Consideration
18Not lightly ought an application for an adjournment of a hearing, made on the day of the hearing, be acceded to. I am conscious that applications for adjournments made by Mr and Mrs Menzies have been a recurring theme in the litigation at first instance between these parties. The procedural history, set out in detail in Harrison AsJ's reasons in [2013] NSWSC 551 at [12]-[24], is unfortunate, to say the least. Her Honour recorded that the trial set down before her had been vacated twice on the application of Mr and Mrs Menzies, that the proceedings had been before the Court on at least 18 occasions, and that on 22 March 2013, Garling J had said:
"HIS HONOUR: Mr Menzies, I recall vividly what is going on and the reason I made orders was so that this case can finally come for hearing in circumstances where the hearing date has been vacated twice and it is time that the Court requires you to put on all of your evidence. ... This case will go ahead on 13 May. There will be no adjournments."
19Sections 56-60 of the Civil Procedure Act impose obligations on the parties, their lawyers, and the Court. Every adjournment detracts from the efficiency and cheapness of litigation. Every adjournment causes irrecoverable cost to Paccar and, indirectly, to other litigants in the Court. Section 59 requires the implementation of practice and procedure with the object of eliminating time between the commencement of the appeal and its final determination other than time which is reasonably required for interlocutory activities necessary for the fair and just determination of the issues between the parties. As Allsop P said in Bi v Mourad [2010] NSWCA 17 at [47], cases need to be dealt with expeditiously if they are to be dealt with justly.
20Of especial importance, in my view, to the present application, is the command in s 60 of that Act:
"In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute."
21That section has an important application in relation to applications for leave involving amounts below the statutory threshold: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [39]. In my opinion, s 60 also has an important application here, where what is at stake is the timing of a hearing as to a stay pending appeal. Much more important than the timing of that hearing is its outcome, and much more important than either is the determination of the appeal itself, which after all is the purpose of and the reason for the interlocutory application.
22Obviously, those considerations are counterbalanced by what fairness requires in a particular case. There seem to me to be three quite unusual circumstances pointing in favour of the adjournment Mr and Mrs Menzies seek. The first is that a judge has expressed the view in his reasons that the matter warrants a referral for pro bono legal assistance, identifying matters which in his preliminary view are seriously capable of argument, and for reasons the correctness of which I cannot fully assess, Mr and Mrs Menzies claim that they have not to date enjoyed what was contemplated by and what they expected from that referral. The second is that Mr and Mrs Menzies amply demonstrated that in the weeks leading up to 26 August 2013, they had been assiduously taking steps to obtain legal assistance. I should summarise those steps below.
(1)Mr and Mrs Menzies were dissatisfied by the immediate outcome of the Court's referral (which apparently was a prompt summary of advice from junior counsel in his first year at the Bar, who was unwilling to appear without a solicitor).
(2)Mr and Mrs Menzies applied earlier in August to the Pro Bono and Community Services branch within the Law Society (letters and emails of 5, 6, 16, 21 August 2013).
(3)Mr and Mrs Menzies also applied in August to the New South Wales Bar Association's Legal Assistance Referral Scheme (application made 5 August, further correspondence 12, 13, 15, 20, 21 August 2013).
(4)Mr and Mrs Menzies tendered documents suggesting that they applied in late July and early August for pro bono assistance from four well-known law firms, which had to date been unsuccessful.
(5)For what it is worth, Mr Menzies said from the Bar table that he had also spoken with a barrister whom he had formerly retained, and solicitors who were prepared to act for him, and conveyed the impression to me that a retainer was imminent.
23I would not want it to be inferred that merely engaging in substantial communication with law firms and professional organisations would constitute a basis for an adjournment; in my view it would not. I am rather more persuaded by the documents tendered by Mr and Mrs Menzies than what is said from the Bar table. However, the most persuasive consideration, to my mind, by far is that it appears that Mr and Mrs Menzies' own application to the Bar Association has led, albeit belatedly, to the appearance of Senior Counsel, and the advancing of arguments which in my view cannot be dismissed out of hand. Indeed, counsel for Paccar (who of course had only had very limited notice of the points) asked for time to consider and respond to them, and has now done so in writing.
24In short, although the procedural history of this appeal and the proceedings at first instance contains much that is regrettable, a consideration in favour of the adjournment sought by Mr and Mrs Menzies is that it may enable them to enjoy the benefit of representation which was contemplated by Rothman J. That benefit, of course, is not confined to them, but includes a benefit to Paccar and to the Court. On the material before me, the chance of that occurring is real.
25As it happened, the delayed start of the hearing (at 2.15pm, to suit the convenience of Mr and Mrs Menzies), the appearance of Mr Kidd as amicus, the desire by counsel for Paccar for 48 hours to respond further to Mr Kidd's submissions and to supply a formal undertaking, and my desire to reflect on what he had said, led, shortly before 5pm, to Mr and Mrs Menzies in effect obtaining by default a short adjournment when I reserved my decision and extended the existing stay until today.
26In my view the resolution of the adjournment application before me is informed by the following considerations.
27First, although a great deal of the Court's and the parties' time has been consumed so far, it is to be realised that the purpose of the stay application brought by Mr and Mrs Menzies is merely to determine, on an interlocutory basis pending the hearing and resolution of their appeal, a holding position in relation to the possession orders and the money orders. Sections 59 and 60 of the Civil Procedure Act require me to attempt to resolve the interlocutory disputes between the parties as efficiently as may be done, consistently with fairness. I think that it is appropriate that I attempt to assess, as best I can, the outcome of the underlying interlocutory dispute, and not merely the application for its adjournment, if I can do so in a way that is fair to the parties.
28Secondly, the principles applicable to a stay of execution pending appeal are familiar and uncontroversial. In Alexander v Cambridge Credit Corporation Ltd (Receivers appointed) (1985) 2 NSWLR 685 the Court said that "special or exceptional circumstances" did not need to be made out, and that it was sufficient that the applicant demonstrated "a reason or an appropriate case to warrant the exercise of discretion" in the applicant's favour: at 694. On the other hand, as the Court said Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 at [28]:
"A successful party is prima facie entitled to the fruits of his judgment. He is entitled to be protected, as far as practicable, from the risk that if the appeal fails assets which earlier were available to satisfy the judgment will no longer be available for that purpose. The Court will endeavour to see that a stay does not cause that kind of prejudice to a judgment creditor."
29In Vaughan v Dawson [2008] NSWCA 169 at [17] Campbell JA applied what had been said in Kalifair at [18] to the effect that the principles resembled those governing the grant of an interlocutory injunction, namely, whether it had been shown that there was a serious question to be tried and, if there is, where the balance of convenience lies. These principles have regularly been applied, including in Boutros v Nationwide Capital Pty Ltd [2013] NSWCA 246 at [27]-[31].
30Thirdly, as I indicated during the hearing, my preliminary view is that there should be a stay of the money orders pending the determination of Mr and Mrs Menzies' appeal. All the evidence before me suggests that Mr and Mrs Menzies do not presently have liquid assets available to meet the judgment debt, and their communications with the Law Society evidence a lack of means (see in particular the bank statement entries on 5 and 19 July 2013, and the "Financial Details" section in the Application for Pro Bono Referral within Exhibit D). Further, although strictly there is no evidence of it, Harrison AsJ's reasons ([2013] NSWSC 772 at [125]) record that in 2010 Paccar Financial sought to be substituted as a petitioning creditor pursuant to s 49 of the Bankruptcy Act 1966 (Cth) and applied for sequestration orders against the estates of Mr and Mrs Menzies. Those orders were made: BP Australia Pty Ltd v Menzies [2010] FMCA 375. Mr and Mrs Menzies appealed, and Bromberg J set aside those orders: Menzies v Paccar Financial Pty Ltd [2011] FCA 460.
31Accordingly, I am of the view that taking steps by way of execution of the money orders would not materially advantage Paccar, and would cause undue prejudice to Mr and Mrs Menzies. That falls within the scope of the considerations applied by this Court in Kalifair at [25]:
"Where the appellants have no assets the judgment creditor, as it has conceded, will not suffer any relevant prejudice if a stay is granted. The loss of its right to proceed to winding-up to prevent the appeals being heard on their merits does not constitute relevant prejudice for present purposes."
32In expressing that view, I am conscious that Paccar has not as yet been heard in opposition to a stay of the money orders pending the determination of the appeal. That will be reflected in the provisional nature of the orders I will make.
33Fourthly, in relation to the possession orders, the underlying question is what is an appropriate provisional position to place the parties in pending the determination of the appeal. The position today is that Paccar has final orders in its favour following a final hearing which entitle it immediately to possession of the prime movers and trailers. Mr and Mrs Menzies have exercised their right of appeal challenging those orders, which if successful will entitle them to possession of the prime movers and trailers. The burden lies on Mr and Mrs Menzies to provide a basis for the operation of a stay, pursuant to Uniform Civil Procedure Rules (UCPR) r 51.44. Contrary to statements repeatedly made by Mr Menzies, the mere filing of a Notice of Appeal does not of itself provide a basis for a stay; he and Mrs Menzies need to do something more than engaging their right to appeal in order to deprive Paccar of the fruits of its victory at trial.
34The applicable principles are analogous to those governing the grant of interlocutory injunctions: Kalifair at [18]; Vaughan at [17]; Boutros at [31]. As best I can see, there are three matters pointing to there being a serious question to be determined on appeal.
35The first is whether Mr and Mrs Menzies were, as they claim, denied procedural fairness or otherwise can demonstrate appellable error on the part of Harrison AsJ. I am in no position myself to form a view of the strength or otherwise of that claim, however I note that Rothman J formed the view, as noted above, that there was a "sufficiently arguable case" on that basis.
36Secondly, there is the question of jurisdiction, also referred to by Rothman J, which, if it is to be agitated on appeal, would require an amendment of the Notice of Appeal. Because the question goes to jurisdiction, it seems unlikely that the fact that it was not raised before Harrison AsJ would be an insuperable obstacle to its being argued on appeal.
37Thirdly, there is Mr Kidd's point concerning the operation of s 568D. It is not necessary for me to determine whether that point is correct, and I do not do so. For one thing, the precise terms of the disclaimer are not before me, and the nuances of Mr Kidd's argument involves and may turn on two matters of detail: the proposition that the disclaimer was of the chattels, not the contract, and that the charge was over the interest in the chattels, not the chattels themselves. For another, there is force in the submission that had the point been taken at first instance, Paccar could have made application under s 568F(1)(b) as a person "to whom it seems to the Court appropriate that the property be vested or delivered". For a third, and without conveying any criticism to those appearing on extremely short notice and in one case pro bono, I have formed the initial view that there are factual and legal aspects of the point which have not been fully ventilated. Not only do I not know the precise terms of the disclaimer or whether it was a disclaimer of the chattels or the contracts, but also I do not know whether the notification under s 568A was given, or whether leave of the Court was given, or what Paccar's attitude to the disclaimer was. The expansion of the scope for exercise of the power to disclaim conferred by s 568 in recent years (for there could have been no disclaimer of the chattels, as opposed to the contracts, pursuant to s 568 in the form it took in Sandtara Pty Ltd v Abigroup (1996) 42 NSWLR 491) may give rise to further questions as to the applicability of earlier authorities. And this is an area where there is considerable legal complexity. As Rares J said in National Australia Bank Ltd v New South Wales [2009] FCA 1066; (2009) 182 FCR 52 at [28]:
"... as all judges since Jessel MR have recognised the question of where the title goes after a disclaimer is as clear as mud."
38Further, I note that the decision of the Victorian Court of Appeal on which Mr Kidd relied was the subject of a grant of special leave: [2013] HCA Trans 106, during which it was said that "this is the only occasion on which this view of the disclaimer power has been taken" and Kiefel J observed that "this is a fairly novel approach". Although I confess that I am inclined to doubt the ultimate success of Mr Kidd's submission, I would acknowledge (a) that there is a body of law dealing with the making of vesting orders in favour of a secured creditor following a disclaimer (see the decisions to which Bennett J referred in National Australia Bank Ltd v State of Victoria at [9]-[12], and a passage in the reasons of Bowen CJ in Eq in Re Middle Harbour Investments Ltd [1977] 2 NSWLR 652 at 658 which presupposes that a disclaimer can operate to interfere with the security of a mortgagee) to which Harrison AsJ did not refer (and may well not have been referred to), and (b) that the area is not free from complexity.
39But because I have reached the view that the provisional orders I propose to make can be made without taking these issues any further, it is inappropriate that I do so. In particular, nothing in these reasons should be taken to predetermine the outcome of any application to amend the Notice of Appeal to raise the points flagged by Rothman J and Mr Kidd.
40This application insofar as it relates to the possession orders may, in my opinion, be resolved on the preliminary basis, favourable to Mr and Mrs Menzies, that there is a serious question to be tried. That is because I have reached the preliminary view that the balance of convenience very substantially favours not granting the stay, by reason of the strength of the undertaking proffered by Paccar.
41Paccar's undertaking requires it, upon sanction of contempt, to store and keep the prime movers and trailers pending the determination of the appeal. That is (considerably) less than Paccar enjoying the fruits of the judgment it has obtained; to the contrary, it imposes positive obligations upon Paccar to preserve and protect the chattels. In the event that Mr and Mrs Menzies succeed on appeal, they will be returned to them. It seems that in the course of the dispute between the parties, both have either threatened, or commenced, prosecutions for contempt against the other, and so Mr and Mrs Menzies would well appreciate the measure of protection afforded to them by Paccar's undertaking to the Court.
42Ultimately, the question on the underlying application for a stay of the possession orders is whether it is appropriate, pending the determination of the appeal, for the prime movers and trailers to be in the possession of Mr and Mrs Menzies, or of Paccar. The onus lies upon Mr and Mrs Menzies to show why what is now offered by Paccar is not a fair or appropriate "holding pattern". On the material presently available to me, I think it is unlikely that they would be able to do so.
43As noted above in connection with my preliminary views on the stay of the money orders, I am conscious that the application before me was, as it turned out, merely an adjournment application. Mr and Mrs Menzies have not as yet been heard fully on the stay of the possession orders. That said, Mr Menzies is, to my mind, articulate and effective in conveying his submissions orally, some of which (without intending any criticism of him) extended beyond the adjournment application to the stay application which underlies it. Further, on 25 August Mr and Mrs Menzies supplied 37 pages of submissions which were principally directed to their application for a stay, and which dealt expressly with the strength of their case and the balance of convenience.
44Those submissions state (p25) that:
"The Menzies currently have the trucks in secure storage and they will remain there until a Fair and Just Trial takes place and after all Appeals processes are exhausted."
That accords with what I understood was common ground at the Bar table on 15 July 2013.
45Mr Menzies has said (repeatedly) and written (for example, written submissions p36, and yesterday's submission p3) that it is nonsensical for there to be a stay of the money orders but not of the possession orders: "It is beyond us why all Harrison AsJ's orders are not stayed as we have a right of appeal." If there is one thing which Mr and Mrs Menzies fail to understand about the nature of the process, the different treatment of the money orders and the stay orders is that thing. The point of the following paragraph is to attempt to explain to Mr and Mrs Menzies why in my view (which was evidently shared by Rothman J) that this is a clear case for treating the orders differently.
46As things stood following the trial, Paccar was entitled to possession of the prime movers and trailers, and to enforce the judgment debt. Filing an appeal does not of itself detract from Paccar's existing rights; UCPR r 51.44(2) makes that plain beyond argument. The central question is what is fair and appropriate for the limited time (ideally, a matter of months) during which the legal rights of Paccar established by the final orders following the trial are qualified by the possibility that an appeal might be allowed. There is no reason whatsoever why an appropriate and fair temporary position might not treat different aspects of a challenged judgment differently - either because there are greater or lesser prospects of challenging parts of the orders, or because some aspects of the challenged judgment, if not stayed, will operate to greater or lesser prejudice to the appellants. It is to my mind plain on the face of Rothman J's reasons that his Honour formed the same view.
47In the present case, the question on the possession orders resolves to this. Are the prime movers and trailers to be in the possession of Mr and Mrs Menzies, pending the determination of the appeal, or are they to be in the possession of Paccar, subject to its being bound by its undertaking? I am doubtful that Mr and Mrs Menzies will be able to point to arguments to displace the prima facie position that the balance of convenience favours Paccar obtaining possession of the prime movers and trailers to which it is presently entitled by orders which will remain in place unless and until Mr and Mrs Menzies succeed on appeal, especially given that Paccar will subject itself to the terms of the undertaking which it proffers. That said, I acknowledge that Mr and Mrs Menzies have not had the opportunity at all to make submissions in respect of the precise terms of Paccar's undertaking (which was only provided on 28 August 2013), and there may be other matters they wish to raise to detract from the preliminary view I have expressed above.