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[2026] NSWSC 795
Supreme Court of NSW
2026-07-09
Chen J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Philippa Jane Grasso and Alison Rose Manton as the Executors of the Estate of the Late David Daley v Geoffrey Charles O’Connell (No 2) [2026] NSWSC 795
Hearing dates: 09 July 2026
Date of orders: 09 July 2026
Decision date: 09 July 2026
Jurisdiction: Common Law
Before: Chen J
Decision: The application for indemnity costs:
(1) Vary order 3 made on 12 May 2026 as follows: pursuant to r 42.14 of the Uniform Civil Procedure Rules 2005 (NSW), order the plaintiff’s costs are to be assessed up to, and including, 1 May 2025 on the ordinary basis, and thereafter on an indemnity basis.
The application for a stay:
(1) Order the defendant’s notice of motion filed 16 June 2026 be dismissed.
(2) Order the defendant pay the plaintiff’s costs of and incidental to the notice of motion.
Catchwords: COSTS – application for a special costs order – whether a provision for “costs as agreed or assessed” is compliant with r 20.26(2)(c) of the Uniform Civil Procedure Rules 2005 (NSW) – whether the Court should order otherwise – indemnity costs ordered
JUDGMENTS AND ORDERS – application for stay of execution or enforcement – whether to order a stay on a monetary judgment – notice of intention to appeal filed – risk of dissipation of assets if stay granted
Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685
Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12
Chalik v Chalik [2025] NSWCA 136
Channel Seven Sydney Pty Ltd v Mahommed (No 2) (2011) 80 NSWLR 210; [2011] NSWCA 6
Consolidated Lawyers Ltd v Abu-Mahmoud [2016] NSWCA 4
Curtis v Harden Shire Council (No 2) [2015] NSWCA 45
Hungry Jack's Pty Ltd v Fourtounas (No 2) [2021] NSWCA 26
Jones v Dapto Leagues Club Ltd (No 2) [2008] NSWCA 111
Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391
Morgan v Johnson (1998) 44 NSWLR 578
Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2014] NSWCA 231
Nominal Defendant v Hawkins [2011] NSWCA 93; 58 MVR 362
Philippa Jane Grasso and Alison Rose Manton as the Executors of the Estate of the Late David Daley v Geoffrey Charles O’Connell [2026] NSWSC 502
Tin-Tagel Majikk Pty Ltd v Hockey (No 2) [2025] NSWSC 1031
WJT v Trustees of the Marist Brothers; WXC3 v Trustees of the Marist Brothers; GAC v Trustees of the Marist Brothers (No 5) [2025] NSWSC 1093
Ye v Chen [2022] NSWSC 494
Category: Costs
Parties: Philippa Jane Grasso and Alison Rose Manton as the Executors of the Estate of the Late David Daley (plaintiff)
Geoffrey Charles O’Connell (defendant)
Representation: Counsel:
M Maconachie (plaintiff)
M Davies (defendant)
Solicitors:
Kells the Lawyers (plaintiff)
Heard McEwan Legal (defendant)
File Number(s): 2024/00085856
Publication restriction: Nil.
On 12 May 2026, I delivered my reasons for judgment and made orders, including that the defendant pay the plaintiff’s costs of the proceedings: Philippa Jane Grasso and Alison Rose Manton as the Executors of the Estate of the Late David Daley v Geoffrey Charles O’Connell [2026] NSWSC 502.
These reasons use the same abbreviations as the principal judgment.
Following the delivery of judgment, the plaintiff sought a special costs order – namely, that the plaintiff’s costs be payable on the ordinary basis up to and including 1 May 2025, and thereafter on an indemnity basis. The principal ground for seeking that order is the non-acceptance of a formal offer of compromise made and subsequently securing a judgment no less favourable: r 42.14 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’).
The plaintiff read, in support of the application, an affidavit from David Thomas Addinall affirmed 19 May 2026 and relied upon written submissions dated 19 May 2026 and 5 and 11 June 2026.
The defendant resists that application, and seeks the maintenance of the existing costs order.
The defendant read an affidavit from Nathan John McEwan sworn 26 May 2026 and relied upon written submissions dated 26 May 2026 and 9 and 11 June 2026.
The short explanation for why each side relied on three sets of submissions arises out of the need for the parties to address several matters drawn to the attention of them by the Court (which were not covered in the submissions) and, further, the parties changing position on key issues.
The defendant, by notice of motion filed on 16 June 2026, seeks a stay of the judgment until 12 August 2026. In support of that order, the defendant read an affidavit from Nathan John McEwan sworn 16 June 2026 and relied upon written submissions dated 2 July 2026.
The plaintiff opposes a stay, and relied upon written submissions filed 6 July 2026.
On 7 June 2024, the plaintiff offered to resolve the proceedings on the basis that the defendant pay the plaintiff $3,700,000 plus interest, and there be no order as to costs of the proceedings.
On 14 June 2024, the defendant rejected this offer.
On 1 May 2025, the plaintiff made an offer that was expressed to be pursuant to r 20.26 of the UCPR or, alternatively, be a “Calderbank offer” – essentially, requiring the defendant to pay the plaintiff $3,868,495.00, as well as the plaintiff’s “costs, as agreed or assessed” (‘the 2025 offer’).
It was common ground between the parties that the 2025 offer ($3,868,495.00) was arrived at by applying interest up to 1 May 2025 to the principal sum of $3,700,000.00 and then subtracting a discount of $100,000.00 from the interest (plaintiff’s submissions dated 11 June 2026 at [3]; defendant’s submissions dated 11 June 2026 at [8](d)).
The defendant did not respond to the 2025 offer and, as noted, the plaintiff’s application for indemnity costs is based upon the non-acceptance of it.
The plaintiff successfully sought recovery of the principal amount under the loan agreement ($3,700,000.00), plus an agreed amount for interest ($498,536.67: MFI 7), albeit that interest was only calculated up to and including 18 April 2026.
The judgment entered was the combination of these amounts, plus interest from the date of calculation until entry of judgment ($4,214,185.63).
“20.26 Making of offer
(1) In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms.
(2) An offer under this rule—
...
(c) must not include an amount for costs and must not be expressed to be inclusive of costs…”
Initially, the plaintiff’s application proceeded on the footing that the 2025 offer was invalid: although the basis for that concession was not identified, the approach appeared to accept that the reference in the 2025 offer for the payment of the plaintiff’s “costs, as agreed or assessed” contravened r 20.26(2)(c), because that involved the offer including “an amount for costs”.
When the plaintiff’s attention was drawn to the decisions in Curtis v Harden Shire Council (No 2) [2015] NSWCA 45 at [19]-[25] (‘Curtis’) and Ye v Chen [2022] NSWSC 494 at [103]-[108], it altered its stance about the validity of the 2025 offer. Given the conclusions reached in those cases – namely, that a plaintiff’s offer of compromise referring to the payment of “costs as agreed or assessed” was not, within r 20.26(2)(c) of the UCPR, an offer that includes “an amount for costs” and is thereby invalid – the plaintiff argued that, in all relevant respects, the 2025 offer conformed to the requirements of the rule. In short, it was a valid offer of compromise, and should take effect as such.
I accept that the 2025 offer was a valid offer of compromise pursuant to r 20.26 of the UCPR. Relevantly here, the decision in Curtis establishes that an offer of compromise made by a plaintiff, expressed to provide an order that the defendant pay the plaintiff’s costs as agreed or assessed, is not an offer that includes “an amount for costs”: at [25].
The defendant did not argue to the contrary and expressly conceded the 2025 offer was compliant with r 20.26 of the UCPR (defendant’s submissions dated 9 June 2026 at [6]).
The entitlement to an order for indemnity costs where, as here, an offer of compromise is made under r 20.26 by a plaintiff to a defendant and not accepted by a defendant, and the plaintiff secures judgment in terms more favourable than the offer, is conferred by r 42.14 of the UCPR.
Rule 42.14 of the UCPR, relevantly, provides as follows:
“42.14 Where offer not accepted and judgment no less favourable to plaintiff
(1) This rule applies if the offer is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer.
(2) Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs in respect of the claim—
(a) assessed on the ordinary basis up to the time from which those costs are to be assessed on an indemnity basis under paragraph (b), and
(b) assessed on an indemnity basis—
(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and
(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.”
The following two matters should be noted about the operation of this rule in the present case.
First, if a plaintiff obtains judgment no less favourable than the terms of the offer, then, subject to the Court ordering otherwise, it has an entitlement to an order for costs on the ordinary basis and an order for indemnity costs from the day following the day on which the offer was made as prescribed by rr 42.14(1) and (2)(a) and (b): Jones v Dapto Leagues Club Ltd (No 2) [2008] NSWCA 111 at [6]. The entitlement to indemnity costs, based upon securing entry of judgment in terms more favourable than an offer of compromise made, has been described as “the normal rule” (Hungry Jack's Pty Ltd v Fourtounas (No 2) [2021] NSWCA 26 at [3]), or “a prima facie entitlement”: see Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [40] (‘Leach’); Chalik v Chalik [2025] NSWCA 136 at [136] (‘Chalik’).
Secondly, whilst the Court retains a discretion to “order otherwise” (r 42.14(2)), in that situation the party seeking such an order – in this case, the defendant – “bears the onus of persuading the Court that indemnity costs should not be ordered”: Chalik at [136] – citing Leach at [29]; see also Curtis at [27].
The defendant’s ultimate submission was that the order for costs previously made should remain for two substantive reasons: first, because the Court should “order otherwise”, arguing that the 2025 offer “was not a ‘compromise’” (defendant’s submissions dated 11 June 2026 at [4]); and, secondly, by raising some arguments about the operation of r 42.16 of the UCPR (defendant’s submissions dated 11 June 2026 at [11]-[21]).
The defendant, in aid of these arguments, advanced extensive submissions and referred to a bevy of authorities – from here and overseas. Given these matters, it is well to recall the comments of Allsop P in Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [5]:
Three things need be borne in mind in a judgment such as this on costs: the desirability of avoiding unnecessary recitation of cases (abounding as they are in this area); the desirability of not restating, in different terms, approaches to the broad discretion that have been well settled; and the desirability of dealing with the arguments without over-elaboration, if this is possible.
The defendant’s arguments, about the 2025 offer apparently lacking compromise, were spread across the three sets of submissions filed. Later submissions simply sought to “repeat” and rely upon earlier submissions made with no attempt to consolidate or summarise the arguments advanced or to recognise that the earlier submissions were not directed to the circumstances that have arisen here – in short, the non-acceptance of a valid offer of compromise made under the UCPR, and the plaintiff securing a judgment that is in terms more favourable than that offer.
Given the defendant’s approach, it is necessary to discern these arguments and address them by reference to each of the written submissions in which they are contained.
Before addressing the defendant’s “no compromise” arguments, it is appropriate to refer to the background principles.
The defendant argued that the 2025 offer did not represent a true compromise or “a genuine offer of compromise”, with the result that the Court should refuse the application for indemnity costs. The defendant accepted that he carried the onus of demonstrating “no compromise”.
In WJT v Trustees of the Marist Brothers; WXC3 v Trustees of the Marist Brothers; GAC v Trustees of the Marist Brothers (No 5) [2025] NSWSC 1093 at [32], I provided the following summary of the background principles relating to arguments of this kind:
In relation to this argument, it has been held that “whilst this terminology is not entirely apposite”, it is “serviceable”: Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [25]. It is important to recognise, however, that to characterise an offer “by reference to epithets such as ‘real’ or ‘genuine’ adds little to the requirement of compromise, and may imply (wrongly) that an enquiry is to be made about the subjective intentions of the offeror”: Fabre v Lui (No 2) [2015] NSWCA 312 at [6] (‘Fabre’). The critical question is whether, objectively, there has been compromise, in the sense of the offeror offering to forgo something of substance: Fabre at [6]-[7]. Whether there is compromise is largely a matter of impression: Prospect Resources Ltd v Molyneux [2015] NSWCA 171 at [94].
In the written submissions dated 11 June 2026, the defendant argued that the offer lacked compromise because there was “[n]o compromise… made to the principal amount” and “no acknowledgement of… the risk of the [p]laintiff not succeeding” (defendant’s submissions dated 11 June 2026 at [8](a)). I do not accept this submission. I regard the fact that the plaintiff’s offer involved a reduction in interest, rather than the principal amount claimed, as neutral. I do not accept that it amounts, in and of itself, to the plaintiff’s offer lacking compromise. In this respect, it may be noted that the rules themselves envisage that an offer of compromise may involve the aggregation of a principal claim plus interest (see r 42.16 of the UCPR). In the present context, what is important is whether, objectively, there has been compromise.
The defendant then submitted that the fact that the “offer claims costs as agreed or assessed” further demonstrated a lack of compromise (defendant’s submissions dated 11 June 2026 at [8](b)). Precisely why was not made clear, nor was any attempt made to explain why that is material given the “offer of compromise” regime has as its focus the compromise of the cause of action. No authority was cited to support this submission, which I regard as without substance.
The defendant next argued that the “$100,000 discount on an offer of compromise for a judgment debt of $3,868,495 is a modest compromise” (defendant’s submissions dated 11 June 2026 at [8](d)). I do not accept this submission. Precisely why a reduction of this size should be considered “modest” was not the subject of elaboration.
As the authorities referred to in [35] above make clear, there are no “rigid rule[s]”, and an assessment of whether an offer contained sufficient element of compromise is, to a large extent, a matter of “impression”. Here, assessed objectively at the time the offer was made (Leach at [42]), the 2025 offer was a genuine offer to forgo a substantial sum of money and was not, as the defendant’s submission appeared to suggest, a tokenistic compromise. The defendant has failed to persuade me that the “discount” did not amount to a compromise; as a matter of impression, I regard the “discount” (see [14] and [38] above) as reflecting compromise.
The defendant then “repeats paragraph 23 of his primary submissions filed 26 May 2026” (defendant’s submissions dated 11 June 2026 at [8](e)). These arguments are not directed to this situation, but to support a finding that it was “not unreasonable for the [d]efendant to reject the offer in all the circumstances” (defendant’s submissions dated 26 May 2026 at [23]).
In those submissions, the defendant raised four arguments but, before addressing them, it should be noted that, despite them being raised in the context of arguments relating to whether indemnity costs should be ordered based on the 2025 offer being a “Calderbank offer”, the submissions were nevertheless repeated in the present context.
The defendant’s arguments, that it was not unreasonable to reject the offer in the circumstances, were as follows.
First, the defendant argued that the letter serving the offer of compromise did not, in essence, set out the weaknesses in his case (defendant’s submissions dated 26 May 2026 at [23](a)). I do not accept this submission. There is no requirement to provide such a letter in order to attract the operation, in this case, of r 42.14 of the UCPR. Although this was not the basis of the defendant’s argument, it is relevant to note the following. In the event that a party is unable to consider the offer due to, say, a lack of particulars, then the procedure in r 20.26(4) of the UCPR could have been followed. It was not. Nor was a submission made that, upon receipt of the offer, the defendant was not able to assess the plaintiff’s case and, thus, the 2025 offer.
Secondly, the defendant argued that he had some evidence, which was available to substantiate the claim he sought to propound at trial (defendant’s submissions dated 26 May 2026 at [23](b)). Further, the defendant argued that because an aspect of his evidence – relating to his conversation with Mr Lees – was not directly contradicted, that reinforced the reasonableness of the defendant’s rejection of the offer. I do not accept this submission. Whether the “loans” were varied in the way that the defendant argued was not established by any conversation that the defendant might have had with Mr Lees but could only be determined having regard to the conversation that the defendant alleged occurred during the lunch he had with Mr Daley, and other “surrounding evidence”.
Independently of that, the submission was no more than because there was argued to be some evidence available to establish the defendant’s case then that, necessarily, meant that it was not unreasonable to reject the offer. In my view, the circumstances presented by the service of the 2025 offer may be regarded as ordinary. In that situation, “it is not enough to justify ordering otherwise for a person who refused an offer of compromise to show that he/she acted reasonably in doing so”: Nominal Defendant v Hawkins [2011] NSWCA 93; 58 MVR 362 at [56]; rather, “there must be circumstances that justify departure from the general rule, that is, circumstances that are out of the ordinary”: Consolidated Lawyers Ltd v Abu-Mahmoud [2016] NSWCA 4 at [65].
The following remarks, from Morgan v Johnson (1998) 44 NSWLR 578, 582 are also apposite, and answer the defendant’s submission:
(4) Lying behind the rule is the common knowledge that “litigation is inescapably chancy”: Maitland Hospital (at 725). For this reason, the ordinary provision is expected to apply in the ordinary case: ibid NSW Insurance Ministerial Corporation v Reeve (at 102-103). The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the rule: NSW Insurance Ministerial Corporation v Reeve (at 102). As Clarke JA expressed it in Houatchanthara (at 2-3):
“The rule lays down the general principle that should be applied, and the order provided for in that rule should only be departed from for proper reasons which, in general, only arise in an exceptional case.
It is clear that if the rule operates, the plaintiff will be significantly disadvantaged, but that disadvantage flows naturally from the risks of litigation. The idea behind the rule is to encourage settlement or compromise of proceedings, and more specifically, to encourage litigants to give serious consideration to the settlement of proceedings. Where an offer is made by a defendant to a plaintiff, the latter is put on notice that unless he or she accepts that offer, there is a significant risk that the order provided for by the rule may follow. In declining to accept the offer, the plaintiff undertakes the risk and the consequences that flow naturally from that risk.”
Thirdly, the defendant argued that the finding of the Court, in rejecting the defendant’s account, was “heavily influenced by findings of credit against the [d]efendant from his evidence at trial” – and that, at the time of the offer, the defendant was not placed to make an assessment about such a matter (defendant’s submissions dated 26 May 2026 at [23](c)). I do not accept that submission. In my view, it was clear that the assessment of the credibility and reliability of each of the witnesses, and their evidence, would be an important matter at trial. The case did not rise and fall merely upon an assessment of the defendant’s credibility and reliability, as the submission assumed, but necessarily included a broader consideration of the probabilities and the plaintiff’s onus. The fact that, in this case, there were issues about the credibility and reliability of a party (and their evidence) is hardly unique. I do not accept, in the circumstances, that it provides a footing for the order the defendant seeks.
Fourthly, the defendant submitted that it was only until expert evidence was secured about interest that “the [d]efendant had evidence and a degree of confidence that the past interest payments claimed by the [p]laintiff would be uncontestably (sic)” (defendant’s submissions dated 26 May 2026 at [23](d)). I do not accept this submission. To the extent the submission sought to suggest that there were some difficulties in ascertaining the entitlement to interest, and its quantification, I do not accept the submission, which, I note, was unsupported by any evidence. As I have noted above, the defendant did not seek to invoke the procedure in r 20.26(4) of the UCPR and, further, and independently of this, the claim by the plaintiff was merely that, upon each of the five loans, contractual interest was payable in accordance with the rate referred to in Mr Daley’s notes. This was capable of calculation by the defendant – if necessary, through retaining an expert – at any time.
I am unpersuaded that any of the above matters, or their combination, justify the Court ordering otherwise as the defendant has argued.
The defendant advanced submissions directed to this rule – albeit conceding that when the rule is applied to the circumstances here, the plaintiff’s “offer of compromise is no less favourable than the… judgment amount” (defendant’s submissions dated 11 June 2026 at [20]).
In the present situation, r 42.16 of the UCPR requires consideration – and relevantly provides:
42.16 Costs with respect to interest
“(1) If a plaintiff obtains an order or judgment for the payment of a debt or damages and:
(a) the amount payable under the order or for which judgment is given includes interest or damages in the nature of interest…
...
then, for the purpose of determining the consequences as to costs referred to in rule 42.14…, the court must disregard so much of the interest, or damages in the nature of interest, as relates to the period after the day on which the offer was made. ....".
In Channel Seven Sydney Pty Ltd v Mahommed (No 2) (2011) 80 NSWLR 210; [2011] NSWCA 6, it was accepted that the rule “prohibits (for the purpose of determining the consequences as to costs referred to in, relevantly, UCPR 42.14) taking into account interest that relates to the period after the day on which the offer was made”: at [53].
The parties accepted that this had the consequence, when determining whether the judgment is no less favourable than the terms of the offer, of limiting the calculation of interest accruing up to the date on which the offer of compromise is made, but not thereafter: see also Tin-Tagel Majikk Pty Ltd v Hockey (No 2) [2025] NSWSC 1031 at [43].
Although the parties agreed upon the above approach, perhaps unusually, at least initially, there was small disagreement between them about the adjusted judgment sum.
The plaintiff submitted that the application of r 42.16 of the UCPR meant that the adjusted judgment sum was $3,969,659.38 (plaintiff’s submissions dated 11 June 2026 at [5]). The defendant, however, submitted that the adjusted judgment sum was either $3,968,495 or $3,976,319.48 (defendant’s submissions dated 11 June 2026 at [17]-[18]). The defendant also pointed out that, if a similar adjustment was made to the offer of compromise to that last calculation, the adjusted offer of compromise would be $3,876,319.48 (defendant’s submissions dated 11 June 2026 at [19]). However, in a supplementary submission dated 9 July 2026, the parties agreed that the adjusted judgment sum, for the purposes of this rule, was $3,969,018.59 (MFI 9).
It is unnecessary to dwell upon the different calculations by the defendant because not only did he acknowledge “that on either formulation of the comparison exercise, the value of the offer of compromise is no less favourable than the adjusted judgment amount” (defendant’s submissions dated 11 June 2026 at [20]), he has subsequently agreed with the plaintiff on the “adjusted judgment amount”.
It follows, therefore, that applying r 42.16 of the UCPR, the adjusted judgment sum is no less favourable than the offer of compromise ($3,868,495.00).
For the above reasons, I make the following order:
Vary order 3 made on 12 May 2026 as follows: pursuant to r 42.14 of the Uniform Civil Procedure Rules 2005 (NSW), order the plaintiff’s costs are to be assessed up to, and including, 1 May 2025 on the ordinary basis, and thereafter on an indemnity basis.
The power to order a stay is provided by s 67 of the Civil Procedure Act 2005 (NSW).
The principles that inform whether a stay should be granted in a situation such as this were set out in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, 694 (‘Alexander’). As there explained, whilst it is unnecessary for an applicant for a stay to establish special or exceptional circumstances, the applicant must demonstrate “a reason or an appropriate case to warrant the exercise of [the] discretion” in their favour: Alexander at 694.
The “reason” advanced by the defendant as justifying a stay was the potential prejudice to him. More specifically, the defendant submits that the prejudice to him would arise in the following way: whilst he does not hold cash (or equivalent) reserves to meet the judgment debt, he is in the process of selling his business which, if it proceeds, will yield funds “sufficient to meet the judgment debt”, whereas, to satisfy the judgment debt in the short term would require him to sell his residential home – which would be irreplaceable (defendant’s stay submissions at [9], [12] and [13]).
The defendant submits that, in the circumstances, the order sought by him should be made, particularly as the plaintiff’s financial position is unknown and they would, in any event, be protected by post-judgment interest which would accrue (defendant’s stay submissions at [8] and [11]). Further, the defendant submits that should a bankruptcy notice be served upon him, that would compromise his appeal, the sale of the business, and the conduct of the business itself (defendant’s stay submissions at [14]-[15]).
The plaintiff’s opposition focused upon the fact that no Notice of Appeal had been filed (nor any explanation proffered for why one had not been) and because the application was pursued for an ulterior purpose – said to be to “buy time rather than to facilitate an appeal” (plaintiff’s stay submissions at [5]-[6]).
Although it might have been preferable for a Notice of Appeal to have been filed, I do not regard the fact that one has not been to be determinative. Similarly, the fact that the “grounds” identified by the solicitor in his affidavit have the flavour of being something of a long shopping list of argued errors in the judgment, again, I do not regard that in the present case as determinative.
In relation to the argued prejudice, the plaintiff was strongly critical of the nature of the evidence adduced by the defendant. Mr Maconachie submitted that the evidence had considerable shortcomings, including, by way of illustration only:
there was no evidence from the defendant about the sale of the business (the evidence was only on information and belief given by the defendant’s solicitor and, even then, extending on occasions to evidence about what, apparently, was said to the defendant by others), and no other evidence of an objective kind that would enable the Court to be satisfied even in a preliminary way about the various matters relating to that proposed sale; and,
the evidence relating to the timeframe involved in the sale was expressed in exceedingly general terms, such as the “[d]efendant understand[ing] that the potential purchaser will complete their due diligence in the near future” and that there would be “ASIC and other regulatory approvals” but that the defendant did “not know the timeframe for regulatory approval” (McEwan affidavit at [18](d) and (e)).
There is considerable force to these criticisms.
Further, as Mr Maconachie submitted in relation to the implication that a bankruptcy notice might be issued, there is no suggestion that one has been threatened or even contemplated.
Notwithstanding the nature of the “grounds of appeal” proffered and the widespread fragility with the evidence produced by the defendant, I am not prepared to infer that the stay sought is for an ulterior purpose, as the plaintiff argued. That is not an end to the matter, however. Nor is the fact that the stay sought is only for a contextually short period of time.
In an application for a stay arising in the present circumstances, a successful party 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” and that, for this reason, “an appellant may be required to provide appropriate security as the price of a stay which may make the judgment creditor a secured creditor”: Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2014] NSWCA 231 at [8].
In relation to this issue, the defendant submits that there is “appropriate security” in place – namely, the likelihood that the sale of the business will proceed and that there will be a surplus available to satisfy the judgment debt (and costs), and the defendant’s ownership of residential property that is said to be unencumbered which is also available to satisfy the judgment debt (and costs).
The difficulty with the first submission is that it is underpinned by evidence that is in exceedingly general terms and depends very much on the say so of the defendant: in short, there is no material of any kind that enables the Court to assess the evidence, even in an appropriately preliminary way, to determine the likelihood of the sale of the business, and what would be cleared from it, if that eventuated. The difficulty with the second submission is that it rests upon the defendant’s evidence alone that the residential property is wholly unencumbered and has a value that exceeds the judgment debt. As to this last matter, there is no valuation (or valuation type) evidence of any kind.
Separately, in relation to the residential property, it was not accompanied by an undertaking not to deal with or dispose of that property during the currency of any stay. Absent protection of that (or comparable) kind, there remains a risk that this asset would be disposed of, or encumbered, to the obvious detriment of the plaintiff.
These matters were squarely raised with Mr Davies. His response, in effect, was that the Court should hold no concerns about security because little could be done by the defendant to dispose of (or deal with, adversely to the plaintiff) any of the defendant’s assets (in particular, the residential property) in the period of the stay sought: accordingly, he submitted, the stay should still be granted.
I do not accept this submission. No additional time was sought by the defendant to call further evidence or to provide any kind assurance that the “status quo” in relation to residential property would remain for the period of any stay.
I regard this as a significant shortcoming in the application. I remain unpersuaded, given this matter and the other limitations in the evidence, that this is an appropriate case for a stay.
For the above reasons I make the following orders:
Order the defendant’s notice of motion filed 16 June 2026 be dismissed.
Order the defendant pay the plaintiff’s costs of and incidental to the notice of motion.
**********
Philippa Jane Grasso and Alison Rose Manton as the Executors of the Estate of the Late David Daley
Geoffrey Charles O’Connell (No 2)
[2026] NSWSC 502
(1985) 2 NSWLR 685
(2011) 80 NSWLR 210
(1998) 44 NSWLR 578