Commonwealth Bank of Australia v Green

This is a further application for the stay of a writ of execution which is due to be executed on Monday 12 October 2015. The application was made at about 4.30 this afternoon, Friday 9 October. A more detailed history of the circumstances that give rise to the present application is to be found in the judgment of Bellew J of 16 September 2015. An earlier application for a stay had been made to Bellew J on 9 September and a short stay was granted by him on that day to allow for further evidence that a proposed settlement of the sale of the property by the mortgagors was imminent. The mortgagors had entered into a contract to sell the property in April 2015 as the judgment makes clear.

It is not necessary for me to detail the history that Bellew J has set out. It is sufficient only to mention a few matters.

The first is that on 25 June 2015 the mortgagors' solicitor, a Mr Churchill, sent an email to the Bank's solicitor, Mr Lewin, which discussed certain matters in relation to the sale. He pointed out some medical difficulties that the mortgagors had had. He went on to say that he had known the mortgagors' family for over 25 years and he also knew the purchaser. He said: "I am assured by the purchaser personally that settlement will proceed." At that time settlement was scheduled for 10 July when a notice to complete was due to expire.

The settlement did not proceed.

On 7 August 2015 Mr Green wrote to Mr Lewin at Gadens in which he said this:

The settlement that was referred to in that letter was a further scheduled settlement for 24 August.

On 10 August a solicitor acting for the purchaser, a Mr Vatche Janoyan, sent an email to Mr Green copied to Mr Churchill in which he said:

That led Gadens to write to the mortgagors' solicitors on 10 August 2015 and to say amongst other things that as a gesture of goodwill their client was prepared to withhold from proceeding with its current enforcement action, which was scheduled to be executed on 11 August, on certain conditions. One at least of those conditions was a written confirmation that settlement of the sale was proceeding on 24 August.

A letter was then received by Gadens from the mortgagors' solicitors in response saying that their clients were willing to consent to the scheduling of a further eviction date on a date first available after 24 August, that is the date on which settlement was supposed to take place.

On 21 August Mr Janoyan wrote to Mr Green saying this:

The settlement did not of course proceed and that led to the application to the Deputy Registrar on 2 September.

On 1 September Mr Janoyan wrote to the mortgagors' solicitors saying inter alia:

At no time until the present application was made before me had the mortgagors or anyone on their behalf disclosed to the Bank, or, for that matter, any of the caveators in relation to the property, that the approval of the NAB on 10 August was a conditional approval. The letter which has been tendered on this application says:

The other significant information that was never made available to the Bank or the caveator was the information that now appears in an affidavit read on this application by Martin Alan Churchill sworn 9 October 2015. Mr Churchill is the solicitor for the First and Second Defendants, the mortgagors. In that affidavit Mr Churchill says the following:

More significantly than the fact that that information was not disclosed to the Bank is the fact that it was never disclosed to the Deputy Registrar or Bellew J when earlier applications for a stay were made. The matter was put to the Registrar and Bellew J along similar lines to what had been put to the Bank in the correspondence, namely, that there were difficulties in relation to finalising the finance from the Bank.

Whether or not there were those difficulties, the affidavit of Mr Churchill now makes it abundantly clear that settlement could never have proceeded on 10 July or 24 August, nor probably in September, because of the matters that are now contained in his affidavit. The matter was amplified by Mr Churchill in his submissions to me as follows:

As appears in that extract, Mr Churchill informed me, when I asked why this had not been previously disclosed, that because of his involvement for another party the matters were commercial in confidence. It does not appear to have occurred to Mr Churchill in those circumstances that he was in a very obvious position of conflict that resulted in the matter not being put to the Registrar on an ex parte application or to Bellew J in a manner which can be considered frank or in accordance with appropriate professional obligations.

Mr Brian Green, one of the mortgagors, has sworn an affidavit of 9 October 2015. In many respects that affidavit bears a striking resemblance to the affidavit Mr Green swore on 1 September 2015 on his first application for a stay. In that affidavit of 1 September 2015 he referred in paragraphs 7, 11, 12, 15 and 18 to the settlement of the sale being imminent to justify the application for the stay sought. It goes without saying in the light of what I have already disclosed that there was nothing said in that affidavit about the matters that now appear in Mr Churchill's affidavit.

It is concerning that paragraph 15 of that affidavit says this:

It is possible that Mr Green was unaware of the other difficulties the purchaser had in finalising finance as a result of the matters set out in Mr Churchill’s affidavit although I note what he says about the Greens’ connection with the purchaser in paragraphs 3 and 9 and what he said to me in submissions (paragraph 16 above). However, one may reasonably infer, and I do so, that the affidavit was prepared by Mr Churchill (his firm’s name appears on the front page) and he has, in any event, witnessed Mr Green’s execution of it. Mr Churchill allowed that affidavit to be put forward which said nothing of other reasons that are now said to be the real reasons for the delay.

That evidence was relied upon to obtain a stay ex parte from the Deputy Registrar. Such a stay should never have been sought without notice to Gadens who had been acting for the Bank and with whom Mr Churchill had been communicating. The stay should not have been granted by the Deputy Registrar because judgment was entered by consent and not by default.

The matter came before Wilson J on 9 September. A further stay until 16 September was granted and the matter was adjourned to Bellew J as Duty Judge on 16 September 2015. Her Honour’s reasons for granting the further stay are not available, but it is clear that nothing in the affidavits available to her Honour disclosed anything about the Energy Drink negotiations.

A further application was made to Bellew J by Notice of Motion filed 11 September 2015. The affidavit of Mr Green sworn on that day asked for a further stay on the basis of an imminent settlement and because of the hardship that would be caused to the mortgagors if they were to be evicted. Paragraph 4 of that affidavit relevantly reads:

Although settlement was said to be imminent on 11 September, not only did settlement not occur but there is no evidence before me of what has happened between 11 September and now.

In his affidavit of 9 October Mr Green has annexed a further letter from Mr Janoyan of City Lawyers who act for the purchasers. Considerable emphasis has been placed on this letter on behalf of the mortgagors for why a further stay should be granted. The letter says in its entirety:

Mr Janoyan has not sworn an affidavit on this application. It is perfectly clear that he was in a position to do so because he witnessed Mr Churchill's signature on his affidavit of 9 October 2015.

I have considerable doubts about accepting the veracity of what appears in Mr Janoyan's letter of 9 October 2015 when he has not given evidence before me to explain the extremely misleading email he forwarded to Mr Green on 10 August in relation to the Bank's approval of $2,500,000 without ever indicating that it was a conditional approval.

That is the first problem for the mortgagors.

The second problem is this. The letter says, if it is to be accepted, that the Bank has advised that if the purchaser provided proof of funds, that is, the funds to comprise the 10 per cent balance from what is being lent by NAB to purchase the property, by Monday the loan will be approved by Wednesday. Mr Janoyan, as the letter notes, says that the purchaser has previously provided proof of the funds but he will provide the information again by Monday morning.

There is no letter from NAB or any other evidence to confirm that if proof of funds is provided by the purchaser on Monday the loan will be unconditionally approved. Nor is there any evidence from the purchaser to indicate that he or it (there seems to be some doubt about who the purchaser is) will be able to demonstrate the proof of funds that the Bank requires. Indeed, the only material from the Bank about the loan is the letter of 10 August 2015 conditionally approving the loan.

The history of this matter suggests to me that the further letter from Mr Janoyan of 9 October is simply another attempt to delay this matter. I have no confidence from any evidence that I have that the NAB'S loan will become unconditional on Monday or at any time thereafter, nor that settlement will occur at any time in the near future. The misleading way these applications have been put to the Court earlier strengthens my opinion in that regard.

There is no other basis put forward apart from hardship to the mortgagors to justify a stay but as Johnson J made clear in GE Personal Finance v Smith [2006] NSWSC 889, hardship alone is unlikely to result in a stay unless there is some solid indication that something will happen in the future to bring about a settlement or a refinancing to justify a stay.

There is no evidence on this application to justify a further stay in the matter and the Notice of Motion is dismissed.