Supreme Court New South Wales Medium Neutral Citation: Commonwealth Bank of Australia v Elio Coppola [2013] NSWSC 830 Hearing dates: 13 June 2013 Decision date: 13 June 2013 Jurisdiction: Common Law Before: Slattery J Decision: Execution of the writ of possession stayed until 5 July 2013 on condition that outstanding interest payment are made. Catchwords: REAL PROPERTY - possession of land - application for stay upon a writ of possession - writ previously stayed to allow refinancing discussions on condition that interest payments be made to the bank - payments not made - but most of the refinancing now approved. Cases Cited: Fast Funds v Coppola; Coppola v Hall [2010] NSWSC 470 GE Personal Finance v Smith [2006] NSWSC 889 Category: Principal judgment Parties: Commonwealth Bank of Australia (Plaintiff) Elio Coppola (Defendant) Representation: Counsel: Solicitors: Gadens (Plaintiff) Leigh Johnson Lawyers (Defendant) File Number(s): 2009/296515 EX TEMPORE Judgment 1Maria Coppola applies today for a stay of writ for possession over premises in Concord that I will call "number 11" in these proceedings. Unfortunately, when the matter came before the Court for the first time at 12.15 pm today, in a sense the application for a stay was already too late. The Sheriff was executing the writ from midday today and yet I was only asked at about 12.15 pm to stay its execution. 2After the adducing of evidence on behalf of the applicant, I have decided to grant a stay. I have dealt with a number of urgent matters in this duty list and I am now giving judgment at 3.50 pm. Before dealing with the Court's reasons for granting a stay I will deal with a preliminary matter. 3Unfortunately, there was a misunderstanding at the beginning of these proceedings about whether the Sheriff was going to wait whilst these proceedings were being argued. I will review the transcript to ascertain how that misunderstanding arose. The Court assumed from what was said to it by experienced legal practitioners that the Sheriff was waiting and was not executing the writ of possession. It turned out, approximately forty-five minutes into argument, that the Court's assumption did not represent the facts. As soon as that emerged, around about 1 pm, the Court sent a message directly to the Sheriff's Office and a direction was made for the plaintiff's agent to inform the Sheriff that further action should not be taken until the Court had determined this matter. It is most unfortunate that this misunderstanding ever arose and I will review the transcript to see what if anything flows from that. 4The property the subject of the application, "number 11", was owned by the late Mr Elio Coppola and Mrs Maria Coppola as joint tenants and was mortgaged to BankWest. All the relevant legal rights and liabilities of BankWest have now been taken over by the Commonwealth Bank of Australia ("the Bank"). 5I have had something to do with some of these parties and this property in the past: Fast Funds v Coppola; Coppola v Hall [2010] NSWSC 470. I was the trial judge in those proceedings and made some determinations in that case about the credit of various parties that gave evidence before me. However, they seem to be quite different issues; the Bank was not a party to that case and no one has objected to my sitting in this case. 6The principles that apply to considering applications for a stay such as this one have been summarised by Johnson J in the well known case, GE Personal Finance v Smith [2006] NSWSC 889 ("GE Personal Finance"). 7Mrs Coppola is seeking to refinance. So the present case fits into the second category of cases Johnson J identified in GE Personal Finance at [13], [16] and [17]. A defendant seeking to refinance to discharge a debt should provide evidence as to the steps being taken to undertake that refinancing. There is logic in such a case in the defendant being able to retain possession rather than lose it during a refinancing is underway. But the refinancing must be realistic. Normally, proof of the steps being undertaken to refinance will be required on the application for a stay. 8The facts led in support of the application are in a narrow compass. Although number 11 is still in the names of Elio and Maria Coppola, Elio died last year. After his death his executrix, daughter and principal beneficiary, Mrs Gabriella Farmakis, has taken responsibility for the liabilities and interests of his estate. She has now taken an active role in the negotiations about what is to happen next. 9Maria Coppola reads three affidavits, one of Mrs Coppola's finance broker, Mr Rory McDonnell, another of Mrs Gabriella Farmakis and another of Mrs Valda Grant, a tenant in number 11. On the other side, the Bank reads the affidavit of Ms Karina Carter, a solicitor from Gadens. 10The factors against granting a stay are that the application comes very late and there has been default for a lengthy period. Indeed, this application comes about as late as is possible for such an application to be, given that the Sheriff had already started execution at the time I began to hear the case. 11The default history here is poor. So much so that on 4 March this year Campbell J made orders granting a stay for two months and requiring payment of $40,000 by bank cheque in respect of accrued and overdue interest and required the making of mortgage payments for a further two months as a condition of allowing further refinancing discussions to take place. 12What has happened since? From 4 March it seems to me, particularly from Mr McDonnell's evidence, that although the two-month period contemplated by Campbell J has been exceeded, the discussions have resulted in an approval of finance from RAMS Home Loans for a sum of approximately $2.1 million. The $40,000 was paid but not all the mortgage payments have been made. I do not propose to go into all the figures. What is proposed now is that RAMS Home Loans provide a little over $2 million funding to pay out the Bank, and a number of other caveators and holders of rights over the subject property. These proposed arrangements exclude another property, in Elio Coppola's name, which is the subject of a separate mortgage not collateralised with the loan obligations the subject of these proceedings and on which the Bank executed on a writ of possession yesterday. 13A helpful spreadsheet provided to the Court by Mr McDonnell, shows that the funds required to satisfy the Bank and all other creditors with security over number 11, are some $3.04 million. But there is still a shortfall in the order of $100,000 to $250,000 in moneys due to Mr Simon Hall, Moloney Lawyers, G&D Lawyers and Denison Toyer. This shortfall may be able to be bridged using the funds from RAMS Home Loans, funds Ms Gabriella Farmakis offers, and funds which, I am satisfied, there is some evidence will become available from Mrs Coppola's brother, Mr Charlie Buda and from another friend, a Mr Roger Morris. 14Granting a stay seems to be warranted, subject to conditions. It looks like 90% or more of the funds have been approved. And there are advanced negotiations to try and limit the quantum of the claims of the other secured creditors. It seems appropriate that a further opportunity be given to allow these negotiations to be completed. Although the opportunity will be a very limited one. 15However, a further stay should only be given where the Bank's position is brought up-to-date. I will create a regime similar to that which was determined by Campbell J in March of this year: (1)I will adjourn the matter for two weeks before me, when I will be sitting in the Equity Duty List, that is, to Friday 5 July 2013. (2)I will stay the writ of execution until Tuesday 2 July 2013, but on condition that by 5 pm on Tuesday 18 June 2013 the applicants on the Motion, Ms Maria Coppola and Ms Gabriella Farmakis, pay the sum of $17,223.42 to the Commonwealth Bank of Australia. (3)I grant liberty to the parties to make returnable on the adjourned date of 5 July 2013 such applications as they see fit in respect of the third parties who have been mentioned today, namely, Simon Hall, Moloney Lawyers, G&D Lawyers and Denison Toyer Pty Limited. (4)I direct Mr Kelvin, instructed by Leigh Johnson Lawyers, to file a Notice of Appearance by 2 pm tomorrow, 14 June 2013. (5)I grant liberty to apply. 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: 24 June 2013