Commonwealth Bank of Australia v Sowter [2015] NSWSC 999

Supreme Court New South Wales

Medium Neutral Citation: Commonwealth Bank of Australia v Sowter [2015] NSWSC 999 Hearing dates: 21 July 2015 Date of orders: 21 July 2015 Decision date: 21 July 2015 Jurisdiction: Common Law Before: McCallum J Decision: Execution of the writ of possession stayed up to and including 30 September 2015; leave granted to the plaintiff to reschedule the execution of the writ of possession after that date; leave granted to the plaintiff and the applicants to relist the proceedings on two days' notice. Catchwords: POSSESSION – notice to occupier – requirement for notice to occupier to be served prior to entry of default judgment – dictates of justice – application to stay execution of writ of possession Legislation Cited: Uniform Civil Procedure Act 2005 (NSW), r 36.8 Category: Procedural and other rulings Parties: Commonwealth Bank of Australia (plaintiff/respondent) David John Sowter (defendant) Garry Marshall (first applicant) Kerrie Stevens (second applicant) Representation: Solicitors: Gadens (plaintiff/respondent) No appearance by defendant First applicant in person Second applicant in person File Number(s): 2015/94087 Publication restriction: None

Judgment – Ex Tempore 1. HER HONOUR: These are proceedings for possession commenced in circumstances which are both complex and unfortunate, at least for the applicants today, the occupiers of the relevant property. The applicants are not the registered proprietors of the property and owe no debt to the plaintiff. The application determined in this judgment is their application for a stay of execution of a writ of possession issued following the entry of default judgment against the defendant. The circumstances in which the application is brought are as follows. 2. On 30 March 2015, the Commonwealth Bank commenced the proceedings against the registered proprietor of a property at Darby Falls in the State of New South Wales, one Mr David Sowter. The property is not occupied by Mr Sowter but by the applicants, Mr Marshall and Ms Stevens, with whom Mr Sowter evidently negotiated an agreement for sale of the property in December 2013. 3. Pursuant to that agreement, Mr Marshall and Ms Stevens understood they were entitled to purchase the property on 15 December 2015 for a sum of $250,000. In the meantime, since December 2013, they have (in accordance with the terms of at least their understanding of the agreement) made weekly payments of $250 to Mr Sowter. They understood those payments were being made directly into Mr Sowter's mortgage account. There is uncertainty on the evidence before me as to whether that was the case. 4. In any event, on 1 December 2014 Mr Sowter was made bankrupt. Mr Marshall and Ms Sowter received notice of that fact from the trustee on 28 December 2014. They contacted the trustee as soon as they were able to (having regard to the time of year at which the notice was received), ultimately speaking to him on 14 January 2015. There followed a dispute as to whether they had in fact made the payments they said they had made but ultimately they established to the trustee's satisfaction that they had indeed made regular payments to Mr Sowter in accordance with their agreement with him. 5. According to Mr Marshall, who has represented himself today and who impressed me as a frank and careful person, the trustee assured him and Ms Stevens that he would honour the agreement for sale and told them to continue making their payments to the trustee. However, evidently towards the end of March 2015, the trustee appears to have resolved to allow the bank to proceed to enforce its security, making no further contact with Mr Marshall or Ms Stevens. 6. As already noted, the proceedings were commenced on 30 March 2015. According to an affidavit of service on the court file, the statement of claim was served on Mr Sowter shortly afterwards but (perhaps unsurprisingly in the circumstances) he has not reacted to the service of that process and no defence or appearance has been filed. 7. On 6 May 2015, a notice of motion was filed seeking default judgment for a liquidated claim and for possession of the land. Insofar as it sought judgment for a liquidated claim, it appears the application ought not to have been made, there being no evidence that the plaintiff has obtained leave to proceed against the bankrupt Mr Sowter. So far as the application sought judgment for possession of the land, it appears to have been properly made. In the short time available to hear the present application, I have not investigated that issue but that is my understanding of the law. In any event, it has ultimately not been necessary to determine any question arising on that basis today. 8. The application for default judgment, of course, required that the occupants be served with a notice to occupier before default judgment could be entered. Mr Marshall and Ms Stevens say, and I accept without equivocation, that at no point did the notice to occupier come to their attention. There is, however, an affidavit on the court file in which it is stated that the notice to occupier was left on the land. That may be adequate for the purposes of r 36.8 of the Uniform Civil Procedure Act 2005 (NSW). 9. In any event, that is a further issue which it has not been necessary to determine today. The reason is that, notwithstanding considerable cost and inconvenience they have faced in endeavouring to secure the completion of the purchase of the land, Mr Marshall and Ms Stevens have now reached the view that they should cut their losses and agree to vacate the property (subject to any further negotiations with the bank to complete the purchase). 10. The only order sought today is a stay of the execution of the writ of possession presently scheduled for this Friday (24 July 2015). A stay is sought until 30 September 2015. I accept that is a lengthy period during which to stay the execution of a writ but I propose to accede to the application, for the following reasons. 11. First, as the circumstances I have recited will reveal, Mr Marshall and Ms Stevens have at all times complied with their understanding of their agreement with the bankrupt Mr Sowter. Whether or not the payments made by them since his bankruptcy have ultimately been to the benefit of the bank, the trustee in bankruptcy or Mr Sowter is not established on the evidence before me. What is established, however, is that those payments have been made to the detriment of Mr Marshall and Ms Stevens. The payments were continued on the understanding, allegedly arising from a representation made by the trustee, that they would be allowed to complete the purchase of the property this December. The material before is silent as to what information the bank had on that issue when it commenced these proceedings. But since being made aware of the applicants' position, it appears the bank has flatly refused to engage or negotiate with them as to the prospect of their completing the sale, insisting instead on obtaining possession immediately. That in itself has exacerbated the hardship suffered by the applicants as a result of Mr Sowter's bankruptcy. Their legal advice has been to the effect that, if they wish to pursue a contested claim to the property, they could be "throwing good money after bad". They do not have the resources to take that risk. 12. Secondly, Mr Marshall has put forward a compelling case in any event for a lengthy stay on the basis of hardship. The property is a rural property on which he is presently constructing a substantial trailer. To transport that object in its current state of construction and in current weather conditions would visit considerable further hardship and expense on Mr Marshall and Ms Stevens. 13. For those reasons, although it is an unusually lengthy period for which to grant a stay, I do propose to accede to the application made today. 14. I make the following orders: 1. The execution of the writ of possession served on 18 June 2015 and presently scheduled for execution on 24 July 2015 is stayed up to and including 30 September 2015. 2. I grant leave to the plaintiff to reschedule the execution of the writ of possession after that date. 3. I grant leave to the plaintiff and the applicants, Mr Marshall and Ms Stevens, to relist the proceedings before me on two days' notice by contacting my associate should the need arise in the meantime. 1. I note the indication of Mr Lewin, on behalf of the plaintiff, that the plaintiff will inform the Sheriff of the orders of the court made today.