Supreme Court New South Wales Medium Neutral Citation: Secure Funding Pty Limited v NSW Trustee & Guardian [2017] NSWSC 1588 Hearing dates: 13 November 2017 Date of orders: 13 November 2017 Decision date: 13 November 2017 Jurisdiction: Common Law Before: Hamill J (as Duty Judge) Decision: (1) Pursuant to s 67 of the Civil Procedure Act, the execution of the write of possession is stayed for a period of 28 days. (2)The second defendant is to pay the costs of the plaintiff of today's notice of motion. Catchwords: CIVIL LAW – application to stay writ of possession – relevant considerations – where value of property exceeds amount of debt – where applicant has "in principle" loan agreement to re-finance family home left to her in her mother's estate – where previous stay by agreement and agreement breached – stay granted Legislation Cited: Civil Procedure Act 2005 (NSW) Cases Cited: GE Personal Finance v Smith (2006) NSWSC 889 Category: Principal judgment Parties: Secure Funding Pty Limited (plaintiff/ respondent) NSW Trustee & Guardian (first defendant) Ms Annette Hema (Second defendant/applicant) Representation: Mr S Olynkyk (Plaintiff/Respondent) Mr K Kwan (First Defendant) Ms Annette Hema (Second Defendant/Applicant) Solicitors: Norton Rose Fulbright (Plaintiff/Respondent) NSW Trustee & Guardian (First Defendant) File Number(s): 2017/222305 Publication restriction: None EX TEMPORE Judgment 1. I have before me an urgent application under s 67 of the Civil Procedure Act 2005 seeking a stay of an order for possession on certain real estate, which was left to the second defendant and her brother as part of her mother's will. 2. Probate was granted on 27 February 2017 and the probate documents have been tendered as Exhibit B. Those documents make clear that the estate was almost entirely made up of a property at 126 Eastern Valley Way, Willoughby. The probate document has an inventory of property attached to it and it values that property at $1,550,000. There are other assets referred to in the inventory. They really amount to very little in the overall scheme of things. 3. The first defendant is the NSW Trustee & Guardian. It is represented today by Mr Kwan. Their position is that they will submit to the orders of the court and take no position one way or the other on the present application. 4. As I understand the history of the matter, the present applicant, that is Annette Hema, sought to be and was joined as the second defendant to the proceedings specifically for the purpose of protecting her rights as one of the beneficiaries of the estate of her mother. The small part of the file, which I have been able to obtain in the course of this afternoon indicates that an order joining her was made on 29 September 2017. 5. The plaintiff is Secure Funding Pty Limited, and they have an interest in the land arising from the failure to make repayments under a mortgage pursuant to which they are the mortgagee. 6. The notice of motion brought by the second defendant today, arises as a matter of urgency because the Sheriff is due to take possession of the land tomorrow morning at 10:30 am. I first became aware of the matter about midday today. The record should reflect that due to certain flooding in the Supreme Court's Queens Square building, things like files are rather difficult to come by at the moment. The Registrar, before whom the matter was this morning, has done all they can to put before me the relevant material. I have to say it is a little scanty but I have had the assistance of the legal representative of the plaintiff, as well as Mr Kwan for the first defendant and Miss Hema has tendered an affidavit setting out the circumstances in which this matter comes on so urgently. 7. The application for a stay of the writ of possession is opposed and the basis on which it is opposed is essentially twofold. 8. First, a stay was granted on 3 October 2017 it seems by agreement. The agreement envisaged that if refinancing by the second defendant in order to buy the brother out was not successfully negotiated by 17 October she would voluntarily vacate the premises. So the plaintiff in opposition referred to the fact that the current application, at least on its face and probably in actuality, was a default of that agreement. 9. Secondly, the affidavit of Miss Hema and the application to stay the order is essentially based on the fact that she has now obtained, in principal, approval to refinance from an organisation known as Pepper Money. The agreement sets out a number of conditions to that approval, and the plaintiff's position is (1) that there is no evidence that those conditions can and will be complied with and (2) that some relevant expenses involved in the transfer of the property to the second defendant order (and indeed, to the NSW Trustee & Guardian) such as stamp duty have not been accounted for in the figures provided in the conditional approval. 10. The circumstances in which the Court will grant a stay or writ of possession have been considered by Judges sitting as duty judge on many occasions and the principles have been enunciated in a clear and succinct way in the judgment of Johnson J in GE Personal Finance v Smith (2006) NSWSC 889. I don't propose to go through each and every one of the various criteria that his Honour identified in that judgment. But one of the most significant matters to consider is the exposure of the plaintiff in the circumstances prevailing and by that I mean whether or not, if the stay is granted and (in this case) the refinancing does not occur, the debt owed by, (in this case, the second defendant) is likely to be covered by the forced sale of the property. 11. That consideration strikes me as being a particularly important one in the present case, where the second defendant indicates that she has now, albeit very late in the day, acquired an "in principle" loan agreement or a conditional approval for such a loan and that what she is attempting to do is to salvage her family home. These cases are always difficult and the Court cannot be guided by sentiment. But I think, in this case, I can be guided by the simple mathematics. 12. The debt owed to the plaintiff, I am told, is around $135,000. There are a number of other debts, which are set out in the conditional loan agreement. They add up to, on counsel for the plaintiff's quick mathematics something in the order of perhaps $400,000. There is also an amount of $580,000 approximately, which would have to be paid to the second defendant's brother, who is the joint beneficiary of their mother's estate. That means that there are debts, including the amount that will have to be paid to the brother, of an amount something like $1 million and that is very approximate. 13. The plaintiff's understanding or submission was that the value of the property in question may be around $1-$1.1 million. That would, of course, create significant exposure. However, the valuation provided in the probate document is $1,550,000. If that is close to accurate, then the debt owed by the second defendant (or estate) to the plaintiff, as well as the other debts identified, and interest would be covered. So my assessment, based on the limited material that I have, is that the exposure of the plaintiff is not as great as might at first appear. 14. That consideration and what I take to be the bona fide attempt by the second defendant to refinance satisfy me that, in the exercise of my discretion under s 67, the right thing to do is to stay the execution of the order and writ of possession. Accordingly, on this occasion, I propose to make the primary order sought in the notice of motion, noting that the matter has now been subject to (or, by the time I have finished, will have been subject to) two stays and that it is reasonably unlikely that a further stay will be granted if the plaintiff is unable to arrange refinancing in the period that I propose to stay the writ of possession. 15. I propose to stay the writ of possession for a period of four weeks, and I expect, in reality, that the Sheriff would not be in a position to execute that writ for a couple of weeks beyond that. 16. For those reasons, I make the following orders: 1. (1) Pursuant to s 67 of the Civil Procedure Act, the execution of the write of possession is stayed for a period of 28 days. 2. (2)The second defendant is to pay the costs of the plaintiff of today's notice of motion. ********** 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: 22 November 2017