JR Consulting & Drafting Pty Ltd & Anor v Cummings & Ors

The stay application in respect of the disclosure orders

1. As I noted above, JRC and HSFS seek, first, an order that paragraphs 8-19 of the December Orders be stayed pending the hearing of their appeal to the Full Court of the Federal Court. The issues before me were somewhat narrowed in the course of the hearing, since the Defendants, sensibly, did not oppose the stay application so far as it related to the orders for delivery up, their election between compensation and an account of profits, and the mediation. The matter which remained in issue between the parties is whether the disclosure orders, which provided for the relevant disclosure to be given by 6 March 2015, should now be stayed pending the determination of the appeal.
2. Ms Catanzariti, who appears for the Plaintiffs, noted that the stay was sought pursuant to the Court's inherent power, as a necessary adjunct to the effective exercise of its jurisdiction, since r 51.44 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") did not apply where the appeal was not brought in the Court of Appeal of the Supreme Court of New South Wales. There is, of course, no doubt that the Court has such power to grant such a stay in an appropriate case and the Defendants did not contend to the contrary. Ms Catanzariti also referred to well-established principles as to the circumstances in which a stay would be granted. She referred to the observations of the Court of Appeal in Kalifair Pty Ltd v Digi-Tech (Aust) Ltd; McLean Tecnic Pty Ltd v Digi-Tech (Aust) Ltd [2002] NSWCA 383; 55 NSWLR 737 at [18] where the Court observed that: "… the relevant principles are analogous to those which govern the grant of interlocutory relief before trial to protect the status quo. The appellant must show that the appeal raises serious issues for the determination of the appellate court, and that there is a real risk that he will suffer prejudice or damage, if a stay is not granted, which will not be redressed by a successful appeal. This requirement will be satisfied if the appeal will be rendered abortive or nugatory unless a stay is granted. If these pre-conditions are established the Court will then consider the balance of convenience."
3. In Aquaqueen International Pty Ltd v Titan National Pty Ltd [2015] NSWCA 9 at [42]-[46], to which Ms Catanzariti also referred, McColl JA observed that: "First, there is no automatic right to a stay of execution as, prima facie, the judgment appealed from is correct and the court should not deprive a party of the fruits of victory: Network Ten Pty Ltd v Rowe [2006] NSWCA 4. … Thirdly, the overriding principle to apply when determining an application for a stay is to ask what the interests of justice require: NSW Bar Association v Stevens [2003] NSWCA 95 (at [83]) per Spigelman CJ. Fourthly, 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 an appropriate case to warrant the exercise of discretion in his favour: Alexander [v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685] (at 694). The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties: Alexander (at 694). Before a stay of a judgment pending appeal is granted it is necessary for the court to make a preliminary assessment about whether the appellant has an arguable case: Alexander (at 695). The applicant must show that there are serious questions for the determination of the appellate court: Kalifair Pty Ltd v Digi-Tech (Aust) Ltd [above] …"
4. Ms Catanzariti submitted that there were two threshold issues in the stay application, namely whether there were serious issues raised by the appeal and whether there was a risk of prejudice or damage. As to the first of those issues, Ms Catanzariti submitted that the appeal raised serious issues for the determination of the appellate Court. Ms Goddard, who appeared with Ms Ross for the Defendants, did not contend to the contrary. It seems to me that the Plaintiffs' submission and the Defendants' concession in that regard were well-founded. The proceedings before me involved, inter alia, complex issues of contractual construction and as to the existence of copyright in software programs and the complexity of those issues supports the proposition that the Plaintiffs have an arguable case on appeal. The Plaintiffs also point out, and I accept, that their appeal is structured by reference to several distinct points arising from the judgment, in respect of issues that were subject of detailed submissions before me and detailed analysis in my judgment as to liability. The Plaintiffs also point to the fact that the Defendants have cross-appealed although, as matters have developed, that cross-appeal is not relevant, at least to the disclosure orders that remain in issue, because it would have no impact on their scope. I am satisfied that the appeal raises serious issues for the determination of the appellate Court.
5. The Plaintiffs formulate the second issue as whether there is a risk of prejudice or damage to them if a stay is not granted, although the authorities to which they refer identify a wider question of whether the grant of a stay is in the interests of justice.
6. The Plaintiffs rely, in support of the stay application, on an affidavit of Mr Michael Simone, their solicitor, dated 24 March 2015. Mr Simone sets out the history of service of the Notice of Intention to Appeal in this Court and the application for leave to extend the time to appeal in the Full Federal Court. He refers to undertakings that had been given by the Plaintiffs in the proceedings before me, including an undertaking by SFSI that it would not licence or seek to licence any person to use software known as or derivative of Quik Series Software ("QSS"), and noted that he was instructed that SFSI would continue that undertaking, notwithstanding a stay of the orders. (I interpolate that, in any event, SFSI is bound by that undertaking unless and until it is released from it.) Mr Simone also notes that the Plaintiffs do not seek a stay of the orders restraining them from exercising copyright in QSS except as permitted by the Court's orders, or using or disclosing a licence key generator that was in issue in the proceedings except as permitted by the Court's orders. Mr Simone also addressed several aspects of the disclosure orders, to which I will refer below together with the submissions made by the respective parties in respect of those issues.

The extent and expense of disclosure

1. Mr Simone's evidence, although it takes the form of a bare assertion, is that the disclosure required by the December Orders would be extensive and expensive since it covered a period of 7 years. His evidence is that he is informed - possibly by the principal of the Plaintiffs, Mr Pacione, although he does not say so - that the Plaintiffs and their accountant would require between two and four weeks to review and prepare a report for the companies involved for the period of disclosure and he estimated that between six and eight hours of his time would be required to review the report, and he would also need to involve Counsel to settle the report.
2. Several things should be noted about this evidence. First, Mr Simone does not address what steps, if any, have been taken by the Plaintiffs to comply with the disclosure orders in the four months since those orders were made or prior to the date by which compliance was required, 6 March 2015. Second, Mr Simone does not explain the basis of his view that the required disclosure would be extensive, which would plainly depend both upon the number of transactions involved and upon the extent to which relevant information had already been produced pursuant to discovery orders previously made by White J in the proceedings, although I recognise that, as Ms Catanzariti points out, the disclosure orders will at least require some further information to be provided by affidavit and potentially some further documents to be disclosed. Third, if Mr Simone's evidence on information and belief as to the time involved is correct, notwithstanding the absence of any elaboration of its basis, that time could scarcely be described as "extensive" having regard to the scale of these proceedings. Fourth, assuming the correctness of Mr Simone's evidence as to the time involved, the disclosure orders could readily have been complied with within the time previously permitted by the Court for such compliance or at least within the four months that have in fact elapsed since the December Orders were made.
3. Ms Catanzariti in turn submits that the disclosure orders are extensive and that: "the cost of the discovery in time, money and diverted internal resources will be expensive because the discovery is so comprehensive". It seems to me that that submission finds little support in Mr Simone's evidence, absent identification of any steps taken by the Plaintiffs to assess the extent of disclosure which will be required, or to consider the extent to which documents falling within the scope of that disclosure have already been produced under the discovery orders previously made by White J. Ms Goddard in turn points out that the discovery orders made by White J had already extended to licence agreements and other authorities entered into by the Plaintiffs, SFSI or Mr Pacione between 2004 and 2011 authorising other persons to use QSS and any other documents specifying the names or number of persons within any organisation so authorised by the Plaintiffs, SFSI or Mr Pacione to use QSS and that the discovered documents had been tendered at the liability hearing (Confidential Ex D4). Ms Goddard also points out, and I accept, that the disclosure, at least so far as it requires production of documents, would primarily relate to matters which have occurred since August 2011, the date to which the discovery was required under the orders made by White J.
4. Ms Catanzariti submits, in reply, that the disclosure ordered in the December orders is not co-extensive with the discovery previously ordered by White J, so far as the disclosure extends to commercial analysis of price, costs and profits. I accept that proposition, so far as it goes, but it does not go to any specific analysis, by way of evidence, of the content of that analysis or the time which would be required to undertake it.

The Plaintiffs' circumstances

1. Mr Simone draws attention to the fact that he is a sole practitioner and the Plaintiffs are small family-run companies. I give some weight to that matter, although I note that the evidence at first instance was that the Plaintiffs conducted an international business and Mr Simone and the Plaintiffs also had the capacity to commence and conduct substantial litigation.

The risk of further disputes

1. Mr Simone also identifies a risk that there could be interlocutory motions relating to the sufficiency of disclosure given by the Plaintiffs and Ms Catanzariti emphasised that risk in submissions. Ms Catanzariti similarly submits that there is a real risk that there could be interlocutory motions relating to the sufficiency of disclosure. I give little weight to this risk, because a decision not to stay disclosure orders made in December 2014, which were to be complied with prior to 6 March 2014, does not require the Court now to entertain, rather than defer, substantive disputes as to the adequacy of disclosure made after the commencement of the appeal. Whether the Court should do so is a matter that it can determine in the relevant circumstances, including the status of the appeal as it stands at the point of any such application, and whether the Plaintiffs have by that point taken genuine steps to comply with the disclosure orders.

Diversion of Plaintiffs' resources

1. Mr Simone also gives evidence of a concern that the Plaintiffs would be prejudiced in properly preparing for the appeal if they were also taking steps to comply with the disclosure orders. Ms Catanzariti in turn submits that the Plaintiffs will suffer prejudice and damage arising from being involved in activities that divert resources from the proper preparation and prosecution of their appeal. This submission implicitly assumes that the Plaintiffs will now take steps to comply with the disclosure orders, although the time for compliance with them has passed, and although the Plaintiffs lead no evidence of having taken any such steps to date. I make no assumption that the Plaintiffs either would or would not do so in the absence of evidence led by them addressing that question.
2. Ms Goddard and Ms Ross, for the Defendants, respond that the period permitted for disclosure by the Plaintiffs had previously been extended to take into consideration the Christmas/New Year period, an expected absence of Mr Pacione overseas and the size of the Plaintiffs' business and that it "seems apparent that the Plaintiffs have made no efforts to comply with" the December Orders. The latter submission may be a little too strong. It is, however, correct that the Plaintiffs have provided no explanation of any steps that they have taken to comply with the Court's orders; only they have any knowledge as to that matter; and I may properly infer that any evidence which they could have led as to any steps that they have taken to comply with the December Orders would not have assisted them in the stay application.
3. Ms Catanzariti responds that there is no evidence that the Plaintiffs have made "no efforts to comply" with the Court's orders. That proposition is strictly correct, although the Plaintiffs have made no attempt to establish that they in fact devoted any efforts to comply with the Court's orders, and that evidence could only come from them and not the Defendants. Ms Catanzariti also points out that the Plaintiffs filed a Notice of Intention to Appeal in the Court of Appeal and their grounds of appeal covered more than copyright. It seems to me that the filing of the Notice of Intention to Appeal has some weight, although, as I have noted above, it is now common ground that the Plaintiffs' appeal could not be brought in the Court of Appeal. However, that weight is limited by the facts that, first, the filing of a Notice of Intention to Appeal did not bind the Plaintiffs to proceed with an appeal; second, it did not identify the grounds of an appeal; and, third, obviously enough, the filing of a Notice of Intention to Appeal did not, in itself, stay orders made at first instance or provide an explanation for non-compliance with them. Ms Catanzariti also points out that the application for a stay was included in the application made to the Federal Court on 5 March 2015. The weight of that matter is limited by the fact that that was the day before the expiry of the time for compliance with the disclosure orders.
4. In oral submissions, Ms Catanzariti also submitted that the Plaintiffs reasonably considered that there would not be an "issue" about the disclosure orders, after the Notice of Intention to Appeal had been filed, since it was reasonable to expect that disclosure would be stayed where the parameters of disclosure may be changed depending on the outcome of the appeal. I do not accept that submission for three reasons. First, the affidavit evidence filed in the proceedings does not outline the Plaintiffs' or their legal representatives' thinking in that regard, so that submission has no evidentiary basis. Second, any such assumption would be unreasonable, not least because it was not open to the Plaintiffs simply to disregard the Court's orders, without making any attempt to approach the Court to vary or stay them. Third, it seems to me highly unlikely that, if the Plaintiffs had sought to stay the disclosure orders based on no more than a Notice of Intention to Appeal, which did not identify the grounds of appeal, the Court would in fact have stayed those orders, having regard to the principles to which I referred above. It does not seem to be that the Plaintiffs can be in a better position because they did not afford the opportunity to determine such an application on its merits.
5. Ms Catanzariti also submitted, in reply, that the issue for a stay application was whether the Plaintiffs would suffer prejudice or the Defendants would suffer prejudice and whether the Plaintiffs had "delayed in complying with the Court orders is a separate issue and not relevant to the issue of prejudice". I do not accept that submission. First, as I have noted above, it seems to me that unexplained delay in complying with the disclosure orders is relevant to the Plaintiffs' claim that their resources will be diverted from the appeal, which depends on an assumption that they would in future comply with those orders. To put that proposition another way, there will be no prejudice by diversion of resources if the Plaintiffs have not in fact devoted resources to complying with the December Orders in the past and do not propose to do so now. The only prejudice in that case will be the result of any orders that the Court may ultimately make arising from the Plaintiffs' existing non-compliance with those orders. Second, so far as the Court is asked to exercise a judicial discretion as to whether to grant the stay of the disclosure orders, it seems to me that that discretion must be exercised having regard to all the relevant circumstances, and the unexplained non-compliance with the Court's previous orders is a relevant circumstance.
6. To the extent that there is any such overlap between the time period in which disclosure is now given in compliance with the December Orders and the period in which the appeal is conducted, and any consequential diversion of the Plaintiffs' resources from the appeal, that overlap would be the result of the Plaintiffs' unexplained non-compliance with the Court's orders in the time provided by those orders, by 6 March 2015. It seems to me that matter provides little support for a stay that would, in effect, restrospectively extinguish the Plaintiffs' obligation to comply with the disclosure orders, without explanation of whether they took any steps to do so.

Lack of coordination between Courts

1. Mr Simone also expresses a concern that, if the Court does not grant the stay which the Plaintiffs seek, timetables between this Court and the Federal Court will not be coordinated and Judges will have to make decisions on related issues. It does not seem to me that that concern is well-founded. First, this Court is not presently required to order any further timetable as to disclosure, since it has not been asked to extend the time for compliance with the December Orders and the Plaintiffs have led no evidence of any steps taken to comply with those orders of the kind that would be expected to be led in support of any such application. Second, it seems to me that it can be fairly assumed that this Court in its original jurisdiction, and the Federal Court in its appellate jurisdiction, are each capable, with the parties' assistance, of dealing with such matters in a coordinated fashion.

Prejudice to the respective parties

1. Ms Catanzariti also submits that the Plaintiffs will suffer prejudice and damage, if the disclosure orders are not stayed, because they will incur costs and time although the Full Court's decision may mean that disclosure is not required or the parameters of the disclosure may be different. In oral submissions, Ms Catanzariti submits that the scope of disclosure would be significantly changed if, for example, the Plaintiffs were successful in establishing on appeal that there had been no infringement of copyright, and I accept that result would follow from a successful appeal. However, that will only be the case if the Plaintiffs are successful on appeal, because, as the Defendants point out, the basis on which the disclosure orders were made will not be affected by their cross-appeal.
2. I am ultimately not persuaded that that proposition should be given significant weight in determining whether to stay the disclosure orders. First, the Plaintiffs would have already incurred the costs of disclosure, prior to the commencement of the appeal, had they complied with the December Orders. Second, in the ordinary course, it seems to me that parties would be assisted, prior to devoting significant resources to a complex appeal, by having the opportunity to assess the amount of damages that are in issue in the proceedings, an opportunity that the disclosure orders will provide. I am not persuaded by Ms Catanzariti's submission that damages are a peripheral matter, notwithstanding the existence of other issues as between the parties on other fronts.
3. Ms Catanzariti also submits that the Defendants have not referred in correspondence to any prejudice that they may suffer if the disclosure orders are stayed. The Defendants point to prejudice in a delay in disclosure, so far as it may delay their ability to make an election and their recovery of damages or an account of profits. It seems to me that there is little or no prejudice to the Defendants in that regard, where they have now properly recognised that their election between compensation and an account of profits should be deferred pending the determination of the appeal. I give greater weight to the prejudice to the Defendants in being deprived of information as to the potential quantum of any damages which would, as I noted above, be relevant to any rational decision-making in respect of the appeal.

Result as to disclosure orders

1. Having regard to the matters that I have set out above, and where the Plaintiffs have led no evidence of any steps taken to comply with the disclosure orders either in the period in which compliance was required or before the appeal was commenced, I am not satisfied that it is in the interests of justice now to stay those orders. Indeed, it seems to me that a stay of those orders in those circumstances would not be consistent with the interests of justice, which include the community's interest in ensuring that orders of Courts are not routinely disregarded.

Other aspects of the December Orders

1. The parties initially also made submissions as to other orders that had been made by the Court as to delivery up and as to further steps in the proceedings. It is not necessary to address those other orders, since, as I noted above, the Defendants sensibly accepted that such orders could properly be stayed.

The Defendants' costs application

1. I will address a further stay application brought by JRC and HSFS in respect of costs below. Before doing so, it will be convenient to address a further Notice of Motion filed by the Defendants, which was ultimately not the subject of any dispute between the parties. By a further Notice of Motion also filed on 24 March 2015, the Defendants sought an order that they be permitted to recover the costs the subject of the Costs Order other than at the conclusion of the proceedings in accordance with r 42.7 of the UCPR or, further or in the alternative, that the Plaintiffs pay their costs the subject of the costs orders, as assessed or agreed, forthwith. The order sought refers to r 42.7 of the UCPR which provides, relevantly, that the costs of any other application or any step in any proceedings, unless the Court orders otherwise, do not become payable until the conclusion of the proceedings. This application was brought because it is now common ground between the parties that my liability judgment is to be treated as an interlocutory judgment, and that the Defendants could not proceed to enforce the order for costs in their favour unless the Court otherwise ordered for the purpose of the rules.
2. The Defendants advanced various submissions as to the merits of such an order, including noting that I had rejected, in my costs judgment, a submission that the question of costs of the liability stage of the proceedings should be deferred until after the determination of the quantification stage of the proceedings. The Plaintiffs advanced various submissions in opposition to the making of such an order including, perhaps surprisingly, a submission that the Court was functus officio, notwithstanding the common ground between the parties that my liability judgment was interlocutory in character and that I have still to hear the quantification stage of the proceedings. The Plaintiffs initially also submitted that the Court should not exercise its discretion to make the order sought by the Defendants, because the Costs Order had been made in the form in which the Defendants had previously sought it in circumstances that, I interpolate, the Plaintiffs did not take advantage of the opportunity afforded them to make submissions as to the final form of that order.
3. In the event, common ground developed in the course of the hearing, to the effect that the Court could and should make orders that the costs of the proceedings be payable forthwith, in respect of the costs comprised in the Costs Order and also in respect of several costs orders previously made in favour of the Plaintiffs, possibly on 5 November 2013, 11 November 2013 and 13 November 2013, although there appeared to be a degree of uncertainty as to those dates which will need to be resolved before orders are made to give effect to this judgment. I will accordingly make such orders on that basis. I will also make an order, as agreed between the parties that the Defendants will pay the Plaintiffs' costs of the application that costs be payable forthwith, in an amount agreed at $1,200 plus GST.

The Plaintiffs' stay application in respect of costs

1. By their Notice of Motion filed on 24 March 2015, the Plaintiffs also seek an order that the Costs Order be stayed pending the hearing of the appeal to the Full Court of the Federal Court of Australia.
2. The Defendants relied, in support of their opposition to a stay of the costs order, on the affidavit of Ms Valerie Higinbotham dated 24 March 2015. Ms Higinbotham, who is an experienced costs assessor, quantified the recoverable costs, Counsels' fees and disbursements of the proceedings in a substantial amount. The Defendants also relied on an affidavit of Mr Robert Cummings, the First Defendant, and a director of the Second Defendant, Tanmari Pty Ltd ("Tanmari"), which indicated that he and Tanmari were in difficult financial circumstances for the reasons set out in a confidential exhibit. The Defendants also relied on an affidavit of Mr Mark Taylor, the sole director of the Third Defendant, FrameCAD IP Ltd ("FIPL") and of the Fifth Cross-Defendant, FrameCAD Ltd, who referred to the costs to those entities of the conduct of the proceedings and also pointed to detriment to product development and other adverse consequences of the proceedings. The Plaintiffs in turn relied on the affidavits of their solicitor, Mr Simone dated 15 April 2015 which indicated, inter alia, a concern that the amount of the costs claimed by the Defendants appeared excessive and were not accepted by the Plaintiffs as being fair and reasonable costs on a party/party basis. The Plaintiffs also relied on an affidavit of Nicholas Simone dated 22 April 2015 which recorded an undertaking, subsequently given by the Plaintiffs by their Counsel, to which I will refer below.
3. The Plaintiffs submit that the Costs Order should be stayed for three reasons. They submit, first, that there is no evidence that the Defendants will be in a position to repay any costs paid to them pursuant to the Costs Order. They submit, and I accept, that a risk that the Plaintiffs will be unable to repay costs ordered in their favour without difficulty or delay, if the appeal were to succeed, would be a significant factor in support of a stay: TCN Channel 9 Pty Ltd v Antoniadis (No 2) [1999] NSWCA 104; (1999) 48 NSWLR 381.
4. The Plaintiffs point out, and it is common ground, that Mr Cummings and Tanmari are in a difficult financial position, in part because of the costs which they have been required to incur in their largely successful defence of these proceedings. That proposition goes both ways, as Ms Goddard fairly conceded for the Defendants. On the one hand, Mr Cummings and Tanmari rely on it to support an order that costs be payable forthwith but, on the other, it supports a stay of a costs order, so far as it raises the real risk, and possibly the commercial certainty, that costs now paid to Mr Cummings and Tanmari would be used to discharge their current obligations, including those arising from the proceedings, and would not readily be recoverable if an appeal was successful. The Defendants respond that Mr Cummings, Tanmari and FIPL would be jointly and severally liable for any costs ordered to be repaid such that the Plaintiffs were protected. I may have required an undertaking by FIPL recognising such joint and several liability, as a condition of declining to exercise a discretion to grant a stay, had the issue not been resolved in the different manner to which I will refer below. Ms Goddard did not have instructions whether to offer such an undertaking, at least at the point of the hearing before me.
5. The Plaintiffs also submit that there is no evidence of the financial position of FIPL, which is a New Zealand company, with its main business operations in New Zealand, and there is also no evidence that FIPL holds assets in New South Wales. The Defendants respond, and I accept that, if an order were made against FIPL to repay costs, that order would be enforceable under Part 2 of the Trans-Tasman Proceedings Act 2010 (NZ), by registration of an Australian judgment in New Zealand to facilitate its enforcement. The Plaintiffs also submit that there is evidence that suggests that FIPL may not be in a position to repay the Costs Order. I do not consider that the evidence to which the Plaintiffs refer, which relates to the commercial detriment suffered by FIPL as a result of these proceedings, is by any means sufficient to establish that proposition. The Plaintiffs also submit that, if FIPL went into administration or went into liquidation, the Plaintiffs would need to prove their debt in a foreign jurisdiction. That proposition is correct, but there is no evidence that that is a likely, possible or even realistic prospect.
6. The Plaintiffs point out, and I accept, that the Defendants have quantified the costs payable to them as substantial amounts, which is perhaps not surprising given the scale of the proceedings, and have also filed an application for security for costs in the Federal Court. The Plaintiffs also submit that there is a risk that the corporate plaintiffs may be wound up and Mr Pacione could be made bankrupt. I accept that those matters, if established, would strongly support a stay of the Costs Order, if enforcement of that order would potentially prevent the Plaintiffs from prosecuting appeals that might otherwise have succeeded: Kalifair v Digi-Tech (Aust) Ltd above at [21] - [26]. The Plaintiffs lead no evidence before me, beyond bare assertion, as to their financial incapacity to meet such an order. On the other hand, their submissions as to the consequences of the Costs Order for them find some support in the Defendants' submissions that they have concerns about the Plaintiffs' ability to meet such an order.
7. The Plaintiffs, by their Counsel, also offer an undertaking in substantially the same form offered in Kalifair v Digi-Tech (Aust) Ltd above (at [34]), to the effect that: "Each of the [Plaintiffs] undertake to the Court that it will not, by itself, its servants or agents, remove or cause or permit to be removed from the State of New South Wales or sell, charge, mortgage or otherwise deal with or dispose of, or cause or permit to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any of its assets (whether held beneficially or otherwise) within the State of New South Wales provided that this undertaking shall not prevent it from granting licences and paying expenses incurred in the ordinary course of business, including legal expenses incurred in prosecuting the appeal or selling any listed shares for their market value." The Defendants criticise that undertaking as of little comfort to them in the absence of any evidence of the Plaintiffs' assets and their value. On the other hand, that undertaking at least goes some way to preserving the Plaintiffs' present position, whatever it might be.
8. The Plaintiffs also point out that the Costs Order may be varied on appeal, where both they and the Defendants are appealing different aspects of the liability judgment and in respect of costs. That matter would support a stay of the Costs Order, to the extent that it were shown that, for example, the Defendants could not repay costs that had been paid pursuant to the Costs Order, if that order were subsequently varied. To that extent, this matter overlaps with the first basis on which the Plaintiffs seek to stay the Costs Order.
9. The Defendants in turn submit that they would be prejudiced by a stay of the Costs Order, because they have incurred significant costs. The Plaintiffs respond that, obviously enough, a stay merely suspends and does not extinguish a costs order.
10. I am not satisfied that it is presently necessary to stay the Costs Order, for practical reasons, which were substantially accepted by Counsel in the course of submissions. It appears inevitable, from the evidence before me, that the parties will not agree the amount of costs arising from the proceedings and it will be necessary for the Defendants to proceed to a costs assessment in order to establish their recoverable costs. That costs assessment is likely, as a practical matter, to take some time. The parties did not identify any reason why the Defendants should not now be permitted to commence the assessment process, if they are content to incur the costs of doing so despite the risk that the Costs Order may be varied on appeal. A stay that prevented the Defendants from now proceeding to assessment, as distinct from registering any costs assessor's certificate(s) arising from an assessment so as to give rise to an enforceable judgment, would inevitably and substantially delay their recovery of costs, if the Costs Order is ultimately sustained on appeal.
11. I am satisfied that the Plaintiffs' interests are sufficiently protected, for present purposes, by an undertaking by the Defendants not to proceed to register the assessor's certificate(s) arising from a costs assessment, so as to give rise to a judgment against the Plaintiffs, without giving 14 days' notice to the Plaintiffs of their intention to do so. That would allow the Plaintiffs the opportunity to seek to obtain a wider stay or other order at that point, if so advised. It seems to me that that approach would adequately protect the Plaintiffs' interests so far as it avoids any present risk that the enforcement of a judgment arising from the assessment of costs payable under the Costs Order that might bring about any winding up of the corporate plaintiffs or bankruptcy of Mr Pacione, so as to frustrate their ability to conduct the appeal, without preventing the Defendants from progressing a costs assessment in a way that would not have that result.
12. It seems to me that, as matters stand, Mr Cummings' and Tanmari's financial position would be sufficient to support a stay of the Costs Order, if no lesser course is available. However, I will not stay those orders, if the Defendants are prepared to offer an undertaking of the kind noted in paragraph 41 above.

Summary and orders

1. Accordingly, in summary, I decline to grant the stay sought by the Plaintiffs of the disclosure orders previously made by the Court; I will order the stay which both parties now accept should be made of the orders for delivery up, the directions as to an election by the Defendants and as to mediation; I will order that costs be paid forthwith, both in respect of the Costs Order and the costs ordered in favour of the Plaintiffs and Cross-Defendants to which I have referred above; and I will not stay the Costs Order so as to prevent the Defendants and Cross-Claimants proceeding to an assessment of their costs, if the Defendants and Cross-Claimants undertake not proceed to register certificates as to their costs arising from the assessment without giving the Plaintiffs 14 days of their intention to do so.
2. The parties should bring in Short Minutes of Order to give effect to this judgment within 7 days and, if there is no agreement between them, their respective draft Short Minutes of Order including short submissions as to any differences between them.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 May 2015