Permanent Mortgages Pty Ltd v Autore [2014] NSWSC 1204

Supreme Court New South Wales

Medium Neutral Citation: Permanent Mortgages Pty Ltd v Autore [2014] NSWSC 1204 Hearing dates: 26/08/2014 Decision date: 26 August 2014 Jurisdiction: Common Law Before: Campbell J Decision: (1)Upon the undertaking of Anthony Autore, to continue to pay the plaintiff the sum of $6,500 per month until full discharge of the plaintiff's mortgage, the writ of possession issued on 14th July 2014 in respect of the land compromised in certificate of title folio identifier 526/787649 known as 30 Terrell Balgownie is stayed until 5 p.m. 5th September 2014. (2)The costs of today are the plaintiff's costs in the cause. Catchwords: PROPERTY - application to stay writ of possession Category: Interlocutory applications Parties: Permanent Mortgages Pty Ltd (Plaintiff) Regina Francis Autore (Defendant) Representation: Counsel: A Polczynski (Plaintiff) R Tregenza (Defendant) Solicitors: File Number(s): 2013/00168443

Ex Tempore Judgment 1A consent order for possession was made in this matter on 24 April 2014. The terms of that order permitted the issue of a writ of possession which would lie in the Registry, to adopt Mr Tregenza's appropriate phrase, until 12 June 2014. Clearly it was then within the contemplation of the parties that the defendants would be able to refinance the property by that time and fully discharge their indebtedness to the plaintiff. Unfortunately that has not occurred. 2The writ did not issue until 14 July 2014 and the sheriff gave notice of eviction on 22 July 2014. It is to take place tomorrow, Wednesday 27 August 2014, after 10am. 3The proceedings have in fact been on foot since about the middle of last year during which time there has been much hopefulness about the plaintiff's mortgage being discharged, which for various reasons has not been realised. 4The defendants are seeking a stay of the writ nominally for seven days, although the Court is aware that, especially in busy cities like Wollongong, a stay of a writ on the eve of the proposed eviction will often involve longer delay before the sheriff is able to reschedule the eviction. 5The ground of the application for the stay is that notwithstanding past disappointments, the defendants are on the brink of achieving their aim in paying-out their indebtedness to the plaintiff in full. 6It is not without significance that the defendants have continued to make regular monthly payments of $6,500 to the plaintiff mortgagee. I am informed by Miss Polczynski, who appears for the plaintiff, that that is the full amount of the higher interest rate payable on default. 7I am satisfied on the evidence that the defendants have raised the sum of $933,000 towards the refinance. By that I mean they definitely have that amount available from an incoming first mortgagee. There is a difficulty in that the total amount of the indebtedness, including outstanding costs, is $1,163,683.32. Moreover, there is concern on the part of the plaintiff that a valuation obtained back in March 2014 on behalf of a proposed lender was somewhat optimistic. The market value then was put as $1,245,000 and as Miss Polczynski points out that valuation was based, in part, upon the completion of some improvements to the property. 8Mr Tregenza of counsel who appears for the defendants informs me that the improvement was a swimming pool that has been fully paid for and submits that in this day and age an in-ground pool adds little to the value of homes. That may be so. The plaintiff has its own valuation which, because of the urgency with which this matter has come before me, it has been unable to tender, but I allowed Miss Polczynski to inform me from the Bar table that it is not as optimistic as the defendants' valuation. Accordingly, as I have said, the plaintiff is concerned that further delay may lead to a shortfall on any mortgagee sale which will not be entirely mitigated by the continued payment of interest. 9As against those concerns there is evidence which satisfies me, not adopting an unduly optimistic frame of mind, that Mr Autore is on the brink of securing the additional finance necessary to meet the shortfall. That evidence consists of an email chain between a Mr Magagnino, solicitor and Mr Autore showing that a private lender, a Mr Sawan, is prepared to provide substantial funds by way of second mortgage. It seems from the email trail that all of his requirements have been satisfied. There is also a letter from a Mr Nastovski, accountant, that he has clients prepared to lend over $230,000 by way of an unregistered mortgage for a short period of time. 10I observe in passing that the additional funds being sought well and truly exceed the difference between the presently available first mortgage and the amount of the indebtedness. There is no explanation as to why those extra funds are necessary, but I will take it as evidence going towards the probability that the amount necessary to discharge the mortgage will be available and in the short term. 11Mr Autore is a solicitor in private practice and I am told by Mr Tregenza that a very large sum of money in respect of legal fees for a single matter is expected within the next couple of months. Having been in private practice not so long ago, I am conscious of the fact that sometimes those expectations are unrealised. 12Mr Autore also is prepared to undertake to this Court that he will continue to pay the monthly amount of $6,500 not just during the period of any stay but until discharge of the plaintiff's mortgage, whether or not he is successful in his present endeavours to secure the further finance. Given that his livelihood as a solicitor depends upon him honouring such undertakings, I am of the view that his undertaking adds significant weight to the application. 13Naturally the Court hears many of these applications and they often come forward at the last minute. I am conscious that a secured creditor is entitled to realise the security unless the amount of the indebtedness is paid into court. There are, of course, exceptions to that general rule and an exception generally recognised, at least as a matter of practice, is that persuasive evidence of imminent refinance will justify a relatively short stay. That practice makes sense because although the plaintiff-lender may strongly desire to realise its security, refinancing may involve less delay than full exercise of the mortgagee's power of sale. Often in the end permitting an additional short opportunity to complete refinance arrangements operates in the interest of both lender and borrower. 14Accordingly, I am persuaded that some short indulgence should be permitted on the basis of Mr Autore's solemn undertaking. 15I make the following orders: (1)Upon the undertaking of Anthony Autore, to continue to pay the plaintiff the sum of $6,500 per month until full discharge of the plaintiff's mortgage, the writ of possession issued on 14th July 2014 in respect of the land compromised in certificate of title folio identifier 526/787649 known as 30 Terrell Balgownie is stayed until 5 p.m. 5th September 2014. (2)The costs of today are the plaintiff's costs in the cause.