Gangemi v Osborne & Anor [2008] VSCA 221

3 Osborne invested $200,000 in the development of the Buckley Street properties in return for a 12.5% interest in the joint venture, subject to the joint venture obtaining planning permits within 18 months of the date of the investment. If the permits were not obtained within 18 months, the $200,000 would be repaid to Osborne, together with interest of $50,000.

4 Gangemi denied that this term was part of the agreement, arguing that Osborne made an unconditional investment of $200,000 in the joint venture in return for a 12.5% interest.

5 The permits were not obtained in time and Osborne sued, seeking $250,000 plus interest. The trial judge delivered judgment in this proceeding on 22 May 2008,[1] finding in favour of Osborne, and ordering Gangemi to pay Osborne $250,000 plus interest of $137,405, totalling $387,405.

6 The agreement which Osborne entered relating to the Buckley Street development was primarily oral. Accordingly, the evidence in the proceeding was primarily oral testimony from Osborne and Gangemi. Relevantly, his Honour observed:[2]

The evidence is in many respects confused and incomplete. This is to be expected. There are four parties, each with a different story to tell. The critical events occurred between four and ten years ago. The parties were in frequent oral contact on many issues, both business and personal. At many relevant times, the parties dealt with each other as close friends. The parties did not adhere to formalities such as holding company meetings and passing resolutions. There are virtually no contemporaneous file notes. In these circumstances, it is unlikely that the parties would have a clear and specific recollection of particular conversations.

The solicitors for the parties were involved at relevant times in respect of significant issues. None of the solicitors gave evidence. Nor were any file notes made by solicitors as to relevant events available or placed in evidence. Evidence from the solicitors would have been of great assistance in resolving a number of the factual disputes which arise on the evidence.

As a result of these matters, it is necessary to treat the evidence of oral recollection with caution, and, wherever possible, to determine factual disputes by reference to the probabilities arising from the whole of the evidence, in particular from contemporaneous documents and non-contentious established facts. However, there are some issues where the demeanour and general credibility of the parties assumes a greater significance.

Mr Gangemi gave evidence over many hours. At times, he endeavoured to portray himself as an unsophisticated businessman who did not pay any attention to details. At other times, he sought to rely upon his business acumen and experience. Although his recollection of critical conversations was poor, he was nevertheless prepared to forcefully deny the evidence of others which was unhelpful to his case. He was consistently evasive on important matters and often dissembled. For example, he said that he was confused or did not understand unambiguous questions on issues which I am satisfied he well understood. He gave many inconsistent responses to the same or similar questions, often within seconds or minutes of the issue first being raised with him in cross-examination. He hid in generalities, conclusions and non-committal responses. I am satisfied that he gave false evidence on a number of important issues. The reasons for this will become apparent when the facts are considered below.

In contrast, Mr Lanciana was generally an impressive witness. He gave direct answers. He made numerous concessions against his interest. His evidence was consistent in nearly every respect. He presented as a hard-nosed businessman who was aggressively entrepreneurial. On the other hand, he was careless when it came to recording financial transactions and corporate dealings.

It was submitted on behalf of Mr Gangemi that Mr Lanciana was nevertheless a witness who lacked any credibility because he "is a thoroughly disreputable and dishonest person". In this regard, reliance was placed upon a number of matters, most of which were candidly admitted by Mr Lanciana and some of which were the subject of his own evidence-in-chief.

I accept that there are a number of collateral matters involving misleading, unethical or dishonest conduct by Mr Lanciana.

Mr Lanciana's has a history of criminal convictions, including a conviction for theft of a person's wallet in order to use his identity to set up a false electricity account for the purposes of stealing electricity in order to grow marijuana.

The evidence establishes that, on a number of occasions, Mr Lanciana has engaged in misleading conduct in order to minimize or avoid taxation or stamp duty on relevant transactions.

Mr Lanciana acted as a de facto director of a number of companies, in particular Pre Need, at times when he was, by reason of his criminal convictions, disqualified by s 206B(2) of the Corporations Act 2001 (Cth) from managing corporations. In this respect, he was assisted by Mr Gangemi, who knowingly acted as a "puppet" director of companies under the effective control and management of Mr Lanciana, when he knew that Mr Lanciana was disqualified from managing those companies by reason of his criminal convictions. This conduct reflects poorly on Mr Gangemi, as well as Mr Lanciana.

Mr Lanciana admitted forging Mr Gangemi's signature on a number of credit applications relating to the supply of materials or services to Pre Need or Clapana. Mr Lanciana gave evidence that he signed Mr Gangemi's signature with Mr Gangemi's consent, because Mr Gangemi was unavailable to sign the necessary credit applications. Taking the evidence as a whole, I think that it is extremely unlikely that Mr Gangemi gave his consent to Mr Lanciana signing his name to the credit applications. I find that he did not do so. The evidence establishes that, although he was the sole director at relevant times, Mr Gangemi left control of all of the financial dealings of Pre Need and Clapana to Mr Lanciana, and did not seek to involve himself in their financial affairs until he became concerned about their tax liabilities and the use by Mr Lanciana of company funds for personal purposes, in about April 2003. I find that Mr Lanciana did forge Mr Gangemi's signature when suppliers requested director's guarantees. Whilst there is no evidence that any of these guarantees were ever called upon, these are serious matters which reflect poorly on Mr Lanciana as a person and a witness.

The Court will refer these matters to the Attorney-General to take any necessary action or make any necessary referrals to the appropriate statutory authorities.

In my view, the credibility of Mr Gangemi and Mr Lanciana should, wherever possible, be determined on an issue by issue basis having regard to the probabilities affecting that issue. Where an issue cannot be determined on the probabilities, I will consider the demeanour and the credibility of Mr Gangemi and Mr Lanciana respectively on that issue. If there is no reason to prefer the evidence of one against the other on this ground, I will determine the issue by reference to the general demeanour and credibility of Mr Gangemi and Mr Lanciana. In doing so, I will prefer the evidence of Mr Lanciana to that of Mr Gangemi. Although there are a number of established collateral matters indicating that Mr Lanciana is prepared to engage in dishonest or misleading conduct, his evidence as a whole accords more with the probabilities. With minor exceptions, it was consistent throughout. As I have said, the same cannot be said of Mr Gangemi. He gave evasive evidence, dissembled when it suited him and gave inconsistent evidence on important matters. I am satisfied that he told deliberate untruths in respect of a number of matters, in particular concerning signatures which he has falsely denied are his and in connection with the settlement of his disputes with Mr Lanciana by the document titled "Heads of Agreement" dated 9 September 2003. These matters are considered in detail below.

Further, I find that Mr Gangemi gave false evidence in making allegations of forgery against Mr Lanciana. In my view, Mr Gangemi deliberately seized upon admissions made by Mr Lanciana, that he forged Mr Gangemi's signatures on some credit applications, as a springboard for making a number of allegations of forgery against Mr Lanciana in connection with other documents which do not suit Mr Gangemi's case.

Mr Osborne presented as an honest witness. With a few exceptions, he gave direct answers to all questions put to him and willingly made concessions against his interest. His evidence was consistent throughout. There are some aspects of Mr Osborne's evidence which are mistaken. However, in general, I prefer his evidence to that of Mr Gangemi where there is direct conflict. The reasons for this will become apparent.

8 Further, Gangemi has offered $12,500 as security to be paid into court in response to Osborne's request for $30,000. This indicates that Gangemi is not wholly without capacity to meet a costs order against him.

9 On 28 June 2008, Gangemi served a Notice of Appeal against the whole of the orders of the Trial Division on 29 May 2008.

10 Osborne has issued a bankruptcy notice against Gangemi in respect of the $387,405 debt. The 21 day period within which Gangemi had to respond to the bankruptcy notice has elapsed. It is not apparent that the Court has extended that period under s 41(6A) of the Bankruptcy Act 1966 (Cth), nor that a proceeding has been commenced against Gangemi to enforce the notice.

11 I observe that part of the motivation behind this application is Gangemi's desire to avoid becoming a bankrupt, which would be the consequence of enforcement of the judgment debt against him.[4] We note that this objective may be achieved alternatively, by an application to the Court to extend time for compliance with the bankruptcy notice pursuant to ss 41(6A) and 41(6C) of the Bankruptcy Act 1996 (Cth). The basis for this application would be that the judgment that causes the bankruptcy proceedings is being appealed, as is the case presently.[5]

12 An appeal does not operate as a stay of execution, but the Court may order a stay pending an appeal[6] where exceptional or special circumstances exist that justify a stay.[7] There is a presumption in favour of a stay not being ordered and Gangemi bears the burden of demonstrating the existence of exceptional or special circumstances.[8]

13 In Cellante v G Kallis Industries Pty Ltd,[9] Young CJ stated that special circumstances would exist where:

[F]or whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed.[10]

14 This is typically expressed as the risk where, if an appellant were successful on appeal, they would be denied the fruits of the appeal if a stay is not ordered.[11]

15 In summary, the factors relevant in considering whether to order a stay of a decision below are the prospect of an appeal being rendered nugatory, the balance of prejudice in depriving a party of the fruits of judgment against the risk that an appeal might be rendered nugatory, and the prospects of success of the appeal.

16 There is no satisfactory evidence before the Court regarding Gangemi's financial position. Significantly, Gangemi has not gone on his oath as to either his assets or his capacity to meet the debt the subject of the bankruptcy application brought against him. There is an affidavit from his solicitor deposing ownership of a property that is subject to various charges and other litigation. In the circumstances the silence of Gangemi in this respect is unsatisfactory and is a factor that weighs against the exercise of the discretion. Osborne has made an offer to Gangemi that Osborne would accept the $387,405 be placed in a trust account, which would be distributed following the determination of the appeal. If such a course is adopted, it negates any argument that Osborne will be unable to refund moneys paid to him by Gangemi.

17 Gangemi has not responded to this offer.[12]

18 The Court has the power to accept undertakings from parties in lieu of staying an order below.[13] Whilst these matters may impact on the exercise of the discretion, it is noteworthy that from the perspective of Osborne what is at stake is not security of the judgment but deprivation of its fruits.

19 There is nonetheless no evidence before the Court on this application that Osborne is impecunious, or would be unable to return the judgment sum to Gangemi if Gangemi were successful on the appeal. Since Gangemi bears the burden of demonstrating that a stay ought to be ordered, he has not demonstrated satisfactorily that the appeal would be rendered nugatory without a stay.

20 In Kalifair & Ors v Digi-Tech & Ors,[14] the New South Wales Court of Appeal considered a case where the applicant for a stay of a judgment against them, pending an appeal, was a company with no assets.

21 The Court concluded that because the company had no assets, the judgment could not be met in any event, and said:

On the other hand the appellants would suffer irremediable prejudice if they

were unable to prosecute appeals which might have succeeded. The prejudice

would include not only the loss of the chance of having the adverse judgments set aside, but also the loss of the chance of obtaining money judgments against one or other of the respondents. These losses would be irrecoverable as the appeals are their only avenue of legal redress.[15]

22 Gangemi relies on this case to support his argument that the balance of prejudice lies in favour of ordering a stay. Gangemi's financial position is not clear; he is apparently able to provide $30,000 as security for costs,[16] but claims that enforcement of the judgment debt by Osborne would push him into bankruptcy.

23 If a trustee is appointed, the likelihood that the appeal would be prosecuted is diminished, as the trustee has an obligation to handle any remaining funds prudently. However, this does not mean that the appeal would not be prosecuted.

24 In Challenge Charter Pty Ltd v Curtain Bros (Qld) Pty Ltd,[17] Callaway JA, with whom Chernov JA agreed, said that it was not 'irrelevant that the liquidator may still pursue the appeal if he or she considers that to be worthwhile.'[18]

25 Unlike the company in Kalifair, Gangemi clearly has some limited assets and it is possible that a trustee in bankruptcy would apply those funds to the prosecution of the appeal. This likelihood is, we submit, relative to the strengths of the case; a prudent trustee could not ignore an excellent case, just as a hopeless case could not be prosecuted.

26 Accordingly, without a stay, Gangemi would not lose his 'only avenue of legal redress'. This application being refused would only alter the likelihood of the appeal being prosecuted, as the decision would be made according to the principles applicable to trustees' discharge of duty.

27 The continued prosecution of other proceedings involving Gangemi would also be subject to the decision of a trustee in bankruptcy. There does not appear to be any authority that discusses their relevance to an application for a stay. It is limited, at best.

28 Gangemi submits that Osborne will suffer no prejudice if a stay is ordered, because Osborne holds a charge over the property at 86 Mitchell Street, Maidstone. Gangemi owns this property and the charge secures Osborne for 'all moneys' owing to him from Gangemi.

29 The title search of the Mitchell Street property confirms that a statutory charge is registered over the property, and that it is the subject of a caveat lodged by Osborne.[19] Perpetual Nominees Ltd holds a registered mortgage over the property, and Lanciana, Bloomingdale Holdings and Peter William Johnson all have caveats lodged over the property.

30 The value of this property is not known, and it is not clear how significant the other encumbrances are, nor their respective order of priority. Whilst it is possible that this charge can satisfy the whole debt to Osborne, it is also possible that the charge is worthless, especially if the mortgage in favour of Perpetual Nominees has a significant amount outstanding.

31 Even if the charge comfortably secures Osborne, then the sole prejudice that Osborne incurs by the trial judge's orders being stayed is delay in receiving the amount outstanding. This delay is offset by the application of statutory interest, and thus the prejudice Osborne faces is minimal. Gangemi would suffer significant prejudice without a stay as he would be placed into bankruptcy and lose control over his financial affairs.

32 If the charge over the Mitchell Street property does not de facto secure Osborne, then irrespective of whether the judgment is stayed or not, Osborne cannot obtain complete legal redress.

33 If there is no money at all that Osborne might recover pursuant to the charge, then it is irrelevant whether a stay is ordered for the reasons stated in Kalifair. However, if there is some money, but not enough to discharge the entire liability, a stay would prejudice Osborne as Gangemi might handle the Mitchell Street property (or other assets) in a manner that reduces their availability to meet Gangemi's debt to Osborne.

34 Gangemi enumerates eleven grounds of appeal in respect of the decision concerning Osborne, four of which effectively concern Lanciana. They are all challenges to findings of fact made by the trial judge regarding the investment/loan provided by Osborne.

35 As observed already, his Honour said of these proceedings:

The evidence is in many respects confused and incomplete. ... it is unlikely that the parties would have a clear and specific recollection of particular conversations.[20]

36 Further, the trial judge was 'satisfied that [Gangemi] gave false evidence on a number of important issues.'[21] His Honour further said that he preferred the evidence given by Osborne over that given by Gangemi in cases of direct conflict.[22]

37 Appellate courts are reluctant to interfere with findings of fact unless such findings were not open on the evidence. Appellate courts are even more reluctant to interfere where those findings were based on an assessment of the credibility of witnesses proffering competing or contradictory evidence.[23]

38 The totality of the dispute turned on a conversation between Osborne and Gangemi in late 2001 or early 2002. The evidence of the discussions is set out in the judgment.[24] In summary, Osborne gave evidence that there were conditions attached to the provision of the $200,000. That was his case. Osborne was believed. Gangemi was not. To succeed on the appeal Gangemi would not to satisfy the appellate court that Osborne's evidence was dishonest or a mistake was made.

39 In argument on the stay application much emphasis was placed on a document described as 'the Thrifty note'. It was described in the judgment expansively. In essence, it was Osborne's case that the Thrifty note supported his case as to the terms of his investment. His Honour found:

Mr Osborne says that, on or about 12 May 2003, he assisted Mr Gangemi when he returned a rental truck to the Thrifty Car Rental office in Richmond. Mr Osborne said that he followed Mr Gangemi in his car whilst Mr Gangemi drove the rental truck to the Thrifty office. According to the invoice issued by Thrifty to Mr Gangemi, the truck was returned on 12 May. Once Mr Gangemi had returned to the truck, and obtained his copy of the invoice, Mr Osborne said that Mr Gangemi sat in the passenger seat of Mr Osborne's car and, at that time, Mr Osborne asked him to write out the terms upon which Mr Osborne had invested. According to Mr Osborne, Mr Gangemi then wrote out the terms of Mr Osborne's investment on the back of the Thrifty invoice ("the Thrifty note").

DEED IS MADE THE _________ DATE 4/3/02

BY ANTONIO GANGEMI OF UNIT 6-3 ANCHOR PLACE PRAHRAN 3181

AT THE REQUEST OF ________ RICHARD OSBORNE OF ADDRESS 95 Richardson Street Albert Park

61 BUCKLEY ST. FOOTSCRAY 3011, CERT OF TITLE VOL,. 8224 FOL 243

63-67 BUCKLEY ST. FOOTSCRAY 3011, CERT OF TITLE VOL. 2805 FOLIO 988

VOL. 8592 FOLIO 907. VOL. 8195 FOLIO 152. VOL. 8355 FOLIO 746.

THE PROPERTY WILL BE DEVELOPED BY THE REGISTERED PROPRIETOR 63 BUCKLEY STREET PTY LTD ACN 099 836 361

* PLAN-PERMIT FOR MIN 26 UNITS WITHIN 18 MONTHS OF MONEY PAYED (sic)

* INTEREST PAYED (sic) BY PRE NEED SERVICES AUSTRALIA

* YOU WOULD RETAIN 12½% IF PERMIT WITHIN 18 MONTHS

MONEY REPAYED (sic) BACK WITH 25% NET RETURN $250,000

* COST OF ESTABLISHMENT FEES & CHARGES. + LEGAL FEES ASSOCIATED WITH CHARGE ETC.

Mr Osborne said that Mr Gangemi hand wrote all of the Thrifty note except for the date, Mr Osborne's address, the symbol and words "+ LEGAL FEES ASSOCIATED WITH CHARGE ETC." and the words, symbol and figures in the box at the end of the Thrifty note. For convenience, these are in bold type in the above quote. Mr Osborne said that he wrote these things, appearing in bold above, on the Thrifty note in the presence of Mr Gangemi immediately following the preparation of the document by Mr Gangemi.[25]

Mr Osborne dated the Thrifty note 4 March 2002, because that is the date he paid the replacement cheque for the second Osborne cheque.

40 His Honour rejected Gangemi's evidence on the Thrifty note for seven reasons.[26] His Honour noted[27] that the parties' evidence-in-chief proceeded by witness statements. Gangemi gave no evidence on his witness statement as to a vital component of the Thrifty note, referred to as the "starred items". His Honour regarded this factor as significant, finding:

In these circumstances, the failure of Mr Gangemi to include in his witness statement any evidence concerning the purpose of the Thrifty note, or the circumstances in which it was prepared, is significant. The only evidence of Mr Gangemi about the Thrifty note in his witness statement is as follows:

Not all of the handwriting on the document is mine and I did not sign or date the document. I believe that the document contains some notes taken by me during a conversation held between myself and Osborne. The document was amended at some later stage and dated by someone else. I do not know who made the amendments or who dated the document.[28]

The above evidence is silent as to the purpose for which Mr Gangemi now says that he wrote the Thrifty note. There is no mention of the "notes" being made so that Mr Osborne could "go to Lanciana and see if he will write you up something". Further, the witness statement is silent as to which parts of the Thrifty note were written by Mr Gangemi and which parts he alleges were someone else. It was put to Mr Gangemi in cross-examination that he was deliberately vague and brief in his witness statement concerning the Thrifty note, so that he could wait and see what Mr Osborne said in his witness statement before committing himself to a position in respect of these matters. Mr Gangemi did not accept that this was so. I reject his evidence in this regard. I find that the statements in Mr Gangemi's witness statement concerning the Thrifty note were deliberately brief and lacking in detail, in order to give Mr Gangemi an opportunity to see what Mr Osborne said in his witness statement, or in opening, before committing himself to a position.

41 In summary, his Honour accepted Osborne's description of the Thrifty note because of his rejection of Gangemi's evidence, the consistency of the Thrifty note with Osborne's version of events, the lack of rational alternative explanation as to the purpose of the conditions in the note, the consistency of the conditions with previously agreed terms, the document was not shown to Lanciana and, finally, that Gangemi did not remember writing the Thrifty note which was rejected.

42 At trial, the key issue was whether the $200,000 was paid on conditions. Osborne said it was. The Thrifty note supported that evidence. In submissions on the stay application it was put that the Thrifty note represented a written agreement when Osborne's case was not run that way at trial. On the materials and submissions on this application we could not be satisfied to the necessary degree as to the prospects of success of Gangemi on the appeal against Osborne.

43 The merits of appeal are important in the context of an individual facing bankruptcy or winding up if a stay is not granted pending the appeal. [29]

44 Whilst an appellate court will sometimes grant an interim stay in urgent circumstances, ultimately it still behoves an applicant before a stay is granted beyond the interim need to make out the merits of the appeal. A prospect of bankruptcy or winding up is not of itself sufficient as a general rule.

45 The main defence that Gangemi raised was there was no condition to the investment of Osborne, and that all Osborne was entitled to was a declaration of his 12.5% interest in the joint venture. Osborne's evidence was contrary to this, and the Thrifty note plainly states that Osborne invested $200,000 on a conditional basis, and that if the requisite planning permits were not obtained, Osborne would be entitled to $250,000. The Thrifty note was written by Gangemi and contradicts his own evidence. It appears clear that the appeal on this basis has low prospects for success.

46 The other matter submitted for Gangemi was that the payment of two cheques to Osborne to advance the $200,000 reveals the amount of $112,960 was received by Lanciana and, also, their date and deposit details support Gangemi's version of events. It was the case of Osborne that his arrangement with Gangemi occurred before the cheques were drawn and deposited.

47 The submission does not overcome the strength of the argument that the arrangement was one of advancement on conditions; that there was a document to support that, namely, the Thrifty note; and that Gangemi was not believed by the trial judge.

48 With respect to the second respondent, Gangemi alleged that he and Lanciana entered into a joint venture. Eventually there was a settlement conference between Gangemi and Lanciana resulting in a "Heads of Agreement". In this document Gangemi agreed to resign a directorship, transfer shares and trust units and to withdraw caveats over the Buckley Street properties.[30] Gangemi alleged his signatures to the relevant documents were obtained by duress and are void and unenforceable. As already observed, his Honour made significant findings as to credit and forgery. These matters were to be referred to the Attorney-General by the learned judge.[31]

49 At the trial, Gangemi claimed contribution or indemnity from Lanciana in respect of any judgments sum. This third party proceeding was dismissed.

50 Again, the learned judge made findings as to credit. Generally, his Honour found Lanciana to be "an impressive witness"[32] and observed that Gangemi gave "false evidence".[33] Importantly, given issues as to forgery were raised, the judge queried whether expert handwriting evidence would be called. It transpired that although Gangemi informed the court he would not call expert evidence, in evidence Gangemi admitted he had sought expert assistance by giving documents to an expert for examination. No application was made for Gangemi to re-open his case to call expert handwriting evidence. His Honour inferred in the circumstances that the expert document examiner engaged on behalf of Gangemi would not give evidence which would have assisted him in establishing his allegations of forgery.[34]

51 Reliance was placed in argument on State Bank of Victoria v Parry & ors[35] where the court held a successful judgment order should be stayed until the determination of third party proceedings. If the stay was not granted execution of the order would have led to bankruptcy. A partial stay of execution was granted due to 'special circumstances'. Citing Bingham LJ in Burnet v Francis Industries PLC[36] Malcolm CJ in Parry[37] noted seven factors to be considered in identifying 'special circumstances' where A sues B and obtains judgment. B is associated with C. C has an unresolved claim against A. B seeks a stay of execution of A's judgment to await the outcome of C's claim against A. The factors were: the nature of the primary successful party's (A) claim; the extent of the identity between the party seeking the stay (B) and the third party (C); the inter-relationship between A, B and C; the strength of C's claim; the size of C's claim relative to A's; the likely delay before the claim will be determined; and, finally, the risk of prejudice to C if B makes payment to A under the judgment.

52 Gangemi faces the same difficulties as he faced with respect to Osborne. Principally, there are serious findings as to credit that, on present submission and materials, an appellate court is unlikely to vary. This applicant, in all the circumstances, faces a difficult burden. Parry is largely distinguishable because there the third party proceeding awaited determination. Here the indemnity claim was dismissed and the order is not appealed.

53 However, even if this were not the case, applying the principles enunciated by Bingham LJ in Burnet special circumstances are not sufficiently made out. First, Osborne's claim was successful essentially on issues of credit supported by the Thrifty note and was a claim based on monies advanced on conditions; secondly, the identity or connection between Osborne and Lanciana was limited; thirdly, there was very limited inter-relationship between Gangemi, Osborne and Lanciana; fourthly, in light of the findings of the trial judge as to credit the strength of the Gangemi third party claim against Lanciana is extremely weak, if not hopeless; fifthly, the size of the claim is unhelpful in the overall scheme of things for present purposes; sixthly there will be some delay before the appeal is heard in the ordinary course; finally, the risk factor in the overall circumstances is different here because the applicant, Gangemi failed in all respects at trial.

54 Weighing all matters up and assessing all the submissions urged for Gangemi, We would refuse the stay with respect to Osborne and Lanciana because Gangemi has failed to make out sufficient prospects of success. Further, and significantly, he has not provided any satisfactory evidence as to assets or capacity to pay the debt the subject of the bankruptcy proceeding.

[1] Bloomingdale Holdings Pty Ltd v 63 Buckley Street Pty Ltd; Osborne v Gangemi [2008] VSC 168 ('Reasons').

[4] Affidavit of Daniel Isakow, sworn 25 August 2008, [9].

[6] Pursuant to Supreme Court Rules, rr 64.25 and 66.16.

[7] Cellante v G Kallis Industries Pty Ltd [1991] VicRp 99; [1991] 2 VR 653.

[8] McBride v Sandland (No 2) [1918] HCA 59; (1918) 25 CLR 369.

[9] [1991] VicRp 99; [1991] 2 VR 653.

[11] Maher v CBA [2008] VSCA 122.

[12] Osborne's outline of submissions, [12], [14].

[13] IOOF v Foxeden [2006] VSCA 202 (Maxwell P and Neave JA, in an application for a stay).

[14] [2002] NSWCA 383; (2002) 55 NSWLR 737.

[16] Exhibit marked "CLB-7" to the second Affidavit of Christopher Lindsay Bunnett filed 8 September 2008; also orders made by consent to that effect on 24 October 2008.

[17] [2004] VSCA 66; (2004) 9 VR 382.

[19] Exhibit marked "DI-6" to the affidavit of Daniel Isakow, sworn 25 August 2008.

[23] See Cross on Evidence, [3290]; Halsbury's Laws of Australia, [125-690].

[25] Osborne statement, [18] (footnote in original).

[28] Gangemi witness statement, [210] (footnote in original).

[29] See Orrong Strategies P/L & ors v Village Roadshow Ltd (Unreported, Court of Appeal, Supreme Court of Victoria, 23 November 2007) [10]; Chen v Chan (Unreported, Court of Appeal, Supreme Court of Victoria, 21 December 2007); Narain v Euroasia (Pacific) P/L (Unreported, Court of Appeal, Supreme Court of Victoria, 17 September 2008) [28].

[35] [1989] WAR 240.

[36] [1987] 1 WLR 802, 811.

[37] [1989] WAR 240, 246-250.