National Australia Bank Limited v Piromalli [2013] NSWSC 35

Supreme Court New South Wales

Medium Neutral Citation: National Australia Bank Limited v Piromalli [2013] NSWSC 35 Hearing dates: 22/01/2013 Decision date: 22 January 2013 Jurisdiction: Common Law Before: McDougall J Decision: Execution of writ of possession stayed. Catchwords: PRACTICE & PROCEDURE - judgments and orders - application for stay of execution of writ of possession - hardship Category: Procedural and other rulings Parties: National Australia Bank Limited (Plaintiff) Cathy Piromalli (Defendant) Representation: Counsel: N Minassian (Solicitor) (Plaintiff) PW Bates (Defendant) Solicitors: Gadens Lawyers (Plaintiff) Margiotta Solicitors (Defendant) File Number(s): 2011/12258

Judgment - on application for stay on writ of possession 1HIS HONOUR: The plaintiff (the bank) advanced money to the defendant (Mrs Piromalli) and Mrs Piromalli gave the bank a mortgage over her home to secure repayment of the money lent. Mrs Piromalli fell into default. As long ago as May 2011, the bank obtained default judgment for possession. 2A writ of possession has issued and there have been six prior attempts to execute it. On each occasion, either by consent or following a hearing in court, execution was stayed. 3Execution of the writ was fixed for 9am today. At approximately 5pm yesterday, Mrs Piromalli's solicitor notified my associate that Mrs Piromalli wished to make a further application for a stay. At his request, I fixed the hearing of the application for 8am. For reasons that remain unexplained, neither the solicitor nor counsel instructed by him was available at 8am. Quite apart from the discourtesy (both to the Court and to the plaintiff's solicitor) the result was that the hearing was truncated and the Sheriff had to be asked to "cool his heels" on the sidewalk until I could give a decision. 4I came to the view that there should be a further stay, but on terms that the bank would be at liberty forthwith to arrange for the execution of the writ as soon as possible after 5 February 2013 (a fortnight from today). I said that I would give reasons for doing so. These are my reasons. 5From Mrs Piromalli's perspective, the history of the matter is entirely unsatisfactory. It is plain that she has had significant problems with credit, and that her inability to resolve those problems has caused very significant delays in her attempts to refinance the loan, and thereby to pay out the bank. None of that can be attributed to the bank. On the contrary, the bank has done what it can to assist, including by consenting the stays on at least two occasions. It is hardly surprising that, this time, having regard both to the history and to the lateness of the hour, the bank did not consent again. 6The basis on which the stay was sought is that Mrs Piromalli is very close to negotiating refinance in a sum which will enable her to pay out the bank. She has already received an unconditional approval for a loan of $408,000. That sum, give or take amounts which should pose no obstacle to settlement, is sufficient to pay out the amount claimed by the bank. I might note that Mrs Piromalli disputes the payout figure. However, that is not a basis for postponing execution: unless it can be shown that the amount fixed was utterly unreasonable and in effect stipulated simply to ensure that the defendant would not be able to settle. There is no suggestion of that in this case. On the contrary, I am satisfied, at least prima facie, that the bank has justified the amount that it claims. I am satisfied, further, that Mrs Piromalli's solicitor would have been better advised to spend his time seeking to procure the amount needed rather than nitpicking over the quantification. 7Be all that as it may, the obstacle to settlement is not just the amount claimed by the bank. There are two caveats lodged against the title to the land. One caveator has provided a withdrawal of caveat which, it is agreed, is registrable. That disposes of his claim (at least, in terms of settlement). 8The other caveator holds an unregistered second mortgage. Its solicitor has said that his client will withdraw its caveat provided it is paid $20,000 on settlement. Unfortunately, Mrs Piromalli does not have access to $20,000. Thus, unless she can extend the amount of her present approval, from $408,000 to at least $428,000, settlement will not occur. 9In circumstances where Mrs Piromalli holds an unconditional approval for $408,000, and where the incoming mortgagee is prepared to settle on that basis, it cannot be said that her attempt to negotiate for an extension of the approval is to be characterised as utterly pointless. The incoming mortgagee has procured a valuation which is said (by third hand or remoter hearsay) to be in the sum of $510,000. Thus, from the incoming mortgagee's perspective, there is probably adequate security for an advance up to about $430,000. 10I should add that the bank has obtained a "kerb side" valuation in the sum of $430,000. It is not possible to resolve the differences of opinion as to value. I would have thought, however, that if the incoming mortgagee is prepared to act on a valuation of $510,000, it presumably has some reason to think that the valuation may not be too far out. 11Of course, Mrs Piromalli's negotiations with the incoming mortgagee could have continued, and settlement could have occurred, even if the execution of the writ had not been stayed. The bank, very properly, indicated that if the writ were executed, it would nonetheless hold further enforcement action for the period of time sought by Mrs Piromalli to enable her to find the money needed. 12If the matter went no further, then I would have been strongly inclined not to order any further stay. I say that because of the repeated history of stays and broken promises, and because I am satisfied that even execution of the order for possession would not have prevented refinancing if a sufficient amount of money could have been obtained. 13There are however other factors. The property in question is Mrs Piromalli's family home. She lives there with her aged father. He has very significant health problems, including severe depression and, it is said, suicidal tendencies. It is clear, I think, that execution of the writ would not improve the mental condition of Mrs Piromalli's father. 14Further, Mrs Piromalli's daughter has health concerns. She has been diagnosed with hemifacial spasms and is receiving treatment. I am not sure what that condition is, but nonetheless, I think, it is open to infer that it would not be improved had she been put out of her house. 15It is a matter of concern that Mrs Piromalli waited, literally until the last moment, to move for a stay. She has known, through her solicitor, for more than a month of the amount required by the bank. She knew, therefore, that the amount approved by the incoming mortgagee would not be sufficient both to discharge the amount required by the bank and to satisfy the second mortgagee, so as to procure withdrawal of its caveat. As I have said already, it would have been far better for Mrs Piromalli and her solicitor to bend their efforts to finding the extra money, rather than wasting time with what in my view were futile quibbles about the payout figure, based on an entire misunderstanding of the statements provided by the bank. 16Nonetheless, in my view, the very severe hardship that would be caused to Mrs Piromalli was a powerful factor. On one view, that hardship is of her own making. But hardship accrues not only to her but also to those members of her family (her father and her daughter) who live with her. There is no reason to think that in any way those persons have contributed to the hardship. They would be truly innocent victims if the stay had not been granted. 17I take into account also that it does seem that there are reasonable prospects of obtaining the funds required, and that this can be done within the next fortnight. Thus, it cannot be said that the stay is merely postponing the inevitable. On the contrary, I think, it can be said that the stay may very well lead, in the near future, to satisfaction of the bank's claim. 18There is another consideration. If the bank's valuation is correct, then enforcement by the bank is likely to lead to a shortfall. Thus, in a very real sense, if Mrs Piromalli is able to obtain the money necessary, it will be to the bank's advantage (again, on the assumption that its valuation is correct). I acknowledge of course that Mrs Piromalli could have proceeded even if the writ had been executed. But as a matter of reality, if she were put out of her home and forced to find alternative accommodation, her ability to attend to settlement of her financial affairs is likely to have been diminished very significantly. 19For those reasons, on balance (and the balance was very fine indeed) I concluded that it was appropriate to order a stay. However, I want to make it perfectly plain that from my perspective this is the very last opportunity that ought be extended to Mrs Piromalli. I accept of course that other judges may take different views. I accept, further, that circumstances may arise between now and 5 February which might justify a further stay. But they would need to be extraordinary circumstances indeed. In short, from my perspective, Mrs Piromalli has been given one last opportunity to refinance her indebtedness. 20It was for those reasons that I made the orders I did.