Application for suspension of judgment pending appeal - Order for vacant possession of property - Holiday home - Whether appeal had reasonable prospect of success - Balance of convenience - Turns on own facts

Civil Judgments Enforcement Act 2004 (WA)

Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308

1 McLURE P: This is an application under s 15 of the Civil Judgments Enforcement Act 2004 (WA) (the Act) for an order suspending the enforcement of part of the judgment of Master Sanderson made on 13 December 2012.

2 On that date the Master entered summary judgment for the respondent against the appellants and ordered the appellants to pay the plaintiff/respondent the sum of $1,006,875.34 and that within 14 days the second appellant (Peter Fiore) give the respondent vacant possession of 23 Fern Road, Eagle Bay (the Eagle Bay property).

3 The application was listed for hearing on an urgent basis on 4 January 2013. I ordered that the operation of the possession order be suspended until 4.00 pm on 10 January 2013.

4 The appellants seek an order that until the disposition of the appeal or further order the operation of the judgment of Master Sanderson dated 13 December 2012 be suspended. However, the affidavit of Damian Molony in support of the suspension application is confined to the Eagle Bay property. It is confirmed by the appellant's counsel that the suspension application relates to that property.

5 The principles applicable to the exercise of the discretion under s 15 of the Act are in my view materially the same as those that govern the disposition of an application under the Supreme Court Act 1935 (WA) and the Supreme Court Rules 1971 (WA) which give the Court of Appeal the power to grant a stay of execution. Those principles are conveniently collected in the Full Court decision of Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308.

6 They are first, that the successful litigant at first instance will ordinarily be entitled to enforce the judgment pending the determination of any appeal. Secondly, it is for the party seeking a stay to move the court to a favourable exercise of its discretion. Thirdly, the court will not grant a stay unless special circumstances are shown justifying the departure from the ordinary rule.

7 A central issue is whether the grant of a stay is perceived to be necessary to preserve the subject matter or integrity of the litigation. If that can be demonstrated the stay will generally still be refused unless it can be established that the appeal has reasonable prospects of success. If that hurdle can be overcome the stay may still be refused where it appears that the balance of convenience does not lie in favour of the applicant.

8 I start with the requirement that the appeal have reasonable prospects of success. By a deed dated 2 March 2012 between Mark Caruso, the respondent as lender, and Mr Fiore and Raysun Investments Pty Ltd, the appellants as borrowers, Mr Caruso agreed to loan funds to Mr Fiore and Raysun comprising first $600,000, being $500,000 already loaned to the borrowers under a prior loan agreement and interest thereon of $100,000; secondly, a further loan of $200,000; and thirdly such further amounts as the lender advanced to the borrowers.

9 There is no dispute that the money was loaned, that it has not been repaid, that notice of default has been given and that the default remains unrectified. There is also no dispute that Mr Fiore has signed the loan deed in his personal capacity as borrower.

10 The evidence also establishes that Mr Fiore, a director of Raysun, signed the loan deed on behalf of Raysun. The other signatory for the company is purportedly Mr Fiore's wife. She has sworn an affidavit denying that she signed the loan deed.

11 Mr Fiore, the sole registered proprietor of the Eagle Bay property, executed a mortgage to secure the payment of the 'secured money', a term which is defined to include any money Mr Fiore, whether alone or with others, was liable to pay to the mortgagee, Mr Caruso. The mortgage also includes personal covenants to pay the secured moneys.

12 The borrower's obligations under the loan deed are joint and several: see, inter alia, cl 3, cl 4 and cl 8.

13 There are some significant obstacles in the way of the appellants succeeding, including the need to establish first, even if Mrs Fiore did not sign the loan deed, that the loan deed would be void and unenforceable as against Mr Fiore; secondly, even if the loan deed is void and unenforceable against both Mr Fiore and Raysun, why they would not be liable in debt for the principal and interest, which claim in debt is arguably open on the existing pleading; and thirdly, that the amount acknowledged to be owing is not secured by the mortgage.

14 Having regard to those three issues I am not persuaded that the prospects of success of the appeal are such as to justify a departure from the ordinary rule in relation to stays or suspensions.

15 Moreover, the Eagle Bay property is a holiday home. Although it has physical and geographic features described as unique, the fact that it is a holiday home is relevant in an assessment of the balance of convenience. The reality is that if the appellants succeed in the appeal and any mortgagee sale is unauthorised the appellants can seek compensation for any loss. For these reasons I would dismiss the application for suspension.