Supreme Court New South Wales Medium Neutral Citation: Westpac Banking Corporation v Diagne [2014] NSWSC 1623 Hearing dates: 14 August 2014 Decision date: 14 August 2014 Before: McCallum J Decision: Writ of possession of the land comprised in certificate of title folio identifier 9/248060 being the land situated at and known as 11 Byrne St, South Coogee in the State of New South Wales stayed up to and including 15 September 2014. Writ of possession of the land comprised in certificate of title folio identifier 2/1032744 being the land situated at and known as 150 Enmore Rd Enmore in the State of New South Wales stayed up to and including 15 September 2014. Defendants to pay the costs of the plaintiff's application today Catchwords: POSSESSION - application for stay of writ of possession - stay granted on hardship grounds Cases Cited: G E Personal Finance Pty Limited v Smith (2006) NSWSC 889, Westpac Banking Corporation v Diagne (2014) NSWSC 822 Category: Interlocutory applications Parties: Westpac Banking Corporation (plaintiff) Mohamed Diagne (first defendant) Bineta Diagne (second defendant) Representation: Counsel: B Koch (plaintiff) M Lowenstein (defendants) File Number(s): New matter Publication restriction: None Judgment - ex tempore 1HER HONOUR: Before the court is an application to stay the execution of two writs of possession, one in respect of residential premises in South Coogee and one in respect of commercial premises in Enmore. 2The application is made after the plaintiff, Westpac Banking Corporation, obtained judgment against the two individual defendants, Mr and Mrs Diagne, in the sum of almost $3,300,000 after a trial before Ball J: see Westpac Banking Corporation v Diagne [2014] NSWSC 822. 3The principles to be applied by this court in determining whether to stay the execution of a writ of possession are well known. They were summarised by Johnson J, the former Possession List Judge, in G E Personal Finance Pty Limited v Smith [2006] NSWSC 889, a decision which has been applied on many occasions since. Indeed, the principles his Honour stated are now contained in a practice note applicable to matters in the Possession List. 4His Honour noted at [13] of the judgment that there are three common circumstances advanced in support of a stay application. The first is where a defendant indicates that the proceedings are to be defended. That is not a circumstance here where, as I have indicated, the judgment has been entered against the defendants after a contested trial, albeit one in which I note the defendants appeared for themselves. 5Mr Lowenstein, who appears for the defendants this afternoon, informed me that a notice of intention to appeal against the judgment has been filed, but having regard to the urgency with which the present application is brought, he was not in a position to argue the merits of any appeal. That basis can accordingly be put to one side. 6The second circumstance referred to by Johnson J is where there is a proposal for re-finance. None is put forward in the present case. 7The third basis referred to by Johnson J is where the defendant indicates that the subject property is to be sold. In that circumstance his Honour stated that ordinarily an application should be supported by copies of an agent's sale agreement, a contract for sale of the property, and so on. 8A basis for the present application in so far as the business property is concerned is that it is currently used as the premises for a trading restaurant. There is evidence before the court of a contract for sale exchanged between the defendants and their son. However, Mr Lowenstein frankly acknowledged that the son does not presently have loan approval so as to enable him to complete the purchase. 9The bank was not aware until this afternoon of the proposal to sell the property to the son and, whilst I think accepting that the proposal could properly be the subject of further investigation, was sceptical as to the prospects of that being one which would satisfy the bank. Nonetheless it may be noted that the bank has not had the opportunity to investigate whether the sale of the business and property as a going concern to the son would be an appropriate way of maximising the realisation of the assets over which the bank holds securities. 10As to the domestic property, there is no current proposal for sale, by which I mean no exchanged contract. The defendants propose that a particular agent be retained to assist them with the orderly sale of the house. The bank has indicated that it does not wish to have any such choice visited upon it. 11The evidence put forward by the defendants this afternoon suggests that there will be a significant shortfall between the amount in which judgment was entered by Ball J and the present value of the assets. Interest is currently accruing, according to a statement from the bar table, not supported by evidence in the urgent circumstances in which the bank was brought to court to attend the application without notice, in the order of $21,000 per month. 12On the evidence before me I am satisfied that plainly, leaving aside the possibility that there is some cogent basis for appealing against the decision of Ball J, this is an estate which it will be in the interests of all parties to have realised at the best possible value as quickly as possible. Further, the bank, as submitted by Mr Kosh, has been extremely lenient so far, as the judgment of Ball J records, in allowing several indulgences for a lengthy period of time (see his Honour's judgment from [39]). 13Again, without evidence, but I would accept a representation from the bar table, Mr Kosh tells me that the last payment made against the facilities was on 28 June 2011. 14All of these circumstances point against the grant of a stay in accordance with the principles stated by Johnson J at [13] of his Honour's judgment. However, his Honour did also state from [21] and following that a stay may be sought on hardship grounds. That effectively is in my view the only real basis on which the stay could be granted today. 15The evidence reveals as to the residential premises that they are occupied by the defendants, their three children aged 19, 16 and 13, and the second defendant's aunt and her two children, aged 10. All eight of those people live in the Coogee property and have done so since May 1999. 16One of the children of the defendants is presently in year 11 preparing for the HSC, which it is well known commences in term 4 of year 11, some few months from now. 17In all the circumstances I am persuaded so far as the domestic property is concerned that it is appropriate to grant a stay on hardship grounds. In reaching that conclusion I accept that the bank has shown some indulgence up to this point, but it is impossible for me to judge the circumstances in which forbearance was previously afforded. This is the first application for a stay in respect of a writ obtained following the entry of judgment some months ago. 18While the rate at which interest is accruing lends a measure of urgency, in the circumstances I would nonetheless accept that the hardship case is sufficiently compelling to warrant a short stay. The defendants will have to face up to the fact however that they are going to have to leave this house at some point soon. 19The decision in respect of the commercial premises is more difficult. As noted on behalf of the bank, the prospect of the restaurant trading on as a going concern under the supervision of a receiver must have been considered by the bank and rejected. It does not follow however that the only alternative is to shut the doors tomorrow morning. 20Whilst I accept that the bank is haemorrhaging equity at an alarming rate, it is a matter of common sense that to close the doors of the restaurant tomorrow without the bank having had any opportunity to investigate the prospect of an orderly sale of the premises and the business as a going concern may also in the short term only result in a loss of equal order. 21With some reluctance I have concluded that, for hardship reasons again, and also on the basis that the restaurant may possibly be sold as a going concern, I should grant a stay, again emphasising that it should only be for the shortest period so as to enable the bank to investigate the prospect or viability of the proposed sale to the son, as against the alternative of selling an empty building and losing the goodwill in the restaurant, if there be goodwill of any value. 22In reaching that conclusion I should record that I have had regard to the fact that the restaurant is the source of income and support for the eight people to whom I have referred. 23For those reasons I make orders 1 and 2 in the form of orders handed up. The date in orders 1 and 2 will be up to and including Monday 15 September 2014. 24I grant leave to the defendants to file in court the notice of motion dated today, and the affidavit of the first defendant. I make orders 1 and 2 in the form of orders handed up today. I order that the defendants pay the plaintiff's costs of the application today. ********** 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: 31 December 2014