Supreme Court New South Wales Medium Neutral Citation: Friend v Reavill Farm Pty Ltd [2018] NSWSC 1978 Hearing dates: 18 December 2018 Date of orders: 18 December 2018 Decision date: 18 December 2018 Jurisdiction: Common Law Before: Davies J Decision: 1. Defendants' notice of motion dated 17 December 2018 dismissed. 2. Defendants to pay Plaintiffs' costs of the motion. Catchwords: REAL PROPERTY – possession of land – writ of possession – stay of writ – third application by defendants for stay on the basis of refinancing – reliance on same letter from broker as in previous application – no certainty that refinance will be forthcoming – prejudice to plaintiffs – delay in marketing of the land – application refused Legislation Cited: Nil Cases Cited: Friend v Reavill Farm Pty Ltd [2018] NSWSC 1321 Category: Procedural and other rulings Parties: Jeffrey Friend (First Plaintiff) Patricia Anne Holt (Second Plaintiff) Reavill Farm Pty Ltd (First Defendant) Tucki Hills Pty Ltd (Second Defendant) Representation: Counsel: M Gunning (Plaintiffs) B Nott (Defendants) Solicitors: Parker & Kissane Solicitors (Plaintiffs) Self-represented (Defendants) File Number(s): 2018/174190 Publication restriction: Nil Judgment 1. The defendants apply by a notice of motion filed in court yesterday seeking in substance that all enforcement actions are stayed. 2. The background to the proceedings is set out in the judgment of Harrison J in Friend v Reavill Farm Pty Ltd [2018] NSWSC 1321 given on 29 August 2018. In that judgment, Harrison J found that the defendants entered into a loan agreement and mortgage on the 27th of July 2016 to borrow $785,000 for a twelve month period. Defaults occurred during the twelve month period, but the principal default relied upon by the plaintiff in seeking summary judgment against the defendants was a failure to repay the principal on 26 July 2017. Justice Harrison gave judgment for possession of the properties and judgment in the sum of $879,556.24. 3. The defendants applied to stay execution of the judgment to enable them to refinance the loan. Justice Harrison said at [9]-[10] of his judgment: [9] In my opinion the defendants have had more than sufficient time to arrange for the discharge of their mortgage to the plaintiffs. Their attempts to do so should have begun even before the time set for repayment of the monies due at the expiration of the original term. The defendants contend that they need a further couple of weeks to arrange an alternative lender. If that is currently a reasonable estimate of the time required within which to locate and instruct a prospective alternative source of finance, it was presumably also a reasonable estimate at some time long before now. In other words, it is apparent that the defendants have sat on their hands when the need for action was staring them in the face. [10] It is difficult in such circumstances to conclude that the defendants are entitled to, or should be given, any further leeway. The time has now passed beyond which all or any attempts to substitute their lender should have been concluded. 1. Nevertheless, his Honour stayed execution on the possession judgment until 7 September 2018. 2. At some point, it appears the plaintiffs obtained a writ to seize goods of the defendants to enforce the monetary judgment they obtained. 3. On 30 November 2018, the solicitors for the plaintiffs wrote to the defendants saying that execution of the writ of possession would be effected unless payment of the full amount outstanding was received. That appears to have led to a further application by the defendants for a stay. That application came before Harrison J on 3 December 2018. That application was based on what was said to be an offer of finance evidenced in a letter from the defendants' broker Axiom Mortgage Solutions dated 30 November 2018. That letter said that the broker confirmed a loan approval from investors in two amounts totalling approximately $950,000, with settlement to occur on or before 22 December 2018. 4. Justice Harrison refused the further stay, and in an email from his Associate to the parties subsequently noted that the defendants indicated that they would be in a position to discharge all existing indebtedness to the plaintiffs with the assistance of a refinancier by no later than 4pm on Friday 14 December 2018. 5. That finance did not become available by that date, and when further threats were made by the plaintiff to enforce their judgment the present application was made seeking until 22nd December 2018 in accordance with the same letter from Axiom. 6. When the proceedings were before me yesterday, I made enquiries about the execution of loan documents and mortgage documents. I was informed by Belinda Nott, who was authorised to appear on behalf of the defendants, that it was not possible for these documents to be signed until settlement figures had been provided by the plaintiff. There was a condition set out in the letter from Axiom which required copies of the most recent loan statements to confirm payout figures. Ms Nott informed me that there were no loan statements, but it was necessary for her to obtain a payout figure. 7. In her submissions both yesterday and this morning, Ms Nott asserted that Mr Champion, a director of the defendants, in a conversation with Sandra Binney of the plaintiffs' solicitors, had sought a payout figure. She said that the lenders will not generate loan documents until a payout figure is provided. 8. In an affidavit sworn 18 December 2018, a draft of which was forwarded to the defendants yesterday, the solicitor for the plaintiffs, Kelly Waring, says that on 17 December she received an email from Belinda Nott at 7.25am which stated: "We await your prompt reply regarding settlement figures." Ms Waring said that that was the first request which had been made by the defendants for settlement figures or a specific payout figure since the letter sent by her to the defendants on 30 November 2018. Ms Waring also said that Ms Binney informed her that, to the best of her recollection, Mr Champion did not request a payout figure in a conversation he had with her on 23 November. Certainly, her file note of the conversation makes no mention of that matter. 1. Mr Champion has sworn two affidavits in support of the present application, the second of those being this morning, 18 December 2018. Mr Champion says nothing in that affidavit to contradict what Ms Waring has said that the first time settlement figures were sought was in the email from Ms Nott yesterday at 7.25am, nor does he say anything about any other conversation with Ms Binney where settlement figures were requested by him. Mr Champion says nothing in his affidavit to suggest that the lack of a payout figure was the cause of any delay in obtaining the finance. 2. More significantly, Ms Waring relates a conversation yesterday with the broker, Mr Steve Goodman, where Mr Goodman said this: The defendants had this refinance a while back now and then they put a stop to it, but they came back to me not long ago. I think they told me you were going to take the property and they asked if the finance was still good to go. I've been trying to work to get it happening talking to my guy in Sydney. 1. The solicitor asked Mr Goodman if the lender had a solicitor that she could talk to. Mr Goodman said: No, I use guys in Bundall and I haven't yet sent anything to them for preparing. It will have to go to them yet and, look, I guess it's not likely they will be able to get anything done before Christmas. 1. Ms Waring subsequently sent an email to Mr Goodman yesterday referring to their conversation and asking: Would you please confirm whether any mortgage documents have been prepared in relation to the proposed incoming mortgagee in relation to those lots and advise of any other steps which are required before this matter will be ready for settlement. 1. Mr Goodman replied in an email this morning saying: At this juncture I am not in a position to achieve this deadline despite a concerted effort by all related parties. He went on to say by whom the legal documents were prepared, and then said this: I am close to finality and investor commitment, albeit stalled by temporary inaction and eviction from the proposed security property. I will need more time to confirm the commitment and facilitate mortgage documents via an appointed NSW solicitor. … I cannot hold up the court process other than seek the Judge's compassionate review for an extension so close to Christmas. Realistically a formal 21 day deferment is nominal and I would suggest Reavill Farm pay a month's interest to the mortgagee to allow for this 21 day variation pending conclusion and not to prejudice the MIP process." 1. The plaintiffs resist any further stay being granted. They need to remove the defendants' goods which are still on the land so that it can be appropriately marketed. Whilst accepting that marketing is not likely to take place over the immediate Christmas and New Year period, the plaintiffs say that if they are not in a position to remove the goods from the land during the course of this week it is likely that the marketing of the property will be delayed by about a month. 2. In my opinion, the material put forward does not provide any certainty that a refinance will take place either by 22 December, by Christmas, by the 21 day period that Mr Goodman seeks, or at all. No material is available from the prospective lenders. A broker is ordinarily the agent of the borrowers and not the lender, and in that sense the letter from the broker cannot be held in that way to bind the lenders to this uncertain arrangement. Mr Goodman says nothing in his conversations with Ms Waring or in his emails to suggest that the lenders will not generate loan documents until a payout figure is provided. That is not, ordinarily, how this type of arrangement works. Mr Goodman suggests in his email that a final commitment has not been received from the prospective lenders. 3. The debt has been outstanding for almost eighteen months. The defendants have been given a number of opportunities in the past to refinance in order to pay out this debt to avoid the land being taken from them and sold. This refinance has not been forthcoming. 4. Justice Harrison considered virtually the same application on 4 December 2018 and refused it. At that time the arrangement was that there would be a payout by 14 December. The fact that the same lenders still do not appear to have made a commitment to the refinance some 18 days after the broker's letter, as Mr Goodman asserts, is only a further indication to me of the unlikelihood of this finance ever eventuating. 5. For those reasons, the notice of motion by the defendants must be dismissed. The defendants should pay the plaintiffs' costs. ********** 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: 18 December 2018