Supreme Court New South Wales Medium Neutral Citation: Commonwealth Bank of Australia v Salvato (No.3) [2013] NSWSC 320 Hearing dates: 12/03/2013 Decision date: 13 March 2013 Jurisdiction: Common Law Before: Garling J Decision: 1. I order that pursuant to r 6.24 of the Uniform Civil Procedure Rules, Victoria Jane Salvato be and hereby is joined as a second defendant in these proceedings. 2. Upon the second defendant giving the following undertakings to the Court: (a) that the second defendant and her children, Ms XX Salvato and Master XY Salvato, will give possession of the land comprised in Folio Identifier XXXXXXX and known as 1/117 Hopetoun Avenue, Vaucluse, New South Wales 2030 to the first plaintiff by vacating the land and the premises on the land on or before 9.00am on 9 April 2013 and by delivering all keys and other implements of access to the premises on the land to the agent of the first plaintiff, Mr Elliott Placks of Ray White Double Bay, or such other person as the first plaintiff's solicitors may direct in writing at 9.00am on 9 April 2013, such delivery to occur on the land; and (b) to pay to the first plaintiff $2,000 per week starting on 13 March 2013 and continuing whilst ever the second defendant retains possession of the property. Such payment to be deposited into Commonwealth Bank of Australia account BSB XXXXXXX, account number XXXXXXX in the name of Mimmo Salvato marked with the reference "Victoria Salvato" by no later than 12.00pm on the Wednesday of each week starting at 12.00pm on Wednesday 13 March 2013; and (c) to not make any further application for a stay of the execution or other enforcement of the first plaintiff's writ of possession in these proceedings; and (d) upon the second defendant giving the usual undertaking as to damages, order that the execution of the writ of possession for the land is stayed until 10.00am on 9 April 2013 or until such time as the second defendant complies with the undertaking (a) above, whichever happens first, with liberty to the first plaintiff to reschedule the execution of the writ of possession forthwith, such execution not to take place before 10.00am on 9 April 2013. 3. I order that Order 2 is to be automatically vacated if the second defendant fails to comply with undertakings (a) and (b) above. 4. I stand the proceedings over for further directions before me at 9.30am on 11 April 2013. 5. I grant the parties liberty to apply on 24 hours notice. 6. I order the second defendant to pay to the first plaintiff by 5.00pm on 13 March 2013: (a) the wasted costs of scheduling the execution of the writ of possession, such costs fixed in the amount of $567; (b) the first plaintiff's costs of this application fixed in the sum of $2,500, such costs to be paid by depositing the amounts into the Commonwealth Bank of Australia's account BSB XXXXXX, account number XXXXXX in the account name of Mimmo Salvato marked with the reference "Victoria Salvato" (as referred to in undertaking 2(b) above). 7. I further order that the second defendant is to permit access to the property and to do all things necessary to enable such access by any employee, contractor or agent of the first plaintiff to take such steps as it considers appropriate to prepare for the marketing of the land and premises providing that 72 hours' notice is given to the second defendant either by letter, email or text message directly to her or else by letter or email to her solicitor, Mr Jim Dai of Wisdom Lawyers, of the time at which access is required. Catchwords: PRACTICE AND PROCEDURE - Urgent application for stay of Sheriff's eviction notice pursuant to a writ of possession - Significant hardship in circumstances where occupier is unaware of eviction notice - Balancing the rights attached to a writ of possession against the reasonableness of a Court order. Legislation Cited: Civil Procedure Act 2005 Uniform Civil Procedure Rules Cases Cited: Commonwealth Bank of Australia v Salvato, Unreported, 3 December 2012 Category: Procedural and other rulings Parties: Commonwealth Bank of Australia (P1) CBFC Limited (P2) Mimmo Salvato (D1) Victoria Salvato (D2) Representation: Counsel: D A McLure (P1) J Hancock (D1) D Allen (D2) Solicitors: Gadens (P1) Hancocks (D1) Wisdom Lawyers (D2) File Number(s): 2011/143979 Judgment 1The Commonwealth Bank of Australia has judgment for possession of a property at Vaucluse. The registered proprietor, Mr Mimmo Salvato is, and has been for some time, in clear default of obligations to the Bank under two loan agreements which were entered into in April 2006. As a consequence of Mr Salvato's default, the Bank has exercised its rights under a mortgage which was registered over the property. The mortgage was entered into by Mr Salvato as security for the loans. History of the Proceedings 2The Bank commenced proceedings to enforce the mortgage in May 2011. It sought possession and a monetary judgment against Mr Salvato. After initial directions were made and the hearing date vacated at Mr Salvato's request, the Court was told that the parties had engaged in a mediation which had been partly successful. 3As a result of the agreement of the parties on 12 July 2012, this Court granted leave to the parties to file a consent judgment which gave the Bank judgment against Mr Salvato for $1,634,430.79 and interest under s 101 of the Civil Procedure Act 2005. 4On 24 August 2012, the Court having refused an application for an adjournment by Mr Salvato, ordered that the Bank have judgment for possession of the Vaucluse property and gave leave to the Bank to issue a writ of possession. 5On two occasions in 2012 upon the application of the Bank, the Office of the Sheriff of New South Wales fixed, and by letter addressed to both Mr Salvato and the occupiers of the property notified them of, a scheduled date for eviction. The first of these dates was 16 October 2012 and the second was 4 December 2012. 6On 3 December 2012, for the reasons that I gave in light of the undertaking given to the Court by Mr Salvato, I was persuaded to stay the eviction scheduled for the following day until 21 December 2012: see Commonwealth Bank of Australia v Salvato, Unreported, 3 December 2012. 7In short, I was informed that Mr Salvato had entered into a contract for the sale of the property to a Mr Bartholomew Elias. This contract was anticipated to settle, with vacant possession to be provided to the purchaser, on or before 21 December 2012. The stay was sought to enable the contract to be completed and vacant possession given to the purchaser rather than to the Bank. 8The Bank has commenced proceedings alleging Mr Salvato is in contempt of Court for failing to comply with that undertaking. Judgment is reserved on those proceedings. It is inappropriate to make any further comment about them. 9At the request of the Bank, the Office of the Sheriff has scheduled a further eviction of the occupants of the Vaucluse property at 9.30am, 13 March 2013. Mr & Mrs Salvato 10Mr and Mrs Salvato were married in October 2000. They have two children, a daughter who is now aged 12 and a son who is now aged 6. They purchased the property in Vaucluse in 2001 and have all lived there until about the first week of December 2012, when Mr Salvato ceased to live in the property and started living elsewhere. This separation apparently followed a period of marital disharmony. 11In general terms during their marriage, Mr Salvato was the principal income earner and attended to their financial affairs. Mrs Salvato occupied herself fully with the raising of their two children and attending to the domestic side of their family arrangements. In November 2012, Mrs Salvato returned to the workforce and now has a part-time job as a Visual Merchandiser. Present Notice of Motion 12At 2.00pm on 12 March 2013, Mrs Salvato brought an application by Notice of Motion seeking urgently to stay the Sheriff's eviction notice for 13 March 2013. 13The orders ultimately sought in the Notice of Motion were: (a)that Victoria Jane Salvato be joined as a defendant to the proceedings. (b)that leave be granted to file the motion and to make it returnable instanter. (c)that the writ for possession of the property at Vaucluse be stayed for 28 days or until further order; and. (d)such further order as the Court sees fit. 14Mr Allen of counsel, who appeared for Mrs Salvato, sought to support the Notice of Motion upon the sole basis of hardship to Mrs Salvato and her two children if the eviction went ahead as scheduled. The Bank opposed the orders sought. 15It is necessary to briefly consider the relevant factual issues. 16The first, and probably most significant factual basis for the application, was that Mrs Salvato claimed that she had no knowledge of the dispute between her husband and the Bank nor of any of the proceedings in Court between them. As well, she said that she had no knowledge of the contract in which her husband had agreed to sell their home to Mr Elias and give him vacant possession on 21 December 2012. 17The Bank challenged this evidence and submitted that I ought find that Mrs Salvato was lying about her lack of knowledge and, on the contrary, that she was fully aware of what was going on. The Bank pointed to the following matters of evidence and inference to support their submissions. 18Firstly, in May 2011 Mr Wellmeeler, a process server, had placed in the letter box of the property an envelope addressed to the occupier which contained a full set of documents relating to the initial claim for possession. Mrs Salvato, who agreed that she regularly checked and cleared the mailbox on the property, denied receiving these documents. 19Secondly, the Bank pointed to the improbability that each of the following facts and matters, namely Mr and Mrs Salvato having co-habited as husband and wife; Mr Salvato attending a mediation; Mr Salvato going to Court on a number of occasions; and Mr Salvato agreeing to sell the property could have occurred without Mrs Salvato knowing or else even suspecting that something was amiss. 20Thirdly, the Bank pointed to the fact that Mrs Salvato, having received a request so to do on 25 February 2013, telephoned the solicitor for the Bank and left a voicemail message. 21I have some doubt about the evidence of Mrs Salvato that she was completely unaware of the proceedings between her husband and the Bank. 22It seems simply implausible that such things were happening, and she had no knowledge of what was going on. As well, having regard to the ordinary nature of the household, I think the probabilities were that in May 2011 the documents addressed to the occupier came to her attention and that she either gave them to her husband or else he took them. 23However, it is unnecessary in this application to resolve that question because, having observed Mrs Salvato giving evidence, I accept that until 10 March 2013 she was unaware of the consequences that she and her family were facing and, particularly in the absence of seeking or being provided with legal advice, had not identified nor had she confronted the reality of the situation which she was facing. She is now well aware of that reality. 24One part of that reality is that she has made no arrangements for the alternative accommodation for herself and her children. She has made no arrangements for the removal of her furniture and household belongings, much less for the removal of her and her children's clothes and personal items. 25The only possible, immediately available alternative accommodation would be with her parents in the Southern Highlands but that would mean a significant and immediate disruption to her childrens' education and the significant dislocation of them from the community in which they live. 26The Bank properly points to prejudice that will flow to it from any delay to the orderly exercise of their rights, which it has under the Court's order. Discernment 27It is beyond argument that the Court has the power to grant a stay on the Writ of Execution. It is a discretionary power that must be exercised according to the interests of justice. 28On the one hand, there would be significant hardship to Mrs Salvato and her children should the order not be stayed. On the other hand, there will be prejudice to the Bank if a stay is granted. These matters are in tension and it is not possible to resolve them easily. 29In all of the circumstances I am satisfied that to do justice between the parties a stay ought be granted but on very specific terms. These terms are intended to ensure that Mrs Salvato does not profit from her lack of knowledge, and that the Bank's prejudice is addressed and ameliorated. The terms are those which I will shortly enunciate. 30Yesterday, at the conclusion of the hearing of the proceedings, without giving reasons and when reserving judgment, I indicated to the applicant, Mrs Salvato, that she should prepare a draft set of short minutes of order encompassing some terms which had been raised in the course of debate. These terms I have. 31The Bank opposes the grant of a stay whether on any terms or not. However, as I have determined to grant a stay, I have allowed the Bank the opportunity of making any submissions about the terms of the short minutes of order proposed by Mrs Salvato. 32The orders set out have been redacted to accord with the Court's policy on privacy. Such redaction is to the least extent that I regard as appropriate. 33Having received the Bank's submissions on the terms of the short minutes of order, I make the following orders: (1)I order that pursuant to r 6.24 of the Uniform Civil Procedure Rules, Victoria Jane Salvato be and hereby is joined as a second defendant in these proceedings. (2)Upon the second defendant giving the following undertakings to the Court: (a)that the second defendant and her children, Ms XX Salvato and Master XY Salvato, will give possession of the land comprised in Folio Identifier XXXXXXX and known as 1/117 Hopetoun Avenue, Vaucluse, New South Wales 2030 to the first plaintiff by vacating the land and the premises on the land on or before 9.00am on 9 April 2013 and by delivering all keys and other implements of access to the premises on the land to the agent of the first plaintiff, Mr Elliott Placks of Ray White Double Bay, or such other person as the first plaintiff's solicitors may direct in writing at 9.00am on 9 April 2013, such delivery to occur on the land; and (b)to pay to the first plaintiff $2,000 per week starting on 13 March 2013 and continuing whilst ever the second defendant retains possession of the property. Such payment to be deposited into Commonwealth Bank of Australia account BSB XXXXXXX, account number XXXXXXX in the name of Mimmo Salvato marked with the reference "Victoria Salvato" by no later than 12.00pm on the Wednesday of each week starting at 12.00pm on Wednesday 13 March 2013; and (c)to not make any further application for a stay of the execution or other enforcement of the first plaintiff's writ of possession in these proceedings; and (d)upon the second defendant giving the usual undertaking as to damages, order that the execution of the writ of possession for the land is stayed until 10.00am on 9 April 2013 or until such time as the second defendant complies with the undertaking (a) above, whichever happens first, with liberty to the first plaintiff to reschedule the execution of the writ of possession forthwith, such execution not to take place before 10.00am on 9 April 2013. (3)I order that Order 2 is to be automatically vacated if the second defendant fails to comply with undertakings (a) and (b) above. (4)I stand the proceedings over for further directions before me at 9.30am on 11 April 2013. (5)I grant the parties liberty to apply on 24 hours notice. (6)I order the second defendant to pay to the first plaintiff by 5.00pm on 13 March 2013: (a)the wasted costs of scheduling the execution of the writ of possession, such costs fixed in the amount of $567; (b)the first plaintiff's costs of this application fixed in the sum of $2,500, such costs to be paid by depositing the amounts into the Commonwealth Bank of Australia's account BSB XXXXXX, account number XXXXXX in the account name of Mimmo Salvato marked with the reference "Victoria Salvato" (as referred to in undertaking 2(b) above). (7)I further order that the second defendant is to permit access to the property and to do all things necessary to enable such access by any employee, contractor or agent of the first plaintiff to take such steps as it considers appropriate to prepare for the marketing of the land and premises providing that 72 hours' notice is given to the second defendant either by letter, email or text message directly to her or else by letter or email to her solicitor, Mr Jim Dai of Wisdom Lawyers, of the time at which access is required. ********** 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: 10 April 2013