Serobian & Anor v Commonwealth Bank of Australia [2009] HCATrans 281 (22 October 2009)

Last Updated: 29 October 2009

[2009] HCATrans 281

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S282 of 2009

B e t w e e n -

CHRISTINE SEROBIAN

First Applicant

SHAHEN SEROBIAN

Second Applicant

and

COMMONWEALTH BANK OF AUSTRALIA

Respondent

Application for stay

HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE BY VIDEO LINK TO SYDNEY

ON THURSDAY, 22 OCTOBER 2009, AT 10.13 AM

Copyright in the High Court of Australia

MRS C. SEROBIAN appeared in person.

HIS HONOUR: Can I just be certain about what papers I have and what the application is. Firstly, I have an application for special leave to appeal to this Court that you filed this morning. I have a copy of some orders made by Justice Hodgson in the Court of Appeal on 12 October 2009 and I have an affidavit that you have sworn this morning on 22 October 2009. Those are the principal papers on the file. In addition, I have looked at the reasons for judgment of Mr Justice Campbell in an application that I believe you made and was an application that was determined on 17 September of this year. Do you understand that?

MRS SEROBIAN: Yes, your Honour.

HIS HONOUR: Now, I immediately have before me your summons of 22 October which is for a stay of the enforcement of the writ of possession order made by Justice Hammerschlag in April this year and for a number of consequential orders. Is that right?

MRS SEROBIAN: Yes, your Honour.

HIS HONOUR: Can I just understand, the application for special leave to appeal is an application for special leave to appeal from two decisions. Firstly, there is a decision of Justice Hodgson of 12 October, but also there is reference to the Full Court of Appeal’s decision dated 19 October 2009 given by Justice McColl, Justice Basten and Justice Handley. Is that right?

MRS SEROBIAN: Yes, your Honour, that is correct.

HIS HONOUR: Now, I have not seen any papers about the orders made by the Full Court of Appeal. Do I understand that court refused your application for a stay of the writ of possession that was an application for stay that you had made? Is that right?

MRS SEROBIAN: That is correct, your Honour.

HIS HONOUR: Yes, all right. Now, I think then I understand the papers that are before me. The papers relating to today’s application have not yet been served on Commonwealth Bank. Is that right?

MRS SEROBIAN: That is correct, your Honour.

HIS HONOUR: Yes. Well, then, I have looked at the affidavit that you have sworn this morning. Understanding that I have looked at that, what else is it that you would wish to say to me this morning in support of your application for stay?

MRS SEROBIAN: Your Honour, my main concern is my daughter who is actually doing her Higher School Certificate exam and today because we had to leave in a rush to come to the Court we actually left her uniform behind and her exam, Bible Studies, is actually at 1.40, so I am not sure even if they will allow her to actually sit for the exam. It has been a very hard situation and I asked them to please consider the Higher School Certificate of my daughter but Justice Hodgson did not even reply in any of the – he just said, “Motions dismissed” and he did not make any comment about the hardship that we are facing with my daughter as well as other problems that we have had – health issues.

I have tried to do my best on my own to prepare the documents because we have not been able to get any legal help. Originally we did have legal help but then because of the fund situation we have not been able to get any more legal help because Commonwealth Bank actually took all our childcare centres, so we have not been able to get any funds to be able to get a solicitor. I have tried to do my best in preparing all the documents for the Court that it actually required.

With the Court of Appeal there is actually – Justice Campbell who has actually made a note on his – I think it is point 24 where he says “The appeal would become useless, fruitless if the stay is not granted. I agree with Mrs Serobian”, but then like I am doing all the work for the appeal and trying to get justification.

My main concern is the causation of our default – it is not me and I have got in evidence that it is not me because we offered three different things to Commonwealth Bank to be able to sell properties and the childcare centre, but a lady by the name of Sarah Hall, she did not agree to any of these to happen so we will not be actually in default. That is all, your Honour.

HIS HONOUR: Yes, thank you, Mrs Serobian. There is nothing else you wish to add.

MRS SEROBIAN: That has been my main - - -

HIS HONOUR: Just take a moment to compose yourself if you would. Just draw breath.

MRS SEROBIAN: Yes, thank you, your Honour.

HIS HONOUR: Stop, and then think whether there is anything you wish to add, but take a moment to draw breath, compose yourself, think about it, because this is your chance to say what you want to say.

MRS SEROBIAN: Thank you. Yes, your Honour. I just wanted to actually add as well, our judgment that was actually given, we had cross-summons and submissions that was actually given to Justice Hammerschlag during the trial but in his judgment he only considered two points in the actual judgment and that has been the main issue. A lot of the appeal judges they are saying that the decisions that he has made they cannot be overturned in the appeal. Then I applied for a judiciary review and it was refused and they did not actually accept my summons for the judiciary review. But as far as I know, I have been told by the State library that appeal is different to the actual judiciary review and that is why I put the summons in that respect, your Honour, but it was not actually accepted.

But my concern is that the judgment is only on two issues and at the time of signing the documents I had medical issues and I actually had affidavits attached to the medical hospital records. In our judgment it was actually disregarded and they said there was no weight put on the medical records, but they were actually removed from my affidavit.

HIS HONOUR: Yes.

MRS SEROBIAN: There is a major issue also about the two million, that it was actually lent to our company for business purposes but the Bank, without our knowledge – we have never filled any application form. We do not have any loan application documents. It was actually put on personal and we did not even know that it is actually put on personal and it shows in Justice Campbell and Justice Hammerschlag’s findings that Justice Campbell found that the two million – it is under business and Justice Hammerschlag found that the two million is under personal name.

The main concern is the cause of the default. That amount that they have actually given, there is 2.5 million of interest that they have added and also that two million which is a question mark whether – because some people say it is actually personal, but we have not advised anybody to actually put that under personal or we do not have a loan application at all, your Honour.

HIS HONOUR: Yes.

MRS SEROBIAN: The other major issue that we have is Commonwealth Bank has actually taken – sold the property at 62 Oakland Avenue last September, 17 September, and they did not place that money in any of our statements. It is not showing in any of the statements which I have put in my affidavit. No explanation. We were not given any statements. For two years I begged them to give me my statements and they would not give it. Justice Hammerschlag, after he gave his judgment he said “Is there anything you would like to say, Mrs Serobian?” after 14 days and I said, “Yes, your Honour. Would it be possible if you order - for the Bank to give me the statements?” Justice Hammerschlag ordered but we only got them after the judgment, so our judgment amount is missing 275,000 which we do not know where the money is. The Police Minister is actually investigating to find out where the actual money has gone and I have got a letter from the Police Minister as well that they are actually investigating the corruption.

HIS HONOUR: Yes. Is there anything else you wish to add?

MRS SEROBIAN: Yes, and also the main issue is the broker who is actually – we did not know that the broker is actually acting for us. The broker was a friend of Commonwealth Bank at Hurstville. So what happened – for two and a half months they were working on applications which I was not even aware. A mandate was not even signed by the broker till two months after the correspondence had been going between Commonwealth Bank and the broker, without our knowledge, and they are actually in evidence as well, the date of which – the main issues that was not considered at all in our judgment, your Honour.

HIS HONOUR: Yes.

MRS SEROBIAN: It is really hurting, your Honour, deep inside - if I know I am actually the cause of the default then I would walk away and I would just be happy and I can live with my life for the rest, but because I know – I tried – we have been in childcare since 1992 and we have owned lots of centres, about nine centres, and the one lady by the name of Sarah Hall – actually we had a centre in Hornsby which – I am a teacher as well and she actually closed down the centre where we had a buyer for 650,000 and she just closed the doors down and the people were actually in the street photographed by The Daily Telegraph.

Because I have a feel for the children that is why it just – I mean I have got five children of my own and that is my life but it might not mean anything to them but it does mean to us and also one centre at Seaforth which it was a childcare centre – because I have actually been working in real estate selling childcare centres as well, I asked them – I had a buyer by the name of Moussa who has actually bought other centres from us before and I said they want to buy it and they gave us a letter and I asked Sarah Hall “Can we please sell this for 1.7 million and that will give us the extra money to be able to actually pay for the loans two years in advance?” and she refused the buyer. But then they actually sold it through their own people, which is in evidence, for 900,000, your Honour, and that is like 800,000, that it has just gone down the drain.

HIS HONOUR: Yes. Now, where is the appeal in the Court of Appeal up to?

MRS SEROBIAN: At the moment, your Honour, it is actually – it is going to be heard on 30th - - -

HIS HONOUR: Of what month?

MRS SEROBIAN: Of this month. They are actually going to – submissions from the other side, they are going to issue submissions from the other side. That is all that is going to happen on the 30th, your Honour.

HIS HONOUR: Yes. Has a hearing date been fixed?

MRS SEROBIAN: Not yet, but they were actually speaking some time in February, but my main concern is the judges of the Court of Appeal, they are actually saying there are things that Justice Hammerschlag has actually said that they cannot overturn by the decision and they did not accept the judiciary review and that is my main concern. I mean, I am trying my best to work and do whatever I can, document wise, to see what is necessary and if it is not going to be any – no one is going to hear it, so what is the use of working all this hard. Like I work – last night, I have not slept at all to be able to prepare the High Court documents, your Honour.

HIS HONOUR: Yes. Well, now, the immediate question for me is whether you should have a stay of the orders pending the hearing and determination of the application for special leave or for some shorter period. Is there anything else you want to say on that particular subject?

MRS SEROBIAN: Yes, your Honour. My daughter’s exams actually finish on the 12th.

HIS HONOUR: Yes, I understand the point you make about your daughter’s exam. I understand that point.

MRS SEROBIAN: Yes. That is all, your Honour, and then they have told me that the appeal would be around February, your Honour. That is my understanding.

HIS HONOUR: Yes.

MRS SEROBIAN: Thank you.

HIS HONOUR: Yes, thank you, Mrs Serobian.

On 3 May 2009, Justice Hammerschlag in the Supreme Court of New South Wales made orders in proceedings in which Commonwealth Bank of Australia had sued Christine Serobian and Shahen Serobian. Among the orders made by Justice Hammerschlag on that day were judgment for an amount of just under $8.2 million and judgment for possession of Mr and Mrs Serobian’s home at Manly. An order was made that a writ of possession for that property issue forthwith. A cross-claim made by Mr and Mrs Serobian was dismissed.

The Serobians gave notice of appeal against the judgment and orders made by Justice Hammerschlag on 24 July 2009 appealing against those orders to the Court of Appeal of the Supreme Court of New South Wales. That appeal has not yet been heard and no hearing date has yet been fixed, though it is expected that it may be fixed for hearing in February 2010.

The applicants have made several applications for stay of the orders for possession of the property at Manly. As best I understand it, an application was made to a judge of the Equity Division and that application was dismissed. Four further applications were made to the Court of Appeal. First, Justice Sackville dismissed an application for a stay on 7 September 2009. On 17 September 2009, Justice Campbell granted a stay of the writ of possession until 10.00 am, Monday, 19 October 2009, but otherwise dismissed the Serobians’ application for a stay. In his reasons, Justice Campbell noted the issues that had been agitated at trial recorded the arguments which it was sought to make on appeal and then dealt with the application for stay on the footing that the Serobians’ chief contention was that their appeal would be nugatory without grant of a stay. His Honour decided, having reviewed these matters at some length, that it was not appropriate to make an order for stay pending appeal. His Honour decided, however, that it was appropriate to make an order of stay for a very short period of time purely on the basis of hardship. In his reasons for judgment [2009] NSWCA 309 at paragraph 40, his Honour said:

It is true that the Serobians have been living in a waterfront home without paying a cent since the latter part of 2007. They do not offer to pay a cent now. They say that is because they cannot. I do not have any reason to doubt that. Nonetheless, the rights of the mortgagee cannot be overlooked, and indeed must be given considerable weight. It may be that up to now a prospect of success on appeal may have led the Serobians to not face up to the practical reality that they may need to move out of their home. It seems to me that now they must face up to that practical reality.

Justice Campbell then indicated that he proposed to take a course that would:

allow them sufficient time to be able to leave in a somewhat more orderly fashion than would happen if the sheriff were to arrive on their doorstep on Monday morning next.

Accordingly, as I have already noted, he ordered that execution of the writ of possession of the premises at 1/30A Addison Road, Manly be stayed until 10.00 am, Monday, 19 October 2009.

The Serobians made a further application to the Court of Appeal for stay. On 12 October 2009, Justice Hodgson dismissed that application. Subsequently it seems, on 19 October 2009, the Serobians renewed their application for stay and, on this occasion, Justices McColl, Basten and Handley in the Court of Appeal dismissed the application for stay.

This morning, the Serobians have filed an application for special leave to appeal to this Court. The application for special leave is for leave to appeal from, first, the whole of the decision of Justice Hodgson of 12 October 2009 and, second, the decision of the Court of Appeal given on 19 October 2009 by the court constituted by Justices McColl, Basten and Handley. Both of the orders which are sought to be the subject of appeal by special leave to this Court are orders dismissing applications for stay.

The application for special leave, together with an affidavit filed in support of the present application which the Serobians make, emphasise the hardship that the Serobians will suffer if the writ of possession is executed. Not only will the applicants themselves suffer hardship in circumstances where it is said that they are suffering from a number of medical conditions, their daughter, who has also been ill, is about to undertake her Higher School Certificate examinations and the point is made that ejection from the family home would inevitably cause great hardship to her and thus to her parents.

The other grounds advanced in the application for special leave are directed chiefly, if not entirely, to matters which it is said suggest that the judgment at trial is open to attack. It is, I think, not necessary to deal in any detail with all of the matters mentioned in those grounds. It is enough to notice that at trial the Serobians complained about the way in which the lending and security arrangements which have given rise to the relief granted against them were made. The Serobians further complained that the state of accounts as between banker and customer did not sufficiently or accurately record transactions that had taken place and did not represent the true state of indebtedness of the Serobians.

The power of this Court to grant a stay pending application for special leave is well established. It is, however, important to recall that, as Justice Brennan said in Jennings Construction Limited v Burgundy Royale Investments Proprietary Limited [No 1] [1986] HCA 84; (1986) 161 CLR 681 at 684, a stay to preserve the subject matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted.

In Jennings Construction [1986] HCA 84; (1986) 161 CLR 681 at 685 Justice Brennan pointed out a number of matters that are material to the exercise of this Court’s discretion. The premise for exercise of the Court’s discretion was described as satisfaction that a stay is required to preserve the subject matter of the litigation and then it was said that it is relevant to consider:

first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.

It is to be observed that the application for special leave that has been filed in this Court concerns two interlocutory orders made by the Court of Appeal in the course of proceedings instituted by the Serobians by way of appeal. It is well established that this Court will ordinarily not grant special leave to appeal in interlocutory matters lest the litigation be unduly fragmented and prolonged.

For present purposes I am prepared to assume without deciding that, if I do not grant the relief which the Serobians now seek, the application for special leave to appeal to this Court will effectively be rendered nugatory. In that sense, a stay would be a step necessary to preserving the subject matter of the litigation which it is proposed to institute in this Court. It is then necessary to consider, amongst other things, whether there is a substantial prospect that special leave to appeal would be granted and where the balance of convenience lies as between the parties.

Having regard to the history of this matter and, in particular, the repeated applications for stay that have been made, it may be observed that the prospects of obtaining special leave to appeal in respect of the fourth and fifth refusals of stay would not be considered to be high. It is further to be observed that, as recorded in the reasons of Justice Campbell and of Justice Hodgson, the stay which the Serobians seek is an unconditional stay in which they offer no terms to preserve the status quo, as, for example, by making any payments in respect of the amount for which judgment has now been given.

In all the circumstances, I am not persuaded that this is a case in which it is appropriate that this Court should now grant a stay of execution of the process that follows from the judgment granted at first instance. I am not persuaded that the application for special leave to appeal enjoys prospects of success sufficient to warrant the granting of that extraordinary relief and, so far as the material presently available to me reveals, the balance of convenience lies wholly against the Serobians.

For these reasons, the application for stay is dismissed.

Adjourn the Court.

AT 10.46 AM THE MATTER WAS CONCLUDED