Davey v Herbst and Bray [2011] ACTCA 27

Court of Appeal (ACT)|2011-12-23|Before: Burns J, Gray J

1. The appellant, John Patrick Davey, is appealing to this Court from a decision of Gray J delivered 19 May 2010 in proceedings SCA 34 of 2010 dismissing an appeal by the appellant from certain orders made in the Magistrates Court in April and May 2010, including an order pursuant to r 1146 of the Court Procedure Rules 2006 (ACT) confirming orders of the Registrar of that Court that summary judgment be entered for the first respondent in the amount of $39,247.44 plus interest, dismissing a counterclaim against the first and second respondent's, entering judgment in favour of a third party against the appellant with respect to a third party notice issued by the appellant and costs orders made against the appellant. In addition to dismissing the appellant's appeal, Gray J ordered that the appellant pay the respondent's costs of the appeal.

2. On 22 January 2010 the appellant was ordered to pay the first and second respondent's costs of and incidental to proceedings CS 81763 of 2008 before the Registrar of the Magistrates Court. On 4 May 2010 the appellant was ordered to pay the first and second respondent's costs as agreed or assessed on an indemnity basis in proceedings CS 81763 of 2008 (on appeal to a Magistrate from the Registrar). On or about 26 October 2011 a bill of costs with respect of the costs orders was assessed in the amount of $124,213.13.

3. It appears to be common ground that the judgment debt itself in Magistrates Court proceedings CS 81763 of 2008 has been paid in full by the appellant, notwithstanding the present appeal. Pursuant to the orders made in the Magistrates Court, which were not interfered with by Gray J, the appellant is still liable to pay to the first and second respondent's amounts by way of costs, in particular, the sum of $124,213.13 previously mentioned.

4. On 17 October this year, the appellant made an application in the Magistrates Court for an instalment order to pay the costs assessed by the Registrar of the Magistrates Court. On 20 October 2011 an instalment order was made by the Magistrates Court. On 6 December 2011 the instalment order was set aside by Magistrate Campbell, with no order as to costs.

5. A bankruptcy notice was issued on 14 October 2011 naming the first respondent by her attorney as the creditor and claiming the amount of $124,213.13 pursuant to the Certificate of Costs Assessment in proceedings CS 81763 of 2008.

6. The appellant now seeks orders that enforcement of the judgments and costs orders in and relating to ACT Magistrates Court proceedings CS 81763 of 2008 and ACT Supreme Court proceedings SCA 34 of 2010 be stayed until such time as his appeal to the Court of Appeal is heard and finally determined. The grounds of the application are:

The Appeal herein against the Judgment of the Honourable Justice Gray in the said Supreme Court matter SCA 34 of 2010 is presently on foot before this Honourable Court, upon the Grounds stated in the Notice of Appeal filed herein and the said Appeal has reasonable prospects of success.
The relevant Judgment Debt itself, for the sum of $46,547.49 in the ACT Magistrates Court Proceedings No CS 81763 of 2008, has been paid in full by the Appellant, notwithstanding that the said Appeal is on foot against the said Judgment of the Honourable Justice Gray.
Appropriate securities are presently held by the First and Second Respondents pursuant to Consent Orders made by His Honour Master Harper in 2010 for all costs up to and including the said Supreme Court proceedings, the subject matter of which forms the basis of the said Appeal herein.
On 6 December 2011, Magistrate Campbell set aside an Instalment Order in respect of the costs orders in the said Magistrates Court proceedings and the effect of the setting aside of that Instalment Order is to remove the statutory stay of enforcement of the costs orders in the said Magistrates Court (as quantified at $125,017.96 in the certificate of Default Costs Assessment issued by Registrar Jorgensen) hitherto in place under Rule 1809 of the Court Procedure Rules 2006.
The First Respondent has informed the Appellant (Mr Davey) that she has procured the issue of a Bankruptcy Notice for the said amount of $125,017.96 and intends to serve it upon the Appellant.
One effect of any resulting Bankruptcy of the Appellant would be to render the Appellant unable to prosecute his Appeal herein and to suffer irremediable prejudice.
Further, any resulting Bankruptcy would place in jeopardy the unrestricted legal practicing certificate of the Appellant which could not be remedied by an order for costs or an order for damages; and would likewise adversely and irremediably affect the livelihoods of the employees of the Appellant's legal practice, Herm Legal and Migration Services.
Upon the balance of convenience and of prejudice, and in the interests of justice, the stay of enforcement sought by this Application should be put into effect until the Appeal before this Honourable Court is heard and finally determined.

7. The reference to the sum of $46,547.49 in par 2 of the grounds of this application is presumably a reference to the judgment sum of $39,247.44 plus interest on that sum. The reference to a costs order in the sum of $125,017.96 in pars 4 and 5 of the grounds of this application appears to be an error on the part of the appellant. Copies of both the Certificates of Costs Assessment from the Magistrates Court and the Bankruptcy Notice issued on behalf of the first respondent refer to a sum of $124,213.13.

8. The first respondent opposes the orders sought by the appellant, submitting that the evidence does not support the orders sought and that the appellant's prospects of success on the appeal are negligible.

9. As the matter is one of some urgency, I have agreed to give my decision and reasons before the Christmas break. Necessarily, this means that I have not considered the appellant's grounds of appeal in the same depth as otherwise may have been the case. Of course, I am not currently hearing the appeal, and as such my main concern is to determine whether the grounds raised by the appellant are arguable.

10. I take the applicable test governing the present application to be that set out by the New South Wales Court of Appeal in Alexander & Ors v Cambridge Credit Corporation Limited (Receivers Appointed) & Anor (1985) 2 NSWLR 685 at 694-5:

... In our opinion it is not necessary for the grant of a stay that special or exceptional circumstances should be made out. It is sufficient that the applicant for the stay demonstrates a reason or appropriate case to warrant the exercise of discretion in his favour.

... The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it.

... Two further principles can be mentioned. The first is that where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay. Thus, where it is apparent that unless a stay is granted an appeal will be rendered nugatory, this will be a substantial factor in favour of the grant of a stay.

(References omitted)

11. This decision was applied by Miles CJ in Griffiths v Australian Postal Commission (1987) 87 FLR 139, and more recently by Refshauge J in Benjamin v GB Franchising Australia Pty Ltd [2008] ACTCA 11. In the latter case, as here, there was evidence that bankruptcy proceedings has been commenced by the judgment creditor. In granting the stay, Refshauge J accepted that if the appellant was made bankrupt he would not be able to pursue the appeal (s 60 (2) of the Bankruptcy Act 1966 [Cth]) which would inflict irremediable prejudice on the appellant.

12. I take from these authorities the following principles:

a) in order to grant a stay it is not necessary for the applicant to demonstrate special or exceptional circumstances;

b) in order to justify the court exercising its discretion to grant a stay, the applicant must demonstrate some reason or appropriate case that warrants the exercise of the discretion;

c) such a reason would include the applicants prospects of success on the appeal, and the likelihood of the applicant suffering irremediable prejudice if the stay is not granted;

d) in determining whether to grant a stay, the competing right of the parties and the balance of convenience must be weighed.

13. The appellant submits he has "reasonable prospects of success" with respect to his appeal, and that if a stay is not granted he will suffer irremediable prejudice. First, the appellant submits that he will suffer prejudice in that the first respondent will proceed with her intention to serve the Bankruptcy Notice on him, which could ultimately have the effect of making him bankrupt and precluding him from pursuing his appeal. Secondly, he submits that if he is made bankrupt this would place in jeopardy his unrestricted practicing certificate, which in turn would jeopardise his livelihood and that of his employees.

14. I accept that these prejudices may flow to the appellant if he is made bankrupt. But what are the prospects of that occurring?

15. The appellant placed evidence before me of his financial circumstances, with a view to persuading me that he has the capacity to pay the current costs orders and any further costs orders which may be made against him should his appeal be unsuccessful. His current assets and liabilities, as revealed, are:

This leaves a balance of his current assets over his liabilities of $268,069.65. The appellant's major asset is a unit in Barton, over which the first respondent holds an unregistered mortgage and has lodged a caveat.

16. The applicant gave evidence that he has attempted to source finance from family members in order to pay the amount owing under the Certificate of Costs Assessment, apparently without success. He admitted, however, that he has not approached any financial institutions with a view to raising the required sum against the equity he holds in the premises at Barton. In the light of this evidence, I find it impossible to conclude that the potential prejudice raised by the appellant is likely to occur. The appellant has, for whatever reason, chosen not to investigate the possibility that he may be able to raise the required amount from a financial institution utilising the equity he holds in his property. On the face of the figures, it does not appear to be a hopeless or even unlikely proposition that a bank or other financial institution would lend him the necessary funds. If the appellant had taken reasonable steps to raise the funds through a financial institution, and had been unsuccessful, the position would be otherwise. By refraining from making these enquiries, the appellant deprives himself of the ability to demonstrate the prejudice he alleges may arise in the absence of a stay.

17. Doubtless, the raising of funds through a financial institution would come at some cost to the appellant. This, in itself, would constitute a prejudice, albeit not of the same magnitude as that likely to flow from bankruptcy. It is therefore appropriate that I consider the appellant's prospects of success on his appeal.

18. On 13 December this year I granted the appellant leave to file an Amended Notice of Appeal. The grounds of appeal from the decision of Gray J are:

LATE AMENDMENT
1. His Honour erred in finding no application for the principles in Aon v the Australian National University [2009] HCA 27; (2009) 239 CLR 175.

(a) Whether the court rightly determined to exercise its discretion to allow the amendment, the Defendants had a right pursuant to regulation 512 Court Procedure Rules 2006 to re-plead to the amendment. That right was denied by the learned Magistrate who allowed the amendment and entered Judgment immediately following the exercise of her discretion. His Honour erred in not finding that the Appellants were entitled to re-plead following the amendment.

(b) The exercise of discretion was in error and inconsistent with the principles in Aon v the Australian National University.

His Honour erred in finding that the participation of solicitors in the negotiations and execution of the Deed precluded a claim for duress, coercion of or some other vitiating circumstances impugning the enforceability of the Deed.

Particulars

(a) There is no rule that lawful threats cannot constitute improper pressure leading to duress. The matter was properly one for evidence at trial.

(b) The demand to pay monies on the evidence was made before any funds were due. It constituted an act of duress by a third party in the form of the Plaintiff.

(c) The assault by the 2nd Respondent against the Appellant in conjunction with the illegitimate claim for funds from the company Herm Fine Frames Pty Ltd constituted illegitimacy leading to the proper conclusion that the Deed was entered into under duress. The matter was properly one for the testing of all evidence at trial and unsuitable for summary judgment.

(d) The absence of consideration is a matter relevant to a determination concerning duress.

(e) The court erred in not properly considering the established tests for duress pursuant to Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40 and Barton v Armstrong [1973] 2 NSWLR 598.

CAPACITY OF THE PLAINTIFF TO SUE FOR THE DEBT & QUANTAUM OF THE DEBT

His Honour erred in finding that the concession that the plaintiff was a beneficiary entitled her to sue on behalf of the estate of the late Peter Herbst.

Particulars

(a) A beneficiary cannot sue on behalf of the estate. In It was conceded in evidence that the personal legal representative of the deceased Peter Herbst (that being the public trustee) was invited to participate in the litigation and declined.

(b) The debt as a chose in action in the name of Valerie Herbst was properly characterised as a tenancy in common due to the operation of section 211 Civil Law (Property) Act 2006. Valerie Herbst was properly only entitled to 50% of the debt claimed as she lacked capacity to sue for a debt that remains not administered in the estate of the late Peter Herbst

His Honour erred in finding that the Deed was enforceable against the Appellant by way of contractual obligation.

Particulars

(a) Following admissions by the Plaintiffs that no funds were lent to the defendants, the proper constructions of the deed was whether it imported a third party obligation of the defendants to the plaintiffs. This was a proper matter for trial.

(b) Law and equity recognise three mechanisms to which 3rd parties (the defendants) may be obliged to pay for another (the company). Those mechanisms are novation, assignment or guarantees. The deed fails the test for all three legal and equitable requirements as a third party obligation. The matter was properly one for pleading and trial given the various tests for novation, assignment and guarantees.

(c) The plaintiff sued on the basis that the obligations of the Defendants was by way of assignment. Equity does not recognise the assignment of a detriment.

APPLICATION OF THE RULES FOR SUMMARY JUDGMENT

His Honour erred in finding that the pre-requisites for entering summary judgment were met.

Particulars

(a) Pursuant to Regulation 1146(2)(b) the defendants were entitled to avoid summary judgment if sufficient facts were disclosed to entitle the defendants to defend the claim for relief. Those facts disclosed were:

Admission by the Plaintiff that no funds we were lent to the defendants.

Admissions by the Plaintiff that no funds were repaid by the defendants.

Admission by the 2nd Respondent that an "incident" took place between he and the appellant.

Pursuant to the admissions of the Plaintiff, the Defendants were entitled to test at trial the evidence extraneous to the Deed at trial.

His Honour erred in finding that the order for indemnity costs was properly made by the Magistrate.

Particulars

(a) The Order for indemnity costs made by the learned Magistrate was not consistent with the principles articulated in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225.

(b) Pursuant to regulation 1726(2) Court Procedures Rules 2006, a party who amends a document must pay the costs of and caused by the amendment, unless the Court otherwise orders. No application pursuant to Pt 6.2 was made for an order of the Court "otherwise ordering". The exercise of the Court's discretion was not reasonable given the conduct of the Plaintiff in the litigation.

(c) The proper order of the Registrar in dismissing a Plaintiff without a cause of action (Adam Herbst) and Peter Herbst (deceased) was an order for indemnity costs against Adam Herbst who instructed his solicitors that he had a cause of action and that his father had capacity. It is not an answer that a "mistake" was made by solicitors acting. The conduct of the solicitors was properly a matter for trial. In dismissing the counterclaims the learned Magistrate deprived the defendants of the capacity to adduce evidence that could have impacted on a submission for costs and the exercise of the courts discretion.

(d) At the conclusion of the Supreme Court appeal, the Respondents made application for an order for indemnity costs. His Honour Justice Gray denied that application. No order for costs was made concerning that application. The Appellants are entitled to an order for costs in opposing the application for indemnity costs in the Supreme Court.

19. The appellant makes two complaints about the decision of Gray J concerning the learned Magistrate's order permitting the amendment of the Statement of Claim to describe the claim as a debt arising from money loaned to the appellant and one Eric Bray, to one arising from money loaned to a company and subsequently assigned to them. The first complaint, which strictly does not arise from any principle in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (Aon v ANU), is that the appellant was denied a right to re-plead to the amendment before the learned Magistrate entered judgment. The second complaint is that Gray J was in error in finding that the decision of the learned Magistrate to allow the amendment was not contrary to the principles enunciated in Aon v ANU.

20. With respect to the appellant's first complaint, Gray J noted that the amendment made by the learned Magistrate was one of which the appellant had prior notice and the learned Magistrate "was merely formalising a matter of which the appellant had ample notice and opportunity to address...". Gray J found that the amendment did not amount to an abandonment of the claim as it had originally been pleaded, nor did it constitute the pleading of a new cause of action. The respondent's claim was always based on the terms of a written deed of agreement dated 21 January 2005 executed by the appellant and Eric Bray, and that remained the case after the amendment was allowed. Gray J determined (bearing in mind the limited nature of the amendment) "there does not appear to be any efficacy at all in permitting the appellant to re-plead on this aspect".

21. In my opinion, the appellant does not have strong prospects of success with respect to his first complaint.

22. Turning to the appellant's second complaint under this ground, Gray J determined that as the amendment did not substitute a new cause of action or a different claim, the principles enunciated in Aon v ANU did not apply. Whilst it may be argued that many of the statements of principle found in that case extend beyond the particular circumstances then before the High Court and have application to the conduct of litigation generally, it is undeniable that the facts in this case, and the circumstances in which the amendment was allowed, are markedly different to those which pertained in Aon v ANU. In my opinion the appellant does not have strong prospects of success with respect to this complaint.

23. In her findings at first instance, the learned Magistrate made reference to the fact that at all relevant times the appellant has been legally represented. She subsequently rejected the appellant's claim that duress could be raised as a defence to the claim against him. Regarding this finding, Gray J said:

After making this finding, the magistrate then rejected the submissions made that duress could be raised as a defence to the plaintiff's claim. Having regard to the facts found by the magistrate that also has to be correct. As all times the appellants were legally represented. The final deed upon which this claim is founded was formally executed by them. In those circumstances the appellants claim that the agreement is unenforceable on such a ground is not supported by the facts that the magistrate accepted and is clearly based on unjustified assertions and borders on being vexatious.

24. I do not read his Honour's decision, either in the quoted passage or generally, as expressing a finding that the participation of solicitors in negotiations or the execution of documents precludes a claim for duress or coercion. Rather, both the learned Magistrate and Gray J considered whether such a claim was tenable in this case. Each determined it was not. The appellant does not have strong prospects of success with respect to this ground.

Capacity of the Respondent to Sue for the Debt and the Quantum of the Debt

25. During the course of the proceedings in the Magistrates Court, one of the plaintiffs, Mr Peter Herbst, died and for some time the remaining plaintiffs, now the first and second respondents, took no action to regularise the proceedings. The appellant now complains that Gray J made a finding that the first respondent, as a beneficiary of the estate of the deceased, was entitled to sue on behalf of his estate. Secondly, the appellant complains that Gray J was in error in finding that the first respondent was entitled to the entirety of the debt claimed, as s 210 of the Civil Law (Property) Act 2006 (ACT) made the debt "a tenancy in common".

26. I do not read the judgment of Gray J as determining that the first respondent, as the beneficiary of the estate of Peter Herbst, was entitled to sue on behalf of Peter Herbst. What his Honour said was:

Although the particulars refer to s 211 of the Civil Law (Property) Act 2006 which deals with tenants in common acquiring a legal estate, the appellants complaint seems to be that as the only debt arising was owed to both Peter Herbst and Valerie Herbst, Valerie Herbst could not be entitled to more than one half of the amount sued for.
Before the magistrate both the issue of whether Mrs Herbst was entitled by way of survivorship as a joint owner of the debt owed or by way of inheritance as the joint beneficiary of the estate of Peter Herbst was raised.
It was put to Mr Davey and to Mr Bray's counsel that the question of inheritance was not a live issue. There was assent to this proposition. I take the assent to extend to concurrence with the position that there was no issue with the entitlement of Mrs Herbst to the whole of the debt owed either by way of survivorship or inheritance. In the circumstances, the point that the appellants seem to wish to now take should not be open to them and is without merit.

27. The reference to s 211 of the Civil Law (Property) Act 2006 (ACT) in both the above extract and in the particulars to this ground in the Amended Notice of Appeal appears to be an error. As Gray J correctly notes, s 211 provides for the legal and equitable estates held by two or more people in certain circumstances to be held by them as tenants in common unless they otherwise agree. I take it that the appellant intended to refer to s 210 of the Civil Law (Property) Act 2006 (ACT).

28. The ground of appeal citing the operation of s 210 of the Civil Law (Property) Act 2006 (ACT) raises an interesting and, so far as I can ascertain, unsettled issue: does s 210 apply to a chose in action such as a debt? Section 210 is in the following form:

Interpretation of conveyance etc of property to 2 or more people together

(1) A disposition of the beneficial interest in property (whether or not with the legal estate) to or for 2 or more people together beneficially is taken to be made to or for them as tenants in common, and not as joint tenants.

(2) However, this section does not apply -

(a) to people who, under the instrument, are executors, administrators, trustees, or mortgagees; or

(b) if the instrument expressly provides that they are to take as joint tenants.

(3) This section applies to the interpretation of an instrument commencing after 8 May 1958

29. Section 210 has its counterparts in other jurisdictions, notably s 26 of the Conveyancing Act 1919 (NSW), which is in slightly different form:

26 Construction of conveyance etc of any property beneficially to two or more persons together

(1) In the construction of any instrument coming into operation after the commencement of this Act a disposition of the beneficial interest in any property whether with or without the legal estate to or for two or more persons together beneficially shall be deemed to be made to or for them as tenants in common, and not as joint tenants.

(2) This section does not apply to persons who by the terms or by the tenor of the instrument are executors, administrators, trustees, or mortgagees, nor in any case where the instrument expressly provides that persons are to take as joint tenants or tenant by entireties.

30. It has been held that s 26 of the New South Wales Act can apply to an entry on a share register: see the judgment of Long Innes J in the matter of In re Wool Trading Co Ltd (In Liquidation) (1927) 28 SR (NSW) 106 at 116, but I can find no authority which directly applies s 26, or any of its counterparts, to an instrument dealing with a debt. The decision of Long Innes J was subject to criticism by Mr F.C. Hutley in the article The Conveyancer (1939) 13 ALJ 229 where he argued that s 26 is a section directed towards the construction of instruments, and was not intended to make changes to the substantive law of property: "it is directed to disposing instruments, rather than to the types of legal interest capable of disposition": see also Registrar General (NSW) v Wood [1926] HCA 43; (1926) 39 CLR 46. At law, no chose in action could be held in common: In re McKerrell; McKerrell v Gowans [1912] 2Ch 648, although the position is different in equity. Hutley argued at [232]:

The general purpose of the section is to ensure that interests with the often troublesome incidents of joint tenancy should not be created without the parties to their creation actually deciding that they wanted an interest created with those incidents, and it is submitted that the other considerations advanced above and this overriding purpose, implying as it does that both joint holdings and holdings in common were possible in the property in question, can be given effect to by construing the word property, as "property in which prior to the commencement of the Conveyancing Act joint holdings and holdings in common could have existed both at law and in equity". This will exclude shares, debentures, Government stock of all kinds, shares in partnerships, shares in residuary estate, deposit receipts, dividends and debts, etc., from the operation of the section.

31. Whilst s 210 of the Civil Law (Property) Act 2006 (ACT) is in somewhat different form, the heading of the section (which forms part of the Act: s 126 of the Legislation Act 2001 (ACT)) and the terms of s 210 (3) strongly suggest that it is intended to have the same effect as s 26 of the Conveyancing Act 1919 (NSW).

32. Prior to the passing of the Civil Law (Property) Act, s 26 of the Conveyancing Act 1919 (ACT) applied and was in essentially the same terms as s 210. Previously, the law of Law of Property (Miscellaneous Provisions) Ordinance 1958 (ACT) provided that s 26 of the Conveyancing Act 1919 (NSW) applied in this Territory, so that it appears that a provision cognate with s 210 has applied in the ACT for many years.

33. Whilst I am attracted to the proposition that s 210 is only intended to apply to property that was capable of being held jointly and in common at law and in equity prior to the passing of s 210 and its predecessors, the position is far from clear. It appears to me that this ground of appeal is arguable, and has reasonable prospects of success.

34. The appellant complains that Gray J erred in finding that the deed was enforceable against the appellant by way of contractual obligation. The particulars provided by the appellant focus on whether the deed of agreement could operate so as to effectively assign the detriment of the debt owing to Valerie and Peter Herbst by Herm Fine Frames Pty Ltd to the appellant and Eric Bray. With respect to that submission Gray J said:

I do not agree that the magistrate necessarily found that there was a valid assignment by Herm Fine Frames Pty Ltd of the debt to the appellants arising by reason of the written agreement. The magistrate accepted that there had been an assignment of the debt owed by Herm Fine Frames Pty Ltd to Peter and Valerie Herbst which the appellants by their execution of the deed undertook to repay in the manner provided for in the deed. In view of the recital to the deed that had been inserted in the deed at the appellant's request, namely that they "have agreed to have the Advance assigned to them personally", the point seems to have little substance and no relevance in light of my findings as to the cause of action which gives rise to the summary judgment.

35. With respect, the issues sought to be agitated by the appellant under this ground appear to be irrelevant to the facts of the dispute. The deed does not, in my view, purport to effect an assignment. The assignment purportedly took place outside the terms of the deed. Whether that assignment would have been effective is irrelevant given the fact that the appellant executed a deed undertaking to pay a specified sum of money in a manner provided for in the deed. The appellant does not have reasonable prospects for success on this ground.

36. The particulars to this ground of appeal effectively rehash matters ventilated in the earlier grounds, and need no further elaboration.

37. The appellant makes various complaints concerning the costs orders in the Magistrates Court and in the proceedings before Gray J. The complaint concerning the costs orders made in the Magistrates Court was apparently not ventilated before Gray J, and the appellant will need to convince this Court that he should be allowed to ventilate it now. The remaining complaint, concerning the costs orders of Gray J, is not likely to have a great bearing on the level of any indebtedness of the appellant to the first respondent if his other grounds of appeal are unsuccessful.

38. In my opinion, only one of the grounds raised by the appellant has reasonable prospects of success on the material placed before me. However, success on that ground is far from certain. The appellant, on paper, has the assets to meet the costs order made in the Magistrates Court, although his equity in his property at Barton may be adversely affected by fluctuation in property values during the period that the appeal is pending in this Court. In addition, there is always a possibility that if the appellant is unsuccessful in this appeal, bankruptcy may follow and the respondent may be caught up in that process, occasioning further costs. The appellant would appear to be in a position to raise the required funds by borrowing from a financial institution if he chose to adopt that course.

39. The first respondent has been successful before the Magistrates Court and before a single judge of the Supreme Court. This litigation has followed a tortuous course over some three years, with the appellant being unsuccessful on virtually every issue. The judgments of the Magistrates Court and Gray J are in no way provisional, and are not to be treated as such pending the hearing of this appeal. If, as appears to be the case, the appellant has the capacity to raise the funds to pay the Magistrate Court costs order, the potential prejudices to which he adverts will not come about.

40. In my opinion, applying the test set out in Alexander v Cambridge Credit Corporation Ltd to the material before me, the application should be refused.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Solicitor for the Appellant: Herm Legal & Migration Services

Counsel for the First and Second Respondent: Mr Walker

Solicitor for the First and Second Respondent: Williams Love & Nicol

Court Procedure Rules 2006(ACT)

Conveyancing Act 1919(ACT)

Law of Property (Miscellaneous Provisions) Ordinance 1958(ACT)

Law (Property) Act 2006

Property (Miscellaneous Provisions) Ordinance 1958

Procedure Rules 2006

Procedures Rules 2006

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