O’Neill v CBA [2013] NSWSC 836

The lender had been granted possession of the property, and the writ had been executed. However the borrower had granted a lease to a residential tenant after possession had been granted, but while that order was stayed. The tenant claimed that she was entitled to remain in the property until the end of her tenancy, and the lender disputed that right.

The judge considered all of the relevant law and weighed up the rights of the lender, and the tenant. In particular His Honour considered the provisions of the Residential Tenancies Act in relation to lenders taking possession and stated that they are beneficial provisions that provide a fair and workable statutory regime between lenders and residential tenants to ameliorate the potentially harsh effects of the law in this area.

The case was complicated because the tenancy had been created well after the judgment for possession, and His Honour remarked that this tested the limits of the statutory regime. On the other hand, the tenant was especially vulnerable because she was given no notice whatsoever of the possession proceedings.

The Judge found that the borrowers had issued the lease without proper authority in circumstances where they may not be entitled to do so. However, he found that the tenant had immediately come to court to exercise her rights as soon as she had notice of the bank’s possession. His Honour found she should not be worse off in exercising those rights than if notice had been given, and that in a practical sense that meant restoring her possession.

The Judge confirmed the court was able to grant an injunction to aid her statutory rights – either restraining action to remove her from possession, or restoring her into possession. The Judge made orders that the tenant was entitled to occupation of the property until the end of her tenancy and that the Bank was to facilitate the restoration of her entitlement to occupation. However His Honour also commented that the bank applying to the Consumer Tenancy and Trade Tribunal to enforce orders for possession could still terminate the tenancy.

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