NAB v Piromalli [2013] NSWSC 35

The bank obtained default judgment for possession two years ago but failed on six prior attempts to execute its writ of possession, and again failed on this attempt.

The court granted the borrower a stay largely on hardship grounds, because the sick father and daughter residing in the family home would suffer “very severe hardship” but also because there were reasonable prospects of the mortgagee obtaining refinance within the next fortnight. The hardship tipped the balance in the mortgagee’s favour. The court did not view the stay as merely postponing the inevitable.

However the court cautioned that this was the last stay the borrower would be granted to refinance her indebtedness absent extraordinary circumstances.

The judge conceded that the banks valuation showed there would be a shortfall. Thus, on the balance of convenience question, there was no hope of a refinance and the bank is being kept from a wasting asset. Sadly, it is decisions like this that turn investors off investing in the Australian mortgage market.

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