Arturus Capital Limited v Nair

Judgment 1McCOLL JA: This is an application by the applicants, Arturus Capital Limited, pursuant to an amended notice of motion filed on 18 July 2011 for a stay pending the outcome of the appeal from the judgment and orders made by Harrison J on 10 June 2011: see Nair v Arturus Capital Limited [2011] NSWSC 499. 2The proceedings concern the question whether the respondent, Dr Nair, is entitled to be paid a termination benefit pursuant to a Workplace Agreement made on 23 June 2007 in consequence of him resigning from his position with the applicant in November 2007. 3The question whether he is entitled to that payment turns, as I understand it, entirely on the provisions of s 200A, s 200B and s 200F of the Corporations Act (2000) (Cth) as in force in June 2007. 4There have been three hearings at first instance. 5In the first, Davies J determined separate questions as to whether the termination entitlement the respondent claimed fell within the exemption provided in s 200F(2)(a)(ii) of the Corporations Act as in force at the material date: Nair v Arturus Capital Limited [2010] NSWSC 329; (2010) 78 ACSR 43. 6When the proceedings before Davies J commenced, the respondent's counsel, Mr P Silver, in opening the matter, informed his Honour without challenge by counsel for the appellant that, as indicated in Davies J's reasons, the only portion of s 200F(2) in controversy was sub-section (a). 7Davies J resolved the separate questions on the basis that, first, membership approval of the benefit the respondent claimed was not required by s 200B of the Corporations Act , and, secondly, if such approval had been required, it had not been given. 8Following Davies J's determination of the separate questions the matter came before Harrison J for final hearing. 9Harrison J held that the Workplace Agreement had come into effect and was not subject to any condition precedent that was not met, and that upon its proper construction the respondent was entitled to be paid a termination benefit upon his resignation: Nair v Arturus Capital Limited [2011] NSWSC 381. 10In the course of the first hearing before Harrison J, it appears that the applicant sought to agitate for the first time the question whether the termination benefit the respondent claimed was not payable by reason of the mathematical calculations, if undertaken, pursuant to s 200F(2)(b) of the Corporations Act . At the conclusion of his first judgment of 6 May 2011, his Honour asked the parties for further submissions to address his concerns about this issue. After considering those further submissions his Honour delivered his second judgment on 31 May 2010, at the end of which he asked the parties to bring in Short Minutes of Order. His Honour made final orders on 10 June 2011. 11In his second judgment, Harrison J held that the appellant should not be permitted to agitate the s 200F(2)(b) question. His Honour concluded (at [31]) that while this was not a case of Anshun estoppel strictly so-called, it was one in which a party had adopted a particular forensic position at one stage of a single proceeding, but later sought in the same proceeding to alter or resile from it in the face of an interlocutory judgment with which that party was unhappy. 12His Honour had said (at [27]) that there was "a very strong inference" that if he had been asked to deal with the effect of s 200F(2)(b) he might have answered the s 200F(2)(b) question in the affirmative. However he concluded (at [31]) that, as I read his reasons, he was bound by Davies J's determination which had not been challenged on appeal and that the appellant should not "now be entitled to have a second go". 13The applicant has not made any offer as a condition of a stay, to secure the judgment pending an appeal. It has not advanced any evidence to suggest that if the stay is not granted, the respondent may not be able to repay the termination benefit if the appeal is ultimately successful. Nor has it appealed to any of what I might call conventional reasons for persuading a Court to grant a stay without payment, such as an appeal being abortive if the stay is not granted. Rather, the principal contention as I understand the submissions of Dr Griffiths of Senior Counsel, who appears for the applicant with Mr Pike, rests on what he submits is the strength of that applicant's argument in relation to s 200F(2)(b). 14Dr Griffiths has also drawn my attention to the provisions of the Corporations Act which provide that it is a contravention for the applicant to pay a sum by way of a termination benefit to the respondent if it was in fact one which required membership approval (s 200B) and also to that provision which would render it a contravention for the respondent to receive a benefit if it required approval, if that approval had not been secured: s 200D, Corporations Act . 15Mr Silver opposes the application for a stay. He draws attention to the established principles that the respondent is entitled to the fruits of his judgment, that the onus is on the applicant to justify the imposition of a stay, to demonstrate a proper basis for any such stay that would be fair to all parties and that, in exercising its discretion, the Court will weigh consideration such as the balance of convenience. 16I accept the cogency of Mr Silver's submissions. Nevertheless, it does seem to me that in circumstances where membership funds are concerned and where there is a statutory scheme emphasising the necessity for membership approval for the pay out of what would in the circumstances be a large amount, of the order of $1.3 million or thereabouts, a stay should be granted if the Court can secure both parties' positions in a way which does not amount to relevant prejudice. 17Mr Silver points out that the respondent's solicitor wrote to the applicant's solicitors on 12 July 2011, outlining the conditions which he contended would be a proper basis for any stay the Court was minded to grant. 18In my view, on the matters which have been outlined concerning the effect of s 200F(2)(b), there does appear to be some basis on which it could be said that the appeal was arguable as a matter of statutory construction. 19Nevertheless, there is also the circumstance to which weight must be given concerning the lateness of taking the s 200F(2)(b) point. I am conscious both of the matters to which Harrison J referred concerning the conduct of the proceedings and the effect of any interlocutory judgment and, too, the provisions of the Civil Procedure Act 2005 (NSW) dealing with the expeditious conduct of proceedings in this Court. 20Weighing all those factors and having regard to the fact that, in my view, Dr Nair's solicitor's letter of 12 July proposed a reasonable regime, I would propose to grant a stay, but on the conditions outlined in that letter. 21The applicant has also filed in Court today a motion returnable instanter seeking expedition of the appeal. That application is unopposed. 22The applicant asks that the costs of the motion be costs in the appeal. The respondent seeks, in the light of his solicitor's letter of 12 July 2011, an order for costs. In my view the costs should be the respondent's costs in the appeal. 23I make the following orders: (1) Subject to Order 2 below, I stay the judgment and order of Harrison J of 10 June 2011 pending the outcome of the appeal. (2) Within 10 business days of today's date the applicant to pay $500,000 to Dr Nair and lodge the balance of the judgment debt in an interest-bearing account in the name of the solicitors for the parties. (3) Expedite the hearing of the appeal. (4) Give the parties leave to approach the Registrar of the Court of Appeal this afternoon to obtain the earliest possible hearing date. (5) Costs of the motion to be the respondent's costs in the appeal.