Smith v RHG Mortgage Corporation Ltd

HIS HONOUR : This is an application by Mr Smith for a stay of execution of a judgment, primarily for the purpose of preventing his financier taking possession of a mortgaged property. The writ of execution was to be executed today and the respondent financier has informed the Court that the execution has in fact proceeded.

The original borrowing made by Mr Smith was for an amount of some $500,000. That occurred in August 2005. Subsequently $275,000 was borrowed. The present amount owing under the mortgage as recorded by the judge at first instance, McClellan CJ at CL, is $935,176, there being arrears of interest in the amount of $85,176. The primary judge noted that the defendant, Mr Smith, conceded that there had been default and also conceded the extent of the monies owing.

A stay application was made to the primary judge, on last Friday, 31 July 2009. That application was refused by his Honour. A previous application had been heard and granted by Registrar Bradford on 26 June 2009. He granted a stay until 8 July 2009. Mr Smith’s affidavit records that there were conditions attached to the grant of that stay being, as described by Mr Smith, that Mr Smith obtain “better time estimates of the expected payouts” owing to him and that he obtain a “more current medical report” on his wife’s condition.

Mr Smith said in his affidavit that he was unable to attend court on the morning of the resumed hearing, that is 8 July 2009, as a result of which his application for a stay was dismissed. Subsequently he brought the further motion which was heard and decided by Justice McClellan on Friday. Following his Honour’s decision to decline the stay, Mr Smith filed a summons in this Court seeking leave to appeal against that decision and also filed in this Court a notice of motion seeking a stay of Justice McClellan’s decision. I treat that motion as effectively seeking a stay of execution of the judgment pending the determination of the application for leave to appeal.

Justice McClellan delivered an ex tempore judgment last Friday. Notes of his reasons for judgment have been made available by his Associate. They have been made available by me to the parties who have indicated that they do not have any reason to think that the notes depart from what his Honour said on Friday.

His Honour referred to three bases advanced by Mr Smith for the grant of a stay. The first related to the serious ill health of his wife. As his Honour said, she is suffering from a number of medical conditions and requires ongoing care. His Honour also noted that the family circumstances have been exacerbated by the death of Mr Smith’s father-in-law.

The other two matters relied upon related to a prospective improvement in Mr Smith’s financial circumstances. The first was an expectation of a receipt of a sum of money by his wife from a deceased estate. His Honour said there was however nothing to indicate the amount of these monies and nothing to suggest that they could satisfy the outstanding liability to the financier, or any significant part of it.

The third matter discussed by his Honour was the suggestion by Mr Smith that he had an entitlement to receive a payment from the Nigerian government. Mr Smith gave evidence that he had done some computer program work, with other people, for which the fee was to be $5 million, apparently US dollars. His Honour referred to copy certificates in evidence before him referring to an entitlement of Mr Smith to payment of US$29 million. According to Mr Smith, that is what the sum of $5 million has come to as the result of the accrual of interest. An explanation as to how that sum has increased to that extent was not forthcoming.

His Honour referred to some aspects of the transaction and said that he was not persuaded that Mr Smith had any real prospect of payment of the money said to be owing, either the sum of $US5 million or $US29 million.

His Honour was not persuaded that there was any real prospect of Mr Smith being able to meet his obligation to the plaintiff if he were to grant a stay and as a result, notwithstanding the hardship to Mr Smith which he appreciated, he said that he had no alternative but to decline the stay.

On the application today Mr Smith has put some additional arguments and given some further evidence, by way of affidavit. The additional evidence and arguments relate principally to the same three matters dealt with by Justice McClellan. As to Mr Smith’s wife’s medical condition, Mr Smith has emphasised the seriousness of that and referred to his wife being at a point approaching a suicidal condition. He has also said in relation to the amount claimed to be owing by the Nigerian government that he has received an additional document “authorising the release of my funds” and saying that the funds are expected to be released at the next Nigerian Senate Committee meeting of 19 August 2009. That additional document, as explained by Mr Smith during the course of the hearing today, is an email from a lawyer in Nigeria. He has not produced a copy of it to the Court. He simply says that he did not print it out.

As to the deceased estate entitlement, Mr Smith said today that he was not able to indicate how much the inheritance of his wife would be.

He raised an additional matter also. That was that he had commenced negotiations with his employer to finance the arrears owing to RHG. He says about that that additional time is required to complete this process.

It does not seem to me that the material advanced on this application changes in any significant way the material that was before his Honour below and that, even if it were allowed to be admitted on appeal, it would make any material difference to the outcome. His Honour approached the matter on the basis that Mr Smith’s wife’s medical condition was very severe indeed and properly took that into account. The material relating to the alleged Nigerian entitlement is not significantly different to that before his Honour. A reference to an email from a Nigerian lawyer which was not printed out is not a significant addition to the available material. Similarly, the reference made to negotiations between Mr Smith and his employer does not add anything significant because, as he frankly concedes, those negotiations are really just commencing and there is no concrete information available as to what, if anything, they are ultimately likely to achieve.

The task that I have on this application is to determine whether there is a significant argument that his Honour made an error in relation to his refusal of the stay. For Mr Smith to succeed, it would, in my view, be necessary for him to identify some error of law, in the sense of some error of principle that his Honour made, some failure to take into account relevant considerations, some taking into account of material that was inappropriate to be considered or a reason why the decision should be regarded as patently unreasonable. I cannot see any basis for a sensible argument that any of those grounds are made out. Accordingly I cannot see any significant prospect that the application for leave to appeal will be successful.

In those circumstances my view is that no stay should be granted. The reasons given by his Honour, together with the additional reasons I have given above, lead to that result. This result is undoubtedly regrettable from Mr Smith’s point of view and undoubtedly involves considerable hardship to him but it is one necessitated by the application of proper principles of law. As a result I dismiss the notice of motion filed by Mr Smith in this Court today, 3 August 2009.

Is there any application for costs Ms Moubarak?

MOUBARAK: No your Honour.

HIS HONOUR: I do not make any order for costs.