Prime Capital Securities Pty Ltd v Seven 8 Six Pty Ltd (No 2) [2017] NSWSC 1340

Supreme Court New South Wales

Medium Neutral Citation: Prime Capital Securities Pty Ltd v Seven 8 Six Pty Ltd (No 2) [2017] NSWSC 1340 Hearing dates: 19 July 2017 Decision date: 19 July 2017 Jurisdiction: Common Law Before: McCallum J Decision: Execution of writ of possession stayed; noted that from today the plaintiff is at liberty to approach the Sheriff with a view to obtaining a further eviction date not before 9 August 2017 Catchwords: POSSESSION – application for stay of execution of a writ of possession – no question of principle Cases Cited: GE Personal Finance Limited v Smith [2006] NSWSC 889 Category: Procedural and other rulings Parties: Prime Capital Securities Pty Ltd (plaintiff) Seven 8 Six Pty Ltd (defendant) Representation: Counsel: R Fishburn (plaintiff) T Cleary (defendant)

Solicitors: Summer Lawyers Pty Ltd (plaintiff) No solicitor for defendant File Number(s): 2017/101198 Publication restriction: None

Judgment 1. HER HONOUR: Before the Court is an application for a stay of execution of a writ of possession. The background to the application may be summarised as follows. 2. The proceedings were commenced on 4 April 2017. Judgment for possession was granted on 20 April 2017 and a writ of possession issued on 2 May 2017. The writ was scheduled for execution on 19 June 2017. On 15 June 2017 the defendant obtained a stay of execution of the writ until 22 June 2017. That stay was granted by a deputy registrar in chambers. An order was made that any notice of motion seeking a further extension of the stay, together with any supporting affidavit, be filed and served by 5:00pm on 16 June 2017. That did not occur. However, on 22 June 2017, the date on which the stay expired, the principal of the defendant, Mr Fahmi Hussain, applied to the Registrar for a further stay on the grounds set out in an affidavit sworn that date. 3. The affidavit addressed Mr Hussain's attempts to obtain finance and separately identified hardship grounds for a further stay. It may be accepted, as submitted by Ms Fishburn on behalf of the plaintiff, that the evidence in support of the application on that date was relatively thin. 4. The Registrar was not prepared to grant a further stay but noted that in the ordinary course the time between the approach to the Sheriff to have a writ executed and the scheduling of an eviction is four to six weeks. As already noted, that exchange occurred on 22 June 2017. The order entered, according to the court's records, was: "Leave to the plaintiff to approach the Sheriff to schedule an eviction on or after 13 July 2017." 5. The evidence before the Court today reveals that on 6 July 2017 Mr Hussain received a telephone call from his father, who occupies the property, stating that the Sheriff had served notice of an eviction scheduled for tomorrow, 20 July 2017. Mr Hussain states that he was surprised by that because he had understood the Registrar to have made an order the effect of which was that the plaintiff was not permitted to approach the Sheriff to reschedule the eviction until 13 July 2017. On that basis Mr Hussain had expected the scheduling of the eviction to occur at a later point in time. 6. On the application today each party has been represented by counsel, being the same counsel as appeared before the Registrar on 22 June 2017. They each came away with a different understanding as to the intention of the Registrar's order. The order is recorded in a record of proceedings included in the court file in the familiar handwriting of the Registrar in the terms I have quoted above. Accordingly, I apprehend the Registrar's intention was in accordance with the understanding that the plaintiff had of the order, rather than the understanding that counsel for the defendant and Mr Hussain took away from the hearing. However, I accept that there could have been confusion in their minds about that issue and that Mr Hussain might well have expected the eviction to be scheduled for a later date. 7. The basis for the application today is twofold. Mr Hussain, in a further affidavit sworn today, provides further detail as to the steps he has taken to obtain refinance, annexing a copy of a letter from Lumley Finance and Loans dated yesterday confirming approval of a loan application for a loan in the amount of $1.125 million for a term of 12 months. Mr Hussain's affidavit also reiterates the earlier basis for his application on the grounds of hardship to be suffered by his parents. 8. Each of those grounds is a recognised basis on which a stay might be granted in an appropriate case in accordance with the principles stated by Johnson J in GE Personal Finance Pty Ltd v Smith [2006] NSWSC 889. That decision has been applied many times and is now reflected in the Possession List Practice Note SC CL 7. 9. The application was vigorously opposed. Ms Fishburn, who appears for the plaintiff, submitted that as to the proposed refinance the letter from Lumley could give the court no comfort as to the existence of an unconditional loan offer. She noted that in the concluding paragraph of the letter Lumley expressly reserves the right to withdraw from the loan at any time until the loan is settled "should any matters become apparent which, in the opinion of Lumley Finance or its agents, makes it undesirable for the lender to proceed to settlement". 10. Mr Cleary, who appears for the defendant, submitted that the letter should be understood as an unconditional offer. The effect of his submission was that if there was any condition precedent to the offer it would be stated on the face of the letter. 11. Whilst it is difficult to know on the strength of the limited material before me, I think the position is probably somewhere halfway between the two positions contended for by the parties. In my view the letter is unconditional in the sense that it does not expressly state any condition precedent to the offer. Conversely, it is plain that Lumley reserves to itself a let-out in the event that further information beyond that which has been provided to it comes to light. 12. Doing the best I can, I would assess the letter as providing a reasonable measure of comfort that there is at least a substantial prospect of an amount of $1.125 million being advanced to the defendant within a relatively short period. It is, of course, not fail-safe. 13. A second issue addressed by Ms Fishburn in respect of the proposed refinance was that the amount to be advanced will not cover the amount owed. Again, owing to the urgency with which the application was brought, the evidence on that issue was unclear. The defendant has been proceeding on the assumption that the payout figure as at May was in the order of $1.125 million. The plaintiff says that today the payout figure is in the order of $1.18 million, with the result that the amount to be advanced by Lumley will reflect a $55,000 shortfall on the amount owed. Conversely, Mr Cleary submitted that there is no suggestion that the security property, if sold, would result in a shortfall, and that was not disputed by the plaintiff. 14. On finance grounds alone I would assess the application as being one evenly balanced. I accept that the evidence is not entirely satisfactory, but on the other hand it is not a case where there is no prospect of refinance being obtained within a relatively short period. 15. Turning then to hardship, Ms Fishburn submitted that the evidence was inadequate to cause the Court to think that there was a proper basis for extending any further period of indulgence to the defendant. The hardship case was that the elderly parents of Mr Hussain, who is the principal of the defendant company, have occupied the house for some thirty years and that the mother in particular has medical issues which are substantiated by evidence provided in support of the earlier affidavit. There is an assertion that the father also suffers from heart difficulties, but I accept there is no medical evidence to support that contention in the affidavit. Ms Fishburn submitted that the elderly parents of a company director have no entitlement to occupy a property owned by the company. In my respectful opinion, the proper analysis is that they are entitled to occupy that property until the point when the plaintiff in these proceedings is entitled to take possession of it and that is the very issue for determination today. 16. I think it would be inconsistent with the principle recognised in GE Personal Finance at [21]-[23] to suggest that the court should simply ignore the position of elderly members of the community. Again, whilst I accept that the evidence is thin, in my view a proper basis is established for the court, showing some compassion for the circumstances of elderly, unwell people in the community and having regard to the financial evidence that is before the court, which suggests that the position is not hopelessly pitted against the interests of the plaintiff, to afford a short further period for the occupants of the property to remain in occupation of it in the hope that the financial arrangements may be settled within that short period. For those reasons, I consider that the application should be granted. 17. The notice of motion sought a stay until 2 August 2017 but Mr Cleary asked that the stay be for a further period of a week, having been taken by surprise by the information that the plaintiff contends the amount to be advanced by Lumley will be insufficient to meet the payout figure on the loan. For those reasons, I order that there be a stay of the execution of the writ issued on 2 May 2017 until 2 August 2017. 18. The plaintiff also noted the lateness of the application. That is a consideration referred to by Johnson J in GE Personal Finance at [12] and [28]. It should be noted that what his Honour referred to was the need in the case of a late application for a defendant to explain his or her action or inaction prior to making the application. It was not suggested that delay in itself should pose an impediment to the granting of appropriate relief. 19. In the present case Mr Hussain explained, amongst other things, that in the face of his surprise at what he perceived to be early scheduling of the further eviction, rather than approaching the court immediately he would attempt to expedite his efforts to obtain finance with a view to resolving the matter. While delay is a relevant consideration in any procedural application, a difficult balance is often faced by borrowers of the kind faced by Mr Hussain in this case, that is, the need to balance the undesirability of approaching the Court and incurring further costs, usually including the lender's costs as well, with optimism in attempts to obtain refinance. I did not think the lateness of the present application should in itself pose a hurdle to the relief sought. 20. I order the stay and secondly note that from today the plaintiff is at liberty to approach the Sheriff with a view to obtaining a further eviction date not before 9 August 2017.