Glad Retail Cleaning Pty Ltd v Alvarenga

Judgment 1McCOLL JA: Two notices of motion for a stay of a judgment in favour of Ms Alvarenga, the first respondent, given by Judge Elkaim on 28 March 2013 are before the Court. 2In the proceedings before his Honour the first respondent sought to recover damages in respect of an injury she suffered when she slipped on a travelator at the Chester Square Shopping Centre on 25 July 2008. The second respondent to the appeal, Mirvac Real Estate Pty Ltd ("Mirvac") was the manager of the shopping centre. The appellant, Glad Retail Cleaning Pty Ltd ("Glad Retail"), provided cleaning services in the shopping centre. 3The brief circumstances of the accident as explained by Mr Priestley who appears for the appellant, and not in any relevant terms controverted by Mr Greenlaw who appears for the first respondent, were that a cleaner had mopped an area at the top of the travelator and had placed some sort of sign warning of his activities in its vicinity. The first respondent who worked in a supermarket in the shopping centre walked past the cleaner through the area he had cleaned and, it seems to be common ground, in doing so her shoes became wet. She then walked onto the moving travelator, slipped and was injured. There was a controversy at trial as to whether or not it was the wetness of the first respondent's shoes which caused her to slip. That controversy was resolved in the first respondent's favour and is not the subject of complaint in the extant notice of appeal. 4Both defendants to the proceedings before his Honour filed crossclaims seeking an adjustment of their relative contributions, if any, to the first respondent pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946. The judgment his Honour found for the first respondent against both defendants was in the amount of $453,650.91. As to that sum, he ordered Glad Retail to pay eighty percent and Mirvac to pay twenty percent. Mirvac paid its share of the judgment, $90,730.19, on 23 April 2013: Alvarenga v Mirvac Real Estate Pty Ltd. (District Court of New South Wales, Elkhaim DCJ, 28 March 2013, unreported). 5The only notice of appeal which has been filed so far is that filed on behalf of Glad Retail in which it raised numerous grounds of appeal including as to the content of its duty of care to the first respondent, an issue concerning a finding unfavourable to it as to whether or not it should have been obvious to the first respondent that in stepping in an area which was apparently obviously wet then walking on a travelator she should have appreciated that there was an obvious risk that she might slip in so doing; and also as to the steps his Honour concluded ought reasonably have been taken by the appellant to obviate the risk to the first respondent. 6On 29 April 2013 Glad Retail's solicitor, Mr Bell of McCabes Lawyers, sent an email to the first respondent's solicitor confirming that it was Glad Retail's intention to appeal and asking that solicitor to confirm whether the first respondent would consent to a stay of the remainder of the judgment. He received an email response very soon thereafter advising that the first respondent's solicitor had not sought instructions to consent to a stay without, at that stage, having received a copy of any proposed grounds of appeal. The email invited Glad Retail's solicitors to make an application to stay the remainder of the judgment and advise the Court of the terms of the application. The email also advised that as more than twenty-eight days had elapsed since the judgment was entered, the funds were currently considered to be due and payable. 7Glad Retail filed a notice of intention to appeal on 24 April 2013. It filed the notice of appeal on 27 June 2013. 8On 29 July 2013 the first respondent's solicitors wrote to Mirvac's solicitors referring to the fact that Mirvac had paid twenty percent of the judgment sum and advising that those solicitors awaited the balance together with interest to be paid forthwith. The letter also warned that in the event the remaining eighty percent of the judgment and interest was not received within the next ten days, those solicitors would seek instructions to execute the judgment. Mirvac's solicitors forwarded a copy of that letter to Glad Retail's solicitors together with a copy of their response. Mirvac's solicitors' letter urged Glad Retail's solicitors to take steps to apply for a stay in respect of its proportion of the judgment monies or arrange for payment of those outstanding judgment monies inclusive of interest. 9On 1 August Mr Bell wrote to the first respondent's solicitors again, asking for confirmation as a matter of urgency as to whether the first respondent consented to the stay, pending the outcome of Glad Retail's appeal, of its liability for the judgment sum. On 5 August the first respondent's solicitors advised that the question of an order for a stay being required was irrelevant as against Glad Retail as the first respondent was seeking payment of the balance of the judgment plus interest from Mirvac. The letter advised that in the event the first respondent's solicitors' instructions changed, they would advise of their client's position. 10According to a property search Mr Bell caused to be carried out in respect of the first respondent, she is the owner as joint tenant of a property at Holsworthy which at the time of the search - 21 August 2013 - was the subject of a charge to the Defence Housing Authority and a mortgage to St George Bank Limited. 11At the hearing before Judge Elkaim, according to Mr Bell's affidavit, the first respondent gave evidence that she had not worked since March 2011, had four dependents and that, as at August 2012, she and her family were forced to move house due to their financial circumstances. 12According to the first respondent's affidavit of 22 August 2013 she and her husband purchased the Holsworthy property about twelve years ago for $280,000 and, since its purchase, demolished the house which was on the land and replaced it with what, as described, appears to be a substantial dwelling constructed for about $300,000. She says that the mortgages, which I assume are those disclosed on the title search and a portfolio loan secured on the house, total about $400,000. 13As I have said the first respondent has not worked since March 2011. After her injury she received workers compensation which has continued to date. However, as the first respondent says, meeting all the family's expenses including the mortgage has been difficult, although possible. The first respondent's husband was out of work in 2012 and the family was unable to service the mortgage. Accordingly the family of five, being the first respondent, her husband and their three children, moved to share the first respondent's mother's Housing Commission flat in Waterloo. They let the Holsworthy property. The rent covered the mortgage, but not utilities, although that position has been alleviated to some extent by falling interest rates. 14It is clear that the circumstances of occupation of the Housing Commission dwelling are exiguous, cramped and confronting for a family of six people. In addition the move to Waterloo has led to the children having to change their after school activities. The first respondent's husband's income continues to be sporadic. When he is working, he can earn up to $1,500 a week, but there have also been periods of unemployment. 15As a result of the District Court judgment the first respondent is liable to repay the workers compensation she has received of about $150,000. Of the sum Mirvac paid, the first respondent's solicitors have advanced her $15,000 to assist to pay off mortgage arrears to keep the bank at bay. The firm has retained the balance to cover legal costs. The first respondent says she has not given instructions to her solicitors to seek payment of any monies from the appellant and does not propose to do so because, if the appeal is successful, she will have to repay the money with interest. I infer from that that she does not regard herself as in the position to meet any such obligation should it arise. 16However, because the second respondent has not appealed, the first respondent instructed her solicitors to take out judgment against it and enforce it as "the monies will not be paid otherwise". If she receives the balance of the judgment from Mirvac, the first respondent deposes that she expects to reduce the entire first mortgage and part of her second mortgage by $200,000. This would enable the second mortgage to be renegotiated to a lower interest rate, would ease the pressure caused by mortgage repayments and keep a lump sum available in case her husband's sporadic work situation continues. All of that would enable the family to return to live at the Holsworthy property. 17Mr W S Reynolds, who appears for Mirvac, has foreshadowed that Mirvac will advance today an application for leave to file an appeal out of time from the judgment. That appeal, he indicated, would be of a defensive nature. It appears that after some months Mirvac has appreciated the possibility that, if Glad Retail's appeal succeeds, Mirvac may bear the burden of the entire verdict. Mr de Greenlaw opposed that application being advanced at this stage on the basis that the first he knew of it was outside court this morning and that he had not come to court to meet such an application. 18Mr de Greenlaw submits that both motions should be dismissed. As he rightly points out, as the appellant and the second respondent were found liable as joint tortfeasors, the first respondent is entitled to seek recovery of the judgment from either. He says that as the second respondent has not appealed, it is liable to meet the entirety of the judgment and, absent a notice of appeal, has no basis on which it can apply for a stay. 19Mr de Greenlaw further submits that the appellant's application for a stay is irrelevant, because the first respondent is not seeking to enforce the judgment against it, and, indeed, if Mirvac fulfilled the obligation to which it is presently subject and paid the balance of the judgment, there would be nothing to stay as the first respondent would not be entitled to seek recovery of any further monies from Glad Retail. 20Mr de Greenlaw argues that it is reasonable to conclude that the value of the Holsworthy property exceeds the judgment sum having regard to the fact that the home is apparently substantial, having regard to the evidence the first respondent gives both as to its construction and the initial outlay for its purchase, such that it cannot be concluded that any monies paid by the appellant or the second respondent could not be recovered if the appeal was successful. 21Mr de Greenlaw also submits, in short, that there are no arguable grounds for appeal, there is not a significant risk that if the appeal is successful paying over the judgment sum will render it nugatory, nor that there is a proper basis for a stay that will be fair to all parties. 22In my view there is a possibility that if a stay is not granted, the judgment will be at risk if it is paid over. I take into account Mr de Greenlaw's submissions as to the value of the property, nevertheless the reality is that on the evidence the first respondent's financial position is exiguous: there are pressing demands on her. She herself says that in the event the balance of the judgment sum was paid over, she would immediately dissipate it to the extent of $350,000. 23I appreciate as Mr de Greenlaw says that such payment would, in part, increase the equity in the Holsworthy property, nevertheless the reality is the first respondent is clearly burdened by heavy financial commitments which have already had an extreme effect to the extent of the family having to move from the Holsworthy property and rent it and where, even with continuing workers compensation, meeting all the family's expenses has been extremely difficult. 24Mr Reynolds submits that the Court has jurisdiction to consider Mirvac's application for a stay notwithstanding that it has not yet filed a notice of appeal by virtue of the operation of s 67 of the Civil Procedure Act 2005 (the general provision empowering the Court, subject to the rules, to stay any proceedings) and Uniform Civil Procedure Rules ("UCPR") Part 51 rule 44. The effect of the latter rule is that, subject to the filing of a relevant originating process, the Court may order that the decision below or the proceedings under the decision be stayed. It was, I infer, by reference to the opening clause of that rule, namely the requirement that there be a relevant originating process, that Mr Reynolds foreshadowed an appeal by the filing of an application for leave to appeal out of time by Mirvac. 25The Court generally does not speculate about an appellant's prospects of success when considering an application for a stay. Nevertheless it does have regard, in considering whether there is an appropriate case for a stay, to whether or not the appeal has merit, bearing in mind that weight must be given to the fact that there is a judgment in favour of the other party: Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 (at 695). 26In this respect Glad Retail drew attention, in particular, to the grounds in relation to the primary judge's finding as to obvious risk and the precautions his Honour said the cleaner should have taken to prevent the first respondent walking on the travelator. In my view those grounds have some prospects of success. Mr Reynolds said that any notice of appeal Mirvac would seek to rely upon would in essence raise the same grounds insofar as they applied to Mirvac's position below. 27This is a case where the dictates of justice to which the Court must have regard pursuant to s 58 the Civil Procedure Act require that there should be a stay on terms which I will shortly make clear. 28Early in the peace the first respondent's solicitors, as I have said, advised the appellant that it should apply for a stay of the judgment. It seems at some later stage it occurred to those advising the first respondent that, absent any challenge to the judgment by Mirvac, she should seek to recover the entirety of the judgment from that company. 29I am concerned that the UCPR 51.44 power is contingent on the filing of a notice of appeal and any order I make in relation to Mirvac's notice of motion will be contingent upon it making an application to file such a notice of appeal within the time directed. 30I take into account that the first respondent says that, at present, she does not seek to enforce the judgment against the appellant. Mr de Greenlaw says, as I understand the submission, in effect that both the second respondent, Mirvac, and the appellant are, in effect, insurance companies so that there should be, I infer, no difficulty as between them as to reimbursement should ultimately either of their respective liabilities, or, in particular, Mirvac's liability for the judgment sum, be overtaken by the outcome of an appeal. 31The reality is, however, that at some stage should, for example, Mirvac have to pay the balance of the judgment to the first respondent, and should the appellant succeed in the appeal to an extent for example, that results in the first respondent losing the benefit of the judgment entirely, then restitution will have to be sought from her: see generally TCN Channel 9 Pty Ltd v Antoniadis (No 2) [1999] NSWCA 104; (1999) 48 NSWLR 381. It appears to me that there is a risk she will not be able to respond in a way which would ensure that whoever pays the money and/or whoever has to ultimately seek restitution will not be prejudiced. 32In my view it is necessary in the interests of justice to make an order for a stay. I make the following orders: (1) On Glad Retail's notice of motion of 12 August 2013 order pursuant to UCPR 51.44 that Judge Elkaim's judgment of 28 March 2013 be stayed until the determination of the applicant's appeal. (2) In relation to Mirvac's notice of motion of 22 August 2013, order pursuant to UCPR 51.44 that Judge Elkaim's judgment of 28 March 2013 be stayed up to and including 5pm on 2 September 2013. (3) Mirvac to file and serve by noon on 28 August 2013 a motion seeking an extension of time to file a notice of appeal accompanied by an affidavit in support of the application and a draft notice of appeal, such notice of motion to be returnable before the Registrar on 2 September 2013. (4) Costs of both motions to be costs in the appeal.