Perpetual Limited v Narayan [2013] NSWSC 39

Supreme Court New South Wales

Medium Neutral Citation: Perpetual Limited v Narayan [2013] NSWSC 39 Hearing dates: 22/01/2013 Decision date: 22 January 2013 Jurisdiction: Common Law Before: McDougall J Decision: Execution of writ of possession stayed for one month. Catchwords: PRACTICE AND PROCEDURE - judgments and orders - application for stay of execution of writ of possession - hardship. Texts Cited: Practice Note SC CL 6 Category: Procedural and other rulings Parties: Perpetual Limited (Plaintiff) Pradeep Narayan (First Defendant) Sashi Narayan (Second Defendant) Representation: Solicitors: Galilee Solicitors (Plaintiff) Sashi Narayan (Second Defendant) File Number(s): 2012/161266

Judgment - ON APPLICATION FOR STAY 1HIS HONOUR: The defendants are indebted to the plaintiff in an amount exceeding $666,000. That indebtedness is secured by a first registered mortgage over the defendants' house. That house is occupied, not only by the defendants, but also by the aged mother of one of them, and (at least in recent times) by their son. It is also occupied by their daughter, who attends a school very close by. 2The defendants have not made any payments against the mortgage debt since February 2012. The plaintiff commenced proceedings for possession. Ultimately, after delays to which I will return, the defence filed by the defendants was struck out, and the plaintiff given leave to apply for a writ of possession. That happened on 8 November 2012. 3There were delays in effecting service on the first defendant. An affidavit of a process server says that the process server served the second defendant, Mrs Narayan, but that Mrs Narayan would not permit the process server to see the first defendant, her husband, because of his state of health. 4Thereafter, an order for substituted service was made, and the statement of claim was taken to be served on Mr Narayan on 11 July 2012. 5At that time, or a little before, the defendants made a complaint to the Financial Ombudsman Service. That effectively placed the proceedings on hold. That complaint was resolved against the defendants. However, what the plaintiff calls a "no recovery blackout period" applied for a month thereafter, until 9 August 2012. 6The defendants have a history of not appearing at directions and other hearings, and of giving very late notice of their asserted inability to do so. 7Mrs Narayan makes complaints about the treatment she has received at the hands of the plaintiff's employees. Those allegations are denied. It is not necessary to go into their detail. It is sufficient to state that they would disclose no possible basis for ordering a stay, even if they were shown to be correct. 8It is clear that, at present, the defendants cannot discharge the loan. It is equally clear that they cannot offer any lump sum by way of reduction of the arrears. Mrs Narayan has offered to make payments of $4,000 per month over the period of the stay, but it is entirely unclear how she will be able to afford that. She says that a business that she has recently started, from home, will provide some cash, and that her son will contribute. Further, she suggests, her son may be in a position to "take over" the mortgage in about six months' time. 9As Practice Note SC CL 6 makes clear at [29], the usual circumstances which would support a stay of execution of a writ of possession are: (1) that the loan is to be refinanced; (2) that the property is to be sold; (3) that the proceedings are to be defended; or (4) hardship. 10Of course, there may be other matters that justify a stay. However, in this case, the first three matters are irrelevant, and no basis other than hardship has been asserted. 11The plaintiff's evidence suggests that the value of the property is somewhere between $580,000 (a value dating back to June 2004) and $680,000 (an assessment made by the defendants in November 2012). Even if the value of the property were taken to be at the top of that range, bearing in mind the present amount of the debt and the accrual of interest (at a rate of about $4,000 per month), together with the costs of sale, it is clear that a sale at $680,000 will result in a shortfall. It is equally clear that the shortfall will increase if sale is delayed. 12There is no doubt that the defendants and their family members will suffer very significant hardship if a stay is not granted. Mr Narayan has very serious medical problems. He has substantial and no doubt extremely painful lower back injuries. The medication that he is taking affects him badly. In addition, it is said, he has been diagnosed with prostate cancer. 13Mrs Narayan's mother is aged about 90. She has contributed a sum of money to constructing a "granny flat" for her occupancy. If the writ is not stayed, she will lose the benefit of that expenditure. 14The daughter attends the local school. She is happy there. It is likely that her life will be disrupted significantly if the defendants are forced to move out on short notice. 15Mrs Narayan has started the business to which I have referred. She has remodelled her kitchen to enable her to carry on some form of catering business, making snack food which is sold through nearby outlets. She thinks that the business will be profitable. However, she has produced no evidence to show what its trading history is. 16If the order is executed, then Mrs Narayan will lose the benefit of the work that she has done on her kitchen, and it is likely - indeed, I would think, inevitable - that she will be unable to carry on that business. 17Finally, in this regard, it is necessary to note that the notice to vacate was issued on 17 December 2012. Mrs Narayan said, and I accept, that the defendants did not receive it until 8 January 2013. That means that they have had effectively sixteen days to organise their affairs (execution of the writ is scheduled for 24 January 2013). 18In the ordinary way, I would refuse the application for a stay. The defendants' financial position offers absolutely no assurance that the plaintiff's loan can be repaid. On the evidence, the only source of funds for repayment is the sale of the house. That is the very thing that the defendants wish to avoid. I do not regard as at all convincing the proposition that the defendants' son may "take over" the mortgage. There is no evidence to suggest that he has any ability to do so. 19On the other hand, particularly having regard to the time of year, I do accept that sixteen days is a very short time for people in the position of the defendants and their family members living with them to organise to move home. In those circumstances, as a matter of hardship, I am prepared to grant a relatively short stay. I am certainly not prepared to stay execution for the period of six months, or alternatively "even three months", that the defendants request. It seems to me that the appropriate balancing of the competing claims, giving due recognition on the one side to the plaintiff's legal rights and on the other to the defendants' hardship (and the hardship of their family members) is to grant a stay for a period of one month. I wish to emphasise that this is done on the ground of hardship, to enable the defendants to organise their affairs. 20It may be - I express no view - that over that time the defendants will be able to come up with some more concrete proposal, supported by appropriate and persuasive evidence, to show that they have some real prospects of meeting at least the minimum monthly interest obligations on the loan, and in the relatively short term of refinancing it. I have no doubt that the plaintiff will listen to any such suggestion; and I have no doubt that it could be put before a Judge of the Court should the need arise. But I wish to emphasise that if this is to happen it needs to happen in the very near future and not only two days before the expiry of the stay. 21For those reasons, I order that execution of the writ of possession presently scheduled for 24 January 2013 be stayed up until and including Friday 22 February 2013.