Supreme Court New South Wales Medium Neutral Citation: Connam Pty Ltd atf Christodoulou Family Trust v Lazarou (No 4) [2020] NSWSC 484 Hearing dates: 28 April 2020 Date of orders: 28 April 2020 Decision date: 28 April 2020 Jurisdiction: Common Law Before: Cavanagh J Decision: (1) The motion is dismissed. (2) The second defendant pay the plaintiff's costs. Catchwords: MORTGAGES AND SECURITIES — mortgages — duties, rights and remedies of mortgagee — possession — application for stay of execution of writ of restitution — where defendants retook possession contrary to court orders — prospect of refinancing and hardship — successive applications on similar grounds — where evidence that refinancing of loan would occur prior to mortgagee sale of property Cases Cited: Alliance Building Society v Austen [1951] 2 All ER 1068 Connam Pty Limited as Trustee for Christodoulou Family Trust v George Lazarou and Ors [2020] NSWSC 397 GE Personal Finance v Smith [2006] NSWSC 889 Perpetual Limited v Kelso [2008] NSWSC 906 Pitcher v Roe (1841) 9 Dowl 971 St George Bank v Udowenko [2010] NSWSC 1289 Category: Procedural and other rulings Parties: Connam Pty Ltd as Trustee for Christodoulou Family Trust (Plaintiff) George Lazarou (First Defendant) Andreas Lazarou (Second Defendant) Sofia Lazarou (Third Defendant) Representation: Solicitors: DC Chambers & Associates (Plaintiff) Nicholas Vasta (Defendants) File Number(s): 2019/51609 Publication restriction: None revised ex tempore Judgment 1. This matter comes before me in my capacity as Duty Judge pursuant to a motion filed by the defendants in the Registry late yesterday afternoon, being 27 April 2020. The defendants are represented by Mr Vasta, solicitor. When the matter was first called on there was no appearance for the plaintiff but, after a short adjournment, Ms Chambers, solicitor, appeared on behalf of the plaintiff. Obviously, the application was brought on an urgent basis and Ms Chambers appeared as soon as she was able to. 2. The defendants seek a stay of a writ of restitution. That is, on 15 April 2020, Johnson J granted leave to the plaintiff for the issue of a writ of restitution to restore to the plaintiff possession of the land situated at and known as 2 William Street, also known as 2A William Street, Strathfield South. His Honour granted leave to the plaintiff to execute the writ of restitution forthwith. Thereafter, the plaintiff organised for the writ to be executed. I understand that it will be executed at 11 am today. Again, at the last minute, the defendants seek a stay. 3. The defendants rely on an affidavit of Andreas Lazarou, being the second defendant, sworn 27 April 2020. Ms Chambers raises a question about the circumstances in which that affidavit has been sworn, bearing in mind that on her instructions the deponent to the affidavit does not speak English. Mr Vasta candidly admitted that he had not been involved in the preparation of the affidavit and, indeed, the motion is not signed by him. It is signed by the second defendant personally. However, Mr Vasta appears and he has had some involvement in the earlier applications in this matter, as has Ms Chambers. 4. Mr Vasta says that, on his instructions, the second defendant was capable of understanding the content of the affidavit, and, on his instructions, the affidavit was properly sworn. As I said to Ms Chambers, without evidence I am not in a position to make any decision about the capacity of the deponent of the affidavit to have sworn the affidavit. As such, absent any evidence on behalf of the plaintiff, I admitted the affidavit. 5. This matter has a long history culminating in the decision of Johnson J on 15 April 2020. [1] As Ms Chambers submitted, the history goes back to February 2019 when the plaintiff filed the statement of claim seeking possession of the property. 6. The defendants were guarantors on the loan made to George Lazarou in July 2017, which was secured by a mortgage over the property. 7. The plaintiff is a company which acts as the trustee for the Christodoulou Family Trust. The plaintiff is a small family company which lent the money to the first defendant, and the second and third defendants guaranteed that loan. 8. A defence was originally filed on behalf of the first defendant, George Lazarou, but Schmidt J entered default judgment on 1 May against the second and third defendants, on 1 May 2019. Summary judgment was subsequently entered against the first defendant. On 24 July 2019, the second and third defendants sought to set aside the judgment. 9. The motion was ultimately dismissed by Lonergan J on 19 December 2019. 10. Then, on 24 October 2019, the first defendant was declared bankrupt. 11. On 23 January 2020, a writ of possession was again issued. As identified by Johnson J in his judgment, on the day that the writ of possession was scheduled for execution, being 3 March 2020, the first defendant approached the Court with an urgent application for a stay. The first defendant appeared personally but did not inform the Court that he was bankrupt. 12. A further motion was brought by the second defendant. He again relied on his own affidavit sworn 3 March 2020. He set out his personal circumstances, being that he is 81 years old and he lived in the property with his wife for 42 years. He said that he had been informed by a broker that he would have an unconditional loan approval to pay out the loan by 13 March 2020 and that settlement could take place within 14 days. Ms Chambers was seemingly not aware of the motion and did not appear. His Honour granted a short stay until 17 March 2020. 13. On the day before the expiry of the stay, the first defendant again approached the Court seeking further orders. According to Johnson J, on this occasion, the plaintiff agreed that the defendant could have further time to obtain finance. It turned out that the defendants, having been removed from the property, had re-entered the property and changed the locks. 14. In any event, on 9 April 2020, the plaintiff filed a motion seeking a writ of restitution. 15. A writ of restitution may be directed to the sheriff where a party has wrongly resumed possession after having been properly dispossessed by the sheriff's execution of a writ of possession: St George Bank v Udowenko [2010] NSWSC 1289; Pitcher v Roe (1841) 9 Dowl 971; Alliance Building Society v Austen [1951] 2 All ER 1068. 16. Johnson J was satisfied that the circumstances existed for the issue of a writ of restitution. His Honour referred to Perpetual Limited v Kelso [2008] NSWSC 906 at [19]–[22] as follows: "19. It is appropriate that I refer briefly to certain legal issues. The writ of restitution is a recognised procedure where, after entry by the Sheriff under a writ of possession, a defendant forcibly resumes possession of the subject land and the plaintiff seeks to have possession restored. It is a writ in aid of another writ of execution: r.39.1(1)(g), Forms 61, 62, Uniform Civil Procedure Rules: Ritchie's Uniform Civil Procedure NSW, LexisNexis at [39.1.35]; Pitcher v Roe (1841) 9 Dowl 971; Alliance Building Society v Austen [1951] 2 All ER 1068. 20. The use of a writ of restitution has been acknowledged in later cases. In Abram v National Australia Bank Ltd (Court of Appeal, 1 May 1997, BC9701553) Powell JA, at pages 54-55, observed that re-entry by a defendant, after the execution of a writ of possession by the Sheriff, constitutes a trespass with the plaintiffs' remedy being an application for an order in the nature of a writ of restitution. Powell JA cited, in this respect, Pitcher v Roe and Alliance Building Society v Austen. 21. In Maher v Commonwealth Bank of Australia (No 2) (2004) 211 ALR 656 at 658 [6], Finkelstein J observed that there are cases where a defendant has retaken possession within a short period after possession has been taken where the Court would, upon application, issue a writ of restitution. His Honour cited Pitcher v Roe, Alliance Building Society v Austen and R v Elliott [1955] VLR 126. 22. There is a clear foundation for the course of action taken by the Plaintiff in this case, namely to seek a writ of restitution." 1. The Sheriff is apparently attending at the property today pursuant to the orders of Johnson J in respect of the issue of the writ of restitution. The Sheriff is attending to restore to the plaintiff possession of the land. 2. The plaintiff opposes the stay sought by the second defendant on the basis that: 1. this matter has been proceeding since February 2019 and the plaintiff has been attempting to take possession of the property and sell the property pursuant to its right to do so since that time. 2. this is not the first occasion on which the defendants have indicated to the Court that preliminary approval has been obtained in respect of refinancing such that they would be able to repay the loan in full within a matter of weeks. Ms Chambers suggests that there were earlier affidavits from the same deponent (i.e. the second defendant) which essentially say the same thing and that has not eventuated. 1. The plaintiff submits that the central issue at the moment is the Coronavirus — that is, that the defendants should not be removed from their property at this time in circumstances in which they are elderly and in circumstances in which it is suggested that they may have nowhere to go. 2. Ordinarily, evidence that the defendants are in the process of refinancing and evidence of hardship might suggest that a stay should be granted. In GE Personal Finance v Smith [2006] NSWSC 889 at [13], Johnson J identified three common circumstances advanced on a stay application: "(a) where the Defendant indicates that the proceedings are to be defended, a draft Notice of Grounds of Defence should be provided and the Defendant ought be in a position to make submissions concerning the merits of the proposed grounds; (b) where the Defendant indicates that the loan is to be refinanced, proof of steps undertaken to refinance will be required on the application; (c) where the Defendant indicates that the subject property is to be sold, copies of agent sale agreements, a contract for sale of the property, advertisements and other documentary evidence ought be provided." 1. In the second category, where the defendant indicates that the loan is to be refinanced, proof of steps undertaken to refinance should be provided. 2. As his Honour says at [19], if there is a realistic prospect of obtaining refinance to discharge the debt, it is reasonable to expect that the defendant will take early steps in this regard and be in a position to provide credible and reliable evidence of available refinancing. 3. Further, it always remains open to the defendant to discharge the debt owing to the plaintiff in its entirety before the property is sold and, thus, recover possession of the property in that way. 4. In this matter, Ms Chambers emphasises that proposition — that is, she submits — that if the defendants are able to refinance within three weeks, as they submit based on the evidence of Mr Andreas Lazarou that they will be able to do, then as the property will not be sold prior to that time, they may discharge the loan and re-take possession. 5. It is necessary that I consider the circumstances in which the parties come before the Court today. 6. The defendants are seeking a stay of the writ of restitution in circumstances in which, contrary to the earlier orders of the Court, they re-entered the property and took possession of the property. 7. Further, the defendants are seeking a stay in circumstances in which, when the matter last came before the Court on 14 April 2020, Mr Vasta informed the Court that the defendants did not oppose the issue of the writ of restitution. The matter was dealt with on the papers in chambers with the consent of the parties and orders were made for the issue of the writ of restitution. 8. Mr Vasta submitted today on behalf of the defendants that the defendants had not previously left the property (i.e. that this would be the first time) and that they did not have anywhere to go. Ms Chambers pointed out that that submission was incorrect and that they had been previously removed from the property. 9. I asked Mr Vasta to obtain instructions as to where they had moved to. He informed the Court that his instructions were not clear but that there was some reference to the sister's (I assume, meaning the sister of the first defendant) property. 10. However, Mr Vasta said that, in these Coronavirus times, it may not be possible for the second and third defendants to go there again. I must say, I am uncertain as to why it would not be possible for the second and third defendants to go to the sister's house again at this time when the last time they went was also during this period of health crisis. 11. There is a dispute between the parties as to whether earlier applications made by the defendants have been made on the basis that the defendants were in the process of refinancing. I am sympathetic to Mr Vasta's personal position in that he did not sign the motion, he was not involved in its filing and nor was he involved in the preparation of the affidavit. As such, he is entirely reliant on his instructions as to the circumstances in which the motion and the affidavit were filed. When I asked him whether he could confirm that earlier applications had been based, in part, on the ability to refinance, he responded saying that he did not have the earlier documents. 12. However, it is plain from the file that earlier applications had been made on the basis of the potential to refinance. There are earlier affidavits from the same deponent, the second defendant, which set out essentially the same matters as are set out in his current affidavit, except that on this occasion there is reference to a different potential financier. 13. I have some concern that there is no reference in Mr Lazarou's affidavit to the earlier attempts at refinancing. 14. Indeed, the impression I had from my reading of his affidavit of 27 April 2020 is that the process of obtaining refinance had been held up by the health crisis and the second defendant's inability to leave his house to secure the refinancing. Again, there may be merit in what is said in the affidavit, but I am concerned that the defendants did not mention the earlier affidavits and applications essentially saying the same thing as this application. 15. I am not satisfied that the second and third defendants would have nowhere to go but for a stay. They have family members and they have previously stayed with those family members. 16. The plaintiff is a small family company who lent money to the defendants. It is now nearly 15 months since they instituted these proceedings in an attempt to obtain their money back and/or sell the property. 17. There have been a number of applications made by the defendants at the last minute seeking stays. On a fair reading of the history of this matter, the defendants have had ample opportunity to obtain refinancing. 18. As I have endeavoured to emphasise, if this was the first application made on the basis that the defendants were likely to obtain refinancing, the situation might be different. However, it is plainly not the first application of this type and I have a considerable concern that the relevant information was not brought to the attention of the Court until raised by the solicitor for the plaintiff. 19. There is merit in the submission of the plaintiff that if, as is asserted by the second defendant, finance will be forthcoming in three weeks, and it will be for an amount considerably higher than the amount owing to the plaintiff, then the defendants will have ample opportunity to repay the loan and re-enter the property. 20. In all the circumstances, it seems to me that this is merely a repeat of an earlier application, again made just as the Sheriff is about to enter the property, again made on the basis that finance will be obtained in a short period of time and again made on the basis of hardship. 21. Of course, there is hardship to the defendants. However, on an application such as this I am required to balance the interests of both parties. I am required to consider the circumstances in which the defendants are currently in occupation of the property (i.e. they entered the property contrary to the Court's earlier orders). They now seek a stay on grounds which they have previously raised even though they did not disclose to the Court that these grounds had been previously raised. 22. In all the circumstances, I am not satisfied that any stay of the writ of restitution should be granted. The motion is dismissed. 23. The second defendant is the only moving party on the motion. I order that the second defendant pay the plaintiff's costs. ********** Endnote 1. Connam Pty Limited as Trustee for Christodoulou Family Trust v George Lazarou and Ors [2020] NSWSC 397. 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: 05 May 2020