage. 6In 2006, Westpac agreed to lend to a business called Eddy's General Cleaning and Contractors (New South Wales) Pty Limited, some money. Mr Reddy guaranteed that loan. On 24 March 2006 Mr and Mrs Reddy mortgaged the property at Casula to Westpac to secure the loan to the company and the guarantee which Mr Reddy had entered into. 7On 10 September 2009, the company defaulted on the loan. On 20 October 2009 an order was made that the company be liquidated and a liquidator was appointed. The company continued to be in default of its loan to Westpac at all times after that liquidation. 8Demand was made by Westpac of the defendants requiring them to make the appropriate repayments for the monies which the company owed. A notice pursuant to s 57(2)(b) of the Real Property Act 1900 was served on the defendants by Westpac on 6 November 2009. At that time, the amount of default on the loan was $123,971,67. Default continued. 9On 18 March 2010 a statement of claim was filed by Westpac seeking orders, amongst other things, for the possession of the land at Casula. That statement of claim was personally served on the second defendant, Mrs Reddy, on 21 April 2010 and on the first defendant, Mr Reddy, on 1 June 2010. No defence has been filed to that statement of claim. 10On 26 August 2010, a default judgment was entered in favour of Westpac against both defendants for both the monetary judgment sought in the statement of claim and for possession of the property. On 10 September 2010, a writ of possession was issued with respect to the property. On 15 September 2010 the Office of the Sheriff scheduled an eviction to take place at the property on Tuesday, 5 October 2010 at 11.30am. 11Discussions ensued between Westpac and Mrs Reddy in relation to a proposed refinance of the indebtedness of the defendants to Westpac as a result of which Westpac on two occasions agreed to defer the Notice to Vacate. Ultimately, those discussions did not prove fruitful and at the request of Westpac, on 15 April 2011 the Office of the Sheriff scheduled an eviction to take place at the property on Tuesday, 24 May 2011. That was the third Notice to Vacate. 12The day before the eviction was due to take place, the defendants filed an application to stay the execution of the writ of possession in this Court. The application came before the Court on 27 May 2011. The application was opposed by Westpac and the application for a stay was dismissed by Registrar Bradford on 27 May 2011. 13A further eviction was scheduled to take place on 21 July 2011. On 20 July 2011, a further application was made by Mrs Reddy to this Court for a stay on that eviction. The Court ordered that there be a stay on the eviction until 5 August 2011. The Court also ordered that the plaintiff was able to arrange a further eviction with the Sheriff but not before the 5 August 2011. In effect what occurred was that the court deferred any eviction until some time after 5 August 2011. The Court also made orders about service of any eviction notice. 14At the request of Westpac on 26 July 2011, the Office of the Sheriff scheduled an eviction to take place at the property at Casula on Tuesday, 6 September 2011. Notice of that was given by a text message on a mobile telephone to Mr and Mrs Reddy on 28 July 2011. On 2 August 2011, a conversation occurred between Mrs Reddy and a representative of Westpac's solicitors which satisfies me that Mrs Reddy accepted that she had received the text message informing her about the date of eviction. On that day an email was sent by the Sheriff's Office to Mrs Reddy which attached the written Notice to Vacate. 15On 18 August 2011, the second defendant made arrangements to advertise her 2009 BMW X6 motor vehicle for sale on an internet site called carsales.com.au. This was the first occasion when that vehicle had been offered for sale. 16It also appears that the second defendant together with her husband, the first defendant, who became bankrupt by a sequestration order on 15 June 2011 and remains an undischarged bankrupt, were in contact with a finance broker who is apparently making attempts to obtain a loan from the St George Bank which will be of a sufficient amount to enable the discharge of the obligations of Mr and Mrs Reddy to both the Westpac Bank and also the Commonwealth Bank which holds a home loan. The status of that application is unclear. 17Mrs Reddy informs the court that she has signed all documents which the finance broker has asked her to sign and she understands that they have been or, at least, are about to be, provided to the St George Bank. Mr Abdullah Popal, the finance manager of Mortgage Lane, a broker, has by a letter dated 5 September 2011 confirmed that the broker is in the process of obtaining a loan approval to refinance the Commonwealth Bank home loan and to consolidate the Westpac business overdraft. 18Unfortunately the correspondence from Mr Popal does not indicate when the application was submitted, to whom it was submitted, when it is anticipated the application might be dealt with and nor has it given any information about the ordinary process of the approval and when it might be expected. 19Mr and Mrs Reddy have taken some steps from about 26 July 2011 to obtain the early release of their superannuation benefits. A letter from the Australian Prudential Regulation Authority of 9 August 2011 sets out a variety of information which is required by APRA in order that the request for release of the superannuation benefits can be considered. So far as I know, and from the information given to me, there has been no response to that letter and it does appear that the application stands in abeyance pending the obtaining of the hoped for loan with St George Bank. 20Mrs Reddy has informed the Court today that it would appear the total of monies outstanding to both the Commonwealth Bank and the Westpac Bank is in the order of about $550,000. She has told the Court that a valuation of the property obtained a couple of years ago was in the region of $560,000 to $580,000. She herself estimates that in the event there was a sale of the property in the present market, the property would obtain a price of about $600,000. No other material about the value of the property has been placed before the Court. 21It is also necessary to record that the current application for a loan is being made not just by Ms Reddy but also but her 20 year old son, Edwin, who has employment as an engineer with Qantas. Westpac has put evidence before the Court by way of an affidavit sworn 5 September 2011 by Mr David Awrham, which includes a bankruptcy search obtained today at 11.05am. That bankruptcy search suggests that Mr Edwin Reddy is an undischarged bankrupt. However, Mrs Reddy informs the court this is not so and that the creditor, Gill's Meat Pty Limited, made an error with the name of the person who is the subject of their sequestration petition. 22There is also before the Court a bankruptcy search taken on 20 July 2011 relating to the first defendant, Mr Edward Devandra Reddy, which indicates as I have said earlier, he was made bankrupt on 15 June 2011. A comparison of the two searches indicates that both names are held on the Index under the same administration number, under the same court reference number and all features of each of those searches are, with the exception of the names, Edwin and Edward, are otherwise identical. Mr Bensen who appeared for Westpac, having heard what Mrs Reddy said, indicated he was not in a position to dispute what she said and submitted simply that as the solicitor for Westpac, his firm have done their best to place before the Court the effects of a search of the National Personal Insolvency Index. I am not prepared to conclude in light of the dispute before me that Mr Edwin Reddy is an undischarged bankrupt. 23However, even taking that fact into account I am left in this position. Firstly, there has been default on this loan for a considerable period of time. Secondly, neither the first nor the second defendants have taken any steps at any time to offer the property for sale nor, with the exception of taking some steps to try and obtain a loan which have not yet come to fruition and which seem to have been made at the eleventh hour, have they taken any steps to address their indebtedness to Westpac. 24The Notices to Vacate have now been adjourned on many occasions and a number of notices have now been issued. The current Notice came to the attention of Mr and Mrs Reddy, I am satisfied, on 28 July 2011. That is about five weeks ago. 25It is surprising given the background to the matter and the number of visits to the Court by or on behalf of the defendants that this application has been left to the very last minute. 26I am not satisfied that the steps which have been taken to refinance the loan which is owed to Westpac have been taken with any real diligence. I am not satisfied on the material before me that there is any reasonable prospect the St George Bank will make the loan which is hoped that it will, particularly in light of the amount being sought on the loan and the value of the property about which I am told. I am not satisfied that the defendants, particularly in the absence of any defence to the claim by Westpac, have made any real attempts to address their indebtedness to Westpac. In all of the circumstances, I do not think, in the exercise of my discretion, that it is in the interests of justice as between Westpac and Mr and Mrs Reddy that I grant the orders sought in the notice of motion and further delay the current Notice to Vacate. 27In all of those circumstances I decline to make the order in the notice of motion and I dismiss it. ********** 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: 29 September 2011