Higgins v Pretorius

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title: Higgins v Pretorius (No 4) Citation: [2025] ACTSC 399 Hearing Date: 28 August 2025 Decision Date: 5 September 2025 Before: Muller AJ Decision: (1) Further to the orders of the Court made on 12 June 2025, the stay on the operation of the judgment entered on 7 April 2025 is removed. (2) The defendant is to pay the plaintiff’s costs of the application. Catchwords: JURISDICTION, PRACTICE AND PROCEDURE – STAY ORDERS – Application to set aside stay of judgment – stay instituted pending defendant’s appeal and for defendant to obtain financial advice – where defendant in loan agreement with husband at time stay instituted – defendant continued to draw down loan after stay imposed – court unaware of loan at time of stay – defendant has not obtained financial advice – defendant applied for bankruptcy – circumstances under which stay imposed substantially changed – stay order removed JURISDICTION, PRACTICE AND PROCEDURE – FREEZING ORDERS – Application to restrain defendant’s husband from taking certain actions – freezing order unnecessary where stay removed – no freezing order made Legislation Cited: Bankruptcy Act 1966 (Cth), ss 27, 60 Court Procedures Rules 2006 (ACT), r 5301 Cases Cited: Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685 at 694 Dreamtime Supply Company Pty Ltd v Steadfast ICT Security [2021] ACTCA 31 Higgins v Pretorius (No 2) [2025] ACTSC 242 Parties: Judith Frances Higgins (Plaintiff) Annemie Pretorius (Defendant) Representation: Counsel PA Tierney (Plaintiff) A Opas (Defendant) Solicitors AC Lawyers (Plaintiff) Moray & Agnew (Defendant) File Number: SC 420 of 2023 MULLER AJ: Introduction

1. This conflict between neighbours returns to the Court in extraordinary circumstances. On 15 March 2022, a discussion between the plaintiff and the defendant on the nature strip abutting their adjoining properties suddenly escalated. The defendant struck the plaintiff on the side of her head with a rubber mallet. The plaintiff was hospitalised as a result of her injuries and now requires ongoing treatment.

2. The defendant subsequently pleaded guilty to a charge of assault occasioning actual bodily harm. She was sentenced to a period of six months’ imprisonment, which was fully suspended. She was also subject to a 12-month good behaviour order.

3. The plaintiff commenced this proceeding against the defendant for an intentional tort in the form of battery. The defendant admitted liability for the assault and the matter proceeded as an assessment of damages before Ainslie-Wallace AJ over 14 to 16 October 2024. On 28 February 2025, her Honour entered judgment in favour of the plaintiff; following the assessment of damages, the plaintiff was awarded the sum of $1,090,003.04 on 7 April 2025.

4. The defendant filed a notice of appeal from her Honour’s decision assessing damages on 4 April 2025. The parties understand the appeal is likely to be listed for hearing in November 2025.

5. The defendant subsequently filed an application to stay the operation of the judgment for damages pending resolution of the appeal. That application proceeded before Ainslie- Wallace AJ on 16 May 2025, and a decision was delivered on 12 June 2025, with her Honour making orders for a stay in the following terms: (1) Pending further order of the Court of Appeal: (a) Stay the operation of the judgment entered on 7 April 2025 on condition that the Applicant forthwith give a charge over all her right, title and interest in the land and improvements situated at 1 Peken Place Nicholls in the Australian Capital Territory, being Section 123 on Block 33 on Deposited Plan 9663 and being Volume 1601 Folio 39 ("Peken Place") in favour of the Respondent in the sum of $1,090,003.04. (b) The Applicant, at the request of the Respondent, is to sign all documents and do all things necessary to allow the registration of a caveat over Peken Place to support the charge over Peken Place for the Judgment sum. (c) The Applicant is not to take any action to transfer, deal with, or further encumber her interest in Peken Place. (d) The Respondent will withdraw the caveat once the judgment debt is settled or discharged. (e) The Respondent consents to the registration of a mortgage or financial instrument over the property where such mortgage or financial instrument is being lodged for the purpose of paying the debt to the Respondent. (2) The Applicant must actively pursue and prosecute her appeal to the Court of Appeal. (3) Liberty to either party to restore the matter to the list on the giving of 3 days' notice. (4) The Applicant is to pay the costs of and incidental to this application. Payment of those costs is deferred pending the completion of the appeal proceedings.

6. The application that is now before the Court is made by the plaintiff, who seeks to set aside the stay orders previously entered by Ainslie-Wallace AJ, on the basis that the circumstances underpinning her Honour’s decision have changed substantially. In short, it is alleged that the defendant has acted contrary to, and in disregard of, the orders previously made in her dealing with the property over which the plaintiff has been given a caveatable interest. It is also alleged that the defendant failed to previously disclose important information concerning a loan agreement that was in place between the defendant and her husband in respect of the subject property asset at the time of the stay application hearing before her Honour.

7. For the reasons given below, I consider it appropriate to amend the orders previously made.

Guiding principles

8. Rule 5301 of the Court Procedures Rules 2006 (ACT) applies to the making, amending or setting aside of a stay order: 5301 Appeals to Court of Appeal—stay and reinstatement (1) An appeal to the Court of Appeal in a civil proceeding does not operate as a stay of the order appealed from unless— (a) a territory law provides otherwise; or Note A territory law includes these rules (see Legislation Act, s 98). (b) the Court of Appeal or the court otherwise orders. Note 1 Pt 6.2 (Applications in proceedings) applies to an application for a stay or for an order under this rule. Note 2 An appeal to the Court of Appeal in a criminal proceeding does not operate as a stay of the conviction appealed from. (2) In an urgent case, an application to the Court of Appeal or the court for a stay may be made without serving it on anyone. (3) If the application to the Court of Appeal or the court for a stay is made without serving it on anyone, the application must be accompanied by an affidavit setting out the grounds relied on in support of the claim of urgency. (4) If the order appealed from is stayed by the Court of Appeal or the court, the Court of Appeal or the court may make any order that it considers necessary or desirable to give effect to the stay. (5) The Court of Appeal may, by order, amend or set aside an order made by the court or it under this rule. (6) The court may, by order, amend or set aside an order made by it under this rule. (7) An application for an order of the Court of Appeal for a stay may be made whether or not a similar application has been made to the court. (8) If any step has been taken for the enforcement of an order and the Court of Appeal amends or sets aside the order on appeal under this part, the Court of Appeal may make the orders for reinstatement it considers appropriate.

9. The lodgement of an appeal from a decision in a civil proceeding does not operate as a stay without further order of the court. Where an order for a stay is made under this rule, the court may, in accordance with r 5301(6), by order amend or set aside the stay order made previously.

10. The decision whether or not to grant a stay and the imposition of any conditions that may attach to such an order is an exercise of discretion: Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685 at 694; Dreamtime Supply Company Pty Ltd v Steadfast ICT Security [2021] ACTCA 31 at [8]. Ainslie-Wallace AJ summarised the principles applying to consideration of a stay application in Higgins v Pretorius (No 2) [2025] ACTSC 242, commencing at [15]. There is no utility in repeating those principles here.

Factors influencing the previous decision to order a stay

11. Ainslie-Wallace AJ accepted that there was at least an arguable issue to develop in the Court of Appeal. Her Honour went on to consider whether there was a real risk that the defendant would suffer prejudice or damage if a stay was not granted. The factors relevant to her Honour’s consideration of that issue were: (a) Whether there was a risk that any monies paid would not be recovered in the event of a successful appeal; and (b) Whether payment of the judgment sum, or any part of it, would impede the defendant’s ability to fund the costs of her appeal or to meet normal living expenses.

12. In relation to the first of those considerations, her Honour was not satisfied that there was any evidence to the effect that the plaintiff would be without means to repay any judgment sum paid. As to the second consideration, her Honour expressed some difficulty in reaching a view because of the paucity of evidence before her concerning the defendant’s financial position and financial options for satisfaction of the judgment.

13. Ultimately her Honour accepted that there was a risk of some prejudice to the defendant if a stay was not awarded, in that avenues for payment of the verdict sum which fell short of liquidating assets might be denied to her. Her Honour was clearly influenced by the evidence of the defendant at the hearing of the stay application that she had not yet sought financial advice as to her payment options. It may be inferred from Ainslie- Wallace AJ’s decision that her Honour considered it was appropriate, as part of the balancing exercise, to afford the defendant an opportunity to explore those payment options with the benefit of a stay.

Subsequent events

14. The application now before the Court was initiated when the plaintiff became aware that the defendant had, in the period between the stay hearing and hand down of decision, entered into a new mortgage over the residential property she owns jointly with her husband. The evidence demonstrates that a new loan was approved on 21 May 2025, and a new mortgage registered on 10 June 2025, two days prior to delivery of the stay decision. No attempt was made in the intervening period to bring the new mortgage arrangement to the attention of the court.

The July 31 affidavit

15. In anticipation of the filing of this application, the defendant filed a further affidavit sworn on 31 July 2025. In that affidavit, she attested to the following important matters: (a) On 9 May 2023, following the assault which is the subject of these proceedings, she entered into a loan agreement with her husband to assist her in funding her substantial legal and medical expenses. (b) She had forgotten about the loan agreement at the time of swearing her earlier affidavit, that was before her Honour at the time of the previous stay hearing; (c) Pursuant to the loan agreement, she has from time to time borrowed money from her husband to assist with funding her expenses. (d) The total sum borrowed to the time of swearing the affidavit was $144,000, but each drawdown was subject to interest set at a rate of 6%, compounding monthly. The defendant made no attempt to assess the sum outstanding, including interest. Noting that an initial drawdown was made in May 2023 in the sum of $20,000, that advance alone would create an outstanding debt of approximately $100,000 as of today. (e) The defendant continued to draw down on the loan to fund expenses after the orders were made by Ainslie-Wallace AJ on 12 June 2025. If the loan agreement is effective, then the impact of those drawdowns is to further encumber the defendant’s interest in the subject property.

The 29 August affidavit

16. The application proceeded to hearing before me on 28 August 2025. After receiving submissions from both parties, I made orders allowing the filing and service of any further affidavit evidence to be relied upon by the defendant by 29 August 2025. A further affidavit of the defendant was duly sworn on 29 August 2025. The defendant attested, inter alia, to the following additional matters: (a) That the new mortgage entered into after the initial stay hearing occurred in circumstances where the defendant became aware that her own claim against the plaintiff was likely to be stopped and she would therefore be responsible for funding her own medical expenses, including proposed surgical expenses. As a consequence, she and her husband sought to refinance their existing loan with Macquarie Bank. (b) The impact of the refinancing arrangement was not to substantially alter the overall debt position with the bank, and the effect of the change to date was an increase in the outstanding debt of approximately $10,000. (c) The defendant failed to appreciate that in continuing to draw down pursuant to the loan agreement with her husband she was in breach of Order 1(c) made previously by Ainslie-Wallace AJ. In the circumstances, she gave an undertaking: I undertake to the Court that, unless released by the Court from this undertaking: (a) I will not borrow any further money from my husband pursuant to the Agreement; (b) I will not seek to draw upon the redraw facility under the New Mortgage; and (c) I will not act in any other way that will further encumber or reduce my interests in the Property. (d) The defendant has now received financial advice, including in relation to her ability to pay the judgment in favour of the plaintiff. She declined to waive privilege over that advice. (e) The defendant disclosed that on 28 August 2025, a firm of accountants had submitted on her behalf to the Australian Financial Security Authority, a debtor’s petition, a statement of affairs, and a consent to act as trustee in bankruptcy. She anticipated being declared bankrupt on 29 August or 1 September 2025. (f) The defendant understands that once a trustee in bankruptcy is formally appointed, they will be responsible for dealing with her expenses and how her expenses are paid. (g) The defendant indicated that she had not informed her lawyers that she was contemplating making an application for bankruptcy until 29 August 2025.

The impact of the subsequent events on the stay orders

17. The initial granting of a stay occurred in circumstances where the trial judge was satisfied that there was at least a substantive risk of prejudice to the defendant in the management of her financial affairs, if a stay was not granted. More particularly, her Honour appeared concerned that the options for payment of the judgment sum, other than the option of the defendant liquidating her primary asset in the form of her home, might be impeded if the defendant was not afforded the opportunity to secure financial advice whilst the stay was in place.

18. However, the balancing exercise undertaken by her Honour was performed in circumstances where: (a) Her Honour was not made aware of the loan arrangement with the defendant's husband that, at least on its face, has the capacity to further erode the defendant’s equitable interest in the subject property; and (b) The defendant had not yet received financial advice concerning her options for payment of the judgment sum.

19. The circumstances have now fundamentally changed. Without drawing any conclusions concerning the efficacy of the loan agreement, there is at least the potential for it to progressively reduce the value of the defendant’s equitable interest in the only substantial asset that has been identified against which the plaintiff might have an opportunity to recover in satisfaction of the judgment debt. Further, the defendant has now received financial advice, the terms of which she declines to disclose, and as a consequence of that advice or otherwise she has elected to proceed by way of an application for bankruptcy. The effect of that application and the declaration of the defendant as a bankrupt will be that a trustee is appointed to manage her affairs, and the trustee will be called upon to make financial decisions on the defendant's behalf. The defendant has thus voluntarily forfeited the right to explore options for the management of her financial affairs with a view to meeting the judgment debt. It is also the case that the appeal proceedings will now be stayed by virtue of the operation of s 60 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and it will be a matter for the trustee to determine whether the proceedings should continue. Following a declaration of bankruptcy, s 58 of the Bankruptcy Act will also regulate the actions available to the plaintiff in seeking to recover the judgment debt.

20. Section 60 is in the following terms: 60 Stay of legal proceedings (1) The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit: (a) discharge an order made, whether before or after the commencement of this subsection, against the person or property of the debtor under any law relating to the imprisonment of fraudulent debtors and, in a case where the debtor is imprisoned or otherwise held in custody under such a law, discharge the debtor out of custody; or (b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor: (i) in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt; or (ii) in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt; and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non‑payment of a provable debt or of a pecuniary penalty referred to in subparagraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in subparagraph (ii), discharge the debtor out of custody. (2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action. (3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action. (4) Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of: (a) any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or (b) the death of his or her spouse or de facto partner or of a member of his or her family. Note: See also subsection 5(6). (4A) Notwithstanding paragraph (1)(b), this section does not empower the Court to stay any proceedings under a proceeds of crime law. (5) In this section, action means any civil proceeding, whether at law or in equity.

Freezing orders

23. The plaintiff also sought freezing orders to restrain the defendant’s husband from taking steps to enforce any right under the loan agreement dated 9 May 2023 or taking any action to transfer, encumber or deal with his interest as joint tenant in 1 Peken Place. The plaintiff proposed that the freezing orders should then be stood over by this Court for three months, to allow the plaintiff to make further enquiries into causes of action available against the making of the loan agreement.

24. In submissions, counsel for the plaintiff submitted the freezing orders were required because the defendant’s husband, through the loan agreement, now held a power of disposition over the defendant’s equity in 1 Peken Place by way of charge, and was also in a position of control or influence over the assets of the defendant. In counsel’s submission, there was a danger of the order for judgment going completely or partly unsatisfied as a result of the husband’s actions, and several avenues of good arguable cause of action available to the plaintiff.

25. Counsel for the defendant in reply submitted that this was a matter where the defendant’s husband should be a given an opportunity to be heard with respect to the freezing orders. In any event, counsel submitted that the terms of the loan agreement did not allow for the husband to enforce any right, absent taking steps to sell or transfer 1 Peken Place, which would require the involvement of the defendant as joint tenant. Counsel also noted that the husband was currently precluded from taking steps to deal with his interest in 1 Peken Place by the joint tenancy, and that the property was currently subject to a caveat which would prevent severance of the joint tenancy.

26. In circumstances where the stay will be removed and the trustee in bankruptcy will now be responsible for the management of the defendant’s financial affairs, including her interest in the subject property as a joint tenant, there is in my view no utility in contemplating any additional orders by way of freezing orders.

27. As the plaintiff has been successful in her primary application it is appropriate that she should be awarded costs.

Effect of defendant’s bankruptcy

28. On 4 September 2025, the Court received a letter from the defendant’s firm of accountants advising that two accountants of the firm had been appointed trustees in bankruptcy of the defendant’s estate.

29. The effects of the defendant’s bankruptcy are that: (a) Pursuant to s 58(3) of the Bankruptcy Act, the plaintiff cannot commence fresh proceedings, take new steps in existing proceedings or enforce any remedy against the defendant or her property in respect of the judgment debt without leave of the High Court, the Federal Court or the Federal Circuit and Family Court of Australia; and (b) Pursuant to s 60 of the Bankruptcy Act, the defendant’s appeal to the Court of Appeal becomes stayed until the trustees of the defendant’s estate make an election, in writing, to prosecute or discontinue the action.

Orders

30. The orders that I make are as follows: (1) Further to the orders of the Court made on 12 June 2025, the stay on the operation of the judgment entered on 7 April 2025 is removed. (2) The defendant is to pay the plaintiff’s costs of the application.

I certify that the preceding thirty [30] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Muller. Associate: Date: